mt-2021-12-31-en

Table of Contents

Page

Management report

Introduction

Company overview

History and development of the Company

Forward-looking statements

Key transactions and events in 2021

Risk Factors

Business overview

Business strategy

Research and development

Sustainable development

Products

Sales and marketing

Insurance

Intellectual property

Government regulations

Organizational structure

Properties and capital expenditures

Property, plant and equipment

Capital expenditures

100

Reserves and Resources (iron ore and coal)

102

Operating and financial review

Economic conditions

129

Operating results

151

Liquidity and capital resources

163

Disclosures about market risk

169

Outlook

171

Management and employees

Directors and senior management

Compensation

Corporate governance

Employees

Shareholders and markets

Major shareholders

211

Related party transactions

214

Markets

215

New York Registry Shares

215

Purchases of equity securities by the issuer and

affiliated purchasers

216

Page

Share capital

218

Additional information

Memorandum and Articles of Association

219

Material contracts

228

Exchange controls and other limitations affecting

security holders

229

Taxation

230

Evaluation of disclosure controls and procedures

234

Glossary - definitions, terminology and principal

subsidiaries

237

Chief executive officer and chief financial officer’s

responsibility statement

240

Consolidated financial statements

241

Consolidated statements of operations

242

Consolidated statements of other comprehensive

income

243

Consolidated statements of financial position

244

Consolidated statements of changes in equity

245

Consolidated statements of cash flows

246

Notes to the consolidated financial statements

247

Report of the réviseur d’entreprises agréé -

consolidated financial statements

360

Introduction

Company overview

ArcelorMittal is one of the world’s leading integrated steel and

mining companies. ArcelorMittal is the largest steel producer in

Europe and among the largest in the Americas, second largest

in Africa and the sixth largest steel producer in the CIS region

and has a smaller but growing presence in Asia.

*Iron ore production includes production from ArcelorMittal Mining Canada G.P.

and ArcelorMittal Infrastructure G.P. ("AMMC"), AM Liberia ("AML") and captive

mines.

The Company's key metrics above in 2020 include the U.S.

operations prior to their sale on December 9, 2020:

U.S. operations

(in million tonnes)

Crude steel

Iron ore

Production

9.93

5.83

Shipments

9.14

5.53

ArcelorMittal has steel-making operations in 16 countries on four

continents, including 37 integrated and mini-mill steel-making

facilities. As of December 31, 2021, ArcelorMittal had

approximately 158,000 employees.

ArcelorMittal produces a broad range of high-quality finished

and semi-finished steel products ("semis"). Specifically,

ArcelorMittal produces flat products, including sheet and plate,

and long products, including bars, rods and structural shapes. It

also produces pipes and tubes for various applications.

ArcelorMittal sells its products primarily in local markets and to a

diverse range of customers in approximately 155 countries,

including the automotive, appliance, engineering, construction

and machinery industries. ArcelorMittal’s mining operations

produce various types of mining products including iron ore

lump, fines, concentrate, pellets, sinter feed and coking coal.

As a global steel producer, the Company is able to meet the

needs of different markets. Steel consumption and product

requirements clearly differ between developed markets and

developing markets. Steel consumption in developed economies

is weighted towards flat products and a higher value-added mix,

while developing markets utilize a higher proportion of long

products and commodity grades. To meet these diverse needs,

the Company maintains a high degree of product diversification

and seeks opportunities to increase the proportion of higher

value-added products in its product mix.

History and development of the Company

ArcelorMittal results from the merger in 2007 of its predecessor

companies Mittal Steel Company N.V. and Arcelor, each of

which had grown through acquisitions over many years. Since

its creation ArcelorMittal has experienced periods of external

growth as well as consolidation and deleveraging (including

through divestment).

ArcelorMittal's success is built on its core values of

sustainability, quality and leadership and the entrepreneurial

boldness that has empowered its emergence as the first truly

global steel and mining company. Acknowledging that a

combination of structural issues and macroeconomic conditions

will continue to challenge returns in its sector, the Company has

adapted its footprint to the new demand realities, redoubled its

efforts to control costs and repositioned its operations with a

view toward outperforming its competitors. ArcelorMittal’s

research and development capability is strong and includes

several major research centers as well as strong academic

partnerships with universities and other scientific bodies.

Against this backdrop, ArcelorMittal's strategy is to leverage four

distinctive attributes that will enable it to capture leading

positions in the most attractive areas of the steel industry’s

value chain, from mining at one end to distribution and first-

stage processing at the other: global scale and scope; superior

technical capabilities; a diverse portfolio of steel and related

businesses, one of which is mining; and financial capabilities.

The Company’s strategy is further detailed under “Business

overview—Business strategy”.

ArcelorMittal’s steel-making operations have a high degree of

geographic diversification. Approximately 30% of its crude steel

was produced in the Americas, approximately 53% was

produced in Europe and approximately 17% was produced in

other countries, such as Kazakhstan, South Africa and Ukraine

in 2021. In addition, ArcelorMittal’s sales of steel products are

spread over both developed and developing markets, which

have different consumption characteristics. ArcelorMittal’s

mining operations are present in North and South America,

Management report

Africa, Europe and the CIS region and captive mines are

integrated with the Company's global steel-making facilities.

Competitive strengths

As shown by the following graph, ArcelorMittal has a diversified

portfolio of steel and mining products to meet a wide range of

customer needs across many steel-consuming sectors,

including automotive, appliance, engineering, construction,

energy and machinery and via distributors.

* Other steel sales mainly represent metal processing, machinery, electrical

equipment and domestic appliances

**Other sales mainly represent mining, chemicals & water, slag, waste, sale of

energy and shipping

The Company believes that the following factors contribute to

ArcelorMittal’s success in the global steel and mining industry:

Market leader in steel. ArcelorMittal had annual achievable

production capacity of approximately 82.7 million tonnes of

crude steel for the year ended December 31, 2021. Steel

shipments for the year ended December 31, 2021 totaled 62.9

million tonnes. ArcelorMittal has significant operations in many

countries which are described in "Properties and capital

expenditures". In addition, many of ArcelorMittal’s operating

units have access to developing markets that are expected to

experience, over time, above-average growth in steel

consumption (such as Central and Eastern Europe, South

America, India, Africa, CIS and Southeast Asia).

The Company sells its products in local markets and through a

centralized marketing organization to customers in

approximately 155 countries. ArcelorMittal’s diversified product

offering, together with its distribution network and research and

development (“R&D”) programs, enable it to build strong

relationships with customers, which include many of the world’s

major automobile and appliance manufacturers. The Company

is a strategic partner to several of the major original equipment

manufacturers (“OEMs”) and has the capability to build long-

term contractual relationships with them based on early vendor

involvement, contributions to global OEM platforms and

common value-creation programs.

A world-class mining business. ArcelorMittal has a global

portfolio of 12 operating units with mines in operation and

development and is among the largest iron ore producers in the

world. In 2021, ArcelorMittal sourced a large portion of its raw

materials from its own mines and facilities including finance

leases. The table below reflects ArcelorMittal's self-sufficiency

through its mining operations in 2021.

Millions of

metric tonnes 3

Consumption

Sourced from

own mines/

facilities2

Other

sources

Self-

sufficiency %

Iron ore

86.5

50.6

35.9

59%

PCI & coal1

34.8

3.3

31.5

Coke

20.7

19.4

1.3

94%

Scrap & DRI

29.8

14.9

50%

1.Includes coal only for the steelmaking process and excludes a small

proportion of ArcelorMittal's consumption of PCI and coal was 6.75 million

tonnes and 29.6 million tonnes, respectively, for the year ended December 31,

2021.

2.Assumes 100% consumption of ArcelorMittal's iron ore and coal production.

3. Includes consumption of ArcelorMittal Italia until April 14, 2021.

The Company has iron ore mining activities in Brazil, Bosnia,

Canada, Kazakhstan, Liberia, Mexico, Ukraine, South Africa and

through its joint venture in India and associate in Canada

(Baffinland). It has coal mining activities in Kazakhstan.

ArcelorMittal’s main mining products include iron ore lump,

fines, concentrate, pellets, sinter feed, metallurgical coals

including hard and weak coals. In addition, ArcelorMittal

produces substantial amounts of direct reduced iron ("DRI")

which is a scrap substitute used in its mini-mill facilities to

supplement external metallic purchases. As of December 31,

2021, ArcelorMittal’s iron ore reserves (including reserves at

mines where ArcelorMittal owns less than 100%, based on

ArcelorMittal's ownership percentage even if ArcelorMittal is

entitled to mine all the reserves, and including reserves for

which use is restricted) were estimated at 3,942 million tonnes

run of mine and its total coking coal reserves were estimated at

210 million tonnes run of mine. See “Property, Plant and

Management report

Equipment—Reserves and resources (iron ore and coal)” for a

detailed list of the entities with mineral reserves and resources

and ownership structure. The Company’s long-life iron ore and

coal reserves and resources provide a measure of security of

supply and an important natural hedge against raw material

volatility and global supply constraints. The seaborne iron ore

mining business is managed as a separate segment which

enhances ArcelorMittal’s ability to optimize capital allocation.

ArcelorMittal’s facilities have good access to shipping facilities,

including through ArcelorMittal’s own, or partially owned, 15

deep-water port facilities and linked railway sidings.

Market-leading automotive steel business. ArcelorMittal has

a leading market share with approximately 17% of the worldwide

market share in the automotive steel business as of December

31, 2021, and is a leader in the fast-growing advanced high

strength steels ("AHSS") segment, specifically for flat products.

ArcelorMittal is the first steel company in the world to embed its

own engineers within an automotive customer to provide

engineering support. The Company begins working with OEMs

as early as five years before a vehicle reaches the showroom, to

provide generic steel solutions, co-engineering and help with the

industrialization of the project. These relationships are founded

on the Company’s continuing investment in R&D and its ability

to provide well-engineered solutions that help make vehicles

lighter, safer and more fuel-efficient.

In 2010, ArcelorMittal initiated a development effort of dedicated

S-in motion® engineering projects. Its S-in motion® line (B,C&D

car segments, SUV, pick-up trucks, light commercial vehicles,

truck cabs, hybrid vehicles, battery electric vehicles ("BEVs")) is

a unique offering for the automotive market that respond to

OEMs’ requirements for safety, fuel economy and reduced CO2

emissions. By utilizing AHSS in the S-in motion® projects,

OEMs can achieve significant weight reduction using the

Company's emerging grades solutions such as Fortiform®, the

Company's third generation AHSS for cold forming, or Usibor®

2000 and Ductibor® 1000, the Company's latest AHSS grades

for hot stamping.

S-in motion® projects for electrical cars in the C segment as

well as for the plug-in hybrid C-segment were completed in

2019. There are multiple specificities for BEVs: shorter front

module, necessity to protect batteries against crash, lowering of

the center of gravity, huge additional weight due to batteries,

etc. These specificities require rethinking crash management. S-

in Motion® BEV for SUV is a catalog of steel solutions adapted

to this new type of vehicles. Advanced and especially ultra-high

strength steels, innovative press hardened steels, laser welded

blanks are especially highlighted as key solutions for an optimal

performance (safety/weight) and battery safety. The growth of

various types of electric vehicles will impact design and

manufacturing. For instance, new large mass batteries change

the mass distribution of a vehicle and impact the design and

manufacturing of the chassis and wheels. Battery protection

provides another example: both the battery box and body

structure have to protect the battery in the event of a crash.

AHSS products are among the most affordable solutions on the

market for these specific applications. In a context where the

supply of electric vehicles, and especially BEVs are expected to

grow quickly, new projects have been launched to address

these new trends.

In the automotive industry, ArcelorMittal mainly supplies the

geographic markets where its production facilities are located in

Europe, North and South America, South Africa and China

through Valin ArcelorMittal Automotive Steel Co., Ltd (“VAMA”),

its joint venture with Hunan Valin. VAMA’s product mix is

oriented toward higher value products and mainly toward the

OEMs to which the Company sells tailored solutions based on

its products. With sales and service offices worldwide,

production facilities in North and South America, South Africa,

Europe and China, ArcelorMittal believes it is uniquely

positioned to supply global automotive customers with the same

products worldwide. The Company has multiple joint ventures

and has also developed a global downstream network of

partners through its distribution solutions activities. This

provides the Company with a proximity advantage in virtually all

regions where its global customers are present.

In 2020, ArcelorMittal was OEM qualified for galvanized

Fortiform® 980 material, and sourced for the first time ever on

all new vehicle platforms launching throughout 2021.

Fortiform® 980 is an advanced grade of steel designed

specifically for the auto industry, it offers leading-edge

formability and strength with superior weldability. It is produced

at the Company's joint venture facility in Calvert, Alabama, USA.

In 2021, the automotive industry’s priority turned towards the

simplification of the vehicle manufacturing complexity linked to

the rising importance of electrical vehicles. ArcelorMittal’s

response is the Multi-Part Integration ("MPI") concept integrating

a large number of parts into one single component combining

PHS (Usibor®) and laser welding technology. Examples of MPI

are the rear H-Frame and the double door ring.

Sustainability (with focus on CO2 emission reduction in the

supply chain) has become a key requirement in the automotive

industry linked to the importance of sustainability in the holistic

electrical vehicle marketing concept. In 2021, ArcelorMittal has

launched two solutions under the XCarb™ brand: XCarb™

green steel certificates and XCarb™ recycled & renewable

produced, which was well received in industry and automotive

markets.

For further details on the new products under development, see

"Business overview—Research and development”.

Management report

Diversified and efficient producer. As a global steel

manufacturer with a leading position in many markets,

ArcelorMittal benefits from scale and production cost efficiencies

in various markets and a measure of protection against the

cyclicality of the steel industry and raw materials prices.

•Diversified production process. In 2021, approximately

52.9 million tonnes of crude steel were produced

through the basic oxygen furnace process and

approximately 16.2 million tonnes through the electric

arc furnace ("EAF") process. This provides

ArcelorMittal with greater flexibility in its raw material

and energy use, and increased ability to meet varying

customer requirements in the markets it serves.

•Product and geographic diversification. By operating a

portfolio of assets diversified across product segments

and geographic areas, ArcelorMittal benefits from a

number of natural hedges. As a global steel producer

with a broad range of high-quality finished and semi-

finished steel products, ArcelorMittal is able to meet the

needs of diverse markets. Steel consumption and

product requirements vary between mature economy

markets and developing economy markets. Steel

consumption in mature economies is largely from flat

products and a higher value-added mix, while

developing markets utilize a higher proportion of long

products and commodity grades. As developing

economies mature and as market needs evolve, local

customers will require increasingly advanced steel

products. To meet these diverse needs, ArcelorMittal

maintains a high degree of product diversification and

seeks opportunities to increase the proportion of its

product mix consisting of higher value-added products.

•Upstream integration. ArcelorMittal believes that its

own raw material production provides it with a

competitive advantage over time. Additionally,

ArcelorMittal benefits from the ability to optimize its

steel-making facilities’ efficient use of raw materials, its

global procurement strategy and the implementation of

company-wide knowledge management practices with

respect to raw materials. Certain of the Company’s

operating units also have access to infrastructure, such

as deep-water port facilities, railway sidings and

engineering workshops that lower transportation and

logistics costs.

•Downstream integration. ArcelorMittal’s downstream

integration, primarily through its Europe segment for

distribution solutions, enables it to provide customized

steel solutions to its customers more effectively. The

Company’s downstream assets have cut-to-length,

slitting and other processing facilities, which provide

value additions and help it to maximize operational

efficiencies.

Dynamic responses to market challenges and

opportunities. ArcelorMittal’s management team has a strong

track record and extensive experience in the steel and mining

industries. In line with its deleveraging focus at the time, it

announced in August 2019 that it had identified opportunities to

unlock up to $2 billion in value from its asset portfolio over the

then- following two years. In 2020, the Company completed its

goal with the sale of ArcelorMittal USA to Cleveland-Cliffs.

In 2020, the Company successfully reduced fixed costs,

including through temporary measures, in line with lower

production resulting from the impacts of the COVID-19

pandemic. This reduction was achieved through significant

savings in labor cost (including temporary salary reductions,

utilizing the available economic unemployment schemes to

match workforce to operating rates, temporary layoffs,

reduction/elimination of contractors, reduced overtime, etc.),

reduction in repairs and maintenance expenses (given lower

operating rates) and savings in selling, general and

administrative expenses. The comprehensive measures taken

to “variabilize” fixed costs were critical to protecting profitability

and cash flows. As economic activity recovered during the year,

the Company responded by restarting or increasing production,

leading to the reversal of some of these temporary savings. At

the same time, the Company remained focused on structural

cost improvements to appropriately position its fixed cost base

for the post-COVID-19 operating environment. These savings

were expected to limit the increase in fixed costs as activity and

production levels recover, thus leading to lower fixed costs per

tonne. In total, $1.0 billion of structural cost improvements were

identified within this fixed cost reduction program which was

expected to be fully realized in 2022. In 2021, the Company

achieved $0.6 billion of fixed cost savings relating to its

previously announced $1.0 billion structural improvement plan.

Savings were achieved through productivity gains and footprint

optimization (following closures at Krakow, coke plant in

Florange, and Saldanha); and SG&A savings including a 20%

reduction in corporate office costs including headcount

reduction. The Company did not make progress against its plan

related to repairs and maintenance following the decision taken

to maintain such expenditures at higher levels to ensure

operational reliability.

In February 2022, the Company has announced a new three

year $1.5 billion value plan focused on creating value through

well-defined commercial and operational initiatives. This plan

does not include the impact of strategic capital expenditure

projects (which will be followed separately). The plan includes

commercial initiatives, including volume/mix improvements and

operational improvements (primarily in variable costs). The plan

aims at protecting operating income potential of the business

Management report

from rising inflationary pressures, improving its relative

competitive position vis-a-vis its peers and supporting

sustainably higher profits.

Proven expertise in acquisitions and turnarounds.

ArcelorMittal’s management team has proven expertise in

successfully acquiring and subsequently integrating operations,

as well as turning around underperforming assets within tight

timeframes. The Company takes a disciplined approach to

investing and uses teams with diverse areas of expertise from

different business units across the Company to evaluate new

assets, conduct due diligence and monitor integration and post-

acquisition performance. The Company has grown through a

series of acquisitions and by improving the operating

performance and financial management at acquired facilities. In

particular, ArcelorMittal seeks to improve acquired businesses

by eliminating operational bottlenecks, addressing any historical

under-investments and increasing the capability of acquired

facilities to produce higher quality steel. The Company

introduces focused capital expenditure programs, implements

company-wide best practices, balances working capital, ensures

adequate management resources and introduces safety and

environmental improvements at acquired facilities. ArcelorMittal

believes that these operating and financial measures have

improved the operating performance and the quality of steel

produced at such facilities.

In recent years, the Company has focused on improving its

costs through its Action 2020 program and non-core asset

disposals as well as through some strategic M&A activity. In

2020, the Company sold ArcelorMittal USA and on April 14,

2021, Company has created a joint venture (Acciaierie d'Italia)

with the Italian government. For further details please see "Key

transactions and events in 2021".

The Company has announced a new three year $1.5 billion

value plan focused on creating value through well-defined

commercial and operational initiatives (see above).

Sustainability leadership.

ArcelorMittal is committed to leading the industry’s efforts to

decarbonize, and to be part of the solution to the world reaching

net-zero by 2050. In addition to its 2050 net-zero target, the

Company has recently set a group target of reducing its CO2

emissions intensity by 25% by 2030, and in its European

operations, by 35% by 2030 (scope 1 and 2 emissions). As

innovation is central to the Company's success with the onus it

places on research and development ("R&D") ensuring

ArcelorMittal is at the forefront of the evolution of steelmaking

processes and products, the Company has developed the

industry’s broadest and most flexible suite of low-emissions

steelmaking technologies and has integrated them into two

pathways, Smart Carbon and Innovative-DRI, both of which hold

the potential to deliver carbon-neutral steelmaking.

Other information

ArcelorMittal is a public limited liability company (société

anonyme) that was incorporated for an unlimited period under

the laws of the Grand Duchy of Luxembourg on June 8, 2001.

ArcelorMittal is registered at the R.C.S. Luxembourg under

number B 82.454.

The mailing address and telephone number of ArcelorMittal’s

registered office are:

ArcelorMittal

24-26, Boulevard d’Avranches

L-1160 Luxembourg

Grand Duchy of Luxembourg

Telephone: +352 4792-1

ArcelorMittal’s agent for U.S. federal securities law purposes is:

ArcelorMittal Sales & Administration LLC

833 W. Lincoln Highway, Suite 200E,

Schererville, IN 46375

Telephone: +219 256 7303

Internet site

ArcelorMittal maintains an Internet site at

www.arcelormittal.com. Information contained on or otherwise

accessible through this Internet site is not a part of this annual

report. All references in this annual report to this Internet site

and to any other Internet sites (other than to specific documents

furnished to or filed with the SEC and specifically incorporated

by reference herein) are inactive textual references and are for

information only.

The SEC maintains an internet site that contains reports, proxy

and information statements, and other information regarding

issuers that file electronically with the SEC at www.sec.gov.

ArcelorMittal produces a range of publications to inform its

shareholders. These documents are available in various

formats: they can be viewed online or downloaded. Please refer

to www.arcelormittal.com, where they can be located within the

Investors menu, under Financial Reports, or within the

Corporate Library.

Any request for documents may be sent to:

company.secretary@arcelormittal.com or ArcelorMittal’s

registered office.

Sustainable development

ArcelorMittal’s sustainable development information is detailed

in the Integrated Annual Review that will be published during the

second quarter of 2022 and will be available within the

Corporate Library on www.arcelormittal.com. For further

information, please refer to the section "Sustainable

Development".

Management report

ArcelorMittal as parent company of the ArcelorMittal group

ArcelorMittal, incorporated under the laws of Luxembourg, is the

parent company of the ArcelorMittal group and is expected to

continue this role during the coming years. The Company has

no branch offices.

Listings

ArcelorMittal’s shares (also referred to as "ordinary shares" or

"common shares" throughout this report) are traded on several

exchanges: New York (MT), Amsterdam (MT), Paris (MT),

Luxembourg (MT) and on the Spanish stock exchanges of

Barcelona, Bilbao, Madrid and Valencia (MTS). Its primary stock

exchange regulator is the Luxembourg CSSF ("Commission de

Surveillance du Secteur Financier"). ArcelorMittal’s CSSF issuer

number is E-0001.

ArcelorMittal’s 5.50% Mandatorily Convertible Subordinated

Notes ("MCNs") due 2023 issued in May 2020 are listed on the

New York Stock Exchange.

Indexes

ArcelorMittal is a member of more than 145 indices including:

STOXX Europe 600, S&P Europe 350, CAC40, MSCI Pan-Euro,

Bloomberg World Index, IBEX 35, Euronext Paris CAC Basic

Materials Index, DAXglobal Steel EUR Price and Euronext

Amsterdam AEX Basic Materials Index. Recognized for its

commitments to sustainable development, ArcelorMittal is also

included in the FTSE4Good Index, Euronext Vigeo Europe 120

and the Euronext Most Advanced Benelux 20. Further,

ArcelorMittal has been participating in CDP Climate since 2005

and the United National Global Compact since 2003.

Share price performance

During 2021, the price of ArcelorMittal shares increased by 38%

in dollar terms compared to 2020 year on year; the chart below

shows a comparison between the performance of ArcelorMittal’s

shares and the Eurostoxx600 Basic Resource (SXPP).

Capital return policy

On June 8, 2021, at the annual general meeting of

shareholders, the shareholders approved the dividend of $0.30

per share proposed by the Board of Directors. The dividend

amounted to $325 million and was paid on June 15, 2021.

In accordance with its capital return policy, the Company

expects to pay a base annual dividend (to be progressively

increased over time). In addition, 50% of the amount of free

cash flow (calculated as net cash provided by operating

activities less purchases of property, plant and equipment and

intangibles ("capital expenditures") less dividends paid to non-

controlling shareholders) remaining after paying the base annual

dividend is allocated to a share buyback program to be

completed over the subsequent 12 month period. Should the

ratio of net debt to operating income (loss) less depreciation,

impairment and special items be greater than 1.5x then the

share buyback will not be made.

During 2021, as part of its capital return policy, ArcelorMittal

completed early redemptions of MCNs in the amount of $1.2

billion as well as five consecutive share buyback programs

Management report

corresponding to the repurchase of 170.9 million shares for a

total amount of €4.4 billion ($5.2 billion). Including the $0.5

billion share buyback program that was completed on October

30, 2020, the Company returned since then and through 2021 in

total $7.2 billion to shareholders under the above-mentioned

capital return policy.

In February 2022, the Board of Directors recommended an

increase of the base annual dividend to $0.38/share (from

$0.30/share paid in 2021) to be paid in June 2022, subject to the

approval of shareholders at the annual general meeting of

shareholders in May 2022. In addition, the Company has

initiated a new $1.0 billion share buyback program for first half

of 2022. This is the maximum based on the current authorization

provided by shareholders at the annual general meeting of

shareholders in June 2021. Additional authorization to

repurchase shares will be sought from shareholders at the 2022

annual general meeting of shareholders.

Investor relations

ArcelorMittal has a dedicated investor relations team at the

disposal of analysts and investors. By implementing high

standards of financial information disclosure and providing clear,

regular, transparent and even-handed information to all its

shareholders, ArcelorMittal aims to be the first choice for

investors in the sector.

To meet this objective and provide information to fit the needs of

all parties, ArcelorMittal implements an active and broad

investor communications policy: conference calls, road shows

with the financial community, regular participation at investor

conferences, plant visits and meetings with individual investors.

ArcelorMittal’s senior management plans to meet investors and

shareholder associations in road shows throughout 2022.

Depending on their geographical location, investors may use the

following e-mails or contact numbers to reach the investor

relations team:

investor.relations@arcelormittal.com

+44 203 214 2893

privateinvestors@arcelormittal.com

+44 203 214 2893

creditfixedincome@arcelormittal.com

+33 1 7192 1026

Sustainable responsible investors

The Investor Relations team is also a source of information for

the growing sustainable responsible investment community. The

team organizes special events on ArcelorMittal’s corporate

responsibility strategy and answers all requests for information

sent to the Group investor.relations@arcelormittal.com or may

be contacted at +44 203 214 2893.

Financial calendar

The schedule is available on ArcelorMittal’s website

www.arcelormittal.com under Investors>Financial calendar.

Financial results*:

Results for the 1st quarter 2022

May 5, 2022

Results for the 2nd quarter 2022 and 6 months 2022

July 28, 2022

Results for the 3rd quarter 2022

November 10, 2022

Meeting of shareholders:

Annual general meeting of shareholders

May 4, 2022

* Earnings results are issued before the opening of the stock exchanges on which ArcelorMittal

is listed.

Contact the investor relations team on the information detailed

above or please visit www.arcelormittal.com/corp/investors/

contact.

Cautionary Statement Regarding Forward-Looking Statements

This annual report contains forward-looking statements based

on estimates and assumptions. This annual report contains

forward-looking statements within the meaning of the Private

Securities Litigation Reform Act of 1995. Forward-looking

statements include, among other things, statements concerning

the business, future financial condition, results of operations and

prospects of ArcelorMittal, including its subsidiaries. These

statements usually contain the words “believes”, “plans”,

“expects”, “anticipates”, “intends”, “estimates” or other similar

expressions. For each of these statements, you should be

aware that forward-looking statements involve known and

unknown risks and uncertainties. Although it is believed that the

expectations reflected in these forward-looking statements are

reasonable, there is no assurance that the actual results or

developments anticipated will be realized or, even if realized,

that they will have the expected effects on the business,

financial condition, results of operations or prospects of

ArcelorMittal.

These forward-looking statements speak only as of the date on

which the statements were made, and no obligation has been

undertaken to publicly update or revise any forward-looking

statements made in this annual report or elsewhere as a result

of new information, future events or otherwise, except as

required by applicable laws and regulations. A detailed

discussion of principal risks and uncertainties which may cause

actual results and events to differ materially from such forward-

looking statements is included in the section titled “Risk factors”.

The Company undertakes no obligation to update or revise

publicly any forward-looking statements whether because of

new information, future events, or otherwise, except as required

by securities and other applicable laws.

Management report

All information that is not historical in nature and disclosed

under “Operating and financial review ” is deemed to be a

forward-looking statement.

Market information

This annual report includes industry data and projections about

the Company’s markets obtained from industry surveys, market

research, publicly available information and industry

publications. Statements on ArcelorMittal’s competitive position

contained in this annual report are based primarily on public

sources including, but not limited to, published information from

the Company's competitors. Industry publications generally

state that the information they contain has been obtained from

sources believed to be reliable but that the accuracy and

completeness of such information is not guaranteed and that the

projections they contain are based on a number of significant

assumptions. The Company has not independently verified this

data or determined the reasonableness of such assumptions. In

addition, in many cases the Company has made statements in

this annual report regarding its industry and its position in the

industry based on internal surveys, industry forecasts and

market research, as well as the Company’s experience. While

these statements are believed to be reliable, they have not been

independently verified.

Financial information

This annual report contains the audited consolidated financial

statements of ArcelorMittal and its consolidated subsidiaries,

including the consolidated statements of financial position as of

December 31, 2021 and 2020, and the consolidated statements

of operations, other comprehensive income, changes in equity

and cash flows for each of the years ended December 31, 2021,

2020 and 2019. ArcelorMittal’s consolidated financial statements

were prepared in accordance with International Financial

Reporting Standards (“IFRS”) as issued by the International

Accounting Standards Board (“IASB”) and as adopted by the

European Union.

The financial information and certain other information

presented in a number of tables in this annual report have been

rounded to the nearest whole number or the nearest decimal.

Therefore, the sum of the numbers in a column may not conform

exactly to the total figure given for that column. In addition,

certain percentages presented in the tables in this annual report

reflect calculations based upon the underlying information prior

to rounding and, accordingly, may not conform exactly to the

percentages that would be derived if the relevant calculations

were based on the rounded numbers. This annual report

includes net debt, operating working capital and free cash flow,

which are non-GAAP financial measures. ArcelorMittal believes

net debt, operating working capital and free cash flow to be

relevant to enhance the understanding of its financial position

and provides additional information to investors and

management with respect to the Company’s operating cash

flows, capital structure and credit assessment. In addition, it

refers to “special” items in its capital return policy which will be

used to determine if the base dividend will be paid. “Special”

items relate to events or charges that the Company does not

consider to be part of the normal income generating potential of

the business. Items may qualify as “special” although they may

have occurred in prior years or are likely to recur in following

years. Non-GAAP financial measures should be read in

conjunction with and not as an alternative for, ArcelorMittal’s

financial information prepared in accordance with IFRS. Such

non-GAAP measures may not be comparable to similarly titled

measures applied by other companies.

Key transactions and events in 2021

During 2021, ArcelorMittal completed several financing and

liability management transactions. Please refer to the "Business

overview - Liquidity and capital resources" and "Business

overview - Financings" of this report for a summary of these

transactions.

•On February 9, 2021, ArcelorMittal announced an

agreement to sell 40 million Cleveland-Cliffs shares for total

gross proceeds of $652 million (net proceeds of $16.12 per

share) as part of a combined primary and secondary public

offering of Cleveland-Cliffs shares. Following the sale,

ArcelorMittal continued to hold 38.2 million common shares

in addition to preferred shares redeemable at Cleveland-

Cliffs's option for 58 million common shares. On June 18,

2021, ArcelorMittal announced the conclusion of the sale of

its remaining 38.2 million common shares in Cleveland-

Cliffs Inc. The proceeds from the sale of Cleveland-Cliffs

common shares were returned to shareholders via a new

$750 million share buyback program of ArcelorMittal

common shares. On July 28, 2021, ArcelorMittal announced

it had received $1.2 billion in cash from Cleveland-Cliffs

following the purported redemption of Cleveland-Cliffs

preferred shares ($1.3 billion following a final review of the

redemption notice). The redemption of the preferred stock

by Cleveland-Cliffs brought the total cash proceeds from

the sale of ArcelorMittal USA to $3.2 billion, all of which

have been returned to ArcelorMittal shareholders via share

buybacks.

•On February, 11, 2021, the Board of Directors of

ArcelorMittal announced, effective immediately, that Aditya

Mittal, formerly President, CFO and CEO ArcelorMittal

Europe, would become Chief Executive Officer of the

Company. Lakshmi N. Mittal, who founded the Company in

1976 and was Chairman and CEO, became Executive

Chairman. In this position Mr. Lakshmi N. Mittal continues

to lead the Board of Directors and work together with the

Management report

CEO and management team. The CEO Office was

renamed Executive Office, consisting of the Executive

Chairman and the CEO. As a result of these developments,

Genuino Christino, who joined the Company in 2003 and

had held the position of Head of Finance since 2016,

became CFO.

•On March 4, 2021, ArcelorMittal announced the completion

of its first share buyback program under the authorization

given by the annual general meeting of shareholders held

on June 13, 2020. By market close on March 3, 2021, the

Company had repurchased 27.1 million shares for a total

amount of €537 million ($650 million) at an average price

per share of €19.79 (equivalent to $23.97).

•On March 17, 2021, ArcelorMittal announced the launch of

its first three XCarb™ initiatives as part of the Company's

journey to deliver on its 2050 net zero commitment.

XCarb™ will ultimately bring together all of ArcelorMittal's

reduced, low and zero-carbon products and steelmaking

activities, as well as wider initiatives and green innovation

projects, into a single effort focused on achieving

demonstrable progress towards carbon neutral steel. To

support its launch, ArcelorMittal announced three XCarb™

branded initiatives:

•‘XCarb™ green steel certificates’, which will enable the

Company to support its customers as they seek to

reduce their Scope 3 emissions. CO2 savings achieved

through technology investments at ArcelorMittal Europe

- Flat Products operations are aggregated,

independently assured, and then converted into

XCarb™ green steel certificates which customers can

attach to their physical orders of steel, enabling them to

report a reduction in their Scope 3 carbon emissions in

accordance with the GHG Protocol Corporate

Accounting and Reporting Standard. The Company

anticipates it will have 600,000 tonnes of equivalent

green steel tonnes available by the end of 2022.

•‘XCarb™ recycled and renewably produced’ has been

designed for products made via the Electric Arc

Furnace (‘EAF’) route using scrap steel. Recycled and

renewably produced means that the physical steel was

made with recycled material (scrap) using renewable

electricity, giving it an extremely low CO2 footprint that

can be as low as approximately 300kg of CO2 per

tonne of finished steel when the metallics are 100%

scrap. This customer offer is for both flat and long

products. The electricity used in the steelmaking

process is independently verified, with a ‘Guarantee of

Origin’ given that it is from renewable sources.

•‘XCarb™ innovation fund’: ArcelorMittal has launched

an innovation fund which will invest up to $100 million

annually in groundbreaking companies developing

pioneering or breakthrough technologies that will

accelerate the steel industry's transition to carbon

neutral steelmaking.

•On March 29, 2021, ArcelorMittal announced that it is

planning to build a large-scale industrial plant for the DRI

and EAF-based steelmaking at its site in Bremen, as well

as an innovative DRI pilot plant in addition to EAF in

Eisenhüttenstadt, following the announcement of the

planned expansion of Germany’s hydrogen infrastructure.

Using green hydrogen, up to 3.5 million tonnes of steel

could be produced by the Bremen and Eisenhüttenstadt

sites by 2030, with significantly lower CO2 emissions.

Depending on the amount of hydrogen available, CO2

savings of more than 5 million tonnes could be possible.

The technology conversion requires investments in the

range of €1-1.5 billion.

•On April 14, 2021, pursuant to the investment agreement of

December 10, 2020 forming a public-private partnership

between Invitalia - Agenzia nazionale per l'attrazione degli

investimenti e lo svliuppo d'impresa SpA ("Invitalia"), an

Italian state-owned company, and AM InvestCo Italy SpA

("AM InvestCo"), ArcelorMittal's subsidiary party to the

lease and purchase agreement for the Ilva business,

Invitalia invested €400 million ($476 million) of new equity

into AM InvestCo, providing Invitalia with a 38%

shareholding, equal voting and governance rights and

therefore joint control. Going forward, AM InvestCo,

thereupon renamed Acciaierie d'Italia Holding, will operate

independently and as such will have its own funding plans.

Accordingly, as of April 14, 2021, the Company

derecognized the assets and liabilities of Acciaierie d'Italia

Holding and its subsidiaries from its consolidated statement

of financial position and accounted for its 62% interest in

the joint venture under the equity method. The investment

agreement stipulates a second equity injection by Invitalia,

of up to €680 million, to fund the completion of the purchase

of Ilva’s business by Acciaierie d'Italia Holding, subject to

certain conditions precedent to be met by May 2022. At this

point, Invitalia’s shareholding in Acciaierie d'Italia would

increase to 60%. ArcelorMittal may need to invest up to €70

million to the extent necessary to retain a 40% shareholding

and joint control over the company.

•ArcelorMittal announced on June 18, 2021 the completion

of its second share buyback program pursuant to an

authorization by the annual general meeting of

shareholders on June 13, 2020 and June 8, 2021. At

market closure on June 17, 2021, ArcelorMittal had

repurchased 17.8 million shares for a total value of

Management report

approximately €469 million (equivalent to $570 million) at

an average price per share of €26.27 (equivalent to

$31.94).

•On June 28, 2021, as previously announced in

ArcelorMittal’s first quarter 2021 financial results, following

the Company’s steps to streamline and optimize its

business, primary responsibility for the management of its

captive mining operations (those mining operations which

primarily serve the Company’s steel operations) was moved

from its Mining segment to the relevant steel segment. The

Mining segment retains responsibility for the operation of

the seaborne-oriented mining operations at AMMC and

Liberia and continues to provide technical support to all

mining operations within the Company.

•ArcelorMittal announced on July 7, 2021 the completion of

its third share buyback program pursuant to an

authorization by the annual general meeting of

shareholders on June 13, 2020 and June 8, 2021. At

market closure on July 5, 2021, ArcelorMittal had

repurchased 24.5 million shares for a total value of €630

million (equivalent to $750 million) at an average price per

share of €25.77 (equivalent to $30.66).

•On July 13, 2021, ArcelorMittal signed a memorandum of

understanding with the Spanish Government for a €1 billion

investment in decarbonization technologies at ArcelorMittal

Asturias’ plant in Gijón (Spain). New DRI and electrical

arch furnace installations will reduce CO2 emissions at

ArcelorMittal’s Spanish operations by up to 4.8 million

tonnes, which represents approximately 50% of emissions,

within the next five years. The DRI installation in Gijón will

also enable ArcelorMittal Sestao to be the world’s first full-

scale zero carbon-emissions steel plant.

•On July 20, 2021 ArcelorMittal announced that it had

achieved ResponsibleSteel™ site certification in Belgium,

Germany and Luxembourg. The Company’s steelmaking

sites in ArcelorMittal Belgium (Geel, Genk, Ghent and

Liège), Luxembourg (Belval, Differdange and Rodange) and

Germany (Bremen and Eisenhüttenstadt) are the first steel

plants globally to be independently audited and found to

meet the standards required for ResponsibleSteel, the

industry’s first global multi-stakeholder standard and

certification initiative. The ResponsibleSteel audit process

enables each site to prove that its production processes

meet rigorously defined standards across a broad range of

social, environmental and governance criteria including

climate change and greenhouse gas emissions, water

stewardship and biodiversity, human rights and labor rights,

community relations and business integrity.

•On July 30, 2021, ArcelorMittal announced with the

Canadian Government its intention for a CAD$1.8 billion

investment in decarbonization technologies at ArcelorMittal

Dofasco’s plant in Hamilton. The intended investments will

reduce annual CO2 emissions at ArcelorMittal’s Hamilton,

Ontario operations by approximately 3 million tonnes, which

represents approximately 60% of emissions. At the heart of

the plan is a 2.5 million tonne capacity DRI facility and an

EAF facility capable of producing 2.4 million tonnes of high-

quality steel through its existing secondary metallurgy and

secondary casting facilities. Modification of the existing EAF

facility and continuous casters will also be undertaken to

align productivity, quality and energy capabilities between

all assets in the new footprint. The investment was

contingent on support from the governments of Canada and

Ontario. The Canadian Government announced on July 30,

2021 that it would invest CAD$400 million in the project and

on February 15, 2022, the Government of Ontario

announced that it would invest CAD$500 million in the

project. This secures project funding and firms up the

investment. The project is scheduled to be complete by

2028, although the Company is looking for opportunities to

accelerate the project timelines. Besides a considerable

reduction of CO2 emissions, the new manufacturing

processes contribute deliver other positive environmental

impacts including the elimination of emissions and flaring

from coke making and ironmaking operations.

•On August 4, 2021 and September 22, 2021, in line with the

authorization granted by the extraordinary general meeting

of shareholders held on June 8, 2021, the Board of

ArcelorMittal decided to cancel 70 million and 50 million

treasury shares, respectively, to keep the number of

treasury shares within appropriate levels. This cancellation

also takes into account the $2.2 billion share buyback

announced on July 29, 2021. As a result of these

cancellations, ArcelorMittal had 982,809,772 shares in

issue (compared to 1,102,809,772 before the cancellation).

•On September 10, 2021, the Liberian Government and

ArcelorMittal signed an amendment to the Mineral

Development Agreement ("MDA"). The agreement is

currently under the legislative ratification process. The

expansion project - which encompasses processing, rail

and port facilities - would be one of the largest mining

projects in West Africa. The capital required to finalize the

project is expected to be approximately $0.8 billion

(currently under review given impacts of inflation and

enlarged scope), as it is effectively a brownfield expansion.

The expansion project includes the construction of a new

concentration plant and the substantial expansion of mining

operations, with the first concentrate expected in late 2023,

ramping up to 15 million tonnes per annum. Under the

Management report

agreement the Company will have reservation for

expansion for at least up to 30 million tonnes. Other users

may be allowed to invest for additional rail capacity.

•On September 28, 2021, ArcelorMittal announced that it

had signed a letter of intent with the Governments of

Belgium and Flanders, supporting a €1.1 billion project to

build a 2.5 million-tonne DRI plant and EAF facility at its site

in Ghent. A DRI plant uses natural gas, and potentially

hydrogen, instead of coal to reduce iron ore, resulting in a

large reduction in CO2 emissions compared with blast

furnace iron making. The two electric furnaces will melt the

DRI and scrap steel, which will then be transformed in the

steel shop into steel slabs and then further processed into

finished products. Once the DRI and electric furnaces are

built, there will be a transition period during which

production will move gradually from blast furnace A, to the

DRI and electric furnaces, after which blast furnace A will be

closed as it reaches the end of its life. By 2030, this will

result in a reduction of around three million tonnes of CO2

emissions each year. The support of both the national and

the Flanders governments in this project is crucial given the

significant cost associated with the transition to carbon-

neutral steelmaking. Approval from the European

Commission for the funding support will also be required.

•On September 30, 2021, ArcelorMittal announced that

Stefan Buys had been nominated Executive Vice President

of ArcelorMittal and appointed as CEO of ArcelorMittal

Mining, effective October 1, 2021. Stefan replaced Simon

Wandke who retired, following a career of 40 years in the

Mining industry, the last 11 of which were with ArcelorMittal.

•On November 3, 2021, ArcelorMittal and the government of

Quebec announced a CAD$205 million investment by

AMMC in its Port-Cartier pellet plant, enabling this facility to

convert its entire 10 million tonne annual pellet production

to DRI pellets by the end of 2025. The investment, in which

the Quebec government will contribute through an

electricity rebate of up to CAD$80 million, will enable the

Port-Cartier plant to become one of the world’s largest

producers of DRI pellets, the raw material feedstock for iron

making in a DRI furnace. The project includes the

implementation of a flotation system that will enable a

significant reduction of silica in the iron ore pellets,

facilitating the production of a very high-quality pellet. The

project is expected to have a direct annual CO2e reduction

of approximately 200,000 tonnes at AMMC’s Port-Cartier

pellet plant, equivalent to over 20% of the pellet plant’s total

annual CO2e emissions. This reduction in CO2e emissions

will be achieved through a reduction in the energy required

during the pelletizing process.

•On November 17, 2021, ArcelorMittal announced the

completion of its fourth share buyback program pursuant to

an authorization by the annual general meeting of

shareholders on June 8, 2021. At market closure on

November 16, 2021, ArcelorMittal had repurchased 67.4

million shares for a total value of €1.9 billion (equivalent to

$2.2 billion) at an average price per share of €27.91

(equivalent to $32.64).

•On December 9, 2021, ArcelorMittal announced that it had

made a $30 million investment in carbon recycling

company, LanzaTech through its XCarb™ innovation fund,

the fourth investment the Company has made through the

fund since its launch in March 2021. The investment further

expands ArcelorMittal’s relationship with LanzaTech, which

commenced in 2015 when the Company first announced

plans to utilise LanzaTech’s carbon capture and re-use

technology at its plant in Ghent, Belgium. The €180 million

Carbalyst® plant – ArcelorMittal’s flagship carbon capture

and re-use technology project - is currently under

construction, with commissioning expected before the end

of 2022. Also known as the Steelanol project, funding has

been obtained from various sources, including from the

European Union's Horizon 2020 program, the European

Investment Bank and the Belgian and Flemish

governments. Using LanzaTech’s gas fermentation

technology, which captures carbon-rich waste gases from

the steelmaking process and converts them into sustainable

fuels and chemicals, the plant should reduce ArcelorMittal

Ghent’s CO2e emissions by 125,000 tonnes a year. It will

also produce 80 million liters of bio-ethanol annually, which

can be blended with traditional gasoline and used as a low-

carbon alternative fuel for the transport sector. LanzaTech is

also developing technology to convert captured emissions

into a range of other chemical building blocks to make

useful materials, such as textiles, rubber, and packaging.

•On December 13, 2021, ArcelorMittal signed separate,

privately negotiated agreements with a limited number of

holders of MCNs to repurchase $395 million in aggregate

principal amount of MCNs at the minimum conversion ratio

for an aggregate cash consideration of $1.2 billion. The

repurchase of this aggregate principal amount of MCNs

was equivalent to repurchasing approximately 36.6 million

shares of ArcelorMittal common shares that would

otherwise be issuable at maturity under the MCNs (at the

minimum conversion ratio). Pursuant to the repurchase

agreements the repurchased MCNs have been cancelled

and therefore will not convert into common shares of the

Company. Following completion of the repurchases on

December 23, 2021, $608 million aggregate principal

amount of the MCNs remained outstanding as of December

31, 2021. This transaction was a further step in the

Management report

Company's ongoing capital return program. See note 11.2

to the consolidated financial statements.

•On December 29, 2021, ArcelorMittal announced the

completion of its fifth share buyback program announced on

November 17, 2021 pursuant to an authorization by the

annual general meeting of shareholders on June 8, 2021. At

market closure on December 28, 2021, ArcelorMittal had

repurchased 34.0 million shares for a total value of €886

million (equivalent to $1.0 billion) at an average price per

share of €25.99 (equivalent to $29.34). This brought the

total advance as part of its prospective 2022 capital return

to shareholders (to be funded from 2021 surplus cash flow

under the capital return policy announced February 2021)

to $2 billion.

Recent developments

•On January 14, 2022, ArcelorMittal announced that 45

million treasury shares had been cancelled to keep the

number of treasury shares within appropriate levels. This

cancellation takes into account the shares already

purchased under the $1 billion share buyback announced

on November 17, 2021, which was completed on December

28, 2021. As a result of these cancellations, ArcelorMittal

had 937,809,772 shares in issue (compared to 982,809,772

before the cancellation).

•On February 4, 2022, ArcelorMittal announced an

acceleration of its decarbonization with €1.7 billion

investment program by 2030 at its French steelmaking sites

in Fos-sur-Mer and Dunkirk with support from the French

Government while maintaining equivalent production

capacities. This investment will enable a profound

transformation of steelmaking in France and a total

reduction of close to 40% or 7.8 million tonnes per year in

ArcelorMittal’s CO2 emissions in France by 2030. This

transformation will represent a 10% reduction in

greenhouse gas emissions from the manufacturing industry

in France and put France’s steelmaking industry on the

path of the Paris Agreement. In Fos-sur-Mer, ArcelorMittal

will build an EAF, which will complement the ladle furnace

announced in March 2021 and supported by France’s

recovery plan, ‘France Relance’. Together these

investments will turn Fos-sur-Mer into a reference site for

the production of low carbon, circular steel, made from

recycled steel. In Dunkirk, ArcelorMittal will build a 2.5

million tonne DRI unit to transform iron ore using hydrogen

instead of coal. This DRI will be coupled with an innovative

technology electric furnace and completed by an additional

EAF. Other investments are already under way to continue

to increase the proportion of scrap steel used. The new

industrial facilities will be operational starting in 2027 and

will gradually replace 3 out of 5 of ArcelorMittal’s blast

furnaces in France by 2030 (2 out of 3 in Dunkirk, 1 out of 2

in Fos-sur-Mer).

•On February 11, 2022, ArcelorMittal announced a new

share buyback program in the amount of $1 billion under

the authorization given by the annual general meeting of

shareholders of June 8, 2021. The program is expected to

be completed during the first half of 2022, subject to market

conditions. The shares acquired under the program are

intended to meet ArcelorMittal’s obligations under debt

obligations exchangeable into equity securities, reduce

ArcelorMittal’s share capital, and/or meet ArcelorMittal’s

obligations arising from employee share programs. On

February 25, 2022, ArcelorMittal announced that its

Significant Shareholder would not sell shares to

ArcelorMittal in proportion to shares purchased on the

market by ArcelorMittal; accordingly its percentage holding

of issued and outstanding shares will increase as the share

buyback program is implemented.

•On March 3, 2022, ArcelorMittal announced its decision to

idle its steelmaking operations in Kryvyi Rih, Ukraine in

order to ensure the safety and security of its employees and

assets. The Company has been evaluating the situation on

a daily basis and production had previously been reduced

with the plant operating at a technical minimum

(approximately one-third of its normal production levels).

The process to safely idle all blast furnaces while

maintaining asset integrity commenced on the same day.

For further information on ArcelorMittal’s ongoing capital

expenditure projects, see “Properties and capital expenditures—

Capital expenditures”.

Management report

Risk factors

ArcelorMittal’s business, financial condition, results of operations, reputation or prospects could be materially and adversely affected by

one or more of the risks and uncertainties described below.

Summary

Our business is subject to numerous risks and uncertainties, including those highlighted under “Detailed risk factors” below. These risks

include, but are not limited to, the following:

Risks related to the global economy and the mining and steel industry

Prolonged low steel and (to a lesser extent) iron ore prices and/or low steel demand would have an adverse effect on ArcelorMittal’s results of

operations.

Volatility in the supply and prices of raw materials, energy and transportation, and volatility in steel prices or mismatches between steel prices

and raw material prices could adversely affect ArcelorMittal’s results of operations.

Excess capacity and oversupply in the steel industry and in the iron ore mining industry have in the past and may continue in the future to weigh

on the profitability of steel producers, including ArcelorMittal.

Unfair trade practices, import tariffs and/or barriers to free trade could negatively affect steel prices and ArcelorMittal’s results of operations in

various markets.

Russia’s invasion of Ukraine, international reaction to it (in particular in the form of sanctions) and any regional or global escalation of the

conflict, could adversely affect the Company’s business, results of operations and financial condition.

Developments in the competitive environment in the steel industry could have an adverse effect on ArcelorMittal’s competitive position and

hence its business, financial condition, results of operations or prospects.

Competition from other materials and alternative steel based technologies could reduce market prices and demand for steel products and

thereby reduce ArcelorMittal’s cash flows and profitability.

II.

Risks related to ArcelorMittal's operations

ArcelorMittal’s level of profitability and cash flow currently is and, depending on market and operating conditions, may in the future be,

substantially affected by its ability to reduce costs and improve operating efficiency.

The Group’s carbon emissions intensity reduction targets are based on current assumptions with respect to the costs, government and societal

support for the reduction of carbon emissions in particular regions and the advancement of technology and infrastructure related to the

reduction of carbon emissions over time. Future developments may affect such assumptions, and this may render the achievement of

ArcelorMittal’s targets more difficult, or even impossible to achieve for cost or other reasons.

ArcelorMittal has incurred and may incur in the future operating costs when production capacity is idled or increased costs to resume production

at idled facilities.

ArcelorMittal could experience labor disputes that may disrupt its operations and its relationships with its customers and its ability to rationalize

operations and reduce labor costs in certain markets may be limited in practice or encounter implementation difficulties.

Disruptions to ArcelorMittal’s manufacturing processes caused for example by equipment failures, natural disasters, accidents, epidemics or

pandemics or geopolitical conflicts or extreme weather events could adversely affect its operations, customer service levels and financial results

and liabilities.

ArcelorMittal’s insurance policies provide limited coverage, potentially leaving it uninsured against some business risks.

ArcelorMittal’s reputation and business could be materially harmed as a result of data breaches, data theft, unauthorized access or successful

hacking.

III.

Risks related to ArcelorMittal’s Mining activities

ArcelorMittal’s mining operations are subject to risks associated with mining activities.

ArcelorMittal’s reserve and resource estimates may materially differ from mineral quantities that it may be able to actually recover;

ArcelorMittal’s estimates of mine life may prove inaccurate; and market price fluctuations and changes in operating and capital costs may

render certain ore reserves uneconomical to mine.

ArcelorMittal faces rising extraction costs over time as reserves deplete.

IV.

Risks related to ArcelorMittal’s acquisitions and investments

ArcelorMittal has grown through acquisitions and may continue to do so. Failure to manage external growth and difficulties completing planned

acquisitions or integrating acquired companies could harm ArcelorMittal’s future results of operations, financial condition and prospects.

ArcelorMittal may encounter further difficulties with respect to ArcelorMittal Italia (renamed Acciaierie d'Italia).

ArcelorMittal faces risks associated with its acquisition, via a joint venture, of AMNS India.

ArcelorMittal’s greenfield, brownfield and other investment projects are subject to financing, execution and completion risks.

ArcelorMittal faces risks associated with its investments in joint ventures and associates.

Risks related to ArcelorMittal’s financial position and organizational structure

Changes in assumptions underlying the carrying value of certain assets, including as a result of adverse market conditions, could result in the

impairment of such assets, including intangible assets such as goodwill.

Management report

ArcelorMittal's indebtedness could have an adverse impact on its results of operations and financial position, and the market's perception of

ArcelorMittal's leverage may affect its share price.

ArcelorMittal’s ability to fully utilize its recognized deferred tax assets depends on its profitability and future cash flows.

Underfunding of pension and other post-retirement benefit plans at some of ArcelorMittal’s operating subsidiaries could require the Company to

make substantial cash contributions to pension plans or to pay for employee healthcare, which may reduce the cash available for ArcelorMittal’s

business.

ArcelorMittal’s results of operations could be affected by fluctuations in foreign exchange rates, particularly the euro to U.S. dollar exchange

rate, as well as by exchange controls imposed by governmental authorities in the countries where it operates.

The Significant Shareholder has the ability to exercise significant influence over the outcome of shareholder votes.

ArcelorMittal is a holding company that depends on the earnings and cash flows of its operating subsidiaries, which may not be sufficient to

meet future operational needs or for shareholder distributions, and loss-making subsidiaries may drain cash flow necessary for such needs or

distributions.

VI.

Legal and regulatory risks

ArcelorMittal is subject to strict environmental, health and safety laws and regulations that could give rise to a significant increase in costs and

liabilities.

Laws and regulations restricting emissions of greenhouse gases could force ArcelorMittal to incur increased capital and operating costs and

could have a material adverse effect on ArcelorMittal’s results of operations, financial condition and reputation.

The income tax liability of ArcelorMittal may substantially increase if the tax laws and regulations in countries in which it operates change or

become subject to adverse interpretations or inconsistent enforcement.

ArcelorMittal is subject to economic policy, political, social and legal risks and uncertainties in the emerging markets in which it operates or

proposes to operate, and these uncertainties may have a material adverse effect on ArcelorMittal’s business, financial condition, results of

operations or prospects.

ArcelorMittal is subject to an extensive, complex and evolving regulatory framework which may expose it and its subsidiaries, joint ventures and

associates to investigations by governmental authorities, litigation and fines, in relation, among other things, to antitrust and compliance

matters. The resolution of such matters could negatively affect the Company’s strategy, operations and profitability and cash flows in a

particular period or harm its reputation.

ArcelorMittal is currently and in the future may be subject to legal proceedings or product liability claims, the resolution of which could negatively

affect the Company’s profitability and cash flows in a particular period.

Changes to global data privacy laws and cross-border personal data transfer requirements could adversely affect ArcelorMittal's business and

operations.

U.S. investors may have difficulty enforcing civil liabilities against ArcelorMittal and its directors and senior management.

Detailed risk factors

I. Risks related to the global economy and the mining and steel

industry

Prolonged low steel and (to a lesser extent) iron ore prices

and/or low steel demand would have an adverse effect on

ArcelorMittal’s results of operations.

As an integrated producer of steel and iron ore, ArcelorMittal’s

results of operations are sensitive to the market prices of, and

demand for, steel and iron ore in its markets and globally. The

impact of market steel prices on its results is direct while the

impact of market iron ore prices is both direct and indirect, as

ArcelorMittal sells iron ore on the market to third parties (in

which case it benefits from higher iron ore market prices), and

indirect, as iron ore is a principal raw material used in steel

production and fluctuations in its market price are typically and

eventually (with the timing dependent on steel market

conditions) passed through to steel prices (with any lags in

passing on higher prices “squeezing” steel margins, as

discussed below). Steel and iron ore prices are affected by

supply and demand trends and inventory cycles. In terms of

demand, steel and iron ore prices are sensitive to trends in

cyclical industries, such as the automotive, construction,

appliance, machinery, equipment and transportation industries,

which are significant markets for ArcelorMittal’s products (with

automotive being particularly significant). More generally, steel

and iron ore prices are sensitive to macroeconomic fluctuations

in the global economy which are impacted by many factors

ranging from trade and geopolitical tensions to global and

regional monetary policy to specific disruptive events such as

pandemics and natural disasters. In the past, substantial price

decreases during periods of economic weakness have not

always been offset by commensurate price increases during

periods of economic strength. In addition, as further discussed

below, excess supply relative to demand for steel in local

markets generally results in increased exports and drives down

regional or global prices. In terms of inventory, steel stocking

and destocking cycles affect apparent demand for steel and

hence steel prices and steel producers’ profitability. For

example, steel distributors may accumulate substantial steel

inventories in periods of low prices and, in periods of rising real

demand for steel from end-users, steel distributors may sell

steel from inventory (destock), thereby delaying the effective

implementation of steel price increases. Conversely, steel price

decreases can sometimes develop their own momentum, as

customers adopt a “wait and see” attitude and destock in the

expectation of further price decreases.

As a result of these factors, steel and iron ore prices fluctuate

substantially and have come under pressure at various points in

Management report

recent periods. In 2019, steel market conditions deteriorated

significantly due to a decline in steel prices (lower demand in

Europe and the U.S., higher imports in Europe and additional

domestic supply and the effect of customer destocking in the

U.S.) and higher raw material costs (particularly in iron ore due

to supply-side developments), resulting in a negative price-cost

effect. This led to substantial inventory-related and impairment

charges and hence sharply lower steel segment operating

income in 2019. Steel market conditions were adversely

affected in the first half of 2020 by the COVID-19 pandemic and

its economic ramifications, with demand plummeting (e.g., an

18.4% year-on-year drop in EU apparent steel consumption and

a 34.7% drop in overall steel shipments in the second quarter

versus the prior year quarter) and prices falling substantially.

After a strong rebound starting in the second half of 2020 and

continuing into the third quarter of 2021, steel prices began to

decline from very high levels in the fourth quarter of 2021, in

varying degrees by market, in particular, due to softer end-

market demand conditions (e.g., supply chain issues affecting

automobile production and weakness in the Chinese real estate

market, both major consumers of steel).

The trajectory of steel demand and prices going forward and in

particular in 2022 is difficult to predict due to such variables as

the extent and duration of supply chain issues affecting end-

markets (and in particular automobile production), the remaining

course of the COVID-19 pandemic (including the risk of

renewed containment measures affecting consumer demand

and production facilities), import volumes and tariff levels and

inventories. In addition, macroeconomic conditions are

uncertain, including due to geopolitical developments,

particularly Russia’s invasion of Ukraine and the international

community’s reaction to it. Any economic downturn globally or in

certain regions may result in lower steel demand and lower steel

and iron ore prices. A scenario of prolonged low steel and (to a

lesser extent or if simultaneous) iron ore prices whether or not

combined with low steel demand would have a material adverse

effect on ArcelorMittal’s results of operations and financial

condition.

Volatility in the supply and prices of raw materials, energy

and transportation, and volatility in steel prices or

mismatches between steel prices and raw material prices

could adversely affect ArcelorMittal’s results of operations.

As a producer and seller of steel, the Company is directly

exposed to fluctuations in the market price for steel, iron ore,

coking coal and other raw materials, energy and transportation.

In particular, steel production consumes substantial amounts of

raw materials including iron ore, coking coal and coke, and the

production of direct reduced iron, the production of steel in

electric arc furnaces and the re-heating of steel involve the use

of significant amounts of energy, making steel companies

dependent on the price of and their reliable access to supplies

of raw materials and energy. In the fourth quarter of 2021 and

early 2022, the Company has become subject to increasing

inflationary cost pressures, with in particular the prices of

electricity, natural gas and CO2 all increasing significantly,

putting pressure on steel price spreads even in a high steel

price environment. Although ArcelorMittal has substantial

sources of iron ore from its own mines (the Company’s self-

sufficiency rate was 59% for iron ore in 2021), it nevertheless

remains exposed to volatility in the supply and price of iron ore

and coking coal given that it obtains a significant portion of such

raw materials under supply contracts from third parties. For

additional details on ArcelorMittal’s raw materials supply and

self-sufficiency, see “Business overview—Products—Mining

products” and “Business overview—Products—Other raw

materials and energy”.

The prices of steel, iron ore, coking coal and scrap have been

highly volatile in recent years. Volatility in steel and raw material

prices can result from many factors including: trends in demand

for iron ore in the steel industry itself, and particularly from

Chinese steel producers (as the largest group of producers);

industry structural factors (including the oligopolistic nature of

the seaborne iron ore industry and the fragmented nature of the

steel industry); the expectation or imposition of corrective trade

measures such as tariffs; massive stocking and destocking

activities (sudden drops in prices can lead end-users to delay

orders pushing prices down further); speculation; new laws or

regulations; changes in the supply of iron ore, in particular due

to new mines coming into operation; business continuity of

suppliers; changes in pricing models or contract arrangements;

expansion projects of suppliers; worldwide production, including

interruptions thereof by suppliers; capacity-utilization rates;

accidents or disruptions at suppliers’ premises or along the

supply chain as occurred in 2019 and 2021; wars, natural

disasters, public health epidemics (such as the COVID-19

pandemic which substantially depressed demand for steel for an

extended period in 2020), political disruption and other similar

events; fluctuations in exchange rates; the bargaining power of

raw material suppliers and the availability and cost of

transportation. Industry and overall decarbonization efforts may

also result in increased and/or volatile prices, in particular,

higher energy and CO2 prices as well as scrap prices (due in

particular to an industry shift to EAF production). For further

information on the movement of raw material prices in recent

years, see “Operating and financial review—Key factors

affecting results of operations—Raw materials”.

Furthermore, while steel and raw material (in particular iron ore

and coking coal) price trends have historically been correlated, a

lack of correlation or an abnormal lag in the corollary

relationship between raw material and steel prices may also

occur and result in a “price-cost effect” in the steel industry.

ArcelorMittal has experienced negative price-cost effects (or

Management report

“squeezes”) at various points in recent years including in 2019,

2020 and 2021 and will likely continue to do so as this is a

structural feature. In some of ArcelorMittal’s segments, in

particular Europe and NAFTA, there are several months

between raw material purchases and sales of steel products

incorporating those materials, rendering them particularly

susceptible to price-cost effect. For example, coking coal

sourced from Australia takes several weeks to reach Europe

(e.g. approximately 4 weeks sailing time, plus loading/unloading

time at ports), creating a structural lag. Sudden spikes in raw

materials, such as coking coal, have occurred in the past and

may occur in the future. Because ArcelorMittal sources a

substantial portion of its raw materials through long-term

contracts with quarterly (or more frequent) formula-based or

negotiated price adjustments and as a steel producer sells a

substantial part of its steel products at spot prices, it faces the

risk of adverse differentials between its own production costs,

which are affected by global raw materials and scrap prices, on

the one hand, and trends for steel prices in regional markets, on

the other hand. The price/cost dynamic in the most recent

periods can be summarized as follows: in 2019, the significant

decline in steel prices (due to lower demand and higher imports,

among other things) and significant increase in iron ore prices

among other trends due in part to supply shocks following the

collapse of the Brumadinho dam owned by Vale in Brazil and a

heavy cyclone season in Australia weighed heavily on the

profitability of the Company's steel business. In 2020, the

negative impact of the COVID-19 pandemic restrictions on steel

demand led to lower spreads as steel prices declined, in

particular in the second quarter of 2020. Prices remained low in

the third quarter of 2020 (due in part to price lag), while raw

material costs, especially iron ore, remained broadly stable,

underpinned by the strong rebound in Chinese demand,

resulting in a price-cost squeeze. In the fourth quarter of 2020,

with the recovery of steel demand in the world ex-China, there

was a recovery in steel and iron ore prices, while prices for

coking coal decreased and remained stable throughout the

fourth quarter of 2020 due to the Chinese ban on Australian

coals. The significant increase in steel prices in the fourth

quarter of 2020 resulted in a multi-year high in steel spreads

(which was not fully reflected in the Company’s performance

due to lag effect). This trend continued through the third quarter

of 2021 before prices came off the highest levels in the fourth

quarter of 2021, while high raw material and energy costs put

increasing pressure on margins. More generally and in sum, the

relationship between input (and in particular raw material) costs

and steel selling prices and the time lag between them

structurally subjects the profitability of steel manufacturers in

general and ArcelorMittal in particular to the risk of a negative

price-cost effect.

ArcelorMittal’s other principal input costs that affect its level of

profitability are energy and transportation. Energy expenses are

sensitive to changes in electricity, energy transportation and fuel

prices, including diesel fuel, natural gas and industrial gas.

Prices for electricity, natural gas and fuel oils can fluctuate

widely with availability and demand levels from other users,

including fluctuations caused by the impact of the COVID-19

pandemic. During periods of peak usage, although some

operations have contractual arrangements in place whereby

they receive certain offsetting payments in exchange for

electricity load reduction, supplies of energy in general may be

curtailed and the Company may not be able to purchase them at

historical rates. A disruption in the transmission of energy,

inadequate energy transmission infrastructure, or the

termination of any of the Group’s energy supply contracts could

interrupt energy supply and adversely affect operations. While

the Group has some long-term contracts with electrical, natural

gas and industrial gas suppliers, it is exposed to fluctuations in

energy, natural gas and industrial gas costs that can affect its

production costs. Energy prices rose substantially in various

markets in 2021, with attendant impacts on margins and in

extreme cases production (e.g., the Company curtailed

production at some of its Spanish plants during “peak hours”

due to high electricity prices). Energy prices may rise further or

be more volatile in 2022 due to the consequences of Russia’s

invasion of Ukraine and of resulting Western sanctions (as well

as potential Russian reactions).

Transportation costs include shipping, road and rail. These

costs, and in particular shipping, also rose substantially in 2021

due to the post-lockdown demand recovery and logistic

constraints. Further increases in or a sustained high level of

transportation costs not offset by continued high steel selling

prices would directly and mechanically weigh on ArcelorMittal’s

profitability (although it would make imports into its markets less

competitive).

Excess capacity and oversupply in the steel industry and in

the iron ore mining industry have in the past and may

continue in the future to weigh on the profitability of steel

producers, including ArcelorMittal.

The steel industry is affected by global and regional production

capacity and fluctuations in steel imports and exports, which are

themselves affected by the existence and amounts of tariffs and

customer and distributor stocking and destocking cycles. The

steel industry has historically suffered from structural

overcapacity globally, and the current global steelmaking

capacity exceeds the current global consumption of steel,

especially for long products. This overcapacity is affected by

global macroeconomic trends and amplified during periods of

global or regional economic weakness, leading to weaker global

or regional demand. In particular, China is both the largest

global steel consumer and the largest global steel producer by a

large margin, and the balance between its domestic production

and consumption has been an important factor influencing

Management report

global steel prices. At various points in recent years, reduced

Chinese steel demand has not been fully offset by reduced

Chinese steel production, which has led to a flood of Chinese

steel exports into various regional markets, including the

Company’s principal markets, weighing on and indeed

depressing market prices. While most recently this phenomenon

has been tempered by constraints imposed on Chinese steel

production, the risk remains of excessive production and hence

exports. Exports by steel producers in other developing

countries and regions (such as the CIS, Turkey and India) into

the Company’s principal markets are also a market feature. The

extent of them depends on the demand/production balance in

the producer’s home market as well as regional market pricing

differentials (including any applicable import tariffs). The

European steel market is particularly sensitive to the import

threat due to remaining structural overcapacity. For example,

lower demand and high imports led to low steel prices in Europe

in the first half of 2019, to which steel producers (including the

Company) responded with production cuts.

Market prices for iron ore also underpin those of steel (as its

principal input component) to some extent, and iron ore prices

depend both on supply and demand conditions. Excess iron ore

supply relative to demand has led to depressed prices at various

points in recent years and could recur, with potentially a

corollary effect on steel prices. No assurance can be given that

iron ore prices will not decline further, particularly if Chinese

steel demand declines, worldwide capacity increases due to

new mines coming online or steel demand declines again due to

a resurgence of COVID-19 pandemic impacts. A renewed phase

of steel and iron ore oversupply would likely have a material

adverse effect on ArcelorMittal’s results of operations and

financial condition.

Unfair trade practices, import tariffs and/or barriers to free

trade could negatively affect steel prices and

ArcelorMittal’s results of operations in various markets.

ArcelorMittal is exposed to the effects of “dumping” and other

unfair trade and pricing practices by competitors. Moreover,

government subsidies to the steel industry remain widespread in

certain countries, particularly those with centrally controlled

economies such as China. In periods of lower global demand for

steel, there is an increased risk of additional volumes of unfairly-

traded steel exports into various markets, including Europe,

North America and other markets such as South Africa, in which

ArcelorMittal produces and sells its products. Such imports have

had and could in the future have the effect of reducing prices

and demand for ArcelorMittal’s products.

Exports of low-cost steel products from developing countries,

along with a lack of effective remedial trade policies, can

depress steel prices in various markets globally, including in

ArcelorMittal’s key markets. Conversely, ArcelorMittal is

exposed to the effects of import tariffs, other trade barriers and

protectionist policies more generally due to the global nature of

its operations. Various countries have instituted, and may

institute import tariffs and barriers that could, depending on the

nature of the measures adopted, adversely affect ArcelorMittal’s

business by limiting the Company’s access to or

competitiveness in steel markets. While such protectionist

measures can help the producers in the adopting country, they

may be ineffective, raise the risk of exports being directed to

markets where no such measures are in place or are less

effective and/or result in retaliatory measures. Moreover, absent

government intervention, European steel producers who will

bear increasingly high costs to reduce carbon emissions (or pay

for allowances) will be at a competitive disadvantage versus

importers from developing countries with lower environmental

standards. While certain changes in Chinese policy have

recently led to decreased exports from China (notably the

cancellation of the 13% export tax rebate on commodity grades

of steel (HRC, rebar as of May 1, 2021), the risk of increased

exports from China remains, due to changes in Chinese policy,

economic conditions or otherwise.

More generally, the current state of trade relations globally with

trade disputes leading to the imposition of tariffs and then

retaliatory measures, as seen in recent years in various markets

(U.S./China, U.S./Europe, etc.) has and could continue to

directly (in the case of tariffs) or indirectly (in the case of

economic growth generally) have a significant adverse effect on

demand for and the price of steel and hence on ArcelorMittal’s

results of operations and financial condition.

Russia’s invasion of Ukraine, international reaction to it (in

particular in the form of sanctions) and any regional or

global escalation of the conflict, could adversely affect the

Company’s business, results of operations and financial

condition.

The Company has significant operations in Ukraine, consisting

of a steel plant, which produced 4.9 million tonnes of steel in

2021, and (captive) mines that produced 11.7 million tonnes of

iron ore in 2021; the related property, plant and equipment had a

carrying value of $2.3 billion on the Company’s balance sheet at

December 31, 2021. In 2021, the Company’s Ukrainian

operations (and in particular its Kryvyi Rih steel plant) recorded

4.6 million of steel shipments, generating $4.1 billion of sales

including $0.9 billion of sales to customers located in Ukraine.

Operations were not affected by the conflicts ongoing since

2014 in relation to Crimea and the Donbass region; they have,

however, been affected by Russia’s invasion of Ukraine in late

February 2022, in the wake of which the Company reduced

steel production to minimum levels (approximately one-third of

its normal production levels) and discontinued mining operations

at its underground mines. On March 3, 2022, the Company then

announced that it was beginning the process to idle its

Management report

steelmaking operations in Kryvyi Rih in order to ensure the

safety and security of its people and assets. The Company

cannot predict duration of the idling as it will depend on the

remaining course of the conflict and the establishment of safe

and stable operating and logistical conditions thereafter, as well

as potential repairs of any damages sustained.

The imposition of extensive sanctions on Russia by the EU, the

U.S., the UK and other countries affects the Company’s

sourcing of raw materials and also, potentially, the markets for

sales by the Group’s other operations in the CIS (the Group

recorded $1.6 billion of sales to customers located in Russia in

2021).

More generally the conflict could have a material adverse effect

on the overall macroeconomic environment, potentially affecting

steel and iron ore demand and prices as well as increasing

energy costs. Both the conflict itself and the sanctions imposed

(and further sanctions that may be imposed), as well as

potential Russian reactions, have had and could have further

destabilizing effects on financial markets. The conflict, which

has substantially exacerbated tensions between NATO and

Russia, could escalate militarily both regionally and globally; any

substantial escalation would have a material adverse effect on

macroeconomic conditions. In addition, sanctions may remain

in place beyond the duration of any military conflict and have a

long-lasting impact on the region and globally, and could

adversely impact the Group’s results of operations and financial

condition.

Developments in the competitive environment in the steel

industry could have an adverse effect on ArcelorMittal’s

competitive position and hence its business, financial

condition, results of operations or prospects.

The markets in which steel companies operate are highly

competitive. Competition, in the form of established producers

expanding in new markets, smaller producers increasing

production in anticipation of demand increases or amid

recoveries, or exporters selling excess capacity from markets

such as China, could cause ArcelorMittal to lose market share,

increase expenditures or reduce pricing. For example, in the

CIS, if low-cost regional competitors with 100% self-sufficiency

in raw materials, increase steel rolling capacity, ArcelorMittal’s

market share may be affected, and downward pressure applied

to globally traded steel prices. Any of these developments could

have a material adverse effect on its business, financial

condition, results of operations or prospects.

Competition from other materials and alternative steel-

based technologies could reduce market prices and

demand for steel products and thereby reduce

ArcelorMittal’s cash flows and profitability.

In many applications, steel competes with other materials that

may be used as substitutes, such as aluminum, concrete,

composites, glass, plastic and wood. In particular, as a result of

increasingly stringent regulatory requirements, as well as

developments in alternative materials, designers, engineers and

industrial manufacturers, especially those in the automotive

industry have increased their use of lighter weight and

alternative materials, such as aluminum and plastics in their

products.

In the automotive area, ArcelorMittal has introduced new

advanced high-strength steel products, such as Usibor® 2000,

Ductibor® 1000 and Fortiform® which is a new range of third

generation advanced high strength steel for cold stamping, new

engineering S-in motion® projects and a dedicated electric

iCARe® range to respond to the shift toward electric cars. New

martensitic products also offer a major potential for battery

packs and the Multi Part Integration concept brings the

possibility to drastically reduce the number of parts in a car. In

the construction area, ArcelorMittal is deploying Steligence®, a

unique holistic commercial approach with a complete set of

products, services and solutions. See “Business overview—

Research and development”. Despite these product innovations,

a loss of market share to substitute materials, increased

government regulatory initiatives favoring the use of alternative

materials, as well as the development of additional new

substitutes for steel products could significantly reduce market

prices and demand for steel products and thereby reduce

ArcelorMittal’s cash flows and profitability.

While in 2020, the Company started to offer its customers

equivalent green steel tonnes by way of a certification system

linked to CO2 savings, achieved through investment in

decarbonization technologies, a trend which continued in 2021,

additive manufacturing or new technologies such as carbon free

steelmaking could result in a loss of market share if competitors

develop and deploy this kind of technology before, or more

effectively than, ArcelorMittal. In addition, to the extent

regulatory requirements and/or customer demand for low carbon

or carbon neutral steel increase, competition with respect to low

CO2 steel technologies may become more significant, leading to

substantial input cost increases.

Management report

II. Risks related to ArcelorMittal's operations

ArcelorMittal’s level of profitability and cash flow currently

is and, depending on market and operating conditions, may

in the future be, substantially affected by its ability to

reduce costs and improve operating efficiency.

The steel industry has historically been cyclical, periodically

experiencing difficult operating conditions. In light of this,

ArcelorMittal has historically and increasingly in recent periods,

taken initiatives to reduce its costs and increase its operating

efficiency including through various asset optimization and other

programs. In 2021, the Company achieved $0.6 billion of fixed

cost savings relating to its previously announced $1.0 billion

structural improvement plan, and has announced a new three

year $1.5 billion value plan in February 2022, focused on

creating value through well-defined commercial and operational

initiatives. These initiatives have been key to the Company’s

ability to control and reduce costs, hence supporting profitability.

Any inability to continue to roll-out such initiatives and to

implement them fully could have a material adverse effect on

the Company’s profitability and cash flows.

The Group’s carbon emissions intensity reduction targets

are based on current assumptions with respect to the

costs, government and societal support for the reduction of

carbon emissions in particular regions and the

advancement of technology and infrastructure related to

the reduction of carbon emissions over time. Future

developments may affect such assumptions, and this may

render the achievement of ArcelorMittal’s targets more

difficult, or even impossible, to achieve for cost or other

reasons.

To achieve its 2030 global carbon emissions intensity (covering

the Scope 1 and 2 emissions attributable to the Company’s

operations measured in accordance with the greenhouse gas

("GHG") Protocol reduction target of 25%, ArcelorMittal has

estimated the gross capital cost required for the Group to be

approximately $10 billion, with the expectation that 35% of these

capital expenditures will be deployed up to 2025 and the

remainder in the second part of the decade. In addition, the

Company's decarbonization strategy includes the objective of

carbon neutrality by 2050, which has also become in 2021 a

legal obligation for its operations in the EU and Canada

following the endorsement of the Climate Law and the Canadian

Net-Zero Emissions Accountability Act, respectively. These

targets and estimates are based on numerous assumptions,

including the costs of green hydrogen (meaning hydrogen

produced exclusively from renewable sources) and its evolution

over time, the construction of DRI and EAF, the development of

carbon capture, utilization and storage (“CCUS”) infrastructure

and the timing of the introduction of greenhouse gas reduction

requirements and supportive policies in applicable jurisdictions.

The Company expects that low emissions technologies will

become more competitive over time as more stringent GHG

reduction requirements or a carbon price are introduced and

increased in each jurisdiction, alongside the introduction of

effective policies to secure a level playing field, and the

decarbonization technologies themselves become more mature

and efficient. However, in the transition period (and through at

least 2030), its investments in decarbonization will require

support from host countries, first and foremost from the

European Union and its member states, through supportive

policies designed to avoid “carbon leakage” and provide

compensation for the significantly higher costs, while at the

same time maintaining a fair and competitive landscape. In

particular, ArcelorMittal’s expectation is that public funding

covers 50% of the total cost of decarbonization (capital

expenditures and higher operating expenses) so that companies

are not rendered uncompetitive during this transition period. The

Company believes this expectation is reasonable, but such

funding is subject to changes in government and policy, among

other factors, and may not be achieved. A lack of governmental

and societal support could make the Company’s targets more

costly, more difficult or even impossible to achieve. If the

Company is unable to make the necessary investments to

decarbonize and reach its 2030 decarbonization targets due to

the design of governmental policy in Europe or other

jurisdictions where it operates (see “Changes in assumptions

underlying the carrying value of certain assets, including as a

result of adverse market conditions, could result in the

impairment of such assets, including intangible assets such as

goodwill” below), it may negatively affect its competitiveness,

profitability, cash flows, results of operations and financial

condition, as well as harm its reputation.

ArcelorMittal has incurred and may incur in the future

operating costs when production capacity is idled or

increased costs to resume production at idled facilities.

ArcelorMittal’s decisions about which facilities to operate and at

which levels are made based upon customers’ orders for

products as well as the capabilities and cost performance of the

Company’s facilities. Considering temporary or structural

overcapacity or other considerations, production operations are

concentrated at several plant locations and certain facilities are

idled in response to customer demand, although operating costs

are still incurred at such idled facilities. Most recently

ArcelorMittal idled several plants during the COVID-19

pandemic-related lockdowns and its Ukranian steel plant

following the Russian invasion. When idled facilities are

restarted, ArcelorMittal incurs costs to replenish raw material

inventories, prepare the previously idled facilities for operation,

perform the required repair and maintenance activities and

prepare employees to return to work safely and resume

production responsibilities. Such costs could have an adverse

effect on its results of operations or financial condition.

Management report

ArcelorMittal could experience labor disputes that may

disrupt its operations and its relationships with its

customers and its ability to rationalize operations and

reduce labor costs in certain markets may be limited in

practice or encounter implementation difficulties.

A majority of the employees of ArcelorMittal and of its

contractors are represented by labor unions and are covered by

collective bargaining or similar agreements, which are subject to

periodic renegotiation. Strikes or work stoppages could occur

prior to, or during, negotiations preceding new collective

bargaining agreements, during wage and benefits negotiations

or during other periods for other reasons, in particular in

connection with any announced intentions to adapt the footprint.

ArcelorMittal may experience strikes and work stoppages at

various facilities. Prolonged strikes or work stoppages could

have an adverse effect on the operations and financial results of

ArcelorMittal. In recent years ArcelorMittal has experienced

significant strikes affecting operations at various plants,

particularly in South Africa, France and Canada, relating to

various causes, often in connection with labor contract renewal

negotiations.

Disruptions to ArcelorMittal’s manufacturing processes

caused for example by equipment failures, natural

disasters, accidents, epidemics or pandemics, geopolitical

conflicts or extreme weather events could adversely affect

its operations, customer service levels and financial results

and liabilities.

Steel manufacturing processes are dependent on critical steel-

making equipment, such as furnaces, continuous casters, rolling

mills and electrical equipment (such as transformers), and such

equipment may incur downtime as a result of unanticipated

failures or other events, such as fires, explosions, furnace

breakdowns or as a result of natural disasters, accidents,

epidemics or pandemics or severe weather conditions.

ArcelorMittal’s manufacturing plants have experienced, and may

in the future experience, plant shutdowns or periods of reduced

production as a result of such events, for example the collapse

of the oxygen and nitrogen pipelines in November 2018 at

ArcelorMittal Temirtau, the fire in a conveyor belt of the coke

plant in ArcelorMittal Asturias in October 2018, an electrical

failure resulting in the temporary stoppage of the concentrator at

AMMC in 2019, a fire in the gas cleaning section of the coke

plant in Dunkirk in 2020, a blast furnace gas line explosion in

Vanderbiljpark in 2020 in South Africa and an explosion in the

Abayskaya mine in Kazakhstan in November 2021. Certain of

these incidents have resulted or may result in governmental

investigations or proceedings and/or in costs and liabilities and

negatively impact the Company's reputation or the operations of

the affected facilities. Such incidents could also lead to

production stoppages, loss of key personnel, loss of key assets,

or put at risk our employees (and those of sub-contractors and

suppliers) or persons living near affected sites. See risk

“ArcelorMittal is subject to strict environmental, health and

safety laws and regulations that could give rise to a significant

increase in costs and liabilities". Conflicts may also cause

interruptions to operations; see risk “Russia’s invasion of

Ukraine, and any regional or global escalation of the conflict,

could adversely affect the Company’s business and results of

operations.”

In addition, natural disasters and severe weather conditions

could lead to significant damage at ArcelorMittal’s production

facilities and general infrastructure or cause shutdowns. For

example, ArcelorMittal Mexico’s production facilities located in

Lázaro Cárdenas, Michoacán, Mexico are located in or close to

areas prone to earthquakes. The Lázaro Cárdenas area has, in

addition, been subject to a number of tsunamis in the past. The

site of the joint venture AM/NS Calvert (“Calvert”) in the United

States is located in an area subject to tornados and hurricanes.

ArcelorMittal also has assets in locations subject to bush fires,

specifically in Kazakhstan and South Africa, and to Arctic freeze,

specifically in Baffinland. More generally, changing weather

patterns and climatic conditions in recent years, possibly due to

climate change, have added to the unpredictability and

frequency of natural disasters.

Severe weather conditions can also affect ArcelorMittal’s

operations in particular due to the long supply chain for certain

of its operations and the location of certain operations in areas

subject to harsh winter conditions (i.e., Canada and

Kazakhstan) or areas that are susceptible to droughts (i.e.,

South Africa, Mexico and Brazil). Water in particular is crucial to

the steelmaking process, and the risk that the authorities may

restrict license to withdraw water as a result of chronic drought

could increase operating costs and reduce production capacity.

Flooding has also affected ArcelorMittal's operations, including

at ArcelorMittal Asturias in Aviles, Spain in June 2018 and, more

regularly, in Liberia, when heavy rains during the wet season

have caused handling and logistic constraints that impacted

shipment volumes. The severe floods in Europe in July 2021

resulted in logistic constraints and decreased steel shipments.

Damage to ArcelorMittal production facilities due to natural

disasters and severe weather conditions could, to the extent that

lost production cannot be compensated for by unaffected

facilities, adversely affect its business, results of operations or

financial condition. More generally, these severe weather

conditions could increase in frequency and severity due to

climate change.

ArcelorMittal’s insurance policies provide limited coverage,

potentially leaving it uninsured against some business

risks.

The occurrence of an event that is uninsurable or not fully

insured could have a material adverse effect on ArcelorMittal’s

Management report

business, financial condition, results of operations or prospects.

ArcelorMittal maintains insurance on property and equipment in

amounts believed to be consistent with industry practices, but it

is not fully insured against all such risks. ArcelorMittal’s

insurance policies cover physical loss or damage to its property

and equipment on a reinstatement basis as arising from a

number of specified risks and certain consequential losses,

including business interruption arising from the occurrence of an

insured event under the policies. Under ArcelorMittal’s property

and equipment policies, some damages and losses caused by

among others terrorism, war and other political violent events,

as well as by certain natural disasters, such as earthquakes,

floods and windstorms, are also covered.

ArcelorMittal also purchases worldwide third-party public and

product liability insurance coverage for all of its subsidiaries.

Various other types of insurance are also maintained, such as

comprehensive construction and contractor insurance for its

greenfield and major capital expenditures projects, directors and

officers liability, transport, and charterers’ liability, as well as

other customary policies such as car insurance, travel

assistance and medical insurance.

In addition, ArcelorMittal maintains trade credit insurance on

receivables from selected customers, subject to limits that it

believes are consistent with those in the industry, in order to

protect it against the risk of non-payment due to customers’

insolvency or other causes. Not all of ArcelorMittal’s customers

are or can be insured, and even when insurance is available, it

may not fully cover the exposure.

Notwithstanding the insurance coverage that ArcelorMittal and

its subsidiaries carry, the occurrence of an event or series of

events (such as, among others, a pandemic or a war) that may

result in losses in excess of limits specified under the relevant

policy, or losses not covered by insurance policies, could

materially harm ArcelorMittal’s financial condition and future

operating results.

ArcelorMittal’s reputation and business could be materially

harmed as a result of data breaches, data theft,

unauthorized access or successful hacking.

ArcelorMittal’s operations depend on the secure and reliable

performance of its information technology systems. An

increasing number of companies, including ArcelorMittal, have

experienced intrusion attempts or even breaches of their

information technology security, some of which have involved

sophisticated and highly targeted attacks on their computer

networks. ArcelorMittal’s corporate website was the target of a

hacking attack in January 2012, which brought the website

down for several days, and phishing, ransomware and virus

attacks have been increasing in more recent years through

2020, with WannaCry impacting the Company in March 2018

and ransomware Eight in South Africa in 2020. In March 2021,

ArcelorMittal Liberia and Dofasco were subject to a Cobalt

Strike BEACON malware attack. The attack initially occurred on

the ArcelorMittal Liberia network, with a malicious file download

leading to an infection by malware. The attacker then moved

laterally within the ArcelorMittal Liberia network to the

ArcelorMittal Dofasco environment, attempting to infect the

ArcelorMittal Dofasco system. In April 2021, ArcelorMittal

Dofasco engaged an outside firm to conduct an exhaustive

review of the attack, and no evidence data access, staging or

theft was found. Adverse consequences of technological

advances like Industry 4.0, Cloud computing, Internet of Things,

and Blockchain may increase threats or cause damage to

ArcelorMittal, for example by impacting shop-floor systems

supporting production and maintenance and thereby forcing

plant operations to revert to manual mode with loss of

production, resulting in new risks to ArcelorMittal's operations

and systems. Because the techniques used to obtain

unauthorized access, disable or degrade service or sabotage

systems change frequently and often are not recognized until

launched against a target, the Company may be unable to

anticipate these techniques or to implement in a timely manner

effective and efficient countermeasures. Although, ArcelorMittal

performs annual cyber maturity assessments in many of its

business units, which are supplemented by in-depth cyber

audits and penetration testing exercises performed by

ArcelorMittal Global Assurance, the risk of significant data

breaches, data theft, unauthorized access or successful hacking

cannot be eliminated. There may also be an increased risk of

cybersecurity breaches due to ongoing geopolitical tensions

involving Russia.

If unauthorized parties attempt or manage to bring down the

Company’s website or force access into its information

technology systems, they may be able to misappropriate

personal and confidential information, cause interruptions in the

Company’s operations, damage its computers or process

control systems or otherwise damage its reputation and

business. In such circumstances, the Company could be held

liable or be subject to regulatory or other actions for breaching

confidentiality and personal data protection rules including

General Data Protection Regulation ("GDPR"). Any compromise

of the security of the Company’s information technology

systems could result in a loss of confidence in the Company’s

security measures and subject it to litigation, civil or criminal

penalties, and adverse publicity that could adversely affect its

reputation, financial condition and results of operations.

III. Risks related to ArcelorMittal’s Mining activities

ArcelorMittal’s mining operations are subject to risks

associated with mining activities.

ArcelorMittal's mining operations are subject to the hazards and

risks usually associated with the exploration, development and

Management report

production of natural resources, any of which could result in

production shortfalls or damage to persons or property. In

particular, the hazards associated with open-pit mining

operations include, among others:

•flooding of the open-pit;

•collapse of the open-pit wall;

•accidents associated with the operation of large open-

pit mining and rock transportation equipment;

•accidents associated with the preparation and ignition

of large-scale open-pit blasting operations;

•production disruptions or difficulties associated with

mining in extreme weather conditions;

•hazards associated with the disposal of mineralized

waste water, such as groundwater and waterway

contamination; and

•collapse of tailings ponds dams.

Hazards associated with underground mining operations, of

which ArcelorMittal has several, include, among others:

•underground fires and explosions, including those

caused by flammable gas;

•gas and coal outbursts;

•cave-ins or falls of ground;

•discharges of gases and toxic chemicals;

•flooding;

•sinkhole formation and ground subsidence; and

•blasting, removing, and processing material from an

underground mine.

ArcelorMittal is exposed to all of these hazards. The occurrence

of any of the events listed above could delay production,

increase production costs and result in death or injury to

persons, damage to property and liability for ArcelorMittal, some

or all of which may not be covered by insurance, as well as

substantially harm ArcelorMittal’s reputation, both as a Company

focused on ensuring the health and safety of its employees and

more generally.

ArcelorMittal’s reserve and resource estimates may

materially differ from mineral quantities that it may be able

to actually recover; ArcelorMittal’s estimates of mine life

may prove inaccurate; and market price fluctuations and

changes in operating and capital costs may render certain

ore reserves uneconomical to mine.

There is a degree of uncertainty attributable to the estimation of

mineral reserves and resources. Until mineral reserves and

resources are actually mined and processed, the quantity of

metal and grades must be considered as estimates only and no

assurance can be given that the indicated levels of metals will

be produced. In making determinations about whether to

advance any of its projects to development, ArcelorMittal must

rely upon estimated calculations for the mineral reserves and

mineral resources and grades of mineralization on the

Company's properties.

The estimation of mineral reserves and resources is a subjective

process that is partially dependent upon the judgment of the

qualified persons preparing such estimates. The process relies

on the quantity and quality of available data and is based on

knowledge, mining experience, statistical analysis of drilling and

sampling results and industry practices. Valid estimates made at

a given time may significantly change when new information

becomes available.

ArcelorMittal’s estimates of mineral reserves and resources are

based on geological interpretation and statistical inferences or

assumptions drawn from drilling and sampling analysis made as

of the date of such estimates. ArcelorMittal periodically updates

its mineral reserves and resources estimates based on the

conclusions of the relevant qualified persons with respect to new

data from exploratory and infill drilling, results from technical

studies and the experience acquired during the operation of the

mine and metallurgical processing, as well as changes to the

assumptions used to calculate these estimates.

Several of the assumptions used to calculate these estimates,

including the market prices, operating and capital costs and

mining and metallurgical recovery rates, among others, can

greatly fluctuate, which may result in significant changes to the

Company's current estimates. These changes may also render

some or all of our proven and probable mineral reserves and

measured and indicated mineral resources uneconomic to

exploit and may ultimately result in a reduction of mineral

reserves and resources.

In addition, inferred mineral resources have a great amount of

uncertainty as to their existence and their economic and legal

feasibility. Readers should not assume that any part of an

inferred mineral resource will be upgraded to a higher category

or that any of the mineral resources not already classified as

mineral reserves will be reclassified as mineral reserves.

Moreover, substantial time and expenditures are required to:

•establish mineral reserves through drilling;

Management report

•determine appropriate mining and metallurgical

processes for optimizing the recovery of saleable

product from iron ore and coal reserves;

•obtain environmental and other licenses or securing

surface rights with local communities;

•construct mining and processing facilities and the

infrastructure required for greenfield properties;

•extract the saleable products from the mined iron ore

or coal; and

•maintain the appropriate blend of ore to ensure the

final product qualities expected by the customer are

achieved.

If a project proves not to be economically feasible by the time

ArcelorMittal is able to exploit it, ArcelorMittal may incur

substantial losses and be obliged to recognize impairments. In

addition, potential changes or complications involving

metallurgical and other technological processes that arise during

the life of a project may result in delays and cost overruns that

may render the project not economically feasible.

ArcelorMittal faces rising extraction costs over time as

reserves deplete.

Reserves are gradually depleted in the ordinary course of a

given mining operation. As mining progresses, distances to the

primary crusher and to waste deposits become longer, pits

become steeper and underground operations become deeper,

all of which are considered in reserve estimates. As a result,

ArcelorMittal usually experiences rising unit extraction costs

over time with respect to each of its mines.

IV. Risks related to ArcelorMittal’s acquisitions and investments

ArcelorMittal has grown through acquisitions and may

continue to do so. Failure to manage external growth and

difficulties completing planned acquisitions or integrating

acquired companies could harm ArcelorMittal’s future

results of operations, financial condition and prospects.

The Company was formed and subsequently grew through

mergers and acquisitions. After curtailing its large-scale M&A

activity for several years following the 2008 financial crisis, the

Company made several large acquisitions in recent years,

including its acquisition (via a joint venture) of Calvert in 2014, of

the long steel business ArcelorMittal Sul Fluminense (“AMSF”)

in 2018, ArcelorMittal Italia via a long-term lease and conditional

purchase agreement in 2018 (renamed Acciaierie d'Italia and

which became a joint venture in 2021) and AMNS India Limited

("AMNS India") via a joint venture in 2019.

To the extent ArcelorMittal continues to pursue significant

acquisitions, financing of such acquisitions may (depending on

the structure) result in increased debt, leverage and gearing.

Acquisitions also entail increased operating costs, as well as

greater allocation of management resources away from daily

operations. Managing acquisitions requires the continued

development of ArcelorMittal’s financial and management

information control systems, the integration of acquired assets

with existing operations, the adoption of manufacturing best

practices, handling any labor disruptions that may arise,

attracting and retaining qualified management and personnel as

well as the continued training and supervision of such

personnel, and the ability to manage the risks and liabilities

associated with the acquired businesses. Failure to manage

acquisitions could have a material adverse effect on

ArcelorMittal’s business, financial condition, results of

operations or prospects.

ArcelorMittal may encounter further difficulties with respect

to ArcelorMittal Italia (renamed Acciaierie d'Italia).

The Company has encountered and may continue to encounter

difficulties with respect to ArcelorMittal Italia (renamed Acciaierie

d'Italia). In particular, pursuant to the initial agreement for the

lease and subsequent conditional purchase of the business,

ArcelorMittal Italia began implementing major improvements

involving substantial capital expenditures designed to bring

ArcelorMittal Italia up to and beyond EU environmental

standards, to improve its operational performance, to rebuild

client confidence and to integrate personnel and apply the

Company’s best practices and expertise. The implementation of

these improvements has been subject to various obstacles,

including the unexpected legal, regulatory and operational

developments encountered in 2019 and the impact of the

COVID-19 pandemic in Italy, which led to a significant reduction

in the Taranto plant’s production for several months in 2020.

These delays were particularly costly as ArcelorMittal Italia had

been loss-making while it was consolidated in ArcelorMittal's

results from November 2018 to December 2020.

On November 4, 2019, ArcelorMittal sent to the Commissioners

managing the Ilva insolvency procedure (the “Commissioners”)

a notice to withdraw from or terminate lease and conditional

purchase agreement and return the business units to Ilva. This

notice was based, among other things, on provisions of the

agreement that allow withdrawal in the event that a new law

affects the environmental plan for the Taranto plant in such a

way that materially impairs the ability to operate the plant or

implement the industrial plan; these provisions were triggered

following the Italian Parliament’s removal, on November 3,

2019, of the legal protection necessary for ArcelorMittal Italia to

implement its environmental plan without risk of criminal liability.

In response, the Commissioners filed suit in Milan seeking an

injunction to prevent ArcelorMittal’s withdrawal and termination

Management report

of the agreement. Following negotiation between the parties, on

March 4, 2020, ArcelorMittal and the Commissioners agreed to

settle this litigation and signed an amendment to the agreement.

The amendment included terms for investment by Italian state-

sponsored and other private entities into ArcelorMittal Italia, a

new industrial plan involving lower-carbon steelmaking

technologies, a revised lease payment structure and certain

revised commitments and additional conditions precedent

related to the completion of the obligation to purchase (including

the amendment of the existing environmental plan to account for

changes in the new industrial plan; the lifting of all criminal

seizures on the Taranto plant; and the absence of restrictive

measures affecting Acciaierie d'Italia in the context of criminal

proceedings where Ilva is a defendant) by May 2022. The

Investment Agreement was signed on December 10, 2020,

providing for Invitalia, an Italian state-owned company, to invest

up to €1.1 billion in ArcelorMittal Italia, in two tranches (equity

and €25 million as a loan). On April 14, 2021, following the initial

injection by Invitalia of €400 million of new equity, ArcelorMittal

and Invitalia formed a public-private partnership. The joint

company was renamed Acciaierie d’Italia Holding “ADI

Holding” (formerly AM InvestCo), and its main operating

subsidiary ArcelorMittal Italia was renamed Acciaierie d’Italia.

The investment agreement stipulates a second equity injection

by Invitalia of up to €680 million, to fund the purchase of Ilva’s

business by ADI Holding, subject to certain conditions precedent

to be met by May 2022. At this point, Invitalia’s shareholding of

ADI Holding would increase to 60% and ArcelorMittal would

invest up to €70 million to retain a 40% shareholding and joint

control over the company. Following the first equity injection,

and given that ADI Holding would henceforth operate

independently and in particular have its own funding plans,

ArcelorMittal derecognized the assets and liabilities (including

the remaining lease and purchase liability) of ADI Holding and

its operating subsidiaries from its consolidated statement of

financial position and accounts for its interest in the company

under the equity method. While the first Invitalia investment has

been made, no assurance can be given that the purchase will

be completed or that the conditions precedent to the investment

agreement itself will be fulfilled by May 2022 (in case conditions

precedent are not met or waived or the May 2022 deadline

extended, ADI Holding would not be required to complete the

purchase of Ilva's assets and a portion of its capital invested

would be returned) or that further operational, financial, legal,

regulatory, labor-related or political difficulties will not arise,

potentially resulting in the failure to achieve the anticipated

benefits of the project, further losses, renewed litigation and

payments of substantial amounts or other damages. For more

information see note 9.3 to ArcelorMittal’s consolidated financial

statements.

ArcelorMittal faces risks associated with its acquisition, via

a joint venture, of AMNS India.

ArcelorMittal acquired, via a joint venture with Nippon Steel

Corporation (“NSC”), AMNS India on December 16, 2019, in a

bankruptcy resolution process. The joint venture’s proposal, set

out in a resolution plan (the “Resolution Plan”) that detailed

among other things the amount to be paid to existing creditors

and towards capital infusion (totaling $7.1 billion and including

$417 million of guaranteed working capital adjustment) and the

improvements and related capital expenditures (totaling $2.6

billion) to be made over the medium-term, was approved by the

Indian Supreme Court on November 15, 2019.

The implementation of the Resolution Plan subjects

ArcelorMittal to various risks. On the operational front, the

industrial project to turnaround AMNS India and further improve

operational profitability is large-scale and ambitious. While

ArcelorMittal has substantial experience in turnaround

situations, the scale of this one is particularly large and it is the

Company’s inaugural large-scale acquisition in India, an

emerging market. Moreover, AMNS India’s acquired assets did

not include certain assets that are ancillary to the steel plant,

such as port facilities. While AMNS India has since made

additional acquisitions, such as Odisha Slurry Pipeline

Infrastructure Limited and a power plant, without requiring

additional shareholder funding, it is possible that the joint

venture may make additional acquisitions financed in a manner

similar to that of the AMNS India acquisition and subject the

Company to similar risks. Capital expenditure in excess of

budgeted amounts, delays and difficulties in achieving

commercial objectives therefore cannot be ruled out. The risks

in this respect are compounded to an extent by the fact that

AMNS India was emerging from bankruptcy (meaning, among

other things, that maintenance capital expenditures were

deferred) and is owned and operated by a joint venture with

attendant risks around strategic alignment, potential discord and

deadlock. ArcelorMittal is exposed to the extent of its equity

investment and its guarantees of the financings of the joint

venture. On March 16, 2020, AMNS Luxembourg, the parent

company of the joint venture AMNS India, entered into a $5.1

billion ten-year term loan agreement with several Japanese

banks which is guaranteed by ArcelorMittal and NSC in

proportion to their interests in the joint venture. See further

information in note 2.4 to the consolidated financial statements.

ArcelorMittal’s greenfield, brownfield and other investment

projects are subject to financing, execution and completion

risks.

The Company has announced a number of greenfield or

brownfield development projects as well as other significant

investment projects which are capital intensive. See “Properties

and capital expenditures—Property, plant and equipment—

Management report

Investments in joint ventures” and “Properties and capital

expenditures—Capital expenditures” for further information on

projects the Company has announced. Particularly significant

recent projects include the Company’s announced projects in

Liberia, Brazil, Ukraine and Mexico, involving estimated capital

expenditures of approximately $2.9 billion over the 2022 to 2024

period. In addition, ArcelorMittal’s joint venture AMNS India has

signed a memorandum of understanding with the Government

of Odisha to set-up an integrated steel plant with a 12 million

tonne per annum capacity in the Kendrapara district of Odisha

and other joint ventures have ongoing significant investment

projects.

To the extent these projects go forward, they would entail

substantial capital expenditures, and their timely completion and

successful operation may be affected by factors beyond the

control of ArcelorMittal. These factors include receiving financing

on reasonable terms, obtaining or renewing required regulatory

approvals and licenses, securing and maintaining adequate

property rights to land and mineral resources, local opposition to

land acquisition or project development, managing relationships

with or obtaining consents from other shareholders, revision of

economic viability projections, demand for the Company’s

products, local environmental or health-related conditions, and

general economic conditions. Any of these factors may cause

the Company to delay, modify or forego some or all aspects of

its development projects. For investment projects that the

Company expects to fund primarily through internal sources,

these sources may prove insufficient depending on the amount

of internally generated cash flows and other uses of cash, and

the Company may need to choose between incurring external

financing or foregoing the investment. The Company cannot

guarantee that it will be able to execute its greenfield, brownfield

or other investment projects, and to the extent that they

proceed, that it will be able to complete them on schedule,

within budget, or achieve an adequate return on its investment.

Conversely, should the Company decide to postpone or cancel

development projects, it could incur various negative

consequences such as litigation or impairment charges, as well

as loss of anticipated strategic benefits.

ArcelorMittal faces risks associated with its investments in

joint ventures and associates.

ArcelorMittal has investments in numerous joint ventures and

associates. See “Properties and capital expenditures—Property,

plant and equipment—Investments in joint ventures” and note

2.4 to ArcelorMittal’s consolidated financial statements. In

particular, it has structured significant growth transactions in

recent years, including Calvert and AMNS India as joint

ventures, and recently restructured ArcelorMittal Italia as a joint

venture. These joint ventures subject ArcelorMittal to several

types of risks.

First, risks that are endemic to joint ventures generally due to

their nature as entities over which control is shared. These

include the risk of dead-lock and/or coordination issues affecting

the implementation of strategy. To the extent joint ventures and

associates are controlled and managed by partners, they may

not fully comply with ArcelorMittal’s standards, controls and

procedures, including ArcelorMittal’s health, safety, environment

and community standards; this could lead to higher costs,

reduced production or environmental, health and safety

incidents or accidents, which could adversely affect

ArcelorMittal’s results and reputation.

Second, joint ventures may be the source of substantial

expenditures and financial exposure. Although ArcelorMittal’s

joint ventures are responsible for their own funding and it does

not consolidate their indebtedness, ArcelorMittal may make

substantial cash contributions to extend loans to and/or

guarantee the debt of its joint ventures. This may particularly be

the case for joint ventures that are strategic and that are

expanding and developing, such as AMNS India and Calvert. As

of December 31, 2021, ArcelorMittal had given $4.3 billion in

guarantees on behalf of associates and joint ventures including

$3.1 billion issued on behalf of AMNS India, $279 million issued

on behalf of Calvert, $323 million in relation to outstanding lease

liabilities for vessels operated by Global Chartering and $175

million on behalf of its joint venture Al Jubail (discussed further

below). See notes 2.4.1, 2.4.2 and 9.4 to ArcelorMittal’s

consolidated financial statements.

Third, joint ventures and associates may experience financial

difficulties. In such circumstances, ArcelorMittal may choose to

restructure the joint venture, to contribute additional equity or to

guarantee additional financing. The Company also may be

exposed to loss of its investment or calls on existing guarantees.

For example, the financial situation of ArcelorMittal’s joint

venture in Saudi Arabia, Al Jubail, was negatively impacted by a

slower than expected ramp-up of operations and required

further funding in 2018 and 2019; it may require additional

funding in the future. ArcelorMittal has provided shareholder

loans to assist with funding and has guaranteed some of the

joint venture’s indebtedness (see above).

Finally, ArcelorMittal’s investments in joint ventures and

associates may result in impairments. In 2020, as a result of

lower cash flow projections resulting from weaker market

conditions partially linked to the COVID-19 pandemic, the

Company recognized a $211 million impairment charge with

respect to its associate DHS Group. As of December 31, 2021,

ArcelorMittal’s investments accounted for under the equity

method had a carrying amount of $10.3 billion, including AMNS

India ($3.3 billion), Acciaierie d'Italia ($1.2 billion), DHS Group

($650 million), China Oriental ($1.3 billion), Gonvarri ($617

million), Calvert ($866 million), Baffinland ($386 million) and

VAMA ($249 million).

Management report

V. Risks related to ArcelorMittal’s financial position and

organizational structure

Changes in assumptions underlying the carrying value of

certain assets, including as a result of adverse market

conditions, could result in the impairment of such assets,

including intangible assets such as goodwill.

At each reporting date, in accordance with the Company’s

accounting policy described in note 5.3 to ArcelorMittal’s

consolidated financial statements, ArcelorMittal reviews the

carrying amounts of its tangible and intangible assets (goodwill

is reviewed annually or whenever changes in circumstances

indicate that the carrying amount may not be recoverable) to

determine whether there is any indication that the carrying

amount of those assets may not be recoverable through

continuing use. If any such indication exists, the recoverable

amount of the asset (or cash-generating unit) is reviewed in

order to determine the amount of the impairment, if any.

If certain of management’s estimates change during a given

period, such as the discount rate, capital expenditures, expected

changes to average selling prices, growth rates, shipments and

direct costs, the estimate of the recoverable amount of goodwill

or the asset could fall significantly and result in impairment.

While impairment does not affect reported cash flows, the

decrease of the estimated recoverable amount and the related

non-cash charge in the consolidated statements of operations

could have a material adverse effect on ArcelorMittal’s results of

operations. For example, in 2019, the Company recognized $1.3

billion of impairments on the fixed assets of ArcelorMittal USA

(of which $660 million was reversed in 2020 in connection with

the agreed sale to Cleveland-Cliffs) and a $75 million

impairment at ArcelorMittal South Africa following downward

revisions of cash flow projections. In 2020, the Company

recorded impairment charges of $196 million, including $92

million related to the permanent closure of the coke plant in

Florange (France) in the first quarter and $104 million following

the permanent closure of a blast furnace and steel plant in

Krakow (Poland) in the third quarter. The Company also

recognizes impairment in connection with intended sales, when

the carrying amount of the disposal group is higher than the fair

value less cost to sell. In this context, the Company recognized

a total impairment charge of $994 million (including $888 million

in connection with the intended sale of the ArcelorMittal Italia

remedy assets and $86 million in relation to the sale of the

Votorantim remedy assets) in 2018, an additional impairment of

$497 million in 2019 related to the remedy asset sales for the

ArcelorMittal Italia acquisition and a $331 million impairment

charge with respect the Company's plate assets in Europe in

2020. Substantial amounts of goodwill, tangible and intangible

assets remain recorded on the Company's consolidated

statement of financial position. As of December 31, 2021, the

Company's balance sheet included $3.9 billion of goodwill. More

generally, no assurance can be given as to the absence of

significant further impairment losses in future periods,

particularly if market conditions deteriorate or as a result of the

Russian invasion of Ukraine and any resulting economic

impacts. In particular, changes in key assumptions used in the

Group’s impairment tests, due to market conditions, regulations

(including environmental regulations) or other reasons may

result in additional impairment losses being recognized in the

future. In addition, for operations in jurisdictions where a legal

obligation of carbon neutrality has been established (i.e., EU

and Canada) the Company's assumptions include the significant

long-term investments necessary to reach the Group's

announced carbon emissions goals. With respect to operations

in other jurisdictions where decarbonization will occur at a

different pace, the Company increased risk premiums included

in their discount rates until they are able to accelerate their

decarbonization strategy to meet the 2050 carbon neutrality

objective and a legal obligation arises in the relevant jurisdiction.

The Company’s assumptions for future cash flows also include

an estimate for costs that the Company expects to incur to

acquire emission allowances, which primarily impacts the flat

steel operations in Europe. The assumption for carbon emission

cost is based on historical experience, expected opportunities to

mitigate or otherwise offset such future costs and information

available in respect of future changes. Due to economic

developments, uncertainties over the pace of transition and

available public funding support to implement low-emission

technologies, political and environmental actions that will be

taken to meet the carbon reduction goals, regulatory changes

and emissions activity arising from climate-related matters, the

Company’s assumptions used in the recoverable amount

calculations, among others those relating to capital expenditure

and carbon emission costs are inherently uncertain and may

ultimately differ from actual amounts.

ArcelorMittal's indebtedness could have an adverse impact

on its results of operations and financial position, and the

market's perception of ArcelorMittal's leverage may affect

its share price.

As of December 31, 2021, ArcelorMittal had total debt

outstanding of $8.4 billion, including $1.9 billion of short-term

indebtedness (including payables to banks and the current

portion of long-term debt) and $6.5 billion of long-term

indebtedness. As of December 31, 2021, ArcelorMittal had $4.4

billion of cash and cash equivalents, restricted cash and other

restricted funds, and $5.5 billion available to be drawn under

existing credit facilities. The Company also relies on its true sale

of receivables programs ($5.2 billion of trade receivables sold at

December 31, 2021), as a way to manage its working capital

cycle.

While ArcelorMittal’s indebtedness has decreased significantly

in recent years, were it to increase, this could contribute to the

Management report

Company’s vulnerability to adverse economic and competitive

pressures in its industry, place the Company at a competitive

disadvantage compared to competitors that have less debt; limit

flexibility in planning for, or reacting to, changes in its business

and industry; and limit its ability to borrow additional funds on

terms that are acceptable to the Company or at all.

Moreover, ArcelorMittal could, in order to increase its financial

flexibility and strengthen its balance sheet, implement capital

raising measures such as equity offerings (as was done in May

2009, January 2013, April 2016 and May 2020), which could

(depending on how they are structured) dilute the interests of

existing shareholders or require them to invest further funds to

avoid such dilution. In addition, ArcelorMittal has undertaken

and may undertake asset disposals in order to reduce debt, as it

did over several years through 2020.

In addition, credit rating agencies could downgrade

ArcelorMittal’s ratings either due to factors specific to

ArcelorMittal, a prolonged cyclical downturn in the steel industry

and mining industries, macroeconomic trends (such as global or

regional recessions or economic shocks such as that resulting

from the COVID-19 pandemic) or trends in credit and capital

markets more generally, and any future downgrades could lead

to an increase in its cost of borrowing. The margin under

ArcelorMittal’s principal credit facilities and certain of its

outstanding bonds is subject to adjustment in the event of a

change in its long-term credit ratings, and downgrades that

occurred in 2012, 2015 and 2020 resulted in increased interest

expense.

ArcelorMittal’s principal credit facilities contain restrictive

covenants. These covenants limit, inter alia, encumbrances on

the assets of ArcelorMittal and its subsidiaries, the ability of

ArcelorMittal’s subsidiaries to incur debt and the ability of

ArcelorMittal and its subsidiaries to dispose of assets in certain

circumstances. In April 2021, ArcelorMittal’s revolving credit

facility was amended so that the leverage ratio financial

covenant would permanently cease to apply in the event that the

Company obtained an investment grade long-term credit rating

(with a stable outlook) from two rating agencies (which occurred

in 2021).

These restrictive covenants could limit ArcelorMittal’s operating

and financial flexibility. Failure to comply with any covenant

would enable the lenders to accelerate ArcelorMittal’s

repayment obligations. Moreover, ArcelorMittal’s debt facilities

have provisions whereby certain events relating to other

borrowers within the ArcelorMittal group could, under certain

circumstances, lead to acceleration of debt repayment under the

credit facilities. Any invocation of these cross-acceleration

clauses could cause some or all of the other debt to accelerate,

creating liquidity pressures. In addition, the mere market

perception of a potential breach of any financial covenant, to the

extent in effect, could have a negative impact on ArcelorMittal’s

ability to refinance its indebtedness on acceptable conditions.

Furthermore, some of ArcelorMittal’s debt is subject to floating

rates of interest and thereby exposes ArcelorMittal to interest

rate risk (i.e., if interest rates rise, ArcelorMittal’s debt service

obligations on its floating rate indebtedness would increase).

Depending on market conditions, ArcelorMittal from time to time

uses interest-rate swaps or other financial instruments to hedge

a portion of its interest rate exposure either from fixed to floating

or from floating to fixed. ArcelorMittal had exposure to 93% of its

long-term debt at fixed interest rates and 7% at floating rates as

of December 31, 2021. In addition, in April 2021, ArcelorMittal’s

revolving credit facility was amended so that the margin payable

will be increased or decreased depending on the Company’s

performance against two metrics measured annually against

pre-defined targets with respect to its environmental and

sustainability performance (CO2e intensity of the Company’s

European operations and the number of facilities which have

been certified by ResponsibleSteel™).

In addition to the foregoing specific risks relating to

ArcelorMittal’s indebtedness, its share price is affected by the

markets’ perception of its leverage.

For further information on ArcelorMittal's indebtedness see

“Operating and financial review—Liquidity and capital

resources” and note 6.1.2 to ArcelorMittal’s consolidated

financial statements.

ArcelorMittal’s ability to fully utilize its recognized deferred

tax assets depends on its profitability and future cash

flows.

At December 31, 2021, ArcelorMittal had $8.1 billion recorded

as deferred tax assets on its consolidated statement of financial

position representing a $0.2 billion increase as compared to

December 31, 2020. In 2020, deferred tax assets decreased by

$0.8 billion primarily due to the changes in the expectation of

future profits mainly in Luxembourg. In 2021, the Company

recorded deferred tax benefit of $0.49 billion mainly due to the

recognition of deferred tax assets in Luxembourg following

increase in the future taxable income expectation on unrealized

gains on emission rights and energy derivative instruments. The

deferred tax assets can be utilized only if, and only to the extent

that, ArcelorMittal’s operating subsidiaries generate adequate

levels of taxable income in future periods to offset the tax loss

carry forwards and reverse the temporary differences prior to

expiration. At December 31, 2021, the amount of future income

required to recover ArcelorMittal’s deferred tax assets of $8.1

billion was at least $32.9 billion at certain operating subsidiaries.

ArcelorMittal’s ability to generate taxable income is subject to

general economic, financial, competitive, legislative, regulatory

Management report

and other factors that are beyond its control. If ArcelorMittal

generates lower taxable income than the amount it has

assumed in determining its deferred tax assets, then the value

of deferred tax assets will be reduced. In addition, assumptions

regarding the future recoverability of deferred tax assets depend

on management’s estimates of future taxable income in

accordance with the tax laws applicable to ArcelorMittal’s

subsidiaries in the countries in which they operate. If in the

course of its assessments management determines that the

carrying amount of any of its deferred tax assets may not be

recoverable pursuant to such prevailing tax laws, the

recoverable amount of such deferred tax assets may be

impaired.

Underfunding of pension and other post-retirement benefit

plans at some of ArcelorMittal’s operating subsidiaries

could require the Company to make substantial cash

contributions to pension plans or to pay for employee

healthcare, which may reduce the cash available for

ArcelorMittal’s business.

ArcelorMittal’s principal operating subsidiaries in Brazil, Canada,

Europe and South Africa provide defined benefit pension and

other post-retirement benefit plans to their employees. Some of

these plans are currently underfunded, see note 8.2 to

ArcelorMittal’s consolidated financial statements for the total

value of plan assets and any deficit.

ArcelorMittal’s funding obligations depend upon future asset

performance, which is tied to equity and debt markets to a

substantial extent, the level of interest rates used to discount

future liabilities, actuarial assumptions and experience, benefit

plan changes and government regulation. Because of the large

number of variables that determine pension funding

requirements, which are difficult to predict, as well as any

legislative action, future cash funding requirements for

ArcelorMittal’s pension plans and other post-employment benefit

plans could be significantly higher than current estimates.

Increases in the general life expectancy assumption have

contributed to increases in the defined benefit obligation. In

these circumstances, funding requirements could have a

material adverse effect on ArcelorMittal’s business, financial

condition, results of operations or prospects.

ArcelorMittal’s results of operations could be affected by

fluctuations in foreign exchange rates, particularly the euro

to U.S. dollar exchange rate, as well as by exchange

controls imposed by governmental authorities in the

countries where it operates.

ArcelorMittal operates and sells products globally and as a

result, its business, financial condition, results of operations or

prospects could be adversely affected by fluctuations in

exchange rates. A substantial portion of ArcelorMittal’s assets,

liabilities, operating costs, sales and earnings are denominated

in currencies other than the U.S. dollar (ArcelorMittal’s reporting

currency). Accordingly, its results of operations are subject to

translation risk (i.e., the U.S. dollar value of revenue and profits

generated in other currencies and its debt denominated in other

currencies) and transaction risk (i.e., a mismatch between the

currency of costs and revenue). Foreign exchange loss for the

year ended December 31, 2021 was $155 million as compared

to a gain of $107 million for the year ended December 31, 2020.

Moreover, ArcelorMittal operates in several countries whose

currencies are, or have in the past been, subject to limitations

imposed by those countries’ central banks, or which have

experienced sudden and significant devaluations. In emerging

countries where ArcelorMittal has operations and/or generates

substantial revenue, such as Argentina, Brazil, India, South

Africa, Venezuela, Kazakhstan and Ukraine, the risk of

significant currency devaluation is high. For example, the

Argentinian peso has continued to substantially depreciate since

2018, and in 2021, it depreciated approximately 22.1% versus

the U.S dollar. Moreover, inflation in 2019 reached its highest

point since 1991 at 53.8% attesting the hyperinflationary

dimension of Argentina's economy. In order to slow peso

depreciation, and in response to the economic situation, the

Argentinian government enacted a series of currency controls

which require central bank permission to exchange pesos for

foreign currency.

Currency devaluations, the imposition of new exchange controls

or other similar restrictions on currency convertibility, or the

tightening of existing controls in the countries in which

ArcelorMittal operates could adversely affect its business,

financial condition, results of operations or prospects. See

“Business overview—Government regulations—Key currency

regulations and exchange controls” and “Operating and financial

review—Economic conditions—Impact of exchange rate

movements”.

The Significant Shareholder has the ability to exercise

significant influence over the outcome of shareholder

votes.

At December 31, 2021, a trust (HSBC Trustee (C.I.) Limited, as

trustee), of which Mr. Lakshmi N. Mittal, Mrs. Usha Mittal and

their children are the beneficiaries (referred to as the “Significant

Shareholder”), beneficially owned (within the meaning of Rule

13d-3 under the Securities Exchange Act of 1934, as amended)

ordinary shares amounting (when aggregated with ordinary

shares of ArcelorMittal held directly by Mr. and Mrs. Mittal) to

330,940,242 in the aggregate, representing 36.33% of

ArcelorMittal’s then outstanding shares. The foregoing

statement does not give effect to the ordinary shares resulting

from the conversion of the mandatorily convertible subordinated

notes issued in May 2020 outstanding as of December 31,

Management report

2021. Assuming conversion of all such outstanding mandatorily

convertible subordinated notes (including those held by the

Significant Shareholder), the Significant Shareholder would,

together with Mr. and Mrs. Mittal, beneficially own 341,828,522

ordinary shares representing 32.58% of issued shares

(assuming conversion of all notes at the maximum conversion

ratio) or 340,206,842 ordinary shares representing 32.74% of

issued shares (assuming conversion of all notes at the minimum

conversion ratio). As a result, the Significant Shareholder has

the ability to significantly influence the decisions adopted at the

ArcelorMittal general meetings of shareholders, including

matters involving mergers or other business combinations, the

acquisition or disposition of assets, issuances of equity and

obtaining funding through debt. The Significant Shareholder also

has the ability to significantly influence a change of control of

ArcelorMittal. For further information on the Company’s major

shareholders, see “Shareholders and markets—Major

shareholders”.

ArcelorMittal is a holding company that depends on the

earnings and cash flows of its operating subsidiaries,

which may not be sufficient to meet future operational

needs or for shareholder distributions, and loss-making

subsidiaries may drain cash flow necessary for such needs

or distributions.

As a holding company, ArcelorMittal is dependent on the

earnings and cash flows of, and dividends and distributions

from, its operating subsidiaries to pay expenses, meet its debt

service obligations, pay any cash dividends or distributions on

its ordinary shares or conduct share buy-backs. Cash and cash

equivalents are primarily centralized at the parent level and are

managed by ArcelorMittal Treasury SNC, although from time to

time cash or cash equivalent balances may be held at the

Company’s international subsidiaries or its holding companies.

Some of these operating subsidiaries have debt outstanding or

are subject to acquisition agreements that impose restrictions on

such operating subsidiaries’ ability to pay dividends, but such

restrictions are not significant in the context of ArcelorMittal’s

overall liquidity. These subsidiaries may also experience

operating difficulties that impact their cash flows. For example,

ArcelorMittal South Africa has experienced significant difficulties

in recent years, including significant outstanding debt, issues

with market demands, supply chain disruptions, labor strikes,

volatility of the rand vs. U.S. dollar, the effects of the COVID-19

pandemic and national lockdowns. Ongoing difficulties resulted

in 2016 in a rights offering entirely underwritten by ArcelorMittal

and an additional cash injection from ArcelorMittal, and the

auditor reports for 2019 and 2020 included a material

uncertainty related to going concern.

Repatriation of funds from operating subsidiaries may also be

affected by tax and foreign exchange policies in place from time

to time in the various countries where the Company operates,

though none of these policies are currently significant in the

context of ArcelorMittal’s overall liquidity. Under the laws of

Luxembourg, ArcelorMittal will be able to pay dividends or

distributions through income from industrial franchise fees or to

the extent that it is entitled to receive cash dividend distributions

from its subsidiaries, recognize gains from the sale of its assets

or record share premium from the issuance of shares.

If the earnings and cash flows of its operating subsidiaries are

substantially reduced, ArcelorMittal may not be in a position to

meet its operational needs or to make shareholder distributions

in line with announced proposals.

VI. Legal and regulatory risks

ArcelorMittal is subject to strict environmental, health and

safety laws and regulations that could give rise to a

significant increase in costs and liabilities.

ArcelorMittal is subject to a broad range of environmental,

health and safety laws and regulations in each of the

jurisdictions in which it operates. These laws and regulations

impose increasingly stringent standards regarding general

health and safety, air emissions, wastewater storage, treatment

and discharges, the use, handling and transportation of

hazardous, toxic or dangerous materials, waste disposal

practices and the remediation of environmental contamination,

and health and safety matters, among other things. The costs of

complying with, and the imposition of liabilities pursuant to these

laws and regulations can be significant, and compliance with

new and more stringent obligations may require additional

capital expenditures or modifications in operating practices.

Failure to comply can result in civil and or criminal penalties

being imposed, the suspension of permits, requirements to

curtail or suspend operations and lawsuits by third parties.

In the EU, the Industrial Emissions Directive (“IED”) defines the

so called Best Available Techniques (“BAT”) and sets the ranges

of values that need to be established as limits in the

environmental permits. The BAT are also used in other regions

as reference, and are periodically reviewed (in theory, an eight-

year cycle) to ensure a continuous improvement of

environmental performance. The EU Commission has started

the review of the IED, with a proposal expected in 2022, which

might lead to the strengthening of the permitting framework,

supported by growing general concerns about the effects of

pollution on the environment and human health.

Despite ArcelorMittal’s efforts to comply with environmental,

health and safety laws and regulations, and monitor and reduce

accidents at its facilities, health, safety and environmental

incidents or accidents, including those involving serious injury or

death, have occurred and may in the future occur. Such

accidents could include explosions or gas leaks, fires or

collapses in underground mining operations, crushing incidents,

Management report

vehicular accidents, falls while working at heights, and other

accidents involving mobile equipment, or exposure to

radioactive or other potentially hazardous, toxic or dangerous

materials, which could have significant adverse consequences

for the Company’s workers and facilities, as well as the

environment.

Certain of these incidents may result in costs and liabilities and

negatively impact the Company's reputation or the operations of

the affected facilities. Such accidents could lead to production

stoppages, loss of personnel, loss of key assets, or put at risk

the Company's employees (and those of sub-contractors and

suppliers) or persons living near affected sites. Even if

ArcelorMittal's liability were to be covered by insurance, its

insurance premium may rise as a result. See also

“ArcelorMittal’s insurance policies provide limited coverage,

potentially leaving it uninsured against some business risks.” In

addition, any gap between community and worker expectations

and ArcelorMittal’s environmental, health and safety perceived

performance, as a result of any accidents, safety incidents or

even the perception of potential safety or environmental issues,

may negatively impact community relations, labor relations,

customer relations and the Company’s reputation and result in

disruptions to the Company’s operations.

In addition, accidents may arise from the usage of certain types

of equipment or from the adoption of operating practices that

prove to be insufficiently safe or the failure to follow the

Company's standard operating procedures. Accidents may also

be caused by human error, the lack of knowledge by its

employees on what to do in a given situation or the inability of its

employees to follow the prescribed protocols in a given

situation. Working in remote or hazardous conditions, where it

may be more difficult to mitigate the consequences of an

accident or put in place certain preventative measures, may

further increase such risks. Furthermore, the Company's ability

to conduct certain in-person health and safety training sessions

for its employees has been impeded by restrictions resulting

from the COVID-19 pandemic, which has had negative effects

on ArcelorMittal's recent health and safety record. The

occurrence of an accident also may lead to legal claims that

seek to hold the Company liable, and it may not be successful in

defending against such claims.

ArcelorMittal also incurs costs and liabilities associated with the

assessment and remediation of contaminated sites, and in its

mining activities, those resulting from tailings and sludge

disposal, effluent management, and rehabilitation of land

disturbed during mining processes. In addition to the impact on

current facilities and operations, environmental remediation

obligations can give rise to substantial liabilities in respect of

divested assets and past activities. This may also be the case

for acquisitions when liabilities for past acts or omissions are not

adequately reflected in the terms and price of the acquisition.

ArcelorMittal could become subject to further remediation

obligations in the future, as additional contamination is

discovered or cleanup standards become more stringent.

ArcelorMittal could become subject to unidentified liabilities in

the future, such as those relating to uncontrolled tailings

breaches or other future events or to underestimated emissions

of polluting substances. For example, mining companies have

incurred substantial liabilities in connection with the failure of

tailing pond dams. In February 2019, the Company decided as a

precautionary measure to implement its plan to evacuate the

community situated downstream of its dormant Serra Azul tailing

dam with a 5.8Mm3 tailings volume in Brazil. The decision was

based on an updated site-based assessment following recent

incidents in the Brazilian mining sector pending further testing

and implementation of any necessary mitigation measures. In

2021, pursuant to the Complementary Agreement Term signed

on June 7, 2021 between ArcelorMittal Brasil and the Federal

and State Prosecutor Offices, ArcelorMittal Brasil incurred the

obligation to execute an action plan to ensure the stability,

safety and decommissioning of the Serra Azul tailing dam, and

in the third quarter of 2021, recorded a $123 million provision

related to expected costs required to strengthen the dam. See

“Business overview—Sustainable development—Management

Theme #4: Environment—Responsible water use”.

ArcelorMittal’s operations may also be located in areas where

individuals or communities could regard its activities as having a

detrimental effect on their natural environment and conditions of

life. Any actions taken by such individuals or communities in

response to such concerns could compromise ArcelorMittal’s

profitability or, in extreme cases, the viability of an operation or

the development of new activities in the relevant region or

country.

For further information, see “Business overview—Government

regulations—Health and safety laws and regulations” and

“Business overview—Government regulations—Environmental

laws" and regulations and note 9.1 to ArcelorMittal’s

consolidated financial statements.

Laws and regulations restricting emissions of greenhouse

gases could force ArcelorMittal to incur increased capital

and operating costs and could have a material adverse

effect on ArcelorMittal’s results of operations, financial

condition and reputation.

Compliance with new and more stringent environmental

obligations relating to GHG emissions may require additional

capital expenditures or modifications in operating practices, as

well as additional reporting obligations. The integrated steel

process involves carbon and creates carbon dioxide (“CO2”),

which distinguishes integrated steel producers from mini-mills

and many other industries where CO2 generation is primarily

Management report

linked to energy use. The EU has established GHG regulations

and has revised its emission trading system for the period after

2020 in a manner that may require ArcelorMittal to incur

additional costs to acquire emissions allowances, as discussed

below. In July 2021, the European Climate Law was published,

setting a new EU climate ambition target of at least a 55%

reduction in GHG emissions in 2030 versus 1990 (compared

with the current ambition of a 40% reduction) and reaching

carbon neutrality by 2050. In July 2021, the European

Commission published the so called “Fit for 55” package aimed

at aligning the EU’s climate, energy, land use, transport and

taxation policies with the 2030 ambition set by the Climate Law.

To become EU law, this set of proposals now needs to be

adopted by both the European Parliament and the Council of the

European Union. The proposals are all interconnected, and they

combine: tightening and extending of the existing EU Emissions

Trading System; increased use of renewable energy; greater

energy efficiency; a faster roll-out of low emission transport

modes and the infrastructure and fuels to support them; an

alignment of taxation policies with the European Green Deal

objectives; a carbon border adjustment mechanism (“CBAM”) to

prevent carbon leakage; and tools to preserve and grow

ArcelorMittal's natural carbon sinks. Of particular relevance are

the EU Emissions Trading System and CBAM proposals that will

mainly impact the carbon emissions allowances second trading

period of Phase IV, 2026-2030, in a manner that may require

ArcelorMittal to incur additional costs to acquire emissions

allowances. Given the controversial nature of the proposals and

the expected social and economic impact, protracted

negotiations and changes can be expected.

Other jurisdictions have also started to enact similar regulations,

including South Africa, where a CO2 tax system was introduced

in 2019 and in Kazakhstan, where the Emission Trading

Scheme restarted operation on January 1, 2018 with new

trading procedures and allocation methods supported by an

online platform for monitoring, reporting and verifying emission

sources and GHG.

Other regulations have been implemented in Argentina, Ukraine

and Canada and additional measures may be enacted in the

future in other jurisdictions, further increasing the complexity of

compliance with environmental laws and regulations.

Following the international agreement reached by the United

Nations Framework Convention on Climate Change in

December 2015 with the aim to implement the necessary drivers

to achieve drastic reductions of carbon emissions (the “Paris

Agreement”), the environmental regulatory system has become

more complex worldwide and the Company has taken steps to

reduce its emission footprint, which in 2020 totaled

approximately 124 million tonnes of CO2 (excluding

ArcelorMittal USA and ArcelorMittal Italia), through various

research and development initiatives, and announced in July

2021 a 2030 global carbon emissions intensity reduction target

of 25%, an increase in its European 2030 carbon emissions

intensity reduction target to 35% from 30% previously

announced, and a Group-wide commitment to be carbon neutral

by 2050. Whether in the form of a national or international cap-

and-trade emissions permit system, a carbon tax or acquisition

of emission rights at market prices, emissions controls, reporting

requirements, or other regulatory initiatives, such environmental

regulations could have a negative effect on ArcelorMittal’s

production levels, income and cash flows. These laws could

also negatively affect the Company’s suppliers and customers,

which could translate into higher costs and lower sales. In

particular, the EU Commission’s decision to further reduce the

allocation of CO2 emission rights to companies (as discussed

above) could negatively impact the global steel industry, as the

amount of such rights is currently at the limit of technically

achievable operating conditions. CO2 emissions regulations

have already resulted in increased costs in Europe, and

ArcelorMittal expects costs will continue to increase with the

implementation of Phase IV of the ETS that started in 2021 and

that has seen EU allowances prices increase significantly

compared to 2020 levels. In addition, the COVID-19 pandemic

and its economic consequences caused a decline in production

at most EU sites in 2020. Given that, under Phase IV rules, the

activity level in 2020 has an effect on the calculation of the

allocation in 2021 and 2022 and also on the second trading

period of Phase IV (2026-2030), the lower production levels

might lead to reduced allocation.

Furthermore, many developing nations have not yet instituted

significant GHG regulations, and the Paris Agreement

specifically recognizes that GHG emissions will peak later in

developing countries. As the Intended Nationally Determined

Contributions (“INDC”) for developing nations under the Paris

Agreement may be less stringent than for developed nations in

light of different national circumstances, ArcelorMittal may be at

a competitive disadvantage relative to steelmakers having more

or all of their production in developing countries. Depending on

the extent of the difference between the requirements in

developed regions (such as Europe) and developing regions

(such as China or the CIS), this competitive disadvantage could

be severe and render production in the developed region

structurally unprofitable. High carbon costs in combination with

weakening demand, rising imports, high energy costs and high

iron ore prices was one of the factors underlying the Company’s

decision to implement production cuts in Europe in 2019. To

address the resulting competitive disadvantage compared to

imports, which is expected to increase in the future absent

government intervention, the Company has been advocating

vis-à-vis the European Commission to introduce a CBAM to the

safeguard measures on steel imports in order to ensure that

imports into Europe face the same carbon costs as producers in

Europe. In July 2021, as part of Fit for 55 (discussed above), the

Management report

European Commission proposed a CBAM which will

progressively phase out free allocation of CO2 emissions

allowances through a 10% reduction per year starting in 2026.

This would, if implemented, contribute to a very significant

shortage in free allocation in the second trading period of Phase

IV, therefore increasing the carbon costs ArcelorMittal will face.

This could result in the Company incurring significant additional

costs to acquire emissions allowances, the purchase of which

may or may not be effectively hedged in the future. The financial

impact of any reduction or phase out of free allocations will also

depend on the timing of the implementation of changes (itself

dependent on political and regulatory developments), and the

Company’ s parallel progress in decarbonization, the cost of

which may also be higher than currently expected. In addition,

the effectiveness of the CBAM proposal against carbon leakage

is untested and the provisions to address circumvention risks,

including resource shuffling and cost absorption seem

insufficient. No assurance can be given as to the timing or

adoption of such proposal or its implementation.

In addition, as regulators and investors increasingly focus on

climate change issues, the Company is exposed to the risk of

frameworks and regulations being adopted that are ill-adapted

to its operations. For example, the most established framework

for carbon pricing and emissions trading schemes is currently

the European Union's ETS discussed above. As mentioned

above, the Company has highlighted the importance that a

CBAM be included in this system in order to avoid competitive

distortions such as European steel becoming overpriced due to

European carbon policy, prompting the market to outsource its

steel from other regions where carbon is less expensive. With

respect to investors, the European Union has reached a political

agreement on a package of measures to implement key actions

with respect to its sustainable finance plan, and, in June 2020,

the European Commission published the EU Taxonomy for

Sustainable Finance, a unified classification system to define

what can be considered an environmentally sustainable

economic activity, as a step in the efforts to channel investments

into sustainable activities by making it clearer which economic

activities most contribute to meeting the EU's environmental

objectives. The Taxonomy Delegated Act on climate mitigation

and adaptation criteria is effective as of January 1, 2022 but

Delegated Acts for the four other environmental objectives are

still pending. A proposal for a Corporate Sustainability Reporting

Directive (“CSRD”), which envisages the adoption of EU

sustainability reporting standards to be developed by the

European Financial Reporting Advisory Group (“EFRAG”), with

such standards to be tailored to EU policies building on and

contributing to international standardization initiatives, is to be

adopted by October 2022. The SEC has also indicated that it

plans to adopt new climate change disclosure requirements. If

the standards or requirements adopted are not appropriate for

the Company or if investors, financial institutions or other

stakeholders, including the public, begin to view investments in

steel and mining as undesirable, it may become more difficult

and/or more expensive for the Company to obtain financing.

While the Company has taken significant steps and continues to

adapt its operations in light of climate change and the need for

sustainability, such steps may not be in line with future

frameworks or regulations or market views of investment

suitability. Moreover, the Company may in the future face

increasing shareholder activism and/or litigation in relation to

sustainability matters. See also “The Group’s carbon emissions

intensity reduction targets are based on current assumptions

with respect to the costs, government and societal support for

the reduction of carbon emissions in particular regions and the

advancement of technology and infrastructure related to the

reduction of carbon emissions over time, which may not

correspond in the future to ArcelorMittal’s current assumptions

and may render its targets more costly, more difficult, or even

impossible, to achieve”. For further information on

environmental laws and regulations and how they affect the

Company's operations, see “Business overview—Government

regulations—Environmental laws and regulations” and note 9.1

to ArcelorMittal’s consolidated financial statements.

The income tax liability of ArcelorMittal may substantially

increase if the tax laws and regulations in countries in

which it operates change or become subject to adverse

interpretations or inconsistent enforcement.

Taxes payable by companies in many of the countries in which

ArcelorMittal operates are substantial and include value-added

tax, excise duties, profit taxes, payroll-related taxes, property

taxes, mining taxes and other taxes. Tax laws and regulations in

some of these countries may be subject to frequent change,

varying interpretation and inconsistent enforcement. Ineffective

tax collection systems and national or local government budget

requirements may increase the likelihood of the imposition of

arbitrary or onerous taxes and penalties, which could have a

material adverse effect on ArcelorMittal’s financial condition and

results of operations. In addition to the usual tax burden

imposed on taxpayers, these conditions create uncertainty as to

the tax implications of various business decisions. This

uncertainty could expose ArcelorMittal to significant fines and

penalties and to enforcement measures despite its best efforts

at compliance, and could result in a greater than expected tax

burden. See note 10 to ArcelorMittal’s consolidated financial

statements.

In addition, many of the jurisdictions in which ArcelorMittal

operates have adopted transfer pricing legislation. If tax

authorities impose significant additional tax liabilities as a result

of transfer pricing adjustments, it could have a material adverse

effect on ArcelorMittal’s financial condition and results of

operations.

Management report

It is possible that tax authorities in the countries in which

ArcelorMittal operates will introduce additional revenue raising

measures. The introduction of any such provisions may affect

the overall tax efficiency of ArcelorMittal and may result in

significant additional taxes becoming payable. Any such

additional tax exposure could have a material adverse effect on

the Company’s financial condition and results of operations.

ArcelorMittal may face a significant increase in its income taxes

if tax rates increase or the tax laws or regulations in the

jurisdictions in which it operates, or treaties between those

jurisdictions, are modified in an adverse manner. This may

adversely affect ArcelorMittal’s cash flows, liquidity and ability to

pay dividends.

ArcelorMittal is subject to economic policy, political,

military, social and legal risks and uncertainties in the

emerging markets in which it operates or proposes to

operate, and these uncertainties may have a material

adverse effect on ArcelorMittal’s business, financial

condition, results of operations or prospects.

ArcelorMittal operates, or proposes to operate, in a large

number of emerging markets. In recent years, many of these

countries have implemented measures aimed at improving the

business environment and providing a stable platform for

economic development. ArcelorMittal’s business strategy has

been developed partly on the assumption that this

modernization, restructuring and upgrading of the business

climate and physical infrastructure will continue, but this cannot

be guaranteed. Any slowdown in the development of these

economies could have a material adverse effect on

ArcelorMittal’s business, financial condition, results of

operations or prospects, as could insufficient investment by

government agencies or the private sector in physical

infrastructure. For example, the failure of a country to develop

reliable electricity and natural gas supplies and networks, and

any resulting shortages or rationing, could lead to disruptions in

ArcelorMittal’s production.

Moreover, some of the countries in which ArcelorMittal operates

have been undergoing substantial political transformations from

centrally controlled command economies to market-oriented

systems or from authoritarian regimes to democratically elected

governments and vice-versa. Political, economic and legal

reforms necessary to complete such transformation may not

progress sufficiently. On occasion, ethnic, religious, historical

and other divisions have given rise to tensions and, in certain

cases, wide-scale civil disturbances and military conflict. The

political systems in these countries are vulnerable to their

populations’ dissatisfaction with their government, reforms or the

lack thereof, social and ethnic unrest and changes in

governmental policies, any of which could have a material

adverse effect on ArcelorMittal’s business, financial condition,

results of operations or prospects and its ability to continue to do

business in these countries. As an example, in Kazakhstan,

there were widespread protests (and violent clashes between

protestors and police) in early January 2022, resulting in a

government crackdown (aided by Russian forces). The prospect

of further unrest and resulting political or economic

destabilization cannot be ruled out. Furthermore, certain of

ArcelorMittal’s operations are also located in areas where acute

drug-related violence (including executions and kidnappings of

non-gang civilians) occurs and the largest drug cartels operate,

such as the states of Michoacán, Sinaloa and Sonora in Mexico.

Certain emerging markets where ArcelorMittal has operations

have experienced or are experiencing particularly difficult

operating conditions. In Brazil, for example, despite a strong

rebound post pandemic, GDP is still below its first quarter of

2014 peak amid continued political uncertainty. Economic

growth in South Africa has been weak since entering a

recession in the second quarter of 2018, and prior to this

recession, the South African steel and mining industries have

been subject to a challenging operating environment

characterized by lower local demand, increased cheap imports

and higher costs, resulting in losses in recent years for

ArcelorMittal South Africa. Many emerging markets are also at

risk of economic crises (be it external debt, currency, domestic

corporate, household or public debt crises) usually brought on

by an economic or political shock which can exacerbate existing

domestic structural imbalances. Crises in Argentina and Turkey

in 2018/19 were examples and had negative impacts on the

Company’s core markets in Brazil and the EU, respectively.

Other countries at risk of further economic crises include Turkey

(renewed external debt/Lira crisis), South Africa (in relation to its

public debt), Ukraine (external debt), Brazil (long term public

debt sustainability) and to a lesser extent India (again in relation

to its public debt).

Finally, ArcelorMittal's operations in certain countries may be

affected by military conflicts. The current situation in Ukraine,

where the Company has substantial operations, is an example.

See "Russia’s invasion of Ukraine, international reaction to it

and any regional or global escalation of the conflict, could

adversely affect the Company’s business and results of

operations."

In addition, epidemics and/or pandemics may affect

ArcelorMittal’s operations in certain regions and, in some cases,

globally. See “Disruptions to ArcelorMittal’s manufacturing

processes caused for example by equipment failures, natural

disasters, epidemics or pandemics or extreme weather events

could adversely affect its operations, customer service levels

and financial results” above.

Moreover, the legal systems in some of the countries in which

ArcelorMittal operates remain less than fully developed,

Management report

particularly with respect to the independence of the judiciary,

property rights, the protection of foreign investment and

bankruptcy proceedings, generally resulting in a lower level of

legal certainty or security for foreign investment than in more

developed countries. ArcelorMittal may encounter difficulties in

enforcing court judgments or arbitral awards in some countries

in which it operates because, among other reasons, those

countries may not be parties to treaties that recognize the

mutual enforcement of court judgments. Assets in certain

countries where ArcelorMittal operates could also be at risk of

expropriation or nationalization, and compensation for such

assets may be below fair value. For example, the Venezuelan

government has implemented a number of selective

nationalizations of companies operating in the country to date.

Although ArcelorMittal believes that the long-term growth

potential in emerging markets is strong, and intends them to be

the focus of the majority of its near-term growth capital

expenditures, legal obstacles could have a material adverse

effect on the implementation of ArcelorMittal’s growth plans and

its operations in such countries.

ArcelorMittal is subject to an extensive, complex and

evolving regulatory framework which may expose it and its

subsidiaries, joint ventures and associates to

investigations by governmental authorities, litigation and

fines, in relation, among other things, to antitrust and

compliance matters. The resolution of such matters could

negatively affect the Company’s strategy, operations,

profitability and cash flows in a particular period or harm its

reputation.

ArcelorMittal’s business encompasses multiple jurisdictions and

complex regulatory frameworks, including in relation to antitrust,

and economic sanctions, anti-corruption and anti-money

laundering matters. Laws and regulations in these areas are

complex and constantly evolving and enforcement of them

continues to increase. ArcelorMittal may as a result become

subject to increasing limitations on its business activities and to

the risk of fines or other sanctions for non-compliance. From

time to time, the Company is subject to review by authorities

that monitor market power in any of the markets in which it

operates. To the extent that ArcelorMittal is deemed by relevant

authorities to exhibit significant market power, it can be subject

to various regulatory obligations and restrictions, such as

disposing of assets or granting access to its operations to third

parties or being prevented from completing acquisitions, which

could thereby adversely affect its results of operations and

profitability. As a result of its position in the steel industry and its

historical growth through acquisitions, ArcelorMittal could be

subject to governmental investigations and lawsuits by private

parties based on antitrust laws. These could require significant

expenditures and result in liabilities or governmental orders that

could have a material adverse effect on ArcelorMittal’s business,

operating results, financial condition and prospects. ArcelorMittal

and certain of its subsidiaries are currently under investigation

by governmental entities in several countries, and are named as

defendants in a number of lawsuits relating to various antitrust

matters. Antitrust proceedings, investigations and follow-on

claims involving ArcelorMittal subsidiaries are currently pending

in various countries including Brazil and Spain. See note 9.3 to

ArcelorMittal’s consolidated financial statements. Because of the

fact-intensive nature of the issues involved and the inherent

uncertainty of such litigation and investigations, the nature of the

resolutions of such proceedings are difficult to forecast but

negative outcomes are possible. An adverse ruling in the

proceedings described above or in other similar proceedings in

the future could subject ArcelorMittal to substantial

administrative penalties and/or civil damages. No assurance can

be given that the Company will not be identified as having

significant market power in any relevant markets in the future

and that it will not be subject to additional regulatory

requirements.

ArcelorMittal’s governance and compliance processes, which

include the review of internal controls over financial reporting as

well as a Code of Business Conduct and other rules and

protocols for the conduct of business, may not prevent breaches

of laws and regulations or internal policies relating to

compliance matters at ArcelorMittal or its subsidiaries, as well as

to instances of non-compliant behavior by its employees,

contractors or other agents. This risk is also present at

ArcelorMittal’s joint ventures and associates where ArcelorMittal

has a non-controlling stake and does not control governance

practices or accounting and reporting procedures.

Unfavorable outcomes in current and potential future litigation

and investigations relating to anti-trust and compliance matters

could reduce ArcelorMittal’s liquidity and negatively affect its

profitability, cash flows, results of operations and financial

condition, as well as harm its reputation.

ArcelorMittal is currently and in the future may be subject

to legal proceedings or product liability claims, the

resolution of which could negatively affect the Company’s

profitability and cash flows in a particular period.

ArcelorMittal’s profitability or cash flows in a particular period

could be affected by adverse rulings in current and future legal

proceedings against the Company. See note 9.3 to

ArcelorMittal’s consolidated financial statements.

In addition, ArcelorMittal sells products to major manufacturers

engaged in manufacturing and selling a wide range of end

products, including products used in certain safety-critical

applications, such as, for example, pipes used in gas or oil

pipelines and in automotive applications. ArcelorMittal also from

time to time offers advice to these manufacturers. There could

Management report

be significant consequential damages resulting from the use of

or defects in such products. While ArcelorMittal has a limited

amount of product liability insurance coverage, a major claim for

damages related to ArcelorMittal products sold and, as the case

may be, advice given in connection with such products, could

leave ArcelorMittal uninsured against a portion or the entirety of

such an award and materially harm its financial condition and

future operating results.

Changes to global data privacy laws and cross-border

personal data transfer requirements could adversely affect

ArcelorMittal's business and operations.

ArcelorMittal's business depends on the transfer of data

between its affiliated entities, to and from its business partners,

and with third-party service providers, which may be subject to

global data privacy laws and cross-border transfer restrictions.

While ArcelorMittal takes steps to comply with these legal

requirements, the volatility and changes to the applicability of

those laws, as well as evolving standards and judicial and

regulatory interpretations of such laws may impact

ArcelorMittal’s ability to effectively transfer data across borders

in support of its business operations that may lead to possible

administrative, civil, or criminal liability, as well as reputational

harm to the Company and its employees. ArcelorMittal has

taken actions necessary to comply with the European Union’s

GDPR, which became enforceable in May 2018. The GDPR

creates a range of compliance obligations for subject companies

and increases financial penalties for non-compliance. Other

countries in which ArcelorMittal operates or has a presence

such as Brazil, India and South Africa have or are in the process

of adopting similar legislation for the protection of personal

information. Ensuring compliance will require investments to

improve business processes, IT solutions and security solutions.

The costs of compliance with GDPR and similar legislation for

the protection of personal data and the potential for fines and

penalties in the event of a breach of these laws may have an

adverse effect on ArcelorMittal's business and operations.

U.S. investors may have difficulty enforcing civil liabilities

against ArcelorMittal and its directors and senior

management.

ArcelorMittal is incorporated under the laws of the Grand Duchy

of Luxembourg with its principal executive offices and corporate

headquarters in Luxembourg. The majority of ArcelorMittal’s

directors and senior management are residents of jurisdictions

outside of the United States. The majority of ArcelorMittal’s

assets and the assets of these persons are located outside the

United States. As a result, U.S. investors may find it difficult to

effect service of process within the United States upon

ArcelorMittal or these persons or to enforce outside the United

States judgments obtained against ArcelorMittal or these

persons in U.S. courts, including actions predicated upon the

civil liability provisions of the U.S. federal securities laws.

Likewise, it may also be difficult for an investor to enforce in

U.S. courts judgments obtained against ArcelorMittal or these

persons in courts in jurisdictions outside the United States,

including actions predicated upon the civil liability provisions of

the U.S. federal securities laws. It may also be difficult for a U.S.

investor to bring an original action in a Luxembourg court

predicated upon the civil liability provisions of the U.S. federal

securities laws against ArcelorMittal’s directors and senior

management and non-U.S. experts named in this annual report.

Business overview

Business strategy

ArcelorMittal’s success is built on its core values of

sustainability, quality and leadership and the entrepreneurial

boldness that has empowered its emergence as the first truly

global steel and mining company. Acknowledging that a

combination of structural issues and macroeconomic conditions

will continue to challenge returns in its sector, the Company has

adapted its footprint to the new demand realities, intensified its

efforts to control costs and repositioned its operations to

outperform its competitors. The Company is also developing

and implementing a plan to decarbonize its steel and mining

assets and achieve carbon neutrality by 2050.

Against this backdrop, ArcelorMittal's strategy is to leverage four

distinctive attributes that will enable it to capture leading

positions in the most attractive areas of the steel industry value

chain, from mining at one end to distribution and first-stage

processing at the other:

•Global scale and scope

•Unmatched technical capabilities

•Diverse portfolio of steel and related businesses,

particularly mining

•Financial capability.

Three themes

Steel. ArcelorMittal looks to expand its leadership role in

attractive markets and segments by leveraging the Company’s

technical capabilities and its global scale and scope. These are

critical differentiators for sophisticated customers that value the

distinctive technical and service capabilities the Company offers.

Such customers are typically found in the automotive, energy,

infrastructure and a number of smaller markets where

ArcelorMittal is a market leader. In addition, the Company is

present in, and will further develop, attractive steel businesses

that benefit from favorable market structures or geographies. In

developing attractive steel businesses, ArcelorMittal’s goal is to

be the supplier of choice by anticipating customers’

Management report

requirements and exceeding their expectations. It will invest to

develop and grow these businesses and enhance its ability to

serve its customers. Given the volatile nature of the industry,

that investment will be highly disciplined, balancing financial and

sustaining considerations with targeted strategic opportunities.

Commodity steel markets will inevitably remain an important

part of ArcelorMittal’s steel portfolio. Here, a lean cost structure

should limit the downside in weak markets while allowing the

Company to capture the upside in strong markets. Finally,

ArcelorMittal is developing a strategic response to the

challenges and opportunities posed by decarbonization, which

will fundamentally change the market structure of the steel

industry.

Mining. ArcelorMittal is working to continue to create value from

its world-class mining business. Mining forms part of the steel

value chain but typically enjoys a number of structural

advantages, such as a steeper cost curve. The Company's

strategy is to create value from its most significant assets,

through selective expansion/de-bottlenecking, by controlling

cost and capital expenditure, and by supplying products that are

highly valued by steel producers. ArcelorMittal's financial

capability allowed it to continue to invest in key mining assets (in

particular AMMC as well as ArcelorMittal Liberia), while the

diversity of its steel and mining portfolio facilitates the ability of

the mining business to optimize the value of its products in the

steelmaking process. The Company's mining business aspires

to be the supplier of choice for a balanced mix of both internal

and external customers, while at the same time providing a

natural hedge against market volatility for its steel operations.

All operations. ArcelorMittal strives to achieve best-in-class

competitiveness. Operational excellence, including health and

safety, the number one priority, is at the core of the Company's

strategy in both steel and mining. The Company steadily

optimizes its asset base to ensure it is achieving high operating

rates at its best assets. Its technical capabilities and the

diversity of its portfolio of businesses underpin a strong

commitment to institutional learning and continuous

improvement through measures such as benchmarking and

best-practice sharing. Innovation in products and processes also

plays an important role while supporting overall

competitiveness. In addition, pursuant to the Company's July

2021 announcement to target a reduction in carbon emissions

intensity by 2030 of 25% globally (both scope 1 and 2), the

Group is progressing on various pathways to reduce carbon

emissions across its asset base.

Five key strategic enablers

Critical to implementing this strategy are five key enablers:

A clear license to operate. Many of ArcelorMittal's businesses

are located in regions that are in the early stages of economic

development. Practically all are resource-intensive. The

Company recognizes that it has an obligation to act responsibly

towards all stakeholders. ArcelorMittal's commitment to

sustainability is outlined below. See "Business overview—

Sustainable development". Sustainability is a core value that

underlies ArcelorMittal's efforts to be both the world’s safest

steel and mining company and a responsible environmental

steward.

A strong balance sheet. The Company has made good

progress in recent years in strengthening its balance sheet. The

progress achieved to date means that the Company is now in a

position to have more balance and flexibility in its capital

allocation and the Company can, on a selective basis, pursue

organic or acquisitive growth opportunities.

A decentralized organizational structure. ArcelorMittal's scale

and scope are defining characteristics that give it a competitive

advantage. They also introduce complexity and the risks of

inefficiency, bureaucracy and diffuse accountability. To manage

these risks, the Company favors a structure in which the

responsibility for profit and loss is focused on business units

aligned with markets.

Active portfolio management. Throughout the Company's

history, it has sought to grow and strengthen the business

through acquisitions. That remains the case. The acquisition of

existing assets and businesses is typically seen as a more

attractive growth path than greenfield investment. The Company

is, however, also willing to dispose of businesses that cannot

meet its performance standards or that have more value to

others.

The best talent. ArcelorMittal's success will depend on the

quality of its people, and its ability to engage, motivate and

reward them. As detailed below, the Company is committed to

investing in its people and ensuring a strong leadership pipeline.

See "Management and Employees—Employees—Employee

development". It will continue to improve its processes to attract,

develop and retain the best talent.

Research and development

The Company’s Global Research and Development ("R&D" or

"Global R&D") division provides the technical foundation for the

sustainability and commercial success of the Company by

stimulating innovative thinking and the continuous improvement

of products and processes.

ArcelorMittal believes it possesses leading R&D capabilities

among steel producers and is committed to maintaining and

extending this advantage by anticipating and responding to

major technological, sustainability and social trends, while also

making a significant contribution towards achieving the

Management report

Company’s 10 Sustainable Development Outcomes (see “—

Sustainable development” below).

To support this commitment, the Company operates 11 research

sites around the world, and in 2021, ArcelorMittal’s R&D

expense was $270 million (compared to $245 million and $301

million in 2020 and 2019, respectively). In addition, the

Company has capitalized $41 million research and development

expenses.

Among its R&D initiatives, ArcelorMittal has developed over 15

years of expertise in Life Cycle Assessment ("LCA"), which

analyzes the environmental impact of products during their

production, use and disposal. In 2021, the Company undertook

a total of 37 LCA studies related to steel products and the

processes used to produce them, all guided by the relevant

standards (ISO 14040-44).

The Company’s expertise in LCA is an important asset in all of

its global markets. For example, LCA is a requirement of

Environmental Product Declarations ("EPD") for construction

products in Europe and contributes to increasing the Company’s

competitiveness in the construction sector. Similarly, the current

shift to electric vehicles is transforming the sector’s contribution

to climate change, mitigating tailpipe emissions and pushing

customers to scrutinize their supply chain and the role steel

products can play in improving their LCA performance. Finally,

LCA supports the decarbonization strategy of the Company, first

by studying the potential indirect effects of technological

changes, and second by supporting transparent and robust

communication on our XCarb® offer.

ArcelorMittal is a member of the CIRAIG International Lifecycle

Chair, an international reference center for the lifecycle of

products, processes and services, and the world largest

research center on the topic. ArcelorMittal is also a member of

the Product Social Impact Assessment Partnership

ArcelorMittal’s R&D strategy focuses on six main pillars:

Maintaining the competitiveness of the Company’s steel

among its unique automotive customer base.

R&D continually drives innovation that enables the Company’s

strategic focus on higher-added-value products. A key focus is

products designed to meet the complex and changing needs of

the automotive industry.

ArcelorMittal developed its S-in motion® range of solutions,

which showcased the benefits of AHSS grades and

manufacturing processes that continue to help automotive

customers meet demanding targets for fuel economy, and

thereby drive improvements in CO2 emissions.

In 2021, new S-in motion® projects have been developed to

offer innovative solutions to ArcelorMital's customers. The

Company has finalized in particular a project dedicated to B-

segment Battery Electric Vehicles (BEV), which are important in

Europe and China. This project also enabled the Company to

propose new battery pack concepts. A project was also carried

out to illustrate the potential of the latest hot rolled products for

chassis applications. In the field of products, new ultra-high

strength solutions (1500 to 1700MPa) have been industrialized;

they offer outstanding combinations of mechanical properties

that make them particularly attractive for the fast-growing battery

pack market.

Creating a robust and diverse portfolio of niche non-

automotive steel products to serve customers across

multiple sectors.

Customers in many sectors share the automotive industry’s

demand for innovative products and processes. The Company

aims to deliver similar breakthrough advances in these sectors

by creating differentiated products and unique engineering

solutions, all designed to ensure that steel is the customer's

material of choice.

ArcelorMittal is fully involved in the development of solutions

dedicated to the Global Energy Transition. The Company has

developed and patented corrosion resistant steels for use in

wind towers or solar mounting systems. Notably, Magnelis®

advanced coating combined with Hyper® high strength steels

has become a material of choice for light weight solar structures.

Additionally, the Company is also working on the development

of solutions suitable for the hydrogen economy, electricity grids,

carbon capture, storage & use and bioenergy.

Packaging is, in the Company’s view, another important

opportunity. ArcelorMittal continues to respond to the need to

meet evolving health and safety regulations, to achieve

lightweight, cost-saving design, and to develop new

functionalities. A major opportunity is also presented by the

increasing pressure to reduce packaging made of plastics, as

society becomes less and less accepting of packaging that is

not in line with sustainable development objectives. With its

ability to be recycled and to eliminate hazardous elements, steel

is well-positioned to extend its applications in packaging and

replace an increasing volume of plastic packaging.

Construction equipment, agricultural machinery, and heavy

transportation is another important segment for which a full

range of Ultra-High-Strength steels has been developed. These

Amstrong® steels allow customers to lightweight their

equipment, increase payload and reduce fuel consumption and

CO2 emissions.

First 'XCarb® recycled and renewably produced' steels have

been successfully launched. Due to their high recycled content

and green energy steel making route, these steels exhibit

strongly reduced CO2 emissions.

Management report

In construction, the innovative MegaColumn concept developed

by R&D is being used for the first time in what is expected to

become Canada’s tallest building, the One Tower. There is a

constant challenge to minimize the size of the vertical structural

elements, without compromising the economic feasibility of

projects and limiting their impact on the floor plans of tall

buildings. This technical solution brings several advantages:

•smaller footprint of the column;

•lower prices due to the simplicity of the system itself;

•safe and reliable (i.e. minimal welding is necessary on

site and, fire protection can be achieved utilizing the

surrounding concrete); and

•construction times are decreased dramatically due to

off-site fabrication and faster erection.

For railway infrastructures, a completely new range of corrosion

resistant rails, RailCor® was launched. These rails show

outstanding protection properties from severe corrosion

environments, whether they are installed inside tunnels, city

centers or coastal areas. This achievement has been made

possible after more than two years of tests on rail tracks under

the most severe conditions.

In 2021, R&D launched 24 new products and solutions to

accelerate sustainable lifestyles, while also progressing further

on 17 such product development programs.

In addition, in 2021, R&D launched 27 products and solutions to

support sustainable construction, infrastructure and energy

generation, while also progressing further on 17 such product

development programs.

Fully capitalizing on the capacity of Steligence® - a holistic

platform for environmentally-friendly, cost-effective

construction - to create higher-added-value products and

solutions for the construction market is being deployed in a

variety of markets.

Construction is one of the key sectors for ArcelorMittal. The

Company’s R&D effort is focused on providing higher-added-

value products that meet customer needs, including their

sustainable development objectives.

Steligence® highlights the innovations the Company’s steel has

to offer in the design and performance of a building, and to

support its customers in their use of its products. Steligence®

adds value through its holistic approach of helping specialists in

the architectural and engineering disciplines to meet the

increasing demand for sustainability, flexibility, creativity and

cost in high-performance building design by harnessing the

credentials of steel through its potential for recyclability and the

reduction of materials used.

A key concept within Steligence® is to make buildings easier to

assemble and dismantle. As a result, buildings become quicker

to construct, leading to significant efficiencies and cost savings

while also creating the potential for re-use. This reflects

ArcelorMittal’s wider interest in modularization and the potential

re-use of steel components - a field it is discussing with

customers and in its LCA assessments.

ArcelorMittal's INDI building in Ghent was constructed according

to ArcelorMittal's Steligence® approach. This approach makes it

possible to reconcile the competing requirements in terms of

creativity, flexibility, sustainability and financing, using

ArcelorMittal's innovative steel solutions. The entire life cycle of

the building is taken into account, from design to renovation and

demolition.

In March 2021, the first bridge in Europe combining

prefabricated composite beam – filler beam (known as VFT-

WiB®) and weathering steel was inaugurated in Poland. This

composite bridge is built with ARCOROX® weathering steel

beams, ensuring an external reinforcement for the concrete

bridge.

Due to XCarb® recycled and renewably produced steels, the

Company is able to offer steel produced with a CO2 footprint as

low as 0.33 tonne of CO2 per tonne of sections and merchant

bars and 0.37 tonne of CO2 per tonne of the EcoSheetPile™

Plus brand. With these two Environmental Product Declarations

("EPDs"), the Company is capable of supporting the

construction industry to meet tougher requirements to reduce

the embedded carbon footprint of buildings and infrastructure.

Developing breakthrough process innovations to deliver

cost reduction, sustainability benefits to meet current and

emerging environmental challenges, and new product

development.

The creation of unique processes creates value for the

Company and its stakeholders by: enhancing the performance

of operations through cost efficiency and improved product

quality; promoting process-driven product development; and

increasingly enabling environmental improvements, including

carbon reductions and improvements in air, land and water.

Process improvements contribute decisively to the future of the

Company, both helping to preserve its license to operate and

ensuring its financial sustainability through important

management gains.

By-products and circular economy. Work in this area includes

the re-use of slag as a valuable product for many applications,

which reduces waste while avoiding the ecosystem disruption

that can result from the extraction of other materials such as

natural stone or sand. For example, the Company is making

innovative re-use of slag in the following applications: ballast in

offshore wind turbine foundations to replace natural ballast; a

Management report

construction material for building protection walls to reduce

noise and dust; a fertilizer source for agriculture; and the

potential re-use of slag from furnaces in water filtration and

greenhouse gas capture. Other circular economy initiatives

include: working on the use of mining tailings as a secondary

raw material, either by finding marketable solutions or

generating valuable products to be used in-house and in

construction. Also, developing noble applications for high grade

silica tailings produced in Canada and improving the quality of

the scrap the Company uses, as well as exploring automated

sorting processes for treating scrap.

Improvement in air, land, water. Work in this area includes

research in technology for cleaning fumes from stacks, reducing

dust diffusive emissions, cleaning water discharges, and solving

water scarcity issues. In 2021, the Company made progress in

supporting slag-cement business by starting to market the

granulated blast furnace slag and developed a slag roadmap for

its operations in Kazakhstan, focusing on asphalt agglomerates,

winter abrasives and railway ballasts.

Progress against air pollution. In 2021, ArcelorMittal's Global

R&D division has continued its intensive work to identify the

sources of all kinds of dust emissions in some of its plants,

based on advanced sensors and new digital tools. In parallel, it

has continued to research technologies to control de-dusting in

yards and open areas and delivered a first version of Toolbox

solutions to the Company’s operations. ArcelorMittal has

continued with the industrialization of advanced filtration

technologies to reduce emissions at stacks.

Reduction of carbon emissions and energy use. ArcelorMittal’s

Global R&D division also continues to research processes to

support carbon neutrality (scopes 1 and 2) by 2050. In 2021, the

research roadmap was adapted to the Company’s decision for

implementing a fast track towards decarbonization (see "—

Sustainable Development—Management Theme#2: Climate

change") based on innovative DRI and melting technologies

(EAF, open slag bath furnace and submerged arc furnace),

while also continuing to pursue the Smart Carbon and Siderwin

paths. The Company also continued projects which began in

2020. With respect to the Hamburg Hydrogen project, the

operating conditions of the new hydrogen-based direct reduction

furnace were optimized to avoid the sticking and re-oxidation of

the metallic pellets produced in the furnace. The pilot for cold

electrolysis of iron, the "SIDERWIN" project, was commissioned

at the end of 2021. A bio-char test using VeLoSint (very low

sintering technology) showed that it may be possible to reduce

carbon emissions by as much as 49%. The R&D Division also

supported the European plants in the reduction of their CO2

footprint. The coke consumption in the blast furnace has been

significantly reduced due to the development and

implementation of technologies enabling the injection off

massive amount of hydrogen-rich reducing gases (e.g. coke

oven gas, methane, etc.). Moreover it has been proven that the

scrap rate in the Basic Oxygen Furnace ("BOF") converter can

be further increased, thus reducing the CO2 emissions, with a

new post combustion lance which was designed internally. The

R&D division has elaborated a roadmap for developing a

proprietary full expert system (a computer system emulating the

decision making skills of human expert) to operate the future

DRI and new EAFs in a unique, highly variable and challenging

conditions (high complexity for obtaining highest quality

products with heterogenous raw materials feedstock).

In order to assist with the decarbonization of the Group,

ArcelorMittal Mining together with Global R&D are investing

significantly in the decarbonization of pellets production by

creating programs such as cold bounded products, which

means pellets, briquettes and extruded products and also the

development of new energy sources for the pelletizing process

such as hydrogen and biomass.

Mining process improvements. Global R&D has developed the

capabilities to upgrade and digitalize its systems using satellites,

drones, wireless sensors and robots to feed a geographic

information system for detailed monitoring of tailings dams, in

compliance with the Company’s tailings management standard

(See "—Sustainable Development—Managing tailings storage

facilities"). In the future, this will be extended to both plants and

wildlife, thus helping the Company respond to increasing

expectations from stakeholders looking for reassurance that

biodiversity hotspots are not negatively impacted by the

Company’s mining operations. In addition, in 2021, Global R&D

participated in the elaboration of a risk assessment for all

ArcelorMittal tailings facilities across the globe. With respect to

the expansion of the Company's mining operations in Liberia,

Global R&D has also been critical in providing modifications that

allowed higher recovery rates, reduction of tailings volume and

keeping the high-grade concentrate. At the same time, Global

R&D started developing the dry stacking tailings program for the

project, in compliance with the Company's tailings management

standard. For more information on environmental impact,

delivering energy saving programs and lowering emissions of

solids, water and gases, see “—Sustainable development—

Management Theme #2: Climate change and Management

Theme #4: Environment”.

Fully capitalizing on opportunities from the digital

economy.

ArcelorMittal envisages itself as a fully digital enterprise where

everything is connected. ArcelorMittal invested early and

significantly in automation systems, and for decades the

Company has been a pioneer in the introduction and use of

artificial neural networks. ArcelorMittal is currently fully

committed to a total digital transformation, including significant

advances in a number of fields and relies on the secure and

reliable performance of its digital technology platforms,

Management report

information technology systems, continuously updating its

security measures to avoid data breaches or data theft (see also

“Introduction—Risk factors”). The Company is focusing its

efforts on:

•Global platforms (Big Data, Industrial Internet of Things

("IIoT"), Collaborative Digital Product Development);

•Manufacturing digitalization (Production, Quality and

Maintenance); and

•Business digitalization (Procurement, Commercial,

Supply Chain, Strategy, Finance).

The Company's global standard platform for Big Data storage

and analytics (ARTHUR) and Industrial Internet of Things

(DASHIELL) avoids the use of a mosaic of technologies and

facilitates the global sharing and rapid implementation of

Artificial Intelligence ("AI") models with proven results among all

units. This approach makes the Company’s size a key

advantage.

In its digital strategy, the Company makes use of solutions that

are directly acquired in the market, solutions that are co-

developed with technology suppliers, and solutions that are fully

developed internally to take advantage of the rich knowledge

interfaces the Company has (process, product, AI, math

optimization). This combination leads to algorithms with

performance superiority to what is available in the market for the

Company's core business and is thoroughly benchmarked.

The main driver for digitalization at ArcelorMittal is a competitive

advantage, with new technologies and especially developing

cutting-edge AI and mathematical optimization algorithms.

In 2021, the Company has continued with significant advances

aligned with its digital plan and global strategy, where it can

highlight a few examples:

•Complete design of digital architecture and map of

R&D models as standard solution for ArcelorMittal's

new decarbonized footprint based on hydrogen DRI

and EAF units, in agreement with the Company Digital

Council.

•Increased number of decision-based tasks for

ArcelorMittal's workforce are taken by algorithms and

artificial intelligence improving results and efficiency.

For instance, production scheduling of one shift in one

of the Company's most complex mills used to take

around 3 hours for a person to achieve a technically

feasible schedule while it now takes 10 minutes to

achieve an optimal one. Additionally, the R&D cutting-

edge algorithms developed in the past for finishing

operations have been adapted and complemented with

new mathematical optimization techniques for

upstream manufacturing, presenting significant

performance improvements in productivity and

production cost.

•Global R&D has invested time and effort in mastering

new mathematical techniques combined with AI to

better deal with uncertainty management. The

Company has applied these techniques successfully

on strategic raw material inventory, reducing the need

for certain materials during the winter season and

reducing operating costs while controlling risk.

•ArcelorMittal's web sales platforms now offer additional

material available for immediate purchase and short

lead-time. This has been very well received by

customers in Europe who already interact with the new

system without any human intervention. Together with

ArcelorMittal’s commercial workforce, the R&D division

has developed additional specific algorithms and

recommendation systems that are implemented in new

IT commercial platforms adding value to ArcelorMittal's

customers, who are also increasing the digital nature of

their activities and ways of doing business.

•The best product quality, through better prediction

using advanced analytics made possible through Big

Data and distributed computing. This means production

issues can be detected before they happen, enabling

adjustments to be made to production parameters to

avoid them.

•Maximizing equipment operational time and avoiding

unplanned stoppages via predictive maintenance. The

Company is already seeing positive results in several

production units and is further deploying these

solutions across the Company.

•While the implementation of large-scale digital and

industry 4.0 projects is challenging in a company of

ArcelorMittal’s size, once implemented these projects

bring major benefits and value because of the

Company’s scale and complexity. The global standard

platforms strategy has contributed significantly to this

initiative.

ArcelorMittal’s approach is to work with a broad range of

entities, thus maximizing the knowledge transference into its

capabilities. This has led to the development of new algorithms

using Big Data technologies that can solve problems in ways

that were not possible before, mainly due to limitations in the

manipulation of large volumes of data.

Seizing the potential of additive manufacturing. ArcelorMittal

expects significant potential in additive manufacturing/3D

Management report

printing. During 2021, the Company’s operations have

progressively increased the use of 3D-printed spare parts,

specifically through the Company’s joint venture

Thesteelprinters, S.L ("Steel Printers") with Frankstahl. The

printed spare parts from Steel Printers have been used in the

production process at Company’s plants in four countries. As 3D

technology matures, it will have an increasing impact on the way

the Company and its customers do business. In 2021, the

Company announced its intention to become a key player in the

supply of steel powders and wires to the additive manufacturing

industry and large progress has been made in the ATOM project

(proof of concept project which will show the viability of

producing and selling steel powders which will be used for 3D-

printed steel parts), aiming at producing first ArcelorMittal’s steel

powders during 2023.

Sustainable development

ArcelorMittal recognizes the important contribution that its

products and processes make to Sustainable Development

(“SD”). As part of this, it aims to ensure that its steels are the

materials of choice in the transition toward a circular and low-

carbon economy. This means preparing for and responding to

the most significant long-term environmental and social trends

that are transforming the context in which the Company

operates. These include sector-focused decarbonization

ambitions aligned with the Paris Agreement, the transformation

of society toward a circular economy, and the growing demand

from customers for adherence to sustainability standards across

supply chains, from mine sites to product delivery.

Launched in 2015, ArcelorMittal’s SD framework sets out the 10

SD outcomes that it needs to achieve in order to protect and

grow long-term value for its stakeholders. These are aligned

with, and aim to contribute to, many of the United Nation’s

Sustainable Development Goals (“SDGs”). Details of the

relationship between the 10 SD outcomes and the SDGs are

included in the reporting index to the Company’s Integrated

Annual Review 2020, which is available on the corporate

website and will be updated for 2021 in the first half of 2022.

The outcomes provide the basis for engaging ArcelorMittal’s

workforce on SD issues, and support the development,

management and reporting of sustainability across its

operations. The 10 SD outcomes are:

ArcelorMittal's 10 SD Outcomes:

Safe, healthy, quality working lives for ArcelorMittal’s people

Products that accelerate more sustainable lifestyles

Products that create sustainable infrastructure

Efficient use of resources and high recycling rates

Trusted user of air, land and water

Responsible energy user that helps create a lower-carbon

future

Supply chains that ArcelorMittal’s customers trust

Active and welcomed member of the community

A pipeline of talented scientists and engineers for tomorrow

ArcelorMittal’s contribution to society measured, shared and

valued

To drive its purpose of “inventing smarter steels for a better

world”, the Company recognizes the value in creating an

integrated marketing offer that combines many aspects of its 10

SD outcomes. These include being the supplier of choice for

innovative products while maintaining steel and mine sites that

operate to standards that meet and exceed the sustainability

expectations of customers and investors. This is at the heart of

ArcelorMittal’s approach to SD. The Company listens carefully

to stakeholders, both locally and globally, and recognizes a

trend of rising expectations among them regarding community

issues and the world’s transition toward a circular economy and

the steel industry’s critical role in that.

Aware that stakeholder trust is a key value driver, ArcelorMittal

adopts a Board-led strategic approach to strengthening trust

through stakeholder engagement. As such, integrating SD into

the business is essential for the Company to achieve long-term

value for its shareholders and other stakeholders, while

maintaining a profitable market share.

Over the last five years, ArcelorMittal has been incorporating the

SD outcomes into its activities, beginning at the site level, by

raising awareness about the need to factor SD into planning and

results reporting. ArcelorMittal’s Integrated Annual Review,

published every year, is a central element in the Company’s

commitment to engage stakeholders and communicate its

financial and non-financial performance. It forms part of the

Company’s wider approach to reporting at a global and local

level, supported by reports that provide details on specific areas

of the Company’s work or are designed for the use of specific

stakeholder groups. The local sustainability reports are available

on respective country websites of the Group.

In 2018, the Company’s Board of Directors established the

Appointments, Remuneration and Corporate Governance and

Sustainability Committee, which included oversight of the

Group’s sustainable development policies, strategy and

performance centered on safety, climate change, environment,

social and customer reassurance. In 2021, the sustainable

Management report

development component of board review was provided with it its

own committee and renamed the Sustainability Committee

(“SC”), which is led by Clarissa Lins, non-executive and

independent director, who has specific professional expertise in

the area of sustainable development. The Committee oversees

the Group's sustainable development policies, strategy and

performance centered on safety, climate change, environment,

social and customer reassurance.

The SC reviews the Company’s progress against each of the

below five management themes on a quarterly basis ensuring

active, specific and robust governance.

Management Theme

Relevant SD Outcome

Safety

Climate change

Customer reassurance

Environment

4, 5

Social

1, 8, 9, 10

At the Executive level, a Sustainable Development Council

("SDC") also meets quarterly in between SC meetings to drive

progress and respond to feedback from the SC. The SDC is

chaired by Brad Davey, an Executive Vice President ("EVP")

and head of corporate business optimization, who is responsible

for technology, R&D, commercial coordination, capital goods,

communications, corporate responsibility and global automotive.

As SDC chair, he discusses environmental, social and

governance ("ESG") issues with the Executive Office and

recommends topics to be discussed with the SC and the Group

Management Committee.

Given the importance of climate change and decarbonization to

the business, the Company formalized the establishment of an

Executive-level Climate Change Committee ("CCC") to provide

recommendations and responses, to the Executive Office and

SC as to the level of progress needed to maintain its chosen

position as a global leader in the steel sector on climate change.

It also guides the business in understanding the risks and

opportunities across its value chain associated with the

transition to the low carbon economy and adverse physical

effects of climate change. Brad Davey is also the chair of the

CCC.

The Company is committed to transparency, as demonstrated

by the comprehensive SD disclosures made in the Integrated

Annual Review and Fact-book each year. In addition, it

published its first Climate Action Report in May 2019, a Climate

Action in Europe report in May 2020, and the second Climate

Action Report in July 2021. These serve as ArcelorMittal’s

response to the recommendations of the Task Force on Climate-

related Financial Disclosures (“TCFD”) as well as the Climate

Action 100 Net Zero benchmark. The Company is working

towards full disclosure on these.

The Company has started the TCFD climate scenario analysis

project to better understand the potential future financial impacts

on the business resulting from policy, technology, market, legal

and physical climate-related risks and opportunities. The project

is expected to be finalized in the second quarter of 2022.

The Company is committed to adopting a leadership position in

the decarbonization of the steel industry in terms of target-

setting, performance and disclosure.

The Company now sees the need to go beyond transparency

and invest in stakeholder dialogue by leading collaborative

conversations with stakeholders on climate action and multi-

stakeholder standard setting processes and certification for both

steel sites and mines (see “Management Theme #3: Customer

reassurance” below).

ArcelorMittal is a founding member, with Board seat, of the steel

industry’s first global certification standard, ResponsibleSteel™.

It aims to provide customers, investors and stakeholders with

reassurance regarding sustainability throughout the steel value

chain, as well as demonstrate the credibility and rigor of audits

of the Company's social and environmental performance at its

steel plants and mines.

ResponsibleSteel™ audits operations against the 12 ESG

principles. The Company has certified ArcelorMittal Europe –

Flat Products sites in Germany, Belgium and Luxembourg in

2021 and is planning to certify the rest of ArcelorMittal Europe –

Flat Products sites and also ArcelorMittal Europe – Long

Products and ArcelorMittal Brazil sites in 2022.

The Company has also committed to external certification by the

Initiative for Responsible Mining Assurance (“IRMA”), an

internationally recognized third-party verification and certification

standard. ArcelorMittal's mining operations in Canada, Liberia,

Brazil, Mexico and Ukraine have started the IRMA self-

assessment process and are working towards transparency by

end 2025. (see “Management Theme #3: Customer

reassurance” below).

Both schemes will provide additional reassurance regarding

ArcelorMittal’s sustainability standards and will also strengthen

its governance standards. The Company’s approach to SD

based on the five management themes is summarized in the

following pages.

Management Theme #1: Safety

For ArcelorMittal, safeguarding the lives of people is the

paramount priority, and the ultimate objective remains to reduce

the number of accidents and fatalities to zero. While the

Company is proud of the way in which its team has worked to

Management report

deal with COVID-19, it recognizes the need to improve its health

and safety record and is working tirelessly towards this.

COVID-19

While the second year of the pandemic was different to the first,

remaining vigilant is vital, as the recent new waves have shown.

In 2021, ArcelorMittal sought to build on the lessons learned

transitioning the business in the previous year. In particular, it

focused on promoting vaccines wherever possible and joined

forces with public bodies in several locations to make them

available to not only Group employees, but also local residents.

The Company continues to actively combat the impact of the

pandemic, both on the business, by monitoring all sites and

stress-testing its policies, and in regions where it operates, by

donating essential medical supplies and equipment. See also

Management Theme #5: Social below.

Increased focus on units with poorer performance

ArcelorMittal has made some progress regarding occupational

health and safety. At the same time, its overall performance has

been essentially flat for several years now, leaving considerable

room for improvement.

Analysis of the fatalities over the past four years shows that the

most common causes are moving machinery, vehicle injury and

falls from height. The Company has sought to address all of

these by introducing numerous measures. In cases involving

moving machinery, for example, it has instituted annual reviews

of its global Hazard Identification and Risk Assessment ("HIRA")

tool, sought to take into account local conditions and introduced

mandatory ‘Stop, Think and Act’ measures. Where vehicles

have been involved, ArcelorMittal has modified and updated its

Fatality Prevention Standard 006 to introduce mandatory alarms

for safety belts and parking brake and proximity detectors for

certain industrial vehicles, plus additional details about wheels

and tire maintenance. To address falls from height, the

Company has Fatality Prevention Standard 005, strengthening

requirements for roofing activities, integrating learning points

from fatalities in 2020, and adding measures regarding dock

activities that led to deaths last year.

In 2021, 29 employees lost their lives while working at the

Company’s facilities: 16 in the steel business and 13 in mining

(including the tragic loss of life of six employees following a gas

and coal outburst that occurred at the Abayskaya mine in

ArcelorMittal Temirtau, Kazakhstan in November 2021).

The LTIFR for the Company, defined as the number of injuries

per million hours worked that result in employees or contractors

taking time off work, was at 0.79 in 2021 compared with 0.61 in

2020. For comparison, ArcelorMittal recorded an LTIFR of 3.1

incidents per million hours worked in 2007, the year after the

Company's formation. The table below shows the LTIFR by

segment for the years ended December 31, 2021 and 2020:

For the year ended December 31,

Lost time injury frequency rate*

2021

2020

Mining

0.32

0.27

NAFTA

0.40

0.49

Brazil

0.22

0.28

Europe

1.19

1.07

ACIS

0.94

0.64

Total

0.79

0.61

*Data does not include the LTIFR for ArcelorMittal Italia which was acquired on

November 1, 2018 and became a public-private partnership on April 14, 2021.

The fatalities are tragic and unacceptable, and ArcelorMittal is

doing its utmost to avoid any reoccurrence. The Executive

Office, the Board and the SC review and discuss safety

performance regularly and have instigated several changes

designed to support incremental improvement in it. At the

Executive level, this includes reconfiguring the Global Health

and Safety Council ("GHSC") under the chairmanship of

Jefferson De Paula, an Executive Vice President and CEO of

ArcelorMittal South America Long. Additionally Brad Davey, EVP

and head of business optimization, has taken up additional

responsibility for corporate health and safety. The GHSC reports

to Aditya Mittal, CEO of ArcelorMittal.

One major achievement of the GHSC is the development of a

revised Group-wide safety plan. It supports the three pillars of

the Company’s long-term safety strategy: namely, fatality

prevention, risk management and safety leadership. It includes

the following new objectives: conducting analysis to identify site-

specific gaps; pairing high-performing sites with those that need

more help; preparing detailed action plans to ensure quality and

consistency when implementing ‘golden tools’; ensuring

minimum requirements for in-house safety training; and carrying

out close follow-up on leading KPIs to ensure improvement.

In addition to the GHSC meetings, additional safety meetings

are being held regularly by the chairman of the council and his

team follows up on specific identified actions. These meetings

have particularly focused on those segments with the biggest

safety challenges and the main causes of fatalities over the last

three years, which have been identified as people crushed by

moving machinery, crushed or rolled over by a vehicle, and falls

from height.

Segment COOs have also been ‘twinned’ so they can learn

directly from each other and ensure that change is led by the

Company's most senior leaders.

Management report

Communication with leadership has also strengthened. Safety

has always been a topic of the quarterly leadership

presentations, led by the Executive Chairman and CEO. Now

the chair of the safety council also provides an update on

activity during the prior quarter with a summary of main lessons

learned and actions implemented to take the entire Group to the

interdependent stage of the Bradley Curve.

Chief executives and managers have been tasked with

implementing safety culture programs for all employees and

contractors, as well as ‘golden tools’ such as in-person training,

hazard identification and risk analysis, pre-shift safety meetings

and shop floor audits. One particular focus is identifying

potential severe injuries and fatalities ("PSIFs") and unsafe

situations through analysis, action and follow-up, thereby

working to avoid them in the future. In 2021, the Company

detected and addressed 4,300 PSIFs, compared with 3,700 in

2020. PSIFs alongside deaths and LTIFR are reported monthly

to leadership as part of the governance process.

ArcelorMittal believes that the changes being implemented will

make a significant positive difference. This includes looking at

the health and safety impact of every capital expenditure

decision. The Company is evaluating and tracking this progress

regularly at the levels of the SC, Executive Office, Management

Committee and the leadership group of 300 vice presidents and

general managers, as well as with segment leadership teams.

Oversight

While the GHSC monitors progress on safety – using SWOT,

KPI, GAP and other forms of analysis to devise action plans,

monitor progress and identify next steps – the SC is responsible

for oversight on behalf of the Board. The SC meets quarterly,

and safety is at the top of every agenda. In addition, it calls ad

hoc meetings regarding safety with executives and other leaders

from across the business.

When a fatality occurs, all levels of management are informed

and a comprehensive review takes place, including reviews with

the chief executives of the site and segment involved. They are

expected to inform the Executive Office and SC about the

circumstances and proposed preventative measures, together

with broader lessons for the Group. With a view to applying this

as effectively as possible, ArcelorMittal reviews its safety tools

and standards regularly.

While the Company expects all employees to be responsible for

themselves and their colleagues, instilling a true safety culture

begins at the top. As part of this, in 2021, ArcelorMittal increased

the proportion of bonuses linked to safety-related KPIs for chief

executives and managers from 10% to 15%. This includes

PSIFs, which are considered a major indicator of safety

performance. In addition, leaders are now expected to be

directly involved in training their teams in the area, another

crucial part of bringing about cultural change.

Brazil in focus

ArcelorMittal’s operations in Brazil have had zero fatalities in

over five years and reported an LTIFR of 0.22 for 2021, the

lowest in the Group.

This achievement is largely due to a combination of constant

vigilance, mutual accountability and strong leadership. Over the

last five years, the business in Brazil has instilled a ‘culture of

care’ throughout its activities, from training to shop floor

leadership to consequence management. In doing so, it has

reached the interdependent stage of the Bradley Curve. This is

known to support the best safety results through not only strong

tools and processes but also shared responsibility and

ownership. Underpinning this is a strong belief that zero

accidents is an achievable target.

Jefferson De Paula, one of the two CEOs in Brazil, was an

obvious choice to be the first chair of the new GHSC. The

Company has long used its global presence to share knowledge

and drive progress, and the new body has taken this to the next

level in two ways. First, by being a platform for safety

coordinators to share best practice. Second, by convening the

segment chief executives quarterly to drive Group safety

performance through leadership.

Management Theme #2: Climate change

Introduction

Steel is already the circular material of choice due to its lower

carbon footprint and infinite recyclability. And it has a vital role to

play in a net-zero world. The Company believes that lower-

emissions steel has the potential to be the backbone of the

buildings, infrastructure, industry and machinery, packaging and

transport systems that will enable governments, customers, and

investors to meet their own net-zero commitments.

As a global industry leader, ArcelorMittal recognizes its

responsibility to contribute to a sustainable future for the planet

and society. As part of this, it is fully committed to the objectives

of the Paris Agreement. In September 2020, it announced a

Group-wide commitment to being net-zero by 2050. In July

2021, it published its second Climate Action Report, in which it

announced a target to reduce its carbon emissions intensity by

2030 of 25% globally (scope 1 and 2, attributable to the

Company's organizational and operational boundaries in

accordance with the GHG Protocol), while increasing its target

for Europe from 30% to 35% (Both targets cover scope 1 and 2,

for steel and mining, per tonne of crude steel).

The 2030 group carbon emissions intensity reduction target

announced this year reflects the unequal pace of change that is

Management report

the reality of the world’s decarbonization journey. In regions like

Europe, the Company can be more ambitious. In other regions,

ArcelorMittal must recognize that without sufficient incentives

and policy support, it is much harder for steel industry to

decarbonize and remain competitive. Policymaking therefore

has a catalytic role to play, and the Company will continue to

step up its advocacy for policies that support the acceleration of

this transition (See below: Key drivers to support steel industry’s

transition).

ArcelorMittal expects the pace of change to accelerate as other

parts of the world become more ambitious with their transition

plans and that optimism has given ArcelorMittal the confidence

to commit to publishing a Science Based Target within two

years.

Against this context, the Company believes it is sensible to

continue to develop two pathways that have the potential to

achieve zero carbon-emissions steel: Innovative DRI and Smart

Carbon. A third pathway, direct electrolysis of iron, also

represents considerable potential – albeit within a longer time

horizon.

All three pathways could lead to low carbon-emissions

steelmaking. However, they pose significant challenges in terms

of new technology, expanded clean energy infrastructure needs,

including infrastructure for the transport and storage of carbon

dioxide. They also lead to structurally higher costs of

steelmaking. As such, for them to become a reality, a

combination of policy and market conditions are required.

The intention is that over time low emissions technologies will

become more competitive as the carbon price increases and is

applied globally, and as the technologies become more mature

and efficient. We anticipate that this will take at least ten years.

During this transition period support will be required for

innovation because the capital expenditures will not yield an

immediate return and will limit operational competitiveness.

To achieve this reduction the Company has estimated it will

require a gross investment of approximately $10 billion of capital

expenditure. Over time, and with the deployment of appropriate

technologies, it is expected that low-carbon steel-making

technologies will become more competitive than higher-carbon

steel-making technologies. However, this is not the case today

and therefore companies will need support through well-

designed policy to help moderate the initial capital costs, which

will not yield a reasonable return in the short-to-medium term, as

well as the higher operating costs in the transition period that

could otherwise render them uncompetitive. ArcelorMittal

believes support of approximately 50% of total costs will be

needed to enable companies to remain competitive regionally

and globally through the transition period. The Company

expects to deploy approximately 35% of this approximately $10

billion investment by 2025 with the remainder in the second part

of this decade. In 2021, the Company has made meaningful

progress in its decarbonization journey and announced further

steelmaking transformation investment plans in Canada,

Belgium, France and Spain with 19.5 million tonnes anticipated

carbon emissions reductions for a total amount of $5.6 billion

out of the $10 billion investment needed for its 2030 plan;

alongside plans to create the world’s first full-scale zero carbon

emissions steel plant in Sestao, Spain, by 2025 and plans for

further steelmaking transformation in NAFTA (see below:

Technologies pathways). See “Company overview—Key

transactions and recent developments”.

These initiatives will enable ArcelorMittal to be ahead of its

sector in the net-zero transition, and supplement the

decarbonization projects it already has underway which enable

the Company to pass its carbon emission reductions onto

customers for the first time via an audited certification scheme.

The first XCarb™ certified tonnes were sold in 2020. The

amount of this product available increased to 120,000 tonnes in

2021. The Company expects a run rate of 600,000 tonnes by

the end of 2022 as it continues to drive down its emissions

following investments in new technologies (see below:

ArcelorMittal's three XCarb™ initiatives).

ArcelorMittal is committed to playing a leading role in

decarbonizing the steel industry and it actively and directly

engages with policymakers and organizations that advocate for

the policies and conditions that will enable steel to achieve its

net zero transition. This includes both the Company’s direct

advocacy activities with policymakers and its indirect influence

via stakeholder climate initiatives and also industry associations

(see below: Collaborations).

The Company’s activity and progress continues to be overseen

by a robust governance structure that includes an executive-

level Climate Change Committee and the Board Sustainable

Committee, chaired by an independent non-executive director.

Having set a 2030 Group target, ArcelorMittal will link this to

executive remuneration (see "Management and employees—

Compensation—Long-term incentive plan").

In terms of investment decision-making, each major capital

expenditure project proposal is required to demonstrate its

carbon impact to the Investment Allocation Committee ("IAC").

The IAC considers both the potential future carbon cost as well

as the capital cost of decarbonization, to maximize the

Company's chances of achieving its targets while ensuring each

project is economically justifiable and earns its cost of capital. It

is a crucial part of ArcelorMittal’s strategy to manage risk and

deliver long-term growth.

Management report

The Company's targets

ArcelorMittal is committed to reaching net-zero on a global basis

by 2050. The Company has now adopted an ambitious set of

carbon targets with which to lead the sector: by 2030, the

Company is targeting a 25% reduction in its CO2e emissions

intensity across its global steel and mining operations, with an

increased European target of 35% (up from 30%). Both targets

cover both scope 1 and 2. These targets create the milestones

the Company needs to achieve in order to meet its long-term

target of net-zero by 2050, and are set against its 2018

baseline. For the purpose of setting a Group target, the

Company has made a key set of assumptions as a base case:

• The cost of green hydrogen will become increasingly

competitive over the next decade but will still require

government support.

• Carbon capture, utilization and storage infrastructure will take

time to be built at scale. While Europe is expected to take the

lead, CCUS infrastructure has the potential to expand quickly in

the US and Canada – providing some potential upside to our

assumptions.

• Different regions of the world will continue to move at very

different paces and the level of climate ambition will differ

between jurisdictions at any given time.

• The introduction of climate-friendly policies in other regions will

be 5-10 years behind Europe.

• As it has been reported, 2060 may not be a realistic net-zero

target for developing economies, which may mean emissions do

not peak until 2030.

These assumptions form the basis of the policy-based outlook

outlined in the Company’s first Climate Action report, in which

the Company demonstrated how the speed of decarbonization

by steelmakers is linked to policy developments. ArcelorMittal’s

decarbonization strategy in each part of the world where it

operates is now based on the same assumptions. In some

countries, for example Europe and Canada, the Company sees

sufficient policy incentives to enable ArcelorMittal to ‘Accelerate’

its decarbonization plans. Where these conditions do not yet

exist, the Company will continue to make improvements to

‘Move’, but it is difficult to ‘Accelerate’ without becoming

uncompetitive in that market.

The following table provides a summary of key metrics with

2018-2020 data excluding ArcelorMittal USA and Acciaierie

d’Italia (ex ArcelorMittal Italia). The metrics for 2021 will be

published with the Integrated Annual Review in 2022.

Net zero roadmap

In July 2021, in its second Climate Action Report, ArcelorMittal

published a net-zero roadmap detailing its journey to net zero

for the first time. It is based on five initiatives that will help to

achieve carbon neutrality by 2050: transforming steelmaking,

transforming energy, increasing scrap use, sourcing clean

electricity, and offsetting residual emissions.

Management report

Transforming steelmaking: Over the coming decades, the steel

industry will undergo a transition not seen for over 100 years.

This includes switching ironmaking from blast and basic oxygen

furnaces (“BF-BOF”) to DRI and iron ore preparation from sinter

plants to pellet plants. DRI is usually coupled with the EAF

method of steelmaking. Until now, the use of DRI-EAF has been

limited except in regions where gas prices are low. However,

given the rising cost of carbon and need to decarbonize, the

potential of green hydrogen is now making this look increasingly

economically feasible.

Transforming energy: In recent years, while energy use in BF-

BOF steelmaking has become much more efficient and

continues to evolve, it remains heavily dependent on fossil fuels.

At the same time, a shift towards cleaner energy is underway.

This will involve one of three approaches, or a combination

thereof: clean electricity (which could be in the form of green

hydrogen), continued use of fossil carbon coupled with carbon

capture storage ("CCS") to ensure that no carbon is emitted,

and use of circular carbon either through natural or synthetic

carbon cycles. Natural carbon cycles include the use of

sustainable forestry and agriculture residues, to produce

bioenergy for steelmaking. Emissions from this will be captured

by the regrowth of the biomass waste used. Synthetic carbon

cycles rely on the use of waste plastics as an energy source,

transforming the carbon in waste gases through carbon capture

usage ("CCU") into equivalent new plastics and ensuring that no

emissions are generated.

Increasing scrap use: In addition to using scrap in EAF, the use

of low-quality scrap in the BF-BOF steelmaking process can be

increased in several ways. These include improving steel scrap

sorting and classification, installing scrap pre-melting technology

and adjusting the steelmaking process to accommodate

increased amount of scrap.

Sourcing clean electricity: To reduce its Scope 2 emissions,

ArcelorMittal will need to focus mainly on sourcing low-carbon

electricity. This will be an increasing challenge, as it launches

projects to transition from BF-BOF to scrap and DRI-EAF

technology, which will result in electricity becoming a greater

part of the energy mix used to make steel. As decarbonizing the

overall electricity grid is unlikely, the Company plans to do this

by purchasing renewable energy certificates and through direct

power purchase agreements with suppliers from renewables

projects.

Management report

Offsetting residual emissions: Despite the commitment to

achieving net zero from operations, residual emissions are

likely: those for which either there will be no feasible

technological solution or an approach involving excessively high

economic or social costs. ArcelorMittal currently estimates these

at less than 5% of its overall emissions. To deal with them, it

intends to buy high-quality offsets or launch projects to generate

high-quality carbon credits that would not have happened

without its intervention.

Technology pathways

The steel industry is a large carbon emitter and responsible for

7-9% of global CO2e emissions. The majority of this today is the

result of BF-BOF steel production, which mainly uses coking

coal in the blast furnace to turn iron oxide into iron which is then

cast into steel. BF-BOF steelmaking currently accounts for 1.4

billion tonnes of the 1.9 billion tonnes in annual steel production

and has an emissions intensity of an average of 2.2 tonnes of

CO2e per tonne of steel (source: WSA, 2021; IEA, 2020).

While the use of scrap will increase for the coming decades that

means achieving a zero carbon-emissions steel industry by

2050 is predominantly reliant on making net zero primary steel.

While ArcelorMittal produces lower-carbon steel via scrap and

EAF (approximately 11% of our global production is via this

route), its efforts are focussed on successfully decarbonizing

primary steel-making.

The Company is increasingly confident this is achievable and is

actively developing two technology pathways (Innovative DRI

and Smart Carbon) that have the potential to deliver zero-

carbon emissions steel.

Innovative DRI: As renewable and low-carbon electricity

becomes increasingly available, the production of affordable,

industrial-scale green hydrogen becomes a possibility and the

prospect of zero carbon emissions steel made via the green

hydrogen-DRI-EAF route becomes viable. In Europe, the

Company’s strategy is largely focused on the Innovative DRI

pathway. This reflects the commitment in Europe to prioritize the

availability of green hydrogen at competitive prices.

Smart Carbon: This involves modifying the blast furnace route to

create near-carbon zero steelmaking through the recirculation of

top gas, enrichment with hydrogen and the use of circular

carbon – in the form of sustainable biomass or carbon

containing waste streams – and CCU/CCS — all technologies

that the International Energy Agency and the UN

Intergovernmental Panel on Climate Change see as critical to

achieving net-zero by 2050. Smart Carbon also has a potential

to become carbon negative. ArcelorMittal has progressed well

on constructing several commercial-scale projects to test and

prove a range of Smart Carbon technologies.

Carbon neutrality in the Smart Carbon route can be achieved by

relying on the earth’s natural carbon cycle and using biowaste

materials, such as sustainable forestry and agriculture residues,

to produce bioenergy for steelmaking. Other biomaterials such

as waste plastics can also be used, thereby helping to reduce

the world’s plastic waste challenge. Carbon by-products from

steelmaking can further be converted back into biomaterials at

the end of the steelmaking process in a fully circular fashion.

Direct Electrolysis of Iron: This is a third potential technology

route, which is at an earlier stage of development, and so is not

expected to mature in this decade. Nonetheless, the Company

remains cautiously optimistic about this as a future route.

Supported by two net-zero pathways, innovation is escalating

across the Company’s global footprint, driving ArcelorMittal

towards its decarbonization ambitions.

Innovative DRI-EAF route

Sestao and Gijón, Spain

ArcelorMittal’s Sestao plant will become the world’s first full-

scale zero carbon-emissions steel plant. This is enabled by an

investment of €1 billion into the Company's plant in Gijón, for the

construction of a hydrogen DRI plant and a new hybrid electric

arc furnace. This investment is expected to deliver a reduction in

carbon emissions at the Sestao site of up to 50% within the next

five years. Around 1 million tonnes of DRI will be transported to

Sestao to be used as feedstock for the plant’s two EAFs. As a

result, by 2025, the Sestao plant is planned to produce 1.6

million tonnes of zero carbon-emissions steel. This will be

achieved by increasing the proportion of circular, recycled scrap

and using green hydrogen-produced DRI, powering steelmaking

assets with renewable electricity, and utilizing carbon-neutral

energy inputs, such as sustainable biomass, to replace the

remaining use of fossil fuels in the steelmaking process. The

Company has signed a Memorandum of Understanding with the

Spanish government that will underpin the €1 billion required for

the transition.

Hamburg H2 project

In Germany, ArcelorMittal already operates Europe’s only DRI-

EAF plant in Hamburg, where the switch to using hydrogen

instead of natural gas in the iron ore reduction process is being

prepared. A project is underway to test the ability of hydrogen

DRI on an industrial scale, as well as testing carbon-free DRI in

the EAF steelmaking process. The objective is to reach

industrial commercial maturity of the technology by 2025, initially

producing 100,000 tonnes of DRI a year. The German Federal

Government has expressed its intention to provide €55 million of

funding support towards the plant’s construction.

Management report

Bremen and Eisenhüttenstadt

ArcelorMittal is planning to build a large-scale industrial plant for

the DRI-EAF based steelmaking at its site in Bremen, as well as

an innovative DRI pilot plant in addition to an EAF in

Eisenhüttenstadt, following the announcement of the planned

expansion of Germany’s hydrogen infrastructure and alongside

its existing H2 Hamburg project. The Bremen plant will produce

~2 million tonnes of DRI per year and supply ArcelorMittal EAFs

in Bremen and Eisenhüttenstadt. Bremen and Eisenhüttenstadt

will produce up to 3.5 million tonnes of steel by 2030, with

significantly lower CO2e emissions. Depending on the amount

of hydrogen available, CO2e savings of more than 5 million

tonnes could be possible.

The technology conversion requires investments which are

estimated to be in the range of €1-1.5 billion.

The feasibility of the project depends strongly on the

governmental support and the availability of economically viable

energy infrastructure and supply.

To support and enable the availability of hydrogen for steel

production, ArcelorMittal is participating in the establishment of

regional hydrogen networks. These include North German

hydrogen projects: the Clean Hydrogen Coastline to benefit

Bremen and the Hydrogen Cluster East Brandenburg to enable

hydrogen supply for Eisenhüttenstadt. ArcelorMittal is also

collaborating with Shell, Mitsubishi and other cross-industry

companies to form the Hamburg Green Hydrogen Hub, with the

goal of generating energy from renewable sources.

Fos-Sur-Mer and Dunkirk

ArcelorMittal will implement €1.7 billion of investments by 2030

to accelerate the decarbonization of its steelmaking sites in Fos-

sur-Mer and Dunkirk while maintaining equivalent production

capacities:

–In Fos-sur-Mer, ArcelorMittal will build an EAF. This

new unit will complement the ladle furnace announced

last March and supported by France’s recovery plan,

‘France Relance’. Together these investments will turn

Fos-sur-Mer into a reference site for the production of

low carbon, circular steel, made from recycled steel;

–In Dunkirk, ArcelorMittal will build a 2.5 million tonnes

DRI unit to transform iron ore using hydrogen instead

of coal. This DRI will be coupled with an innovative

technology electric furnace and completed by an

additional EAF. Other investments are already under

way to continue to increase the proportion of scrap

steel used.

This investment will enable a transformation of steelmaking in

France and a total reduction of approximately 40% or 7.8 million

tonnes per year in ArcelorMittal’s CO2 emissions in France by

2030 and will represent a 10% reduction in greenhouse gas

emissions from the manufacturing industry in France and put

France’s steelmaking industry on the path of the Paris

Agreement.

The new industrial facilities will be operational starting in 2027

and will gradually replace 3 out of 5 of ArcelorMittal’s blast

furnaces in France by 2030 (2 out of 3 in Dunkirk, 1 out of 2 in

Fos).

Decarbonizing the Fos-sur-Mer and Dunkirk sites will contribute

to maintaining and developing the French steelmaking industry.

It will also support the strengthening and development of local

ecosystems, generating positive and sustainable dynamics for

employment and industrial activity in France, especially in the

Dunkirk and Fos-sur-Mer areas.

This investment program will be supported by the French

Government.

ArcelorMittal is also currently studying the implementation of an

innovative solution to produce low carbon steel in Dunkirk in

partnership with Air Liquide. The project aims to combine a

Direct Reduction Plant with arc furnaces to produce 2 Mt/y hot

metal which would be a first of its kind. The project includes low

carbon hydrogen use and would lead to CO2e savings.

Commissioning is planned for 2025. This partnership between

Air Liquide and ArcelorMittal is a first step towards the creation

of an ecosystem at the forefront of low-carbon hydrogen and

CO2 capture solutions that will be a source of competitiveness

and attractiveness for various players in the Dunkirk industrial

and port basin.

Ghent, Belgium

ArcelorMittal Belgium will reduce carbon emissions by 3.9

million tonnes per year by 2030, by building a 2.5 million-tonnes

DRI plant and EAF facility at its Ghent site. This is a result of a

recent letter of intent agreed between ArcelorMittal and the

governments of Belgium and Flanders to invest €1.1 billion in

the flagship Ghent plant’s decarbonization technologies. The

DRI plant and electric furnaces will operate alongside Ghent’s

state-of-the-art blast furnace that is ready to take waste wood

and plastic as a substitute for fossil carbon. The combination of

the new DRI plant alongside a sustainable, state-of-the-art blast

furnace enables the creation of unique synergies in ArcelorMittal

Belgium’s roadmap to net zero carbon-emissions steelmaking.

The support of both the national and the Flanders governments

in this project is crucial, and welcomed, given the significant cost

associated with the transition.

Hamilton, Canada

ArcelorMittal and the Governments of Canada and Ontario

announced an investment of CAD$1.8 billion in decarbonization

technologies at ArcelorMittal Dofasco’s plant in Hamilton in the

Management report

province of Ontario. The intended investments will mean the

Hamilton plant will transition away from the blast furnace-basic

oxygen furnace steelmaking production route to the DRI–EAF

production route. This will carry a significantly lower carbon

footprint, reducing the Hamilton plant’s annual carbon emissions

by 60%, within the next seven years. The investment was

contingent on support from the governments of Canada and

Ontario. In July 2021 the Government of Canada announced it

will invest CAD$400 million in the project and in February 2022,

the Government of Ontario announced it will invest CAD$500

million in the project. This secures project funding and firms up

the investment. The project is scheduled to be completed by

2028, although the Company is looking for opportunities to

accelerate the project timelines. The new manufacturing

processes contribute to a considerable reduction of

CO2 emissions and deliver other positive environmental impacts

including the elimination of emissions and flaring from coke

making and ironmaking operations.

ArcelorMittal Canada, Contrecoeur

ArcelorMittal’s existing DRI plant in Quebec produces 1.7 million

tonnes of DRI each year. In 2021, the Company tested

hydrogen injection in its DRI facility. The test is a “proof of

principle” type aiming at building the Company’s knowledge

about this greenhouse emission abatement technique and

exploring its potential and viability beyond theoretical

calculations or process modelling. The test will start with a

limited injection of 5% within the energy mix and further phases

are planned in the future. This is mostly attractive because

renewable sources – specifically hydroelectric – provide 99% of

Quebec’s energy.

The smart carbon route

Torero

ArcelorMittal is constructing an industrial-scale demonstration

plant that converts waste wood into renewable energy through a

process called torrefaction. This source of waste wood is

considered hazardous material if burnt in an incinerator as it

emits harmful gasses. However, in a blast furnace no such

pollutants can be formed. At the Ghent plant, two reactors will

each produce 40,000 tonnes of bio-coal annually that can be

used in the blast furnace as a substitute for coal. Construction of

the €55 million project started in 2018: reactor #1 is expected to

start production in 2022 and reactor #2 in 2024.

Carbalyst

Carbalyst® is a family of technologies which allows us to use

steelmaking waste gases to produce basic chemicals such as

bioethanol, which are the key building blocks of plastics. The

Company is in the process of constructing €180 million industrial

scale Steelanol demonstration plant in Ghent and aims to start

producing Carbalyst® bio-products by the end of 2022, at a

scale of 80 million liters of bioethanol per year and is working to

develop partnerships with potential customers in the use of this

new product. The sales of bioethanol from the Company's

Carbalyst® process are forecast to translate into increased

revenues, forecast initially at €75 million per year. These could

expand as the Company develops other biochemicals and

biomaterials, including bioplastic, biofabrics and biochemicals.

IGAR (Injection of Gas Reductant in blast furnace)

IGAR is a transformative technology for the blast furnace, key to

transition to carbon neutral blast furnace technology. It

increases the re-use of off-gases in the blast furnace, reducing

the consumption of coal per tonne of steel produced and cutting

CO2e emissions by up to 20%. It will capture waste carbon

monoxide and hydrogen from steel gases and reinject into the

blast furnace as a reductant gas. Additionally, this technology

increases the concentration of hydrogen in blast furnace off-

gases, increasing the amount of carbon captured in Carbalyst

processes by increasing the production of biofuels and

biochemicals. This technology will also allow green hydrogen to

be injected directly into the blast furnace, as and when it

becomes available and commercially viable. This technology

can be further leveraged by injecting additional carbon

monoxide and hydrogen from external clean energy sources,

such as green hydrogen, further reducing coal use, CO2e

emissions and waste gases of other industries e.g. chemicals.

A pilot project in Dunkirk aims to capture CO2 off-gases at a rate

of 0.5 metric tonnes of CO2 per hour for transport and storage.

The process uses low temperature heat available across the

plant to separate CO2 from other off-gases from the blast

furnace to create a pure low-pressure CO2 gas stream suitable

for internal reuse or piping for storage. This process could

significantly lower CO2 capture costs versus alternative

technologies. Regional infrastructure would be requested for all

local industrial companies in order to optimize usage and

efficiency of the solution. Expected completion date is 2023.

This carbon capture technology has the potential to be adopted

across our blast furnace footprint but scaling will be highly

dependent on development of CO2 transport and storage

infrastructure in the regions we operate. The Company is

actively engaged in carbon transport and storage at several

locations in Europe and exploring the possibility in other regions.

Deployment of the 3D technology will be linked to the

development of CO2 pipeline infrastructure, as well as

deployment of CO2 reuse technologies in the Company's blast

furnaces.

ArcelorMittal's three XCarb™ initiatives

To meet the scale of the decarbonization challenge,

ArcelorMittal is committed to continuously innovating to drive the

Company towards its goals and help the world reach net zero

Management report

faster. As part of its journey to deliver on its 2050 net-zero

commitment it also launched its first three XCarb™ initiatives.

XCarb™ brings together all of ArcelorMittal’s reduced, low and

zero carbon-emissions products and steelmaking activities, as

well as wider initiatives and green innovation projects, into a

single effort focused on achieving demonstrable progress

towards net zero steel. The three XCarb™ branded initiatives

launched include: XCarb™ green steel certificates, XCarb™

recycled and renewably produced and the XCarb™ innovation

fund.

The Company’s progress enables it to pass its carbon emission

reductions onto customers for the first time via an audited

certification scheme. The first XCarb™ certified tonnes of

carbon emission savings were sold in 2020. The amount of this

product available increased to 120,000 tonnes in 2021. The

Company expects a run rate of 600,000 tonnes by the end of

2022 as it continues to drive down emissions following

investments in new technologies.

An independent auditor will verify the tonnes of carbon savings

achieved through the Company’s investment in decarbonization

technologies in Europe, in accordance with the GHG Protocol

Project Accounting standard. These savings can be passed on

to customers in the form of verified certificates. They can then

use those to report an equivalent reduction in their Scope 3

emissions, in accordance with the GHG Protocol Corporate

Accounting and Reporting Standard.

Similarly, ‘XCarb™ recycled and renewably produced’ is

ArcelorMittal’s product range made via the EAF route using

scrap steel, providing customers with greater options of steel

produced with an extremely low carbon footprint.

ArcelorMittal’s XCarb™ innovation fund

The ArcelorMittal’s XCarb™ innovation fund is supplementary to

the numerous technologies the Company is already developing

and deploying across its operations. The XCarb™ innovation

fund is intended to serve as a point of access to the best and

brightest ideas and is investing in companies developing

breakthrough technologies that will accelerate the steel

industry’s transition to carbon neutral steelmaking.

Heliogen – unlocking the power of sunlight to replace fossil fuels

Through XCarb™, ArcelorMittal has invested an initial $20

million in Heliogen, a renewable energy technology company.

Heliogen’s technology will harness solar energy by using a field

of mirrors which will act as a multi-acre magnifying glass to

concentrate and capture sunlight. The sunlight will then be

subsequently converted into heat (HelioHeat™), electricity

(HelioPower™) or clean fuels (HelioFuel™). All three Heliogen

products have the potential to be applicable to the steelmaking

process and support the steel industry’s transition to net zero.

Form Energy – scaling low-cost and reliable battery technology

ArcelorMittal is lead investor in Form Energy’s $200 million

Series D financing round, with a $25 million equity injection

delivered through XCarb™. Form Energy, which was founded in

2017 is working to accelerate the development of its

breakthrough low-cost energy storage technology to enable a

reliable, secure, and fully-renewable electric grid year-round. It

has recently unveiled a new iron-air battery which is: low cost

(approximately one-tenth the cost of lithium-ion battery

technology); has multi-day reliability (100-hour duration hence

overcomes the intermittent nature of renewable energy

generation); scalable; and can be sited anywhere.

Breakthrough Energy’s Catalyst program – driving adoption of

next-generation clean technologies

ArcelorMittal is an anchor partner in Breakthrough Energy’s

Catalyst program and has committed to an equity investment of

$100 million over the next five years through XCarb™. Founded

by Bill Gates, Breakthrough Energy is committed to scaling the

technologies the world needs to reach net-zero emissions by

2050. Breakthrough Energy’s efforts include investment

vehicles, philanthropic programs, policy advocacy, and other

initiatives, including Catalyst. Catalyst is a new model for how

companies, governments, and private philanthropy can finance,

produce, and ensure widespread adoption of next-generation

clean technologies. The program will initially focus on four

decarbonization technologies: direct air capture; green

hydrogen; long-duration energy storage; and sustainable

aviation fuel.

LanzaTech

ArcelorMittal expanded partnership and announced a $30

million investment in carbon recycling company, LanzaTech

through its XCarb™ innovation fund, the fourth investment the

Company has made through the fund since its launch in March

2021.

H2Pro

The Company invested $5 million in H2Pro through its XCarb™

innovation fund, bringing the fund’s total investment

commitments to $180 million since its launch in March 2021.

The investment is part of a $75 million Series B fundraise by

H2Pro, with other investors including Temasek, Horizons

Ventures, Breakthrough Energy Ventures and Yara.

H2Pro was founded in 2019 by three leading hydrogen experts

from Technion (see below) and is developing a disruptive way of

producing hydrogen from water. Similar to electrolysis, its

technology, E-TAC (Electrochemical – Thermally Activated

Chemical), uses electricity to split water into hydrogen and

Management report

oxygen. Unlike conventional electrolysis however, hydrogen and

oxygen are generated separately in different steps – an

Electrochemical step and a Thermally Activated Chemical step.

The technology was developed at Technion, Israel Institute of

Technology. E-TAC water splitting offers energy efficiency of

over 95%, significantly higher than traditional water electrolysis

technologies which typically deliver energy efficiency of around

70%. E-TAC is also expected to prove more cost effective than

traditional electrolysis, with capital expenditure costs anticipated

to be broadly halved, alongside lower operational costs. H2Pro

is targeting producing hydrogen at a cost of under US$2/kg by

2023, when its first commercial, megawatt scale project is

anticipated to move into production, and at a cost of under

US$1/kg by 2030.

Further projects under development

The Company’s 2030 target also includes projects that are

currently under discussion and development but have not yet

been announced. These include but are not limited to the

following:

Europe: further investment in DRI and EAF installations linked to

certain BF relines scheduled within the next decade; additional

smart carbon projects if and when current pilot projects prove

successful.

ROW: implementation of upstream optimization, specifically in

the CIS region; increased use of scrap and natural gas within

the current footprint; implementation of pelletizing projects which

will over time replace Group sintering processes.

ArcelorMittal is developing different solutions to reduce its GHG

emissions from its mining operations. In November 2021, it

announced a CAD$205 million investment in its flagship

Canadian mining operations with support from the Quebec

government, enabling this facility to convert its entire 10 million

tonne annual pellet production to DRI pellets by the end of 2025.

The investment, in which the Quebec government will contribute

through an electricity rebate of up to CAD$80 million, will enable

the Port Cartier plant to become one of the world’s largest

producers of DRI pellets, the raw material feedstock for

ironmaking in a DRI furnace. The project includes the

implementation of a flotation system that will enable a significant

reduction of silica in the iron ore pellets, facilitating the

production of a very high-quality pellet.

The project will also deliver a direct annual carbon reduction of

approximately 200,000 tonnes at AMMC’s Port-Cartier pellet

plant, equivalent to over 20% of the pellet plant’s total annual

carbon emissions. This reduction in carbon emissions will be

achieved through a reduction in the energy required during the

pelletizing process.

A DRI plant uses natural gas to reduce iron ore, resulting in a

significant reduction in CO2 emissions compared with coal-

based blast furnace ironmaking. In Hamburg, Germany,

ArcelorMittal is trialing replacing natural gas with hydrogen to

make DRI, with its industrial scale pilot project anticipated to be

commissioned before the end of 2025. The DRI installations the

Company has announced it is developing in Belgium, Canada

and Spain are all being constructed to be hydrogen-ready, so as

and when green hydrogen is available in sufficient quantities at

affordable prices the Company can produce DRI with near zero-

carbon emissions.

Key drivers to support steel industry's transition

ArcelorMittal believes that several key factors are critical to

driving an effective and equitable steel industry’s net-zero

transition: a technology, an energy transition plan in every

country, market demand signals, public funding support and

effective policies. Together, these will propel the industry’s

efforts to achieve individual and collective targets over the short,

medium and long term.

Technology: Progress here has been encouraging. The

Company remains confident that both of the main routes –

Innovative DRI, and Smart Carbon – offer the potential to

achieve net zero by 2050. In addition, it is developing a third

technology, Direct Electrolysis of Iron. Several low and zero

carbon-emissions steelmaking projects are in development or

planned, and the first - in Ghent - is expected to be operational

in 2022.

Demand signals: One major challenge to the transition is that

low-carbon steelmaking costs considerably more than existing

methods. As such, a demand signal for the premium offering will

be vital. In 2021, ArcelorMittal launched the first XCarb™

products. The green steel certificates and recycled and

renewably produced steel under the new brand have both been

extremely well received by customers and attracted a premium

price. This gives a real demand signal, at least in Europe, where

the first products have launched (see more below). There are

also encouraging signals from the First Movers Coalition of

companies, and the IDDI’s (Industrial Deep Decarbonization

Initiative) work to drive government pledges of green

procurement for public infrastructure projects.

Clean energy infrastructure: Access to affordable clean energy

will be critical to accelerate decarbonization of the steel industry

and policymakers can play an important role in incentivizing the

development of sufficient clean energy infrastructure and the

necessary scale up of carbon-neutral technologies. This will

require concerted cross-sector and government efforts to

develop the necessary clean energy infrastructure and to

guarantee sufficient supply of renewable energy for the

transition of heavy industry.

Management report

The clean energy infrastructure for each country and region will

vary significantly based on the availability and effectiveness of

different clean energies available, including wind, solar,

bioenergy and CCS. Working with local policymakers to unlock

the optimum clean energy infrastructure will be critical. An

example of this is the Company’s work with the Brazilian

government to ensure use of existing sustainable bioenergy in

the steel industry is recognized and supported as a clean

energy.

There were some important developments for steel industry at

26th annual Conference of the Parties ("COP26"). The steel

sector was included in the ‘Glasgow Breakthroughs’ which aim

to make clean technologies and sustainable solutions the most

affordable, accessible and attractive option in emitting sectors

globally before 2030. The Green Hydrogen Catapult set a goal

of 45 gigawatts of electrolyzers – enough to power 45 average-

sized steel mills – powered with green electricity, to be

developed with secured financing by 2026 with targeted

commissioning in 2027.

Effective policies: It is clear that a supportive policy environment

will be vital for the steel industry to make significant progress on

decarbonization. Encouragingly, some multi-stakeholder policy

positions are emerging. For now though, policies around the

world largely remain unaligned, meaning that the more

ambitious regions will decarbonize their steelmaking industries

faster (if they protect against carbon leakage).

Steel is a globally traded commodity and not all regions of the

world are moving at the same pace when it comes to the

introduction of regulation to address climate change.

Furthermore, the low margins and high capital costs associated

with the industry mean there is limited headroom to make the

investments required and remain competitive without policy

intervention.

Ensuring all market participants operate under the same

competitive rules is key in these market conditions. The greater

the level of global coordination in developing effective policies,

the better progress the Company will make towards

decarbonization.

The Company believes, however, there are many policies

developed for other industries that can be implemented for the

steel industry. One example is contracts-for-difference, which

have provided valuable policy support and customer demand

signal for the renewables industry for many years. New policies

will also need to be developed, such as a CBAM that ensures

domestic producers and imports share the same carbon cost on

the road to decarbonization.

The Company believes that policy instruments need to deliver

five market conditions to ensure that low and zero carbon-

emissions steelmaking is at least as competitive as higher

carbon-emissions steel:

1.Measures to incentivize the transition to low and zero

carbon-emissions steelmaking.

2.A fair competitive landscape that accounts for the global

nature of the steel market, ensuring domestic production,

import and exports are subject to equivalent GHG

reduction regulations.

3.Financial support to innovate and make long-term

investments and neutralize the higher operating costs of

low and zero carbon-emissions steelmaking.

4.Access to sufficient clean energies at affordable price

level.

5.Incentives to encourage the consumption of low and zero

carbon-emissions steel over higher carbon-emissions

steel.

The Company is actively engaging with governments in the

regions where it operates to share its own thinking and help to

shape policy that support acceleration of the transition,

addressing the fact that both capital expenditures and operating

expenses will be significantly higher, at least in the short to

medium term. This includes developing clean energy

infrastructure, providing access to transition finance, and

addressing carbon leakage resulting from the unequal regional

pace of change in an industry that is globally traded.

Funding support: Given the high levels of capital expenditures

and operating costs required for the transition, funding will be

needed to support the regional and global assets that are the

first movers. Progress on this front remains encouraging, with

governments on the both the national and continental levels

making considerable funds available. As discussed above,

during 2021, the Company made several announcements

regarding decarbonization projects in Spain, Belgium, France

and Canada with expected governmental support. See

“Introduction—Key transactions and events in 2021" and

"Properties and capital expenditures—Property, plant and

equipment".

Financial institutions will also play a vital role to play and the

creation of a sub-group of the Centre for Climate Aligned

Finance to look specifically at the steel sector is welcome

development. It is critical that both funding and finance is

available to companies for which the transition is costly, but

which cannot finance the transition themselves.

Management report

Collaborations

The latest climate science outlined in the Intergovernmental

Panel on Climate Change ("IPPC")’s 6th Assessment Report

indicates that urgent progress is needed. For heavy industry in

particular, where the challenges are immense, progress will be

faster if industry stakeholders collaborate. Since the publication

of its first Climate Action Report in July 2019, the Company has

worked with numerous important platforms that unite key

stakeholders to identify the main challenges and requirements

for the steel sector’s transition. These include the Energy

Transition Commission ("ETC"), World Economic Forum and the

Rocky Mountain Institute ("RMI") – all part of the Mission

Possible Partnership – as well as others involved in driving

progress, such as the International Energy Agency, the Science-

Based Targets Initiative, ResponsibleSteel and the Industry

Deep Decarbonization Initiative ("IDDI").

The Company led work with its peers across the steel sector in

the Net Zero Steel Pathway Methodology Project ("NZSPMP"),

which published its recommendations in July 2020. This work

should accelerate progress not only for the Company but also

across the entire sector, by establishing a set of principles that

ensure that the carbon emissions and targets of steel

companies and the industry are assessed in a like-for-like way.

The Company also worked with the ETC to inform their

development of two 1.5C scenarios for the steel sector. The

Tech Moratorium ("TM") scenario envisages significant carbon

reductions over the next decade, with no new blast furnaces

beyond 2030 and a steep decarbonization thereafter. The

Carbon Cost scenario illustrates a more rapid acceleration in the

presence of a global carbon price or equivalent.

The RMI’s Center for Climate Aligned Finance has reflected

both the TM scenario and many of the NZSPMP principles in a

mechanism which enables the banking sector to assess the

alignment of steel companies with the 1.5C expectations for

their sector.

The Company is now collaborating with the SBTi on a project to

define a fit-for-purpose methodology to develop additional

science-based target resources for the steel industry, which

began in November 2021. The Company has committed to

adopting a Science Based Target within two years.

On January 27, 2022, ArcelorMittal published its second Climate

Advocacy Alignment Report which maps the policy positions of

the 61 associations of which the Company is a member, against

the objectives of the Paris agreement and the five policy

priorities ArcelorMittal outlined in its second Climate Action

Report.

Management Theme #3: Customer reassurance

ArcelorMittal expects the momentum behind supply chain

accountability to continue to grow and a particular focus to be on

mined raw materials. Consumer-facing brands seek to

demonstrate responsible sourcing, and customers are uniting to

demand and validate higher standards in supply chains through

their own due diligence processes. For the Company, this is

expressed through growing demand from its customers for

assurance regarding environmental and social standards.

As such, ArcelorMittal regards supply chain certification and

assurance as a vital opportunity to forge closer links with

customers and believes that taking a leading role in multi-

stakeholder engagement is one of the most effective ways to

achieve results. It is working with steel and mining peers, and

with other stakeholders, to advance the development of new

third-party standards. To establish a global approach for the

entire ‘mine-to-metal’ steel value chain, and in response to the

strong trend of rising assurance expectations from customers,

the Company has been playing a leading role in developing and

implementing the requirements of third-party standards such as

ResponsibleSteel™, the Initiative for Responsible Mining

Assurance ("IRMA") and Mining Association of Canada’s

‘Towards Sustainable Mining’ ("TSM").

ResponsibleSteel™ is the steel industry’s only global multi-

stakeholder certification initiative. It has over 100 members and

associates, including steelmakers, mining companies, NGOs,

steel-consuming customers, financial institutions and industry

bodies. It enables steelmakers to demonstrate that their

operational processes and products meet rigorously defined

standards across a broad range of social, environmental and

ethical criteria. It also improves responsible sourcing of the raw

materials used in steelmaking and reduces supply chain risk.

In November 2019, following a robust accreditation process,

ResponsibleSteel™ launched its first site certification standard.

It is based on 12 principles underpinned by over 50 criteria and

over 200 auditable requirements that address health and safety,

human rights, local communities, biodiversity GHGs, among

other sustainability and assurance issues.

In 2020, the Company carried out readiness assessments using

the ResponsibleSteel™ standard across all its European flat

product sites, and the results were positive. In 2021, its sites in

Belgium (Geel, Genk, Ghent and Liège), Germany (Bremen and

Eisenhüttenstadt) and Luxembourg (Belval, Differdange and

Rodange) have been certified as being in compliance with it.

They were the first in the world to be independently audited and

meet the standards required.

The ResponsibleSteel™ audit enables each site to prove that its

production processes meet rigorously defined standards across

a broad range of ESG criteria, including:

Management report

a.Climate change and GHG emissions

b.Water stewardship and biodiversity

c.Human rights and labor rights

d.Community relations and business integrity

To be awarded ResponsibleSteel™ certification, each site has to

undergo a detailed third-party audit, and an independent

Certification Committee makes the final decision. ArcelorMittal

has worked with international auditor AFNOR Group and its

German subsidiary GUTcert, both specialist companies

providing certification and assessment services.

The Company is currently working on a site assessment and

verification plan and is on track to seek certification for its

ArcelorMittal – European Long Products and ArcelorMittal Brazil

sites in 2022.

The Company believes that its leading role in the development

of ResponsibleSteel™, and its commitment to achieve

certification, will enable it to improve customer relations,

increase market share among customers already seeking

certification and create demand for certified products. Assurance

needs to cover the full steel value chain, including sourcing of

primary raw materials. This is why ArcelorMittal also plays a

leading role in the wider movement towards establishing social

and environmental standards for mining that stakeholders

recognize and value.

As a member of the IRMA steering committee, the Company

participates in the multi-stakeholder expert panels shaping its

standards. The Company is also looking into implementing

IRMA across its mines to assure its customers that raw

materials have been sourced and produced responsibly. Its

mining operations in Canada, Liberia, Brazil, Mexico and

Ukraine have started the IRMA self-assessment process and

are working towards transparency by end 2025.

Another example is the Company’s commitment to the Mining

Association of Canada’s Towards Sustainable Mining initiative

("TSM") at its mines in Canada, which helps to monitor and

improve performance and assurance. AMMC has been

implementing the protocols of TSM since 2004, and the

Company's mines in Canada are all TSM-assured and 5-star

rated.

Both schemes will provide customers, investors and

stakeholders with assurance regarding sustainability throughout

the steel value chain and demonstrate the credibility and rigor

that has gone into auditing social and environmental

performance at ArcelorMittal’s steel plants and mines (see

description above and “Sustainable development governance”

below).

In Ford’s World Excellence Awards, the Company won the

Supplier Sustainability Award for its supply chain efforts and

commitment to IRMA. Ford recognizes companies that exceed

expectations and achieve the highest levels of excellence in

quality, cost, performance and delivery.

ArcelorMittal engages directly on responsible supply chain

issues with customers from the automotive, rail and other

sectors, including construction, household goods and

packaging. It is also open to involvement in initiatives used by

customers to share their processes for assessing supply chain

risk, such as Drive Sustainability, EcoVadis and the Green

Building Council.

Alongside these multi-stakeholder, customer-focused initiatives,

the Company is committed to driving standards in its own supply

chain. It has been engaging with its key raw material suppliers

and recommending that they follow one of the certification

routes. Implementing certification standards in mining is the best

way to improve responsible sourcing of the raw materials used

in steelmaking and reduce supply chain risk.

In 2020, to encourage suppliers to adopt an assurance scheme,

ArcelorMittal revised its Code for Responsible Sourcing ("Code")

to include explicit references to its commitment to

ResponsibleSteel™, IRMA and other industry initiatives. The

Code sets out the minimum standards that the Company

expects from its core suppliers, in areas such as health and

safety, human rights and ethics. The updated Code now

includes its expectations that suppliers will adopt practices in

line with the ResponsibleSteel™ standard.

Every year, the Company assesses several of its largest

suppliers against its Code based on risk priority. It asks

suppliers to complete a self-assessment questionnaire and

share supporting evidence. In 2021, 99% of ArcelorMittal’s raw

material suppliers signed the Code.

The Company may also conduct site visits. If breaches of the

Code are found, it discusses how to address them and agrees a

timeline and process. Mitigation actions can include engaging

with the supplier to encourage them to commit to certification,

sharing support and knowledge to address specific challenges,

and encouraging the supplier to join a wider initiative if the issue

is endemic in the industry.

ArcelorMittal continues to carry out additional ESG risk mapping

and analysis, as well as further phases of due diligence based

on OECD guidelines where assessments highlight areas of

social and environmental concern. In addition, it develops action

plans where needed; pays particular attention to ‘conflict

minerals’, such as tin and tungsten, which are needed in small

quantities for effective steelmaking; and engages with suppliers

regarding ESG concerns identified. The Company also

Management report

publishes a Special Disclosure Report in compliance with the

US Dodd Frank Act Section 1502 and has done work to meet

the requirements of the EU’s new conflict minerals regulation. In

addition, the Company is developing plans to ensure

compliance with the new European supply chain due diligence

laws.

Management Theme #4: Environment

Behind the sustainable development goals (“SDGs”) to which

ArcelorMittal is committed is a vision of progress that leaves no

one behind. The Company focuses on making steel in ways that

work for society while mitigating carbon footprints (as discussed

in “Management Theme #2: Climate Change“ above) and other

negative environmental impacts. It also aims to meet

stakeholder expectations regarding the use of shared resources,

particularly natural ones such as air, land and water. Operating

transparently and responsibly in these areas is essential for

retaining stakeholder trust and the Company's license to

operate relies heavily on its environmental stewardship. This

can be achieved only over the medium to long term through

dedication. As part of this, the Company is committed to making

progress globally wherever possible through ongoing investment

in environmental initiatives, governance improvements and

stakeholder engagement, among other measures.

In 2021, ArcelorMittal’s IAC has approved expected capital

expenditures totaling $565 million for 40 projects with

environmental benefits.

Some of the challenges affecting air, land and water are global

in nature, and the Company engages in multi-stakeholder

forums aimed at addressing them. Where the issues and means

of addressing them are local, the leadership teams on location

engage with stakeholders at every level, including site-by-site.

Regarding governance, ArcelorMittal now requires every major

site to have a five-year environmental improvement plan, and

CEOs report on these in their regular business area review

meetings. Site-level performance is also reviewed by the SDC

and reported regularly to the SC.

Before developing any new mine or steel plant, the Company

carries out detailed environmental impact assessments and

establishes an environmental management plan. At all

production sites, it monitors air, water, energy and residue data,

and publishes this annually in its Integrated Annual Review and

country-level sustainability reports. ArcelorMittal monitors

regulatory developments and aims to be fully compliant with all

applicable regulations (see “Business overview—Government

regulations”).

For example, the Tubarão unit in Brazil monitors impacts such

as air and noise pollution and odors, as well as those on local

traffic. Potential risks at the site include injuries, respiratory

diseases and water and soil contamination. At the Vega unit in

Brazil, impacts monitored include the quality of effluents and

waste treatment, air emissions and transportation of material.

The Company also aims to listen to concerns wherever they are

raised, and to respond appropriately, including by

acknowledging where standards have fallen short.

Addressing air quality concerns

ArcelorMittal understands that air quality is among the most

salient issues for the communities in which it operates. It is also

a continuing focus for regulators, and the Company’s goal is to

comply fully with regulatory standards. While specific sources of

pollutants, particularly in urban and industrial areas, are not

always identifiable and not easily quantifiable, ArcelorMittal aims

to listen to any concerns and respond appropriately. It also

continues to make significant environmental investments that

address air quality. These include the following:

ArcelorMittal Méditerranée, France

In Fos-sur-Mer, France, a 10-year €100 million investment

program has reduced SOx and NOx levels by 45% each and

dust emissions by 70%. Several environmental protection units

have been commissioned, including to desulphurize coke oven

gases and to remove dust at the steel plant furnace, as well as

low NOx burners in the slab furnace of the hot strip mill.

In parallel with this program, the Company has invested €150

million in fully renovating the coking plant’s 126 ovens. This has

brought crucial progress.

Between 2021 and 2023, the site will invest another €50 million

in environmental projects. The main initiative underway

concerns the sinter plant, where an innovative filter is being

installed, the coke plant and the steel shop where water

treatment plants are being commissioned. The equipment,

which involves investment of €20 million and will be

commissioned in 2022, will reduce dust emissions from the

production unit by 40%. Other projects include the construction

of a new blast furnace gas storage facility and the

commissioning of a new charger at the coking plant.

The site management regularly meets with local residents to

review environmental projects and results. In the Etang de Berre

region, ArcelorMittal is taking part in the “Réponses” initiative on

air quality in the 21 municipalities. It is led by a multi-party group

comprising the state, local authorities, associations, employees,

industrialists and a panel of citizens. The panel is regularly

invited to meetings with local residents.

ArcelorMittal Kryvyi Rih, Ukraine

In the past 15 years, ArcelorMittal Kryvyi Rih reduced its dust,

CO, SOx and NOx emissions by more than 50% and

wastewater discharge by almost 65%. This journey will continue

Management report

in the next years. ArcelorMittal Kryvyi Rih started building a new

pellet plant to replace two old sinter plants. It is also

modernizing sinter plant #2. Together, they represent 75% of the

site’s total emissions. The new pellet plant will reduce CO2

emissions by 750 thousand tonnes per annum and dust, CO,

SOx and NOx emissions by 78 thousand tonnes. Production is

expected to start in the fourth quarter of 2023. See "Properties

and capital expenditures—Capital expenditures".

Among other initiatives, the Company has started building a new

pellet plant to replace two old sinter facilities and is modernizing

a third sinter one. Together, they represent 75% of the site’s

dust emissions. The new pellet unit will reduce pollution by

78,000 tonnes a year and CO2 emissions by 750,000 metric

tonnes annually. It is expected to be operational by the fourth

quarter of 2023 (see "Properties and capital expenditures—

Capital expenditures").

ArcelorMittal Temirtau, Kazakhstan

In the next four years, ArcelorMittal is to invest more than $380

million as part of an environmental action plan to reduce

emissions and improve overall environmental performance. In

2021, it completed the installation of a new electrostatic

precipitator ("ESP") for sinter machine 5 and a new ESP for the

lime shop. In 2022, a new boiler with emissions control

equipment will be installed. Other upcoming investments include

filters for sinter machines 6 and 7, a gas cleaning plant in the

coke battery, a new coke plant and two new boilers in power

plant 1. Completion of the full plan is expected to reduce

emissions by 39%.

ArcelorMittal Asturias, Spain

Between 2017 and 2022, the Company intends to invest €210

million in environmental upgrades that are expected to reduce

the site’s diffuse emissions by 50%. Among other initiatives, it

has installed a new €12 million bag filter at sinter plant A.

Completed in 2021, it is expected to reduce particulate

emissions from the source by 75%, bringing them below 10mg/

Nm3.

In addition, ArcelorMittal has completed a project to introduce

coke oven injection in blast furnace B at the Gijón plant. This will

reduce CO2 emissions by 125,000 tonnes a year, which is

equivalent to annual emissions from 84,000 Spanish

households using natural gas-based heating systems.

Improving land use and biodiversity

ArcelorMittal aims to practice prudent land use management

and protect biodiversity in the environments where it operates,

including through partnerships with local environmental

organizations and others to improve and research local flora and

fauna. Mining is a key focus in terms of both responsible land

management and biodiversity. In 2021, the Company has

increased its efforts regarding reclamation and closure planning

of mines and issued new corporate guidance.

As well as managing its own environmental footprint,

ArcelorMittal looks for ways to help to protect local habitats. It is

particularly proud of its 20-year support for the TAMAR project in

Brazil, run by the Chico Mendes Institute for Biodiversity

Conservation. The initiative focuses on protecting local marine

habitats and species, such as endangered sea turtles, including

a colony that lives near the Company’s Tubarão site.

Also in Brazil, through the Serra Azul facility, ArcelorMittal

manages more than 1,000 hectares of the Atlantic forest, one of

the world’s most ecologically diverse regions. The area is five

times larger than that set aside for iron ore extraction. To

preserve the forest for future generations, the Company works

with the Velhas River Basin Committee and its in-house nursery,

which grows and donates seedlings from more than 60 native

species. The goal is to plant 300,000 new seedlings by 2022.

Another example is the work by ArcelorMittal Liberia ("AML"). It

has been mining iron ore in the Nimba region of northern Liberia

since 2011, although exploration and mining had taken place

intermittently there since the 1950s. Located to the east of

AML’s mining operations, the Nimba mountain range extends

from Liberia into Guinea and the Ivory Coast, and is covered in

moist evergreen, montane and secondary forests. Both it and

the Western range have global conservation value and are

home to a remarkable diversity of species and habitats, many of

which are highly threatened. They also include numerous

restricted species, several of which occur nowhere else in the

world. Forest ecosystems are under severe pressure from

extractive industries, as are the livelihoods of rural communities,

which depend on bushmeat, charcoal, firewood, medicinal

plants and subsistence agriculture.

In 2011, AML launched the Biodiversity Conservation

Programme ("BCP") to compensate for biodiversity impacts from

its mining operations that could not be avoided, minimized or

restored. Designed to achieve a net gain for biodiversity, the

BCP is multidisciplinary in its approach. It seeks to address

multiple threats to biodiversity, including underlying drivers of

livelihood insecurity and unsustainable farming practices, and is

designed to deliver numerous benefits.

The BCP is delivered at landscape scale, focusing on the

protection and management of a much larger area than that of

the direct footprint of the mining operations and associated

infrastructure. The main components include improving the

management of the East Nimba Nature Reserve and three

community forests; negotiating and managing conservation

agreements with communities to reduce illegal activity and

deforestation through an incentive-based scheme; and

promoting the uptake of sustainable agriculture to improve

Management report

production per area of land and food security. The BCP also

involves education and awareness raising, wildlife assessments

and research.

Responsible water use

Water is a vital resource for everyone, and ArcelorMittal aims to

be responsible in terms of both the amount that it consumes and

the quality of water that its sites discharge into the environment.

Its work in the area is aligned with the UN‘s SDG 6 (“Clean

water and sanitation”), with particular reference to targets 6.3

(water recycling), 6.4 (water efficiency) and 6.5 (water

management).

The Company‘s net water use in steelmaking, defined as the

difference between the water that it withdraws and discharges,

is measured, monitored and managed at each site by a

dedicated team. In general, steel plants treat and recycle the

same intake of water repeatedly, losing it only through

evaporation. Withdrawals from groundwater sources make up

less than 1% of ArcelorMittal‘s water intake.

Treatment facilities play a vital role in how the Company

manages its discharges into water and improves efficiency of

use in its operations. Unlike reducing carbon emissions, which is

a global challenge, water use is a more localized issue. Where

freshwater is scarce, or when there is a drought, ArcelorMittal

works with local municipal and water authorities to explore

alternative sources, including seawater, rainwater and

wastewater from treatment plants. When issues occur, it aims to

work swiftly and closely with local authorities.

The Company’s application of new water technologies takes into

account local conditions. In the search for alternative sources to

contribute to water security, ArcelorMittal Tubarão is

constructing an innovative and pioneering project in Brazil, and

a first in the Group: a sea water desalination plant. It mainly

aims to increase water security and ensure the stability of

operations, with an appropriate strategy for future adaptation to

climate change.

Work has started this year and is expected to be completed

within two years. The plant will produce up to 500m³/h of

industrial water for its system, providing an alternative source to

freshwater from the Santa Maria da Vitória River. Today,

freshwater represents 3.5% of the water consumed by

ArcelorMittal Tubarão (96.5% is sea water), part of which is

treated, transformed into potable water and used for human

consumption.

The process aims to mitigate environmental impacts. It consists

of collecting sea water and transforming it into industrial water

using reverse osmosis, a technology already established and

applied in many countries, including Israel, Spain, Australia,

Argentina and the US. The technology will also support the

future development of skilled labor in the country, as technicians

and engineers at the local academy can be trained in it.

The BRL50 million (approximately $13.4 million) investment will

cover all of the necessary infrastructure to collect and filter sea

water, desalinize it through reverse osmosis, and then store and

distribute the end product. The facility will be located near

ArcelorMittal Tubarão’s thermoelectric power plants and occupy

an area of around 6,000 m², making it the largest desalination

plant in Brazil. Its initial capacity will be 500 m³/hour (12,000 m³/

day) with the potential for further expansion.

The brine (liquid with a higher concentration of salts after

separation) will be returned to the sea, with no negative impact,

through the return channel used by ArcelorMittal Tubarão’s

existing cooling equipment: that is, the condensers in its

thermoelectric plants.

ArcelorMittal Tubarão will produce the energy consumed in the

desalination process, which is about 3MW, or less than 1% of its

total energy generation. The environmental licensing process for

the project has already begun at Instituto Estadual de Meio

Ambiente, and the reference terms and environmental control

plan are being prepared.

ArcelorMittal Tubarão’s project implementation studies include

leading technologies and suppliers. The research, undertaken

over two years, involved the Company’s Research and

Development Centre and experts from Brazil and Spain

(Asturias).

ArcelorMittal Tubarão is also developing other initiatives in line

with the Brazilian government’s water strategy and the state

water resources plan. These include:

•Studies with the government of Espírito Santo state,

through Cesan, to use treated sewage for industrial

purposes.

•A project to recover springs in the Santa Maria da

Vitória basin, in partnership with the Santa Maria da

Vitória Basin Committee; Capixaba Institute for

Research, Technical Assistance and Rural Extension

(Incaper); Secretariat for Environment and Water

Resources of Espírito Santo state; Public Prosecutor’s

Office of Espírito Santo state and of Santa Leopoldina

region; and the administration of Santa Leopoldina city.

As a pilot in the city of Santa Leopoldina, the initiative

aims to study the best techniques to recover and fence

55 springs in the Crubixá region.

In the Company’s mining operations, some sites recycle as

much as 98% of their water. For example, AMMC is working on

a $36 million multi-year holistic water management project that

includes installing treatment units to control surface effluents on

Management report

waste rock piles. It will eventually help to release treated water

back into the natural supply. The investment is expected to be

completed by the end of 2022.

To support broader industry efforts to reduce water

consumption, ArcelorMittal took part in two EU-funded projects:

SPOTVIEW and INSPIREWATER. Both explored new

technologies and water management practices that could help

the industry reduce consumption, energy use and waste

generation.

Managing tailings storage facilities

The Company has 26 tailings storage facilities ("TSFs"),

including conventional, paste, dry-stack and in-pit facilities, of

which 15 are active, 10 are inactive and one is closed.

ArcelorMittal has developed its tailings strategy based on the

leading industry guidelines: from the Mining Association of

Canada ("MAC"), Canadian Dam Association ("CDA") and

Global Industry Standard for Tailings Management ("GISTM").

Its evolving governance model takes into account the principles

laid out in the GISTM and aims to ensure that its TSFs are

structurally sound and safe, with all efforts directed at

minimizing risk.

To ensure the safety of all of its TSFs, the Company has a

review process that includes internal and external audit. The

internal part is conducted at the corporate level to assess

compliance with ArcelorMittal’s tailings management standard.

The external audit and review includes ‘engineer of record’

performance reviews and annual engineering inspections in

addition to an independent technical review panel evaluation by

a panel of industry specialists. These are benchmarked against

international guidelines and are considered best practice.

The Company is also seeking continuous improvement in its

tailings management program to reduce exposure to risks

associated with conventional TSFs by using best available

technologies. This includes reducing the risk of existing

conventional operations by promoting reduced moisture

disposal methodologies, such as high density thickened tailings

(paste) or filtered tailings where appropriate; and using latest

and proven new technologies such as high precision radar,

InSAR satellite monitoring and remote instrumentation to

monitor facilities globally in real time.

ArcelorMittal is assessing all its mining operations for transition

in line with these principles, and developing customized design

solutions for non-conventional tailings system management. It

has implemented tailings thickening steps in assets in Mexico,

reduced moisture disposal methodologies in Brazil and Canada,

and further studies are ongoing across the Group.

On February 8, 2019, ArcelorMittal preventively relocated

residents from the Pinheiros community (Itatiaiuçu - MG), due to

the activation of the Emergency Action Plan (PAEBM) of the

Serra Azul dam. The change in the emergency level occurred

after a more conservative methodology was applied by the

independent auditor responsible for the dam stability

declaration, following recent mining accidents in Brazil.

The Company understands how disruptive this move was for

those impacted, but reiterates that the action was carried out on

a preventive basis, that is in line with its main priority, which is to

ensure safety first. Throughout the process, the Company has

acted with total transparency and prudence, maintaining active

support to dislodged families and the community to mitigate the

impacts caused.

In June 2021, ArcelorMittal reached an agreement with the

Federal and State Public Prosecutor's Office and affected

families regarding compensation parameters for the impacts

caused by preventive evacuation. The parameters of the

collective agreement encompass (i) housing (real estate

indemnification and acquisition); (ii) economic damages (loss of

profits); and (iii) moral damages. This was the first extrajudicial

agreement with the state and federal prosecutors in the context

of reparation processes for families that were preventively

evacuated due to the activation of the dam emergency plans.

Individual negotiations with the affected families started in

October 2021 and are ongoing.

Furthermore, engineering projects are being developed for the

construction of a downstream containment structure and also for

the dam decommissioning. The construction of the check

structure is a legal requirement to start the dam

decommissioning process.

Management Theme #5: Social

ArcelorMittal wants communities to recognize it as a good

neighbor, one that actively engages with local stakeholders to

make a positive contribution by creating economic and social

value through employment, procurement, taxation, sustainable

development initiatives, strong risk management and respect for

human rights. To do this, the Company understands that it must

take a partnership approach by listening to stakeholder

concerns at the site, country and segment levels; engaging in

open conversations about challenges and concerns; and

discussing the best ways to respond. This will help to balance

the financial demands of the business with the needs of others

now and in the future.

ArcelorMittal seeks to be a proactive partner in local

socioeconomic development, one trusted to maintain an open

dialogue and find constructive solutions when challenges arise.

This approach is an essential part of its integrated approach to

managing risks and impacts, and therefore maintaining its social

Management report

license. Local operations are responsible for directly managing

community issues and monitoring local risks and opportunities,

including how they are being addressed.

The Company is committed to providing stakeholders with

assurance regarding sustainability throughout the steel value

chain and informing them about the credibility and rigor of social

and environmental performance audits at its steel plants and

mines. As part of this, it is leading the steel industry’s first global

certification standard, ResponsibleSteel™, and implementing

IRMA standards for its mining operations.

As the ResponsibleSteel™ certification is being rolled out,

ArcelorMittal sites have been preparing for the rigorous audits

against a range of ESG issues, including social ones such as

human rights, health and safety and stakeholder engagement.

The process is meticulous and has been enormously valuable,

having helped the Company to improve its social management

approach to local communities, employees and contractors

working on site. ResponsibleSteel™ involves taking a more

management systems-based approach to areas such as human

rights, diversity and labor rights. As a result, the Company’s aim

is to now manage social topics with the same systematic rigor

with which quality, environment and safety topics are handled.

The audit takes place in two stages: sites carry out a self-

assessment against the 400+ requirements, then there is an in-

person audit involving in-depth interviews and more detailed

inspections. Any non-conformities are detailed in a report, and

sites are expected to address them within a certain time frame

before the auditor can recommend certification. Some examples

of minor non-conformities identified at ArcelorMittal’s sites

include the need to be more transparent about the criteria for

selecting charities, which will be addressed by publishing more

detailed information about them and the level of support; to

ensure that local grievance mechanisms are easier to access

and allow anonymity; and to engage with communities more

regularly, especially on those issues that matter to them most.

As part of the audits to prepare for ResponsibleSteel™

accreditation, it is encouraging to see that the community

relations guidance and a toolkit for local teams developed in

2019 were used at some sites.

In 2021, the Company has issued an asset sustainability plan

for stakeholder engagement and grievance mechanism

guidelines for its mining operations, aligned with the IRMA

standard. In addition, it is in the process of reviewing and

updating its policies to ensure that they are fully aligned with the

ResponsibleSteel™ and IRMA requirements. It is also working

on developing the Social Performance Framework and guidance

manual, based on the existing Community Relations Guidance

Toolkit. This will include a Social Risk Assessment and

Management Plan, a Stakeholder Engagement Plan and

Community Grievance Mechanism, and a Community

Development Plan.

Many communities’ concerns are specific to them. For example,

issues such as lack of skills training and social development

programs are particularly important in Liberia’s emerging

economy. Since 2017, AML Vocational Training Centre has

helped young people to develop globally recognized vocational

skills. In 2021, 97 students enrolled, and the first group of 45

apprentices graduated from the three-year residential program

in May. As part of the expansion, AML has also launched a

training and development program for high potential Liberian

employees who will gain on the job experience and knowledge

in ArcelorMittal Mining operations globally. The employees will

receive advanced training in the fields of mining production and

operation optimization, plant maintenance, planning and

execution, plant electrical operation systems, and electrical

maintenance. Other training areas include plant-fitting and

heavy-duty mobile equipment maintenance, as well as mine

production and operations.

Meanwhile, the Community Development Social Fund helps to

support broader projects in areas such as agriculture and

infrastructure. In 2020, the Liberian government agreed that

20% of the fund would support those living closest to the

Company’s operations. The projects are selected by beneficiary

committees and approved by local county approval committees.

AML manages all contracts for goods and services and

distributes payments.

ArcelorMittal strives to address the issues that matter most to

the communities living near its sites. In 2021, for example, it

continued the work on human rights. The Company expects all

sites to follow its policy in this area. This includes working with

public and private security forces in ways that meet relevant

country and international standards, including the Voluntary

Principles on Security and Human Rights ("VPSHR"), which is

consistent with IRMA. When issues occur, ArcelorMittal expects

sites to address them, and this begins with education and

training. For example, in Liberia, the Company has introduced

VPSHR scenario-based workshop sessions. It trained 383

employees in 2020 and another 237 completed the instruction

by the end of 2021.

In Mexico, the ArcelorMittal ‘Women of Steel’ program received

recognition from the Mexican Center for Philanthropy

("CEMEFI") for 36 successful initiatives focusing on the

development of local communities over 11 years. It promotes

the development, integration and empowerment of communities

in the Lazaro Cardenas region and beyond. The program’s

ultimate goal is to empower communities to be agents of

change, transforming their ideas into reality using their

knowledge and skills and contributing to the formation of a more

Management report

just society. It also seeks to raise awareness of the importance

of taking part in creating a better social environment.

The program began in 2009 and has seen more than 43,000

people of all ages participate so far. It has also involved work

with several private and government institutions, which has

created momentum for development.

Working towards a just transition

Over the next two decades, the steel industry will undergo a

transformation unparalleled since the 19th century, with many

aspects of industrial activity along the value chain changing

beyond recognition. An important aspect of this will be the social

transformation that accompanies it, and the enhanced quality of

life and standard of living that this brings across the value chain.

As ArcelorMittal plans for the transition of each of its

steelmaking sites, it is working with government and unions to

optimize these impacts. In Spain, for example, where the

Company is moving from blast furnace steelmaking to the DRI-

EAF route, it anticipates a positive employment impact along the

value chain, from the construction of new assets and

decommissioning of existing ones to the development of

renewable energy infrastructure and hydrogen production and

transportation systems. In addition, the transition will contribute

to improvements in environmental impact across the value

chain.

ArcelorMittal has also developed a tool that will help it to

understand the social impact of its decarbonization strategy,

based on best-practice principles developed by the United

Nations Environment Program and the Social LCA project. The

Company will be able to use this tool alongside its

environmental impact expertise to consider the overall impact of

its transition plans, starting with a pilot at its facility in Sestao,

Spain. This will provide further data to support work with key

stakeholders, including the need for policy to support the

industrial and social transition.

Responding to COVID-19

Like many in the private sector, ArcelorMittal has been

attempting to harness skills and resources in a useful and

collaborative way to address the challenges presented by

COVID-19 and provide social and humanitarian support during

this time. It has been collaborating to address the severe lack of

required safety and medical equipment, including face masks

and ventilators. Its businesses across the world have collectively

donated to various initiatives, including financial donations to

healthcare facilities in communities where the Company

operates. Where excess capacity existed, it offered space to

medical facilities to host additional wards.

ArcelorMittal has also offered support by conducting vaccination

awareness campaigns and delivering vaccines. For example, as

part of a collaborative health strategy between the public health

administration and the Confederation of Companies of Valencia,

more than 500 workers at its facility in Sagunto, Spain, were

vaccinated against COVID-19 at the plant’s medical service,

which relieved pressure on the public hospital system. The

vaccination campaign began in early July and ended in mid-

August. To achieve the expected results, robust coordination

was needed between the internal medical services and the

public health services, in terms of accurate cross-data

utilization, timing of vial delivery and administration of vaccines

without waste.

In France, ArcelorMittal has both offered vaccines internally and

worked with local public authorities to support their campaigns

to make available not only immunization, but also antigen and

PCR tests. In addition, the Company has paid particular

attention to the wellbeing of employees during the pandemic.

This has included providing advice on physical and mental

health, updates about the situation in regions where it is present

and reminders about the importance of social distancing and

other preventative measures.

In Liberia, the Company conducted awareness campaigns on

preventing the virus, keeping safe and having vaccinations. It

also strengthened the response capacity of medical facilities in

Buchanan and Yekepa by establishing precautionary

observation centers and COVID-19 treatment units, recruiting

short-term staff and procuring various medical supplies and

equipment. In addition, it supported national and local response

efforts by pledging over $200,000 for medical supplies and

equipment, including for washing hands, checking temperatures

and covering faces, as well as strengthening its partnerships

with the Ministry of Health and the National Public Health

Institute at the national and country level. Nearly 1,700 workers

and associates of AML have been voluntarily vaccinated through

a collaborative effort with the Ministry of Health.

STEM

Alongside responding to communities’ needs and concerns,

ArcelorMittal’s community investment strategy focuses on

developing skills in STEM (science, technology, engineering and

mathematics). This reflects the important role that scientists and

engineers will play in building a sustainable future for society at

large, the steel industry and the Company. The strategy is

delivered in many ways: from providing teaching aids and

technological support, to inviting students to steel plants, and to

developing long-term partnerships with leading academic

organizations around the world. For details about human-

resource-related matters and its efforts to build the ‘workplace of

tomorrow’, which is part of Management Theme #5: Social, see

"Management and employees—Employees".

Management report

In 2021, ArcelorMittal continued to pursue numerous initiatives

aimed at promoting the STEM disciplines among young people.

In France, for example, it does this through both social networks

and a strong presence at school forums. In November, it

participated in the second Usine Extraordinaire forum, which is

fully online this year and aims to change perceptions of the

industry among young people and the general public. Other

broader initiatives include giving presentations about the

Company and industry in educational institutions, and arranging

virtual tours of facilities for engineering students, with a

particular focus on decarbonization and the environment.

In Poland, for example, ArcelorMittal also undertook numerous

activities to promote STEM. In April, it acted as a partner in a

competition organized by the European BEST Engineering

Competition. This international event, which took place in six

cities in the country and over 30 countries in Europe, aimed to

encourage engineering knowledge, creativity and innovative

thinking among students at technical universities. In September,

the Company took part in an IT career job fair for candidates

interested in programming, database management and industry

4.0. At the event, a representative gave a presentation on the

use of Python in data analysis and production models.

Meanwhile, in Krakow, the Company began a fourth scholarship

program for the most talented students at the AGH University of

Science and Technology, this time focusing on materials

science. In addition, it launched the ‘Spin the Wheel with

ArcelorMittal Poland’ project, which aims to support research

clubs at the AGH University of Science and Technology; and

acted as a partner in the ‘UP – Level Your Skills Up’ event,

which offers technical students the chance to consult with

recruitment specialists about their careers.

Sustainable development governance ("SDG")

ArcelorMittal’s commitment to integrity is enshrined in its Code

of Business Conduct and supported by a comprehensive

framework of policies in areas such as human rights, anti-

corruption and insider dealing. These reflect the principles and

concepts of the UN Global Compact, the OECD Guidelines on

Multinational Enterprises and UN SDG 16 (“Peace, justice and

strong institutions”). See also “Management and employees—

Corporate governance”.

Listening, learning, respect and transparency are key to the

integrity of the Company’s leadership and governance, which

helps to ensure that ArcelorMittal operates effectively and

ethically worldwide. The Company considers its relationships

with its various stakeholders to be vital to its success. Managed

in the right way, these relationships help ArcelorMittal to know

how best to respond to challenges, anticipate future problems

and earn trust.

In each country, ArcelorMittal’s operations are encouraged to

assess their stakeholders’ expectations and concerns, in order

to inform their approach to the 10 SD outcomes and five

management themes. Working with customers, suppliers,

unions and others can also contribute to UN SDG 17

(“Partnerships for the goals”).

Fully integrating SD into the business is essential to fulfil the

Company’s aim of achieving long-term value for its shareholders

and other stakeholders, while maintaining a profitable market

share. As discussed above, in 2015, ArcelorMittal introduced a

sustainable development framework including 10 SD outcomes.

The SC oversees the progress towards these, as well as the

overarching strategy toward SD according to the five

management themes described above. The Company’s

approach to meeting its SD targets includes:

•Key Performance Indicators the Company reports

against, overseen by the SC;

•SD-focused Business Plans. An expectation that SD

is integrated into each segment’s business plan, acting

on the relevant SD issues material to the business;

•SD-focused Corporate Initiatives. A ‘mine to metal’

chain of assurance, measured against multi-

stakeholder environmental and social standards. These

provide customers, investors and stakeholders with

assurance regarding sustainability throughout the steel

value chain and inform them about the credibility and

rigor that has gone into auditing social and

environmental performance at ArcelorMittal’s steel

plants and mines. Corporate SD initiatives for the

benefit of the Company, which include, for example,

accelerating progress toward low-carbon steelmaking

and devising innovative steel solutions for a positive

SD impact;

•SD-focused Reporting. A robust articulation of

ArcelorMittal’s approach and progress through clear

narrative and transparent reporting verified by a third

party.

In 2021, the Company also continued to deepen its

understanding of the relevant risks in its supply chain by

strengthening its supply chain risk management and audit

processes. To do this, it focused on implementing

ResponsibleSteel™ (see “Management Theme #3: Customer

reassurance” above) at the steel sites and IRMA at the mining

sites. Both standards aim to ensure that both its own sites and

its supply chain uphold international human rights and ESG

standards.

ArcelorMittal’s human rights policy draws on the UN Universal

Declaration of Human Rights, the International Bill of Human

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Rights and the core conventions of the International Labor

Organization and the UN Global Compact. It also aims to

contribute to UN SDG 8 (“Decent work and economic growth”),

including target 8.7 on modern slavery. The policy includes

commitments to workers, local communities and business

partners, and covers health and safety, labor rights and the

rights of indigenous people.

Every three years, employees in relevant functions are required

to undertake training on the policy. In 2021, 94.83% of

ArcelorMittal’s relevant workforce had completed up-to-date

human rights training, an increase from 89.5% in 2020. Where

appropriate, the Company provides face-to-face instruction. It

also conducts wider ethical and integrity training: in 2021,

91.32% of ArcelorMittal’s employees had completed up-to-date

training on the Code of Business Conduct, and 96.20% of the

relevant workforce had completed anti-corruption training.

Reporting is central to the Company's promise of openness with

stakeholders. ArcelorMittal is committed to applying best

practice standards in corporate governance in its dealings with

shareholders and other stakeholders, and with respect to

transparency, balance and quality of disclosure and reporting.

This commitment underpins Integrated Annual Reviews and the

Company's Climate Action Reports. ArcelorMittal also published

several country sustainability reports in 2021, alongside its

disclosures to the CDP on climate change and water, and a

number of investor and customer surveys. In 2021, the

Company published its Report on Payments to Governments in

respect of Extractive Activities for the year ended December 31,

2020.

Products

Information regarding segment sales by geographic area and

sales by type of products can be found in note 3 to

ArcelorMittal’s consolidated financial statements.

ArcelorMittal has a high degree of product diversification relative

to other steel companies. Its plants manufacture a broad range

of finished and semi-finished steel products with different

specifications, including many complex and highly technical and

sophisticated products that it sells to demanding customers for

use in high-end applications.

ArcelorMittal’s principal steel products include:

•semi-finished flat products such as slabs;

•finished flat products such as plates, hot- and cold-

rolled coils and sheets, hot-dipped and electro-

galvanized coils and sheets, tinplate and color coated

coils and sheets;

•semi-finished long products such as blooms and billets;

•finished long products such as bars, wire-rods,

structural sections, rails, sheet piles and wire-products;

and

•seamless and welded pipes and tubes.

ArcelorMittal’s main mining products include:

•iron ore lump, fines, concentrate, pellets and sinter

feed; and

•coking and PCI coal.

Steel-making process

Historically, primary steel producers have been divided into

“integrated” and “mini-mill” producers. Over the past few

decades, a third type of steel producer has emerged that

combines the strengths of both the integrated and the mini-mill

processes. These producers are referred to as “integrated mini-

mill producers”.

Integrated steel-making

In integrated steel production, coal is converted to coke in a

coke oven, and then combined in a blast furnace with iron ore

and fluxes to produce hot metal. This is then combined with

scrap in a converter, which is mainly a basic oxygen, to produce

raw or liquid steel. Once produced, the liquid steel is

metallurgically refined and then transported to a continuous

caster for casting into a slab, bloom or billet or cast directly as

ingots. The cast steel is then further shaped or rolled into its

final form. Various finishing or coating processes may follow this

casting and rolling. Recent modernization efforts by integrated

steel producers have focused on cutting costs through

eliminating unnecessary production steps, reducing manning

levels through automation, and decreasing waste generation.

Integrated mills are substantially dependent upon iron ore and

coking coal which, due to supply and demand imbalances,

shortening of contract durations and the linkage between

contract prices and spot prices, have been characterized by

price volatility in recent years.

Mini-mills

A mini-mill employs an electric arc furnace to directly melt scrap

and/or scrap substitutes such as direct reduced iron, thus

entirely replacing all of the steps up to and including the energy-

intensive blast furnace. A mini-mill incorporates the melt shop,

ladle metallurgical station, casting, and rolling into a unified

continuous flow. Mini-mills are generally characterized by lower

costs of production and higher productivity than integrated steel-

makers. These attributes are due in part to the lower capital

costs and lower operating costs resulting from the streamlined

melting process and the more efficient plant layouts of mini-mills

and lower manpower. The quality of steel produced by mini-mills

is primarily limited by the quality of the metallic raw materials

used in liquid steel-making, which in turn is affected by the

Management report

limited availability of high-quality scrap or virgin ore-based

metallics for use in the electric arc furnaces. Mini-mills are

substantially dependent on scrap, which has been characterized

by price volatility in recent years, and the cost of electricity.

Integrated mini-mills

Integrated mini-mills are mini-mills that produce their own

metallic raw materials consisting of high-quality scrap

substitutes, such as direct reduced iron. Unlike most mini-mills,

integrated mini-mills are able to produce steel with the quality of

an integrated producer, since scrap substitutes, such as direct

reduced iron, are derived from virgin iron ore, which has fewer

impurities. The internal production of scrap substitutes as the

primary metallic feedstock provides integrated mini-mills with a

competitive advantage over traditional scrap-based mini-mills by

insulating the integrated mini-mills from their dependence on

scrap, which continues to be subject to price volatility. The

internal production of metallic feedstock also enables integrated

mini-mills to reduce handling and transportation costs. The high

percentage use of scrap substitutes such as direct reduced iron

also allows the integrated mini-mills to take advantage of

periods of low scrap prices by procuring a wide variety of lower-

cost scrap grades, which can be blended with the higher-purity

direct reduced iron charge. Integrated mini-mills are

substantially dependent upon iron ore which, due to supply and

demand imbalances, shortening of contract durations and the

linkage between contract prices and spot prices, have been

characterized by price volatility in recent years. In addition,

because the production of direct reduced iron involves the use

of significant amounts of natural gas, integrated mini-mills are

more sensitive to the price of natural gas also than are mini-mills

using scrap.

Key steel products

Steel-makers primarily produce two types of steel products: flat

products and long products. Flat products, such as sheet or

plate, are produced from slabs. Long products, such as bars,

rods and structural shapes, are rolled from blooms and/or billets.

Flat products

Slab. A slab is a semi-finished steel product obtained by the

continuous casting of steel or rolling ingots on a rolling mill and

cutting them into various lengths. A slab has a rectangular

cross-section and is used as a starting material in the production

process of other flat products (e.g., hot-rolled sheet, plates).

Slabs are typically between 200 and 250mm thick.

Hot-rolled sheet. Hot-rolled sheet is minimally processed steel

that is used in the manufacture of various non-surface critical

applications, such as automobile suspension arms, frames,

wheels, and other unexposed parts in auto and truck bodies,

agricultural equipment, construction products, machinery,

tubing, pipe and guard rails. All flat-rolled steel sheet is initially

hot-rolled, a process that consists of passing a cast slab through

a multi-stand rolling mill to reduce its thickness to typically

between 2 and 25 millimeters, depending on the final product.

Flat-rolled steel sheet that has been wound is referred to as

“coiled”. Alternatively, hot-rolled sheet can be produced using

the thin slab casting and rolling process, where the hot-rolled

sheet thickness produced can be less than one millimeter. This

process is generally used in a flat products mini-mill, but some

integrated examples exist as well.

Cold-rolled sheet. Cold-rolled sheet is hot-rolled sheet that has

been further processed through a pickle line, which is an acid

bath that removes scaling from steel’s surface, and then

successively passed through a rolling mill without reheating until

the desired gauge, or thickness, and other physical properties

have been achieved. Cold-rolling reduces gauge and hardens

the steel and, when further processed through an annealing

furnace and a temper mill, improves uniformity, ductility and

formability. Cold-rolling can also impart various surface finishes

and textures. Cold-rolled steel is used in applications that

demand higher surface quality or finish, such as exposed

automobile and appliance panels. As a result, the prices of cold-

rolled sheet are higher than the prices of hot-rolled sheet.

Typically, cold-rolled sheet is coated or painted prior to sale to

an end-user.

Coated sheet. Coated sheet is generally cold-rolled steel that

has been coated with zinc, aluminum or a combination thereof

to render it corrosion-resistant and to improve its paintability.

Hot-dipped galvanized, electro-galvanized and aluminized

products are types of coated sheet. These are also the highest

value-added sheet products because they require the greatest

degree of processing and tend to have the strictest quality

requirements. Coated sheet is used for many applications, often

where exposed to the elements, such as automobile exteriors,

major household appliances, roofing and siding, heating and air

conditioning equipment, air ducts and switch boxes, as well as

in certain packaging applications, such as food containers.

Plates. Plates are produced by hot-rolling either reheated slabs

or ingots. The principal end uses for plates include various

structural products such as for bridge construction, storage

vessels, tanks, shipbuilding, line pipe, industrial machinery and

equipment.

Tinplate. Tinplate is a light-gauge, cold-rolled, low-carbon steel

usually coated with a micro-thin layer of tin. Tinplate is usually

between 0.14 millimeters and 0.84 millimeters thick and offers

particular advantages for packaging, such as strength,

workability, corrosion resistance, weldability and ease in

decoration. Food and general line steel containers are made

from tinplate.

Electrical steels. There are three principal types of electrical

steel: grain-oriented steels, non-grain oriented fully processed

Management report

steels and non-grain oriented semi-processed steels. Non-grain

oriented fully processed steels are iron-silicon alloys with

varying silicon contents and have similar magnetic properties in

all directions in the plane of the sheet. They are principally used

for motors, generators, alternators, ballasts, small transformers

and a variety of other electromagnetic applications. A wide

range of products, including a newly developed thin gauge

material for high frequency applications, are available. Non-

grain oriented semi-processed steels are largely non-silicon

alloys sold in the not finally annealed condition to enhance

punchability. Low power loss and good permeability properties

are developed after final annealing of the laminations.

Long products

Billets/Blooms. Billets and blooms are semi-finished steel

products. Billets generally have square cross-sections up to 180

millimeters by 180 millimeters, and blooms generally have

square or rectangular cross-sections greater than 180

millimeters by 180 millimeters. These products are either

continuously cast or rolled from ingots and are used for further

processing by rolling to produce finished products like bars, wire

rod and sections.

Bars. Bars are long steel products that are rolled from billets.

Merchant bar and reinforcing bar (rebar) are two common

categories of bars. Merchant bars include rounds, flats, angles,

squares, and channels that are used by fabricators to

manufacture a wide variety of products such as furniture, stair

railings, and farm equipment. Rebar is used to strengthen

concrete in highways, bridges and buildings.

Special bar quality (“SBQ”) steel. SBQ steel is the highest

quality steel long product and is typically used in safety-critical

applications by manufacturers of engineered products. SBQ

steel must meet specific applications’ needs for strength,

toughness, fatigue life and other engineering parameters. SBQ

steel is the only bar product that typically requires customer

qualification and is generally sold under contract to long-term

customers. End-markets are principally the automotive, heavy

truck and agricultural sectors, and products made with SBQ

steel include axles, crankshafts, transmission gears, bearings

and seamless tubes.

Wire rods. Wire rod is ring-shaped coiled steel with diameters

ranging from 5.5 to 42 millimeters. Wire rod is used in the

automotive, construction, welding and engineering sectors.

Wire products. Wire products include a broad range of products

produced by cold reducing wire rod through a series of dies to

improve surface finish, dimensional accuracy and physical

properties. Wire products are used in a variety of applications

such as fasteners, springs, concrete wire, electrical conductors

and structural cables.

Structural sections. Structural sections or shapes are the

general terms for rolled flanged shapes with at least one

dimension of their cross-section of 80 millimeters or greater.

They are produced in a rolling mill from reheated blooms or

billets. Structural sections include wide-flange beams, bearing

piles, channels, angles and tees. They are used mainly in the

construction industry and in many other structural applications.

Rails. Rails are hot-rolled from a reheated bloom. They are used

mainly for railway rails but they also have many industrial

applications, including rails for construction cranes.

Seamless tubes. Seamless tubes have outer dimensions of

approximately 25 millimeters to 508 millimeters. They are

produced by piercing solid steel cylinders in a forging operation

in which the metal is worked from both the inside and outside.

The final product is a tube with uniform properties from the

surface through the wall and from one end to the other.

Steel sheet piles. Steel sheet piles are hot rolled products used

in civil engineering for permanent and temporary retaining

structures. Main applications are the construction of quay walls,

jetties, breakwaters, locks and dams, river reinforcement and

channel embankments, as well as bridge abutments and

underpasses. Temporary structures like river cofferdams are

made with steel sheet piles. A special combination of H beams

and steel sheet piles are sometimes used for the construction of

large container terminals and similar port structures.

Welded pipes and tubes. Welded pipes and tubes are

manufactured from steel sheet that is bent into a cylinder and

welded either longitudinally or helically.

Mining products

ArcelorMittal’s principal mining products which are also raw

material input items for steel operations include iron ore and

solid fuels (coking coal and coke).

ArcelorMittal’s mining and raw materials supply strategy

consists of:

•Acquiring and expanding production of certain raw

materials, in particular iron ore, coal and manufacturing

refractory products and developing diverse third-party

customer relationships;

•Exploiting its global purchasing reach, pursuing the

lowest unit price available based on the principles of

total cost of ownership and value-in-use through

aggregated purchasing, supply chain and consumption

optimization; and

•Leveraging local and low cost advantages on a global

scale.

Management report

Faced with more volatile raw materials prices in recent years,

ArcelorMittal’s priority has been to optimize output and

production from its existing sources focused mainly on iron ore

and coking coal rather than to further expand its portfolio of

mining assets. Iron ore and coking coal are its two most

important inputs in the iron-making process.

ArcelorMittal is a party to contracts with other mining companies

that provide long-term, stable sources of raw materials. The

Company's largest iron ore supply contracts with Vale were

renewed in 2017 and a renewal process is currently ongoing.

ArcelorMittal's principal international iron ore suppliers include

Vale in Brazil, Anglo-American (Sishen in South Africa and

Minas Rio in Brazil), Metalloinvest in Russia, Luossavaara-

Kirunavaara AB in Sweden, IOC (Rio Tinto Ltd.) and Baffinland

Iron Mines Corporation ("Baffinland") in Canada. ArcelorMittal’s

principal coal suppliers include the BHP Billiton Mitsubishi

Alliance (“BMA”), Rio Tinto, Anglo Coal, Glencore in Australia,

Contura and Warrior in the United States, Teck Coal in Canada,

Vale in Mozambique and JSW in Poland.

ArcelorMittal believes that its portfolio of long-term supply

contracts can play an important role in preventing disruptions in

the production process. (see “Operating and financial review —

Economic conditions—Raw materials”).

Iron ore

ArcelorMittal sources significant portions of its iron ore needs

from its own mines in Kazakhstan, Ukraine, Bosnia, Canada,

Mexico, Liberia and Brazil. Several of ArcelorMittal’s steel plants

also have in place off-take arrangements with mineral suppliers

located near its production facilities.

For further information on Mining segment iron ore production,

see “Operating and financial review—Operating results”. For

further information on each of ArcelorMittal’s principal iron ore

mining operations including total mining production of iron ore

and coal, see “—Property, plant and equipment— Properties

and capital expenditures” and "—Property, plant and equipment

— Reserves and resources (iron ore and coal)"

Solid fuels

Coking coal

As with iron ore, ArcelorMittal sources a percentage of its coking

coal from its own coal mines in Kazakhstan. The Company’s

mines in Kazakhstan supply substantially all of its requirements

for its steelmaking operations at ArcelorMittal Temirtau.

For further information on coking coal mining production, see

"—Property, plant and equipment— Reserves and resources

(iron ore and coal)"

Coke

ArcelorMittal has its own coke-making facilities at most of its

integrated mill sites, including in Bosnia, Canada, Mexico,

Brazil, Spain, France, Germany, Belgium, Poland, Kazakhstan,

South Africa and Ukraine. While ArcelorMittal meets most of its

own coke requirements, certain of ArcelorMittal’s operating

subsidiaries buy coke from mostly domestic or regional sources

to optimize cost savings from transport efficiencies, and certain

of its subsidiaries sell, on occasion, excess coke at market

prices to third parties. The remainder of the spot purchases of

coke are made from China, the United States and Colombia.

Other raw materials and energy

Metallics (scrap)

ArcelorMittal procures the majority of its scrap requirements

locally and regionally, optimizing transport costs. Typically, scrap

purchases are made in the spot market on a monthly/weekly

basis or with short-term contracts.

Alloys

ArcelorMittal purchases its requirements of bulk and noble

alloys from a number of global, regional and local suppliers on

contracts that are linked to generally-accepted indices or

negotiated on a quarterly basis.

Base metals

The majority of the Company’s base metal needs, including

zinc, tin, aluminum and nickel are purchased under annual

volume contracts. Pricing is based on the market-accepted

indices. Material is sourced from both local and global

producers.

Electricity

ArcelorMittal generally procures its electricity through tariff-

based systems in regulated areas such as parts of the United

States and South Africa, through direct access to markets in

most of its European mills or through bilateral contracts

elsewhere. The duration of these contracts varies significantly

depending on the area and type of arrangement.

For integrated steel mills, plant off-gases from various process

steps are utilized to generate a significant portion of the plant’s

electricity requirements and lower the purchase volumes from

the grid. This is either produced by the plant itself or with a

partner in the form of a co-generation contract.

Natural gas

ArcelorMittal procures much of its natural gas requirements for

its Canadian and Mexican operations from the natural gas spot

market or through short-term contracts entered into with local

suppliers, with prices fixed either by contract or tariff-based spot

market prices. For its European and Ukrainian operations, with a

contractual mix of “all-in” bilateral supply and direct access to

the market, ArcelorMittal sources its natural gas requirements

Management report

under the prevailing mix of oil-based pricing systems and

European short term/spot-indexed supply contracts. The

remainder of ArcelorMittal’s natural gas consumption represents

approximately 20% of ArcelorMittal’s total consumption and is

generally sourced from regulated markets.

Industrial gases

Most of ArcelorMittal’s industrial gas requirements are produced

and supplied under long-term contracts with various suppliers in

different geographical regions.

Shipping

ArcelorMittal Shipping ("AM Shipping") provides ocean

transportation solutions to ArcelorMittal’s manufacturing

subsidiaries and affiliates. AM Shipping determines cost-efficient

and timely approaches for the transport of raw materials, such

as iron ore, coal, coke and scrap, and semi-finished and finished

products. AM Shipping is also responsible for providing shipping

services to the Company’s sales organizations. It provides

complete logistics solutions from plants to customer locations

using various modes of transport.

In 2021, AM Shipping arranged transportation for approximately

61.03 million tonnes of raw materials and about 8.71 million

tonnes of finished products. The key objectives of AM Shipping

are to ensure cost-effective and timely shipping services to all

units. AM Shipping acts as the coordinator for the Company's

joint venture with DryLog, a Monaco based shipping company.

Purchasing

ArcelorMittal has implemented a global procurement process for

its major procurement requirements, including raw materials,

capital expenditure items, energy and shipping. ArcelorMittal’s

centralized procurement teams also provide services such as

optimization of contracts and the supply base, logistics and

optimizing different qualities of materials suitable for different

plants and low cost sourcing.

By engaging in these processes, ArcelorMittal seeks to benefit

from economies of scale in a number of ways, including by

establishing long-term relationships with suppliers that

sometimes allow for advantageous input pricing, pooling its

knowledge of the market fundamentals and drivers for inputs

and deploying specialized technical knowledge. This enables

ArcelorMittal to achieve a balanced supply portfolio in terms of

diversification of sourcing risk in conjunction with the ability to

benefit from a number of its own raw materials sources.

ArcelorMittal has institutionalized the “total cost of ownership”

methodology as its way of conducting its procurement activities

across the Group. This methodology focuses on the total cost of

ownership for decision making, with the goal of lowering the

total cost of production through minimization of waste, improved

input material recovery rates and higher rates of recycling.

Sales and marketing

In 2021, ArcelorMittal sold 62.9 million tonnes of steel products.

Sales

The majority of steel sales from ArcelorMittal are destined for

domestic markets. For these domestic markets, sales are

usually approached as a decentralized activity that is managed

either at the business unit or at the production unit level. For

certain specific markets, such as automotive, there is a global

approach offering similar products manufactured in different

production units around the world. In instances where

production facilities are in relatively close proximity to one

another, and where the market requirements are similar, the

sales function is aggregated to serve a number of production

units. In the EU region and in South America, ArcelorMittal owns

a large number of service and distribution centers. Depending

on the level of complexity of the product, or the level of service

required by the customer, the service center operations form an

integral part of the supply chain to ArcelorMittal’s customers.

Distribution centers provide access to ArcelorMittal’s products to

smaller customers that cannot or do not want to buy directly

from the operating facility.

The Group prefers to sell exports through its international

network of sales agencies to ensure that all ArcelorMittal

products are presented to the market in a cost-efficient and

coordinated manner.

Sales are executed at the local level, but are conducted in

accordance with the Group’s sales and marketing and code of

conduct policies.

For some global industries with customers in more than one of

the geographical areas that ArcelorMittal serves, the Company

has established customized sales and service functions. This is

particularly the case for the automotive industry. Sales through

this channel are coordinated at the Group level with respect to

contract, price and payment conditions.

Marketing

Marketing follows the sales activity very closely and is by

preference executed at the local level. In practice, this leads to a

focus on regional marketing competencies, particularly where

there are similarities among regional markets in close

geographical proximity. Local marketing provides guidance to

sales on forecasting and pricing. At the global level, the

Management report

objective is to share marketing intelligence with a view towards

identifying new opportunities, either in new products or

applications, new product requirements or new geographical

demand. Where a new product application is involved, the in-

house research and development unit of ArcelorMittal is

involved in developing the appropriate products.

An important part of the marketing function at ArcelorMittal is to

develop short-range outlooks that provide future perspectives on

the state of market demand and supply. These outlooks are

shared with the sales team in the process of finalizing the sales

strategy for the immediate future and with senior management

when market conditions call for production adjustments.

Globally, sales and marketing activities are coordinated to

ensure a harmonized approach to the market. The objective is

to provide similar service experiences to all customers of

ArcelorMittal in each market.

Insurance

ArcelorMittal maintains insurance policies to cover physical loss

or damage to its property and equipment on a reinstatement

basis arising from a number of specified risks, including certain

natural disasters, such as earthquakes, floods or windstorms,

acts of terrorism and certain consequential losses, including

business interruption arising from the occurrence of an insured

event under the said policies.

ArcelorMittal also purchases worldwide third-party public and

product liability insurance coverage for all of its subsidiaries.

Various other types of insurance are also maintained, such as

comprehensive construction and contractor insurance for its

greenfield and major capital expenditures projects, directors and

officers liability, transport, and charterers’ liability, as well as

other customary policies such as car insurance, travel

assistance and medical insurance.

Each of the operating subsidiaries of ArcelorMittal maintains

various local insurance policies that are mandatory at the local

level, such as employer liability, workers compensation and auto

liability, as well as specific insurance such as public liability to

comply with local regulations.

In addition, ArcelorMittal maintains trade credit insurance on

receivables from selected customers, subject to limits that it

believes are consistent with those in the industry, in order to

protect it against the risk of non-payment due to customers’

insolvency or other causes. Not all of ArcelorMittal’s customers

are or can be insured, and even when insurance is available, it

may not fully cover the exposure.

ArcelorMittal believes that its insurance coverage is in line with

industry practice and sufficient to cover normal risks in its

operations. Notwithstanding the insurance coverage that

ArcelorMittal and its subsidiaries carry, the occurrence of an

event that causes losses in excess of limits specified under the

relevant policy, or losses arising from events not covered by

insurance policies, could materially harm ArcelorMittal’s financial

condition and future operating results.

Intellectual property

ArcelorMittal owns and maintains a patent portfolio covering

processes and steel products, including uses and applications

that it creates, develops and implements in territories throughout

the world. Such patents and inventions primarily relate to steel

solutions with new or enhanced properties, as well as new

technologies that generate greater cost-efficiencies.

ArcelorMittal also owns trademarks, both registered and

unregistered, relating to the names and logos of its companies

and the brands of its products. ArcelorMittal has policies and

systems in place to monitor and protect the confidentiality of its

know-how and proprietary information. The Company applies a

general policy for patenting selected new inventions, and its

committees organize an annual patent portfolio screening by

individuals from the Company’s R&D and business sectors in

order to optimize the global efficiency of the Company’s patent

portfolio. The Company’s patent portfolio includes more than

10,500 patents and patent applications, mostly recent and

medium-term, for more than 724 patent families, with 77

inventions newly-protected in 2021. Because of this constant

innovation, the Company does not expect the lapse of patents

that protect older technology to materially affect current

revenue.

In addition to its patent portfolio, ArcelorMittal is constantly

developing technical know-how and other unpatented

proprietary information related to design, production process,

decarbonization solutions for steel production and use of high

quality steel products, leading to development of new

applications or to improvement of steel solutions proposed to its

customers, such as the ones aiming at weight reduction for

vehicles. ArcelorMittal has also been granted licenses for

technologies developed by third parties in order to allow it to

propose comprehensive steel solutions to customers.

ArcelorMittal is not aware of any pending lawsuits alleging

infringement of others’ intellectual property rights that could

materially harm its business.

Government regulations

ArcelorMittal’s operations are subject to various regulatory

regimes in the regions in which it conducts its operations. The

following is an overview of the principal features of the

Company's regulatory regimes, as of December 31, 2021, that

affect or are likely to affect the Company's operations.

See “Risk factors” and note 9.3 to ArcelorMittal’s consolidated

financial statements.

Management report

Environmental laws and regulations

ArcelorMittal’s operations are subject to a broad range of laws,

directives and regulations relating to air emissions, surface and

groundwater protection, wastewater storage, treatment and

discharges, the use and handling of hazardous or toxic

materials, waste management, recycling, treatment and disposal

practices, the remediation of environmental contamination, the

protection of soil, biodiversity and ecosystems or rehabilitation

(including in mining).

In December 2019, the European Commission presented the

Communication on the European Green Deal, which sets out a

detailed vision to make Europe the first climate-neutral continent

by 2050, safeguard biodiversity, establish a circular economy

and eliminate pollution, while boosting the European Industry.

As these laws and regulations in the European Union stemming

from the Green Deal and other jurisdictions continue to become

more stringent, ArcelorMittal expects to expend substantial

resources including operating and capital expenditures to

achieve or maintain ongoing compliance. Further details

regarding specific environmental proceedings involving

ArcelorMittal, including provisions to cover environmental

remedial activities and liabilities, decommissioning and asset

retirement obligations are described in note 9.1 to ArcelorMittal’s

consolidated financial statements.

ArcelorMittal anticipates that its expenditures with respect to

environmental matters in the EU over the next several years will

relate primarily to installations of additional air emission controls,

to requirements imposed in the course of renewal of permits and

authorizations, including those pursuant to ongoing

implementation and upcoming revision of the IED (Directive

2010/75/EU), respecting achievement amongst others of dust,

NOx and SO2 and to address GHG issues, including the

reduction of emissions and purchase of allowances.

In relation to the joint venture Acciaierie d'Italia (formerly

ArcelorMittal Italia), certain environmental obligations

(decontamination and environmental capital expenditures) of the

previous operators regarding the Taranto plant have been

transferred to Acciaierie d'Italia, which operates the Taranto

plant as lessee and, as such, is required to implement an

environmental plan. This will require significant capital

investments by Acciaierie d'Italia. See also further information

on Acciaierie d'Italia in "Introduction—Risk factors" and

"Introduction—Key transactions and recent developments" and

"Properties and capital expenditures—Investments in joint

ventures".

As the central directive to tackle industrial pollution, the IED

represents a key pillar of the European Green Deal. Policy

options to enhance its performance may include, for example,

the improvement of the Best Available Techniques reference

documents ("BREF") elaboration process or furthering the

contribution to circular economy objectives. The adoption by the

EU Commission is planned for the beginning of 2022. A

Commission proposal for a revised IED is expected by March

2022. It will look at the sectoral scope of the legislation and at

how to make it fully consistent with climate, energy and circular

economy policies.

Policy options to with respect to the IED may include, for

example, a more central and authoritative role in industrial

decarbonization; a more ambitious approach for how the IED

promotes a transition to safer chemicals, resource efficiency and

the circular economy; expanding the focus on supporting

innovation and/or addressing issues associated with the

effectiveness of the current Directive.

Moreover, with respect to waste shipments, the European

Commission is revising the EU rules as the proposal in Europe

seeks to enforce the principle that waste can only be exported if

it is managed as sustainably as in the EU, otherwise companies

will have to stop the export. In Brazil, the government has

issued ordinance which creates the obligation to register a

Waste Transportation Manifest nationwide.

Environmental requirements impacting industrial operations are

also becoming more stringent in other jurisdictions. For

example, in Canada, the Environment and Climate Change

Canada Government Department (“ECCC”) updated the Base

Level Industrial Emission Requirements (“BLIERs”) under the

federal Air Quality Management System, thus incurring

considerable investments to comply with emission regulations.

Provincial regulations in Ontario and Quebec will also be

requiring further emissions reduction.

In Ontario at ArcelorMittal Dofasco, the SO2 BLIER requires to

install a full coke oven gas desulphurization by December 31,

2025. Currently, on a plant-wide basis, ArcelorMittal Dofasco’s

facility is meeting its BLIERs objective. Moreover, the

decarbonization project will impact ArcelorMittal Dofasco’s

overall NOx emissions.

In Quebec, pursuant to Quebec 2011 Clean Air Regulation Act

regulating particulate matter (“PM”), a combustion chamber and

canopy hood volume increase at its Contrecoeur East facility is

in progress with the expected completion date beginning of

2022.

In Kazakhstan, beginning in 2025, complex ecological permits

for emissions into the environment will impose more stringent

emissions standards and also outline measures for reducing

emissions (production improvements). Moreover, in July 2021,

the new Environmental Code of the Republic of Kazakhstan

came into force, which introduces the “polluters pays” principle –

therefore increasing liability risks.

Management report

In Ukraine, over the period of 2020-2021, a range of draft laws

aimed at the environment protection have been submitted to the

Ukrainian Parliament. The documents are to improve the

policies and provide variety of instruments to regulate GHG and

industrial emissions, waste management sector and strengthen

the state environmental inspection. These draft laws will convey

a substantial change into the environmental regulation within the

next two years. In October 2021, the Ukrainian Government

approved the Environmental Security and Climate Adaptation

Strategy until 2030. Though this Strategy primarily deals with

climate change mitigation measures, it also focuses on the

industrial pollution reduction, the effective chemical safety

system establishment, the rational use of natural resources,

among others. The Strategy will be implemented in accordance

with the approved action plan, setting out the list of measures

for the consecutive three years. Ukraine is implementing EU

directives on industrial emissions and waste. As a part of the

IED implementation in Ukraine, the industrial emissions law will

introduce a concept of BATs, which will be required for

implementation by the largest facilities. Most of the large

industrial companies, while planning modernization or new

construction projects, have been already building their

investment strategies upon BATs. The industrial emissions law

and subsequent secondary legislation are expected to be

adopted as early as 2022 and beyond, but the impact of this

legislation is already currently visible. Also, in October 2021, the

national Pollutant Release and Transfer Register (“PRTR”) was

launched in Ukraine. The PRTR contains data on emissions of

polluting substances released into the air and water, the

volumes of waste generation as well as information on the

environmental inspections carried out. The Ministry of

Environmental Protection and Natural Resources of Ukraine has

pledged to extend the scope of information and regularly update

the register.

In Mexico, new waste legislation is under discussion. Pursuant

to the last version of the proposal, dated September 2021, the

standard on maximum permissible limits of wastewater

discharges is currently under review in order to reduce

maximum permissible limits. Such a regulatory change would

incur increased costs, as ArcelorMittal would need to invest on

new waste treatment systems in order to fulfill the new

requirements. Moreover, ArcelorMittal needs to comply by July

1, 2022 with new rules on the measurement of national waters

that mandates continuous data monitoring.

ArcelorMittal’s mining activities also are subject to increasingly

stringent environmental and safety requirements.

For example, in Brazil, regulations from the National Mining

Agency (“ANM”) focus mainly in simplifying the procedures for

requesting research or mining, revising existing standards

concerning mining companies’ obligations regarding the safety

of mining dams (monitoring activities, compliance and

operability assessments, and dam emergency action plans) and

standardization of the procedures regarding the Mine Closure

Plan and decommissioning requests (ANM Resolution No. 68,

04/30/21).

In the State of Minas Gerais, several norms regarding dam

safety have been adopted, among them, the State Policy for

People Affected by Dams, the guidelines for the presentation of

the Emergency Action Plan, the rules applicable to the

accreditation of independent external auditors to carry out

technical safety audits under the scope of the State Policy for

Dam Safety, as well as the process for registration and

classification of dams subject to the State Policy for Dam Safety.

In Canada, the mining industry is negotiating depollution permits

applicable to AMMC and ArcelorMittal Long Products Canada

facilities. In the mining sector, some objectives for dust, NOx

and SO2 were also identified and a draft agreement prepared,

but there has been no further progress.

The renewal requests of the depollution permits for AMMC's

Mont Wright operations, Fire Lake and Port-Cartier pellet plant

are still being analyzed by the environmental authorities that

wish to apply the same standards to all mines. These permits

establish the targets for water, air, soil and waste management,

as well as the monitoring and reporting frequencies and

requirements.

The above mentioned Quebec 2011 Clean Air Act reduced the

limit for total PM from 120 to 75 grams/tonne produced for

existing pelletizing plants, including ArcelorMittal Mines Canada.

The electrostatic precipitator refurbishment plan included in the

five-year capital expenditure plan will contribute to ensuring

conformity with the new emission limit on a medium-term basis.

This project is being undertaken over a 10-year timeline, and its

expected cost will be approximately CAD15 million.

Moreover, renewed depollution permits that will apply to

ArcelorMittal Long Products Canada’s Contrecoeur West and

East facilities, issued respectively on December 21, 2018 and

April 27, 2021, establish more stringent targets for water, air, soil

and waste management, as well as the monitoring and reporting

frequencies and requirements. Obtaining the new depollution

permits will require increasing monitoring frequencies as well as

conducting certain studies including water usage, air dispersion

modelling, phase I environmental site assessment, former EAF

dust stockpile site and former slag management area

restoration.

In addition, Québec’s revised 2018 regulation relating to

compensation for adverse effects on wetlands and bodies of

water, will apply to projects conducted in Port-Cartier and also

apply at ArcelorMittal Long Products Canada future projects.

Management report

An environmental performance agreement - signed between

Environment and Climate Change Canada (“ECCC”), the Iron

Ore Company of Canada and AMMC - is in effect from January

5, 2018 to June 1, 2026. It aims to implement BLIERs

developed for the iron ore pellet sector. More precisely, it

specifies the membership, timelines and deliverables of the NOx

Working Group and will ensure that the BLIERs limits for PM2.5

and SO2 are met, and that the approach to study NOx is

implemented.

It is difficult to fully assess the extent to which additional

operating or capital expenditures will be required to comply with

pending or recently-enacted amendments to environmental

laws, directives and regulations or what effect they will have on

the Company’s business, financial results or cash flow from

operations.

In addition, in 2021, the Company approved 40 multi-year

projects with identified environmental benefits and involving

capital expenditure of $565 million and 34 multi-year projects

with identified energy benefits and involving capital expenditure

of $442 million. The latter includes 11 multi-year projects

specifically targeted to decarbonization involving capital

expenditure of $174 million. Actual capital expenditure on

decarbonization initiatives for the year ended December 31,

2021, amounted to $0.1 billion and is expected to increase to

$0.3 billion (net of government support) in 2022. See also

further information on key environmental projects in "—

Sustainable development" and "Capital expenditure projects".

Industrial emissions regulation: climate change

In December 2015, 195 countries participating in the United

Nations Framework Convention on Climate Change (“UNFCC”),

at its COP21 held in Paris, adopted a global agreement on the

reduction of climate change (the “Paris Agreement”). The Paris

Agreement sets a goal to limit the increase in global average

temperature to well below 2 degrees Celsius and pursues efforts

to limit the increase to 1.5 degrees Celsius, to be achieved by

getting global GHG emissions to peak as soon as possible. The

Paris Agreement consists of two elements: a legally binding

commitment by each participating country to set an emissions

reduction target, referred to as “nationally determined

contributions” or “NDCs”, with a review of the NDCs that could

lead to updates and enhancements every five years beginning

in 2023 (Article 4) and a transparency commitment requiring

participating countries to disclose in full their progress (Article

13). The majority of countries have issued their intended NDCs.

More recently, during COP26, the signatories reached a final

agreement, the Glasgow Pact. This was the first climate

conference pact in the history of UN climate talks to contain any

mention of the need to end the world’s reliance on coal and

fossil fuel subsidies. Countries have been asked to come to

COP27 with strengthened plans to slash emissions. One of the

most important announcements made is that the governments

have finally reached agreement on how to progress the

development of tradable carbon credits, known as Article 6 of

the Paris Agreement. Governments agreed to establish the

standards for two types of carbon markets: for carbon units

traded between governments that are over and underachieving

their nationally determined contributions (NDCs), and for GHG

reductions created and traded anywhere in the world by the

public or private sector. A UN appointed body will deliver

recommendations on the functioning of these markets to COP27

next year.

Specifically, for the steel sector, heavy industry was a focus of

initiatives at COP26. Steel was one of the five Glasgow

breakthrough sectors, (with power, road transport, hydrogen and

agriculture), which collectively cover more than 50% of global

emissions. The aim is to make clean technologies the most

affordable, accessible and attractive choice for all in each of the

most polluting sectors by 2030, particularly supporting the

developing world to access the innovation and tools needed to

transition to net zero. The goal is to reach net-zero emission

steel as the preferred choice in global markets, with efficient use

and net-zero emission steel production established and growing

in every region by 2030.

Alongside the Glasgow Pact, Governments of the United

Kingdom, India, Canada and the United Arab Emirates launched

the Industrial Deep Decarbonization Initiative (“IDDI”) campaign.

The IDDI aims to achieve net-zero in major steel and concrete

public construction by 2050, with specific interim targets by

2030, by means of standards and evaluation guidelines on

green procurement.

In July 2021, the European Climate Law was published, setting

a new EU climate ambition target aiming at achieving at least a

55% reduction in greenhouse gases (“GHG”) emissions in 2030

versus 1990 (compared with the current ambition of a 40%

reduction) and reaching carbon neutrality by 2050.

On July 14, 2021, the European Commission adopted the “Fit

for 55” Package with a view to adapting climate and energy

legislation to the 2030 ambition set by the European Climate

Law. The EU also committed internationally to its 55% reduction

target. The “Fit for 55” amends several pieces of legislation that

are already applicable to ArcelorMittal, such as the EU

Emissions Trading Scheme (“EU-ETS”), the Renewable Energy

Directive, the Energy Efficiency Directive, Energy Taxation

Directive and introduces a proposal for establishing a Carbon

Border Adjustment Mechanism (“CBAM”).

ArcelorMittal’s activities in the 27 member states of the EU are

subject to the EU-ETS, which was launched in 2005 pursuant to

European Directive 2003/87/EC, relating to GHG emissions.

The EU-ETS is based on a cap and trade principle, setting a cap

Management report

on GHG emissions from covered installations that is then

reduced over time. Within this cap, companies receive emission

allowances which they can sell to or buy from one another as

needed. The limit on the total number of allowances available

ensures that they have a value. The EU is implementing its

more stringent Phase 4 EU-ETS for the 2021 to 2030 period in a

manner that may require ArcelorMittal to incur additional costs to

acquire emissions allowances. Under the current rules, to

achieve the EU’s overall greenhouse gas emissions reduction

target by 2030, the sectors covered by the EU-ETS must reduce

their emissions by 43% compared to 2005 levels. In order to

achieve the new EU 2030 ambition, the ETS proposal requires

sectors under ETS to reduce their emissions by 61%. In

particular, upcoming implementation rules for trading period 4.2

are expected to further reduce current benchmark and the

resulting shortage in free allocation levels which would put the

European steel industry at a significant disadvantage versus

global competition (see notes 6.3 and 9.1 to the consolidated

financial statements).

Moreover, the European Green Deal announced the revision of

the Renewable Energy Directive. The Commission proposed to

increase the current EU-level target of “at least 32%” of

renewable energy sources in the overall energy mix to at least

40% by 2030, which represents doubling the current renewables

share of 19.7% in just a decade. The Proposal aims to deploy

renewables across all sectors, and particularly in sectors where

progress in integrating renewables had been slower – such as

the industry.

In addition, revision of the existing Land Use, Land Use Change

and Forestry (“LULUCF”) is part of the energy and climate

legislative framework. The proposal aims to increase the carbon

removals to 310 million of tonnes CO2e by 2030 and to achieve

climate neutrality in the combined land use, forestry and

agriculture sector by 2035 at EU level. The LULUCF sector is

connected to all ecosystems and economic activities that rely on

the land and the services it provides, therefore impacting

ArcelorMittal’s sites.

Finally, the Sustainable Product Initiative which will revise the

Directive 2009/125/EC (“Ecodesign Directive”) and propose

additional legislative measures as appropriate, aims to make

products placed on the EU market more sustainable. The

initiative will also address the presence of harmful chemicals in

steel.

GHG emissions regulations are being implemented in an

increasing number of other jurisdictions where ArcelorMittal

operates.

For example, in South Africa climate legislation is developing

rapidly in order to regulate the carbon footprint of industry in the

form of carbon pricing mechanisms and emission thresholds.

The Carbon Tax Act to tax carbon dioxide emissions was

adopted and came into effect in 2019. Moreover, a Climate

Change Bill is currently awaiting parliamentary approval, and is

expected to be promulgated by early 2022. This Climate

Change Bill will set up a comprehensive and harmonized GHG

legal framework, along with the implementation of Carbon

Budget allocations for companies from 2023 onwards

(exceedances of such allocations will be taxed in terms of the

Carbon Tax Act in combination with the Carbon Tax which is

already collected).

Moreover, with the imminent review in 2022 of the emission

standards prescribed in terms of the “National Environmental

Management: Air Quality Act (Act 39 of 2004)”, industries can

expect more stringent emission limits and additional compliance

monitoring and reporting obligations in the near future.

Furthermore, greater emphasis is anticipated on diffuse dust

emission management, with the primary objective of improving

ambient air quality on a national level. Consequently, emission

reduction strategies for ArcelorMittal South Africa’s business

units will receive greater consideration from the authorities and

local NGO’s.

In Canada, carbon pricing regulations are becoming more

stringent. Starting in January 1, 2022 ArcelorMittal Dofasco and

Ontario industries will be regulated on carbon pricing under the

Ontario Emissions Performance System (“OEPS”), transitioning

out of the Federal out-put based pricing system (“OBPS”). It was

approved by the Federal government in late 2020 and the cost

may be marginally lower compared to the OBPS. However, the

Federal government intends to ensure provincial GHG programs

are rigorous enough to meet Federal carbon reduction targets

(40 – 45% lower than 2005 by 2030). Details about the new

Provincial system are under development since the Federal

government imposed in 2021 new GHG reductions; results are

expected to be announced early 2022. Possible risks include

potential reduction in free allowances to the steel sector and

increased costs. In the OEPS, integrated steel GHG emission

performance standards are set for: coke, iron, steel and general

combustion. There are 100% allowances for fixed emissions

and a declining cap for combustion emissions: starting at 100%,

decreasing by 2% per year for high Emissions-Intensive and

Trade-Exposed companies. Compliance is achieved by

reducing GHGs or by purchasing compliance units (e.g., surplus

credits & offsets).

In Quebec, the 2030 Plan for a Green Economy set a 37.5%

greenhouse gases emission reduction target compared with

1990 levels, and to reach carbon neutrality by 2050. Separate

consultations by the government of Quebec are underway with

large GHG emitters in each province with regard to the cap and

trade program regulation for the second and subsequent

compliance periods from 2021 to 2030. For Québec,

consultations were completed for the 2021 to 2023 compliance

Management report

period and the financial impact of the regulation was reduced

compared to what was presented at the end of 2016 for the

period. For the period 2024 to 2030, negotiations are still in

progress in order to minimize the financial impact of regulatory

changes on ArcelorMittal’s operating subsidiaries in Canada.

Regarding clean energy, a one-year test with liquefied natural

gas (“LNG”) was started in the spring of 2018. At AMMC, a total

of six burners on one production line were converted to LNG

with the objective of reducing the cost of GHG emissions. To

improve the energy usage, multiple initiatives are implemented

by AMMC at the pellet plant, among which the three-stage

screening conveyor project is the most successful in increasing

energy efficiency. Projects on cleaner fuel usage, such as

natural gas and bioenergy, are being studied at the pellet plant.

As part of Canada’s climate plan to reduce emissions and to

accelerate the use of clean technologies and fuels, the 2017

Clean Fuel Standard (“CFS”) establishes lifecycle carbon

intensity requirements separately for liquid, gaseous and solid

fuels that are used in transportation, industry and buildings.

This performance-based approach is intended to incentivize

innovation, development and use of a broad range of lower

carbon fuels, alternative energy sources and technologies. The

CFS only requires liquid fuel (e.g., gasoline, diesel, home

heating oil) suppliers to reduce the carbon intensity (CI) of their

fuels. Gaseous and solid fossil fuels have been eliminated from

the scope (ArcelorMittal Dofasco and associations heavily

advocated against the inclusion of gaseous and solid fuels).

Beginning in 2022, the cost increase of liquid fuels will be

passed on to consumers.

Brazil created the Low Carbon Industry Technical Committee

and the Interministerial Committee on Climate Change and

Green Growth. These are advisory bodies and are intended to

articulate public and private initiative agents and to stimulate the

transition to a low carbon economy in the country.

The Ministry of Environment's Ordinance No. 386, of 08/23/21,

established the National Air Quality Management System and

the “National Pure Air Program” (which aims to ensure air quality

in urban areas).

In the State of São Paulo, the Decision of the Board of the State

of São Paulo Environmental Company of the State of São Paulo

(“CETESB”) instituted the Greenhouse Gases Emissions

Inventory, by enterprises, defining the respective criteria for

elaboration. Starting in 2022, it will require that certain types of

enterprises (e.g, coking plants, metallic mineral sintering plants,

pig iron or steel production plants with a production capacity

exceeding 22,000 t/year, ferrous metal foundries with a

production capacity exceeding 7,500 t/year and other facilities

with fossil fuel consumption that emit more than 20,000 t/year of

CO2, HFC's, PFC's or SF6) should prepare and communicate

annually (between September 1 and October 31) to CETESB an

Inventory of Greenhouse Gas Emissions containing information

about carbon dioxide ("CO2"), methane ("CH4"), nitrous oxide

("N2O"), sulfur hexafluoride ("SF6"), hydrofluorocarbons

("HFC's"), and perfluorocarbons ("PFC's"). The report issued will

always refer to the emissions of the previous base year. Initially

and until more precise criteria are available, the methodology for

calculating the estimated emissions can be the ABNT NBR ISO

14.064-1 standard. The standard provides for 3 scopes of

emissions: direct emissions, indirect emissions arising from the

source of electricity used, and indirect emissions arising from

own or outsourced vehicle fleets. The presentation of sources of

indirect emissions from own or outsourced vehicle fleets will be

optional.

Law enforcement in Brazil is expected to become more frequent

and stricter in coming years, especially regarding mining

activities. Additionally, in the next few years, investments may

be necessary to reduce air emissions and carbon emissions.

In Argentina, climate goals are becoming more ambitious as

well. In December 2020, the country presented its second

Nationally Determined Contribution (“NDC2”), where it updated

and intensified its commitment to reduce greenhouse gas

emissions by 2030. Argentina ultimately aims to be carbon

neutral by 2050. In addition, end of 2020 Decree 1030/2020 was

adopted to implement the 2019 Law 27520 on Minimum

Budgets for Adaptation and Mitigation to Global Climate

Change. At local level, three provinces have already published

their own local Climate Change Law: i) Ciudad Autónoma de

Buenos Aires, ii) Rio Negro and iii) Santa Fe. In the latter,

ArcelorMittal Acindar has the main site (Direct Reduction,

Steelplant, HotRolling Mill). The Law 14019/20 for Santa Fe

province defines the public policy for responding to climate

change and sets a period of one year to establish measures and

actions regarding the reduction of greenhouse gases and

adaptation to climate change (not regulated up to now). In its

article 14, it mentions that the provincial government may

establish a Carbon Emissions Trading System.

Moreover, ArcelorMittal is increasing its consumption of

renewable energy through private power purchase agreements

in two sites: i) Tablada site, which is the case since 2019 and ii)

Villa Constitucion site, from 2024 onwards. In both cases, no

additional financial impact should be incurred. ArcelorMittal

Acindar’s annual demand should amount to 1.3 TWh per year.

In Mexico, the Government launched a comprehensive climate

policy within the framework of an ETS to meet its obligations

under the Paris Agreement. On October 1, 2019, the

Government published rules and foundations of an emissions

trading system for those who generate more than 100,000 tons.

of CO2/year. Starting from 2020, a pilot ETS is being

implemented for 3 years for ArcelorMittal México Long and Flat

Management report

Segments and Services areas (“SERSIINSA”). As the program

is still in a trial and analysis period, if ArcelorMittal Mexico

exceeds the granted emission credits, it will not be obliged to

buy more rights of emission nor invest in reduction projects. The

ETS process will start formally on January 1, 2023. Moreover,

General Federal Law for Climate Change mandates

ArcelorMittal Mexico to verify and validate its yearly CO2

emissions report with an external authorized company every

year.

In Ukraine, the climate change policy is being dynamically

developed. The Law "On Monitoring, Reporting and Verification

of Greenhouse Gas Emissions" ("MRV Law") came into force on

January 1, 2021. It aims at introducing the EU’s MRV rules for

the largest carbon emitters and paves the way for the ETS

implementation, which is compatible with EU ETS. Hence, in

April 2022 the first verified data on GHG emissions from the

largest Ukrainian industrial companies will be published in

accordance with the MRV Law. Moreover, Ukraine submitted its

second Nationally Determined Contribution (“NDC2”) on July 31,

2021. The NDC2 involves a target of 65% reduction of GHG

emissions below the 1990 level by 2030, in line with the above

mentioned LULUCF Regulation. The NDC2 has increased the

Ukraine’s ambition from the target announce in the first NDC –

at least 40% reduction of GHG emissions below the 1990 level

by 2030. Apart of the 2030 target, the NDC2 contains the new

pledge of climate neutrality by 2060, repeating the target

announce earlier in the “National Economic Strategy until 2030”,

approved by the Ukrainian Government in March 2021.

Additionally, in October 2021 the Ukrainian Government

approved the Environmental Security and Climate Adaptation

Strategy until 2030. This Strategy has been developed to fulfil

Ukraine’s international obligations under the Paris Agreement,

providing the strategic outlook for the prospective adaptation

measures to the consequences of global climate change. The

document also focuses on the industrial pollution reduction; the

effective chemical safety system establishment; the rational use

of natural resources etc. As stated above, the Strategy will be

implemented in accordance with the approved action plan,

setting out the list of measures for the consecutive three years.

ArcelorMittal is closely monitoring local, national and

international negotiations, regulatory and legislative

developments and is endeavoring to reduce its own emissions

where appropriate.

Health and safety laws and regulations

ArcelorMittal’s operations are subject to a broad range of laws

and regulations relating to the protection of human health and

safety. As these laws and regulations in the United States, the

EU and other jurisdictions continue to become more stringent,

ArcelorMittal expects to expend substantial amounts to achieve

or maintain compliance. See “Risk factors—Legal and

regulatory risks—ArcelorMittal is subject to strict environmental,

health and safety laws and regulations that could give rise to a

significant increase in costs and liabilities.” ArcelorMittal has

established health and safety guidelines requiring each of its

business units and sites to comply with all applicable laws and

regulations. Compliance with such laws and regulations and

monitoring changes to them are addressed primarily at the

business unit level. ArcelorMittal has a clear and strong health

and safety policy, aimed at reducing on a continuing basis the

severity and frequency of accidents; through its Health & Safety

Council and Management Committee, the Company reinforces

the penetration of the safety culture in the Company. The

effective policy outlines the commitment ArcelorMittal has made

to the health and safety of all employees and reinforces the

accountability of the local management and encourages the

continuous improvement in health and safety performance at

unit level, which permits the Health & Safety Council and

Management Committee to define and track performance

targets and monitor results from every business unit and sites.

See "Business overview—Sustainable development—

Management Theme #1: Health and safety" for further

information.

Foreign trade

ArcelorMittal has manufacturing operations in many countries

and sells its products worldwide. In 2021, certain countries and

communities, such as Canada, the EU, Egypt, India, Mexico,

Philippines, South Africa, Thailand, Turkey, and the U.S.

continued or launched investigations into whether to impose/

continue imposing trade remedies (usually anti-dumping or

safeguard measures) against injury, or the threat thereof,

caused by increasing steel imports originating from various steel

producing countries. The EU is currently carrying out anti-

dumping reviews or investigations into hot-rolled and cold-rolled

coil from Russia, corrosion-resistant steel from Russia and

Turkey, electrolytic chromium coated steel ("ECCS") from China

and Brazil and Wire Rod from China. Canada is currently

carrying out a number of anti-dumping and anti-subsidy

investigations into cold-rolled steel and corrosion resistant steel,

as well as reviewing existing anti-dumping and anti-subsidy

measures on hot-rolled coil from China, Brazil, Ukraine and

India.

Under both international agreements and the domestic trade

laws of most countries, trade remedies are available to domestic

industries where imports are “dumped” or “subsidized” and such

imports cause injury, or a threat thereof, to a domestic industry.

Although, there are differences in how trade remedies are

assessed, such laws have common features established in

accordance with World Trade Organization (“WTO”) standards.

Dumping involves exporting a product at a price lower than that

at which the same or similar product is sold in the home market

of the exporter, or where the export prices are lower than a

value that typically must be at or above the full cost of

Management report

production (including sales and marketing costs) plus a

reasonable amount for profit. Subsidies from governments

(including, among others, grants and loans at artificially low

interest rates) are similarly actionable under certain

circumstances. The trade remedies available are typically (i) an

anti-dumping duty order where injurious dumping is found and

(ii) a countervailing duty order or suspension agreement where

injurious subsidization is found. Normally, the duty is equal to

the amount of dumping or subsidization that is generally

imposed on the imported product (other than in the EU where

the lesser duty rule is applied). Accordingly, such orders and

suspension agreements do not prevent the importation of a

product, but rather require that either the product be priced at a

non-dumped level or without the benefit of subsidies, or that the

importer pay the difference between such dumped or subsidized

price and the actual price to the government as a duty.

Safeguard measures are addressed more generally to a

particular product, irrespective of its country of origin, to protect

domestic production against serious injury caused by

unforeseen, sharp and sudden increase of imports.

All WTO members are required to review anti-dumping duty and

countervailing duty orders every five years to determine if they

should be maintained, revised or revoked. This requires a

review of whether the dumping or subsidization is likely to

continue or recur if the order/suspension agreement is revoked

and whether a domestic industry in the country is likely to suffer

the continuation or recurrence of the injury within the reasonably

foreseeable future if the orders are revoked. If the government

finds dumping or subsidization and the injury is likely to continue

or recur, then the orders continue. In the case of safeguard

measures enduring for greater than three years, all WTO

members are required to review the imposed measures in the

mid-term of the relevant measure. After a review, safeguard

measures may be extended if they continue to be required, but

the total period for the application of safeguard measures may

not exceed eight years.

In a number of markets in which ArcelorMittal has manufacturing

operations, it may be the beneficiary of trade actions intended to

address trade distortions consistent with WTO regulations, such

as the examples mentioned above. In other situations, certain

operations of ArcelorMittal may be a respondent to anti-dumping

and countervailing duty cases and its exported products might

be subject to anti-dumping and countervailing duties or other

trade restrictions, for example anti-dumping duties imposed in

2017 by the Egyptian government against rebar imports from

Ukraine, Turkey and China affecting exports from ArcelorMittal

operations in Ukraine.

USA Section 232:

On March 23, 2018, after a section 232 national security

investigation with respect to steel imports, the Trump

Administration imposed tariffs of 25% on steel products from all

but a select list of countries, with a temporary suspension

applied for Canada, Mexico, Argentina, South Korea, Brazil and

the EU until May 1, 2018. Subsequently, Australia obtained a full

exemption, and imports from Argentina, Brazil, and South Korea

are subject to annual quotas. In addition, as of May 16, 2019,

Turkish imports are subject to a 25% tariff after having been

subject to 50% tariffs since August 2018. Tariffs on imports of

steel products from Canada and Mexico were eliminated on May

17, 2019, which led to positive impacts in the Company’s

NAFTA business units; imports from Canada and Mexico were

monitored to identify if imported volumes surge meaningfully

beyond historic levels. On August 28, 2020, President Trump

closed the fourth quarter of 2020 Brazilian quota (no further

imports allowed) on semi-finished steel although the Company

received an expedited exclusion to import 40,000 metric tons of

semi-finished steel in the fourth quarter; the 2021 quota will

revert to the original aggregate 3.5 million tonnes volume. On

October 31, 2021, the U.S. and EU announced that they had

reached agreement to modify the section 232 measures on U.S.

steel imports from the EU. Effective January 1, 2022, the U.S.

replaced the existing Section 232 tariffs on EU steel with a Tariff-

rate Quota (TRQ) consistent with pre-Section 232 trade volumes

in return for the EU dropping the threat of retaliatory tariffs. The

total annual import volume under the TRQ is set at 3.3 million

tonnes allocated by product category and on an EU member

state basis. Only steel “melted and poured” in the EU is eligible

for duty-free treatment. Imports above the TRQ volumes will

continue to be subject to the 25% tariff. An additional 1.1 million

tonnes of products previously excluded from Section 232 tariffs

will also be allowed to continue duty-free.

The USA Section 232 tariffs have triggered concerns of trade

deflection worldwide and several countries initiated domestic

remediation measures. On March 26, 2018, the EU Commission

opened ex-officio a safeguard investigation on 26 products

(including 19 long, flat and stainless steel products and 7 tubes

and other steel products). On July 18, 2018, the EU

Commission published provisional measures which entered into

force on July 19, 2018 based on global tariff quotas with a 100%

quota based on average imports over the past 3 years on 23

product categories. Imports that exceeded the above quotas

would face a 25% tariff but certain 'developing' countries were

exempt when their import share was below 3%. The EU’s

provisional safeguard measures were replaced by definitive

safeguard measures approved by EU member states on

January 16, 2019 and went into effect on February 2, 2019,

which cover the full steel product scope, setting country-based

quotas for larger importers on all product categories, except for

Management report

hot rolled (global), and quarterly quota calculations for residual

volumes of all products. The measures also include three

phases of 5% quota relaxations in February 2019, July 2019

and July 2020, which can be adapted to market conditions for

each product individually. Countries subject to quotas have an

incentive to frontload the consumption of their national quota in

order to benefit from the residual quotas in the final quarter of

the period, thus ensuring full quota consumptions. In July 2019,

the EU commission completed a review investigation of these

safeguard measures and proposed modifications, which were

implemented on October 1, 2019. The main changes include:

•a reduction of quotas to 3% (from the 5%

quotas applicable since July 1, 2019),

•inclusion of additional countries in the developing

country quota list which had met the 3% import levels,

•a quarterly cap of 30% of the HRC global applicable to

each country's total import cap for hot rolled coil, and

•a 30% cap applicable to the last quarter per period of a

country's total cap on wire rod and rebar imports, as

well as a new requirement that end users (product

purchasers) validate any imports of category 4B

products (hot dip galvanized products used in the auto

industry).

In February 2020, the EU Commission started a second review

of the EU Steel Safeguards to consider adjustments to the tariff-

rate quota considering changes since the last review in 2019.

On June 12, 2020, EU member states voted in favor of the

Commission’s revised measures. These were implemented from

July 1, 2020.The main changes include:

•Quarterly management of country specific quotas;

•Country-specific quotas for hot rolled flat products

("HRF");

•Access to residual quotas prohibited for organic

coated, wire rod, gas pipes, and cold finished bars;

•Access to residual quotas more restricted for most long

products; and

•30% cap per country accessing the residual quotas for

hot dip galvanized 4B (automotive grade material) and

HRF in the fourth quarter of 2020.

In February 2021, the EU Commission initiated a review into

extending the safeguard measures to consider whether the

situation justified prolonging the tariff-rate quota. On June 18,

2021, EU member states voted in favor of a three-year

extension prolonging the measures until June 30, 2024. The key

elements of the extension include:

•No changes to the quota modalities;

•3% liberalization from July 1, 2021;

•A review of the quota levels after one year; and

•A review of the measures in general after two years.

ArcelorMittal welcomed the extension of the safeguard

measures in Europe.

In December 2021, the European Commission opened a new

review into the functioning of the safeguard measures. The

result of the review should be known in second quarter of 2022.

In response to the measures adopted by the United States and

the EU, Turkey opened a safeguard investigation on May 2,

2018 with provisional measures effective as of October 17,

2018. Turkey’s safeguard investigation on iron and steel

products, which was supposed to be concluded by January 26,

2019, was extended for six months, i.e., until July 26, 2019, with

provisional safeguard measures that remained in effect until

May 5, 2019. The investigation covered hot-rolled, cold-rolled,

coated, hot-dipped galvanized, bars and rods, angles, shapes

and sections, wire rod, rails, tubes and hollow profiles and

stainless steel and the provisional measures were in the form of

a free tariff quota with 25% duties. Such investigation was

terminated on May 7, 2019 without permanent safeguard

measures being imposed. In January 2021, Turkey opened an

investigation into HRC coming from the EU and South Korea.

The investigation is ongoing and the result should be known by

the third quarter of 2022. In Canada, as a result of the opening

of a safeguard investigation on certain flat and long products,

provisional measures were put in place on October 25, 2018 in

the form of quotas and a 25% tariff on steel imports. Final

safeguard measures were subsequently implemented in relation

to plate and stainless wire, but not rebar, hot rolled, prepaint,

wire rod and energy tubulars. The Eurasian economic union led

by Russia also opened a safeguard investigation on August 7,

2018 covering some flat steel products only and on August 8,

2019, safeguard measures covering hot-rolled steel were put in

place, imposing 20% tariffs above relevant quotas.

Key currency regulations and exchange controls

As a holding company, ArcelorMittal is dependent on the

industrial franchise fees from, earnings and cash flows of, and

dividends and distributions from, its operating subsidiaries to

pay expenses, meet its debt service obligations, pay any cash

dividends or distributions on its ordinary shares or conduct

share buy-backs. Significant cash or cash equivalent balances

may be held from time to time at subsidiaries where repatriation

of funds may be affected by tax and foreign exchange policies,

including in Argentina, Brazil, China, Kazakhstan, South Africa,

Ukraine and Venezuela. Such policies are briefly summarized

Management report

below; however, none of these are currently significant in the

context of ArcelorMittal’s overall liquidity.

Argentina

The Argentinian foreign exchange market is regulated by the

Argentine Central Bank ("BCRA"). The BCRA allows the local

currency to free-float against the USD, however, capital controls

have reduced volatility in an effort to provide stability to the

currency. The Argentinian peso (“ARS”) is not fully convertible

and is most commonly traded as a non-deliverable forward

("NDF"), both onshore and offshore. An account in local

currency cannot be held offshore. As of July 1, 2018, Argentina

has been considered as a hyperinflationary economy. Since the

re-imposition of capital controls in September 2019, local

restrictions on obtaining foreign currencies have tightened,

requiring the BCRA's approval for all foreign currency

transactions and all transfers to and from the local market for

companies and for financial outflows, such as dividend

payments. The BCRA has set a limit of 5 days for exporters to

convert foreign currency, while institutions will need

authorization of the bank to buy USD in the foreign exchange

market, except in the case of foreign trade, according to a

statement from the BCRA. In September 2020, the BCRA

intensified Forex regulation once again, instituting a 30% tax on

purchases made abroad and restricting withdrawals to USD 200

per month. In addition, a 0.06% fixed charge on all current bank

accounts (debit and credit) has been installed. See also note

2.2.2 to the consolidated financial statements.

Brazil

The Central Bank of Brazil ("BCB") operates a managed floating

foreign exchange regime, although intervention has become

more regular in recent years. Nevertheless, the BCB does not

intervene in the foreign exchange market to determine the

exchange rate. The Brazilian real is fully deliverable onshore

(i.e., physical settlement of the designated currency at maturity),

but is non-deliverable offshore. With proper documentation, the

repatriation of registered invested capital and remittance of

profits do not require prior approval from the BCB. Profits can be

freely remitted as dividends or as interest on capital to foreign

shareholders or portfolio investors.

China

China’s foreign exchange regime has undergone significant

liberalization in recent years. The People’s Bank of China

(“PBOC”) maintains the Chinese renminbi in a managed float

with reference to a basket of currencies. The CNY, which refers

to the Chinese renminbi on the onshore market, is partially

convertible and has a non-deliverable offshore market. All

transactions involving foreign exchange are strictly controlled by

the State Administration of Foreign Exchange. Since 2021,

repatriating capital or profits out of China includes increased

layers of inspection and security from the government. The

PBOC has decided to increase the amount of foreign-currency

deposits that financial institutions need to hold as reserves,

starting in June 2021, in order to curb sell-offs of foreign

currencies after the renminbi's value climbed to a record

high.The CNH, which is the Chinese renminbi traded offshore,

became deliverable in Hong Kong in July 2010. The CNH can

generally be transferred freely between offshore accounts and

interaction with the onshore market is growing, although

transfers of CNH from Hong Kong to onshore China are subject

to regulations and approval by the PBOC. Moreover, in July

2020, integration of the interbank and exchange bond markets,

as well as wider participation in the treasury bond futures

market, suggest that more progress is likely to be made by the

PBOC to move for more internalization of the Chinese market.

India

The Reserve Bank of India ("RBI") maintains the Indian rupee

(“INR”) in a managed floating regime. The INR is partially

convertible and has a non-deliverable offshore market. Onshore

deliverable forwards are also available out to 10 years. The

most common tenor with the best liquidity in the forwards market

is one year or less. The INR is convertible for exports and

imports of goods and services as well as unilateral transfers,

including repatriating profits from foreign-funded companies, as

well as for daily recurring transactions in the ordinary course of

business. However, the INR is restricted on the capital account

(purchase and sale transactions of foreign assets and liabilities)

and there are specific transactions that have to be authorized by

the RBI or other relevant government departments for routine

capital account transactions, e.g. foreign currency borrowings

under the approval route or foreign direct investments that are

not permitted under the automatic route. Other permitted capital

account transactions that are allowed, subject to compliance

with local applicable regulations, include foreign direct

investment, foreign currency loans and bonds, securities and

equity investments overseas. In April 2020, the RBI issued final

guidelines on “Hedging of foreign exchange risk by Residents

and Non-Residents”. The simplified guidelines are expected to

have a positive material impact on product suite, procedures

and requirements for hedging requests which will impact both

local and global franchises.

Kazakhstan

In August 2015, the National Bank of Kazakhstan devalued the

Kazakhstan tenge and introduced a free-floating exchange rate

with an inflation targeting regime. The National Oil Fund

conducts open market operations to finance economic

programs, hence the current exchange rate regime may be best

described as a managed float. Liquidity in foreign exchange

markets is limited and mainly non-deliverable forwards are

traded on offshore markets. There are no restrictions on tenge

convertibility, but domestic legal entities must state their reasons

for buying foreign currency and may only trade with authorized

banks.

Management report

South Africa

The South African Reserve Bank ("SARB") operates a managed

floating exchange rate system. The South African rand (“ZAR”)

is deliverable and largely convertible, and the SARB is gradually

relaxing exchange rate controls. Since January 1, 2014,

companies may apply for approval to establish a holding

company to hold their offshore investments. Subject to certain

conditions, listed companies may place ZAR 3 billion per year

with such holding companies, which can be transferred offshore

without exchange control approval, and unlisted companies may

transfer ZAR 2 billion per year. All funds transferred into or out of

South Africa must be declared to the SARB.

Ukraine

The National Bank of Ukraine ("NBU") is responsible for the

country’s monetary policy. The exchange rate system has gone

through significant liberalization during 2018-2019, notably with

the set-up of a floating exchange rate regime, though currency

control for foreign currency purchases still remains in place.

Deliverable forwards and foreign currency swaps are allowed on

the onshore market, with an improvement in liquidity. The NBU

has achieved an accumulation of foreign currencies in order to

intervene to smooth exchange market volatility. Non-deliverable

forwards are not allowed onshore, however the local market is

still in a preparatory phase. On the offshore market, Ukrainian

hryvnia ("UAH") Non-Deliverable Forwards are traded with good

liquidity from both sides, with tenors of up to 1 year. Since

August 2016, foreign investors are entitled to repatriate profits,

income or other funds relating to investments without any

restrictions, after the payment of applicable taxes. In 2019, the

NBU lifted all restrictions for dividends on securities, assets

repatriated by corporates, decreases in share capital or exits

from local legal entities.

Venezuela

Venezuela’s foreign exchange regime has been characterized

by governmental devaluation and legislative changes. DICOM is

the country’s official exchange rate. On August 20, 2018, the

bolivar soberano ("VES") replaced the bolivar fuerte ("VEF") at a

rate of 1 VES to 100,000 VEF. The only way to convert the VES

is through the DICOM rate, which sets an exchange limit of

€340,000 per month for domestic legal entities. Since

September 7, 2018, currency purchase and sale transactions

can be freely converted by direct agreement between the

parties, provided they do so through the exchange operators of

the Central Bank, however, the Central Bank of Venezuela can

intervene in these operations whenever it deems necessary to

avoid distortions of the exchange value of the national currency.

Local banks are allowed to provide accounts in USD and other

convertible currencies as well as the transfer of funds between

banks. Since this regime's effective date, the foreign exchange

market has been characterized by limited existence of

customers and transactions for insignificant amounts.

Transactions are allowed on a non-deliverable offshore market,

but liquidity is very limited. On October 1, 2021, Venezuela

Government launched its second monetary overhaul in three

years by cutting six zeros from the bolivar currency in response

to hyperinflation. Consequently the currency has been renamed

from VES to VED.

Management report

Disclosure pursuant to Section 219 of the Iran Threat Reduction

& Syria Human Rights Act (ITRA) ArcelorMittal’s business with

customers in Iran

Section 219 of the Iran Threat Reduction and Syria Human

Rights Act of 2012 added Section 13(r) to the U.S. Securities

Exchange Act of 1934, as amended (the Exchange Act).

Section 13(r) requires an issuer to disclose in its annual reports

whether it or any of its affiliates knowingly engaged in certain

activities, transactions or dealings relating to Iran. Disclosure is

required even where the activities, transactions or dealings are

conducted outside the United States by non-US persons in

compliance with applicable law, and whether or not the activities

are sanctionable under US law.

In 2021, neither ArcelorMittal nor any of its affiliates engaged in

activities, transactions or dealings relating to Iran triggering

disclosure under Section 13(r).

ArcelorMittal continues to monitor developments in this area, in

particular the status of U.S. Sanctions, the Joint Comprehensive

Plan of Action ("JCPOA") and EU Sanctions, and the expansion

of the EU Blocking Regulation (Council Regulation (EC)

2271/96). ArcelorMittal carefully monitors political risk and

sanctions exposure and has procedures and systems in place

intended to manage those risks.

However, ArcelorMittal’s business is subject to an extensive,

complex and evolving regulatory framework. It is possible that

ArcelorMittal may face conflicting obligations or risks under U.S.

direct and secondary sanctions and the EU Blocking Regulation,

or other conflicting instruments. Despite its governance,

compliance policies and procedures and continuous efforts to

comply with all applicable sanctions regimes, its systems and

procedures may not always prevent the occurrence of violations

which may lead to regulatory penalties or cause reputational

harm to operating subsidiaries, joint ventures or associates. See

“Risk factors.”

Management report

Organizational structure

ArcelorMittal is a holding company with no business operations of its own. All of ArcelorMittal’s significant operating subsidiaries are

indirectly owned by ArcelorMittal through intermediate holding companies. The following chart represents the operational structure of

the Company, including ArcelorMittal’s significant operating subsidiaries and not its legal or ownership structure.

Management report

Please refer to the "Glossary - definitions, terminology and

principal subsidiaries" for a listing of the Company’s principal

subsidiaries, including country of incorporation. Please refer to

note 2.2.1 of the consolidated financial statements for the

ownership percentages of these subsidiaries. Unless otherwise

stated, the subsidiaries as listed have share capital consisting

solely of ordinary shares, which are held directly or indirectly by

the Company and the proportion of ownership interests held

equals to the voting rights held by the Company.

Investments accounted for under the equity method

ArcelorMittal has investments in entities accounted for under the

equity method as detailed in note 2.4 to ArcelorMittal’s

consolidated financial statements. The Company's key

investments in joint ventures are AMNS India, Acciaierie d'Italia,

Calvert and VAMA for which the Company holds 60%, 62%,

50% and 50%, respectively. See section “Property, plant and

equipment—Investments in joint ventures” for further details.

Reportable segments

ArcelorMittal reports its business in the following five reportable

segments corresponding to continuing activities: NAFTA, Brazil,

Europe, ACIS and Mining.

As from April 1, 2021, ArcelorMittal implemented changes to its

organizational structure whereby primary responsibility for

captive mining operations whose output is mainly consumed by

their respective steel segments has been transferred to such

segments. The Mining segment retains primary responsibility for

the operation of the seaborne oriented operations at AMMC and

ArcelorMittal Liberia Ltd, and will continue to provide technical

support to all mining operations within the Company. Only the

seaborne-oriented operations of AMMC and ArcelorMittal Liberia

Ltd are reported within the Mining segment. The results of all

other mines are henceforth accounted for within the steel

segment that they primarily supply.

NAFTA produces flat, long and tubular products. Flat products

include slabs, hot rolled coil, cold rolled coil, coated steel

products and plate and are sold primarily to customers in the

following sectors: automotive, energy, construction packaging

and appliances and via distributors and processors. Flat product

facilities are located at two integrated and mini-mill sites located

in two countries. Long products include wire rod, sections, rebar,

billets, blooms and wire drawing. Long production facilities are

located at two integrated and mini-mill sites located in two

countries. In 2021, shipments from NAFTA totaled 9.6 million

tonnes. The raw material supply of the NAFTA operations

includes sourcing from iron ore captive mines in Mexico to

supply the steel facilities.

Brazil produces flat, long and tubular products. Flat products

include slabs, hot rolled coil, cold rolled coil and coated steel.

Long products comprise sections, wire rod, bar and rebars,

billets and wire drawing. In 2021, shipments from Brazil totaled

11.7 million tonnes. The raw material supply of the Brazil

operations includes sourcing from iron ore captive mines in

Brazil.

Europe produces flat, long and tubular products. Flat products

include hot rolled coil, cold rolled coil, coated products, tinplate,

plate and slab. These products are sold primarily to customers

in the automotive, general industry and packaging sectors. Flat

product facilities are located at 11 integrated and mini-mill sites

located in five countries. Long products include sections, wire

rod, rebar, billets, blooms and wire drawing. Long product

facilities are located at 10 integrated and mini-mill sites in seven

countries. In addition, Europe includes downstream solutions,

which provides primarily distribution of long and flat products as

well as value-added and customized steel solutions through

further processing to meet specific customer requirements. In

2021, shipments from Europe totaled 33.2 million tonnes. The

raw material supply of Europe operations includes sourcing from

iron ore captive mines in Bosnia & Herzegovina.

ACIS produces a combination of flat, long and tubular products.

It has five flat and long production facilities in three countries. In

2021, shipments from ACIS totaled 10.4 million tonnes, with

shipments made on a worldwide basis. The raw material supply

of the ACIS operations includes sourcing from iron ore captive

mines in Kazakhstan and Ukraine and coal captive mines in

Kazakhstan.

Mining provides the Company's steel operations with high

quality and low-cost iron ore reserves and also sells mineral

products to third parties. Mining segment iron ore mines are

located in North America and Africa. In 2021, iron ore production

in the Mining segment totaled approximately 26.2 million tonnes.

Properties and capital expenditures

Property, plant and equipment

ArcelorMittal has steel production facilities, as well as iron ore

and coal mining operations, in North and South America,

Europe, Asia and Africa.

All of ArcelorMittal's operating subsidiaries are substantially

owned by ArcelorMittal through intermediate holding companies,

and are grouped into the five reportable segments described

above. Unless otherwise stated, ArcelorMittal owns all of the

assets described in this section. Regarding ArcelorMittal's iron

ore and coal mines, see also " Properties and capital

expenditures—Reserves and resources (iron ore and coal)"

below, where information is provided in accordance with

Regulation S-K 1300.

Management report

For further information on environmental issues that may affect

ArcelorMittal’s utilization of its assets, see “Business overview—

Government regulations”, "Business overview—Sustainable

development" and note 9.1 to ArcelorMittal’s consolidated

financial statements.

Steel production facilities of ArcelorMittal

The following table provides an overview by type of steel facility

of the principal production units of ArcelorMittal’s operations.

While all of the Group’s facilities are shown in the tables, only

the facilities of significant subsidiaries are described textually for

each segment. The facilities included in the tables are listed

from upstream to downstream in the steel-making process.

Facility 3

Number of

Facilities 3

Capacity (in million tonnes

per year)1, 3

Production in 2021

(in million tonnes)2, 3

Coke Oven Battery

25.8

19.3

Sinter Plant

76.9

53.8

Blast Furnace

64.6

49.5

Basic Oxygen Furnace (including Tandem Furnace)

66.9

52.5

DRI Plant

8.6

6.3

Electric Arc Furnace

24.9

16.5

Continuous Caster—Slabs

59.6

43.7

Hot Rolling Mill

53.8

37.5

Pickling Line

24.0

12.7

Tandem Mill

27.7

19.1

Annealing Line (continuous / batch)

12.9

6.7

Skin Pass Mill

11.8

5.3

Plate Mill

1.7

0.9

Continuous Caster—Bloom / Billet

31.5

22.3

Breakdown Mill (Blooming / Slabbing Mill)

6.0

1.8

Billet Rolling Mill

2.6

0.9

Section Mill

12.2

6.6

Bar Mill

7.8

6.3

Wire Rod Mill

10.5

7.4

Hot Dip Galvanizing Line

15.6

13.0

Electro Galvanizing Line

1.8

0.8

Tinplate Mill

2.4

1.4

Color Coating Line

2.8

1.9

Seamless Pipes

0.5

0.1

Welded Pipes

100

4.1

0.9

1.Reflects design capacity and does not take into account other constraints in the production process (such as, upstream and downstream bottlenecks and product mix

changes). As a result, in some cases, design capacity may be different from the current achievable capacity.

2.Production facility details include the production numbers for each step in the steel-making process. Output from one step in the process is used as input in the next step

in the process. Therefore, the sum of the production numbers does not equal the quantity of sellable finished steel products.

3.On April 14, 2021, ArcelorMittal derecognized assets and liabilities of ArcelorMittal Italia (subsequently renamed Acciaierie d'Italia) and accounted for its interest in the joint

venture under the equity method - see note 2.3.1 to the consolidated financial statements and “Introduction—Key transactions and events in 2021". The derecognition of

assets included one integrated plant, two downstream and three tubular facilities. The number of lines and their respective capacities, as well as their production up to

April 14, 2021 are not included in the table above.

Management report

Crude steel production by process and segment in 2021 (in million tonnes)

Segment

Basic oxygen furnace

Electric arc furnace

Total

NAFTA

3.1

5.4

8.5

Brazil

8.2

4.2

12.4

Europe1

30.4

6.4

36.8

ACIS

11.2

0.2

11.4

Total

52.9

16.2

69.1

1.Including ArcelorMittal Italia for the period from January 1, 2021 till April 14, 2021.

Blast furnace and electric arc furnace facilities

Segment

Blast furnaces

Electric arc furnaces

NAFTA

Brazil

Europe 1

ACIS

Total

1.Excluding the assets of ArcelorMittal Italia (subsequently renamed Acciaierie d'Italia), in particular four blast furnaces in Taranto.

NAFTA

Crude Steel

Unit

Country

Locations

Production in 2021

(in million tonnes per year)1

Type of plant

Products

ArcelorMittal Dofasco 2

Canada

Hamilton

2.8

Integrated, Mini-mill

Flat

ArcelorMittal Mexico 3, 4

Mexico

Lázaro Cárdenas,

Celaya

3.7

Mini-mill, Integrated,

and Downstream

Flat, Long/ Bar, Wire

Rod

ArcelorMittal Long Products Canada

Canada

Contrecoeur East,

West

2.0

Mini-mill

Long/ Wire Rod,

Bars, Slabs

ArcelorMittal Tubular Products

Canada

Brampton

n/a

Downstream

Pipes and Tubes

ArcelorMittal Tubular Products

Canada

London

n/a

Downstream

Pipes and Tubes

ArcelorMittal Tubular Products

Canada

Woodstock

n/a

Downstream

Pipes and Tubes

ArcelorMittal Tubular Products

Canada

Hamilton

n/a

Downstream

Pipes and Tubes

ArcelorMittal Tubular Products

USA

Shelby

n/a

Downstream

Pipes and Tubes

ArcelorMittal Tubular Products

USA

Marion

n/a

Downstream

Pipes and Tubes

ArcelorMittal Tubular Products

Mexico

Monterrey

n/a

Downstream

Pipes and Tubes

Captive mining operations

Unit

Country

Locations

ArcelorMittal

Interest (%)

Type of Mine

Product

ArcelorMittal Mexico (excluding

Peña Colorada)

Mexico

Sonora, Sinaloa and

Michoacán

100.0

Iron Ore Mine (open pit)

Concentrate, lump

and fines

ArcelorMittal Mexico Peña

Colorada

Mexico

Minatitlán

50.0

Iron Ore Mine (open pit)

Concentrate and

pellets

1.n/a = not applicable (no crude steel production).

2.ArcelorMittal Dofasco idled its BF #3 in April 2020 and permanently idled it in 2021. ArcelorMittal Dofasco also temporarily stopped its temper mill #2 in 2019 and

permanently idled it in 2021.

3.ArcelorMittal Mexico successfully performed hot commissioning of its new hot strip mill in December 2021 with ramp-up to full capacity expected during 2022.

4.ArcelorMittal Mexico permanently idled its coke plant in 2021.

Management report

ArcelorMittal Dofasco

ArcelorMittal Dofasco (“Dofasco”) is a leading North American

steel solution provider and Canada’s largest manufacturer of flat

rolled steels. Dofasco’s steel-making plant in Hamilton, Ontario

is adjacent to water, rail and highway transportation. The plant

uses both integrated and EAF-based steelmaking processes. Its

products include hot rolled, cold rolled, galvanized and tinplate.

Dofasco supplies these products to the automotive,

construction, packaging, manufacturing, pipe and tube and steel

distribution markets.

On July 30, 2021, ArcelorMittal announced with the Canadian

Government its intention for a CAD$1.8 billion investment in

decarbonization technologies at ArcelorMittal Dofasco’s plant in

Hamilton. The intended investments will reduce annual

CO2 emissions at ArcelorMittal’s Hamilton, Ontario operations

by approximately 3 million tonnes, which represents

approximately 60% of emissions. At the heart of the plan is a 2.5

million tonnes capacity DRI facility and an EAF facility capable

of producing 2.4 million tonnes of high-quality steel through its

existing secondary metallurgy and secondary casting facilities.

Modification of the existing EAF facility and continuous casters

will also be undertaken to align productivity, quality and energy

capabilities between all assets in the new footprint. The

investment was contingent on support from the governments of

Canada and Ontario. The Canadian Government announced on

July 30, 2021 that it would invest CAD$400 million in the project

and on February 15, 2022, the Government of Ontario

announced that it would invest CAD$500 million in the project.

This secures project funding and firms up the investment. The

project is scheduled to be complete by 2028, although the

Company is looking for opportunities to accelerate the project

timelines. Besides a considerable reduction of CO2 emissions,

the new manufacturing processes contribute deliver other

positive environmental impacts including the elimination of

emissions and flaring from coke making and ironmaking

operations. See also “Introduction—Key transactions and events

in 2021".

Two key investment projects are under implementation in

Dofasco: the hot strip mill modernization project (to install two

new state of the art coilers and runout tables to replace three

end of life coilers, as well as to upgrade the strip cooling

system) which is estimated to be completed in the first half of

2022 and the #5 CGL conversion to AluSi® project (addition of

up to 160 thousand tonnes per year Aluminum Silicon (AluSi®)

coating capability to #5 Hot-Dip Galvanizing Line for the

production of Usibor® steels) which is estimated to be

completed in 2022 with the first coil planned for the second half

of 2022.

ArcelorMittal Mexico

ArcelorMittal Mexico produces both flat and long steel products

and operates an integrated route and EAF route using DRI. It

produces higher quality slabs for use in specialized steel

applications in the automotive, line pipe manufacturing,

shipbuilding and appliance industries. It is also one of the

largest single rebar and wire rod production facilities in Mexico

and mainly uses the integrated route for steelmaking. The

facility is located in Lazaro Cardenas in the Michoacán state by

the Pacific coast and is highly accessible by ocean, rail, and

other means. It also operates a rebar mill at Celaya with billets

sourced from the Lazaro facility.

The new hot strip mill project which had commenced in the

fourth quarter of 2017 produced its first coils in December 2021

with ramp-up to full capacity expected during 2022.

ArcelorMittal Mexico Mining Assets

ArcelorMittal Mexico operates three iron ore mines in Mexico,

the San José and Las Truchas mines, and, through a joint

operation with Ternium S.A., the Peña Colorada mine. In 2019,

the El Volcan mine was closed and ArcelorMittal continues to

operate certain parts of the El Volcan facilities with material

coming from the San José mine. For further details on Mexico

mines production and other information, see "Properties and

capital expenditures—Reserves and Resources (iron ore and

coal)".

Peña Colorada

Consorcio Minero Benito Juarez Peña Colorada, S.A. de C.V.

(Peña Colorada), operates an open pit mine in the province of

Minatitlán in the northwestern part of the State of Colima,

Mexico. ArcelorMittal owns 50% of Peña Colorada and Ternium

S.A. owns the other 50% of the company.

Peña Colorada operates an open pit mine as well as a

concentrating facility and a two-line pelletizing facility. The

beneficiation plant is located at the mine, whereas the pelletizing

plant is located in Manzanillo. The magnetite concentrate

produced at the mine is shipped from Manzanillo to ArcelorMittal

Mexico, as well as to Ternium’s steel plants, by ship and by rail.

El Volcan & San José

ArcelorMittal operates the San José and El Volcan mines in the

state of Sonora, Mexico. The El Volcan mine stopped production

in April 2019 due to depletion of reserves, and mining is

continued from San José mine located approximately 40

kilometers from Culiacán City, in the south of the Sinaloa State.

The El Volcan facilities that are continuing to be used with

materials from the San José mine include the concentration

plant and port installations. Concentrate produced is transported

by rail to the Pacific port of Guaymas and then shipped to the

steel plant in Lázaro Cárdenas.

Las Truchas

ArcelorMittal operates the Las Truchas mine located

approximately 27 kilometers southeast of the town of Lázaro

Management report

Cárdenas in the State of Michoacán, Mexico. The concentrated

ore is pumped from the mine site through a slurry pipeline to the

steel plant facility in Lázaro Cárdenas.

In 2021, ArcelorMittal launched a project to increase pellet feed

production at Las Truchas mine to 2.3 million tonnes per annum

with DRI concentrate grade capability. Production is expected to

start in the second half of 2023.

ArcelorMittal Long Products Canada

ArcelorMittal Long Products Canada is the largest mini-mill in

Canada and has the flexibility to use either DRI or scrap,

depending on their respective economics. It produces wire rods,

wire products and bars, primarily sold in Canada and the United

States and principally serves the automotive, appliance,

transportation, machinery and construction industries. It also

produces slabs that are used within ArcelorMittal.

BRAZIL

Crude Steel

Unit

Country

Locations

Production in 2021

(in million tonnes per

year) 1

Type of plant

Products

Sol

Brazil

Vitoria

n/a

Coke-Making

Coke

ArcelorMittal Tubarão 2

Brazil

Vitoria

7.0

Integrated

Flat

ArcelorMittal Vega

Brazil

São Francisco do Sul

n/a

Downstream

Flat

ArcelorMittal Brasil

Brazil

João Monlevade

1.2

Integrated

Long/ Wire Rod

ArcelorMittal Brasil

Brazil

Juiz de Fora,

Piracicaba

2.0

Mini-mill

Long/ Bar, Wire Rod

ArcelorMittal Brasil 3

Brazil

Barra Mansa,

Resende

0.9

Mini-mill

Long/Rebar, Wire rod,

Bars, Sections, Wires

Acindar 4

Argentina

Villa Constitucion

1.3

Mini-mill

Long/ Wire Rod, Bar

ArcelorMittal Costa Rica

Costa Rica

n/a

Downstream

Long/ Wire Rod

Industrias Unicon

Venezuela

Barquisimeto,

Matanzas, La Victoria

n/a

Downstream

Pipes and Tubes

Captive mining operations

Unit

Country

Locations

ArcelorMittal

Interest (%)

Type of Mine

Product

ArcelorMittal Brasil Andrade Mine

Brazil

State of Minas Gerais

100.0

Iron Ore Mine (open pit)

Fines

ArcelorMittal Mineração Serra Azul

Brazil

State of Minas Gerais

100.0

Iron Ore Mine (open pit)

Lump and fines

1.n/a = not applicable (no crude steel production).

2.ArcelorMittal Tubarão completed the reline of its BF #2 in December 2019. The blast furnace remained idled due to market conditions until its restart in July 2020.

3.ArcelorMittal Brasil temporarily idled its electric arc furnaces #1 & #2, billet caster and long rolling mill #2 at Barra Mansa in February 2019 in response to market

conditions. Following Brazilian market recovery, it was decided to restart one of the two EAFs and the billet caster at Barra Mansa in the fourth quarter of 2021.

4.Acindar definitively discontinued operation of both hot dip galvanizing lines in the fourth quarter of 2021.

ArcelorMittal Brasil

ArcelorMittal Brasil produces both flat and long steel products.

Flat products are manufactured at ArcelorMittal Tubarão and

ArcelorMittal Vega. Its products include slabs, hot rolled coil,

cold rolled coil and galvanized steel, and serve customers in

automotive, appliances, construction and distribution segments.

The Tubarão complex uses the integrated steelmaking route to

produce slabs and rolling hot rolled coils and is strategically

located with access to the Praia Mole Marine Terminal as well

as road and railway systems. The Vega facility has cold rolling

and coating facilities and easy access to the port of São

Francisco do Sul. The expansion project is under execution in

Vega to provide additional 700 thousand tonnes of cold rolled

annealed and galvanized capacity with construction of a new

continuous annealing line and continuous galvanizing combiline

to serve the growing domestic market The project is expected

to be completed in the fourth quarter of 2023.

ArcelorMittal Brasil’s long products include wire rod and wire,

sections, merchant bars, special bars and rebars, for use in civil

Management report

construction, industrial manufacturing, agricultural and

distribution sectors. It produces transformed products including,

among others, welded mesh, trusses, annealed wire and nails. It

owns upstream and downstream steel facilities in Monlevade,

Juiz de Fora, Piracicaba, Barra Mansa and Resende and

operates an extensive distribution network across the country

selling to retail customers. It owns interests in two subsidiaries,

Belgo Bekaert Arames Ltda. ("BBA"), which manufactures wire

products for agricultural and industrial end-users, and Belgo-

Mineira Bekaert Artefatos de Arame Ltda., which produces steel

cords used in the tire industry. It also owns forests, and

ArcelorMittal Bioflorestas produces charcoal from eucalyptus

forestry operations that is used to fuel its furnaces in Juiz de

Fora and to exchange for pig iron with local producers.

The Monlevade upstream expansion project consisting of sinter

plant, blast furnace and meltshop and aiming at increase in

liquid steel capacity by 1 million tonnes per annum has

recommenced in late 2021. The project is expected to be

completed in the second half of 2024.

A new investment in sections mill with 400 thousand tonnes per

annum production capacity at Barra Mansa is expected to

commence in 2022 and be completed during the first quarter of

2024.

Acindar

Acindar is the largest long steel producer in Argentina. It

manufactures and distributes products to meet the needs of the

construction, industrial, and agricultural sectors. It produces

rebars, square, round, drawn and flat bars, meshes, nails,

preassembled and welded cages, structural sections, piles, wire

rod and barbed wire. It has an in-house distribution network that

serves end-users across Argentina.

ArcelorMittal Brasil - Andrade Mine

ArcelorMittal Brasil operates Andrade mine located

approximately 80 kilometers east of Belo Horizonte in the Minas

Gerais State of Brazil. In addition to the open pit mine,

ArcelorMittal operates a crushing and screening facility. Fine

material produced at the mine is transported to Monlevade

plant through a private railway line.

ArcelorMittal Brasil - Serra Azul Mine

ArcelorMittal Brasil operates Serra Azul mine located

approximately 50 kilometers southwest of the town of Belo

Horizonte in the Minas Gerais State of Brazil. ArcelorMittal

operates an open pit mine and a concentrating facility at the

site. Iron ore product is shipped mainly to the ArcelorMittal Brasil

integrated plants and to the local Brazilian market.

In 2021, ArcelorMittal launched an investment at Serra Azul

mine to construct facilities to produce 4.5 million tonnes per

annum of DRI quality pellet feed by exploiting compact itabirite

iron ore. Production is expected to start in the second half of

2023.

For further details on Brazil mines production and other

information, see "Properties and capital expenditures—

Reserves and Resources (iron ore and coal)".

Management report

EUROPE

Crude Steel

Unit

Country

Locations

Production in 2021

(in million tonnes per

year) 1

Type of plant

Products

ArcelorMittal Bremen

Germany

Bremen, Bottrop

3.3

Integrated

Flat, Coke

ArcelorMittal

Eisenhüttenstadt

Germany

Eisenhüttenstadt

1.9

Integrated

Flat

ArcelorMittal Belgium

Belgium

Ghent, Geel, Genk,

Liège

4.5

Integrated and

Downstream

Flat

ArcelorMittal France 4

France

Dunkirk,

Mardyck,

Montataire,

Desvres,

Florange, Mouzon,

Basse- Indre

5.9

Integrated and

Downstream

Flat

ArcelorMittal Méditerranée

France

Fos-sur-Mer,

Saint-Chély

3.4

Integrated and

Downstream

Flat

ArcelorMittal España

Spain

Avilés, Gijón, Etxebarri,

Lesaka, Sagunto

4.4

Integrated and

Downstream

Flat, Long, Rails, Wire Rod

ArcelorMittal Avellino &

Canossa 2

Italy

Avellino

n/a

Downstream

Flat

ArcelorMittal Poland 3

Poland

Kraków,

Swietochlowice,

Dabrowa Gornicza,

Chorzow,

Sosnowiec,

Zdzieszowice

4.0

Integrated and

Downstream

Flat, Long, Coke/ Sections,

Wire Rod, Sheet Piles,

Rails

ArcelorMittal Sestao

Spain

Bilbao

0.6

Mini-mill

Flat

Industeel

France,

Belgium

Charleroi, Le Creusot,

Chateauneuf,

Saint-Chamond,

Seraing, Dunkirk

0.4

Mini-mill and

Downstream

Flat

ArcelorMittal Belval &

Differdange

Luxembourg

Esch-Belval,

Differdange, Rodange

2.1

Mini-mill

Long/Sheet Piles, Rails,

Sections & Special

Sections

ArcelorMittal Olaberria-

Bergara

Spain

Olaberría, Bergara

1.1

Mini-mill

Long/ Sections

ArcelorMittal Gandrange

France

Gandrange

n/a

Downstream

Long/ Wire Rod, Bars

ArcelorMittal Warszawa

Poland

Warsaw

0.6

Mini-mill

Long/ Bars

ArcelorMittal Hamburg

Germany

Hamburg

0.9

Mini-mill

Long/ Wire Rods

ArcelorMittal Duisburg

Germany

Ruhrort, Hochfeld

1.0

Integrated

Long/ Billets, Wire Rod

ArcelorMittal Hunedoara

Romania

Hunedoara

0.2

Mini-mill

Long/ Sections

Sonasid

Morocco

Nador, Jorf Lasfar

0.6

Mini-mill

Long/ Wire Rod, Bars,

Rebars in Coil

ArcelorMittal Zenica

Bosnia and

Herzegovina

Zenica

0.8

Mini-mill /

Integrated

Long/ Wire Rod, Bars

ArcelorMittal Tubular

Products Roman SA 5

Romania

Roman

n/a

Downstream

Pipes and Tubes

ArcelorMittal Tubular

Products Iasi SA

Romania

Iasi

n/a

Downstream

Pipes and Tubes

ArcelorMittal Tubular

Products Karvina a.s. 6

Czech

Republic

Karvina

n/a

Downstream

Pipes and Tubes

Management report

EUROPE (continued)

Crude Steel

Unit

Country

Locations

Production in 2021

(in million tonnes per

year) 1

Type of plant

Products

ArcelorMittal Tubular Products

Kraków

Poland

Kraków

n/a

Downstream

Pipes and Tubes

ArcelorMittal Tubular Products

Hautmont

France

Hautmont

n/a

Downstream

Pipes and Tubes

ArcelorMittal Tubular Products

Vitry

France

Vitry

n/a

Downstream

Pipes and Tubes

ArcelorMittal Tubular Products

Chevillon

France

Chevillon

n/a

Downstream

Pipes and Tubes

ArcelorMittal Tubular Products

Lexy

France

Lexy, Rettel,Vincey,

Fresnoy-le-Grand

n/a

Downstream

Pipes and Tubes

Condesa Fabril 7

Spain

Legutiano

n/a

Downstream

Pipes and Tubes

Zalain Transformados 7

Spain

Zalain-Lesaka

n/a

Downstream

Pipes and Tubes

Perfiles de Precision 7

Spain

Berrioplano

n/a

Downstream

Pipes and Tubes

SRW Schwarzwälder

Röhrenwerk 7

Germany

Altensteig-Walddorf

n/a

Downstream

Pipes and Tubes

Captive mining operations

Unit

Country

Locations

ArcelorMittal

Interest (%)

Type of Mine

Product

ArcelorMittal Prijedor

Bosnia and

Herzegovina

Prijedor

51.0

Iron Ore Mine (open pit)

Concentrate and

lump

1.n/a = Not applicable (no crude steel production).

2.On April 14, 2021, ArcelorMittal derecognized assets and liabilities of ArcelorMittal Italia (subsequently renamed Acciaierie d'Italia) and accounted for its interest in the

joint venture under the equity method - see note 2.3.1 to the consolidated financial statements and “Introduction—Key transactions and events in 2021". The

derecognition of assets included one integrated plant, two downstream and three tubular facilities. Their production is not included in the table above.

3.The blast furnace, basic oxygen furnaces and slab caster at Kraków were temporarily idled in the fourth quarter of 2019 due to market conditions. On October 8, 2020,

ArcelorMittal Poland announced its intention to permanently close its primary steelmaking operations at its unit in Kraków (except the coke battery which remains in

operation), and the shutdown process in the blast furnace and the steel shop was completed in November 2020.

4.The coke oven battery in Florange was permanently closed in the second quarter of 2020. The new HDG 2 line (Galsa2) in Florange ramped up production in early

2020.

5.ArcelorMittal Tubular Products Roman decommissioned its seamless pipe mill #2 in 2020.

6.ArcelorMIttal Tubular Products Karvina decommissioned its welded pipe mill #9 in 2020 and launched a new pipe mill #12 in the fourth quarter of 2021.

7.In November 2021, ArcelorMittal concluded the acquisition of Grupo Condesa which consists of 4 production plants in Spain and Germany including 29 cold profiling and

welded pipe mills.

ArcelorMittal France

ArcelorMittal France has locations in Dunkirk, Mardyck,

Montataire, Desvres, Florange, Mouzon and Basse-Indre.

ArcelorMittal France produces and markets a large range of

products, including slabs, hot rolled, pickled, galvanized, color

coated and tin-plated coils. ArcelorMittal France’s products are

sold principally in the regional market in France and Western

Europe, particularly in the automotive and packaging market, as

well as the consumer goods industry. The Dunkirk site has

primary facilities and produces slabs as well as hot rolled coils

for other ArcelorMittal France sites. The Mardyck site has

finishing facilities and supplies the hot dip coating lines of

Montataire.

The Florange site supplies through its hot strip mill and 2 cold

rolling mills: the 2 hot dip lines of Florange (GALSA 1 & 2), the

continuous annealing of Florange, the hot dip coating lines of

Mouzon, as well as the tinplate facilities of Florange and Basse-

Indre. Mouzon is specialized in finishing hot dip coating

operations.

The Florange site has primary (hot strip mill) and finishing

facilities that are located mainly along the Fensch River in

Lorraine. The liquid phase of Florange has been idled since

October 2011 and the Company began the definitive closure

and dismantling of this facility in 2018. The finishing plant of

Management report

Florange idled one continuous annealing line in September

2013, a tinplate mill in January 2012 and an organic coating line

in June 2011. The Florange coke oven battery was permanently

closed in the second quarter of 2020.

The site of Basse-Indre is specialized in packaging activities. Its

pickling line and cold rolling mill are both idled since April 2014.

The sites of ArcelorMittal France produce and deliver a range of

flat steel high-value finished products to customers, including

cold rolled, hot dip galvanized, aluminized and organic coated

material, tinplate, draw wall ironed tinplate ("DWI") and tin free

steel. Certain of its products are designed for the automotive

market, such as Ultragal®, Extragal®, galfan, Usibor® (hot dip),

while others are designed for the appliances market, such as

Solfer® (cold rolled) for enameling applications.

On March 17, 2021, Air Liquide and ArcelorMittal signed a

memorandum of understanding with the objective of

implementing solutions to produce low-carbon steel in Dunkirk.

The companies will join forces to develop innovative solutions

involving low-carbon hydrogen and CO2 capture technologies,

using both Smart Carbon and Innovative DRI routes. The

objective of the project is to reduce yearly CO2 emissions from

ArcelorMittal’s steel-making facilities in Dunkirk by 2.85 Mt by

2030. The Company thereby confirmed its intention to

implement an innovative production unit on its Dunkirk site,

combining two steel production technologies – DRI: direct

reduced iron unit, and submerged arc furnace.

On February 4, 2022, ArcelorMittal announced plans for the

acceleration of its decarbonization plan with a €1.7 billion

investment in its Fos-sur-Mer and Dunkirk sites in France (while

maintaining equivalent production capacities), supported by the

French Government. This investment will enable a

transformation of steelmaking in France and a total reduction of

close to 40% or 7.8 million tonnes per annum in ArcelorMittal’s

CO2 emissions in France by 2030. Specifically, in Dunkirk,

ArcelorMittal will build a 2.5 million tonnes DRI unit to transform

iron ore using hydrogen instead of coal. This DRI will be coupled

with an innovative technology electric furnace and

complemented by an additional EAF. The new industrial facilities

will be operational starting in 2027 and will gradually replace 2

out of 3 of ArcelorMittal’s blast furnaces in Dunkirk by 2030, see

also “Introduction—Key transactions and events in 2021".

ArcelorMittal Belgium

ArcelorMittal Ghent

ArcelorMittal Ghent is a fully integrated steel plant which is

located along the Ghent-Terneuzen canal, approximately 17

kilometers from the Terneuzen sea lock, which links the works

directly with the North Sea. The canal is of the Panamax type

and can accommodate ships of up to 65,000 tonnes.

ArcelorMittal Ghent produces flat steel products with high added

value. A significant part of the production is coated, either by hot

dip galvanizing, electro galvanizing or organic coating.

ArcelorMittal Ghent also includes one organic coating line

located in Geel and one electro galvanizing line located in Genk.

ArcelorMittal Ghent’s products are mainly used in the

automotive industry and in household appliances, tubes,

containers, radiators and construction. In 2018, ArcelorMittal

Ghent invested €65 million in a new furnace at Sidgal 3 line to

produce Fortiform ® grades for automotives. The blow-in of

blast furnace B in Ghent occurred on March 1, 2021, after the

completion of the reline which commenced late August 2020.

ArcelorMittal is in process of constructing two industrial scale

plants at its site in Ghent in the frame of the Carbalyst and

Torero projects which are leveraging breakthrough smart carbon

technologies to enable use of circular carbon. Both projects are

in progress with commissioning expected before the end of

2022.

On September 28, 2021, ArcelorMittal announced that it had

signed a letter of intent with the Governments of Belgium and

Flanders, supporting a €1.1 billion project to build a 2.5 million-

tonne DRI plant and EAF facility at its site in Ghent, see

“Introduction—Key transactions and events in 2021" for further

information.

ArcelorMittal Liège

The finishing facilities of ArcelorMittal Liège are located west of

Liège. ArcelorMittal Liège produces a wide range of innovative

products to meet the demanding needs of companies in the

automotive industry and industrial domestic appliances. The

operating assets in Liège include the continuous annealing line

1, hot dip galvanizing line 7 (combiline) and line 8 (Eurogal), the

electrogalvanzing line 5, and the two organic coating lines 2 and

7 (combiline hot dip galvanizing line 7). It also includes the JVD

(Jet Vapor Deposition) line inaugurated on February 3, 2017.

This world-class innovative line coats moving strips of steel in a

vacuum chamber by vaporizing zinc onto the steel at high speed

to produce coated steels for automotive and other industrial

applications.

ArcelorMittal Bremen

ArcelorMittal Bremen is situated on the bank of the Weser River

north of Bremen, Germany. ArcelorMittal Bremen produces and

sells a wide range of products including slab, hot rolled, pickled,

Management report

cold rolled and hot dip galvanized rolls to the automotive and

primary transformation sectors.

On March 29, 2021, ArcelorMittal announced plans to build a

large-scale industrial plant for approximately 2 million tonnes

DRI, as well as a new EAF at the site of Bremen. It also

disclosed plans for an innovative DRI pilot plant and an EAF in

Eisenhüttenstadt, following the announcement of the planned

expansion of Germany’s hydrogen infrastructure. Using green

hydrogen, up to 3.5 million tonnes of steel could be produced by

the Bremen and Eisenhüttenstadt sites by 2030, with

significantly lower CO2 emissions, see also “Introduction—Key

transactions and events in 2021".

ArcelorMittal Méditerranée

ArcelorMittal Méditerranée operates a flat carbon steel plant in

Fos-sur-Mer. It also operates a finishing facility for electrical

steel located in Saint-Chély, 300 kilometers northwest of Fos-

sur-Mer. The Fos-sur-Mer plant is located 50 kilometers west of

Marseille on the Mediterranean Sea.

ArcelorMittal Méditerranée’s products include coils to be made

into wheels, pipes for energy transport and coils for finishing

facilities for exposed and non-exposed parts of car bodies, as

well as for the construction, home appliance, packaging, pipe

and tube, engine and office material industries. About 69% of its

products are shipped from a private wharf, in part through a

shuttle system and 24% of its products are shipped by rail, with

the remaining amount transported by truck.

The Saint-Chély plant produces electrical steel (with up to 3.2%

silicon content), mainly for electrical motors.

On February 4, 2022, ArcelorMittal announced plans for the

acceleration of its decarbonization plan in France. Specifically,

in Fos-sur-Mer, ArcelorMittal will build an EAF. This new unit will

complement the ladle furnace announced last March and

supported by France’s recovery plan, ‘France Relance’. The

new industrial facility will be operational starting in 2027 and will

gradually replace 1 out of 2 of ArcelorMittal’s blast furnaces in

Fos-sur-Mer by 2030. See also section 'ArcelorMittal France'

above.

ArcelorMittal España

ArcelorMittal España’s Avilés and Gijón facilities, which are by

far the largest of its facilities, are connected by ArcelorMittal

España’s own railway system. These two facilities operate as a

single integrated steel plant. The product range of ArcelorMittal

España includes rail, wire rod, heavy plates and hot rolled coil,

as well as more highly processed products such as hot dip and

electro galvanized sheet, tinplate and organic coated sheet. The

facilities are also connected by rail to the region’s two main

ports, Avilés and Gijón. Raw materials are received at the port of

Gijón, where they are unloaded at dedicated dry-bulk terminal,

which is linked to steel-making facilities by conveyor belt. A

variety of products are shipped through the Avilés port facilities

to other units of the Group and to ArcelorMittal España’s

customers.

ArcelorMittal España is connected to the other ArcelorMittal

facilities in Spain by wide-gauge and narrow-gauge rail

networks. Shuttle trains link the ArcelorMittal España facilities

directly to the ArcelorMittal Sagunto plant, which it supplies with

hot rolled coils for subsequent processing into cold rolled,

galvanized and electro galvanized sheet.

ArcelorMittal España production is primarily sold to the railway,

automotive and construction industries.

ArcelorMittal España’s Gijón coke plant was idled in 2013. On

September 23, 2015, ArcelorMittal announced an investment of

over €100 million in the refurbishment of the coke oven batteries

in Gijón. The main part of the approved investment focuses on

the reconstruction of two 45-oven batteries at ArcelorMittal

Asturias’ coke plant in Gijón, installation of a state-of-the-art

emission collection and scrubbing system, and implementation

of efficient by-product management systems. The refurbishment

work started in 2016. The refurbished coke oven battery number

1 in Gijón started its heating in the last quarter of 2019. The first

coke from coke oven battery #1 was produced at the beginning

of 2020. The start of the coke oven battery #2 was delayed due

to the COVID-19 crisis and the first coke was produced on

February 13, 2021. In October 2019, the coke oven batteries of

Aviles were decommissioned with the aim to be demolished and

their coke output was then supplied by the refurbished Gijón

coke batteries located near the two blast furnaces.

On February 17, 2021, the Company announced that

ArcelorMittal España had completed its coke-oven gas injection

project for Blast Furnace B in its Gijón plant, a strategic step to

reduce CO2 emissions and operational costs, thanks to lower

coke consumption.

On July 13, 2021, ArcelorMittal signed a memorandum of

understanding with the Spanish Government for a €1 billion

investment in decarbonization technologies at ArcelorMittal

Asturias’ plant in Gijón (Spain), which includes 2.3 million tonnes

new direct reduced iron ("DRI") and hybrid electrical arc furnace

("EAF") installations. The DRI installation in Gijón will also

enable ArcelorMittal Sestao to be the world’s first full-scale zero

carbon-emissions steel plant. By 2025, the Sestao plant – which

manufactures a range of flat steel products for the automotive

and construction sectors, and general industry – is expected to

produce 1.6 million tonnes of zero carbon-emissions steel. See

also “Introduction—Key transactions and events in 2021".

Management report

ArcelorMittal Poland

ArcelorMittal Poland is the largest steel producer in Poland.

ArcelorMittal Poland’s Zdzieszowice coke plant produces and

supplies coke to ArcelorMittal subsidiaries and third parties.

ArcelorMittal Poland produces a wide range of steel products,

including both long and flat products such as slabs, billets,

blooms, sections, sheet piles, rails up to 120 meters long,

railway accessories, mining supports sections, hot rolled coils,

sheets and strips, cold rolled coils, sheets and strips, hot dip

galvanized coils and sheets, wire rods and organic coated

sheets and coils. Products are mainly sold in the domestic

Polish market, while the remainder is exported, primarily to

customers located in other EU member states. ArcelorMittal

Poland’s principal customers are in the construction,

engineering, transport, mining and automotive industries. In the

fourth quarter of 2019, ArcelorMittal Poland temporarily idled its

blast furnace and steel plant in Kraków as a result of the market

downturn, high energy costs and large volumes of steel imports

from outside the EU. The coke plant in Kraków continues to

operate as well as the downstream operations (two rolling mills,

the hot dip galvanizing line and the new organic coating line).

The slabs for the rolling mills in Kraków will come mainly from

the steel shop in Dabrowa Gornicza where the Company is

investing in debottlenecking projects, and to produce special

grades for further processing into grain-oriented steel. On

October 8, 2020, ArcelorMittal Poland announced that it

intended to permanently close its primary steelmaking

operations (except the coke battery which remains in operation),

at its unit in Kraków, and the shutdown process in the blast

furnace and the steel shop was completed in November 2020.

ArcelorMittal Eisenhüttenstadt

ArcelorMittal Eisenhüttenstadt is situated on the Oder river near

the German-Polish border, 110 kilometers southeast of Berlin.

ArcelorMittal Eisenhüttenstadt is a fully integrated and highly-

automated flat steel producing plant. The facility is run with one

medium-sized blast furnace.

ArcelorMittal Eisenhüttenstadt produces and sells a wide range

of flat steel products, including hot rolled, cold rolled, electrical

and hot dip galvanized and organic coated coils to automotive,

distribution, metal processing, construction and appliances

industry customers in Germany, Central and Eastern Europe.

On March 29, 2021, ArcelorMittal announced plans for an

innovative DRI pilot plant and an EAF in Eisenhüttenstadt,

following the announcement of the planned expansion of

Germany’s hydrogen infrastructure. See section 'ArcelorMittal

Bremen' above.

ArcelorMittal Belval & Differdange

ArcelorMittal Belval & Differdange produces a wide range of

sections and sheets piles which are sold to the local European

construction market as well as for export. With its Rodange

facilities, it also produces a wide range of rails, special sections

and heavy angles.

On January 28, 2021, ArcelorMittal announced a collaboration

with Vow ASA (company listed on Oslo Stock Exchange and

specialized in world leading solutions to convert biomass and

waste into valuable resources) to build the first dedicated

industrial scale biogas plant for the steel industry at Rodange,

with the aim to start production in 2023. The plant will convert

sustainable biomass into biogas to replace the use of natural

gas at the plant’s rolling mill reheating furnace, so reducing CO2

emissions from the production of steel.

On October 21, 2021, a floating solar farm installed on a former

cooling pond belonging to ArcelorMittal Differdange was

commissioned. It consists of 25,000m2 of solar panels, with a

surface area of 5.7 hectares. Eventually, the electricity produced

will amount to 3 GWh/year and will be able to power nearly 800

local homes, which represents the annual electricity usage of

3,200 people. The electricity produced on the floating solar farm

will be fed into the local grid and contribute to Luxembourg’s

energy self-sufficiency.

ArcelorMittal Hamburg

ArcelorMittal Hamburg produces billet and high quality wire rod

and its production is mainly sold in the European market,

primarily to automotive and engineering customers.

The site of Hamburg already operates Europe’s only DRI-EAF

plant. A project is underway to construct a demonstrator plant in

order to test the ability of hydrogen to reduce iron ore into DRI

on an industrial scale, and to test carbon-free DRI in the EAF

steelmaking process. The objective is to reach industrial

commercial maturity of the technology by 2025, initially

producing 100,000 tonnes of sponge iron a year.

On September 7, 2021, the German Federal Government has

expressed its intention to provide €55 million of funding support

towards construction of the plant, which is half of the €110

million total capital expenditure required.

ArcelorMittal Olaberria-Bergara

The Olaberría-Bergara facilities produce billets and sections.

The Olaberría facility's production is sold to the local

construction market as well as for export, while the Bergara

facility’s production is sold primarily to the local European

construction market.

ArcelorMittal Duisburg

ArcelorMittal Duisburg produces blooms, billets, bars and high

quality wire rod and its production is mainly sold in the European

market primarily to automotive, railway and engineering

customers.

Management report

ArcelorMittal Downstream Solutions (AMDS)

The Europe segment also includes ArcelorMittal Downstream

Solutions (“AMDS”), which primarily covers the downstream

activities of ArcelorMittal in Europe. It provides distribution of

long and flat products as well as value-added and customized

steel solutions through further processing to meet specific

customer requirements. In addition, specific solutions are

dispatched through other business lines, primarily ArcelorMittal

Construction, ArcelorMittal Projects, ArcelorMittal Tubular

Products, ArcelorMittal Wire Solutions and ArcelorMittal

International.

AMDS also includes Industeel, with facilities in Belgium and in

France. Industeel Belgium and Industeel Creusot are designed

to produce special steel plates, ranging from 5 to 180

millimeters in thickness, including stainless steel products, while

Industeel Loire is dedicated to extra heavy gauge products of

alloyed carbon steel. Euroform operates hot forming facilities,

mainly to transform extra heavy gauge products received from

Industeel Loire. The R&D center in Le Creusot, France is fully

dedicated to special plate products development.

ArcelorMittal Prijedor

ArcelorMittal Prijedor is an iron ore open pit mining operation

located in Bosnia and Herzegovina, near the town of Prijedor.

The mine is a joint venture formed in 2004, in which

ArcelorMittal owns 51% and 49% are owned by the local Iron

Ore Mine Ljubija. The ore is excavated at the Omarska mine

and processed in the processing plant. The mine supplies its

final product, iron ore lumps and concentrate, to ArcelorMittal's

steel plant, ArcelorMittal Zenica, located approximately 250

kilometers from Prijedor in central Bosnia.

For further details on ArcelorMittal Prijedor mine production and

other information, see "Properties and capital expenditures—

Reserves and Resources (iron ore and coal)".

ACIS

Crude Steel

Unit

Country

Locations

Production in 2021

(in million tonnes per

year) 1

Type of plant

Products

ArcelorMittal Temirtau JSC

Kazakhstan

Temirtau

3.4

Integrated

Flat, Long, Pipes and

Tubes

ArcelorMittal Kryvyi Rih 2

Ukraine

Kryvyi Rih

4.9

Integrated

Long

ArcelorMittal South Africa 3

South Africa

Vanderbijlpark, Saldanha,

Newcastle, Vereeniging,

Pretoria

3.1

Integrated Mini-

mill Downstream

Flat, Long, Pipes and

Tubes

JSC ArcelorMittal Tubular

Products Aktau

Kazakhstan

Aktau

n/a

Downstream

Pipes and Tubes

Captive mining operations

Unit

Country

Locations

ArcelorMittal

Interest (%)

Type of Mine

Product

ArcelorMittal Kryvyi Rih

Ukraine

Kryvyi Rih

95.1

Iron Ore Mine (open pit and

underground)

Concentrate, lump

and sinter feed

ArcelorMittal Temirtau

Kazakhstan

Lisakovsk, Kentobe,

Atasu, Atansore

100.0

Iron Ore Mine (open pit and

underground)

Concentrate, lump

and fines

ArcelorMittal Temirtau

Kazakhstan

Karaganda

100.0

Coal Mine (underground)

Coking coal and

thermal coal

1.n/a = not applicable (no crude steel production).

2.ArcelorMittal Kryvyi Rih commissioned its new billet caster #3 in June 2019 and new billet caster #2 in the first quarter of 2020. The blast furnace #5, open hearth shop,

blooming shop #1 and wire rod mill #250-3 were definitively closed in 2020. In June 2021, ArcelorMittal Kryvyi Rih restarted its BF #8 which had been temporarily idled in

October 2019 for planned maintenance and in response to market conditions.

3.ArcelorMittal South Africa temporarily idled some of its downstream production lines at Vanderbijlpark (batch annealing lines, continuous annealing line, temper mills and

the tinning line) in the course of 2019; the lines were definitively closed in 2020. ArcelorMittal South Africa permanently closed its Saldanha operations in the second

quarter of 2020. Furthermore, in 2020 ArcelorMittal South Africa permanently closed the bar mill (16 inch) at Vereeniging, as well as the coke oven battery #5 within the

Coke and Chemicals division.

Management report

ArcelorMittal South Africa

ArcelorMittal South Africa is the largest steel producer in Africa

and its common shares are listed on the JSE Limited in South

Africa under the symbol “ACL”. ArcelorMittal South Africa has

four main steel production facilities of which Vanderbijlpark,

Newcastle and Vereeniging (melt shop restarted in January

2019) are located inland, while Saldanha (permanently closed in

the second quarter of 2020) is close to a deep-water port. A

metallurgical by-products division (Coke and Chemicals) was

reorganized (after closure of coke oven battery #5 in Pretoria in

the fourth quarter of 2020) and is now split in two operations:

coke-making and by-products at the steel production facilities

(Vanderbijlpark and Newcastle). ArcelorMittal South Africa has a

diversified range of products and includes hot rolled plates and

sheet in coil form, cold rolled sheet, coated sheet, wire rod and

sections, as well as forgings. During 2021, 87.8% of its products

were sold in the South African domestic market, while Africa is

its largest export market. It also sells into Asia and sells minor

tonnages into Europe and the Americas.

Due to temporary shipments backlogs encountered in 2021,

ArcelorMittal South Africa decided that the electric arc furnace at

Vereeniging, which had been scheduled to be placed under care

and maintenance in the third quarter of 2020 along with

Saldanha operations, would continue to operate for the

foreseeable future in support of long steel supply.

The Thabazimbi Iron Ore Mine (Pty) Ltd, located at Thabazimbi,

in the Limpopo Province of South Africa, was taken over by

ArcelorMittal South Africa in 2018. Thabazimbi Iron Ore Mine

currently processes existing stockpiles of iron ore from a run of

mine nature (unbeneficiated) and old plant discard dumps with

recoverable iron, with the aim to supply product to the

Vanderbijlpark Steel Works.

ArcelorMittal Kryvyi Rih

ArcelorMittal Kryvyi Rih’s product range includes billets, rebars

and wire rods, light sections (angles) and merchant bars

(rounds, squares and strips). Its products are sold to a range of

industries such as hardware, construction, re-rolling and

fabrication. The markets for its products include Ukraine, CIS

and Russia, North West and East Africa, Middle East and Gulf

countries, Europe, Latin America and South East Asia.

In addition, ArcelorMittal Kryvyi Rih includes an export sales

network which supplies a complete range of steel products not

only from Kryvyi Rih but also from other plants of the Group to

customers outside of their respective home markets.

ArcelorMittal Kryvyi Rih is investing in new pellet plant facilities

to produce 5 million tonnes per annum of pellets, replacing two

existing sinter plants and ensuring environmental compliance.

First pellet is estimated to be produced in the fourth quarter of

2023.

ArcelorMittal Kryvyi Rih also has iron ore captive mines located

roughly within the borders of the city of Kryvyi Rih, Ukraine.

ArcelorMittal Kryvyi Rih operates a concentrating facility, along

with two open pit sites and one underground iron ore mine. The

iron ore extracted from the Kryvyi Rih mining operations is

processed to concentrate, sinter feed and lumps and supplied

primarily to the ArcelorMittal Kryvyi Rih steel plant, with some

concentrate being shipped to other ArcelorMittal entities in

Eastern Europe, as well as to third parties. For further details on

Ukraine mines production, other information and recent updates,

see "Properties and capital expenditures—Reserves and

Resources (iron ore and coal)" and "Key transactions and

events in 2021 — Recent developments".

ArcelorMittal Temirtau

ArcelorMittal Temirtau’s product range of flat and long steel

products includes pig iron, continuous caster slabs, continuous

caster billets, hot and cold rolled coils and sheets, black plates,

covers, tin plates, hot dipped galvanized products, color coated

products, welded pipes and rebars.

ArcelorMittal Temirtau sells steel products to a range of

industries, including the tube- and pipe-making sectors, as well

as manufacturers of consumer goods and appliances. The

markets for its products include Kazakhstan, CIS, Russia and

South-East Asia.

ArcelorMittal Temirtau has four captive iron ore mining

operations in Kazakhstan, named Lisakovsk, Kentobe, Atasu

and Atansore. Concentrate, lumps and fines produced at the

mines are transported to the ArcelorMittal steel plant by railway.

Lisakovsk is an open pit operation located in northwest

Kazakhstan about 1,100 kilometers from Temirtau. The mine

was acquired by ArcelorMittal in 2000 and treats oolite iron ore

to produce concentrate which is supplied to ArcelorMittal

Temirtau steel plant, the phosphorous content in the iron

mineralization at Lisakovsk limits its utilization in the steel-

making process.

Kentobe is an open pit operation, acquired by ArcelorMittal in

2002, located about 300 kilometers southeast of Temirtau, the

mineralization at Kentobe is magnetite, which is after mining

treated in processing plant located at the site before sending it

to the customer.

Atasu is an underground mine operation located about 400

kilometers south/southwest from Temirtau. The mining lease

was obtained by ArcelorMittal in 2003. The Atasu mine is hosted

by the West Karazhal deposit, which is a primary hematite ore.

In addition to the underground mine, Atasu operates a

processing plant.

Atansore is an open pit operation located about 500 kilometers

northeast of Temirtau, acquired by ArcelorMittal in 2004. The

Management report

primary ore mined at the site is magnetite, which is treated at

the dry processing facility at the site, prior to its transportation by

rail to the customer.

In addition, ArcelorMittal Temirtau has eight captive underground

coal mines located in Karaganda in Kazakhstan, named

Kostenko, Kuzembaeva, Saranskaya, Abayskaya,

Kazakhstanskaya, Lenina, Shakhtinskaya and Tentekskaya and

operates two coal preparation plants (CPP “Vostochnaya” and

Temirtau Washery-2). In 1996, the mines entered into the

structure of Ispat-Karmet JSC, Coal Division (now ArcelorMittal

Temirtau JSC, Coal Division). The coal mines of ArcelorMittal

Temirtau are located in the Karaganda Coal Basin.

The mines produce primarily metallurgical coal used in steel-

making at ArcelorMittal Temirtau. Surplus coal concentrate is

supplied to ArcelorMittal Kryvyi Rih in Ukraine, and to external

customers in Russia and China.For further details on

Kazakhstan mines production and other information, see

"Properties and capital expenditures—Reserves and Resources

(iron ore and coal)".

Mining

ArcelorMittal’s Mining segment has iron ore production facilities

in Canada and Liberia. The following table provides an overview

by type of facility of ArcelorMittal’s principal mining operations.

For detailed information regarding ArcelorMittal's Mining

segment and captive mines, see " Properties and capital

expenditures—Reserves and Resources (iron ore and coal)".

Unit

Country

Locations

ArcelorMittal

Interest (%)

Type of Mine

Product

Iron Ore

AMMC

Canada

Mt Wright, Fire Lake

and Port Cartier, Qc

85.0

Iron Ore Mine (open pit),

pellet plant, railway and port

Concentrate and

pellets

AML

Liberia

Yekepa

85.0

Iron Ore Mine (open pit)

Fines

Investments in joint ventures

Unit

Country

Locations

Capacity in 2021

(in million tonnes per

year)

Type of plant

Products

AMNS India

India

Hazira, Gujarat

8.8 1

Integrated

Flat

Acciaierie d'Italia

Italy

Taranto, Genova, Novi

Ligure, Socova,

Raconiggi,

Salerno

7.8 1, 2

Integrated and

Downstream

Flat, Pipes and Tubes

AMNS Calvert

United States

Calvert

5.3 3

Steel processing

Steel finishing

VAMA

China

Loudi, Hunan

1.5 4

Steel processing

Automotive steel

finishing

1.Crude steel capacity.

2.Reflects design capacity, whereas achievable capacity is limited to 6 million tonnes until completion of the environmental plan.

3.Flat-rolled carbon steel products production capacity.

4.Cold rolled coils, aluminized coils, hot dip galvanized coils production capacity.

AMNS India

On December 11, 2019, following the unconditional approval

received by the Indian Supreme Court of ArcelorMittal's

Resolution Plan for Essar Steel India Limited ("ESIL"

subsequently renamed AMNS India) on November 15, 2019,

ArcelorMittal and NSC, Japan’s largest steel producer and the

third largest steel producer in the world, created a joint venture

to own and operate AMNS India with ArcelorMittal holding a

60% interest and NSC holding 40% in accordance with the

second amended joint venture formation agreement signed on

December 8, 2019.

AMNS India is an integrated flat steel producer, and the largest

steel company in western India. AMNS India’s main steel

manufacturing facility is located at Hazira, Gujarat in western

India. It also has:

–two iron ore beneficiation plants close to the mines in

Kirandul and Dabuna, with slurry pipelines that then

transport the beneficiated iron ore slurry to the pellet plants

in the Kirandul-Vizag and Dabuna-Paradeep systems;

Management report

–a downstream facility in Pune (including a pickling line, a

cold rolling mill, a galvanizing mill, a color coating mill and a

batch annealing plant); and

–six service centers in the industrial clusters of Hazira,

Indore, Bahadurgarh, Chennai, Kolkata and Pune. It has a

complete range of flat rolled steel products, including value

added products, and significant iron ore pellet capacity with

two main pellet plant systems in Kirandul-Vizag and

Dabuna-Paradeep, which have the potential for expansion.

Its facilities are located close to ports with deep draft for

movement of raw materials and finished goods.

In terms of iron ore pellet capacity, the Kirandul-Vizag system

has 8 million tonnes of annual pellet capacity; and the Dabuna-

Paradeep system has 12 million tonnes of annual pellet

capacity, following completion of expansion early September

2021. This expansion brings pellet capacity above AMNS India’s

own requirements and provide the opportunity to improve

operating income by fully utilizing such pellet capacity. AMNS

India has also made acquisitions of certain ancillary assets

including the Thakurani iron ore block in Keonjhar district of

Odisha (operation reached full capacity at the end of the first

quarter of 2021) acquired in February 2020, Odisha Slurry

Pipeline Infrastructure Limited in July 2020 which secured an

important infrastructure asset for raw material supply to the

Paradeep pellet plant and Hazira steel plant and a captive

power plant at Paradeep in Orissa in January 2021. In

September 2021, AMNS India also commenced mining

operations at its Ghoraburhani-Sagasahi iron ore block in

Odisha. AMNS India also intends to debottleneck the existing

operations (steel shop and rolling parts) to increase production

to 8.8 million tonnes of rolled products. Over the next 5 years,

the production capacity at the Hazira facility is planned to

increase further from 8.8 million tonnes to 14.4 million tonnes of

rolled products following the construction of coke oven, sinter

plant, blast furnace, basic oxygen furnace and hot strip mill.

Finally, AMNS India is evaluating downstream auto product

expansion at the Hazira site to improve its product portfolio and

serve the growing automotive demand in India.

On March 4, 2021, AMNS India and the Odisha government

signed a memorandum of understanding for setting up a 12

million tonne integrated steel plant and a jetty in Kendrapara

district of Odisha with an investment of INR 50,000 Crore,

subject to several pre-conditions, including making provisions

for land and iron ore mines. A pre-feasibility study report was

submitted to the state government in the third quarter of 2021,

and AMNS India is currently engaged in further studies and

clearances.

In the context of the creation of the joint venture, the Company

has also transferred certain payments it had been required to

make in 2018 and 2019 to the financial creditors of Uttam Galva

in order that the Resolution Plan would be eligible for

consideration by ESIL's Committee of Creditors. On June 2,

2021, Uttam Galva's Committee of Creditors approved the

resolution plan submitted by AMNS India. The resolution plan

has been submitted for approval to the National Company Law

Tribunal ("NCLT").

The joint venture partners continue to assess various options to

secure the availability of additional ancillary assets, such as port

facilities.

The Resolution Plan for ESIL includes a capital expenditure plan

of approximately $2.6 billion to be implemented in two stages

over six years. The first stage is completed and involved

investments to increase the production of finished steel goods

sustainably to 6.5 million tonnes per annum. It included

completion of ongoing capital expenditure projects with respect

to a coke oven, second sinter plant, third line CSP caster,

Paradeep pellet plant and Dabuna beneficiation plant. The first

stage also includes investment in maintenance to restore

current assets, the implementation of an environmental

management plan and the implementation of ArcelorMittal’s best

practices on raw material sourcing, plant operations, sales and

product mix (in particular through greater sophistication of the

quality and markets of the steel produced with a focus on

developing sales to the automotive industry), people

management and health & safety. The second stage will involve

investments to increase the production of finished steel goods

from 6.5 million tonnes per annum to 8.5 million tonnes per

annum by the end of 2024, including asset reconfiguration and

the addition of a coke oven, blast furnace and basic oven

furnace.

In terms of mining assets, AMNS India operates the Thakurani

mine and the Ghoraburhani-Sagasahi mine at exploration stage

in the Keonjhar district of Odisha and in the Sudargarh district of

Odisha, respectively, in India. AMNS India started mining at the

Thakurani mine in 2020 and concentrated material is

transported by pipeline to the Paradeep pellet plant, located on

the coast at Bay of Bengal. AMNS India announced the

commencement of operations at the Ghoraburhani-Sagasahi

iron ore mine. The captive mine is set to produce more than 2

million tonnes of high-quality iron ore in 2022 and gradually

ramp up production to a rated capacity of 7.2 million tonnes per

annum. The iron ore will be supplied to the beneficiation plant in

Dabuna from where the feed will reach the pellet plant at

Paradeep and contribute significantly to meeting AMNS India’s

long-term raw material requirements. For further details on

Indian mines production and other information, see "Properties

and capital expenditures—Reserves and Resources (iron ore

and coal)".

Management report

Acciaierie d'Italia

Acciaierie d'Italia, a joint venture between the Company and

Invitalia-Agenzia nazionale per l'attrazione degli investimenti e

lo svliuppo d'impresa SpA ("Invitalia"), an Italian state-owned

company, is the leading steel producer in Italy, Europe’s second

largest steel consuming economy. Acciaierie d'Italia produces

high-quality and sustainable steel to be used in a range of vital

industry sectors across the domestic steel market such as

construction, energy, automotive, home appliances, packaging

and transport and for international export. Acciaierie d'Italia has

operations across various structurally linked operating sites

including Europe’s biggest single-site integrated steel facility in

Taranto and rolling mills in Genoa and Novi Ligure. Genoa is

also an important hub in terms of intermodal logistics.

On April 14, 2021, pursuant to the investment agreement of

December 10, 2020 forming a public-private partnership

between Invitalia and AM InvestCo Italy SpA ("AM InvestCo",

thereupon renamed Acciaierie d'Italia Holding), ArcelorMittal's

subsidiary party to the lease and purchase agreement for the

Ilva business, Invitalia invested €400 million ($476 million) of

new equity into AM InvestCo, providing Invitalia with a 38%

shareholding, equal (50%) voting and governance rights and

therefore joint control. Accordingly, as of April 14, 2021, the

Company derecognized assets and liabilities of Acciaierie

d'Italia Holding and its subsidiaries from its consolidated

statement of financial position and accounted for its 62%

interest in the joint venture under the equity method. The

investment agreement stipulates a second equity injection by

Invitalia, of up to €680 million, to fund the completion of the

purchase of Ilva’s business by Acciaierie d'Italia Holding, subject

to certain conditions precedent to be met by May 2022. At this

point, Invitalia’s shareholding in Acciaierie d'Italia would increase

to 60%. ArcelorMittal may need to invest up to €70 million to the

extent necessary to retain a 40% shareholding and joint control

over the company. For more details, see “Introduction—Key

transactions and events in 2021" and "Introduction—Risk

factors".

The industrial plan agreed between ArcelorMittal and Invitalia in

connection with the December 2020 investment agreement

involves investment in lower-carbon steelmaking technologies,

including the construction of a 2.5 million tonne electric arc

furnace, which is expected to open in mid-2024, and the relining

of BF #5, which is expected to start production in 2024. This

industrial plan targets reaching 8 million tonnes of production in

2025 (crude steel production is limited to 6 million tonnes until

the environmental plan is completed). It integrates a series of

public support measures including ongoing government funded

employment support and includes, for the period between 2021

and 2025, environmental capital expenditures of €117 million

and industrial capital expenditures of €957 million as well as

capital expenditures of €226 million for the revamp of blast

furnace #5 and €260 million for the construction of the EAF.

Calvert

AMNS Calvert ("Calvert"), a joint venture between the Company

and NSC, is a steel processing plant in Calvert, Alabama, United

States. It's 2,500 acre property layout allows for optimal product

flow and room to expand. It has a HSM with 5.3 million tonnes

capacity, pickling and cold rolling facilities with 3.6 million tonnes

capacity and finishing facilities with a total capacity of 2.1 million

tonnes. Calvert had a 6-year agreement to purchase 2 million

tonnes of slabs annually from ThyssenKrupp Steel USA ("TK

CSA"), subsequently acquired by Ternium S.A. in December

2017, an integrated steel mill complex located in Rio de Janeiro,

Brazil, using a market-based price formula. The slab purchase

agreement with Ternium S.A was.finished with last purchases

concluded in May 2021. The remaining slabs for Calvert's

operations are sourced from ArcelorMittal plants in Brazil and

Mexico and from ArcelorMittal USA, which following the

divestment to Cleveland-Cliffs, entered on December 9, 2020

into a new five year agreement with Calvert (with an automatic

three year extension unless either party provides notice of intent

to terminate) for 1.5 million tons annually for the initial term and

0.55 million tons annually under the extension and which, in

each case, can be reduced with a six month notice. ArcelorMittal

is principally responsible for marketing the product on behalf of

the joint venture. Calvert serves the automotive, construction,

pipe and tube, service center and appliance/ HVAC industries.

Calvert plans to invest $775 million for an on-site steelmaking

facility through a 1.5 million tonnes capacity EAF (produce slabs

for the existing operations, replacing part of the purchased

slabs). Construction commenced in March 2021 after obtaining

all environmental permits, and the facility is expected to start in

the first half of 2023. Equipment manufacturer selection is

concluded, site preparation, underground electrical works and

piling activities are underway. The plan includes an option to

add further capacity of 1.5 million tonnes at lower capital

expenditure intensity.

VAMA

Valin ArcelorMittal Automotive Steel (“VAMA”) is a joint venture

between ArcelorMittal and Hunan ValinSteel Co., Ltdwhich

produces steel (1.5 million tonne capacity) for high-end

applications in the automotive industry. VAMA supplies

international automakers and first-tier suppliers as well as

Chinese car manufacturers and their supplier networks. It is well

positioned to take advantage of the growing electric vehicle

market and plans to complete its project to increase capacity to

2 million tonnes by the end of 2022 with self-funded expansion

capital expenditures expected to be $165 million.

Management report

Capital expenditures

The Company’s capital expenditures were $3.0 billion, $2.4 billion and $3.6 billion for the years ended December 31, 2021, 2020 and

2019, respectively.

The following tables summarize the Company’s principal growth and optimization projects involving significant capital expenditures

completed in 2021 and those that are currently ongoing. In 2022, capital expenditures are expected to be approximately $4.5 billion.

ArcelorMittal expects to fund these capital expenditures primarily through internal sources. See “Operating and financial review—

Liquidity and capital resources—Sources and uses of cash—Net cash used in investing activities” and note 3.1 to the consolidated

financial statements for further information, including capital expenditures by segment.

Completed projects

Segment

Site / Unit

Project

Capacity / particulars

Key date /

Forecast

completion

Note #

NAFTA

Mexico

New Hot Strip Mill

Production capacity of 2.5 million tonnes per year

2021

Ongoing Projects*

Segment

Site / Unit

Project

Capacity / particulars

Key date /

Forecast

completion

Note #

NAFTA

ArcelorMittal

Dofasco (Canada)

Hot strip mill modernization

Replace existing three end of life coilers with two

state of the art coilers and new runout tables

H1 2022

NAFTA

ArcelorMittal

Dofasco (Canada)

#5 CGL conversion to AluSi®

Addition of up to 160 thousand tonnes per year

Aluminum Silicon (AluSi®) coating capability to #5

Hot-Dip Galvanizing Line for the production of

Usibor® steels

H2 2022

Brazil

ArcelorMittal Vega

Do Sul

Expansion project

Increase hot dipped / cold rolled coil capacity and

construction of a new 700 thousand tonne

continuous annealing line ("CAL") and continuous

galvanizing line ("CGL") combiline

Q4 2023

Mining

Liberia

Phase 2 premium product

expansion project

Increase production capacity to 15 million tonnes per

year

Q4 2023

NAFTA

Las Truchas mine

(Mexico)

Revamping and capacity

increase to 2.3 million tonnes

per year

Revamping project with 1 million tonnes per year

pellet feed capacity increase (to 2.3 million tonnes

per year) with DRI concentrate grade capability

H2 2023

Brazil

Serra Azul mine

4.5 million tonnes per year

direct reduction pellet feed

plant

Facilities to produce 4.5 million tonnes per year DRI

quality pellet feed by exploiting compact itabirite

iron ore

H2 2023

Brazil

Monlevade

Sinter plant, blast furnace

and melt shop

Increase in liquid steel capacity by 1 million tonnes

per year; sinter capacity of 2.3 million tonnes per

year

H2 2024

ACIS

ArcelorMittal Kryvyi

Rih (Ukraine)

New pellet plant

Facilities to produce 5.0 million tonnes per year

pellets, replacing two existing sinter plants ensuring

environmental compliance and improving

productivity

Q4 2023

Brazil

Barra Mansa

New section mill

Increase capacity of HAV bars and sections by 0.4

million tonnes per year

Q1 2024

* Ongoing projects refer to projects for which construction has begun (excluding various projects that are under development), even if such projects have

been placed on hold pending improved operating conditions.

a.On September 28, 2017, ArcelorMittal announced a major $1 billion investment program at its Mexican operations, which is focused on building

ArcelorMittal Mexico’s downstream capabilities, sustaining the competitiveness of its mining operations and modernizing its existing asset base. The

program is designed to enable ArcelorMittal Mexico to meet the anticipated increased demand requirements from domestic customers, realize in full

ArcelorMittal Mexico’s production capacity of 5.3 million tonnes and significantly enhance the proportion of higher added-value products in its product

mix. The main investment will be the construction of a new hot strip mill ("HSM"). Upon completion, the project will enable ArcelorMittal Mexico to

produce approximately 2.5 million tonnes of flat rolled steel, approximately 1.5 million tonnes of long steel and the remainder made up of semi-

finished slabs. Coils from the new hot strip mill will be supplied to domestic, non-auto and general industry customers. The hot strip mill project

commenced at the end of the fourth quarter of 2017 and the first coils were produced at the end of 2021 with ramp up expected to full capacity

Management report

100

during 2022. The hot skin pass mill ("HSPM") is expected to be completed in the second half of 2022. In addition to the HSM project, a push-pull

pickling line ("PPPL") is to be constructed to capture additional domestic volume through hot rolled pickled and oiled products. The PPPL has a

capacity of up to 0.75 million tonnes per year and the first pickled and oiled coils are expected to be produced by the second half of 2024.

b.Investment in ArcelorMittal Dofasco (Canada) to modernize the hot strip mill. The project is to install two new state of the art coilers and runout tables

to replace three end of life coilers. The strip cooling system will be upgraded and include innovative power cooling technology to improve product

capability. The project is estimated to be completed in the first half of 2022.

c.Investment to replace #5 Hot-Dip Galvanizing Line Galvanneal coating capability with 160 thousand tonnes per year Aluminum Silicon (AluSi®)

capability for the production of ArcelorMittal’s patented Usibor® Press Hardenable Steel for automotive structural and safety components. With this

investment, ArcelorMittal Dofasco will become the only Canadian producer of AluSi® coated Usibor® and it complements additional strategic North

America developments, including a new EAF and caster at Calvert in the US and a new hot strip mill in Mexico, and will allow to capitalize on

increasing Auto Aluminized PHS demand in North America. The project is expected to be completed in 2022, with the first coil planned for the second

half of 2022.

d.In February 2021, ArcelorMittal announced the resumption of the Vega Do Sul expansion to provide an additional 700 thousand tonnes of cold rolled

annealed and galvanized capacity to serve the growing domestic market. The approximately $0.35 billion investment program to increase rolling

capacity with construction of a new continuous annealing line and CGL combiline (and the option to add approximately 100 thousand tonnes organic

coating line to serve construction and appliance segments) will upon completion strengthen ArcelorMittal’s position in the fast growing automotive

and industry markets through AHSS products. The investment will look to facilitate a wide range of products and applications whilst further optimizing

current ArcelorMittal Vega facilities to maximize site capacity and its competitiveness, considering comprehensive digital and automation technology.

Equipment delivery is progressing in accordance with plan. Civil works and erection of acid regeneration plant and repair and inspection line is well

advanced. The project is estimated to be completed in the fourth quarter of 2023.

e.ArcelorMittal Liberia has been operating a 5 million tonnes DSO since 2011 (Phase 1). In 2013, the Company had started construction of a Phase 2

project that envisaged the construction of 15 million tonnes per year of concentrate sinter fines capacity and associated infrastructure; this project

was then suspended due to the onset of Ebola in West Africa and the subsequent force-majeure declaration by the onsite contracting companies. On

September 10, 2021, ArcelorMittal signed with the Government of the Republic of Liberia an amendment to its MDA which is currently under

legislative ratification process. Final detailed engineering is in progress, whilst site preparation and tenders for key construction contracts and

remaining equipment are underway. Under this project, first concentrate product is expected in late 2023, ramping up to 15 million tonnes per year

thereafter. The capital expenditures required to conclude the project, estimated at approximately $0.8 billion, is under review given impacts of

inflation and enlarged scope. Under the agreement, the Company has further expansion opportunities up to 30 million tonnes per year. Other users

may be allowed to invest for additional rail capacity.

f.ArcelorMittal Mexico is investing approximately $150 million to increase pellet feed production by 1 million tonnes per year to 2.3 million tonnes per

year and improve concentrate grade in Las Truchas. This project will enable concentrate production to the blast furnace route (2,0 million tonnes per

year) and DRI route (0.3 million tonnes per year) for a total of 2.3 million tonnes per year. Primary target is to supply ArcelorMittal Mexico steel

operations with high quality feed. Procurement of long lead time items (mills and pumps) and early works have started. Detailed engineering is

ongoing. Road works are in progress. Production start-up is estimated in the second half of 2023.

g.Approximately $350 million investment at Serra Azul (Brazil) to construct facilities to produce 4.5 million tonnes per year of DRI quality pellet feed to

primarily supply ArcelorMittal Mexico steel operations. The project will allow to mine the compact itabirite iron ore. Environmental and operations

licenses have been cleared. Detailed engineering is ongoing, hiring of drilling companies and procurement of main equipment is initiated. Project

start up is estimated in the second half of 2023.

h.The Monlevade upstream expansion project consisting of the sinter plant, blast furnace and meltshop has recommenced in late 2021, following the

anticipated improvement in Brazil domestic market. Basic engineering is being finalized and hiring of civil works and piling companies has started.

The project is estimated to be completed in the second half of 2024 with a capital expenditure requirement of approximately $0.5 billion.

i.Investment in ArcelorMittal Kryvyi Rih to build a new 5.0 million tonnes per year pellet plant which, together with the ongoing modernization of Sinter

Plant 2, will ensure that all sinter operations in Kryvyi Rih are compliant with dust emissions environmental regulations and will enable cost reduction,

quality and productivity improvement. In addition, the project will enable a CO2 footprint improvement by 750 thousand tonnes CO2 per year. First

pellet is expected to be produced in the fourth quarter of 2023 with a capital expenditure requirement of approximately $0.3 billion.

j.New approximately $0.25 billion investment in sections mill at Barra Mansa (Brazil) with 400 thousand tonnes per year production capacity. The aim

of the project is to deliver higher added value products ("HAV") (merchant bar and special bars) to increase domestic market share in HAV products

and to enhance profitability. The project is expected to commence in 2022 and be completed by the first quarter of 2024.

In addition, in 2021, the Company approved 40 multi-year

projects with identified environmental benefits and involving

capital expenditures of $565 million and 34 multi-year projects

with identified energy benefits and involving capital expenditure

of $442 million. The latter includes 11 multi-year projects

specifically targeted to decarbonization involving capital

expenditures of $174 million. Capital expenditures related to

decarbonization initiatives amounted to $0.1 billion for the year

ended December 31, 2021 and are expected to increase to $0.3

billion (net of government support) in 2022 with the expected

completion of the Carbalyst and Torero projects in Ghent. See

also further information on key environmental projects in

"Business overview—Sustainable development".

ArcelorMittal's joint ventures have also announced significant

capital expenditure projects. See "Property, plant and

equipment—Investments in joint ventures".

101

Management report

Updates on previously announced investment projects

In addition to the significant investment projects presented in the

above table, the Company had previously announced several

large investment projects. The status of certain of such projects

as of the date of this annual report is described below. While the

Company continues to study certain of its key previously

announced investment projects summarized below, no

assurance can be given that they will proceed.

India greenfield projects. The Company explored investment

opportunities in India and in June 2010, entered into a

memorandum of understanding with authorities in the state of

Karnataka in South India that envisaged the construction of a six

million tonnes steel plant with a captive 750 megawatt power

plant, representing a potential aggregate investment of $6.5

billion. The Company completed all the necessary formalities for

acquiring the land by signing and executing a lease cum sale

agreement for 2643.25 acres of land on December 26, 2018 and

the project is under review.

Baffinland (Canada). In March 2011, ArcelorMittal acquired 70%

of the Mary River mine project, with Nunavut Iron Ore Inc.

(“NIO”), an affiliate of The Energy and Minerals Group (“EMG”),

owning the remaining 30%. This project consists of an open pit

high-grade iron ore mine located in the Mary River area of Baffin

Island, Nunavut (Canada). In February 2013, ArcelorMittal and

NIO entered into a joint arrangement and equalized their

shareholdings at 50/50. The project began commercial

production in 2016. Subsequently, following equity funding

commitments and conversion of preferred shares into equity,

both exercised by NIO only, ArcelorMittal’s share over time

decreased to 25.70% as of December 31, 2019 and 25.23% as

of December 31, 2020 and 2021. In September 2020, the

corporate structure was reorganized whereby NIO became the

parent company of Baffinland Iron Mines Corporation

("Baffinland"), while ArcelorMittal together with EMG became

shareholders of NIO with ArcelorMittal’s share in NIO. Following

this reorganization, ArcelorMittal retained its participation in the

project, holding a 25.23% share in NIO.

Baffinland has also approved the project involving the

construction of a railway, to replace the existing truck-haul

operation for transport of iron ore from Mary River to Milne Inlet,

as well as expansion of mining, crushing and screening

operations and port ship loading capacity (the "Rail Expansion"),

which is critical for Baffinland's future. Approximately $1,385

million of capital expenditures were budgeted for this project, to

be funded with operating cash flows, additional equity and new

debt. By mid-2020, NIO completed its exclusive equity funding

commitment of $575 million towards the Rail Expansion. Subject

to certain conditions, ArcelorMittal has an option to provide up to

$85 million of equity funding, which expires on March 31, 2023

(as agreed as part of the reorganization described above).

On January 31, 2022, Baffinland filed its closing statement to

the Nunavut Impact Review Board (“NIRB”) in support of the

Company’s proposed Rail Expansion. NIRB's recommendation

to the Canadian Federal Government is expected in May 2022

and final regulatory decisions on the Rail Expansion are

expected to be announced up to 90 days after NIRB

recommendation. As of the date of this report, Baffinland also

continues evaluating the impact of COVID-19 on delayed

regulatory approvals costs and overall inflationary pressures

faced by the mining industry impacting labor, supply chain rates

and lead times.

Between August 2016 and June 2018, ArcelorMittal and EMG

shared operator rights for Baffinland’s operations. Since July

2018 the project has been operated by EMG. ArcelorMittal’s

marketing rights expired at the end of 2019. In 2020,

ArcelorMittal provided transitional marketing services to

Baffinland.

Reserves and Resources (iron ore and coal)

ArcelorMittal has iron ore and coal production facilities in

Canada, Mexico, South America, Europe, Africa, CIS and in

India through its joint venture AMNS India. The Company has

two categories of mining operations, namely captive mines, and

seaborne oriented operations. Captive mines, whose production

is mainly consumed by their respective steel segments, form

part of such segments. The seaborne iron ore mining operations

at AMMC and AML correspond to the Mining segment.

ArcelorMittal considers its iron ore and coal mining operations in

aggregate to be material to its business.

The following table provides an overview of ArcelorMittal’s

principal mining operations. The production of Run of Mine

("ROM") iron ore and coal is that which is attributable to

ArcelorMittal, based on ArcelorMittal's ownership interest in the

mining operations. All production figures are stated as wet

tonnages.

Management report

102

Operations/Projects

Segment

% of Ownership

Interest

Type of Ownership

Interest

In Operation

Since

Iron Ore

Mexico (Excluding Peña Colorada)

NAFTA

100.0

subsidiary

1976

Peña Colorada - Mexico

NAFTA

50.0

joint operation

1974

Brazil

100.0

subsidiary

1944

Bosnia

Europe

51.0

subsidiary

2008

AMKR Open Pit

ACIS

95.1

subsidiary

1959

AMKR Underground

ACIS

95.1

subsidiary

1933

Kazakhstan Open Pit

ACIS

100.0

subsidiary

1976

Kazakhstan Underground

ACIS

100.0

subsidiary

1956

AML

Mining

85.0

subsidiary

2011

AMMC

Mining

85.0

subsidiary

1976

India

Not Consolidated

60.0

joint venture

1961

Baffinland

Not Consolidated

25.2

associate

2014

2019 aggregate ROM iron ore production, millions of tonnes1

131.1

2020 aggregate ROM iron ore production, millions of tonnes1

132.7

2021 aggregate ROM iron ore production, millions of tonnes

115.1

Coal

Karaganda - Kazakhstan

ACIS

100.0

indirect, subsidiary

1956

2019 aggregate ROM coal production, millions of tonnes2

13.2

2020 aggregate ROM coal production, millions of tonnes2

12.3

2021 aggregate ROM coal production, millions of tonnes

8.3

1.Total ROM Iron ore production in 2019 and 2020 included Hibbing and Minorca mining operations, which were sold in 2020.

2.Total ROM Coal production in 2019 and 2020 included Princeton mining operations, which were sold in 2020.

Summary of ArcelorMittal’s Mining Operations

ArcelorMittal's iron ore mining operations include the captive

mines of the NAFTA, Brazil, Europe and ACIS segments and

AMMC and AML in the Mining segment. ArcelorMittal has either

100%, equal or majority interest in these mining operations. In

addition, the Company owns a 60% interest in the AMNS India

joint venture and has a 25.23% non-controlling interest in

Baffinland.

ArcelorMittal's coal mining operations include the captive coal

mines in Kazakhstan forming part of the ACIS segment.

ArcelorMittal has a 100% interest in these mining operations.

103

Management report

Iron ore operations

NAFTA

ArcelorMittal Mexico Mining Assets

ArcelorMittal Mexico operates three iron ore mines in Mexico,

the San José and Las Truchas mines, and, through a joint

operation with Ternium S.A., the Peña Colorada mine. In 2019,

the El Volcan mine was closed and ArcelorMittal continues to

operate certain parts of the El Volcan facilities to process

material coming from the San José mine.

Management report

104

LOCATION MAP - NAFTA

% of

Ownership

Interest

2021

2020

2019

ROM Millions

of Tonnes

Product

Millions of

Tonnes

ROM Millions

of Tonnes

Product

Millions of

Tonnes

ROM Millions

of Tonnes

Product

Millions of

Tonnes

Peña Colorada - Mexico

50.0

At 100%

11.8

4.1

11.4

3.8

7.8

4.0

At ownership interest (50%)

5.9

2.05

5.7

1.9

3.9

2.0

Mexico (Excluding Peña Colorada)

100.0

Las Truchas

4.4

1.5

4.6

1.6

4.7

1.4

San Jose/El Volcan

3.0

1.3

2.8

1.2

2.4

0.8

NAFTA, (100% basis)

19.2

6.9

18.8

6.6

15.0

6.1

NAFTA, (ArcelorMittal ownership

basis)

13.3

4.8

13.1

4.7

11.1

4.2

Peña Colorada

Consorcio Minero Benito Juarez Peña Colorada, S.A. de C.V.

("Peña Colorada") is the operator of a production stage surface

iron ore mine, located 60 kilometers to the north-east of the port

city of Manzanillo, in the province of Minatitlán in the north-

western part of the State of Colima, Mexico. ArcelorMittal holds

50% of Peña Colorada through a joint operation with Ternium

S.A. ("Ternium"), who owns the other 50% interest.

Peña Colorada holds mineral rights over 39,977 hectares

(98,782 acres) across 20 concessions. Government

concessions are granted by the Mexican federal government for

a period of 50 years and are renewable. The expiration dates of

the current mining concessions range from 2042 to 2062.

Peña Colorada is a complex polyphase iron ore deposit. The

iron mineralization at Peña Colorada consists of banded to

massive concentrations of magnetite within breccia zones and

results from several magmatic, metamorphic and hydrothermal

mineralization stages with associated skarns, dykes and late

faults sectioning the entire deposit.

Peña Colorada operates an open pit mine as well as a

concentrating facility and a two-line pelletizing facility. The ore is

mined by truck and shovel/loader method. The beneficiation

plant is located at the mine, with the pelletizing plant located in

Manzanillo. Major processing facilities include a primary crusher,

a dry cobbing plant, two autogenous mills, three horizontal and

two vertical ball mills and several stages of magnetic separation.

The concentrate is sent as a pulp through a pipeline from the

mineral processing plant to the pelletizing facilities. The

magnetite concentrate and pellets are transported from

Manzanillo to ArcelorMittal Mexico, as well as to Ternium’s steel

plants, by ship and by rail.

Las Truchas

The Las Truchas is a production stage mine located

approximately 27 kilometers north-west of the town of Lázaro

Cárdenas in the State of Michoacán, Mexico. ArcelorMittal holds

an indirect 100% interest.

ArcelorMittal Mexico holds mineral rights over 53,812 hectares,

of which 4,261 support the Las Truchas operations in Mexico.

Government concessions are granted by the Mexican federal

government for a period of 50 years and are renewable. The

expiration dates of the current mining concessions range from

2044 to 2059.

The Las Truchas deposits consist of massive concentrations of

magnetite of irregular morphology. The main Las Truchas

deposits occur along a geological trend that is about seven

kilometers long and about two kilometers wide. The Las Truchas

mineral deposits have been classified as hydrothermal deposits,

which may have originated from late-stage plutonic activity

injecting through older sedimentary rocks. The mineralization of

the Las Truchas iron deposits occurs in disseminated and

irregular massive concentrations of magnetite within

metamorphic rocks and skarns. The mineralization also occurs

as fillings of faults, breccia zones, and fractures.

Mining activities consist of open pit mining, crushing, dry

cobbing to generate pre-concentrate, and a concentration plant.

The concentrator includes one primary crusher, two secondary

crushers and three tertiary crushers, two ball mills and two bar

mills and two wet magnetic separation circuits. The

concentrated ore is pumped from the mine site through a 26

kilometer slurry pipeline to the steel plant facility in Lázaro

Cárdenas.

105

Management report

San José

The San José Mine is a production stage iron ore mine located

approximately 40 kilometers South-East of the town of Culiacán,

the capital of the State of Sinaloa, México. Mining at San José

began in 1946 and was handled by multiple owners until 2019,

when ArcelorMittal secured a lease agreement and commenced

mining and pre-concentration operations. ArcelorMittal’s interest

in the San José mine is 100%.

ArcelorMittal Mexico holds mineral concessions for 39 hectares

supporting the San José mining and pre-concentration

operations. Additionally, ArcelorMittal Mexico holds mineral

rights over 1,053 hectares which previously supported its now

closed El Volcan operations, located approximately 68

kilometers northwest of the city of Obregon. The El Volcan

processing facilities, including the concentration plant and port

installations, continue to be operated processing ores from the

San José mine.

ArcelorMittal Mexico has a lease agreement secured from Ejido

Las Flechas for both the land and the San José facilities, which

is in place for a period of ten years and is valid until 2028.

Previous mine operators have secured surface rights to the

project from the Ejido in the past and it is reasonable to assume

that ArcelorMittal Mexico can continue to secure surface rights

beyond 2028.

San José is a metasomatic deposit, produced by hydrothermal

replacement, with epidote-garnet skarns located in the contact

zone between a Cretaceous limestone unit and a granodioritic

intrusive. The mineralization is primarily composed of magnetite,

with minor hematite. Accessory sulfide minerals including pyrite

and chalcopyrite are also present.

Ore is mined from the open pit using conventional mining

methods and processed into a pre-concentrate by a crushing

and screening circuit with dry magnetic separation. The pre-

concentration facilities at the mine include one primary crusher,

one secondary crusher, a dry cobbling high-intensity magnetic

pulley and one tertiary crusher. The pre-concentrate is then

shipped 30 kilometers by road to a rail head located in Quila,

where it is railed 450 kilometers to the El Volcan concentrator.

The concentration plant at El Volcan includes two ball mills, a

magnetic separation circuit, flotation systems, a belt conveyor

filter and a disposal area for tails. The major port installations

include a tippler for railroad cars, a conveyor, transfer towers

and two ship loading systems. At El Volcan the pre-concentrate

is milled and concentrated via wet magnetic separation to

produce the final concentrate. The final concentrate is

transported 150 kilometers by rail to the Port of Guyamas where

it is loaded onto ships and sent 1,400 kilometers to the Port of

Lazaro Cardenas.

BRAZIL

ArcelorMittal Brazil operates the Andrade mine and Serra Azul

Mineração mines.

LOCATION MAP - BRAZIL Mining Operations

Management report

106

% of

Ownership

Interest

2021

2020

2019

ROM Millions

of Tonnes

Product

Millions of

Tonnes

ROM Millions

of Tonnes

Product

Millions of

Tonnes

ROM Millions

of Tonnes

Product

Millions of

Tonnes

Andrade

100

2.1

1.8

1.9

1.6

1.5

Serra Azul

100

2.6

1.6

2.6

1.6

1.7

0.9

Brazil

4.7

3.4

4.5

3.2

2.4

Andrade Mine

The Andrade Mine is a production stage open pit iron ore mine,

located at 5 kilometers from the town of João Monlevade and 80

kilometers east of Belo Horizonte in the Brazilian state of Minas

Gerais. The Andrade mine is 100% owned and operated by the

Long products division of ArcelorMittal Brazil, with all production

supplying the Monlevade steel plant.

ArcelorMittal’s operations control all of the mineral rights and

surface rights needed to mine and process its estimated iron ore

reserves, dominated by directly shippable hematite ore.

ArcelorMittal Brasil holds mineral rights of over 2,421 hectares

and land lease over 3,347 hectares to support its current

operation. Mining legislation in Brazil does not predetermine the

duration of mineral rights and as such these rights are

considered valid to the point of mine exhaustion.

The Andrade deposit is located in the north-eastern portion of

the Iron Quadrangle. The base stratigraphic section consists of

quartzites and sericite-quartzites of the Moeda formation,

followed by schists of the Batatal formation, both forming the

Caraça group. The iron rich mineral bodies are part of the

overlying Cauê formation, which represents the base of the

Itabira Group. The Caraça and Itabira groups compose the base

of the Paleoproterozoic Minas Supergroup. The Cauê formation

rocks are covered by dolomites and marbles, and sometimes

weathered phylites and schists, belonging to the Gandarela

formation.

In addition to the open pit mine, the Andrade mine operates a

crushing and screening facility, as well as a concentration plant

used to improve the quality of the sinter feed to the Monlevade

plant. This concentration plant commenced production in early

2020 and concentrates the itabirite ores, enabling mixing with

the higher-grade hematite ores. The concentrated iron ore

product is transported to the Monlevade steel plant through a

private railway line.

Serra Azul Mine

ArcelorMittal Mineração Serra Azul mine is a production stage

open pit iron ore mine located approximately 50 kilometers

southwest of Belo Horizonte in the Minas Gerais State of Brazil.

The mine is 100% owned and operated by ArcelorMittal Brasil.

ArcelorMittal Brasil controls all of the mineral and surface rights

needed to mine and process its iron ore reserves. ArcelorMittal

Brasil holds mineral rights over the Central and East claims of

the Serra Azul deposit of over 375 hectares and surface rights

over 281 hectares. Mining legislation in Brazil does not

predetermine the duration of mineral rights and as such these

rights are considered valid to the point of mine exhaustion.

The Serra Azul mine is located in the North-Eastern portion of

the Iron Quadrangle, in the iron rich Cauê Formation of the

Itabira Group. The mineralization occurs as friable, semi

compact and compact Itabirites and banded hematite-silica

rocks, with varying degrees of weathering and oxidation.

Currently, Serra Azul mines and processes the friable itabirite

with the Serra Azul expansion project (see "—Capital

expenditures") contemplating the mining and processing of

semi-compact and compact ores.

In addition to the open pit mine, the Serra Azul mine operates a

processing plant consisting of a crushing facility and a three-line

concentration facility, including screening, magnetic separation,

spirals separators and jigging. Iron ore product is transported by

truck to two railway terminals located 35 and 50 kilometers from

the mine site for distribution to local purchasers of sinter feed or

for export through third-party port facilities located in the Rio de

Janeiro State.

In 2021 an updated resource model was generated,

incorporating the results of a 1,508m drilling program completed

in late 2020. The drilling program targeted further definition of

the friable itabirite (IF) ore bodies and the updated model has

been used to reassess the mine life for the current IF phase of

the Serra Azul Mine. This has resulted in a revised life of mine

for the IF phase, with mining operations extended until 2024.

Following the integration of the Serra Azul Mine into the

ArcelorMittal Brazil steel segment in 2020, an expansion project

for the Serra Azul Mine has been approved. The project

considers producing 4.5 million tonnes per annum of DRI quality

pellet feed by processing compact itabirite (IC) and semi-

compact itabirite (ISC) material. The IC and ISC processing

plant operations are scheduled to start in the second half of

2023 (see also "—Capital expenditures) and estimated reserves

107

Management report

for IC and ISC have been included in the Serra Azul life of mine,

which has been extended until 2056.

In February 2019, the Company decided to implement the

evacuation plan related to its dormant Serra Azul tailing dam.

The community situated downstream to the dam was evacuated

as a precautionary measure based on an updated stability

report following incidents in the Brazilian mining sector. This was

done to enable further testing and implementation of any

additional mitigating measures. As a result, the Company has

executed an agreement with the Federal and State Public

Prosecutors Offices and affected families to provide temporary

assistance to the families and set technical measures required

to re-establish factor of safety standards. Such agreement was

extended in February 2020 and negotiations regarding

compensation continued in 2021, during which a

Complementary Agreement Term was signed with new

guidelines for compensation parameters for the impacts caused

by preventive evacuation.

EUROPE

ArcelorMittal Prijedor (Omarska mine) is the only captive mining

operation within the Europe segment.

LOCATION MAP - EUROPE Mining Operation

Management report

108

% of

Ownership

Interest

2021

2020

2019

ROM Millions

of Tonnes

Product

Millions of

Tonnes

ROM Millions

of Tonnes

Product

Millions of

Tonnes

ROM Millions

of Tonnes

Product

Millions of

Tonnes

ArcelorMittal Prijedor

51.0

At 100% basis

1.8

1.6

1.8

1.4

1.9

1.5

At ownership interest (51%)

0.9

0.8

0.9

0.7

1.0

0.8

ArcelorMittal Prijedor

The Omarska mine is a production stage surface iron ore mine

in Bosnia and Herzegovina, operated by ArcelorMittal Prijedor.

The mine is located 25 kilometers south east of the town of

Prijedor, where the ArcelorMittal Prijedor headquarters are

based. The subsidiary company was founded in 2004 as a

partnership between ArcelorMittal (at the time LNM Holdings)

with a 51% controlling interest and local mining company Iron

Ore Mine Ljubija owning the remaining 49% stake. ArcelorMittal

Prijedor is a captive mine of the Europe segment and supplies

all of its iron ore production to the ArcelorMittal Zenica steel

plant.

The mine’s current concession was signed in 2018 for a period

of 6 years. The property comprises 1,946 hectares of land and

mineral rights. ArcelorMittal Prijedor is the registered holder of

the mining rights on all cadastral plots in the Omarska mine

exploitation field. Land tenure and mineral rights issued to

ArcelorMittal Prijedor are indefinite and considered to be of

sufficient duration to enable all reported mineral reserves on the

properties to be mined in accordance with current life of mine

production schedules.

The Buvac deposit at Omarska mine is located within

Carboniferous clastic (shale and sandstones) and carbonate

(limestone, dolomite, and ankerite) sequences, with massive

siderite-limonite mineralization forming an integral part of the

formation. Iron ore from the Buvac deposit is predominantly

limonite-goethite with associated quartz, carbonates, and

silicates of the illite type. The limonite-goethite mineralization

was formed during the oxidization of the upper parts of the

primary siderite bodies.

The ore body is asymmetrical, lens-shape and elongated in a

northeast - southwest direction, dipping at about 8° toward the

north-east from the surface to a depth of 210 meters. The

deposit is approximately 1.5 kilometer long and 1.0 kilometer

wide.

The ore is excavated from the Buvac deposit by traditional truck

and shovel open pit mining methods. After a primary stage of

crushing within the pit, the ore is transported to a processing

plant via a conveyor. The processing plant on site performs

crushing, screening, gravity separation, magnetic separation

and filtration.

ACIS

Iron ore mining operations forming part of the ACIS segment

include ArcelorMittal Kryvyi Rih open pit and underground mines

in Ukraine, ArcelorMittal Temirtau Orken open pit and

underground iron ore mines in Kazakhstan and Thabazimbi

mine in South Africa.

109

Management report

LOCATION MAPS - ACIS Mining Operations

% of

Ownership

Interest

2021

2020

2019

ROM Millions

of Tonnes

Product

Millions of

Tonnes

ROM Millions

of Tonnes

Product

Millions of

Tonnes

ROM Millions

of Tonnes

Product

Millions of

Tonnes

ArcelorMittal Kryvyi Rih Open Pit

95.1

At 100% basis

25.7

11.0

24.9

10.7

23.6

9.8

At the ownership interest

24.4

10.5

23.7

10.1

22.4

9.4

ArcelorMittal Kryvyi Rih Underground

95.1

At 100% basis

0.7

0.6

0.9

At the ownership interest

0.7

0.6

0.9

ArcelorMittal Temirtau Open Pit

(Lisakovsk, Kentobe and Atansore)

100.0

At 100% basis

3.6

1.8

3.3

2.0

3.2

1.9

ArcelorMittal Temirtau Underground

(Atasu)

100.0

At 100% basis

1.8

1.5

1.8

1.3

1.7

0.9

ACIS at 100% basis

31.7

14.9

16.3

14.6

15.6

13.5

ACIS at the ownership interest

30.5

14.4

15.8

14.0

15.1

12.9

ArcelorMittal Kryvyi Rih

ArcelorMittal Kryvyi Rih ("AMKR") is a production stage iron ore

mining complex located predominantly within the borders of the

city of Kryvyi Rih, 150 kilometers southwest of Dnipro, Ukraine.

The mine is 95.1% owned by ArcelorMittal and is integrated into

the ArcelorMittal Kryvyi Rih steel business as a captive mine.

ArcelorMittal acquired the operations in 2005.

AMKR operates two open pits over the Novokryvorizke (Mine 2

on the map) and Valyavkinske (Mine 3 on the map) deposits,

and an underground mine at the high-grade iron ore deposit of

Kirova. Operations began at the Kryvyi Rih open pit mines in

1959 and at the Kryvyi Rih underground mine in 1933.

AMKR's operations control all of the mineral rights and surface

rights needed to mine and process its estimated iron ore

reserves, holding mineral rights over 775 hectares and surface

rights over 4,827 hectares to support its surface operations, and

57.9 hectares of mineral and 160 hectares of surface rights for

the underground mine operation. The subsoil use permits for the

surface pits have been renewed in 2021 for a further 20 years.

Management report

110

For the underground mine, mineral rights are due to expire in

2038, with the land lease agreements being valid until 2060 and

2061.

The iron ore deposits are located within the southern part of the

Krivorozhsky iron-ore basin. The iron mineralization at

Novokryvorizke and Valyavkinske deposits is hosted by early

Proterozoic rocks containing multiple altered ferruginous

quartzite strata with shale layers. The major iron ore bearing

units in the open pit mines have a carbonate-silicate-magnetite

composition. In addition, oxidized, iron-rich quartzite is mined

simultaneously with primary ore and is stored separately for

possible future processing. Only the magnetite mineralization is

included in the 2021 open pit iron ore reserve estimates. The

high-grade iron ore of the Kirova deposit is hosted by a

ferruginous quartzite with martite and jaspilite.

Along with the two open pit sites and underground mine, AMKR

operates a concentrating facility and a crushing facility to

produce its final product. The iron ore extracted from the open

pits is crushed at the mine site through primary crushing, loaded

on a rail-loading facility and transported to the concentrator. The

concentration facility includes crushing, grinding, classification,

magnetic separation and filtering. The iron ore is extracted from

the underground mine by a modified sub-level caving method

and is crushed and screened at surface into lump and sinter ore,

before being transported by rail to the steel plant. The

ArcelorMittal Kryvyi Rih steel plant is the main consumer of the

mine’s products. For a recent update on AMKR operations, see

"Key transactions and events in 2021 — Recent developments”.

ArcelorMittal Temirtau Iron Ore Mining Assets

ArcelorMittal Temirtau has four iron ore mining operations in

Kazakhstan, three open pit mines, Lisakovsk, Kentobe and

Atansore, and one underground mine, Atasu. The mines are

100% owned by ArcelorMittal and integrated into and operated

by ArcelorMittal Temirtau steel business as captive mines. Final

iron ore products are transported to the ArcelorMittal Temirtau

steel plant by railway.

ArcelorMittal Temirtau’s operations control or convey the legal

right to extend all of the mineral rights and surface rights needed

to mine and process its estimated iron ore reserves. Land

leases are granted by the government of the Republic of

Kazakhstan.

Lisakovsk

Lisakovsk (or Lisakovsky) is a production stage open pit mine

located in northwest Kazakhstan, about 110 kilometers from the

town of Kostanay and 1,100 kilometers from Temirtau. The mine

was commissioned in 1969 and was acquired by ArcelorMittal in

2000.

The mine leases cover 2,706 hectares to support its operations,

and mining rights are held for 893 hectares, covering the area

which supports the mine’s planned life of mine production. The

existing mining license was extended through a new subsoil use

agreement granted in 2020 for 25 years and is due to expire in

2044.

The Lisakovsk deposit is located within the western side of the

Turgai trough, in the Eltaisko-Kurzhunkul ore region. It was

formed by sedimentation processes and the filling of the

Lisakovskaya river valley. It is a shallow sheet-like deposit,

elongated along strike for 100 kilometers with a width that varies

from several hundred meters to 6 kilometers. The iron

mineralization at Lisakovsk occurs as an oolite deposit

containing mainly hydro-goethite and goethite. The deposit has

relatively high phosphorous content which can limit its utilization

in the steel-making process.

Ore is excavated at the mine by traditional truck and shovel

methods before being transported by rail to the processing

facility located at the site. Processing comprises crushing,

screening, grinding, wet jigging, wet magnetic separation and

filtration.

Kentobe

Kentobe is a production stage open pit mine located in the

Karkaraly District of Karaganda Region, about 300 kilometers

South-East of Temirtau. The mine was commissioned in 1983

and acquired by ArcelorMittal in 2002.

The mine currently holds surface rights covering 455 hectares in

support of its total operations, including 280 hectares of land

owned by the mine and approximately 175 hectares of land

leased until 2026 and 2027. The mining rights are granted

across the 209 hectares covering the area of the planned life of

mine production. In 2017 the Kentobe mine signed an

addendum with the Ministry of Industry and Infrastructural

Development of the Republic of Kazakhstan for an extension of

the existing subsoil agreement, which is now valid until the end

of 2026.

The Kentobe deposit is an integral part of Kentobe-Togai ore

field, located in the contact zone of the Topar and Kaldyrma

complexes’ granitoids, in the north-eastern part of the Kent

massif. The deposit is located within the eastern part of the

Kentobe-Togai structure, associated with skarns and

metasomatites, with intensive occurrences of dyke formations of

different ages and ruptured faults. The mineralization at Kentobe

is primarily magnetite, with a small component of oxidized ore

within the upper horizons. The magnetite mineralization

constitutes all the remaining estimated ore reserves of Kentobe

mine.

111

Management report

Magnetite ore is excavated at the mine by conventional truck

and shovel methods after drilling and blasting. Ore processing

on the site includes crushing, screening, and dry magnetic

separation to produce a coarse iron ore concentrate.

Atansore

Atansore is a production stage open pit mine located in the

Enbekshelderskiy district of the Akmola region of Kazakhstan,

450 kilometers from the city of Temirtau and 60 kilometers to the

south-east of the district center of Stepnyak. Mining of the

deposit commenced in 1996 and it was subsequently acquired

by ArcelorMittal in 2004.

The mine leases cover 562.4 hectares to support its total

operations, with current mining rights for 108.1 hectares,

covering the entire area of the mine’s planned life of mine

production. The existing subsoil agreement is valid until the end

of 2029.

The Atansore deposit is located within skarn zones related to a

volcanic intrusion that can be traced for more than 1.5

kilometers. The mineralization includes both oxidized martitic

ore and magnetite ore. Magnetite ore is of primary interest and

only a small portion of excavated martite ore is included in the

mine's mineral reserves.

Ore is excavated at the mine by traditional truck and shovel

methods. Ore is then processed by crushing and dry magnetic

separation.

Atasu

Atasu is a production stage underground mine located in the

Zhanaarkinskiy District territory, 5 kilometers from the town of

Karazhal and about 400 kilometers south/southwest of Temirtau.

The mine began operating in 1956 with open pit exploitation of

near surface reserves. Surface operations ended in 1980.

Underground operations commenced in 1976. The mine was

acquired by ArcelorMittal in 2003.

The mine leases cover 457.9 hectares and 327 hectares of

mineral rights to support its total operations, including the entire

area of the mine’s planned life of mine production. The current

mining lease was obtained in 2003 and the existing subsoil

agreement is due to expire at the end of 2026.

The Atasu operations mine the West Karazhal deposit, which is

a primary hematite ore with associated manganese

mineralization. Studies have indicated that the deposit could

have a sedimentary-volcanogenic origin caused by underwater

hydrothermal activity.

Ore is currently mined from the +44m Level by the sub-level

caving method, using portable drilling and blasting equipment,

scraper winches during loading and underground electric

locomotives for transportation. Excavated iron ore is treated at

the processing plant by crushing, classification and wet jigging

to produce lumps and fines iron ore products.

A project is currently underway to complete a detailed study for

the development of the -10m level, which is anticipated to

replace the current ore source once it is fully depleted.

South Africa

The Thabazimbi mine in the Limpopo Province of South Africa is

an exploration stage captive mine of ArcelorMittal South Africa

(AMSA) steel. AMSA took full ownership of the Thabazimbi

operations from Kumba Iron Ore in November 2018.

Open pit operations at Thabazimbi ceased in 2016, and the

mine is currently only engaged in the rehandling of iron ore from

stockpiles of ROM material from historical production.

The Thabazimbi mine holds surface rights over 10,952.8

hectares and mineral rights over 8,662.3 hectares, valid until

2039.

In 2021, mining consultancy VBKOM was contracted to

complete a pre-feasibility study and estimate the remaining in-

situ mineral resources for Vanderbijl deposit, which are reported

in this report. Further studies to define mineral reserves and life

of mine are planned to commence in 2022.

The Vanderbijl iron ore deposit at Thabazimbi, for which the

resources are estimated, is located on the northern margin of

the Transvaal sub-basin. The Transvaal Supergroup was

deposited in an open marine sedimentary basin developed on

the Kaapvaal Craton within fluvial, deltaic to marine depositional

environments. The iron ore deposits are developed at or close

to the transitional contact zone of the combined footwall

dolomites and upper transitional shale beds (including the

overlying ≈15 m thick chert-rich shale layer) of the Malmani

Subgroup and the overlying BIFs of the Penge Formation.

Management report

112

MINING

Iron ore mining operations forming part of the Mining segment include AMMC in Canada and AML in Liberia.

LOCATION MAP - AMMC

113

Management report

LOCATION MAP - AML

% of

Ownership

Interest

2021

2020

2019

ROM

Millions of

Tonnes

Product

Millions of

Tonnes

ROM

Millions of

Tonnes

Product

Millions of

Tonnes

ROM

Millions of

Tonnes

Product

Millions of

Tonnes

AMMC

85.0

At 100% basis

65.6

22.0

67.0

23.2

66.4

23.8

At ownership interest (85%)

55.8

18.7

56.9

19.7

56.4

20.2

AML

85.0

At 100% basis

4.6

4.2

5.3

5.1

4.2

4.4

At ownership interest (85%)

3.9

3.6

4.5

4.4

3.6

3.8

Mining segment at 100% basis

70.2

26.2

72.3

28.3

70.6

28.2

Mining segment at the ownership interest

59.7

22.3

61.4

24.1

60.0

24.0

AMMC

AMMC is structured in two partnerships ArcelorMittal Mining

Canada G.P. and ArcelorMittal Infrastructure Canada G.P.,

which are both held at 85% by ArcelorMittal with a 15% non-

controlling interest held by 9404-5515 Québec Inc., a

consortium constituted, among others, of POSCO, a South

Korean Steel Company and China Steel Corporation.

AMMC is a production stage property, including two deposits at

Mont-Wright and Fire Lake, and another deposit at Mont-Reed.

Management report

114

The mines at Mont-Wright and Fire Lake are owned and

operated by AMMC and are both open-pit producing mines,

consolidated in one production schedule and Life of Mine

supporting the AMMC property's disclosed mineral reserves.

The deposit at Mont-Reed is currently in an exploration stage.

The Mont-Wright and Fire Lake deposits are located in Québec,

Canada. Mont-Wright is located near Fermont, and Fire Lake is

located 85 kilometers south-east of Fermont. The Mont-Reed

deposit is located approximately 130 kilometers southwest of

Mont-Wright. Along with the Mont-Wright and Fire Lake mines,

AMMC operates an ore processing plant located on-site at

Mont-Wright, as well as a pelletizing plant located at the Port-

Cartier port.

Headquarters of the mines are based in Montreal. Fermont, the

town site built to support the mining operations, is located 16

kilometers east of the Mont-Wright mining complex and is

connected by Highway 389 to Baie-Comeau, which is 570

kilometers away. The Mont-Wright and Fire Lake mines are

located approximately 400 kilometers north of the city of Port-

Cartier and approximately 1,000 kilometers north-east of

Montreal.

AMMC mining property comprises 33,071 hectares of mineral

rights across six mining leases, five patented parcels and five-

hundred and ninety-one map designated claims. Patented

parcels have no expiration dates or lease fees whereas active

leases are valid for a period of ten years. All current leases

expire between 2025 and 2033 and can be renewed as needed,

with reports on material moved disclosed to the government on

a yearly basis.

The Mont-Wright, Fire Lake and Mont-Reed deposits are all

Lake Superior–type banded iron formations, the metamorphic

equivalent to other iron formations within the Labrador Trough

iron district. While Mont-Wright and Fire Lake are hematite-rich

deposits, Mont-Reed has a greater ratio of magnetite.

Mont-Wright and Fire Lake are surface pit producing mines, with

the mining operations carried out in conventional large-scale

open pits employing industry standard technology and

equipment to mine ore with grades averaging approximately

29% Fe.

All mined ore from Mont-Wright and Fire Lake is processed at

the Mont-Wright processing plant, with material from Fire Lake

brought in by train. Feed ore material is fed through the crusher

and concentrated in the processing plant in Mont-Wright using a

gravity separation method. Concentrate is shipped to Port-

Cartier, Québec, Canada, via private railroad, to the pelletizing

facilities and port operations. The main products sold are

concentrate and a variety of pellets.

AML

AML is a production stage property and has been mining ‘direct

shipping ore ("DSO") from the Mt. Tokadeh and Mt. Gangra

deposits in northern Nimba, Liberia, since 2011. ArcelorMittal’s

ownership at AML is 85%, with the remaining 15% owned by the

Liberian Government. The construction of the mine commenced

in 1960 by a group of Swedish companies, which ultimately

became the Liberian American-Swedish Minerals Company

(“LAMCO”), and production commenced on the Nimba deposit

in 1963. After LAMCO ceased production in 1992, AML signed a

MDA in 2005 with the Liberian Government. In 2021, AML

signed an amendment to the MDA with the Liberian

Government, which is currently under the legislative ratification

process.

Under MDA, AML is currently developing three deposits located

approximately 300 kilometers northeast of Monrovia, Liberia.

Three deposits within the MDA are grouped under the name

“Western Range Project”, which includes the Mt. Tokadeh, Mt.

Gangra and Mt Yuelliton deposits. The concession area granted

to AML by the Liberian Government as per the MDA, with rights

to explore or mine iron ore covers approximately 51,342

hectares. Within the concession area, AML has a Class A mining

license for the Mt. Tokadeh, Mt. Gangra and Mt Yuelliton

deposits. In addition to the rights to explore and mine iron ore,

the Liberian Government has granted the right to develop, use,

operate and maintain the Buchanan to Yekepa railroad and the

Buchanan port, along with an area at Buchanan for township

and industrial facilities for material handling and workshops.

The Nimba Itabirites is a 250 to 450-meter-thick recrystallized

iron formation. Although the iron deposits at Mt. Tokadeh, Mt.

Gangra and Mt Yuelliton fit the general definition of Itabirite as

laminated metamorphosed oxide-facies iron formation, they are

of lower iron grade than the ore previously mined at Mount

Nimba. Tropical weather effects have caused the decomposition

of the rock forming minerals resulting in enrichment in the iron

content that is sufficient to support a DSO operation and

accordingly, currently, only high grade ore reserves of oxidized

iron ore are mined. This ore only requires crushing and

screening to make it suitable for export. The materials-handling

operation consists of stockyards at both the mine and port

areas, linked by a 250-kilometer single track railway running

from Mt. Tokadeh to the port of Buchanan The facilities at the

port consist of tail pulley platforms, conveyor system, quayside

including bays for iron ore storage, fuel quayside jetty,

equipment workshop and the final product storage. The final

product is supplied to ArcelorMittal's steel plants in Europe, with

the balance of any product being shipped to the external

European market

In 2013, AML had started construction of a Phase 2 project that

envisaged the construction of 15 million tonnes per annum of

concentrate sinter fines capacity and associated infrastructure;

115

Management report

this project was then suspended due to the onset of Ebola in

West Africa and the subsequent force majeure declaration by

the onsite contracting companies. AML has now completed the

revised feasibility study, which was updated in 2019-20 to apply

best available technology and replace wet with dry stack tailings

treatment. On September 10, 2021, the Liberian Government

and ArcelorMittal signed an amendment to the MDA, which is

currently under the legislative ratification process. The Phase 2

expansion includes the construction of a 15 million tonnes per

annum concentrator plant project to treat oxidized and

transitional ores to significantly ramp up production of premium

iron ore. The concentrator phase, to be constructed in modules,

will transition AML to a premium product category (high grade

concentrate) asset while achieving a low FOB and CIF-China

cost position (with the economies of scale projected to more

than offset the cost of concentration). The expansion project -

which encompasses processing, rail and port facilities - will be

one of the largest mining projects in West Africa. The capital

required to finalize the project is expected to be approximately

$0.8 billion (currently under review given impacts of inflation and

enlarged scope), as it is effectively a brownfield expansion given

that 85% of the procurement has already been done (with the

equipment on site) and 60% of the civil construction is complete.

The expansion project includes the construction of a new

concentration plant and the substantial expansion of mining

operations, with the first concentrate expected in late 2023,

ultimately ramping up to 15 million tonnes per annum. Under the

agreement the Company has further expansion opportunities

up to 30 million tonnes per annum. The revised feasibility study

also contemplates a future change to the processing

infrastructure to enable the production of high quality

concentrate from the magnetite dominant fresh ores (Phase 3).

Other users may be allowed to invest for additional rail capacity.

See also “Introduction—Key transactions and events in 2021".

JOINT VENTURES AND ASSOCIATES

On December 11, 2019, ArcelorMittal acquired a 60% interest in

the joint venture AMNS India, with the remaining 40% being held

by NSC.

LOCATION MAP - INDIA

Management report

116

% of

Ownership

Interest

2021

2020

ROM Millions

of Tonnes

Product

Millions of

Tonnes

ROM Millions

of Tonnes

Product

Millions of

Tonnes

AMNS India

60.0

At 100% basis

7.4

6.8

1.8

1.6

At ownership interest (60%)

4.5

4.1

1.1

1.0

Thakurani mine

AMNS India's Thakurani iron ore mine is a production stage

open pit mine in the Odisha state of India. AMNS India holds

surface and mineral rights over 228 hectares to support its

Thakurani operations, located 320 kilometers to the north of the

Odisha capital Bhubaneswar and 4 kilometers east of the town

of Barbil.

The operation and mining rights to the Thakurani operations

were obtained by AMNS India in February 2020 through the

Indian Government Mining Block auction scheme. The

Thakurani open pit mine has been operated since 1961 and has

both mature mining pits and undeveloped resource areas.

AMNS India commenced mining operations in mid-2020,

following the demobilization of the previous claim holder,

Kaypee Enterprises.

AMNS India has a permit in place for 5.5 million tonnes per

annum of ore production, designated for internal consumption

only. The ramp-up to a capacity of 5 million tonnes per annum

was completed in 2021. The mining lease deed was executed

on June 27, 2020 for a period of 50 years to June 26, 2070.

Until June 27, 2021 all production from the mine had to be

consumed by specified AMNS India end use plants, after which

up to 25% of production may be sold to a third party. A

submission approved by the Indian Bureau of Mines in late 2020

increases the permitted production rate to 7.99 million tonnes

per year from 2023.

The Thakurani operations lie in the south eastern part of the

Singhbhum-Keonjhar-Bonai iron ore belt, a narrow NNE-SSW

directional trending folded syncline that runs through northern

Odisha, India and southern Jharkhand, India. The Precambrian

horseshoe shaped belt is a well-known iron ore province hosting

many iron ore deposits. The enriched sequence is a traditional

Banded Iron Formation that has been subject to significant

weathering that has enriched the iron ore deposits. Ore is

generally of the friable hematite type however more competent

hematite ores and friable goethite ores are also present.

The current mining operation at Thakurani is being carried out

by conventional mining methods using excavators and trucks for

ore transportation to a mobile crushing facility. Ore from the

Thakurani operation is crushed and screened on site before

being transported by road to the Dabuna beneficiation plant

located approximately 40 kilometers to the south. Beneficiated

material is then transported by slurry pipeline to the pelletizing

plant at Paradip, located on the coast at Bay of Bengal.

Ghoraburhani – Sagasahi mine

The Ghoraburhani – Sagasahi mine is an exploration stage

open pit iron ore mine, located in the Sundargarh district of

Odisha state of India. The operation and mining rights to the

Ghoraburhani – Sagasahi operations were obtained through the

AMNS India takeover of Essar Steel (“ESIL”) in December 2019.

The mining lease deed was executed on March 26, 2021, for a

period of 50 years and permits production of up to 7.16 million

tonnes per annum of ore primarily for captive usage. AMNS

India holds surface and mineral rights over 139 hectares at the

Sagasahi mine.

The Ghoraburhani – Sagasahi operations lie in the south-

western part of the Singhbhum-Keonjhar-Bonai iron ore belt.

The enriched sequence is a traditional Banded Iron Formation

that has been subject to significant weathering & deformation

that has enriched the iron ore deposits. Ore is generally of

lateritic iron ore/ hard laminated ore on the top followed by soft

laminated ore and friable hematite with intercalations of friable

shaly ore and limonitic ore are also present.

Ore mining commenced at the Ghoraburhani – Sagasahi mine

in late 2021 by conventional mining methods, using excavators

and trucks for ore transportation to a mobile screening &

crushing facility. There are currently no processing facilities at

the site. Mineral resources and mineral reserves have not been

reported in 2021 due to ongoing exploration that is planned to

be completed in 2022 prior to a full resource model update.

Following this, a revised life of mine plan will be generated,

forming the basis for mineral resources and mineral reserves

expected to be reportable in the 2022 reporting cycle.

117

Management report

Baffinland

ArcelorMittal has a non-controlling interest at the associate

Baffinland iron ore mine.

LOCATION MAP - BAFFINLAND

% of

Ownership

Interest

2021

2020

2019 1

ROM Millions

of Tonnes

Product

Millions of

Tonnes

ROM

Millions of

Tonnes

Product

Millions of

Tonnes

ROM

Millions of

Tonnes

Product

Millions of

Tonnes

Baffinland

25.23

At 100% basis

6.3

5.5

7.8

6.0

5.6

At ownership interest (25.23%)

1.6

1.4

2.0

1.5

1.4

1.ArcelorMittal ownership interest for 2019 production was 25.70%

The Mary River mine is a production stage open pit high-grade

iron ore mine. The mine is operated by Baffinland Iron Mines

Corporation, a privately owned Canadian mining company.

The Mary River property is located within the Arctic Circle on

north Baffin Island, in the Qikiqtani Region of Nunavut, Canada,

approximately 1,000 kilometers (620 miles) northwest of Iqaluit,

the capital of Nunavut. It comprises five high grade deposits and

six prospects, which represent high grade examples of Algoma-

type iron formation consisting of magnetite, hematite and

specular hematite mineralization. The project began commercial

production on Deposit No. 1 in 2014.

Management report

118

In March 2011, ArcelorMittal acquired 70% of the Mary River

mine project, with Nunavut Iron Ore Inc. (“NIO”), an affiliate of

The Energy and Minerals Group (“EMG”), owning the remaining

30%. In February 2013, ArcelorMittal and NIO entered into a

joint arrangement and equalized their shareholdings at 50/50.

Subsequently, following equity funding commitments and

conversion of preferred shares into equity, both exercised by

NIO only, ArcelorMittal’s share over time decreased to 25.70%

as of December 31, 2019 and 25.23% as of December 31,

2020. In September 2020, the corporate structure was

reorganized whereby NIO became the sole parent company of

Baffinland, while ArcelorMittal together with EMG became

shareholders of NIO. Following this reorganization, ArcelorMittal

retained its participation in the project and as of December 31,

2021, holds a 25.23% interest in NIO.

Baffinland’s total mineral tenures (including leases, mineral

claims and exploration rights) cover an area of approximately

408,205 hectares (1008,695 acres). Of this, approximately 14%

is subject to mining leases (being leased claims under the

Nunavut Mining Regulations), 74% is covered by mineral claims

(being recorded claims under the Nunavut Mining Regulations)

and the rest by exploration rights.

Baffinland has two main operating locations – the mine site at

Mary River and Milne Port, located approximately 86 kilometers

north-west of the mine site.The Mary River mine is self-

sustaining and is equipped with an airstrip and aerodrome. It is

a conventional open pit truck and shovel operation. Ore is

delivered to crushers before the crushed product is transported

via the 100 kilometer Tote road to Milne Port. Milne Port has

been fully developed to accommodate a 5 million-tonne ore

stockpile, an ore dock, maintenance facility, and associated

infrastructure for the operation of the port facilities. Baffinland

can only ship during the open water season (typically July to

October), but may conduct haulage of ore to the port throughout

the year.

In 2021, Baffinland operated within an approved Early Revenue

Phase, which permitted up to 6.0 million tonnes per annum to be

hauled to and shipped from Milne Port. The current permitting

limit on trucking and shipping is 4.2 million tonnes per annum.

However, as per previous years, Baffinland expects to obtain

continued approval for an increase to 6 million tonnes per

annum for 2022.

Baffinland has also approved the project involving the

construction of a railway, to replace the existing truck-haul

operation for transport of iron ore from Mary River to Milne Inlet,

as well as expansion of mining, crushing and screening

operations and port ship loading capacity (the "Rail Expansion"),

which is critical for Baffinland's future. Approximately $1,385

million of capital expenditures were budgeted for this project, to

be funded with operating cash flows, additional equity and new

debt.

Coal Operations

ArcelorMittal Temirtau has eight underground coal mines located

in and around Karaganda in Kazakhstan: Kostenko,

Kuzembaeva, Saranskaya, Abayskaya, Kazakhstanskaya,

Lenina, Shakhtinskaya and Tentekskaya.

119

Management report

LOCATION MAP - ArcelorMittal Temirtau Coal

% of

Ownership

Interest

2021

2020

2019

ROM Millions

of Tonnes

Product

Millions of

Tonnes

ROM Millions

of Tonnes

Product

Millions of

Tonnes

ROM Millions

of Tonnes

Product

Millions of

Tonnes

Karaganda - Kazakhstan

100.0

8.3

3.3

9.5

3.6

9.6

3.5

ArcelorMittal Temirtau (Karaganda– Kazakhstan– Kazakhstan

Coal Mines)

All eight coal mines are production stage underground mines

and are captive to the Temirtau steel operations, since entering

the structure of Ispat-Karmet JSC, Coal Division (now

ArcelorMittal Temirtau JSC, Coal Division) in 1996. All of the

mines are operated by ArcelorMittal Temirtau JSC, Coal

Division.

The mines are located 5 to 30 kilometers to the west from the

city of Karaganda, in an area with well-developed infrastructure

around the capital of the Karaganda region of the Republic of

Kazakhstan.

The subsoil use contract and license for all coal mines in

Karaganda is under a renewal process with the Government of

Kazakhstan and expected to be completed in the second

quarter of 2022 and the license will be issued with a validity

period of 20 years. The total area under mineral rights is 28,638

hectares after a small portion of land was returned to the State.

Land tenures of the Karaganda coal mines cover 13,349

hectares.

The coal mines of ArcelorMittal Temirtau are located in the

Karaganda Coal Basin. The basin is more than 3,000 square

kilometers and was formed by strata of Upper Devonian and

Carbonic ages, Mesozoic and Cainozoic formations. Due to

structural peculiarities, the coal basin is divided into three

geology-based mining areas: ArcelorMittal Temirtau's coal

mining operations are performed in the three distinct mining

areas: Karagandinskiy (Kostenko, Kuzembayeva, and

Saranskaya mines), Sherubay-Nurinskiy (Abayskaya and

Shakhtinskaya mines) and Tentekskiy (Kazakhstanskaya,

Lenina, and Tentekskaya mines).

The Kostenko mine occupies the central part of the industrial

district of the Karagandinskiy area. In the west and north-west it

borders with the closed Gorbacheva and Severnaya mines.

Management report

120

The Saranskaya and Kuzembayeva mines operate in the Saran

district of the Karagandinskiy area.

The Abayskaya and Shakhtinskaya mines operate in the

territory of the Sherubay-Nurinskiy area located in in the

southern part of the north-east limb of the Sherubay-Nurinskiy

syncline (Brachy syncline).

The Lenina, Kazakhstanskaya, and Tentekskaya mines operate

in the territory of Tentekskiy area. Tentekskaya is in the north-

west part of the Sherubay-Nurinskiy syncline.

In all mines, coal mining is carried out by longwall and

development production faces. The produced coal is transported

via belt infrastructure and skip shafts to the surface. From there,

ROM coal is dispatched via a rail network to coal preparation

plants (Vostochnaya and Temirtau) for processing.

For beneficiation of the coal, two washeries are operated. All

mines are connected to the main railway, and coal is transported

by railway to the coal wash plants. Surplus coal concentrate,

when available, is supplied to ArcelorMittal Kryvyi Rih in

Ukraine, and to external customers in Russia and China.

Additionally, low quality coking coal is provided to a power plant

which supplies power and heated water to Temirtau city and the

ArcelorMittal Temirtau steel plant.

Estimates of Iron Ore and Coal Mineral Reserves and Mineral

Resources

For the meanings of certain technical terms used in this annual

report, see “Glossary.”

The mineral reserve and resource estimates have been

prepared in accordance with SEC Regulation S-K, Subpart 1300

(“S-K 1300”), with the Canadian Institute of Mining and

Metallurgy (CIM) Best Practice Guidelines and Standard

Definitions for Canadian National Instrument 43-101 (for all its

operations and projects).

The estimates of mineral resources and mineral reserves at the

Company’s mines and projects and the estimates of the mine

life included in this report have been prepared by qualified

persons, in accordance with the guidelines for mining property

disclosure requirements provided in S-K 1300. Qualified

persons are either third parties or employees of a third party that

is not affiliated with ArcelorMittal, or are employees of

ArcelorMittal, with no direct or indirect economic interest in

ArcelorMittal or its shares. No qualified persons have been

employed on a contingent basis.

Only measured and indicated mineral resources, where the level

of geological certainty associated was sufficient to allow a

qualified person to apply modifying factors in sufficient detail to

support mine planning and evaluation of the economic viability

of the deposit, were converted to proven or probable mineral

reserves for each of the mineral properties under the summary

disclosure.

The 2021 mineral resource and mineral reserve estimates at the

AMMC mining property have respectively been prepared by

qualified persons who are employees of ArcelorMittal.

The 2021 mineral resource and reserve estimates for the Las

Truchas and San José mines (consolidated as Mexico,

excluding Peña Colorada in the tables below) were prepared by

qualified persons of Gustavson Associates, a subsidiary of WSP.

Peña Colorada contracted SLR Consulting (Canada) Ltd. to

provide the 2021 mineral resource and reserve estimates for the

Peña Colorada mine.

The 2021 mineral resource and reserve estimates for the

Andrade and Serra Azul mines (consolidated as Brazil in the

tables below) were prepared by qualified persons of the Grupo

GE21, with the support of the ArcelorMittal Brazil local team.

The mineral resource and reserve estimates for the ArcelorMittal

Kryvyi Rih open pit and underground operations as of December

31, 2021 were prepared by KAI Ltd. Measured Group Pty Ltd

was contracted in 2021 to prepare the mineral resource and

reserve estimates for the ArcelorMittal Temirtau iron ore surface

mines (consolidated as Kazakhstan Open Pit in the tables

below) and underground mine (Kazakhstan Underground in the

tables below).

The 2021 mineral resource and reserve estimates for the

Thakurani Iron Ore Mine (India in the tables below) 2021 were

prepared by a qualified person of BMRC Geomining Solutions

LLP. Additionally, an estimate of mineral resources and reserves

of the exploration stage Ghoraburhani – Sagasahi mine is

planned to be done in 2022, following the ongoing additional

exploration works at the site. It is anticipated that Ghoraburhani

– Sagasahi mineral reserves and mineral resources will be

reported from 2022 onwards.

AML's 2021 mineral resources and mineral reserves were

estimated by qualified persons who are employees of

ArcelorMittal. In 2021, a qualified person of VBKOM (Pty) Ltd

prepared a pre-feasibility study and estimated the mineral

resources for the Vanderbijl pit at Thabazimbi (South Africa in

tables below). Estimates of mineral reserves are not reported in

2021 for ArcelorMittal South Africa iron ore operation

Thabazimbi. Mineral resources and mineral reserves as of

December 31, 2021 for ArcelorMittal Prijedor (Bosnia in the

tables below) were prepared by an independent qualified

person. The mineral resources and reserves for the Mary River

Mine (Baffinland in the tables below) as of December 31, 2021

were estimated by SLR International Corporation.

121

Management report

ArcelorMittal Temirtau's mineral resources for the eight coal

mines (Kazakhstan-Karaganda in tables below) as of December

31, 2021 were estimated by qualified persons of Golder, a

member of WSP, and Dargo Associates Ltd. Mineral reserves

for coal mines Kuzembaeva, Saranskaya, Kazakhstanskaya,

Lenina, Shakhtinskaya and Tentekskaya.as of December 31,

2021 were estimated by qualified persons of Golder and Dargo

Associates Ltd, and mineral reserves for Kostenko and

Abayskaya have been estimated by a qualified person who is an

employee of ArcelorMittal. In 2021 coal mineral reserves

increased based on a new life of mine plan developed for 20

years, based on new modeling and metallurgical quality

testwork, resulting also in a significant net increase of the

mineral resources of coal at ArcelorMittal Temirtau coal mines.

The point of reference of reporting all of ArcelorMittal's mineral

resources and reserves in the tables below is the point of

delivery of the ROM material to the processing plant and all

material is reported on a wet basis.The effective date for

reporting of all mineral resources and reserves is December 31,

2021.

For each of the mining operations under the summary

disclosure, economic viability of the declared mineral reserves

has been determined by the qualified persons using a

discounted cash flow analysis, demonstrating that extraction of

the mineral reserve is economically viable under reasonable

investment and market assumptions. The estimated mine life

reported in this table corresponds to the duration of the

production schedule of each operation based on the 2021 year-

end iron ore reserve estimates only. The production varies for

each operation during the mine life and as a result the mine life

is not the total reserve tonnage divided by the 2021 production.

Mine life of each operation is derived from the life of mine plans

and corresponds to the duration of the mine production

scheduled from mineral reserve estimates only. The

demonstration of economic viability is established through the

application of a life of mine plan for each operation or project

providing a positive net present value on a cash-forward looking

basis, considering the entire value chain. Economic viability is

demonstrated using forecasts of operating and capital costs

based on historical performance, with forward adjustments

based on planned process improvements, changes in

production volumes and in fixed and variable proportions of

costs, and forecasted fluctuations in costs of raw material,

supplies, energy and wages. Mineral reserve estimates are

updated annually in order to reflect new geological information

and current mine plan and business strategies. The Company’s

reserve estimates are of in-place material after adjustments for

mining depletion and mining losses and recoveries, with no

adjustments made for metal losses due to processing. For a

description of risks relating to reserves and reserve estimates,

see “Introduction—Risk factors—Risks related to ArcelorMittal’s

Mining Activities".

The reported iron ore and coal reserves contained in this report

do not exceed the quantities that the Company estimates could

be extracted economically if future prices were at similar levels

to the average contracted price for the three years ended

December 31, 2021. The Company establishes optimum design

and future operating cut-off grade based on its forecast of

commodity prices, adjusted for local market conditions, freight,

inland logistics costs, and final product value in use premiums/

penalties, and operating and sustaining capital costs. The cut-off

grade varies from operation to operation and during the life of

each operation in order to optimize cash flow, return on

investments and the sustainability of the mining operations.

Such sustainability in turn depends on expected future operating

and capital costs. Estimates of reserves and resources can vary

from year to year due to the revision of mine plans in response

to market and operational conditions, in particular market price.

See “Introduction—Risk factors—Risks related to ArcelorMittal’s

Mining Activities—ArcelorMittal’s reserve and resource

estimates may materially differ from mineral quantities that it

may be able to actually recover; ArcelorMittal’s estimates of

mine life may prove inaccurate; and market price fluctuations

and changes in operating and capital costs may render certain

ore reserves uneconomical to mine.”

To ensure that mineral resource estimates for all mines satisfy

the requirements for reasonable prospects for economic

extraction ("RPEE") requirement, reasonable technical and

economic factors were considered by qualified persons in the

process of derivation of the ultimate mineral resource pit shells

or underground constraining wireframes and other spatial

controls used to constrain the mineralization. Factors used are

current, considered to be reasonably developed, and are based

on generally accepted industry practice and experience.

Tonnage and grade estimates are reported as ‘Run of Mine’.

Tonnage is reported on a wet metric basis. Metallurgical

recoveries are accounted for in the concentrate tonnes

calculation based on historical processing data and are variable

as a function of head grade.

ArcelorMittal owns less than 100% of certain mining operations;

mineral reserve and mineral resource estimates have been

adjusted to reflect ownership interests and therefore reflect the

portion of total estimated mineral reserves and resources of

each mine attributable to ArcelorMittal as per the Company’s

ownership interest in each mine at December 31, 2021.

The classification of the iron ore and coal reserve estimates as

proven or probable reflects the variability in the mineralization at

the selected cut-off grade, the mining selectivity and the

Management report

122

production rate and ability of the operation to blend the different

ore types that may occur within each deposit.

The following table summarizes ArcelorMittal’s mineral reserves

as of the end of the fiscal year ended December 31, 2021 in the

aggregate, and by commodity and country and for each property

containing 10% of more of ArcelorMittal’s combined mineral

reserves. Mineral reserve quantities are rounded to million

tonnes.Unless indicated otherwise below, for the purpose of

determining iron ore mineral reserves, ArcelorMittal has used

long term iron ore reference price of $60 per tonne for 62% Fe

fines, based on supply / demand fundamentals and industry cost

curve adjusted upwards or downwards for mine specific factors

and further adjusted for grade, logistics, and other adjustments.

123

Management report

Iron Ore

% of

Ownership

Interest15

Proven

Mineral Reserves

Probable

Mineral Reserves

Total

Mineral Reserves

Millions of

Tonnes

% Fe 1

Millions of

Tonnes

% Fe 1

Millions of

Tonnes

% Fe 1

Canada

1,806

30.8

209

32.6

2,015

31.0

AMMC2

85.0

1,736

29.4

188

29.0

1,924

29.3

Baffinland3

25.2

65.2

65.1

Mexico

24.9

174

26.6

238

26.2

Mexico (Excluding Peña Colorada)4

100.0

36.3

101

30.5

113

31.1

Peña Colorada - Mexico5

50.0

22.3

21.2

125

21.7

Brazil6

100.0

53.7

351

35.1

405

37.7

Bosnia7

51.0

49.0

46.0

47.6

Ukraine

35.0

466

34.2

547

34.4

Ukraine Open Pit8

95.1

33.7

453

33.7

529

33.7

Ukraine Underground9

95.1

54.4

54.6

Kazakhstan

—

112

40.9

112

40.9

Kazakhstan Open Pit10

100.0

—

110

41.0

110

41.0

Kazakhstan Underground11

100.0

—

37.3

Liberia12

85.0

52.9

568

43.3

575

43.4

India13

60.0

—

61.1

Total Iron Ore

2,014

31.5

1,928

37.3

3,942

34.3

% of

Ownership

Interest

Proven

Mineral Reserves

Probable

Mineral Reserves

Total

Mineral Reserves

Coal

Millions of

Tonnes

% Ash

Millions of

Tonnes

% Ash

Millions of

Tonnes

% Ash

Kazakhstan - Karaganda14

Saranskaya

100.0

33.9

29.6

32.9

Kuzembaeva

100.0

36.2

34.7

35.8

Kazakhstanskaya

100.0

39.7

42.5

40.0

Lenina

100.0

35.2

34.5

35.1

Shakhtinskaya

100.0

47.8

42.1

46.4

Tentekskaya

100.0

37.3

33.2

37.1

Kostenko

100.0

39.0

38.0

Abayskaya

100.0

43.5

38.7

39.4

Total Coal

132

38.3

37.2

210

37.9

1.Unless stated otherwise, % Fe represents total Fe content for all sites except Peña Colorada where it represents magnetic Fe content only.

2.Mineral reserves for AMMC are estimated at a cut-off grade of 15% and a mass recovery of 34.9%, for a life of mine of 31 years.

3.Mineral reserves for Baffinland are estimated at a cut-off grade of 55% and a mass recovery of 100%, for a life of mine of 22 years.

4.Mineral reserves for Las Truchas are estimated at a cut-off grade of 10% Fe magnetic, and reserves for San José are reported at a cut-off grade of

27% Fe. The Fe recovery of Fe magnetic is 90% is considered in Las Truchas, and at San José Fe recovery considered is 75%. Life of mine of Las

Truchas is 15 years and San José has a life of mine of 3 years.

5.Mineral reserves for Peña Colorada are estimated at the cut-off grade of 15% Fe magnetic. Fe recovery at the mineral reserve average head grade

is 78.2%, for the life of mine of 17 years.

6.Mineral reserves for Serra Azul are estimated at 40% Fe cut-off grade and a mass recovery of 52.8% for friable material, and 29% Fe cut-off grade

and a mass recovery varying from 33% to 45% for compact material, for a life of mine of 35 years. Mineral reserves for Andrade are reported at a

cut-off grade of 20% Fe and 81.3% mass recovery at average, for a life of mine of 41 years.

Management report

124

7.Mineral reserve for ArcelorMittal Prijedor is estimated based on a price of $24 per tonne of product calculated based on assumptions of a non-

marketable material supplied to its integrated steel plant, at 32% Fe cut-off grade and mass recovery of 75%, for the life of mine of 4 years.

8.Mineral reserve for Ukraine Open Pit is estimated at an average Fe recovery of 65.3%. Cut-off grade applied at Novokryvorizke deposit is 12% Fe,

and at Valyavkinske deposit 16% Fe. Life of mine considered for the two pits combined is 24 years.

9.Mineral reserve for Ukraine Underground mine is estimated based on a price of $39.3 per tonne of product calculated based on assumptions of a

non-marketable material supplied to its integrated steel plant,at cut-off grade of 48% Fe and a mass recovery of 100%, for a life of mine of 23 years.

10.Mineral reserves for Kazakhstan Open Pit mines are estimated using a price averaging $20 per tonne of products calculated based on assumptions

of a non-marketable material supplied to its integrated steel plant. Atansore mineral reserves are reported at a 20% Fe cut-off grade and a mass

recovery of 53.9%, for a life of mine of 6 years. Mineral reserves for Kentobe are reported at a 20% Fe cut-off grade and a mass recovery of 86.7%,

for a life of mine of 16 years, and mineral reserves for Lisakovsk are reported at a 30% Fe cut-off grade and a mass recovery of 48.3%, for a life of

mine of 48 years.

11.Mineral reserve for Kazakhstan Underground mine Atasu is estimated based on a price of $32 per tonne of products calculated based on

assumptions of a non-marketable material supplied to its integrated steel plants, a 35% Fe cut-off grade and a mass recovery of 40.4%, for a one-

year life of mine.

12.Mt. Tokadeh, Mt. Gangra and Mt. Yuelliton mineral reserves are estimated at a cut-off grade of 40% Fe and a mass recovery of 58.9% for the oxide

and transitional material, and a 30% Fe cut-off grade and a mass recovery of 44.8% for the fresh material, for a life of mine of 30 years.

13.Mineral reserves for Thakurani are estimated at 55% Fe cut-off grade and a mass recovery of 98%, for the life of mine of 11 years.

14.Mineral reserves of coal for all Kazakhstan-Karaganda mines are estimated based on a price of $128 per tonne of clean coal, and a minimum coal

yield of 25.2% for the life of mine of 20 years. The ash cut-off grade applied at the Kazakhstanskaya, Lenina, Shakhtinskaya and Tentekskaya mines

is 57% Ash with yield of 48.42% at average and the cut-off grade applied at the Saranskaya, Kuzembaeva, Kostenko and Abayskaya mines is 46%

Ash and yield of 36.7% at average. The minimum seam thickness cut-off used for all mines is 0.70 m.

15.As per S-K 1300, reported mineral reserves as of December 31, 2021 reflect ArcelorMittal's ownership interest at each individual business unit. Note

that 2020 mineral reserves were reported on a 100% basis.

The following table summarizes ArcelorMittal’s mineral

resources as of the end of the fiscal year ended December 31,

2021 in the aggregate, and by commodity and country and for

each property containing 10% or more of ArcelorMittal’s

combined measured and indicated mineral resources. Mineral

resource quantities are rounded to million tonnes. The reported

mineral resources reflect ArcelorMittal's ownership interest at

each individual business unit and are reported, exclusive of

mineral reserves, on a wet basis. Mineral resource quantities

are rounded to million tonnes. Unless indicated otherwise below,

iron ore mineral resources are estimated based on the same

long-term iron ore price forecast used for reserves, adjusted

based on the applicable revenue factor and adjusted upwards or

downwards for mine specific factors and further adjusted for

grade, logistics and other adjustments.

125

Management report

Millions of

Tonnes

% Fe 1

Millions of

Tonnes

% Fe1

Millions of

Tonnes

% Fe1

Millions of

Tonnes

% Fe1

Canada

1,563

28.3

1,684

30.0

3,247

29.2

1,704

32.0

AMMC2

85.0

1,563

28.3

1,668

29.7

3,231

29.0

1,551

28.8

Baffinland3

25.2

—

65.4

153

65.2

Mexico

28.8

31.6

121

30.8

35.4

Mexico (Excluding Peña Colorada)4

100.0

34.4

34.6

35.4

Peña Colorada - Mexico5

50.0

24.6

22.7

23.6

—

Brazil6

100.0

173

48.3

112

44.9

285

47.0

102

37.1

Bosnia7

51.0

—

31.2

—

31.2

—

40.5

Ukraine

33.5

419

34.2

495

34.1

52.8

Ukraine Open Pit8

95.1

32.5

401

33.3

474

33.2

36.7

Ukraine Underground9

95.1

56.0

55.6

55.5

Kazakhstan

676

35.7

44.9

733

36.5

48.0

Kazakhstan Open Pit10

100.0

666

35.5

41.4

704

35.8

37.1

Lisakovsk

655

35.3

33.6

674

35.3

—

32.3

Kazakhstan Underground11

100.0

52.3

52.0

52.1

50.4

South Africa12

100.0

—

54.4

48.0

Liberia13

85.0

—

1,036

37.9

1,036

37.9

952

39.5

India14

60.0

—

57.7

—

Total Iron Ore

2,523

31.8

3,476

34.3

5,999

33.2

2,885

35.3

% of

Ownership

Interest

Measured Mineral

Resources

Indicated

Mineral Resources

Measured &

Indicated Mineral

Resources

Inferred

Mineral Resources

Coal

Millions of

Tonnes

% Ash

Millions of

Tonnes

% Ash

Millions of

Tonnes

% Ash

Millions of

Tonnes

% Ash

Kazakhstan - Karaganda15

Saranskaya

100.0

376

26.5

137

26.9

513

26.6

28.9

Kuzembaeva

100.0

316

27.0

196

29.0

512

27.8

31.0

Kazakhstanskaya

100.0

211

22.7

23.8

308

23.0

25.4

Lenina

100.0

155

22.3

23.8

211

22.7

25.2

Shakhtinskaya

100.0

21.0

19.5

19.9

19.1

Tentekskaya

100.0

188

20.3

21.8

262

20.7

24.4

Kostenko

100.0

379

26.8

285

26.8

664

26.1

Abayskaya

100.0

120

26.0

101

25.9

221

26.3

Total Coal

1,760

25.1

982

26.0

2,742

25.4

304

26.8

Iron Ore

% of

Ownership

Interest16

Measured Mineral

Resources

Indicated

Mineral Resources

Measured &

Indicated Mineral

Resources

Inferred

Mineral Resources

1.Unless stated otherwise, % Fe represents total Fe content for all sites except Peña Colorada where it represents magnetic Fe content only.

2.Mineral resources for AMMC are estimated at a cut-off grade applied for all deposits is 15% Fe with a mass recovery of 34.9%

3.Mineral resources for Baffinland are estimated at the cut-off grade of 55% and a mass recovery of 100%.

4.Mineral resources for Last Truchas are reported at a cutoff grade of 10% Fe magnetic and Fe recovery of 90%, and mineral resources for San José

are reported at a cutoff grade of 27% Fe and Fe recovery of 75%.

5.Mineral resources for Peña Colorada are estimated at the cut-off grade of 10% Fe magnetic. Fe recovery at the mineral resource average head

grade is 78.7%.

Management report

126

6.Mineral resources for Serra Azul are estimated at 40% Fe cut-off grade and a mass recovery of 52.8% for friable material, and 29% Fe cut-off grade

and a mass recovery varying from 33% to 45% for compact material. Mineral resources for Andrade are reported at a cutoff grade of 20% Fe and

variable a mass recovery of 70.6% at average.

7.Mineral resources for ArcelorMittal Prijedor are estimated based on a price of $24 per tonne of concentrate, calculated based on assumptions of a

non-marketable material supplied to its integrated steel plant, at 30% Fe cut-off grade and mass recovery of 75%.

8.Mineral resources for Ukraine Open Pit are estimated at a cut-off grade applied at Novokryvorizke deposit is 12% Fe, and at Valyavkinske deposit

16% Fe.

9.Mineral resources for Ukraine Underground mine are estimated based on a price of $39.3 per tonne of product and a revenue factor of 1.5, at a cut-

off grade of 48% Fe and a mass recovery of 100%.

10.Mineral resources for Kazakhstan Open Pit mines are estimated based on a price averaging $20 per tonne of products with a 1.5 revenue factor

applied, calculated based on assumptions of a non-marketable material supplied to its integrated steel plant. Atansore mineral resources are

reported at a 20% Fe cut-off grade and a mass recovery of 53.9%, Kentobe are reported at a 20% Fe cut-off grade and a mass recovery of 86.7%,

and Lisakovsk are reported at a 30% Fe cut-off grade and a mass recovery of 48.3%.

11.Mineral resources for Atasu are estimated based on a price of $24.7 per tonne of concentrate with a 1.5 revenue factor applied calculated based on

assumptions of a non-marketable material supplied to its integrated steel plant, at 40% Fe cut-off grade and a mass recovery of 60%.

12.Mineral resources for Thabazimbi are estimated at a 40% Fe cut-off grade and metallurgical recovery of 60%.

13.Mt. Tokadeh, Mt. Gangra and Mt. Yuelliton mineral resource are estimated at a cut-off grade of 40% Fe and mass recovery of 58.9% for the oxide

and transitional material and 30% Fe cut-off grade and mass recovery of 44.8% for the fresh material.

14.Mineral resources for Thakurani are estimated at a 45% Fe cut-off grade and a mass recovery of 98%.

15.Mineral resources of coal for the Kazakhstanskaya, Lenina, Shakhtinskaya, Tentekskaya, Saranskaya, Kuzembaeva, Kostenko and Abayskaya

mines are estimated by applying an ash cut-off grade of 40% Ash, a coal seam dip of less than 30°, and a minimum coal seam thickness of 0.70 m.

limited to coal that after the application of modifying factors, could meet the mineral reserves maximum raw ash and yield, with a coking coal sale

price of US$ 128.00 per tonne, equating to a minimum coal yield of 25.2%.

16.As per S-K 1300, reported mineral resources as of December 31, 2021 reflect ArcelorMittal's ownership interest at each individual business unit.

Note that 2020 mineral resources were reported outside the United States on a 100% basis.

Cautionary note concerning mineral reserve and mineral

resource estimates: With regards to ArcelorMittal’s reported

resources, investors are cautioned not to assume that any or all

of ArcelorMittal’s mineral deposits that constitute either

‘measured mineral resources’, ‘indicated mineral resources’ or

‘inferred mineral resources’ (estimated in accordance with S-K

1300, which is consistent with the CIM (2014) definitions) will

ever be converted into mineral reserves. There is a reasonable

level of uncertainty as to the existence of ‘inferred mineral

resources’ and their economic and legal feasibility, and it should

not be assumed that any or all of an ‘inferred mineral resource’

will ever be upgraded to a higher category.

Internal Controls

ArcelorMittal mining and exploration properties employ robust

quality control and quality assurance processes and procedures

to ensure the validity of data utilized in the estimation of mineral

resources and mineral reserves.

ArcelorMittal has developed an Orebody Knowledge and

Management Framework, comprising a comprehensive set of

internal guidelines and management standards that govern the

resource and mining activities conducted at its properties. The

framework and its associated documents describe the systems

and processes to be developed and implemented at

ArcelorMittal properties to effectively manage activities and data

for the estimation and mining of its mineral resources and

reserves. This framework and its associated documents are

compiled and managed by a centralized corporate team of

experienced and qualified technical experts and is reviewed and

updated on a regular basis.

Databases are compiled and managed by experienced

personnel engaged directly by the operating entities and

business units, following documented procedures. Sample data

derived from activities such as, but not limited to, exploration

drilling and field sampling, is subject to thorough sample security

and integrity protocols, field and laboratory quality assurance

and quality control processes, and data validation procedures.

Field quality control processes and procedures will vary based

on the specific nature of the drilling or sampling program, but will

nominally include the use of duplicate samples, blank control

samples and certified reference materials. Samples processed

and analyzed at internal and external laboratories are subject to

additional laboratory quality control processes including, but not

limited to, duplicate samples and certified reference materials.

Data verification workflows are employed for each program to

ensure the quality and integrity of all data incorporated into the

databases.

Historical data is subject to rigorous verification processes prior

to inclusion in resource estimation databases. These

procedures can include, but are not limited to, external database

validation by independent parties, internal database audits, and

spatial and statistical analyses. Where historical data cannot be

verified to the satisfaction of the relevant qualified person, it is

excluded from the databases used in the estimation processes.

127

Management report

Where applicable, all mineral resource and mineral reserve

estimates are reconciled against mine production data and

operational results. Geological interpretations and estimation

parameters are updated, and modifying factors, cost and price

assumptions validated and adjusted.

There are inherent risks associated with all mineral resource

and mineral reserve estimations see "Introduction—Risk Factors

—Risks associated with ArcelorMittal's Mining Activities".

Management report

128

Operating and financial review

Key factors affecting results of operations

Overview

The steel industry, and the iron ore and coal mining industries,

which provide its principal raw materials, have historically been

highly cyclical. They are significantly affected by general

economic conditions, consumption trends as well as by

worldwide production capacity and fluctuations in international

steel trade and tariffs. This is due to the cyclical nature of the

automotive, construction, machinery and equipment and

transportation industries that are the principal consumers of

steel. A telling example of the industry cyclicality was the sharp

downturn in 2008/2009 after several strong years, which was a

result of the global economic crisis. Similarly, the current

COVID-19 pandemic caused a sudden and sharp decline in

economic activity and steel consumption globally and

particularly in the Company's core developed markets.

The COVID-19 pandemic had a significant impact on

ArcelorMittal’s results in 2020. In the European Union (“EU”),

the impact of widespread national lockdowns during March, April

and into May had a significant negative effect on output across

the major steel consuming industries. Manufacturing declined

sharply, with almost all automotive plants closed during the early

part of the lockdown with production down over 60% year-on-

year during the second quarter. Industrial activity recovered

sharply from April lows, and steel demand also recovered

strongly through the second half of 2020, with consumption

estimated to have declined by just over 10% year-on-year in

2020. While demand did not fall as low as seen in 2009 as

inventory levels were much leaner than prior to the global

financial crisis, demand declined to levels not seen since the

Eurozone debt crisis in 2012, with a significant impact on

profitability in 2020 from the Company’s largest market

(Europe). Underlying steel demand in the United States was

similarly impacted by the fall-out from the COVID-19 pandemic,

with manufacturing output down over 15% year-on-year in the

second quarter of 2020, especially light vehicle (-61% year-on-

year) and machinery output (-19%). While construction was less

affected, remaining close to 2019 levels, energy markets

remained subdued and overall steel consumption is estimated to

have declined by 18% in 2020, negatively impacting the

Company’s deliveries and profitability.

The sharp global recession in 2020 significantly reduced global

demand for steel but the impact on demand was not prolonged,

with output in developed markets rebounding strongly during the

second half of 2020. Indeed, output of key steel consuming

sectors in the U.S. was almost back to pre-pandemic levels by

December 2020. As expected, the impact of restrictions on

physical interaction, implemented in various regions at times

through 2021, due to high rates of COVID-19 infections,

predominantly impacted services. However, the rebound in

manufacturing in developed markets was held back by a lack of

available parts due to global supply chain issues. While the

Company believes that these issues will be resolved in 2022,

and that the need to rebuild inventories of finished goods will

support real demand, there remains a risk that supply chain

issues will take longer than expected to ease or will recur. This

is especially true if China increases its use of localized

lockdowns, negatively impacting exports of needed parts and

global supply chains. The scarcity of semi-conductors had a

significant impact on auto production in 2021, and while

availability has begun to improve, the situation highlights the

tightness of supply chains globally. While it appears that the

combination of high vaccination and booster rates and lower

severity of Omicron variant means it is unlikely that countries will

again implement significant restrictions, there is still a risk of

renewed restrictions or lockdowns, if more transmissible

variants spread globally.

Historically, the demand dynamics in China have also

substantially affected the global steel business, mainly due to

the significant changes in net steel exports. Despite the

pandemic impacting China significantly in February and March

2020, increased government use of special local and sovereign

bonds to fund increased investment, mainly in infrastructure

projects, supported a robust recovery in steel consumption.

Manufacturing output also rebounded strongly, helped by robust

demand globally for Chinese products and was back to a trend

growth early into the second half of 2020. While Chinese steel

demand surprised on the upside in 2020, growing around 9%

year-on-year, policy support was quickly removed and steel

demand weakened sharply in 2021, declining year-on-year in

the second half of the year. The Company had expected

Chinese steel demand to decline in the medium-term, as

infrastructure spending has been front-loaded and real estate

demand was expected to weaken structurally due to lower levels

of rural-urban migration. If this did not coincide with the renewed

capacity closures, this would have been expected to have a

negative impact on steel prices and spreads.

As real estate accounts for approximately 25% of the Chinese

GDP (including indirect linkages to sectors such as steel,

cement, glass, and metal products production), the weakness of

the real estate sector has led the government to implement

measures to soften the decline in real estate and stabilize GDP

growth in 2021. However, the risk of a more serious decline

remains, as seen in the U.S. (2006 to 2009) and Spain (2007 to

2010) where residential investment declined by around 50%

peak to trough. Such a decline would have a significant negative

impact on the Chinese economy and steel consumption, and

likely lead to rising steel exports from China. See “Risk Factors

—Risks related to the global economy and mining and steel

industry—Excess capacity and oversupply in the steel industry

129

Management report

and in the iron ore mining industry have in the past and may

continue in the future to weigh on the profitability of steel

producers, including ArcelorMittal”.

Unlike many commodities, steel is not completely fungible due

to wide differences in its shape, chemical composition, quality,

specifications and application, all of which affect sales prices.

Accordingly, there is still limited exchange trading and uniform

pricing of steel, whereas there is an increase in trading of steel

raw materials, particularly iron ore. Commodity spot prices can

vary, which causes sales prices from exports to fluctuate as a

function of the worldwide balance of supply and demand at the

time sales are made.

ArcelorMittal’s sales are made based on shorter-term purchase

orders as well as some longer-term contracts to certain

industrial customers, particularly in the automotive industry.

Steel price surcharges are often implemented on steel sold

pursuant to long-term contracts to recover increases in input

costs. However, longer-term contracts with low steel prices will

not reflect increases in spot steel prices that occur after contract

negotiation. Spot market steel, iron ore and coal prices and

short-term contracts are more driven by market conditions.

One of the principal factors affecting the Company’s operating

profitability is the relationship between raw material prices and

steel selling prices. Profitability depends in part on the extent to

which steel selling prices exceed raw material prices, and

specifically the extent to which changes in raw material prices

are passed through to customers in steel selling prices.

Complicating factors include the extent of the time lag between

(a) the raw material price change and the steel selling price

change and (b) the date of the raw material purchase and of the

actual sale of the steel product in which the raw material was

used (average cost basis). In recent periods, steel selling prices

have not always been correlated with changes in raw material

prices, although steel selling prices may also be impacted

quickly due in part to the tendency of distributors to increase

purchases of steel products early in a rising cycle of raw

material prices and to hold back from purchasing as raw

material prices decline. With respect to (b), as average cost

basis is used to determine the cost of the raw materials

incorporated, inventories must first be worked through before a

decrease in raw material prices translates into decreased

operating costs. In some of ArcelorMittal’s segments, in

particular Europe and NAFTA, there are several months

between raw material purchases and sales of steel products

incorporating those materials. Although this lag has been

reduced in recent years by changes to the timing of pricing

adjustments in iron ore contracts, it cannot be eliminated and

exposes these segments’ margins to changes in steel selling

prices in the interim (known as a “price-cost squeeze”). This lag

can result in inventory write-downs, as occurred in 2015 and

2019 due to sharp declines in steel prices. In addition,

decreases in steel prices may outstrip decreases in raw material

costs in absolute terms, as has occurred numerous times over

the past few years, for example throughout 2019 as well as the

fourth quarters of 2015, 2016 and 2018. In early 2020, steel

spreads improved from the weak levels during the second half

of 2019 but the negative impact of the pandemic on steel

demand in the second quarter of 2020 led to lower spreads as

steel prices declined, while raw material costs, especially iron

ore, remained broadly stable underpinned by the strong rebound

in Chinese demand. In the fourth quarter of 2020 and through

the first half of 2021, global steel prices surged toward historical

highs in many markets, due in part to increased demand and a

slower increase in supply, resulting in increased steel spreads

and higher profitability. During the second half of 2021, despite

strong underlying demand, a lack of inputs (e.g.

semiconductors) caused real steel demand to stagnate while

steel supply continued to increase. This led steel prices to

decline, faster than any decline in raw material costs leading to

spread compression, and will lead to a lower profitability once

these lower priced steel orders are delivered. However, this will

be partially offset by an increase in the average price of annual

automotive contracts in 2022 over 2021.

The Company’s operating profitability has been particularly

sensitive to fluctuations in raw material prices, which have

become more volatile since the iron ore industry moved away

from annual benchmark pricing to quarterly pricing in 2010.

Volatility on steel margins aside, the results of the Company’s

mining segment (which sells externally as well as internally) are

directly impacted by iron ore prices. The disaster at Vale’s

Brumadinho dam at the end of January 2019, coupled with

strong steel production in China during the first half of 2019,

pushed the price up to highs above $120 per tonne ("/t") in July

2019. Vale brought back 35 million tonnes of supply by the end

of 2019, allowing the price to decline to an average of $92/t in

December 2019 as supply better matched levels of demand.

Despite the significant hit to Chinese downstream steel

consumption in February and March 2020, iron ore prices fell

only mildly to an average of $87/t in February 2020 and

remained relatively stable through March and April 2020.

However, the strong recovery of Chinese steel consumption,

and the beginnings of a rebound in demand in developed

markets, coupled with some supply issues saw prices rebound

to over $100/t by June 2020. As world ex-China demand and

production rebounded during the second half of 2020, alongside

continued strong steel production in China, iron ore prices

continued to climb, rising to an average of $134/t in the fourth

quarter of 2020 and ending 2020 at over $160/t. Robust

recovery of steel demand and production continued in the first

quarter of 2021 with iron ore prices rising further to an average

of $167/t. In the second quarter of 2021, the seaborne iron ore

price jumped to over $200/t as rising steel production in China

coincided with tight supply, significantly increasing the

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130

profitability of ArcelorMittal’s mining operations. Since mid-2021,

iron ore prices have fallen back to an average of $111/t in the

fourth quarter of 2021 and falling to below $90/t during

November 2021 as Chinese crude steel production declined. A

significant further decrease in iron ore prices, which may occur,

for example, if Chinese demand weakens sharply, would

negatively impact ArcelorMittal’s revenues and profitability. See

“Introduction—Risk factors—Risks related to the global

economy and the mining and steel industry—Protracted low

steel and iron ore prices would have an adverse effect on

ArcelorMittal’s results of operations.”

Economic environment

The COVID-19 pandemic caused a collapse in global activity,

with the global economy contracting by 3.5% in 2020, the

largest decline since the global financial crisis (“GFC”) in

2008/09. While the initial impact of the pandemic on the global

economy during the first half of 2020 was much sharper than

during GFC, the immediate recovery throughout the third quarter

was a lot faster, before moderating in the fourth quarter as

momentum was dampened by a resurgence of infections.

Globally, while both services and manufacturing sectors were

initially impacted by various social restrictions implemented in

order to curb the spread of the virus, manufacturing recovered

much more strongly throughout 2020. Following the decline in

GDP during the crisis in 2020, the global economy largely

recovered through 2021, with GDP back to approximately 2%

above 2019 pre-pandemic levels by year-end. However, the

recovery lost momentum during the second half of 2021 and

became increasingly imbalanced. Parts of the global economy,

particularly advanced economies, rebounded more quickly due

to vaccine availability, supported by strong fiscal stimulus which

led to significant excess savings and strong demand for

manufactured goods throughout the year. Meanwhile, other

parts of the global economy are at risk of being left behind,

particularly many developing economies, where vaccination

rates are low, and firms and employees in contact-intensive

service sectors, where demand has yet to recover fully. In

addition, global supply chains were unable to meet strong

consumer demand due to persistent supply bottlenecks, rising

input costs and the continued disruption effects of new

COVID-19 variants. As a result, stronger and longer-lasting

inflation pressures have emerged in all economies, at an

unusually early stage of the growth cycle, and labor shortages

are appearing, even though employment and hours worked are

still yet to recover fully.

In the U.S., GDP in 2021 recovered to 2% above pre-pandemic

levels with 5.6% growth year-on-year, driven mainly by strong

consumer spending. Fiscal stimulus in 2020 – estimated at more

than 30% of GDP had resulted in significant accumulated

excess savings, of more than 10% of GDP, the highest among

developed markets. As a result of the release in pent-up

consumer demand post-reopening, retail sales increased to

around 15% above pre-pandemic levels throughout the 2021,

with spending on goods remaining elevated, while services

recovered to pre-pandemic levels. Despite strong goods

consumption and orders around 10% above pre-pandemic

levels, manufacturing output (at only 2% above pre-pandemic

levels) was constrained by global supply bottlenecks, which

were particularly acute in the automotive sector, where global

shortage of semi-conductors led to vehicle assembly remaining

15% below 2019 pre-pandemic levels. As a result of constrained

supply that was unable to meet strong demand, inflationary

pressure has built, with the inflation rate increasing to 7% at the

end of the year. While the labor market recovery continues to

progress, there are signs of persistent inflationary pressures due

to rising wage pressures in some sectors, notably in the leisure

and hospitality sector, as well as in the transport and

warehousing sectors. As a result, the tight labor market

combined with overheating demand, to push up wages, thereby

sustaining inflationary pressure even after supply-bottlenecks

have begun to subside.

EU27 (Europe excluding UK) GDP grew an estimated 5% year-

on-year, returning to pre-pandemic levels by the end of third

quarter of 2021. The economic recovery in Europe was,

however, weaker than in the U.S. Due to smaller fiscal stimulus

(approximately 15% of GDP), growth was similarly driven by

strong consumer spending, pushing retail sales to a level

approximately 5% above the pre-pandemic level. While

economic activity rebounded sharply in the first half of 2021,

growth slowed during the second half of the year due to a series

of supply chain bottlenecks, particularly in the automotive sector,

in addition to further tightening of restrictions towards year-end

due to renewed intensification of COVID-19 cases (Delta variant

wave, followed by emergence of the more infectious Omicron

variant). Manufacturing output, which had recovered to pre-

pandemic levels in 2020, then stagnated at those levels as

gradual growth in other sectors offset very weak automotive

assembly, which slumped to more than 30% below pre-

pandemic levels in the second half of the year, due to

semiconductor shortages. Similar to the U.S., firms’ inability to

increase their production in line with the rapid growth in demand

for manufactured goods led to an imbalance between supply

and demand, putting upward pressure on prices. While inflation

increased to more than 5% in the EU27, as the strength of

consumer demand is not as strong as in the U.S., the risk of

high inflation appears to be lower in the EU. More importantly,

the labor market in the EU is not as tight as in the U.S.,

therefore, the risk of persistent inflation driven by a wage-price

spiral is structurally lower.

In China, throughout the year, preventive measures remained in

place to keep the spread of the virus under control and sporadic

outbreaks have been suppressed by stringent, localized

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Management report

lockdowns, mass testing and isolation measures. In 2021, GDP

grew by 8.1% year-on-year, with growth slowing to under 5%

year-on-year in the second half of the year after double digit

growth in the first half, compared to the pandemic impacted

output early in 2020. While industrial output growth slowed

through the year, due to the stringent implementation of

environmental targets and power cuts, the services sector

recovery continued to gain momentum. Export growth remained

strong as overseas economies continued to rebound, although it

was mildly impacted by COVID-19-related port closures.

Investment growth is slowing as some of its key components

such as real estate and infrastructure investment have

weakened. Regulations to rein in real estate investment (the so-

called three red lines related to financial leverage at developers,

with caps on bank lending), tightened liquidity conditions for

property companies alongside declining sales, contributed to

some large developers defaulting on their debt (e.g.

Evergrande). The recovery of consumption has been more

gradual, but recent strong growth in online sales indicates that

consumption is gradually rebounding. Downside risks to growth

are increasing and likely to continue in 2022, due to the

emergence of Omicron variant that is more contagious and

more difficult to trace, leading to more restrictions and causing

significant disruption to supply chains. Given the rapid spread of

new variants and the high share of asymptomatic carriers,

restrictions under zero-tolerance policy are increasingly

challenged as an effective way to deal with the ongoing

COVID-19 pandemic and if more localised lockdowns are

required, then Chinese economic growth will slow further in

2022.

In 2021, Brazil's GDP is estimated to have grown 4.6% year-on-

year but is likely to slow sharply in 2022. After GDP returned to

its pre-pandemic peak in February 2021, earlier than most

emerging markets, helped by lax mobility restrictions and ample

fiscal support, GDP has since broadly stagnated throughout

2021. This is due to continued recovery in services being offset

by weaker industrial output exacerbated by global supply

bottlenecks. Inflation has accelerated through the second half of

2021, negatively impacting the recovery of wholesale trade,

retail sales and services. Lower consumer purchasing power

and higher interest rates have dented the upturn in consumer

and business confidence, slowing the recovery of domestic

demand. Meanwhile, lack of reforms and increasing risk of

unsustainable public debt – currently at more than 80% of GDP

– will continue to impact medium-term growth.

In Russia, while the economy made a strong recovery in the first

half of 2021, growth slowed slightly during the second half of the

year, due to pandemic infections and tighter restrictions. GDP

growth for 2021 is estimated at approximately 4% year-on-year,

with fourth quarter GDP similar to pre-pandemic levels. Resilient

manufacturing output (approximately 5% above pre-pandemic

levels) and mining (back to pre-pandemic levels) offset subdued

services sectors activity, which was impacted by rising infection

and restrictions. While retail sales growth also slowed from its

peak in May 2021, labor market conditions have remained

strong, with the unemployment rate falling to a record-low of

4.3% and wage growth close to 10% year-on-year.

In Turkey, growth has been strong with GDP increasing

approximately 10% year-on-year in 2021, with particularly strong

growth during the first half of the year. However, towards the

end of the year, risk of a crisis has intensified due to very high

inflation (36% year-on-year in December) and an erosion of the

central bank's monetary policy credibility. This has led to large

depreciation in the lira, which has increased Turkey’s economic

vulnerability, due to higher external debt. In addition, the

decision to compensate holders of lira for exchange rate losses,

while mitigating the risk of further lira depreciation, risks pushing

exchange rate risks on to public finances, which until now had

been a point of strength for the economy, relative to other

emerging markets.

After reaching its peak levels at the beginning of 2021,

approximately 6% above pre-pandemic levels, global

manufacturing output stagnated during the first half of 2021 and

started to decline during the third quarter of 2021 before

recovering toward year-end as supply bottlenecks began to

improve. This stagnation was partly due to declining

manufacturing output in China, as the boost from infrastructure

in 2020 waned and power cuts impacted heavy industry and

restrictions to curb real estate developer’s over-borrowing

impacted the construction sector. Meanwhile, world ex-China

manufacturing output had recovered to pre-pandemic levels at

the beginning of the year. However, a series of global supply

chain bottlenecks, constrained further growth in industrial

production, particularly the lack of semiconductors which

significantly negatively impacted automotive output. As a result,

world ex-China manufacturing output stagnated throughout the

year, causing inventory of finished goods to fall to historic lows,

as demand outstripped supply. The global supply chain issue

has impacted both the U.S. and EU, with output in the EU

stagnated at pre-pandemic levels, while in the U.S. output

stayed at approximately 2% above early 2020 levels.

Following a slight decline in 2020 – the first decline since 2015,

global apparent steel consumption (“ASC”) is estimated to have

increased by approximately 4% in 2021, as the global economy

rebounded post-pandemic. The growth was driven by a rebound

in real steel demand growth as steel consuming sectors

attempted to increase the output to meet strong consumer

demand, coupled by a strong inventory rebuild at end users. In

China, after being one of the few countries to see steel demand

growth in 2020, at 9% year-on-year, ASC is estimated to have

declined by around 2% in 2021, due to a combination of waning

infrastructure demand, more stringent policy to curb property

Management report

132

developers’ credit and environmental policy to cap output of

heavy industry. In contrast, vaccine progress and removals of

restrictions post-pandemic saw ASC increase strongly in the rest

of the world ex-China, estimated more than 11% year-on-year

growth. Relatively stronger fiscal stimulus than in the rest of

developed world, meant U.S. real steel demand increased

strongly, and coupled with inventory restocking, resulted in an

increase in ASC of around 21% year-on-year. While flat steel

demand grew 19%, negatively impacted by weakness in the

automotive industry, long products and pipe and tubes both

grew around 25% year-on-year. In EU27, while real demand has

weakened in the second half of 2021 due to supply bottlenecks

after growing strongly during the first half of 2021, overall ASC

was supported by rising inventory, as high domestic steel prices

have led to rising imports. ASC is estimated to have increased

by approximately 15% year-on-year in 2021.

Most developing markets also saw ASC increase in 2021,

particularly India (17% year-on-year) and to lesser extent, the

Association of Southeast Asian Nations (ASEAN, 8% year-on-

year) and Russia (3% year-on-year). Meanwhile, ASC increased

significantly in both Brazil (23% year-on-year) and Turkey (13%

year-on-year). However, this is unlikely to be sustainable as the

strong steel demand in Brazil was prompted by a fiscal stimulus

leading to rising risks from unsustainable public debt. While in

Turkey, it was caused by a strong credit cycle, that has caused

overheating of demand and sharp lira depreciation.

Source: GDP and industrial production data and estimates sourced from Oxford

Economics January 25, 2022. ASC data for U.S. from American Iron and Steel

Institute (AISI) to November 2021, estimates for December 2021. ASC data for

Brazil from Brazilian Steel Institute to November 2021, estimates for December

2021. ASC data for EU27 from Eurofer to October 2021, estimates for November

and December 2021. All estimates are internal ArcelorMittal estimates.

Steel production

World steel production grew 3% in 2019, an increase of

approximately 55 million tonnes to 1.87 billion tonnes, primarily

driven by a 7.9% year-on-year increase in Chinese production,

whereas world ex-China production fell 2% year-on-year. In

2020, world steel production stagnated as a result of demand

disruption caused by the global COVID-19 pandemic, led to a

decline of 65 million tonnes (mt) in world ex-China production

(-7.6% year-on-year) to 800mt, the lowest production since

2010, offset by a robust 6.5% year-on-year increase in Chinese

production. In 2021, as vaccinations allowed the global

economy to recover from the pandemic, world steel production

increased by 3.8% year-on-year. In China, steel production

declined by 3% year-on-year to 1.03 billion from 1.06 billion

tonnes, due to tighter restrictions on the real estate sector and

an environmental policy to cap output of heavy industry.

However, this was more than offset by a sharp rebound in world

ex-China production, that increased by more than 100 mt in

2021 (+13% increase year-on-year), to a historical high, that

was 4% above 2019 pre-pandemic levels. Developed markets

saw a particularly strong increase (+14% year-on-year) with

production back to pre-pandemic levels, and particularly strong

growth in the U.S. (+18%), EU27 (+16%) and Japan (+16%). As

a result, China’s share of global steel production decreased to

54% in 2021 (2020: 58%, 2019: 54%) while others’ share

broadly rose back to their pre-pandemic levels, including East

Asia (10% from 9% in 2020 and 10% in 2019), EU28 (EU

including UK) (8.5% from 7.5% in 2020 and 8.5% in 2019),

NAFTA (6% from 5% in 2020 and 6% in 2019), India (6.5% from

5% in 2020 and 6% in 2019), while the CIS saw its share remain

broadly stable over the past three years at around 5.5%.

In world ex-China, a robust recovery in underlying steel

demand, supported by restocking last year, led to a strong

growth in steel production, with production of 901 million tonnes,

significantly above production in 2020 (800 million tonnes) and

back above the 866 million tonnes produced in 2019. EU27

production rebounded to 153 million tonnes, with significant

year-on-year growth during the first half of the year relative to

weak production during the first half of 2020 caused by

widespread lockdowns. In 2021, production was back above its

2019 level (150 million tonnes) but still below average

production levels seen in the prior decade (2010-19

approximately 158 million tonnes per annum). In North America,

production increased by 17% year-on-year to 117 million tonnes

– almost back to 2019 production levels (119 million tonnes),

with production in Mexico (18 million tonnes) back to pre-

pandemic levels, while production in the U.S. (86 million tonnes)

and Canada (13 million tonnes) was slightly below the pre-

pandemic levels. Production in developed Asia grew 11% year-

on-year to 190 million tonnes (Japan: 96 million tonnes – South

Korea: 71 million tonnes – Taiwan: 23 million tonnes), similarly

almost back to 2019 production levels (193 million tonnes).

Steel production in South America rose strongly in 2021 up 18%

year-on-year to 46 million tonnes, significantly above 2019

levels (42 million tonnes). This was largely driven by Brazil,

where steel production stood at 36 million tonnes in 2021 (2019

levels: 33 million tonnes) due to significant fiscal stimulus in

2020, which boosted the economy and steel consumption above

pre-pandemic trends. In CIS, steel production increased 5%

year-on-year to 106 million tonnes in 2021, i.e., above 2019

levels after production was broadly stable in 2020 despite the

pandemic. Finally, some regions saw production increase in

both 2020 and 2021, for example Turkey, where steel production

rose by 13% year-on-year in 2021 after a 6% increase in 2020.

However, while production in 2021 at 40 million tonnes was well

above pre-pandemic levels (2019: 34 million tonnes), production

had fallen in 2019 due to the Lira crisis. Elsewhere production

has continued to rise year over year in ASEAN, with production

at 52 million tonnes in 2021, over 20% above 2019 levels.

Source: Steel production data are compiled using World Steel data for 61 countries

for which monthly data is available (which together account for 97% of World

production). Production data is available for all months of 2021.

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Management report

Trade and import competition

Europe

There has been a trend of imports growing more strongly than

domestic demand in the EU since 2012. Apparent steel

consumption ("ASC") increased approximately 13% between

2012 and 2019, while finished steel imports increased by

approximately 70%, taking market share from domestic

producers. Over this period total finished imports have risen

from almost 14 million tonnes in 2012 to over 23 million tonnes

in 2019, causing import penetration to rise to 17% in 2019 from

11% in 2012. In 2020, widespread lockdowns across Europe in

order to curb the spread of COVID-19 infections led to total steel

demand falling by around 11% year-on-year in 2020, with

imports falling similarly by 11%, to approximately 24 million

tonnes, leading to a broadly stable import penetration of 16%.

In 2021, a global synchronized rebound in economic activities

following the significant lockdowns related to the COVID-19

pandemic led to a strong recovery in steel demand in Europe. In

2021, ASC was estimated to have increased by approximately

15% year-on-year to a level which was approximately 2% above

pre-COVID-19 (2019 levels). In addition to strong demand,

elevated steel prices attracted increased imports into the EU,

with total imports estimated to have increased by around 40%

year-on-year. As a result, import penetration increased to

approximately 19% in 2021 from 16% in 2020. Import

penetration for both flat and long products increased, with flat

products to approximately 24% (2020: 20%) and long products

13% (2020: 11%).

Traditionally, imports into EU27 have come from Commonwealth

of Independent States (“CIS”), China, Turkey, developed Asia

and the UK, with these regions accounting for approximately

76% of imports in 2020, similar to the average over the prior five

years. While imports declined in 2020 due to the COVID-19

pandemic, 2021 has seen a strong rebound to 2019 levels from

most regions except the UK and China. Imports from the UK

declined by approximately 15% year-on-year in 2021, with

import share down to 6% from its average of approximately 9%

in the prior five years. The share of Chinese origin imports

continued to decline in 2021 to only 5%, down from its peak of

24% in 2015, as imports remained at a similar level to 2020 and

approximately 30% below 2019 levels. Meanwhile in some

regions such as CIS, developed Asia and India, imports have

increased to above 2019 levels but import shares are still

marginally down to 25% in the CIS (2020 share: 26%). Strong

European steel prices also attracted more imports from Turkish

producers, which supported by a weaker Lira, increased imports

by approximately 30% year-on-year, however, Turkish imports

share decreased slightly to 17%. In developed Asia, despite

imports increasing by 30% year-on-year to above pre COVID-19

pandemic levels, stronger imports from elsewhere mean the

import share maintained at its 5-year average of 14% in 2021.

Overall, traditional importers' (CIS, China, developed Asia,

Turkey and the UK) import share fell to only 68% in 2021 from

76% in 2020. This was due to a significant increase in imports

from elsewhere in Asia, with imports from India more than

doubling, increasing their import share from 8% in 2020 to 11%

in 2021. Similarly, imports increased sharply from ASEAN, rising

from under half a million tonnes in 2020 to approximately 1.8

million tonnes in 2021, pushing their import share to 5% from

2% in the previous year.

See “Business overview—Government regulations—Foreign

trade” and “Risk factors—Risks related to the global economy

and the mining and steel industry—Unfair trade practices, import

tariffs and/or barriers to free trade could negatively affect steel

prices and ArcelorMittal’s results of operations in various

markets.”

Source: Eurostat imports to October 2021, estimate for November and December

2021. ASC data from Eurofer to October 2021, internal company estimates for

November and December 2021. All historical data now refers to EU27 after UK left

the EU.

United States

Finished steel imports peaked in 2014 at almost 30 million

tonnes with an import share of 28%, before declining to

approximately 18 million tonnes in 2019 (or an import

penetration of 19%), mainly due to the implementation of

Section 232 in 2018, adding a 25% tariff on most of the imports

from outside USMCA (United States-Mexico-Canada

Agreement). In 2020, the decline in real steel demand due to the

COVID-19 pandemic pushed finished steels imports to fall by

25% year-on-year to approximately 14 million tonnes, with

import penetration declining to 17%.

Similar to Europe, a combination of a strong post-pandemic

steel demand recovery and elevated steel prices meant imports

in 2021 increased strongly by almost 50% year-on-year, to

around 21 million tonnes – higher than the pre-pandemic levels

of 18 million tonnes in 2019. Meanwhile, ASC also increased

strongly by approximately 21% year-on-year and recovered to

2019 (pre COVID-19) levels of approximately 97 million tonnes.

As a result of imports growing much more strongly than steel

demand, import penetration increased to approximately 21% in

2021 from 17% in 2020 (pre-pandemic 2019 share was

approximately 19%). The increase in import penetration was

more in flat products as imports grew over 60% year-on-year,

than long products where imports grew by around 35% and

import share remained broadly stable.

Traditionally, only around one-third of U.S. finished steel imports

came from within USMCA, however since 2019 imports from

Canada and Mexico have increased their share, mainly at the

expense of Europe. After remaining stable in 2020 (compared to

2019) while imports from all other major regions declined,

imports of finished steels from USMCA increased by

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134

approximately 50% year-on-year in 2021, maintaining a

historically high import share of 45%. Imports increased strongly

from both Canada (approximately 48% year-on-year) and

Mexico (53% year-on-year), with Canada accounting for 33% of

U.S. imports while Mexico was accounted for 12% share, both

close to 2020 levels. By contrast imports from Europe (EU27,

Norway, Switzerland, and UK) have lost their share, declining to

only 13% in 2021 as compared to 15% in 2020 and 19% in 2019

(pre COVD-19). Developed Asia import share has remained

broadly stable at 20% in 2021, down only slightly from 21% in

2020 and 22% in 2019.

While there was a significant increase in imports from Africa,

ASEAN, CIS, and India, with all regions seeing exports into the

US more than double, this only partly offset the decline seen in

2020. Indeed, these regions combined import share doubled to

10% in 2021, from 5% in 2020 but remained lower than the 12%

import share they accounted for in 2019.

China

Chinese finished steel exports increased to 71.6 million tonnes

in 2021, up 35% year-on-year from 53.1 million tonnes in 2020,

which had been the lowest annual total since 2011. While this is

usually a cause for concern, it was mainly due to a shortage of

steel on global markets during the first half of 2021. Indeed,

Chinese exports were lower during the second half of 2021,

compared to the first half of the year. In addition, most Chinese

exports are delivered to regions which are not core to the

Company’s business, with only 8% of Chinese exports destined

for EU27 or North America due to the protection of trade

measures. In contrast, ASEAN received 29% of Chinese exports

last year, while Developed Asia a further 16%. One area of

concern is the rising share of Chinese exports destined for Latin

America, with over 10 million tonnes last year, approximately

15% of Chinese finished exports, almost doubling from 5.5

million tonnes in 2020, or 10% of total. If, as expected, China

enters a period of declining steel demand over the next decade,

China must responsibly reduce its domestic steel making

capacity, so that exports to the rest of the world do not rise

sharply.

See “Business overview—Government regulations—Foreign

trade” and “Risk factors—Risks related to the global economy

and the mining and steel industry—Unfair trade practices, import

tariffs and/or barriers to free trade could negatively affect steel

prices and ArcelorMittal’s results of operations in various

markets.”

Source: American Iron and Steel Association total/regional imports and ASC data

to November 2021, internal Company estimate for December 2021.

Steel prices

Flat products

In the first quarter of 2019, steel prices for flat products in

Europe continued their steady downward trend which started in

September 2018. The prices of HRC in Northern Europe

reached €517/t in January 2019, finishing the quarter €8/t lower,

at €509/t. The decrease was attributable to weak domestic

demand in the beginning of the year, high levels of inventories

and the influence of declining international steel prices. In

Southern Europe, HRC prices followed an inverse trend starting

at €470/t in January and closing the quarter at €486/t, €16/t

higher. This inverse trend was partially driven by a stronger

demand in Southern Europe and partially by the Turkish imports

that were entering the Italian market with higher price ranges

between €495/t - €500/t Cost, Insurance and Freight Free Out

(“CIFFO”) effective. Domestic mills followed the Turkish import

prices.

In the second quarter of 2019, prices in Northern Europe

continued to decrease and ended the quarter at €487/t, which

was €11/t lower compared to April 2019. HRC prices in the

Southern regions followed the same trend from the previous

quarter peaking in June at €472/t, from €469/t in April. Turkish

suppliers continued with their export offers of €470/t - €480/t

CIFFO effective into Italy and Iberia, providing room for further

increases in Southern European domestic prices, given there

was no import price pressure. The average HRC prices for the

first half of 2019 were €499/t in Northern Europe and €472/t in

Southern Europe.

Flat products prices continued to slide down in the third quarter

of 2019, impacted by soft demand and weakening international

raw material prices. HRC in Northern Europe had several

trenches of price drops, ending the quarter at €469/t, which was

€18/t lower versus the previous quarter. In Southern Europe the

price of HRC averaged €453/t, which was €19/t lower compared

to the second quarter of 2019. Market seasonality, high

inventory levels and import pressure during the fourth quarter of

2019 pushed the HRC prices on a downward spiral. Several

attempts of price increases were rejected by the market, as real

demand in Europe was weak. In Northern Europe, HRC prices

ended the fourth quarter at €431/t, which was €38/t lower

quarter-on-quarter and in Southern Europe, HRC averaged

€413/t in the fourth quarter of 2019, €40/t lower than the

previous quarter. In the second half of 2019, HRC prices

averaged €450/t in Northern Europe and €433/t in Southern

Europe.

Steel prices for flat products in Europe gradually deteriorated

during 2019, bottoming toward the end of the year. Prices began

recovering late in November 2019. Fueled by a positive market

outlook and absence of attractive imports, especially in Northern

Europe, HRC spot prices improved until the end of February

135

Management report

2020, reaching €485/t in Northern Europe and €456/t in

Southern Europe (+€47/t and +€23/t vs. beginning of January,

respectively). However, with the COVID-19 outbreak becoming

a pandemic and industries starting their preparation for

shutdown, prices began softening, decreasing to €473/t in

Northern Europe and €443/t in Southern Europe by the end of

March 2020.

During the second quarter of 2020, steel prices in Europe

significantly declined due to uncertainties around the pandemic

crisis, decreased demand, a focus on inventory depletion and

high premium over imports. HRC prices dropped at the

beginning of June to €396/t in Northern Europe (-€89/t vs. Feb

2020) and €390/t in Southern Europe (-€66/t vs. Feb 2020). As

lockdown measures eased, steel prices partially rebounded

across all European markets toward the end of June 2020.

In the first half of 2020, HRC prices averaged €449/t in Northern

Europe and €431/t in Southern Europe, in line with the second

half of 2019, but remained below the first half of 2019, down by

€50/t in Northern Europe and €41/t in Southern Europe.

During the third quarter of 2020, steel activity, especially in

Northern Europe, gradually picked up, demand from all sectors

strengthened, inventories quickly declined, while imports in

South Europe remained limited and not competitive. In addition,

customers anticipated a supply deficit for the first quarter of

2021. This, coupled with the strong increase in raw material

cost, supported a rebound in flat steel product prices in Europe

by the end of 2020, to a 12-year high.

The HRC spot price increased by €100/t during the third quarter

of 2020 in Northern Europe, and a further €166/t during the

fourth quarter of 2020 (from €399/t on July 1, 2020 to €499/t on

October 1, 2020 and then to €665/t on December 31, 2020).

Similar increases in Southern Europe of €106/t and €170/t, in

the third and fourth quarter, respectively (from €381/t on July 1,

2020 to €487/t on October 1, 2020 and then to €657/t on

December 31, 2020), with the strongest day-on-day increases

seen during August and December.

In the second half of 2020, HRC prices averaged €494/t in

Northern Europe and €482/t in Southern Europe, an increase of

€45/t and €51/t above the level in the first half of 2020, and €44/t

and €49/t above the levels in the third and fourth quarter of

2019, respectively.

The price rally, which started in the second half of 2020,

continued through the first half of 2021. In the first quarter of

2021, European HRC references stood at an average of €739/t

in Northern Europe and €727/t in Southern Europe.

Economic recovery on the European continent has been robust

since the peak of the second wave of COVID-19, at the end of

2020. Demand for steel rebounded more strongly than

anticipated and at a more rapid pace than domestic steel supply.

This resulted in extended lead times at mills, while lower

deliveries to customers led to the depletion of end-users’ steel

inventories to historically low levels. The domestic supply-

demand tightness was further worsened by limited import offers

into Europe, due to the EU safeguard measures. At the same

time, global demand and pricing (excl. Europe) was also strong,

creating similar pressure in most markets. Hence, import lead

times and prices were not competitive enough to alleviate the

domestic situation in Europe (worsened by increasing freight

rates and strengthening raw material prices). This drove

domestic HRC pricing to record high levels up to July 2021.

During the second quarter of 2021, prices averaged at €1060/t

in Northern Europe and €1,046/t in Southern Europe. The first

half of 2021 registered record high prices for both Northern and

Southern European HRC references, respectively at €900/t and

€887/t, which indicated upsurges of €406/t and €405/t versus

the second half of 2020, and increases of €451/t and €456/t,

respectively, versus the first half of 2020. Overall, European

HRC prices have doubled during the second half of 2021.

The strong upward price movement recorded over the last 12

months (since mid-2020) started reversing in the second half of

2021. In July 2021, HRC reference in Northern Europe was at

€1,173/t, its peak for the year, while the HRC reference in

Southern Europe was at €1,091/t (having its peak at €1,135/t, in

June 2021). Despite the start of a declining trend, the average

for the third quarter of 2021 was still at a higher level versus the

previous quarter; namely, HRC reference in Northern Europe

averaged €1,141/t and in Southern Europe €1,051/t, being

respectively €81/t and €5/t higher over the second quarter of

2021. In the fourth quarter of 2021, the HRC reference in

Northern Europe and Southern Europe moved further down to

€988/t and €897/t, respectively, confirming a quarter on quarter

decline of over €150/t in each of the two regions.

This price retreat was determined, among others, by surging

imports into the European Union. Particularly, the fourth quarter

of 2021 started with the European HRC safeguard quota being

exhausted immediately by one of its core importers – India.

Further downward pressure on steel prices came from the

automotive sector’s weakening demand, in light of the continued

global shortage of microchips.

In the second half of 2021, HRC prices averaged €1,065/t in

Northern Europe and €974/t in Southern Europe, respectively

€571/t and €492/t higher than the second half of 2020.

In the United States, domestic HRC prices in the first half of

2019 continued the downward trend that began in July 2018.

The first quarter of 2019 started with prices at $776/t in January

and in March reached $767/t ($9/t lower). Prices in the second

quarter of 2019 plunged even deeper - from $749/t in April to

Management report

136

$598/t in June (a drop of $151/t), well below import parity levels.

This descent represents the market’s search for an equilibrium

point after additional local capacity came on-stream in the

second half of 2018. This additional supply availability added

pressure on domestic prices at the same time as domestic mills

were fighting imports. U.S. suppliers' short lead time combined

with comfortable inventory levels at customers contributed to the

downward trend in domestic prices.

The average HRC price for the first half of 2019 in the United

States was $723/t. In 2019, prices also fell due to weak real

demand and decreasing scrap prices. The anticipated decline in

imports, as an outcome of the implementation of the Section

232 import tariffs was not as strong as expected. Therefore,

import prices continued to add pressure on the domestic pricing.

The HRC import Houston DDP index continued to decline over

the first half of 2019, from $746/t in the first quarter to $685/t in

the second quarter.

In the second half of 2019, the average HRC price in the United

States was $603/t, $330/t below the second half of 2018. The

dramatic decrease is due to 2018 having been a record year in

which prices were inflated by Section 232 import tariffs on steel.

The average HRC price for the third quarter was $627/t, a drop

of $52/t versus the previous quarter which was mainly due to the

scrap USA #1 Busheling price dropping by $33/t, to $290/t and

pressure from destocking at both Steel Service Centers

(“SSCs”) and Original Equipment Manufacturers (“OEMs”).

Prices in the fourth quarter of 2019 averaged at $579/t, which is

$48/t lower versus the third quarter. The situation further

deteriorated in October due to the strike at General Motors that

added to the market's negative sentiment. From November

onwards, some relief came as scrap started an upward trend

and international prices began to show signs of recovery. As a

result, the fourth quarter ended in December at $623/t from the

yearly low of $545/t, recorded in October.

Domestic HRC prices continued their upward trend which

started in November 2019 through January 2020. However,

prices fluctuated downwards in February and March 2020, first

due to weak scrap exports and the Scrap USA #1 Busheling

index price decline and, towards the end of the second quarter

of 2020, due to the COVID-19 pandemic related market

restrictions. HRC prices then lost $79/t between the beginning of

January ($661/t) and the end of March 2020 ($582/t).

During the second quarter of 2020, prices fluctuated, seeing a

low level at the end of April 2020 at $507/t, followed by an uptick

during May to $559/t, supported by improvement in the scrap

price then in supply scarcity, as well as good activity in non-auto

segments. HRC prices deteriorated again toward the end of

June to $524/t, as mini-mills were seeking volumes to fill

available capacities. Domestic HRC prices averaged $593/t

during the first half of 2020, a $130/t drop compared to the first

half of 2019, but just a $10/t decline compared to the second

half of 2019.

Flat steel prices continued to decline in the United States at the

beginning of the third quarter of 2020, as the COVID-19

pandemic and presidential election related uncertainties

weighed on the market. High scrap supply and weak steel

demand pressured prices and HRC reached at a 4-year low of

$485/t by end of July, however, only to increase afterwards in a

trend that continued until the end of 2020.

Improved buying activity during the fourth quarter of 2020, tight

supply and production outage concerns pushed prices higher,

while an expansion of the overall economy toward the year end,

with good expectations for the first half of 2021, provided

continuous support for domestic HRC to reach $1,113/t by end

of December 2020 (+130% price increase). This is a historical

high, only inferior to the pre-2008 economic crisis level of

$1,185/t in July 2008.

Domestic HRC prices in the United States averaged $681/t

during the second half of 2020, representing an $88/t

improvement compared to the first half of 2020 and a $78/t

increase compared to the second half of 2019.

Following the July 2020 low at $505/t, the U.S. domestic

Midwest HRC price increased. In January 2021, the price

increased to $1,191/t, which was $466/t higher than the October

2020 level. By April 2021, the HRC price increased by another

$341/t over the January level, to reach $1,530/t. Overall, prices

in the first quarter of 2021 averaged $1,317/t, while second

quarter prices increased by another $382/t to $1,699/t.

Therefore, in the first half of 2021, U.S. domestic HRC prices

improved by 56%, averaging $1,508/t, more than double the

value from the second half of 2020, at $701/t. Similar to Europe,

steel demand rebounded faster than supply, resulting in

domestic supply-demand pressures. Demand pressure led to

record long lead times at mills, with supply still being limited

(Covid-19 related restrictions, domestic capacity constraints,

import limitations). Flow of steel imports into the U.S. continued

to be heavily controlled in line with Section 232 (25% tariff on

most imports), but also given the tightness in supply across all

regions. Additionally, severe weather conditions in the United

States resulted in various logistical constraints. All of these

factors put together determined spiraling domestic HRC prices

throughout the first half of 2021.

The spiraling effect continued through the third quarter of 2021,

when the U.S. domestic Midwest HRC price reported its peak

for the year, in September, at $2,156/t, averaging the quarter at

a record high of $2,086/t. The robust demand environment,

coupled with a still limited supply, domestically and from imports

137

Management report

(high lead-times), transportation congestions, skyrocketing

shipping costs, all maintained the price reference at a high level.

The last quarter of 2021 brought the U.S. domestic Midwest

HRC price to an average of $1,973/t, a drop of $113/t versus the

previous quarter. The price inflection was reported in October

2021, at $2,121/t, declining by $35/t month on month. This was

a reflection of the pressure coming from rising imports and

increasing capacity utilization of domestic mills. Furthermore,

the automotive industry (with its steel demand) continued to be

subdued in light of the global microchip shortage. The second

half of 2021 averaged to $2,030/t, which was higher than the

second half of 2020 by $1,329/t.

In China, spot HRC prices averaged at $482/t VAT excluded in

the first quarter of 2019. The year started in January with prices

at $467/t, strengthening to $494/t by March, as a result of the

market’s resumed activity following the Chinese New Year. In

the second quarter of 2019, due to Brazil's major accident at

one of its largest iron ore mining facilities, as well as due to the

market seasonality, the peak prices were reached in April at

$523/t VAT excluded. The second quarter of 2019 closed in at

an average of $512/t VAT excluded. Despite the governmental

measures targeting production cuts due to overcapacity and

environmental issues, domestic mills have reacted slowly to the

indications, driving the domestic price by end of June 2019 to

$493/t VAT excluded, i.e. on a downward trajectory. The HRC

domestic price in China averaged $497/t VAT excluded for the

first half of 2019.

The downward spiral of the Chinese HRC price continued in the

third quarter of 2019 reaching $474/t, which was $38/t lower

versus the previous quarter, with increased inventory levels of

both raw materials and finished products. Domestic demand

was impacted by seasonality. The fourth quarter of 2019 began

with further weakening of Chinese HRC prices, with October

being the weakest month at an average of $441/t. The

Purchasing Managers’ Index (“PMI”) dropped to its lowest point

in four years, with the rate of new order intake dropping by over

5% for both domestic and exports. However, the market started

to improve from November onwards when the 7-month

downward spiral reversed. Better domestic demand and a

decrease in finished product inventory (-10% month-on-month)

helped improve the prices in November. In December,

international steel prices started to improve, which also

supported a positive price environment in China. The fourth

quarter of 2019 ended at $462/t, $12/t lower than in the third

quarter. HRC spot prices in China averaged $468/t, VAT

excluded in the second half of 2019.

At the beginning of 2020, steel prices in China continued their

upward trend which started in December 2019, although

peaking mid-January at $496/t, VAT excluded. With HRC

inventory on the rise, ahead of the Lunar New Year holidays

(January 24-30), prices declined and continued the trend

throughout the first quarter 2020. After the Lunar New Year

holidays, due to the COVID-19 outbreak, the Chinese market

opened to a reality of movement restrictions and delayed

enterprise activity. By the end of March 2020, HRC prices

decreased $97/t, VAT excluded compared to the January peak,

at $399/t VAT excluded.

At the beginning of the second quarter of 2020, HRC prices in

China began to improve following the ease in restrictions and

gradual release in activities and local demand. HRC prices

gained $58/t from $408/t, VAT excluded at the beginning of April

to $466/t, VAT excluded by mid-June.

HRC prices in China averaged at $445/t, VAT excluded, for the

first half of 2020, remaining $52/t below the average of the first

half of 2019 and $23/t below the second half of 2019.

In the beginning of the third quarter of 2020, prices continued to

improve with domestic HRC reaching $520/t, VAT excluded, by

August 31, 2020. However, September was marked by a price

decline, with HRC losing $23/t decreasing to $497/t, VAT

excluded by the end of September, as production continued at

high level, exports stayed low and imports increased.

Steel prices spiked in China during the fourth quarter of 2020,

as domestic demand continued strongly, while air pollution

measures and production limitations in some regions fueled

supply concerns. This, coupled with increases in raw material

costs, pushed domestic HRC prices to $652/t, VAT excluded (+

$155/t compared to the end of September), the highest level

since September 2011.

For the second half of 2020, HRC prices in China averaged at

$534/t, VAT excluded, representing an $89/t increase compared

to the average of the first half of 2020 and a $66/t increase

compared to the second half of 2019.

In the first quarter of 2021, HRC prices in China averaged $650/

t VAT excluded, which was $87/t higher versus the last quarter

of 2020. The average of the first six months of 2021 reached

$711/t, which was $177/t higher than the second half of 2020,

and $266/t higher than the first half of 2020. Domestic prices

continued an upward trend from April 2020 until May 2021,

reaching the peak at $812/t, VAT excluded. In June 2021, prices

have slightly weakened to $755/t, VAT excluded, a drop of $57/t

month on month. This change came as a result of the abolition

of export rebates announced by the Chinese Government for

May 2021 onwards, a measure that was intended to discourage

steel exports, and accordingly keep steel prices under check.

The third quarter of 2021 continued at an elevated level of $789/

t for the HRC in China, VAT excluded, with the peak of the year

reached in October at $865/t. The increasing environmental

regulations imposed in China, enforcing steel production cuts in

Management report

138

the regions of e.g. Jiangsu, Tangshan, particularly in the second

half of the year, along with tensions in raw materials limited

supply have all pushed the Chinese domestic HRC price

upwards. Additional pressure came with the introduction of

energy supply control measures in the middle of September

2021, in an attempt to curb the short supply.

In November 2021, however, there has been a sharp decline in

the Chinese HRC price, VAT excluded, reported at $666/t (a

drop of $166/t month on month). That was a direct effect of

Chinese Government’s intervention in loosening electricity

supply crisis and relaxing the control on coal prices.

Downstream demand for steel products was reported sluggish

by the end of the year, given the seasonality and the uncertain

epidemic situation domestically.

In the fourth quarter of 2021, the Chinese domestic HRC, VAT

excluded, ended at an average of $699/t, a decrease of $90/t

quarter on quarter, but still $136/t up from the last quarter of

2020. The Chinese price reference was reported for the second

half of 2021 at $744/t, up $33/t compared to the first half of

2021.

Flat

products

Source:

Steel

Business

Briefing

(SBB)

Northern

Europe

Southern

Europe

United

States

China

Spot HRC

average

price per

tonne

Spot HRC

average

price per

tonne

Spot HRC

average

price per

tonne

Spot HRC

average

price per

tonne, VAT

excluded

Q1 2019

€510

€477

$766

$482

Q2 2019

€487

€467

$679

$512

Q3 2019

€469

€453

$627

$474

Q4 2019

€431

€413

$579

$462

Q1 2020

€469

€450

$643

$456

Q2 2020

€428

€412

$543

$435

Q3 2020

€436

€427

$548

$504

Q4 2020

€551

€537

$853

$563

Q1 2021

€739

€727

$1317

$650

Q2 2021

€1,060

€1,046

$1,699

$773

Q3 2021

€1,141

€1,051

$2,086

$789

Q4 2021

€988

€897

$1973

$699

Long products

Prices of long steel products in Europe continued their steady

downward trend in 2019. In January 2019, rebar price and

medium sections price reached €528/t and €624/t, respectively.

The rebar price decline started in August 2018, while the

medium sections price decline started in January 2019. By the

end of March 2019, the rebar price and the medium section

price dropped to €526/t and €588/t, respectively, reaching a

quarterly average of €526/t and €605/t, respectively. In June

2019, prices bottomed further to €501/t for rebar and €579/t for

medium sections. The falling domestic pricing environment

followed the trend of weakening world scrap prices on

international markets.

In Europe, the average medium sections price for the first half of

2019 was €595/t . The average rebar price for the first half of

2019 was €521/t.

Prices for long steel products in Europe continued their steady

downward trend in the second half of 2019. The prices reached

a floor in November 2019 at €452/t for rebar and €521/t for

medium sections, the lowest over the last two years. The

average medium sections price in Europe for the second half of

2019 was €548/t. The average rebar price in Europe for the

second half of 2019 was €476/t.

Steel prices for long products in Europe rebounded in November

2019 and peaked by mid-January 2020 at €540/t for medium

sections and €480/t for rebars. Finished steel products prices

declined throughout February, alongside scrap Turkey HMS 1&2

index correction, with medium sections reaching €525/t and

rebars at €453/t, although the first quarter of 2020 ended with

similar price levels as the beginning of the year.

During the second quarter of 2020, despite a stable scrap price,

long steel product prices in Europe continued declining, due to

the impact of the pandemic on the market and weak

downstream demand. By mid-June, medium sections reached

€500/t and rebars €430/t, stabilizing at this level toward the end

of the quarter. The average medium sections price for the first

half of 2020 was €527/t, representing a decrease of €67/t

compared to the first half of 2019 and a decrease of €21/t

compared to the second half of 2019.

The average rebars price for the first half of 2020 was €461/t, a

drop of €60/t compared to the first half of 2019 and a drop of

€15/t compared to the second half of 2019.

During the third quarter of 2020, as market sentiment and

demand improved in July, steel prices for Long products in

Europe started recovering, however rather slowly, fluctuating on

an upward trend alongside scrap HMS 1&2 Turkey CFR index.

From the June level, at a 3-year low, the medium sections and

rebar price gained €20/t and €28/t by the end of September,

reaching €522/t and €458/t, respectively.

Prices plateaued at this level during October, but spiked in

November and December, pushed by an increase in the scrap

index to a 9-year high. Long finished product spreads compared

to the raw material basket squeezed towards the end of 2020,

despite medium sections and rebars prices reaching highs of

€640/t and €545/t, respectively.

139

Management report

The average medium sections price for the second half of 2020

was €532/t, representing a mere €5/t improvement compared to

the first half of 2020, while prices declined €15/t compared to

the second half of 2019.

The average rebars price for the second half of 2020 was

€465/t, a mere €4/t increase compared to the first half of 2020

and decrease of €10/t compared to the second half of 2019.

2021 started in January at a level of €723/t for the medium

sections and €625/t for rebars, which represented an increase of

€200/t and €167/t, respectively, since October 2020 (previous

quarter). By March 2021, prices strengthened by €5/t and €8/t,

respectively, reaching €727/t for medium sections and €633/t for

rebars. The average of the first quarter was reported at €722/t

for medium sections and €629/t for rebars. In the second quarter

prices continued to strengthen, reaching an average of €860/t

for the medium sections and €710/t for rebars, up by €138/t and

€81/t accordingly versus the first quarter.

The continued upward price movement over the first half of

2021 has been defined by the recovering domestic economies

in Europe with strengthening consumer demand, hand in hand

with a limited supply of steel, domestically, and resulting long

lead times. In this context, EU steel safeguard measures (in

place on steel products since 2019) have only put additional

strain on domestic markets and limited imports. In the first half

of 2021, price reference in Europe for medium sections stood at

€785/t and for rebars at €670/t.

The favorable pricing environment continued through the third

quarter of 2021, peaking in August at €1,050/t for medium

sections and €845/t for rebars, which almost doubled over a

year. The average price for the third quarter was reported at a

record high level of €1,039/t for medium sections and €826/t for

rebars. Strong demand, increasing freight costs and ports

congestions have all reinforced the elevated price levels in

Europe up to that point in time.

However, from September 2021 onwards, domestic prices

started changing direction. The fourth quarter of 2021 started

with October at a level of €1,000/t for medium sections and

€799/t for rebars (down by roughly €50/t each since the peak in

August) and ended at a lower point, in December, at €991/t and

€790/t, respectively. The quarterly average was reported for

medium sections at €995/t and rebars at €795/t. This decline

over the last four months of the year was determined by the

rebalancing of the European demand-supply situation, with

domestic mills reporting strong production figures throughout the

year.

The average price references in the second half of 2021 was

recorded at €1,017/t for medium sections and €811/t for rebars,

almost double as compared to the second half of 2020.

In Turkey, rebar export prices continue to align closely with the

evolution of world scrap prices. The first quarter of 2019 started

for Turkish rebar at one of the lowest points compared to the

previous six quarters, being at $466/t FOB, which is in line with

the bottomed HMS 1&2 index at $310/t CFR. However, the

March 2019 rebar export price was $482/t FOB, higher by $36/t

compared to January at $446/t. During the second quarter of

2019, the Turkish export rebar price followed a month over

month downward trend alongside scrap HMS 1&2 index, from a

high of $480/t FOB at beginning of April down to $468/t FOB at

the end of June. Nevertheless, the average for the second

quarter, at $473/t, was higher than the average for the previous

quarter at $466/t. In the first half of 2019, the Turkish export

rebar price averaged $470/t FOB.

In the third quarter of 2019, the price of Turkish rebar continued

the downward trend from the previous quarter, reaching $441/t

FOB, which is a $32/t decrease quarter-on-quarter. July opened

the quarter at $461/t, while September closed at $413/t,

representing a drop of $48/t driven by the seasonally limited

demand. In October, prices reached a floor for the year at $405/

t, which was also the lowest point over the last three years. The

prices subsequently increased with the overall fourth quarter of

2019 averaging at $421/t. The year closed in December with a

price of $442/t, $37/t higher versus the low reached in October.

The increase in prices was driven by the U.S. scrap price

improvement from early November, which recovered the $40/t

lost in September/October and ended the year in December at

$290/t, although not enough to surpass the level from the first

half of the year at $348/t. The average Turkish rebar export

price for the second half of 2019 was $431/t FOB.

In Turkey, rebar export prices continued to evolve alongside

scrap HMS 1&2 index trend. After recovering since September

2019, the first quarter of 2020 started with the rebar Turkey

export price at a peak level of $445/t Free on Board (“FOB”). It

soon began fluctuating on a downward trend, hitting a four year

low at the end of March at $380/t.

At the beginning of the second quarter of 2020, as signs of

scrap shortages encouraged U.S. traders to increase scrap

offers into Turkey, the rebar Turkey export price fluctuated

upward, reaching its highest level mid-June at €419/t.

In the first half of 2020, the Turkish export rebar price averaged

$416/t FOB compared to an average of $470/t FOB for the first

half of 2019 and $431/t FOB for the second half of 2019.

During the third quarter of 2020, scrap costs increased and Billet

Turkey CFR price saw an uptick due to tight supply ex CIS and

improved demand in Asia. This provided support for Turkey

rebar export price references, which continued to improve,

reaching another peak at $460/t FOB by mid-September (+$41/t

compared to the June level). Slight price declines were noted

Management report

140

during October, but the price increase was evident during

November and December 2020, in line with a strong increase in

scrap costs, as well as improved export and domestic demand,

while material was in shortage. Rebar Turkey export price

gained another $180/t by the end of the fourth quarter of 2020,

to $640/t level.

In the second half of 2020, the Turkish export rebar price

averaged $473/t FOB, representing a $57/t increase compared

to the first half of 2020 and $42/t increase compared to the

second half of 2019.

The price for Turkish rebar for export has been on the rise since

the lows of May 2020, at $399/t FOB. In the first quarter of 2021,

the rebar reference price averaged $621/t, which was $114/t

higher quarter on quarter, and $195/t year on year. January

2021 started strongly at $630/t ending the quarter only $2/t

below at $628/t. At the end of March 2021, the construction

season was only starting and demand for steel was growing

more strongly than anticipated, COVID-19 vaccination programs

were rolling, market sentiment was improving after the second

wave of COVID-19 infections. Therefore, the second quarter of

2021 continued the upward trend, with April 2021 recording an

export price of $639/t for Turkish rebar, and ending in June at

$726/t, representing a $87/t price increase over three months.

The average for the second quarter of 2021 stood at $703/t,

driving an average for the first half of 2021 at $662/t (a $190/t

increase since the second half of 2020 and a $246/t increase

since the first half of 2020).

After the peak in export price registered in May 2021 at $744/t

for Turkish rebar FOB, it started to weaken in the following

months, reaching the yearly low of $665/t in September 2021.

Export prices have been decreasing on account of weakening

long steel demand and dropping scrap costs. Furthermore,

Turkey continued to be heavily hit by the domestic financial

turmoil with high inflation/interest rates and destabilized

domestic currency.

In the third and fourth quarter of the 2021, Turkish rebar for

export was priced at $691/t and $713/t FOB, respectively,

ending the second half of the year at $702/t ($230/t higher year

on year).

Long products

Source: Steel

Business

Briefing (SBB)

Europe medium

sections

Europe rebar

Turkish rebar

Spot average

price per tonne

Spot average

price per tonne

Spot FOB

average price

per tonne

Q1 2019

€605

€526

$466

Q2 2019

€583

€515

$473

Q3 2019

€567

€490

$441

Q4 2019

€529

€461

$421

Q1 2020

€533

€468

$426

Q2 2020

€520

€453

$406

Q3 2020

€513

€442

$438

Q4 2020

€554

€488

$507

Q1 2021

€722

€629

$621

Q2 2021

€860

€710

$703

Q3 2021

€1,039

€826

$691

Q4 2021

€995

€795

$713

Raw materials

The primary raw material inputs for a steelmaker are iron ore,

coking coal, solid fuels, metallics (e.g., scrap), alloys, electricity,

natural gas and base metals. ArcelorMittal is exposed to price

volatility in each of these raw materials with respect to its

purchases in the spot market and under its long-term supply

contracts. In the longer term, demand for raw materials is

expected to continue to correlate closely with the steel market,

with prices fluctuating according to supply and demand

dynamics. Since most of the minerals used in the steel-making

process are finite resources, their prices may also rise in

response to any perceived scarcity of remaining accessible

supplies, combined with the evolution of the pipeline of new

exploration projects to replace depleted resources.

As for pricing mechanisms, since 2012, quarterly and monthly

pricing systems have been the main type of contract pricing

mechanisms, but spot purchases also appear to have gained a

greater share as steelmakers have developed strategies to

benefit from increasing spot market liquidity and volatility. In

2019, 2020 and 2021 the trend for using shorter-term pricing

cycles continued. Pricing is generally linked to market price

indexes and uses a variety of mechanisms, including current

spot prices and average prices over specified periods.

Therefore, there may not be a direct correlation between market

reference prices and actual selling prices in various regions at a

given time.

Iron ore

In 2019, iron ore market reference prices increased following a

supply disruption caused by the collapse of the Brumadinho

dam owned by Vale in Brazil on January 25, 2019 and the

141

Management report

cyclone in Australia mining region (end of March 2019),

averaging $93.63/t, (Metal Bulletin 2019).

In 2020, China’s demand has proven a strong price driver with

crude steel production set to exceed the record 1 billion ton per

year in 2020. Manufacturing activity in China continued to

expand in 2020 compared to 2019 and its economy showed an

enduring V-shaped recovery after the initial impacts of the

COVID-19 pandemic. Iron ore market reference prices

increased to an average of $109.03, up by 16.5% compared to

an average of $93.63 in 2019.

In 2021, iron ore prices averaged $159.89/t (up 46.6% as

compared to 2020), driven by post-pandemic fiscal stimulus

packages launched in main economies, which boosted global

demand for steel and iron ore and by increased crude steel

production in China in the first half of the year as steel mills

were driven by high steel profits. At the same time, iron ore

supply recovered rather slowly due to global epidemic bringing

shortages in labor and ports congestion.

In the first quarter of 2019, following the Vale owned

Brumadinho dam disaster in Brazil, the seaborne iron ore

market surged to $82.41/t on average. The supply shock was

aggravated by the cyclone season in Australia with some

Australian iron ore producers lowering their output guidance for

the year, which contributed to reaching $100.92/t on average in

the second quarter of 2019 with a peak of $125.77/t observed

on July 2 (Metal Bulletin) also supported by lower inventories at

Chinese ports. Prices remained elevated in July at $119.93/t in

average and sharply decreased in August to $90.69/t following

expectations of weaker demand as well as the impact of

currency risks which were exacerbated by the decision of

China’s central bank to depreciate the yuan in response to

decision of the U.S. government to extend punitive tariffs, both

of which cast uncertainty on the iron ore future market, along

with supply recovery. In September 2019, iron ore prices rose

again on the back of a supportive paper market and

expectations of increased end-user restocking activity. The

average price for the third quarter of 2019 was $102.03/t.

October 2019 was bearish with continued lack of end-user

demand for iron ore fines ahead of announcements for winter

production cuts. However, prices recovered sharply in

November amid higher end-user demand for high-grade

materials and supportive futures market for steel. The fourth

quarter of 2019 average price was $88.97/t and the average

price for 2019 was $93.63/t (Metal Bulletin).

In the first quarter of 2020, despite the COVID-19 pandemic's

impact on demand, iron ore prices were supported by increased

supply issues such as a partial halt of Vale’s Brucutu mine,

linked to safety issues at their waste management dams, heavy

rainfalls in Brazil affecting the shipments of Vale’s Northern

System (Carajas) and two tropical cyclones near iron ore ports

in Australia. In the second quarter of 2020, supply from both

Brazil and Australia improved but it was offset by a very strong

recovery of crude steel production in China in May. Iron ore

reference prices increased in the second quarter of 2020

supported by supply risk due to the severe outbreak of

COVID-19 in Brazil and low iron ore inventories at Chinese ports

and steel mills.

In the third quarter of 2020, the V-shaped recovery continued in

China with increasing crude steel production in the month of

July and August. The strong demand in China together with

partial recovery ex-China and restocking ahead of the week-

long National Day holidays in China supported iron ore prices

that reached a multi-year high of $130.17/t in September 2020,

ending the quarter with an average of $118.06/t (Metal Bulletin).

There was a gradual recovery in ex-China demand in the fourth

quarter of 2020: major steelmakers such as Germany and India

grew their output year-on-year in October 2020 for the first time

since the COVID-19 pandemic began. At the same time, there

was a disappointing supply from major iron ore suppliers in the

fourth quarter: weaker shipments from Australian companies on

deferred maintenance, some operational issues and tropical

storms in December in Australia and lower production from

Brazilian companies on delays in restarting stalled capacity and

weather impacts with heavier than normal rainfalls in December.

As a result, prices in the fourth quarter of 2020 increased to

$133.35/t.

In the first quarter of 2021, the seaborne iron ore price averaged

$167.40/t, up 25.5% compared to previous quarter. Post-

pandemic fiscal stimulus packages launched in main economies

as well as easing monetary policies significantly boosted global

demand for steel and indirectly for iron ore. Meanwhile, iron ore

supply recovered rather slowly due to global epidemic bringing

shortages in labor and ports congestion as well as due to

weather disruption in major iron ore producer countries and

mine safety and environmental inspection in China.

In the second quarter of 2021, the seaborne iron ore price

skyrocketed to $219.26/t on June 7, 2021 and stayed high till

the end of the quarter, averaging the record $200.47/t. The price

increase was fueled by the high demand from China as its steel

mills increased crude steel production, motivated by high steel

profits. Concerns on tight supply were further increased on

account of flood accident at Dahongcai mine on June 10, 2021

in Shanxi province.

In the third quarter of 2021, the seaborne iron ore price started

to decline and averaged $163.39/t, having lost $37/t compared

to previous quarter. Seaborne supply remained stable, while the

demand dropped significantly in China mainly due to step-upped

efforts by the government to cut 2021 crude steel production

below 2020 levels and stringent carbon emission controls.

Management report

142

Meanwhile, real estate sector, the biggest steel consumption

sector, has been weakening due to China’s property

deleveraging campaign since the beginning of 2021.

In the fourth quarter of 2021, the seaborne iron ore price

averaged $110.59/t reaching the lowest point of $87.27 of the

year on November 18. China steel production further reduced

due to national wide power shortage, inspection on crude steel

cut and air quality control during heating season. Weakening of

Chinese economy due to shrinking consumption, supply shock,

weakening exports and uncertainties on Covid-19 lead to

bearish market sentiment. In addition, Evergrande crisis

together with other property developers, such as Fantasia

Group weighted further on already debt-laden real estate sector.

Coking coal

Coking coal prices in 2019 averaged $177.36/t and were initially

supported by incidents in Australia (heavy rains, accident at

Anglo’s Moranbah mine) and the local Australian rail network

operator trade union’s industrial action and maintenance works.

However, in the second half of 2019, prices decreased, driven

by coking coal import restrictions at key Chinese ports and a

weak demand from India amid domestic slowdown.

Coking coal prices in 2020 averaged $123.46/t (compared to

$177.36/t in 2019) and were initially supported in the first quarter

of 2020 by the reduction of coal production in China related to

the COVID-19 pandemic and to Mongolia’s decision to close its

border with China, which boosted China’s import of seaborne

traded coking coal. Coking coal prices then deteriorated from

the second quarter of 2020 onwards after the global steel

production collapsed ex-China due to the COVID-19 pandemic

and has maintained low price levels due to the Chinese

restrictions on imports of Australian coal that started in October

2020.

Coking coal prices in 2021 averaged $227.29/t as compared to

$123.46/t in 2020. Metallurgical coal prices have held at historic

highs for several months, as supply shortages have met strong

Chinese demand and rebounding global industrial production.

China’s informal import restrictions on Australian exports have

obliged the country’s steel mills to draw in supply from non-

Australian sources. On balance, Chinese metallurgical coal

imports have dropped significantly in 2021. India, Japan, South

Korea and the EU have all switched to Australian-sourced

imports in response.

In the first quarter of 2019, coking coal prices were volatile

ranging from $190/t to $217/t. The volatility was supported by

incidents in Australia, including heavy rains, an accident at

Anglo’s Moranbah mine and a trade union's industrial action at a

local rail network operator. The average spot price in the first

quarter of 2019 was $206.33/t (Metal Bulletin Premium HCC

FOB Australia index). In the second quarter of 2019, prices first

increased to the quarter’s high of $213.16/t on May 13, 2019

fueled by the increased sentiment of potential less availability of

metallurgical coal railroad capacity in Australia due to

maintenance at a local rail network operator in April. Prices then

decreased to $191.61/t on June 28, 2019 due to reduced steel

margins putting pressure on coke prices. The average spot price

in the second quarter of 2019 was $202.85/t. In the third quarter

of 2019, tightening of coking coal import restrictions at key

Chinese ports and weak demand from India during the monsoon

season led to a decrease in prices with the average spot price at

$161.03/t (Metal Bulletin Premium HCC FOB Australia index). In

the fourth quarter of 2019, the bearish trend in the coking coal

market continued driven by a slowdown in Chinese imports

including a ban on imports at China’s largest coking coal

handling port in Jingtang effective from October 1, 2019. Weak

demand from India post the monsoon season amid domestic

slowdown contributed to this bearish trend. The average coking

coal spot price decreased to $139.27/t in the fourth quarter of

2019.

In the first quarter of 2020, coking coal prices ranged from $150/

t to $158/t (Metal Bulletin Premium HCC FOB Australia index).

Coking coal prices gradually increased in the first quarter to an

average of $154.80/t with a reset of Chinese import quotas at

the start of the year amid price arbitrage between domestic and

imported coal and the cyclone season in Australia. However, the

first quarter price rally reversed in the second quarter as ex-

China market demand was severely hit by the COVID-19

outbreak with a sharp drop in crude steel production in the main

coking coal import regions. Consequently, the coking coal

reference price dropped in the second quarter of 2020 to an

average of $117.08/t. In the third quarter of 2020, limited

demand from India due to the monsoon season led to a further

decrease and the average coking coal spot price fell to

$112.32/t. The bearish trend in the coking coal market continued

in the fourth quarter of 2020. This was influenced by the

Chinese ban on import of Australian coals since October, which

resulted in oversupplied high-quality Australian hard coking coal

in the seaborne market. The average coking coal spot price

decreased to $109.88/t in the fourth quarter of 2020.

In the first quarter of 2021, the average price rose to $128.22/t,

a 17% increase as compared to the previous quarter (Metal

Bulletin Premium HCC FOB Australia index), effectively

reversing the fall which followed China’s informal restrictions on

Australian metallurgical coal imports in October 2020. Suppliers

locked into new demand sources and buyers and sellers

reorganized supply chains. Prices were also boosted by fears

over weather disruptions at Queensland ports, with cyclone

season often peaking in the late summer.

In the second quarter of 2021, the average price rose by an

additional 8% to $138.78/t, supported by improving global

industrial production and economic activity.

143

Management report

Metallurgical coal prices have continued to surge to historical

highs in September 2021 and the average price for the third

quarter of 2021 increased to $264.25/t, driven by tight spot

supply from major producers in Queensland, Australia and rising

demand from ex-China regions. The diversion of Australian coal

from China to other markets was effectively complete, with the

previous surplus of Australian supply now largely redirected.

In October and November, metallurgical coal prices levelled out

and the average price for the fourth quarter of 2021 was settled

at 369.81$/t. Cuts in crude steel production in China did not lead

to any easing in prices but may have curbed further upward

momentum.

ArcelorMittal has continued to leverage its iron ore and coking

coal supply chain and diversified supply portfolio as well as the

flexibility provided by contractual terms to mitigate regional

supply disruptions and also mitigate part of the market price

volatility.

Iron ore

Coking coal

Source: Metal Bulletin

average price per

tonne (Delivered to

China, Metal Bulletin

index, 62% Fe)

average price per

tonne (premium hard

coking coal FOB

Australia index)

Q1 2019

82.41

206.33

Q2 2019

100.92

202.85

Q3 2019

102.03

161.03

Q4 2019

88.97

139.27

Q1 2020

89.94

154.8

Q2 2020

93.52

117.08

Q3 2020

118.06

112.32

Q4 2020

133.35

109.88

Q1 2021

167.40

128.22

Q2 2021

200.47

138.78

Q3 2021

163.39

264.25

Q4 2021

110.59

369.81

Scrap

The Company considers the German suppliers' index ("BDSV")

Delivered at Place ("DAP") as market reference.

During 2021, the BDSV for reference grade E3 started in

January at €363/t. In February, it came down to €330/t and

thereafter, until July kept an increasing trend reaching €449/t. In

August, the trend was again decreasing until reaching €383/t in

October. Throughout November and December, it increased and

settled at $423/t by end of 2021.

In 2021, monthly price movements have been more significant

than in previous years.

The average index price for 2021 was €395/t as compared to

€239/t in 2020, a €156/t or 65% increase as compared to 2020.

The average index price for 2019 was €252/t.

Turkey’s scrap imports increased by 11% to 21.7 million tonnes

in the first eleven months of 2021 as compared to the same

period in 2020 and were at their highest level since previous

high levels reported in 2012. Turkey remains the main scrap

buying country in the international market. Liquid steel

production for the first eleven months of 2021 was 36.7 million

ton, up 13% from 2020.

Scrap Index HMS 1&2 CFR Turkey, North Europe origin, started

January 2021 at $450/t. In February, it fell to the year low at

$410/t and subsequently it increased until reaching the 2021

high in June at $500/t. It remained at levels between $481/t and

$435/t during the second half of 2021 reaching $465 in

December 2021. On a yearly basis, the Scrap Index HMS 1&2

CFR Turkey, North Europe origin, increased from an average of

$281/t in 2020 to $459/t in 2021.

The average yearly prices were at 466$/t in 2021, $281/t in

2020, and $281/t in 2019.

In the domestic U.S. market, HMS 1 delivered Midwest index

was $202/t higher in 2021 than 2020. The Midwest Index for

HMS 1 increased from an average of $237/t in 2020 to $439/t in

2021.

On the export market, HMS export FOB New York average

prices of 2021 were at $427/t, an $162/t increase by as

compared to 2020.

Ferro alloys and base metals

Ferro alloys

The underlying price driver for manganese alloys is ordinarily

the price of manganese ore, which was at the level of $5.27 per

dry metric tonne unit (“dmt”) (for 44% lump ore) on Cost,

Insurance and Freight (“CIF”) China for 2021, representing a

15% increase from $4.58/dmt in 2020 ($5.63/dmt in 2019),

mainly attributed to the force majeure in South Africa in

February 2021, strong manganese alloys prices in first three

quarters and tight logistics throughout the year .

High carbon ferro manganese increased by 64% from $1,099/t

in 2020 to $1,803/t in 2021 ($1,203/t in 2019), silicon

manganese increased by 63% from $1,116/t in 2020 to $1,819/t

in 2021 ($1,234/t in 2019) and medium carbon ferro manganese

increased by 83% from $1,567/t in 2020 to $2,861/t in 2021

($1,780/t in 2019). This price increase was influenced by various

factors including COVID-19 related lockdowns, force majeure,

tight logistics and low market inventories.

Management report

144

Base metals

Base metals used by ArcelorMittal are zinc, tin and aluminum for

coating, aluminum for deoxidization of liquid steel and nickel for

producing stainless or special steels. ArcelorMittal partially

hedges its exposure to its base metal inputs in accordance with

its risk management policies.

The average price of zinc for 2021 was $3,005/t, representing a

33% increase as compared to the 2020 average of $2,265/t (the

2019 average was $2,549/t). Stocks registered at the London

Metal Exchange (“LME”) warehouses stood at 199,575 tonnes

as of December 31, 2021, representing around 1% decrease

compared to December 31, 2020 when registered stocks stood

at 202,225 tonnes (51,225 tonnes in 2019).

The average price of tin for 2021 was $32,678/t, 90.7% higher

than the 2020 average of $17,135/t (2019 average was

$18,671/t).

The average price of aluminum for 2021 was $2,475/t,

representing a 45% increase compared to the 2020 average of

$1,702/t (the 2019 average was $1,792/t).

The average price of nickel for 2021 was $18,487/t,

representing a 34% increase compared to the 2020 average of

$13,789/t (the 2019 average was $13,936/t).

Energy market

Solid fuels, electricity and natural gas are some of the primary

energy inputs for a steelmaker. ArcelorMittal is exposed to price

volatility in each of these energy types with respect to its

purchases in the spot market and under its long-term supply

contracts.

Oil

In 2019, the oil market tightened throughout the first and second

quarter, finishing the first half of the year just higher than $65/

bbl. While tensions grew in the Middle East fueled by renewed

sanctions on Iran, the U.S. continued to pump oil at record high

levels. Facing a gloomy economic outlook, at the start of the

third quarter of 2019, the Organization of Petroleum Exporting

Countries ("OPEC") and Russia confirmed they would continue

their efforts to balance the global market by extending the 1.2

million barrels per day ("bpd") cut by another nine months.

After averaging $62.4/bbl an range-bound trading in the fourth

quarter of 2019, during the first weeks of January 2020 oil prices

traded up to $71/bbl, but immediately started to decline mainly

due to OPEC and Russia failing to find an agreement to extend

output cuts beyond March 2020, and the sudden drop of

demand due to the worldwide pandemic driven lockdown,

driving prices down 75% by April 2020. After reaching its lowest

point since 2002, oil prices, backed by various economic

stimulus packages, recovered by more than $20/bbl and were

just above $40/bbl at the end of the first half of 2020. After a

period of range-bound trading ($40 - $45/bbl for most of the

time) from June to November, prices increased by 36% in the

last two months of 2020.

This price increase was fueled by the optimism surrounding a

COVID-19 vaccine and OPEC deciding to further cut production

into 2021. In 2021, oil prices recovered strongly. In early

January, Brent crude oil traded slightly below $55/bbl and rose

to over $86/bbl at its highest by end of November. In 2021,

Brent crude oil averaged $70.95/bbl as compared to $43.20/bbl

in 2020. The strong price increase was fueled by optimism

around the mass vaccine roll out and a strong economic

recovery.

The following table shows certain quarterly average prices of oil,

thermal coal and CO2 for the past three years:

Commodities

Source:

Thomson

Reuters

Brent crude

oil

spot

average

price $ per

barrel

West Texas

intermediate

spot

average

price $ per

barrel

European

thermal

coal import

(API2)

spot

average

price

$ per ton

European

Union

allowance

average

price

€ per ton of

CO2

equivalent

Q1 2019

63.83

54.90

75.38

22.24

Q2 2019

68.47

59.91

57.13

25.55

Q3 2019

62.03

56.44

58.75

26.93

Q4 2019

62.42

56.87

58.24

24.88

Q1 2020

50.82

45.78

49.96

22.81

Q2 2020

33.39

28.00

44.61

21.28

Q3 2020

43.34

40.92

51.54

27.41

Q4 2020

45.26

42.70

58.69

27.61

Q1 2021

61.32

58.14

66.76

37.65

Q2 2021

69.08

66.17

85.96

50.17

Q3 2021

73.23

70.52

150.49

57.12

Q4 2021

79.66

77.10

165.39

68.83

CO2

The integrated steel process involves carbon reduction which

leads to CO2 emissions, which distinguishes integrated steel

producers from mini-mills and many other industries where CO2

generation is primarily linked to energy use. Launched in 2005,

the European Union Emission Trading System (“EU-ETS”) has

finished its third phase, which stretched from 2013 to December

2020. The fourth phase may require ArcelorMittal to incur

additional costs to acquire emission allowances. However, the

Company targets a reduction in emissions of 25% by 2030 and

has plans to become carbon neutral by 2050 (in particular

ArcelorMittal Europe is investing in two routes to carbon

neutrality, Smart Carbon and an innovative DRI-based route).

145

Management report

The EU-ETS is based on a cap-and-trade principle; it sets a cap

on greenhouse gas emissions (“GHG”) from covered

installations, which is then reduced year after year. To boost the

EUA price and to provide an incentive to the industry and the

power sector to alter their behavior in terms of CO2 emissions,

the European Commission keeps reforming the scheme.

Throughout the first half of 2019, the EUA price increased by

15% and finished the second quarter of 2019 at €26.5/tCO2e.

Not only did the EUA price increase but the market was highly

volatile mainly driven by uncertainties around Brexit, the end of

the compliance period in April and the market stability reserve

(“MSR”) which started operating in January 2019, reducing

auction supplies since the second week of January. A new

historical high was reached in July 2019, when the price for an

EUA reached €30 per ton of CO2 equivalent (“€/tCO2e”).

However, prices were around €25/tCO2e for the rest of 2019.

Prices in the first two months of 2020 remained in the same

range as in the fourth quarter of 2019. In March 2020, when it

became clear that Europe would go into a pandemic driven

lockdown, the CO2 price went down by €10/tCO2e (40%) within

less than ten trading days. After bottoming below €15/tCO2e in

the last week of March 2020, the market went on a steady path

of recovery demonstrating a strong correlation with the global

financial market. The CO2 prices at the end of the first half of

2020 increased again to pre-COVID-19 levels around €25/

tCO2e. For the second part of the year the market remained

hectic with price levels between €23/tCO2e and €30.5/tCO2e.

Closely mimicking the movements of the equity markets CO2

forward prices increased by 45% (+ €23/tCO2e) in the last two

months of the year, reaching an all time high of €33.45/tCO2e

as of December 31, 2020. One of the main drivers for such an

increase was the acceptance of a 55% emissions reduction

target by 2030 and the anticipation of tighter supply in the future.

On January 1, 2021, Phase 4 of the EU-ETS started, which

delayed the hand-out of free allocation. At the same time the UK

left the scheme and set up its own, with trading starting in May.

The EU Commission proposed its "Fit for 55" package and

hence various changes to the EU-ETS to reduce future supply

and drive decarbonization. Those events led to uncertainty and

hectic trading behavior. Exacerbated by the economic recovery,

the EUA price went on a sharp rally. The market started the year

below €35/tCO2e and ended above €80/tCO2e, while the

average carbon price throughout 2021 was €68/tCO2e. The

highest point of the year was on the December 8, 2021 when

carbon prices broke the €90/tCO2e mark.

The Company uses derivative financial instruments to manage

its exposure (the Company recognized a CO2 emission

provision of $492 million at December 31, 2021. See note 9.1 to

the consolidated financial statements) to fluctuations in prices of

emission rights allowances. As of December 31, 2021, the

Company had a net notional position of $1.6 billion with a net

positive fair value of $2.4 billion. See note 6.3 to the

consolidated financial statements for further information.

Natural gas - Europe

In 2019, the TTF Spot Price (the price for natural gas to be

delivered the next day, which is traded on a virtual trading

platform located in the Netherlands) averaged €13.55 per

Megawatt hour (“€/MWh”). A sharp decrease of 55% from the

beginning of the first quarter to the end of the second quarter of

2019 happened on the back of milder than normal seasonal

temperatures, rapidly improving storage levels, historical high

liquefied natural gas ("LNG") arrivals and strong imports of

Norwegian and Russian piped gas. Throughout the third quarter

of 2019, TTF spot prices traded on average at €10.2/MWh

(year-on-year 58% decrease), with a low in September close to

€7/MWh. In November, TTF spot prices increased and reached

levels around €16.6/MWh. This price increase was supported by

colder temperatures and the fear that Russia and Ukraine would

not be able to sign a new multi-year transit contract. At the end

of December 2019, the two countries agreed on a deal leading

to a price decrease, closing the year at €11.7/MWh.

The TTF spot price steadily declined from January 2020 to May

2020. The average price in January 2020 was €11.1/MWh which

declined further to an average of €4.6/MWh in May 2020. This

price drop was fueled by oversupply in the global LNG market,

continuous strong pipeline supply into Europe and weak

demand due to the absence of a harsh winter and the

COVID-19 pandemic slowing down industrial activity. At the end

of May, the TTF spot price dropped below €4.0/MWh marking a

new all-time low. It took until the end of July before prices

started to recover. Between the end of July and the end of

December 2020, the TTF spot price increased by almost €15.0/

MWh to reach a year-high of €19.05/MWh by late December.

While in August and September, U.S. LNG shut-ins limited the

arrival of the super-chilled fuel, strong Asian winter demand in

the fourth quarter led to poor arrivals of the period. In

combination with the prospect of a quick rollout of a vaccine

against COVID-19, this provided the needed support for the

year-end rally.

In 2021, TTF continued its upward trend, which started in the

second half of 2020. The low point of slightly below €16/MWh

was reached at the end of February. While the high point was hit

just before Christmas (€182/MWh). This marked a more than

1000% increase in price, amid the need to refill historical low

storages, the battle for LNG with Asia, poor Russian piped

supply into Northern Europe, and tension around the

controversial Nord Stream 2 pipeline. The average price for TTF

in 2021 was €46.5/MWh, 395% higher than 2020.

Natural gas - United States

In North America, natural gas prices (see table below) trade

independently of oil prices and are set by spot and future

Management report

146

contracts, traded on the NYMEX exchange or over-the-counter.

U.S. dry gas production during the first quarter of 2019 was

almost 13% higher than in the same period a year earlier. This

led to a faster than normal rise of working stocks in underground

storage, resulting in downward pressure of the natural gas

market. This downward pressure persisted throughout the

second half of 2019, with only occasional spikes up to $2.7 per

million British thermal units ("/MMBtu") in September and $2.9/

MMBtu in November. Nevertheless, the fourth quarter of 2019

averaged $2.4/MMBtu. Prices in the first half of 2020 ranged

between $1.5/MMBtu - $2.0/MMBtu, a low since the first quarter

of 2016. In addition to the negative impact on demand of natural

gas, the COVID-19 pandemic also impacted its production,

which stopped its multi-year growth trend and dropped sharply

during the first half of the year. On the LNG side, U.S. exports

were setting new records through the first quarter of 2020 and in

first half of 2020, several plants ramped-up with only slight

disruptions from the pandemic. However, low natural gas prices

across the global lead to some forced shut-ins of U.S. LNG

export facilities breaking the growth trend. At the end of the third

quarter and into fourth quarter of 2020, exports ramped-up

again to the early winter demand in Asia. While the Henry Hub

average remained below $2.0/MMBtu during the first half, prices

recovered steadily in the second half. At the end of October,

Henry Hub reached its highest level of the year and breached

the $3.2/MMBtu mark as compared to levels last observed in

January 2019.

Henry Hub experienced a less severe price increase than other

commodities in 2021, from averaging $2.72/MMBtu in the first

quarter of 2021 up to averaging $4.84/MMBtu in the fourth

quarter of 2021. In between, prices spiked to $6.3/MMBtu in

early October in anticipation of colder weather and the global

thirst for US LNG exports. As more liquefaction trains go online,

the global gas market had a stronger impact on the US natural

gas price.

Natural gas - Asia

The Platts Japan Korea Marker ("JKM") - the LNG benchmark

price assessment for spot physical cargoes delivered ex-ship

into Japan, South Korea, China and Taiwan - front month

contract prices lost 47% from the start of 2019 until the end of

June 2019.

During the first half of 2019, European importers had record

high levels of LNG arrivals, reflecting the abundant supply

across Asia amid healthy storage levels in key importing

countries as a result of a mild winter. Furthermore, a significant

ramp-up of new liquefaction capacity across Australia, the U.S.

and Russia meant more supply to an already oversupplied

market. With muted demand and more global supply, the low

prices persisted until the end of the second quarter of 2019. In

the fourth quarter of 2019, amid the start of the winter, the JKM

increased and averaged $5.9/MMBtu.

In the first half of 2020, JKM traded at an all-time low. The

decline in prices in the first half of 2020 was mainly due to

greater supply than demand, mainly from the U.S. where

multiple liquefaction trains ramped up, and muted demand amid

full gas storage and the impact of the pandemic on oversupply.

While some countries like South Korea or India benefited from

the low price environment, others had a year-on-year decrease

of LNG imports. Throughout the second quarter of 2020 and into

August, JKM traded below $3.0/MMBtu. It continued until

September before the market showed some signs of recovery

ahead of the winter demand. The second half of 2020, JKM

traded at historical lows during the summer and jumped to lofty

highs ($12.0/MMBtu) by end of December. This sharp increase

was fuelled by strong Asia spot demand due to colder than

average temperatures, supply disruptions in Australia and

Middle East, as well as congestions at the Panama canal

limiting U.S. supply to fill the void.

Driven by cold weather in Asia, JKM exploded in the first few

weeks of 2021. By mid-January it traded at $20/MMBtu, a new

record. In February and March, the market had cooled down

again and was trading between $7 - $9/MMBtu. However, the

sharp rally started in mid - April and lasted throughout the entire

year, not giving the market time to breath. Prices reached

almost $50/MMBtu just before Christmas, breaking the record

set in the first quarter of 2021. The price increase was fueled by

the global need to refill depleted gas storages and a fierce battle

between Europe and Asia to attract cargoes.

The following table shows quarterly average spot prices of

natural gas for the past three years:

Natural gas

Source:

Thomson

Reuters

TTF

Spot average

price

€ per MWh

Henry Hub

Spot average

price

$ per MMBtu

JKM

Spot average

price

$ per MMBtu

Q1 2019

18.47

2.87

6.86

Q2 2019

13.02

2.51

4.94

Q3 2019

10.20

2.33

4.74

Q4 2019

12.66

2.41

5.91

Q1 2020

9.75

1.87

3.69

Q2 2020

5.38

1.75

2.23

Q3 2020

7.83

2.12

3.48

Q4 2020

14.70

2.76

7.43

Q1 2021

18.55

2.72

8.85

Q2 2021

25.18

2.98

9.71

Q3 2021

48.51

4.32

17.80

Q4 2021

94.04

4.84

34.95

147

Management report

Electricity - Europe

Due to the regional nature of electricity markets, prices follow

mainly local drivers (i.e. energy mix of the respective country,

power generation from renewables, country specific energy

policies, etc.). In 2019, tumbling fuel prices, combined with

healthy renewable power generation and strong nuclear output

helped to pressure spot prices (see average prices in the table

below) across North West Europe. The lack of a severe summer

heatwave helped to pressure the third quarter of 2019 prices.

Wet early winter months, mild temperatures and good

renewable power output contributed to a significant reduction in

France and Belgium in the fourth quarter of 2019 as compared

to 2018. This decrease occurred despite the fact that French

nuclear availability was at a multi-year low for that time of the

year, which is normally a strong support for prices. The 2019

trend continued into 2020, lower fuel prices meant lower

generation cost while at the same time the renewable output

across Europe grew year-on-year. On the demand side, the

COVID-19 pandemic led to a sudden and severe demand drop.

Consequently, in the first half of 2020, the power prices across

Europe were almost reduced in half compared to the first half of

2019. May and June marked the low point for electricity prices

across Europe. Along with natural gas and CO2 prices, the

power prices recovered during the second half of the year. A late

heatwave in September in combination with poor renewable

output provided the first strong price uptick. In December, the

opposite, colder than normal temperatures in combination with

poor renewables led to a second strong price uptick.

In 2021, the electricity price experienced new highs amid high

fuel prices and renewable power not able to provide the needed

relief. The fourth quarter of 2021 saw the highest prices ever

recorded, four to five times higher than 2020.

The following table shows quarterly average spot prices of

electricity in Germany, France and Belgium for the past three

years:

Electricity

Source:

Thomson

Reuters

Germany

Baseload spot

average price

€ per MWh

France

Baseload spot

average price

€ per MWh

Belgium

Baseload spot

average price

€ per MWh

Q1 2019

41.35

47.18

48.34

Q2 2019

35.74

34.81

34.44

Q3 2019

37.55

35.64

35.11

Q4 2019

36.51

40.23

39.37

Q1 2020

26.44

29.29

29.98

Q2 2020

20.36

18.13

18.62

Q3 2020

36.22

39.13

36.61

Q4 2020

38.85

42.22

42.28

Q1 2021

49.62

53.07

50.98

Q2 2021

60.68

64.24

62.69

Q3 2021

97.27

96.53

97.41

Q4 2021

178.77

221.19

204.18

Ocean freight

The dry bulk market experienced its weakest year in 2020 since

2016. The Baltic Dry Index (“BDI”) average was at 1,066 points

in 2020 compared to 1,352 points in 2019. The Capesize index

decreased by 27% year-on-year to average $13,073/day in

2020 compared to $18,025/day in 2019. The Panamax index

decreased by 23% to an average of $8,587/day as compared to

$11,112/day in 2019. In 2020, on the cape size, a total of 104

vessels or 23.4 million deadweight was delivered, 45 vessels

were dismantled or 10.6 million deadweight as compared to

2019 when 79 vessels or 18.8 million deadweight was delivered.

Panamax in 2020 had a total deliveries of 148 vessels or 12.2

million deadweight delivered and 0.8 million deadweight

dismantled as compared to 2019 with 134 vessels or 11.1

million deadweight delivered.

Fleet growth across all segments was moderate, around an

increase of 3.8% with order book and around 6% of the existing

fleet as compared to an increase of 4.1% in deadweight terms in

2019.

Throughout 2021, the market remained firm compared to 2020

but was extremely volatile, particularly in the second half of the

year with the third quarter being the strongest quarter. The BDI

average was at 2,943 points in 2021 as compared to 1,066

points in 2020. The Capesize index increased by 155% year-on-

year to an average of $33,333/day in 2021 as compared to

$13,073/day in 2020. The Panamax index increased by 171% to

an average of $26,898/day in 2021 as compared to $9,923/day

in 2020. Supramax rates hit multiyear highs in 2021, with the

Baltic TC average peaking at $39,860/day in October from

$11,305/day at the start of 2021 (+253%), before ending at

Management report

148

$25,188/day (+$13,883 /day +123% as compared to the start of

2021). The weighted average Supramax rate was $26,767/day

in 2021 as compared to $8,188/day in 2020 (+227%).

Fleet growth across all segments was relatively moderate in

2021 as compared to 2020, with an increase of 3.6% with the

average dry bulk demolition age climbing to 28.55 years from

27.19 in 2020, naturally driven by far stronger market conditions.

Sources: Baltic Index, Clarksons Platou

Impact of exchange rate movements

Because a substantial portion of ArcelorMittal’s assets, liabilities,

sales and earnings are denominated in currencies other than

the U.S. dollar (its reporting currency), ArcelorMittal has

exposure to fluctuations in the values of these currencies

relative to the U.S. dollar. These currency fluctuations,

especially the fluctuation of the U.S. dollar relative to the euro,

as well as fluctuations in the currencies of the other countries in

which ArcelorMittal has significant operations and sales, can

have a material impact on its results of operations. For example,

ArcelorMittal’s subsidiaries may purchase raw materials,

including iron ore and coking coal, in U.S. dollar, but may sell

finished steel products in other currencies. Consequently, an

appreciation of the U.S. dollar will increase the cost of raw

materials; thereby having a negative impact on the Company’s

operating margins, unless the Company is able to pass along

the higher cost in the form of higher selling prices. In order to

minimize its currency exposure, ArcelorMittal enters into

hedging transactions to lock-in a set exchange rate, as per its

risk management policies.

Since April 1, 2018, the Company has designated a portfolio of

euro denominated debt (€3.7 billion as of December 31, 2021)

as a hedge of certain euro denominated investments (€8.3

billion as of December 31, 2021) in order to mitigate the foreign

currency risk arising from certain euro denominated subsidiaries

net assets. The risk arises from the fluctuation in spot exchange

rates between EUR/USD, which causes the amount of the net

investments to vary. See also note 6.3 to the consolidated

financial statements. As a result of the hedge designation,

foreign exchange gains and losses related to the portfolio of

euro denominated debt are recognized in other comprehensive

income.

As of December 31, 2021, the Company is mainly subject to

foreign exchange exposure relating to the euro, Brazilian real,

Canadian dollar, Indian rupee, Kazakh tenge, South African

rand, Mexican peso, Polish zloty, Argentine peso and Ukrainian

hryvnia against the U.S. dollar resulting from its trade payables

and receivables.

In 2021, the euro depreciated from 1.2271 at December 31,

2020 to 1.1326 December 31, 2021 against the U.S. dollar as a

result of the policy’s divergence between American and

European Central Bank due to inflation, quantitative easing and

the progress of COVID-19 pandemic recovery.

The Polish zloty depreciated against the U.S. dollar throughout

2021 from 3.72 on December 31, 2020 to 4.06 on December 31,

2021. Although the Central Bank of Poland has been one of the

central banks increasing rates the most in Europe, uncertainties

have resulted in volatility in the exchange rate.

The Ukrainian hryvnia appreciated against the U.S. dollar in

2021 starting from 28.27 at December 31, 2020 to 27.28 on

December 31, 2021. Despite the good global economic recover,

y geopolitical tensions and surging energy prices have weighed

on the value of the currency.

The Kazakh tenge depreciated against the U.S. dollar in 2021

starting from 420.71 at December 31, 2020 to 431.67 on

December 31, 2021. The high correlation with Russia has led

policy makers to weaken their currency to be profitable on the

balance of trade with their neighbouring country

The Indian rupee depreciated against the U.S. dollar in 2021

from 73.07 at the beginning of the year to 74.37 at December

31, 2021 due to the concerning COVID-19 pandemic evolution

and India’s high dependency on energy imports in a context of

surging prices.

The South African rand depreciated against the U.S. dollar from

14.62 at December 31, 2020 to 15.91 on December 31, 2021 in

the context of higher inflation that the Central Bank of South

Africa considered temporary and not requiring an intervention.

The Canadian dollar remained at same level in 2021 as

compared to 2020 against the U.S. dollar at 1.27, despite

commodity prices weighing on the currency and the economic

impact of the COVID-19 pandemic. The Canadian Central Bank

kept its rates on hold and would follow in the shadow of the

Fed's monetary policy.

The Mexican peso depreciated in 2021 against the U.S. dollar

from 19.90 at December 31, 2020 to 20.43 at December 31,

2021. Growth in 2021 was lower than expected due to the

COVID-19 pandemic, lower oil production and supply chain

disruptions.

The Brazilian real depreciated against the U.S. dollar in 2021

from 5.20 at December 31, 2020 to 5.58 at December 31, 2021.

Uncertainty over the next election in Brazil and the government

spending bill plan have thrown uncertainty on the Brazilian real,

in addition to concerns over growing inflation.

The Argentine peso depreciated against the U.S. dollar in 2021

from 84.15 on December 31, 2020 to 102.72 on December 31,

2021, as a poor economy, debt issues and the COVID-19

pandemic weighed on the local economy.

149

Management report

Consolidation in the steel and mining industries

Prior to 2017, consolidation transactions had decreased

significantly in terms of number and value in the context of

economic uncertainties in developed economies combined with

a slowdown in emerging markets.

However, in an effort to reduce the worldwide structural

overcapacity, some key consolidation steps were undertaken in

2021, 2020 and 2019, specifically in China, in the U.S. and in

Europe.

Steel industry consolidation in China aims at enhancing

international competitiveness, reducing overcapacity,

rationalizing steel production based on obsolete technology,

improving energy efficiency, achieving environmental targets

and strengthening the bargaining position of Chinese steel

companies in price negotiations for iron ore. The Chinese

government set a target that 60 to 70 percent of steel should be

produced by the top ten steel groups by 2025. In September

2019, Baowu Steel Group ("Baowu") and Magang (Group)

Holding Co., Ltd ("Magang") signed a partnership agreement

where Baowu secured a 51% stake in Magang, increasing

Baowu's steel production capacity to approximately 90 million

tonnes and representing a big step in the ongoing consolidation

of the Chinese steel industry. In February 2021, Baowu acquired

a 90% controlling stake in Kunming Iron and Steel and

increased accordingly its steel production capacity to 115 million

tonnes. In July 2021, Baowu announced that it would take over

China's seventh-largest steel producer Shandong Iron and

Steel, which would increase Baowu's steel production capacity

to approximately 155 million tonnes. In August 2021, Ansteel

Group and Ben Gang Group, two of the biggest state-owned

steelmakers in northeast China, started the process of merging

their businesses to create the world's third-largest steel

producer with an annual capacity of 63 million tonnes. In India,

on December 29, 2020, Jindal Stainless Limited announced an

all-equity merger with Jindal Stainless (Hisar) Limited. The

combined entity will have a capacity of 1.9 million tonnes and is

expected to enter the top 10 stainless steel companies in the

world and be the largest stainless steel company in India. The

closing is expected in the second half of 2022 and is subject to

regulatory approvals.

In Europe, on October 29, 2019, Liberty House Group

announced a merger with GFG Alliance's steel businesses to

create Liberty Steel Group with a capacity of 18 million tonnes.

According to the announcement, Liberty Steel Group will be the

eighth largest steel producer outside China, with operations

stretching from Australia to continental Europe, the United

Kingdom and the United States. In November 2018,

ArcelorMittal completed the acquisition (via a long-term lease) of

ArcelorMittal Italia, Europe’s largest single steel site and only

integrated steelmaker in Italy with its main production facility

based in Taranto. The transaction was approved by the

European Commission on May 7, 2018 subject to the disposal

of certain assets in Italy, Romania, North Macedonia, the Czech

Republic, Luxembourg and Belgium, which were sold to Liberty

Steel Group in June 2019. In December 2020, ArcelorMittal

signed an agreement with Invitalia to form a public-private

partnership, which became effective mid-April 2021. See "Key

transactions and events in 2021."

In another step towards consolidation in the U.S., United States

Steel Corp announced on October 1, 2019 that it reached an

agreement to purchase a minority stake in Big River Steel with

an option to take complete control of the company over four

years; and in January 2021, United States Steel acquired Big

River Steel in its entirety. On December 3, 2019, AK Steel and

Cleveland Cliffs announced an all stock merger which was

completed in March 2020. Additionally, in December 2020,

ArcelorMittal sold ArcelorMittal USA's operations to Cleveland-

Cliffs.

In December 2019, ArcelorMittal and Nippon Steel Corporation

("NSC") completed the acquisition of AMNS India through a joint

venture agreement and following the submission of a

competitive resolution plan setting out a positive future for the

bankrupt company, an integrated flat steel producer and the

largest steel company in western India. See “Business

overview-Properties and capital expenditures—Investments in

joint ventures”.

Further consolidation in the future should allow the steel industry

to perform more consistently through industry cycles by

achieving greater efficiencies and economies of scale.

Critical accounting policies and use of judgments and estimates

Management’s discussion and analysis of ArcelorMittal’s

operational results and financial condition is based on

ArcelorMittal’s consolidated financial statements, which have

been prepared in accordance with IFRS. The preparation of

financial statements in conformity with IFRS recognition and

measurement principles and, in particular, making the critical

accounting judgments highlighted below require the use of

estimates and assumptions that affect the reported amounts of

assets, liabilities, revenues and expenses. Management reviews

its estimates on an ongoing basis using currently available

information. Changes in facts and circumstances or obtaining

new information or more experience may result in revised

estimates, and actual results could differ from those estimates.

An overview of ArcelorMittal's critical accounting policies under

which significant judgments, estimates and assumptions are

made may be found in note 1.2 to the consolidated financial

statements.

Management report

150

Export sales

Because ArcelorMittal’s customers are mainly based outside its

home country of Luxembourg, all of its sales are considered to

be export sales. Annual sales to a single individual customer did

not exceed 5% of sales in any of the periods presented.

Legal proceedings

ArcelorMittal is currently and may in the future be involved in

litigation, arbitration or other legal proceedings. Provisions

related to legal and arbitration proceedings are recorded in

accordance with the accounting policies described in note 9.1 to

ArcelorMittal’s consolidated financial statements. Please refer to

note 9.3 for a description of contingencies, including legal

proceedings.

Operating results

The following discussion and analysis should be read in

conjunction with ArcelorMittal’s consolidated financial

statements included in this annual report.

ArcelorMittal reports its operations in five reportable segments:

NAFTA, Brazil, Europe, ACIS and Mining. The key performance

indicators that ArcelorMittal’s management uses to analyze

operations are sales, average steel selling prices, crude steel

production, steel shipments, iron ore production and operating

income. Management’s analysis of liquidity and capital

resources is driven by net cash flow from operations less capital

expenditures.

As from April 1, 2021, ArcelorMittal implemented changes to its

organizational structure whereby primary responsibility for

captive mining operations whose output is mainly consumed by

their respective steel segments has been transferred to such

segments. The Mining segment retains primary responsibility for

the operation of the seaborne oriented operations at AMMC and

AML and continues to provide technical support to all mining

operations within the Company. Accordingly, the Company

modified the structure of its segment information in order to

reflect changes in its approach to managing its operations and

segment disclosures have been recast to reflect this new

segmentation. Only the seaborne-oriented operations of AMMC

and AML are reported within the Mining segment. The results of

all other mines are henceforth accounted for within the steel

segment that it primarily supplies.

Years ended December 31, 2021, 2020 and 2019

Sales, operating income, crude steel production, steel shipments, average steel selling prices and mining production

The following tables provide a summary of ArcelorMittal’s performance by reportable segment for the years ended December 31, 2021,

2020 and 2019:

Sales for the year ended December 31,1

Operating income (loss) for the year ended December 31,2

2021

2020

2019

2021

2020

2019

Segment

(in $ millions)

NAFTA

12,530

13,668

18,706

2,800

1,684

(1,144)

Brazil

12,856

6,336

8,166

3,798

777

853

Europe

43,334

28,071

37,721

5,672

(1,439)

(1,101)

ACIS

9,854

5,737

6,997

2,705

209

Mining

4,045

2,785

2,664

2,371

1,247

1,026

Others and eliminations

(6,048)

(3,327)

(3,639)

(370)

(368)

(292)

Total

76,571

53,270

70,615

16,976

2,110

(627)

1.Amounts are prior to inter-segment eliminations (except for total) and sales include non-steel sales.

2.Others and eliminations to segment operating income reflects certain adjustments made to operating income of the segments to reflect corporate costs, income from non-

steel operations (e.g. energy, logistics and shipping services) and the elimination of stock margins between segments. See table below.

151

Management report

Others and eliminations operating (loss) income

Year ended December 31,

2021

2020

2019

(in $ millions)

Corporate and shared services 1

(201)

(199)

(144)

Financial activities

(21)

(22)

Shipping and logistics

(19)

Intragroup stock margin eliminations

(123)

(110)

Depreciation and impairment 2

(40)

(43)

(155)

Total adjustments to segment operating income and other

(370)

(368)

(292)

1.Includes primarily staff and other holding costs and results from shared service activities.

2.Depreciation charges for 2019 included $94 million of depreciation of right-of-use assets recognized in property, plant and equipment following the adoption of IFRS 16

"Leases" as of January 1, 2019 with respect to the Company’s shipping business Global Chartering, of which ArcelorMittal sold a 50% controlling interest on December

31, 2019.

Shipments and average steel selling price

ArcelorMittal had steel shipments of 62.9 million tonnes for the

year ended December 31, 2021 as compared to steel shipments

of 69.1 million tonnes for the year ended December 31, 2020,

representing a decrease of 8.9%. On a comparable basis,

excluding the shipments from ArcelorMittal USA, sold to

Cleveland -Cliffs on December 9, 2020, and ArcelorMittal Italia,

deconsolidated as from April 14, 2021), steel shipments for 2021

increased by 9.2% as a result of the broad based recovery in

demand following the impacts of COVID-19 on 2020 operations.

Segments experienced year on year shipment growth: Europe

0.9%, Brazil 24.3%, ACIS 4.8%, while NAFTA was down 46.5%

(due to the factors discussed above). On a comparable basis, all

segments experienced year on year shipment growth: Europe

8.9%, Brazil 24.3%, ACIS 4.8% and NAFTA 8.0%.

Steel shipments decreased 5.2% to 32.6 million tonnes in the

first half of 2021 compared to 34.3 million tonnes for the first half

of 2020. Steel shipments decreased 12.8% to 30.3 million

tonnes in the second half of 2021 compared to 34.8 million

tonnes in the second half of 2020. On a comparable basis

excluding the impact of ArcelorMittal USA and ArcelorMittal

Italia, steel shipments increased by 13.4% and 4.8% in the first

and second half of 2021, compared to the first and second half

2020, as economic activities continued to recover.

ArcelorMittal had steel shipments of 69.1 million tonnes for the

year ended December 31, 2020 as compared to steel shipments

of 84.5 million tonnes for the year ended December 31, 2019,

representing a decrease of 18.2%. On a comparable basis,

removing shipments from the remedy assets sold in relation to

the ArcelorMittal Italia acquisition in 2019 and the shipments

from ArcelorMittal USA in 2019 and 2020 due to the sale, steel

shipments for 2020 declined by 15.8% to 60.1 million tonnes as

compared to 71.3 million tonnes in 2019, primarily due to the

impact of the COVID-19 pandemic and the slowdown that

occurred in first half of 2020. Shipments were lower in Europe

(22.4%), or 18.6% excluding the impact of the remedy asset

sales related to the ArcelorMittal Italia acquisition in 2019),

Brazil (15.9%), NAFTA (14.4%), or 8.7% excluding ArcelorMittal

USA) and ACIS (14.4%).

Steel shipments decreased 23.0% to 34.3 million tonnes in the

first half of 2020 compared to 44.6 million tonnes for the first half

of 2019 (down 19.4% excluding the impact of the remedy asset

sales related to the ArcelorMittal Italia acquisition in the first half

of 2019), while steel shipments decreased 12.9% to 34.8 million

tonnes in the second half of 2020 compared to 39.9 million

tonnes in the second half of 2019 (down 10.6% excluding the

impact of ArcelorMittal USA on a comparable basis).

Average steel selling prices increased by 54.2% for the year

ended December 31, 2021 as compared to the year ended

December 31, 2020 in the context of a strong international

pricing environment. Average steel selling prices in the first half

of 2021 increased by 41.5% as compared to the first half of

2020 and increased by 67.5% in the second half of 2021 as

compared to the second half of 2020.

Average steel selling price decreased by 8.7% for the year

ended December 31, 2020 as compared to the year ended

December 31, 2019. Average steel selling price in the first half

of 2020 decreased by 14.7% as compared to the first half of

2019 and decreased by 1.8% in the second half of 2020 as

compared to the second half of 2019.

Sales

ArcelorMittal had sales of $76.6 billion for the year ended

December 31, 2021, representing a 43.7% increase from sales

of $53.3 billion for the year ended December 31, 2020, primarily

due to 54.2% higher average steel selling prices and higher iron

ore prices partly offset by 8.9% lower steel shipments following

the disposal of ArcelorMittal USA and the deconsolidation of

ArcelorMittal Italia. In the first half of 2021, sales were $35.5

billion increasing from $25.8 billion in the first half of 2020,

primarily due to 41.5% higher average steel selling prices partly

offset by 5.2% lower steel shipments following such change in

Management report

152

scope of consolidation. In the second half of 2021, sales of

$41.1 billion represented a 49.6% increase as compared to

sales of $27.5 billion in the second half of 2020, primarily driven

by a 67.5% increase in average steel selling prices partly offset

by 12.8% lower steel shipments.

ArcelorMittal had sales of $53.3 billion for the year ended

December 31, 2020, representing a 24.6% decrease from sales

of $70.6 billion for the year ended December 31, 2019, primarily

due to the impacts of the COVID-19 pandemic on lower steel

shipments as discussed above and a 8.7% decrease in average

steel selling prices. In the first half of 2020, sales were $25.8

billion, decreasing from $38.5 billion in the first half of 2019,

primarily due to 14.7% lower average steel selling prices and

23.0% lower steel shipments. In the second half of 2020, sales

of $27.5 billion represented a 14.5% decrease as compared to

sales of $32.1 billion in the second half of 2019, primarily driven

by a 1.8% decrease in average steel selling prices and a 12.9%

decrease in steel shipments.

Cost of sales

Cost of sales consists primarily of purchases of raw materials

necessary for steel-making (iron ore, coke and coking coal,

scrap and alloys), energy, repair and maintenance costs, as well

as direct labor costs, depreciation and impairment. Cost of sales

for the year ended December 31, 2021 was $57.3 billion as

compared to $49.1 billion for the year ended December 31,

2020, mainly driven by higher raw material costs offset in part by

lower shipments and lower inventory related charges. Cost of

sales for the year ended December 31, 2021 included a $218

million impairment reversal related to the Sestao facility in Spain

partly offset by $123 million charges with respect to the

expected decommissioning costs of the dam at the Serra Azul

mine in Brazil.

Cost of sales for the year ended December 31, 2020 was $49.1

billion as compared to $68.9 billion for the year ended

December 31, 2019, due to lower steel shipments, the cost

reduction measures in response to the COVID-19 pandemic, the

gain of $1.5 billion related to the sale of ArcelorMittal USA and

reversal of previous impairments of property plant and

equipment at ArcelorMittal USA in connection with the sale for

$660 million. These decreases were offset in part by

impairments of $331 million relating to the Company's plate

assets classified as held for sale in Europe, charges of $104

million following the permanent closure of a blast furnace and

steel plant in Krakow (Poland) as well as $146 million of site

restoration and termination charges for it, charges related to the

permanent closure of the coke plant in Florange (France) of $92

million and inventory related charges in NAFTA and Europe of

$0.7 billion.

Depreciation charge for the year ended December 31, 2021,

was $2.5 billion as compared to $3.0 billion for the year ended

December 31, 2020 largely due to the sale of ArcelorMittal USA

and the deconsolidation of ArcelorMittal Italia. In 2020, the

depreciation charge was stable at $3.1 billion compared to

2019. For the year 2022 depreciation expense is expected to be

approximately $2.7 billion (based on current exchange rates)

primarily driven by changes in the useful lives estimates for

certain assets in Europe and Canada due to decarbonization

projects.

Selling, general and administrative expenses

Selling, general and administrative expenses ("SG&A") were

$2.3 billion for the year ended December 31, 2021 as compared

to $2.0 billion for the year ended December 31, 2020 and $2.4

billion for the year ended December 31, 2019. SG&A as a

percentage of sales decreased for the year ended

December 31, 2021 (2.9%) as compared to 2020 (3.8%) and

2019 (3.3%).

Operating income

ArcelorMittal’s operating income for the year ended December

31, 2021 was $17.0 billion as compared to $2.1 billion for the

year ended December 31, 2020, primarily driven by positive

steel price-cost effects and improved iron ore reference prices

(46.7% increase year on year).

ArcelorMittal’s operating income for the year ended December

31, 2020 was $2.1 billion as compared with an operating loss of

$0.6 billion for the year ended December 31, 2019 and was

impacted by the gains and impairments described above.

Operating income was also impacted by weaker operating

conditions as compared to 2019, including a negative price-cost

effect in steel segments and lower steel shipments due to the

COVID-19 pandemic offset in part by the fixed cost savings

described above and improved mining performance, driven by

higher seaborne iron ore reference prices (which were up

16.2%).

ArcelorMittal’s operating loss for the year ended December 31,

2019 was $0.6 billion primarily impacted by weaker operating

conditions (negative price-cost effect in steel segments)

reflecting both the decline in steel prices and higher raw material

costs (due in particular to supply-side developments in Brazil),

impairments and inventory related charges, offset in part by

improved mining segment performance driven by higher

seaborne iron ore reference prices (which were up 34.3%). Raw

material prices increased during 2019 and for most of the year

remained disconnected from steel fundamentals, compressing

steel spreads to unsustainably low levels.

153

Management report

NAFTA

Performance for the year

ended December 31,

(in millions of USD unless

otherwise shown)

2021

2020

2019

Sales

12,530

13,668

18,706

Depreciation

(325)

(537)

(638)

Net impairment reversal

(charges)

—

660

(1,300)

Operating income (loss)

2,800

1,684

(1,144)

Crude steel production

(thousand tonnes)

8,487

17,813

21,897

Flat product shipments

6,879

15,422

18,261

Long product shipments

3,088

2,884

3,260

Others and eliminations

(381)

(404)

(600)

Total steel shipments

(thousand tonnes)

9,586

17,902

20,921

Average steel selling price

(USD/tonne)

1,128

702

810

Crude steel production, steel shipments and average steel

selling price

Crude steel production for the NAFTA segment decreased

52.4% to 8.5 million tonnes for the year ended December 31,

2021 as compared to 17.8 million tonnes for the year ended

December 31, 2020 primarily due to the sale of ArcelorMittal

USA on December 9, 2020 (on a comparable basis crude steel

production decreased marginally by 0.7%). Crude steel

production declined 51.7% in the first half of 2021 and 53.1% in

the second half of 2021 as compared to the first half of 2020

and the second half of 2020, respectively, for the same reason.

In the first quarter of 2021, crude steel production was impacted

by the disruption at Mexican operations due to severe weather.

Crude steel production increased by 4.5% in the second quarter

of 2021 as compared to the first quarter of 2021 following an

improvement in demand and the recovery of Mexican operations

post disruptions due to severe weather in the prior quarter.

Crude steel production increased 16.5% in the first half of 2021

after excluding the impact of ArcelorMittal USA disposal. Crude

steel production in the second half of 2021 was 0.6% lower than

in the second half of 2020 on a comparable basis primarily due

to operational disruptions (including the impact of Hurricane Ida

in Mexico) during the third quarter of 2021.

Crude steel production for the NAFTA segment decreased

18.7% to 17.8 million tonnes for the year ended December 31,

2020 as compared to 21.9 million tonnes for the year ended

December 31, 2019. Crude steel production declined in the first

half of 2020 primarily due to the adjustment of production to

align with demand which was impacted by the pandemic

(particularly in the U.S. and Canadian operations), with the

adaptation of capacity continuing through the second quarter of

2020. Crude steel production in the second half of 2020 was

21.1% lower than the second half of 2019 mainly due to the

adjustment of production to align with demand and the sale of

ArcelorMittal USA. Crude steel production in the fourth quarter

of 2020 for the rest of the NAFTA segment was 2.1 million

tonnes, which represented a 2.8% increase compared to the

third quarter of 2020 following the gradual improvement in

demand. Crude steel production in 2019 had been impacted by

the restart of a blast furnace in Mexico which was only fully

operational in the second quarter of 2019, loss due to power

outage in Burns Harbour in the first quarter of 2019 and planned

outages both in flat and long product operations in the fourth

quarter of 2019.

Steel shipments in the NAFTA segment decreased 46.5% for

the year ended December 31, 2021 as compared to the year

ended December 31, 2020 primarily due to the sale of

ArcelorMittal USA (on a comparable basis, steel shipments

increased by 8.0%). Steel shipments decreased by 45.4% in the

first half of 2021 compared to the first half of the 2020 and by

47.7% in the second half of 2021 as compared to the second

half of 2020, primarily due to the sale of ArcelorMittal USA. On

a comparable basis and reflecting the improvement in demand,

steel shipments in the first half of 2021 increased by 18.4%

compared to the first half of 2020 which was impacted by

COVID-19. Steel shipments decreased by 1.9% in the second

half of 2021 as compared to the second half of 2020 primarily

due to weaker demand in North America, including automotive

and lower production as mentioned above.

Steel shipments in NAFTA segment decreased 14.4% for the

year ended December 31, 2020 as compared to the year ended

December 31, 2019 (including the impact of the sale of

ArcelorMittal USA as mentioned above), reflecting the lower

market demand during the year. Steel shipments increased for

the rest of the NAFTA segment in the fourth quarter of 2020 by

4.9% following the gradual improvement in demand compared

to the third quarter of 2020 and was only down by 1.4%

compared to the fourth quarter of 2019 on a comparable basis.

Shipments from the U.S. operations in 2020 were 9.14 million

tonnes.

Average steel selling prices in NAFTA segment increased 60.7%

for the year ended December 31, 2021 as compared to the year

ended December 31, 2020. In the first half of 2021, average

steel selling prices were 37.4% higher than the first half of 2020,

inline with the sharp increase in market prices. Average steel

selling prices in the second half of 2021 were 86.8% higher as

compared to the second half of 2020.

Average steel selling prices in NAFTA segment decreased

13.4% for the year ended December 31, 2020 as compared to

the year ended December 31, 2019. In the first half of 2020,

average steel selling prices were 18.5% lower than the first half

of 2019, inline with the decline in market prices. Average steel

Management report

154

selling prices in the second half of 2020 began to improve but

remained 7.2% lower as compared to the second half of 2019.

Sales

Sales in the NAFTA segment were $12.5 billion for the year

ended December 31, 2021, representing a 8.3% decrease as

compared to the year ended December 31, 2020. Sales in the

NAFTA segment in first half of 2021 decreased by 18.9% as

compared to the first half of 2020, mainly due to the sale of

ArcelorMittal USA offset in part by higher average steel selling

prices. Sales in the NAFTA segment in the second half of 2021

increased by 3.2% as compared to the second half of 2020,

mainly due to the significant increase in average steel selling

prices, partially offset by the significant decrease in steel

shipments (due to sale of ArcelorMittal USA as discussed above

in section steel shipments).

Sales in the NAFTA segment were $13.7 billion for the year

ended December 31, 2020, representing a 26.9% decrease as

compared to the year ended December 31, 2019. Sales

decreased primarily as a result of a decrease in average steel

selling prices by 13.4% and a decrease in steel shipments by

14.4%.

Operating income (loss)

Operating income for the NAFTA segment was $2.8 billion for

the year ended December 31, 2021 as compared to $1.7 billion

for the year ended December 31, 2020. The increase in

operating income for the year ended December 31, 2021 was

mainly driven by significant positive price-cost effect and offset

in part by lower steel shipments following the sale of

ArcelorMittal USA. Operating income in 2020 included a $1.5

billion gain on the sale of ArcelorMittal USA and a $660 million

gain related to the partial reversal of impairments recorded in

ArcelorMittal USA following the announced sale, as well as

inventory related charges of $0.5 billion.

Operating income for the NAFTA segment was $1.7 billion for

the year ended December 31, 2020 as compared to operating

loss of $1.1 billion for the year ended December 31, 2019.

Operating income for the year ended December 31, 2020

includes a $1.5 billion gain on the sale of ArcelorMittal USA and

a $660 million gain related to the partial reversal of impairments

recorded in ArcelorMittal USA following the announced sale, as

well as inventory related charges of $0.5 billion. Operating loss

for the year ended December 31, 2019 was impacted by

impairment charges of $1.3 billion related to the property, plant

and equipment of ArcelorMittal USA and inventory related

charges of $0.2 billion following a period of exceptionally weak

steel pricing and reflected weak demand exacerbated by

prolonged customer destocking and increased domestic supply

with prices well below import parity, and high raw material

prices. Excluding these gains, operating performance reflected

weaker operating conditions (lower volumes and negative price-

cost effect offset in part by lower fixed cost) due in particular to

the impact of the COVID-19 pandemic, offset in part by a

reduction in operating costs, in particular fixed costs.

Brazil

Performance for the year

ended December 31,

(in millions of USD unless

otherwise shown)

2021

2020

2019

Sales

12,856

6,336

8,166

Depreciation

(228)

(277)

Operating income

3,798

777

853

Crude steel production

(thousand tonnes)

12,413

9,539

11,001

Flat product shipments

6,425

4,722

6,328

Long product shipments

5,332

4,740

4,918

Others and eliminations

(62)

(52)

(54)

Total steel shipments

(thousand tonnes)

11,695

9,410

11,192

Average steel selling price

(USD/tonne)

1,030

634

679

Crude steel production, steel shipments and average steel

selling price

Crude steel production for the Brazil segment increased 30.1%

to 12.4 million tonnes for the year ended December 31, 2021 as

compared to 9.5 million tonnes for the year ended December

31, 2020 due to higher production in both flat (following the

restart of BF#3 at ArcelorMittal Tubarao in the fourth quarter of

2020) and long products due to the continued recovery in

demand as compared to 2020, when production was adapted to

match the reduced demand levels driven by the COVID-19

pandemic. In particular, the Company idled ArcelorMittal

Tubarão's blast furnace No. 3 from April 21, 2020, and

implemented production curtailments in Argentina and of long

product capacity in Brazil, to match demand levels.

Subsequently, given the sharp recovery in domestic demand,

improving export market conditions and a favorable cost

position, the Company restarted activities at ArcelorMittal

Tubarão's blast furnace No. 2 in July 2020 (idled since June

2019) and blast furnace No. 3 in October 2020 and substantially

all of its long product capacity in Brazil, given the ongoing

recovery in demand in the second half of 2020.

Crude steel production decreased 13.3% to 9.5 million tonnes

for the year ended December 31, 2020 as compared to 11.0

million tonnes for the year ended December 31, 2019 mainly

due to the COVID-19 pandemic and reduction in demand most

significantly in the second quarter of 2020. Crude steel

production in 2019 had been impacted by lower flat production

following the stoppage of ArcelorMittal Tubarão's blast furnace

#2 in response to deteriorating export market conditions and

lower long product production.

155

Management report

Steel shipments increased 24.3% to 11.7 million tonnes for the

year ended December 31, 2021 as compared to 9.4 million

tonnes for the year ended December 31, 2020. Steel shipments

increased 32.3% in the first half of 2021 as compared to the first

half of 2020 primarily due to the recovery in demand for both flat

(domestic and exports) and long products, as economic activity

continued to recover throughout the first half of 2021, while the

first half of 2020 was impacted by the COVID-19 pandemic.

Steel shipments in the second half of 2021 increased 17.3% as

compared to the second half of 2020, primarily driven by

continued recovery in demand.

Steel shipments decreased to 9.4 million tonnes for the year

ended December 31, 2020 as compared to 11.2 million tonnes

for the year ended December 31, 2019. Steel shipments in the

first half of 2020 decreased 22.2% as compared to the first half

of 2019 primarily due to the impacts of the COVID-19 pandemic,

while shipments for the second half of 2020 were only 9.5%

lower compared to the second half of 2019.

Average steel selling prices increased 62.5% for the year ended

December 31, 2021 as compared to the year ended December

31, 2020 in line with the sharp increase in market prices.

Average steel selling prices increased 56.9% in the first half of

2021 compared to the first half of 2020 and increased 68.4% in

the second half of 2021 compared to the second half of 2020.

Steel selling prices decreased however 12.3% in the fourth

quarter of 2021 as compared to the third quarter of 2021.

Average steel selling prices decreased 6.7% for the year ended

December 31, 2020 as compared to the year ended December

31, 2019 in line with domestic and export prices and include the

impact of the depreciation of the Brazilian Real on domestic

selling prices. Average steel selling prices declined 15.0% in the

first half of 2020 compared to first half of 2019 and increased

1.8% in the second half of 2020 compared to the second half of

2019 due to improvements for both domestic and export flat and

long products.

Sales

In the Brazil segment, sales increased 102.9% to $12.9 billion

for the year ended December 31, 2021 as compared to the year

ended December 31, 2020, primarily due to 62.5% higher

average steel selling prices and 24.3% higher steel shipments.

In the first half of 2021, sales increased 106.6% to $5.8 billion

as compared to $2.8 billion for the first half of 2020 primarily due

to 56.9% higher average steel selling prices and 32.3% higher

steel shipments. In the second half of 2021, sales increased

100.0% to $7.1 billion as compared to $3.5 billion for the second

half of 2020 driven by a 17.3% increase in shipments and 68.4%

increase in average steel selling prices.

In the Brazil segment, sales decreased 22.4% to 6.3 billion for

the year ended December 31, 2020 as compared to the year

ended December 31, 2019, primarily due to a 6.7% decrease in

average steel selling prices and a 15.9% decrease in shipments.

In the first half of 2020, sales decreased 34.8% to $2.8 billion as

compared to $4.3 billion for the first half of 2019 primarily due to

22.2% lower steel shipments and 15.0% lower average steel

selling prices, while in the second half of 2020, sales decreased

8.6% compared to the second half of 2019 driven by a 9.5%

decrease in shipments offset in part by 1.8% increase in

average steel selling prices.

Operating income

Operating income for the Brazil segment was $3.8 billion for the

year ended December 31, 2021, representing a 389.0%

increase as compared to the year ended December 31, 2020.

Operating income in the first half and the second half of the

2021, increased 539.9% and 307.1%, respectively, as compared

to the first half and the second half of 2020, primarily due to a

positive price-cost effect and higher steel shipments. Operating

income in the second half of 2021 also included the impact of

$123 million related to expected costs for the decommissioning

of the dam at the Serra Azul mine in Brazil.

Operating income for the Brazil segment was $777 million for

the year ended December 31, 2020, representing a 8.9%

decrease as compared to the year ended December 31, 2019.

In the first half of 2020 operating income decreased 42.8%

primarily driven by lower steel shipments offset in part by lower

costs, while operating income for the second half of 2020

increased 33.9% as compared to the second half of 2019,

primarily due to a positive price-cost effect. Operating income

for the first and second halves of 2020 was also negatively

impacted by foreign exchange translation impact due to the

significant depreciation of Brazilian Real for the year ended

December 31, 2020.

Europe

Performance for the year

ended December 31,

(in millions of USD unless

otherwise shown)

2021

2020

2019

Sales

43,334

28,071

37,721

Depreciation

(1,252)

(1,418)

(1,261)

Net impairment reversal

(charges)

218

(527)

(525)

Operating income (loss)

5,672

(1,439)

(1,101)

Crude steel production

(thousand tonnes)

36,795

34,004

43,913

Flat product shipments

23,485

23,907

31,523

Long product shipments

9,236

8,550

10,360

Others and eliminations

461

416

469

Total steel shipments

(thousand tonnes)

33,182

32,873

42,352

Average steel selling price

(USD/tonne)

986

655

696

Management report

156

Crude steel production, steel shipments and average steel

selling price

Crude steel production for the Europe segment increased 8.2%

to 36.8 million tonnes for the year ended December 31, 2021 as

compared to 34.0 million tonnes for the year ended December

31, 2020, as demand and activity levels improved, including

automotive, industrial production and manufacturing activity.

Crude steel production increased 12.3% to 19.1 million tonnes

in the first half of 2021 from 17.0 million tonnes in the first half of

2020 (impacted by the COVID-19 pandemic), including the

restart of BF#B in Ghent, Belgium in March following a planned

major reline. Crude steel production increased 4.1% to 17.7

million tonnes in the second half of 2021 from 17.0 million

tonnes in the second half of 2020 mainly due to the factors

discussed above. Operations relating to ArcelorMittal Italia were

included until April 14, 2021 and then accounted for under the

equity method following the formation of a public-private

partnership between Invitalia and ArcelorMittal (renamed

Acciaierie d'Italia). As a result, excluding the impact of the

Acciaierie d'Italia deconsolidation as discussed above, steel

production increased by 17.9% in the first half of 2021 and

15.1% in the second half of 2021 compared to the previous

year.

Crude steel production for the Europe segment decreased

22.6% to 34.0 million tonnes for the year ended December 31,

2020 as compared to 43.9 million tonnes for the year ended

December 31, 2019. Adjusting for the impact of the sale of

remedy assets related to the acquisition of ArcelorMittal Italia in

2019, production decreased 18.6%. In the first half of 2020,

crude steel production decreased 30.5% to 17.0 million tonnes

from 24.5 million tonnes in the first half of 2019, primarily driven

by weak demand caused by the COVID-19 pandemic and

lockdown measures in response to the COVID-19 pandemic and

the impact of the sale of remedy assets mentioned above. In

particular, the Company announced measures on March 19,

2020 to reduce production and the temporary idling of steel

making and finishing assets, including operations in Italy,

France, Spain, Germany, Belgium and Poland which continued

in the second quarter of 2020. In the second half of 2020, crude

steel production decreased 12.6% to 17.0 million tonnes from

19.5 million tonnes in the second half of 2019, in line with the

improved activity levels described above. Despite the sequential

improvement, steel demand remained well below pre-crisis

levels. Although the Company had restarted capacity in the

second half of 2020, some steel-making capacity during the last

quarter of 2020 remained idled, including a blast furnace at

Ghent, Belgium that restarted on March 1, 2021 following a

major reline. In addition, in the second half of 2019, the

Company had implemented production cuts announced in May

2019 for approximately 4.2 million tonnes of annualized

production to bring supply in line with addressable demand.

Steel shipments were 33.2 million tonnes for the year ended

December 31, 2021, a marginal 0.9% increase from steel

shipments of 32.9 million for the year ended December 31,

2020. Excluding the impact of Acciaierie d'Italia, shipments

increased 8.9% as compared to 2020. Steel shipments

increased 7.4% to 17.3 million tonnes in the first half of 2021,

from 16.1 million tonnes in the first half of 2020 (impacted by the

COVID-19 pandemic), due to higher flat and long steel

shipments, as demand and activity levels improved. Steel

shipments decreased 5.3% in the second half of 2021 compared

to the second half of 2020, primarily due to the lower shipments

related to the deconsolidation of ArcelorMittal Italia (on a

comparable basis, steel shipments in the second half of 2021

were 6.3% higher than in the second half of 2020).

Steel shipments were 32.9 million tonnes for the year ended

December 31, 2020, a 22.4% decrease from 42.4 million steel

shipments for the year ended December 31, 2019. On a

comparable basis, adjusting for the exit of the remedy asset

sales related to the acquisition of ArcelorMittal Italia in June

2019, shipments decreased 18.6%. Steel shipments decreased

31.0% to 16.1 million tonnes in the first half of 2020, from 23.4

million tonnes in the first half of 2019, including the lower

shipments related to the sale of remedy assets for the

ArcelorMittal Italia acquisition on June 30, 2019, primarily driven

by lower industrial activity and steel demand due to the

pandemic impact. Steel shipments in Europe started to decline

in the latter part of March and early in the second quarter of

2020 due to the pandemic containment measures implemented.

Steel shipments decreased 11.8% in the second half of 2020

compared to the second half of 2019, primarily due to the

impacts of the COVID-19 pandemic.

Average steel selling prices increased 50.6% for the year ended

December 31, 2021 as compared to the year ended December

31, 2020 in line with the higher market prices. Average steel

selling prices increased 38.0% during the first half of 2021 as

compared to the first half of 2020 and increased 63.8% during

the second half of 2021 as compared to the second half of 2020.

Average steel selling prices decreased 5.8% for the year ended

December 31, 2020 as compared to the year ended December

31, 2019 in line with the lower market prices. Average steel

selling prices decreased 11.2% during the first half of 2020 as

compared to the first half of 2019 and marginally increased

0.4% during the second half of 2020 as compared to the second

half of 2019, reflecting improved international prices particularly

in the fourth quarter of 2020 and including the impact of

appreciation of the euro against the U.S. dollar in the second

half of 2020.

157

Management report

Sales

Sales in the Europe segment were $43.3 billion for the year

ended December 31, 2021, representing a 54.4% increase as

compared to sales of $28.1 billion for the year ended December

31, 2020, primarily due to a 50.6% increase in average steel

selling prices and a 0.9% increase in steel shipments. Sales

increased by 48.9% and 59.5% in the first and second half of

2021, respectively, as compared to the first and second half of

2020.

Sales in the Europe segment were $28.1 billion for the year

ended December 31, 2020, representing a 25.6% decrease as

compared to sales of $37.7 billion for the year ended December

31, 2019, primarily due to a 5.8% decrease in average steel

selling prices and a 22.4% decrease in steel shipments. Sales

decreased by 35.6% and 13.2% in the first and second half of

2020 as compared to the first and second half of 2019,

respectively.

Operating income (loss)

Operating income for the Europe segment for the year ended

December 31, 2021 was $5.7 billion as compared to operating

loss of $1.4 billion for the year ended December 31, 2020.

Operating income was significantly higher in 2021 mainly due to

significant positive price cost effect offset in part by higher

energy prices and a $55 million provision related to early

retirement scheme in Spain in the fourth quarter of 2021.

Operating income for the year ended December 31, 2021 also

included a $218 million impairment reversal relating to the

Sestao facility in Spain as a result of improved cash flow

projections in the context of the Company's decarbonization

plans in Spain following the restart of operations in 2021.

Operating income was $1.9 billion for the first half of 2021 as

compared to operating loss of $654 million for the fist half of

2020, primarily due to higher steel shipments and a positive

price-cost effect. Operating income was significantly higher at

$3.8 billion for the second half of 2021 as compared to operating

loss of $785 million for the second half of 2020 due to a positive

price-cost effect and the above-mentioned Sestao impairment

reversal, offset in part by lower steel shipments (due to

deconsolidation of ArcelorMittal Italia) and higher energy prices

in the fourth quarter of 2021. Operating loss in the first half of

2020 included an impairment charge of $0.1 billion related to the

coke plant in Florange, France, which was closed at the end of

April 2020 and inventory related charges of $191 million due to

a weaker steel pricing outlook driven by the pandemic impacts.

Operating loss in the second half of 2020, included impairment

charges of $331 million related to the plate assets classified as

held for sale, $104 million related to the closure of the blast

furnace and the steel plant in Krakow (Poland) as well as $146

million related to its site restoration and termination charges.

Operating loss for the Europe segment was $1.4 billion for the

year ended December 31, 2020 as compared to $1.1 billion for

the year ended December 31, 2019. The operating loss was

impacted by lower steel shipments and average steel selling

prices driving a negative price-cost effect, partly offset by fixed

cost reduction and improved performance at ArcelorMittal Italia.

ACIS

Performance for the year

ended December 31,

(in millions of USD unless

otherwise shown)

2021

2020

2019

Sales

9,854

5,737

6,997

Depreciation

(450)

(492)

(499)

Impairment

—

(102)

Operating income

2,705

209

Crude steel production

(thousand tonnes)

11,366

10,171

12,998

Flat product shipments

7,883

7,685

7,425

Long product shipments

2,473

2,190

4,112

Others and eliminations

Steel shipments (thousand

tonnes)

10,360

9,881

11,547

Average steel selling price

(USD/tonne)

780

464

517

Crude steel production, steel shipments and average steel

selling price

Crude steel production for the ACIS segment increased 11.7%

to 11.4 million tonnes for the year ended December 31, 2021

from 10.2 million tonnes for the year ended December 31, 2020.

In the first half of 2021, crude steel production increased 14.2%

to 5.7 million tonnes from 5.0 million tonnes in the first half of

2020, primarily due to improved production performance in

Kazakhstan and South Africa. Crude steel production for the first

half of 2020, was negatively impacted by weak demand caused

by the pandemic effects in all regions, in particular due to the

lockdown measures in South Africa. In the second half of 2021,

crude steel production increased 9.4% to 5.7 million tonnes from

5.2 million tonnes in the second half of 2020, primarily due to

increased production in Ukraine and South Africa. Crude steel

production was lower in the fourth quarter of 2021 as compared

to the third quarter of 2021 due to planned and unplanned

maintenance in Ukraine and South Africa.

Management report

158

Crude steel production for the ACIS segment decreased 21.7%

to 10.2 million tonnes for the year ended December 31, 2020

from 13.0 million tonnes for the year ended December 31, 2019.

In the first half of 2020, crude steel production decreased 24.7%

to 5.0 million tonnes from 6.6 million tonnes in the first half of

2019, primarily due to weak demand caused by the pandemic

effects in all regions, in particular due to the lockdown measures

in South Africa as well as the impact of the permanent closure of

the Saldanha facility in South Africa. During the second quarter

of 2020, ArcelorMittal South Africa took several steps, including

significant production cuts across all operations, to support the

country's lockdown measures. The economic activity levels

remained weak and having reassessed its strategic asset

footprint for 2020, the Company decided to idle blast furnace C

at Vanderbijlpark, and the Vereeniging electric arc furnace until

demand recovered. With the improvement in demand, the

Vereeniging electric arc furnace continued to operate in 2020

and blast furnace C was restarted in December 2020.

In the second half of 2020, crude steel production decreased

18.8% to 5.2 million tonnes from 6.4 million tonnes in the

second half of 2019, primarily due to the impact of COVID-19 on

the demand which remained well below pre-crisis levels, and the

impact of the permanent closure of the Saldanha facility.

Steel shipments for the year ended December 31, 2021

increased by 4.8% to 10.4 million tonnes as compared to 9.9

million tonnes for the year ended December 31, 2020, primarily

due to improved demand.

Steel shipments for the year ended December 31, 2020

decreased by 14.4% to 9.9 million tonnes as compared to 11.5

million tonnes for the year ended December 31, 2019 mainly

due to the COVID-19 pandemic impact in South Africa as well

as the impact of permanent closure of the Saldanha facility,

partially offset by improved shipments in Kazakhstan.

Average steel selling prices increased 68.2% for the year ended

December 31, 2021 as compared to the year ended December

31, 2020 in line with the higher market prices. Average steel

selling prices increased 65.3% and 71.7% in the first and

second half of 2021 as compared to the first and second half in

2020, respectively. Steel selling prices decreased however 6.3%

in the fourth quarter of 2021 as compared to the third quarter of

2021.

Average steel selling prices decreased 10.2% for the year

ended December 31, 2020 as compared to the year ended

December 31, 2019 in line with lower market prices. Average

steel selling prices decreased 18.0% and 1.4% in the first and

second half of 2020, respectively compared to the same periods

in 2019.

Sales

Sales in the ACIS segment were $9.9 billion for the year ended

December 31, 2021, representing a 71.8% increase as

compared to the year ended December 31, 2020, primarily due

to a 68.2% increase in average steel selling prices and to a

lower extent a 4.8% increase in steel shipments.

Sales in the ACIS segment were $5.7 billion for the year ended

December 31, 2020, representing an 18.0% decrease as

compared to the year ended December 31, 2019, primarily due

to a 10.2% decrease in average steel selling prices and a 14.4%

decrease in steel shipments.

Operating income

Operating income for the ACIS segment was $2.7 billion for the

year ended December 31, 2021 as compared to $209 million for

the year ended December 31, 2020 due to a positive price cost-

effect and higher steel shipment volumes offset in part by higher

energy prices.

Operating income for the ACIS segment was $209 million for the

year ended December 31, 2020 as compared to $31 million for

the year ended December 31, 2019. Operating income for the

year ended December 31, 2019 was negatively impacted by

impairment charges ($0.1 billion related to ArcelorMittal South

Africa (of which $75 million related to the fixed assets of the

Newcastle facility as a result of lower domestic volume forecasts

and $20 million related to the closure of the Saldanha facility)

and $0.1 billion of closure and retrenchment costs related to the

Saldanha facility in relation to the announced Section 189

process). Operating income for the year ended December 31,

2020 was positively impacted by lower costs including the

benefit from currency depreciation on local currency

denominated costs which partially offset the impact of lower

shipments and selling prices.

Mining

Performance for the year

ended December 31,

(in millions of USD unless

otherwise shown)

2021

2020

2019

Sales

4,045

2,785

2,664

Depreciation

(228)

(243)

(237)

Operating income

2,371

1,247

1,026

Iron ore production

(million tonnes)

26.2

28.3

Iron ore shipments (million

tonnes)

26.0

28.4

28.8

159

Management report

Note

For the year

ended December

31,

Iron ore

production

(million metric

tonnes)

Type

Product

2021

2020

2019

AMMC

Open pit

Concentrate,

lump, fines

and pellets

22.0

23.2

23.9

ArcelorMittal

Liberia Ltd

Open pit /

Underground

Fines

4.2

5.1

4.4

Total iron ore

production

26.2

28.3

1.Total of all finished production of fines, concentrate, pellets and lumps.

Production

The Mining segment had iron ore production of 26.2 million

tonnes for the year ended December 31, 2021, a 7.5% decrease

compared to the year ended December 31, 2020. Iron ore

production decreased 9.9% for the first half of 2021 compared to

the first half of 2020 primarily due to the impact of a four week

labor strike action (and subsequent ramp up to full operations)

and production impacts in Liberia following a rail accident in the

second quarter of 2021. Iron ore production decreased 5.9% in

the second half of 2021 compared to the second half of 2020

primarily due to the continuing impact of a rail accident as

discussed above and heavy seasonal monsoon rains in the third

quarter of 2021 in Liberia.

The Mining segment iron ore production of 28.3 million tonnes

for the year ended December 31, 2020 remained stable as

compared to the year ended December 31, 2019. Iron ore

production decreased 9.2% for the first half of 2020 compared to

the first half of 2019 primarily due to the lower production in

AMMC. The direct impact of the COVID-19 pandemic on the

mining operations was minimal with some initial impact at

AMMC during the early part of the second quarter of 2020. The

operations in AMMC resumed normal activity in early May 2020.

Iron ore production increased 10.5% for the second half of 2020

compared to the second half of 2019 primarily due to higher

production at AMMC. Iron ore production in 2019 had been

impacted by an electrical failure at AMMC in the third quarter of

2019 which led to a temporary stoppage of the concentrator

followed by a slow ramp-up in the fourth quarter of 2019.

Sales

Sales in the Mining segment were $4.0 billion for the year ended

December 31, 2021, representing a 45.2% increase as

compared to the year ended December 31, 2020. Sales in the

first half of 2021 were 82.8% higher at $2.1 billion compared to

the same period in 2020 primarily due to higher seaborne iron

ore reference prices and higher quality premia offset in part by

decreased shipment volumes due to lower production. Sales in

the second half of 2021 were 19.6% higher at $2.0 billion

compared to the same period in 2020 primarily driven by higher

seaborne iron ore reference prices and quality premia offset in

part by lower shipments volumes. Iron ore shipments were 26.0

million tonnes for the year ended December 31, 2021,

representing a 8.4% decrease as compared to 28.4 million

tonnes for the year ended December 31, 2020 mainly due to

lower production as described above.

Sales in the Mining segment were $2.8 billion for the year ended

December 31, 2020, representing an 4.6% increase as

compared to the year ended December 31, 2019. Sales in the

first half of 2020 were 23.7% lower at $1.1 billion compared to

the same period in 2019 and in the second half of 2020 they

were 40.0% higher at $1.7 billion compared to the same period

in 2019 reflecting higher sales at both AMMC and in Liberia. Iron

ore shipments were 28.4 million tonnes for the year ended

December 31, 2020, representing a 1.2% decrease as

compared to 28.8 million tonnes for the year ended December

31, 2019 mainly due to lower production in the first half of 2020

as described above.

Sales to external customers were $1.6 billion for the year ended

December 31, 2021, representing an increase of 38.4% as

compared to the year ended December 31, 2020 due to higher

selling prices partly offset by lower shipments.

Iron ore shipments to external customers were 10.1 million

tonnes for the year ended December 31, 2021, representing a

decrease of 16.5% as compared to 12.1 million tonnes for the

year ended December 31, 2020, primarily driven by lower

production in AMMC and Liberia.

Sales to external customers were $1.2 billion for the year ended

December 31, 2020, representing a 20.8% increase as

compared to the year ended December 31, 2019 mainly due to

higher external shipments and seaborne iron ore reference

prices and lower freight costs. Iron ore shipments to external

customers were 12.1 million tonnes for the year ended

December 31, 2020 as compared to 10.9 million tonnes for the

year ended December 31, 2019, primarily driven by higher

shipments in AMMC.

The average reference iron ore price was $159.9 per tonne in

2021, $109.0 per tonne in 2020 and $93.6 per tonne in 2019

(delivered to China, normalized to Qingdao and 62% Fe US $

per tonne, Metal Bulletin). However, there may not be a direct

correlation between reference prices and actual selling prices in

various regions at a given time. See also quarterly reference

prices in "Raw materials" above.

Operating income

Operating income for the Mining segment was $2.4 billion for

the year ended December 31, 2021 as compared to $1.2 billion

for the year ended December 31, 2020, primarily driven by the

Management report

160

increase in iron ore reference prices. Operating income

increased to $1.3 billion in the first half of 2021 compared to

$0.4 billion in the first half of 2020, primarily due to higher

seaborne iron ore reference prices and higher quality premia,

offset in part by lower iron ore shipments and higher freight

costs. Operating income increased to $1.1 billion in the second

half of 2021 as compared to $0.8 billion in the second half of

2020. Operating income was significantly higher in the third

quarter of 2021 as compared to the third quarter of 2020,

primarily due to higher iron ore reference prices. Operating

income was lower in the fourth quarter of 2021 as compared to

fourth quarter of 2020 and the third quarter of 2021, primarily

due to lower iron ore reference prices (17.1% and 32.3%,

respectively) while shipments were marginally higher as

compared to the third quarter of 2021 but lower as compared to

the fourth quarter of 2020.

Operating income for the Mining segment was $1.2 billion for

the year ended December 31, 2020 as compared to $1.0 billion

for the year ended December 31, 2019, primarily driven by the

increase in iron ore reference prices. Operating income was

$0.4 billion and $0.8 billion in the first and second half of 2020,

respectively, as operating performance improved in the second

half due to improved shipments and higher reference prices.

Income or loss from investments in associates, joint ventures

and other investments

Income from investments in associates, joint ventures and other

investments was $2.2 billion for the year ended December 31,

2021, compared to $234 million for the year ended December

31, 2020. Income in 2021 was significantly higher due to the

improved contribution from Calvert reflecting improved market

prices, higher hot strip mill production1 (18.9% increase from 4.0

million tonnes in 2020 to 4.8 million tonnes in 2021) and higher

shipments2 (16.3% increase from 3.9 million tonnes in 2020 to

4.5 million tonnes in 2021). In addition, despite the onset of

further lockdowns related to the second wave of COVID-19

pandemic negatively impacting domestic demand, AMNS India

was able to maintain robust production levels (11.7% increase

from 6.6 million tonnes in 2020 to 7.4 million tonnes in 2021)

and utilize its coastal location to divert tonnes to the export

market (shipments increased by 10.6% from 6.3 million tonnes

in 2020 to 6.9 million tonnes in 2021). Income in 2021 was also

significantly higher due to the improved contribution of European

investees as well as the annual dividend received from Erdemir

of $89 million. Income from investments in associates, joint

ventures and other investments in 2020 included positive

contributions from AMNS India offset in part by the negative

impact of the COVID-19 pandemic on investees including a

$211 million impairment of the Company's investment in DHS

(Germany).

1.Production: all production of the hot strip mill including processing of slabs on a hire work

basis for ArcelorMittal group entities and third parties, including stainless steel slabs.

2.Shipments: all shipments including shipments of finished products processed on a hire work

basis for ArcelorMittal group entities and third parties, including stainless steel products.

ArcelorMittal recorded income of $234 million from investments

in associates, joint ventures and other investments for the year

ended December 31, 2020, as compared to $347 million for the

year ended December 31, 2019 and included a positive

contribution from AMNS India offset in part by the negative

impact of the COVID-19 pandemic on other investees including

a $211 million impairment of the Company's investment in DHS

(Germany) following the revised future cash flow expectations.

AMNS India performed strongly in 2020 with crude steel

production of 6.5 million tonnes and V-shaped demand recovery

post COVID-19 lockdowns (with the second quarter and

particularly April impacted by lockdown measures). The annual

dividend income from Erdemir was lower at $12 million as

compared to $93 million in 2019.

Financing costs-net

Financing costs-net include net interest expense, revaluation of

financial instruments, net foreign exchange income/expense

(i.e., the net effects of transactions in a foreign currency other

than the functional currency of a subsidiary) and other net

financing costs (which mainly include bank fees, accretion of

defined benefit obligations and other long-term liabilities).

Net financing costs were lower at $1.2 billion for the year ended

December 31, 2021 as compared to $1.3 billion for the year

ended December 31, 2020. Net interest expense (interest

expense less interest income) was lower at $278 million for the

year ended December 31, 2021 as compared to $421 million for

the year ended December 31, 2020, following debt repayments

and liability management.

Foreign exchange losses were 155 million as compared to

foreign exchange gains of $107 million for the years ended

December 31, 2021 and 2020, respectively.

Other net financing costs (including expenses related to true

sale of receivables, bank fees, interest on pensions and fair

value adjustments of the call option of the mandatorily

convertible bond and derivative instruments) were $0.7 billion

for the year ended December 31, 2021 compared to $0.9 billion

for the year ended December 31, 2020, and included mark-to-

market losses related to the mandatory convertible bond call

option totaling $44 million as compared to $68 million for the

year ended December 31, 2020. Other net financing costs for

2021 also included $130 million early bond redemption

premiums and fees as compared to $120 million in 2020, $163

million of charges relating to unfavorable court decision in an

arbitration case over the price formula stated in the supply

agreement with the associate Sitrel and $61 million of charges

in connection with the early redemption of $395 million in

aggregate principal amount of MCNs. Pension expenses are

161

Management report

lower in 2021 by $0.2 billion as compared with 2020 following

the disposal of ArcelorMittal USA.

Net financing costs were lower at $1.3 billion for the year ended

December 31, 2020 as compared to $1.7 billion for the year

ended December 31, 2019. Net interest expense (interest

expense less interest income) was lower at $421 million for the

year ended December 31, 2020 as compared to $607 million for

the year ended December 31, 2019, following debt repayments

and liability management transactions.

Foreign exchange gains were $107 million and $4 million for the

years ended December 31, 2020 and 2019, respectively.

Other net financing costs (including expenses related to true

sale of receivables, bank fees, interest on pensions and fair

value adjustments of the call option of the mandatorily

convertible bond and derivative instruments) were $0.9 billion

for the year ended December 31, 2020 compared to $1.0 billion

for the year ended December 31, 2019, and included mark-to-

market losses related to the mandatory convertible bond call

option totaling $68 million as compared to $356 million for the

year ended December 31, 2019. Other net financing costs for

2020 also include $178 million expenses related to the

extension of the mandatory convertible bond and early bond

redemption premium expenses of $120 million.

Income tax expense (benefit)

ArcelorMittal recorded an income tax expense of $2.5 billion for

the year ended December 31, 2021 as compared to $1.7 billion

for the year ended December 31, 2020. The $493 million

deferred tax benefit in 2021 mainly included recognition of

deferred tax assets in Luxembourg following increase in the

future taxable income expectation on unrealized gains on

emission rights and energy derivative instruments. The deferred

tax expense in 2020 mainly included derecognition of deferred

tax assets recorded in Luxembourg following the sale of

ArcelorMittal USA ($624 million), due to anticipated lower intra-

group income from ArcelorMittal USA (primarily lower branding,

R&D fees and interest income).

ArcelorMittal recorded an income tax expense of $1.7 billion for

the year ended December 31, 2020 as compared to $0.5 billion

for the year ended December 31, 2019. The deferred tax

expense in 2020 mainly includes derecognition of deferred tax

assets recorded in Luxembourg following the sale of

ArcelorMittal USA ($624 million), due to anticipated lower intra-

group income from ArcelorMittal USA (primarily lower branding,

R&D fees and interest income).

ArcelorMittal’s consolidated income tax expense (benefit) is

affected by the income tax laws and regulations in effect in the

various countries in which it operates and the pre-tax results of

its subsidiaries in each of these countries, which can change

from year to year. ArcelorMittal operates in jurisdictions, mainly

in Eastern Europe and Asia, which have a structurally lower

corporate income tax rate than the statutory tax rate as enacted

in Luxembourg (24.94%), as well as in jurisdictions, mainly in

Brazil and Mexico, which have a structurally higher corporate

income tax rate.

Management report

162

The statutory income tax expense (benefit) and the statutory income tax rates of the countries that most significantly resulted in the tax

expense (benefit) at statutory rate for each of the years ended December 31, 2021, 2020 and 2019 are as set forth below:

2021

2020

2019

Statutory

income tax

Statutory

income tax rate

Statutory

income tax

Statutory

income tax rate

Statutory

income tax

Statutory

income tax rate

Argentina

103

35.00%

25.00%

Belgium

149

25.00%

(60)

25.00%

(37)

25.00%

Brazil

943

34.00%

Canada

835

25.90%

274

25.90%

234

25.90%

France

231

25.82%

(158)

25.82%

(164)

25.82%

Germany

134

30.30%

(181)

30.30%

(124)

30.30%

Italy

(8)

24.00%

(145)

24.00%

(254)

24.00%

Kazakhstan

149

20.00%

(15)

20.00%

Liberia

25.00%

Luxembourg

660

24.94%

327

24.94%

407

24.94%

Mexico

238

30.00%

(84)

30.00%

(105)

30.00%

Poland

155

19.00%

(54)

19.00%

(27)

19.00%

South Africa

136

28.00%

(35)

28.00%

(92)

28.00%

Spain

25.00%

(87)

25.00%

(73)

25.00%

Ukraine

202

18.00%

(1)

18.00%

(21)

18.00%

United States

21.00%

209

21.00%

(382)

21.00%

Others

—

Total

4,146

136

(468)

Note: The statutory tax rates are the (future) rates enacted or substantively enacted by the end of the respective period.

Non-controlling interests

Net income attributable to non-controlling interests was $609

million for the year ended December 31, 2021 as compared to

$155 million for the year ended December 31, 2020. Net income

attributable to non-controlling interests increased in 2021

primarily as a result of the improved operating performance.

Net income attributable to non-controlling interests was $155

million for the year ended December 31, 2020 as compared to

$63 million for the year ended December 31, 2019. Net income

attributable to non-controlling interests increased in 2020

primarily as a result of the improved operating performance of

ArcelorMittal South Africa.

Net income attributable to equity holders of the parent

ArcelorMittal’s net income attributable to equity holders of the

parent was $15.0 billion for the year ended December 31, 2021,

compared to net loss of $0.7 billion in 2020. The net loss

attributable to equity holders of the parent was $2.5 billion for

the year ended December 31, 2019.

Liquidity and capital resources

ArcelorMittal’s principal sources of liquidity are cash generated

from its operations and its credit facilities at the corporate level.

Because ArcelorMittal is a holding company, it is dependent

upon the earnings and cash flows of, as well as dividends and

distributions from, its operating subsidiaries to pay expenses

and meet its debt service obligations. Cash and cash

equivalents are primarily centralized at the parent level and are

managed by ArcelorMittal Treasury SNC, although from time to

time cash or cash equivalent balances may be held at the

Company’s international subsidiaries or its holding companies.

Some of these operating subsidiaries have debt outstanding or

are subject to acquisition agreements that impose restrictions on

such operating subsidiaries’ ability to pay dividends, but such

restrictions are not significant in the context of ArcelorMittal’s

overall liquidity. Repatriation of funds from operating

subsidiaries may also be affected by tax and foreign exchange

policies in place from time to time in the various countries where

the Company operates, though none of these policies is

currently significant in the context of ArcelorMittal’s overall

liquidity.

In management’s opinion, ArcelorMittal’s credit facilities are

adequate for its present requirements.

163

Management report

As of December 31, 2021, ArcelorMittal’s cash and cash

equivalents, restricted cash and other restricted funds amounted

to $4.4 billion (including restricted cash and other restricted

funds of $156 million, of which $89 million relating to various

environmental obligations, true sales of receivables programs

and letter of credits issued in ArcelorMittal South Africa) as

compared to $6.0 billion (including restricted cash and other

restricted funds of $363 million, of which $56 million relating to

various environmental obligations and true sales of receivables

programs in ArcelorMittal South Africa and $260 million with

respect to a cash collateral provided by the Company until

collection of TSR receivables retained in ArcelorMittal USA after

disposal) as of December 31, 2020. In addition, ArcelorMittal

had available borrowing capacity of $5.5 billion under its $5.5

billion revolving credit facility as of December 31, 2021 and

2020. For information on the currencies of cash and cash

equivalents, restricted cash and other restricted funds, see

note 6.1.4 to the consolidated financial statements.

As of December 31, 2021, ArcelorMittal’s total debt, which

includes long-term debt and short-term debt was $8.4 billion,

compared to $12.3 billion as of December 31, 2020.

Net debt (defined as long-term debt ($6.5 billion) plus short-term

debt ($1.9 billion), less cash and cash equivalents, restricted

cash and other restricted funds ($4.4 billion) was $4.0 billion as

of December 31, 2021, down from $6.4 billion at December 31,

2020, comprised of long-term debt ($9.8 billion) plus short-term

debt ($2.5 billion), less cash and cash equivalents, restricted

cash and other restricted funds ($6.0 billion). Most of the

external debt is borrowed by the parent company on an

unsecured basis and bears interest at varying levels based on a

combination of fixed and variable interest rates. Gearing

(defined as net debt divided by total equity) at December 31,

2021 and 2020 was 8% and 16% respectively.

The margin applicable to ArcelorMittal’s principal credit facilities

($5.5 billion revolving credit facility and certain other credit

facilities) and the coupons on certain of its outstanding bonds

are subject to adjustment in the event of a change in its long-

term credit ratings. ArcelorMittal's long-term credit rating was

upgraded on August 9, 2021 by Moody's to 'Baa3' with stable

outlook and on September 23, 2021 by Fitch to 'BBB-' with

stable outlook. In February 2021, Standard & Poor's revised

ArcelorMittal's outlook to stable and affirmed a long-term credit

rating of 'BBB-' as described in the Risk Factors above. See

"Introduction—Risk factors—Risks related to ArcelorMittal's

financial position and organizational structure—"ArcelorMittal's

indebtedness could have an adverse impact on its results of

operations and financial position, and the market's perception of

ArcelorMittal's leverage may affect its share price."

ArcelorMittal's $5.5 billion revolving credit facility (see "Principal

credit facilities" below) contains restrictive covenants, which

among other things, limit encumbrances on the assets of

ArcelorMittal and its subsidiaries, the ability of ArcelorMittal’s

subsidiaries to incur debt and the ability of ArcelorMittal and its

subsidiaries to dispose of assets in certain circumstances. The

agreement also previously required compliance with a financial

covenant, as summarized below.

Prior to the amendment described below and the change in the

Company's long-term credit ratings described above, the

Company was required to ensure that the ratio of “Consolidated

Total Net Borrowings” (consolidated total borrowings less

consolidated cash and cash equivalents) to “Consolidated

EBITDA” (the consolidated net pre-taxation profits of the

ArcelorMittal group for a Measurement Period, subject to certain

adjustments as set out in the facility) did not, at the end of each

“Measurement Period” (each period of 12 months ending on the

last day of a financial half-year or a financial year of the

Company), exceed a certain ratio, referred to by the Company

as the “Leverage ratio”. ArcelorMittal’s principal credit facilities

set this ratio to 4.25 to 1. On April 13, 2021, ArcelorMittal's

revolving credit facility was amended so that the Leverage Ratio

financial covenant would permanently cease to apply in the

event that the Company obtained an investment grade long-

term credit rating (with stable outlook) from two rating agencies

(which was obtained from Moody's and Fitch in 2021, as

described above). On April 27, 2021, the revolving credit facility

was also amended so that the margin payable will be increased

or decreased depending on the Company’s performance against

two metrics measured annually against pre-defined targets with

respect to its environmental and sustainability performance

(CO2 intensity of the Company’s European operations and the

number of facilities which have been certified by

ResponsibleSteel™). The Facility may be used for general

corporate purposes and was fully available as of December 31,

2021.

Non-compliance with the covenants in the Company’s borrowing

agreements would have entitled the lenders under such facilities

to accelerate the Company’s repayment obligations. The

Company was in compliance with the financial covenants in the

agreements related to all of its borrowings as of December 31,

2021.

As of December 31, 2021, ArcelorMittal had guaranteed $89

million of debt of its operating subsidiaries compared to $140

million as of December 31, 2020. See also note 9.4 to the

consolidated financial statements for a description of

guarantees by ArcelorMittal for joint ventures indebtedness of

$4.3 billion as of December 31, 2021 including $3.1 billion

issued on behalf of AMNS India, $279 million issued on behalf of

Calvert, $323 in relation to outstanding lease liabilities for

vessels operated by Global Chartering and $175 million on

behalf of Al Jubail. ArcelorMittal’s debt facilities have provisions

Management report

164

whereby the acceleration of the debt of another borrower within

the ArcelorMittal group could, under certain circumstances, lead

to acceleration under such facilities.

In particular, with respect to joint ventures, on March 16, 2020,

the parent company of AMNS India entered into a $5.1 billion

ten-year term loan agreement with Japan Bank for International

Cooperation, MUFG Bank LTD., Sumitomo Mitsui Banking

Corporation, Mizuho Bank Europe N.V., and Sumitomo Mitsui

Trust Bank, Limited (London Branch). The proceeds of the loan

were used to refinance in full the amounts borrowed by it in

connection with the acquisition of AMNS India, including the

amounts borrowed under the $7 billion bridge term facilities

agreement guaranteed by ArcelorMittal. The obligations under

the term loan agreement are guaranteed by ArcelorMittal and

NSC in proportion to their interests in the joint venture, 60% and

40%. The guarantee provided by ArcelorMittal included the

same “Leverage Ratio” financial covenant as that described

above for its $5.5 billion revolving credit facility dated December

19, 2018. On April 28, 2021, the syndicate of Japanese banks

agreed that the Leverage Ratio financial covenant would fall

away in the event that the Company obtains an investment

grade long-term credit rating (with a stable outlook) from two

rating agencies (which occurred in 2021, as described above).

The following table summarizes the repayment schedule of

ArcelorMittal’s outstanding indebtedness, which includes short-

term and long-term debt, as of December 31, 2021.

Repayment amounts per year (in billions of $)

Type of indebtedness as of December 31, 2021

2022

2023

2024

2025

2026

>2026

Total

Bonds

0.6

1.3

0.9

1.0

0.4

1.6

5.8

Commercial paper

0.5

—

0.5

Lease liabilities and other loans

0.8

0.3

0.2

0.1

0.5

2.1

Total gross debt

1.9

1.6

1.1

1.2

0.5

2.1

8.4

As of December 31, 2021, the $5.5 billion revolving credit facility

was fully available.

The average debt maturity of the Company was 5.8 years as of

December 31, 2021, as compared to 5.2 years as of December

31, 2020.

Further information regarding ArcelorMittal’s outstanding short-

term and long-term indebtedness as of December 31, 2021,

including the breakdown between fixed rate and variable rate

debt, is set forth in note 6 to the consolidated financial

statements. Further information regarding ArcelorMittal’s use of

financial instruments for hedging purposes is set forth in note 6

to the consolidated financial statements.

Financings

ArcelorMittal’s principal credit facilities are described below, for

further information on its existing credit facilities and several

debt financing and repayment transactions completed during

2021, please refer to note 6 to the consolidated financial

statements.

Principal credit facilities

On December 19, 2018, ArcelorMittal signed an agreement for a

$5.5 billion revolving credit facility (the "Facility"). This Facility

replaced the $5.5 billion revolving credit facility dated April 30,

2015, which was amended and extended on December 21,

2016. The agreement incorporates a single tranche of $5.5

billion. On November 27, 2019 and on November 26, 2020,

ArcelorMittal exercised the option to extend the facility's maturity

by one year to December 19, 2024 and to December 19, 2025

respectively. The commitments are $5.5 billion until December

19, 2023 and $5.4 billion until December 19, 2025. As of

December 31, 2021, the $5.5 billion revolving credit facility was

fully available.

On September 30, 2010, ArcelorMittal entered into a $500

million revolving multi-currency letter of credit facility (the “Letter

of Credit Facility”). The Letter of Credit Facility is used by the

Company and its subsidiaries for the issuance of letters of credit

and other instruments. The terms of the letters of credit and

other instruments contain certain restrictions as to duration. The

Letter of Credit Facility was amended on October 26, 2012 and

September 30, 2014 to reduce its amount to $450 million and to

$350 million, respectively. On July 31, 2019, the Company

refinanced its Letter of Credit Facility by entering into a $350

million revolving multi-currency letter of credit facility, which

matures on July 31, 2022. On August 5, 2020 the maturity of the

Letter of Credit Facility was extended to July 31, 2023. On

November 25, 2020 the amount of the Letter of Credit Facility

was increased to $395 million. On June 25, 2021 the maturity of

the Letter of Credit Facility was extended to July 31, 2024.

Mandatory convertible bond

Please refer to notes 6.3 and 11.2 to the consolidated financial

statements.

Mandatory convertible notes

On December 23, 2021, ArcelorMittal signed separate, privately

negotiated exchange agreements with a limited number of

holders of the MCNs redeeming $395 million in aggregate

165

Management report

principal amount of MCNs at the minimum conversion ratio for

an aggregate cash consideration of $1,196 million including a

premium of $28 million. Following completion of the

repurchases, $608 million aggregate principal amount of the

MCNs remained outstanding as of December 31, 2021. See

note 11.2 to the consolidated financial statements.

Working capital management

The Company makes drawdowns from and repayments on the

Facility in the framework of its cash management. In addition,

the Company has established a number of programs for sales

without recourse of trade accounts receivable to various

financial institutions (referred to as true sale of receivables

(“TSR”)). As of December 31, 2021, the total amount of trade

accounts receivables sold amounted to $5.2 billion. Through the

TSR programs, certain operating subsidiaries of ArcelorMittal

surrender the control, risks and benefits associated with the

accounts receivable sold; therefore, the amount of receivables

sold is recorded as a sale of financial assets and the balances

are removed from the consolidated statements of financial

position at the moment of sale.

As part of the Company’s ongoing efforts to improve its working

capital position, it continually engages with its customers and

suppliers with the aim of improving overall terms, including

pricing, quality, just in time delivery, discounts and payment

terms. Trade accounts payable have maturities from 15 to 180

days depending on the type of material, the geographic area in

which the purchase transaction occurs and the various

contractual agreements. The Company’s average outstanding

number of trade payable days amounted to 83 over the last 5

years. The ability of suppliers to provide payment terms may be

dependent on their ability to obtain funding for their own working

capital needs and or their ability to early discount their

receivables at their own discretion (the Company estimates that

about $2.7 billion of trade payables were subject to early

discount by its suppliers in 2021 as compared to $2.0 billion in

2020). Given the nature and large diversification of its supplier

base the Company does not expect any material impact to its

own liquidity position as a result of suppliers not having access

to liquidity. As of December 31, 2021, a 5 day reduction in trade

payable days would result in a trade payables decrease by $760

million.

ArcelorMittal's material cash requirements in the near and

medium term

The Company's cash requirements in the near and medium

term are primarily driven by the current commitments,

obligations and other arrangements in place as of December 31,

2021. ArcelorMittal has various purchase commitments for

materials, supplies and capital expenditure incidental to the

ordinary course of business. As of December 31, 2021,

ArcelorMittal had various outstanding obligations mostly related

to:

•Guarantees, pledges and other collateral related to

financial debt and credit lines given on behalf of third

parties and joint ventures,

•Capital expenditure commitments mainly related to

commitments associated with investments in expansion

and improvement projects by various subsidiaries,

•Other commitments comprising mainly commitments

incurred for gas supply to electricity suppliers.

These commitments, obligations and other arrangements will

become due in 2022 and beyond. These various purchase

commitments and long-term obligations will have an effect on

ArcelorMittal’s future liquidity and capital resources. For further

details on commitments and obligations, please refer to note 9.4

to the consolidated financial statements. ArcelorMittal also has

various environmental commitments and asset retirement

obligations as of December 31, 2021. For further details on

environmental commitments and asset retirement obligations,

please refer to note 9.1 to the consolidated financial statements.

The Company expects to service its cash requirements in the

near and medium-term with net cash provided by operating

activities. In the future, the Company may enter into additional

financing facilities if required. For additional information on near

and medium term cash requirements, see "Outlook".

Earnings distribution

ArcelorMittal held 71.9 million shares in treasury as of

December 31, 2021, as compared to 22.1 million shares as of

December 31, 2020. As of December 31, 2021, the number of

shares held by the Company in treasury represented

approximately 7.32% of the Company’s total issued share

capital. On January 14, 2022, ArcelorMittal cancelled 45 million

treasury shares to keep the number of treasury shares within

appropriate levels. Following these cancellations, the aggregate

number of shares issued and fully paid up decreased from

982,809,772 to 937,809,772.

On January 31, 2018, the Company announced that the Board

had agreed on a new dividend policy which was approved by

the shareholders at the annual general meeting of shareholders

in May 2018. Given the Company's then de-leveraging focus,

dividends began at $0.10/share in 2018 (paid from 2017

results). The Company announced that it intended to

progressively increase the base dividend paid to its

shareholders, and, on attainment of the net debt target, return a

percentage of net cash provided by operating activities annually.

The Company paid the base dividend in 2019 (paid from 2018

earnings) of $0.20 per share to the shareholders. On February

4, 2020, given the resilient cash flow and progress towards its

net debt target, the Board proposed a base dividend of $0.30

per share for 2020 (in respect of 2019). However, against the

Management report

166

backdrop of significant cost savings measures being taken

across the business due to the COVID-19 pandemic, the Board

determined during the second quarter of 2020 it both

appropriate and prudent to suspend dividend payments until

such a time as the operating environment normalized.

Following the achievement of the Group’s net debt target, and in

line with its previous statements, the Board of Directors

approved during the first quarter of 2021 a new capital return

policy. See "History and development of the Company—Capital

return policy". According to this policy, the Board recommended

a $0.30/share base dividend, subject to the approval of

shareholders, which was given at the annual general meeting of

shareholders on June 8, 2021. The dividend amounted to $325

million ($312 million net of dividends paid to subsidiaries holding

treasury shares) and was paid on June 15, 2021. After paying

this base dividend, the Company has also implemented share

buyback programs and MCN repurchases as part of its capital

return policy.

In February 2022, the Board of Directors recommended an

increase of the base annual dividend to $0.38/share, from

$0.30/share, to be paid in June 2022, subject to the approval of

shareholders at the annual general meeting of shareholders in

May 2022. In addition, the Company has initiated a new $1

billion share buyback program for the first half of 2022. This is

the maximum based on the current authorization provided by

shareholders at the annual general meeting of shareholders in

June 2021. Additional authorization to repurchase shares will be

sought from shareholders at the 2022 annual general meeting of

shareholders.

Pension/OPEB liabilities

The defined benefit liabilities for employee benefits decreased

by $0.9 billion to $3.8 billion as of December 31, 2021, as

compared to $4.7 billion as of December 31, 2020 mainly as a

result of the decrease in the defined benefit obligation due to

higher discount rates. For additional information with respect to

the Company’s pension plan and OPEB liabilities, including a

breakdown by region and by type of plan, see note 8.2 to the

consolidated financial statements.

Sources and uses of cash

Years ended December 31, 2021, 2020 and 2019

The following table presents a summary of cash flow of

ArcelorMittal:

Summary of cash flow

For the year ended December 31,

(in $ millions)

2021

2020

2019

Net cash provided by operating

activities

9,905

4,082

6,017

Net cash used in investing

activities

(340)

(2,011)

(3,824)

Net cash (used in) provided by

financing activities

(10,898)

(1,498)

514

Net cash provided by operating activities

For the year ended December 31, 2021, net cash provided by

operating activities increased to $9.9 billion due to higher

operating results, as compared with $4.1 billion for the year

ended December 31, 2020. The increase in net cash provided

by operating activities included an operating working capital

investment of $6.4 billion as compared to an operating working

capital release of $1.5 billion in 2020, including an outflow for

inventories of $8.65 billion and an outflow for trade accounts

receivable of $2.54 billion, partially offset by an inflow for trade

accounts payable of $4.78 billion. The investment in operating

working capital was mainly driven by elevated raw material

prices, relatively robust finished steel prices and lower than

anticipated inventory reduction.

For the year ended December 31, 2020, net cash provided by

operating activities decreased to $4.1 billion, as compared with

$6.0 billion for the year ended December 31, 2019. The

decrease in net cash provided by operating activities was mainly

due to an operating working capital release of $1.5 billion as

compared to an operating working capital release of $2.2 billion

in 2019, including an inflow for inventories of $1.79 billion, an

outflow for trade accounts receivable of $0.08 billion, partially

offset by an outflow for trade accounts payable of $0.21 billion.

The operating working capital release in 2020 was driven by a

significant reduction of inventories and improved receivable

rotation days including lower overdue receivables. The

operating working capital release of $2.2 billion in 2019 reflected

an inflow for inventories of $2.47 billion, an inflow for trade

accounts receivable of $0.96 billion, partially offset by an outflow

of trade accounts payables of $1.24 billion.

Net cash used in investing activities

Net cash used in investing activities was $0.3 billion for the year

ended December 31, 2021 as compared to $2.0 billion for the

year ended December 31, 2020. Capital expenditures were $3.0

billion for the year ended December 31, 2021 as compared to

$2.4 billion for the year ended December 31, 2020. Capital

expenditures for the year ended December 31, 2021 were

167

Management report

marginally above the initial guidance of $2.8 billion but slightly

below the revised guidance of $3.2 billion provided after the

third quarter of 2021.The Company intends to continue to spend

on strategic projects designed to enhance future returns through

investment in selective brownfield growth and product mix

improvement projects, in Mexico and Brazil, Liberia as well as

ongoing decarbonization capital expenditures to meet its 2050

zero emissions target. Accordingly, the Company expects 2022

capital expenditures to increase to $4.5 billion (including the

rollover of $0.2 billion that was not spent in 2021). See

“Properties and capital expenditures—Capital expenditures” and

"Outlook" below.

ArcelorMittal’s major capital expenditures in 2021 included the

following projects: ArcelorMittal Mexico new hot strip mill, the hot

strip mill modernization in ArcelorMittal Dofasco, new pellet plant

in ArcelorMittal Kryvyi Rih and Steelanol project in Ghent.

Capital expenditures include $0.1 billion related to ArcelorMittal

Italia which has been deconsolidated from April 14, 2021

onwards.

Net cash provided by other investing activities of $2.7 billion for

the year ended December 31, 2021 included mainly $2.7 billion

proceeds from the sale of common shares and redemption of

preferred shares of Cleveland-Cliffs and refund of $0.3 billion

cash collateral related to the ArcelorMittal USA disposal (see

below) offset by other investments including $80 million

investments through the XCarb™ innovation fund and $25m for

the acquisition of the remaining 67% interest in Condesa.

Net cash used in investing activities was $2.0 billion for the year

ended December 31, 2020 as compared to $3.8 billion for the

year ended December 31, 2019. Capital expenditures were $2.4

billion for the year ended December 31, 2020 as compared to

$3.6 billion for the year ended December 31, 2019. Capital

expenditures for the year ended December 31, 2020 were in line

with previous guidance of $2.4 billion (down from initial guidance

of $3.2 billion). Excluding the capital expenditures of

ArcelorMittal USA and ArcelorMittal Italia, capital expenditures in

2020 would have been $1.9 billion.

Cash provided by other investing activities include net

consideration received of $497 million (net of cash disposed of

and transaction fees paid), for the sale of ArcelorMittal USA and

$127 million received during the first quarter of 2020 in

connection with the sale of the 50% interest in Global Chartering

Limited during the fourth quarter of 2019, partially offset by

lease payments for ArcelorMittal Italia and $260 million with

respect to a cash collateral provided by the Company until

collection of the TSR receivables retained in ArcelorMittal USA

after disposal.

ArcelorMittal’s major capital expenditures in 2020 included the

following projects: the ArcelorMittal Mexico new hot strip mill, the

ArcelorMittal Italia environmental investment program, the new

LF&CC 2&3 in ArcelorMittal Kryvyi Rih which was completed in

the first quarter of 2020 and the hot strip mill modernization in

Dofasco.

Net cash used in investing activities was $3.8 billion for the year

ended December 31, 2019. Capital expenditures totaled $3.6

billion for the year ended December 31, 2019. Capital

expenditures for the year ended December 31, 2019 were

significantly below the initial guidance of $4.3 billion but

marginally above the revised $3.5 billion guidance provided after

the third quarter of 2019 and below the mid-year guidance of

$3.8 billion as the Company adapted its capital expenditure

plans to the weaker market conditions. Cash used in investing

activities included:

i.$0.8 billion net cash outflow for the acquisition of AMNS

India and $83 million additional UG payments,

ii.lease payments ($200 million) for the ArcelorMittal Italia

acquisition and

iii.the acquisition of Münker Metallprofile GmbH in Germany

($46 million).

These outflows were offset in part by:

i.proceeds from remedy asset sales for the ArcelorMittal

Italia acquisition of $518 million (cash consideration of

$694 million, net of cash disposed of $34 million, an

escrow deposit of $125 million which was subsequently

drawn and proceeds of $17 million paid to a joint venture

of the Company),

ii.the final installment of disposal proceeds from

ArcelorMittal USA's 21% stake in the Empire Iron Mine

Partnership for $44 million and

iii.the sale of remaining 2.6% stake in Gerdau for $116

million.

ArcelorMittal's major capital expenditures in 2019 included the

following projects: the ArcelorMittal Mexico new hot strip mill, the

ArcelorMittal Italia environmental investment program, the new

LF&CC 2&3 in ArcelorMittal Kryvyi Rih and the new walking

beam furnaces at Burns Harbor, along with other ongoing

projects.

Net cash provided by financing activities

Net cash used in financing activities was $10.9 billion for the

year ended December 31, 2021, as compared to the net cash

used in financing activities of $1.5 billion in 2020. In 2021, net

cash used in financing activities included a $5.2 billion outflow

with respect to the Company's five share buyback programs,

$3.6 billion of net payments relating to short and long-term debt

(including $2.3 billion in payments of long-term debt and $1.7

billion in payments of short-term debt), $1.2 billion for the early

redemption of certain MCNs, $572 million of dividend payments

(of which $312 million paid to ArcelorMittal shareholders and

Management report

168

$260 million paid to non-controlling shareholders) and $398

million for lease payments and other financing activities. For

further details related to capital markets, liability management

transactions and debt repayments in 2021, see note 6.1.2 to the

consolidated financial statements.

Net cash used in financing activities was $1.5 billion for the year

ended December 31, 2020, as compared to net cash provided

by financing activities of $0.5 billion in 2019. In 2020, net cash

used in financing activities included an outflow of $2.4 billion for

short and long-term debt, $500 million for the share buyback

program, $135 million for the purchase of Intesa San Paolo

S.p.A. ("ISP")'s ownership interest in ArcelorMittal Italia,

dividends of $181 million paid to non-controlling shareholders

and $264 million for lease payments and other financing

activities. These outflows were partially offset by inflows of $1.2

billion net proceeds from the issuance of the MCNs and $740

million net proceeds from the equity offering.

Net cash provided by financing activities was $0.5 billion for the

year ended December 31, 2019. In 2019, net cash provided by

financing activities included an inflow of $1.3 billion net

proceeds (proceeds of $6.4 billion offset by payments of $5.1

billion) for short and long-term debt, partially offset by dividends

of $332 million, a $90 million outflow related to the share

buyback program and $326 million net outflows from lease

payments and other financing activities.

Dividends during the year ended December 31, 2021 of $572

million included $312 million paid to ArcelorMittal shareholders

and $260 million paid to non-controlling shareholders in

subsidiaries. Dividends during the year ended December 31,

2020 of $181 million were paid to non-controlling shareholders

in subsidiaries. Dividends paid during the year ended December

31, 2019 were $332 million, including $203 million paid to

ArcelorMittal shareholders and $129 million paid to non-

controlling shareholders in subsidiaries.

Equity

Equity attributable to the equity holders of the parent increased

to $49.1 billion as of December 31, 2021 from $38.3 billion as of

December 31, 2020 primarily due to net income attributable to

the equity holders of the parent of $15.0 billion, $3.1 billion

unrealized gains on derivative instruments (including $1.7 billion

relating to CO2 emission rights) and instruments at FVOCI and

$0.5 billion actuarial gains, partly offset by $5.2 billion share

buyback programs, $1.2 billion foreign exchange losses, $0.9

billion MCNs early redemptions and $0.6 billion dividend

payments . See note 11 to ArcelorMittal’s consolidated financial

statements for the year ended December 31, 2021.

Equity attributable to the equity holders of the parent decreased

marginally to $38.3 billion at December 31, 2020, as compared

to $38.5 billion at December 31, 2019. The net loss attributable

to the equity holders of the parent of $0.7 billion, foreign

exchange losses of $0.9 billion, $0.3 billion actuarial losses and

$0.5 billion decrease for the share buyback program were

largely offset by increases of $1.1 billion for the MCNs, $0.7

billion for the equity offering and a $0.4 billion increase in the fair

value of investments held in equity instruments at FVOCI.

For additional analysis of sources and uses of cash in 2019,

please refer to "Operating and financial review and prospects—

Liquidity and capital resources—Sources and uses of cash” in

the Company's annual report for the year ended December 31,

2020.

Disclosures about market risk

ArcelorMittal is exposed to a number of different market risks

arising from its normal business activities. Market risk is the

possibility that changes in raw materials prices, foreign currency

exchange rates, interest rates, base metal prices (zinc, nickel,

aluminum and tin) and energy prices (oil, natural gas and

power) will adversely affect the value of ArcelorMittal’s financial

assets, liabilities or expected future cash flows.

The fair value information presented below is based on the

information available to management as of the date of the

consolidated statements of financial position. Although

ArcelorMittal is not aware of any factors that would significantly

affect the estimated fair value amounts, such amounts have not

been comprehensively revalued for purposes of this annual

report since that date, and therefore, the current estimates of

fair value may differ significantly from the amounts presented.

The estimated fair values of certain financial instruments have

been determined using available market information or other

valuation methodologies that require considerable judgment in

interpreting market data and developing estimates.

See note 6 to ArcelorMittal’s consolidated financial statements

for quantitative information about risks relating to financial

instruments, including financial instruments entered into

pursuant to the Company’s risk management policies.

Risk management

ArcelorMittal has implemented strict policies and procedures to

manage and monitor financial market risks. Organizationally,

supervisory functions are separated from operational functions,

with proper segregation of duties. Financial market activities are

overseen by the CEO and CFO, the Corporate Finance and Tax

Committee and the Executive Office.

All financial market risks are managed in accordance with the

Treasury and Financial Risk Management Policy. These risks

are managed centrally through Group Treasury by a group

specializing in foreign exchange, interest rate, commodity,

internal and external funding and cash and liquidity

management.

169

Management report

All financial market hedges are governed by ArcelorMittal’s

Treasury and Financial Risk Management Policy, which includes

a delegated authority and approval framework, sets the

boundaries for all hedge activities and dictates the required

approvals for all Treasury activities. Hedging activity and limits

are monitored on an ongoing basis. ArcelorMittal enters into

transactions with numerous counterparties, mainly banks and

financial institutions, as well as brokers, major energy producers

and consumers.

As part of its financial risk management activities, ArcelorMittal

uses derivative instruments to manage its exposure to changes

in interest rates, foreign exchange rates and commodities

prices. These instruments are principally interest rate, currency

and commodity swaps, spots and forwards. ArcelorMittal may

also use futures and options contracts.

Counterparty risk

ArcelorMittal has established detailed counterparty limits to

mitigate the risk of default by its counterparties. The limits

restrict the exposure ArcelorMittal may have to any single

counterparty. Counterparty limits are calculated taking into

account a range of factors that govern the approval of all

counterparties. The factors include an assessment of the

counterparty’s financial soundness and its ratings by the major

rating agencies, which must be of a high quality. Counterparty

limits are monitored on a periodic basis.

All counterparties and their respective limits require the prior

approval of the Corporate Finance and Tax Committee.

Standard agreements, such as those published by the

International Swaps and Derivatives Association, Inc. (ISDA) are

negotiated with all ArcelorMittal trading counterparties.

Currency exposure

ArcelorMittal seeks to manage each of its entities’ exposure to

its operating currency. For currency exposure generated by

activities, the conversion and hedging of revenues and costs in

foreign currencies is typically performed using currency

transactions on the spot market and forward market. For some

of its business segments, ArcelorMittal hedges future cash

flows.

Because a substantial portion of ArcelorMittal’s assets, liabilities,

sales and earnings are denominated in currencies other than

the U.S. dollar (its reporting currency), ArcelorMittal has

exposure to fluctuations in the values of these currencies

relative to the U.S. dollar. These currency fluctuations,

especially the fluctuation of the value of the U.S. dollar relative

to the euro, the Canadian dollar, Brazilian real, South African

rand, Argentine peso, Kazakh tenge, Indian rupee, Polish zloty

and Ukrainian hryvnia, as well as fluctuations in the currencies

of the other countries in which ArcelorMittal has significant

operations and/or sales, could have a material impact on its

results of operations.

ArcelorMittal faces transaction risk, where its businesses

generate sales in one currency but incur costs relating to that

revenue in a different currency. For example, ArcelorMittal’s

subsidiaries may purchase raw materials, including iron ore and

coking coal, in U.S. dollar, but may sell finished steel products in

other currencies. Consequently, an appreciation of the U.S.

dollar will increase the cost of raw materials, thereby negatively

impacting the Company’s operating margins, unless the

Company is able to pass along the higher cost in the form of

higher selling prices.

ArcelorMittal faces foreign currency translation risk, which arises

when ArcelorMittal translates the financial statements of its

subsidiaries, denominated in currencies other than the U.S.

dollar for inclusion in ArcelorMittal’s consolidated financial

statements.

The tables below illustrate the impact of an appreciation and a

depreciation of the U.S. dollar of 10% against the euro, on the

conversion of the net debt of ArcelorMittal into U.S. dollar as of

December 31, 2021 and December 31, 2020. The impact on net

debt denominated in a currency different than the euro, is

computed based on historical data of how such currency would

move against the U.S. dollar when the U.S. dollar appreciates/

depreciates 10% against the euro. A positive sign means an

increase in the net debt.

Currency

Impact on net debt

translation of a 10%

appreciation of the

U.S. dollar against the

euro

Impact on net debt

translation of a 10%

depreciation of the

U.S. dollar against the

euro

In 2021

in $ equivalent

(in millions)

in $ equivalent

(in millions)

Argentine peso

(34)

Brazilian real

(9)

Euro

(325)

325

Moroccan dirham

(5)

Polish zloty

(15)

South African rand

(17)

Other

(3)

Management report

170

Currency

Impact on net debt

translation of a 10%

appreciation of the

U.S. dollar against the

euro

Impact on net debt

translation of a 10%

depreciation of the

U.S. dollar against the

euro

In 2020

in $ equivalent

(in millions)

in $ equivalent

(in millions)

Argentine peso

(31)

Brazilian real

(6)

Canadian dollar

(14)

Euro

(444)

444

Moroccan dirham

(10)

Polish zloty

(10)

Other

(20)

Derivative instruments

ArcelorMittal uses derivative instruments to manage its

exposure to movements in interest rates, foreign exchange rates

and commodity prices. Changes in the fair value of derivative

instruments are recognized in the consolidated statements of

operations or in equity according to nature and effectiveness of

the hedge.

Derivatives used are non-exchange-traded derivatives such as

over-the-counter swaps, options and forward contracts.

For the Company’s tabular presentation of information related to

its market risk sensitive instruments, please see note 6 to the

consolidated financial statements.

Interest rate sensitivity

Cash balances, which are primarily composed of euros and U.S.

dollar, are managed according to the short term (up to one year)

guidelines established by senior management on the basis of a

daily interest rate benchmark, primarily through short-term

currency swaps, without modifying the currency exposure.

Interest rate risk on debt

ArcelorMittal’s policy consists of incurring debt at fixed and

floating interest rates, primarily in U.S. dollar and euros

according to general corporate needs. Interest rate and currency

swaps are utilized to manage the currency and/or interest rate

exposure of the debt.

For the Company’s tabular presentation of the fair values of its

short and long term debt, please see note 6 to the consolidated

financial statements.

Commodity price risk

ArcelorMittal utilizes a number of exchange-traded commodities

in the steel-making process. In certain instances, ArcelorMittal is

the leading consumer worldwide of certain commodities. In

some businesses and in certain situations, ArcelorMittal is able

to pass this exposure on to its customers. The residual

exposures are managed as appropriate.

Financial instruments related to commodities (base metals,

energy, freight and emission rights) are utilized to manage

ArcelorMittal’s exposure to price fluctuations.

Hedges in the form of swaps and options are utilized to manage

the exposure to commodity price fluctuations.

In case of natural gas, ArcelorMittal has a portfolio with 80%

integrated capacity which means off take gases from the plant

are recycled and utilized as input. Overall, the Company has

hedged 50% of its requirement on 6 month rolling basis with

other strategic long term hedges in place. For certain

jurisdictions like Canada, energy requirements are mainly

fulfilled through nuclear or hydro power.

With respect to emission rights, ArcelorMittal is partially hedged

for the first half of phase 4 of ETS system. In 2021, the

Company has not utilized any of its hedges and has fulfilled its

shortfall requirements with spot purchases by strategically

buying certificates in planned manner. As of December 31,

2021, the prices of hedged positions are significantly lower than

the average prices of 2021.

For the Company’s tabular presentation of information related to

its market risk sensitive instruments, please see note 6 to the

consolidated financial statements.

In respect of non-exchange traded commodities, ArcelorMittal is

exposed to volatility in the prices of raw materials such as iron

ore (which is generally correlated with steel prices with a time

lag) and coking coal. This exposure is almost entirely managed

through long-term contracts, however some hedging of iron ore

exposures is made through derivative contracts. For a more

detailed discussion of ArcelorMittal’s iron ore and coking coal

purchases, see “Operating and financial review —Economic

conditions—Raw materials”.

Outlook

Based on the current economic outlook, ArcelorMittal expects

global apparent steel consumption (“ASC”) in 2022 to grow

between 0% to 1.0% (versus growth of 4% in 2021).

Economic activity progressively improved during 2021 as

lockdown measures eased and the global steel industry

benefited from a favorable supply demand balance supporting

increasing utilization and improved demand. Although there is

some moderation of the tight market conditions (and subject to

pandemic-related macroeconomic uncertainties), the Company

expects overall ASC to grow in 2022 versus 2021 with regional

differences highlighted below:

•In the US, ASC is expected to grow within a range of 1.0%

to 3.0% in 2022 (versus an estimated 20.0% growth in

2021). Automotive is expected to grow strongly as semi-

conductor shortages ease and manufacturing sectors are

171

Management report

supported by strong order backlogs and low inventory of

finished goods. Infrastructure is expected to grow due to

beginnings of support from the $1.2 trillion infrastructure

plan.

•In Europe, ASC is expected to grow within a range of 0.0%

to 2.0% in 2022 (versus an estimated 14.0% growth in

2021). Automotive is expected to grow strongly, with

moderate growth in infrastructure and construction to

support underlying demand.

•In Brazil, ASC is expected to decline in 2022 in the range of

8.0 to 10.0% (versus a healthy 23.0% estimated growth in

2021). While ASC is expected to decline due to destocking,

real demand is expected to increase moderately in 2022

with a recovery in automotive output offset by weakness in

other steel-consuming sectors.

•In the CIS, ASC in 2022 is expected to grow within a range

of 0.0% to 2.0% (versus a 3.0% estimated growth in 2021).

•In India, ASC in 2022 is expected to grow within a range of

6.0% to 8.0% (versus 17.0% estimated growth in 2021).

•As a result, overall World ex-China ASC in 2022 is

expected to grow within the range of 2.5% to 3.0% (versus

11.0% in 2021) supported by mild growth in the Company's

core developed markets and stronger growth in India, offset

by weakness in Brazil.

•In China, overall demand is expected to continue to decline

in 2022 between 0.0% to 2.0% (versus estimated decline of

2.0% in 2021); weak real estate is partially offset by a small

pick-up in infrastructure

Given the mild growth anticipated in ex-China ASC in 2022

versus 2021 (2.5% to 3.0% as described above), in 2022 the

Company expects steel shipments to grow by 3.0% versus 2021

levels (including some mix benefits and recovery post logistics

issues in 2021) and strong operating income and cash flow from

operations including the substantial benefits from the recently

renegotiated annual contracts with automotive OEMs. While the

restocking effect has run its course with inventories returning to

normal levels in 2021, the Company expects real demand

recovery to continue, and this is expected to support further

apparent demand growth in 2022, particularly if the automotive

supply chain constraints ease. The medium to longer term

fundamental outlook for steel is positive. The global steel

industry is expected to benefit from the structural changes that

are occurring, including China’s focus on decarbonization and

removal of VAT rebates on steel exports, and the actions taken

by various governments to protect against the threats of unfair

trade.

Based on current market conditions together with impacts from

higher automotive contract price resets, the Company expects a

further working capital investment in the first quarter of 2022.

The 2022 full year working capital requirements will be

determined by market dynamics and are expected to be

consistent with operating income evolution (with the aim to

return working capital rotation days to targeted levels by year-

end).

In terms of cost saving, the Company has announced a new

three year $1.5 billion value plan focused on creating value

through well-defined commercial and operational initiatives. This

plan does not include the the impact of strategic projects. The

plan includes commercial initiatives, including to improve

volume and mix, as operational improvements (primarily in

variable costs). The plan aims at protecting the operating

income potential of the business from rising inflationary

pressures; improving its relative competitive position vis-a-vis its

peers and supporting sustainably higher profits.

In addition, capital expenditures are expected to increase from

$3.0 billion in 2021 to $4.5 billion in 2022. Including $0.2 billion

of carry-over from 2021, capital expenditures excluding strategic

capital expenditures are expected to be $3.1 billion in 2022.

Decarbonization capital expenditures are expected to be $0.3

billion in 2022 (net of government support). Capital expenditures

relating to strategic projects are expected to be $1.1 billion

including the mix/growth investments at Vega and Monlevade in

Brazil, iron ore projects in Liberia, Serra Azul and Las Truchas

and the pellet plant project in Ukraine and new section mill in

Barra Mansa (Brazil).

Based on current market conditions (including support from

automotive contract resets that have already occurred), the

Company expects strong cash flow generation in 2022 and has

announced a proposed 27% increase in the base annual

dividend to $0.38/share (to be approved by the shareholders at

the annual general meeting in May 2022) and a new $1.0 billion

capital return program by the first half of 2022. This is the

maximum amount based on the authorization provided by

shareholders at the annual general meeting of shareholders in

June 2021. Additional authorization to repurchase shares will be

sought from shareholders at the 2022 annual general meeting.

The data disclosed above is before Russia’s invasion of

Ukraine, whose impact is still being assessed by the Company.

Economic activity and ASC may be impacted in the CIS and

globally. See “Introduction—Risk factors—Risks related to the

global economy and the mining and steel industry—Russia’s

invasion of Ukraine, international reaction to it and any regional

or global escalation of the conflict, could adversely affect the

Company’s business and results of operations.”

Management report

172

All information that is not historical in nature and disclosed

under “Operating and financial review”, and in particular in this

Outlook section, is deemed to be a forward-looking statement. A

detailed discussion of principal risks and uncertainties which

may cause actual results and events to differ materially from

such forward-looking statements is included in the section “Risk

factors”.

Management and employees

Directors and senior management

Board of Directors

ArcelorMittal places a strong emphasis on corporate

governance. The Board of Directors is composed of eleven

directors, of which seven are independent directors. Mr. Bruno

Lafont is the Lead Independent Director. The Board of Directors

has three committees: The Audit and Risk Committee, the

Appointment, Remuneration and Corporate Governance

Committee ("ARCG Committee") and the Sustainability

Committee ("SC"). Prior to July 28, 2021, the former

Appointments, Remuneration, Corporate Governance and

Sustainability Committee carried out the the roles of both of the

current Appointments, Remuneration and Corporate

Governance Committee and the new Sustainability Committee.

The ARCG Committee and the Audit and Risk Committee are

comprised exclusively of independent directors. There are two

independent directors in the Sustainability Committee.

The annual general meeting of shareholders on June 8, 2021

acknowledged the expiration of the terms of office of Mrs. Karyn

Ovelmen and Mr. Tye Burt. At the same meeting, the

shareholders re-elected Mrs. Karyn Ovelmen and Mr. Tye Burt,

and elected Mrs. Clarissa Lins for a new term of three years

each.

On February 11, 2021, Mr. Aditya Mittal, formerly President and

Chief Financial Officer ("CFO"), became the Chief Executive

Officer ("CEO") of the Company and Mr. Lakshmi N. Mittal

remained the Chairman of the Board (now named "Executive

Chairman"), see "Introduction—Key transactions and events in

2021". The CEO Office was renamed the Executive Office

(comprised of the Executive Chairman and the CEO), and Mr.

Genuino Christino became the CFO. The descriptions

throughout this annual report reflect the governance structure in

place during 2021 following these changes.

In the most recent assessment of the Company’s leadership

structure, the ARCG Committee reviewed the key duties and

responsibilities of the Company’s Executive Chairman and its

Lead Independent Director as follows:

Executive Chairman

Lead Independent Director

* Chairs the Board of Directors' and shareholders' meetings

* Provides independent leadership to the Board of Directors

* Works with the Lead Independent Director to set agenda for the Board of

Directors and reviews the schedule of the meetings

* Presides at executive sessions of independent directors

* Serves as a public face of the Board of Directors and of the Company

* Advises the Executive Chairman of any decisions reached and

suggestions made at the executive sessions, as appropriate

* Serves as a resource for the Board of Directors

* Coordinates the activities of the other independent directors

* Guides discussions at the Board of Directors meetings and encourages

directors to express their positions

* Oversees Board of Directors' governance processes, including

succession planning and other governance-related matters

* Communicates significant business developments and time-sensitive matters

to the Board of Directors

* Liaison between the Executive Chairman and the other independent

directors

* Is responsible for managing day-to-day business and affairs of the Company

* Calls meetings of the independent directors when necessary and

appropriate

* Interacts with the Executive Office and Executive Officers of the Company

and frequently meets stakeholders and provides feedback to the Board of

Directors

* Leads the Board of Directors’ self-evaluation process and such other

duties as are assigned from time to time by the Board of Directors

173

Management report

The members of the Board of Directors are set out below:

Name

Age5

Date of joining the

Board6

End of Term

Position within ArcelorMittal5

Lakshmi N. Mittal

May 1997

May 2023

Executive Chairman of the Board of Directors

Aditya Mittal8

June 2020

May 2023

Director and Chief Executive Officer

Vanisha Mittal Bhatia7

December 2004

May 2022

Director

Suzanne P. Nimocks2, 4

January 2011

May 2022

Director

Bruno Lafont1, 2, 4

May 2011

May 2023

Lead Independent Director

Tye Burt2, 3, 4

May 2012

May 2024

Director

Michel Wurth3

May 2014

May 2023

Director

Karyn Ovelmen1, 4

May 2015

May 2024

Director

Karel de Gucht1, 4

May 2016

May 2022

Director

Etienne Schneider1, 4

June 2020

May 2023

Director

Clarissa Lins2, 3, 4

June 2021

May 2024

Director

1.Member of the Audit & Risk Committee.

2.Member of the Appointments, Remuneration and Corporate Governance Committee.

3.Member of the Sustainability Committee.

4.Non-executive and independent director.

5.Age and position as of December 31, 2021.

6.Date of joining the Board of ArcelorMittal or, if prior to 2006, its predecessor Mittal Steel Company NV.

7.Ms. Vanisha Mittal Bhatia is the daughter of Mr. Lakshmi N. Mittal and sister of Mr. Aditya Mittal.

8.Mr. Aditya Mittal is the son of Mr. Lakshmi N. Mittal and brother of Ms. Vanisha Mittal Bhatia.

Henk Scheffer is the Company Secretary and, accordingly, acts as secretary of the Board of Directors.

Lakshmi N. Mittal, 71, is the Executive Chairman of ArcelorMittal

since February 2021. He was previously the Chairman and

Chief Executive Officer of ArcelorMittal. He is a renowned global

businessman who serves on the boards of various companies

and advisory councils. He is an active philanthropist engaged in

the fields of education and child health. Mr. Mittal was born in

Sadulpur in Rajasthan in 1950. He graduated from St Xavier’s

College in Kolkata, where he received a Bachelor of Commerce

degree. He has received numerous awards for his contribution

to the steel industry over the years and recently, in April 2018,

Mr. Mittal was awarded by the American Iron and Steel Institute

with the Gary medal award recognizing his great contribution to

the steel industry. He is widely recognized for successfully

integrating many company acquisitions in North America, South

America, Europe, South Africa and the CIS. Mr. Mittal is

Chairman of the board of Aperam and a member of the board of

Goldman Sachs. He previously sat on the board of Airbus N.V.

He is a member of the Foreign Investment Council in

Kazakhstan, the National Investment Council of Ukraine, the

Global CEO Council of the Chinese People’s Association for

Friendship with Foreign Countries, the World Economic Forum’s

International Business Council, the World Steel Association’s

Executive Committee, the European Round Table of

Industrialists, the Indian School of Business and a member of

the board of Trustees of Cleveland Clinic. Mr. Mittal is the father

of Aditya Mittal (who is Chief Executive Officer and a non-

independent Director of ArcelorMittal) and Vanisha Mittal Bhatia

(who is a Non-independent Director of ArcelorMittal Board). Mr.

Mittal is a citizen of India.

Aditya Mittal, 45, is the Chief Executive Officer since February

2021 and Director of ArcelorMittal. He was previously the

President and Chief Financial Officer of ArcelorMittal. Following

the formation of ArcelorMittal in 2006, Aditya Mittal held various

senior leadership roles, including managerial oversight of the

Group’s flat carbon steel businesses in the Americas and

Europe, in addition to his role as CFO and membership of the

Group Management Board. In 2008, Aditya Mittal was named

‘European Business Leader of the Future’ by CNBC Europe and

was ranked fourth in Fortune magazine’s ‘40 under 40’ list in

2011. He is an active philanthropist with a particular interest in

child health. Together with his wife Megha, he is a significant

supporter of the Great Ormond Street Children’s Hospital in

London, having funded the Mittal Children’s Medical Centre, and

in India, the couple work closely with UNICEF, having funded

the first ever country-wide survey into child nutrition, the results

of which are being used by the Government of India to inform

relevant policy. Aditya Mittal serves on the boards of

ArcelorMittal, Aperam, HMEL and Iconiq Capital, and is the

Chairman of the Board of ArcelorMittal Nippon Steel India. He is

also a Trustee at the Brookings Institution and an alumni of the

World Economic Forum Young Global Leader’s Programme.

Aditya Mittal holds a Bachelor’s degree in Economics with

concentrations in Strategic Management and Corporate Finance

Management report

174

from the Wharton School in Pennsylvania, United States. He is

the son of Mr. Lakshmi N. Mittal and brother of Ms. Vanisha

Mittal Bhatia. Mr. Aditya Mittal is a citizen of India.

Vanisha Mittal Bhatia, 41, is a non-independent Director of

ArcelorMittal. She was appointed as a member of the LNM

Holdings Board of Directors in June 2004. Ms. Vanisha Mittal

Bhatia was appointed to Mittal Steel’s Board of Directors in

December 2004, where she worked in the Procurement

department leading various initiatives including "total cost of

ownership program". She joined Aperam in April 2011 and since

has held the position of Chief Strategy Officer. She has a

Bachelor of Sciences from the European Business School. Ms.

Vanisha Mittal Bhatia is a citizen of India. Ms. Vanisha Mittal

Bhatia is the daughter of Mr. Lakshima N. Mittal and the sister of

Mr. Aditya Mittal.

Suzanne P. Nimocks, 62, is a non-executive and independent

Director of ArcelorMittal and a member of the Appointments,

Remuneration and Corporate Governance Committee. She was

previously a director (senior partner) with McKinsey & Company,

a global management consulting firm, from June 1999 to March

2010, and was with the firm in various other capacities

beginning in 1989, including as a leader in the firm’s Global

Petroleum Practice, Electric Power & Natural Gas Practice,

Organization Practice, and Risk Management Practice. Ms.

Nimocks chaired the Environmental Committee of the Greater

Houston Partnership, the primary advocate of Houston’s

business community, until December 31, 2010. She holds a

Bachelor of Arts in Economics from Tufts University and a

Masters in Business Administration from the Harvard Graduate

School of Business. Ms. Nimocks is currently a board member

of Ovintiv Inc (formerly Encana Corporation), and as of April 15,

2021, Lead Independent Director of the Board of Owens

Corning, all listed companies. Ovintiv Inc is a major natural gas

exploration and production company and Owens Corning is a

manufacturer of building products. In the non-profit sector, she

serves as a Trustee of the Texas Children’s Hospital and is on

the global Advisory Board of Advancing Women in Energy. Ms.

Nimocks is a citizen of the United States of America.

Bruno Lafont, 65, is Lead Independent Director of ArcelorMittal,

a member of the Audit & Risk Committee and chairman of the

Appointments, Remuneration and Corporate Governance

Committee. He began his career at Lafarge in 1983 and has

held numerous positions in finance and international operations

with the same company. In 1995, Mr. Lafont was appointed

Group Executive Vice President, Finance, and thereafter,

Executive Vice President of the Gypsum Division in 1998. Mr.

Lafont joined Lafarge’s General Management as Chief

Operating Officer between May 2003 and December 2005,

Chief Executive Officer in January 2006, and he was appointed

Chairman and Chief Executive Officer in May 2007. In July 2015

Mr. Lafont was appointed Honorary Chairman of Lafarge. He

was co-Chairman of the Board of Directors of LafargeHolcim

between July 2015 and May 2017. He was a board member of

EDF from 2008 to 2019. Mr. Lafont left the Executive Committee

of the World Business Council for Sustainable Development

(WBCSD) in December 2019. Born in 1956, Mr. Lafont is a

graduate from the Hautes Etudes Commerciales business

school (HEC 1977, Paris) and the Ecole Nationale

d’Administration (ENA 1982, Paris). Mr. Lafont is a citizen of

France. Mr. Lafont has informed the Company that, on

December 8, 2017, he (along with five other former Lafarge

officers) was placed under formal investigation (mis en examen)

in his capacity as former CEO of Lafarge SA, in relation to

alleged payments made by a subsidiary of Lafarge SA (Lafarge

Cement Syria) to terrorist groups in Syria, and that alleged

violations of EU economic sanctions and French labor law are

also being investigated.

Tye Burt, 64, is a non-executive and independent Director of

ArcelorMittal and a member of the Appointments, Remuneration

and Corporate Governance Committee Committee as well as of

the Sustainability Committee. He was appointed President and

Chief Executive Officer of Kinross Gold Corporation in March

2005. He held this position until August 1, 2012. Kinross is listed

on the New York Stock Exchange and the Toronto Stock

Exchange. Mr. Burt was also a member of the board of directors

of Kinross. Mr. Burt has broad experience in the global mining

industry, specializing in corporate finance, business strategy and

mergers and acquisitions. Prior to joining Kinross, he held the

position of Vice Chairman and Executive Director of Corporate

Development at Barrick Gold Corporation. He was President of

the Cartesian Capital Group from 2000 to 2002; Chairman of

Deutsche Bank Canada and Deutsche Bank Securities Canada;

Global Managing Director of Global Metals and Mining for

Deutsche Bank AG from 1997 to 2000; and Managing Director

and Co-Head of the Global Mining Group at BMO Nesbitt Burns

from 1995 to 1997, holding various other positions at BMO

Nesbitt Burns from 1986 to 1995. Mr. Burt is the Chair and

Principal at Carbon Arc Capital Investments Corp. and was the

Life Sciences Research Campaign Chair of the University of

Guelph's Better Planet Project. Mr. Burt is a member of the

Board of Directors of Boart Longyear, a global leader in the

drilling services and equipment industry. He is a graduate of

Osgoode Hall Law School, a member of the Law Society of

Ontario, and he holds a Bachelor of Arts degree from the

University of Guelph. Mr. Burt is a citizen of Canada.

Michel Wurth, 67, is a non-independent Director of ArcelorMittal

and a member of the Sustainability Committee. He joined Arbed

in 1979 and held a variety of functions before joining the Arbed

Group Management Board and becoming its chief financial

officer in 1996. The merger of Aceralia, Arbed and Usinor,

leading to the creation of Arcelor in 2002, led to Mr. Wurth’s

appointment as senior executive vice president and CFO of

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Management report

Arcelor. He became a member of ArcelorMittal’s Group

Management Board in 2006, responsible for Flat Carbon

Europe, Global R&D, Distribution Solutions and Long Carbon

Worldwide respectively. Michel Wurth retired from the GMB in

April 2014 and was elected to ArcelorMittal’s board of directors

in May 2014. He holds a Law degree from the University of

Grenoble, France, and a degree in Political Science from the

Institut d’Études Politiques de Grenoble as well as a Master’s of

Economics from the London School of Economics, UK. Mr.

Wurth is also doctor of laws honoris causa of the Sacred Heart

University, Luxembourg. Mr. Wurth is Chairman of ArcelorMittal

Luxembourg S.A. (a wholly owned subsidiary of ArcelorMittal

S.A.) as well as Vice Chairman of the supervisory board of

Dillinger Hütte AG and Dillinger Hütte Saarstahl AG (associates

of ArcelorMittal). Mr. Wurth is Board member of Orion

Engineered Carbon S.A. a global company active in the black

carbon industry, listed on the NASDAQ. Mr. Wurth served as

Chairman of the Luxembourg Chamber of Commerce between

May 2004 and May 2019 and is a member of the Council of the

Central Bank of Luxembourg. He is also non-executive

Chairman of Paul Wurth Real Estate S.A. and member of the

supervisory board of SMS Group (the controlling shareholder of

Paul Wurth Real Estate S.A.), as well as non-executive

Chairman of BIP Investment Partners S.A. and BIP Capital

Partners S.A., and non-executive Board member of Brasserie

Nationale. SMS Group, a leading family owned equipment and

engineering supplier for the steel and non-ferrous metal

producing industry. BIP Investment Partners and BIP Capital

Partners S.A. are Luxembourg based companies organized as

investment funds investing in small and mid-cap private equity

and Brasserie Nationale is a privately owned brewery based in

Luxembourg. Mr. Wurth is vice-chairman of the Luxembourg

Red Cross. Mr. Wurth is a citizen of Luxembourg.

Karyn Ovelmen, 58, is a non-executive and independent

Director of ArcelorMittal as well as the chairman of the Audit &

Risk Committee. From January 2019 to December 31, 2019,

Mrs. Ovelmen was the Gas Power Transformation Leader for

the General Electric Company. Prior to that, she served as

Executive Vice President and Chief Financial Officer of

Flowserve, a position that she held from June 2015 to February

2017. Previously, she also served as Chief Financial Officer and

Executive Vice President of LyondellBasell Industries NV from

2011 to May 2015, as Executive Vice President and Chief

Financial Officer of Petroplus Holdings AG from May 2006 to

September 2010 and as Executive Vice President and Chief

Financial Officer of Argus Services Corporation from 2005 to

2006. Prior to that, she was Vice President of External

Reporting and Investor Relations for Premcor Refining Group

Inc. She also spent 12 years with PricewaterhouseCoopers,

primarily serving energy industry accounts. Mrs. Ovelmen is a

member of the Hess Corporation Board of Directors and a

member of the Audit Committee as of November 4, 2020. Mrs.

Ovelmen was a member of the Gates Industrial Corporation plc.

Board of Directors as a non-executive director and was a

member of their Audit Committee from December 2017 to March

2019. Mrs. Ovelmen holds a Bachelor of Arts degree from the

University of Connecticut, USA, and is a Certified Public

Accountant ("CPA"). Mrs. Ovelmen is a citizen of the United

States of America.

Karel de Gucht, 67, is a non-executive and independent Director

and a member of the Audit & Risk Committee. Mr. de Gucht is a

Belgian Minister of State. He was the European Commissioner

for Trade in the 2nd Barroso Commission from 2010 to 2014

and for Development and Humanitarian Aid in the 1st Barroso

Commission from 2009 to 2010. Previously, Mr. De Gucht

served as Belgium's Minister of Foreign Affairs from 2004 to

2009 and Vice Prime Minister of Belgium from 2008 to 2009. In

addition, in 2006, he was the Chairman in Office of the

Organization for Security and Cooperation in Europe (OSCE)

and Member of the Security Council of the United Nations from

2007 to 2008. Since 1991, Mr. De Gucht has been a Professor

of Law at the VUB (the Dutch-speaking Free University

Brussels). He is currently a member of the European Advisory

Board of CVC Capital Partners, a member of the board of

directors of the listed company Proximus NV and the president

of the IES, the Institute of European Studies at the VUB. In the

course of 2021, Mr. De Gucht has been nominated Chairman of

the Board of YOUSTON NV, a Belgian company specialized in

archiving, digitalization and processing. Mr. de Gucht holds a

Master of Law degree from the VUB and is a Belgian citizen.

Etienne Schneider, 50, is a non-executive and independent

Director and a member of the Audit & Risk Committee. Etienne

Schneider joined the government of Luxembourg in 2012 as

Minister of the Economy and Foreign Trade before being

appointed Deputy Prime Minister, Minister of the Economy,

Minister of Internal Security and Minister of Defense in 2013. In

2018, Mr. Schneider became Deputy Prime Minister, Minister of

the Economy and Minister of Health and in February 2020

retired from politics. He has previously filled several positions as

a senior civil servant, such as a research assistant at the

European Parliament in Brussels, economist for the LSAP

parliamentary group in the Chamber of Deputies and project

leader with NATO in Brussels. He also served as a government

advisor responsible for various Directorates. Mr. Schneider

became a member of the executive board of several companies,

such as the Société électrique de l’Our (SEO), Enovos

International SA, Enovos Deutschland AG and the National

Credit and Investment Company (SNCI). Upon being appointed

minister in 2012, he resigned from all of these positions. In 2021

Mr. Schneider became president of the board of LuxTP, a

Luxembourgish affilate of the Belgian construction company

Besix Group in which he holds a position as independent board

member since 2020. Mr. Schneider holds a degree from the

Management report

176

Institut Catholique des Hautes Etudes Commerciales (ICHEC) in

Brussels and from Greenwich University in London in

commercial and financial sciences. Mr. Schneider is a citizen of

Luxembourg.

Clarissa Lins, 54, is a non-executive and independent Director

of ArcelorMittal as well as the chairman of the Sustainability

Committee. Mrs. Lins is a senior executive with consolidated

experience in strategy, sustainability, and corporate governance.

With a distinguished education background in economy, she

worked on relevant projects in the public sector at the beginning

of her career - she was part of Brazil’s Ministry of Finance team

that produced the economic stabilization program known as the

Real Plan in 1994, under President Cardoso. She also served

as an Advisor to the President of Brazil’s BNDES Development

Bank, participating in the structuring of the country’s large-scale

privatization projects from 1995 to 1999. She was head of

Corporate Strategy at Petrobras from 1999 to 2002, when the

state-owned oil and gas company shifted its strategy and

improved its corporate governance practices while doing an IPO

at the NYSE. Mrs. Lins moved her focus more specifically

towards Sustainability in 2004, when she joined the FBDS

Fundação Brasileira para o Desenvolvimento Sustentável

(Brazilian Foundation for Sustainable Development). In 2013

she founded the consultancy Catavento, advising corporations

in the areas of strategy and sustainability. Mrs. Lins was the

President of the Brazilian Institute of Petroleum and Gas (IBP)

from November 2019 till March 2021, after serving as Executive

Director for more than 3 years. She serves on Boards and

Committees of leading companies operating in Brazil - including

Suzano's Sustainability Committee (the world’s largest producer

of market pulp), and the Board of Directors of Votorantim

Cimentos. Other companies in which she has held relevant

Board Committee positions include Shell, Vale and Petrobras.

Mrs. Lins is a citizen of Brazil.

Senior management

As of December 31, 2021, ArcelorMittal’s senior management

was comprised of the Executive Office supported by seven other

Executive Officers. ArcelorMittal’s Executive Office was

comprised of the Executive Chairman, Mr. Lakshmi N. Mittal and

the CEO, Mr. Aditya Mittal. Together, the Executive Officers are

responsible for the implementation of the Company strategy,

overall management of the business and all operational

decisions.

On February 10, 2022, Vijay Goyal, Vice President of

ArcelorMittal and Chief Executive Officer of ArcelorMittal CIS

(ArcelorMittal Kryvyi Rih, Ukraine and ArcelorMittal Temirtau,

Kazakhstan) and Dilip Oomen, Vice President of ArcelorMittal

and Chief Executive Officer of AM/NS India were nominated

Executive Officer and Executive Vice President of ArcelorMittal

with immediate effect.

Name

Age

Position

Lakshmi N. Mittal1

Executive Chairman of ArcelorMittal

Aditya Mittal1

Chief Executive Officer of ArcelorMittal

Genuino Christino1

Chief Financial Officer of ArcelorMittal

Stefan Buys1

Executive Vice President, CEO ArcelorMittal Mining

Jefferson de Paula1

Executive Vice President, CEO ArcelorMittal South America Long

Geert Van Poelvoorde1

Executive Vice President, CEO ArcelorMittal Europe

Bart Wille1

Executive Vice President, Head of HR

John Brett1

Chief Executive Officer of ArcelorMittal North America

Bradley Davey1

Executive Vice President and Head of Corporate Business Optimization

Vijay Goyal2

Executive Vice President, CEO CIS

Dilip Oommen2

Executive Vice President, CEO AM/NS India

1.Age and position as of December 31, 2021.

2.Age and position as of date of appointment.

Lakshmi N. Mittal (See “—Board of Directors”).

Aditya Mittal (See "—Board of Directors")

Genuino M. Christino, 50, is the Chief Financial Officer and

Executive Vice President of ArcelorMittal since February 2021.

He is a member of the Group management committee since

2016. Prior to Mr. Christino’s appointment as Chief Financial

Officer, he was the Group Head of Finance since 2016. As Chief

Financial Officer, Mr. Christino is responsible for all of the

Company’s financial functions, including treasury, corporate

finance, accounting, performance management, insurance and

investor relations. In addition, Mr. Christino oversees group

Merger & Acquisitions, Legal and IT activities and is a member

of the Company’s Investment Allocation Committee. Mr.

Christino also heads the Company’s Corporate Finance and Tax

177

Management report

Committee where all key financial transactions of the group are

reviewed and approved.

Prior to joining the ArcelorMittal Group in 2003, Mr. Christino

had spent ten years at KPMG in Brazil and in the United

Kingdom, as an auditor and a consultant. Mr. Christino holds a

bachelor’s degree in accounting and business administration

from the Universidade Paulista in São Paolo, Brazil and has

also completed an Executive MBA Program from the Dom

Cabral Foundation in Belo Horizonte, Brazil. Mr. Christino is a

citizen of Brazil.

Jefferson de Paula, 63, is a member of the Group management

committee, President of ArcelorMittal Brazil, CEO of

ArcelorMittal Long LATAM and Mining Brazil. Counting over 36

years of work in the steel industry, Mr. De Paula has been with

the Group since 1991, occupying several executive positions in

Brazil, Argentina, Americas and Europe. He is Vice President of

the Federation of Industries of the State of Minas Gerais

(FIEMG), Vice President of the Steering Committee of Instituto

Aço Brasil (IABr), Vice President of the Executive Committee of

the Latin American Steel Association (ALACERO). Mr. De Paula

is graduated in metallurgical engineering from Universidade

Federal Fluminense (Brazil). He also holds a Master’s Degree in

finance and marketing from Universidad Austral (Argentina) and

has attended to senior executive courses from Insead (France)

and from Kellogg - Northwestern University (USA). Mr. de Paula

is a citizen of Brazil.

Geert Van Poelvoorde, 56, is a member of the Group

management committee. He started his career in 1989 as a

project engineer at the Sidmar Ghent hot strip mill, where he

held several senior positions in the automation and process

computer department. He moved to Stahlwerke Bremen in 1995

as senior project manager. Between 1998 and 2002, he headed

a number of departments, and in 2003 he was appointed

director of Stahlwerke Bremen, responsible for operations and

engineering. In 2005, Mr. Van Poelvoorde returned to

ArcelorMittal Ghent to take up the position of Chief Operating

Officer. In 2008, he became CEO of ArcelorMittal Ghent with

direct responsibility for primary operations. He was appointed

CEO of the Business Division North within Flat Carbon Europe

in 2009. In January 2014, he was appointed CEO of Flat Carbon

Europe and Purchasing and in February 2021 he became CEO

of ArcelorMittal Europe. Since November 2015, he is also

president of Eurofer, the European steel federation and is

serving on several boards. He graduated from the University of

Ghent with a degree in civil engineering and electronics. Mr. Van

Poelvoorde is a citizen of Belgium.

Bart Wille, 60, is a member of the Group management

committee. He was appointed head of human resources in

January 2018. He joined ArcelorMittal after more than 30 years

of global human resources management experience in various

multinational companies. Mr. Wille joined Unilever in 1985 and

he served the company during 22 years, with positions held in

Belgium, the United Kingdom, Brazil and the Netherlands. After

having joined Puratos (food ingredients) for a short period, Mr.

Wille pursued his career with Bekaert as chief human resources

officer at the beginning of 2009. As a member of the Bekaert

Group Executive Board, Mr. Wille was responsible for human

resources and the reorganization agenda of the company

worldwide. In this role, he supported the international expansion

of the company and he participated in the restructuring and

change of the company's organization, as well as the

continuous transformation of its culture. Mr. Wille is a graduate

in international business administration of UFSIA, the University

of Antwerp. Mr. Wille is a citizen of Belgium.

John Brett, 56, is a member of the Group management

committee and the Chief Executive Officer of ArcelorMittal North

America. He joined the group at former Inland Steel in 1988 as

an associate accountant, and progressed to become a manager

specializing in financial analysis and systems in 1997. In 1998,

John took on the role of controller for Ispat Inland Steel and in

2005, he was promoted to vice president, finance and planning

and controller for Mittal Steel USA. In 2012, Mr. Brett was

appointed executive vice president finance, planning and

procurement for ArcelorMittal USA. Prior to becoming CEO

ArcelorMittal North America in January 2021, Mr. Brett was CEO

ArcelorMittal USA. Mr. Brett holds an MBA from the University of

Chicago and is a graduate in economics from DePauw

University. Mr. Brett is a citizen of the United States of America.

Bradley Davey, 57, is a member of the Group management

committee, Executive Vice President and Head of Corporate

Business Optimization. He joined Dofasco in 1986 as a project

engineer in the central maintenance department, joined

assigned maintenance in 1989, and then the hot strip mill

("HSM") in 1990. He held various positions in the HSM before

becoming a Business Unit Manager in 1996. He gained

international manufacturing experience through this role by

leading two separate multi-year technical exchanges with the

two leading Japanese steelmakers and through leading

Dofasco’s HSM modernization project. In 2002, he changed

careers to marketing as a Manager Strategic Marketing, led

Dofasco’s Marketing process redesign project before becoming

General Manager of Marketing in 2005, then to Director of

Industry Sales in 2007, and then Vice President Commercial in

2008. In 2014, he added CMO North America Automotive, then

became CMO North America Flat Rolled later in 2014. In 2016,

he became CMO of Global Automotive along with CMO North

America. In 2018, Mr. Davey became CEO ArcelorMittal North

America and held this position until his nomination to Head of

Corporate Business Optimization early April 2021. Currently

based in Canada, Mr. Davey has responsibility for Global

Management report

178

Automotive, R&D, CTO, Commercial Coordination, Corporate

Capital Goods Procurement, Corporate Communications and

Corporate Responsibility, Automotive, JV’s in China and India,

Tailored Blanks Americas, and is Vice Chairman of the

Investment Allocation Committee. Mr. Davey holds a mechanical

engineering degree from McMaster University, Canada. Mr.

Davey is a citizen of Canada.

Stefan Buys, 50, is a member of the Group management

committee and the CEO of ArcelorMittal Mining. He joined the

group on October 1, 2021. He has over 25 years experience in

the mining and minerals industry, starting his career in 1994 at

Iscor Vanderbijlpark in South Africa. He joined Xstrata in 1995

and led various operational units, the last one as Chief

Operating Officer of Xstrata Copper North Chile. In 2010, he

joined BHP as Asset President Olympic Dam and later served

as Project Director Organization Design. Before joining

ArcelorMittal he joined RioTinto in 2018 as Managing Director

Pilbara Mines. He holds a bachelor’s degree in metallurgical

engineering from the University of Pretoria, a post graduate

diploma in management from the University of South Africa and

a post graduate diploma in teaching from the University of

Western Australia. Mr. Buys holds dual citizenship in Australia

and South Africa.

Vijay Goyal, 50, is a member of the Group management

committee and the Chief Executive Officer of ArcelorMittal CIS

(ArcelorMittal Kryvyi Rih, Ukraine and ArcelorMittal Temirtau,

Kazakhstan). The joint venture ArcelorMittal Tubular Products

Jubail is also part of his scope. After having started his career as

an internal auditor at ITC Ltd in India, he joined Mittal Steel in

1999 and held various positions in the finance function. In 2007,

he was nominated as CFO and Head of Strategy for Long

Carbon Europe, followed by his appointment as CFO and Head

of central supply chain of Flat Carbon Europe in 2008. From

2014 to 2016, he was CFO of ArcelorMittal Europe, additionally

in charge of legal, IT and the Shared Service Center Europe

before being appointed CEO of ArcelorMittal Downstream

Solutions and member of the Group Management Committee in

October 2016. During 2019, he focused on the leadership of

strategic projects for ArcelorMittal, primarily with respect to the

acquisition of ESIL with the Company's joint venture partner

NSC to create AMNS India, prior to his appointment as CEO of

ArcelorMittal CIS from January 2020 onwards. Mr. Goyal is a

graduate from St Xavier’s College, Calcutta. He is a chartered

accountant and cost and works accountant from the respective

institutes in India. He has also completed executive education

programs at Wharton Business School. Mr. Goyal is a citizen of

India.

Dilip Oommen, 63, is a member of the Group management

committee. He was appointed CEO of AMNS India in December

2019 after the acquisition of ESIL. He has more than 38 years of

experience in the steel industry. Mr. Oommen joined ESIL in

2003 as chief operating officer, before moving to senior

leadership positions within the company. He was appointed

Managing director and Chief Executive Officer of ESIL in 2019.

Prior to joining ESIL, Mr. Oommen had worked in various

leadership roles in Hadeed (SABIC), both in Long and Flat

Product divisions. In 2020, Mr. Oommen was elected President

of the Indian Steel Association, the industry body that represents

major public and private sector steel companies in India. He has

also served in the past as Co-Chair of the Federation of Indian

Chambers of Commerce & Industry’s ("FICCI") Steel

Committee, one of several industry leadership roles he has

taken on during his career. Mr. Oommen is a metallurgical

engineer from the Indian Institute of Technology, Kharagpur. He

has attended several management and technical programs

across the globe. Mr. Oommen is a citizen of India.

179

Management report

Compensation

Content

Annual statement by the ARCG Committee Chairman

Board of Directors

Remuneration at a glance - senior management

Overview of the Company's remuneration policy and rationale of each

performance metric

Remuneration at a glance - 2021 pay outcomes

Comparison of pay outcomes 2021 vs. 2020

Explanation of results for 2020 short-term incentives paid in 2021

Remuneration

Remuneration strategy

Explanation of what informs the ARCG's decision on pay

Remuneration policy

Explanation of policies applied to senior management

Remuneration mix

Overview of the remuneration mix for senior management

2021 Total remuneration

Overview of 2021 outcomes

Short-term incentives

Description of short-term incentives plan ("STI")

Long-term incentive plan

Description of long-term incentive plan ("LTIP" or "LTI"s)

Global stock option plan

Description of global stock option plan

Other benefits

Description of other benefits

SOX 304 and Clawback

Explanation of SOX section 304 rules regarding clawbacks of CEO/CFO

remuneration

Abbreviations

EBITDA

Operating income plus depreciation, impairment expenses and exceptional items

FCF

Free cash flow

STI

Short-term incentives

LTI/LTIP

Long-term incentives (plans)

EPS

Earnings per share

ESG

Environment, social and governance

PSU

Performance share units

RSU

Restricted share units

ROCE

Return on capital employed

TSR

Total shareholder return

Management report

180

Annual statement by the ARCG Committee Chairman

Dear Shareholders,

Description of the year:

Business and results

After the unprecedented disruption we faced in 2020, our

business has seen a strong recovery this year. Despite the

volatility we continue to see because of the ongoing presence

and repercussions of the COVID-19 pandemic, 2021 has been a

very strong year for ArcelorMittal. We have re-positioned our

balance sheet, we are growing strategically through high-quality,

high-return projects and we are returning capital to shareholders

through 171 million shares bought back in 2021. The sale of

ArcelorMittal USA to Cleveland-Cliffs together with other cost

reduction measures essentially improved overall cost

competitiveness. ArcelorMittal’s $4.0 billion net debt ($8.4

billion gross debt) at December 31, 2021 was down from $6.4

billion ($12.3 billion gross debt) at December 31, 2020. We

continued to focus on improving our costs through strategic

M&A activity. In 2020, the Company sold ArcelorMittal USA and

on April 14, 2021, the Company created the joint venture

Acciaierie d'Italia, a leading steel producer in Italy, with Invitalia,

an Italian state-owned company. Acciaierie d'Italia produces

high-quality and sustainable steel to be used in a range of vital

industry sectors across the domestic steel market. Moreover, we

took a leading role in the steel industry’s transition towards a

low-carbon future, by launching three XCarb™ initiatives, as

part of the Company's journey to deliver on its 2050 net zero

commitment: i) issuing XCarb™ green steel certificates; ii)

XCarb™ recycled and renewably produced steel that is made

with recycled material (scrap), using renewable electricity and

giving it an extremely low CO2 footprint; and iii) the XCarb™

innovation fund in which ArcelorMittal will invest up to $100

million annually in groundbreaking companies developing

pioneering breakthroughs that will accelerate the steel industry's

transition to carbon neutral steelmaking.

Remuneration report and policy

At the Annual General Meeting of Shareholders, held on June 8,

2021, we submitted our Remuneration Policy and Remuneration

Report for 2020 to our shareholders. The shareholders voted

96.6% in favor to approve our Remuneration Policy for the

coming four years. This Policy is well-supported and will be

further developed to meet the Company’s new challenges.

Governance, Board and Committees

During 2021, we successfully transitioned to a new CEO and

separated the Executive Chairman and CEO roles ensuring both

continuity and succession. The Board of Directors has overall

responsibility for the governance and strategic direction of

ArcelorMittal, including considering the effects of climate

change. In 2021, we reviewed management efforts in the field of

climate change and other ESG initiatives. Several years ago, we

added sustainability to the tasks of the ARCG Committee

developing it into the Appointments, Remuneration, Corporate

Governance and Sustainability Committee. After a successful

journey we are now ready for the next step. Our activity and

progress will continue to be overseen by a robust governance

structure that, at the board level, now includes a Sustainability

Committee (“SC”), chaired by a newly appointed independent

director. The SC was created for informative and advisory

purposes. Its primary function includes being familiar with and

shaping the Group’s policies, objectives, and guidelines on

environmental, safety, and sustainability matters, analyzing and

reporting to the Board of Directors on the expectations of the

Company’s various stakeholders, and supervising relations with

them. It also proposes approval of Sustainability Policies to the

Board of Directors and reviews and assesses management and

control systems for non-financial risks. The creation of this new

Committee highlights the importance of sustainability and

especially health and safety at the board level. A number of fatal

incidents occurred at different sites of ArcelorMittal (in Ukraine,

in Kazakhstan, in South Africa), which points out the Company's

need to strengthen the safety of its workforce with an absolute

focus on eradicating fatalities. The ARGC Committee will now

focus on Remuneration, Board appointments and corporate

governance. At the senior management level, the Company’s

response to climate change is coordinated and progressed by

the Group Climate Change and Environment Committee

(“CCEC”) and chaired by one of the Executive Officers of the

group. During the year, the Committee had a major focus on

Health & Safety and held three separate additional meetings

together with both senior and operational management to review

progress on Health & Safety and make recommendations for

improvement. The SC also plays a key role in building up a true

safety culture within the ArcelorMittal Group. While the Global

Health and Safety Council of the Group monitors progress on

safety, the SC is responsible for oversight on behalf of the

Board. The SC meets quarterly, and safety is at the top of every

agenda. In addition, it calls ad hoc meetings regarding safety

with executives and other leaders from across the business.

Activities

Remuneration and Nomination

During 2021, the ARCG Committee conducted the Annual Self-

Assessment of the Board of Directors, it reviewed and approved

short-term incentive proposals for senior management, and it

approved the remuneration report for 2021. The ARCG

Committee recommended remuneration and governance-related

proposals for the annual general meeting of shareholders. The

181

Management report

ARCG Committee also reviewed succession plans for the

Board, the Executive Office, and senior executives. The ARCG

Committee reviewed and approved nominations and the

remuneration for the Executive Chairman, the CEO, the CFO

and the Executive Vice Presidents and tested market

conformity, as well as an appropriate link between executive pay

and performance. The ARCG Committee reviewed the grant and

vesting criteria for equity awards, assessed and selected

performance and compensation peer groups under the Long-

Term Incentive Plan and confirmed the vesting of existing plans

in accordance with each plan’s criteria: the ARCG Committee

strengthened the corporate responsibility objectives and criteria

– in particular in the areas of Health & Safety, Diversity &

Inclusion and Climate Change – for both the short- and long-

term incentive plans.

Climate and Sustainability

In July 2021, ArcelorMittal published its second Climate Action

Report (“CAR2”) that followed its first group-wide Climate Action

Report published in 2019 and its first Europe Climate Action

Report published in 2020. We have seen a lot of progress since

we published our first report – globally and within ArcelorMittal.

In May 2019, just 2.4% of the global economy was covered by

net-zero targets. Two years later, more than 90% of the

economy is now covered – although we must acknowledge that

this is not yet fully backed up by plans to deliver. ArcelorMittal

now has a net-zero by 2050 target and has recently announced

plans for the world’s first full-scale zero carbon-emissions steel

plant to be built in Sestao, Spain. These plans will enable us to

continue to lead our sector in the net-zero transition, generating

significant opportunities in multiple aspects of our business. Our

progress enables us to offer customers net-zero equivalent steel

for the first time via an audited certification scheme. The first

XCarb™ certified tonnes were sold in 2020. In 2021, the amount

of this product available increased to 120,000 tonnes and is

expected to rise to 600,000 tonnes in 2022 as we continue to

drive down our emissions following investments in new

technologies.

Going forward

The outlook remains positive: underlying demand is expected to

continue to improve; and, although below the recent record

highs, steel prices remain at elevated levels, something which is

being reflected in the annual contracts for 2022.

Over this past year, we have engaged with our stakeholders on

climate change and health & safety more than ever before. We

expect 2022 will demonstrate how seriously we took stakeholder

inputs, how closely we have listened to their questions, and how

committed we are to providing solutions. We expect that the

year ahead will enable us to make further progress on our

journey to zero harm to our people and we look forward to

leading the steel industry’s path to decarbonization.

Sincerely yours,

Bruno Lafont

Management report

182

Board of Directors

Directors’ fees

The ARCG Committee of the Board of Directors prepares

proposals on the remuneration to be paid annually to the

members of the Board of Directors.

At the June 8, 2021 annual general meeting of shareholders, the

shareholders approved the annual remuneration for non-

executive directors for the 2020 financial year, based on the

following annual fees (euro denominated amounts are translated

into U.S. dollar as of December 31, 2020):

•Basic director’s remuneration: €154,995 ($190,194);

•Lead Independent Director’s remuneration: €218,612

($268,259);

•Additional remuneration for the Chair of the Audit &

Risk Committee: €30,074 ($36,904);

•Additional remuneration for the other Audit & Risk

Committee members: €18,507 ($22,710);

•Additional remuneration for the Chairs of the other

committees: €17,350 ($21,290); and

•Additional remuneration for the members of the other

committees: €11,567 ($14,194).

The total annual remuneration of the members of the Board of Directors for their service for the last five financial years was as follows:

Year ended December 31,

(Amounts in $ thousands except Long-term incentives information)

2021

2020

2019

2018

2017

Base salary1

3,483

2,635

1,569

1,604

1,505

Director fees

1,784

1,706

1,554

1,509

1,744

Short-term performance-related bonus1

5,133

935

3,198

2,775

2,333

Long-term incentives 1, 2

109,143

148,422

89,933

70,302

49,431

1Includes Executive Chairman and CEO in 2021, Chairman and CEO and President and CFO in 2020 and Chairman and CEO in all prior years. Slight differences between

the years are possible, due to foreign currency effects.

2See “Management and employees—Compensation—Remuneration—Long-term incentive plan.”

The annual remuneration for the last five financial years to the current and former members of the Board of Directors for services in all

capacities in the years in which they were Directors was as follows:

(Amounts in $ thousands)

20211

20201

20191

20181

20171

Lakshmi N. Mittal

1,700

1,374

1,569

1,604

1,505

Aditya Mittal

1,783

1,261

—

Vanisha Mittal Bhatia

176

186

171

166

174

Narayanan Vaghul

—

Suzanne P. Nimocks

189

200

183

178

187

Wilbur L. Ross, Jr.

—

Lewis B. Kaden

—

Bruno Lafont

302

306

280

272

255

Tye Burt

194

200

183

178

187

Karyn Ovelmen

221

223

204

198

203

Jeannot Krecké

—

171

166

174

Michel Wurth

181

186

171

166

174

Karel de Gucht

208

209

191

185

194

Etienne Schneider

197

118

—

Clarissa Lins

116

—

Total

5,267

4,341

3,123

3,113

3,249

1.Remuneration for non-executive Directors with respect to 2021 will be paid in 2022 subject to Board of Directors proposal and to the shareholder approval at the annual

general meeting to be held on May 4, 2022. Remuneration for non-executive Directors with respect to 2020, 2019, 2018 and 2017 was paid in 2021, 2020, 2019 and

2018, respectively, following the shareholder approval at the annual general meetings held on June 8, 2021, June 13, 2020, May 7, 2019 and May 9, 2018, respectively.

Slight differences between the years are possible, due to foreign currency effects.

183

Management report

Except for the Executive Chairman and the CEO, members of the Board of Directors have not received any remuneration from any

subsidiary of the Group in 2021.

The annual remuneration for the last five financial years on a full-time equivalent basis of employees of ArcelorMittal S.A. was as

follows:

(Amounts in $ thousands)

20211

20201

20191

20181

20171

Average Remuneration

446

412

389

408

379

1.The annual remuneration is calculated for approximately 20 employees with a labor contract with ArcelorMittal S.A (not including any employees employed by other

entities within the Group)

ArcelorMittal has performed a benchmarking on remuneration

with its selected peers and fixed the remuneration of the

employees and Directors based on the outcome of that

exercise.

The policy of the Company is not to grant any share-based

remuneration to members of the Board of Directors who are not

executives of the Company. As of December 31, 2021,

ArcelorMittal did not have any loans or advances outstanding to

members of its Board of Directors and ArcelorMittal had not

given any guarantees in favor of any member of its Board of

Directors. None of the members of the Board of Directors, other

than the CEO, benefit from an ArcelorMittal pension plan. Short-

term incentives paid to executive directors (including the current

CEO beginning in 2020) were as follows for the last five financial

years:

Short-term Incentives

2021

2020

2019

2018

2017

Lakshmi N. Mittal

2,908

—

3,198

2,775

2,333

Aditya Mittal

2,226

935

—

The following tables provide a summary of the PSUs granted

(long-term incentives) to the executive directors on the Board of

Directors (including the current CEO beginning in 2020), as of

December 31, 2021. There were no outstanding stock options

as of December 31, 2021.

PSUs granted in

2021

PSUs granted in

2020

PSUs granted in

2019

PSUs granted in

2018

PSUs granted in

2017

PSUs granted in

2016

Lakshmi N. Mittal

52,166

77,372

89,933

70,302

49,431

84,107

Aditya Mittal

56,977

71,050

—

Term (in years)

Vesting date1

January 1, 2025

January 1, 2024

January 1, 2023

January 1, 2022

January 1, 2021

January 1, 2022

1.See “Management and employees—Compensation—Remuneration—ArcelorMittal Equity Incentive Plan", for vesting conditions.

Management report

184

Remuneration at a glance - senior management

The following table provides a brief overview of the Company’s remuneration policy for senior management. Additional information is

provided below.

ArcelorMittal's Remuneration Policy

Remuneration

Period

Strategy

Characteristic

Salary

2021

Recruitment and retention

Reviewed annually by the ARCG Committee considering market data

Increases based on the Company performance and individual

performance

STI

2021

Delivery of strategic priorities

and financial success

Maximum STI award of 270% of base salary for the Executive Chairman,

and the CEO and 157.5% of base salary for other

Executive Officers

100% STI paid in cash

ArcelorMittal's first priority Health and Safety is part of the STI

Overperformance towards competition

LTIP

2022-2024

Encourages long term

shareholder return

Performance share units granted with a face value of 100% of base

salary for the Executive Chairman and CEO

Performance share units / Restricted share units granted with a total face

value of 75% as a guideline for other Executive Officers

Shares vest after a three-year performance period

Performance related vesting

Key Performance Metrics from 2021

Metrics

Scheme

Rationale

EBITDA

STI

Demonstrates growth and operational performance of the underlying businesses

FCF

STI

Gap to competition

STI / LTIP

Outperform peers

Health & Safety

STI

Employee health and safety is a core value for the Company

ESG

LTIP

Improve health & safety outcome, achieve decarbonization and diversity & inclusion targets

EPS

LTIP

Links reward to delivery of underlying equity returns to shareholders

TSR

LTIP

Creates a direct link between executive pay and shareholder value

Measure is split equally between comparison against S&P 500 index and a peer group of companies

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Management report

Remuneration at a glance - 2021 Pay outcomes

The following graphics present in thousands of U.S. dollar the compensation paid to the Executive Chairman (CEO until February 11,

2021) in 2021, 2020, 2019, 2018 and 2017 and to the CEO (President and CFO until February 11, 2021) in 2021 and 2020. Amounts

presented for the CFO and other Executive Officers relate to the former President and CFO (Aditya Mittal) and other Executive Officers

until February 11, 2021 and to the CFO and other Executive Officers thereafter. Information with respect to total remuneration paid is

provided under “—Remuneration—2021 Total remuneration” below.

Management report

186

2020 short-term incentives paid in 2021

Business Units

Executive

Realization as % of business target

Executive Office

Lakshmi N. Mittal

Aditya Mittal

99%

Corporate

Brian Aranha

109%

NAFTA

John Brett

86%

Corporate

Genuino Christino

114%

Corporate

Bradley Davey

93%

Flat Carbon Europe

Geert van Poelvoorde

100%

Long Carbon South America

Jefferson de Paula

150%

Mining

Simon Wandke

145%

Corporate

Bart Wille

100%

Note: Individual performance not included in the percent of realization.

Executive office

There was no vesting in 2021 for the Executive Office for the first half of the PSU 2017 grant as the performance targets were not met.

CFO and Other Executive Officers

In 2021, the following long-term incentives vested:

Vehicle

Date of vesting

Date of grant

Number of PSUs

granted to CFO and

other Executive

officers and

outstanding

Number of shares

acquired by CFO and

other Executive officers

PSUs*

January 1, 2021

Performance approved by the ARCG committee on April 21, 2021

June 30, 2016

229,640

67,855

PSUs

January 1, 2021

Performance approved by the ARCG committee on April 21, 2021

December 20, 2017

66,897

12,143

RSUs

December 14, 2021

December 14, 2020

21,873

* the grant number corresponds to half of the grant of 2016 as only half remained to vest in 2021

Remuneration

Remuneration strategy

The ARCG Committee assists the Board of Directors to maintain

a formal and transparent procedure for setting policy on senior

management's remuneration and to determine an appropriate

remuneration package for senior management. The ARCG

Committee should ensure that remuneration arrangements

support the strategic aims of the business and enable the

recruitment, motivation and retention of senior executives while

complying with applicable rules and regulations.

Board oversight

To this end, the Board of Directors has established the ARCG

Committee to assist it in making decisions affecting employee

remuneration. All members of the ARCG Committee are

required to be independent under the Company’s corporate

governance guidelines, the NYSE standards and the 10

Principles of Corporate Governance of the Luxembourg Stock

Exchange.

The members are appointed by the Board of Directors each

year after the annual general meeting of shareholders. The

members have relevant expertise or experience relating to the

purposes of the ARCG Committee. The ARCG Committee

makes decisions by a simple majority with no member having a

casting vote and is chaired by Mr. Bruno Lafont, Lead

Independent Director.

Appointments, remuneration and corporate governance

committee

The primary function of the ARCG Committee is to assist the

Board of Directors with respect to the following:

•review and approve corporate goals and objectives

regarding remuneration relevant to the Executive Office

and Executive Officers and other members of

executive management as deemed appropriate by the

committee, and assess performance against goals and

objectives;

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Management report

•make recommendations to the Board with respect to

incentive remuneration plans and equity-based plans;

•identify candidates qualified to serve as members of

the Board, the Executive Office and Executive Officers;

•recommend candidates to the Board for appointment

by the general meeting of shareholders or for

appointment by the Board to fulfill interim Board

vacancies;

•develop, monitor and review corporate governance

principles applicable to the Company;

•facilitate the evaluation of the Board;

•review the succession planning and the executive

development of the members of the Executive Office

and Executive Officers;

•submit proposals to the Board on the remuneration of

the members of the Executive Office and Executive

Officers, and on the appointment of new members

thereto and new directors; and

•make recommendations to the Board of Directors in

respect of the Company’s framework of remuneration

for the members of the Executive Office and Executive

Officers and such other members of the executive

management as designated by the committee. In

making such recommendations, the committee may

take into account factors that it deems necessary. This

may include a member’s total cost of employment

(factoring in equity/long term incentives, any

perquisites and benefits in kind and pension

contributions).

The ARCG Committee met 6 times in 2021. Its members

comprise Mr. Bruno Lafont (Chairman), Ms. Suzanne Nimocks,

Ms. Clarissa Lins and Mr. Tye Burt.

Regular invitees include Mr. Lakshmi N. Mittal (Executive

Chairman) and Mr. Bart Wille (Head of Group Human

Resources). Mr. Henk Scheffer (Company Secretary) acts as

secretary.

Individual remuneration is discussed by the ARCG Committee

without the person concerned being present. The ARCG

Committee Chairman presents its decisions and findings to the

Board of Directors after each ARCG Committee meeting.

Remuneration policy

The ARCG Committee set policies applied to senior

management on base salary, short-term incentives and long-

term incentives. According to Shareholders Right Directive II,

that was transposed into Luxembourg law in August 1, 2019, the

remuneration policies must be approved at the AGM at least

every 4 years and whenever there is a material change.

Scope

ArcelorMittal’s remuneration philosophy and framework apply to

the following groups of senior management:

•the Executive Chairman and the CEO; and

•the CFO and other Executive Officers.

The remuneration philosophy and governing principles also

apply, with certain limitations, to a wider group of employees

including Executive Vice Presidents, Vice Presidents, General

Managers and Managers.

Remuneration philosophy

ArcelorMittal’s remuneration philosophy for its senior

management is based on the following principles:

•provide total remuneration competitive with executive

remuneration levels of peers of similar size, scope and

industry:

–Korn Ferry (KF) and WillisTowersWatson (WTW)

provide benchmarking services to ArcelorMittal for

all Management Committee members, an average

between KF and WTW data is performed;

–For the Steel division: Large industry - industrial

segment including metals, chemicals, mining,

transport, energy & utilities, upper revenues range;

–For the Mining division: Large companies with a

significant mining divisions or companies similar to

ArcelorMittal Mining division;

–Data are linked to each local market.

•encourage and reward performance that will lead to

long-term enhancement of shareholder value; and

•promote internal pay equity by providing base pay and

total remuneration levels that reflect the role, job size

and responsibility as well as the performance and

effectiveness of the individual.

Remuneration framework

The ARCG Committee develops proposals for senior

management remuneration annually for the Board of Directors'

consideration. Such proposals include the following

components:

•fixed annual salary;

•short-term incentives (i.e., performance-based bonus);

and

Management report

188

•long-term incentives (i.e., stock options (prior to May

2011), RSUs and/or PSUs (after May 2011) depending

on the grant year).

The Company does not have any deferred compensation plans

for senior management, including the Executive Chairman and

CEO.

The following table provides an overview of the remuneration policy applied by the ARCG:

Remuneration component

and link to strategy

Operational and performance framework

Opportunity

Fixed annual salary

Competitive base salary to

attract and retain high-

quality and experienced

senior executives

* Base salary levels are reviewed annually with effect from April 1

(except promotion) compared to the market to ensure that ArcelorMittal

remains competitive with market median base pay levels

* Reviews are based on market information obtained but not led by

benchmarking to comparable roles, changes in responsibility and

general economic conditions

The ARCG does not set a maximum salary,

instead when determining any salary

increases it takes into account a number of

reference points including salary increases

across the Company

Benefits

Competitive level to ensure

coverage of the executives

* May include costs of health insurance, death and disability insurances,

company car, tax return preparation, etc.

* Relocation benefits may be provided where a change of location is

made at Company’s request

The cost to the Company of providing benefits

can change from year to year. The level of

benefit provided is intended to remain

competitive

Pension

Competitive level of post-

employment benefit to

attract and retain executives

* Local benchmark of pension contributions for comparable roles

Short term incentives (STI)

Motivate the senior

executives to achieve

stretch performance on

strategic priorities

* Scorecard is set at the commencement of each financial year

* Measures and relative weights are chosen by the ARCG Committee to

drive overall performance for the coming year

* STI calculations for each executive reflect the performance of

ArcelorMittal and /or the performance of the relevant business units, the

achievement of specific objectives of the department and the individual

executive’s overall performance

* No STI is paid for a performance below threshold 80% for each criteria;

100% STI payout for performance achieved at 100% for each criteria;

150% STI payout for performance achieved at 120% or above for each

criteria

Range for Executive Chairman and CEO: 0 to

270% with a target at 120% of base salary

Range for CFO and Executive Officers: 0 to

157.5% with a target at 70% of base salary

LTIP

Sustain shareholder wealth

creation in excess of

performance of a peer

group and incentivize

executives to achieve

strategy

Executive Office LTIP

* The vesting is subject to a relative TSR (Total Shareholder Return)

compared to the S&P 500 and a peer group and to a relative EPS of a

peer group over a three year- period

*The peer group is determined by the ARCG Committee

* No vesting will occur below the median for all grants as from 2016

* Performance is determined by the ARCG Committee

CFO and Executive Officers LTIP

*The vesting is subject to one or two measures depending on the

business units or group, Gap to competition and TSR/EPS vs. peer

group

*Vesting will occur if the performance is reached

*Performance is determined by the ARCG Committee

Maximum value at grant:

100% of base salary for Executive Chairman

and CEO

Guideline: 75% of base salary for CFO and

Executive Officers

Remuneration mix

The total remuneration target of the Executive Chairman, CEO

and CFO is structured to attract and retain executives; the

amount of the remuneration received is dependent on the

achievement of superior business and individual performance

and on generating sustained shareholder value from relative

performance.

The following remuneration charts, which illustrate the various

elements of the Executive Chairman, CEO, CFO and the other

Executive Officers' compensation, are applicable for 2021. For

each of the charts below, the columns on the left, middle and on

the right, respectively, reflect the breakdown of compensation if

targets are not met, met and exceeded.

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Management report

Note: no pension contribution

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190

Note: Other benefits, as shown above, do not include international mobility incentives that may be provided.

2021 Total remuneration

The total remuneration paid in 2021 to members of

ArcelorMittal’s senior management listed in “Management and

employees—Directors and senior management” (including Mr.

Lakshmi N. Mittal in his capacity as Executive Chairman and Mr.

Aditya Mittal as CEO) was $8.9 million in base salary and other

benefits paid in cash (such as health, other insurances, lunch

allowances, financial services, gasoline and car allowance) and

$12.3 million in short-term performance-related variable

remuneration consisting of a short-term incentive linked to the

Company’s 2020 results. During 2021, approximately $1.5

million was accrued by ArcelorMittal to provide pension benefits

to senior management (other than Mr. Lakshmi N. Mittal).

No loans or advances to ArcelorMittal’s senior management

were made during 2021, and no such loans or advances were

outstanding as of December 31, 2021.

The following table shows the remuneration received by the

Executive Chairman, CEO, CFO and the other Executive

Officers as determined by the ARCG Committee in relation to

the five most recent financial years including all remuneration

components:

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Management report

Executive Chairman8

CEO7

Chief Financial Officer and Executive

Officers 6

(Amounts in $ thousands except for

Long-term incentives)

2021

2020

2019

2018

2017

2021

2020

20219

2020

2019

20185

2017

Base salary1

1,700

1,374

1,569

1,604

1,505

1,783

1,261

5,056

2,970

4,643

5,371

4,709

Retirement benefits

—

178

146

1,348

555

698

862

849

Other benefits2

237

144

223

314

250

Short-term incentives3

2,908

—

3,198

2,775

2,333

2,226

935

7,158

2,169

6,015

5,495

4,468

Long-term

incentives

- fair value in $

thousands4

1,419

1,407

1,339

1,166

1,130

1,550

1,292

4,396

1,834

3,096

2,702

1,922

- number of share units

52,166

77,372

89,933

70,302

49,431

56,977

71,050

146,600

90,069

183,084

141,109

94,553

1.After the salary decrease applied in 2020, the base salaries of the CEO and President and CFO were set back to the original amounts in 2021. A salary increase of 9% was

applied which includes the promotion of Mr. Aditya Mittal as CEO.

2.Other benefits comprise benefits paid in cash such as lunch allowances, financial services, gasoline and car allowances. Health insurance and other insurances are also

included.

3.Short-term incentives are entirely performance-based and are fully paid in cash. The short-term incentive for a given year relates to the Company’s results in the previous

year.

4.Fair value determined at the grant date is recorded as an expense using the straight line method over the vesting period and adjusted for the effect of non-market based

vesting conditions.

5.Henri Blaffart was included until March 31, 2018, Robrecht Himpe was included until June 30, 2018.

6.President and Chief Financial Officer included from 2017 through 2019.

7.Amounts presented for 2021 and 2020 reflect the compensation as President and Chief Financial Officer until February 11, 2021 and as CEO thereafter.

8.Amounts presented reflect the compensation as CEO until February 11, 2021 and as Executive Chairman thereafter.

9.Brian Aranha was included until March 31, 2021. Simon Wandke was included until September 30, 2021. New executive officers were included as of their respective

nomination date.

Short-term incentives

Targets associated with ArcelorMittal’s 2021 Annual

Performance Bonus Plan were aligned with the companies’

strategic objectives of improving health and safety performance

and overall business performance and competitiveness.

For the Executive Chairman and the CEO, the 2021 annual

performance bonus formula is based on the achievement of the

following performance targets:

•EBITDA targets at Group level: 40% (acts as circuit

breaker for financial measures EBITDA and FCF);

•FCF targets at Group level: 25%;

•Gap to competition targets at Group level: 20%; and

•Health and safety performance targets at Group level:

15% (fatalities act as circuit breaker for this measure).

For the Executive Chairman, 100% achievement of the agreed

performance targets results in an annual performance bonus

which equals 120% of base salary. For the CEO, 100%

achievement of the agreed performance targets results in an

annual performance bonus which equals to 100% of base

salary.

For the CFO and other Executive Officers, the 2021 annual

performance bonus formula has been tailored for their

respective positions and is generally based on the following

performance targets:

•EBITDA targets at Group, segment or Business unit

level; (acts as circuit breaker for financial measures

EBITDA and FCF)

•FCF targets at Group, segment or Business unit level;

•Gap to competition targets at Group level, segment or

Business unit level;

•Health and safety performance targets at Group,

Segment or Business unit level (fatalities act as circuit

breaker for this measure); and

•Business specific measures for corporate functions.

For the CFO and other Executive Officers, 100% achievement

of the agreed performance targets results in an annual

performance bonus which equals 70% of base salary.

For the calculation of the annual performance bonus, the

achievement level of every performance target is calculated

separately, and these are added up.

Individual performance and assessment ratings define the

individual annual performance bonus multiplier that will be

applied to the annual performance bonus calculated based on

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192

actual performance against the performance measures. Those

individuals who consistently perform at expected levels will have

an individual multiplier of 1. For outstanding performers, an

individual multiplier of up to 1.5 may cause the annual

performance bonus pay-out to be higher than 150% of the target

annual performance bonus, up to 270% of the target annual

performance bonus being the absolute maximum for the

Executive Chairman and the CEO. Similarly, a reduction factor

will be applied for those at the lower end.

In exceptional circumstances, the ARCG committee can

exercise discretion in the final determination of the annual

performance bonus.

The achievement level of performance for the annual

performance bonus for the Executive Chairman, the CEO, the

CFO and the other Executive Officers is summarized as follows:

Functional level

Target achievement threshold @ 80%

Target achievement @ 100%

Target achievement ≥ ceiling @ 120%

Executive Chairman and CEO

60% of base pay

120% of base pay

180% of base pay

CFO and Executive Officers

35% of base pay

70% of base pay

105% of base pay

ArcelorMittal Equity Incentive Plan

ArcelorMittal operates a long-term incentive plan to incentivize

shareholder wealth creation in excess of performance of a peer

group and incentivize executives to achieve strategy.

On May 10, 2011, the annual general meeting of shareholders

approved the ArcelorMittal Equity Incentive Plan, a new equity-

based incentive plan that replaced the Global Stock Option Plan

(see below and note 8.3 to the consolidated financial statements

for a description of the Global Stock Option Plan). The

ArcelorMittal Equity Incentive Plan is intended to align the

interests of the Company’s shareholders and eligible employees

by allowing them to participate in the success of the Company.

The ArcelorMittal Equity Incentive Plan provides for the grant of

RSUs and PSUs to eligible employees of the Company

(including the Executive Officers) and is designed to incentivize

employees, improve the Company’s long-term performance and

retain key employees. On May 8, 2013, the annual general

meeting of shareholders approved the GMB PSU Plan, which

provides for the grant of PSUs to GMB members (and is now

applicable to the Executive Office). Until the introduction of the

GMB PSU Plan in 2013, GMB members were eligible to receive

RSUs and PSUs under the ArcelorMittal Equity Incentive Plan.

In 2016, a special grant was approved in order to align the grant

with the Action 2020 plan put in place by ArcelorMittal.

The maximum number of PSUs and RSUs available for grant

during any given year is subject to the prior approval of the

Company’s shareholders at the annual general meeting. The

2018, 2019 and 2020 Caps for the number of PSUs/RSUs that

may be allocated to the Executive Office and other retention and

performance based grants below the Executive Office level,

were approved at the AGMs on May 7, 2019, June 13, 2020 and

8 June 2021 respectively, at a maximum of 2,500,000 shares

4,250,000 shares and 3,500,000 shares respectively.

In 2016, ArcelorMittal adapted the plan:

•To consider the comments of shareholders that vesting

should not happen below the median and

•To adapt to Action 2020 (Special grant).

Starting in 2021, the performance criteria for the PSUs for the

Executive Office and Executive Officers include an ESG criteria

comprised of a health & safety, a climate action and a diversity

& inclusion target.

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Management report

Conditions of the 2021 grant were as follows:

Executive Office

Executive Officers

2021

Grant

PSUs with a three year performance period

Value at grant 100% of base salary for the Executive Chairman and

the CEO

Vesting conditions:

Vesting conditions

Threshold

Target

Stretch

TSR vs. peer group (50%) / EPS

vs. peer group (20%)

100% median

≥120% median

TSR vs. peer group (40%)

100%

weighted

average

≥120%

weighted

average

Vesting percentage

50%

100%

Vesting percentage

100%

150%

Gap to competition (40%)

100% of target

120% of target

ESG (30%)

100% of target

Vesting percentage

100%

150%

ESG

20%

100% of target

120% of target

100%

150%

Vesting percentage

100%

RSUs with a three year vesting period

RSUs with a two year vesting period

Awards made in 2016 through 2020

The Company's Equity Incentive Plan for senior management including Executive Officers follows the Company's strategy.

In addition to the 2021 grant, the summary of outstanding plans as of December 31, 2021 is as follows:

Executive office

2016 Special Grant

PSUs with a five year performance period, 50% vesting after three year performance period and 50% after

additional two year performance period

Performance criteria: 50% TSR (½ vs. S&P 500 and ½ vs. peer group) and 50% EPS vs. peer group

Value at grant: 150% of base salary for the CEO and the President and CFO

Vesting conditions:

Threshold

Target

TSR/EPS vs. peer group

100% median

≥120% median

TSR vs. S&P 500

Performance

equal to Index

≥Performance equal to Index + 2% p.a. outperformance

Vesting percentage

50%

100%

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194

Executive Office

Executive Officers

2018

Grant

PSUs with a three year performance period

Value at grant 100% of base salary for the Executive Chairman and

the CEO

Vesting conditions:

Vesting conditions

Threshold

Target

TSR/EPS vs. peer group

100% median

≥120% median

ROCE

100% target

100% vesting

TSR vs. S&P 500

Performance

equal to Index

≥Performance

equal to Index +

2% p.a.

outperformance

Gap to competition (where

applicable)

100% target

100% vesting

Vesting percentage

50%

100%

Executive Office

Executive Officers

2019

Grant

PSUs with a three year performance period

Value at grant 100% of base salary for the Executive Chairman and

the CEO

Vesting conditions:

Vesting conditions

Threshold

Target

TSR/EPS vs. peer group

100% median

≥120% median

ROCE

100% target

100% vesting

TSR vs. S&P 500

Performance

equal to Index

≥Performance

equal to Index +

2% p.a.

outperformance

Gap to competition (where

applicable)

100% target

100% vesting

Vesting percentage

50%

100%

Executive Office

Executive Officers

2020

Grant

PSUs with a three year performance period

Value at grant 100% of base salary for the Executive Chairman and

the CEO

Vesting conditions:

Vesting conditions

Threshold

Target

Threshold

Target

TSR/EPS vs. peer group

100% median

≥120% median

TSR/EPS vs. peer group

100% median

≥120% median

Vesting percentage

50%

100%

Gap to competition (where

applicable)

100% target

100% vesting

TSR vs. S&P 500

Performance

equal to Index

≥Performance

equal to Index +

2% p.a.

outperformance

Vesting percentage

100%

Vesting percentage

50%

100%

RSUs with a three year vesting period

RSUs with a one year vesting period

See note 8.3 to the consolidated financial statements for further details on PSUs.

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Management report

Global Stock Option Plan

Prior to the May 2011 annual general shareholders’ meeting

adoption of the ArcelorMittal Equity Incentive Plan described

above, ArcelorMittal’s equity-based incentive plan took the form

of a stock option plan known as the Global Stock Option Plan.

See note 8.3 to the consolidated financial statements for further

details on stock options.

Other benefits

In addition to the remuneration described above, other benefits

may be provided to senior management and, in certain cases,

other employees. These other benefits can include insurance,

housing (in cases of international transfers), car allowances and

tax assistance.

SOX 304 and clawback policy

Under Section 304 of the Sarbanes-Oxley Act, the SEC may

seek to recover remuneration from the CEO and CFO of the

Company in the event that it is required to restate accounting

information due to any material misstatement thereof or as a

result of misconduct in respect of a financial reporting

requirement under the U.S. securities laws (the “SOX

Clawback”).

Under the SOX Clawback, the CEO and the CFO may have to

reimburse ArcelorMittal for any short-term incentive or other

incentive-based or equity-based remuneration received during

the 12-month period following the first public issuance or filing

with the SEC (whichever occurs first) of the relevant filing, and

any profits realized from the sale of ArcelorMittal securities

during that 12-month period.

The Board of Directors, through its ARCG Committee, decided

in 2012 to adopt its own clawback policy (the “Clawback Policy”)

that applies to the members of the former GMB and to the

Executive Vice President of Finance of ArcelorMittal. In 2016,

the Clawback Policy was updated to reflect the Company’s

structural changes and now applies to the Executive Office and

the Executive Officers.

The Clawback Policy comprises cash short-term incentives and

any other incentive-based or equity-based remuneration, as well

as profits from the sale of the Company’s securities received

during the 12-month period following the first public issuance or

filing with the SEC (whichever first occurs) of the filing that

contained the material misstatement of accounting information.

For purposes of determining whether the Clawback Policy

should be applied, the Board of Directors will evaluate the

circumstances giving rise to the restatement (in particular,

whether there was any fraud or misconduct), determine when

any such misconduct occurred and determine the amount of

remuneration that should be recovered by the Company. In the

event that the Board of Directors determines that remuneration

should be recovered, it may take appropriate action on behalf of

the Company, including, but not limited to, demanding

repayment or cancellation of cash short-term incentives,

incentive-based or equity-based remuneration or any gains

realized as the result of options being exercised or awarded or

long-term incentives vesting. The Board may also choose to

reduce future remuneration as a means of recovery.

Employees

As of December 31, 2021, ArcelorMittal employs

approximately 158,000 people directly, as well as a large

number of contractors and part-time workers.

The table below sets forth the total number of employees by

segment for the past three years.

Segment

2021

2020

2019

NAFTA

13,410

13,138

27,988

Brazil

19,450

18,752

19,362

Europe

60,525

71,682

74,900

ACIS

58,438

58,178

62,986

Mining

4,426

4,289

4,397

Other activities

1,660

1,704

1,615

Total

157,909

167,743

191,248

ArcelorMittal employees in various parts of the world are

represented by trade unions and ArcelorMittal is a party to

collective bargaining agreements with employee organizations

in certain locations. The following description summarizes the

status of certain of these agreements and relationships.

The Company is committed to open, respectful and transparent

social dialogue at all of its operations, to strong employee

relations, and safe, healthy and quality working lives for all its

workers.

COVID-19 – Supporting the Company's people

Since ArcelorMittal’s creation, the health, safety and well-being

of its workforce has been the number one priority. Since 2020,

given the unprecedented global health crisis resulting from the

COVID-19 pandemic, that pledge has never been more

important. The virus spread across the globe and is present in

all the countries where ArcelorMittal produces steel. The

challenge and responsibility the Company therefore has, to

ensure the safety and well-being of its near 158,000 strong

workforce, is paramount.

ArcelorMittal has developed a COVID-19 governance structure

to ensure a regular flow of information between the leadership

and critical functional networks and task forces, which have

either been created for the current crisis or previously existed

and have been brought together more frequently.

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196

This structure is vital in establishing pandemic safety principles

(see —"Sustainable development—Management Theme #1:

Safety"), considering the impacts on ArcelorMittal`s people,

maintaining regular communication, acknowledging and

appreciating the incredible efforts and resilience of our

workforce, ensuring organization effectiveness, and closely

monitoring and supporting the most affected regions.

ArcelorMittal rigorously adhered to guidelines and

recommendations from the World Health Organization and the

governments of the countries in which it operates. Moreover, it

has implemented many measures at all operating sites to

proactively address health concerns and limit the possibility of

the virus spreading. These include ensuring the operations have

sufficient supplies of sanitation products and essential personal

protective equipment, strictly following social distancing

procedures, conducting enhanced and regular cleaning

operations and monitoring the health of the employees when

they enter and exit work premises.

ArcelorMittal also temporarily closed many offices, with people

working from home during lockdown conditions throughout the

year. This loss of social contact creates new challenges, and the

Company has taken the time to listen to and understand

people’s concerns and provide them with the support, advice

and guidance they need as they adjusted to new and unusual

working conditions.

The ArcelorMittal University continue to play a very important

role in the development of specific learning modules to build the

competencies and capabilities required by ArcelorMittal`s people

in dealing with the crisis worldwide. They provided training on

the key guidelines, remote working, managing through the crisis

and supporting people dealing with the stress and anxieties.

Remote, live sessions were held regularly at the global level

with nearly 18,000 in attendance. In My Virtual Campus, the

ArcelorMittal University online learning platform, nearly 64,000

active learners participated in over 282,000 hours of learning

across over 1,000 courses.

Employee development

Sourcing, developing and retaining the right people continues to

be a strategic priority for ArcelorMittal in building a high-

performing organization. The Company recognizes the world of

work has changed and the expectations of employees and

potential new talents have changed with it. The COVID-19

pandemic, with its health and economic impact, has perhaps

accelerated the importance of some factors (such as emotional

resilience), and the implementation of others (such as

digitalization) and has also reminded the Company of the

importance of certain values and behavior, including

strengthened focus on Diversity & Inclusion.

Communicating and connecting with the Company's employees

is certainly an area where it has made a concerted effort during

2021, through more proximity meetings and other means of

communication. Virtual meetings have been around for the past

20 years, but the explosion since 2020, through Teams, Zoom

and other collaboration vehicles has really increased the

connectivity of ArcelorMittal's people.

There continues to be a strong demand for the best talent and

ArcelorMittal wants to ensure it is considered as an aspirational

place to work. That means ensuring employees feel safe,

respected and valued. It also means building a culture that

constantly keeps employees committed, motivated, encouraged

to learn and eager to perform at their best.

Employee development, including succession planning and the

development of young talent, is also crucial in building a high-

performing organization. The Company aims to have a clear

career pathway for employees, supported with ongoing

initiatives to build their technical capabilities through training.

ArcelorMittal has programs designed to spot people with

potential and manage the succession of key roles, as part of its

overall strategic workforce planning process, which is overseen

by the ARCG Committee. Strategic workforce planning is a key

element of business unit quarterly reviews.

In 2021, the Company has continued to harness skills and

resources and has stepped up its efforts to identify and

accelerate the development and readiness of its High Potential

employees (HiPos) to take on increased responsibilities. This

has been achieved by having the right people in the right place

at the right time; identifying people for key succession plans;

anticipating and filling vacancies; ensuring a healthy and diverse

leadership pipeline; nurturing internally the generations of

tomorrow and preparing future leaders; encouraging individual

performance and making sustainable performance gains; and

ensuring the retention of HiPos, through acknowledgement,

empowerment, motivation and challenges.

An effective succession planning process is based on open

career discussions with HiPos. Every HiPo has a career

counselling discussion with his/her manager and HR, which

focuses on the ‘right casting for the role’ to determine fit,

readiness and match with individual drivers and motivations.

The outcome of this discussion is used in the succession

planning process.

For the accelerated development of HiPos, the Company has

developed Leadership Pipeline learning journeys, preparing

them for promotion. The programs are partly personalized,

based on assessments. They are customized and delivered

through a blended format of face-to-face (when available) and

digital.

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Management report

The Talent Acceleration Pool ("TAP") is an accelerated

development program for HiPos who have been identified deep

in the organization (below Manager) and who have potential to

reach at least Manager level in the organization. The HiPos are

provided consistent and structured development opportunities,

through assessments, career interviews, tailored individual

development plans and learning journeys to support the creation

of a pipeline of HiPo candidates for succession to Manager+

roles.

TAP 2 program (a new cohort) was successfully launched with

the revised approach for the program management and the

candidates development in the third quarter of 2021.

The TAP 2 program in 2021 included 78 participants from 21

nationalities, of which 23 were women (30%).

At the beginning of the COVID-19 pandemic, there were initial

challenges as we pivoted from the delivery of learning and

development in a traditional classroom format to expanding

access through digital learning. In 2021, we have seen a large

growth in active virtual learners throughout ArcelorMittal as we

have continued to expand to our global community. These active

learners invested an average of 4.4 hours each, a 20% increase

from 2020. An excellent example of this was the involvement of

over 60,000 employees worldwide in our global virtual Learning

Week in June 2021. The Company also offered world class

leadership programs to its talents and future leaders digitally.

Over 350 HiPos attended leadership journeys in 2021 to

prepare themselves for their next career steps.

Another important program is the Company's Group Mentoring

Program, which is designed to provide all ArcelorMittal

employees an opportunity to participate in a mentoring

relationship with a Group Mentor. By the end of 2021, there

were 135 mentors and 324 mentees active in the program.

In addition, in 2021 work continued with the first pilots of a

global Human Capital Management system which will provide

unification of the Company's employee systems around

recruitment, performance, succession planning, career

development and learning. This will provide the enhanced

infrastructure necessary to analyze data and identify areas for

continuous improvement in ArcelorMittal's global diversity and

inclusion efforts.

Speak Up +, the new global employee survey

For many years Speak Up! has been the group’s flagship

employee engagement survey, designed to assess

professionals and leadership opinion on how they feel about

working at ArcelorMittal, what the Company does well and, if

there are areas where they believe we fall short, how they can

be improved.

In 2021, ArcelorMittal launched the Speak Up + surveys, which

serve as the ongoing vehicle to support the Company’s leaders

in closely keeping a finger on the pulse of our organization, in a

rapidly changing environment. The goal is to understand how

the engagement of our people worldwide evolves – by regularly

listening to the aspirations and concerns of ArcelorMittal people

– and to empower leaders to spot and resolve potential issues

quickly.

The survey occurs multiple times throughout the year and

includes questions related to engagement, health & safety, well-

being, values and diversity & inclusion. The outcomes from each

Speak Up + survey are compared to multiple benchmarks,

internally and over-time, and externally against industry peers.

This enables the Company’s leaders to spot specific strengths

and risks, e.g. attrition risk, and to define actions to improve

employee engagement.

Concrete actions to address employees’ concerns are

continuously defined and implemented based on the outcomes

of the Speak Up + survey rounds to effectively drive employee’s

engagement.

Diversity and inclusion

ArcelorMittal values diversity as a way of bringing fresh

perspectives and experiences to the business and as part of its

ambition to be an employer of choice. The Company has a

presence in over 60 countries and employees from many more

and its diversity and inclusion policy aims to encompass

different cultures, generations, genders, ethnic groups,

nationalities, abilities, and social backgrounds.

ArcelorMittal’s senior management is committed to building a

more inclusive culture and recruiting, retaining, and promoting

more talented women. It also recognizes the increasing

expectations of stakeholders, including employees and

investors, to report on progress in this area. In 2020, the

Company benchmarked its diversity and inclusion policies

against other companies to identify gaps and opportunities,

engaged with several stakeholders on this topic and developed

a strategy to address this issue. The topic was thoroughly

discussed at the ARCG committee and had the full attention and

support of both the Executive Chairman and the CEO. As a

result of this initiative, the Company announced new plans to

double the number of women at leadership positions within the

next decade. By 2030, the aim is to reach 25% management

positions held by women.

To achieve this figure, the Company is reviewing its policies and

HR practices to give women employees greater flexibility to fit

work into their lives; it will tackle unconscious bias and

discrimination through training; and intend to consider at least

one woman (either internal or external) in its recruitment

shortlists for all professional and leadership positions. To

Management report

198

improve the gender balance in its leadership positions, the

Company's Executive Office will oversee an annual career

development planning process for high-potential women, and

will include a minimum of one woman in every senior

management succession plan. A newly established Diversity

and Inclusion Council oversees the Group's Diversity and

Inclusion ("D&I") performance and progress.

In 2021, 14% of management positions were held by women

and 56% of key positions have at least one woman assigned as

successor - those who are foreseen to take over senior

manager positions at General Managers level and above.

In line with the worldwide effort to increase gender diversity at

the board level, ArcelorMittal met its goal of increasing the

number of women on the Board of Directors to at least three by

the end of 2015. In 2021, four of the eleven positions on the

Board of Directors were held by women.

A number of programs are in place to develop women as

leaders. These are supported by initiatives including training

programs for women employees, mentoring and coaching,

networking, and role model involvement. This is aligned with a

commitment to support future leaders in science, technology,

engineering and mathematics ("STEM"). In 2021, the Company

ran initiatives in all segments, including the participation in the

TopWomenTech in Europe and partnership with Universities and

schools, campaigns and job fairs focused on attracting women

applicants with STEM backgrounds.

In 2021, to help foster a broader inclusive culture, the

ArcelorMittal University also conducted learning programs for

employees to build their understanding of how cultural

orientations affect attitudes and actions, and how they can

manage interactions between different cultural perspectives and

communication styles. A series of three workshops focusing on

Driving Inclusivity were held in October, November, and

December 2021 with over 1,100 attendees. The accompanying

sharepoint site registered over 3,100 views. Additionally, a

virtual program celebrating International Women’s Day

registered over 3,000 attendees.

Initiatives in a number of countries support people with

disabilities in the workplace. In Brazil, there is a robust Diversity

and Inclusion program. The program's governance is composed

by the Executive Committee, National Diversity and Inclusion

Committee and a Committee per each key area (Gender,

People with Disabilities, Racial, LGBTI+). Among the key

actions in Brazil during 2021, includes training of more than

1,000 people on inclusive leadership, individual accessibility

mapping and diverse learning programs. In Europe, launching of

the D&I campaign, participation in career fairs and partnership

with universities and schools and multiple learning activities. In

2021, the program 'Women of Steel' from ArcelorMittal Mexico,

received a recognition in the category of Intersectoral Alliances,

thanks to the 36 alliances achieved in its 11 years in favor of the

development of Lázaro Cárdenas and other communities,

benefiting more than 43,000 people.

Collective Labor Agreements

The Joint Global Health and Safety Agreement signed in 2008

between the Company and the IndustriALL union at the

European and international level (formerly European and

International Metalworkers Federations, respectively) and

United Steelworkers Union in North America remained in effect

in 2021. This agreement recognizes the vital role played by

trade unions in improving health and safety. It sets out minimum

standards for every site the Company operates with the

objective of achieving world-class performance. As a result of

this agreement, the Joint Global Health and Safety ("H&S")

Committee, composed of 13 representatives of management

and the unions was created to help ArcelorMittal's steel and

mining activities to further improve their health and safety

performance. Among its main priorities, it focuses on the

overview deployment and the monitoring of the compliance of

local joint H&S committees, the development of guidelines to

progress and training programs

In 2021, due to the COVID-19 pandemic and the worldwide

sanitary crisis, three virtual meetings were organized throughout

the year in order to discuss transversal specific topics with

regard to the health and the safety of our people. In addition,

other safety training programs, including the "Safety Leadership"

and "Take Care" Trainings continued to be rolled out in 2021,

including using some virtual sessions when sanitary situation

required it, in order to support the “Journey to Zero” program

aimed at reducing the amount of injuries and fatalities in the

Company to zero. See “Business overview—Sustainable

development—Management Theme #1: Health and safety.”

In 2021, collective labor agreements (“CLAs”) were entered into

or renewed in various entities and countries.

At ArcelorMittal Long Products Canada, unionized employees at

Contrecoeur West continue to work under an agreement with

the United Steel Workers ("USW") renewed in July 2020 and

expiring in July 2026. The six-year labor agreement ratified in

February 2016, covering Contrecoeur East and Longueuil

facilities remains valid until January 31, 2022. The positive vote

of the workers assembly on February 27, 2022 concluded the

CLA negotiations for a new six-year CLA ending the labor

dispute which began on February 2, 2022. It ensured a return to

normal operations at the Contrecoeur East and Longueuil

facilities on February 28, 2022. The collective agreement with

USW covering the Contrecoeur Scrap Recycling Center

employees renewed in April 2016 for a six-year term remains

valid. The collective agreement with USW at Hamilton-East

Wire, renewed in 2016 for a five-year term expired in July 31,

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Management report

2021 - the negotiation with the union started in June 2021 and a

new collective agreement was signed in July 2021, expiring on

May 30, 2026. The agreement with USW at St-Patrick Wire

renewed in 2017 for a six-year term (expiring on December 31,

2023) also remains valid.

ArcelorMittal Mexico and the National Miners Union agreed to a

new, one-year contract effective August 1, 2021. ArcelorMittal

Mexico continues to explore opportunities with the union to

improve workforce productivity, efficiency and competitiveness.

The North America branch of ArcelorMittal Tubular products

renewed most of its labor agreements in 2021. After a strike in

November 2021, following the expiration of the labor agreement

which was in effect from 2017, ArcelorMittal Tubular Products

Shelby plant reached an agreement with the union and signed

the new four-year labor contract valid through October 31, 2025.

ArcelorMittal Tubular Products Woodstock ratified a new three-

year contract with UNIFOR on February 20, 2021 which will

expire on April 1, 2024.

ArcelorMittal Tubular Products Brampton signed a new four-year

agreement with USW on December 13, 2021 which will expire

on September 30, 2025.

At ArcelorMittal Tubular Products Monterrey, the collective

agreement with the National Federation of Independent Unions

was renewed effective February 15, 2021 for a one-year period.

Negotiations with the union for the new period will take place in

February 2022.

In Brazil, 2021 was also a challenging year due to the continuity

of the COVID-19 pandemic. Vaccination programs enabled to

organize a hybrid return to work with the implementation of a

series of measures adapted to work environments and in

compliance with the sanitary protocols in Brazil.

Throughout the year, Brazil Long segment renewed 14 collective

agreements and conventions, most of them replacing inflation,

which throughout the year varied between 7.7% and 11.08%. In

addition, the Company signed collective agreements on the

Bank of Hours and Work Regime. Collective agreements last for

one year, maturing in several months.

For Tubarão and Vega do Sul, high inflation rate and a booming

steel market weighed in the negotiations that also led to the

renewal of CLAs. In Tubarão, an inflation rate of 10.78% as well

as the allocation of meal tickets were incorporated in the

agreement. In Vega do Sul, the new agreement included an

inflation rate of 10.96% and a one-time bonus. The negotiations

for ArcelorMittal Contagem led to a salary increase at the

current rate of inflation (5.39%) for the period.

In Argentina, a salary increase of 50.2% was granted to

employees, in line with the inflation projected for the year 2021.

Until December 2021, the Company has implemented 35.2%

increase and the rest will be implemented in the first quarter of

2022. In 2021, two different CLAs were effective for different

categories of employees and regions. All CLAs have a duration

of one year beginning in April of each year.

In Europe, most of the CLAs were renewed and new

agreements were entered into. In France, a one-year salary

agreement covering 2022 was finalized in December 2021

covering flat products entities and some AMDS entities. For

other French entities, salary agreement negotiations will start

early 2022. Regular meetings have been held with national

representatives of the main trade unions to share information

especially about the impact of the COVID-19 pandemic on

ArcelorMittal's activities and employees, and also addressing

the key challenges that the steel industry is facing. A major

social agreement about working time organization and

management has been renewed for 3 years. In some entities,

company agreements about working from home policy have

been signed and implemented during the year.

In Luxembourg, the collective labor agreement signed in June

2019 with the representatives from the two unions in the

Company remains active. In January 2021, a Job Retention

Plan was signed with the Government and the unions. This

tripartite agreement is valid until the end of 2025. The

commitments are mainly related to investments, unemployment

(labor pool) and pre-retirement.

In Belgium, the economic crisis and health crisis for last two

years resulted in substantial efforts from our employees.

ArcelorMittal Belgium faced some social actions in Ghent in

September 2021, which was a trigger to start CLA negotiations

and discuss the concerns of the employees. CLA was focused

on 4 main elements: respect, staffing and workload, working

conditions and financial compensation. A commitment has been

made and an action plan was set up with an implementation in

the coming years.

In Germany, the main focus was on managing the COVID-19

pandemic within the high and increased production volume.

health and safety measures have been embedded into the

operational everyday life. Still at the end of 2021, there was

increased pressure due to the fourth wave with critical situations

in some sites to reach the necessary shift strengths. Social

partners met twice in the social dialogue group (digital and one

in person), comprised of both employer and employee

representatives. Negotiations on CLA were closed at the

beginning of 2021 without a structural increase. Only bonus

payments have been agreed for 2021 and 2022. New

negotiations will start during the second half of 2022.

Management report

200

Throughout the year, the union supported the Company in its

transformation plans within the political landscape.

In 2021, social dialogue at ArcelorMittal Poland was developed

in many areas. The new areas of cooperation are in the field of

taking care of employees covered by business transformation

and securing employees during the COVID-19 pandemic.

Negotiations with trade unions on the new CLA framework were

completed. ArcelorMittal Poland has also signed a CLA for 2021

and an agreement on mitigating the social effects resulting from

the implementation of restructuring processes. The agreement

defines the rules for taking care of employees from reduced

positions. Social Fund regulations for 2022 have been agreed

with trade unions. Negotiations on CLA for year 2022 have

started. Throughout 2021, regular meetings with trade unions

took place to cooperate on COVID-19 pandemic activities to

protect workers and production. Proximity meeting in plants with

CEO were organized in the sanitary regime. Cooperation with

trade unions is carried out at the national level supporting the

transformation of the steel industry.

In Spain, as in the rest of the world, 2021 has been strongly

influenced by the effects of the COVID-19 pandemic. In the

context deriving from the 2020 health and financial crises, labor

relations at ArcelorMittal have been characterized by a focus on

promoting social dialogue, in spite of the objective difficulties.

Management and unions have had to address the challenges

posed by the uncertainties affecting the Company's activities, in

a permanent effort to adapt to the circumstances and

demonstrate flexibility, which has facilitated the temporary layoff

plan (ERTE) in effect since 2009 and extended, through an

agreement with the employee representatives, up to December

31, 2021. During 2021, signed CLAs were implemented and the

remaining CLAs were signed at the sites where this process had

not yet been completed. Following the Memorandum of

Understanding signed by ArcelorMittal with the Spanish

Government in July 2021 to foster decarbonization, discussions

have been initiated with the unions to address the labor

implications of this strategy. At the end of the year, there were

some important social challenges pending, not only relating to

the above-mentioned decarbonization strategy, but also relating

to the expiry of the CLAs and to the aforementioned temporary

layoff plan.

Despite the sanitary constraints due to the COVID-19 pandemic

crisis, regular online meetings were organized throughout the

year in order to inform the European Works Council ("EWC")

representatives about the health and safety and business

situation of the Company's operations in Europe, including the

EWC bureau (10), the Select Committee (3) and the Plenary

Assembly.

In 2019, ArcelorMittal and the EWC began negotiations aimed at

revising some of the elements of the agreement signed in 2007.

The negotiations started in early November 2019 and were

expected to be finalized in the first quarter of 2020. Due to the

COVID-19 pandemic (lockdown and sanitary restrictions),

negotiations were put on hold and then relaunched in 2021. A

two-day meeting with IndustriAll Europe and Unions federations

was organized in September 2021, after several discussions

with IndustriAll Europe’s representatives and the negotiations

are expected to come to a conclusion by early 2022.

The employee situation in Ukraine remained stable in 2021.

Trade unions organized four peaceful non-numerous protest

actions with request for a salary increase. The situation was

resolved via a constructive dialogue and continuous negotiation

process.

In South Africa, out of the 6,726 employees of the Company,

4,608 employees, who are part of the bargaining unit, are

covered by a deferred CLA concluded in 2020 with the

recognized unions NUMSA and Solidarity which expires in

March 2022. The agreement included a remuneration

adjustment of 5% in November 2020 and 2% in April 2021.

NUMSA renounced this agreement and subsequently declared a

dispute of refusal to bargain with the Center for Dispute

Resolution (CDR). At the conciliation session, ArcelorMittal

South Africa raised a jurisdictional issue, arguing that CDR did

not have jurisdiction to hear the matter since NUMSA did not

follow the internal dispute procedure stipulated in the

Recognition Agreement. Upon issuing the advisory award, the

CDR commissioner advised NUMSA to follow the Recognition

Agreement with a view to requesting an internal dispute meeting

and thereby withdrawing the current dispute. Upon receiving the

advisory award, NUMSA provided ArcelorMittal South Africa with

notice that it would commence strike action. ArcelorMittal South

Africa sought relief in the Labor Court on an urgent basis to

obtain an urgent Court injunction of the impending strike action.

After hearing arguments from both parties, the Labor Court

agreed with ArcelorMittal South Africa’s view that NUMSA had

not followed the Recognition Agreement and thus granted the

injunction requested by ArcelorMittal South Africa. NUMSA did

not take any further action on the matter, most likely deciding to

raise the issue again during formal negotiations in 2022.

ArcelorMittal Temirtau's CLAs were expiring at the end of 2021.

ArcelorMittal Temirtau and the trade unions entered into new

CLAs for three years valid as from January 2022.

In 2021, the Mining segment maintained productive social

dialogue and relationships with its trade unions and

communities where there are operations. The CLA with USW in

Canada was renegotiated in 2021 and remains in force. As part

of the negotiations in Canada with USW, a four week strike

occurred, which furthermore underlined the need for continuous

dialogue with the Company's employees and the unions. The

Company expects productive continuous interactions in the next

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Management report

years. The agreement with UWUL in Liberia was under

negotiation and is expected to be closed in the first quarter of

2022.

Corporate governance

This section describes the corporate governance practices of

ArcelorMittal for the year ended December 31, 2021.

Board of Directors and senior management

ArcelorMittal is governed by a Board of Directors and managed

by the senior management. As described in "Directors and

senior management" above, ArcelorMittal’s senior management

was comprised of the Executive Office - comprising the

Executive Chairman, Mr. Lakshmi N. Mittal and the CEO, Mr.

Aditya Mittal. The Executive Office was supported by a team of

seven other Executive Officers, who together encompass the

key regions and corporate functions.

A number of corporate governance provisions in the Articles of

Association of ArcelorMittal reflect provisions of the

Memorandum of Understanding signed on June 25, 2006 (prior

to Mittal Steel Company N.V.’s merger with Arcelor), amended in

April 2008 and which mostly expired on August 1, 2009. For

more information about the Memorandum of Understanding, see

“Additional information—Material contracts—Memorandum of

Understanding”.

ArcelorMittal fully complies with the 10 Principles of Corporate

Governance of the Luxembourg Stock Exchange. This is

explained in more detail in “—Other corporate governance

practices” below. ArcelorMittal also complies with the New York

Stock Exchange Listed Company Manual as applicable to

foreign private issuers. There are no significant differences

between the corporate governance practices of ArcelorMittal

and those required of a U.S. domestic issuer under the Listed

Company Manual of the New York Stock Exchange.

Board of Directors

11 members

9 non-executive

directors

7 independent

directors

2 executive

directors (CEO

and Executive

Chairman)

36% women

64% men

8 average years

on the Board

58 average age

of directors

The Board of Directors is in charge of the overall governance

and direction of ArcelorMittal. It is responsible for the

performance of all acts of administration necessary or useful in

furtherance of the corporate purpose of ArcelorMittal, except for

matters reserved by Luxembourg law or the Articles of

Association to the general meeting of shareholders. The Articles

of Association provide that the Board of Directors is composed

of a minimum of three and a maximum of 18 members.

The Articles of Association provide that directors are elected and

removed by the general meeting of shareholders by a simple

majority of votes cast. Other than as set out in the Company’s

Articles of Association, no shareholder has any specific right to

nominate, elect or remove directors. Directors are elected by the

general meeting of shareholders for three-year terms. In the

event that a vacancy arises on the Board of Directors for any

reason, the remaining members of the Board of Directors may

by a simple majority elect a new director to temporarily fulfill the

duties attaching to the vacant post until the next general

meeting of the shareholders.

For further information on the composition of the Board of

Directors, including the expiration of each Director’s term and

the period during which each Director has served, see section

"—Directors and senior management " above.

Mr. Lakshmi N. Mittal was elected Chairman of the Board of

Directors on May 13, 2008. Mr. Lakshmi N. Mittal was also

ArcelorMittal’s CEO until February 11, 2021. Mr. Lakshmi N.

Mittal was re-elected to the Board of Directors for a three-year

term at the annual general meeting of shareholders on June 13,

2020.

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202

A director is considered “independent” if:

(a)he or she is independent within the meaning of the

New York Stock Exchange Listed Company Manual, as

applicable to foreign private issuers,

(b)he or she is unaffiliated with any shareholder owning or

controlling more than two percent of the total issued

share capital of ArcelorMittal, and

(c)the Board of Directors makes an affirmative

determination to this effect.

For these purposes, a person is deemed affiliated to a

shareholder if he or she is an executive officer, a director who

also is an employee, a general partner, a managing member or

a controlling shareholder of such shareholder. The 10 Principles

of Governance of the Luxembourg Stock Exchange, which

constitute ArcelorMittal's domestic corporate governance code,

require ArcelorMittal to define the independence criteria that

apply to its directors, which are described in article 8.1 of its

Articles of Association.

Specific characteristics of the director role

Required share

ownership

Lead Independent Director -

minimum of 6,000 ordinary

Non-executive directors -

minimum of 4,000 ordinary

Maximum 12

year service

(independent

directors)

May not serve on

the boards of directors of

more than four

publicly listed companies (non-

executive directors)

Required to sign the

Company’s Code

of Business

Conduct and confirm their

adherence annually

The Company’s Articles of Association do not require directors

to be shareholders of the Company. The Board of Directors

nevertheless adopted a share ownership policy on October 30,

2012, that was amended on November 7, 2017, considering that

it is in the best interests of all shareholders for all non-executive

directors to acquire and hold a minimum number of ArcelorMittal

ordinary shares in order to better align their long-term interests

with those of ArcelorMittal’s shareholders. The Board of

Directors believes that this share ownership policy will result in a

meaningful holding of ArcelorMittal shares by each non-

executive director, while at the same time taking into account

the fact that the share ownership requirement should not be

excessive in order not to unnecessarily limit the pool of available

candidates for appointment to the Board of Directors. Directors

must hold their shares directly or indirectly, and as sole or joint

beneficiary owner (e.g., with a spouse or minor children), at the

latest within three years of his or her election to the Board of

Directors. Each director will hold the shares acquired on the

basis of this policy for so long as he or she serves on the Board

of Directors. Directors purchasing shares in compliance with this

policy must comply with the ArcelorMittal Insider Dealing

Regulations and, in particular, refrain from trading during any

restricted period, including any such period that may apply

immediately after the Director’s departure from the Board of

Directors for any reason.

On October 30, 2012, the Board of Directors also adopted a

policy that places limitations on the terms of independent

directors as well as the number of directorships that directors

may hold in order to align the Company’s corporate governance

practices with best practices in this area (as highlighted in the

table above). Nevertheless, the Board of Directors may, by way

of exception to this rule, make an affirmative determination, on a

case-by-case basis, that a Director may continue to serve

beyond the 12-year rule if the Board of Directors considers it to

be in the best interest of the Company based on the contribution

of the Director involved taking into consideration the balance

between the knowledge, skills, experience of the director and

the need for renewal of the Board.

As membership of the Board of Directors represents a

significant time commitment, the policy requires both executive

and non-executive directors to devote sufficient time to the

discharge of their duties as a Director of ArcelorMittal. Directors

are therefore required to consult with the Chairman and the

Lead Independent Director before accepting any additional

commitment that could conflict with or impact the time they can

devote to their role as a Director of ArcelorMittal. A non-

executive Director’s service on the board of directors of any

subsidiary or affiliate of ArcelorMittal or of any non-publicly listed

company is not taken into account for purposes of complying

with the service limitation.

Although non-executive directors of ArcelorMittal who change

their principal occupation or business association are not

necessarily required to leave the Board of Directors, the policy

requires each non-executive director, in such circumstances, to

promptly inform the Board of Directors of the action he or she is

contemplating. Should the Board of Directors determine that the

contemplated action would generate a conflict of interest, such

non-executive director would be asked to tender his or her

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Management report

resignation to the Chairman of the Board of Directors, who

would decide to accept the resignation or not.

None of the members of the Board of Directors, including the

executive director, have entered into service contracts with

ArcelorMittal or any of its subsidiaries that provide for any form

of remuneration or for benefits upon the termination of their

term. All non-executive Directors of the Company signed the

Company’s Appointment Letter, which confirms the conditions of

their appointment by the General Meeting of the Shareholders

including compliance with certain non-compete provisions, the

10 Principles of Corporate Governance of the Luxembourg

Stock Exchange and the Company’s Code of Business Conduct.

The remuneration of the members of the Board of Directors is

determined on a yearly basis by the annual general meeting of

shareholders.

Share transactions by management

In compliance with laws prohibiting insider dealing, the Board of

Directors of ArcelorMittal has adopted insider dealing

regulations, which apply throughout the ArcelorMittal group.

These regulations are designed to ensure that insider

information is treated appropriately within the Company and

avoid insider dealing and market manipulation. Any breach of

the rules set out in this procedure may lead to criminal or civil

charges against the individuals involved, as well as disciplinary

action by the Company.

Operation

General

The Board of Directors and the Board committees may engage

the services of external experts or advisers as well as take all

actions necessary or useful to implement the Company’s

corporate purpose. The Board of Directors (including its three

committees) has its own budget, which covers functioning costs

such as external consultants, continuing education activities for

directors and travel expenses.

Meetings

The Board of Directors meets when convened by the Chairman

of the Board or any two members of the Board of Directors. The

Board of Directors holds physical meetings at least on a

quarterly basis as five regular meetings are scheduled per year.

The Board of Directors holds additional meetings if and when

circumstances require, in person or by teleconference and can

take decisions by written circulation, provided that all members

of the Board of Directors agree.

In 2021 the Board of Directors held 5 meetings with 100% of the

average attendance rate.

5 meetings

(2021)

100% Average

attendance rate

In order for a meeting of the Board of Directors to be validly

held, a majority of the directors must be present or represented,

including at least a majority of the independent directors. In the

absence of the Chairman, the Board of Directors will appoint by

majority vote a chairman for the meeting in question. The

Chairman may decide not to participate in a Board of Directors’

meeting, provided he has given a proxy to one of the directors

who will be present at the meeting. For any meeting of the

Board of Directors, a director may designate another director to

represent him or her and vote in his or her name, provided that

the director so designated may not represent more than one of

his or her colleagues at any time.

Each director has one vote and none of the directors, including

the Chairman, has a casting vote. Decisions of the Board of

Directors are made by a majority of the directors present and

represented at a validly constituted meeting, except for the

decisions of the Board of Directors relating to the issue of any

financial instruments carrying or potentially carrying a right to

equity pursuant to the authorization conferred by article 5.5 of

the Articles of Association, which shall be taken by a majority of

two-thirds of the directors present or represented at a validly

constituted meeting.

Lead Independent Director

Mr. Bruno Lafont was elected by the Board of Directors as

ArcelorMittal's Lead Independent Director and re-elected as a

director for a three-year term at ArcelorMittal AGM held on June

13, 2020.

The agenda of each meeting of the Board of Directors is

decided jointly by the Chairman of the Board of Directors and

the Lead Independent Director.

Separate meetings of independent directors

The independent members of the Board of Directors may

schedule meetings outside the presence of non-independent

directors. Five meetings of the independent directors outside the

presence of management were held in 2021.

Annual self-evaluation

The Board of Directors decided in 2008 to start conducting an

annual self-evaluation of its functioning in order to identify

potential areas for improvement. The first self-evaluation

process was carried out in early 2009. The self-evaluation

process includes structured interviews between the Lead

Independent Director and each director and covers the overall

performance of the Board of Directors, its relations with senior

Management report

204

management, the performance of individual directors, and the

performance of the committees. The process is supported by

the Company Secretary under the supervision of the Chairman

and the Lead Independent Director. The findings of the self-

evaluation process are examined by the ARCG Committee and

presented with recommendations from the ARCG Committee to

the Board of Directors for adoption and implementation.

Suggestions for improvement of the Board of Directors’ process

based on the prior year’s performance and functioning are

implemented during the following year.

The 2021 Board of Directors’ self-evaluation was completed by

the Board on January 25, 2022. The Board of Directors was of

the opinion that it and the management had cooperated

successfully during 2021. Strong focus was given on health and

safety, sustainability, on JV performance and structure, on

shareholders returns including share buyback. on policies

including incorporating of ESG criteria and targets in the short-

term and long term incentive structure.The Board of Directors

reviewed the practical implementation of the governance

structure and thought it was working well. The Board set new

priorities for discussion and review and identified a number of

priority topics for 2022.

The Board of Directors believes that its members have the

appropriate range of skills, knowledge and experience, as well

as the degree of diversity necessary to enable it to effectively

govern the business. The Board of Directors composition is

reviewed on a regular basis and additional skills and experience

are actively searched for in line with the expected development

of ArcelorMittal’s business as and when appropriate.

Required skills, experience and other personal characteristics

Diverse skills, backgrounds, knowledge, experience, geographic

location, nationalities and gender are required in order to

effectively govern a global business the size of the Company’s

operations. The Board of Directors and its committees are

therefore required to ensure that the Board has the right balance

of skills, experience, independence and knowledge necessary to

perform its role in accordance with the highest standards of

governance.

The Company’s directors must demonstrate unquestioned

honesty and integrity, preparedness to question, challenge and

critique constructively, and a willingness to understand and

commit to the highest standards of governance. They must be

committed to the collective decision-making process of the

Board of Directors and must be able to debate issues openly

and constructively, and question or challenge the opinions of

others. Directors must also commit themselves to remain

actively involved in Board decisions and apply strategic thought

to matters at issue. They must be clear communicators and

good listeners who actively contribute to the Board in a collegial

manner. Each director must also ensure that no decision or

action is taken that places his or her interests before the

interests of the business. Each director has an obligation to

protect and advance the interests of the Company and must

refrain from any conduct that would harm it.

In order to govern effectively, non-executive directors must have

a clear understanding of the Company’s strategy, and a

thorough knowledge of the ArcelorMittal group and the

industries in which it operates. Non-executive directors must be

sufficiently familiar with the Company’s core business to

effectively contribute to the development of strategy and monitor

performance.

With specific regard to the non-executive directors of the

Company, the composition of the group of non-executive

directors should be such that the combination of experience,

knowledge and independence of its members allows the Board

to fulfill its obligations towards the Company and other

stakeholders in the best possible manner.

The ARCG Committee ensures that the Board of Directors is

comprised of high-caliber individuals whose background, skills,

experience and personal characteristics enhance the overall

profile of the Board and meets its needs and diversity

aspirations by nominating high quality candidates for election to

the Board by the general meeting of shareholders.

Board profile

The key skills and experience of the directors, and the extent to

which they are represented on the Board of Directors and its

committees, are set out below. In summary, the non-executive

directors contribute:

International

and operational

experience

Understanding

of the industry

sectors in which

ArcelorMittal

operates

Knowledge of

global capital

markets and being

a company listed in

several

jurisdictions

Understanding of

the health, safety,

environmental,

political and

community

challenges that

ArcelorMittal faces

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Management report

Renewal

The Board of Directors plans for its own succession, with the

assistance of the ARCG Committee. In doing this, the Board of

Directors:

•considers the skills, backgrounds, knowledge,

experience and diversity of geographic location,

nationality and gender necessary to allow it to meet the

corporate purpose;

•assesses the skills, backgrounds, knowledge,

experience and diversity currently represented;

•identifies any inadequate representation of those

attributes and agrees the process necessary to ensure

a candidate is selected who brings them to the Board

of Directors; and

•reviews how Board performance might be enhanced,

both at an individual director level and for the Board as

a whole.

The Board believes that orderly succession and renewal is

achieved through careful planning and by continuously

reviewing the composition of the Board.

When considering new appointments to the Board, the ARCG

Committee oversees the preparation of a position specification

that is provided to an independent recruitment firm retained to

conduct a global search, taking into account, among other

factors, geographic location, nationality and gender. In addition

to the specific skills, knowledge and experience required of the

candidate, the specification contains the criteria set out in the

ArcelorMittal Board profile.

Diversity

In line with the worldwide effort to increase gender diversity on

the boards of directors of listed and unlisted companies, the

Board met its goal of increasing the number of women on the

Board to at least three by the end of 2015 with the election of

Mrs. Karyn Ovelmen in May 2015. Out of 11 members of the

Board of Directors, women represent 36% in 2021. The

ArcelorMittal Board’s diversity not only relates to gender, but

also to the region, background and industry of its members.

Director induction, training and development

The Board considers that the development of the directors’

knowledge of the Company, the steel-making and mining

industries, and the markets in which the Company operates is

an ongoing process. To further bolster the skills and knowledge

of directors, the Company set up a continuous development

program in 2009.

Upon his or her election, each new non-executive director

undertakes an induction program specifically tailored to his or

her needs and includes ArcelorMittal’s long-term vision centered

on the concept of “Safe Sustainable Steel”.

The Board’s development activities include the provision of

regular updates to directors on each of the Company’s products

and markets. Non-executive directors may also participate in

training programs designed to maximize the effectiveness of the

directors throughout their tenure and link in with their individual

performance evaluations. The training and development

program may cover not only matters of a business nature, but

also matters falling into the environmental, social and

governance area.

Structured opportunities are provided to build knowledge

through initiatives such as visits to plants and mine sites and

business briefings provided at Board meetings. Non-executive

directors also build their Company and industry knowledge

through the involvement of the Executive Office and other senior

employees in Board meetings. Business briefings, site visits and

development sessions underpin and support the Board’s work in

monitoring and overseeing progress towards the corporate

purpose of creating long-term shareholder value through the

development of the ArcelorMittal business in steel and mining.

The Company therefore continuously builds directors’

knowledge to ensure that the Board remains up-to-date with

developments within the Company’s segments, as well as

developments in the markets in which the Company operates.

During the year, non-executive directors participated in the

following activities:

•comprehensive business briefings intended to provide

the directors with a deeper understanding of the

Company’s activities, environment, key issues and

strategy of the Company’s segments. These briefings

are provided to the Board of Directors by senior

executives, including Executive Office members. The

briefings provided during the course of 2021 covered

health and safety processes, cyber security, risk

management, corporate responsibility, carbon

reduction strategy in steelmaking, capital allocation

process and strategy. Business briefings took place at

Board and committee meetings;

•briefing meetings with the Company executives in

charge of specific business segments or markets;

•development sessions on specific topics of relevance,

such as health and safety, commodity markets, HR,

investor relations, accounting, the world economy,

changes in corporate governance standards, directors’

duties and shareholder feedback.

The ARCG Committee oversees director training and

development. This approach allows induction and learning

Management report

206

opportunities to be tailored to the directors’ committee

memberships, as well as the Board of Directors' specific areas

of focus. In addition, this approach ensures a coordinated

process in relation to succession planning, Board renewal,

training, development and committee composition, all of which

are relevant to the ARCG Committee’s role in securing the

supply of talent to the Board.

Board of Directors committees

The Board of Directors has three committees:

•the Audit & Risk Committee,

•the ARCG Committee, and

•the Sustainability Committee.

Audit & Risk Committee

4 members

(100%

independent)

6 meetings

(2021)

In 2021, 6 meetings of the Audit & Risk Committee were held

with an attendance rate of 100%.

In 2015, the Board decided to combine the Audit Committee with

the Risk Management Committee in order to provide their

members with a more holistic view of ArcelorMittal’s current

governance, risks and control systems.

The primary function of the Audit & Risk Committee is to assist

the Board in fulfilling its oversight responsibilities by reviewing:

•the integrity of the financial reports and other financial

information provided by the Company to any

governmental body or the public;

•the Company’s compliance with legal and regulatory

requirements;

•the registered public accounting firm’s (Independent

Auditor) qualifications and independence;

•the Company’s system of internal control regarding

finance, accounting, legal compliance, ethics and risk

management that management and the Board have

established;

•the Company’s auditing, accounting and financial

reporting processes generally;

•the identification and management of risks to which the

ArcelorMittal group is exposed; and

•conducting investigations into any matters, including

whistleblower complaints, within its scope of

responsibility and obtaining advice from outside legal,

accounting, or other advisers, as necessary, to perform

its duties and responsibilities.

The Audit & Risk Committee must be composed solely of

independent members of the Board of Directors. The members

are appointed by the Board of Directors each year after the

annual general meeting of shareholders. The Audit & Risk

Committee comprises four members, all of whom must be

independent under the Company’s corporate governance

guidelines, the New York Stock Exchange (NYSE) standards as

applicable to foreign private issuers and the 10 Principles of

Corporate Governance of the Luxembourg Stock Exchange.

The Audit & Risk Committee makes decisions by a simple

majority with no member having a casting vote.

At least one member must qualify as an "audit committee

financial expert” as defined by the SEC and determined by the

Board.

At least one member must qualify as an Audit & Risk Committee

“risk management expert” having experience in identifying,

assessing, and managing risk exposures of large, complex

companies.

The Audit & Risk Committee currently consists of 4 members:

Mrs. Karyn Ovelmen, Mr. Bruno Lafont, Mr. Karel de Gucht and

Mr. Etienne Schneider, each of whom is an independent Director

according to the NYSE standards and the 10 Principles of

Corporate Governance of the Luxembourg Stock Exchange.

The Chairman of the Audit & Risk Committee is Mrs. Ovelmen

who is an “audit committee financial expert” as defined by the

SEC.

Please see “Directors and senior management—–Board of

Directors” above for Mrs. Ovelmen's experience.

According to its charter, the Audit & Risk Committee is required

to meet at least four times a year. The Audit & Risk Committee

performs an annual self-evaluation and completed its 2021 self-

evaluation on January 25, 2022. The charter of the Audit & Risk

Committee is available from ArcelorMittal upon request.

Appointments, Remuneration and Corporate Governance

Committee (former ARCGS Committee)

4 members

(100%

independent)

9 meetings

(2021)

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Management report

In 2021, 9 meetings of the ARCG Committee were held, with an

attendance rate of 100%.

The ARCG Committee is comprised of four directors, each of

whom is independent under the New York Stock Exchange

standards as applicable to foreign private issuers and the 10

Principles of Corporate Governance of the Luxembourg Stock

Exchange.

The members are appointed by the Board of Directors each

year after the annual general meeting of shareholders. The

ARCG Committee makes decisions by a simple majority with no

member having a casting vote.

The Board of Directors has established the ARCG Committee

to:

•determine, on its behalf and on behalf of the

shareholders within agreed terms of reference,

ArcelorMittal’s compensation framework, including

short and long term incentives for the CEO, the

Executive Chairman and for the seven other Executive

Officers;

•review and approve succession and contingency plans

for key managerial positions at the level of the

Executive Officers;

•consider any candidate for appointment or

reappointment to the Board of Directors at the request

of the Board of Directors and provide advice and

recommendations to it regarding the same;

•evaluate the functioning of the Board of Directors and

monitor the Board of Directors’ self-evaluation process;

•assess the roles of the Chairman and CEO and

deliberate on the merits of the Board’s leadership

structure to ensure that the most efficient and

appropriate structure is in place;

•develop, monitor and review corporate governance

principles and corporate responsibility policies

applicable to ArcelorMittal, as well as their application

in practice; and

•review the company’s sustainable development plan

and associated management systems and ensure the

group is well positioned to meet the evolving

expectations of stakeholders, including investors,

customers, regulators, employees and communities.

During its meeting of May 8, 2018, the Board renewed its

emphasis on four key areas (health & safety, environment and

community relations, climate change and social issues) and

added these to the scope of the ARCG Committee to ensure a

Board level review of these important topics. Accordingly, the

ARCG Committee was renamed the ARCGS Committee

("Appointments, Remuneration, Corporate Governance and

Sustainability Committee") to highlight the Company’s focus on

these key areas. During its meeting of July 27, 2021, the

Appointment, Remuneration, Corporate Governance and

Sustainability Committee became again ARCG Committee and

the new Sustainability Committee was created. As a result,

ArcelorMittal complies with the new Principle 9 on companies'

corporate social responsibility introduced subsequently to the

revision of the 10 Principles of the Luxembourg Stock

Exchange. According to Recommendation 9.3 under the

Principles, the Board shall regularly consider the Company's

non-financial risks, including social and environmental risks.

The ARCG Committee’s principal criteria in determining the

compensation of executives is to encourage and reward

performance that will lead to long-term enhancement of

shareholder value. The ARCG Committee may seek the advice

of outside experts.

The four members of the ARCG Committee are Mr. Bruno

Lafont, Mrs. Suzanne P. Nimocks, Mrs. Clarissa Lins and Mr.

Tye Burt, each of whom is independent in accordance with the

NYSE standards applicable to foreign private issuers and the 10

Principles of Corporate Governance of the Luxembourg Stock

Exchange. The Chairman of the ARCG Committee is Mr. Lafont.

The ARCG Committee is required to meet at least three times a

year.

The ARCG Committee performs an annual self-evaluation and

completed its 2021 self-evaluation on January 25, 2022.

The charter of the ARCG Committee is available from

ArcelorMittal upon request.

Succession management

Succession management at ArcelorMittal is a systematic,

structured process for identifying and preparing employees with

potential to fill key organizational positions, should the position

become vacant. This process applies to all ArcelorMittal key

positions up to and including the Executive Office. Succession

management aims to ensure the continued effective

performance of the organization by providing for the availability

of experienced and capable employees who are prepared to

assume these roles as they become available. For each

position, candidates are identified based on performance,

potential and an assessment of leadership capabilities and their

“years to readiness”. Development needs linked to the

succession plans are discussed, after which “Personal

Development Plans” are put in place, to accelerate development

and prepare candidates. Regular reviews of succession plans

are conducted at different levels of the organization to ensure

Management report

208

that they are accurate and up to date, leading to at least once a

year formal review by the Executive Office, of all key positions.

Succession management is a necessary process to reduce risk

of vacant positions or skill gap transitions, create a pipeline of

future leaders, ensure smooth business continuity and improve

employee motivation and engagement. This process has been

in place for several years and reinforced, widened and made

more systematic in all regions of the organization. The

responsibility to review and approve succession plans and

contingency plans at the highest level rests with the Board’s

ARCG Committee.

Sustainability Committee

3 members

(67%

independent)

2 meetings

(2021)

In 2021, 2 meetings of Sustainability Committee were held, with

an attendance rate of 100%.

The Sustainability Committee comprises three members, of

whom two are independent. The members are appointed by the

Board of Directors. The Sustainability Committee makes

decisions by simple majority with no member having a casting

vote.

The primary function of the Sustainability Committee is to assist

the Board of Directors on the following areas:

•review Group level frameworks, policies, standards,

and guidelines in sustainability matters;

•review the Company`s sustainable development plan

and associated management systems and ensure the

Group is well positioned to meet the evolving

expectations of stakeholders, including investors,

customers, regulators, employees, and communities;

•review the effectiveness of the process for assessing

and managing catastrophic risks;

•coordinate the SC’s risk management work with the

Audit and Risk Committee, in relation to reporting to

the Board;

•review the findings of important climate action report

and the management response;

•support and provide guidance to management in

developing and updating policies and procedures

relating to employee health & safety, environment,

climate change and community relations;

•monitor any current, pending or threatened legal

actions with respect to safety, climate change,

environment, and community relations;

•produce a report on sustainable development plan to

be included in ArcelorMittal`s Annual Report;

•review and recommend to the Board of Directors on

the adequacy of the reporting on sustainability

opportunities, risks and issues in the Annual Report,

Sustainability Report, and other relevant public

documents;

•make recommendations to the Board of Directors with

respect to trends in results and programs in all covered

areas;

•ensure that the SC Chair (or in his or her absence, an

alternative member) of the SC attends the Company’s

Annual General Meeting to answer questions

concerning sustainability and their development and/or

implementation;

•oversee any investigation and/or undertake any

thorough analysis which is within its scope.

The three members of the Sustainability Committee are Mrs.

Clarissa Lins, Mr. Tye Burt and Mr. Michel Wurth. Mrs Lins and

Mr Burt are independent in accordance with the Company’s

corporate governance guidelines, the NYSE standards and the

10 Principles of Corporate Governance of the Luxembourg

Stock Exchange. The Chairman of the Sustainability Committee

is Mrs. Lins.

The members have relevant expertise or experience relating to

the objective of the Sustainability Committee. The responsible

senior managers pertaining to their respective areas of

responsibility - health and safety, environment, climate change,

for community relations - are permanent invitees to the meetings

of the SC. The Chairman of the SC makes a verbal report of the

SC’s decisions and findings to the Board of Directors after each

SC meeting.

Other corporate governance practices

ArcelorMittal is committed to adhering to best practices in terms

of corporate governance in its dealings with shareholders and

aims to ensure good corporate governance by applying rules on

transparency, quality of reporting and the balance of powers.

ArcelorMittal continually monitors U.S., EU and Luxembourg

legal requirements and best practices in order to make

adjustments to its corporate governance controls and

procedures when necessary, as evidenced by the policies

adopted by the Board of Directors in 2012.

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Management report

ArcelorMittal complies with the 10 Principles of Corporate

Governance of the Luxembourg Stock Exchange in all respects.

Ethics and conflicts of interest

Ethics and conflicts of interest are governed by ArcelorMittal’s

Code of Business Conduct, which establishes the standards for

ethical behavior that are to be followed by all employees and

directors of ArcelorMittal in the exercise of their duties, including

the Company's CEO and CFO. Each employee of ArcelorMittal

is required to sign and acknowledge the Code of Conduct upon

joining the Company. This also applies to the members of the

Board of Directors of ArcelorMittal, who signed the Company’s

Appointment Letter in which they acknowledged their duties and

obligations. Any new member of the Board of Directors must

sign and acknowledge the Code of Conduct upon appointment.

Employees must always act in the best interests of ArcelorMittal

and must avoid any situation in which their personal interests

conflict, or could conflict, with their obligations to ArcelorMittal.

Employees are prohibited from acquiring any financial or other

interest in any business or participating in any activity that could

deprive ArcelorMittal of the time or the attention needed to

devote to the performance of their duties. Any behavior that

deviates from the Code of Business Conduct is to be reported to

the employee’s supervisor, a member of the management, the

head of the legal department or the head of the internal

assurance department.

Code of Business Conduct

Conduct training is offered throughout ArcelorMittal on a regular

basis in the form of face-to-face trainings, webinars and online

trainings. Employees are periodically trained about the Code of

Business Conduct in each location where ArcelorMittal has

operations. The Code of Business Conduct is available in the

“Corporate Governance-Our Policies-Code of Business

Conduct” section of ArcelorMittal’s website at

www.arcelormittal.com and has been disseminated through

company-wide communications.

In addition to the Code of Business Conduct, ArcelorMittal has

developed a Human Rights Policy and a number of other

compliance policies in more specific areas, such as antitrust,

anti-corruption, economic sanctions, insider dealing and data

protection. In all these areas, specifically targeted groups of

employees are required to undergo specialized compliance

training. Furthermore, ArcelorMittal’s compliance program also

includes a quarterly compliance certification process covering all

business segments and entailing reporting to the Audit & Risk

Committee.

ArcelorMittal intends to disclose any amendment to or waiver

from the Code of Business Conduct applicable to any of

ArcelorMittal’s directors, its CEO, CFO or any other person who

is an executive officer of ArcelorMittal on ArcelorMittal’s website

at www.arcelormittal.com.

Process for Handling Complaints on Accounting Matters

As part of the procedures of the Board of Directors for handling

complaints or concerns about accounting, internal controls and

auditing issues, ArcelorMittal’s Anti-Fraud Policy and Code of

Business Conduct encourage all employees to bring such

issues to the Audit & Risk Committee’s attention on a

confidential basis. In accordance with ArcelorMittal’s Anti-Fraud

and Whistleblower Policy, concerns with regard to possible fraud

or irregularities in accounting, auditing or banking matters or

bribery within ArcelorMittal or any of its subsidiaries or other

controlled entities may also be communicated through the

“Corporate Governance — Whistleblower” section of the

ArcelorMittal website at www.arcelormittal.com, where

ArcelorMittal’s Anti-Fraud Policy and Code of Business Conduct

are also available in each of the main working languages used

within the Group. In recent years, ArcelorMittal has implemented

local whistleblowing facilities, as needed.

During 2021, there were 169 complaints received relating to

alleged fraud, which were referred to and duly reviewed by the

Company’s Internal Assurance Department. Following review by

the Audit & Risk Committee, none of these complaints were

found to be significant.

Internal assurance

ArcelorMittal has an Internal Assurance function that, through its

Head of Internal Assurance, reports to the Audit & Risk

Committee. The function is staffed by full-time professional staff

located within each of the principal operating subsidiaries and at

the corporate level. Recommendations and matters relating to

internal control and processes are made by the Internal

Assurance function and their implementation is regularly

reviewed by the Audit & Risk Committee.

Independent auditors

The appointment and determination of fees of the independent

auditors is the direct responsibility of the Audit & Risk

Committee. The Audit & Risk Committee is further responsible

for obtaining, at least once each year, a written statement from

the independent auditors that their independence has not been

impaired. The Audit & Risk Committee has also obtained a

confirmation from ArcelorMittal’s principal independent auditors

to the effect that none of its former employees are in a position

within ArcelorMittal that may impair the principal auditors’

independence.

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210

Measures to prevent insider dealing and market manipulation

The Board of Directors of ArcelorMittal has adopted Insider

Dealing Regulations (“IDR”), which are updated when necessary

(most recently in January 2019) and in relation to which training

is conducted throughout the Group. The IDR’s most recent

version has been updated in light of the new Market Abuse

Regulation and is available on ArcelorMittal’s website,

www.arcelormittal.com.

The IDR apply to the worldwide operations of ArcelorMittal. The

compliance and data protection officer of ArcelorMittal is also

the IDR compliance officer and answers questions that

members of senior management, the Board of Directors, or

employees may have about the IDR’s interpretation. The IDR

compliance officer maintains a list of insiders as required by

Regulation No 596/2014 of the European Parliament and the

Council dated 16 April 2014 on market abuse or “MAR” and the

Commission Implementing Regulation 2016/347 of 10 March

2016 laying down technical standards with regard to the precise

format of insider lists and for updating insider lists in accordance

with MAR. The IDR compliance officer may assist senior

executives and directors with the filing of notices required by

Luxembourg law to be filed with the Luxembourg financial

regulator, the CSSF (Commission de Surveillance du Secteur

Financier). Furthermore, the IDR compliance officer has the

power to conduct investigations in connection with the

application and enforcement of the IDR, in which any employee

or member of senior management or of the Board of Directors is

required to cooperate.

Selected new employees of ArcelorMittal are required to

participate in a training course about the IDR upon joining

ArcelorMittal and every three years thereafter. The individuals

who must participate in the IDR training include the members of

senior management, employees who work in finance, legal,

sales, mergers and acquisitions and other areas that the

Company may determine from time to time. In addition,

ArcelorMittal’s Code of Business Conduct contains a section on

“Trading in the Securities of the Company” that emphasizes the

prohibition to trade on the basis of inside information. An online

interactive training tool based on the IDR was developed in

2010 and deployed across the group through ArcelorMittal’s

intranet, with the aim to enhance the staff’s awareness of the

risks of sanctions applicable to insider dealing. The importance

of the IDR was again reiterated in the Group's internal Group

Policies and Procedures Manual in 2013.

Shareholders and markets

Major shareholders

The following table sets out information as of December 31,

2021 with respect to the beneficial ownership of ArcelorMittal

ordinary shares by each person who is known to be the

beneficial owner of more than 5% of the shares and all directors

and senior management as a group.

ArcelorMittal Ordinary Shares

Number

Significant Shareholder1

330,940,242

33.67%

Treasury Shares2

71,916,570

7.32%

Other Public Shareholders

579,952,960

59.01%

Total

982,809,772

100.00%

Of which: BlackRock inc.4

52,460,418

5.34%

Of which: Société Générale SA4

49,485,652

5.04%

Of which: Directors and Senior

Management3

115,132

0.01%

Significant Shareholder voting rights

(outstanding shares)

36.33%

1For purposes of this table, ordinary shares owned directly by Mr. Lakshmi N.

Mittal and his wife, Mrs. Usha Mittal, are aggregated with those ordinary

shares beneficially owned by the Significant Shareholder (other than those

resulting from the conversion of mandatorily convertible subordinated notes).

At December 31, 2021, Mr. Lakshmi Mittal and his wife, Mrs. Usha Mittal,

had direct ownership of ArcelorMittal ordinary shares and beneficial

ownership (within the meaning set forth in Rule 13d-3 of the Exchange Act),

through the Significant Shareholder, of the outstanding equity of two holding

companies that own ArcelorMittal ordinary shares—Nuavam Investments S.à

r.l. (“Nuavam”) and Lumen Investments S.à r.l. (“Lumen”). Nuavam, a limited

liability company organized under the laws of Luxembourg, was the owner of

63,658,348 ArcelorMittal ordinary shares. Lumen, a limited liability company

organized under the laws of Luxembourg, was the owner of 266,969,652

ArcelorMittal ordinary shares. Mr. Lakshmi N. Mittal was the direct owner of

286,742 ArcelorMittal ordinary shares. Mrs. Mittal was the direct owner of

25,500 ArcelorMittal ordinary shares. Mr. Lakshmi N. Mittal, Mrs. Mittal and

the Significant Shareholder shared beneficial ownership of 100% of the

outstanding equity of each of Nuavam and Lumen (within the meaning set

forth in Rule 13d-3 of the Exchange Act). Accordingly, Mr. Lakshmi N. Mittal

was the beneficial owner of 330,914,742 ArcelorMittal ordinary shares, Mrs.

Mittal was the beneficial owner of 330,653,500 ordinary shares, and the

Significant Shareholder (when aggregated with ordinary shares of

ArcelorMittal held directly by Mr. and Mrs. Mittal) was the beneficial owner of

330,940,242 ordinary shares. The foregoing statement does not give effect

to the ordinary shares resulting from the conversion of the mandatorily

convertible subordinated notes issued in May 2020 outstanding as of

December 31, 2021. Assuming conversion of all outstanding mandatorily

convertible subordinated notes issued in May 2020 (including those held by

the Significant Shareholder), the Significant Shareholder would, together with

Mr. and Mrs. Mittal, beneficially own 341,828,522 ordinary shares

representing 32.58% of issued shares (assuming conversion of all notes at

the maximum conversion ratio) or 340,206,842 ordinary shares representing

32.74% of issued shares (assuming conversion of all notes at the minimum

conversion ratio). As of December 31, 2021 and 2020, the Significant

Shareholder (together with Mr. Lakshmi N. Mittal and Mrs. Mittal) held

33.67% and 35.64% of the Company’s ordinary shares respectively. During

2021, the Company repurchased 62.2 million shares from the Significant

211

Management report

Shareholder under its five buy back programs for $1.9 billion. See "Related

party transactions-Share Repurchase Agreement".

2Represents ArcelorMittal ordinary shares repurchased pursuant to share

repurchase programs, fractional shares returned in various transactions, and

the use of treasury shares in various transactions.

3Includes shares beneficially owned by directors and members of senior

management listed in section "Management and employees—Directors and

senior managers" of this annual report; excludes shares beneficially owned

by Mr. Lakshmi N. Mittal. Note that ordinary shares included in this item are

included in “Other Public Shareholders” above.

4Note that ordinary shares included in this item are included in “Other Public

Shareholders” above.

Aditya Mittal is the direct owner of 120,413 ArcelorMittal ordinary

shares representing 0.01% of the ArcelorMittal ordinary shares

outstanding. Aditya Mittal holds a total of 344,331 PSUs of

which 133,720 may vest in 2022, 82,584 may vest in 2023,

71,050 may vest in 2024 and 56,977 may vest in 2025. As the

vesting of PSUs is dependent on the Company's performance

criteria not fully within the control of the PSU holder, Aditya

Mittal does not beneficially own ArcelorMittal ordinary shares by

virtue of his ownership of the PSUs. Aditya Mittal is the son of

Mr. Lakshmi N. Mittal and Mrs. Mittal and is CEO and non-

independent director of ArcelorMittal. Vanisha Mittal Bhatia is

the direct owner of 8,500 ArcelorMittal ordinary shares,

representing less than 0.1% of the ArcelorMittal ordinary shares

outstanding. Vanisha Mittal Bhatia is the daughter of Mr.

Lakshmi N. Mittal and Mrs. Mittal and a member of the

Company’s Board of Directors.

The ArcelorMittal ordinary shares may be held in registered form

on the Company’s register only. Registered shares are fully

fungible and may consist of:

a.ArcelorMittal Registry Shares, which are registered

directly on ArcelorMittal’s Luxembourg shareholder

b.shares traded on Euronext Amsterdam, Euronext Paris,

the regulated market of the Luxembourg Stock

Exchange and the Spanish Stock Exchanges, which

are held in Euroclear, or

c.shares traded on the NYSE, the ("New York Registry

Shares"), which are registered (including in the name

of the nominee of DTC) in a New York Share Register

kept on behalf of ArcelorMittal by Citibank N.A., its New

York transfer agent.

On May 18, 2020, ArcelorMittal announced that a 5.11%

shareholding notification by BlackRock, Inc. was available in the

Luxembourg Stock Exchange’s electronic database OAM on

www.bourse.lu and on the Company’s website

corporate.arcelormittal.com under ‘Investors - Corporate

Governance - Shareholding structure’. On August 27, 2020

ArcelorMittal announced that BlackRock Inc. has notified it of a

decrease in its voting rights in ArcelorMittal from 5.04% to

4.98% as based on an amended form submitted on August 25,

2020. The notification was available in the Luxembourg Stock

Exchange’s electronic database OAM on www.bourse.lu and on

the Company’s website corporate.arcelormittal.com under

‘Investors - Corporate Governance - Shareholding structure’.

On February 5, 2021, BlackRock, Inc. filed a Schedule 13G with

the SEC stating that it beneficially owned 57,171,259 shares or

5.2% of ArcelorMittal’s issued shares as of December 31, 2020.

On March 10, 2021, BlackRock, Inc. filed a Schedule 13G/A with

the U.S. Securities and Exchange Commission stating that it

beneficially owned 51,468,777 shares or 4.7% of ArcelorMittal’s

issued shares as of February 28, 2021.

On February 4, 2022, BlackRock, Inc. filed a Schedule 13G/A

with the U.S. Securities and Exchange Commission stating that

it beneficially owned 52,460,418 shares or 5.3% of

ArcelorMittal’s issued shares as of December 31, 2021.

On January 19, 2022, BlackRock, Inc. provided a notification to

the Company stating that it beneficially owned 49,166,064

shares or 5.24% of ArcelorMittal’s issued shares as of January

18, 2022.

There were notifications from Société Générale SA on June 22,

on November 12, 19 and 24, on December 18 and 30, 2020 and

on January 4, 6 and 25, 2021 with a closing percentage on

December 31, 2020 of 4.75% subsequently increasing to 5.18%

on January 4, 2021 and decreasing to 4.79% on January 21,

2021.

There were notifications from Société Générale SA on January

4, 6 and 25, 2021, on March 8, 12, 25 and 31, 2021, on May 5

and 19, 2021, on June 7, 2021, on August 6 and 16, 2021, on

September 6, 2021, on October 29, 2021, on November 10,

2021 and on December 1, 6 and 29 with a closing percentage

on December 31, 2021 of 5.04%.

On January 26, 2022, there was a notification from Société

Générale SA stating that it beneficially owned 44,777,728

shares or 4.88% of ArcelorMittal’s issued shares as of January

21, 2022. These notifications are available in the Luxembourg

Stock Exchange’s OAM electronic database on www.bourse.lu

and on the Company’s website corporate.arcelormittal.com

under “Investors - Corporate Governance - Shareholding

structure”. The notifications were published in reference to the

Luxembourg law and the Grand Ducal regulation of January 11,

2008, on transparency requirements for issuers of securities

("Transparency Law") in view of a shareholding notification

going above or below the 5% voting rights threshold.

Under Luxembourg law, the ownership of registered shares is

evidenced by the inscription of the name of the shareholder, the

Management report

212

number of shares held by such shareholder and the amount

paid up on each share in the shareholder register of

ArcelorMittal.

At December 31, 2021, 2,585 shareholders other than the

Significant Shareholder, holding an aggregate of 44,268,913

ArcelorMittal ordinary shares, were registered in ArcelorMittal’s

shareholder register, representing approximately 4.5% of the

ordinary shares issued (including treasury shares).

At December 31, 2021, there were 159 registered shareholders

holding an aggregate of 82,879,056 New York Registry Shares,

representing approximately 8.43% of the ordinary shares issued

(including treasury shares). ArcelorMittal’s knowledge of the

number of New York Registry Shares held by U.S. holders is

based solely on the records of its New York transfer agent

regarding registered ArcelorMittal ordinary shares.

At December 31, 2021, 535,672,879 ArcelorMittal ordinary

shares were held through the Euroclear/Iberclear clearing

system in The Netherlands, France, Luxembourg and Spain,

representing approximately 54.5% of the ordinary shares issued

(including treasury shares).

Voting rights

Each share entitles the holder to one vote at the general

meeting of shareholders, and no shareholder benefits from

special voting rights. For more information relating to

ArcelorMittal shares, see “Additional information—Memorandum

and Articles of Association—Voting and information rights”.

Management share ownership

As of December 31, 2021, the aggregate beneficial share

ownership of ArcelorMittal directors and senior management (16

individuals) totaled 115,132 ArcelorMittal shares (excluding

shares beneficially owned by the Significant Shareholder, Mr.

Lakshmi N. Mittal) representing 0.012% of the total issued share

capital of ArcelorMittal. Other than Mr. Lakshmi N. Mittal, each

director and member of senior management beneficially owns

less than 1% of ArcelorMittal’s shares. See "Major shareholders”

for the beneficial share ownership of the Significant

Shareholder, Mr. Aditya Mittal and Ms. Vanisha Mittal Bhatia.

On April 27, 2015, ArcelorMittal adopted share ownership

guidelines for its CEO. The share ownership policy aims to

demonstrate to ArcelorMittal’ shareholders, the investing public

and the Company’s employees, the commitment of the CEO to

the Company and directly aligns his interests with those of the

Company’s shareholders. Accordingly, the CEO should, within

five years of the end of the current calendar year, own shares of

the Company’s common shares at least equal to three times his

annual salary and hold the purchased shares for so long as he

serves the Company.

In accordance with the Luxembourg Stock Exchange’s 10

Principles of Corporate Governance, independent non-executive

members of ArcelorMittal's Board of Directors do not receive

share options, RSUs or PSUs, and the policy of the Company is

not to grant any share-based remuneration to members of the

Board of Directors who are not executives of the Company.

See “Management and employees—Compensation” for a

description of options, RSUs and PSUs held by members of

ArcelorMittal’s senior management, including the Chairman and

CEO.

The following tables summarize outstanding PSUs and RSUs granted to the members of the Executive Office and Executive Officers of

ArcelorMittal for the last five years.

PSUs granted in

2021

PSUs granted in

2020

PSUs granted in

2019

PSUs granted in

2018

PSUs granted in

2017

Executive Office

109,143

148,422

172,517

134,861

90,084

Term (in years)

Vesting date1

January 1, 2025

January 1, 2024

January 1, 2023

January 1, 2022

January 1, 2020 -

January 1, 2022

1See “Directors, senior management and employees—Compensation—Remuneration—Long-term incentives plans”, for vesting conditions.

213

Management report

RSUs

granted in

December

2021

RSUs

granted in

May 2021

PSUs

granted in

2021

RSUs granted in 2020

PSUs

granted in

2019

PSUs

granted in

2018

PSUs

granted in

2017

CFO and Other Executive Officers

32,400

25,000

89,200

15,169

24,900

100,500

76,550

44,720

Term (in years)

Vesting date1

December

16, 2024

May 7, 2023

January 1,

2025

December

14, 2021

December

14, 2023

January 1,

2023

January 1,

2022

January 1,

2021

1See note 8.3 to the consolidated financial statements, for vesting conditions.

See note 8.3 of the consolidated financial statements for a

description of ArcelorMittal’s equity-settled share-based

payments to certain employees, including stock options, RSUs

and PSUs.

Related party transactions

ArcelorMittal engages in certain commercial and financial

transactions with related parties, including associates and joint

ventures of ArcelorMittal. Please refer to note 12 of

ArcelorMittal’s consolidated financial statements. Further

information related to required disclosure of related party

transactions under the Shareholders’ Rights Law of August 1,

2019 implementing the European Union's Shareholders' Rights

Directive in Luxembourg (the "Shareholders' Rights Law") is

included in “Memorandum and Articles of Association—Voting

and information rights”.

Shareholder’s Agreement

Mr. Lakshmi Mittal and ArcelorMittal are parties to a shareholder

and registration rights agreement (the “Shareholder’s

Agreement”) dated August 13, 1997. Pursuant to the

Shareholder’s Agreement and subject to the terms and

conditions thereof, ArcelorMittal shall, upon the request of

certain holders of restricted ArcelorMittal shares, use its

reasonable efforts to register under the Securities Act of 1933,

as amended, the sale of ArcelorMittal shares intended to be sold

by those holders. By its terms, the Shareholder’s Agreement

may not be amended, other than for manifest error, except by

approval of a majority of ArcelorMittal’s shareholders (other than

the Significant Shareholder and certain permitted transferees) at

a general shareholders’ meeting.

Memorandum of Understanding

The Memorandum of Understanding entered into in connection

with the Mittal Steel acquisition of Arcelor, certain provisions of

which expired in August 2009 and August 2011, is described

under “Additional information—Material contracts—

Memorandum of Understanding”.

Agreements with Aperam SA post-Stainless Steel Spin-Off

In connection with the spin-off of its stainless steel division into a

separately focused company, Aperam SA (“Aperam”), which was

completed on January 25, 2011, ArcelorMittal entered into

several agreements with Aperam and/ or certain Aperam

subsidiaries which are still in force: a purchasing services

agreement for negotiation services from ArcelorMittal

Purchasing (the “Purchasing Services Agreement”) as well as

certain commitments regarding cost-sharing in Brazil and certain

other ancillary arrangements governing the relationship between

Aperam and ArcelorMittal following the spin-off, as well as

certain agreements relating to financing.

The parties agreed to renew a limited number of services where

expertise and bargaining power created value for each

party. ArcelorMittal has provided in 2021 and will continue to

provide in 2022 certain services relating to areas including

environmental and technical support.

In the area of research and development at the time of the spin-

off, Aperam entered into a framework agreement with

ArcelorMittal in 2011, and as amended in 2015 to establish a

structure for future cooperation in relation to certain ongoing or

new research and development programs. Currently, few but

valuable research and development supports are implemented

through this agreement. New exchanges about breakthrough

technologies or possible technical developments interesting

both companies were launched in 2020 and 2021 and are still

ongoing.

In Europe, Aperam purchased most of its electricity and natural

gas through energy supply contracts put in place for the period

2014-2020 through ArcelorMittal Energy SCA and ArcelorMittal

Purchasing SAS, and such contracts have been renewed in

2021.

Regarding procurement, Aperam still relies on ArcelorMittal for

supplies and services in relation to the negotiation of certain

contracts with global or large regional suppliers. The Purchasing

Services Agreement entered into for an initial term of two years

until January 24, 2013 has been renewed and remains in force

in relation to the following key categories: operating materials

(only hot strip mill), refractory materials, spare parts, sea

freight, industrial products and support services (excluding

industrial services). The Purchasing Services Agreement also

permits Aperam to avail itself of the services and expertise of

ArcelorMittal for certain capital expenditures.

Management report

214

Another supply agreement entered into between Aperam and

ArcelorMittal Sourcing is effective since January 2020 for the

sale of electrodes. Specific IT service agreements have been

put in place with Aperam, one for Asset Reliability Maintenance

Program ("ARMP") in its Brazilian entities, and two others for the

use in Europe of ARMP and for the use of the global wide area

network (WAN).

Purchasing activities will continue to be provided to Aperam

pursuant to existing contracts with ArcelorMittal entities that it

has specifically elected to assume. In addition, since 2011, a

services agreement has been concluded between ArcelorMittal

Shared Service Center Europe Sp z.o.o. Sp.k. and Aperam for

accounting services.

In connection with the spin-off, management also renegotiated

an existing Brazilian cost-sharing agreement between

ArcelorMittal Brasil and Aperam Inox América do Sul S.A.,

Aperam Inox Serviços Brasil Ltda., Aperam Inox Tubos Brasil

Ltda. and Aperam Bioenergia Ltda.pursuant to which,

ArcelorMittal Brasil continued to perform purchasing for the

benefit of these Aperam’s Brazilian subsidiaries, with costs

being shared on the basis of cost allocation parameters agreed

between the parties on a yearly basis.

Headquarters

ArcelorMittal Kirchberg Real Estate S.à r.l., Kennedy 2020 SAS,

and Aperam Real Estate S.à r.l, which are subsidiaries of

ArcelorMittal and Aperam, respectively, signed a land use right

for a combined head office project in Kirchberg, Luxembourg

with Fonds Kirchberg on March 7, 2019.

Share Repurchase Agreement

The Significant Shareholder has entered into a share

repurchase agreement with ArcelorMittal on February 12, 2021

(as amended from time to time), (the "Share Repurchase

Agreement"), to sell each trading day on which ArcelorMittal has

purchased shares under its 2021 share buyback programs (the

"Programs") an equivalent number of shares, at the proportion

of the Significant Shareholders's stake in ArcelorMittal of

36.34% of issued and outstanding shares of ArcelorMittal, at the

same price as the shares repurchased on the market. The effect

of the Share Repurchase Agreement is to maintain the

Significant Shareholders's voting rights in ArcelorMittal's issued

share capital (net of treasury shares) at the current level,

pursuant to the Programs.

On March 4, June 18, July 7, November 17 and December 29,

2021, ArcelorMittal announced the completion of five

consecutive Programs under the authorization given by the

annual general meetings of shareholders held on June 13, 2020

and June 8, 2021 (see "Introduction—Key transactions and

events in 2021" and "Purchases of equity securities by the

issuer and affiliated purchasers"). To maintain Significant

Shareholder's current level of voting rights as per the Share

Repurchase Agreement, in the context of the first, second, third,

fourth and fifth Programs, the Company repurchased, 9.9

million, 6.5 million, 8.9 million, 24.5 million and 12.4 million

shares, respectively, from the Significant Shareholder for $236

million, $207 million, $273 million, $799 million and $363 million,

respectively.

On February 11, 2022, ArcelorMittal announced a new $1 billion

share buyback program. To maintain Significant Shareholder's

current level of voting rights as per the Share Repurchase

Agreement, the Company repurchased 525,177 shares from the

Significant Shareholder for $16.2 million. On February 25, 2022,

the Company announced the decision of the Significant

Shareholder not to further participate to such program.

Accordingly, the Share Repurchase Agreement was terminated

with respect to this program (see "Introduction—Key

transactions and events in 2021—Recent developments").

Markets

ArcelorMittal shares are listed and traded (through a single

order book) on the Euronext European markets (Paris and

Amsterdam) (symbol “MT”), are admitted to trading on the

Luxembourg Stock Exchange’s regulated market and listed on

the Official List of the Luxembourg Stock Exchange (symbol

“MT”) and are listed and traded on the Spanish Stock

Exchanges (symbol “MTS”). In the United States, ArcelorMittal

shares are listed and traded on the NYSE (symbol “MT”).

Additionally, ArcelorMittal’s 5.50% mandatorily convertible notes

due 2023, which were issued on May 18, 2020, are listed and

traded on the NYSE.

Paying agents

The paying agent for shareholders who hold shares listed on the

NYSE is Citibank and the paying agent for shareholders who

hold shares listed on Euronext Amsterdam, Euronext Paris, and

Luxembourg Stock Exchange is ABN AMRO since March 29,

2021, date as from which it replaced BNP Paribas Securities

Services.

New York Registry Shares

The Company does not have any American Depositary

Receipts. As described under “Additional information—

Memorandum and Articles of Association—Form and transfer of

shares”, the Company maintains a New York share register with

Citibank, N.A. for its shares that trade on the NYSE. As of

December 31, 2021, 82,879,056 shares (or approximately

8.43% of ArcelorMittal’s total issued shares) were ArcelorMittal

New York Registry Shares. Holders of ArcelorMittal New York

Registry Shares do not pay fees to Citibank as a general matter,

but do incur costs of up to $5 per 100 shares for transactions

that require canceling or issuing New York Registry Shares,

such as cross-border trades where New York Registry Shares

215

Management report

are cancelled in exchange for shares held in ArcelorMittal’s

European register, or vice-versa. Subject to certain conditions,

Citibank reimburses the Company on an annual basis for

expenses incurred by the Company in relation to the ongoing

maintenance of the New York share facility (e.g., investor

relations expenses, NYSE listing fees, etc.). In 2021, Citibank

paid the Company $790,621 in respect of reimbursements of

expenses incurred by the Company in 2021.

Dividend distributions

Based on Luxembourg law and its Articles of Association,

ArcelorMittal allocates at least five percent of its net profits to

the creation of a reserve. This allocation ceases to be

compulsory when the reserve reaches ten percent (10%) of its

issued share capital, and becomes compulsory once again

when the reserve falls below that percentage. Under

Luxembourg law, the amount of any dividends paid to

shareholders may not exceed the amount of the profits at the

end of the last financial year plus any profits carried forward and

any amounts drawn from reserves that are available for that

purpose, less any losses carried forward and sums to be placed

in reserve in accordance with Luxembourg law or the Articles of

Association. A company may not pay dividends to shareholders

when, on the closing date of the last financial year, the net

assets are, or following the payment of such dividend would

become, lower than the amount of the subscribed capital plus

the reserves that may not be distributed by law or by virtue of

the articles of association. ArcelorMittal’s Articles of Association

provide that the portion of annual net profit that remains

unreserved is allocated as follows by the general meeting of

shareholders upon the proposal of the Board of Directors:

•a global amount is allocated to the Board of Directors

by way of directors’ fees (“tantièmes”). This amount

may not be less than €1,000,000. In the event that the

profits are insufficient, the amount of €1,000,000 shall

be imputed in whole or in part to charges. The

distribution of this amount among the members of the

Board of Directors shall be effected in accordance with

the Board of Directors’ rules of procedure; and

•the balance is distributed as dividends to the

shareholders or placed in the reserves or carried

forward.

Interim dividends may be distributed under the conditions set

forth in Luxembourg law by decision of the Board of Directors.

No interest is paid on dividends declared but not paid which are

held by the Company on behalf of shareholders.

On January 31, 2018, the Company announced that the Board

agreed on a new dividend policy following two years of no

dividends, which was proposed to shareholders at the AGM in

May 2018. Accordingly, the Board proposed an increase in the

base dividend for 2019 (paid from 2018 earnings) from $0.10

(paid in 2018 from 2017 earnings) to $0.20 per share which was

approved by the shareholders at the AGM in May 2019 and was

paid on June 13, 2019. On February 6, 2020, given the resilient

cash flow and progress towards its net debt target (revised to $7

billion during 2019 to reflect impact of IFRS 16), the Board

proposed a base dividend of $0.30 per share for 2020 (in

respect of 2019). However, against the backdrop of significant

cost saving measures being taken across the business due to

the COVID-19 outbreak, the Board determined it both

appropriate and prudent to suspend dividend payments until

such a time as the operating environment normalizes.

Following the achievement of the Group's net debt target, in

February 2021, the Board has approved a new capital return

policy. According to this policy, the Board recommended a

$0.30/share base dividend be paid in June 2021, subject to the

approval of shareholders at the AGM.

On June 8, 2021 at the annual general meeting of shareholders,

the shareholders approved the Company’s proposed dividend of

$0.30 per share. The dividend amounted to $325 million ($312

million net of dividends paid to subsidiaries holding treasury

shares) and was paid on June 15, 2021.

In February 2022, the Board of Directors recommended an

increase of the base annual dividend to $0.38/share, from

$0.30/share, to be paid in June 2022, subject to the approval of

shareholders at the annual general meeting of shareholders in

May 2022. In addition, the Company has initiated a new $1

billion share buyback program for the first half of 2022. This is

the maximum based on the current authorization provided by

shareholders at the annual general meeting of shareholders in

June 2021. Additional authorization to repurchase shares will be

sought from shareholders at the 2022 annual general meeting of

shareholders.

Purchases of equity securities by the issuer and affiliated

purchasers

In accordance with the authorization provided by the annual

general meeting of shareholders of June 13, 2020 as described

in “Memorandum and Articles of Association”, on September 28,

2020, ArcelorMittal announced a share buyback program with

the intent to acquire shares intended to meet the Company’s

obligations i) under debt obligations exchangeable into equity

securities, and/or ii) to reduce its share capital. ArcelorMittal

intended to repurchase, between 28 September 2020 and 31

March 2021, shares for an aggregate maximum amount of $500

million in accordance with the resolution of the annual general

meeting of shareholders held on June 13, 2020 and applicable

market abuse regulations.

Management report

216

On March 4, 2021, ArcelorMittal announced the completion of its

first share buyback program under the authorization given by

the annual general meeting of shareholders held on June 13,

2020. By market close on March 3, 2021, the Company

repurchased 27.1 million shares for a total amount of €537

million ($650 million) at an average price per share of €19.79

(equivalent to $23.97).

The annual general meeting of shareholders held on June 8,

2021 decided (a) to cancel with effect as of the date of the

meeting the authorization granted to the Board of Directors by

the annual general meeting of shareholders held on June 13,

2020 with respect to the share buy-back program, and (b) to

authorize, effective immediately after the General Meeting, the

Board of Directors, with the option to delegate to the corporate

bodies of the other companies in the ArcelorMittal group in

accordance with the Luxembourg law of August 10, 1915 on

commercial companies, as amended (the “Law”), to acquire and

sell shares in the Company in accordance with the Law and any

other applicable laws and regulations, including but not limited

to entering into off-market and over-the-counter transactions

and to acquire shares in the Company through derivative

financial instruments.

On June 18, 2021, ArcelorMittal announced the completion of its

second share buyback program pursuant to an authorization by

the annual general meeting of shareholders on June 13, 2020

and June 8, 2021. At market closure on June 17, 2021,

ArcelorMittal had repurchased 17.8 million shares for a total

value of approximately €469 million (equivalent to $570 million)

at an average price per share of €26.27 (equivalent to $31.94).

On July 7, 2021, ArcelorMittal announced the completion of its

third share buyback program pursuant to an authorization by the

annual general meeting of shareholders on June 13, 2020 and

June 8, 2021. At market closure on July 5, 2021, ArcelorMittal

had repurchased 24.5 million shares for a total value of €630

million (equivalent to $750 million) at an average price per share

of €25.77 (equivalent to $30.66).

On November 17, 2021, ArcelorMittal announced the completion

of its fourth share buyback program pursuant to an authorization

by the annual general meeting of shareholders on June 8, 2021.

At market closure on November 16, 2021, ArcelorMittal had

repurchased 67.4 million shares for a total value of €1,881

million (equivalent to $2,200 million) at an average price per

share of €27.91 (equivalent to $32.64).

On December 29, 2021, ArcelorMittal announced the completion

of its fifth share buyback program announced on November 17,

2021 pursuant to an authorization by the annual general

meeting of shareholders on June 8, 2021. At market closure on

December 28, 2021, ArcelorMittal had repurchased 34.0 million

shares for a total value of €886 million (equivalent to $1,000

million) at an average price per share of €25.99 (equivalent to

$29.34).

On February 11, 2022, ArcelorMittal announced a new $1 billion

share buyback program pursuant to an authorization by the

annual general meeting of shareholders on June 8, 2021. At

market closure on March 10, 2022, ArcelorMittal had

repurchased 7.1 million shares for a total value of €193 million

(equivalent to $214 million) at an average price per share of

€27.14 (equivalent to $30.08).

As described in “Memorandum and Articles of Association”, the

maximum number of shares that may be acquired does not in

any event exceed 15% of the Company’s issued share capital.

The maximum number of own shares that the Company may

hold at any time directly or indirectly may not have the effect of

reducing its net assets (“actif net”) below the amount mentioned

in paragraphs 1 and 2 of Article 461-272-1 of the Law.

217

Management report

Program1

2021

Total Number of

Shares Purchased

Average Price

Paid Per Share

Total Number of

Shares Purchased as

Part of Publicly

Announced Plan or

Program

Maximum Number of

Shares that may yet

be purchased under

the Plans or Programs

(see above

explanations)

First buyback program

February 1 - February 28

21,684,751

$23.86

21,684,751

5,428,570

First buyback program

March 1 - March 31

5,428,570

$24.42

5,428,570

—

Second buyback program

April 1 - April 30

2,328,711

$29.75

2,328,711

15,518,346

Second buyback program

May 1 - May 31

8,644,669

$31.72

8,644,669

6,873,677

Second buyback program

June 1 - June 30

6,873,677

$32.95

6,873,677

—

Third buyback program

June 1 - June 30

18,006,801

$30.38

18,006,801

6,451,723

Third buyback program

July 1 - July 31

6,451,723

$31.45

6,451,723

—

Fourth buyback program

August 1 - August 31

24,621,120

$33.92

24,621,120

42,782,946

Fourth buyback program

September 1 - September 30

18,705,626

$32.40

18,705,626

24,077,320

Fourth buyback program

October 1 - October 31

16,357,268

$31.07

16,357,268

7,720,052

Fourth buyback program

November 1 - November 30

7,720,052

$32.46

7,720,052

—

Fifth buyback program

November 1 - November 30

16,205,010

$29.40

16,205,010

17,875,039

Fifth buyback program

December 1 - December 31

17,875,039

$29.29

17,875,039

—

1.Commencement of first, second, third, fourth and fifth buyback programs was announced on February 15, 2021, March 4, 2021, June 18, 2021, July 29, 2021 and

November 17, 2021, respectively, for an aggregate amount of $650 million, $570 million, $750 million, $2.2 billion and $1 billion, respectively, and the completion of

these programs was announced on March 4, 2021, June 18, 2021, July 7, 2021, November 17, 2021 and December 29, 2021, respectively. The first four buyback

programs and the fifth one were scheduled to be completed by December 31, 2021 and February 2022, respectively. As of December 31, 2021, all of these programs

are closed.

Share capital

As of December 31, 2021, the Company’s issued share capital

was $350 million represented by 982,809,772 ordinary shares

without nominal value. The Company's issued share capital

changed as described below in 2020 and 2021.

Out of the total of 982,809,772 shares in issue, 71,916,570

shares were held in treasury by ArcelorMittal at December 31,

2021, representing approximately 7.32% of its issued share

capital.

The Company’s authorized share capital, including the issued

share capital, was $442 million represented by 1,241,418,599

ordinary shares without nominal value as of December 31,

2021. The Company's authorized share capital changed as

described below in 2020 and 2021.

On May 14, 2020, the Company completed an offering of

ordinary shares, without nominal value for $750 million at a price

of $9.27 per share; and on May 18, 2020, the Company

completed an offering of mandatorily convertible subordinated

notes ("MCNs") for $1,250 million, respectively (see note 11.2 to

the consolidated financial statements). At the closing of the

offering of ordinary shares, the Company issued 80,906,149

fully paid up shares. Accordingly, the share capital and

aggregate number of shares issued and fully paid up increased

to $393 million represented by 1,102,809,772 ordinary shares

without nominal value. Subsequently, on December 15, 2020,

ArcelorMittal signed separate, privately negotiated agreements

with certain MCN holders to exchange $247 million in aggregate

principal amount of MCNs for an aggregate of 22,653,933

shares. See note 11.2 to the consolidated financial statements.

On June 13, 2020, at the EGM of ArcelorMittal shareholders, the

shareholders approved an increase of the Company's

authorized share capital to $485 million represented by

1,361,418,599 ordinary shares without nominal value. The

increase was needed to deliver the necessary ordinary shares

upon conversion of the MCNs, which were on the basis of the

conversion ratio when issued on May 18, 2020, mandatorily

convertible into up to 134,843,500 ordinary shares of the

Company and for the Company to have adequate flexibility

going forward, whilst taking into account the issue of 80,906,149

ordinary shares in an offering which closed on May 14, 2020. In

addition, the EGM of ArcelorMittal shareholders held on June

13, 2020 authorized the Board of Directors, during a period of

five years from the date of the EGM meeting, i) to issue

additional ordinary shares in the Company within the limit of the

authorized share capital and ii) to limit or suspend the

preferential subscription rights of existing shareholders in the

event of any increase in the issued share capital up to and

including the share capital. For more information, see note 11 to

the consolidated financial statements.

Management report

218

In line with the authorization granted by the EGM of ArcelorMittal

shareholders held on June 8, 2021, the Board of Directors has

decided to keep the number of treasury shares within

appropriate levels to cancel:

(i) on August 4, 2021, 70 million treasury shares. As a result of

this cancellation, ArcelorMittal had 1,032,772 shares in issue

(compared to 1,102,809,772 before the cancellation),

(ii) on September 22, 2021, 50 million treasury shares. As a

result of this cancellation, ArcelorMittal had 982,809,772 shares

in issue (compared to 1,032,809,772 before cancellation),

(iii) on January 14, 2022, 45 million treasury shares. As a result

of this cancellation, ArcelorMittal has 937,809,772 shares in

issue (compared to 982,809,772 before cancellation).

The first two cancellations took into account the $2.2 billion

share buyback program announced on July 29, 2021 which

completed on November 16, 2021 whereas the third

cancellation took into account the $1 billion share buyback

program announced on November 17, 2021 which completed on

December 28, 2021.

Over the years, ArcelorMittal has issued equity-settled share-

based payments to certain employees, including stock options,

restricted share units and performance share units. See note 8.3

to the consolidated financial statements.

Additional information

Memorandum and Articles of Association

Below is a summary of ArcelorMittal’s Articles of Association.

The full text of the Company’s Articles of Association is also

available on www.arcelormittal.com under “Investors-Corporate

Governance-Articles of Association”.

Corporate purpose

Article 3 of the Articles of Association provides that the corporate

purpose of ArcelorMittal is the manufacture, processing and

marketing of steel, steel products and all other metallurgical

products, as well as all products and materials used in their

manufacture, their processing and their marketing, and all

industrial and commercial activities connected directly or

indirectly with those objects, including mining and research

activities and the creation, acquisition, holding, exploitation and

sale of patents, licenses, know-how and, more generally,

intellectual and industrial property rights.

The Company may realize its corporate purpose either directly

or through the creation of companies, the acquisition, holding or

acquisition of interests in any companies or partnerships,

membership in any associations, consortia and joint ventures.

In general, the Company’s corporate purpose comprises the

participation, in any form whatsoever, in companies and

partnerships and the acquisition by purchase, subscription or in

any other manner as well as the transfer by sale, exchange or in

any other manner of shares, bonds, debt securities, warrants

and other securities and instruments of any kind.

It may grant assistance to any affiliated company and take any

measure for the control and supervision of such companies.

It may carry out any commercial, financial or industrial operation

or transaction that it considers to be directly or indirectly

necessary or useful in order to achieve or further its corporate

purpose.

Form and transfer of shares

The shares of ArcelorMittal are issued in registered form only

and are freely transferable. There are no restrictions on the

rights of Luxembourg or non-Luxembourg residents to own

ArcelorMittal shares.

In accordance with Luxembourg law, the ownership of registered

shares is evidenced by the inscription of the name of the

shareholder and the number of shares held by such shareholder

in the shareholders’ register. Each transfer of shares is made by

a written declaration of transfer recorded in the shareholders’

the transferee or by their duly appointed agent. ArcelorMittal

may accept and enter into its shareholders’ register any transfer

based on an agreement between the transferor and the

transferee provided a true and complete copy of such

agreement is provided to ArcelorMittal.

The Articles of Association provide that shares may be held

through a securities settlement (clearing) system or a

professional depositary of securities. Shares held in this manner

have the same rights and obligations as the registered shares.

Shares held through a securities settlement system or a

professional depositary of securities may be transferred in

accordance with customary procedures for the transfer of

securities in book-entry form.

The ArcelorMittal ordinary shares may be held in registered form

on the Company’s register only. Registered shares are fully

fungible and may consist of:

a.ArcelorMittal Registry Shares, which are registered

directly on ArcelorMittal’s Luxembourg shareholder

b.shares traded on Euronext Amsterdam, Euronext Paris,

the regulated market of the Luxembourg Stock

Exchange and the Spanish Stock Exchanges, which

are held in Euroclear, or

219

Management report

c.shares traded on the NYSE (the "New York Registry

Shares"), which are registered (including in the name

of the nominee of Depository Trust Company) in a New

York Share Register kept on behalf of ArcelorMittal by

Citibank, N.A., its New York transfer agent.

Since March 2009, ArcelorMittal had used the services of BNP

Paribas Securities Services to assist it with certain

administrative tasks relating to the day-to-day administrative

management of the shareholders’ register. However, on March

29, 2021, the Company replaced BNP Paribas Securities

Services with ABN AMRO. The Company maintains a New York

shareholders' register with Citibank, N.A. (located at 388

Greenwich Street, New York, New York 10013) for its New York

Registry Shares that trade on the NYSE with underlying

positions held in Euroclear. As of December 31, 2021,

82,879,056 shares (or approximately 8.43% of ArcelorMittal's

total issued shares) were New York Registry Shares.

The law of April 6, 2013 concerning dematerialized securities

allows Luxembourg issuers to opt for the full dematerialization of

shares. The EGM of ArcelorMittal shareholders held on May 10,

2017 authorized and empowered the Board of Directors to give

effect to such dematerialization and to determine its effective

date, following which new shares in the Company may only be

issued in dematerialized form (the “Effective Date”). Notice of

the compulsory dematerialization will be given in accordance

with Article 6.9 (i) of the Articles of Association. As from the

Effective Date, shareholders would be required to hold their

shares in a securities account at a bank or other financial

intermediary, which would in turn hold the shares via an account

with a securities depository such as Clearstream or Euroclear.

Dematerialized securities would be solely represented by

account entries with the securities depositary and would

therefore exist only in electronic form. It would then no longer be

possible for shareholders to hold shares through a direct,

nominative registration in the Company’s register of

shareholders as is currently the case. As of December 31, 2021,

notice of the Effective Date has not been given.

Issuance of shares

The issuance of shares by ArcelorMittal requires either an

amendment of the Articles of Association approved by an EGM

or a decision of the Board of Directors that is within the limits of

the authorized share capital set out in the Articles of Association.

In the latter case, the Board of Directors may determine the

conditions for the issuance of shares, including the

consideration (cash or in kind) payable for such shares.

The EGM may not validly deliberate unless at least half of the

share capital is present or represented upon the first call. If the

quorum is not met, the meeting may be reconvened as

described in “General meeting of shareholders” below. The

second meeting will be held regardless of the proportion of

share capital represented. At both meetings, resolutions, in

order to be adopted, must be carried by at least two-thirds of the

votes cast.

Article 5.1 of the Articles of Association of the Company was

amended to reflect the issued share capital increase described

above in "Shareholders and markets–Share capital". Such

amendment to the Articles of Association was filed with the

Luxembourg Register of Commerce and Companies on June 8,

2020.

Articles 5.2 and 5.5 of the Articles of Association of the

Company have been amended to reflect the authorized share

capital increase described above in "Shareholders and

markets–Share capital". Such amendments to the Articles of

Association were filed with the Luxembourg Register of

Commerce and Companies on June 17, 2020.

Preemptive rights

Unless limited or canceled by the Board of Directors as

described below or by an EGM, holders of ArcelorMittal shares

have a pro rata preemptive right to subscribe for newly issued

shares, except for shares issued for consideration other than

cash (i.e., in kind).

The Articles of Association provide that preemptive rights may

be limited or canceled by the Board of Directors in the event of

an increase in the Company’s issued share capital until the date

being five years from the date of publication in the Luxembourg

legal gazette (Recueil électronique des sociétés et associations)

(“RESA”) of the relevant meeting minutes, which publication

occurred on June 17, 2020 with respect to the minutes of the

EGM held on June 13, 2020. This power of the Board of

Directors may from time to time be renewed by an EGM for

subsequent periods not to exceed five years each.

Repurchase of shares

ArcelorMittal is prohibited by Luxembourg law from subscribing

for its own shares. ArcelorMittal may, however, repurchase its

own shares or have another person repurchase shares on its

behalf, subject to certain conditions, including:

•a prior authorization of the general meeting of

shareholders setting out the terms and conditions of

the proposed repurchase, including the maximum

number of shares to be repurchased, the duration of

the period for which the authorization is given (which

may not exceed five years) and the minimum and

maximum consideration per share;

•the repurchase may not reduce the net assets of

ArcelorMittal on a non-consolidated basis to a level

below the aggregate of the issued share capital and

the reserves that ArcelorMittal must maintain pursuant

to Luxembourg law or its Articles of Association;

Management report

220

•only fully paid-up shares may be repurchased. At

December 31, 2021, all of ArcelorMittal’s issued

ordinary shares were fully paid-up; and

•the acquisition offer is made on the same terms and

conditions to all the shareholders who are in the same

position, it being noted however that listed companies

may repurchase their own shares on the stock

exchange without an acquisition offer having to be

made to the shareholders.

In addition, Luxembourg law allows the Board of Directors to

approve the repurchase of ArcelorMittal shares without the prior

approval of the general meeting of shareholders if necessary to

prevent serious and imminent harm to ArcelorMittal. In such a

case, the next general meeting of shareholders must be

informed by the Board of Directors of the reasons for and the

purpose of the acquisitions made, the number and nominal

values, or in the absence thereof, the accounting par value of

the shares acquired, the proportion of the issued share capital

that they represent, and the consideration paid for them.

The annual general meeting of shareholders held on June 8,

2021 (the “General Meeting”) decided (a) to cancel with effect

as of the date of the General Meeting the authorization granted

to the Board of Directors by the general meeting of shareholders

held on June 13, 2020 with respect to the share buy-back

program (the "Authorization"), and (b) to authorize, effective

immediately after the General Meeting, the Board of Directors,

with the option to delegate to the corporate bodies of the other

companies in the ArcelorMittal group in accordance with the

Luxembourg law of August 10, 1915 on commercial companies,

as amended (the “Law”), to acquire and sell shares in the

Company in accordance with the Law and any other applicable

laws and regulations, including but not limited to entering into

off-market and over-the-counter transactions and to acquire

shares in the Company through derivative financial instruments.

Any acquisitions, disposals, exchanges, contributions or

transfers of shares by the Company or other companies in the

ArcelorMittal group must be in accordance with Regulation (EU)

No. 596/2014 of the European Parliament and of the Council of

April 16, 2014 on market abuse (the "MAR Regulation"),

Commission Delegated Regulation (EU) No. 2016/1052 of

March 8, 2016 with regard to regulatory technical standards for

the conditions applicable to buy-back programs and stabilization

measures and Luxembourg law of December 23, 2016 on

market abuse implementing the MAR Regulation .

Such transactions may be carried out at any time, including

during a tender offer period, subject to applicable laws and

regulations including Section 10(b) and Section 9(a)(2) of the

Securities Exchange Act of 1934, as amended (the “Exchange

Act”), and Rule 10b-5 promulgated under the Exchange Act.

The Authorization is valid until the end of the annual general

meeting of shareholders to be held in 2022 (the "2022 AGM") or

until the date of its renewal by a resolution of the general

meeting of shareholders if such renewal date is prior to the

expiration of the 2022 AGM.

The maximum number of shares that may be acquired under the

Authorization may not in any event exceed 15% of the

Company’s issued share capital. The maximum number of own

shares that the Company may hold at any time directly or

indirectly may not have the effect of reducing its net assets

(“actif net”) below the amount mentioned in paragraphs 1 and 2

of Article 461-2 of the Law. The purchase price per share to be

paid shall not exceed 110% of the average of the final listing

prices of the 30 trading days preceding the three trading days

prior to each date of repurchase, and shall not be less than one

euro cent. The final listing prices are those on the Euronext

markets where the Company is listed or the Luxembourg Stock

Exchange, depending on the market on which the purchases

are made. For off-market transactions, the maximum purchase

price shall be 110% of the reference price on the Euronext

markets where the Company is listed. The reference price will

be deemed to be the average of the final listing prices per share

on these markets during 30 consecutive days on which these

markets are open for trading preceding the three trading days

prior to the date of purchase. In the event of a share capital

increase by incorporation of reserves or issue premiums and the

free allotment of shares as well as in the event of the division or

regrouping of the shares, the purchase price indicated above

shall be adjusted by a multiplying coefficient equal to the ratio

between the number of shares comprising the issued share

capital prior to the transaction and such number following the

transaction. The total amount allocated for the Company’s share

repurchase program may not in any event exceed the amount of

the Company’s then available equity.

Capital reduction

The Articles of Association provide that the issued share capital

of ArcelorMittal may be reduced subject to the approval of at

least two-thirds of the votes cast at an extraordinary general

meeting of shareholders where, at first call, at least 50% of the

issued share capital is required to be represented, with no

quorum being required at a reconvened meeting.

The extraordinary general meeting of shareholders held on June

8, 2021 decided to authorize the Board of Directors, for a period

of three years (i) to cancel all the shares repurchased by the

Company under its share buyback programs up to a maximum

of 165 million shares and to consequently reduce the issued

share capital of the Company and the authorized share capital

of the Company by an amount corresponding to the product of

the number of treasury shares cancelled multiplied by thirty-six

US dollar cents (USD 0.36), being the par value of the shares in

the Company - and (ii) to consequentially amend articles 5.1

221

Management report

and 5.2 of the articles of association of the Company to reflect

the above cancellations and reductions of the issued and

authorized share capital of the Company, (iii) to reduce or

cancel the relevant reserves constituted under applicable law in

relation thereto and (iv) to instruct and delegate power to and

authorize the Board of Directors or its delegate(s) to implement

the cancellation of the number of treasury shares determined by

the Board of Directors and the corresponding reduction of share

capital and related matters in one or more installments as

deemed fit by the Board of Directors, to cause the share capital

reductions and cancellations of the treasury shares and the

consequential amendment of the Articles to be recorded by way

of one or more notarial deeds, and generally to take any steps,

actions or formalities as appropriate or useful to implement this

decision of the extraordinary general meeting.

Please refer to the section on “Shareholder and markets - Share

capital” for the details on the latest share capital reductions.

General meeting of shareholders

The shareholders’ rights law of May 24, 2011, which transposes

into Luxembourg law Directive 2007/36/EC of the European

Parliament and of the Council of July 11, 2007 (on the exercise

of certain rights of shareholders in listed companies) of July 14,

2007 came into force on July 1, 2011 was amended by the law

of August 1, 2019 which entered into force on August 1, 2019

amending the law of May 24, 2011 on the exercise of certain

rights of shareholders and transposing Directive (EU) 2017/828

of the European Parliament and of the Council of 17 May 2017

(the “Shareholders' Rights Law”) and includes provisions

relating to general meetings of shareholders, as discussed

below.

General meetings of shareholders are convened by the

publication of a notice at least 30 days before the meeting date

in a Luxembourg newspaper, via the online platform called

Recueil électronique des sociétés et associations (“RESA”), and

by way of press release sent to the major news agencies.

Ordinary general meetings are not subject to any minimum

shareholder participation level. Extraordinary general meetings,

however, are subject to a minimum quorum of 50% of the share

capital. In the event the 50% quorum is not met upon the first

call, the meeting may be reconvened by way of convening

notice published in the same manner as the first notice, at least

17 days before the meeting date. No quorum is required upon

the second call.

Shareholders whose share ownership is directly registered in

the shareholders’ register of the Company must receive the

convening notice by regular mail, unless they have accepted to

receive it through other means (i.e., electronically). In addition,

all materials relating to a general meeting of shareholders must

be made available on the website of ArcelorMittal from the first

date of publication of the convening notice.

The Shareholders’ Rights Law abolished the blocking period

and introduced the record date system into Luxembourg law. As

set out in the Articles of Association, the record date applicable

to ArcelorMittal is the 14th day at midnight before the general

meeting date. Only the votes of shareholders who are

shareholders of the Company on the record date will be taken

into account, regardless of whether they remain shareholders on

the general meeting date. Shareholders who intend to

participate in the general meeting must notify the Company at

the latest on the date indicated in the convening notice of their

intention to participate (by proxy or in person).

Ordinary general meetings of shareholders. At an ordinary

general meeting of shareholders there is no quorum

requirement and resolutions are adopted by a simple majority,

irrespective of the number of shares represented. Ordinary

general meetings deliberate on any matter that does not require

the convening of an extraordinary general meeting.

Based on an amendment voted by the extraordinary general

meeting of shareholders on May 10, 2017, the Articles of

Association provide that the annual general meeting of

shareholders is held each year within six months from the end of

the previous financial year at the Company’s registered office or

at any other place in the Grand Duchy of Luxembourg as

determined by the Board of Directors and indicated in the

convening notice.

Extraordinary general meetings of shareholders. An

extraordinary general meeting must be convened to deliberate

on the following types of matters:

•an increase or decrease of the authorized or issued

share capital,

•a limitation or exclusion of existing shareholders’

preemptive rights,

•the acquisition by any person of 25% or more of the

issued share capital of ArcelorMittal,

•approving a merger or similar transaction such as a

spin-off, and

•any transaction or matter requiring an amendment of

the Articles of Association.

The extraordinary general meeting must reach a quorum of

shares present or represented at the meeting of 50% of the

share capital in order to validly deliberate. If this quorum is not

reached, the meeting may be reconvened and the second

meeting will not be subject to any quorum requirement. In order

to be adopted by the extraordinary general meeting (on the first

or the second call), any resolution submitted must be approved

by at least two-thirds of the votes cast except for certain limited

matters where the Articles of Association require a higher

majority (see “—Amendment of the Articles of Association”).

Management report

222

Votes cast do not include votes attaching to shares with respect

to which the shareholder has not taken part in the vote, has

abstained or has returned a blank or invalid vote.

In addition, Luxembourg law requires the Board of Directors to

convene a general meeting of shareholders if shareholders

representing in the aggregate 10% of the issued share capital

so require in writing with an indication of the requested agenda.

In this case, the general meeting of shareholders must be held

within one month of the request. If the requested general

meeting of shareholders is not so convened, the relevant

shareholder or group of shareholders may petition the

competent court in Luxembourg to have a court appointee

convene the general meeting.

Shareholder participation at general meetings

The Board of Directors may decide to arrange for shareholders

to be able to participate in the general meeting by electronic

means by way, among others, of (i) real-time transmission to

the public of the general meeting, (ii) two-way communication

enabling shareholders to address the general meeting from a

remote location, or (iii) a mechanism allowing duly identified

shareholders to cast their votes before or during the general

meeting without the need for them to appoint a proxyholder who

would be physically present at the meeting.

A shareholder may act at any general meeting of shareholders

by appointing another person (who need not be a shareholder)

as his or her attorney by means of a written proxy using the form

made available on the website of the Company. The completed

and signed proxy must be sent to the Company in accordance

with the instructions set out in the convening notice.

The Board of Directors may also decide to allow shareholders to

vote by correspondence by means of a form providing for a

positive or negative vote or an abstention on each agenda item.

The conditions for voting by correspondence are set out in the

Articles of Association and in the convening notice.

Shareholders representing in the aggregate 5% of the issued

share capital may also request that additional items be added to

the agenda of a general meeting and may draft alternative

resolutions to be submitted to the general meeting regarding

existing agenda items. The request must be made in writing and

sent either to the electronic address or to the Company’s postal

address set out in the convening notice.

The Shareholders’ Rights Law provides that a company’s

articles of association may allow shareholders to ask questions

prior to the general meeting which will be answered by

management during the general meeting’s questions and

answers session prior to the vote on the agenda items. Although

the Articles of Association do not specifically address this point,

shareholders may ask questions in writing ahead of a general

meeting, which are taken into account in preparing the general

meeting’s questions and answers session. With regard to the

June 8, 2021 general meetings, shareholders were expressly

encouraged to send questions and comments to the Company

in advance by writing to a dedicated e-mail address indicated in

the convening notice and were also provided the opportunity for

a virtual Q&A session.

Given the COVID-19 outbreak - and related limitation on travel

and large gatherings - the Board of Directors decided to hold the

June 8, 2021 general meetings without a physical presence, as

permitted by Luxembourg law. In view thereof, arrangements

were made to provide the shareholders the opportunity to vote

electronically, and by proxy voting as set out in the convening

notice.

Identification of shareholders

Pursuant to the Shareholders’ Rights Law, listed companies now

have the ability to identify their shareholders and ultimately

improve communication between them and their shareholders.

Intermediaries, including those in third countries, are required to

provide the Company with information to enable the

identification of shareholders. Intermediaries in-scope of the

Shareholders' Rights Law are investment firms, credit

institutions and central securities depositories which provide

share safekeeping or administration of securities accounts or

maintenance services to shareholders or other persons. Third

country in-scope intermediaries are those which provide these

services to shareholders or other intermediaries with respect to

shares in the Company and are located outside of the European

Union.

Voting and information rights

There are no restrictions on the rights of Luxembourg or non-

Luxembourg residents to vote ArcelorMittal shares. Each share

entitles the shareholder to attend a general meeting of

shareholders in person or by proxy, to address the general

meeting of shareholders and to vote. Each share entitles the

holder to one vote at the general meeting of shareholders.

There is no minimum shareholding (beyond owning a single

share or representing the owner of a single share) required to

be able to attend or vote at a general meeting of shareholders.

The voting and information rights of ArcelorMittal’s shareholders

have been further expanded since the entry into force of the

Shareholders’ Rights Law.

Election and removal of directors

Members of the Board of Directors are elected by simple

majority of the represented shareholders at an ordinary general

meeting of shareholders. Directors are elected for a period

ending on a date determined at the time of their appointment.

The directors of ArcelorMittal are elected for three-year terms in

staggered intervals. Any director may be removed with or

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without cause by a simple majority vote at any general meeting

of shareholders.

(a) a director’s power to vote on a proposal, arrangement or

contract in which the director is materially interested;

If a Director has directly or indirectly a financial interest in a

transaction that is submitted to the Board of Directors for

approval and this interest conflicts with that of ArcelorMittal

(other than transactions which are ordinary business operations

and are entered into under normal conditions), the Director must

advise the Board of Directors of the existence and nature of the

conflict and cause a record of his/her statement to be included

in the minutes of the meeting. In addition, the Director may not

take part in the discussions on and may not vote on the relevant

transaction and he or she shall not be counted for the purposes

of whether the quorum is present, in which case the Board of

Directors may validly deliberate if at least the majority of the

non-conflicted directors are present or represented. At the next

following general meeting of shareholders of ArcelorMittal,

before any other resolution is put to a vote, a special report will

be made by the Board of Directors to the shareholders’ meeting

on any such transaction.

If a material transaction with a related party involves a Director,

that Director may not participate in the approval of such

transaction.

(b) the directors’ power, in the absence of an independent

quorum, to vote compensation to themselves or any members of

their body;

The remuneration of the Directors is determined each year by

the annual general meeting of shareholders subject to Article 17

of the Articles of Association. The annual shareholders meeting

of the Company decides on the directors’ remuneration. The

Executive Chairman is not remunerated for his membership on

the Board of Directors. The remuneration of the Executive

Chairman is determined by the Board’s ARCG Committee,

which consists solely of independent directors. For more

information, see “Management and employees—

Compensation”.

Pursuant to the Shareholders’ Rights Law, the shareholders

must be informed in detail of the remuneration of the members

of the Company's Board of Directors and its CEO and the

company's remuneration policy. Companies must prepare a

management remuneration policy describing all components,

criteria, methods and modalities applied to determine the fixed

and variable remuneration of such persons. Such remuneration

policy must contribute to the Company' business strategy and

long-term interests. It must be resubmitted to an advisory vote at

the general meeting of shareholders for approval each time

there is a significant change thereto and at least every four

years. In addition, companies must prepare a remuneration

report for the annual general meeting on the remuneration and

benefits granted to directors, and such remuneration report is

required to be submitted for an advisory vote at the general

meeting of shareholders each year.

borrowing powers can be varied;

Any transaction between ArcelorMittal or a subsidiary of

ArcelorMittal and a Director (or an affiliate of a Director) must be

conducted on arm’s length terms and, if material, must obtain

the approval of the Independent Directors.

(d) retirement or non-retirement of directors under an age limit

requirement

There is no retirement or non-retirement of directors under an

age limit requirement. However, on October 30, 2012, the Board

of Directors adopted a policy that places limitations on the terms

of independent directors as well as the number of directorships

Directors may hold in order to align the Company’s corporate

governance practices with best practices in this area. The policy

provides that an independent director may not serve on the

Board of Directors for more than 12 consecutive years, although

the Board of Directors may, by way of exception to this rule,

make an affirmative determination, on a case-by-case basis,

that he or she may continue to serve beyond the 12 years rule if

the Board of Directors considers it to be in the best interest of

the Company based on the contribution of the Director involved

and the balance between the knowledge, skills, experience and

need for renewal of the Board.

(e) number of shares, if any, required for director’s qualification.

Article 8.2 of the Articles of Association states that the members

of the Board of Directors do not have to be shareholders in the

Company. However, the Board of Directors introduced on

October 30, 2012 (as amended on November 7, 2017) a policy

that requires members of the Board of Directors to hold 4,000

shares in the Company (6,000 for the Lead Independent

Director). For more information, see “Management and

employees—Corporate governance—Specific characteristics of

the director role”.

ArcelorMittal’s Articles of Association provide that the Significant

Shareholder is entitled to nominate a number of candidates for

election by the shareholders to the Board of Directors in

proportion to its shareholding. The Significant Shareholder has

not exercised this right to date.

Amendment of the Articles of Association

Any amendments to the Articles of Association must be

approved by an extraordinary general meeting of shareholders

held in the presence of a Luxembourg notary, followed by the

publications required by Luxembourg law.

In order to be adopted, amendments of the Articles of

Association relating to the size and the requisite minimum

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number of independent and non-executive directors of the

Board of Directors, the composition of the Audit & Risk

Committee, and the nomination rights to the Board of Directors

of the Significant Shareholder require a majority of votes

representing two-thirds of the voting rights attached to the

shares in ArcelorMittal. The same majority rule would apply to

amendments of the provisions of the Articles of Association that

set out the foregoing rule.

Annual accounts

Each year before submission to the annual ordinary general

meeting of shareholders, the Board of Directors approves the

stand-alone audited annual accounts for ArcelorMittal, the

parent company of the ArcelorMittal group as well as the

consolidated annual accounts of the ArcelorMittal group, each of

which are prepared in accordance with IFRS. The Board of

Directors also approves the management reports on each of the

stand-alone audited annual accounts and the consolidated

annual accounts, and in respect of each of these sets of

accounts a report must be issued by the independent auditors.

The stand-alone audited annual accounts, the consolidated

annual accounts, the management reports and the auditor’s

reports will be available on request from the Company and on

the Company’s website from the date of publication of the

convening notice for the annual ordinary general meeting of

shareholders.

The stand-alone audited annual accounts and the consolidated

annual accounts, after their approval by the annual ordinary

general meeting of shareholders, are filed with the Luxembourg

Dividends

Except for shares held in treasury by the Company, each

ArcelorMittal share is entitled to participate equally in dividends

if and when declared out of funds legally available for such

purposes. The Articles of Association provide that the annual

ordinary general meeting of shareholders may declare a

dividend and that the Board of Directors may declare interim

dividends within the limits set by Luxembourg law.

Declared and unpaid dividends held by ArcelorMittal for the

account of its shareholders do not bear interest. Under

Luxembourg law, claims for dividends lapse in favor of

ArcelorMittal five years after the date on which the dividends

have been declared.

Merger and division

A merger whereby the Luxembourg company being acquired

transfers to an existing or newly incorporated Luxembourg

company all of its assets and liabilities in exchange for the

issuance to the shareholders of the company being acquired of

shares in the acquiring company, and a division whereby a

company (the company being divided) transfers all its assets

and liabilities to two or more existing or newly incorporated

companies in exchange for the issuance of shares in the

beneficiary companies to the shareholders of the company

being divided or to such company, and certain similar

restructurings must be approved by an extraordinary general

meeting of shareholders of the relevant companies held in the

presence of a notary. These transactions require the approval of

at least two-thirds of the votes cast at a general meeting of

shareholders of each of the companies where at least 50% of

the share capital is represented upon first call, with no such

quorum being required at a reconvened meeting.

Liquidation

In the event of the liquidation, dissolution or winding-up of

ArcelorMittal, the assets remaining after allowing for the

payment of all liabilities will be paid out to the shareholders pro

rata to their respective shareholdings. The decision to liquidate,

dissolve or wind-up the Company requires the approval of at

least two-thirds of the votes cast at a general meeting of

shareholders where at first call at least 50% of the share capital

is represented, with no quorum being required at a reconvened

meeting. Irrespective of whether the liquidation is subject to a

vote at the first or a subsequent extraordinary general meeting

of shareholders, it requires the approval of at least two-thirds of

the votes cast at the extraordinary general meeting of

shareholders.

Mandatory bid—squeeze-out right—sell-out right

Mandatory bid. The Luxembourg law of May 19, 2006

implementing Directive 2004/25/EC of the European Parliament

and the Council of April 21, 2004 on takeover bids, as amended

from time to time (the “Takeover Law”), provides that, if a person

acting alone or in concert acquires securities of ArcelorMittal

which, when added to any existing holdings of ArcelorMittal

securities, give such person voting rights representing at least

one third of all of the voting rights attached to the issued shares

in ArcelorMittal, this person is obliged to make an offer for the

remaining shares in ArcelorMittal. In a mandatory bid situation

the “fair price” is in principle considered to be the highest price

paid by the offeror or a person acting in concert with the offeror

for the securities during the 12–month period preceding the

mandatory bid.

ArcelorMittal’s Articles of Association provide that any person

who acquires shares giving them 25% or more of the total voting

rights of ArcelorMittal must make or cause to be made, in each

country where ArcelorMittal’s securities are admitted to trading

on a regulated or other market and in each of the countries in

which ArcelorMittal has made a public offering of its shares, an

unconditional public offer of acquisition for cash to all

shareholders for all of their shares and also to all holders of

securities giving access to capital or linked to capital or whose

rights are dependent on the profits of ArcelorMittal. The price

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offered must be fair and equitable and must be based on a

report drawn up by a leading international financial institution

nominated by the Company.

Squeeze-out right. The Takeover Law provides that, when an

offer (mandatory or voluntary) is made to all of the holders of

voting securities of ArcelorMittal and if after such offer the

offeror holds at least 95% of the securities carrying voting rights

and 95% of the voting rights, the offeror may require the holders

of the remaining securities to sell those securities (of the same

class) to the offeror. The price offered for such securities must

be a fair price. The price offered in a voluntary offer would be

presumed a fair price in the squeeze-out proceedings if the

offeror acquired at least 90% of the ArcelorMittal shares carrying

voting rights that were the subject of the offer. The price paid in

a mandatory offer is presumed a fair price. The consideration

paid in the squeeze-out proceedings must take the same form

as the consideration offered in the offer or consist solely of cash.

Moreover, an all-cash option must be offered to the remaining

ArcelorMittal shareholders. Finally, the right to initiate squeeze-

out proceedings must be exercised within three months

following the expiration of the offer.

Sell-out right. The Takeover Law provides that, when an offer

(mandatory or voluntary) is made to all of the holders of voting

securities of ArcelorMittal and if after such offer the offeror holds

securities carrying more than 90% of the voting rights, the

remaining security holders may require that the offeror purchase

the remaining securities of the same class. The price offered in

a voluntary offer would be presumed “fair” in the sell-out

proceedings if the offeror acquired at least 90% of the

ArcelorMittal shares carrying voting rights and which were the

subject of the offer. The price paid in a mandatory offer is

presumed to be a fair price. The consideration paid in the sell-

out proceedings must take the form of cash or liquid securities.

Moreover, an all-cash option must be offered to the remaining

ArcelorMittal shareholders. Finally, the right to initiate sell-out

proceedings must be exercised within three months following

the expiration of the offer.

Disclosure of significant ownership in ArcelorMittal shares

Holders of ArcelorMittal shares and derivatives or other financial

instruments linked to ArcelorMittal shares may be subject to the

notification obligations of the Luxembourg law of January 11,

2008, as last amended by the law dated February 27, 2018, on

transparency requirements regarding information about issuers

whose securities are admitted to trading on a regulated market

(the “Transparency Law”). The following description summarizes

these obligations. ArcelorMittal shareholders are advised to

consult with their own legal advisers to determine whether the

notification obligations apply to them.

The Transparency Law provides that, if a person acquires or

disposes of a shareholding in ArcelorMittal, and if following the

acquisition or disposal the proportion of voting rights held by the

person reaches, exceeds or falls below one of the thresholds of

5%, 10%, 15%, 20%, 25%, one-third, 50% or two-thirds of the

total voting rights existing when the situation giving rise to a

declaration occurs, the relevant person must simultaneously

notify ArcelorMittal and the CSSF (the Luxembourg securities

regulator) of the proportion of voting rights held by it further to

such event within four Luxembourg Stock Exchange trading

days of the day of execution of the transaction triggering the

threshold crossing.

A person must also notify ArcelorMittal of the proportion of his or

her voting rights if that proportion reaches, exceeds or falls

below the above-mentioned thresholds as a result of events

changing the breakdown of voting rights.

The above notification obligations also apply to persons who

directly or indirectly hold financial instruments linked to

ArcelorMittal shares. Pursuant to article 12 a. of the

Transparency Law, persons who hold ArcelorMittal shares and

financial instruments linked to ArcelorMittal shares must

aggregate their holding.

ArcelorMittal’s Articles of Association also provide that the above

disclosure obligations also apply to:

•any acquisition or disposal of shares resulting in the

threshold of 2.5% of voting rights in ArcelorMittal being

crossed upwards or downwards,

•any acquisition or disposal of shares resulting in the

threshold of 3.0% of voting rights in ArcelorMittal being

crossed upwards or downwards, and

•with respect to any shareholder holding at least 3.0%

of the voting rights in ArcelorMittal, to any acquisition or

disposal of shares resulting in successive thresholds of

1.0% of voting rights being crossed upwards or

downwards.

Pursuant to the Articles of Association, any person who acquires

shares giving him or her 5% or more or a multiple of 5% or more

of the voting rights must inform ArcelorMittal within 10

Luxembourg Stock Exchange trading days following the date on

which the threshold was crossed by registered letter with return

receipt requested as to whether he or she intends to acquire or

dispose of shares in ArcelorMittal within the next 12 months or

intends to seek to obtain control over ArcelorMittal or to appoint

a member to ArcelorMittal’s Board of Directors.

The sanction of suspension of voting rights automatically

applies, subject to limited exceptions set out in the

Transparency Law to any shareholder (or group of

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226

shareholders) who has (or have) crossed the thresholds set out

in article 7 of the Articles of Association and articles 8 to 15 of

the Transparency Law but have not notified the Company

accordingly. The sanction of suspension of voting rights will

apply until such time as the notification has been properly made

by the relevant shareholder(s).

For the purposes of calculating the percentage of a

shareholder’s voting rights in ArcelorMittal, the following are

taken into account:

•voting rights held by a third party with whom that

person or entity has concluded an agreement and

which obliges them to adopt, by concerted exercise of

the voting rights they hold, a lasting common policy

towards ArcelorMittal;

•voting rights held by a third party under an agreement

concluded with that person or entity providing for the

temporary transfer for consideration of the voting rights

in question;

•voting rights attaching to shares pledged as collateral

with that person or entity, provided the person or entity

controls the voting rights and declares its intention to

exercise them;

•voting rights attaching to shares in which a person or

entity holds a life interest;

•voting rights which are held or may be exercised within

the meaning of the four foregoing points by an

undertaking controlled by that person or entity;

•voting rights attaching to shares deposited with that

person or entity which the person or entity may

exercise at its discretion in the absence of specific

instructions from the shareholders;

•voting rights held by a third party in its own name on

behalf of that person or entity; and

•voting rights which that person or entity may exercise

as a proxy where the person or entity may exercise the

voting rights in its sole discretion.

In addition, the Articles of Association provide that, for the

purposes of calculating a person’s voting rights in ArcelorMittal,

the voting rights attached to shares underlying any other

financial instruments owned by that person (such as convertible

notes) must be taken into account for purposes of the

calculation described above.

Disclosure of insider dealing transactions

Members of the Board of Directors and the members of the

Executive Office, Executive Officers and other executives

fulfilling senior management responsibilities within ArcelorMittal

and falling with the definition of “Persons Discharging Senior

Managerial Responsibilities” set out below and persons closely

associated with them must disclose to the CSSF and to

ArcelorMittal all transactions relating to shares or debt

instruments of ArcelorMittal or derivatives or other financial

instruments linked to any shares or debt instruments of

ArcelorMittal (together the “Financial Instruments”) conducted by

them or for their account.

Such notifications shall be made promptly and not later than

three business days after the date of the transaction.

“Persons Discharging Senior Managerial Responsibilities” within

ArcelorMittal are the members of the Board of Directors, and the

Executive Office, the Executive Officers, and other executives

occupying a high level management position with regular access

to non-public material information relating, directly or indirectly,

to ArcelorMittal and have the authority to make management

decisions about the future development of the Company and its

business strategy (see “Directors, senior management and

employees— Directors and senior management" for a

description of senior management). Persons closely associated

with them include their respective family members.

Both information on trading in Financial Instruments by “Persons

Discharging Senior Managerial Responsibilities” and

ArcelorMittal’s Insider Dealing Regulations are available on

www.arcelormittal.com under “Investors—Corporate

Governance—Share Transactions by Management”. For more

information, see “Directors, senior management and employees

—Directors and senior management”.

In 2021, forty-one notifications were received by ArcelorMittal

from such persons and filed with the CSSF.

Related Party Transactions

The Shareholders’ Rights Law provides that a company is now

required to publicly disclose material transactions (excluding

"transactions taking place as part of the company's ordinary

activity and concluded under normal market conditions") with

related parties no later than at the time of conclusion of the

transaction. The same requirement applies to material

transactions concluded between related parties of a company

and subsidiaries of such company. The Board of Directors

must approve material transactions of the Company with related

parties. A transaction with a related party is material if (i) its

publication and divulgation may have a significant impact on the

economic decisions of shareholders and (ii) it may create a risk

for the company and its shareholders which are not related

parties, including minority shareholders. In the determination of

whether a transaction is material both the nature of the

transaction and the position of the related party must be taken

into account.

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Publication of regulated information

Since January 2009, disclosure to the public of “regulated

information” (within the meaning of the Luxembourg

Transparency Law) concerning ArcelorMittal has been made by

publishing the information through the centralized regulated

information filing and storage system managed by the

Luxembourg Stock Exchange and accessible in English and

French on www.bourse.lu, in addition to the publication by

ArcelorMittal of the information by way of press release. All

news and press releases issued by the Company are available

on www.arcelormittal.com in the “News and Media” section.

Limitation of directors’ liability/indemnification of Directors and

the members of the Executive Office

The Articles of Association provide that ArcelorMittal will, to the

broadest extent permitted by Luxembourg law, indemnify every

director and member of the Executive Office as well as every

former director or member of the Executive Office for fees, costs

and expenses reasonably incurred in the defense or resolution

(including a settlement) of all legal actions or proceedings,

whether civil, criminal or administrative, he or she has been

involved in his or her role as former or current director or

member of the Executive Office.

The right to indemnification does not exist in the case of gross

negligence, fraud, fraudulent inducement, dishonesty or for a

criminal offense, or if it is ultimately determined that the director

or members of the Executive Office has not acted honestly, in

good faith and with the reasonable belief that he or she was

acting in the best interests of ArcelorMittal.

The Company also maintains liability insurance for its directors

and officers, including insurance against liabilities arising under

the U.S. Securities Act of 1933, as amended, and the U.S.

Securities Exchange Act of 1934, as amended.

Material contracts

The following are material contracts, not entered into in the

ordinary course of business, to which ArcelorMittal has been a

party during the past two years.

ArcelorMittal Equity Incentive Plan, Performance Share Unit

Plan and Special Grant

For a description of such plans, please refer to “Management

and employees—Compensation.”

Memorandum of Understanding

Mr. Lakshmi Mittal, Mrs. Usha Mittal, Lumen Investments S.à r.l.,

Nuavam Investments S.à r.l. (together, the “MoU Group”) and

the Company are parties to a Memorandum of Understanding

(“MoU”), dated June 25, 2006, to combine Mittal Steel and

Arcelor in order to create the world’s leading steel company.

(Lumen Investments S.à r.l. and Nuavam Investments S.à r.l.

became parties following the assumption of the obligations of

original parties to the MoU that have since ceased to hold

Company shares). In April 2008, the Board of Directors

approved resolutions amending certain provisions of the MoU in

order to adapt it to the Company’s needs in the post-merger and

post-integration phase, as described under “Management and

employees—Corporate governance—Operation—Lead

Independent Director”.

On the basis of the MoU, Arcelor’s Board of Directors

recommended Mittal Steel’s offer for Arcelor, and the parties to

the MoU agreed to certain corporate governance and other

matters relating to the combined ArcelorMittal group. Certain

provisions of the MoU relating to corporate governance were

incorporated into the Articles of Association of ArcelorMittal at

the extraordinary general meeting of the shareholders on

November 5, 2007.

Certain additional provisions of the MoU expired effective

August 1, 2009 and on August 1, 2011. ArcelorMittal’s corporate

governance rules will continue to reflect, subject to those

provisions of the MoU that have been incorporated into the

Articles of Association, the best standards of corporate

governance for comparable companies and to conform with the

corporate governance aspects of the NYSE listing standards

applicable to non-U.S. companies and Ten Principles of

Corporate Governance of the Luxembourg Stock Exchange.

The following summarizes the main provisions of the MoU that

remain in effect or were in effect in 2021.

Standstill

The MoU Group agreed not to acquire, directly or indirectly,

ownership or control of an amount of shares in the capital stock

of the Company exceeding the percentage of shares in the

Company that it will own or control following completion of the

Offer (as defined in the MoU) for Arcelor and any subsequent

offer or compulsory buy-out, except with the prior written

consent of a majority of the independent directors on the

Company’s Board of Directors. Any shares acquired in violation

of this restriction will be deprived of voting rights and shall be

promptly sold by the MoU Group. Notwithstanding the above, if

(and whenever) the MoU Group holds, directly and indirectly,

less than 45% of the then-issued Company shares, the MoU

Group may purchase (in the open market or otherwise)

Company shares up to such 45% limit. In addition, the MoU

Group is also permitted to own and vote shares in excess of the

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228

threshold mentioned in the immediately preceding paragraph or

the 45% limit mentioned above, if such ownership results from

(1) subscription for shares or rights in proportion to its existing

shareholding in the Company where other shareholders have

not exercised the entirety of their rights or (2) any passive

crossing of this threshold resulting from a reduction of the

number of Company shares (e.g., through self-tender offers or

share buy-backs) if, in respect of (2) only, the decisions to

implement such measures were taken at a shareholders’

meeting in which the MoU Group did not vote or by the

Company’s Board of Directors with a majority of independent

directors voting in favor.

Once the MoU Group exceeds the threshold mentioned in the

first paragraph of this “Standstill” subsection or the 45% limit, as

the case may be, as a consequence of any corporate event set

forth in (1) or (2) above, it shall not be permitted to increase the

percentage of shares it owns or controls in any way except as a

result of subsequent occurrences of the corporate events

described in (1) or (2) above, or with the prior written consent of

a majority of the independent directors on the Company’s Board

of Directors.

If subsequently the MoU Group sells down below the threshold

mentioned in the first paragraph of this “Standstill” subsection or

the 45% limit, as the case may be, it shall not be permitted to

exceed the threshold mentioned in the first paragraph of this

“Standstill” subsection or the 45% limit, as the case may be,

other than as a result of any corporate event set out in (1) or

(2) above or with the prior written consent of a majority of the

independent directors.

Finally, the MoU Group is permitted to own and vote shares in

excess of the threshold mentioned in the first paragraph of this

“Standstill” subsection or the 45% limit mentioned above if it

acquires the excess shares in the context of a takeover bid by a

third party and (1) a majority of the independent directors of the

Company’s Board of Directors consents in writing to such

acquisition by the MoU Group or (2) the MoU Group acquires

such shares in an offer for all of the shares of the Company.

Non-compete

For so long as the MoU Group holds and controls at least 15%

of the outstanding shares of the Company or has

representatives on the Company’s Board of Directors or

Executive Office, the MoU Group and its affiliates will not be

permitted to invest in, or carry on, any business competing with

the Company, except for PT ISPAT Indo.

Exchange controls and other limitations affecting security

holders

There are no legislative or other legal provisions currently in

force in Luxembourg or arising under ArcelorMittal’s Articles of

Association that restrict the payment of dividends to holders of

ArcelorMittal shares not resident in Luxembourg, except for

regulations restricting the remittance of dividends and other

payments in compliance with United Nations and EU sanctions.

There are no limitations, either under the laws of Luxembourg or

in the Articles of Association, on the right of non-Luxembourg

nationals to hold or vote ArcelorMittal shares.

Luxembourg takeover law disclosure

The following disclosure is provided based on article 11 of the

Luxembourg law of May 19, 2006 transposing Directive

2004/25/EC of the European Parliament and the Council of

April 21, 2004 on takeover bids (the “Takeover Law”). The

Articles of Association are available on www.arcelormittal.com,

under Investors, Corporate Governance, Current Articles of

Association.

With regard to articles 11 (1) (a) and (c) of the Takeover Law,

the Company has issued a single category of shares (ordinary

shares), and the Company’s shareholding structure showing

each shareholder owning 2.5% or more of the Company’s share

capital is available elsewhere in this report and on

www.arcelormittal.com under Investors, Corporate Governance,

Shareholding Structure, where the shareholding structure chart

is updated monthly.

With regard to article 11(1) (b) of the Takeover Law, the ordinary

shares issued by the Company are listed on various stock

exchanges including NYSE and are freely transferable.

With regard to article 11(1) (d) of the Takeover Law, each

ordinary share of the Company gives right to one vote, as set

out in article 13.6 of the Articles of Association, and there are no

special control rights attaching to the shares. Article 8 of the

Articles of Association provides that the Mittal Shareholder (Mr

Lakshmi N. Mittal, Mrs Usha Mittal or any of their heirs or

successors acting directly or indirectly and/or the trust or trusts

of which Mr. Lakshmi N. Mittal, Mrs. Usha Mittal and/or their

heirs or successors are the beneficiaries, hold or control

ArcelorMittal shares or any other entity controlled, directly or

indirectly, by either of them) may, at its discretion, exercise the

right of proportional representation and nominate candidates for

appointment to the Board of Directors (defined as “Mittal

Shareholder Nominees”). The Mittal Shareholder has not, to

date, exercised that right.

Articles 11(1) (e) and (f) of the Takeover Law are not applicable

to the Company. However, the sanction of suspension of voting

rights automatically applies, subject to limited exceptions set out

in the Transparency Law as amended from time to time (as

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Management report

defined below), to any shareholder (or group of shareholders)

who has (or have) crossed the thresholds set out in article 7 of

the Articles of Association and articles 8 to 15 of the

Luxembourg law of January 11, 2008 on the transparency

requirements regarding issuers of securities (the “Transparency

Law”) but have not notified the Company accordingly. The

sanction of suspension of voting rights will apply until such time

as the notification has been properly made by the relevant

shareholder(s).

Article 11(1) (g) of the Takeover Law is not applicable to the

Company.

With regard to article 11(1) (h) of the Takeover Law, the Articles

of Association provide that the directors are elected at the

annual general meeting of shareholders for a term that may not

exceed three years, and may be re-elected. The rules governing

amendments to the Articles of Association are described

elsewhere in this report and are set out in article 19 of the

Articles of Association.

With regard to article 11(1) (i) of the Takeover Law, the annual

general meeting of shareholders ("AGM") held on June 8, 2021

granted the Board of Directors a new share buy-back

authorization whereby the Board of Directors may authorize the

acquisition or sale of Company shares including, but not limited

to, entering into off-market and over-the-counter transactions

and the acquisition of shares through derivative financial

instruments. Any acquisitions, disposals, exchanges,

contributions or transfers of shares by the Company or other

companies in the ArcelorMittal group must be in accordance

with the Luxembourg law of December 23, 2016 on market

abuse, Regulation (EU) No. 596/2014 of the European

Parliament and of the Council of April 16, 2014 on market abuse

and Commission Delegated Regulation (EU) No. 2016/1052 of

March 8, 2016 with regard to regulatory technical standards for

the conditions applicable to buy-back programs and stabilization

measures and may be carried out by all means, on or off-

market, including by a public offer to buy-back shares, or by the

use of derivatives or option strategies. The fraction of the capital

acquired or transferred in the form of a block of shares may

amount to the entire program. Such transactions may be carried

out at any time, including during a tender offer period, in

accordance with applicable laws and regulations, including

Section 10(b) and Section 9(a)(2) of the Securities Exchange

Act of 1934, as amended (the “Exchange Act”), and Rule 10b-5

promulgated under the Exchange Act. The authorization is valid

for a period of five years, i.e., until the annual general meeting of

shareholders to be held in 2022, or until the date of its renewal

by a resolution of the general meeting of shareholders if such

renewal date is prior to the 2022 AGM. Details relating to the

repurchase of shares, as approved by the June 8, 2021 AGM

can be found under "—Memorandum and Articles of Association

- Repurchase of shares".

Articles 11(1) (j) and (k) of the Takeover Law are not applicable

to the Company.

Taxation

United States taxation

The following discussion is a summary of the material U.S.

federal income tax consequences that are likely to be relevant to

U.S. Holders (as defined below) in respect of the ownership and

disposition of ArcelorMittal common shares (hereinafter the

“ArcelorMittal shares”) that are held as capital assets (such as

for investment purposes). This summary does not purport to

address all material tax consequences that may be relevant to a

particular U.S. Holder. This summary also does not take into

account the specific circumstances of particular investors, some

of which (such as tax-exempt entities, banks, insurance

companies, broker-dealers, traders in securities that elect to use

a mark-to-market method of accounting for their securities

holdings, regulated investment companies, real estate

investment trusts, partnerships and other pass-through entities,

investors liable for the U.S. alternative minimum tax, investors

that own or are treated as owning 10% or more of the total

combined voting power or value of ArcelorMittal’s shares,

investors that hold ArcelorMittal shares as part of a straddle,

hedge, conversion, constructive sale or other integrated

transaction, and U.S. Holders (as defined below) whose

functional currency is not the U.S. dollar) may be subject to

special tax rules. This summary is based on the U.S. Internal

Revenue Code of 1986, as amended (the “Code”), the Treasury

regulations issued thereunder, judicial decisions, and published

rulings and administrative pronouncements of the U.S. Internal

Revenue Service (“IRS”), all as in effect on the date hereof, and

all of which are subject to change (possibly with retroactive

effect) or to differing interpretations.

This summary does not address any aspects of U.S. federal tax

law other than income taxation, or any state, local, or non-U.S.

tax considerations that may be applicable to investors, or the

Medicare contribution tax applicable to net investment income of

certain non-corporate U.S. Holders. Investors are urged to

consult their tax advisors regarding the U.S. federal, state, local

and other tax consequences of acquiring, owning and disposing

of ArcelorMittal shares.

For purposes of this discussion, a “U.S. Holder” is a beneficial

owner of ArcelorMittal shares that is, for U.S. federal income tax

purposes:

•an individual citizen or resident of the United States;

•a corporation (or other entity taxable as a corporation

for U.S. federal income tax purposes) organized in or

under the laws of the United States, any state thereof,

or the District of Columbia; or

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230

•any other person that is subject to U.S. federal income

tax on a net income basis in respect of the ArcelorMittal

shares.

The U.S. federal income tax consequences of a partner in a

partnership holding ArcelorMittal shares generally will depend

on the status of the partner and the activities of the partnership.

The Company recommends that partners in such a partnership

consult their own tax advisors.

Except where specifically described below, this discussion

assumes that ArcelorMittal is not a passive foreign investment

company (“PFIC”) for U.S. federal income tax purposes. See “—

Passive foreign investment company ("PFIC") status”.

(a) Taxation of distributions

Cash distributions made by ArcelorMittal in respect of

ArcelorMittal shares will constitute a taxable dividend when such

distribution is actually or constructively received, to the extent

such distribution is paid out of the current or accumulated

earnings and profits of ArcelorMittal (as determined under U.S.

federal income tax principles). The amount of any distribution

will include the amount of any applicable Luxembourg

withholding tax. To the extent the amount of any distribution

received by a U.S. Holder in respect of ArcelorMittal shares

exceeds the current or accumulated earnings and profits of

ArcelorMittal, the distribution (1) will be treated as a non-taxable

return of the U.S. Holder’s adjusted tax basis in those

ArcelorMittal shares and (2) thereafter will be treated as U.S.-

source capital gain. Because ArcelorMittal does not maintain

calculations of earnings and profits under U.S. federal income

tax principles, it is expected that distributions generally will be

reported to U.S. Holders as dividends. Distributions of additional

ArcelorMittal shares that are made to U.S. Holders with respect

to their ArcelorMittal shares, and that are part of a pro rata

distribution to all ArcelorMittal shareholders, generally will not be

subject to U.S. federal income tax unless the U.S. Holder has

the right to receive cash or property instead, in which case the

U.S. Holder will be treated as if it received cash equal to the fair

market value of the distribution.

The U.S. dollar amount of a taxable dividend generally will be

included in the gross income of a U.S. Holder as ordinary

income derived from sources outside the United States for U.S.

foreign tax credit purposes and generally will be passive

category income for purposes of the foreign tax credit limitation.

Dividends paid in euro will be included in a U.S. Holder’s income

in a U.S. dollar amount calculated by reference to the exchange

rate in effect on the date the dividend is received; a recipient of

such dividends that converts such euro to dollars upon receipt

generally should not be required to recognize foreign currency

gain or loss in respect of the dividend income. Fluctuations in

the U.S. dollar-euro exchange rate between the date that U.S.

Holders receive a dividend and the date that they receive any

related refund of Luxembourg withholding tax may give rise to

foreign currency gain or loss. Such gain or loss will generally be

treated as ordinary income or loss for U.S. tax purposes.

Dividends paid by ArcelorMittal will not be eligible for the

dividends-received deduction generally allowed to U.S.

corporations in respect of dividends received from U.S.

corporations.

Subject to certain exceptions for short-term or hedged positions,

taxable dividends received by certain non-corporate U.S.

Holders (including individuals) with respect to the ArcelorMittal

shares will be subject to U.S. federal income taxation at rates

that are lower than the rates applicable to ordinary income if the

dividends represent “qualified dividend income”. Dividends paid

on the ArcelorMittal shares will be treated as qualified dividend

income if ArcelorMittal is not a PFIC in the year in which the

dividend was paid or in the year prior thereto. As discussed

further below, ArcelorMittal believes that it was not a PFIC for

U.S. federal income tax purposes with respect to its 2020 and

2021 taxable years, and ArcelorMittal does not anticipate being

a PFIC for its 2022 taxable year. See “—Passive foreign

investment company ("PFIC") status”.

U.S. Holders of ArcelorMittal shares should consult their own tax

advisors regarding the availability of the reduced rate of U.S.

federal income tax on dividends in light of their own particular

circumstances.

Subject to the limitations and conditions provided in the Code

and the applicable U.S. Treasury Regulations, a U.S. Holder of

ArcelorMittal shares may be able to claim a foreign tax credit

against its U.S. federal income tax liability in respect of any

Luxembourg income taxes withheld at the appropriate rate

applicable to the U.S. Holder from a dividend paid by

ArcelorMittal to such U.S. Holder and paid to the Luxembourg

government. Alternatively, the U.S. Holder may deduct such

Luxembourg income taxes from its U.S. federal taxable income,

provided that the U.S. Holder elects to deduct rather than credit

all foreign income taxes for the relevant taxable year. The rules

with respect to foreign tax credits are complex and involve the

application of rules that depend on a U.S. Holder’s particular

circumstances. Accordingly, U.S. Holders are urged to consult

their tax advisors regarding the availability of the foreign tax

credit under their particular circumstances.

(b) Taxation of sales, exchanges, or other dispositions of

ArcelorMittal shares

Sales or other taxable dispositions by U.S. Holders of

ArcelorMittal shares generally will give rise to gain or loss equal

to the difference between the amount realized on the disposition

and the U.S. Holder’s tax basis in such ArcelorMittal shares, as

determined in U.S. dollar. A U.S. Holder generally will have an

initial tax basis in each ArcelorMittal share equal to its U.S.

dollar cost to the U.S. Holder.

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Management report

In general, gain or loss recognized on the sale or exchange of

ArcelorMittal shares will be capital gain or loss and, if the U.S.

Holder’s holding period for such ArcelorMittal shares exceeds

one year, will be long-term capital gain or loss. Certain U.S.

Holders, including individuals, are eligible for preferential rates

of U.S. federal income tax in respect of long-term capital gains.

The deduction of capital losses against ordinary income is

subject to limitations under the Code.

Passive foreign investment company (“PFIC”) status

Special U.S. federal income tax rules apply to U.S. Holders

owning stock of a PFIC. ArcelorMittal believes that it currently is

not a PFIC for U.S. federal income tax purposes, and

ArcelorMittal does not expect to become a PFIC in the future.

This conclusion is based upon an annual analysis of its financial

position and an interpretation of the PFIC provisions that

ArcelorMittal believes is correct. No assurances can be made,

however, that the applicable tax law or relevant factual

circumstances will not change in a manner that affects the

determination of ArcelorMittal’s PFIC status. If, contrary to the

foregoing, ArcelorMittal were classified as a PFIC, a U.S. Holder

of ArcelorMittal shares would be subject to an increased tax

liability upon the gain realized on a sale or other disposition of

ArcelorMittal shares or upon the receipt of certain distributions

treated as “excess distributions”. Any gain realized would not be

treated as a capital gain but would be treated as if the U.S.

Holder had realized its gain and certain “excess distributions”,

as applicable, ratably over its holding period for ArcelorMittal

shares and would be taxed at the highest tax rate in effect for

each such year to which the gain was allocated, together with

an interest charge in respect of the tax attributable to each such

year. In addition, if ArcelorMittal were a PFIC and its shares

constitute “marketable stock”, a U.S. Holder may elect to be

taxed annually on a mark-to-market basis with respect to its

ArcelorMittal shares and mitigate the adverse tax

consequences. U.S. Holders should consult their tax advisors as

to the availability and consequences of a mark-to-market

election with respect to their shares of ArcelorMittal.

Foreign Financial Asset Reporting

Certain U.S. Holders that own “specified foreign financial

assets” with an aggregate value in excess of U.S.$50,000 on

the last day of the taxable year or U.S.$75,000 at any time

during the taxable year are generally required to file an

information statement along with their tax returns, currently on

Form 8938, with respect to such assets. “Specified foreign

financial assets” include any financial accounts held at a non-

U.S. financial institution, as well as securities issued by a non-

U.S. issuer that are not held in accounts maintained by financial

institutions. The understatement of income attributable to

“specified foreign financial assets” in excess of U.S.$5,000

extends the statute of limitations with respect to the tax return to

six years after the return was filed. U.S. Holders who fail to

report the required information could be subject to substantial

penalties. Prospective investors are encouraged to consult with

their own tax advisers regarding the possible application of

these rules, including the application of the rules to their

particular circumstances.

Backup withholding and information reporting

The payment of proceeds received upon the sale, exchange or

redemption of ArcelorMittal shares by U.S. Holders within the

United States (or through certain U.S.-related financial

intermediaries), and dividends on ArcelorMittal shares paid to

U.S. Holders in the United States (or through certain U.S.-

related financial intermediaries), will be subject to information

reporting and may be subject to backup withholding unless the

U.S. Holder (1) is an exempt recipient, and establishes that

exemption if required or (2) in the case of backup withholding,

provides an IRS Form W-9 (or an acceptable substitute form)

that contains the U.S. Holder’s taxpayer identification number

and that certifies that no loss of exemption from backup

withholding has occurred.

Backup withholding is not an additional tax. The amount of

backup withholding imposed on a payment to a U.S. Holder will

be allowed as a credit against the holder’s U.S. federal income

tax liability, if any, or as a refund, so long as the required

information is properly furnished to the IRS. Holders that are not

U.S. Holders may need to comply with certification procedures

to establish their non-U.S. status in order to avoid information

reporting and backup withholding tax requirements.

THE SUMMARY OF U.S. FEDERAL INCOME TAX

CONSEQUENCES SET OUT ABOVE IS INTENDED FOR

GENERAL INFORMATION PURPOSES ONLY. EACH

INVESTOR IN ARCELORMITTAL ORDINARY SHARES IS

URGED TO CONSULT ITS OWN TAX ADVISOR WITH

RESPECT TO THE PARTICULAR TAX CONSEQUENCES OF

THE ACQUISITION, OWNERSHIP AND DISPOSITION OF

ARCELORMITTAL SHARES BASED ON THE INVESTOR’S

PARTICULAR CIRCUMSTANCES.

Luxembourg taxation

The following is a summary addressing certain material

Luxembourg tax consequences that are likely to be relevant to

holders of shares in respect of the ownership and disposition of

shares in ArcelorMittal.

This summary does not purport to address all material tax

considerations that may be relevant to a holder or prospective

holder of ArcelorMittal shares. This summary also does not take

into account the specific circumstances of particular investors

some of which may be subject to special tax rules, including

dealers in securities, financial institutions, insurance companies,

investment funds.

Management report

232

This summary is based on the laws, regulations and applicable

tax treaties as in effect on the date hereof in Luxembourg, all of

which are subject to change, possibly with retroactive effect.

Holders of ArcelorMittal shares should consult their own tax

advisers as to the particular tax consequences, under the tax

laws of the country of which they are residents for tax purposes

of the ownership or disposition of ArcelorMittal shares.

This summary does not address the terms of employee stock

options or other incentive plans implemented by ArcelorMittal

and its subsidiaries and does not purport to provide the holders

of stock subscription options or other comparable instruments

(including shares acquired under employee share ownership

programs) with a description of the possible tax and social

security implications for them, nor to determine under which

conditions these options or other instruments are or may

become exercisable. These holders are therefore urged to

consult their own tax advisers as to the potential tax and social

security implications of an exercise of their options or other

instruments.

As used herein, a “Luxembourg individual” means an individual

resident in Luxembourg who is subject to personal income tax

(impôt sur le revenu) on his or her worldwide income from

Luxembourg or foreign sources, and a “Luxembourg company”

means a company or another entity resident in Luxembourg

subject to corporate income tax (impôt sur le revenu des

collectivités) on its worldwide income from Luxembourg or

foreign sources. For the purposes of this summary, Luxembourg

individuals and Luxembourg companies are collectively referred

to as “Luxembourg Holders”. A “non-Luxembourg Holder” means

any investor in ArcelorMittal shares other than a Luxembourg

Holder.

(a) Luxembourg withholding tax on dividends paid on

ArcelorMittal shares

Dividends distributed by ArcelorMittal will in principle be subject

to Luxembourg withholding tax at the rate of 15%.

Luxembourg resident corporate holders

No dividend withholding tax applies on dividends paid by

ArcelorMittal to a Luxembourg company (that is, a fully taxable

entity within the meaning of Article 159 of the Luxembourg

Income Tax Law) holding shares (or a Luxembourg permanent

establishment/representative of a qualifying foreign entity to

which the shares are attributable), which meets the qualifying

participation test (that is, a shareholding in ArcelorMittal of at

least 10% or having an acquisition cost of at least EUR

1.2 million held or committed to be held for a minimum one year

holding period, per Article 147 of the Luxembourg Income Tax

Law). If such exemption from dividend withholding tax does not

apply, a Luxembourg company may be entitled to a tax credit.

Luxembourg resident individual holders

Luxembourg withholding tax on dividends paid by ArcelorMittal

to a Luxembourg resident individual holder may entitle such

Luxembourg Holder to a tax credit for the tax withheld.

Non-Luxembourg Holders

Non-Luxembourg Holders of ArcelorMittal shares who have held

a shareholding in ArcelorMittal representing at least 10% of

ArcelorMittal’s share capital (or shares with an acquisition cost

of at least EUR 1.2 million) for an uninterrupted period of at least

12 months (or where held for a shorter period, where the holder

takes the commitment to hold the qualifying shareholding for

such period) may benefit from an exemption from the dividend

withholding tax if they are: (i) entities which fall within the scope

of Article 2 of the European Council Directive 2011/96/EU, as

amended (the “EU Parent-Subsidiary Directive”) and which are

not excluded to benefit from the EU Parent-Subsidiary Directive

under its mandatory general anti-avoidance rule (“GAAR”) in

each case as implemented in Luxembourg, or (ii) corporates

subject to a tax comparable to Luxembourg corporate income

tax and which are resident of a country having concluded a

double tax avoidance treaty with Luxembourg, or (iii) corporates

subject to a tax comparable to Luxembourg corporate income

tax and which are resident in a State being part of the European

Economic Area (EEA) other than a Member State of the

European Union, or (iv) corporates resident in Switzerland

subject to corporate income tax in Switzerland without benefiting

from an exemption.

Non-Luxembourg Holders of ArcelorMittal shares who are tax

resident in a country having a double tax avoidance treaty with

Luxembourg may claim for a reduced withholding tax rate or a

withholding tax relief under the conditions and subject to the

limitations set forth in the relevant treaty.

(b) Luxembourg income tax on dividends paid on

ArcelorMittal shares and capital gains

Luxembourg resident individual holders

For Luxembourg individuals, income in the form of dividends or

capital gains derived from ArcelorMittal shares will normally be

subject to individual income tax at the applicable progressive

rate with a current top effective marginal rate of 45.78%

including the unemployment fund contribution at the maximum

rate of 9%. Such dividends may benefit from the 50% exemption

set forth in Article 115(15a) of the Luxembourg Income Tax Law,

subject to fulfillment of the conditions set out therein. Capital

gains will only be taxable if they are realized on a sale of

ArcelorMittal shares, which takes place within the first six

months following their acquisition, or if the relevant holder (alone

or together with his/her spouse or registered partner and his/her

underage children), directly or indirectly, holds or has held more

than 10% of the ArcelorMittal shares at any time during the past

five years.

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Management report

Luxembourg resident corporate holders

For Luxembourg companies, which do not benefit from a special

tax regime, income in the form of dividends or capital gains

derived from ArcelorMittal shares will be subject to corporate

income tax and municipal business tax. The combined rate for

these two taxes (including an unemployment fund contribution of

7%) for Luxembourg companies with registered office in

Luxembourg City is 24.94% in 2021. Such dividends may

benefit either from the 50% exemption set forth in Article

115(15a) of the Luxembourg Income Tax Law or from the full

exemption set forth in Article 166 of the Luxembourg Income Tax

Law, subject in each case to fulfillment of the respective

conditions set out therein. Capital gains realized on the sale of

ArcelorMittal shares may benefit from the full exemption

provided for by the Grand Ducal Decree of December 21, 2001,

as amended, subject to fulfillment of the conditions set out

therein.

Non-Luxembourg Holders

An individual or corporate non-Luxembourg Holder of

ArcelorMittal shares who/which realizes a gain on disposal

thereof (and who/which does not have a permanent

establishment in Luxembourg to which the ArcelorMittal shares

would be attributable) will only be subject to Luxembourg

taxation on capital gains arising upon disposal of such shares if

such holder has (if an individual, alone or together with his or

her spouse or registered partner and underage children) directly

or indirectly held more than 10% of the capital of ArcelorMittal,

at any time during the past five years, and either (1) such holder

has been a resident of Luxembourg for tax purposes for at least

15 years and has become a non-resident within the last five

years preceding the realization of the gain, subject to any

applicable tax treaty, or (2) the disposal of ArcelorMittal shares

occurs within six months from their acquisition, subject to any

applicable tax treaty.

A corporate non-Luxembourg Holder, which has a permanent

establishment or a permanent representative in Luxembourg to

which ArcelorMittal shares would be attributable, will bear

corporate income tax and municipal business tax on dividends

received and/or a gain realized on a disposal of such shares

under the same conditions as are applicable to a Luxembourg

resident corporate holder, as described above.

Net wealth tax

Luxembourg net wealth tax will not be levied on a Luxembourg

Holder unless:

•the Luxembourg Holder is a legal entity subject to net

wealth tax in Luxembourg; or

•ArcelorMittal shares are attributable to an enterprise or

part thereof which is carried on through a permanent

establishment or a permanent representative in

Luxembourg of a non-resident entity.

Net wealth tax is levied annually at a digressive rate depending

on the amount of the net wealth of the above holders, as

determined for net wealth tax purposes (i.e. 0.5% on an amount

up to EUR 500 million and 0.05% on the amount of taxable net

wealth exceeding EUR 500 million).

ArcelorMittal shares may be exempt from net wealth tax subject

to the conditions set forth by Article 60 of the Law of October 16,

1934 on the valuation of assets (Bewertungsgesetz), as

amended.

Estate and gift tax

Luxembourg inheritance tax may be levied on the transfer of

ArcelorMittal shares upon the death of a Luxembourg individual.

Luxembourg gift tax will be levied in the event that a gift of

ArcelorMittal shares is made pursuant to a notarial deed signed

before a Luxembourg notary.

Other Luxembourg tax considerations

No registration tax will be payable by a holder of shares upon

the issue, subscription or acquisition of shares in ArcelorMittal or

upon the disposal of shares by sale or exchange.

Evaluation of disclosure controls and procedures

Disclosure controls and procedures

Management maintains disclosure controls and procedures that

are designed to ensure that information required to be disclosed

in the Company’s reports under the Securities Exchange Act of

1934, as amended (the “Exchange Act”) is recorded, processed,

summarized and reported within time periods specified in the

SEC’s rules and forms, and that such information is

accumulated and communicated to management, including the

Chief Executive Officer and Chief Financial Officer, as

appropriate, to allow timely decisions regarding required

disclosures. ArcelorMittal’s controls and procedures are

designed to provide reasonable assurance of achieving their

objectives.

Management carried out an evaluation, under the supervision

and with the participation of its Chief Executive Officer and Chief

Financial Officer, of the effectiveness of the design and

operation of the Company’s disclosure controls and procedures

(as defined in Exchange Act Rule 13a-15(e)) as of

December 31, 2021. Based upon that evaluation, the

Company’s Chief Executive Officer and Chief Financial Officer

concluded that the Company’s disclosure controls and

procedures were effective as of December 31, 2021 so as to

provide reasonable assurance that (1) information required to be

disclosed by the Company in the reports that the Company files

under the Exchange Act is recorded, processed, summarized

Management report

234

and reported within the time periods specified in the SEC’s rules

and forms, and (2) that such information is accumulated and

communicated to the Company’s management, including its

Chief Executive Officer and its Chief Financial Officer, as

appropriate, to allow timely decisions regarding required

disclosures.

There are inherent limitations to the effectiveness of any system

of disclosure controls and procedures, including the possibility of

human error and the circumvention or overriding of the controls

and procedures. Accordingly, even effective disclosure controls

and procedures can only provide reasonable assurance of

achieving their control objectives.

Management’s report on internal control over financial reporting

Management is responsible for establishing and maintaining

adequate internal control over financial reporting. Internal

control over financial reporting is a process designed to provide

reasonable assurance regarding the reliability of financial

reporting and the preparation of financial statements for external

purposes in accordance with generally accepted accounting

principles.

The Company’s internal control over financial reporting includes

those policies and procedures that:

•pertain to the maintenance of records that, in

reasonable detail, accurately and fairly reflect the

transactions and dispositions of the assets of

ArcelorMittal;

•provide reasonable assurance that transactions are

recorded, as necessary, to permit preparation of

financial statements in accordance with IFRS;

•provide reasonable assurance that receipts and

expenditures of ArcelorMittal are made in accordance

with authorizations of ArcelorMittal's management and

directors; and

•provide reasonable assurance that unauthorized

acquisition, use or disposition of ArcelorMittal’s assets

that could have a material effect on the financial

statements would be prevented or detected on a timely

basis.

Because of its inherent limitations, internal control over financial

reporting is not intended to provide absolute assurance that a

misstatement of the Company’s financial statements would be

prevented or detected. In addition, projections of any evaluation

of effectiveness to future periods are subject to the risk that

controls may become inadequate because of changes in

conditions, or that the degree of compliance with the policies or

procedures may deteriorate.

Management assessed the effectiveness of internal control over

financial reporting as of December 31, 2021 based upon the

framework in Internal Control—Integrated Framework (2013)

issued by the Committee of Sponsoring Organizations of the

Treadway Commission (“COSO”). Based on this assessment,

management concluded that ArcelorMittal’s internal control over

financial reporting was effective as of December 31, 2021.

The effectiveness of management’s internal control over

financial reporting as of December 31, 2021 has been audited

by the Company’s independent registered public accounting

firm, Deloitte Audit S.à r.l., (Firm Id- 1287), and their report as of

March 11, 2022 below expresses an unqualified opinion on the

Company’s internal control over financial reporting.

Changes in Internal Control over Financial Reporting

There have been no changes in the Company’s internal control

over financial reporting that occurred during the year ended

December 31, 2021 that have materially affected or are

reasonably likely to have materially affected the Company’s

internal control over financial reporting.

Change in certifying accountant

On February 9, 2021, following a tender process to appoint an

external auditor for the period beginning January 1, 2022, the

Audit and Risk Committee recommended to the Board that it

propose to the AGM to take place on May 4, 2022 (the "2022

AGM") the appointment of Ernst & Young S.A. (“EY”) as the new

external auditor of ArcelorMittal for the financial year 2022, and

on that date the Board resolved to make such proposal, which

appointment would become effective upon ratification at the

2022 AGM. Accordingly, the Company’s audit relationship with

Deloitte Audit S.à r.l. (“Deloitte”) would cease on the date of the

2022 AGM. In respect of fiscal years 2021 and 2020, Deloitte

did not issue a report on the consolidated financial statements of

ArcelorMittal that contained an adverse opinion or a disclaimer

of opinion, and the relevant Deloitte auditor’s reports in respect

of such consolidated financial statements were not qualified or

modified as to uncertainty, audit scope or accounting principles.

During fiscal years 2020 and 2021, there has not been any

disagreement with Deloitte over any matter of accounting

principles or practices, financial statement disclosure, or

auditing scope or procedures, which disagreement, if not

resolved to Deloitte’s satisfaction would have caused Deloitte to

make reference to the subject matter of the disagreement in

connection with its auditor’s reports, or any reportable event.

During fiscal years 2020 and 2021 and through March 11, 2022,

the Company did not consult with EY regarding: (i) the

application of accounting principles to any specified transaction,

either completed or proposed, or the type of audit opinion that

might be rendered on the financial statements of the Company;

or (ii) any matter that was either the subject of a disagreement

235

Management report

or reportable event. EY’s proposed appointment will be

presented for shareholder vote at the 2022 AGM. ArcelorMittal

has requested that EY review the foregoing disclosure and has

provided it with the opportunity to furnish the Company with a

letter addressed to the US Securities and Exchange

Commission containing any new information, clarification of the

Company’s expression of its views or the respects in which it

does not agree with such disclosure.

236

Management report

Glossary - definitions, terminology and principal subsidiaries

Definitions and terminology

Unless indicated otherwise, or the context otherwise requires, references herein to “ArcelorMittal”, “we”, “us”, “our”, “ArcelorMittal

Group”, “Group” and the “Company” or similar terms are to ArcelorMittal S.A. consolidated with its subsidiaries. References to

“ArcelorMittal S.A.”, “ArcelorMittal parent” or “parent of ArcelorMittal” are to ArcelorMittal S.A., formerly known as Mittal Steel Company

N.V. (“Mittal Steel”), having its registered office at 24-26, Boulevard d’Avranches, L-1160 Luxembourg, Grand Duchy of Luxembourg.

ArcelorMittal’s principal operating subsidiaries, categorized by reporting segment and location, are listed below.

For the purposes of this annual report, the names of the following ArcelorMittal subsidiaries as abbreviated below are used where

applicable.

Name of Subsidiary

Abbreviation

Country

NAFTA

ArcelorMittal Dofasco G.P.

ArcelorMittal Dofasco

Canada

ArcelorMittal México S.A. de C.V.

ArcelorMittal Mexico

Mexico

ArcelorMittal Long Products Canada G.P.

ArcelorMittal Long Products Canada

Canada

Brazil and neighboring countries ("Brazil")

ArcelorMittal Brasil S.A.

ArcelorMittal Brasil

Brazil

Acindar Industria Argentina de Aceros S.A.

Acindar

Argentina

Europe

ArcelorMittal France S.A.S.

ArcelorMittal France

France

ArcelorMittal Belgium N.V.

ArcelorMittal Belgium

Belgium

ArcelorMittal España S.A.

ArcelorMittal España

Spain

ArcelorMittal Flat Carbon Europe S.A.

AMFCE

Luxembourg

ArcelorMittal Poland S.A.

ArcelorMittal Poland

Poland

ArcelorMittal Eisenhüttenstadt GmbH

ArcelorMittal Eisenhüttenstadt

Germany

ArcelorMittal Bremen GmbH

ArcelorMittal Bremen

Germany

ArcelorMittal Méditerranée S.A.S.

ArcelorMittal Méditerranée

France

ArcelorMittal Belval & Differdange S.A.

ArcelorMittal Belval & Differdange

Luxembourg

ArcelorMittal Hamburg GmbH

ArcelorMittal Hamburg

Germany

ArcelorMittal Duisburg GmbH

ArcelorMittal Duisburg

Germany

ArcelorMittal International Luxembourg S.A.

ArcelorMittal International Luxembourg

Luxembourg

Africa and Commonwealth of Independent States ("ACIS")

ArcelorMittal South Africa Ltd.

ArcelorMittal South Africa

South Africa

JSC ArcelorMittal Temirtau

ArcelorMittal Temirtau

Kazakhstan

PJSC ArcelorMittal Kryvyi Rih

ArcelorMittal Kryvyi Rih

Ukraine

Mining

ArcelorMittal Mining Canada G.P. and ArcelorMittal Infrastructure Canada

G.P.

ArcelorMittal Mines and Infrastructure Canada

("AMMC")

Canada

ArcelorMittal Liberia Ltd.

ArcelorMittal Liberia

Liberia

237

Management report

In addition, unless indicated otherwise, or the context otherwise requires, references in this annual report to abbreviations or terms

shown below have the following definitions:

ARS

Argentine Peso, the official currency of Argentina

INR

Indian rupee, the official currency of India

Articles of

Association

the amended and restated articles of association of

ArcelorMittal, dated January 17, 2022 filed as

Exhibit 1.1 hereto

Iron pellets

agglomerated ultra-fine iron ore particles of a size

and quality suitable for use in steel-making

processes

AUD$ or AUD

Australian dollars, the official currency of Australia

Kilometers

measures of distance are stated in kilometers,

each of which equals approximately 0.62 miles, or

1000 in meters, each of which equals

approximately 3.28 feet

Brownfield project

the expansion of an existing operation

KZT

the Kazakhstani tenge, the official currency of

Kazakhstan

C$ or CAD

Canadian dollars, the official currency of Canada

Metallurgical coal

a broader term than coking coal that includes all

coals used in steelmaking, such as coal used for

the pulverized coal injection (“PCI”) process

Executive Office

the Executive Chairman, Mr. Lakshmi N. Mittal and

Chief Executive Officer, Mr. Aditya Mittal

PLN

Polish złoty, the offcial currency of Poland

CIS

the countries of the Commonwealth of Independent

States

Production capacity

the annual production capacity of plant and

equipment based on existing technical parameters

as estimated by management

CNY

Chinese yuan, the official currency of China

Ps or MXN

the Mexican peso, the official currency of the

United Mexican States

Coking coal

coal that, by virtue of its coking properties, is used in

the manufacture of coke, which is used in the

steelmaking process

Real, reais or R$

Brazilian reais, the official currency of Brazil

Crude steel

the first solid steel product upon solidification of

liquid steel, including ingots from conventional mills

and semis (e.g., slab, billet and blooms) from

continuous casters

ROM

run of mine - mined iron ore or coal to be fed to a

preparation and/or concentration process

Downstream

finishing operations: flat products - the process after

the production of hot-rolled coil/plates, and long

products - the process after the production of

blooms/billets (including production of bars, wire

rods, SBQ, etc.)

Sales

include shipping and handling fees and costs billed

to a customer in a sales transaction

DMTU or dmtu

dry metric tonne unit

SBQ

special bar quality steel, a high-quality long

product

DRI

direct reduced iron, a metallic iron formed by

removing oxygen from iron ore without the formation

of, or passage through, a smelting phase. DRI can

be used as feedstock for steel production

Significant

Shareholder

a trust (HSBC Trustee (C.I.) Limited, as trustee), of

which Mr. Lakshmi N. Mittal, Mrs. Usha Mittal and

their children are the beneficiaries

Energy coal

coal used as a fuel source in electrical power

generation, cement manufacture and various

industrial applications. Energy coal may also be

referred to as steam or thermal coal

UAH

Ukrainian hryvnia, the official currency of Ukraine

Euro, euros, EUR or

€

the official currency of the European Union (“EU”)

member states participating in the European

Monetary Union

US$, $, dollars,

USD or U.S. dollar

United States dollar, the official currency of the

United States

Sinter

a metallic input used in the blast furnace steel-

making process, which aggregates fines, binder and

other materials into a coherent mass by heating

without melting

Upstream

operations that precede downstream steel-making,

coking coal, coke, sinter, DRI, blast furnace, basic

oxygen furnace (“BOF”), electric arc furnace

(“EAF”), casters & hot rolling/plate mill

Spanish Stock

Exchanges

the stock exchanges of Madrid, Barcelona, Bilbao

and Valencia

Wet recoverable

a quantity of iron ore or coal recovered after the

material from the mine has gone through a

preparation and/or concentration process

excluding drying

Steel products

finished and semi-finished steel products, and

exclude raw materials (including those described

under “upstream” below), direct reduced iron

(“DRI”), hot metal, coke, etc.

ZAR

South African rand, the official currency of the

Republic of South Africa

Tons, net tons or ST

short tons are used in measurements involving steel

products as well as crude steel, iron ore, iron ore

pellets, DRI, hot metal, coke, coal, pig iron and

scrap (a short ton is equal to 907.2 kilograms or

2,000 pounds)

Metric Tonnes or

metric tonnes and are used in measurements

involving steel products, as well as crude steel,

iron ore, iron ore pellets, DRI, hot metal, coke,

coal, pig iron and scrap (a metric tonne is equal to

1,000 kilograms or 2,204.62 pounds)

Management report

238

Executive Officers

those executives of the Company who are

supporting the Executive Office and jointly with the

Executive Office represent the senior management

of the Company

Probable mineral

reserve

is the economically mineable part of an indicated

and, in some cases, a measured mineral resource.

EAF

Electric arc furnaces are used to produce steel from

scrap melted using electricity, in contrast to the cast

iron sector (blast furnace – converter) where it is

produced from iron ore.

Mineral resource

is a concentration or occurrence of material of

economic interest in or on the Earth's crust in such

form, grade or quality, and quantity that there are

reasonable prospects for economic extraction. A

mineral resource is a reasonable estimate of

mineralization, taking into account relevant factors

such as cut-off grade, likely mining dimensions,

location or continuity, that, with the assumed and

justifiable technical and economic conditions, is

likely to, in whole or in part, become economically

extractable. It is not merely an inventory of all

mineralization drilled or sampled.

GMB

the Group Management Board, the former senior

management body which was replaced by the CEO

Office subsequently renamed Executive Office. The

Executive Office, supported by seven Executive

Officers, makes up the Company’s senior

management

Measured mineral

resource

is that part of a mineral resource for which quantity

and grade or quality are estimated on the basis of

conclusive geological evidence and sampling. The

level of geological certainty associated with a

measured mineral resource is sufficient to allow a

qualified person to apply modifying factors, in

sufficient detail to support detailed mine planning

and final evaluation of the economic viability of the

deposit. Because a measured mineral resource

has a higher level of confidence than the level of

confidence of either an indicated mineral resource

or an inferred mineral resource, a measured

mineral resource may be converted to a proven

mineral reserve or to a probable mineral reserve.

Greenfield project

the development of a new project

Indicated mineral

resource

is that part of a mineral resource for which quantity

and grade or quality are estimated on the basis of

adequate geological evidence and sampling. The

level of geological certainty associated with an

indicated mineral resource is sufficient to allow a

qualified person to apply modifying factors in

sufficient detail to support mine planning and

evaluation of the economic viability of the deposit.

Because an indicated mineral resource has a

lower level of confidence than the level of

confidence of a measured mineral resource, an

indicated mineral resource may only be converted

to a probable mineral reserve.

Green steel

steel products subject to auditor verified certification

of the CO2 savings achieved

Inferred mineral

resource

is that part of a mineral resource for which quantity

and grade or quality are estimated on the basis of

limited geological evidence and sampling. The

level of geological uncertainty associated with an

inferred mineral resource is too high to apply

relevant technical and economic factors likely to

influence the prospects of economic extraction in a

manner useful for evaluation of economic viability.

Because an inferred mineral resource has the

lowest level of geological confidence of all mineral

resources, which prevents the application of the

modifying factors in a manner useful for evaluation

of economic viability, an inferred mineral resource

may not be considered when assessing the

economic viability of a mining project, and may not

be converted to a mineral reserve.

Mineral reserve

is an estimate of tonnage and grade or quality of

indicated and measured mineral resources that, in

the opinion of the qualified person, can be the basis

of an economically viable project. More specifically,

it is the economically mineable part of a measured

or indicated mineral resource, which includes

diluting materials and allowances for losses that

may occur when the material is mined or extracted.

Proven mineral

reserve

is the economically mineable part of a measured

mineral resource and can only result from

conversion of a measured mineral resource.

Management report

239

Chief Executive Officer and Chief Financial Officer’s responsibility statement

We confirm, to the best of our knowledge, that:

1.the consolidated financial statements of ArcelorMittal presented in this Annual Report and prepared in conformity with International Financial Reporting Standards as issued

by the International Accounting Standards Board and as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position, profit or loss of

ArcelorMittal and the undertakings included within the consolidation taken as a whole; and

2.the management report includes a fair review of the development and performance of the business and position of ArcelorMittal and undertakings included within the

consolidation taken as a whole, together with a description of the principal risks and uncertainties they face.

Chief Executive Officer Chief Financial Officer

Mr. Aditya Mittal Mr. Genuino Christino

March 11, 2022 March 11, 2022

Management report

240

Year ended December 31,

Notes

2021

2020

2019

Sales

4.1 and 12.1

76,571

53,270

70,615

(including 10,519, 5,142 and 7,442 of sales to related parties for 2021, 2020 and

2019, respectively)

Cost of sales

4.2 and 12.2

57,337

49,138

68,887

(including 1,873, 1,151 and 1,092 of purchases from related parties for 2021, 2020

and 2019, respectively)

Gross margin

19,234

4,132

1,728

Selling, general and administrative expenses

2,258

2,022

2,355

Operating income (loss)

16,976

2,110

(627)

Income from investments in associates, joint ventures and other investments

2.6

2,204

234

347

Financing costs - net

6.2

(1,155)

(1,256)

(1,652)

Income (loss) before taxes

18,025

1,088

(1,932)

Income tax expense

10.1

2,460

1,666

459

Net income (loss) (including non-controlling interests)

15,565

(578)

(2,391)

Net income (loss) attributable to equity holders of the parent

14,956

(733)

(2,454)

Net income attributable to non-controlling interests

609

155

Net income (loss) (including non-controlling interests)

15,565

(578)

(2,391)

Year ended December 31,

2021

2020

2019

Earning (loss) per common share (in U.S. dollar)

Basic

13.53

(0.64)

(2.42)

Diluted

13.49

(0.64)

(2.42)

Weighted average common shares outstanding (in millions)

11.3

Basic

1,105

1,140

1,013

Diluted

1,108

1,140

1,013

The accompanying notes are an integral part of these consolidated financial statements.

242 Consolidated financial statements

ArcelorMittal and Subsidiaries

Consolidated Statements of Operations

(millions of U.S. dollar, except share and per share data)

Year ended December 31,

2021

2020

2019

Net income (loss) (including non-controlling interests)

15,565

(578)

(2,391)

Items that can be recycled to the consolidated statements of operations

Derivative financial instruments:

Gain arising during the period

2,921

354

Reclassification adjustments for gain included in the consolidated

statements of operations and financial position (basis adjustments)

(384)

(119)

(1,004)

2,537

(67)

(650)

Exchange differences arising on translation of foreign operations:

(Loss) gain arising during the period

(960)

(1,388)

177

Reclassification adjustments for loss (gain) included in the consolidated

statements of operations

105

—

(105)

(855)

(1,388)

Share of other comprehensive income (loss) related to associates and joint

ventures

Gain (loss) arising during the period

509

(82)

Reclassification adjustments for (gain) loss included in the consolidated

statements of operations and financial position (basis adjustments)

(266)

—

243

(72)

Income tax (expense) benefit related to components of other comprehensive

income (loss) that can be recycled to the consolidated statements of operations

(705)

363

279

Items that cannot be recycled to the consolidated statements of operations

Investments in equity instruments at FVOCI:

Gain arising during the period

764

486

Share of other comprehensive (loss) gain related to associates and joint

ventures

(2)

762

502

Employee benefits - Recognized actuarial gains (losses)

636

(333)

(259)

Share of other comprehensive income (loss) related to associates and

joint ventures

(14)

—

Income tax (expense) benefit related to components of other comprehensive

income (loss) that cannot be recycled to the consolidated statements of

operations

(313)

(32)

Total other comprehensive income (loss)

2,326

(826)

(624)

Total other comprehensive income (loss) attributable to:

Equity holders of the parent

2,365

(781)

(666)

Non-controlling interests

(39)

(45)

2,326

(826)

(624)

Total comprehensive income (loss)

17,891

(1,404)

(3,015)

Total comprehensive income (loss) attributable to:

Equity holders of the parent

17,321

(1,514)

(3,120)

Non-controlling interests

570

110

105

Total comprehensive income (loss)

17,891

(1,404)

(3,015)

The accompanying notes are an integral part of these consolidated financial statements.

Consolidated financial statements 243

ArcelorMittal and Subsidiaries

Consolidated Statements of Other Comprehensive Income

(millions of U.S. dollar, except share and per share data)

December 31,

Notes

2021

2020

ASSETS

Current assets:

Cash and cash equivalents

6.1.3

4,215

5,600

Restricted cash and other restricted funds

6.1.3

156

363

Trade accounts receivable and other (including 1,084 and 269 from related parties at December

31, 2021 and 2020, respectively)

4.3 and 12.1

5,143

3,072

Inventories

4.4

19,858

12,328

Prepaid expenses and other current assets

4.5

5,567

2,281

Assets held for sale

2.3.2

—

4,329

Total current assets

34,939

27,973

Non-current assets:

Goodwill and intangible assets

5.1 and 5.3

4,425

4,312

Property, plant and equipment and biological assets

5.2, 5.3 and 7

30,075

30,622

Investments in associates and joint ventures

2.4

10,319

6,817

Other investments

2.5

1,146

2,980

Deferred tax assets

10.4

8,147

7,866

Other assets

4.6

1,461

1,482

Total non-current assets

55,573

54,079

Total assets

90,512

82,052

LIABILITIES AND EQUITY

Current liabilities:

Short-term debt and current portion of long-term debt

6.1.2.1 and 7

1,913

2,507

Trade accounts payable and other (including 431 and 272 to related parties at December 31, 2021

and 2020, respectively)

4.7 and 12.2

15,093

11,525

Short-term provisions

9.1

1,064

935

Accrued expenses and other liabilities

4.8

4,831

4,197

Income tax liabilities

1,266

464

Liabilities held for sale

2.3.2

—

3,039

Total current liabilities

24,167

22,667

Non-current liabilities:

Long-term debt, net of current portion

6.1.2.2 and 7

6,488

9,815

Deferred tax liabilities

10.4

2,369

1,832

Deferred employee benefits

8.2

3,772

4,656

Long-term provisions

9.1

1,498

1,697

Other long-term obligations

9.2

874

1,148

Total non-current liabilities

15,001

19,148

Total liabilities

39,168

41,815

Contingencies and commitments

9.3 and 9.4

Equity:

Common shares (no par value, 1,241,418,599 and 1,361,418,599 shares authorized, 982,809,772

and 1,102,809,772 shares issued, and 910,893,202 and 1,080,734,413 shares outstanding at

December 31, 2021 and 2020, respectively)

350

393

Treasury shares (71,916,570 and 22,075,359 common shares at December 31, 2021 and 2020,

respectively, at cost)

(2,186)

(538)

Additional paid-in capital

31,803

35,247

Mandatorily convertible notes

11.2

509

840

Retained earnings

36,702

22,097

Reserves

(18,072)

(19,759)

Equity attributable to the equity holders of the parent

49,106

38,280

Non-controlling interests

2,238

1,957

Total equity

51,344

40,237

Total liabilities and equity

90,512

82,052

The accompanying notes are an integral part of these consolidated financial statements.

244 Consolidated financial statements

ArcelorMittal and Subsidiaries

Consolidated Statements of Financial Position

(millions of U.S. dollar, except share and per share data)

Reserves

Items that can be recycled to

the Consolidated Statements

of Operations

Items that cannot be recycled to

the Consolidated Statements of

Operations

Shares1

Capital

Treasury

Mandatorily

Convertible

Notes

Additional

Paid-in

Capital

Retained

Earnings

Foreign

Currency

Translation

Adjustments

Unrealized

Gains

(Losses) on

Derivative

Financial

Instruments

relating to

CFH

Unrealized

Gains

(Losses) on

Investments

in Equity

Instruments

at FVOCI

Recognized

actuarial (losses)

gains

Equity

attributable to

the equity

holders of the

parent

Non-

controlling

interests

Total

Equity

Balance at December 31, 2018

1,014

364

(569)

—

34,894

25,611

(16,116)

639

212

(2,949)

42,086

2,022

44,108

Net (loss) income (including non-controlling interests)

—

(2,454)

—

(2,454)

(2,391)

Other comprehensive income (loss)

—

(9)

(404)

(291)

(666)

(624)

Total comprehensive income (loss)

—

(2,454)

(9)

(404)

(291)

(3,120)

105

(3,015)

Recognition of share-based payments (note 8.3)

—

(68)

—

(11)

—

(11)

Dividend (notes 11.4 and 11.5)

—

(203)

—

(203)

(154)

(357)

Share buyback (note 11.1)

(4)

—

(90)

—

(90)

—

(90)

Sharing of cash flow hedge (gain) from INR/USD hedging

programs related to AMNS India (note 2.4.1)

—

(141)

—

(141)

—

(141)

Transfer of fair value reserve of equity instruments designated

at FVOCI (note 2.5)

—

(70)

—

Other movements

—

(11)

Balance at December 31, 2019

1,012

364

(602)

—

34,826

22,883

(16,125)

235

180

(3,240)

38,521

1,962

40,483

Net (loss) income (including non-controlling interests)

—

(733)

—

(733)

155

(578)

Other comprehensive income (loss)

—

(928)

(6)

431

(278)

(781)

(45)

(826)

Total comprehensive income (loss)

—

(733)

(928)

(6)

431

(278)

(1,514)

110

(1,404)

Offering of common shares (note 11.1)

—

711

—

740

—

740

Mandatorily convertible notes (note 11.2)

—

549

840

(305)

(28)

—

1,056

—

1,056

Recognition of share-based payments (note 8.3)

—

Dividend (notes 11.4 and 11.5)

—

(162)

Share buyback (note 11.1)

(36)

—

(500)

—

(500)

—

(500)

Transfer of fair value reserve of equity instruments designated

at FVOCI (note 2.5)

—

(28)

—

Mandatorily convertible bonds extension (note 11.2)

—

Other movements

—

(53)

—

(53)

(6)

(59)

Balance at December 31, 2020

1,081

393

(538)

840

35,247

22,097

(17,053)

229

583

(3,518)

38,280

1,957

40,237

Net income (including non-controlling interests)

—

14,956

—

14,956

609

15,565

Other comprehensive income (loss)

—

(1,191)

2,461

594

501

2,365

(39)

2,326

Total comprehensive income (loss)

—

14,956

(1,191)

2,461

594

501

17,321

570

17,891

Cancellation of shares (note 11.1)

—

(43)

3,493

—

(3,450)

—

Recognition of share-based payments (note 8.3)

—

Mandatorily convertible notes (note 11.2)

—

(331)

—

(589)

—

(920)

—

(920)

Share buyback (note 11.1)

(171)

—

(5,170)

—

(5,170)

—

(5,170)

Dividend (notes 11.4 and 11.5)

—

(312)

—

(312)

(289)

(601)

Put option NSI (note 11.5.2)

—

(119)

—

(119)

—

(119)

Divestment of Cleveland-Cliffs shares (note 2.5)

—

678

—

(678)

—

Other movements

—

(9)

—

(9)

—

(9)

Balance at December 31, 2021

911

350

(2,186)

509

31,803

36,702

(18,244)

2,690

499

(3,017)

49,106

2,238

51,344

1. Amounts are in millions of shares (treasury shares are excluded).

The accompanying notes are an integral part of these consolidated financial statements.

245 Consolidated financial statements

ArcelorMittal and Subsidiaries

Consolidated Statements of Changes in Equity

(millions of U.S. dollar, except share and per share data)

Year ended December 31,

Notes

2021

2020

2019

Operating activities:

Net income (loss) (including non-controlling interests)

15,565

(578)

(2,391)

Adjustments to reconcile net income (loss) to net cash provided by operations:

Depreciation and amortization

5.1 and 5.2

2,523

2,960

3,067

Net Impairment (reversal) charges

5.3

(218)

(133)

1,927

Interest expense

6.2

357

477

695

Interest income

6.2

(79)

(56)

(88)

Income tax expense

10.1

2,460

1,666

459

Net gain on disposal of subsidiaries

2.3.1

(104)

(1,460)

(101)

Income from investments in associates, joint ventures and other investments

2.6

(2,204)

(234)

(347)

Provision on pensions and OPEB

8.2

147

430

435

Change in fair value adjustment on call option on mandatory convertible bonds and pellet

purchase agreement

6.2

143

320

Unrealized foreign exchange effects

(154)

321

Write-downs of inventories to net realizable value, provisions and other non-cash operating

expenses net

4.4

1,313

597

818

Changes in assets and liabilities that provided (required) cash, net of acquisitions and disposals:

Trade accounts receivable and other

4.1

(2,535)

(76)

964

Inventories

4.4

(8,654)

1,786

2,469

Trade accounts payable and other

4.7

4,780

(214)

(1,236)

Interest paid

(479)

(604)

(723)

Interest received

118

Income taxes paid

(2,128)

(705)

(484)

Dividends received from associates, joint ventures and other investments

261

189

370

Cash contributions to plan assets and benefits paid for pensions and OPEB

8.2

(268)

(332)

(348)

VAT and other amounts (paid) received to/from public authorities

(123)

400

196

Other working capital and provisions movements

(672)

(564)

(110)

Net cash provided by operating activities

9,905

4,082

6,017

Investing activities:

Purchase of property, plant and equipment and intangibles

(3,008)

(2,439)

(3,572)

Disposals of net assets of subsidiaries, net of cash disposed of 4, 7 and 38 in 2021, 2020 and

2019, respectively

2.3.1

(4)

497

514

Acquisitions of net assets of subsidiaries, net of cash acquired of 10, nil and 3 in 2021, 2020

and 2019, respectively

2.2.4

(25)

—

(46)

Lease installments and capital expenditure refund relating to ArcelorMittal Italia acquisition

(14)

(139)

(200)

Acquisition of AMNS India

2.4.1

—

(755)

Acquisition of Uttam Galva and KSS Petron debt

4.6

—

(83)

Cash collateral for the TSR receivables retained in ArcelorMittal USA after disposal

6.1.3

260

(260)

—

Disposal of common and preferred Cleveland-Cliffs shares

2.5

2,680

—

(Acquisitions) disposals of financial assets

2.5

(80)

196

Other investing activities net

(149)

271

122

Net cash used in investing activities

(340)

(2,011)

(3,824)

Financing activities:

(Payments) proceeds from mandatorily convertible subordinated notes

11.2

(1,196)

1,237

—

Payments from put and call option on shares

2.3.2

—

(135)

—

Proceeds from short-term debt

6.1.3

287

430

600

Proceeds from long-term debt

6.1.3

147

323

5,772

Payments of short-term debt

6.1.3

(1,664)

(1,503)

(1,811)

Payments of long-term debt

6.1.3

(2,332)

(1,645)

(3,299)

Equity offering

11.1

—

740

—

Share buyback

11.1

(5,170)

(500)

(90)

Dividends paid (includes 260, 181 and 129 of dividends paid to non-controlling shareholders in

2021, 2020 and 2019, respectively)

(572)

(181)

(332)

Repayment of cash pooling liability to Acciaierie d'Italia

2.3.1

(199)

—

Payment of principal portion of lease liabilities and other financing activities

6.1.3

(199)

(264)

(326)

Net cash (used in) provided by financing activities

(10,898)

(1,498)

514

Net (decrease) increase in cash and cash equivalents

(1,333)

573

2,707

Effect of exchange rate changes on cash

(55)

163

(22)

Cash and cash equivalents:

At the beginning of the year

5,600

4,867

2,172

Reclassification of the period-end cash and cash equivalents from (to) held for sale

2.3

(3)

At the end of the year

4,215

5,600

4,867

The accompanying notes are an integral part of these consolidated financial statements.

246 Consolidated financial statements

ArcelorMittal and Subsidiaries

Consolidated Statements of Cash Flows

(millions of U.S. dollar, except share and per share data)

SUMMARY OF NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1: ACCOUNTING PRINCIPLES

1.1

Basis of presentation

1.2

Use of judgment and estimates

1.3

Accounting standards applied

NOTE 2: SCOPE OF CONSOLIDATION

2.1

Basis of consolidation

2.2

Investments in subsidiaries

2.3

Divestments and assets held for sale

2.4

Investments in associates and joint arrangements

2.5

Other investments

2.6

Income (loss) from investments in associates, joint ventures and other investments

NOTE 3: SEGMENT REPORTING

3.1

Reportable segments

3.2

Geographical information

3.3

Sales by type of products

3.4

Disaggregated revenue

NOTE 4: OPERATING DATA

4.1

Revenue

4.2

Cost of sales

4.3

Trade accounts receivable and other

4.4

Inventories

4.5

Prepaid expenses and other current assets

4.6

Other assets

4.7

Trade accounts payable and other

4.8

Accrued expenses and other liabilities

NOTE 5: GOODWILL, INTANGIBLE AND TANGIBLE ASSETS

5.1

Goodwill and intangible assets

5.2

Property, plant and equipment and biological assets

5.3

Impairment of intangible assets, including goodwill, and tangible assets

NOTE 6: FINANCING AND FINANCIAL INSTRUMENTS

6.1

Financial assets and liabilities

6.2

Financing costs - net

6.3

Risk management policy

NOTE 7: LEASES

NOTE 8: PERSONNEL EXPENSES AND DEFERRED EMPLOYEE BENEFITS

8.1

Employees and key management personnel

8.2

Deferred employee benefits

8.3

Share-based payments

NOTE 9: PROVISIONS, CONTINGENCIES AND COMMITMENTS

9.1

Provisions

9.2

Other long-term obligations

9.3

Contingent liabilities

9.4

Commitments

NOTE 10: INCOME TAXES

10.1

Income tax expense (benefit)

10.2

Income tax recorded directly in equity and/or other comprehensive income

10.3

Uncertain tax positions

10.4

Deferred tax assets and liabilities

10.5

Tax losses, tax credits and other tax benefits carried forward

NOTE 11: EQUITY

11.1

Share details

11.2

Equity instruments and hybrid instruments

11.3

Earnings per common share

11.4

Dividends

11.5

Non-controlling interests

NOTE 12: RELATED PARTIES

12.1

Sales and trade receivables

12.2

Purchases and trade payables

12.3

Other transactions with related parties

NOTE 13: SUBSEQUENT EVENTS

NOTE 14: PRINCIPAL ACCOUNTANT FEES AND SERVICES

Consolidated financial statements 247

(millions of U.S. dollar, except share and per share data)

NOTE 1: ACCOUNTING PRINCIPLES

ArcelorMittal (“ArcelorMittal” or the “Company”), together with its

subsidiaries, owns and operates steel manufacturing and mining

facilities in Europe, North and South America, Asia and Africa.

Collectively, these subsidiaries and facilities are referred to in

the consolidated financial statements as the “operating

subsidiaries”. These consolidated financial statements were

authorized for issuance on March 11, 2022 by the Company’s

Board of Directors.

1.1 Basis of presentation

The consolidated financial statements have been prepared on a

historical cost basis, except for equity instruments and certain

trade receivables at fair value through other comprehensive

income ("FVOCI"), financial assets at fair value through profit or

loss ("FVTPL"), derivative financial instruments, biological

assets and certain assets and liabilities held for sale, which are

measured at fair value less cost to sell, inventories, which are

measured at the lower of net realizable value or cost, and the

financial statements of the Company’s Venezuelan tubular

production facilities Industrias Unicon CA (“Unicon”) and the

Company's Argentinian operation Acindar Industria Argentina de

Aceros S.A. ("Acindar"), for which hyperinflationary accounting

is applied (see note 2.2.2). The consolidated financial

statements have been prepared in accordance with International

Financial Reporting Standards (“IFRS”) as issued by the

International Accounting Standards Board (“IASB”) and as

adopted by the European Union and are presented in U.S. dollar

with all amounts rounded to the nearest million, except for share

and per share data.

As from April 1, 2021, ArcelorMittal implemented changes to its

organizational structure whereby primary responsibility for

captive mining operations whose output is mainly consumed by

their respective steel segments has been transferred to such

segments. The Mining segment retains primary responsibility for

the operation of the seaborne oriented operations at

ArcelorMittal Mining Canada G.P. and ArcelorMittal

Infrastructure Canada G.P. ("AMMC") and ArcelorMittal Liberia

Limited, and continues to provide technical support to all mining

operations within the Company. Accordingly, the Company

modified the structure of its segment information in order to

reflect changes in its approach to managing its operations and

segment disclosures have been recast to reflect this new

segmentation in conformity with IFRS. Only the seaborne-

oriented operations of AMMC and ArcelorMittal Liberia Limited

are reported within the Mining segment. The results of all other

mines are henceforth accounted for within the steel segment

that they primarily supply.

1.2 Use of judgment and estimates

The preparation of consolidated financial statements in

conformity with IFRS recognition and measurement principles

and, in particular, making the critical accounting judgments

requires the use of estimates and assumptions that affect the

reported amounts of assets, liabilities, revenues and expenses.

Management reviews its estimates on an ongoing basis using

currently available information. Changes in facts and

circumstances or obtaining new information or more experience

may result in revised estimates, and actual results could differ

from those estimates.

The following summary provides further information about the

Company’s critical accounting policies under which significant

judgments, estimates and assumptions are made. It should be

read in conjunction with the notes mentioned in the summary:

•Deferred tax assets (note 10.4): The Company assesses

the recoverability of deferred tax assets based on future

taxable income projections, which are inherently

uncertain and may be subject to changes over time.

Judgment is required to assess the impact of such

changes on the measurement of these assets and the

time frame for their utilization. In addition, the Company

applies judgment to recognize income tax liabilities when

they are probable and can be reasonably estimated

depending on the interpretation, which may be uncertain,

of applicable tax laws and regulations. ArcelorMittal

periodically reviews its estimates to reflect changes in

facts and circumstances.

•Provisions for pensions and other post-employment

benefits (note 8.2): Benefit obligations and plan assets

can be subject to significant volatility, in particular due to

changes in market conditions and actuarial assumptions.

Such assumptions differ by plan, take local conditions

into account and include discount rates, expected rates of

compensation increases, health care cost trend rates,

mortality and retirement rates. They are determined

following a formal process involving the Company's

expertise and independent actuaries. Assumptions are

reviewed annually and adjusted following actuarial and

experience changes.

•Provisions (note 9): Provisions, which result from legal or

constructive obligations arising as a result of past events,

are recognized based on the Company's, and in certain

instances, third-party's best estimate of costs when the

obligation arises. They are reviewed periodically to take

into consideration changes in laws and regulations and

underlying facts and circumstances.

•Impairment of tangible and intangible assets, including

goodwill (note 5.3): In the framework of the determination

of the recoverable amount of assets, the estimates,

judgments and assumptions applied for the value in use

calculations relate primarily to growth rates, expected

248 Consolidated financial statements

changes to average selling prices, shipments and direct

costs. Assumptions for average selling prices and

shipments are based on historical experience and

expectations of future changes in the market. Discount

rates are reviewed annually. In the context of its

announced decarbonization strategy with the aim to be

carbon neutral or comply with the legal obligation of

carbon neutrality in certain jurisdictions by 2050, the

Company applied estimates and judgments for related

capital expenditures, operating costs and carbon

emission cost on the basis of historical experience and

expectations of future changes.

•Business combinations (note 2.2.3): Assets acquired and

liabilities assumed as part of a business combination are

recorded at their acquisition-date fair values. Similarly,

consideration including consideration receivable and

contingent consideration is measured at fair value.

Determining the fair value of identifiable assets and

liabilities requires the use of valuation techniques which

may include judgment and estimates and which may

affect the allocation of the amount of consideration paid

to the assets and liabilities acquired and goodwill or gain

from a bargain purchase recorded as part of the business

combination.

•Financial instruments (note 6.1.5) and financial amounts

receivable (note 4.6): Certain of the Company's financial

instruments are classified as Level 3 as they include

unobservable inputs. In particular, the Company uses

estimates to compute unobservable historical volatility

based on movements of stock market prices for the fair

valuation of the call option on the 1,000 mandatory

convertible bonds.

•Mineral reserve and resource estimates (note 5.2):

Proven iron ore and coal reserves are those quantities

whose recoverability can be determined with reasonable

certainty from a given date forward and under existing

government regulations, economic and operating

conditions; probable reserves have a lower degree of

assurance but high enough to assume continuity between

points of observation. Mineral resource estimates

constitute the part of a mineral deposit that have the

potential to be economically and legally extracted or

produced at the time of the resource determination. The

potential for economic viability is established through

qualitative evaluation of relevant technical and economic

factors likely to influence the prospect of economic

extraction. A measured mineral resource is that part of a

mineral resource for which quantity, grade or quality,

densities, shape, and physical characteristics are so well

established that they can be estimated with confidence

sufficient to allow the appropriate application of technical

and economic parameters, to support production

planning and evaluation of the economic viability of the

deposit. The estimate is based on detailed and reliable

exploration, sampling and testing information gathered

through appropriate techniques from locations such as

outcrops, trenches, pits, workings and drill holes that are

spaced closely enough to confirm both geological and

grade continuity. An indicated mineral resource is that

part of a mineral resource for which quantity, grade or

quality, densities, shape and physical characteristics, can

be estimated with a level of confidence sufficient to allow

the appropriate application of technical and economic

parameters, to support mine planning and evaluation of

the economic viability of the deposit. The estimate is

based on detailed and reliable exploration sampling and

testing information gathered through appropriate

techniques from locations such as outcrops, trenches,

pits, workings and drill holes that are spaced closely

enough for geological and grade continuity to be

reasonably assumed. An inferred mineral resource is that

part of a mineral resource for which quantity and grade or

quality can be estimated on the basis of geological

evidence and limited sampling, and reasonably assumed

but not verified geological and grade continuity. The

estimate is based on limited information and sampling

gathered through appropriate techniques from locations

such as outcrops, trenches, pits, workings and drill holes.

Estimates of mineral reserves and resources and the

estimates of mine life have been prepared by

ArcelorMittal experienced engineers and geologists and

detailed independent verifications of the methods and

procedures are conducted on a regular basis by external

consultants. Reserves and resources are updated

annually and calculated using a reference price duly

adjusted for quality, ore content, logistics and other

considerations. In order to estimate reserves and

resources, estimates are required for a range of

geological, technical and economic factors, including

quantities, grades, production techniques, recovery rates,

production costs, transport costs, commodity demand,

commodity prices and exchange rates. Estimating the

quantity and/or grade of reserves and resources requires

the size, shape and depth of ore bodies to be determined

by analyzing geological data such as drilling samples.

This process may require complex and difficult geological

judgments to interpret the data. Because the economic

assumptions used to estimate reserves and resources

change from period to period, and because additional

geological data is generated during the course of

operations, estimates of reserves and resources may

change from period to period.

249 Consolidated financial statements

1.3 Accounting standards applied

1.3.1 Adoption of new IFRS standards, amendments and

interpretations applicable from January 1, 2021

On January 1, 2021, the Company adopted the following

amendments which did not have a material impact on the

consolidated financial statements of the Company:

•Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and

IFRS 16 published by the IASB on August 27, 2020 as

Phase 2 of the Interest Rate Benchmark Reform. The

amendments complement those issued in 2019 and

focus on the effects on financial statements when a

company replaces the old interest rate benchmark with

an alternative benchmark rate as a result of the reform.

The amendments in this final phase relate to:

◦changes to contractual cash flows—a company

will not have to derecognize or adjust the

carrying amount of financial instruments for

changes required by the reform, but will instead

update the effective interest rate to reflect the

change to the alternative benchmark rate;

◦hedge accounting—a company will not have to

discontinue its hedge accounting solely because

it makes changes required by the reform, if the

hedge meets other hedge accounting criteria;

and

◦disclosures—a company will be required to

disclose information about new risks arising

from the reform and how it manages the

transition to alternative benchmark rates.

•Amendments to IFRS 4 "Insurance contracts" published

by the IASB on June 25, 2020 which provide an

extension of the temporary exemption from applying

IFRS 9 until January 1, 2023 in order to align with the

effective date of IFRS 17 "Insurance Contracts".

In addition, on April 1, 2021, the Company adopted "Covid-19-

Related Rent Concessions beyond June 30, 2021 (Amendment

to IFRS 16)" published by the IASB on March 31, 2021 that

extends, by one year, the May 2020 amendment that provides

lessees with an exemption from assessing whether a

COVID-19-related rent concession is a lease modification. This

amendment did not have a material impact on the consolidated

financial statements of the Company.

1.3.2 New IFRS standards, amendments and interpretations

applicable from 2022 onward

On May 18, 2017, the IASB issued IFRS 17 "Insurance

Contracts", which is designed to achieve the goal of a

consistent, principle-based accounting for insurance contracts.

IFRS 17 requires insurance liabilities to be measured at a

current fulfillment value and provides a more uniform

measurement and presentation approach for all insurance

contracts. IFRS 17 supersedes IFRS 4 "Insurance Contracts"

and related interpretations. On June 25, 2020, the IASB issued

amendments to IFRS 17, including a deferral of the effective

date to periods beginning on or after January 1, 2023 and

should be applied retrospectively unless impracticable, with

earlier adoption permitted if both IFRS 15 "Revenue from

Contracts with Customers" and IFRS 9 "Financial Instruments"

have also been applied.

On February 12, 2021, the IASB issued amendments to IAS 1

and IFRS Practice Statement 2. The amendments are intended

to help preparers in deciding which accounting policies to

disclose in their financial statements and gives further clarity on

the materiality assessment of accounting policies. The

amendments are effective for annual periods beginning on or

after January 1, 2023 and are to be applied prospectively, with

early adoption permitted.

On February 12, 2021, the IASB also issued amendments to

IAS 8. The amendments clarify the distinction between a change

in accounting policies and a change in accounting estimates.

The amendments are effective for annual periods beginning on

or after January 1, 2023 and changes in accounting policies or

accounting estimates on or after the start of that period with

early adoption permitted. Changes in accounting policies are to

be applied retrospectively while changes in accounting

estimates are to be applied prospectively.

On May 14, 2020, the IASB issued the following narrow-scope

amendments :

•Amendments to IFRS 3 "Business Combinations"

updated the reference to the Conceptual Framework for

financial reporting, without changing the accounting

requirements for business combinations. The

amendments are to be applied prospectively.

•Amendments to IAS 16 "Property, Plant and Equipment"

prohibit deducting from the cost of an item of property,

plant and equipment any proceeds from selling items

produced while bringing that asset to the location and

condition necessary for it to be capable of operating in

the manner intended by management. Instead, an entity

recognizes the proceeds from selling such items and

Consolidated financial statements 250

(millions of U.S. dollar, except share and per share data)

related cost in profit or loss. The amendments are to be

applied retrospectively,

•Amendments to IAS 37 "Provisions, Contingent Liabilities

and Contingent Assets" clarify that the cost of fulfilling a

contract comprises the costs a company includes when

assessing whether a contract will be loss-making are

costs that relate directly to the contract. Costs that relate

directly to a contract can either be incremental costs of

fulfilling that contract or an allocation of other costs that

relate directly to fulfilling the contract. The amendments

are to be applied prospectively.

•Minor amendments as part of the Annual Improvements

2018-2020 to:

•IFRS 1 "First-time Adoption of International Financial

Reporting Standards" related to cumulative translation

differences for a subsidiary as a first time user.

•IFRS 9 "Financial Instruments" related to which fees an

entity includes when it applies the ‘10 per cent’ test in

assessing whether to derecognize a financial liability.

▪IFRS 16 "Leases" removing the reimbursement of

leasehold improvements by the lessor from illustrative

example 13 in order to resolve any potential confusion

regarding the treatment of lease incentives and

▪IAS 41 "Agriculture" removing the requirement for

entities to exclude taxation cash flows when measuring

the fair value of a biological asset using a present

value technique to ensure consistency with the

requirements in IFRS 13.

The minor amendments are to be applied prospectively, with

early adoption permitted. The minor amendments and the

narrow-scope amendments are effective for annual periods

beginning on or after January 1, 2022.

1.3.3 New IFRS standards, amendments and interpretations not

yet endorsed by the European Union

On January 23, 2020, the IASB issued narrow-scope

amendments to IAS 1 to clarify how to classify debt and other

liabilities as current or non-current. The amendments aim to

promote consistency in applying the requirements by helping

companies determine whether, in the statement of financial

position, debt and other liabilities with an uncertain settlement

date should be classified as current (due or potentially due to be

settled within one year) or non-current. The amendments

include clarifying the classification requirements for debt a

company might settle by converting it into equity. On July 15,

2020, the IASB postponed the effective date of the

amendments. The amendments are effective for annual periods

beginning on or after January 1, 2023 and are to be applied

retrospectively, with early adoption permitted.

On May 7, 2021, the IASB issued amendments to IAS 12

"Income Taxes" for deferred taxes related to assets and

liabilities arising from a single transaction. The amendments

clarify how to account for deferred tax on transactions such as

leases and decommissioning obligations. The amendments are

effective for annual periods beginning on or after January 1,

2023 with early adoption permitted. The amendments are to be

applied retrospectively.

The Company does not expect that the adoption of these

amendments will have a material impact to its consolidated

financial statements. The Company does not plan to early adopt

the new accounting standards and amendments.

NOTE 2: SCOPE OF CONSOLIDATION

2.1 Basis of consolidation

The consolidated financial statements include the accounts of

the Company, its subsidiaries and its interests in associated

companies and joint arrangements. Subsidiaries are

consolidated from the date the Company obtains control

(ordinarily the date of acquisition) until the date control ceases.

The Company controls an entity when the Company is exposed

to or has rights to variable returns from its involvement with the

entity and has the ability to affect those returns through its

power over the entity.

Associates are those companies over which the Company has

the ability to exercise significant influence on the financial and

operating policy decisions, which it does not control. Generally,

significant influence is presumed to exist when the Company

holds more than 20% of the voting rights. Joint arrangements,

which include joint ventures and joint operations, are those over

whose activities the Company has joint control, typically under a

contractual arrangement. In joint ventures, ArcelorMittal

exercises joint control and has rights to the net assets of the

arrangement. The investment is accounted for under the equity

method and therefore recognized at cost at the date of

acquisition and subsequently adjusted for ArcelorMittal’s share

in undistributed earnings or losses since acquisition, less any

impairment incurred. Any excess of the cost of the acquisition

over the Company’s share of the net fair value of the identifiable

assets, liabilities, and contingent liabilities of the associate or

joint venture recognized at the date of acquisition is considered

as goodwill. The goodwill, if any, is included in the carrying

amount of the investment and is evaluated for impairment as

part of the investment. The consolidated statements of

operations include the Company’s share of the profit or loss of

associates and joint ventures from the date that significant

influence or joint control commences until the date significant

influence or joint control ceases, adjusted for any impairment

Consolidated financial statements 251

(millions of U.S. dollars, except share and per share data)

losses. Adjustments to the carrying amount may also be

necessary for changes in the Company’s proportionate interest

in the investee arising from changes in the investee’s equity that

have not been recognized in the investee’s profit or loss. The

Company’s share of those changes is recognized directly in the

relevant reserve within equity.

The Company assesses the recoverability of its investments

accounted for under the equity method whenever there is an

indication of impairment. In determining the value in use of its

investments, the Company estimates its share in the present

value of the projected future cash flows expected to be

generated by operations of associates and joint ventures. The

amount of any impairment is included in income (loss) from

investments in associates, joint ventures and other investments

in the consolidated statements of operations (see also note 2.6).

For investments in joint operations, in which ArcelorMittal

exercises joint control and has rights to the assets and

obligations for the liabilities relating to the arrangement, the

Company recognizes its assets, liabilities and transactions,

including its share of those incurred jointly.

Investments in other entities, over which the Company and/or its

operating subsidiaries do not have the ability to exercise

significant influence, are accounted for as investments in equity

instruments at FVOCI with any resulting gain or loss, net of

related tax effect, recognized in the consolidated statements of

other comprehensive income. Realized gains and losses from

the sale of investments in equity instruments at FVOCI are

reclassified from other comprehensive income to retained

earnings within equity upon disposal.

While there are certain limitations on the Company’s operating

and financial flexibility arising from the restrictive and financial

covenants of the Company’s principal credit facilities described

in note 6.1.2, there are no significant restrictions resulting from

borrowing agreements or regulatory requirements on the ability

of consolidated subsidiaries, associates and jointly controlled

entities to transfer funds to the parent in the form of cash

dividends to pay commitments as they come due.

Intercompany balances and transactions, including income,

expenses and dividends, are eliminated in the consolidated

financial statements. Gains and losses resulting from

intercompany transactions are also eliminated.

Non-controlling interests represent the portion of profit or loss

and net assets not held by the Company and are presented

separately in the consolidated statements of operations, in the

consolidated statements of other comprehensive income and

within equity in the consolidated statements of financial position.

252 Consolidated financial statements

2.2 Investments in subsidiaries

2.2.1 List of subsidiaries

The table below provides a list of the Company’s principal operating subsidiaries at December 31, 2021. Unless otherwise stated, the

subsidiaries listed below have share capital consisting solely of ordinary shares or voting interests in the case of partnerships, which are

held directly or indirectly by the Company and the proportion of ownership interests held equals to the voting rights held by the

Company. The country of incorporation corresponds to their principal place of operations.

Name of Subsidiary

Country

% of Ownership

NAFTA

ArcelorMittal Dofasco G.P.

Canada

100.00%

ArcelorMittal México S.A. de C.V.

Mexico

100.00%

ArcelorMittal Long Products Canada G.P.

Canada

100.00%

Brazil and neighboring countries ("Brazil")

ArcelorMittal Brasil S.A.

Brazil

97.01%

Acindar Industria Argentina de Aceros S.A. ("Acindar")

Argentina

100.00%

Europe

ArcelorMittal France S.A.S.

France

100.00%

ArcelorMittal Belgium N.V.

Belgium

100.00%

ArcelorMittal España S.A.

Spain

99.85%

ArcelorMittal Flat Carbon Europe S.A.

Luxembourg

100.00%

ArcelorMittal Poland S.A.

Poland

100.00%

ArcelorMittal Eisenhüttenstadt GmbH

Germany

100.00%

ArcelorMittal Bremen GmbH

Germany

100.00%

ArcelorMittal Méditerranée S.A.S.

France

100.00%

ArcelorMittal Belval & Differdange S.A.

Luxembourg

100.00%

ArcelorMittal Hamburg GmbH

Germany

100.00%

ArcelorMittal Duisburg GmbH

Germany

100.00%

ArcelorMittal International Luxembourg S.A.

Luxembourg

100.00%

Africa and Commonwealth of Independent States ("ACIS")

ArcelorMittal South Africa Ltd. ("AMSA")

South Africa

69.22%

JSC ArcelorMittal Temirtau

Kazakhstan

100.00%

PJSC ArcelorMittal Kryvyi Rih ("AM Kryvyi Rih")

Ukraine

95.13%

Mining

ArcelorMittal Mining Canada G.P. and ArcelorMittal Infrastructure Canada G.P. (AMMC)

Canada

85.00%

ArcelorMittal Liberia Ltd

Liberia

85.00%

2.2.2 Translation of financial statements denominated in foreign

currency

The functional currency of ArcelorMittal S.A. is the U.S. dollar.

The functional currency of each of the principal operating

subsidiaries is the local currency, except for ArcelorMittal

México, AMMC and ArcelorMittal International Luxembourg,

whose functional currency is the U.S. dollar and ArcelorMittal

Poland, whose functional currency is the euro.

Transactions in currencies other than the functional currency of

a subsidiary are recorded at the rates of exchange prevailing at

the date of the transaction. Monetary assets and liabilities in

currencies other than the functional currency are remeasured at

the rates of exchange prevailing on the date of the consolidated

statements of financial position and the related translation gains

and losses are reported within financing costs in the

consolidated statements of operations. Non-monetary items that

are carried at cost are translated using the rate of exchange

prevailing at the date of the transaction. Non-monetary items

that are carried at fair value are translated using the exchange

rate prevailing when the fair value was determined and the

related translation gains and losses are reported in the

consolidated statements of comprehensive income.

Upon consolidation, the results of operations of ArcelorMittal’s

subsidiaries, associates and joint arrangements whose

functional currency is other than the U.S. dollar are translated

into U.S. dollar at the monthly average exchange rates and

assets and liabilities are translated at the year-end exchange

Consolidated financial statements 253

(millions of U.S. dollars, except share and per share data)

rates. Translation adjustments are recognized directly in other

comprehensive income and are included in net income

(including non-controlling interests) only upon sale or liquidation

of the underlying foreign subsidiary, associate or joint

arrangement.

Since July 1, 2018, Argentina has been considered a highly

inflationary country and therefore the financial statements of the

Company's long production facilities Acindar Industria Argentina

de Aceros S.A. ("Acindar") in Argentina, using a historical cost

approach, are adjusted prospectively to reflect the changes in

the general purchasing power of the local currency before being

translated into U.S. dollar at the year end exchange rate. The

Company used an estimated general price index (Consumer

Price Index "IPC") which changed by 50.3% and 36.1% for the

year ended December 31, 2021 and 2020, respectively, for this

purpose. As a result of the inflation-related adjustments on non-

monetary items, a gain of 33 and 30 was recognized in net

financing costs for the year ended December 31, 2021 and

2020, respectively.

Since 2010 Venezuela has been considered a hyperinflationary

economy and therefore the financial statements of Unicon are

adjusted to reflect the changes in the general purchasing power

of the local currency before being translated into U.S. dollar. The

Company used estimated general price indices which changed

by 686%, 2,667% and 12,922% for the years ended

December 31, 2021, 2020 and 2019, respectively, for this

purpose.

2.2.3 Business combinations

Business combinations are accounted for using the acquisition

method as of the acquisition date, which is the date on which

control is transferred to ArcelorMittal. The Company controls an

entity when it is exposed to or has rights to variable returns from

its involvement with the entity and has the ability to affect those

returns through its power over the entity.

The Company measures goodwill at the acquisition date as the

total of the fair value of consideration transferred, plus the

proportionate amount of any non-controlling interest, plus the

fair value of any previously held equity interest in the acquiree, if

any, less the net recognized amount (generally at fair value) of

the identifiable assets acquired and liabilities assumed.

In a business combination in which the fair value of the

identifiable net assets acquired exceeds the cost of the acquired

business, the Company reassesses the fair value of the assets

acquired and liabilities assumed. If, after reassessment,

ArcelorMittal’s interest in the net fair value of the acquiree’s

identifiable assets, liabilities and contingent liabilities exceeds

the cost of the business combination, the excess (bargain

purchase) is recognized immediately as a reduction of cost of

sales in the consolidated statements of operations.

Any contingent consideration payable is recognized at fair value

at the acquisition date and any costs directly attributable to the

business combination are expensed as incurred.

2.2.4 Acquisitions

On November 19, 2021, the Company completed the acquisition

of Condesa Tubos, S.L. ("Condesa"), a joint venture in which it

already held a 33% interest, through the acquisition of the

remaining 67% stake from a pool of banks for total consideration

of €31 million (25 net of cash acquired of 10). The acquisition of

Condesa strengthened ArcelorMittal's tubular operations within

the Europe segment. The Company completed its measurement

of the acquisition-date fair value of the identifiable assets and

liabilities of Condesa. It recognized 92, 39 and 10 of current

assets, property, plant and equipment and other non-current

assets, respectively, and a 24 bargain purchase gain in cost of

sales as ArcelorMittal's industrial expertise was considered by

the other previous shareholders. Revenue and net loss since

acquisition date were 13 and 1, respectively.

Revenue and net income attributable to the equity holders of the

parent of the Company, for the year ended December 31, 2021

were 76,799 and 14,981, respectively, as though the acquisition

date of Condesa had been as of January 1, 2021.

On June 4, 2019, the Company completed the acquisition of

Münker Metallprofile GmbH ("Münker") for total consideration of

€48 million (54) of which €44 million (46 net of cash acquired of

3) was paid at closing and €4 million (5) payable contingent

upon certain criteria. The acquisition of Münker will strengthen

ArcelorMittal Downstream Solutions' construction business

within the Europe segment. The Company completed its

measurement of the acquisition-date fair value of the identifiable

assets and liabilities of Münker in the second half of 2019. It

recognized 6 of goodwill and 34, 11 and 22 of property, plant

and equipment, intangible assets and current assets,

respectively, following the final measurement. Revenue and net

income from acquisition date until December 31, 2019 were 45

and 2, respectively.

Revenue and net loss attributable to the equity holders of the

parent of the Company, for the year ended December 31, 2019

were 70,646 and 2,454, respectively, as though the acquisition

date of Münker had been as of January 1, 2019.

254 Consolidated financial statements

The table below summarizes the final acquisition-date fair value

of the assets acquired and liabilities assumed in respect of

Condesa in 2021 and Münker in 2019:

2021

2019

Condesa

Münker

Current assets

Property, plant and equipment

Intangible assets

—

Other non-current assets

—

Total assets

141

Deferred tax liabilities

—

(8)

Other liabilities

(84)

(14)

Total liabilities

(84)

(22)

Net assets acquired

Consideration paid, net

Consideration payable

—

Fair value of previously held interest at

acquisition date

—

Remeasurement gain relating to the equity

interest previously held

(3)

—

Goodwill/(bargain purchase gain)

(24)

2.3 Divestments and assets held for sale

Non-current assets and disposal groups that are classified as

held for sale are measured at the lower of carrying amount and

fair value less costs to sell. Assets and disposal groups are

classified as held for sale if their carrying amount will be

recovered through a sale transaction rather than through

continuing use. The non-current asset, or disposal group, is

classified as held for sale only when the sale is highly probable

and is available for immediate sale in its present condition and is

marketed for sale at a price that is reasonable in relation to its

current fair value. Assets held for sale are presented separately

in the consolidated statements of financial position and are not

depreciated. Gains (losses) on disposal of subsidiaries are

recognized in cost of sales, whereas gains (losses) on disposal

of investments accounted for under the equity method are

recognized in income (loss) from investments in associates, joint

ventures and other investments.

2.3.1. Divestments

Divestments in 2021

On March 4, 2020, ArcelorMittal executed an amendment (the

“Amendment Agreement”) to the original lease agreement with

the Ilva Commissioners with a conditional obligation to purchase

the former Ilva business units ("ArcelorMittal Italia") in an

extraordinary administration insolvency procedure. The

Amendment Agreement outlined the terms for a significant

equity investment by an Italian state-sponsored entity, thereby

forming the basis for an important new partnership between

ArcelorMittal and the Italian government, with the investment

agreement to be executed by November 30, 2020. The

Amendment Agreement also provided for a 50% reduction in the

quarterly rental payments payable by ArcelorMittal, with the

balance being due upon closing of the purchase obligation. On

December 10, 2020, the Company entered into an investment

agreement with Invitalia - Agenzia nazionale per l'attrazione

degli investimenti e lo sviluppo d'impresa S.P.A (“Invitalia”), the

party designated by the Italian government to be the

government-sponsored investor as contemplated in the

Amendment Agreement, in order to create a partnership

between Invitalia and the Company to support the completion of

the purchase obligation.

On December 14, 2020, ISP exercised its put option for

€111 million (135) to sell its share in ArcelorMittal Italia to the

Company and the liability it had recognized upon acquisition of

ArcelorMittal Italia was derecognized.

The investment agreement includes two capital increases:

•The first investment of €400 million (476) which was

completed on April 14, 2021 provided Invitalia with 50%

voting and governance rights and therefore joint control

over AM InvestCo with a 38% shareholding;

•The second investment of up to €680 million is payable on

closing of the purchase obligation, which is subject to the

satisfaction of various conditions precedent by May 2022, at

which point Invitalia’s shareholding in ArcelorMittal Italia is

expected to reach 60%. ArcelorMittal may need to invest up

to €70 million, to the extent necessary to retain a 40%

shareholding and joint control over the company.

As a result of the investment agreement, the carrying amount of

assets and liabilities (including a 45 allocation of Europe

segment goodwill) subject to the transaction was classified as

held for sale as of December 31, 2020 (see note 2.3.2).

Subsequently to April 14, 2021, Acciaierie d'Italia Holding

(formerly AM InvestCo) operates independently and as such has

its own funding plans. Its main operating subsidiary ArcelorMittal

Italia was renamed Acciaierie d'Italia. As a result of loss of

control, the Company derecognized assets (including 199 of

cash pooling receivable from the Company and subsequently

settled) and liabilities of 4,639 and 3,873, respectively, and

accounted for its 62% interest in the joint venture under the

equity method at its fair value of 1,205. The Company

recognized in cost of sales a gain of 104 including the

reclassification from other comprehensive income to the

consolidated statements of operations of foreign exchange

translation losses and other for 283. The fair value

255 Consolidated financial statements

measurement was determined using a discounted cash flow

model and Level 3 unobservable inputs.

Divestment in 2020

On December 9, 2020, the Company completed the sale of

100% of the shares of ArcelorMittal USA, ArcelorMittal Princeton

and ArcelorMittal Monessen, their subsidiaries and certain other

subsidiaries as well as the joint operations of Hibbing Taconite

Mines, Double G Coatings and I/N Tek and the joint venture I/N

Kote, together the “ ArcelorMittal USA Divestment Business” to

Cleveland-Cliffs Inc. (“Cleveland-Cliffs”) for a combination of

cash and shares. ArcelorMittal retained certain intellectual

property assets and office space.

In addition, Nippon Steel Corporation ("NSC"), the co-

shareholder of I/N Tek and I/N Kote simultaneously exited from

such entities, which were transferred in full to Cleveland-Cliffs.

The consideration (net of transaction fees of 21 and estimated

working capital adjustment of 50) was 2,219 and included:

•Cash of 509 (497 net of 7 cash disposed of and 5

transaction fees paid);

•78,186,671 common shares of Cleveland-Cliffs with

value of 1,020 and representing a 16% stake in

Cleveland-Cliffs; and

•583,273 non-voting preferred shares redeemable, at

Cleveland-Cliff's option, for 58,327,300 of its common

shares with a value of 761 or an equivalent amount in

cash.

Following the settlement of the final working capital adjustment

during the second quarter of 2021, the total consideration

decreased by 4 to 2,215.

In addition, Cleveland-Cliffs assumed certain liabilities of the

ArcelorMittal USA Divestment Business, including pensions and

other post-employment benefit liabilities net of pension fund

assets with a carrying amount of 3.2 billion in ArcelorMittal's

consolidated statement of financial position upon disposal. The

resulting net gain on disposal was 1,460. The ArcelorMittal USA

Divestment Business was part of the NAFTA reportable

segment. Immediately prior to classification as held for sale as

of September 30, 2020, the Company assessed whether there

was an indication that the impairment loss recognized in 2019

may have decreased. The Company calculated the fair value

less cost of disposal using a market approach with market

multiples derived from comparable transactions, a Level 3

unobservable input. As a result, the Company reversed 660, in

cost of sales, of impairment charges of property, plant and

equipment previously recognized. The Company allocated 672

of the NAFTA segment goodwill to the disposal group based on

the relative values of the operations disposed of and the portion

of the group of cash-generating units retained.

Divestments in 2019

ArcelorMittal Italia remedies

On May 7, 2018, the EC approved the acquisition of Ilva

(renamed "ArcelorMittal Italia"). As part of the approval,

ArcelorMittal agreed to divest certain of its European assets

(“ArcelorMittal Italia remedies”) which were part of the Europe

reportable segment. The ArcelorMittal Italia remedies included

the following three divestment packages.

The Dudelange and Liège divestment package was composed

of ArcelorMittal Dudelange and certain finishing facilities of

ArcelorMittal Liège in Belgium including the hot dipped

galvanizing lines 4 and 5 in Flémalle, hot-rolled pickling, cold

rolling and tin packaging lines in Tilleur.

The Galati divestment package was mainly composed of the

integrated steel making site of ArcelorMittal Galati S.A.,

ArcelorMittal Tubular Products Galati SRL, both in Romania,

ArcelorMittal Skopje AD in North Macedonia and ArcelorMittal

Piombino S.p.A. in Italy, the Company’s only galvanizing steel

plant in Italy.

The Ostrava divestment package was mainly composed of the

integrated steel making site of ArcelorMittal Ostrava a.s. and its

subsidiary, ArcelorMittal Tubular Products Ostrava a.s.

On June 30, 2019, ArcelorMittal completed the sale of the

ArcelorMittal Italia remedies to Liberty House Group ("Liberty").

The total consideration which consisted of amounts payable

upon closing and deferred consideration in part contingent upon

certain criteria, net of €110 million (125) deposited in escrow

was €740 million (842) subject to customary closing

adjustments. Of this total amount, €610 million (694) was

received on June 28, 2019. The escrow which was

subsequently drawn was to be used by Liberty for certain capital

expenditure projects to satisfy commitments given in the EC

approval process.

During 2019, prior to the completion of the disposal, the

Company recorded an impairment charge in cost of sales of

497 to adjust the carrying amount of the disposal group to the

sale proceeds of 692 including a cash consideration of 518

(694, net of cash disposed of 34, the escrow deposit of 125 and

proceeds of 17 paid to a joint venture of the Company) and 174

of deferred consideration (of which 161 was outstanding as of

December 31, 2019 following subsequent receipt of a portion of

the consideration receivable) recognized at present value and

fair value of contingent consideration. The Company also

assigned receivables of 404 mainly comprised of cash pooling

balances to Liberty. The fair value measurement of ArcelorMittal

Consolidated financial statements 256

(millions of U.S. dollar, except share and per share data)

Italia remedies was determined using the contract price, a Level

3 unobservable input, which was revised in the first half of 2019.

Global Chartering

On December 31, 2019, ArcelorMittal completed the sale of a

50% controlling interest in Global Chartering Ltd. ("Global

Chartering") to DryLog Ltd. ("DryLog") for total deferred

consideration of 6. The resulting net gain on disposal was 29

including the reclassification from other comprehensive income

to the consolidated statements of operations of 33 foreign

exchange translation gains. In connection with the disposal, the

Company derecognized right-of-use assets and lease liabilities

of 390 and 400, respectively.

Global Chartering is a Mauritius-based shipping company that

handles shipping for a portion of the Company's raw materials

through the chartering of vessels on a short- to long-term basis.

Global Chartering's fleet includes owned and leased Capesize,

Panamax and Supramax vessels on a medium- to long-term

charter. Simultaneously, ArcelorMittal entered into a joint venture

agreement with DryLog to operate jointly the Global Chartering

fleet and certain other vessels chartered from DryLog.

Accordingly, the Company's remaining 50% interest in Global

Chartering is accounted for under the equity method. The fair

value measurement was determined using the selling price, a

Level 3 unobservable input. At inception of the joint venture,

certain of Global Chartering's lease terms were unfavorable

compared to market rates and therefore the Company agreed to

indemnify the joint venture for operating losses that could

potentially arise within an agreed time frame if market rates do

not improve and recognized accordingly in cost of sales a 126

provision (see note 9.1) representing the net present value of

the maximum amount agreed.

The table below summarizes the significant divestments completed in 2021, 2020 and 2019:

2021

2020

2019

Acciaierie

d'Italia

ArcelorMittal

USA

Divestment

Business

Global

Chartering

Limited

ArcelorMittal

Italia

remedies

Cash and cash equivalents

—

Other current assets

2,446

2,105

1,386

Intangible assets

—

Property, plant and equipment

1,875

3,341

517

178

Other assets

297

166

Total assets

4,639

5,631

552

1,575

Current liabilities

2,204

1,604

229

1,046

Other long-term liabilities

1,669

3,938

311

241

Total liabilities

3,873

5,542

540

1,287

Total net assets

766

288

Assigned receivables

—

404

% of net assets sold

100%

50%

100%

Total net assets disposed of

766

692

ArcelorMittal retained interest 62%

1,205

—

Goodwill allocation

(52)

(672)

—

Consideration

—

2,219

(4)

518

Consideration receivable

—

174

Reclassification of foreign exchange and other

(283)

Gain on disposal/derecognition

104

1,460

2.3.2 Assets held for sale

As described in note 2.3.1, the carrying amount of assets and

liabilities of Acciaierie d'Italia was classified as held for sale as

of December 31, 2020 and until the Company lost control on

April 14, 2021. ArcelorMittal Italia was part of the Europe

reportable segment. The fair value of the assets and liabilities

classified as held for sale were in line with their carrying value.

257 Consolidated financial statements

The fair value measurement was determined using the contract

price and a discounted cash flow model, both Level 3

unobservable inputs.

In addition, in the context of the Company's divestment process

with respect to its plate operations in the Europe reportable

segment, the carrying amount of such assets and liabilities was

classified as held for sale as of December 31, 2020. The

Company recorded an impairment charge in cost of sales of

331. On June 17, 2021, the Company announced the

discontinuation of its divestment process with respect to its plate

operations in the Europe reportable segment following final

offers received and a strategic review of growth opportunities as

a producer of heavy plates with the lowest CO2 footprint in the

industry and as a supplier of special plates needed for the

energy transition in several of its end markets. Accordingly, the

Company discontinued the classification of assets and liabilities

of this business and measured the recoverable amount on the

basis of a value-in-use calculation which was the lower amount

when compared to the carrying amount before the classification

as held for sale adjusted for any depreciation or amortization

that would have been recognized. The measurement based on

the recoverable amount did not result in any adjustment to

assets and liabilities reclassified from held for sale.

The table below provides the details for the entities classified as held for sale at December 31, 2020. There were no assets classified as

held for sale at December 31, 2021.

December 31, 2020

ArcelorMittal Italia and

plate operations in

Europe

Current Assets:

Cash and cash equivalents

Trade accounts receivable, prepaid expenses and other current assets

635

Inventories

1,446

Total Current Assets

2,084

Non-current Assets:

Property, plant and equipment

1,843

Other assets

402

Total Non-current Assets

2,245

Total Assets

4,329

Current Liabilities:

Trade accounts payables, accrued expenses and other liabilities

1,236

Total Current Liabilities

1,236

Non-current Liabilities:

Long-term debt

Other long-term liabilities

1,782

Total Non-current Liabilities

1,803

Total Liabilities

3,039

Consolidated financial statements 258

(millions of U.S. dollar, except share and per share data)

2.4 Investments in associates and joint arrangements

The carrying amounts of the Company’s investments accounted for under the equity method were as follows:

December 31,

Category

2021

2020

Joint ventures

6,087

3,006

Associates

2,985

2,847

Individually immaterial joint ventures and associates1

1,247

964

Total

10,319

6,817

1.Individually immaterial joint ventures and associates represent in aggregate less than 20% of the total carrying amount of investments in joint ventures and associates at

December 31, 2021 and 2020, and none of them have a carrying value exceeding 150 at December 31, 2021 and 2020.

2.4.1 Joint ventures

The following tables summarize the latest available financial information and reconcile it to the carrying value of each of the Company’s

material joint ventures, as well as the income statement of the Company’s material joint ventures:

December 31, 2021

Joint Ventures

AMNS India

Acciaierie

d'Italia

Calvert

VAMA

Tameh

Borçelik

Al Jubail

Total

Place of incorporation and operation 1

India

Italy

United

States

China

Poland

Turkey

Saudi Arabia

Principal Activity

Integrated

flat steel

producer 5,6

Integrated

flat steel

producer 7

Automotive

steel

finishing8

Automotive

steel

finishing

Energy

production

and supply

Manufacturing

and sale of

steel 2,3,4

Production

and sale

seamless

line pipes

and tubes 9

Ownership and voting rights at

December 31, 2021

60.00%

62.00%

50.00%

29.23%

Current assets

5,536

3,643

2,334

293

356

983

573

13,718

of which cash and cash equivalents

1,285

256

155

1,994

Non-current assets

6,260

2,669

1,418

679

497

243

1,197

12,963

Current liabilities

764

3,313

1,162

466

376

723

533

7,337

of which trade and other payables and

provisions

620

2,840

202

272

330

581

120

4,965

Non-current liabilities

5,770

1,365

790

169

640

8,798

of which trade and other payables and

provisions

331

1,342

—

1,786

Net assets

5,262

1,634

1,800

498

308

447

597

10,546

Company's share of net assets

3,157

1,013

900

249

154

224

175

5,872

Adjustments for differences in

accounting policies and other

148

146

(34)

—

(29)

(16)

215

Carrying amount in the statements of

financial position

3,305

1,159

866

249

154

195

159

6,087

Revenue

7,226

3,291

4,808

1,452

721

1,791

334

19,623

Depreciation and amortization

(378)

(119)

(65)

(34)

(24)

(42)

(696)

Interest income

—

Interest expense

(139)

(12)

(28)

(7)

(6)

(18)

(27)

(237)

Income tax benefit (expense)

(71)

211

—

(12)

(4)

(65)

—

Income (loss) from continuing

operations

1,436

393

861

105

(85)

2,823

Other comprehensive income (loss)

818

—

844

Total comprehensive income (loss)

2,254

393

870

114

(85)

3,667

Cash dividends received by the

Company

—

1.The country of incorporation corresponds to the country of operation except for Tameh whose country of operation is also the Czech Republic.

2.Ownership interest in Borçelik was 45.33% and 50.00% based on issued shares and outstanding shares, respectively, at December 31, 2021; voting interest was 48.01%

at December 31, 2021.

259 Consolidated financial statements

3.The non-current liabilities include 39 deferred tax liability.

4.Adjustment in Borçelik relates primarily to differences in accounting policies regarding revaluation of fixed assets.

5.Adjustments in AMNS India correspond primarily to transaction costs incurred to set up the joint venture and the fair value of the guarantee of the joint venture's debt (see

note 9.4).

6.Includes AMNS Luxembourg, AMNS India and intermediate holding entities.

7.Includes Acciaierie d'Italia summarized statement of financial position as of December 31, 2021 adjusted for the fair value adjustments at divestment date (see note 2.3.1).

The summarized statement of comprehensive income presents results of Acciaierie d'Italia for the period from April 14, 2021 to December 31, 2021.

8.Adjustments in Calvert primarily relate to differences in accounting policies regarding inventory valuation.

9.The summarized statement of comprehensive income presents results for full year 2021 including Jubail Energy Services Company ("JESCO") results after July 31, 2021.

December 31, 2020

Joint Ventures

AMNS India

Calvert

VAMA

Tameh

Borçelik

Total

Place of incorporation and operation 1

India

United States

China

Poland

Turkey

Principal Activity

Integrated flat

steel

producer 5,6

Automotive

steel finishing

Automotive

steel finishing

Energy

production

and supply

Manufacturing

and sale of

steel 2,3,4

Ownership and voting rights at December 31, 2020

60.00%

50.00%

Current assets

3,528

1,236

252

175

510

5,701

of which cash and cash equivalents

1,137

1,392

Non-current assets

5,745

1,261

669

570

257

8,502

Current liabilities

657

805

511

180

283

2,436

of which trade and other payables and provisions

524

138

232

132

271

1,297

Non-current liabilities

5,604

662

226

127

6,642

of which trade and other payables and provisions

—

140

Net assets

3,012

1,030

387

339

357

5,125

Company's share of net assets

1,807

515

194

170

179

2,865

Adjustments for differences in accounting policies and

other

149

—

(32)

141

Carrying amount in the statements of financial position

1,956

539

194

170

147

3,006

Revenue

3,992

2,693

1,001

420

1,055

9,161

Depreciation and amortization

(371)

(61)

(41)

(48)

(24)

(545)

Interest income

—

Interest expense

(135)

(33)

(16)

(8)

(12)

(204)

Income tax benefit (expense)

318

—

(6)

(2)

(17)

293

Income / (loss) from continuing operations

472

564

Other comprehensive income (loss)

(98)

—

(4)

(96)

Total comprehensive income (loss)

374

468

Cash dividends received by the Company

—

1.The country of incorporation corresponds to the country of operation except for Tameh whose country of operation is also the Czech Republic.

2.Ownership interest in Borçelik was 45.33% and 50.00% based on issued shares and outstanding shares, respectively, at December 31, 2020; voting interest was 48.01%

at December 31, 2020.

3.The non-current liabilities include 39 deferred tax liability.

4.Adjustment in Borçelik relates primarily to differences in accounting policies regarding revaluation of fixed assets.

5.Adjustments in AMNS India correspond primarily to transaction costs incurred to set up the joint venture and the fair value of the guarantee of the joint venture's debt (see

note 9.4).

6.Includes AMNS Luxembourg, AMNS India and intermediate holding entities.

Consolidated financial statements 260

(millions of U.S. dollar, except share and per share data)

December 31, 2019

Joint Ventures

AMNS India

Calvert

VAMA

Tameh

Borçelik

Total

Place of incorporation and operation1

India

United States

China

Poland

Turkey

Principal Activity

Flat carbon steel

manufacture 5,6

Automotive

steel finishing

Automotive

steel finishing

Energy

production

and supply

Manufacturing

and sale of

steel 2,3,4

Ownership and voting rights at December 31, 2019

60.00%

50.00%

Current assets

2,318

1,604

313

171

508

4,914

of which cash and cash equivalents

444

106

768

Non-current assets

6,295

1,282

637

580

267

9,061

Current liabilities

5,922

984

485

183

378

7,952

of which trade and other payables and provisions

670

144

226

139

274

1,453

Non-current liabilities

189

764

147

244

1,393

of which trade and other payables and provisions

—

121

Net assets

2,502

1,138

318

324

348

4,630

Company's share of net assets

1,501

569

159

162

174

2,565

Adjustments for differences in accounting policies and

other

—

(33)

Carrying amount in the statements of financial position

1,549

575

159

162

141

2,586

Revenue

—

3,504

772

499

1,141

5,916

Depreciation and amortization

—

(63)

(31)

(37)

(24)

(155)

Interest income

—

Interest expense

(10)

(48)

(23)

(7)

(19)

(107)

Income tax benefit (expense)

(83)

—

(22)

(7)

(10)

(122)

Income / (loss) from continuing operations

(116)

156

Total comprehensive income (loss)

(116)

156

Cash dividends received by the Company

—

1.The country of incorporation corresponds to the country of operation except for Tameh whose country of operation is also the Czech Republic.

2.Ownership interest in Borçelik was 45.33% and 50.00% based on issued shares and outstanding shares, respectively, at December 31, 2019; voting interest was 48.01%

at December 31, 2019.

3.The non-current liabilities include 42 deferred tax liability.

4.Adjustment in Borçelik relates primarily to differences in accounting policies regarding revaluation of fixed assets.

5.Adjustments in AMNS India correspond primarily to transaction costs incurred to set up the joint venture.

6.Includes AMNS Luxembourg, AMNS India and intermediate holding entities.

AMNS India

On December 11, 2019, following the unconditional approval

received by the Indian Supreme Court of ArcelorMittal's

acquisition plan ("the Resolution Plan") for Essar Steel India

Limited ("ESIL"), subsequently renamed AMNS India Limited

("AMNS India"), on November 15, 2019, ArcelorMittal and

Nippon Steel Corporation ("NSC"), Japan’s largest steel

producer and the third largest steel producer in the world,

created a joint venture to own and operate AMNS India with

ArcelorMittal holding a 60% interest and NSC holding 40% in

accordance with the second amended joint venture formation

agreement signed as of December 8, 2019. Through the

agreement, both ArcelorMittal and NSC are guaranteed equal

board representation and participation in all significant financial

and operating decisions. The group has therefore determined

that it does not control the entity, even though it holds 60% of

the voting rights. ArcelorMittal and NSC contributed their

respective initial equity funding of 1,362 and 891 into AMNS

Luxembourg Holding S.A. ("AMNS Luxembourg"), the parent

company of the joint venture. ArcelorMittal's 60% interest is

accounted for under the equity method. ArcelorMittal also

transferred 360 cash proceeds (of which 293 was recognized in

2019), including through a 193 equity contribution, into the joint

venture following hedging programs entered into to hedge the

volatility between the Indian Rupee and the U.S. dollar in

relation to the acquisition of AMNS India. The total cash

proceeds included 353 designated as cash flow hedge gains

and the Company reflected in retained earnings NSC's 40%

261 Consolidated financial statements

entitlement in the amount of 141 in accordance with the final

joint venture formation agreement.

On December 16, 2019, AMNS Luxembourg completed the

acquisition of AMNS India. ArcelorMittal and NSC financed the

joint venture for the acquisition of AMNS India through a

combination of partnership equity of 2,253 and debt of 3,679

including 2,204 drawn by the joint venture under the 7 billion

term facility agreement (see note 6.1.2) and 1,475 shareholder

loan from NSC. The joint venture accounted for the acquisition

of AMNS India as a business combination. The joint venture

completed its purchase price accounting during 2020.

AMNS India is an integrated flat steel producer, and the largest

steel company in western India. AMNS India’s main steel

manufacturing facility is located at Hazira, Gujarat in western

India. It also has:

–two iron ore beneficiation plants close to the mines in

Kirandul and Dabuna, with slurry pipelines that then

transport the beneficiated iron ore slurry to the pellet

plants in the Kirandul-Vizag and Dabuna-Paradeep

systems;

–a downstream facility in Pune (including a pickling line,

a cold rolling mill, a galvanizing mill, a color coating mill

and a batch annealing plant); and

–six service centers in the industrial clusters of Hazira,

Indore, Bahadurgarh, Chennai, Kolkata and Pune. It

has a complete range of flat rolled steel products,

including value added products, and significant iron ore

pellet capacity with two main pellet plant systems in

Kirandul-Vizag and Dabuna-Paradeep, which have the

potential for expansion. Its facilities are located close

to ports with deep draft for movement of raw materials

and finished goods.

The Resolution Plan which was approved for the acquisition of

AMNS India included an upfront payment of 6.0 billion towards

AMNS India’s debt resolution, with a further 1.1 billion of capital

injection into AMNS India to support operational improvements,

increase production levels and deliver enhanced levels of

profitability. The Company provided a 0.6 billion performance

guarantee in connection with the execution of the Resolution

Plan, which terminated on December 31, 2019. In addition, the

Resolution Plan includes a capital expenditure plan of 2.6 billion

to be implemented in two stages over six years.

On December 19, 2019, in the context of the creation of the

AMNS India joint venture, the Company transferred to the joint

venture the payments it had been required to make in 2018 and

2019 to the financial creditors of Uttam Galva Steels Ltd. in

order that the Resolution Plan would be eligible for

consideration by ESIL's Committee of Creditors. ArcelorMittal

and NSC financed such payments through a combination of

equity contributions into the joint venture of 173 and 115,

respectively, and debt of 597 including 367 drawn by the joint

venture under the 7 billion term facility agreement and a 230

shareholder loan from NSC. The joint venture used such

proceeds to repay the loan granted by ArcelorMittal for an

amount of 680 on December 31, 2019. On June 2, 2021, Uttam

Galva's Committee of Creditors approved the resolution plan

submitted by AMNS India. The resolution plan has been

submitted for approval to the National Company Law Tribunal

("NCLT").

On February 13, 2020 and pursuant to the follow-on funding

requirement in accordance with the second amended joint

venture formation agreement, AMNS Luxembourg completed an

additional equity injection into AMNS India of 840 mainly through

an additional 475 drawn under the 7 billion term facility

agreement and a 325 shareholder loan from NSC.

On March 16, 2020, AMNS Luxembourg entered into a 5.1

billion ten-year term loan agreement with various Japanese

banks which is guaranteed by ArcelorMittal and NSC in

proportion to their interests in the joint venture.The proceeds of

the loan were used on March 27, 2020 to refinance in full the

amounts borrowed by the Company in connection with the

acquisition of AMNS India, including the amounts borrowed

under the 7 billion bridge term facilities agreement guaranteed

by ArcelorMittal.

AMNS India also made acquisitions of certain ancillary assets.

On July 23, 2020, AMNS India commenced mining operations at

the Thakurani iron ore mine in Keonjhar district of Odisha

following an auction process facilitated by the state government

in February 2020. On July 7, 2020, AMNS India acquired

Odisha Slurry Pipeline infrastructure Limited ("OSPIL") for a net

consideration of 245 which secured an important infrastructure

asset for raw material supply to the Paraddep pellet plant and

Hazira steel plant. In January 2021, AMNS India acquired a

captive power plant at Paradeep in Odisha and in September

2021, AMNS India also commenced mining operations at its

Ghoraburhani-Sagasahi iron ore block in Odisha.

In September, 2021, AMNS India commissioned a 6 million

tonnes per annum pellet plant at the port city of Paradeep in

Odisha. The plant doubled production capacity at AMNS India’s

Paradeep complex to 12 million tonnes, and AMNS India’s total

pelletization capacity increased to 20 million tonnes per annum.

Acciaierie d'Italia

On April 14, 2021, pursuant to the investment agreement signed

on December 10, 2020 forming a public-private partnership

Consolidated financial statements 262

(millions of U.S. dollar, except share and per share data)

between Invitalia and ArcelorMittal and providing Invitalia joint

control rights, ArcelorMittal recorded its 62% interest at its fair

value of 1,205 (see 2.3.1.) at the initial recognition of Acciaierie

d'Italia as equity method investment.

Acciaierie d'Italia is the leading steel producer in Italy and

produces high-quality and sustainable steel to be used in a

range of vital industry sectors across the domestic steel market

such as construction, energy, automotive, home appliances,

packaging and transport and for international export. Acciaierie

d'Italia has operations across various structurally linked

operating sites including Europe’s biggest single-site integrated

steel facility in Taranto and rolling mills in Genova and Novi

Ligure. Genova is also an important hub in terms of intermodal

logistics.

VAMA

Valin ArcelorMittal Automotive Steel (“VAMA”) is a joint venture

between ArcelorMittal and Hunan Valin which produces steel for

high-end applications in the automobile industry. VAMA supplies

international automakers and first-tier suppliers as well as

Chinese car manufacturers and their supplier networks.

Calvert

AM/NS Calvert ("Calvert"), a joint venture between the

Company and NSC, is a steel processing plant in Calvert,

Alabama, United States. Calvert had a 6-year agreement to

purchase 2 million tonnes of slabs annually from ThyssenKrupp

Steel USA ("TK CSA"), an integrated steel mill complex located

in Rio de Janeiro, Brazil, using a market-based price formula.

TK CSA had an option to extend the agreement for an additional

3 years on terms that are more favorable to the joint venture, as

compared with the initial 6-year period. In December 2017 and

in connection with the acquisition of TK CSA by Ternium S.A.,

the agreement was amended to (i) extend the term of the

agreement to December 31, 2020, (ii) make a corresponding

reduction in the annual slab purchase obligation so that the

aggregate slab purchase obligation over the full term of the

agreement remained the same and (iii) eliminate TK CSA’s

extension option. The remaining slabs for Calvert's operations

are sourced from ArcelorMittal plants in Brazil and Mexico and

from Cleveland-Cliffs , which following its acquisition of

ArcelorMittal USA entered on December 9, 2020 into a new five

year agreement with Calvert (with an automatic three year

extension unless either party provides notice of intent to

terminate) for 1.5 million tonnes annually for the initial term and

0.55 million tonnes annually under the extension and which can

be reduced with a six month notice. ArcelorMittal is principally

responsible for marketing the product on behalf of the joint

venture. Calvert serves the automotive, construction, pipe and

tube, service center and appliance/ HVAC industries.

Tameh

Tameh is a joint venture between ArcelorMittal and Tauron

Group including four energy production facilities located in

Poland and the Czech Republic. Tameh’s objective is to ensure

energy supply to the Company’s steel plants in Poland and

external customers in the Czech Republic as well as the

utilization of steel plant gases for energy production processes.

Borçelik

Borçelik Çelik Sanayii Ticaret Anonim Şirketi ("Borçelik"),

incorporated and located in Turkey, is a joint venture between

ArcelorMittal and Borusan Holding involved in the manufacturing

and sale of cold-rolled and galvanized flat steel products.

Al Jubail

ArcelorMittal Tubular Products Al Jubail ("Al Jubail") is a state of

the art seamless tube mill in Saudi Arabia designed and built to

serve the fast growing energy producing markets of Saudi

Arabia, the Middle East, North Africa and beyond.

Al Jubail is a joint venture in which the Company owns a

29.23% interest. On July 31, 2021, Al Jubail completed the

acquisition of Jubail Energy Services Company ("JESCO"), a

leading producer of carbon steel seamless pipes in Saudi

Arabia.

The Company had outstanding shareholder loans given to Al

Jubail for 109 as of December 31, 2020 and 2019. In connection

with the shareholding reorganization and completion of the

acquisition of JESCO, the Company converted its remaining 109

of shareholders loans and 21 of other receivables into equity

and made an additional 50 cash injection to partially finance the

acquisition. Following the share conversion and capital

injections by ArcelorMittal, the Company's shareholding in Al

Jubail was diluted from 40.80% to 29.23%.

263 Consolidated financial statements

2.4.2 Associates

The following table summarizes the financial information and reconciles it to the carrying amount of each of the Company’s material

associates, as well as the income statement of the Company’s material associates:

December 31, 2021

Associates

China Oriental

DHS Group

Gonvarri Steel

Industries

Baffinland 6

Total

Financial statements reporting date

June 30, 2021

September 30,

2021

September 30,

2021

December 31,

2021

Place of incorporation and operation1

Bermuda

Germany

Spain

Canada

Principal Activity

Iron and steel

manufacturing

Steel

manufacturing 3

Steel

manufacturing 4

Extraction of

iron ore 5

Ownership and voting rights at December 31, 2021

37.00%

33.43%

35.00%

25.23%

Current assets

4,636

1,364

2,840

479

9,319

Non-current assets

2,978

2,668

1,797

10,790

18,233

Current liabilities

3,571

472

1,568

477

6,088

Non-current liabilities

533

1,107

716

3,365

5,721

Non-controlling interests

103

415

—

606

Net assets attributable to equity holders of the parent

3,422

2,350

1,938

7,427

15,137

Company's share of net assets

1,266

786

678

1,874

4,604

Adjustments for differences in accounting policies and

other

—

(47)

(1,488)

(1,480)

Other adjustments2

(191)

(14)

—

(139)

Carrying amount in the statements of financial position

1,332

650

617

386

2,985

Revenue

3,863

2,011

4,465

676

11,015

Income / (loss) from continuing operations

250

(44)

197

(45)

358

Other comprehensive income (loss)

—

Total comprehensive income (loss)

250

(37)

230

(45)

398

Cash dividends received by the Company

—

1.The country of incorporation corresponds to the country of operation except for China Oriental whose country of operation is China.

2.Other adjustments correspond to the difference between the carrying amount at December 31, 2021 and the net assets situation corresponding to the latest financial

statements ArcelorMittal is permitted to disclose translated with closing rates as of the reporting dates described in the table above. For the year ended December 31,

2020, the Company recognized a 211 impairment loss with respect to its investment in DHS.

3.The amount for DHS Group includes an adjustment to align the German GAAP financial information with the Company’s accounting policies and is mainly linked to

property, plant and equipment, inventory and pension.

4.Adjustments in Gonvarri Steel Industries primarily relate to differences in accounting policies regarding revaluation of fixed assets.

5.Adjustments in Baffinland primarily relate to differences in accounting policies regarding revaluation of fixed assets and locally recognized goodwill. In September 2020,

following a legal reorganization that was not a business combination for the Company, its share of provisional fair value remeasurement of 1.5 billion was not recognized

in the carrying amount of Baffinland.

6.Following a legal reorganization in September 2020, the Company holds an indirect interest in Baffinland through Nunavut Iron Ore Inc.

Consolidated financial statements 264

(millions of U.S. dollar, except share and per share data)

December 31, 2020

Associates

China Oriental

DHS Group

Gonvarri Steel

Industries

Baffinland6

Total

Financial statements reporting date

June 30, 2020

September 30,

2020

September 30,

2020

December 31,

2020

Place of incorporation and operation1

Bermuda

Germany

Spain

Canada

Principal Activity

Iron and steel

manufacturing

Steel

manufacturing 3

Steel

manufacturing 4

Extraction of

iron ore 5

Ownership and voting rights at December 31, 2020

37.02%

33.43%

35.00%

25.23%

Current assets

3,611

1,330

2,233

538

7,712

Non-current assets

2,507

2,810

1,675

8,295

15,287

Current liabilities

2,780

364

1,087

479

4,710

Non-current liabilities

454

1,165

772

1,050

3,441

Non-controlling interests

112

288

447

Net assets attributable to equity holders of the parent

2,838

2,499

1,761

7,303

14,401

Company's share of net assets

1,050

835

616

1,843

4,344

Adjustments for differences in accounting policies and

other

—

(49)

(1,456)

(1,467)

Other adjustments2

112

(201)

—

(30)

Carrying amount in the statements of financial position

1,162

672

626

387

2,847

Revenue

2,420

1,428

3,065

772

7,685

Income / (loss) from continuing operations

112

(244)

Other comprehensive income (loss)

(5)

(67)

—

(56)

Total comprehensive income (loss)

128

(249)

(29)

Cash dividends received by the Company

—

1.The country of incorporation corresponds to the country of operation except for China Oriental whose country of operation is China.

2.Other adjustments correspond to the difference between the carrying amount at December 31, 2020 and the net assets situation corresponding to the latest financial

statements ArcelorMittal is permitted to disclose as of the reporting dates described in the table above. For the year ended December 31, 2020, the Company recognized

a 211 impairment loss with respect to its investment in DHS.

3.The amount for DHS Group includes an adjustment to align the German GAAP financial information with the Company’s accounting policies and is mainly linked to

property, plant and equipment, inventory and pension.

4.Adjustments in Gonvarri Steel Industries primarily relate to differences in accounting policies regarding revaluation of fixed assets.

5.Adjustments in Baffinland primarily relate to differences in accounting policies regarding revaluation of fixed assets and locally recognized goodwill. In September 2020,

following a legal reorganization that was not a business combination for the Company, its share of provisional fair value remeasurement of 1.5 billion was not recognized

in the carrying amount of Baffinland.

6.Following a legal reorganization in September 2020, the Company holds an indirect interest in Baffinland through Nunavut Iron Ore Inc. The summarized statement of

comprehensive income presents full year result for Baffinland (direct owner and operator of Mary River project).

265 Consolidated financial statements

December 31, 2019

Associates

China Oriental

DHS Group

Gonvarri Steel

Industries

Baffinland

Total

Financial statements reporting date

June 30, 2019

September 30,

2019

September 30,

2019

December 31,

2019

Place of incorporation and operation1

Bermuda

Germany

Spain

Canada

Principal Activity

Iron and steel

manufacturing

Steel

manufacturing 3

Steel

manufacturing 4

Extraction of

iron ore 5

Ownership and voting rights at December 31, 2019

37.02%

33.43%

35.00%

25.70%

Current assets

2,920

1,385

2,062

479

6,846

Non-current assets

1,797

2,794

1,628

2,403

8,622

Current liabilities

1,837

402

1,038

663

3,940

Non-current liabilities

150

979

795

891

2,815

Non-controlling interests

122

218

—

384

Net assets attributable to equity holders of the parent

2,686

2,676

1,639

1,328

8,329

Company's share of net assets

994

895

574

341

2,804

Adjustments for differences in accounting policies and

other

—

(49)

Other adjustments2

—

Carrying amount in the statements of financial position

999

965

547

348

2,859

Revenue

3,102

1,795

3,724

454

9,075

Income / (loss) from continuing operations

249

(116)

(72)

143

Other comprehensive income (loss)

—

(7)

—

Total comprehensive income (loss)

249

(108)

(72)

144

Cash dividends received by the Company

—

1.The country of incorporation corresponds to the country of operation except for China Oriental whose country of operation is China.

2.Other adjustments correspond to the difference between the carrying amount at December 31, 2019 and the net assets situation corresponding to the latest financial

statements ArcelorMittal is permitted to disclose as of the reporting dates described in the table above.

3.The amount for DHS Group includes an adjustment to align the German GAAP financial information with the Company’s accounting policies, and is mainly linked to

property, plant and equipment, inventory and pension.

4.Adjustments in Gonvarri Steel Industries primarily relate to differences in accounting policies regarding revaluation of fixed assets.

5.Adjustments in Baffinland primarily relate to differences in accounting policies regarding revaluation of fixed assets and locally recognized goodwill.

China Oriental

China Oriental Group Company Limited (“China Oriental”) is a

Chinese integrated iron and steel company listed on the Hong

Kong Stock Exchange (“HKEx”).The China Oriental Group has

manufacturing plants in Hebei Province and Guangdong

Province of the People’s Republic of China (the “PRC”) and

sells mainly to customers located in the PRC. The China

Oriental Group also carries out property development business

which is mainly in the PRC.

DHS Group

DHS - Dillinger Hütte Saarstahl AG (“DHS Group”), incorporated

and located in Germany, is a leading producer of heavy steel

plates, cast slag pots and semi-finished products, such as

pressings, pressure vessel heads and shell sections in Europe.

The DHS Group also includes a further rolling mill operated by

Dillinger France in Dunkirk (France). As of December 31, 2020,

as a result of lower cash flow projections resulting from weaker

market conditions partially linked to the COVID-19 pandemic,

the Company identified an impairment trigger with respect to its

investment in DHS and recognized accordingly a 211

impairment charge. The Company calculated the fair value of its

investment in DHS using a discounted cash flow model (using a

discount rate of 7.24%), a level 3 unobservable input.

Gonvarri Steel Industries

Holding Gonvarri SL (“Gonvarri Steel Industries”) is dedicated to

the processing of steel. The entity is a European leader in steel

service centers and renewable energy components, with strong

presence in Europe and Latin America.

Baffinland

Baffinland Iron Mines Corporation ("Baffinland") owns the Mary

River project, which has direct shipping, high grade iron ore on

Baffin Island in Nunavut (Canada). During 2019 the Company's

Consolidated financial statements 266

(millions of U.S. dollar, except share and per share data)

shareholding in Baffinland decreased from 28.76% to 25.70%,

following capital calls exclusively fulfilled by Nunavut Iron Ore

Inc. ("NIO"), the initial other shareholder. The Company

recognized losses in 2019 on dilution of 4 including the recycling

of accumulated foreign exchange translation losses of 12 in

income (loss) from investments in associates, joint ventures and

other investments.

During 2020, ArcelorMittal's shareholding in Baffinland slightly

decreased from 25.70% to 25.23% following capital calls

exclusively fulfilled by NIO. In September 2020, the corporate

structure was reorganized whereby NIO became the parent

company of Baffinland, and ArcelorMittal together with The

Energy and Minerals Group ("EMG") became shareholders of

NIO with ArcelorMittal's share in NIO and thus Baffinland

unchanged at 25.23%.

NIO accounted for the acquisition of Baffinland as a business

combination and the acquisition-date fair value of assets and

liabilities was provisional at December 31, 2020. This legal

reorganization was not a business combination for the Company

which accordingly did not recognize its share of the fair value

measurement in the carrying amount of Baffinland.

2.4.3 Other associates and joint ventures that are not

individually material

The Company has interests in a number of other joint ventures

and associates, none of which are regarded as individually

material. The following table summarizes the financial

information of all individually immaterial joint ventures and

associates that are accounted for using the equity method:

December 31, 2021

December 31, 2020

Associates

Joint

Ventures

Total

Associates

Joint

Ventures

Total

Carrying amount of interests in associates and joint ventures

383

864

1,247

328

636

964

Share of:

Income from continuing operations

386

463

Other comprehensive income (loss)

(4)

—

(4)

(8)

(20)

(28)

Total comprehensive income

386

459

2.4.4 Impairment of associates and joint ventures

For the year ended December 31, 2020, the Company

recognized a 211 impairment loss with respect to its investment

in DHS. For the years ended December 31, 2020 and 2019, the

Company identified an impairment indicator with respect to its

investment and shareholder loans in Al Jubail. Accordingly, it

performed a value in use calculation and concluded the carrying

amount of the investment and shareholder loans was

recoverable. For the remaining investments, the Company

concluded there were no impairment triggers.

The Company is not aware of any material contingent liabilities

related to associates and joint ventures for which it is severally

liable for all or part of the liabilities of the associates, nor are

there any contingent liabilities incurred jointly with other

investors. See note 9.4 for disclosure of commitments related to

associates and joint ventures.

2.4.5 Investments in joint operations

The Company had investments in the following joint operations

as of December 31, 2021 and 2020:

Peña Colorada

Peña Colorada is an iron ore mine located in Mexico in which

ArcelorMittal holds a 50.00% interest. Peña Colorada operates

an open pit mine as well as concentrating facility and two-line

pelletizing facility.

Hibbing Taconite Mines

The Hibbing Taconite Mines in which the Company held a

62.31% interest are iron ore mines located in the USA and

operations consist of open pit mining, crushing, concentrating

and pelletizing. The Company assumed the managing partner

role of Hibbing Taconite company in August 2019 following the

resignation of Cleveland-Cliffs without changes in the ownership

group.

I/N Tek

I/N Tek in which the Company held a 60.00% interest operates a

cold-rolling mill in the United States.

Double G Coating

ArcelorMittal held a 50.00% interest in Double G Coating, a hot

dip galvanizing and Galvalume facility in the United States.

On December 9, 2020, the Company completed the sale of its

interests in Hibbing Taconite Mines, I/N Tek and Double G

Coating to Cleveland-Cliffs as part of the ArcelorMittal USA

Divestment Business (note 2.3.1).

All joint operations were part of the NAFTA segment.

267 Consolidated financial statements

2.5 Other investments

Other investments include those investments in equity

instruments for which the Company does not have significant

influence. The Company irrevocably elected to present the

changes in fair value of such equity instruments, which are not

held for trading, in other comprehensive income, because these

investments are held as long-term strategic investments that are

not expected to be sold in the short to medium-term. Other

investments include the following:

December 31,

2021

2020

Erdemir

885

850

ArcelorMittal XCarb

—

Stalprodukt S.A.

Cleveland-Cliffs

—

1,988

Others

101

Investments in equity instruments at

FVOCI

1,146

2,980

The Company’s significant investments in equity instruments at

FVOCI at December 31, 2021 and 2020 were the following:

Ereĝli Demir ve Çelik Fabrikalari T.A.S. (“Erdemir”)

Erdemir is the leading steel producer in Turkey and produces

plates, hot and cold rolled, tin chromium and zinc coated flat

steel and supplies basic inputs to automotive, white goods,

pipes and tubes, rolling, manufacturing, electrics-electronics,

mechanical engineering, energy, heating equipment,

shipbuilding, defense and packaging industries. Unrealized

gains recognized in other comprehensive income were 437 and

386 for the year ended December 31, 2021 and 2020,

respectively.

Cleveland-Cliffs

Cleveland-Cliffs was historically the largest and oldest

independent iron ore mining company in the United States and it

became the largest flat-rolled steel company and largest iron ore

pellet producer in North America in 2020 after the acquisition of

AK Steel and ArcelorMittal USA Divestment Business. It is

vertically integrated from mining through iron making,

steelmaking, rolling, finishing and downstream with hot and cold

stamping of steel parts and components. As part of the

consideration for the sale of ArcelorMittal USA Divestment

Business to Cleveland-Cliffs as described in note 2.3.1, on

December 9, 2020, ArcelorMittal received 78,186,671 common

shares with a value of 1,020 and representing a 16% stake in

Cleveland-Cliffs and 583,273 non-voting preferred shares with a

value of 761. The non-voting preferred shares are redeemable

at Cleveland-Cliff’s option for 58,327,300 of its common shares

or an equivalent amount in cash. Unrealized gains recognized in

other comprehensive income were 119 for the common shares

and 88 preferred shares for the year ended December 31, 2020.

On February 9, 2021 and June 18, 2021, ArcelorMittal

completed the sale of 40 million and 38.2 million common

shares in Cleveland-Cliffs, respectively, as part of a combined

primary and secondary public offering of Cleveland-Cliffs shares

for total net proceeds of 1,377. The accumulated gain of 357

(267 net of tax) recognized in other comprehensive income was

transferred to retained earnings. On July 28, 2021, Cleveland-

Cliffs redeemed the preferred shares and following the

completion of the review of the redemption notice, ArcelorMittal

received 1,303. The accumulated gain of 543 (411 net of tax)

recognized in other comprehensive income was transferred to

retained earnings.

ArcelorMittal’s XCarb™ innovation fund

ArcelorMittal has launched an innovation fund which will invest

up to 100 annually in groundbreaking companies developing

pioneering or breakthrough technologies which will accelerate

the steel industry's transition to carbon neutral steelmaking.

During 2021 the Company has invested 80 through its XCarb

innovation fund of which 50 in equity instruments at FVOCI.

Unrealized gains recognized in other comprehensive income

were 33 for the year ended December 31, 2021.

Stalprodukt S.A.

Stalprodukt S.A. is a leading manufacturer and exporter of

highly processed steel products based in Poland. Unrealized

(losses) recognized in other comprehensive income were (12)

and (1) for the year ended December 31, 2021 and 2020,

respectively.

In 2019 and 2020 the Company sold in aggregate its remaining

3.4 million and 1.8 million shares, respectively, in Powercell

Sweden AB, a leading developer and producer of fuel cell and

fuel cell systems with high-power density for the automotive,

marine and stationary segments, for total consideration of 36

and 59, respectively. The accumulated gain recognized in other

comprehensive income of 19 and 28, respectively, was

transferred to retained earnings.

On July 16, 2019, the Company sold its 30 million shares,

representing a 2.6% stake of preferred shares in Gerdau, the

largest Brazil based producer of long steel in the Americas, for

116 in line with Company's ongoing efforts to optimize and

unlock value from its asset portfolio that no longer coincides with

the Company's investment strategy. The accumulated gain

recognized in other comprehensive income of 51 was

transferred to retained earnings.

Unconsolidated structured entities

Global Chartering has lease arrangements for two vessels

(Panamax Bulk Carriers) involving structured entities whose

main purpose is to hold legal title of the two vessels and to lease

them to Global Chartering. Such entities are wholly-owned and

controlled by a financial institution and are funded through

Consolidated financial statements 268

(millions of U.S. dollar, except share and per share data)

equity instruments by the financial institution. Lease

arrangements began for one vessel in 2013 and for the second

vessel in 2014. On December 31, 2019, following the sale of a

50% controlling interest in Global Chartering to DryLog (see

note 2.3.1), the Company's remaining 50% interest in Global

Chartering is accounted for under the equity method and

therefore ArcelorMittal no longer has any involvement with the

structured entities since December 31, 2019.

2.6 Income (loss) from investments in associates, joint

ventures and other investments

Income (loss) from investments in associates, joint ventures and

other investments consisted of the following:

Year ended December 31,

2021

2020

2019

Share in net earnings of

equity-accounted companies

2,091

430

252

Impairment charges

—

(211)

—

Gain (loss) on disposal

—

(4)

Dividend income

Total

2,204

234

347

For the year ended December 31, 2021, the gain on disposal

corresponded to the gain on dilution of the Company's interest

in Al Jubail (see note 2.4.1).

For the year ended December 31, 2020, impairment charges of

211 related to DHS where the carrying value of the investment

exceeded its fair value (see note 2.4.2).

For the year ended December 31, 2019, the loss on disposal

corresponded to the loss on dilution of the Company's interest in

Baffinland (see note 2.4.2).

NOTE 3: SEGMENT REPORTING

3.1 Reportable segments

As from April 1, 2021, ArcelorMittal implemented changes to its

organizational structure whereby primary responsibility for

captive mining operations whose output is mainly consumed by

their respective steel segments has been transferred to such

segments. The Mining segment retains primary responsibility for

the operation of the seaborne oriented operations at AMMC and

ArcelorMittal Liberia Limited, and continues to provide technical

support to all mining operations within the Company.

Accordingly, the Company modified the structure of its segment

information in order to reflect changes in its approach to

managing its operations and segment disclosures have been

recast to reflect this new segmentation in conformity with IFRS.

Only the seaborne-oriented operations of AMMC and

ArcelorMittal Liberia Limited are reported within the Mining

segment. The results of all other mines are henceforth

accounted for within the steel segment that they primarily

supply.

The Company is organized in five operating and reportable

segments, which are components engaged in business activities

from which they earn revenues and incur expenses (including

revenues and expenses relating to transactions with other

components of the Company), for which discrete financial

information is available and whose operating results are

evaluated regularly by the chief operating decision maker

(“CODM”) to make decisions about resources to be allocated to

the segment and assess its performance. The Company's

CODM as of December 31, 2021 was the Executive Office -

comprising the Executive Chairman, Mr. Lakshmi N. Mittal and

the CEO, Mr. Aditya Mittal.

These operating segments include the attributable goodwill,

intangible assets, property, plant and equipment, and certain

equity method investments. They do not include cash and short-

term deposits, short-term investments, tax assets and other

current financial assets. Attributable liabilities are also those

resulting from the normal activities of the segment, excluding tax

liabilities and indebtedness but including post retirement

obligations where directly attributable to the segment. The

treasury function is managed centrally for the Company and is

not directly attributable to individual operating segments or

geographical areas.

ArcelorMittal’s segments are structured as follows:

•NAFTA represents the flat, long and tubular facilities of

the Company located in Canada, Mexico and the

United States (on December 9, 2020, the Company

divested ArcelorMittal USA see note 2.3.1). NAFTA

produces flat products such as slabs, hot-rolled coil,

cold-rolled coil, coated steel and plate. These products

are sold primarily to customers in the following sectors:

automotive, energy, construction, packaging and

appliances and via distributors or processors. NAFTA

also produces long products such as wire rod,

sections, rebar, billets, blooms and wire drawing, and

tubular products. The raw material supply of the

NAFTA operations includes sourcing from iron ore

captive mines in Mexico and iron ore and coal captive

mines in the United States (until disposal of

ArcelorMittal USA on December 9, 2020 as mentioned

above) to supply the steel facilities.

•Brazil includes the flat operations of Brazil, the long

and tubular operations of Brazil and neighboring

countries including Argentina, Costa Rica and

Venezuela. Flat products include slabs, hot-rolled coil,

cold-rolled coil and coated steel. Long products consist

of wire rod, sections, bar and rebar, billets, blooms and

269 Consolidated financial statements

wire drawing. The raw material supply of the Brazil

operations includes sourcing from iron ore captive

mines in Brazil.

•Europe is the largest flat steel producer in Europe, with

operations that range from Spain in the west to

Romania in the east, and covering the flat carbon steel

product portfolio in all major countries and markets.

Europe produces hot-rolled coil, cold-rolled coil, coated

products, tinplate, plate and slab. These products are

sold primarily to customers in the automotive, general

and packaging sectors. Europe also produces long

products consisting of sections, wire rod, rebar, billets,

blooms and wire drawing, and tubular products. In

addition, it includes Downstream Solutions, primarily an

in-house trading and distribution arm of ArcelorMittal.

Downstream Solutions also provides value-added and

customized steel solutions through further steel

processing to meet specific customer requirements.

The raw material supply of Europe operations includes

sourcing from iron ore captive mines in Bosnia &

Herzegovina.

•ACIS produces a combination of flat, long and tubular

products. Its steel facilities are located in South Africa,

Ukraine and Kazakhstan. The raw material supply of

the ACIS operations includes sourcing from iron ore

captive mines in Kazakhstan and Ukraine and coal

captive mines in Kazakhstan.

•The Mining segment comprises the mines owned by

ArcelorMittal in Canada and Liberia. It provides the

Company's steel operations with high quality and low-

cost iron ore reserves and also sells mineral products

to third parties.

The following table summarizes certain financial data for ArcelorMittal’s operations by reportable segments.

NAFTA

Brazil

Europe

ACIS

Mining

Others 1

Elimination

Total

Year ended December 31, 2021

Sales to external customers

12,492

10,830

43,200

8,392

1,640

—

76,571

Intersegment sales 2

2,026

134

1,462

2,405

(6,082)

—

Operating income (loss)

2,800

3,798

5,672

2,705

2,371

(228)

(142)

16,976

Depreciation and amortization

(325)

(228)

(1,252)

(450)

(228)

(40)

—

(2,523)

Impairment reversal

—

218

—

218

Capital expenditures

369

412

1,282

619

302

—

3,008

Year ended December 31, 2020

Sales to external customers

13,438

5,613

27,989

5,034

1,185

—

53,270

Intersegment sales 2

230

723

703

1,600

(3,351)

—

Operating income (loss)

1,684

777

(1,439)

209

1,247

(268)

(100)

2,110

Depreciation and amortization

(537)

(228)

(1,418)

(492)

(243)

(42)

—

(2,960)

Impairment

660

—

(527)

—

133

Capital expenditures

527

217

1,040

476

140

—

2,439

Year ended December 31, 2019

Sales to external customers

18,590

6,980

37,487

6,506

981

—

70,615

Intersegment sales 2

116

1,186

234

491

1,683

353

(4,063)

—

Operating income (loss)

(1,144)

853

(1,101)

1,026

(285)

(7)

(627)

Depreciation and amortization

(638)

(277)

(1,261)

(499)

(237)

(155)

—

(3,067)

Impairment

(1,300)

—

(525)

(102)

—

(1,927)

Capital expenditures

828

360

1,355

673

185

171

—

3,572

1.Others include all other operational and non-operational items which are not segmented, such as corporate and shared services, financial activities, and shipping and

logistics.

2.Transactions between segments are reported on the same basis of accounting as transactions with third parties.

Consolidated financial statements 270

(millions of U.S. dollar, except share and per share data)

The reconciliation from operating income to net income

(including non-controlling interests) is as follows:

Year ended December 31,

2021

2020

2019

Operating income/(loss)

16,976

2,110

(627)

Income from investments in

associates and joint ventures

2,204

234

347

Financing costs - net

(1,155)

(1,256)

(1,652)

Income/(loss) before taxes

18,025

1,088

(1,932)

Income tax expense

2,460

1,666

459

Net income/(loss) (including

non-controlling interests)

15,565

(578)

(2,391)

The Company does not regularly provide a measure of total

assets and liabilities for each reportable segment to the CODM.

3.2 Geographical information

Geographical information, by country or region, is separately

disclosed and represents ArcelorMittal’s most significant

regional markets. Attributed assets are operational assets

employed in each region and include items such as pension

balances that are specific to a country. Unless otherwise stated

in the table heading as a segment disclosure, these disclosures

are specific to the country or region stated. They do not include

goodwill, deferred tax assets, other investments or receivables

and other non-current financial assets. Attributed liabilities are

those arising within each region, excluding indebtedness.

Sales (by destination)

Year ended December 31,

2021

2020

2019

Americas

United States 1

7,300

9,991

15,238

Brazil

8,204

4,396

5,094

Canada

4,282

2,537

3,004

Mexico

2,356

1,707

1,941

Argentina

1,440

679

814

Others

1,826

872

1,195

Total Americas

25,408

20,182

27,286

Europe

Germany

6,541

4,200

5,694

Poland

5,298

3,231

3,957

France

4,874

3,115

4,114

Spain

4,187

2,817

3,855

Italy3

5,426

3,195

4,317

Czech Republic

1,362

752

1,244

Turkey

1,508

1,075

1,499

United Kingdom

1,519

966

1,434

Belgium

1,847

1,274

1,617

Netherlands

1,623

878

1,142

Russia

1,583

804

876

Romania

443

335

720

Ukraine 2

948

515

540

Others

5,025

3,148

4,359

Total Europe

42,184

26,305

35,368

Asia & Africa

South Africa

2,448

1,366

2,260

Morocco

689

492

583

Egypt

103

309

Rest of Africa

1,068

619

1,278

China

943

1,622

676

Kazakhstan

747

425

470

South Korea

608

331

380

India

142

Rest of Asia

2,249

1,683

1,910

Total Asia & Africa

8,979

6,783

7,961

Total

76,571

53,270

70,615

1.On December 9, 2020, the Company completed the sale of ArcelorMittal

USA. Sales of divested operations were consolidated by ArcelorMittal until

December 9, 2020, see note 2.3.1.

2.Ukraine is presented separately in 2021 and 2020, due to the increased

contributions. In 2019 Ukraine was included in others. The comparative

periods are revised to align with the current presentation.

3.Sales in Italy includes sales from Acciaerie d'Italia until April 14, 2021 (see

note 2.3.1).

271 Consolidated financial statements

Revenues from external customers attributed to the country of

domicile (Luxembourg) were 185, 114 and 151 for the years

ended December 31, 2021, 2020 and 2019, respectively.

Non-current assets1 per significant country:

December 31,

2021

2020

Americas

Canada

5,252

5,213

Brazil

3,306

3,330

United States 2

117

116

Mexico

1,550

1,457

Argentina

342

249

Venezuela

Others

Total Americas

10,615

10,400

Europe

France

3,754

4,207

Germany

2,543

2,789

Belgium

2,616

2,712

Poland

2,312

2,546

Ukraine

2,299

2,154

Spain

2,153

2,058

Luxembourg

1,476

1,297

Bosnia and Herzegovina

168

189

Romania

Czech Republic

Others

186

206

Total Europe

17,559

18,242

Asia & Africa

Kazakhstan

1,449

1,401

South Africa

511

528

Liberia

160

132

Morocco

102

Others

178

137

Total Asia & Africa

2,395

2,300

Unallocated assets

25,004

23,137

Total

55,573

54,079

1.Non-current assets do not include goodwill, deferred tax assets, investments

in associates and joint ventures, other investments and other non-current

financial assets (as they are not allocated to the individual countries). Such

assets are presented under the caption “Unallocated assets”.

2.On December 9, 2020, the Company completed the sale of ArcelorMittal

USA (see note 2.3.1).

3.3 Sales by type of products

The table below presents sales to external customers by

product type. In addition to steel produced by the Company,

amounts include material purchased for additional

transformation and sold through distribution services. Mining

products relate to the Company's own production. Others mainly

include non-steel and by-products sales, manufactured and

specialty steel products sales, shipping and other services.

Year ended December 31,

2021

2020

2019

Flat products

41,895

31,584

43,633

Long products

18,118

11,117

13,706

Tubular products

2,233

1,343

2,044

Mining products

1,860

1,451

1,165

Others

12,465

7,775

10,067

Total

76,571

53,270

70,615

Consolidated financial statements 272

(millions of U.S. dollar, except share and per share data)

3.4 Disaggregated revenue

Disaggregated revenue

The tables below summarize the disaggregated revenue recognized from contracts with customers:

Year ended December 31, 2021

NAFTA

Brazil

Europe

ACIS

Mining

Others

Total

Steel sales

12,127

10,225

38,302

7,148

—

67,802

Non-steel sales 1

202

2,240

769

1,607

—

4,819

By-product sales 2

132

111

943

171

—

1,357

Other sales 3

232

292

1,715

304

2,593

Total

12,492

10,830

43,200

8,392

1,640

76,571

Year ended December 31, 2020

NAFTA

Brazil

Europe

ACIS

Mining

Others

Total

Steel sales

12,791

5,226

25,437

4,232

—

47,686

Non-steel sales 1

141

108

620

452

1,154

—

2,475

By-product sales 2

553

—

808

Other sales 3

423

197

1,379

260

2,301

Total

13,438

5,613

27,989

5,034

1,185

53,270

Year ended December 31, 2019

NAFTA

Brazil

Europe

ACIS

Mining

Others

Total

Steel sales

17,669

6,467

33,759

5,789

—

63,684

Non-steel sales 1

233

112

1,130

254

945

—

2,674

By-product sales 2

114

816

135

—

1,158

Other sales 3

574

308

1,782

328

3,099

Total

18,590

6,980

37,487

6,506

981

70,615

1.Non-steel sales mainly relate to iron ore, coal, scrap and electricity.

2.By-product sales mainly relate to slag, waste and coke by-products.

3.Other sales are mainly comprised of shipping and other services.

NOTE 4: OPERATING DATA

4.1 Revenue

The Company’s revenue is derived from the single performance

obligation to transfer primarily steel and mining products under

arrangements in which the transfer of control of the products

and the fulfillment of the Company’s performance obligation

occur at the same time. Revenue from the sale of goods is

recognized when the Company has transferred control of the

goods to the buyer and the buyer obtains the benefits from the

goods, the potential cash flows and the amount of revenue (the

transaction price) can be measured reliably, and it is probable

that the Company will collect the consideration to which it is

entitled to in exchange for the goods.

Whether the customer has obtained control over the asset

depends on when the goods are made available to the carrier or

the buyer takes possession of the goods, depending on the

delivery terms. For the Company’s steel producing operations,

generally the criteria to recognize revenue has been met when

its products are delivered to its customers or to a carrier who will

transport the goods to its customers, this is the point in time

when the Company has completed its performance obligations.

Revenue is measured at the transaction price of the

consideration received or receivable, the amount the Company

expects to be entitled to.

Additionally, the Company identifies when goods have left its

premises, not when the customer receives the goods.

Therefore, the Company estimates, based on its historical

experience, the amount of goods in-transit when the transfer of

control occurs at the destination and defers the revenue

recognition.

The Company’s products must meet customer specifications. A

certain portion of the Company’s products are returned or have

claims filed against the sale because the products contained

quality defects or other problems. Claims may be either of the

following:

273 Consolidated financial statements

–Product Rejection - Product shipped and billed to an

end customer that did not meet previously agreed

customer specifications. Claims typically result from

physical defects in the goods, goods shipped to the

wrong location, goods produced with incorrect

specifications and goods shipped outside acceptable

time parameters.

–Consequential Damages - Damages reported by the

customer not directly related to the value of the

rejected goods (for example: customer processing cost

or mill down time, sampling, storage, sorting,

administrative cost, replacement cost, etc.).

The Company estimates the variable consideration for such

claims using the expected value method and reduces the

amount of revenue recognized.

Warranties:

The warranties and claims arise when the product fails on the

criteria mentioned above. Sales-related warranties associated

with the goods cannot be purchased separately and they serve

as an assurance that the products sold comply with agreed

specifications. Accordingly, the Company accounts for

warranties in accordance with IAS 37 "Provisions, Contingent

Liabilities and Contingent Assets" (see note 9).

Periodically, the Company enters into volume or other rebate

programs where once a certain volume or other conditions are

met, it refunds the customer some portion of the amounts

previously billed or paid. For such arrangements, the Company

only recognizes revenue for the amounts it ultimately expects to

realize from the customer. The Company estimates the variable

consideration for these programs using the most likely amount

method or the expected value method, whichever approach best

predicts the amount of the consideration based on the terms of

the contract and available information and updates its estimates

each reporting period.

The Company’s payment terms range from 30 to 90 days from

date of delivery, depending on the market and product sold. The

Company received 404 as advances from its customers which

are classified as unsatisfied performance obligations and

recognized as liabilities in line with IFRS 15. The Company

expects 100% of these unsatisfied performance obligations as

of December 31, 2021 to be recognized as revenue during 2022

as the Company’s contracts have an original expected duration

of one year or less.

The tables below summarize the movements relating to the

Company's trade receivable and other for the years ended

December 31, 2021, 2020 and 2019

Year ended December 31,

2021

2020

2019

Trade accounts receivable and

other - opening balance

3,072

3,569

4,432

Performance obligations

satisfied

76,571

53,270

70,615

Payments received

(74,036)

(53,194)

(71,559)

Impairment of receivables (net

of write backs and utilization)

(69)

(16)

Reclassification of the period-

end receivables from /(to) held

for sale and recognition

(derecognition) of receivables

related to business combination

and divestments 2

182

(724)

—

Acquisitions through business

combination

—

TSR receivables retained in

ArcelorMittal USA divestment 1

(260)

260

—

Foreign exchange and others

(317)

(93)

Trade accounts receivable and

other - closing balance

5,143

3,072

3,569

1.See note 6.1.3

2.Includes mainly receivables from the joint venture Acciaierie d'Italia. See

note 2.3.1.

4.2 Cost of sales

Cost of sales includes the following components:

Year ended December 31,

2021

2020

2019

Materials

42,737

34,599

47,809

Labor costs

6,886

7,690

9,094

Logistic expenses

3,931

3,474

4,951

Depreciation and amortization

2,523

2,960

3,067

Net impairment (reversal)/

charges (see note 5.3)

(218)

(133)

1,927

Gain on AM USA disposal 1

—

(1,460)

—

Other

1,478

2,008

2,039

Total

57,337

49,138

68,887

1. See note 2.3.1 for details

Consolidated financial statements 274

(millions of U.S. dollar, except share and per share data)

4.3 Trade accounts receivable and other

Trade accounts receivable are initially recorded at their

transaction price and do not carry any interest. ArcelorMittal

maintains an allowance for lifetime expected credit loss at an

amount that it considers to be a reliable estimate of expected

credit losses resulting from the inability of its customers to make

required payments. In judging the adequacy of the allowance for

expected credit losses, ArcelorMittal considers multiple factors

including historical bad debt experience, the current and forward

looking economic environment and the aging of the receivables.

Recoveries of trade receivables previously reserved in the

allowance for expected credit losses are recognized as gains in

selling, general and administrative expenses.

ArcelorMittal’s policy is to record an allowance for expected

lifetime credit losses and a charge in selling, general and

administrative expense when a specific account is deemed

uncollectible. The Company concluded that a trade receivable is

in default when it is overdue by more than 180 days. Based on

historical experience and analysis, the Company concluded that

there is a risk of default as such receivables are generally not

recoverable and therefore provided for, unless the collectibility

can be clearly demonstrated. Uninsured trade receivables and

the associated allowance are written off when ArcelorMittal has

exhausted its recovery efforts and enforcement options.

ArcelorMittal considered the continued impact of the COVID-19

pandemic on the economic environment in its risk of default

assessment for receivables outstanding less than 180 days.

Receivables aged 31 days or older and uninsured trade

receivables remain consistent with historical levels and the

Company did not identify any expected increased risk of default.

Trade accounts receivable and allowance for lifetime expected

credit losses

December 31,

2021

2020

Gross amount

5,349

3,208

Allowance for lifetime expected credit losses

(206)

(136)

Total

5,143

3,072

The carrying amount of the trade accounts receivable and other

approximates their fair value. Before granting credit to any new

customer, ArcelorMittal uses an internally developed credit

scoring system to assess the potential customer’s credit quality

and to define credit limits by customer. For all significant

customers, the credit terms must be approved by the credit

committees of each reportable segment. Limits and scoring

attributed to customers are reviewed periodically. There are no

customers who represent more than 5% of the total balance of

trade accounts receivable.

Exposure to credit risk by reportable segment

The maximum exposure to credit risk for trade accounts

receivable by reportable segment is as follows:

December 31,

2021

2020

NAFTA

330

455

Brazil

1,308

809

Europe

2,959

1,396

ACIS

444

190

Mining

102

222

Total

5,143

3,072

Aging of trade accounts receivable

December 31,

2021

2020

Gross

Allowance

Total

Gross

Allowance

Total

Not past due

4,280

(30)

4,250

2,699

(13)

2,686

Overdue 1-30 days

322

(1)

321

215

(1)

214

Overdue 31-60 days

—

(1)

Overdue 61-90 days

121

—

121

—

Overdue 91-180 days

210

(2)

208

(3)

More than 180 days

336

(173)

163

177

(118)

Total

5,349

(206)

5,143

3,208

(136)

3,072

275 Consolidated financial statements

The movements in the allowance are calculated based on

lifetime expected credit loss model for 2021, 2020 and 2019.

The allowances in respect of trade accounts receivable during

the periods presented are as follows:

Year ended December 31,

2021

2020

2019

Allowance - opening

balance

136

129

173

Additions

Write backs / utilization

(18)

(11)

(27)

Foreign exchange and

others

(9)

(35)

Allowance - closing

balance

206

136

129

The Company has established a number of programs for sales

without recourse of trade accounts receivable to various

financial institutions (referred to as true sale of receivables

(“TSR”)). Through the TSR programs, certain operating

subsidiaries of ArcelorMittal surrender the control, risks and

benefits associated with the accounts receivable sold; therefore,

the amount of receivables sold is recorded as a sale of financial

assets and the balances are derecognized from the

consolidated statements of financial position at the moment of

sale. The Company classifies trade receivables subject to TSR

programs as financial assets that are held to collect or to sell

and recognizes them at FVOCI (see note 6). The fair value

measurement is determined based on the invoice amount net of

TSR expense payable, a Level 3 unobservable input. The TSR

expense is insignificant due to the rate applicable and the short

timeframe between the time of sale and the invoice due date.

Any loss allowance for these trade receivables is recognized in

OCI.

4.4 Inventories

Inventories are carried at the lower of cost or net realizable

value. Cost is determined using the average cost method. Costs

of production in process and finished goods include the

purchase costs of raw materials and conversion costs such as

direct labor and an allocation of fixed and variable production

overheads. Raw materials and spare parts are valued at cost,

inclusive of freight, shipping, handling as well as any other costs

incurred in bringing the inventories to their present location and

condition. Interest charges, if any, on purchases have been

recorded as financing costs. Costs incurred when production

levels are abnormally low are capitalized as inventories based

on normal capacity with the remaining costs incurred recorded

as a component of cost of sales in the consolidated statements

of operations.

Net realizable value represents the estimated selling price at

which the inventories can be realized in the normal course of

business after allowing for the cost of conversion from their

existing state to a finished condition and for the cost of

marketing, selling, and distribution. Net realizable value is

estimated based on the most reliable evidence available at the

time the estimates were made of being the amount that the

inventory is expected to realize, taking into account the purpose

for which the inventory is held.

Previous write-downs are reversed in case the circumstances

that previously caused inventories to be written down below cost

no longer exist.

Inventories, net of allowance for slow-moving inventory, excess

of cost over net realizable value and obsolescence of 1,023 and

1,079 as of December 31, 2021 and 2020, respectively, are

comprised of the following:

December 31,

2021

2020

Finished products

5,743

3,403

Production in process

5,101

3,305

Raw materials

7,137

3,839

Manufacturing supplies, spare parts and

other 1

1,877

1,781

Total

19,858

12,328

1.Including spare parts of 1.4 billion and 1.4 billion, and manufacturing and other

supplies of 0.5 billion and 0.4 billion as of December 31, 2021 and 2020,

respectively.

Movements in the inventory write-downs are as follows:

Year ended December 31,

2021

2020

2019

Inventory write-downs -

opening balance

1,079

1,760

1,168

Additions 1

178

294

726

Deductions / Releases 2

(236)

(878)

(212)

Foreign exchange and others3

(97)

Inventory write-downs -

closing balance

1,023

1,079

1,760

1.Additions refer to write-downs of inventories excluding those utilized or written

back during the same financial year.

2.Deductions/releases correspond to write-backs and utilizations related to the

prior periods.

3.In 2021, others include inventory write-downs relating to the plate operations

in Europe following discontinuation of held for sale classification (see note

2.3.2).

Consolidated financial statements 276

(millions of U.S. dollar, except share and per share data)

4.5 Prepaid expenses and other current assets

December 31,

2021

2020

VAT receivables

986

752

Prepaid expenses and non-trade

receivables

566

486

Financial amounts receivable

108

Income tax receivable

106

Receivables from public authorities

127

143

Receivables from sale of financial and

intangible assets

Derivative financial instruments (notes 6.1

and 6.3)

2,985

353

CO2 emission rights

458

219

Other 1

183

105

Total

5,567

2,281

1.Other includes mainly advances to employees, accrued interest and other

miscellaneous receivables.

4.6 Other assets

Other assets consisted of the following:

December 31,

2021

2020

Derivative financial instruments (notes 6.1

and 6.3)

318

324

Financial amounts receivable

411

503

Long-term VAT receivables

179

156

Cash guarantees and deposits

Receivables from public authorities

Accrued interest

Receivables from sale of financial and

intangible assets

150

172

Income tax receivable

Other 1

159

152

Total

1,461

1,482

1.Other mainly includes assets in pension funds and other amounts receivable.

4.7 Trade accounts payable and other

Trade accounts payable are obligations to pay for goods that

have been acquired in the ordinary course of business from

suppliers. Trade accounts payable have maturities from 15 to

180 days depending on the type of material, the geographic

area in which the purchase transaction occurs and the various

contractual agreements. The carrying value of trade accounts

payable approximates fair value. The Company’s average

outstanding number of trade payable days amounted to 83 over

the last 5 years. The ability of suppliers to provide payment

terms may be dependent on their ability to obtain funding for

their own working capital needs and or their ability to early

discount their receivables at their own discretion (the Company

estimates that about 2.7 billion of trade payables were subject to

early discount by its suppliers in 2021 as compared to 2.0 billion

in 2020).

4.8 Accrued expenses and other liabilities

Accrued expenses and other liabilities were comprised of the

following:

December 31,

2021

2020

Accrued payroll and employee related

expenses

1,545

1,238

Accrued interest and other payables

1,207

1,151

Payable from acquisition of intangible,

tangible & financial assets1

867

847

Other amounts due to public authorities

833

680

Derivative financial instruments (notes 6.1

and 6.3)

316

208

Unearned revenue and accrued payables

Total

4,831

4,197

1.At December 31, 2021, payable from acquisition of intangible, tangible &

financial assets included 252 relating to the ArcelorMittal Sul Fluminense

("AMSF") put option liability (see notes 9.2 and 11.5.2).

NOTE 5: GOODWILL, INTANGIBLE AND TANGIBLE ASSETS

5.1 Goodwill and intangible assets

The carrying amounts of goodwill and intangible assets are

summarized as follows:

December 31,

2021

2020

Goodwill on acquisitions

3,931

3,992

Concessions, patents and licenses

195

190

Customer relationships and trade marks

Other1

219

Total

4,425

4,312

1.Includes 167 relating to emission rights in 2021.

Goodwill

Goodwill arising on an acquisition is recognized as previously

described within the business combinations section in note

2.2.3. Goodwill is allocated to those groups of cash-generating

units that are expected to benefit from the business combination

in which the goodwill arose and in all cases is at the operating

segment level, which represents the lowest level at which

goodwill is monitored for internal management purposes.

277 Consolidated financial statements

Goodwill acquired in business combinations for each of the

Company’s operating segments is as follows:

December

31, 2020

Divestments

and assets

held for sale

Foreign

exchange

differences

and other

movements

December

31, 2021

NAFTA

1,566

—

1,576

Brazil

1,069

—

(59)

1,010

Europe

540

—

(41)

499

ACIS

817

—

846

Total

3,992

—

(61)

3,931

December

31, 2019

Divestments

and assets

held for

sale1

Foreign

exchange

differences

and other

movements

December

31, 2020

NAFTA

2,233

(672)

1,566

Brazil

1,353

—

(284)

1,069

Europe

545

(45)

540

ACIS

973

—

(156)

817

Total

5,104

(717)

(395)

3,992

1. See notes 2.3.1 and 2.3.2

Intangible assets are recognized only when it is probable that

the expected future economic benefits attributable to the assets

will accrue to the Company and the cost can be reliably

measured. Intangible assets acquired separately by

ArcelorMittal are initially recorded at cost and those acquired in

a business combination are initially recorded at fair value at the

date of the business combination. These primarily include the

cost of technology and licenses purchased from third parties

and operating authorizations granted by governments or other

public bodies (concessions). Intangible assets are amortized on

a straight-line basis over their estimated economic useful lives,

which typically do not exceed five years. Amortization is

included in the consolidated statements of operations as part of

cost of sales.

ArcelorMittal’s industrial sites which are regulated by the

European Directive 2003/87/EC of October 13, 2003 on carbon

dioxide (“CO2”) emission rights, effective as of January 1, 2005,

are located primarily in Belgium, France, Germany,

Luxembourg, Poland, Spain and Italy. In Ontario, Canada,

ArcelorMittal's operations have been subject to output based

pricing system regulations since January 1, 2019 but starting

January 1, 2022, they will be regulated on carbon pricing under

the Ontario Emissions Performance System (“OEPS”). In South

Africa, a CO2 tax system was introduced in 2019. The emission

rights allocated to the Company on a no-charge basis pursuant

to the annual national allocation plan are recorded at nil value

and purchased emission rights are recorded at cost.

Consolidated financial statements 278

(millions of U.S. dollar, except share and per share data)

Other intangible assets are summarized as follows:

Concessions,

patents and

licenses

Customer

relationships and

trade marks

Other

Total

Cost

At December 31, 2019

630

1,133

147

1,910

Acquisitions

—

Disposals

(8)

—

(2)

(10)

Divestment (note 2.3.1)

(251)

(9)

—

(260)

Foreign exchange differences

Transfers to assets held for sale (note 2.3.2)

(12)

—

(11)

(23)

Transfers and other movements

—

Fully amortized intangible assets 1

(29)

—

(29)

At December 31, 2020

400

1,148

180

1,728

Acquisitions2

—

210

245

Disposal

(6)

—

(6)

Foreign exchange differences

(54)

(69)

(21)

(144)

Transfers from assets held for sale (note 2.3.2)

—

Transfers and other movements

At December 31, 2021

417

1,081

390

1,888

Accumulated amortization and impairment losses

At December 31, 2019

433

1,038

111

1,582

Disposal

(7)

—

(7)

Divestment (note 2.3.1)

(239)

(9)

—

(248)

Amortization charge

Impairment charge (note 5.3)

—

Foreign exchange differences

Transfers to assets held for sale (note 2.3.2)

(12)

—

(9)

(21)

Transfers and other movements

(4)

—

(4)

Fully amortized intangible assets 1

(29)

—

(29)

At December 31, 2020

210

1,058

140

1,408

Disposals

(5)

—

(5)

Amortization charge

Foreign exchange differences

(44)

(64)

(13)

(121)

Transfers from assets held for sale (note 2.3.2)

—

Transfers and other movements

—

At December 31, 2021

222

1,001

171

1,394

Carrying amount

At December 31, 2020

190

320

At December 31, 2021

195

219

494

1.Fully amortized intangible assets correspond mainly to licenses in 2020.

2.Acquisitions in 'other' mainly relate to CO2 emission rights in 2021.

Research and development costs not meeting the criteria for

capitalization are expensed as incurred. These costs amounted

to 270, 245 and 301 for the years ended December 31, 2021,

2020 and 2019, respectively and were recognized in selling,

general and administrative expenses.

5.2 Property, plant and equipment and biological assets

Property, plant and equipment is recorded at cost less

accumulated depreciation and impairment. Cost includes all

related costs directly attributable to the acquisition or

construction of the asset. Except for land and assets used in

mining activities, property, plant and equipment is depreciated

using the straight-line method over the useful lives of the related

assets as presented in the table below.

279 Consolidated financial statements

Asset Category

Useful Life Range

Land

Not depreciated

Buildings

10 to 50 years

Property plant & equipment

15 to 64 years

Auxiliary facilities

15 to 60 years

Other facilities

5 to 20 years

The Company’s annual review of useful lives leverages on the

experience gained from an in-depth review performed every five

years, any significant change in the expected pattern of

consumption embodied in the asset, and the specialized

knowledge of ArcelorMittal’s network of chief technical officers.

The chief technical officer network includes engineers with

facility-specific expertise related to plant and equipment used in

the principal production units of the Company’s operations. The

most recent in-depth review took place in 2019, during which the

Company performed a review of the useful lives of its fixed

assets and determined there were no material changes to the

useful lives of property, plant and equipment. In performing this

review, the Company gathered and evaluated data, including

commissioning dates, designed capacities, maintenance

records and programs, and asset performance history, among

other attributes. In accordance with IAS 16, Property, Plant and

Equipment, the Company considered this information at the

level of components significant in relation to the total cost of the

item of plant and equipment. Other factors the Company

considered in its determination of useful lives included the

expected use of the assets, technical or commercial

obsolescence, and operational factors. In addition, the Company

considered the accumulated technical experience and

knowledge sharing programs that allowed for the exchange of

best practices within the chief technical officer network and the

deployment of these practices across the Company’s principal

production units.

Major improvements, which add to productive capacity or extend

the life of an asset, are capitalized, while repairs and

maintenance are expensed as incurred. Where a tangible fixed

asset comprises major components having different useful lives,

these components are accounted for as separate items.

Property, plant and equipment under construction is recorded as

construction in progress until it is ready for its intended use;

thereafter it is transferred to the related class of property, plant

and equipment and depreciated over its estimated useful life.

Interest incurred during construction is capitalized if the

borrowing cost is directly attributable to the construction. Gains

and losses on retirement or disposal of assets are recognized in

cost of sales.

The residual values and useful lives of property, plant and

equipment are reviewed at each reporting date and adjusted if

expectations differ from previous estimates. Depreciation

methods applied to property, plant and equipment are reviewed

at each reporting date and changed if there has been a

significant change in the expected pattern of consumption of the

future economic benefits embodied in the asset. In the context

of the 2021 annual review of useful lives and considering the

expected date of retirement of certain assets in particular blast

furnaces, basic oxygen furnaces, sinter plants and coke plants

following the implementation of the Company's decarbonization

strategy involving the construction of DRI - EAF facilities, the

Company decreased estimates of residual useful lives of such

items of property, plant and equipment for its flat carbon

operations in the EU and in Canada. Accordingly, depreciation

charge increased by 76 in the fourth quarter of 2021 and is

expected to increase by 277, 168, 168, 142, 124, 28 and 26 for

the years ended December 31, 2022, 2023, 2024, 2025, 2026,

2027 and 2028, respectively.

Mining assets comprise:

•Mineral rights acquired;

•Capitalized developmental stripping (as described

below in “—Stripping and overburden removal costs”).

Property, plant and equipment used in mining activities is

depreciated over its useful life or over the remaining life of the

mine, if shorter, and if there is no alternative use. For the

majority of assets used in mining activities, the economic

benefits from the asset are consumed in a pattern which is

linked to the production level and accordingly, assets used in

mining activities are primarily depreciated on a units-of-

production basis. A unit-of-production is based on the available

estimate of proven and probable reserves.

Capitalization of pre-production expenditures ceases when the

mining property is capable of commercial production as it is

intended by management. General administration costs that are

not directly attributable to a specific exploration area are

charged to the consolidated statements of operations.

Mineral Reserves and resources

Mineral Reserves are estimates of the amount of product that

can be economically and legally extracted from the Company’s

properties. Furthermore, mineral resource estimates constitute

the part of a mineral deposit that have the potential to be

economically and legally extracted or produced at the time of

the resource determination. In order to estimate mineral

reserves, estimates are required for a range of geological,

technical and economic factors, including quantities, grades,

production techniques, recovery rates, production costs,

transport costs, commodity demand, commodity prices and

exchange rates. The potential for economic viability and

Consolidated financial statements 280

(millions of U.S. dollar, except share and per share data)

estimate of mineral resources is established through high level

and conceptual engineering studies.

Estimating the quantity and/or grade of mineral reserves

requires the size, shape and depth of ore bodies to be

determined by analyzing geological data such as drilling

samples. This process may require complex and difficult

geological judgments to interpret the data. The estimation of

mineral resource is based on detailed and reliable exploration,

sampling and testing information gathered through appropriate

techniques from locations such as outcrops, trenches, pits,

workings and drill holes that are spaced closely enough to

confirm both geological and grade continuity.

Because the economic assumptions used to estimate mineral

reserves and mineral resources change from period to period,

and because additional geological data is generated during the

course of operations, estimates of mineral reserves and mineral

resources may change from period to period. Changes in

reported mineral reserves and mineral resources may affect the

Company’s financial results and financial position in a number of

ways, including the following:

•Asset carrying amounts may be affected due to

changes in estimated future cash flows.

•Depreciation, depletion and amortization charged in the

consolidated statements of operations may change

where such charges are determined by the units of

production basis, or where the useful economic lives of

assets change.

•Overburden removal costs recognized in the

consolidated statements of financial position or

charged to the consolidated statements of operations

may change due to changes in stripping ratios or the

units of production basis of depreciation.

•Decommissioning, site restoration and environmental

provisions may change where changes in estimated

reserves affect expectations about the timing or cost of

these activities.

Stripping and overburden removal costs

In open pit and underground mining operations, it is often

necessary to remove overburden and other waste materials to

access the deposit from which minerals can be extracted. This

process is referred to as stripping. Stripping costs can be

incurred before the mining production commences

(“developmental stripping”) or during the production stage

(“production stripping”).

A mine can operate several open pits that are regarded as

separate operations for the purpose of mine planning and

production. In this case, stripping costs are accounted for

separately, by reference to the ore extracted from each separate

pit. If, however, the pits are highly integrated for the purpose of

mine planning and production, stripping costs are aggregated.

The determination of whether multiple pit mines are considered

separate or integrated operations depends on each mine’s

specific circumstances. The following factors would point

towards the stripping costs for the individual pits being

accounted for separately:

•If mining of the second and subsequent pits is

conducted consecutively with that of the first pit, rather

than concurrently.

•If separate investment decisions are made to develop

each pit, rather than a single investment decision being

made at the outset.

•If the pits are operated as separate units in terms of

mine planning and the sequencing of overburden and

ore mining, rather than as an integrated unit.

•If expenditures for additional infrastructure to support

the second and subsequent pits are relatively large.

•If the pits extract ore from separate and distinct ore

bodies, rather than from a single ore body.

The relative importance of each factor is considered by local

management to determine whether the stripping costs should be

attributed to the individual pit or to the combined output from

several pits.

Developmental stripping costs contribute to the future economic

benefits of mining operations when the production begins and

so are capitalized as tangible assets (construction in progress),

whereas production stripping is a part of on-going activities and

commences when the production stage of mining operations

begins and continues throughout the life of a mine.

Capitalization of developmental stripping costs ends when the

commercial production of the minerals commences.

Production stripping costs are incurred to extract the ore in the

form of inventories and/or to improve access to an additional

component of an ore body or deeper levels of material.

Production stripping costs are accounted for as inventories to

the extent the benefit from production stripping activity is

realized in the form of inventories. Production stripping costs are

recognized as a non-current asset (“stripping activity assets”) to

the extent it is probable that future economic benefit in terms of

improved access to ore will flow to the Company, the

components of the ore body for which access has been

improved can be identified and the costs relating to the stripping

281 Consolidated financial statements

activity associated with that component can be measured

reliably.

All stripping costs assets (either stripping activity assets or

capitalized developmental stripping costs) are presented within

a specific “mining assets” class of property, plant and equipment

and then depreciated on a units-of-production basis.

Exploration and evaluation expenditure

Exploration and evaluation activities involve the search for iron

ore and coal resources, the determination of technical feasibility

and the assessment of commercial viability of an identified

resource. Exploration and evaluation activities include:

•researching and analyzing historical exploration data;

•conducting topographical, geological, geochemical and

geophysical studies;

•carrying out exploratory drilling, trenching and sampling

activities;

•drilling, trenching and sampling activities to determine

the quantity and grade of the deposit;

•examining and testing extraction methods and

metallurgical or treatment processes; and

•detailed economic feasibility evaluations to determine

whether development of the reserves is commercially

justified and to plan methods for mine development.

Exploration and evaluation expenditure is charged to the

consolidated statements of operations as incurred except in the

following circumstances, in which case the expenditure is

capitalized: (i) the exploration and evaluation activity is within an

area of interest which was previously acquired in a business

combination and measured at fair value on acquisition; or (ii)

when management has a high degree of confidence in the

project’s economic viability and it is probable that future

economic benefits will flow to the Company.

Capitalized exploration and evaluation expenditures are

generally recorded as a component of property, plant and

equipment at cost less impairment charges, unless their nature

requires them to be recorded as an intangible asset. As the

asset is not available for use, it is not depreciated and all

capitalized exploration and evaluation expenditure is monitored

for indications of impairment. To the extent that capitalized

expenditure is not expected to be recovered, it is recognized as

an expense in the consolidated statements of operations.

Cash flows associated with exploration and evaluation

expenditure are classified as operating activities when they are

related to expenses or as an investing activity when they are

related to a capitalized asset in the consolidated statements of

cash flows.

Development expenditure

Development is the establishment of access to the mineral

reserve and other preparations for commercial production.

Development activities often continue during production and

include:

•sinking shafts and underground drifts (often called

mine development);

•making permanent excavations;

•developing passageways and rooms or galleries;

•building roads and tunnels; and

•advance removal of overburden and waste rock.

Development (or construction) also includes the installation of

infrastructure (e.g., roads, utilities and housing), machinery,

equipment and facilities.

When reserves are determined and development is approved,

expenditures capitalized as exploration and evaluation are

reclassified as construction in progress and are reported as a

component of property, plant and equipment. All subsequent

development expenditures are capitalized and classified as

construction in progress. On completion of development, all

assets included in construction in progress are individually

reclassified to the appropriate category of property, plant and

equipment and depreciated accordingly.

Biological assets

Biological assets are part of the Brazil operating segment and

consist of eucalyptus forests located in the Brazilian state of

Minas Gerais exclusively from renewable plantations and

intended for the production of charcoal to be utilized as fuel and

a source of carbon in the direct reduction process of pig iron

production in some of the Company’s blast furnaces in Brazil.

Biological assets are measured at their fair value, net of

estimated costs to sell at the time of harvest. The fair value

(Level 3 in the fair value hierarchy) is determined based on the

discounted cash flow method, taking into consideration the cubic

volume of wood, segregated by plantation year, and the

equivalent sales value of standing trees. The average sales

price was estimated based on domestic market prices. In

determining the fair value of biological assets, a discounted

cash flow model was used, with a harvest cycle of 6 to 7 years.

Consolidated financial statements 282

(millions of U.S. dollar, except share and per share data)

Property, plant and equipment and biological assets are summarized as follows:

Land,

buildings and

Improvements

Machinery,

equipment

and other2

Construction

in progress

Right-of-use

assets

Mining

Assets

Total

Cost

At December 31, 2019

10,897

44,628

5,490

2,092

4,113

67,220

Additions

172

1,857

233

2,312

Foreign exchange differences

621

1,121

(129)

(130)

1,519

Disposals

(62)

(630)

(19)

—

(4)

(715)

Divestments (note 2.3.1)

(858)

(8,559)

(261)

(449)

(766)

(10,893)

Transfers to assets held for sale (note 2.3.2)

(461)

(1,911)

(612)

(89)

—

(3,073)

Other movements 1

574

1,778

(2,363)

(225)

(188)

At December 31, 2020

10,738

36,599

3,963

1,598

3,284

56,182

Additions

239

2,416

313

2,995

Acquisitions through business combinations (note

2.2.4)

—

Foreign exchange differences

(910)

(3,311)

(97)

(104)

(14)

(4,436)

Disposals

(66)

(553)

(2)

—

(5)

(626)

Transfers from assets held for sale (note 2.3.2)

156

827

—

999

Other movements 1

153

1,542

(1,761)

(59)

131

At December 31, 2021

10,121

35,348

4,533

1,750

3,407

55,159

Accumulated depreciation and impairment

At December 31, 2019

3,488

22,889

991

857

2,764

30,989

Depreciation charge for the year

338

2,188

—

212

135

2,873

Impairment (note 5.3)

111

(280)

—

(137)

Disposals

(40)

(591)

(7)

—

(3)

(641)

Foreign exchange differences

424

1,189

(102)

1,527

Divestments (note 2.3.1)

(527)

(6,002)

(5)

(300)

(718)

(7,552)

Transfers to assets held for sale (note 2.3.2)

(163)

(1,045)

(13)

(9)

—

(1,230)

Other movements 1

177

(212)

(9)

(212)

(13)

(269)

At December 31, 2020

3,808

18,136

994

559

2,063

25,560

Depreciation charge for the year

320

1,801

—

190

122

2,433

Impairment reversal (note 5.3)

(37)

(181)

—

(218)

Disposals

(49)

(517)

—

(5)

(571)

Foreign exchange differences

(546)

(2,459)

(10)

(37)

(13)

(3,065)

Transfers from assets held for sale (note 2.3.2)

154

804

—

965

Other movements 1

(7)

(34)

(20)

At December 31, 2021

3,643

17,596

999

678

2,168

25,084

Carrying amount

At December 31, 2020

6,930

18,463

2,969

1,039

1,221

30,622

At December 31, 2021

6,478

17,752

3,534

1,072

1,239

30,075

1.Other movements predominantly represent transfers from construction in progress to other categories and retirement of fully depreciated assets.

2.Machinery, equipment and other includes biological assets of 38 and 45 as of December 31, 2021 and 2020, respectively, and bearer plants of 29 and 29 as of

December 31, 2021 and 2020, respectively.

The carrying amount of temporarily idle property, plant and

equipment at December 31, 2021 and 2020 was 8 and 246

including nil and 170 in Brazil, 4 and 31 in NAFTA, 4 and 37 in

the Europe segment and nil and 9 in the ACIS segment,

respectively.

The carrying amount of property, plant and equipment retired

from active use and not classified as held for sale was 11 and

12 at December 31, 2021 and 2020, respectively. Such assets

are carried at their recoverable amount.

Assets pledged as security

See note 9.4 for information about assets pledged as security by

the Company.

283 Consolidated financial statements

Capital commitments

See note 9.4 for information about contractual commitments for

acquisition of property, plant and equipment by the Company.

5.3 Impairment of intangible assets, including goodwill, and

tangible assets

Net impairment (reversals)/charges recognized were as follows:

Year ended December 31,

Type of asset

2021

2020

2019

Tangible assets

(218)

(133)

1,927

Total

(218)

(133)

1,927

Impairment test of goodwill

Goodwill is tested for impairment annually, as of October 1 or

whenever changes in circumstances indicate that the carrying

amount may not be recoverable, at the level of the groups of

cash-generating units (“GCGU”) which correspond to the

operating segments representing the lowest level at which

goodwill is monitored for internal management purposes.

Whenever the cash-generating units comprising the operating

segments are tested for impairment at the same time as

goodwill, the cash-generating units are tested first and any

impairment of the assets is recorded prior to the testing of

goodwill.

The recoverable amounts of the GCGUs are mainly determined

based on their value in use. The value in use of each GCGU is

determined by estimating future cash flows. The 2021

impairment test of goodwill did not include the GCGU

corresponding to the Mining segment (as from April 1, 2021,

ArcelorMittal implemented changes to its organizational

structure (see note 1.1) as goodwill allocated to this GCGU was

fully impaired in 2015. The key assumptions for the value in use

calculations are primarily the discount rates, growth rates,

expected changes to average selling prices, shipments and

direct costs during the period. Assumptions for average selling

prices and shipments are based on historical experience and

expectations of future changes in the market. In addition, with

respect to raw material price assumptions, the Company applied

a range of $71 per tonne to $112 per tonne for iron ore and

$144 per tonne to $240 per tonne for coking coal. Cash flow

forecasts adjusted for the risks specific to the tested assets are

derived from the most recent financial plans approved by

management for the next five years. Beyond the specifically

forecasted period, the Company extrapolates cash flows for the

remaining years based on an estimated growth rate of 2%. This

rate does not exceed the average long-term growth rate for the

relevant markets.

The Company considered its exposure to certain climate-related

risks which could affect its estimates of future cash flow

projections applied for the determination of the recoverable

amount of its GCGUs and CGUs. With the switch to electric

vehicles and the move to wind and solar power generation, the

Company sees additional opportunities as customers deepen

their understanding of embedded and lifecycle emissions of the

materials where steel compares favorably. ArcelorMittal's most

substantial climate-related policy risk is the EU Emissions

Trading scheme ("'ETS"), which applies to all its European

plants. The risk concerns the Company's primary steelmaking

plants which are exposed to this regulation and yet unprotected

against competition from imported steel. The Company is

committed to the objectives of the Paris agreement and

announced its ambition to reduce carbon emissions by 35% in

Europe and 25% group-wide by 2030 and achieve group-wide

carbon neutrality by 2050. These announced goals will require

significant long-term investments which require global level

playing field, access to abundant and affordable clean energy,

facilitating necessary energy infrastructure, access to

sustainable finance for low-emissions steelmaking and

accelerated transition to a circular economy. In addition, the

Company considered the legal obligation of carbon neutrality by

2050 effective within the EU and in Canada following adoption

of the Climate Law and the Net Zero Emission Accountability

Act, respectively. Accordingly, with respect to its flat steel

operations in the EU and in Canada, ArcelorMittal concluded

that future decarbonization capital expenditures, which

correspond essentially to the construction of DRI-EAF facilities,

are necessary to maintain the level of economic benefits

expected to arise from the assets in their current condition and

should therefore be included in the Company’s assumptions for

future cash flows of the recoverable amount of the respective

GCGUs and CGUs. At the same time, the Company is engaged

in developing in the near to medium term a range of innovative

low-emission technologies for the transition to decarbonized

steel including the Smart Carbon route and the Hydrogen-DRI

route and required investments are considered either in the

Company's future cash flow projections or in the context of joint

ventures, as an element of the Company's best estimate of

capital expenditures which are committed and / or being

implemented. The Company acknowledged that GCGUs and

CGUs applying the blast furnace basic oxygen furnace "BF-

BOF" route in other jurisdictions than the EU and Canada will

apply decarbonization at a different pace. They may also not yet

be subject to a legal obligation of carbon neutrality, which would

not allow to include future decarbonization capital expenditures

in their value in use calculations. Accordingly, the Company

increased risk premiums included in their discount rates until

they are able to accelerate their decarbonization strategy to

meet the 2050 carbon neutrality objective and a legal obligation

arises in the relevant jurisdiction. Additionally, the Company’s

assumptions for future cash flows include an estimate for costs

that the Company expects to incur to acquire emission

allowances, which primarily impacts the flat steel operations in

the EU and in Canada. The assumption for carbon emission

Consolidated financial statements 284

(millions of U.S. dollar, except share and per share data)

cost is based on historical experience, implementation of

decarbonization strategies to mitigate or otherwise offset such

future costs and information available of future changes. Due to

economic developments, uncertainties over the pace of

transition to low-emission technologies, political and

environmental actions that will be taken to meet the carbon

reduction goals, regulatory changes and emissions activity

arising from climate-related matters, the Company’s

assumptions used in the recoverable amount calculations, such

as capital expenditure, carbon emission costs and other

assumptions are inherently uncertain and may ultimately differ

from actual amounts.

The assumptions used in the value in use calculations are

inherently uncertain in the context of the ongoing presence and

repercussions of the COVID-19 pandemic and require

management judgment. The Company's process includes

specific consideration given to the most recent short, medium

and long-term price forecasts and discount rates consistent with

external information, expected production and shipment

volumes and updated development plans, operating costs and

capital expenditure plans. Operating margins benefited in 2021

from a continuing strong price environment, favorable supply

demand balance following a prolonged period of destocking and

structural cost improvements sustained from the Company's

response to the COVID-19 crisis. While the restocking effect

has run its course with inventories returning to normal levels, the

Company expects real demand recovery to continue in 2022.

Management estimates discount rates using pre-tax rates that

reflect current market rates for investments of similar risk. The

rate for each CGU, including beta, cost of debt and capital

structure was estimated from the weighted average cost of

capital of producers, which operate a portfolio of assets similar

to those of the Company’s assets and CGU specific country risk

premiums were applied. GCGU weighted average pre-tax

discount rates were as follows in 2021 and 2020:

NAFTA

Brazil

Europe

ACIS

GCGU weighted average pre-tax discount rate used in 2021 (in %)

11.3

15.6

8.6

14.7

GCGU weighted average pre-tax discount rate used in 2020 (in %)

10.5

15.9

8.5

14.6

Once recognized, impairment losses for goodwill are not

reversed.

There were no impairment charges recognized with respect to

goodwill following the Company’s impairment tests as of

October 1, 2021 and October 1, 2020. The total value in use

calculated for all GCGUs overall increased in 2021 as compared

to 2020.

The Company did not identify any reasonably possible change

in key assumptions which could cause an impairment loss to be

recognized for any of its GCGUs.

Impairment test of property, plant and equipment

At each reporting date, ArcelorMittal reviews the carrying

amounts of its intangible assets (excluding goodwill) and

tangible assets to determine whether there is any indication that

the carrying amount of those assets may not be recoverable

through continuing use. If any such indication exists, the

recoverable amount of the asset (or cash generating unit) is

reviewed in order to determine the amount of the impairment, if

any. The recoverable amount is the higher of its fair value less

cost of disposal and its value in use.

In estimating its value in use, the estimated future cash flows

are discounted to their present value using a pre-tax discount

rate that reflects current market assessments of the time value

of money and the risks specific to the asset (or cash-generating

unit). For an asset that does not generate cash inflows largely

independent of those from other assets, the recoverable amount

is determined for the cash-generating unit to which the asset

belongs. The cash-generating unit is the smallest identifiable

group of assets corresponding to operating units that generate

cash inflows. If the recoverable amount of an asset (or cash-

generating unit) is estimated to be less than its carrying amount,

an impairment loss is recognized. An impairment loss is

recognized as an expense immediately as part of operating

income in the consolidated statements of operations.

In the case of permanently idled assets, the impairment is

measured at the individual asset level. Otherwise, the

Company’s assets are measured for impairment at the cash-

generating unit level. In certain instances, the cash-generating

unit is an integrated manufacturing facility which may also be an

operating subsidiary. Further, a manufacturing facility may be

operated in concert with another facility with neither facility

generating cash inflows that are largely independent from the

cash inflows of the other. In this instance, the two facilities are

combined for purposes of testing for impairment. As of

December 31, 2021, the Company determined it has 58 cash-

generating units.

An impairment loss, related to intangible assets other than

goodwill and tangible assets recognized in prior years is

reversed if, and only if, there has been a change in the

estimates used to determine the asset’s recoverable amount

since the last impairment loss was recognized. However, the

increased carrying amount of an asset due to a reversal of an

impairment loss will not exceed the carrying amount that would

285 Consolidated financial statements

have been determined (net of amortization or depreciation) had

no impairment loss been recognized for the asset in prior years.

A reversal of an impairment loss is recognized immediately as

part of operating income in the consolidated statements of

operations.

Impairment charges and reversals relating to property, plant and

equipment were as follows for the years ended December 31,

2021, 2020 and 2019:

2021

In the second half of 2021, in connection with the Company’s

annual test for impairment of goodwill, property, plant and

equipment was also tested for impairment at that date. The

Company reversed 218 of impairment charges which had been

recognized in 2015 for the Sestao facility in Spain following

idling for an indefinite timing. The impairment reversal results

from improved future cash flow projections following restart of

operations and the Company's decarbonization strategy in

Spain.

Cash-Generating Unit

Region

Operating

Segment

Impairment

Reversed

2021 Pre-Tax

Discount Rate

2020 Pre-Tax

Discount Rate

Carrying amount of property,

plant and equipment as of

December 31, 2021

Europe flat products

Europe

218

8.53%

8.47%

11,005

2020

In 2020, the Company recognized a 133 net reversal of

impairment including impairment charges of 92 and 104 related

to the permanent closure of the coke plant in Florange (France)

and the permanent closure of part of a blast furnace and steel

plant in Krakow (Poland), respectively. In addition, the Company

recognized an impairment loss of 331 relating to its plate

business in the Europe segment classified as held for sale at

December 31, 2020 (see note 2.3.2).

In the third quarter of 2020, the Company reversed 660 of

impairment charges of property, plant and equipment previously

recognized for ArcelorMittal USA as a result of the increase in

the recoverable amount. The Company calculated the fair value

less cost of disposal using a market approach with market

multiples derived from comparable transactions, a Level 3

unobservable input. ArcelorMittal USA was sold to Cleveland-

Cliffs as described in note 2.3.1.

2019

In 2019, the Company recognized a total impairment charge

related to property, plant and equipment amounting to 1,927, of

which 1,300 relating to ArcelorMittal USA (NAFTA), 102 to

ArcelorMittal South Africa (ACIS), and 525 in Europe, including

497 related to ArcelorMittal Italia remedies (see note 2.3.1).

During the six months ended June 30, 2019, the Company

recognized an impairment charge for property, plant and

equipment amounting to 600 relating to ArcelorMittal USA as a

result of a downward revision of cash flow projections in

particular with respect to near-term steel selling prices as

follows:

Cash-Generating Unit

Country

Operating

Segment

Impairment

Recorded

2019 Pre-Tax

Discount Rate

2018 Pre-Tax

Discount Rate

Carrying amount of property,

plant and equipment as of June

30, 2019

ArcelorMittal USA

USA

NAFTA

600

13.98%

16.91%

3,213

In the second half of 2019, in connection with management’s

annual test for impairment of goodwill, property, plant and

equipment was also tested for impairment at that date. The

Company recognized an impairment charge for property, plant

and equipment amounting to 700 relating to ArcelorMittal USA in

the NAFTA operating segment as a result of a downward

revision of cash flow projections in particular with respect to

near-term steel selling prices consisting of the following:

Cash-Generating Unit

Country

Operating

Segment

Impairment

Recorded

2019 Pre-Tax

Discount Rate

2018 Pre-Tax

Discount Rate

Carrying amount of property,

plant and equipment as of

December 31, 2019

ArcelorMittal USA

USA

NAFTA

700

10.17%

16.91%

2,568

In the same context, the Company recognized a impairment

charge for property, plant and equipment of 75 relating to the

Long Steel Products facility of Newcastle in ArcelorMittal South

Africa as a result of a lower domestic volumes as follows:

Consolidated financial statements 286

(millions of U.S. dollar, except share and per share data)

Cash-Generating Unit

Country

Operating

Segment

Impairment

Recorded

2019 Pre-Tax

Discount Rate

2018 Pre-Tax

Discount Rate

Carrying amount of property,

plant and equipment as of

December 31, 2019

Long Steel Products

South Africa

ACIS

13.87%

15.13%

163

In addition, the Company recorded impairment charges for property, plant and equipment of ArcelorMittal South Africa of 27 including 20

with respect to the closure of the Saldanha facility.

NOTE 6: FINANCING AND FINANCIAL INSTRUMENTS

6.1 Financial assets and liabilities

Financial assets and liabilities mainly comprise:

•fair values versus carrying amounts (see note 6.1.1)

•gross debt (see note 6.1.2)

•cash and cash equivalents, restricted cash, other restricted funds and reconciliations of cash flows (see note 6.1.3)

•net debt (see note 6.1.4)

•derivative financial instruments (see note 6.1.5)

•other non-derivative financial assets and liabilities (see note 6.1.6)

6.1.1 Fair values versus carrying amounts

The estimated fair values of certain financial instruments have been determined using available market information or other valuation

methodologies that require judgment in interpreting market data and developing estimates. The following table summarizes assets and

liabilities based on their categories at December 31, 2021:

287 Consolidated financial statements

December 31, 2021

Carrying

amount in

the

consolidated

statements

of financial

position

Non-

financial

assets and

liabilities

Assets/

Liabilities at

amortized

cost

Fair value

recognized

in profit or

loss

Fair value

recognized

in OCI

Derivatives

ASSETS

Current assets:

Cash and cash equivalents

4,215

—

4,215

—

Restricted cash and other restricted funds

156

—

156

—

Trade accounts receivable and other

5,143

—

4,521

—

622

—

Inventories

19,858

—

Prepaid expenses and other current assets

5,567

1,128

1,454

—

2,985

Total current assets

34,939

20,986

10,346

—

622

2,985

Non-current assets:

Goodwill and intangible assets

4,425

—

Property, plant and equipment and biological assets

30,075

30,037

—

Investments in associates and joint ventures

10,319

—

Other investments

1,146

—

1,146

—

Deferred tax assets

8,147

—

Other assets

1,461

359

648

136

—

318

Total non-current assets

55,573

53,287

648

174

1,146

318

Total assets

90,512

74,273

10,994

174

1,768

3,303

LIABILITIES AND EQUITY

Current liabilities:

Short-term debt and current portion of long-term debt

1,913

—

1,913

—

Trade accounts payable and other

15,093

—

15,093

—

Short-term provisions

1,064

1,048

—

Accrued expenses and other liabilities

4,831

1,420

3,095

—

316

Income tax liabilities

1,266

—

Total current liabilities

24,167

3,734

20,117

—

316

Non-current liabilities:

Long-term debt, net of current portion

6,488

—

6,488

—

Deferred tax liabilities

2,369

—

Deferred employee benefits

3,772

—

Long-term provisions

1,498

1,495

—

Other long-term obligations

874

343

473

—

Total non-current liabilities

15,001

7,979

6,964

—

Equity:

Equity attributable to the equity holders of the parent

49,106

—

Non-controlling interests

2,238

—

Total equity

51,344

—

Total liabilities and equity

90,512

63,057

27,081

—

374

Consolidated financial statements 288

(millions of U.S. dollar, except share and per share data)

December 31, 2020

Carrying amount

in the

consolidated

statements of

financial position

Non-financial

assets and

liabilities

Assets/

Liabilities at

amortized

cost

Fair value

recognized in

profit or loss

Fair value

recognized

in OCI

Derivatives

ASSETS

Current assets:

Cash and cash equivalents

5,600

—

5,600

—

Restricted cash and other restricted funds

363

—

363

—

Trade accounts receivable and other

3,072

—

2,699

—

373

—

Inventories

12,328

—

Prepaid expenses and other current assets

2,281

910

1,018

—

353

Assets held for sale

4,329

3,384

945

—

Total current assets

27,973

16,622

10,625

—

373

353

Non-current assets:

Goodwill and intangible assets

4,312

—

Property, plant and equipment and biological assets

30,622

30,577

—

Investments in associates and joint ventures

6,817

—

Other investments

2,980

—

2,980

—

Deferred tax assets

7,866

—

Other assets

1,482

237

785

136

—

324

Total non-current assets

54,079

49,809

785

181

2,980

324

Total assets

82,052

66,431

11,410

181

3,353

677

LIABILITIES AND EQUITY

Current liabilities:

Short-term debt and current portion of long-term debt

2,507

—

2,507

—

Trade accounts payable and other

11,525

—

11,525

—

Short-term provisions

935

919

—

Accrued expenses and other liabilities

4,197

1,160

2,829

—

208

Income tax liabilities

464

—

Liabilities held for sale

3,039

709

2,330

—

Total current liabilities

22,667

3,252

19,207

—

208

Non-current liabilities:

Long-term debt, net of current portion

9,815

—

9,815

—

Deferred tax liabilities

1,832

—

Deferred employee benefits

4,656

—

Long-term provisions

1,697

1,691

—

Other long-term obligations

1,148

354

698

—

Total non-current liabilities

19,148

8,533

10,519

—

Equity:

Equity attributable to the equity holders of the parent

38,280

—

Non-controlling interests

1,957

—

Total equity

40,237

—

Total liabilities and equity

82,052

52,022

29,726

—

304

289 Consolidated financial statements

The Company classifies the bases used to measure certain assets and liabilities at their fair value. Assets and liabilities carried or

measured at fair value have been classified into three levels based upon a fair value hierarchy that reflects the significance of the inputs

used in making the measurements.

The levels are as follows:

Level 1: Quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date;

Level 2: Significant inputs other than within Level 1 that are observable for the asset or liability, either directly (i.e.: as prices) or

indirectly (i.e.: derived from prices);

Level 3: Inputs for the assets or liabilities that are not based on observable market data and require management assumptions or inputs

from unobservable markets.

The following tables summarize the bases used to measure certain financial assets and financial liabilities at their fair value on recurring

basis.

As of December 31, 2021

Level 1

Level 2

Level 3

Total

Assets at fair value:

Investments in equity instruments at FVOCI

1,069

—

1,146

Trade accounts receivable and other subject to TSR programs*

—

622

Derivative financial current assets

—

2,985

—

2,985

Derivative financial non-current assets

—

303

318

Total assets at fair value

1,069

3,288

714

5,071

Liabilities at fair value:

Derivative financial current liabilities

—

316

—

316

Derivative financial non-current liabilities

—

Total liabilities at fair value

—

374

—

374

*The fair value of TSR program receivables equals carrying amount due to the short time frame between the initial recognition and time of sale.

As of December 31, 2020

Level 1

Level 2

Level 3

Total

Assets at fair value:

Investments in equity instruments at FVOCI

2,934

—

2,980

Trade accounts receivable and other subject to TSR programs*

—

373

Derivative financial current assets

—

353

—

353

Derivative financial non-current assets

—

265

324

Total assets at fair value

2,934

618

478

4,030

Liabilities at fair value:

Derivative financial current liabilities

—

208

—

208

Derivative financial non-current liabilities

—

Total liabilities at fair value

—

304

—

304

*The fair value of TSR program receivables equals carrying amount due to the short time frame between the initial recognition and time of sale.

Investments in equity instruments at FVOCI classified as Level 1 refer to listed securities quoted in active markets. A quoted market

price in an active market provides the most reliable evidence of fair value and is used without adjustment to measure fair value

whenever available, with limited exceptions. The total fair value is either the price of the most recent trade at the time of the market

close or the official close price as defined by the exchange on which the asset is most actively traded on the last trading day of the

period, multiplied by the number of units held without consideration of transaction costs. The decrease in investments in equity

instruments at FVOCI in 2021 was mainly related to the divestment of the Company's interest in Cleveland-Cliffs (see note 2.5).

Consolidated financial statements 290

(millions of U.S. dollar, except share and per share data)

Derivative financial assets and liabilities classified as Level 2 refer to instruments to hedge fluctuations in interest rates, foreign

exchange rates, raw materials (base metals), freight, energy and emission rights, see note 6.1.5 for further information.

Derivative financial assets and liabilities classified as Level 3 are described in note 6.1.5.

6.1.2 Gross debt

Gross debt includes bank debt, debenture loans and lease

obligations and is stated at amortized cost. However, loans that

are hedged under a fair value hedge are remeasured for the

changes in the fair value that are attributable to the risk that is

being hedged.

6.1.2.1 Short-term debt

Short-term debt, including the current portion of long-term debt,

consisted of the following:

December 31,

2021

2020

Short-term bank loans and other

credit facilities including

commercial paper 1

888

1,647

Current portion of long-term debt

836

677

Lease obligations2

189

183

Total

1,913

2,507

1.The weighted average interest rate on short-term borrowings outstanding was

0.9% and 1.3% as of December 31, 2021 and 2020, respectively.

2.See note 7.

On April 8, 2020, ArcelorMittal amended a €300 million (341)

term loan with a financial institution to extend the maturity to

April 8, 2021, on which date the term loan was fully repaid.

In 2014, ArcelorMittal entered into certain short-term committed

bilateral credit facilities. The facilities were subsequently

extended annually. During 2021 some facilities were not

extended. As of December 31, 2021, facilities totaling

approximately 0.3 billion, remain fully available.

Commercial paper

The Company has a commercial paper program enabling

borrowings of up to €1.5 billion. As of December 31, 2021 and

2020, the outstanding amount was 541 and 1,044, respectively.

291 Consolidated financial statements

6.1.2.2 Long-term debt

Long-term debt is comprised of the following:

December 31,

Year of maturity

Type of Interest

Interest rate1

2021

2020

Corporate

5.5 billion Revolving Credit Facility3

2023 - 2025

Floating

—

€500 million Unsecured Notes

2021

Fixed

3.00%

—

350

€750 million Unsecured Notes

2022

Fixed

3.13%

551

596

€500 million Unsecured Notes

2023

Fixed

0.95%

415

448

€750 million Unsecured Notes

2023

Fixed

1.00%

848

917

€1.0 billion Unsecured Notes

2024

Fixed

2.25%

604

1,234

750 Unsecured Notes

2024

Fixed

3.60%

289

747

500 Unsecured Notes

2025

Fixed

6.13%

183

256

€750 million Unsecured Notes

2025

Fixed

1.75%

844

913

750 Unsecured Notes

2026

Fixed

4.55%

399

745

500 Unsecured Notes

2029

Fixed

4.25%

494

1.5 billion Unsecured Bonds

2039

Fixed

7.00%

671

1.0 billion Unsecured Notes

2041

Fixed

6.75%

428

Other loans

2022 - 2023

Fixed

1.8% - 2.4%

142

218

EIB loan

2025

Fixed

1.16%

215

304

Other loans

2029 - 2035

Floating

0.4% - 2.3%

273

1,204

Total Corporate

6,356

9,525

Americas

Other loans

2020 - 2030

Fixed/Floating

0.0% - 9.5%

Total Americas

Europe, Asia & Africa

EBRD Facility

2024

Floating

2.2% - 2.5%

129

Other loans

2021 - 2030

Fixed/Floating

0.0% - 4.7%

123

Total Europe, Asia & Africa

205

252

Total

6,633

9,860

Less current portion of long-term debt

(836)

(677)

Total long-term debt (excluding lease obligations)

5,797

9,183

Long-term lease obligations2

691

632

Total long-term debt, net of current portion

6,488

9,815

1.Rates applicable to balances outstanding at December 31, 2021. For debt that has been redeemed in its entirety during 2021, the interest rates refer to the rates at

repayment date.

2.Net of current portion of 189 and 183 as of December 31, 2021 and 2020, respectively. Further information regarding leases is provided in note 7.

3. On November 26, 2020, the commitments were extended by one year to December 19, 2025. The commitments are 5.5 billion until December 19, 2023 and 5.4 billion

until December 19, 2025.

Corporate

5.5 billion Revolving Credit Facility

On December 19, 2018, ArcelorMittal signed an agreement for a

5.5 billion revolving credit facility (the "Facility"). This Facility

replaced the 5.5 billion revolving credit facility dated April 30,

2015, which was amended and extended on December 21,

2016. The agreement incorporated a single tranche of 5.5 billion

maturing on December 19, 2023, with two one-year extension

options. On November 27, 2019 and on November 26, 2020,

ArcelorMittal exercised the option to extend the facility's maturity

by one year to December 19, 2024 and to December 19, 2025,

respectively. The extension was completed for 5.4 billion of the

available amount, with the 0.1 billion remaining with a maturity

of December 19, 2023. On April 27, 2021, the Facility was

amended so that the margin payable will be increased or

decreased depending on the Company’s performance against

two metrics measured annually against pre-defined targets with

respect to its environmental and sustainability performance

(CO2 intensity of the Company’s European operations and the

Consolidated financial statements 292

(millions of U.S. dollar, except share and per share data)

number of facilities which have been certified by

ResponsibleSteel™). The Facility may be used for general

corporate purposes. As of December 31, 2021, the 5.5 billion

revolving credit facility was fully available. The Company makes

drawdowns from and repayments on this Facility in the

framework of its cash management.

On September 30, 2010, ArcelorMittal entered into 500 revolving

multi-currency letter of credit facility (the "Letter of Credit

Facility"). The Letter of Credit Facility is used by the Company

and its subsidiaries for the issuance of letters of credit and other

instruments. The terms of the letters of credit and other

instruments contain certain restrictions as to duration. The Letter

of Credit Facility was amended on October 26, 2012 and

September 30, 2014 to reduce its amount to 450 and to 350,

respectively. On July 31, 2019, the Company refinanced its

Letter of Credit Facility by entering into a 350 revolving multi-

currency letter of credit facility, which matures on July 31, 2022.

On August 5, 2020, the Letter of Credit Facility maturity was

extended to July 31, 2023. On November 25, 2020, the Letter or

Credit Facility increased its amount to 395. On June 25, 2021,

the maturity of the Letter of Credit Facility was extended to July

31, 2024.

Bonds

On April 9, 2021, at maturity, ArcelorMittal repaid all of the

outstanding €285 million (342) of its €500 million Fixed Rate

Notes due 2021.

On June 29, 2021, pursuant to a cash tender offer, ArcelorMittal

repurchased €471 million (562) of its EUR denominated 2.25%

Notes due 2024 for a total aggregate purchase price including

accrued interest of €501 million (595). Following this purchase,

€529 million (625) principal amount remained outstanding.

On June 29, 2021, pursuant to a cash tender offer, ArcelorMittal

repurchased 460 of its U.S. dollar denominated 3.60% Notes

due 2024 for a total aggregate purchase price including accrued

interest of 503. Following this purchase, 290 principal amount

remained outstanding.

On June 29, 2021, pursuant to a cash tender offer, ArcelorMittal

repurchased 73 of its U.S. dollar denominated 6.125% notes

due 2025 for a total aggregate purchase price including accrued

interest of 86. Following this purchase, 183 principal amount

remained outstanding.

On June 29, 2021, pursuant to a cash tender offer, ArcelorMittal

repurchased 349 of its U.S. dollar denominated 4.55% notes

due 2026 for a total aggregate purchase price including accrued

interest of 399. Following this purchase, 401 principal amount

remained outstanding.

The margin applicable to ArcelorMittal’s principal credit facilities

(5.5 billion revolving credit facility and certain other credit

facilities) and the coupons on certain of its outstanding bonds

are subject to adjustment in the event of a change in its long-

term credit ratings. The following table provides details of the

outstanding bonds on maturity, the original coupons and the

current interest rates for the bonds impacted by changes in the

long-term credit rating:

Nominal value

Date of

issuance

Repayment

date

Interest rate1

Issued at

€750 million Unsecured Notes

Jan 14, 2015

Jan 14, 2022

3.13%

99.73%

€500 million Unsecured Notes

Dec 4, 2017

Jan 17, 2023

0.95%

99.38%

€750 million Unsecured Notes

Nov 19, 2019

May 19, 2023

1.00%

99.89%

€250 million Unsecured Notes

Jul 4, 2019

Jan 17, 2024

2.25%

105.59%

€750 million Unsecured Notes

Jan 17, 2019

Jan 17, 2024

2.25%

99.72%

750 Unsecured Notes

Jul 16, 2019

Jul 16, 2024

3.60%

99.86%

500 Unsecured Notes

Jun 1, 2015

Jun 1, 2025

6.13%

100.00%

€750 million Unsecured Notes

Nov 19, 2019

Nov 19, 2025

1.75%

99.41%

750 Unsecured Notes

Mar 11, 2019

Mar 11, 2026

4.55%

99.72%

500 Unsecured Notes

Jul 16, 2019

Jul 16, 2029

4.25%

99.00%

1.0 billion Unsecured Bonds

Oct 8, 2009

Oct 15, 2039

7.00%

95.20%

500 Unsecured Bonds

Aug 5, 2010

Oct 15, 2039

7.00%

104.84%

1.0 billion Unsecured Notes

Mar 7, 2011

Mar 1, 2041

6.75%

99.18%

1.Rates applicable at December 31, 2021.

European Investment Bank (“EIB”) Loan

On June 2, 2021, ArcelorMittal signed a €280 million loan

agreement with the European Investment Bank ("EIB") for

funding of research, development and innovation projects in

Europe over the period of 2021-2023. This operation benefits

from a guarantee from the European Union under the European

293 Consolidated financial statements

Fund for Strategic Investments. As of December 31, 2021 the

facility remained fully available. On March 1, 2022 ArcelorMittal

sent disbursement request to the EIB for the full amount of €280

million (335).

On December 16, 2016, ArcelorMittal signed a €350 million

finance contract with the EIB in order to finance European

research, development and innovation projects over the period

2017-2020 within the European Union, predominantly in France,

Belgium and Spain, but also in Poland and Luxembourg. This

operation benefits from a guarantee from the European Union

under the European Fund for Strategic Investments. As of

December 31, 2021, €190 million (215) was outstanding.

Other loans

On July 7, 2021, the Company fully prepaid Schuldschein

borrowings for a total of €450 million (532), of which €405 million

(479) maturing originally on July 5, 2023 and €45 million (53)

maturing originally on July 7, 2025.

On December 21, 2018, the Company entered into a facility

agreement with a group of lenders for €235 million to finance the

construction of a new hot strip mill in Mexico. This facility

became effective upon issuance of a guarantee by the

Oesterreichische Kontrollbank AG in March 2019. The last

installment under this agreement is due 8.5 years after the

starting date of the credit facility (which means the earlier of (a)

the date of issue of the provisional acceptance certificate for the

hot strip mill and (b) June 30, 2021). The outstanding amount in

total as of December 31, 2021 was €162 million (184).

On May 21, 2019, ArcelorMittal entered into a bilateral term loan

due May 20, 2022. On July 31, 2020, the bilateral term loan was

extended for one year to May 19, 2023. The bilateral term loan

was fully drawn on June 3, 2019 for an amount of €125 million

(142). On March 4, 2021, the Company early repaid the bilateral

term loan.

On December 20, 2019, the Company entered into a bilateral

loan due June 20, 2023. The bilateral term loan was fully drawn

on January 30, 2020, for an amount of €100 million (110). This

term loan could have been extended twice, each time for one

additional year. On March 8, 2021, the Company early repaid

the bilateral term loan.

On July 2, 2020, ArcelorMittal entered into an agreement for

financing with a financial institution for net proceeds of CAD174

million (128) with repayment over several dates in 2021 and

2022.

On November 29, 2021, ArcelorMittal entered into an agreement

for financing with a financial institution for net proceeds of

CAD130 million (105) with repayment over several dates in

2021, 2022 and 2023.

Other loans relate to various debt with banks and public

institutions.

Americas

Other loans

Other loans relate mainly to loans contracted by ArcelorMittal

subsidiaries in Mexico with different counterparties.

Europe, Asia and Africa

On December 21, 2017, ArcelorMittal Kryvyi Rih entered into a

175 loan agreement with the European Bank for Reconstruction

and Development ("EBRD") in order to support the upgrade of

its production facilities, energy efficiency improvement and

environmental impact reduction. The loan agreement also

provides for an additional 175 in loan facilities which are

currently uncommitted. As of December 31, 2021, 175 was

drawn under the agreement.

On May 25, 2017, ArcelorMittal South Africa signed a 4.5 billion

South African rand revolving borrowing base finance facility

maturing on May 25, 2020. The facility was amended and

extended on July 26, 2019 with a maturity of on July 26, 2022.

On August 23, 2021, the facility was further amended and

restated for an amount of 3.5 billion South African rand and with

a maturity of September 3, 2024. Any borrowings under the

facility are secured by certain eligible inventory and receivables,

as well as certain other working capital and related assets of

ArcelorMittal South Africa. The facility is used for general

corporate purposes. The facility is not guaranteed by

ArcelorMittal. As of December 31, 2021, 1.8 billion South African

rand (113) was drawn.

Other loans

Other loans mainly relate to loans contracted by ArcelorMittal

subsidiaries in Spain with different counterparties.

Other

Certain debt agreements of the Company or its subsidiaries

contain certain restrictive covenants. Among other things, these

covenants limit encumbrances on the assets of ArcelorMittal and

its subsidiaries, the ability of ArcelorMittal’s subsidiaries to incur

debt and the ability of ArcelorMittal and its subsidiaries to

dispose of assets in certain circumstances. Certain of these

agreements also require compliance with a financial covenant.

On April 13, 2021, ArcelorMittal's Facility was amended so that

the Leverage ratio financial covenant would permanently cease

to apply in the event that the Company obtained an investment

grade long-term credit rating (with stable outlook) from two

rating agencies (which occurred in 2021, as described in

"Operating and financial review — Liquidity and Capital

Resources" – section).

Consolidated financial statements 294

(millions of U.S. dollar, except share and per share data)

Hedge of net investments

As of April 1, 2018, the Company designated a portfolio of euro

denominated debt (€3,709 million as of December 31, 2021) as

a hedge of certain euro denominated investments (€8,261

million as of December 31, 2021) in order to mitigate the foreign

currency risk arising from certain euro denominated

subsidiaries' net assets. The risk arises from the fluctuation in

spot exchange rates between the U.S. dollar and euro, which

causes the amount of the net investments to vary. The hedged

risk in the hedge of net investments is a risk of a weakening

euro against the U.S. dollar that will result in a reduction in the

carrying amount of the Company's net investments in the

subsidiaries subject to the hedge. The euro denominated debt is

designated as a hedging instrument for the change in the value

of the net investments that is attributable to changes in the euro/

U.S. dollar spot rate.

To assess the hedge effectiveness, the Company determines

the economic relationship between the hedging instrument and

the hedged item by comparing changes in the carrying amount

of the debt portfolio that are attributable to a change in the spot

rate with changes in the net investments in the foreign

operations due to movements in the spot rate.

As of December 31, 2021, the Company recognized 423 foreign

exchange gain arising on the translation of the euro

denominated debt designated as a hedge of the euro

denominated net investments in foreign operations in other

comprehensive income within the foreign exchange translation

reserve.

Maturity profile

As of December 31, 2021 the scheduled maturities of short-term

debt, long-term debt and long-term lease obligations, including

their current portion are as follows:

Year of maturity

Amount

2022

1,913

2023

1,545

2024

1,124

2025

1,163

2026

542

Subsequent years

2,114

Total

8,401

Fair value

The following tables summarize the Company’s bases used to

estimate its debt at fair value. Fair value measurement has been

classified into three levels based upon a fair value hierarchy that

reflects the significance of the inputs used in making the

measurements.

As of December 31, 2021

Carrying amount

Fair Value

Level 1

Level 2

Level 3

Total

Instruments payable bearing interest at fixed rates

7,011

6,380

1,261

—

7,641

Instruments payable bearing interest at variable rates

502

—

480

—

480

Total long-term debt, including current portion

7,513

6,380

1,741

—

8,121

Short term bank loans and other credit facilities including

commercial paper

888

—

888

—

888

As of December 31, 2020

Carrying amount

Fair Value

Level 1

Level 2

Level 3

Total

Instruments payable bearing interest at fixed rates

9,195

8,698

1,431

—

10,129

Instruments payable bearing interest at variable rates

1,480

1,488

—

1,488

Total long-term debt, including current portion

10,675

8,698

2,919

—

11,617

Short term bank loans and other credit facilities including

commercial paper

1,647

1,649

—

1,649

Instruments payable classified as Level 1 refer to the

Company’s listed bonds quoted in active markets. The total fair

value is the official closing price as defined by the exchange on

which the instrument is most actively traded on the last trading

day of the period, multiplied by the number of units held without

consideration of transaction costs.

Instruments payable classified as Level 2 refer to all debt

instruments not classified as Level 1. The fair value of the debt

is based on estimated future cash flows converted into U.S.

dollar at the forward rate and discounted using current U.S.

dollar zero coupon rates and ArcelorMittal’s credit spread

quotations for the relevant maturities.

295 Consolidated financial statements

There were no instruments payable classified as Level 3.

6.1.3 Cash and cash equivalents, restricted cash and other

restricted funds and reconciliations of cash flows

Cash and cash equivalents consist of cash and short-term

highly liquid investments that are readily convertible to cash with

original maturities of three months or less at the time of

purchase and are carried at cost plus accrued interest, which

approximates fair value.

Cash and cash equivalents are primarily centralized at the

parent level and are managed by ArcelorMittal Treasury SNC,

although from time to time cash or cash equivalent balances

may be held at the Company’s international subsidiaries or its

holding companies. Some of these operating subsidiaries have

debt outstanding or are subject to acquisition agreements that

impose restrictions on such operating subsidiaries’ ability to pay

dividends, but such restrictions are not significant in the context

of ArcelorMittal’s overall liquidity. Repatriation of funds from

operating subsidiaries may also be affected by tax and foreign

exchange policies in place from time to time in the various

countries where the Company operates, though none of these

policies are currently significant in the context of ArcelorMittal’s

overall liquidity.

Cash and cash equivalents consisted of the following:

December 31,

2021

2020

Cash at bank

2,674

3,487

Term deposits

607

393

Money market funds1

934

1,720

Total

4,215

5,600

1Money market funds are highly liquid investments with a maturity of 3 months

or less from the date of acquisition.

Restricted cash represents cash and cash equivalents not

readily available to the Company, mainly related to insurance

deposits, cash accounts in connection with environmental

obligations and true sale of receivables programs, as well as

various other deposits or required balance obligations related to

letters of credit and credit arrangements.

Restricted cash and other restricted funds of 156 as of

December 31, 2021 included 89 relating to various

environmental obligations, true sales of receivables programs

and letter of credits issued in ArcelorMittal South Africa.

Restricted cash of 363 as of December 31, 2020 included 56

relating to various environmental obligations and true sales of

receivables programs in ArcelorMittal South Africa and 260 with

respect to a cash collateral provided by the Company until

collection of the TSR receivables retained in ArcelorMittal USA

after disposal (see note 4.1). It also included 20 and 20 in

connection with the mandatory convertible bonds as of

December 31, 2021 and December 31, 2020, respectively (see

note 11.2).

Changes in restricted cash are included within investing

activities in the consolidated statements of cash flows.

Reconciliation of liabilities arising from financing activities

The table below details changes in the Company's liabilities

arising from financing activities, including both cash and non-

cash changes. Liabilities arising from financing activities are

those for which cash flows were, or future cash flows will be

classified in the Company's consolidated statements of cash

flows from financing activities.

Consolidated financial statements 296

(millions of U.S. dollar, except share and per share data)

Long-term debt, net of current

portion

Short-term debt and current

portion of long term debt

Balance as of December 31, 2019 (note 6.1.2)

11,471

2,869

Proceeds from long-term debt

323

—

Payments of long-term debt

(1,645)

—

Amortized cost

Proceeds from short-term debt

—

430

Payments of short-term debt

—

(1,503)

Current portion of long-term debt

(860)

860

Payments of principal portion of lease liabilities (note 7) 1

(7)

(235)

Additions to lease liabilities (notes 5.2 and 7)

195

Derecognition of lease liabilities following the divestment of ArcelorMittal USA (note

2.3.1)

(208)

(70)

Debt classified as held for sale (note 2.3.2)

(21)

(3)

Unrealized foreign exchange effects and other movements

559

114

Balance as of December 31, 2020 (note 6.1.2)

9,815

2,507

Proceeds from long-term debt

147

—

Payments of long-term debt

(2,332)

—

Amortized cost

Proceeds from short-term debt

—

287

Payments of short-term debt

—

(1,664)

Current portion of long-term debt

(1,025)

1,025

Payments of principal portion of lease liabilities (note 7) 1

(8)

(191)

Additions to lease liabilities (notes 5.2 and 7)

289

Unrealized foreign exchange effects and other movements

(402)

(85)

Balance as of December 31, 2021 (note 6.1.2)

6,488

1,913

1.Cash payments decreasing the outstanding liability relating to leases are classified under payments of principal portion of lease liabilities and other financing activities in

the Company's consolidated statements of cash flows.

297 Consolidated financial statements

6.1.4 Net debt

The Company monitors its net debt in order to manage its capital. The following tables present the structure of the Company’s net debt

by original currency at December 31, 2021 and December 31, 2020:

As of December 31, 2021

Total USD

EUR

USD

PLN

CAD

ZAR

Other

(USD)

Short-term debt and current portion of long-term debt

1,913

1,456

132

115

Long-term debt, net of current portion

6,488

3,443

2,637

215

133

Cash and cash equivalents and restricted cash

(4,371)

(1,646)

(1,531)

(97)

(56)

(268)

(773)

Net debt

4,030

3,253

1,203

132

131

(148)

(541)

As of December 31, 2020

Total USD

EUR

USD

CAD

PLN

UAH

Other

(USD)

Short-term debt and current portion of long-term debt

2,507

1,283

765

172

222

Long-term debt, net of current portion

9,815

5,775

3,567

239

126

Cash and cash equivalents, restricted cash and other

restricted funds

(5,963)

(2,637)

(2,236)

(35)

(152)

(19)

(884)

Net debt

6,359

4,421

2,096

228

106

(536)

6.1.5 Derivative financial instruments

The Company uses derivative financial instruments principally to

manage its exposure to fluctuations in interest rates, exchange

rates, prices of raw materials, energy and emission rights

allowances arising from operating, financing and investing

activities. Derivative financial instruments are classified as

current or non-current assets or liabilities based on their maturity

dates and are accounted for at the trade date. Embedded

derivatives are separated from the host contract and accounted

for separately if they are not closely related to the host contract.

The Company measures all derivative financial instruments

based on fair values derived from market prices of the

instruments or from option pricing models, as appropriate. Gains

or losses arising from changes in fair value of derivatives are

recognized in the consolidated statements of operations, except

for derivatives that are designated and qualify for cash flow or

net investment hedge accounting.

Changes in the fair value of a derivative that is designated and

qualifies as a cash flow hedge are recorded in other

comprehensive income. Amounts deferred in equity are

recorded in the consolidated statements of operations in the

periods when the hedged item is recognized in the consolidated

statements of operations and within the same line item (see

note 6.3 Cash flow hedges).

The Company formally assesses, both at the hedge’s inception

and on an ongoing basis, whether the derivatives that are used

in hedging transactions are effective in offsetting changes in fair

values or cash flows of hedged items. When a hedging

instrument is sold, terminated, expired or exercised, the

accumulated unrealized gain or loss on the hedging instrument

is maintained in equity until the forecasted transaction occurs. If

the hedged transaction is no longer probable, the cumulative

unrealized gain or loss, which had been recognized in equity, is

reported immediately in the consolidated statements of

operations.

Foreign currency differences arising on the translation of a

financial liability designated as a hedge of a net investment in a

foreign operation are recognized directly as a separate

component of equity, to the extent that the hedge is effective. To

the extent that the hedge is ineffective, such differences are

recognized in the consolidated statements of operations (see

note 6.3 Net investment hedge).

The Company manages the counter-party risk associated with

its instruments by centralizing its commitments and by applying

procedures which specify, for each type of transaction and

underlying position, risk limits and/or the characteristics of the

counter-party. The Company does not generally grant to or

require guarantees from its counterparties for the risks incurred.

Allowing for exceptions, the Company’s counterparties are part

of its financial partners and the related market transactions are

governed by framework agreements (mainly International

Swaps and Derivatives Association agreements which allow

netting only in case of counterparty default). Accordingly,

derivative assets and derivative liabilities are not offset.

Consolidated financial statements 298

(millions of U.S. dollar, except share and per share data)

Derivative financial instruments classified as Level 2:

The following tables summarize this portfolio:

December 31, 2021

Assets

Liabilities

Notional

Amount

Fair Value

Notional

Amount

Fair Value

Foreign exchange rate instruments

Forward purchase contracts

3,845

133

1,023

(43)

Forward sale contracts

2,685

1,431

(15)

Exchange option purchases

712

254

(7)

Exchange options sales

338

707

(2)

Total foreign exchange rate instruments

156

(67)

Raw materials (base metals), freight, energy, emission rights

Term contracts sales

121

644

(259)

Term contracts purchases

3,461

3,131

497

(48)

Total raw materials (base metals), freight, energy, emission rights

3,132

(307)

Total

3,288

(374)

December 31, 2020

Assets

Liabilities

Notional

Amount

Fair Value

Notional

Amount

Fair Value

Interest rate instruments

Other interest rate instruments

—

Total interest rate instruments

—

Foreign exchange rate instruments

Forward purchase contracts

356

2,199

(113)

Forward sale contracts

847

371

(19)

Currency swaps sales

260

—

Exchange option purchases

2,938

1,176

(15)

Exchange options sales

2,960

1,208

(23)

Total foreign exchange rate instruments

106

(170)

Raw materials (base metals), freight, energy, emission rights

Term contracts sales

567

370

(46)

Term contracts purchases

1,673

473

854

(87)

Option sales/purchases

(1)

Total raw materials (base metals), freight, energy, emission rights

512

(134)

Total

618

(304)

299 Consolidated financial statements

Derivative financial assets and liabilities classified as Level 2

refer to instruments to hedge fluctuations in interest rates,

foreign exchange rates, raw materials (base metals), freight,

energy and emission rights. The total fair value is based on the

price a dealer would pay or receive for the security or similar

securities, adjusted for any terms specific to that asset or

liability. Market inputs are obtained from well-established and

recognized vendors of market data and the fair value is

calculated using standard industry models based on significant

observable market inputs such as foreign exchange rates,

commodity prices, swap rates and interest rates.

Derivative financial instruments classified as Level 3:

Derivative financial non-current assets classified as Level 3 refer

to the call option on the 1,000 mandatory convertible bonds (see

note 11.2). The fair valuation of Level 3 derivative instruments is

established at each reporting date and compared to the prior

period. ArcelorMittal’s valuation policies for Level 3 derivatives

are an integral part of its internal control procedures and have

been reviewed and approved according to the Company’s

principles for establishing such procedures. In particular, such

procedures address the accuracy and reliability of input data,

the accuracy of the valuation model and the knowledge of the

staff performing the valuations.

ArcelorMittal establishes the fair valuation of the call option on

the 1,000 mandatory convertible bonds through the use of

binomial valuation models based on the estimated values of the

underlying equity spot price of $137 and volatility of 18%.

Binomial valuation models use an iterative procedure to price

options, allowing for the specification of nodes, or points in time,

during the time span between the valuation date and the

option’s expiration date. In contrast to the Black-Scholes model,

which provides a numerical result based on inputs, the binomial

model allows for the calculation of the asset and the option for

multiple periods along with the range of possible results for each

period.

Observable input data used in the valuations include zero

coupon yield curves, stock market price, European Central Bank

foreign exchange fixing and Libor interest rates. Unobservable

inputs are used to measure fair value to the extent that relevant

observable inputs are not available. Specifically, the Company

computed unobservable volatility data during 2021 based mainly

on the movement of China Oriental stock market prices

observable in the active market over 90 working days, which is

particularly sensitive for the valuation resulting from the model.

Following the repayment of notes issued by subsidiaries to the

Company which were linked to the value of Erdemir shares in

2019 as described in note 11.2, the unobservable volatility data

from the movement of Erdemir shares does no longer impact

the valuation. A 10% increase or decrease in Hera Ermac share

prices would result in a 465% and 95% increase and decrease

of the fair value of the call option at December 31, 2021,

respectively.

As of December 31, 2019, derivative financial liabilities

classified as Level 3 also included a pellet purchase agreement

containing a special payment that varied according to the price

of steel in the United States domestic market (“domestic steel

price”). The instrument was derecognized on December 9, 2020

following the sale of ArcelorMittal USA (note 2.3.1). Until the

divestment date the fair valuation of the special payment had

been established by comparing the current forecasted domestic

steel price to the projected domestic steel price at the inception

of the contract. Observable input data included third-party

forecasted domestic steel prices. Unobservable inputs were

used to measure fair value to the extent that relevant observable

inputs were not available or not consistent with the Company's

views on future prices and referred specifically to domestic steel

prices beyond the timeframe of available third-party forecasts.

As of the date of sale the fair value of the pellet purchase was

based on the future average US domestic steel price of $554

per tone.

The following table summarizes the reconciliation of the fair value of the financial instruments classified as Level 3:

Put option with ISP

Call option on 1,000

mandatory convertible

bonds

Special payment in

pellet purchase

agreement

Total

Balance as of December 31, 2019

(125)

127

(176)

(174)

Change in fair value/foreign exchange differences

(10)

(68)

(72)

Value of option at exercise date/divested balance

135

—

170

305

Balance as of December 31, 2020

—

Change in fair value/foreign exchange differences

—

(44)

—

(44)

Balance as of December 31, 2021

—

The fair value movement on Level 3 derivative instruments is

recorded in the consolidated statements of operations and other

comprehensive income. The decrease in fair value of the call

option on 1,000 mandatory convertible bonds is due to a

decrease in the share price of China Oriental, which impacts the

Consolidated financial statements 300

(millions of U.S. dollar, except share and per share data)

value of the notes in which Hera Ermac, a wholly-owned

subsidiary, invested the bonds proceeds (see note 11.2).

6.1.6 Other non-derivative financial assets and liabilities

Other non-derivative financial assets and liabilities include cash

and cash equivalents, restricted cash and other restricted funds

(see note 6.1.3), certain trade and certain other receivables (see

note 4.3, 4.5 and 4.6), investments in equity instruments at

FVOCI (see note 2.5), trade payables and certain other liabilities

(see notes 4.7 and 4.8). These instruments are recognized

initially at fair value when the Company becomes a party to the

contractual provisions of the instrument. Non-derivative financial

assets are derecognized if the Company’s contractual rights to

the cash flows from the financial instruments expire or if the

Company transfers the financial instruments to another party

without retaining control of substantially all risks and rewards of

the instruments. Non-derivative financial liabilities are

derecognized when they are extinguished (i.e. when the

obligation specified in the contract is discharged, canceled or

expired).

Impairment of financial assets

In relation to the impairment of financial assets, IFRS 9 requires

an expected credit loss ("ECL") model. The ECL model requires

the Group to account for expected credit losses and changes in

those ECL at each reporting date to reflect changes in credit risk

since initial recognition of the financial assets. In particular,

IFRS 9 requires the Company to measure the loss allowance for

a financial instrument at an amount equal to the lifetime ECL if

the credit risk on that financial instrument has increased

significantly since initial recognition. ArcelorMittal considered the

continued impact of the COVID-19 pandemic on the economic

environment in its risk of default assessment for receivables

outstanding less than 180 days. Receivables aged 31 days or

older and uninsured trade receivables remain consistent with

historical levels and the Company did not identify any expected

increased risk of default (note 4.3).

All fair value movements for investments in equity instruments at

FVOCI, including the difference between the acquisition cost

and the current fair value, are recorded in OCI and are not

reclassified to the consolidated statements of operations.

Investments in equity instruments at FVOCI are exempt from the

impairment test under IFRS 9 because the fair value of the

investment is recorded in OCI and not recycled to profit and

loss.

Financial assets are tested for ECLs annually or whenever

changes in circumstances indicate that there is a change in

credit risk. Any ECL is recognized in the consolidated

statements of operations. An ECL related to financial assets is

reversed if and to the extent there has been a change in the

factors used to determine the recoverable amount. The loss is

reversed only to the extent that the asset’s carrying amount

does not exceed the carrying amount that would have been

determined if no ECL had been recognized. Reversals of ECLs

are recognized in net income, except for investments in equity

instruments at FVOCI, in which all fair value movements are

recognized in OCI.

6.2 Financing costs - net

Financing costs - net recognized in the years ended

December 31, 2021, 2020 and 2019 are as follows:

Year ended December 31,

2021

2020

2019

Interest expense

(357)

(477)

(695)

Interest income

Change in fair value

adjustment on call option on

mandatory convertible bonds

and pellet purchase

agreement (note 6.1.5)2

(44)

(143)

(320)

Accretion of defined benefit

obligations and other long term

liabilities

(164)

(325)

(405)

Net foreign exchange result

(155)

107

Other1

(514)

(474)

(324)

Total

(1,155)

(1,256)

(1,652)

1.Other mainly includes expenses related to true sale of receivables (“TSR”)

programs and bank fees. In 2021, other also include 163 charges relating to

an unfavorable court decision in an arbitration case against Sitrel (see note

9.3), 130 premiums and fees relating to the bonds early redeemed in 2021 (as

compared to 120 and 71 in 2020 and 2019, respectively) and 61 charges

relating to the early redemption of MCNs (see note 11.2). In 2020, other also

includes 178 relating to renewal of mandatorily convertible bonds (see note

11.2).

2. The instrument related to the pellet purchase agreement was derecognized on

December 9, 2020 see note 6.1.5.

6.3 Risk management policy

The Company's operations expose it to a variety of financial

risks: interest rate risk, foreign exchange risk, liquidity risk and

risks in fluctuations in prices of raw materials, freight, energy

and CO2 emissions. The Company actively monitors and seeks

to reduce volatility of these exposures through a diversity of

financial instruments, where considered appropriate. The

Company has formalized how it manages these risks within the

Treasury and Financial Risk Management Policy, which has

been approved by Management.

Capital management

The Company's objective when managing capital is to

safeguard continuity, maintain a strong credit rating and healthy

capital ratios to support its business and provide adequate

return to shareholders through continuing growth.

The Company sets the amount of capital required on the basis

of annual business and long-term operating plans which include

capital and other strategic investments. The funding requirement

301 Consolidated financial statements

is met through a combination of equity, bonds and other long-

term and short-term borrowings.

The Company monitors capital using a gearing ratio, being the

ratio of net debt as a percentage of total equity.

December 31,

2021

2020

Total equity

51,344

40,237

Net debt (including nil and 21 cash and debt

classified as held for sale as of December

31, 2021 and 2020 respectively)

4,030

6,380

Gearing

7.8%

15.9%

Interest rate risk

The Company is exposed to interest rate risk on short-term and

long-term floating rate instruments and on refinancing of fixed

rate debt. The Company's policy is to maintain a balance of

fixed and floating interest rate borrowings, which is adjusted

depending on the prevailing market interest rates and outlook.

As at December 31, 2021, the long-term debt was comprised of

93% fixed rate debt and 7% variable rate debt (note 6.1.2). The

Company utilizes certain instruments to manage interest rate

risks. Interest rate instruments allow the Company to borrow

long-term at fixed or variable rates, and to swap the rate of this

debt either at inception or during the lifetime of the borrowing.

The Company and its counterparties exchange, at predefined

intervals, the difference between the agreed fixed rate and the

variable rate, calculated on the basis of the notional amount of

the swap. Similarly, swaps may be used for the exchange of

variable rates against other variable rates.

Foreign exchange rate risk

The Company is exposed to changes in values arising from

foreign exchange rate fluctuations generated by its operating

activities. Because a substantial portion of ArcelorMittal’s

assets, liabilities, sales and earnings are denominated in

currencies other than the U.S. dollar (its reporting currency),

ArcelorMittal has an exposure to fluctuations and depreciation in

the values of these currencies relative to the U.S. dollar. These

currency fluctuations, especially the fluctuation of the value of

the U.S. dollar relative to the euro, the Canadian dollar, Brazilian

real, Polish Zloty, Kazakhstani tenge, South African rand,

Mexican peso and Ukrainian hryvnia, as well as fluctuations in

the other countries’ currencies in which ArcelorMittal has

significant operations and/or sales, could have a material impact

on its financial position, cash flows and results of operations.

ArcelorMittal faces transaction risk, where its businesses

generate sales in one currency but incur costs relating to that

revenue in a different currency. For example, ArcelorMittal’s

subsidiaries may purchase raw materials, including iron ore and

coking coal, in U.S. dollar, but may sell finished steel products in

other currencies. Consequently, an appreciation of the U.S.

dollar will increase the cost of raw materials; thereby having a

negative impact on the Company’s operating margins, unless

the Company is able to pass along the higher cost in the form of

higher selling prices.

Following its Treasury and Financial Risk Management Policy,

the Company hedges a portion of its net exposure to foreign

exchange rates through forwards, options and swaps.

ArcelorMittal also faces foreign currency translation risk, which

arises when ArcelorMittal translates the statements of

operations of its subsidiaries, its corporate net debt (note 6.1.4)

and other items denominated in currencies other than the U.S.

dollar, for inclusion in the consolidated financial statements. The

Company manages translation risk arising from its investments

in subsidiaries by monitoring the currency mix of the

consolidated statements of financial position. The Company

may enter into derivative transactions to hedge the residual

exposure (see “Net investment hedge”).

The Company also uses derivative instruments at the corporate

level to hedge debt recorded in foreign currency other than the

functional currency or the balance sheet risk associated with

certain monetary assets denominated in a foreign currency

other than the functional currency.

Foreign currency sensitivity analysis

As of December 31, 2021, the Company is mainly subject to

foreign exchange exposure relating to the euro, Brazilian real,

Canadian dollar, Kazakhstani tenge, South African rand,

Mexican peso, Polish zloty, Argentine peso and Ukranian

hryvnia against the U.S. dollar resulting from its trade payables

and receivables.

December 31, 2021

Trade

receivables

Trade payables

USD

1,386

5,579

EUR

1,822

6,219

BRL

778

633

CAD

132

464

KZT

ZAR

137

356

MXN

UAH

302

PLN

305

955

ARS

Other

328

409

Total

5,143

15,093

The sensitivity analysis carried out by the Company considers

the effects on its trade receivables and trade payables of a 10%

Consolidated financial statements 302

(millions of U.S. dollar, except share and per share data)

increase or decrease between the relevant foreign currencies

and the U.S. dollar.

10% increase

10% decrease

Trade

receivables

Trade

payables

Trade

receivables

Trade

payables

EUR

182

622

(182)

(622)

BRL

(78)

(63)

CAD

(13)

(46)

KZT

(8)

(5)

ZAR

(14)

(36)

MXN

(1)

(5)

UAH

(9)

(30)

PLN

(31)

(96)

ARS

(8)

The use of a 10% sensitivity rate is used when reporting foreign

currency exposure internally to key management personnel and

represents management’s assessment of the reasonably

possible change in foreign exchange rates. The sensitivity

analysis includes trade receivables and trade payables

denominated in a currency other than the U.S. dollar and

adjusts their translation at the period end for a 10% change in

foreign currency rates. For trade receivables, a positive number

indicates an income and a negative number an expense. For

trade payables, a positive number indicates an expense and a

negative number an income.

Hedge accounting policy

The Company determines the economic relationship between

the hedged item and the hedging instrument by analyzing the

critical terms of the hedge relationship. In case critical terms do

not match and fair value changes in the hedging instrument

cannot be expected to perfectly offset changes in the fair value

of the hedged item, further qualitative analysis may be

performed. Such analysis serves to establish whether the

economic relationship is sufficiently strong to comply with the

Company’s risk management policies.

The hedge ratio is set out in the Company's risk management

strategy and may be individually tailored for each hedging

program in the risk management objective. Hedge ratios below

100% would usually be applied on hedging of forecast

exposures with the hedge ratio typically reducing where there is

uncertainty due to long hedging tenors or volatility in the

underlying exposure.

The most frequent sources of hedge ineffectiveness relate to

changes in the hedged item (such as maturity, volume and

pricing indices), basis spread and significant changes in the

credit risk. Such sources are analyzed at hedge initiation and

monitored throughout the life of a hedge.

Liquidity Risk

Liquidity risk is the risk that the Company may encounter

difficulties in meeting its obligations associated with financial

liabilities that are settled by delivering cash. ArcelorMittal

Treasury is responsible for the Company's funding and liquidity

management. ArcelorMittal’s principal sources of liquidity are

cash generated from its operations, its credit lines at the

corporate level and various working capital credit lines at the

level of its operating subsidiaries. The Company actively

manages its liquidity. Following the Company's Treasury and

Financial Risk Management Policy, the levels of cash, credit

lines and debt are closely monitored and appropriate actions are

taken in order to comply with the covenant ratios, leverage,

fixed/floating ratios, maturity profile and currency mix.

The contractual maturities of the below financial liabilities

include estimated loan repayments, interest payments and

settlement of derivatives, excluding any impact of netting

agreements. The cash flows are calculated based on market

data as of December 31, 2021, and as such are sensitive to

movements in mainly foreign exchange rates and interest rates.

The cash flows are non-discounted, except for derivative

financial liabilities where the cash flows equal their fair values.

303 Consolidated financial statements

December 31, 2021

Carrying

amount

Contractual

Cash Flow

2022

2023

from 2024 to

2026

After 2026

Non-derivative financial liabilities

Bonds

(5,816)

(7,722)

(748)

(1,442)

(2,733)

(2,799)

Loans over 100

(735)

(1,030)

(373)

(88)

(196)

(373)

Trade and other payables

(15,093)

(15,098)

—

Other loans and leases

(1,850)

(2,104)

(1,027)

(225)

(375)

(477)

Total

(23,494)

(25,954)

(17,246)

(1,755)

(3,304)

(3,649)

Derivative financial liabilities

Foreign exchange contracts

(67)

(44)

(18)

(5)

Commodity contracts1

(307)

(270)

(18)

(13)

(6)

Total

(374)

(314)

(36)

(18)

(6)

1.Commodity contracts include base metals, freight, energy and emission rights.

December 31, 2020

Carrying

amount

Contractual

Cash Flow

2021

2022

from 2023

to 2025

After 2025

Non-derivative financial liabilities

Bonds

(7,888)

(10,307)

(616)

(851)

(5,135)

(3,705)

Loans over 100

(1,998)

(2,345)

(769)

(190)

(998)

(388)

Trade and other payables

(11,525)

(11,530)

—

Other loans and leases

(2,436)

(2,692)

(1,448)

(211)

(546)

(487)

Total

(23,847)

(26,874)

(14,363)

(1,252)

(6,679)

(4,580)

Derivative financial liabilities

Foreign exchange contracts

(170)

(149)

(13)

(8)

—

Commodity contracts1

(134)

(59)

(28)

(47)

—

Total

(304)

(208)

(41)

(55)

—

1.Commodity contracts include base metals, freight, energy and emission rights.

Cash flow hedges

The following tables present the periods in which the derivatives designated as cash flows hedges are expected to mature:

December 31, 2021

Assets/

(liabilities)

(Outflows)/inflows

Fair value

3 months and

less

3-6 months

6-12 months

2023

After 2023

Foreign exchange contracts

(1)

(2)

Commodities

378

132

133

Emission rights

2,447

—

2,447

—

Total

2,829

2,506

131

Consolidated financial statements 304

(millions of U.S. dollar, except share and per share data)

December 31, 2020

Assets/

(liabilities)

(Outflows)/inflows

Fair value

3 months and

less

3-6 months

6-12 months

2022

After 2022

Foreign exchange contracts

(37)

(29)

(31)

(21)

Commodities

(35)

—

(9)

(33)

Emission rights

405

—

129

187

—

Total

333

(30)

114

180

Associated gains or losses that were recognized in other comprehensive income are reclassified to the consolidated statements of

operations in the same period during which the hedged forecasted cash flow affects the consolidated statements of operations. The

following table presents the periods in which the realized and unrealized gains or losses on derivatives designated as cash flows

hedges recognized in other comprehensive income, net of tax, are expected to impact the consolidated statements of operations:

December 31, 2021

Cash flow hedge

reserve1

(Expense)/income

Carrying amount

3 months and

less

3-6 months

6-12 months

2023

After 2023

Foreign exchange contracts

(1)

(4)

(1)

Commodity contracts

302

110

101

Emission rights

1,786

1,660

Total

2,087

165

1,760

1.The cash flow hedge reserve balance as of December 31, 2021 includes 603 deferred gains for the Company's share of such reserves at its equity method investments,

which are not included in the table above (30 as of December 31, 2020).

December 31, 2020

Cash flow hedge

reserve1

(Expense)/income

Carrying amount

3 months and

less

3-6 months

6-12 months

2022

After 2022

Foreign exchange contracts

(13)

(23)

Commodity contracts

(2)

(18)

Emission rights

214

Total

199

1.The cash flow hedge reserve balance as of December 31, 2020 also includes 30 deferred gains for the Company's share of such reserves at its equity method

investments, which are not included in the table above (nil as of December 31, 2019).

305 Consolidated financial statements

The following tables summarize the effect of hedge accounting on ArcelorMittal’s consolidated statement of financial position, statement

of comprehensive income and statement of changes in equity.

December 31, 2021

Hedging Instruments

Nominal amount of

the hedging

instrument

Assets

carrying

amount

Liabilities

carrying

amount

Line item in the statement of financial

position where the hedging instrument

is located

Cash flow hedges

Foreign exchange risk - Option/forward/swap

contracts

185

(2)

Prepaid expenses and other current

assets/Accrued expenses and other

liabilities

Foreign exchange risk - Option/forward/swap

contracts

120

(5)

Other assets/Other long-term

obligations

Price risk - Commodities forwards

872

325

(212)

Prepaid expenses and other current

assets/Accrued expenses and other

liabilities

Price risk - Commodities forwards

1,321

299

(34)

Other assets/Other long-term

obligations

Price risk - Emission rights forwards

1,555

2,447

—

Prepaid expenses and other current

assets/Accrued expenses and other

liabilities

Total

3,082

(253)

Current derivative assets classified as cash flow

hedge

2,781

Other current derivative assets

204

Total current derivative assets (note 4.5)

2,985

Non-current derivative assets classified as cash flow

hedge

301

Other non-current derivative assets

Total non-current derivative assets (note 4.6)

318

Current derivative liabilities classified as cash flow

hedge

(214)

Other current derivative liabilities

(102)

Total current derivative liabilities (note 4.8)

(316)

Non-current derivative liabilities classified as cash

flow hedge

(39)

Other non-current derivative liabilities

(19)

Total non-current derivative liabilities (note 9.2)

(58)

December 31, 2021

Hedging Instruments

Cash flow

hedge

reserve at

December 31,

2020

Hedging

gains or

losses of the

reporting

period that

were

recognized in

OCI

Gains or

losses

reclassification

adjustment

and hedge

ineffectiveness

Basis

adjustment

Line item in the

statement of

comprehensive

income that

includes the

reclassification

adjustment and

hedge

ineffectiveness

Cash flow

hedge

reserve1 at

December 31,

2021

Cash flow hedges

Foreign exchange risk - Option/Forward contracts

(13)

(77)

Sales

(1)

Price risk - Commodities Option/Forward contracts

(2)

398

(55)

(39)

Sales, Cost of

sales

302

Price risk - Emission rights forwards

214

1,700

(128)

—

Cost of sales

1,786

Total

199

2,179

(175)

(116)

2,087

1.The cash flow hedge reserve balance as of December 31, 2021 also includes 603 deferred gains for the Company's share of such reserves at its equity method

investments, which are not disclosed above.

Consolidated financial statements 306

(millions of U.S. dollar, except share and per share data)

December 31, 2020

Hedging Instruments

Nominal amount of

the hedging

instrument

Assets carrying

amount

Liabilities

carrying

amount

Line item in the statement of financial position where

the hedging instrument is located

Cash flow hedges

Foreign exchange risk - Option/

Forward contracts

2,379

(84)

Prepaid expenses and other current assets/Accrued

expenses and other liabilities

Foreign exchange risk - Option/

Forward/Swap contracts

440

—

Other assets/Other long-term obligations

Price risk - Commodities forwards

459

(14)

Prepaid expenses and other current assets/Accrued

expenses and other liabilities

Price risk - Commodities forwards

971

(75)

Other assets/Other long-term obligations

Price risk - Emission rights

forwards

686

218

—

Prepaid expenses and other current assets/Accrued

expenses and other liabilities

Price risk - Emission rights

forwards

348

187

—

Other assets/Other long-term obligations

Total

506

(173)

Current derivative assets classified

as cash flow hedge

243

Other current derivative assets

110

Total current derivative assets

(note 4.5)

353

Non-current derivative assets

classified as cash flow hedge

263

Other non-current derivative assets

Total non-current derivative assets

(note 4.6)

324

Current derivative liabilities

classified as cash flow hedge

(98)

Other current derivative liabilities

(110)

Total current derivative liabilities

(note 4.8)

(208)

Non-current derivative liabilities

classified as cash flow hedge

(75)

Other non-current derivative

liabilities

(21)

Total non-current derivative

liabilities (note 9.2)

(96)

December 31, 2020

Hedging Instruments

Cash flow hedge

reserve at

December 31,

2019

Hedging

gains or

losses of the

reporting

period that

were

recognized in

OCI

Gains or losses

reclassification

adjustment and

hedge

ineffectiveness

Basis

adjustment

Line item in the

statement of

comprehensive

income that

includes the

reclassification

adjustment and

hedge

ineffectiveness

Cash flow hedge

reserve1 at

December 31,

2020

Cash flow hedges

Foreign exchange risk - Option/

Forward contracts

(96)

Sales

(13)

Price risk - Commodities forwards1

(106)

(140)

241

Sales, Cost of

sales

(2)

Price risk - Emission rights forwards

310

271

(367)

—

Cost of sales

214

Total

235

(91)

199

1.The cash flow hedge reserve balance as of December 31, 2020 also includes 30 deferred gains for the Company's share of such reserves at its equity method

investments, which are not disclosed above

307 Consolidated financial statements

Net investment hedge

As of April 1, 2018, the Company designated a portfolio of euro

denominated debt (€3,709 million as of December 31, 2021) as

a hedge of certain euro denominated investments (€8,261

million as of December 31, 2021) in order to mitigate the foreign

currency risk arising from certain euro denominated subsidiaries

net assets. The risk arises from the fluctuation of the euro/U.S

dollar spot rate, which causes the amount of the net investments

to vary. The euro denominated debt is designated as a hedging

instrument for the change in the value of the net investments

that is attributable to changes in the euro/U.S. dollar spot rate.

As of December 31, 2021, the Company recognized 423 foreign

exchange gain (597 foreign exchange loss as of December 31,

2020) arising on the translation of the euro denominated debt

designated as a hedge of the euro denominated net investments

in foreign operations in other comprehensive income within the

foreign exchange translation reserve. The hedging instrument is

categorized as Level 2.

Since 2014, the Company has periodically hedged a part of its

euro denominated net investments via euro/U.S. dollar cross

currency swaps ("CCS"). These CCS, all of which have been

unwound, were designated as net investment hedges.

The following tables summarizes the historical gain/loss that will

be recycled to the consolidation statements of operations when

the hedged assets are disposed of.

December 31, 2021

Date traded

Date maturity /unwound

Notional

OCI gross

Deferred tax

OCI net of deferred

tax

December, 2014

January, 2016

375

(24)

May, 2015

March, 2020

500

(3)

May, 2015

July, 2019

500

(16)

(11)

March, 2018

June, 2018

100

(2)

April, 2019

November, 2019

200

(3)

Total

(27)

1.In 2021, the Company did not designate any new CCS as net investment hedge.

2. On March 25, 2020 and March 26, 2020, the Company unwound euro/U.S. dollar CCS with a notional of 300 and 200, respectively, which were entered into on May 27,

2015 and designated as a net investment hedge of a euro denominated net investment in foreign operations amounting to €459. A deferred gain of 8, net of tax, was

recorded in other comprehensive income and it will be recycled to the consolidation statements of operations when the hedged assets are disposed of.

December 31, 2021

Hedging Instruments

Nominal

amount of

the hedging

instrument

Assets

carrying

amount

Liabilities

carrying

amount

Line item in the

statement of

financial position

where the

hedging

instrument is

located

Change in

value used for

calculating

hedge

ineffectiveness

for 2021

Line item in the

statement of

comprehensive

income that

includes the

recognized hedge

ineffectiveness

Foreign

currency

translation

reserve

Net investment hedges

Foreign exchange risk -

Cross Currency Swap

—

N/a

—

N/a

Foreign exchange risk -

EUR debt

4,204

—

(4,201)

Short-term debt

and current

portion of long-

term debt; long-

term debt, net of

current portion

—

N/a

308

Total

4,204

—

(4,201)

—

378

Consolidated financial statements 308

(millions of U.S. dollar, except share and per share data)

December 31, 2020

Hedging Instruments

Nominal

amount of

the hedging

instrument

Assets

carrying

amount

Liabilities

carrying

amount

Line item in the

statement of

financial position

where the hedging

instrument is

located

Change in

value used for

calculating

hedge

ineffectiveness

for 2020

Line item in the

statement of

comprehensive

income that includes

the recognized

hedge

ineffectiveness

Foreign

currency

translation

reserve

Net investment hedges

Foreign exchange risk -

Cross Currency Swap

—

N/a

—

N/a

Foreign exchange risk - EUR

debt

6,335

—

(6,327)

Short-term debt

and current portion

of long-term debt;

long-term debt, net

of current portion

—

N/a

(10)

Total

6,335

—

(6,327)

—

Raw materials, freight, energy risks and emission rights

The Company is exposed to risks in fluctuations in prices of raw materials (including base metals such as zinc, nickel, aluminum, tin,

copper and iron ore), freight and energy, both through the purchase of raw materials and through sales contracts. The Company uses

financial instruments such as forward purchases or sales, options and swaps in order to manage the volatility of prices of certain raw

materials, freight and energy.

Fair values of raw material, freight, energy and emission rights instruments categorized as Level 2 are as follows:

December 31,

2021

2020

Base metals

Freight

—

Energy (oil, gas, electricity)

350

(36)

Emission rights

2,443

407

Total

2,825

378

Derivative assets associated with raw materials, energy, freight and emission rights

3,132

512

Derivative liabilities associated with raw materials, energy, freight and emission rights

(307)

(134)

Total

2,825

378

ArcelorMittal consumes large amounts of raw materials (the

prices of which are related to the London Metals Exchange price

index, the Steel Index and Platts Index), ocean freight (the price

of which is related to a Baltic Exchange Index), and energy (the

prices of which are mainly related to the New York Mercantile

Exchange energy index (NYMEX) and the European Energy

Exchange (EEX) power indexes). As a general matter,

ArcelorMittal is exposed to price volatility with respect to its

purchases in the spot market and under its long-term supply

contracts. In accordance with its risk management policy,

ArcelorMittal hedges a part of its exposure related to raw

materials procurements.

Emission rights

Pursuant to the application of the European Directive 2003/87/

EC of October 13, 2003, as amended by the European Directive

2009/29/EC of April 23, 2009, establishing a scheme for

emission allowance trading, the Company enters into certain

types of derivatives (mainly forward transactions and options) in

order to implement its management policy for associated risks.

As of December 31, 2021 and 2020, the Company had a net

notional position of 1,555 with a net positive fair value of

2,443 and a net notional position of 1,035 with a net positive fair

value of 407, respectively.

Credit risk

The Company’s treasury department monitors various market

data regarding the credit standings and overall reliability of the

financial institutions for all countries where the Company’s

subsidiaries operate. The choice of the financial institution for

the financial transactions must be approved by the treasury

department. Credit risk related to customers, customer credit

terms and receivables are discussed in note 4.3.

309 Consolidated financial statements

Sensitivity analysis

Foreign currency sensitivity

The following tables detail the Company’s derivative financial

instruments' sensitivity to a 10% strengthening and a 10%

weakening in the U.S. dollar against the euro. A positive number

indicates an increase in profit or loss and other equity, where a

negative number indicates a decrease in profit or loss and other

equity.

The sensitivity analysis includes the Company’s complete

portfolio of foreign currency derivatives outstanding. The impact

on the non euro derivatives reflects the estimated move of such

currency pairs, when the U.S. dollar appreciates or depreciates

10% against the euro, based on computations of correlations in

the foreign exchange markets in 2021 and 2020.

December 31, 2021

Income

(loss)

Other Equity

10% strengthening in U.S. dollar

(10)

10% weakening in U.S. dollar

(30)

December 31, 2020

(loss)

Income

Other Equity

10% strengthening in U.S. dollar

(60)

196

10% weakening in U.S. dollar

(202)

Cash flow sensitivity analysis for variable rate instruments

The following tables detail the Company’s variable interest rate

instruments’ sensitivity. A change of 100 basis points (“bp”) in

interest rates during the period would have increased

(decreased) profit or loss by the amounts presented below. This

analysis assumes that all other variables, in particular foreign

currency rates, remain constant.

December 31, 2021

Floating porting of

net debt1

Interest Rate Swaps/

Forward Rate Agreements

100 bp increase

—

100 bp decrease

(36)

—

December 31, 2020

Floating porting of

net debt1

Interest Rate Swaps/

Forward

Rate Agreements

100 bp increase

—

100 bp decrease

(40)

—

1.See note 6.1.4 for a description of net debt (including fixed and floating

portion).

Base metals, energy, freight, emissions rights

The following tables detail the Company’s sensitivity to a 10%

increase and decrease in the price of the relevant base metals,

energy, freight and emissions rights. The sensitivity analysis

includes only outstanding, un-matured derivative instruments

either held for trading at fair value through the consolidated

statements of operations or designated in hedge accounting

relationships.

December 31, 2021

Income (loss)

Other Equity Cash Flow

Hedging Reserves

'+10% in prices

Base Metals

Iron Ore

—

Freight

—

Emission rights

—

401

Energy

165

'-10% in prices

Base Metals

(2)

(33)

Iron Ore

—

(1)

Freight

—

Emission rights

—

(401)

Energy

(1)

(165)

December 31, 2020

Income (loss)

Other Equity Cash Flow

Hedging Reserves

'+10% in prices

Base Metals

Iron Ore

—

(1)

Freight

—

Emission rights

—

145

Energy

—

'-10% in prices

Base Metals

(2)

(10)

Iron Ore

—

Freight

—

(3)

Emission rights

—

(145)

Energy

—

(82)

NOTE 7: LEASES

As a lessee, the Company assesses if a contract is or contains

a lease at inception of the contract. A contract is or contains a

lease if the contract conveys the right to control the use of an

identified asset for a period of time in exchange for

consideration.

The Company recognizes a right-of-use asset and a lease

liability at the commencement date, except for short-term leases

Consolidated financial statements 310

(millions of U.S. dollar, except share and per share data)

of twelve months or less and leases for which the underlying

asset is of low value, which are expensed in the consolidated

statement of operations on a straight-line basis over the lease

term.

The lease liability is initially measured at the present value of the

lease payments that are not paid at the commencement date,

discounted using the interest rate implicit in the lease, or, if not

readily determinable, the incremental borrowing rate specific to

the country, term and currency of the contract. Lease payments

can include fixed payments, variable payments that depend on

an index or rate known at the commencement date, as well as

any extension or purchase options, if the Company is

reasonably certain to exercise these options. The lease liability

is subsequently measured at amortized cost using the effective

interest method and remeasured with a corresponding

adjustment to the related right-of-use asset when there is a

change in future lease payments in case of renegotiation,

changes of an index or rate or in case of reassessments of

options.

The right-of-use asset comprises, at inception, the initial lease

liability, any initial direct costs and, when applicable, the

obligations to refurbish the asset, less any incentives granted by

the lessors. The right-of-use asset is subsequently depreciated,

on a straight-line basis, over the lease term or, if the lease

transfers the ownership of the underlying asset to the Company

at the end of the lease term or, if the cost of the right-of-use

asset reflects that the lessee will exercise a purchase option,

over the estimated useful life of the underlying asset. Right-of-

use assets are also subject to testing for impairment if there is

an indicator that they may be impaired.

Variable lease payments not included in the measurement of the

lease liabilities are expensed to the consolidated statement of

operations in the period in which the events or conditions which

trigger those payments occur.

In the statement of financial position, right-of-use assets and

lease liabilities are classified, respectively, as part of property,

plant and equipment and short-term/long-term debt.

Balances for the Company’s lease activities are summarized as follows:

As at December

31, 2021

As at December

31, 2020

Lease liabilities

880

815

Right of-use assets:

Land, buildings and improvements

729

761

Machinery, equipment and others

343

278

Total right-of-use assets

1,072

1,039

Year ended

December 31,

2021

Year ended

December 31,

2020

Depreciation and impairment charges:

Land, buildings and improvements

120

114

Machinery, equipment and others

101

Total depreciation and impairment charges

190

215

Other lease related expenses:

Interest expense on lease liabilities

Expenses of short-term leases

134

Expenses of leases of low-value assets

Expenses related to variable lease payments not included in the measurement of lease liabilities

Additions to right-of-use assets

313

233

Lease payments recorded as reduction of lease liabilities and cash outflow from financing activities

199

242

The Company's lease contracts relate to a variety of assets used in its operational and administrative activities through several units,

such as land, buildings, vehicles, industrial machinery, logistic and commercial facilities and power generation facilities. There are no

sale and lease back transactions and no restrictions or covenants are imposed by the Company's current effective lease contracts.

311 Consolidated financial statements

The maturity analysis of the lease liabilities as of December 31, 2021 and December 31, 2020, is as follows:

December 31, 2021

1 year or less

2-3 years

4-5 years

Greater than 5 years

TOTAL

Lease liabilities (undiscounted)

222

254

152

836

1,464

December 31, 2020

1 year or less

2-3 years

4-5 years

Greater than 5 years

TOTAL

Lease liabilities (undiscounted)

217

265

156

778

1,416

Expenses for variable lease payments relate to rental fees that vary based on the actual level of activities or performance of the

underlying leased assets such as a percentage of sales of the Company's goods through certain leased commercial warehouses and

fixed rental fees per actual unit of output produced or transported by the leased assets.

An estimation of the future cash outflows to which the Company is potentially exposed in relation to those contracts involving variable

lease payments, which are not reflected in the measurement of lease liabilities as of December 31, 2021 and December 31, 2020, is as

follows:

December 31, 2021

1 year or less

2-3 years

4-5 years

Greater than 5 years

TOTAL

Potential variable lease

payments

140

119

422

December 31, 2020

1 year or less

2-3 years

4-5 years

Greater than 5 years

TOTAL

Potential variable lease

payments

123

348

Also, some of the Company's lease contracts have extension and/or termination options as well as residual value guarantees whose

amounts are not reflected in the measurement of the lease liabilities as of December 31, 2021 and December 31, 2020. The potential

addition/(reduction) in future cash outflows to which the Company is exposed in case such options are exercised or the guarantees

required are as shown in the table below:

December 31, 2021

1 year or less

2-3 years

4-5 years

Greater than 5 years

TOTAL

Potential extension options

—

Potential termination options

—

(1)

—

(1)

Potential residual value guarantees

—

December 31, 2020

1 year or less

2-3 years

4-5 years

Greater than 5 years

TOTAL

Potential extension options

—

Potential termination options

(1)

—

(1)

Potential residual value guarantees

Undiscounted amounts related to lease contracts not yet commenced and therefore not included in the recognized lease liabilities as of

December 31, 2021 and December 31, 2020, to which the Company is committed are described below:

Consolidated financial statements 312

(millions of U.S. dollar, except share and per share data)

December 31, 2021

1 year or less

2-3 years

4-5 years

Greater than 5 years

TOTAL

Leases not yet commenced

December 31, 2020

1 year or less

2-3 years

4-5 years

Greater than 5 years

TOTAL

Leases not yet commenced

There were neither income from subleasing right-of-use assets

nor gains or losses from sales and leaseback for the years

ended December 31, 2021 and December 31, 2020.

NOTE 8: PERSONNEL EXPENSES AND DEFERRED

EMPLOYEE BENEFITS

8.1 Employees and key management personnel

As of December 31, 2021, 2020 and 2019, ArcelorMittal had

approximately 158,000, 168,000 and 191,000 employees,

respectively, and the total annual compensation of

ArcelorMittal’s employees in 2021, 2020 and 2019 was as

follows:

Year ended December 31,

Employee Information

2021

2020

2019

Wages and salaries

6,707

7,681

8,380

Defined benefits cost (see

note 8.2)

117

260

201

Other staff expenses

1,166

1,405

1,668

Total

7,990

9,346

10,249

The total annual compensation of ArcelorMittal’s key

management personnel, including its Board of Directors,

expensed in 2021, 2020 and 2019 was as follows:

Year ended December 31,

2021

2020

2019

Base salary and directors fees

Short-term performance-

related bonus

Post-employment benefits

Share-based payments

—

The fair value of the shares allocated based on Restricted Share

Unit (“RSU”) and Preference Share Unit (“PSU”) plans to

ArcelorMittal’s key management personnel was recorded as an

expense in the consolidated statements of operations over the

relevant vesting periods.

As of December 31, 2021, 2020 and 2019, ArcelorMittal did not

have any outstanding loans or advances to members of its

Board of Directors or key management personnel, and, as of

December 31, 2021, 2020 and 2019, ArcelorMittal had not given

any guarantees for the benefit of any member of its Board of

Directors or key management personnel.

8.2 Deferred employee benefits

ArcelorMittal’s operating subsidiaries sponsor different types of

pension plans for their employees. Also, some of the operating

subsidiaries offer other post-employment benefits, that are

principally post-retirement healthcare plans. These benefits are

broken down into defined contribution plans and defined benefit

plans.

Defined contribution plans are those plans where ArcelorMittal

pays fixed or determinable contributions to external life

insurance or other funds for certain categories of employees.

Contributions are paid in return for services rendered by the

employees during the period. Contributions are expensed as

incurred consistent with the recognition of wages and salaries.

Defined benefit plans are those plans that provide guaranteed

benefits to certain categories of employees, either by way of

contractual obligations or through a collective agreement. For

defined benefit plans, the cost of providing benefits is

determined using the projected unit credit method, with actuarial

valuations being carried out each fiscal year.

The retirement benefit obligation recognized in the consolidated

statements of financial position represents the present value of

the defined benefit obligation less the fair value of plan assets.

The present value of the defined benefit obligation is determined

by discounting the estimated future cash outflows using interest

rates of high quality corporate bonds that are denominated in

the currency in which the benefits will be paid, and that have

terms to maturity approximating the terms of the related pension

obligation. Remeasurement arising from experience

adjustments and changes in actuarial assumptions are charged

or credited to other comprehensive income in the period in

which they arise. Any asset resulting from this calculation is

limited to the present value of available refunds and reductions

in future contributions to the plan.

Current service cost, which is the increase of the present value

of the defined benefit obligation resulting from the employee

service in the current period, is recorded as an expense as part

of cost of sales and selling, general and administrative

313 Consolidated financial statements

expenses in the consolidated statements of operations. The net

interest cost, which is the change during the period in the net

defined benefit liability or asset that arises from the passage of

time, is recognized as part of financing costs net in the

consolidated statements of operations.

The Company recognizes gains and losses on the settlement of

a defined benefit plan when the settlement occurs. The gain or

loss on settlement comprises any resulting change in the fair

value of plan assets and any change in the present value of the

defined benefit obligation. Past service cost is the change in the

present value of the defined benefit obligation resulting from a

plan amendment or a curtailment. Past service cost is

recognized immediately in the consolidated statements of

operations in the period in which it arises.

Termination plans are those plans that primarily correspond to

terminating an employee’s contract usually following the

decision of the employee before the normal retirement date.

Liabilities for termination plans are recognized when the affected

employees have formally been informed and when amounts

owed have been determined using an appropriate actuarial

calculation. Liabilities relating to long-term termination plans

(like early retirement plans) are calculated annually on the basis

of the number of employees that have taken or contractually

agreed to take early retirement and are discounted using an

interest rate that corresponds to that of high quality bonds that

have maturity dates similar to the terms of the Company’s early

retirement obligations. Provisions for social plans are recorded

in connection with voluntary separation plans. Voluntary

retirement plans primarily correspond to the practical

implementation of social plans or are linked to collective

agreements signed with certain categories of employees. The

Company recognizes a liability and expense when it can no

longer withdraw the offer or, if earlier, when it has a detailed

formal plan which has been communicated to employees or

their representatives.

Other long-term employee benefits include various plans that

depend on the length of service, such as long service and

sabbatical awards, disability benefits and long-term

compensated absences such as sick leave. The amount

recognized as a liability is the present value of benefit

obligations at the consolidated statements of financial position

date, and all changes in the provision (including actuarial gains

and losses or past service costs) are recognized in the

consolidated statements of operations in the period in which

they arise.

The expense associated with the above pension plans and post-

employment benefits, as well as the carrying amount of the

related liability/asset on the consolidated statements of financial

position are based on a number of assumptions and factors

such as discount rates, expected rate of compensation increase,

healthcare cost trend rates, mortality rates and retirement rates.

•Discount rates – The discount rate is based on several

high quality corporate bond indexes and yield curves in

the appropriate jurisdictions. In countries where there is

no deep market in such bonds, the market rates on

government bonds are used. Nominal interest rates

vary worldwide due to exchange rates and local

inflation rates.

•Rate of compensation increase – The rate of

compensation increase reflects actual experience and

the Company’s long-term outlook, including

contractually agreed wage rate increases for

represented hourly employees.

•Healthcare cost trend rate – The healthcare cost trend

rate is based on historical retiree cost data, near-term

healthcare outlook, including appropriate cost control

measures implemented by the Company, and industry

benchmarks and surveys.

•Mortality and retirement rates – Mortality and

retirement rates are based on actual and projected

plan experience.

Statements of Financial Position

Total deferred employee benefits including pension or other

post-employment benefits, are as follows:

December 31,

2021

2020

Pension plan benefits

2,334

3,000

Other post-employment benefits and other

long-term employee benefits ("OPEB")

1,184

1,432

Termination benefits

191

173

Defined benefit liabilities

3,709

4,605

Provisions for social plans (non-current)

Total

3,772

4,656

This note, including the table above, discloses the following

benefit categories:

•pension plan benefits are pension plans and lump sum

benefits that are classified under post employment

benefits as required by IAS 19 which are not

mandatory by law;

•other post employment and other long-term employee

benefits, also referred to as, OPEB which includes all

other post employment benefits as defined in IAS 19

(e.g. lump sum benefits which are mandatory by law,

medical insurance and life insurance) together with all

Consolidated financial statements 314

(millions of U.S. dollar, except share and per share data)

other long-term employee benefits as defined in IAS

19;

•termination benefits, which relate to provisions for long

term termination benefits as defined in IAS 19 (e.g.

early retirement benefits); and

•provisions for social plans (non-current) which relate to

provisions for social plans in restructuring provisions as

required by IAS 37, including a provision of 55 related

to early retirement scheme in Spain recognized in cost

of sales.

The provisions for termination benefits relate to European

countries (Belgium, Spain, Germany and Luxembourg).

On December 9, 2020, following the sale of ArcelorMittal USA

(see note 2.3.1), the Company derecognized all of

ArcelorMittal's USA pension and OPEB liabilities net of plan

assets in the amount of 3,243. The Company continues to

present below the corresponding changes in pension and OPEB

defined benefit obligation, plan assets and the components of

net periodic pension and OPEB cost in 2020 for the United

States.

Pension plans

This section includes post employment benefits that are pension

plan and lump sum benefits which are not mandatory by law. A

summary of the significant defined benefit pension plans is as

follows:

Canada

The primary pension plans are those of ArcelorMittal Dofasco,

AMMC and ArcelorMittal Long Products Canada.

The ArcelorMittal Dofasco pension plan is a hybrid plan

providing the benefits of both a defined benefit and defined

contribution pension plan. The defined contribution component

is financed by both employer and employee contributions. The

employer’s defined contribution is based on a percentage of

company profits. The defined benefit pension plan was closed

for new hires on December 31, 2010 and replaced by a new

defined contribution pension plan with contributions related to

age, service and earnings.

At the end of 2012, ArcelorMittal Dofasco froze and capped

benefits for the majority of its hourly and salaried employees

who were still accruing service under the defined benefit plan

and began transitioning these employees to the new defined

contribution pension plan for future pension benefits.

The AMMC defined benefit plan provides salary related benefit

for non-union employees and a flat dollar pension depending on

an employee’s length of service for union employees. This plan

was closed for new non-union hires on December 31, 2009 and

replaced by a defined contribution pension plan with

contributions related to age and service. Effective January 1,

2015, AMMC implemented a plan to transition its non-union

employees who were still benefiting under the defined benefit

plan to a defined contribution pension plan. Transition dates can

extend up to January 1, 2025 depending on the age and service

of each member.

ArcelorMittal Long Products Canada sponsors several defined

benefit and defined contribution pension plans for its various

groups of employees, with most defined benefit plans closed to

new entrants several years ago. The primary defined benefit

pension plan sponsored by ArcelorMittal Long Products Canada

provides certain unionized employees with a flat dollar pension

depending on an employee’s length of service.

ArcelorMittal Long Products Canada entered into a six-year

collective labor agreement ("CLA") during the third quarter of

2014 with its Contrecoeur-West union group. The defined

benefit plan was closed to new hires. A new defined contribution

type arrangement was established for new hires. This collective

labor agreement was renewed during the third quarter of 2020

for six years under similar conditions. The six-year labor

agreement ratified in February 2016, covering Contrecoeur East

and Longueuil facilities remains valid until January 31, 2022.

The positive vote of the workers assembly on February 27, 2022

concluded the CLA negotiations for a new six-year CLA ending

the labor dispute which began on February 2, 2022. It ensured a

return to normal operations at the Contrecoeur East and

Longueuil facilities on February 28, 2022.

In 2020, ArcelorMittal Long Products Canada entered into a buy-

in transaction for some of its fully funded pension plans

representing 112 in liabilities.

Brazil

The primary defined benefit plans, financed through trust

funds, have been closed to new entrants. Brazilian entities have

all established defined contribution plans that are financed by

employer and employee contributions. On December 28, 2018,

the Brazilian Autarchy that oversees pension funds called

PREVIC (Complementary Pension National Superintendence)

approved a planned settlement of the major defined benefit

plans. The transaction was completed in 2019 and reduced the

defined benefit obligation by 169 and the fair value of the plan

asset by 143. The settlement gain of 26 was recognized in cost

of sales and selling, general and administrative expenses.

Europe

Certain European operating subsidiaries maintain primarily

unfunded defined benefit pension plans for a certain number of

employees. Benefits are based on such employees’ length of

service and applicable pension table under the terms of

individual agreements. Some of these unfunded plans have

315 Consolidated financial statements

been closed to new entrants and replaced by defined

contribution pension plans for active members financed by

employer and employee contributions.

As from December 2015 new Belgian legislation modifies the

minimum guaranteed rates of return applicable to Belgian

defined contribution plans. For insured plans, the rates of 3.25%

on employer contributions and 3.75% on employee contributions

will continue to apply to the accumulated pre-2016 contributions.

For contributions paid as from January 1, 2016, a new variable

minimum guaranteed rate of return applies. From 2016 through

2021, the minimum guaranteed rate of return was 1.75% and

this is also the best estimate for 2022. Due to the statutory

minimum guaranteed return, Belgian defined contribution plans

do not meet the definition of defined contribution plans under

IFRS. Therefore, the Belgian defined contribution plans are

classified as defined benefit plans.

Others

A very limited number of defined benefit plans are in place in

other countries (such as Mexico, Kazakhstan, Ukraine and

Morocco).

The majority of the funded defined benefit pension plans

described earlier provide benefit payments from trustee-

administered funds. ArcelorMittal also sponsors a number of

unfunded plans where the Company meets the benefit payment

obligation as it falls due. Plan assets held in trusts are legally

separated from the Company and are governed by local

regulations and practice in each country, as is the nature of the

relationship between the Company and the governing bodies

and their composition. In general terms, governing bodies are

required by law to act in the best interest of the plan members

and are responsible for certain tasks related to the plan (e.g.

setting the plan's investment policy).

In case of the funded pension plans, the investment positions

are generally managed within an asset-liability matching ("ALM")

framework that has been developed to achieve long-term

investments that are in line with the obligations of the pension

plans.

A long-term investment strategy has been set for ArcelorMittal’s

major funded pension plans, with its asset allocation comprising

of a mixture of equity securities, fixed income securities, real

estate and other appropriate assets. This recognizes that

different asset classes are likely to produce different long-term

returns and some asset classes may be more volatile than

others. The long-term investment strategy ensures, in particular,

that investments are adequately diversified.

Consolidated financial statements 316

(millions of U.S. dollar, except share and per share data)

The following tables detail the reconciliation of defined benefit obligation (“DBO”), plan assets, irrecoverable surplus and statements of

financial position.

Year ended December 31, 2021

Total

United

States

Canada

Brazil

Europe

Other

Change in benefit obligation

Benefit obligation at beginning of the period

7,604

3,590

517

3,173

285

Current service cost

105

—

Interest cost on DBO

162

Past service cost - Plan amendments

—

Plan participants’ contribution

—

Settlements

(5)

—

(4)

(1)

—

Actuarial (gain) loss

(509)

(4)

(216)

(83)

(173)

(33)

Demographic assumptions

—

(1)

—

Financial assumptions

(364)

(3)

(207)

(103)

(13)

(38)

Experience adjustment

(154)

(1)

(9)

(159)

Benefits paid

(428)

(3)

(219)

(31)

(148)

(27)

Foreign currency exchange rate differences and other movements

(222)

—

(37)

(191)

(3)

Benefit obligation at end of the period

6,739

3,306

398

2,751

250

Change in plan assets

Fair value of plan assets at beginning of the period

4,654

3,167

435

1,007

—

Interest income on plan assets

108

—

Return on plan assets greater (less) than discount rate

(4)

103

(25)

(33)

—

Employer contribution

—

Plan participants’ contribution

—

Settlements

(5)

—

(4)

(1)

—

Benefits paid

(313)

(3)

(218)

(31)

(61)

—

Foreign currency exchange rate differences and other movements

(62)

—

(28)

(44)

—

Fair value of plan assets at end of the period

4,496

3,163

376

918

—

Present value of the wholly or partly funded obligation

(5,222)

(32)

(3,291)

(398)

(1,501)

—

Fair value of plan assets

4,496

3,163

376

918

—

Net present value of the wholly or partly funded obligation

(726)

(128)

(22)

(583)

—

Present value of the unfunded obligation

(1,517)

(2)

(15)

—

(1,250)

(250)

Prepaid due to unrecoverable surpluses

(33)

—

(28)

(2)

(3)

—

Net amount recognized

(2,276)

(171)

(24)

(1,836)

(250)

Net assets related to funded obligations

—

Recognized liabilities

(2,334)

(2)

(218)

(24)

(1,840)

(250)

Change in unrecoverable surplus

Unrecoverable surplus at beginning of the period

(27)

—

(23)

(1)

(3)

—

Interest cost on unrecoverable surplus

(1)

—

(1)

—

Change in unrecoverable surplus in excess of interest

(5)

—

(4)

(1)

—

Unrecoverable surplus at end of the period

(33)

—

(28)

(2)

(3)

—

317 Consolidated financial statements

Year ended December 31, 2020

Total

United

States

Canada

Brazil

Europe

Other

Change in benefit obligation

Benefit obligation at beginning of the period

10,629

3,505

3,360

664

2,830

270

Current service cost

129

—

Interest cost on DBO

279

Past service cost - Plan amendments

—

Past service cost - Curtailments

—

Plan participants’ contribution

—

Actuarial (gain) loss

705

237

250

(3)

185

Demographic assumptions

(32)

—

Financial assumptions

795

286

276

214

Experience adjustment

(58)

(17)

(26)

(8)

(29)

Benefits paid

(693)

(279)

(206)

(32)

(149)

(27)

Divestments (note 2.3.1)

(3,550)

—

Foreign currency exchange rate differences and other movements

—

(148)

209

(29)

Benefit obligation at end of the period

7,604

3,590

517

3,173

285

Change in plan assets

Fair value of plan assets at beginning of the period

7,395

2,881

3,021

576

917

—

Interest income on plan assets

192

—

Return on plan assets greater (less) than discount rate

444

209

188

(12)

—

Employer contribution

—

Plan participants’ contribution

—

Plan amendments

—

Benefits paid

(579)

(276)

(205)

(32)

(66)

—

Divestments (note 2.3.1)

(2,842)

—

Foreign currency exchange rate differences and other movements

(23)

—

(129)

—

Fair value of plan assets at end of the period

4,654

3,167

435

1,007

—

Present value of the wholly or partly funded obligation

(5,831)

(37)

(3,575)

(517)

(1,702)

—

Fair value of plan assets

4,654

3,167

435

1,007

—

Net present value of the wholly or partly funded obligation

(1,177)

(408)

(82)

(695)

—

Present value of the unfunded obligation

(1,773)

(2)

(15)

—

(1,471)

(285)

Prepaid due to unrecoverable surpluses

(27)

—

(23)

(1)

(3)

—

Net amount recognized

(2,977)

(446)

(83)

(2,169)

(285)

Net assets related to funded obligations

—

Recognized liabilities

(3,000)

(2)

(457)

(83)

(2,173)

(285)

Change in unrecoverable surplus

Unrecoverable surplus at beginning of the period

(30)

—

(25)

(2)

(3)

—

Interest cost on unrecoverable surplus

(1)

—

(1)

—

Change in unrecoverable surplus in excess of interest

—

Unrecoverable surplus at end of the period

(27)

—

(23)

(1)

(3)

—

Consolidated financial statements 318

(millions of U.S. dollar, except share and per share data)

The following tables detail the components of net periodic pension cost:

Year ended December 31, 2021

Net periodic pension cost (income)

Total

United States

Canada

Brazil

Europe

Others

Current service cost

105

—

Past service cost - Plan amendments

—

Net interest cost (income) on net DB liability (asset)

—

Total

191

Year ended December 31, 2020

Net periodic pension cost (income)

Total

United States

Canada

Brazil

Europe

Others

Current service cost

129

—

Past service cost - Plan amendments

(1)

—

Past service cost - Curtailments

—

Net interest cost/(income) on net DB liability (asset)

Total

225

Year ended December 31, 2019

Net periodic pension cost (income)

Total

United States

Canada

Brazil

Europe

Others

Current service cost

114

—

Past service cost - Plan amendments

—

Past service cost - Settlements

(26)

—

(26)

—

Net interest cost (income) on net DB liability (asset)

112

Total

204

(20)

Other post-employment benefits and other long-term employee

benefits ("OPEB")

This section includes post employment employees benefits that

are not disclosed above (i.e. includes lump sum benefits which

are mandatory by law, medical insurance and life insurance). In

addition, this section includes all other long-term employee

benefits.

ArcelorMittal’s principal operating subsidiaries in Canada,

Europe and certain other countries, provide other post

employment benefits and other long-term employee benefits,

including medical benefits and life insurance benefits, work

medals and retirement indemnity plans, to employees and

retirees.

In April 2021, ArcelorMittal Poland and trade unions reached an

agreement on the new CLA. The parties agreed a ten-year

transition period for retirement benefits and jubilee awards. At

the end of the transition period, in 2031, ArcelorMittal Poland will

pay the retirement benefits based on the labor code. In June

2021, the CLA was registered by the National Labor

Inspectorate in Poland and accordingly ArcelorMittal Poland

recognized total plan amendment and curtailment gain of 51 in

cost of sales.

319 Consolidated financial statements

Summary of changes in the other post-employment benefit obligation and changes in plan assets are as follows:

Year ended December 31, 2021

Total

United

States

Canada

Europe

Others

Change in benefit obligation

Benefit obligation at beginning of the period

1,438

742

590

Current service cost

—

(1)

Interest cost on DBO

Past service cost - Plan amendments

(57)

—

(58)

—

Past service cost - Curtailments

(7)

—

(7)

—

Actuarial (gain) loss

(111)

(1)

(66)

(43)

(1)

Demographic assumptions

(1)

—

(2)

—

Financial assumptions

(66)

—

(55)

(5)

(6)

Experience adjustment

(44)

(1)

(9)

(39)

Benefits paid

(82)

(1)

(34)

(44)

(3)

Foreign currency exchange rate differences and other movements

(25)

—

(24)

(2)

Benefit obligation at end of the period

1,190

661

423

Change in plan assets

Fair value of plan assets at beginning of the period

—

Return on plan assets greater than discount rate

—

Benefits paid

(1)

—

(1)

—

Fair value of plan assets at end of the period

—

Present value of the wholly or partly funded obligation

(29)

—

(29)

—

Fair value of plan assets

—

Net present value of the wholly or partly funded obligation

(23)

—

(23)

—

Present value of the unfunded obligation

(1,161)

(27)

(661)

(394)

(79)

Net amount recognized

(1,184)

(27)

(661)

(417)

(79)

Consolidated financial statements 320

(millions of U.S. dollar, except share and per share data)

Year ended December 31, 2020

Total

United

States

Canada

Europe

Others

Change in benefit obligation

Benefit obligation at beginning of the period

4,294

2,976

688

546

Current service cost

Interest cost on DBO

122

Past service cost - Plan amendments

(1)

—

(1)

—

Past service cost - Curtailments

—

Plan participants’ contribution

—

Actuarial (gain) loss

113

—

Demographic assumptions

(39)

—

Financial assumptions

266

170

Experience adjustment

(114)

(85)

(13)

(11)

(5)

Benefits paid

(208)

(131)

(30)

(37)

(10)

Divestments (note 2.3.1)

(3,024)

—

Foreign currency exchange rate differences and other movements

—

(5)

Benefit obligation at end of the period

1,438

742

590

Change in plan assets

Fair value of plan assets at beginning of the period

502

496

—

Interest income on plan assets

—

Return on plan assets greater/(less) than discount rate

—

Employer contribution

(32)

—

Plan participants’ contribution

—

Benefits paid

(22)

(21)

—

(1)

—

Divestments (note 2.3.1)

(489)

—

Foreign currency exchange rate differences and other movements

—

Fair value of plan assets at end of the period

—

Present value of the wholly or partly funded obligation

(34)

—

(34)

—

Fair value of plan assets

—

Net present value of the wholly or partly funded obligation

(28)

—

(28)

—

Present value of the unfunded obligation

(1,404)

(28)

(742)

(556)

(78)

Net amount recognized

(1,432)

(28)

(742)

(584)

(78)

321 Consolidated financial statements

The following tables detail the components of net periodic other post-employment cost:

Year ended December 31, 2021

Components of net periodic OPEB cost (income)

Total

United

States

Canada

Europe

Others

Current service cost

—

(1)

Past service cost - Plan amendments

(57)

—

(58)

—

Past service cost - Curtailments

(7)

—

(7)

—

Net interest cost (income) on net DB liability (asset)

Actuarial gain recognized during the year

(14)

—

(1)

(13)

—

Total

(44)

(69)

Year ended December 31, 2020

Components of net periodic OPEB cost (income)

Total

United

States

Canada

Europe

Others

Current service cost

Past service cost - Plan amendments

(1)

—

(1)

—

Past service cost - Curtailments

—

Net interest cost (income) on net DB liability (asset)

110

Actuarial losses recognized during the year

—

Total

205

126

Year ended December 31, 2019

Components of net periodic OPEB cost (income)

Total

United

States

Canada

Europe

Others

Current service cost

Net interest cost (income) on net DB liability (asset)

143

104

Actuarial losses recognized during the year

—

Total

231

144

The following tables detail where the expense is recognized in the consolidated statements of operations:

Year ended December 31,

2021

2020

2019

Net periodic pension cost

191

225

204

Net periodic OPEB cost

(44)

205

231

Total

147

430

435

Cost of sales

189

142

Selling, general and administrative expenses

Financing costs - net

207

263

Total

147

430

435

Consolidated financial statements 322

(millions of U.S. dollar, except share and per share data)

Plan Assets

The weighted-average asset allocations for the funded defined benefit plans by asset category were as follows:

December 31, 2021

Canada

Brazil

Europe

Equity Securities

35%

- Asset classes that have a quoted market price in an active market

27%

- Asset classes that do not have a quoted market price in an active market

—

Fixed Income Securities (including cash)

53%

87%

69%

- Asset classes that have a quoted market price in an active market

49%

87%

69%

- Asset classes that do not have a quoted market price in an active market

—

Real Estate

—

- Asset classes that have a quoted market price in an active market

—

- Asset classes that do not have a quoted market price in an active market

—

Other

30%

- Asset classes that have a quoted market price in an active market

—

- Asset classes that do not have a quoted market price in an active market

—

22%

Total

100%

December 31, 2020

Canada

Brazil

Europe

Equity Securities

47%

- Asset classes that have a quoted market price in an active market

39%

- Asset classes that do not have a quoted market price in an active market

—

Fixed Income Securities (including cash)

46%

77%

72%

- Asset classes that have a quoted market price in an active market

42%

77%

72%

- Asset classes that do not have a quoted market price in an active market

—

Real Estate

—

- Asset classes that have a quoted market price in an active market

—

- Asset classes that do not have a quoted market price in an active market

—

Other

16%

27%

- Asset classes that have a quoted market price in an active market

—

16%

- Asset classes that do not have a quoted market price in an active market

—

22%

Total

100%

1.The percentage consists primarily of assets from insurance contracts in Belgium.

These assets do not include direct investments in ArcelorMittal stock or ArcelorMittal bonds. They may include ArcelorMittal shares or

bonds held by mutual fund investments. The invested assets produced an actual return of 150 and 659 in 2021 and 2020, respectively.

The Finance and Retirement Committees of the Boards of Directors for the respective operating subsidiaries have general supervisory

authority over the respective trust funds. These committees usually establish, monitor and review asset allocation targets for the

respective funds. Asset managers are permitted some flexibility to vary the asset allocation from the long-term investment strategy

within agreed upon control ranges. The established targets observed as of December 31, 2021 are as described below:

323 Consolidated financial statements

December 31, 2021

Canada

Brazil

Europe

Equity Securities

35%

Fixed Income Securities (including cash)

55%

87%

68%

Real Estate

—

Other

30%

Total

100%

1.The percentage consists primarily of assets from insurance contracts in Belgium.

Assumptions used to determine benefit obligations at December 31,

Pension Plans

Other Post-employment Benefits

2021

2020

2019

Healthcare cost trend rate assumed

Range

1.30% - 4.50%

1.40% - 4.50%

1.80% - 5.00%

Weighted average

3.95%

3.94%

4.42%

Cash contributions and maturity profile of the plans

In 2022, the Company expects its cash contributions to amount

to 157 for pension plans, 65 for other post-employment benefits

plans and 148 for defined contribution plans. In 2021 and 2020,

cash contributions to defined contributions plans were 78 and

88, respectively.

In 2020, cash contributions to United States multi-employer

plans sponsored by the Company were 65, until December 9,

2020, date of sale of ArcelorMittal USA (see note 2.3.1).

At December 31, 2021 and December 31, 2020, the weighted

average duration of liabilities related to pension and other post-

employment benefits plans were 13 years and 13 years and 14

years and 13 years, respectively.

Risks associated with defined benefit plans

Through its defined benefit pension plans and OPEB plans,

ArcelorMittal is exposed to a number of risks, the most

significant of which are detailed below:

Changes in bond yields

An increase in corporate bond yields will decrease plan

liabilities, however it will decrease simultaneously the value of

the plans’ bond holdings.

Asset volatility

The plan liabilities are calculated using a discount rate set with

reference to corporate bond yields; if plan assets underperform

this yield, this will create a deficit. In most countries with funded

plans, plan assets hold a significant portion of equities, which

are expected to outperform corporate bonds in the long-term but

contribute to volatility and risk in the short-term. As the plans

mature, ArcelorMittal intends to reduce the level of investment

risk by investing more in assets that better match the liabilities.

However, ArcelorMittal believes that due to the long-term nature

of the plan liabilities, a level of continuing equity investment is

an appropriate element of a long-term strategy to manage the

plans efficiently.

Consolidated financial statements 324

(millions of U.S. dollar, except share and per share data)

Life expectancy

Most plans provide benefits for the life of the covered members,

so increases in life expectancy will result in an increase in the

plans’ benefit obligations.

Assumptions regarding future mortality rates have been set

considering published statistics and, where possible,

ArcelorMittal’s own experience.

The current longevity at retirement underlying the values of the

defined benefit obligation was approximately 23 years.

Healthcare cost trend rate

The majority of the OPEB plans’ benefit obligations are linked to

the change in the cost of various health care components.

Future healthcare cost will vary based on several factors

including price inflation, utilization rate, technology advances,

cost shifting and cost containing mechanisms. A higher

healthcare cost trend would lead to higher OPEB plan benefit

obligations.

Sensitivity analysis

The following information illustrates the sensitivity to a change of the significant actuarial assumptions related to ArcelorMittal’s pension

plans (as of December 31, 2021, the defined benefit obligation for pension plans was 6,739):

Effect on 2022 Pre-Tax Pension Expense

(sum of service cost and interest cost)

Effect on December 31, 2021 DBO

Change in assumption

100 basis points decrease in discount rate

(27)

955

100 basis points increase in discount rate

(764)

100 basis points decrease in rate of compensation

(14)

(182)

100 basis points increase in rate of compensation

182

1 year increase of the expected life of the beneficiaries

192

The following table illustrates the sensitivity to a change of the significant actuarial assumptions related to ArcelorMittal’s OPEB plans

(as of December 31, 2021 the defined benefit obligation for post-employment benefit plans was 1,190):

Effect on 2022 Pre-Tax OPEB Expense

(sum of service cost and interest cost)

Effect on December 31, 2021 DBO

Change in assumption

100 basis points decrease in discount rate

(1)

179

100 basis points increase in discount rate

(142)

100 basis points decrease in healthcare cost trend rate

(5)

(83)

100 basis points increase in healthcare cost trend rate

104

1 year increase of the expected life of the beneficiaries

The above sensitivities reflect the effect of changing one

assumption at a time. Actual economic factors and conditions

often affect multiple assumptions simultaneously, and the effects

of changes in key assumptions are not necessarily linear.

8.3 Share-based payments

ArcelorMittal issues equity-settled share-based payments to

certain employees, including stock options, RSUs and PSUs.

Equity-settled share-based payments are measured at fair value

(excluding the effect of non market-based vesting conditions) at

the grant date. The fair value determined at the grant date of the

equity-settled share-based payments is expensed on a graded

vesting basis over the vesting period, based on the Company’s

estimate of the shares that will eventually vest and adjusted for

the effect of non market-based vesting conditions. Where the

fair value calculation requires modeling of the Company’s

performance against other market index, fair value is measured

using the Monte Carlo pricing model to estimate the forecasted

target performance goal for the company and its peer

companies. The expected life used in the model has been

adjusted, based on management’s best estimate, for the effects

of non-transferability, exercise restrictions and behavioral

considerations. In addition, the expected annualized volatility

has been set by reference to the implied volatility of options

available on ArcelorMittal shares in the open market, as well as,

historical patterns of volatility. For the RSUs and PSUs, the fair

value determined at the grant date of the equity-settled share-

based payments is expensed on a straight line method over the

vesting period and adjusted for the effect of non market-based

vesting conditions.

325 Consolidated financial statements

Stock Option Plans

Prior to the May 2011 annual general meeting of shareholders

("AGM") adoption of the ArcelorMittal Equity Incentive Plan

described below, ArcelorMittal’s equity-based incentive plan took

the form of a stock option plan known as the Global Stock

Option Plan.

Under the terms of the ArcelorMittal Global Stock Option Plan

2009-2018 (which replaced the ArcelorMittal Shares plan that

expired in 2009), ArcelorMittal may grant options to purchase

common shares to senior management of ArcelorMittal and its

associates for up to 33,333,333 common shares. The exercise

price of each option equals not less than the fair market value of

ArcelorMittal shares on the grant date, with a maximum term of

ten years. Options are granted at the discretion of ArcelorMittal’s

Appointments, Remuneration and Corporate Governance

("ARCG") Committee (formerly ARCGS Committee), or its

delegate. The options vest either ratably upon each of the first

three anniversaries of the grant date, or, in total, upon the death,

disability or retirement of the participant.

Grant date

Exercise prices (per option)

August 2010

$91.98

No options were granted during the years ended December 31,

2021, 2020, and 2019. The compensation expense recognized

for stock option plans was nil for each of the years ended

December 31, 2021, 2020 and 2019.

Option activity with respect to ArcelorMittal Shares and

ArcelorMittal Global Stock Option Plan 2009-2018 is

summarized below as of and for each of the years ended

December 31, 2021, 2020 and 2019:

Number of

Options

Range of

Exercise

Prices

(per option)

Weighted

Average

Exercise

Price

(per

option)

Outstanding, December 31, 2018

1,989,375

91.98 – 109.14

100.33

Expired

(1,084,985)

91.98 – 109.14

107.29

Outstanding, December 31, 2019

904,390

91.98

Expired

(904,390)

91.98

Outstanding, December 31, 2020

—

Exercisable, December 31, 2019

904,390

91.98

Exercisable, December 31, 2020

—

Exercisable, December 31, 2021

—

There were no stock options of the Company outstanding as of

December 31, 2021.

ArcelorMittal Equity Incentive Plan

On May 10, 2011, the AGM approved the ArcelorMittal Equity

Incentive Plan, a new equity-based incentive plan that replaced

the Global Stock Option Plan. The ArcelorMittal Equity Incentive

Plan is intended to align the interests of the Company’s

shareholders and eligible employees by allowing them to

participate in the success of the Company. The ArcelorMittal

Equity Incentive Plan provides for the grant of RSUs and PSUs

to eligible Company employees (including Executive Officers)

and is designed to incentivize employees, improve the

Company’s long-term performance and retain key employees.

The grant of PSUs under the ArcelorMittal Equity Incentive Plan

aims to serve as an effective performance-enhancing scheme

based on the employee’s contribution to the eligible

achievement of the Company’s strategy. Awards in connection

with PSUs are subject to the fulfillment of cumulative

performance criteria (such as return on capital employed

("ROCE"), total shareholders return ("TSR"), earnings per share

("EPS"), environmental, social and governance ("ESG") and gap

to competition) over a three-year period from the date of the

PSU grant. The employees eligible to receive PSUs are a sub-

set of the group of employees eligible to receive RSUs.

RSUs granted under the ArcelorMittal Equity Incentive Plan are

designed to provide a retention incentive to eligible employees.

RSUs are subject to “cliff vesting” after three years, with 100%

of the grant vesting on the third anniversary of the grant

contingent upon the continued active employment of the eligible

employee within the Company.

The maximum number of PSUs (and RSUs) available for grant

during any given year is subject to the prior approval of the

Company’s shareholders at the AGM. The 2019, 2020 and 2021

Caps for the number of PSUs/RSUs that may be allocated to the

Executive Office and other retention and performance based

grants below the Executive Office level, were approved at the

AGMs on May 7, 2019, June 13, 2020 and June 8, 2021,

respectively, at a maximum of 2,500,000 shares, 4,250,000

shares and 3,500,000 shares, respectively.

In 2020, 316,684 RSUs were granted as a special grant with a

one year vesting period to compensate salary reduction in 2020

contingent upon the continued active employment of the eligible

employee within the Company until the vesting date i.e.

December 14, 2021.

Consolidated financial statements 326

(millions of U.S. dollar, except share and per share data)

Conditions of the 2021 grant were as follows:

Executive office

Executive Officers

2021

Grant

PSUs with a three year performance period

Value at grant 100% of base salary for the Executive Chairman and

the CEO

Vesting conditions:

Vesting conditions

Threshold

Target

Stretch

TSR vs. peer group (50%) / EPS

vs. peer group (20%)

100% median

≥120% median

TSR vs. peer group (40%)

100%

weighted

average

≥120%

weighted

average

Vesting percentage

50%

100%

Vesting percentage

100%

150%

Gap to competition (40%)

100% of target

120% of target

ESG (30%)

100% of target

Vesting percentage

100%

150%

ESG

(20%)

100% of target

120% of target

Vesting percentage

100%

150%

RSUs with a three year vesting period

RSUs with a two year vesting period

Awards made in previous financial years which have not yet

reached the end of the vesting period

ArcelorMittal's Equity Incentive Plan for senior management

including Executive Officers follows the Company's strategy.

In 2016, in order to ensure achievement of the Action 2020 plan,

ArcelorMittal made a special grant (“Special Grant”) to qualifying

employees (including Executive Officers), instead of the

standard grant. The value of the Special Grant at grant date is

based generally on a specified percentage of the base salary

depending on the position of the employee at grant date. The

vesting is subject to continued active employment within the

ArcelorMittal group and to yearly performance of ROCE targets

and other strategic objectives within the business units.

In addition to the 2021 grant, the summary of outstanding plans

as of December 31, 2021 is as follows:

Executive office

2016

Special

Grant

PSUs with a five year performance period, 50% vesting after three

year performance period and 50% after additional two year

performance period

Performance criteria: 50% TSR (½ vs. S&P 500 and ½ vs. peer group)

and 50% EPS vs. peer group

Value at grant: 150% of base salary for the Executive Chairman and

the CEO

Vesting conditions:

Threshold

Target

TSR/EPS vs. peer group

100% median

≥120% median

TSR vs. S&P 500

Performance

equal to Index

≥Performance

equal to Index +

2% p.a.

outperformance

Vesting percentage

50%

100%

327 Consolidated financial statements

Executive office

Executive officers

2018

Grant

PSUs with a three year performance period

Value at grant 100% of base salary for the Executive Chairman and

the CEO

Vesting conditions:

Vesting conditions

Threshold

Target

TSR/EPS vs. peer group

100% median

≥120% median

ROCE

100% target

100% vesting

TSR vs. S&P 500

Performance

equal to Index

≥Performance

equal to Index +

2% p.a.

outperformance

Gap to competition (where applicable)

100% target

100% vesting

Vesting percentage

50%

100%

Executive office

Executive officers

2019

Grant

PSUs with a three year performance period

Value at grant 100% of base salary for the Executive Chairman and

the CEO

Vesting conditions:

Threshold

Target

TSR/EPS vs. peer group

100% median

≥120% median

ROCE

100% target

100% vesting

TSR vs. S&P 500

Performance

equal to Index

≥Performance

equal to Index +

2% p.a.

outperformance

Gap to competition (where applicable)

100% target

100% vesting

Vesting percentage

50%

100%

Executive office

Executive officers

2020

Grant

PSUs with a three year performance period

Value at grant 100% of base salary for the Executive Chairman and

the CEO

Vesting conditions:

Threshold

Target

Threshold

Target

TSR/EPS vs. peer group

100% median

≥120% median

TSR/EPS vs. peer group

100% median

≥120% median

Vesting percentage

50%

100%

TSR vs. S&P 500

Performance

equal to Index

≥Performance

equal to Index +

2% p.a.

outperformance

Gap to competition (where

applicable)

100% target

100% vesting

Vesting percentage

50%

100%

Vesting percentage

100%

RSUs with a three year vesting period

RSUs with a one year vesting period

Consolidated financial statements 328

(millions of U.S. dollar, except share and per share data)

The following table summarizes the Company’s share unit plans outstanding as of December 31, 2021:

At Grant date

Number of shares issued as of

December 31, 2021

Grant date

Type of plan

Number of

beneficiaries

Maturity

Fair value

per share

outstanding

forfeited

exited

December 16, 2021

RSU

729,250

658

December 16, 2024

32.66

729,250

—

December 16, 2021

PSU

575,400

244

January 1, 2025

28.29

575,400

—

December 16, 2021

Executive Office

109,143

January 1, 2025

27.20

109,143

—

May 7, 2021

RSU

350,000

189

May 7, 2023

32.55

336,500

12,194

1,306

December 14, 2020

RSU

1,074,600

656

December 14, 2023

21.15

1,029,200

41,628

3,772

December 14, 2020

PSU

714,250

235

January 1, 2024

19.74

687,250

27,000

—

December 14, 2020

Executive Office

148,422

January 1, 2024

18.19

148,422

—

December 16, 2019

PSU

1,760,350

517

January 1, 2023

18.57

1,381,750

202,850

175,750

December 16, 2019

Executive Office

172,517

January 1, 2023

14.89

172,517

—

December 20, 2018

PSU

1,358,750

524

January 1, 2022

21.31

943,200

293,300

122,250

December 20, 2018

Executive Office

134,861

January 1, 2022

16.58

134,861

—

June 30, 2016

Executive Office

153,268

January 1, 2022

16.62

153,268

—

Total

7,280,811

$14.89 –

$32.66

6,400,761

576,972

303,078

The compensation expense recognized for PSUs was 35, 30

and nil for the years ended December 31, 2021, 2020 and 2019.

Share unit plan activity is summarized below as of and for each

year ended December 31, 2021, 2020 and 2019:

RSUs

PSUs

Number

of shares

Fair

value

per

Number of

Fair

value

per

Outstanding, December

31, 2018

—

9,370,460

15.34

Granted 1

—

2,018,176

17.96

Exited

—

(2,677,011)

13.49

Forfeited

—

(1,239,569)

14.25

Outstanding, December

31, 2019

—

7,472,056

16.76

Granted

1,391,284

21.15

862,672

19.47

Exited

—

(658,141)

16.86

Forfeited

—

(526,420)

15.48

Outstanding, December

31, 2020

1,391,284

21.15

7,150,167

17.18

Granted

1,079,250

32.62

684,543

28.12

Exited

(315,699)

21.20

(613,385)

14.04

Forfeited

(59,885)

23.47

(2,915,514)

15.37

Outstanding, December

31, 2021

2,094,950

26.99

4,305,811

20.58

1.Including 85,309 over-performance shares granted for the targets

achievement of the PSU grant December 18, 2015.

NOTE 9: PROVISIONS, CONTINGENCIES AND

COMMITMENTS

ArcelorMittal recognizes provisions for liabilities and probable

losses that have been incurred when it has a present legal or

constructive obligation as a result of past events, it is probable

that the Company will be required to settle the obligation and a

reliable estimate of the amount of the obligation can be made. If

the effect of the time value of money is material, provisions are

discounted using a current pre-tax rate that reflects, where

appropriate, the risks specific to the liability. Where discounting

is used, the increase in the provision due to the passage of time

is recognized as a financing cost. Future operating expenses or

losses are excluded from recognition as provisions as they do

not meet the definition of a liability. Contingent assets and

contingent liabilities are excluded from recognition in the

consolidated statements of financial position.

Provisions for onerous contracts are recorded in the

consolidated statements of operations when it becomes known

that the unavoidable costs of meeting the obligations under the

contract exceed the economic benefits expected to be received.

Assets dedicated to the onerous contracts are tested for

impairment before recognizing a separate provision for the

onerous contract.

Provisions for restructuring are recognized when and only when

a detailed formal plan exists and a valid expectation in those

affected by the restructuring has been raised, by starting to

implement the plan or announcing its main features.

329 Consolidated financial statements

ArcelorMittal records asset retirement obligations (“ARO”)

initially at the fair value of the legal or constructive obligation in

the period in which it is incurred and capitalizes the ARO by

increasing the carrying amount of the related non-current asset.

The fair value of the obligation is determined as the discounted

value of the expected future cash flows. The liability is accreted

to its present value through net financing cost and the

capitalized cost is depreciated in accordance with the

Company’s depreciation policies for property, plant and

equipment. Subsequently, when reliably measurable, ARO is

recorded on the consolidated statements of financial position

increasing the cost of the asset and the fair value of the related

obligation. Foreign exchange gains or losses on AROs

denominated in foreign currencies are recorded in the

consolidated statements of operations.

ArcelorMittal is subject to changing and increasingly stringent

environmental laws and regulations concerning air emissions,

water discharges and waste disposal, as well as certain

remediation activities that involve the clean-up of soil and

groundwater. ArcelorMittal is currently engaged in the

investigation and remediation of environmental contamination at

a number of its facilities. Most of these are legacy obligations

arising from acquisitions.

Environmental costs that relate to current operations or to an

existing condition caused by past operations, and which do not

contribute to future revenue generation or cost reduction, are

expensed. Liabilities are recorded when environmental

assessments and/or remedial efforts are probable and the cost

can be reliably estimated based on ongoing engineering studies,

discussions with the environmental authorities and other

assumptions relevant to the nature and extent of the

remediation that may be required. The ultimate cost to

ArcelorMittal is dependent upon factors beyond its control such

as the scope and methodology of the remedial action

requirements to be established by environmental and public

health authorities, new laws or government regulations, rapidly

changing technology and the outcome of any potential related

litigation. Environmental liabilities are discounted if the

aggregate amount of the obligation and the amount and timing

of the cash payments are fixed or reliably determinable.

The estimates of loss contingencies for environmental matters

and other contingencies are based on various judgments and

assumptions including the likelihood, nature, magnitude and

timing of assessment, remediation and/or monitoring activities

and the probable cost of these activities. In some cases,

judgments and assumptions are made relating to the obligation

or willingness and ability of third parties to bear a proportionate

or allocated share of cost of these activities, including third

parties who sold assets to ArcelorMittal or purchased assets

from it subject to environmental liabilities. ArcelorMittal also

considers, among other things, the activity to date at particular

sites, information obtained through consultation with applicable

regulatory authorities and third-party consultants and

contractors and its historical experience with other

circumstances judged to be comparable. Due to the numerous

variables associated with these judgments and assumptions,

and the effects of changes in governmental regulation and

environmental technologies, both the precision and reliability of

the resulting estimates of the related contingencies are subject

to substantial uncertainties. As estimated costs to remediate

change, the Company will reduce or increase the recorded

liabilities through write backs or additional provisions in the

consolidated statements of operations. ArcelorMittal does not

expect these environmental issues to affect the utilization of its

plants, now or in the future.

ArcelorMittal is currently and may in the future be involved in

litigation, arbitration or other legal proceedings. Provisions

related to legal and arbitration proceedings are recorded in

accordance with the principles described above.

Most of these claims involve highly complex issues. Often these

issues are subject to substantial uncertainties and, therefore,

the probability of loss and an estimation of damages are difficult

to ascertain. Consequently, ArcelorMittal may be unable to make

a reliable estimate of the expected financial effect that will result

from ultimate resolution of the proceeding. In those cases,

ArcelorMittal has disclosed information with respect to the

nature of the contingency. ArcelorMittal has not accrued a

provision for the potential outcome of these cases.

For cases in which the Company was able to make a reliable

estimate of the expected loss or range of probable loss and has

accrued a provision for such loss, it believes that publication of

this information on a case-by-case basis would seriously

prejudice the Company’s position in the ongoing legal

proceedings or in any related settlement discussions.

Accordingly, in these cases, the Company has disclosed

information with respect to the nature of the contingency, but

has not disclosed its estimate of the range of potential loss.

In the cases in which quantifiable fines and penalties have been

assessed, the Company has indicated the amount of such fine

or penalty or the amount of provision accrued that is the

estimate of the probable loss.

These assessments can involve a series of complex judgments

about future events and can rely heavily on estimates and

assumptions. The assessments are based on estimates and

assumptions that have been deemed reasonable by

management. The Company believes that the aggregate

provisions recorded for the above matters are adequate based

upon currently available information. However, given the

inherent uncertainties related to these cases and in estimating

contingent liabilities, the Company could, in the future, incur

Consolidated financial statements 330

(millions of U.S. dollar, except share and per share data)

judgments that have a material adverse effect on its results of

operations in any particular period. The Company considers it

highly unlikely, however, that any such judgments could have a

material adverse effect on its liquidity or financial condition.

9.1 Provisions

Balance at

December 31,

2020

Additions1

Deductions/

Payments

Effects of foreign

exchange and

other movements

Balance at

December 31,

2021

Environmental

661

(65)

(48)

595

Emission obligations

571

606

(565)

(120)

492

Asset retirement obligations

397

(5)

(15)

397

Site restoration

309

(93)

(21)

220

Staff related obligations

127

(31)

(16)

120

Voluntary separation plans

(27)

(10)

Litigation and other (see note 9.3)

269

143

(70)

(19)

323

Tax claims

(10)

(5)

Other legal claims

207

111

(60)

(14)

244

Commercial agreements and onerous

contracts

(5)

(1)

Other

218

278

(112)

(23)

361

2,632

1,176

(973)

(273)

2,562

Short-term provisions

935

1,064

Long-term provisions

1,697

1,498

2,632

2,562

Balance at

December 31,

2019

Additions1

Deductions/

Payments

Effects of foreign

exchange and

other movements

Divestments and

reclassification to

held for sale 2, 3

Balance at

December 31,

2020

Environmental

1,074

137

(88)

(519)

661

Emission obligations

484

373

(92)

(40)

(154)

571

Asset retirement obligations

478

(10)

(133)

397

Site restoration

136

167

(12)

—

309

Staff related obligations

185

(41)

(14)

(91)

127

Voluntary separation plans

(38)

(4)

Litigation and other (see note 9.3)

312

(36)

(39)

(8)

269

Tax claims

(6)

(18)

—

Other legal claims

231

(30)

(21)

(8)

207

Commercial agreements and onerous

contracts

(31)

(4)

(54)

Other

229

(44)

(12)

218

2,991

953

(392)

(975)

2,632

Short-term provisions

516

935

Long-term provisions

2,475

1,697

2,991

2,632

1.Additions exclude provisions reversed or utilized during the same year.

2.On December 9, 2020, the Company completed the sale of ArcelorMittal USA and certain other US operations (see note 2.3.1).

3.On December 10, 2020, the Company signed a binding agreement with Invitalia, an Italian state-owned company, to form a public-private partnership between the parties.

As a result, the carrying amounts of the assets and liabilities of ArcelorMittal Italia were classified as held for sale as of December 31, 2020 (see note 2.3.2).

331 Consolidated financial statements

The Company uses derivative financial instruments and spot

purchases to manage its exposure to fluctuations in prices of

emission rights allowances. See note 6.3 for the details of the

cash flow hedging in place for emission rights, note 4.5 for CO2

emission rights held as current assets and note 5.1 for CO2

emission rights held as Intangible non-current assets. The

Company also receives indirect compensation through rebates

on its energy tariffs.

There are uncertainties regarding the timing and amount of the

provisions above. Changes in underlying facts and

circumstances for each provision could result in differences in

the amounts provided for and the actual outflows. In general,

provisions are presented on a non-discounted basis due to the

uncertainties regarding the timing or the short period of their

expected consumption.

Environmental provisions have been estimated based on

internal and third-party estimates of contaminations, available

remediation technology, and environmental regulations.

Estimates are subject to revision as further information develops

or circumstances change.

Provisions for site restoration are related to costs in connection

with the dismantling of site facilities, mainly in France and

Poland. In the fourth quarter of 2018, the agreement between

ArcelorMittal and the French government regarding a six-year

idling period of the Florange liquid phase expired. The Company

has started the process of definitive closure of the facility at the

end of 2018. The provision included in site restoration at

December 31, 2021 and 2020, related to dismantling of this

facility amount to 98 and 120, respectively.

Provisions for staff related obligations primarily concern Brazil

and are related to various employees’ compensation.

Provisions for voluntary separation plans primarily concern

plans in Spain, Belgium, Germany, France and Brazil which are

expected to be settled within one year.

Provisions for litigation include losses relating to present legal

obligations that are considered to be probable. Further detail

regarding legal matters is provided in note 9.3.

In 2021 and 2020 provisions for commercial agreements and

onerous contracts concern primarily onerous contracts

recognized in Poland and Brazil.

In 2021, other provisions decreased by 98 with respect to the

indemnification arrangement between the Company and Global

Chartering (see note 2.3.1) following a revision of the shipping

market rate outlook for certain of Global Chartering's fleet lease

terms. Other provisions increased by 240 as a result of the

Complementary Agreement Term signed on June 7, 2021

between ArcelorMittal Brasil, the Federal and State Prosecutor

Offices and the Commission representing affected people with

respect to the precautionary evacuation of the communities

close to the Serra Azul dam as well as the commitment to

implement action plans in order to ensure the stability, security

and decommissioning of the tailing dam. As of December 31,

2021 such provisions amounted to 217. Other provisions

comprise as well technical warranties and guarantees.

Environmental Liabilities

ArcelorMittal’s operations are subject to a broad range of laws

and regulations relating to the protection of human health and

the environment at its multiple locations and operating

subsidiaries. As of December 31, 2021, excluding asset

retirement obligations, ArcelorMittal had established provisions

of 595 for environmental remedial activities and liabilities. The

provisions for all operations by geographic area were 445 in

Europe, 120 in South Africa and 30 in Canada. In addition,

ArcelorMittal and the previous owners of its facilities have

expended substantial amounts to achieve or maintain ongoing

compliance with applicable environmental laws and regulations.

ArcelorMittal expects to continue to expend resources in this

respect in the future.

Europe

Environmental provisions for ArcelorMittal’s operations in

Europe total 445 and are mainly related to the investigation and

remediation of environmental contamination at current and

former operating sites in Belgium (224), France (68), Poland

(62), Luxembourg (52), Germany (31) and Spain (8). This

investigation and remediation work relates to various matters

such as decontamination of water discharges, waste disposal,

cleaning water ponds and remediation activities that involve the

clean-up of soil and groundwater. These provisions also relate

to human health protection measures such as fire prevention

and additional contamination prevention measures to comply

with local health and safety regulations.

Belgium

In Belgium, environmental provisions amount to 224, of which

the most significant elements are legal site remediation

obligations linked to the closure of the primary installations at

ArcelorMittal Belgium (Liège). The provisions also concern the

external recovery and disposal of waste, residues or by-

products that cannot be recovered internally at the ArcelorMittal

Ghent and Liège sites and the removal and disposal of material

containing asbestos.

France

In France, environmental provisions of 68 principally relate to

the remediation of former sites, including several coke plants,

and the capping and monitoring of landfills or basins previously

used for residues and secondary material.

Consolidated financial statements 332

(millions of U.S. dollar, except share and per share data)

The remediation of the coke plants concerns mainly the

Thionville, Moyeuvre-Grande, Homecourt, Hagondange and

Micheville sites, and is related to treatment of soil and

groundwater. At the Thionville coke plant, soil remediation will

be completed by the end of 2022, while additional investigations

are ongoing for groundwater. At Moyeuvre-Petite, the covering

of sludge basins is completed.

ArcelorMittal is responsible for closure and final rehabilitation of

the rest of the site corresponding to the former Conroy and

Pérotin slag-heaps, from which the administrative procedure for

cessation of activity is underway but due to the COVID-19

pandemic the project slowed down but it is expected that the

remediation will start in 2022. In other sites, ArcelorMittal France

is responsible for monitoring the concentration of organic

compound and heavy metals in soil and groundwater on all

former sites closed and/or already remediated. The Florange

coke plant shut down in 2020 and is now under investigation for

its demolition and remediation.

ArcelorMittal France has an environmental provision that

principally relates to the remediation and improvement of

storage of secondary materials, the disposal of waste at

different ponds and landfills and an action plan for removing

asbestos from the installations and mandatory financial

guarantees to cover risks of major accident hazard or for

gasholders and waste storage. Most of the provision relates to

the stocking areas at the Dunkirk site that will need to be

restored to comply with local law and to the mothballing of the

liquid phase in Florange, including study and surveillance of soil

and water to prevent environmental damage, treatment and

elimination of waste and financial guarantees demanded by

Public Authorities. Environmental provisions also include

treatment of slag dumps at the Florange and Dunkirk sites as

well as removal and disposal of material containing asbestos at

the Dunkirk and Mardyck sites.

ArcelorMittal France also has an environmental provision that

principally relates to the remediation and improvement of

storage of secondary materials, the disposal of waste at

different ponds and landfills as the stocking areas at the Dunkirk

site need to be restored to comply with local law.

Poland

ArcelorMittal Poland’s environmental provision of 62 includes 37

for cleaning and remediation costs recognized in 2020 following

the closure of primary facilities in Kraków; the remaining 25

relates to the obligation to reclaim a landfill in Lipówka to

dispose of the residues which cannot be internally recycled or

externally recovered in Dabrowa Gornicza, the storage and

disposal of iron-bearing sludge which cannot be reused in the

manufacturing process under the environmental law (i.e., waste

storage time cannot exceed three years) and also land

remediation in post-industrial areas in Ruszcza (district of

Kraków).

Luxembourg

In Luxembourg, environmental provisions of 52 relate to the

post-closure monitoring and remediation of former production

sites, waste disposal areas, slag deposits and mining sites.

In 2007, ArcelorMittal Luxembourg sold the former Ehlerange

slag deposit (93 hectares) to the State of Luxembourg.

ArcelorMittal Luxembourg is contractually liable to clean the site

and move approximately 400,000 cubic meters of material to

other sites. ArcelorMittal Luxembourg also has an environmental

provision to secure, stabilize and conduct waterproofing

treatment on mining galleries and entrances and various

dumping areas in Mondercange, Differdange and

Dommeldange. In addition, ArcelorMittal Luxembourg has

secured the disposal of ladle slag, sludge and certain other

residues coming from different sites at the Differdange dump for

a total volume of 1,400,000 cubic meters until the end of 2021.

In 2022 the covering process of this dump will be started. A

provision of 42 covers these obligations.

ArcelorMittal Belval and Differdange has an environmental

provision of 10 to clean historical landfills in order to meet the

requirements of the Luxembourg Environment Administration

and to cover dismantling and soil cleaning costs of the former

PRIMOREC installation.

Germany

In Germany, the environmental provision of 31 essentially

relates to ArcelorMittal Bremen’s post-closure obligations mainly

established for soil remediation, groundwater treatment and

monitoring at the Prosper coke plant in Bottrop.

Spain

In Spain, ArcelorMittal España has environmental provisions of

8 due to obligations of sealing landfills basically located in the

Asturias site and post-closure obligations in accordance with

national legislation. These obligations include the collection and

treatment of leachates that can be generated during the

operational phase and a period of 30 years after the closure.

South Africa

AMSA has environmental provisions of 120 to be used over 15

years, mainly relating to environmental remediation obligations

attributable to historical or legacy settling/evaporation dams and

waste disposal activities. An important determinant in the final

timing of the remediation work relates to obtaining the

necessary environmental authorizations.

A provision of 39 relates to the decommissioned Pretoria Works

site. This site is in a state of partial decommissioning and

rehabilitation with one coke battery and a small-sections rolling

facility still in operation. AMSA transformed this old plant into an

333 Consolidated financial statements

industrial hub for light industry since the late 1990s. Particular

effort is directed to landfill sites, with sales of slag from legacy

disposal sites to vendors in the construction industry continuing

unabated, but other remediation works continued at a slow pace

as remediation actions for these sites are long-term in nature in

terms of a remediation order received during October 2021.

The Vanderbijlpark Works site, the main flat carbon steel

operation of AMSA, contains a number of legacy facilities and

areas requiring remediation. The remediation entails the

implementation of rehabilitation and decontamination measures

of waste disposal sites, waste water dams, ground water and

historically contaminated open areas. Provisions relating to this

site amount to 19.

The Newcastle Works site is the main long carbon steel

operation of AMSA. A provision of 25 relates to this site. As with

all operating sites of AMSA, the above retirement and

remediation actions dovetail with numerous large capital

expenditure projects dedicated to environmental management.

In the case of the Newcastle site, the major current

environmental capital project is for air quality improvements and

storm water management.

A provision of 33 relates to the environmental rehabilitation of

the Thabazimbi mine. AMSA holds an environmental trust which

holds investments for a value of 26 that will be used for

rehabilitation purposes.

The remainder of the obligation of 4 relates to Vereeniging site

for the historical pollution that needs to be remediated at waste

disposal sites, waste water dams and groundwater aquifers.

Canada

In Canada, ArcelorMittal Dofasco has an environmental

provision of 30 for the expected cost of remediating toxic

sediment located in the Company’s East Boatslip site, of which

1 is expected to be spent in 2022.

Asset Retirement Obligations (“AROs”)

AROs arise from legal requirements and represent

management’s best estimate of the present value of the costs

that will be required to retire plant and equipment or to restore a

site at the end of its useful life. As of December 31, 2021,

ArcelorMittal had established provisions for asset retirement

obligations of 397, including 154 for Canada, 63 for Mexico, 46

for Ukraine, 42 for Germany, 23 for Liberia, 19 for South Africa,

12 for Belgium, 13 for Kazakhstan, 21 for Brazil, 2 for Bosnia

and Herzegovina and others.

AROs in Canada are legal obligations for site restoration and

dismantling of the facilities near the mining sites in Mont-Wright

and Fire Lake, and the accumulation area of mineral substances

at the facility of Port-Cartier in Quebec, upon closure of the

mines pursuant to the restoring plan of the mines. In addition,

Dofasco has legal obligations for the former Sherman Mine site

near Temagami, Ontario.

AROs in Mexico relate to the restoration costs following the

closure of the Las Truchas, El Volcan and the joint operation of

Peña Colorada iron ore mines.

AROs in Ukraine are legal obligations for site rehabilitation at

the iron ore mining site in Kryvyi Rih, upon closure of the mine

pursuant to its restoration plan.

In Germany, AROs principally relate to the Hamburg site, which

operates on leased land with the contractual obligation to

remove all buildings and other facilities upon the termination of

the lease, and to the Prosper coke plant in Bottrop for filling the

basin, restoring the layer and stabilizing the shoreline at the

harbor.

In Liberia, AROs relate to iron ore mine and associated

infrastructure and mine related environmental damage and

compensation. They cover the closure and rehabilitation plan

under both the current operating phase and the not yet

completed Phase 2 expansion project.

AROs in South Africa are for the Pretoria, Vanderbijlpark,

Saldanha, Newcastle as well as the Coke and Chemical sites,

and relate to the closure and clean-up of the plant associated

with decommissioned tank farms, tar plants, chemical stores,

railway lines, pipelines and defunct infrastructure.

In Belgium, AROs are to cover the demolition costs for the

primary facilities at the Liège site.

In Kazakhstan, AROs relate to the restoration obligations of the

iron ore and coal mines.

In Brazil, AROs relate to legal obligations to clean and restore

the mining areas of Serra Azul and Andrade, both located in the

State of Minas Gerais. The related provisions are expected to

be fully settled up to 2072 and 2078, respectively.

In Bosnia and Herzegovina, ARO relates to re-cultivation of

dump yard of old iron ore pit Jezero and closing dam Medjedja.

Consolidated financial statements 334

(millions of U.S. dollar, except share and per share data)

9.2 Other long-term obligations

Balance at December 31,

2021

2020

Derivative financial instruments (notes 6.1

and 6.3)

Payable from acquisition of financial

assets

115

359

Unfavorable contracts

105

132

Income tax payable

219

214

Other

377

347

Total

874

1,148

As of December 31, 2021 and 2020, payable from acquisition of

financial assets included 80 and 95 respectively relating to

AMNS India's debt guarantee. At December 31, 2020 payable

from acquisition of financial assets included also 235 relating to

the financial liability with respect to the acquisition of AMSF (see

note 11.5.2). In 2021, the liability was reclassified as accrued

expenses and other liabilities (see note 4.8).

Unfavorable contracts of 105 and 132 as of December 31, 2021

and 2020, respectively, mainly related to AMSF (see note 2.2.4).

As of December 31, 2021, the income tax payable mainly

related to income tax contingencies (in majority unasserted

claims) and withholding tax.

9.3 Contingent liabilities

Tax Claims

ArcelorMittal is a party to various tax claims. As of

December 31, 2021, ArcelorMittal had recorded short-term and

long-term liabilities related to income and non-income tax

contingencies of 131 and provisions for non-income tax claims

in the aggregate of 79 for which it considers the risk of loss to be

probable. Set out below is a summary description of the tax

claims (i) for which ArcelorMittal had recorded a provision as of

December 31, 2021, (ii) that constitute a contingent liability, (iii)

that were resolved in 2021 or (iv) that were resolved and had a

financial impact in 2020 or 2019 in each case involving amounts

deemed material by ArcelorMittal. The Company is vigorously

defending against the pending claims discussed below.

Brazil

In 2011, ArcelorMittal Brasil (at the time SOL Coqueria Tubarão

S.A.) received 21 separate tax assessments from the Revenue

Service of the State of Espirito Santo for ICMS (a value-added

tax) in an amount which totaled 23 relating to a tax incentive

(INVEST) it used. The dispute concerns the definition of fixed

assets. In August 2015, the administrative tribunal of the first

instance upheld the 21 separate tax assessments. In September

2015, ArcelorMittal Brasil filed appeals with respect to each of

the administrative tribunal’s decisions. As of December 31,

2018, there were final unfavorable decisions at the

administrative tribunal level in 15 of the 21 cases, each of which

ArcelorMittal Brasil appealed to the judicial instance. In March

2018, the administrative tribunal of the third instance found in

favor of ArcelorMittal Brasil sending the six other cases back to

the administrative tribunal of the second instance. After the

administrative tribunal of the second instance issued a partially

favorable ruling on these six cases in December 2019, related

only to the recognition of the limitation period of May 2005, a

further appeal to the administrative tribunal of the third instance

was filed. In July 2021, the third administrative instance denied

ArcelorMittal Brasil's appeal and upheld the tax assessments.

Following the conclusion of this proceeding at the administrative

level, in September 2021, ArcelorMittal Brasil appealed to the

judicial instance where all of the 21 cases now await a first

instance decision.

In 2011, ArcelorMittal Brasil received a tax assessment for

corporate income tax (known as IRPJ) and social contributions

on net profits (known as CSL) in relation to (i) the amortization

of goodwill on the acquisition of Mendes Júnior Siderurgia (for

the 2006 and 2007 fiscal years), (ii) the amortization of goodwill

arising from the mandatory tender offer ("MTO") made by

ArcelorMittal (ex-Mittal Steel N.V.) to minority shareholders of

Arcelor Brasil in connection with the two-step merger of Arcelor

and Mittal Steel N.V. (for the 2007 tax year), (iii) expenses

related to pre-export financing used to finance the MTO, which

were deemed by the tax authorities to be unnecessary for

ArcelorMittal Brasil since the expenses were incurred to buy

shares of its own company and (iv) CSL over profits of

controlled companies in Argentina and Costa Rica. The amount

claimed totals 387. On January 31, 2014, the administrative

tribunal of the first instance found in partial favor of ArcelorMittal

Brasil, reducing the penalty component of the assessment from,

according to ArcelorMittal Brasil’s calculations, 120 to 63 (as

calculated at the time of the assessment), while upholding the

remainder of the assessment. The Federal Revenue Service

appealed the administrative tribunal’s decision to reduce the

amount of the original penalty. ArcelorMittal Brasil also appealed

the administrative tribunal’s decision to uphold the tax

authority’s assessment (including the revised penalty

component). In September 2017, the administrative tribunal of

the second instance found largely in favor of the Federal

Revenue Service. In January 2018, ArcelorMittal Brasil filed a

motion for clarification of this decision. In February 2018, the

motion for clarification was rejected and, in March 2018, an

appeal was filed to the administrative tribunal of the third

instance.

In 2013, ArcelorMittal Brasil received a tax assessment in

relation to the 2008-2010 tax years for IRPJ and CSL in relation

to (i) the amortization of goodwill on the acquisition of Mendes

Júnior Siderurgia, Dedini Siderurgia and CST, (ii) the

335 Consolidated financial statements

amortization of goodwill arising from the MTO made by

ArcelorMittal (ex-Mittal Steel N.V.) to minority shareholders of

Arcelor Brasil in connection with the two-step merger of Arcelor

and Mittal Steel N.V. and (iii) CSL and IRPJ over profits of

controlled companies in Argentina, Costa Rica, Venezuela and

the Netherlands. The amount claimed totals 342. In October

2014, the administrative tribunal of the first instance found in

favor of the Federal Revenue Service and ArcelorMittal Brasil

filed its appeal in November 2014. In September 2017, the

administrative tribunal of the second instance found in favor of

the Federal Revenue Service. ArcelorMittal Brasil filed a motion

for clarification with respect to this decision, which was denied,

and thereafter filed an appeal to the administrative tribunal of

the third instance.

In April 2016, ArcelorMittal Brasil received a tax assessment in

relation to (i) the amortization of goodwill resulting from the MTO

made by ArcelorMittal (ex-Mittal Steel N.V.) to the minority

shareholders of Arcelor Brasil in connection with the two-step

merger of Arcelor and Mittal Steel N.V. in 2007 and (ii) the

amortization of goodwill resulting from ArcelorMittal Brasil’s

acquisition of CST in 2008. While the assessment, if upheld,

would not result in a cash payment as ArcelorMittal Brasil did

not have any tax liability for the fiscal years in question (2011

and 2012), it would result in a 59 financial impact arising from a

write off of net operating loss carry forwards with respect to the

2011-2012 tax year. In May 2016, ArcelorMittal Brasil filed its

defense, which was not accepted at the first administrative

instance. On March 10, 2017, ArcelorMittal Brasil filed an appeal

to the second administrative instance, which was rejected in

May 2019, filed a motion for clarification which was denied in

November 2019 and thereafter filed an appeal to the

administrative tribunal of the third instance.

In December 2018, ArcelorMittal Brasil received a tax

assessment of 94, which could have an additional 20 financial

impact arising from a write off of net operating loss carry forward

with respect to the 2013-2014 tax years, principally in relation to

the amortization of goodwill resulting from the MTO made by

ArcelorMittal (ex-Mittal Steel N.V.) to the minority shareholders

of Arcelor Brasil in connection with the two-step merger of

Arcelor and Mittal Steel N.V. in 2007. In January 2019,

ArcelorMittal Brasil filed a defense in the first administrative

instance, which issued an unfavorable decision in June 2019.

An appeal to the second administrative instance was filed in July

2019.

In December 2020, ArcelorMittal Brasil received a tax

assessment of 32, which could have an additional 43 financial

impact arising from a write off of net operating loss carry

forwards, with respect to the 2015-2016 tax years, related to the

amortization of goodwill resulting from the MTO made by

ArcelorMittal (ex-Mittal Steel N.V.) to the minority shareholders

of Arcelor Brasil in connection with the two-step merger of

Arcelor and Mittal Steel N.V. in 2007. ArcelorMittal Brasil filed its

defense in the first administrative instance in January 2021

which issued an unfavorable decision in August, 2021. An

appeal to the second administrative instance was filed in

September 2021.

In 2013, ArcelorMittal Brasil filed a lawsuit against the Federal

Revenue Service disputing the basis of calculation of a tax

called additional freight for the renewal of the Brazilian Merchant

Navy ("AFRMM"), amounting to 55. The dispute is related to the

inclusion of the unloading and land transport costs of the

imported goods after landing to calculate AFRMM. In June

2013, ArcelorMittal Brasil obtained a preliminary decision

allowing the Company not to pay such amount until a final

decision was rendered. In February 2017, ArcelorMittal Brasil

obtained a favorable decision at the judicial first instance which

was upheld by the Federal Court of Appeals in February 2019.

In July 2019, the Federal Revenue Service filed appeals with the

Superior Court of Justice and the Supreme Court. In February

2020, the appeal to the Supreme Court of Justice was

dismissed and, in July 2020, the Appeal to the Supreme Court

was dismissed. This decision is final and unappealable. In

November 2018, a related tax assessment was received from

the Federal Revenue Service claiming 18 as a penalty for

alleged failure to comply with formal requirements in the import

declarations delivered by the Company in the years 2013-2018,

which were the subject matter of the preliminary decision of

June 2013. In December 2018, ArcelorMittal Brasil presented its

defense in the first administrative instance, which in June 2019

decided in ArcelorMittal Brasil’s favor. This decision is subject to

appeal. A further related tax assessment was received in

September 2018 from the Federal Revenue Service claiming 0.2

as a penalty for alleged failure to comply with formal

requirements in the import declarations delivered by the

Company in the period between September and November

2013. In October 2018 ArcelorMittal Brasil presented its defense

in the first administrative instance, and a decision is pending.

In the period from 2014 to 2018, ArcelorMittal Brasil received six

tax assessments from the Federal Revenue Service in the

amount of 34 disputing its use of credits for PIS and COFINS

social security taxes in 2010, 2011 and 2013. The dispute

relates to the concept of production inputs in the context of

these taxes. In the first case, the administrative tribunal of the

first instance found partially in favor of ArcelorMittal Brasil. The

decision was upheld in the administrative tribunal of the second

instance and ArcelorMittal Brasil filed an appeal to the

administrative tribunal of the third instance which ruled partially

in favor of ArcelorMittal Brasil in May 2019. In January 2020, the

case was sent back to the Federal Revenue which is verifying

the extent of the administrative tribunal of the third instance’s

decision in order to proceed with the write-off of amounts due. In

August 2020, the tax assessment was reduced by 4, reflecting

Consolidated financial statements 336

(millions of U.S. dollar, except share and per share data)

the partially favorable decision. The remaining amount of 12 will

be discussed at the judicial level. In the second case, the

administrative tribunal of the first instance found partially in favor

of ArcelorMittal Brasil and an appeal has been filed to the

administrative tribunal of the second instance. In the third case,

the administrative tribunal of the first instance upheld the tax

assessment, and ArcelorMittal Brasil appealed to the

administrative tribunal of the second instance. In the fourth and

fifth cases, ArcelorMittal Brasil has filed its defenses to the

administrative tribunal of the first instance. In November 2020, a

partially favorable decision was issued in the fifth case and an

appeal was presented. In the fourth case, in March 2021, a

partially favorable decision was issued and an appeal has been

filed to the second administrative instance. In the sixth case, the

administrative tribunal of the first instance upheld the tax

assessment, and ArcelorMittal Brasil appealed to the

administrative tribunal of the second instance. In March 2018,

the Superior Court decided a leading case, not involving

ArcelorMittal Brasil, that established that the restrictive concept

of inputs adopted by the tax authorities is illegal and that credits

over inputs must be accepted on the basis of the criteria of

essentiality or relevance towards the production process of each

taxpayer. In September 2018, the Federal Union published an

internal orientation for its attorneys, expressing a restrictive view

of the Superior Court's decision and determining that each

individual case would be analyzed in order to decide whether

the items are essential or not. However, this federal orientation

has not been followed in unrelated cases, and therefore

ArcelorMittal Brasil's cases may be submitted for review by the

Federal Union Attorney's office before further decisions are

taken or may be taken to trial without such review.

In May 2014, ArcelorMittal Comercializadora de Energia

received a tax assessment from the state of Minas Gerais

alleging that the Company did not correctly calculate tax credits

on interstate sales of electricity from February 2012 to

December 2013. The amount claimed totals 31. ArcelorMittal

Comercializadora de Energia filed its defense in June 2014.

Following an unfavorable administrative decision in November

2014, ArcelorMittal filed an appeal in December 2014. In March

2015, there was a further unfavorable decision at the second

administrative level. Following the conclusion of this proceeding

at the administrative level, the Company received the tax

enforcement notice in December 2015 and filed its defense in

February 2016. In April 2016, ArcelorMittal Comercializadora de

Energia received an additional tax assessment in the amount, of

44, after taking account of a reduction of fines mentioned below

regarding the same matter, for infractions which allegedly

occurred during the 2014 to 2015 period, and filed its defense in

May 2016. In May 2017, there was a further unfavorable

decision at the second administrative level in respect of the tax

assessment received in April 2016. In June 2017, ArcelorMittal

Comercializadora de Energia filed an appeal to the second

administrative instance. This appeal was rejected in August

2017. In October and November 2017, the Company appealed

in relation to both tax assessments to the judicial instance. In

November 2017, the Company received a notice from the tax

authority informing it of the reduction of the fines element by 12,

due to the retroactive application of a new law. In February

2019, due to the retrospective application of a new law, a

reduction of the fine element of 7 was finalized in the first case.

In the period from May to July 2015, ArcelorMittal Brasil

received nine tax assessments from the state of Rio Grande do

Sul alleging that the Company, through its branches in that

state, had not made advance payments of ICMS on sales in that

state covering the period from May 2010 to April 2015. The

amount claimed totals 67. The administrative tribunal of the first

instance upheld the tax assessments in each of the nine cases,

and ArcelorMittal Brasil appealed each of the administrative

tribunal’s decisions. Each case was decided unfavorably to

ArcelorMittal Brasil at the administrative tribunal of the second

instance, and ArcelorMittal Brasil appealed the cases to the

judicial instance.

On May 17, 2016, ArcelorMittal Brasil received a tax

assessment from the state of Santa Catarina in the amount of

96 alleging that it had used improper methods to calculate the

amount of its ICMS credits. ArcelorMittal Brasil filed its defense

in July 2016. In December 2016, ArcelorMittal Brasil received an

unfavorable decision at the first administrative level, in respect

of which it filed an appeal. In March 2018, the administrative

tribunal of the second instance found against ArcelorMittal Brasil

and, in April 2018, ArcelorMittal Brasil filed an appeal to the

administrative tribunal of the third instance. In December 2019,

the tax assessment was upheld by the administrative tribunal of

the third instance. In January 2020, ArcelorMittal Brasil filed a

motion for clarification which was rejected in August 2020.

ArcelorMittal Brasil appealed to the judicial instance in

November 2020.

Mexico

In 2015, the Mexican Tax Administration Service issued a tax

assessment to ArcelorMittal Mexico, alleging that ArcelorMittal

Mexico owes 184 with respect to 2008, principally due to

improper interest deductions relating to certain loans, and

unpaid corporate income tax for interest payments that the tax

authority has categorized as dividends. In November 2015,

ArcelorMittal Mexico filed an administrative appeal in respect of

this assessment, which was dismissed by the tax authority. In

November 2017, ArcelorMittal Mexico filed an annulment

complaint before a Federal Administrative and Tax Justice

Court, which has not been determined.

337 Consolidated financial statements

With respect to 2007 and 2009, the Mexican Tax Administration

Service also challenged the interest deduction related to the

aforementioned loans and issued tax assessments to

ArcelorMittal Mexico for 23 and 28, respectively. In November

2018, a Federal Administrative and Tax Justice Court ruled

against the annulment complaint filed by ArcelorMittal Mexico in

relation to the 2007 tax assessment and in December 2018,

ArcelorMittal Mexico filed a constitutional claim before the

Collegiate Tribunal For Administrative Matters, which was

rejected in June 2019. A review appeal was filed in July 2019

and rejected in August 2019. An extraordinary appeal of

constitutional review was filed against this decision in

September 2019 before the Supreme Court of Justice. In

November 2019, the Court dismissed the extraordinary appeal

of constitutional review confirming the earlier decision in favor of

the tax authorities. No further appeal is possible. With respect to

the 2009 tax assessment, in November 2016 ArcelorMittal

Mexico filed an administrative appeal before the Administrative

Authority on Federal Tax Matters, which was rejected in June

2020. In September 2020, an annulment complaint was filed

before the Federal Administrative and Tax Justice Court. In

December 2021, a reduction of the penalty component of the tax

assessment was requested, an amount of 20 was paid and the

Court issued a dismissal ruling in respect of this case, thereby

closing the proceedings.

In 2013, the Mexican Tax Administration Service issued a tax

assessment to ArcelorMittal Las Truchas, alleging that

ArcelorMittal Las Truchas owes 89 in respect of (i) non-payment

of withholding tax on capitalized interest, (ii) non-deduction of

accrued interest regarding certain loans, and (iii) reduction of

the taxable basis of assets in 2007. In 2015, ArcelorMittal Las

Truchas filed an administrative appeal in respect of the

aforementioned assessment, which the tax authority dismissed.

In October 2015, ArcelorMittal Las Truchas filed an annulment

complaint before the Federal Administrative and Tax Justice

Court, which ruled partially in favor of ArcelorMittal Las Truchas

in October 2018 by declaring the illegality of item (i). The tax

authority filed an application for judicial review in January 2019

and in March 2020, the Court upheld the ruling in favor of

ArcelorMittal Las Truchas regarding item (i) which decision is

definitive. ArcelorMittal Las Truchas also filed a nullity lawsuit to

challenge the ruling in respect of items (ii) and (iii), and, in June

2020, the Court upheld the rulings of the Tax Court. ArcelorMittal

Las Truchas promptly thereafter submitted an extraordinary

appeal for constitutional review before the Supreme Court of

Justice regarding items (ii) and (iii).

In October 2018, the Mexican Tax Administration Service issued

a tax assessment to ArcelorMittal Las Truchas, alleging that

ArcelorMittal Las Truchas owes 93 with respect to 2013 due to:

(i) improper interest deductions relating to certain loans and (ii)

non-deduction of advanced rent payments. In November 2018,

ArcelorMittal Las Truchas filed an administrative appeal before

the Administrative Authority on Federal Tax Matters, which was

partially rejected in June 2019 and is being appealed.

Ukraine

In October 2019, ArcelorMittal Kryvyi Rih received tax orders

from Ukrainian tax authorities covering the findings of a tax audit

for the period from 2015 through the first quarter of 2019 which

claimed the company owes additional taxes of 278 for that

period. ArcelorMittal Kryvyi Rih appealed these orders to the tax

authorities resulting in a significant reduction of the amounts

claimed. In January 2020, ArcelorMittal Kryvyi Rih filed three

legal actions with the Kyiv District Administrative Court seeking

to cancel the remaining additional charges amounting to 128.

The three cases were later merged into one case and moved to

the Dnipro District Administrative Court. In October 2020,

ArcelorMittal Kryvyi Rih commenced a separate lawsuit seeking

cancellation of additional tax charges (excise duty, VAT, CIT,

fines) of 89 based on the results of a full-scope tax audit

covering 2015 through the first quarter of 2019. This separate

lawsuit was closed in May 2021 at ArcelorMittal Kryvyi Rih’s

request.

In August 2021, ArcelorMittal Kryvyi Rih commenced court

proceedings to dispute the assessment by Ukrainian tax

authorities of a subsoil usage rent/tax (in the amount of

approximately 104) on production activities by ArcelorMittal

Kryvyi Rih for the period from January 2015 to March 2019. In

November 2021, the court found that the tax notice decision was

illegal and cancelled it. The Ukrainian tax authorities and the

Prosecutor’s office appealed this decision. Subsequently, (a) on

November 17, 2021, the Prosecutor General’s office and the

Security Service of Ukraine notified the Chief Financial Officer of

ArcelorMittal Kryvyi Rih that he had been placed under an

investigation on suspicion of alleged tax evasion and official

forgery, and (b) on January 4, 2022 the Prosecutor General’s

office, acting pursuant to a ruling of the Shevchenkivsky District

Court of Kyiv dated November 30, 2021 blocked the accounts of

ArcelorMittal Kryvyi Rih with three banks in Ukraine.

ArcelorMittal Kryvyi Rih appealed the blocking of these

accounts; as of the date of these financial statements, by court

order the restrictions on two of the three accounts have been

partially lifted to allow the payment of wages, taxes and other

mandatory payments.

Kazakhstan

In November 2020, ArcelorMittal Temirtau filed a lawsuit in the

Astana investment court against the State revenue committee.

The dispute is related to a tax claim by the said committee

resulting from an audit for the years 2013-2017. The court

hearings started in February 2021 and resulted in a June 2021

judgment against ArcelorMittal Temirtau for 45 for tax and late

payment interest as estimated by the authorities in their

notification of September 28, 2020. ArcelorMittal Temirtau

Consolidated financial statements 338

(millions of U.S. dollar, except share and per share data)

appealed this decision with the Court of second instance, which

confirmed the judgment in September 2021. The judgment

came into force and was satisfied. In November 2021,

ArcelorMittal filed an appeal with the Court of Cassation which in

January 2022, the Court declined to hear bringing the case to an

end.

In January 2022, ArcelorMittal Temirtau filed a lawsuit in the

Nur-Sultan (Astana) administrative court against the State

revenue committee.The dispute is related to a tax claim by the

said committee in the amount of 63 resulting from an audit for

the years 2018-2019. In January 2022, ArcelorMittal Temirtau

withdrew the lawsuit and is paying the tax due with interest and

the applicable administrative penalty.

Competition/Antitrust Claims

ArcelorMittal is a party to various competition/antitrust claims. As

of December 31, 2021, ArcelorMittal had recorded a non-

material amount provision in respect of such claims. Set out

below is a summary description of competition/antitrust claims

(i) that constitute a contingent liability, (ii) that were resolved in

2021 or (iii) that were resolved and had a financial impact in

2020 or 2019, in each case involving amounts deemed material

by ArcelorMittal. The Company is vigorously defending against

each of the pending claims discussed below.

Brazil

In September 2000, two construction trade organizations filed a

complaint with Brazil’s Administrative Council for Economic

Defense (“CADE”) against three long steel producers, including

ArcelorMittal Brasil. The complaint alleged that these producers

colluded to raise prices in the Brazilian rebar market, thereby

violating applicable antitrust laws. In September 2005, CADE

issued its final decision against ArcelorMittal Brasil, imposing a

fine of 51. ArcelorMittal Brasil appealed the decision to the

Brazilian Federal Court. In September 2006, ArcelorMittal Brasil

offered a guarantee letter and obtained an injunction to suspend

enforcement of this decision pending the court’s judgment. In

September 2017, the Court found against ArcelorMittal Brasil. In

October 2017, ArcelorMittal Brasil filed a motion for clarification

of this decision, which was dismissed. In December 2017,

ArcelorMittal Brasil filed an appeal to the second judicial

instance.

There is also a related class action commenced by the Federal

Public Prosecutor of the state of Minas Gerais against

ArcelorMittal Brasil for damages in an amount of 59 based on

the alleged violations investigated by CADE.

A further related lawsuit was commenced in February 2011 by

four units of Sinduscons, a civil construction trade organization,

in federal court in Brasilia against, inter alia, ArcelorMittal Brasil

claiming damages based on an alleged cartel in the rebar

market as investigated by CADE and as noted above.

Spain

In November 2018, the Comision Nacional de los Mercados y la

Competencia (“CNMC”), the Spanish competition authority,

carried out a dawn raid at the offices of ArcelorMittal in

Villaverde (Madrid) in relation to a preliminary investigation

concerning alleged coordination between competitors to fix the

purchase price of scrap. In March 2020, further dawn raids were

carried out extending the investigation to the sale of long

products. In July 2020, CNMC announced that they were

commencing a formal sanctioning procedure against

ArcelorMittal Spain Holding ("AMSH") and its subsidiaries

ArcelorMittal Madrid, ArcelorMittal Comercial Perfiles España,

ArcelorMittal Aceralia Basque Holding (“AMABH”), and Arcelor

Mittal España (and other companies not part of ArcelorMittal

group) in respect of purchases of scrap and sale of finished

steel products, especially long products. In August 2021, the

CNMC issued a statement of objections to AMSH and AMABH,

among other parties. The CNMC stated that it had found

evidence of a purported cartel in terms of the purchase of scrap,

while noting that it had not found evidence of infringement with

regard to the sales of long products. The infringement with

respect to the scrap was alleged to have taken place from 2009

to 2020 and is attributed to AMSH and AMABH. In September

2021, AMSH and AMABH responded to the allegations and

objected to the claims of infringement. In November 2021, the

CNMC notified AMABH and AMSH of its resolution proposal to

be submitted to the Council proposing a sanction for AMABH,

with joint and several liability for AMSH, of 3 (€2.7 million which

is 6.5% of a turnover figure of €42.3 million) and notified AMSH

and AMABH that it had restricted the alleged infringement due to

certain contacts held from January to August 2018. On

December 16, 2021, AMABH filed its challenge to the resolution

proposal, together with an economic report as proof of market

structure. In March 2022, the CNMC decided on a sanction for

AMABH of 14 (€12.1 million based on a turnover which CNMC

determined as €226.6 million). AMABH has 2 months from the

date of this decision to appeal to the Spanish Court.

Other Legal Claims

ArcelorMittal is a party to various other legal claims. As of

December 31, 2021, ArcelorMittal had recorded provisions of

244 for other legal claims in respect of which it considers the

risk of loss to be probable. Set out below is a summary

description of the other legal claims (i) in respect of which

ArcelorMittal had recorded a provision as of December 31,

2021, (ii) that constitute a contingent liability, (iii) that were

resolved in 2021, or (iv) that were resolved and had a financial

impact in 2020 or 2019, in each case involving amounts deemed

material by ArcelorMittal. The Company is vigorously defending

against each of the claims discussed below that remain

pending.

339 Consolidated financial statements

Argentina

Over the course of 2007 to 2021, the Argentinian Customs

Office Authority (“Aduana”) notified Acindar, of certain inquiries

that it was conducting with respect to prices declared by Acindar

related to iron ore imports. The Customs Office Authority was

seeking to determine whether Acindar incorrectly declared

prices for iron ore imports from several different Brazilian and

Bolivian suppliers and from ArcelorMittal Sourcing originally on

39 different claims concerning several shipments made between

2002 and 2014. The investigations are subject to the

administrative procedures of the Customs Office Authority and

are at different procedural stages depending on the filing date of

the investigation. In March 2018, the Customs Office Authority

issued a general instruction that ordered customs to withdraw

current claims related to the difference between import prices in

Argentina and export prices of iron ore when exiting Brazil,

which has led to a reduction in the number of claims and

amounts claimed against Acindar. As of December 2021, the

aggregate amount claimed by the Customs Office Authority in

respect of all iron ore shipments is 119 in 22 different cases. Of

these 22 cases, 7 are still in the administrative branch of the

Customs Office Authority and the other 15 cases, in which the

administrative branch of the Customs Office Authority ruled

against Acindar, have been appealed to the Argentinian National

Fiscal Court.

Brazil

In 2015, the SINDIMETAL (employees’ union) filed a lawsuit

against ArcelorMittal Brasil to annul all the collective labor

agreements related to 12-hour work shifts. In 2018, at the Labor

Court of Vitória/ES, the case was dismissed. SINDIMETAL

subsequently appealed to the Regional Labor Court of Appeals,

which in 2019 reversed the ruling of the first judicial instance

and ordered the payment of overtime wages, based on the

argument that the 12-hour working day was unconstitutional. In

September 2019, ArcelorMittal Brasil filed an appeal with the

Superior Labor Court on the grounds of (i) the constitutionality of

collective labor agreements; (ii) ArcelorMittal Brasil was obliged

to maintain the 12-hour work shift in the period between

November 2011 and November 2012 by another judicial

decision; and (iii) the Supreme Court has ordered the

suspension of legal proceedings in which there is a discussion

about the validity of collective labor agreements due to a

pending decision in a case not involving ArcelorMittal Brasil with

binding precedential value on similar cases. This decision

impacts a group of approximately 2,500 employees.

In April 2017, a shareholder in Siderúrgica Três Lagoas

(“SITREL”) (of which ArcelorMittal Brasil is the other

shareholder), commenced an arbitration against Votorantim

Siderurgia S.A. (which subsequently merged into ArcelorMittal

Brasil) and SITREL with the Center for Arbitration and Mediation

of the Chamber of Commerce Brazil-Canada (CAM-CCBC). The

dispute concerns a provision in SITREL’s joint venture

agreement relating to the formula used to determine the selling

price for steel billets supplied by ArcelorMittal Brasil to SITREL

from January 2013 onwards. The shareholder has alleged that

the steel billets were overpriced and is seeking compensation

for overpaid amounts on both a retrospective and prospective

basis, with the initial amount claimed totaling 33. In October

2021, the CAM-CCBC decided against ArcelorMittal Brasil and

awarded damages that are likely to exceed 50. In November

2021, ArcelorMittal Brasil filed a motion for clarification and

disqualification request to the CAM-CCBC in relation to a

conflict of interest concerning the other party's appointed

arbitrator. The CAM-CBCC issued a stay on the clarification

request, pending resolution on the disqualification challenge. In

December 2021, an Independent Arbitrators Committee was

formed to decide on the disqualification claim.

Canada

In April 2011, a proceeding was commenced before the Ontario

(Canada) Superior Court of Justice under the Ontario Class

Proceedings Act, 1992, against ArcelorMittal, Baffinland, and

certain other parties relating to the January 2011 take-over of

Baffinland by ArcelorMittal, Nunavut Iron Ore Holdings and

1843208 Ontario Inc. The action alleges that the tender offer

document contained certain misrepresentations and seeks

damages in an aggregate amount of 764 (CAD 1 billion) or

rescission of the transfer of the Baffinland securities by

members of a class comprised of all Baffinland securities

holders who tendered their Baffinland securities, and whose

securities were taken up, in connection with the take-over

between September 22, 2010 and February 17, 2011, or

otherwise disposed of their Baffinland securities on or after

January 14, 2011. The class certification hearings were held in

January 2018, and the court certified the class in a decision

dated May 18, 2018. The court also certified the statutory

circular misrepresentation, insider trading, unjust enrichment

and oppression claims. The court included in the class persons

who tendered their Baffinland securities to the take-over bid

and, for purposes of the oppression claims only, persons who

sold their Baffinland securities in the secondary market after

January 13, 2011. The court excluded from the class those

persons who disposed of their Baffinland securities pursuant to

a court ordered plan of arrangement. In June 2019, the parties

entered into a settlement agreement in which the defendants

agreed to pay 5 (CAD 6.5 million) to the class subject to the

approval of the court. The settlement contained a threshold for

opt outs which, if exceeded, gave any of the defendants the

right to terminate the settlement. The settlement was approved

by the Ontario Court in September 2019 and, following the

expiry of the period for any appeal, is now final.

Consolidated financial statements 340

(millions of U.S. dollar, except share and per share data)

Italy

In January 2010, ArcelorMittal received notice of a claim filed by

Finmasi S.p.A. relating to a memorandum of agreement (“MoA”)

entered into between ArcelorMittal Distribution Services France

(“AMDSF”) and Finmasi in 2008. The MoA provided that AMDSF

would acquire certain of Finmasi’s businesses for an amount not

to exceed 114, subject to the satisfaction of certain conditions

precedent, which, in AMDSF’s view, were not fulfilled. Finmasi

sued for (i) enforcement of the MoA, (ii) damages of 17 to 29 or

(iii) recovery costs plus quantum damages for Finmasi’s alleged

lost opportunity to sell to another buyer. In September 2011, the

court rejected Finmasi’s claims other than its second claim. The

court appointed an expert to determine the quantum of

damages. In May 2013, the expert’s report was issued and

valued the quantum of damages in the range of 46 to 73.

ArcelorMittal appealed the decision on the merits. In May 2014,

the Court of Appeal issued a decision rejecting ArcelorMittal’s

appeal. On June 20, 2014, ArcelorMittal filed an appeal of the

Court of Appeal’s judgment with the Italian Court of Cassation.

On April 11, 2018, the Court of Cassation rejected the appeal on

the merits and upheld the Court of Appeal’s decision. On

December 18, 2014, the Court of Milan issued a decision on the

quantum of the damages and valued the quantum of damages

in the sum of 29 plus interest. In June 2015, both parties served

appeals of the decision on the quantum, with ArcelorMittal also

seeking the suspension of the enforceability of the decision. On

July 1, 2015, Finmasi formally notified AMDSF the declaration of

enforcement of the decision of December 18, 2014. On July 28,

2015, AMDSF filed an appeal against such declaration with the

Court of Appeal of Reims in France. At a hearing on December

1, 2015, the Italian Court of Appeal accepted the suspension of

the enforcement of the decision of December 18, 2014,

following the agreement of AMDSF to provide a guarantee for its

value. In March 2016, on the joint application of the parties, the

Court of Appeal of Reims ordered the suspension of the

proceedings. On July 19, 2018, the Court of Appeal upheld the

Court of Milan’s decision on quantum dated December 18,

2014. In September 2018, ArcelorMittal filed an appeal to the

Court of Cassation. In January 2019, Finmasi called on the

AMDSF guarantee issued in the context of the enforcement

proceedings that were suspended in 2015. In August 2020, the

Court of Cassation quashed the Court of Appeal decision on

quantum and referred the case back to the Court of Appeal for

further review of the quantum in respect of which Finmasi

formally served their writ of summons in October 2020 asking

the Court of Appel to confirm the first instance judgment on

quantum. Following the decision of the Court of Cassation,

Finmasi has repaid half of the amount of the guarantee that was

called and has agreed to provide a bank guarantee for the

remainder.

On November 4, 2019, ArcelorMittal sent to the Commissioners

governing the Ilva insolvency procedure (the “Commissioners”)

a notice to withdraw from or terminate the lease agreement with

a conditional obligation to purchase the business of Ilva and

certain of its subsidiaries. This notice was based, among other

things, on provisions of the agreement that allow withdrawal in

the event that a new law affects it’s environmental plan for the

Taranto plant in such a way that materially impairs the ability of

ArcelorMittal Italia to operate the plant or implement its industrial

plan; these provisions were triggered following the Italian

Parliament’s removal, on November 3, 2019, of the legal

protection necessary for ArcelorMittal Italia to implement its

environmental plan without risk of criminal liability. In response,

the Commissioners filed suit in Milan seeking an injunction to

prevent ArcelorMittal's withdrawal and termination of the

agreement. Following negotiation between the parties, on March

4, 2020, ArcelorMittal and the Commissioners entered into a

settlement agreement whereby ArcelorMittal agreed to revoke

its notice to withdraw from the original Ilva lease agreement and

the Ilva Commissioners agreed to withdraw their request for an

injunction.

In addition, following a complaint filed by the Commissioners, in

mid-November 2019, prosecutors in Milan and Taranto opened

investigations into potential violations of numerous criminal

laws. Following the (i) search decrees issued by the Milan and

Taranto Prosecution Offices and ensuing seizures of documents

in November 2019, and (ii) restitution decree issued by the

Milan Prosecution Office in September 2020. The Milan Public

Prosecutors closed one of the investigations which began in

November 2019 concluding that there was no evidence to

support allegations of violations of numerous criminal laws

relating principally to ArcelorMittal's withdrawal from the lease

agreement for the Ilva plants and asked the judge for

preliminary investigations to close the case. ArcelorMittal Italia

(renamed Acciaierie d’Italia in April 2021 after the formation of a

partnership with Invitalia see note 2.3.1) has not been notified of

further developments in the other pending criminal cases. It is

not possible to predict the timing or outcome and is not possible

to foresee any charges for Acciaierie d'Italia.

In February 2020, the Mayor of Taranto issued an order to

ArcelorMittal Italia related to certain emissions events that

appear to have occurred in August 2019 and on February 22

and 23, 2020 and that allegedly concern the Taranto plant. The

order required ArcelorMittal Italia to identify the responsible

installations in 30 days and eliminate any anomalies within the

subsequent 30 days or, if necessary, shut down certain

installations relating to such emissions events (provided that, if

no such identification was completed, the shut down would

extend to substantially the entire "hot area" of the plant). The

Mayor of Taranto further alleged that adequate responses

concerning such emissions were not received from the Ministry

of the Environment. In response to this order, ArcelorMittal Italia

filed an appeal on the merits and an application for interim

341 Consolidated financial statements

measures to stay the order with the Regional Administrative

Court in Lecce. In April 2020, the court upheld ArcelorMittal

Italia’s application for interim measures and suspended the

Mayor of Taranto’s order until a further hearing in October 2020.

The interim order further required the Ministry of the

Environment to file reports concerning the emissions events

which served as the basis for the Mayor of Taranto’s order. After

the Ministry provided such reports, the October 2020 hearing

was postponed until December 15, 2020, at which hearing the

Court confirmed the suspension of the order and scheduled the

hearing for the discussion of the merits for January 27, 2021.

On February 13, 2021, the Court rejected ArcelorMittal Italia’s

appeal. On February 18, 2021, ArcelorMittal Italia filed an

appeal with the State Council (the highest appellate body in this

case) on the merits and also requested an ex parte order to

suspend the judgment pending a ruling on the merits. On

February 19, 2021, the State Council (i) found that the 30-day

period during which ArcelorMittal Italia would have to shut down

installations has not yet started and would commence only on

March 16, 2021, i.e., after the hearing to discuss the request for

interim measures (which it set for March 11, 2021) and therefore

found a lack at the time of demonstrable “extreme gravity and

urgency” necessary for interim measures, and (ii) set a hearing

date of May 13, 2021 in respect of the merits. On June 23,

2021, the judgment of the Council of State was published,

upholding Acciaierie d'Italia’s appeal, setting aside the Mayor of

Taranto’s order as unlawful on various grounds, and thereby

enabling Acciaierie d'Italia to continue operating the Taranto

plant.

Luxembourg

In June 2012, the Company received writs of summons in

respect of claims made by 59 former employees of ArcelorMittal

Luxembourg. The claimants allege that they are owed

compensation based on the complementary pension scheme

that went into effect in Luxembourg in January 2000. The

aggregate amount claimed by such former employees (bearing

in mind that other former employees may bring similar claims) is

67. Given the similarities in the claims, the parties agreed to limit

the pending proceedings to four test claims. In April 2013, the

Esch-sur-Alzette labor court rejected two of these test claims.

The relevant plaintiffs are appealing these decisions. In

November 2013, the Luxembourg city labor court rejected the

two other test claims, which were appealed but were terminated

by the court in November 2021.

France

Certain subsidiaries of the ArcelorMittal group were parties to

proceedings, dating from 2010, against Engie and Engie

Thermique France which claimed damages in the amount of 187

for an alleged wrongful termination of a contract for the

transformation of steel production gas into electricity. The

ArcelorMittal subsidiaries had filed a counterclaim in the amount

of 232. The contract had been entered into in 2006 for a term of

20 years. ArcelorMittal Méditerranée terminated it in July 2010

on the basis that Engie was solely responsible for the delay in

the commissioning of the power plant (which suffered from

significant malfunctions) constructed for the transformation of

steel production gas into electricity. Engie claimed that

ArcelorMittal was in breach of the contract at the time of the

termination due to certain alleged issues with the furnishing and

quality of its steel production gas, and therefore unable to

terminate the contract based on the sole breaches of Engie. The

case was heard before the Commercial Court of Nanterre. In

November 2019, the Appeals Court of Versailles determined

(having been asked to decide whether a decision by the

Commercial Court of Nanterre was in fact an official, formal

judgment) that the earlier decision of the Commercial Court of

Nanterre was the official first instance decision of the court. As a

result, ArcelorMittal was ordered to pay damages of 3 plus

interest. In February 2020, Engie filed an appeal. A settlement

agreement was signed in July 2021, bringing the litigation to an

end.

Retired and current employees of certain French subsidiaries of

the former Arcelor have initiated lawsuits to obtain

compensation for asbestos exposure in excess of the amounts

paid by French social security (“Social Security”). Asbestos

claims in France initially are made by way of a declaration of a

work-related illness by the claimant to the Social Security

authorities resulting in an investigation and a level of

compensation paid by Social Security. Once the Social Security

authorities recognize the work-related illness, the claimant,

depending on the circumstances, can also file an action for

inexcusable negligence (faute inexcusable) to obtain additional

compensation from the company before a special tribunal.

Where procedural errors are made by Social Security, it is

required to assume full payment of damages awarded to the

claimants. Due to fewer procedural errors made by Social

Security, changes in the regulations and, consequently, fewer

rejected cases, ArcelorMittal has been required to pay some

amounts in damages since 2011.

The number of claims outstanding for asbestos exposure at

December 31, 2021 was 300 as compared to 324 at

December 31, 2020. The range of amounts claimed for the year

ended December 31, 2021 was $22,000 to $680,000. The

aggregate costs and settlements for the year ended

December 31, 2021 were 5.48, of which 0.22 represented legal

fees and 5.26 represented damages paid to the claimant. The

aggregate costs and settlements for the year ended

December 31, 2020 were 4.79, of which 0.2 represented legal

fees and 4.59 represented damages paid to the claimant.

Consolidated financial statements 342

(millions of U.S. dollar, except share and per share data)

Minority Shareholder Claims Regarding the Exchange Ratio in

the Second-Step Merger of ArcelorMittal into Arcelor

ArcelorMittal is the company that results from the acquisition of

Arcelor by Mittal Steel N.V. in 2006 and a subsequent two-step

merger between Mittal Steel and ArcelorMittal and then

ArcelorMittal and Arcelor. Following completion of this merger

process, several former minority shareholders of Arcelor or their

representatives brought legal proceedings regarding the

exchange ratio applied in the second-step merger between

ArcelorMittal and Arcelor and the merger process as a whole.

ArcelorMittal believes that the allegations made and claims

brought by such minority shareholders are without merit and that

the exchange ratio and merger process complied with the

requirements of applicable law, were consistent with previous

guidance on the principles that would be used to determine the

exchange ratio in the second-step merger and that the merger

exchange ratio was relevant and reasonable to shareholders of

both merged entities.

Set out below is a summary of ongoing matters in this regard.

Several other claims brought before other courts and regulators

were dismissed and are definitively closed.

On January 8, 2008, ArcelorMittal received a writ of summons

on behalf of four hedge fund shareholders of Arcelor to appear

before the civil court of Luxembourg. The summons was also

served on all natural persons sitting on the Board of Directors of

ArcelorMittal at the time of the merger and on the Significant

Shareholder. The plaintiffs alleged in particular that, based on

Mittal Steel’s and Arcelor’s disclosure and public statements,

investors had a legitimate expectation that the exchange ratio in

the second-step merger would be the same as that of the

secondary exchange offer component of Mittal Steel’s June

2006 tender offer for Arcelor (i.e., 11 Mittal Steel shares for 7

Arcelor shares), and that the second-step merger did not comply

with certain provisions of Luxembourg company law. They

claimed, inter alia, the cancellation of certain resolutions (of the

Board of Directors and of the Shareholders meeting) in

connection with the merger, the grant of additional shares, or

damages in an amount of 221. By judgment dated November

30, 2011, the Luxembourg civil court declared all of the plaintiffs’

claims inadmissible and dismissed them. The judgment was

appealed in May 2012. By judgment dated February 15, 2017,

the Luxembourg Court of Appeal declared all but one of the

plaintiffs’ claims inadmissible, remanded the proceedings on the

merits to the lower court with respect to the admissible claimant

and dismissed all other claims. In June 2017, the plaintiffs filed

an appeal of this decision to the Court of Cassation. The Court

of Cassation confirmed the Court of Appeal’s judgment on May

18, 2018. The admissible claimant finally withdrew its claims

before the lower court and by judgment dated January 5, 2022,

the civil court of Luxembourg acknowledged the withdrawal of

the claims without prejudice and ended the procedure.

On May 15, 2012, ArcelorMittal received a writ of summons on

behalf of Association Actionnaires d'Arcelor (“AAA”), a French

association of former minority shareholders of Arcelor, to appear

before the civil court of Paris. In such writ of summons, AAA

claimed (on grounds similar to those in the Luxembourg

proceedings summarized above) inter alia damages in a

nominal amount and reserved the right to seek additional

remedies including the cancellation of the merger. The

proceedings before the civil court of Paris were stayed, pursuant

to a ruling of such court on July 4, 2013, pending a preparatory

investigation (instruction préparatoire) by a criminal judge

magistrate (juge d’instruction) triggered by the complaints

(plainte avec constitution de partie civile) of AAA and several

hedge funds (who quantified their total alleged damages at 282),

including those who filed the claims before the Luxembourg

courts described (and quantified) above. The dismissal of

charges (non-lieu) ending the preparatory investigation became

final in March 2018. On March 6, 2020 AAA revived its claim

before the civil court of Paris on grounds similar to those of the

Luxembourg civil claims summarized above, on its behalf and

on behalf of the hedge funds who had also filed a criminal

complaint, as well as two new plaintiffs. The complaint filed by

AAA quantifies the total damages claimed at 442 (€390 million)

(including the claims before the Luxembourg courts described

above).

9.4 Commitments

December 31,

2021

2020

Purchase commitments

13,509

13,047

Guarantees, pledges and other collateral

8,003

8,632

Capital expenditure commitments

330

354

Other commitments

1,576

3,143

Total

23,418

25,176

Purchase commitments

Purchase commitments consist primarily of major agreements

for procuring iron ore, coking coal, coke and hot metal. The

Company also has a number of agreements for electricity,

industrial and natural gas, scrap and freight. In addition to those

purchase commitments disclosed above, the Company enters

into purchasing contracts as part of its normal operations which

have minimum volume requirements but for which there are no

take-or-pay or penalty clauses included in the contract. The

Company does not believe these contracts have an adverse

effect on its liquidity position.

Purchase commitments included commitments given to

associates for 1,562 and 1,276 as of December 31, 2021 and

2020, respectively. Purchase commitments given to associates

included 819 and 561 as of December 31, 2021 and 2020,

respectively, related to the gas supply agreement with Kryvyi

343 Consolidated financial statements

Rih Industrial Gas. Purchase commitments included

commitments given to joint ventures for 1,140 and 1,570 as of

December 31, 2021 and 2020, respectively. Purchase

commitments given to joint ventures included 611 and 737

related to Tameh and 515 and 604 related to Enerfos as of

December 31, 2021 and 2020, respectively.

Guarantees, pledges and other collateral

Guarantees related to financial debt and credit lines given on

behalf of third parties were 146 and 150 as of December 31,

2021 and 2020, respectively. Additionally, guarantees of 12 and

nil were given on behalf of associates and guarantees of 4,295

and 4,477 were given on behalf of joint ventures as of

December 31, 2021 and 2020, respectively.

Guarantees given on behalf of joint ventures included 279 and

226 on behalf of Calvert, 175 and 347 on behalf of Al Jubail and

323 and 242 in relation to outstanding lease liabilities for vessels

operated by Global Chartering as of December 31, 2021 and

2020, respectively. Guarantees given on behalf of joint ventures

also included 3,088 as of December 31, 2021 and 2020

corresponding to ArcelorMittal's 60% guarantee of the 5,146

ten-year term loan agreement entered into by the AMNS India

joint venture with various Japanese banks on March 16, 2020.

As of December 31, 2021, pledges and other collateral mainly

related to (i) mortgages entered into by the Company’s

operating subsidiaries and (ii) inventories and receivables

pledged to secure the South African Rand revolving borrowing

base finance facility for the amount drawn of 113 and ceded

bank accounts to secure environmental obligations, true sale of

receivables programs and the revolving borrowing base finance

facility in South Africa of 89. Pledges of property, plant and

equipment were 111 and 136 as of December 31, 2021 and

2020, respectively. Other sureties, first demand guarantees,

letters of credit, pledges and other collateral included 406 and

407 of commitments given on behalf of associates as of

December 31, 2021 and 2020, respectively, and 452 and 173 of

commitments given on behalf of joint ventures as of

December 31, 2021 and 2020, respectively. The increase in

commitments given on behalf of joint ventures is mainly due to

guarantees of 241 given on behalf of Acciaierie d'Italia, which is

accounted for as a joint venture since April 14, 2021 (see note

2.4.1).

As of December 31, 2020, other sureties, first demand

guarantees, letters of credit, pledges and other collateral

included 260 with respect to a pledged cash collateral provided

by the Company until collection of the TSR receivables retained

in ArcelorMittal USA after disposal. As of December 31, 2021,

the cash collateral was released.

Capital expenditure commitments

Capital expenditure commitments mainly relate to commitments

associated with investments in expansion and improvement

projects by various subsidiaries.

In 2016, AMSA committed to an investment program in

connection with the competition commission settlement. The

remaining capital expenditure commitment was 100 and 126 as

of December 31, 2021 and 2020, respectively.

Capital expenditure commitments also included 158 and 196 as

of December 31, 2021 and 2020, respectively, for the 1 billion

investment program at the Company's Mexican operations,

which is focused on building ArcelorMittal Mexico’s downstream

capabilities. The main investment is related to the new hot strip

mill with capacity of approximately 2.5 million tonnes.

Other commitments

Other commitments given comprise mainly commitments

incurred for gas supply to electricity suppliers.

As of September 21, 2018 an Environmental Commitment

Agreement ("ECA") has been executed between ArcelorMittal

Brasil, local government and the Brazilian environmental

authorities. ArcelorMittal Brasil committed to carry out, over the

next 5 years, a series of environmental operational and capital

investments with the aim to reduce atmospheric emissions from

the Company's Tubarão site. To comply with the ECA

requirements, ArcelorMittal Brasil may need to acquire new

equipment and change some of its current operating methods

and processes. As of December 31, 2021, ArcelorMittal Brasil

estimated the underlying costs to implement those investments

at 87. The non-compliance with ECA would lead to fines

amounting to a maximum of 18 and 19 as of December 31,

2021 and 2020, respectively. On November 19, 2021, following

a protocol of intent agreed between the Minas Gerais State

Government, ArcelorMittal Brasil and BMB Belgo Mineira

Bekaert Artefatos De Arame Ltd ("BMB"), other commitments

increased by 442 as a result of ArcelorMittal Brasil's

commitment to carry out capital expenditures at the Monlevade

industrial plant to complete the expansion project by the second

half of 2024.

Other commitments decreased by 1,940 in 2021 following the

derecognition of 1,357 capital expenditure commitments relating

to blast furnaces, steel shops and finishing lines and 583

environmental capital expenditure commitments as of December

31, 2020 with respect to Acciaierie d'Italia.

Commitments to sell

In addition to the commitments presented above, the Company

has firm commitments to sell for which it also has firm

commitments to purchase included in purchase commitments

Consolidated financial statements 344

(millions of U.S. dollar, except share and per share data)

for 292 and 211 as of December 31, 2021 and 2020,

respectively, and mainly related to natural gas and electricity.

NOTE 10: INCOME TAXES

The current tax payable (recoverable) is based on taxable profit

(loss) for the year. Taxable profit differs from profit as reported in

the consolidated statements of operations because it excludes

items of income or expense that are taxable or deductible in

other years or are never taxable or deductible. The Company’s

current income tax expense (benefit) is calculated using tax

rates that have been enacted or substantively enacted as of the

date of the consolidated statements of financial position.

Tax is charged or credited to the consolidated statements of

operations, except when it relates to items charged or credited

to other comprehensive income or directly to equity, in which

case the tax is recognized in other comprehensive income or in

equity.

Deferred tax is recognized on differences between the carrying

amounts of assets and liabilities, in the consolidated financial

statements and the corresponding tax basis used in the

computation of taxable profit, and is accounted for using the

statements of financial position liability method. Deferred tax

liabilities are generally recognized for all taxable temporary

differences, and deferred tax assets are generally recognized

for all deductible temporary differences and net operating loss

carry forwards to the extent that it is probable that taxable profits

will be available against which those deductible temporary

differences can be utilized. Such assets and liabilities are not

recognized if the taxable temporary difference arises from the

initial recognition of non-deductible goodwill or if the differences

arise from the initial recognition (other than in a business

combination) of other assets and liabilities in a transaction that

affects neither the taxable profit nor the profit reported in the

consolidated statements of operations.

Deferred tax liabilities are recognized for taxable temporary

differences associated with investments in subsidiaries,

associates and joint ventures, except if the Company is able to

control the reversal of the temporary difference and it is

probable that the temporary difference will not reverse in the

foreseeable future. Deferred tax assets arising from deductible

temporary differences associated with such investments are

only recognized to the extent that it is probable that there will be

sufficient taxable profits against which the benefits of the

temporary differences can be utilized and are expected to

reverse in the foreseeable future.

Deferred tax assets and liabilities are measured at the tax rates

that are expected to apply in the period in which the liability is

settled or the asset realized, based on tax rates (and tax laws)

that have been enacted or substantively enacted at the

consolidated statements of financial position date. The

measurement of deferred tax assets and liabilities reflects the

tax consequences that would result from the manner in which

the Company expects, at the reporting date, to recover or settle

the carrying amount of its assets and liabilities.

The carrying amount of deferred tax assets is reviewed at each

consolidated statements of financial position date and reduced

to the extent that it is no longer probable that sufficient taxable

profits will be available to enable all or part of the asset to be

recovered. The Company reviews the deferred tax assets in the

different jurisdictions in which it operates to assess the

possibility of realizing such assets based on projected taxable

profit, the expected timing of the reversals of existing temporary

differences, the carry forward period of temporary differences

and tax losses carried forward and the implementation of

planning strategies. Due to the numerous variables associated

with these judgments and assumptions, both the precision and

reliability of the resulting estimates of the deferred tax assets

are subject to substantial uncertainties. In case a history of

recent losses is present, the Company considers whether

convincing other evidence exists, such as the character of

(historical) losses and planning opportunities, to support the

deferred tax assets recognition.

Deferred tax assets and liabilities are offset when there is a

legally enforceable right to set off current tax assets against

current tax liabilities, when they relate to income taxes levied by

the same taxation authority and when the Company intends to

settle its current tax assets and liabilities on a net basis.

Uncertain (income) tax positions are periodically assessed by

the Company based on management’s best judgment given any

changes in the facts, circumstances and information available

and applicable tax laws. When it is probable that the tax

authorities will not accept the position taken, the Group

establishes provisions based on the most likely amount of the

liability (recovery) or weighted average of various possible

outcomes to reflect the effect of the uncertainty in determining

the related taxable profit (tax loss), tax bases, unused tax

losses, unused tax credits or tax rates, to the extent that a

reliable estimate can be made.

10.1 Income tax expense (benefit)

The components of income tax expense (benefit) are

summarized as follows:

Year ended December 31,

2021

2020

2019

Total current tax expense

2,953

839

786

Total deferred tax expense

(benefit)

(493)

827

(327)

Total income tax expense (benefit)

2,460

1,666

459

345 Consolidated financial statements

The following table reconciles the expected tax expense

(benefit) at the statutory rates applicable in the countries where

the Company operates to the total income tax expense (benefit)

as calculated:

Year ended December 31,

2021

2020

2019

Net income (loss) (including non-

controlling interests)

15,565

(578)

(2,391)

Income tax expense

2,460

1,666

459

Income (loss) before tax

18,025

1,088

(1,932)

Tax expense (benefit) at the

statutory rates applicable to

income (losses) in the countries1

4,146

136

(468)

Permanent items

500

714

(993)

Rate changes

—

340

Net change in measurement of

deferred tax assets

(2,956)

454

1,201

Tax effects of foreign currency

translation

—

Tax credits

(24)

(13)

(9)

Other taxes

688

267

160

Others

214

Income tax expense

2,460

1,666

459

1.Tax expense (benefit) at the statutory rates is based on income (loss) before

tax excluding income (loss) from investments in associates and joint ventures.

ArcelorMittal’s consolidated income tax expense (benefit) is

affected by the income tax laws and regulations in effect in the

various countries in which it operates and the pre-tax results of

its subsidiaries in each of these countries, which can change

from year to year. ArcelorMittal operates in jurisdictions, mainly

in Eastern Europe and Asia, which have a structurally lower

corporate income tax rate than the statutory tax rate as enacted

in Luxembourg (24.94%), as well as in jurisdictions, mainly in

Brazil and Mexico, which have a structurally higher corporate

income tax rate.

Permanent items

Year ended December 31,

2021

2020

2019

Taxable reversals of (tax

deductible) write-downs on shares

and receivables

735

630

(922)

Juros sobre o Capital Próprio

(323)

(37)

(32)

Other permanent items

121

(39)

Total permanent items

500

714

(993)

Taxable reversals of (tax deductible) write-downs on shares and

receivables: in connection with the Company's impairment test

for goodwill and property, plant and equipment, the

recoverability of the carrying amounts of investments in shares

and intragroup receivables is also reviewed annually, resulting in

tax deductible write-downs, or taxable reversals of previously

recorded write-downs, of the values of loans and shares of

consolidated subsidiaries in Luxembourg.

Juros sobre o Capital Próprio: Corporate taxpayers in Brazil,

which distribute a dividend can benefit from a tax deduction

corresponding to an amount of interest calculated as a yield on

capital. The deduction is determined as the lower of the interest

as calculated by application of the Brazilian long term interest

rate on the opening balance of capital and reserves, and 50% of

the income for the year or accumulated profits from the previous

year. For accounting purposes, this distribution of interest on

capital is regarded as a dividend distribution, while for Brazilian

tax purposes it is regarded as tax deductible interest.

Rate changes

The 2019 tax expense from rate changes of 340 is mainly due to

the impact of the decrease in the future income tax rate on

deferred tax assets in Luxembourg.

Net change in measurement of deferred tax assets

The 2021 net change in measurement of deferred tax assets of

(2,956) mainly consists of recognition of deferred tax assets in

Luxembourg of (1,166) following higher profitability of the

current year and increase of the available deferred tax liabilities,

recognition of deferred tax assets on current year taxable

reversal of write-downs of the value of shares and receivables of

consolidated subsidiaries in Luxembourg (735), and (1,055) net

recognition and utilization of deferred tax assets on losses and

temporary differences in USA and other tax jurisdictions,

following significant profits generated during the year.

The 2020 net change in measurement of deferred tax assets of

454 mainly consists of derecognition and utilization of deferred

tax assets in Luxembourg of 709 following lower income

expectation mainly as a result of the disposal of ArcelorMittal

USA, recognition of deferred tax assets on current year taxable

reversal of write-downs of the value of shares and receivables of

consolidated subsidiaries in Luxembourg (630), and 375 net

non-recognition and derecognition of deferred tax assets on

losses and temporary differences in other tax jurisdictions.

The 2019 net change in measurement of deferred tax assets of

1,201 mainly consists of non-recognition of deferred tax assets

on write-downs of the value of shares of consolidated

subsidiaries in Luxembourg and other non-recognition and

derecognition of deferred tax assets in certain tax jurisdictions,

partially offset by an additional recognition of deferred tax assets

of previous years of 0.6 billion due to increase in projections of

future taxable income in Luxembourg driven primarily by the

lower external borrowing costs.

Consolidated financial statements 346

(millions of U.S. dollar, except share and per share data)

Tax effects of foreign currency translation

The tax effects of foreign currency translation of nil, 41 and 14 at

December 31, 2021, 2020 and 2019 , respectively, refer mainly

to deferred tax assets and liabilities of certain entities with a

different functional currency than the currency applied for tax

filing purposes.

Tax credits

The tax credits are mainly attributable to the Company’s

operating subsidiaries in Brazil. They relate to credits claimed

on foreign investments, credits for research and development

and other credits.

Other taxes

Other taxes mainly include withholding taxes on dividends,

services, royalties and interests as well as mining duties in

Canada and Mexico, state tax and Base Erosion and Anti-Abuse

Tax ("BEAT") in the United States, and Cotisation sur la Valeur

Ajoutée des Entreprises ("CVAE'') in France. Other taxes

increased in 2021 mainly as a result of higher mining taxes in

Canada.

Others

Year ended December 31,

2021

2020

2019

Tax contingencies/settlements

137

225

Prior period taxes

(31)

(15)

(20)

Others

(12)

(5)

Total

214

Tax contingencies/settlements of 137, 87, and 225 at

December 31, 2021, 2020 and 2019, respectively, consist of

uncertain tax positions (see note 10.3) mainly related to North

America and ACIS.

10.2 Income tax recorded directly in equity and/or other

comprehensive income

Year ended December 31,

2021

2020

2019

Recognized in other comprehensive

income on:

Deferred tax expense (benefit)

Unrealized gain on investments in

equity instruments at FVOCI

167

—

Gain (loss) on derivative financial

instruments

648

(28)

(244)

Recognized actuarial gain (loss)

144

(69)

Foreign currency translation

adjustments

(335)

(35)

1,018

(376)

(247)

Recognized directly in equity on:

Current tax expense (benefit)

Realized gain on investments in equity

instruments at FVOCI

—

Deferred tax expense (benefit)

Loss related to repurchase of MCNs

(185)

—

Realized gain on investments in equity

instruments at FVOCI

—

(185)

—

Total

833

(363)

(247)

10.3 Uncertain tax positions

The Company operates in multiple jurisdictions with complex

legal and tax regulatory environments. In certain of these

jurisdictions, ArcelorMittal has taken income tax positions that

management believes are supportable and are intended to

withstand challenge by tax authorities. Some of these positions

are inherently uncertain and include those relating to transfer

pricing matters and the interpretation of income tax laws applied

in complex transactions. The Company periodically reassesses

its tax positions. Changes to the financial statement recognition,

measurement and disclosure of tax positions are based on

management’s best judgment given any changes in the facts,

circumstances, information available and applicable tax

laws. Considering all available information and the history of

resolving income tax uncertainties, the Company believes that

the ultimate resolution of such matters will not have a material

effect on the Company’s financial position, statements of

operations or cash flows (see note 9.3).

347 Consolidated financial statements

10.4 Deferred tax assets and liabilities

The origin of the deferred tax assets and liabilities is as follows:

Assets

Liabilities

Net

2021

2020

2021

2020

2021

2020

Intangible assets

(487)

(538)

(472)

(523)

Property, plant and equipment

150

(4,076)

(4,064)

(3,926)

(3,991)

Inventories

273

277

(40)

(77)

233

200

Financial instruments

(799)

(124)

(717)

(111)

Other assets

152

162

(486)

(306)

(334)

(144)

Provisions

1,083

1,240

(253)

(276)

830

964

Other liabilities

531

458

(31)

(120)

500

338

Tax losses and other tax benefits carried forward

9,530

9,168

—

9,530

9,168

Tax credits carried forward

134

133

—

134

133

Untaxed reserves

—

Deferred tax assets (liabilities)

11,950

11,539

(6,172)

(5,505)

5,778

6,034

Deferred tax assets

8,147

7,866

Deferred tax liabilities

(2,369)

(1,832)

Deferred tax assets recognized by the Company as of December 31, 2021 included the following:

Gross amount

Total deferred

tax assets

Recognized

deferred tax

assets

Unrecognized

deferred tax

assets

Tax losses and other tax benefits carried forward

133,107

33,236

9,530

23,706

Tax credits carried forward

671

134

537

Other temporary differences

11,695

3,033

2,286

747

Total

36,940

11,950

24,990

Deferred tax assets recognized by the Company as of December 31, 2020 included the following:

Gross amount

Total deferred

tax assets

Recognized

deferred tax

assets

Unrecognized

deferred tax

assets

Tax losses and other tax benefits carried forward

114,266

28,554

9,168

19,386

Tax credits carried forward

745

133

612

Other temporary differences

12,029

3,072

2,238

834

Total

32,371

11,539

20,832

As of December 31, 2021, the majority of unrecognized deferred

tax assets relates to tax losses carried forward attributable to

various subsidiaries located in different jurisdictions (primarily

Germany, Luxembourg, Spain, South Africa and USA) with

different statutory tax rates. At each reporting date, ArcelorMittal

considers existing evidence, both positive and negative,

including the earnings history and results of recent operations,

reversals of deferred tax liabilities, projected future taxable

income, and planning strategies, that could impact the view with

regard to future realization of these deferred tax assets.

The amount of the total deferred tax assets is the aggregate

amount of the various recognized and unrecognized deferred

tax assets at the various subsidiaries and not the result of a

computation with a given blended rate. The utilization of tax

losses carried forward is restricted to the taxable income of the

subsidiary or tax consolidation group to which it belongs. The

Consolidated financial statements 348

(millions of U.S. dollar, except share and per share data)

utilization of tax losses carried forward may also be restricted by

the character of the income, expiration dates and limitations on

the yearly use of tax losses against taxable income.

At December 31, 2021, the total amount of accumulated tax

losses in Luxembourg with respect to the ArcelorMittal S.A. tax

integration amounted to approximately 115.6 billion, of which

34.1 billion is considered realizable, resulting in the recognition

of 8.5 billion of deferred tax assets at the applicable income tax

rate in Luxembourg. At December 31, 2020, the total amount of

accumulated tax losses in Luxembourg with respect to the main

tax consolidation amounted to approximately 91.3 billion, of

which 31.5 billion was considered realizable, resulting in the

recognition of 7.9 billion of deferred tax assets at the applicable

income tax rate in Luxembourg. Under the Luxembourg tax

legislation, tax losses generated before 2017 can be carried

forward indefinitely and are not subject to any specific yearly

loss utilization limitations. The tax losses carried forward relate

primarily to tax deductible write-down charges taken on

investments in shares of consolidated subsidiaries recorded by

certain of ArcelorMittal’s holding companies in Luxembourg. Of

the total tax losses carried forward, 54.3 billion may be subject

to recapture in the future if the write-downs that caused them

are reversed creating taxable income unless the Company

crystallizes them through sales or other organizational

restructuring activities.

The Company believes that it is probable that sufficient future

taxable profits will be generated to support the recognized

deferred tax asset for tax losses carried forward in Luxembourg.

As part of its recoverability assessment the Company has taken

into account (i) its most recent forecast approved by

management and the Board of Directors, (ii) the likelihood that

the factors that have contributed to past losses in Luxembourg

will not recur, (iii) the fact that ArcelorMittal in Luxembourg is the

main provider of funding to the Company’s consolidated

subsidiaries, leading to significant amounts of taxable interest

income on outstanding and future loans as updated based on

most recent funding strategy, (iv) the expected level of interest

expenses in Luxembourg driven by the Group net debt level, (v)

the industrial franchise agreement whereby ArcelorMittal S.A.

licenses its business model for manufacturing, processing and

distributing steel to group subsidiaries, and (vi) other significant

and reliable sources of operational income earned from

ArcelorMittal’s European and worldwide operating subsidiaries

for centralized distribution and procurement activities performed

in Luxembourg. The Company has also considered the

implications of the net-zero path and its carbon emissions

intensity reduction targets on its future taxable profits

expectations in relation to the existing business models and the

potential future financing of such projects, resulting in no major

impact on the estimated level of future taxable profit. In

performing the assessment, the Company estimates at which

point in time its earnings projections are no longer reliable, and

thus taxable profits are no longer probable. Accordingly, the

Company has established consistent forecast periods for its

different income streams for estimating probable future taxable

profits, against which the unused tax losses can be utilized in

Luxembourg.

At December 31, 2021, based upon the level of historical

taxable income and projections for future taxable income over

the periods in which the deductible temporary differences are

anticipated to reverse, management believes it is probable that

ArcelorMittal will realize the benefits of the recognized deferred

tax assets of 8.1 billion. The amount of future taxable income

required to be generated by ArcelorMittal’s subsidiaries to utilize

the deferred tax assets of 8.1 billion is at least 32.9 billion.

Historically, the Company has been able to generate sufficient

taxable income and believes that it will generate sufficient levels

of taxable income in the coming years to allow the Company to

utilize tax benefits associated with tax losses carried forward

and other deferred tax assets that have been recognized in its

consolidated financial statements. Where the Company has had

a history of recent losses, it relied on convincing other evidence

such as the character of (historical) losses and planning

opportunities to support the deferred tax assets recognized.

For the period ended December 31, 2021, ArcelorMittal

recorded 225 of deferred income tax liabilities in respect of

deferred taxation that would arise if temporary differences on

investments in subsidiaries, associates and interests in joint

ventures were to be realized in the foreseeable future as

compared to 90 as of December 31, 2020. No deferred tax

liability has been recognized in respect of other temporary

differences on investments in subsidiaries, associates and

interests in joint ventures because the Company is able to

control the timing of the reversal of the temporary difference and

it is probable that such differences will not reverse in the

foreseeable future. The amount of these unrecognized deferred

tax liabilities is 796.

10.5 Tax losses, tax credits and other tax benefits carried

forward

At December 31, 2021, the Company had total estimated tax

losses carried forward and other tax benefits of 133.1 billion.

This includes net operating losses and other tax benefits of 5.8

billion primarily related to subsidiaries in the Basque Country in

Spain, Luxembourg and the United States, which expire as

follows:

349 Consolidated financial statements

Year expiring

Recognized

Unrecognized

Total

2022

2023

2024

253

288

2025

2026

—

2027 - 2039

711

4,627

5,338

Total

1,067

4,718

5,785

The remaining tax losses carried forward and other tax benefits

for an amount of 127.3 billion (of which 37.1 billion are

recognized and 90.2 billion are unrecognized) are carried

forward for unlimited period of time and primarily relate to the

Company’s operations in France, Germany, Luxembourg, Spain

and in the US.

At December 31, 2021, the Company also had total estimated

tax credits carried forward of 671.

Such amount includes tax credits of 565 (of which 69

recognized and 496 unrecognized) and primarily attributable to

subsidiaries in the Basque country in Spain which expire as

follows:

Year expiring

Recognized

Unrecognized

Total

2022

—

2023

—

2024

—

2025

—

2026

—

2027 - 2039

488

557

Total

496

565

The remaining tax credits for an amount of 106 (of which 66 are

recognized and 40 are unrecognized) are indefinite and

primarily attributable to the Company’s operations in Spain and

the US.

Tax losses, tax credits and other tax benefits carried forward are

denominated in the currency of the countries in which the

respective subsidiaries are located and operate, except for

Luxembourg where the tax losses are mainly denominated in

U.S. dollar. Fluctuations in currency exchange rates could

impact the U.S. dollar equivalent value of these tax losses

carried forward in future years.

NOTE 11: EQUITY

11.1 Share details

On May 14, 2020, the Company completed an offering of

common shares, without nominal value for 750 at a price of

$9.27 per share. The Significant Shareholder participated in the

offerings by contributing an amount of 100 for the shares.

Following the offering of common shares described above with

net proceeds of 740 (net of transaction costs of 10), on May 14,

2020, the Company issued 80,906,149 fully paid up shares. The

Company allocated 29 to share capital, which increased from

364 at December 31, 2019 to 393 at December 31, 2020 and

the remainder of 711 to additional paid-in-capital.

Under the terms of the offerings, there is a 180-day lock-up

period for the Company on issuances or sales of shares and

securities exchangeable for or convertible into shares, subject to

customary exceptions.

Following the approval by the extraordinary general meeting of

shareholders on June 8, 2021 to cancel all the shares

repurchased by the Company under its share buyback programs

up to a maximum of 165 million shares, the Company

decreased issued share capital on August 4, 2021 and

September 22, 2021 through the cancellation of 70 million and

50 million treasury shares, respectively. Accordingly, the

aggregate number of shares issued and fully paid up decreased

from 1,102,809,772 to 982,809,772 and share capital decreased

by 43 from 393 at December 31, 2020 to 350 at December 31,

2021.

On January 14, 2022, ArcelorMittal cancelled 45 million

treasury shares to keep the number of treasury shares within

appropriate levels. This cancellation took into account the

shares already purchased under the 1,000 share buyback

program announced on November 17, 2021 which was

completed on December 28, 2021. Following these

cancellations, the aggregate number of shares issued and fully

paid up decreased from 982,809,772 to 937,809,772 and share

capital decreased from 350 at December 31, 2021 to 334.

The Company’s shares consist of the following:

December 31, 2019

Movement in year

December 31, 2020

Movement in year

December 31, 2021

Issued shares

1,021,903,623

80,906,149

1,102,809,772

(120,000,000)

982,809,772

Treasury shares

(9,824,202)

(12,251,157)

(22,075,359)

(49,841,211)

(71,916,570)

Total outstanding shares

1,012,079,421

68,654,992

1,080,734,413

(169,841,211)

910,893,202

Consolidated financial statements 350

(millions of U.S. dollar, except share and per share data)

The number of issued shares was 1,021,903,623 at December

31, 2019, 1,102,809,772 at December 31, 2020 and

982,809,772 at December 31, 2021.

Authorized shares

On June 13, 2020, at the extraordinary general meeting of

shareholders, the shareholders approved an increase of the

authorized share capital by 74. As a result, the authorized share

capital increased from 411 represented by 1,151,576,921

ordinary shares without nominal value as of December 31, 2019

to 485 represented by 1,361,418,599 ordinary shares without

nominal value as of December 31, 2020.

On August 4, 2021, following the cancellation of 70 million

treasury shares, the authorized share capital decreased from

485 represented by 1,361,418,599 ordinary shares without

nominal value to 460 represented by 1,291,418,599 ordinary

shares without nominal value. On September 22, 2021,

following the cancellation of 50 million treasury shares, the

authorized share capital decreased further to 442 represented

by 1,241,418,599 ordinary shares without nominal value.

On January 14, 2022, following the cancellation of 45 million

treasury shares, the authorized share capital decreased to 426

represented by 1,196,418,599 ordinary shares without nominal

value.

Share buyback

On February 15, 2019, ArcelorMittal completed a share buyback

program and repurchased 4 million shares for a total value of

€80 million (90) at an average price per share of €19.89

($22.42).

On October 30, 2020, the Company completed a share buyback

program in connection with the announced sale of 100% of the

shares of ArcelorMittal USA. ArcelorMittal repurchased

35,636,253 shares at an average price per share of €11.92

($14.03) for a total value of €425 million (500).

The shares acquired through the buyback program were

recognized as treasury shares. On December 15, 2020,

ArcelorMittal signed separate, privately negotiated exchange

agreements with a limited number of holders of the MCNs for

which it delivered 22,653,933 shares out of treasury shares (see

note 11.2).

On March 3, 2021, ArcelorMittal completed its first share

buyback program in 2021 and repurchased 27.1 million shares

for a total amount of €537 million (650) at an average price per

share of €19.79 ($23.97).

On June 17, 2021, ArcelorMittal completed a second share

buyback program and repurchased 17.8 million shares for a

total amount of €469 million (570) at an average price per share

of €26.27 ($31.94).

On July 5, 2021, ArcelorMittal completed a third share buyback

program and repurchased 24.5 million shares for a total amount

of €630 million (750) at an average price per share of €25.77

($30.66).

On November 16, 2021, ArcelorMittal completed a fourth share

buyback program and repurchased 67.4 million shares for a

total value of €1,881 million (2,200) at an average price per

share of €27.91 ($32.64).

On December 28, 2021, completed a fifth share buyback

program and repurchased 34.1 million shares for a total value of

€886 million (1,000) at an average price per share of €25.99

($29.34).

During 2021, the Company repurchased 62.2 million shares

from the Significant Shareholder under its five share buy back

programs to maintain Significant Shareholder's current level of

voting rights (pursuant to the Share Repurchase Agreement

signed on February 12, 2021) for €1,600 million (1,878).

On February 11, 2022, ArcelorMittal announced a new share

buyback program in the amount of 1,000 under the authorization

given by the annual general meeting of shareholders of June 8,

2021. The program is expected to be completed during the first

half of 2022, subject to market conditions. The shares acquired

under the program are intended to meet ArcelorMittal’s

obligations under debt obligations exchangeable into equity

securities, reduce ArcelorMittal’s share capital, and/or meet

ArcelorMittal’s obligations arising from employee share

programs. As of March 10, 2022, ArcelorMittal had repurchased

7.1 million shares for a total value of €193 million (214) at an

average price per share of €27.14 ($30.08).

Treasury shares

ArcelorMittal held, indirectly and directly, 71.9 million and 22.1

million treasury shares as of December 31, 2021 and

December 31, 2020, respectively.

11.2 Equity instruments and hybrid instruments

Mandatory convertible bonds

On December 28, 2009, the Company issued through Hera

Ermac, a wholly-owned subsidiary, 750 unsecured and

unsubordinated bonds mandatorily convertible into preferred

shares of such subsidiary. The bonds were placed privately with

a Luxembourg affiliate of Crédit Agricole (formerly Calyon) and

are not listed. The Company has the option to call the

mandatory convertible bonds until 10 business days before the

maturity date. Hera Ermac invested the proceeds of the bonds

issuance and an equity contribution by the Company in notes

issued by subsidiaries of the Company linked to the values of

shares of Erdemir and China Oriental. On April 20, 2011, the

Company signed an agreement for an extension of the

conversion date of the mandatory convertible bonds to January

351 Consolidated financial statements

31, 2013. On September 27, 2011, the Company increased the

mandatory convertible bonds from 750 to 1,000. The Company

has extended the conversion date for the mandatory convertible

bonds from time to time with the latest extension on December

22, 2020 (resulting in the extinguishment and recognition of a

new compound instrument) to January 31, 2024.

On March 29, 2019 and December 18, 2019, the Company

repaid notes issued by subsidiaries which were linked to the

value of the shares of Erdemir. As of December 31, 2020, the

remaining notes were linked to the value of the shares of China

Oriental (see note 6.1.5).

On December 22, 2020, as described above the maturity of the

mandatory convertible bonds was extended from January 29,

2021 to January 31, 2024. The other main features of the

mandatory convertible bonds remained unchanged. The

Company determined that this transaction led to the

extinguishment of the existing compound instrument and the

recognition of a new compound instrument including non-

controlling interests for 869 (net of cumulative tax and fees) and

other liabilities for 131. The derecognition of the previous

instrument and the recognition at fair value of the new

instrument resulted in a 178 expense included in financing

costs-net in the consolidated statement of operations and a 53

increase in non-controlling interests.

Mandatorily convertible subordinated notes

On May 18, 2020, following the offering of common shares

described in note 11.1, the Company completed an offering of

mandatorily convertible subordinated notes (“MCNs”) for 1,250.

The MCNs have a three year maturity, were issued at 100% of

the principal amount and will be mandatorily converted into

common shares of the Company upon maturity unless

converted earlier at the option of the holders or ArcelorMittal

during the conversion period or upon occurrence of certain

defined events.

In all cases, ArcelorMittal may exercise its right to convert early,

taking precedent over the other options. In case of an early

conversion, ArcelorMittal must deliver shares at the “Maximum

Conversion Ratio.” The mandatorily convertible notes pay a

coupon of 5.50% per annum, payable quarterly in arrears. The

minimum conversion price of the mandatorily convertible notes

is equal to $9.18, corresponding to the offering price of the

shares as described above, and the maximum conversion price

is 117.5% of the minimum conversion price or $10.79, subject to

certain adjustments. ArcelorMittal intends to use the net

proceeds from the offerings for general corporate purposes, to

deleverage and to enhance liquidity, thereby building additional

resilience going forward in what remains an uncertain

environment.

The Significant Shareholder participated in the offerings by

contributing an amount of 100 for the MCNs.

The Company determined that the MCNs are a hybrid

instrument including an equity component and a debt

component. The Company assessed whether there is actual

economic or other business reasons that it would exercise its

option to convert prior to maturity, whether the MCNs would

have been priced differently if the early settlement option had

not been included in the contractual terms and other factors

such as the term of the instrument, the width of the range

between the cap and the floor, ArcelorMittal’s share price and

the volatility of the share price as important criterion in this

conclusion. The early conversion right has economic substance

with respect to maintaining the current credit rating if early

conversion can help in preventing a rating downgrade. In this

event, future savings of credit interest is expected to be more

than the cost of early conversion. The debt component of 190

(net of transaction costs of 2) at issuance corresponded to the

net present value of the future interest payments and is included

in accrued expenses and other liabilities and other long-term

obligations. The remaining amount of 1,047 (net of transaction

costs of 11) was the equity instrument.

On December 15, 2020, ArcelorMittal signed separate, privately

negotiated exchange agreements with a limited number of

holders of MCNs exchanging 247 in aggregate principal amount

of MCNs for an aggregate of 22,653,933 treasury shares at the

minimum conversion ratio plus 25 paid in cash (including

accrued interest on the exchanged MCNs up to, but excluding,

the settlement date). The Company allocated the share

consideration to the debt (30) and equity (207) components

consistent with the original allocation using net present value of

the future interest payments at the date of exchange. As of

December 31, 2020 and following the exchange, the debt and

equity components were 123 and 840 (presented separately in

the statements of changes in equity), net of transaction fees

respectively.

On December 23, 2021, ArcelorMittal completed separate,

privately negotiated agreements with a limited number of

holders of MCNs to repurchase 395 in aggregate principal

amount of MCNs at the minimum conversion ratio for an

aggregate cash consideration of 1,196. The Company allocated

the cash consideration to the debt (30) and equity (331)

components of the instrument and recognized in financing costs

- net a 61 loss relating to the liability component and a 774 (589

net of tax) decrease in retained earnings relating to the equity

component consistent with the original allocation using net

present value of the future interest payments at the date of

exchange. As of December 31, 2021 and following the early

redemption, the debt and equity components were 44 and 509

Consolidated financial statements 352

(millions of U.S. dollar, except share and per share data)

(presented separately in the statements of changes in equity),

net of transaction fees, respectively.

11.3 Earnings per common share

Basic earnings per common share is computed by dividing net

income (loss) by the weighted average number of common

shares outstanding during the year. Diluted earnings per share

is computed by dividing income (loss) available to equity holders

by the weighted average number of common shares plus

potential common shares from share unit plans and outstanding

stock options whenever the conversion results in a dilutive

effect.

The following table provides the numerators and a reconciliation of the denominators used in calculating basic and diluted earnings per

common share for the years ended December 31, 2021, 2020 and 2019.

Year ended December 31,

2021

2020

2019

Net income (loss) attributable to equity holders of the parent

14,956

(733)

(2,454)

Weighted average common shares outstanding (in millions) for the purposes of basic earnings per share

1,105

1,140

1,013

Incremental shares from assumed conversion of restricted share units and performance share units (in

millions)

—

Weighted average common shares outstanding (in millions) for the purposes of diluted earnings per share

1,108

1,140

1,013

For the purpose of calculating earnings per common share,

diluted weighted average common shares outstanding excludes

nil, 9 million and 7 million potential common shares from share

unit plans for the year ended December 31, 2021, 2020 and

2019, respectively; and 1 million potential common shares from

stock options outstanding for the year ended December 31,

2019, because such share unit plans and stock options are anti-

dilutive.

11.4 Dividends

Calculations to determine the amounts available for dividends

are based on ArcelorMittal’s financial statements (“ArcelorMittal

S.A.”) which are prepared in accordance with IFRS, as

endorsed by the European Union. ArcelorMittal S.A. has no

significant manufacturing operations of its own and generates its

profit mostly from financing activities and the management fees/

industrial franchise agreements with Group companies.

Accordingly, it can only pay dividends or distributions to the

extent it is entitled to receive cash dividend distributions from its

subsidiaries’ recognized gains, profit generated by its own

activities, from the sale of its assets or share premiums from the

issuance of common shares. Dividends are declared in U.S.

dollar and are payable in either U.S. dollar or in euros.

Description

Approved by

Dividend per

share (in $)

Payout date

Total (in

millions of $)

Dividend for financial year 2018

Annual general shareholders’ meeting on May 7, 2019

0.20

June 13, 2019

203

Dividend for financial year 2019

Annual general shareholders’ meeting on June 13, 2020

—

Dividend for financial year 2020

Annual general shareholders’ meeting on June 8, 2021

0.30

June 15, 2021

312

On June 8, 2021 at the annual general meeting of shareholders,

the shareholders approved the Company’s dividend of $0.30 per

share. The dividend amounted to 325 (312 net of dividends paid

to subsidiaries holding treasury shares), and was paid on June

15, 2021.

In February 2022, the Board of Directors recommended an

increase of the base annual dividend to $0.38 per share, from

$0.30 per share, to be paid in June 2022, subject to the

approval of shareholders at the annual general meeting of

shareholders in May 2022.

353 Consolidated financial statements

11.5 Non-controlling interests

11.5.1 Non-wholly owned subsidiaries that have material non-controlling interests

The tables below provide a list of the subsidiaries which include significant non-controlling interests at December 31, 2021 and 2020

and for the years ended December 31, 2021, 2020 and 2019.

Name of Subsidiary

Country of

incorporation

and operation

% of non-

controlling

interests

and non-

controlling

voting

rights at

December

31, 2021

% of non-

controlling

interests

and non-

controlling

voting

rights at

December

31, 2020

Net income

(loss)

attributable

to non-

controlling

interests for

the year

ended

December

31, 2021

Non-

controlling

interests at

December

31, 2021

Net income

(loss)

attributable

to non-

controlling

interests for

the year

ended

December

31, 2020

Non-

controlling

interests at

December

31, 2020

Net income

(loss)

attributable

to non-

controlling

interests for

the year

ended

December

31, 2019

AMSA

South Africa

30.78%

151

160

(34)

(98)

Société Nationale de Sidérurgie

S.A. ("Sonasid")1

Morocco

67.57%

118

—

114

—

ArcelorMittal Kryvyi Rih

Ukraine

4.87%

187

(1)

151

(5)

Belgo Bekaert Arames ("BBA")

Brazil

45.00%

127

187

116

Hera Ermac2

Luxembourg

—

855

—

855

—

AMMC

Canada

15.00%

257

527

127

466

114

Arceo

Belgium

62.86%

153

167

ArcelorMittal Liberia Ltd

Liberia

15.00%

(218)

(222)

Other

269

—

286

Total

609

2,238

155

1,957

1.Sonasid - ArcelorMittal holds a controlling stake of 50% in Nouvelles Sidérurgies Industrielles ("NSI"). ArcelorMittal controls NSI on the basis of a shareholders’ agreement

which includes deadlock arrangements in favor of the Company. NSI holds a 64.86% stake in Sonasid. The total non-controlling interests in Sonasid of 67.57% are the

result of ArcelorMittal’s indirect ownership percentage in Sonasid of 32.43% through its controlling stake in NSI.

2.Hera Ermac - The non-controlling interests correspond to the equity component net of transaction fees of the mandatory convertible bonds maturing on January 31, 2024

(see note 11.2).

The tables below provide summarized statements of financial position for the above-mentioned subsidiaries as of December 31, 2021

and 2020 and summarized statements of operations and summarized statements of cash flows for the years ended December 31,

2021, 2020 and 2019.

December 31, 2021

Summarized statements of

financial position

AMSA

Sonasid

AM Kryvyi

Rih

BBA

Hera Ermac

AMMC

Arceo

AM Liberia

Current assets

1,229

232

1,657

392

685

2,058

196

176

Non-current assets

554

107

3,043

124

976

3,038

158

Total assets

1,783

339

4,700

516

1,661

5,096

249

334

Current liabilities

901

124

787

149

640

—

1,559

Non-current liabilities

362

284

623

—

Net assets

520

172

3,629

344

1,552

3,833

249

(1,271)

Consolidated financial statements 354

(millions of U.S. dollar, except share and per share data)

December 31, 2021

Summarized statements of

operations

AMSA

Sonasid

AM Kryvyi Rih

BBA

Hera Ermac

AMMC

Arceo

AM Liberia

Revenue

2,695

480

4,015

1,021

—

3,997

—

372

Net income (loss)

489

920

272

(4)

1,713

Total comprehensive income

(loss)

491

918

273

(4)

1,796

December 31, 2021

Summarized statements of cash

flows

AMSA

Sonasid

AM Kryvyi

Rih

BBA

Hera

Ermac

AMMC

Arceo

AM Liberia

Net cash provided by / (used in)

operating activities

180

778

2,310

214

Net cash provided by / (used in)

investing activities

(85)

(6)

(313)

(5)

(844)

(78)

Net cash provided by / (used in)

financing activities

(49)

(4)

(449)

(72)

(13)

(1,375)

(5)

(135)

Impact of currency movements on

cash

(16)

(6)

(2)

—

(6)

—

Cash and cash equivalents:

At the beginning of the year

173

—

125

At the end of the year

203

—

216

Dividend to non-controlling interests

(2)

(17)

(22)

(202)

(3)

December 31, 2020

Summarized statements of

financial position

AMSA

Sonasid

AM Kryvyi

Rih

BBA

Hera Ermac

AMMC

Arceo

AM Liberia

Current assets

853

214

1,050

200

694

1,566

182

153

Non-current assets

572

114

2,871

112

1,044

2,987

150

Total assets

1,425

328

3,921

312

1,738

4,553

271

303

Current liabilities

875

115

619

515

—

1,583

Non-current liabilities

471

354

113

633

—

Net assets

165

2,948

210

1,571

3,405

271

(1,335)

December 31, 2020

Summarized statements of operations

AMSA

Sonasid

AM Kryvyi

Rih

BBA

Hera

Ermac

AMMC

Arceo

AM Liberia

Revenue

1,526

324

2,348

650

—

2,746

—

361

Net income (loss)

(110)

(1)

(208)

849

192

Total comprehensive income (loss)

(138)

(208)

747

192

355 Consolidated financial statements

December 31, 2020

Summarized statements of cash flows

AMSA

Sonasid

AM Kryvyi

Rih

BBA

Hera

Ermac

AMMC

Arceo

AM Liberia

Net cash provided by / (used in) operating

activities

697

(209)

922

223

Net cash provided by / (used in) investing

activities

(13)

(5)

(212)

(12)

208

(137)

(19)

Net cash provided by / (used in) financing

activities

(1)

(485)

(65)

(870)

(6)

(204)

Impact of currency movements on cash

(11)

(2)

—

Cash and cash equivalents:

At the beginning of the year

—

210

At the end of the year

173

—

125

Dividend to non-controlling interests

(27)

(126)

(3)

December 31, 2019

Summarized statements of operations

AMSA

Sonasid

AM Kryvyi

Rih

BBA

Hera

Ermac

AMMC

Arceo

AM Liberia

Revenue

2,864

366

2,420

761

—

2,655

—

257

Net income (loss)

(319)

(1)

(100)

144

766

115

Total comprehensive income (loss)

(312)

—

(141)

144

761

115

December 31, 2019

Summarized statements of cash flows

AMSA

Sonasid

AM Kryvyi

Rih

BBA

Hera

Ermac

AMMC

Arceo

Liberia

Net cash provided by / (used in) operating

activities

(35)

163

857

1,045

Net cash provided by / (used in) investing

activities

(79)

(5)

(270)

(12)

(114)

(332)

(18)

Net cash provided by / (used in) financing

activities

(6)

(62)

(743)

(683)

(7)

(65)

Impact of currency movements on cash

—

Cash and cash equivalents:

At the beginning of the year

—

180

—

At the end of the year

—

210

Dividend to non-controlling interests

—

(4)

—

(18)

—

(102)

(5)

—

11.5.2 Transactions with non-controlling interests

Acquisitions of non-controlling interests, which do not result in a

change of control, are accounted for as transactions with

owners in their capacity as owners and therefore no goodwill is

recognized as a result of such transactions. In such

circumstances, the carrying amounts of the controlling and non-

controlling interests are adjusted to reflect the changes in their

relative interests in the subsidiary. Any difference between the

amount by which the non-controlling interests are adjusted and

the fair value of the consideration paid or received is recognized

directly in equity and attributed to the owners of the parent.

Transactions with non-controlling interests also include the

mandatory convertible bonds (see note 11.2).

Put option liabilities

On April 1, 2018, ArcelorMittal completed the acquisition of

Votorantim Siderurgia (subsequently renamed ArcelorMittal Sul

Fluminense "AMSF"), Votorantim S.A.'s long steel business in

Brazil pursuant to which Votorantim Siderurgia became a

wholly-owned subsidiary of ArcelorMittal Brasil. The acquisition

was completed through the issuance of preferred shares to

Votorantim S.A. representing a 2.99% interest in ArcelorMittal

Brasil. Pursuant to the shareholders' agreement, such preferred

shares are subject to put and call option arrangements

exercisable by Votorantim S.A. and ArcelorMittal Brasil between

July 1, 2019 and December 31, 2022 and between January 1,

Consolidated financial statements 356

(millions of U.S. dollar, except share and per share data)

2023 and December 31, 2024, respectively. The Company

determined that it has a present ownership interest in the

preferred shares subject to the put option. Accordingly, it

recognized at acquisition date a 328 financial liability at

amortized cost and measured at the present value of the

redemption amount based on past and future EBITDA

projections adjusted by certain terms of the contract. At

December 31, 2021 and December 31, 2020, the liability

amounted to 252 (see note 4.8) and 235 (see note 9.2),

respectively.

On June 3, 2021, following an amendment to the shareholders'

agreement signed between the Company and non-controlling

interests in NSI, an entity in which ArcelorMittal holds a 50%

controlling stake and which holds a 64.86% interest in Sonasid

in Morocco, the Company granted to such non-controlling

interests a put option to buy the totality of their shares in NSI

exercisable by its holders during three periods between

December 5, 2022 to December 4, 2024 (or from March 5, 2023

to March 4, 2025), December 5, 2027 to December 4, 2029 and

December 5, 2032 to December 4, 2034. The Company

recognized a financial liability at amortized cost against equity of

119 and measured at the present value of the redemption

amount.

NOTE 12: RELATED PARTIES

The related parties of the Group are predominately subsidiaries,

joint operations, joint ventures, associates and key management

personnel (see note 8.1) of the Group. Transactions between

the parent company, its subsidiaries and joint operations are

eliminated on consolidation and are not disclosed in this note.

Related parties include the Significant Shareholder, which is a

trust of which Mr. Lakshmi N. Mittal, Mrs. Usha Mittal and their

children are the beneficiaries and which owns, together with

shares owned directly by Mr. and Mrs. Mittal, 33.67% of

ArcelorMittal’s issued ordinary shares.

Transactions with related parties of the Company mainly relate

to sales and purchases of raw materials and steel products and

were as follows:

12.1 Sales and trade receivables

Year ended December 31,

December 31,

Sales

Trade receivables

Related parties and their subsidiaries where applicable

Category

2021

2020

2019

2021

2020

Calvert

Joint Venture

3,549

1,488

2,518

Gonvarri Steel Industries 1

Associate

2,234

1,395

1,728

Acciaierie d'Italia 2

Joint Venture

1,193

—

363

—

ArcelorMittal CLN Distribuzione Italia

Joint Venture

499

304

483

Borçelik

Joint Venture

484

312

474

105

Aperam

Other

478

155

172

Bamesa

Associate

370

226

365

Tuper

Joint Venture

326

128

147

WDI 3

Associate

195

106

105

ArcelorMittal RZK Çelik Servis Merkezi

Joint Venture

154

167

225

Coils Lamiere Nastri (C.L.N.)

Associate

150

146

247

Tameh

Joint Venture

107

109

Condesa 4

Joint Venture

106

—

ArcelorMittal BE Group

Joint Venture

—

SSC Tanger

Associate

Stalprofil

Associate

Alkat

Associate

I/N Kote 5

Other

—

226

321

—

Other

395

214

283

151

Total

10,519

5,142

7,442

1,084

269

1.Gonvarri Steel Industries include mainly the joint ventures ArcelorMittal Gonvarri Brasil Productos Siderúrgicos and ArcelorMittal Gonvarri SSC Slovakia.

357 Consolidated financial statements

2.On April 14, 2021, ArcelorMittal completed an investment agreement with Invitalia, an Italian state-owned company, forming the joint venture Acciaierie d’Italia (see note

2.3.1). On September 30, 2021, the raw material supply agreement between Acciaierie d’Italia and the Company expired without renewal.

3.WDI includes Westfälische Drahtindustrie Verwaltungsgesellschaft mbH & Co. KG and Westfälische Drahtindustrie GmbH.

4.On November 19, 2021, the Company completed the acquisition of Condesa, a joint venture in which it already held a 33% interest, through the acquisition of the

remaining 67% shares (see note 2.2.4).

5.I/N Kote was divested on December 9, 2020 upon completion of ArcelorMittal USA sale (see note 2.3.1).

12.2 Purchases and trade payables

Year ended December 31,

December 31,

Purchases

Trade payables

Related parties and their subsidiaries where applicable

Category

2021

2020

2019

2021

2020

Tameh

Joint Venture

404

171

273

178

Global Chartering

Joint Venture

286

138

—

Integrated Metal Recycling

Joint Venture

167

—

AMNS India

Joint Venture

166

—

Sitrel

Joint Venture

—

Aperam

Other

CFL Cargo

Associate

Exeltium

Associate

Alkat

Associate

Calvert

Joint Venture

124

127

Baycoat

Joint Venture

Gonvarri Steel Industries 1

Associate

Al Jubail

Joint Venture

Other

284

377

323

129

143

Total

1,873

1,151

1,092

431

272

1.Gonvarri Steel Industries include mainly the joint ventures ArcelorMittal Gonvarri Brasil Productos Siderúrgicos and ArcelorMittal Gonvarri SSC Slovakia.

12.3 Other transactions with related parties

At December 31, 2019, subsequent to the ArcelorMittal's sale of

a 50% controlling interest in Global Chartering to DryLog (see

note 2.3.1), the Company signed a 10 year freight contract with

Global Chartering, whereby ArcelorMittal agreed to provide

cargo up to 16.8 million tonnes annually for shipping,

representing 80% of the capacity of Global Chartering at that

time. As of December 31, 2019, the Company also had an

outstanding short-term loan of 127 granted to Global Chartering,

which was repaid in 2020 following the sale-and-lease back of

three vessels owned by Global Chartering.

At December 31, 2020, the shareholder loans granted by the

Company to Al Jubail, with various maturity dates, had a

carrying value of 109. They were fully converted into equity in

2021 (see note 2.4.1).

As of December 3, 2014, ArcelorMittal Calvert LLC signed a

member capital expenditure loan agreement with the joint

venture Calvert and as of December 31, 2021, the loans

amounted to 195 including accrued interest. The loans bear

interest from 2.28% to 4.77% and have various maturity dates

ranging from less than 1 to 25 years.

On November 8, 2019, Baffinland entered into an agreement

with a bank to finance up to 6 million tonnes at 78% of the value

of the iron ore produced and hauled to the port of Milne Inlet by

Baffinland up to a limit of 450. This arrangement was renewed

on December 1, 2020. On December 7, 2021, Baffinland signed

a new agreement with a bank to finance up to 6 million tonnes at

82% of the value of the iron ore produced and hauled to the port

of Milne Inlet by Baffinland up to a limit of 600.

ArcelorMittal's shared operator rights terminated on June 30,

2018 and the Company retained marketing rights until

December 31, 2019. For the duration of 2020, ArcelorMittal

provided transitional marketing services to Baffinland.

Following the Indian Supreme Court ruling dated October 4,

2018, ArcelorMittal completed a series of payments to the

financial creditors of KSS Petron to clear overdue debts (see

note 4.6). AMNS India has the right to enforce the KSS Petron

Consolidated financial statements 358

(millions of U.S. dollar, except share and per share data)

debt on behalf of the Company for an outstanding amount of

136 as of December 31, 2021.

NOTE 13: SUBSEQUENT EVENTS

On March 3, 2022, ArcelorMittal announced its decision to idle

its steelmaking operations in Kryvyi Rih, Ukraine in order to

ensure the safety and security of its employees and assets. The

Company has been evaluating the situation on a daily basis and

production had previously been reduced with the plant operating

at a technical minimum (approximately one-third of its normal

production levels). The process to idle all blast furnaces

commenced on the same day.

The Company's operations in Ukraine consist of a steel plant,

which produced 4.9 million tonnes of steel in 2021, and (captive)

mines that produced 11.7 million tonnes of iron ore in 2021; the

related property, plant and equipment had a carrying value of

2.3 billion on the Company’s statement of financial position at

December 31, 2021. In 2021, the Company’s Ukrainian

operations (and in particular its Kryvyi Rih steel plant) recorded

4.6 million of steel shipments, generating 4.1 billion of sales

including 0.9 billion of sales to customers located in Ukraine.

The Company cannot predict duration of the idling as it will

depend on the remaining course of the conflict and the

establishment of safe and stable operating and logistical

conditions thereafter, as well as potential repairs of any

damages sustained. More generally the conflict between Russia

and Ukraine could have a material adverse effect on the overall

macroeconomic environment, potentially affecting steel and iron

ore demand and prices as well as increasing energy costs.

NOTE 14: PRINCIPAL ACCOUNTANT FEES AND SERVICES

Deloitte Audit S.à r.l. acted as the principal independent

registered public accounting firm for ArcelorMittal for the fiscal

years ended December 31, 2021 and 2020. Set forth below is a

breakdown of fees for services rendered in 2021 and 2020.

Audit Fees. Audit fees in 2021 and 2020 included 25.8 and 25.6,

respectively, for the audits of financial statements, and 0.3 and

0.4 in 2021 and 2020, respectively, for regulatory filings.

Audit-Related Fees. Audit-related fees in 2021 and 2020 were

0.5 and 0.7, respectively. Audit-related fees include fees for

agreed upon procedures for various transactions or reports.

Tax Fees. Fees relating to tax planning, advice and compliance

in 2021 and 2020 were 0.2 and 0.2, respectively.

All Other Fees. Fees in 2021 and 2020 for all other services

were 0.05 and 0.01, respectively. All other fees relate to services

not included in the first three categories.

359 Consolidated financial statements

To the Shareholders of

ArcelorMittal Société Anonyme

24-26, Boulevard d’Avranches

L-1160 Luxembourg

Grand Duchy of Luxembourg

REPORT OF THE REVISEUR D’ENTREPRISES AGREE

Report on the Audit of the Consolidated Financial Statements

Opinion

We have audited the consolidated financial statements of ArcelorMittal and its subsidiaries (the “Group”), which comprise the

consolidated statement of financial position as at December 31, 2021, and the consolidated statements of operations, other

comprehensive income, changes in equity and cash flows for the year then ended, and notes to the consolidated financial statements,

including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements give a true and fair view of the consolidated financial position of the

Group as at December 31, 2021, and of its consolidated financial performance and its consolidated cash flows for the year then ended

in accordance with International Financial Reporting Standards (“IFRSs”) as adopted by the European Union.

Basis for Opinion

We conducted our audit in accordance with the EU Regulation N° 537/2014, the Law of 23 July 2016 on the audit profession (Law of 23

July 2016) and with International Standards on Auditing (“ISAs”) as adopted for Luxembourg by the “Commission de Surveillance du

Secteur Financier” (“CSSF”). Our responsibilities under the EU Regulation No 537/2014, the Law of 23 July 2016 and ISAs as adopted

for Luxembourg by the CSSF are further described in the “Responsibilities of the “réviseur d’entreprises agréé” for the Audit of the

Consolidated Financial Statements” section of our report. We are also independent of the Group in accordance with the International

Code of Ethics for Professional Accountants, including International Independence Standards, issued by the International Ethics

Standards Board for Accountants (“IESBA Code”) as adopted for Luxembourg by the CSSF together with the ethical requirements that

are relevant to our audit of the consolidated financial statements, and have fulfilled our other ethical responsibilities under those ethical

requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated

financial statements of the current period. These matters were addressed in the context of the audit of the consolidated financial

statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Goodwill and Property, Plant and Equipment – Refer to Note 5.3 to the Consolidated Financial Statements

Key Audit Matter Description

The Company’s evaluation of goodwill for impairment at the group of cash-generating units (“GCGU”) level, and property, plant and

equipment (“PP&E”) as part of the relevant cash-generating unit (“CGU”), involves a comparison of the recoverable amount of each

GCGU or CGU to its carrying amount. Recoverable amount is defined as the higher of fair value less costs of disposal and the value-in-

use for each GCGU or CGU. The Company primarily used value-in-use to determine the recoverable amounts for each GCGU or CGU,

which required management to make significant assumptions related to estimates of future cash flows.

The goodwill balance as of December 31, 2021 was $3,931 million. There was no impairment of goodwill recorded for the year ended

December 31, 2021.

The PP&E balance of the Company as of December 31, 2021 was $30,075 million. There was no impairment of PP&E recorded for the

year ended December 31, 2021. In connection with the Company’s annual test for impairment of goodwill and PP&E, the Company

360 Report of the réviseur d'entreprises agréé

reversed impairment charges which had been recognized in prior years relating to PP&E in the Europe segment amounting to $218

million for the year ended December 31, 2021.

Key assumptions that had a significant impact on the Company’s estimate of the recoverable amounts of the relevant GCGUs and

CGUs included volume of shipments, selling prices and the discount rate. Changes in these assumptions could have a significant

impact on the recoverable amount of a GCGU or CGU.

In developing the estimates of future cash flows of its GCGUs and CGUs, the Company considered its exposure to certain climate-

related risks which could affect the recoverable amount of a GCGU or CGU. Where there is a legal obligation of carbon neutrality, such

as in Europe and Canada, estimates of future cash flows include the decarbonization capital expenditures deemed necessary to

maintain the level of economic benefit expected to arise from related assets in their current condition. For the remaining jurisdictions,

where there is not a legal obligation of carbon neutrality, risk premiums in the discount rates utilized to determine the present value of

estimated future cash flows have been increased for decarbonization related uncertainties.

Given the significant judgments made by management to estimate the recoverable amounts of the relevant GCGUs and CGUs,

performing audit procedures to evaluate the reasonableness of management’s estimates related to volume of shipments, selling prices,

and discount rate, required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair

value specialists.

How the Key Audit Matter Was Addressed in the Audit

Our audit procedures related to volume of shipments, selling price and discount rate used by management to estimate future cash flows

of the GCGUs and CGUs included the following, among others:

•We tested the effectiveness of internal controls over management’s valuation methodology and assumptions used, and

estimates of future cash flows, including controls over the determination of the recoverable amount of the GCGUs and CGUs.

•We evaluated management’s ability to reasonably estimate future cash flows by comparing actual results to management’s

historical forecasts.

•We evaluated the reasonableness of management’s estimates of future cash flows considering historical operating results,

current macroeconomic conditions, the consistency of estimates of future cash flows with available external third party data,

the consistency of the estimates of future cash flows to disclosures, internal and external communications of management and

the Board of Directors, and holding discussions with relevant personnel.

•We evaluated the effects of climate-related matters, including current legislation and regulations related to carbon emissions

as well as the Company’s ongoing initiatives to transition to a lower-carbon operations, including expected required

investments and risk premiums, when assessing the reasonability of management’s cash flow projections.

•With the assistance of our fair value specialists, we evaluated the reasonableness of the discount rate by:

◦Evaluating the reasonableness of the methodology used and underlying source information used in the Company’s

calculation of the discount rate.

◦Testing the mathematical accuracy of the calculation.

◦Developing an independent range of estimates and comparing the discount rate selected by management to our

range.

•We evaluated the impact of any changes in management’s cash flow forecasts from October 1, 2021, the annual

measurement date for testing impairment of goodwill, to December 31, 2021.

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Deferred Tax Assets - Refer to Note 10.4 to the Consolidated Financial Statements

Key Audit Matter Description

ArcelorMittal S.A. (parent company) has deferred tax assets primarily related to tax losses and other tax benefits carried forward. Under

current tax law in Luxembourg, tax losses accumulated before January 1, 2017, do not expire and are recoverable against future

taxable income. The valuation of deferred tax assets requires management to make significant estimates related to the future taxable

income to be derived from entities within the Luxembourg tax integration and, as a result, the amounts of deferred tax assets expected

to be realized by ArcelorMittal S.A. The assessment of the likelihood of future taxable profits being available, and specifically the length

of the forecast periods utilized, requires significant management judgment.

The deferred tax asset balance as of December 31, 2021, was $8,147 million, which is primarily related to the Luxembourg tax

integration. Given the complexity of management’s valuation process, auditing management’s estimates of future taxable income and

the determination of whether it is probable that the deferred tax assets will be realized involved a high degree of auditor judgment and

an increased extent of effort, including the need to involve our tax specialists.

How the Key Audit Matter Was Addressed in the Audit

Our audit procedures related to estimates of future taxable income and determination of whether it is probable that the deferred tax

assets will be realized by ArcelorMittal S.A. included the following, among others:

•We tested the effectiveness of internal controls over management’s valuation of deferred tax assets, including the controls

over the assessment of the likelihood of future taxable profits being available and the length of the forecast periods.

•With the assistance of our tax specialists knowledgeable in Luxembourg-specific and international tax planning matters, we

evaluated whether management’s estimates of future taxable income were consistent with available evidence related to

management’s assessment of the likelihood of future taxable profits being available and the length of the forecast periods.

•We evaluated management’s ability to estimate future taxable income by comparing actual results to management’s historical

forecasts and considered the results in evaluating the current year estimated future taxable income.

•We evaluated management’s proposed tax planning strategies, potential tax implications of material current year or future

planned transactions (acquisitions, divestitures, finance, and shareholding restructuring) and the related impact on

management’s determination of the forecast periods and amounts of deferred tax assets recognized.

Other information

The Board of Directors is responsible for the other information. The other information comprises the information stated in the

consolidated management report and the Corporate Governance Statement, but does not include the consolidated financial statements

and our report of the "réviseur d’entreprises agréé" thereon.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance

conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so,

consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in

the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material

misstatement of this other information, we are required to report this fact. We have nothing to report in this regard.

Responsibilities of the Board of Directors for the Consolidated Financial Statements

The Board of Directors is responsible for the preparation and fair presentation of these consolidated financial statements in accordance

with IFRSs as adopted by the European Union, and for such internal control as the Board of Directors determines is necessary to

enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

362 Report of the réviseur d'entreprises agréé

In preparing the consolidated financial statements, the Board of Directors is responsible for assessing the Group’s ability to continue as

a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the

Board of Directors either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is responsible for presenting and marking up the consolidated financial statements in compliance with the

requirements set out in the Delegated Regulation 2019/815 on European Single Electronic Format as amended (“the ESEF

Regulation”).

Responsibilities of the “réviseur d’entreprises agréé” for the Audit of the Consolidated Financial Statements

The objectives of our audit are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free

from material misstatement, whether due to fraud or error, and to issue a report of the “réviseur d’entreprises agréé” that includes our

opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the EU

Regulation N° 537/2014, the Law of 23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF will always detect a material

misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,

they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial

statements.

As part of an audit in accordance with the EU Regulation N° 537/2014, the Law of 23 July 2016 and with ISAs as adopted for

Luxembourg by the CSSF, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

•Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error,

design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to

provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one

resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of

internal control.

•Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the

circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

•Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related

disclosures made by the Board of Directors.

•Conclude on the appropriateness of Board of Directors use of the going concern basis of accounting and, based on the audit

evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the

Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw

attention in our report of the “réviseur d’entreprises agréé” to the related disclosures in the consolidated financial statements

or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to

the date of our report of the “réviseur d’entreprises agréé”. However, future events or conditions may cause the Group to

cease to continue as a going concern.

•Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and

whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair

presentation.

•Obtain sufficient appropriate audit evidence regarding the financial information of the entities and business activities within the

Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and

performance of the Group audit. We remain solely responsible for our audit opinion.

Our responsibility is also to assess whether the consolidated financial statements have been prepared in all material respects with the

requirements laid down in the ESEF Regulation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and

significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

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We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding

independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our

independence, and where applicable, actions taken to eliminate threats or safeguards applied.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the

audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters

in our report unless law or regulation precludes public disclosure about the matter.

Report on Other Legal and Regulatory Requirements

We have been appointed as “réviseur d’entreprises agréé” by the General Meeting of the Shareholders on June 8, 2021, and the

duration of our uninterrupted engagement, including previous renewals and reappointments, is 15 years.

The consolidated management report is consistent with the consolidated financial statements and has been prepared in accordance

with applicable legal requirements.

The Corporate Governance Statement is included in the consolidated management report. The information required by Article 68ter

paragraph (1) letters c) and d) of the law of 19 December 2002 on the commercial and companies register and on the accounting

records and annual accounts of undertakings as amended, is consistent with the consolidated financial statements and has been

prepared in accordance with applicable legal requirements.

We have checked the compliance of the consolidated financial statements of the Group as at December 31, 2021, with the relevant

statutory requirements set out in the ESEF Regulation that are applicable to financial statements. For the Group it relates to:

•Financial statements prepared in a valid xHTML format; and

•The XBRL markup of the consolidated financial statements using the core taxonomy and the common rules on markups

specified in the ESEF Regulation.

In our opinion, the consolidated financial statements of the Group as at December 31, 2021, identified as “mt-2021-12-31-en”, have

been prepared, in all material respects, in compliance with the requirements laid down in the ESEF Regulation.

We confirm that the audit opinion is consistent with the additional report to the audit committee or equivalent.

We confirm that the prohibited non-audit services referred to in the EU Regulation N° 537/2014 were not provided and that we remained

independent of the Group in conducting the audit.

For Deloitte Audit S.à r.l., Cabinet de révision agréé

Olivier Lefèvre, Réviseur d’entreprises agréé

Partner

March 11, 20222

364 Report of the réviseur d'entreprises agréé