ACERINOX NEGOTIATING TO BUY 64% OF COLUMBUS

Acerinox, S.A. has signed a non-binding memorandum of understanding with Highveld Steel and Vanadium Corporation Limited (a South African subsidiary of Anglo American plc), Samancor Limited (a South African subsidiary of BHP Billiton plc) and the Industrial Development Corporation of South Africa Limited, who are the three equal partners in the Columbus Joint Venture which owns and operates an integrated stainless steel mill for flat products at Middleburg in Mpumalanga Province, South Africa.
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Acerinox, S.A. has signed a non-binding memorandum of understanding with Highveld Steel and Vanadium Corporation Limited (a South African subsidiary of Anglo American plc), Samancor Limited (a South African subsidiary of BHP Billiton plc) and the Industrial Development Corporation of South Africa Limited, who are the three equal partners in the Columbus Joint Venture which owns and operates an integrated stainless steel mill for flat products at Middleburg in Mpumalanga Province, South Africa.

In the year 2000, Columbus produced 532,000 Mt of stainless steel slab. Its turnover was R4,020 million (644 million €) the major part being exports. The local South African market has grown at an average annual rate of 18% during the past 15 years and reached 123,000 Mt in 2000. The mill is one of only two facilities in the world with the potential to make use of liquid ferrochrome in the production process.

In terms of the memorandum of understanding it is contemplated that:

(i) Highveld, Samancor and IDC would subscribe equally for 5,8 million new shares in Acerinox, equivalent to an 8,8% interest in the increased issued share capital in that company, at an issue price of 40 € per share;
(ii) the business of Columbus would be transferred at the end of 2001 into a new South African company in which Acerinox would acquire a 64% interest for 232 million €;
(iii) the South African company would:

(a) have an initial equity value of approximately R2,5 billion (362 million €) and net debt of approximately R700 million (101 million €);
(b) enter into a technical assistance agreement with Acerinox and a ferrochrome supply agreement with Samancor.

The proposed transactions are subject to formal written agreements being negotiated and concluded amongst the parties, the satisfactory completion of due diligence and the requisite approvals from the respective boards, stock exchanges and other regulatory authorities and third parties.

Upon completion of the transactions, the Acerinox Group would become the world’s third largest stainless steel producer with an annual capacity of 2,5 million Mt.

Anglo American and BHP Billiton are two of the world’s largest mining and resources companies with important interests in ferrochrome and nickel.

Madrid, July 24, 2001