ArcelorMittal — Audit Report / Information 2021

Jun 28, 2022

Table of content

Introduction	2
Basis of preparation	2
Overview of payments	4
Payments per government and project	5
Bosnia and Herzegovina	5
Brazil	6
Canada	7
Kazakhstan	8
Liberia	9
Mexico	10
Ukraine	11

Introduction

ArcelorMittal has prepared this consolidated report (the "Report") on payments to governments with respect to its extractive activities in accordance with the European Union directives 2013/34/EU and 2013/50/EU ("EU Directives") as transposed into the Luxembourg laws of December 18, 2015 and May 10, 2016 (the "Transparency Law"). These EU Directives have been derived from the Extractive Industries Transparency Initiative ("EITI"), a global standard to promote the open and accountable management of natural resources of which ArcelorMittal is a corporate supporter in order to strengthen governance, foster socioeconomic development and help the overall business climate to become more open, fair and competitive. The "Basis of preparation" section provides information about the content of the Report, the types of payments included and the reporting principles that have been applied in preparing the Report.

The latest edition of ArcelorMittal's integrated annual online review "Sustainable progress" which can be accessed at https:// corporate.arcelormittal.com/sustainability provides further details on the broader spectrum of socio-economic contributions ArcelorMittal brings to local communities and countries in respect of its operations.

Basis of preparation

Under the Transparency Law, ArcelorMittal is required to prepare a consolidated report on payments made to governments in relation to its extractive industries including any subsidiary included in its consolidated financial statements, which are available on the Company's website https://corporate.arcelormittal.com/corporate-library/reporting-hub?type=Payments%20to %20government#.

Reporting principles

The Transparency Law requires payments to be reported when they are made to governments by ArcelorMittal for its extractive activities.

The Report states the total amount of payments made to each government in accordance with the Transparency Law and the amount per type of payment made to each government.

Payments in the Report are also attributed to a specific project or disclosed at an entity level. Where payments have been attributed to a project, the Report shows the total amount of payments made for each project and the amounts per type of payment.

The Transparency Law also prescribes that the disclosure of payments should reflect the substance of each payment and the relevant project concerned. Accordingly, ArcelorMittal has applied the following reporting principles:

• Payments made to governments by ArcelorMittal subsidiaries are reported in full including payments made to governments in connection with joint ventures to the extent that ArcelorMittal makes the relevant payment.
• Payments made to governments by joint operations in which ArcelorMittal exercises joint control and has rights to the assets and obligations for the liabilities relating to the arrangement are reported in proportion of ArcelorMittal's share.
• Payments made to governments by joint ventures and associates accounted for under the equity method are not included in this Report.
• Amounts payable to governments computed for extractive activities which are fully or partly offset by receivable amounts from non-extractive activities and as a consequence result in a nil or reduced net payment to governments are reported as nil or reported up to the net amount.
• Where a payment made to a government relates to activities that are both reportable under the Transparency Law and not reportable, the entire payment is reported if it is not possible to disaggregate it on a reasonable basis.
• A payment to a government relating to more than one project (for example income tax) is reported in aggregate if it is not possible to disaggregate the payment per project.

Activities within the scope of the Report

The Report includes all payments made to governments with respect to ArcelorMittal's activities involving exploration, prospection, discovery, development and extraction of minerals. This encapsulates the key stages of extractive activity, beginning with the search for natural resources and includes the evaluation of resource bearing geological features, the construction of facilities to enable the extraction of natural resources and the production of the natural resource up to the point that the extracted material is salable.

Payments made to governments relating to distribution activities and commercial development are not included in this Report as they are not within the scope of the Transparency Law.

Government

Under the Transparency Law, a government is defined as any national, regional or local authority of a country, including department, agency or undertaking controlled by that authority. In some countries, certain aboriginal or indigenous communities fall within the definition of a government.

Payments

Payments are reported on a cash basis meaning that they are reported in the period in which the payment occurred as opposed to being reported on an accrual basis which would mean they are reported in the period for which they are due. Refunds are also reported in the period they are received and are presented as negative amounts in the Report.

Payments in kind made to governments would also be included in this Report in accordance with the Transparency Law.

Project definition

The Transparency Law requires payments to be reported by project (as a sub category by country). It defines a project as the operational activities which are governed by a single contract, license, lease, concession or similar legal agreements and form the basis for payment of liabilities to a government. If these agreements are substantially interconnected, they should be treated as a single project. In accordance with the Transparency Law, "substantially interconnected" means forming a set of operationally and geographically integrated contracts, licenses, leases or concessions or related agreements with substantially similar terms that are signed with a government, giving rise to payment liabilities. These agreements may themselves be governed by a single contract, joint venture, production sharing agreement or other overarching legal agreement. Factors used to determine whether contracts or licenses are operationally and geographically integrated may include their common management framework, proximity and use of common infrastructure. The Report only contains details of projects for which reportable payments were made during the reporting period.

Disclosure threshold

The transparency Law requires payments exceeding €100,000 for a single payment or a series of related payments during the financial year to be included in this Report.

Reporting currency

All payments are reported in U.S. dollars corresponding to the presentation currency of ArcelorMittal's consolidated financial statements. Payments made in currencies other than U.S. dollar have been translated at the average exchange rate of the reporting period.

Types of payments

The Transparency Law refers to "payments" as an amount paid in cash or in kind for relevant activities where the payment is any of the following types:

Production entitlements

Production entitlements refer to production-sharing agreements following which the government is entitled to a share of the ore extracted. Such entitlements are regarded as payments in kind. There were no such payments reportable for the year ended December 31, 2021.

Taxes

The Report includes taxes levied on income, production or profits from extractive activities or withheld from dividends, royalties and interests. Taxes levied on consumption, sales, environmental taxes, property taxes, custom duties and personal income taxes are not reportable under the Transparency Law.

Royalties

Royalties represent a share of the output or the profit that can be paid in cash or in kind.

Dividends

Dividends paid in lieu of production entitlements or royalties are included in this Report. However, dividends paid to a government as a common shareholder are not reported to the extent that the dividend is paid to the government on the same terms as dividends paid to other common shareholders. There were no such payments reportable for the year ended December 31, 2021.

Fees

ArcelorMittal has included in this Report license fees, rental fees, entry fees and other payments that are made in consideration for licenses and/or concessions. Fees paid to governments for administrative services or supplies are not included in this Report.

Bonuses

Bonuses included in this Report correspond to signature, discovery and production bonuses. There were no such payments reportable for the year ended December 31, 2021.

Infrastructure improvements

Such payments correspond to payments made for infrastructure (for example roads or buildings) that forms part of the fundamental facilities and systems serving a community or area. Such payments are included in the Report regardless of whether or not these payments constitute a contractual obligation and they are reported when the relevant assets are handed over to the government.

Other considerations

Payments included in this Report are presented in U.S. dollars with all amounts rounded to the nearest thousands.

Overview of payments

The table below shows the payments made to governments by the Company during the year ended December 31, 2021 by country and type of payment.

				Infrastructure
in thousands U.S. dollars	Taxes	Royalties	Fees	improvements	Total
Bosnia and Herzegovina	620	1,483	—	—	2,103
Brazil	—	7,776	—	—	7,776
Canada1	513,722	6,285	1,513	1,497	523,017
Kazakhstan	3,639	10,141	379	—	14,159
Liberia	5,467	14,863	4,310	9,266	33,906
Mexico	1,745	3,678	3,829	—	9,252
Ukraine1	228,542	—	—	—	228,542
Total	753,735	44,226	10,031	10,763	818,755

1. Taxes include payments or refunds for activities that are both reportable under the Transparency Law and not reportable, as it is not possible to disaggregate on a reasonable basis.

Payments per government and project

The tables below show the payments made to governments by the Company on a government and project basis for each type of payment during the year ended December 31, 2021.

Bosnia and Herzegovina

Payments per government		Taxes	Royalties	Fees	Total
Republic of Srpska		620	1,483	—	2,103
Payments per project	Mine type	Taxes	Royalties	Fees	Total
Mine Prijedor (Buvac pit)	Iron ore	620	1,483	—	2,103

Payments per government	Taxes	Royalties	Fees	Total
DNPM – National Department of Mineral Production	—	6,867	—	6,867
State Finance Secretary (SEFAZ - MG)	—	909	—	909
Total Brazil	—	7,776	—	7,776

Payments per project	Mine type	Taxes	Royalties	Fees	Total
Andrade Mine	Iron ore	—	2,985	—	2,985
Serra Azul Mine	Iron ore	—	4,791	—	4,791
Total Brazil		—	7,776	—	7,776

Canada

				Infrastructure
Payments per government	Taxes	Royalties	Fees	improvements	Total
Innu Takuaikan Uashat Mak	—	6,285	—	—	6,285
Ministère des Finances du Québec	311,205	—	1,183	—	312,388
Ministere des Finances du Québec (Refund)	(3,035)	—	—	—	(3,035)
Receveur général du Canada	205,429	—	—	1,497	206,926
McGill University	—	—	217	—	217
Ville de Fermont	—	—	113	—	113
Government of Alberta	673	—	—	—	673
Government of Alberta (refund)	(550)	—	—	—	(550)
Total Canada	513,722	6,285	1,513	1,497	523,017

Payments per project	Mine type	Taxes	Royalties	Fees	Infrastructure improvements	Total
Mines Canada ( Mont Wright - Fire Lake)	Iron ore	256,334	6,285	1,513	1,497	265,629
Payments not allocated to a specific project1		257,388	—	—	—	257,388
Total Canada		513,722	6,285	1,513	1,497	523,017

1. Taxes include payments for activities that are both reportable and not reportable under the Transparency Law, as it is not possible to disaggregate on a reasonable basis.

Kazakhstan

Payments per government		Taxes	Royalties	Fees	Total
Ministry of Finance		3,639	10,141	379	14,159
Total Kazakhstan		3,639	10,141	379	14,159
Payments per project	Mine type	Taxes	Royalties	Fees	Total
Atansore	Iron ore		534 831	—	1,365
Atasu	Iron ore		384 1,042	—	1,426
Kentobe	Iron ore		104 447	67	618
Lisakovsk	Iron ore		227 1,143	—	1,370
Temirtau coal mine	Coal	2,390	6,678	312	9,380

Total Kazakhstan 3,639 10,141 379 14,159

Liberia

Payments per government		Taxes	Royalties	Fees	Infrastructure improvements	Total
Ministry of Finance /LRA		5,467	14,863	3,360	—	23,690
Ministry of Mines		—	—	950	—	950
Ministry of Public Works		—	—	—	9,266	9,266
Total Liberia		5,467	14,863	4,310	9,266	33,906
					Infrastructure
Payments per project	Mine type	Taxes	Royalties	Fees	improvements	Total

Mine Liberia (Western Range Project) Iron ore 5,467 14,863 4,310 9,266 33,906 Total Liberia 5,467 14,863 4,310 9,266 33,906

Payments per government	Taxes	Royalties	Fees	Total
Internal Revenue Service (Secretaria de Hacienda)	1,745	—	—	1,745
Ministry of Economy (Secretaria de Economía)	—	3,678	3,829	7,507
Total Mexico	1,745	3,678	3,829	9,252

	Mine
Payments per project	type	Taxes	Royalties	Fees	Total
Faraon / FE	Iron ore	—	—	1,432	1,432
MS Oaxaca	Iron ore	—	—	760	760
Peña Colorada	Iron ore	1,687	2,835	355	4,877
Las Truchas	Iron ore	58	681	951	1,690
San Jose	Iron ore	—	162	331	493
Total Mexico		1,745	3,678	3,829	9,252

Ukraine

Payments per government		Taxes Royalties		Fees	Total
State Fiscal Service (State Budget)1	228,542		—	—	228,542
Total Ukraine	228,542		—	—	228,542
Payments per project	Mine type	Taxes	Royalties	Fees	Total
AM Berislav limestone mine (Staroselskoe pit)	Limestone	208	—	—	208
AMKR Open Pits (#2 Novokrivorozhskiy and #3 Valyavkinskiy deposit)	Iron ore	13,097	—	—	13,097
AMKR Underground Mine (Kirova Mine and Open pit Yuzhnyi)	Iron ore	4,621	—	—	4,621
Payments not allocated to a specific project1		210,616	—	—	210,616
Total Ukraine		228,542	—	—	228,542

1. Taxes include payments and refunds for activities that are both reportable and not reportable under the Transparency Law, as it is not possible to disaggregate on a reasonable basis.