ArcelorMittal — Environmental & Social Information 2023

Jun 29, 2023

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 "Driving forward" 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, 2022.

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, 2022.

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, 2022.

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, 2022 by country and type of payment.

				Infrastructure
in thousands U.S. dollars	Taxes	Royalties	Fees	improvements	Total
Bosnia and Herzegovina	389	1,633	—	—	2,022
Brazil	—	17,058	—	—	17,058
Canada1	1,374,431	6,672	1,437	8,970	1,391,510
Kazakhstan	34,249	—	392	—	34,641
Liberia	833	14,591	5,115	7,948	28,487
Mexico	31,507	—	4,124	—	35,631
Ukraine1	95,738	—	—	—	95,738
Total	1,537,147	39,954	11,068	16,918	1,605,087

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, 2022.

Bosnia and Herzegovina

Payments per government		Taxes	Royalties	Fees	Total
Republic of Srpska		389	1,633	—	2,022
Payments per project	Mine type	Taxes	Royalties	Fees	Total
Mine Prijedor	Iron ore	389	1,633	—	2,022

Payments per government	Taxes	Royalties	Fees	Total
DNPM – National Department of Mineral Production	—	15,943	—	15,943
State Finance Secretary (SEFAZ - MG)	—	1,115	—	1,115
Total Brazil	—	17,058	—	17,058

Payments per project	Mine type	Taxes	Royalties	Fees	Total
Andrade Mine	Iron ore	—	13,305	—	13,305
Serra Azul Mine	Iron ore	—	3,753	—	3,753
Total Brazil		—	17,058	—	17,058

Canada

				Infrastructure
Payments per government	Taxes	Royalties	Fees	improvements	Total
Innu Takuaikan Uashat Mak	—	6,672	—	—	6,672
Ministère des Finances du Québec	584,610	—	1,324	—	585,934
Ministere des Finances du Québec (Refund)	(392)	—	—	—	(392)
Receveur général du Canada	789,381	—	—	8,970	798,351
Receveur general du Canada (refund)	(170)	—	—	—	(170)
Ville de Fermont	—	—	113	—	113
Government of Alberta	1,002	—	—	—	1,002
Total Canada	1,374,431	6,672	1,437	8,970	1,391,510

Payments per project	Mine type	Taxes	Royalties	Fees	Infrastructure improvements	Total
Mines Canada ( Mont Wright - Fire Lake)	Iron ore	357,656	6,672	1,437	8,970	374,735
Payments not allocated to a specific project1		1,016,775	—	—	—	1,016,775
Total Canada		1,374,431	6,672	1,437	8,970	1,391,510

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	34,249	—	392	34,641
Total Kazakhstan	34,249	—	392	34,641

Payments per project	Mine type	Taxes	Royalties	Fees	Total
Atansore	Iron ore	1,862	—	—	1,862
Atasu	Iron ore	2,622	—	—	2,622
Kentobe	Iron ore	1,719	—	16	1,735
Lisakovsk	Iron ore	845	—	—	845
Temirtau coal mine	Coal	27,201	—	376	27,577
Total Kazakhstan		34,249	—	392	34,641

Liberia

				Infrastructure
Payments per government	Taxes	Royalties	Fees	improvements	Total
Ministry of Finance /LRA	833	14,591	3,360	—	18,784
Ministry of Mines	—	—	1,755	—	1,755
Ministry of Public Works	—	—	—	7,948	7,948
Total Liberia	833	14,591	5,115	7,948	28,487

					Infrastructure
Payments per project	Mine type	Taxes	Royalties	Fees	improvements	Total
Mine Liberia (Western Range Project)	Iron ore	833	14,591	5,115	7,948	28,487
Total Liberia		833	14,591	5,115	7,948	28,487

Payments per government	Taxes	Royalties	Fees	Total
Internal Revenue Service (Secretaria de Hacienda)	22,142	—	—	22,142
Ministry of Economy (Secretaria de Economía)	9,365	—	4,124	13,489
Total Mexico	31,507	—	4,124	35,631

	Mine
Payments per project	type	Taxes	Royalties	Fees	Total
Faraon / FE	Iron ore	—	—	1,556	1,556
MS Oaxaca	Iron ore	—	—	825	825
Peña Colorada	Iron ore	26,792	—	370	27,162
Las Truchas	Iron ore	4,349	—	1,014	5,363
San Jose	Iron ore	366	—	359	725
Total Mexico		31,507	—	4,124	35,631

Ukraine

Payments per government	Taxes		Royalties	Fees	Total
State Fiscal Service (State Budget)1	95,738		—	—	95,738
Total Ukraine	95,738		—	—	95,738
Payments per project	Mine type	Taxes	Royalties	Fees	Total
AM Berislav limestone mine (Staroselskoe pit)	Limestone	64	—	—	64
AMKR Open Pits (#2 Novokrivorozhskiy and #3 Valyavkinskiy deposit)	Iron ore	80,959	—	—	80,959
AMKR Underground Mine (Kirova Mine and Open pit Yuzhnyi)	Iron ore	6,691	—	—	6,691
Payments not allocated to a specific project1		8,024	—	—	8,024
Total Ukraine		95,738	—	—	95,738

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.