acquisition of tinfos as - fesimg ♦fesi ♦sic ♦recarburizers ♦cac 2...

ALLOYS,ORES AND PEOPLE.

ACQUISITION OF TINFOS ASACQUISITION OF TINFOS AS

CONFERENCE CALL – 15 APRIL 2008

Patrick BUFFETChairman and Chief Executive Officer

Philippe Vecten – Senior Executive Vice-President, Director of the Manganese divisionJean-Didier Dujardin – Chief Financial Officer

Philippe Joly – Vice President Strategy and Financial Communication

CONFERENCE CALL – 15 APRIL 2008

Patrick BUFFETChairman and Chief Executive Officer

Philippe Vecten – Senior Executive Vice-President, Director of the Manganese divisionJean-Didier Dujardin – Chief Financial Officer

Philippe Joly – Vice President Strategy and Financial Communication

GROUP

Conference call – 15 April 2008 – Acquisition of Tinfos AS- 2

INTRODUCTIONAgreement with key shareholders for a friendly takeover by Eramet of most of TINFOS AS assets for a total transaction enterprise value of € 593 million*, equivalent to a 2007 EBITDA multiple of 7.8.

About TINFOS ASA Norwegian family owned companyA high quality and competitive portfolio of assets in NorwayCompetitive long term power contracts complement stakes in power assets

limited net exposure to market power ratesA great complement to Eramet manganese alloys operations

A significant and value enhancing development for Eramet:Turnover of € 931 million in 2007 of which € 530 M from trading for other producersEBITDA of € 76 M in 2007Minimum annual operational synergies in a range of € 10 to 15 M pretaxAcquisition would be value accretive by a minimum of 4% from year 2009 onwards

A unique opportunity in the sector

The acquisition project is subject to customary approvals from competition and other regulatory authorities and the consent of the annual general meeting scheduled for 16 April 2008 to resolution n°9, relating to share-for-share contributions.

TINFOS AS

* Based on the one month average Erametshare prices as of 11 April 2008

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BUSINESS OVERVIEW

Tinfos AS, a Norwegian family-owned company, was founded in 1875 and developed in the early 1900’s in ferro-alloys and manganese production

It currently operates around 4 main activities

• Jernverk: silicomanganese production Capacity of about 180,000 tons

• Tinfos Titan & Iron (titanium slag and pig iron)– TiO2-slag: used mainly for the production

of white titanium dioxide pigmentsEnd-markets: paints, paper and plastics

– Pig iron (high purity): used in automotive components and other applications with high quality requirements

• Tinfos International: trading of metallurgical products for the foundry and steel industry(bulk ferro alloys, ferro alloys, noble alloys, pig iron and non-ferrous alloys)

• Power production: stakes in several power plants in Norway

Tinfos employs c.500 persons

Worldwide locations

Subsidiaries (sales, services and trading) and representationsSales agentsProduction and head office

Tinfos AS, Main office and

marketing department

Tinfos AS,Power plant

Tinfos Titan & Iron and DNN,

Tyssedal

Tinfos Jernverk AS,

Kvinesdal






Tyssedal

Tinfos Jernverk AS,

Kvinesdal






Tyssedal

Tinfos Jernverk AS,

Kvinesdal





Tyssedal

Tinfos Jernverk AS,

Kvinesdal





Tyssedal

Tinfos Jernverk AS,

Kvinesdal

Overview

Divisional overview

Tinfos Jernverk Tinfos Titan & Iron and DNN Tinfos International

Busin

ess

♦ Silico-manganese

♦ TiO2(titanium dioxide) slag and high purity pig iron

♦ Distribution of – foundry

products – ferrous

alloys– non-

ferrous metals

♦ 100% owned hydro power plant

Notoddenplant

Tinfos AS

♦ Thermal power plant using off-gases from Jernwerk

♦ Municipalities and long term contracts

♦ Energy rights at a power plant, which is 40% owned by Tinfos through its subsidiary DNN

♦ None ♦ Hydro power plant

Ener

gy re

sour

ces

100% held 100% held 100% held 100% held *

* Eramet 40% after transaction

TINFOS AS

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STRONG MARKET FOR MANGANESE ALLOYS, DRIVEN BY WORLD STEEL PRODUCTION

About 10 Kg of Mn alloys / tonne in carbon steel

No substitute for manganese in steel production

World carbon steel growth of about 7 % per year since 2000

Growth driven by China and other emerging economies

ERAMET MANGANESE ALLOYS: VERY POSITIVE OUTLOOK

0

200

400

600

800

1000

1200

1400

1600

2004 2005 2006 2007 2008 P

millions t

+ 26,8 %

+ 7,3 %+ 9,1 %

+ 19,1 % + 15,4 %

+ 7,3 %

+ 10,4 %

+ 5,6 %

China

World

World production of carbon steel(crude steel equivalent)

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0

500

1000

1500

2000

2500

3000

Jan.1996 Jan.1997 Jan.1998 Jan.1999 Jan.2000 Jan.2001 Jan.2002 Jan.2003 Jan.2004 Jan.2005 Jan.2006 Jan.2007 Jan,2008

High carbon ferromanganese SilicomanganeseMedium carbon ferromanganese€ / t

HCFeMn

SiMn

MCFeMn

SPOT PRICE - EUROPE

SHARP UPTURN IN MN ALLOY PRICES

MANGANESE ALLOY PRICES

Source: CRU

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ERAMET MANGANESE, A HIGHLY COMPETITIVE AND WELL POSITIONED PRODUCER OF MN ALLOYS

Significant position in a fragmented marketEramet Manganese alloys production: 760 000 tonnes in 2007, of which 330 000 t in Norway

World market = around 13 million tonnes in 2007World # 2 producer of manganese alloys, with about 6 % of the marketDiversified product range

Eramet Manganese: an integrated producer with Comilog in Gabon, world second largest producer of high grade manganese ore

A key strategic edge in a tight ore market

Global geographic reachManganese alloy plants in: Norway, China, France, USA

Highly competitive operations following Heavy restructuring in 2003Continuous productivity improvements

ERAMET MANGANESE ALLOYS

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A STRONG INDUSTRIAL RATIONALE

20% increase in total manganese alloys production for Eramet Manganese

Eramet has been operating two manganese alloys plants in Norway atPorsgrunn and Sauda since 1999:

About 330 000 tonnes in 2007395 people employed in Norway

Tinfos AS: competitive power position with long term power contracts and power generation capacities

Addition of Tinfos Kvinesdal manganese alloys plant allows for significantsynergies, including:

Optimisation of raw materials supplies (manganese ore and rich slag)Specialisation of plants, yielding higher productivityPurchases and logistics

This operation will also durably secure Tinfos supplies of manganese ore

TINFOS AS ACQUISITION

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TIO2-SLAG AND HIGH PURITY PIG IRON

TiO2-slag: intermediate product for TiO2 pigments production (sulfate process)

Tinfos purchases ilmenite ore and processes it using rotary kiln and electricarc furnaces

Similar technologies used in Eramet Group

TiO2-slag: 202 000 tonnes/year capacity; 190 employees

Competitive power position

Market expected to grow by 3% / year

By-product: high purity pig iron(capacity: 111,000 tonnes/year)

Possible development within Eramet growth strategy, to be validated

TiO2 pigmentsWorld consumption

TINFOS AS ACQUISITION

Source : IBM

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TRADING

Selling, distribution and trading of metallurgical products, both on behalf of TINFOS and for other producers67 employeesFocus on alloys for steel production and foundries as well as non-ferrousmetals

Possible development within Eramet growth strategy, to be validated

TINFOS INTERNATIONAL

♦ Pig iron– nodular– hematite– basic

♦ FeSiMg♦ FeSi♦ SiC♦ Recarburizers♦ CaC2♦ FeP♦ Motor/iron scrap

♦ SiMn/SiMn LC♦ Mn-metal♦ FeSi♦ FeMo♦ FeNb♦ FeV♦ FeTi♦ CaSi/cored wire♦ FeCr HC + LC

♦ Zinc♦ Zn-alloys♦ Nickel♦ Lead

Foundry Ferrous alloys Non ferrous metals


TRANSACTION HIGHLIGHTS

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THE TRANSACTION

Eramet acquires 100% of Tinfos AS « Metals » business and 40% of the Notodden hydropower plant

Transaction structure

Nature of the transaction

A mix cash and share transaction (approximately 50/50 subject toEramet share price at the time of closing)

Approximately 383,000 new shares to be issued by Eramet

Total consideration for the contemplated assets

Enterprise value: € 593 million1

Equity value: € 635 million1

1 – based on Eramet 1 month average share price as of April 11th, 2008¹ (€ 494)

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OF THE CONTEMPLATED TRANSACTION

Note:1- Based on Eramet 1-month average share price as of April 11th, 2008 (€494)2- Transaction value = €592m (transactions with MM. Halvor and Kjetil Holta) + €43m (« Metals » minority buy-back in cash)3- Ownership of Notodden post-transaction: Eramet = c.40%, Halvor Holta= c.53%, Minorities=c.7%4- Excluding net cash position (€42m)

Eramet owns post-transaction 100% of « Metals » and 40%³ of « Notodden » for a total transaction value of €635m¹²4

Share based consideration: 252,885 Eramet treasury shares obtained from the SLN share exchange with STCPI on 23 July 2007 + approximately 383,000 new Eramet shares to be issued

Post transaction, Tinfos shareholders will own approximately 2.4% of Eramet’s share capital and 1.4% of its voting rights

Dilution of 1.48%

In €mCash paid to minorities 43Cash paid to M. Kjetil Holta and related parties 278

Total cash paid (€m) 321

Number of shares In €mEramet shares offered to M. Kjetil Holta and related parties 240,650 119Eramet shares offered to M. Halvor Holta and related parties 394,896 195

Total number of shares offered to MM. Kjetil and Halvor Holta and related parties 635,546 314

In €mTotal transaction value (€m) 635

SUMMARY

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A VALUE ENHANCING ACQUISITION

Acquisition would be value accretive by a minimum of 4% from year 2009 onwards

Strong synergies : minimum annual operational synergies in a range of € 10 to 15 M pretax

Transaction multiple of:

7.8 x on a 2007 EV/EBITDA basis4.9 x on an estimated 2008 EV/EBITDA basis

A favourable transaction for Eramet’s shareholders

GROUP


TyssedalTiO2-slag and

High purity pig iron

NotoddenHydroelectricity plant

FACILITIES

Kvinesdal

Silico manganese

TINFOS AS

GROUP


Eramet Nickel54.2%

Eramet Manganese39.7%

Eramet Alloys (Specialty Steel)

6.1%



21.9%Eramet Nickel

27.3%

Eramet Nickel34.0%


27.2%


Eramet Nickel57.2%



6.4%

Sales contribution (€3,792m)

EBIT contribution (€1,196m)

Sales contribution (€4,723m)

EBIT contribution (€1,262m)

IMPACT ON ERAMET FINANCIAL PROFILE

Eramet financials – Pro-forma for Tinfos (2007)

Eramet financials – Standalone (2007)

Of which Tinfos 19.6%

Of which Tinfos 5.2%


APPENDIX

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A TWO-STEP TRANSACTION

Eramet and the main shareholders of Tinfos AS (representing together c.93% of the shares) have signed agreements by which Eramet will acquire all the assets of Tinfosexcluding a 60% interest in the Notodden hydropower plant

Eramet will first buy the shares of the main shareholder, Mr. Kjetil Holta (c.56%), in an approximately 70% cash / 30% shares consideration

Eramet will split Tinfos AS into two separate entities: the manganese, titan & iron and trading activities (« Metals »)the Notodden hydropower plant

Eramet will acquire 100% of « Metals » and will retain a 40% interest in Notodden through a share exchange with Mr. Halvor Holta, the other main shareholder (c.37%)

The remaining minority shareholders in « Metals » (c.7%) will be offered the possibility to exit in cash

Following completion, Tinfos AS shareholders involved in the agreements will own together 2.4% of Eramet’s shares

The acquisition project is subject to customary approvals from competition and other regulatory authorities and the consent of the annual general meeting scheduled for 16 April 2008 to resolution n°9, relating to share-for-share contributions.

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