Permission to reprint or distribute any content from this presentation requires the prior written approval of Standard & Poor’s. Copyright © 2012 Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc. All rights reserved. How Are Brazilian Metals & Mining and Forest Products Companies Weathering the Challenging Global Environment? Reginaldo Takara Managing Director, Corporate Ratings February 2012

2. Permission to reprint or distribute any content from this presentation requires the prior written approval of Standard & Poor’s. Rating Outlook Distribution for Rated Entities Most companies have stable outlooks: –Vale: A-/Stable/-- (u/g 23.nov.11) –CSN: BBB-/Stable/-- (aff 22.nov.11) –Gerdau: BBB-/Stable/-- (stb outlk 24.nov.11) –Usiminas: BBB-/Negative/-- (aff neg 18.mar.12) –Klabin: BB+/Stable/-- (aff 27.dec.11) –Suzano: BB+/Negative/-- (outlk neg from stb 23.nov.11) –Fibria: BB/Stable/-- (outlk stb from pos 23.nov.11) –Magnesita: BB-/Positive/-- (outlk pos from stb 31.may.11)

3. Permission to reprint or distribute any content from this presentation requires the prior written approval of Standard & Poor’s. Rated Brazilian Metals & Mining Companies Steel Companies –Excess capacity globally should keep downward price pressure –Import competition, either active or latent, will remain a risk –Input cost pressure (iron ore, coal) –Strong currency as a negative –Strong liquidity Mining Companies –Tight supply of iron ore should keep prices firm in the intermediate term –Demand should remain growing, even with China growing at a slower pace –Strong cost position due to favorable mining reserves and low costs –High capital expenditures to expand capacity –Strong liquidity

4. Permission to reprint or distribute any content from this presentation requires the prior written approval of Standard & Poor’s. Rated Brazilian Forest Products Companies Market Pulp –Excess capacity globally should keep downward price pressure –New capacities coming onstream in the intermediate term increase uncertainty –Strong currency as a negative cost factor – Decisions about capital expenditures may change leverage trends Paper –Import competition, especially from China, should grow in the intermediate term –Cost position is favorable because of competitive pulp –Some niche, profitable markets should remain strong, as packaging –High gross debt leverage is a concern

5. Permission to reprint or distribute any content from this presentation requires the prior written approval of Standard & Poor’s. Our expectations for Metals & Mining… We expect performance for steel makers to improve slightly, more so in second half 2012, but we are more cautious about the uncertain global environment Steel makers will also have to work hard to keep improving cost structures –No significant room for price increases –Demand in Brazil should remain firm, thanks to increasing investments in capacity expansion Mining companies should keep reporting sound cash flows. Downside risks in China, mainly M&A may pick-up as opportunities grow, but companies have been generally more conservative/prudent about their non- organic expansions

6. Permission to reprint or distribute any content from this presentation requires the prior written approval of Standard & Poor’s. Our expectations for Forest Products… We expect performance to remain volatile in the intermediate term as prices have softened recently Many players are seeking ways to improve their capital structures –Asset sales –Equity infusions Expansion plans have been generally put on hold M&A activity is not clear right now due to high leverage reported by most players, but may pick-up as opportunities grow

7. Permission to reprint or distribute any content from this presentation requires the prior written approval of Standard & Poor’s. FX Appreciation on Flat Steel Makers

8. Permission to reprint or distribute any content from this presentation requires the prior written approval of Standard & Poor’s. Steel Exports Pre And Post Crisis

9. Permission to reprint or distribute any content from this presentation requires the prior written approval of Standard & Poor’s. Profitability Softening EBITDA Margin Evolution Since 4Q2009

10. Permission to reprint or distribute any content from this presentation requires the prior written approval of Standard & Poor’s. Some Companies Still Have High Capex Ahead Capex/Sales Since 4Q2009

11. Permission to reprint or distribute any content from this presentation requires the prior written approval of Standard & Poor’s. Cash Flow Protection Metrics Weakening FFO/TD Since 4Q2009

12. Permission to reprint or distribute any content from this presentation requires the prior written approval of Standard & Poor’s. Liquidity Remains Strong (FFO+Cash)/TD Since 4Q2009

13. Permission to reprint or distribute any content from this presentation requires the prior written approval of Standard & Poor’s. Key Themes for Brazil’s M&M and Forest Products FX Appreciation –Affecting cost position of all companies, more so for steel makers and market pulp producers –Increases import competition in steel Capital Expenditures Trends Are Mixed –New investments in iron ore expansion –Some pulp investments delayed –Adequate funding under our base case assumptions Maturities expected to be manageable –Pulp companies seeking to reduce leverage –Covenant breaches waived

14. Permission to reprint or distribute any content from this presentation requires the prior written approval of Standard & Poor’s. Main Risks Slower growth in China Input cost pressures coupled by FX appreciation Competitive pressures: Steel from low-cost countries, new capacities in pulp coming onstream More aggressive M&A Global economic slowdown (chance stands at 25% in U.S. and 40% in Europe)

15. Permission to reprint or distribute any content from this presentation requires the prior written approval of Standard & Poor’s. Analytical Contacts U.S. –Marie Shmaruk, (212) Canada –Donald Marleau, (416) Europe –Andrey Nikolaev, Latin America –Reginaldo Takara, Asia –May Zhong,

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