UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

OR

For the fiscal year ended December 31, 20092010

OR

OR

Commission file number 333-146371

ARCELORMITTAL

(Exact name of Registrant as specified in its charter)

ARCELORMITTAL

(Translation of Registrant’s name into English)

Grand Duchy of Luxembourg

(Jurisdiction of incorporation or organization)

19, Avenue de la Liberté, L-2930 Luxembourg,

Grand Duchy of Luxembourg

(Address of Registrant’s principal executive offices)

Henk Scheffer, Company Secretary, 19, Avenue de la Liberté, L-2930 Luxembourg,

Grand Duchy of Luxembourg. Fax: 011 352 4792 89 3937

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

Securities for which there is reporting obligation pursuant to Section 15(d) of the Act:

None

Indicate the number of outstanding shares of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:

Common Shares

1,560,914,610

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes  x    No  ¨

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes  ¨    No  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP  ¨  International Financial Reporting Standards as issued by the International Accounting Standards

Board  x    Other  ¨

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

Item 17  ¨    Item 18  ¨

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  ¨    No  x

TABLE OF CONTENTS

i

ii

PRESENTATION OF FINANCIAL AND CERTAIN OTHER INFORMATION

Definitions and Terminology

Unless indicated otherwise, or the context otherwise requires, references herein to “ArcelorMittal”, “we”, “us”, “our” and “the Company” or similar terms are to ArcelorMittal, formerly known as Mittal Steel Company N.V. (“Mittal Steel”), having its registered office at 19, avenue de la Liberté, L-2930 Luxembourg, Grand Duchy of Luxembourg, and, where the context requires, its consolidated subsidiaries. ArcelorMittal’s principal subsidiaries, categorized by operating segment and location, are listed below.

All references herein to “Arcelor” refer to Arcelor, a société anonyme incorporated under Luxembourg law, which was acquired by Mittal Steel on August 1, 2006.

For the purposes of this annual report, the names of the following ArcelorMittal subsidiaries as abbreviated below will be used where applicable.

In addition, unless we have indicated otherwise, or the context otherwise requires, references in this annual report to:

Financial Information

This annual report contains the audited consolidated financial statements of ArcelorMittal (of which Mittal Steel Company N.V. is the predecessor) and its consolidated subsidiaries, including the consolidated statement of financial position as of December 31, 20082009 and 2009,2010, and the consolidated statements of operations, changes in equity and cash flows for each of the years ended December 31, 2007, 2008, 2009 and 2009.2010. ArcelorMittal’s consolidated financial statements were prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”).

ArcelorMittal’s significant acquisitions in 2007, 2008 and 2009 have been accounted for using the purchase method of accounting, with ArcelorMittal as the acquiring entity in accordance with IFRS 3, “Business Combinations”.

The financial information and certain other information presented in a number of tables in this annual report have been rounded to the nearest whole number or the nearest decimal. Therefore, the sum of the numbers in a column may not conform exactly to the total figure given for that column. In addition, certain percentages presented in the tables in this annual report reflect calculations based upon the underlying information prior to rounding and, accordingly, may not conform exactly to the percentages that would be derived if the relevant calculations were based upon the rounded numbers.

Market Information

This annual report includes industry data and projections about our markets obtained from industry surveys, market research, publicly available information and industry publications. Statements on ArcelorMittal’s competitive position contained in this annual report are based primarily on public sources including, but not limited to, publications of the International Iron and Steel Institute. Industry publications generally state that the information they contain has been obtained from sources believed to be reliable but that the accuracy and completeness of such information is not guaranteed and that the projections they contain are based on a number of significant assumptions. We have not independently verified this data or determined the reasonableness of such assumptions. In addition, in many cases we have made statements in this annual report regarding our industry and our position in the industry based on internal surveys, industry forecasts and market research, as well as our own experience. While these statements are believed to be reliable, they have not been independently verified, and we do not make any representation or warranty as to the accuracy or completeness of such information set forth in this annual report.verified.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This annual report and the documents incorporated by reference in this annual report contain forward-looking statements based on estimates and assumptions. This annual report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, among other things, statements concerning the business, future financial condition, results of operations and prospects of ArcelorMittal, including its subsidiaries. These statements usually contain the words “believes”, “plans”, “expects”, “anticipates”, “intends”, “estimates” or other similar expressions. For each of these statements, you should be aware that forward-looking statements involve known and unknown risks and uncertainties. Although it is believed that the expectations reflected in these forward-looking statements are reasonable, there is no assurance that the actual results or developments anticipated will be realized or, even if realized, that they will have the expected effects on the business, financial condition, results of operations or prospects of ArcelorMittal.

These forward-looking statements speak only as of the date on which the statements were made, and no obligation has been undertaken to publicly update or revise any forward-looking statements made in this annual report or elsewhere as a result of new information, future events or otherwise, except as required by applicable laws and regulations. In addition to other factors and matters contained or incorporated by reference in this annual report, it is believed that the following factors, among others, could cause actual results to differ materially from those discussed in the forward-looking statements:

These factors are discussed in more detail in this annual report, including under “Item 3D—Key Information—Risk Factors”.

PART I

Not applicable.

Not applicable.

A. Selected Financial Data

The following tables present selected consolidated financial information of ArcelorMittal and, where relevant, of its predecessor company Mittal Steel Company N.V., as of and for the years ended December 31, 2005, 2006, 2007, 2008, 2009 and 2009,2010, prepared in accordance with IFRS. This selected consolidated financial information should be read in conjunction with ArcelorMittal’s consolidated financial statements, including the notes thereto, included elsewhere herein.

In accordance with IFRS 5, Statements of Operations have been adjusted retrospectively for all periods presented due to the completion of the spin-off of stainless steel operations in a separately focused company, Aperam, on January 25, 2011. Stainless steel operations are therefore presented as discontinued operations.

Consolidated Statements of Operations

(Amounts in $ millions except per share data and percentages)

		2005				2006				2007				2008(6)				2009
Other Data
Net cash provided by operating activities		$	3,874			$	7,122			$	16,532			$	14,652			$	7,278
Net cash used in investing activities			(7,512	)			(8,576	)			(11,909	)			(12,428	)			(2,784	)
Net cash (used in) provided by financing activities			3,349				5,445				(3,417	)			(2,132	)			(6,347	)
Total production of crude steel (thousands of tonnes)			48,916				85,620				116,415				103,326				73,236
Total shipments of steel products (thousands of tonnes)(5)			44,614				78,950				109,724				101,691				71,071

Consolidated Statements of Financial Position⁽⁷⁾

(Amounts in $ millions except share data)

B. Capitalization and Indebtedness

Not applicable.

C. Reasons for the Offer and Use of Proceeds

Not applicable.

D. Risk Factors

Our business, financial condition, results of operations or prospects could be materially adversely affected by any of the risks and uncertainties described below.

Risks Related to the Global Economy and the Steel Industry

The sharp downturn in the global economy during 2008 and 2009in 2008-2009 caused a sharp reduction in worldwide demand for steel. Shouldsteel, and the recovery through 2010 has been slow and uncertain. If the global economy or the economies of ArcelorMittal’s key selling markets fail to recover or enterendure a protracted period of weak growth or fall back into recession, this would have a material adverse effect on the steel industry and ArcelorMittal.

ArcelorMittal’s activities and results are substantially affected by international, national and regional economic conditions. Starting in September 2008 and lasting through much of 2009, a steep downturn in the global economy, sparked by uncertainty in credit markets and deteriorating consumer confidence, sharply reduced demand for steel products worldwide. ThisThe crisis has had, and to some extent continues to have, a pronounced negative effect on ArcelorMittal’s business and results of operations.

Although the global economy showed signs of recovery bybegan to recover in the endsecond half of 2009, should the incipient recovery falter, the outlook for steel producers will again worsen.has been slow and uncertain. See “Item 5—Operating and Financial Review and Prospects—Overview—Economic Environment”. In particular, a renewedAnother recession, oran extended period of below-trend growth in the United States and Europe,developed countries or slow growtha slowdown in emerging economies that are substantial consumers of steel (such as China, Brazil, Russia and India, as well as emerging Asian markets, the Middle East and the Commonwealth of Independent States (“CIS”) regions) would have a material adverse effect on the steel industry. ContinuedRenewed weakness in sectors of the economy that are substantial consumers of steel products, such as the automotive industry (to which ArcelorMittal shipped approximately 9.8 million tonnes of steel in 2009 after having shipped 15.0 million tonnes in 2008) and the construction industry, or additional bankruptcies of large companies in such industries, would also hurt steel producers. Notwithstanding ArcelorMittal’s size and global presence, protracted declinesArcelorMittal. So far, the recovery from the economic crisis in steel consumption caused by poor economic conditions in any major markets or by the deterioration of the financial condition of any key customers would have a material adverse effect on demand for, and prices of, its products and hence its results. An uneven recovery, with positive growth limited to certain regions, or excluding key markets such as the European Union and the United States and Europe, which respectively accounted for 46%17% and 15%48% of the Company’sArcelorMittal’s sales in 2009,2010, has been feeble. An unsustainable or uneven recovery that bypasses such key markets, or a renewed global downturn, would also have an adverse effect on ArcelorMittal’s results of operations and prospects.

In response to the market downturn and the fall in demand for steel products towards the end of 2008 and the first half of 2009, the Company announced and began implementing several measures, including reducing capital expenditures, cutting costs, improving productivity, cutting steel production and reducing debt. See “Item 5—Operating and Financial Review and Prospects—Overview—Key Factors Affecting Results of Operations—Initiatives in Response to Changing Market Conditions” and “Item 5—Operating and Financial Review and Prospects—Liquidity & Capital Resources”. Although these measures helped the Company to weather the crisis, and while demand, production levels and prices have started to recover in certain segments and markets, the extent, timing and duration of the recovery remains uncertain. The extent to which the rebound in the steel market can be ascribed to a recovery in “real” underlying demand, as opposed to “apparent” demand resulting from de-stocking, remains uncertain. An unsustainable recovery and persistent weak economic conditions in any of the Company’s key markets would adversely affect operational results, and could necessitate the extension or expansion of the conservative measures undertaken during the crisis, which in itself could have a material adverse effect on the Company’s results of operations and growth prospects.

Excess capacity and oversupply in the steel industry globally and particularly in China may hamper the steel industry’s recovery and prolong the downward cycle.recovery.

In addition to economic conditions, the steel industry is affected by global production capacity and fluctuations in steel imports/exports and tariffs. The steel industry has historically suffered from structural over-capacity. The industry is currently characterized by a substantial increase in production capacity in the developing world, particularly in China, butand also in India and other emerging markets. China is now the largest global steel producer by a large margin, withand the balance between its domestic production and consumption beinghas been an important factor in global steel prices.prices in recent years. Chinese steel exports, or conditions favorable to them (excess steel capacity in China, an undervalued Chinese currency and/or higher market prices for steel in markets outside of China) can have a significant impact on steel prices in other markets, including the U.S. and Europe. Over the short to medium term ArcelorMittal isremains exposed to the risk of steel production increases in China and other markets outstripping increases in real demand, which may weigh on price recovery.

Protracted low steel prices would have a material adverse effect on the results of ArcelorMittal, as could price volatility.

Steel prices are volatile, reflecting the highly cyclical nature of the global steel industry. After rising steadily during 2007 and into the third quarter of 2008,until mid-2008, global steel prices fell sharply asduring the creditfinancial crisis led to a collapse in global demand.of late 2008. Prices remained depressed during the first half of 2009, despite widespread production cuts. Duringfor nearly a year, and although a gradual recovery commenced in the second half of 2009, a gradual recovery was seen in certain segments and markets.as of December 31, 2010 prices were still generally below their recent peaks (depending on the region). See “Item 5—Operating and Financial Review and Prospects—Overview��Overview—Key Factors Affecting Results of Operations—Steel Prices”. LowerLow steel prices have had an adverse effect on steel producers in general, including ArcelorMittal, due to lower revenues, margins and writedownspossible write-downs of finished steel products and raw material inventories.inventories (as experienced by ArcelorMittal in late 2008 and early 2009).

Significant price decreases during periods of economic weakness have historically not been balanced by a commensurate price increases during periods of economic strength.recovery. This has once again been the case during the recent cycle. Although prices have recovered and stabilized since the crisis to a certain degree, the timing and extent of the recovery and any potential return to pre-crisis price levels remains uncertain. The initial rebound in the international steel market was due in part to a rebound in apparent demand resulting from de-stocking. However, the extent of the recovery in real demand remains uncertain. A sustained price recovery will most likely require a broad economic recovery in order to underpin an increase in real demand for steel products by end users.

In addition to macroeconomic trends, steel prices are sensitive to developments in particular industries, such as the automotive, construction, appliance, machinery, equipment, infrastructure and transportation, which are the main markets for ArcelorMittal’s products. A resumed downturn in steel prices would materially and adversely affect ArcelorMittal’s revenues and profitability, including because of potential further write-downs of steel products and raw materials inventories.

See “Item 5—Operating and Financial Review and Prospects—Overview—Key Factors Affecting Results of Operations.”

Volatility in the supply and prices of raw materials, energy and transportation, includingand mismatches betweenwith steel price trends, in prices for raw materials and steel, as well as limitations on or disruptions in the supply of raw materials, could adversely affect ArcelorMittal’s profitability.

Steel production requires substantial amounts of raw materials and energy, including iron ore, coking coal and coke, scrap, electricity and natural gas, which are subject to significant price volatility. In 2006, 2007, and through the first half oflate 2008, the prices of most commodities used in the steel-making process rose sharply before collapsing in late 2008collapsed as a result of the global economic crisis. In May 2009,crisis, before recovering gradually by the end of 2010 to levels near those prevailing before the crisis, albeit with significant increased volatility, due mainly to strong demand from customers in China and other emerging markets and the evolution of raw materials pricing from annual, benchmark price of iron ore for 2009 was set at a level 28-33% below the 2008 benchmark price. Prices on thecontract-based prices to quarterly prices linked to spot market have since recovered significantly, and it is likely that benchmark iron prices for 2010 and 2011 will reverse some or all of the declines experienced during the height of the economic crisis. The prices of coking coal, zinc and nickel, as well as scrap, have followed a similar trend.references. See “Item 5—Operating and Financial Review and Prospects—Overview—Key Factors Affecting Results of Operations—Raw Materials.”

The availability and prices of raw materials may be negatively affected by, among other factors;factors: new laws or regulations; suppliers’ allocations to other purchasers; business continuity of suppliers; interruptions in production by suppliers;suppliers (as occurred, for example, with respect to coal supplies as a result of the major flooding in Queensland, Australia in late 2010); accidents or other similar events at suppliers’ premises or along the supply chain; wars, natural disasters and other similar events; fluctuations in exchange rates; consolidation in steel-related industries; the bargaining power of raw material suppliers and the availability and cost of transportation. Although ArcelorMittal has substantial captive sources of iron ore and coal from its own mines and is expanding output at such mines and also has new mines under development, it still obtains a significant portion of its raw materials requirements under long-term supply contracts (such as(for example, from the Brazilian mining company Vale). The raw materials industry is highly concentrated and suppliers in recent years have had significant pricing power, as was the case during 2007 and the first half of 2008, when demand peaked at record levels. Further consolidation among suppliers—for example, the announcedpower. In 2010, iron ore joint venture between mining companies BHP Billiton and Rio Tinto—would exacerbate this trend. Should raw materials suppliers discarded the long-prevailing industry practice of setting prices annually, which had provided a measure of short-term price stability, in favor of a system where prices are set on a quarterly basis. If suppliers were to move further toward sales based on spot prices, rather than long-term fixed price contracts, steel producers would face increased exposure to production cost and short-term price volatility, which may in turn reduce their access to reliable supplies of raw materials.volatility. Any prolonged interruption in the supply of raw materials or energy, or increases in costs which ArcelorMittal cannot pass on to its customers, could adversely affect its business, financial condition, results of operations or prospects.

Energy costs, including the cost of electricity and natural gas, also represent a substantial portion of the cost of goods soldproduced by steel companies.companies like ArcelorMittal. Historically, energy prices have varied significantly, and this trend may continue due to market conditions and other factors beyond the control of steel companies. Because the production of direct reduced iron, the production of steel in electric arc furnaces and the re-heating of steel involve the use of significant amounts of energy, steel companies are sensitive to natural gas and electricity prices and are dependent on having access to reliable supplies.

Despite the fact that steel and raw material prices are historically highly correlated with(for example, both having experienced significant declines during the crisis,recent economic crisis), this correlation is not guaranteed. In addition,For example, amid the recent slow and uncertain recovery, the price of iron ore—driven mainly by Chinese and international demand in emerging markets—has recovered faster than the price of steel in ArcelorMittal’s key markets in Europe and the United States, and ArcelorMittal has been exposed to a price-cost squeeze resulting mainly from high-priced raw materials inventories at certain points during the cycle. Because ArcelorMittal sources a substantial portion of its raw materials through annual fixed pricelong term contracts thereby creatingwith quarterly formula-based prices, it faces the risk of adverse differentials between its own production costs, which are affected by global raw materials prices, and trends for steel price trends, as was the case during the fourth quarter of 2008prices in regional markets. For additional details on ArcelorMittal’s raw materials supply and the first half of 2009, when the Company experienced a margin squeezeself-sufficiency, see “Item 4B—Business Overview—Raw Materials and recorded significant write-downs and provisions on raw material supply contracts.Energy”. If raw materials and energy prices rise significantly (either as a result of supply constraints or other reasons) but prices for steel products in ArcelorMittal’s markets do not increase commensurately, it would have a negative effect on ArcelorMittal’s business, financial condition, results of operations and prospects.

Developments in the competitive environment in the steel industry could have an adverse effect on ArcelorMittal’s competitive position and hence its business, financial condition, results of operations or prospects.

The markets in which steel companies operate are highly competitive. Competition—in the form of established producers expanding in new markets, smaller producers increasing production in anticipation of demand increases, amid an incipient recovery, or exporters selling excess capacity from markets such as China—could cause ArcelorMittal to lose market share, increase expenditures or reduce pricing. Any of these developments could have a material adverse effect on its business, financial condition, results of operations or prospects.

Unfair trade practices in ArcelorMittal’s home markets could negatively affect steel prices and reduce ArcelorMittal’s profitability, while trade restrictions could limit ArcelorMittal’s access to key export markets.

ArcelorMittal is exposed to the effects of “dumping” and other unfair trade and pricing practices by competitors. Moreover, government subsidization of the steel industry remains widespread in certain countries, particularly those with centrally-controlled economies such as China. As a consequence of the recent global economic crisis, there is an increased risk of unfairly-traded steel exports from such countries into various markets including North America and Europe, in which ArcelorMittal produces and sells its products. Such imports could have the effect of reducing prices and demand for ArcelorMittal products.

In addition, ArcelorMittal has significant exposure to the effects of trade actions and barriers due the global nature of its operations. Various countries have in the past instituted, or are currently contemplating the implementation of, trade actions and barriers, which could materially and adversely affect ArcelorMittal’s business by limiting the Company’s access to steel markets.

See “Item 4B—Information on the Company—Business Overview—Government Regulations”.

Developments in the competitive environment in the steel industry could have an adverse effect on ArcelorMittal’s competitive position and hence its business, financial condition, results of operations or prospects.

The markets in which steel companies operate are highly competitive. Competition—in the form of established producers expanding in new markets, smaller producers increasing production in anticipation of demand increases, amid an incipient recovery, or exporters selling excess capacity from markets such as China—could cause ArcelorMittal to lose market share, increase expenditures or reduce pricing. Any of these developments could have a material adverse effect on its business, financial condition, results of operations or prospects.

Competition from other materials could reduce market prices and demand for steel products and thereby reduce ArcelorMittal’s cash flow and profitability.

In many applications, steel competes with other materials that may be used as substitutes, such as aluminum (particularly in the automobile industry), cement, composites, glass, plastic and wood. Government regulatory initiatives mandating the use of such materials in lieu of steel, whether for environmental or other reasons, as well as the development of other new substitutes for steel products, could significantly reduce market prices and demand for steel products and thereby reduce ArcelorMittal’s cash flow and profitability.

ArcelorMittal is subject to strict environmental laws and regulations, including with respect to greenhouse gas emissions, that could give rise to a significant increase in costs and liabilities.

ArcelorMittal is subject to a broad range of environmental laws and regulations in each of the jurisdictions in which it operates. These laws and regulations impose increasingly stringent environmental protection standards regarding, among others, air emissions, wastewater storage, treatment and discharges, the use and handling of hazardous or toxic materials, waste disposal practices, and the remediation of environmental contamination. The costs of complying with, and the imposition of liabilities pursuant to, environmental laws and regulations can be significant. Failure to comply can result in civil and or criminal penalties being imposed, the suspension of permits, requirements to curtail or suspend operations, and lawsuits by third parties. Despite ArcelorMittal’s efforts to comply with environmental laws and regulations, environmental incidents or accidents may occur that negatively affect the Company’s reputation or the operations of key facilities.

Compliance with new and more stringent environmental obligations—particularly those arising from policies limiting greenhouse gas emissions—may require additional capital expenditures or modifications in operating practices, as well as additional reporting obligations. The integrated steel process involves carbon and creates carbon dioxide (CO₂), which distinguishes integrated steel producers from mini-mills and many other industries where CO₂ generation is primarily linked to energy use. The European Union has already established greenhouse gas regulations and many other countries, includingsuch as the United States, arehave debated similar measures and may enact them in the process of doing so.future. Such regulations, whether in the form of a national or international cap-and-trade emissions permit system, a carbon tax, or other regulatory initiative, could have a negative effect on ArcelorMittal’s production levels, income and cash flows. Such regulations could also have a negative effect on the Company’s suppliers and customers, which could result in higher costs and lower sales.

Moreover, many developing nations, includingsuch as China, India and certain others, have not yet instituted significant greenhouse gas regulations. It is possible that any international agreement to regulate emissions (including any pact that emerges in the aftermath of the December 2009 UN Climate Change Conference in Copenhagen) may provide exemptions and lesser standards for developing nations. In such case, ArcelorMittal may be at a competitive disadvantage relative to steelmakers having more or all of their production in such countries.

ArcelorMittal also incurs costs and liabilities associated with the assessment and remediation of contaminated sites. In addition to the impact on current facilities and operations, environmental remediation obligations can give rise to substantial liabilities in respect of divested assets and past activities. This may be also the case for acquisitions when liabilities for past acts or omissions are not adequately reflected in the terms and price of the acquisition. ArcelorMittal could become subject to further remediation obligations in the future, as additional contamination is discovered or cleanup standards become more stringent.

Costs and liabilities associated with mining activities include those resulting from tailings and sludge disposal, effluent management, and rehabilitation of land disturbed during mining processes. ArcelorMittal could become subject to unidentified liabilities in the future, such as those relating to uncontrolled tailings breaches or other future events or to underestimated emissions of polluting substances.

ArcelorMittalArcelorMittal’s operations may be located in areas where individuals or communities may regard its activities as having a detrimental effect on their natural environment and conditions of life. Any actions taken by such individuals or communities in response to such concerns could compromise ArcelorMittal’s profitability or, in extreme cases, the viability of an operation or the development of new activities in the relevant region or country.

See “Item 4B—Information on the Company—Business Overview—Government Regulations—Environmental Laws and Regulations” and “Item 8A—Financial Information—Consolidated Statements and Other Financial Information—Legal Proceedings.”

ArcelorMittal is subject to stringent health and safety laws and regulations that give rise to significant costs and liabilities.

ArcelorMittal is subject to a broad range of health and safety laws and regulations in each of the jurisdictions in which it operates. These laws and regulations, as interpreted by relevant agencies and the courts, impose increasingly stringent health and safety protection standards. The costs of complying with, and the imposition of liabilities pursuant to, health and safety laws and regulations could be significant, and failure to comply could result in the assessment of civil and criminal penalties, the suspension of permits or operations, and lawsuits by third parties.

Despite ArcelorMittal’s significant efforts to monitor and reduce accidents at its facilities (see “Item 4B—Business Overview—Government Regulations—Health and Safety Laws and Regulations”), there remains a risk that health and safety incidents maydo occur, some of which may result in costs and liabilities and negatively impact ArcelorMittal’s reputation or the operations of the affected facility. Such incidentsaccidents could include explosions or gas leaks, fires or collapses in underground mining operations, vehicular accidents, other incidentsaccidents involving mobile equipment, or exposure to radioactive or other potentially hazardous materials. Some of ArcelorMittal’s industrial activities involve the use, storage and transport of dangerous chemicals and toxic substances, and ArcelorMittal is therefore subject to the risk of industrial accidents which could have significant adverse consequences for the Company’s workers and facilities, as well as the environment. Such incidentsaccidents could lead to production stoppages, loss of key personnel, the loss of key assets, or put at risk employees (and those of sub-contractors and suppliers) or persons living near affected sites.

ArcelorMittal may continue to be exposed to increased operational costs due to the costs and lost time associated with the HIV/AIDS and malaria infection rates within our workforce in Africa and other regions. ArcelorMittal may also be affected by potential H1N1 outbreaks of flu or other viruses or infectious diseases in any of the regions in which it operates.

Under certain circumstances, authorities could require ArcelorMittal facilities to curtail or suspend operations based on health and safety concerns. For example, following accidents in 2006 and 2007 that resulted in numerous fatalities, the Kazakh government threatened to revoke the operating license of ArcelorMittal Temirtau unless additional safety measures were implemented. Since then, ArcelorMittal has cooperated with authorities to implement these measures or otherwise reach agreement on necessary remedial action. Nevertheless, the episode remains illustrative of risks presented by health and safety issues, from both a reputational and operational standpoint.

See “Item 4B—Information on the Company—Business Overview—Government Regulations—Environmental Laws and Regulations” and “Item 8A—Financial Information—Consolidated Statements and Other Financial Information—Legal Proceedings.”

Risks Related to ArcelorMittal

ArcelorMittal has a substantial amount of indebtedness, which could make it more difficult or expensive to refinance its maturing debt, incur new debt and/or flexibly manage its business.

As of December 31, 2009,2010, ArcelorMittal had total debt outstanding of $25$26.0 billion, consisting of $4$6.7 billion of short-term indebtedness (including payables to banks and the current portion of long-temlong-term debt) and $21$19.3 billion of long-term indebtedness. As of December 31, 2009,2010, ArcelorMittal had $6$6.3 billion of cash and cash equivalents ($6.2 billion) including short-term investments and restricted cash ($0.1 billion), and $11$11.3 billion available to be drawn under existing credit facilities. Substantial amounts of indebtedness mature in 2010 ($4.1 billion), 2011 ($4.36.7 billion), 2012 ($1.51.3 billion), 2013 ($4.14.0 billion) and 2014 ($4.03.5 billion). See “Item 5B—Operating and Financial Review and Prospects—Liquidity and Capital Resources”.

In response to the downturn in the global steel market and difficult credit market conditions in late 2008, ArcelorMittal reduced its “net debt” (i.e., long-term debt plus short-term debt less cash and cash equivalents and restricted cash) by approximately $13.7 billion at the end of 2009 from September 30, 2008. This reduction, as well as an extension of ArcelorMittal’s debt maturity profile, resulted in part from a series of debt, equity and convertible bond offerings in 2009 totaling approximately $13.1 billion. Although these transactions improved the Company’s liquidity position, debt maturity profile and gearing, its financing costs have generally risen due to the higher interest rates paid on recent financings. See “Item 5—Operating and Financial Review and Prospects—Liquidity and Capital Resources—Financings—Debt Securities and Other Loans, Convertible Bonds and Equity Financings—2009 Capital Markets Transactions.”

Although the global financial crisis eased during the second half of 2009 and in 2010, conditions in global capital and credit markets generally remainhave remained volatile and uncertain, particularly for companies with high leverage or in sectors that have been especiallywere adversely affected by the global economic downturn, including steel and other basic material producers. Conditions in global financialFinancial markets could conceivably relapse and deteriorate sharply, as they did in September 2008, including in response to significant political or financial news such as significantlarge credit losses at a systemically important financial institution, the bankruptcy of a large company or heightened risk of default by a sovereign country (manyin Europe or elsewhere.

In addition, credit rating agencies could downgrade ArcelorMittal’s ratings (which are currently just above so-called “investment grade” levels) either due to factors specific to ArcelorMittal, a prolonged cyclical downturn in the steel industry, or trends in credit and capital markets more generally. Any decline in ArcelorMittal’s credit ratings, including a loss of which accumulated large amountsinvestment grade status, would substantially increase its cost of debt during the 2008-2009 recession as a resultborrowing and could significantly harm its financial condition, results of decreased tax revenuesoperations and increased spendingprofitability, including its ability to finance economic stimulus and bailouts).refinance its existing indebtedness. Moreover, ArcelorMittal could, in order to increase financial flexibility during a period of reduced availability of credit, implement capital raising measures such as equity offerings or asset disposals, which could in turn create a risk of diluting existing shareholders, the Company receiving relatively low proceeds for the divested assets and/or causing substantial accounting losses (particularly if the divestments are done in difficult market conditions).

ArcelorMittal’s principal credit facilities (described under “Item 5B—Operating and Financial Review and Prospects—Liquidity and Capital Resources”) contain restrictive covenants. These covenants limit,inter alia, encumbrances on the assets of ArcelorMittal and its subsidiaries, the ability of ArcelorMittal’s subsidiaries to incur debt and the ability of ArcelorMittal and its subsidiaries to dispose of assets in certain circumstances. The Company’s principal credit facilities also include the following financial covenant: the Company must ensure that the ratio of “Consolidated Total Net Borrowings” (consolidated total borrowings less consolidated cash and cash equivalents) to “Consolidated EBITDA” (the consolidated net pre-taxation profits of the ArcelorMittal group for a Measurement Period, subject to certain adjustments as defined in the facilities) does not, at the end of each “Measurement Period” (each period of 12 months ending on the last day of a financial half-year or a financial year of the Company), exceed a certain ratio. In August 2009, the Company signed agreements with the lenders under its principal credit facilities to amend this ratio referred to as its “Leverage Ratio”, fromof 3.5 to one as originally provided, to 4.5 to one as of December 31, 2009, to 4.0 to one as of June 30, 2010, and reverting to 3.5 to one as of December 31, 2010. ArcelorMittal also agreed to the imposition of certain additional temporary restrictive covenants on its activities if the Leverage Ratio exceeds 3.5 to one for any Measurement Period. These include restrictions on dividends and share reductions, acquisitions, capital expenditure and the giving of loans and guarantees.one. As of December 31, 2009,2010, the Leverage Ratio stood at approximately 3.22.2 to one, up from 1.1 to one as of December 31, 2008 and 1.7 to one as of June 30, 2009.one.

Limitations arising from theThe restrictive and financial covenants described above could limit ArcelorMittal’s operating and financial flexibility, including to distribute dividends, make capital expenditures or engage in strategic acquisitions or investments. Failure to comply with any covenant would enable the lenders to accelerate ArcelorMittal’s repayment obligations. Moreover, ArcelorMittal’s debt facilities have provisions whereby certain events relating to other borrowers within the ArcelorMittal group could, under certain circumstances, lead to acceleration of debt repayment under such credit facilities. Any invocation of these cross-acceleration or cross-default clauses could cause some or all of the other debt to accelerate, creating liquidity pressures. ArcelorMittal’s high level of debt outstanding could have adverse consequences more generally, including by impairing its ability to obtain additional financing for working capital, capital expenditures, acquisitions, general corporate purposes or other purposes, and limiting its flexibility to adjust to changing market conditions or withstand competitive pressures, resulting in greater vulnerability to a downturn in general economic conditions.

Furthermore, a significant part of ArcelorMittal’s debt is at variable rates of interest and thereby exposes ArcelorMittal to interest rate risk (i.e., if interest rates rise, ArcelorMittal’s debt service obligations on its variable rate indebtedness would increase). Depending on market conditions, ArcelorMittal may usefrom time to time uses interest-rate swaps or other financial instruments to hedge a portion of its interest rate exposure either from fixed to floating or floating to fixed. AsAfter swaps, ArcelorMittal had 69% of its debt at fixed interest rates and 31% at floating rates as of December 31, 2009, approximately 64% (61% after taking swaps into account) of the outstanding indebtedness of ArcelorMittal and its subsidiaries was at fixed rates of interest.2010.

ArcelorMittal’s long-term corporate credit rating is currently BBB according to Standard & Poor’s Ratings Services and Fitch Ratings, and Baa3 according to Moody’s Investors Service. ArcelorMittal experienced credit rating downgrades in 2009. On May 20, 2009, Moody’s Investors Service downgraded ArcelorMittal’s Baa2 rating to Baa3 and assigned a stable outlook. On June 5, 2009, Standard & Poor’s Ratings Services downgraded the Company’s BBB+ long-term corporate credit rating to BBB, and kept its outlook negative. On July 31, 2009, Fitch Ratings changed ArcelorMittal’s outlook to negative from stable. See “Item 5B—Operating and Financial Review and Prospects—Liquidity and Capital Resources”.

ArcelorMittal’s growth strategy includes greenfield and brownfield projects that are inherently subject to completion and financing risks.

As a part of its future growth strategy, the Company plans to expand its steel-making capacity and raw materials self-sufficiency through a combination of brownfield growth, new greenfield projects and acquisition opportunities, mainly in emerging markets. See “Item 4—Information on the Company—Business Overview—Business Strategy.” To the extent that these plans proceed, these projects would require substantial capital expenditures and their timely completion and successful operation may be affected by factors beyond the control of ArcelorMittal. These factors include receiving financing on reasonable terms, obtaining or renewing required regulatory approvals and licenses, securing and maintaining adequate property rights to land and mineral resources (especially in connection with mining projects in certain developing countries in which security of title with respect to mining concessions and property rights remains weak), local opposition to land acquisition or project development (as experienced, for example, in connection with the Company’s projects in India), demand for the Company’s products and general economic conditions. Any of these factors may cause the Company to delay, modify or forego some or all aspects of its expansion plans. Greenfield projects can also, in addition to general factors, have project-specific factors that increase the level of risk. For example, the Company is in the process (along with a partner) of acquiring Baffinland Iron Mines Corporation in view of developing the Mary River iron ore deposit in the Arctic Circle. The ratings agenciesscale of this project and the location of the deposit raise unique challenges, including extremely harsh weather conditions, lack of transportation infrastructure and environmental concerns. The Company cannot guarantee that it will be able to execute this project or other projects, and to the extent that they proceed, that it will be able to complete them on schedule, within budget, or achieve an adequate return on its investment.

ArcelorMittal’s mining operations are subject to risks associated with mining activities.

ArcelorMittal operates mines and has substantially increased the scope of its mining activities in recent years. Mining operations are subject to hazards and risks usually associated with the exploration, development and production of natural resources, any of which could downgrade ArcelorMittal’s ratings eitherresult in production shortfalls or damage to persons or property. In particular, hazards associated with open-pit mining operations include, among others:

Hazards associated with underground mining operations, of which ArcelorMittal has several, include, among others:

ArcelorMittal is exposed to ArcelorMittal,all of these hazards. Among other accidents experienced over recent years, in January 2008, a prolonged cyclical downturnmethane gas explosion at ArcelorMittal’s Abaiskaya underground mine in the steel industry,Kazakhstan resulted in 30 fatalities and a cessation or trends in credit and capital markets more generally. Any decline in ArcelorMittal’s credit rating would increase its cost of borrowing and could significantly harm its financial condition, resultsdisruption of operations for six months. On June 2, 2008 a coal and profitability, includinggas explosion caused by an unpredictable geological failure took place at the Tentekskaya mine in Kazakhstan and claimed the lives of five miners. Since then, the development roadway has been recovered and operations have resumed. The reoccurrence of any of these events, or the occurrence of any of those listed above, could delay production, increase production costs and result in death or injury to persons, damage to property and liability for ArcelorMittal, some or all of which may not be covered by insurance, as well as substantially harm ArcelorMittal’s reputation as a company focused on ensuring the health and safety of its ability to refinance its existing indebtedness.employees.

ArcelorMittal has grown through acquisitions and will likely continue to do so. Failure to manage external growth and difficulties integrating acquired companies and subsequently implementing steel and mining development projects could harm ArcelorMittal’s future results of operations, financial condition and prospects.

ArcelorMittal results from Mittal Steel Company N.V.’s 2006 acquisition of, and 2007 merger with, Arcelor, a company of approximately equivalent size. Arcelor itself resulted from the combination of three steel companies, and Mittal Steel had previously grown through numerous acquisitions over many years. ArcelorMittal made numerous acquisitions in 2007 and 2008 before curtailing large-scale M&A activity in 2009.2009 and in 2010. Its strategy going forward over the medium term includes external growth through acquisitions.

The Company’s past growth through acquisitions has entailed significant investment and increased operating costs, as well as requiring greater allocation of management resources away from daily operations. Managing growth has required the continued development of ArcelorMittal’s financial and management information control systems, the integration of acquired assets with existing operations, the adoption of manufacturing best practices, attracting and retaining qualified management and personnel (particularly to work at more remote sites where there is a shortage of skilled personnel) as well as the continued training and supervision of such personnel, and the ability to manage the risks and liabilities associated with the acquired businesses. Failure to continue to manage such growth could have a material adverse effect on ArcelorMittal’s business, financial condition, results of operations or prospects. In particular, if integration of acquisitions is not successful, ArcelorMittal could lose key personnel and key customers, and may not be able to retain or expand its market position.

Mr. Lakshmi N. Mittal has the ability to exercise significant influence over the outcome of shareholder votes.

As of December 31, 2009,2010, Mr. Lakshmi N. Mittal (along with his wife, Mrs. Usha Mittal) own 637,504,863owned 638,004,863 of ArcelorMittal’s outstanding common shares, representing approximately 40.84%40.87% of ArcelorMittal’s outstanding voting shares. Consequently, Mr. Lakshmi N. Mittal has the ability to significantly influence the decisions adopted at the ArcelorMittal general meetings of shareholders, including matters involving mergers or other business combinations, the acquisition or disposition of assets, issuances of equity and the incurrence of indebtedness. Mr. Lakshmi N. Mittal also has the ability to significantly influence a change of control of ArcelorMittal.

The loss or diminution of the services of the Chairman of the Board of Directors and Chief Executive Officer of ArcelorMittal could have a material adverse effect on its business and prospects.

The Chairman of the Board of Directors and Chief Executive Officer of ArcelorMittal, Mr. Lakshmi N. Mittal, has for over a quarter of a century contributed significantly to shaping and implementing the business strategy of Mittal Steel and subsequently ArcelorMittal. His strategic vision was instrumental in the creation of the world’s largest and most global steel group. The loss or any diminution of the services of the Chairman of the Board of Directors and Chief Executive Officer could have a material adverse effect on ArcelorMittal’s business and prospects. ArcelorMittal does not maintain key man life insurance on its Chairman of the Board of Directors and Chief Executive Officer.

ArcelorMittal is a holding company that depends on the earnings and cash flows of its operating subsidiaries, which may not be sufficient to meet future operational needs or for shareholder distributions.

Because ArcelorMittal is a holding company, it is dependent on the earnings and cash flows of, and dividends and distributions from, its operating subsidiaries to pay expenses, meet its debt service obligations, pay any cash dividends or distributions on its common shares or conduct share buy-backs. Some of these operating subsidiaries have outstanding debt obligations or are subject to acquisition agreements that impose restrictions or prohibitions on such operating subsidiaries’ ability to pay dividends. Under the laws of Luxembourg, ArcelorMittal will be able to pay dividends or distributions only to the extent that it is entitled to receive cash dividend distributions from its subsidiaries, recognize gains from the sale of its assets or record share premium from the issuance of shares.

If earnings and cashflowscash flows of its operating subsidiaries are substantially reduced, ArcelorMittal may not be in a position to meet its operational needs or to make shareholder distributions in line with announced proposals.

Changes in assumptions underlying the carrying value of certain assets, including as a result of adverse market conditions, could result in impairment of such assets, including intangible assets such as goodwill.

At each reporting date, ArcelorMittal reviews the carrying amounts of its tangible and intangible assets (excluding goodwill, which is reviewed annually or whenever changes in circumstances indicate that the carrying amount may not be recoverable) to determine whether there is any indication that the carrying amount of those assets may not be recoverable through continuing use. If any such indication exists, the recoverable amount of the asset (or cash generating unit) is reviewed in order to determine the amount of the impairment, if any. The recoverable amount is the higher of its net selling price (fair value reduced by selling costs) and its value in use.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.asset (or cash generating unit). If the recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, an impairment loss is recognized. An impairment loss is recognized as an expense immediately as part of operating income in the statement of operations.

Goodwill represents the excess of the amounts ArcelorMittal paid to acquire subsidiaries and other businesses over the fair value of their net assets at the date of acquisition. Goodwill has been allocated at the level of the Company’s seven operating segments; the lowest level at which goodwill is reviewedmonitored for internal management purposes. Goodwill is tested for impairment annually at the levels of the groups of cash generating unit levelunits which correspond to the operating segments as of November 30, or wheneverwhether changes in the circumstances indicate that the carrying amount may not be recoverable. The recoverable amounts of the groups of cash generating units are determined from the higher of its net selling price (fair value reduced by selling costs) or its value in use calculations, which depend on certain key assumptions. These include assumptions regarding the discount rates, growth rates and expected changes to selling prices and direct costs during the period. Management estimates discount rates using pre-tax rates that reflect current market rates for investments of similar risk. The growth rates are based on the Company’s growth forecasts, which are in line with industry trends. Changes in selling prices and direct costs are based on historical experience and expectations of future changes in the market. See Notes 2 and 89 to ArcelorMittal’s consolidated financial statements.

If management’s estimates change, the estimate of the fair valuerecoverable amount of goodwill could fall significantly and result in impairment. While impairment of goodwill does not affect reported cash flows, it does result in a non-cash charge in the consolidated statement of operations, which could have a material adverse effect on ArcelorMittal’s results of operations or financial position. Based on its impairment review in connection with the preparation of its 20092010 financial statements, the Company did not record any impairment of goodwill at December 31, 2009. Management believes, however, that reasonably possible changes in key assumptions used in assessing value in use would cause an impairment loss to be recognized in respect2010. At December 31, 2010, the Company had $12.6 billion of the Company’s AACIS and Stainless Steel segments, which account for approximately $1.5 billiongoodwill and $1.8 billion of goodwill, respectively. At December 31, 2009, the Company hadother intangibles, compared to $14.8 billion of goodwill and $2.2 billion of other intangibles compared to $14.2 billion of goodwill and $2.5 billion of other intangibles at December 31, 2008.2009. See Note 89 to ArcelorMittal’s consolidated financial statements.

The For the year ended December 31, 2010, the Company also analyzes at each reporting date the recoverable amount ofrecorded an impairment loss related to its manufacturing property, plant and equipment based on its value in use, and records an expenseamounting to the extent that the recoverable amount is less than the carrying amount. For the year ended December 31, 2009, the Company recorded an impairment loss of $564 million in this respect.$525 million.

No assurance can be given as to the absence of significant further impairment charges in future periods, particularly if market conditions deteriorate again as they did in 2008-2009.

Capital expenditure commitments and other undertakings arising from pastacquisitions and investments may limit ArcelorMittal’s operational flexibility, add to its financing requirements and adversely affect its results of operations and prospects.

In connection with the acquisition of certain operating subsidiaries and other investments, ArcelorMittal has committed itself to significant capital expenditures and other undertakings. See “Item 5F—Operating and Financial Review and Prospects—Tabular Disclosure of Contractual Obligations” and Note 2122 to ArcelorMittal’s consolidated financial statements. ArcelorMittal expects to fund these commitments primarily through internal sources, but it cannot provide assurances in this regard orwhich may be limited depending on the Company’s results of operations, financing capacity and other uses of cash, such as dividends and maintenance expenditure. As a result, the Company is unable to guarantee that these projects will be completed on time ifor at all. Failure to comply with commitments in connection with past growth projects may result in forfeiture of a part of ArcelorMittal’s investment, the loss of tax and regulatory benefits, and/or contractual disputes that could have a material adverse effect on ArcelorMittal’s financial condition or results of operations.

ArcelorMittal’s growth strategy includes greenfield and brownfield projects that are inherently subject to completion and financing risks, which, if realized, could adversely affect ArcelorMittal’s results of operations and financial condition.

As a part of its future growth strategy, the Company plans to expand its steel making capacity and raw materials self-sufficiency through a combination of brownfield growth, new greenfield projects and acquisition opportunities, mainly in emerging markets such as India, Africa and Brazil. See “Item 4—Information on the Company—Business Overview—Business Strategy.” To the extent that these plans proceed, these projects would require substantial capital expenditures (with the attendant risks noted above),4A—History and timely completion may be affected by factors beyond the control of ArcelorMittal. These factors include receiving financing on reasonable terms, obtaining or renewing required regulatory approvals and licenses, local opposition to land acquisition or project development (as experienced, for example, in connection with the Company’s projects in India), demand for the Company’s products and general economic conditions. Any of these factors may cause the Company to delay, modify or forego some or all aspects of its expansion plans. The Company cannot guarantee that it will be able to execute these projects, and to the extent that they proceed, that it will be able to complete them on schedule, within budget, or achieve an adequate return on its investment.

ArcelorMittal’s mining operations are subject to mining risks.

ArcelorMittal operates mines and has substantially increased the scope of its mining activities in recent years. Mining operations are subject to hazards and risks usually associated with the exploration, development and production of natural resources, any of which could result in production shortfalls or damage to persons or property. In particular, hazards associated with open-pit mining operations include, among others:

Hazards associated with underground mining operations, of which ArcelorMittal has several, include, among others:

ArcelorMittal is exposed to all of these hazards. Among other accidents experienced over recent years, in January 2008, a methane gas explosion at ArcelorMittal’s Abaiskaya underground mine in Kazakhstan resulted in 30 fatalities and a cessation or disruption of operations for six months. On June 2, 2008 a coal and gas explosion caused by an unpredictable geological failure took place at the Tentekskaya mine in Kazakhstan and claimed the lives of five miners. Since then, the development roadway has been recovered and operations have resumed. The reoccurrence of any of these events, or the occurrence of any of those listed above, could delay production, increase production costs and result in death or injury to persons, damage to property and liability for ArcelorMittal, some or all of which may not be covered by insurance, as well as substantially harm ArcelorMittal’s reputation as a company focusedCompany—Updates on ensuring the health and safety of its employees.Previously Announced Investment Projects”.

Underfunding of pension and other post-retirement benefit plans at some of ArcelorMittal’s operating subsidiaries could require the Company to make substantial cash contributions to pension plans or to pay for employee healthcare, which may reduce the cash available for ArcelorMittal’s business.

ArcelorMittal’s principal operating subsidiaries in Brazil, Canada, Europe, South Africa and the United States provide defined benefit pension plans to their employees. Some of these plans are currently underfunded. At December 31, 2009,2010, the value of ArcelorMittal USA’s pension plan assets was $2.1$2.3 billion, while the projected benefit obligation was $3.5 billion, resulting in a deficit of $1.2 billion. At December 31, 2010, the value of the pension plan assets of ArcelorMittal’s Canadian subsidiaries was $2.8 billion, while the projected benefit obligation was $3.3 billion, resulting in a deficit of $1.1$0.5 billion. At December 31, 2009, the value of the pension plan assets of ArcelorMittal’s Canadian subsidiaries was $2.4 billion, while the projected benefit obligation was $2.9 billion, resulting in a deficit of $492 million. At December 31, 2009,2010, the value of the pension plan assets of ArcelorMittal’s European subsidiaries was $644 million,$0.6 billion, while the projected benefit obligation was $2.5$2.3 billion, resulting in a deficit of $1.9$1.7 billion. ArcelorMittal USA, ArcelorMittal’s Canadian subsidiaries, and ArcelorMittal’s European subsidiaries also had a partially underfunded post-employment benefit obligation of $4.0 billionobligations relating to life insurance and medical benefits as of December 31, 2009. The value2010. These obligations totaled $6.2 billion as of ArcelorMittal USA post-employment benefitDecember 31, 2010, while underlying plan assets were $559 million,only $0.5 billion, resulting in a deficit of $3.4$5.7 billion. ArcelorMittal’s Canadian subsidiaries also had an under-funded post-employment benefit obligation of $778 million relating to life insurance and medical benefits as of December 31, 2009. ArcelorMittal’s European subsidiaries also had a partially under-funded post-employment benefit obligation of $564 million relating to life insurance and medical benefits as of December 31, 2009. See Note 2223 to ArcelorMittal’s consolidated financial statements.

ArcelorMittal’s funding obligations depend upon future asset performance, the level of interest rates used to discount future liabilities, actuarial assumptions and experience, benefit plan changes and government regulation. Because of the large number of variables that determine pension funding requirements, which are difficult to predict, as well as any legislative action, future cash funding requirements for ArcelorMittal’s pension plans and other post-employment benefit plans could be significantly higher than current estimates. In these circumstances funding requirements could have a material adverse effect on ArcelorMittal’s business, financial condition, results of operations or prospects.

ArcelorMittal could experience labor disputes that may disrupt its operations and its relationships with its customers.

A majority of the employees of ArcelorMittal and of its contractors are represented by labor unions and are covered by collective bargaining or similar agreements, which are subject to periodic renegotiation. Strikes or work stoppages could occur prior to, or during, the negotiations preceding new collective bargaining agreements, during wage and benefits negotiations or during other periods for other reasons. ArcelorMittal periodically experiences strikes and work stoppages at various facilities prolonged strikes or work stoppages, which may increase in their severity and frequency and may have an adverse effect on the operations and financial results of ArcelorMittal.

ArcelorMittal is subject to economic policy risks and political, social and legal uncertainties in somecertain of the developing countriesemerging markets in which it operates or proposes to operate. Any deterioration or disruption of the business environment in those countriesoperate, and these uncertainties may have a material adverse effect on ArcelorMittal’s business, financial condition, results of operations or prospects.

ArcelorMittal operates, or proposes to operate, in a large number of developing countries.emerging markets. In recent years, many of these countries have implemented measures aimed at improving the business environment and providing a stable platform for economic development. ArcelorMittal’s business strategy has been developed partly on the assumption that this modernization, restructuring and upgrading of the business climate and physical infrastructure will continue, but whichthis cannot be guaranteed, particularly in light of the recent global economic crisis. Risks of widespread insolvency, mass unemployment and the deterioration of various sectors of the economies where ArcelorMittal operates increased during crisis.guaranteed. Any slowdown in the development of these economies could have a material adverse effect on ArcelorMittal’s business, financial condition, results of operations or prospects, as could insufficient investment by government agencies or the private sector in physical infrastructure. For example, the failure of a country to develop reliable electricity and natural gas supplies and networks, and any resulting shortages or rationing, could lead to disruptions in ArcelorMittal’s production.

Moreover, some of the countries in which ArcelorMittal operates have been undergoing substantial political transformations from centrally-controlled command economies to market-oriented systems.systems or from authoritarian regimes to democratically-elected governments and vice-versa. Political, economic and legal reforms necessary to complete such transformation may not continue.progress sufficiently. On occasion, ethnic, religious, historical and other divisions have given rise to tensions and, in certain cases, wide-scale civil disturbances and military conflict. The political systems in developingthese countries are vulnerable to their populations’ dissatisfaction with their government, reforms or the lack thereof, social and ethnic unrest and changes in governmental policies, any of which could have a material adverse effect on ArcelorMittal’s business, financial condition, results of operations or prospects and its ability to continue to do business in these countries.

In addition, the legal systems in some of the countries in which ArcelorMittal operates remain less than fully developed, particularly with respect to property rights, the protection of foreign investment and bankruptcy proceedings, generally resulting in a lower level of legal certainty or security for foreign investment than in more developed countries. ArcelorMittal may encounter difficulties in enforcing court judgments or arbitral awards in some countries in which it operates among other reasons because those countries may not be parties to treaties that recognize the mutual enforcement of court judgments. Assets in certain countries where ArcelorMittal operates could also be at risk of expropriation or nationalization, and compensation for such assets may be below fair value. For example, the Venezuelan government has announced a policy of selective nationalization of companies operating in the country, and has effectedimplemented a number of nationalizations.nationalizations to date. Although ArcelorMittal believes that the long-term growth potential in developingemerging markets is strong, and intends them to be the focus of the majority of its near-term growth capital expenditures, legal obstacles could have a material adverse effect on the implementation of ArcelorMittal’s growth plans and its operations in such countries.

ArcelorMittal’s results of operations could be affected by fluctuations in foreign exchange markets,rates, particularly the euro to U.S. dollar exchange rate, as well as by exchange controls imposed by governmental authorities in the countries where it operates.

ArcelorMittal operates and sells products globally, and, as a result, its business, financial condition, results of operations or prospects could be adversely affected by fluctuations in exchange rates. A substantial portion of ArcelorMittal’s assets, liabilities, operating costs, sales and earnings are denominated in currencies other than the U.S. dollar (ArcelorMittal’s reporting currency),. Accordingly, fluctuations in exchange rates to the U.S. dollar, could have an adverse effect on its business, financial condition, results of operations or prospects.

ArcelorMittal also operates in several countries whose currencies are, or have in the past been, subject to limitations imposed by those countries’ central banks, or which have experienced sudden and significant devaluations, such as occurred in Venezuela in January 2010.devaluations. Currency devaluations, the imposition of new exchange controls or other similar restrictions on currency convertibility, or the tightening of existing controls, in the countries in which ArcelorMittal operates could adversely affect its business, financial condition, results of operations or prospects. See “Item 4B—Information on the Company—Business Overview—Government Regulations—Foreign Exchange”.

Disruptions to ArcelorMittal’s manufacturing processes could adversely affect ArcelorMittal’sits operations, customer service levels and financial results.

Steel manufacturing processes are dependent on critical steel-making equipment, such as furnaces, continuous casters, rolling mills and electrical equipment (such as transformers), and such equipment may incur downtime as a result of unanticipated failures or other events, such as fires or furnace breakdowns. ArcelorMittal’s manufacturing plants have experienced, and may in the future experience, plant shutdowns or periods of reduced production as a result of such equipment failures or other events. To the extent that lost production as a result of such a disruption could not be compensated for by unaffected facilities, such disruptions could have an adverse effect on ArcelorMittal’s operations, customer service levels and financial results.

Natural disasters could significantly damage ArcelorMittal’s production facilities.

Natural disasters could significantly damage ArcelorMittal’s production facilities and general infrastructure. For example, ArcelorMittal Lázaro Cárdenas’s production facilities are located in Lázaro Cárdenas, Michoacán, Mexico and ArcelorMittal Temirtau is located in the Karaganda region of the Republic of Kazakhstan, both these areasregions are prone to earthquakes of varying magnitudes. ArcelorMittal Point Lisas is located in Trinidad, which is vulnerable to hurricanes. Extensive damage to these facilities or any other major production complexes and staff casualties whether as a result of floods, earthquakes, hurricanes, tsunamis or other natural disasters, could, to the extent that lost production as a result of such a disaster could not be compensated for by unaffected facilities, severely affect ArcelorMittal’s ability to conduct its business operations and, as a result, reduce its future operating results.

ArcelorMittal’s insurance policies provide limited coverage, potentially leaving it uninsured against some business risks.

The occurrence of an event that is uninsurable or not fully insured could have a material adverse effect on ArcelorMittal’s business, financial condition, results of operations or prospects. ArcelorMittal maintains insurance on property and equipment in amounts believed to be consistent with industry practices but it is not fully insured against all business risks. ArcelorMittal’s insurance policies cover physical loss or damage to its property and equipment on a reinstatement basis arising from a number of specified risks and certain consequential losses, including business interruption arising from the occurrence of an insured event under the policies. Under these policies, damages and losses caused by certain natural disasters, such as earthquakes, floods and windstorms, are also covered. Each of the operating subsidiaries of ArcelorMittal also maintains various other types of insurance, such as directors and officers liability insurance, workmen’s compensation insurance and marine insurance.

In addition, ArcelorMittal maintains trade credit insurance on receivables from selected customers, subject to limits that it believes are consistent with those in the steel industry, in order to protect it against the risk of non-payment due to customers’ insolvency or other causes. Not all of ArcelorMittal’s customers are or can be insured, and even when insurance is available, it may not fully cover the exposure.

As a result of the 2008-2009 economic downturn, which has had a particularly severe impact on certain countries and industries, including the automobile industry, insurers no longer provide coverage for certain customers or impose trade credit insurance limits that are not sufficient to cover the Company’s exposure to certain customers.

Notwithstanding the insurance coverage that ArcelorMittal and its subsidiaries carry, the occurrence of an accident that causes losses in excess of limits specified under the relevant policy, or losses arising from events not covered by insurance policies, could materially harm ArcelorMittal’s financial condition and future operating results.

Product liability claims could adversely affect ArcelorMittal’s operations.have a significant adverse financial impact on ArcelorMittal.

ArcelorMittal sells products to major manufacturers engaged in manufacturing and selling a wide range of end products. ArcelorMittal also from time to time offers advice to these manufacturers. Furthermore, ArcelorMittal’s products are also sold to, and used in, certain safety-critical applications.applications, such as, for example, pipes used in gas or oil pipelines. There could be significant consequential damages resulting from the use of such products. ArcelorMittal has a limited amount of product liability insurance coverage, and a major claim for damages related to ArcelorMittal products sold and, as the case may be, advice given in connection with such products could leave ArcelorMittal uninsured against a portion or allthe entirety of the award and, as a result, materially harm its financial condition and future operating results.

ArcelorMittal is subject to regulatory risk, and may incur liabilities arising from investigations by governmental authorities, litigation and litigation,fines, among others, regarding its pricing and marketing practices or other antitrust matters.

ArcelorMittal is the largest steel producer in the world. As a result of this position, ArcelorMittal may be subject to exacting scrutiny from regulatory authorities and private parties, particularly regarding its trade practices and dealings with customers and counterparties. As a result of its position in the steel markets and its historically acquisitive growth strategy, ArcelorMittal could be the target of governmental investigations and lawsuits based on antitrust laws in particular. These could require significant expenditures and result in liabilities or governmental orders that could have a material adverse effect on ArcelorMittal’s business, operating results, financial condition and prospects.

ArcelorMittal and certain of its subsidiaries are currently under investigation by governmental entities in several countries, and are named as defendants in a number of lawsuits relating to various antitrust matters. For example, in December 2008 the French Competition Council ruled that subsidiaries of ArcelorMittal had agreed with their competitors to fix prices and allocate markets and customers during the 1999 to 2004 period and imposed a fine of €301.78 million, although the fine was subsequently reduced on appeal in January 2010 to €42 million. Also, in September 2008, Standard Iron Works filed a class action complaint in U.S. federal court against ArcelorMittal, ArcelorMittal USA Inc.LLC and other steel manufacturers, alleging on behalf of direct purchasers that the defendants conspired since 2005 to restrict the output of steel products in order to affect steel prices. Since the filing of the Standard Iron Works lawsuit, other similar lawsuits, including a lawsuit on behalf of indirect purchasers, have been filed and have been reassigned to the court overseeing this lawsuit. A motion by the defendants in the case to dismiss the complaint was denied in June 2009. The parties are in the process of conducting discovery on class certification issues. These cases remain in the early stages of the litigation. Antitrust proceedings and investigations involving ArcelorMittal and its subsidiaries are also currently pending in Brazil, Europe and South Africa.

Because of the fact-intensive nature of the issues involved and the inherent uncertainty of such litigation and investigations, negative outcomes are possible. An adverse ruling in the proceedings described above or in other similar proceedings in the future could subject ArcelorMittal to substantial administrative penalties and/or civil damages. In cases relating to other companies, civil damages have ranged as high as hundreds of millions of U.S. dollars in major civil antitrust proceedings during the last decade. With respect to the pending U.S. federal court litigation, ArcelorMittal could be subject to treble damages. Although ArcelorMittal has established reserves for certain antitrust claims (see “Item 8A—Financial Information—Legal Proceedings—Legal Claims—Competition/Antitrust Claims”), unfavorable outcomes in current and potential future litigation and investigations could reduce ArcelorMittal’s liquidity and negatively affect its financial performance and its financial condition.

In addition to regulatory risk relating to antitrust, ArcelorMittal has been, and to some degree remains, subject to regulatory risk relating to state aid received in past years in connection with its acquisitions of certain steel facilities in Eastern Europe that were privatized. A breach or purported breach of the European Union’s rules and transitional arrangements governing this state aid could result in a decision by the European Commission ordering relevant government authorities to take measures to recover the aid that was granted. In Romania, compliance with the transitional arrangements is currently being reviewed.

ArcelorMittal’s governance and compliance processes may fail to prevent regulatory penalties and reputational harm.harm, both at operating subsidiaries and joint ventures.

ArcelorMittal operates in a global environment, and its activities straddle multiple jurisdictions and complex regulatory frameworks, at a time of increased enforcement activity and enforcement initiatives worldwide. The Company’sArcelorMittal’s governance and compliance processes, which include the review of internal controlcontrols over financial reporting, may not prevent all future breaches of law, accounting or governance standards.standards at the Company or its subsidiaries. Risks of violations are also present at the Company’s joint ventures and associates where ArcelorMittal has only a minority stake and does not control accounting and reporting procedures. In addition, ArcelorMittal may be subject to breaches of its Code of Business Conduct, other rules and protocols for the conduct of business, conduct protocols andas well as instances of fraudulent behavior and dishonesty by its employees, contractors or other agents. The Company’s failure to comply with applicable laws and other standards could subject it to fines, loss of operating licenses and reputational harm.

The income tax liability of ArcelorMittal may substantially increase if the tax laws and regulations in countries in which it operates change or become subject to adverse interpretations or inconsistent enforcement.

Taxes payable by companies in many of the countries in which ArcelorMittal operates are substantial and include value-added tax, excise duties, profit taxes, payroll-related taxes, property taxes and other taxes. Tax laws and regulations in some of these countries may be subject to frequent change, varying interpretation and inconsistent enforcement. Ineffective tax collection systems and continuingnational or local government budget requirements may increase the likelihood of the imposition of arbitrary or onerous taxes and penalties, which could have a material adverse effect on ArcelorMittal’s financial condition and results of operations. In addition to the usual tax burden imposed on taxpayers, these conditions create uncertainty as to the tax implications of various business decisions. This uncertainty could expose ArcelorMittal to significant fines and penalties and to enforcement measures despite its best efforts at compliance, and could result in a greater than expected tax burden. See Note 1819 to ArcelorMittal’s consolidated financial statements.

In addition, many of the jurisdictions in which ArcelorMittal operates have adopted transfer pricing legislation. If tax authorities impose significant additional tax liabilities as a result of transfer pricing adjustments, it could have a material adverse effect on ArcelorMittal’s financial condition and results of operations.

It is possible that tax authorities in the countries in which ArcelorMittal operates will introduce additional revenue raising measures. The introduction of any such provisions may affect the overall tax efficiency of ArcelorMittal and may result in significant additional taxes becoming payable. Any such additional tax exposure could have a material adverse effect on its financial condition and results of operations.

ArcelorMittal may face a significant increase in its income taxes if tax rates increase or the tax laws or regulations in the jurisdictions in which it operates, or treaties between those jurisdictions, are modified in an adverse manner. This may adversely affect ArcelorMittal’s cash flows, liquidity and ability to pay dividends.

If ArcelorMittal were unable to utilize fully its deferred tax assets, its profitability could be reduced.

At December 31, 2009,2010, ArcelorMittal had $4.8$6.6 billion recorded as deferred tax assets on its statement of financial position. These assets can be utilized only if, and only to the extent that, ArcelorMittal’s operating subsidiaries generate adequate levels of taxable income in future periods to offset the tax loss carry forwards and reverse the temporary differences prior to expiration.

At December 31, 2009,2010, the amount of future income required to recover ArcelorMittal’s deferred tax assets was approximately $16.4$22.8 billion at certain operating subsidiaries.

ArcelorMittal’s ability to generate taxable income is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond its control. If ArcelorMittal generates lower taxable income than the amount it has assumed in determining its deferred tax assets, then the value of deferred tax assets will be reduced.

U.S. investors may have difficulty enforcing civil liabilities against ArcelorMittal and its directors and senior management.

ArcelorMittal is incorporated under the laws of the Grand Duchy of Luxembourg with its principal executive offices and corporate headquarters in Luxembourg. The majority of ArcelorMittal’s directors and senior management are residents of jurisdictions outside of the United States. The majority of ArcelorMittal’s assets and the assets of these persons are located outside the United States. As a result, U.S. investors may find it difficult to effect service of process within the United States upon ArcelorMittal or these persons or to enforce outside the United States judgments obtained against ArcelorMittal or these persons in U.S. courts, including actions predicated upon the civil liability provisions of the U.S. federal securities laws. Likewise, it may also be difficult for an investor to enforce in U.S. courts judgments obtained against ArcelorMittal or these persons in courts in jurisdictions outside the United States, including actions predicated upon the civil liability provisions of the U.S. federal securities laws. It may also be difficult for a U.S. investor to bring an original action in a Luxembourg court predicated upon the civil liability provisions of the U.S. federal securities laws against ArcelorMittal’s directors and senior management and non-U.S. experts named in this annual report.

A. History and Development of the Company

ArcelorMittal Overview

ArcelorMittal is the world’s largest and most global steel producer. It results from the combination in 2006 of Mittal Steel and Arcelor, which were at the time the world’s largest and second largest steel companies by production volume respectively.

ArcelorMittal had sales of approximately $65.1$78.0 billion, steel shipments of approximately 7185.0 million tonnes and crude steel production of approximately 7390.6 million tonnes for the year ended December 31, 2009,2010, as compared to sales of approximately $124.9$61.0 billion, steel shipments of approximately 101.769.6 million tonnes and crude steel production of approximately 103.371.6 million tonnes for the year ended December 31, 2008.2009.

ArcelorMittal’s net income attributable to equity holders of the parent for the year ended December 31, 2009,2010, was $0.1$2.9 billion, or $0.08$1.93 per share, as compared with net income attributable to equity holders of the parent of $9.5$0.2 billion, or $6.84$0.11 per share, for the year ended December 31, 2008.2009.

As of December 31, 2009,2010, ArcelorMittal had equity of $66.1 billion, total debt of $26.0 billion and cash and cash equivalents, including restricted cash, of $6.3 billion as compared to equity of $65.4 billion, total debt of $24.8 billion and cash and cash equivalents, including restricted cash, of $6.0 billion as compared to equity of $59.3 billion, total debt of $34.1 billion and cash and cash equivalents, including restricted cash, of $7.6 billion as of December 31, 2008.2009.

ArcelorMittal has been built on a management strategy that emphasizes size and scale, vertical integration, product diversity and quality, continuous growth in higher value products, and a strong focus on employee well-being and customer service. The Company’s three-dimensional strategy, as described below,under “- B. Business Overview – Business Strategy”, is its key to sustainability and growth. ArcelorMittal has unique geographical and product diversification coupled with upstream and downstream integration designed to minimize risk caused by economic cycles.

Geography: ArcelorMittal is the largest steel producer in the Americas, Africa and Europe, and is the second largest producer in the CIS region, with a growing presence in Asia, particularly China. ArcelorMittal has steel-making operations in 20 countries on four continents, including 65 integrated, mini-mill and integrated mini-mill steel-making facilities. As of December 31, 2009,2010, ArcelorMittal had approximately 282,000 employees.274,000 employees (including discontinued operations).

ArcelorMittal operates its business in sixfive reportable operating segments:segments corresponding to continuing operations: Flat Carbon Americas; Flat Carbon Europe; Long Carbon Americas and Europe; Asia, Africa and CIS; Stainless Steel;CIS and ArcelorMittal Distribution Solutions. (As described below under “—Recent Developments”, in January 2011, ArcelorMittal completed the spin-off of its stainless steel operations to a separately-focused company Aperam. Therefore, Stainless Steel Solutions and Services.is reported as discontinuing operations.) ArcelorMittal’s steel-making operations have a high degree of geographic diversification. Approximately 35%36% of its steel is produced in the Americas, approximately 47%53% is produced in Europe and approximately 18%11% is produced in other countries, such as Kazakhstan, South Africa and Ukraine. In addition, ArcelorMittal’s sales are spread over both developed and developing markets, which have different consumption characteristics.

ProductsProducts:: ArcelorMittal produces a broad range of high-quality finished and semi-finished products. Specifically, ArcelorMittal produces flat products, including sheet and plate, long products, including bars, rods and structural shapes, and stainless steel products. ArcelorMittal also produces pipes and tubes for various applications. ArcelorMittal sells its products primarily in local markets and through its centralized marketing organization to a diverse range of customers in approximately 177174 countries including the automotive, appliance, engineering, construction and machinery industries.

As a global steel producer, the Company is able to meet the needs of different markets. Steel consumption and product requirements clearly differ between developed markets and developing markets. Steel consumption in developed economies is weighted towards flat products and a higher value-added mix, while developing markets utilize a higher proportion of long products and commodity grades. To meet these diverse needs, the Company maintains a high degree of product diversification and seeks opportunities to increase the proportion of its product mix consisting of higher value-added products.

Mining Value Chain:ArcelorMittal has a significant and growing portfolio of raw material and mining assets, as well as certain strategic cost-plus based long-term contracts with external suppliers. In 20092010 (assuming full production of iron ore at ArcelorMittal Mines Canada, Serra Azul and full share of production at Pena Colorada for captive use), approximately 64%56% of ArcelorMittal’s iron-ore requirements and approximately 21%15% of its coal requirements were supplied from its own mines or from long-term contracts at many of its operating units. The Company currently has iron ore mining activities in Algeria, Brazil, Bosnia, Canada, Kazakhstan, Mexico, South Africa, Ukraine and the United States and has projects under development or prospective development in Liberia, Senegal,Canada, Mauritania and India. The Company currently has coal mining activities in Kazakhstan, Russia, South Africa and the United States. It has projects under prospective development in India and has a strategic investment in an Australian pulverized coal producer. ArcelorMittal also has made strategic investments in order to secure access to other raw materials including manganese, molybdenum and ferro alloys.

In addition, ArcelorMittal produces substantial amounts of direct reduced iron, or DRI, which is a scrap substitute used in its mini-mill facilities to supplement external metallics purchases. ArcelorMittal is also a significant producer of coke, a critical raw material for steel-making produced from metallurgical coal, and it satisfies over 93%87% of its coke needs through its own production facilities. ArcelorMittal’s facilities have good access to shipping facilities, including through ArcelorMittal’s own 14 deep-water port facilities and linked railway sidings.

ArcelorMittal has its own downstream steel distribution business, primarily run through its SteelDistribution Solutions and Services segment. It also provides value-added and customized steel solutions through further processing to meet specific customer requirements.

History

ArcelorMittal is a successor to Mittal Steel, a business founded in 1989 by Mr. Lakshmi N. Mittal, the Chairman of the Board of Directors and Chief Executive Officer of ArcelorMittal. It has experienced rapid and steady growth since then largely through the consistent and disciplined execution of a successful consolidation-based strategy. Mittal Steel made its first acquisition in 1989, leasing the Iron & Steel Company of Trinidad & Tobago. Some of its principal acquisitions since then include Sibalsa (Mexico) in 1992, Sidbec Dosco (Canada) in 1994, Hamberger Stahlwerk (Germany) and Karmet (Kazakhstan) in 1995, Thyssen Duisburg (Germany) in 1997, Inland Steel (USA) in 1998, Unimetal (France) in 1999, Sidex (Romania) and Annaba (Algeria) in 2001, Nova Hut (Czech Republic) in 2003, BH Steel (Bosnia), Balkan Steel (Macedonia), PHS (Poland) and Iscor (South Africa) in 2004, ISG (USA) and Kryvorizhstal (Ukraine) in 2005, three Stelco Inc. subsidiaries (Canada) and Arcelor in 2006.

Arcelor was created in February 2002 by the combination of three steel-making companies: Aceralia Corporación Siderúrgica (“Aceralia”), Arbed and Usinor. At the time of its acquisition by Mittal Steel in 2006, Arcelor was the second largest steel producer in the world in terms of production, with 2005 production of 46.7 million tonnes of steel and 2005 revenues of €32.6 billion. It operated in all key end markets: the automotive industry, construction, household appliances, packaging and general industry. Arcelor enjoyed leading positions in Western Europe and South America, in particular due to its Brazilian operations. The process of integrating Arcelor and Mittal Steel, including the realization of the targeted $1.6 billion in synergies from the merger, was completed on schedule by the end of 2008.

In 2007 and through the first half of 2008, ArcelorMittal continued to pursue a disciplined growth strategy, with a total of 35 transactions announced in Argentina, Australia, Austria, Brazil, Canada, Costa Rica, China, Estonia, France, Germany, Italy, Mexico, Poland, Russia, Slovakia, South Africa, Sweden, Turkey, the United Kingdom, Uruguay, United Arab Emirates, the United States and Venezuela, a numberlarge part of which were completed in 2007. During 2007,successfully completed. ArcelorMittal also announced or completed buy-out offers for non-controlling interests in certain of its subsidiaries in Argentina, Brazil and Poland. ArcelorMittal alsoIn addition, the Company announced and, in some cases, initiated development plans for greenfield steelmaking and mining projects in India, Liberia and Senegal and announced new prospective development projects in Mauritania, Mozambique, Nigeria, Russia, Saudi Arabia and Turkey.numerous countries.

During the first eight months of 2008, ArcelorMittal continued making investments, with significant transactions announced in Australia, Brazil, Canada, Costa Rica, France, Russia, South Africa, Sweden, Turkey, United Arab Emirates, the United States, and Venezuela, the majority of which were completed. During the remainderlatter part of 2008 and all of 2009, ArcelorMittal largely suspended mergers and acquisitions and other investment activitiesactivity in light of the deteriorating economic and market environment.environment, and sharply curtailed its investment activities. The Company re-examined its investment projects involving significant capital expenditure (including those announced in prior years), reducing capital expenditures for 2009 to $2.7 billion, of which $2.1 billion was for maintenance. In 2010, capital expenditure remained modest at $3.3 billion for the year, of which $ 2.7 billion was for maintenance. In 2011, capital expenditure is expected to amount to approximately $5.0 billion, $3.6 billion of which will be related to steelmaking facilities (including health and safety investments), $1.4 billion of which will be dedicated to mining projects (as the Company has announced its intention to increase its iron ore capacity by 10% in 2011), as well and the remainder of which is expected to fund other investments, mainly in emerging countries. Merger and acquisition activity remained limited in 2010, with the exception of the acquisition (along with a partner) of Baffinland, which culminated in January 2011.

The steel-making and other assets acquired as described above now constitute ArcelorMittal’s major operating subsidiaries. In 2007 and in(including the first three quarters of 2008, ArcelorMittal’s acquisitions also concentrated on vertical integration (i.e., acquisitions of raw material producers or production sites).

In response to the deep slump in demand for steel products in the last quarter of 2008 and into 2009, the Company sharply curtailed its M&A and investment activities and re-examined its investment projects involving significant capital expenditure including those announced in prior years. As discussed more fully in “Item 5—Operating and Financial Review and Prospects—Overview—Initiatives Taken in Response to Changing Market Conditions”, the Company sharply reduced its capital expenditures for 2009 to $2.8 billion, of which $2.1 billion was for maintenance. For 2010, ArcelorMittal expects higher levels of capital expenditure than in 2009, with growth-oriented capital expenditure (focused mainly on emerging markets and mining operations) expected to resume gradually. now constitute ArcelorMittal’s major operating subsidiaries.

Investments, Acquisitions and Disposals in 2009

ArcelorMittal’s principal investments, acquisitions and disposals for the year ended December 31, 2009 are summarized below.

Other Key Events in 2009

Updates on Previously Announced Investment Projects

India Greenfield ProjectsProjects.. In 2005 and 2006, ArcelorMittal announced plans to build large-scale integrated steel plants in the Indian States of Jharkhand and Orissa each with a capacity of 12 million tonnes of liquid steel production per year and each at a cost estimated at the time as in excess of $10 billion. Implementation of these projects remains contingent onhas been delayed for various reasons, including because of challenges relating to securing necessary mining rights, land and construction permits and necessary regulatory approvals.approvals, and in the meantime the Company has explored alternative investment opportunities. In late 2009 and earlyJune 2010, the Company also took preliminary stepsentered into a memorandum of understanding with authorities in the state of Karnataka in South India in view of the construction of a six-million tonne steel plant with a captive 750 megawatt power plant, representing a potential aggregate investment of $6.5 billion. The Company fully intendsAll necessary steps related to land acquisition have been completed, and the process for applying to secure mining leases and obtain environmental approvals has commenced. In light of the implementation challenges associated with large greenfield projects, and to diversify the initiatives through which it can participate in the growth of the Indian steel industry.industry, the Company in the medium term intends to take a modular approach and also evaluate smaller projects in various Indian states, with potential individual investments estimated in the $1.5-3.0 billion range.

Kazakhstan.On June 10, 2008, ArcelorMittal announced plans to invest approximately $1.2 billion in improvements in health and safety and technological upgrades at its integrated steel plant and coal mines in Kazakhstan. This investment program is proceeding as announced. ArcelorMittal also announced possible investments to expand steelmaking capacity in Kazakhstan from five to ten million tonnes over a five to nine year period. The implementation of this expansion project has been postponed due, among other things, to the subsequent change in market conditions. As in other markets, any decision to increase investment in steelmaking capacity will depend on local market conditions and overall competitiveness considerations.

Brazil. On November 30, 2007, ArcelorMittal announced plans to expand capacity at its Monlevade integrated long products plant in the state of Minas Gerais with the construction of a second blast furnace that would add approximately one million tonnes per annum of additional capacity. ImplementationAfter having been delayed in late 2008-early 2009 due to market conditions, implementation of the project, estimated to entail an investment of $1.2 billion, was delayedcommenced in 2008/2009 due to market conditions but is expected to startApril 2010 with targeted completion in 2010.2012. In August 2008, ArcelorMittal announced additional plans to expand steel production capacity in the long carbon sector in Brazil, but the timing and scope of this other investment, initially estimated at $1.6 billion, are currentlyremain under review. As in other markets, any decision to increase investment in steelmaking capacity will depend on local market conditions and overall competitiveness considerations.

China. In 2008, ArcelorMittal announced the establishment of two joint venture projects in China with Hunan Valin Iron & Steel Group Co., Ltd. one related to electrical steel in which each party holds 50%, and the other related to automotive steel, in which each party holds a 33% stake and Hunan Valin Steel Tubes & Wire Co., Ltd. holds 34% stake. The automotive steel joint venture, Valin ArcelorMittal Automotive Steel (“VAMA”), would build facilities with an annual production capacity of 1.2 million tonnes of products including cold rolled steel, galvanized steel and galvanealed steel, with an estimated investment amount of RMB 4.5 billion ($660682 million). The electrical steel joint venture, Valin ArcelorMittal Electrical Steel Co., Ltd. (“VAME”), would build cold rolling and processing facilities with annual production capacity of 200,000 tonnes for non-grain oriented (NGO) steel and 100,000 tonnes for grain oriented (GO) electrical steels, with an estimated investment amount of RMB $3.9 billion ($570585 million). Implementation of both projects is advancing including with respect to the regulatory approval process.process, but the precise timing of implementation of these projects remains to be decided. Approval from China’s National Development and Reform Commission and the Ministry of Commerce was received in 2010.

Saudi Arabia. In 2007, Mittal Steel signed a joint venture agreement with the Bin Jarallah Group of companies for the design and construction of a seamless tube mill in Saudi Arabia. This facility will be located in Jubail Industrial City, north of Al Jubail on the Persian Gulf. ArcelorMittal currently holds 51% and Bin Jarallah Group holds 49% of the joint venture company.company, which is managed under the joint control of both investors. The joint venture has arranged financing and construction is commencingwell under way, with a target to complete byin 2012.

Other InvestmentsLiberia. In December 2006, the Government of Liberia and ArcelorMittal announced the finalization of agreements relating to an iron ore mining and infrastructure development project. The project consists of reopening mines in Nimba County, rehabilitating 260 kilometers of abandoned railway and developing the Buchanan port for shipping traffic, and includes a number of other investment projects in recent years, severalimportant social initiatives, including relating to providing training and health facilities for employees. ArcelorMittal expects production of which have been delayed for project-specific reasons (such as delays in obtaining required permits) and/or whose scopeDirect Ship Ore (DSO) to begin during the second half of 2011, and timing have been put under review by management as a result of changed market conditionsconcentrate phase feasibility study to be completed in the wakethird quarter of 2011.

Kalagadi Manganese (South Africa).In 2007, ArcelorMittal entered into a joint venture agreement with Kalahari Resources and the Industrial Development Corporation Limited to develop the Kalagadi manganese ore deposits in South Africa. Kalagadi Manganese’s project is situated in the Kuruman / Hotazel district of the economic crisisNorthern Cape Province. The project envisages the establishment of a manganese ore mine and sinter plant at Hotazel that would ultimately produce 2.4 million tonnes of sinter product per annum. It would also see the establishment of a 320,000 tonne per annum ferromanganese alloy production facility in the Coega Industrial Development Zone in Port Elizabeth. Commencement of operations is expected to begin by the end of 2012.

Mauritania.In late 20082007, ArcelorMittal entered into an agreement withSociete Nationale Industrielle et Miniere(SNIM) of Mauritania, pursuant to which SNIM and 2009. With respectArcelorMittal would jointly develop a large iron ore mining project in the large El Agareb deposit. ArcelorMittal expects to prospective investments in upstream assets, such projects includecomplete exploratory works and a feasibility study by mid-2013.

Senegal. In 2007, the Company entered into an agreement with the State of Senegal relating to an integrated iron ore mining and related infrastructure project. ArcelorMittal announced at the time that the project, in Senegal for a totalif implemented, would entail an aggregate investment of $2.2 billionbillion. Project implementation has not followed the originally anticipated schedule and with respect to which the Company ishas been in discussions with the State of Senegal about the Kalagadi manganese ore projectproject. The parties are engaged in South Africa,a conciliation procedure, as provided for under their agreement, in an attempt to reach a mutually acceptable outcome. Should the conciliation procedure not result in this outcome, the agreement provides that either party may commence an arbitration. The Company cannot predict whether an arbitration will occur and, the development of iron ore mining in Mauritania. With respect to steel production initiatives, such projects include the prospective $600 million investment to construct a new steel mill in Mexico, and the plans to expandif so, its joint venture partnership with Nippon Steel Corporation by building a new continuous galvanizing line at the I/N Kote facility in New Carlisle, Indiana with an annual capacity of 480,000 tonnes. likely outcome.

Certain other previously announced projects such as the agreement with Canadian-based Adriana Resources Inc.have been terminated.

Key Transactions and Events in 2010

ArcelorMittal’s principal investments, acquisitions and disposals, and other key events for the development of an iron ore port facility in the State of Rio de Janeiro, Brazil and the agreement to acquire a 49% stake in the share capital of MPP - Mineração Pirâmide Participações Ltda in Brazil, have been terminated.

Recent Developmentsyear ended December 31, 2010 are summarized below.

Recent Developments

the receivable against ArcelorMittal Stainless Belgium S.A. of €221,590,789 (transferred for $296,289,044);

the receivable against ArcelorMittal Stainless Poland Sp. Z o.o. of PLN 99,600, 000 (transferred for $34,405,963);

the receivable against ArcelorMittal Inox Brasil S.A. of $776,986,902;

the receivable against ArcelorMittal LuxCo S.à.r.l. of €1,271,580,521 (transferred for $1,700,230,315); and

the receivable against ArcelorMittal Stainless Treasury S.C.A. of €555,973,198 (transferred for $743,391,763);

Other Information

ArcelorMittal is a public limited liability company (société anonyme) that was incorporated under the laws of Luxembourg on June 8, 2001. ArcelorMittal is registered at the R.C.S. Luxembourg under number B 82.454.

The mailing address and telephone number of ArcelorMittal’s registered office are:

ArcelorMittal

19, Avenue de la Liberté

L-2930 Luxembourg

Grand Duchy of Luxembourg

Telephone: +352 4792-26524792-2484

ArcelorMittal’s agent for U.S. federal securities law purposes is:

ArcelorMittal USA Inc.LLC

1 South Dearborn Street, 19^th floor

Chicago, Illinois 60603

United States of America

Telephone: + 1 312 899-3400

ArcelorMittal shares are listed and traded on the NYSE (symbol “MT”), ArcelorMittal’s principal United States trading market are admitted to trading outside the United States on the Luxembourg Stock Exchange’s regulated market and listed on the Official List of the Luxembourg Stock Exchange (“MT”) and are listed and traded (on a single order book as from January 14, 2009) on the NYSE Euronext European markets (Paris, Amsterdam and Brussels) (“MT”) and the stock exchanges of Madrid, Barcelona, Bilbao and Valencia (the “Spanish Stock Exchanges”) (“MTS”).

Arcelor

Arcelor became a subsidiary of Mittal Steel in August 2006 and its results of operations have been included in Mittal Steel’s (the predecessor entity to ArcelorMittal) consolidated results of operations from that date. Arcelor was created in February 2002 by the combination of three steel-making companies, Aceralia Corporación Siderúrgica, Arbed and Usinor. Prior to its acquisition by Mittal Steel (the predecessor entity to ArcelorMittal), Arcelor operated in four market sectors: flat carbon steel, long carbon steel, stainless steel and Arcelor Steel Solutions and Services. In 2005, the last full year prior to Arcelor’s acquisition by Mittal Steel, it produced 46.7 million tonnes of steel and had revenues of €32.6 billion and net income of €3.8 billion.

Summary of the Mittal Steel-Arcelor Combination and Merger

On August 1, 2006, Mittal Steel acquired 91.9% of the share capital of Arcelor (on a fully diluted basis). Through subsequent transactions Mittal Steel increased its ownership to 94.2%, which included the issued and outstanding shares of Arcelor and all of Arcelor’s convertible bonds, which were acquired in exchange for approximately 680 million Mittal Steel class A common shares and approximately €8.0 billion ($10.4 billion) in cash. On August 1, 2006, Arcelor became a subsidiary of Mittal Steel and its results of operations were included in Mittal Steel’s consolidated results of operations from that date. The acquisition was accounted for using the purchase method of accounting, which requires that the assets acquired and liabilities assumed be recorded at their estimated fair values as of the acquisition date.

In a Memorandum of Understanding entered into among Mittal Steel, Arcelor and the Significant shareholder on June 25, 2006, (the “Memorandum of Understanding” or “MoU”), Mittal Steel agreed that it would merge into Arcelor as soon as practicable following completion of its revised offer for Arcelor, and that the combined entity would be incorporated, domiciled and headquartered in Luxembourg. Following discussions at a meeting held on April 27, 2007, the Mittal Steel Board of Directors decided to organize a two-step process pursuant to which Mittal Steel would first be merged into ArcelorMittal, which would subsequently be merged into Arcelor as the ultimate surviving entity.

ArcelorMittal was incorporated on August 13, 2004 under the name Verger Investments S.A. It was a wholly-owned subsidiary of Mittal Steel from April 24, 2007 and was renamed “ArcelorMittal” on April 26, 2007. It did not conduct any operations prior to the merger summarized below. Effective September 3, 2007, Mittal Steel merged into ArcelorMittal, by way of absorption by ArcelorMittal of Mittal Steel and without liquidation of Mittal Steel, and the combined company was renamed “ArcelorMittal”.

On September 25, 2007, ArcelorMittal and Arcelor entered into a merger agreement providing for the merger of ArcelorMittal into Arcelor by way of absorption by Arcelor of ArcelorMittal and without liquidation of ArcelorMittal. On November 13, 2007, the merger became effective and shareholders of ArcelorMittal became shareholders of Arcelor, which was subsequently renamed “ArcelorMittal”. No additional consideration in cash or in kind was paid by Arcelor to the shareholders of ArcelorMittal in connection with the merger.

Internet Site

ArcelorMittal maintains an Internet site at www.arcelormittal.com. Information contained in or otherwise accessible through this Internet site is not a part of this annual report. All references in this annual report to this Internet site are inactive textual references to this URL and are for your information only.

B. Business Overview

Competitive Strengths

We believe that the following factors contribute to ArcelorMittal’s success in the global steel industry:

Market leader.ArcelorMittal is the world’s largest steel producer, with an annual production capacity of approximately 130 million tonnes of crude steel for the year ended December 31, 2009.2010. Steel shipments for the year ended December 31, 20092010 totaled approximately 7185 million tonnes.

ArcelorMittal is the largest producer of steel in North and South America and Africa, the second largest steel producer in the CIS region, and has a growing presence in Asia, including investments in China. It is also the largest steel producer in the European Union, with significant operations in France, Germany, Belgium, Spain, Luxembourg, Poland, the Czech Republic and Romania. In addition, many of ArcelorMittal’s operating units have access to developing markets that are expected to experience, over time, above-average growth in steel consumption (such as Central and Eastern Europe, South America, India, Africa and CIS).

ArcelorMittal has a diversified portfolio of products to meet a wide range of customer needs across all steel-consuming industries, including the automotive, appliance, engineering, construction, energy and machinery industries. The Company sells its products in local markets and through a centralized marketing organization to customers in approximately 177174 countries. ArcelorMittal’s diversified product offering, together with its distribution network and research and development (“R&D”) programs, enable it to build strong relationships with customers, which include many of the world’s major automobile and appliance manufacturers. With approximately 19% of the worldwide market share of flat steel sheets for the automotive industry, ArcelorMittal is a strategic partner for the major original equipment manufacturers (“OEMs”), and has the capability to build long-term contractual relationships with them based on early vendor involvement, contributions to global OEM platforms and common value-creation programs.

With a portfolio of assets that is diversified across product segments and geographic regions, ArcelorMittal benefits from a number of natural hedges designed to foster relatively stable cash flows in normal economic circumstances and protect it over time from weaknesses in any one particular country or region, as well as volatility in commodity and currency markets.

Research and Development.R&D supports ArcelorMittal’s business units in process and product improvement to produce the best quality steel at a low cost and with a limited impact on the environment. With 15 major research centers, ArcelorMittal possesses ana leading R&D capability unique in the steel industry. TheirThe Company’s locations worldwide enable quick transfers of know-how to ArcelorMittal plants acrossaround the world. In addition, ArcelorMittal’s close relationship with its customers enables it to foster innovation and work with them to meet their evolving needs and develop new steel products and solutions. To improve its research efficiency and achieve a high level of scientific knowledge, ArcelorMittal maintains strong academic partnerships with world-class scientific and technical universities.

The main focuses of ArcelorMittal’s R&D are:

For the year ended December 31, 2009,2010, ArcelorMittal’s R&D expense was approximately $253$322 million.

Diversified and efficient producer. As a vertically-integrated global steel manufacturer with a leading position in many markets, ArcelorMittal benefits from scale and production cost efficiencies in various markets and a measure of protection against the cyclicality of the steel industry and raw materials prices

Business improvement through company-wide Knowledge Management Program. Knowledge sharing and implementation of best practices are an integral part of ArcelorMittal’s management philosophy. Through its global Knowledge Management Program (“KMP”), ArcelorMittal shares, develops and utilizes its knowledge and experience across its facilities to accelerate improvement in business performance. The KMP covers all key functional areas, such as procurement, finance, marketing, logistics and health and safety, as well as the main steps in steel production and processing. The KMP includes ongoing detailed benchmarking, regular technical meetings and information-sharing at the corporate, regional and operating levels and inter-plant expert and operational support to drive performance improvement. The KMP enables each business unit to benefit from the scale and reach of ArcelorMittal’s global presence and access the best practices and experience within the Company. ArcelorMittal believes that the KMP provides a differentiating advantage to ArcelorMittal’s business performance by continuously contributing to reduced procurement and conversion costs and enhancing safety, quality, productivity and profitability.

Dynamic responses to steel market challenges and opportunities. ArcelorMittal’s management team has a strong track record and extensive experience in the steel industry. Management had the vision to recognize and take full advantage of the strong steel market trend from 2004 to mid-2008. Bymid-2008 and by responding quickly and decisively to opportunities, management succeeded in building the world’s largest steel company. Even as ArcelorMittal grew in recent years (in large part due to its expertise in acquisitions and turnarounds as described below), it put itself on stronger footing to weather the current market downturn. In addition, the consolidation in the sector over the past decade led by ArcelorMittal has created an industry with fewer, stronger and more disciplined companies and the industry therefore adjusted more rapidly to the collapse in demanddownturn in late 2008/2008 and early 2009 than in past downturns. ArcelorMittal’s management has shown similar dynamism in response to the current market downturn. Following the sudden collapse of the market in September 2008, ArcelorMittal took an aggressive response to the crisis, swiftly implementing production cuts, cost-cutting measures and debt reduction to help it weather the downturn and maintain its leading position. Planned cost savings of $5 billion over five years are in process, and debt reduction (including a net debt reduction of $13.7 billion at the end of 2009 from third-quarter 2008 levels) has been achieved.2009. Management’s flexibility and agility have allowed ArcelorMittal to shift quickly from the growth-oriented approach that prevailed in early 2008 to a crisis response in 2008 and into 2009 that focused on prudent deployment of cash and reduction of costs, while continuing to provide customers with superior value-added steel products and solutions. In 2010, management continued to carefully adjust its production to changing market conditions and the slow and uncertain economic recovery.

Proven expertise in steel acquisitions and turnarounds. ArcelorMittal’s management team has proven expertise in successfully acquiring and subsequently integrating operations, as well as turning around underperforming assets within tight timeframes. The Company takes a disciplined approach to investing and uses teams with diverse expertise from different business units across the Company for evaluating any new asset, conducting due diligence and monitoring integration and post-acquisition performance. Since the inception of ArcelorMittal’s predecessor company Mittal Steel in 1989, the Company has grown through a series of acquisitions and by improving the operating performance and financial management at the facilities that it has acquired. In particular, ArcelorMittal seeks to improve acquired businesses by eliminating operational bottlenecks, addressing any historical under-investments and increasing acquired facilities’ capability to produce higher quality steel. The Company introduces focused capital expenditure programs, implements company-wide best practices, balances working capital, ensures adequate management resources and introduces safety and environmental improvements at acquired facilities. ArcelorMittal believes that these operating and financial measures have reduced costs of production, increased productivity and improved the quality of steel produced at these facilities.

Employees. Recognizing them as the Company’s most valuable assets, ArcelorMittal’s management devotes considerable effort towards securing the right people and enhancing their productivity in four key ways: (1) organizational effectiveness, which aligns the organizational structure and size with the Company’s goals and operations; (2) resourcing, workforce planning, skill gaps identification and training which ensuresensure that the right people are in the right roles; (3) succession planning and development; and (4) performance management through measures such as management review and incentive programs.

Corporate responsibility. In recognition of the significance that ArcelorMittal places on corporate responsibility (“CR”) as an element of its core business strategy, a revised CR strategy has been developed and communicated to employees, investors and other stakeholders. Based on ArcelorMittal’s values and vision, the CR strategy is concentrated on the areas of safety, employee development and social dialogue; channeling the Company’s expertise to develop cleaner processes and create more environmentally sound products; and enriching and engaging local communities; allcommunities. All of whichthese goals are further underpinned by a commitment to transparent governance practices. In late 2010, ArcelorMittal entered the Dow Jones Sustainability World Index, a key milestone in the Company’s journey towards delivering safe, sustainable steel, and launched a new human rights policy, strengthening its commitment to respecting human rights across the group.

Business Strategy

ArcelorMittal’s success has been built upon a consistent strategy that emphasizes size and scale, vertical integration, product diversity, continuous growth in higher value products and a strong customer focus. We intend to continue to be the global leader in the steel industry, in particular through the following:

Three-dimensional strategy for sustainability and growth. ArcelorMittal has unique geographical and product diversification, coupled with upstream and downstream integration that reduces exposure to risk and cyclicality. This strategy can be broken down into its three major elements:

Geography: ArcelorMittal is the largest producer of steel in Europe, North and South America, Africa, the second largest steel producer in the CIS region, and has a growing presence in Asia, particularly in China.Asia. ArcelorMittal has steel-making operations in 20 countries on four continents, including 65 integrated, mini-mill and integrated mini-mill steel-making facilities which provide a high degree of geographic diversification. Approximately 35%In 2010, approximately 36% of its steel iswas produced in the Americas, approximately 47% is53% was produced in Europe and approximately 18% is11% was produced in other countries, such as Kazakhstan, South Africa and Ukraine. ArcelorMittal is able to improve management and spread its risk by operating in six segments (Flat Carbon Americas, Flat Carbon Europe, Long Carbon Americas and Europe, AACIS, Stainless Steel, and Steel Solutions and Services) reflecting its geographic and product diversity.

Worldwide steel demand in recent years has been driven by growth in developing economies, in particular in the BRICET countries. The Company’s expansion strategy in recent years has given it a leading position in Africa, Central and Eastern Europe, South America and Central Asia. The Company is also gradually building its presence in China and India and recently made its first strategic investment in India in Uttam Galva.India.

Products:As a global steel producer, ArcelorMittal is able to meet the needs of diverse markets. Steel consumption and product requirements are different in mature economy markets and developing economy markets. Steel consumption in mature economies is weighted towards flat products and a higher value-added mix, while developing markets utilize a higher proportion of long products and commodity grades. As these economies develop, local customers will require increasingly advanced steel products as market needs evolve. To meet these diverse needs, ArcelorMittal maintains a high degree of product diversification and seeks opportunities to increase the proportion of its product mix consisting of higher value-added products. The Company produces a broad range of high-quality finished, semi-finished carbon steel products and stainless steel products.

ValueMining and value chain:ArcelorMittal has access to high-quality and low-cost raw materials through its captive sourcesmines and long-term contracts. ArcelorMittalcontracts with key suppliers, and plans to continue to develop its upstream and downstream integration in the medium-term, followingmedium-term. Iron ore and coal mining projects have been a returnkey focus of ArcelorMittal in recent years and this focus is only expected to a more favorable market environment. Accordingly, the Company intendsintensify in the medium-term, as the Company has a goal to increase selectively its access to and ownershipsecure 100 million tonnes of low-cost raw material supplies, particularly in locations adjacent to, or accessibleiron ore supply from its steel plant operations.own mines and under strategic long term supply contracts on a cost-plus basis. As part of this strategy, in January 2011, the Company announced the acquisition of Baffinland, which holds a substantial undeveloped iron ore deposit in the Canadian territory of Nunavut. For additional information, see “—Business Overview—Raw Materials and Energy—Iron Ore—Baffinland.”

Downstream integration is also a key element of ArcelorMittal’s strategy to build a global customer franchise. In high-value products, downstream integration allows steel companies to be closer to the customer and capture a greater share of value-added activities. As its key customers globalize, ArcelorMittal intends to invest in value-added downstream operations, such as steel service centers and building and construction support services for the construction industry. In addition, the Company intends to continue to develop its distribution network in selected geographic regions. ArcelorMittal believes that these downstream and distribution activities shouldwill allow it to be closer to end-user customers, which in turn will allow it to benefit from better market intelligence and better manage inventories in the supply chain to reduce volatility and improve working capital management. Furthermore ArcelorMittal will continue to expand its production of value-added products in developing markets, leveraging off its experience in developed markets.

Growth Prospects. Notwithstanding the difficult market conditions of 2008/2009,2008-2009, ArcelorMittal’s management believes that there will be strong global steel demand growth in the medium to long term. The Company will continue to invest opportunistically in expanding theits steel production capacity ofwith a view to maintaining and expanding its market share and existing facilitiescustomer base, depending on local market conditions and projected global and regional demand trends.

Mergers and acquisitions have historically been a key pillar of ArcelorMittal’s strategy to which it brings unique experience, particularly in terms of integration. Instead of creating new capacity, mergers and acquisitions increase industry consolidation and create synergies. ArcelorMittal has also placed strong emphasis on growth in emerging economies through greenfield developments. In light of the difficult economic and market conditions prevailing in late 2008 and early 2009, ArcelorMittal sharply curtailed M&A and greenfield investment activity. Toactivity, and this activity remained subdued for most of 2010 (with the extentexception of Baffinland). As market conditions continue togradually improve, however, the Company gradually expects to resume M&A and other investment activity in orderintends to take advantage of selected growth opportunities, mainly in the mining sector and in emerging markets. In addition the Company remains focused on pursuing its greenfield growth opportunities.

Business Overview

ArcelorMittal reports its operations in six operating segments:five reportable segments representing continuing operations: Flat Carbon Americas, Flat Carbon Europe, Long Carbon Americas and Europe, Asia, Africa and CIS (“AACIS”), and Distribution Solutions. Stainless Steel and Steel Solutions and Services.is presented as discontinued operations.

The following table sets forth selected financial data by operating segment.

		Flat Carbon Americas			Flat Carbon Europe			Long Carbon Americas & Europe			Asia & Africa CIS		Stainless Steel			Steel Solutions and Services			Others / Elimination(1)			Total
Year ended December 31, 2009
Sales		13,340			19,981			16,767			7,627		4,234			13,524			(10,363	)		65,110
Operating income		(757	)		(540	)		(29	)		265		(172	)		(286	)		(159	)		(1,678	)
Depreciation and impairment		1,170			1,505			1,379			547		329			356			172			5,458
Capital expenditures		523			937			545			435		127			131			94			2,792
Total assets		17,571			29,627			25,778			7,648		3,772			4,845			38,456			127,697
Total liabilities		8,687			10,026			6,083			1,727		1,466			3,075			31,235			62,299

Millions of U.S. dollars		Flat Carbon Americas				Flat Carbon Europe				Long Carbon Americas & Europe				Asia & Africa & CIS				Distribution Solutions				Others / Elimination*				Total
Year ended December 31, 2008
Sales to external customers			24,687				31,402				27,812				9,218				21,061				2,762				116,942
Intersegment sales			2,344				6,898				4,456				3,915				2,065				(19,678	)			—
Operating income			2,638				2,773				4,154				3,145				181				(931	)			11,960
Depreciation			937				1,648				1,269				540				200				128				4,722
Impairment			291				276				456				9				5				—				1,037
Capital expenditures			1,082				1,443				1,195				891				280				490				5,381
Year ended December 31, 2009
Sales to external customers			11,608				16,284				14,836				5,349				12,382				562				61,021
Intersegment sales			1,732				3,697				1,931				2,278				1,142				(10,780	)			—
Operating income			(757	)			(501	)			(29	)			265				(286	)			(162	)			(1,470	)
Depreciation			1,129				1,417				1,092				544				215				177				4,574
Impairment			41				88				287				3				141				(8	)			552
Capital expenditures			523				937				545				435				131				138				2,709
Year ended December 31, 2010
Sales to external customers			17,101				20,898				18,218				6,932				14,225				651				78,025
Intersegment sales			2,200				4,652				3,127				2,916				1,519				(14,414	)			—
Operating income			2,044				583				1,068				802				164				(1,056	)			3,605
Depreciation			916				1,403				1,086				597				176				217				4,395
Impairment			—				77				11				305				113				19				525
Capital expenditures			711				793				704				670				124				306				3,308

See also Note 24 to ArcelorMittal’s consolidated financial statements

Products

ArcelorMittal has a high degree of product diversification relative to other steel companies. Its plants manufacture a broad range of finished and semi-finished steel products of different specifications, including many difficult and technically sophisticated products that it sells to demanding customers for use in high-end applications.

ArcelorMittal’s principal products include:

Steel-Making Process

Historically, primary steel producers have been divided into “integrated” and “mini-mill” producers. Over the past few decades, a third type of steel producer has emerged that combines the strengths of both the integrated and the mini-mill processes. These producers are referred to as “integrated mini-mill producers”.

Integrated Steel-Making

In integrated steel production, coal is converted to coke in a coke oven, and then combined in a blast furnace with iron ore and limestone to produce pig iron, which is subsequently combined with scrap in a converter, which is generally a basic oxygen or tandem furnace, to produce raw or liquid steel. Once produced, the liquid steel is metallurgically refined and then transported to a continuous caster for casting into a slab, bloom or billet, which is then further shaped or rolled into its final form. Various finishing or coating processes may follow this casting and rolling. Recent modernization efforts by integrated steel producers have focused on cutting costs through eliminating unnecessary production steps, reducing manning levels through automation, and decreasing waste generated by the process. In recent years, integrated steel production has declined as a proportion of total steel production due to the high costs of building, operating and maintaining integrated steel operations, including lost production time associated with periodic blast furnace relinings. This reduction in integrated production capacity has increased the market share of the remaining producers of the highest value-added products that require the cleanest steel.

Mini-Mills

A mini-mill employs an electric arc furnace to directly melt scrap and/or scrap substitutes such as direct reduced iron, thus entirely replacing all of the steps up to and including the energy-intensive blast furnace. A mini-mill incorporates the melt shop, ladle metallurgical station, casting, and rolling into a unified continuous flow. Mini-mills are generally characterized by lower costs of production and higher productivity than integrated steel-makers. These attributes are due in part to the lower capital costs and lower operating costs resulting from the streamlined melting process and more efficient plant layouts of mini-mills. The quality of steel produced by mini-mills is primarily limited by the quality of the metallic raw materials used in liquid steel-making, which in turn is affected by the limited availability of high-quality scrap or virgin ore-based metallics for use in the electric arc furnaces. Mini-mills are substantially dependent on scrap, which has been characterized by price volatility, generally rising prices and limited availability in recent years.

Integrated Mini-Mills

Integrated mini-mills are mini-mills that produce their own metallic raw materials consisting of high-quality scrap substitutes, such as direct reduced iron. Unlike most mini-mills, integrated mini-mills are able to produce steel with the quality of an integrated producer, since scrap substitutes, such as direct reduced iron, are derived from virgin iron ore, which has fewer impurities. The internal production of scrap substitutes as the primary metallic feedstock provides integrated mini-mills with a competitive advantage over traditional scrap-based mini-mills by insulating the integrated mini-mills from their dependence on scrap, which is generally more expensive and has been subject to price volatility, generally rising prices and limited availability. The internal production of metallic feedstock also enables integrated mini-mills to reduce handling and transportation costs. The high percentage use of scrap substitutes such as direct reduced iron also allows the integrated mini-mills to take advantage of periods of low scrap prices by procuring a wide variety of lower-cost scrap grades, which can be blended with the higher-purity direct reduced iron charge. Because the production of direct reduced iron involves the use of significant amounts of natural gas, integrated mini-mills are more sensitive to the price of natural gas than are mini-mills using scrap.

Key Products

Steel-makers primarily produce three types of steel products; flat products, long products and stainless steel. Flat products, such as sheet or plate, are produced from slabs. Long products, such as bars, rods and structural shapes, are rolled from blooms and/or billets. Stainless steel products include austenitic stainless, ferritic stainless and martensitic stainless.

Flat Products

Slab. A slab is a semi-finished steel product obtained by the continuous casting of steel or rolling ingots on a rolling mill and cutting them into various lengths. A slab has a rectangular cross-section and is used as a starting material in the production process of other flat products (e.g., hot-rolled sheet)sheet, plates).

Hot-Rolled Sheet. Hot-rolled sheet is minimally processed steel that is used in the manufacture of various non-surface critical applications, such as automobile suspension arms, frames, wheels, and other unexposed parts in auto and truck bodies, agricultural equipment, construction products, machinery, tubing, pipe and guard rails. All flat-rolled steel sheet is initially hot-rolled, a process that consists of passing a cast slab through a multi-stand rolling mill to reduce its thickness to less than 12 millimeters. Flat-rolled steel sheet that has been wound is referred to as “coiled”.

Cold-Rolled Sheet. Cold-rolled sheet is hot-rolled sheet that has been further processed through a pickle line, which is an acid bath that removes scaling from steel’s surface, and then successively passed through a rolling mill without reheating until the desired gauge, or thickness, and other physical properties have been achieved. Cold-rolling reduces gauge and hardens the steel and, when further processed through an annealing furnace and a temper mill, improves uniformity, ductility and formability. Cold-rolling can also impart various surface finishes and textures. Cold-rolled steel is used in applications that demand higher surface quality or finish, such as exposed automobile and appliance panels. As a result, the prices of cold-rolled sheet are higher than the prices of hot-rolled sheet. Typically, cold-rolled sheet is coated or painted prior to sale to an end-user.

Coated Sheet. Coated sheet is generally cold-rolled steel that has been coated with zinc, aluminum or a combination thereof to render it corrosion-resistant and to improve its paintability. Hot-dipped galvanized, electro-galvanized and aluminized products are types of coated sheet. These are also the highest value-added sheet products because they require the greatest degree of processing and tend to have the strictest quality requirements. Coated sheet is used for many applications, often where exposed to the elements, such as automobile exteriors, major household appliances, roofing and siding, heating and air conditioning equipment, air ducts and switch boxes, as well as in certain packaging applications, such as food containers.

Plates. Plates are produced by hot-rolling either reheated slabs or ingots. The principal end uses for plates include various structural products such as for bridge construction, storage vessels, tanks, shipbuilding, line pipe, industrial machinery and equipment.

Tinplate. Tinplate is a light-gauge, cold-rolled, low-carbon steel usually coated with a micro-thin layer of tin. Tinplate is usually between 0.14 millimeters and 0.84 millimeters thick and offers particular advantages for packaging, such as strength, workability, corrosion resistance, weldability and ease in decoration. Food and general line steel containers are made from tinplate.

Long Products

Billets/Blooms.Billets and blooms are semi-finished steel products. Billets generally have square cross-sections up to 180 millimeters by 180 millimeters, and blooms generally have square cross-sections greater than 180 millimeters by 180 millimeters. These products are either continuously cast or rolled from ingots and are used for further processing by rolling to produce finished products like bars and wire rod sections.

Bars.Bars are long steel products that are rolled from billets. Merchant bar and reinforcing bar (rebar) are two common categories of bars. Merchant bars include rounds, flats, angles, squares, and channels that are used by fabricators to manufacture a wide variety of products such as furniture, stair railings, and farm equipment. Rebar is used to strengthen concrete in highways, bridges and buildings.

Special Bar Quality (SBQ) Steel.SBQ steel is the highest quality steel long product and is typically used in safety-critical applications by manufacturers of engineered products. SBQ steel must meet specific applications’ needs for strength, toughness, fatigue life and other engineering parameters. SBQ steel is the only bar product that typically requires customer qualification and is generally sold under contract to long-term customers. End-markets are principally the automotive, heavy truck and agricultural sectors, and products made with SBQ steel include axles, crankshafts, transmission gears, bearings and seamless tubes.

Wire Rods.Wire rod is ring-shaped coiled steel with diameters ranging from 5.5 to 42 millimeters. Wire rod is used in the automotive, construction, welding and engineering sectors.

Wire Products.Wire products include a broad range of products produced by cold reducing wire rod through a series of dies to improve surface finish, dimensional accuracy and physical properties. Wire products are used in a variety of applications such as fasteners, springs, concrete wire, electrical conductors and structural cables.

Structural Sections.Structural sections or shapes is the general term for rolled flanged shapes with at least one dimension of their cross-section of 80 millimeters or greater. They are produced in a rolling mill from reheated blooms or billets. Structural sections include wide-flange beams, bearing piles, channels, angles and tees. They are used mainly in the construction industry and in many other structural applications.

Rails.Rails are hot-rolled from a reheated bloom. They are used mainly for railway rails but they also have many industrial applications, including rails for construction cranes.

Seamless Tube: Seamless tubes have outer dimensions of approximately 25 millimeters to 508 millimeters. They are produced by piercing solid steel cylinders in a forging operation in which the metal is worked from both the inside and outside. The final product is a tube with uniform properties from the surface through the wall and from one end to the other.

Welded Pipes and Tubes:Welded pipes and tubes are manufactured from steel sheet that is bent into a cylinder and welded either longitudinally or helically.

Stainless Steel

Stainless steel is steel with a carbon content less than or equal to 1.2%, together with a chromium content of at least 10.5%, possibly with additional alloying elements. The alloying elements most commonly used in stainless steels are chromium, nickel, molybdenum, titanium, niobium, manganese, nitrogen, copper, silicon, aluminum and vanadium. The addition of other elements provides further advantages, such as resistance to corrosion in highly aggressive media; resistance to oxidation at high temperatures; toughness and ductility at very low temperatures; high mechanical strength; and fabricability (including drawing, bending, hydroforming, welding and brazing). The following are main classifications of stainless steel:

In January 2011, ArcelorMittal completed the spin-off of its stainless steel operations to a separately-focused company, Aperam. See “Item 4A—History and Development of the Company—Recent Developments”.

Electrical Steels

There are three principal types of electrical steel: grain-oriented steels, non-oriented fully processed steels and non-oriented semi-processed steels:

Direct Reduced Iron

Direct reduced iron, also known as DRI, is produced by removing the oxygen from iron ore without melting it. DRI is used as feedstock for electric arc furnaces and is a high-quality substitute for scrap. In 2009,2010, ArcelorMittal produced 5.27.4 million tonnes of DRI. Direct reduced iron enables ArcelorMittal to control the quality and consistency of its metallic input, which is essential to ensure uniform high quality of the finished products. Direct reduced iron has historically given ArcelorMittal a cost advantage compared to scrap.

Raw Materials and Energy

ArcelorMittal’s principal raw material input items are iron ore, solid fuels (coke and coking coal), metallics, alloys, metals, energy and industrial gases.

ArcelorMittal’s raw materials supply strategy consists of:

Faced with rising and more volatile raw materials prices in recent years and in light of the concentrated nature of the mining industry (in particular iron ore), ArcelorMittal has pursued a strategy of selectively acquiring mining assets that are complementary to its steel producing activities and making substantial investments in the development of its captive raw material base in order to raise its self-sufficiency level. These acquisitions and investments have focused mainly on iron ore and coking coal, which are the two most important inputs in the steel-making process, but have also included investments to secure access to other raw materials such as molybdenum and manganese. ArcelorMittal has exploration and evaluation mining projects in India, Africa and South America that have not yet reached the development and production stages, and whose advancement was delayed in late 2008 and 2009 due to the global economic crisis. See “Item 4—Information on the Company—Updates on Previously Announced Investment Projects”. ArcelorMittal also holds stakes in a few joint ventures and other entities with substantial mining assets. As the global economic crisis took holdcontinued in late 2008 and 2009,2010, ArcelorMittal focused on optimizing output and production from its existing captive sources rather than on further expanding its portfolio of mining assets. In 2009,early 2011, the Company’s expansion of its captive raw materials base resumed with its acquisition of Baffinland, owner of an undeveloped iron ore deposit in the Canadian territory of Nunavut. (see “Item 4A—Information on the Company—Recent Developments”). The Baffinland project is described below under “Iron Ore—Baffinland”.

For the year ended December 31, 2010, ArcelorMittal sourced approximately 64%56% of its iron ore requirements and about 21%15% of its metallurgical coal requirements from its own mines and other captive sources, including contracts, mainly on a cost-plus contracts.basis, with local supplier partners as described below.

ArcelorMittal also has in placeis a party to contracts with mining companies that provide long-term, stable sources of raw materials. The Company’s largest of these contracts are iron ore supply contracts are agreements with Vale that were entered into in 2008 and amended in 2009 in response to changed market conditions in order to reduce and introduce a greater level of flexibility with respect to ArcelorMittal’s purchasing requirements and Vale’s supply requirements.requirements (although quarterly minimum amounts remain in effect). ArcelorMittal’s other principal international iron ore suppliers include Cleveland-CliffsCliffs Natural Resources Inc. in the United States, Metalloinvest in Russia, Metinvest in Ukraine, Société Nationale Industrielle et Minière (S.N.I.M.) in Mauritania, Luossavaara-Kiirunavaara AB (LKAB) in Sweden, Samarco in Brazil and RioIOC (Rio Tinto Ltd.) in Canada. In 2010 ArcelorMittal also developed substantial high-grade iron ore supply from Venezuela in partnership with Duferco Group. ArcelorMittal’s principal coal suppliers include the BHP Billiton Mitsubishi Alliance in Australia, Alpha Natural Resources in the United States, Anglo Coal in Australia, Xstrata Coal in Australia, Walter Energy Inc. in the United States and MacArthur Coal in Australia.

ArcelorMittal believes that these supply contracts can play an important role in preventing disruptions in the production process, thereby enhancing operational efficiency. The cost of such supplies has become relatively less stable in 2010 following the change in the iron ore benchmark pricing from annual to quarterly prices during the first half of the year. See “Item 5—Operating and Financial Review and Prospects—Raw Materials”. In 2009,2010, ArcelorMittal sourced substantiallynearly all of its external iron ore requirements and coking coal requirements under such long-term contracts. ArcelorMittal did not purchase significant amounts of iron ore and coking coal on the spot marketunder short term contracts in 2009.

Although the fall in spot market prices for raw materials in late 2008 and into 2009 temporarily reduced the cost advantages of proprietary mining assets and long-term supply contracts, ArcelorMittal believes that securing access to raw materials is essential and that self-sufficiency will continue to be a strategic goal for the Company over the medium and long term. Information on raw materials price trends affecting ArcelorMittal in 2009 is set forth under “Item 5—Operating and Financial Review and Prospects—Overview—Raw Materials”).2010.

The table below sets forth information regarding ArcelorMittal’s raw material production and consumption in 2009.2010.

Iron Ore

ArcelorMittal sources significant portions of its iron ore needs from its own mines in Kazakhstan, Ukraine, Bosnia, Algeria, Canada, the United States, Mexico and Brazil. ArcelorMittal is also expanding capacity of existing mines in Mexicothe United States, India and Ukraine.Brazil. In addition, the Company has announced prospective mining developments in India, Africa, South America and SouthNorth America. See “Item 4—Information on the Company—Updates on Previously Announced Investment Projects”. Several of ArcelorMittal’s steel plants also have in place off-take arrangements with mineral suppliers located near its production facilities, some of which supply the relevant plant’s iron ore requirements on a cost-plus basis. Taking into account these arrangements, ArcelorMittal’s captive sources of iron ore accounted for approximately 64%56% of ArcelorMittal’s 20092010 requirements.

In 2011, the Company is targeting an increase of approximately 10% in its iron ore production as compared to 2010.

The following table sets forth information on ArcelorMittal’s principal iron ore mining operations and production in 2009:2010: