Glossary

Pig Iron: Semi-finished metal produced from iron ore in blast furnace, raw material used in the manufacture of steel.

Billet: Semi-finished steel product used to roll long products such as rod, wire rod, bars and structural products. The billet is different from the steel slab for its external dimensions and its

section, which is usually square, and measures between two and seven inches of edge, and the steel slab of the rectangular section measures between 30 and 80 inches wide and 2 to 10 inches thick.

Installed Capacity: Nominal capacity to produce steel in a specific period of time.

Collection Centers: Courtyards for mixing coal from different supply sources for delivery of a single coal according to the customer’s specifications.

Continuous Casting (“CC”): Method of casting steel directly from the furnace to a certain mold, either steel slab or billet. The steel in the furnace is casted into pots which are placed on a

distributor, which in turn, is located on the top of the continuous casting. While the steel is casted from the distributor into a mold, it solidifies forming a hot steel ribbon. At the end of the continuous

casting, a guillotine cuts the continuous flow forming billets or slabs.

Descaling: Process in which the roll of steel is cleaned from rust, impurities and oil for use in subsequent processes. Through a continuous process, the roll is unrolled and goes through a bath of

hydrochloric acid to remove oxidation. Later, the blade is rinsed and dried.

Dumping: Unfair trade practice sanctioned by Mexican laws and the World Trade Organization (“WTO”), which consists of selling a product for export at a price lower than that in its domestic market.

ISO: International organization for standardization of operations for the assurance of production quality.

ISO 9001: Certification concerning the standardization and normalization of operations for the assurance of production quality.

ISO 14001: International voluntary certification that allows managing the impacts of an activity, a good or a service in relation to the environment in accordance with the ISO.

Hot Rolled Steel Sheet: Hot steel roll flattened in a mill. It can be sold this way or it can be further processed in other finished goods.

Cold Rolled Steel Sheet: Steel sheet that after being hot rolled, has gone through a descaling process and cold reduction mills. Cold rolled steel sheets have a caliber considerably less than hot sheets; therefore, it is a product of higher value added.

Environmental Laws: Mean the laws, bylaws, ordinances, regulations, criteria, guidelines, federal, state, and municipal official standards and rules currently in force in Mexico concerning to the regulation and protection of human health, safety, environment and natural resources, including air, surface waters, groundwater, wetlands, land, superficial or subsoil strata, flora and fauna, aquatic species and vegetation.

Lims: Magnetic drums.

Ingot: Steel semi-finished good. Liquid steel is poured into moulds or ingot moulds where it solidifies. Once the steel cools, the mold is removed and the ingot is overheated to subsequently go through hot mills.

Iron Ore: A mineral that contains enough iron to be used in the production of steel. The iron is not found freely, but it is trapped in the crust of the soil in the form of iron oxide.

MMBTU: “Million British Thermal Units,” which represents the English unit to measure the heating power of a substance.

Hot mill: Reducing mill consisting of several roll-housings that turn steel slab to steel rolls. This mill uses horizontal rollers of decreasing distance between them to push the steel slab and turn it to steel rolls.

Pellet: Particle of iron ore condensed into small spheres in a palletizing drum and hardened by means of heat.

Steel slab: Semi-finished Steel good of flat steel that is laminated in a mill to obtain hot rolled sheets. The slabs are between 30 and 96 inches wide (and an average of 20 feet long), while the continuous thin steel slab is 2 inches thick.

Long products: Classification of steel products which include rods, bars, wire rods and structural products.

UAFIRDA: Earnings before financial income and expenses plus other reserves, plus depreciation and amortization.