Overview/Facilities

Iron Ore. Bethlehem has indirect equity interests in various iron ore operating properties, which (excluding tonnages applicable to interests owned by others) it estimates contained recoverable reserves at December 31, 1994 sufficient to produce at least 14 million tons of direct shipping iron ore located in Brazil and 446 million tons of iron ore concentrates and pellets, of which 182 million tons are located in Minnesota and 264 million tons in Canada. In addition to the estimated reserves at operating properties, Bethlehem also has indirect equity interests in undeveloped or nonoperating iron ore properties, which (excluding tonnages applicable to interests owned by others) it estimates contained recoverable reserves at December 31, 1994 sufficient to produce at least 29 million tons of direct shipping iron ore located in Brazil and 126 million tons of iron ore pellets located in Minnesota.

The iron ore operating properties in which Bethlehem has interests have mining and processing facilities that are capable of supplying the major portion of Bethlehem's current annual iron ore requirements. However, taking into account the location of Bethlehem's steel operations and the iron ore products best suited to these facilities, Bethlehem has found it advantageous to engage in iron ore sales and exchanges with other consumers and to purchase a portion of its iron ore requirements. These purchases have been from various sources, including sources in which it has ownership interests, under a variety of contractual arrangements extending over varying periods of time.

Bethlehem's share of the annual iron ore pellet production by enterprises in which it had ownership interests, for Bethlehem's use or sale to trade customers, was 13.8 million tons in 1994 and 12.5 million tons in 1993. In addition to these sources, Bethlehem purchased 1.6 million tons and 1.7 million tons of iron ore in 1994 and 1993, respectively, from sources in which it had no ownership interests.

In 1994 Bethlehem obtained approximately 67 percent of its iron ore requirements from operations in which it had ownership interests, compared to 70 percent in 1993. Of the iron ore consumed by Bethlehem in 1994, approximately 56 percent consisted of pellets and 44 percent of sinter.

Through December 31, 1995, Bethlehem is committed to purchase from sources in which it has ownership interests .4 million tons of iron ore in excess of such ownership interests.

Bethlehem had trade sales of iron ore in 1994 and 1993 of 2.3 million tons and 2.0 million tons, respectively. Additional iron ore trade sales commitments through December 31, 1996 presently aggregate 1.1 million tons.

The interests in foreign iron ore properties described above are subject to the risks associated with investments in foreign countries, including the risk of nationalization.