3Q10 Results Conference Call

November 16, 2010

Agenda

1. Vertical integration in raw materials

2. Global expansion of CPP model

3. Macroeconomic Scenario

4. Steel and Cement Market

5. Raw Materials

6. Revenues and Sales Volume

2

7. Operating Profitability

8. Financial Results

9. Share Performance

Magnesita moves forward in vertical integration in raw materials.

I – Expansion of M-30 sinter production

• R$ 220 million project to build two furnaces that will produce 120,000 tonnes/year of M-30 sinter starting

in 2013;

• Expansion of magnesite sinter production capacity gives the Company a competitive edge versus

competitors which purchase sinter from the market. Prices for this raw material have been rising due to

exports barriers introduced by the Chinese government;

• In November, Chinese government reduced the quotas and import tariffs for M-30 sinter by 7.5%. This

measure increased the expectations of additional highs in prices.measure increased the expectations of additional highs in prices.

Source: Industrial Minerals. www.indmin.com - For non-commercial purposes only. No parts may be reproduced, sold or quoted for any purposes, pursuant to the terms

and conditions of Euromoney Institutional Investor PLC and Institutional Investor Inc. 11

150

250

350

450

550

650

750

US$ / t

MgO Sinter Prices

MgO Sinter 97.5% MgO Sinter 92%

3

II – Exploitation of graphite deposits in Almenara (Minas Gerais State)

• Graphite is a strategic raw material for the refractory industry. China is responsible for 80% of graphite world

supply, and is increasing limits on exports, creating a shortage of the material due to substantial increases in

its prices;

• Graphite prices have risen about 14% p.a. on average in the last 6 years and have risen 30% just in the last

three months;

• Demand for graphite is expected to double

in the next 5 years due to new uses, e.g., in

Magnesita moves forward in vertical integration of raw materials.

280

Graphite Price Evolution

Source: Industrial Minerals. www.indmin.com - For non-commercial purposes only. No parts may be reproduced, sold or quoted for any purposes, pursuant to the terms

and conditions of Euromoney Institutional Investor PLC and Institutional Investor Inc. 11

in the next 5 years due to new uses, e.g., in

lithium-ion batteries.

• Graphite accounts for about 6.5% of

Company´s COGS. Own production of

graphite will increase the Company

competitive edge and lead to higher

profitability.

• Magnesita will invest US$ 45 million in the

exploitation and production of 40,000 metric

tons of graphite as of 2012.

80

130

180

230

2004 2005 2006 2007 Jan-08 feb-08 Mar-08 Jul-08 2009 Jun-10

FB

I (2

00

4 =

10

0)

Large Flake, 94% - 97% carbon Large Flake, 90% carbon

Medium Flake, 94% - 97% carbon Medium Flake, 90% carbon

Medium Flake, 85% - 87% carbon Fine Flake, 94% - 97% carbon

Fine Flake, 90% carbon Natural Graphite > 99,5% Carbon

4

The global expansion of CPP model continues to expand beyond Brazil

CPP contracts since 2008

7

USA

China

2

1UK

3

Germany

2

4

Mexico

2

Canada

Romania

1

Sole company in the whole industry able to provide refractory solutions under the CPP model in all major steel producing areas worldwide: South America, North America, Europe and Asia

Total: 28 contracts since 2008% of revenue: 33.3%

Ecuador

1

Brazil

Chile

Peru

14

1

4

5

Macroeconomic indicators showed more modest improvements in 3Q10, and the exchange rate variation had a greater impact on results.

5%

0%

10%

1%

8%

3%

0%

9%

7%

-1%

8%

3%

11%

2%

9%

5%

GDP by Region

100

101

102

103

104

105

106

107

108

Industrial Production Index(FBI Dec/09=100)

USD/BRL EUR/BRL

Average rate -2.4% -0.6%

Rate at 3Q10-close -6.0 +4.8%

FOREX in 3Q10:

Source: International Monetary Fund and Brazilian Central Bank

-3%

-4%

Brazil USA China EU Asia World

2008 2009 Oct/2010 - anualized

99

100

Brazil EU-27 * USA

6

World steel production slows down after a 5-quarter rise.

124 138127

108127 137

154 147 158 165 151

304

357337

267 266285

319327

344 364339

World Crude Steel Production (million tonnes)

World exWorld ex--ChinaChina

ChinaChina

7Source: World Steel Association (WSA), International Stainless Steel and Brazilian National Steel Distributors’ Institute (INDA)

1Q08 2Q08 3Q08 2Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10

8.6 8.89.4

6.9

5.05.6

7.9 8.1 8.0 8.4 8.4

1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10

Brazilian Crude Steel Production(million tonnes)

0

5

10

15

20

25

Number of months

Brazilian distributors’s inventories of main steel products

Heavy Plates Hot Rolled Coil Slabs

Brazilian cement production is still on the rise, impacted by higher sales of aluminum refractories.

11.8

12.6

14.1

13.4

11.7

12.3

13.7 13.713.3

14.4

16.1Cement Production in Brazil

(million tonnes)

8Source: SNIC

1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 -E

89.3

104.9

119.3

107.8

122.6

3Q09 4Q09 1Q10 2Q10 3Q10

Revenues from Alumina Refractories(R$ million)

Refractory production costs are still under strong raw material price pressure.

130

150

170

190

210

jun/09 = 100

Raw Material Prices Evolution

Source: Industrial Minerals. www.indmin.com - For non-commercial purposes only. No parts may be reproduced, sold or quoted for any purposes, pursuant to the

terms and conditions of Euromoney Institutional Investor PLC and Institutional Investor Inc.

90

110

Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10

Brown Alumina White Alumina Zirconia Graphite Electrofused Magnesia

9

The company is highly vertically integrated in raw materials, which represent approximately 70% of the volume consumed. The remaining 30% of purchased raw materials represents between 35 and 40% of production costs. The strategy is to achieve 90% vertical integration by 2013.

Highlights in 3Q10

86,586 tonnes

78,393 tonnes

69,749 tonnes

• Record high refractory sales by South American units

3Q10 2Q10 3Q09

R$ 112.9 MM

R$ 125.1 MM

R$ 96.4 MM• 9.7% lower selling and administrative expenses

10

19.0% 19.7% 21.1%• Stable adjusted EBITDA margin (*)

R$ 31.6 MM

R$ 24.6 MM

R$ 24.4 MM• 28.6% rise in net income

Good performance despite the seasonally weaker period in the Northern Hemisphere, raw-materials cost pressure, and an unfavorable exchange rate.

(*) excluding extraordinary/non-recurring items

Balanced product portfolio and geographic distribution of sales, coupled with high vertical integration, help safeguard the Company from external impacts.

69.8 77.6 80.1 78.4 86.6

150.1161.1 178.1 180.4 169.3

3Q09 4Q09 1Q10 2Q10 3Q10

Refractories sales volume(thousand tonnes)

219.9238.7

258.2 258.8 255.9

221.4 251.0 260.0 262.7 284.8

262.2286.8 305.9 289.1 285.7

3Q09 4Q09 1Q10 2Q10 3Q10

Net Revenues - R$ million

483.6537.7

565.9 551.7 570.5

11

Domestic Market Overseas Market Domestic Market Oversea Market

57.6%

20.5%17.3%

4.6%

56.0%

17.5% 15.4%9.3%

1.8%

South America Europe North America Asia RoW

Net Revenues by Location - 3Q10

Production Destination

Overseas Market

Balanced product portfolio and geographic distribution of sales, coupled with high vertical integration, help safeguard the Company from external impacts.

Integrated Mills41.3%

Specialty Steels27.8%

Eletric Mills28.2%

Others2.7%

Revenues by Segment – 3Q10

Steel

84.5%

Cement

8.3%

Others

7.2%

Refractories86.6%

Services7.1%

Other Minerals3.8%

Sínter 1.7%

Other Products0.8%

Net Revenues by Products - 3Q10

12

Magnesian34.6%

Dolomitic30.1%

Aluminous24.8%

Others10.5%

Net Revenues by Chemical Composition-3Q10

84.5%86.6%

Despite the hurdles in 3Q10, Magnesita’s operating profitability remained stable and ranks first in the industry.

169.7

183.6

196.2199.2

194.935.1% 34.1%

34.7% 36.1%34.2%

10

15

20

25

30

35

40

150155160165170175180185190195200205

3Q09 4Q09 1Q10 2Q10 3Q10

Gross Profit and Gross Margin -Consolidated

Raw Material*38.4%

Labor

Depreciation6.6%

Maintenance5.0%

Electricity3.6%

Others17.2%

COGS Breakdown- 9M10

13

106.0

123.1119.1 118.2

125.3

40.2 39.5 39.3 39.5 38.1

2 0

2 5

3 0

3 5

4 0

4 5

5 0

5 5

6 0

9 5

1 0 0

1 0 5

1 1 0

1 1 5

1 2 0

1 2 5

1 3 0

3Q09 4Q09 1Q10 2Q10 3Q10

Gross Profit and Gross Margin - South America

Gross Profit - R$ million Gross Margin - %

63.7 60.5

77.081.0

69.6

28.926.8

29.332.1

28.8

1 0

1 5

2 0

2 5

3 0

3 5

4 0

4 5

5 0

5 5

6 0

0

1 0

2 0

3 0

4 0

5 0

6 0

7 0

8 0

9 0

3Q09 4Q09 1Q10 2Q10 3Q10

Gross Profit and Gross Margin - Other Units

Gross Profit - R$ million Gross Margin - %

3Q09 4Q09 1Q10 2Q10 3Q10

Gross Profit - R$ million Gross Margin

Labor18.8%

Fuel10.4%

* Acquired from third parties

Despite the hurdles in 3Q10, Magnesita’s operating profitability remained stable and ranks first in the industry.

110.1

138.8123.1 119.5

108.6

22.825.8

21.8 21.719.0

0

1 0

2 0

3 0

4 0

5 0

6 0

0

2 0

4 0

6 0

8 0

1 0 0

1 2 0

1 4 0

1 6 0

3Q09 4Q09 1Q10 2Q10 3Q10

EBTIDA and EBITDA Margin

14

South America

Consolidated

Other Units

3Q09 4Q09 1Q10 2Q10 3Q10

EBITDA - R$ million EBITDA Margin - %

26.4

29.3

23.422.6 22.6

14.814.1

15.116.1

14.2

21.1

22.9

19.5 19.719.0

3Q09 4Q09 1Q10 2Q10 3Q10

Ajusted EBITDA and Margin

65.591.3

70.8 67.7 74.3

32.6

31.7

39.8 40.7 34.3

3Q09 4Q09 1Q10 2Q10 3Q10

Ajusted EBITDA (R$ million)

South America Other Units

102.1

123.0110.6 108.4 108.6

Adjusted EBITDA Margin

A balanced debt amortization schedule allows focusing on operations and improving financial indicators.

1,434.4 1,414.8 1,413.6

1,491.0

1,444.1

5.5

3.9

3.2 3.0 2.9

0,5

1,5

2,5

3,5

4,5

5,5

6,5

1.350,0

1.370,0

1.390,0

1.410,0

1.430,0

1.450,0

1.470,0

1.490,0

1.510,0

1.530,0

1.550,0

3Q09 4Q09 1Q10 2Q10 3Q10

Net Debit - R$ million Net Debt/EBITDA

Net Debt

63.457.3

64.7

42.8 44.7

3Q09 4Q09 1Q10 2Q10 3Q10

Net Financial Expenses(R$ million)

15

Net Debit - R$ million Net Debt/EBITDA

34%20% 25%

11% 5%

66%

80% 75% 89% 95%

09-30-09 12-31-09 03-31-10 06-30-10 09-30-10

Total Debt Profile (R$ million)

Long-term

Short-term

98.416.6 26.6

292.4

401.3 400.9

657.9

2010 2011 2012 2013 2014 2015 2020

Amortization Schedule(R$ million) 2,184.3

1,782.4 1,861.71,950.8 1,894.1

Obs.: considering Ebitda L12M

MAGG3 share performance

110

120

130

140

150

09/30/09 = 100

Stock Performance (09/30/09 to 09/30/10)

12.9%

16

• Banks covering the Company's shares: Barclays, Itaú, Santander, Credit Suisse, BTG Pactual,

Merrill Lynch, Safra, Deutsche Bank and Morgan Stanley.

80

90

100

Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10

09/30/09 = 100

MAGG3 IBOVESPA

0%

Flávio Rezende BarbosaCFO and Investor Relations Officer

Adriana Fernandes Lana

17

Adriana Fernandes LanaInvestor Relations Manager

Phone number: +55 31 3368-1069

Lucas Lima FerreiraInvestor Relations Analyst

Phone number: +55 31 3368-1068

ri@magnesita.com www.magnesita.com/ri