Altos Hornos De Mexico, S.A. DE C.V. Concludes Movement Of Heavy Equipment To Begin Expansion Of Open-pit Mine II.

NAVA, Coahuila, Mexico--(BUSINESS WIRE)--Oct. 30, 1998--Altos Hornos de Mexico, S.A.de C.V. ("AHMSA" or the "Company") (NYSE: IAM), today announced that it concluded the transport of heavy equipment to begin exploitation of the "Open-pit Mine II Expansion" of its subsidiary Minera Carbonifera Rio Escondido (MICARE).

The work comprised of moving a Ph-757 walking dredger, affectionately known as "Dona Zita," the largest of its kind in Latin America. The giant dredger's gross weight is 4,500 tonnes. It had not been moved from the principal area of Open-Pit Mine II since it began operations in 1993.

Located in Nava, Coahuila, along federal highway 57, the "Open-Pit II Expansion" occupies an area of 1,569 hectares. In accordance with MICARE's production programs, more than 42 million metric tonnes of steam coal should be produced in the next 16 years. This will supply the two coal-powered plants operated by Mexico's Electricity Commission (CFE). During its life-long operation, the Company plans to invest close to US$168 million.

"Dona Zita" cost approximately US $30 million and was constructed in 1992 by the U.S. firm P&H Harnischfeger. It was assembled near Open-Pit II. The dredger's function is to remove the surface layer of sterile material. Its capacity is equivalent to five high capacity electric shovels and twelve 135-tonne trucks.

In addition to the walking dredger, two 43-tonne electric shovels, a hydraulic excavator, ten 220-tonne capacity trucks, a 5-tonne retroexcavator, two large capacity tractors and rotating perforator also operate at "Open-pit II Expansion".

MICARE produces more than 7.5 million tonnes of steam coal annually for the CFE's carbon plants. It currently is working on two open-pit mines and three underground mines, which are all located in Nava, Coahuila.

Located in Monclova, in the state of Coahuila, AHMSA is the largest steel producer in Mexico. The Company, an integrated steel producer, manufactures a variety of flat steel products. It also produces higher value-added coated products such as galvanized and pre-painted steel, as well as a number of long products. Through its subsidiary MICARE, the Company is also engaged in the production and sale of steam coal for power generation. Visit AHMSA's website at www.ahmsa.com.