Brazil Steel Co CSN To Have Foreign Partners In New Mills
"The new mills will have partners who will take part of the steel plate to other markets," CSN commercial director Luiz Fernando Martinez said during an analysts' conference Wednesday.
Martinez said negotiations with potential partners were at "an advanced stage."
"There's great interest from potential partners because the mills will have extremely competitive costs," he said.
CSN plans to build a 6.5-billion real ($3.8 billion) 4.5 million metric ton steel mill at Congonhas near its iron ore mines in Minas Gerais State.
A second 4.5 million ton mill is planned for Itaguai on the coast of Rio de Janeiro State, which is connected by railroad to Minas Gerais.
Martinez said CSN's stake in the mills could be less than 50% as long as it exercised control.
CSN's strategy, said Martinez, aimed to guarantee markets for its mines, which are currently being expanded.
CSN's giant Casa de Pedra iron ore mine produced 20.5 million tons last year and plans to expand the mine to 55 million tons a year.
The company's strategy is in line with mining giant Vale SA (VALE, VALE5.BR), which has stakes in a number of steel mill projects in order to ensure a market for a portion of its iron ore.
Martinez said the two mining projects were important to CSN because they could guarantee cheaper costs through economies of scale.
CSN currently operates Brazil's largest steel mill at Volta Redonda, between the cities of Sao Paulo and Rio de Janeiro.
Annual crude steel output at the mill is 5.6 million tons.
-By John Kolodziejski, Dow Jones Newswires; 55-21-2586-6086; John.Kolodziejski@dowjones.com
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Publié le 04 novembre 2009 Copyright © 2009 Dowjones
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