China’s CBSteel negotiates acquisition of stake in Brazil’s Congonhas Minerios

6 October 2016

Brazilian steel company Companhia Siderurgica Nacional (CSN) values its iron ore unit Congonhas Minerios, of which it plans to sell a stake, at between US$30 billion and US$35 billion, the Brazilian press reported.

The source also said that China Brazil Xinnenghuan International Investment Co, which is negotiating with CSN to purchase a share of 20% to 25% of Congonhas Minerios, would thus have to pay a minimum of US$6 billion and a maximum US$8.75 billion.

Last August, Brazilian newspaper O Globo reported that CBSteel intended to buy a 30% stake of the 88% held by CSN in Congonhas Minerios, a company in which a set of six Asian companies already has a stake of 12%.

Congonhas Minerios was founded in late 2014 through the merger of the Casa da Pedra mine, a company 100% owned by CSN and Namisa, a partnership with the aforementioned six Asian companies for the production of iron ore.

The six Asian companies are Itochu Corp., Nisshin Steel Co Ltd, JFE Steel Corp. and Kobe Steel Ltd of Japan, Posco of South Korea and China Steel Corp. of Taiwan.

The intended sale is CSN’s most ambitious divestment plan. The group has one of the biggest liabilities among the major steel producers in Brazil. (macauhub)