Brazil CSN Negotiating New Iron Ore Port With Gerdau, Petrobras

RIO DE JANEIRO – Brazilian steelmaker Companhia Siderurgica Nacional SA (CSNA3.BR, SID) said it is discussing construction of a new iron ore export port in Brazil with steelmaker and mining company Gerdau SA (GGBR4.BR) and oil and gas producer Petroleo Brasileiro SA (PBR, PETR4.BR), or Petrobras.
The new port with the partners may be ready to emerge in 2015, CSN's new businesses director Juarez Saliba told analysts on a conference call Tuesday.
The port project, named Porto da Pedra, will be sited at Itaguai in Rio de Janeiro state, southeast Brazil, alongside CSN's existing Tecar iron ore export and coal import port, and its Tecon containers port, Saliba said, without giving an idea of the likely investment required nor the planned capacity of the new port.
However, CSN doesn't depend on construction of the new port to meet its iron ore export commitments, which may be handled from Tecar, currently under expansion, the CSN official said.
CSN is expanding output of iron ore which currently gives a better return than steel as high Chinese demand for the steelmaking raw material has inflated iron ore prices in recent years. CSN's net revenues from iron ore reached a record 5.94 billion Brazilian reais ($3.28 billion) in 2011, up 64% on 2010, due to higher sales volumes and market prices which averaged $169 a metric ton in 2011, an annual record and 15% higher than in 2010, according to Platts.
Mining last year contributed 35% of CSN's net revenues, from 24% in 2010, it said.
In 2011 CSN sold 29.3 million tons of iron ore from its Casa de Pedra and Namisa operations, up 16% on 2010. Of the total, 27.9 million tons were exported. Output should rise to 40.8 million tons in 2014 and as much as 100 million tons in 2015, of which 84 million tons could be made available for export. CSN already supplies its own steelworks in Brazil with ore from its own mines in Minas Gerais state. Gerdau is also expanding its iron ore output in the same state and may reach self-sufficiency in iron ore output this year, freeing up the rest of its output for export.
CSN mining director Daniel dos Santos said on the call that operations at CSN's iron ore mines and plants in Congonhas, Minas Gerais state, aren't being affected by a preservation order which has been slapped on a nearby area by environmental agencies.
The curbs affect the Morro do Engenho area where CSN doesn't have any installations, dos Santos told the analysts.
CSN also plans to make a bid for the so-called Area do Meio ("middle area") port terminal area which will be put up for auction by the Rio de Janeiro federal port authority this year, Saliba said. This area lies between CSN's existing port at Itaguai and an iron ore export port owned by mining company Vale SA (VALE, VALE5.BR).
Steelmakers ArcelorMittal (MT) and Usinas Siderurgicas de Minas Gerais SA (USIM5.BR, USZNY), or Usiminas, last week said they are planning to bid jointly for the Area do Meio. Usiminas owns a landlocked area adjacent to the Area do Meio which could be used for a storage area or downstream industrial development, the company said recently.

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