Brazil’s CSN secures $350mln funding for expansion of Casa de Pedra iron ore mine

Brazilian iron ore and flat steel producer Companhia Siderúrgica Nacional (CSN) has secured funding for the expansion of its Casa de Pedra mine at Congonhas in the southeastern state of Minas Gerais, the company said on Wednesday May 12.

A key element of the plan is a switch to the dry processing of tailings from the mine.

CSN currently has capacity to produce 33 million tonnes per year of iron ore, with the vast majority coming from the Casa de Pedra mine. It plans on expanding that to 108 million tpy by 2033.

Via its mining division CSN Mineração, CSN signed a $350-million export pre-payment deal with a syndicate of banks comprising the Tokyo branch of BNP Paribas, Citibank, Crédit Agricole and Société Générale.

The 12-year term agreement is backed by a credit insurance deal with Nippon Export & Investment Insurance, the company added.

“[This agreement aims] to guarantee the continuity of supply of high-quality iron ore to long-term Japanese customers and to the market in general,” CSN said. “This transaction marks the beginning of CSN Mineração’s strategy to finance its long-term growth projects using appropriate instruments.”

CSN unveiled its plans for iron ore capacity increase together with the announcement of an initial public offering of CSN Mineração stock on the Brazilian stock exchange, B3, back in September 2020.

Shares of CSN Mineração debuted on B3 in February this year after raising 4.97 billion Reais ($949 million) with its IPO. Stock was trading at 10.90 Reais on Wednesday morning, up by 5.62% from 10.32 Reais the day before and by 28.24% from 8.50 Reais on its debut.

Like other iiron ore miners, the company has started to use filtering and dry stacking techniques for storing tailings, rather than continuing to depend on dams, after the government introduced stricter regulations in response to the Brumadinho tailings dam tragedy at Vale’s Córrego do Feijão mine in January 2019.

Bullish market sentiment on iron ore, fueled by favorable supply-demand fundamentals and an uptrend in finished steel prices, has led to record high prices for the steelmaking raw material.

Fastmarkets’ daily index for iron ore 62% Fe fines, cfr Qingdao, was calculated at $237.57 per tonne on Wednesday, up by 3.77% from $228.93 per tonne the day before, 23.39% higher than $192.54 per tonne a week before, and at its highest level since first publication on May 23, 2008.

Meanwhile, Fastmarkets’ index for iron ore 65% Fe Brazil-origin fines, cfr Qingdao, reached an all-time high of $267.80 per tonne on Wednesday, a 2.76% daily increase from $260.60 per tonne and rising by 17.97% from $227 per tonne on May 5.

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