Brazil's CSN selling 11% stake in iron ore arm for nearly US$800mn

The board of Brazilian steelmaker CSN approved the sale of an 11% stake in its iron ore arm, CSN Mineração, to Japanese conglomerate Itochu Corporation.

Itochu, which currently owns 9.26% of CSN Mineração via Japan Brasil Minério de Ferro Participações, will pay 7.50 reais per share for the additional stake, or a total of 4.42bn reais (US$776mn).

"The transaction has already been approved by the Brazilian Administrative Council for Economic Defense (CADE). The company estimates that the transfer of the shares will take place on November 12, 2024. On the same date, the [CSN Mineração] CMIN shareholders' agreement will be amended to bind the shares acquired by Itochu Corporation, without altering the rights of the parties in that agreement. Thus, CSN believes that CMIN’s governance and control structure will not be affected," CSN Mineração said in a statement.

The proceeds will be used to reduce CSN’s debt, a person familiar with the company’s strategies told BNamericas, speaking on condition of anonymity.

CSN Mineração is developing a large iron ore project called Itabirito P15, or Casa de Pedra, in Minas Gerais state.

The company plans to start production at the 15Mt/y project in the first quarter of 2027. Itabirito is considered by the firm to be a transformative project as it will improve its iron ore quality by increasing the content from 58% to 65% by 2028.

The better quality iron ore is expected to see greater demand and higher prices due to the need for steel mills in Asia to use raw materials that reduce carbon emissions.