September 07, 2008

Vale sues CSN over Casa de Pedra - Report

The O Estado de Sao Paulo newspaper reported that Brazilian mining conglomerate Companhia Vale do Rio Doce has filed a lawsuit against steelmaker Companhia Siderurgica Nacional over iron ore mining rights.


Vale has been in a dispute with erstwhile business partner CSN over the Casa de Pedra mine via Brazil's antitrust regulator, CADE, since the two companies mutually divested interests in steel and mining operations about four years ago. Vale has earlier failed to win a CADE judgment for compensation for ceding its 30 year preferential mining rights that date from 2001.

Mr Tito Martins corporate relations director of Vale told the newspaper it values the mining rights at around BRR 3 billion (USD 1.76 billion). He said that "The loss of the preferential right will affect Vale's assets, so we need compensation.”

A Vale spokesman confirmed the Estado story but told Dow Jones Newswires he had no further comment as the matter was "a private affair between CSN and Vale."

A CSN spokeswoman also refused to comment on implications from the ongoing court case.

Casa de Pedra produces high grade ore with an iron content up to 68% purity. Casa de Pedra produced 15 million tonnes in 2007, up 14% on 2006. CSN is currently investing USD 3 billion to bring production capacity up to 40 million tonnes per year by the end of 2008. That's expected to rise to 70 million tonnes annually by 2011.