May 17, 2008

CSN proposed slab plants facing one year delay

Bloomberg reported that Brazil Cia Siderurgica Nacional is at least one year behind schedule with plans to build two steel slab mills the company was depending on for production growth.

CSN in April last year said that it expected to set up a 4.5 million tonnes per year plant in Rio de Janeiro by September 2009 and another of the same size in Minas Gerais state by August 2010. But CSN, which hopes to triple its steelmaking capacity, failed to secure China's Baosteel Group Corp as a partner in one of the projects.

Mr Otavio Lazcano CFO of CSN in a telephone interview from Sao Paulo said that “We are facing delays in the signing of accords with the state governments on legal, tax and infrastructure issues.” He added that “We may move ahead with the slabs projects either with a partner or alone. We should be able to expand by 9 million tons a year capacity within the next five years.''

Mr Lazcano said that CSN in 2007 held talks with China’s Baosteel that failed to result in a partnership. The Chinese company confirmed it would instead build a USD 3.6 billion slab mill with Cia Siderurgica Vitoria and Cia Vale do Rio Doce in Espirito Santo state.

In December, CSN signed a preliminary accord with the Minas Gerais state government for a slabs plant, Mr Lazcano said that a similar accord is being worked on with the Rio de Janeiro state government, which has not yet granted environmental permits, he said.