Made-in-Italy supplies for the CSN Mineracao iron mines in Brazil thanks to SACE’s Push Strategy
Numerous Italian companies will be involved in increasing the production capacity of the CSN Group (Companhia Siderúrgica Nacional), the second-largest exporter of Brazilian iron ore, thanks to SACE’s Push Strategy. SACE has guaranteed a loan of 375 million dollars, granted by a pool of banks led by BNP Paribas, as Agent, Bookrunner, and Policyholder, and composed of Mandated Lead Arranger BNP Paribas, Crédit Agricole Corporate and Investment Bank, Natixis Corporate & Investment Banking through its New York Branch, and Société Générale Milan Branch. The loan is in favour of CSN Mineracao SA, which is active in iron extraction, processing, and sales.
Thanks to the Push Strategy, SACE acts as a forerunner for Italian exports in markets with high potential for Made in Italy, facilitating the granting of contracts to Italian exporters. The programme involves organising business matching meetings - the first will be before the end of 2022 - between Italian SMEs interested in being accredited as suppliers and the procurement teams of foreign counterparties who benefit from the credit lines. The potential involvement of 453 Italian companies, especially SMEs, interested in the sectors in which CSN Group operates, is anticipated. The business matching meetings will be additionally strengthened thanks to an increasingly rich calendar of events and the strengthened collaboration with Italian economy business associations and bodies that are present there.
The SACE office in São Paulo in Brazil facilitated the closure of the transaction since it had already been in contact with the CSN Group for more than 5 years and had already launched a collaborative relationship that permitted them, after the COVID-19 crisis, to choose the best solution both for their business and for Italian companies. In fact, over the last 6 years, the CSN Group has already signed commercial contracts relating to supplies with 19 Italian exporters including various SACE clients, such as Matec, Paul Wurth Italia, Leonardo, and Bedeschi.
The loan contributes to the development of CSN Group’s investment plan over the 2021-2025 five-year period. This provides for the construction of a new production site in Congonhas City in the state of Minas Gerais, industrial expansion projects for existing production plants, and the implementation of technology to increase the recovery of scrap material, with the aim of increasing the value of Italian imports.
The CSN Group, active in the steel sector since 1941, has a production capacity of 5.6 million tonnes per year of raw steel. In 2015, it purchased Nacional Ores S.A. (NAMISA), the Casa de Pedra mine and the Tecar port, which is combined with the Sepetiba Tecon port, for an integrated activity. In addition, energy self-sufficiency is ensured through investments in 3 power plants and by the direct and indirect equity investment of 35% in the MRS Logistica capital, a JV with other local iron and steel companies: Gerdau S.A., Usiminas, and Vale S.A. This JV manages a long-term railway concession (valid until 2026), which connects the CSN steelworks to the iron mine of Casa de Pedra and to the private port terminal, enabling competitive transport costs and greater operating efficiency. Secondarily, it operates in the production of cement and in the logistics and packaging sectors.
Brazil is one of the top 5 mining players globally. The country has the second-largest iron reserves in the world, the fourth of bauxite, the seventh of gold, and the subsoil contains, in abundance, nickel, tin, copper, manganese, and niobium, among other minerals. The overall turnover of the sector in 2021 brushed 45 billion dollars, approximately 3% of GDP. Compared with 2020, growth of almost 50% was encouraged by the price dynamics that were maintained for a good part of the year for almost all types of metals. Today, there are still approximately active 3,000 mines in the country. Iron ore counts for two thirds of the turnover in the sector with a production of approximately 400 million tonnes per annum.