Japanese and Korean consortium acquires stake in Brazil’s NAMISA iron ore
Japanese trading company ITOCHU announced it has reached a landmark transaction with five Japanese steel producers and Korean steelmaker POSCO to acquire a 40% stake share in Brazilian iron ore miner Nacional Minerios S.A. (NAMISA) for US$3.1 billion.The transaction will be executed by a consortium of JFE Steel, Nippon Steel, Sumitomo Metal Industries, Kobe Steel and Nisshin Steel, along with Pasco and ITOCHU. Within the consortium, ITOCHU is expected to invest US$1.25 billion, an amount equal to 40% of the total investment in the subsidiary of Companhia Siderurgica Nacional (CSN), Brazil’s second largest steel-maker.Located in Minas Gerais, NAMISA is scheduled to sell 18mtpa of iron ore in 2009 and plans to expand to 38mtpa by 2013. CSN will remain the iron ore miner’s majority shareholder.In addition to acquiring the NAMISA stake, the Japanese steel producers and POSCO are expected to enter into long-term iron ore purchase agreements with the Brazilian miner beginning next year. Each steel producer will purchase up to 14mtpa after NAMISA’s expansion is completed in 2013. ITOCHU will support the long-term stable supply of the volume to the steel makers.ITOCHU called the transaction "the first example of an investment in the iron ore business by a consortium consisting of both Japanese and Korean companies." The consortium is seeking support from Japanese governmental organizations including the Ministry of Economy, Trade and Industry, Japan Bank for International Cooperation and Nippon Export and Investment Insurance.The trader said the selection of the consortium after an international bidding process was the result of ITOCHU’s "substantial experience in the operation of iron ore businesses as well as trading of iron ore in Australia and Brazil, and the Japanese and Korean steel producers’ outstanding reputation as stable iron ore producers."This year Japanese steelmakers have accepted a 100% increase in iron ore prices. The country is complete dependent on foreign iron ore imports totaling about 130 million tons a year of which 20% comes from Brazil.