Steel makers to bid for Brazilian iron-ore mine

A Namisa, Nacional Minérios S.A., da CSN, na mira de estrangeiros.

Five major steel manufacturers will team up to buy shares in a Brazilian mine operator to secure a stable supply of iron ore amid rising prices, sources said.

Nippon Steel Corp., JFE Steel Corp., Sumitomo Metal Industries Ltd., Kobe Steel Ltd. and Nisshin Steel Co., along with major trader Itochu Corp., are preparing to jointly bid hundreds of billions of yen for shares in Namisa from Brazilian steelmaker CSN.

The government is backing the effort, which will be formed outside traditional corporate groupings.

With expansion works, the annual production of Namisa's iron ore mine will grow to more than 20 million tons, covering about 15 percent of Japan's annual iron ore demand, industry insiders said.

To help capital raising, the government plans to grant low-interest loans through the Japan Bank for International Cooperation.

If the alliance succeeds, it will help secure a stable steel supply at a lower cost for domestic industries including automaking, electronics and shipbuilding, amid rising natural resource prices, sources said.

But even with the joint bid, it remains unclear whether the group can win, as major overseas steel makers, including world leader ArcelorMittal, also plan to enter the fray.