Companhia Siderúrgica Nacional operates as a fully integrated steel producer in Brazil and Latin America.
The company operates throughout the entire steel production chain, from the mining of iron ore to the production and sale of a diversified range of high value-added steel products.
Segments
The company divides its business into five segments: Steel, Mining, Cement, Logistics, and Energy.
Steel
The company’s Steel segment comprises a portfolio of diverse products and provides the company...
Companhia Siderúrgica Nacional operates as a fully integrated steel producer in Brazil and Latin America.
The company operates throughout the entire steel production chain, from the mining of iron ore to the production and sale of a diversified range of high value-added steel products.
Segments
The company divides its business into five segments: Steel, Mining, Cement, Logistics, and Energy.
Steel
The company’s Steel segment comprises a portfolio of diverse products and provides the company an international footprint by means of the company’s international subsidiaries and the company’s exports from Brazil. In the company’s flat steel segment, the company is an almost fully integrated steelmaker. The company’s main industrial facility, Presidente Vargas Steelworks, produces a broad line of steel products, including slabs, hot- and cold-rolled, galvanized and tin mill products for the distribution, packaging, automotive, home appliance and construction industries.
The company’s production process is based on the integrated steelworks concept. The company’s annual crude steel capacity and rolled product capacity at Presidente Vargas Steelworks is, in each case, 5.4 million tons.
The company obtains all of its iron ore (except for pellets), limestone and dolomite requirements, and a portion of the company’s tin requirements, from the company’s own mines. Using imported coal, the company produces approximately 27.3% of the company’s coke requirements at current production levels in the company’s own coke batteries at Volta Redonda. Imported coal is also pulverized and used directly in the pig iron production process. Zinc, manganese ore, aluminum and a portion of the company’s tin requirements are purchased in local markets. The company’s steel production and distribution processes also require water, industrial gases, energy, rail and road transportation and port facilities.
In addition, the company has an annual production capacity of approximately 330,000 tons of galvanized steel products, operated through the company’s subsidiary Lusosider in Portugal, and an annual production capacity of approximately 1.1 million tons of steel products operated through SWT in Germany.
The company owns and operates a plant in Volta Redonda for production of long steel products. The plant consists of an electric arc steelmaking furnace, continuous casting for billets and a hot rolling mill for round section long products – wire rod and rebar.
Mining Activities
The company owns a number of high quality iron ore mines, strategically located within Brazil’s ‘Iron Ore Quadrangle’ (Quadrilátero Ferrífero) in the state of Minas Gerais, including the Casa de Pedra and Engenho mines, located in the city of Congonhas, pertaining to the company’s subsidiary CSN Mineração, and the Fernandinho mines, located in the city of Itabirito, and the Cayman and Pedras Pretas mining rights, located in the city of Rio Acima and the city of Congonhas, respectively, pertaining to the company’s wholly owned subsidiary Minerios Nacional S.A., or Minerios Nacional.
The company’s mining assets also include the solid bulks cargo terminal TECAR, in the state of Rio de Janeiro, which pertains to CSN Mineração, and Estanho de RondÔnia S.A., or ERSA, located in the city of Ariquemes, in the state of RondÔnia, which mines and casts tin.
The company sold 39.2 million tons of iron ore to third parties in 2023.
Cement
The company entered the cement market in 2009 in order to take advantage of the synergy potential with the company’s steelmaking business. The company’s cement operations use as inputs slag generated by the company’s blast furnaces at Volta Redonda and limestone from the company’s limestone reserves in its Bocaina mines, which is used to produce clinker. Slag and clinker are the main inputs in cement production.
In 2015, the company inaugurated two grinding mills and, in 2016, the company concluded the construction of a new kiln line with a capacity of 6,500 tons per day, reaching an aggregate capacity of 4.7 million tons per year of cement production including the company’s Volta Redonda and Arcos plants.
In August 2021, the company’s cement subsidiary, CSN Cimentos, acquired Elizabeth Cimentos S.A. and Elizabeth Mineração Ltda., which operate in the Northeast region of Brazil. This acquisition increased the company’s annual cement production capacity by 1.3 million tons, from 4.7 million tons to 6.0 million tons.
In September 2022, the company’s cement subsidiary, CSN Cimentos, acquired LafargeHolcim (Brasil) S.A., and began operating in the concreate and aggregates markets in the Southeast region of Brazil. This acquisition added 11 million tons of cement per year to the company’s production capacity, bringing the company’s total production capacity to 17.0 million tons of cement per year, by means of plants strategically located in the Southeast, Northeast and Midwest regions of Brazil, as well as substantial high-quality limestone reserves. Following this acquisition, CSN Cimentos is the second largest cement producer in Brazil.
The company plans to further increase its market share in the cement segment in Brazil in order to diversify the company’s product mix and markets, which will allow the company to reduce its risk exposure.
Energy
In 2023, the company’s Presidente Vargas Steelworks consumed approximately 2.69 million MWh of electrical energy.
Cement production also requires significant amounts of electrical energy and, as a result of the expansion of the company’s cement operations over the last few years, the energy needs of the company’s cement segment represent a larger share of the company’s energy demand. The company’s acquiree, LafargeHolcim (Brasil) S.A., provides 3.4 MW of installed capacity annually from a hydroelectric power plant.
Mining operations require electrical energy principally for crushing and excavation. In 2023, the company’s mining operations at Casa de Pedra consumed 318,413 MWh of electrical energy.
The company’s main source of electrical energy in the steel business is the company’s thermoelectric co-generation power plant at the Presidente Vargas Steelworks, which is fueled by gas from the steel production process, with 267 MW of installed capacity. In addition, as of the date of this annual report, the company holds a 29.50% equity interest in the Itá hydroelectric facility in the state of Santa Catarina, through a 48.75% equity interest in ITASA and a 17.92% equity interest in the Igarapava hydroelectric facility. Through these equity interests, the company has secured an average of 185 MWavg in annual power supply for the company’s operations under power purchase agreements at a fixed price per megawatt average, or MWavg, per hour, adjusted annually for inflation according to ITASA’s board decision and 22.9 MWavg at a cost price of the annual generation of Igarapava’s hydroelectric power plant.
Since 2022, the company operates SHG Santa Ana, SHG Sacre II and HPP Quebra Queixo (Santa Ana Energetica S.A., Brasil Central Energia LTDA., and CEC - Companhia Energetica Chapecó, respectively), which hold concessions for hydroelectric power plants, and CEEE-G, which holds concessions for hydroelectric power plants and greenfield wind power plant projects. The company is self-sufficient in energy production and the company sells the excess energy the company generates in the market on a spot basis.
Logistics
The company’s vertical integration strategy and the synergies among the company’s business units are strongly dependent on the logistics needed to guarantee the transportation of inputs at low cost. A number of railways and port terminals comprise the logistics system that integrates the company’s mining, steelmaking and cement units.
The company operates a port terminal for containers, TECON at Itaguaí Port, in the state of Rio de Janeiro, and CSN Mineração operates TECAR.
The company also has the following participation in three railways: (i) the company shares control in MRS, which operates in the Southeast region of the federal railway system, along the Rio de Janeiro – São Paulo – Belo Horizonte axis; (ii) the company has an interest in joint venture TLSA, which has a concession to construct and operate the Northeastern Railway System II; and (iii) the company controls Ferrovia Transnordestina Logística S.A., or FTL, which operates the Northeastern Railway System I.
Strategies
Steel
The strategy for the company’s steel business comprises:
Focus on the domestic market, by increasing market share in the flat steel segment and long steel market;
Emphasis on high-margin coated steel products, such as galvanized, Galvalume, pre-painted and tin plate;
Investments in technology startups and other disruptive companies through the company’s subsidiary CSN Inova Ventures, in order to foster innovation and efficiency;
Geographical diversification through the company’s flat and long steel facilities abroad and the company’s focus on diversifying the company’s exports through, among others, coated steels;
Constant pursuit of operational excellence by developing and implementing cost reduction projects, including energy efficiency, and process review programs, including internal logistics optimization, project development and implementation discipline;
Exploring marketing and commercial synergies through the company’s flat steel distribution network and product portfolio to accelerate the company’s entrance into the domestic long steel market;
Increased customized services and distribution abilities through the company’s expanding distribution network; and
Investments to decarbonize the company’s operations through the implementation of projects that aim to improve the company’s operational efficiency and to develop new technologies.
Mining
In order to strengthen the company’s position in the iron ore market, the company plans to invest in its mining assets, including through CSN Mineração, to generate low operational costs and long-term growth opportunities.
In the short-term, the company’s focus is to adapt its products to market demands with optimal margins without affecting the balance of supply and demand in the transoceanic market. To sustain this growth, the company plans to increase TECAR’s capacity from 45 million tons per year in 2023 to 60 million tons per year in 2028.
To maximize the profitability of the company’s product portfolio, the company is focused on increasing its output of high-quality pellet feed with Itabirite deposits and investing with strategic partners and customers in providing pellet feed to pellet producers.
Cement
The company has invested heavily in its cement business and completed two important acquisitions in the last two years: Elizabeth Cimentos S.A., together with Elizabeth Mineração Ltda., in 2021 and LafargeHolcim (Brasil) S.A. in 2022. These acquisitions allowed the company to become the second largest player in the Brazilian cement market with an installed capacity of 17.0 million tons, seven integrated plants, six grinding and mixing plants and 21 distribution centers throughout Brazil, in each case as of December 31, 2023.
The company intends to further consolidate the Brazilian cement market. The company’s cement business strategy looks to increased production and competitiveness, portfolio diversification and capillarity expansion by means of greenfield and brownfield projects, as well as possible acquisition opportunities. The company is also working to reduce the greenhouse gas emissions of the company’s cement operations, mainly through the implementation of projects to improve the company’s operational efficiency, the use of alternative fuels and biomass, and the development and use of new disruptive technologies related to carbon capture and use.
The focus of the company’s cement sales strategy is on the retail segment, which operates with a low level of inventory and for which the company’s distribution centers provide a competitive advantage.
Energy
The company intends to continue to take advantage of certain acquisition opportunities in the company’s energy segment to increase its clean energy generation volume to support the operations and expansion of the company’s other segments, the growth of the energy segment and to replace concessions that will expire in the near future.
The operations in the company’s energy segment provide the company with autonomy in meeting its energy needs. Additionally, the company sells its excess energy to the market at prevailing spot prices.
Logistics
In addition to the company’s bulk terminal TECAR, the company’s TECON container terminal has a capacity of 660,000 twenty-foot equivalent units, or TEUs, per year.
In terms of railways, the company is developing the TLSA project, which focuses on iron ore, agricultural commodities, gypsum and fuel. The company also plans to invest in increased efficiency and capacity in the South of Brazil through the company’s participation in MRS.
Investments
The company continues to evaluate business opportunities in order to improve the company’s liquidity position in the short- to medium-term, including in the form of streaming transactions related to the company’s iron ore business and the sale of the company’s investment in Usinas Siderúrgicas de Minas Gerais S.A., or Usiminas.
Acquisition Activity
Panatlântica S.A.
In October 2023, the company acquired an 18.6% equity interest in Panatlântica S.A. As a result of this transaction, as of December 31, 2023, the company held a total equity interest of 29.9%. Panatlântica S.A. is headquartered in Gravataí, state of Rio Grande do Sul, and is active in the industrialization, trade, import, export and processing of steel and metals, both ferrous and non-ferrous, coated and uncoated. This investment is part of the company’s strategy to increase the competitiveness of the company’s steel segment by strengthening the company’s distribution channels and the services the company provides to its customers.
Joint Ventures, Strategic Alliances and Consortia
The company operates parts of its business through joint ventures, strategic alliances and consortia with other companies. The company has, among others: (i) a strategic alliance with an Asian consortium at the company’s controlled investee CSN Mineração to mine iron ore; (ii) a concession jointly held with other Brazilian steel and mining companies at MRS Logística S.A., or MRS, to explore railway transportation in the Southeastern region of Brazil; (iii) a concession jointly held with certain Brazilian governmental entities at Transnordestina Logística S.A., or TLSA, to explore railway transportation in the Northeastern region of Brazil; (iv) a joint venture with Engie Brasil Energia S.A., or Engie Brasil, and Companhia de Cimento Itambe, or Itambe, at Itá Energetica S.A., or ITASA, to produce electrical energy; (v) an energy consortium with Aliança, L.D.R.S.P.E. Geracão de Energia e Participações Ltda. and AngloGold; (vi) a consortium with CSN Cimentos Brasil S.A. for self-production of electrical energy, called Consórcio Itaúba; and (vii) a consortium with Elizabeth Cimentos S.A., CSN Mineração and Minerios Nacional S.A. for operation and maintenance of the Passo Real Hydroelectric Plant and self-production of electrical energy.
Operating Segments
Steel segment
The company produces carbon steel, which is the world’s most widely produced type of steel, representing the vast bulk of global consumption. From carbon steel, the company sells a variety of products, both domestically and abroad, to manufacturers in several industries.
Flat Steel
The company’s Presidente Vargas Steelworks produces flat steel products, which comprise slabs, hot-rolled, cold-rolled, galvanized and tin mill products.
Slabs
Slabs are semi-finished products used for processing hot-rolled, cold-rolled or coated coils and sheet products. The company is able to produce continuously cast slabs with a standard thickness of 250 millimeters, widths ranging from 830 to 1,600 millimeters and lengths ranging from 5,250 to 10,500 millimeters. The company produces high, medium and low carbon slabs, as well as micro-alloyed, ultra-low-carbon and interstitial free slabs. The slabs are then slit and finished, generating blooms which are delivered to the long products plant.
Hot-Rolled Products
Hot-rolled products include heavy and light-gauge hot-rolled coils and sheets. A heavy gauge hot-rolled product, as defined by Brazilian standards, is a flat-rolled steel coil or sheet with a minimum thickness of 5.01 millimeters. The company is able to provide coils of heavy gauge hot-rolled sheet with a maximum thickness of 12.70 millimeters used to manufacture automobile parts, pipes, structural beams and other construction products. The company produces light gauge hot-rolled coils and sheets with a minimum thickness of 1.20 millimeters, which are used for welded pipe and tubing, automobile parts, gas containers, compressor bodies and light cold-formed shapes, channels and profiles for the construction industry.
Cold-Rolled Products
Cold-rolled products include cold-rolled coils and sheets. A cold-rolled product, as defined by Brazilian standards, is a flat cold-rolled steel coil or sheet with thickness ranging from 0.30 millimeters to 3.00 millimeters. Cold-rolled products have more uniform thickness and better surface quality when compared to hot-rolled products and their main applications are automotive parts, home appliances and construction. The company supplies cold-rolled coils with thickness ranging from 0.30 millimeters to 2.99 millimeters.
Galvanized Products
Galvanized products comprise flat-rolled steel coated on one or both sides with zinc or a zinc-based alloy applied by either a hot-dip or an electrolytic process. The company uses the hot-dip process, which is approximately 20% less expensive than the electrolytic process. Galvanizing is one of the most effective and low-cost processes used to protect steel against corrosion caused by exposure to water and the atmosphere. Galvanized products are highly versatile and can be used to manufacture a broad range of products, such as: automobiles, trucks and bus bodies; manufactured products for the construction industry, such as panels for roofing and siding, dry wall and roofing support frames, doors, windows, fences and light structural components; air ducts and parts for hot air, ventilation and cooling systems; culverts, garbage containers and other receptacles; storage tanks, grain bins and agricultural equipment; panels and sign panels; and pre-painted parts.
Galvanized sheets, both painted and bare, are also frequently used for gutters and downspouts, outdoor and indoor cabinets and home appliances, among others. The company produces galvanized sheets and coils in continuous hot-dip processing lines, with thickness ranging from 0.30 millimeters to 3.00 millimeters. The continuous process allows for products with highly adherent and uniform zinc coatings capable of being processed in nearly all kinds of bending and forming machinery.
The company produces Galvanew in addition to standard galvanized products. Galvanew is produced by an additional annealing cycle just after the zinc hot-dip coating process. This annealing process causes iron to diffuse from the base steel into the zinc coating. The resulting iron-zinc alloy coating allows better welding and paint performance. The combination of these qualities makes the company’s Galvanew product particularly well suited for manufacturing automobile and home appliance parts, including high gloss exposed parts.
At CSN Paraná, one of the company’s branches, the company produces Galvalume, a continuous Al-Zn coated material. Although the production process is similar to hot-dip galvanized coating, Galvalume has at least twice the corrosion resistance of standard galvanized steel. Galvalume is primarily used in outdoor construction applications that may be exposed to severe acid corrosion, like marine uses.
Through CSN Paraná, the company also produces pre-painted flat steel, which is manufactured in a continuous painting line. In this production line, a layer of resin-based paint in a choice of colors is deposited over either cold-rolled or galvanized base materials. Pre-painted material is a higher value-added product used primarily in the construction and home appliance markets.
Tin Mill Products
Tin mill products consist of flat-rolled low-carbon steel coils or sheets with, as defined by Brazilian standards, a maximum thickness of 0.45 millimeters, coated or uncoated. The company applies coatings of tin or chromium by electrolytic process. Coating costs place tin mill products among the company’s highest priced products. The added value from the coating process permits the company to price the company’s tin mill products at a higher margin. There are four types of tin mill products, all produced by the company in coil and sheet forms:
Tin plate: coated on one or both sides with a thin metallic tin layer plus a chromium oxide layer, covered with a protective oil film;
Tin free steel: coated on both sides with a very thin metallic chromium layer plus a chromium oxide layer, covered with a protective oil film;
Low tin coated steel: coated on both sides with a thin metallic tin layer plus a thicker chromium oxide layer, covered with a protective oil film; and
Black plate: uncoated product used as the starting material for the coated tin mill products.
Tin mill products are primarily used to make cans and other containers. With six electrolytic coating lines, the company is one of the largest producers of tin mill products in the world and the sole producer of coated tin mill products in Brazil.
Suppliers
Aluminum, Zinc and Tin
The company purchases part of its tin from the company’s subsidiary Estanho de Rondônia S.A. (ERSA).
Natural Gas
Naturgy (formerly Companhia Estadual de Gás do Rio de Janeiro S.A.) is the company’s primary natural gas supplier.
Diesel Oil
The company maintains agreements with Vibra Energia S.A., or Vibra, to receive diesel oil in order to supply the company’s equipment in its mining plants in the state of Minas Gerais, which provide the iron ore, dolomite and limestone used in the company’s steel plant in Volta Redonda.
Suppliers
The company’s main raw materials suppliers are Ternium; Anglo American, Kru Overseas, Alpha Metallurgical and Warrior Met Coal; CI Milpa S.A. and Noble Resources; IBM Ind. Brasileira and ZincoSul; ZincoLigas and IBM Ind Brasileira; ERSA; Sotreq, MinasMáquinas, Komatsu, Inova, WLM, Metso and Centro Oeste Equip.; RHI Magnesita, SR do Brasil Cia Ltda., Vesuvius, Indústrias Brasileiras de Artigos Refratários – IBAR, Togni S/A, CNBM and Tecnofire; Iconic, Quaker, Vibra and Cosan; Vale, Javelin Global, Vallourec and Samarco; and Vibra Energia and Ipiranga.
Downstream Facilities
CSN Paraná
The company’s CSN Paraná branch produces and supplies plain regular galvanized products, Galvalume products and pre-painted steel products for the automotive, construction and home appliance industries. The plant has an annual capacity of 295,000 tons of galvanized products and Galvalume products, 131,000 tons of pre-painted products, which can use cold-rolled or galvanized steel as substrate, service capacity of 150,000 tons of sheets and narrow strips, and 384,000 tons of pickled hot-rolled coils in excess of the coils required for the coating process.
CSN Porto Real
The company’s CSN Porto Real branch produces and supplies plain regular galvanized, Galvanew and tailored blanks mainly for the automotive industry. The plant has an annual capacity of 350,000 tons of galvanized products, including Galvanew products, and 354,000 tons of tailored blanks, sheets and narrow strips, which can use cold-rolled or galvanized steel as a substrate.
Companhia Metalúrgica Prada
Established in 1936, Companhia Metalúrgica Prada is the largest Brazilian steel can manufacturer and has an annual production capacity of over one billion cans in its five industrial facilities located in the states of São Paulo, Minas Gerais, Rio de Janeiro and Rio Grande do Sul and in the city of Brasília. The company is the only Brazilian producer of tin plate, which is Companhia Metalúrgica Prada’s main raw material, making it one of the company’s most important products. Companhia Metalúrgica Prada has important customers in the food and chemical industries, including packages of vegetables, fish, dairy products, meat, aerosols, infant nutrition and other business activities.
Prada Distribuição, the distribution arm of Companhia Metalúrgica Prada, is one of the leaders in the Brazilian distribution market for steel products with 600,000 tons per year of installed processing capacity. Prada Distribuição has two steel service centers and three distribution centers strategically located in the Southeast region of Brazil. The service centers are located in the city of Mogi das Cruzes, in the state of São Paulo, and in the city of Valença, in the state of Rio de Janeiro. Its product mix also includes sheets, slit coils, sections, tubes and roofing in standard or customized format, according to customers’ specifications. Prada Distribuição processes the entire range of products produced by the company and services 4,000 customers annually from the civil construction, automotive and home appliances sectors, among others.
In 2021, the company acquired Metalgráfica Iguaçu S.A., which produces steel cans for the national and international market of metal food packaging. Metalgráfica Iguaçu S.A.’s operations also include the manufacture, commercialization, export and import of containers and packaging in general (metallic or not), metal sheets, raw materials and inputs for steel or plastic products, equipment and electronic components in general. This acquisition was a strategic step to expand the company’s production capacity in the packaging division.
Lusosider Aços Planos, S.A.
Lusosider is a flat steel processing facility located in Seixal, near Lisbon, Portugal. Lusosider has the capacity to produce approximately 105,000 tons of hot-rolled pickled coils, 36,000 tons of cold-rolled steel products and 276,000 tons of galvanized steel products per year. Its main customers include service centers and tube making industries.
CSN Distribuição
The company has one service center, located in the city of Camaçari, in the state of Bahia, to support sales in the Northeastern and Northern regions of Brazil. The company also has a distribution center in the city of Canoas, in the state of Rio Grande do Sul, to support sales in the Southern region of Brazil.
CSN Cut and Bend
The company has one service center, located in the city of Vargem Grande Paulista, in the state of São Paulo, to support sales in the Southeast region of Brazil.
SWT Long Steel Mill
In February 2012, the company acquired SWT in Germany, which marked the company’s entry into the long steel market. SWT specializes in the production of profiles, including IPE (European I Beams) and HE (European Wide Flange Beams) sections, channels and UPE (Channels with Parallel Flanges) sections and steel sleepers. In total, SWT produces more than 200 types of sections according to different German and international standards.
SWT possesses a 28 km internal railway system, as well as the logistics infrastructure to ensure supply of scrap and delivery of finished products. The main markets served by SWT include non-residential construction, equipment industries and engineering and transport, in Germany and in neighboring countries, including Poland and the Czech Republic.
Suppliers
The company acquires the inputs necessary for the production of its products globally. The company’s main raw materials suppliers are Scholz, TSR, RWE Supply & Trading GmbH, GETEC Energie Gas GmbH, Refractories Site Service GmbH, Graftec, W.A.S., SHOWA DENKO, Siemens, Schneider, Voith, Irle, and Walzengießerei Coswig.
Mining segment
The company’s mining activities are among the largest in Brazil and are mainly driven by the exploration of the company’s iron ore reserves. The company sells its iron ore products mainly in Asia, Europe and Brazil with sales and marketing from Brazil and Austria.
Iron Ore Mining Properties
The company’s iron ore business is conducted by the company’s subsidiary CSN Mineração in the state of Minas Gerais, within the area called the Iron Quadrangle. Casa de Pedra mine, Engenho mine and Fernandinho mine are the company’s open pit mines. Casa de Pedra mine and Engenho mine belong to the same mining complex and run their own transportation and shipping capabilities. The mining complex comprises the Casa de Pedra Central Plant and the Pires Benefitiation Plant. Fernandinho mine, which is deactivated, is located on the North side and, when it was active until 2015, it also ran its own transportation and shipping capabilities.
To complement its iron ore mining properties, CSN Mineração runs the Itaguaí Port, located in the municipality of Itaguaí, state of Rio de Janeiro, and the Presidente Vargas Steel Plant, in the municipality of Volta Redonda, also in the state of Rio de Janeiro.
The company’s iron ore properties comprise Casa de Pedra and Engenho (both material properties) and Fernandinho (non-material property), as further described below:
Casa de Pedra Mine – Congonhas, MG
Casa de Pedra mine is the company’s main iron ore mine. It is located in the municipality of Congonhas, 80 km to the South of Belo Horizonte, the capital of the state of Minas Gerais. Its mining concession has no expiration date and covers 2,516 hectares. Casa de Pedra is in full production stage.
Casa de Pedra mine has all the necessary permits for current operations, and the authorization process related to its planned production expansion is running according to schedule. Related facilities, such as waste piles and tailings dams, also comply with applicable legislation.
Casa de Pedra mine is an open pit operation with high grade hematite ore type (iron grade of approximately 64%) mixed with a minor amount of Itabirite ore type (iron grade of approximately 30-60%).
The Central Plant is fed with natural high grade run of mine, and the beneficiation process comprises crushing, screening, and flotation. The Central Plant generates lump ore, sinter feed and pellet feed. The Pires beneficiation plant is fed with low to medium grade in a dry beneficiation process.
All products from Casa de Pedra are transported by MRS’s railroad, which transports iron ore to the Itaguaí maritime terminal in the state of Rio de Janeiro.
Production Process
Casa de Pedra Plant
Casa de Pedra facilities are located in the city of Congonhas, in the state of Minas Gerais. Casa de Pedra mine is located 350 km from the Presidente Vargas Steelworks and supplies iron ore products to the company’s steel mill, as well as for export through the Itaguaí Port. Casa de Pedra’s equipment fleet and treatment facilities have an installed annual run of mine capacity of approximately 120 million tons and 40 million tons, respectively.
Engenho Mine – Congonhas, MG
Engenho mine covers 344 hectares and has been integrated in the Casa de Pedra mining complex since 2012. Engenho mine production is constantly mixed with Casa de Pedra mine production, following the same process route.
Fernandinho Mine – Itabirito, MG
Fernandinho mine covers 147 hectares and has been integrated in the Casa de Pedra mining complex since 2012. Fernandinho mine’s operations were deactivated in 2015 as part of an internal strategic decision. In the future, additional geological, drilling and resource studies and estimations will be performed in order to update mineral resources conversion to mineral reserves.
In addition to the mining properties detailed above, CSN Mineração conducts initial exploration activities in the surrounding areas of the company’s mining operations.
Cement segment
The company’s Cement segment comprises seven integrated cement plants, six mills and 21 distribution centers throughout the Southeast, Northeast and Midwest of Brazil, in the states of Rio de Janeiro, Minas Gerais, São Paulo, Espírito Santo, Paraíba, Bahia and Goiás.
Production
The company’s cement production begins with the influx of raw materials comprising clinker, limestone, gypsum and sometimes slag in a cement mill. The cement grinding process in Volta Redonda, Arcos and Barroso is by vertical mills. The mills have a hydraulic roller system, which uses pressure to grind the layer of material on the turntable. In other plants, the cement grinding process is by ball mills. The materials are ground to a fine powder, in rotating, cylindrical ball mills containing a charge of steel grinding balls.
The company produces clinker in each of its integrated cement plants. The main raw materials for the production of clinker are limestone, clay and other correctives, such asiron ore, bauxite, etc. These materials undergo grinding and are then dosed, forming the so-called ‘raw meal.’ After the homogenization of this raw meal, the mixture is taken to a kiln where it is heated to high temperatures. As a result of this procedure, the company obtains clinker, which is the base material for the company’s cement. The company adds gypsum and other ingredients to the clinker mix that are dosed and fed into the cement mills until the company reaches a granulometry suitable for the type of cement products.
Slag is a by-product of iron and steel, produced in the blast furnace, stored in a warehouse and transported by road. The company uses natural gypsum, which is transported by truck and stored in a warehouse. Certain of the company’s plants have a slag supply contract with other steel plants.
Inside the company’s plants, the raw materials are carried out by conveyor belts, placing inputs in scales according to a predefined formula and delivering them to the mills. The grinding stations receive clinker transferred from the integrated plants by rail or road. The portfolio of cement products the company offers in bagged and bulk forms includes the following: (i) CP II (Composite Portland Cement), (ii) CPIII (Blast Furnace Portland Cement) and (iii) CP V ARI (High Initial Strength Portland Cement). The company produces these different types of cement with the addition of different elements in the composition, as well as filler (calcium carbonate), slag and pozzolan.
The types of cement the company produces are: CP III 32, CP III-40 RS, CP II-E-32, CP II-E-40, CP II-F-40, CP II-F-40 Fibro, CP II-F 32, CP-II-F-32 SUPER, CP II-Z-32, CPV ARI, CPV ARI RS, CPV ARI PLUS, CP ARIF ESPECIAL, CP ARIF and ECOCEM 50, in each case in bagged and bulk forms.
Energy segment
The company’s Energy segment comprises its generation plants, which support reduction of the company’s production costs and exposure to fluctuations or availability of certain energy sources and generate revenue though the company’s commercialization of the energy surplus.
Thermoelectric Co-Generation Power Plant
The company has a 245 MW thermoelectric co-generation power plant at the Presidente Vargas Steelworks. Aside from operational improvements, the power plant supplies the company’s strip mills with electric energy, processed steam and forced air from the blast furnaces, benefiting the surrounding environment through the elimination of flares that burn steel-processing gases into the atmosphere. In addition, the company has a turbine generator, which adds 22 MW to the company’s installed capacity. This turbine is located near the company’s blast furnace no. 3 and uses the outlet gases from the iron making process to generate energy. The total annual capacity of the company’s thermoelectric co-generation power plant is 267 MW.
Itá Hydroelectric Facility
The company holds a 29.50% equity interest in the Itá hydroelectric facility, as the company and Engie Brasil each own 48.75% of ITASA, a special-purpose company formed to own and operate, under a 30-year concession granted in 2000, 60.5% of the Itá hydroelectric facility on the Uruguay River in Southern Brazil. Itambe owns the remaining 2.5% of ITASA. Engie Brasil directly owns the remaining 39.5% of the Itá hydroelectric facility, which has an installed capacity of 428 MW.
Igarapava Hydroelectric Facility
The company owns 17.92% of a consortium that built and has the right to operate, until September 2031, the Igarapava hydroelectric facility. Other consortium members are Aliança, L.D.R.S.P.E. Geracão de Energia e Participações Ltda. and AngloGold. The facility has an installed capacity of 38 MW.
Santa Ana Hydroelectric Facility
CSN Cimentos and the company’s energy subsidiary CSN Energia own 100% of Santa Ana Energetica S.A., which holds the concession for the hydroelectric power plant of Santa Ana that has an installed capacity of 6.3 MW.
Sacre II Hydroelectric Facility
CSN Cimentos and the company’s energy subsidiary CSN Energia own 100% of Topázio Energetica S.A., which holds, through its subsidiary Brasil Central Energia Ltda., the concession for the hydroelectric power plant of Sacre II that has an installed capacity of 30 MW.
Quebra-Queixo Hydroelectric Facility
CSN Mineração and the company’s energy subsidiary CSN Energia own 100% of CEC, which holds the concession for the hydroelectric power plant Quebra-Queixo that has an installed capacity of 120MW.
CEEE-G
CFB owns 98.98% of CEEE-G, which holds several concessions for hydroelectric power plants and greenfield wind power plant projects that represent, in the aggregate, an installed capacity of 1,134 MW.
Logistics segment
The company’s Logistics segment comprises railway and port facilities.
Railways
Southeastern Railway System
MRS has a concession to operate Brazil’s Southeastern railway system until 2056. As of December 31, 2023, the company held 33.70% (18.75% directly and 14.95% through CSN Mineração) of MRS’s total capital. The Brazilian Southeastern railway system, with 1,643 km of track, serves the São Paulo – Rio de Janeiro – Belo Horizonte industrial triangle in Southeast Brazil, and links the company’s mines located in the state of Minas Gerais to the ports located in the states of São Paulo and Rio de Janeiro and to the steel mills of CSN, Companhia Siderúrgica Paulista and Gerdau Açominas. In addition to serving other customers, the railway transports iron ore from the company’s mines at Casa de Pedra in the state of Minas Gerais and coke and coal from Itaguaí Port in the state of Rio de Janeiro to the Presidente Vargas Steelworks and transports the company’s exports to the ports of Itaguaí and Rio de Janeiro. The railway system connects the Presidente Vargas Steelworks to the container terminal at Itaguaí Port, which handles most of the company’s steel exports.
Northeastern Railway System
The company holds interest in companies that have concessions to operate the Northeastern railway system, which operates in the states of Maranhão, Piauí, Ceará and Pernambuco, and connects with the region’s leading ports, offering an important competitive advantage through opportunities for intermodal transportation solutions and made-to-measure logistics projects.
Northeastern Railway System I, which is in operation by the company’s subsidiary FTL, encompasses the RFFSA network, covering the stretches between the cities of São Luís – Altos, Altos – Fortaleza, Fortaleza – Souza, Souza – Recife/Jorge Lins, Recife/Jorge Lins – Salgueiro, Jorge Lins – Propriá, Paula Cavalcanti – Cabedelo and Itabaiana – Macau, with 4,238 km of railways, of which 1,191 km are operational, and the company is negotiating with the National Agency for Ground Transportation (Agência Nacional de Transportes Terrestres), or ANTT, to return the remainder. As of December 31, 2023, the company held 92.71% of the capital stock of FTL and its concession extends until 2027, renewable for an additional 30 years.
Northeastern Railway System II, which is under construction by the company’s jointly controlled investee TLSA, will encompass the new network, covering the stretches between the cities of Eliseu Martins – Trindade, Trindade – Salgueiro, Salgueiro – Missão Velha and Missão Velha – Porto de Pecem, with an expected extension of 1,206 km that will connect the interior of Northeast Brazil to Pecem and Suape Ports. As of December 31, 2023, the company held 48.03% of the capital stock of TLSA and its concession extends until the earlier of 2057 or the date when TLSA recovers its invested equity at an annual rate of return of 6.75%.
In December 2022, the company entered into an amendment to the concession agreement of TLSA, pursuant to which, among other things, there was a change to the railroads granted to TLSA and the company agreed to certain mandatory investments and to the conditions for the return of the Salgueiro – Porto de Suape’s grid, where the TLSA project has 1,206 km of railway network and a completion deadline of December 2029.
The concession contract for the Northeastern Railway System I remains valid in all its terms until 2027, with a request for extension of the contract under analysis by the federal government.
Port Facilities
Solid Bulks Terminal
The company operates an integrated and modern logistics structure. Part of this structure includes the operation of TECAR through a concession renewed in 2015 and expiring in 2047.
TECAR is connected to road and rail systems across Southeast Brazil and is one of the four port terminals that make up the Port of Itaguaí facilities. With a strategic location and a total area of 740,761 m², the terminal consists of a concrete molded berthing pier superposed on jacketed stilts connected to the mainland by an access bridge perpendicular to the berthing pier. Its backyard includes conveyor belts, an internal road system, bulk storage yards and a railway looping, as well as industrial and administrative facilities.
Container Terminal
The company indirectly owns almost the entirety of TECON, which has a concession to operate the container terminal at Itaguaí Port for a 25-year term expiring in 2026, which is renewable for an additional 25 years.
The Itaguaí Port is in Brazil’s Southeast region, with all major exporting and importing areas in the states of São Paulo, Minas Gerais and Rio de Janeiro within 500 km.
In 2023, the company continued to invest in upgrading its operational facilities and complying with regulatory requirements. In addition, in 2023, the company received nine new rubber-tyred gantries, from an investment in 2022, and purchased six new forklifts, which the company will begin operating, improving the company’s operational capacity. TECON will keep investing in the project expansion to increase its capacity by approximately 40%, which would make it one of the largest port terminals in Brazil, with a nominal capacity of 1,000,000 TEUs per year. This expansion project, which is under discussion with regulatory agencies, includes a quay extension of 273 meters, with a total resulting length of 1,083 meters, acquisition of two new gantry cranes (ship-to-shore) for larger container carriers, acquisition of additional yard civil works and equipment, and dredging of the access channel and maneuvering basin.
In 2023, TECON moved 58,000 containers, 1.1 million tons of steel products, 35,000 tons of general cargo and 660,000 tons of solid bulk, as compared to 62,000 containers, 1.3 million tons of steel products, 42,000 tons of general cargo and 918,000 tons of solid bulk in 2022. The decrease in container volume in 2023 is mainly due to the verticalization of port operations by container shipowners that concentrate their operations in proprietary terminals. To mitigate the effects of this decrease in container volume in 2022, TECON sought new markets and began operating wood shipments, as well as new steel cargo, and increasing the volume of other cargo also handled in 2021, including billets, wire rods, plates, tubes, transformers, locomotives and solid bulk, such as soda ash, gypsum and pellets.
Marketing, Organization and Strategy
Flat Steel
The company’s steel products are sold both domestically and abroad as a raw material for several manufacturing industries, including the automotive, home appliance, packaging, construction and steel processing industries.
The company’s sales approach involves establishing brand loyalty and achieving a reputation for quality products by developing relationships with the company’s customers, focusing on their specific needs and providing tailor-made solutions.
The company’s commercial area is responsible for sales of all its products. This area is divided into two major teams, one focused on sales in international markets and the other on sales in the domestic market. The domestic market sales team covers seven market divisions: packaging, distribution network, automotive industry (automakers and auto parts), home appliances, general industry, construction and pipes. The company also has a team responsible for selling all process residues, which include blast furnace slag, pitch and ammonia, which are widely used as inputs in chemical and cement industries.
The distribution network division is responsible for supplying large steel processors and distributors. In addition to independent distributors, the company counts with its own distributor, Prada Distribuição. The pipes division supplies oil and gas pipe manufacturers as well as industries that produce small diameter pipe and light profiles. The packaging division acts in an integrated way with suppliers, representatives of the canning industry and distributors to respond to customer needs for finished products. The company supplies the automotive division from a specialized mill, CSN Porto Real, and also by a portion of the galvanized material produced at Presidente Vargas Steelworks, thereby benefitting from a combined sales strategy.
The company has its own data systems to remain informed of worldwide and Brazilian market developments.
Sales by Geographic Region
In 2023, the company sold steel products to customers in Brazil and in 14 other countries.
The two main export markets for the company’s products are Europe and North America, representing approximately 75% and 24%, respectively, of the company’s export sales volume in 2023. The company sells its steel products to manufacturers in several industries.
Seasonality
Although steel demand is stronger in the second quarter of each year (year ended December 2023) and weaker in the last quarter, the company’s production is continuous throughout the year.
Long Steel – SWT
The company’s long steel products are sold both in Germany (approximately 30%) and other countries, mainly in Europe (approximately 60%), for use in industrial, infrastructure, civil construction and engineering industries.
The company’s sales approach is to establish brand loyalty and to maintain the company’s reputation of high-quality products and excellent delivery performance by developing long-term relationships with the company’s customers. SWT focuses on meeting specific customer needs, developing solutions for both low temperature and high temperature resistant applications, as well as optimized section shapes for special applications.
The company’s commercial area is responsible for sales of all of its products worldwide. This area is divided into the direct sales team which is organized in 13 agencies located in Germany and in the company’s core markets in Europe, the commercial back-office department (order management from entry via tracking to the final delivery and invoicing), logistics contracting (truck, rail, vessel, maritime, inventory worldwide) and a rail logistics department.
Long Steel – Volta Redonda
In 2013, the company started the production of long steel in Volta Redonda. This plant has production capacity of 500 kt/year when fully operational, providing the domestic market with products for civil and industrial construction.
Divided in wire rod, rebar CSN 50 and rebar CSN 25, the company developed its products using high technology and in accordance with the highest quality and sustainability standards.
The company’s commercial team has its own sales force dedicated to meet all the needs of the long steel market: small customers, as well as large wholesalers. The company counts with strategically located distribution centers to deliver the company’s products throughout Brazil. In order to provide a wide range of products for the civil construction segment, the company includes in its product portfolio, in addition to cement and structural section products derived from flat steel, products such as tiles and tubes, among others.
Iron Ore
Iron ore products are commercialized by the company’s teams located in Brazil, Switzerland and Hong Kong. These three marketing units allow the company to maintain close relations with the company’s customers worldwide, understand the environment where they operate, monitor their requirements and provide all necessary assistance promptly. Market intelligence analysis, planning and administration of sales and third-party iron ore purchases are handled from Brazil by the staff in the company’s Casa de Pedra mine and São Paulo headquarters, while the company’s Switzerland and Hong Kong offices handle the export sales.
The company supplies its iron ore to the steel industry, and the company’s main destinations are Brazil, Europe and Asia. Prevailing and expected levels of demand for steel products directly affect demand for iron ore. Demand for steel products is correlated to many factors, including GDP, global manufacturing production, urbanization, construction and infrastructure spending.
The company first entered the international iron ore market in February 2007, upon completion of the first phase of the expansion of the company’s coal seaport terminal in Itaguaí, in the state of Rio de Janeiro, which enabled the company to handle and export iron ore and to load from the company’s own facilities the first shipment of its iron ore products.
In 2023, the company’s iron ore sales reached 42.7 million tons, of which 39.2 million tons were sales to third parties and 3.5 million tons were sales to the company’s steel mills.
In 2023, 80.6% of the company’s iron ore export sales went to the Asian market, mainly China, and 7.9% were sold in the European market. Of the company’s total sales volume to third parties, 94.4% were sinter feed and 4.4% lump ore.
Through the company’s marketing offices, the company has long-term relationships with most players in the steel industry in China, Japan, Taiwan, South Korea, Europe and Brazil.
Cement
The company has a diverse customer base of approximately 25,000 customers, including construction material stores, home centers, concrete producers, construction companies, mortar industries and cement artifact producers.
The focus of the company’s cement sales strategy is on the retail and bulk segments, in which the company has a strong presence in sales points where the company reinforce the quality of the company’s product to final customers, and the company’s technical product portfolio that is well recognized by the market.
Energy
As part of the company’s strategy in the energy segment, in April 2023, the company entered into lease agreements with Itauba and Passo Real HPPs for a consortia formed by the company’s companies to assure a fixed income to CEEE-G, assuring self-production surcharges relief to the members of the consortia which represents energy cost reduction.
The energy sales strategy for CEEE-G involves a combination of a 15-year power purchase agreement, or PPA, and rolling PPAs with short duration (of one to three years) and spot sales in order to maximize revenue.
The Floriano Complex, which is a solar wind project with an installed capacity of 1.2 GW, continues its development phase aiming to increase the company’s energy capacity, which will support consumption increase and replace plants whose concession will expire in 2032.
Regulatory Matters
Environmental Regulation
The company is subject to regulation and supervision by the Brazilian Ministry of Environment (Ministerio do Meio Ambiente – MMA), the environmental national council (Conselho Nacional do Meio Ambiente), which is responsible for enacting technical regulations and environmental protection standards, and the Brazilian Institute of Environment and Renewable Natural Resources (Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renováveis – IBAMA), which is responsible for enforcing environmental laws at the federal level.
In the state of Minas Gerais, where the company’s main mining operations and certain of its cement operations are located, the company is subject to regulations and supervision by the Environmental Policy Council (Conselho Estadual de Política Ambiental – COPAM), the Regional Superintendent of Environment and Sustainable Development (Superintendência Regional de Meio Ambiente – SUPRAM), the Water Management Institute of Minas Gerais (Instituto Mineiro de Gestão das Águas – IGAM), the State Forestry Institute (Instituto Estadual de Florestas – IEF) and the State Environmental Foundation (Fundação Estadual do Meio Ambiente – FEAM), which are the competent bodies of the Secretary of State for the Environment and Sustainable Development of Minas Gerais (Secretaria de Estado de Meio Ambiente e Desenvolvimento Sustentável – SEMAD). The company is also subject to local regulators, including the municipal environmental secretariats of Congonhas and Belo Vale, Ouro Preto and Rio Acima for the company’s mining operations, and Arcos, Barroso, Montes Claros and Pedro Leopoldo, for the company’s cement operations.
In the second half of 2022, the company initiated cement operations in certain Brazilian states, and consequently, new regional environmental agencies started to regulate the company’s activities, such as: superintendence of environmental administration (Superintendência de Administração do Meio Ambiente) and the executive water management agency (Agência Executiva de Gestão das Águas do Estado da Paraíba) in the state of Paraíba; institute of the environment and water resources (Instituto do Meio Ambiente e Recursos Hídrico) in the state of Bahia; Secretary of State for environment and sustainable development (Secretaria de Estado de Meio Ambiente e Desenvolvimento Sustentável) in the state of Goiás; environmental company of the state of São Paulo (Companhia Ambiental do Estado de São Paulo); department of water and electric energy of the department of sanitation and water resources (Departamento de Águas e Energia Eletrica da Secretaria de Saneamento e Recursos Hídricos) in the state of São Paulo; institute of environment and water resources (Instituto de Meio Ambiente e Recursos Hídricos) and state water resources agency (Agência Estadual de Recursos Hídricos) in the state of Espírito Santo.
Mining Regulation
The company operates its iron ore mining activities at Casa de Pedra mine under a mining concession known as Manifesto de Mina under Brazilian regulations, which gives the company the right to extract the iron ore deposits existing within the company’s property limits. The company’s iron ore mining activities at Engenho and Fernandinho mines are based on a concession by the MME, which grants the company the right to exploit mineral resources from the mine for an indeterminate period of time lasting until the exhaustion of the mineral deposit. The company’s limestone and dolomite mining activities at Bocaina mine and the company’s tin mining activities at Ariquemes (ERSA mine) are based on concessions under similar conditions.
The Manifesto de Mina for Casa de Pedra mine and the Engenho mining concession are held by CSN Mineração, while the Fernandinho mining concession and the mining rights of Cayman and Pedras Pretas are held by Minerios Nacional.
The company’s mineral rights for Casa de Pedra mine include the mining concession, a beneficiation plant, roads, a loading yard and a railway branch, and are duly registered with the ANM. The company has also been granted by the ANM easements in 19 mine areas located in the surrounding region. These areas are needed to expand the company’s operations and as operating support areas. In addition, the company has obtained and are in compliance with all environmental licenses and authorizations for the company’s operations and projects at Casa de Pedra mine.
Protectionist Measures
In the United States, the company is subject to regulation and supervision by the U.S. Department of Commerce, or DOC, the ITC, the International Trade Administration, or ITA, and the Import Administration, or IA.
In the European Union, the company is subject to regulation and supervision by the European Commission.
In Canada, the company is subject to regulation and supervision by the Canadian International Trade Tribunal, the Canada Border Services Agency and the Anti-dumping and Countervailing Directorate.
In Brazil, the company is subject to regulation and supervision by the MDIC, the Secretary of Foreign Trade (Secretaria de Comercio Exterior), and the Department of Trade Defense (Departamento de Defesa Comercial).
History
Companhia Siderúrgica Nacional was founded in 1941. The company was incorporated in 1941 under the laws of the Federative Republic of Brazil.
