COMPANHIA SIDERURGICA NACIONAL (BOVESPA: CSNA3; NYSE: SID) hereby informs its shareholders and market participants, complementing the relevant fact published on October 17th, 2008, that today it finalized negotiation, and signed the relevant agreements, for the establishment of a strategic partnership with a consortium comprised by ITOCHU Corporation, Nippon Steel Corporation, JFE Steel Corporation, POSCO, Sumitomo Metal Industries, Ltd., Kobe Steel, Ltd. and Nisshin Steel Co, Ltd., (the “Consortium”).
1. The transaction consists in the sale of 40% of the voting and total capital stock of Nacional Minérios S.A. (“NAMISA”), a subsidiary of CSN, for the aggregate amount of US$3,12 billion, payable in cash on the closing date. The closing date is expected to occur by the end of November, 2008. Out of the US$3,12 billion amount, the Consortium will pay approximately US$3 billion in connection with the acquisition of a primary issue of shares by NAMISA.
2. NAMISA will pay approximately US$3 billion to CSN, on the closing date, as pre-payment for a portion of the purchase price agreed between the parties in connection with future sales of crude iron ore (run of mine) and the rendering of port services from CSN to Namisa. The run of mine will be extracted by CSN from the Casa de Pedra Mine and will be sold to NAMISA, which shall, in addition to its own run of mine, beneficiate the product in NAMISA’s own industrial facilities. All agreements were negotiated on an arms-length basis.
3. CSN will maintain 60% of Namisa’s voting and total capital with a view to aligning the parties’ interest in this long term venture.
4. NAMISA’s operation is fully integrated and includes access to rail transportation in the form of long term contract with MRS Logística S.A. (“MRS”). As part of the transaction, CSN will contribute non-voting non-convertible A class preferred shares of MRS to NAMISA. These shares correspond to approximately 10% of MRS’s total capital.
5. NAMISA’s business plan provides for an aggressive production expansion of iron ore products and pellets. NAMISA will market mainly iron ore of its own production but will also acquire iron ore from third parties producers to complement its sales.
6. A portion of NAMISA’s production will be sold to the Consortium members. Such obligations are reflected in a long-term “offtake” agreement and were established on an arms-lengths basis.
7. NAMISA’s mid and long term business plans estimate that in 2009 the company will have sales of approximately 18 million tons of iron ore per year. It also provides for an expansion in production in order to allow NAMISA to commercialize an estimated amount in excess of 38 million tons of iron ore per year from 2013 onwards.
8. CSN would like to clarify that the transaction does not provide for the acquisition by the Consortium of a stake in the Casa de Pedra Mine.
Rio de Janeiro, October 21st, 2008
Otávio de Garcia Lazcano
Investor Relations Officer
