CSN firm on Corus bid, dismisses ore dispute

Companhia Siderurgica Nacional (CSN) today reaffirmed its commitment to acquire steel-maker Corus, while dismissing reports that suggested a legal dispute over iron ore supply with Companhia Vale do Rio Doce (CVRD) could threaten the bid.

"Should CSN acquire Corus, it will exercise its rights to supply iron ore from its Casa de Pedra mine to all its operations including those in Europe," a CSN spokesperson told PTI.

According to a report in Financial Times, the Brazilian steel giant's bid to buy Corus could be blown off-course by a dispute over CSN's rights to iron-ore supply that would be crucial to a merged business.

The report said CVRD plans to challenge CSN's ability to supply iron ore to Corus should its bid succeed.

CSN, however, dismissed the report as baseless and said: "There is no basis for the story. There is no change in our position or to our commitment to acquire Corus."

FT had reported that a major part of the rationale behind CSN's offer is that it would be able to supply cheap iron ore from its Casa de Pedra mine in Brazil to Corus' European plants.

The report, however, added that another bidder, Tata Steel, on its part has limited supplies of iron ore, and is unlikely to be allowed in the next few years to ship it overseas under Indian export regulations.

FT quoted Jose Martins, director for ferrous operations, CVRD as saying the mining group would question CSN's ability to ship iron ore under the terms of a contract signed between the companies in 2001.