CSN mining unit in talks for $200 million iron ore prepay deal

Brazilian miner CSN Mineracao SA is sounding out traders for a roughly $200 million prepayment against iron ore cargoes, according to people familiar with the matter.

CSN didn’t immediately respond to a request for comment.

The company is exploring the potential deal with iron ore trading at about $103 a metric ton in Singapore, up 5% since the war in Iran began in late February.

The move also comes as competition among trading houses for long-term metal supplies intensifies, driven by renewed interest from traditional energy players including Gunvor Group and Mercuria Energy Trading. Vitol SA signed a 6 million-ton deal last year with CSN that included a $240 million prepayment.

CSN is part of Brazilian tycoon Benjamin Steinbruch’s beleaguered steel, energy and raw materials conglomerate, which is under pressure from high financing and capital costs. The mining unit is one of CSN’s core businesses, producing 45.5 million tons of high-quality iron ore last year, and is pursuing an ambitious expansion program.

(By Archie Hunter, Katharine Gemmell and Mariana Durao)