Iron ore row may hit CSNs Corus bidadmin
Even as the battle for Anglo-Dutch steel maker Corus reaches a crescendo, reservations are being expressed about the Brazilian Companhia Siderurgica Nacional’s (CSN) ability to supply iron-ore, a key component of the deal.
This is being viewed as a shot in the arm for Tata Steel, the other bidder in the ring for Corus.
Earlier on Thursday, Financial Times, a British newspaper reported that Brazilian mining group Companhia Vale do Rio Doce (CVRD) has challenged CSN’s ability to supply iron ore to Corus, which may potentially harm CSN’s bid for the Anglo-Dutch steelmaker.
Jose Martins, director for ferrous operations of CVRD, told the newspaper that the company would question CSN’s ability to ship iron ore under the terms of a 2001 contract signed between the firms.
“If CSN buys Corus, we will look closely at how the deal is done to see if our right (to the ore) remains in force,”Martins was quoted. CSN has, however, dismissed mining group CVRD’s claim.
In a statement to the press, CSN said, “There is no basis for this story. There is no change to our position or our commitment to acquire Corus. 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.”
Banking and financial experts in India viewed this development as an advantage for Tata Steel as the two companies head for a face-off next Tuesday.
“Tata Steel already has an upper hand as its bid has been approved by the EU. Although CSN has dismissed any doubts about its ability to supply iron ore, should its bid go through, CVRD’s challenge certainly does not help its cause,”an industry official had said.
Meanwhile, Corus shares fell 1.4 percent to 544.5 pence in early morning trades on the LSE.