Brazil's CSN sees sale of Namisa unit by October

Brazilian steelmaker CSN expects to reach a deal to sell part or all of its sought-after Namisa iron ore mine by the end of September or early October, a company executive said on Tuesday.

CSN hired Goldman Sachs earlier this year to help it sell some or all of Namisa, seeking to tap into red-hot demand for iron ore and raise cash to pay down its debt.

Juarez Saliba, executive director of CSN's mining and logistics business, said the company recently finished analysing several non-binding offers and expects to receive a few final bids in the first half of September.

"That's the timeline. It's taking longer than we initially expected because we had so many participants in the second round of bidding," he said on a conference call with analysts.

"After that it's a matter of choosing one, two or maybe three of those bids to start final negotiations," he added. "Our expectation is that we'll be announcing the deal by the end of September or in early October."

Saliba did not say who was bidding for Namisa, nor did he specify a price range. But investment banking sources told Reuters in July that bids have poured in from as far away as Russia, India, China and Japan, and that the value of the deal could reach as much as $10bn.

CSN initially structured the deal to sell a 40-50% stake in Namisa, which is located in the mineral-rich state of Minas Gerais. But Saliba said the company remained open to selling all of Namisa if the price was right.

"We're willing to consider offers for more than 50% or even for all of the company," he said. "But our main focus is to sell up to 50% so that CSN can remain the controlling shareholder in Namisa."

CSN, short for Companhia Nacional Siderurgica, plans to invest $265m in Namisa over the next four years to increase capacity and turn it into a global player in the mining sector.

Saliba said the investments will lift annual output capacity at the mine to 9 million tons by the end of 2008 from about 7.5 million tons currently.

The company is also investing heavily to boost capacity at its flagship iron ore mine, Casa de Pedra, which currently produces 16 million tons a year.

Saliba said the first phase of the mine's expansion will be concluded in September, lifting annual capacity to 21 million tonnes. By the end of the first quarter of 2009, capacity should jump to 41 million tons a year.

"CSN is a firm believer in this business," he said. "We think the current cycle in mining still hasn't reached its peak."

by Todd Benson; editing by Dave Zimmerman.