Nippon Export and Investment Insurance (NEXI) will underwrite loan insurance for a project that will upgrade iron ore plant facilities in Brazil.The project will be undertaken by CSN Mineracao, an iron ore production and sales company which is a subsidiary of Brazilian steel producer Companhia Siderurgica Nacional S.A. (CSN).

The insurance is provided for a US$350 million 12-year loan co-financed by BNP Paribas, Tokyo Branch; Citibank, N.A., Tokyo Branch; Credit Agricole Corporate and Investment Bank, Tokyo Branch; and Societe Generale, Tokyo Branch.

Itochu Corporation has a minority stake in CSN Mineracao, while both JFE Steel Corporation and Kobe Steel have had long-term offtake agreements to purchase iron ore produced by CSN Mineracao.

According to NEXI, given the pronounced oligopolistic structure of the seaborne iron ore market by major mining companies, it is important for Japan that its companies have the long-term right to purchase iron ore from independent companies, in addition to major mining companies, in line with the country's strategy for securing resources.

The project is expected to support a stable supply of iron ore to the Japanese steel market. A portion of the loan will be used to develop beneficiation plants in order to meet the demand of Japanese steel companies to maintain the current quality of iron ore with high iron content and low impurities.

Additionally, as CSN Mineracao will use the loan to replace the conventional tailings dam with a filter press (a facility to dewater tailings), the project is expected to contribute to enhancing the safe operations of the plants.