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News Release

JFE Steel Corporation
Nippon Steel Corporation
Sumitomo Metal Industries, Ltd.
Kobe Steel Limited
Nisssin Steel Co., Ltd.

Japanese and Korean consortium announces basic agreement with CSN
to acquire stake in Brazilian iron ore mining business

JFE Steel Corporation, Nippon Steel Corporation, Sumitomo Metal Industries, Ltd., Kobe Steel Limited, and Nisssin Steel Co., Ltd. today announced it has reached a basic agreement with Brazilian fully-integrated steel producer Companhia Siderúrgica Nacional (“CSN”) to acquire 40% share in CSN's wholly-owned iron ore mining and sales subsidiary, Nacional Minérios S.A. (“NAMISA”). The transaction will be executed by an investor group consisting of ITOCHU Corporation, Korean steel producer POSCO, and five Japanese steel producers (JFE Steel Corporation, Nippon Steel Corporation, Sumitomo Metal Industries, Ltd., Kobe Steel, Ltd. and Nisshin Steel Co., Ltd.) (collectively, the “Consortium”). Though the definitive agreement is yet to be signed, the Consortium is expected to acquire a 40% stake in NAMISA for approximately US$ 3,120 million (Approx. JPY 312 billion) in total.

NAMISA, located in the state of Minas Gerais, Brazil, operates an iron ore project through self-owned mines and beneficiation plants. NAMISA is scheduled to sell 18 million tons per annum of iron ore in year 2009 and expand sales amount to 38 million tons per annum by 2013 through the course of its expansion plan. In addition, CSN is scheduled to transfer a 10% stake in MRS Logística S.A. (“MRS”), a railway transportation company connecting the mines and port, to NAMISA as part of the transaction. The transfer of MRS shares into NAMISA will further ensure NAMISA's access to transportation infrastructure for the long-term participation in the project.

The deal was processed through a global auction in which the Consortium was selected by CSN as the best partner to jointly develop the NAMISA project into a stable and profitable business. The selection was understood as a result of the Japanese and Korean steel producers' outstanding reputation as stable iron ore purchasers and ITOCHU's substantial experience in the operation of iron ore businesses as well as trading of iron ore in Australia and Brazil.

In addition to the acquisition of NAMISA shares, the five Japanese steel producers and POSCO are expected to enter into long-term iron ore purchase agreements with NAMISA.

1. Overview of NAMISA

Company Nacional Minérios S.A.
Business description CSN's wholly-owned iron ore mining and sales subsidiary located in the State of Minas Gerais
Established November 2006
Location State of Minas Gerais, Brazil
Capital US$17 million (Approx. JPY1.8 billion)
Financial performance
(Fiscal year end December 2007)
Total revenue: US$221 million (Approx. JPY23.2 billion)
Net income: US$23 million (Approx. JPY2.4 billion)

2. Composition within the Consortium

  Ratio of capital contribution
ITOCHU Corporation 40.00%
JFE Steel Corporation 16.20%
Nippon Steel Corporation 16.20%
Sumitomo Metal Industries, Ltd. 6.57%
Kobe Steel, Ltd. 3.08%
Nisshin Steel Co., Ltd. 1.75%
POSCO 16.20%
Total 100.00%

3. Location of the project

Location of the project

# # #

For more information about this release, please contact:
Nippon Steel Corporation Public Relations Center Tel: +81-3-3275-5023
Sumitomo Metal Industries, Ltd. Public Relations Group Tel: +81-3-4416-6115
Kobe Steel Limited Secretariat & Publicity Dept. Tel: +81-3-5739-6010 (Tokyo)
Tel: +81-78-261-4041 (Kobe)
Nisssin Steel Co., Ltd. General Administration Dept., Public Relations & Investor Relations Team Tel: +81-3-3216-5566

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