By Brazil Stock Guide – In a quarter marked by record operational results and steady progress on its P15 mine expansion, CSN Mineração (B3: CMIN3) reiterated that rising leverage won’t threaten its dividend strategy. With R$ 13.6 billion in cash and net leverage at –0.59x EBITDA, the miner says it has ample financial room to fund growth and maintain robust distributions.
Dividends Remain a Strategic Pillar
Chairman Benjamin Steinbruch emphasized that dividends remain a structural part of the company’s strategy. “The company is strong, with solid margins and resilient demand. These exceptional results give us the confidence to keep rewarding shareholders even as we expand,” he said. The company’s board recently approved R$ 903 million in dividends and interest on equity, to be paid on November 19, 2025 — bringing total distributions since its IPO to over R$ 18 billion.
Analysts Press on Leverage and Dividend Sustainability
Questions from analysts at Goldman Sachs, Santander, and Bradesco BBI focused on whether CSN Mineração can sustain its 80–100% payout policy while executing the capital-intensive P15 project. CFO Pedro Oliva responded that the company’s balance sheet remains “far from any point of pressure.” “We have a net cash position, strong operating generation, and flexibility to increase leverage without affecting dividends,” he said.
Oliva added that a moderate increase in debt could actually improve tax efficiency by better using interest deductibility. Since its IPO, the company has distributed R$ 18.3 billion in dividends, consolidating its status as one of the top payers on the B3.
P15 Expansion Stays on Schedule
The P15 mine expansion remains on schedule, with civil and infrastructure works advancing as planned. Startup is expected in 4Q27, followed by a 12-month ramp-up. Addressing questions from J.P. Morgan, Oliva clarified that the recent uptick in capex “reflects concentrated execution, not project delays,” noting that most contracts are already signed and funded.
Iron Ore Prices and Chinese Demand
Analysts from Itaú BBA raised concerns about weaker Chinese indicators and new supply from Simandou. Oliva argued that demand for high-grade Brazilian ore remains resilient, as China prioritizes flat steel production. He also highlighted that the declining quality of Australian ore — with the Platts benchmark moving from 62% to 61% Fe in 2026 — will likely benefit Brazilian producers.
The company expects iron ore prices to stay between US$100 and US$110 per ton, with part of its sales hedged around US$104.77/t, generating a positive mark-to-market.
Costs and Logistics Efficiency
Pressed by Bradesco BBI about cost behavior, Oliva said efficiency gains continue to offset logistical pressures. The company’s C1 cost stood at US$21/t, while freight averaged US$21.9/t, both below international benchmarks. In response to Morgan Stanley, Oliva added that the MRS railway renewal and new contracts in the hydro logistics corridor should reduce tariffs and improve integration between mine, rail, and port operations.
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