Benjamin Steinbruch - Chairman and CEO Gustavo Sousa - Executive Officer, Investor Relations Paulo Rogerio Caffarelli - Executive Officer Luis Fernando Barbosa Martinez - Executive Officer, Steel and Cement Products Commercial Area.

Leonardo Shinohara - HSBC Thiago Lofiego - Bank of America Merrill Lynch Ivano Westin - Credit Suisse Alan Glezer - Bradesco Leonardo Correa - BTG Pactual Marcos Assumpcao - Itau BBA Thiago Covre - Citibank Rodolfo De Angele - JP Morgan Humberto Meireles - Goldman Sachs.

Good morning, ladies and gentlemen. Welcome to the CSN Teleconference for the Presentation of the Second Quarter of 2015 Earnings Conference Call. Today we have the company’s executive officers. It is being recorded and all participants will be in listen-only mode during the company’s presentation.

[Operator Instructions] This is being simultaneously webcasted via the interest at the site of CSN, www.csn.com.br/ir. There we shall have this information, a slide presentation maybe downloaded from this website and feel free to flip through the slides during the conference call.

Before proceeding, we’d like to inform you that forward-looking statements are being made here under the Safe Harbor of the Securities Litigation Reform Act of 1996. Forward-looking statements are based on the beliefs and assumptions of CSN management and on information currently available to the company.

They involve risks, uncertainties, and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur in the future.

Investors should understand that general economic conditions, industry conditions, and other operating factors could also affect future results of CSN and could cause results to differ materially from those expressed in such forward-looking statements. Now, I’ll turn the conference over to Mr.

Gustavo Sousa, CSN’s Controllership, Tax Planning and Investor Relations Executive Officer, who will present the company’s operating and financial highlights for the period. Please Mr. Sousa, you may begin your conference..

to expand competitiveness and to recover cash recovery. We have three fronts. One, operating efficiency front; one, delivery of projects where we highlight the number one, competitiveness in the first quarter and forecast for the third quarter, number two.

And in addition to this, in the delivery of these projects, we are working [in] power efficiency and also changing our coke batteries. At the end of this, we also have to talk about the financial management. Slide 4, here we see our segments.

In steel, we highlight high competitiveness in terms of cost, high popularity in Brazil and growth of our distribution capacity. In mining, we have world-class asset, production chain integration, and this give us a possibility of facing any different types of scenario and we also taken some cost reduction actions in mining.

We are expanding our production capacity. We’re going to show you some slides on this topic. And also we say that in all of these segments, our integrated logistics and power is supplied by our own means. Number 4, consolidated results. Our net revenues have a total of R$3,687 million.

Our adjusted EBITDA reached R$801 million, reduction of 12% in relation to previous quarter. We have [certain stability] of about 20% and our net profit/loss of about R$615 million.

In slide 10, we see a summary of our net results build-up and you see until the end result of the period, our adjusted EBITDA of R$100 million and negative financial results of $223 million. These are operating expenses. And we have losses for preferred shares of R$89 million.

So between financial results and financial revenues, so we have a negative financial result of R$772 million and the total of these factors led us to a net loss of minus R$615 million. Slide 7, we start to explain the steel performance in each segment, steel performance.

In this slide, we see that the increase of volume of sales abroad increased our total level. You’d see that our sales abroad responded 23% of our total sales in the first quarter of 2013.

In the last quarter, this went up to 40% of total, specifically in the internal market we have a drop by 20% and a smaller drop than the one saw in our peers and this was 27% result. Slide 8, we can see here there is still cost competitiveness that we have in steel.

The slab production cost was US$538 in the first quarter 2013, up to US$320 in the second quarter 2015. So CSN is one of the most competitive steel mills in the [company], this cost competitiveness is very important for competitors both domestically and abroad.

Slide 9, we see the mining performance and we see a higher volume and have reached record in the second quarter 2015. Casa de Pedra produced 6.2 million tonnes. And we can see in this orange column, there was a change in the operating business model.

We saw different level as of December last year and this operating business model now is concentrated on iron ore of better quality. It’s a more concentrated type of product. Higher volume and lower cost were able to have to an increase in EBITDA of R$228 million.

So slide 10, this is the conclusion of our mining cost competitiveness, the reduction, so even with the reduction of the mine ore. Slide 11, we see the cost reduction of the iron ore that was delivered to China. In addition to this cost reduction, this change in the operating model, we had an improvement in the quality of our product.

In the first quarter 2015, we reached content of iron ore which was above 54% compared to 62% that we saw last year. This cost reduction was due to a very much concentrated work in reducing logistics and reducing administration costs in mining.

With all this, we continue to slide 12, CSN is positioned in the best cost mining company all over the world. Slide 13, we can see the cement performance, which is a solid performance, even with the slowdown in Brazil’s construction industry. We have an increase in percentage and in EBITDA growth of 13%.

Slide 14, we can see, this is the flowchart of delivery of our cement project. Right now, in the second quarter, we concluded the Grinding Mill #1 at Arcos. And we increased our production capacity by 3.3 million tonnes.

In 2016, we are going to conclude another kiln expansion at Arcos and also in 2017 we are going to have a grinding mill and we are going to have a production capacity which is going to be over 5.3 million tonnes. Slide 15, we see the makeup of our revenues and the synergy that we are able to obtain with all our different businesses.

Now, let’s go to slide 16. Now, [indiscernible] is going to talk about financial agenda..

Good morning, everyone. [Technical Difficulty] two points. The first was a decrease of iron ore cost and [Technical Difficulty] important to say, that’s very important to us, in the current times to have strong cash.

Our cash today is about R$8 billion and we, as of July last year, we are bringing in our revenues abroad and improving our financial results.

And now the point that’s very important is cost reduction and working capital and we’re concentrating on reducing costs and tweak our working capital, also management of liability is to expansion of debt for the year 2016 and 2017 and also to find funding instruments that can allow us to improve cost and better maturity in our operations.

And the most important point in this agenda, in this front that we’re putting together, is to review our asset portfolio and also divestments, many in those assets that are not part of our core business. On page 17, I’m going to talk a bit about the work we’re doing in term of working capital.

It’s important to say that our company is very well known about our operating excellence and we have access that are very competitive, such as steel mining that we have a record in terms of production and quality of its product.

And in adverse situations such as currently we go through, we are ready to make good contributions even when we put all these business together and when – we’re working our corporate area, trying to reduce our expenses. In this full effort together, we are doing our best and concentrating in trying to reduce R$100 million per month in our operations.

It’s very important to say that right now we’re concentrating in adapting our stock levels, adjusting them, and [negating] our payment maturities. We already listed more than 2,000 suppliers in terms of payment maturities. And we have renegotiated more than 300 contracts in terms of its scope and price. As to page 18, about our debt.

Our major objective is the elongations of our payments for 2016/2017. These have been already approved by our financial department and this elongation is going to give us [tranquility] to sell some of our assets. And at the same time, we work heavily changing the profile of our debt, trying to work with lower costs and better deadlines.

And I’d like to say to you that these operations do not intend to increase our debt. What we want is change our profile, for instance, what’s going on right now. We are exporting iron ore to Japan, 10 billion tonnes, and right now we are working on a securitization process with most important Japanese banks.

In September, they are going to come here to visit Casa de Pedra. And also an illustration to our financial agenda, on page 19, just to prove what we see here, our concentration is our core business, it’s steel mining, cement and also we are divesting. The company has decided to divest some assets.

For instance, today the TECON and today we have a participation, a share, excess shares with MRS, in our energy business, some small companies in Brazil and also our share at USIMINAS.

Right now, we separated some assets to be reduced, is our thermal, the first assets, we already hired some banks that they are going to control the business and we are immediately initiating this selling process. That’s why we’re saying that we’re allocating the settlements for 2016/2017 so that our sales will continue to be very normal.

Like I said, we’re going to sell all the necessary assets to improve our leverage. Thank you very much..

So I’d like to say a few words before starting our Q&A session. Now, I’ll give the floor to our Chairman, Mr. Benjamin..

Good morning everyone. Usually I’m not involved in these presentations, but I decided to speak in this presentation along my officers here, my colleagues, I like to say what we intend to do in a very short period of time. The idea is to control cash and to give continuity to our operating efforts.

You’re going to be able to see that we’re already working on this and we are achieving successful results in terms of cost reduction and we’re controlling our cash expenditures. We’re controlling our liquidity and we are improving the performance and delivery of our production, be it in steel, iron ore or cement.

We didn’t stop our production; we continued to work at the same speed to reduce costs and offering full coverage to our customers from an internal point of view and geographical point of view. Our objective [Technical Difficulty] during all this time, we have collected many assets [Technical Difficulty] mining ore and cement.

We are going to make it visible our assets, we have hired banks that are going to help us to implement this proposal and we hope that this heavy work trying to control our cash expenditure, to reduce cost and to have a better positioning of our products, to improve our image, and selling our assets with all this we’re going to be able to change the profile of our level of debt and achieve good results in our EBITDA.

As you all know, the market is quite challenging right now. It’s not easy, locally as well as abroad, and we are trying to – we have a diversification of mining products, steel products and also – we also are going to be able improve our capacity in cement and we’re going to achieve the desirable EBITDA to be able to implement our project.

From the international market point of view, we’re trying to look for opportunities all over the world and our objective is to work to reduce our working capital, to improve our cash flow, also to improve our management spare parts and raw material, we’re going to work in all fronts.

And we’re fully concentrated in the whole company trying to preserve our cash, to reduce indebtedness, and to improve our EBITDA. This is our commitment and this is what I wanted to say in this results statement, the earnings presentation. So that’s it from me.

This is my full commitment and I want to be sure that we’re going to be quite successful in the implementation of all these measures that have been announced. Thank you very much. Thank you for my colleagues and they are going to be available to answer any questions that you might have. Thank you very much. Have a good day..

So let’s start the Q&A session..

[Operator Instructions] Our first question is from Mr. Shinohara from HSBC..

Talking about investments, I know that there is a flow chart, there are many faces that are going to take place.

Do you have any outlook or something that you can do this year? Second, in terms of iron ore, there was an increasing price of iron ore, the situation is going to continue like this, you’re going to invest in quality? And one more question about steel, are you going to increase your exports for the second semester?.

Talking about divestments, it’s important to say, as I said before, we are starting right now, precisely this week we’re implementing this process. So as the Chairman said that our assets are excellent assets, we have already some people that are requiring, some are interested in some of these assets.

The total amount of assets that are going to be sold, it’s going to take a little time because we have to see the documentation and all, but we have already sold some assets, we are going to start divesting right now..

In terms of the quality of iron ore, before the crisis, we were certified according to the results we have at Casa de Pedra. We certified 3 million tonnes between last year and this year and this allowed us to optimize our ore and this improvement of quality is the consequence of this technical work that we developed to help the yield.

It was timely, because it was precisely before the crisis..

As to exports, it’s important to point out what I usually say, the strategy of our company as Benjamin has just said, is based on product diversification and added value products, then also to work regionally to be present regionally and trying to understand what each production chain is working on.

In exports, specifically what we are trying to do is to act specifically in some markets where we are already present.

The American market that is being recovered, under recovery right now in some sectors such as civil works, automotive sector and the consumer sector, we are present in the United States through our company, our headquarters in the United States.

And in the last two instances, we didn’t bring as good results to Brazil, because Brazil suffered anti-dumping in the hot rolling plates and cold rolling plates. And since we were always concentrated on added value and diversification, today our sales abroad represents 65% of covered material.

These are products that I do not have today and they are not subjected to anti-dumping. So this is a very good result. And our strategy, of course, is adapting to the internal market. And just following step by step what’s going domestically is to increase the number of coated products in foreign markets.

Also we intend to sell steel plates in Latin America. We are working in this area. We are expanding our sales force, both in the American market as well in the Latin American market. And we are working together with all our people as one single chain. Our major objective is not to use commodity products.

We are using the whole, at most our added value products. In domestic markets, we see that we are facing a very difficult year, quite challenging, all production chains in general are suffering. You know what’s going on in Brazil; everybody knows. But in spite of all this, we can already see there are some stock adjustments that are taking place.

Imports are contained, restricted. We believe that we are going to face a reduction by 13% in comparison to last year. And exchange rates, this 3.50% exchange rate is favorable to us. It’s good and it makes imports feasible.

So summarizing, the strategy is to increase exports in markets we are already present, products with high added value, coated products and domestically, we are going to monitor the growth, because our major priority is to expand in our local markets..

[Operator Instructions] Our next question is from Mr. Thiago from Merrill Lynch..

First question is about the leveraging and your cash flow. You spend R$1 billion in cash in our quarter. Are you comfortable, because you’ve spend 6 to 7 times your EBITDA for two or three years.

Suppose you were not able to sell your assets and your objectives do not reach the multiple that allow you to do leveraging, maybe there is one asset that you might sell or not and you are going to change EBITDA.

So I’d like to understand how comfortable you will feel in this high leveraging scenario for a longer period of time? And also what is the expected payback for the next few years and in assets selling, specifically would you consider the selling of long steel business?.

In terms of leveraging, I want to stress once again something which is very important to us right now, it’s our cash, R$ 2 billion. This cash give us good mobility so that we can elongate our debt for 2016/2017. This gives us the possibility to sell the assets as soon as possible.

In cost and trading, our interest and not on the interest of those who are buying the assets from us, so what we’re doing right now is that we have good outlook and some business that we can conclude right now. So our leverage is going to be reduced from the point on that we are going to sell these assets.

So we’re going to go through a period of time, we’re going to co-exist with leveraging which is above what we considered ideal. But the most important point is the [exit] of the company trying to reduce leveraging, today, is to reduce leveraging.

And in order to do so, we’re going to do everything we can trying to reach good leveraging level for a company such as ours. In terms of results, we are optimizing all our activities that give us better return. So right now we’re optimizing the CapEx that is concentrating on steel and mining..

Could you give us a CapEx figure?.

Thiago, let me tell you, one of our strategies be due to the – we are not giving you the CapEx, but you can think that we know what the CapEx of sales and we are trying to avoid mentioning figures.

Okay?.

Our next question is from Mr. Ivano from Credit Suisse..

I’d like to talk about steel, the steel mills.

And talking about price today, what’s the outlook for a possible increasing crisis? How do you see future demand for the second and third quarter? And if prices are going to be stable in the third quarter and since the scenario is difficult, do you intend to gain market share? Are you going to have good returns on the third quarter? What do you expect to sell this year and right for you to talk about profitability and exports.

Today, what is the margin that I should have today? And also the industry development in Brazil and outside Brazil, are you going to have an anti-dumping procedure against being some contracts abroad?.

First, give you an outlook of the sector, the industry; of course, after continuous drop of our industrial production, what we see now that we have an stock adjustment and all these adjustments have already been concluded. This is very positive.

Because today, our productive change in general, the automotive sector, when to talk about steel, they all have been adjusted. This was the problem two or three months ago. Now it’s becoming better. But I believe that we are still going to face problems in terms of the white line and automotive sector in terms of consumption and also the exchange rate.

When 350, 355, the import, we expect this exchange rate is controlled today for instance, the hot rolled steel in FOB price of 340, for the premium for at 340 exchange rate is 3%, which is quite low. So at exchange rate of 355, there is no premium at all.

But the increasing sales in domestic market is stable, so this is connected to the purchase of imported material and this tends to drop. Today, we have a retraction of the first semester of 13% in imports and when compared to the same period of last year first semester.

And the coated material where at – 40% of the market today also suffered some drop, some reduction, imports went down 25%, 30%. So we believe that we are going to have a situation of reduction of imports, which is beneficial to our sector. Theoretically, this is going to be captured by local mills and CSN is going to work with coated products.

The local productive chains we are controlled and if the exchange rate keeps its level, some customers we have might consider exporting. So the environment is not totally negative. We are entering a slightly positive situation in terms of exports and anti-dumping as you mentioned, the hot rolled products is not going to be a problem this year.

What we saw this year is not going to affect our figures. As I said before, the cold rolled products we sell very little of this product, in terms of coated material, we do not have anti-dumping problem. So strategy right now is quite simple.

We intend to make good use of the domestic market to capture imports that are going to go there, work with added value to diversify. And another point is that we were concentrated in the southern southeastern region of the country. Now, we are concentrating in other regions of the country.

There is a pulverized type of consumption in other locals, in other cities of the country and other places. Another important point is to use our distribution chain to use our coating capacity that we have in our operations here in Sao Paulo and Rio de Janeiro and to be present and working in trying to add value to the market.

This is our current strategy to local market and also foreign market. The margin in the foreign market, our operation in the United States is very much concentrated in [tinmet] with high added value. So this market is about US$1,000 per tonne.

So regardless of the raw material price, we have efficient cost that can be competitive in the American market with imports and exports of products in Brazil and also local production regardless of the dumping that we’re suffering in the United States.

In terms anti-dumping process, the Brazilian industry is paying attention to the situation, we’re talking to a group and we’re working together with this steel industry in Brazil. We are having some hearing to see what’s going on in this dumping process.

And we have to see that – we have operations in the United States in 1990, [First Coal] was outside the dumping process because they had an operation in the American market. So CSN has the hopes that we are not going to be involved in the process, because we do have operations in the United States.

So this means that we can continue to work with the raw material here in Brazil..

One follow-up question for Caffarelli.

Of all these assets that are going to be divested, USIMINAS and the other one, we’re concentrating on this divestment, I would like to understand if you give us guidance in terms of the total amount of money that’s going to be divested with these assets? And in terms of cash, in Brazil, with this new strategy, what is the new cash structure, what would be the total percentage of cash in reais and foreign currency?.

Just to make you quite clear, to be quite transparent, 2015 we want to close with $R1.3 billion in just concluding the projects that we have going on. Next year, with more operating efficiency and our financial, we have a CapEx of R$1.5 billion in this process of budget reduction.

So this is going to give us better return, okay? Now, I’m going to give the floor to Ivano. We’re talking to you and giving you some of the assets. So [indiscernible] to us makes no sense at all to talk about value of assets, because we’re just trying our negotiations with potential buyers.

So if we have volume or if your specified practice for this assets, we’re going to start a fragile process in – we’re going to start this negotiation in a weak position. So stay calm with us. We have a long list of potential buyers, with some offer that really above what we’re asking for. So this is strategic to us and many different points of view.

So that’s why we’re not disclosing the amount to you. As to the cash, the company has this possibility of establishing the amount of money that’s going to stay abroad and they are going to be in the country. And there is a problem of exchange rate.

We have debt in dollar due to our bonds, but of course, we also have the possibility of bringing resources to Brazil. And the CDI, at the price it is today, it is quite favorable to us. So we can have extra revenue in our plan due to the exchange rate of the CDI..

Our next question is from Mr. Alan from Bradesco..

I have two questions and two questions are related to cost. First question is to the mining sector. We saw that per tonne in mining went up US$3 per tonne every quarter, even prices are going to go down at US$4 per tonne, so there was a cost improvement even with the increase of share of Casa de Pedra in the mix of the sales.

So is this cost drop is sustainable? And specifically at Namisa, what are the expectations in the freight costs for the next semester? And there is a question also about cost of steel mills. The real cost per tonne is about 5% in steel mills; I’d like to know how much of this is coal and what is energy? These are my questions..

I’m going to try to tackle all the topics you mentioned.

Basically, in terms of mining costs, there were many different activities that have been implemented in many different fronts in our productive processes and the only objective was to reduce cost and to improve quality of the product, increase productivity, these are the pillars of operational excellence. So this is our homework.

We are working on this for a long time. And if you get into this, you’re out of the market already. In terms of cost, and mining costs, and how these costs affect Namisa’s production. At Namisa, we made a deep structural change in the operating model of the company. We changed our product portfolio before Namisa would deliver the average of the market.

Now, we’re offering concentrate that has iron content of about 75%. So this is sustainable. We’re going to keep this like this for a long period of time. And both, working with Casa de Pedra, we’re integrating these assets for long time. So in the whole, when we talk about our improved product mix, this is something that came to stay.

This is part of our business plan. And we have full support to continue, we have improved the product in the last few years and this gives better position for our product in the market. In terms of steel mill costs, this was due to our power in Volta Redonda. This has already been programmed. This was the power mill in [indiscernible].

This is very important because in 2015 we still have to increase our generation capacity. This is going to be increased in 2015..

Our next question is from Mr. Leonardo Correa from BTG Pactual..

My first question in terms of mining, could you please tell us in terms of volume, the volume of iron ore for 2016, in the same business unit, how is this going to evolve?.

We are observing some players, the high grading of some pits. So we want to postpone increasing costs, just to say [indiscernible] high grading in the pits. So this is one of my first questions..

And going back to leveraging issue, I’d like to talk about sales. In the first quarter, you paid dividends about R$600 million was the dividend, second quarter you didn’t pay anything. And how we are going to reconcile the concentration of the company, trying to reduce leveraging, selling assets, and paying dividends.

How does this mix work together? Thinking about leveraging for the next six months, how we are going to pay dividends in this scenario?.

I’m going to answer questions related to mining. But if you allow me, I’m going to go back to a previous question asked by Mr. Alan, Bradesco, in terms of freight prices. Of course, freight prices are going up. This is a problem in the market. We are putting pressure, we have some options that we’re using right now. And this is a continuous struggle.

It’s an unfair struggle, but we are being able to keep freight prices at a certain level and we think that this is going to stay so for some time. As to you question, Leonardo, in terms of volume, Casa de Pedra has an increasing production level, it’s growing.

We have a production record recently, showing – tend to have some few good months until the end of the year, because this is a dry period. The rainy season is going to start in September.

If everything goes well as we expect in terms of rain and if everything follow the seasonality, we expect to have in Casa de Pedra about 20 million tonnes, this is production level, and Namisa will be about 5 million tonnes. So it’s about 33 million in total and deducting [indiscernible] 7 million tonnes.

The iron ore ration, of course, this is important. It’s not the way we work. If there is any, we work to make the mining operation sustainable, we’re not working with high grading. We are trying to keep our ratio stable, otherwise we’re going to have a problem in the mine in the stalling period.

Our mine offer many possibilities, we have four fronts in mining, which are quite rich, in terms of iron ore. In addition to these mines that we have at Namisa, we still have some other options and we do not have – we have a plan which is sustainable, but it is suitable to this current situation.

And we may plan, in the last year to this year, and the objective is to improve the quality of our product and also improving the benefits. In terms of dividends, I’d like to say once again, and this is very important to us, I’d like to emphasize that what we talked about the company, our main objective is to reduce leveraging.

This was decided by the Board, by the officers of the company, and in this regard, dividends is not part of our agenda right now..

The outsourced services at the port, at the harbor, there are some harbors that are closing their capacity and they’re concentrating mostly in the internal market.

At the port, it seems that you have capacity for 40 million tonnes, in the calculation and what is supposed to be exported is do you have some leftovers, some extra surplus, so this might put pressure tax on harbors.

But how do you see about outsourcing these areas?.

The current situation is precisely what you’re saying? We have more harbor capacity than our end supply, iron ore supply. [Technical Difficulty] putting some business together so that we can fulfill our obligations and try to provide harbor services till the end of this first semester.

There are some services, some producers are coming to us because there is some remains and small producers that they want to export their products to get some cash. We are negotiating and this is also an opportunity to us.

It’s not something that we – same situation we had last year, every month, we have some services that have been provided to third parties. So the dynamics of the market still allows us to offer services because some companies still need cash.

In the long run though, we’re increasing the production of Casa de Pedra, everything is going on, you saw the production curve. We have mentioned the historical records in production. There are still programs till the end of this year and we’re going to occupy the capacity of our harbor till the end of this year.

And we’re going to have enough margin to propel our business. We have 45 million tonnes at the harbor and we are using the surplus so that we can have more efficiency in terms of cost, for instance. We can reduce – we are improving our railway freight and this helps, so that we can increase efficiency in the railway and also in cost.

When you have some [indiscernible] in one of the situations, we change and we work this to our benefit..

Our next question is from Marcos Assumpcao, Itau BBA..

My first question for Caffarelli is if we look at our schedule statement, we see that you have R$24 billion that is due to be paid in the next four years.

Do you have some fundings from 2016 to 2017 that are going to be elongated? But if you could explain and talk about this R$24 billion for the next five years, how much of it has been negotiated and at what price? What margin? Second question to Daniel, in terms of mining costs, you did a wonderful job reducing cost for R$119 per tonne in China.

What is your target for the future? We’ve seen very aggressive targets in other sectors of the business.

And I’d like to talk about the quality of iron ore, what’s the quality today compared to the situation six months ago? Are you being able to improve the quality? What are the measures that you implemented that allows you to reach these results?.

First, our major concentration right now is for 2016/2017, not 2018. So 2016/2017, everything is already organized and we need a deadline for the next three years, we will be able – possibility have a large volume of divestment. And the results of this divestment are going to quick some of our operations in the deadline.

So we are quite comfortable with our current situation. We’re concentrating only on 2016/2017. Later, as we said, we are trying to find funding options, funding alternatives in the long run, low-cost funding that are going to be suitable to our production activity. I stress once again that we are not to increase our indebtedness level.

As to the rates that we are negotiating, I’d rather not mention it, mention them, because we are talking to banks, some banks have specified some rates and I would like not to reveal these rates right now. What I can say is that we are working with a same cost level that we had previously..

Thank you for your recognition. Casa de Pedra and people at Namisa is going to be quite pleased with your complement in reducing our costs at Casa de Pedra. We’ve been working quite hard to do it. In terms of how we achieved it, this cost reduction operation, this started when we had a steep drop in July last year.

And we know that it depends on exchange rate and many other variables. And this has been an unfair struggle, because our target is a movable target.

We established one amount, we reached the target and we reached the goal and immediately after we have to do some extra effort to do down once again and the next following – in the last six months, we’ve done this three times, changing our goals, our targets.

So we are adapting to the market circumstance; our objective is to ensure the margin that we’ve mentioned to you. We want to be at sustainable without doing high grading or any [indiscernible] among the five best in the market, that’s what we want.

Our objective has always been to follow the tree, major companies in the market, being close to them and to keep our competitiveness..

Daniel, if I can do a follow-up, could you please give us mix comparison between the mining cost compared to the second quarter cost? Cost has been doing down, so I’d like to know what’s going on from now on?.

Well, I have to get this information here. Gustavo, would you please find me the figure so that – later I’ll give it you, send to you by mail. Thank you..

Our next question is from Mr. Thiago from Citibank..

My question has just been answered, so thank you. I’m going to pass..

Our next question is from Mr. Rodolfo from JP Morgan..

I’d like to make a few quick questions.

First, I’d like to understand what happened with your working capital and we want to consider the opportunity of this new strategy, this leveraging and what happened with the stock? And second question, including mining in China, I would like to confirm the figure, the CapEx for 2016? I’d like to repeat it, just to confirm, would you please repeat the CapEx for 2016?.

The connection was not good enough. So in terms of the working capital, we have cash consumptions relating to the working capital. Most of the amount was the result of our very strategy of concentrating on foreign markets. When you concentrate on foreign market, you have a lead-time between the negotiation and conclusion.

This changed the stock and this increased the stock. Its further coming and this increased the deadline. And even in the domestic market, in order to become competitive, being competitive, we will have to change deadlines.

We have been following this everyday and if the adjustment does not achieve the results, we’re going to look for other markets, as Martinez has already mentioned. Second point that you raised was – third point was to the CapEx, CapEx for next year is about R$1.5 billion.

If I understood your question, your second question, in terms of our metrics and our EBITDA, we include the most important adjustment in Namisa and there is no consolidation of our debt. So the metrics that is there does not include any type of consolidation of our debt..

And how much is your debt today?.

About R$4 billion..

Our next question is from Humberto Meireles from Goldman Sachs..

[Technical Difficulty] of the operations in iron ore, one, are you going to have an adjustment of the capital of the company, the national capital of the company or the distribution of dividends, the cash that you are working at Namisa then be – the adjustment of capital structures in your business, that’s my question..

Let me see if I understood your question. In terms of the indebtedness, it’s from convertible debentures, but with public agencies in a very controlled maturity base. Now, this question related to cash, it’s important to have a historical perspective.

During some years, we had very relevant position of cash abroad, in mainly now – this was right up to now, it was a good point in time to bring this money in with dollar at this rate. If we had brought dollar in in the middle of last year, today we would regret the action.

And in the last month, we’re talking about the possibility of bringing this money in, so we’re analyzing from the problems of instruments and instruments of the most suitable tax instructor to bring in this money, so that we won’t have any tax liability.

Today, we have a structure of derivatives hedge account that allow us to make good management of this exposure and to bring this money to Brazil without having any other type of tax liability related to bringing in this money.

We already started bringing this money which is abroad and this is going to be informed to the market in the third quarter or fourth quarter. We are going to have variations by that time.

Specifically in terms of the forecasting using the cash of Namisa, we have – what’s going – the merging process, it’s very important to talk about this process [indiscernible] during some time, CSN implemented many different types of negotiations that we’re going to terminate some contracts.

We’re going to have an integrated mining company, we’re going to buy equipment and we’re going to fund this project. In December last year, we signed an investment agreement, as the investment agreement established the terms of this merging negotiation and this is the joint agency.

Now, we’re trying to work in the pre-analysis and see what are the necessary elements to conclude the process. So we’re going to have a cash position and a debt position that’s going to be defined among the partners. And as soon as we reach a conclusion, we’re going to inform the market about the situation.

So anything that comes, we are going to inform the market..

[Operator Instructions] Since there are no questions, I’d like to give the floor to Mr. Gustavo Sousa, Executive Director of Investor Relations for his final comments..

Thank you very much for your participation. I’d like to say that we continue to be available to answer any extra questions that you might have during the day and the next week. Thank you very much for your attention..

Thank you. This teleconference has been concluded. Please disconnect your lines and have a nice day. Thank you for your attention..