Brazilian flats steelmaker Usiminas has clarified this week that the deal it signed with its iron ore subsidiary, MUSA, last week was different from the agreement former CEO Romel de Souza signed. Earlier this year, de Souza was replaced by Sergio Leite.
Last week, the board of Usiminas unanimously approved the execution of a binding term sheet, in which it reduces the volume of the commodity Usiminas is obliged to buy from MUSA from 4 million mt to 2.3 million mt per year.
The difference between the two deals, according to Usiminas, is that the most recent deal does not involve charges to the steelmaker for the decrease in the iron ore supply deal. In contrast, the deal signed by de Souza would guarantee a fixed payment for MUSA equivalent to the EBITDA the iron ore producer would lose by supplying less iron ore to Usiminas.