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<SEC-DOCUMENT>0001292814-10-000681.txt : 20100318
<SEC-HEADER>0001292814-10-000681.hdr.sgml : 20100318
<ACCEPTANCE-DATETIME>20100317183216
ACCESSION NUMBER:		0001292814-10-000681
CONFORMED SUBMISSION TYPE:	20-F/A
PUBLIC DOCUMENT COUNT:		26
CONFORMED PERIOD OF REPORT:	20081231
FILED AS OF DATE:		20100318
DATE AS OF CHANGE:		20100317

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NATIONAL STEEL CO
		CENTRAL INDEX KEY:			0001049659
		STANDARD INDUSTRIAL CLASSIFICATION:	STEEL WORKS, BLAST FURNACES & ROLLING & FINISHING MILLS [3310]
		IRS NUMBER:				000000000
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		20-F/A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-14732
		FILM NUMBER:		10689864

	BUSINESS ADDRESS:	
		STREET 1:		RUA LAURO MULLER
		STREET 2:		116 36 ANDAR
		CITY:			RIO DE JANEIRO RJ BR
		STATE:			D5
		ZIP:			00000
</SEC-HEADER>
<DOCUMENT>
<TYPE>20-F/A
<SEQUENCE>1
<FILENAME>sidform20f2008a.htm
<DESCRIPTION>FORM 20-F A
<TEXT>

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   <TITLE>Provided by MZ Data Products</TITLE>

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<center>
  <B></B>As filed with the  Securities and Exchange Commission on March 17, 2010
</center>
<HR SIZE=2 noshade color="#000000">
<DIV align="center"><B><FONT SIZE=4>UNITED STATES <br>
  SECURITIES AND EXCHANGE COMMISSION</FONT><br>
</B><B><FONT SIZE=2>Washington, D.C. 20549</FONT> <br>
<br>
</B>
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<B></B><B><FONT SIZE=4>FORM 20-F/A</FONT></B><br>
(Amendment No. 1)
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<br>
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<TR>
<TD nowrap valign=top><img src="nox.gif">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD width=100%> <div align="center">REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES<br>
EXCHANGE ACT OF 1934 <br>
<br>
OR </div></TD>
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<DIV align="center"></DIV>
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<TD nowrap valign=top> <img src="x.gif">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD width=100%><div align="center">ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF <br>
  THE SECURITIES EXCHANGE ACT OF 1934 <br>
For the fiscal year ended December 31, 2008<b><br>
<br>
</b>OR </div></TD>
</TR>
</TABLE>
<DIV align="center"></DIV>
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<TR>
<TD nowrap valign=top> <img src="nox.gif">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD width=100%> <p align="center">TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF<br>
THE SECURITIES EXCHANGE ACT OF 1934
    <br>
    <br>
OR </p></TD>
</TR>
</TABLE>
<br>
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    <TD nowrap valign=top><img src="nox.gif">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width=100%><p align="center">SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES<br>
      EXCHANGE ACT OF 1934<br>
    Comission file number: 1-14732<br>
    <br>
    <br>
    </p>
    </TD>
  </TR>
</TABLE>


  <DIV align="center">
  <TABLE border=0 width=20% align="center" cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
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  <B><FONT SIZE=3>COMPANHIA SIDER&#218;RGICA NACIONAL</FONT><br>
  </B> (Exact Name of Registrant as Specified in its Charter)<I> <br>
  <br>
  </I><font size="3"><b>NATIONAL STEEL COMPANY<br>
  </b></font>(Translation of Registrant's name into English) <font size="3"><b><br>
  </b></font><I><br>
  </I><font size="3"><b>THE FEDERATIVE REPUBLIC OF BRAZIL<br>
  </b></font>(Jurisdiction of incorporation or organization)
  <br>
  <br>
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  <I>

  </I></div>
  <div align="center">
    <p>Paulo Penido Pinto Marques, Chief Financial Officer<br>
      Phone: +55 11 3049-7100&nbsp;&nbsp; Fax: +55 11 3049-7212<br>
      <b>Av. Brigadeiro Faria Lima, 3,400 &ndash; 20th  floor<br>
      04.538-132, S&atilde;o Paulo-SP, Brazil<br>
      </b>(Address  of principal executive offices)</p>
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</div>

<div align="center"> <br>
  <b>Securities registered or to be registered pursuant to Section 12(b) of the Act.</b>  <br>
</div>
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  <TR>
    <TD></TD>
    <TD></TD>
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  <TR valign="bottom">
    <TD width="50%" align=center><U><b>Title of each class</b></U><b>&nbsp;&nbsp;</b></TD>
    <TD align=center><U><b>Name of each exchange on which registered</b></U><b>&nbsp;&nbsp;</b></TD>
  </TR>
  <TR valign="bottom">
    <TD align=center>Common Shares without par value&nbsp;&nbsp;</TD>
    <TD align=center>New York Stock Exchange*&nbsp;&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=center>American Depositary Shares, (as evidenced &nbsp;</TD>
    <TD align=center>New York Stock Exchange&nbsp;&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=center>by American Depositary&nbsp;Receipts), each</TD>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=center>representing one  share of Common Stock</TD>
    <TD align=center>&nbsp;</TD>
  </TR>
</TABLE>

<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
    <TR>
      <TD colspan="2"> ______________&nbsp; </TD>
    </TR>
    <TR>
      <TD nowrap valign=top><B>*</B>&nbsp; &nbsp; &nbsp; </TD>
      <TD width=100%> <div align="justify">Not for trading  purposes, but only in connection with the registration of American Depositary  Shares pursuant to the requirements of the Securities and Exchange Commission.</div></TD>
    </TR>
</TABLE>
  <p align="center"><b>Securities registered or to be registered pursuant to Section 12(g) of the Act:</b> <br>
    None<br>
    <br>
    <b>Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:<br>
    </b>None
  </p>
  <p><B>Indicate the number of outstanding shares of each of the issuer&#146;s classes of capital or common stock as of the</B>&nbsp;<B>period covered by the annual report:</B>&nbsp;</p>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
    <tr>
      <td width="30%" valign="top">Common Shares, without par value.</td>
      <td width="70%"> 793,403,838, including 34,734,384 common shares held in&nbsp; treasury. This amount considers the cancellation of shares and&nbsp; takes into account the one-for-three stock split that took place&nbsp; in January 2008, whereby each common share of our capital&nbsp; stock as of December 31, 2007 became represented by three&nbsp; common shares. For further information, see &#147;Item 7A.&nbsp; Major Shareholders,&#148; &#147;Item 9A. Offer and Listing Details&#148;&nbsp; and &#147;Item 10B. Memorandum and Articles of Association.&#148;&nbsp;</td>
  </tr>
</table>
  <p><B>Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the</B>&nbsp;<B>Securities Act.</B>&nbsp;</p>
<div align=center><font face="times new roman"><b>Yes</b></font>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<img src="x.gif"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<font face="times new roman"><b>No</b></font>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <img src="nox.gif"></DIV>
<p><B>If this report is an annual or transition report, indicate by check mark if the registrant is not required to file</B>&nbsp;<B>reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.</B>&nbsp;</p>
<div align=center><font face="times new roman"><b>Yes</b></font>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<img src="nox.gif"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<font face="times new roman"><b>No</b></font><b>&nbsp;</b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<img src="x.gif"></DIV>
<p><B>Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or</B>&nbsp;<B>15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that</B>&nbsp;<B>the registrant was required to file such reports), and (2) has been subject to such filing requirements for the</B>&nbsp;<B>past 90 days.</B>&nbsp;</p>
<div align=center><font face="times new roman"><b>Yes</b></font>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<img src="x.gif"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<font face="times new roman"><b>No</b></font>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <img src="nox.gif"></div>
<p><B>Indicate by check mark whether the registrant has submitted electronically and posted on its corporate</B>&nbsp;<B>Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of</B>&nbsp;<B>Regulation S-T (&sect;232.405 of this chapter) during the preceding 12 months (or for such shorter period that</B>&nbsp;<B>the registrant was required to submit and post such files).</B>&nbsp;</p>
<div align=center><font face="times new roman"><b>Yes</b></font>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<img src="nox.gif"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<font face="times new roman"><b>No</b></font>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <img src="x.gif"></div>
<p><B>Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-</B>&nbsp;<B>accelerated filer. See definition of &#147;accelerated filer and large accelerated filer&#148; in Rule 12b-2 of the</B>&nbsp;<B>Exchange Act. (Check one):</B>&nbsp;</p>
<div align=center><font face="times new roman"><b>Large Accelerated Filer</b></font><font face="times new roman" size="2"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<img src="x.gif">&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font face="times new roman"><b>Accelerated Filer</b></font><font face="times new roman" size="2"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <img src="nox.gif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font face="times new roman"><b>Non-accelerated Filer</b></font><font face="times new roman" size="2"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<img src="nox.gif"></font></div>
<p><B>Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements</B>&nbsp;<B>included in this filing:</B>&nbsp;</p>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <tr>
    <td width="213" valign="top"><p align="center"><b>U.S.</b><b> GAAP </b><b><font face="times new roman" size="2"><img src="x.gif"></font>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </b></p></td>
    <td width="213" valign="top"><p align="center"><b>International    Financial Reporting Standards as issued by the International Accounting    Standards Board </b><font face="times new roman" size="2"><img src="nox.gif"></font></p></td>
    <td width="213" valign="top"><p align="center"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other </b><font face="times new roman" size="2"><img src="nox.gif"></font></p></td>
  </tr>
</table>
<p><B>If &#147;Other&#148; has been checked in response to the previous question, indicate by check mark which financial</B>&nbsp;<B>statement item the registrant has elected to follow:</B>&nbsp;</p>
<div align=center><b><font face="times new roman">Item 17</font></b><font face="times new roman" size="2">&nbsp;&nbsp;<img src="nox.gif"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><b><font face="times new roman">Item 18</font></b><font face="times new roman" size="2">&nbsp;&nbsp;<img src="nox.gif"> <br>
</font></div>
<p><B>If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in</B>&nbsp;<B>Rule 12b-2 of the Exchange Act).</B>&nbsp;</p>
<div align=center><b><font face="times new roman">Yes</font></b><font face="times new roman" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<img src="nox.gif"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><b><font face="times new roman">No</font></b><font face="times new roman" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <img src="x.gif"></font></div>


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<H5 align="left" style="page-break-before:always"></H5>
<p><A name="page_x"></A></p>
<p align="center"><b>EXPLANATORY NOTE</b></p>
<p align="justify">We are amending our Annual Report on Form 20-F for the year ended December 31, 2008, or the Annual Report, to include certain information, requested by the Staff of the Securities and Exchange Commission, or the SEC, during their review of our Annual Report, regarding:&nbsp;</p>
<ul>
  <li>discussion and analysis of our gross profit and results of operation in connection with our mining segment;</li>
  <li>trend information;</li>
  <li>sensitivity analysis in connection with certain derivatives;</li>
  <li>controls regarding financial reporting of overseas subsidiaries and measures adopted to remediate related material weaknesses; and</li>
  <li>accounting policies and data in connection with our steel segment revenue, mining assets, inventory, results from foreign exchange variations and accrual of contingencies in connection with tax disputes.</li>
</ul>
<p>As a result of the SEC review process we amended our disclosure in this Annual Report in connection with the following items:&nbsp;</p>
<ul>
  <li>Item 5A. Operating Results;</li>
  <li>Item 5D. Trend Information;</li>
  <li>Item 11. Quantitative and Qualitative Disclosure About Market Risk;</li>
  <li>Item 15. Controls and Procedures; and</li>
  <li>Item 18. Financial Statements, regarding notes 2(f), 2(p), 10, 12, 13 and 17(a) to our consolidated financial statements</li>
</ul>
<p>We believe these amendments, although helpful to investors, do not affect the CEO and CFO's original conclusions regarding the effectiveness of our disclosure controls and procedures and internal control over financial reporting.&nbsp;</p>
<p>In addition, we have included as exhibits to our  Annual Report copies of the following main agreements comprising the strategic  partnership agreement with a consortium of Japanese and Korean companies, or  Strategic Partnership Agreement, including Itochu Corporation, JFE Steel  Corporation, Nippon Steel Corporation, Sumitomo Metal Industries, Ltd., Kobe  Steel, Ltd., Nishin Steel Co., Ltd., and Posco, or Big Jump, concerning  Nacional Min&#233;rios S.A., or Namisa, one of our subsidiaries:</p>
<ul>
  <li>Share Purchase Agreement, dated October 21, 2008;</li>
  <li>Shareholders Agreement, dated October 21, 2008;</li>
  <li>High Silica ROM Iron Ore Supply Contract, dated October 21, 2008;</li>
  <li>Low Silica ROM Iron Ore Supply Contract, dated October 21, 2008;</li>
  <li>Iron Ore Supply Contract, dated October 21, 2008; and</li>
  <li>Port Operating Services Agreement, dated October 21, 2008.</li>
</ul>
<p>We have submitted to the SEC an application for  confidential treatment of certain portions of the Strategic Partnership  Agreement and are filing a redacted copy of the Strategic Partnership Agreement  as an exhibit to this Annual Report.</p>
<p>No other changes are being made to the Annual Report, as originally filed.  The Annual Report, as amended by this amendment, continues to speak as of the date of its original filing and we have not updated the disclosure as of a later date.&nbsp;</p>
<p>&nbsp;</p>
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<A name="page_i"></A>

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<P align="center">
<B>TABLE OF CONTENTS </B></P>
<table border="0" width="100%" cellspacing="0" cellpadding="0" style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <tr>
    <td></td>
    <td width="13%"></td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;</td>
    <td align="right"><b><a href="#page_Page">Page </a></b></td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left"><a href="#page_x">Explanatory Note</a></td>
    <td align="right"><a href="#page_x">i</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left"><a href="#page_1">Introduction</a></td>
    <td align="right"><a href="#page_1">1</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left"><a href="#page_2">Forward-Looking Statements</a></td>
    <td align="right"><a href="#page_2">2</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left"><a href="#page_2">Presentation of Financial and Other Information</a></td>
    <td align="right"><a href="#page_2">2</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left"><a href="#page_4">Item 1. Identity of Directors, Senior Management and Advisors</a></td>
    <td align="right"><a href="#page_4">4</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left"><a href="#page_4">Item 2. Offer Statistics and Expected Timetable</a></td>
    <td align="right"><a href="#page_4">4</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left"><a href="#page_4">Item 3. Key Information</a></td>
    <td align="right"><a href="#page_4">4</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_4"> 3A. Selected Financial Data</a></td>
    <td align="right"><a href="#page_4">4</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_6"> 3B. Capitalization and Indebtedness</a></td>
    <td align="right"><a href="#page_6">6</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_6"> 3C. Reasons for the Offer and Use of Proceeds</a></td>
    <td align="right"><a href="#page_6">6</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_6"> 3D. Risk Factors </a>&nbsp;</td>
    <td align="right"><a href="#page_6">6</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left"><a href="#page_15">Item 4. Information on the Company</a></td>
    <td align="right"><a href="#page_15">15</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_15"> 4A. History and Development of the Company</a></td>
    <td align="right"><a href="#page_15">15</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_19"> 4B. Business Overview</a></td>
    <td align="right"><a href="#page_19">20</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_47"> 4C. Organizational Structure</a></td>
    <td align="right"><a href="#page_47">48</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_47">4D.&nbsp;Property, Plant and Equipment</a></td>
    <td align="right"><a href="#page_47">48</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left"><a href="#page_54">Item 4A. Unresolved Staff Comments</a></td>
    <td align="right"><a href="#page_54">55</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left"><a href="#page_54">Item 5.&nbsp;Operating and Financial Review and Prospects</a></td>
    <td align="right"><a href="#page_54">55</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_55"> 5A. Operating Results</a></td>
    <td align="right"><a href="#page_55">55</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_79">5B.&nbsp;Liquidity and Capital Resources</a></td>
    <td align="right"><a href="#page_79">79</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_82">5C.&nbsp;Research and Development, Patents and Licenses, etc.</a></td>
    <td align="right"><a href="#page_82">82</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_82"> 5D. Trend Information </a></td>
    <td align="right"><a href="#page_82">82</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_82">5E.&nbsp;Off-Balance Sheet Arrangements</a></td>
    <td align="right"><a href="#page_82">82</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_85">5F.&nbsp;Tabular Disclosure of Contractual Obligations</a></td>
    <td align="right"><a href="#page_85">85</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_85"> 5G. Safe Harbor </a></td>
    <td align="right"><a href="#page_85">85</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left"><a href="#page_85">Item 6.&nbsp;Directors, Senior Management and Employees</a></td>
    <td align="right"><a href="#page_85">85</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_85">6A.&nbsp;Directors and Senior Management</a></td>
    <td align="right"><a href="#page_85">85</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_88"> 6B. Compensation </a></td>
    <td align="right"><a href="#page_88">88</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_88"> 6C. Board Practices </a></td>
    <td align="right"><a href="#page_88">88</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_88"> 6D. Employees </a></td>
    <td align="right"><a href="#page_88">88</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_89"> 6E. Share Ownership </a></td>
    <td align="right"><a href="#page_89">89</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left"><a href="#page_89">Item 7.&nbsp;Major Shareholders and Related Party Transactions</a></td>
    <td align="right"><a href="#page_89">89</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_89"> 7A. Major Shareholders </a></td>
    <td align="right"><a href="#page_89">89</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_89">7B.&nbsp;Related Party Transactions</a></td>
    <td align="right"><a href="#page_89">89</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left"><a href="#page_90">Item 8.&nbsp;Financial Information</a></td>
    <td align="right"><a href="#page_90">90</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_90">8A.&nbsp;Consolidated Statements and Other Financial Information</a></td>
    <td align="right"><a href="#page_90">90</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_94"> 8B. Significant Changes </a></td>
    <td align="right"><a href="#page_94">94</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left"><a href="#page_94">Item 9.&nbsp;The Offer and Listing</a></td>
    <td align="right"><a href="#page_94">94</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_94">&nbsp; 9A.&nbsp;Offer and Listing Details</a></td>
    <td align="right"><a href="#page_94">94</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_96">9B.&nbsp;Plan of Distribution</a></td>
    <td align="right"><a href="#page_96">96</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_96"> 9C. Markets </a></td>
    <td align="right"><a href="#page_96">96</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_98"> 9D. Selling Shareholders </a></td>
    <td align="right"><a href="#page_98">98</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_98"> 9E. Dilution </a></td>
    <td align="right"><a href="#page_98">98</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_98">9F.&nbsp;Expenses of the Issue</a></td>
    <td align="right"><a href="#page_98">98</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left"><a href="#page_98">Item 10. Additional Information </a></td>
    <td align="right"><a href="#page_98">98</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_98"> 10A. Share Capital </a></td>
    <td align="right"><a href="#page_98">98</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_98"> 10B. Memorandum and Articles of Association </a></td>
    <td align="right"><a href="#page_98">98</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_101"> 10C. Material Contracts</a></td>
    <td align="right"><a href="#page_101">101</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_102"> 10D. Exchange Controls</a></td>
    <td align="right"><a href="#page_102">102</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_103"> 10E. Taxation</a></td>
    <td align="right"><a href="#page_103">103</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_110"> 10F. Dividends and Paying Agents </a></td>
    <td align="right"><a href="#page_110">110</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_110">10G.&nbsp;Statement by Experts</a></td>
    <td align="right"><a href="#page_110">110</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_110">10H.&nbsp;Documents on Display</a></td>
    <td align="right"><a href="#page_110">110</a> &nbsp;</td>
  </tr>
</table>
<BR>
<P align="center">
i </P>

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  <tr>
    <td></td>
    <td width="13%"></td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_110"> 10I. Subsidiary Information </a></td>
    <td align="right"><a href="#page_110">110</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left"><a href="#page_111">Item 11.&nbsp;Quantitative and Qualitative Disclosures About Market Risk</a></td>
    <td align="right"><a href="#page_111">111</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left"><a href="#page_115">Item 12.&nbsp;Description of Securities Other Than Equity Securities</a></td>
    <td align="right"><a href="#page_115">115</a> <a href="#page_115">&nbsp;</a></td>
  </tr>
  <tr valign="bottom">
    <td align="left"><a href="#page_115">Item 13.&nbsp;Defaults, Dividend Arrearages and Delinquencies</a></td>
    <td align="right"><a href="#page_115">115</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left"><a href="#page_116">Item 14.&nbsp;Material Modification to the Rights of Security Holders and Use of Proceeds</a></td>
    <td align="right"><a href="#page_116">116</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left"><a href="#page_116">Item 15.&nbsp;Controls and Procedures</a></td>
    <td align="right"><a href="#page_116">116</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left"><a href="#page_116">Item 16.&nbsp;[Reserved]</a></td>
    <td align="right"><a href="#page_116">116</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_116">16A.&nbsp;Audit Committee Financial Expert</a></td>
    <td align="right"><a href="#page_116">116</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_116">16B.&nbsp;Code of Ethics</a></td>
    <td align="right"><a href="#page_116">116</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_116">16C.&nbsp;Principal Accountant Fees and Services</a></td>
    <td align="right"><a href="#page_116">116</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_117">16D.&nbsp;Exemptions from the Listing Standards for Audit Committees</a></td>
    <td align="right"><a href="#page_117">117</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_117">16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers </a></td>
    <td align="right"><a href="#page_117">117</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_118">16F. Change in Registrant&rsquo;s Certifying Accountant </a></td>
    <td align="right"><a href="#page_118">118</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#page_118">16G. Corporate Governance </a></td>
    <td align="right"><a href="#page_118">118</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left"><a href="#page_120">Item 17.&nbsp;Financial Statements</a></td>
    <td align="right"><a href="#page_120">120</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left"><a href="#page_121">Item 18.&nbsp;Financial Statements</a></td>
    <td align="right"><a href="#page_121">121</a> &nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left"><a href="#page_121">Item 19.&nbsp;Exhibits</a></td>
    <td align="right"><a href="#page_129">121</a> &nbsp;</td>
  </tr>
</table>
<BR>
<P align="center">
ii </P>

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<P align="center">
<B>INTRODUCTION </B></P>
<P>
Unless otherwise specified, all references in this annual report to: </P>
<UL>
<LI>
&#147;we,&#148; &#147;us,&#148; &#147;our&#148; or &#147;CSN&#148; in this annual report are to Companhia Sider&uacute;rgica Nacional and its consolidated subsidiaries;<br>
<br>
</LI>
<LI>
&#147;parent company&#148; is to Companhia Sider&uacute;rgica Nacional.<br>
<br>
</LI>
<LI>
&#147;Brazilian government&#148; are to the federal government of the Federative Republic of Brazil;<br>
<br>
</LI>
<LI>
&#147;<I>real</I>,&#148; &#147;<I>reais</I>&#148; or &#147;R&#36;&#148; are to Brazilian <I>reais</I>, the official currency of Brazil;<br>
<br>
</LI>
<LI>
&#147;U.S. dollars,&#148; &#147;&#36;,&#148; &#147;US&#36;&#148; or &#147;USD&#148; are to United States dollars;<br>
<br>
</LI>
<LI>
&#147;billions&#148; means thousands of millions, &#147;km&#148; means kilometers, &#147;m&#148; means meters, &#147;tons&#148; means metric tons,  and &#147;MW&#148; means megawatts;<br>
<br>
</LI>
<LI>
&#147;TEUs&#148; means twenty-foot equivalent units;<br>
<br>
</LI>
<LI>
&#147;consolidated financial statements&#148; are to the consolidated financial statements of Companhia Sider&uacute;rgica Nacional and its consolidated subsidiaries as of December 31, 2007 and 2008 and, for the years ended December 31, 2006, 2007
and 2008, together with the corresponding Report of Independent Registered Public Accounting Firms;<br>
<br>
</LI>
<LI>
&#147;ADSs&#148; are to CSN&#146;s American Depositary Shares and &#147;ADRs&#148; are to CSN&#146;s American Depositary Receipts; and<br>
<br>
</LI>
<LI>
&#147;Brazil&#148; is to the Federative Republic of Brazil.</LI>
</UL>

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<P align="center">
<B>FORWARD-LOOKING STATEMENTS </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This annual report includes forward-looking statements, within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the U.S. Securities Exchange Act of
1934, as amended, or the Exchange Act, principally under the captions &#147;Item 3. Key Information,&#148; &#147;Item 4. Information on the Company,&#148; &#147;Item 5. Operating and Financial Review and Prospects&#148; and &#147;Item 11.
Quantitative and Qualitative Disclosures About Market Risk.&#148; We have based these forward-looking statements largely on our current expectations and projections about future events, industry and financial trends affecting our business. Many
important factors, in addition to those discussed elsewhere in this annual report, could cause our actual results to differ substantially from those anticipated in our forward-looking statements, including, among other things: </P>
<UL>
<LI>
general economic, political and business conditions in Brazil and abroad;<br>
<br>
</LI>
<LI>
the effects of the global financial markets and economic crisis;<br>
<br>
</LI>
<LI>
changes in competitive conditions and in the general level of demand and supply for our products;<br>
<br>
</LI>
<LI>
management&#146;s expectations and estimates concerning our future financial performance and financing plans;<br>
<br>
</LI>
<LI>
our level of debt;<br>
<br>
</LI>
<LI>
availability and price of raw materials;<br>
<br>
</LI>
<LI>
changes in international trade or international trade regulations;<br>
<br>
</LI>
<LI>
protectionist measures imposed by Brazil and other countries;<br>
<br>
</LI>
<LI>
anticipated trends in our industry;<br>
<br>
</LI>
<LI>
our capital expenditure plans;<br>
<br>
</LI>
<LI>
inflation, interest rate levels and fluctuations in foreign exchange rates;<br>
<br>
</LI>
<LI>
our ability to develop and deliver our products on a timely basis;<br>
<br>
</LI>
<LI>
electricity and natural gas shortages and government responses to them;<br>
<br>
</LI>
<LI>
existing and future governmental regulation; and<br>
<br>
</LI>
<LI>
other risk factors as set forth under &#147;Item 3D. Risk Factors.&#148;</LI>
</UL>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The words &#147;believe,&#148; &#147;may,&#148; &#147;will,&#148; &#147;aim,&#148; &#147;estimate,&#148; &#147;forecast,&#148; &#147;plan,&#148; &#147;continue,&#148; &#147;anticipate,&#148; &#147;intend,&#148;
&#147;expect&#148; and similar words are intended to identify forward-looking statements. Forward-looking statements speak only as of the date they were made, and we undertake no obligation to publicly update or to revise any forward-looking
statements after we distribute this annual report because of new information, future events or other factors. In light of the risks and uncertainties described above, the forward-looking events and circumstances discussed in this annual report might
not occur and are not an indication of future performance. As a result of various factors, such as those risks described in &#147;Item 3D. Risk Factors,&#148; undue reliance should not be placed on these forward-looking statements. </P>
<P>
<B>PRESENTATION OF FINANCIAL AND OTHER INFORMATION </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our consolidated financial statements as of December 31, 2007 and 2008 and for each of the years ended December 31, 2006, 2007 and 2008 contained in &#147;Item 18. Financial Statements&#148; have been presented in U.S.
dollars and prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP. See Note 2(a) to our consolidated financial statements. For certain purposes, such as providing reports
to our Brazilian shareholders, filing financial statements with the Brazilian Securities Commission (<I>Comiss&atilde;o de Valores Mobili&aacute;rios</I>), or CVM, and determining dividend payments and other distributions and tax liabilities in
Brazil, we have prepared and will continue to be required to prepare financial statements in accordance with the accounting principles required by Brazilian laws No. 6,404, dated December 15, 1976, as amended, and No. 11,638 dated December 28, 2007,
as amended, or the Brazilian Corporate Law, and the rules and regulations of the CVM, or Brazilian GAAP, which differ in certain significant respects from U.S. GAAP. </P>
<P align="center">
2 </P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Because we operate in an industry that uses the U.S. dollar as its currency of reference, our management believes that it is appropriate to present our U.S. GAAP financial statements in U.S. dollars in our filings with
the U.S. Securities and Exchange Commission, or SEC. Accordingly, as permitted by the rules of the SEC, we have adopted the U.S. dollar as our reporting currency for our U.S. GAAP financial statements contained in our annual reports that we file
with the SEC. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As described more fully in Note 2(a) to our consolidated financial statements, the U.S. dollar amounts as of the dates and for the periods presented in our consolidated financial statements have been translated from the
<I>real</I> amounts in accordance with the criteria set forth in the U.S. Financial Accounting Standards Board&#146;s Statement of Financial Accounting Standards No. 52, &#147;Foreign Currency Translation,&#148; at the period-end exchange rate (for
balance sheet items) or the average exchange rate prevailing during the period (for income statement items). In this annual report, we refer to a Statement of Financial Accounting Standards issued by the U.S. Financial Accounting Standards Board as
an &#147;SFAS.&#148; </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless the context otherwise indicates: </P>
<ul>
  <li>  historical data contained in this annual report that were not derived from our consolidated financial statements have been translated from <I>reais </I>on a basis similar to that used in our consolidated financial statements for the same
    periods or as of the same dates, except investment amounts that have been translated at the exchange rate in effect on the date the investment was made.<br>
    <br>
  </li>
  <li>  forward-looking statements have been translated from <I>reais </I>at the exchange rate in effect at the time of the most recently budgeted amounts. We may not have adjusted all of the budgeted amounts to reflect all factors that could affect
    them. In addition, exceptionally we may have translated budgeted amount based on the exchange rate in effect on the date of the action, operation or document.</li>
</ul>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Some figures included in this annual report have been subject to rounding adjustments.  Accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation of the figures which precede them. </P>
<P>
<B>Changes on Disclosure of Financial Statements </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our consolidated financial statements have been prepared in accordance with U.S. GAAP. For certain purposes, such as providing reports to our Brazilian shareholders, filing financial statements with the CVM and
determining dividend payments and other distributions and tax liabilities in Brazil, we have prepared and will continue to be required to prepare financial statements in accordance with Brazilian GAAP. Our financial statements prepared in accordance
with Brazilian GAAP are not adjusted to account for the effects of inflation. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On July 13, 2007, the CVM issued CVM Rule No. 457 to require listed companies to publish their consolidated financial statements in accordance with International Financial Reporting Standards, or IFRS, starting with the
year ending December 31, 2010. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December 28, 2007, Law No. 11,638 was enacted and amended numerous provisions of Brazilian Corporate Law relating to accounting principles and authority to issue accounting standards. Law No. 11,638 sought to enable
greater convergence between Brazilian GAAP and IFRS. To promote convergence, Law No. 11,638 modified certain accounting principles of Brazilian Corporate Law and mandated the CVM to issue accounting rules conforming to the accounting standards
adopted in international markets. Additionally, the statute acknowledged a role in the setting of accounting standards for the Committee for Accounting Rules (<I>Comit&ecirc; de Pronunciamentos Cont&aacute;beis</I>), or CPC, which is a committee of
officials from the S&atilde;o Paulo Stock Exchange (<I>BM&amp;FBovespa S.A.&#150; Bolsa de Valores, Mercadorias e Futuros</I>), or the BOVESPA, industry representatives and academic bodies that has issued accounting guidance and pursued the
improvement of accounting standards in Brazil. Law No. 11,638
permits the CVM and the Brazilian Central Bank (<I>Banco Central do Brasil</I>), or the Central Bank,<I> </I>to rely on the accounting standards issued by the CPC in establishing accounting principles for regulated entities. </P>
<P align="center">
3 </P>

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<P align="center"><B>PART I </B></P>
<P>
<B>Item 1. Identity of Directors, Senior Management and Advisors </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable. </P>
<P>
<B>Item 2. Offer Statistics and Expected Timetable </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable. </P>
<P>
<B>Item 3. Key Information</B></P>
<P>
<B>3A. Selected Financial Data</B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table presents our selected financial data as of the dates and for each of the years indicated, prepared in accordance with U.S. GAAP. Our U.S. GAAP consolidated financial statements as of December 31,
2007 and 2008 and for each of the years in the three-year period ended December 31, 2008 appear elsewhere herein, together with the reports of our Independent Registered Public Accounting Firms, Deloitte Touche Tohmatsu Auditores Independentes, and
KPMG Auditores Independentes, for the periods noted in their reports. The selected financial information as of December 31, 2004, 2005 and 2006 and for each of the years in the two-year period ended December 31, 2005 have been derived from our U.S.
GAAP consolidated financial statements in U.S. dollars, not included in this annual report. The selected financial data below should be read in conjunction with &#147;Item 5. Operating and Financial Review and Prospects.&#148;</P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD width=40%></TD>
	<TD width=2%></TD>
	<TD width=10%></TD>
	<TD width=2%></TD>
	<TD width=10%></TD>
	<TD width=2%></TD>
	<TD width=10%></TD>
	<TD width=2%></TD>
	<TD width=10%></TD>
	<TD width=2%></TD>
	<TD width=10%></TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD colspan="9" align=center> <B>Year Ended December 31,</B>&nbsp;</TD>
  </TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD colspan="9" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
<TR valign="bottom">
	<TD align=left><B>Income Statement Data:</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>2004</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>2005</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>2006</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>2007</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>2008</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center"></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center"></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center"></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center"></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD colspan="9" align=center><I>(in millions of US&#36;, except per share data)</I></TD>
  </TR>
<TR valign="bottom">
	<TD align=left><B>Operating revenues</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Domestic sales&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2,895&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>3,449&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>3,550&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>5,283&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>7,377&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Export sales&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,008&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,224&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,263&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,695&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,830&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B>Total</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>3,903</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>4,673</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>4,813</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>6,978</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>9,207</B>&nbsp;</TD></TR>
<TR>
	<TD colspan=11>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>Deductions from operating revenues</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Sales taxes&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>735&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>829&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>899&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,305&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,835&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Discounts, returns and allowances&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>84&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>39&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>68&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>156&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>185&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>Net operating revenues</B><SUP>(1)</SUP></TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>3,084</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>3,805</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>3,846</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>5,517</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>7,187</B>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Cost of products sold&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,407&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,837&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2,102&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>3,076&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>3,576&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>Gross profit</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>1,677</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>1,968</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>1,744</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>2,441</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>3,611</B>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>Operating expenses</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Selling&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>156&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>186&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>167&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>310&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>412&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;General and administrative&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>109&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>108&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>148&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>185&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>219&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Other income (expense)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>50&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>28&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>149&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>85&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>136&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B>Total</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>315</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>322</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>464</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>580</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>767</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
	<TD colspan=11>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>Operating income</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>1,362</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>1,646</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>1,280</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>1,861</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>2,844</B>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>Non-operating income (expenses), net</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Financial income (expenses), net&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>(510)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>(550)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>(533)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>(219)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>(380)</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Foreign exchange and monetary gain (loss), net&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>153&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>183&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>218&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>438&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>(1,265)</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Gain on dilution of interest in subsidiary&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>-&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>-&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>-&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>-&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,667&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Other&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>(6)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>3&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>22&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>81&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>75&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B>Total</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>(363)</B></TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>(364)</B></TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>(293)</B></TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>300</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>97</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
	<TD colspan=11>&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left><B>Income before income taxes and equity in</B>&nbsp;<B>results of affiliated companies</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>999</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>1,282</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>987</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>2,161</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>2,941</B>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>Income taxes</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Current&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>(289)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>(458)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>(198)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>(619)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>(615)</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Deferred&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>(2)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>31&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>(98)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>85&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>201&nbsp;</TD></TR>
</TABLE>
<BR>
<P align="center">
4 </P>

<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_5"></A><p align=right><a href="#topdraft">Table of Contents</a></p>

<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD width=40%></TD>
	<TD width=2%></TD>
	<TD width=10%></TD>
	<TD width=2%></TD>
	<TD width=10%></TD>
	<TD width=2%></TD>
	<TD width=10%></TD>
	<TD width=2%></TD>
	<TD width=10%></TD>
	<TD width=2%></TD>
	<TD width=10%></TD></TR>
<TR valign="bottom">
	<TD><B>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Total</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>(291)</B></TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>(427)</B></TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>(296)</B></TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>(534)</B></TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>(414)</B></TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
	<TD colspan=11>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Equity in results of affiliated companies&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>51&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>47&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>58&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>76&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>127&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>Net income</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>759</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>902</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>749</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>1,703</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>2,654</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
	<TD colspan=11>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Basic earnings per common share&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0.89&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1.11&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0.97&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2.21&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>3.46&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>Weighted average number of common shares&nbsp;outstanding (in thousands)<SUP>(2)</SUP></TD>
	<TD>&nbsp;</TD>
	<TD align=right>850,428&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>810,825&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>772,302&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>769,749&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>767,033&nbsp;</TD></TR>
<TR>
	<TD colspan=11>&nbsp;</TD></TR>
<TR>
	<TD colspan=11>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD colspan="9" align=center><B>As of December 31,</B>&nbsp;</TD>
  </TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD colspan="9" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
<TR valign="bottom">
	<TD align=left><B>Balance Sheet Data:</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>2004</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>2005</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>2006</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>2007</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
  <TD align=center><B>2008</B>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center"></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center"></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center"></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center"></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD colspan="9" align=center><I>(In millions of US&#36;)</I></TD>
  </TR>
<TR>
	<TD colspan=11>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Current assets&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2,907&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>3,330&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>3,962&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>4,665&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>7,307&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Property, plant and equipment, net&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2,143&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2,547&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>3,211&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>4,824&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>3,543&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>Investments in affiliated companies and other&nbsp;investments (including goodwill)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>233&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>312&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>375&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>565&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2,715&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Other assets&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>874&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>968&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,000&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2,011&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2,144&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>Total assets</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>6,157</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>7,157</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>8,548</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>12,065</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>15,709</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
	<TD colspan=11>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Current liabilities&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,216&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,398&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,678&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2,865&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>3,813&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Long-term liabilities<SUP>(3)</SUP></TD>
	<TD>&nbsp;</TD>
	<TD align=right>3,615&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>4,750&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>5,823&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>6,512&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>8,580&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Stockholders&#146; equity&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,326&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,009&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,047&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2,688&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>3,316&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>Total liabilities and stockholders&#146; equity</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>6,157</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>7,157</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>8,548</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>12,065</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>15,709</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
	<TD colspan=11>&nbsp;</TD></TR>
<TR>
	<TD colspan=11>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD colspan="9" align=center><B>As of and for the year ended December 31,</B>&nbsp;</TD>
  </TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD colspan="9" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
<TR valign="bottom">
	<TD align=left><B>Other Data:</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>2004</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>2005</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>2006</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>2007</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>2008</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center"></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center"></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center"></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center"></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD colspan=9 align=center><I>(In millions of US&#36;, except per share data and where otherwise stated)</I></TD></TR>
<TR>
	<TD colspan=11>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Cash flows from operating activities&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>354&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,757&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>919&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,264&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2,067&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Cash flows used in investing activities&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>(365)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>(593)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>(839)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>(1,091)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>(1,292)</TD></TR>
<TR valign="bottom">
	<TD align=left>Cash flows from (used in) financing activities&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>(380)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>(996)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>(263)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>(122)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,867&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Common shares outstanding (in thousands)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>830,679&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>774,546&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>772,240&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>769,470&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>758,669&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Common stock&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2,447&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2,447&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2,447&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2,447&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2,447&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>Dividends declared and interest on stockholders&#146;&nbsp;equity<SUP>(4)</SUP></TD>
	<TD>&nbsp;</TD>
	<TD align=right>253&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>969&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>914&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>550&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,414&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>Dividends declared and interest on stockholders&#146;&nbsp;equity per common share<SUP>(2)(4)</SUP></TD>
	<TD>&nbsp;</TD>
	<TD align=right>0.30&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1.25&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1.18&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0.71&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1.86&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>Dividends declared and interest on stockholders&#146;&nbsp;equity (in millions of <I>reais</I>)<SUP>(4)</SUP></TD>
	<TD>&nbsp;</TD>
	<TD align=right>671&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2,268&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,954&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,039&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2,755&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>Dividends declared and interest on stockholders&#146;&nbsp;equity per common share (in <I>reais</I>)<SUP>(2)(4)</SUP></TD>
	<TD>&nbsp;</TD>
	<TD align=right>0.81&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2.93&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2.53&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1.35&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>3.63&nbsp;</TD></TR>
</TABLE>
<BR>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD width="3%" valign=top nowrap>
(1)&nbsp;</TD>
	<TD>
      <div align="justify">Net operating revenues consist of operating revenues minus sales taxes, discounts, returns and allowances.	</div></TD>
</TR>
<TR>
	<TD width="3%" valign=top nowrap>
(2)&nbsp;</TD>
	<TD>
      <div align="justify">Takes into account the one-for-three stock split occurred in January 2008 whereby each common share of our capital stock on December 31, 2007 became represented by three common shares. See &#147;Item 10B. Memorandum and Articles of
    Association.&#148;	</div></TD>
</TR>
<TR>
	<TD width="3%" valign=top nowrap>
(3)&nbsp;</TD>
	<TD>
      <div align="justify">Excluding the current portion of long-term debt.	</div></TD>
</TR>
<TR>
	<TD width="3%" valign=top nowrap>
(4)&nbsp;</TD>
	<TD>
      <div align="justify">Amounts consist of dividends declared and accrued interest on stockholders&#146; equity during the year. For a discussion of our dividend policy and dividend and interest payments made in 2008, see &#147;Item 8A. Consolidated Statements and Other
    Financial Information&#151;Dividend Policy.&#148;	</div></TD>
</TR>
</TABLE>
<P>
<B>Exchange Rates </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Brazilian foreign exchange system allows the purchase and sale of foreign currency and the international transfer of reais by any person or legal entity, regardless of the amount, subject to certain regulatory
procedures. The Brazilian currency has during the last decades experienced frequent and substantial variations in relation to the U.S. dollar and other foreign currencies. </P>
<P align="center">
5 </P>

<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_6"></A><p align=right><a href="#topdraft">Table of Contents</a></p>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Between 2000 and 2002, the <I>real</I> depreciated significantly against the U.S. dollar, reaching an exchange rate of R&#36;3.53 per US&#36;1.00 at the end of 2002. Between 2003 and mid-2008, the <I>real</I> appreciated significantly against the U.S. dollar due to the stabilization of the macroeconomic environment and a strong increase in foreign investment in Brazil, with the exchange rate reaching R&#36;1.56 per US&#36;1.00 in August 2008. In the
context of the crisis in the global financial markets since mid-2008, the <I>real </I>depreciated 31.9% against the U.S. dollar over the year 2008, reaching R&#36;2.34 per US&#36;1.00 on December 31, 2008. On April 30, 2009, the exchange rate was
R&#36;2.18 per US&#36;1.00. The Central Bank has intervened occasionally to control instability in foreign exchange rates. We cannot predict whether the Central Bank or the Brazilian government will continue to allow the <I>real</I> to float freely
or will intervene in the exchange rate market through a currency band system or otherwise. The <I>real</I> may depreciate or appreciate against the U.S. dollar substantially. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following tables present the selling rate, expressed in <I>reais</I> per U.S. dollar (R&#36;/US&#36;), for the periods indicated. </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD width=40%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD></TR>
<TR valign="bottom" style="font-size: 1px">
  <TD>&nbsp;</TD>
  <TD></TD>
  <TD colspan="7" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>Low</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>High</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>Average (1)</B></TD>
	<TD align="center">&nbsp;</TD>
  <TD align=center><B>Period-end</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>Year ended</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>December 31, 2004&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2.654&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>3.205&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>2.917&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right>2.654&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>December 31, 2005&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2.163&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>2.762&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>2.413&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right>2.341&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>December 31, 2006&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2.059&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>2.371&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>2.177&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right>2.138&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>December 31, 2007&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1.733&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>2.156&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>1.948&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right>1.771&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>December 31, 2008&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1.559&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>2.500&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>1.837&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right>2.337&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
	<TD colspan=9>&nbsp;</TD></TR>
<TR>
	<TD colspan=9>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
  <TD>&nbsp;</TD>
  <TD></TD>
  <TD colspan="7" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>Low</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>High</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center> &nbsp; &nbsp;<B>Average</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>Period-end</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>Month ended</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>December 31, 2008&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2.337&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>2.500&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right> &nbsp; &nbsp; &nbsp;2.394&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>2.337&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>January 31, 2009&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2.189&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>2.380&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right> &nbsp; &nbsp; &nbsp;2.307&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>2.136&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>February 28, 2009&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2.245&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>2.392&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right> &nbsp; &nbsp; &nbsp;2.313&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>2.378&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>March 31, 2009&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2.238&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>2.422&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right> &nbsp; &nbsp; &nbsp;2.314&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>2.315&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>April 30, 2009&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2.170&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>2.290&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right> &nbsp; &nbsp; &nbsp;2.206&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>2.178&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>May 31, 2009&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1.973&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>2.148&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right> &nbsp; &nbsp; &nbsp;2.061&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>1.973&nbsp;</TD></TR>
</TABLE>
<br>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <TR>
    <TD colspan="2" valign=top nowrap>_____________</TD>
  </TR>
  <TR>
    <TD colspan="2" valign=top nowrap>Source: Central Bank.&nbsp;</TD>
  </TR>
  <TR>
    <TD width="3%" valign=top nowrap> (1)&nbsp;</TD>
    <TD><div align="justify">Represents the daily average of the close exchange rates during the period.&nbsp;</div></TD>
  </TR>
</TABLE>
<BR>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will pay any cash dividends and make any other cash distributions with respect to our common shares in Brazilian currency. Accordingly, exchange rate fluctuations may affect the U.S. dollar amounts received by the
holders of ADSs on conversion by the depositary of such distributions into U.S. dollars for payment to holders of ADSs. Fluctuations in the exchange rate between the <I>real</I> and the U.S. dollar may also affect the U.S. dollar equivalent of the
<I>real</I> price of our common shares on the BOVESPA. </P>
<P>
<B>3B. Capitalization and Indebtedness </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable. </P>
<P>
<B>3C. Reasons for the Offer and Use of Proceeds </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable. </P>
<P>
<B>3D. Risk Factors </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>An investment in our ADSs or common shares involves a high degree of risk. You should carefully consider the risks described below before making an investment decision. Our business, financial condition and results
of operations could be materially and adversely affected by any of these risks. The trading price of our ADSs could decline due to any of these risks or other factors, and you may lose all or part of your investment. The risks described below are
those that we currently believe may materially affect us.</I></P>
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<P>
<B>Risks Relating to Brazil </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>The Brazilian government has exercised, and continues to exercise, significant influence over the Brazilian economy. This involvement, as well as, Brazilian political and economic conditions, could adversely
affect our business and the trading prices of our ADSs and common shares. </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Brazilian government frequently intervenes in the Brazilian economy and occasionally makes significant changes in policy and regulations. The Brazilian government&#146;s actions to control inflation and other
policies and regulations have often involved, among other measures, increases in interest rates, changes in tax policies, price controls (such as those imposed on the steel sector prior to privatization), currency devaluations, capital controls and
limits on imports. Our business, financial condition and results of operations may be adversely affected by changes in policy or regulations involving or affecting factors, such as: </P>
<UL>
<LI>
interest rates;<br>
<br>
</LI>
<LI>
exchange controls and restrictions on remittances abroad;<br>
<br>
</LI>
<LI>
currency fluctuations;<br>
<br>
</LI>
<LI>
inflation;<br>
<br>
</LI>
<LI>
price instability;<br>
<br>
</LI>
<LI>
energy shortages and rationing programs;<br>
<br>
</LI>
<LI>
liquidity of domestic capital and lending markets;<br>
<br>
</LI>
<LI>
tax policies and rules; and<br>
<br>
</LI>
<LI>
other political, social and economic developments in or affecting Brazil.</LI>
</UL>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Exchange rate instability may adversely affect our financial condition and results of operations and the market price of our common shares and ADSs. </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Brazilian currency has during the last decades experienced frequent and substantial variations in relation to the U.S. dollar and other foreign currencies. Between 2000 and 2002, the <I>real</I> depreciated
significantly against the U.S. dollar, reaching an exchange rate of R&#36;3.53 per US&#36;1.00 at the end of 2002. Between 2003 and mid-2008, the real appreciated significantly against the U.S. dollar due to the stabilization of the macroeconomic
environment and a strong increase in foreign investment in Brazil, with the exchange rate reaching R&#36;1.56 per US&#36;1.00 in August 2008. In the context of the crisis in the global financial markets since mid-2008, the <I>real</I> depreciated
31.9% against the U.S. dollar over the year 2008 and reached R&#36;2.337 per US&#36;1.00 at year end. On June 26, 2009, the exchange rate was R&#36;1.940 per US&#36;1.00.</P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation of the <I>real</I> against the U.S. dollar could create inflationary pressures in Brazil and cause increases in interest rates, which could negatively affect the growth of the Brazilian economy as a whole
and harm our financial condition and results of operations, may curtail access to foreign financial markets and may prompt government intervention, including recessionary governmental policies. Depreciation of the <I>real</I> against the U.S. dollar
can also, as in the context of the current economic slowdown, lead to decreased consumer spending, deflationary pressures and reduced growth of the economy as a whole. On the other hand, appreciation of the <I>real</I> relative to the U.S. dollar
and other foreign currencies could lead to a deterioration of the Brazilian foreign exchange current accounts, as well as dampen export-driven growth. Depending on the circumstances, either depreciation or appreciation of the <I>real</I> could
materially and adversely affect the growth of the Brazilian economy and our business, financial condition and results of operations.</P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event the <I>real</I> depreciates in relation to the U.S. dollar, the cost in <I>reais</I> of our foreign currency-denominated borrowings and imports of raw materials, particularly coal and coke, will increase.
To the extent that we do not succeed in promptly reinvesting the funds received from such borrowings in dollar-denominated assets,
we are exposed to a mismatch between our foreign currency-denominated expenses and revenues.  On the other hand, if the <I>real </I>appreciates in relation to the U.S. dollar, it will cause <I>real</I>-denominated production costs to increase as a
percentage of total production costs. </P>
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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation of the <I>real</I> may also reduce the U.S. dollar value of distributions and dividends on the ADSs and the U.S. dollar equivalent of the market price of our preferred shares and, as a result, the ADSs. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Government efforts to combat inflation may hinder the growth of the Brazilian economy and could harm our business.</I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Brazil has in the past experienced extremely high rates of inflation and has therefore followed monetary policies that have resulted in one of the highest real interest rates in the world. Between 2004 and 2008, the
base interest rate, or SELIC rate, in Brazil varied between 19.25% and 11.25% per year. Inflation and the Brazilian government&#146;s measures to fight it, principally through the Central Bank, have had and may have significant effects on the
Brazilian economy and our business. Tight monetary policies with high interest rates may restrict Brazil&#146;s growth and the availability of credit. Conversely, more lenient government and Central Bank policies and interest rate decreases may
trigger increases in inflation, and, consequently, growth volatility and the need for sudden and significant interest rate increases, which could negatively affect our business. In addition, we may not be able to adjust the price of our products to
offset the effects of inflation on our cost structure. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Developments and perception of risk in other countries, especially in the United States, China and other emerging market countries, may adversely affect the trading price of Brazilian securities, including our
common shares and ADSs. </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The market value of securities of Brazilian companies is affected to varying degrees by economic and market conditions in other countries, including the United States, China, other Latin American and emerging market
countries. Although economic conditions in these countries may differ significantly from economic conditions in Brazil, investors&#146; reactions to developments in these other countries may have an adverse effect on the market value of securities
of Brazilian issuers. Crisis in other emerging market countries or economic policies of other countries may diminish investor interest in securities of Brazilian issuers, including ours.  This could adversely affect the trading price of our common
shares and/or ADSs, and could also make it more difficult or impossible for us to access the capital markets and finance our operations in the future, on acceptable terms. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The global financial crisis has had significant consequences, including in Brazil, such as stock and credit market volatility, unavailability of credit, higher interest rates, a general slowdown of the world economy,
volatile exchange rates, and inflationary pressure, among others, which have and may continue to, directly or indirectly, materially and adversely affect our operating results, financial position and the price of our common shares and/or ADSs. </P>
<P>
<B>Risks Relating to the Steel Industry and CSN </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>We are exposed to substantial swings in the demand for steel, which has a substantial impact in the prices for our steel products. </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The steel industry is highly cyclical, both in Brazil and abroad. Until 2007, the Brazilian steel industry produced more steel than the domestic economy was able to consume, and was therefore dependent on export
markets. In 2007 and until the third quarter of 2008, there was a significant increase in the demand for steel in the domestic market, which reduced our dependency on export markets and increased domestic prices. The demand for steel products and,
thus, the financial condition and results of operations of companies in the steel industry, including us, are generally affected by macroeconomic fluctuations in the world economy and the economies of steel-producing countries, including trends in
the automotive, construction, home appliances, packaging and distribution industries. In recent years, the price of steel in world markets has been at historically high levels, but in 2009 these prices have been decreasing as a result of lower
domestic demand and the effects of the 2008 worldwide financial crisis. Any material decrease in the demand for steel in domestic or export markets served by us could have a material adverse effect on us. </P>
<P align="center">
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<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>The availability and the price of raw materials that we need to produce steel, particularly coal and coke, may adversely affect our results of operations.</I></B> </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2008, raw material costs accounted for approximately 56.9% of total production costs. Our principal raw materials include iron ore, coal, coke (a portion of which we produce from coal), limestone, dolomite,
manganese, zinc, tin and aluminum. We depend on third parties for some of our raw material requirements. In addition, we import all of the coal required to produce coke and approximately 21.7% of our coke requirements. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2008, there was a steep rise in the cost of a number of commodities essential for steelmaking, specifically coking coal and metallurgical coke. Global developments, particularly the dramatic increase in Chinese and
Indian demand for raw materials used in steel manufacturing, may cause severe shortages and/or substantial price increases in key raw materials and ocean transportation capacity. Our inability to pass those cost increases on to our customers or to
meet our customers&#146; demands because of non-availability of key raw materials may cause a material adverse effect on us. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, any prolonged interruption in the supply of raw materials or energy, or substantial increases in their costs, could also materially and adversely affect us.  These interruptions in the supply of raw
materials or energy may be a result of changes in laws or trade regulations, the availability and cost of transportation, suppliers&#146; allocations to other purchasers, interruptions in production by suppliers or accidents or similar events on
suppliers&#146; premises or along the supply chain. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>We face significant competition, including price competition and competition from other producers, which may adversely affect our profitability and market share. </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The steel industry is highly competitive with respect to price. In the 1990s, the world steel industry was adversely affected by excess worldwide production capacity, reflecting the decreasing demand for steel in
western industrial countries and significant increases in steel production capacity in countries outside the Organization for Economic Development, or OECD. Further, continuous advances in materials sciences and resulting technologies have given
rise to improvements in products such as plastics, aluminum, ceramics and glass that permit them to substitute steel. Due to high start-up costs, the economics of operating a steelworks facility on a continuous basis may encourage mill operators to
maintain high levels of output, even in times of low demand, which increases the pressure on industry profit margins. In addition, downward pressure on steel prices by our competitors may affect our profitability.</P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The steel industry is also highly competitive with respect to product quality and customer service, as well as technological advances that would allow a steel manufacturer to lower its costs of production. In addition,
most markets are served by several suppliers, often from different countries. Competition from foreign steel producers is strong and may increase due to increases in foreign steel installed capacity, appreciation of the <I>real</I> against the U.S.
dollar and the reduction of domestic steel demand in other markets.</P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, many factors influence our competitive position, including efficiency and operating rates, and the availability, quality and cost of raw materials and labor. Over the last two years, China has become one of
the main international steel exporters. If we are unable to remain competitive with China or other producers in the future, we may be materially and adversely affected. </P>
<P>
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Protectionist and other measures adopted by foreign government could adversely affect our export sales.</I></B><B><I> </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In response to the increased production and export of steel by many countries, anti-dumping, countervailing duties and safeguard measures were imposed in the late 1990s and early 2000s by foreign governments
representing the main markets for our exports.  Foreign countries continue to impose restrictions on the exports to certain countries, such as the restrictions on exports of hot-rolled products from Brazil to the United States, Canada and Argentina
and the restrictions on exports of certain chemical substances contained in the steel products exported to the European Union, effective as of January 2009. The imposition of these and other protectionist measures by foreign countries may materially
and adversely affect our export sales. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On the other hand, in response to steel imports to Brazil at subsidized prices, the Brazilian government has recently imposed certain import tariffs in order to protect the domestic steel industry. If the Brazilian
government
were to remove these protection measures, or fail to act against cheap or subsidized steel imports, we could be adversely affected.  </P>
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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Malfunctioning equipment or accidents on our premises, railways or ports may decrease or interrupt production, internal logistics or distribution of our products. We do not have insurance policies to cover losses
and liabilities in connection with operational risks, and may not have sufficient insurance coverage for certain other events. </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The steel production process depends on certain critical equipment, such as blast furnaces, steel converters, and continuous casting machines, internal logistics and distribution channels, such as railways and seaports.
This equipment and infrastructure may be affected in the case of malfunction or damage. In 2006, there was an accident involving the gas cleaning system adjacent to Blast Furnace No. 3 at the Presidente Vargas steelworks, which prevented us from
operating this blast furnace for approximately six months and resulted in losses of approximately US&#36;520 million, all of which was reimbursed by our insurers. Similar or any other significant interruptions in our production process, internal
logistics or distribution channels could materially and adversely affect us. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our insurance policies for losses in connection with operational risks, covering damage to our facilities (including damage to equipment and blockage of port facilities) and profit losses, have expired on February 22,
2009 and we are currently renegotiating new insurance policies. Lack of insurance coverage for operational risks exposes us to potential significant liability in the event of an accident or business interruption, which may materially and adversely
affect us. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Our projects are subject to risks that may result in increased costs or delay or prevent their successful implementation.</I></B> </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are investing to further increase our steel and mining production capacity, as well as our logistics capabilities. Our expansion and projects are subject to a number of risks that may adversely affect our growth
prospects and profitability, including the following: </P>
<UL>
<LI>
We may encounter delays or higher than expected costs in obtaining the necessary equipment or services to build and operate a project.<br>
<br>
</LI>
<LI>
Our efforts to develop projects according to schedule may be hampered by a lack of infrastructure, including a reliable power supply.<br>
<br>
</LI>
<LI>
We may fail to obtain, or experience delays or higher than expected costs in obtaining, the required permits to build a project.<br>
<br>
</LI>
<LI>
Changes in market conditions or regulations may make a project less profitable than expected at the time we initiated work on it.</LI>
</UL>
<P>
 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any one or a combination of factors described above may materially and adversely affect us. </P>
<P>
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The global recession could lead to a significant reduction in our revenues, cash flow and profitability. </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The global economy, in particular global industrial production, is the primary driver of demand for minerals and metals.  Global industrial production has shown a downward trend since the second half of 2008, resulting
in a significant and widespread contraction in demand for minerals and metals.</P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There is uncertainty about the depth and duration of the current global economic downturn and its continuing impact on the demand for minerals and metals, which could have a negative impact on our cash generation
and profitability. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>New or more stringent environmental and health regulations imposed on us may result in increased liabilities and increased capital expenditures. </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our steel making, mining and logistics facilities are subject to a broad range of laws, regulations and permit requirements in Brazil relating mainly to the protection of health and the environment. Brazilian pollution
standards
are expected to continue to change, including new effluent and air emission standards and solid waste-handling regulations. New or more stringent environmental and health standards imposed on us can require us to make increased capital expenditures.
We could be exposed to civil penalties, criminal sanctions and closure orders for non-compliance with these regulations. Waste disposal and emission practices may result in the need for us to clean up or retrofit our facilities at substantial costs
and/or could result in substantial liabilities. Environmental legislation restrictions imposed by foreign markets to which we export our products, may also materially and adversely affect our export sales and us. </P>
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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Our governance and compliance processes may fail to prevent regulatory penalties and reputational harm.</I></B> </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We operate in a global environment, and our activities straddle multiple jurisdictions and complex regulatory frameworks with increased enforcement activities worldwide. Although our governance and compliance processes
include the review of internal control over financial reporting, and other standard control procedures such as internal and external auditing, it may not prevent future breaches of law, accounting or governance standards. We may be subject to
breaches of our Code of Ethics, business conduct protocols and instances of fraudulent behavior and dishonesty by our employees, contractors or other agents. Our failure to comply with applicable laws and other standards could subject us to fines,
loss of operating licenses and reputational harm, which may materially and adversely affect us. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Some of our operations depend on joint ventures, consortia and other forms of cooperation, and our business could be adversely affected if our partners fail to observe their commitments. </I></B> </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We currently operate parts of our business through joint-ventures with other companies. We have established a joint-venture with an Asian consortium at our subsidiary Nacional Min&eacute;rios S.A., or Namisa, to mine
iron ore; a joint-venture with other Brazilian steel and mining companies at MRS Log&iacute;stica S.A., or MRS, to explore railway transportation in the Southeastern region of Brazil; a project with the Brazilian government at Transnordestina
Log&iacute;stica S.A., or Transnordestina, to explore railway transportation in the Northeastern region of Brazil; and a joint-venture with Tractebel at It&aacute; Energ&eacute;tica S.A., or ITASA, to produce electricity. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our forecasts and plans for these joint-ventures and consortia assume that our partners will observe their obligations to make capital contributions, purchase products and, in some cases, provide managerial personnel or
financing. In addition, many of the projects contemplated by our joint-ventures or consortia rely on financing commitments, which contain certain preconditions for each disbursement. If any of our partners fails to observe their commitments or we
fail to comply with all preconditions required under our financing commitments, the affected joint-venture, consortium or other project may not be able to operate in accordance with its business plans, or we may have to increase the level of our
investment to implement these plans. Any of these events may have a material adverse effect on us.<B> </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Particularly with respect to our joint-venture at Namisa, we may be required to reacquire all ownership interest of our Asian partners in Namisa in the event of a dead-lock with respect to a material issue under our
shareholders&#146; agreement. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Interruptions in the supply of natural gas and power transmission grid may adversely affect our business, financial condition and results of operations. </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We require significant amounts of energy, both in the form of natural gas and electricity, to power our plant and equipment. We purchase our natural gas needs through distributors which purchase natural gas from
Petr&oacute;leo Brasileiro S.A. &#150; Petrobras, or Petrobras, (the sole producer and supplier of natural gas in Brazil). Petrobras, in turn, is significantly dependent upon the supply of natural gas from Bolivia. On May 1, 2006, the president of
Bolivia announced the nationalization of the country&#146;s gas reserves. The long-term effects of this measure on the supply of natural gas in Brazil are still uncertain. The events in Bolivia could result in the disruption of the natural gas
supply to Petrobras or an additional increase in the prices of natural gas. Any resulting interruption or reduction in the levels of supply of natural gas by Petrobras or a significant price increase, may negatively affect our production and
production costs and consequently have a material adverse effect on us.</P>
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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Our mineral reserve estimates may materially differ from mineral quantities that we may be able to actually recover; our estimates of mine life may prove inaccurate; and market price fluctuations and changes in
operating and capital costs may render certain ore reserves uneconomical to mine. </I></B> </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our reported ore reserves are estimated quantities of ore and minerals that we have determined can be economically mined and processed under present and anticipated conditions to extract their mineral content. There are
numerous uncertainties inherent in estimating quantities of reserves and in projecting potential future rates of mineral production, including many factors beyond our control. Reserve engineering involves estimating deposits of minerals that cannot
be measured in an exact manner, and the accuracy of any reserve estimate is a function of the quality of available data and engineering and geological interpretation and judgment. As a result, no assurance can be given that the indicated amount of
ore will be recovered or that it will be recovered at the rates we anticipate. Estimates of different engineers may vary, and results of our mining and production subsequent to the date of an estimate may lead to revision of estimates. Reserve
estimates and estimates of mine life may require revision based on actual production experience and other factors. For example, fluctuations in the market prices of minerals and metals, reduced recovery rates or increased operating and capital costs
due to inflation, exchange rates or other factors may render proven and probable reserves uneconomic to exploit and may ultimately result in a restatement of reserves. </P>
<P>
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are subject to risks related to legal and administrative proceedings. </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are involved in numerous legal and administrative proceedings, including tax, labor and civil disputes. While, as of December 31, 2008, we had recorded provisions for some of these proceedings in a total amount of
US&#36;1,687 million and deposited a total amount of US&#36;893 million in court escrow accounts, it is not possible to predict either the outcome of these proceedings or the potential liability we may face due to unfavorable rulings in them. In the
event that a substantial portion of these proceedings or one or more of the proceedings involving a substantial amount are decided against us, and in the event that no provision has been recorded, our results of operations may be materially
adversely affected. In addition, even if sufficient provisions have been recorded, our liquidity may be materially and adversely affected. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Our activities depend on authorizations from regulatory agencies, and changes in regulations could materially and adversely affect us. </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our activities depend on authorizations from and concessions by governmental regulatory agencies of the countries in which we operate. If these laws and regulations change, modifications to our technologies and
operations could be required, and we could be required to make unexpected capital expenditures. The loss of any such authorization or changes in the regulatory framework we operate in may materially and adversely affect us. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>We have experienced labor disputes in the past that have disrupted our operations, and such disputes may recur. </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A substantial number of our employees and some of the employees of our subcontractors are represented by labor unions and are covered by collective bargaining or other labor agreements, which are subject to periodic
renegotiation. Strikes and other labor disruptions at any of our facilities or labor disruptions involving third parties who may provide us with goods or services, have in the past and may in the future materially and adversely affect the operation
of facilities, or the timing of completion and the cost of our projects. </P>
<P>
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are exposed to devaluation of our shares as result of certain equity swap agreements. </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2003, we entered into certain equity swap agreements referenced to our common shares. These agreements were originally entered into with POBT Bank and Trust Limited (an affiliate of Banco Pactual), which later
assigned the agreements to UBS Symmetry Fund, UBS Strategy Fund and Fruhling Fund. In 2008, these agreements were assigned to Goldman Sachs International.  Our current equity swap agreement with Goldman Sachs International will expire on September
10, 2009, unless it is renewed by us. The agreements state that the counterparty must pay us the cash dividends and final price return, if positive, on 29,684,400 CSN ADRs and we must pay the counterparty a rate of USD three-month London Interbank
Offered Rate, or Libor, plus 0.75% per annum on the initial price of this number of ADRs and the final price return, if negative, on this number of ADRs. The rationale for these transactions is that equities historically have yielded higher
long-term returns than fixed-
income securities, hence tending to offset CSN&#146;s long-term debt servicing costs. From September 5 to  December 31, 2008, we recorded a loss in connection with these equity swap  agreements in the amount of US$685 million, which was partially offset by a  gain of US$155 million recorded in connection with an equity swap that expired  on September 5, 2008, for a total loss of US$530 million. However, in the event of a decrease in the trading price of our shares and ADRs, the amount payable by us under these swap agreements may be significant and
materially and adversely affect us. </P>
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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>A significant devaluation of our common shares may cause our pension funds to have an increased deficit of plan assets over pension benefit obligations.</I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are the principal sponsor of Caixa Beneficente dos Empregados da CSN, or CBS, our employee pension plan. As of December 31, 2008, CBS had invested a portion of its portfolio in our common shares and held 4.47% of our
capital stock. As a result, the ability of CBS to honor its pension obligations is subject to fluctuations in the fair value of CBS&#146;s assets, including fluctuations in the trading price of our common shares. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of December 31, 2008, CBS had a deficit of plan assets over pension benefit obligations of US&#36;83.8 million. The unfunded status of CBS is affected by, among other things, fluctuations in the fair value of
CBS&#146;s assets, which totaled US&#36;524.7 million as of December 31, 2008, while CBS&#146; accumulated obligations and projected benefit obligations as of December 31, 2008 were US&#36;608.5 million. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event of a depreciation of our common shares, CBS may worsen its unfunded situation, which could have a material and adverse impact on its ability to fulfill its obligations. In this event, we may have to make
substantial contributions to the fund to meet its pension benefit obligations, which may have a material adverse effect on us. See &#147;Item 6D&#151;Employees&#148; and Note 15 to our consolidated financial statements contained in &#147;Item 18.
Financial Statements.&#148; </P>
<P>
<B>Risks Relating to a Routine SEC Review </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>An ongoing SEC review of our registration statement on Form F-4, filed in connection with a proposed public debt exchange offer, may require us to further amend this annual report. </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are in the process of responding to comments made by the staff of the SEC regarding our registration statement on Form F-4, filed on September 19, 2005. That registration statement was filed in connection with a
proposed public exchange offer of notes originally issued in a non-public transaction. Until our responses to the SEC&#146;s comments are finalized, our capital-raising activities will be limited to the U.S. non-public markets and the markets
outside the United States. See &#147;Item 4A. Unresolved Staff Comments&#148; for further information.</P>
<P>
<B>Risks Relating to our Common Shares and ADSs </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>If holders of ADSs exchange the ADSs for common shares, they risk losing the ability to remit foreign currency abroad and Brazilian tax advantages. </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Brazilian custodian for our common shares has obtained an electronic certificate of registration from the Central Bank permitting it to remit foreign currency abroad for payments of dividends and other distributions
relating to our common shares or upon the disposition of our common shares. If holders of ADSs decide to exchange their ADSs for the underlying common shares, they will be entitled to continue to rely on the custodian&#146;s electronic certificate
of registration for five business days from the date of exchange. Thereafter, such holders of ADSs may not be able to obtain and remit foreign currency abroad upon the disposition of, or distributions relating to, our common shares unless they
obtain their own electronic certificate of registration or register their investment in our common shares pursuant to Resolution No. 2,689, which entitles certain foreign investors to buy and sell securities on the BOVESPA. Holders who do not
qualify under Resolution No. 2,689 will generally be subject to less favorable tax treatment on gains with respect to our common shares. If holders of ADSs attempt to obtain their own electronic certificate of registration, they may incur expenses
or suffer delays in the application process, which could delay their ability to receive dividends or distributions relating to our common shares or delay the return of their capital in a timely manner. In addition, we cannot assure you that the
custodian&#146;s electronic certificate of registration or any certificate of foreign capital registration obtained by a holder of ADSs will not be affected by future legislative or regulatory changes, or that additional restrictions applicable to
such holder, to the disposition of the underlying common shares or to the repatriation of the proceeds from such disposition will not be imposed in the future. </P>
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<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Holders of ADSs may not be able to exercise their voting rights. </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Holder of ADSs may only exercise their voting rights with respect to the underlying common shares in accordance with the provisions of the deposit agreement. Under the deposit agreement, ADS holders must vote by giving
voting instructions to the depositary. Upon receipt of the voting instructions of the ADS holder, the depositary will vote the underlying common shares in accordance with these instructions. Otherwise, ADS holders will not be able to exercise their
right to vote unless they surrender the ADS for cancellation in exchange for our common shares. Pursuant to our bylaws, the first call for a shareholders&#146; meeting must be published at least 15 days in advance of the meeting, the second call
must be published at least eight days in advance of the meeting. When a shareholders&#146; meeting is convened, holders of ADSs may not receive sufficient advance notice to surrender the ADS in exchange for the underlying common shares to allow them
to vote with respect to any specific matter. If we ask for voting instructions, the depositary will notify ADS holders of the upcoming vote and will arrange to deliver the proxy card. We cannot assure that ADS holders will receive the proxy card in
time to ensure that they can instruct the depositary to vote the shares. In addition, the depositary and its agents are not liable for failing to carry out voting instructions or for the manner of carrying out voting instructions. As a result,
holders of ADSs may not be able to exercise their voting rights. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>The relative volatility and illiquidity of the Brazilian securities markets may substantially limit the ability of holders of our common shares or ADSs to sell the common shares underlying the ADSs at the price
and time they desire. </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investing in securities, such as the common shares or the ADSs, of issuers from emerging market countries, including Brazil, involves a higher degree of risk than investing in securities of issuers from more developed
countries. Investments in emerging markets are generally considered to be more speculative in nature, and are subject to certain economic and political risks, such as changes in the regulatory, tax, economic and political environment that may affect
your ability to receive the total or a partial return on your investment. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Brazilian securities markets are substantially smaller, less liquid, more concentrated and more volatile than major securities markets in the United States and other jurisdictions, and are not as highly regulated or
supervised as some of these other markets. The relatively small market capitalization and illiquidity of the Brazilian equity markets may substantially limit the ability of holders of our common shares or ADSs to sell our common shares or the ADSs
at the price and time desired. There is also significantly greater concentration in the Brazilian securities markets than in major securities markets in the United States. See &#147;Item 9C. Markets&#151;Trading on the BOVESPA.&#148; </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The sale of a substantial number of common shares, or the belief that this may occur, could decrease the trading price of our common shares and our ADSs. Holders of our common shares and/or ADSs may not be able to sell
their securities at or above the price they paid for them. </P>
<P>
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Holders of ADSs might be unable to exercise preemptive rights with respect to our common shares. </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Holders of ADSs may not be able to exercise the preemptive rights relating to the common shares underlying their ADSs unless a registration statement under the Securities Act is effective with respect to those rights or
an exemption from the registration requirements of the Securities Act is available. We are not required to file a registration statement with respect to the shares or other securities relating to these preemptive rights and we cannot assure holders
of our ADSs that we will file any such registration statement. Unless we file a registration statement or an exemption from registration applies, holders of our ADSs may receive only the net proceeds from the sale of their preemptive rights by the
depositary or, if the preemptive rights cannot be sold, the rights will be allowed to lapse. </P>
<P>
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Substantial sales of our ADSs could cause the price of our ADSs to decrease significantly.</I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The sale of a substantial number of common shares, or the belief that this may occur, could decrease the trading price of our common shares and our ADSs. Holders of our common shares and/or ADSs may not be able to sell
their securities at or above the price they paid for them. </P>
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<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We entered into certain equity swap agreements with Goldman Sachs International, which are referenced to 29,684,400 of our ADRs and set to expire on September 10, 2009. As a result, if we do not renew these equity swap
agreements and are required to unwind them in a non-organized manner, a substantial amount of our ADSs may be sold in the market simultaneously, which could cause the trading price of our ADSs to decrease significantly. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Similarly, our pension fund CBS invests heavily in our common shares, holding as of December 31, 2008 4.47% of our capital stock. Brazilian governmental authorities are discussing with CBS and other pension funds
regulatory limits on investments by pension funds in the shares of related parties. As a result, CBS may be required to diversify its portfolio, which, if not done in an organized manner, may cause a substantial amount of our common shares to be
sold in the market, negatively affecting the trading price of our common shares.</P>
<P>
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We may be prevented from paying dividends to our shareholders and the holders of ADSs. </I></B> </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At our Annual Shareholders&#146; Meeting of April 30, 2007, our shareholders approved the payment of dividends and interest on shareholders&#146; equity related to the fiscal year 2006 in the total amount of
US&#36;682.1 million, of which US&#36;191.7 million and US&#36;153.5 million were paid on June 30, 2006 and August 8, 2006, respectively, as intermediary dividends, in accordance with the resolutions of our Board of Directors.  The outstanding
balance of US&#36;336.9 million was payable on May 9, 2007, but the payment was temporarily suspended as a result of a federal court order relating to one of our tax contingencies. On September 2007, we obtained a favorable decision from a federal
court, allowing us to pay such outstanding dividends, and payment was made on September 4, 2007. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At our Annual Shareholders&#146; Meeting of April 30, 2009, our shareholders approved the payment of dividends and interest on shareholders&#146; equity relating to 2008, in the total amount of US&#36;868.6 million
(US&#36;738.2 million as dividends and US&#36;130.4 million as interest on shareholders&#146; equity).</P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The total amount of approved dividends include dividends paid in advance on November 27, 2008, in the amount of US&#36;70.6 million, that had already been approved by our Board of Directors on August 12, 2008, and
dividends that had already been approved by our Board of Directors on March 24, 2009 in the amount of US&#36;667.6 million.</P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Soon after the announcement of the payment of such dividends in the amount of US&#36;667.6 million, a court order was issued by a trial state tax court in the State of Rio de Janeiro in connection with tax claims
related to IPI premium credits on exports that we have recorded, in order to block approximately US&#36;354.2 million of our funds. For this reason, the Company paid its shareholders on April 2, 2009 the amount of funds that had not been blocked of
approximately US&#36;313.4 million. We are taking all measures to unblock our funds. Nevertheless, aiming at the preservation of our shareholders&#146; rights, we decided to pay on June 26, 2009, the remaining dividends of approximately US&#36;354.2
million. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The US&#36;130.4 million as interest on shareholders&#146; equity were paid on May 11, 2009. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We cannot assure you that new court orders will not be issued against us to block our funds or to prevent us from paying dividends to our shareholders and holders of ADRs in the future. </P>
<P>
<B>Item 4. Information on the Company </B></P>
<P>
<B>4A. History and Development of the Company </B></P>
<P>
<B>History </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Companhia Sider&uacute;rgica Nacional is a Brazilian corporation (<I>sociedade por a&ccedil;&otilde;es</I>) incorporated in 1941 pursuant to a decree of Brazilian President, Mr. Get&uacute;lio Vargas. The Presidente
Vargas steelworks, located in the city of Volta Redonda, in the State of Rio de Janeiro, started production of coke, pig iron castings and long products in 1946. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Three major expansions were undertaken at the Presidente Vargas steelworks during the 1970s and 1980s. The first, completed in 1974, increased installed annual production capacity to 1.6 million tons of crude steel. The

second, completed in 1977, increased annual production capacity to 2.4 million tons of crude steel. The third, completed in 1989, increased annual production capacity to 4.5 million tons of crude steel. </P>
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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We were privatized through a series of auctions held in 1993 and early 1994, through which the Brazilian government sold its 91% ownership interest in us. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;From 1993 through 2002, we implemented a capital improvement program aimed at increasing our annual production of crude steel, improving the quality of our products and enhancing our environmental protection and cleanup
programs. As part of the investments, since February 1996, all our production has been based on the continuous casting process, rather than ingot casting, an alternative method that results in higher energy use and metal loss. From 1996 through
2002, we spent the equivalent of US&#36;2.4 billion under the capital improvement program and on maintaining our operational capacity, culminating with the renovation in 2001 of Blast Furnace No. 3 and Hot Strip Mill No. 2 at the Presidente Vargas
steelworks. These measures resulted in the increase of our annual production capacity to 5.6 million tons of crude steel and 5.1 million tons of rolled products. </P>
<P>
<B>General </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are one of the largest fully integrated steel producers in Brazil and in Latin America in terms of crude steel production. Our current annual crude steel capacity and rolled product capacity is 5.6 million and 5.1
million tons, respectively. Production of crude steel and rolled steel products decreased in 2008 by 6.0% to 5.0 million tons and finished steel production decreased in 2008 by 9.0% to 4.5 million tons, as compared to 2007.</P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our fully integrated manufacturing facilities produce a broad line of steel products, including slabs, hot- and cold-rolled, galvanized and tin mill products for the distribution, packaging, automotive, home appliance
and construction industries. In 2008, we accounted for approximately 49.0% of the galvanized steel products sold in Brazil. We are also one of the world&#146;s leading producers of tin mill products for packaging containers. In 2008, we accounted
for approximately 99.0% of the tin mill products sold in Brazil. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our production process is based on the integrated steelworks concept. Below is a brief summary of the steel making process at our Presidente Vargas steelworks, located in the city of Volta Redonda, in the State of Rio
de Janeiro: </P>
<UL>
<LI>
iron ore produced from our own mines is processed in continuous sintering machines to produce sinter;<br>
<br>
</LI>
<LI>
sinter and lump ore direct charges are smelted with lump coke and injected powdered coal in blast furnaces to produce pig iron;<br>
<br>
</LI>
<LI>
pig iron is then refined into steel by means of basic oxygen converters;<br>
<br>
</LI>
<LI>
steel is continuously cast in slabs;<br>
<br>
</LI>
<LI>
slabs are then hot rolled, producing hot bands that are coiled and sent to finishing facilities .</LI>
</UL>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We currently produce from our own mines all of our requirements of iron ore, limestone and dolomite, and a portion of our tin requirements. Using imported coal, we produce approximately 70-75% of our coke requirements,
at current production levels, in our own coke batteries at Volta Redonda. Imported coal is also pulverized and used directly in the pig iron production process. Zinc, manganese ore, aluminum and a portion of our tin requirements are purchased in
local markets. Our steel production and distribution also require water, industrial gases, electricity, rail and road transportation, and port facilities. </P>
<P>
<B>Acquisitions and Dispositions </B> </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On June 5, 2006, we acquired 100.0% of the shares issued by Companhia Metal&uacute;rgica Prada, or Prada, from Kiskidee Investments Limited LLC, for a total amount of US&#36;1.00. Prada is the largest steel can
manufacturer in Brazil and produces more than one billion steel cans in its four production units located in the states of S&atilde;o Paulo, Santa Catarina and Minas Gerais, in the southeastern and southern regions of Brazil and, accordingly, is one
of our major customers of tin mill products.<B> </B></P>
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<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On July 20, 2007, Namisa, our then wholly-owned mining subsidiary, acquired 100.0% of the shares issued by <I>Companhia de Fomento Mineral e Participa&ccedil;&otilde;es</I>, or CFM. The final acquisition price amounted
to US&#36;400 million, which were fully paid by us. CFM explores various iron ore mines and owns ore processing facilities in the State of Minas Gerais. CFM is located in the state of Minas Gerais and has facilities close to Casa de Pedra, our most
important mining asset. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December 30, 2008, our ownership interest was reduced to 40% of the voting and total capital stock of Namisa upon its issuance of newly issued shares for the aggregate amount of approximately US&#36;3.08 million to
Big Jump Energy Participa&ccedil;&otilde;es S.A., an Asian consortium whose shareholders are Itochu Corporation, JFE Steel Corporation, Nippon Steel Corporation, Sumitomo Metal Industries, Ltd., Kobe Steel, Ltd, Nisshin Steel Co, Ltd., and Posco.
The remaining 59.99% of the voting stock of Namisa is currently held by us. In connection with this sale, Namisa paid us approximately US&#36;3.0 billion on December 30, 2008 as pre-payment for a portion of the purchase price agreed between the
parties for future sales of crude iron ore (run-of- mine, or ROM) and the rendering of port services by us to Namisa.  The ROM will be extracted by us from the Casa de Pedra mine and will be sold to Namisa, which will be required to beneficiate the
product at its own industrial facilities. All pre-payment agreements were negotiated at arms-length basis. For further information on the effect of these pre-payments in our long-term obligations, see &#147;Item 5E. Off-Balance Sheet
Arrangements.&#148; </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We and Big Jump Energy Participa&ccedil;&otilde;es S.A. have entered into a shareholders&#146; agreement in order to govern our joint-control of Namisa. Under certain extreme situations provided for in the
shareholders&#146; agreement, a dead-lock resolution process may be established. This procedure requires us to initiate mediation with our partners and, if no solution is reached, the matter is then submitted to be addressed directly by the senior
executives of the companies in dispute. In the event the dead-lock remains, the shareholders&#146; agreement provides for call and put options, which entitles Big Jump Energy Participa&ccedil;&otilde;es S.A. to elect to sell all its ownership
interest in Namisa to CSN and CSN to elect to buy all ownership interest of Big Jump Energy Participa&ccedil;&otilde;es S.A. in Namisa, in each case for the fair market value of the respective shares. </P>
<P>
<B>Accident in Blast Furnace No. 3 </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In January 2006, there was an accident involving the gas cleaning system adjacent to Blast Furnace No. 3 at the Presidente Vargas steelworks. The accident prevented us from operating the equipment for approximately six
months, affecting our operating revenues, gross profit and operating income due to reduced sales volumes and the need to purchase slabs and coils from third-parties in order to meet our customers&#146; purchasing orders during the period in which
Blast Furnace No. 3 was under repair, as further explained in &#147;Item 5A. Operating Results&#151;Results of Operations&#151;2007 Compared to 2006.&#148; In the second half of 2007, our Blast Furnace No. 3 was completely repaired and resumed
operating normally, and, in December 2008, the reinsurance companies paid us the remaining balance of US&#36;160 million of our US&#36;520 million claim against them. For further information, see &#147;Item 4B. Business Overview&#151;Insurance&#148;
and Note 4 to our consolidated financial statements included in &#147;Item 18. Financial Statements.&#148; </P>
<P>
<B>Capital Expenditures </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We invested US&#36;706 million, US&#36;980 million and US&#36;886 million in 2006, 2007 and 2008, respectively. Expenditures in 2008 were used for the acquisitions of equipment, of which US&#36;247 million was used in
the Casa de Pedra mine expansion, US&#36;34 million in projects relating to the Itagua&iacute; port expansion and US&#36;65 million in major overall projects that extend our fixed assets useful life. For further information, see &#147;Item 5B. Liquidity and Capital Resources&#151;Short-Term Debt and
Short-Term Investments.&#148; </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2008, we continued to implement our strategy of developing downstream opportunities, new products and market niches by creating or expanding capacity of galvanized products for the automotive sector and by investing
in a galvanizing and pre-painting plant in order to supply the construction and home appliance industries, as described in &#147;Item 4B. Business Overview&#151;Facilities.&#148; </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We also intend to control production costs and secure reliable sources of raw materials, energy and transportation in support of our steelmaking operations through a program of strategic investments. The principal
strategic investments already made are set forth in &#147;Item 4B. Business Overview&#151;Facilities.&#148; </P>
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<P>
<B>Planned Investments</B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our planned investments in iron ore, steelmaking, cement and logistic projects are described below. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Projects which were previously announced, such as the greenfield slab mills in the city of Itagua&iacute;, in the State of Rio de Janeiro, and the greenfield slab mill in the city of Congonhas, in the State of Minas
Gerais and the Logistics Platform Project, in the city of Itagua&iacute;, in the State of Rio de Janeiro (except for the ongoing improvements on its Container Terminal and for the expansion of its Solid Bulks Terminal) were put on hold by the Board
of Directors due to the uncertainty about the duration of the current global economic scenario. </P>
<P>
<B><I>Iron Ore Project </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our iron ore business comprises the expansion of our mining activities and our seaport facilities, the construction of pellet plants and, to a lesser extent, the trading of iron ore produced by other companies through
our own logistics network. We expect to invest a total of US&#36;4.5 billion to produce and/or sell approximately 90 million tons of iron ore products, of which US&#36;839 million have already been invested. We expect to finance these investments
with the National Economic and Social Development Bank (<I>Banco Nacional de</I> <I>Desenvolvimento Econ&ocirc;mico Social</I>-BNDES), export credit agencies, the proceeds from offerings of securities and with the free cash flow from our current
operations. Our iron ore project schedule and expected investments are the following: </P>
<ul>
  <li>  In January 2004, we announced the approval of investments of approximately US&#36;1.0 billion to expand the annual production capacity of the Casa de Pedra iron ore mine to 53 million tons. In connection with the Namisa joint-venture, we
    reviewed these figures to US&#36;1.5 billion, and the expansion of the annual production of Casa de Pedra from 53 million to 70 million tons, which is currently being implemented. As of December, 2008, approximately US&#36;540 million had already
    been invested in the increase in production capacity of Casa de Pedra mine and its current annual production capacity is 21 million tons.<br>
    <br>
  </li>
  <li>  In October 2008, as part of the partial sale of Namisa, some of the capital expenditures which were originally planned for Casa de Pedra were transferred to Namisa, including two pellet plants. For information on our sale of 40% of our
    ownership interest in Namisa, see &#147;Item 4A. History and Development of the Company&#151;Acquisitions and Dispositions.&#148; At the end, the total investments resulted in US&#36; 2 billion, adding volume to reach 33 million tons, including two
    pellets plants. The current capacity is now 7 million tons. It is important to mention that those capital expenditure will be executed together with Namisas&acute; new business partner group. <br>
    <br>
  </li>
  <li>  We are also investing approximately US&#36;1.0 billion in the expansion of the seaport Solid Bulks Terminal in Itagua&iacute; to enable annual exports of 100 million tons of iron ore. Of this amount, approximately US&#36;280 million have
    already been invested. Our current annual export capacity is equivalent to 30 million tons. </li>
</ul>
<P>
<B><I>Steelmaking </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We initiated our long steel products brownfield project in Volta Redonda, in the State of Rio de Janeiro, which will be developed inside its main steelmaking facility. We intend to produce 600,000 tons of long steel
products, such as rod bar and wire rod. We expect to benefit from the existing infrastructure and utilities used to support a blast furnace and a former foundry. The total investment in long steel products production will be of approximately
US&#36;354 million in installations, including expanding and upgrading a 30-ton electric furnace. The facility will use surplus pig iron and low value added slabs as raw materials. </P>
<P>
<B><I>Cement Project </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This project represents the entrance of CSN into the cement market, taking advantage of the slag generated by our blast furnaces and of our limestone reserves, located in Arcos, Minas Gerais. The limestone, which is
transformed into clinker, and the slag, account for approximately 95% of the production cost to produce cement. We are investing approximately US&#36;360 million to build a greenfield grinding mill and clinker furnace, with capacity of 2.3 million
tons and 820,000 tons, respectively. We expect the grinding mill to produce 0.25 million tons of cement
in 2009 and to reach its full capacity by 2011. These investments will be financed by BNDES, which has already approved a seven-year credit line of up to US&#36;81 million indexed based on the long-term interest rate (<I>Taxa de Juros de
Longo-</I>Prazo), or TJLP, and part indexed on US dollars, as well as the use of free cash flow from our current operations. </P>
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<P><B><I>Transnordestina </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In August 2006, in order to enable the implementation of a major infrastructure project led by the Brazilian federal government, our Board of Directors approved a transaction to merge Transnordestina S.A., a company
that at the time was state-owned, into and with Companhia Ferrovi&aacute;ria do Nordeste &#150; CFN, an affiliate of CSN that holds a 30-year concession granted in 1998 to operate the Northeastern Railroad of the RFFSA with 4,238 km of railway
track. The surviving entity was later renamed Transnordestina Log&iacute;stica S.A. which is jointly-controlled by us and Taquari Participa&ccedil;&otilde;es S.A pursuant to a shareholders' agreement dated November 27, 1997, as amended on May 6, 1999 and on November 7, 2003. Investments of approximately R&#36;5.4 billion were approved to build the Nova Transnordestina Project, which includes an additional 1,728 km of large gauge,
state-of-the-art railway track. We expect the investments will allow the company to increase the transportation of various products, such as iron ore, limestone, soy beans, cotton, sugar cane, fertilizers, oil and fuels. According to a Memorandum of
Understandings entered into as of November 25, 2005, the investments will be financed through: R&#36;823 million from FINOR &#150; Northeastern Investment Fund; R&#36;2.6 billion from SUDENE - the Northeastern Development Federal Agency; a R&#36;225
million loan from BNDES to Transnordestina; R&#36;165 million from Brazilian Federal Resources; R&#36;180 million from Brazilian Northeast Bank and another R&#36;1.4 billion equity from CSN, out of which R&#36;675 million will be supported by a loan
from BNDES to us. The construction of the first 100 km started in January 2007 and as of December 31, 2008 over US&#36;102 million (R&#36;180 million) had already been invested by CSN.</P>
<P>
<B><I>Itagua&iacute; CSN Logistics Platform Project </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Regarding our seaport Itagua&iacute; Logistic Platform Project, announced on May 7, 2008, our capital expenditures investments were put on hold by the Board of Directors except for the following related projects:</P>
<ul>

    <li> Expansion of the existing Container Terminal from 440 thousand container year to 640 thousand container year, including improvements on the existing berths. We expect to invest approximately US&#36;162 million. <br>
      <br>
    </li>
</ul>
<ul>
  <li> Expansion of the Solid Bulks Terminal in Itagua&iacute; to enable annual exports of approximately
100 million tons of iron ore as described above. See &#147;Item 4A. History and Development of the
Company&#151;Planned Investments&#151;Iron
    Ore Project&#148; for a description of the expansion of the Solid Bulks Terminal. </li>
</ul>
<P>
<B><I>Additional Investments </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to the currently planned investments and maintenance capital expenditures, we continue to consider possible acquisitions, joint ventures and brownfield or greenfield projects to increase or complement our
steel producing capabilities. </P>
<P>
<B>Other Information </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CSN&#146;s legal and commercial name is Companhia Sider&uacute;rgica Nacional. CSN is organized for an unlimited period of time under the laws of the Federative Republic of Brazil. Our head offices are located at Rua
S&atilde;o Jos&eacute;, 20, 16<SUP>th</SUP> floor, 20010-020, Rio de Janeiro, RJ, Brazil and our telephone number is +55-21-2141-1800. CSN&#146;s agent for service of process in the United States is CT Corporation, with offices at 111 Eighth Avenue,
New York, New York 10011. </P>
<P>
<B>4B. Business Overview </B></P>
<P>
<B>Competitive Strengths </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We believe that we have the following competitive strengths: </P>
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<P>
<B><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fully integrated business model. </I></B>We believe we are one of the mostly fully integrated steelmakers in the world. We have captive iron ore reserves, which differentiate us from our main competitors in Brazil that purchase their iron ore
from mining companies such as Companhia Vale do Rio Doce, or CVRD. In 2006, we hired Golder Associates S.A., or Golder, to evaluate the Casa de Pedra iron ore reserves. The results confirmed proven and probable mineral resources of 1.6 billion tons
with a grade of approximately 48.0% . In addition to our iron ore reserves, we have captive dolomite and limestone mines that supply our Presidente Vargas steelworks. Our steelworks are close to the main steel consumer centers in Brazil, with easy
access to port facilities and railroads. Our operations are strongly integrated as a result of our captive sources of raw materials, such as iron ore, and our access to owned infrastructure, such as railroads and deep-sea water port facilities.</P>
<P>
<B><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Thoroughly developed transport infrastructure. </I></B>We have a thoroughly developed transport infrastructure, from our iron ore mine to our steel mill to our ports. The location of our steelworks facility is next to railroad systems and
port facilities, facilitating the supply of raw material, the shipment of our production and easy access to our principal clients. The concession for the main railroad used and operated by us is owned by MRS, a company in which we hold, directly and
indirectly, a 33.27% ownership interest. The railway connects the Presidente Vargas steelworks to the container terminal at Itagua&iacute; Port, which handles most of our steel exports. Since we obtained the concession to operate MRS&#146; railway
in 1996, we have significantly improved its tracks and developed its business, with strong cash generation. We also own concessions to operate two deep-sea water terminals from which we export our products and also import coal and small amounts of
coke, which are the only important raw materials that we need to purchase from third-parties. </P>
<P>
<B><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Self-sufficiency in energy generation. </I></B>We are self-sufficient in energy, through our interests in the hydroelectric plants of It&aacute; and Igarapava, and our own thermoelectric plant inside the Presidente Vargas steelworks. We also
sell excess energy we generate into the energy market. Our 238 MW thermoelectric co-generation plant provides the Presidente Vargas steelworks with approximately 60% of its energy needs for its steel mills, using as its primary fuel the waste gases
generated by our coke ovens, blast furnaces and steel processing facilities. We indirectly hold 29.5% of the It&aacute; hydroelectric plant that has installed capacity of 1,450 MW, with a guaranteed output of 668 MW to us and to the other
shareholders of It&aacute; Energ&eacute;tica S.A., or ITASA, proportionally to our interests in the project, pursuant to 30-year power purchase agreements at a fixed price per megawatt hour, adjusted annually for inflation. In addition, we hold
17.9% of the Igarapava hydroelectric, with 210 MW fully installed capacity. We have been using part of our 22 MW take from Igarapava to supply energy to the Casa de Pedra and Arcos mines.</P>
<P>
<B><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Low cost structure. </I></B>As a result of our fully integrated business model, our thoroughly developed transportation infrastructure and our self-sufficiency in energy generation, we have been consistently presenting high margins. Other
factors that lead to these margins are the strategic location of our steelworks facility, the use of state of the art technology and our qualified work force. </P>
<P>
<B><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diverse product portfolio and product mix. </I></B>We have a diversified product mix that includes: hot-rolled, cold-rolled, galvanized and steel tin mill products. We offer many kinds of steel packaging produced in Brazil, accounting for
99.0% of the steel tin mill products and 50.0% of the galvanized flat steel produced in Brazil. We also produce a diversified portfolio of products to meet a wide range of customer needs across all steel consuming industries. We focus on selling
high margin products, such as tin plate, pre-painted, galvalume and galvanized products, in our product mix. Our GalvaSud product provides material for exposed auto parts, using hot-dip galvanized steel and laser-welded blanks. This, together with
our hot-dip galvanizing process know-how, allows us to increase our sales to the automotive segment. In 2008, our market share in the automotive industry accounted for 21.0% of total domestic sales, and we expect to further increase our sales to the
automotive industry in 2009. Our subsidiary CSN Paran&aacute;, provides us additional capacity to produce high-quality galvanized, galvalume and pre-painted steel products for the construction and home appliance industries. In addition, our
subsidiary, INAL, the largest flat steel distributor in Brazil, is a strong sales channel in the domestic market, enabling us to meet demands from smaller customer, and therefore to have a strong presence in this market.</P>
<P>
<B><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Strong presence in domestic market and strategic international exposure. </I></B>We have a strong presence in the domestic market for steel products, with a 99.0% market share of the steel tin mill product industry in Brazil and a large
market share for galvanized flat steel. In addition, our subsidiaries CSN LLC and Lusosider constitute sales channels for our products, selling in the United States and in Europe 5.0% and 5.0%, respectively, of our total sales in 2008.</P>
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<P>
<B>Strategies </B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our goal is to increase value for our shareholders, by further benefiting from the competitive cost advantages we offer our customers from the industry segments in which we operate, maintaining our position as one of
the world&#146;s lowest-cost steel producers, becoming an important iron ore global player and by optimizing our infrastructure assets (our ports, railways and interest in power generating plants). </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To achieve this goal, we have adopted strategies in each of our four business segments (where we already have assets, current operations or inherited competitive advantages) as described below. </P>
<P align="justify">
<B><I>Steel </I></B></P>
<P align="justify">
Our strategy related to our steel business involves: </P>
<UL>
<LI>
supplying domestic markets, where we have historically recorded higher profit margins, with a wide range of finished flat and long steel products;</LI>
<LI>
implementing a carefully crafted globalization strategy that may include associations with or the acquisition and/or construction of steel operations, steel-related businesses or distribution or service centers outside Brazil, which could further
process low cost semi-finished products (slabs) from Brazil and improve our distribution channels abroad;</LI>
<LI>
emphasizing a wide range of value-added products, mostly galvanized, pre-painted and tin-coated;</LI>
<LI>
introducing new technologies and systems to enhance our understanding of customers, competitors and industry trends; and</LI>
<LI>
providing customer solutions supported by quality products and services.</LI>
</UL>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For further information on our planned investments relating to our steel activities, see &#147;Item 4A. History and Development of the Company &#151;Planned Investments&#151;Steelmaking.&#148; </P>
<P align="justify">
<B><I>Mining </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In order to strengthen our position as a player in the iron ore market, we plan to expand our mining assets, Casa de Pedra iron ore mine and Namisa, and search for investment opportunities, primarily in mining
operations related to the steel business. For further information on our planned investments relating to our mining activities, see &#147;Item 4A. History and Development of the Company &#151;Planned Investments&#151;Iron Ore Project&#148; </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2008, after the first two years trading in the international iron ore market, we exported 14.7 million tons of iron ore, which represents a 187% increase as compared to 2007. This first step to our entry into the
international iron ore market was taken in February 2007, with the completion of the first phase of the expansion of our coal seaport terminal in Itagua&iacute;, in the State of Rio de Janeiro, which enabled the terminal to also handle and export
iron ore and to load from its facilities the first shipment of our iron ore products. </P>
<P align="justify">
<B><I>Logistics </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We expect to take advantage of and expand our logistics capabilities, including our integrated infrastructure operations (our railways and ports). </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have substantially improved the infrastructure needed to support the Presidente Vargas steelworks, our export and international strategies by investing in projects such as power generation through hydroelectric power
plants, railways and port facilities in order to increase our ability to control production costs and secure reliable sources of energy, raw materials and transportation. </P>
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<P align="justify">
<B><I>Cement </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our strategy for our cement business includes the achievement of greater utilization of by-products by constructing a cement grinding and a clinker facility to produce 2.3 million tons of cement, using the slag
generated by our blast furnaces, which we expect will become operational by the first half of 2009 and the second half of 2010, respectively. For further information on our planned investments relating to our cement activities, see &#147;Item 4A.
History and Development of the Company &#151;Planned Investments&#151;Cement Project.&#148; </P>
<P align="justify">
<B>Our Steel Products </B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We produce carbon steel, which is the world&#146;s most widely produced type of steel, representing the vast bulk of global steel consumption. From carbon steel, we sell a variety of steel products, both domestically
and abroad, to manufacturers in several industries. </P>
<P align="justify">
The following chart reflects our production cycle in general terms. </P>
<P align="center">
<img src="fp22a.gif" width="450" height="493" border=0></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Presidente Vargas steelworks produces flat steel products &#151; slabs, hot-rolled, cold-rolled, galvanized and tin mill products. For further information on our production process, see &#147;&#151;Product
Process.&#148; </P>
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<P>
<B><I>Slabs </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Slabs are semi-finished products used for processing hot-rolled, cold-rolled or coated coils and sheet products. We are able to produce continuously cast slabs with a standard thickness of 250 millimeters, widths
ranging from 830 to 1,600 millimeters and lengths ranging from 5,250 to 10,500 millimeters. We produce high, medium and low carbon slabs, as well as micro-alloyed, ultra-low-carbon and interstitial free slabs. </P>
<P align="justify">
<B><I>Hot-Rolled Products </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Hot-rolled products comprise heavy-gauge hot-rolled coils and sheets, and light-gauge hot-rolled coils and sheets. A heavy gauge hot-rolled product, as defined by Brazilian standards, is a flat-rolled steel coil or
sheet with a minimum thickness of 5.01 millimeters. We are able to provide coils of heavy gauge hot-rolled sheet having a maximum thickness of 12.70 millimeters. Heavy gauge sheet steel is used to manufacture automobile parts, pipes, mechanical
construction and other products. Light gauge hot-rolled coils and sheets produced by us have a minimum thickness of 1.20 millimeters and are used for welded pipe and tubing, automobile parts, gas containers, compressor bodies and light cold-formed
shapes, channels and profiles for the construction industry. </P>
<P align="justify">
<B><I>Cold-Rolled Products </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cold-rolled products comprise cold-rolled coils and sheets. A cold-rolled product, as defined by Brazilian standards, is a flat cold-rolled steel coil or sheet with thickness ranging from 0.30 millimeters to 3.00
millimeters. Compared to hot-rolled products, cold-rolled products have more uniform thickness and better surface quality and are used in applications such as automotive bodies, home appliances and construction. In addition, cold-rolled products
serve as the base steel for our galvanized and tin mill products. We supply cold-rolled coils in thicknesses of 0.30 millimeters to 2.99 millimeters. </P>
<P align="justify">
<B><I>Galvanized Products </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Galvanized products comprise flat-rolled steel coated on one or both sides with zinc or a zinc-based alloy applied by either a hot-dip or an electrolytic process. We use the hot-dip process, which is approximately 20%
less expensive than the electrolytic process. Galvanizing is one of the most effective and low-cost processes used to protect steel against corrosion caused by exposure to water and the atmosphere. Galvanized products are highly versatile and can be
used to manufacture a broad range of products, such as: </P>
<UL>
<LI>
bodies for automobiles, trucks and buses;</LI>
<LI>
manufactured products for the construction industry, such as panels for roofing and siding, dry wall and roofing support frames, doors, windows, fences and light structural components;</LI>
<LI>
air ducts and parts for hot air, ventilation and cooling systems;</LI>
<LI>
culverts, garbage containers and other receptacles;</LI>
<LI>
storage tanks, grain bins and agricultural equipment;</LI>
<LI>
panels and sign panels; and</LI>
<LI>
pre-painted parts.</LI>
</UL>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Galvanized sheets, both painted and bare, are also frequently used for gutters and downspouts, outdoor and indoor cabinets, all kinds of home appliances and similar applications. We produce galvanized sheets and coils
in continuous hot-dip processing lines, with thickness ranging from 0.30 millimeters to 3.00 millimeters. The continuous process results in products with highly adherent and uniform zinc coatings capable of being processed in nearly all kinds of
bending and heavy machinery. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to standard galvanized products, we produce <I>Galvanew</I>&reg;, galvanized steel that is subject to a special annealing process following the hot-dip coating process. This annealing process causes iron to
diffuse from the base steel into the zinc coating. The resulting iron-zinc alloy coating allows better welding and paint
performance. The combination of these qualities makes our <I>Galvanew</I>&reg; product particularly well suited for manufacturing automobile and home appliance parts including high gloss exposed parts. </P>
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<P align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At CSN Paran&aacute;, one of our branches, we produce galvalume, a cold-rolled material coated with a zinc-aluminum alloy. The production process is similar to hot-dip galvanized coating, and galvalume has at least
twice the corrosion resistance of standard galvanized steel. Galvalume is primarily used in outdoor construction applications that may be exposed to severe acid corrosion environments like marine uses. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The added value from the galvanizing process permits us to price our galvanized products with a higher profit margin. Our management believes that our value-added galvanized products present one of our best
opportunities for profitable growth because of the anticipated increase in Brazilian demand for such high margin products. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Through CSN Paran&aacute;, we also produce pre-painted flat steel, which is manufactured in a continuous coating line. In this production line, a layer of resin-based paint in a choice of colors is deposited over either
cold-rolled or galvanized base materials. Pre-painted material is a higher value-added product used primarily in the construction and home appliance markets. </P>
<P align="justify">
<B><I>Tin Mill Products </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tin mill products comprise flat-rolled low-carbon steel coils or sheets with, as defined by Brazilian standards, a maximum thickness of 0.45 millimeters, coated or uncoated. Coatings of tin or chromium are applied by
electrolytic process. Coating costs place tin mill products among the highest priced products that we sell. The added value from the coating process permits us to price our tin mill products with a higher profit margin. There are four types of tin
mill products, all produced by us in coil and sheet forms: </P>
<UL>
<LI>
tin plate - coated on one or both faces with a thin metallic tin layer plus a chromium oxide layer, covered with a protective oil film;</LI>
<LI>
tin free steel - coated on both faces with a very thin metallic chromium layer plus a chromium oxide layer, covered with a protective oil film;</LI>
<LI>
low tin coated steel - coated on both faces with a thin metallic tin layer plus a thicker chromium oxide layer, covered with a protective oil film; and</LI>
<LI>
black plate - uncoated product used as the starting material for the coated tin mill products.</LI>
</UL>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tin mill products are primarily used to make cans and other containers. With six electrolytic coating lines, we are one of the biggest producers of tin mill products in the world and the sole producer of coated tin mill
products in Brazil. </P>
<P align="justify">
<B>Production </B></P>
<P align="justify">
<B><I>Production Process </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The principal raw materials for steel production in an integrated steelworks are iron ore, coal, coke, and fluxes like limestone and dolomite. The iron ore consumed at the Presidente Vargas steelworks is extracted,
crushed, screened and transported by railway from our Casa de Pedra mine located in the city of Congonhas, in the State of Minas Gerais, 328 km from the Presidente Vargas steelworks. The high quality ores mined and sized at Casa de Pedra, with iron
content of approximately 60%, and their low extraction costs are major contributors to our low steel production costs. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Because Brazil lacks quality coking coals, we import all the coal required for coke production. The coal is then charged in coke batteries to produce coke through a distillation process. See &#147;&#151;Raw Materials
and Suppliers&#151;Raw Materials and Energy Requirements.&#148; This coal distillation process also produces coke oven gas as a byproduct, which we use as a main source of fuel for our thermoelectric co-generation power plant. After being screened,
coke is transported to blast furnaces, where it is used as a combustion source and as a component for
transforming iron ore into pig iron. In 2008, we produced about 70-75% of our coke needs and imported the balance. At sintering plants, fine-sized iron ore and coke or other fine-sized solid fuels are mixed with fluxes (limestone and dolomite) to
produce sinter. The sinter, lump iron ore, fluxing materials and coke are then loaded into our two operational blast furnaces for smelting. We operate a pulverized coal injection, or PCI, facility, which injects low-cost pulverized coal directly
into the blast furnaces as a substitute for approximately one-third of the coke otherwise required. </P>
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<P align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The iron ore is reduced to pig iron through successive chemical reactions with carbon monoxide (from the coke and PCI) in two blast furnaces that operate 24 hours a day. The ore is gradually reduced, then melts and
flows downward. Impurities are separated from the iron to form a liquid slag with the loaded fluxes (limestone and dolomite). From time to time, white- hot liquid iron and slag are drawn off from the bottom of the furnace. Slag (containing melted
impurities) is granulated and sold to neighboring cement companies. Upon completion of our planned cement plant expected to occur by July 2009, slag also will be used to produce cement. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The molten pig iron is transported to the steelmaking shop by 350-ton capacity torpedo cars and charged in basic oxygen furnaces together with scrap and fluxes. In the basic oxygen furnaces, oxygen is blown onto the
liquid burden to oxidize its remaining impurities and to lower its carbon content, thus producing liquid steel. The molten steel is conveyed from the basic oxygen furnaces into the continuous casting machines from which crude steel (i.e.,
rectangular shaped slabs) is produced. A portion of the slab products is sold directly in the export market. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The hot-rolling, reheated slabs from the continuous casting machines are fed into hot strip mills to reduce the thickness of the slabs from 250 millimeters to a range between 1.2 and 12.7 millimeters. At the end of the
hot strip mill, the long, thin steel strip from each slab is coiled and conveyed to a cooling yard. Some hot-rolled coils are dispatched directly to customers in the as-rolled condition. Others are further processed in the pickling line, in a
hydrochloric bath, to remove surface oxides and improve surface quality. After pickling, the hot-rolled coils selected to produce thinner materials are sent to be rolled in cold strip mills. The better surface characteristics of cold-rolled products
enhance their value to customers as compared to hot-rolled products. Additional processing related to cold-rolling may further improve surface quality. Following cold-rolling, coils may be annealed, coated (by a hot dip or electrolytic tinning
process) and painted, to enhance medium-and long-term anti-corrosion performance and to add characteristics that will broaden the range of steel utilization. Coated steel products have higher profit margins than bare steel products. Of our coated
steel products, tin mill and galvanized products are our highest margin products. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Steel plant equipment regularly undergoes scheduled maintenance shutdowns. Typically the rolling mills and coating lines are maintained on a weekly or monthly basis whereas the blast furnaces and other special equipment
are scheduled for routine maintenance on a semi-annual or annual basis. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our business encompasses operations and commercial activities. Our operations activities are undertaken by our production sector, which is composed of the following two units: </P>
<UL>
<LI>
the operations unit is responsible for steel production operations, repair shops, in-plant railroad, and process development at Volta Redonda;</LI>
<LI>
the support unit is responsible for production planning, management of product stockyards, energy and utility facilities and work force safety assistance at the Presidente Vargas steelworks.</LI>
</UL>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The production sector is also responsible for environment and quality consultancy, new products development, capital investment implementation for steel production and processing, as well as the supervision of
GalvaSud&#146;s and CSN Paran&aacute;&#146;s operations. </P>
<P align="justify">
<B><I>Quality Management Program </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We practice Total Quality Management, a set of techniques that have been adopted by many leading companies in our industry. We also maintain a Quality Management System that has been certified to be in compliance with
the ISO 9001 standards set forth by the International Standardization Organization, or ISO. In October 2003, we were awarded the ISO 9000: 2000 certificate for the design and manufacture of hot-rolled, pickled and oiled products, cold-rolled,
galvanized and tin mill products, which replaced the ISO 9001 Certificate that we were awarded in December 1994. In October 2003, we were also awarded the automotive industry&#146;s Technical </P>
<P align="center">
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<P align="justify">
Specification - 16949: 2002, for the design and manufacture of hot-rolled, pickled and oiled, cold-rolled and galvanized products, which replaced the QS 9000 standards that we were awarded in 1997. Some important automotive companies, like
Volkswagen, General Motors and Ford, require their suppliers to satisfy the QS 9000 standards. </P>
<P align="justify">
<B><I>Production Output </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth, for the periods indicated, the annual production of crude steel within Brazil and by us and the percentage of Brazilian production attributable to us. </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD width=40%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>CSN% of</B>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD colspan=3 align=left><B>Crude Steel Production</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>Brazil</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>CSN</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>Brazil</B>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
	<TD colspan=3>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD colspan=3 align=center> <I>(In millions of tons)</I></TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>2008&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>33.7&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>5.0&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>15.1%&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>2007&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>33.8&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>5.3&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>15.7%&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>2006&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>30.9&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>3.5 *&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>11.3%&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>2005&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>31.6&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>5.2&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>16.5%&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>2004&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>32.9&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>5.5&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>16.8%&nbsp;</TD></TR>

<TR valign="bottom">
  <TD colspan=3 align=left>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD colspan=3 align=left>_______________</TD>
  <TD>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD colspan=9 align=left>Source: Brazilian Steel Institute (<I>Instituto Brasileiro de Siderurgia</I>), or IBS.&nbsp;</TD>
  </TR>
<TR valign="bottom">
	<TD colspan="9" align=left>*&nbsp;Lower production due to accident at Blast Furnace No. 3 on January 22, 2006.&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<P align="center">
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<P>
The following table contains some of our operating statistics for the periods indicated. </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD></TD>
	<TD width=2%></TD>
	<TD width=13%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD></TR>
<TR valign="bottom">
	<TD align=left><B>Certain Operating Statistics</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>2006</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>2007</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>2008</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><I>(In millions of tons)</I></TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Production of:&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Iron Ore&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>13.1&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>15.0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>17.0&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Molten Steel&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>3.6&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>5.4&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>5.1&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Crude Steel&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>3.5*&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>5.3&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>5.0&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Hot-Rolled Coils and Sheets&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>4.1&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>5.1&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>4.7&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Cold-Rolled Coils and Sheets&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>2.3&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>3.1&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>2.6&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Galvanized Products&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>1.1&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>2.2&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>1.1&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Tin Mill Products&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>0.8&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>0.9&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>0.7&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Consumption of Coal for Coke Batteries&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>2.0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>2.3&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>2.3&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Consumption of Coal for PCI&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>0.5&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>0.9&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>0.8&nbsp;</TD></TR>
<TR>
	<TD colspan=7>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>* Lower production due to the accident at Blast Furnace No. 3 on January 22, 2006.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
</TABLE><BR>
<P align="justify">
<B>Raw Materials and Suppliers </B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The principal raw materials we use in our integrated steel mill include iron ore, coke, coal (from which we make coke), limestone, dolomite, aluminum, tin and zinc. In addition, our production operations consume water,
gases, electricity and ancillary materials. </P>
<P align="justify">
<B><I>Raw Materials and Energy Requirements</I></B> </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Given the low interest rate environment in the developed economies, worldwide economic growth over the last few years and increasing demand for various commodity type industrial segments enabled coal and iron ore
miners, and coke producers to charge customers high prices. As a result of the effects of the 2008 financial crisis, worlwide coordinated economic growth was deeply impaired and demand for commodity type industrial segments decreased significantly,
reversing this trend. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nevertheless, these commodity type industrial segments are highly concentrated in the hands of a few global players and there can be no assurance that other price increases will not be imposed on steel producers in the
future. </P>
<P align="justify">
<I>Iron Ore</I> </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are able to obtain all of our iron ore requirements from our Casa de Pedra mine located in the State of Minas Gerais. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Casa de Pedra has an installed mining capacity of 21.5 million tons annually (ROM) with a processing ratio of 79.1%, resulting in a mining capacity of 17.0 million tons of processed iron ore per year, which exceeds our
needs for the Presidente Vargas steelworks. In 2008, the run-of-mine, or ROM, was 19.9 million tons (with a total crusher feed of 19.5 million tons and a total classification and concentration feed of 21.0 million tons). The resulting product
tonnage was 17.0 million tons of processed iron ore per year (mass recovery on wet basis of 80.8%) . Of this total amount, 7.7 million tons were delivered to the Presidente Vargas steelworks and 5.5 million tons were sold to third parties,
consisting of 3.1 million tons of sinter-feed material, 0.9 million tons of pellet feed materials, 0.9 million tons of lump ore and 0.7 million tons of small lump ore. We own other iron ore assets through Namisa, a jointly-owned subsidiary of our
Company, which acquired CFM in July, 2007. CFM was incorporated in 1996 with the purpose of utilizing and enhancing the ore treatment facilities of the Itacolomy Mines, for the beneficiation of crude ore extracted from its deposit, the Engenho Mine.
In 2008, 6.6 million tons of ROM were extracted from the Engenho mine with a waste/ore ratio of 0.35. The supply of the Pires beneficiation plant reached 5.9 million tons with product generation in the order of 4.2 million tons composed of lump ore,
small lump ore, or hematitinha, sinter feed and concentrates. Also in 2008, 1.1 million tons were extracted from the Fernandinho mine with a waste/ore ratio of 0.24. The beneficiation plant at the Fernandinho unit also processed crude ore acquired
from third parties,
which along with its own ROM, totaled 1.2 million tons of feed. This processing was responsible for the generation of 0.8 million tons of lump ore and sinter feed products, in which the sinter feed practically corresponded to the total production.</P>
<P align="center">
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<P align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2008, Namisa sold 2.6 million tons through these two complexes, of which 2.2 million tons were exported. On March 30, 2008 CFM was merged with Namisa.</P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Namisa complements our strategy to be a world leading producer of high quality iron ore. Namisa is and will remain fully integrated with our railway and port logistics corridor, providing sufficient railway and port
logistics capacity for Namisa&#146;s current and future production. Namisa is a leading company in iron ore mining and trading, with mining and processing operations in the State of Minas Gerais. Trading iron ore is obtained from small mining
companies in the neighborhood and other trading companies. For information on the sale of 40% of our ownership interest in Namisa, see &#147;Item 4A. History and Development of the Company&#151;Acquisitions and Dispositions.&#148;</P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our steelmaking operations consumed 6.7 million tons of iron ore during 2008, consisting of 5.0 million tons of sinter-feed material and 1.7 million tons of lump ore. As we do not have pelletizing plants, the total
amount of pellets has been acquired in the Brazilian market. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We process the iron ore at the mine site prior to shipment by railway to the Presidente Vargas steelworks. See the map under &#147;Item 4D. Property, Plant and Equipment&#148; for the location of the Casa de Pedra mine
in relation to the Presidente Vargas steelworks. </P>
<P align="justify">
<I>Coal</I> </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2008, our coal consumption totaled 3.0 million tons and accounted for approximately 21% of our production cost. Because of the cyclical nature of the coal industry, price and quantity terms contained in our coal
supply contracts, which are denominated in U.S. dollars, are usually renegotiated annually. Thus, our coal costs can vary from year to year. </P>
<P align="justify">
<I>Coke</I> </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2008, in addition to the approximately 1.7 million tons of coke we produced, we also consumed 456,254 tons of coke bought from third parties in China, India and Colombia. This figure represents an increase of 119% as
compared to our consumption in 2007 and expresses CSN&#146;s historical level of consumption. The reduction of our consumption in 2007 was a direct effect from the the stoppage of Blast Furnace No. 3 in 2006, which increased our stock levels of own
produced coke in 2006 and reduced our need to purchase coke from third parties in 2007. The market for coke has been very competitive since 2002, because China, a major player in the sea-borne trade, has increased its internal consumption and
adopted restrictive export quotas. In addition, India has become a major consumer of coke, considerably increasing its consumption in the past years. Due to logistical reasons, China supplies most of India&#146;s coke and this increase in
consumption tightened even more the worldwide supply-demand balance of metallurgical coke. During the fourth quarter of 2008, the financial crisis hit the steel industry and coke consumption worldwide was drastically reduced, what tends to result in
lower prices of this raw material. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We use a PCI system that allows us to use less coke in our blast furnaces, substituting a portion of the coke with lower grade coal. The PCI system has reduced our need for imported coal and imported coke, thereby
reducing our production costs. In 2008, we used approximately 767,656 tons of imported PCI coal. </P>
<P align="justify">
<I>Limestone and Dolomite</I> </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We obtain limestone and dolomite from our Bocaina mine at Arcos in the State of Minas Gerais, which produces 1.7 million tons of limestone and 0.8 million tons of dolomite on an annual basis, more than 89% of which is
used in our steelmaking process. See the map under &#147;Item 4D. Property, Plants and Equipment&#148; for the location of the Bocaina mine in relation to the Presidente Vargas steelworks. </P>
<P align="justify">
<I>Aluminum, Zinc and Tin</I> </P>
<P align="center">
28 </P>

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<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Aluminum is mostly used for steelmaking. Zinc and tin are important raw materials used in the production of certain higher-value steel products, such as galvanized and tin plate, respectively. We purchase aluminum, zinc
and tin typically from third-party domestic suppliers under one or two-year contracts. We maintain approximately a one-month reserve of such materials at the Presidente Vargas steelworks. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In April 2005, we acquired Estanho de Rond&ocirc;nia S.A., or ERSA, a tin mine and smelter facility. This smelter was one of our main tin suppliers in 2004. We intend to increase production from 1,800 tons in 2005 to
3,800 tons in 2009, in order to achieve self-sufficiency of this raw material. </P>
<P align="justify">
<I>Other Raw Materials</I> </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In our production of steel, we also consume, on an annual basis, significant amounts of spare parts, refractory bricks and lubricants, which are generally purchased from domestic suppliers. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We also consume significant amounts of oxygen, nitrogen, hydrogen, argon and other gases at the Presidente Vargas steelworks. These gases are supplied by a third-party under long-term contracts from its gas production
facilities located on the Presidente Vargas steelworks site. In 2008 we used 858,876 tons of oxygen to produce 5.1 million tons of crude steel. </P>
<P align="justify">
<I>Water</I> </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Large amounts of water are also required in the production of steel. Water serves as a solvent, a catalyst and a cleaning agent. It is also used to cool, to carry away waste, to help produce and distribute heat and
power, and to dilute liquids. Our source of water is the Para&iacute;ba do Sul River, which runs through the city of Volta Redonda. Over 80% of the water used in the steelmaking process is recirculated and the balance, after processing, is returned
to the Para&iacute;ba do Sul River. Since March 2003, the Brazilian government has imposed a monthly tax for our use of water from the Para&iacute;ba do Sul River, based on an annual fee of approximately US&#36;1.1 million. </P>
<P align="justify">
<I>Electricity</I> </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Steelmaking also requires significant amounts of electricity to power rolling mills, production lines, hot metal processing, coking plants and auxiliary units. In 2008, the Presidente Vargas steelworks consumed
approximately 2.9 million MWh of electric energy or 590 kilowatt hours per ton of crude steel. This consumption made us one of the largest consumers of electricity in Brazil, accounting for approximately 11% of the overall consumption of electricity
in the State of Rio de Janeiro. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our main current source of electricity is our 238 MW thermoelectric co-generation power plant at the Presidente Vargas steelworks, besides the It&aacute; and Igarapava hydroelectric facilities held by us, from which we
have a take capacity available of 167 MW and 22 MW, respectively. In addition, we have approved the construction of a new turbine generator at the Presidente Vargas steelworks, which will increase 20 MW to our existing installed capacity. This
turbine will be allocated near to our Blast Furnace No. 3, using the outlet gases from the ironmaking process to generate energy. </P>
<P align="justify">
<I>Natural Gas</I> </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to electricity, we consume natural gas, mainly in our hot strip mill. Companhia Estadual de G&aacute;s do Rio de Janeiro S.A., or CEG Rio, which was privatized in 1997, is currently our major source of
natural gas. Variations in the supply of gas can affect the level of steel production. We have not experienced any significant stoppages of production due to a shortage of natural gas. We also purchase fuel oil from Petrobras. See &#147;Item 3D.
Risk Factors&#151;Risks Relating to the Steel Industry and CSN&#151;Interruptions in the supply of natural gas and power transmission over the government power grid may adversely affect our business, financial condition and results of
operations.&#148; </P>
<P align="justify">
<I>Diesel Oil</I> </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In mid-October 2006, we entered into an agreement to receive diesel oil from the Companhia Brasileira de Petr&oacute;leo Ipiranga, or Ipiranga, in order to supply our equipment in Casa de Pedra and Arcos in Minas
Gerais, which are the plants responsible for our mining activity. In 2007 and 2008, we had a consumption of 38,187 kiloliters and
49,565 kiloliters of oil diesel, respectively. This increase was mainly due to the growth of our mining activity to support our growing iron ore production, which required us to enlarge our mining equipment fleet. In 2007 and 2008, we have paid
R&#36;61.3 million and R&#36;82.6 million, respectively, for the diesel oil we consumed. &nbsp;</P>
<P align="center">
29 </P>

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<P align="justify"><B><I>Suppliers </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We acquire the inputs necessary for the production of our products in Brazil and abroad, with aluminum, zinc, tin, spare parts, refractory bricks, lubricants, oxygen, nitrogen, hydrogen and argon being the main inputs
acquired in Brazil. Coal and coke are the only inputs acquired abroad. </P>
<P align="justify">
Our main raw materials suppliers are set forth below: </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD width=78%></TD>
	<TD width=2%></TD>
	<TD width=19%></TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp;<B>Main Suppliers</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>Raw Material</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
	<TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp;BHP Billiton, Jim Walter Resources and Alpha Natural Resources&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>Coal&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp;Noble and Glencore&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>Coke&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp;Reciclagem Fluminense de Metais Ltd.<SUP>(1)</SUP></TD>
	<TD>&nbsp;</TD>
	<TD align=center>Aluminum&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp;Votorantim Metais<SUP>(1)</SUP></TD>
	<TD>&nbsp;</TD>
	<TD align=center>Zinc&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp;ERSA&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>Tin&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>  &nbsp;Bardella Timken Servi&ccedil;os, Sulcromo Revestimentos Industriais, and Mwl Brasil Rodas e&nbsp;&nbsp;Eixos Ltda.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>Spare parts&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp;Magnesita and Saint Gobain&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>Refractory bricks&nbsp;</TD></TR>
<TR>
	<TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp;Petrobras and Quaker&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>Lubricants&nbsp;</TD></TR>

<TR valign="bottom">
  <TD colspan=3 align=left>___________</TD>
</TR>
<TR valign="bottom">
	<TD colspan=3 align=left>(1) Suppliers which we depend on, due to the fact that they are the only suppliers in Brazil for their respective raw materials.&nbsp;</TD></TR>
</TABLE>
<BR>
<P align="justify">
<B>Logistics </B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Transportation costs are a significant component of our steel production costs and are a factor in our price-competitiveness in the export market. Railway transportation is the principal means by which we transport raw
materials from our mines to the Presidente Vargas steelworks and steel products to ports for shipment overseas. Iron ore, limestone and dolomite from our two mines located in the State of Minas Gerais are transported by railroad to the Presidente
Vargas steelworks for processing into steel. The distances from our mines to the Presidente Vargas steelworks are 328 km and 455 km. Imported coal and coke bought from foreign suppliers are unloaded at the port of Itagua&iacute;, 90 km west of the
city of Rio de Janeiro, and shipped 109 km by train to the Presidente Vargas steelworks. Our finished steel products are transported by train, truck and ships to our customers throughout Brazil and abroad. Our principal Brazilian markets are the
cities of S&atilde;o Paulo (335 km from the Presidente Vargas steelworks), Rio de Janeiro (120 km) and Belo Horizonte (429 km). </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Until recently, Brazil&#146;s railway system (including railcars and tracks) was principally government-owned and in need of repair, but has now been largely privatized. In an attempt to increase the reliability of our
rail transportation, we indirectly hold concessions for the main railway systems we use. For further information on our railway concessions, see &#147;&#151;Facilities&#151;Railways.&#148; </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We export mainly through the ports of Itagua&iacute; and Rio de Janeiro, and import coal and coke through the Itagua&iacute; Port, all in the State of Rio de Janeiro. The coal and container terminals have been operated
by us since August 1997 and 1998, respectively. </P>
<P align="justify">
<B>Marketing Organization and Strategy </B> </P>
<P align="justify">
<B><I>Steel Products </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our steel products are sold both domestically and abroad as a main raw material for several different manufacturing industries, including the automotive, home appliance, packaging, construction and steel processing
industries. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our sales approach is to establish a brand loyalty image and achieve a reputation for quality products by developing relationships with our clients and focusing on their specific needs.</P>
<P align="center">
30 </P>

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<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our commercial area is responsible for sales of all of our products. This area is divided into two major teams, one focused on international sales and the other on domestic sales. The domestic market oriented sales team
is divided into five market segments: packaging, distribution, automotive, home appliances and original equipment manufacturer, or OEM, and construction. Each one of these segments has a specific strategic goal to provide tailor-made steel solutions
that meet the specific needs of each client they serve. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The distribution unit is responsible for supplying large steel processors and distributors, as well as some industries that produce small diameter pipe and light profiles. The packaging unit acts in an integrated way
with suppliers, representatives of the canning industry and distributors to respond to customer needs for finished-products. The automotive unit is supplied by a specialized mill, GalvaSud, and also by a portion of the galvanized material produced
at Presidente Vargas steelworks, benefiting from a combined sales strategy. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2008, over two thirds of our domestic sales were made through our own sales force directly to customers. The remaining sales were to independent distributors for subsequent resale to smaller clients. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Historically, our export sales were made primarily through international brokers. However, as part of our strategy to establish direct, longer-term relationships with end-users, we have decreased our reliance on such
brokers. We have focused our international sales to more profitable markets in order to maximize revenues and shareholder returns. Our strategy is to maintain Europe and North America as our main export markets, taking advantage of the commercial
channels provided by our subsidiaries CSN LLC, in the United States, and Lusosider, in Portugal. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All of our sales are on an order-by-order basis and have an average delivery time of 45 days. As a result, our production levels closely reflect our order log book status. We forecast sales trends in both the domestic
and export markets based on the historical data available from the last two years and the general economic outlook for the near future. We have our own data systems to remain informed of worldwide and Brazilian market developments. Further, our
management believes that one of the keys to our success is maintaining a presence in the export market. Such presence gives us the flexibility to shift between domestic and export markets, thereby allowing us to maximize our profitability. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unlike classic commodity products, there is no exchange trading of steel, or uniform pricing, as wide differences exist in terms of size, quality and specifications. In general, exports are priced based on international
spot prices of steel at the time of sale in U.S. dollars or Euros, depending on the destination. To establish the domestic price, the corresponding international quotations are converted into <I>reais</I> and an additional amount is added to
reflect, among other things, local demand, transportation and tariff costs to import similar products. Sales are normally paid at sight, or within 15 or 30 days, and, in the case of exports, usually backed by a letter of credit and an insurance
policy. Sales are made primarily on cost and freight terms. </P>
<P align="justify">
<B><I>Iron Ore </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Iron ore products are commercialized by our own commercial team located in Brazil and also overseas, in Portugal and Hong Kong. In addition to our international sales staff, our overseas office also hosts our technical
assistance management. Our overseas offices allow us to stay in close contact with our customers, monitor their requirements and our contract performance. Domestic sales, market intelligence analysis, and planning and administration of sales are
handled from Brazil by the staff in our Nova Lima office, which is located approximately 70km from the Casa de Pedra mine. </P>
<P align="justify">
The chart below illustrates the coverage of our sales team both domestically and abroad:</P>
<P align="center">
31 </P>

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<p align="center">

  <img src="fp32a.gif" width="500" height="319" border=0>
  <BR>
</p>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We supply all of our iron ore to the steel industry and our main targets are the Brazilian, European and Asian markets. Prevailing and expected levels of demand for steel products directly affect demand for iron ore.
Demand for steel products is influenced by many factors, such as GDP, global manufacturing production, civil construction and infrastructure spending. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We believe our competitiveness has been improved by our customer service and market intelligence. It is paramount for us to have a clear understanding of our customers&#146; businesses in order to address their needs,
surpass their expectations and build long-term relationships. We have a customer-oriented marketing policy and place specialized personnel in direct contact with our clients to help determine the mix that best suits each particular customer. We also
constantly search for the optimal balance between the use of our mining assets and customization needed by each of our customers. In order to compete with competitors more conveniently located geographically or that may offer larger sales volume of
iron ore, we rely on our market analysis and forecasts of the market chain. </P>
<P align="justify">
<B>Steel Sales</B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We recorded annual steel sales volume of 4.89 million tons, which represents a decrease of 9.0% as compared to 2007. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Domestic sales and exports accounted for 85% and 15%, respectively, of our consolidated total steel sales volume. The parent company only accounted for 92% of our consolidated total steel sales volume.</P>
<P align="justify">
<B><I>Domestic Sales </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Domestic sales reached 4.16 million tons in 2008, which represents an increase of 15% as compared to 2007. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The flat steel market in 2008 experienced two very different periods. The first, which lasted from January through October, was marked by strong demand from all sectors, especially the automotive, construction and home
appliance and OEM industries, which recorded successive production and sales records. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;From November through December, however, the effects of the 2008 financial crisis affected the industries of our main clients, which caused a significant reduction in production and demand for steel products.</P>
<P align="center">
32 </P>

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<P align="justify">
<B><I>Exports </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Annual exports totaled 733,000 tons, which represents a decrease of 58% as compared to 2007.  This reduction is a direct result of our strategy to prioritize domestic sales until October and the overall reduction in
international steel demand during the last quarter of 2008. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Of our total exports, 87% consisted of coated steel items, underlining our policy of concentrating on sales of higher added-value products. </P>
<P align="justify">
<B><I>Steel Sales by Geographic Region </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2008, we sold steel products to customers in Brazil and 49 other countries. The fluctuations in the portion of total sales assigned to domestic and international markets, which can be seen in the table below, reflect
our ability to adjust sales in light of variations in the domestic and international economies, as well as steel demand and prices, domestically and abroad. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The three main export markets for our products are Europe, North America and Latin America, representing 45%, 37% and 13%, respectively, of our export sales volume in 2008. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In North America, we take advantage of our subsidiary CSN LLC, which acts as a commercial channel for our products. In order to gain a cost advantage among our U.S. competitors, CSN is able to export slabs to CSN LLC
which are processed at third parties into hot-rolled coil and then transformed into more added value products at CSN LLC&#146;s plant, such as cold-rolled coil and galvanized. Moreover, we are able to export cold-rolled coils which can be directly
sold or processed by CSN LLC in order to manufacture galvanized products. </P>
<P align="justify">
In Europe, we sell hot-rolled coil as raw material to Lusosider, our subsidiary located in Portugal. </P>
<P align="justify">
The following table contains information relating to our sales of steel products by destination:</P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:9px">
  <TR>
    <TD></TD>
    <TD width=1%></TD>
    <TD width=7%></TD>
    <TD width=1%></TD>
    <TD width=6%></TD>
    <TD width=1%></TD>
    <TD width=7%></TD>
    <TD width=1%></TD>
    <TD width=6%></TD>
    <TD width=1%></TD>
    <TD width=6%></TD>
    <TD width=1%></TD>
    <TD width=6%></TD>
    <TD width=1%></TD>
    <TD width=7%></TD>
    <TD width=1%></TD>
    <TD width=6%></TD>
    <TD width=1%></TD>
    <TD width=6%></TD>
    <TD width=1%></TD>
    <TD width=6%></TD>
    <TD width=1%></TD>
    <TD width=7%></TD>
    <TD width=1%></TD>
    <TD width=6%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="23" align=center><B>CSN &#150; Sales of Steel Products by Destination</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="23" align=center><I>(In thousands of metric tons and millions of US$)</I></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align=center><B>2006</B></TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="7" align=center><B>2007</B></TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="7" align=center><B>2008</B></TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD colspan="7" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="center"></TD>
    <TD colspan="7" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="center"></TD>
    <TD colspan="7" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>Gross&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>Gross&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>Gross&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>% of&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>Operating&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>% of&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>% of&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>Operating&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>% of&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>% of&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>Operating&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>% of&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>Tons&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>Total&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>Revenues<SUP>(2)</SUP></TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>Total&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>Tons&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>Total&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>Revenues<SUP>(2)</SUP></TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>Total&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>Tons&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>Total&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>Revenues<SUP>(2)</SUP></TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>Total&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Brazil&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2,817&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>64.3&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>3,258&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>72.5&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>3,614&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>67.2&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>4,853&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>77.0&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>4,158&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>85.0&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>6,845&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>89.0&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Export&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,567&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>35.7&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,235&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>27.5&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,764&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>32.8&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,446&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>23.0&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>733&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>15.0&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>791&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>11.0&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD><B>&nbsp; &nbsp;Total</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>4,384</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>100.0</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>4,493</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>100.0</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>5,378</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>100.0</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>6,299</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>100.0</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>4,891</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>100.0</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>7,636</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>100.0</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Exports by Region&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Asia&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>79&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1.8&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>47&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1.1&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>57&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1.1&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>47&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>0.7&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>17&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>0.4&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>19&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>0.2&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>North America(1)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>729&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>16.7&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>600&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>13.4&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>970&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>18.0&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>651&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>10.4&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>268&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>5.5&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>291&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>3.8&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Latin America&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>142&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>3.2&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>92&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2.0&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>122&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2.3&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>94&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1.5&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>96&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2.0&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>105&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1.4&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Europe&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>563&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>12.8&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>455&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>10.1&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>548&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>10.2&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>601&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>9.5&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>331&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>6.8&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>352&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>4.6&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>All Others&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>54&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1.2&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>41&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>0.9&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>67&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1.2&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>53&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>0.9&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>21&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>0.4&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>23&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>0.3&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp; &nbsp;<B>Total Exports</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>1,567</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>35.7</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>1,235</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>27.5</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>1,764</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>32.8</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>1,446</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>23.0</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>733&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>15.0&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>791&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>10.0&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<TABLE width=100% border=0 cellpadding=0 cellspacing=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <TR valign="bottom">
    <TD colspan=9 align=left>___________________</TD>
  </TR>
  <TR valign="bottom">
    <TD colspan=9 align=left>(1)Sales to Mexico are included in North America.&nbsp;<br>
      (2)
    Total gross operating revenues presented above differ from amounts in our U.S. GAAP financial statements because they do not include&nbsp;revenues from non-steel products (non-steel products include mainly by-products, iron ore and logistics services), which in 2006 represented&nbsp;US&#36;320 million, in 2007 represented US&#36;679 million and in 2008 represented US&#36;1,571 million.&nbsp;</TD>
  </TR>
</TABLE>
<P align="justify"><B><I>Steel Sales by Product </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth our market shares for steel sales in Brazil of hot-rolled, cold-rolled, galvanized and tin mill products for the past three years according to the Brazilian Steel Institute (<I>Instituto
Brasileiro de Siderurgia</I>), or<I> </I>IBS. </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD width=55%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD></TR>
<TR valign="bottom">
	<TD align=left><B>CSN Domestic Market Share</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>2006</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>2007</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>2008</B>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center"></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center"></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD colspan=5 align=center><I>(As a percentage of the market for each product)</I></TD>
</TR>

  <TR valign="bottom">
    <TD align=left>Hot-Rolled Products&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>25.0%&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>31.0%&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>34.0%&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Cold-Rolled Products&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>19.0%&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>21.0%&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>26.0%&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Galvanized Products&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>42.0%&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>44.0%&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>49.0%&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Tin Mill Products&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>98.0%&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>98.0%&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>99.0%&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<P align="center">
33 </P>

<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_34"></A><p align=right><a href="#topdraft">Table of Contents</a></p><BR>
<P align="justify">
<B><I>Steel Sales by Industry </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We sell our steel products to manufacturers in several industries. Following is a breakdown of our domestic shipments by volume for the last three years among our market segments: </P>
<P align="justify">
<B>CSN Sales by Industrial Segment in Brazil</B></P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD></TD>
	<TD width=2%></TD>
	<TD width=13%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>2006</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>2007</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>2008</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center"></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center"></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD colspan=5 align=center><I>(In percentages of total domestic volume shipped)</I></TD></TR>
<TR valign="bottom">
	<TD align=left>Distribution&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>38.0%&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>43.3%&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>44.7%&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Packaging&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>21.9%&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>16.3%&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>15.1%&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Automotive&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>14.6%&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>14.6%&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>19.6%&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Home Appliances/OEM&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>15.4%&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>13.3%&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>12.1%&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Construction&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>10.2%&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>12.5%&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>8.5%&nbsp;</TD></TR>
</TABLE>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We believe we have a particularly strong domestic and export position in the sale of tin mill products used for packaging. Our customers for these products include some of the world&#146;s most important food processing
companies, as well as many small and medium-sized entities. We also maintain a strong position in the sale of galvanized products for use in the automobile manufacturing, construction and home appliance industries in Brazil and abroad, supplied by
GalvaSud and CSN Paran&aacute;. No single customer accounts for more than 5% of our net operating revenues. </P>
<P align="justify">
<B><I>Seasonality </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our sales of steel products are subject to seasonality. It is well known in both international and domestic steel markets that demand is lower in the first six months of the year, which directly affects sales. On the
other hand, demand normally increases in the third quarter. Our sales force considers this seasonality in its planning while, at the same time, seeks to keep production stable by offsetting domestic market fluctuations with exports to other markets.</P>
<P align="justify">
<B>Iron Ore Sales </B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The first step to our entry into the international iron ore market was taken in February 2007, with the completion of the first phase of the expansion of our coal seaport terminal in Itagua&iacute;, in the State of Rio
de Janeiro, which enabled us to also handle and export iron ore and to load from our own facilities the first shipment of our iron ore products. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2008, after the first two years trading in the international iron ore market, we exported 14.7 million tons of iron ore, which represents a 186.9% increase, as compared to 2007. Export sales increased 350% from
US&#36;218 million in 2007 to US&#36;980 million in 2008. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although the world economy has been since the last quarter of 2008 affected by the side-effects from the economy meltdown, we were able to maintain and increase our iron ore sales. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2008, China accounted for mostly of our iron ore sales, followed by Europe. In 2008, the Asian market (primarily China and Japan) and Europe were the primary markets for our sinter feed while Middle East was the
primary market for our pellet feed. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As global iron ore markets are highly competitive, we focus on our flexibility, reliability and efficient manner of supplying iron ore to the world market. The iron ore market worldwide is mainly affected by price,
quality, range of products offered, reliability, operating costs and shipping costs. Facing this environment we constantly seek better offer options not just for us but also for our customers. </P>
<P align="center">
34 </P>

<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_35"></A><p align=right><a href="#topdraft">Table of Contents</a></p>

<P align="justify">
<B>Facilities </B></P>
<P align="justify">
<B><I>Steel Mill </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Presidente Vargas steelworks, located in the city of Volta Redonda, in the State of Rio de Janeiro, began operating in 1946. It is an integrated facility covering approximately 4.0 square km and containing five coke
batteries (three of which are currently in operation), three sinter plants, two blast furnaces, a basic oxygen furnace steel shop, or BOF shop, with three converters, three continuous casting units, one hot strip mill, three cold strip mills, two
continuous pickling lines, one continuous annealing line, three continuous galvanizing lines, four continuous annealing lines exclusively for tin mill products and six electrolytic tinning lines.</P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our major operational units and corresponding effective capacities as of December 2008, including CSN LLC and Lusosider, are set forth in the following chart:</P>
<P align="justify">
<B>Effective Capacity </B></P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD></TD>
	<TD width=2%></TD>
	<TD width=13%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD></TR>

<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>Tons</B>&nbsp;<br>
    <B>per year</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>Equipment</B>&nbsp;<br>
    <B>in operation</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
	<TD colspan=5>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>Process:</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp;Coking plant&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>1,680,000&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>3 batteries&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp;Sintering plant&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>6,930,000&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>3 machines&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp;Blast furnace&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>5,380,000&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>2 furnaces&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp;BOF shop&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>5,750,000&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>3 converters&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp;Continuous casting&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>5,600,000&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>3 casters&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>Finished Products:</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp;Hot strip mill&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>5,100,000&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>1 mill&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp;Cold strip mill&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>4,550,000&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>6 mills&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp;Galvanizing line&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>2,095,000&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>7 lines&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp;Electrolytic tinning line&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>1,190,000&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>7 lines&nbsp;</TD></TR>
</TABLE>
<P align="justify">
<B><I>Downstream Facilities </I></B></P>
<P align="justify">
<I>GalvaSud</I> </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have a 99.99% ownership interest in GalvaSud, which produces and sells galvanized steel Galvanew&reg;, laser-welded and pre-stamped parts for the automotive industry. GalvaSud has an annual capacity of 350,000 tons.</P>
<P align="justify">
<I>CSN Paran&aacute;</I> </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our branch CSN Paran&aacute; produces and supplies plain regular galvanized, <I>Galvalume</I>&reg; and pre-painted steel products for the construction and home appliance industries. The plant has an annual capacity of
330,000 tons of galvanized products and <I>Galvalume</I>&reg; products, 100,000 tons of pre-painted products, which can use cold-rolled or galvanized steel as substrate, and 220,000 tons of pickled hot-rolled coils in excess of the coils required
for the coating process. </P>
<P align="justify">
<I>Cia. Metalic Nordeste</I> </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have a 99.99% ownership interest in Cia. Metalic Nordeste, or Metalic. Metalic is the only two-piece steel can producer in all Americas. It has approximately 48% of the packaging market for carbonated drinks in the
Northeastern regions of Brazil. Currently, we are the only supplier to Metalic of the steel used to make two-piece cans. The development of drawn-and-wall-ironed steel for the production of two-piece cans is an important achievement in the
production process at the Presidente Vargas steelworks. In addition to the production of the 350ml steel cans, in 2009 Metalic will also produce 250ml steel cans, increasing its portfolio of products and servicing the market demand for cans of
different sizes. </P>
<P align="justify">
<I>Cia Metal&uacute;rgica Prada </I></P>
<P align="center">
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<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have a 99.99% ownership interest in Companhia Metal&uacute;rgica Prada, or Prada. Established in 1936, Prada is the largest Brazilian steel can manufacturer and has an annual production capacity of over one billion
cans in its three industrial facilities located in the states of S&atilde;o Paulo, Rio Grande do Sul and Minas Gerais. Currently, we are the only Brazilian producer of tin plate, Prada&#146;s main raw material, which makes Prada one of our major
customers of tin plate products. Prada has important clients in the food and chemical industries, including packages of vegetables, fishes, dairy products, meat, aerosols, paints and varnishes, and other business activities. On December 30, 2008,
Ind&uacute;stria Nacional de A&ccedil;os Laminados S.A., or INAL, merged into Prada, the surviving entity. For further information on the acquisition of Prada, see &#147;Item 4A. History and Development of the Company&#151;Acquisitions and
Dispositions.&#148;<I> </I></P>
<P align="justify">
<I>Companhia Siderurgica Nacional, LLC</I> </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CSN LLC holds the assets of former Heartland Steel, a flat-rolled steel processing facility in Terre Haute, Indiana. This facility has an annual production capacity of 180,000 tons of cold-rolled products and 315,000
tons of galvanized products. Currently, CSN LLC is obtaining hot coils by buying slabs from us and then having them converted into hot coils by local steel companies or buying hot rolled coils directly from mills in the United States. See &#147;Item
4B. Government Regulation and Other Legal Matters&#151;Anti-Dumping Proceedings&#151;United States&#148; for a discussion about anti-dumping issues on Brazilian hot coils exports to the United States. </P>
<P align="justify">
<I>Lusosider, A&ccedil;os Planos, S.A.</I> </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We own 99.94% of Lusosider, a producer of hot-dip galvanized products and cold-rolled located in Seixal, near Lisbon, Portugal. Lusosider produces approximately 240,000 tons of galvanized products and 50,000 tons of
cold-rolled annually. Its main customers include service centers and tube making industries. </P>
<P align="justify">
<I>Ind&uacute;stria Nacional de A&ccedil;os Laminados S.A.</I> </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;INAL is our subsidiary and a distributor of laminated steel founded in 1957. Currently, INAL is the number one in the Brazilian distribution market, with 600,000 tons per year of installed processing capacity. INAL has
three steel service centers and five distribution centers strategically located in the Brazilian territory. Its main service center is located in Mogi das Cruzes between S&atilde;o Paulo and Rio de Janeiro. INAL has a service center located in
Cama&ccedil;ari, in the State of Bahia, to support sales in the Northeastern and North regions of Brazil. Its product mix also includes sheets, slit coils, sections, tubes, and roofing in standard or customized format, according to client&#146;s
specifications. INAL processes all range of products produced by us and services 4,000 customers annually from the civil construction, automotive and home appliances sectors, among others. On December 30, 2008, INAL merged into our subsidiary Prada.</P>
<P align="justify">
<B><I>Mines and Mineral Reserves </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We hold concessions to mine iron ore, limestone and dolomite. We purchase manganese on the local market.</P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except for Namisa&#146;s mines, in which we have a 59.99% ownership interest, we own 100% of each of our mines. In addition, each mine is an &#147;open pit&#148; mine. See the map under &#147;Item 4D. Property, Plant
and Equipment&#148; for the location of the mines in relation to the Presidente Vargas steelworks and for information on the reserves at our Casa de Pedra mine and resources at Engenho and Fernandinho mines. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Iron ore extraction, crushing, screening and concentration are done in three different sites: Casa de Pedra (CSN&#146;s property), Pires Beneficiation Plant and Fernandinho Mine (both Namisa&#146;s property). </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Casa de Pedra facilities are located in the city of Congonhas, in the State of Minas Gerais. The Casa de Pedra mine is located 350 km from the Presidente Vargas steelworks and supplies iron ore products to our steel
mill, as well as for export through the Itaguai Port. Casa de Pedra&#146;s equipment fleet and treatment facilities have an installed annual ROM capacity of approximately 60.0 million tons and 21.5 million tons, respectively. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Most of the ROM of the Pires Beneficiation Plant comes from Engenho mine (Namisa&#146;s property), which is located at the northern border of the Casa de Pedra mine. Pires Beneficiation Plant has the capacity to process
10.3 million tons per year. From this total, 6 million tons are currently provided by the Engenho mine and the balance is purchased from third parties. </P>
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<P align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fernandinho mine is located in the city of Itabirito, in the State of Minas Gerais. This unit processes crude ore purchased from third parties, which along with its own ROM, totaled 1.2 million tons of feed in 2008. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For additional information on our mines and mineral reserves, see &#147;Item 4D. Property, Plant and Equipment&#151;Reserves at Casa de Pedra Mine&#148; and &#147;Item 4D. Property, Plant and Equipment&#151;Resources at
Fernandinho and Engenho Mines.&#148; </P>
<P align="justify">
<I>Limestone and Dolomite Mine</I> </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our extraction and preparation of limestone and dolomite is done at our Bocaina mining facility located at Arcos, in the State of Minas Gerais. This mining facility has an installed annual production capacity of
approximately 4.0 million tons. We believe this mining facility has sufficient limestone and dolomite reserves to adequately supply our steel production, at current levels, for more than 45 years. The mining facility is located 455 km from the
Presidente Vargas steelworks. </P>
<P align="justify">
<I>Tin</I> </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We own a tin mine and a smelter located in the State of Rond&ocirc;nia. The inventory of the geological reserves has been prepared from a review of the major reports from the Santa Barbara Mine Document Center. The
majority of the deposits and/or target areas are within Mining Leases that have been consolidated into Mining Group (<I>Grupamento Mineiro</I> No. 131/92). The reserves provided were recognized by the Brazilian Department of Mineral Production
(<I>Departamento Nacional de Produ&ccedil;&atilde;o Mineral</I>), or DNPM, Brazil&#146;s competent authority for the reporting of ore reserves. The reserves and resources presented are &#147;in situ.&#148;</P>
<P align="justify">
<B><I>Electricity Distribution and Generation </I></B></P>
<P align="justify">
<I>Thermoelectric Co-Generation Power Plant</I> </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We completed the construction of a 238 MW thermoelectric co-generation power plant at the Presidente Vargas steelworks in December 1999. Since October 2000, the plant has provided the Presidente Vargas steelworks with
approximately 60% of the electric energy needs for its steel mills. Aside from operational improvements, the power plant supplies our strip mills with electric energy, processed steam and blown air from the blast furnaces, benefiting the surrounding
environment through the elimination of flares that burn steel-processing gases into the atmosphere. </P>
<P align="justify">
<I>It&aacute; Hydroelectric Facility</I> </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each of Tractebel and us own 48.75%, and Companhia de Cimento Itamb&eacute;, or Itamb&eacute;, owns the remaining 2.5% of ITASA, a special-purpose company formed for the purpose of owning and operating, under a 30-year
concession, 60.5% of the It&aacute; hydroelectric facility on the Uruguay river in Southern Brazil. Tractebel owns directly the remaining 39.5% of the It&aacute; hydroelectric facility.</P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The power facility was built under a project finance structure with an investment of approximately US&#36;860 million. The long-term financing for the project was closed in March 2001 and consisted of US&#36;78 million
of debentures issued by ITASA, a US&#36;144 million loan from private banks and US&#36;116 million of direct financing from BNDES, all of which are due by 2013. The sponsors of the project have invested approximately US&#36;306 million in this
project. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It&aacute; has an installed capacity of 1,450 MW, with a firm guaranteed output of 668 MW, and became fully operational in March 2001. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We and the other shareholders of ITASA have the right to take our pro rata share (proportionally to our ownership interest in the project) of It&aacute;&#146;s output pursuant to 30-year power purchase agreements at a
fixed price per
megawatt hour, adjusted annually for inflation. Since October 2002, we have been using our entire It&aacute; take internally. </P>
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<P align="justify"><I>Igarapava Hydroelectric Facility</I> </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We own 17.9% of a consortium that built and will operate for 30 years the Igarapava hydroelectric facility. Other consortium members are CVRD, Companhia Mineira de Metais, Votorantim Metais Zinco, AngloGold Ashanti
Minera&ccedil;&atilde;o Ltda., and Companhia Energ&eacute;tica de Minas Gerais, or CEMIG. The plant became full operational on December 30, 1999 with an installed capacity of 210 MW, corresponding to 136 MW of firm guaranteed output as of December
31, 2008. We have been using part of our 22.8 MW take from Igarapava to supply energy to the Casa de Pedra and Arcos mines, and to the Presidente Vargas steelworks. From time to time, we also sell the excess energy to the energy market.</P>
<P align="justify">
<B><I>Railways </I></B></P>
<P align="justify">
<I>Southeastern Railway System</I> </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MRS has a concession to operate, through the year 2026, Brazil&#146;s Southeastern railway system. As of December 31, 2008, we held directly and indirectly 33.27% of MRS&#146; total capital. The Brazilian Southeastern
railway system, covering 1,674 km of track, serves the S&atilde;o Paulo &#150; Rio de Janeiro &#150; Belo Horizonte industrial triangle in Southeast Brazil, and links our mines located in the State of Minas Gerais to the ports located in the states
of S&atilde;o Paulo and Rio de Janeiro and to the steel mills of CSN, Companhia Sider&uacute;rgica Paulista, or Cosipa, and Gerdau A&ccedil;ominas. In addition to serving other customers, the line transports iron ore from our mines at Casa de Pedra
in the State of Minas Gerais and coke and coal from the Itagua&iacute; Port in the State of Rio de Janeiro to the Presidente Vargas steelworks and transports our exports to the ports of Itagua&iacute; and Rio de Janeiro. The railway system connects
the Presidente Vargas steelworks to the container terminal at Itagua&iacute; Port, which handles most of our steel exports. Our transport volumes represent approximately 22% of the Brazilian Southeastern railway system&#146;s total volume. As of
December 31, 2008, US&#36;1,578 million were outstanding and payable by MRS to the Brazilian government federal agencies within the next 18 years, of which US&#36;1,527 million are treated as an off-balance sheet item (See &#147;Item 5E. Off-Balance
Sheet Arrangements&#148;). While we are jointly and severally liable with the other principal MRS shareholders for the full payment of the outstanding amount, we expect that MRS will make the lease payments through internally generated funds and
proceeds from financing. </P>
<P align="justify">
<I>Northeastern Railway System</I> </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of December 31, 2008, we hold 84.5% of the capital stock of Transnordestina Log&iacute;stica S.A., a company which is jointly-controlled by us and Taquari Participa&ccedil;&otilde;es S.A. (a company controlled by the Steinbruch family) pursuant to a shareholders' agreement dated November 27, 1997, as amended on May 6, 1999 and on November 7, 2003. Transnordestina Log&iacute;stica S.A. has a 30-year concession granted in 1998 to operate Brazil&rsquo;s Northeastern railway system. The Northeastern railway system covers 4,238 km of track and operates in the states of Maranh&atilde;o, Piau&iacute;, Cear&aacute;, Para&iacute;ba, Pernambuco, Alagoas and Rio Grande do Norte. It also connects with the region&rsquo;s leading ports, thereby offering an important competitive advantage through opportunities for intermodal transportation solutions and made-to-measure logistics projects. As of December 31, 2008, R$38.7 million was outstanding over the remaining 18-year term of the concessi




on, of which R$37.7 million are treated as an off-balance sheet item (See &ldquo;Item 5E. Off-Balance Sheet Arrangements&rdquo;). We and the Steinbruch family are jointly and severally liable for the full payment of the outstanding amount. For more information on the merger and financings for Transnordestina, see &ldquo;Item 4A. History and Development of the Company &mdash;Planned Investments&mdash;Transnordestina.&#148; </P>
<P align="justify">
<B><I>Port Facilities </I></B></P>
<P align="justify">
<I>Solid Bulks Terminal</I> </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We hold the concession to operate a solid bulks terminal, one of four terminals that form the Itagua&iacute; Port, located in the State of Rio de Janeiro, for a term expiring in 2022 and renewable for another 25 years.
Itagua&iacute; Port, in turn, is connected to the Presidente Vargas steelworks, Casa de Pedra and CFM by the southeastern railway system. Our imports of coal and coke are made through this terminal. Under the terms of the concession, we undertook to
unload at least 3.4 million tons of coal and coke from our suppliers through the terminal annually, as well as shipments from third parties. Among the approved investments that we announced is the development and
expansion of the solid bulks terminal at Itagua&iacute; to also handle up to 160 million tons of iron ore per year. For further information, see &#147;Item 4A. History and Development of the Company &#151;Planned Investments&#151;Iron Ore
Project.&#148; </P>
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<P align="justify"><I>Container Terminal</I> </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We own 99.99% of Sepetiba Tecon S.A., or Tecon, which has a concession to operate, for a 25-year term that is renewable for another 25 years, the container terminal at Itagua&iacute; Port. As of December 31, 2008,
US&#36;139 million of the cost of the concession remained payable over the next 18 years of the lease. For more information, see &#147;Item 5E. Off-Balance Sheet Arrangements.&#148; The Itagua&iacute; Port is located in the heart of Brazil&#146;s
Southeast Region, with all major exporting and importing areas of the states of S&atilde;o Paulo, Minas Gerais and Rio de Janeiro within 500 km from the port. This area represents more than 60% of the Brazilian gross domestic product, or GDP. The
Brazilian Federal Port Agency spent US&#36;70 million in port infrastructure projects such as expanding the maritime access channel and increasing the depth from 18.5 meters to 20 meters. In addition, significant investments are also being made by
the Brazilian federal government in adding two extra lanes to the Rio Santos road, in constructing the Rio de Janeiro Metropolitan Bypass, a beltway that will cross the Rio de Janeiro metropolitan area. Also, MRS railway is investing in an extra
rail track along the way to the Itagua&iacute; Port. These factors, combined with favorable natural conditions, like natural deep waters and low urbanization rate around port area, allow the operation of large vessels as well as highly competitive
prices for all the services rendered, result in the terminal being a major hub port in Brazil. For further information on our planned investments relating to our Itagua&iacute; CSN Logistics Platform Project, see &#147;Item 4A. History and
Development of the Company &#151;Planned Investments&#151;Itagua&iacute; CSN Logistics Platform Project.&#148; </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With new services available and the volume increase in the existing services, the terminal achieved 213,516 units handled (or 314,205 TEUs) in 2008, a 19.3% increase as compared to 2007. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The figures show the success of investments made since 2007 in two Super Post Panamax Portainers and two Rubber Tired Gantry, or RTG, cranes. These investments, along with a solid marketing and sales strategy, enabled
the terminal to take the first position in market share among the four terminals of the Rio de Janeiro and Esp&iacute;rito Santo states, with 30% of total moves in those terminals. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We plan to carry out new infrastructure and equipment investments in Sepetiba Tecon, as the Berth 301 Equalization and the acquisition of two new Super Post Panamax Portainers and four new RTG cranes to yard operations.
These investments will burst Tecon&#146;s capacity from 320,000 containers (or 480,000 TEUs) to 410,000 containers (or 610,000 TEUs) a year and from 2.0 million tons to 6.0 million tons a year of steel products. We intend to use this port to ship
all our exports of steel products. In 2008, 82% of the steel products we exported, or 300,575 tons, were shipped from this port, as compared to 70% in 2007. </P>
<P align="justify">
<B>Insurance </B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In view of the nature of our operations, we renewed with international reinsurance companies, for the period from February 21, 2008 to February 21, 2009, the All Risks coverage for operational risks for the Presidente
Vargas Steelworks, Casa de Pedra Mine, Arcos Mine, Paran&aacute; Branch, Coal Terminal - Tecar, GalvaSud (property damage and loss of profits), Container Terminal - Tecon and ERSA (loss of profits), for a total risk amount of US&#36;9.57 billion
(property damage and loss of profit) and a maximum indemnification amount, in the event of an accident, of US&#36;750 million (R&#36;1.3 billion) for property damage and loss of profits. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the period comprised from February 22, 2009 to February 19, 2010, we are negotiating coverage for operational risks with insurance and reinsurance companies in Brazil and abroad. We believe that we have sufficient
cash in hand to cover all losses that would be covered under a US&#36;750 million insurance policy in case of losses sufferred due to an accident with our facilities. For information on how our lack of insurance coverage may affect us, see
&#147;Item 3D&#151;Risk Factors&#151;Malfunctioning equipment or accidents on our premises, railways or ports may decrease or interrupt production, internal logistics or distribution of our products. We do not have insurance policies to cover losses
and liabilities in connection with operational risks, and may not have sufficient insurance coverage for certain other events.&#148; </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The risk assumptions adopted, given their nature, are not part of the scope of a financial statements audit, and, consequently, they were not examined by our independent auditors.  </P>
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<P align="justify">
<B><I>Blast Furnace No. 3 Claim </I></B><B><I> </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On January 22, 2006 an accident involving equipment adjacent to Blast Furnace No. 3 occurred, mainly affecting the powder collecting system, and interrupted our production until the end of the first half of that
year.</P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The amount of the Company&#146;s insurance policy for loss of profits and equipment, effective on the date of the claim, was capped at US&#36;750 million, which our management deemed sufficient to recover all losses
derived from the accident. The cause of the accident is covered by the policy expressly recognized by the insurance companies. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December 12, 2008, we and reinsurance companies concluded the discussions on the claim filed in 2006 for the accident at Blast Furnace No. 3. The indemnification amount was established at US&#36;520 million. As a
result, reinsurance companies paid us the remaining balance of US&#36;160 million. For further information, see Note 4 to our consolidated financial statements included in &#147;Item 18. Financial Statements.&#148; </P>
<P align="justify">
<B>Intellectual Property </B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have several technical cooperation agreements with universities and research institutes in order to provide us with special technical reports, assistance and advice related to specific products and processes.
Moreover, we have several pending patent applications, in addition to several patents approved by, the Brazilian National Institute of Industrial Property (<I>Instituto Nacional da Propriedade Industrial</I>), or INPI.</P>
<P align="justify">
<B>Competition in the Steel Industry</B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Both the worldwide and the Brazilian steel markets are intensely competitive. The primary competitive factors in these markets include quality, price, payment terms and customer service. Further, continuous advances in
materials sciences and resulting technologies have given rise to improvements in products such as plastics, aluminum, ceramics, glass and concrete that permit them to substitute steel for certain purposes. </P>
<P align="justify">
<B><I>Competition in the Brazilian Steel Industry </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The primary competitive factors in the domestic market include quality, price, payment terms and customer service. Although we compete with other integrated Brazilian steel mills, we have not experienced significant
import competition in Brazil from foreign steel companies. Several foreign steel companies, however, are significant investors in Brazilian steel mills. </P>
<P align="justify">
The following table sets forth the production of crude steel by Brazilian companies for the years indicated: </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD width=40%></TD>
	<TD width=2%></TD>
	<TD width=8%></TD>
	<TD width=2%></TD>
	<TD width=8%></TD>
	<TD width=2%></TD>
	<TD width=8%></TD>
	<TD width=2%></TD>
	<TD width=8%></TD>
	<TD width=2%></TD>
	<TD width=8%></TD>
	<TD width=2%></TD>
	<TD width=8%></TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD colspan="3" align=center><B>2006</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD colspan="3" align=center><B>2007</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD colspan="3" align=center><B>2008</B>&nbsp;</TD>
  </TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD colspan="3" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center"></TD>
	<TD colspan="3" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center"></TD>
	<TD colspan="3" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
<TR>
	<TD colspan=13>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>Ranking</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><b>Production</b>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>Ranking</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><b>Production</b>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>Ranking</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><b>Production</b>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center"></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center"></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center"></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center"></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center"></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><I>(In million</I>&nbsp;<I>tons)</I></TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><I>(In million</I>&nbsp;<I>tons)</I></TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><I>(In million</I>&nbsp;<I>tons)</I></TD>
</TR>
<TR valign="bottom">
	<TD align=left>Gerdau<SUP>(2)</SUP></TD>
	<TD>&nbsp;</TD>
	<TD align=center>2&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>7.7&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>2&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>8.1&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>1&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>8.7&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Usiminas<SUP>(1)</SUP></TD>
	<TD>&nbsp;</TD>
	<TD align=center>1&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>8.8&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>1&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>8.7&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>2&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>8.0&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>ArcelorMittal Tubar&atilde;o<SUP>(4)</SUP></TD>
	<TD>&nbsp;</TD>
	<TD align=center>3&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>5.1&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>3&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>5.7&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>3&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>6.2&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>CSN<SUP>(3)</SUP></TD>
	<TD>&nbsp;</TD>
	<TD align=center>5&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>3.5&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>4&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>5.3&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>4&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>5.0&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>ArcelorMittal A&ccedil;os Longos&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>4&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>3.6&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>5&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>3.7&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>5&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>3.5&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Others&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>2.2&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>2.2&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>2.3&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>Total</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>30.9</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>33.7</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>33.7</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
	<TD colspan=13>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Source: IBS&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR>
	<TD colspan=13>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD colspan=13 align=left>(1) Since 1999, Usiminas has had a majority stake in Cosipa, and the companies have acted as a group. In 2005, Cosipa was merged into Usiminas. Data from Cosipa have been merged data from Usiminas.&nbsp;<br>
    (2) Data from A&ccedil;os Villares have been merged into data from Gerdau.&nbsp;<br>
    (3) In 2006, CSN&#146;s production was negatively affected by an accident of its biggest blast furnace. Since the second half of that &nbsp;year, CSN has been operating at its full capacity.&nbsp;</TD>
</TR>
</TABLE>
<BR>
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<P align="justify">
(4) In 2005, Arcelor S.A. accomplished a shareholder restructuring of its companies in Brazil, resulting in a consolidation of its stakes on CST, Belgo and Vega do Sul in a new company called Arcelor Brasil.</P>
<P align="justify">
<B><I>Competitive Position &#151; Global </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During 2008, Brazil retained its place as the largest producer of crude steel in the Latin America, with a production output of 33.7 million tons and a 2.6% share of total world production, according to data from IBS.
In 2008, Brazil was the ninth world&#146;s steel producer, accounting for approximately two-thirds of total production in Latin America, approximately twice the size of Mexico&#146;s and approximately one-third of U.S. steel production, according to
data from the World Steel Association, or WSA. Brazilian exports in 2008 reached 8.2 million tons of finished and semi-finished steel products. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We compete on a global basis with the world&#146;s leading steel manufacturers. We have positioned ourselves in the world market with a product mix characterized by high margin and strong demand, such as, tin mill and
galvanized. We have relatively low-cost and sufficient availability of labor and energy, and own high-grade iron ore reserves that we believe more than meet our production needs. These global market advantages are partially offset by costs of
transporting steel throughout the world, usually by ship. Shipping costs, while helping to protect our domestic market, put pressure on our export price. To maintain our position in the world steel market in light of the highly competitive
international environment with respect to price, our product quality and customer service must be maintained at a high level. We have continually monitored the quality of our products by measuring customer satisfaction with our steel in Europe, Asia
and the Americas. See &#147;Item 4B. Business Overview&#151;Government Regulation and Other Legal Matters&#151;Proceedings Related to Protectionist Measures&#148; for a description of protectionist measures being taken by steel-importing countries
that could negatively impact our competitive position. </P>
<P align="justify">
<B><I>Competitive Advantages of the Brazilian Steel Industry </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Brazil&#146;s principal competitive advantages are its abundant supply of low-cost, high-grade iron ore and energy resources. Brazil also benefits from a vast internal market with a large growth potential, a privatized
industry making investments in plant and equipment, and deep water ports that allow the operation of large ships, which facilitates access to export markets. Nevertheless, Brazil&#146;s products have lost partially their competitiveness, mainly due
to the appreciation of the <I>real</I> against the U.S. dollar since the beginning of 2006, which resulted in the increase of the price of our products.  During the second half of 2008, the <I>real</I> significantly devaluated against the U.S.
dollar, restoring our price advantage. This competitive advantage, however, was not sufficient to compensate for the effects of the financial crisis and weak demand. Despite all these factors, we believe Brazil&#146;s average cost of steel
production is one of the lowest in the world. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As in most domestic markets, the domestic price of steel in Brazil has historically been higher than its export price. The low production costs in Brazil are a barrier to foreign steel imports. Consequently, most of the
steel sold in the Brazilian steel market is manufactured by Brazilian producers, and we do not believe that sales in Brazil by foreign producers will increase significantly or that steel prices in Brazil will decrease significantly because of
competition from foreign steel producers. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Competition from greenfield projects of new market entrants would be discouraged by existing participant&#146;s ties to sources of raw materials and well-established distribution networks. In the last years, several
foreign competitors announced their intention to undertake greenfield projects in Brazil. To date, some of these competitors have cancelled or postponed their projects, while others continue to evaluate the feasibility of such projects, in
particular due to the 2008 financial crisis which significantly impacted demand, prices and credit availability. The strategic goal of these projects, as announced by their participants, is to replace non-competitive slab production plants in Europe
or to expand upon slab capacity production of Asian companies in order to service their home markets. </P>
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<P align="justify">
<B>Government Regulation and Other Legal Matters </B></P>
<P align="justify">
<B><I>Environmental Regulation </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Promoting responsible environmental and social management is part of our business. We prioritize processes and equipments that offer the most modern and reliable technologies on environmental risks monitoring and
control. We operate a corporate environmental department managed under an Environmental Management System, or EMS, compliant with ISO 14001:2004 requirements. In addition, we have a factory committee for environmental management composed of
professionals from all departments of CSN&#146;s main steelworks. This factory committee usually meets every week to discuss any problem and to identify risks and aspects of the operations in which the group can act pro-actively, in order to prevent
possible environmental harm. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are subject to Brazilian federal, state and municipal environmental laws and regulations governing air emissions, waste water discharges, and solid and hazardous waste handling and disposal. We are committed to
controlling the substantial environmental impact caused by our steelmaking, mining and logistics operations, in accordance with international standards and in compliance with environmental laws and regulations in Brazil. We believe we are currently
in substantial compliance with applicable environmental requirements. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Brazilian Federal Constitution gives both the federal and state governments power to enact environmental protection laws and issue regulations under such laws. In addition, we are subject to municipal environmental
laws and regulations. While the Brazilian government has power to promulgate environmental regulations setting forth minimum standards of environmental protection, state and local governments have the power to enact more stringent environmental
regulations. Most of the environmental regulations in Brazil are thus at the state and local level complemented by a current process of regulations reviews and new propositions at the federal level. The environmental regulations of the State of Rio
de Janeiro, in which the Presidente Vargas steelworks is located, are plant-specific. Thus, specific goals and standards are established in operating permits or environmental accords issued to each company or plant. These specific operation
conditions complement the standards and regulations of general applicability and are required to be observed throughout the life of the permit or accord. The terms of such operating permits are subject to change and are likely to become stricter.
All of our facilities currently have operating permits. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2008, we requested and obtained several emissions permits and renewals of environmental permits, both for current operations and for the development of new projects regarding steel and cement manufacturing, iron ore
and limestone mining and logistics, including: (i) the expansion of the Casa de Pedra mine; (ii) the expansion of the Presidente Vargas steelworks; (iii) the expansion of the Solid Bulks Terminal of Itagua&iacute; Port, in the State of Rio de
Janeiro, or TECAR, aiming at exports of iron ore; and (iv) the construction of a cement mill at Volta Redonda. </P>
<P align="justify">
<B><I>Environmental Expenditures and Claims </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since our privatization, we have invested heavily in environmental protection and remediation programs. We had environmental expenditures (capitalized and expensed) of US&#36;109.0 million in 2006, US&#36;144.9 million
in 2007 and US&#36;180.0 million in 2008. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our investments in environmental projects during 2008 were related mainly to: (i) operations and maintenance of environmental control equipments; (ii) development of environmental studies for permit applications and
(iii) studies monitoring and remediation of environmental liabilities due to prior operations, mainly before our privatization. From a total of US&#36;180.0 million spent in 2008, US&#36;61.8 million constituted capital expenditures and US&#36;118.2
million constituted operational expenditures. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our main environmental claims on December 31, 2008 were associated with cleaning-up obligations at former coal mines decommissioned in 1989; legal environmental compensation projected for new projects at the States of
Minas Gerais and Rio de Janeiro; and cleaning-up obligations due to former operations of Presidente Vargas steelworks. We did not include in the accruals any environmental liabilities related to ERSA, as they were born by its former owner. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We reserve an accrual for remediation costs and environmental lawsuits when a loss is probable and the amount can be reasonably estimated. We record provisions for all environmental liabilities and obligations of which
we are formally notified by competent judicial and administrative authorities. As of December 31, 2008, we had provisions for environmental liabilities in the total amount of US&#36;30.5 million (R&#36;71.3 million), as compared to US&#36;31.2
million as of December 31, 2007, which our management and legal advisors consider sufficient to cover all probable losses. For further information, see Note 17(b) to our consolidated financial statements included in &#147;Item 18. Financial
Statements.&#148; </P>
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<P align="justify"><B><I>Mining Concessions </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our mining operations are governed by the Brazilian Federal Constitution and the Mining Code and are subject to the laws, rules and regulations promulgated pursuant thereto. Under the Brazilian Constitution, all mineral
resources belong to Brazil. Our mining activities at the Casa de Pedra mine are performed based on a <I>Manifesto de Mina</I>, which gives us full ownership over the mineral deposits existing within our property limits. Our mining activities at
Engenho and Fernandinho mines are based on a concession, which grants us the right to mine for as long as ore reserves exist. Our mining activities at the Bocaina mine are based on a concession under the same conditions. See &#147;Item 4D. Property,
Plant and Equipment&#148; for further information on our reserves at the Casa de Pedra mine and resources at Fernandinho and Engenho mines. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Mining Code and the Brazilian Federal Constitution impose on mining companies, such as us, requirements relating to, among other things, the manner in which mineral deposits are exploited, the health and safety of
workers, the protection and restoration of the environment, the prevention of pollution and the promotion of the health and safety of local communities where the mines are located. The Mining Code also imposes certain notification and reporting
requirements. </P>
<P align="justify">
<B><I>Antitrust Regulation </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are subject to various laws in Brazil which seek to maintain a competitive commercial environment in the Brazilian steel industry. For instance, under Law No. 8,884/94, the <I>Lei de Defesa da Concorr&ecirc;ncia</I>,
or Competition Defense Law, the <I>Secretaria de Direito Econ&ocirc;mico</I> of Brazil&#146;s Ministry of Justice has broad authority to promote economic competition among companies in Brazil, including the ability to suspend price increases and
investigate collusive behavior between companies. In addition, if the CADE determines companies have acted collusively to raise prices, it has the authority to impose fines on the offending companies, prohibit them from receiving loans from
Brazilian government sources and bar them from bidding on public projects.  In addition, CADE has the authority to dissolve mergers and to require a company to divest assets should it determine that the industry in which it operates is
insufficiently competitive. </P>
<P align="justify">
<B><I>Proceedings Related to Protectionist Measures</I></B><B> </B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Over the past several years, exports of steel products from various countries and companies, including Brazil and us, have been the subject of anti-dumping, countervailing duty and other trade related investigations
from importing countries. These investigations resulted in duties that limit our access to certain markets. Despite the imposed limitations, our exports have not been significantly affected, as we were able to re-direct our sales from restricted
markets to other markets, and also because the volume of exports or products available for exports was smaller as a result of the increased demand from our domestic market. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Below are summaries of the protectionist measures to which our exports are subject. The widespread adoption of protectionist measures, even if by countries that have not been important markets for us, might nevertheless
adversely impact the international markets for our products. </P>
<P align="justify">
<I>United States </I></P>
<P align="justify">
<I>Anti-dumping and Countervailing Duties</I>.  In September 1998, U.S. authorities initiated anti-dumping and countervailing duties investigations on hot-rolled steel sheet and coil imported from Brazil and other countries. In February 1999, the
U.S. Department of Commerce, or DOC, reached a preliminary determination on the anti-dumping and countervailing duties margins. We were found to have preliminary margins of 50.66% for anti-dumping, and of 6.62% % for countervailing duties. In July
1999, Brazil and the United States signed a five-year suspension agreement, suspending the anti-dumping investigation and establishing a minimum price of US&#36;327 per ton (delivery duty paid), subject to quarterly review by the DOC. In February
2002, the U.S. government terminated
the anti-dumping suspension agreement and reinstated the anti-dumping margin of 41.27% . Also in July 1999, the Brazilian and U.S. governments signed a suspension agreement related to the countervailing duties investigation, which limited exports of
hot-rolled sheets and coils from Brazil to 295,000 tons per year. At the request of the Brazilian government, the agreement was terminated in September 2004. Upon the termination of this agreement, countervailing duties of 6.35% became effective in
September 2004, to be applied to imports of hot-rolled products from Brazil. In April 2004, we requested the DOC to conduct an administrative review of the anti-dumping investigation. Through this review, in April 2005, we obtained a favorable
preliminary determination of &#147;zero&#148; margin of dumping from the DOC. Final determination was issued in October 2005 and the &#147;zero&#148; margin of dumping preliminarly found by the DOC was confirmed. </P>
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<P align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Simultaneously to the administrative review, we participated in an anti-dumping and countervailing duties expiry review which involved the exports of hot-rolled sheet and coils to the U.S. The expiry review was jointly
developed by the International Trade Commission and the DOC, through the Import Administration- I.A., that was initiated in May 2004. Final determination was rendered in April 2005, retaining the anti-dumping and countervailing duties orders until
May 12, 2010. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In October 2005, the DOC initiated an administrative review of the investigation of subsidies and countervailing duties involving hot-rolled products. As the petitioners gave up on their participation in the review, it
was terminated by the DOC in February 2006. Since the countervailing duties refer to subsidies related to the privatization period, and the depreciation period was fixed in fifteen years by the investigation, by the time the next expiry review is
held by the International Trade Commission, in 2010, the effects of the subsidies involved will have been terminated, and therefore, the imposition of the countervailing duties might be discontinued. </P>
<P align="justify">
<I>Canada </I></P>
<P align="justify">
<I>Anti-dumping</I>. In January 2001, the Canadian government initiated an anti-dumping investigation process involving hot-rolled sheets and coils exported from Brazil. The investigation was concluded in August 2001, with the imposition by Canada
of an anti-dumping tax of 26.3% on imports of those products from Brazil, with minimum prices to be observed. In August 2002, the Canada Border and Services Agency, or the CBSA, initiated a revision of the values previously established and, in March
2003, the revised values were issued. These values are adjusted whenever there is an adjustment of the Canadian domestic prices. In February 2005, the CBSA initiated a reinvestigation of hot-rolled sheets and coils. We did not participate in this
investigation. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In December 2005, the Canadian International Trade Tribunal, or CITT, initiated an expiry review of hot-rolled products, in which we participated. A final determination was issued in August 2006, determining the
continuation of the anti-dumping order for hot-rolled products. As a result, exports of our hot&#150;rolled products to Canada are subject to anti-dumping duties of 77%. </P>
<P align="justify">
<I>Argentina </I></P>
<P align="justify">
<I>Anti-dumping &#150; hot-rolled products</I>. Argentina commenced an anti-dumping investigation of hot-rolled products from Brazil, Russia and Ukraine in October 1998. In April 1999, the Argentinean government applied a provisional anti-dumping
order on Brazilian imports, fixing a minimum price of US&#36;410 per ton FOB (free on board), for four months ending in August 1999. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In December 1999, the Argentine government accepted a suspension agreement of the anti-dumping measures, providing for quotas of 36,000 tons for the first year, 38,000 tons for the second and 39,000 tons for the third,
fourth and fifth years, and minimum prices from US&#36;325 to US&#36;365 per ton CFR FO (cost, insurance and freight, free out), subject to quarterly adjustments based on the publication of the Argentine National Institute of Statistics and Census,
or INDEC. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In December 2004, exporters were notified of the revision of resolution No. 1,420/1999 from the Economic, Work and Public Services Ministry of Argentina relating to the export of Brazilian hot-rolled products. In
January 2005, an expiry review of the anti-dumping process was initiated to analyze the maintenance, modification and/or derogation of the action of the administrative authority of the Argentinean government. We participated in this review. </P>
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<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In June 2006, Argentina published resolution No. 412/2006 terminating the anti-dumping investigation for hot-rolled products from Brazil, Russia and Ukraine, determining to Brazil the margin of 147.95% . The application
of anti-dumping duties was replaced by a suspension agreement set forth in that same resolution, valid for five years from its publication, on June 6, 2006. </P>
<P align="justify">
<B>Overview of Steel Industry</B> <B> </B></P>
<P align="justify">
<B><I>World Steel Industry </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The worldwide steel industry comprises hundreds of steelmaking facilities divided into two major categories, integrated steelworks and non-integrated steelworks, characterized by the method used for producing steel.
Integrated plants, which accounted for approximately 66% of worldwide crude steel production in 2008, typically produce steel by smelting in blast furnaces the iron oxide found in ore and refining the iron into steel, mainly through the use of basic
oxygen furnaces or, more rarely, in electric arc furnaces. Non-integrated plants (sometimes referred to as mini-mills), which accounted for approximately 34% of worldwide crude steel production in 2008, produce steel by melting scrap metal,
occasionally complemented with other metallic materials, such as direct reduction iron or hot-briquette iron, in electric arc furnaces. Industry experts expect that a lack of a reliable and continuous supply of quality scrap metal, as well as the
high cost of electricity, may restrict the growth of mini- mills. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Steel continues to be the material of choice in the automotive, construction, machinery and other industries. Notwithstanding potential threats from substitute materials such as plastics, aluminum, glass and ceramics,
especially for the automotive industry, steel continues to demonstrate its economic advantage. From 1990 through 2005, total global crude steel production ranged between approximately 770 million and 1.1 billion tons per year. In 2007, it reached
1.34 billion tons, representing a 7.5% increase as compared to 2006. In 2008, global crude steel production decreased 1.2% as compared to 2007, and reached 1.33 billion tons. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;China became the first country ever to produce more than 500 million tons of crude steel in one year. China&#146;s crude steel production in 2008 reached 500 million tons, an increase of 2.6% as compared to 2007.
Production volume in China has more than doubled in five years, from 222 million tons in 2002. China&#146;s share of world steel production continued to grow in 2008, reaching 38% of world total crude steel. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Asia produced 750 million tons of crude steel in 2008, representing 58% of world total steel production and an increase of 1.9% as compared to 2007. South Korea and India recorded increases in steel production of 3.8%
and 3.7%, respectively, in 2008. Overall, steel production declined in Europe, North America, South America and Commonwealth of Independent States in 2008. <B> </B></P>
<P align="justify">
<B><I>Brazilian Steel Industry </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since the 1940s, steel has been of vital importance to the Brazilian economy. During the 1970s, huge government investments were made to provide Brazil with a steel industry able to support the country&#146;s
industrialization boom. After a decade of little to no investment in the sector in the 1980s, the government selected the steel sector as the first for privatization commencing in 1991, resulting in a more efficient group of companies operating
today. </P>
<P align="justify">
<I>A Privatized Industry </I></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During almost 50 years of state control, the Brazilian flat steel sector was coordinated on a national basis under the auspices of <I>Siderbr&aacute;s</I>, the national steel monopoly. The state had far less involvement
in the non-flat steel sector, which has traditionally been made up of smaller private sector companies. The larger integrated flat steel producers operated as semi autonomous companies under the control of Siderbr&aacute;s and were each individually
privatized between 1991 and 1993. We believe that the privatization of the steel sector in Brazil has resulted in improved financial performance, as a result of increased efficiencies, higher levels of productivity, lower operating costs, a decline
in the labor force and an increase in investment. </P>
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<P align="justify">
<I>Domestic Demand </I></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Historically, the Brazilian steel industry has been affected by substantial fluctuations in domestic demand for steel. Although national per capita consumption varies with GDP, fluctuations in steel consumption tend to
be more pronounced than changes in economic activity. Per capita crude steel consumption in Brazil has increased from 95 kilograms per capita in 1999 to 141 kilograms in 2008, which is considered low when compared to levels in developed countries
such as the United States, where the per capita crude steel consumption in 2007 was of 373 kilograms, and Germany, where the consumption was of 558 kilograms. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;From 2005 to 2007, despite a good global conjuncture, the Brazilian economy exhibited an average growth GDP of 4.5% . Since September 2008, overall global economy activity has slowed significantly, which impacted our
fourth quarter results. Domestic steel sales in 2007 and 2008 were 22 million tons and 24 million tons, respectively.</P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Brazilian flat steel sector is shifting production to the higher value-added consumer durable sector. This sector is highly dependent on domestic consumer confidence, which, in turn, is affected by economic policies
and certain expectations of the current government administration. Over the past years, automobile manufacturers made significant investments in Brazil. Vehicles production increased regularly in the past years, until September 2008, when the
effects the 2008 of financial crisis grew in size and scope. In spite of the slowdown in automobile production, market data indicates a recovery in car sales since the beginning of 2009. </P>
<P align="justify">
<I>Market Participants </I></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;According to IBS, the Brazilian steel industry is composed of 26 mills managed by 8 corporate groups, with an installed annual capacity of approximately 41 million tons, producing a full range of flat, long, carbon,
stainless and specialty steel. For information on the production by the largest Brazilian steel companies for the years ended December 2006, 2007 and 2008, see &#147;Item 4B. Business Overview&#151;Competition&#151;Competition in the Brazilian Steel
Industry.&#148; </P>
<P align="justify">
<I>Capacity Utilization </I></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Brazilian nominal capacity in 2008 was estimated at 41.5 million tons, as compared to 38.8 million tons in 2007. The Brazilian steel industry operated at approximately 81% of nominal crude steel capacity during
2008, as compared to 82% in 2007. </P>
<P align="justify">
<I>Exports/Imports </I></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Brazil has been playing an important role in the export market, primarily as an exporter of semi-finished products. The Brazilian steel industry has taken several steps towards expanding its capacity to produce
value-added products. Brazil&#146;s exports of semi-finished steel products reached 5.1 million tons in 2007 and 5.7 million tons in 2008, which represented 49% and 62% of total steel exports for each period, respectively. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2008, Brazilian steel exports totaled 9.2 million tons, representing 30% of total Brazilian steel sales (domestic plus exports) and accounting for US&#36; 8.0 billion in export earnings for Brazil in 2008. Over the
last 20 years, the Brazilian steel industry has been characterized by a structural need to export, which is demonstrated by the industry&#146;s supply demand curve. The Brazilian steel industry has experienced periods of overcapacity, cyclicality
and intense competition during the past several years. Demand for finished steel products, as measured by domestic apparent consumption, has consistently fallen short of total supply (defined as total production plus imports). In 2008, supply
totaled 33.8 million tons, as compared to apparent consumption of 24.0 million tons. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Brazil also enjoys a diversified steel export market. In 2008, export sales were made to over 120 countries. North America and South America were Brazil&#146;s main export markets, accounting for 14% and 30%,
respectively, of all Brazilian steel exports in such year. United States was the main destination, representing 13% of total exports. The European Union was responsible for 12% of the Brazilian steel exports in 2008, while Asia, Africa and the
Middle East were responsible for 44%. The ten largest markets, taken together, accounted for 77% of Brazil&#146;s steel exports in 2008. See also &#147;Item 4B. Business Overview&#151;Competition.&#148; </P>
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<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result, Brazil is a negligible importer of foreign steel products. Steel imports were 2.7 million tons, or 11% of apparent domestic consumption in 2008, as compared to 1.6 million tons, or 7.3% in 2007, according
to IBS.</P>
<P align="justify">
<B>4C. Organizational Structure </B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We do business directly and through subsidiaries. For more information on our organizational structure, see Note 1(a) to our consolidated financial statements included in &#147;Item 18. Financial Statements.&#148; </P>
<P align="justify">
<B>4D. Property, Plant and Equipment </B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our principal executive offices are located in the city of S&atilde;o Paulo, the State of S&atilde;o Paulo at Avenida Faria Lima, 3,400, 20th floor (telephone number 55-11-3049-7100), and our main production operations
are located in the city of Volta Redonda, in the State of Rio de Janeiro, located approximately 120 km from the city of Rio de Janeiro. Presidente Vargas steelworks, our steel mill, is an integrated facility covering approximately 4.0 square km and
located in the city of Volta Redonda in the State of Rio de Janeiro. Our iron ore, limestone and dolomite mines are located in the State of Minas Gerais, which borders the State of Rio de Janeiro to the north. Each of these mines is within 500 km
of, and is connected by rail and paved road to, the city of Volta Redonda. </P>
<P align="justify">
The table below sets forth certain material information regarding our property as of December 31, 2008. </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD></TD>
	<TD width=2%></TD>
	<TD width=13%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD></TR>

<TR valign="bottom">
	<TD align=center valign="bottom"><B>Facility</B>&nbsp;</TD>
	<TD align="center" valign="bottom">&nbsp;</TD>
	<TD align=center valign="bottom"><B>Location</B>&nbsp;</TD>
	<TD align="center" valign="bottom">&nbsp;</TD>
	<TD align=center valign="bottom"><B>Size</B>&nbsp;</TD>
	<TD align="center" valign="bottom">&nbsp;</TD>
	<TD align=center valign="bottom"><B>Use</B>&nbsp;</TD>
	<TD align="center" valign="bottom">&nbsp;</TD>
	<TD align=center valign="bottom"><B>Productive</B>&nbsp;<br>
    <B>Capacity</B>&nbsp;</TD>
	<TD align="center" valign="bottom">&nbsp;</TD>
	<TD align=center valign="bottom"><B>Title</B>&nbsp;</TD>
	<TD align="center" valign="bottom">&nbsp;</TD>
	<TD align=center valign="bottom"><B>Encumbrances</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD align="center" valign="top" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center" valign="top"></TD>
	<TD align="center" valign="top" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center" valign="top"></TD>
	<TD align="center" valign="top" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center" valign="top"></TD>
	<TD align="center" valign="top" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center" valign="top"></TD>
	<TD align="center" valign="top" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center" valign="top"></TD>
	<TD align="center" valign="top" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center" valign="top"></TD>
	<TD align="center" valign="top" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
	<TD colspan=13 align="center" valign="top">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left valign="top">Presidente Vargas&nbsp;steelworks&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">Volta Redonda,&nbsp;State of Rio de&nbsp;Janeiro&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">4.0 square km&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">steel mill&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">5.6 million tons per&nbsp;year&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">owned&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">None&nbsp;</TD></TR>


<TR align="left">
	<TD colspan=13 valign="top">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left valign="top">GalvaSud&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">Porto Real, State of&nbsp;Rio de Janeiro&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">0.27 square km&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">galvanized steel&nbsp;producer&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">350,000 tons per&nbsp;year&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">owned&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">mortgage<SUP>(1)(2)</SUP></TD></TR>

<TR align="left">
	<TD colspan=13 valign="top">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left valign="top">&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD rowspan="2" align=center valign="top">Arauc&aacute;ria, State of&nbsp;Paran&aacute;&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left valign="top">CSN Paran&aacute;&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">0.98 square km&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">galvanized and pre-painted products&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">100,000 tons of pre-&nbsp;painted product and&nbsp;220,000 tons of&nbsp;pickled hot-rolled&nbsp;coils&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">owned&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">None&nbsp;</TD></TR>

<TR align="left">
	<TD colspan=13 valign="top">&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left valign="top">Metalic&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">Maracana&uacute;, State of&nbsp;Cear&aacute;&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">0.10 square km&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">steel can&nbsp;manufacturer&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">900 million cans per&nbsp;year&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">owned&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">mortgage<SUP>(3)</SUP></TD></TR>

<TR align="left">
	<TD colspan=13 valign="top">&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left valign="top">Prada&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">S&atilde;o Paulo, State of S&atilde;o&nbsp;Paulo and&nbsp;Uberl&acirc;ndia, State of&nbsp;Minas Gerais&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">SP &#150; 0.14 square km;&nbsp;<br>
    MG &#150; 0.02 square km;&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">steel can&nbsp;manufacturer&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">1 billion cans per&nbsp;year&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">owned&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">None&nbsp;</TD></TR>

<TR align="left">
	<TD colspan=13 valign="top">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left valign="top">CSN, LLC&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">Terre Haute,&nbsp;Indiana, USA&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">0.78 square km&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">cold-rolled and&nbsp;galvanized products&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">800,000 tons of&nbsp;cold-rolled products&nbsp;and 315,000 tons&nbsp;per year of&nbsp;galvanized products&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">owned&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">None&nbsp;</TD></TR>
</TABLE>
<BR>
<P align="center">
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<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <TR>
    <TD></TD>
    <TD width=2%></TD>
    <TD width=13%></TD>
    <TD width=2%></TD>
    <TD width=13%></TD>
    <TD width=2%></TD>
    <TD width=13%></TD>
    <TD width=2%></TD>
    <TD width=13%></TD>
    <TD width=2%></TD>
    <TD width=13%></TD>
    <TD width=2%></TD>
    <TD width=13%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=center>&nbsp;<B>Facility</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>Location</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>Size</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>Use</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>Productive</B>&nbsp;<br>
        <B>Capacity</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>Title</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>Encumbrances</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR>
    <TD colspan=13>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="top">Lusosider&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD align=center valign="top">Seixal, Portugal&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD align=center valign="top">0.39 square km&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD align=center valign="top">hot-dip galvanized,&nbsp;cold-rolled and tin&nbsp;products&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD align=center valign="top">240,000 tons of&nbsp;galvanized&nbsp;products and 50,000&nbsp;tons of cold-rolled&nbsp;products per year&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD align=center valign="top">owned&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD align=center valign="top">None&nbsp;</TD>
  </TR>
  <TR align="left">
    <TD colspan=13 valign="top">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="top">Prada&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD align=center valign="top">Mogi das Cruzes,&nbsp;State of S&atilde;o Paulo&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD align=center valign="top">0.20 square km&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD align=center valign="top">distributor&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD align=center valign="top">730,000 tons per year&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD align=center valign="top">owned&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD align=center valign="top">None&nbsp;</TD>
  </TR>
  <TR align="left">
    <TD colspan=13 valign="top">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="top">Casa de Pedra mine&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD align=center valign="top">Congonhas, State of&nbsp;Minas Gerais&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD align=center valign="top">44.57 square km&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD align=center valign="top">iron ore mine&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD align=center valign="top">60.0 Mtpy <SUP>(4)</SUP></TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD align=center valign="top">owned <SUP>(7)</SUP></TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD align=center valign="top">None&nbsp;</TD>
  </TR>
  <TR align="left">
    <TD colspan=13 valign="top">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="top">Engenho mine&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD align=center valign="top">Congonhas, State of Minas&nbsp;Gerais&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD align=center valign="top">2.87 square km&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD align=center valign="top">iron ore mine&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD align=center valign="top">5.0 Mtpy&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD align=center valign="top">concession&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD align=center valign="top">None&nbsp;</TD>
  </TR>
  <TR align="left">
    <TD colspan=13 valign="top">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="top">Fernandinho mine&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD align=center valign="top">Itabirito, State of Minas&nbsp;Gerais&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD align=center valign="top">1.84 square km&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD align=center valign="top">iron ore mine&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD align=center valign="top">2.0 Mtpy&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD align=center valign="top">concession&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD align=center valign="top">None&nbsp;</TD>
  </TR>
  <TR align="left">
    <TD colspan=13 valign="top">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="top">Bocaina mine&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD align=center valign="top">Arcos, State of&nbsp;Minas Gerais&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD align=center valign="top">4.11 square km&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD align=center valign="top">limestone and&nbsp;dolomite mines</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD align=center valign="top">4.0 Mtpy&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD align=center valign="top">concession&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD align=center valign="top">None&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>ERSA mine&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>Ariquemes, State of Rond&ocirc;nia&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>0.015 square km&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>&nbsp;tin mine&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>1,800 tons&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>concession&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>None&nbsp;</TD>
  </TR>


<TR valign="bottom">
	<TD align=left valign="top">Thermoelectric co-&nbsp;generation power&nbsp;plant&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">Volta Redonda,&nbsp;State of Rio de&nbsp;Janeiro&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">0.04 square km&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">power plant&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">238 MW&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">owned&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">None&nbsp;</TD></TR>

<TR align="left">
	<TD colspan=13 valign="top">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left valign="top">It&aacute;&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">Uruguay River -&nbsp;Southern Brazil&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">9.87 square km&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">power plant&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">1,450 MW&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">concession&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">None&nbsp;</TD></TR>

<TR align="left">
	<TD colspan=13 valign="top">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left valign="top">Igarapava&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">State of Minas&nbsp;Gerais&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">5.19 square km&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">power plant&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">210 MW&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">concession&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">None&nbsp;</TD></TR>

<TR align="left">
	<TD colspan=13 valign="top">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left valign="top">Southeastern&nbsp;<br>
    Railway System <SUP>(5)</SUP></TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">Southern and&nbsp;Southeastern&nbsp;regions of Brazil&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">1,674 km of tracks&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">railway&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">--&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">concession&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">None&nbsp;</TD></TR>

<TR align="left">
	<TD colspan=13 valign="top">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left valign="top">Transnordestina&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">Northern and&nbsp;northeastern regions of Brazil&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">4,238 km of tracks&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">railway&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">--&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">concession&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">None&nbsp;</TD></TR>

<TR align="left">
	<TD colspan=13 valign="top">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left valign="top">TECAR at Itagua&iacute;&nbsp;Port&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">Itagua&iacute;, State of Rio de&nbsp;Janeiro&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">0.69 square km&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">raw materials&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">4 Mtpy&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">concession&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">None&nbsp;</TD></TR>

<TR align="left">
	<TD colspan=13 valign="top">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left valign="top">Container terminal -&nbsp;TECON at Itagua&iacute;&nbsp;port&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">Itagua&iacute;, State of Rio de Janeiro&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">0.44 square km&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">containers&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">2 Mtpy&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">concession&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">None&nbsp;</TD></TR>

<TR align="left">
	<TD colspan=13 valign="top">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left valign="top">Land&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">State of Rio de Janeiro&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">31.02 square km&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">undeveloped&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">--&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">owned&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">pledge<SUP>(6)/ </SUP>/Collateral&nbsp;/ mortgage<SUP>(2)</SUP></TD></TR>

<TR align="left">
	<TD colspan=13 valign="top">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left valign="top">Land&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">State of Santa&nbsp;Catarina&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">6.22 square km&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">undeveloped&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">--&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">owned&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">pledge<SUP>(6)/ </SUP>Collateral&nbsp;</TD></TR>

<TR align="left">
	<TD colspan=13 valign="top">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left valign="top">Land&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">State of Minas&nbsp;Gerais&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">29.09 square km&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">undeveloped&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">--&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">owned&nbsp;</TD>
	<TD align="center" valign="top">&nbsp;</TD>
	<TD align=center valign="top">None&nbsp;</TD></TR>
</TABLE>
<p> (1)&nbsp; &nbsp; &nbsp; Pursuant to a loan agreement entered into by the State of Rio de Janeiro and Galvasud as of May 4, 2000.
  <br>
  (2)&nbsp; &nbsp; &nbsp;
Pursuant to a loan agreement entered into by Kreditanstatt F&uuml;r Wiederafbau, Galvasud and Unibanco as of August 23, 1999.
<br>
(3)&nbsp; &nbsp; &nbsp; Pursuant to an industrial letter of credit issued by Banco do Nordeste do Brasil to Metalic, as of June 5, 2001, with maturity on February 5, 2011.
<br>
(4)&nbsp; &nbsp; &nbsp;
Information on equipment fleet installed annual ROM capacity. For information on installed annual production of products capacity, and information on mineral resources at our &nbsp;Casa de Pedra mine, see &#147;&#151;Reserves at Casa de Pedra Mine&#148;
and table under &#147;&#151;Casa de Pedra Mine&#148; below.
<br>
(5)&nbsp; &nbsp; &nbsp; We indirectly hold the concession through MRS.<br>
(6)&nbsp; &nbsp; &nbsp; Pledged pursuant to various legal proceedings, mainly related to tax claims.<br>
(7)&nbsp; &nbsp; &nbsp; Based on the <I>Manifesto de Mina</I>. See, &#147;Item 4A. History and Development of the Company&#151;Government Regulation and Other Legal Matters&#151;Mining Concessions.&#148;</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For information on environmental issues with respect to some of the facilities described above, see &#147;Item 4B. Business Overview&#151;Government Regulation and Other Legal Matters&#151;Environmental Expenditures and
  Claims.&#148; In addition, for information on our plans to construct, expand and improve our facilities, see &#147;Item 4A. History and Development of the Company &#151;Planned Investments.&#148; </p>
<P align="center">
48 </P>

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<P align="center">
<img src="fp49a.gif" width="504" height="428" border=0></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The map above shows the locations of the Presidente Vargas steelworks, the CSN Paran&aacute;, Prada, GalvaSud, Metalic, Lusosider, ERSA and CSN LLC facilities, our iron ore, limestone and dolomite mines, the power
generating facilities in which we have an ownership interest, and the main port used by us to export steel products and import coal and coke, as well as the main raiway connetions. </P>
<P align="justify">
<B>Our Mines </B></P>
<P align="justify">
<B><I>Casa de Pedra Mine</I></B></P>
<P align="justify">
<I>Location, Access and Operation </I></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Casa de Pedra mine is an open pit mine located next to the city of Congonhas in the State of Minas Gerais, Brazil, approximately 80 km South of Belo Horizonte and 360 km North of Rio de Janeiro. The site is
approximately 1,000 meters above sea level and accessible from the cities of Belo Horizonte or Congonhas through mostly paved roads. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Casa de Pedra mine is a hematite-rich iron deposit of an early proterozoic banded iron formation in Brazil&#146;s Iron Ore Quadrangle region (<I>Quadril&aacute;tero Ferr&iacute;fero</I>), which is located in the central
part of the State of Minas Gerais in the Southeastern region of Brazil and has been one of the most important iron producing regions for the last 50 years. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ore is currently excavated by a fleet composed of Marion 191M electric shovels, P&amp;H 1900AL electric shovels, PC 5500 Demag hydraulic shovels, wheel loaders (different brands) and then hauled by a fleet of Terex
TMT3300AC (150 tons), Komatsu Dresser 510E (150 tons), Caterpillar CAT793 (240 tons) and Terex Unit Rig (240 tons). Unit numbers may vary over time, depending on demand. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Casa de Pedra mine is wholly-owned by us and accounts for all our iron ore supply, producing lump ore, sinter feed and pellet feed fines with high iron content. </P>
<P align="center">
49 </P>

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<P align="justify">
The maps below illustrate the location of our Casa de Pedra mine: </P>
<P align="center">
<img src="fp50a.gif" width="470" height="236" border=0></P>
<P align="center">
<img src="fp50b.gif" width="373" height="394" border=0></P>
<P align="center">
50 </P>

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<P align="justify">
<I>Mining Rights and Ownership </I></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our mining rights for the Casa de Pedra mine include the mine, beneficiation plant, roads, loading yard and railway branch and are duly registered with the National Department of Mineral Production (<I>Departamento
Nacional da Produ&ccedil;&atilde;o Mineral</I>). We have also been granted by the National Department of Mineral Production easements in 15 mine areas located in the surrounding region, which are not currently part of the Casa de Pedra mine, and
hold title to all our proved and probable reserves. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, we have obtained and are in compliance with all licenses and authorizations for our operations and projects at Casa de Pedra mine. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Casa de Pedra ore reserves are subject to mining lease restrictions, which were duly addressed in our iron ore reserve calculations. Quality requirements (chemical and physical) are the key &#147;modifying
factors&#148; in the definition of ore reserves at Casa de de Pedra and were properly accounted for by the CSN mine planning department. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For information on our title to the Casa de Pedra mine, see &#147;&#151;Government Regulation and Other Legal Matters&#151;Mining Concessions.&#148; </P>
<P align="justify">
<I>Mineral Reserves </I></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have concluded an extensive, multi-year study of our iron ore reserves at Casa de Pedra. The study consisted of three phases. Phase one, which was completed in 1999, covered the ore bodies that are currently being
mined or are close to the current operating open pits. Phase two, which was completed in early 2003, covered the other iron ore deposits at Casa de Pedra site. Phase three started in 2005 and involved a complete revaluation of our mineral reserves
at Casa de Pedra. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We conducted extensive work throughout 2006 to document and classify all information related to both the current and future operations of the Casa de Pedra mine. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2006, we hired Golder Associates S.A., or Golder, to undertake an audit of the Casa de Pedra iron ore reserves. Golder carried out a full analysis of all available information and has independently validated our
reported reserves. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Golder accepts as appropriate the estimates regarding proven and probable reserves made by us, totaling 1,631 million tons of iron ore (as of December 31 2006) at a grade of 47.79% Fe and 26.63% SiO2. This new estimate
of our iron ore reserves at Casa de Pedra is significantly larger than our estimate of 444 million tons, reported on an appraisal report prepared in 2003. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are extending our drilling campaign with additional 10,000 meters to increase and improve our knowledge about the iron ore deposits at Casa de Pedra. When this drilling campaign is concluded, we intend to run a new
program of ore reserve audit. </P>
<P align="justify">
<B><I>Fernandinho and Engenho Mines </I></B></P>
<P align="justify">
<I>Location, Access and Operation </I></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Engenho mine is located at the Southwestern region of the Iron Ore Quadrangle, 60 km South of the city of Belo Horizonte. Access to the Engenho mine can only be obtained through internal roads from our Casa de Pedra
mine, which may be accessed from the cities of Belo Horizonte or Congonhas through mostly paved roads. </P>
<P align="justify">
The maps below illustrate the location of our Engenho mine: </P>
<P align="center">
51 </P>

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<P align="center">
<img src="fp52a.gif" width="353" height="470" border=0></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fernandinho mine is located in the municipality of Itabirito, Minas Gerais State. This town is located in the Middle-East region of Minas Gerais State and approximately 43 km from the city of Belo Horizonte. Access to
our Fernandinho mine is made directly from federal highway BR-040. </P>
<P align="justify">
The maps below illustrate the location of our Fernandinho mine: </P>
<P align="center">
52 </P>

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<H5 align="left" style="page-break-before:always"></H5>
<A name="page_53"></A><p align=right><a href="#topdraft">Table of Contents</a></p>

<P align="center">
<img src="fp53a.gif" width="359" height="342" border=0></P>
<P>
<I>Mining Rights and Ownership </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For information on our title to the Fernandinho and Engenho mines, see &#147;&#151;Government Regulation and Other Legal Matters&#151;Mining Concessions.&#148; </P>
<P>
<I>Mineral Reserves </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An initial study was conducted at Fernandinho and Engenho mines to define the geological resources and final pits. We are extending our drilling campaign with additional 10,000 meters at both mines this year to increase
and improve our knowledge about the iron ore deposits at these mines. We expect that, as soon this drilling campaign is concluded and a new model and final pit is finished, this reserve could be audited and incorporated at our mineral deposits. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth the type of each of our mines, period of operation, projected exhaustion dates and percentage of our interest: </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD></TD>
	<TD width=2%></TD>
	<TD width=16%></TD>
	<TD width=2%></TD>
	<TD width=16%></TD>
	<TD width=2%></TD>
	<TD width=16%></TD>
	<TD width=2%></TD>
	<TD width=16%></TD></TR>
<TR valign="bottom">
	<TD align=center><B>Mine</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>Type</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>Operating Since</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>Projected exhaustion date</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>CSN % interest</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>Iron:</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>

<TR valign="bottom">
  <TD align=left>Casa de Pedra (Congonhas, Minas&nbsp;Gerais)</TD>
	<TD>&nbsp;</TD>
	<TD align=center>Open pit&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>1913&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>2041&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>100&nbsp;</TD></TR>

<TR valign="bottom">
  <TD align=left>Engenho (Congonhas, Minas&nbsp;Gerais)</TD>
	<TD>&nbsp;</TD>
	<TD align=center>Open pit&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>2007 (Start of operation by Namisa)</TD>
	<TD>&nbsp;</TD>
	<TD align=center>2041&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>60&nbsp;</TD></TR>

<TR valign="bottom">
  <TD align=left>Fernandinho (Itabirito, Minas&nbsp;Gerais)</TD>
	<TD>&nbsp;</TD>
	<TD align=center>Open pit&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>2007 (Start of operation by Namisa)</TD>
	<TD>&nbsp;</TD>
	<TD align=center>2030&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>60&nbsp;</TD></TR>
<TR>
	<TD colspan=9>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>Limestone and Dolomite:</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Bocaina (Arcos, Minas Gerais)</TD>
	<TD>&nbsp;</TD>
	<TD align=center>Open pit&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>1946&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>2052&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>100&nbsp;</TD></TR>
<TR>
	<TD colspan=9>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>Tin:</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>(Itapo&atilde; do Oeste, Rond&ocirc;nia)</TD>
	<TD>&nbsp;</TD>
	<TD align=center>Open pit&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>1950&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>-&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>100&nbsp;</TD></TR>
</TABLE>
<BR>
<P align="center">
53 </P>

<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_54"></A><p align=right><a href="#topdraft">Table of Contents</a></p>

<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth our estimates of proven and probable reserves and other mineral deposits at our mines reflecting the results of reserve study. They have been calculated in accordance with the technical
definitions contained in the SEC&#146;s Industry Guide 7, and estimates of mine life described herein are derived from such reserve estimates. </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <TR>
    <TD></TD>
    <TD width=2%></TD>
    <TD width=10%></TD>
    <TD width=2%></TD>
    <TD width=10%></TD>
    <TD width=2%></TD>
    <TD width=10%></TD>
    <TD width=2%></TD>
    <TD width=10%></TD>
    <TD width=2%></TD>
    <TD width=15%></TD>
    <TD width=2%></TD>
    <TD width=15%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11" align=center>&nbsp; &nbsp; &nbsp; &nbsp;<B>MINERAL RESOURCES </B>&#150; As of December 31, 2008&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>Mineral Deposits</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="9" align=center><B>Proven and Probable Reserves(1)</B></TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>Resources</B><SUP>(2)</SUP></TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD colspan="9" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="center"></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>Recoverable</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=center><B>Mine Name</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan=3 align=center><B>Ore Tonnage</B><SUP>(3)</SUP></TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>Product</B><SUP>(5)</SUP></TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>Tonnage</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=center><B>and Location</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan=3 align=center><B>(millions of tons)</B></TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>Grade(4)</B></TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>Rock Type</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>(millions of tons)</B></TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>(millions of tons)</B></TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD colspan=3 align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center><B>Proven<SUP>(6)</SUP></B></TD>
    <TD>&nbsp;</TD>
    <TD align=center><B>Probable</B><B><SUP>(7)</SUP></B></TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Iron:</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Casa de Pedra(Congonhas,&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>Hematite (21%)</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Minas Gerais)</TD>
    <TD>&nbsp;</TD>
    <TD align=center>1,075&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>514&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>47.79% Fe&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>Itabirite (79%)</TD>
    <TD>&nbsp;</TD>
    <TD align=center>943</TD>
    <TD>&nbsp;</TD>
    <TD align=center>8,344&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Engenho&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>(Congonhas, Minas Gerais)</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>46.07%&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>Itabirite (100%)</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>861</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Fernandinho&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>(Itabirito, Minas Gerais)</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>40.21%&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>Itabirite (100%)</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>583</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Total Iron:</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center><B>1,075</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center><B>514</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center><B>943</B></TD>
    <TD>&nbsp;</TD>
    <TD align=center><B>9,788</B></TD>
  </TR>
  <TR>
    <TD colspan=13>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Limestone and Dolomite:</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center><B>Proven<SUP>(6)</SUP></B></TD>
    <TD>&nbsp;</TD>
    <TD align=center><B>Probable</B><B><SUP>(7)</SUP></B></TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Bocaina&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>49.4%CaO&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>Limestone (86%)</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>(Arcos, Minas Gerais)</TD>
    <TD>&nbsp;</TD>
    <TD align=center>130.3&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>46.6&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>3.78%MgO&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>Dolomite (14%)</TD>
    <TD>&nbsp;</TD>
    <TD align=center>173.0</TD>
    <TD>&nbsp;</TD>
    <TD align=center>1,197</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan=3 align=center>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan=3 align=center><B>Proven+Probable Reserves(Mm3)</B></TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>Recoverable Product<sup>5</sup>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>Resources (Mm<sup>3</sup>)&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center><B>(in tons)</B></TD>
    <TD>&nbsp;</TD>
    <TD align=center><B>(in million cubic meters)</B></TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD colspan="3" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;<B>Tin</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;(Itapo&atilde; do Oeste,&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>Paleo valley and&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;Rond&ocirc;nia)</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align=center>41.33</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>shallow&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>24,066&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>95.87</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>__________________</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align=center>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
  </TR>
</TABLE>
<p> (1)&nbsp; &nbsp; &nbsp; Reserves means that part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination.
  <br>
  (2)&nbsp; &nbsp; &nbsp; Includes inferred tonnages.<br>
(3)&nbsp; &nbsp; &nbsp; Represents ROM material.
<br>
(4)&nbsp; &nbsp; &nbsp; Grade is the proportion of metal or mineral present in ore or any other host material.
<br>
(5)&nbsp; &nbsp; &nbsp; Represents total product tonnage after mining and processing losses.<br>
(6)&nbsp; &nbsp; &nbsp; Means reserves for which: (i) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; grade and/or quality are computed from the results of detailed sampling; and (ii) the sites for inspection, sampling and
measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well- established.<br>
(7)&nbsp; &nbsp; &nbsp; Means reserves for which quantity and grade and/or quality are computed from information similar to that used for proven (measure) reserves, but the sites for inspection, sampling and measurement are farther apart or are otherwise less adequately
spaced. The degree of assurance, although lower than that for proven (measure) reserves, is high enough to assume continuity between points of observation. </p>
<P align="justify">
<B>Item 4A. Unresolved Staff Comments </B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The SEC has advised us that it has reviewed our amended Annual report on Form 20-F/A for the fiscal year ended December 31, 2004 (the &#147;2004 Form 20-F&#148;) and our consolidated financial statements as of and for
the years ended December 31, 2002, 2003 and 2004 included therein, filed with the SEC on April 27, 2006. Based on its review of that document, the SEC provided us with comments and questions. The unresolved staff comments are related to the
accounting treatment of our accruals for disputed taxes payable that relates to certain tax liabilities for which we are disputing payment and the use of certain tax credits to offset such tax liabilities. Discussions regarding the 2004 Form 20-F
are ongoing and could result in modifications to that document or this Form 20-F with respect to those or other issues. The company will continue to work with the SEC to reach resolution of any outstanding issues and will provide updates if any
material developments occur.<B> </B></P>
<P align="justify">
<B>Item 5. Operating and Financial Review and Prospects</B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following discussion should be read in conjunction with our consolidated financial statements as of December 31, 2007 and 2008 and for each of the years ended December 31, 2006, 2007 and 2008 included in &#147;Item
18. Financial Statements.&#148; Our consolidated financial statements were prepared in accordance with U.S. GAAP and
are presented in U.S. dollars, as explained in Note 2(a) to our consolidated financial statements included in &#147;Item 18. Financial Statements.&#148; </P>
<P align="center">
54 </P>

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<H5 align="left" style="page-break-before:always"></H5>
<A name="page_55"></A><p align=right><a href="#topdraft">Table of Contents</a></p>

<P align="justify"><B>5A. Operating Results </B></P>
<P align="justify">
<B>Overview </B></P>
<P align="justify">
The primary factors affecting our results of operations include:</P>
<UL>
<LI>
the cyclical dynamics of supply and demand for steel products both inside and outside Brazil, including the prices for such products;</LI>
<LI>
the mix of products sold by us (between domestic and export sales and between lower value-added and higher value-added products);</LI>
<LI>
our production costs; and</LI>
<LI>
Brazilian economic conditions generally, including inflation, changes in interest rates and changes in the <I>real </I>exchange rate against other currencies, particularly the U.S. dollar.</LI>
</UL>
<P align="justify">
<B>Markets and Product Mix </B></P>
<P align="justify">
<B><I>Supply and Demand for Steel </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prices of steel are sensitive to changes in worldwide and local demand, which in turn are affected by worldwide and country-specific economic cycles, and to available production capacity. While the export price of steel
(which is denominated in U.S. dollars or Euros, depending on the export destination) is the spot price, there is no exchange trading of steel or uniform pricing. Unlike other commodity products, steel is not completely fungible due to wide
differences in terms of size, chemical composition, quality and specifications, all of which impact prices. Many companies (including us) discount their list prices for regular customers, making their actual transaction prices difficult for us to
determine. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Historically, export prices and margins have been lower than domestic prices and margins, because of the logistics costs, taxes and tariffs.  The portion of production that is exported is affected by domestic demand,
exchange rate fluctuations and the prices that can be charged in the international markets. </P>
<P align="center">
55 </P>

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<H5 align="left" style="page-break-before:always"></H5>
<A name="page_56"></A><p align=right><a href="#topdraft">Table of Contents</a></p>

<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table shows Brazilian steel production and apparent consumption (domestic sales plus imports) and global production and demand for the periods indicated: </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD width=55%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD colspan=5 align=center><B>Year ended December 31,</B>&nbsp;</TD>
  </TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD colspan=5 align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>2006</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>2007</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>2008</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>Brazilian Market </B>(in thousands of tons)</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><I>Total Flat and Long Steel</I>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Production<SUP>(1)</SUP></TD>
	<TD>&nbsp;</TD>
	<TD align=right>23,504&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>25,850&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>24,692&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Apparent Consumption&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>18,533&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>22,041&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>24,047&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><I>Hot-Rolled Coils and Sheets</I>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Production&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>4,074&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>4,326&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>3,924&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Apparent Consumption&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2,822&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>3,354&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>3,481&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><I>Cold-Rolled Coils and Sheets</I>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Production&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>3,227&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>3,412&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>3,038&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Apparent Consumption<SUP>(1)</SUP></TD>
	<TD>&nbsp;</TD>
	<TD align=right>2,526&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2,900&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2,849&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><I>Galvanized Sheets</I>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Production<SUP>(1)</SUP></TD>
	<TD>&nbsp;</TD>
	<TD align=right>2,293&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2,459&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2,343&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Apparent Consumption<SUP>(1)</SUP></TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,879&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2,154&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2,478&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><I>Tin Mill</I>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Production<SUP>(1)</SUP></TD>
	<TD>&nbsp;</TD>
	<TD align=right>828&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>932&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>724&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Apparent Consumption<SUP>(1)</SUP></TD>
	<TD>&nbsp;</TD>
	<TD align=right>655&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>640&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>623&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>Global Market </B>(in millions of tons)</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Crude Steel Production&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,244&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,344&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,330&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>Demand&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,113&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,202&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,170&nbsp;</TD></TR>

<TR valign="bottom">
  <TD align=left>___________</TD>
  <TD>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>Source: IBS and International Iron and Steel Institute, or IISI.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>

</TABLE>
<P align="justify">
<B><I>Product Mix and Prices </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sales trends in both the domestic and export markets are forecasted monthly based on historical data of the preceding months. CSN uses its own information system to remain current on market developments so that it can
respond swiftly to fluctuations in demand. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; CSN considers its flexibility in shifting between markets, and its ability to monitor and optimize inventory levels in light of changing demand, as key to its success. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We also have a strategy of increasing the portion of our sales attributable to higher value-added coated products, particularly galvanized and tin plate products.  Galvanized products are directed at the automotive,
construction and home appliance industries. Tin plate products are used by the steel packaging market. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The international steel price increases that occurred throughout 2007 and the first three quarters of 2008 have unwound with unprecedented speed in the last quarter of 2008 due to the global financial crisis, resetting
international steel prices to early 2007 levels. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On the domestic market, throughout 2008, CSN introduced three price increases, giving the following total percentages: hot-rolled products, 50%; cold-rolled products, 38%; galvanized products, 27% and tin plate
products, 12%. </P>
<P align="justify">
<B><I>Sales Volume and Net Operating Revenues by Steel Products and Markets</I></B><I> </I></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth our steel product sales volume and net operating revenues by product and market. </P>
<BR>
<P align="center">
56 </P>

<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_57"></A><p align=right><a href="#topdraft">Table of Contents</a></p>

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  <TR>
    <TD></TD>
    <TD width=2%></TD>
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    <TD width=6%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="17" align=center><B>Sales Volume</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD colspan="17" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" align=center><B>Tons</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="11" align=center><B>% of Sales Volume</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD colspan="5" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="center"></TD>
    <TD colspan="11" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="5" align=center><B>In Market</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="5" align=center><B>Total</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center">&nbsp;</TD>
    <TD align="center"></TD>
    <TD align="center">&nbsp;</TD>
    <TD align="center"></TD>
    <TD align="center">&nbsp;</TD>
    <TD align="center"></TD>
    <TD colspan="5" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="center"></TD>
    <TD colspan="5" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center><B>2006</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>2007</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>2008</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>2006</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>2007</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;<B>2008</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>2006</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>2007</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>2008</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="center"></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="center"></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="center"></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="center"></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="center"></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="center"></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="center"></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="center"></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" align=center><I>(In thousands of tons)</I></TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan=3 align=center><I>(In percentages)</I></TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><U>Domestic</U>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
<TR valign="bottom">
	<TD align=left><U>Sales</U>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Slabs&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>46&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>84&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>78&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Hot-rolled&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,003&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,535&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,746&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>35&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>43&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>42&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>22&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>28&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>36&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Cold-rolled&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>439&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>557&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>685&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>16&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>15&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>16&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>10&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>10&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>14&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Galvanized&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>736&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>873&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,088&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>26&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>24&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>26&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>17&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>16&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>22&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Tin Mill&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>594&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>565&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>561&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>21&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>16&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>14&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>14&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>11&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>11&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Sub-total&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2,818&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>3,614&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>4,158&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>64&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>67&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>85&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><U>Export sales</U>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Slabs&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>120&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>310&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>32&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>8&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>18&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>4&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>3&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>6&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Hot-rolled&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>289&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>93&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>34&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>19&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>5&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>5&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>7&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Cold-rolled&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>142&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>182&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>32&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>9&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>10&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>4&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>3&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>3&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Galvanized&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>759&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>809&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>464&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>48&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>46&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>63&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>17&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>15&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>9&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Tin Mill&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>256&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>370&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>172&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>16&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>21&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>24&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>6&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>7&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>3&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Sub-total&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,566&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,764&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>733&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>36&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>33&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>15&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Total&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>4,384&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>5,378&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>4,891&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><U>Total Sales</U>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Slabs&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>166&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>394&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>110&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>4&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>8&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Hot-rolled&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,292&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,627&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,780&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>29&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>30&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>36&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Cold-rolled&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>581&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>740&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>717&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>13&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>13&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>15&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Galvanized&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,495&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,682&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,552&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>34&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>31&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>32&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Tin Mill&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>850&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>935&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>733&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>20&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>18&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>15&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Total&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>4,384&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>5,378&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>4,891&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE><BR>
<P>
The following table sets forth our steel product net revenues by product and market. </P>
<table border="0" width="100%" cellspacing="0" cellpadding="0" style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <tr>
    <td></td>
    <td width="2%"></td>
    <td width="6%"></td>
    <td width="2%"></td>
    <td width="6%"></td>
    <td width="2%"></td>
    <td width="6%"></td>
    <td width="2%"></td>
    <td width="6%"></td>
    <td width="2%"></td>
    <td width="6%"></td>
    <td width="2%"></td>
    <td width="6%"></td>
    <td width="2%"></td>
    <td width="6%"></td>
    <td width="2%"></td>
    <td width="6%"></td>
    <td width="2%"></td>
    <td width="6%"></td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td colspan="17" align="center"><b>Net Operating Revenues</b></td>
  </tr>
  <tr valign="bottom" style="font-size: 1px">
    <td>&nbsp;</td>
    <td></td>
    <td colspan="17" align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td colspan="5" align="center"><b>U.S. dollars</b>&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td colspan="11" align="center"><b>% of Net Operating Revenues</b>&nbsp;</td>
  </tr>
  <tr valign="bottom" style="font-size: 1px">
    <td>&nbsp;</td>
    <td></td>
    <td colspan="5" align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td align="center"></td>
    <td colspan="11" align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td colspan="5" align="center"><b>In Market</b>&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td colspan="5" align="center"><b>Total</b>&nbsp;</td>
  </tr>
  <tr valign="bottom" style="font-size: 1px">
    <td>&nbsp;</td>
    <td></td>
    <td align="center">&nbsp;</td>
    <td align="center"></td>
    <td align="center">&nbsp;</td>
    <td align="center"></td>
    <td align="center">&nbsp;</td>
    <td align="center"></td>
    <td colspan="5" align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td align="center"></td>
    <td colspan="5" align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="center"><b>2006</b>&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center"><b>2007</b>&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center"><b>2008</b>&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center"><b>2006</b>&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center"><b>2007</b>&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center"><b>2008</b>&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center"><b>2006</b>&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center"><b>2007</b>&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center"><b>2008</b>&nbsp;</td>
  </tr>
  <tr valign="bottom" style="font-size: 1px">
    <td>&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td align="center"></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td align="center"></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td align="center"></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td align="center"></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td align="center"></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td align="center"></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td align="center"></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td align="center"></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td colspan="3" align="center"><i>(In millions of US&#36;)</i></td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td colspan="3" align="center"><i>(In percentages)</i></td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left"><U>Domestic</U>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left"><U>Sales</U>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">Slabs&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">14&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">33&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">47&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">1&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">1&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">1&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">-&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">1&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">1&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">Hot-rolled&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">618&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">1,170&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">1,740&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">26&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">33&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">35&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">17&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">24&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">30&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">Cold-rolled&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">322&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">499&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">757&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">14&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">14&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">15&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">9&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">10&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">13&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">Galvanized&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">713&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">1,097&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">1,583&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">30&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">31&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">32&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">20&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">22&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">28&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">Tin Mill&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">716&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">754&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">862&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">29&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">21&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">17&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">20&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">15&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">15&nbsp;</td>
  </tr>
  <tr valign="bottom" style="font-size: 1px">
    <td>&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">Sub-total&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">2,383&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">3,553&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">4,989&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">100&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">100&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">100&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">66&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">72&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">87&nbsp;</td>
  </tr>
  <tr valign="bottom" style="font-size: 1px">
    <td>&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left"><U>Export sales</U>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">Slabs&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">43&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">154&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">20&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">4&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">11&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">2&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">1&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">3&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">-&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">Hot-rolled&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">168&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">62&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">23&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">14&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">4&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">3&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">5&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">1&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">-&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">Cold-rolled&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">93&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">124&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">24&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">8&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">9&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">3&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">3&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">3&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">-&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">Galvanized&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">659&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">716&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">491&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">55&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">51&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">65&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">18&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">14&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">9&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">Tin Mill&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">243&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">351&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">203&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">19&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">25&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">27&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">7&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">7&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">4&nbsp;</td>
  </tr>
  <tr valign="bottom" style="font-size: 1px">
    <td>&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">Sub-total&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">1,206&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">1,407&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">761&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">100&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">100&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">100&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">34&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">28&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">13&nbsp;</td>
  </tr>
  <tr valign="bottom" style="font-size: 1px">
    <td>&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">Total&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">3,589&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">4,960&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">5,750&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">100&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">100&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">100&nbsp;</td>
  </tr>
  <tr valign="bottom" style="font-size: 1px">
    <td>&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td>&nbsp;</td>
    <td></td>
    <td>&nbsp;</td>
    <td></td>
    <td>&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="19">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left"><U>Total Sales</U>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">Slabs&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">57&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">187&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">67&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">1&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right">4&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right">1&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">2&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">3&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">1&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">Hot-rolled&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">786&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">1,232&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">1,763&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">22&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right">25&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right">30&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">21&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">23&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">30&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">Cold-rolled&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">415&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">623&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">781&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">12&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right">13&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right">14&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">11&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">12&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">13&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">Galvanized&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">1,372&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">1,813&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">2,074&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">38&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right">36&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right">36&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">37&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">34&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">36&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">Tin Mill&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">959&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">1,105&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">1,065&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">27&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right">22&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right">19&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">26&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">21&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">18&nbsp;</td>
  </tr>
  <tr valign="bottom" style="font-size: 1px">
    <td>&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="right" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td align="right"></td>
    <td align="right" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td align="right"></td>
    <td align="right" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">Sub-total&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">3,589&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">4,960&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">5,750&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">100&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right">100&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right">100&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">97&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">93&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">98&nbsp;</td>
  </tr>
  <tr valign="bottom" style="font-size: 1px">
    <td>&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="right" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td align="right"></td>
    <td align="right" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td align="right"></td>
    <td align="right" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">By-products&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">129&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">398&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">115&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">-&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right">-&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right">-&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">3&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">7&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">2&nbsp;</td>
  </tr>
  <tr valign="bottom" style="font-size: 1px">
    <td>&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="right" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td align="right"></td>
    <td align="right" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td align="right"></td>
    <td align="right" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left"><b>Total</b></td>
    <td>&nbsp;</td>
    <td align="right"><b>3,718&nbsp;</b></td>
    <td>&nbsp;</td>
    <td align="right"><b>5,358&nbsp;</b></td>
    <td>&nbsp;</td>
    <td align="right"><b>5,865&nbsp;</b></td>
    <td>&nbsp;</td>
    <td align="right"><b>100&nbsp;</b></td>
    <td align="right">&nbsp;</td>
    <td align="right"><b>100&nbsp;</b></td>
    <td align="right">&nbsp;</td>
    <td align="right"><b>100&nbsp;</b></td>
    <td>&nbsp;</td>
    <td align="right"><b>100&nbsp;</b></td>
    <td>&nbsp;</td>
    <td align="right"><b>100&nbsp;</b></td>
    <td>&nbsp;</td>
    <td align="right"><b>100&nbsp;</b></td>
  </tr>
  <tr valign="bottom" style="font-size: 1px">
    <td>&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="right" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td align="right"></td>
    <td align="right" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td align="right"></td>
    <td align="right" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
  </tr>
</table>
<BR>
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<P align="justify">
<B><I>Brazilian Economic Environment </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a company with the vast majority of its operations currently in Brazil, we are affected by the general economic conditions of Brazil. We believe the rate of growth in Brazil is important in determining our future
growth capacity and our results of operations.</P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the second half of 2008, the Brazilian economy began to reflect the effects of the global financial markets and economic crisis, with slower GDP growth, a weakening <I>real</I>, increasing unemployment rates,
decreasing liquidity and reduced consumer spending. This led to a slow down in overall industrial production.</P>
<P align="justify">
The following table shows certain Brazilian economic indicators for the periods indicated:</P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD></TD>
	<TD width=2%></TD>
	<TD width=13%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD colspan="5" align=center><B>Year ended December 31,</B>&nbsp;</TD>
  </TR>
<TR valign="bottom" style="font-size: 1px">
  <TD>&nbsp;</TD>
	<TD></TD>
	<TD colspan="5" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>2006</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>2007</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>2008</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
  <TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>GDP growth&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>4.0%&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>5.7%&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>5.1%&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>Inflation (IPCA)<SUP>(1)</SUP></TD>
	<TD>&nbsp;</TD>
	<TD align=right>3.2%&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>4.5%&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>5.9%&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>Inflation (IGP-M)<SUP>(2)</SUP></TD>
	<TD>&nbsp;</TD>
	<TD align=right>3.8%&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>7.7%&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>9.8%&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>CDI<SUP>(3)</SUP></TD>
	<TD>&nbsp;</TD>
	<TD align=right>15.1%&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>11.7%&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>12.4%&nbsp;</TD>
</TR>


<TR valign="bottom">
	<TD align=left>Appreciation (depreciation) of the <I>real </I>against&nbsp;the U.S. dollar&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>8.7%&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>17.2%&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>-32.0%&nbsp;</TD>
</TR>

<TR valign="bottom">
	<TD align=left>Exchange rate at end of period (US&#36;1.00)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>R&#36;2.138&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>R&#36;1.771&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>R&#36;2.337&nbsp;</TD>
</TR>

<TR valign="bottom">
	<TD align=left>Average exchange rate (US&#36;1.00)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>R&#36;2.177&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>R&#36;1.948&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>R&#36;1.837&nbsp;</TD>
</TR>

<TR valign="bottom">
  <TD colspan=3 align=left>________________________</TD>
  <TD>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD colspan=3 align=left>Sources: IBGE, Funda&ccedil;&atilde;o Get&uacute;lio Vargas, Central Bank and Bloomberg.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD colspan="7" align=left>(1)The IPCA is a consumer price index measured by the IBGE.&nbsp;</TD>
  </TR>

<TR valign="bottom">
	<TD colspan="7" align=left>(2)The IGP-M is the general market price index measured by the Funda&ccedil;&atilde;o Get&uacute;lio Vargas.&nbsp;</TD>
  </TR>

<TR valign="bottom">
	<TD colspan="7" align=left>(3)The Interbank Deposit Rate, or CDI, represents the average interbank deposit rate performed during a given day in Brazil (accrued as of the&nbsp;last month of the period, annualized). </TD>
  </TR>
</TABLE>
<BR>
<P>
<B>Effects of Exchange Rate Fluctuations </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our financial statements included in this annual report are expressed in U.S. dollars. Our export revenues are substantially denominated in U.S. dollars. Our domestic revenues are denominated in Brazilian <I>reais</I>
(although domestic sales prices reflect international prices with a time lag of some months). </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A significant portion of our cost of products sold are commoditized raw materials, the prices of which are denominated in U.S. dollars. The balance of our cost of products sold and our cash operating expenses (i.e.,
operating expenses other than depreciation and amortization) are denominated in <I>reais</I>. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The appreciation of the U.S. dollar against the <I>real</I> has the following effects on our results of operations expressed in U.S. dollars: </P>
<UL>
<LI>
domestic revenues tend to be lower (in comparison with prior years) and to the extent we sell more products than usual in the domestic as opposed to the export markets, this effect is magnified;</LI>
<LI>
the impact of <I>real </I>denominated costs of products sold and operating costs tend to be lower; and</LI>
<LI>
financial expenses are increased to the extent the exposure to dollar-denominated debt is not protected.</LI>
</UL>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The appreciation of the <I>real</I> against the U.S. dollar has the following effects on our results of operations expressed in US dollars: </P>
<UL>
<LI>
domestic revenues tend to be higher (in comparison with prior years)and this effect is magnified to the extent that we sell more products than usual in the domestic markets;</LI>
<LI>
the impact of <I>real</I>-denominated costs of products sold and operating costs tends to be higher; and</LI>
<LI>
financial income is higher to the extent the exposure to dollar-denominated debt has not been protected.</LI>
</UL>
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<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The impact during the three years ending December 31, 2008 of fluctuations in the <I>real</I> exchange rate against other currencies on our results of operations can be seen in the &#147;foreign exchange and monetary
gain (loss), net&#148; line in our income statement, although that amount is partially offset by the net financial income (or expense) attributable to the profit (or loss) on our derivative transaction of our foreign currency-denominated debt. In
order to minimize the effects of the exchange rate fluctuations, we often engage in derivative transactions, including currency swap and foreign currency option agreements. For a discussion of the possible impact of fluctuations in the foreign
currency exchange and interest rates on our principal financial instruments and positions, see &#147;Item 11. Quantitative and Qualitative Disclosures About Market Risk.&#148; </P>
<P align="justify">
<B>Effects of Inflation and Interest Rates </B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inflation rates in Brazil have been significantly volatile in the past, although they have stabilized in recent years. Inflation rates remained relatively stable from 2003 to 2004, decreased in 2005 and 2006 and
increased in 2007 and 2008. These increases in inflation are largely a result of the expansion in agriculture and commodity prices and the appreciation of the U.S. dollar against the <I>real</I>. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inflation affects our financial performance by increasing some of our costs and expenses denominated in <I>reais</I> that are not linked to the U.S. dollar. Our cash costs and operating expenses are substantially
denominated in <I>reais</I> and have tended to increase with Brazilian inflation because our suppliers and service providers generally increase prices to reflect Brazilian inflation. In addition, some of our <I>real</I>-<I>denominated</I> debt are
indexed to take into account the effects of inflation. Under this debt, the principal amount is generally adjusted with reference to inflation indexes, so that inflation results in increases in our financial expenses and debt service obligations. In
addition, a significant portion of our <I>real</I>-<I>denominated</I> debt bears interest based on the Interbank Deposit Certificate (<I>Certificado de Dep&oacute;sito Interbanc&aacute;rio</I>), or CDI, rate which is partially adjusted for
inflation. </P>
<P align="justify">
The table below shows the Brazilian general price inflation and the CDI for the periods shown. </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD></TD>
	<TD width=2%></TD>
	<TD width=13%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD colspan="5" align=center><B>Year ended December 31,</B>&nbsp;</TD>
  </TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD colspan="5" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>2006</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>&nbsp;<B>2007</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>2008</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Inflation (IGP-M) <SUP>(1)</SUP></TD>
	<TD>&nbsp;</TD>
	<TD align=center>3.8%&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>7.7%&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>9.8%&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>CDI (2)</TD>
	<TD>&nbsp;</TD>
	<TD align=center>15.1%&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>11.7%&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>12.4%&nbsp;</TD></TR>

<TR valign="bottom">
  <TD align=left>_______________</TD>
  <TD>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align="right">&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align="right">&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>Source: Funda&ccedil;&atilde;o Get&uacute;lio Vargas, or FGV, and Bloomberg.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD colspan="3" align=left>(1)The IGP-M inflation is the general market price index measured by the FGV.&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD colspan="7" align=left>(2)The CDI rate is the average rate for interbank deposits made during the day in Brazil (accumulated for the month of the end of the period&nbsp;and annualized.)</TD>
  </TR>
</TABLE>
<BR>
<P align="justify">
<B>Critical Accounting Estimates</B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In preparing our financial statements, we make estimates concerning a variety of matters. Some of these matters are highly uncertain, and our estimates involve judgments we make based on the information available to us.
In the discussion below, we have identified several of these matters for which our financial presentation would be materially affected if either (1) we used different estimates that we could reasonably have used or (2) in the future we change our
estimates in response to changes that are reasonably likely to occur.</P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This discussion addresses only those estimates that we consider most important based on the degree of uncertainty and the likelihood of a material impact if we used a different estimate. There are many other areas in
which we use estimates about uncertain matters, but the reasonably likely effect of changed or different estimates is not material to our financial presentation.</P>
<P align="justify">
<B><I>Valuation of long-lived assets, intangible assets and goodwill</I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under U.S. GAAP, in accordance with Statements of Financial Accounting Standards, or SFAS, No. 144, long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the
carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset.</P>
<P align="center">
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<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A determination of the fair value of an asset requires management to make certain assumptions and estimates with respect to projected cash inflows and outflows related to future revenues and expenditures. These
assumptions and estimates can be influenced by different external and internal factors, such as economic and industry trends, interest rates and changes in the marketplace. A change in the assumptions and estimates that we use could change our
estimate of the expected future net cash flows and lead to the recognition of an impairment charge in results of operations relating to our property, plant and equipment.</P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We test goodwill for impairment in accordance with SFAS No. 142, &#147;Goodwill and Other Intangible Assets.&#148; SFAS No. 142 requires that goodwill be tested for impairment at the &#147;reporting-unit&#148; level
(Reporting Unit) at least annually and more frequently upon the occurrence of certain events, as defined by SFAS 142. Goodwill is tested for impairment annually in December in a two-step process. First, we determine if the carrying amount of our
Reporting Unit exceeds the &#147;fair value&#148; of the Reporting Unit, which would indicate that goodwill may be impaired. If we determine that goodwill may he impaired, we then compare the &#147;implied fair value&#148; of the goodwill, as
defined by SFAS 142, to our carrying amount to determine if there is an impairment loss. We do not have any goodwill that we consider to be impaired. </P>
<P align="justify">
<B><I>Depreciation and amortization</I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adopted depreciation rates are based on estimated useful lives of the underlying assets, derived from historical information available to us, as well as known industry trends. Depreciation is computed on the
straight-line basis at rates which take into consideration the useful lives of the related assets, as follows (average): buildings - 25 years; equipment - 15 years; furniture and fixtures - 10 years; hardware and vehicles - 5 years. The sensitivity
of an impact in changes in the useful lives of property, plant and equipment was assessed by applying a hypothetical 10% increase in the depreciation rate existing at December 31, 2008. This hypothetical change would result in an incremental
increase in the annual depreciation expense of US&#36;39 million in the year of the change.</P>
<P align="justify">
<B><I>Fair value of business combinations </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We estimate the fair value of assets acquired and liabilities assumed of our business combinations as required by SFAS No. 141, &#147;Accounting for Business Combinations.&#148; Accordingly, when determining the
purchase price allocations of our business acquisitions, we usually adjust to fair value certain items such as inventories, property, plant and equipment, mines, present value of long-term assets and liabilities, among others, which are determined
by independent appraisals that perform the valuations for us. Also, for business combinations purposes, we identify intangible assets apart from goodwill based on the guidance provided in Appendix A of SFAS No. 141 and consider the establishments of
SFAS No. 142, &#147;Goodwill and Other Intangible Assets&#148; as to impairment tests or definition of the useful lives of our intangibles identified apart from goodwill. <I> </I></P>
<P align="justify">
<B><I>Derivatives </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SFAS No. 133, &#147;Accounting for Derivative Financial Instruments and Hedging Activities,&#148; as amended, requires that we recognize all derivative financial instruments as either assets or liabilities on our
balance sheet and measure such instruments at fair value. Changes in the fair value of derivatives are recorded in each period in current earnings or in other comprehensive income (outside net income), in the latter case depending on whether a
transaction is designated as an effective hedge. We have not designated any derivative financial instruments as hedges and the fair value adjustments to our derivatives were thus recorded in current net income. With respect to the fair value
measurement, we must make assumptions such as to future foreign currency exchange and interest rates. For a discussion of the possible impact of fluctuations in the foreign currency exchange and interest rates on our principal financial instruments
and positions, see &#147;Item 11. Quantitative and Qualitative Disclosures About Market Risk.&#148; </P>
<P align="justify">
<B><I>Pension plans</I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We sponsor defined benefit pension plans covering some of our retirees. We account for these benefits in accordance with SFAS No. 87, &#147;Employers&#146; Accounting for Pensions,&#148; as amended. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The determination of the amount of our obligations for pension benefits depends on certain actuarial assumptions. These assumptions are described in Note 15 to our consolidated financial statements and include,
among others, the expected long-term rate of return on plan assets and increases in salaries. In accordance with U.S. GAAP, actual results that differ from our assumptions are accumulated and amortized over future periods and generally affect our
recognized expenses and recorded obligations in such future periods. </P>
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<P><B><I>Deferred taxes</I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We compute and pay income taxes based on results of operations determined under Brazilian GAAP. We recognize deferred income tax assets and liabilities based on the differences between the financial statement carrying
amounts and the tax bases of assets and liabilities. We regularly review the deferred income tax assets for recoverability and establish a valuation allowance if, under U.S. GAAP, it is more likely than not that the deferred income tax assets will
not be realized, based on historical taxable income, projected future taxable income, and the expected timing of the reversals of existing temporary differences. A change in the assumptions and estimates with respect to our expected future taxable
income could result in the recognition of a valuation allowance being charged to income. If we operate at a loss or are unable to generate sufficient future taxable income, or if there is a material change in the actual effective tax rates or
discount rates, the time period over which the underlying temporary differences become taxable or deductible, or any change in its future projections, we could be required to establish a valuation allowance against all or a significant portion of
our deferred tax assets, resulting in a substantial increase of our effective tax rate and a material adverse impact on operating results.</P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In June 2006, the FASB issued Interpretation No. 48, &#147;Accounting for Uncertainty in Income Taxes &#151; An Interpretation of FASB Statement No. 109,&#148; or FIN 48. FIN 48 clarifies the accounting for uncertainty
in income taxes recognized in an enterprise&#146;s financial statements in accordance with SFAS 109. FIN 48 also prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position
taken or expected to be taken in a tax return that results in a tax benefit. Additionally, FIN 48 provides guidance on de-recognition, statement of operations classification of interest and penalties, accounting in interim periods, disclosure, and
transition. We adopted FIN 48 on January 1,2007, and the provisions of FIN 48 have been applied to all income tax positions commencing from that date. We recognize potential accrued interest and penalties related to unrecognized tax benefits within
operations as income tax expense. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We record liabilities for uncertain tax positions that could be challenged by taxing authorities that, in the Company&#146;s judgment, do not meet the more likely than not threshold of being sustained upon examination,
based on the facts, circumstances, and information available at the reporting date. The Company estimates and records the liability for uncertain tax positions considering the probabilities of the outcomes that could he realized upon settlement
using the facts, circumstances and information available at the reporting date. It is often difficult to predict the final outcome or timing of resolution of any particular tax matter. Various events, some of which cannot be predicted, may occur
that would affect our recognition of liabilities for uncertain tax positions. </P>
<P>
<B><I>Contingencies and disputed taxes </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We record provisions for contingencies relating to legal proceedings with respect to which we deem the likelihood of an unfavorable outcome to be probable and the loss can be reasonably estimated. This determination is
made based on the legal opinion of our internal and external legal counsel. We believe these contingencies are properly recognized in our financial statements in accordance with SFAS No. 5. Those contingencies related to income taxes and social
contribution are accounted for based on the &#147;more-likely-than-not&#148; concept in accordance with FIN 48. We are also involved in judicial and administrative proceedings that are aimed at obtaining or defending our legal rights with respect to
taxes that we believe to be unconstitutional or otherwise not required to be paid by us. We believe that these proceedings will ultimately result in the realization of contingent tax credits or benefits that can be used to settle direct and indirect
tax obligations owed to the Brazilian Federal or State Governments. We do not recognize these contingent tax credits or benefits in our financial statements until realization of such gain contingencies has been resolved. This occurs when a final
irrevocable decision is rendered by the courts in Brazil. When we use contingent tax credits or benefits based on favorable temporary court decisions that are still subject to appeal to offset current direct or indirect tax obligations, we maintain
the legal obligation accrued in our financial statements until a final irrevocable judicial decision on those contingent tax credits or benefits is rendered. The accrual for the legal obligation related to the current direct or indirect tax
obligations offset is not reversed until such time as the utilization of the contingent tax credits or benefits is ultimately realized. This accounting is consistent with our analysis of a liability under FASB Concepts Statement No. 6. The
accounting for the contingent tax credits is in accordance with accounting for contingent assets under SFAS No. 5. Our accruals
include interest on the tax obligations that we may offset with contingent tax credits or benefits at the interest rate defined in the relevant tax law. The recorded accruals for these disputed taxes and other contingencies may change in the future
due to new developments in each matter, such as changes in legislation, irrevocable, final judicial decisions specific to us, or changes in approach, such as a change in settlement strategy in dealing with these matters. See &#147;Item 5A. Operating
Results&#151;Results of Operations&#151;2008 Compared to 2007&#151;Disputed Taxes Payable&#148; and &#147;Item 8A. Consolidated Statements and Other Financial Information&#151;Legal Proceedings&#148; for further information on the judicial and
administrative proceedings in which we are involved. </P>
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<P><B><I>Allowance for doubtful accounts </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We consider a provision for bad debts in our trade accounts receivable in order to reflect our expectation as to the net realizable value thereof. This provision is estimated based on an analysis of our receivables and
is periodically reviewed to maintain real expectation of collectibility of our accounts receivable. </P>
<P>
<B>Changes on Disclosure of Financial Statements</B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On July 13, 2007, the CVM issued CVM Rule No. 457 to require listed companies to publish their consolidated financial statements in accordance with International Financial Reporting Standards, or IFRS, starting with the
year ending December 31, 2010. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December 28, 2007, Law No. 11,638 was enacted and amended numerous provisions of Brazilian Corporate Law relating to accounting principles and authority to issue accounting standards. Law No. 11,638 sought to enable
greater convergence between Brazilian GAAP and IFRS. To promote convergence, Law No. 11,638 modified certain accounting principles of Brazilian Corporate Law and mandated the CVM to issue accounting rules conforming to the accounting standards
adopted in international markets. Additionally, the statute acknowledged a role in the setting of accounting standards for the Committee for Accounting Rules (<I>Comit&ecirc; de Pronunciamentos Cont&aacute;beis</I>), or CPC, which is a committee of
officials from the S&atilde;o Paulo Stock Exchange (<I>BM&amp;FBovespa S.A.&#150; Bolsa de Valores, Mercadorias e Futuros</I>), or the BOVESPA, industry representatives and academic bodies that has issued accounting guidance and pursued the
improvement of accounting standards in Brazil. Law No. 11,638 permits the CVM and the Brazilian Central Bank (<I>Banco Central do Brasil</I>), or the Central Bank,<I> </I>to rely on the accounting standards issued by the CPC in establishing
accounting principles for regulated entities. </P>
<P><b>Recently Issued  Accounting Pronouncements Adopted and Not Adopted by Us</b></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For a description on the  recently issued accounting pronouncements, see Note 3 to our consolidated  financial statements contained in &ldquo;Item 18. Financial Statements&quot;.</P>
<P align="center">
62 </P>

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<P>
<B>Results of Operations </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of comparison, the following table presents certain financial information with respect to our operating results for each of the years ended December 31, 2006, 2007 and 2008 and the percentage change in each
of these items from 2006 to 2007 and from 2007 to 2008:</P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <TR>
    <TD width=40%></TD>
    <TD width=2%></TD>
    <TD width=10%></TD>
    <TD width=2%></TD>
    <TD width=10%></TD>
    <TD width=2%></TD>
    <TD width=10%></TD>
    <TD width=2%></TD>
    <TD width=10%></TD>
    <TD width=2%></TD>
    <TD width=10%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan=5 align=center><B>Year Ended December 31,</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan=3 align=center><B>Increase (Decrease)</B></TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD colspan=5 align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="center"></TD>
    <TD colspan=3 align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center><B>2006</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>2007</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>2008</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>2007/2006</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>2008/2007</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center><B>%</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>%</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Operating revenues</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp; &nbsp;Domestic sales&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>3,550&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>5,283&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>7,377&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>48.8&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>39.6&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp; &nbsp;Export sales&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,263&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,695&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,830&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>34.2&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>8.0&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp; &nbsp;<B>Total</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>4,813</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>6,978</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>9,207</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>45.0&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>31.9&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Sales Taxes&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>(899)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>(1,305)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>(1,835)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>45.2&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>40.6&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Discounts, returns and allowances&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>(68)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>(156)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>(185)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>129.4&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>18.6&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Net operating revenues</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>3,846</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>5,517</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>7,187</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>43.4&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>30.3&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Cost of products sold&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>(2,102)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>(3,076)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>(3,576)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>46.3&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>16.2&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Gross profit</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>1,744</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>2,441</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>3,611</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>40.0&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>47.9&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Operating expenses&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp; &nbsp;Selling&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>(167)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>(310)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>(412)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>85.6&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>32.9&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp; &nbsp;General and administrative&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>(148)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>(185)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>(219)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>25.0&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>18.4&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp; &nbsp;Other income (expense)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>(149)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>(85)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>(136)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>(43.0)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>60.0&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>

    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Operating income</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>1,280</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>1,861</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>2,844</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>45.4&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>52.8&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Non-operating income (expenses), net&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp; &nbsp;Financial income (expenses), net&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>(533)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>(219)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>(380)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>(58.9)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>73.5&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp; &nbsp;Foreign exchange and monetary gain (loss), net&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>218&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>438&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>(1,265)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>100.9&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>(388.8)</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp; &nbsp;Gain on dilution of interest in subsidiary&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,667&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp; &nbsp;Other, net&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>22&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>81&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>75&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>268.2&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>(7.4)</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Income before income taxes and equity in</B>&nbsp;<B>results of affiliated companies</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>987</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>2,161</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>2,941</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>118.9&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>36.1&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Income tax&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>(296)</B></TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>(534)</B></TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>(414)</B></TD>
    <TD>&nbsp;</TD>
    <TD align=right>80.4&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>(22.5)</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp; &nbsp;Current&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>(198)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>(619)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>(615)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>212.6&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>(0.6)</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp; &nbsp;Deferred&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>(98)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>85&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>201&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>(186.7)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>136.5&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Equity in results of affiliated companies&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>58&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>76&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>127&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>31.0&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>67.1&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Net income</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>749</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>1,703</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>2,654</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>127.4&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>55.8&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<P>
<B><I>Year 2008 Compared to Year 2007 </I></B></P>
<P>
<I>Operating Revenues </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our operating revenues increased by 31.9%, from US&#36;6,978 million in 2007 to US&#36;9,207 million in 2008, as a result of the following combined effects: (i) sucessive steel price hikes along the year in the
Brazilian market, (ii) a better sales mix concentration, and (iii) a larger share of the mining segment as a percentage of our total revenues, which benefits from higher iron prices in the international market. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We recorded annual steel sales volume of 4,891 million tons in 2008, representing a decrease from 5,378 million tons in 2007, and annual iron-ore sales of 18.5 million tons in 2008, excluding own consumption, a Company
record. In 2007, we recorded annual iron-ore sales of 10.5 million tons. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The strong performance of the Brazilian steel sector in the first ten months of 2008 evidenced a 9% increase on our domestic sales as compared to 2007, as a result mainly of a strong demand for steel products and
successive price increases. In November 2008, however, the global financial crisis affected our customers and demand for our products decreased abruptly. According to IBS, crude steel production remained flat over 2007 at 33 million tons.</P>
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<P>
<I>Domestic Sales </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our annual domestic sales volume increased 15% from 3,614 million tons in 2007 to 4,158 million tons in 2008, in line with our strategy of prioritizing the Brazilian market, where we have historically generated higher
profit margins. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;According to IBS, we recorded an average steel market share of 39% in 2008 in terms of volume, as compared to the 34% market share recorded during the previous year. As for the product mix, once again high value-added
products such as galvanized, galvalume and tin plate accounted for approximately 40% of total domestic volume in 2008 </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Domestic prices were adjusted three times in March, May and July of 2008, amounting to the following increases: 50% for hot-rolled, 38% for cold-rolled, 27% for galvanized and 12% for tin plate. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the domestic market, our operating revenues increased by 39.6%, from US&#36;5,283 million in 2007 to US&#36;7,377 million in 2008, as a result of the combined effect described above.</P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Annual iron-ore sales, excluding own consumption, reached 18.5 million tons in 2008, an all-time record for the Company, with domestic sales accounting for 3.9 million ton, or 21% of the total.</P>
<P>
<I>Export Sales </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The year 2008 was marked by a slowing global demand for steel products, and exceptionally volatile prices for metals and other commodities. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2008 we exported 733,000 tons of steel products, representing a 58.4% decrease as compared to the exported volume recorded in 2007. Our iron-ore sales exports volume increased 186.9% from 5.1 million tons in 2007 to
14.7 million tons in 2008.</P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating revenues from our exports increased 8.0% from US&#36;1,695 million in 2007 to US&#36;1,830 million in 2008, as previously explained. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The main effects the slowing global demand for steel products are explained below, by each international market. </P>
<P>
<I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;USA </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Given the U.S. economy, which had been showing signs of weakening since the end of 2007, the steel demand fell by 25% in 2008. Lack of credit and consumer confidence had a direct impact on the destocking of steel
products and distributors inventories began to fall slightly as of September 2008. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Despite this reduction in inventory, however, prices continued to fall and hot-rolled coils closed the year at around US&#36;540 per ton, 12% below the average prices recorded in the last 5 years. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Industry capacity use also felt the effects of the downturn, falling from 90% in mid-year to 50% at the end of 2008, as the industry sought to balance domestic market supply by cutting back on production. Only 9 out of
the 30 blast furnaces in the United States were operating by the end of 2007. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;According to the International Iron and Steel Institute, or IISI, U.S. steel production totaled 91 million tons in 2008, representing a decrease of 7.31% as compared to 2007. </P>
<P>
<I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Europe </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The 2008 financial crisis spread through Europe in September and rapidly struck the steel sector. Auto production fell steadily throughout the year, reducing steel demand in the second half of 2008. </P>
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<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In order to prevent a price collapse, European producers cut output by 35%. Nevertheless, inventories remained high and there was additional pressure from imports, and prices reached their lowest levels at the beginning
of 2009. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With the recent reduction in freight charges, imported steel became more competitive than the local product at the end of the year. Transport costs, which had peaked at &#36;130 per ton by mid 2008, closed at just
&#36;10 per ton on December 2008, favoring imports, especially from China.</P>
<P>
<I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Asia </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;According to CRU Analysis, steel plate demand levels in China, which had been recording double-digit growth for some time, was in decline in the last two months of 2008 and it is estimated that the annual steel
consumption must have fallen by 17% due to dwindling demand in both the domestic and international markets. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nevertheless, IISI figures show that Chinese steel production edged up by 1.7% in 2008 to more than 500 million tons. In Japan, however, it contracted by 1.2% to 118 million tons. </P>
<P>
<I>Sales Taxes </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our deductions from operating revenues consist of sales taxes  the Social Integration Tax Program (<I>Programa de Integra&ccedil;&atilde;o Social</I>), or PIS, the Social Security Financing Tax
(<I>Contribui&ccedil;&atilde;o para o Financiamento da Seguridade Social</I>), or COFINS, the Tax on Industrial Products (<I>Imposto sobre Produtos Industrializados</I>), or IPI, and Tax on Services (Imposto sobre Servi&ccedil;os), or ISS, and the
ICMS tax. Sales taxes increased by 41%, from US&#36;1,305 million in 2007 to US&#36;1,835 million in 2008. This increase is explained by the substantial increase on sales in the domestic market, in line with our strategy of prioritizing the
Brazilian market.</P>
<P>
<I>Discounts, returns and allowances </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Discounts, returns and allowances are also deducted from our operating revenues.  Although discounts, deductions and allowances increased by 18.6%, from US&#36;156 million in 2007 to US&#36;185 million in 2008, they
remained stable when compared to our gross operating revenues.  These discounts, returns and allowances were made in the ordinary course of our business. </P>
<P>
<I>Net Operating Revenues </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net operating revenues increased by 30.3%, from US&#36;5,517 million in 2007 to US&#36;7,187 million in 2008, mainly due to the 31.9% increase in operating revenues, whereas sales deductions experienced an increase of
38.3% . Sales deductions, as a percentage of operating revenues, were 20.9% in 2007 and 21.9% in 2008. </P>
<P>
<I>Cost of Products Sold </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth our production costs, the production costs per ton of crude steel and the portion of production costs attributable to the primary components of our costs of production. With the exception
of coal and coke which we import and some metals (such as zinc, aluminum and tin), whose domestic prices are linked to international prices, our costs of production are mostly denominated in reais. The devaluation of the Brazilian real causes U.S.
dollar-denominated or U.S. dollar-linked production costs to increase as a percentage of total production costs. Conversely, appreciation of the real causes real-denominated production costs to increase as a percentage of total production costs.</P>
<P align="center">
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<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:10px">
  <TR>
    <TD></TD>
    <TD width=1%></TD>
    <TD width=7%></TD>
    <TD width=1%></TD>
    <TD width=7%></TD>
    <TD width=1%></TD>
    <TD width=7%></TD>
    <TD width=1%></TD>
    <TD width=7%></TD>
    <TD width=1%></TD>
    <TD width=7%></TD>
    <TD width=1%></TD>
    <TD width=7%></TD>
    <TD width=1%></TD>
    <TD width=7%></TD>
    <TD width=1%></TD>
    <TD width=7%></TD>
    <TD width=1%></TD>
    <TD width=7%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="17" align=center><B>Year Ended December, 31</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD colspan="17" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>2006</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>2007</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>2008</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD colspan="5" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="center"></TD>
    <TD colspan="5" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="center"></TD>
    <TD colspan="5" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center><B>US&#36; 000</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>US&#36;/ton</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>%</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>US&#36; 000</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>US&#36;/ton</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>%</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>US&#36; 000</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>US&#36;/ton</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>%</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Raw Materials&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;Iron Ore&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>66,174&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>14.92&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>3.2&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>130,712&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>24.65&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>5.7&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>150,716&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>29.55&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>5.1&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;Coal&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>348,264&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>78.52&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>16.9&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>421,996&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>79.59&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>18.4&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>613,774&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>120.35&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>20.8&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;Coke&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>36,048&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>8.13&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>1.7&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>63,994&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>12.07&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>2.8&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>232,151&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>45.52&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>7.9&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;Metals&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>165,020&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>37.20&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>8.0&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>242,987&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>45.83&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>10.6&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>147,934&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>29.01&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>5.0&nbsp;</TD>
  </TR>

<TR valign="bottom">
	<TD align=left> &nbsp;Outsourced Hot Coils&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>30,712&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>6.92&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>1.5&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>955&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>0.18&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>0.0&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>84,726&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>16.61&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>2.9&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp;Outsourced Slabs&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>389,095&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>87.72&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>18.9&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>11,052&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>2.08&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>0.5&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>174,073&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>34.13&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>5.9&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp;Other<SUP>(1)</SUP></TD>
	<TD>&nbsp;</TD>
	<TD align=right>136,206&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>30.71&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>6.6&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>216,415&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>40.82&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>9.4&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>276,177&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>54.15&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>9.4&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="right"></TD>
	<TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="right"></TD>
	<TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="right"></TD>
	<TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="right"></TD>
	<TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="right"></TD>
	<TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="right"></TD>
	<TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="right"></TD>
	<TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="right"></TD>
	<TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>1,171,519</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>264.12</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>56.8</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>1,088,111</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>205.23</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>47.5</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>1,679,551</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>329.33</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>56.9</B>&nbsp;</TD></TR>
<TR>
	<TD colspan=19>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Energy/Fuel&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>169,349</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>38.18</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>8.2</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>228,767</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>43.15</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>10.0</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>274,339&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>53.79&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>9.3&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Labor&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>175,651</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>39.60</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>8.5</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>217,816</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>41.08</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>9.5</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>199,352&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>39.09&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>6.7&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Services and&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>Maintenance&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>274,440</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>61.87</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>13.4</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>396,300</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>74.75</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>17.3</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>370,547&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>72.66&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>12.6&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Tools and Supplies&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>100,752</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>22.71</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>4.9</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>131,304</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>24.77</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>5.7</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>150,453&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>29.50&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>5.1&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Depreciation&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>165,813</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>37.38</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>8.0</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>217,824</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>41.08</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>9.5</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>264,880&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>51.94&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>9.0&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Others&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>5,055</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>1.14</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>0.2</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>12,414</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>2.34</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>0.5</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>11,023&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>2.16&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>0.4&nbsp;</TD></TR>
<TR>
	<TD colspan=19>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>2,062,579</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>465.0</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>100.0</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>2,292,537</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>432.4</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>100.0</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>2,950,145</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>578.47</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>100.00</B>&nbsp;</TD></TR>
</TABLE>
<BR>
<P>(1) Include pellets, scrap, limestone and dolomite.&nbsp;</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other than the sale of excess inventories from time to time and the purchase by our subsidiaries of semi- finished products from third parties for further processing, our cost of products sold is equivalent to our
  production cost.</P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are self-sufficient in almost all the raw materials used in the steel production. The principal raw materials we use in our integrated steel mill include iron ore, coke, coal (from which we make coke), limestone,
dolomite, aluminum, tin and zinc. In addition, our production operations consume water, gases, electricity and ancillary materials.</P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We obtain all of our iron ore requirements from our Casa de Pedra mine located in the State of Minas Gerais, as the limestone and dolomite from our Bocaina mine at Arcos in the State of Minas Gerais. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The coal and coke we consume are acquired from different international producers &#147;See Item Raw Materials and Suppliers&#148;. Given the worldwide economic growth over the last few years and increasing demand for
various commodities, coal and coke producers significantly raised their prices up until mid 2008, which strongly impacted the steel industry.</P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our coal costs increased from US&#36;422.0 million in 2007 to US&#36; 613.8 million in 2008, reaching approximately 21% of our production cost, due to the increased prices.</P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With respect to coke, we faced not only signifcant price increases, but also larger consumption, which impacted significantly our costs. Our coke costs raised from US&#36; 64.0 million in 2007 to US&#36; 232 million in
2008, accounting for almost 8% of our total production cost.</P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Another factor that impacted our production costs was the acquisition until October 2008 of slabs and hot-rolled coils from third parties in order to face the increase in domestic demand for flat steel. The costs with
outsourced slabs and hot coils reached US&#36;258.8 million in 2008, representing almost 9% of our total production costs, different from 2007, when we did not acquire slabs and hot-rolled coils from third parties. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other raw materials include pellets and scrap purchase in the market and also limestone and dolomite that we exctract from our own mines in the city of Arcos- Minas Gerais. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Energy and fuel costs increased from US&#36;228.8 million in 2007 to US&#36;274.3 million in 2008 owing to the increase in gas price, corresponding to 9% of our total production costs. </P>
<P>
<I>Gross Profit </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit increased by 47.9%, from US&#36;2,441 million in 2007 to US&#36;3,611 million in 2008, mainly due to the increase of 30.3% in net operating revenues from US&#36;5,517 million in 2007 to US&#36;7,187 million
in 2008, which was partially offset by the increase of 16.2% in the cost of products sold. </P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The 30.3% increase in our consolidated net operating revenues from 2007 to 2008 can be attributed to the following:&nbsp;</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with our steel segment: (i) larger volume of sales in the domestic market (increase from 3,614 million tons in 2007 to 4,158 million tons in 2008) where we historically have recorded higher profit margins; (ii) increase of the domestic sales in terms of total sales volume, from 67% in 2007 to 85% in 2008; and (iii) successive steel price hikes in the domestic market during 2008.&nbsp;</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the mining segment: (i) an all-time record of 18.5 million tons of iron ore sales volume in 2008 due to the increase of our iron ore export capacity in the Itagua&#237; port and general improvements in iron ore extraction processes and logistics; and (ii) the increase in average iron ore prices in the international market realized in 2008.&nbsp;</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On the other hand, our cost of products sold increased at a lower rate (16.2%) due to the following reasons:&nbsp;</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the steel segment (i) cost of products sold is mainly driven by raw material prices (which represent approximately 50% of our total steel production cost); (ii) we are self sufficient in the production of iron ore, which is one of the main raw material for steelmaking - thus, our exposure to the increases in raw material prices realized in 2008 was mainly limited to coke and coal (which represented 29% of our production cost in 2008); and (iii) there was no significant oscillation in the other steel production costs for the year.&nbsp;</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the mining segment: (i) the production cost is basically driven by extraction, beneficiation and logistic costs, which remained stable in 2008; and (ii) we realized a dilution in our per ton iron ore fixed production costs, due to the aforementioned increase in sales volumes.&nbsp;</P>
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<P>
<I>Selling, General and Administrative Expenses </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2008, we recorded selling, general and administrative expenses of US&#36;631 million, representing a 27.5% increase from the US&#36;495 million recorded in 2007. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selling expenses increased by 32.9%, from US&#36;310 million in 2007 to US&#36;412 million in 2008, mainly due to an increase in our efforts to sell steel products on the domestic market, an increase in freight prices
and distribution costs, and higher provisions for doubtful accounts. If expressed in <I>reais</I>, these expenses increased by 30.0%, but remained stable at 5.6% as a percentage of net operating revenues. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and administrative expenses increased by 18.4%, from US&#36;185 million in 2007 to US&#36;219 million in 2008, mainly due to higher labor costs, given the increase in the number of employees in 2008 and the
annual wage increases in May 2008. If expressed in <I>reais</I>, these expenses increased by 11.7% and decreased from 3.3% to 3.0%, as a percentage of net operating revenues. </P>
<P>
<I>Other Income (Expenses)</I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other expenses increased by US&#36;51 million, from an expense of US&#36;85 million in 2007 to an expense of US&#36;136 million in 2008, mainly due to increases in commercial contingencies and fines, in particular with
respect to transport of products.</P>
<P>
<I>Operating Income </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating income increased by 52.8%, or US&#36;983 million, from US&#36;1,861 million in 2007 to US&#36;2,844 million in 2008. This growth was mainly due to the US&#36;1,170 million increase in gross profit, reflecting
mainly the successive steel product price hikes along the year in the Brazilian market and the contribution of our mining segment. </P>
<P>
<I>Non-operating Expenses (Income), Net </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-operating income, net decreased by US&#36;203 million, from an income of US&#36;300 million in 2007 to an income of US&#36;97 million in 2008. Our non-operating expenses (income), net are comprised of financial
expenses, net, foreign exchange and monetary loss (gain), net and, in 2008, also the gain on 40% dilution of interest in our subsidiary Namisa to an Asian consortium. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December 30, 2008, we sold 2,271,825 shares of Namisa&#146;s voting capital, one of our mining subsidiaries and, subsequently, Namisa issued 187,749,249 new shares at a price of US&#36;16.20 per share, subscribed and
paid up by Big Jump Energy Participa&ccedil;&otilde;es S.A., or Big Jump, a company whose shareholders are Brazil Japan Iron Ore Corporation, or BJIOC, and Posco, increasing its ownership interest to 40%, diluting our voting and total interest in
Namisa to 59.99% . BJIOC is a company incorporated by a consortium formed by the Japanese companies Itochu Corporation, JFE Steel Corporation, Nippon Steel Corporation, Sumitomo Metal Industries Ltd, Kobe Steel Ltd and Nisshin Steel Co Ltd, and the
Korean company, Posco. Big Jump paid in cash for Namisa&#146;s shares the amount of US&#36;3,041 million.</P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of the acquisition, Big Jump holds 40% and CSN holds 59.99% of Namisa&#146;s shares and also based on the shareholders&#146; agreement of Namisa, our management concluded that Namisa&#146;s balance sheet
should not be consolidated with CSN&#146;s balance sheet as of December 30, 2008; accordingly, Namisa&#146;s results have been consolidated until the date of sale and dilution. After analyzing the transaction, we concluded that the purchaser
consortium has effective and significant participation rights rather than protective rights through the right to participate in significant decisions related to Namisa&#146;s ordinary course of business.</P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon the sale of Namisa&#146;s shares and dilution, CSN adopted income statement recognition as its accounting policy and, accordingly, recorded a net non-operating gain on 40%-dilution of its interest in the amount of
US&#36;1,667 million, as detailed below: </P>
<P align="center">
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<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD width=55%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD></TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=center>Amount&nbsp;</TD>
  <TD align="center">&nbsp;</TD>
  <TD align=center>Percentage&nbsp;</TD>
  <TD align="center">&nbsp;</TD>
  <TD align=center>Gain (loss)</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
  <TD></TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom">
	<TD align=left>Namisa's net equity before capital increase by&nbsp;Big Jump, represented by 287,303,436 shares&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>395&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>40%&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>(158)</TD></TR>

<TR valign="bottom">
  <TD align=left>Capital increase by Big Jump through issuance&nbsp;of 187,749,249 new shares (US&#36;1.48 per share&nbsp;plus additional paid in capital of US&#36;14.72 per&nbsp;share)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>3,041&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>60%&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>1,825&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>Net non-taxable gain on dilution of interest in&nbsp;Namisa&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>1,667&nbsp;</TD></TR>
</TABLE>
<BR>
<P>
The gain of US&#36;1,667 million referred to above is non-taxable since a dilution of interest is not considered as a capital gain in accordance with Brazillian tax legislation. </P>
<P>
<I>Financial Expenses (Income), Net</I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2008, our net financial expenses, increased by 73.5%, or US&#36;161 million, from US&#36;219 million in 2007 to US&#36;380 million, mainly due to the following items: </P>
<UL>
<LI>
US&#36;21 million increase in interest income;<br>
<br>
</LI>
<LI>
US&#36;130 million decrease in interest expense;<br>
<br>
</LI>
<LI>
US&#36;291 million decrease in our income from derivative instruments; and<br>
<br>
</LI>
<LI>
US&#36;21 million decrease in other financial income (expenses).</LI>
</UL>
<P>
<I>Interest Income </I> </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest income increased by 26.6%, or US&#36;21 million, from US&#36;79 million in 2007 to US&#36;100 million in 2008, mainly due to greater average amount of cash and cash equivalents. </P>
<P>
<I>Interest Expense</I> </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense decreased by 19.1%, or US&#36;130 million, from US&#36;680 million in 2007 to US&#36;550 million in 2008. This decrease was mainly due to a sharp decrease in interest on tax contingencies of US&#36;245
million, as well as lower interest rates on our <I>real</I>-denominated debt. This decrease was partially offset by an increase in taxes on financial income, in the amount of US&#36;175 million.</P>
<P>
<I>Derivative Instruments</I><B> </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The results on derivative instruments decreased by US&#36;291 million, from an income of US&#36;416 million in 2007 to an income of US&#36;125 million in 2008. Despite the depreciation of the exchange rate as of December 31, 2008, as compared to the exchange rate as of December 31, 2007, our foreign exchange derivative instruments
generated an income of US&#36;419 million in 2008 as compared to an expense of US&#36;219 million in 2007, which was offset by an expense of US&#36;530 million in 2008 in our equity linked derivatives, as compared to a gain of US&#36;640 million in
2007. In September 2008, we realized our equity swap agreement with a gain of US&#36;1,005.7 million. After realization, we renewed our equity swap agreement and, as of December 31, 2008, the accrued amount in our current liabilities, based on the
market value of our ADRs was an unrealized loss of US&#36;685.1 million. For more information on the equity swap agreements, see &#147;Item 4B&#151;Risk Factors&#148;, &#147;Item 10C&#151;Material Contracts&#148;, &#147;Item 11&#151;Quantitative and
Qualitative Disclosures About Market Risk&#151;Equity Risk&#148; and Note 21 to our consolidated financial statements contained in &#147;Item 18. Financial Statements&#148;. For a copy of the equity swap agreements as amended and novated, see
Exhibit 10.1 to this annual report. </P>
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<P>
<I>Other Financial Income (Expense) </I> </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other financial income (expense) decreased by US&#36;21 million, from an expense of US&#36;34 million in 2007 to an expense of US&#36;55 million in 2008, mainly due to expenses incurred in the normal course of business
such as discounts, taxes on financial income, bank charges and other minor items. </P>
<P>
<I>Foreign Exchange and Monetary Gain, Net </I> </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign exchange and monetary gain, net is mainly affected by fluctuations in the <I>real</I>/U.S. dollar foreign exchange rate and the impact of such fluctuations on the following: </P>
<UL>
<LI>
our U.S. dollar-denominated gross debt;<br>
<br>
</LI>
<LI>
our U.S. dollar-denominated cash, cash equivalents and short-term investments;<br>
<br>
</LI>
<LI>
our equity investments in offshore subsidiaries; and<br>
<br>
</LI>
<LI>
our trade accounts receivable and payable.</LI>
</UL>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The 388.8%, or US&#36;1,703 million, decrease in foreign exchange and monetary gain, from a US&#36;438 million gain in 2007 to a US&#36;1,265 million loss in 2008, was primarily caused by the depreciation of the
<I>real</I> against the U.S. dollar, which increased our expenses in connection with U.S. dollar-denominated debt and accounts payable. </P>
<P>
<I>Income Taxes </I> </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We recorded an expense for income tax and social contribution of US&#36;414 million in 2008, as compared to US&#36;534 million 2007. Expressed as a percentage of pre-tax income, income tax expense decreased from 24.7%
in 2007 to 14.0% in 2008.  Income tax expense in Brazil refers to the collection of federal income tax and social contribution tax. The statutory rates for these taxes applicable to the periods presented herein were 25% for federal income tax and 9%
for the social contribution. Therefore, the balances owed for these periods totaled US&#36;1,001 million in 2008 and US&#36;735 million in 2007 (34% of income before taxes and equity in affiliated companies). Adjustments are made to these rates in
order to arrive at the actual tax expense for the years. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the year ended December 31, 2008, adjustments totaled US&#36;587 million and were comprised of: </P>
<ul>
  <li>a US&#36;39 million benefit from interest on stockholders&#146; equity;&nbsp;<br>
    <br>
  </li>
  <li>a US&#36;472 million benefit related to non taxable income of subsidiaries or income taxable at different&nbsp;rates, net of US&#36;567 million benefit related to the 40% dilution of our interest in Namisa;&nbsp;<br>

    <br>
  </li>
  <li>a US&#36;21 million addition to valuation allowance since certain subsidiaries had tax losses carryforward&nbsp;in 2008 whitch are not expected to be recoveres; and<br>
      <br>

  </li>
  <li>tax incentives and other permanent differences that represented a net tax benefit of US&#36;97 million.&nbsp;</li>
</ul>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the year ended December 31, 2007, adjustments totaled US&#36;201 million and were comprised of:&nbsp;</p>
<ul>
  <li>a US&#36;40 million benefit from interest on stockholder&#146;s equity;&nbsp;<br>
    <br>
  </li>
  <li>a US&#36;159 million benefit related to non-taxable income of subsidiaries or taxable at different rates;&nbsp;<br>
    <br>
  </li>
  <li>a US&#36;12 million additions to valuation allowances; and&nbsp;<br>
    <br>
  </li>
  <li>other permanent differences that represented a net tax benefit of US&#36;14 million.&nbsp;</li>
</ul>
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<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our taxable income, generated from our operations in Brazil and abroad, is comprised of the following: </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD width=55%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD colspan="5" align=center><B>Year Ended December 31,</B>&nbsp;</TD>
  </TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD colspan="5" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>2007</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>2008</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
  <TD align=center><B>Changes</B>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center"></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center"></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD colspan="5" align=center><I>(In million of U.S. dollars)</I></TD>
  </TR>
<TR valign="bottom">
	<TD align=left>Brazil&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,562&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>3,225&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right>1,663&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Foreign&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>599&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>(284)</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right>(883)</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="right"></TD>
	<TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="right"></TD>
  <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left><B>Total</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>2,161</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right><B>2,941</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right><B>780</B>&nbsp;</TD></TR>
</TABLE>
<BR>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our taxable income in Brazil was impacted by the increase in sales. The total increase in taxable income generated in Brazil in 2008, as compared to 2007, totaled US&#36;1,663 million. Expressed in <I>reais</I>, our
taxable income increased by US&#36;28.7 in 2008, as compared to 2007. Our foreign taxable income decreased by US&#36;883 million in 2008, as compared to 2007. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It is not possible to predict the future adjustments to the federal income tax and social contribution at statutory rates, as they depend on interest on stockholder&#146;s equity, non-taxable factors including income
from offshore operations, and tax losses from offshore operations, especially when expressed as a percentage of income.</P>
<P>
<I>Accruals for Disputed Taxes Payable</I><I> </I><I> </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We record provisions for contingencies relating to legal proceedings with respect to which we deem the likelihood of an unfavorable outcome to be probable and the loss can be reasonably estimated. This determination is
made based on the legal opinion of our internal and external legal counsel. We believe these contingencies are properly recognized in our financial statements in accordance with SFAS No. 5. Those contingencies related to income taxes and social
contribution are accounted for based on the &#147;more-likely-than-not&#148; concept in accordance with FIN 48. We are also involved in judicial and administrative proceedings that are aimed at obtaining or defending our legal rights with respect to
taxes that we believe to be unconstitutional or otherwise not required to be paid by us. We believe that these proceedings will ultimately result in the realization of contingent tax credits or benefits that can be used to settle direct and indirect
tax obligations owed to the Brazilian federal or state governments. We do not recognize these contingent tax credits or benefits in our financial statements until realization of such gain contingencies has been resolved. This occurs when a final
irrevocable decision is rendered by the courts in Brazil. When we use contingent tax credits or benefits based on favorable temporary court decisions that are still subject to appeal to offset current direct or indirect tax obligations, we maintain
the legal obligation accrued in our financial statements until a final irrevocable judicial decision on those contingent tax credits or benefits is rendered. The accrual for the legal obligation related to the current direct or indirect tax
obligations offset is not reversed until such time as the utilization of the contingent tax credits or benefits is ultimately realized. This accounting is consistent with our analysis of a liability under FASB Concepts Statement No. 6. The
accounting for the contingent tax credits is in accordance with accounting for contingent assets under SFAS No. 5. Our accruals include interest on the tax obligations that we may offset with contingent tax credits or benefits at the interest rate
defined in the relevant tax law. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We classify an accrual as short-term when we expect the liability to be settled in 360 days or less. This usually occurs when a final and unappealable and irrevocable judgment has been rendered and the legal processes
are in the execution phase. However, given the complexity of the Brazilian legal system and the intricacies of some claims, it is impracticable for Brazilian companies to predict the time period in which final decisions will be reached for such
claims. Consequently, these claims are classified as long-term liabilities. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A brief description of the major recent developments regarding our accruals for disputed taxes payable follows: </P>
<P>
<I>Disputed Taxes Payable </I></P>
<P>
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Presumed credit on inputs (Imposto sobre produtos industrializados), or IPI (Excise tax). </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have accrued a liability for certain tax liabilities that were offset by credits related to IPI excise tax. The accrual is necessary to offset the contingent gain resulting from our use of IPI excise tax credits. The
IPI excise tax credits are similar to value added tax, or VAT, credits related to the purchase of goods used in the production
process. Brazilian law prevents companies from recognizing IPI excise tax credits on the acquisition of certain goods. We believe that this prohibition is unconstitutional since it is not consistent with general VAT principles and we are challenging
this prohibition in the Brazilian courts. In May 2003, we sought and obtained a favorable preliminary order from a Brazilian court authorizing us to offset federal tax liabilities with IPI excise tax credits under dispute. We are awaiting the
decision of a Brazilian court of first instance. After such a decision is rendered, we expect the decision will be subject to several stages of appellate review before a final unappealable judgment is obtained. The IPI excise tax credit accrual
recorded by us represents our statutory obligation to pay taxes that were offset with IPI excise tax credits. </P>
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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Several other Brazilian companies have challenged the same prohibition and these companies have received both favorable and unfavorable judgments at different stages of the lawsuit. Recently, for example, the Federal
Supreme Court issued a final, unappealable and irrevocable decision on June 25, 2007 against one taxpayer, denying the use of these credits. On August 27, 2007 the court decided against us, and we made a payment of US&#36;519 million in installments
to the Federal Revenue of Brazil and transferred the liability to the accounts of taxes payable in installments. We have filed an appeal against these unfavorable decision and we are currently awaiting decision on the matter. </P>
<P>
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IPI premium credit on exports</I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have recorded accruals for certain tax liabilities that were offset by IPI premium tax credits. The accrual is necessary to offset the contingent gain resulting from the use of IPI premium tax credits and represents
the statutory obligation to pay taxes that were offset by these credits. The IPI premium tax credits relate to export sales made from 1992 through 2002. Tax legislation allowed Brazilian companies to recognize IPI premium tax credits until 1983,
when an act of the executive branch of the Brazilian government cancelled such benefits and prohibited companies from recognizing these credits. We are challenging the constitutionality of the executive branch&#146;s action since only a law enacted
by the Brazilian Congress can cancel or repeal benefits duly enacted by prior legislation. In August 2003, we sought and obtained a favorable decision from a Brazilian court of first instance that authorized the use of IPI premium tax credits. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Brazilian National Treasury appealed such decision and got a favorable decision from Brazilian court of appeals. We filed appeals against such decision, to both the Superior Court of Justice and the Brazilian
Federal Supreme Court and are still awaiting the decisions from such courts. In September 2006, the National Treasury filed five tax foreclosures against us to require payments in the total amount of approximately R&#36;1 billion, referring to the
collection of taxes which were offset by the use of IPI premium tax credits. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During 2007, in view of these executions, the distribution of dividends and the payment of interest on shareholders&#146; equity resolved on April 30, 2007 were suspended and the amount allocated for such purpose was
blocked by court decision. On August 29, 2007, we offered assets in lien represented by treasury shares in the amount of US&#36; 270 million (R&#36;536 million translated using the exchange rate as of the date of the transaction). 25% of this amount
was substituted by judicial deposits in monthly installments performed up to December 31, 2007 and as these substitutions took place, the equivalent in shares was released from the lien at the share price determined at the closing price of the day
prior to the deposit. In view of these events, our current accounts were unblocked, the court decision to suspend the dividends distribution on this date was revoked, and dividends were paid to shareholders as from September 4, 2007. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of December 31, 2008, the IPI premium credit accrual represented the accumulated IPI tax credits used of US&#36;953 million (US&#36;1,179 million as of December 31, 2007), already updated by the SELIC rate.</P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This provision affects the sales taxes line-item of our income statement, and a reversal of this provision would affect the sales taxes and the financial income (expense), net line-items of our income statement.</P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have noted that several other Brazilian companies have challenged the same prohibition. Recent decisions in lower courts indicated that companies may be entitled to utilize these credits. However, on June 27, 2007
the Brazilian Superior Court issued a decision against one taxpayer, denying the use of these credits. This decision will be subject to review by the Federal Supreme Court, the highest level of the Courts in this case. </P>
<P>
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income tax and social contribution </I></P>
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<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) &#147;Plano Ver&atilde;o&#148; </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We claim recognition of the financial and tax effects on the calculation of income tax and social contribution on net income, related to the Consumer Price Index &#150; IPC understated inflation, which occurred in
January and February 1989, by a percentage of 51.87% (&#147;Plano Ver&atilde;o&#148;). In 2004, the proceeding was concluded and judgment was made final and unappealable, granting us the right to apply the index of 42.72% (Jan/89), of which the
12.15% already applied should be deducted. The application of 10.14% (Feb/89) was granted. The proceeding is now under accounting inspection. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December 31, 2008, we recorded US&#36;144 million (US&#36;187 million in 2007) as judicial deposit and a provision of US&#36;9 million (US&#36;12 million in 2007), which represents the portion not recognized by the
courts. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Social Contribution on Income from Export Revenues </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We filed a lawsuit challenging the assessment of Social Contribution on Income on export revenues, based on Constitutional Amendment No. 33/01 and in March 2004, we obtained an initial decision authorizing the exclusion
of these revenues from said calculation basis, as well as the offsetting of amounts paid as from 2001. The lower court decision was favorable and the proceeding is waiting for trial of the appeal filed by the Federal Government in the Regional
Federal Court. As of December 31, 2008, the amount of suspended liability and the offset credits based on the referred proceedings was US&#36;495 million (US&#36;557 million in 2007), already adjusted by the SELIC rate. </P>
<P>
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PIS/COFINS &#150; Law No. 9,718/98 </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PIS and COFINS taxes are assessed on revenues. In 1998, new tax legislation was enacted which required Brazilian companies to pay PIS and COFINS taxes on revenues generated by financial investments. Prior to 1998, the
Brazilian constitution stated that Brazilian companies were only required to pay PIS and COFINS taxes on revenues generated by operating activities. We are challenging the constitutionality of the assessment of PIS and COFINS taxes on revenues
generated by financial investments since, in order to expand the PIS and COFINS tax computation basis, the Brazilian Congress was required to observe a constitutionally mandatory waiting period prior to enacting the legislation. In addition, at the
time the new tax legislation was enacted, the Brazilian constitution did not allow such taxes to be assessed on revenues generated by financial investments. In February 1999, a lower court confirmed and we sought and obtained a favorable preliminary
order in March 2000. In April 2000, the Brazilian tax authorities appealed to the Brazilian court of appeals. On March 6, 2006, the Brazilian court of appeals issued a decision against us. On March 10, 2006, we appealed from such decision to both
the Superior Court of Justice and the Federal Supreme Court. Until the resolution of these appeals, our rights under the initial favorable decision were in effect. The PIS/COFINS accrual represents our statutory obligation to pay PIS/COFINS taxes
due. We have noted that some Brazilian companies obtained favorable final and unappealable judgments in 2005 regarding similar PIS/COFINS legal challenges. Those companies have accordingly reversed some or most of their related disputed tax payment
provisions. However, one company did not obtain a favorable decision and was required to pay the related tax obligation.</P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On May 31, 2007, a favorable decision to us was published in the Official Gazette of Justice, and made final and unappealable on June 16, 2007, when in view of such decision, we reversed the provision existing on that
date. The reversal of the provision increased our operating results of 2007 by US&#36;179 million. </P>
<P><i>Mining Segment</i></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We began exporting iron ore only in 2007, when we first presented our results by segment. As a result we only had a full year of iron ore export operation in 2008 and any comparative analysis for our mining segment between 2008 and 2007 is not representative in light of the low volumes sold in 2007.&nbsp;</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating revenues for our mining segment, excluding intersegment sales<sup>1</sup>, amounted to US$ 1,211 million in 2008, as compared to US$267 million in 2007, an increase of US$944 million (or 353.6%). If we include intersegment sales, operating revenues for our mining segment would have amounted to US$1,382 million in 2008, as compared to US$267 million in 2007, an increase of US$1,115 million (or 417.6%).&nbsp;</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The increase in operating revenues for our mining segment was mainly due to:&nbsp;</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) 	Increase in total iron-ore sales volume from 10.5 million tons in 2007 to 18.5 million tons in 2008, a 76% increase, mainly due to the increase in capacity in our Solid Bulks seaport terminal in the Itagua&#237; Port. The completion of the second phase of this terminal project in the Itagua&#237; Port resulted in an increase of the handling capacity from 7 million tons of iron ore per year in 2007 to 30 million tons in 2008.&nbsp;</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In terms of operating revenues, this increase in capacity enabled us to increase our export sales and, consequently, the total iron ore sales volumes, which resulted in an increase of US$523 million to our mining segment operating revenues from 2007 to 2008;&nbsp;</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)	Increase in iron ore international prices in light of substantial demand from China. In 2008 iron ore export prices averaged US$67 per ton, 56% more than the US$43 per ton average in 2007. The impact of the increase in prices on our operating revenues resulted in an increase of US$ 421 million to our mining segment from 2007 to 2008.&nbsp;</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cost and Operating Expenses for the mining segment increased from US$347 million in 2007 to US$562 million in 2008 due to the higher volume sold in 2008.&nbsp;</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2008 our gross profit for the mining segment amounted to US$ 928 million, with gross margin of 70%, and operating income amounted to US$767 million, with operating margin of 58%.  As compared to 2007 our margins increased in light of increase in iron ore prices, greater volume sold and dilution of iron ore fixed production costs.&nbsp;</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2008 operating revenues, gross profit, and operating income for Namisa were US$ 434 million, US$263 million and US$168 million, respectively.  Therefore, excluding Namisa our operating revenues, gross profit, and operating income arising from our mining activities in 2008 would have been US$948 million, US$665 million and US$599 million, respectively, which would still represent significant increases if compared to 2007 (which included Namisa).&nbsp;</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Namisa's results for 2009 will be presented as equity in results of affiliates in our statement of income under our mining segment.&nbsp;</P>
<P>________________________________________<br>

<sup>1</sup> In 2008, intersegment sales from mining to steel segment amounted to US$171 million.  Including intersegment sales, mining operating revenues totaled US$1,382 million as presented in our consolidated statements of income in Note 19.&nbsp;</P>
<P>
<B><I>Year 2007 Compared to Year 2006 </I></B></P>
<P>
<I>Operating Revenues </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating revenues increased by 45%, to U&#36;6,978 million in 2007 from US&#36;4,813 million in 2006, reflecting mainly the recovery of the total production of Blast Furnace No. 3, after the accident involving the gas
cleaning system adjacent to it, on January 22, 2006. This accident prevented us from operating the equipment until the second half of 2006, and impacted our operating revenues, gross profit and operating income, as a result of reduced crude steel
production and sales volumes. We have overcome the effects of the accident and total production and total sales volume increased to 5,323 million tons in 2007 from 3,499 million tons in 2006, and to 5,378 million tons in 2007 (a record for us) from
4,385 million tons in 2006, respectively. </P>
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<P>
<I>Domestic Sales </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A healthy economic environment in Brazil; inflation rates well under control and within the target determined by the monetary authorities; declining base and long-term interest rates and the announcement of significant
investment plans from the public and private sectors strongly increased the demand for steel products in 2007. Brazil&#146;s GDP recorded growth was 5.4% in 2007, higher than the global average of 3.4% but still lower than the average registered by
the emerging countries of 7.3% . In 2007 as a whole, Brazil&#146;s flat steel sales increased 17% over the previous year, led by the automakers (annual production of 2.9 million units, 14% above the previous year), distribution (record sales of 3.3
million tons of steel products, 26% above 2006), home appliance (approximately 10% annual growth rate) and civil construction (5.5% increase over 2006 due to the greater availability of mortgage loans) segments. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our annual domestic sales volume increased 28% to 3,614 million tons in 2007 from 2,818 million tons in 2006, in line with our strategy of prioritizing the Brazilian market, where flat steel demand increased by
approximately 17% and where we have historically generated higher profit margins. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the year as a whole, according to IBS, we recorded an average market share of 34% in 2007 in terms of volume, higher than the 27% recorded during the previous year. As for the product mix, once again high
value-added products such as galvanized, galvalume and tin plate accounted for approximately 50% of the market share for the coated products domestic market. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Domestic prices were adjusted twice to reflect the pent up demand in the local economy. The price of galvanized products sold to distributors and to the civil construction segment increased 6% in January and all steel
products, but tin plate, increased from 10% to 14% by mid 2007. For the year as a whole, our average prices increased 6.5% in U.S. dollars, reflecting both the magnitude and timing of the price increases and the appreciation of the <I>real</I>
against the dollar. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the domestic market, our operating revenues increased by 49%, to US&#36;5,283 million in 2007 from US&#36;3,550 million in 2006. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of the combined effect of prices and volumes sold and the appreciation of the <I>real</I> against the U.S. dollar, total operating revenues increased 45% (or US&#36;2,165 million), to US&#36;6,978 million in
2007 from US&#36;4,813 million in 2006, another record for us. </P>
<P>
<I>Export Sales </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The year 2007 was marked by a slowing global demand for steel products; exceptionally volatile prices for metals and other commodities, and price increases by the end of the year to catch up with cost pressures on raw
materials. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, the international steel market continued with its consolidation process, with expansion projects concentrated in the low-cost production regions, notably in the &#147;BRIC&#148; nations (Brazil, India,
Russia and China). </P>
<ul>
  <li>   In the North American steel market, the overall economic outlook is still uncertain, given the crisis in the real estate market and its impact on the financial system and other industrial segments in the United States. Demand from the main
    productive sectors slowed throughout 2007, although the need to import approximately 30 million tons of finished steel products per annum, the devaluation of the dollar against the other leading currencies, the exceptionally low level of
    distributors&#146; inventories, cost pressure from the main production inputs and the increase in freight charges led to price rises in the last quarter of 2007 and the latest negotiations would appear to indicate a continuation of this trend
    throughout 2008. <br>
    <br>
  </li>
  <li>  In the European steel markets, despite a slow demand, depressed prices and the uncertain economic outlook resulting from the financial crisis in the United States and its potential effects on the European economy, prices begun to increase in
    recent months due to the expected upturn in the price of the main raw materials and the significant decline of imports from China in late 2007. </li>
</ul>
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<ul>
  <li>  In the Asian steel markets, Chinese total production and exports increased to 489 million tons and 69 million tons in 2007 from 423 million tons and 43 million tons in 2006, respectively. Expectations that the Chinese Government would
    announce new measures to avoid a major flood of exports of low value added products and rumors that European countries were analyzing the adoption of anti dumping measures against China led the Chinese exporters to increase the volume of exports
    during the bulk of the year. The removal of benefits and the imposition of new taxes on exports in late 2007 led to a change in sales allocation towards the Chinese domestic economy and, as a consequence, domestic prices decreased. The tighter
    credit terms from official banks; the increase in international freight charges and costs pressures on raw materials, have made Chinese steel products less competitive in the international arena. Finally, harsh weather in China has jeopardized
    charcoal output and local infrastructure, forcing certain steel plants in the south of the country to temporarily suspend operations. </li>
</ul>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2007 we exported 1,764 million tons of steel products, 12.5% above the exported volume recorded in 2006. Our average export prices in 2007 increased at an average of 8.5% in U.S. dollars compared to 2006. In the
export market, operating revenues increased 34.2% to US&#36;1,695 million in 2007 from US&#36;1,263 million in 2006. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The year 2007 was also marked by our entrance to the international iron ore market. The so called sea born market is characterized by the existence of few large players who control approximately 70% of the total supply
of iron ore. Over the last three years the price of the products produced in Brazil, which is traded at a premium for quality to the products from other countries, increased by approximately 71.5%; 19% and 9.5% in 2005, 2006 and 2007, respectively.
For 2008 contracts, Brazilian suppliers announced an approximately 65% price increase for pellet feed and sinter feed and 84% for pellets. We exported a total of 5.1 million tons of iron ore products from our own seaport terminal in Tecon to
customers located in Asia and the Middle East and generated net revenues of U&#36;179 million. </P>
<P>
<I>Net Operating Revenues </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net operating revenues increased by 43.5%, to US&#36;5,517 in 2007 from US&#36;3,846 million in 2006, mainly due to the 45% increase in operating revenues, whereas sales deductions experienced an increase of 51.4% .
Sales deductions, as a percentage of operating revenues, were 20% in 2006 and 20.9% in 2007. </P>
<P>
<I>Cost of Products Sold </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cost of products sold increased by 46.3%, to US&#36;3,076 million in 2007 from US&#36;2,102 million in 2006, mainly as a result of the sales volume, which increased by 52% or 1,824 million tons, after the accident on
the gas cleaning system adjacent to Blast Furnace No. 3 which prevented us from operating at full speed during the first half of 2006, and the strengthening of the <I>real</I> against the U.S. dollar and the resulting effect on our
<I>real</I>-denominated costs. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Production costs increased by 11%, or US&#36;231 million, to US&#36;2,293 million in 2007 from US&#36;2,062 million in 2006. There were, however, opposing factors which ended up partially canceling each other out:
higher consumption and prices of raw materials were offset by no consumption at all in 2007 of outsourced slabs and hot coils acquired in 2006 to keep the rolling mills at full speed after the accident on the gas cleaning system. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other than the sale of excess inventories from time to time and the purchase by our subsidiaries of semi- finished products from third parties for further processing, our production cost is a proxy to our cost of goods
sold. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth our production costs, the production costs per ton of crude steel and the portion of production costs attributable to the primary components of our costs of production. With the exception
of coal and some coke, which we import, and some metals (such as zinc, aluminum and tin), whose domestic prices are linked to international prices, our costs of production, as well as our other operating expenses, are mostly denominated in
<I>reais</I>. The devaluation of the Brazilian <I>real</I> causes U.S. dollar-denominated or U.S. dollar-linked production costs to increase as a percentage of total production costs. Conversely, appreciation of the <I>real</I> causes
<I>real-</I>denominated production costs to increase as a percentage of total production costs.</P>
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<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:9px">
<TR>
	<TD></TD>
    <TD width=1%></TD>
    <TD width=7%></TD>
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    <TD width=7%></TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD colspan="17" align=center><B>Year Ended December, 31</B>&nbsp;</TD>
  </TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD colspan="17" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD colspan="5" align=center><B>2005</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD colspan="5" align=center><B>2006</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD colspan="5" align=center><B>2007</B>&nbsp;</TD>
  </TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD colspan="5" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center"></TD>
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  </TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>US&#36; 000 </B></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=center><B>US&#36;/ton</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>%</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>US&#36; 000 </B></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=center><B>US&#36;/ton</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>%</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>US&#36; 000 </B></TD>
	<TD align=center>&nbsp;</TD>
	<TD align=center><B>US&#36;/ton</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>%</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD colspan=3 align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD colspan=3 align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD colspan=3 align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Raw Materials&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp;Iron Ore&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>72,551&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>14.03&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>4.0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>66,174&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>14.92&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>3.2&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>130,712&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>24.65&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>5.7&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp;Coal&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>387,514&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>74.92&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>21.2&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>348,264&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>78.52&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>16.9&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>421,996&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>79.59&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>18.4&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp;Coke&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>224,530&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>43.41&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>12.3&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>36,048&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>8.13&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1.7&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>63,994&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>12.07&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2.8&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp;Metals&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>4,501&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0.87&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0.2&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>165,020&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>37.20&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>8.0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>242,987&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>45.83&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>10.6&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp;Outsourced Hot Coils&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>119,177&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>23.04&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>6.5&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>30,712&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>6.92&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1.5&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>955&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0.18&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0.0&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp;Outsourced Slabs&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>-&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>389,095&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>87.72&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>18.9&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>11,052&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2.08&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0.5&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp;Other<SUP>(1)</SUP></TD>
	<TD>&nbsp;</TD>
	<TD align=right>148,418&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>28.70&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>8.1&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>136,206&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>30.71&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>6.6&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>216,415&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>40.82&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>9.4&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>956,690</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>184.97</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>52.3</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>1,171,519</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>264.12</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>56.8</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>1,088,111</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>205.23</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>47.5</B>&nbsp;</TD></TR>
<TR>
	<TD colspan=19>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Energy/Fuel&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>191,568&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>37.04&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>10.5&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>169,349&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>38.18&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>8.2&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>228,767&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>43.15&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>10.0&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Labor&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>157,899&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>30.53&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>8.6&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>175,651&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>39.60&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>8.5&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>217,816&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>41.08&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>9.5&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Services and&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Maintenance&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>256,965&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>49.68&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>14.0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>274,440&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>61.87&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>13.4&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>396,300&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>74.75&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>17.3&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Tools and Supplies&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>105,272&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>20.35&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>5.7&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100,752&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>22.71&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>4.9&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>131,304&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>24.77&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>5.7&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Depreciation&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>142,219&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>27.50&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>7.8&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>165,813&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>37.38&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>8.0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>217,824&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>41.08&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>9.5&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Other&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>20,313&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>3.93&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1.1&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>5,055&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1.14&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0.2&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>12,414&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2.34&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0.5&nbsp;</TD></TR>
<TR>
	<TD colspan=19>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>1,830,925</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>354.0</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>100.0</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>2,062,579</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>465.0</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>100.0</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>2,292,537</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>432.4</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>100.0</B>&nbsp;</TD></TR>
</TABLE>
<BR>
<P>(1) Include pellets, scrap, limestone and dolomite.&nbsp;</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The comparative analysis of the average cost per ton of products, which decreased 7% from US&#36;465.0 in 2006 to US&#36;432.4 in 2007, is impacted by the absence of slabs and coils acquired from third parties after the
  accident on the gas cleaning system in 2006 and the greater use of raw materials such as iron ore, coal, coke, aluminum, tin and zinc which increased by 51%, 30%, 37%, 37%, 15% and 4%, respectively. Prices per ton of iron ore, coke, aluminum, tin
  and zinc increased by 30%, 30%, 11%, 73% and 30%, respectively. Prices per ton of coal decreased by 7%. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There is a large difference between the costs of other items expressed in <I>reais</I> and those expressed in U.S. dollars, and a large proportion of these costs is denominated in <I>reais</I>. As a result, our labor
costs in 2007 expressed in U.S. dollars increased 24%, while our labor costs expressed in <I>reais</I> increased 10.1% compared to 2006, mainly reflecting the annual Brazilian inflation rate and the annual wage increases in May 2006. For further
information, see &#147;&#151;Selling, General and Administrative Expenses.&#148; In addition, our depreciation costs in 2007 expressed in U.S. dollars increased by 31%, while our depreciation costs expressed in Brazilian <I>reais</I> increased by
8.8% . </P>
<P>
<I>Gross Profit </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit increased by 40%, to US&#36;2,441 million in 2007 from US&#36;1,744 million in 2006, mainly due to the 23% increase in sales volume, to 5,378 million tons, and the 43.4% increase in net operating revenues
to US&#36;5,517 million. On the other hand, the costs of products sold increased by 46.3% to US&#36;3,076 million. </P>
<P>
<I>Selling, General and Administrative Expenses </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2007, we recorded selling, general and administrative expenses of US&#36;495 million, representing a 57.1% increase from the US&#36;315 million recorded in 2006. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selling expenses increased by 85.6%, to US&#36;310 million in 2007 from US&#36;167 million in 2006, mainly due to the increase in sales volume and the strengthening of the <I>real</I> against the U.S. dollar. As a
percentage of net operating revenues, selling expenses increased to 5.6% in 2007 from 4.3% in 2006. If expressed in <I>reais</I>, these expenses increased by 26.9%, but remained stable at 5.1% as a percentage of net operating revenues. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and administrative expenses increased by 25%, to US&#36;185 million in 2007 from US&#36;148 million in 2006, mainly due to increased labor expenses (wages increased in May 2007 pursuant to annual negotiations
under our collective bargaining agreements). If expressed in <I>reais</I>, these expenses increased by 14.6% and decreased from 3.7% to 3.4%, as a percentage of net operating revenues. </P>
<P align="center">
75 </P>

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<P>
<I>Other Income (Expenses) </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When compared to 2006, other expenses sharply decreased by US&#36;64 million to an expense of US&#36;85 million in 2007 from an expense of US&#36;149 million in 2006. The variation is primarily due to the gain from the
sale of Corus&#146; stocks in 2007 of US&#36;116 million partially offset by increases in contingencies of US&#36;47 million, of which US&#36;36 million were labor-related and US&#36;11 million were civil liabilities, and fines of US&#36;14 million.
</P>
<P>
<I>Operating Income </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating income increased by 45%, or US&#36;581 million, to US&#36;1,861 million in 2007 from US&#36;1,280 million in 2006. This increase was mainly due to the US&#36;697 million increase in gross profit. </P>
<P>
<I>Non-operating Expenses (Income), Net </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-operating expenses, net increased by US&#36;593 million, to an income of US&#36;300 million in 2007 from an expense of US&#36;293 million in 2006. Our non-operating expenses (income), net are comprised of financial
expenses, net and foreign exchange and monetary gain, net. </P>
<P>
<I>Financial Expenses (Income), Net </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2007, our financial expenses, net decreased by 58.9%, or US&#36;314 million, to US&#36;219 million in 2007, from US&#36;533 million in 2006, mainly due to the following items : </P>
<UL>
<LI>
US&#36;50 million decrease in interest income;<br>
<br>
</LI>
<LI>
US&#36;285 million increase in interest expense;<br>
<br>
</LI>
<LI>
US&#36;640 million improvement in the results of our derivative instruments; and<br>
<br>
</LI>
<LI>
US&#36;9 million increase in other financial income (expenses).</LI>
</UL>
<P>
<I>Interest Income </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest income decreased by 38.8%, or US&#36;50 million, to US&#36;79 million in 2007 from US&#36;129 million in 2006, mainly due to lower interest rates in Brazil and a lower average amount of cash and cash
equivalents and short-term investments. </P>
<P>
<I>Interest Expense </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense increased by 57.8%, or US&#36;249 million, to US&#36;680 million in 2007 from US&#36;431 million in 2006. This increase was mainly due to: (i) an increase of US&#36;383 million on the provision for IPI
(Excise tax) presumed credit on inputs and IPI premium credit over exports tax contingencies to reflect the monetary adjustment by the SELIC rate and default charges; (ii) an increase in the provision for the CPMF tax by US&#36;54 million; (iii) the
reversal of a US&#36;206 million provision for PIS/COFINS social taxes assessed on financial instruments and interest income; and, (iv) lower interest expenses on debt instruments of US&#36;20 million. </P>
<P>
<I>Derivative Instruments</I> </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The results on derivative instruments improved by US&#36;634 million, to an income of US&#36;416 million in 2007 from an expense of US&#36;218 million in 2006. Although the strengthening of the real against the U.S.
dollar was more pronounced in 2007 (17.15%) than in 2006 (8.66%), our expenses on foreign exchange derivative instruments decreased by US&#36;109 million to US&#36;219 million, because the average notional value of those hedging contracts was
smaller in 2007. Additionally, we recorded gains on equity linked derivatives of US&#36;640 million in 2007 against US&#36;110 million in 2006. The equity swap agreements state that the counterparty must pay us the cash dividends and final price
return, if positive, on 29,684,400 CSN ADRs and we must pay the counterparty a fixed rate of 6.2569% per annum on the initial price of this number of ADRs and the final price return, if negative, on this number of ADRs. Since we entered into these
swap agreements, our shares have appreciated more than 2,000% over the initial
price of the ADRs on the New York Stock Exchange. As of December 31, 2007, the accrued value of these swap agreements to us, based on the market value of our ADRs was US&#36;813.3 million. See &#147;Item 4B&#151;Risk Factors.&#148; For more
information on the equity swap agreements, see &#147;Item 10C&#151;Material Contracts,&#146; &#147;Item 11&#151;Quantitative and Qualitative Disclosures About Market Risk&#151;Equity Risk&#148; and Note 21 to our consolidated financial statements
contained in &#147;Item 18. Financial Statements.&#148; For a copy of the equity swap agreements as amended and novated, see Exhibit 10.1 to this annual report. </P>
<P align="center">
76 </P>

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<P><I>Other Financial Income (Expense) </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other financial income (expense) decreased by US&#36;21 million, to an expense of US&#36;34 million in 2007, from an expense of US&#36;13 million in 2006, mainly due to expenses incurred in the normal course of business
such as discounts, bank charges and other minor items. </P>
<P>
<I>Foreign Exchange and Monetary Gain, Net </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign exchange and monetary gain, net is mainly affected by fluctuations in the real/U.S. dollar foreign exchange rate and the impact of such fluctuations on the following: </P>
<UL>
<LI>
our U.S. dollar-denominated gross debt;<br>
<br>
</LI>
<LI>
our U.S. dollar-denominated cash, cash equivalents and short-term investments;<br>
<br>
</LI>
<LI>
our equity investments in offshore subsidiaries; and<br>
<br>
</LI>
<LI>
our trade accounts receivable and payable.</LI>
</UL>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The 101%, or US&#36;220 million increase in foreign exchange and monetary gain, to US&#36;438 million in 2007 from US&#36;218 million in 2006, was primarily due to the impact of the 17.2% appreciation of the <I>real</I>
against the U.S. dollar on our higher average accounts payable denominated in U.S. dollars. </P>
<P>
<I>Income Taxes </I> </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We recorded an expense for income tax and social contribution of US&#36;534 million in 2007, compared to US&#36;296 million 2006. The difference is due to the increase in income before taxes and equity in results of
affiliated companies to US&#36;2,161 million in 2007 from US&#36;987 million in 2006. Expressed as a percentage of pre-tax income, income tax expense decreased to 24.7% in 2007 from 30% in 2006. Income tax expense in Brazil refers to the collection
of federal income tax and social contribution tax. The statutory rates for these taxes applicable to the periods presented herein were 25% for federal income tax and 9% for the social contribution. Therefore, the balances owed for these periods
totaled US&#36;735 million in 2007 and US&#36;336 million in 2006 (34% of income before taxes and equity in affiliated companies). Adjustments are made to these rates in order to arrive at the actual tax expense for the years. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the year ended December 31, 2007, adjustments totaled US&#36;201 million and were comprised of: </P>
<UL>
<LI>
a US&#36;40 million benefit from interest on stockholder&#146;s equity;<br>
<br>
</LI>
<LI>
a US&#36;159 million benefit related to non-taxable income of subsidiaries or taxable at different rates;<br>
<br>
</LI>
<LI>
US&#36;12 million additions to valuation allowances; and<br>
<br>
</LI>
<LI>
other permanent differences that represented a net tax benefit of US&#36;14 million.</LI>
</UL>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the year ended December, 31 2006, these adjustments totaled an expense of US&#36;40 million and were comprised of: </P>
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<ul>
  <li>   a US&#36;28 million benefit from interest on stockholder&#146;s equity;<br>
    <br>
  </li>
  <li>  other permanent differences that represented a net tax credit of US&#36;12 million. The reversal of tax payable under dispute in the amount of US&#36;18 million was offset against foreign exchange loss on the net equity of our offshore
    subsidiaries, due to the appreciation of the <I>real </I>against the U.S. dollar, which was recorded in our results of operations for Brazilian GAAP purposes and represented a non- taxable item. Also, certain expenses such as fines, gifts and
    donations are included within these permanent differences. </li>
</ul>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our taxable income, generated from our operations in Brazil and abroad, is comprised of the following: </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD width=55%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD colspan="5" align=center><B>Year Ended December 31,</B>&nbsp;</TD>
  </TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD colspan="5" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>2006</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>2007</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
  <TD align=center><B>Changes</B>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center"></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center"></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD colspan="5" align=center><I>(In million of U.S. dollars)</I></TD>
  </TR>
<TR valign="bottom">
	<TD align=left>Brazil&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>944&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>1,562&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right>618&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Foreign&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>43&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>599&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right>556&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>Total</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>987</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right> <B>2,161</B>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right><B>1,174</B>&nbsp;</TD></TR>
</TABLE>
<BR>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our taxable income in Brazil was impacted by the increase in sales. The total increase in taxable income generated in Brazil in 2007 compared to 2006 totaled US&#36;618 million. Expressed in <I>reais</I>, our taxable
income increased 45% in 2007 compared to 2006.</P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our foreign taxable income in the years ended December 31, 2006 and 2007 increased US&#36;556 million. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It is not possible to predict the future adjustments to the federal income tax and social contribution at statutory rates, as they depend on interest on stockholder&#146;s equity, non-taxable factors including income
from offshore operations, and tax losses from offshore operations, especially when expressed as a percentage of income. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For a brief description of the major recent developments regarding our accruals for disputed taxes payable, see &#147;&#151;Year 2008 Compared to 2007.&#148; </P>
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<P>
<B>5B. Liquidity and Capital Resources </B></P>
<P>
<B>Overview </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our main uses of funds are for capital expenditures, repayment of debt and dividend payments. We have historically met these requirements by using cash generated from operating activities and through the issuance of
short-and long-term debt instruments. We expect to meet our cash needs for 2009 primarily through a combination of operating cash flow, cash and cash equivalents on hand and newly issued long-term debt instruments. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, from time to time, we review acquisition and investment opportunities and will, if a suitable opportunity arises, make selected acquisitions and investments to implement our business strategy. We generally
make investments directly or through subsidiaries, joint ventures or affiliated companies, and fund these investments through internally generated funds, the issuance of debt, or a combination of such methods. </P>
<P>
<B>Sources of Funds and Working Capital </B></P>
<P>
<B><I>Cash Flows</I></B> </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents as of December 31, 2006, 2007 and 2008 totaled US&#36;959 million, US&#36;1,213 million and US&#36;3,542 million, respectively. </P>
<P>
<I>Cash Generated by Operating Activities </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We generated cash from our operations in the total amount of US&#36;919 million, US&#36;1,264 million and US&#36;2,067 million in 2006, 2007 and 2008, respectively, providing us with a significant source of liquidity.
The 63.5%, or US&#36;803 million, increase in cash flow from operating activities in 2008 as compared to 2007 was mainly due to (i) an increase of US&#36;951 million in the net income reported by us in 2008; (ii) an increase of US&#36;590 million in
adjustments to reconcile net income mainly driven by a US&#36;1,703 million increase in net foreign exchange loss, a US&#36;709 million increase in accrual for derivatives, partially offset by the gain on dilution of our interest in Namisa of
US&#36;1,667 million; (iii) an increase of US&#36;28 million in our operating liabilities primarily due to an increase of US&#36;390 million in trade accounts payable, partially offset by a decrease of US&#36;293 million in taxes payable; and (iv)
these increases were partially offset by the increase of US&#36;769 million in our operating assets such as trade accounts receivable, inventories and recoverable taxes.</P>
<P>
<I>Cash Used in Investing Activities</I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We used cash in our investing activities in the total amount of US&#36;839 million, US&#36;1,091 million and US&#36;1,292 million in 2006, 2007 and 2008, respectively. The net increase of US&#36;201 million in 2008 as
compared to 2007 was mainly due to an increase of US&#36;254 million in investments in property, plant and equipment and a realized gain on derivatives instruments of US&#36;1,006 million, reduced by the guarantee margin of US&#36;1,347 million made
upon renewal of our derivative contract, offset by a decrease of US&#36;386 million in restricted deposits from legal proceedings. Additionaly, in 2007, investing activities were impacted by the acquisition of CFM in the amount of US&#36;348 million
and the proceeds from sale of short-term investments of US&#36;437 million that did not occur in 2008.</P>
<P>
<I>Cash Used in Financing Activities </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash used in financing activities was US&#36;263 million and US&#36;122 million in 2006 and 2007, respectively, and provided by was US&#36;1,867 million in 2008. The US&#36;1,989 million increase in cash used in
financing activities in 2008, as compared to 2007, was mainly driven by approximately US&#36;3.0 billion received on December 30, 2008 as pre-payment for future sales of ROM and rendering of port services to Namisa, partially offset by higher
distribution of dividends and interest on shareholders&#146; equity of US&#36;1,238 million, as compared to US&#36;352 million in 2007, and US&#36;115 million higher acquisition of our own shares to be held in treasury. For information on the sale
of 40% of our ownership interest in Namisa, see &#147;Item 4A. History and Development of the Company&#151;Acquisitions and Dispositions&#148;.</P>
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<P>
<B><I>Trade Accounts Receivable Turnover Ratio </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our receivable turnover ratio (the ratio between trade accounts receivable and net operating revenues), expressed in days of sales decreased to 27 on December 31, 2008 from 37 on December 31, 2007, reflecting an
improvement in the financial profile of our domestic customers in the last two years who were also benefiting from the more favorable local economic environment and credit terms available in the financial system until September 2008, when the
effects of 2008 financial crisis grew in size and scope. </P>
<P>
<B><I>Inventory Turnover Ratio </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our inventory turnover ratio (obtained by dividing inventories by annualized cost of goods sold), expressed in days of cost of goods sold, excluding the effects of depreciation of the <I>real</I>, increased to 135 days
in 2008, as compared to 130 days in 2007, primarily as a result of the lower demand for steel products worldwide in the last two months of 2008.</P>
<P>
<B><I>Trade Accounts Payable Turnover Ratio </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The accounts payable turnover ratio (obtained by dividing trade accounts payable by annualized cost of goods sold), expressed in days of cost of goods sold, decreased to 79 on December 31, 2008 from 86 on December 31,
2007, starting to reflect the effects of the 2008 financial crises in the last quarter of 2008. </P>
<P>
<B><I>Long-term debt (includes current portion) </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Given the capital intensive and cyclical nature of our industrial segment, and the generally volatile economic environment in certain relevant emerging markets, we have retained a substantial amount of cash on hand to
run our operations, to satisfy our financial obligations, and to be prepared for potential investment opportunities. As of December 31, 2008, cash and cash equivalent instruments totaled US&#36;3,542 million. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We were also taking advantage of the then current liquidity conditions to extend the maturity profile of gross debt. These activities are unrelated to the management of any interest rate, inflation and/or foreign
exchange risk exposure. Given the lack of a liquid secondary market for our short term debt instruments, we have accumulated cash instead of prepaying our debt prior to final maturity. As of December 31, 2008, short-term and long-term indebtedness
accounted for 27.4% and 72.6%, respectively, of our total debt, and the average life of our existing debt was equivalent to approximately ten years, considering 40 years-term for the perpetual bonds issued in July 2005. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2008, our capital expenditures were US&#36;886 million used in acquisitions of equipment, of which US&#36;247 million was used in the Casa de Pedra mine expansion, US&#36;34 million in projects relating to the
Itagua&iacute; Port expansion and US&#36;65 million in maintenance. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2009, we plan to make capital expenditures of up to US&#36;1,500 million, compared to US&#36;886 million in 2008, US&#36;980 million in 2007 and US&#36;706 million in 2006. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We expect to meet our liquidity requirements from cash generated from operations, and, if needed, the issuance of debt securities. </P>
<P>
<B><I>Company Debt and Derivative Instruments </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At December 31, 2007 and 2008, total debt (composed of current portion of long-term debt, accrued finance charges, mark-to-market adjustments on derivative instruments, and long-term debt and debentures) aggregated
US&#36;4,769 million and US&#36;5,525 million, respectively, equal to 165% and 167% of the stockholders&#146; equity at December 31, 2007 and 2008, respectively. At December 31, 2008, our short-term debt (composed of current portion of long-term
debt, mark-to-market adjustments on derivative instruments, and including accrued finance charges) totaled US&#36;2,089 million and our long-term debt (composed of long-term debt and debentures) totaled US&#36;3,436 million. The foregoing amounts do
not include debt of others for which we are contingently liable. See &#147;Item 5E. Off-Balance Sheet Arrangements.&#148; </P>
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<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At December 31, 2008, approximately 15% of our debt was denominated in reais and substantially all of the remaining balance was denominated in U.S. dollars.</P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our current policy is economically to protect ourselves against foreign exchange losses on our foreign currency-denominated debt and currently approximately 100% of our exposure are protected through foreign exchange
derivative products, U.S. dollar-denominated fixed income investments and equity investments in offshore subsidiaries. We continue to review our foreign exchange exposure policy and there is no assurance that we will maintain our current level of
protection against such exposure. For a description of our derivative instruments, see Note 21 to our consolidated financial statements contained in &#147;Item 18. Financial Statements.&#148; Also see &#147;Non-operating Expenses (Income), Net under
&#147;Item 5A. Operating Results&#151;Results of Operations&#151;Year 2008 Compared to Year 2007&#151;Non-operating Expenses (Income), Net&#148; and &#147;Item 5A. Operating Results&#151;Results of Operations&#151;Year 2007 Compared to Year
2008&#151;Non-operating Expenses (Income), Net.&#148; </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The major components of US&#36;1,296 million of our consolidated current portion of long-term debt outstanding at December 31, 2008 were: </P>
<UL>
<LI>
US&#36;149 million of trade-related transactions;<br>
<br>
</LI>
<LI>
US&#36;973 million of advances on export contracts;<br>
<br>
</LI>
<LI>
US&#36;100 million of BNDES-Finame; and<br>
<br>
</LI>
<LI>
US&#36;74 million of other financings.</LI>
</UL>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The major components of US&#36;3,436 million of our consolidated long-term debt outstanding at December 31, 2008 were (amounts are reflected in long-term debt): </P>
<UL>
<LI>
US&#36;257 million in local debentures;<br>
<br>
</LI>
<LI>
US&#36;883 million of export pre-payments and trade-related transactions;<br>
<br>
</LI>
<LI>
US&#36;950 million of Euronotes;<br>
<br>
</LI>
<LI>
US&#36;365 million of BNDES-Finame;<br>
<br>
</LI>
<LI>
US&#36;100 million of advances on export contracts;<br>
<br>
</LI>
<LI>
US&#36;750 million in perpetual bonds, and<br>
<br>
</LI>
<LI>
US&#36;131 million of other financings.</LI>
</UL>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The debentures are real-denominated debt instruments that were issued in December 2003 and April 2006, being one issuance of US&#36;85.5 million five-year debentures, indexed to the general index of market prices
(<I>&Iacute;ndice Geral de Pre&ccedil;os e Mercado</I>), or IGPM, and bearing interest at a rate of 10% per annum coupon and another issuance of US&#36;281 million six-year debentures bearing interest at a rate of 103.6% of the CDI rate. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Eurodollar and Euronotes issued in accordance with Rule 144A and Regulation S under the Securities Act reflect senior unsecured debt instruments issued by the parent company and its offshore subsidiaries, including the
issuance in 2005 of US&#36;750 million, 9.5% per annum coupon perpetual notes. They also include (i) the US&#36;550 million notes, 9.75% per annum coupon, issued in December 2003 and January 2004 with final maturity in 2013; and (ii) the US&#36;400
million notes, 10% per annum coupon, issued in September 2004 and January 2005 with final maturity in 2015. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pre-export agreements include the four series of the export receivables securitization program launched in June 2003 as well as other trade-related transactions outside the program. The first series, issued in June 2003
in the amount of US&#36;142 million has a seven-year maturity and bears interest at a rate of 7.28% per annum, with a two-year grace period for payment of principal. The second series, issued in August 2003, in the amount of US&#36;125 million has a
three-year maturity and bears interest at Libor plus 1.55% per annum. The third series, issued in June 2004, in the amount of US&#36;162 million has an eight-year maturity and bears interest at a rate of 7.43% per annum with a three-year grace period. In May 2005, a fourth series was issued in the amount of US&#36;250 million having a ten-year
maturity and bearing interest at 6.15% per annum with a three-year grace period. A portion of the proceeds of the fourth series was used to repay the second series.</P>
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<P>
<I>Maturity Profile </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth the maturity profile of our long-term debt at December 31, 2008: </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD width=48%></TD>
	<TD width=2%></TD>
	<TD width=49%></TD></TR>
<TR valign="bottom">
	<TD align=center><B>Maturity in</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>Principal Amount</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><I>(In millions of US&#36;)</I></TD></TR>
<TR valign="bottom">
	<TD align=center>2010&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>329&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=center>2011&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>353&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=center>2012&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>622&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=center>2013&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>812&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=center>2014 and thereafter&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>570&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=center>Perpetual securities&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>750&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD align="center">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=center>Total&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>3,436&nbsp;</TD></TR>
</TABLE><BR>
<P>
<B>5C. Research and Development, Patents and Licenses, etc. </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our research and development center works closely with our customers. One of the features of this unit is the integrated technical assistance services, where CSN customers receive from our engineers guidance and
recommendations to help them make better use of our steel products. This unit works closely with the sales sector, focusing on product improvement and development that will meet our customers&#146; needs. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Another feature are the work shops focusing on product development, applications, simultaneous engineering for cost reduction and parameters adjustment on CSN steel products and customers&#146; final products on white
goods, packaging, automotive and civil construction segments. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our investment for research and development projects and activities in 2006, 2007 and 2008 totaled US&#36;20.9 million, US&#36;19.7 million and US&#36;16.1 million, respectively. New products recently developed under
our research and development program include: (i) special steel grades for thickness reduction on tin plate products for two-piece cans, (ii) innovation in new shapes for special tin plate for three-piece shaped expanded cans, (iii) pre-painted
steel for automotive fuel thanks, steel color for civil construction and many applications on white goods segments, (iv) electrical steel as cold-rolled used for energy saving in refrigerator compressors and electric motors, (v) high-strength
low-alloy hot-rolled steels used for pipes, structures, agricultural appliances, gas containers and automobile wheels, (vi) high-strength especial and bake hardened galvanized steels used for automobiles, and (vii) galvalume used for construction,
home appliances and other industries. </P>
<P>
<B>5D. Trend Information </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i>Overview</i> </P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The year 2008 marked the end of the long cycle of growing demand and high mineral and metal prices that had begun in 2002.  The acceleration of the global financial crisis as of September 2008 led to a substantial change in the pace of economic activity worldwide.</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With prospects of a global economic slowdown and despite the better outlook for the Brazilian economy, Brazilian demand for flat and long steel, iron ore and cement should decline in 2009.</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cost reductions, alongside operational and financial flexibility, have become key factors in the current scenario.  On the other hand, we also believe in the importance of continuing investments that begun in recent years, such as the expansion of Casa da Pedra, Namisa and Itagua&#237; port and the conclusion of the first stage of our cement plant.  We believe these investments should lead to higher revenue and cash flow and partially offset the negative impact of the global financial crisis.  Our mining and cement projects will be carried on as previously planned, since their rates of return are higher than our cost of capital, despite the crisis-driven challenges, and we expect these returns to be generated within the next five years.</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A significant demand from China, the beginning of an increase in demand in other markets with the end of the destocking process, the decline in interest rates and the gradual recovery of the world economy should result in an increase in production by the end of 2009.  International expectations for 2010 are positive, given the likelihood of increased activity.</P>
<P><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Steel</i></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Considering the challenges posed by the global financial crisis and its impact on steel products' demand and prices, we decided to review our previous investments plans of increasing flat steel production capacity, including our Greenfield projects in the cities of Itagua&#237; and Congonhas. The projects under review have the potential to significantly increase our current crude steel output and if implemented would enhance our global operations expansion plans.</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investments required for production of nearly 600 thousand tons of long steel continue to be carried out as previously planned and informed.</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Brazilian Government measures, such as a reduction in IPI (federal VAT) and certain credit incentives, are increasing demand for steel products, which could have a positive effect on our operating results and financial position.  </P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our plan for the upcoming years is to: (i) meet steel product demand on the domestic market, which could be less affected by the global financial crisis than international markets; and (ii) supplement our product portfolio directed to the domestic market, especially in the long-steel segment, strategically positioning for the expected expansion in Brazilian economy.</P>
<P><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Iron ore</i></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Demand for iron ore is linked to global demand for carbon steel which is in turn heavily influenced by global industrial output.  Iron ore sales are performed through long-term supply agreements envisaging annual price adjustments.</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Iron ore is a commodity and several factors influence price variations for the different types of iron ore, including percentage of ore in specific deposits, various processing and purification procedures needed to produce the final desired product, size of the particles, humidity ratio and type and concentration of impurities (such as phosphorus, alumina and manganese ore).  In general, fines, lump and pellet feed are the main price variation determinants.</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The global financial crisis had a strong negative impact on our domestic iron ore markets.  Nevertheless, despite the severity of the crisis, we believe the global downturn will not affect the long-term economic development of emerging countries or the structural changes in recent years that led to accelerating demand for minerals and metals, especially iron ore.  In addition, China, the world's largest steel producer, has become extremely dependent on iron ore imports and we expect this trend to continue in the future.  We have planned investments to significantly increase CSN's and Namisa's total production capacity and to further expand the Itagua&#237; seaport terminal.</P>
<P><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cement</i></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are implementing investments to produce a total of 2.3 million tons of cement from blast furnace slag in the Presidente Vargas Steelworks and limestone from our exclusive mine located in the city of Arcos, in the state of Minas Gerais.  We expect to finish the first phase of investment in 2009, which will allow us to produce 1.0 million ton.  The cement industry has been recording an average annual growth of 8% for the past five years, and in 2008 preliminary data shows a 13% increase as compared to 2007, according to data from the National Union of the Cement Industry (Sindicato Nacional da Ind&#250;stria do Cimento), or SNIC.  We expect that in 2009 growth in cement demand will be stable.</P>
<P>
<B>5E. Off-Balance Sheet Arrangements</B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to the debt that is reflected on our balance sheet, we are contingently liable for the off-balance concession payments related to the activities of Tecon. The following table summarizes all of the
off-balance sheet obligations for which we are contingently liable and which are not reflected under liabilities in our consolidated financial statements: </P>
<P>
<B>Contingent Liability with Respect to Consolidated and Non-Consolidated Entities as of December 31, 2008</B></P>
<BR>
<P align="center">
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<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD width=70%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD></TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=center><B>Aggregate</B></TD>
  <TD align="center">&nbsp;</TD>
  <TD align=center>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=center><B>Amount</B></TD>
  <TD align="center">&nbsp;</TD>
  <TD align=center><B>Maturity</B>&nbsp;</TD>
</TR>


  <TR valign="bottom" style="font-size: 1px">
  <TD align=left>&nbsp;</TD>
  <TD>&nbsp;</TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="center"></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>


<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD colspan="3" align=center><I>(In millions of US&#36;)</I></TD>
  </TR>
<TR valign="bottom">
	<TD align=left> &nbsp;<B>Guarantees of Debt:</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp; &nbsp;Transnordestina&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>104&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2009-2020&nbsp;</TD></TR>
<TR>
	<TD colspan=5>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp;<B>Contingent Liability for Concession Payments</B><B><SUP>(1) </SUP></B><B>:</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp; &nbsp;Tecon&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>139&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2025&nbsp;</TD></TR>
<TR>
	<TD colspan=5>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp;<B>&#147;Take-or-Pay&#148; Contractual Obligations</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp; &nbsp;MRS Log&iacute;stica S.A.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>749&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2016&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp; &nbsp;White Martins Gases Industriais Ltda.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>327&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2027&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp; &nbsp;Companhia Estadual de G&aacute;s do Rio de Janeiro &#150; CEG Rio&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>396&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2012&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp; &nbsp;Am&eacute;rica Latina Log&iacute;stica &#150; ALL&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>3&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2009&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp; &nbsp;Ferrovia Centro Atl&acirc;ntica &#150; FCA&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>140&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2013&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B>Total</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>1,615</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR>
	<TD colspan=5>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp;<B>Total Contingent Liability with Respect to Consolidated and Non-consolidated Entities:</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right><B>1,861</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR>
	<TD colspan=5>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>(1) Other consortia members are also jointly and severally liable for these payments.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
</TABLE>
<BR>
<P>
<B>Guarantees </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We guarantee, together with Taquari Participa&ccedil;&otilde;es S.A., the loans BNDES has granted to Transnordestina in May and December 2005, and in January 2006, all of which mature by November 2020, adjusted based on
the TJLP plus 1.5% per annum. The total outstanding amount of the debt as of December 31, 2008 was US&#36;103.7 million. </P>
<P>
<B>Concessions </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We own 100% of Sepetiba Tecon S.A., or Tecon, which holds a concession to operate, for a 25-year term (renewable for additional 25 years), the container terminal at the Itagua&iacute; Port. As of December 31, 2008,
US&#36;139.0 million (R&#36;325 million) of the cost of the concession was outstanding and payable over the next 18 years of the lease. For more information see &#147;Item 4A. History and Development of the Company&#151;Planned
Investments&#151;Itagua&iacute; CSN Logistics Platform Project.&#148; </P>
<P>
<B>Contractual Obligations </B></P>
<P>
<B><I>Namisa </I></B><B> </B></P>
<P>
<I>Port Services </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December 30, 2008, we received approximately US&#36;2.2 billion as pre-payment for an agreement with Namisa with a term of 35 years. Under this agreement, we are required to render port services to Namisa, which
consists of services related to the transportation of annual quantities of iron ore ranging from 17.1 million tons to 39.0 million. The pre-payment amount is only a partial payment for the services to be performed and, therefore, Namisa may be
required to pay us additional amounts as to the actual services rendered in each relevant month. </P>
<P>
<I>High Silica ROM </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December 30, 2008, we received approximately US&#36;665.6 million as pre-payment for an agreement with Namisa with a term of 30 years. Under this agreement, we are required to provide high silica iron ore ROM to
Namisa in a volume that ranges from 42.0 million tons to 54.0 million tons per year. The pre-payment amount is only a partial payment for the high silica iron ore ROM to be purchased and, therefore, Namisa may be required to pay us additional
amounts as to the actual amounts of high silica iron ore ROM purchased in each relevant month. </P>
<P>
<I>Low Silica ROM </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December 30, 2008, we received approximately US&#36;177.2 million as pre-payment for an agreement with Namisa with a term of 35 years. Under this agreement, we are required to provide low silica iron ore ROM to
Namisa in a volume that ranges from 5.0 million tons to 2.8 million tons per year. The pre-payment amount is only a partial payment for the low silica iron ore ROM to be purchased and, therefore, Namisa may be required to pay us additional amounts
as to the actual amounts of low silica iron ore ROM purchased in each relevant month. </P>
<P align="center">
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<P>
<B>&#147;Take-or-Pay&#148; Contractual Obligations</B> </P>
<P>
<B><I>MRS Log&iacute;stica S.A. </I></B></P>
<P>
<I>Transportation of Iron Ore, Coal and Coke to Volta Redonda </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The volume set for iron ore and pellets is 8,280,000 tons per year and for coal, coke and other reduction products is 3,600,000 tons per year. It is accepted variation up to 10%, with a guarantee of payment of at least
90%, but the compromise is for each item individually. MRS, on the other hand, is required to transport at least 80% of the volume established by the agreement. The agreement expires on September 12, 2012. </P>
<P>
<I>Transportation of Iron Ore for Export from Itagua&iacute; </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The volume set is 8,000,000 tons per year. It is accepted variation of up to approximately 5% of the volume set, with a guarantee of payment of at least 80%. We may increase or decrease the volume set in the agreement
every year up to 10%, taking into consideration the volume actually transported in the previous year. The agreement expires on May 31, 2016. </P>
<P>
<I>Transportation of Steel Product </I></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It accepts a reduction of up to 20% of volume for the quarter forecast, with a guarantee of payment of at least 80% of the volume agreed with &#147;the accounts meeting.&#148; We have established quarterly flexibility
to renegotiate the Take or Pay if the volume is not reached. Our supplier is required to commit at least 90% of the monthly volume agreed in the agreement. The agreement expires on December 27, 2009. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For all the three contracts we have flexibility to renegotiate the Take or Pay if the volume is not reached. As we are a shareholder of MRS, the minimum amounts to be paid under the contract terms are calculated by a
tariff model that assure competitive prices. </P>
<P>
<B><I>White Martins Gases Industriais Ltda.</I></B><B><I>&nbsp;</I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To secure gas supply (oxygen, nitrogen and argon), in 2005 we signed a 22-year &#147;take-or-pay&#148; agreement with White Martins Gases Industriais, by which we are committed to acquire at least 90% of the gas volume
produced at White Martins&#146; plant. Under the terms of the agreement, we are not required to advance funds raised against future processing charges if White Martins is unable to meet its financial obligations.</P>
<P>
<B><I>Companhia Estadual de G&aacute;s do Rio de Janeiro </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To secure natural gas supply, in 2007 the Company has signed a five-year &#147;take-or-pay&#148; agreement with CEG Rio, by which CSN is committed to acquire at least 70% of the gas volume produced at CEG Rio&#146;s
plant. Under the terms of the agreement, we are not required to advance funds raised against future processing charges if CEG Rio is unable to meet its financial obligations. In addition, if the we do not acquire the minimum volume agreed, the
amount paid which relates to that difference may be compensated in future years, including one year after the contract expiration. </P>
<P>
<B><I>Am&eacute;rica Latina Log&iacute;stica &#150; ALL</I></B><B><I>&nbsp;</I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This agreement covers transportation of steel products from Volta Redonda to CSN Paran&aacute;. Volume set for steel products is 15,000 tons per month, which may vary up or down by 5%. We are currently negotiating new
terms for the volume and take or pay conditions. The agreement will expire on December 31, 2009. </P>
<P>
<B><I>Ferrovia Centro Atl&acirc;ntica - FCA</I></B><B><I>&nbsp;</I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This agreement covers transportation of reduction products from Arcos to Volta Redonda. Volume set for reduction products is 1,900,000 tons per year, which may vary up or down by 5%. The agreement will expire on August
31, 2013. </P>
<P align="center">
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<P>
<B>5F. Tabular Disclosure of Contractual Obligations </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table represents our long-term contractual obligations as of December 31, 2008:</P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD width=40%></TD>
	<TD width=2%></TD>
	<TD width=10%></TD>
	<TD width=2%></TD>
	<TD width=10%></TD>
	<TD width=2%></TD>
	<TD width=10%></TD>
	<TD width=2%></TD>
	<TD width=10%></TD>
	<TD width=2%></TD>
	<TD width=10%></TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD colspan="9" align=center><B>Payment due by period</B>&nbsp;</TD>
  </TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD colspan="9" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD colspan="9" align=center><I>(In millions of US&#36;)</I></TD>
  </TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>More</B>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>Contractual obligations</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>Less than</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>than 5</B>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>Total</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>1 year</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>1-3 years</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>3-5 years</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>years</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>Long-term accrued finance</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>charges</B><B><SUP>(1)</SUP></B></TD>
	<TD>&nbsp;</TD>
	<TD align=center>1,161&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>342&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>450&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>278&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>91&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>Taxes payable in installments</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>371&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>101<SUP>(6)</SUP></TD>
	<TD>&nbsp;</TD>
	<TD align=center>270&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>-&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>-&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>Long-term debt</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>4,732&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>1,296&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>1,304&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>913&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>1,219&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>&#147;Take-or-Pay&#148; contracts</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>1,615&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>278&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>825&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>324&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>188&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>Concession agreements</B><B><SUP>(5)</SUP></B></TD>
	<TD>&nbsp;</TD>
	<TD align=center>139&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>8&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>24&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>16&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>91&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>Unrecognized tax benefits</B><B><SUP>(7)</SUP></B></TD>
	<TD>&nbsp;</TD>
	<TD align=center>504&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>-&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>-&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>-&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>-&nbsp;</TD></TR>
<TR>
	<TD colspan=11>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>Purchase obligations:</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Raw materials<SUP>(2)</SUP></TD>
	<TD>&nbsp;</TD>
	<TD align=center>869&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>737&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>132&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>0&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Maintenance<SUP>(3)</SUP></TD>
	<TD>&nbsp;</TD>

	<TD align=center>191&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>77&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>87&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>27&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>0&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Utilities/Fuel<SUP>(4)</SUP></TD>
	<TD>&nbsp;</TD>
	<TD align=center>1,593&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>302&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>605&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>379&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>307&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B>Total</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>2,653</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>1,116</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>824</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>406</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>307</B>&nbsp;</TD></TR>
</TABLE>
<BR>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD width="3%" align="left" valign=top nowrap>
(1) 	</TD>
	<TD>
These accrued finance charges refer to the cash outflow related to the contractual interest expense of our long-term	debt and were calculated using the contractual interest rates taken forward to the maturity dates of each contract.	</TD>
</TR><TR>
	<TD align="left" valign=top nowrap>
(2) 	</TD>
	<TD>
Refer mainly to purchases of coal, tin, aluminum and zinc, which comprise part of the raw materials for steel	manufacturing and take-or-pay contracts.	</TD>
</TR><TR>
	<TD align="left" valign=top nowrap>
(3) 	</TD>
	<TD>
We have outstanding contracts with several contractors in order to maintain our plants in good operation conditions;	due to the strong demand for specialized maintenance service, the term of some contracts is for more than one year.	</TD>
</TR><TR>
	<TD align="left" valign=top nowrap>
(4) 	</TD>
	<TD>
Refer mainly to natural gas, power supply and cryogenics, which are provided by limited suppliers; and with some	of which we maintain long-term contracts.	</TD>
</TR><TR>
	<TD align="left" valign=top nowrap>
(5)	</TD>
	<TD>
Refers only to Tecon&#146;s concession agreement since MRS and Transnordestina are not consolidated for U.S. GAAP purposes.	</TD>
</TR><TR>
	<TD align="left" valign=top nowrap>
(6)	</TD>
	<TD>
Included as taxes payable in current liabilities.	</TD>
</TR><TR>
	<TD align="left" valign=top nowrap>
(7)	</TD>
	<TD>
Due to the uncertainties of the expected timing of cash payments, if any, associated with the unrecognized tax	benefits, its total amount of US&#36;504 million has been excluded from the tabular disclosure table above.	</TD>
</TR></TABLE>
<P>
<B>5G. Safe Harbor </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See &#147;Forward-Looking Statements.&#148; </P>
<P>
<B>Item 6. Directors, Senior Management and Employees </B></P>
<P><B>6A. Directors and Senior Management </B></P>
<P><B>General </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are managed by our Board of Directors (<I>Conselho de Administra&ccedil;&atilde;o</I>), which consists of seven to eleven members, and our Board of Executive Officers (<I>Diretoria Executiva</I>), which consists of
two to nine Executive Officers with no specific designation (one of which is the Chief Executive Officer). In accordance with our bylaws (<I>Estatuto Social</I>), each Director is elected for a term of one year by our shareholders at an annual
shareholders&#146; meeting. Our bylaws require our employees to be represented by one Director on the Board of Directors. The members of the Board of Executive Officers are appointed by the Board of Directors for a two-year term. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Board of Directors is responsible for the formulation of business plans and policies and our Board of Executive Officers is responsible for the implementation of specific operating decisions. As of December 31,
2008, our Board of Directors was comprised of one Chairman, one Vice Chairman and six members, and our Board of Executive Officers was comprised of our Chief Executive Officer, our Chief Financial Officer and four Executive Officers. </P>
<P align="center">
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<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Directors and Executive Officers as of the date of this annual report are:</P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD></TD>
	<TD width=2%></TD>
	<TD></TD>
	<TD width=2%></TD>
	<TD></TD>
	<TD width=2%></TD>
	<TD></TD></TR>
<TR valign="bottom">
	<TD width="23%" align=left><B>Name</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD width="23%" align=left><B>Position</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD width="23%" align=left><B>First Elected to our Board in</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD width="23%" align=left><B>Last Elected to our Board in</B>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B><I>Board of Directors</I></B><B><SUP>(1)</SUP></B></TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Benjamin Steinbruch&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Chairman&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>April 23, 1993&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>April 30, 2009&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Jacks Rabinovich&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Vice Chairman&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>April 23, 1993&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>April 30, 2009&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Mauro Molchansky&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Member&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>April 24, 2001&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>April 30, 2009&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Fernando Perrone&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Member&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>September 26, 2002&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>April 30, 2009&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Dion&iacute;sio Dias Carneiro Netto&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Member&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>April 30, 2002&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>April 30, 2009&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Antonio Francisco dos Santos&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Member&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>December 23, 1997&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>April 30, 2009&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Yoshiaki Nakano&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Member&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>April 29, 2004&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>April 30, 2009&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Gilberto Say&atilde;o da Silva&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Member&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>April 30, 2009&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>April 30, 2009&nbsp;</TD></TR>
<TR>
	<TD colspan=7>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B><I>Board of Executive Officers</I></B><B><SUP>(2)</SUP></B></TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Benjamin Steinbruch&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Chief Executive Officer&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>April 30, 2002&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>August 12, 2008&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Paulo Penido Pinto Marques<B><SUP>(3)</SUP></B></TD>
	<TD>&nbsp;</TD>
	<TD align=left>Chief Financial Officer&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>May 7, 2009&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>May 7, 2009&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>En&eacute;as Garcia Diniz&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Executive Officer&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>June 21, 2005&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>August 12, 2008&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Juarez Saliba de Avelar&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Executive Officer&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>September 26, 2006&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>August 12, 2008&nbsp;</TD></TR>
</TABLE><BR>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD width="3%" valign=top nowrap>
(1)&nbsp; &nbsp; &nbsp; 	</TD>
	<TD>
Mr. Darc Antonio da Luz Costa resigned from his position of director on May 12, 2009.	</TD>
</TR><TR>
	<TD nowrap valign=top>
(2)&nbsp; &nbsp; &nbsp; 	</TD>
	<TD>
Mr. Isaac Popoutchi and Mr. Pedro Felipe Borges Neto resigned from their positions of Executive Officers on May 29, 2009 and until the date of this annual report, these positions remain vacant.	</TD>
</TR><TR>
	<TD nowrap valign=top>
(3)&nbsp; &nbsp; &nbsp; 	</TD>
	<TD>
Mr. Paulo Penido Pinto Marques replaced Ot&aacute;vio de Garcia Lazcano on May 7, 2009.	</TD>
</TR></TABLE>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The next election for our Board of Directors is expected to take place on April 30, 2010, and we are unable to anticipate when the next election for our Board of Executive Officers is expected to take place. </P>
<P>
<B>Board of Directors </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Benjamin Steinbruch</I>. Mr. Steinbruch was born on June 28, 1953 and has been Chairman of our Board of Directors since April 28, 1995 and Chief Executive Officer since April 30, 2002. Mr. Steinbruch is also Chief
Executive Officer of Vicunha Siderurgia, our controlling shareholder.</P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Jacks Rabinovich</I>. Mr. Rabinovich was born on September 20, 1929 and has been a member of our Board of Directors since April 23, 1993 and Vice Chairman since April 24, 2001. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Mauro Molchansky</I>.  Mr. Molchansky was born on September 11, 1950 and has been a member of our Board of Directors since April 24, 2001. He was Executive Officer of Globo Comunica&ccedil;&otilde;es e
Participa&ccedil;&otilde;es S.A. &#150; Globopar from August 1994 to March 2002. Before joining Globo Comunica&ccedil;&otilde;es e Participa&ccedil;&otilde;es S.A.- Globopar in 1994, he was Financial Officer and Investor Relations Officer of Aracruz
Celulose S.A. Under Mr. Molchansky&#146;s leadership, Aracruz Celulose S.A. was the first Brazilian company to issue American Depositary Shares (level 3) listed and traded on the NYSE, in 1992. Currently, Mr. Molchansky is a partner at RealAssets,
an asset managing firm. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Fernando Perrone</I>.  Mr. Perrone was born on May 6, 1947 and has been a member of our Board of Directors since September 26, 2002 and a member of our Audit Committee since June 24, 2005. He was our Infrastructure
and Energy Executive Officer from July 10, 2002 to October 2, 2002. Previously, Mr. Perrone occupied the position of Chief Executive Officer of Empresa Brasileira de Infra-Estrutura Aeroportu&aacute;ria &#150; INFRAERO and was an officer of BNDES.
</P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Dion&iacute;sio Dias Carneiro Netto</I>.  Mr. Carneiro Netto was born on September 23, 1945 and has been a member of our Board of Directors since April 30, 2002 and a member of our Audit Committee since June 24,
2005. Mr. Carneiro Netto has been a professor at <I>Pontif&iacute;cia Universidade Cat&oacute;lica do Rio de Janeiro</I>, at <I>UnB</I> and at <I>EPGE/FGV</I> and currently teaches at <I>Instituto de Gest&atilde;o de Riscos Financeiros e Atuariais da Pontif&iacute;cia Universidade Cat&oacute;lica do Rio de Janeiro. </I>He was also a Vice-President of FINEP from 1979 to 1980 and has been a
member of Boards of Directors in several companies. Mr. Carneiro Netto was a member of the Advisory Board of the African Economic Research Council and of the Committee for Development Planning at United Nations. He is an officer-parter of Galanto
Consultoria, officer of the Instituto de Estudos de Pol&iacute;tica Econ&ocirc;mica da Casa das Gar&ccedil;as and member of the Executive Committee of Instituto de Gest&atilde;o de Riscos Financeiros e Atuariais at <I>Pontif&iacute;cia Universidade Cat&oacute;lica do Rio de Janeiro</I>. He writes a fortnightly column in the newspaper <I>O Estado de Sao Paulo</I>. </P>
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<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Antonio Francisco dos Santos</I>. Mr. Santos was born on December 6, 1950 and has been a member of our Board of Directors since November 25, 1997. Mr. Santos was Coordinator of Industrial Engineering, Chief of
Industrial Engineering and Chief of Production Planning and a member of the Board of Directors of <I>Caixa Beneficente dos Empregados </I>of CSN, or CBS, our pension plan until 2008. He is currently Chairman and Chief Executive Officer of the Board
of the CSN Employee Investment Club (<I>Clube de Investimento CSN</I>).</P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Yoshiaki Nakano</I>. Mr. Nakano was born on August 30, 1944 and has been a member of our Board of Directors since April 29, 2004 and a member of our Audit Committee since June 24, 2005. From 1995 to 2001, Mr. Nakano
was Treasury Secretary of the State of S&atilde;o Paulo. Since 2001, he has been Chief of the Economics Department at FGV in S&atilde;o Paulo.  Mr. Nakano is also a member of the Board of Directors of the Funda&ccedil;&atilde;o de Amparo &agrave;
Pesquisa do Estado de S&atilde;o Paulo - FAPESP, of the Conselho Superior de Economia, of the FIESP/IRS, and a member of the Consulting Board of the Grupo P&atilde;o de A&ccedil;&uacute;car. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Gilberto Say&atilde;o da Silva</I>. Mr. Say&atilde;o has been a member of our Board of Directors since April 30, 2009. Mr. Say&atilde;o also currently acts as the Chief Executive Officer of UBS Pactual Alternative
Investments, a subsidiary of UBS Pactual Asset Management.</P>
<P>
<B>Board of Executive Officers </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to Mr. Steinbruch, the following persons were members of our Board of Executive Officers as of December 31, 2008: </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Paulo Penido Pinto Marques</I>. Mr. Marques was elected our Chief Financial Officer on May 12, 2009. Prior to joining CSN, Mr. Marques was Finance, Investor Relations and Information Technology Vice-President of
Usinas Sider&uacute;rgicas de Minas Gerais S.A. - USIMINAS, Financial Officer of Usiminas Mec&acirc;nicas S.A., member of the State Board of <I>Associa&ccedil;&atilde;o Brasileira das Companhias Abertas</I>, Financial Officer of the Companhia
Sider&uacute;rgica Paulista - COSIPA, Officer of Minera&ccedil;&atilde;o J. Mendes, Officer of Controle da Fasal S.A. and Officer of Cons&oacute;rcio Siderurgia Amazonia Ltd. (controller of Sidor - Venezuela).  Mr. Marques has also participated in
the Board of Executive Officers or the Board of Directors of Usiparts - automotive systems, Unigal, Rio Negro - steel trade and industrialization. He was also Vice-President at Financing Area, Credit and Risk of Morgan Guaranty Trust Co. of New
York, Officer of Relationship with companies and Financial Institutions Area of BankBoston, Officer of Investments of Corporate Banking of Citibank. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>En&eacute;as Garcia Diniz</I>. Mr. Diniz was born on January 1, 1960 and was originally elected Executive Officer in charge of Production on June 21, 2005. He has been serving CSN since 1985, acting as General
Manager of Hot Rolling, General Manager of Maintenance, Metallurgy Director and General Director of the Presidente Vargas steelworks.</P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Juarez Saliba de Avelar</I>. Mr. Avelar was born on February 13, 1961 and was elected Executive Officer in charge of mineral resources on September 26, 2006. He has been working with us since 2003, acting as Port and
Railroads Officer and Mineral Resources Officer. Mr. Avelar served as President of Ferteco Minera&ccedil;&atilde;o and as Officer of South and North unit of Companhia Vale do Rio Doce. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There are no family relationships between any of the persons named above. The address for all of our directors and executive officers is Av. Brigadeiro Faria Lima, 3400, 20th floor, Itaim Bibi, city of S&atilde;o Paulo,
State of S&atilde;o Paulo, Brazil (telephone number 55-11-3049-7100). </P>
<P>
<B>Indemnification of Officers and Directors </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There is no provision for or prohibition against the indemnification of officers and directors in Brazilian law or in our bylaws. Officers are generally not individually liable for acts within the course of their
duties. We either indemnify, or maintain directors and officers liability insurance insuring our Directors, our Chief Executive Officer, our Chief Financial Officer and our other Executive Officers and certain key employees against liabilities
incurred in connection with their respective positions with us. </P>
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<P>
<B>6B. Compensation </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the year ended December 31, 2008, the aggregate compensation paid by us to all members of our Board of Directors and the members of our Board of Executive Officers for services in all capacities was approximately
US&#36;19.4 million (R&#36;35.7 million), which includes salaries, bonuses and profit sharing arrangements. In addition, the members of the Board of Directors and of the Board of Executive Officers may receive certain additional company benefits
generally provided to company employees and their families, such as medical assistance and life insurance among others. See &#147;&#151;Item 6D. Employees&#148; for a brief description of our profit sharing arrangements. <B> </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are the principal sponsor of CBS, our employee pension plan. CBS had a deficit of plan assets over pension benefit obligations of US&#36;83.8 million in 2008. The unfunded status of CBS is affected by, among other
things, fluctuations in the fair value of CBS&#146;s assets, which totaled US&#36;524.7 million as of December 31, 2008 and is substantially comprised of CSN&#146;s shares, while CBS&#146; accumulated obligations and projected benefit obligations as
of December 31, 2008 were US&#36;608.5 million. See &#147;Item 3D&#151;Risk Factors&#151;We are exposed to devaluation of our shares as result of certain equity swap agreements and our pension plan assets&#148; and Note 15 to our consolidated
financial statements contained in &#147;Item 18. Financial Statements.&#148; </P>
<P>
<B>6C. Board Practices </B></P>
<P>
<B>Fiscal Committee and Audit Committee </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under Brazilian Corporate Law, shareholders may request the appointment of a Fiscal Committee (<I>Conselho Fiscal</I>), which is a corporate body independent of management and our external auditors. The primary
responsibility of the Fiscal Committee is to review management&#146;s activities and the financial statements, and report its findings to the shareholders. Our shareholders did not request the installation of a Fiscal Committee at the Annual
Shareholders&#146; Meeting held on April 30, 2009. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In June 2005 an Audit Committee (<I>Comit&ecirc; de Auditoria</I>) was appointed in compliance with SEC&#146;s rules, which is composed of three independent members of our Board of Directors. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee is responsible for recommending to the Board of Directors the appointment of the independent auditors, reporting on our auditing policies and our annual auditing plan prepared by our internal
auditing team, as well as monitoring and evaluating the activities of the external auditors. Our Audit Committee has also been tasked with identifying, prioritizing and submitting actions to be implemented by our Executive Officers, and analyzing
the annual report, and our financial statements and making recommendations to our Board of Directors. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee is currently composed of Mr. Carneiro Netto, Mr. Nakano and Mr. Perrone and is constantly assisted by an outside consultant.<B> </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For information on the date of election and term of office of the members of our Board of Directors and Board of Executive Officers, see &#147;Item 6A. Directors and Senior Management.&#148; </P>
<P>
<B>Service Contracts </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We permit our directors to continue to participate in our employee pension plan after ceasing to be a director of our Company. </P>
<P>
<B>6D. Employees </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of December 31, 2006, 2007 and 2008, we had 13,659, 14,274 and 15,104 employees, respectively. As of December 31, 2008, approximately 2,502 of our employees were members of the steelworkers&#146; union of Volta
Redonda and region, which is affiliated with the Central &Uacute;nica dos Trabalhadores, or CUT, a national union. We believe we have a good relationship with CUT. We have collective bargaining agreements, renewable annually every May 1. Moreover,
we have members afilliated to other unions, such as the Engineer Union with 53 members, the Accountant Union with 9 members and the Workers Unions from Arcos, Casa de Pedra and Arauc&aacute;ria, with a total of 414 members.</P>
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<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In March 1997, we established an employee profit sharing plan. All employees participate in the plan, and earn bonuses based on our reaching certain goals for each year, including a minimum EBITDA margin, as well as
other measures such as sales, cost control, productivity and inventory levels, as appropriate for each sector based on its nature. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In June 2000, we increased the average workshift at our Volta Redonda steel works from six to eight hours. This increase was implemented in our iron ore, limestone and dolomite mines during 1999. We have signed a
collective bargaining agreement with our employees&#146; unions pursuant to which we have agreed not to dismiss employees in connection with this workshift increase. This eight-hour workshift improved productivity, quality and job safety as a result
of fewer interruptions in the production process, which is continuous. </P>
<P>
<B>6E. Share Ownership </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mr. Benjamin Steinbruch our Chairman and Chief Executive Officer holds ownership interest in Vicunha Siderurgia, our controlling shareholder. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All our Executive Officers and members of our Board of Directors held an aggregate of 0.0001% of our outstanding common shares as of April 30, 2009. </P>
<P>
<B>Item 7. Major Shareholders and Related Party Transactions </B></P>
<P>
<B>7A. Major Shareholders</B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December 31, 2008 our capital stock was composed of 793,403,838 common shares, including 34,734,384 common shares held in treasury.</P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth, as of May 29, 2008, the number of our common shares owned by all persons known to us that own more than 5% of our outstanding common shares as of such date: </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD></TD>
	<TD width=2%></TD>
	<TD></TD>
	<TD width=2%></TD>
	<TD></TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD colspan=3 align=center><B>Common Shares</B>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD colspan=3 align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD width="15%" align=center>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD width="15%" align=center><B>Percent of</B>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>Shares Owned</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>Outstanding</B>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>Name of Person or Group</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>Shares</B><B><SUP>(2)</SUP></B></TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
	<TD colspan=5>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Vicunha Siderurgia S.A.<SUP>(1)</SUP></TD>
	<TD>&nbsp;</TD>
	<TD align=center>348,859,995&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>45.98%&nbsp;</TD></TR>
</table>


<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">

<TR>
	<TD colspan=5>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD width="3%" align=left>(1)</TD>
	<TD colspan=4 align=left>Owned indirectly by Benjamin Steinbruch, Chairman of our Board of Directors, and other members of his family.&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>(2)</TD>
	<TD colspan="4" align=left>It does not include common shares held in treasury.&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<P>
<B>7B. Related Party Transactions </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;From time to time we conduct transactions with companies directly or indirectly owned by our principal shareholders or members of our Board of Directors. See &#147;Item 4A. History and Development of the
Company&#151;Acquisitions and Dispositions,&#148; &#147;Item 4B. Business Overview,&#148; &#147;Item 4A. History and Development of the Company &#151;Planned Investments,&#148; &#147;Item 6A. Directors and Senior Management&#148; and &#147;Item 7A.
Major Shareholders&#148; and Note 20 to the consolidated financial statements included in &#147;Item 18. Financial Statements.&#148; </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2005, we used Banco Fibra, or Fibra, a bank controlled by the Steinbruch family, in connection with the management of our exclusive investment funds, under circumstances where we were not exposed to Fibra&#146;s
credit risk and where we paid investment fees not in excess of such fees we would expect to pay to a non-affiliated bank for such services. However, as of August 22, 2006, the management of our exclusive investment funds was transferred to Bank UBS
Pactual, under the same circumstances where we are not exposed to the bank&#146;s credit risk. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During 2008, we, through one of our subsidiaries, exported US&#36;36 million of steel products to our subsidiary Lusosider, in Portugal. These export transaction were made using a third party,  and have been eliminated in our
consolidated financial statements. </P>
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<P>
<B>Item 8. Financial Information </B></P>
<P>
<B>8A. Consolidated Statements and Other Financial Information </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See  &#147;Item 3. Key Information&#151;Selected Financial Data&#148; and &#147;Item 18. Financial Statements&#148; for our consolidated financial statements. </P>
<P>
<B>Legal Proceedings </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We record provisions for contingencies relating to legal proceedings with respect to which we deem the likelihood of an unfavorable outcome to be probable and the loss can be reasonably estimated. This determination is
made based on the legal opinion of our internal and external legal counsel. We believe these contingencies are properly recognized in our financial statements in accordance with SFAS No. 5. Those contingencies related to income taxes and social
contribution are accounted for based on the &#147;more-likely-than-not&#148; concept in accordance with FIN 48. We are also involved in judicial and administrative proceedings that are aimed at obtaining or defending our legal rights with respect to
taxes that we believe to be unconstitutional or otherwise not required to be paid by us. We believe that these proceedings will ultimately result in the realization of contingent tax credits or benefits that can be used to settle direct and indirect
tax obligations owed to the Brazilian federal or state governments. We do not recognize these contingent tax credits or benefits in our financial statements until realization of such gain contingencies has been resolved. This occurs when a final
irrevocable judgement is rendered by the courts in Brazil. When we use contingent tax credits or benefits based on favorable temporary court orders that are still subject to appeal to offset current direct or indirect tax obligations, we maintain
the legal obligation accrued in our financial statements until a final irrevocable judicial judgement on those contingent tax credits or benefits is rendered. The accrual for the legal obligation related to the current direct or indirect tax
obligations offset is not reversed until such time as the utilization of the contingent tax credits or benefits is ultimately realized. This accounting is consistent with our analysis of a liability under FASB Concepts Statement No. 6. The
accounting for the contingent tax credits is in accordance with accounting for contingent assets under SFAS No. 5. Our accruals include interest on the tax obligations that we may offset with contingent tax credits or benefits at the interest rate
defined in the relevant tax law. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We classify an accrual as short-term when it expects the liability to be settled in 360 days or less. As of December 31, 2008, US&#36;69 million had been classified as short-term accrual for contingencies (US&#36;77
million as of December 31, 2007). This usually occurs when a final, unappealable and irrevocable judgment has been rendered and is being enforced. However, given the complexity of the Brazilian legal system, we are unable to anticipate when final
judgements will be rendered on most of the claims. Consequently, these claims are classified as long-term liabilities. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The deposits for contingencies and disputed taxes payable are generally based on (i) accruals recorded in connection with lawsuits, (ii) court orders issued in connection with lawsuits and (iii) guarantees in connection
with judicial foreclosure proceedings. Such deposits are classified as long-term assets, and the release of such deposits is conditioned upon court order. When such a court order is granted in our favor, the deposit is forfeited and returned to us
in cash and the deposit account is appropriately offset. When such a court order is granted in a manner unfavorable to us, the deposit is used to offset the related liability and the deposit account is appropriately offset. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are party to a number of legal proceedings arising from our ordinary course of business, including tax, civil and labor claims. As of December 31, 2008, we recorded aggregate long-term provisions of US&#36;1,618
million relating to these claims, for which we had deposited US&#36;893 million in court escrow accounts. See Note 18 to our consolidated financial statements contained in &#147;Item 18. Financial Statements&#148; in this annual report. </P>
<P>
<B><I>Labor Contingencies </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of December 31, 2008, the amount of the accrual relating to probable losses for these contingencies was US&#36;50 million (US&#36;59 million in 2007). Our legal counselors periodically revise the accruals based on
their judgment and the recent track record on these disputes. Most of the lawsuits are related to alleged joint liability between us and our independent contractors, wage equalization, fine of 40% resulting from FGTS purge, lack of prior notice,
&#147;13th-salary&#148; bonus, additional payments for unhealthy and hazardous activities, unpaid overtime and disagreement between employees and the Brazilian government over the amount of severance payments. The lawsuits related to the alleged joint liability between us and our independent contractors represent a significant portion of the total labor lawsuits against us, and refer to non-payment of labor charges by our independent contractors to their
employees, for which we may be found subsidiary liable for. </P>
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<P>
<B><I>Civil Contingencies </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These are mainly claims for indemnities within the civil judicial processes in which we are involved. Such proceedings, in general, are a result of occupational accidents and diseases related to our industrial
activities. In 2008, our legal counsel revised estimated losses based on their own judgment and recent precedents for these disputes. As of December 31, 2008, the amount of the accrual relating to probable losses for these contingencies was
US&#36;20 million (US&#36;20 million as of December 31, 2007). </P>
<P>
<B><I>Other Tax Contingencies </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to the tax contingencies described in &#147;Item 5A. Operating Results&#151;Results of Operations&#151;2008 Compared to 2007&#151;Disputed Taxes Payable,&#148; we are party to other judicial and
administrative proceedings not described in the notes to our consolidated financial statements, involving a total of approximately US&#36;2.5 billion as of December 31, 2008 (US&#36;2.6 billion as of December 31, 2007). Our external legal counsel
deemed that the risk of loss arising from these lawsuits are possible, as opposed to probable. Therefore, we did not record accruals for contingencies with respect to these lawsuits.<B> </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other tax contingencies relate to a variety of disputes for which we have recorded provisions for probable losses. No single group of similar claims constitutes more than 5% of total contingencies. </P>
<P>
<B><I>Legal Disputes with CVRD </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Until 2001, we held an ownership interest in CVRD, Latin America&#146;s largest mining company and the largest producer and exporter of iron ore in the world, through Valepar. Pursuant to an agreement entered into on
December 31, 2000, we sold our ownership interest in Valepar to certain companies and pension funds, including Bradespar S.A. and Litel Participa&ccedil;&otilde;es S.A. In connection with the sale of our then controlling stake at Valepar to
Bradespar S.A. and Litel Participa&ccedil;&otilde;es S.A., and the subsequent sale of Valia&#146;s (CVRD&#146;s pension fund) 10.3% ownership interest in our company in 2003, CVRD obtained a 30-year right of first refusal to match all the
conditions, including price, quality and tenor, obtained by us in contracts with third parties to purchase iron ore produced at Casa de Pedra in excess of our and our affiliates&#146; needs. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In view of certain acquisitions made by CVRD in 1995, the Brazilian anti-trust agency (<I>Conselho Administrativo de Defesa Econ&ocirc;mica</I>), or CADE, issued a decision in August 2005 pursuant to which CVRD would
have to choose between its ownership interest in Ferteco Minera&ccedil;&atilde;o S.A., or Ferteco, or its rights of first refusal mentioned above. Such decision  was challenged by CVRD before the Brazilian courts. We filed with CADE a statement of
compliance with the administrative order that requires the parties to refrain from exercising the rights of first refusal of CVRD related to Casa de Pedra mine. This statement of compliance was publicly announced through a notice to the market
(<I>fato relevante</I>) on January 17, 2008. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Several disputes between us and CVRD arose from the transactions described in the two preceding paragraphs, including those (i) related to alleged indemnification or compensation rights arising from the exclusion of the
&#147;preference rights&#148; relative to the acquisition of surplus iron ore produced by the Casa de Pedra mine, as well as to the Casa de Pedra mine itself, (ii) arising from obligations envisaged in the agreements related to the elimination of
crossed shareholdings between Vale and CSN, occurred in December, 2000; and (iii) related to other pending matters in regard to these issues. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On April 27, 2009, we and CVRD entered into a settlement agreement for the purpose of terminating all these pending lawsuits between the two companies. The settlement agreement, which has already been ratified by our
and CVRD&#146;s shareholders, also encompasses the revision of the terms and conditions included in certain commercial contracts entered into between us and CVRD. </P>
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<P>
<B>Dividend Policy </B></P>
<P>
<B><I>General </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to certain exceptions set forth in Brazilian Corporate Law, our bylaws require that we pay a yearly minimum dividend equal to 25% of adjusted net profits, calculated in accordance with Brazilian Corporate Law.
Proposals to declare and pay dividends in excess of the statutory minimum are generally made at the recommendation of our Board of Directors and approval by the vote of our shareholders. Any such proposal will be dependent upon our results of
operations, financial condition, cash requirements for our business, future prospects and other factors deemed relevant by our Board of Directors. Until December 2000, it had been our policy to pay dividends on our outstanding common shares not less
than the amount of our required distributions for any particular fiscal year, subject to any determination by our Board of Directors that such distributions would be inadvisable in view of our financial condition. In December 2000, our Board of
Directors decided to adopt a policy of paying dividends equal to all legally available net profits, after taking into consideration the following priorities: (i) our business strategy; (ii) the performance of our obligations; (iii) the
accomplishment of our required investments, and (iv) the maintenance of our good financial status. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to a change in Brazilian tax law effective January 1, 1996, Brazilian companies are also permitted to pay limited amounts of interest on stockholders&#146; equity to holders of equity securities and to treat
these payments as an expense for Brazilian income tax purposes. These payments may be counted in determining if the statutory minimum dividend requirement has been met, subject to shareholder approval. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For dividends declared during the past five years, see &#147;Item 3A. Selected Financial Data.&#148; </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At our Annual Shareholders&#146; Meeting of April 18, 2008, our shareholders approved the payment of dividends and interest on shareholders&#146; equity relating to 2007, in the total amount of US&#36;1,249 million, of
which US&#36;379 million and US&#36;77 million were already paid on January 8, 2008, as dividends and interest on shareholders&#146; equity, respectively, in accordance with the resolutions of our Board of Directors. The outstanding balance of
US&#36;793 million was paid on May 5, 2008. These amounts were translated into U.S. dollars based on the exchange rate in effect on the respective dates of payment.&#148; </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At our Annual Shareholders&#146; Meeting of April 30, 2009, our shareholders approved the payment of dividends and interest on shareholders&#146; equity relating to 2008, in the total amount of US&#36;868.6 million
(US&#36;738.2 million as dividends and US&#36;130.4 million as interest on shareholders&#146; equity).</P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The total amount of approved dividends include dividends paid in advance on November 27, 2008, in the amount of US&#36;70.6 million, that had already been approved by our Board of Directors on August 12, 2008, and
dividends that had already been approved by our Board of Directors on March 24, 2009 in the amount of US&#36;667.6 million.</P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Soon after the announcement of the payment of such dividends in the amount of US&#36;667.6 million, a court order was issued by a trial state tax court in the State of Rio de Janeiro in connection with tax claims
related to IPI premium credits on exports that we have recorded, in order to block approximately US&#36;354.2 million of our funds. For this reason, the Company paid its shareholders on April 2, 2009 the amount of funds that had not been blocked of
approximately US&#36;313.4 million. We are taking all measures to unblock our funds. Nevertheless, aiming at the preservation of our shareholders&#146; rights, we decided to pay on June 26, 2009, the remaining dividends of approximately US&#36;354.2
million. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The US&#36;130.4 million as interest on shareholders&#146; equity were paid on May 11, 2009. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For further information, see &#147;Item 5. Operating and Financial Review and Prospects - Item 5A. Operating Results&#151;Results of Operations&#151;2007 Compared to 2006&#151;Disputed Taxes Payable&#148;</P>
<P>
<B><I>Amounts Available for Distribution </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At each Annual Shareholders&#146; Meeting, our Board of Directors is required to recommend how our earnings for the preceding fiscal year are to be allocated. For purposes of Brazilian Corporate Law, a company&#146;s
net income after income tax and social contribution for any one fiscal year, net of any accumulated losses from prior fiscal years and amounts allocated to employees&#146; and management&#146;s participation in earnings, represents its &#147;net profits&#148;
for that fiscal year. In accordance with Brazilian Corporate Law, an amount equal to our &#147;net profits,&#148; as further: </P>
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<P>
(i) increased by the amount of depreciation and amortization (net of income tax and social contribution) attributable to the revaluation of any assets,</P>
<P>
(ii) reduced by amounts allocated to the legal reserve,</P>
<P>
(iii) reduced by amounts allocated to other reserves established by us in compliance with applicable law (as hereinafter discussed),</P>
<P>
(iv) increased by reversal of reserves accrued in prior year; and </P>
<P>
(v) will be available for distribution to shareholders in any particular year. We refer to this amount available for distribution to shareholders as the Distributable Amount. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Legal Reserve</I>. Under Brazilian Corporate Law, we are required to maintain a &#147;legal reserve&#148; to which we must allocate 5% of our &#147;net profits&#148; for each fiscal year until the amount of the
reserve equals 20% of our paid-in capital. The legal reserve might be used to increase our paid-in capital and net losses, if any, may be charged against the legal reserve. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Discretionary (or Statutory) Reserves</I>. Under Brazilian Corporate Law, a company may also provide for discretionary allocations of &#147;net profits&#148; to the extent set forth in its bylaws. Our bylaws do not
provide for a discretionary reserve. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Contingency Reserve</I>.  Under Brazilian Corporate Law, a portion of our &#147;net profits&#148; may also be discretionary allocated to a &#147;contingency reserve&#148; for an anticipated loss that is deemed
probable in future years. Any amount so allocated in a prior year must be either (i) reversed in the fiscal year in which the reasons for its establishment cease to exist or (ii) charged off in the event that the anticipated loss occurs. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Reserve for Investment Projects</I>.  Under Brazilian Corporate Law, a portion of our net income may be allocated for plant expansion and other capital investment projects, the amount of which is based on a capital
budget previously presented by management and approved by our shareholders. After completion of the relevant capital investment projects, we must retain the appropriation until our shareholders, at a shareholders&#146; meeting, vote on a new
destination to the amount appropriated or on transferring all or a portion thereof to capital or retained earnings. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Unrealized Income Reserve</I>.  Under Brazilian Corporate Law, the amount by which the Mandatory Dividend (defined below) exceeds the &#147;realized portion&#148; of net profits for any particular year may be
allocated to the unrealized income reserve. The &#147;realized portion&#148; of net profits is the amount by which &#147;net profits&#148; exceeds the sum of (i) a company&#146;s positive net results considering its subsidiaries and certain
affiliates, and (ii) the profits, gains or return recognized in respect of transactions maturing after the end of a fiscal year. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Brazilian Corporate Law provides that all discretionary allocations of &#147;net profits,&#148; including discretionary reserves, the contingency reserve, the unrealized income reserve and the reserve for investment
projects are subject to approval by our shareholders at our Annual Shareholders&#146; Meeting and can be used to increase our capital stock, for the payment of dividends in subsequent years, charged off in the event of losses, or used to any other
destination. The fiscal incentive investment reserve and legal reserve are also subject to approval by our shareholders at our Annual Shareholders&#146; Meeting and may be transferred to capital but are not available for the payment of dividends in
subsequent years.</P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of determining reserve amounts, the calculation of &#147;net profits&#148; and allocations to reserves for any fiscal year are determined on the basis of financial statements prepared in accordance with
Brazilian Corporate Law. The consolidated financial statements included herein have been prepared in accordance with U.S. GAAP and, although our allocations to reserves and dividends will be reflected in the financial statements, investors will not
be able to calculate the allocations or required dividend amounts from the consolidated financial statements. </P>
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<P>
<B><I>Mandatory Dividend </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under our bylaws, we are required to distribute to shareholders as dividends in respect of each fiscal year ending on December 31, to the extent profits are available for distribution, an amount equal to at least 25% of
the Distributable Amount (the &#147;Mandatory Dividend&#148;) in any particular year (the amount of which shall include any interest paid on capital during that year). See &#147;Additional Payments on Shareholders&#146; Equity&#148; below. In
addition to the Mandatory Dividend, our Board of Directors may recommend that shareholders receive an additional payment of dividends from other funds legally available therefore. Any payment of interim dividends will be netted against the amount of
the Mandatory Dividend for that fiscal year. Under Brazilian Corporate Law, if the Board of Directors determines prior to the Annual Shareholders&#146; Meeting that payment of the Mandatory Dividend for the preceding fiscal year would be inadvisable
in view of our financial condition, the Mandatory Dividend need not be paid. That type of determination must be reviewed by the Fiscal Council, if one exists, and reported, together with the appropriate explanations, to the shareholders and to the
CVM. </P>
<P>
<B><I>Payment of Dividends </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are required to hold Annual Shareholders&#146; Meetings by the end of April of each year at which an annual dividend may be declared. Additionally, our Board of Directors may declare interim dividends. Under
Brazilian Corporate Law, dividends are generally required to be paid to the holder of record on a dividend declaration date within 60 days following the date the dividend was declared, unless a shareholders&#146; resolution sets forth another date
of payment, which, in either case, must occur prior to the end of the fiscal year in which the dividend was declared. A shareholder has a three-year period from the dividend payment date to claim dividends (or interest on shareholders&#146; equity
as described under &#147;Additional Payments on Shareholders&#146; Equity&#148; below) in respect of its shares, after which we will no longer be liable for the dividend payments. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our payments of cash distributions on common shares underlying the ADSs will be made in Brazilian currency to our ADR custodian on behalf of our ADR depositary, which will then convert the proceeds into U.S. dollars and
will cause the U.S. dollars to be delivered to our ADR depositary for distribution to holders of ADSs. </P>
<P>
<B><I>Additional Payments on Shareholders&#146; Equity </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since January 1, 1996, Brazilian companies have been permitted to pay interest on shareholders&#146; equity to holders of equity securities and to treat those payments as deductible expense for Brazilian income tax
purposes. The amount of interest payable on capital is calculated based on the TJLP, as determined by the Central Bank, applied to each shareholder&#146;s portion of net equity. Brazilian Corporate Law establishes that current earnings are not
included as part of the net equity. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The TJLP is determined by the Central Bank on a quarterly basis. The TJLP is based on the annual profitability average of Brazilian public internal and external debt. The TJLP rate for the fourth quarter of 2008 was
6.25% . </P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest on shareholders&#146; equity is deductible to the extent it does not exceed 50% of either of the following amounts: (i) net income, as determined for accounting purposes, for the current period of interest payment before the
  provision for income tax and the deduction of the amount of interest; or (ii) accumulated earnings from prior years. </P>
<P>
<B>8B. Significant Changes </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No significant changes or events have occurred after the close of the financial statements as of and for the year ended December 31, 2008, other than the events already described in this annual report. </P>
<P>
<B>Item 9. The Offer and Listing </B></P>
<P>
<B>9A. Offer and Listing Details </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On May 31, 2004, we reverse split our common shares, so that each 1,000 former common shares became represented by four common shares. Effective June 10, 2004, our ADSs were split four-for-one, and each ADS represented
one common share after giving effect to the split and regrouping. </P>
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<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our capital stock is comprised of common shares without par value (<I>a&ccedil;&otilde;es ordin&aacute;rias</I>). On January 22, 2008, our shareholders approved a one-for-three split of our common shares. As a result of
this stock split, each common share of our capital stock as of January 22, 2008 became represented by three common shares after the split. The same ratio of one common share for each ADS was maintained. See &#147;Item 10.B. Memorandum and Articles
of Association.&#148; </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth information concerning the high and low closing sale prices and the average daily trading volume of our common shares on the BOVESPA (per common share) and the ADSs on the NYSE for the
periods indicated.</P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD></TD>
	<TD width=2%></TD>
	<TD width=10%></TD>
	<TD width=2%></TD>
	<TD width=10%></TD>
	<TD width=2%></TD>
	<TD width=10%></TD>
	<TD width=2%></TD>
	<TD width=10%></TD>
	<TD width=2%></TD>
	<TD width=10%></TD>
	<TD width=2%></TD>
	<TD width=10%></TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD colspan=5 align=center><B>Common Shares</B><B><SUP>(1)</SUP></B></TD>
	<TD align="center">&nbsp;</TD>
  <TD colspan=5 align=center><B>American Depositary Shares</B><SUP>(1)</SUP></TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD colspan=5 align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center"></TD>
  <TD colspan=5 align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD colspan=3 align=center><B>US&#36; per Share</B><B><SUP>(2)</SUP></B></TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>Volume</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD colspan=3 align=center><B>US&#36; per ADS</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
  <TD align=center><B>Volume</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD colspan=3 align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center"></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center"></TD>
	<TD colspan=3 align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center"></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B><I>(In</I></B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
  <TD align=center><B><I>(In</I></B>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>High</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>Low</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B><I>thousands)</I></B></TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>High</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>Low</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
  <TD align=center><B><I>thousands)</I></B></TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>2004</B>:&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Year end&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>6.38&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>3.19&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>2,516&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>6.37&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>3.17&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right>1,967&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>2005</B>:&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>Year end&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>8.74&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>5.00&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>2,886&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>8.77&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>5.05&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right>2,548&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>2006</B>:&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>Year end&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>12.39&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>6.99&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>2,108&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>12.46&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>7.19&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right>2.803&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>2007</B>:&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>First quarter&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>14.44&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>9.33&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>2,938&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>14.28&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>9.42&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right>3,415&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Second quarter&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>18.28&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>14.23&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>2,195&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>18.34&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>14.22&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right>3,067&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Third quarter&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>23.81&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>14.63&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>2,747&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>23.64&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>14.46&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right>4,075&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Fourth quarter&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>29.80&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>22.82&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>2,790&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>30.56&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>22.82&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right>3,402&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Year end&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>29.80&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>9.33&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>2,665&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>30.56&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>9.42&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right>3,490&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>2008</B>:&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>First quarter&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>40.93&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>23.75&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>2,585&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>40.82&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>25.53&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right>4,261&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Second quarter&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>51.26&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>37.07&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>2,309&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>51.01&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>37.32&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right>3,448&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Third quarter&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>42.54&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>19.42&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>3,162&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>42.73&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>18.78&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right>5,519&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Fourth quarter&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>20.51&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>8.24&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>3,443&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>20.62&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>7.87&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right>5,195&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Year end&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>51.26&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>8.24&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>2,881&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>51.01&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>7.87&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right>4,610&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>2009</B>:&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>First quarter&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>17.74&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>12.06&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>2,983&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>18.25&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>11.99&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right>4,609&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Month Ended:&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>January 31, 2009&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>16.72&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>13.61&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>3,250&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>16.57&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>13.73&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right>5,033&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>February 29, 2009&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>17.74&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>13.18&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>2,713&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>18.25&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>12.61&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right>4,707&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>March 31, 2009&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>16.10&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>12.06&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>2,950&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>16.27&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>11.99&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right>4,138&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>April 30, 2009&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>18.49&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>15.50&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>2,582&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>18.52&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>15.50&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right>3,373&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>May 31, 2009&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>24.58&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>19.34&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>2,419&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>24.52&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>19.03&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right>3,399&nbsp;</TD></TR>
</TABLE><BR>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <TR>
    <TD colspan=5>Source: Econom&aacute;tica.</TD>
  </TR>
  <TR valign="bottom">
    <TD width="3%" align=left valign="top">(1)</TD>
    <TD colspan=4 align=left>Prices and volumes of our common shares and ADSs have been adjusted to reflect the one-for-three stock split occurred in January 2008 whereby each common share of our capital stock on December 31, 2007 became represented by three common shares.
See &#147;Item 10.B. Memorandum and Articles of Association.&#148; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="top">(2)</TD>
    <TD colspan="4" align=left>U.S. dollar amounts have been translated from <I>reais </I>at the exchange rates in effect on the respective dates of the quotations for the common shares set forth above. These
U.S. dollar amounts may reflect exchange rate fluctuations and may not correspond to changes in nominal <I>reais </I>prices over time.</TD>
  </TR>
</TABLE>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of May 29, 2009, the closing sale price (i) per common share on the BOVESPA was US&#36;24.58 and (ii) per ADS on the NYSE was US&#36;24.52. The ADSs are issued under a deposit agreement and JPMorgan Chase Bank serves
as depositary under that agreement. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of May 29, 2009, approximately 190.8 million, or approximately 25.2%, of our outstanding common shares were held through ADSs. Substantially all of these ADSs were held of record by The Depository Trust Company. In
addition, our records indicate that on that date there were approximately 120 record holders (other than our ADR depositary) with addresses in the U.S., holding an aggregate of approximately 20.3 million common shares, representing 2.7% of our
outstanding common shares.</P>
<P align="center">
95 </P>

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<A name="page_96"></A><p align=right><a href="#topdraft">Table of Contents</a></p>

<P>
<B>9B. Plan of Distribution </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable. </P>
<P>
<B>9C. Markets </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The principal trading market for our common shares is the BOVESPA. Our ADSs trade on the NYSE under the symbol &#147;SID.&#148; </P>
<P>
<B>Trading on the BOVESPA </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2000, the BOVESPA was reorganized through the execution of memoranda of understanding by the Brazilian stock exchanges. Under the memoranda, all securities in Brazil are now traded only on the BOVESPA, with the
exception of electronically traded public debt securities and privatization auctions, which are traded on the Rio de Janeiro Stock Exchange. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When shareholders trade in common and preferred shares on the BOVESPA, the trade is settled in three business days after the trade date without adjustment of the purchase price for inflation. The seller is ordinarily
required to deliver the shares to the exchange on the second business day following the trade date. Delivery of and payment for shares are made through the facilities of the clearinghouse, <I>Companhia Brasileira de Liquida&ccedil;&atilde;o e
Cust&oacute;dia, </I>or CBLC, a subsidiary of the BOVESPA. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The BOVESPA was a nonprofit entity owned by its member brokerage firms until August, 2007. Since then, Bovespa Holding S.A. became a public company with shares negotiated on the BOVESPA. Trading on the BOVESPA is
conducted through an electronic trading system from 10:00 a.m. to 5:00 p.m., S&atilde;o Paulo time, for all securities traded on all markets, except during daylight savings time in the United States. During daylight savings time in the United
States, usually the sessions are from 11:00 a.m. to 6:00 p.m., S&atilde;o Paulo time, to closely mirror the NYSE trading hours. This system is a computerized system that links electronically with the seven smaller regional exchanges. The BOVESPA
also permits trading from 5:45 p.m. to 7:00 p.m. on an online system connected to traditional and internet brokers called the &#147;after market.&#148; Trading on the after market is subject to regulatory limits on price volatility and on the volume
of shares transacted through internet brokers. There are no specialists or officially recognized market makers for our shares in Brazil. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In order to better control volatility, the BOVESPA adopted a &#147;circuit breaker&#148; system pursuant to which trading sessions may be suspended for a period of 30 minutes or one hour whenever the BOVESPA&#146;s
index, or Ibovespa index, falls below the limits of 10% or 15%, respectively, in relation to the index registered in the previous trading session. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The BOVESPA is significantly less liquid than the NYSE or other major exchanges in the world. As of December 2008, the aggregate market capitalization of the BOVESPA was equivalent to R&#36;1.4 trillion (or US&#36;588
billion). In contrast, as of December 2008, the aggregate market capitalization of the NYSE was US&#36;10.2 trillion. The average daily trading volume of the BOVESPA and NYSE for December 2008 was approximately R&#36;3.2 billion (or US&#36;1.3) and
US&#36;46.2 billion, respectively. Although any of the outstanding shares of a listed company may trade on the BOVESPA, in most cases fewer than half of the listed shares are actually available for trading by the public, since the remaining shares
are generally being held by small groups of controlling persons, by government entities or by one principal shareholder. See &#147;Item 3. Risk Factors&#151;Risks Relating to the ADSs and Our Common Shares&#151;The relative volatility and
illiquidity of the Brazilian securities markets may substantially limit the ability of holders of our common shares or ADSs to sell the common shares underlying the ADSs at the time and price they desire.&#148; </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of December 31, 2008, we accounted for approximately 1.67% of the market capitalization of all listed companies on the BOVESPA. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table reflects the fluctuations in the Ibovespa index during the periods indicated:</P>
<P align="center">
96 </P>

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<H5 align="left" style="page-break-before:always"></H5>
<p><A name="page_97"></A><p align=right><a href="#topdraft">Table of Contents</a></p>
<p><B>Ibovespa Index</B>
</p>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD width=55%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>High</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>Low</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
  <TD align=center><B>Close</B>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>2004&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>26,196&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right> &nbsp; &nbsp; &nbsp;17,604&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right> &nbsp; &nbsp; &nbsp; &nbsp;26,196&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>2005&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>33,629&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right> &nbsp; &nbsp; &nbsp;23,610&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right> &nbsp; &nbsp; &nbsp; &nbsp;33,456&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>2006&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>44,674&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right> &nbsp; &nbsp; &nbsp;32,057&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right> &nbsp; &nbsp; &nbsp; &nbsp;44,473&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>2007&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>65,790&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right> &nbsp; &nbsp; &nbsp;41,179&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right> &nbsp; &nbsp; &nbsp; &nbsp;63,886&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>2008&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>73,516&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right> &nbsp; &nbsp; &nbsp;29,435&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right> &nbsp; &nbsp; &nbsp; &nbsp;37,550&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>2009 (through April 30)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>47,289&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right> &nbsp; &nbsp; &nbsp; &nbsp;36,234&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right> &nbsp; &nbsp; &nbsp; &nbsp;47,289&nbsp;</TD>
</TR>
</TABLE><BR>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The IBOVESPA index closed at 47,289 on April 30, 2009. Trading on the BOVESPA by nonresidents of Brazil is subject to certain limitations under Brazilian foreign investment legislation. See &#147;Item 10D. Exchange
Controls.&#148; </P>
<P>
<B>Regulation of the Brazilian Securities Markets </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Brazilian securities markets are regulated by the CVM, which has authority over stock exchanges and the securities markets generally, and by the Central Bank, which has, among other powers, licensing authority over
brokerage firms and regulates foreign investment and foreign exchange transactions. The Brazilian securities market is governed by Law No. 6,385 dated December 7, 1976, as amended, or the Brazilian Securities Law, and Brazilian Corporate Law and
regulations issued by the CVM. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under Brazilian Corporate Law, a company is either public, a <I>companhia aberta</I>, such as us, or private, a <I>companhia fechada</I>. All public companies are registered with the CVM and are subject to reporting and
regulatory requirements. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trading in securities on the BOVESPA may be suspended at the request of a company in anticipation of a material announcement. The company should also suspend its trading on international stock exchanges where its
securities are traded. Trading may also be suspended on the initiative of the BOVESPA or the CVM, among other reasons, based on or due to a belief that a company has provided inadequate information regarding a material event or has provided
inadequate responses to the inquires by the CVM or the BOVESPA. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Brazilian Securities Law and the regulations issued by the CVM provide for, among other things, disclosure requirements, restrictions on insider trading and price manipulation, as well as protection of minority
shareholders. However, the Brazilian securities markets are not as highly regulated and supervised as the United States securities markets or markets in certain other jurisdictions. </P>
<P>
<B>Disclosure Requirements</B><B> </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;According to Law No 6,385, a publicly held company must submit to the CVM and BOVESPA certain periodic information, including annual and quarterly reports prepared by management and independent auditors. This
legislation also requires us to file with the CVM our shareholders&#146; agreements, notices of shareholders&#146; meetings and copies of the related minutes. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the CVM Resolution No. 358, of January 3, 2002, the CVM revised and consolidated the requirements regarding the disclosure and use of information related to material facts and acts of publicly held
companies, including the disclosure of information in the trading and acquisition of securities issued by publicly held companies.  </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Such requirements include provisions that:</P>

<ul>
<li>
<P>
establish the concept of a material fact that gives rise to reporting requirements. Material facts include decisions made by the controlling shareholders, resolutions of the shareholders at a shareholders&#146; meeting and of management of
the company, or any other facts related to the company&#146;s business (whether occurring within the company or otherwise somehow related thereto) that may influence the price of its publicly traded securities, or the decision of investors to trade
such securities or to exercise any of such securities&#146; underlying rights; </P>
<li>specify examples of facts that are considered to be material, which include, among others, the execution of agreements providing for the transfer of control, the entry or withdrawal of shareholders
that maintain any managing, financial, technological or administrative function with or contribution to the company, and any corporate restructuring undertaken among related companies;
</ul>

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<ul>

<li>
<P>
oblige the officer of investor relations, controlling shareholders, other officers, directors, members of the audit committee and other advisory boards to disclose material facts; </P>
<li>
  <P>
require simultaneous disclosure of material facts to all markets in which the corporation&#146;s securities are admitted for trading; </P>
<li>
  <P>
require the acquirer of a controlling stake in a corporation to publish material facts, including its intentions as to whether or not to de-list the corporation&#146;s shares, within one year; </P>
<li>
  <P>
establish rules regarding disclosure requirements in the acquisition and disposal of a material ownership interest; and </P>
<li>
  <P>
forbid trading on the basis of material non-public information. </P>
</ul>

<P>
<B>9D. Selling Shareholders </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable. </P>
<P>
<B>9E. Dilution </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable. </P>
<P>
<B>9F. Expenses of the Issue </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable. </P>
<P>
<B>Item 10. Additional Information </B></P>
<P>
<B>10A. Share Capital </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable. </P>
<P>
<B>10B. Memorandum and Articles of Association </B></P>
<P>
<B>Registration and Corporate Purpose </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are registered with the Department of Trade Registration under number 15,910. Our corporate purpose, as set forth in Article 2 of our bylaws, is to manufacture, transform, market, import and export steel products and
steel derived by-products from the manufacturing plant, as well as to explore other activities that are directly or indirectly related to our corporate purpose, including: mining, cement and carbochemical business activities, the manufacture and
assembly of metallic structures, construction, transportation, navigation and port activities. </P>
<P>
<B>Directors&#146; Powers </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to our bylaws, a director may not vote on a proposal, arrangement or contract in which the director&#146;s interests conflict with our interests. In addition, our shareholders must approve the total
compensation of our management and our Board of Directors is responsible for allocating individual amounts of management compensation. There is no mandatory retirement age for our directors. Brazilian Corporate Law requires that a director must be a
shareholder of the company, but there is no minimum amount of shares required. A detailed description of the general duties and powers of our Board of Directors may be found in &#147;Item 6A. Directors and Senior Management.&#148; </P>
<P align="center">
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<P>
<B>Description of Capital Stock </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Set forth below is certain information concerning our capital stock and a brief summary of certain significant provisions of our bylaws and Brazilian Corporate Law applicable to our capital stock. This description does
not purport to be complete and is qualified by reference to our bylaws and to Brazilian law. For further information, see our bylaws, which have been filed as an exhibit to this annual report. </P>
<P>
<B><I>Capital Stock </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On January 22, 2008, our shareholders approved a one-for-three split of our common shares and the cancellation of 4,000,000 treasury shares (equivalent to 12,000,000 common shares after the split) . As a result of this
stock split, each common share of our capital stock as of January 22, 2008 became represented by three common shares after the split. The same ratio of one common share for each ADS was maintained. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December 31, 2008, our capital stock was comprised of 793,403,838 common shares, without par value including 34,734,384 common shares held in treasury. Our bylaws authorize the Board of Directors to increase the
capital stock up to 1,200,000,000 common shares without an amendment to our bylaws by means of a vote at our shareholders&#146; meeting. There are currently no classes or series of preferred shares issued or outstanding. We may purchase our own
shares for purposes of cancellation or to hold them in treasury subject to certain limits and conditions established by the CVM and Brazilian Corporate Law. See &#147;Item 16E. Purchases of Equity Securities by the Issuer and Affiliated
Purchasers.&#148; </P>
<P>
<B><I>Liability for Further Capital Calls </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to Brazilian Corporate Law, a shareholder&#146;s liability is generally limited to the issue price of the subscribed or purchased shares. There is no obligation of a shareholder to participate in additional
capital calls. </P>
<P>
<B><I>Voting Rights </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each common share entitles the holder to one vote at our shareholders&#146; meetings. According to a CVM ruling, shareholders that represent at least 5% of our common shares may request cumulative voting in an election
of our Board of Directors. Pursuant to Brazilian Corporate Law, shareholders holding at least 15% of our common shares have the right to appoint a member of our Board of Directors. </P>
<P>
<B><I>Shareholders&#146; Meetings </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to Brazilian Corporate Law, the shareholders present at an annual or extraordinary shareholders&#146; meeting, convened and held in accordance with Brazilian Corporate Law and our bylaws are empowered to decide
all matters relating to our corporate purpose and to pass any resolutions they deem necessary for our protection and well-being. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In order to participate in a shareholders&#146; meeting, a shareholder must be a record owner of the share on the day the meeting is held, and may be represented by a proxy. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholders&#146; meetings are called, convened and presided over by the Chairman or Vice-Chairman of our Board of Directors. Brazilian Corporate Law requires that our shareholders&#146; meeting be convened by
publication of a notice in the <I>Di&aacute;rio Oficial do Estado do Rio de Janeiro</I>, the official government publication of the State of Rio de Janeiro, and in a newspaper of general circulation in Brazil and in the city in which our principal
place of business is located, currently the Jornal Valor Econ&ocirc;mico, at least 15 days prior to the scheduled meeting date and no fewer than three times. We have changed to the Jornal Valor Econ&ocirc;mico as our main means of disclosing legal
notices after our shareholders approved by unanimous vote such change at our shareholders&#146; meeting held on April 30, 2009. Both notices must contain the agenda for the meeting and, in the case of an amendment to our bylaws, an indication of the
subject matter.</P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In order for a shareholders&#146; meeting to be held, shareholders representing a quorum of at least one-fourth of the voting capital must be present. A shareholder may be represented at a shareholders&#146; meeting by
means of a proxy, appointed not more than one year before the meeting, who must be a either a shareholder, a company officer or a lawyer. For public companies, such as we are, the proxy may also be a financial institution. If no quorum is present, notice must be given in the manner described above, no fewer than eight days prior to the scheduled meeting date. On second
notice, the meeting may be convened without a specific quorum requirement, subject to the minimum quorum and voting requirements for certain matters, described below. A holder of shares with no voting rights may attend a shareholders&#146; meeting
and take part in the discussion of matters submitted for consideration. </P>
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<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as otherwise provided by law, resolutions passed at a shareholders&#146; meeting require a simple majority vote, abstentions not considered. Pursuant to Brazilian Corporate Law, the approval of shareholders
representing at least one-half of the issued and outstanding voting shares is required for the following actions: (i) to change a priority, preference, right, privilege or condition of redemption or amortization of any class of preferred shares or
creation of any class of non-voting preferred shares that has a priority, preference, right, condition or redemption or amortization superior to an existing class of shares (in this case, a majority of issued and outstanding shares of the affected
class is required); (ii) to reduce the mandatory dividend; (iii) to change our corporate purpose; (iv) to merge into or consolidate with another company or to spin-off our assets; (v) to dissolve or liquidate our Company; (vi) to cancel any
liquidation procedure; (vii) to create founders&#146; shares; and (viii) to participate in a centralized group of companies as defined under Brazilian Corporate Law. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to Brazilian Corporate Law, shareholders voting at a shareholders&#146; meeting have the power to: (i) amend our bylaws; (ii) elect or dismiss members of our Board of Directors (and members of the Fiscal
Council) at any time; (iii) receive and approve the annual management accounts, including the allocation of net profits and the distributable amounts for payment of the mandatory dividends and allocation to the various reserve accounts; (iv)
authorize the issuance of debentures in general; (v) suspend the rights of a shareholder who has violated Brazilian Corporate Law or our bylaws; (vi) accept or reject the valuation of assets contributed by a shareholder in consideration of the
subscription of shares in our capital stock; (vii) authorize the issuance of founders&#146; shares; (viii) pass resolutions to reorganize the legal form of, merge, consolidate or split the company, to dissolve and liquidate the company, to elect and
dismiss its liquidators and to examine their accounts; and (ix) authorize management to declare the company insolvent and to request a <I>recupera&ccedil;&atilde;o judicial</I> or <I>recupera&ccedil;&atilde;o extrajudicial</I> (a procedure involving
protection from creditors similar in nature to reorganization under the U.S. Bankruptcy Code), among others. </P>
<P>
<B><I>Redemption Rights </I></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our common shares are not redeemable, except that a dissenting and adversely affected shareholder is entitled, under Brazilian Corporate Law, to obtain redemption upon a decision made at a shareholders&#146; meeting by
shareholders representing at least one half of the issued and outstanding voting shares to: (i) create a new class of preferred shares or to disproportionately increase an existing class of preferred shares relative to the other classes of preferred
shares (unless these actions are provided for or authorized by our bylaws); (ii) modify a preference, privilege or condition of redemption or amortization conferred on one or more classes of preferred shares, or to create a new class with greater
privileges than an existing class of preferred shares; (iii) reduce the mandatory distribution of dividends; (iv) change our corporate purpose; (v) merge us with another company or consolidate us; (vi) transfer all of our shares to another company
in order to make us a wholly-owned subsidiary of that company (<I>incorpora&ccedil;&atilde;o</I>); (vii) approve the acquisition of control of another company at a price that exceeds certain limits set forth under Brazilian Corporate Law; (viii)
approve our participation in a centralized group of companies as defined under Brazilian Corporate Law; (ix) conduct a spin-off that results in (a) a change of corporate purpose, (b) a reduction of the mandatory dividend or (c) any participation in
a group of companies as defined under Brazilian Corporate Law; or (x) in the event that the entity resulting from (a) a merger or consolidation, (b) an <I>incorpora&ccedil;&atilde;o</I> as described above or (c) a spin-off of a listed company fails
to become a listed company within 120 days of the shareholders&#146; meeting at which the decision was taken. The right of redemption lapses 30 days after publication of the minutes of the relevant shareholders&#146; meeting. We would be entitled to
reconsider any action giving rise to redemption rights within 10 days following the expiration of those rights, if the redemption of shares of dissenting shareholders would jeopardize our financial stability. Law No. 9,457 dated May 5, 1997, which
amended Brazilian Corporate Law, contains provisions which, among others, restrict redemption rights in certain cases and allow companies to redeem their shares at their market value, subject to certain requirements. According to our bylaws, the
reimbursement value of the common shares must equal the market value, determined by a valuation report in accordance with Brazilian Corporate Law, of our capital stock divided by the total number of shares issued by us, excluding treasury shares.
<B> </B></P>
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<P>
<B><I>Preemptive Rights </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as provided for in Brazilian Corporate Law (such as, mergers and public offerings), our bylaws allow each of our shareholders a general preemptive right to subscribe to shares in any capital increase, in
proportion to his or her ownership interest. A minimum period of 30 days following the publication of notice of a capital increase is allowed for the exercise of the right and the right is negotiable. In the event of a capital increase that would
maintain or increase the proportion of capital represented by common shares, holders of ADSs will have preemptive rights to subscribe only to newly issued common shares. In the event of a capital increase that would reduce the proportion of capital
represented by common shares, holders of ADSs will have preemptive rights to subscribe for common shares, in proportion to their ownership interest, only to the extent necessary to prevent dilution of their interest in us. </P>
<P>
<B><I>Form and Transfer </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As our common shares are in registered form, the transfer of shares is governed by the rules of Article 31, paragraph 3, of Brazilian Corporate Law, which provides that a transfer of shares is effected by a transfer
recorded in a company&#146;s share transfer records upon presentation of valid share transfer instructions to the company by a transferor or its representative. When common shares are acquired or sold on a Brazilian stock exchange, the transfer is
effected on the company&#146;s records by a representative of a brokerage firm or the stock exchange&#146;s clearing system. Transfers of shares by a non-Brazilian shareholder are made in the same way and are executed by that shareholders&#146;
local agent. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The BOVESPA operates a central clearing system. A holder of our common shares may choose, at its discretion, to participate in this system and all shares elected to be put into this system will be deposited in the
custody of the BOVESPA (through a Brazilian institution duly authorized to operate by the Central Bank and having a clearing account with the BOVESPA). The fact that those common shares are held in the custody of the BOVESPA will be reflected in our
register of shareholders. Each participating shareholder will, in turn, be registered in our register of beneficial shareholders maintained by the BOVESPA and will be treated in the same way as registered shareholders. </P>
<P>
<B><I>Limitations on Ownership and Voting Rights by non-Brazilians Shareholders </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There are no restrictions on ownership or voting of our common shares by individuals or legal entities domiciled outside Brazil. However, the right to convert dividend payments and proceeds from the sale of common
shares into foreign currency and to remit those amounts outside Brazil is subject to exchange control restrictions and foreign investment legislation which generally require, among other things, obtaining a Certificate of Registration under the
Brazilian National Monetary Council&#146;s Resolution No. 2,689 or its direct foreign investment regulations. See &#147;Item 10D. Exchange Controls.&#148; </P>
<P>
<B><I>Share Ownership Disclosure </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There are no provisions in our bylaws governing the ownership threshold above which shareholder ownership must be disclosed. CVM regulations require the disclosure of the acquisition of (i) 5% of the voting stock of a
listed company, (ii) additional acquisitions by a controlling shareholder and (iii) shares by members of the Board of Executive Officers, members of the Fiscal Council (if any) and certain relatives of those persons.<B> </B></P>
<P>
<B><I>Differences Between the Laws of the United States and Brazil </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Brazilian Corporate Law is, in general nature, similar to corporate laws in the United States, including the possibility of a shareholders&#146; derivative action (<I>a&ccedil;&atilde;o de responsabilidade</I>) and the
responsibilities of directors (i.e., directors owe duties of care and loyalty). Liabilities predicated upon U.S. federal securities laws, including civil liabilities under those laws, may not be enforceable in Brazil, whether in original actions or
in actions for enforcement of judgments of U.S. courts. </P>
<P>
<B>10C. Material Contracts </B></P>
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<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2003, we entered into certain equity swap agreements referenced to our shares. These agreements were originally entered into with POBT Bank and Trust Limited (an affiliate of Banco Pactual), which later assigned the
agreements to UBS Symmetry Fund, UBS Strategy Fund and Fruhling Fund. In 2008, these agreements were assigned to Goldman Sachs International. Our current equity swap agreement with Goldman Sachs International will expire on September 10, 2009,
unless it is renewed by us. The agreements state that the counterparty must pay us the cash dividends and final price return, if positive, on 29,684,400 CSN ADRs and we must pay the counterparty a rate of USD three-month Libor plus 0.75% per annum
on the initial price of this number of ADRs and the final price return, if negative, on this number of ADRs. From September 5 to December 31, 2008, we recorded a loss in connection with these equity swap agreements in the amount of US&#36;685
million, which was partially offset by a gain of US&#36;155 million recorded in connection with an equity swap that expired on September 5, 2008, for a total loss of US&#36;530 million. In the event of further decreases in the trading price of our
shares, the amount payable by us under these swap agreements may be significant and materially and adversely affect us. See &#147;Item 3D. Risk Factors&#151;Risks Relating to our Common Shares and ADSs&#151;We are exposed to devaluation of our
shares as result of certain equity swap agreements and our pension plan assets,&#148; &#147;Item 5A&#151;Operating Results,&#148; &#147;Item 11&#151;Quantitative and Qualitative Disclosures About Market Risk&#151;Equity Risk,&#148; and Note 21 to
our consolidated financial statements contained in &#147;Item 18. Financial Statements.&#148; For a copy of the equity swap agreements as amended and novated, see Exhibit 10.1 to this annual report. </P>
<P>
<B>10D. Exchange Controls </B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There are no restrictions on ownership or voting of our common shares by individuals or legal entities domiciled outside Brazil. However, the right to convert dividend payments and proceeds from the sale of common
shares into foreign currency and to remit those amounts outside Brazil is subject to exchange control restrictions and foreign investment legislation which generally require, among other things, obtaining a Certificate of Registration under the
Brazilian National Monetary Council&#146;s Resolution No. 2,689 or its direct foreign investment regulations. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Resolution No. 2,689 dated March 31, 2000, introduced new rules to facilitate foreign investment in Brazil. The principal changes for foreign investors entering the Brazilian market include: </P>
<P align="justify">
&#149;  the removal of restrictions on investments by portfolio composition (e.g., equities, fixed income and derivatives); and </P>
<P align="justify">
&#149;  permission for foreign individuals and corporations to invest in the Brazilian market, in addition to foreign institutional investors. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior to Resolution No. 2,689, foreign investors had to leave and reenter the country in order to switch their investments from equity to fixed income. Now foreign investors can freely switch their investments without
leaving the local market. Foreign investors registered with the CVM and acting through authorized custody accounts and a legal representative may buy and sell any local financial product traded on the local exchanges and registered on the local
clearing systems, including shares on the BOVESPA, without obtaining separate Certificates of Registration for each transaction. Pursuant to Resolution No. 2,689, as amended, investors are also generally entitled to favorable tax treatment. See
&#147;Item 10E. Taxation&#151;Brazilian Tax Considerations.&#148; </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A Certificate of Registration has been issued in the name of JPMorgan Chase Bank, as our ADR depositary, and is maintained by the <I>Ita&uacute; Corretora de Valores S.A</I>., our ADR custodian, on behalf of our ADR
depositary. Pursuant to the Certificate, our ADR custodian and our ADR depositary are able to convert dividends and other distributions with respect to the common shares represented by ADSs into foreign currency and remit the proceeds outside
Brazil. In the event that a holder of ADSs surrenders its ADSs for common shares, that holder will be entitled to continue to rely on our ADR depositary&#146;s Certificate of Registration for only five business days after the surrender, following
which the holder must obtain its own Certificate of Registration. Thereafter, unless the common shares are held pursuant to Resolution No. 2,689 or direct foreign investment regulations, the holder may not be able to convert into foreign currency
and remit outside Brazil the proceeds from the disposition of, or distributions with respect to, those common shares, and the holder generally will be subject to less favorable Brazilian tax treatment than a holder of ADSs. See &#147;Item 10E.
Taxation&#151;Brazilian Tax Considerations.&#148; </P>
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<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A non-Brazilian holder of common shares may experience delays in obtaining a Certificate of Registration, which may delay remittances abroad. This kind of delay may adversely affect the amount, in U.S. dollars, received
by the non-Brazilian holder. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under current Brazilian legislation, the Brazilian government may impose temporary restrictions on remittances of foreign capital abroad in the event of a serious imbalance or an anticipated serious imbalance of
Brazil&#146;s balance of payments. For approximately nine months in 1989 and early 1990, the Brazilian government froze all dividend and capital repatriations held by the Central Bank that were owed to foreign equity investors in order to conserve
Brazil&#146;s foreign currency reserves. These amounts were subsequently released in accordance with Brazilian government directives. See &#147;Item 3D. Risk Factors&#151;Risks Relating to our Common Shares and ADSs&#151;If holders of ADSs exchange
the ADSs for common shares, they risk losing the ability to remit foreign currency abroad and Brazilian tax advantages.&#148; </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For a description of the foreign exchange markets in Brazil, see &#147;Item 3A. Selected Financial Data&#150; Exchange Rates.&#148; </P>
<P>
<B>10E. Taxation </B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following is a summary of certain U.S. federal income and Brazilian tax consequences of the ownership of common shares or ADSs by an investor that holds the common shares or ADSs as capital assets. This summary does
not purport to address all material tax consequences of the ownership of our common shares or ADSs, does not take into account the specific circumstances of any particular investors and does not address certain investors that may be subject to
special tax rules (such as tax-exempt organizations, certain insurance companies, broker-dealers in securities or currencies, traders in securities that elect to mark-to-market, real estate investment trusts, regulated investment companies, certain
financial institutions, partnerships or other pass-through entities, U.S. expatriates, investors liable for alternative minimum tax, investors that directly, indirectly or constructively own 10% or more of our common shares, investors that hold
common shares or ADSs as part of a straddle or a hedging straddle, constructive sale conversion, or other integrated transaction or investors whose functional currency is not the U.S. dollar). </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This summary is based on the tax laws of the United States (including the Internal Revenue Code of 1986, as amended, or the Code, its legislative history, existing and proposed Treasury regulations thereunder, published
rulings and court decisions) and Brazil as in effect on the date hereof, all of which are subject to change (or changes in interpretation), possibly with retroactive effect. In addition, this summary is based in part upon the representations of our
ADR depositary and the assumption that each obligation in our deposit agreement and any related agreement will be performed in accordance with its terms. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although there is, at present, no income tax treaty between Brazil and the United States, the tax authorities of the two countries have had discussions that may culminate in such a treaty. Both countries have been
accepting the offset of income taxes paid in one country against the income tax due in the other based on reciprocity. On March 20, 2007, Brazil and the United States signed a tax information exchange agreement. No assurance can be given, however,
as to whether or when a treaty will enter into force or how it will affect the U.S. Holders, as defined below, of common shares or ADSs. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The discussion does not address any aspects of U.S. taxation other than federal income taxation or any aspects of Brazilian taxation other than income, gift, inheritance and capital taxation. Prospective investors are
urged to consult their own tax advisors regarding the U.S. federal, state and local and regarding Brazilian and other tax consequences of owning and disposing of common shares and ADSs. </P>
<P>
<B>Brazilian Tax Considerations </B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following discussion summarizes the principal Brazilian tax consequences of the acquisition, ownership and disposition of common shares or ADSs by a holder that is not domiciled in Brazil for purposes of Brazilian
taxation and, in the case of a holder of common shares, has obtained a Certificate of Registration with respect to its investment in common shares as a U.S. dollar investment (in each case, a &#147;non-Brazilian holder&#148;). It is based on
Brazilian law as currently in effect. Any change in such law may change the consequences described below. The following discussion summarizes the principal tax consequences applicable under current Brazilian law
to non-Brazilian holders of common shares or ADSs; it does not specifically address all of the Brazilian tax considerations applicable to any particular non-Brazilian holder. Each non-Brazilian holder of common shares or ADSs should consult their
own tax advisor concerning the Brazilian tax consequences of an investment in common shares or ADSs. </P>
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<P align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A non-Brazilian holder of ADSs may withdraw them in exchange for common shares in Brazil. Pursuant to Brazilian law, the non-Brazilian holder may invest in the common shares under Resolution 2,689, of January 26, 2000,
of the National Monetary Council, or a 2,689 holder. </P>
<P>
<B><I>Taxation of Dividends and Interest on Shareholders&#146; Equity </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dividends, including dividends paid in kind, paid by us (i) to our ADR depositary in respect of the common shares underlying the ADSs or (ii) to a non-Brazilian holder in respect of common shares will generally not be
subject to income tax for distribution of profits earned as from January 1996, in accordance with Article 10 of Law No 9,249/99. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since 1996, Brazilian companies have been permitted to pay limited amounts of interest on shareholders&#146; equity to holders of equity securities and to treat those payments as a deductible expense for purposes of its
Brazilian income tax. The interest rate applied may not be higher than the TJLP, as determined by the Central Bank from time to time. The total amount distributed may not be more than the greater of (i) 50% of the net income (before taking into
account the distribution and the provision of corporate income tax but after the deduction of the provision of the social contribution on net profits); or (ii) 50% of retained earnings and profits reserves as of the date of the beginning of the
fiscal year in respect of which the payment is made. Payments of interest on shareholders&#146; equity are decided by the shareholders on the basis of the recommendations of our Board of Directors. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The purpose of the tax law change was to encourage the use of equity investments as opposed to indebtedness to finance corporate activities. As a general rule, income tax is withheld on interest payments at the rate of
15%. However, Article 8 of Law No. 9,779, dated January 20, 1999, provides that payment of income to a beneficiary residing in a country considered a tax haven under Brazilian law is subject to a withholding income tax at the rate of 25%. Tax haven
is defined as any jurisdiction that taxes income at a rate lower than 20%, as further explained below. The Brazilian tax authorities may take the position that the 25% rate applies to payments on interest on shareholders&#146; equity if the
beneficiary of those interest payments is located in a jurisdiction considered to be a tax haven. </P>
<P>
<B><I>Taxation of Gains </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gains realized outside Brazil by a non-Brazilian holder on the disposition of ADSs to another non-Brazilian holder are not currently subject to Brazilian tax. However, according to article 26 of Law No.10,833 of
December 2003, or Law No. 10,833, the disposition of assets located in Brazil by a non-Brazilian holder, whether to other non-Brazilian holder or Brazilian holders, may become subject to taxation in Brazil. Although it may be argued that we believe
that the ADSs do not fall within the definition of assets located in Brazil for the purposes of Law No. 10,833, Brazilian tax authorities may interpret these provisions differently. Nevertheless, considering the broad and unclear scope of this law,
we are unable to predict whether such understanding will ultimately prevail in the courts of Brazil. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Thus, the gain on disposition of ADSs by a non-Brazilian holder to a resident in Brazil (or even to a non-Brazilian resident in case the argument above does not prevail) may be subject to income tax in Brazil according
to the rules described below for ADSs or the tax rules applicable to common shares, as applicable. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The withdrawal of ADSs (realized by a foreign investor) in exchange for common shares is not subject to Brazilian income tax provided that the regulatory rules are appropriately observed in respect to the registration
of the investment before the Central Bank. The deposit of common shares in exchange for ADSs may be subject to Brazilian capital income tax at the rate of 15% or 25%, in case the non-Brazilian holder is located in a tax haven. Under Brazilian law,
tax haven is considered to be any jurisdiction which does not impose any income tax at a maximum rate of less than 20% and where the internal legislation imposes restrictions on disclosure of the shareholding composition or the ownership of the
investment (&#147;tax haven holder&#148;), as set forth in Law No 9,430/96, as amended by Law No 11,727/2008, if the acquisition cost of the common shares is lower than (i) the average price
per common share on a Brazilian stock exchange on which the greatest number of such shares were sold on the day of deposit, or (ii) if no common shares were sold on that day, the average price on the Brazilian stock exchange on which the greatest
number of common shares were sold in the fifteen trading sessions immediately preceding such deposit. In this case, the difference between the acquisition cost and the average price of the common shares, calculated as above, shall be considered a
capital gain.<b> </b></P>
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<P>&nbsp;</P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Thus, for purposes of taxation of gains earned in a sale or disposition of common shares carried out on a Brazilian stock exchange (which includes the transactions carried out on the organized over-the-counter market):</P>
<P align="justify">
&#149;  are exempt from income tax when assessed by a 2,689 holder and is not a tax haven holder; and </P>
<P align="justify">
&#149;  are subject to income tax at a rate of 15% in any other case. In these cases, a withholding income tax rate of 0.005% is also imposed on the sale value of the transaction and can be offset with the eventual income tax due on the capital
gain. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any other gains assessed on the disposition of the common shares that are not carried out on a Brazilian stock exchange are subject to income tax a rate of 15%, except for tax haven holder which, in this case, is
subject to income tax at a rate of 25%. In case these gains are related to transactions conducted on the Brazilian non-organized over-the-counter market with intermediation, the withholding income tax of 0.005% shall also be applicable and can be
offset with the eventual income tax due on the capital gain. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the case of redemption of securities or capital reduction by a Brazilian corporation, such as ourselves, the positive difference between the amount effectively received by the non-Brazilian holder and the
corresponding acquisition cost is treated, for tax purposes, as capital gain derived from disposition of common shares not carried out on a Brazilian stock exchange market, and is therefore subject to income tax at the rate of 15% or 25%, as the
case may be. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any exercise of preemptive rights relating to the common shares will not be subject to Brazilian income tax. Any gain on the sale or assignment of preemptive rights relating to the common shares by a non-Brazilian
holder of common shares or ADSs will be subject to Brazilian taxation at the same rate applicable to the sale or disposition of common shares. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There is no assurance that the current preferential treatment for holders of ADSs and non-Brazilian holders of common shares under Resolution 2,689 will continue in the future or that it will not be changed in the
future. Reductions in the rate of tax provided for by Brazil&#146;s tax treaties do not apply to the tax on gains realized on sales or exchange of common shares. </P>
<P>
<B><I>Tax on Financial Transactions </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Tax on Financial Transactions<I> </I>(<I>Imposto sobre Opera&ccedil;&otilde;es de Cr&eacute;dito, C&acirc;mbio e Seguro ou relativas a T&iacute;tulos ou Valores Mobili&aacute;rios</I>), or &#147;IOF&#148;, is
imposed on foreign exchange, securities, credit and insurance transactions.</P>
<P>
<I>Foreign Exchange Transactions </I></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Most of foreign exchange transactions (conversion of foreign currency in <I>reais </I>and conversion of <I>reais </I>into foreign currency) are subject to IOF at a rate of 0.38% . IOF rates may be increased by the
Brazilian government up to 25% by an executive decree (no law is required) and any increase may not be applied retroactively (it will only take effect from its publication date). Different IOF rates may apply depending on the details of each
transaction. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain foreign exchange transactions are subject to a zero percent rate (0.0%) of IOF, such as those related to conversion of <I>reais </I>into foreign currency for the payment of dividends, interest on
shareholders&#146; equity, inbound and/or outbound transfers of funds for foreign investments in the Brazilian financial and capital markets (as regulated by the National Monetary Council) and transactions associated with inflow and outflow of funds
in connection with foreign loans and financing transactions concluded as from October 23, 2008. </P>
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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IOF may also be levied on transactions involving bonds and securities, including those carried out on a Brazilian stock, futures or commodities exchanges. The applicable rate for transactions involving certain
securities is zero. The Brazilian government may increase the rate up to 1.5% of the transaction amount per day and, in such case, may not apply such increase retroactively. </P>
<P>
<I>Temporary Contribution on Financial Transactions </I></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Until December 31, 2007, generally, fund transfers in connection with financial transactions in Brazil were subject to Temporary Contribution on Financial Transaction (<I>Contribui&ccedil;&atilde;o Provis&oacute;ria
sobre a Movimenta&ccedil;&atilde;o ou Transmiss&atilde;o de Valores e de Cr&eacute;ditos e Direitos de Natureza Financeira</I>), or CPMF tax, which was levied at a rate of 0.38% on any bank account withdrawals. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;However, as of January 1, 2008, the CPMF tax is no longer in force as Brazilian senate rejected on December 13, 2007 a proposal to extend the effectiveness of the CPMF tax to December, 2011. As a consequence, the
Brazilian government increased the IOF rates as of January 3, 2008 to compensate for the loss of tax revenue caused by the extinction of the CPMF tax. </P>
<P>
<B><I>Other Brazilian Taxes </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There are no Brazilian inheritance, gift or succession taxes applicable to the ownership, transfer or disposition of common shares or ADSs by a non-Brazilian holder, except for gift and inheritance taxes which are
levied by some states of Brazil on gifts made or inheritances bestowed by individuals or entities not resident or domiciled in Brazil to individuals or entities resident or domiciled within that state in Brazil. There are no Brazilian stamp, issue,
registration or similar taxes or duties payable by holders of common shares or ADSs. </P>
<P>
<B>U.S. Federal Income Tax Considerations </B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The summary discussion below is applicable to you only if you are a &#147;U.S. Holder&#148; (as defined below) that is not domiciled in Brazil (or domiciled or resident in a tax haven jurisdiction) for purposes of
Brazilian taxation and, in the case of a holder of common shares, that has registered its investment in common shares with the Central Bank as a U.S. dollar investment. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of this discussion, a U.S. Holder is any beneficial owner of common shares or ADSs that is (i) an individual who is a citizen or resident of the United States, (ii) a corporation (or other entity taxable as
a corporation for U.S. federal income tax purposes) organized under the laws of the United States, any state thereof or the District of Columbia, (iii) an estate the income of which is subject to U.S. federal income tax without regard to its source,
or (iv) a trust if a U.S. court is able to exercise primary supervision over administration of the trust and one or more U.S. persons have authority to control all substantial decisions of the trust or if the trust validly elects under applicable
Treasury regulations to be taxed as a U.S. person. A &#147;Non-U.S. Holder&#148; is any beneficial owner of common shares or ADSs that is an individual, corporation, estate or trust who is neither a U.S. Holder nor a partnership for U.S. federal
income tax purposes. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If a partnership holds our common shares or ADSs, the tax treatment of a partner will generally depend upon the status of the partner and upon the activities of the partnership. A prospective investor who is a partner
of a partnership holding our shares should consult its own tax advisor. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In general, and taking into account the earlier assumptions, for U.S. federal income tax purposes, holders of ADRs evidencing ADSs will be treated as the owners of the common shares represented by those ADSs, and
exchanges of common shares for ADSs, and ADSs for common shares, will not be subject to U.S. federal income tax. </P>
<P>
<B><I>Taxation of Dividends </I></B></P>
<P>
<I>U.S. Holders </I></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the U.S. federal income tax laws, and subject to the passive foreign investment company (&#147;PFIC&#148;) rules discussed below, U.S. Holders will include in gross income, as dividend income, the gross amount of
any distribution paid by us (including payments considered &#147;interest&#148; in respect of stockholders&#146; equity under Brazilian
law) (before reduction for Brazilian withholding taxes) out of our current or accumulated earnings and profits (as determined for U.S. federal income tax purposes) when the distribution is actually or constructively received by the U.S. Holder, in
the case of common shares, or by our ADR Depositary, in the case of ADSs. Distributions in excess of current and accumulated earnings and profits, as determined under U.S. federal income tax principles, will be treated as a return of capital to the
extent of the U.S. Holder&#146;s adjusted tax basis in the common shares or ADSs and thereafter as capital gain. We do not intend to maintain calculations of our earnings and profits under U.S. federal income tax principles and, unless and until
such calculations are made, U.S. Holders should assume all distributions are made out of earnings and profits and constitute dividend income. </P>
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<P align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The dividend income will not be eligible for the dividends-received deduction generally allowed to U.S. corporations in respect of dividends received from other U.S. corporations. Subject to certain exceptions for
short-term and hedged positions certain non-corporate U.S. Holders (including individuals) may qualify for a maximum 15% rate of tax in respect of &#147;qualified dividend income&#148; received before January 1, 2011. Dividend income with respect to
the ADSs will be qualified dividend income, provided that, in the year that a non-corporate U.S. Holder receives the dividend, the ADSs are readily tradable on an established securities market in the United States, and we were not in the year prior
to the year in which the dividend was paid, and are not in the year in which the dividend is paid, a PFIC. Based on existing Internal Revenue Service (&#147;IRS&#148;) guidance, it is not entirely clear whether dividends received with respect to the
common shares will be treated as qualified dividend income, because the common shares are not themselves listed on a U.S. exchange. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The amount of the dividend distribution includible in gross income of a U.S. Holder will be the U.S. dollar value of the <I>real</I> payments made, determined at the spot <I>real</I>/U.S. dollar rate on the date such
dividend distribution is includible in the gross income of the U.S. Holder, regardless of whether the payment is in fact converted into U.S. dollars. Generally, any gain or loss resulting from currency exchange fluctuations during the period from
the date the dividend payment is includible in gross income to the date such payment is converted into U.S. dollars will be treated as ordinary income or loss and will not be eligible for the special tax rate applicable to qualified dividend income.
The resulting gain or loss will generally be ordinary income or loss from sources within the United States.</P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dividends received by most U.S. holders will constitute foreign source &#147;passive income&#148; for foreign tax credit purposes. Subject to limitations under U.S. federal income tax law concerning credits or
deductions for foreign income taxes and certain exceptions for short-term and hedged positions, any Brazilian income tax withheld from dividends paid by us would be treated as a foreign income tax eligible for credit against a U.S. Holder&#146;s
U.S. federal income tax liability (or at a U.S. Holder&#146;s election, may be deducted in computing taxable income if the U.S. Holder has elected to deduct all foreign income taxes paid or accrued for the relevant taxable year). The rules with
respect to foreign tax credits are complex and U.S. Holders are urged to consult their own tax advisors regarding the availability of the foreign tax credit under their particular circumstances. The U.S. Treasury Department has expressed concern
that intermediaries in connection with depositary arrangements may be taking actions that are inconsistent with the claiming of foreign tax credits by U.S. persons who are holders of depositary shares. Accordingly, investors should be aware that the
discussion above regarding the availability of foreign tax credits for Brazilian income tax withheld from dividends paid with respect to common shares represented by ADSs could be affected by future action taken by the U.S. Treasury Department. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Distributions of additional common shares to U.S. Holders with respect to their common shares or ADSs that are made as part of a pro rata distribution to all our stockholders generally will not be subject to U.S.
federal income tax. </P>
<P>
<I>Non-U.S. Holders </I></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dividends paid to a Non-U.S. Holder in respect of common shares or ADSs will not be subject to U.S. federal income tax unless those dividends are effectively connected with the conduct of a trade or business within the
United States by the Non-U.S. Holder (and are attributable to a permanent establishment maintained in the United States by the Non-U.S. Holder, if an applicable income tax treaty so requires as a condition for the Non-U.S. Holder to be subject to
U.S. taxation on a net income basis in respect of income from common shares or ADSs), in which case the Non-U.S. Holder generally will be subject to U.S. federal income tax in respect of the dividends in the same manner as a U.S. Holder. Any such
effectively connected dividends received by a corporate Non-U.S. Holder may also, under certain circumstances, be subject to an additional &#147;branch profits tax&#148; (at a 30% rate or at a reduced rate as may be specified by an applicable income
tax treaty). </P>
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<P>
<B><I>Taxation of Capital Gains </I></B></P>
<P>
<I>U.S. Holders</I> </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to the PFIC rules discussed below, upon a sale, redemption or other taxable disposition of common shares or ADSs, a U.S. Holder will recognize gain or loss for U.S. federal income tax purposes in an amount equal
to the difference between the U.S. dollar value of the amount realized (before deduction of any Brazilian tax) and the U.S. Holder&#146;s adjusted tax basis (determined in U.S. dollars) in the common shares or ADSs. Generally, the U.S. Holder&#146;s
gain or loss will be capital gain or loss. Capital gain of a non-corporate U.S. Holder that is recognized before January 1, 2011 is generally taxed at a maximum rate of 15% where the property is held for more than one year. The deductibility of
capital losses is subject to limitations under the Code. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If a Brazilian income tax is withheld on the sale, exchange or other taxable disposition of common shares or ADSs, the amount realized by a U.S. Holder will include the gross amount of the proceeds of that sale,
exchange or other taxable disposition before deduction of the Brazilian tax. Capital gain or loss, if any realized by a U.S. Holder on the sale, exchange or other taxable disposition of common shares or ADSs generally will be treated as U.S. source
gain or loss for U.S. foreign tax credit purposes. Consequently, in the case of a gain from the disposition of a share or ADS that is subject to Brazilian income tax (see &#147;Taxation &#150; Brazilian Tax Considerations &#150; Taxation of
Gains&#148;), the U.S. Holder may not be able to benefit from the foreign tax credit for that Brazilian income tax (i.e., because the gain from the disposition would be U.S. source income), unless the U.S. Holder can apply the credit against U.S.
federal income tax payable on other income from foreign sources. Alternatively, the U.S. Holder may take a deduction for the Brazilian income tax if it does not elect to claim a foreign income tax credit for any foreign taxes paid or accrued during
the taxable year. </P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Non-U.S. Holders</I>. A Non-U.S. Holder will not be subject to U.S. federal income tax in respect of gain recognized on a sale, exchange or other taxable disposition of common shares or ADSs unless: </P>
<P align="justify">
&#149;  the gain is effectively connected with a trade or business of the Non-U.S. Holder in the United States (and is attributable to a permanent establishment maintained in the United States by that Non-U.S. Holder, if an applicable income tax
treaty so requires as a condition for that Non-U.S. Holder to be subject to U.S. taxation on a net income basis in respect of gain from the sale or other disposition of the common shares or ADSs); or </P>
<P align="justify">
&#149;  in the case of a Non-U.S. Holder who is an individual, that Non-U.S. Holder is present in the United States for 183 or more days in the taxable year of the sale and certain other conditions apply. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effectively connected gains realized by a corporate Non-U.S. Holder may also, under certain circumstances, be subject to an additional branch profits tax (at a 30% rate or at a reduced rate as may be specified by an
applicable income tax treaty). </P>
<P>
<B><I>Passive Foreign Investment Companies </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based on current estimates of our gross income, gross assets and the nature of our business, we believe that common shares and ADSs should not be treated as stock of a PFIC for U.S. federal income tax purposes. There
can be no assurances in this regard, however, because the application of the relevant rules is complex and involves some uncertainty. The PFIC determination is made annually and is based on the portion of our assets and income that is characterized
as passive under the PFIC rules. Moreover, our business plans may change, which may affect the PFIC determination in future years. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In general, we will be a PFIC with respect to a U.S. Holder if, for any taxable year in which the U.S. Holder held our ADSs or common shares, either (i) at least 75% of our gross income for the taxable year is passive
income or (ii) at least 50% of the value (determined on the basis of a quarterly average) of our assets is attributable to assets that produce or are held for the production of passive income. For this purpose, passive income generally includes,
among other things, dividends, interest, royalties, rents (other than certain rents and royalties derived in the active conduct of a trade or business), annuities and gains from assets that produce passive income. If a foreign corporation owns at
least 25% by value of the stock of another corporation, the foreign corporation is treated for
purposes of the PFIC tests as owning its proportionate share of the assets of the other corporation, and as receiving directly its proportionate share of the other corporation&#146;s income. </P>
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<P align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If we are treated as a PFIC, a U.S. Holder that did not make a &#147;mark-to-market election&#148; or &#147;QEF election,&#148; each as described below, would be subject to special rules with respect to (a) any gain
realized on the sale or other disposition of common shares or ADSs and (b) any &#147;excess distribution&#148; by CSN to the U.S. Holder (generally, any distributions to the U.S. Holder in respect of the common shares or ADSs during a single taxable
year that are greater than 125% of the average annual distributions received by the U.S. Holder with respect to the common shares or ADSs during the three preceding taxable years or, if shorter, the U.S. Holder&#146;s holding period for the common
shares or ADSs). Under these rules, (i) the gain or excess distribution would be allocated ratably over the U.S. Holder&#146;s holding period for the common shares or ADSs, (ii) the amount allocated to the taxable year in which the gain or excess
distribution was realized would be taxable as ordinary income, (iii) the amount allocated to each prior year, with certain exceptions, would be subject to tax at the highest tax rate in effect for that year and (iv) the interest charge generally
applicable to underpayments of tax would be imposed in respect of the tax attributable to each such prior year. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If we are treated as a PFIC and, at any time, we invest in non-U.S. corporations that are classified as PFICs (each, a &#147;Subsidiary PFIC&#148;), U.S. Holders generally will be deemed to own, and also would be
subject to the PFIC rules with respect to, their indirect ownership interest in that Subsidiary PFIC. If we are treated as a PFIC, a U.S. Holder could incur liability for the deferred tax and interest charge described above if either (1) we receive
a distribution from, or dispose of all or part of our interest in, the Subsidiary PFIC or (2) the U.S. Holder disposes of all or part of its common shares or ADSs. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The special PFIC tax rules described above will not apply to a U.S. Holder if the U.S. Holder makes an election (i) to &#147;mark-to-market&#148; with respect to the common shares or ADSs (a &#147;mark-to-market
election&#148;) or (ii) to have us treated as a &#147;qualified electing fund&#148; (a &#147;QEF election&#148;).  The QEF election is not available to holders unless we agree to comply with certain reporting requirements and provide the required
annual information statements. The QEF and mark-to-market elections only apply to taxable years in which the U.S. Holder&#146;s common shares or ADSs are treated as stock of a PFIC. Our ADR Depositary has agreed to distribute the necessary
information to registered holders of ADSs. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A U.S. Holder may make a mark-to-market election, if the common shares or ADSs are regularly traded on a &#147;qualified exchange.&#148; Under applicable U.S. Treasury regulations, a &#147;qualified exchange&#148;
includes a national securities exchange, such as the New York Stock Exchange, that is registered with the SEC or the national market system established under the Exchange Act. Also, under applicable Treasury Regulations, PFIC securities traded on a
qualified exchange are regularly traded on such exchange for any calendar year during which such stock is traded, other than in <I>de minimis</I> quantities, on at least 15 days during each calendar quarter. We cannot assure you that the common
shares or ADSs will be eligible for a mark-to-market election. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A U.S. Holder that makes a mark-to-market election must include for each taxable year in which the U.S. Holder&#146;s common shares or ADSs are treated as shares of a PFIC, as ordinary income, an amount equal to the
excess of the fair market value of the common shares or ADSs at the close of the taxable year over the U.S. Holder&#146;s adjusted tax basis in the common shares or ADSs, and is allowed an ordinary loss for the excess, if any, of the adjusted tax
basis over the fair market value of the common shares or ADSs at the close of the taxable year, but only to the extent of the amount of previously included mark-to-market inclusions (not offset by prior mark-to-market losses). These amounts of
ordinary income will not be eligible for the favorable tax rates applicable to qualified dividend income or long-term capital gains. A U.S. Holder&#146;s tax basis in the common shares or ADSs will be adjusted to reflect any such income or loss
amounts. Although a U.S. Holder may be eligible to make a mark-to-market election with respect to its common shares or ADSs, no such election may be made with respect to the stock of any Subsidiary PFIC that such U.S. Holder is treated as owning,
because such Subsidiary PFIC stock is not marketable. Thus, the mark-to-market election will not be effective to avoid all of the adverse tax consequences described above with respect to any Subsidiary PFICs. U.S. Holders should consult their own
tax advisors regarding the availability and advisability of making a mark-to-market election with respect to their common shares of ADSs based on their particular circumstances. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A U.S. Holder that makes a QEF election will be currently taxable on its pro rata share of our ordinary earnings and net capital gain (at ordinary income and capital gain rates, respectively) for each of our taxable
years,
regardless of whether we distributed the income and gain. The U.S. Holder&#146;s basis in the common shares or ADSs will be increased to reflect taxed but undistributed income. Distributions of income that had previously been taxed will result in a
corresponding reduction of tax basis in the common shares or ADSs and will not be taxed again as a distribution to the U.S. Holder. </P>
<P align="center">
109 </P>

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<P align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, notwithstanding any election that a U.S. Holder makes with regard to the common shares or ADSs, dividends that a non-corporate U.S. Holder receives from us will not constitute qualified dividend income if
we are a PFIC either in the taxable year of the distribution or the preceding taxable year. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Special rules apply with respect to the calculation of the amount of the foreign tax credit with respect to excess distributions by a PFIC or, in certain cases, QEF inclusions. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A U.S. Holder who owns common shares or ADSs during any year that we are a PFIC must file IRS Form 8621. </P>
<P>
<B><I>Backup Withholding and Information Reporting </I></B></P>
<P>
<I>U.S. Holders</I> </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dividends paid on, and proceeds from the sale, redemption or other taxable disposition of, common shares or ADSs to a U.S. Holder generally will be subject to the information reporting and backup withholding, unless, in
the case of backup withholding, the U.S. Holder provides an accurate taxpayer identification number or in either case otherwise establishes and exemption. The amount of any backup withholding collected from a payment to a U.S. Holder will be allowed
as a credit against the U.S. Holder&#146;s U.S. federal income tax liability and may entitle the U.S. Holder to a refund, provided that certain required information is timely furnished to the IRS. </P>
<P>
<I>Non-U.S. Holders</I> </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If common shares are held by a Non-U.S. Holder through the non-U.S. office of a non-U.S. related broker or financial institution, backup withholding and information reporting generally would not be required. Information
reporting, and possibly backup withholding, may apply if the common shares are held by a Non-U.S. Holder through a U.S., or U.S.-related, broker or financial institution, or the U.S. office of a non-U.S. broker or financial institution and the
Non-U.S. Holder fails to provide appropriate information. Information reporting and backup withholding generally will apply with respect to ADSs if the Non-U.S. Holder fails to timely provide appropriate information. Non-U.S. Holders should consult
their tax advisors regarding the application of these rules. </P>
<P>
<B>10F. Dividends and Paying Agents </B></P>
<P>
Not applicable. </P>
<P>
<B>10G. Statement by Experts </B></P>
<P>
Not applicable. </P>
<P>
<B>10H. Documents on Display </B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are subject to the information requirements of the Exchange Act and accordingly file reports and other information with the SEC. Reports and other information filed by us with the SEC may be inspected and copied at
the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. You can obtain further information about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Our SEC filings are also
available to the public from the SEC&#146;s website at http://www.sec.gov. You may also inspect our reports and other information at the offices of the NYSE, 11 Wall Street, New York, New York 10005, on which our ADSs are listed. For further
information on obtaining copies of our public filings at the NYSE, you should call (212) 656-5060. We also file financial statements and other periodic reports with the CVM.</P>
<P>
<B>10I. Subsidiary Information </B></P>
<P>
Not required. </P>
<P align="center">
110 </P>


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<P>
<B>Item 11. Quantitative and Qualitative Disclosures About Market Risk </B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are exposed to a number of different market risks arising from our normal business activities. Market risk is the possibility that changes in interest rates, currency exchange rates, commodities prices will adversely
affect the value of financial assets, liabilities, expected future cash flows or earnings. We developed policies aimed at managing the volatility inherent to certain of these natural business exposures. We use financial instruments, such as
derivatives, in order to achieve the main goals established by our Board of Directors to minimize the cost of capital and maximize the returns on financial assets, while observing, as determined by our Board of Directors, parameters of credit and
risk. Derivatives are contracts whose value is derived from one or more underlying financial instruments, indices or prices defined in the contract. Only well-understood, conventional derivative instruments are used for these purposes. These include
futures and options traded on regulated exchanges and &#147;over-the-counter&#148; swaps, options and forward contracts. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to the usual market exposures that arise in our ordinary course of business, we have synthetically invested in equities via derivatives. </P>
<P>
<B>Market Risk Exposures and Market Risk Management </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our treasury department is responsible for managing our market risk exposures. We use a &#147;Risk Management System&#148; in order to: </P>
<UL>
<LI>
help us understand market risks;<br>
<br>
</LI>
<LI>
reduce the likelihood of financial losses; and<br>
<br>
</LI>
<LI>
diminish the volatility of financial results.</LI>
</UL>
<P>
The principal tools used by our treasury department are: </P>
<UL>
<LI>
  <div align="justify">&#147;Sensitivity Analysis,&#148; which measures the impact that movements in the price of different market variables such as interest rates and exchange rates will have in our earnings and cash flows.<br>
      <br>
  </div>
</LI>
<LI>
  <div align="justify">&#147;Stress Testing,&#148; which measures the worst possible loss from a set of consistent scenarios to which probabilities are not assigned. The scenarios are deliberately chosen to include extreme changes in interest and currency exchange
    rates.</div>
</LI>
</UL>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Following is a discussion of the primary market risk exposures that we face together with an analysis of the exposure to each one of them. </P>
<P>
<B>Interest Rate Risk </B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are exposed to interest rate risk on short- and long-term instruments and as a result of refinancing of fixed-rate instruments included in our consolidated debt. Consequently, as well as managing the currency and
maturity of debt, we manage interest costs through a balance between lower-cost floating rate debt, which has inherently higher risk, and more expensive, but lower risk, fixed-rate debt. We can use swaps, options and other derivatives to achieve the
desired ratio between floating-rate debt and fixed-rate debt. The desired ratio varies according to market conditions: if interest rates are relatively low, we will shift towards fixed rate debt. </P>
<P>
We are basically exposed to the following floating interest rates: </P>
<UL>
<LI>
U.S. dollar LIBOR, due to our floating rate U.S. dollar-denominated debt (usually trade-finance related), to our cash position held offshore in U.S. dollars, which is invested in short-term instruments, and<br>
<br>
</LI>
<LI>
TJLP (Long Term Interest Rate), due to <I>real</I>-denominated debt indexed to this interest rate,<br>
<br>
</LI>
<LI>
IGP-M (Brazilian inflation index), due to <I>real</I>-denominated debt indexed to this inflation index, and,<br>
</LI>
</UL>
<P align="center">
111 </P>

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<UL>
<LI>
CDI (benchmark Brazilian real overnight rate), due to our cash held in Brazil (onshore cash) and to our CDI indexed debt.</LI>
</UL>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:10px">
<TR>
	<TD></TD>
	<TD width=1%></TD>
	<TD width=9%></TD>
	<TD width=1%></TD>
	<TD width=9%></TD>
	<TD width=1%></TD>
	<TD width=9%></TD>
	<TD width=1%></TD>
	<TD width=9%></TD>
	<TD width=1%></TD>
	<TD width=9%></TD>
	<TD width=1%></TD>
	<TD width=9%></TD>
	<TD width=1%></TD>
	<TD width=9%></TD></TR>
<TR valign="bottom">
	<TD align=center><B>Exposure as of December 2007 *</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>Notional</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>2008&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>2009</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><b>2010</b>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>2011</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
  <TD align=center><B>Thereafter</B>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>U.S. dollar LIBOR </B>(amortization)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>574&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>16&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>43&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>53&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>233&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>229&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Interest (fixed part)</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>8&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>7&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>6&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>5&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>5&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>U.S. dollar fixed rate </B>(amortization)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2,820&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>573&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>215&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>97&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>73&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,862&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Interest&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>246&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>205&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>185&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>179&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,622&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>Euro fixed rate </B>(amortization)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>3&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Interest&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>Euro floating rate </B>(amortization)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Interest (fixed part)</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>Yen fixed rate </B>(amortization)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Interest&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>UMBNDES </B>(amortization)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Interest (fixed part)</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>CDI </B>(amortization)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>372&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>5&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>320&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>340&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Interest (fixed part)</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>IGPM </B>(amortization)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>186&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>178&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>13&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Interest (fixed part)</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>18&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>TJLP </B>(amortization)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>308&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>45&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>25&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>47&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>47&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>41&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Interest (fixed part)</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>12&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>11&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>10&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>7&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>BRL fixed rates</B>)</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD></TR>
<TR>
	<TD colspan=15>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=center><B>Exposure as of December 2008*</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>Notional</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>2008&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>2009&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>2010&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>2011&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>2012&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>Thereafter</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>US dollar LIBOR </B>(amortization)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>619&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>47&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>56&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>177&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>204&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>134&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Interest (fixed part)</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>9&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>7&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>6&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>3&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>US dollar fixed rate </B>(amortization)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>3,287&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,155&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>197&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>73&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>54&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,808&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Interest&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>254&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>195&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>179&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>175&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2,802&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>Euro fixed rate </B>(amortization)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Interest&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>Euro floating rate </B>(amortization)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>interest (fixed part)</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>Yen fixed rate </B>(amortization)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Interest&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>UMBNDES </B>(amortization)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>interest (fixed part)</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>CDI </B>(amortization)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>324&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>25&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>257&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>43&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>interest (fixed part)</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>IGPM </B>(amortization)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>29&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>4&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>4&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>4&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>4&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>11&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>interest (fixed part)</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>TJLP </B>(amortization)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>432&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>87&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>69&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>66&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>77&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>133&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>interest (fixed part)</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>14&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>12&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>9&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>6&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>5&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>BRL fixed rate</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>0&nbsp;</TD></TR>
</TABLE>
<BR>
<P align="justify">
* All figures in U.S. dollars. Because we primarily use Brazilian GAAP controls, the numbers shown in the table do not add up to 100% of our debt and might differ, within some margin, from the numbers shown in this report.</P>
<P>
Our cash and cash equivalent instruments were as follows: </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD></TD>
	<TD width=2%></TD>
	<TD width=20%></TD>
	<TD width=2%></TD>
	<TD width=20%></TD>
	<TD width=2%></TD>
	<TD width=20%></TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>December 2007</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>December 2008</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>Exposure</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD colspan="4" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Cash in <I>reais</I>:&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>722&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>698&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>CDI&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Cash in U.S. dollars:&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>491&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>2,844&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>LIBOR&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD colspan="6" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE>
<BR>
<P>
The table below shows the average interest rate and the average life of our debt.</P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:10px">
<TR>
	<TD></TD>
	<TD width=1%></TD>
	<TD width=15%></TD>
	<TD width=1%></TD>
	<TD width=20%></TD>
	<TD width=1%></TD>
	<TD width=15%></TD>
	<TD width=1%></TD>
	<TD width=20%></TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD colspan=3 align=center valign="middle"><B>December 2007</B>&nbsp;</TD>
	<TD align="center" valign="middle">&nbsp;</TD>
  <TD colspan=3 align=center valign="middle"><B>December 2008</B>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center valign="middle"><B>Average rate %</B>&nbsp;</TD>
	<TD align="center" valign="middle">&nbsp;</TD>
	<TD align=center valign="middle"><B>Average life</B>&nbsp;</TD>
	<TD align="center" valign="middle">&nbsp;</TD>
	<TD align=center valign="middle"><B>Average rate %</B>&nbsp;</TD>
	<TD align="center" valign="middle">&nbsp;</TD>
  <TD align=center valign="middle"><B>Average life</B>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>U.S. dollar LIBOR*&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1.30&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>4.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right> 1.35&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>3.28&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>U.S. dollar fixed rate&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>8.88&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>13.44 (with perpetual&nbsp;bond)</TD>
	<TD>&nbsp;</TD>
	<TD align=right> 7.83&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>11.43 (with perpetual bond)</TD></TR>
<TR valign="bottom">
	<TD align=left>Euro fixed rate&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>5.67&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2.15&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right> &nbsp;5.74&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>2.54&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Euro floating rate*&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>N/A&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>N/A&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>  N/A&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>N/A&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Yen fixed rate&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>N/A&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>N/A&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>&nbsp;N/A&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>N/A&nbsp;</TD></TR>
  <TR valign="bottom">
    <TD align=left>UMBNDES*&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>3.50&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>2.04&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>4.55&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>0.72&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>CDI&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>103.69 of CDI&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>4.05&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>103.83 of CDI&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>3.21&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>IGPM*&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>9.56&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>1.23&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>7.11&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>3.71&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>TJLP*&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2.52&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>3.57&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>2.54&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>3.07&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD colspan=9 align=left>* In these cases, figures shown in the table represents the average spread.&nbsp;</TD>
  </TR>
</TABLE>

<P align="center">
112 </P>

<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_113"></A><p align=right><a href="#topdraft">Table of Contents</a></p><BR>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During 2008, our decision was to hedge part of our U.S. dollar fixed-rate exposure due to the volatility of U.S. interest rates. We maintained our policy from the previous year of keeping most of our position in OTC
swaps, thus avoiding margin requirements and rollover transaction costs at BM&amp;F, the Brazilian derivatives exchange. The duration of our U.S. dollar fixed-rate derivatives decreased from 178 days as of December 31, 2007 to 103 days as of
December 31, 2008 (see tables below). </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:10px">
<TR>
	<TD></TD>
	<TD width=2%></TD>
	<TD width=22%></TD>
	<TD width=1%></TD>
	<TD width=16%></TD>
	<TD width=1%></TD>
	<TD width=16%></TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>Notional</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>Average interest rate</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>Average maturity</B>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=center><B>As of December 2008</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>(in U.S. dollar million,</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>(U.S. dollar)</B></TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>(days)</B></TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>unless otherwise indicated)</B></TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD colspan="6" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=center>Swaps (U.S. dollar fixed - rate versus CDI and equity swaps)</TD>
	<TD>&nbsp;</TD>
	<TD align=center>1,530&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>3.4948&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>103&nbsp;</TD></TR>
<TR valign="bottom">
  <TD align=center>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=center>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=center>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=center>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD colspan="4" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>Notional</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>Average interest rate</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>Average maturity</B>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=center><B>As of December 2007</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>(in U.S. dollar million,</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>(U.S. dollar)</B></TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>(days)</B></TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>unless otherwise indicated)</B></TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD colspan="4" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Swaps (U.S. dollar fixed - rate versus CDI and equity swaps)</TD>
	<TD>&nbsp;</TD>
	<TD align=center>1,360&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>5.9323%&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>178&nbsp;</TD></TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=center>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=center>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=center>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
	<TD colspan="6" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>* daily reset&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
</TABLE>
<BR>
<P>
<B>Foreign Currency Exchange Rate Risk </B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fluctuations in exchange rates can have significant effects on our operating results, which in filings with the SEC are presented in U.S. dollars. Therefore, exchange rate fluctuations affect the values of our
<I>real</I>-denominated assets, the carrying and repayment costs of our <I>real</I>-denominated financial liabilities, our <I>real</I>-denominated production costs, the cost of <I>real</I>-denominated capital items and the prices we receive in the
Brazilian market for our finished steel products. We attempt to manage our net foreign exchange rate exposures, trying to balance our non-<I>real</I> denominated assets with our non-<I>real</I> denominated liabilities. We use derivative instruments
to match our non-<I>real</I> denominated assets to our non-<I>real</I> denominated liabilities, but at any given time we may still have significant foreign currency exchange rate risk exposure. </P>
<P>
Our exposure to U.S. dollar is due to the following contract categories: </P>
<UL>
<LI>
U.S. dollar-denominated debt;<br>
<br>
</LI>
<LI>
offshore cash;<br>
<br>
</LI>
<LI>
currency derivatives (in the case of options, we use the delta as a measure of exposure);<br>
<br>
</LI>
<LI>
U.S. dollar indexed accounts payable and receivable (usually related to international trade, i.e., imports and exports); and<br>
<br>
</LI>
<LI>
offshore investments: assets that we bought offshore and that are denominated in U.S. dollars on our balance sheet.</LI>
</UL>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD></TD>
	<TD width=2%></TD>
	<TD width=20%></TD>
	<TD width=2%></TD>
	<TD width=20%></TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>December 2007</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
  <TD align=center><B>December 2008</B>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD><B>U.S. dollar Liabilities</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>4,044&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>4,460&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;fixed rate&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2,820&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>3,287&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;floating rate&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>574&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>619&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;UMBNDES*&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>46&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>-&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;trade accounts payable&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>604&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>554&nbsp;</TD>
</TR>
<TR>
	<TD colspan=5>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>U.S. dollar Assets</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2,574&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>4,434&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;offshore cash and cash equivalents&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>491&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2,844&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;derivatives (swaps and NDFs)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,360&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,530&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;trade accounts receivable&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>252&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>60&nbsp;</TD>
</TR>
  <TR valign="bottom">
    <TD align=left>offshore investments (net of cash)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>471&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Total U.S. dollar Exposure</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>(1,470)</B></TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>26</B>&nbsp;</TD>
  </TR>
</TABLE>
<div>________________ <br>
  * UMBNDES is an index calculated and published by BNDES (Brazilian development bank), which reflects the movement of a currency basket against the Brazilian real. We consider UMBNDES debt as U.S. dollar indexed exposure because of the absolutely
  high correlation between them. </div>
<P align="center">
113 </P>

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<H5 align="left" style="page-break-before:always"></H5>
<A name="page_114"></A><p align=right><a href="#topdraft">Table of Contents</a></p><BR>
<P><B><I>Offshore investments </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have capitalized our offshore subsidiaries domiciled in U.S. dollar-based countries with equity investments, and those investments are accounted as U.S. dollar investments. The result is that they work as assets
indexed to U.S. dollar from an earnings perspective. </P>
<P>
<B>Commodity Price Risk </B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fluctuations in the price of steel and some of the commodities used in producing steel, such as zinc, aluminum, tin, coal, coke and energy, can have an impact on our earnings. Currently, we are not hedging our exposure
to commodity prices. Our biggest commodity price exposure is the price of steel and coal, but there are no liquid instruments that provide an effective hedge against their price fluctuations. </P>
<P>
<B>Equity Risk</B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2003, we entered into certain equity swap agreements referenced to our shares. These agreements were originally entered into with POBT Bank and Trust Limited (an affiliate of Banco Pactual), which later assigned the
agreements to UBS Symmetry Fund, UBS Strategy Fund and Fruhling Fund. In 2008, these agreements were assigned to Goldman Sachs International. Our current equity swap agreement with Goldman Sachs International will expire on September 10, 2009,
unless it is renewed by us. The agreements state that the counterparty must pay us the cash dividends and final price return, if positive, on 29,684,400 CSN ADRs and we must pay the counterparty a rate of USD three-month Libor plus 0.75% per annum
on the initial price of this number of ADRs and the final price return, if negative, on this number of ADRs. The rationale for these transactions is that equities historically have yielded higher long-term returns than fixed-income securities, hence
tending to offset CSN&#146;s long-term debt servicing costs. From September 5 to December 31, 2008, we recorded a loss in connection with these equity swap agreements in the amount of US&#36;685 million, which was partially offset by a gain of
US&#36;155 million recorded in connection with an equity swap that expired on September 2008, for a total loss of US&#36;530 million. In the event of further decreases in the trading price of our shares, the amount payable by us under these swap
agreements may be significant and materially and adversely affect us. See &#147;Item 3D. Risk Factors&#151;Risks Relating to our Common Shares and ADSs&#151;We are exposed to devaluation of our shares as result of certain equity swap agreements and
our pension plan assets,&#148; &#147;Item 5A&#151;Operating Results,&#148; &#147;Item 11&#151;Quantitative and Qualitative Disclosures About Market Risk&#151;Equity Risk,&#148; and Note 21 to our consolidated financial statements contained in
&#147;Item 18. Financial Statements.&#148; </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We entered into these transactions in 2003 and rolled the original swaps over on an annual basis since then. The swap agreements currently in force are scheduled to expire in September 2009. The actual cash amount
realized on termination of these swap agreements will depend on the trading price of our ADRs during a final averaging period or, if applicable, the terms of any negotiated close out of the swap agreements.</P>
<P align="justify">
The contracts outstanding at December 31, 2007 which were settled in September 2008 were as follows: </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD width=15%></TD>
	<TD width=2%></TD>
	<TD width=15%></TD>
	<TD width=2%></TD>
	<TD width=15%></TD>
	<TD width=2%></TD>
	<TD width=15%></TD>
	<TD width=2%></TD>
	<TD width=15%></TD>
	<TD width=2%></TD>
	<TD width=15%></TD></TR>
<TR valign="bottom">
	<TD align=center><B>Issued</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>Maturity</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>Notional</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=center><B>date</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>date</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>amount</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>Receivable</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>Payable</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center><B>Market value</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
	<TD colspan=11>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=center>04/07/03&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>09/05/08&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>35.8&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>644.9&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>(52.6)</TD>
	<TD>&nbsp;</TD>
	<TD align=center>591.5&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=center>04/09/03&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>09/05/08&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>5.6&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>100.5&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>(8.3)</TD>
	<TD>&nbsp;</TD>
	<TD align=center>92.2&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=center>04/10/03&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>09/05/08&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>2.0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>36.1&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>(2.9)</TD>
	<TD>&nbsp;</TD>
	<TD align=center>33.2&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=center>04/11/03&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>09/05/08&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>1.0&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>18.6&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>(1.5)</TD>
	<TD>&nbsp;</TD>
	<TD align=center>17.1&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=center>04/28/03&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>09/05/08&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>1.1&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>17.8&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>(1.6)</TD>
	<TD>&nbsp;</TD>
	<TD align=center>16.2&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=center>04/30/03&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>09/05/08&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>0.1&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>1.3&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>(0.1)</TD>
	<TD>&nbsp;</TD>
	<TD align=center>1.2&nbsp;</TD></TR>
  <TR valign="bottom">
    <TD align=center>05/14/03&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>09/05/08&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>0.2&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>3.3&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>(0.3)</TD>
    <TD>&nbsp;</TD>
    <TD align=center>3.0&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=center>05/15/03&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>09/05/08&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>0.4&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>7.5&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>(0.6)</TD>
    <TD>&nbsp;</TD>
    <TD align=center>6.9&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=center>05/19/03&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>09/05/08&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>1.0&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>19.0&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>(1.5)</TD>
    <TD>&nbsp;</TD>
    <TD align=center>17.5&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=center>05/20/03&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>09/05/08&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>0.3&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>4.9&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>(0.4)</TD>
    <TD>&nbsp;</TD>
    <TD align=center>4.5&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=center>05/21/03&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>09/05/08&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>0.4&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>8.1&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>(0.6)</TD>
    <TD>&nbsp;</TD>
    <TD align=center>7.5&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=center>05/22/03&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>09/05/08&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>0.3&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>6.4&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>(0.5)</TD>
    <TD>&nbsp;</TD>
    <TD align=center>5.9&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=center>05/28/03&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>09/05/08&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>0.4&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>8.3&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>(0.6)</TD>
    <TD>&nbsp;</TD>
    <TD align=center>7.7&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=center>05/29/03&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>09/05/08&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>0.4&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>7.8&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>(0.6)</TD>
    <TD>&nbsp;</TD>
    <TD align=center>7.2&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=center>06/05/03&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>09/05/08&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>0.1&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>1.8&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>(0.1)</TD>
    <TD>&nbsp;</TD>
    <TD align=center>1.7&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=center><B>Total</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center><B>49.1</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center><B>886.3</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center><B>(72.2)</B></TD>
    <TD>&nbsp;</TD>
    <TD align=center><B>813.3</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>

<P align="center">
114 </P>

<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_115"></A><p align=right><a href="#topdraft">Table of Contents</a></p><BR>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These swap agreements are related to 29,684,400 of our ADRs and are intended to enhance the return of our financial assets by adding exposure to equity securities that historically have yielded higher long-term returns
than fixed income assets, hence diminishing the impact of the cost of carry of our long-term debt in the net consolidated financial expenses. The maturity of these agreements was on September 5, 2008 and the financial settlement was on September 8,
2008 resulting in proceeds of US&#36;1,006 million. </P>
<P align="justify">
On September 5, 2008, we entered into a new equity swap agreement, as described below: </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD width=15%></TD>
	<TD width=2%></TD>
	<TD width=15%></TD>
	<TD width=2%></TD>
	<TD width=15%></TD>
	<TD width=2%></TD>
	<TD width=15%></TD>
	<TD width=2%></TD>
	<TD width=15%></TD>
	<TD width=2%></TD>
	<TD width=15%></TD></TR>
<TR valign="bottom">

	<TD align=center><B>Issued</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>Maturity</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>Notional</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
  <TD align=center><B>Market</B>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=center> &nbsp;<B>date</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center> &nbsp; &nbsp;<B>date</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>amount</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>Receivable</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>Payable</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
  <TD align=center><B>value</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center><B>2008</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center> &nbsp;<B>2008</B>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
  <TD align=center><B>2008</B>&nbsp;</TD></TR>
<TR>
	<TD colspan=11>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=center>09/05/08&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center> &nbsp;09/10/09&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>1,050.8&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>&nbsp;380.2&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center> &nbsp;(1,065.4)</TD>
	<TD align="center">&nbsp;</TD>
  <TD align=center> &nbsp; &nbsp;(685.1)</TD>
</TR>
</TABLE><BR>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with this equity swap agreement, we have deposited a guarantee margin for the benefit of our counterparty. As of December 31, 2008, the deposited amount totaled US&#36;1,059 million, bearing an interest
rate equivalent to the FedFund rate. </P>
<P align="justify"><b>Sensitivity analysis</b></P>
<P align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The economic environment in which we operate determines the main factors taken into consideration to establish risk scenarios.  In the Brazilian economic environment exchange rate variation is the most notable market risk.</P>
<P align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The real exchange rate has significant volatility.  Between 1999 and 2008 the real exchange rate had an average annual volatility of 22% and in four years during this period volatility was of approximately 50%, including 2008.  </P>
<P align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To develop our sensitivity analysis we analyze three different scenarios of exchange rate variation.  The first scenario reflects our projection, at the end of the fiscal year, and is the scenario we consider more likely.  The second scenario reflects a moderate adverse variation based on historic figures and the third scenario provides for a significantly adverse scenario based on exceptional but plausible economic shocks.  </P>
<P align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based on the foreign exchange rate of December 31, 2008 of R$2.3370 per US$ 1.00, adjustments to the swap agreement amounts were estimated for three scenarios: scenario 1: rate of R$2.3580 per US$ 1.00; scenario 2: (25% depreciation) rate of R$1.7528 per US$ 1.00; scenario 3: (50% depreciation) rate of R$1.1685 per US$ 1.00. </P>
<table border="0" width="100%" cellspacing="0" cellpadding="0" style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <tr>
    <td></td>
    <td width="2%"></td>
    <td width="15%"></td>
    <td width="2%"></td>
    <td width="10%"></td>
    <td width="2%"></td>
    <td width="10%"></td>
    <td width="2%"></td>
    <td width="10%"></td>
    <td width="2%"></td>
    <td width="10%"></td>
  </tr>
  <tr valign="bottom">
    <td align="center"><b>December    31, 2008<br>
        <i>(In    thousand of US$,<br>
      except    for exchange rates)</i></b></td>
    <td align="center">&nbsp;</td>
    <td align="center"><b>Risk </b> </td>
    <td align="center">&nbsp;</td>
    <td align="center"><b>Scenario </b> </td>
    <td align="center">&nbsp;</td>
    <td align="center"><b>Reference <br>
      Value</b></td>
    <td align="center">&nbsp;</td>
    <td align="center"><b>Exchange<br>
      Rates </b></td>
    <td align="center">&nbsp;</td>
    <td align="center"><b>Additional <br>
        Results </b></td>
  </tr>
  <tr valign="bottom" style="font-size: 1px">
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">1,530,000 </td>
    <td align="center">&nbsp;</td>
    <td align="center">2.3370</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">1</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">2.3580</td>
    <td align="center">&nbsp;</td>
    <td align="center">13,748</td>
  </tr>
  <tr valign="bottom">
    <td align="center"><div align="justify">Foreign Exchange swaps</div></td>
    <td align="center">&nbsp;</td>
    <td align="center"><div align="justify">Dollar devaluation</div></td>
    <td align="center">&nbsp;</td>
    <td align="center">2</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">1.7528</td>
    <td align="center">&nbsp;</td>
    <td align="center">(382,500)</td>
  </tr>
  <tr valign="bottom">
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">3</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">1.1685</td>
    <td align="center">&nbsp;</td>
    <td align="center">(765,001)</td>
  </tr>
  <tr valign="bottom">
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">712</td>
    <td align="center">&nbsp;</td>
    <td align="center">2.3370</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">1</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">2.3580</td>
    <td align="center">&nbsp;</td>
    <td align="center">6</td>
  </tr>
  <tr valign="bottom">
    <td align="center"><div align="justify">Interest Swap CDI x Libor</div></td>
    <td align="center">&nbsp;</td>
    <td align="center"><div align="justify">Dollar devaluation&nbsp;</div></td>
    <td align="center">&nbsp;</td>
    <td align="center">2</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">1.7528</td>
    <td align="center">&nbsp;</td>
    <td align="center">(178)</td>
  </tr>
  <tr valign="bottom">
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">3</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">1.1685</td>
    <td align="center">&nbsp;</td>
    <td align="center">(356)</td>
  </tr>
</table>
(*)  Source: Future Dollar closing rate on February 28, 2009 and December 30,  2008.
<P align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The scenarios of devaluation of the real versus the U.S. Dollar would increase both losses in derivative transactions and offsetting gains in the underlying hedged exposure, as expected.&nbsp;</P>
<P align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based on the ADR price of US$ 12.81 as of December 31, 2008 and considering the historical return correlation between the U.S. dollar and the ADRs, adjustments to the equity swap derivative contract amount were estimated for three ADR price scenarios: scenario 1: ADR quotation at US$ 20.00; scenario 2: ADR quotation at US$ 9.68; and scenario 3: ADR quotation at US$ 6.46.</P>
<P align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The evaluated scenario follows the perspective of the worldwide economic recovery and the expected increasing appreciation of the quotations of the Company's securities.
  &nbsp;</P>
<table border="0" width="100%" cellspacing="0" cellpadding="0" style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <tr>
    <td></td>
    <td width="2%"></td>
    <td width="15%"></td>
    <td width="2%"></td>
    <td width="10%"></td>
    <td width="2%"></td>
    <td width="10%"></td>
    <td width="2%"></td>
    <td width="10%"></td>
    <td width="2%"></td>
    <td width="10%"></td>
  </tr>
  <tr valign="bottom">
    <td align="center"><b>December    31, 2008<br>
        <i>(In    thousand of US$,<br>
      except    for ADR price and number)</i></b></td>
    <td align="center">&nbsp;</td>
    <td align="center"><b>Risk </b> </td>
    <td align="center">&nbsp;</td>
    <td align="center"><b>Scenario </b> </td>
    <td align="center">&nbsp;</td>
    <td align="center"><b>ADR
Price
</b></td>
    <td align="center">&nbsp;</td>
    <td align="center"><b>ADR Reference
Value
</b></td>
    <td align="center">&nbsp;</td>
    <td align="center"><b>Additional <br>
        Results </b></td>
  </tr>
  <tr valign="bottom" style="font-size: 1px">
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">12.81</td>
    <td align="center">&nbsp;</td>
    <td align="center">29,684,400</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">1</td>
    <td align="center">&nbsp;</td>
    <td align="center">20.00</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">210,462</td>
  </tr>
  <tr valign="bottom">
    <td align="center"><div align="justify">Equity swaps</div></td>
    <td align="center">&nbsp;</td>
    <td align="center"><div align="justify">Price devaluation
and dollar recovery
</div></td>
    <td align="center">&nbsp;</td>
    <td align="center">2</td>
    <td align="center">&nbsp;</td>
    <td align="center">9.68</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">(95,805)</td>
  </tr>
  <tr valign="bottom">
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">3</td>
    <td align="center">&nbsp;</td>
    <td align="center">6.46</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">(191,613)</td>
  </tr>
</table>
<P align="justify"><B>Item 12. Description of Securities Other Than Equity Securities </B></P>
<P>
Not applicable. </P>
<P>
<B>Item 13. Defaults, Dividend Arrearages and Delinquencies </B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At our Annual Shareholders&#146; Meeting of April 30, 2009, our shareholders approved the payment of dividends and interest on shareholders&#146; equity relating to 2008, in the total amount of US&#36;868.6 million
(US&#36;738.2 million as dividends and US&#36;130.4 million as interest on shareholders&#146; equity).</P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The total amount of approved dividends include dividends paid in advance on November 27, 2008, in the amount of US&#36;70.6 million, that had already been approved by our Board of Directors on August 12, 2008, and
dividends that had already been approved by our Board of Directors on March 24, 2009 in the amount of US&#36;667.6 million.</P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Soon after the announcement of the payment of such dividends in the amount of US&#36;667.6 million, a court order was issued by a trial state tax court in the State of Rio de Janeiro in connection with tax claims
related to IPI premium credits on exports that we have recorded, in order to block approximately US&#36;354.2 million of our funds. For this reason, the Company paid its shareholders on April 2, 2009 the amount of funds that had not been blocked of
approximately US&#36;313.4 million. We are taking all measures to unblock our funds. Nevertheless, aiming at the preservation of our shareholders&#146; rights, we decided to pay on June 26, 2009, the remaining dividends of approximately US&#36;354.2
million. </P>
<P>
The US&#36;130.4 million as interest on shareholders&#146; equity were paid on May 11, 2009. </P>
<P align="center">
115 </P>

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<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For further information, see &#147;Item 5A. Operating Results&#151;Results of Operations&#151;Year 2008 Compared to Year 2007&#151;Disputed Taxes Payable.&#148; </P>
<P>
<B>Item 14. Material Modification to the Rights of Security Holders and Use of Proceeds</B></P>
<P>
None. </P>
<P align="center">&nbsp;<B>PART II </B></P>
<P><B>Item 15. Controls and Procedures </B></P>
<P><B>Disclosure Controls and Procedures </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our chief executive officer and our chief financial officer, after evaluating together with our management the effectiveness of our disclosure controls and procedures (as defined in the U.S. Securities Exchange Act of 1934 under Rule 13a-15(e)) have concluded that our disclosure controls and procedures were not effective because of the material weakness in internal control over financial reporting described below, to ensure that material information relating to us was made known to them by others within our company, as of December 31, 2008, the end of the period covered by this annual report. Based on that evaluation, our chief executive officer and chief financial officer concluded that the design and operation of our disclosure controls and procedures are ineffective to ensure that information required to be disclosed in the reports that we file and submit under the Exchange Act is (1) recorded, processed, summarized and reported within the time periods specified in SEC rules



and forms, and (2) collected and communicated to management, including our chief executive officer and chief financial officer, to allow timely decisions regarding required disclosure as of the end of our most recent fiscal year.</P>
<P>
<B>Management&#146;s annual report on internal control over financial reporting</B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our management is responsible for establishing and maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting as defined in rules 13 a-15 (f) under the U.S. Securities Exchange Act of 1934, as amended. Our internal control over financial reporting is designed to provide reasonable assurance to our management and Board of Directors regarding the preparation and presentation of published financial statements.</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Because of its inherent limitations, internal control over financial reporting may not prevent or detect material misstatements on a timely basis. Therefore even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management assessed  the effectiveness of the Company&rsquo;s internal control over financial reporting as  of December 31, 2008 based on the criteria established in &ldquo;Internal Control &ndash;  Integrated Framework&rdquo; issued by the Committee of Sponsoring Organizations &ndash;  COSO &ndash; of the Treadway Commission.</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company's management is committed to the continuous improvement of our internal controls over financial reporting. In 2008, the Company's management identified a deficiency in the process of identification, accounting and disclosure of four offshore dormant subsidiaries (Arame Corporation, International Charitable, TdBB and International Investment Fund (I.I.F). These companies were formed in 2001, 2001, 1997 and 1999, respectively, and our equity interest in these four subsidiaries had not been recorded in our consolidated financial statements in prior fiscal years. </P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Arame Corporation, International Charitable and TdBB do not have any assets or liabilities. I.I.F is not an operational company, but owns an equity interest in a Brazilian operational railroad company (MRS Log&#237;stica S.A.), recorded through the equity investment method.</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This deficiency resulted in a material weakness as of December 31, 2008. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected on a timely basis. </P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The existing internal controls allowed the Company's management to detect the deficiency during 2008 and the necessary adjustments were timely recorded in our financial statements for fiscal year 2008. Therefore, our consolidated financial statement for 2008 already included results of these subsidiaries.</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, we assessed the impact of these unrecorded adjustments on prior years and identified that equity was understated in the amount of US$ 29.8 million during fiscal years 1999 through 2007, which represented 0.51% of the Company's accumulated net income for the period (1999-2007), as follows:
  &nbsp;</P>
<div align="center"></div>
<div align="center">
  <table border="0" width="50%" cellspacing="0" cellpadding="0" style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
    <tr>
      <td></td>
      <td width="2%"></td>
      <td width="49%"></td>
    </tr>
    <tr valign="bottom">
      <td align="center"><strong>Year</strong></td>
      <td align="center">&nbsp;</td>
      <td align="center"><b>Unrecorded
        Adjustments <br>
        <i> (In millions of US$) </i></b> </td>
    </tr>
    <tr valign="bottom" style="font-size: 1px">
      <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
      <td></td>
      <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
    </tr>
    <tr valign="bottom">
      <td align="center">1999</td>
      <td align="center">&nbsp;</td>
      <td align="center">(0.3)</td>
    </tr>
    <tr valign="bottom">
      <td align="center">2000</td>
      <td align="center">&nbsp;</td>
      <td align="center">1.4</td>
    </tr>
    <tr valign="bottom">
      <td align="center"><div align="center">2001</div></td>
      <td align="center">&nbsp;</td>
      <td align="center"><div align="center">(1.9)</div></td>
    </tr>
    <tr valign="bottom">
      <td align="center">2002</td>
      <td align="center">&nbsp;</td>
      <td align="center">(3.2)</td>
    </tr>
    <tr valign="bottom">
      <td align="center">2003</td>
      <td align="center">&nbsp;</td>
      <td align="center">1.8</td>
    </tr>
    <tr valign="bottom">
      <td align="center">2004</td>
      <td align="center">&nbsp;</td>
      <td align="center">7.7</td>
    </tr>
    <tr valign="bottom">
      <td align="center">2005</td>
      <td align="center">&nbsp;</td>
      <td align="center">8.2</td>
    </tr>
    <tr valign="bottom">
      <td align="center">2006</td>
      <td align="center">&nbsp;</td>
      <td align="center">8.1</td>
    </tr>
    <tr valign="bottom">
      <td align="center">2007</td>
      <td align="center">&nbsp;</td>
      <td align="center">8.0</td>
    </tr>
    <tr valign="bottom">
      <td align="center"><b>Total</b></td>
      <td align="center">&nbsp;</td>
      <td align="center"><b>29.8</b></td>
    </tr>
  </table>
</div>
<div align="center"></div>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We concluded that these adjustments were not material and, therefore, it was not necessary to restate the consolidated financial statements for those years. Nonetheless we believed it consisted of a material weakness in 2008 due to the fact that the non-identification and report of certain subsidiaries in our consolidated financial statements could have potentially had a material impact.</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Once the deficiency was identified, management immediately informed our Audit Committee and our independent auditors. The Audit Committee conducted an independent evaluation and concurred that the financial effect related to this deficiency had no material impact on our consolidated financial statements.
  &nbsp;</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In order to prevent the occurrence of such deficiencies, during fiscal year 2009, our management took the necessary remediation measures to ensure accuracy and effectiveness of our monitoring controls over the process of identification, accounting and disclosure of subsidiaries. These measures included:</P>
<ul>
  <li>Definition of policies (including corporate approvals) concerning the incorporation, acquisitions of interests, modifications in the capital structure, operations and liquidation of branches and subsidiaries. These policies establish parameters for the analysis, approval and consolidation and flow of information regarding these entities.</li>
  <li>Centralization in the International Accounting Department of the reconciliation, consolidation and reporting activities regarding the subsidiaries.</li>
  <li>Liquidation of dormant companies.</li>
  <li>Implementation of the Financial Accounting (FI) and Materials Managements (MM) SAP System Modules for integrated subsidiaries (i.e. entities that operate as an extension of the parent company).</li>
</ul>
<P>
<B>Attestation Report of the Independent Registered Public Accounting Firm </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the report of KPMG Auditores Independentes, our independent registered public accounting firm, dated March 17, 2010, on the effectiveness of our internal control over financial reporting as of December 31, 2008, see &ldquo;Item 18. Financial Statements&rdquo;.</P>
<P>
<B>Changes in internal control over financial reporting </B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as disclosed in the following paragraph, there was no change in our internal control over financial reporting that occurred in the period covered by this annual report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company's management is committed to the continuous improvement of our internal controls over financial reporting. In 2008, the Company's management identified a deficiency in the process of identification, accounting and disclosure of four offshore dormant subsidiaries (Arame Corporation, International Charitable, TdBB and International Investment Fund (I.I.F). These companies were formed in 2001, 2001, 1997 and 1999, respectively, and our equity interest in these four subsidiaries had not been recorded in our consolidated financial statements in prior fiscal years.</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In past years, monitoring controls over lawsuits substantially related to labor and civil claims, including the estimate and recording of provisions for contingencies relating to such lawsuits, was performed through the use of certain spreadsheets which were manually fed and monitored by personnel who had been in charge of such controls for several years. In 2007, the Company underwent a high turnover in its legal department team and key personnel in charge of the monitoring controls over the completeness and accuracy of lawsuits and related provisions for contingencies. The lapse of time it took for the Company to replace such key personnel and for the new professionals hired to become familiar with all lawsuits and adequately perform relevant monitoring controls resulted in a material weakness as of December 31, 2007. Since the insufficient controls only affected lawsuits involving non-material amounts, the material weakness did not result in any audit adjustment that would


 have required restatement of our consolidated financial statements for 2007. Since the replacement of the abovementioned key personnel occurred in 2007, the 2006 monitoring controls were not affected and there was no impact on our consolidated financial statements for that year.</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2008, in order to remediate the material weakness identified as of December 31, 2007, we restructured our legal department. The Company hired a general counsel who divided the department into four groups. Four senior assistant general counsel were brought in and new lawyers, paralegals and trainees were also hired to strengthen the team. CSN also initiated the development of electronic controls of lawsuits and electronic management of files, replacing the manual spreadsheets, through the implementation of specialized software. These actions (i) improved the controls over lawsuits and judicial processes; (ii) allowed the accurate estimation and recordation of provisions for contingencies; and (iii) ensured a smooth transition in case the personnel in charge of such controls leave the company, since historical information on lawsuits is well organized and can be easily accessed by new professionals.</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This material weakness identified for the year ended December 31, 2007 and concerning oversight and supervisory review of lawsuits was remediated during 2008 and no longer is a material weakness.</P>
<P>
<B>Item 16. [Reserved] </B></P>
<P>
<B>16A. Audit Committee Financial Expert </B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;After reviewing the qualifications of the members of our Audit Committee, our Board of Directors has determined that all three members of our Audit Committee qualify as an &#147;audit committee financial expert,&#148;
as defined by the SEC.  In addition, all of the members of out Audit Committee meet the applicable independence requirements both under Brazilian Corporate Law and under the NYSE rules.</P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Audit Committee is permanently assisted by a consultant, who renders financial and consulting services, among others, to the members of our Audit Committee.</P>
<P>
<B>16B. Code of Ethics </B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have adopted a Code of Ethics in 1998, reinforcing our ethical standards and values that apply to all of our employees, including executive officers and directors. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Given its importance, copies of the Code of Ethics were distributed to each employee of the organization, to our Board of Directors and our Audit Committee members, who have signed a Commitment Letter, which reinforces
the compromise with the established values. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There was no amendment to or waiver from any provision of our Code of Ethics in 2008. Our Code of Ethics is in compliance with the SEC requirements for codes of ethics for senior financial officers. A copy of our Code
of Ethics is available on our websites www.csn.com.br or www.csn.com.br/ir.<B> </B></P>
<P>
<B>16C. Principal Accountant Fees and Services</B></P>
<P align="center">
116 </P>

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<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our interaction with our independent auditors with respect to the contracting of services unrelated to the external audit is based on principles that preserve the independence of the auditors and are otherwise
permissible under applicable rules and regulations. For the fiscal years ending December 31, 2007 and 2008, KPMG Auditores Independentes acted as our independent auditors. The following table describes the services rendered and the related fees.</P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD></TD>
	<TD width=2%></TD>
	<TD width=13%></TD>
	<TD width=2%></TD>
	<TD width=13%></TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD colspan="3" align=center valign="middle"><B>Year ending</B>&nbsp;</TD>
  </TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD colspan="3" align=center valign="middle"><B>December 31,</B>&nbsp;</TD>
  </TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD colspan="2" align="center" valign="middle" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center" valign="middle" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center valign="middle"><b>2007</b>&nbsp;&nbsp;</TD>
	<TD align="center" valign="middle">&nbsp;</TD>
  <TD align=center valign="middle"><b>2008</b></TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD colspan=3 align=center><I>(In thousands of US&#36;)</I></TD>
  </TR>
<TR valign="bottom">
	<TD align=left>Audit fees&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>973&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,809&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Audit &#150; related fees&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>690&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>251&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Tax fees&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>9&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>81&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Other&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>4&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>-&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
	<TD colspan=5>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>Total</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>1,676&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>2,141&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE>
<BR>
<P>
<B>Audit fees </B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Audit fees in 2007 and 2008 consisted of the aggregate fees billed and billable by KPMG Auditores Independentes for the audits of our consolidated financial statements, reviews of interim financial statements and
attestation services that are provided in connection with statutory and regulatory filings or engagements. </P>
<P align="justify">
<B>Audit-related fees </B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Audit-related fees in 2007 and 2008 are fees billed by KPMG Auditores Independentes for services that are reasonably related to the performance of the audit or review of our financial statements. In 2007 and 2008,
audit-related fees refer mainly to IFRS gap analysis. </P>
<P>
<B>Tax Fees </B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fees billed in 2007 and 2008 for professional services rendered by KPMG Auditores Independentes are for tax compliance services. </P>
<P>
<B>Other Fees </B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fees disclosed under the category &#147;Other&#148; refer mainly to out of pocket expenses. The services to be provided by the external auditors not directly related to the auditing of our financial statements are
previously submitted to the audit committee in order to ensure that they do not infringe the auditor&#146;s independence. </P>
<P>
<B>Pre-approval Policies and Procedures </B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Board approval is required before engaging independent auditors to provide any audit or permitted non-audit services to us or our subsidiaries. Pursuant to this policy, our Board of Directors pre-approves all audit and
non-audit services provided by our independent auditors.</P>
<P>
<B>16D. Exemptions from the Listing Standards for Audit Committees</B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are in full compliance with the listing standards for audit committee pursuant to Exchange Act Rule 10A- 3. For a discussion on our audit committee, see &#147;Item 6. Directors, Senior Management and
Employees&#151;Board Practices&#151;Fiscal Committee and Audit Committee.&#148; </P>
<P>
<B>16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers</B> <B> </B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since the beginning of 2004, in accordance with the limits and provisions of CVM&#146;s Instruction No. 10/80, our Board of Directors approved a number of share buyback programs. The following table sets forth our
purchases of our equity securities in 2008:</P>
<P align="center">
117 </P>

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<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:10px">
<TR>
	<TD width=19%></TD>
	<TD width=1%></TD>
	<TD width=19%></TD>
	<TD width=1%></TD>
	<TD width=19%></TD>
	<TD width=1%></TD>
	<TD width=19%></TD>
	<TD width=1%></TD>
	<TD width=19%></TD></TR>

<TR valign="bottom">
	<TD align=center valign="middle">&nbsp;</TD>
	<TD align="center" valign="middle">&nbsp;</TD>
	<TD align=center valign="middle">&nbsp;</TD>
	<TD align="center" valign="middle">&nbsp;</TD>
	<TD align=center valign="middle">&nbsp;</TD>
	<TD align="center" valign="middle">&nbsp;</TD>
	<TD align=center valign="middle"><B>Total Number of</B>&nbsp;</TD>
	<TD align="center" valign="middle">&nbsp;</TD>
  <TD align=center valign="middle"><b>Maximum Number</b>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=center valign="middle">&nbsp;</TD>
	<TD align="center" valign="middle">&nbsp;</TD>
	<TD align=center valign="middle">&nbsp;</TD>
	<TD align="center" valign="middle">&nbsp;</TD>
	<TD align=center valign="middle"><B>Average</B>&nbsp;</TD>
	<TD align="center" valign="middle">&nbsp;</TD>
	<TD align=center valign="middle"><B>Shares</B>&nbsp;</TD>
	<TD align="center" valign="middle">&nbsp;</TD>
  <TD align=center valign="middle"><B>of Shares that May</B>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=center valign="middle">&nbsp;</TD>
	<TD align="center" valign="middle">&nbsp;</TD>
	<TD align=center valign="middle"><B>Total Number of</B>&nbsp;</TD>
	<TD align="center" valign="middle">&nbsp;</TD>
	<TD align=center valign="middle"><B>Price Paid</B>&nbsp;</TD>
	<TD align="center" valign="middle">&nbsp;</TD>
	<TD align=center valign="middle"><B>Purchased as Part of</B>&nbsp;</TD>
	<TD align="center" valign="middle">&nbsp;</TD>
  <TD align=center valign="middle"><B>Yet Be Purchased</B>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=center valign="middle">&nbsp;</TD>
	<TD align="center" valign="middle">&nbsp;</TD>
	<TD align=center valign="middle"><B>Shares</B>&nbsp;</TD>
	<TD align="center" valign="middle">&nbsp;</TD>
	<TD align=center valign="middle"><B>per</B>&nbsp;</TD>
	<TD align="center" valign="middle">&nbsp;</TD>
	<TD align=center valign="middle"><B>Publicly Announced</B>&nbsp;</TD>
	<TD align="center" valign="middle">&nbsp;</TD>
  <TD align=center valign="middle"><B>Under the Plans or</B>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=center valign="middle"><B>Period</B>&nbsp;</TD>
	<TD align="center" valign="middle">&nbsp;</TD>
	<TD align=center valign="middle"><B>Purchased</B><B><SUP>(1)</SUP></B></TD>
	<TD align="center" valign="middle">&nbsp;</TD>
	<TD align=center valign="middle"><B>Share</B><B><SUP>(1)</SUP></B></TD>
	<TD align="center" valign="middle">&nbsp;</TD>
	<TD align=center valign="middle"><B>Plans or Programs</B><B><SUP>(1)</SUP></B></TD>
	<TD align="center" valign="middle">&nbsp;</TD>
  <TD align=center valign="middle"><B>Programs</B>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>


<TR valign="bottom">
  <TD align=left>From September 29 to&nbsp;October 29&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right> 10,800,000&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>13.66&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
	<TD align=right>10,800,000&nbsp;</TD>
	<TD align="right">&nbsp;</TD>
  <TD align=right>-&nbsp;</TD>
</TR>

<TR>
	<TD colspan=9>______________</TD>
</TR>
<TR valign="bottom">
	<TD colspan=9 align=left>(1) Prices and volumes of our common shares and ADS above have been adjusted to reflect the stock split that occurred on January 22, 2008.&nbsp;</TD></TR>
</TABLE>
<BR>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;From March to June 2008, our Board of Directors approved four buyback programs, authorizing us to acquire up to 10,800,000 of our shares to be held in treasury for subsequent sale or cancellation. No shares were
acquired through any of these buyback programs. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On September 26, 2008 our Board of Directors approved another buyback program to last from September 29, 2008 to October 29, 2008 authorizing us to acquire up to 10,800,000 shares to be held in treasury for subsequent
sale or cancellation. During the buyback program, we have acquired the maximum amount of 10,800,000 shares. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December 3, 2008, our shareholders approved at an extraordinary shareholders&#146; meeting the cancellation of the 10,800,000 shares held in treasury.  As a result of the cancellation, our capital stock became
comprised of 793,403,838 registered common shares with no par value. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;From January to February 2009, our Board of Directors approved two buyback programs, authorizing us to acquire up to 9,720,000 of our shares to be held in treasury for subsequent sale or cancellation. No shares were
acquired through any of these buyback programs. </P>
<P>
<B>16F. Change in Registrant&#146;s Certifying Accountant </B></P>
<P>
Not applicable. </P>
<P>
<B>16G. Corporate Governance </B></P>
<P>
<B>Significant Differences between our Corporate Governance Practice and NYSE Corporate Governance Standards </B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are subject to the NYSE corporate governance listing standards. As a foreign private issuer, the standards applicable to us are considerably different than the standards applied to U.S. listed companies. Under the
NYSE rules, we are required only to: (i) have an audit committee or audit board, pursuant to an applicable exemption available to foreign private issuers, that meets certain requirements, as discussed below, (ii) provide prompt certification by our
Chief Executive Officer of any material non-compliance with any corporate governance rules, and (iii) provide a brief description of the significant differences between our corporate governance practices and the NYSE corporate governance practice
required to be followed by U.S. listed companies. The discussion of the significant differences between our corporate governance practices and those required of U.S. listed companies follows below. </P>
<P>
<B><I>Majority of Independent Directors </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The NYSE rules require that a majority of the board of directors must consist of independent directors. Independence is defined by various criteria, including the absence of a material relationship between the director
and the listed company. Brazilian law does not have a similar requirement. Under Brazilian law, neither our board of directors nor our management is required to test the independence of directors before their election to the board. However, both
Brazilian Corporate Law and the CVM have established rules that require directors to meet certain qualification requirements and that address the compensation and duties and responsibilities of, as well as the restrictions applicable to, a
company&#146;s executive officers and directors. While our directors meet the qualification requirements of Brazilian Corporate Law and the CVM, we do not believe that a majority of our directors would be
considered independent under the NYSE test for director independence. Brazilian Corporate Law requires that our directors be elected by our shareholders at an annual shareholders&#146; meeting.</P>
<P align="center">
118 </P>

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<P><B><I>Executive Sessions </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NYSE rules require that the non-management directors must meet at regularly scheduled executive sessions without management present. Brazilian Corporate Law does not have a similar provision. According to Brazilian
Corporate Law, up to one-third of the members of the board of directors can be elected from management. Mr. Benjamin Steinbruch, our Chief Executive Officer, is also the Chairman of our Board of Directors. There is no requirement that non-management
directors meet regularly without management. As a result, the non-management directors on our Board of Directors do not typically meet in executive session. </P>
<P>
<B><I>Nominating and Corporate Governance Committee </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NYSE rules require that listed companies have a nominating and corporate governance committee composed entirely of independent directors and governed by a written charter addressing the committee&#146;s required purpose
and detailing its required responsibilities, which include, among other things, identifying and selecting qualified board member nominees and developing a set of corporate governance principles applicable to the company. We are not required under
Brazilian Corporate Law to have, and currently we do not have, a nominating and a corporate governance committee. </P>
<P>
<B><I>Compensation Committee </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NYSE rules require that listed companies have a compensation committee composed entirely of independent directors and governed by a written charter addressing the committee&#146;s required purpose and detailing its
required responsibilities, which include, among other things, reviewing corporate goals relevant to the chief executive officer&#146;s compensation, evaluating the chief executive officer&#146;s performance, approving the chief executive
officer&#146;s compensation levels and recommending to the board non-chief executive officer compensation, incentive-compensation and equity-based plans. We are not required under applicable Brazilian law to have, and currently do not have, a
compensation committee. Under Brazilian Corporate Law, the total amount available for compensation of our directors and executive officers and for profit-sharing payments to our executive officers is established by our shareholders at the annual
shareholders&#146; meeting. The board of directors is then responsible for determining the individual compensation and profit-sharing of each executive officer, as well as the compensation of our board and committee members.</P>
<P>
<B><I>Audit Committee </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NYSE rules require that listed companies have an audit committee that (i) is composed of a minimum of three independent directors who are all financially literate, (ii) meets the SEC rules regarding audit committees for
listed companies, (iii) has at least one member who has accounting or financial management expertise and (iv) is governed by a written charter addressing the committee&#146;s required purpose and detailing its required responsibilities. However, as
a foreign private issuer, we need only to comply with the requirement that the audit committee meet the SEC rules regarding audit committees for listed companies to the extent compatible with Brazilian corporate law. We have established an Audit
Committee, which is equivalent to a U.S. audit committee, provides assistance to our Board of Directors in matters involving our accounting, internal controls, financial reporting and compliance. Our Audit Committee recommends the appointment of our
independent auditors to our Board of Directors and reviews the compensation of, and coordinates with, our independent auditors. Our Audit Committee also evaluates the effectiveness of our internal financial and legal compliance controls, and is
comprised of up to three members elected by our Board of Directors for a one-year term of office. The current members of our Audit Committee are Dion&iacute;sio Dias Carneiro Netto, Fernando Perrone and Yoshiaki Nakano. All members of our Audit
Committee satisfy the audit committee membership independence requirements set forth by the SEC and the NYSE. All members of our Audit Committee have been determined by our Board of Directors to qualify as an &#147;audit committee financial
expert&#148; within the meaning of the rules adopted by the SEC relating to the disclosure of financial experts on audit committees in periodic filings pursuant to the Exchange Act. For further information on our Audit Committee, see &#147;Item 6.
Directors, Senior Management and Employees&#151;Board Practices&#151;Fiscal Committee and Audit Committee.&#148; </P>
<P align="center">
119 </P>

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<P>
<B><I>Code of Business Conduct and Ethics </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NYSE rules require that listed companies adopt and disclose a code of business conduct and ethics for directors, officers and employees, and promptly disclose any waivers of the code for directors or executive officers.
Applicable Brazilian law does not have a similar requirement. We have adopted a Code of Ethics applicable to all our employees, including our executive officers and directors. We believe this code addresses the matters required to be addressed
pursuant to the NYSE rules. For a further discussion of our Code of Ethics, see &#147;Item 16B. Code of Ethics.&#148;</P>
<P>
<B><I>Shareholder Approval of Equity Compensation Plans </I></B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NYSE rules require that shareholders be given the opportunity to vote on all equity compensation plans and material revisions thereto, with limited exceptions. We currently do not have any such plan and, pursuant to our
bylaws, we would require shareholder approval to adopt an equity compensation plan. Shareholder approval may be required, however, if an equity compensation plan would require an increase in our authorized capital to be implemented. </P>
<P>
<B><I>Corporate Governance Guidelines </I></B> </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NYSE rules require that listed companies adopt and disclose corporate governance guidelines. We have adopted the following corporate governance guidelines, either based on Brazilian law, our Code of Ethics or
institutional handbook: </P>
<UL>
<LI>
insider trading policy for securities issued by us;<br>
<br>
</LI>
<LI>
disclosure of material facts;<br>
<br>
</LI>
<LI>
disclosure of annual financial reports;<br>
<br>
</LI>
<LI>
confidential policies and procedures; and<br>
<br>
</LI>
<LI>
Sarbanes-Oxley Disclosure Committee&#146;s duties and activities.</LI>
</UL>
<P>
<B>Item 17. Financial Statements </B></P>
<P>
We have responded to Item 18 in lieu of responding to this item. See &#147;Item 18. Financial Statements.&#148;</P>
<P align="center">
120 </P>

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<P align="center">
<B>PART III </B></P>
<P>
<B>Item 18. Financial Statements </B></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following consolidated financial statements of the Registrant, together with the report of Deloitte Touche Tohmatsu and KPMG Auditores Independentes thereon, are filed as part of this annual report. </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD width=92%></TD>
	<TD width=2%></TD>
	<TD width=5%></TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>Page&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>Report of Independent Registered Public Accounting Firm On Internal Control Over Financial Reporting&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>FS-R1</TD>
</TR>

<TR valign="bottom">
	<TD align=left>Reports of Independent Registered Public Accounting Firms&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>FS-R2</TD>
</TR>
<TR valign="bottom">
	<TD align=left>Consolidated financial statements:&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Balance sheets as of December 31, 2007 and 2008&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>FS-1</TD>
</TR>

<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Statements of income for the years ended December 31, 2006, 2007 and 2008&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>FS-3</TD>
</TR>

<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Statements of cash flows for the years ended December 31, 2006, 2007 and 2008&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>FS-4</TD>
</TR>


<TR valign="bottom">
	<TD align=left>&nbsp; &nbsp; &nbsp;Statements of changes in stockholders&#146; equity and comprehensive income for the years&nbsp;ended December 31, 2006, 2007 and 2008&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>FS-7</TD>
</TR>

<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Notes to consolidated financial statements&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=center>FS-9</TD>
</TR>
</TABLE>
<BR>
<P>
<B>Item 19. Exhibits </B><A name="topexhibit" id="topexhibit"></A></P>
<table border="0" width="100%" cellspacing="0" cellpadding="0" style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <tr>
    <td width="14%"></td>
    <td width="2%"></td>
    <td width="83%"></td>
  </tr>
  <tr valign="bottom">
    <td align="center"><b>Exhibit</b>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="center"><b>Description</b>&nbsp;</td>
  </tr>
  <tr valign="bottom" style="font-size: 1px">
    <td>&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="center" valign="top"><b>Number</b>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="center" valign="top"><a href="exhibit11.htm">1.1</a></td>
    <td><a href="exhibit11.htm"></a></td>
    <td align="left"><a href="exhibit11.htm">Bylaws of CSN, as amended to date.</a></td>
  </tr>
  <tr valign="bottom">
    <td align="center" valign="top">2.1</td>
    <td>&nbsp;</td>
    <td align="left">Amended and Restated Deposit Agreement, dated as of November 1, 1997, and as further&nbsp;amended as of November 13, 1997 and as of June 10, 2004, among CSN, JPMorgan&nbsp;Chase Bank, as depositary, and the registered holders from time to time of the American&nbsp;Depositary Receipts, including the form of American Depositary Receipt (incorporated&nbsp;by reference to the Registration Statement on Form F- 6 relating to the ADSs (File n&deg;&nbsp;333-115078) filed with the SEC on April 30, 2004).&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="center" valign="top"><a href="exhibit81.htm">8.1&nbsp;</a></td>
    <td><a href="exhibit81.htm"></a></td>
    <td align="left"><a href="exhibit81.htm">List of subsidiaries&nbsp;</a></td>
  </tr>
  <tr valign="bottom">
    <td align="center" valign="top">10.1*&nbsp;</td>
    <td></td>
    <td align="left">Equity Swap Agreement, originally dated as of July 11, 2008 between CSN Madeira&nbsp;Ltda. and Goldman Sachs International.&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="center" valign="top"><a href="exhibit102.htm">10.2*&nbsp;</a></td>
    <td>&nbsp;</td>
    <td align="left"><a href="exhibit102.htm">Share Purchase Agreement, dated October 21, 2008, among the Company, Big Jump Energy Participa&#231;&#245;es S.A., Itochu Corporation, JFE Steel Corporation, Nippon Steel Corporation, Sumitomo Metal Industries, Ltd., Kobe Steel, Ltd., Nishin Steel Co., Ltd., and Posco.</a>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="center" valign="top"><a href="exhibit103.htm">10.3*&nbsp;</a></td>
    <td>&nbsp;</td>
    <td align="left"><a href="exhibit103.htm">Shareholders Agreement of Nacional Min&#233;rios S.A., dated October 21, 2008, between the Company and Big Jump Energy Participa&#231;&#245;es S.A.</a>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="center" valign="top"><a href="exhibit104.htm">10.4*&nbsp;</a></td>
    <td>&nbsp;</td>
    <td align="left"><a href="exhibit104.htm">High Silica ROM Iron Ore Supply Contract, dated October 21, 2008, between the Company and Nacional Min&#233;rios S.A.</a>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="center" valign="top"><a href="exhibit105.htm">10.5*</a>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left"><a href="exhibit105.htm">Low Silica ROM Iron Ore Supply Contract, dated October 21, 2008, between the Company and Nacional Min&#233;rios S.A.</a>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="center" valign="top"><a href="exhibit106.htm">10.6*</a>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left"><a href="exhibit106.htm">Iron Ore Supply Contract, dated October 21, 2008, between the Company and Nacional Min&#233;rios S.A.</a>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="center" valign="top"><a href="exhibit107.htm">10.7*</a>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left"><a href="exhibit107.htm">Port Operating Services Agreement, dated October 21, 2008, between the Company and Nacional Min&#233;rios S.A.</a>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="center" valign="top"><a href="exhibit121.htm">12.1&nbsp;</a></td>
    <td><a href="exhibit121.htm"></a></td>
    <td align="left"><a href="exhibit121.htm">Section 302 Certification of Chief Executive Officer.&nbsp;</a></td>
  </tr>
  <tr valign="bottom">
    <td align="center" valign="top"><a href="exhibit122.htm">12.2&nbsp;</a></td>
    <td><a href="exhibit122.htm"></a></td>
    <td align="left"><a href="exhibit122.htm">Section 302 Certification of Chief Financial Officer.&nbsp;</a></td>
  </tr>
  <tr valign="bottom">
    <td align="center" valign="top"><a href="exhibit131.htm">13.1&nbsp;</a></td>
    <td><a href="exhibit131.htm"></a></td>
    <td align="left"><a href="exhibit131.htm">Section 906 Certification of Chief Executive Officer.&nbsp;</a></td>
  </tr>
  <tr valign="bottom">
    <td align="center" valign="top"><a href="exhibit132.htm">13.2&nbsp;</a></td>
    <td><a href="exhibit132.htm"></a></td>
    <td align="left"><a href="exhibit132.htm">Section 906 Certification of Chief Financial Officer.&nbsp;</a></td>
  </tr>
  <tr valign="bottom">
    <td align="center" valign="top"><a href="exhibit151.htm">15.1&nbsp;</a></td>
    <td><a href="exhibit151.htm"></a></td>
    <td align="left"><a href="exhibit151.htm">Management&#146;s report dated March 17, 2010, on the effectiveness of our internal control over&nbsp;financial reporting as of December 31, 2008.&nbsp;</a></td>
  </tr>
  <tr valign="bottom">
    <td align="center" valign="top"><a href="exhibit152.htm">15.2&nbsp;</a></td>
    <td><a href="exhibit152.htm"></a></td>
    <td align="left"><a href="exhibit152.htm">Consent of Golder Associates S.A.&nbsp;</a></td>
  </tr>
</table>
_____________<BR>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD nowrap valign=top>
*&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
Portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission as part of an application for confidential treatment pursuant to the Securities Exchange Act of 1934, as amended.	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
<P align="center">
121 </P>

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<A name="page_122"></A>

<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD></TD>
	<TD width=2%></TD>
	<TD width=6%></TD>
	<TD width=1%></TD>
	<TD width=28%></TD></TR>
<TR valign="bottom">
	<TD align=center colspan=5><B>SIGNATURE</B></TD></TR>
<TR>
	<TD colspan=5>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD colspan=5>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The registrant hereby certifies that it meets all the requirements for filing on Form 20-F and that it has duly&nbsp;caused and authorized the undersigned to sign this annual report on its behalf.&nbsp;</TD>
</TR>

<TR>
	<TD colspan=5>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;March 17, 2010 &nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD colspan=3 align=left>&nbsp;Companhia Sider&uacute;rgica Nacional&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;By:&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left><U>/s/ Benjamin Steinbruch</U>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;Name:&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Benjamin Steinbruch&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;Title:&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Chief Executive Officer&nbsp;</TD></TR>
<TR>
	<TD colspan=5>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>By:&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left><U>/s/ Paulo Penido Pinto Marques</U>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Name:&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Paulo Penido Pinto Marques&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Title:&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Chief Financial Officer&nbsp;</TD></TR>
</TABLE>
<BR>
<P align="center">
122 </P>

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<P>
<B>Companhia Sider&uacute;rgica Nacional and <br>
Subsidiaries </B><br>
<B>Consolidated Financial Statements <br>
For the Years Ended December 31, <br>
2006, 2007 and 2008 </B><br>
<B>And Reports of Independent Registered Public Accounting Firms </B></P>
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<P><B>Report of independent registered public accounting firm </B></P>
<P> The Board of Directors and Stockholders of<br>
  Companhia Sider&uacute;rgica Nacional: </P>
<P>We have audited  Companhia Sider&#250;rgica Nacional (the Company's) internal control over financial  reporting as of December 31, 2008, based on criteria established in <i>Internal  Control - Integrated Framework</i> issued by the Committee of Sponsoring  Organizations of the Treadway Commission (COSO). The Company's management is  responsible for maintaining effective internal control over financial reporting  and for its assessment of the effectiveness of internal control over financial  reporting, included in the accompanying Management's Annual Report on Internal  Control over Financial Reporting. Our responsibility is to express an opinion  on the Company's internal control over financial reporting based on our audit.</P>
<P>We conducted our audit in accordance with the  standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable  assurance about whether effective internal control over financial reporting was  maintained in all material respects. Our audit included obtaining an  understanding of internal control over financial reporting, assessing the risk  that a material weakness exists, and testing and evaluating the design and  operating effectiveness of internal control based on the assessed risk. Our  audit also included performing such other procedures as we considered necessary  in the circumstances. We believe that our audit provides a reasonable basis for  our opinion.</P>
<P>A Company's internal control over financial  reporting is a process designed to provide reasonable assurance regarding the  reliability of financial reporting and the preparation of financial statements  for external purposes in accordance with generally accepted accounting  principles. A company's internal control over financial reporting includes  those policies and procedures that (1)  pertain to the maintenance of records that, in reasonable detail, accurately  and fairly reflect the transactions and dispositions of the assets of the  company; (2) provide reasonable assurance that transactions are recorded as  necessary to permit preparation of financial statements in accordance with  generally accepted accounting principles, and that receipts and expenditures of  the company are being made only in accordance with authorizations of management  and directors of the company; and (3) provide reasonable assurance regarding  prevention or timely detection of unauthorized acquisition, use, or disposition
 of the company's assets that could have a material effect on the financial  statements.</P>
<P>Because of its  inherent limitations, internal control over financial reporting may not prevent  or detect misstatements. Also, projections of any evaluation of effectiveness  to future periods are subject to the risk that controls may become inadequate  because of changes in conditions, or that the degree of compliance with the  policies or procedures may deteriorate.</P>
<P>A material weakness  is a deficiency, or a combination of deficiencies, in internal control over  financial reporting, such that there is a reasonable possibility that a  material misstatement of the company's annual financial statements will not be  prevented or detected on a timely basis. A material weakness related to monitoring  controls over the process for the identification, accounting and disclosure of  certain foreign subsidiaries incorporated in prior years and related  transactions therein has been identified and included in management's  assessment. This material weakness, if not remediated, has the potential to  cause a material misstatement in the future. We also have audited, in  accordance with the standards of the Public Company Accounting Oversight Board  (United States), the consolidated balance sheets as of December 31, 2008 and  2007, and the related consolidated statements of income, changes in  shareholders' equity and comprehensive income, and cash flows for each of the  year
s in the two-year period ended December 31, 2008, of the Company and its  subsidiaries. This material weakness was considered in determining the nature,  timing, and extent of audit tests applied in our audit of the 2008 consolidated  financial statements, and this report does not affect our report dated June 30,  2009, which expressed an unqualified opinion on those consolidated financial  statements.</P>
<P>In our opinion, because of the effect of the  aforementioned material weakness on the achievement of the objectives of the  control criteria, the Company has not maintained effective internal control  over financial reporting as of December 31, 2008, based on criteria established  in <i>Internal Control - Integrated Framework</i> issued by the Committee of  Sponsoring Organizations of the Treadway Commission.</P>
<P>We do not express an opinion or any other form  of assurance on management's statements referring to corrective actions taken  after December 31, 2008, relative to the aforementioned material weakness in  internal control over financial reporting.</P>
<P> KPMG Auditores Independentes </P>
<P> S&atilde;o Paulo, SP - Brazil <br>
June 30, 2009, except for notes 2(f), 2(p), 10,  12, 13 and 17(a), which are as of March 17, 2010</P>
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<P><B>Report of independent registered public accounting firm </B></P>
<P> The Board of Directors and Stockholders of<br>
  Companhia Sider&uacute;rgica Nacional: </P>
<P>We have audited the accompanying consolidated  balance sheets of Companhia Sider&#250;rgica Nacional and&nbsp;its subsidiaries  ("the Company") as of December&nbsp;31, 2008 and 2007, and the related  consolidated statements of income, changes in stockholders' equity and  comprehensive income, and cash flows for each of the years in the two-year  period ended December&nbsp;31, 2008. These consolidated financial statements  are the responsibility of the Company's management. Our responsibility is to  express an opinion on these consolidated financial statements based on our  audits.</P>
<P>We conducted our audits in accordance with the  standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable  assurance about whether the financial statements are free of material  misstatement. An audit includes examining, on a test basis, evidence supporting  the amounts and disclosures in the financial statements. An audit also includes  assessing the accounting principles used and significant estimates made by  management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.</P>
<P>In our opinion, the consolidated financial statements  referred to above present fairly, in all material respects, the financial  position of Companhia Sider&#250;rgica Nacional and its subsidiaries as of December&nbsp;31, 2008 and 2007, and  the results of their operations  and their cash flows for each  of the years in the two-year period ended December&nbsp;31, 2008, in conformity  with U.S.&nbsp;generally accepted accounting principles.</P>
<P>We also have audited, in accordance with the  standards of the Public Company Accounting Oversight Board (United States),  Companhia Sider&#250;rgica Nacional's internal control over financial reporting as  of December&nbsp;31, 2008, based on criteria established in <i>Internal Control - Integrated Framework</i> issued by the Committee of Sponsoring Organizations of the Treadway Commission  (COSO), and our report dated June 30, 2009 expressed an adverse opinion on the  effectiveness of the Company's internal control over financial reporting.</P>
<P> KPMG Auditores Independentes </P>
<P> S&atilde;o Paulo, SP - Brazil <br>
June 30, 2009, except for notes 2(f), 2(p), 10,  12, 13 and 17(a), which are as of March 17, 2010</P>
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<P><B>Report of independent registered public accounting firm </B></P>
<P> To the Board of Directors and Stockholders of <br>
  Companhia Sider&uacute;rgica Nacional <B> </B></P>
<P>We have audited the accompanying consolidated  balance sheets of COMPANHIA SIDER&#218;RGICA NACIONAL and subsidiaries ("the  Company") as of December 31, 2006, and the related consolidated statements of  operations, changes in stockholders' equity and cash flows for each of the two  years in the period ended December 31, 2006. These consolidated financial  statements are the responsibility of the Company's management. Our  responsibility is to express an opinion on the consolidated financial  statements based on our audits.</P>
<P>We conducted our audits in accordance with the  standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable  assurance about whether the consolidated financial statements are free of  material misstatement. An audit also includes examining, on a test basis,  evidence supporting the amounts and disclosures in the consolidated financial  statements, assessing the accounting principles used and significant estimates  made by management, as well as evaluating the overall financial statement  presentation. We believe that our audits provide a reasonable basis for our  opinion.</P>
<P>In our opinion, such consolidated financial statements  present fairly, in all material respects, the consolidated financial position  of the Company as of December 31, 2006, and the consolidated results of its  operations and its cash flows for each of the two years in the period ended  December 31, 2006, in conformity with accounting principles generally accepted  in the United States of America.</P>
<P> By: <U>/s/ Deloitte Touche Tohmatsu Auditores Independentes </U><br>
  Deloitte Touche Tohmatsu Auditores Independentes <br>
  Rio de Janeiro, Brazil<br>
  June 29, 2007 (except with respect to the  matters discussed in Note 14.b, as to which the date is January 22, 2008)</P>
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<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD width=100%></TD></TR>
<TR valign="bottom">
        <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Consolidated Balance Sheets&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Expressed in millions of United States dollars&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE><BR>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD width=70%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD></TR>
<TR valign="bottom">
        <TD align=left><B>Assets</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD colspan=3 align=center><B>As of December 31,</B>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD colspan=3 align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center><B>2007</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
  <TD align=center><B>2008</B>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Current assets</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Cash and cash equivalents&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1,213&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>3,542&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Derivative assets&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>813&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>127&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Financial instruments guarantee margin&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1,059&nbsp;</TD></TR>
<TR valign="bottom">
        <TD>Trade accounts receivable&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Related parties&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>78&nbsp;</TD></TR>
<TR valign="bottom">
        <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>559&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>409&nbsp;</TD></TR>
<TR valign="bottom">
        <TD>Inventories&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1,152&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1,165&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Recoverable taxes&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>92&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>160&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Deferred income taxes&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>310&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>317&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Insurance claim&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>105&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Receivables from related parties&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>42&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Other accounts receivable&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>205&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>270&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Other&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>216&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>138&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>4,665</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>7,307</B>&nbsp;</TD></TR>
<TR>
        <TD colspan=5>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Property, plant and equipment, net</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>4,824</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>3,543</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Investments in affiliated companies</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>399</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>2,588</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Goodwill</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>166</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>127</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=5>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Other assets</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Restricted deposits for legal proceedings&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>996&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>893&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Receivables from related parties&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>201&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>659&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Deferred income taxes&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>334&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>336&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Prepaid pension cost&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>138&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Recoverable taxes&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>87&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>82&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Other accounts receivable&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>67&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>46&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Other&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>188&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>128&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=5>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>2,011</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>2,144</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=5>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>12,065</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>15,709</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE><BR>
<P>
The accompanying notes are an integral part of these consolidated financial statements </P>
<P align="center">
FS - 1 </P>

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<A name="page_f6"></A>

<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD width=100%></TD></TR>
<TR valign="bottom">
        <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Consolidated Balance Sheets&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Expressed in millions of United States dollars&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE><BR>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD width=70%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD></TR>
<TR valign="bottom">
        <TD align=left><B>Liabilities and stockholders&#146; equity</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD colspan=3 align=center><B>As of December 31,</B>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD colspan=3 align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center><B>2007</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
  <TD align=center><B>2008</B>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=5>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Current liabilities</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Trade accounts payable&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp; &nbsp; &nbsp;Related parties&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>14&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>81&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp; &nbsp; &nbsp;Other&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>719&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>739&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Payroll and related charges&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>84&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>68&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Taxes payable&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>399&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>183&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Dividends and Interest on stockholders&#146; equity&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>298&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>432&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Current portion of long-term debt&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>872&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1,296&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Accrued finance charges&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>104&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>107&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Derivative liabilities&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>146&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>686&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Other accounts payable&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>134&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>131&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Other&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>95&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>90&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>2,865</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>3,813</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Long-term liabilities</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Accrued pension cost&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>60&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Long-term debt and debentures&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>3,647&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>3,436&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Due to related parties&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>3,079&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Accrual for contingencies and disputed taxes payable&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1,943&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1,618&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Taxes payable in installments&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>437&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>270&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Deferred income taxes&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>332&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>14&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Other&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>153&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>103&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>6,512</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>8,580</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Stockholders&#146; equity</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>

<TR valign="bottom">
  <TD align=left>Common stock &#150; 1,200,000,000 shares (no par value) authorized &#150; 816,203,838 shares issued at December&nbsp;31, 2007 and 793,403,838 at December 31, 2008 &#150; outstanding shares:&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>769,469,454 at December 31, 2007 and 758,669,454 at&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>December 31, 2008&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>2,447&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>2,447&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Capital surplus&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>53&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>53&nbsp;</TD></TR>

<TR valign="bottom">
        <TD align=left>Treasury stock &#150; 46,734,384 shares at December 31,&nbsp;2007 and 34,734,384 shares at December 31, 2008&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(288)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(326)</TD></TR>
<TR>
        <TD colspan=5>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Retained earnings&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp; &nbsp; &nbsp;Appropriated&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1,188&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1,920&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp; &nbsp; &nbsp;Unappropriated&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>293&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>692&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Accumulated other comprehensive loss&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(1,005)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(1,470)</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>2,688</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>3,316</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=5>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>12,065</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>15,709</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE>
<BR>
<P>
The accompanying notes are an integral part of these consolidated financial statements </P>
<P align="center">
FS - 2 </P>

<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_f7"></A>

<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD width=100%></TD></TR>
<TR valign="bottom">
        <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Consolidated Statements of Income&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Expressed in millions of United States dollars, except share and per share data&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE><BR>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD width=55%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD colspan=5 align=center><B>Years ended December 31,</B>&nbsp;</TD>
  </TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD colspan=5 align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center><B>2006</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>2007</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
  <TD align=center><B>2008</B>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=7>&nbsp;</TD></TR>
<TR>
        <TD colspan=7>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Operating revenues</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Domestic sales&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>3,550&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>5,283&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>7,377&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Export sales&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1,263&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1,695&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1,830&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>4,813</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>6,978</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>9,207</B>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Sales taxes&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(899)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(1,305)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(1,835)</TD></TR>
<TR valign="bottom">
        <TD align=left>Discounts, returns and allowances&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(68)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(156)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(185)</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Net operating revenues</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>3,846</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>5,517</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>7,187</B>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Cost of products sold</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(2,102)</B></TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(3,076)</B></TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(3,576)</B></TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Gross profit</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>1,744</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>2,441</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>3,611</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Operating expenses</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>

<TR valign="bottom">
        <TD align=left>Selling (includes allowance for doubtful accounts of US&#36;nil in 2006, US&#36;3 in&nbsp;2007 and US&#36;51 in 2008)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(167)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(310)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(412)</TD></TR>
<TR valign="bottom">
        <TD align=left>General and administrative&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(148)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(185)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(219)</TD></TR>
<TR valign="bottom">
        <TD align=left>Other income (expense)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(149)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(85)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(136)</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(464)</B></TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(580)</B></TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(767)</B></TD></TR>
<TR valign="bottom">
        <TD align=left><B>Operating income</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>1,280</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>1,861</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>2,844</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=7>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Non-operating income (expenses), net</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Financial income (expenses), net&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(533)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(219)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(380)</TD></TR>
<TR valign="bottom">
        <TD align=left>Foreign exchange and monetary gain (loss), net&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>218&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>438&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(1,265)</TD></TR>
<TR valign="bottom">
        <TD align=left>Gain on dilution of interest in subsidiary&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1,667&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Other&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>22&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>81&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>75&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(293)</B></TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>300</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>97</B>&nbsp;</TD></TR>

<TR valign="bottom">
        <TD align=left><B>Income before income taxes and equity in results</B>&nbsp;<B>of affiliated companies</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>987</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>2,161</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>2,941</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Income tax benefit (expense)</B></TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Current&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(198)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(619)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(615)</TD></TR>
<TR valign="bottom">
        <TD align=left>Deferred&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(98)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>85&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>201&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(296)</B></TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(534)</B></TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(414)</B></TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Equity in results of affiliated companies</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>58</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>76</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>127</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Net income</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>749</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>1,703</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>2,654</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=7>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Basic earnings per common share</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>0.97</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>2.21</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>3.46</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>

<TR valign="bottom">
        <TD align=left><B>Weighted average number of common shares</B>&nbsp;<B>outstanding (in thousands)</B></TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>772,302</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>769,749</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>767,033</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE>
<BR>
<P>
The accompanying notes are an integral part of these consolidated financial statements </P>
<P align="center">
FS - 3 </P>

<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_f8"></A>

<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD width=100%></TD></TR>
<TR valign="bottom">
        <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Consolidated Statements of Cash Flows&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Expressed in millions of United States dollars&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE><BR>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD colspan=5 align=center><B>Years ended December 31,</B>&nbsp;</TD>
  </TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD colspan=5 align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center><B>2006</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>2007</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
  <TD align=center><B>2008</B>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Cash flows from operating activities</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Net income for the year&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>749&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1,703&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>2,654&nbsp;</TD></TR>

<TR valign="bottom">
        <TD align=left> Adjustments to reconcile net income for the year&nbsp;to net cash provided by operating activities&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Depreciation and amortization&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>205&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>397&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>341&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Foreign exchange and monetary loss (gain), net&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(218)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(438)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1,265&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Interest accrued&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>302&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>246&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>345&nbsp;</TD></TR>

<TR valign="bottom">
        <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Accrual for contingencies and disputed taxes&nbsp;payable&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>282&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>47&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>48&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Accrual for derivatives&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>218&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(415)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>294&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Gain on sale of short-term investments&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(65)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Gain on dilution of interest in Namisa&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(1,667)</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Deferred income tax expense (benefit)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>98&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(85)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(201)</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Equity in results of affiliated companies&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(58)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(76)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(127)</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Allowance for doubtful accounts&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>3&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>51&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Other&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(9)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(24)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(166)</TD></TR>
<TR>
        <TD colspan=7>&nbsp;</TD></TR>

<TR valign="bottom">
        <TD align=left>Decrease (increase) in operating assets&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Trade accounts receivable&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(209)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>152&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(137)</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Inventories&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(326)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>97&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(408)</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Recoverable taxes&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(31)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>49&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(134)</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Insurance claim&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(208)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Prepaid Pension Cost&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(89)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>133&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Other&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(126)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(48)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(62)</TD></TR>
<TR>
        <TD colspan=7>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Increase (decrease) in operating liabilities&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Trade accounts payable&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>187&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(54)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>336&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Payroll and related charges&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>28&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>11&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>6&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Taxes payable&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>135&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>64&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(229)</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Accrued pension cost&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(35)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>76&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Interest paid&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(363)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(381)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(393)</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Other&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>298&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>170&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>42&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=7>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Net cash provided by operating activities</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>919</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>1,264</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>2,067</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE>
<BR>
<P>
The accompanying notes are an integral part of these consolidated financial statements   </P>
<P align="center">
FS - 4 </P>

<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_f9"></A>

<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD width=100%></TD></TR>
<TR valign="bottom">
        <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Consolidated Statements of Cash Flows&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Expressed in millions of United States dollars&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE><BR>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD colspan=5 align=center><B>Years ended December 31,</B>&nbsp;</TD>
  </TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD colspan=5 align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center><B>2006</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>2007</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
  <TD align=center><B>2008</B>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=7>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Cash flows from investing activities</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Additions to property, plant and equipment&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(706)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(632)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(886)</TD></TR>
<TR valign="bottom">
        <TD align=left>Proceeds from sale of short-term investments&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>187&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>437&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Purchase of short-term investments and debt securities&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(353)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Restricted deposits from legal proceedings&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(19)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(561)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(176)</TD></TR>
<TR valign="bottom">
        <TD align=left>Business acquisitions, net of cash acquired&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(28)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(348)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Proceeds received from insurance claims&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>90&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>134&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>160&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Proceeds from settlement of derivative instruments&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1,006&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Financial instruments guarantee margin&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(1,347)</TD></TR>
<TR valign="bottom">
        <TD align=left>Loans to related parties&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(10)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(121)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(49)</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=7>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Net cash used in investing activities</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(839)</B></TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(1,091)</B></TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(1,292)</B></TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=7>&nbsp;</TD></TR>
<TR>
        <TD colspan=7>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Cash flows from financing activities</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Short-term debt, net&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(762)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Proceeds from prepayment agreements&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>3,041&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Intercompany loan&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(500)</TD></TR>
<TR valign="bottom">
        <TD align=left>Long-term debt&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Proceeds&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>2,082&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1,659&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1,630&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Repayments&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(733)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(1,397)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(919)</TD></TR>
<TR valign="bottom">
        <TD align=left>Treasury stock&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(17)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(32)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(147)</TD></TR>
<TR valign="bottom">
        <TD align=left>Dividends and interest on stockholders' equity&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(833)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(352)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(1,238)</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=7>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Net cash provided by (used in) financing activities</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(263)</B></TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(122)</B></TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>1,867</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=7>&nbsp;</TD></TR>

<TR valign="bottom">
        <TD align=left>Effects of changes in exchange rates on cash and&nbsp;cash equivalents&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(99)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>203&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(313)</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=7>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Increase (decrease) in cash and cash equivalents</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(282)</B></TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>254</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>2,329</B>&nbsp;</TD></TR>
<TR>
        <TD colspan=7>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Cash and cash equivalents, beginning of year&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1,241&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>959&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1,213&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=7>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Cash and cash equivalents, end of year</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>959</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>1,213</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>3,542</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE>
<BR>
<P>
The accompanying notes are an integral part of these consolidated financial statements </P>
<P align="center">
FS - 5 </P>

<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_f10"></A>

<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD width=100%></TD></TR>
<TR valign="bottom">
        <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Consolidated Statements of Cash Flows&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Expressed in millions of United States dollars&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE><BR>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <TR>
    <TD></TD>
    <TD width=2%></TD>
    <TD width=13%></TD>
    <TD width=2%></TD>
    <TD width=13%></TD>
    <TD width=2%></TD>
    <TD width=13%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" align=center><B>Years ended December 31,</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="center"></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="center"></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center><B>2006</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>2007</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>2008</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR>
    <TD colspan=7>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>SUPPLEMENTAL DISCLOSURE OF CASH FLOW</B>&nbsp;<B>INFORMATION</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD colspan=7>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Cash paid during the year for:</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;Interest&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>363&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right> 381&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>393&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;Income taxes&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>79&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right> 821&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>446&nbsp;</TD>
  </TR>
  <TR>
    <TD colspan=7>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Business acquisitions:</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;Fair value of assets acquired&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>215&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right> 475&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;Fair value of liabilities assumed&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>(183)</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;(35)</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;Total purchase price&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>32&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right> 440&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;Amount payable&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;(90)</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;Cash acquired&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>(6)</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right> (2)</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;Purchase price, net of cash acquired&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>28&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right> 348&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
  </TR>
  <TR>
    <TD colspan=7>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Supplemental noncash financing and investing</B>&nbsp;<B>activities:</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;Interest on stockholders' equity and dividends unpaid in&nbsp;the year&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>81&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right> 298&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>432&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;Effects of FASB Statement No. 158, net of taxes,&nbsp;recognized as accumulated other comprehensive&nbsp;income&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>38&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right> 234&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>(239)</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;Changes in fair value of available-for-sale securities,&nbsp;net of taxes,&nbsp;recognized as accumulated other comprehensive&nbsp;income&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>24&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;(30)</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>4&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<P>
The accompanying notes are an integral part of these consolidated financial statements </P>
<P align="center">
FS - 6 </P>

<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

<H5 align="left" style="page-break-before:always"></H5>


<A name="page_f11"></A>

<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD width=100%></TD></TR>
<TR valign="bottom">
        <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;<br>
    Consolidated Statements of Changes in Stockholders&#146; Equity and Comprehensive Income&nbsp;<br>
    Expressed in millions of United States dollars, except for share data&nbsp;</TD></TR>

<TR valign="bottom" style="font-size: 1px">
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE>
<BR>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD colspan=5 align=center> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B>Years ended December 31,</B>&nbsp;</TD>
  </TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD colspan=5 align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center><B>2006</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>2007</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>2008</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Movement of Common Shares (quantities):</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Balance, beginning of year&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>774,546,138&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>772,240,338&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>769,469,454&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Treasury stock acquisition&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(2,305,800)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(2,770,884)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(10,800,000)</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Balance, end of year&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>772,240,338</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>769,469,454</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>758,669,454</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=7>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Common stock</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Balance, beginning and end of year&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>2,447</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>2,447</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>2,447</B>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Capital surplus</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Balance, beginning and end of year&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>53</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>53</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>53</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Treasury stock</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Balance, beginning of year&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(239)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(256)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(288)</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Stock acquisition&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(17)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(32)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(147)</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Stock cancellation&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>109&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Balance, end of year&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(256)</B></TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(288)</B></TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(326)</B></TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE>
<BR>
<P>
The accompanying notes are an integral part of these consolidated financial statements </P>
<P align="center">
FS - 7 </P>

<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_f12"></A>

<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD width=100%></TD></TR>
<TR valign="bottom">
        <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B><br>          &nbsp;Consolidated Statements of Changes in Stockholders&#146; Equity and Comprehensive Income&nbsp;<br>
    Expressed in millions of United States dollars, except for share data&nbsp;</TD></TR>

<TR valign="bottom" style="font-size: 1px">
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE>
<BR>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD colspan=5 align=center><B>Years ended December 31,</B>&nbsp;</TD>
  </TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD colspan=5 align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center><b>2006</b>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>2007</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>2008</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=7>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Retained earnings</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Appropriated</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Investment reserve&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Balance, beginning of year&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>272&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>317&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>998&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Transfer from unappropriated retained earnings&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>45&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>681&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>778&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Balance, end of year&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>317</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>998</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>1,776</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=7>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Legal reserve&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Balance, beginning of year&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>144&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>157&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>190&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Transfer from (to) unappropriated retained earnings&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>13&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>33&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(46)</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Balance, end of year&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>157</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>190</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>144</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=7>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Total balance, end of year&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>474</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>1,188</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>1,920</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=7>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Unappropriated retained earnings</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Balance, beginning of year&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>77&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(146)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>293&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Net income&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>749&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1,703&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>2,654&nbsp;</TD></TR>

<TR valign="bottom">
        <TD align=left>&nbsp;Dividends and interest on stockholders&#146; equity (US&#36;1.18, US&#36;0.71 and&nbsp;US&#36;1.86 per share, in 2006, 2007 and 2008, respectively)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(914)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(550)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(1,414)</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Stock cancellation&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(109)</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Appropriation to reserves, net&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(58)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(714)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(732)</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Balance, end of year&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(146)</B></TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>293</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>692</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=7>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Total retained earnings</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>328</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>1,481</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>2,612</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=7>&nbsp;</TD></TR>

<TR valign="bottom">
        <TD align=left><B>Accumulated other comprehensive loss</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Adoption of FASB Statement N<SUP>o. </SUP>158</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Balance, beginning of year&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>38&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>272&nbsp;</TD></TR>

<TR valign="bottom">
  <TD align=left> &nbsp;Change in the year, net of deferred tax benefit (expense) US&#36;(20) tax in&nbsp;2006,&nbsp;US&#36;(124) in 2007 and US&#36;123 in 2008&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>38&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>234&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(239)</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Balance, end of year&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>38&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>272&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>33&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=7>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Unrealized gain (loss) on available-for-sale securities</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Balance, beginning of year&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>24&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(6)</TD></TR>

<TR valign="bottom">
  <TD align=left> &nbsp;Change in the year, net of deferred tax benefit (expense) US&#36;(12) tax in 2006,&nbsp;US&#36;15 in 2007 and US&#36;(2) in 2008&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>24&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(30)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>4&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Balance, end of year&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>24&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(6)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(2)</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=7>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Foreign exchange loss of long-term investment nature</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Balance, beginning of year&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Change in the year, net of current tax benefit of US&#36;194&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(376)</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp; &nbsp;Balance, end of year&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(376)</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=7>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Cumulative translation adjustment</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Balance, beginning of year&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(1,745)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(1,587)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(1,271)</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Change in the year&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>158&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>316&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>146&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Balance, end of year&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(1,587)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(1,271)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(1,125)</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=7>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Total accumulated other comprehensive loss</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(1,525)</B></TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(1,005)</B></TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(1,470)</B></TD></TR>
<TR>
        <TD colspan=7>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Total stockholders&#146; equity</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>1,047</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>2,688</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>3,316</B>&nbsp;</TD></TR>
<TR>
        <TD colspan=7>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Comprehensive income:</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Net income for the year&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>749&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1,703&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>2,654&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Effect of Statement 158, net of taxes&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>234&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(239)</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Changes in fair value of available-for-sale securities, net of taxes&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>24&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(30)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>4&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Foreign exchange loss of long-term investment nature&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(376)</TD></TR>

  <TR valign="bottom">
    <TD align=left>&nbsp;Translation adjustments for the year&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>158&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>316&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>146&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Total comprehensive income</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>931</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>2,223</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>2,189</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<p align="justify">The accompanying notes are an integral part of these consolidated financial statements </p>
<p align="center">FS - 8 </p>
<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_f13"></A>

<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD width=100%></TD></TR>
<TR valign="bottom">
        <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Expressed in millions of United States dollars, unless otherwise stated&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE><BR>
<P>
<B>1 Description of business </B></P>
<P align="justify">
Companhia Sider&uacute;rgica Nacional is a publicly-held company incorporated on April 9, 1941 under the laws of the Federative Republic of Brazil (Companhia Sider&uacute;rgica Nacional and its subsidiaries are collectively referred to herein as
&#147;CSN&#148; or &#147;the Company&#148;). </P>
<P align="justify">
<B>a) Consolidation process </B></P>
<P align="justify">
CSN is a vertically integrated company that produces a wide range of value-added steel products, such as hot-dip galvanized sheets and tin mill products, and is Brazil&#146;s sole tinplate producer. CSN also runs its own iron ore, limestone and
dolomite mines in the State of Minas Gerais, which supply all the needs of its Presidente Vargas Steelworks in the State of Rio de Janeiro. As a complement to its activities, the Company has also made strategic investments in railroads and power
supply companies, among others. Abroad, the Company has rolling mills in Portugal and in the United States of America. The Company&#146;s consolidated subsidiaries are: </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=25%></TD></TR>

<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD colspan=3 align=center> Direct and Indirect<br>       &nbsp;Ownership interest (%)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=left>Main activities&nbsp;</TD>
  </TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD colspan=3 align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="center"></TD>
        <TD align="center">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD align=left>Companies&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>2007&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>2008&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>
<TR>
        <TD colspan=7>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Full consolidation</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>CSN Energy&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Holding Company&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>CSN Export&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Financial operations and trading&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>CSN Islands VII&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Financial operations&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>CSN Islands VIII&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Financial operations&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>CSN Islands IX&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Financial operations&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>CSN Islands X&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Financial operations&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>CSN Islands XI (1)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Financial operations&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>CSN Overseas&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Financial operations and holding company&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>CSN Panama&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Financial operations and holding company&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>CSN Steel&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Financial operations and holding company&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Sepetiba Tecon&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>99.99&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>99.99&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Maritime port services&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>CSN I (2)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>99.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Holding company&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Estanho de Rond&ocirc;nia - ERSA&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>99.99&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>99.99&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Mining&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Cia. Metalic Nordeste&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>99.99&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>99.99&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Package production&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Ind&uacute;stria Nacional de A&ccedil;os Laminados - INAL (2)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>99.99&nbsp;</TD>

        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Steel products service center&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>CSN Cimentos&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>99.99&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>99.99&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Cement production&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Inal Nordeste&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>99.99&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>99.99&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Steel products service center&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>CSN Energia&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Trading of electricity&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Nacional Min&eacute;rios&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>99.99&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Mining and holding company&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>CSN Aceros&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Holding company&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>CSN Cayman&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Financial operations and trading&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>CSN Iron&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Financial operations&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Companhia Sider&uacute;rgica Nacional LLC&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Steel industry&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>CSN LLC Holding Corp&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Holding company&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Companhia Sider&uacute;rgica Nacional Partner LLC&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Holding company&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Energy I&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Holding company&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Tangua&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Holding company&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>CSN Madeira&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Financial operations and holding company&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Cinnabar&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Financial operations and holding company&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Hickory&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Financial operations and trading&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Lusosider Projectos Sider&uacute;rgicos&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Holding company&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Lusosider A&ccedil;os Planos&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>99.94&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>99.94&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Steel industry&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>CSN Finance&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Financial operations and holding company&nbsp;</TD></TR>
</TABLE>
<BR>
<P align="center">
FS - 9 </P>

<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_f14"></A>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <TR>
    <TD width=100%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=26%></TD></TR>
<TR valign="bottom">
        <TD align=left>CSN Holdings&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Financial operations and holding company&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Cia Metal&uacute;rgica Prada (Prada)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>99.99&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>99.99&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Package production&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>GalvaSud&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>99.99&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Steel industry&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Pelotiza&ccedil;&atilde;o Nacional (1)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>99.99&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Mining and holding company&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Minas Pelotiza&ccedil;&atilde;o (1)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>99.99&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>99.99&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Mining and holding company&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>CSN A&ccedil;os Longos (1)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>99.99&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>99.99&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Steel and metal products industry and trading&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Nacional Siderurgia (1)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>99.99&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>99.99&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Steel industry&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>CSN Gest&atilde;o de Recursos Financeiros (1)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>99.99&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>99.99&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Financial operations and holding company&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Congonhas Min&eacute;rios (1)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>99.99&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>99.99&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Mining and holding company&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>CSN Acquisitions (1)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Financial operations and holding company&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Companhia de Fomento Mineral (1) (2)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Mining and holding company&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>MG Min&eacute;rios (1)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>99.99&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Mining and holding company&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Inversiones CSN Espanha S.L. (1)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Financial operations and holding company&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>CSN Finance B.V. (Netherlands) (1)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Financial operations and holding company&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>International Investment Fund - IIF&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Financial operations and holding company&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Itamambuca&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>99.93&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>99.93&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Mining and holding company&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Arame Corporation&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Dormant company&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>TdBB&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Dormant company&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>International Charitable Corporation&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Dormant company&nbsp;</TD></TR>
<TR>
        <TD colspan=7>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Not consolidated</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Nacional Min&eacute;rios&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>59.99&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Mining and holding company&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Pelotiza&ccedil;&atilde;o Nacional (1)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>59.99&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Mining and holding company&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>MG Min&eacute;rios (1)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>59.99&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Mining and holding company&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>NMSA Madeira Lda. (3)</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>60.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Financial operations and trading&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Inversiones CSN Espanha S.L. (1)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>60.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Financial operations and holding company&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>It&aacute; Energ&eacute;tica&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>48.75&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>48.75&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Electricity Generation&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Transnordestina Log&iacute;stica (4)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>46.88&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>84.50&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Railroad transportation&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>MRS Log&iacute;stica&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>37.27&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>33.27&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Railroad transportation&nbsp;</TD></TR>
<TR>
        <TD colspan=7>&nbsp;</TD></TR>
<TR>
        <TD colspan=7>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Exclusive investment funds consolidated</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Mugen &#150; Fundo de Investimento Multimercado&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Investment funds&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Diplic &#150; Fundo de Investimento Multimercado&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100.00&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Investment funds&nbsp;</TD></TR>
</TABLE><BR>
<P>
(1) Companies incorporated during 2007.<br>
(2) Companies merged during 2008.<br>
(3) Company incorporated during 2008. <br>
(4) Former Companhia Ferrovi&aacute;ria do Nordeste (CFN). </P>
<P align="justify">
<B>2 Summary of significant accounting policies and practices </B></P>
<P align="justify">
In preparing the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (&#147;US GAAP&#148;), management is required to make estimates and assumptions that affect the reported
amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in the financial statements and accompanying notes. The Company&#146;s consolidated financial statements therefore include various
estimates concerning the selection of useful lives of property, plant and equipment, impairment of goodwill and of long-lived assets, allowance for doubtful accounts receivable, computation of fair value of assets and liabilities of Companies
acquired and of derivative instruments, contingencies and environmental liabilities, actuarial assumptions utilized in the calculation of employee post-retirement benefit obligation and other similar evaluations. Although these estimates are based
on the Company&#146;s knowledge of current events and actions that the Company may undertake in the future, actual results may vary from these estimates. </P>
<P align="center">
FS - 10 </P>

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    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
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    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
  </TR>
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    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
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<BR>
<P align="justify">
<B>(a) Basis of presentation </B></P>
<P align="justify">
The consolidated financial statements have been prepared in accordance with US GAAP, which differ in certain respects from the statutory financial statements prepared in accordance with the accounting practices derived from the Brazilian Corporation
Law, rules and regulations of the Comiss&atilde;o de Valores Mobili&aacute;rios &#150; the Brazilian Securities Commission or CVM. </P>
<P align="justify">
The U.S. dollar amounts for the periods presented have been translated from the Brazilian real, the Company's primary functional currency, into U.S. dollars, the Company&#146;s reporting currency, in accordance with the criteria set forth in
Statement of Financial Accounting Standards (&#147;SFAS&#148;) No. 52 &#147;Foreign Currency Translation&#148; (&#147;SFAS 52&#148;). Accordingly, the Company has translated all assets and liabilities into U.S. dollars at the exchange rate of
R&#36;1.7713 and R&#36;2.3370 to US&#36;1.00 at December 31, 2007 and December 31, 2008, respectively, and all accounts in the statements of income and cash flows (including amounts relative to local currency indexation and exchange variances on
assets and liabilities denominated in foreign currency) at the average rates prevailing during the applicable periods. Treasury stock transactions and dividends are translated using the exchange rate as of the date of the transaction. The
translation gain or loss resulting from this translation process is included as a component of accumulated other comprehensive loss in stockholders&#146; equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions
denominated in a currency other than the Brazilian real are included in the results of operations as incurred. Certain consolidated foreign subsidiaries have the U.S. dollar as their functional currency since their primary economic environment and
cash flows are generated in this currency. Accordingly, these foreign subsidiaries do not generate gains and losses from exchange rate fluctuations when translating the Company&#146;s consolidated financial statements into the reporting currency
U.S. dollar. </P>
<P align="justify">
Stockholders&#146; equity included in the financial statements presented herein differs from that included in the Company&#146;s statutory accounting records as a result of differences between the variations in the U.S. dollar exchange rate and in
the indices mandated, until June 30, 1997, when Brazil was considered to have a highly inflationary economy, for indexation of the statutory financial statements and adjustments made to reflect the requirements of US GAAP. </P>
<P align="justify">
<B>(b) Basis of consolidation </B></P>
<P align="justify">
The consolidated financial statements include the financial statements of CSN and its majority owned subsidiaries, except for our non-consolidated majority-owned subsidiary Namisa, which we deconsolidated as from December 30, 2008 upon Big Jump
acquisition and dilution of our interest in Namisa, as further detailed in Note 10.</P>
<P align="justify">
All significant intercompany balances and transactions have been eliminated in consolidation. The financial statements of all subsidiaries have been prepared in accordance with US GAAP. </P>
<P align="justify">
<B>(c) Cash and cash equivalents </B></P>
<P align="justify">
Cash equivalents are considered to be all highly liquid temporary cash investments, mainly time deposits, with original maturity dates of three months or less. </P>
<P align="justify">
<B>(d) Short-term investments </B></P>
<P align="justify">
Securities for which the Company has positive intent and ability to hold to maturity are classified as held-to-maturity and measured at amortized cost. Securities that are not classified as held-to-maturity or as trading securities are classified as
available-for-sale, which are recorded at fair value with the changes recognized as a component of accumulated other comprehensive loss. </P>
<P align="justify">
<B>(e) Trade accounts receivable </B></P>
<P align="justify">
Accounts receivable are stated at estimated realizable values. Allowance is provided, when necessary, in an amount considered by management to be sufficient to meet probable future losses related to uncollectible accounts. </P>
<P align="center">
FS - 11 </P>

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    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
  </TR>
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    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
  </TR>
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    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
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<BR>
<P align="justify">
<B>(f) Inventories </B></P>
<P align="justify">
Inventories are  stated at the lower of average cost or replacement or realizable value. Cost  is determined using the average cost method. Costs of production in process and  finished goods include the purchase costs of raw materials and conversion costs  such as direct labor and an allocation of fixed and variable production overheads.  Raw  materials and spare parts are valued at cost including freight, shipping and handling costs. Losses for slow-moving or obsolete inventories are recorded when considered appropriate. The Company holds spare parts that will be used within its operating
cycle which are classified as other current assets rather than inventories. </P>
<P align="justify">
<B>(g) Investments in affiliated companies and other investments </B></P>
<P align="justify">
The Company uses the equity method of accounting for all long-term investments for which it owns at least 20% of the investee&#146;s outstanding voting stock or has the ability to exercise significant influence over operating and financial policies
of the investee. Investments in which the Company has a majority interest, but, through stockholders&#146; agreements, does not have effective management control are also accounted for under the equity method. The equity method requires periodic
adjustments to the investment account to recognize the Company&#146;s proportionate share in the investee&#146;s results, reduced by receipt of investee dividends and interest from stockholders&#146; equity. </P>
<P align="justify">
<B>(h) Property, plant and equipment </B></P>
<P align="justify">
Property, plant and equipment are recorded at cost, including capitalized interest incurred during the construction period of major new facilities. Interest capitalized in foreign currency borrowings excludes the effect of foreign exchange gain and
losses. Depreciation is computed under the straight-line method at rates which take into consideration the useful lives of the related assets, as follows (average): buildings - 25 years; equipment - 15 years; furniture and fixtures - 10 years;
hardware and vehicles - 5 years. Assets under construction are not depreciated until placed into service. </P>
<P align="justify">
Costs of developing iron ore and other mines or expanding the capacity of operating mines are capitalized and charged to operations on the units-of-production method based on the total quantity to be recovered. These costs have not been material for
the years presented. </P>
<P align="justify">
Maintenance and repair expenses, including those related to programmed maintenance of the Company&#146;s blast furnaces, are charged to the cost of production as incurred. Any gain or loss on the disposal of property, plant and equipment are
recognized on disposal. </P>
<P align="justify">
<B>(i) Recoverability of long lived assets </B></P>
<P align="justify">
Management reviews long-lived assets to be held and used in the Company&#146;s business activities, for the purpose of determining and measuring impairment on a recurring basis or when events or changes in circumstances indicate that the carrying
value of an asset or group of assets may not be recoverable. Write-down of the carrying value of assets or groups of assets is made if and when appropriate in accordance with Statement of Financial Accounting Standards No. 144, &#147;Accounting for
the Impairment or Disposal of Long-Lived Assets,&#148; or SFAS 144. In accordance with SFAS 144, the carrying value of long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is separately identifiable and
is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the assets. Fair value is determined primarily by using a discounted cash flow analysis. No impairment
losses have been recorded for any of the periods presented.</P>
<P align="justify">
<B>(j) Goodwill </B></P>
<P align="justify">
Goodwill represents the cost of investments in excess of the fair value of the net identifiable assets acquired and liabilities assumed. The Company adopts SFAS No. 142 (&#147;SFAS 142&#148;), Goodwill and Other Intangible Assets, under which
goodwill is no longer amortized but is tested for impairment at least annually, using a two-step approach that involves identification of reporting units and estimates of fair values. No impairment losses have been recorded for any of the periods
presented. </P>
<P align="center">
FS - 12 </P>

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    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
  </TR>
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    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
  </TR>
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    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
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<P align="justify">
<B>(k) Revenues and expenses </B></P>
<P align="justify">
Revenues and expenses are recognized on the accrual basis. Revenues from the sale of goods are recognized upon delivery to customers, when title is transferred and the client has assumed the significant risks and rewards of ownership in accordance
with the contractual terms. Revenue is not recognized if there are significant uncertainties as to its realization. The Company reflects value-added taxes as a reduction of gross operating revenues. </P>
<P align="justify">
Handling and shipping expenses are classified in the income statement as selling expenses. For the years ended December 31, 2006, 2007 and 2008 those expenses amounted to US&#36;142, US&#36;228 and US&#36;264, respectively. </P>
<P align="center">
FS - 13 </P>

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    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
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    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
  </TR>
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    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
  </TR>
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    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
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<BR>
<P align="justify">
<B>(l) Asset retirement obligations </B></P>
<P align="justify">
Retirement of long-lived assets is accounted for in accordance with SFAS 143-&#147;Accounting for Asset Retirement Obligations.&#148; Our retirement obligations consist primarily of estimated closure costs, the initial measurement of which is
recognized as a liability discounted to present values and subsequently accreted through earnings. An asset retirement cost equal to the initial liability is capitalized as part of the related asset&#146;s carrying value and depreciated over the
asset&#146;s useful life. The provisions of SFAS 143 amounted to US&#36;6 as of December 31, 2008. </P>
<P align="justify">
<B>(m) Environmental and remediation costs </B></P>
<P align="justify">
The Company provides for remediation costs and penalties when a loss is probable and the amount of associated costs is reasonably determinable. Generally, the timing of remediation accrual coincides with completion of a feasibility study or the
commitment to a formal plan of action. </P>
<P align="justify">
Expenditures relating to ongoing compliance with environmental regulations are charged to earnings or capitalized, as appropriate. Capitalization is considered appropriate when the expenditures relate to items that will continue to provide benefits
to the Company and primarily pertain to the acquisition and installation of equipment for pollution control and/or prevention. These ongoing programs are designed to minimize the environmental impact of the Company&#146;s operations and are also
expected to reduce costs that might otherwise be incurred on cessation of mining activities. </P>
<P align="justify">
<B>(n) Research and development costs </B></P>
<P align="justify">
Expenditures for research and development of new products for the year ended December 31, 2008 were US&#36;17 (US&#36;19 in 2007 and US&#36;21 in 2006). All such costs are expensed as incurred. </P>
<P align="justify">
<B>(o) Accrued/ Prepaid pension cost </B></P>
<P align="justify">
The Company participates in a defined contribution pension plan that provides pension benefits for its employees. Expense is recognized as the amount of the required contribution for the period and is recorded on the accrual basis. </P>
<P align="justify">
Accrued pension costs are determined in accordance with SFAS No. 87 &#147;Employers Accounting for Pensions&#148; (&#147;SFAS 87&#148;). Amortization of the net transition obligation existing at January 1, 1995, when the Company first adopted SFAS
87, has been computed retroactively as if it were established on January 1, 1989, which is the date that SFAS 87 first became applicable for non-U.S. pension funds. The Company provides disclosures related to its employee pension and post-retirement
benefits in accordance with SFAS No. 132 &#147;Employers&#146; Disclosure About Pensions and Other Post-retirement Benefits&#148; and SFAS No. 132 (revised 2003) &#147;Employers&#146; Disclosure About Pensions and Other Post-retirement Benefits, an
amendment of FASB Statements No. 87, 88 and 106&#148; (&#147;SFAS 132R&#148;). </P>
<P align="justify">
In September 2006, the FASB issued Statement of Financial Accounting Standards No. 158, "Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans - an amendment of FASB Statements No. 87, 88, 106 and 132(R)" ("SFAS 158").
SFAS 158 requires an entity to recognize in its statement of financial position the overfunded or underfunded status of its defined benefit employee pension and postretirement plans, measured as the difference between the fair value of the plan
assets and the benefit obligation. SFAS 158 also requires an entity to recognize changes in the funded status of a defined benefit employee pension or postretirement plan within accumulated other comprehensive income, net of tax, to the extent such
changes are not recognized in earnings as components of periodic net benefit cost. The Company adopted the aforementioned provisions of SFAS 158 on December 31, 2006. The impact of adopting SFAS 158 on the Company's consolidated financial position
is discussed further in Note 15. Additionally, SFAS 158 requires companies to measure plan assets and benefit obligations at their year-end balance sheet date. This requirement, which is effective for fiscal years ending after December 15, 2008, has
no effect on the Company since its employee pension or postretirement medical plan assets and liabilities are already measured as of December 31, its year-end balance sheet date.</P>
<P align="center">
FS - 14 </P>

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    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
  </TR>
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    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
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<BR>
<P align="justify">
<B>(p) Accrual for contingencies and disputed taxes payable </B></P>
<P align="justify">
The Company accounts for contingencies in accordance with SFAS 5 &#147;Accounting for Contingencies&#148;. The Company's contingencies were estimated by management and were substantially based upon known facts and circumstances, management's
experience and the opinions of the Company's tax and legal advisors. The Company records accruals for contingencies for lawsuits which the Company classifies as probable losses. Legal costs are expensed as incurred. Additionally, the Company has (i)
certain tax liabilities for which the Company is disputing payment with the applicable taxing authorities, and (ii) certain tax liabilities for which the Company is asserting a right to use certain tax credits to offset such tax liabilities. These
items are referred to as disputed taxes payable. Accruals for contingencies, disputed taxes payable and the
related legal deposits requested by the courts for those disputes are updated by the interest rate charged by the Brazilian government (the SELIC rate) and inflation, when applicable. </P>
<P align="justify">
<B>(q) Employee profit participation plan </B></P>
<P align="justify">
The parent company sponsors an employee profit participation plan for all parent company employees, which is based on annual EBITDA (earnings before interest, income taxes, depreciation and amortization) determined on the basis of the Company&#146;s
statutory financial statements. The plan establishes the distribution of up to a maximum of twice the normal payroll paid in the month of December, provided the EBITDA margin (EBITDA as a percentage of revenues) is equal to or greater than 40% (in
2007 it was limited to one month&#146;s salary per employee plus a specified amount of R&#36;1,054 (US&#36;595)). In 2008, each employee was paid two month salary. Expenses related to the employee profit participation plan in cost of sales, general
and administrative expenses and selling expenses amounted to US&#36;22, US&#36;30 and US&#36;30 in 2006, 2007 and 2008, respectively. </P>
<P align="justify">
<B>(r) Compensated absences </B></P>
<P align="justify">
Compensated absences are accrued over the vesting period. </P>
<P align="justify">
<B>(s) Income taxes </B></P>
<P align="justify">
The Company accounts for income taxes in accordance with SFAS No. 109 &#147;Accounting for Income Taxes&#148;, which requires the application of the assets and liability method of accounting for income taxes. The effects of US GAAP adjustments, as
well as differences between the tax basis of assets and liabilities and the amounts included in these financial statements, have been recognized as temporary differences for the purpose of recording deferred income taxes. Deferred tax assets and
liabilities are measured using enacted tax rates in effect for the years in which those temporary differences are expected to be recovered or settled. Under SFAS No. 109, the effect on deferred tax assets and liabilities of changes in tax rates is
recognized in income in the period that includes enactment date. A valuation allowance is recorded when management believes it is more likely than not that some portion or all of the deferred tax assets will not be realized. </P>
<P align="justify">
Beginning with the adoption of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (FIN 48) as of January 1, 2007, the Company recognizes the effect of income tax positions only if those positions are more likely than not of being
sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. Prior to the
adoption of FIN 48, the Company recognized the effect of income tax positions only if such positions were probable of being sustained. </P>
<P align="justify">
The Company records interest and penalties related to unrecognized tax benefits in interest expense (financial income (expense), net) in the consolidated income statements. </P>
<P align="center">
FS - 15 </P>

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    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
  </TR>
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    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
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<BR>
<P align="justify">
<B>(t) Statements of cash flows</B> </P>
<P align="justify">
Short-term investments that have a ready market and original maturity, when purchased, of 90 days or less are considered to be cash equivalents. </P>
<P align="justify">
<B>(u) Earnings per share </B></P>
<P align="justify">
The Company presents its earnings per share in accordance with SFAS No. 128 &#147;Earnings Per Share&#148;. Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the year.
Diluted earnings per share is computed in a manner consistent with that of basic earnings per share while giving effect to all potentially dilutive common shares that were outstanding during the year. The Company does not have any potentially
dilutive common shares outstanding and, accordingly, diluted earnings per share is equal to basic earnings per share.</P>
<P align="justify">
<B>(v) Concentration of credit risk </B></P>
<P align="justify">
Financial instruments that potentially subject CSN to concentrations of credit risk are cash and cash equivalents, trade accounts receivable and derivatives. CSN limits its credit risk associated with cash and cash equivalents and derivatives by
placing its investments with (1) highly-rated financial institutions in short-term investments and (2) Brazilian government notes. With respect to trade accounts receivable, CSN limits its credit risk by performing ongoing credit evaluations and,
depending on the results of the evaluation, requiring letters of credit, guarantees or collateral. CSN&#146;s products are utilized in a wide variety of industry segments, therefore accounts receivable and sales are not concentrated in one single
industry and, accordingly, management does not believe significant concentration of credit risk with respect to any one industry exists.</P>
<P align="justify">
<B>(w) Comprehensive income </B></P>
<P align="justify">
SFAS No. 130 &#147;Reporting Comprehensive Income&#148; (&#147;SFAS 130&#148;) requires that companies report changes in the equity of a business enterprise during a period resulting from transactions and other events and circumstances from
non-owner sources. The Company has adopted SFAS 130 for all years presented and has included comprehensive income as part of the consolidated statements of changes in stockholders&#146; equity. </P>
<P align="justify">
<B>(x) Interest attributed to stockholders</B> </P>
<P align="justify">
As from January 1, 1996, Brazilian corporations are allowed to attribute interest on stockholders&#146; equity. The calculation is based on the stockholders&#146; equity amounts as stated in the statutory accounting records and the interest rate
applied may not exceed the long-term interest rate (&#147;TJLP&#148;) determined by the Brazilian Central Bank (approximately 7.8%, 6.4% and 6.3% for the years 2006, 2007 and 2008 respectively). Also, such interest may not exceed the greater of 50%
of net income for the year or 50% of retained earnings plus accumulated net income and unrealized income reserves, determined in each case on the basis of the statutory financial statements. The amount of interest attributed to stockholders is
deductible for income tax purposes. Accordingly, the benefit to the Company, as opposed to making a dividend payment, is a reduction in income tax charge equivalent to the statutory rate applied to such amount. Income tax is imposed on interest
payments at the rate of 15%. The Company opted to pay both dividends and such tax-deductible interest to its stockholders, and has therefore accrued the amounts due as of December 31, 2008 and 2007 with a direct charge to stockholders&#146; equity.</P>
<P align="justify">
<B>(y) Treasury stock </B></P>
<P align="justify">
Treasury stock consists of the Company&#146;s own stock which has been issued and subsequently reacquired by the Company and has not been reissued or cancelled. Such treasury stock is carried at cost of acquisition. </P>
<P align="center">
FS - 16 </P>

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    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
  </TR>
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    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
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<BR>
<P align="justify">
<B>(z) Segment information </B></P>
<P align="justify">
SFAS No. 131 &#147;Disclosures about Segments of Enterprise and Related Information&#148; (&#147;SFAS 131&#148;) requires that a business enterprise supplementally disclose certain financial information about its various and distinct operating
activities. Such information is to be presented from the point of view of how operating and financial decisions are made for each business sector. The Company has adopted SFAS 131 for all years presented, as further disclosed in Note 19. </P>
<P align="justify">
<B>(aa) Derivative financial instruments </B></P>
<P align="justify">
The Company accounts for derivative financial instruments pursuant to SFAS No. 133, &#147;Accounting for Derivative Instruments and Hedging Activities&#148;, as amended. This standard requires that all derivative instruments be recognized in the
financial statements and measured at fair value regardless of the purpose or intent for holding them. Changes in the fair value of derivative instruments are recognized periodically in income as the Company recognizes all derivative financial
instruments as non-hedge transactions. Gain and losses are classified as financial income and expense in the statements of income. See Note 21 for additional information. </P>
<P align="justify">
<B>(ab) Concessions </B></P>
<P align="justify">
The Company holds certain governamental concessions which are accounted for in accordance with SFAS 13 - &#147;Accounting for Leases&#148;. Accordingly, the contracts are classified as operating leases or capital leases dependent upon whether
certain criteria are met. The Company&#146;s port facilities concession of Tecon is classified as an operating lease. </P>
<P align="justify">
<B>3 Recently issued accounting pronouncements </B></P>
<P align="justify">
The following new accounting standards have been issued and were adopted by the Company as of December 31, 2008: </P>
<P align="justify">
<I>FSP No. FAS 115- 1 and 124- 1, "The Meaning of Other-Than-Temporary Impairment and its Application to Certain Investments" (FSP No. FAS 115- 1 and 124- 1). </I>The FASB issued FSP No. FAS 115-1 and 124-1 in November 2005, which was effective for
us beginning January 1, 2006. This FSP addresses the determination as to when an investment is considered impaired, whether that impairment is other than temporary, and the measurement of an impairment loss. This FSP also includes accounting
considerations subsequent to the recognition of an other- than-temporary impairment and requires certain disclosures about unrealized losses that have not been recognized as other- than- temporary impairments. The guidance in this FSP amends SFAS
No. 115, "Accounting for Certain Investments in Debt and Equity Securities,&#148; and SFAS No. 124, " Accounting for Certain Investments Held by Not-for-Profit Organizations", and APB Opinion No. 18. The adoption of FSP No. FAS 115-1 and 124-1 did
not have a material impact on our consolidated results of operations, cash flows or financial position. </P>
<P align="justify">
<I>SFAS No. 155, "Accounting for Certain Hybrid Financial Instruments&#151;an amendment to FASB Statements No. 133 and 140" (SFAS No. 155). </I>In February 2006, the FASB issued SFAS No. 155, which amends SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" and SFAS No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities." SFAS No. 155 allows financial instruments that have embedded derivatives to be accounted for at
fair value at acquisition, at issuance, or when a previously recognized financial instrument is subject to a remeasurement (new basis) event, on an instrument-by-instrument basis, in cases in which a derivative would otherwise have to be bifurcated.
SFAS No. 155 is effective for us for all financial instruments acquired, issued, or subject to remeasurement after January 1, 2007, and for certain hybrid financial instruments that have been bifurcated prior to the effective date, for which the
effect is to be reported as a cumulative-effect adjustment to beginning retained earnings. The adoption of SFAS No. 155 did not have any material impact on our consolidated results of operations, cash flows or financial position.</P>
<P align="justify">
<I>SFAS No. 156, "Accounting for Servicing of Financial Assets&#151;an amendment to FASB Statement No. 140" (SFAS No. 156). </I>In March 2006, the FASB issued SFAS No. 156, which amends SFAS No. 140, "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities.&#148; SFAS No. 156 requires recognition of a servicing asset
or liability when an entity enters into arrangements to service financial instruments in certain situations. These servicing assets or servicing liabilities are required to be initially measured at fair value, if practicable. SFAS No. 156 also
allows an entity to subsequently measure its servicing assets or servicing liabilities using either an amortization method or a fair value method. SFAS No. 156 is effective for us as of January 1, 2007, and must be applied prospectively, except
where an entity elects to remeasure separately recognized existing arrangements and reclassify certain available-for-sale securities to trading securities, any effects must be reported as a cumulative- effect adjustment to retained earnings. The
adoption of SFAS No. 156 did not have any material impact on our consolidated results of operations, cash flows or financial position.</P>
<P align="center">
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    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
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    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
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    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
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<P align="justify"><I>SFAS No. 157, "Fair Value Measurements" (SFAS No. 157). </I>In September 2006, the FASB issued SFAS No. 157, which defines fair value, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value
measurements. SFAS No. 157 does not require any new fair value measurements. For us, SFAS No. 157 was effective as of January 1, 2008. The adoption of SFAS No. 157 did not have any material impact on our consolidated results of operations, cash
flows or financial position. In February 2008, the FASB approved FSP FAS 157-2, which grants a one-year deferral of SFAS 157&#146;s fair value measurement requirements for nonfinancial assets and liabilities, except for items that are required to be
recognized or disclosed at fair value. In October 2008, the FASB issued FSP No. FAS 157-3, &#147;Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active&#148; (&#147;FSP FAS 157-3&#148;), which clarifies the
application of FASB Statement No. 157, &#147;Fair Value Measurements&#148; (&#147;FAS 157&#148;) in an inactive market. The intent of this FSP is to provide guidance on how the fair value of a financial asset is to be determined when the market for
that financial asset is inactive. FSP FAS 157-3 states that determining fair value in an inactive market depends on the facts and circumstances, requires the use of significant judgment and in some cases, observable inputs may require significant
adjustment based on unobservable data. Regardless of the valuation technique used, an entity must include appropriate risk adjustments that market participants would make for nonperformance and liquidity risks when determining fair value of an asset
in an inactive market. FSP FAS 157-3 was effective upon issuance. The Company has no financial assets in inactive markets. </P>
<P align="justify">
<I>SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities" (SFAS No. 159). </I>In February 2007, the FASB issued SFAS No. 159, which permits entities to choose to measure many financial instruments and certain other
items at fair value. For us, SFAS No. 159 was effective as of January 1, 2008 and had no impact on amounts presented for periods prior to the effective date. We chose not to measure items subject to SFAS No. 159 at fair value, unless required by
other standards. </P>
<P align="justify">
<I>SFAS No. 158, "Employer&#146;s Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and 132(R)"</I> (SFAS No. 158). In September 2006, the FASB issued SFAS No. 158, which changes
the recognition and disclosure provisions and measurement date requirements for an employer&#146;s accounting for defined benefit pension and other postretirement plans. The recognition and disclosure provisions require an employer to (1) recognize
the funded status of a benefit plan &#151; measured as the difference between plan assets at fair value and the benefit obligation &#150; in its statement of financial position, (2) recognize as a component of OCI, net of tax, the gains or losses
and prior service costs or credits that arise during the period but are not recognized as components of net periodic benefit cost, and (3) disclose in the notes to financial statements certain additional information. SFAS No. 158 does not change the
amounts recognized in the income statement as net periodic benefit cost. We were required to initially recognize the funded status of our defined benefit pension and other postretirement plans and to provide the required additional disclosures as of
December 31, 2006. Retrospective application is not permitted. The adoption of SFAS No. 158 recognition and disclosure provisions are discussed in Note 15 to these consolidated financial statements. </P>
<P align="justify">
<I>SAB No. 108, "Considering the Effects of Prior Year Misstatements When Quantifying Misstatements in Current Year Financial Statements" (SAB No. 108). </I>In September 2006 the SEC issued SAB No. 108, which provides interpretive guidance on how
the effects of the carryover or reversal of prior year misstatements should be considered in quantifying a current year misstatement. Traditionally, there have been two widely-recognized approaches for quantifying the effects of financial statement
misstatements. The income statement approach focuses primarily on the impact of a misstatement on the income statement &#151; including the reversing effect of prior year misstatements &#151; but its use can lead to the accumulation of misstatements
in the balance sheet. The balance sheet approach, on the other hand, focuses primarily on the effect of correcting the period-end balance sheet with less emphasis on the reversing effects of prior year errors on the income statement. The SEC staff
believes that registrants should quantify errors using both a balance sheet and an income statement approach (a " dual approach") and evaluate whether either approach results in quantifying a misstatement that,
when all relevant quantitative and qualitative factors are considered, is material.<i> </i>SAB No. 108 was effective for our year ended December 31, 2006. SAB No. 108 permits existing public companies to initially apply its provisions either by (i)
restating prior financial statements as if the "dual approach" had always been used or (ii), under certain circumstances, recording the cumulative effect of initially applying the "dual approach" as adjustments to the carrying values of assets and
liabilities as of January 1, 2006 with an offsetting adjustment recorded to the opening balance of retained earnings. The adoption of SAB No. 108 did not have any material impact on our consolidated results of operations, cash flows or financial
position. </P>
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    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
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    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
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    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
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<BR>
<P align="justify"><I>FSP No. AUG AIR- 1, "Accounting for Planned Major Maintenance Activities," (FSP No. AUG AIR- 1). </I>In September 2006, the FASB Staff issued FSP No. AUG AIR- 1. This FSP prohibits the use of the accrue-in-advance method of accounting for planned
major maintenance activities in annual and interim financial reporting periods, if no liability is required to be recorded for an asset retirement obligation based on a legal obligation for which the event obligating the entity has occurred. The FSP
also requires disclosures regarding the method of accounting for planned major maintenance activities and the effects of implementing the FSP. The guidance in this FSP is effective for us as of January 1, 2007 and has been applied retrospectively
for all financial statements presented. The adoption of FSP No. AUG AIR-1 did not have any material impact on our consolidated results of operations, cash flows or financial position, as we already apply the direct expensing method of accounting.</P>
<P align="justify">
<I>EITF Issue No. 06-3, "How Taxes Collected from Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement (That Is, Gross versus Net Presentation)" (EITF No. 06-3). </I>In June 2006, the EITF reached a
consensus on EITF No. 06-3 to address any tax assessed by a governmental authority that is directly imposed on a revenue-producing transaction between a seller and a customer and may include, but are not limited to, sales, use, value added, and some
excise taxes. For taxes within the issue&#146;s scope, the consensus requires that entities present such taxes on either a gross (i.e. included in revenues and costs) or net (i.e. exclude from revenues) basis according to their accounting policies,
which should be disclosed. If such taxes are reported gross and are significant, entities should disclose the amounts of those taxes. Disclosures may be made on an aggregate basis. The consensus is effective for us beginning January 1, 2007. The
adoption of EITF No. 06-3 did not have any material impact on our consolidated results of operations, cash flows or financial position. Our policy is and will continue to be to classify such taxes as a deduction from operating revenues. </P>
<P align="justify">
<I>EITF Issue No. 06-6, "Debtor&#146;s Accounting for a Modification (or exchange) of Convertible Debt Instruments" (EITF No. 06-6). </I>In November 2006, the EITF reached a consensus on EITF No. 06-6. EITF No. 06-6 addresses how a modification of a
debt instrument (or an exchange of debt instruments) that affects the terms of an embedded conversion option should be considered in the issuer&#146;s analysis of whether debt extinguishment accounting should be applied, and further addresses the
accounting for a modification of a debt instrument (or an exchange of debt instruments) that affects the terms of an embedded conversion option when extinguishment accounting is not applied. EITF No. 06-6 applies to modifications (or exchanges)
occurring in interim or annual reporting periods beginning after November 29, 2006, regardless of when the instrument was originally issued. Early application is permitted for modifications (or exchanges) occurring in periods for which financial
statements have not been issued. There were no modifications to, or exchanges of, any of our debt instruments within the scope of EITF No. 06-6 in 2007 or 2008. The impact to us of applying EITF No. 06-6 in subsequent periods will be dependent upon
the nature of any modifications to, or exchanges of, any debt instruments within the scope of EITF No. 06-6. </P>
<P align="justify">
The following new accounting standards have been issued, but have not yet been adopted by the Company as of December 31, 2008. </P>
<P align="justify">
In December 2007, the FASB issued SFAS No. 141 (revised 2007), &#147;Business Combination,&#148; which replaces FASB Statement No. 141, Business Combinations. This Statement retains the fundamental requirements in Statement No. 141 that the
acquisition method of accounting (which Statement No. 141 called the purchase method) be used for all business combinations and for an acquirer to be identified for each business combination. This statement defines the acquirer as the entity that
obtains control of one or more businesses in the business combination and establishes the acquisition date as the date that the acquirer achieves control. Statement 141 did not define the acquirer, although it included guidance on identifying the
acquirer, as does this statement. This statement&#146;s scope is broader than that of Statement No. 141, which applied only to business combinations in which control was obtained by transferring consideration. The result of applying
Statement No. 141&#146;s guidance on recognizing and measuring assets and liabilities in a step acquisition was to measure them at a blend of historical costs and fair values, a practice that provided less relevant, representationally faithful, and
comparable information than will result from applying this statement. In addition, this statement&#146;s requirement to measure the noncontrolling interest in the acquiree at fair value will result in recognizing the goodwill attributable to the
noncontrolling interest in addition to that attributable to the acquirer, which improves the completeness of the resulting information and makes it more comparable across entities. By applying the same method of accounting, the acquisition method to
all transactions and other events in which one entity obtains control over one or more other businesses, this statement improves the comparability of the information about business combinations provided in financial reports. This statement applies
prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. An entity may not apply it before that date. The effective date of this
statement is the same as that of the related FASB Statement No. 160, &#147;Noncontrolling Interests in Consolidated Financial Statements.&#148; The Company will apply such pronouncement on a prospective basis for each new business combination.</P>
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    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
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    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
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    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
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<P align="justify">In December 2007, FASB issued SFAS No. 160, &#147;Noncontrolling Interests in Consolidated Financial Statements &#150; an amendment to ARB No. 51,&#148; which clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the
consolidated entity that should be reported as equity in the consolidated financial statements. This statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008 (that is, January 1,
2009, for entities with calendar year-ends). Earlier adoption is prohibited. The effective date of this statement is the same as that of the related Statement No. 141(R). This statement shall be applied prospectively as of the beginning of the
fiscal year in which this statement is initially applied, except for the presentation and disclosure requirements. The presentation and disclosure requirements shall be applied retrospectively for all periods presented. We are currently evaluating
the impact of such new pronouncement in our consolidated financial statements. </P>
<P align="justify">
SFAS No. 161, <I>&#147;Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133&#148; (SFAS No. 161).</I> In March 2008, the FASB issued SFAS No. 161, which requires enhanced disclosures about an
entity&#146;s derivative and hedging activities and thereby improves the transparency of financial reporting. This Statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with
early application encouraged. This Statement encourages, but does not require, comparative disclosures for earlier periods at initial adoption. </P>
<P align="justify">
In April 2008, the FASB issued FSP FAS 142-3, &#147;<I>Determination of the Useful Life of Intangible Assets&#148;. </I>FSP FAS 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the
useful life of a recognized intangible asset under Statement No. 142, &#147;<I>Goodwill and Other Intangible Assets&#148;</I>. For a recognized intangible asset, an entity shall disclose information that enables financial statement users to assess
the extent to which the expected future cash flows associated with the asset are affected by the entity&#146;s intent and/or ability to renew or extend the arrangement. FSP FAS 142-3 is effective for financial statements issued for fiscal years
beginning after December 15, 2008, and interim periods within those fiscal years. Early adoption is prohibited. We are currently evaluating the potential impact of adopting these statements on our consolidated financial position or results of
operations. </P>
<P align="justify">
SFAS No. 162,<I> &#147;The Hierarchy of Generally Accepted Accounting Principles&#148; (SFAS No. 162).</I> In May 2008, the FASB issued SFAS No. 162, which identifies the sources of accounting principles and the framework for selecting the
principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States (US GAAP). This Statement shall be effective 60 (sixty) days
following the SEC&#146;s approval of the Public Company Accounting Oversight Board (&#147;PCAOB&#148;) amendments to AU Section 411, &#147;The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles&#148;. </P>
<P align="justify">
In June 2008, the EITF reached a consensus on Issue No. 07-5, &#147;<I>Determining Whether an Instrument (or Embedded Feature) is Indexed to an Entity&#146;s Own Stock</I>&#148;. EITF 07-5 provides guidance for determining whether an equity-linked
financial instrument (or embedded feature) is indexed to an entity&#146;s own stock, which is the first part of the scope exception in paragraph 11(a) of Statement 133. If an instrument that has the characteristics of a derivative instrument is
indexed to an entity&#146;s own stock, it is necessary to evaluate whether it is or would be classified in stockholders&#146;s equity. EITF 07-5 applies to a freestanding financial instrument or embedded feature that has all the characteristics of
a derivative in accordance with Statement 133. Accordingly, the company must use two-step approach in order to make this
evaluation as follows: (a) evaluate the instrument&#146;s contingent exercise provisions, if any; and (b) evaluate the instrument&#146;s settlement provisions. This Issue is effective for financial statements issued for fiscal years beginning after
December 15, 2008, and interim periods within those fiscal years. Earlier application by an entity that has previously adopted an alternative accounting policy is not permitted. We are currently evaluating the impact of adoption of EITF 07-5 on our
consolidated financial position or results of operations. </P>
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    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
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    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
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<P align="justify">In September 2008, the EITF reached a consensus on Issue No. 08-5, <I>&#147;Issuer&#146;s Accounting for Liabilities Measured at Fair Value with a Third-Party Credit Enhancement&#148;. </I>EITF 08-5 requires issuers of liability instruments with
third-party credit enhancements to exclude the effect of the credit enhancement when measuring the liability&#146;s fair value. The effect of initially adopting the requirements is included in the change in the instrument&#146;s fair value in the
period of adoption. Entities are required to disclose the valuation technique used to measure the liabilities and to discuss any changes in the valuation techniques used to measure those liabilities in prior periods. Entities will also need to
disclose the existence of a third-party credit enhancement on the entity&#146;s issued debt. EITF 08-5 is effective for the reporting period beginning after December 15, 2008. Early adoption is permitted. We are currently evaluating the potential
impact of adopting this statement on our consolidated financial position or results of operations. </P>
<P align="justify">
In September 2008, the FASB issued FSP FAS 133-1 and FIN 45-4, &#147;<I>Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No. 45; and Clarification of the Effective Date of
FASB Statement No. 161&#148;. </I>FSP FAS 133-1 and FIN 45-4 amends Statement No. 133, &#147;<I>Accounting for Derivative Instruments and Hedging Activities&#148;</I>, and FIN 45, &#147;<I>Guarantor&#146;s Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of Others&#148;</I>, and clarifies Statement No. 161, &#147;<I>Disclosures about Derivative Instruments and Hedging Activities&#148;</I>. This FSP amends Statement No. 133 to require
disclosures by sellers of credit derivatives, including credit derivatives embedded in a hybrid instrument. This FSP also amends FIN 45 to require an additional disclosure about the current status of the payment/performance risk of a guarantee.
Further, FSP FAS 133-1 and FIN 45-4 clarifies the FASB&#146;s intent that the disclosures required by Statement No. 161 should be provided for any reporting period (annual or interim) beginning after November 15, 2008. The provisions of this FSP
that amend Statement No. 133 and FIN 45 are effective for reporting periods (annual or interim) ending after November 15, 2008. Early adoption is encouraged. We are currently evaluating the potential impact of adopting these statements on our
consolidated financial position or results of operations. </P>
<P align="justify">
In November 2008, the EITF reached consensus on Issue No. 08-6, <I>&#147;Equity Method Investment Accounting Considerations&#148;</I> (&#147;EITF 08-6&#148;), which clarifies the accounting for certain transactions and impairment considerations
involving equity method investments. The intent of EITF 08-6 is to provide guidance on (i) determining the initial carrying value of an equity method investment, (ii) performing an impairment assessment of an underlying indefinite-lived intangible
asset of an equity method investment, (iii) accounting for an equity method investee&#146;s issuance of shares, and (iv) accounting for a change in an investment from the equity method to the cost method. EITF 08-6 is effective for our fiscal year
beginning January 1, 2009 and is to be applied prospectively. We are currently evaluating the potential impact of adopting this statement on our consolidated financial position or results of operations. </P>
<P align="justify">
In December 2008, the FASB issued FSP No. FAS 132(R)-1, <I>&#147;Employers&#146; Disclosures about Post-Retirement Benefit Plan Assets&#148; </I>(&#147;FSP FAS 132(R)-1&#148;), which amends FASB Statement No. 132 &#147;Employers&#146; Disclosures
about Pensions and Other Post-Retirement Benefits&#148; (&#147;FAS 132&#148;), to provide guidance on an employer&#146;s disclosures about plan assets of a defined benefit pension or other post-retirement plan. The objective of FSP FAS 132(R)-1 is
to require more detailed disclosures about employers&#146; plan assets, including employers&#146; investment strategies, major categories of plan assets, concentrations of risk within plan assets, and valuation techniques used to measure the fair
value of plan assets. FSP FAS 132(R)-1 is effective for our fiscal year beginning January 1, 2009. Upon initial application, the provisions of this FSP are not required for earlier periods that are presented for comparative purposes. We are
currently evaluating the potential impact of adopting this statement on our defined benefit pension and post-retirement benefit plan disclosures. </P>
<P align="justify">
In April 2009, the FASB issued FSP FAS 157-4, &#147;<I>Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly&#148;. </I>FSP FAS 157-4
provides additional guidance for estimating fair value in accordance with Statement No. 157, &#147;<I>Fair Value Measurements&#148;</I>, when the volume and level of activity for the asset or liability have significantly decreased and provides
additional guidance on the Statement No. 157 disclosure requirements. This FSP also includes guidance on identifying circumstances
that indicate a transaction is not orderly. FSP FAS 157-4 is effective for interim and annual reporting periods ending after June 15, 2009, and should be applied prospectively. Early adoption is permitted for periods ending after March 15, 2009.
Earlier adoption for periods ending before March 15, 2009 is not permitted. If a reporting entity elects to adopt early either FSP FAS 115-2 and FSP FAS 124-2, &#147;<i>Recognition and Presentation of Other-Than-Temporary Impairment&#148;</i>, or
FSP FAS 107-1 and APB 28-1, &#147;<i>Interim Disclosures about Fair Value of Financial Instruments&#148;</i>, the reporting entity also is required to adopt early this FSP. Additionally, if the reporting entity elects to adopt early this Statement,
FSP FAS 115-2 and FSP FAS 124-2 also must be adopted early. This FSP does not require disclosures for earlier periods presented for comparative purposes at initial adoption. In periods after initial adoption, this FSP requires comparative
disclosures only for periods ending after initial adoption. We are currently evaluating the potential impact of adopting these statements on our consolidated financial position or results of operations. </P>
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    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
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    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
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    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
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<BR>
<P align="justify">In April 2009 the FASB issued FSP FAS 141(R)-1, <I>Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies. </I>FSP FAS 141(R)-1 amends the provisions in Statement No. 141(R), <I>Business
Combinations</I>, for the initial recognition and measurement, subsequent measurement and accounting, and disclosures for assets and liabilities arising from contingencies in business combinations. No subsequent accounting guidance is provided in
the FSP, and the FASB expects an acquirer to develop a systematic and rational basis for subsequently measuring and accounting for acquired contingencies depending on their nature. FSP FAS 141(R)-1 is effective for contingent assets or contingent
liabilities acquired in business combinations for which the acquisition date is in or after the beginning of the first annual reporting period beginning on or after December 15, 2008. This is the same effective date as Statement No. 141(R). We are
currently evaluating the potential impact of adopting these statements on our consolidated financial position or results of operations. </P>
<P align="justify">
In May 2009 the FASB issued SFAS No. 165, &#147;<I>Subsequent Events</I>&#148;, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are
available to be issued. SFAS 165 sets forth the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial
statements, the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements and the disclosures that an entity should make about events or transactions that occurred
after the balance sheet date. SFAS 165 becomes effective to interim or annual financial periods ending after June 15, 2009. We do not expect any material impact from adoption of SFAS 165 on our consolidated financial position or results of
operations since we already evaluate events or transactions that may affect recognition or disclosure in the financial statements. </P>
<P align="justify">
In June 2009, the FASB issued SFAS No. 166, &#147;<I>Accounting for Transfers of Financial Assets &#150; an amendment of Statement No. 140</I>&#148;, which improves the relevance, representational faithfulness and comparability of the information
that a reporting entity provides in its financial statements about a transfer of financial assets; the effects of a transfer on its financial position, financial performance and cash flows; and a transferor&#146;s continuing involvement, if any, in
transferred financial assets. This Statement must be applied as of the beginning of each reporting entity&#146;s first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period and for
interim and annual reporting periods thereafter. Earlier application is prohibited. This Statement must be applied to transfers occurring on or after the effective date. We are currently evaluating the impact of adoption of SFAS 166 on our
consolidated financial position or results of operations. </P>
<P align="justify">
In June 2009, the FASB issued SFAS No. 167, &#147;<I>Amendments to FASB Interpretation No. 46(R)</I>&#148;, which improves financial reporting by enterprises involved with variable interest entities. The Board developed this pronouncement to address
(1) the effects on certain provisions of FASB Interpretation No. 46 (revised December 2003), &#147;<I>Consolidation of Variable Interest Entities</I>&#148;, as a result of the elimination of the qualifying special-purpose entity concept in FASB
Statement No. 166, &#147;Accounting for Transfers of Financial Assets&#148;, and (2) constituent concerns about the application of certain key provisions of Interpretation 46(R), including those in which the accounting and disclosures under the
Interpretation do not always provide timely and useful information about an enterprise&#146;s involvement in a variable interest entity. This Statement shall be effective as of the beginning of each reporting entity&#146;s first annual reporting
period that begins after November 15, 2009, for interim periods within that first annual reporting period, and for interim and annual reporting periods thereafter. Earlier application is prohibited. We are currently evaluating the impact of adoption
of SFAS 167 on our consolidated financial position or results of operations. </P>
<P align="center">
FS - 22 </P>

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<H5 align="left" style="page-break-before:always"></H5>
<A name="page_f27"></A>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <TR>
    <TD width=100%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<P align="justify">
<B>4 Insurance claim </B></P>
<P align="justify">
On January 22, 2006, we were affected by an accident involving equipment adjacent to Blast Furnace No. 3, mainly impacting our powder collecting system. As a result of this accident the equipment production was interrupted until the end of the first
semester of 2006. The cause of the accident was expressly covered by the terms of the insurance policy, as formally confirmed by the insurance company. The total losses resulting from this accident were estimated in approximately US&#36;650, of
which we received payment of US&#36;360 during 2006. </P>
<P align="justify">
Based on preliminary reports issued by independent consultants and on the confirmation of the insurance coverage by the insurance company, we recognized up to December 31, 2006, the amount of US&#36;342 (R&#36;730 million) related to costs incurred
to purchase slabs from third-party sources and fixed expenses as an offset to cost of sales and US&#36;9 (R&#36;18 million) as an offset to cost of sales corresponding to the income in the write-off of damaged assets (net book value of approximately
US&#36;81 (R&#36;174 million). </P>
<P align="justify">
At December 31, 2008, we reached a final agreement with the reinsurance companies to recover US&#36;520 (R&#36;1,031 million) of our losses. Accordingly, we received the outstanding balance as of December 31, 2007 of US&#36;105 (R&#36;186 million)
and an additional amount of US&#36;55 (R&#36;183 million), recorded as other operating income.</P>
<P align="justify">
<B>5 Business acquisitions </B></P>
<P align="justify">
<B><U>CFM (Cia. de Fomento Mineral)</U> </B></P>
<P align="justify">
In order to strengthen the Company&acute;s position as a player in the iron ore market, the Company acquired 100% of the capital of Companhia de Fomento Mineral e Participa&ccedil;&otilde;es (&#147;CFM&#148;), a mining company located in the State
of Minas Gerais, for US&#36;400 and additional US&#36;40 in case no contingent liabilities were raised. In October 2008, the Company was released from paying this latter installment of US&#36;40 since potential labor contingencies were
discovered. The Company accounted for this acquisition using Statement of Financial Accounting Standards No. 141 - <I>Business Combinations</I> (&#147;SFAS 141&#148;) and Statement of Financial Accounting Standards No. 142 &#150; <I>Goodwill and
Other Intangible Assets</I> (&#147;SFAS 142&#148;).  Accordingly, the results of operations for the acquired business are included in the accompanying consolidated statements of income beginning June 2007, the closing date of the acquisition, and
the related assets and liabilities were recorded based upon their relative fair values as of the acquisition date.</P>
<P align="justify">
Management&#146;s allocation of the purchase price considerations at the acquisition date, based on the valuation of the acquired assets and liabilities performed by an unrelated third-party appraiser, was as follows: </P>
<TABLE width=60% border=0 align="center" cellpadding=0 cellspacing=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD></TD>
        <TD width=2%></TD>
        <TD width=29%></TD></TR>
<TR valign="bottom">
        <TD align=left>Current assets&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Cash and cash equivalents&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>2&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Trade accounts receivable&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>3&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Inventories&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>13&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp;Prepaids and other assets&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>9&nbsp;</TD></TR>
<TR>
        <TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Property, plant and equipment&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>667&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Current liabilities&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(35)</TD></TR>
<TR>
        <TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Deferred taxes liabilities&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(219)</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Initial purchase price</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>440</B>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Contingent consideration resolved</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(40)</B></TD></TR>
<TR valign="bottom">
        <TD align=left><B>Final purchase price</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>400</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE><BR>
<P align="center">
FS - 23 </P>

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<H5 align="left" style="page-break-before:always"></H5>
<A name="page_f28"></A>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <TR>
    <TD width=100%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<P align="justify">
We did not identify any intangible assets in CFM to be recognized apart from goodwill.</P>
<P align="justify">
The unaudited financial information in the table below summarizes the combined results of operations of the Company and CFM, on a pro-forma basis, as though the companies had been combined as of the beginning of each of the two periods presented.
The pro-forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of each of the two periods
presented. The unaudited pro-forma financial information for 2007 combines the historical results for CSN for 2007, which include the results of CFM as from July 1, 2007 and the historical results of CFM for the period from January </P>
<P align="justify">
1, 2007 to June 30, 2007, date of the acquisition. The unaudited pro-forma financial information for 2006 combines historical results of CSN and CFM. The following table summarizes the pro-forma financial information, unaudited: </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD colspan=3 align=center><B>Year ended December, 31</B>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD colspan=3 align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Accounts</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center><B>2006</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>2007</B>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=5>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Gross operating revenues&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>4,898&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>7,042&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Net operating revenues&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>3,922&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>5,575&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Costs of products sold and operating expenses&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(2,665)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(3,723)</TD></TR>
<TR valign="bottom">
        <TD align=left>Income before income taxes and equity in&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>results of affiliated companies&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>964&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>2,153&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Income taxes&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(288)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(531)</TD></TR>
<TR valign="bottom">
        <TD align=left>Net income&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>734&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1,697&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Basic and diluted earnings per share&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>0.95&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>2.21&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Weighted number of shares (in thousands)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>772,302&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>769,749&nbsp;</TD></TR>
</TABLE><BR>
<P>
<B>6 Income taxes </B></P>
<P>
Income taxes in Brazil comprise federal income tax and social contribution (which is an additional federal income tax). The statutory rates applicable for each of the three years presented herein are: 25% for federal income tax and 9% for social
contribution. The amounts reported as income tax expense in the financial statements are reconciled to the statutory rates as follows: </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD width=40%></TD>
        <TD width=2%></TD>
        <TD width=10%></TD>
        <TD width=2%></TD>
        <TD width=10%></TD>
        <TD width=2%></TD>
        <TD width=10%></TD>
        <TD width=2%></TD>
        <TD width=10%></TD>
        <TD width=2%></TD>
        <TD width=10%></TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD colspan="9" align=center>&nbsp; &nbsp; &nbsp; &nbsp;<B>Years ended December 31,</B>&nbsp;</TD>
  </TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD colspan="9" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center><B>2006</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>2007</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>2008</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>2008</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>2008</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="center"></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="center"></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="center"></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="center"></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>Brazil</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>Foreign</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>Total</B>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Income (loss) before income taxes and equity in results of</B>&nbsp;
    <B>affiliated companies</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>987</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>2,161</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>3,225</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(284)</B></TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>2,941</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>

<TR valign="bottom">
        <TD align=left>  &nbsp; &nbsp; &nbsp; &nbsp;Federal income tax and social contribution at&nbsp;statutory rates&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(336)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(735)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(1,097)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>96&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(1,001)</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp; &nbsp; &nbsp; &nbsp;Adjustments to derive effective tax rate&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Interest on stockholders&#146; equity&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>28&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>40&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>39&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>39&nbsp;</TD></TR>

<TR valign="bottom">
        <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Nontaxable foreign exchange gain (loss) from&nbsp;subsidiaries or taxed at different rates&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>159&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(95)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(95)</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Nontaxable gain on dilution of interest in Namisa&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>567&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>567&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Reductions (additions) to valuation allowance&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>2&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(12)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(22)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(21)</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Reversal of disputed taxes payable (penalties)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>18&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Tax incentives&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>8&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>10&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>5&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>5&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Other permanent differences&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(16)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>4&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>91&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>92&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>

<TR valign="bottom">
        <TD align=left><B>Income tax expense per consolidated statements of</B>&nbsp;<B>income</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(296)</B></TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(534)</B></TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(417)</B></TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>3</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(414)</B></TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE>
<BR>
<P>
Income tax expense for the years ended December 31, 2006, 2007 and 2008 consist of: </P>
<P align="center">
FS - 24 </P>

<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_f29"></A>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <TR>
    <TD width=100%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD></TD>
        <TD width=2%></TD>
        <TD width=9%></TD>
        <TD width=2%></TD>
        <TD width=8%></TD>
        <TD width=2%></TD>
        <TD width=8%></TD>
        <TD width=2%></TD>
        <TD width=8%></TD>
        <TD width=2%></TD>
        <TD width=7%></TD>
        <TD width=2%></TD>
        <TD width=9%></TD>
        <TD width=2%></TD>
        <TD width=8%></TD>
        <TD width=2%></TD>
        <TD width=8%></TD>
        <TD width=2%></TD>
        <TD width=6%></TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD colspan="5" align=center><B>2006</B>&nbsp;</TD>

        <TD align="center">&nbsp;</TD>
        <TD colspan="5" align=center><B>2007</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD colspan="5" align=center><B>2008</B>&nbsp;</TD>
  </TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD colspan="5" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="center"></TD>
        <TD colspan="5" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="center"></TD>
        <TD colspan="5" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>Current&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>Deferred&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>Total&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>Current&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>Deferred&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>Total&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>Current&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>Deferred&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>Total&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Brazil&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(179)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(113)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(292)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(551)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>72&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(479)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(609)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>192&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(417)</TD></TR>
<TR valign="bottom">
        <TD align=left>Foreign&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(19)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>15&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(4)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(68)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>13&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(55)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(6)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>9&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>3&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Total</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(198)</B></TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right><B>(98)</B></TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right><B>(296)</B></TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right><B>(619)</B></TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right><B>85</B>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right><B>(534)</B></TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right><B>(615)</B></TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right><B>201</B>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right><B>(414)</B></TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE>
<BR>
<P>
For the years ended December 31, 2006, 2007 and 2008, income (loss) from continuing operations before income taxes and equity in results of affiliated companies consists of the following: </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD></TD>
        <TD width=2%></TD>
        <TD width=10%></TD>
        <TD width=2%></TD>
        <TD width=10%></TD>
        <TD width=2%></TD>
        <TD width=10%></TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD colspan="5" align=center><B>Years ended December 31,</B>&nbsp;</TD>
  </TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD colspan="5" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center><b>2006</b></TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>2007</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><b>2008</b></TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=7>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Brazil&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>944&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1,562&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>3,225&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Foreign&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>43&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>599&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(284)</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=7>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Total</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>987</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>2,161</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>2,941</B>&nbsp;</TD></TR>
</TABLE>
<BR>
<P>
The major components of deferred income tax assets and liabilities in the consolidated balance sheets are as follows: </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD colspan="3" align=center><B>As of December 31,</B>&nbsp;</TD>
  </TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD colspan="3" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>2007</B>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right><B>2008</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Current assets</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Tax loss carryforwards&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>2&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>143&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Inventories &#150; basis difference&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>16&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>16&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Expenses deductible when paid&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>286&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>144&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Other&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>6&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>56&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Current deferred tax assets</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>310</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>359</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Non-current assets</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Tax loss carryforwards&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>103&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>93&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Deferred charges &#150; basis difference&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>37&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>6&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Provision for contingencies&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>194&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>186&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Expenses deductible when paid&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>48&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>67&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Accrued pension cost&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>12&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Total non-current deferred tax assets</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>382</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>364</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Total deferred tax assets</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>692</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>723</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=5>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Valuation allowance</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Balance, beginning of year&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(35)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(48)</TD></TR>
<TR valign="bottom">
        <TD align=left>Additions&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(12)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(22)</TD></TR>
<TR valign="bottom">
        <TD align=left>Reductions&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Translation adjustment&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(1)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(1)</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Balance, end of the year</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(48)</B></TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(70)</B></TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=5>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Non-current deferred tax liability</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Property, plant and equipment &#150; basis difference&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(285)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(14)</TD></TR>
<TR valign="bottom">
        <TD align=left>Prepaid pension cost&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(47)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Total non-current deferred tax liabilities</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(332)</B></TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(14)</B></TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=5>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Net deferred tax asset</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>312</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>639</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE>
<BR>
<P align="center">
FS - 25 </P>

<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

<H5 align="left" style="page-break-before:always"></H5>


<A name="page_f30"></A>

<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD width=100%></TD></TR>
<TR valign="bottom">
        <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD></TR>
    <TR valign="bottom" style="font-size: 1px">
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE><BR>
<P>
The tax loss carryforwards and social contribution negative basis, in the amount of US&#36;711 as of December 31, 2008 will expire as follows: </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD></TD>
        <TD width=2%></TD>
        <TD width=20%></TD></TR>
<TR valign="bottom">
        <TD align=left><B><U>Expiration dates</U></B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>Amount</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>December 31, 2009&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>6&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>December 31, 2010&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>December 31, 2011&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>37&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>December 31, 2012&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>December 31, 2013&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>22&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>December 31, 2014&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>2&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>2023 and thereafter&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>81&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Indefinite&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>563&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Total tax loss carryforwards&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>711&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE><BR>
<P>
The valuation allowance for deferred tax assets as of December 31, 2008 was US&#36;70 (US&#36;48 as of December 31, 2007). The net change in the total valuation allowance during 2008 was an increase of US&#36;22 (an increase of US&#36;12 in 2007).
The valuation allowance at December 31, 2007 and 2008 was primarily related to tax loss carryforwards generated by certain foreign subsidiaries that, in the judgment of management are not more likely than not to be realized in the near future. In
assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon
the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies
in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than not that the Company
will realize the benefits of these deductible differences, net of the existing valuation allowances at December 31, 2008. The amount of the deferred tax asset considered realizable, however, could be reduced in the near term if estimates of future
taxable income during the carryforward period are reduced. The Company&#146;s deferred tax assets, net of valuation allowance, are expected to be realized based on actual levels of our past taxable income and our expectation of sustaining similar
levels of profitability in the short, medium and long-terms. </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD width=70%></TD>
        <TD width=2%></TD>
        <TD width=20%></TD>
        <TD width=2%></TD>
        <TD width=20%></TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center><B>Pretax book income</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
  <TD align=center><B>Taxable income</B>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
  <TD>&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>
<TR>
        <TD colspan=5>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>2005&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1,282&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1,772&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>2006&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>987&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>787&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>2007&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>2,161&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1,795&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>2008&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>2,941&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>564&nbsp;</TD></TR>
</TABLE>
<BR>
<P>
As of December 31, 2008, the undistributed earnings of the Company&#146;s foreign subsidiaries have been invested and will continue to be indefinitely invested in their operations. These undistributed earnings of the Company&acute;s foreign
subsidiaries amounted to US&#36;664 as of December 31, 2008. If circumstances change and the Company decides to repatriate these undistributed earnings, the tax liability in lieu thereof will amount to US&#36;226. </P>
<P>
In July 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 48, &#147;Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109&#148; (FIN 48). FIN 48 provides guidance on recognition,
classification and disclosure concerning uncertain income tax liabilities. The evaluation of a tax position requires recognition of a tax benefit if it is more likely than not it will be sustained upon examination. The Company adopted FIN 48 on
January 1, 2007. The adoption did not have a material impact on CSN&#146;s consolidated financial statements. </P>
<P>
A reconciliation of the unrecognized tax benefits (principal) is as follows: </P>
<P align="center">
FS - 26 </P>

<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_f31"></A>

<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD width=100%></TD></TR>
<TR valign="bottom">
        <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD></TR>
    <TR valign="bottom" style="font-size: 1px">
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE><BR>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD width=70%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center><B>2007</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
  <TD align=center><B>2008</B>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>

        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=5>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Balance, beginning of year&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>311&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>444&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Additions for tax positions of current year&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>63&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>42&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Translation adjustments&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>70&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(116)</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=5>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Balance, end of year&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>444&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>370&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE><BR>
<P>
The balance of total unrecognized tax benefits above at December, 31 2008 contains potential benefits of US&#36;370 (US&#36;444 in 2007) that, if recognized, would affect the effective rate on income from continuing operations. </P>
<P>
In addition to the amounts above, interest on unrecognized tax benefits as of December 31, 2007 and 2008, amounts to US&#36;125 and US&#36;134, respectively, which were included in accrual for contingencies in the balance sheet and US&#36;39 and
US&#36;50 accrued during 2007 and 2008, respectively, were included in financial income (expense), net in the consolidated statement of income. </P>
<P>
In addition, the Company does not expect that these unrecognized tax benefits will change significantly within the next twelve months. </P>
<P>
The Company&#146;s major tax jurisdiction is Brazil. The Brazilian tax returns are open to examination by the respective tax authorities for the years beginning in 2004.</P>
<P>
<B>7 Cash and cash equivalents </B></P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD width=70%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD colspan=3 align=center> &nbsp;<B>As of December 31,</B>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD colspan=3 align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center><B>2007</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
  <TD align=center><B>2008</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Cash in hand and bank deposits</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD align=left> &nbsp; &nbsp; &nbsp; &nbsp;Local currency&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>101&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
  <TD align=right>98&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD align=left><B>Time deposits</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD align=left> &nbsp; &nbsp; &nbsp; &nbsp;U.S. dollars&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>491&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
  <TD align=right>2,844&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD align=left> &nbsp; &nbsp; &nbsp; &nbsp;Local currency&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>621&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
  <TD align=right>600&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
  <TD>&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>
<TR>
        <TD colspan=5>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Total</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>1,213</B>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
  <TD align=right><B>3,542</B>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE>
<BR>
<P>
Management has been investing surplus cash in time deposits with maturities of three months or less when purchased. </P>
<P>
<B>8 Trade accounts receivable </B></P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD width=70%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD colspan=3 align=center><B>As of December 31,</B>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD colspan=3 align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center><B>2007</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
  <TD align=center><B>2008</B>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Domestic&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>431&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
  <TD align=right>521&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Export  primarily denominated in U.S. dollars&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>192&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
  <TD align=right>60&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
  <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>623&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
  <TD align=right>581&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Allowance for doubtful accounts&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(64)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right> (94)</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
  <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD align=left><B>Total</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>559</B>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
  <TD align=right><B>487</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE><BR>
<P align="center">
FS - 27 </P>

<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_f32"></A>

<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD width=100%></TD></TR>
<TR valign="bottom">
        <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD></TR>
    <TR valign="bottom" style="font-size: 1px">
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE><BR>
<P>
<B>Supplementary information &#150; valuation account for accounts receivable</B>:</P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD></TD>
        <TD width=2%></TD>
        <TD width=20%></TD></TR>

<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center><B>Allowance for</B>&nbsp;<br>
      <B>Doubtful Accounts</B>&nbsp;</TD>
</TR>
<TR>
        <TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Balance as of December 31, 2006&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(51)</TD></TR>
<TR>
        <TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Additions &#150; charged to selling expenses&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(4)</TD></TR>
<TR valign="bottom">
        <TD align=left>Amounts written-off&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Translation adjustment&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(10)</TD></TR>
<TR valign="bottom" style="font-size: 1px">
  <TD>&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>
<TR>
        <TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Balance as of December 31, 2007&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(64)</TD></TR>
<TR>
        <TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Additions &#150; charged to selling expenses&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(51)</TD></TR>
<TR valign="bottom">
        <TD align=left>Amounts written-off&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>6&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Translation adjustment&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>15&nbsp;</TD></TR>
<TR>
        <TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
  <TD>&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD align=left>Balance as of December 31, 2008&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(94)</TD></TR>
    <TR valign="bottom" style="font-size: 1px">
  <TD>&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>
</TABLE>
<BR>
<P>
<B>9 Inventories </B></P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD colspan=3 align=center> <B>As of December 31,</B>&nbsp;</TD>
  </TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD colspan=3 align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center><B>2007</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
  <TD align=center><B>2008</B>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=5>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Finished goods&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>380&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>256&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Products in process&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>184&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>302&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Raw material&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>405&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>484&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Maintenance supplies&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>158&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>121&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Other&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>25&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>2&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Total</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>1,152</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>1,165</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE>
<BR>
<P align="center">
FS - 28 </P>

<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_f33"></A>

<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD width=100%></TD></TR>
<TR valign="bottom">
        <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD></TR>
    <TR valign="bottom" style="font-size: 1px">
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE><BR>
<P>
<B>10 Investments in affiliated companies and companies under common control </B></P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:10px">
  <TR>
    <TD></TD>
    <TD width=1%></TD>
    <TD width=9%></TD>
    <TD width=1%></TD>
    <TD width=9%></TD>
    <TD width=1%></TD>
    <TD width=9%></TD>
    <TD width=1%></TD>
    <TD width=9%></TD>
    <TD width=1%></TD>
    <TD width=9%></TD>
    <TD width=1%></TD>
    <TD width=9%></TD>
    <TD width=1%></TD>
    <TD width=9%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="13" align=center><B>As of and for the years ended December 31</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD colspan="13" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center><B>Direct</B>&nbsp;<br>
        <B>Ownership</B>&nbsp;<br>
        <B>2007</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>Direct/Indirect</B>&nbsp;<br>
        <B>Ownership</B>&nbsp;<br>
        <B>2008</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan=3 align=center><B>Investments</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan=5 align=center>&nbsp;<B>Equity in results of</B>&nbsp;<B>affiliated companies</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="center"></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="center"></TD>
    <TD colspan=3 align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="center"></TD>
    <TD colspan=5 align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Investments in affiliated</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center><B>Total</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>Total</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>2007</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>2008</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>2006</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>2007</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>2008</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>companies</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;<B>Logistic Segment</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;MRS Log&iacute;stica.&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>37.27%&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>33.27%&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>251&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>243&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>61&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>73&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>120&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Transnordestina&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>46.88%&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>84.50%&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>104&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>(7)</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;It&aacute; Energ&eacute;tica&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>48.75%&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>48.75%&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>148&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>114&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>8&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>11&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>14&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="right">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR>
    <TD colspan=15>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;<B>Sub-total</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>399&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>461&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;69&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>84&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>127&nbsp;</TD>
  </TR>
  <TR>
    <TD colspan=15>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;<B>Mining Segment</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Namisa (1)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>100%&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>59.99%&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>2,127&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="right">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR>
    <TD colspan=15>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Total</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right><B>399</B>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right><B>2,588</B>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right><B>69</B>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right><B>84</B>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right><B>127</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="right">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR>
    <TD colspan=15>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Provision for loss on investments</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD><B>&nbsp; &nbsp; &nbsp;Logistic segment</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Transnordestina&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>46.88%&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>84.50%&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>(31)</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>(11)</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>(8)</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
  </TR>
  <TR>
    <TD colspan=15>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Total</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>&nbsp;<B>58</B>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right><B>76</B>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right><B>127</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<P>
(1)  We sold 40% of Namisa&#146;s voting interest on December 30, 2008; accordingly, Namisa&#146;s results have been consolidated until the date of sale. In 2007, Namisa was fully consolidated. </P>
<P>
<B><U>MRS Log&iacute;stica (&#147;MRS&#148;)</U></B></P>
<P>
The interest in this railroad network was acquired through participation in consortia which obtained, in privatization auctions, the concessions to operate the railway networks of the Rede Ferrovi&aacute;ria Federal. MRS provides the principal means
of transporting the Company&#146;s raw materials to the Presidente Vargas Steelworks facility. As of December 31, 2008, the Company had direct ownership in MRS&#146; capital of 22.93% and indirect ownership of 6% through Namisa and 4.3377% through
IIF, totaling 33.27% of MRS capital. </P>
<P>
<B><U>Transnordestina Log&iacute;stica S.A. (&#147;Transnordestina&#148;)</U></B></P>
<P>The Company's aim is  to help CFN improve the efficiency and reliability of its railway networks. On  November 30, 2003, the Company increased its interest in CFN from 32.40% to  49.99% by acquiring from CVRD its interest and during 2006, 4.21% of the  investment was transferred to BNDES in connection with "Transnordestina"  project, and in 2007 the Company increased its ownership by 1.10% to 46.88%.</P>
<P>In the General  Meeting held on May 12, 2008, CFN's name was changed to Transnordestina  Log&#237;stica S.A. ("Transnordestina") and at the same date CSN increased its  ownership in Transnordestina to 71.24% through use of its advances for future  capital increase in the amount of US$81 (R$136 million). Further, on November  17, 2008, CSN increased its ownership to 84.50% by capitalization of US$111  (R$254 million). In association with the Brazilian Federal Government, the  Company will invest R$2.1 billion in CFN to lay 1,800 kilometers of track,  creating the Nova Transnordestina Railway, which will have a transport capacity  twenty times greater than at present and will play an important role in the  development of Brazil's Northeast region. Completion is scheduled for 2010.  Transnordestina is jointly - controlled by us and Taquari Participa&#231;&#245;ees S.A.  pursuant to a shareholder's agreement dated November 27, 1997, as amended on  May 6, 1999 and on November 7, 2003.</P>
<P>
<B><U>IT&Aacute; Energ&eacute;tica S.A. (&#147;ITASA&#148;)</U> </B></P>
<P align="center">
FS - 29 </P>

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<H5 align="left" style="page-break-before:always"></H5>
<A name="page_f34"></A>

<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD width=100%></TD></TR>
<TR valign="bottom">
        <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD></TR>
    <TR valign="bottom" style="font-size: 1px">
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE><BR>
<P>
Itasa has an ownership of 60.5% in the Consortium It&aacute;, created to explore It&aacute; Hydroelectric Plant, in accordance with the concession contract signed on December 28, 1995 and its addendum No.1 dated of July 31, 2000 celebrated between
the National Agency of Electric Energy (&#147;ANEEL&#148;) and the consorted companies Itasa and Tractebel Energia S.A. (former &#147;Centrais Geradoras do Sul do Brasil &#150; Gerasul&#148;). </P>
<P>
We hold 48.75% of the subscribed capital and of the total common shares issued by Itasa, a special-purpose company formed for the purpose of owning and operating, under a 30-year concession, 60.5% of the It&aacute; hydroelectric facility on the
Uruguay river in Southern Brazil. One of its roles is to engage suppliers and contractors and obtain lines of credit and financings and negotiate adequate guarantees to the borrowings. </P>
<P>
<B><U>Nacional Min&eacute;rios S.A. (&#147;Namisa&#148;)</U> </B></P>
<P>
On December 30, 2008, we sold 2,271,825 shares of Namisa&#146;s voting capital, one of our mining subsidiaries and, subsequently, Namisa issued 187,749,249 new shares at a price of US&#36;16.20 per share, subscribed and paid up by Big Jump Energy
Participa&ccedil;&otilde;es S.A. (&#147;Big Jump&#148;), a company whose shareholders are Brazil Japan Iron Ore Corporation (&#147;BJIOC&#148;) and Posco, increasing its ownership interest to 40%, diluting our voting and total interest in Namisa to
59.99% . BJIOC is a company incorporated by a consortium formed by the Japanese companies Itochu Corporation, JFE Steel Corporation, Nippon Steel Corporation, Sumitomo Metal Industries Ltd, Kobe Steel Ltd and Nisshin Steel Co Ltd, and the Korean
company, Posco. Big Jump paid in cash for Namisa&#146;s shares the amount of US&#36;3,041. Upon acquisition, the new corporate structure of Namisa by which Big Jump holds 40% and CSN holds 59.99% of Namisa&#146;s shares and also based on the
Shareholders&#146; Agreement signed by both parties, the Company&#146;s management concluded that Namisa&#146;s balance sheet should be deconsolidated on December 30, 2008; accordingly, Namisa&#146;s results have been consolidated until the date of
sale and dilution. For deconsolidating Namisa, the Company analyzed and applied EITF No.96-16 &#150; &#147;<I>Investor&#146;s Accounting for an Investee When the Investor Has a Majority of the Voting Interest but the Minority Shareholder or
Shareholders Have Certain Approval or Veto Rights</I>&#148; (&#147;EITF 96-16&#148;) with the purpose of determining whether the minority rights held by the minority shareholder overcome the presumption of SFAS 94 &#150; &#147;<I>Consolidation of
All Majority-Owned Subsidiaries</I>&#148; (&#147;SFAS 94&#148;) that all majority-owned investees should be consolidated. Based on the analysis of EITF 96-16, it was concluded that the Asian consortium has effective and significant participation
rights rather than protective rights. Substantive minority rights that provide the minority shareholder with the right to effectively participate in significant decisions that would be expected to be related to the investee&#146;s ordinary course of
business, although also protective of the minority shareholder&#146;s investment, should overcome the presumption in SFAS 94 that the investor with a majority voting interest should consolidate its investee. Particularly with respect to our
non-consolidated subsidiary Namisa, we may be required to reacquire all ownership interest of our Asian partners in the event of a dead-lock with respect to a material issue under our shareholders&#146; agreement. We and Big Jump Energy
Participa&ccedil;&otilde;es S.A. have entered into a shareholders&#146; agreement in order to govern our joint-control of Namisa. Under certain situations provided for in the shareholders&#146; agreement, a dead-lock resolution process may be
established. This procedure requires us to initiate mediation with our partners and, if no solution is reached, the matter is then submitted to be addressed directly by the senior executives of the companies in dispute. In case the dead-lock
remains, the shareholders&#146; agreement provides for call and put options, which entitles Big Jump Energy Participa&ccedil;&otilde;es S.A. to elect to sell all its ownership interest in Namisa to CSN and CSN to elect to buy all ownership interest
of Big Jump Energy Participa&ccedil;&otilde;es S.A. in Namisa, in each case for the fair market value of the respective shares. </P>
<P>
The Company and Namisa have signed long-term contracts to ensure supply of iron ore (&#147;run of mine&#148;) extracted from Casa de Pedra mine, and port services rendered by CSN. These contracts have been prepaid by the abovementioned consorted companies
at the same amount of US&#36;3,041, recorded as due to related parties in long-term liabilities. </P>
<P>
Namisa&#146;s operations are fully integrated and include rail transportation access guaranteed by a long-term contract signed with MRS. At this transaction, CSN capitalized Namisa by transfer of 10% of its ownership in MRS&#146; capital. </P>
<P>
Upon the sale of Namisa&#146;s shares and dilution, CSN adopted income statement recognition as its accounting policy and, accordingly, recorded a net non-operating gain on 40%-dilution of its interest in the amount of US&#36;1,667, as detailed
below: </P>
<P align="center">
FS - 30 </P>

<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_f35"></A>

<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD width=100%></TD></TR>
<TR valign="bottom">
        <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD></TR>
  <TR valign="bottom" style="font-size: 1px">
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE><BR>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <TR>
    <TD width=55%></TD>
    <TD width=2%></TD>
    <TD width=13%></TD>
    <TD width=2%></TD>
    <TD width=13%></TD>
    <TD width=2%></TD>
    <TD width=13%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center>Amount&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>Percentage&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>Gain (loss)</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Namisa's net equity before capital increase by Big Jump,&nbsp;represented by 287,303,436 shares&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>395&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>40%&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>(158)</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Capital increase by Big Jump through issuance of 187,749,249 new shares&nbsp;(US&#36;1.48 per share plus additional paid in capital of US&#36;14.72 per share)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>3,041&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>60%&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,825&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Net non-taxable gain on dilution of interest in Namisa&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,667&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<P>
The gain of US&#36;1,667 abovementioned is non-taxable since a dilution of interest is not considered as a capital gain in accordance with Brazilian tax legislation. </P>
<P>Namisa's assets and  liabilities as of December 31, 2008 are presented as follows:</P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <tr valign="bottom" style="font-size: 1px">
    <td>&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
  </tr>
  <tr>
    <td width="425" valign="bottom"><p>&nbsp;</p></td>
    <td width="9" valign="bottom"></td>
    <td width="151" valign="bottom"><p align="center"><strong>Year ended December 31,</strong>&nbsp;</p></td>
  </tr>
  <tr>
    <td width="425" valign="bottom"><p><strong>Accounts</strong>&nbsp;</p></td>
    <td width="9" valign="bottom"><p>&nbsp;</p></td>
    <td width="151" valign="bottom"><p align="center"><strong>2008</strong>&nbsp;</p></td>
  </tr>
  <tr valign="bottom" style="font-size: 1px">
    <td>&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
  </tr>
  <tr>
    <td width="425" valign="bottom"><p>&nbsp;</p></td>
    <td width="9" valign="bottom"></td>
    <td width="151" valign="bottom"></td>
  </tr>
  <tr>
    <td width="425" valign="bottom"><p>Current assets</p></td>
    <td width="9" valign="bottom"><p>&nbsp;</p></td>
    <td width="151" valign="bottom"><p align="right">811</p></td>
  </tr>
  <tr>
    <td width="425" valign="bottom"><p>Noncurrent assets</p></td>
    <td width="9" valign="bottom"><p>&nbsp;</p></td>
    <td width="151" valign="bottom"><p align="right">3,720</p></td>
  </tr>
  <tr>
    <td width="425" valign="bottom"><p>Current liabilities</p></td>
    <td width="9" valign="bottom"><p>&nbsp;</p></td>
    <td width="151" valign="bottom"><p align="right">(667)</p></td>
  </tr>
  <tr>
    <td width="425" valign="bottom"><p>Noncurrent liabilities</p></td>
    <td width="9" valign="bottom"><p>&nbsp;</p></td>
    <td width="151" valign="bottom"><p align="right">(319)</p></td>
  </tr>
  <tr>
    <td width="425" valign="bottom"></td>
    <td width="9" valign="bottom"></td>
    <td width="151" valign="bottom"></td>
  </tr>
  <tr>
    <td width="425" valign="bottom"><p>Stockholder's equity</p></td>
    <td width="9" valign="bottom"><p>&nbsp;</p></td>
    <td width="151" valign="bottom"><p align="right">(3,545)</p></td>
  </tr>
</table>
<P><B>11 Goodwill </B></P>
<P>
As of December 31, goodwill recognized from the business acquisitions of the Company are comprised as follows: </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center><B>2007</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>2008</B>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Logistics</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp; &nbsp; &nbsp;MRS Log&iacute;stica&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>6&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>4&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>6</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>4</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Mining</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp; &nbsp; &nbsp;ERSA&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>43&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>32&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>43</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>32</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Steel</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp; &nbsp; &nbsp;GalvaSud&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>60&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>47&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp; &nbsp; &nbsp;Prada&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>53&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>40&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp; &nbsp; &nbsp;Lusosider Projectos Sider&uacute;rgicos&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>4&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>4&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>117</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>91</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=5>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
  <TD>&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>166</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>127</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE>
<BR>
<P>
<B>12 Property, plant and equipment </B></P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD colspan="5" align=center><B>As of December 31, 2007</B>&nbsp;</TD>
  </TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD colspan="5" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>

<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center><B>Cost</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>Accumulated</B>&nbsp;<br>
    <B>Depreciation</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>Net</B>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Land&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>73&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>73&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Buildings&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>314&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(37)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>277&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Equipment&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>4,434&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(1,530)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>2,904&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Furniture and fixtures&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>60&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(45)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>15&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Mines and reserves&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>677&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(17)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>660&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Other&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>178&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(91)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>87&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>5,736</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(1,720)</B></TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>4,016</B>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Construction in&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>progress&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>808&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>808&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>6,544</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(1,720)</B></TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>4,824</B>&nbsp;</TD></TR>
</TABLE>
<BR>
<P align="center">
FS - 31 </P>

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<H5 align="left" style="page-break-before:always"></H5>
<A name="page_f36"></A>

<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD width=100%></TD></TR>
<TR valign="bottom">
        <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD></TR>
    <TR valign="bottom" style="font-size: 1px">
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE><BR>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD></TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD colspan="5" align=center><B>As of December 31, 2008</B>&nbsp;</TD>
  </TR>
<TR valign="bottom" style="font-size: 1px">
  <TD>&nbsp;</TD>
  <TD></TD>
  <TD colspan="5" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center><B>Cost</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>Accumulated</B>&nbsp;<br>
      <B>Depreciation</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>Net</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Land&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>59&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>59&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Buildings&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>335&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(43)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>292&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Equipment&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>2,699&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(489)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>2,210&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Furniture and fixtures&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>51&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(38)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>13&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Mines and reserves&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>7&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>7&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Other&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>138&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(55)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>83&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>3,289</B>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right><B>(625)</B></TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right><B>2,664</B>&nbsp;</TD></TR>

<TR valign="bottom">
        <TD align=left>Construction in&nbsp;progress&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>879&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>879&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>4,168</B>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right><B>(625)</B></TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right><B>3,543</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE>
<BR>
<P>
Construction in progress consists principally of a group of investments in equipment in order to improve the productivity of the Company&#146;s production units and quality of its products. The main investments are in the area of environmental
protection, cost reduction, infrastructure and automation, and information and telecommunication technologies. In 2006, 2007 and 2008, capitalized interest amounted to US&#36;10, US&#36;37 and US&#36;116, respectively. </P>
<P>
As of December 31, 2007 and 2008, the fixed assets securing financial obligations amounted to US&#36;27 and US&#36;21, respectively. </P>
<P>Casa de Pedra mine is an asset that belongs to CSN which has the exclusive  right to explore such mine. Our mining activities of Casa de Pedra are based on  the "Manifesto Mina", which confers to CSN full ownership over the mineral  deposits existing within our property limits.</P>
<P>As of December 31, 2007 and 2008, the net fixed assets of Casa de Pedra  were US$547 and US$655, respectively, mainly represented by US$298 and US$453  of construction in progress. In 2007 and 2008, capitalized interest in Casa de  Pedra assets amounted to US$21 and US$20, respectively.</P>
<P>
<B>13 Loans and financing </B></P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:10px">
  <TR>
    <TD></TD>
    <TD width=1%></TD>
    <TD width=7%></TD>
    <TD width=1%></TD>
    <TD width=7%></TD>
    <TD width=1%></TD>
    <TD width=7%></TD>
    <TD width=1%></TD>
    <TD width=7%></TD>
    <TD width=1%></TD>
    <TD width=7%></TD>
    <TD width=1%></TD>
    <TD width=7%></TD>
    <TD width=1%></TD>
    <TD width=7%></TD>
    <TD width=1%></TD>
    <TD width=7%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" align=center><B>As of December 31,</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD colspan="15" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align=center><B>2007</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="7" align=center><B>2008</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD colspan="7" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="center"></TD>
    <TD colspan="7" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan=3 align=center><B>Current portion</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan=3 align=center><B>Long-term</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan=3 align=center><B>Current portion</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan=3 align=center><B>Long-term</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD colspan=3 align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="center"></TD>
    <TD colspan=3 align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="center"></TD>
    <TD colspan=3 align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="center"></TD>
    <TD colspan=3 align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center><B>CSN</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>Subsidiaries</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>CSN</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>Subsidiaries</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>CSN</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>Subsidiaries</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>CSN</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Foreign Currency</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD colspan=17>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Pre-export financing (e)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>15&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>414&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>21&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>583&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Securitized Receivables (c)</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>72&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>388&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>88&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>300&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Euronotes (d)</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>275&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>950&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>950&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Perpetual notes (b)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>750&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>750&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Financed imports&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>35&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>50&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>33&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>42&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>BNDES/Finame&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>44&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>4&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>43&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>3&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Advances on export contracts&nbsp;(g)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>190&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>110&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>973&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>100&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Other&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>58&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>133&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>99&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>50&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>240</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>405</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>618</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>2,223</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>1,031</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>187</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>768</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>2,053</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Denominated in</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Brazilian Reais</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD colspan=17>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>BNDES/Finame (f)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>44&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>398&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>25&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>73&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>298&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>21&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Debentures (a)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>181&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>339&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>257&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Other&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>5&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>39&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>3&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>37&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>225</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>2</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>742</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>64</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>73</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>5</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>557</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>58</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR>
    <TD colspan=17>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>465</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>407</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>1,360</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>2,287</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>1,104</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>192</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>1,325</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>2,111</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR>
    <TD colspan=17>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD colspan="3" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD colspan=3>&nbsp;</TD>
    <TD></TD>
    <TD colspan=3>&nbsp;</TD>
    <TD></TD>
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Total of loans and financing</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align=center><B>872</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan=3 align=center><B>3,647</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan=3 align=center><B>1,296</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan=3 align=center><B>3,436</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD colspan="3" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD colspan=3 align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD colspan=3 align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD colspan=3 align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<P align="center">
FS - 32 </P>

<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_f37"></A>

<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD width=100%></TD></TR>
<TR valign="bottom">
        <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD></TR>
    <TR valign="bottom" style="font-size: 1px">
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE><BR>
<P>
a. In December 2003, the Company issued R&#36;900 million (US&#36;312 translated using the exchange rate as of the date of the transaction) of real-denominated debentures in three tranches: a R&#36;250 million (US&#36;85.5 translated using the
exchange rate as of the date of the transaction) tranche with a three-year maturity (liquidated in December 2006) and bearing interest at 106.5% of CDI, a R&#36;400 million (US&#36;136 translated using the exchange rate as of the date of the
transaction) tranche with a three-year maturity (liquidated in December 2006) and bearing interest at 107% of CDI, and a R&#36;250 million (US&#36;190.5 translated at the exchange rate as of the date of the transaction) tranche with a five-year
maturity, indexed to the IGP-M and bearing interest at 10% per annum. </P>
<P>
As approved at the Board of Directors Meeting held on December 20, 2005 and ratified on April 24, 2006, the Company issued, on February 1, 2006, 60,000 non-convertible and unsecured debentures, in one single tranche, in the unit face value of
R&#36;10. Such debentures were issued in the total issuance value of R&#36;600 million (US&#36;257 translated at the December 31, 2008 exchange rate). Compensation interest is applied to the face value balance of these debentures, representing the
Cetip&#146;s 103.6% of CDI, and the maturity of the face value is scheduled for February 2012, without early redemption option. The deeds for these issues contain certain restrictive covenants, which have been duly complied with.</P>
<P>
b. In July 2005, the Company issued perpetual notes in the amount of US&#36;750 that bear interest at 9.5% a.a. The Notes have no maturity date; however, as from 2010, the Company has the right to settle the Notes paying the outstanding amounts at
that date. The interest payments  on the perpetual notes are mandatory and have been paying quarterly since October  14, 2005.</P>
<P>
c. In May 2003, June 2004 and June 2005, the Company received the resources of the Notes issued by CSN Islands VI Corp. selling the rights of future exports (Securitization program), and such resources were transferred to CSN at the same interest
rates and maturity dates. Such notes have original maturity periods of 7, 8 and 10 years, respectively, and will be repaid through export sales of CSN subsidiaries. </P>
<P>
d. On July 24, 1997, CSN Iron issued Euronotes in the amount of US&#36;600, with a maturity of 10 years, at an interest rate of 9.125% p.a., under the guarantee of CSN, represented by a Promissory Note. The interest was due semiannually. The Company
has already paid a total amount of the US&#36;521 up to December 31, 2006 and the outstanding amount of the Notes due in 2007 was settled during the year. In December 2003, the Company issued Bonds through its subsidiary CSN Islands VIII in the
amount of US&#36;550, which bears annual interest of 9.75% and have maturity in 2013.</P>
<P>
In March 2004, through the subsidiary CSN Islands VII, the Company issued Bonds in the amount of US&#36;275, which bears interest of 10.75% . These Bonds mature September 2008, and were liquidated during 2008. </P>
<P>
During 2005, the Company issued Bonds through its subsidiary CSN Islands IX in the total amount of US&#36;400, which bears annual interest rates of 10.5% and mature in 2015. </P>
<P>
e. Comprised of various bank loans which bear interest rates ranging between 3.45% and 6.04% p.a. and have maturity dates from 2012 through 2014.</P>
<P>
f. In January 2007, the Company entered into two new financing contracts of US&#36;398 with BNDES, which amounted to US&#36;371 (including current and long-term portion) as of December 31, 2008, and bear annual interest of 8.7% and 9.7% with maturity
date in 2014. The proceeds will be used in certain mining and logistics projects. </P>
<P>g. Consists primarily of U.S. dollar-denominated  trade financing, mainly in the form of export sales advances with financial  institutions. At December 31, 2008, the Company had US$973 outstanding  short-term debt which bears interest rates between 3.25% and 9.00% p.a. and has  maturity at various dates through 2009.</P>
<P>
Loans with certain agents contain restrictive clauses, with which the Company is in compliance. </P>
<P>
At December 31, 2008, the current portion of long-term debt and long-term portion of the Company&#146;s indebtedness had annual interest rates as follows: </P>
<P align="center">
FS - 33 </P>

<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_f38"></A>

<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD width=100%></TD></TR>
<TR valign="bottom">
        <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD></TR>
    <TR valign="bottom" style="font-size: 1px">
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE><BR>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <TR>
    <TD></TD>
    <TD width=2%></TD>
    <TD width=13%></TD>
    <TD width=2%></TD>
    <TD width=13%></TD>
    <TD width=2%></TD>
    <TD width=13%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center><B>% per annum</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>CSN</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Denominated in local currency</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD colspan=7>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Long-term interest rate (&#147;TJLP&#148;)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>TJLP plus 2.7 to 14.0&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>73&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Other&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>7.96&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>4&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>73</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>5</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR>
    <TD colspan=7>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Denominated in foreign currency</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD colspan=7>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>United States dollar&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>Zero to 9.55&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,031&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>186&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Euro&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>6.34&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR>
    <TD colspan=7>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>1,104</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>192</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align=center><B>1,296</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD colspan="3" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR>
    <TD colspan=7>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center><B>% per annum</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>CSN</B>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Denominated in local currency</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD colspan=7>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Long-term interest rate (&#147;TJLP&#148;)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>TJLP plus 2.7 to 14.0&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>298&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>General price index (&#147;IGP-DI&#148;)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>IGP-DI plus 7.9&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Interbank Certificate of Deposit (&#147;CDI&#148;)</TD>
    <TD>&nbsp;</TD>
    <TD align=right>103.6% of CDI&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>257&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>6&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Others&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>4.19 to 7.96&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>50&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>557</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>58</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR>
    <TD colspan=7>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Denominated in foreign currency</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD colspan=7>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>United States dollar&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>Zero to 10.5&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>768&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2,028&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Euro&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>3.89&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>25&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>1,325</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>2,111</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align=center><B>3,436</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD colspan="3" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<P>
Indices (average) and foreign currency variation applied to debt in each year are as follows: </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD width=55%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD colspan="5" align=center><B>%</B>&nbsp;</TD>
  </TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD colspan="5" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center><B>2006</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>2007</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
  <TD align=center><B>2008</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>TJLP &#150; Long-term interest rate&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>7.8&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>6.4&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>6.3&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>CDI &#150; Interbank deposit certificate&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>13.2&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>11.7&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>12.3&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>IGPM &#150; General index of market price&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>3.8&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>7.8&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>9.8&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>United States dollar exchange rate change&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(8.7)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(17.2)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>31.9&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Euro exchange rate&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1.8&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(7.5)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>24.1&nbsp;</TD></TR>
</TABLE>
<BR>
<P>
The long-term portion of the Company&#146;s debt outstanding at December 31, 2008 becomes due as follows: </P>
<TABLE width=70% border=0 align="center" cellpadding=0 cellspacing=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD></TD>
        <TD width=2%></TD>
        <TD width=20%></TD></TR>
<TR valign="bottom">
        <TD align=left>2010&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>329&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>2011&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>353&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>2012&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>622&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>2013&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>812&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>2014 and thereafter&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>570&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Perpetual securities&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>750&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Total</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>3,436</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE><BR>
<P align="center">
FS - 34 </P>

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<H5 align="left" style="page-break-before:always"></H5>
<A name="page_f39"></A>

<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD width=100%></TD></TR>
<TR valign="bottom">
        <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD></TR>
    <TR valign="bottom" style="font-size: 1px">
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE><BR>
<P>
Security for the Company&#146;s debt outstanding at December 31, 2008 was as follows: </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD></TD>
        <TD width=2%></TD>
        <TD width=20%></TD></TR>
<TR valign="bottom">
        <TD align=left>Property, plant and equipment&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>21&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Corporate guarantees&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>41&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Imports&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>36&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Bank guarantee&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>50&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Total</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>148</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE><BR>
<P>
<B>14 Stockholders&#146; equity </B></P>
<P><B>(a) Capital </B></P>
<P>
On December 31, 2007 and 2008, shares issued were 816,203,838 and 793,403,838, respectively, common shares (post split) with no par value. Outstanding shares were 769,469,454 as of December 31, 2007 and 758,669,454 as of December 31, 2008. The
decreases in number of shares in 2008 as compared to 2007 were caused by changes in treasury stock as described in item (b) below.</P>
<P>
<B>(b) Treasury stock</B></P>
<P>
During 2008, the Board of Directors approved share buyback programs by the Company to hold in treasury for subsequent sale and/or cancellation, made in accordance with the limits and provisions of CVM&#146;s Instruction No. 10/80. As a result,
10,800,000 shares were repurchased in October 2008 and cancelled upon approval at an Extraordinary General Meeting held on December 3, 2008. At the beginning of 2008, 12,000,000 (post split) shares acquired in prior years were also cancelled.
Treasury stock as of December 31, 2008 was as follows: </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD></TD>
        <TD width=1%></TD>
        <TD width=18%></TD>
        <TD width=1%></TD>
        <TD width=18%></TD>
        <TD width=1%></TD>
        <TD width=18%></TD>
        <TD width=1%></TD>
        <TD width=18%></TD></TR>
<TR valign="bottom">
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>Amount Paid&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD colspan="5" align=center>Per Share Cost (in US&#36;)</TD>
  </TR>
<TR valign="bottom" style="font-size: 1px">
        <TD align="center">&nbsp;</TD>
        <TD align="center"></TD>
        <TD align="center">&nbsp;</TD>
        <TD align="center"></TD>
        <TD colspan="5" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
<TR valign="bottom">
        <TD align=center>Number of Shares (*)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>for Shares&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>Minimum&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>Maximum&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
  <TD align=center>Average&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=9>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>34,734,384&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>326&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>5.87&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>21.86&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>9.92&nbsp;</TD></TR>
</TABLE>
<BR>
<P>
(*) Retroactively adjusted as per the stock split approved in January 2008. </P>
<P>
While maintained in treasury, these shares are not entitled to receive dividends and have no property or voting rights. As of December 31, 2008, the market value of the shares held in treasury amounted to US&#36;426 (US&#36;1,384 as of December 31,
2007). </P>
<P>
<B>(c) Appropriated retained earnings </B></P>
<P>
Brazilian laws and CSN&#146;s By-laws require that certain appropriations be made from retained earnings to reserve accounts on an annual basis. The purpose and basis of appropriation to such reserve accounts are described below: </P>
<ul>
  <li>   Investment reserve - this is a general reserve for future expansion of CSN&#146;s activities. </li>
  <li>  Legal reserve - this reserve is a requirement for all Brazilian corporations and represents the annual appropriation of 5% of net income up to a limit of 20% of capital stock, as determined in the Brazilian Corporate Law. This reserve may be
    used to increase capital or to absorb losses, but may not be distributed as cash dividends. </li>
</ul>
<P>
<B>(d) Dividends and interest on stockholders&#146; equity </B></P>
<P>
The Company&#146;s By-laws guarantee a minimum annual dividend equal to 25% of the adjusted net income for the year, as required by the Brazilian Corporate Law, which comprises net income after deduction of legal reserve. Interest on
stockholders&#146; equity since January 1, 1996 is considered part of the minimum dividend. Brazilian law permits the payment of cash dividends only from retained earnings as stated in the Company&#146;s statutory accounting records. At December 31,
2007 and 2008, retained earnings as stated in the statutory accounting records was equal to zero. In addition, in accordance with the statutory accounting records, appropriated retained earnings at December 31, 2007 included the amount of US&#36;998
related to the investment reserve, which could be transferred to unappropriated retained earnings and paid as dividends and interest on stockholders&#146; equity, if approved by the stockholders. As of December 31, 2008, the minimum annual dividend
amounted to approximately US&#36;500 which will be paid during 2009.</P>
<P align="center">
FS - 35 </P>

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<H5 align="left" style="page-break-before:always"></H5>


<A name="page_f40"></A>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <TR>
    <TD width=100%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<P align="justify"><B>15 Pension plan </B></P>
<P align="justify">
<B>(a) Description of the plans </B></P>
<P align="justify">
The Company has pension plans which cover substantially all employees. The plans are administered by the Board of Directors of a foundation named <I>Caixa Beneficente dos Empregados da CSN</I> (&#147;CBS&#148;), a private non-profit pension fund
established in July 1960, which has as its members employees (and ex-employees) of the parent company and certain of its subsidiaries that joined the fund by agreement, and CBS&#146;s own employees. The Board of Directors of CBS is comprised of its
president and ten members, six of whom are chosen by CSN, the principal sponsor of CBS, and four of whom are chosen by the participants. </P>
<P align="justify">
Until January 1996, CBS had only a defined benefit plan with benefits based on years of service, salary and social security benefits. On December 27, 1995, the <I>Secretaria de Previd&ecirc;ncia Complementar</I> (the Brazilian Government&#146;s
Secretary for Supplementary Social Security or the &#147;SPC&#148;) approved the implementation of a new benefit plan as of January 1996, called the <I>Plano Misto de Benef&iacute;cio Suplementar</I> (the &#147;Hybrid Plan&#148;), structured in the
form of a defined contribution plan. Employees hired after that date can only join the new hybrid plan. Additionally, all active employees who were participants in the old defined benefit plan were offered the opportunity to switch to the new hybrid
plan. As of December 31, 2008, CBS had 28,201 participants, of whom 22,721 were contributors (26,422 and 20,962, respectively, at December 31, 2007) enrolled in the benefit plans, including 12,406 active (10,448 at December 31, 2007) and 15,795
beneficiaries (15,974 at December 31, 2007) employees. Of the total participants at December, 31 2008, 15,091 belong to the defined benefit plan and 13,110 to the hybrid plan. </P>
<P align="justify">
CBS&#146;s assets comprise principally shares of CSN, government securities and properties. At December 31, 2008, CBS owned 35,490,867 common shares of CSN (35,490,867 common shares at December 31, 2007) with a market value at December 31, 2008 of
US&#36;435 (US&#36;1,051 at December 31, 2007). During 2008, CBS received US&#36;45 of dividends and interest on stockholders&#146; equity from these shares. No shares were sold during 2008. Pension assets totaled R&#36;3 billion (US&#36;1.7
billion) and R&#36;2.3 billion (US&#36;1 billion) at December 31, 2007 and 2008, respectively. CBS&#146;s fund managers seek to match the plan assets with benefit obligations over the long-term. Brazilian pension funds are subject to certain
restrictions relating to their ability to invest in foreign assets and consequently, the funds primarily invest in Brazilian securities.</P>
<P align="justify">
<B>(b) Expected long-term rate of return on assets</B></P>
<P align="justify">
The expected long-term rate of return on assets of each benefit plan was determined by CBS based on the return expectancy for each asset category, as well as the target allocation of assets between those categories specified in CBS&#146;s investment
policy and budget for year 2008. For purposes of determining the expected long-term rate of return on plan assets the Company considered short and long-term scenarios for each category of assets. Accordingly, the resultant rates are shown in the
table below: </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD width=15%></TD>
        <TD width=2%></TD>
        <TD width=15%></TD>
        <TD width=2%></TD>
        <TD width=15%></TD>
        <TD width=2%></TD>
        <TD width=15%></TD>
        <TD width=2%></TD>
        <TD></TD></TR>
<TR valign="bottom">
        <TD colspan="7" align=center><B>Assets Allocation (%)</B></TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD colspan="7" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD>&nbsp;</TD></TR>

<TR valign="bottom">
  <TD align=left valign="middle"><B>Asset</B>&nbsp;<br>
    <B>Category</B>&nbsp;</TD>
        <TD align="center" valign="middle">&nbsp;</TD>
        <TD align=center valign="middle"><B>December</B>&nbsp;<B>31, 2007</B>&nbsp;</TD>

        <TD align="center" valign="middle">&nbsp;</TD>
        <TD align=center valign="middle"><B>December</B>&nbsp;<B>31, 2008</B>&nbsp;</TD>
        <TD align="center" valign="middle">&nbsp;</TD>
        <TD align=center valign="middle"><b>Target</b></TD>
        <TD align="center" valign="middle">&nbsp;</TD>
        <TD align=center valign="middle"><B>Weighted-Average</B>&nbsp;<br>
    <B>Expected Long-Term</B>&nbsp;<B><br>
    Rate of Return (%)</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD align=left>Debt Securities&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>&nbsp;33.5&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>48.5&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>50.1&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right> 11.4&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD align=left>Equity&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right> 60.7&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>44.0&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>40.2&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right> 14.5&nbsp;</TD>
</TR>

  <TR valign="bottom">
    <TD align=left>Securities&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Real Estate&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2.5&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>3.2&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>3.6&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>9.9&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Loans&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>3.3&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>4.3&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>6.1&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>18.1&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Total</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>100.00</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>100.00</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>100.00</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>13.2</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<P align="center">
FS - 36 </P>

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<H5 align="left" style="page-break-before:always"></H5>
<A name="page_f41"></A>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <TR>
    <TD width=100%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<BR>
<P>
<B>(c) Defined benefit plan </B></P>
<P>
The Company applies its defined benefit plan actuarial assumptions using December 31 of each year as the measurement date. Information with respect to the Company&#146;s defined benefit plan as of December 31 is as follows. </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center><b>2007</b></TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><b>2008</b>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Projected benefit obligation at beginning of year&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>693</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>887</B>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Service cost&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Interest cost on PBO&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>83&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>84&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Actual benefits payments&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(75)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(75)</TD></TR>
<TR valign="bottom">
        <TD align=left>Change in assumptions&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(149)</TD></TR>
<TR valign="bottom">
        <TD align=left>Effect of exchange rate changes&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>149&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(197)</TD></TR>
<TR valign="bottom">
        <TD align=left>Actuarial loss&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>36&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>58&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Projected benefit obligation at end of year</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>887</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>609</B>&nbsp;</TD></TR>

<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=5>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Change in plan assets</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center><b>2007</b>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><b>2008</b>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Fair value of plan assets at beginning of year&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>513</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>1,025</B>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Actual return on plan assets&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>460&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(283)</TD></TR>
<TR valign="bottom">
        <TD align=left>Employer contributions&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>32&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>36&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Employee contributions&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Actual benefits payments&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(75)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(75)</TD></TR>
<TR valign="bottom">
        <TD align=left>Provision to finance the change of discount rate&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(49)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Effect of exchange rate changes&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>143&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(179)</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Fair value of plan assets at end of year</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>1,025</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>525</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=5>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Accrued pension cost asset (liability)</B></TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center><b>2007</b>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><b>2008</b>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Funded status, excess (shortfall) of plan assets over projected benefit obligation&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>138&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(84)</TD></TR>
<TR valign="bottom">
        <TD align=left>Unrecognized actuarial gain&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>138</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(84)</B></TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Prepaid pension cost &#150; non-current assets</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>138</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>-</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Accrued pension cost &#150; current liabilities</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>-</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(24)</B></TD></TR>
<TR valign="bottom">
        <TD align=left><B>Accrued pension cost &#150; non-current liabilities</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>-</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(60)</B></TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE>
<BR>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD></TD>
        <TD width=2%></TD>
        <TD width=13%></TD></TR>
<TR valign="bottom">
        <TD align=left><B>Changes recognized in accumulated other comprehensive (loss) income before tax</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center><b>2008</b>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Transition asset not yet recognized in net periodic pension cost&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Transition asset recognized in net periodic pension cost during the period&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(1)</TD></TR>
<TR valign="bottom">
        <TD align=left>Prior service credit not yet recognized in net periodic pension cost&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>11&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Prior service credit recognized in net periodic pension cost during the period&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(1)</TD></TR>
<TR valign="bottom">
        <TD align=left>Net actuarial loss arising in the period&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(292)</TD></TR>
<TR valign="bottom">
        <TD align=left>Gain not yet recognized in net periodic pension cost at beginning of period&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>377&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Loss recognized in net periodic pension cost&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(55)</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Total&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>40</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Deferred tax effect&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(13)</B></TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Total recognized in accumulated other comprehensive (loss) income&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>27</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE>
<BR>
<P align="justify">
Net periodic pension cost includes the following components for the years presented:</P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD colspan="4"></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD width="2%" align=left>&nbsp;</TD>
        <TD width="13%" align=center><b>2006</b>&nbsp;</TD>
        <TD width="2%" align=center>&nbsp;</TD>
        <TD align=center><B>2007</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>2008</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
  <TD>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>

  <TR valign="bottom">
    <TD height="15" align=left>Service cost&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>1&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>1&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Interest cost on projected benefit obligation&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>68&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>83&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>84&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Expected return on plan assets&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>(46)</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>(84)</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>(100)</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Amortization gain&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>-&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>(55)</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Net amortization and deferral&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>(1)</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>(1)</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>(1)</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>22</B>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right><B>(1)</B></TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right><B>(71)</B></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Employee contributions&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>(1)</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>(1)</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right>(1)</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>

  </TR>
  <TR valign="bottom">
    <TD align=left><B>Net periodic pension cost (credit)</B></TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>21</B>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right><B>(2)</B></TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right><B>(72)</B></TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<P align="center">
FS - 37 </P>

<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_f42"></A>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <TR>
    <TD width=100%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<P align="justify">
The expected net periodic pension cost, calculated in accordance with SFAS 87 and SFAS 158 for the year ended December 31, 2009, amounts to R&#36;17 million (US&#36;7 translated at the December 31, 2008 exchange rate) for the defined benefit plan as
shown in the table below: </P>
<TABLE border=0 width=60% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD></TD>
        <TD width=2%></TD>
        <TD width=11%></TD></TR>
<TR valign="bottom">
        <TD align=left>Service cost&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Interest cost&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>75&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD align=left>Expected return on assets&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(66)</TD></TR>
<TR valign="bottom">
        <TD align=left>Net amortization and deferral&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right> &nbsp;(2)</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
  <TD>&nbsp;</TD>
  <TD></TD>
  <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD align=left>Periodic post retirement benefit (credit)</TD>
        <TD>&nbsp;</TD>
        <TD align=right> &nbsp;8&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD align=left>Expected employee contributions&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right> &nbsp;(1)</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
  <TD>&nbsp;</TD>
  <TD></TD>
  <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD align=left>Net periodic pension cost&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right> &nbsp;7&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
  <TD>&nbsp;</TD>
  <TD></TD>
  <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>
</TABLE>
<BR>
<P>
Actuarial assumptions used for the calculations were: </P>
<TABLE border=1 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">

<TR valign="bottom">
        <TD rowspan="2" align=left>Discount rates&nbsp;</TD>
        <TD width="20%" align=center><B>2006</B>&nbsp;</TD>
        <TD width="20%" align=center><B>2007</B>&nbsp;</TD>
        <TD width="20%" align=center><B>2008</B>&nbsp;</TD></TR>

<TR valign="bottom">
        <TD align=center>Inflation plus 6%&nbsp;</TD>
        <TD align=center>Inflation plus 6%&nbsp;</TD>
        <TD align=center>Inflation plus 8.5%&nbsp;</TD></TR>

<TR valign="bottom">
        <TD align=left valign="top">Rates of increase in compensation levels&nbsp;</TD>
        <TD align=center>Inflation plus 1%&nbsp;</TD>
        <TD align=center>Inflation plus 1%&nbsp;</TD>
        <TD align=center>Inflation plus 1%&nbsp;</TD></TR>

<TR valign="bottom">
        <TD align=left valign="top">Expected long-term rate of return on assets&nbsp;</TD>
        <TD align=center>Inflation plus 5%&nbsp;</TD>
        <TD align=center>Inflation plus 6%&nbsp;</TD>
        <TD align=center>Inflation plus 8.5%&nbsp;</TD></TR>

<TR valign="bottom">
        <TD align=left valign="top">Mortality&nbsp;</TD>
        <TD align=center>AT-83 Table<br>
    &nbsp;segregated by sex <SUP>(1)</SUP></TD>
        <TD align=center>AT-83 Table<br>
    &nbsp;segregated by sex <SUP>(1)</SUP></TD>
        <TD align=center>AT-83 Table<br>
    &nbsp;segregated by sex <SUP>(1)</SUP></TD></TR>


<TR valign="bottom">
        <TD align=left valign="top">Disability&nbsp;</TD>
        <TD align=center>Mercer disability&nbsp;<br>
    multiplied by two&nbsp;</TD>
        <TD align=center>Mercer disability&nbsp;<br>
    multiplied by two&nbsp;</TD>
        <TD align=center>Mercer disability&nbsp;<br>
    multiplied by two&nbsp;</TD></TR>


<TR valign="bottom">
        <TD align=left valign="top">Disabled mortality&nbsp;</TD>
        <TD align=center>Winklevoss&nbsp;</TD>
        <TD align=center>Winklevoss&nbsp;</TD>
        <TD align=center>Winklevoss&nbsp;</TD></TR>

<TR valign="bottom">
        <TD align=left valign="top">Turnover&nbsp;</TD>
        <TD align=center>2% per year&nbsp;</TD>
        <TD align=center>2% per year&nbsp;</TD>
        <TD align=center>2% per year&nbsp;</TD></TR>

<TR valign="bottom">
        <TD align=left valign="top">Retirement age&nbsp;</TD>
        <TD align=center>100% when first eligible for a&nbsp;retirement benefit&nbsp;</TD>
        <TD align=center>100% when first eligible for a&nbsp;retirement benefit&nbsp;</TD>
        <TD align=center>100% when first eligible for a&nbsp;retirement benefit&nbsp;</TD></TR>
</TABLE>
<BR>
<P align="justify">
<SUP>(1)</SUP> The increase in life expectancy of the general Brazilian population, as well as the life expectancy of the population covered by private pension plans have been discussed in the past few years. Life expectancy both in Brazil and
around the world have increased due to a series of events, such as the technological development in medicine, the public health care policies and disease prevention resulting from quality of life programs. </P>
<P align="justify">
During 2006, the Brazilian government defined that post retirement benefit plans liabilities should be valued considering at least the life expectancies obtained through AT83 mortality table, which is considered to be the mortality table that best
reflects the life expectancy in Brazil. The mortality table AT83 was adopted for measuring the actuarial liabilities related to the post retirement benefit presented in this report.</P>
<P align="justify">
The projected annual inflation rate adopted was 4.5% for all years presented.</P>
<P align="justify">
The discount rates and expected long-term rate of return on assets have changed for 2008, as management believes the rates more adequately reflects CBS&#146;s assets profitability and Brazil&#146;s projected economic scenario. </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD></TR>
<TR valign="bottom">
        <TD align=left><B>Accumulated benefit obligation</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center><b>2007</b>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><b>2008</b>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Actuarial present value of:&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Vested benefit obligation&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>885&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>607&nbsp;</TD></TR>
  <TR valign="bottom">
    <TD align=left>Non-vested benefit obligation&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Total accumulated benefit obligation</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>887</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>609</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<P align="center">
FS - 38 </P>

<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_f43"></A>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <TR>
    <TD width=100%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<P>
<B>(d) Expected contributions </B></P>
<P>
<B>Defined benefit plan </B></P>
<P>
The expected Company&#146;s contributions for 2009, amounting to R&#36;67.5 million (US&#36;28.9 translated at the December 31, 2008 exchange rate), were estimated based on the actual cost for each valued plan as of the valuation date. The expected
benefit payments for 2009, amounting to R&#36;132.8 million (US&#36;56.8 translated at the December 31, 2008 exchange rate), were estimated based on the projected benefit payroll as of the valuation date.</P>
<P>
The estimated future benefit payments, translated at the December 31, 2008 exchange rate, are as follows:</P>
<TABLE border=0 width=30% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD width=38%></TD>
        <TD width=2%></TD>
        <TD width=60%></TD>
</TR>
<TR valign="bottom">
        <TD align=left>2009&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>57&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>2010&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>59&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>2011&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>60&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>2012&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>62&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>2013&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>64&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>2014 to 2018&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>346&nbsp;</TD></TR>
</TABLE><BR>
<P align="justify">
<B>Hybrid plan </B></P>
<P align="justify">
The Company does not expect to make contributions for the defined benefits in 2009 for the hybrid plan. The expected Company&#146;s contributions for the defined contribution portion amount to R&#36;19.2 million (US&#36;8.2 translated at the
December 31, 2008 exchange rate).</P>
<P align="justify">
The estimated future benefit payments, translated at the December 31, 2008 exchange rate, are as follows:</P>
<TABLE border=0 width=30% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD width=37%></TD>
        <TD width=3%></TD>
        <TD width=60%></TD>
</TR>
<TR valign="bottom">
        <TD align=left>2009&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>6&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD align=left>2010&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>6&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD align=left>2011&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>6&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD align=left>2012&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>7&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD align=left>2013&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>7&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD align=left>2014 to 2018&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>39&nbsp;</TD>
</TR>
</TABLE><BR>
<P align="justify">
<B>(e) Defined contribution plan </B></P>
<P align="justify">
The defined contribution plan is funded through contributions of the Company and the participants to the plan. CSN has committed to contribute to the plan a percentage of the salary of each participant, ranging from 3% to 5%. The Company&#146;s
contributions to the plan during 2006, 2007 and 2008 amounted to US&#36;6, US&#36;10.1 and US&#36;8.6, respectively.</P>
<P align="justify">
<B>16 Employee benefits</B></P>
<P align="justify">
In addition to the pension fund, the Company makes monthly contributions based on the amount of payroll for government pension, social security and severance indemnity plans, and such payments are expensed as incurred. Also, certain severance
payments are due upon dismissal of employees, consisting principally of one month&#146;s salary and a severance payment calculated at 40% plus 10% (according to Supplementary Law No. 110/2001) of the accumulated contributions made to the government
severance indemnity plan on behalf of the employee. The amounts paid on dismissal totaled
US&#36;7, US&#36;8 and US&#36;6 for the years ended December 31, 2006, 2007 and 2008, respectively. Based on current operating plans, management does not expect that amounts of future severance indemnities will be material.</P>
<P align="center">
FS - 39 </P>

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<H5 align="left" style="page-break-before:always"></H5>
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<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <TR>
    <TD width=100%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<P><B>17 Commitments and contingencies</B></P>
<P><B>(a) Accruals and deposits </B></P>
<P>
The accrual for contingencies, disputed taxes payable and the related legal deposit balances are as follows: </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD colspan=3 align=center><B>As of December 31, 2007</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD colspan=3 align=center><B>As of December 31, 2008</B>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD colspan=3 align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="center"></TD>
        <TD colspan=3 align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center><B>Deposits</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>Accrual</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>Deposits</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>Accrual</B>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Short-term</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Labor&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>58&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>49&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Civil&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>19&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>20&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>77</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>69</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Long-term</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Labor&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>26&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>22&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Civil&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>81&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>10&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Disputed taxes payables&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;IPI&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>450&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1,179&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>512&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>953&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Income tax and social contribution&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>286&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>569&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>333&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>504&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Other taxes&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>134&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>146&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>16&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>100&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Environmental&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>31&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>31&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Other&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>19&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>16&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>29&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>996</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>1,943</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>893</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>1,618</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE><BR>
<P align="justify">
The provisions for contingencies relate to legal proceedings with respect to which CSN deems the likelihood of an unfavorable outcome to be probable and the loss reasonably estimable. This determination is made based on the legal opinion of
CSN&#146;s internal and external legal counsel. CSN believes these contingencies are properly recognized in our financial statements in accordance with Statements of Financial Accounting Standards No. 5 (SFAS No. 5). Those contingencies related to
income taxes and social contribution are accounted for based on the &#147;more-likely-than-not&#148; concept in accordance with FIN 48. CSN is also involved in judicial and administrative proceedings that are aimed at obtaining or defending
CSN&#146;s legal rights with respect to taxes that CSN believes to be unconstitutional or otherwise not required to be paid by CSN. The Company believes that these proceedings will ultimately result in the realization of contingent tax credits or
benefits that can be used to settle direct and indirect tax obligations owed to the Brazilian Federal or State Governments. CSN does not recognize these contingent tax credits or benefits in our financial statements until realization of such gain
contingencies has been resolved. This occurs when a final irrevocable decision is rendered by the Courts in Brazil. When CSN uses contingent tax credits or benefits based on favorable temporary court decisions that are still subject to appeal to
offset current direct or indirect tax obligations, CSN maintains the legal obligation accrued in the Company&#146;s financial statements until a final irrevocable judicial decision on those contingent tax credits or benefits is rendered. The accrual
for the legal obligation related to the current direct or indirect tax obligations offset is not reversed until such time as the utilization of the contingent tax credits or benefits is ultimately realized. The accounting for the contingent tax credits is in accordance with accounting for contingent assets under SFAS No. 5. The Company&#146;s accruals include interest on the tax
obligations that CSN may offset with contingent tax credits or benefits at the interest rate defined in the relevant tax law. </P>
<P align="justify">
CSN classifies an accrual as short-term when it expects the liability to be settled in 360 days or less. As of December 31, 2008, US&#36;69 had been classified as short-term accrual for contingencies (US&#36;77 as of December 31, 2007). This usually
occurs when a final, unappealable and irrevocable judgment has been rendered and the legal processes are in the execution phase. However, given the complexity of the Brazilian legal system and the intricacies of some claims, it is impracticable
for Brazilian companies to predict the time period in which final decisions will be reached for such claims. Consequently, these claims are classified as long-term liabilities.</P>
<P align="center">
FS - 40 </P>

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<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <TR>
    <TD width=100%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<P align="justify">The deposits for contingencies and disputed taxes payable are generally based on (i) accruals recorded in connection with lawsuits, (ii) judicial orders issued in connection with lawsuits and (iii) guarantees in connection with judicial foreclosure
proceedings. Such deposits are classified as long-term assets, and the release of such deposits is conditioned upon judicial order. When such a judicial order is granted in CSN&acute;s favor, the deposit is forfeited and returned to us in cash and
the deposit account is appropriately offset. When such a judicial order is granted in a manner unfavorable to us, the deposit is used to offset the related liability and the deposit account is appropriately offset.</P>
<P align="justify">
<B>Labor contingencies </B></P>
<P align="justify">
As of December 31, 2008, the amount of the accrual relating to probable losses for these contingencies was US&#36;50 (US&#36;59 in 2007). Our legal counselors periodically revise the accruals based on their judgment and the recent track record on
these disputes. Most of the lawsuits are related to alleged joint liability between us and our independent contractors, wage equalization, additional payments for unhealthy and hazardous activities, overtime and disagreement between employees and
the Brazilian government over the amount of severance payable by us. The lawsuits related to the alleged joint liability between us and our independent contractors' represent a large portion of the total labor lawsuits against us and are originated
from the independent contractors lack of payment of labor charges, resulting in our inclusion in the lawsuits. </P>
<P align="justify">
<B>Civil contingencies </B></P>
<P align="justify">
These are mainly claims for indemnities within the civil judicial processes in which we are involved. Such proceedings, in general, are a result of occupational accidents and diseases related to our industrial activities. Our legal counselors
permanently revise the accruals based on their judgment and the recent track record on these disputes. As of December 31, 2008, the amount of the accrual relating to probable losses for these contingencies was US&#36;20 (US&#36;20 as of December 31,
2007).</P>
<P align="justify">
<B>Disputed taxes payable </B></P>
<P>
&#149;  <B><I>Imposto sobre produto industrializado - IPI</I> (Excise Tax) presumed credit on inputs </B></P>
<P>
The Company has accrued a liability for certain tax liabilities that were offset by credits related to IPI excise tax. The accrual is necessary to offset the contingent gain resulting from the use of IPI excise tax credits. The IPI excise tax
credits are similar to value added tax credits related to the purchase of goods used in the production process. Brazilian law prevents companies from recognizing IPI excise tax credits on the acquisition of certain goods. CSN believes that this
prohibition is unconstitutional since it is not consistent with general value added tax principles and CSN is challenging this prohibition in the Brazilian courts. In May 2003, we sought and obtained a favorable preliminary order from a Brazilian
court authorizing us to compensate federal tax liabilities with IPI excise tax credits under dispute. CSN is awaiting the decision of a Brazilian court of first instance. After such a decision is rendered, CSN expects the decision will be subject to
several stages of appellate review before a final unappealable judgment is obtained. The IPI excise tax credit accrual recorded by CSN represents CSN&#146;s statutory obligation to pay taxes that were offset with IPI excise tax credits. </P>
<P>
CSN has noted that several other Brazilian companies have challenged the same prohibition and these companies have received both favorable and unfavorable judgments at different stages of the judicial process. Recently, for example, the Federal
Supreme Court issued a final, unappealable and irrevocable decision on June 25, 2007 against one taxpayer, denying the use of these credits. On August 27, 2007 the proceeding had an unfavorable decision for the Company, which is paying the amount of
US&#36;519 with the Federal Revenue of Brazil in installments and transferred the liability to the accounts of taxes payable in installments. From the unfavorable aforementioned decision, an appeal was filed by the Company, which is awaiting
judgment.</P>
<P align="center">
FS - 41 </P>

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  <TR>
    <TD width=100%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<P>
&#149;  <B>IPI premium credit over exports </B></P>
<P align="justify">
The Company has accrued a liability for certain tax liabilities that were offset by IPI premium tax credits. The accrual is necessary to offset the contingent gain resulting from the use of IPI premium tax credits and represents the statutory
obligation to pay taxes that were offset by these credits. The IPI premium tax credits relate to export sales made during 1992 to 2002. Tax legislation allowed Brazilian companies to recognize IPI premium tax credits until 1983, when an act of the
executive branch of the Brazilian government cancelled such benefits and prohibited companies from recognizing these credits. CSN is challenging the constitutionality of the executive branch&#146;s action since only a law enacted by the Brazilian
legislature can cancel or repeal benefits duly enacted by prior legislation. In August 2003, CSN sought and obtained a favorable decision from a Brazilian court of first instance that authorized the use of IPI premium tax credits.</P>
<P align="justify">
The Brazilian National Treasury appealed such decision and got a favorable decision from Brazilian court of appeals. CSN filed appeals against such decision to both the Brazilian Superior Court of Justice and the Brazilian Federal Supreme Court and
is still awaiting decisions from such courts. In September 2006, the National Treasury filed five tax foreclosures against CSN to require payments in the total amount of approximately R&#36;1 billion, referring to the collection of taxes which
were offset by the use of IPI premium tax credits. </P>
<P align="justify">
During 2007, in view of these executions, the distribution of dividends and the payment of interest on shareholders&#146; equity resolved on April 30, 2007 were suspended and the amount allocated for such purpose was blocked by court decision. On
August 29, 2007, the Company offered assets in lien represented by treasury shares in the amount of US&#36; 270 million (R&#36;536 million translated using the exchange rate as of the date of the transaction). 25% of this amount was substituted by
judicial deposits in monthly installments performed up to December 31, 2007 and as these substitutions took place, the equivalent in shares was released from the lien at the share price determined at the closing price of the day prior to the
deposit. In view of these events, the Company&#146;s current accounts were unblocked, the court decision to suspend the dividends distribution on this date was revoked, and dividends were paid to shareholders as from September 4, 2007. </P>
<P align="justify">
As of December 31, 2008, the IPI premium credit accrual represented the accumulated IPI tax credits used of US&#36;953 (US&#36;1,179 as of December 31, 2007), already updated by the SELIC Brazilian base interest rate.</P>
<P align="justify">
This provision affects the sales taxes line-item of CSN's income statement, and a reversal of this provision would affect the sales taxes and the financial income (expense), net line-items of CSN's income statement.</P>
<P align="justify">
We have noted that several other Brazilian companies have challenged the same prohibition. Recent decisions in lower courts indicated that companies may be entitled to utilize these credits. However, on June 27, 2007 the Brazilian Superior Court
issued a decision against one taxpayer, denying the use of these credits. This decision will be subject to review by the Federal Supreme Court, the highest level of the Courts in this case.</P>
<P>
&#149;  <B>Income tax and social contribution </B></P>
<P>
As disclosed in Note 6, the Company accounts for the uncertainty in income tax and social contribution in accordance with FIN 48 beginning on January 1, 2007. </P>
<P>
<I><U>&#147;Plano Ver&atilde;o&#148;</U></I><I> </I></P>
<P align="justify">
The Company claims recognition of the financial and tax effects on the calculation of income tax and social contribution on net income, related to Consumer Price Index &#150; IPC understated inflation, which occurred in January and February 1989, by
a percentage of 51.87% (&#147;Plano Ver&atilde;o&#148;). In 2004, the proceeding was concluded and judgment was made final and unappealable, granting to CSN the right to apply the index of 42.72% (Jan/89), of which the 12.15% already applied should
be deducted. The application of 10.14% (Feb/89) was granted. The proceeding is currently under accounting investigation.</P>
<P align="center">
FS - 42 </P>

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    <TD width=100%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<P align="justify">
At December 31, 2008, the Company has US&#36;144 million (US&#36;187 million in 2007) as judicial deposit and a provision of US&#36;9 million (US&#36;12 million in 2007), which represents the portion not recognized by the courts. </P>
<P align="justify">
<I><U>Social Contribution on Income from Export Revenues</U></I><I> </I></P>
<P align="justify">
The Company filed a lawsuit challenging the assessment of Social Contribution on Income on export revenues, based on Constitutional Amendment #33/01 and in March 2004, we obtained an initial decision authorizing the exclusion of these revenues from
said calculation basis, as well as the offsetting of amounts paid as from 2001. The lower court decision was favorable and the proceeding is waiting for trial of the appeal filed by the Federal Government in the Regional Federal Court. At December
31, 2008, the amount of suspended liability and the offset credits based on the referred proceedings was US&#36;495 (US&#36;557 at December 31, 2007), already adjusted by the SELIC - Brazilian base interest.</P>
<P align="justify">
&#149;  <B>PIS/COFINS&#150;Law No. 9,718/98 </B></P>
<P align="justify">
PIS and COFINS taxes are assessed on revenues. In 1998, new tax legislation was enacted which required Brazilian companies to pay PIS and COFINS taxes on revenues generated by financial investments. Prior to 1998, the Brazilian constitution dictated
that Brazilian companies were only required to pay PIS and COFINS taxes on revenues generated by operating activities. CSN challenged the constitutionality of the assessment of PIS and COFINS taxes on revenues generated by financial investments
since, in order to expand the PIS and COFINS tax computation basis, the Brazilian legislature was required to observe a constitutionally mandated waiting period prior to enacting the legislation. In addition, at the time the new tax legislation was
enacted, the Brazilian constitution did not allow such taxes to be assessed on revenues generated by financial investments. In February 1999, a lower court confirmed this position. CSN sought and obtained a favorable preliminary order in March 2000.
In April 2000, the Brazilian tax authorities appealed to Brazilian court of appeals. On March 6, 2006, Brazilian court of appeals issued a decision unfavorable to CSN. On March 10, 2006, CSN appealed such decision to both the Superior Court of
Justice and the Supreme Court. Until the resolution of these appeals, CSN&#146;s rights under the initial favorable decision were in effect. The PIS/COFINS accrual represents CSN&#146;s statutory obligation to pay PIS/COFINS taxes due. CSN has noted
that some Brazilian companies obtained favorable final and unappealable judgments in 2005 regarding similar PIS/COFINS legal challenges. Those companies have accordingly reversed some or most of their related disputed tax payment provisions.
However, one company did not obtain a favorable decision and was required to pay the related tax obligation.</P>
<P align="justify">
On May 31, 2007, a decision in our favor was made final and unappealable and was published in the Official Gazette of Justice, on June 16, 2007, when in view of such decision, we reversed the provision existing on that date. The reversal of the
provision increased our operating results of 2007 by US&#36;179.</P>
<P align="justify">
<B>Other non-income tax contingencies </B></P>
<P align="justify">
We are party to other judicial and administrative proceedings not described in the notes to CSN&#146;s consolidated financial statements, involving a total of approximately US&#36;2.5 billion as of December 31, 2008 (US&#36;2.6 billion as of
December 31, 2007), which are mainly tax assessments received related to fines and penalties on credits used to offset legal and tax-related obligations that were previously considered as remote. The Company&#146;s external legal counsel deemed that
the risk of loss arising from these lawsuits was only possible as opposed to probable. Therefore, we did not record accruals for contingencies with respect to these lawsuits.</P>
<P align="justify">
Other tax contingencies relate to a variety of disputes for which CSN has recorded provisions for probable losses. No single group of similar claims constitutes more than 5% of total contingencies. </P>
<P align="justify">
<B>(b) Other commitments and contingencies </B></P>
<P align="justify">
&#149;  <B>Environmental Regulation </B></P>
<P align="center">
FS - 43 </P>

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  <TR>
    <TD width=100%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<P align="justify">
The Company is subject to Brazilian federal, state and municipal environmental laws and regulations governing air emissions, waste water discharges, and solid and hazardous waste handling and disposal. The Company is committed to controlling the
substantial environmental impact caused by our steelmaking, mining and logistics operations, in accordance with international standards and in compliance with environmental laws and regulations in Brazil. The Company believes that it is in
substantial compliance with applicable environmental requirements.</P>
<P align="justify">
The Company records accruals for remediation costs and environmental lawsuits when a loss is probable and the amount can be reasonably estimated. The Company records provisions for all environmental liabilities and obligations for which the Company
is formally enforced by competent authorities. As of December 31, 2008, the Company has a provision for environmental regulation in the amount of US&#36;31 (US&#36;31 as of December 31, 2007) which is considered sufficient by management and its
legal advisors to cover all probable losses. No changes in the present conditions and circumstances are expected for the near term which could impact our financial position, results for the year or cash flows.</P>
<P align="justify">
The main accruals for environmental contingencies as of December 31, 2008 relates to cleaning-up obligations at former coal mines decommissioned by 1989; legal environmental compensation (Federal Law n. .985/2000) projected for new ventures at Santa
Catarina, Minas Gerais and Rio de Janeiro states; and cleaning-up obligations due to former operations of Presidente Vargas steelworks. The Company did not include in the accruals the environmental liabilities related to ERSA, since they are by
contract the express accountability of the former owner (CESBRA/BRASCAN). </P>
<P align="justify">
Additionally, we currently have no possible losses arising from environmental lawsuits or remediation costs to incur, that are presently deemed possible. No changes are expected in the near term for that situation.</P>
<P align="center">
FS - 44 </P>

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  <TR>
    <TD width=100%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<P align="justify">
<B>Commitments </B></P>
<P align="justify">
<B>a) &#147;Take-or-pay&#148; contracts </B></P>
<P align="justify">
<B>- MRS Log&iacute;stica S.A. </B></P>
<P align="justify">
The Company and MRS Log&iacute;stica S.A. entered into a 10-year contract for iron ore transport. According to the "take-or-pay" clause, the Company is committed to pay at least 80% of the tons agreed to be transported by MRS. The volume of iron ore
transported by MRS in addition to the minimum agreed (take-or-pay) for a given month may be compensated with lower volumes transported in subsequent months. For the take-or-pay quantities, the Company will pay in accordance with the terms of the
contract. The future minimum amounts of required payments at December 31, 2008, translated at the exchange rate at December 31, 2008, are as follows:</P>
<TABLE border=0 width=60% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD></TD>
        <TD width=2%></TD>
        <TD width=25%></TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>Amount (US&#36;)</B></TD></TR>

<TR valign="bottom" style="font-size: 1px">
  <TD>&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD align=left>2009&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>107&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>2010&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>107&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>2011&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>107&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>2012&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>107&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>2013&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>107&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>2014 and thereafter&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>214&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Total&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>749&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE>
<BR>
<P>
<B>- Ferrovia Centro-Atl&acirc;ntica S.A. (&#147;FCA&#148;) </B></P>
<P align="justify">
The Company and FCA entered into a long-term contract for mining products transportation which maturity is scheduled for 2013. According to the "take-or-pay" clause, the Company is committed to ship the minimum of 1,900,000 tons per year. The
contract also previews that if CSN&#146;s productive expansion occurs, the minimum volume may be increased up to 2,800,000 tons per year. The future minimum amounts of required payments at December 31, 2008, translated at the exchange rate at
December 31, 2008, are as follows:</P>
<TABLE border=0 width=60% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD></TD>
        <TD width=2%></TD>
        <TD width=25%></TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>Amount (US&#36;)</B></TD></TR>

<TR valign="bottom" style="font-size: 1px">
  <TD>&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD align=left>2009&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>28&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>2010&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>28&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>2011&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>28&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>2012&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>28&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>2013&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>28&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Total&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>140&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE>
<BR>
<P>
<B>- ALL &#150; Am&eacute;rica Latina Log&iacute;stica do Brasil S.A. </B></P>
<P align="justify">
The Company and ALL entered into a long-term contract for steel products transportation on the route from &Aacute;gua Branca to Arauc&aacute;ria, renewable under terms and conditions agreeable to both parties. According to the "take-or-pay" clause,
the Company is committed to ship a minimum volume per month of 30,000 tons and, in case the volume for the month exceeds the minimum, the Company will have the right to a discount in tariffs. Also, CSN may opt for transporting steel products on the
return trip from Arauc&aacute;ria to &Aacute;gua Branca at a maximum quantity of 600 shipments at a minimum of 50 tons per shipment. The tariffs may be adjusted once a year at each contract anniversary based on the changes in prices of fuel and
cumulative inflation rates between anniversaries. For the take-or-pay quantities, the Company will pay in </P>
<P align="center">
FS - 45 </P>

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    <TD width=100%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<P align="justify">
accordance with the terms of the contract. As of December 31, 2008, the outstanding balance of this take-or-pay contract is US&#36;3, which will be paid at the end of 2009.. </P>
<P align="justify">
<B>- White Martins Gases Industriais Ltda. </B></P>
<P align="justify">
To secure gas supply (oxygen, nitrogen and argon), in 2005 the Company signed an addendum related to the 22-year &#147;take-or-pay&#148; agreement with White Martins Gases Industriais entered into in 1994, by which CSN is committed to acquire at
least 90% of the annual gas volume contracted from White Martins. The future minimum amounts of required payments at December 31, 2008, translated at the exchange rate at December 31, 2008, are as follows:</P>
<TABLE border=0 width=60% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD width=50%></TD>
        <TD width=2%></TD>
        <TD width=47%></TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>Amount (US&#36;)</B></TD></TR>
<TR valign="bottom" style="font-size: 1px">
  <TD>&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>
<TR>
        <TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>2009&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>41&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>2010&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>41&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>2011&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>41&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>2012&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>41&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>2013&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>41&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>2014 and thereafter&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>122&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Total&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>327&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE>
<BR>
<P align="justify">
- - <B>Companhia Estadual de G&aacute;s do Rio de Janeiro - CEG RIO </B></P>
<P align="justify">
To secure natural gas supply, in 2007 the Company signed a 5-year &#147;take-or-pay&#148; agreement with CEG RIO, by which CSN is committed to acquire at least 286,160,000 m<SUP>3</SUP> of natural gas, which represents 70% of the annual gas volume
contracted from CEG RIO. The future minimum amounts of required payments at December 31, 2008, translated at the exchange rate at December 31, 2008, are as follows:</P>
<TABLE border=0 width=60% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <TR>
    <TD width=50%></TD>
    <TD width=2%></TD>
    <TD width=47%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right><B>Amount (US&#36;)</B></TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR>
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>2009&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>99&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>2010&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>99&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>2011&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>99&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>2012&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>99&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR>
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Total&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>396&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<P align="justify">
In addition, if the Company does not acquire the minimum volume agreed, the amount paid which relates to that difference may be compensated in future years, including one year after the contract expiration.</P>
<P align="justify">
<B>b) Steelmaking (Slab Mills) and Long Steel Production </B></P>
<P align="justify">
The Company initiated its 600 thousand ton long products brownfield project in Volta Redonda, in the State of Rio de Janeiro, which will be developed inside its main steelmaking facility. CSN intends to produce 600 thousand tons of long products,
such as rod bar and wire rod. The Company will benefit from the existing infrastructure and utilities used to support a blast furnace and a former foundry which were discontinued. The total investment in long steel products production will be of
approximately US&#36;354 in the necessary installations, including expanding and upgrading a 30-ton electric furnace. The facility is expected to be concluded in December 2012 and will use surplus pig iron and low value added slabs as raw materials.
Additionally, projects which were previously announced, such as the greenfield slab mills in the city of Itagua&iacute;, in the State of Rio de Janeiro, and the greenfield slab mill in the city of Congonhas, in the State of Minas Gerais and the
Logistics Platform Project, in the city of Itagua&iacute;, in the State of Rio de Janeiro (except for the
ongoing improvements on its Container Terminal and for the expansion of its Solid Bulks Terminal) were put on hold by the Board of Directors due to the uncertainty about the duration of the current global economic scenario. </P>
<P align="center">
FS - 46 </P>

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  <TR>
    <TD width=100%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<P align="justify"><B>c) Iron Ore Project </B></P>
<P align="justify">
CSN&#146;s iron ore business comprises the expansion of our mining activities and our seaport facilities, the construction of pellet plants and to a lesser extent, the trading of iron ore produced by other companies through our own logistics
network. We expect to invest a total of US&#36;4.5 billion to produce and/or sell approximately 90 million tons of iron ore products, of which US&#36;839 million have already been invested. We expect to finance these investments with the National
Economic and Social Development Bank (<I>Banco Nacional de</I> <I>Desenvolvimento Econ&ocirc;mico Social</I>-BNDES), export credit agencies, the proceeds from offerings of securities and with the free cash flow from our current operations.
CSN&#146;s iron ore project schedule and expected investments are the following: </P>
<P align="justify">
&#149;  In January 2004, we announced the approval of investments of approximately US&#36;1.0 billion to expand the annual production capacity of the Casa de Pedra iron ore mine to 53 million tons. In connection with the Namisa joint-venture, we
reviewed these figures to US&#36;1.5 billion, and the expansion of the annual production of Casa de Pedra from 53 million to 70 million tons, which is currently being implemented. As of December, 2008, approximately US&#36;540 had already been
invested in the increase in production capacity of Casa de Pedra mine and its current annual production capacity is 21 million tons.</P>
<P align="justify">
&#149;  In October 2008, as part of the partial sale of Namisa, some of the capital expenditures which were originally planned for Casa de Pedra were transferred to Namisa, including two pellet plants. For information on our sale of 40% of our
ownership interest in Namisa, At the end, the total investments resulted in US&#36; 2 billion, adding volume to reach 33 million tons, including two pellets plants. The current capacity is now 7 million tons. It is important to mention that those
capital expenditure will be executed together with Namisa's new business partner group. </P>
<P align="justify">
&#149;  We are also investing approximately US&#36;1.0 billion in the expansion of the seaport solid bulk terminals in Itagua&iacute; to enable annual exports of 100 million tons of iron ore. Of this amount, approximately US&#36;280 have already
been invested. CSN&#146;s current annual export capacity is equivalent to 30 million tons. </P>
<P align="justify">
<B>d) Cement Project </B></P>
<P align="justify">
This project represents the entrance of CSN into the cement market, taking advantage of the slag generated by our blast furnaces and of our limestone reserves, located in Arcos, Minas Gerais. These two raw materials, slag and limestone, which are
further transformed into clinker, account for approximately 95% of the production cost to produce cement. We are investing approximately US&#36;384 to build a greenfield grinding mill and clinker furnace, with capacity of 2.3 million tons and
820,000 tons, respectively. We expect the grinding mill to produce 0.4 million of cement in 2009 and to reach its full capacity by 2011. These investments will be financed by BNDES, which has already approved a seven-year credit line of up to
US&#36;81 million indexed based on the long-term interest rate (<I>Taxa de Juros de Longo-</I>Prazo), or TJLP, and part indexed on US dollars, as well as the use of free cash flow from our current operations. </P>
<P align="justify">
<B>e) MRS </B></P>
<P align="justify">
The Brazilian Southeastern railway system, covering 1,674 km of track, serves the S&atilde;o Paulo &#150; Rio de Janeiro &#150; Belo Horizonte industrial triangle in Southeast Brazil, and links our mines located in the State of Minas Gerais to the
ports located in the states of S&atilde;o Paulo and Rio de Janeiro and to the steel mills of CSN, Companhia Sider&uacute;rgica Paulista, or Cosipa, and Gerdau A&ccedil;ominas. In addition to serving other customers, the line transports iron ore from
our mines at Casa de Pedra in the State of Minas Gerais and coke and coal from the Itagua&iacute; Port in the State of Rio de Janeiro to the Presidente Vargas steelworks and transports our exports to the ports of Itagua&iacute; and Rio de Janeiro.
The railway system connects the Presidente Vargas steelworks to the container terminal at Itagua&iacute; Port, which handles most of our steel exports. Our transport volumes represent approximately 22% of the Brazilian Southeastern railway
system&#146;s total volume. As of December 31, 2008, US&#36;1,578 were outstanding and payable by MRS to the Brazilian government federal agencies
within the next 18 years, of which US&#36;1,527 are treated as an off-balance sheet item. While CSN is jointly and severally liable with the other principal MRS shareholders for the full payment of the outstanding amount, we expect that MRS will
make the lease payments through internally generated funds and proceeds from financing.</P>
<P align="center">
FS - 47 </P>

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  <TR>
    <TD width=100%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<P align="justify"><B>f) CFN/ Transnordestina </B></P>
<P align="justify">
In August 2006, in order to enable the implementation of a major infrastructure project led by the Brazilian federal government, our Board of Directors approved a transaction to merge Transnordestina S.A. into and with Companhia Ferrovi&aacute;ria
do Nordeste &#150; CFN. The surviving entity was later renamed Transnordestina Log&iacute;stica S.A. or Transnordestina. Investments of approximately R&#36;5.4 billion were approved to build the Nova Transnordestina Project, which includes an
additional 1,728 km of large gauge, world class railway track. The investments will allow the company to increase the transportation of various products, such as soy beans, cotton, sugar cane, fertilizers, oil and fuels, iron ore and limestone.
According to a Memorandum of Understandings entered into as of November 25, 2005, the investments will be financed through: R&#36;823 million from FINOR &#150; Northeastern Investment Fund; R&#36;2.6 billion from SUDENE - the Northeastern
Development Federal Agency; a R&#36;225 million loan from BNDES to Transnordestina; R&#36;165 million from Brazilian Federal Resources; R&#36;180 million from Brazilian Northeast Bank  and another R&#36;1.4 billion equity from CSN, out of which
R&#36;675 million will be supported by a loan from BNDES to us. The construction of the first 100 km started in January 2007 and as of December 31, 2008 over US&#36;102 (R&#36;180 million) had already been invested by CSN. This project is expected
to be concluded by the end of 2010. </P>
<P align="justify">
The Company guarantees CFN&#146;s borrowings from BNDES which amount to US&#36;104 at December 31, 2008. Those borrowings are for purposes of financing the investments in infrastructure of Transnordestina. The maximum amount for future payments the
guarantor may be required to make under the guarantee is US&#36;104.</P>
<P align="justify">
As of December 31, 2008, CSN holds 84.5%<B> </B>of the capital stock of Transnordestina S.A., which has a 30-year concession granted in 1998 to operate Brazil&#146;s Northeastern railway system. The Northeastern railway system covers 4,238 km of
track and operates in the states of Maranh&atilde;o, Piau&iacute;, Cear&aacute;, Para&iacute;ba, Pernambuco, Alagoas and Rio Grande do Norte. It also connects with the region&#146;s leading ports, thereby offering an important competitive advantage
through opportunities for intermodal transportation solutions and made-to-measure logistics projects. As of December 31, 2008, R&#36;38.7 million was outstanding over the remaining 18-year term of the concession, of which R&#36;37.7 million are
treated as an off-balance sheet item. CSN is jointly and severally liable for the full payment of the outstanding amount. </P>
<P align="justify">
<B>g) Itagua&iacute; CSN Logistics Platform Project </B></P>
<P align="justify">
The Company holds the concession to operate a solid bulks terminal, one of four terminals that form the Itagua&iacute; Port, located in the State of Rio de Janeiro, for a term expiring in 2022 and renewable for another 25 years. Itagua&iacute; Port,
in turn, is connected to the Presidente Vargas steelworks, Casa de Pedra and CFM by the southeastern railway system. Our imports of coal and coke are made through this terminal. Under the terms of the concession, CSN undertakes to unload at least
3.4 million tons of coal and coke from our suppliers through the terminal annually, as well as shipments from third parties. Among the approved investments that the Company announced is the development and expansion of the solid bulks terminal at
Itagua&iacute; to also handle up to 160 million tons of iron ore per year. </P>
<P align="justify">
Regarding our seaport Itagua&iacute; Logistic Platform Project, announced on May 7, 2008, our capital expenditures investments were put on hold by the Board of Directors except for the following related projects:</P>
<P align="justify">
&#149;  Expansion of the existing Container Terminal from 440 thousand container year to 640 thousand container year, including improvements on the existing berths. We expect to invest approximately US&#36;162. </P>
<P align="justify">
&#149;  Expansion of the Solid Bulks Terminal in Itagua&iacute; to enable annual exports of approximately 100 million tons of iron ore as described above. </P>
<P align="center">
FS - 48 </P>

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  <TR>
    <TD width=100%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<P align="justify">
<B>h) Sepetiba Tecon Concession </B></P>
<P align="justify">
We own 99.99% of Sepetiba Tecon S.A., or Tecon, which has a concession to operate, for a 25-year term that is renewable for another 25 years, the container terminal at Itagua&iacute; Port. As of December 31, 2008, US&#36;139 (R&#36;325 million) of
the cost of the concession remained payable over the next 18 years of the lease. </P>
<P align="justify">
The future minimum rental payments, as of December 31, 2008, are due as follows:</P>
<TABLE border=0 width=80% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD></TD>
        <TD width=2%></TD>
        <TD width=21%></TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>Amount (US&#36;)</B></TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD colspan="3" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
<TR>
        <TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>2009&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>8&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>2010&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>8&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>2011&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>8&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>2012&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>8&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>2013&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>8&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>2014 and thereafter&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>99&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Total&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>139&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE>
<BR>
<P align="justify">
<B>i)&nbsp;Iron ore supply agreement with Namisa </B></P>
<P align="justify">The Company entered into long-term agreements at  the full amount of U$S3,041 with its non-consolidated subsidiary Namisa to  supply iron ore from the Casa de Pedra mine, with maturity scheduled for 2041,  as further described below:</P>
<P align="justify">
<I>Port Operating Service Agreement </I></P>
<P align="justify">
On December 30, 2008, we received approximately US&#36;2.2 billion as pre-payment for a prepayment agreement with Namisa with a term of 35 years. Under this agreement, we are required to render port services to Namisa, which consists of transporting
from 17.1 million tons to 39.0 million tons of iron ore annually. Depending on the market price for these port services, we may receive additional amounts under this agreement, which is set to expire on 2043. </P>
<P align="justify">
<I>High Silica ROM</I> </P>
<P align="justify">
On December 30, 2008, we received approximately US&#36;665 as pre-payment for a take-or-pay agreement with Namisa with a term of 30 years. Under this agreement, we are required to provide high silica crude iron ore ROM to Namisa in a volume that
ranges from 42.0 million tons to 54.0 million tons per year. Depending on the market price for high silica crude iron ore ROM, we may receive additional amounts under this agreement, which is set to expire on 2038. </P>
<P align="justify">
<I>Low Silica ROM</I> </P>
<P align="justify">
On December 30, 2008, we received approximately US&#36;177 as pre-payment for a take-or-pay agreement with Namisa with a term of 35 years. Under this agreement, we are required to provide low silica crude iron ore ROM to Namisa in a volume that
ranges from 5.0 million tons to 2.8 million tons per year. Depending on the market price for low silica crude iron ore ROM, we may receive additional amounts under this agreement, which is set to expire on 2043. </P>
<P align="justify">
<B>j) Covenants </B></P>
<P align="justify">
Certain long-term debt instruments contain financial covenants by which the Company is required to maintain levels of leverage, liquidity and ratio indices, such as debt to EBITDA and interest coverage. As of December 31, 2008, the Company was fully
compliant with its financial covenants.</P>
<P align="center">
FS - 49 </P>

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  <TR>
    <TD width=100%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<P align="justify">
<B>18 Guarantees </B></P>
<P align="justify">
The Parent Company provides guarantees on obligations of its subsidiaries to third parties. The Parent Company has also provided unconditional and irrevocable guarantees for obligations of certain of its affiliates as follows: </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD width=20%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD></TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center><B>Currency</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>Notional</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>Expiration Date</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>Conditions</B>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>

        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>(in US&#36;</B>&nbsp;s</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>Millions)</B></TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>
<TR>
        <TD colspan=9>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Transnordestina&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>R&#36;&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>10.3&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>Nov 13, 2009&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>BNDES loan guarantee&nbsp;</TD></TR>
<TR>
        <TD colspan=9>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Transnordestina&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>R&#36;&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>8.6&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>Nov 15, 2020&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>BNDES loan guarantee&nbsp;</TD></TR>
<TR>
        <TD colspan=9>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Transnordestina&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>R&#36;&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>5.6&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>Nov 15, 2015&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>BNDES loan guarantee&nbsp;</TD></TR>
<TR>
        <TD colspan=9>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Transnordestina <SUP>(2)</SUP></TD>
        <TD>&nbsp;</TD>
        <TD align=center>R&#36;&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>9.8&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>Apr 6, 2009&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>BNDES loan guarantee&nbsp;</TD></TR>
<TR>
        <TD colspan=9>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Transnordestina <SUP>(2)</SUP></TD>
        <TD>&nbsp;</TD>
        <TD align=center>R&#36;&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>8.2&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>Apr 28, 2009&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>BNDES loan guarantee&nbsp;</TD></TR>
<TR>
        <TD colspan=9>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Transnordestina&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>R&#36;&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>7.7&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>Sep 18, 2009&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>BNDES loan guarantee&nbsp;</TD></TR>
<TR>
        <TD colspan=9>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Transnordestina <SUP>(2)</SUP></TD>
        <TD>&nbsp;</TD>
        <TD align=center>R&#36;&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>8.5&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>Feb 16, 2009&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>BNDES loan guarantee&nbsp;</TD></TR>
<TR>
        <TD colspan=9>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Transnordestina <SUP>(2)</SUP></TD>
        <TD>&nbsp;</TD>
        <TD align=center>R&#36;&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>2.1&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>May 26, 2009&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>BNDES loan guarantee&nbsp;</TD></TR>
<TR>
        <TD colspan=9>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Transnordestina&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>R&#36;&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>38.5&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>Nov 2, 2009&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>BNDES loan guarantee&nbsp;</TD></TR>
<TR>
        <TD colspan=9>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Transnordestina&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>R&#36;&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>2.8&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>Nov 1, 2010&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>BNDES loan guarantee&nbsp;</TD></TR>
<TR>
        <TD colspan=9>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Transnordestina&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>R&#36;&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>1.6&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>Sep 14, 2009&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>BNDES loan guarantee&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Collateral signature in guarantee contract&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>for writ of summons, pledge, appraisal&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD align=left>CSN Cimentos&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>R&#36;&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>11.6&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>Indeterminate&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>and registration.&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Collateral signature in guarantee contract&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>CSN Cimentos&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>R&#36;&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>3.4&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>Indeterminate&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>for tax foreclosure&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>To guarantee the warrantee&#146;s responsibility&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Prada&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>R&#36;&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>0.3&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center> &nbsp; &nbsp;Indeterminate&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>regarding tax foresclosure&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>To guarantee the warrantee&#146;s responsibility&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Prada&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>R&#36;&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>1.2&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center> &nbsp; &nbsp;Indeterminate&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>regarding tax foresclosure&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>To guarantee the warrantee&#146;s responsibility&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Prada&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>R&#36;&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>0.1&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center> &nbsp; &nbsp;Indeterminate&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>regarding ICMS&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>To guarantee the warrantee&#146;s responsibility&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>regarding tax foresclosure filed by Parana&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Prada&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>R&#36;&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>2.6&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center> &nbsp; &nbsp;Indeterminate&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>State&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>To guarantee the warrantee&#146;s responsibility&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Prada&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>R&#36;&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>0.1&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center> &nbsp; &nbsp;Indeterminate&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>regarding tax foresclosure&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>To guarantee the warrantee&#146;s responsibility&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Prada&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>R&#36;&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>0.1&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center> &nbsp; &nbsp;Indeterminate&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>regarding tax foresclosure&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>To guarantee the warrantee&#146;s responsibility&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>regarding the purchase and sale of electric&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Prada&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>R&#36;&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>0.2&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>Jan 3, 2012&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>power&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>To guarantee the warrantee&#146;s responsibility&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>regarding infraction notes to the Revenue&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Metalic&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>R&#36;&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>0.4&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center> &nbsp; &nbsp;Indeterminate&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Services of Cear&aacute; State&nbsp;</TD></TR>
</TABLE>
<BR>
<P align="center">
FS - 50 </P>

<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_f55"></A>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <TR>
    <TD width=100%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD width=20%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD></TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>To guarantee the warrantee&#146;s responsibility&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>CSN Energia&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>R&#36;&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>0.4&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>Indeterminate&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>regarding tax foresclosure&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Collateral by CSN to issue the Export&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Sepetiba Tecon <SUP>(2)</SUP></TD>
        <TD>&nbsp;</TD>
        <TD align=center>R&#36;&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>2.1&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>June 1, 2009&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Credit Note&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Collateral by CSN to issue the Export&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Sepetiba Tecon&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>R&#36;&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>6.4&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>May 5, 2011&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Credit Note&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>CSN Islands VIII<SUP>(1)</SUP></TD>
        <TD>&nbsp;</TD>
        <TD align=center>US&#36;&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>550.0&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>Dec 16, 2013&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Guarantee by CSN in Bond issuance&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>CSN Islands IX <SUP>(1)</SUP></TD>
        <TD>&nbsp;</TD>
        <TD align=center>US&#36;&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>400.0&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>Jan 15, 2015&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Guarantee by CSN in Bond issuance&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>CSN Islands X <SUP>(1)</SUP></TD>
        <TD>&nbsp;</TD>
        <TD align=center>US&#36;&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>750.0&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>Perpetual&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Guarantee by CSN in Bond issuance&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Guarantee by CSN in Promissory Notes&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Cinnabar&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>US&#36;&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>20.0&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>Oct 29, 2009&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>issuance&nbsp;</TD></TR>
<TR>
        <TD colspan=9>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>CSN Madeira&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>US&#36;&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>76.8&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>Aug 21, 2009&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Guarantee by CSN in Import Loan&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Guarantee in agreement for the rendering&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Nacional Min&eacute;rios S.A.&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>US&#36;&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>20.0&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>Dec 31, 2009&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>of external guarantee&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>A&ccedil;os Longos&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>US&#36;&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>17.3&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>Indeterminate&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Letter of Credit for equipment acquisition&nbsp;</TD></TR>
<TR>
        <TD colspan=9>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>CSN Cimentos&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>US&#36;&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>0.9&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>Aug 30, 2009&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Letter of Credit for equipment acquisition&nbsp;</TD></TR>
</TABLE><BR>
<P>
<SUP>(1)</SUP> Finance subsidiaries 100% owned by the Company which, fully and unconditionally, guarantees the installments. <SUP> <br>
(2)</SUP> Expired on the maturity date mentioned above and renewed after the expiration date. </P>
<P align="center">
FS - 51 </P>

<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_f56"></A>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <TR>
    <TD width=100%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<P align="justify">
<B>19 Segment and geographical information </B></P>
<P align="justify">
The Company has adopted SFAS No. 131 &#147;Disclosures about Segments of an Enterprise and Related Information&#148; (&#147;SFAS 131&#148;) with respect to the information it presents about its operating segments. SFAS 131 introduces a
&#147;management approach&#148; concept for reporting segment information, whereby financial information is required to be reported on the same basis that the chief operating decision maker uses such information internally for evaluating segment
performance and deciding how to allocate resources to segments. Accordingly, we analyze our segment information as follows: </P>
<P align="justify">
Steel &#150; comprises our steel manufacturing and sales activities; </P>
<P align="justify">
Mining &#150; comprises iron ore and tin mining by our mining subsidiaries, as well as mining operations of the Casa de Pedra mine; </P>
<P align="justify">
Logistics &#150; comprises our infrastructure as a whole, with our transportation systems as they pertain to the operations of our port as well as our investments in railroad investees. Also, we consider in this segment our energy subsidiaries; and</P>
<P align="justify">
Cement &#150; comprises operations under development of our cement subsidiary, which started up activities in May 2009. </P>
<P align="justify">
The information presented to top management with respect to the performance of each segment is generally derived directly from the accounting records together with certain intersegment allocations. Corporate transactions, such as loans and financing
and cash surplus investments, are allocated within our steel segment.</P>
<P align="justify">
Sales by geographic area are determined based on the location of the customers. On a consolidated basis, domestic sales are represented by revenues from customers located in Brazil and export sales represent revenues from customers located outside
of Brazil</P>
<P align="justify">
The majority of the Company&#146;s long-lived assets are located in Brazil. </P>
<P align="center">
FS - 52 </P>

<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_f57"></A>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <TR>
    <TD width=100%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD></TD>
        <TD width=2%></TD>
        <TD width=10%></TD>
        <TD width=2%></TD>
        <TD width=10%></TD>
        <TD width=2%></TD>
        <TD width=10%></TD>
        <TD width=2%></TD>
        <TD width=10%></TD>
        <TD width=2%></TD>
        <TD width=10%></TD>
        <TD width=2%></TD>
        <TD width=10%></TD></TR>
<TR valign="bottom" style="font-size: 1px">
  <TD>&nbsp;</TD>
  <TD></TD>
  <TD colspan="11" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD colspan="11" align=center><B>Year ended December 31, 2006</B>&nbsp;</TD>
  </TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD colspan="11" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>
<TR>
  <TD colspan=13>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
  <TD>&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  <TD align="center"></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  <TD align="center"></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  <TD align="center"></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  <TD align="center"></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  <TD align="center"></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center><B>Steel</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>Mining</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>Logistics</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>Cement </B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align="center"><B>Eliminations</B></TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>Consolidated</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD align=left><B>Results</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Revenues&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;&nbsp;&nbsp;Domestic sales&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>3,402&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>98&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>74&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">(24)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>3,550&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;&nbsp;&nbsp;Export sales&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1,263&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>1,263&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Sales taxes.&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(879)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(13)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(7)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(899)</TD></TR>
<TR valign="bottom">
        <TD align=left>Discounts, returns and allowances&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(68)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(68)</TD></TR>
<TR valign="bottom">
        <TD align=left>Cost and operating expenses&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(2,484)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(36)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(70)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">24&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(2,566)</TD></TR>
<TR valign="bottom">
        <TD align=left>Financial income (expenses), net&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(535)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>2&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(533)</TD></TR>
<TR valign="bottom">
        <TD align=left>Foreign exchange and monetary loss&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>216&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>2&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>218&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Other non-operating income&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>22&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>22&nbsp;</TD></TR>
<TR valign="bottom">


        <TD align=left>Income taxes&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(304)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>8&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(296)</TD></TR>
<TR valign="bottom">
        <TD align=left>Equity in results of affiliated companies&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>58&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>58&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Net income (loss)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>691&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>49&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>9&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">-&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>749&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=13>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Other information</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Total assets&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>8,420</B>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right><B>15</B>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right><B>94</B>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right><B>19</B>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right><B>8,548</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Capital expenditures&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>687&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>3&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>16&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>706&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Investments in affiliated companies&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>275&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>275&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Goodwill&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>60&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>35&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>5&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>100&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Depreciation and amortization expenses&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(203)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(2)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(205)</TD></TR>
<TR>
        <TD colspan=13>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Sales by geographic area</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD></TR>
<TR>
        <TD colspan=13>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Asia&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>48&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>48&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>North America&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>614&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>614&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Latin America&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>94&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>94&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Europe&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>465&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>465&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Others&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>42&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>42&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Export sales&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1,263&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>1,263&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Domestic sales&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>3,402&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>98&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>74&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right">(24)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>3,550&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Total&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>4,665</B>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right><B>98</B>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right><B>74</B>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align="right"><b>(24)</b></TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right><B>4,813</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE>
<BR>
<P align="center">
FS - 53 </P>

<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_f58"></A>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <TR>
    <TD width=100%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD></TD>
        <TD width=2%></TD>
        <TD width=8%></TD>
        <TD width=2%></TD>
        <TD width=8%></TD>
        <TD width=2%></TD>
        <TD width=8%></TD>
        <TD width=2%></TD>
        <TD width=8%></TD>
        <TD width=2%></TD>
        <TD width=8%></TD>
        <TD width=2%></TD>
        <TD width=8%></TD></TR>
<TR valign="bottom" style="font-size: 1px">
  <TD>&nbsp;</TD>
  <TD></TD>
  <TD colspan="11" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD colspan="11" align=center><B>Year ended December 31, 2007</B>&nbsp;</TD>
  </TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD colspan="11" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
<TR>
        <TD colspan=13>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
  <TD>&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center><B>Steel</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>Mining</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>Logistics</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>Cement</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>Eliminations</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>Consolidated</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD align=left><B>Results</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Revenues&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;&nbsp;&nbsp;&nbsp;Domestic sales&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>5,090&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>49&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>160&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(16)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>5,283&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;&nbsp;&nbsp;&nbsp;Export sales&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1,477&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>218&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>1,695&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Sales taxes.&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(1,053)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(187)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(65)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(1,305)</TD></TR>
<TR valign="bottom">
        <TD align=left>Discounts, returns and allowances&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(156)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(156)</TD></TR>
<TR valign="bottom">
        <TD align=left>Cost and operating expenses&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(3,130)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(347)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(189)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(6)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>16&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(3,656)</TD></TR>
<TR valign="bottom">
        <TD align=left>Financial income (expenses), net&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(568)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>319&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>30&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(219)</TD></TR>
<TR valign="bottom">
        <TD align=left>Foreign exchange and monetary loss&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>447&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(14)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>5&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>438&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Other non-operating income&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>81&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>81&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Income taxes&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(522)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(7)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(5)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(534)</TD></TR>
<TR valign="bottom">
        <TD align=left>Equity in results of affiliated companies&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(12)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(4)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>92&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>76&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Net income (loss)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1,654&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>27&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>28&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(6)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>1,703&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=13>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Other information</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Total assets&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>7,255</B>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right><B>3,975</B>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right><B>744</B>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right><B>91</B>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right><B>12,065</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Capital expenditures&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>362&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>192&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>29&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>49&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>632&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Investments in affiliated companies&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>399&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>399&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Goodwill&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>117&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>43&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>6&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>166&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Depreciation and amortization expenses&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(221)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(147)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(26)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(3)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(397)</TD></TR>
<TR>
        <TD colspan=13>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Sales by geographic area</B>&nbsp;</TD>

        <TD>&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD></TR>
<TR>
        <TD colspan=13>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Asia&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>48&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>7&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>55&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>North America&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>665&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>99&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>764&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Latin America&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>96&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>14&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>110&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Europe&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>614&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>90&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>704&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Others&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>54&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>8&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>62&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Export sales&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1,477&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>218&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>1,695&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Domestic sales&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>5,090&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>49&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>160&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(16)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>5,283&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Total&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>6,567</B>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right><B>267</B>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right><B>160</B>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right><B>-</B>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right><B>(16)</B></TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right><B>6,978</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE>
<BR>
<P align="center">
FS - 54 </P>

<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_f59"></A>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <TR>
    <TD width=100%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD></TD>
        <TD width=2%></TD>
        <TD width=8%></TD>
        <TD width=2%></TD>
        <TD width=8%></TD>
        <TD width=2%></TD>
        <TD width=8%></TD>
        <TD width=2%></TD>
        <TD width=8%></TD>
        <TD width=2%></TD>
        <TD width=8%></TD>
        <TD width=2%></TD>
        <TD width=8%></TD></TR>
<TR valign="bottom" style="font-size: 1px">
  <TD>&nbsp;</TD>
  <TD></TD>
  <TD colspan="11" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD colspan="11" align=center><B>Year ended December 31, 2008</B>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
  <TD>&nbsp;</TD>
  <TD></TD>
  <TD colspan="11" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>
<TR>
  <TD colspan=13>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
  <TD>&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=center><B>Steel</B>&nbsp;</TD>
  <TD align="center">&nbsp;</TD>
  <TD align=center><B>Mining</B>&nbsp;</TD>
  <TD align="center">&nbsp;</TD>
  <TD align=center><B>Logistics</B>&nbsp;</TD>
  <TD align="center">&nbsp;</TD>
  <TD align=center><B>Cement</B>&nbsp;</TD>
  <TD align="center">&nbsp;</TD>
  <TD align=center><B>Eliminations</B>&nbsp;</TD>
  <TD align="center">&nbsp;</TD>
  <TD align=center><B>Consolidated</B>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
  <TD>&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD align=left><B>Results</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Revenues&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;&nbsp;&nbsp;&nbsp;Domestic sales&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>6,934&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>402&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>223&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(182)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>7,377&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;&nbsp;&nbsp;&nbsp;Export sales&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>850&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>980&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1,830&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Sales taxes.&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(1,734)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(53)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(48)</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(1,835)</TD></TR>
<TR valign="bottom">
        <TD align=left>Discounts, returns and allowances&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(185)</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(185)</TD></TR>
<TR valign="bottom">
        <TD align=left>Cost and operating expenses&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(3,765)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(562)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(194)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(4)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>182&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(4,343)</TD></TR>
<TR valign="bottom">
        <TD align=left>Financial income (expenses), net&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(383)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(11)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>14&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(380)</TD></TR>
<TR valign="bottom">
        <TD align=left>Foreign exchange and monetary loss&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(1,186)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(65)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(14)</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(1,265)</TD></TR>
<TR valign="bottom">
        <TD align=left>Other non-operating income&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>77&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(2)</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>75&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Gain on dilution of interest in subsidiary&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1,667&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1,667&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Income taxes&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(469)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>56&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(1)</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(414)</TD></TR>
<TR valign="bottom">
        <TD align=left>Equity in results of affiliated companies&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>127&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>127&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Net income (loss)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>139&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>2,412&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>107&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(4)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>2,654&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=13>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Other information</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Total assets&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>10,385</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>4,545</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>603</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>176</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>15,709</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Capital expenditures&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>716&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>14&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>40&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>116&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>886&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Investments in affiliated companies&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>2,127&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>461&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>2,588&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Goodwill&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>89&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>32&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>6&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>127&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Depreciation and amortization expenses&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(298)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(38)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(4)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(1)</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(341)</TD></TR>
<TR>
        <TD colspan=13>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Sales by geographic area</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR>
        <TD colspan=13>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Asia&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>20&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>826&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>846&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>North America&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>312&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>312&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Latin America&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>112&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>112&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Europe&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>381&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>148&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>529&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Others&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>25&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>6&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>31&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Export sales&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>850&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>980&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1,830&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Domestic sales&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>6,934&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>402&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>223&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(182)</TD>
        <TD>&nbsp;</TD>
        <TD align=right>7,377&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Total&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>7,784</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>1,382</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>223</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(182)</B></TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>9,207</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE>
<BR>
<P align="justify">
Intersegment sales in 2006 and 2007 occurred from logistics to steel segments. In 2008, US&#36;11 was from logistics to steel and US&#36;171 was from mining to steel segment. </P>
<P align="center">
FS - 55 </P>

<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

<H5 align="left" style="page-break-before:always"></H5>


<A name="page_f60"></A>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <TR>
    <TD width=100%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<P align="justify">
<B>20 Transactions with related parties </B></P>
<P align="justify">
The transactions with related parties, relating primarily to purchases and sales in the ordinary course of business and other intercompany operations, resulted in the following balance sheet and income statement amounts. Purchase trade transactions,
sale of products and raw materials and contracting of services with subsidiaries are performed under usual conditions applicable to non-related parties, such as prices, terms, charges, quality etc.</P>
<P align="justify">
The balances at December 31, 2006, 2007 and 2008 and transactions for the years ended December 31, 2006, 2007 and 2008 with related parties are as follows: </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>2006</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD colspan="5" align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>Expenses</B>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center><b>Assets</b>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>Liabilities</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>(Revenues)</B></TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>MRS Log&iacute;stica&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>50&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>24&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>76&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Ita Energ&eacute;tica&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>2&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>39&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>CFN/Transnordestina&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>79&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(6)</TD></TR>
<TR valign="bottom">
        <TD align=left>CBS &#150; prepaid and accrued pension cost&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>33&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>213&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>62&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Funda&ccedil;&atilde;o CSN&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>2&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Total</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>164</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>237</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>173</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE>
<BR>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD colspan="5" align=right><B>2007</B>&nbsp;</TD>
  </TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD colspan="5" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>Expenses</B>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center><b>Assets</b>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>Liabilities</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>(Revenues)</B></TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>MRS Log&iacute;stica&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>48&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>139&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Ita Energ&eacute;tica&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>2&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>6&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>59&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>CFN/Transnordestina&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>151&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(8)</TD></TR>
<TR valign="bottom">
        <TD align=left>CBS &#150; prepaid pension cost&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>138&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>2&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Funda&ccedil;&atilde;o CSN&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>7&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Total</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>339</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>6</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>199</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE>
<BR>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD colspan="5" align=right><B>2008</B>&nbsp;</TD>
  </TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD colspan="5" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>Expenses</B>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center><b>Assets</b>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>Liabilities</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>(Revenues)</B></TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>MRS Log&iacute;stica&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>1&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>259&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Ita Energ&eacute;tica&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>2&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>5&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>67&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>CFN/Transnordestina&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>3&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(8)</TD></TR>
<TR valign="bottom">
        <TD align=left>Nacional Min&eacute;rios&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>232&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>3,154&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD align=left>NMSA Madeira&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>503&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>CSN Islands VI&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>39&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>CBS &#150; accrued pension cost&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>84&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>61&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Funda&ccedil;&atilde;o CSN&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>2&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left><B>Total</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>779</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>3,244</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>381</B>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE>
<P align="justify">
During 2008, the Company, through one of its subsidiaries, exported US&#36;36 of steel products to its subsidiary Lusosider, in Portugal; these export transactions were made using a third party. These export transactions have been eliminated in our
consolidated financial statements. </P>
<P align="center">
FS - 56 </P>

<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_f61"></A>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <TR>
    <TD width=100%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<P align="justify">
<B>21 Derivatives and financial instruments </B></P>
<P align="justify"><B>21.1 General description and accounting practices </B></P>
<P align="justify">
Although most of the Company&#146;s revenues are denominated in Brazilian <I>reais</I>, as of December 31, 2007 and 2008, US&#36;3,486 and US&#36;4,039, respectively, of the Company&#146;s debt was basically denominated in foreign currencies, which
includes short and long-term debt and accrued finance charges. Accordingly, the Company is exposed to market risk from changes in foreign exchange rates and interest rates. The Company manages risk arising from fluctuations in currency exchange
rates, which affect the amount of Brazilian <I>reais</I> necessary to pay foreign currency denominated obligations, by using derivative financial instruments, primarily cross-currency swaps with financial institutions. </P>
<P align="justify">
While such instruments reduce the Company&#146;s foreign exchange risks, they do not eliminate them. The credit risk exposure is managed by restricting the counterparties on such derivative instruments to major financial institutions with high
credit quality. Therefore, the Company&#146;s management believes that the risk of nonperformance by the counterparties is remote.</P>
<P align="justify">
The Company&#146;s contracts do not meet the accounting criteria to qualify as hedges of an exposure to foreign currency or interest rate risk. Therefore, the Company has accounted for the derivative transactions by calculating the unrealized gain
or loss at each balance sheet date, and changes in the fair value of all derivatives are recorded in current operations.</P>
<P align="justify">
As of December 31, 2008, the consolidated position of outstanding derivative agreements was as follows: </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD width=55%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD colspan="3" align=center><B>Agreement</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center><B>Market value</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD colspan="3" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center><B>Maturity</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>Notional Amount</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
        <TD colspan=7>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Foreign Exchange swaps (contracted by&nbsp;exclusive funds)</TD>
        <TD>&nbsp;</TD>
        <TD align=left>From Jan 2 to&nbsp;<br>
    Dec 11, 2009&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>US&#36;1,530&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>US&#36;127&nbsp;</TD></TR>

<TR>
        <TD colspan=7>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Equity swaps&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Sep 10, 2009&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>US&#36;1,051&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>(US&#36;685)</TD></TR>
<TR>
        <TD colspan=7>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Interest swaps Libor x CDI (registered with CETIP)</TD>
        <TD>&nbsp;</TD>
        <TD align=left>Feb 12, 2009&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>US&#36;150&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center>(US&#36;1)</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=left>&nbsp;</TD></TR>
</TABLE>
<BR>
<P align="center">
FS - 57 </P>

<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_f62"></A>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <TR>
    <TD width=100%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<P>
<B>21.2 Detailed transactions </B></P>
<P align="justify">
<B>a) Foreign exchange swap agreements&#150;U.S. dollars </B></P>
<P align="justify">
The Company entered into cross-currency swap agreements (intended to protect the Company from the effect that a devaluation of the <I>real</I> would have in its liabilities denominated in foreign currency). Basically, the Company swapped its
indebtedness index from the U.S. dollar to the interbank deposit certificate-CDI. The notional amount of these swaps aggregated as of December 31, 2008 was US&#36;1,530 (US&#36;1,360 as of December 31, 2007). The contracts outstanding at December
31, 2006, 2007 and 2008 were as follows: </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD></TD>
        <TD width=2%></TD>
        <TD width=18%></TD>
        <TD width=2%></TD>
        <TD width=18%></TD>
        <TD width=2%></TD>
        <TD width=18%></TD>
        <TD width=2%></TD>
        <TD width=18%></TD></TR>

<TR valign="bottom">
  <TD align=center><B>Issued</B>&nbsp;<B>date</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>Maturity</B><br>      &nbsp;<B>date</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>2006</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>Market <br>
    Value</B>&nbsp;<B>2007</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>2008</B>&nbsp;</TD></TR>
<TR style="font-size:1px">
  <TD align="center" valign="bottom" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align="center" valign="bottom" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align="center" valign="bottom" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align="center" valign="bottom" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align="center" valign="bottom" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD align=center>10/02/06&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>01/02/07&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(6.2)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>12/19/05&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>01/02/07&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(45.3)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>10/02/06&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>01/02/07&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(4.1)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>10/02/06&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>01/02/07&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(2.1)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>10/02/06&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>01/02/07&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(4.1)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>10/02/06&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>01/02/07&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(4.1)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>10/02/06&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>01/02/07&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(2.1)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>10/02/06&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>01/02/07&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(2.1)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>10/02/06&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>01/02/07&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(4.1)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>10/02/06&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>01/02/07&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(2.1)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>10/02/06&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>01/02/07&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(2.1)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>10/02/06&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>01/02/07&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(2.1)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>10/02/06&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>01/02/07&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(2.1)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>10/02/06&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>01/02/07&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(2.1)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>10/02/06&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>01/02/07&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(2.1)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>10/02/06&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>01/02/07&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(2.1)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>10/02/06&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>01/02/07&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(4.1)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>10/02/06&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>01/02/07&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(4.1)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>12/01/06&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>04/02/07&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(1.1)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>12/01/06&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>07/02/07&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(2.1)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>12/01/06&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>07/02/07&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(1.1)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>05/16/07&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>01/02/08&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(58.8)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>05/16/07&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>01/02/08&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(15.2)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>05/16/07&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>01/02/08&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(7.3)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>05/16/07&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>01/02/08&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(7.3)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>05/16/07&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>01/02/08&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(29.4)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>09/03/07&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>01/02/08&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(6.0)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>09/03/07&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>01/02/08&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(5.8)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>09/24/07&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>01/02/08&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(13.1)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>03/18/08&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>03/16/09&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>4.7&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>07/29/08&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>07/24/09&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>18.8&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>07/30/08&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>07/27/09&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>9.4&nbsp;</TD></TR>
  <TR valign="bottom">
    <TD align=center>08/05/08&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>07/31/09&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>6.2&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=center>08/08/08&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>08/03/09&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>2.9&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=center>08/18/08&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>08/13/09&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>28.8&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=center>08/19/08&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>08/14/09&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>27.0&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=center>08/29/08&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>08/24/09&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>14.5&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=center>10/01/08&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>07/24/09&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>18.7&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=center>10/24/08&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>04/20/09&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>0.3&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=center>11/21/08&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>11/16/09&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>(1.5)</TD>
  </TR>
  <TR valign="bottom">
    <TD align=center>11/27/08&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>11/19/09&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>0.6&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=center>11/28/08&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>12/11/09&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>0.1&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=center>12/01/08&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>01/02/09&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>(1.1)</TD>
  </TR>
  <TR valign="bottom">
    <TD align=center>12/03/08&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>12/11/09&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>(0.3)</TD>
  </TR>
  <TR valign="bottom">
    <TD align=center>12/08/08&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>11/30/09&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>(1.7)</TD>
  </TR>
  <TR valign="bottom">
    <TD align=center>12/16/08&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>12/11/09&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>(0.1)</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD align="center">&nbsp;</TD>
    <TD align="center"></TD>
    <TD align="center">&nbsp;</TD>
    <TD align="center"></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="center"></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD align="center"></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>(101.4)</B></TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>(142.9)</B></TD>
    <TD align="center">&nbsp;</TD>
    <TD align=center><B>127.3</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<P align="center">
FS - 58 </P>

<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_f63"></A>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <TR>
    <TD width=100%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<BR>
<P>
<B>b) Equity swap agreements </B></P>
<P>
The contracts outstanding at December 31, 2007 which were settled in September 2008 were as follows: </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD width=15%></TD>
        <TD width=2%></TD>
        <TD width=15%></TD>
        <TD width=2%></TD>
        <TD></TD>
        <TD width=2%></TD>
        <TD width=15%></TD>
        <TD width=2%></TD>
        <TD width=15%></TD>
        <TD width=2%></TD>
        <TD width=15%></TD></TR>

<TR valign="bottom">
        <TD align=center><B>Issued</B>&nbsp;<B>date</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>Maturity date</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>Notional amount</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>Receivable</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>Payable</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>Market value</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>
<TR>
        <TD colspan=11>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>04/07/03&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>09/05/08&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>35.8&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>644.9&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(52.6)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>591.5&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>04/09/03&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>09/05/08&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>5.6&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>100.5&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(8.3)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>92.2&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>04/10/03&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>09/05/08&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>2.0&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>36.1&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(2.9)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>33.2&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>04/11/03&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>09/05/08&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>1.0&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>18.6&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(1.5)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>17.1&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>04/28/03&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>09/05/08&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>1.1&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>17.8&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(1.6)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>16.2&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>04/30/03&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>09/05/08&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>0.1&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>1.3&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(0.1)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>1.2&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>05/14/03&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>09/05/08&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>0.2&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>3.3&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(0.3)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>3.0&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>05/15/03&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>09/05/08&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>0.4&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>7.5&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(0.6)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>6.9&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>05/19/03&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>09/05/08&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>1.0&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>19.0&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(1.5)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>17.5&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>05/20/03&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>09/05/08&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>0.3&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>4.9&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(0.4)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>4.5&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>05/21/03&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>09/05/08&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>0.4&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>8.1&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(0.6)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>7.5&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>05/22/03&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>09/05/08&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>0.3&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>6.4&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(0.5)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>5.9&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>05/28/03&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>09/05/08&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>0.4&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>8.3&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(0.6)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>7.7&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>05/29/03&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>09/05/08&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>0.4&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>7.8&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(0.6)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>7.2&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>06/05/03&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>09/05/08&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>0.1&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>1.8&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(0.1)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>1.7&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD align="center">&nbsp;</TD>
        <TD align="center"></TD>
        <TD align="center">&nbsp;</TD>
        <TD align="center"></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="center"></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="center"></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="center"></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD align=center><B>Total</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>49.1</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>886.3</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>(72.2)</B></TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>813.3</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE>
<BR>
<P align="justify">
These swap agreements are related to 29,684,400 of the Company&#146;s ADRs and are intended to enhance the return of CSN's financial assets by adding exposure to equity securities that historically yield higher long-term returns than fixed income
assets, hence diminishing the impact of the cost of carry of CSN's long-term debt in the net consolidated financial expenses. The maturity of these agreements was on September 5, 2008 and the financial settlement was on September 8, 2008 resulting
in proceeds of US&#36;1,006.</P>
<P align="center">
FS - 59 </P>

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<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <TR>
    <TD width=100%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<P>
On September 5, 2008, the Company entered into a new total return equity swap agreement. The agreement outstanding at December 31, 2008, is as follows:</P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD width=15%></TD>
        <TD width=2%></TD>
        <TD width=15%></TD>
        <TD width=2%></TD>
        <TD></TD>
        <TD width=2%></TD>
        <TD width=15%></TD>
        <TD width=2%></TD>
        <TD width=15%></TD>
        <TD width=2%></TD>
        <TD width=15%></TD></TR>
<TR valign="bottom">
  <TD align=center><B>Issued</B>&nbsp;<B>date</B>&nbsp;</TD>
  <TD align="center">&nbsp;</TD>
  <TD align=center><B>Maturity date</B>&nbsp;</TD>
  <TD align="center">&nbsp;</TD>
  <TD align=center><B>Notional amount</B>&nbsp;</TD>
  <TD align="center">&nbsp;</TD>
  <TD align=center><B>Receivable</B>&nbsp;</TD>
  <TD align="center">&nbsp;</TD>
  <TD align=center><B>Payable</B>&nbsp;</TD>
  <TD align="center">&nbsp;</TD>
  <TD align=center><B>Market value</B>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>
<TR>
        <TD colspan=11>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=center>09/05/08&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>09/10/09&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>1,050.8&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>380.2&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center>(1,065.4)</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center> &nbsp; &nbsp;(685.1)</TD></TR>
</TABLE>
<BR>
<P align="justify">
This swap agreement, which was entered into without cash and having as counterparty Goldman Sachs International, is pegged to 29,684,400 American Depositary Receipts (&#147;ADR&#148;) of Companhia Sider&uacute;rgica Nacional (purchased) and Libor of
3 months + spread of 0.75% p.a. (sold). The gains and losses from this agreement are directly related to foreign exchange fluctuations, the Company&#146;s ADRs and Libor quotation. The fair value of this agreement is recorded in derivative
liabilities in the balance sheet, and the change in fair value is recorded in financial income (expense), net in the statement of income. </P>
<P align="justify">
In addition to the loss of this agreement between September 5 and December 31, 2008, in the amount of US&#36;685, the Company recorded a gain in the previous agreement, throughout 2008, in the amount of US&#36;155, resulting in a net loss of
US&#36;530. </P>
<P align="justify">
The Company is required to maintain a deposit related to the guarantee margin with the counterparty and, at December 31, 2008, this margin totaled US&#36;1,059 and was daily remunerated by the FedFund rate. Due to the temporary restriction as to
withdrawal of this deposit, this amount has not been included as cash and cash equivalents.</P>
<P align="justify">
<B>c) Metals swap agreements </B></P>
<P align="justify">
Throughout 2007, the Company contracted Zinc swaps to set the price of part of its Zinc needs. Up to December 31, 2007, the Company maintained 5,000 tonnes of Zinc with settlement based on average Zinc prices from September to December 2007. The
price used for the settlement of each agreement is the average price of the calendar month prior to the date of its settlement. They are generally agreements in the Brazilian over-the-counter market with first-tier financial institutions as
counterparties. All agreements were settled in January 2008 with a realized gain of US&#36; 35 thousand (R&#36;62 thousand). </P>
<P align="justify">
<B>21.3 Fair value of financial instruments, other than derivatives </B></P>
<P align="justify">
Excluding the financial instruments presented in the table below, the Company considers that the carrying amount of its financial instruments generally approximates fair market value due to the short-term maturity or frequent repricing of these
instruments, and the fact that non-indexed instruments are stated at present value.</P>
<P align="justify">
The financial instruments recorded in the Company&#146;s balance sheets as of December 31, 2007 and 2008, in which fair value differs from the book value, are as follows: </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD width=40%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD colspan=3 align=center><B>Book Value</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD colspan=3 align=center><B>Fair Value</B>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD colspan=3 align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="center"></TD>
        <TD colspan=3 align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center><B>2007</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>2008</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>2007</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>2008</B>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>

<TR valign="bottom">
        <TD align=left>Loans and financing (current portion and long-&nbsp;term)</TD>
        <TD>&nbsp;</TD>
        <TD align=right> &nbsp;4,519&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>4,732&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right> &nbsp;4,592&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>4,627&nbsp;</TD></TR>
</TABLE>
<BR>
<P>
The amounts presented as &#147;fair value&#148; were calculated according to the conditions that were used in local and foreign markets at December 31, 2008, for financial transactions with identical features, such as: volume and term of the
transaction and maturity dates. Mathematical methods are used presuming there is no arbitrage between the markets and
the financial assets. Finally, all the transactions carried out in non-organized markets (over-the-counter market) are contracted with financial institutions previously approved by the Company&#146;s Board of Directors.</P>
<P align="center">
FS - 60 </P>

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<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <TR>
    <TD width=100%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>

  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<P><B>(a) Exchange rate risk</B> </P>
<P>
Although most of the Company&#146;s revenues are in Brazilian <I>reais</I>, as of December 31, 2008, US&#36;4,019 of the Company&#146;s consolidated loans and financing were denominated in foreign currency (US&#36;3,486 as of December 31, 2007). As
a result, the Company is subject to changes in exchange rates and manages the risk of these rate fluctuations to the value in Brazilian <I>reais</I> that will be necessary to pay the liabilities in foreign currency, using derivative financial
instruments, mainly futures contracts, swaps and forward contracts and foreign exchange option agreement, as well as investing of a major part of its cash and funds available in securities remunerated based on U.S. dollar exchange variation.</P>
<P>
 <B>(b) Credit risk </B></P>
<P>
The credit risk exposure with financial instruments is managed through the restriction of counterparties in derivative instruments to large financial institutions with high quality of credit. Thus, management believes that the risk of non-compliance
by the counterparties is not significant. The selection of customers as well as the diversification of its accounts receivable and the control on sales financing terms by business segment are procedures that CSN adopts to minimize occasional
problems with its trade partners. Since part of the Company&#146;s funds available is invested in the Brazilian government bonds, there is exposure to the credit risk with the government.</P>
<P>
<B>22 Fair value measurement </B></P>
<P>
SFAS 157 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities
(Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under SFAS 157 are described below: </P>
<P>
<B>Level 1</B></P>
<P>
Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; </P>
<P>
<B>Level 2 </B></P>
<P>
Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; </P>
<P>
<B>Level 3 </B></P>
<P>
Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). </P>
<P>
The following table sets forth the Company&#146;s financial assets and liabilities measured at fair value by level within the fair value hierarchy. As required by SFAS 157, assets and liabilities are classified in their entirety based on the lowest
level of input that is significant to the fair value measurement. </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD width=40%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD colspan="7" align=right><B>Fair value at December 31, 2008</B>&nbsp;</TD>
  </TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD colspan="7" align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>Level 1</B>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right><B>Level 2</B>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right><B>Level 3</B>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right><B>Total</B>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD align=left><B>Assets</B>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Cash equivalents&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>3,444&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>3,444&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Derivatives&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>127&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>127&nbsp;</TD></TR>

<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>3,571&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>-&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>3,571&nbsp;</TD></TR>
<TR valign="bottom">
  <TD align=left><b>Liabilities</b></TD>
  <TD>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align="right">&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align="right">&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD align="right">&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left>Derivatives</TD>
  <TD>&nbsp;</TD>
  <TD align=right>-&nbsp;</TD>
  <TD align="right">&nbsp;</TD>
  <TD align=right>686&nbsp;</TD>
  <TD align="right">&nbsp;</TD>
  <TD align=right>-&nbsp;</TD>
  <TD align="right">&nbsp;</TD>
  <TD align=right>686&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
  <TD>&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  <TD></TD>
  <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  <TD></TD>
  <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>
</TABLE>
<BR>
<P align="center">
FS - 61 </P>

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<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <TR>
    <TD width=100%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<P align="justify">
The Company&#146;s cash equivalent instruments are classified within Level 2 of the  fair value hierarchy because they are related to essentially to time deposits with maturity of three months and CDB (Bank Certificates of Deposit), with post fixed
interest rates and no penalty in case of withdrawal.</P>
<P align="justify">
Our derivative instruments are comprised of foreign exchange swaps, equity swaps and interest swaps and all are classified within Level 2 of the fair value hierarchy since, even though we may obtain all the variables from official external sources,
fair value measurement needs to be composed using pricing models generally used to value similar instruments. Where possible, the Company verifies the values produced by its pricing models to market prices. Valuation models require a variety of
inputs, including contractual terms, market prices, yield curves, risk-free interest rates, credit spreads, measures of volatility, and correlations of such inputs. Our derivatives trade in liquid markets and, as such, model inputs can generally be
verified and do not involve significant management judgment. Such instruments are classified within Level 2 of the fair value measurement. </P>
<P align="justify">
The Company manages its nonperformance risk by restricting the counterparties to prime and major institutions with high credit quality. Accordingly, the Company believes its nonperformance risk is remote. </P>
<P align="justify">
From the Company&#146;s perspective, as the retail market is the principal market in which the Company transacts its financial instruments, in the case the Company transfers its rights and obligations, it would do with financial institutions in that
market. In that case, the transactions price represent the fair value to the Company at initial recognition, that is, the price that the Company would receive or pay to sell or transfer the financial instruments in transactions with the financial
institutions in the retail market (exit price). For post-measurement purposes, the fair value of the financial instruments is the price that the Company would receive or pay to sell or transfer the financial instruments in transactions with the
financial institutions in the retail market (exit price) dealt at the balance sheet date. </P>
<P>
<B>23 Financial income (expenses), net </B></P>
<P>
The breakdown of the financial results for the years ended December 31, 2006, 2007 and 2008 are represented below: </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
        <TD></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD>
        <TD width=2%></TD>
        <TD width=13%></TD></TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=center><B>2006</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>2007</B>&nbsp;</TD>
        <TD align="center">&nbsp;</TD>
        <TD align=center><B>2008</B>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Derivatives&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(218)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>416&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>125&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Interest Income&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>129&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>79&nbsp;</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>100&nbsp;</TD></TR>
<TR valign="bottom">
        <TD align=left>Interest Expense&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(431)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(680)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(550)</TD></TR>
<TR valign="bottom">
        <TD align=left>Other financial income (expenses), net&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right>(13)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(34)</TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right>(55)</TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD align="right"></TD>
        <TD align="right" style="border-top: 1px solid #000000;">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD align=left>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align=right><B>(533)</B></TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right><B>(219)</B></TD>
        <TD align="right">&nbsp;</TD>
        <TD align=right><B>(380)</B></TD></TR>
<TR valign="bottom" style="font-size: 1px">
        <TD>&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
        <TD></TD>
        <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
</TABLE><BR>
<P align="justify">
Derivatives include contracts not held for trading purposes which upon settlement are presented on a net basis. Management considers the facts and circumstances of these contracts and applies EITF 03-11 &#150; &#147;<I>Reporting Realized Gains and
Losses on Derivative Instruments That Are Subject to FASB Statement No. 133 and Not &#147;Held for Trading Purposes&#148; as Defined in Issue No. 02-3&#148;</I> to determine the basis of presentation for these instruments.</P>
<P align="justify">
<B>24 Insurance coverage </B></P>
<P align="justify">
The Company renewed, for the period from February 21, 2008 to February 21, 2009, and with international reinsurance companies, the All Risks coverage for operational risks for the Presidente Vargas Steelworks, Casa de Pedra Mine, Arcos Mine,
Paran&aacute; Branch, Coal Terminal - Tecar, GalvaSud (property damages and loss of profits), Container Terminal -Tecon
and ERSA Estanho de Rond&ocirc;nia (loss of profits), in the total risk amount of US&#36;9.57 billion (property damages and loss of profit) and maximum indemnification amount, in the event of a claim, of US&#36;750 million (property damages and loss
of profits), equivalent to R&#36;1.3 billion. For the period comprised from February 22, 2009 to February 19, 2010, the Company is negotiating coverage for operational risks with insurance and reinsurance companies in Brazil and abroad.</P>
<P align="center">
FS - 62 </P>

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<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <TR>
    <TD width=100%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<P align="justify">The risk assumptions adopted, given their nature, are not part of the scope of a financial statements audit, and, consequently, they were not examined by our independent auditors.</P>
<P align="justify">
<B>25 Subsequent events</B></P>
<P align="justify"><B>(a) Share repurchase </B></P>
<P align="justify">
At the Board of Directors&#146; Meeting held on January 7, 2009, the reopening of the repurchase program of shares issued by the Company was approved up to the limit of 9,720,000 shares, to be held in treasury and their subsequent sale or
cancellation. The operations authorized by the new repurchase program could have been carried out between January 8 and 28, 2009, but there was no repurchase up to the maturity of the program.</P>
<P align="justify">
On February 2, 2009, the Board of Directors approved the reopening of the repurchase program of shares issued by the Company up to the limit of 9,720,000 shares, to be held in treasury and subsequently sold or cancelled. The operations authorized by
the new repurchase program could have been carried out between February 3 and 25, 2009, but there was no repurchase up to the expiration of the program.</P>
<P align="justify">
<B>(b) Nova Transnordestina Project </B></P>
<P align="justify">
On February 13, 2009, the Company entered into a Financing Agreement with BNDES, for the transfer of funds, in the form of capital, in Transnordestina Log&iacute;stica S.A., with the purpose of enabling investments in the &#147;Nova
Transnordestina&#148; Project, concerning the construction and improvement, within the scope of influence of the Northeast Network, of lines, and line sections and sub-sections in the Eliseu Martins (PI)/Trindande (PE), Salgueiro (PE)/Miss&atilde;o
Velha (CE), Salgueiro (PE)/Trindade (PE) and Salgueiro (PE)/Suape (PE) stretches, as well as the preparation of studies and projects. The credit amount is R&#36;675million. </P>
<P align="justify">
Additionally, the Company acted as the intervening party in the application, by its jointly-controlled subsidiary Transnordestina, for a financing with BNDES, aimed at investments in the construction, within the scope of influence of the Northeast
Network, of lines, and line sections and sub-sections in the Miss&atilde;o Velha (CE) / Salgueiro (PE), Salgueiro (PE) / Trindade (PE) and Eliseu Martins (PI) / Trindade (PE) stretches, also with the purpose of enabling investments in the &#147;Nova
Transnordestina&#148; Project.</P>
<P align="justify">
<B>(c) Prepayment of dividends </B></P>
<P align="justify">
At the Board of Directors&#146; Meeting held on March 24, 2009, the Board of Directors approved the payment of dividends in the amount of R&#36;1.5 billion. </P>
<P align="justify">
<B>(d) Agreement between CSN and Companhia Vale do Rio Doce (&#147;Vale&#148;) </B></P>
<P align="justify">
On April 24, 2009, CSN entered into an agreement with Vale aiming to conclude all pending legal actions between the two companies, including those (i) related to the alleged right to indemnification or compensation deriving from the exclusion of the
&#147;right of first refusal&#148; concerning both the acquisition of surplus iron ore produced by the Casa de Pedra mine and the Casa de Pedra mine itself (&#147;Right to Indemnification&#148;); (ii) arising out of liabilities established in the
contracts comprising transactions related to the so-called unwinding of cross-shareholdings between Vale and CSN carried out in December 2000 (&#147;Liabilities of the Unwinding of Cross-Shareholdings&#148;); and (iii) referring to other pending
issues related to such matters. Pursuant to the agreement, CSN and Vale performed a mutual, full and general non-financial settlement regarding the matters established therein.</P>
<P align="center">
FS - 63 </P>

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<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <TR>
    <TD width=100%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left><B>Companhia Sider&uacute;rgica Nacional and Subsidiaries</B>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Notes to the Consolidated Financial Statements&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Expressed in millions of United States dollars, except share and per share data and unless otherwise stated&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<P>
<B>(e) Annual General Meeting </B></P>
<P align="justify">
At the Annual General Meeting held on April 30, 2009, shareholders approved the Company&#146;s distribution of net income for the year ended December 31, 2008, as follows: </P>
<blockquote><p align="justify"> &#149;  Payment of dividends and interest on shareholders&#146; equity in the amounts of US&#36;738.1 and US&#36;130.4, respectively. Soon after the announcement of the payment of dividends on March 24, 2009, the Company was prevented from
    proceeding with the transfer of approximately US&#36;354.2 to our shareholders by a court order issued by a trial state tax court judge in the State of Rio de Janeiro. For this reason, the Company paid its shareholders on April 2, 2009 the
    approximate amount of US&#36;313.4. We are taking all measures to reverse the court order and proceed with the payment of the remaining dividend amount, as announced; </p>
  <p align="justify"> &#149;  Ratification of declarations of prepayment of dividends approved by the Board of Directors on August 12, 2008 in the amount of US&#36;99 (R&#36;160,000 thousand translated at the exchange rate on August 12, 2008 of US&#36;1.00 to
    R&#36;1.6161), corresponding to US&#36;0.128665 per share, and on March 24, 2009 in the amount of US&#36;642 (R&#36;1,500,000 thousand translated at the exchange rate on December 31, 2008 of US&#36;1.00 to R&#36;2.3370), corresponding to
    US&#36;1.223406 per share; </p>
  <p align="justify"> &#149;  Allocation of the amount of US&#36;99 to the investment reserve, so as to support the investment projects included in the current year's Capital Budget, which is hereby approved, in compliance with the provisions of Article 196 of Law
    6,404/76; </p>
  <p align="justify"> &#149;  Recording of unrealized income reserve created on the non-mandatory dividend in the amount of US&#36;1,067 (R&#36;2,493,493 thousand translated at the exchange rate on December 31, 2008 of US&#36;1.00 to R&#36;2.3370); and </p>
  <p align="justify"> &#149;  Given that the maximum limit of the legal reserve was reached, no amounts will be allocated to this reserve. </p>
  <p align="justify">&nbsp;</p>
  <p align="justify">&nbsp;</p>
</blockquote>
<P align="center">
*   *   * </P>
<P align="center">&nbsp;</P>
<P align="center">&nbsp;</P>
<P align="center">
FS - 64 </P>
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<!DOCTYPE HTML PUBLIC "">


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   <TITLE>Exhibit 1.1</TITLE>
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<BODY style="font-family: 'Times New Roman, Times, Serif'; font-size:11px" bgcolor="#ffffff">



<P align="right"><a href="sidform20f2008a.htm#topexhibit">Table of Contents</a></P>




<A name="page_1"></A>
<P align="center">
<B>COMPANHIA SIDER&Uacute;RGICA NACIONAL</B></P>
<P align="center">
<B>Bylaws </B></P>
<P align="center">
<B>Chapter I </B></P>
<P align="center">
<B>THE DENOMINATION, PURPOSE, HEADQUARTERS AND DURATION </B></P>
<P align="justify">
<B>Art. 1 </B>- Companhia Sider&uacute;rgica Nacional, founded on April 9<SUP>th</SUP>, 1941, and the constitutive acts of which were filed at the Commerce Registration Department under no. 15.910, on May 5<SUP>th</SUP>, 1941, is a legal corporation
of Brazilian private law, organized as an open capital company, hereinafter ruled by these Bylaws, in which it will henceforth be described simply as Company, and by the applicable legal provisions.</P>
<P align="justify">
<B>Art. 2</B> - The Company has as its objective to manufacture, transform, commercialize, including importing and exporting metallurgical products and by-products derived from metallurgical activity, as well as to exploit any other related
activities, affecting directly or indirectly the Company&#146;s purposes, such as: mining, cement and carbochemical industries, manufacturing and assembly of metal structures, construction, transportation, navigation and port activities. </P>
<P align="justify">
Sole Paragraph -  As decided by the Board of Directors, the Company may open and close branches, agencies, offices and establishments of any nature, in Brazil or abroad. </P>
<P align="justify">
<B>Art. 3</B> - The Company headquarters and forum are in the city and judicial district of Rio de Janeiro, State of Rio de Janeiro. </P>
<P>
<B>Art. 4</B> - Company has an indeterminate duration.</P>

<hr size="2" noshade color="#000000" align="center">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_2"></A>

<P align="center">
<B>Chapter II</B> </P>
<P align="center">
CAPITAL STOCK AND SHARES </P>
<P align="justify">
<B>Art. 5 -</B> The Company&#146;s capital stock, totally subscribed and paid in, amounts to R&#36;1,680,947,363.71 (one billion six hundred and eighty million nine hundred and forty-seven thousand three hundred and sixty-three reais and
seventy-one centavos), divided into 793,403,838 (seven hundred ninety-three million, four hundred three thousand, eight hundred thirty-eight) registered common shares with no par value.</P>
<P align="justify">
Sole Paragraph - Each common share shall entitle the holder to 1 (one) vote in Shareholders&#146; Meetings. </P>
<P align="justify">
<B>Art. 6</B> - Unless otherwise decided by the General Assembly, the dividends will be paid within a 60 (sixty) days term, from the date on which they were stated and, in any case, within the same fiscal year.</P>
<P align="justify">
<B>Art. 7</B> - The Company capital may be increased to up 1,200,000,000.00 (one billion two hundred million) shares. </P>
<P align="justify">
Paragraph 1 - The authorized Capital Stock can be reached by means of one or more shares issuance, at the discretion of the Board of Directors. </P>
<P align="justify">
Paragraph 2 - Shareholders will have the preemptive right to the subscription of the new shares issued to carry out the authorized capital, at the extent of their participation in the capital on the date of each issuance. </P>
<P align="justify">
Paragraph 3 - When authorizing a share issuance, partial or in whole of the authorized capital, the Board of Directors will fix the issuance price of such shares, based on legal parameters. </P>
<P align="justify">
<B>Art. 8 </B>- The shares reimbursement value will be the quotient of the economic value division of the Company, investigated through an evaluation in legal terms, by the total number of shares issued by the Company, excluding the shares on the
Treasury. </P>
<P align="center">
<B>Chapter III </B></P>
<P align="center">
<B>THE GENERAL ASSEMBLY </B></P>
<P align="center">
2</P>

<hr size="2" noshade color="#000000" align="center">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_3"></A>

<P align="justify">
<B>Art. 9</B> - The Shareholders General Assembly will normally meet within the first four months after the end of the fiscal year and extraordinarily, whenever necessary, provided that the summon, installation and deliberation procedures comply
with these Bylaws and the effective legislation. </P>
<P>
Single Paragraph - The Chairman will choose the General Assembly secretary. </P>
<P align="center">
<B>Chapter IV </B></P>
<P align="center">
<B>THE MANAGEMENT </B></P>
<P align="center">
<U>Section I</U> </P>
<P align="center">
<B>Of the common standards </B></P>
<P align="justify">
<B>Art. 10 </B> - The Company will be managed by the Board of Directors and the Executive Board, composed of CEOs, each one of them responsible for a specific and defined action area. </P>
<P>
<B>Art. 11</B> - The General Assembly will set the managers remuneration. </P>
<P align="justify">
Paragraph 1 - Remuneration will consist of a fixed monthly portion, which are the fees, and for the directors it may also include a variable portion, to be paid annually, calculated on Company&#146;s net profit, evaluated after the reserves demanded
by law have been constituted, including the payment of the Internal Revenue, and the provision for payment of the mandatory dividends. </P>
<P align="justify">
Paragraph 2 - The General Assembly may set a global budget for the manager compensation, comprising the fixed portion for all and the variable portion for directors, with the Board of Directors thus being responsible for its distribution. </P>
<P align="justify">
<B>Art. 12</B> - The Board of Directors and the Executive Board will reach decisions based on the vote of the majority members present. </P>
<P align="center">
<U>Section II</U> </P>
<P align="center">
<B>BOARD OF DIRECTORS </B></P>
<P align="center">
 3</P>

<hr size="2" noshade color="#000000" align="center">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_4"></A>

<P align="justify">
<B>Art. 13</B> - The Board of Directors is composed from 7 (seven) to 11 (eleven) members, shareholders, elected by the General Assembly, with a mandate term of 1 (one) year, with possibility of reelection, where one of them shall be the President
and the other, Vice President. </P>
<P align="justify">
Paragraph 1 - The president and the vice president of the Council will be chosen by their peers, by majority of votes, in the first meeting to be held after taking office. </P>
<P align="justify">
Paragraph 2 - In the event the Company employees, whether conjoined in an investment club or group or not, do not detain enough shareholding participation to ensure their participation in the Board of Directors, one of the places in this entity will
be reserved for them, being elected the person chosen by the employees for such purpose and in this way indicated for the general assembly to fill it. </P>
<P align="justify">
Paragraph 3 - Company&#146;s CEO, when called to participate in the Board of Directors&#146; meetings, will have the right to speak. </P>
<P align="justify">
<B>Art. 14</B> - The Board of Directors will normally meet on the days planned on the annual calendar approved in the last month of the immediately previous year, and extraordinarily when called by the president or vice-president exercising the
presidency, or by 5 (five) Counselors. The meetings of the Board of Directors will only be held if the majority of its members are present. </P>
<P align="justify">
Paragraph 1 - Minutes for the meetings will be drawn up in a specific book for this purpose. </P>
<P align="justify">
Paragraph 2 - The Board of Directors decisions will be made with the majority of votes from those present. In case of a draw, whoever is presiding the meeting will have, apart from his personal vote, the tie-breaking vote. </P>
<P align="justify">
Paragraph 3 - In the Board of Directors meetings, each member will be replaced, in case they are unable to attend, by another Counselor formally indicated by him, except for the President of the Board of Directors, whose substitution will proceed
under Article 19 of such Bylaws. </P>
<P align="justify">
Paragraph 4 - If a Counselor place is vacant, the substitute will be appointed by the remaining Counselors, and will minister until the first General Assembly. </P>
<P align="justify">
Paragraph 5 - If the Presidency position becomes vacant, the Vice-President will assume it and carry out a general assembly, within a term of 30 (thirty) days from the vacancy to the occupation of the position. </P>
<P align="center">
 4</P>

<hr size="2" noshade color="#000000" align="center">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_5"></A>

<P align="justify">
Paragraph 6 - Each counselor will receive, at least 3 (three) business days in advance, the meeting program and the support documents for the decisions to be discussed.</P>
<P align="justify">
Paragraph 7 - The Board of Directors will have a General Secretary. </P>
<P align="justify">
<B>Art. 15</B> - The Counselors will receive copies of minutes from meetings of the Executive Board and of special committees that may be created by the Board of Directors under the terms of these bylaws. </P>
<P align="justify">
<B>Art. 16</B> - The Board of Directors may create special committees in order to its assistance, with defined purposes and limited activity terms, composed of people designated by them. </P>
<P align="justify">
<B>Art. 17</B> - Besides the tasks entrusted by the law, the Board of Directors shall: </P>
<P align="justify">
   I - approve the general management standards, as well as to set the general guidance of the Company business, establishing the general directives for executive action, including matters related to production, commercialization, technology
transference, use of brands and patents, financial and investment management, as well as to make sure that they are strictly complied;</P>
<P align="justify">
   II - summon the general assembly; </P>
<P align="justify">
   III - elect and dismiss the Executive Board members, point out their responsibilities, designate the CEO in charge of investor relations, who will be the only one competent enough to receive a subpoena and to judicially represent the company; </P>
<P align="justify">
   IV - in case of vacancy on the Executive Board, elect the substitute to conclude the management period of the replaced director. </P>
<P align="justify">
   V - examine Company&#146;s books and papers, request information regarding to interest documents, as well as business or projects in progress or concluded; </P>
<P align="justify">
   VI - comment on the Management report, the Executive Board accounts and the consolidated balances, which must be submitted for its appraisal within two months after the end of the fiscal year; </P>
<P align="justify">
   VII - comment on all the matters that must be submitted to the general assembly; </P>
<P align="justify">
    VIII - approve the names to be indicated by Company to make up the
boards and the Management, consulting, fiscal and deliberative councils of the mercantile or civil societies controlled by Company or joined to it, as well as the associations, foundations and other types of social groupings in which the Company
takes part; </P>
<P align="center">
 5</P>

<hr size="2" noshade color="#000000" align="center">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_6"></A>

<P align="justify">IX - appraise the monthly results of the Company operations;</P>
<P align="justify">
   X - set up the guidelines for the elaboration of an internal auditing plan and confirm it; </P>
<P align="justify">
   XI - select and dismiss Company&#146;s independent auditors; </P>
<P align="justify">
    XII - call the independent auditors so that they can, in a Council meeting, comment on the reports, the board accounts, the property balance and other financial demonstrations prepared by the Executive Board; </P>
<P align="justify">
   XIII - establish policies for use of fiscal incentives; </P>
<P align="justify">
   XIV - deliberate on the transference of the Company resources to third parties, including employees associations, assistant recreational entities, private security funds, foundations and legal entities of public law; </P>
<P align="justify">
    XV - determine the performance of inspections, auditings or accounts takings in foundations and similar entities in which the Company participates; </P>
<P align="justify">
   XVI - approve the annual and multiannual budgets, projects for expansion and investment programs, as well as follow their execution and performance; </P>
<P align="justify">
  XVII - set the authority of the Executive Board for the following acts, independently from authorization by the Board of Directors; </P>
<P align="justify">
a) acquisition, alienation and burden of any property in permanent assets; </P>
<P align="justify">b) entering of any judicial business by the Company, including loans and financings, including with societies directly or indirectly controlled; </P>
<P align="justify">c) constitution of any type
  of guarantee or the burden of any property that is not part of Company&#146;s permanent assets, including in the benefit or in favor of third parties, provided that such third parties are subsidiary legal entities, controlled by or joined to the
  Company; </P>
<P align="justify">
  XVIII - approve the general Management standards and the administrative structure of the Company, and deliberate on human resources policy, including salaries; </P>
<P align="center">
 6</P>

<hr size="2" noshade color="#000000" align="center">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_7"></A>

<P align="justify">XIX - authorize the opening, transference or closure of branches, agencies, offices and establishments of any other type of Company, nationally and abroad; </P>
<P align="justify">
  XX - deliberate on acts that involve transformation, fusion, separation, incorporation or extinction of companies in which Company has participation; </P>
<P align="justify">
XXI - designate and dismiss the person responsible for internal auditing, who must be a legally-qualified employee of the Company, and who will be bond to the Board of Directors presidency; </P>
<P align="justify">
  XXII - designate and dismiss the Board of Directors general secretary and define his role; </P>
<P align="justify">
   XXIII - claim, for examination and setting of criteria, the standards to be observed by the Executive Directors (Arts. 23 e 24) and employees, as well as any matter of social interest that is not included in the General Assembly&#146;s private
sphere.</P>
<P align="justify">
   XXIV - establish the criteria for the control of the Company business performance; </P>
<P align="justify">
XXV - authorize the negotiation, by Company, of shares issued per se; </P>
<P align="justify">
XXVI - set up the terms for conversion, anticipated recovery and other conditions for the placing or not of convertible debentures on shares, when authorized by the General Assembly; </P>
<P align="justify">
XXVII - deliberate on the issuing, by the Company, of commercial papers and other securities destined to primary or secondary distribution in capital markets; </P>
<P align="justify">
XXVIII - deliberate on the increase of Capital Stock, within the limits of authorized capital; </P>
<P align="justify">
   XXIX - create advisory committees under the terms of Art. 16; </P>
<P align="justify">
   XXX - authorize the participation by Company in other companies and deliberate on Company&#146;s representation in their assemblies and member meetings and on matters submitted to these assemblies and meetings; </P>
<P align="justify">
   XXXI - decide on the constitution of companies controlled by Company; </P>
<P align="justify">
  XXXII - establish how the remuneration of Company&#146;s managers will be distributed, if it is globally set by the General Assembly; </P>
<P align="center">
 7</P>

<hr size="2" noshade color="#000000" align="center">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_8"></A>

<P align="justify">
   XXXIII - interpose any decisions by Executive Directors that may have been made against the provisions of these bylaws; </P>
<P align="justify">
XXXIV - resolve the omitted cases and carry out other legal duties which do not conflict with those defined by these Bylaws or by the Law; </P>
<P align="justify">
XXXV - elect and dismiss the members of the Auditing Committee, set their remuneration, determine the Committee duties and approve the operational rules that it may come to establish for its functioning; </P>
<P align="justify">
XXXVI - deliberate on any matters the limits of which go beyond the scope established for the Executive Board, as foreseen in Article 17. </P>
<P align="justify">
<B>Art. 18</B> - The president of the Board of Directors will: </P>
<P align="justify">
  I - call and preside over the meetings of the Board of Directors; </P>
<P align="justify">
  II - install and preside over the general assembly, choosing its secretary. </P>
<P align="justify">
<B>Art. 19 </B>- The Vice-President of the Board of Directors will substitute the president during his absences or temporary inability to attend.</P>
<P align="center">
8</P>

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<A name="page_9"></A>

<P align="center">
<U>Section III</U> </P>
<P align="center">
<B>THE EXECUTIVE BOARD</B></P>
<P align="justify">
<B>Art. 20 </B>- Company will have an Executive Board made up of 2 (two) to 9 (nine) Executive Directors, at the criteria of the Board of Directors, with one of them being the Director-President, and the others Executive Directors with no specific
designation, each with his area of action determined by the Administrative Council. </P>
<P align="justify">
Paragraph 1 - The management term of the Executive Directors is 2 (two) years, with the possibility of reelection; </P>
<P align="justify">
Paragraph 2 - In case of the Director-President&#146;s absence or temporary inability to attend, the Board of Directors will nominate the substitute Director-President, giving him his functions. </P>
<P align="justify">
Paragraph 3 - If the Director-President position is vacated, the Board of Directors will elect the substitute, who will complete the substituted director&#146;s management period (Art. 17, IV). </P>
<P align="justify">
Paragraph 4 - The other Executive Directors will be substituted, in case they are absent or temporarily unable to attend, by another Executive Director, who will be designated by the Director-President. </P>
<P align="justify">
Paragraph 5 - If the Executive Director position is vacant, the Director-President will indicate his provisional substitute among the other Executive Directors, until the Board of Directors elects his definitive substitute for the remaining
management period (Art. 17, IV). </P>
<P align="justify">
<B>Art. 21</B> -  The Executive Board, having observed the directives and deliberations of the Board of Directors and the General Assembly, will have powers of Management and management of business, being able to practice all the acts and carry out
all the operations related to Company&#146;s purpose, observing the scope limits established by the Board of Directors (Article 17, clause XVII) and the other provisions laid out in these bylaws. </P>
<P align="justify">
Paragraph 1 - The Executive Board will designate an Executive Director or attorney-in-fact with specific powers to singularly represent Company in specific acts. </P>
<P align="justify">
Paragraph 2 - The Executive Directors will carry out their roles full-time. </P>
<P align="justify">
<B>Art. 22 </B>- The Executive Board will normally meet once a month, and extraordinarily whenever it is called by the Director-President or by two Executive Directors, being held with the majority of its members. </P>
<P align="justify">
Paragraph 1 - The Executive Board will always reach decisions through the majority of its members present. In the event of a tie, the Board must submit the
matter to the deliberation of the Board of Directors. </P>
<P align="center">
 9</P>

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<A name="page_10"></A>

<P align="justify">Paragraph 2 - The resolutions of the Executive Board will be included in the minutes taken down in a specific book and signed by all those present, with copies being sent to all the members of the Board of Directors. </P>
<P align="justify">
<B>Art. 23</B> - The Director-President will: </P>
<P align="justify">
   I - preside over the meetings of the Executive Board; </P>
<P align="justify">
   II - carry out the executive direction of Company, for this purpose coordinating and supervising the activities of the other Executive Directors, striving to ensure that the deliberations and directives set by the Board of Directors and the
General Assembly are strictly observed; </P>
<P align="justify">
   III - organize, coordinate and supervise the activities of areas directly subordinate to him; </P>
<P align="justify">
   IV - attribute to any of the Executive Directors special activities and tasks, independently from the ordinary ones, <I>ad referendum </I>of the Board of Directors; </P>
<P align="justify">
   V - keep the Board of Directors informed of Company&#146;s activities; </P>
<P align="justify">
   VI - prepare, along with the other Executive Directors, and present to the Board of Directors, a proposal for (i) defining the duties of the other Executive Directors; and (ii) setting criteria for financial value or scope for the acts practiced
by each of the Executive Directors; </P>
<P align="justify">
   VII - prepare, along with the other Executive Directors, the annual report and raise the general property balance; </P>
<P align="justify">
<B>Art. 24</B> - Each Executive Director will, within the scope of the specific area of action which the Board of Directors defined for him; </P>
<P align="justify">
   I - represent the Company, under the terms of Law and of these Bylaws; </P>
<P align="justify">
   II - organize, coordinate and supervise the services in his charge; </P>
<P align="justify">
   III - participate in the Executive Board meetings, participating in the definition of policies to be followed by the Company and reporting the matters from his specific area of supervision and coordinating; </P>
<P align="justify">
   IV - comply with, and make others comply with, the general policy
and orientation of Company business as established by the Board of Directors, with each Executive Director being responsible for his own specific area of activity; </P>
<P align="center">
 10</P>

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<A name="page_11"></A>

<P align="justify"><B>Art. 25</B> - As a general rule, with the exception of the hypotheses contained in the paragraphs of this article, the Company is validly obligated, whenever it is represented by two Executive Directors, or by an Executive Director together with
an Attorney-in-fact or two Attorneys-in-fact, within their respective mandates. </P>
<P align="justify">
Paragraph 1 - The acts for which these Bylaws require prior authorization from the Board of Directors can only be practiced once this condition has been met; </P>
<P align="justify">
Paragraph 2 - The Board of Directors will define the value above which the acts and instruments that bring responsibilities to Company must necessarily be signed by an Executive Director together with an attorney-in-fact with specific
powers; </P>
<P align="justify">
Paragraph 3 - Except for the hypotheses contained in articles 17, III and 21, paragraph 1, Company may also be represented by only one Executive Director or attorney-in-fact with specific powers, when it is a question of issuing and negotiation,
including endorsing and discounting duplicates relative to its sales; sign correspondence that does not create obligations for Company; practice simple administrative routine acts, including those practiced with public institutions in general, state
companies, public companies, mixed economy societies, Commercial Group, Employment Office, National Institute of Social Security, Security Fund for Time of Service and their collecting financial institutions and others of the same nature. </P>
<P align="justify">
<B>Art. 26 </B>- When constituting the attorneys-in-fact, the following rules will be observed: </P>
<P align="justify">
   I - all the powers-of-attorney must be granted by two Executive Directors or by one Executive Director together with an Attorney-in-fact designated by the Board of Directors; </P>
<P align="justify">
   II - except in cases of judicial representation or similar, when it is in the essence of the mandate for it to be exercised up to the end of the question or lawsuit, all the powers-of-attorney will have a defined term, no longer than one year,
and will have limited powers. </P>
<P align="justify">
<B>Art. 27</B> - The acts practiced in nonconformity with the rules established in Articles 25 and 26 of these Bylaws will be void and will not generate responsibilities for the Company. </P>
<P align="center">
<U>Chapter V</U> </P>
<P align="center">
 11</P>

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<A name="page_12"></A>

<P align="center">
<B>THE FISCAL COUNCIL </B></P>
<P align="justify">
<B>Art. 28</B> - Functioning in the fiscal years in which it is installed, upon the shareholders request, the Fiscal Council is made up of 3 (three) effective members and 3 (three) substitutes, elected by the General Assembly, which will set the
remuneration of the effective members. </P>
<P align="justify">
Sole Paragraph - Each period of functioning of the Fiscal Council ends with the first Ordinary General Assembly, carried out after its installation. </P>
<P align="center">
<U>Chapter VI</U> </P>
<P align="center">
<B>THE AUDITING COMMITTEE </B></P>
<P align="justify">
<B>Art. 29 &#150;</B> Company will have an Auditing Committee made up of 3 (three) members, elected by the Board of Directors from among its members, with a management period of 1 (one) year, with the possibility of reelection. </P>
<P align="justify">
Sole Paragraph &#150; The Board of Directors will approve the Office Duty Chart of the Committee, where its functions and duties will be established, which must meet the legal and regulating standards applicable to auditing committees. </P>
<P align="center">
<U>Chapter VII</U> </P>
<P align="center">
<B>THE FISCAL YEAR, BALANCES AND PROFITS </B></P>
<P align="justify">
<B>Art. 30</B> - The fiscal year will close on December 31<SUP>st</SUP> of every year, when financial demonstrations will be elaborated which, after comments from the Board of Directors, will be submitted to the General Assembly, together with the
proposal for the destination of the period&#146;s profit. </P>
<P align="justify">
Paragraph 1 - From the result of the period, before any participation, the accumulated losses and the provision for the tax on income and social contribution on the net profit will be deducted. </P>
<P align="justify">
Paragraph 2 - The period profit must have the following destination; </P>
<P align="center">
 12</P>

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<A name="page_13"></A>

<P align="justify">
I &#150; 5% (five percent) to the formation of a legal reserve fund, until 20% (twenty percent) of the subscribed Capital Stock has been reached; </P>
<P align="justify">
    II &#150; payment of the compulsory dividend (Art. 33); </P>
<P align="justify">
III &#150; the destination of the remaining profit will be decided in a General Assembly, observing the legal prescriptions. </P>
<P align="justify">
<B>Art. 31</B> - The Board of Directors will also: </P>
<P align="justify">
I &#150;determine the raising of balances every six months, three months or shorter periods, observing the legal prescriptions; </P>
<P align="justify">
II &#150; approve the distribution of any additional, intercalated or intermediate dividends, including as a total or partial anticipation of the obligatory dividend of the period in course, observing the legal provisions; </P>
<P align="justify">
III &#150; declare dividends on the profits of the period evaluated on six-monthly balances, accumulated profits or reserves of profits existing in the last annual or six-monthly balance; </P>
<P align="justify">
IV &#150; pay interest on own capital imputing the sum of interest paid or credited to the value of the compulsory dividend (Art. 33), in the terms of article 9, &sect;7&ordm;, of Law no. 9,249, of Decem-ber 26th, 1995. </P>
<P align="justify">
<B>Art</B>. <B>32 </B>- The act of the Board of Directors that decides the advance payment of the compulsory dividend will state if these payments will be compensated, monetarily corrected, with the value of the compulsory dividend of the period
and, once this compensation has been foreseen, the Ordinary General Assembly will determine the payment of the existing compulsory balance, as well as the return to the account of origin of the amount paid in advance.</P>
<P align="justify">
<B>Art. 33</B> - The Company will distribute as a dividend, in each fiscal year, at least 25% (twenty-five percent) of the net worth of the period, under the terms of art. 202, of Law no. 6.404, of December 15<SUP>th</SUP>, 1976. </P>
<P align="justify">
<B>Art. 34</B> - The dividends will be paid on the dates and locations indicated by the Executive Director in charge of investor relations. If these are not claimed within 3 (three) years of the start of payment, they will lapse in favor of Company.</P>
<P align="center">
<U>Chapter VIII</U> </P>
<P align="center">
 13</P>

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<A name="page_14"></A>

<P align="center">
<B>SETTLEMENT </B></P>
<P align="justify">
<B>Art. 35</B> - Company goes into settlement in the cases foreseen by Law, observing the pertinent standards. </P>
<P align="justify">
Sole Paragraph -  The General Assembly that approves the settlement will nominate the settler and the members of the Fiscal Council that must function during the settlement period, setting the respective fees for them. </P>
<P align="center">&nbsp;</P>
<P align="center">&nbsp;</P>
<P align="center">14</P>
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<TYPE>EX-8.1
<SEQUENCE>12
<FILENAME>exhibit81.htm
<DESCRIPTION>EXHIBIT 8.1
<TEXT>
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<HEAD>
   <TITLE>Exhibit 8.1</TITLE>
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<P align="right"><a href="sidform20f2008a.htm#topexhibit">Table of Contents</a></P>
<A name="page_1"></A>

<P>
  <u>List of Subsidiaries </u></P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD width=23%></TD>
	<TD width=2%></TD>
	<TD width=10%></TD>
	<TD width=2%></TD>
	<TD width=10%></TD>
	<TD width=2%></TD>
	<TD width=26%></TD>
	<TD width=2%></TD>
	<TD></TD></TR>
<TR valign="bottom">
	<TD align=center>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD colspan=3 align=center>Direct and Indirect&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=center>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD colspan=3 align=center>Ownership interest&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=center>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD colspan="3" align=center>(%)</TD>
	<TD align="center">&nbsp;</TD>
	<TD>Main activities&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
	<TD align="center">&nbsp;</TD>
	<TD align="center"></TD>
	<TD colspan="3" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD align="center"></TD>
	<TD align="center">&nbsp;</TD>
	<TD align="center"></TD>
	<TD align="center">&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD>Companies&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>2007&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>2008&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>&nbsp;</TD>
	<TD align="center">&nbsp;</TD>
	<TD align=center>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1px">
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD colspan="3" align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	</TR>
<TR>
	<TD colspan=9>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>Full consolidation</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>CSN Energy&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Holding Company&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Luxemburg&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>CSN Export&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Financial operations and trading&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Luxemburg&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>CSN Islands VII&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Financial operations&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Grand Cayman/Cayman Islands&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>CSN Islands VIII&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Financial operations&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Grand Cayman/Cayman Islands&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>CSN Islands IX&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Financial operations&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Grand Cayman/Cayman Islands&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>CSN Islands X&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Financial operations&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Grand Cayman/Cayman Islands&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>CSN Islands XI (1)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Financial operations&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Grand Cayman/Cayman Islands&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>CSN Overseas&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Financial operations and holding company&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Luxemburg&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>CSN Panama&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Financial operations and holding company&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Luxemburg&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>CSN Steel&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Financial operations and holding company&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Luxemburg&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>Sepetiba Tecon&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>99.99&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>99.99&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Maritime port services&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Itagua&iacute;/RJ, Brazil&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>CSN I (2)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>99.99&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>-&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Holding company&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Rio de Janeiro/RJ, Brazil&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>Estanho de Rond&ocirc;nia - ERSA&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>99.99&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>99.99&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Mining&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Ariquemes/RO, Brazil&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Cia. Metalic Nordeste&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>99.99&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>99.99&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Package production&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Maracana&uacute;/CE, Brazil&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>Ind&uacute;stria Nacional de A&ccedil;os Laminados - INAL (2)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>99.99&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>-&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Steel products service center&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Arauc&aacute;ria/PR, Brazil&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>CSN Cimentos&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>99.99&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>99.99&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Cement production&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Volta Redonda/RJ, Brazil&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>Inal Nordeste&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>99.99&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>99.99&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Steel products service center&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Cama&ccedil;ari/BA, Brazil&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>CSN Energia&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Trading of electricity&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Rio de Janeiro/RJ, Brazil&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>Nacional Min&eacute;rios&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>99.99&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>-&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Mining and holding company&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Congonhas/MG, Brazil&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>CSN Aceros&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Holding company&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Panama City/Panama&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>CSN Cayman&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Financial operations and trading&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Malta&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>CSN Iron&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Financial operations&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Panama City/Panama&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>Companhia Siderurgica Nacional LLC&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Steel industry&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Deleware/EUA&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>CSN Holdings Corp&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Holding company&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Deleware/EUA&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>Companhia Siderurgica Nacional Partner LLC&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Holding company&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Deleware/EUA&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Energy I&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Holding company&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Malta&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>Tangua&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Holding company&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Panama City/Panama&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>CSN Madeira&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Financial operations and holding company&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Madeira Island/Portugal&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>Cinnabar&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Financial operations and holding company&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Madeira Island/Portugal&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Hickory&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Financial operations and trading&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Madeira Island/Portugal&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>Lusosider Projectos Sider&uacute;rgicos&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Holding company&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Seixal/Portugal&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Lusosider A&ccedil;os Planos&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>99.94&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>99.94&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Steel industry&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Seixal/Portugal&nbsp;</TD></TR>
</TABLE>
<BR>

<hr size="2" noshade color="#000000" align="center">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_2"></A>

<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD width=23%></TD>
	<TD width=2%></TD>
	<TD width=10%></TD>
	<TD width=2%></TD>
	<TD width=10%></TD>
	<TD width=2%></TD>
	<TD width=26%></TD>
	<TD width=2%></TD>
	<TD></TD></TR>
<TR valign="bottom">
	<TD align=left>CSN Finance&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Financial operations and holding company&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>London/England&nbsp;</TD></TR>

<TR>
	<TD colspan=9>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>CSN Holdings&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Financial operations and holding company&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>London/England&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Cia Metal&uacute;rgica Prada (Prada)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>99.99&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>99.99&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Package production&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>S&atilde;o Paulo/SP, Brazil&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>GalvaSud&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>99.99&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Steel industry&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Rio de Janeiro/RJ, Brazil&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Pelotiza&ccedil;&atilde;o Nacional (1)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>99.99&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>-&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Mining and holding company&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Congonhas/MG, Brazil&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>Minas Pelotiza&ccedil;&atilde;o (1)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>99.99&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>99.99&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Mining and holding company&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Congonhas/MG, Brazil&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>CSN A&ccedil;os Longos (1)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>99.99&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>99.99&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Steel and metal products industry and trading&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Volta Redonda/RJ, Brazil&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>Nacional Siderurgia (1)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>99.99&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>99.99&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Steel industry&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Congonhas/MG, Brazil&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>CSN Gest&atilde;o de Recursos Financeiros (1)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>99.99&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>99.99&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Financial operations and holding company&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>S&atilde;o Paulo/SP, Brazil&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>Congonhas Min&eacute;rios (1)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>99.99&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>99.99&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Mining and holding company&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Congonhas/MG, Brazil&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>CSN Acquisitions (1)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Financial operations and holding company&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>London/England&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>Companhia de Fomento Mineral (1) (2)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>-&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Mining and holding company&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Ouro Preto/MG, Brazil&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>MG Min&eacute;rios (1)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>99.99&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>-&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Mining and holding company&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Congonhas/MG, Brazil&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>Inversiones CSN Espanha S.L. (1)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>-&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Financial operations and holding company&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Madrid/Spain&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>CSN Finance B.V. (Netherlands) (1)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Financial operations and holding company&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Netherlands&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>International Investment Fund - IIF&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Financial operations and holding company&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Belize&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Itamambuca&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>99.93&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>99.93&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Mining and holding company&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Arcos/MG, Brazil&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Arame Corporation&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Dormant company&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Panama City/Panama&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>TdBB&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Dormant company&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Panama City/Panama&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>International Charitable Corporation&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Dormant company&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Panama City/Panama&nbsp;</TD></TR>
<TR>
	<TD colspan=9>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>Not consolidated</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>Nacional Min&eacute;rios&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>-&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>59.99&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Mining and holding company&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Congonhas/MG, Brazil&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Pelotiza&ccedil;&atilde;o Nacional (1)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>-&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>59.99&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Mining and holding company&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Congonhas/MG, Brazil&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>MG Min&eacute;rios (1)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>-&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>59.99&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Mining and holding company&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Congonhas/MG, Brazil&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>NMSA Madeira Lda. (3)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>-&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>60.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Financial operations and trading&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Madeira Island/Portugal&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>Inversiones CSN Espanha S.L. (1)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>-&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>60.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Financial operations and holding company&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Madrid/Spain&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>It&aacute; Energ&eacute;tica&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>48.75&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>48.75&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Electricity Generation&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>S&atilde;o Paulo/SP, Brazil&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left>Transnordestina Log&iacute;stica (4)</TD>
	<TD>&nbsp;</TD>
	<TD align=right>46.88&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>84.50&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Railroad transportation&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Fortaleza/CE, Brazil&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>MRS Log&iacute;stica&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>37.27&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>33.27&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Railroad transportation&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Rio de Janeiro/RJ, Brazil&nbsp;</TD></TR>
<TR>
	<TD colspan=9>&nbsp;</TD></TR>
<TR>
	<TD colspan=9>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><B>Exclusive investment funds consolidated</B>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Mugen &#150; Fundo de Investimento Multimercado&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Investment funds&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Diplic &#150; Fundo de Investimento Multimercado&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>100.00&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Investment funds&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
</TABLE>
<BR>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD width=7%></TD>
	<TD width=2%></TD>
	<TD></TD></TR>
<TR valign="bottom">
	<TD align=left>(1)</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Companies incorporated during 2007.&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>(2)</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Companies merged during 2008.&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>(3)</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Company incorporated during 2008.&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>(4)</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Former Companhia Ferrovi&aacute;ria do Nordeste (CFN).&nbsp;</TD></TR>
</TABLE><br>


<hr size="2" noshade color="#000000" align="center">

</BODY>

</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>13
<FILENAME>exhibit102.htm
<DESCRIPTION>EXHIBIT 10.2
<TEXT>
<!DOCTYPE HTML PUBLIC "">


<html><head><title>Provided by MZ Data Products</title></head>

<BODY style="font-family: 'Times New Roman, Times, Serif'; text-align:justify; font-size:11px" bgcolor="#ffffff">
<P align="right"><a href="sidform20f2008a.htm#topexhibit">Table of Contents</a></P>
<A name="page_1"></A>
<P align="right">
EXECUTION COPY </P>
<P align="center">
SHARE PURCHASE AGREEMENT AND OTHER COVENANTS </P>
<P align="center">
by and among </P>
<P align="center">
COMPANHIA SIDER&Uacute;RGICA NACIONAL, </P>
<P align="center">
as Seller </P>
<P align="center">
BIG JUMP ENERGY PARTICIPA&Ccedil;&Otilde;ES S.A., </P>
<P align="center">
as Buyer </P>
<P align="center">
ITOCHU CORPORATION, </P>
<P align="center">
JFE STEEL CORPORATION, </P>
<P align="center">
NIPPON STEEL CORPORATION, </P>
<P align="center">
SUMITOMO METAL INDUSTRIES, LTD., </P>
<P align="center">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;KOBE STEEL, LTD., </P>
<P align="center">NISSHIN STEEL CO., LTD., and </P>
<P align="center">POSCO </P>
<P align="center">
as Guarantors </P>
<P align="center">
and </P>
<P align="center">
NACIONAL MIN&Eacute;RIOS S.A. </P>
<P align="center">
BRAZIL JAPAN IRON ORE CORPORATION </P>
<P align="center">
as Intervening Parties </P>
<P align="center">
relating to the sale and purchase and subscription of shares of </P>
<P align="center">
NACIONAL MIN&Eacute;RIOS S.A. </P>
<P align="center">
Dated as of October 21<B>, </B>2008. </P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B></P>

<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_2"></A>

<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD width=8%></TD>
	<TD width=2%></TD>
	<TD></TD>
	<TD width=2%></TD>
	<TD width=13%></TD></TR>
<TR valign="bottom">
	<TD colspan="5" align=center>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<U>T</U><U>ABLE OF
    </U><U>C</U><U>ONTENTS</U>&nbsp;</TD>
  </TR>
<TR>
	<TD colspan=5>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right> Page&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR>
	<TD colspan=5>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD colspan=3 align=left>ARTICLE 1 DEFINITIONS AND RULES OF CONSTRUCTION&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>6&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Section&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>1.1&nbsp; Definitions.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>6&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Section&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>1.2&nbsp; Rules of Construction.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>17&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD colspan=3 align=left>ARTICLE 2 PURCHASE AND SALE&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>18&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Section&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>2.1&nbsp; Purchase and Sale of the Company Shares.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>18&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Section&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>2.2&nbsp; Purchase Price of the Acquired Shares&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>18&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Section&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>2.3&nbsp; Adjustment to the Acquired Shares Price.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>18&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD colspan=3 align=left>ARTICLE 3 CAPITAL CONTRIBUTION&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>20&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Section&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>3.1&nbsp; Capital Contribution.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>20&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Section&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>3.2&nbsp; Adjustment to the New Shares Price.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>21&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD colspan=3 align=left>ARTICLE 4 CLOSING&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>22&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Section&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>4.1&nbsp; The Closing.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>22&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Section&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>4.2&nbsp; Closing Obligations.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>23&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD colspan=3 align=left>ARTICLE 5 CONDITIONS TO OBLIGATIONS&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>24&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Section&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>5.1&nbsp; Conditions to Each Party's Obligation.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>24&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD colspan=3 align=left>ARTICLE 6 REPRESENTATIONS AND WARRANTIES&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>27&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Section&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>6.1&nbsp; Representations and Warranties of Seller Relating to Seller and the Shares</TD>
	<TD>&nbsp;</TD>
	<TD align=right>27&nbsp;&nbsp;</TD></TR>

<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Section&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>6.2&nbsp; Representations and Warranties of Buyer.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>36&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Section&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>6.3&nbsp; Representation and Warranties of the Guarantors&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>38&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD colspan=3 align=left>ARTICLE 7 COVENANTS&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>39&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Section&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>7.1&nbsp; Pre-Closing Covenants.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>39&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Section&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>7.2&nbsp; Post-Closing Covenants.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>42&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD colspan=3 align=left>ARTICLE 8 LIMITATIONS&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>43&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Section&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>8.1&nbsp; Limitation of Warranties.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>43&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Section&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>8.2&nbsp; Waiver of Damages.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>43&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Section&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>8.3&nbsp; No Reliance.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>44&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD colspan=3 align=left>ARTICLE 9 INDEMNIFICATION&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>44&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Section&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>9.1&nbsp; Indemnification by Seller.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>44&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Section&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>9.2&nbsp; Indemnification by the Buyer.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>45&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Section&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>9.3&nbsp; Limitations of Liability.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>45&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Section&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>9.4&nbsp; Indemnification Procedure.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>46&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Section&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>9.5&nbsp; Survival and Time Limitation.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>48&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Section&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>9.6&nbsp; Further Indemnity Limitations&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>49&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Section&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>9.7&nbsp; Sole and Exclusive Remedy.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>49&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD colspan=3 align=left>ARTICLE 10 TERMINATION&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>49&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Section&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>10.1&nbsp;Termination.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>49&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Section&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>10.2&nbsp;Effect of Termination.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>50&nbsp;&nbsp;</TD></TR>
</TABLE>
<BR>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B></P>

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<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD></TD>
	<TD width=2%></TD>
	<TD width=13%></TD></TR>
<TR valign="bottom">
	<TD align=left>ARTICLE 11 GUARANTY&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>51&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Section 11.1&nbsp;Guarantors&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>51&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>ARTICLE 12 MISCELLANEOUS&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>51&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Section 12.1&nbsp;Approval by SBDC.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>51&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Section 12.2&nbsp;Governing Law.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>51&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Section 12.3&nbsp;Arbitration.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>52&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Section 12.4&nbsp;Entire Agreement.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>53&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Section 12.5&nbsp;Notices.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>53&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Section 12.6&nbsp;Parties in Interest; Assignment.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>56&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Section 12.7&nbsp;Amendments and Waivers.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>56&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Section 12.8&nbsp;Schedules and Exhibits.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>57&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Section 12.9&nbsp;Agreement for the Parties' Benefit Only; Non-Recourse.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>57&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Section 12.10Severability&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>57&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Section 12.11Conversion of Amounts.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>58&nbsp;&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left> &nbsp; &nbsp; &nbsp;Section 12.12Confidentiality.&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=right>60&nbsp;&nbsp;</TD></TR>
<TR>
	<TD colspan=3>&nbsp;</TD></TR>
<TR>
	<TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><U>E</U><U>XHIBITS</U>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR>
	<TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Exhibit A (Extraordinary General Shareholders Meeting and By-Laws)</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Exhibit B (Off Take Agreements)</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Exhibit C (Basic Operational Agreements)</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Exhibit D (Amendment to Transportation Agreement)</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Exhibit E (Method of Calculation of Estimated Net Debt and Final Net Debt)</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Exhibit F (Method of Calculation of Estimated Working Capital, Final Working&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Capital and Working Capital Reference Amount)</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR>
	<TD colspan=3>&nbsp;</TD></TR>
<TR>
	<TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left><U>S</U><U>CHEDULES</U>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR>
	<TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Schedule&nbsp;1.1(iv) (Shareholders&#8217; Agreement)</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Schedule&nbsp;2.2.1 (Seller&#8217;s Bank Accounts)</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Schedule&nbsp;2.3.2 (Buyer&#8217;s Bank Accounts)</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Schedule&nbsp;3.1.2 (Company&#8217;s Bank Accounts)</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Schedule&nbsp;6.1.6 (Consents)</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Schedule&nbsp;6.1.7 (Actions)</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Schedule&nbsp;6.1.8 (Capitalization of the Company)</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Schedule&nbsp;6.1.9(i) (Compliance with Applicable Law)</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Schedule&nbsp;6.1.9(ii) (Compliance with Applicable Law)</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Schedule&nbsp;6.1.11(i) (Real Estate)</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Schedule&nbsp;6.1.11(ii) (Real Estate)</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Schedule&nbsp;6.1.11(iii) (Real Estate)</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Schedule 6.1.11(iv) (Real Estate)</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Schedule&nbsp;6.1.11(v) (Real Estate)</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
</TABLE>
<BR>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B></P>

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<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD width=70%></TD>
  </TR>
<TR valign="bottom">
	<TD align=left>Schedule&nbsp;6.1.11(vi) (Mining Rights)</TD>
  </TR>
<TR valign="bottom">
	<TD align=left>Schedule&nbsp;6.1.11(x) (Mining Rights and Real Estate)</TD>
  </TR>
<TR valign="bottom">
	<TD align=left>Schedule&nbsp;6.1.11(xi) (Mining Rights and Real Estate)</TD>
  </TR>
<TR valign="bottom">
	<TD align=left>Schedule&nbsp;6.1.12(i) (Contracts)</TD>
  </TR>
<TR valign="bottom">
	<TD align=left>Schedule&nbsp;6.1.12(ii) (Contracts)</TD>
  </TR>
<TR valign="bottom">
	<TD align=left>Schedule&nbsp;6.1.13&nbsp;(Labor Matters)</TD>
  </TR>
<TR valign="bottom">
	<TD align=left>Schedule&nbsp;6.1.14&nbsp;(Subsidiaries)</TD>
  </TR>
<TR valign="bottom">
	<TD align=left>Schedule&nbsp;6.1.15(i) (Permits)</TD>
  </TR>
<TR valign="bottom">
	<TD align=left>Schedule&nbsp;6.1.15(ii) (Permits)</TD>
  </TR>
<TR valign="bottom">
	<TD align=left>Schedule&nbsp;6.1.16 (Environmental Matters)</TD>
  </TR>
<TR valign="bottom">
	<TD align=left>Schedule&nbsp;6.1.17 (Tax Matters)</TD>
  </TR>
<TR valign="bottom">
	<TD align=left>Schedule&nbsp;6.1.19&nbsp;(Insurance)</TD>
  </TR>
<TR valign="bottom">
	<TD align=left>Schedule&nbsp;6.1.23&nbsp;(Undisclosed Liabilities)</TD>
  </TR>
<TR valign="bottom">
	<TD align=left>Schedule&nbsp;6.1.24&nbsp;(Intellectual Property)</TD>
  </TR>
<TR valign="bottom">
	<TD align=left>Schedule&nbsp;11.1 (Guarantors Percentage Ownership of Buyer)</TD>
  </TR>
</TABLE>
<BR>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B></P>

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<P align="center">
SHARE PURCHASE AGREEMENT AND OTHER COVENANTS </P>
<P align="justify">
This Share Purchase Agreement and Other Covenants (this "<U>Agreement</U>"), is made and entered into on October 21, 2008, by and among (A) BIG JUMP ENERGY PARTICIPA&Ccedil;&Otilde;ES S.A., a closely-held corporation (<I>sociedade an&ocirc;nima</I>)
incorporated, organized and existing under the laws of Brazil, having its registered office at Municipality of S&atilde;o Paulo, State of S&atilde;o Paulo, at Rua da Consola&ccedil;&atilde;o, 247, 3<SUP>rd</SUP> Floor, Room 85A, herein represented
pursuant to its by-laws, enrolled with the Federal Taxpayers&#8217; Registry (<I>CNPJ/MF</I>) under N. 09.431.882/0001 -14 ("<U>Buyer</U>"); (B) COMPANHIA SIDER&Uacute;RGICA NACIONAL, a publicly-held corporation (<I>sociedade an&ocirc;nima</I>)
incorporated, organized and existing under the laws of Brazil, having its registered office at the Municipality of Rio de Janeiro, State of Rio de Janeiro, at Rua S&atilde;o Jos&eacute; 20, group 1602 (part), enrolled with the Federal
Taxpayers&#8217; Registry (<I>CNPJ/MF</I>) under N. 33.042.730/0001 -04, herein represented pursuant to its bylaws ("<U>Seller</U>"); (C) (i) ITOCHU CORPORATION, a company incorporated, organized and existing under the Laws of Japan, having its
registered office at 5-1, Kita-Aoyama 2-chome, Minato-ku, Tokyo, Japan, herein represented pursuant to its bylaws ("<U>Itochu</U>"), (ii) JFE STEEL CORPORATION,<B> </B>a company incorporated, organized and existing under the Laws of Japan, having
its registered office at 2-2-3, Uchisaiwai-cho, Chiyoda-ku, Tokyo, Japan, herein represented pursuant to its bylaws ("<U>JFE</U>"), (iii) NIPPON STEEL CORPORATION, a company incorporated, organized and existing under the Laws of Japan, having its
registered office at 6-3, Otemachi 2-chome, Chiyoda-ku, Tokyo 100-8071, Japan, herein represented pursuant to its by-laws ("<U>Nippon</U>"), (iv) SUMITOMO METAL INDUSTRIES, LTD., a company incorporated, organized and existing under the Laws of
Japan, having its registered office at Triton Square Office Tower Y 8-11, Harumi 1-chome, Chuo-ku, Tokyo, 104-6111, Japan, herein represented pursuant to its articles of association ("<U>Sumitomo</U>"), (v) KOBE STEEL, LTD., a company incorporated, organized and existing under the Laws of Japan, having its registered office at 3-chome at 10-26, Wakinohama-cho 2-chome, Chuo-Ku, Kobe, 651-8585, Japan, herein represented pursuant
to its articles of association ("<U>Kobe</U>"), (vi) NISSHIN STEEL CO., LTD., a company incorporated, organized and existing under the Laws of Japan, having its registered office at 4-1, Marunouchi 3-chome, Chiyoda-ku, Tokyo 100-8366, Japan, herein
represented pursuant to its articles of association ("<U>Nisshin</U>") and (vii) POSCO a company incorporated, organized and existing under the Laws of Korea, having its registered office at 892 Daechi 4-dong Gangnam-gu, Seoul, 135-777, Korea,
herein represented pursuant to its by-laws ("<U>Posco</U>" and together with Itochu, JFE, Nippon, Sumitomo, Kobe and Nisshin, the "<U>Guarantors</U>") and (D) as an intervening parties, (i) NACIONAL MIN&Eacute;RIOS S.A., a closely-held corporation
(<I>sociedade an&ocirc;nima</I>) incorporated, organized and existing under the laws of Brazil, herein represented
pursuant to its by-laws (the "<u>Company</u>") and (ii) Brazil Japan Iron Ore Corporation, a corporation duly organized and existing under the laws of Japan, with its head office located at 5-1, Kita-Aoyama 2-chome, Minato-ku, Tokyo 107-8077, Japan,
herein represented pursuant to its by-laws ("<u>Japanese SPC</u>"). Seller and Buyer are referred to herein, individually, as a "<u>Party</u>" and, collectively, as the "<u>Parties</u>". Capitalized terms used in this Agreement and not defined in
context have the definitions set forth in Section 1.1. </P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B></P>

<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

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<P align="center">RECITALS: </P>
<P align="justify">
A. Seller owns  common shares, with no par value, representing 100% of the outstanding capital stock of the Company, including shares transferred to the members of the Board of Directors (<I>conselho de administra&ccedil;&atilde;o</I>) appointed by
Seller (the "<U>Company Shares</U>"), which has its registered office at Logradouro Casa de Pedra, without number, part, Municipality of Congonhas, State of Minas Gerais, enrolled with the Federal Taxpayer's Registry (<I>CNPJ/MF</I>) under N.
08.446.702/0001 -05; and </P>
<P align="justify">
B. Buyer wants to (i) acquire a certain percentage of shares issued by the Company from Seller and (ii) invest in the Company, upon the terms and conditions set forth in this Agreement. In addition, Seller and Buyer desire to enter into other
transactions contemplated in this Agreement. </P>
<P align="justify">
NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties, covenants, agreements and conditions set forth in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by each Party, the Parties agree as follows: </P>
<P align="center">
Article 1 <br>
<U>DEFINITIONS AND RULES OF CONSTRUCTION</U> </P>
<P align="justify">
Section 1.1 <U>Definitions</U>.</P>
<P align="justify">
As used herein, the following terms shall have the following meanings: </P>
<P align="justify">
"<U>Acquired Shares</U>" shall have the meaning ascribed to it in Section 2.1. </P>
<P align="justify">
"<U>Acquired Shares Price</U>" shall have the meaning ascribed to it in Section 2.2.1. </P>
<P align="justify">
"<U>Acquired Shares Adjusted Price</U>" shall have the meaning ascribed to it in Section 2.3.2(a) . </P>
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<P align="justify">
"<U>Action</U>" means any litigation, action, suit, proceeding, condemnation, investigation, judicial or administrative claim, or audit commenced, brought or conducted by or before or with any court or other Governmental Authority, or any
arbitration proceeding. </P>
<P align="justify">
"<U>Agreement</U>" shall have the meaning ascribed to it in the recitals. </P>
<P align="justify">
"<U>Agreement to Closing</U>" shall have the meaning ascribed to it in Section 4.1.1. </P>
<P align="justify">
"<U>Amendment to Transportation Agreement</U>" shall have the meaning ascribed to it in Section 5.1.8. </P>
<P align="justify">
"<U>Applicable Law</U>" means any constitution, statute, law, regulation, rule, ruling, charge, order, writ, injunction, judgment or decree of or by any Governmental Authority applicable to such Person or its business, properties or assets. </P>
<P align="justify">
"<U>Arbitral Tribunal</U>" shall have the meaning ascribed to it in Section 12.3.2. </P>
<P align="justify">
"<U>Argentina</U>" shall have the meaning ascribed to it in Section 5.1.10. </P>
<P align="justify">
"<U>Basic Operational Agreements</U>" shall have the meaning ascribed to it in Section 5.1.7. </P>
<P align="justify">
"<U>Brazil</U>" means the Federative Republic of Brazil. </P>
<P align="justify">
"<U>Business Day</U>" means any day (excluding Saturdays and Sundays) on which commercial banks generally are open for the transactions of normal banking business (i) in the City of S&atilde;o Paulo, Brazil, (ii) in the City of New York, United
States of America, (iii) in the City of Tokyo, Japan and (iv) in the City of Seoul, South Korea. </P>
<P align="justify">
"<U>Buyer</U>" shall have the meaning ascribed to it in the recitals. </P>
<P align="justify">
"<U>Buyer Indemnified Party</U>" shall have the meaning ascribed to it in Section 9.1. </P>
<P align="justify">
"<U>CADE</U>" means Conselho Administrativo de Defesa Econ&ocirc;mica. </P>
<P align="justify">
"<U>CdP Mine</U>" means the Casa de Pedra mine, owned by Seller, located in the Municipality of Congonhas, State of Minas Gerais, related to the DNPM Process N. 043.306/1956, with all its goods, accessories, easements and rights granted by the DNPM
and/or acquired from third parties. </P>
<P align="justify">
"<U>CFM</U>" means Cia. de Fomento Mineral e Participa&ccedil;&otilde;es &#8211; CFM. </P>
<P align="justify">
"<U>Closing</U>" means the closing of the purchase and sale of the Acquired Shares and the subscription and payment of the New Shares under the terms and conditions hereof. </P>
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<P>
"<U>Closing Date</U>" shall have the meaning ascribed to it in Section 4.1.1. </P>
<P>
"<U>Closing Final Statement</U>" shall have the meaning ascribed to it in Section 2.3.1. </P>
<P>"<U>Company</U>" shall have the meaning ascribed to it in the recitals. </P>
<P>"<U>Company Shares</U>" shall have the meaning ascribed to it in the recitals.  </P>
<P>"<U>Confidential Information</U>" shall have the meaning ascribed to it in Section 12.12. </P>
<P>"<U>Contracts</U>" shall have the meaning ascribed to it in Section 6.1.12. </P>
<P>
"<U>Conversion Notice</U>" shall have the meaning ascribed to it in Section 12.11.2(b) . </P>
<P>"<U>Converted Amount</U>" shall have the meaning ascribed to it in Section 12.11.2(b) . </P>
<P>"<U>CSN Espanha</U>" shall have the meaning ascribed to it in Section
  6.1.1. </P>
<P>
"<U>Deductible Amount</U>" means an amount in Reais equivalent to US&#36;[&#149;].<SUP>1</SUP> </P>
<P>"<U>Deposit Notice</U>" shall have the meaning ascribed to it in Section 12.11.2(a) . </P>
<P>"<U>Deposited Amount</U>" shall have the meaning ascribed to it in
  Section 12.11.2(a) . </P>
<P>"<U>Dispute</U>" shall have the meaning ascribed to it in Section 12.3. </P>
<P>
"<U>Dollar</U>" means the currency in full force and effect in the United States of America. </P>
<P align="justify">
"<U>Environment</U>" means any part of the environment or surroundings, including, without limitation, air (including, without limitation, that within buildings or natural or man-made structures, whether above or below ground), water (including,
without limitation, territorial, coastal and inland waters and ground water and drains and sewers) and land (including, without limitation, sediment, sea bed or river bed under any water as described above, surface land and sub-surface land, and any
natural or man-made structures) and wildlife (including, without limitation, plants, animals and other biological resources) and (for the avoidance of doubt) includes any of the above that forms part of a relevant Person's own property. </P>
<P align="justify">
"<U>Environmental Laws</U>" means any Applicable Law, all judicial and administrative orders and determinations, all contractual obligations concerning public health and safety, pollution, protection of the Environment or destruction of natural
resources, including, without limitation, all those relating to the presence, use, production, generation, handling, transportation, treatment, storage, disposal, distribution,
labeling, testing, processing, discharge, release, threatened release, control, or cleanup of any Hazardous Substances or the mitigation of the effects thereon, each as amended or in effect prior to or at the date of Closing. </P>
<P align="justify">
<SUP>____________________<br>
1</SUP> Text marked as [&#149;] denotes CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. </P>
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<P align="justify">"<U>Estimated Equity Value</U>" means US&#36;[&#149;], which represents the enterprise value of the Company, in the amount of US&#36;[&#149;], as agreed by Buyer and Seller, minus the New Shares Price, plus the positive amount, if any, by which the
Estimated Working Capital exceeds the Working Capital Reference Amount, minus the positive amount, if any, by which the Working Capital Reference Amount exceeds the Estimated Working Capital, minus the amount of Estimated Net Debt (whether such
amount is positive or negative). </P>
<P align="justify">
"<U>Estimated Net Debt</U>" means US&#36;[&#149;], calculated using an estimated Closing Date exchange rate of R&#36;2.20/US&#36; 1.00, calculated pursuant to the method described in Exhibit E. </P>
<P align="justify">
"<U>Estimated Working Capital</U>" means US&#36;[&#149;]calculated using an estimated Closing Date exchange rate of R&#36;2.20/US&#36; 1.00, calculated pursuant to the method described in Exhibit F. </P>
<P align="justify">
"<U>Extraordinary General Shareholders Meeting</U>" shall have the meaning ascribed to it in Section 3.1.1. </P>
<P align="justify">
"<U>Final Balance Sheet</U>" shall have the meaning ascribed to it in Section 2.3.1(a) . </P>
<P align="justify">"<U>Final Equity Value</U>" shall have the meaning ascribed to it in Section 2.3.1(d) . </P>
<P align="justify">"<U>Final Notice to Closing</U>" shall have the meaning ascribed to it
in Section 4.1.2. </P>
<P align="justify">"<U>Final Net Debt</U>" shall have the meaning ascribed to it in Section 2.3.1(c) . </P>
<P align="justify">"<U>Final Working Capital</U>" shall have the meaning ascribed to it in Section 2.3.1(b) . </P>
<P align="justify">
"<U>Financial Statements</U>" means (i) the audited consolidated and unconsolidated balance sheets, statements of income, changes in stockholders&#8217; equity and cash flow of the Company as of and for the fiscal years ended on December 31, 2006
and December 31, 2007 and (ii) the unaudited consolidated and unconsolidated balance sheet, statements of income, changes in stockholders&#8217; equity and cash flow of the Company as of and for the quarter ended on September 30, 2008. </P>
<P align="justify">
"<U>Free Lease (</U><I><U>Comodato</U></I><U>) Agreements</U>" means the agreements entered into, on the date hereof, between the Company and Seller, relating to (a) the area in which the new magnetic concentrator for B-IV and B-V Tailing Dams will
be built as per the Iron Ore Supply Contract and Other Covenants (Tailing Dam Rejects) (as defined herein); and (b) the area of approximately 200 m<SUP>2</SUP> to be used by the Company for
administrative activities related to port shipment of iron ore, as per the Port Operating Services Agreement (as defined herein). </P>
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<P>"<U>GAAP</U>" means generally accepted accounting principles applicable in the country for which any particular financial statements of a company are prepared, as in effect as at the time such financial statements are prepared. </P>
<P>
"<U>Governmental Approval</U>" means any consent, approval, order, permit, waiver or authorization for, notice to, or registry, declaration or filing before, any Governmental Authority. </P>
<P>
"<U>Governmental Authority</U>" means any supranational, federal, national, state, municipal, local or similar government, governmental, regulatory, administrative or tax authority, agency or commission or any court, tribunal, or judicial or
arbitral body. </P>
<P>
"<U>Governmental Order</U>" means any preliminary or final order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with, issued or granted by any Governmental Authority. </P>
<P>
"<U>Guarantors</U>" shall have the meaning ascribed to it in the recitals. </P>
<P align="justify">
"<U>Hazardous Substance</U>" means any pollutants, contaminants or chemicals, and any industrial, toxic or otherwise hazardous materials, substances or wastes with respect to which limits, Liabilities or standards of conduct are imposed under any
Environmental Laws, including, without limitation, petroleum and petroleum-related substances, products, by-products and wastes, asbestos, urea formaldehyde and lead-based paint. </P>
<P align="justify">
"<U>High Silica ROM Iron Ore Supply Contract</U>" means the agreement entered into, on the date hereof, among the Company and Seller, as parties, and Buyer, Japanese SPC and Posco, as intervening parties, whereby Seller shall supply, and the Company shall acquire, crude unprocessed iron ore with high silica (SiO<SUB>2</SUB>) content on a run-of-mine (ROM) basis from CdP Mine, in accordance with the terms and conditions provided therein. </P>
<P align="justify">
"<U>ICC Court</U>" shall have the meaning ascribed to it in Section 12.3.2. </P>
<P align="justify">"<U>ICC Rules</U>" shall have the meaning ascribed to it in Section 12.3.1. </P>
<P align="justify">"<U>Indemnified Claim</U>" shall have the meaning ascribed to it in Section 9.4.3.  </P>
<P align="justify">"<U>Indemnified Party</U>" shall have the meaning ascribed to it in Section 9.4.1. </P>
<P align="justify">"<U>Indemnifying Party</U>" shall have the meaning ascribed to it in Section 9.4.1. </P>
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<P>
"<U>Independent Auditors</U>" means KPMG, PricewaterhouseCoopers or any other international independent accounting firm chosen by consent of the Parties. </P>
<P>
"<U>Investment</U>" shall have the meaning ascribed to it in Section 3.1.2. </P>
<P>
"<U>Iron Ore Supply Contract and Other Covenants (Tailing Dam Rejects)</U>" means the agreement entered into, on the date hereof, among the Company and Seller, as parties, and Buyer, Japanese SPC and Posco, as intervening parties, whereby (a) Seller
shall supply, and Company shall acquire, rejects resulting from the iron ore production at tailing dams B-IV and<B> </B>B-V of the<B> </B>CdP Mine and (b) Seller shall grant and Company shall receive on a loan for use basis an area where Company
will set up a concentration plant to process tailing dam rejects, in accordance with the terms and conditions provided therein. </P>
<P>
"<U>Itaminas</U>" means Itaminas Com&eacute;rcio de Min&eacute;rios S.A. </P>
<P>"<U>Itochu</U>" shall have the meaning ascribed to it in the recitals. </P>
<P>"<U>Japanese SPC</U>" shall have the meaning ascribed to it in the recitals. </P>
<P>"<U>JFE</U>" shall have the
  meaning ascribed to it in the recitals. </P>
<P align="justify">
"<U>Knowledge</U>" a Person shall be deemed to have "Knowledge" of a particular fact or other matter if any individual who is currently serving as director (<I>membro do conselho de administra&ccedil;&atilde;o</I>) or officer (<I>diretor</I>) of
such Person (or in any similar capacity) has, or at any time had, actual knowledge of such fact or other matter to the extent that such individual has complied, during all times while exercising its functions, with article 153 of Law N. 6.404/76, as
amended.  With respect to the Company, Knowledge shall include any material facts or matters reflected in any of its minutes of the board of directors (<I>conselho de administra&ccedil;&atilde;o</I>), officers (<I>diretores</I>) or shareholders.</P>
<P align="justify">
"<U>Kobe</U>" shall have the meaning ascribed to it in the recitals. </P>
<P align="justify">
"<U>Liabilities</U>" means any and all debts, losses, liabilities, claims, damages, expenses, fines, costs, royalties, proceedings, deficiencies or obligations (including those arising out of any Action, such as any settlement or compromise thereof
or judgment or award therein), of any nature, whether known or unknown, absolute, accrued, contingent or otherwise and whether due or to become due, and whether or not resulting from third party claims, and any reasonable out-of-pocket costs and
expenses (including reasonable legal counsels', accountants' or other fees and expenses incurred in defending any Action or in investigating any of the same or in asserting any rights hereunder). </P>
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<P>
"<U>Lien</U>" means any lien, pledge, security interest, charge, claim, mortgage, deed of trust, option, warrant, purchase right, lease, options, priority rights, preemptive rights, rights of first refusal, purchase preference rights, commitments,
rights of conversion, rights to exchange, transfer restrictions of any nature, or other agreements or commitments, of any nature, providing for the purchase, issuance, or sale of securities, voting trusts, stockholder agreements, proxies or other
agreements or understandings in effect with respect to any rights attributable to securities, or any other encumbrance whatsoever. </P>
<P>
"<U>Losses</U>" means any and all claims, liabilities, losses, damages, fines, penalties, condemnations and costs and expenses, including reasonable attorneys' fees, court costs and other costs in connection with a Person's defense in any Actions,
administrative proceedings or administrative investigations. </P>
<P>
"<U>Low Silica ROM Iron Ore Supply Contract</U>" means the agreement entered into, on the date hereof, among the Company and Seller, as parties, and Buyer, Japanese SPC and Posco, as intervening parties, whereby Seller shall supply, and the Company shall acquire, crude unprocessed iron ore with low silica (SiO<SUB>2</SUB>) content on a run-of-mine (ROM) basis from CdP Mine, in accordance with the terms and conditions provided therein. </P>
<P>
"<U>Material Adverse Effect</U>" means with respect to the Company, any event, change, circumstance, development, effect or state of facts that is or will be materially adverse to (i) the financial condition, properties, assets, liabilities,
business or results of operations of the Company and its Subsidiaries, taken as a whole or (ii) the ability of the Company to timely perform its material obligations under this Agreement or the Operational Agreements or to consummate the
transactions contemplated hereby or thereby; provided that a series of events collectively resulting in the same adversity shall also be considered "material". </P>
<P>
"<U>Mining Rights</U>" shall have the meaning ascribed to it in Section 6.1.11.</P>
<P>
"<U>MRS</U>" means MRS Log&iacute;stica S.A. </P>
<P>
"<U>MRS Shares Contribution</U>" shall have the meaning ascribed to it in Section 5.1.9. </P>
<P>
"<U>Negative Adjustment Date</U>" shall have the meaning ascribed to it in Section 3.2.1(c) . </P>
<P>
"<U>Negative Difference of Acquired Shares Price</U>" shall have the meaning ascribed to it in Section 2.3.2(c) . </P>
<P>
"<U>Negative Difference of New Shares Price</U>" shall have the meaning ascribed to it in Section 3.2.1(c) . </P>
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<P align="justify">
"<U>Net Debt</U>" means (i) the amount of any debt reflected on a consolidated balance sheet of the Company prepared in accordance with Brazilian GAAP, including, without duplication, (a) all obligations of the Company and its Subsidiaries for money
borrowed; (b) all obligations of the Company and its Subsidiaries evidenced by notes, debentures, bonds or other similar instruments the payment of which the Company or any of its Subsidiaries is responsible or liable as primary obligors; (c) all
payment obligations of the Company and its Subsidiaries issued or assumed for deferred purchase price payments associated with acquisitions, divestitures or other similar transactions; (d) all payment obligations of the Company and its Subsidiaries
under leases required to be capitalized in accordance with Brazilian GAAP; (e) all payment obligations of the Company and its Subsidiaries for the reimbursement of any obligor on any letter of credit, banker&#8217;s acceptance, guarantees or similar
credit, in each case including all accrued but unpaid interest (or interest equivalent) thereon; (f) all unpaid taxes and social charges included in Governmental Authorities refinancing programs; (g) any overdue accounts payable, of any nature, to
related parties and/or third parties; and (h) any other obligation that may be considered as a like-debt transaction (such as those with defined due date, subject to interest and with any type of guarantee), <I>minus</I> (ii) cash and cash
equivalents. </P>
<P>
"<U>New Shares</U>" shall have the meaning ascribed to it in Section 3.1.1. </P>
<P>
"<U>New Shares Price</U>" means the amount in Reais equivalent to US&#36;[&#149;], which represent the aggregate of the advance payment amounts as provided in the (a) High Silica ROM Iron Ore Supply Contract, (b) Low Silica ROM Iron Ore Supply
Contract and (c) Port Operating Services Agreement.</P>
<P>
"<U>New Shares Adjusted Price</U>" shall have the meaning ascribed to it in Section 3.2.1(a) . </P>
<P>
"<U>New York Bank</U>" shall have the meaning ascribed to it in Section 12.11.2(a) . </P>
<P>"<U>Nippon</U>" shall have the meaning ascribed to it in the recitals. </P>
<P>"<U>Nisshin</U>" shall have the meaning ascribed to it in the recitals. </P>
<P>"<U>NMSA Madeira</U>"
  shall have the meaning ascribed to it in Section 5.1.6.</P>
<P> "<U>Nogueira Duarte</U>" means Minera&ccedil;&atilde;o de Mangan&ecirc;s Nogueira Duarte Ltda. </P>
<P>"<U>Off Take Agreements</U>" shall have the meaning ascribed to them in Section 5.1.6.</P>
<P>"<U>Operational Agreements</U>" shall have the meaning ascribed to it in Section 5.1.7. </P>
<P>"<U>Party</U>" shall have the meaning ascribed to it in the recitals. </P>
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<P align="justify">
"<U>Permits</U>" means any authorization, permit, license, concession, consent, resolution, exemption, filing, grant (including water grant), registration or approval required or issued by any Governmental Authority. </P>
<P align="justify">
"<U>Person</U>" means any Governmental Authority or any individual, firm, partnership, corporation, limited liability company, joint venture, trust, unincorporated organization or other entity or organization, whether or not a legal entity. </P>
<P align="justify">
"<U>Port Operating Services Agreement</U>" means the agreement entered into, on the date hereof, among the Company and Seller, as parties, and Buyer, Japanese SPC and Posco, as intervening parties, whereby Seller will provide Company with port
operating services at the Itagua&iacute; Port, in the city of Itagua&iacute;, State of Rio de Janeiro, Brazil, in accordance with the terms provided therein. </P>
<P align="justify">
"<U>Posco</U>" shall have the meaning ascribed to it in the recitals. </P>
<P align="justify">
"<U>Positive Adjustment Date</U>" shall have the meaning ascribed to it in Section 3.2.1(b) . </P>
<P align="justify">
"<U>Positive Difference of Acquired Shares Price</U>" shall have the meaning ascribed to it in Section 2.3.2(b) . </P>
<P align="justify">
"<U>Positive Difference of New Shares Price</U>" shall have the meaning ascribed to it in Section 3.2.1(b) . </P>
<P align="justify">
"<U>Post-Closing Covenants</U>" shall have the meaning ascribed to it in Section 7.2. </P>
<P align="justify">"<U>Pre-Closing Covenants</U>" shall have the meaning ascribed to it in Section 7.1. </P>
<P align="justify">"<U>Provisional Decision</U>" shall have the meaning ascribed to it in Section
  9.3.3. </P>
<P align="justify">"<U>Real</U>" means the currency in full force and effect in Brazil. </P>
<P align="justify">"<U>Real Estate</U>" shall have the meaning ascribed to it in Section 6.1.11. </P>
<P align="justify">
"<U>Records</U>" means any and all of the books, records, contracts, agreements and files of the Company existing on the Closing Date and all increases and additions thereto after the Closing Date, including computer records and electronic copies of
such information, whether maintained by Seller, Buyer, the Company or their respective Subsidiaries. </P>
<P align="justify">
"<U>Relevant Areas</U>" shall have the meaning ascribed to it in Section 7.2.1. </P>
<P align="justify">"<U>Relevant Assets</U>" shall have the meaning ascribed to it in Section 7.2.1. </P>
<P align="justify">"<U>Relevant Communities</U>" shall have the meaning ascribed to it in Section 7.2.1.</P>
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<P align="justify">
"<U>Relevant Permits</U>" shall have the meaning ascribed to it in Section 7.2.1. </P>
<P align="justify">
"<U>Representative</U>" means, with respect to any Person, any officer (<I>diretor</I>), director (<I>membro do conselho de administra&ccedil;&atilde;o</I>), principal, attorney, employee, agent, consultant, accountant or other representative of
such Person.</P>
<P align="justify">
"<U>SBDC</U>" means the Brazilian Antitrust System, the <I>Sistema Brasileiro de Defesa da Concorr&ecirc;ncia</I>. </P>
<P align="justify">
"<U>Seller</U>" shall have the meaning ascribed to it in the recitals. </P>
<P align="justify">
"<U>Seller Indemnified Party</U>" shall have the meaning ascribed to it in Section 9.2. </P>
<P align="justify">
"<U>Shareholders' Agreement</U>" means the agreement to be entered into among each of Buyer, Seller, Japanese SPC, Posco and the Company on the Closing Date, in the exact form of <U>Schedule 1.1(iv)</U>. </P>
<P align="justify">
"<U>Shares</U>" shall have the meaning ascribed to it in the Section 3.1.1. </P>
<P align="justify">
"<U>Sobramil</U>" means Sociedade Brasileira de Minera&ccedil;&atilde;o Ltda. </P>
<P align="justify">
"<U>Subsidiary</U>" shall mean, with respect to any Person, any corporation, limited liability company, partnership, association, or other business entity of which (i) if a corporation, a majority of the total voting power of shares of stock
entitled (without regard to the occurrence of any contingency) to vote in the election of directors (<I>membros do conselho de administra&ccedil;&atilde;o</I>), officers (<I>diretores</I>), managers (<I>gerentes</I>), or trustees thereof is at the
time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof or (ii) if a limited liability company, partnership, association, or other business entity (other than
a corporation), a majority of the partnership or other similar ownership interests thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more Subsidiaries of that Person or a combination thereof and for this
purpose, a Person or Persons own a majority ownership interest in such a business entity (other than a corporation) if such Person or Persons shall be allocated a majority of such business entity&#8217;s gains or losses or shall be or control any
managing director or general partner of such business entity (other than a corporation). The term "Subsidiary" shall include all Subsidiaries of such Subsidiary. For the avoidance of doubt, MRS shall not be deemed a Subsidiary of the Company. </P>
<P align="justify">
"<U>Sumitomo</U>" shall have the meaning ascribed to it in the recitals. </P>
<P align="justify">
"<U>Support Agreement</U>" means the agreement to be entered into, on the date hereof, among Seller, Buyer, JFE, Nippon, Sumitomo, Kobe, Nisshin and Posco, as parties, and the Company and Japanese SPC, as intervening parties, whereby, among other matters, Seller will provide support in relation to the following agreements: Amendment to Transportation Agreement, Port Operating Services Agreement, Off Take Agreements. </P>
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<P align="justify">"<U>Tax Return</U>" means any and all returns, reports, declarations, statements, bills, schedules, claims for refund or written information of or with respect to any Tax which is required to be supplied to any taxing authority, including any
schedule or attachment thereto, and including any amendment thereof. </P>
<P align="justify">
"<U>Taxes</U>" means, pursuant to Applicable Law, (i) any and all taxes, including any interest, penalties or other additions to tax that may become payable in respect thereof, due to any Governmental Authority or on behalf of third parties
(including obligations resulting from acting as a retention agent, intermediary, etc.), whether disputed or not, which taxes shall include, without limiting the generality of the foregoing, all income tax (including income tax required to be
deducted or withheld from or accounted for in respect of any payment), corporation tax, such tax taken to include surtax, capital gains tax, tax on profits, tax on gross receipts, withholding tax, payroll and employee withholding taxes, unemployment
insurance taxes, social security taxes, severance taxes, license charges or taxes, taxes on stock, sales and use taxes, ad valorem taxes, value added tax, custom duties, excise taxes and duties, franchise taxes, business license taxes, occupation
taxes, real and personal property taxes, stamp taxes, environmental taxes, Transfer Taxes, workers' compensation, customs, tariffs, social security and retirement fund contributions, imposts, fees, duties, assessments, withholdings or charges of any
kind (including, for example, ITR, IRPJ, CSL, PIS, COFINS, ISS, CFEM, INSS and FGTS) and other obligations of the same or of a similar nature to any of the foregoing and (ii) any Liability for the payment of any amount of a type described in item
(i) above as a result of any obligations to indemnify or otherwise assume or succeed to the liability for Taxes of any other Person. </P>
<P align="justify">
"<U>Transition Administrative Services Agreement</U>" means the agreement entered into, on the date hereof, among the Company and Seller whereby Seller shall share with the Company its administrative services structure and infrastructure required to
the appropriate conduct of the Company&#8217;s business and operations, in accordance with terms and conditions provided therein. </P>
<P align="justify">
"<U>Vale</U>" means Companhia Vale do Rio Doce. </P>
<P align="justify">
"<U>Vale Lawsuits</U>" shall have the meaning ascribed to it under Section 5.1.12. </P>
<P align="justify">
"<U>Working Capital</U>" means the amount equal to all current assets minus all current liabilities (excluding all transactions, accounts and balances included in the Net Debt calculation) of the Company and its Subsidiaries, determined in
accordance with Brazilian GAAP. </P>
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<P>
"<U>Working Capital Reference Amount</U>" means US&#36;[&#149;]calculated using an estimated Closing Date exchange rate of R&#36;2.20/US&#36; 1.00, calculated pursuant to the method described in Exhibit F. </P>
<P>
Section 1.2 <U>Rules of Construction</U>. </P>
<P>
1.2.1 All article, section, exhibit and schedule references used in this Agreement are to articles, sections, exhibits and schedules to this Agreement unless otherwise specified.  The schedules and exhibits attached to this Agreement constitute a
part of this Agreement and are incorporated herein for all purposes. </P>
<P>
1.2.2 If a term is defined as one part of speech (such as a noun), it shall have a corresponding meaning when used as another part of speech (such as a verb). Terms defined in the singular have the corresponding meanings in the plural, and vice
versa. Unless the context of this Agreement clearly requires otherwise, words importing the masculine gender shall include the feminine and neutral genders and vice versa.  The term "includes" or "including" shall mean "including without
limitation."  The words "hereof," "hereto," "hereby," "herein," "hereunder" and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular section or article in which such words appear.
The phrase "the date of this Agreement," "date hereof" and terms of similar import, unless the context otherwise requires, shall be deemed to refer to the date set forth in the opening paragraph of this Agreement. </P>
<P>
1.2.3 Whenever this Agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified.  Whenever any action must be taken hereunder on or by a day that is not a Business Day, then such action may be
validly taken on or by the next day that is a Business Day. </P>
<P>
1.2.4 Reference to a given agreement, instrument, document or Applicable Law is a reference to that agreement, instrument, document or Applicable Law as modified, amended, supplemented and restated through the date as of which such reference is made
and, as to any Applicable Law, any successor Applicable Law. </P>
<P>
1.2.5 The Parties acknowledge that each Party and its attorney have reviewed this Agreement and that any rule of construction to the effect that any ambiguities are to be resolved against the drafting Party, or any similar rule operating against the
drafter of an agreement, shall not be applicable to the construction or interpretation of this Agreement. </P>
<P>
1.2.6 The captions in this Agreement are for convenience only and shall not be considered a part of or affect the construction or interpretation of any provision of this Agreement. </P>
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1.2.7 All accounting terms used herein and not expressly defined herein shall have the meanings given to them under GAAP. </P>
<P align="center">
Article 2 <br>
<U>P</U><U>URCHASE AND </U><U>S</U><U>ALE</U> </P>
<P align="justify">
Section 2.1 <U>Purchase and Sale of the Company Shares</U>.</P>
<P align="justify">
At the Closing, upon the terms and subject to the conditions set forth herein, Seller shall sell, assign, transfer and convey to Buyer, and Buyer shall purchase and acquire from Seller a number of issued and outstanding
Company Shares, free and clear of any Liens, representing [&#149;]% [&#149;] of its total and voting capital stock (the "<U>Acquired Shares</U>"). </P>
<P align="justify">
Section 2.2 <U>Purchase Price of the Acquired Shares</U>.</P>
<P align="justify">
2.2.1 Subject to the terms and conditions of this Agreement, and in consideration of the purchase and sale set forth herein, at the Closing Date, (i) Buyer shall pay to Seller for the purchase of the Acquired Shares the Estimated Equity Value
calculated on a pro rata basis based on the percentage ownership of the Acquired Shares, representing the total amount in Reais equivalent to US&#36;[&#149;] ("<U>Acquired Shares Price</U>"). Such payment shall be made in immediately available funds to the account or accounts specified by Seller to Buyer in <U>Schedule 2.2.1</U> hereto. </P>
<P align="justify">
2.2.2 The Acquired Shares Price must be settled in Reais in immediately available funds. Accordingly, the amount of Reais that Buyer shall pay in respect thereof shall be calculated pursuant to Section 12.11.2. </P>
<P align="justify">
Section 2.3 <U>Adjustment to the Acquired Shares Price</U>.<B> </B></P>
<P align="justify">
2.3.1 Within 30 (thirty) days after the Closing Date, Buyer and Seller shall cause the Company to prepare and deliver to Buyer and Seller a statement dated the Closing Date certified by the Independent Auditor (the "<U>Closing Final Statement</U>"),
which shall include:</P>
<P align="justify">
(a) a consolidated balance sheet of the Company on the Closing Date prepared in accordance with the Brazilian GAAP, in Reais ("<U>Final Balance Sheet</U>"); </P>
<P align="justify">
(b) a statement based on the Final Balance Sheet setting forth in reasonable detail a calculation of the final Working Capital on the Closing Date, in Reais, calculated pursuant to the method described in Exhibit F ("<U>Final Working
Capital</U>");</P>
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(c) a statement based on the Final Balance Sheet setting forth in reasonable detail a calculation of the aggregate amount of the final Net Debt on the Closing Date, in Reais, calculated pursuant to the method described in Exhibit E ("<U>Final
Net</U> <U>Debt</U>");</P>
<P align="justify">
(d) a statement based on the Final Balance Sheet setting forth in reasonable detail a calculation of the final equity value, which shall consist of the enterprise value of the Company, in the amount of US&#36; [&#149;], as agreed by Buyer and Seller, (i) minus the New Shares Price, (ii) plus the positive amount in Dollars, if any, by which the amount in Dollars equivalent to the Final Working Capital exceeds the Working Capital Reference
Amount, or minus the positive amount in Dollars, if any, by which the Working Capital Reference Amount exceeds the amount in Dollars equivalent to the Final Working Capital, (iii) minus the amount in Dollars equivalent to the Final Net Debt (whether
such amount is positive or negative) ("<U>Final Equity</U> <U>Value</U>"); and </P>
<P align="justify">
(e) For the purposes of item (d) above, the Final Working Capital and the Final Net Debt shall be converted into Dollars by applying the same foreign exchange rate used for the conversion of the Acquired Shares Price, pursuant to Section 2.2.2
above.</P>
<P align="justify">
2.3.2 Upon determination of the Final Equity Value, the following procedures shall be carried out by the Parties:</P>
<P align="justify">
(a) Buyer and Seller shall cause the Company to prepare and deliver on the same date to Buyer and Seller a statement certified by the Independent Auditor based on the Final Equity Value setting forth in reasonable detail the following calculation of
the Acquired Shares adjusted price:  Acquired Shares adjusted price shall be equal to the Acquired Shares Price multiplied by the number resulting from the division of the Final Equity Value by the Estimated Equity Value ("<U>Acquired</U> <U>Shares
Adjusted Price</U>"); </P>
<P align="justify">
(b) in the event that the Acquired Shares Adjusted Price exceeds the Acquired Shares Price ("<U>Positive Difference of Acquired</U> <U>Shares Price</U>"), Buyer shall pay to Seller the total amount in Reais equivalent to the Positive Difference of
Acquired Shares Price, in immediately available funds, to the account or
accounts specified by Seller to Buyer in <u>Schedule 2.2.1</u> hereto, within 10 (ten) Business Days after the receipt by both Parties of the statement set forth in item (a) above; </P>
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<P align="justify">(c) alternatively, in the event that the Acquired Shares Adjusted Price is less than the Acquired Shares Price ("<U>Negative</U> <U>Difference of Acquired Shares Price</U>"), Seller shall return to Buyer the total amount in Reais equivalent to the
Negative Difference of Acquired Shares Price, in immediately available funds, to the account specified by Buyer to Seller in <U>Schedule</U> <U>2.3.2</U> hereto, within 10 (ten) Business Days after the receipt by both Parties of the statement set
forth in item (a) above; and </P>
<P align="justify">
(d) the Positive Difference of Acquired Shares Price or the Negative Difference of Acquired Shares Price, as the case may be, must be settled in Reais and shall be calculated pursuant to Section 12.11.2(d) . </P>
<P align="center">
Article 3 <br>
<U>C</U><U>APITAL </U><U>C</U><U>ONTRIBUTION</U> </P>
<P align="justify">
Section 3.1 <U>Capital Contribution</U>. </P>
<P align="justify">
3.1.1 On the Closing Date, immediately after the purchase of the Acquired Shares by Buyer, Seller and Buyer shall hold an extraordinary general meeting of the shareholders of the Company ("<U>Extraordinary General Shareholders Meeting</U>") and
cause the Company to increase its capital stock, issuing newly common shares representing [&#149;]%  ([&#149;]) of its total and voting capital stock ("<U>New Shares</U>" and together with the Acquired Shares, "<U>Shares</U>"), at a price per share
equivalent to the price per share paid by Buyer for the Acquired Shares. </P>
<P align="justify">
3.1.2 In the Extraordinary General Shareholders Meeting, the Seller shall waive its preemptive rights for subscription of the New Shares and Buyer shall subscribe the New Shares and immediately pay to the Company for the subscription of the New
Shares the total amount in Reais equivalent to US&#36;[&#149;] ("<U>New Shares</U> <U>Price</U>", together with the Acquired Shares Price, the "<U>Investment</U>"). Such payment shall be made in immediately available funds to the account or accounts
specified by the Company to Buyer in <U>Schedule 3.1.2</U> hereto. </P>
<P align="justify">
3.1.3 The New Shares Price must be settled in Reais in immediately available funds. Accordingly, the amount of Reais that Buyer shall pay in respect thereof shall be calculated pursuant to Section 12.11.2. </P>
<P align="justify">
3.1.4 On the Closing Date, Buyer and Seller agree to cause the Company to use [&#149;]% [&#149;] of the net proceeds of the New Shares Price to comply with the
advance payment amounts as provided under the following agreements: (i) the High Silica ROM Iron Ore Supply Contract, (ii) the Low Silica ROM Iron Ore Supply Contract and (iii) the Port Operating Services Agreement. </P>
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<P align="justify">3.1.5 Following the MRS Shares Contribution, the purchase of the Acquired Shares (and applicable adjustments) and the subscription and payment of the New Shares (and applicable adjustments as mentioned below), the Shares shall represent 40% (forty
percent) of the voting and total capital of the Company and the shareholding of the Company shall be as follows: (i) Seller shall hold a number of issued and outstanding common shares of the Company representing 60% (sixty percent) of its voting and
total capital stock (including shares transferred to the members of the Board of Directors appointed by Seller) and (ii) Buyer shall hold a number of issued and outstanding common shares of the Company, representing 40% (forty percent) of its total
and voting capital stock (including shares to be transferred to the members of the Board of Directors to be appointed by Buyer).</P>
<P align="justify">
Section 3.2 <U>Adjustment to the New Shares Price</U>.<B> </B></P>
<P align="justify">
3.2.1 Upon determination of the Final Equity Value, pursuant to Section 2.3.1 above, the following procedures shall be carried out by the Parties:</P>
<P align="justify">
(a) Buyer and Seller shall cause the Company to prepare and deliver on the same date to Buyer and Seller a statement certified by the Independent Auditor based on the Final Equity Value setting forth in reasonable detail the following calculation of
the New Shares adjusted price: the New Shares adjusted price shall be equal to the New Shares Price multiplied by the number resulting from the division of the Final Equity Value by the Estimated Equity Value ("<U>New Shares Adjusted Price</U>");</P>
<P align="justify">
(b) in the event that the New Shares Adjusted Price exceeds the New Shares Price ("<U>Positive Difference of New Shares Price</U>"), the Buyer, shall pay in to the Company the total amount in Reais equivalent to the Positive Difference of New Shares
Price, in immediately available funds, to the account or accounts specified by the Company to Buyer in <U>Schedule 3.1.2</U> hereto, within 10 (ten) Business Days after the receipt by both Parties of the statement set forth in item (a) above
("<U>Positive</U> <U>Adjustment Date</U>"); </P>
<P align="justify">
(c) alternatively, in the event that the New Shares Adjusted Price is less than the New Shares Price ("<U>Negative Difference of New</U> <U>Shares Price</U>"), the Company shall return to Buyer the total amount in Reais equivalent to the Negative
Difference of New Shares Price, in immediately available funds, to the account
specified by Buyer to Seller in <u>Schedule 2.3.2</u> hereto, within 10 (ten) Business Days after the receipt by both Parties of the statement set forth in item (a) above ("Negative Adjustment <u>Date</u>"); and </P>
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<P>(d) the Positive Difference of New Shares Price or the Negative Difference of New Shares Price, as the case may be, must be settled in Reais and shall be calculated pursuant to Section 12.11.2(d) . </P>
<P>
3.2.2 On the Positive Adjustment Date or on the Negative Adjustment Date, as the case may be, Seller and Buyer shall hold an extraordinary general meeting of the shareholders of the Company for the purposes of rectifying the issuance price of the
New Shares and the amount of the capital increase approved in the Extraordinary General Shareholders Meeting in order to reflect the New Shares Adjusted Price. For the avoidance of doubt, the number of New Shares shall not be changed as a result of
the rectification set forth in this Section 3.2.2. </P>
<P align="center">
Article 4 <br>
<U>C</U><U>LOSING</U><B> </B></P>
<P>
Section 4.1 <U>The Closing</U>.</P>
<P align="justify">
4.1.1 The Closing shall be held at the offices of Machado, Meyer, Sendacz e Opice Advogados, at Avenida Brigadeiro Faria Lima, N. 3.144, 11th floor, in the City of S&atilde;o Paulo, State of S&atilde;o Paulo, Brazil, at 11:00 am, on the date that is
10 (ten) Business Days following the date on which both Parties agree in writing with respect to the satisfaction or waiver of all conditions to obligations, as set forth in Article 5 below ("<U>Agreement to Closing</U>"), or at such other date,
time or place(s) as the Parties may otherwise agree in writing ("<U>Closing Date</U>"). In addition to such information, the Agreement to Closing shall also state (i) the current capital stock of the Company, after the MRS Shares Contribution, (ii)
the exact number of the Acquired Shares and New Shares and (iii) the corresponding price per share for the Acquired Shares and New Shares to be paid by Buyer to Seller and the Company, respectively, on the Closing Date. </P>
<P align="justify">
4.1.2 If, upon Agreement to Closing, Buyer is not prepared to make the payment of the Investment, Buyer shall provide notice ("<U>Final Notice to Closing</U>") to Seller up to 2 (two) Business Days prior to expected Closing Date designating other
date for Closing, which shall take place no later than November 28, 2008. Upon the Final Notice to Closing, the condition set forth in Section 5.1.3 herein shall be deemed as automatically waived by Buyer. For the avoidance of doubt, in case Buyer
does not provide the Final Notice to Closing pursuant to this Section 4.1.2, this Section 4.1.2 shall be no longer applicable and Closing shall take place on the
date that is 10 (ten) Business Days after the Agreement to Closing pursuant to Section 4.1.1, whether or not prior to November 28, 2008. </P>
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<P align="justify">Section 4.2 <U>Closing Obligations</U>.</P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At the Closing, the following actions and transactions will be carried out, which actions and transactions shall all be deemed to take place simultaneously and no action or transaction shall be deemed to have been
completed or any document delivered until all such actions and transactions have been completed and all required documents delivered.</P>
<P align="justify">
4.2.1 <U>Buyer's Closing Obligations</U>. At the Closing, Buyer shall deliver (a) Acquired Shares Price to Seller and (b) New Shares Price to the Company, both in immediately available funds to the bank accounts determined by Seller and the Company,
as provided in Sections 2.2.1 and 3.1.2 respectively. </P>
<P align="justify">
4.2.2 <U>Seller's Closing Obligations</U>. At the Closing, Seller:</P>
<P align="justify">
(a) shall transfer to Buyer the Acquired Shares, free and clear of any Lien; and </P>
<P align="justify">
(b) shall deliver or cause to be delivered to Buyer written resignations, effective as of Closing Date, from each of the directors (<I>membros do conselho de administra&ccedil;&atilde;o</I>) and officers (<I>diretores</I>) of the Company and each of
its Subsidiaries, except as otherwise indicated in writing by Buyer prior to Closing. </P>
<P align="justify">
4.2.3 <U>Parties' Closing Obligations</U>. At the Closing, Parties shall: </P>
<P align="justify">
(a) hold the Extraordinary General Shareholders Meeting and take the actions described in the form of the minutes attached hereto as Exhibit A in order to (i) cause the Company to issue the New Shares, (ii) approve the new by-laws of the Company,
which shall also be attached hereto in Exhibit A and (iii) elect new directors (<I>membros do conselho de administra&ccedil;&atilde;o</I>) in accordance with the Shareholders&#8217; Agreement;</P>
<P align="justify">
(b) execute and deliver the Shareholders' Agreement of the Company, which shall be filed at the Company&#8217;s headquarters for the purposes of article 118 of Law N. 6.404/76, as amended, and the Company shall cause the following legend to be
included (in Portuguese) in the relevant pages of the Company&#8217;s Nominative Shares Registry Book (<I>Livro de Registro de A&ccedil;&otilde;es Nominativas</I>): <I>"The shares held by [Name of Shareholder] are subject to the restrictions on
transfer, voting </I><i>arrangements and other provisions set forth in a Shareholders&#8217; Agreement dated [ ]. All transfers of such shares shall be made in accordance with such Shareholders&#8217; Agreement, otherwise shall be null and void</i>"; </P>
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<P align="justify">(c) Seller and Buyer shall execute the Shares Transfer Book (<I>Livro de Transfer&ecirc;ncia de A&ccedil;&otilde;es</I>) of the Company in order to reflect the purchase by Buyer from Seller of Acquired Shares;</P>
<P align="justify">
(d) the Company shall cause the Shares to be annotated in the name of Buyer in the Company&#8217;s Nominative Shares Registry Book; and </P>
<P align="justify">
(e) In accordance with the provisions of Section 14 of Normative Instruction (<I>Instru&ccedil;&atilde;o Normativa</I>) N. 487 issued by the Brazilian Revenue Service (<I>Secretaria da Receita Federal do Brasil</I>) on December 30, 2004, or any
successor regulation thereto, Seller shall deliver to Company the declaration mentioned in such Normative Instruction, relating to any capital gain, if any, that is generated from such sale of the shares issued by Company to Buyer and the amount of
the corporate income taxes due. </P>
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Article 5 <br>
<U>C</U><U>ONDITIONS TO </U><U>O</U><U>BLIGATIONS</U> </P>
<P align="justify">
Section 5.1 <U>Conditions to Each Party's Obligation</U>.</P>
<P align="justify">
The respective obligation of Seller, on one hand, and Buyer, on the other hand, to effect the Closing shall be subject to satisfaction or express waiver in writing of the following conditions by the other Party, on or
prior to the Closing Date: </P>
<P align="justify">
5.1.1 All of Seller&#8217;s and Buyer&#8217;s representations and warranties (considered both collectively and individually) in this Agreement must have been true, correct and complete in all material respects as of the date of this Agreement and
must be true, correct and complete in all material respects on the Closing Date without giving effect to any disclosure obligation as set forth in Section 7.1.5, except to the extent that such representations and warranties are qualified, including
by the terms such as "material" or the expression "Material Adverse Effect", in which case such representations and warranties shall be true, complete and correct in all respects taking into consideration such qualification and without further
qualification as of the date hereof and on the Closing Date; </P>
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5.1.2 All of Seller&#8217;s and Buyer&#8217;s covenants (except for Post-Closing Covenants as set forth in Section 7.2) and obligations (considered both collectively and individually) in this Agreement must have been duly performed and complied with
in all material respects, except to the extent that such covenants are qualified, including by the terms such as "material" or the expression "Material Adverse Effect", in which case such covenants and obligations shall be performed and complied
with in all respects taking into consideration and without further qualification as of the date hereof and of the Closing Date; </P>
<P align="justify">
5.1.3. No Material Adverse Effect must have occurred as a result of one or more events, changes, circumstances, developments, effects or states of facts not otherwise disclosed to Buyer in the Exhibits or in Schedules (on the date hereof); </P>
<P align="justify">
5.1.4. All corporate consents and Governmental Approvals necessary on the Closing Date for the consummation of the transactions as contemplated herein and in the Operational Agreements shall have been duly given or obtained by the relevant Party and
shall be in full force and effect, except for any approvals or consents from SBDC referred to in Section 12.1; </P>
<P align="justify">
5.1.5. Since the date of this Agreement no Governmental Order preventing, restraining or seeking material damages in connection with, the consummation of the transactions contemplated by this Agreement and by the Operational Agreements (including
with respect to authorizations necessary for the implementation of such transactions), nor any Action seeking such an order shall be pending or any Applicable Law enacted, entered or enforced that would prohibit, restrain or make illegal the
consummation of the transactions contemplated by this Agreement or by the Operational Agreements (including authorizations necessary for the implementation of such transactions), provided that Governmental Orders and Actions in connection with the
Vale Lawsuits shall be governed by Section 5.1.12; </P>
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5.1.6. Execution and delivery by NMSA Madeira, Lda. ("<U>NMSA Madeira</U>") or CSN Madeira, Lda., as seller, JFE, Nippon, Sumitono, Kobe, Nisshin or Posco, as buyer, and Seller or the Company, as intervening party and guarantor, of the Contracts for
Sale and Purchase of Iron Ore ("<U>Off Take Agreements</U>"), in the same terms and conditions of the draft attached hereto as Exhibit B;</P>
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5.1.7. Execution and delivery by the Company and Seller of each of the following operational agreements: (i) the High Silica ROM Iron Ore Supply Contract; (ii) the Low Silica ROM Iron Ore Supply Contract; (iii) the Iron Ore Supply Contract and Other
Covenants (Tailing Dam Rejects); (iv) the Port Operating Services Agreement; (v) the Free Lease (<I>Comodato</I>) Agreements; (vi) the Transition Administrative Services Agreements and (viii) the Support Agreement (together, "<U>Basic Operational
Agreements</U>", and together with the Off Take Agreements,
"<u>Operational Agreements</u>"), in terms and conditions in the form of the drafts attached hereto as Exhibit C; </P>
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<P>5.1.8. Execution and delivery by the Company, Seller and MRS of Amendment to the Transportation Agreement dated November16, 2005, as amended, entered into by such parties ("<U>Amendment to Transportation Agreement</U>"), which shall guarantee the
increase of volume of iron ore transported to 40 MMTPA until December/2008 and provide other terms and conditions in the form of the draft attached hereto as Exhibit D; </P>
<P>
5.1.9. Seller shall have contributed to the capital stock of the Company 34,000,000 (thirty-four million) preferred class A non-convertible shares of MRS, representing 10% (ten percent) of MRS total issued and outstanding capital stock, free and
clear of any and all Liens ("<U>MRS Shares Contribution</U>"), at a price per share of MRS corresponding to the value of such shares in the accounting books of Seller, provided that evidence of (i) filing of the respective minutes of the
shareholders&#8217; meeting of the Company approving the MRS Shares Contribution with the applicable board of trade, and (ii) the definitive transfer of the applicable MRS shares from Seller to the Company with the depositary bank (<I>agente
escriturador</I>) of the MRS shares (i.e., statement issued by such depositary bank clearing stating the ownership of MRS Shares by the Company), shall be deemed sufficient evidence of satisfaction of this obligation;</P>
<P>
5.1.10. Seller shall have granted or caused to be granted to Buyer&#8217;s Representatives full access to, and Buyer will have a chance to review, within a period of 15 (fifteen) days counted from October 27, 2008: (i) such Mining Rights (DNPM
processes) related to Cayman Minera&ccedil;&atilde;o do Brasil Ltda.; (ii) all documents reasonably requested by Buyer related to mining easements or rights of way granted on behalf of the Company or otherwise granted by the Company to third
parties, including clarification on how such easements or rights of way relate to the Mining Rights; (iii) information reasonably requested by Buyer on the current standing of the agreement under which the Company acquires iron ore extracted from
the mine held by Argentina de Souza Oliveira (&#8220;<U>Argentina</U>&#8221;); and (iv) information reasonably requested by Buyer on each Mining Right and the corresponding Real Estate, and, to the extent that such information is not available, due
diligence meetings with the Company&#8217;s Representatives whereby further clarification will be provided by the Company in connection therewith, and the review of items (i) to (iv) herein shall have not revealed existing or potential Material
Adverse Effect; </P>
<P>
5.1.11. Buyer shall have had the chance to review, within a period of up to 10 (ten) days from the relevant inclusion (which may be extended for additional 5 (five) days as per Buyer&#8217;s discretion), potential material new issues occurred after
the date hereof and included in the disclosure schedules attached herein pursuant to Section
12.8 and such review processes shall have not revealed existing or potential Material Adverse Effect; and </P>
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<P align="justify">5.1.12. No Material Adverse Effect nor any event that if adversely determined would limit, prevent or otherwise affect negatively the capacity of the Seller to explore the CdP Mine for the purpose of complying with its obligations, and/or to supply
iron ore, under the High Silica ROM Iron Ore Contract, the Low Silica ROM Iron Ore Supply Contract and the Iron Ore Supply Contract and Other Covenants (Tailing Dam) shall have occurred in connection with any of the Vale Lawsuits. For the purpose of
this Agreement, "<U>Vale Lawsuits</U>" shall mean the following lawsuits [&#149;]. </P>
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Article 6 <br>
<U>R</U><U>EPRESENTATIONS AND </U><U>W</U><U>ARRANTIES</U> </P>
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Section 6.1 <U>Representations and Warranties of Seller Relating to Seller and the</U> <U>Shares</U>. </P>
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Except as otherwise disclosed to Buyer in the Schedules, Seller represents and warrants to Buyer as of the date hereof, with applicable updates to Schedules in accordance with Section 12.8, if any, and as of the Closing
Date the following: </P>
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6.1.1 <U>Organization</U>. Each of Seller, the Company and its Subsidiaries is an entity duly incorporated and validly existing under the laws of Brazil, except for Inversiones CSN Espanha, S.L. ("<U>CSN Espanha</U>") and NMSA Madeira which are
entities duly incorporated and validly existing under the laws of the Kingdom of Spain and Madeira Free Trade Zone (Portugal), respectively.</P>
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6.1.2 <U>Qualification of the Company</U>.  The Company and each of its Subsidiaries have the requisite corporate power and authority to carry on their business as now being conducted.</P>
<P align="justify">
6.1.3 <U>Authority</U>.  Seller and the Company have all requisite corporate power and authority to execute and deliver this Agreement and the Operational Agreements and to perform their obligations hereunder. The execution, delivery and performance
of this Agreement and the Operational Agreements and the transactions contemplated hereby and thereby have been duly and validly authorized by all requisite corporate action on the part of Seller and the Company.</P>
<P align="justify">
6.1.4 <U>Enforceability</U>. This Agreement has been duly and validly executed and delivered by Seller and the Company and constitutes a valid and binding agreement of Seller and the Company enforceable against Seller and the Company in accordance
with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws of general application from time to time in effect that affect creditors' rights generally.</P>
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<P align="justify">6.1.5 <U>No Violation or Breach</U>. Neither the execution and delivery of this Agreement nor the consummation of the transactions and performance of the terms and conditions of this Agreement (including the issuance of the New Shares by the
Company) and the Operational Agreements by Seller and/or the Company will (i) result in a violation or breach of or default under any provision of the by-laws of Seller, the Company or any of its Subsidiaries; (ii) will result in a violation or
breach of or default under any provision of any agreement, indenture or other instrument under which Seller, the Company or any of its Subsidiaries is bound, other than such violations, breaches or defaults of agreements, indentures or other
instruments that would not have a Material Adverse Effect or (iii) violate any Applicable Law in relation to Seller and the Company, including Law N. 6.404/76, as amended, and any regulation applicable to publicly held corporations in Brazil.</P>
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6.1.6 <U>Consents</U>.  Except for any approvals or consents from SBDC and except as set forth in <U>Schedule 6.1.6</U>, no filing or registration with, declaration or notification to, or order, authorization, consent or approval of, any
Governmental Authority or any other Person is required in connection with the execution, delivery and performance of this Agreement and the Operational Agreements by Seller, the Company and/or any of its Subsidiaries or the consummation by Seller,
the Company and/or any of its Subsidiaries of the transactions contemplated hereby and thereby.</P>
<P align="justify">
6.1.7 <U>Actions</U>.  Except as set forth on the <U>Schedule 6.1.7</U> of this Agreement, there is no Action pending or, to Seller's Knowledge, threatened against the Seller, the Company and/or any of its Subsidiaries that if adversely determined
would have a Material Adverse Effect or would limit, prevent or otherwise affect negatively the capacity of the Seller to explore the CdP Mine for the purpose to complying with its obligations, and/or to supply the iron ore, under the High Silica
ROM Iron Ore Contract, the Low Silica ROM Iron Ore Supply Contract and the Iron Ore Supply Contract and Other Covenants (Tailing Dam Rights). </P>
<P align="justify">
6.1.8 <U>Capitalization of the Company</U>.  <U>Schedule 6.1.8</U> of this Agreement sets forth the number of outstanding shares of capital stock of the Company prior to and immediately after the MRS Shares Contribution, the names of all holders
thereof and the number and percentage of shares owned by each such holder. All of the outstanding capital stock of the Company held by Seller is owned of record and beneficially by the Seller free and clear of any and all Liens. All of the
outstanding capital stock or other ownership interests of the Company held by Seller have been duly authorized and validly issued. On the Closing Date, provided that the Parties have complied with their obligations under Article IV, the New Shares
will be duly authorized and validly issued, free and clear of any and all Liens. Except for the
Shareholders' Agreement, there are no outstanding or authorized options, warrants, purchase rights, subscription rights, advance for future capital increase (<i>adiantamento para futuro aumento de capital</i>), conversion rights, exchange rights, or
other contracts or commitments that could require Seller or the Company to sell, transfer, or otherwise dispose of any capital stock of the Company or that could require the Company or Seller to cause the Company to issue, sell, or otherwise cause
to become outstanding any of its own capital stock.  Except for the Shareholder's Agreement, there are no voting agreements or understandings with respect to the voting of any capital stock of the Company or any contracts or commitments that could
require Seller or the Company to enter into any voting agreements or understandings with respect to the voting of any capital stock of the Company. The Company does not control directly or indirectly or, except for the equity participation resulting
from the MRS Shares Contribution, own or hold, directly or indirectly, any equity or other ownership interest in any corporation, limited liability company, partnership, joint venture or other entity that is not a Subsidiary. </P>
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<P align="justify">6.1.9 <U>Compliance with Applicable Law</U>.  Except as set forth on <U>Schedule 6.1.9(i)</U>, there is no uncured violation of any Applicable Law by the Company or any of its Subsidiaries that could have a Material Adverse Effect. Since the date of
the most recent Financial Statements, except as shown on <U>Schedule 6.1.9(ii)</U>, neither Seller, the Company nor any of its Subsidiaries has received written notice from any Governmental Authority of any violation of Applicable Law with respect
to Seller, the Company or any of its Subsidiaries that would have a Material Adverse Effect. Seller is not making any representations or warranties in this paragraph with respect to any Environmental Law or any Applicable Law relating to Real
Estate, Mining Rights or Taxes and such matters are addressed otherwise in this Agreement.</P>
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6.1.10 <U>Bankruptcy</U>.  There are no bankruptcy, reorganization or arrangement proceedings pending against or, to Seller's Knowledge, threatened against Seller, the Company and/or any of its Subsidiaries.</P>
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6.1.11 <U>Real Estate; Mining Rights</U>. (i) <U>Schedule 6.1.11(i)</U> identifies all real estate owned, leased, possessed or otherwise occupied by the Company and its Subsidiaries and all contractual rights for rights of way or easement related
thereto (the foregoing property and rights, collectively, the "<U>Real Estate</U>"). (ii) Except as set forth in <U>Schedule 6.1.11(ii)</U>, the Company and its Subsidiaries have good, valid and marketable title to, valid and subsisting leasehold or
acquisition interests in or to, or valid, binding and enforceable rights to, the Real Estate, as the case may be, free and clear of any Liens. (iii) Except as set forth in <U>Schedule 6.1.11(iii)</U>, or as would not have a Material Adverse Effect,
there are no Actions relating to the Real Estate, and other matters affecting adversely the current use, occupancy or value thereof. (iv) Except as set forth in <U>Schedule 6.1.11(iv)</U>, all facilities have received all
Governmental Approvals required in connection with the ownership or operation thereof and have been operated and maintained in accordance with Applicable Law, except for such Government Approvals or non compliances with Applicable Law that would not
have a Material Adverse Effect. (v) Except as set forth in <u>Schedule</u> <u>6.1.11(v)</u>, there are no outstanding options or rights of first refusal to purchase any Real Estate, portions thereof or interest therein.  (vi) The mining rights
owned, leased, possessed, held or otherwise explored by the Company and/or its Subsidiaries are listed and described in <u>Schedule 6.1.11(vi)</u> (the foregoing rights collectively, referred to as the "<u>Mining Rights</u>"). The Company and its
Subsidiaries have, or lease, valid, binding and enforceable rights as to all Mining Rights (in accordance with the terms of the applicable Mining Right) and the Mining Rights have not been sold, transferred, alienated, leased or encumbered, as
applicable, or in any other manner has the right to use and enjoy ownership or possession of the Mining Rights been restricted, transferred or surrendered since the initial award thereof, and the Company's and its Subsidiaries&#8217; title to all
the Mining Rights is free and clear of any Liens, except for Liens set forth on Schedule 6.1.11(vi) . (vii) Each Mining Right (1) was duly granted by the appropriate granting Governmental Authority, (2) is fully and unconditionally vested in the
Company or in any of its Subsidiaries, except for the conditions set forth in <u>Schedule 6.1.11 (vi)</u> and those restrictions set forth by the applicable Mining Right, (3) is in full force and effect, (4) does not have any material irregularity,
and (5) is not subject to any pending or, to the Knowledge of Seller, threatened Action that, if adversely determined, would have a Material Adverse Effect. (viii) All Mining Rights are legal, valid and in effect in accordance with their respective
terms and the Company and its Subsidiaries have timely and fully performed and satisfied in all respects all duties, obligations, charges and requirements of any type or nature which, as holders of the Mining Rights, are imposed upon them by any
Applicable Law or under the Mining Rights, except for such duties, obligations, charges and requirements that would not have a Material Adverse Effect.  Neither the Seller, the Company nor any of its Subsidiaries has done or failed to do any act, or
by omission or commission created any cause or grounds, which might result in the termination, resolution, rescission, setting aside or avoidance of any of the Mining Rights.  (ix) All procedures of Applicable Law related to mining matters and the
award of Mining Rights, have been fully and faithfully complied with in all material respects by the Company and/or its Subsidiaries in respect of the Mining Rights.  No objection, petition to rescind, avoid or terminate or other complaint of any
kind or nature, public or private, has been made, filed or, to the Seller&#8217;s Knowledge, threatened in respect of the award or maintenance of any of the Mining Rights.  (x) Except for <u>Schedule</u> <u>6.1.11(x)</u>, in respect of each Mining
Right and each parcel of the Real Estate, the Company and/or its Subsidiaries has paid all fees, duties, royalties and other payments, obligations or burdens that relate thereto and all such payments, obligations and burdens have been timely made or
discharged, and all other requirements of Applicable Law or as set forth in the Mining Rights have been fully
and faithfully complied with in all material respects, and neither the Company nor any of its Subsidiaries is in breach thereof.  (xi) Except as set forth in <u>Schedule</u> <u>6.1.11(xi)</u>, (1) the Mining Rights and Real Estate are all the mining
rights and real estate required to construct and operate the business of the Company and of its Subsidiaries as contemplated in the Long-Term Business Plan of the Company pursuant to Exhibit 1.1 of the Shareholders&#8217; Agreement, except for the
real estate guaranteed by Seller under Section 7.2.1 herein, (2) the Company and its Subsidiaries have possession of an exclusive right to use and enjoy all Mining Rights in accordance with their respective terms, which enable them to own, possess
and exploit their businesses as contemplated in the Long-Term Business Plan of the Company pursuant to Exhibit 1.1 of the Shareholders&#8217; Agreement and (3) to Seller's Knowledge and the Company's Knowledge, there are no restrictions thereon that
would adversely affect the rights of the Company or of any of its Subsidiaries to exploit the deposits covered by the Mining Rights.  Except for Sections 6.1.15 (Permits), 6.1.23 (Undisclosed Liabilities) and 6.1.27 (Disclosure), notwithstanding any
other provision of this Agreement to the contrary, this paragraph contains the sole and exclusive representations and warranties of Seller with regard to Real Estate and Mining Rights matters. </P>
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<P align="justify">6.1.12 <U>Contracts</U>.  <U>Schedule 6.1.12(i)</U> lists all leases, agreements, notes, indentures, arrangements, contracts and other contractual rights and obligations (collectively, "<U>Contracts</U>") to which the Company and/or any of its
Subsidiaries is a party or by which the Company and/or any of its Subsidiaries is bound. Except as set forth on <U>Schedule 6.1.12(ii)</U> and except as would not have a Material Adverse Effect, neither the Company nor any of its Subsidiaries is in
breach of or in default under, and no event has occurred and/or is continuing that would constitute a default by the Company or any of its Subsidiaries under any provision of any Contract, and neither the Company nor any of its Subsidiaries has
received written notice from any other party to any Contract that the Company or any of its Subsidiaries is in breach of such Contract, which breach has not been remedied, and, to Seller's Knowledge, no such other party is in breach of or default
under any material provision of any such Contract.</P>
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6.1.13 <U>Labor Matters</U>. Except as set forth on <U>Schedule 6.1.13</U>, there are no pending or, to Seller's Knowledge, threatened strikes, work stoppages, slowdowns or lockouts against the Company or any of its Subsidiaries and no pending
unfair labor practice charges, grievances or claims filed or, to Seller's Knowledge, threatened to be filed with any Governmental Authority based on the employment or termination by the Company or any of its Subsidiaries of any individual or group
of individuals which would have a Material Adverse Effect. </P>
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6.1.14 <U>Subsidiaries</U>. <U>Schedule </U><U>6.1.14</U> of this Agreement lists all Subsidiaries of the Company and sets forth the number of outstanding shares of capital stock of each of the Subsidiaries, the names of all holders thereof and the
number and
percentage of shares owned by each such holder.  All of the outstanding capital stock of each of the Subsidiaries is held by the Company and is owned of record and beneficially by the Company free and clear of any and all Liens.  All of the
outstanding capital stock or other ownership interests of each of the Subsidiaries held by the Company have been duly authorized and validly issued. There are no outstanding or authorized options, warrants, purchase rights, subscription rights,
conversion rights, exchange rights, or other contracts or commitments that could require any of the Company or any of the Subsidiaries to sell, transfer, or otherwise dispose of any capital stock of any of the Subsidiaries or that could require any
Subsidiary or the Company to cause any Subsidiary to issue, sell, or otherwise cause to become outstanding any of its own capital stock. There are no voting agreements or understandings with respect to the voting of any capital stock of any
Subsidiary. None of the Subsidiaries controls directly or indirectly or has any direct or indirect equity participation in any corporation, partnership, trust, or other business association that is not a Subsidiary. NMSA Madeira is duly registered
with the tax and any other competent authority in Madeira Free Trade Zone (Portugal). CSN Espanha is not under a cause of dissolution pursuant to section 104 of the Private Limited Companies Act (<i>Ley 2/1995, de 23 de marzo, de Sociedades de
Responsabilidad Limitada</i>) and it is not incorporated under the form of an <i>Entidad de Tenencia de Valores Extranjeros</i> &#8211; ETVE. All exports directly made since May 7, 2008 to NMSA Madeira have been made in compliance with all Brazilian
transfer pricing regulations and all customs regulations in Brazil. </P>
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<P align="justify">6.1.15 <U>Permits</U>. Except as set forth on <U>Schedule 6.1.15(i)</U>, the Company and its Subsidiaries have all Permits required to conduct their businesses as currently conducted (including all Permits required under Environmental Law (Section
6.1.16) and relating to Tax Matters (Section 6.1.17), Mining Rights and Real Estate (Section 6.1.11)) and, to the Seller&#8217;s Knowledge, there is no reason for the Company not being able to obtain any Permits in connection with the Long-Term
Business Plan of the Company pursuant to Exhibit 1.1 of the Shareholders&#8217; Agreement, except for such permits which the failure to have would not have a Material Adverse Effect. Except as set forth on <U>Schedule 6.1.15(ii)</U>, to Seller's
Knowledge, each such Permit is in full force and effect and the Company and its Subsidiaries are in compliance with all of their obligations with respect thereto, except for such failure to be in full force and effect or non-compliance that would
not have a Material Adverse Effect.  To Seller's Knowledge, there are no proceedings pending or threatened which might reasonably be expected to result in the revocation or termination of any material Permit of the Company or any of its
Subsidiaries. Except for Sections 6.1.23 (Undisclosed Liabilities) and 6.1.27 (Disclosure), notwithstanding any other provision of this Agreement to the contrary, this paragraph contains the sole and exclusive representations and warranties of
Seller with regard to Permits. </P>
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6.1.16 <U>Environmental Matters</U>. Except as set forth on Schedule 6.1.16 or as would not have a Material Adverse Effect, (i) the Company and its Subsidiaries are in full compliance with, and have not been and are not in violation of or liable
under, any Environmental Law, including with respect to any and all long term iron ore purchase agreements entered into, prior to date hereof, among the Company and/or any of its Subsidiaries and Sobramil, Itaminas, Nogueira Duarte and/or Argentina;
(ii) neither Seller, the Company nor any of its Subsidiaries has received any written notice that remains uncured alleging that the Company or any of its Subsidiaries is in violation of any Environmental Law; (iii) no Lien has been imposed and is
continuing on the Company's or any of its Subsidiaries&#8217; premises by any Governmental Authority in connection with any violation of or noncompliance with Environmental Laws; (iv) neither the Company nor any of its Subsidiaries is (1) subject to
any outstanding consent decree, compliance order or administrative order pursuant to an Environmental Law or (2) in receipt of any unresolved written notice, complaint or claim seeking to impose an environmental Liability against the Company or any
of its Subsidiaries and (v) there is no Action pending or, to the Seller`s Knowledge, threatened against the Company and/or any of its Subsidiaries in connection with Environmental Law that if adversely determined would have a Material Adverse
Effect. Except for Sections 6.1.15 (Permits), 6.1.23 (Undisclosed Liabilities) and 6.1.27 (Disclosure), notwithstanding any other provision of this Agreement to the contrary, this paragraph contains the sole and exclusive representations and
warranties of Seller with regard to environmental matters. </P>
<P align="justify">
6.1.17 <U>Tax Matters</U>. Except as set forth on<U> Schedule 6.1.17</U> or as would not have a Material Adverse Effect, (i) the Company and its Subsidiaries are in full compliance with any Applicable Law relating to Taxes, and have not been and are
not in violation of any Applicable Law relating to Taxes, or liable under any Applicable Law relating to Taxes that have not been cured or may result in any Liability for the Company and/or any of its Subsidiaries, including, with respect to the
acquisition by the Company of the totality of shares issued by CFM, the amortization of goodwill resulting from the merger of CFM into the Company; (ii) all Tax Returns required to be filed by or with respect to the Company and/or its Subsidiaries
have been filed with the appropriate tax authorities in all jurisdictions in which such Tax Returns are required to be filed; (iii) such Tax Returns were true, complete and correct, and all Taxes reported on such Tax Returns and all other Taxes due
by the Company and/or its Subsidiaries as a taxpayer or as party that may be deemed liable for the collection of Taxes by Applicable Law with respect to taxable events occurred until the Closing Date have been timely paid; (iv) there are no Actions
pending or, to the Knowledge of Seller, threatened against the Company or any of its Subsidiaries by any tax authority; (v) there are no Liens for Taxes (other than for current Taxes not yet due or payable) upon the assets of the Company or any of
its Subsidiaries and (vi) the Company and its Subsidiaries have made any and all payments and has complied and are in compliance with all their obligations
related to Taxes in connection with Environmental Law, Mining Rights and Real Estate and all such payments and obligations have been timely made or discharged, and all other requirements of Applicable Law relating to Taxes and applicable to
Environmental Law, Mining Rights and Real Estate have been fully and faithfully complied with in all material respects, and neither the Company nor any of its Subsidiaries is in breach thereof. CSN Espanha is subject to corporate income tax under
the general regime established by the laws in Spain, by means of which it could be available for CSN Espanha the application of the exemption method, whereby no corporate income tax is imposed upon receipt of dividends and on the gains realized upon
disposal of the investment held in NMSA Madeira. CSN Espanha&#8217;s income arising from the equity pick-up method related to the investment in NMSA Madeira is not subject to income tax in Spain to the extent that the Controlled Foreign
Companies&#8217; rules do not apply to parent subsidiaries companies located in the European Union. Except for Sections 6.1.23 (Undisclosed Liabilities) and 6.1.27 (Disclosure), notwithstanding any other provision of this Agreement to the contrary,
this paragraph contains the sole and exclusive representations and warranties of Seller with regard to tax matters.</P>
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<P align="justify">6.1.18 <U>Financial Statements</U>. The Financial Statements (including the notes thereto) of the Company fairly present the consolidated and unconsolidated financial position and consolidated and unconsolidated results of operations and cash flows
of the Company and its Subsidiaries as of the respective dates or for the respective periods set forth therein and are true, complete and correct as of the respective dates, and are consistent with the Records of the Company and its Subsidiaries
(which Records are true, correct and complete), all in conformity with GAAP consistently applied during the periods involved therein, except as otherwise noted therein, and subject to normal and recurring year-end adjustments that have not been and
are not expected to be material in amount. </P>
<P align="justify">
6.1.19 <U>Insurance</U>. Except as set forth on Schedule 6.1.19, (i) all premiums due and payable for the insurance policies of the Company and its Subsidiaries have been paid in the ordinary course of business, (ii) there are no claims in excess of
US&#36; 5,000,000 pending under any such policies and (iii) all insurance policies of the Company have adequate coverage with respect to the risks addressed by such policies, as is customary for companies engaged in similar businesses within the
same industry in Brazil. </P>
<P align="justify">
6.1.20 <U>Operational Agreements</U>. Until the Closing Date, the Amendment to the Transportation Agreement and each of the Operational Agreements will be duly and validly executed and delivered by Seller, the Company, any of its Subsidiaries and/or
MRS, as the case may be, and will constitute a valid and binding agreement enforceable against the parties thereto in accordance with its terms.</P>
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6.1.21. <U>Titles to Assets</U>. Each of the Company and its Subsidiaries has good and marketable title to all properties and assets (other than Real Estate) owned by it, in each case free from Liens and defects that could materially affect the
value thereof or materially interfere with the use made or to be made thereof by them; and each of the Company and its Subsidiaries holds all leased personal property under valid and enforceable leases with no exceptions that could interfere with
the use made or to be made thereof by them, except where the failure to hold such title or lease would not result in a Material Adverse Effect. </P>
<P align="justify">
6.1.22  <U>MRS Shares</U>. All of the 34,000,000 (thirty-four million) preferred class A non-convertible shares of MRS, representing 10% (ten percent) of its total issued and outstanding capital stock (i) have been legally and validly issued, (ii)
will be, on the Closing Date, legally and validly contributed to the stock capital of the Company and (iii) will be, on the Closing Date, held by the Company free and clear of any and all Liens; </P>
<P>
6.1.23 <U>Undisclosed Liabilities</U>. Except as set forth on <U>Schedule 6.1.23</U>, the Company and its Subsidiaries have no Liabilities of any nature (whether absolute, accrued, contingent or otherwise) except for the Schedules or Exhibits, for
the Liabilities reflected or reserved against in the Financial Statements of the Company and current Liabilities incurred in the ordinary course of business. </P>
<P align="justify">
6.1.24 <U>Intellectual Property</U>. <U>Schedule 6.1.24</U> of this Agreement lists all the trademarks, logos, trade names, corporate names and other intellectual property rights held by the Company and each of its Subsidiaries. The Company and each
of its Subsidiaries are owners of, or entitled to use, all right, title, and interest in and to each of the trademarks, logos, trade names, corporate names and other intellectual property rights necessary to carry out their businesses as currently
conducted free and clear of any and all Liens and not subject to any Action. </P>
<P align="justify">
6.1.25 <U>Sufficiency of Assets</U>. The buildings, plants and equipment of the Company and its Subsidiaries are (i) in good operating condition and repair, and are adequate for the uses to which they are being put and (ii) sufficient for the
continued conduct of the Company&#8217;s and its Subsidiaries&#8217; businesses as currently conducted.</P>
<P align="justify">
6.1.26 <U>Guarantees</U>. Neither the Company nor any of its Subsidiaries is a guarantor or otherwise is responsible for any Liability of obligation (including indebtedness) of any other Person. </P>
<P align="justify">
6.1.27 <U>Disclosure</U>. The representations and warranties contained in this Article 6 do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements and information contained in
this Article 6 not misleading. </P>
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6.1.28 <U>Brokerage Fees and Commissions</U>. There is no investment banker, broker or finder which has been retained by or is authorized to act on behalf of Seller or its Subsidiaries who is or might be entitled to any fee and legal fees,
commission or payment from Buyer or the Company in connection with the negotiation, preparation, execution or delivery of this Agreement or the consummation of the transactions contemplated hereby. </P>
<P>
Section 6.2 <U>Representations and Warranties of Buyer</U>.</P>
<P align="justify">
Buyer represents and warrants to Seller, as of the date hereof and as of the Closing Date the following: </P>
<P align="justify">
6.2.1 <U>Organization, Good Standing and Qualification</U>. Buyer is a closely-held corporation (<I>sociedade an&ocirc;nima</I>) duly organized and validly existing and in good standing under the laws of Brazil and has the requisite corporate power
and authority to carry on its business as now being conducted.</P>
<P align="justify">
6.2.2 <U>Authority</U>. Buyer has all requisite corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder. The execution, delivery and performance of this Agreement and the transactions contemplated
hereby have been duly and validly authorized by all requisite corporate or similar action on the part of Buyer.</P>
<P align="justify">
6.2.3 <U>Enforceability</U>. This Agreement has been duly and validly executed and delivered by Buyer and constitutes a valid and binding agreement of Buyer enforceable against Buyer in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and other similar laws of general application from time to time in effect that affect creditors' rights generally.</P>
<P align="justify">
6.2.4 <U>No Violation or Breach</U>. Neither the execution and delivery of this Agreement nor the consummation of the transactions and performance of the terms and conditions of this Agreement by Buyer will (i) result in a violation or breach of or
default under any provision of the certificate of incorporation or other similar governing documents of Buyer; (ii) will result in a violation or breach of or default under any provision of any agreement, indenture or other instrument under which
Buyer is bound, other than such violations, breaches or defaults of agreements, indentures or other instruments that would not have a material adverse effect or (iii) violate any Applicable Law in relation to Buyer.</P>
<P align="justify">
6.2.5 <U>Consents</U>.  Except for any approvals or consents from SBDC, no filing or registration with, declaration or notification to, or order, authorization, consent or approval of, any Governmental Authority or any other Person is required in
connection with the execution, delivery and performance of this Agreement by Buyer or the consummation by Buyer of the transactions contemplated hereby.</P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B></P>

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6.2.6 <U>Actions</U>.  There is no Action by or before any court or other Governmental Authority or any arbitration proceeding pending or, to Buyer's Knowledge, threatened against the Buyer that if adversely determined would have a material adverse
effect on Buyer's ability to perform its obligations under this Agreement.</P>
<P align="justify">
6.2.7 <U>Brokerage Fees and Commissions</U>. There is no investment banker, broker or finder which has been retained by or is authorized to act on behalf of Buyer or its Subsidiaries who is or might be entitled to any fee and legal fees, commission
or payment from Seller or the Company in connection with the negotiation, preparation, execution or delivery of this Agreement or the consummation of the transactions contemplated hereby.</P>
<P align="justify">
6.2.8 <U>Funds</U>.  Buyer will have on the Closing Date sufficient funds available to enable Buyer to consummate the transactions contemplated by this Agreement and to pay the Investment, the other payments required of Buyer hereunder and all fees
and expenses of Buyer. Consummation of the transactions contemplated by this Agreement will not cause Buyer to become insolvent.</P>
<P align="justify">
6.2.9 <U>Securities Matters</U>.  Buyer is an experienced and knowledgeable investor in the mining business. Prior to entering into this Agreement, Buyer was advised by its counsel, accountants, financial advisors and such other Persons it has
deemed appropriate concerning this Agreement. Buyer hereby acknowledges that it will acquire the Shares for its own account, and not with a view to a sale or distribution thereof. Buyer has sufficient knowledge and experience in financial and
business matters, including in the mining business, to enable it to evaluate the risks of investment in the Shares and has the ability to bear the economic risk of this investment for an indefinite period of time.</P>
<P align="justify">
6.2.10 <U>Inspection</U>. Buyer acknowledges that, prior to the execution of this Agreement, it has been afforded access and the opportunity to visit the Company's premises, review copies of certain Contracts and all other due diligence materials
made available by Seller with respect to the Company or made an independent investigation on public data. Buyer is a sophisticated purchaser, knowledgeable of the Brazilian mining business, and has made its own investigation, review and analysis
regarding the Company and the transactions contemplated hereby, which investigation, review and analysis were conducted by Buyer together with expert advisors that it has engaged for such purpose.  In entering into this Agreement, Buyer has relied
solely upon its own investigation and analysis and Buyer is not relying on any statement, representation or warranty, oral or written, express or implied, made by Seller or the Company or any of their Subsidiaries or Representatives, except for the
representations and warranties made by the Seller and expressly set forth in this Agreement.  Buyer has such knowledge and experience in financial, mining and business matters so as to be capable of
evaluating the merits and risks of an investment in the Shares, and is capable of bearing the economic risk of such investment. </P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B></P>

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<P align="justify">6.2.11 <U>No Liabilities</U>. The Buyer has no Liabilities of any nature (whether absolute, accrued, contingent or otherwise). The Buyer is a holding company and it does not have, nor ever had, any operational activity. </P>
<P align="justify">
6.2.12 <U>Disclosure</U>. The representations and warranties contained in this Article 6 do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements and information contained in
this Article 6 not misleading. </P>
<P align="justify">
Section 6.3 <U>Representation and Warranties of the Guarantors</U><B> </B></P>
<P align="justify">
 Each of the Guarantors represents and warrants to Seller, severally (and not jointly), as of the date hereof and as of the Closing Date the following: </P>
<P align="justify">
6.3.1 <U>Organization, Good Standing and Qualification</U>. The Guarantor is a duly organized and validly existing entity in good standing under the Laws of country of its incorporation and has the requisite corporate power and authority to carry on
its business as now being conducted.</P>
<P align="justify">
6.3.2 <U>Authority</U>.  The Guarantor has all requisite corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder.  The execution, delivery and performance of this Agreement and the transactions
contemplated hereby have been duly and validly authorized by all requisite corporate or similar action on the part of the Guarantor.</P>
<P align="justify">
6.3.3 <U>Enforceability</U>. This Agreement has been duly and validly executed and delivered by the Guarantor and constitutes a valid and binding agreement of the Guarantor enforceable against the Guarantor in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws of general application from time to time in effect that affect creditors' rights generally.</P>
<P align="justify">
6.3.4 <U>No Violation or Breach</U>. Neither the execution and delivery of this Agreement nor the consummation of the transactions and performance of the terms and conditions of this Agreement by the Guarantor will (i) result in a violation or
breach of or default under any provision of the certificate of incorporation or other similar governing documents of the Guarantor; (ii) will result in a violation or breach of or default under any provision of any agreement, indenture or other
instrument under which the Guarantor is bound, other than such violations, breaches or defaults of agreements, indentures or other instruments that would not have a material adverse effect or (iii) violate any Applicable Law in relation to
Guarantor.</P>
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6.3.5 <U>Funds</U>.  The Guarantor has on the date hereof, and, on a pro rata basis based on its percentage ownership of the total shares issued by Buyer, will cause Buyer on the Closing Date to have, sufficient funds available to enable Buyer to
consummate the transactions contemplated by this Agreement and to pay its pro-rata portion of the Investment, the other payments required of Buyer hereunder and all fees and expenses of Buyer. Consummation of the transactions contemplated by this
Agreement will not cause the Guarantor to become insolvent. </P>
<P align="justify">
6.3.6 <U>Actions</U>.  There is no Action by or before any court or other Governmental Authority or any arbitration proceeding pending or, to Guarantor's Knowledge, threatened against the relevant Guarantor that if adversely determined would have a
material adverse effect on the relevant Guarantor's ability to perform its obligations under this Agreement. </P>
<P align="justify">
6.3.7 <U>Disclosure</U>. The representations and warranties contained in this Article 6 do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements and information contained in
this Article 6 not misleading. </P>
<P align="center">
Article 7<B> </B><br>
<U>C</U><U>OVENANTS</U> </P>
<P>
Section 7.1 <U>Pre-Closing Covenants</U>. <B> </B></P>
<P align="justify">
The Parties and the Company agree as follows with respect to period between the date hereof and the Closing ("<U>Pre-Closing Covenants</U>"): </P>
<P align="justify">
7.1.1 <U>General</U>. Each of the Parties will use its reasonable commercial efforts to take all action and to do all things necessary, proper or advisable in order to consummate and make effective the transactions contemplated by this Agreement
(including satisfaction, but not waiver, of the Closing conditions set forth in Article 4 above). </P>
<P align="justify">
7.1.2 <U>Operations of Business</U>. Without the prior written consent of Buyer, Seller will not cause or permit the Company or any of its Subsidiaries to engage in any practice, take any action, or enter into any transaction outside the ordinary
course of business of the Company and any of its Subsidiaries. Without limiting the generality of the foregoing, and except as otherwise permitted hereunder, Seller will not cause or permit the Company or any of its Subsidiaries to: </P>
<P align="justify">
(a) declare, set aside, or pay dividend or make any distribution with respect to its capital stock or redeem, purchase or otherwise acquire any of its capital stock; </P>
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(b) issue any shares or other securities, convertible or not into shares; </P>
<P align="justify">(c) create any Lien or sell, transfer, assign, pledge, encumber or otherwise dispose of any of the shares of the Company or any of its Subsidiaries; or, sell, transfer, assign, pledge, lease, encumber or otherwise
dispose of or agree to sell, transfer, assign, pledge, lease, encumber or otherwise dispose of any asset (in whole or in part), or allow any assets (in whole or in part) to become subject to any Lien, provided however that nothing contained in this
Section 7.1.2(c) shall prevent the Company and/or its Subsidiaries to sell its products and render services as currently sold or rendered in the ordinary course of their businesses; </P>
<P align="justify">
(d) incur any additional indebtedness for borrowed money or guarantee any such indebtedness, save for such indebtedness for borrowed money incurred in the ordinary course of business of the Company and any its
Subsidiaries, not to exceed R&#36; 200,000.00 (or its equivalent in other currencies); </P>
<P align="justify">
(e) except for the Operational Agreements, the Amendment to Transportation Agreement and for those agreements to be executed in connection with the transaction object of this Agreement, enter into any agreement,
understanding or commitment that restrains, limits or impedes the ability of the Company and/or any of its Subsidiaries to compete with or conduct any business, including geographic limitations on the Company&#8217;s and/or any of its
Subsidiaries&#8217; activities; </P>
<P>
(f) enter into any new joint venture or similar agreement; </P>
<P align="justify">
(g) execute any new lease for real estate or mining rights or sublease for real estate or cancel, modify, terminate or amend any lease for real estate or mining rights or sublease for real estate, unless such new lease
or sublease is executed in the ordinary course of business consistent with past practice or required for the accomplishment of the transaction object of this Agreement, and does not materially impair the operations of the Company and/or any of its
Subsidiaries; </P>
<P align="justify">(h) adopt or enter into a plan of complete or partial liquidation, dissolution, winding up, merger, consolidation, restructuring, recapitalization or other reorganization, involving the Company and/or any of its
Subsidiaries; </P>
<P align="justify">
(i) terminate, cancel amend, impede renewal or cause the termination, cancellation, amendment or renewal of, any insurance coverage
relating to the assets of the Company and/or any of its Subsidiaries, which is not replaced by a comparable insurance coverage, other than in the ordinary course of business consistent with past practice; and </P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B></P>

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<P align="justify">(j) impede the renewal of, or lose, any and all material Permits necessary for the conduct of the Company&#8217;s and/or any of its Subsidiaries&#8217; businesses as currently conducted, the absence of which would have
a Material Adverse Effect. </P>
<P align="justify">
7.1.3 <U>Preservation of Business</U>. Seller will cause the Company and its Subsidiaries to keep their businesses and properties substantially intact, including their present operations, physical facilities, working conditions (wear and tear
excepted) and will use its best efforts to maintain its existing relationships with suppliers, customers, and employees. </P>
<P align="justify">
7.1.4 <U>Full Access</U>. Seller will permit, and Seller will cause the Company and its Subsidiaries to permit, Representatives of Buyer (including legal counsel and accountants) to have full access at all reasonable times, and in a manner so as not
to interfere with the normal business operations of the Company and its Subsidiaries, to all premises, properties, personnel, books, records (including tax records), contracts, and documents of or pertaining to each of the Company or its
Subsidiaries. Buyer will treat and hold as confidential information any information it receives or have access to in the course of the reviews contemplated by this Section. The access rights provided in this Section 7.1.4 shall not deemed to be an
authorization to Buyer or its Representative to opine, comment or otherwise interfere in any manner or aspect with the management, operations or business of the Company and its Subsidiaries. </P>
<P align="justify">
7.1.5 <U>Notice of Developments</U>. Each of the Parties will give prompt written notice to the other of any Material Adverse Effect causing or that could reasonably be expected to cause a breach of any of the representations and warranties in
Article 6 above. No disclosure by any Party pursuant to this Section 7.1.5, however, shall be deemed to amend or supplement the Schedules of this Agreement or to prevent the occurrence or the cure of any misrepresentation, breach of warranty or
breach of covenant or obligation hereunder. </P>
<P align="justify">
7.1.5.1 Without prejudice to the remedies provided for herein (including in Section 10.1), each of the Parties may give prompt written notice to the other Parties in case of any and all breach of representations, warranties, obligations and/or
covenants provided in this Agreement. Upon receipt of such notice, the defaulting Party and the non-defaulting Parties shall use their commercially reasonable efforts to discuss alternatives suitable to cure such breach as soon as reasonably
practicable to the extent such breach can be cured. No disclosure by any Party pursuant to this Section 7.1.5.1, however, shall be deemed to amend or supplement the Schedules of
this Agreement or to prevent the occurrence or the cure of any misrepresentation, breach of warranty or breach of covenant or obligation hereunder. </P>
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<P align="justify">7.1.6 <U>Exclusivity</U>. The Seller will not and will cause the Company not to (i) solicit, initiate, or encourage the submission of any proposal or offer from any Person relating to the acquisition of any capital stock or voting securities, or any
substantial portion of the assets of the CdP Mine (including the rights related to the mining title registered with DNPM (DNPM process N. 043.306/1956)), of the Company or its Subsidiaries; or (ii) participate in any discussions or negotiations
aiming at furnishing any information with respect to, assisting or participating in, or facilitating in any other manner any effort or attempt by any Person to do or seek any of the foregoing. </P>
<P>
Section 7.2 <U>Post-Closing Covenants</U>.</P>
<P align="justify">
The Parties agree as follows with respect to the period following the Closing ("<U>Post-Closing Covenants</U>"): </P>
<P align="justify">
7.2.1 Seller shall guarantee and procure that (i) all areas necessary for the construction, implementation and operation of the first and second Pellet Plants, the High Silica Plant, the B-58 Tailing Dam ("<U>Relevant Areas</U>" and "<U>Relevant
Assets</U>", respectively) are purchased by the Company (at the sole expense of Seller) for its use in accordance with the Long-Term Business Plan on or before June 30, 2010, (ii) the Company obtains all Permits required under Applicable Law
(including installation license, on or before October 31, 2010, and operational license, on or before October 31, 2012) in relation to the construction, implementation and operation of the Relevant Assets, including those Permits that should be
obtained after Closing Date, ("<U>Relevant Permits</U>") and (iii) any communities potentially occupying the Relevant Areas are definitely and legally relocated as provided in the agreement with government of the State of Minas Gerais ("<U>Relevant
Communities</U>"). In the event that the Company does not purchases the Relevant Areas, obtains the Relevant Permits and/or relocates the Relevant Communities occupying the Relevant Areas up to each of the relevant dates set forth above, then the
Seller shall guarantee and procure that (a) the Company purchases, at the sole expense of Seller, other areas appropriate for the construction, implementation and operation of the Relevant Assets and (b) all Relevant Permits in connection with such
other areas are also obtained by the Company. For the purpose of this Section, Buyer shall, jointly with Seller, cause the Company to approve all Major Decisions (as defined in the Shareholders' Agreement) necessary for the acts or events described
in items (i) to (iii) of this Section 7.2.1 and, if so requested by Seller, to grant the power of attorneys necessary to enable the Seller to obtain the Relevant Permits hereunder on behalf of the Company. </P>
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7.2.2 Seller and the Buyer shall cause the Company to execute and deliver to Buyer, within a period of 4 (four) months as from the Closing Date, the applicable amendments to all agreements executed by the Company related to the exploitation of areas
in which the mining rights are not held by the Company under the DNPM registries in order to reflect appropriate compliance with <I>Portaria DNPM N. 269</I>, dated as of July 10<SUP>th</SUP>, 2008. Such agreements include, but are not limited to,
the agreements with Minas do Itacolomy Ltda., Minera&ccedil;&atilde;o Jacare&iacute; Ltda., Sobramil, Itaminas, Nogueira Duarte and Argentina. </P>
<P align="center">
Article 8<B> </B><br>
<U>L</U><U>IMITATIONS</U> </P>
<P>
Section 8.1 <U>Limitation of Warranties</U>. </P>
<P align="justify">
8.1.1 Buyer agrees that except for the representations and warranties of the Seller expressly set forth in this Agreement, which are, and shall be, true, complete and accurate as of the date hereof and as of the Closing Date (i) Seller makes no
other representation or warranty whatsoever, whether express or implied, at equity, common law, by statute or otherwise, (ii) Seller makes no representation or warranty, whether express, implied, at equity, common law, by statute or otherwise, with
respect to the accuracy or completeness of the information, Records and data now, heretofor, or hereafter made available to Buyer in connection with this Agreement or the transactions contemplated hereby (including any description of the Company,
revenue, price and expense assumptions or environmental information or any other information furnished to Buyer by Seller or its Subsidiaries or any director (<I>membro do conselho de administra&ccedil;&atilde;o</I>), officer (<I>diretor</I>),
employee, counsel, agent or advisor of Seller or its Subsidiaries) and (iii) Seller expressly disclaims and negates any other representation or warranty, whether express or implied, at equity, common law, by statute or otherwise relating to the
condition of the Company, the business of the Company or other assets of the Company. </P>
<P align="justify">
8.1.2 Seller agrees that except for the representations and warranties of Buyer expressly set forth in this Agreement, which are, and shall be, true, complete and accurate as of the date hereof and as of the Closing Date, Buyer makes no other
representation or warranty whatsoever, whether express or implied, at equity, common law, by statute or otherwise. </P>
<P>
Section 8.2 <U>Waiver of Damages</U>.</P>
<P align="justify">
Notwithstanding anything to the contrary contained in this Agreement, the Parties agree that the recovery by any Indemnified Party (as defined below) of any Losses suffered or incurred by such Indemnified Party as a
result of any breach by another Party of any of its representations, warranties, obligations and covenants (including Pre-Closing Covenants and Post-Closing Covenants, as applicable) under this Agreement shall be limited to the actual Losses
suffered or
incurred by an Indemnified Party as a result of the breach by the breaching Party of its representations, warranties, obligations and covenants (including Pre-Closing Covenants and Post-Closing Covenants, as applicable) hereunder and in no event
shall the breaching Party be liable to an Indemnified Party for any indirect, consequential, special, exemplary or punitive damages (including any damages on account of lost profits or opportunities) suffered or incurred by an Indemnified Party as a
result of the breach by the breaching Party of any of its representation, warranties, obligations and covenants (including Pre-Closing Covenants and Post-Closing Covenants, as applicable) hereunder. </P>
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<P>Section 8.3 <U>No Reliance</U><B>.</B> </P>
<P align="justify">
Buyer acknowledges that (i) it is relying upon only those representations and warranties of Seller that are expressly contained in this Agreement, as well as upon its own inspections and investigation, in order to
satisfy itself as to the condition and suitability of the Shares, the business, assets, Liabilities, operations or condition (financial or otherwise) of the Company and (ii) it is not relying upon any representations, warranties, statements, advice,
documents, projections or other information of any type provided by Seller or its Representatives other than those representations and warranties expressly set forth in this Agreement; provided, however, that such acknowledgments by Buyer shall have
no effect on, and shall be disregarded for purposes of, the representations, warranties, covenants and other obligations of Seller, and the rights of Buyer (including indemnification rights under Section 9.1 through Section 9.7 herein) under this
Agreement. </P>
<P align="center">
Article 9 <br>
<U>I</U><U>NDEMNIFICATION</U><B> </B></P>
<P>
Section 9.1 <U>Indemnification by Seller</U>.</P>
<P align="justify">
Subject to the other terms and limitations set forth in this Agreement, Seller shall indemnify, defend, reimburse and hold harmless Buyer, its Subsidiaries and their respective directors (<I>membros do conselho de
administra&ccedil;&atilde;o</I>), officers (<I>diretores</I>), partners (<I>s&oacute;cios</I>), direct or indirect shareholders and employees (each such Person, a "<U>Buyer Indemnified Party</U>" and, collectively, the "<U>Buyer Indemnified</U>
<U>Parties</U>") from and against any and all Losses actually incurred by Buyer Indemnified Party for (i) any breach, inaccuracy or omission of any representation or warranty made by Seller in this Agreement, (ii) any breach or non-performance of
any covenants or obligations of Seller under this Agreement and (iii) any Losses of the Company and/or its Subsidiaries deriving from any final non-appealable court decision (<I>tr&acirc;nsito em julgado</I>) (except if any provisional court
decision which effects are not suspended requires any Buyer Indemnified Party to make any payment thereunder) in connection with the issues disputed under the Vale Lawsuits.</P>
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<P>
Section 9.2 <U>Indemnification by the Buyer</U>.</P>
<P align="justify">
Subject to the other terms and limitations set forth in this Agreement, Buyer shall indemnify, defend, reimburse and hold harmless Seller, its Subsidiaries and their respective directors (<I>membros do conselho de
administra&ccedil;&atilde;o</I>), officers (<I>diretores</I>), partners (<I>s&oacute;cios</I>), direct or indirect shareholders and employees (each such Person, a "<U>Seller Indemnified Party</U>" and, collectively, the "<U>Seller Indemnified</U>
<U>Parties</U>") from and against any and all Losses actually incurred by any Seller Indemnified Party for (i) any breach, inaccuracy or omission of any representation or warranty of Buyer; and (ii) any breach or non-performance of any covenants or
obligations of Buyer under this Agreement.</P>
<P>
9.2.1 <U>Indemnification by the Guarantor</U>.</P>
<P align="justify">
Subject to the other terms and limitations set forth in this Agreement, each Guarantor (severally, and not jointly) shall indemnify, defend, reimburse and hold harmless Seller Indemnified Parties from and against any
and all Losses actually incurred by any Seller Indemnified Party for (i) any breach, inaccuracy or omission of any representation or warranty of the relevant Guarantor and (ii) any breach or non-performance of any obligations of the relevant
Guarantor under this Agreement. Section 9.3 <U>Limitations of Liability</U>.</P>
<P align="justify">
9.3.1 None of the Buyer Indemnified Parties shall be entitled to assert any right to indemnification pursuant to Section 9.1 until the aggregate amount of all Losses actually suffered by the Buyer Indemnified Parties exceeds the Deductible Amount,
and then only to the extent such Losses exceed, in the aggregate, the Deductible Amount. Parties agree that there is no maximum amount for Indemnification of Buyer Indemnified Parties by Seller under Section 9.1 above, provided, however, that any
indemnification based on Section 9.1(iii) shall be (i) limited to a maximum US&#36;[&Iuml;] and (ii) not subject to the Deductible Amount.</P>
<P align="justify">
9.3.2 None of the Seller Indemnified Parties shall be entitled to assert any right to indemnification pursuant to Section 9.2 until the aggregate amount of all Losses actually suffered by the Seller Indemnified Parties exceeds the Deductible Amount,
and then only to the extent such Losses exceed, in the aggregate, the Deductible Amount. Parties agree that there is no maximum amount for Indemnification of Seller Indemnified Parties by Buyer under Section 9.2 above. </P>
<P align="justify">
9.3.3 Neither Buyer, Guarantors nor Seller shall be required to make any payments to Seller Indemnified Parties or Buyer Indemnified Parties, as the case may be, pursuant to this Article 9 with respect to indemnification obligations until (i) a
final non-appealable court decision (<I>tr&acirc;nsito em julgado</I>) or arbitral decision (subject to no recourse or appeal) is issued or granted against the Company, Seller Indemnified Parties or Buyer Indemnified Parties, as the case may be,
regarding a third party claim (except if any provisional court or arbitral decision which effects
are not suspended, reversed or stayed requires any Seller Indemnified Party or Buyer Indemnified Party to make any payment thereunder ("<u>Provisional Decision</u>")) or (ii) a final arbitral award is issued or granted against any of the Seller
Indemnified Parties or Buyer Indemnified Parties regarding a direct dispute between Seller and Buyer (except for a Provisional Decision) or (iii) Seller and Buyer agree in writing that such indemnification is undisputed and due by either Seller or
Buyer, as applicable.  The applicable Seller Indemnified Party or Buyer Indemnified Party shall be fully and promptly reimbursed for all costs incurred and payments made with respect to a Provisional Decision if such Provisional Decision is reverted
on behalf of the relevant Seller Indemnified Party or Buyer Indemnified Party. </P>
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<P align="justify">9.3.4 The amount of any indemnifiable Loss shall be paid to the relevant Buyer Indemnified Party or Seller Indemnified Party, as applicable, including the amount of any Taxes due and/or payable by the Buyer Indemnified Party or Seller Indemnified
Party on the amount of the indemnifiable Loss to be received, so that the relevant Buyer Indemnified Party or Seller Indemnified Party, as applicable, is indemnified for the full amount of its actual Loss. </P>
<P align="justify">
9.3.5 If under any indemnifiable Loss the Company is compelled to provide any type of guarantee or deposit in order to file an appeal or otherwise to present any defense in connection with an administrative proceeding or a lawsuit of any nature, the
Indemnifying Party (as defined below) shall provide the Company with the means to provide such guarantee or deposit. In any case, the compliance by Indemnifying Party with its obligation under this Section does not authorize the dilution (via
potential capital increase of the Company) of the Seller or the Buyer, as applicable, with respect to their percentage ownership in the capital stock of the Company. </P>
<P>
Section 9.4 <U>Indemnification Procedure</U>.</P>
<P>Claims for indemnification under this Agreement shall be asserted and resolved as follows: </P>
<P align="justify">&nbsp;</P>
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<P align="justify">
 9.4.1 If a claim by a third party is made against a Seller Indemnified Party or a Buyer Indemnified Party (any such Person, an "<U>Indemnified Party</U>"), and if such Indemnified Party intends to seek indemnity with respect thereto under this
Article 9, such Indemnified Party shall promptly furnish written notice of such claim (in reasonable detail and including the factual basis for such claim and, to the extent known, the amount thereof) to the Party against whom indemnity is sought
(such Party, in such capacity, the "<U>Indemnifying Party</U>").  Thereafter, the Indemnified Party shall deliver to the Indemnifying Party, promptly after the Indemnified Party's receipt thereof, copies of all material notices and documents
(including court papers) received or transmitted by the Indemnified Party relating to such claim. The failure or delay of the Indemnified Party to deliver prompt written notice of a claim shall not affect the indemnity obligations of the Indemnifying Party hereunder, except and only to the extent that, as a result of such failure, any Indemnifying Party that was entitled to receive such notice was deprived of its right to recover any
payment under its applicable insurance coverage or was otherwise materially prejudiced as a result of such failure.  The Indemnifying Party shall have 5 (five) Business Days after receipt of such notice to elect to undertake, conduct and control
(through counsel of its own choosing and at its own expense, so long such counsel is approved by the other Party, such approval not to be unreasonably delayed or withheld), and, in any event, shall have the right to participate (at its own expense)
in, the settlement or defense of such claim, and the Indemnified Party shall cooperate with it in connection therewith.  If the Indemnifying Party elects to undertake, conduct and control the settlement or defense of such claim, the Indemnifying
Party shall permit the Indemnified Party to participate in such settlement or defense directly or through counsel chosen by such Indemnified Party (but the fees and expenses of such counsel shall be borne by such Indemnified Party).  So long as the
Indemnifying Party (at the Indemnifying Party's cost and expense) (i) has undertaken the defense of, and assumed full responsibility for all indemnified liabilities with respect to, such claim, (ii) is reasonably contesting such claim in good faith
through appropriate proceedings and (iii) has taken such action (including the posting of a bond, deposit or other security) as may be necessary to prevent any action to foreclose a Lien against or attachment of the property and/or assets of the
Indemnified Party or of any of the Company, as the case may be, for payment of such claim, the Indemnified Party shall not pay or settle any such claim; provided, however, that, the Indemnified Party shall have the right to pay or settle any such
claim if it has waived in writing any right to indemnity by the Indemnifying Party for such claim; and provided, further, that, if within five Business Days after the receipt of the Indemnified Party's notice of a claim of indemnity under this
Section 9.4.1, the Indemnifying Party does not notify the Indemnified Party that it elects (at the Indemnifying Party's cost and expense) to undertake the defense thereof and assume full responsibility for all indemnified liabilities with respect
thereto, or gives such notice and thereafter fails to contest such claim in good faith or to prevent action to foreclose a Lien against or attachment of the Indemnified Party's property as contemplated above, the Indemnified Party shall have the
right to contest, settle or compromise such claim (at the Indemnifying Party&#8217;s costs and expenses) and the Indemnified Party shall not thereby waive any right to indemnity for such claim under this Agreement.  No Indemnifying Party shall
consent to any settlement, compromise or discharge (including the consent to entry of any judgment) of any such claim without the Indemnified Party's prior written consent (which consent shall not be unreasonably withheld, delayed or conditioned);
provided that, if the Indemnifying Party assumes the defense of any such claim, the Indemnified Party shall agree to any settlement, compromise or discharge of such claim which the Indemnifying Party may recommend and which by its terms obligates
the Indemnifying Party to pay the full
amount of Losses in connection with such claim and definitely and unconditionally releases the Indemnified Party and its Subsidiaries completely from all liability in connection with such claim; provided, however, that the Indemnified Party may
refuse to agree to any such settlement, compromise or discharge (i) that provides for injunctive or other nonmonetary relief affecting the Indemnified Party or its Subsidiaries or (ii) that, in the reasonable opinion of the Indemnified Party, would
otherwise materially adversely affect the Indemnified Party.  Whether or not the Indemnifying Party shall have assumed the defense of such claim, the Indemnified Party shall not admit any Liability with respect to, or settle, compromise or discharge
(including the consent to entry of any judgment with respect to), any such claim without the prior written consent of the Indemnifying Party (which consent shall not be unreasonably withheld, delayed or conditioned) unless the Indemnified Party has
waived in writing any right to indemnity from the Indemnifying Party with respect to such claim or otherwise provided herein, in which cases no such consent shall be required. </P>
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<P align="justify">9.4.2 Any claim on account of Losses for which indemnification is provided under this Agreement which does not involve a claim of a third party shall be asserted by prompt written notice (setting forth in reasonable detail the facts or circumstances
that allegedly gave rise to such claim and, to the extent known, the amount thereof) given by the Indemnified Party to the Indemnifying Party from whom such indemnification is sought. The failure or delay of the Indemnified Party to deliver prompt
written notice of a claim shall not affect the indemnity obligations of the Indemnifying Party hereunder, except and only to the extent that, as a result of such failure, any Indemnifying Party that was entitled to receive such notice was deprived
of its right to recover any payment under its applicable insurance coverage or was otherwise materially prejudiced as a result of such failure. </P>
<P align="justify">
9.4.3 In the event of payment in full by an Indemnifying Party to any Indemnified Party in connection with any claim (an "<U>Indemnified Claim</U>"), such Indemnifying Party shall be subrogated to and shall stand in the place of such Indemnified
Party as to any events or circumstances in respect of which such Indemnified Party may have any right or claim relating to such Indemnified Claim against any claimant or plaintiff asserting such Indemnified Claim or against any other Person. Such
Indemnified Party shall cooperate with such Indemnifying Party in a reasonable manner and (at such Indemnifying Party's cost and expense) in prosecuting any subrogated right or claim. </P>
<P>
Section 9.5 <U>Survival and Time Limitation</U>.</P>
<P align="justify">
Except as otherwise set forth herein, the terms and provisions of this Agreement, including the representations and warranties, shall survive the Closing of the transactions contemplated hereunder. Any claim by any
Buyer Indemnified Party that Seller is liable to such Buyer Indemnified Party under the terms of this
Agreement must be brought against Seller until the expiration of all applicable statutes of limitations.  Any claim by any Seller Indemnified Party that Buyer is liable to such Seller Indemnified Party under the terms of this Agreement must be
brought against Buyer until the expiration of all applicable statutes of limitations (including any extension thereto).</P>
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<P>Section 9.6 <U>Further Indemnity Limitations</U>. </P>
<P align="justify">
9.6.1 The amount of any indemnifiable Loss shall be reduced (i) to the extent any Indemnified Party actually receives any insurance proceeds with respect to such Loss, (ii) to take into account, if applicable, any net Tax benefit actually received
from the recognition of the Loss and (iii) to take into account any payment actually received by an Indemnified Party with respect to such Loss.</P>
<P align="justify">
9.6.2 Anything contained in this Agreement to the contrary notwithstanding, the Parties shall be liable for any and all Losses pursuant to Section 9.1, whether or not the breach, inaccuracy or omission of the applicable representation and warranty,
or the facts and circumstances underlying such breach was disclosed to or otherwise known by them prior to Closing. </P>
<P align="justify">
9.6.3 Neither the period of survival nor the liability of the Seller with respect to the Seller's representations and warranties shall be reduced by any investigation made at any time by or on behalf of Buyer. If written notice of a claim has been
given prior to the expiration of the applicable representations and warranties by Buyer to the Seller, then the relevant representations and warranties shall survive as to such claim, until such claim has been finally resolved. </P>
<P>
Section 9.7 <U>Sole and Exclusive Remedy</U>.</P>
<P align="justify">Except for fraud (<I>fraude</I>) or willful misconduct (<I>dolo</I>), the indemnification and termination provisions contained in this Agreement shall be the sole and exclusive remedy of each Party and the Seller
Indemnified Parties and the Buyer Indemnified Parties (i) for any breach, inaccuracy or omission of any Party's representations, warranties, covenants (including Pre-Closing Covenants and Post-Closing Covenants, as applicable) or undertakings
contained in this Agreement or (ii) otherwise with respect to this Agreement. Notwithstanding the foregoing, each Party shall have the right to seek specific performance of the terms of this Agreement in any court of competent jurisdiction. </P>
<P align="center">
Article 10 <br>
<U>T</U><U>ERMINATION</U><B> </B></P>
<P>
Section 10.1 <U>Termination</U>. </P>
<P align="justify">This Agreement may be terminated prior to Closing (except for breach of Post-Closing Covenant, in which case termination may occur after
Closing) by one or more Parties and all of the transactions contemplated hereby abandoned: </P>
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<P>10.1.1 by the mutual written consent of Buyer and Seller;</P>
<P align="justify">
10.1.2 by Buyer, if there has been a material breach, inaccuracy, omission or non-performance by Seller of any representation, warranty, covenant (including Post-Closing Covenant) or obligation contained in this Agreement and either (a) has not been
waived by Buyer, or (b) if capable of being cured, was not cured by Seller within 30 (thirty) days after written notice thereof from Buyer; </P>
<P align="justify">
10.1.3 by either Buyer or Seller if any Governmental Authority having competent jurisdiction has issued a final, non-appealable order, decree, ruling or injunction (other than a temporary restraining order) or taken any other action materially
changing, restraining, enjoining, prohibiting or otherwise materially and adversely affecting the transactions contemplated by this Agreement and the Operational Agreements;</P>
<P align="justify">
10.1.4 by Seller, if there has been a material breach, inaccuracy, omission or non-performance by Buyer of any representation, warranty, covenant or obligation contained in this Agreement and either (a) has not been waived by Seller or (b) if
capable of being cured, was not cured by Buyer within 30 (thirty) days after written notice thereof from Seller; and </P>
<P align="justify">
10.1.5 by any of the Parties if the Closing has not occurred because the conditions provided in Section 4.2 hereunder were not properly fulfilled or waived by the relevant Party on or before 180 (one hundred and eighty) days from the date of this
Agreement or such later date as the Parties may agree upon in writing. </P>
<P>
Section 10.2 <U>Effect of Termination</U>.</P>
<P align="justify">
In order to effect the termination of this Agreement by Seller or Buyer pursuant to Section 10.1, written notice thereof shall promptly be given by the terminating Party to the other Parties, and this Agreement shall
thereupon terminate. If this Agreement is terminated as provided herein, all filings, applications and other submissions made to any Governmental Authority shall, to the extent practicable, be withdrawn from the Governmental Authority to which they
were made.  This Agreement shall have no further force or effect, and all further obligations of the Parties under this Agreement shall terminate without further Liability of any Party to any other Party, except (a) that such termination shall not
affect (i) any claim any Party may have for damages caused by any reason of, or relieve any Party from Liability for, any breach of this Agreement prior to termination, (ii) the provisions of Section 12.3 (Arbitration) and (iii) Section 12.12
(Confidentiality) and (b) for the right of the Buyer to receive the refund from the Seller and the Company of all amounts paid as Investments (plus any potential Positive or Negative Difference of
Acquired Shares Price and Positive or Negative Difference of New Shares Prices) in the case of termination pursuant to Section 10.1.2 as a result of a breach of Post Closing Covenant.</P>
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<P align="center">Article 11 <br>
<U>G</U><U>UARANTY</U> </P>
<P align="justify">
Section 11.1 <U>Guarantors</U>.  Guarantors hereby irrevocably and unconditionally guarantees to Seller the full and punctual payment of any and all amounts due and payable by Buyer under this Agreement as they come due, on a pro-rata basis based on
the percentage ownership of each of the Guarantors in the capital stock of Buyer, as set forth in <U>Schedule 11.1</U> hereto. Upon failure by Buyer to pay punctually any such amount, the Guarantors shall forthwith pay, severally (and not jointly),
to Seller the amount not so paid at the place and time and in the manner specified in this Agreement, on a pro-rata basis based on the percentage ownership of each Guarantor in the capital stock of Buyer, as set forth in Schedule 11.1 hereto. This
guaranty constitutes a direct, general and unconditional obligation of each Guarantor which will at all times rank at least pari passu with all other present and future unsecured obligations of each Guarantor, except for such obligations as may be
preferred by provisions of law that are both mandatory and of general application. Each of the Guarantors unconditionally and irrevocably waives any and all rights provided under Articles 366, 368, 821, 827, 834, 835, 837, 838, I, and 839 of the
Brazilian Civil Code and Articles 77 and 595 of the Brazilian Civil Procedure Code. </P>
<P align="center">
Article 12 <br>
<U>M</U><U>ISCELLANEOUS</U><B> </B></P>
<P>
Section 12.1 <U>Approval by SBDC</U>.</P>
<P align="justify">The Parties hereby expressly agree that Buyer shall be the sole responsible for submitting the transaction contemplated by this Agreement to the SBDC, bearing all costs and expenses related thereto.  Buyer shall in good
faith prepare such submission for obtaining the approval by SBDC, submit all relevant applications and provide all relevant information required thereto; and Seller shall in good faith endeavor its best efforts and actively cooperate with Buyer for
obtaining such approval by SBDC. All fees, costs, expenses and penalties (including fees and expenses of attorneys, accountants, financial advisors and other professionals, other than those directly hired by Seller) in connection with the
preparation and submission to SBDC of the transaction contemplated by this Agreement and other documents relating to the same will be fully and solely borne by Buyer. It is further understood and agreed that Buyer shall bear any and all risk
pertaining to obtaining of the relevant clearance of the antitrust authorities to implementation of the purchase and sale of Shares contemplated hereunder.</P>
<P>
Section 12.2 <U>Governing Law</U>. </P>
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<P align="justify">
This Agreement and the rights and obligations of the Parties hereunder and the transactions contemplated hereby shall be governed by, enforced and interpreted in accordance with the laws of Brazil. </P>
<P>
Section 12.3 <U>Arbitration</U>. </P>
<P align="justify">
any dispute, controversy or claim arising out of or relating to this Agreement ("<U>Dispute</U>") will be solved by arbitration, in accordance with the following provisions: </P>
<P align="justify">
12.3.1 The Dispute will be finally settled under the Rules of Arbitration of the International Chamber of Commerce (the "<U>ICC Rules</U>") in force at the time the Dispute arises.</P>
<P align="justify">
12.3.2 Seller and Buyer shall appoint one arbitrator, and the two party-appointed arbitrators shall designate a third arbitrator ("<U>Arbitral Tribunal</U>"). However, it is hereby agreed that if any Party fails to appoint its arbitrator, such
arbitrator shall be appointed by the Court of Arbitration of the International Chamber of Commerce (the "<U>ICC Court</U>"). In case the two appointed arbitrators fail to appoint the third arbitrator within 30 (thirty) days from the date of their
appointment, upon a written request of each of the parties, the ICC Court will appoint the third arbitrator.</P>
<P align="justify">
12.3.3 The arbitration will be held in the City of S&atilde;o Paulo, Brazil.  The arbitration procedure will be held in English language and in accordance with the Brazilian Law. </P>
<P align="justify">
12.3.4 The Parties elect the courts of the City of S&atilde;o Paulo, State of S&atilde;o Paulo, exclusively for interim or conservatory measures, as provided for in the ICC Rules. </P>
<P align="justify">
12.3.5 The Arbitral Tribunal will render its final award within 12 (twelve) months as of the beginning of the arbitration. This term may be extended for up to 6 (six) months by the Arbitral Tribunal, provided it is justified. </P>
<P align="justify">
12.3.6 Except for attorney&#8217;s fees, which shall be born individually by each Party, all expenses, costs and legal fees will be borne by one or both Parties as determined by the Arbitral Tribunal. </P>
<P align="justify">
12.3.7 The Parties shall keep the confidentiality of each and every information concerning the arbitration. </P>
<P align="justify">
12.3.8 All the Parties to the Agreement shall participate in any arbitration, joining the claimant or the defendant as the case may be. The Parties agree that any order, decision or determination of the Arbitral Tribunal shall be definitely binding.</P>
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<P>
Section 12.4 <U>Entire Agreement</U>.</P>
<P align="justify">
This Agreement, including the Schedules and Exhibits hereto, contains the entire agreement between the Parties with respect to the subject matter hereof and supersedes any prior written or oral agreements,
understandings, representations or warranties between the Parties. </P>
<P>
Section 12.5 <U>Notices</U>.</P>
<P align="justify">
All notices hereunder shall be sufficiently given for all purposes hereunder if in writing and delivered personally, sent by documented overnight delivery service or, to the extent receipt is confirmed, by United States
mail or telecopy to the appropriate address or number as set forth below. </P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD width=10%></TD>
	<TD width=2%></TD>
	<TD></TD>
	</TR>
<TR valign="bottom">
	<TD align=left>12.5.1&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>If to Seller, to:&nbsp;</TD>
	</TR>
<TR>
	<TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Companhia Sider&uacute;rgica Nacional&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Avenida Brigadeiro Faria Lima, 3.400, 20th Floor&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>04538-132, S&atilde;o Paulo, SP, Brazil&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Attention:&nbsp;Mr. Juarez Saliba de Avelar and Mr. Fernando Quintana&nbsp;Merino&nbsp;</TD>
	</TR>

<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Telephone:&nbsp;55 11 3049-7505/7238&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Facsimile:&nbsp;55 11 3049-7140/7212&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>e-mail:&nbsp;<U>juarez.saliba@csn.com.br</U>&nbsp;and&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>fernando.merino@csn.com.br&nbsp;</TD>
	</TR>
<TR>
	<TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>with a copy to:&nbsp;</TD>
	</TR>
<TR>
	<TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Pinheiro Guimar&atilde;es &#8211; Advogados&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Avenida Paulista 1842, 24<SUP>th </SUP>Floor, Torre Norte&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>01310-200, S&atilde;o Paulo, SP, Brazil&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Attention:&nbsp;Francisco Jos&eacute; Pinheiro Guimar&atilde;es and Sergio Ramos&nbsp;Yoshino, Esq.&nbsp;</TD>
	</TR>

<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Telephone: 55 11 4501-5000&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Facsimile:&nbsp;55 11 4501-5025&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>e-mail:&nbsp;<U><font color="#0000FF">fjpg@pinheiroguimaraes.com.br</font> </U>and&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left><font color="#0000FF"><U>sramos@pinheiroguimaraes.com.br</U>&nbsp;</font></TD>
	</TR>
<TR>
	<TD colspan=3>&nbsp;</TD></TR>
<TR>
	<TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>12.5.2&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>If to Buyer, to:&nbsp;</TD>
	</TR>
<TR>
	<TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Big Jump Energy Participa&ccedil;&otilde;es S.A.&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Rua da Consola&ccedil;&atilde;o, 247, 3<SUP>rd </SUP>Floor, Room 85A&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>01031-903, S&atilde;o Paulo, SP, Brazil&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Attention:&nbsp;Chief Executive Officer&nbsp;</TD>
	</TR>
</TABLE>
<BR>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B></P>

<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_54"></A>

<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD width=10%></TD>
	<TD width=2%></TD>
	<TD></TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Telephone:&nbsp;55 11 3170-8509&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Facsimile:&nbsp;55 11 3170-8549&nbsp;</TD>
	</TR>
<TR>
	<TD>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD>&nbsp;</TD>
  </TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>with a copy to:&nbsp;</TD></TR>
<TR>
	<TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Machado, Meyer, Sendacz e Opice Advogados&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Avenida Brigadeiro Faria Lima, 3144, 11<SUP>th </SUP>Floor&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>01451-000, S&atilde;o Paulo, SP, Brazil&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Attention:&nbsp;Jos&eacute; Ribeiro do Prado J&uacute;nior e Arthur B. Penteado, Esq.&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Telephone:&nbsp;55 11 3150-7000&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Facsimile:&nbsp;55 11 3150-7010&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>e-mail:&nbsp;<U><font color="#0000FF">jprado@mmso.com.br</font> </U>and <U>apenteado@mmso.com.br</U>&nbsp;</TD>
	</TR>
<TR>
	<TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>12.5.3&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>If to Guarantors, to:&nbsp;</TD></TR>
<TR>
	<TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Itochu Corporation&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>5-1, Kita-Aoyama 2-Chome, Minato-ku&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Tokyo, 107-8077, Japan&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Attention:&nbsp;Mr. Yasuhiro Miyata&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Telephone:&nbsp;81 3 3497-3365&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Facsimile:&nbsp;81 3 3497-3342&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>e-mail:&nbsp;tokko@itochu.com.jp&nbsp;</TD>
	</TR>
<TR>
	<TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>JFE Steel Corporation&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>2-3, Uchisaiwai-cho 2-chome Chiyoda-ku&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Tokyo 100-0011, Japan&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Attention:&nbsp;Mr.Takashi Maeno&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Telephone:&nbsp;81 3 3597-3666&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Facsimile:&nbsp;81 3 3595-3620&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>e-mail:&nbsp;<U><font color="#0000FF">t-maeno@jfe-steel.co.jp</font></U><font color="#0000FF">&nbsp;</font></TD>
	</TR>
<TR>
	<TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Nippon Steel Corporation&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>6-3 Otemachi 2-chome Chiyoda-ku&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Tokyo 100-8071, Japan&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Attention:&nbsp;Mr. Masahiro Saitoh&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Telephone:&nbsp;81 3 3275-5491&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Facsimile:&nbsp;81 3 3275-5952&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>e-mail:&nbsp;<U><font color="#0000FF">saitoh.masahiro1@nsc.co.jp</font></U><font color="#0000FF">&nbsp;</font></TD>
	</TR>
<TR>
	<TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Sumitomo Metal Industries, Ltd.&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>8-11, Harumi 1-chome, Chuo-ku&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Tokyo 104-6111, Japan&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Attention:&nbsp;Mr. Shigeki Yamaguch&nbsp;</TD>
	</TR>
</TABLE>
<BR>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B></P>

<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_55"></A>

<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD width=10%></TD>
	<TD width=2%></TD>
	<TD></TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left> &nbsp;Telephone:&nbsp;81 3 4416-6246&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left> &nbsp;Facsimile:&nbsp;81 3 4416-6670&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left> &nbsp;e-mail:&nbsp;<U><font color="#0000FF">yamaguch-sgk@sumitomometals.co.jp</font></U><font color="#0000FF">&nbsp;</font></TD>
	</TR>
<TR>
	<TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left> &nbsp;Kobe Steel, Ltd.&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left> &nbsp;9-12, Kita-Shinagawa 5-chome, Shinagawa-ku&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left> &nbsp;Tokyo, 141-8688, Japan&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left> &nbsp;Attention:&nbsp;Mr. Hiroshi Tanaka&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left> &nbsp;Telephone:&nbsp;81 3 5739-6122&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left> &nbsp;Facsimile:&nbsp;81 3 5739-6930&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left> &nbsp;e-mail:&nbsp;<U>tanaka.hiroshi@kobelco.com</U>&nbsp;</TD>
	</TR>
<TR>
	<TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left> &nbsp;Nisshin Steel Co., Ltd.&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left> &nbsp;4-1, Marunouchi 3-chome, Chiyoda-ku&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left> &nbsp;Tokyo, 100-8366, Japan&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left> &nbsp;Attention:&nbsp;Mr. Ryoji Nunoya&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left> &nbsp;Telephone:&nbsp;81 3 3216-5528&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left> &nbsp;Facsimile:&nbsp;81 3 3216-5539&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left> &nbsp;e-mail:&nbsp;<U><font color="#0000FF">n03962@nisshin-steel.co.jp</font></U><font color="#0000FF">&nbsp;</font></TD>
	</TR>
<TR>
	<TD>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD>&nbsp;</TD>
  </TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left> &nbsp;POSCO Iron Ore Procurement Group&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left> &nbsp;POSCO Center 23 F&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left> &nbsp;Daechi-4dong, Gangnam-gu,&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left> &nbsp;Seoul, 135-777, Korea&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left> &nbsp;Attention :&nbsp;Mr. Myung Deuk Seo / Group Leader&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left> &nbsp;Telephone:&nbsp;82 2 3457-0306&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left> &nbsp;Facsimile:&nbsp;82 2 3457-1908&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left> &nbsp;e-mail:&nbsp;<U><font color="#0000FF">mdseo@posco.com</font></U><font color="#0000FF">&nbsp;</font></TD>
	</TR>
<TR>
	<TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left> &nbsp; &nbsp;with a copy to:&nbsp;</TD></TR>
<TR>
	<TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left> &nbsp;Machado, Meyer, Sendacz e Opice Advogados&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left> &nbsp;Avenida Brigadeiro Faria Lima, 3144, 11<SUP>th </SUP>Floor&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left> &nbsp;01451-000, S&atilde;o Paulo, SP, Brazil&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left> &nbsp;Attention:&nbsp;Jos&eacute; Ribeiro do Prado J&uacute;nior and Arthur B. Penteado,&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left> &nbsp;Esq.&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left> &nbsp;Telephone:&nbsp;55 11 3150-7000&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left> &nbsp;Facsimile:&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left> &nbsp;e-mail:&nbsp;<U><font color="#0000FF">jprado@mmso.com.br</font> </U>and <U><font color="#0000FF">apenteado@mmso.com.br</font></U><font color="#0000FF">&nbsp;</font></TD>
	</TR>
<TR>
	<TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>12.5.4&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD>If to the intervening parties:&nbsp;</TD></TR>
<TR>
	<TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left> &nbsp;Nacional Min&eacute;rios S.A.:&nbsp;</TD></TR>
</TABLE>
<BR>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B></P>

<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_56"></A>

<TABLE border=0 width=100% align="center" cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD width=10%></TD>
	<TD width=2%></TD>
	<TD></TD>
	</TR>
<TR valign="bottom">
	<TD colspan=3 align=left>Alameda da Serra, 400, 9<SUP>th </SUP>Floor&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD colspan=3 align=left>34.000-000, Nova Lima, MG, Brazil&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>Attention:&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Mr. Ricardo Abramof and Mr. Adherbal Guimar&atilde;es R&ecirc;go&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Telephone:&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>55 31 3269-1410&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>Facsimile:&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>55 31 3269-1414&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>e-mail:&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left><U><font color="#0000FF">adherbal.rego@csn.com.br</font></U>&nbsp;and&nbsp;<u><font color="#0000FF">ricardo.abramof@csn.com.br</font></u><font color="#0000FF">&nbsp;</font></TD>
	</TR>

<TR>
	<TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD colspan=3 align=left>Brazil Japan Iron Ore Corporation:&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD colspan=3 align=left>5-1, Kita-Aoyama 2-chome, Minato-ku&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD colspan=3 align=left>Tokyo 107-8077, Japan&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>Attention:&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Mr. Yasuhiro Miyata&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>Telephone:&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>81 3 3497-3365&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>Facsimile:&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>81 3 3497-3342&nbsp;</TD>
	</TR>
<TR valign="bottom">
	<TD align=left>e-mail:&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left><U><font color="#0000FF">miyata-ya@itochu.co.jp</font></U><font color="#0000FF">&nbsp;</font></TD>
	</TR>
</TABLE>
<BR>
<P align="justify">
or to such other address or addresses as the Parties may from time to time designate as to itself by like notice. </P>
<P align="justify">
Notice given by overnight delivery service or Brazilian mail shall be effective upon actual receipt.  Notice given by telecopy shall be effective upon actual receipt if received during the recipient's normal business
hours, or at the beginning of the recipient's next Business Day after receipt if not received during the recipient's normal business hours. All notices by telecopy shall be confirmed by the Party giving such notice promptly after transmission in
writing by certified mail or overnight delivery to the recipient Party. </P>
<P>
Section 12.6 <U>Parties in Interest; Assignment</U>.</P>
<P align="justify">
Neither Party shall assign or delegate (in whole or in part) its rights or obligations under this Agreement without the prior written consent of the other Party, which consent shall not be unreasonably withheld, delayed
or conditioned; provided, however, that after Closing each of the Parties may assign all of its rights and obligations under this Agreement without the prior written consent of the other Parties to one or more of its shareholders in case of any
merger or amalgamation involving Buyer and the Company as provided by the Shareholders' Agreement. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns and shall be
enforceable by the Parties hereto and their respective successors and permitted assigns.</P>
<P>
Section 12.7 <U>Amendments and Waivers</U>.</P>
<P align="justify">
This Agreement may not be modified or amended except by an instrument in writing signed by each of the Parties. Seller may waive compliance by Buyer, and Buyer may waive compliance by Seller, with any term or provision
of
this Agreement on the part of such Party to be performed or complied with only by an instrument in writing. The waiver by a Party of a breach of any term or provision of this Agreement shall not be construed as a waiver of any subsequent breach. </P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B></P>

<HR SIZE="2" NOSHADE COLOR="#000000" ALIGN="left">

<H5 align="left" style="page-break-before:always"></H5>
<A name="page_57"></A>

<P align="justify">Section 12.8 <U>Schedules and Exhibits</U>.</P>
<P align="justify">
All Schedules and Exhibits hereto that are referred to herein are hereby made a part hereof and incorporated herein by such reference. The specification of any Dollar amount in the representations and warranties
contained in this Agreement or the inclusion of any specific item in the Schedules is not intended to imply that such amounts (or higher or lower amounts) are or are not material, and no Party shall use the fact of the setting of such amounts or the
fact of the inclusion of any such item in the Schedules in any claim, dispute or controversy as to whether any obligation, item or matter not described herein or included in a Schedule is or is not material for purposes of this Agreement. No events,
changes, circumstances, developments, effects or states of facts occurred prior to the date hereof shall be added as updates in the Schedules after the date hereof. Non-material events, changes, circumstances, developments, effects or states of
facts shall not be added as updates in the Schedules after the date hereof, provided, however, that Schedules relating to representations which are not qualified by the word "material" or the expression "Material Adverse Effect" may be updated with
non-material events, changes, circumstances, developments, effects or states of facts. </P>
<P>
Section 12.9 <U>Agreement for the Parties' Benefit Only; Non-Recourse</U>.</P>
<P align="justify">
Except as otherwise specified herein, which are also intended to benefit and to be enforceable by the Seller Indemnified Parties and the Buyer Indemnified Parties, as applicable, this Agreement is not intended to confer
upon any Person not a party hereto, other than the Parties' successors or permitted assigns, any rights or remedies hereunder, and no Person other than the Parties, their successors or permitted assigns is entitled to rely on any representation,
warranty, covenant or agreement contained herein.  No past, present or future director (<I>membro do conselho de administra&ccedil;&atilde;o</I>), officer (<I>diretor</I>), employee, incorporator, member, partner (<I>s&oacute;cio</I>), stockholder,
Affiliate, agent, attorney or Representative of Buyer or Seller, respectively, shall have any Liability for any obligations or Liabilities of Buyer or Seller (as the case may be) under this Agreement or for any claim based on, in respect of, or by
reason of, the transactions contemplated hereby, except for fraud or as otherwise provided by Brazilian Law. </P>
<P>
Section 12.10 <U>Severability</U>.</P>
<P align="justify">
If any term or other provision of this Agreement shall be held invalid, illegal or incapable of being enforced by any Applicable Law or public policy by a court of competent jurisdiction, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to a Party. Upon such determination by a court of competent jurisdiction that any term or other provision is invalid, illegal or
incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to give effect to the original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions contemplated
hereby are fulfilled to the extent possible. </P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B></P>

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<P align="justify">Section 12.11 <U> Conversion of Amounts</U>.</P>
<P align="justify">
12.11.1 Except as set forth in Section 12.11.2, the conversion of amounts in Reais into Dollars, and in Dollars into Reais, for the purpose of any payment obligation under this Agreement, shall use PTAX (as defined below) applicable at the close of
the business of the day that is 2 (two) Business Days prior to the relevant calculation or payment date (as the case may be). If no PTAX value is available on such date, PTAX value shall be replaced by the exchange rate freely practiced in the
financial market. "<U>PTAX</U>" means the ask rate which means the Brazilian Reais&#8217;s bid and Dollar&#8217;s ask rate, expressed as the amount of Brazilian Reais per one Dollar, published by the Central Bank of Brazil on SISBACEN Data System
under transaction code PTAX-800, Option 5, "<I>Venda</I>" by approximately 6:00 p.m., S&atilde;o Paulo time. </P>
<P align="justify">
12.11.2 The conversion of amounts in Dollars into Reais for the purpose of the payment of the Investment as per Article 2 and 3 shall use such conversion rate as reasonably determined by Seller; provided, however, that the following procedure shall
apply:</P>
<P align="justify">
(a) Within 5 (five) Business Days after the Agreement to Closing or (if Section 4.1.2 shall apply) no later than 5 (five) Business Days before November 28, 2008, the Japanese SPC and Posco shall cause the Investment (plus any applicable amount
relating to deduction or withholding for Taxes imposed under Applicable Law so that the net Converted Amount (as defined below) is equal to the Investment amount) to be deposited in Dollars, on a pro rata basis based on their direct shareholdings in
Buyer, into their Dollars accounts held at such Bank in the City of New York ("<U>New York Bank</U>"), as designated by the Japanese SPC and Posco and approved by Seller (the amount to be so deposited shall be referred to as the "Deposited Amount"),
<U>provided</U>, <U>however</U>, that such approval of Seller shall not be unreasonably withheld. Immediately after confirmation of such deposit, but in any event no later than 5 (five) Business Days after the Agreement to Closing or no later than 5
(five) Business Days before November 28, 2008, as applicable, Buyer shall notify Seller in writing of that effect (the "<U>Deposit Notice</U>"). </P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B></P>

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(b) After the receipt by Seller of the Deposit Notice and in any event within 3 (three) Business Days after such Deposit Notice, Seller shall, on behalf of the Buyer and at the cost and expense of Buyer (including any applicable Tax and banking
fees), cause the conversion of the Deposited Amount into Reais through a first tier financial institution in Brazil selected by Seller and approved by Buyer, at such applicable conversion rate in effect and transfer, on behalf of the Buyer, the
converted Reais into the Reais account of the Buyer held at a Bank in Brazil, as designated by Buyer, <U>provided</U>, <U>however</U>, that such approval of Buyer shall not be unreasonably withheld.  The aggregate of all such converted Reais amount
shall be the "<U>Converted</U> <U>Amount</U>". Seller shall notify in writing Buyer once all of the conversion has been completed (the "<U>Conversion Notice</U>"). The Closing shall be held on the date that is 2 (two) Business Days after the receipt
of the Conversion Notice. </P>
<P align="justify">
(c) For the purpose of Seller determining and agreeing the applicable conversion rate on behalf of the Japanese SPC and Posco, the Japanese SPC and Posco hereby authorize Seller to so determine and agree after the receipt by Seller of the Deposit
Notice and in any event before the Closing Date, and shall timely provide Seller with the relevant power of attorneys and other applicable documents as reasonably requested by Seller. At the Closing, Buyer shall remit (i) a portion of the Converted
Amount corresponding to the Acquired Shares Price to the bank account determined by Seller as provided in Section 2.2.1, and (ii) the remaining portion of the Converted Amount corresponding to the New Shares Price to the bank account determined by
the Company as provided in Section 3.1.2.</P>
<P align="justify">
(d) For the purpose of settling any potential Positive or Negative Difference of Acquired Shares Price and Positive or Negative Difference of New Shares Price, the conversion rate shall be the weighted average of all conversion rates applied in the
conversion process as set forth in Section 12.11.2(b) above. </P>
<P align="justify">
(e) All notices under this Section shall be timely provided by each of the Parties in compliance with the deadlines for Closing as provided in Sections 4.1.1 and 4.1.2, as applicable. </P>
<P align="justify">
(f) Notwithstanding anything to the contrary herein, Buyer's payment
obligation with respect to the Investment will only be deemed accomplished upon deposit of the applicable amounts in the accounts specified by Seller and the Company in the <u>Schedule 2.2.1</u> and <u>Schedule 3.1.2</u>, respectively. </P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B></P>

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<P>Section 12.12 <U>Confidentiality</U><B>.</B></P>
<P align="justify">

Each of the Parties and Guarantors hereto shall maintain the confidentiality on this Agreement, its terms and conditions and any other related information ("<U>Confidential Information</U>"), including, without
limitation, all data and information obtained by any of them pursuant to this Agreement, except for any information which (i) at the time of disclosure, is public information, (ii) after disclosure, is published or otherwise becomes part of the
public domain without any violation of this Agreement by the Parties or Guarantors, (iii) is received by the disclosing Party or Guarantor from a third party, provided that such third party, or any other party from whom such third party received
such information, is not in breach of any confidentiality obligation in respect of such information. In the event that any Party or Guarantor becomes legally obligated (whether by Applicable Law, court order or otherwise) to disclose any of the
Confidential Information, such Party or Guarantor shall (except for any announcements pursuant to <I>Instru&ccedil;&atilde;o CVM</I> N. 358/02, as amended, in which case the relevant Party may disclose such information as it deems to be required
under such regulation) (a) immediately notify the other Parties and/or Guarantors, as applicable, of the existence, terms and circumstances in connection therewith, (b) cooperate with the other Parties and/or Guarantors, as applicable, in the event
that any Party or Guarantor seeks a protective order or other appropriate remedy, (c) furnish only that portion of the Confidential Information which is legally required and (d) exercise its reasonable efforts to attempt that confidential treatment
be accorded to the Confidential Information. The Parties and Guarantors hereby acknowledge that each of them may disclose any Confidential Information, to the extent necessary and permitted by Applicable Law, to any of their respective direct or
indirect shareholder, employee, officer (<I>diretor</I>), attorney, consultant, financial advisor, accountant or other Representative thereof, in compliance with the provisions of this Section 12.12.</P>
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<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>14
<FILENAME>exhibit103.htm
<DESCRIPTION>EXHIBIT 10.3
<TEXT>
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<P align="right"><a href="sidform20f2008a.htm#topexhibit">Table of Contents</a></P>
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<P align="center">
SHAREHOLDERS' AGREEMENT OF <U><br>
N</U><U>ACIONAL </U><U>M</U><U>IN&Eacute;RIOS </U><U>S.A.</U> </P>
<P align="justify">
This Shareholders' Agreement is entered into by and among: </P>
<P align="justify">
I. as parties: </P>
<P align="justify">
COMPANHIA SIDER&Uacute;RGICA NACIONAL, with head offices in the city of Rio de Janeiro, state of Rio de Janeiro, at Rua S&atilde;o Jos&eacute; N. 20, group 1602 (part), enrolled with the Federal Taxpayer's Registry under N. 33.042.730/0001 -04,
herein represented in accordance with its by-laws ("<U>CSN</U>"); and </P>
<P align="justify">
BIG JUMP ENERGY PARTICIPA&Ccedil;&Otilde;ES S.A., with head offices in the city of S&atilde;o Paulo, state of S&atilde;o Paulo, at Rua da Consola&ccedil;&atilde;o, 247, 3<SUP>rd</SUP> Floor, Room 85A, enrolled with the Federal Taxpayer's Registry
under N. 09.431.882/0001 -14, herein represented in accordance with its by-laws ("<U>New Investor</U>"); </P>
<P align="justify">
II. as intervening parties: </P>
<P align="justify">
NACIONAL MIN&Eacute;RIOS S.A., with head offices in the city of Congonhas, state of Minas Gerais, at Logradouro Casa da Pedra, without number, part, enrolled with the Federal Taxpayer's Registry under N. 08.446.702/0001 -05, herein represented in
accordance with its by-laws ("<U>Company</U>"); </P>
<P align="justify">
BRAZIL JAPAN IRON ORE CORPORATION, with its head office at 5-1, Kita-Aoyama 2-chome, Minato-ku, Tokyo 107-8077, Japan, herein represented in accordance with its by-laws  ("<U>Japanese SPC</U>"); and </P>
<P align="justify">
POSCO, with its head office at 892 Daechi 4-dong Gangnam-gu, Seoul, 135-777, Korea, herein represented in accordance with its by-laws ("<U>Posco</U>"). </P>
<P align="justify">
(CSN and the New Investor jointly referred to as "<U>Parties</U>" or "<U>Shareholders</U>" and individually as "<U>Party</U>" or "<U>Shareholder</U>") </P>
<P align="justify">
WHEREAS: </P>
<P align="justify">
(A) the Parties are the owners of all of the shares issued by the Company, including shares transferred to the members of the Board of Directors appointed by each Shareholder;</P>
<P align="justify">
(B) the New Investor will be merged into the Company or the Company will be merged into the New Investor, resulting that, in any case, the Japanese SPC and Posco will become direct shareholders' of the Company; and </P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B></P>

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(C) by means of this agreement, the Parties intend to agree upon principles, procedures and rules which shall govern their relationship as shareholders of the Company; </P>
<P align="justify">
NOW, THEREFORE, the Parties and the intervening parties agree to enter into this shareholders' agreement ("<U>Shareholders' Agreement</U>"), which shall be governed by the following provisions: </P>
<P align="justify">
SECTION I. <U>B</U><U>ASIC </U><U>P</U><U>RINCIPLES </U><U>A</U><U>PPLICABLE TO THE </U><U>C</U><U>OMPANY</U> </P>
<P align="justify">
1.1 The Parties shall exercise their voting rights and controlling power so as to ensure that the activities of the Company comply with the following basic principles and premises: </P>
<P align="justify">
(i) the management of the businesses of the Company shall be exercised by capable and experienced professionals, who must be duly qualified to hold their positions;</P>
<P align="justify">
(ii) the strategic decisions of the Company shall procure the growth of its business, the development of new projects, and the maximization of the return of the investment made by its shareholders in compliance with prudent management practices;</P>
<P align="justify">
(iii) the management (<I>administra&ccedil;&atilde;o</I>) of the Company shall always seek high levels of profitability, efficiency and competitiveness pursuant to applicable law; and </P>
<P align="justify">
(iv) basic guiding principles and premises set forth in <U>Exhibit 1.1</U> attached hereto. </P>
<P align="justify">
1.2 The Parties agree and acknowledge that <U>Exhibit 1.1</U> attached hereto constitutes the Long-Term Business Plan (as defined below) of the Company approved by the Parties.  Subject to events not under reasonable control of the Parties, the
Parties agree to cause the Company to construct the production facilities listed on such <U>Exhibit 1.1</U>, including the beneficiation plant and the pellet plants substantially in accordance with those descriptions. </P>
<P align="justify">
1.3 The Parties agree to adopt the draft of the by-laws attached hereto, as amended from time to time from the date hereof, as the by-laws of the Company, the terms and conditions of which are (i) in accordance with the terms and conditions hereof;
and (ii) appropriate to enforce the rights and obligations of the Parties pursuant to this Shareholders&#8217; Agreement ("<U>By-Laws</U>"). </P>
<P align="justify">
1.3.1 If any provision hereof is deemed to be conflicting or otherwise not enforceable vis-&agrave;-vis any provision of the By-Laws, the Parties agree (i) that such
provision of this Shareholders&#8217; Agreement shall prevail over the applicable provision of the By-Laws; and (ii) to cause the Company to hold an Extraordinary Shareholders&#8217; Meeting as soon as reasonably practicable and approve in such
meeting amendments to the By-Laws so that the terms and conditions hereof can be fully enforced by the Parties during all times.</P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B></P>

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<P>SECTION II. <U>S</U><U>HARES </U><U>S</U><U>UBJECT TO THIS </U><U>A</U><U>GREEMENT</U> </P>
<P>
2.1 All shares issued by the Company and owned by the Parties on the date hereof or which may be acquired during the term of this Shareholders' Agreement by any of them in any capacity and in any manner, including all rights inherent to such shares
("<U>Shares</U>"), are subject to this Shareholders' Agreement. </P>
<P>
2.2 Each of CSN and the New Investor hereby represents on the date hereof, and for the remaining term of this Shareholders&#8217; Agreement, that (i) it owns of record and beneficially its Shares that are registered in its respective name in the
Nominative Shares Registry Book of the Company; (ii) its Shares have been duly authorized and validly issued and are fully paid in and nonassessable; (iii) its Shares are free and clear of any and all Liens (as defined below) for the benefit of any
third party, debts or obligations of any nature whatsoever, except for the Liens created pursuant to this Shareholders' Agreement; (iv) except for this Shareholders' Agreement, there are no voting agreements or understandings of any nature involving
its Shares for the benefit of any third party; and (v) there is no pending Action (as defined below) which may in any way, directly or indirectly, involve its Shares. For the purposes of this Shareholders&#8217; Agreement, (a) "<U>Lien</U>" means
any lien (<I>gravame</I>), pledge (<I>penhor</I>), usufruct, security interest (any <I>direito real</I> <I>de garantia</I> including, but not limited to, <I>aliena&ccedil;&atilde;o fiduci&aacute;ria</I>), charge, claim, mortgage, deed of trust,
option, call, warrant, purchase right, lease, priority rights, preemptive rights, rights of first refusal, purchase preference rights, commitments, rights of conversion, rights to exchange, transfer restrictions of any nature, or other agreements or
commitments, of any nature, providing for the purchase, issuance, or sale of securities, voting trusts, stockholder agreements, proxies or other agreements or understandings in effect with respect to any rights attributable to securities, or any
other encumbrance (<I>gravame</I>) whatsoever, and (b) "<U>Action</U>" means any litigation, action, suit, proceeding, condemnation, investigation, judicial or administrative claim, or audit commenced, brought or conducted by, before or with any
court or governmental authority, or any arbitration proceeding. </P>
<P>
2.3 Notwithstanding the provisions of Section III and Section IV below, in the event a Party is authorized to make a Direct Transfer (as defined below) of its Shares to a third party, such Direct Transfer will not be valid until the acquirer adheres
in writing to this Shareholders' Agreement and, in case CSN is the transferor, CSN complies with its obligations under Section 15.3.1. </P>
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2.4 Unless such act is carried out with the prior written consent of all Parties, no Party shall be permitted to create a Lien, directly or indirectly, on its Shares to secure any of its obligations or those of any third party. </P>
<P align="justify">
2.5 The Parties agree that any and all Direct Transfers of Shares are hereby prohibited, except</P>
<P align="justify">
(i) for direct purchases and sales of the Shares in accordance with Section III (Right of First Refusal),</P>
<P align="justify">
(ii) transfer of Shares from [&#149;] to [&#149;]<SUP>1</SUP> as a result of the Downstream Merger (as defined in Section 9.4),</P>
<P align="justify">
(iii) after consummation of the Downstream Merger or Upstream Merger (as defined in Section 9.4.3), as the case may be, Direct Transfer of all or part of the Shares held by Posco to any third party, provided, however, that (1) Japanese SPC, one or
more shareholders of the Japanese SPC (on the date hereof) and/or Posco shall hold, directly or indirectly, [&#149;]% [&#149;] of all Shares held by the New Investor on the date hereof, (2) such acquiring person adheres to this Shareholders'
Agreement, and (3) be considered jointly with the Japanese SPC as one single Party for any and all purposes hereunder;</P>
<P align="justify">
(iv) Direct Transfer of Shares by and between Japanese SPC and Posco;</P>
<P align="justify">
(v) Direct Transfer of Shares between a Party and any entity directly or indirectly Controlled by such Party, provided that (i) the transferring Party is, during all times, the direct and/or indirect owner of at least [&#149;]% [&#149;] of voting
and total capital stock of the acquirer, which shall remain during all times as the direct holder of all acquired Shares, and (ii) the acquirer adheres in writing to this Shareholders' Agreement, becoming a Party hereto and undertaking to comply
with all obligations set forth herein; provided, however, that the transferring Party shall remain jointly and severally liable with respect to the obligations (including transfer restrictions) provided in this Shareholders' Agreement; and </P>
<P align="justify">
(vi) as expressly provided for in Sections IV (Tag Along Rights), X (Put and Call &#8211; Disagreement) and XV (Put and Call &#8211; Default under the
Shareholders&#8217; Agreement and the Operational Agreements) (each such permitted Direct Transfer a "<u>Permitted Transfer</u>").</P>
<P align="justify">____________________<br>
<SUP>1</SUP>Text marked as [&#149;] denotes CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. </P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B></P>

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<P align="justify">2.5.1 For the purposes of this Shareholders' Agreement, "<U>Direct Transfer</U>" shall mean any direct sale, transfer, assignment, exchange, donation, increase of the capital stock of a company with, disposal of,
cancellation or replacement of the Shares, with or without consideration therefor, foreclosure on a pledge (<I>excuss&atilde;o de penhor ou cau&ccedil;&atilde;o</I>), placement in trust (<I>fideicomisso</I>), or any other transaction (including,
without limitation, any corporate restructuring event, such as spin-off, merger, amalgamation or drop down of assets) which results in the Direct Transfer of ownership of, and/or rights inherent to, the Shares.</P>
<P align="justify">2.5.2 Permitted Transfers may not be used to circumvent any of the provisions of this Shareholders' Agreement, including, but not limited to, the right of first refusal set forth in Section III and the tag along rights
set forth in Section IV. </P>
<P align="justify">
2.6 The Parties agree that any and all indirect sale, transfer, assignment, exchange, donation, increase of the capital stock of a company with, disposal of, cancellation or replacement of the Shares, with or without consideration therefor,
foreclosure on a pledge (<I>excuss&atilde;o de penhor ou cau&ccedil;&atilde;o</I>), placement in trust (<I>fideicomisso</I>), or any other transaction (including, without limitation, any corporate restructuring event, such as spin-off, merger,
amalgamation or drop down of assets) which results in the indirect transfer of ownership of, and/or rights inherent to, the Shares ("<U>Indirect Transfers</U>") are hereby permitted, provided that, in case of any Indirect Transfer by the Japanese
SPC, Posco and/or one or more shareholders of the Japanese SPC (on the date hereof), then Posco and/or one or more shareholders of the Japanese SPC (on the date hereof) shall continue to hold, directly or indirectly, at least, [&#149;]% [&#149;] of
all Shares held by the New Investor on the date hereof. </P>
<P align="justify">
2.7 Any and all Direct Transfers of Shares in accordance with this Shareholders&#8217; Agreement must include all, but not less than all, of the Shares held by a Party, except Direct Transfers under Sections 2.5(iii) and 2.5(iv) . </P>
<P align="justify">
2.8 Nothing contained in this Shareholders&#8217; Agreement shall be interpreted as prohibiting, preventing or otherwise restricting or impairing a change in the corporate ownership structure of (i) CSN or its Controlled companies (other than the
Company and/or its Controlled companies), (ii) shareholders of Japanese SPC (as of the date hereof) and/or (iii) Posco (including a change in Control), and no such change in corporate ownership structure shall give right to any of the rights
provided in Section III (Right of First Refusal) and Section IV (Tag Along Rights). For the purposes of this Shareholders' Agreement, the concept of "<U>Control</U>", "<U>Controlling</U>" or "<U>Controlled</U>", as used with respect to any person,
means direct or indirect ownership of majority of equity interest in such person and/or the possession, directly or indirectly, of the right to direct or cause the direction of the management and
policies of a corporation, limited liability company, partnership, association, or other business entity, whether through ownership of voting securities, by contract or otherwise. </P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B></P>

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<P align="justify">2.9 Notwithstanding anything to the contrary set forth in this Shareholders&#8217; Agreement, (a) CSN acknowledges and agrees that except for Related Party Permitted Transfer, it shall not make any Direct Transfer and/or Indirect Transfer of all or
part of its Shares until the earlier of (i) December 31<SUP>st</SUP>, 2014; or (ii) the completion of the construction of the second Pellet Plant by the Company (as contemplated in <U>Exhibit 1.1</U>) without the prior written consent of the New
Investor; and (b) while CSN, directly or indirectly, is a shareholder of the Company, the New Investor agrees that it shall not make any Direct Transfer and/or Indirect Transfer of all or part of its Shares to <I>Companhia Vale do Rio Doce</I> (or
any of its direct or indirect Controlled companies) or Banco Bradesco S.A. (or any of its direct or indirect Controlled or Controlling companies) at any time during the term of this Shareholders&#8217; Agreement without prior written consent of
CSN.</P>
<P align="justify">
SECTION III. <U>R</U><U>IGHT OF </U><U>F</U><U>IRST </U><U>R</U><U>EFUSAL</U> </P>
<P align="justify">
3.1 In case a Party ("<U>Notifying Party</U>") receives a third party bona fide firm cash offer to sell its Shares ("<U>Third Party Offer</U>"), it shall deliver a written notice ("<U>RoFR</U> <U>Notice</U>") to that effect to the other Party
("<U>Notified Party</U>") containing (i) the Notifying Party's intention to sell its Shares and the name and address of the proposed transferee; (ii) the proposed price for the Shares, which shall consist solely of cash to be paid at the closing of
the proposed sale; (iii) the number of Shares proposed to be transferred, which must include all, but not less than all, of the Shares held by the Notifying Party; and (iv) any other material terms of the Third Party Offer, and give the Notified
Party the right of first refusal to acquire all, but not less than all, of the Shares held by the Notifying Party, as set forth herein. </P>
<P align="justify">
3.1.1 The Party intending to make a Direct Transfer of Shares without having received a Third Party Offer shall negotiate the terms and conditions of such Direct Transfer with the other Party and obtain its prior written consent. </P>
<P align="justify">
3.2 The right of first refusal shall be exercised by means of a written notice ("<U>RoFR Exercise Notice</U>") to be delivered by the Notified Party within [&#149;] days from the date of receipt of the RoFR Notice. In case the Notified Party does not deliver a RoFR Exercise Notice as set forth in this Section within such
[&#149;] day period, the Notifying Party may sell such Shares to the person identified in the RoFR Notice on the same price, terms and conditions set forth in the RoFR Notice. The sale must take place within [&#149;] days from the date of the
receipt of the RoFR Notice. After such period, if the sale does not occur, the Shares subject to the Third Party Offer shall again be subject to the right of first refusal set forth in this Section III. </P>
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3.3 If the Notified Party exercises the right of first refusal as per this Section III, it shall acquire all, but not less than all, of the Shares owned by the Notifying Party, on the same price and terms and conditions set forth in the RoFR
Notice.</P>
<P align="justify">
3.4 If the Notified Party exercises its right of first refusal pursuant to this Section, it may carry out any and all acts and execute any and all documents on behalf of the Notifying Party that may be necessary for the performance of the
transaction contemplated by this Section, including the execution of the Shares Transfer Book of the Company on behalf of the Notifying Party and cause the Company to annotate in the Nominative Shares Registry Book of the Company the transfer of
ownership of the Shares subject to the right of first refusal in the event the Notifying Party fails to do so on the day in which, pursuant to the RoFR Notice, the Direct Transfer of such Shares is deemed to occur.</P>
<P align="justify">
3.5 Upon consummation of the Downstream Merger or the Upstream Merger, as applicable, Posco and the Japanese SPC shall be considered jointly as one single Party for any and all purposes of this Shareholders Agreement.</P>
<P align="justify">
3.6 Any Lien, Direct Transfer or Indirect Transfer of Shares which violates this Shareholders' Agreement shall be null and void and of no effect with respect to the Company or any Party. </P>
<P align="justify">
SECTION IV. <U>T</U><U>AG </U><U>A</U><U>LONG </U><U>R</U><U>IGHTS</U> </P>
<P align="justify">
4.1 Any of the Shareholders will have the right to sell all of its Shares, on the same conditions, including the price per Share, in case of any sale of Shares by another Shareholder, provided that the Shares to be transferred, directly or
indirectly, represent, at least, [&#149;]% [&#149;] Share of the capital stock of the Company. </P>
<P align="justify">4.2 For the exercise of the tag along right set forth in this Section, the transferring Shareholder ("<U>Tag Along Shareholder</U>") must send to the
  other Shareholder a notice to that effect, containing (i) the Shareholder's intention to sell its Shares and the name and address of the proposed transferee; (ii) the proposed consideration for such Shares, which shall consist solely of cash to be
  paid at the closing of the proposed sale; (iii) the number of Shares proposed to be sold, which must include all, but not less than all, of the Shares held by such Party; and (iv) any other material terms of the proposed sale.</P>
<P align="justify">
4.3 The other Shareholder must, within [&#149;] days from the receipt of the notice referred to in Section 4.2 above, inform as to whether it wants to (i) exercise the right of first refusal set forth in Section III above, to purchase all of the
Shares held by the Tag Along Shareholder, at the price per Share set forth in the notice; or (ii) exercise its tag along right as set forth in this Section IV. In case of a negative answer or failure to provide such answer within the term provided
for herein, the </P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B></P>

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Tag Along Shareholder may carry out the sale of all of its Shares on the same conditions as set forth in the notice referred to in Section 4.2 above.</P>
<P align="justify">
4.4 In the event the Tag Along Shareholder fails to carry out the sale in accordance with Section 4.2 above within [&#149;] days from the receipt of the notice set forth in Section 4.2 above, the Tag Along Shareholder must not sell its Shares
without complying again with all the requirements set forth in this Shareholders' Agreement.</P>
<P align="justify">
4.5 The tag along right set forth in this Section IV is not applicable to Permitted Transfers or Indirect Transfers. </P>
<P align="justify">
SECTION V. <U>V</U><U>OTING </U><U>R</U><U>IGHTS</U> </P>
<P align="justify">
5.1 Each Party hereby agrees to exercise its voting rights so as to fully comply with its obligations set forth herein. </P>
<P align="justify">
5.2 Any vote cast by a Party at a shareholders' meeting of the Company in breach of the provisions of this Shareholders' Agreement shall be null and void. </P>
<P align="justify">
SECTION VI. <U>M</U><U>ANAGEMENT OF THE </U><U>C</U><U>OMPANY</U>  </P>
<P align="justify">
6.1 Subject to the terms of Section IX below, the Company shall be managed by a Board of Directors (<I>Conselho de Administra&ccedil;&atilde;o</I>) and a Board of Officers (<I>Diretoria</I>), in accordance with (i) this Shareholders' Agreement; (ii)
the By-Laws; (iii) the resolutions adopted at shareholders' meetings or at the meetings of the Board of Directors, as the case may be; and (iv) the applicable law. </P>
<P align="justify">
SECTION VII. <U>B</U><U>OARD OF </U><U>D</U><U>IRECTORS</U> </P>
<P align="justify">
7.1 Each Party hereby agrees to make the Directors (as defined below) elected pursuant to the terms hereunder to exercise their voting rights and duties so as to fully comply with the obligations set forth herein. </P>
<P align="justify">
7.2 The Board of Directors of the Company shall consist of 9 (nine) members (<I>conselheiros</I>) (each, a "<U>Director</U>") and 9 (nine) alternates, provided, however, that, if CSN holds [&#149;]% [&#149;] of the Shares and the New Investor the
remaining [&#149;]% [&#149;] of the Shares, the Board of Directors shall consist of 10 (ten) members.  The members of the Board of Directors shall be shareholders, may or may not reside in Brazil, and shall be elected by the shareholders at a
shareholders' meeting for a term of 2 (two) years or until his or her successor is appointed and qualified, or until such Director's earlier death, disability, retirement, resignation or removal. Each Director may serve an unlimited number of
consecutive terms.</P>
<P align="justify">
7.3 So long as a Party holds in the aggregate the percentage of the Shares set forth in the first column below, that Party shall be entitled to nominate the number
of Directors set forth in the second column below, and the Shareholders shall take such actions as necessary to cause such nominees to be appointed as Directors.</P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B></P>

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<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <TR>
    <TD></TD>
    <TD width=50%></TD>
  </TR>

  <TR valign="bottom">
    <TD align=center><u>P</u><u>ERCENTAGE OF THE </u><u>S</u><u>HARES</u></TD>
    <TD align=center><u>N</u><u>UMBER OF </u><u>D</u><u>IRECTORS</u><u>*</u></TD>
  </TR>

  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>Less than or equal to [&#149;] </TD>
    <TD align=center>[&#149;] </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>More than [&#149;], but less than [&#149;]</TD>
    <TD align=center> [&#149;] </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>More than or equal to [&#149;], but less than [&#149;]</TD>
    <TD align=center> [&#149;]</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> [&#149;] </TD>
    <TD align=center>[&#149;] </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>More than [&#149;], but less than or equal to [&#149;]</TD>
    <TD align=center> [&#149;] </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>More than
[&#149;], but less than [&#149;]</TD>
    <TD align=center> [&#149;] </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>More than or equal to [&#149;]</TD>
    <TD align=center> [&#149;] </TD>
  </TR>
</TABLE>
<div>* And respective alternate. </div>
<P align="justify">
7.4 The Board of Directors shall appoint one of the Directors as Chairman of the Board of Directors, who shall hold office for the same term as he or she holds office as a Director.  So long as CSN owns not less than [&#149;]% [&#149;] of the
Shares, the Chairman shall be a Director nominated by CSN. In all other cases, the Chairman will be elected by the majority of the members of the Board of Directors.  The Chairman of the Board of Directors shall preside over all meetings of the
Board of Directors. In the event of a tie vote with respect to any matter, the Chairman shall not have an additional deciding or casting vote.</P>
<P align="justify">
7.5 Each of the Parties may request, at any time, the replacement of a member of the Board of Directors appointed by such Party, appointing a new member to be elected under the terms of this Section VII.</P>
<P align="justify">
7.6 The election and replacement of the members of the Board of Directors of the Company as set forth in this Section shall take place at a shareholders' meeting of the Company called for this specific purpose, and the Parties shall vote to elect or
dismiss the Directors and alternates appointed by the Party as indicated in this Section. </P>
<P align="justify">
7.7 In the event a Party no longer has the right to nominate the number of Directors by which it is currently represented on the Board of Directors, (i) the exceeding member(s) of the Board of Directors and respective alternate(s), appointed by such
Party and elected under the terms of this Section shall be automatically prevented from taking part in any decision of the Board of Directors of the Company; (ii) a shareholders' meeting shall be immediately called and held to remove from office the
exceeding member(s) of the Board of Directors and
alternate(s) referred to in item (i) above and to elect new Director(s) and alternate(s) as provided in item (iii) below; and (iii) in order to replace the exceeding member(s) and respective alternate(s) removed from office, each of the Parties
shall appoint the number of members of the Board of Directors and respective alternates for election under the terms of this Section at the shareholders' meeting called as provided in item (ii) above. </P>
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<P align="justify">7.8 Each Party shall, for the purposes of article 146 of Law N. 6,404, of December 15, 1976, as amended, transfer 1 (one) Share to each of the members of the Board of Directors appointed by such Party. A right of usufruct shall be constituted on
such Shares to the benefit of the transferring Party, which shall have the right to repurchase the Shares. For the purposes of this Shareholders' Agreement, the Shares transferred to the members of the Board of Directors under the terms of this
Section 7.8 shall be considered as shares held by the transferring Party. </P>
<P align="justify">
7.9 At all meetings of the Board of Directors, the presence of a majority of Directors, including at least [&#149;] Director nominated by each Party (if such Party has the right to nominate a Director pursuant to this Section VII), shall constitute
a quorum at a duly convened meeting.  If a quorum is not present at any duly convened meeting of the Board of Directors, the Directors present at such meeting may adjourn the meeting and such adjourned meeting shall be reconvened by the Chairman or
any other Director present at such meeting on not less than 7 (seven) business days prior written notice to each Director. At such reconvened meeting, the quorum shall be a majority of Directors, but the presence of at least 1 (one) Director
nominated by each Party shall not be required in order to constitute a quorum.  Notwithstanding the foregoing, if a quorum is not present at such reconvened meeting as a result of the absence of the Director(s) nominated by a Party, the quorum shall
be 1 (one) less than a majority of Directors; provided, however, that in any case no action may be taken at any such reconvened meeting except with respect to the matters set forth in the notice of such reconvened meeting. </P>
<P align="justify">
7.10 Each Director shall be entitled to 1 (one) vote at meetings of the Board of Directors.</P>
<P align="justify">
7.11 Resolutions at meetings of the Board of Directors shall be adopted with the affirmative vote of a majority of the members (or their respective alternates) (other than with respect to Major Decisions) present at any meeting at which there is a
quorum. </P>
<P align="justify">
7.12 The Parties may create, within the jurisdiction of the Board of Directors, other consulting or executive committees, permanent or not, to analyze and give opinions on any matters, as required by the Board of Directors. The members of such
committees, whether shareholders or not, shall have expertise in the areas to be
decided by their committees, being elected by the Board of Directors of the Company.</P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B></P>

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<P align="justify">SECTION VIII. <U>B</U><U>OARD OF </U><U>O</U><U>FFICERS</U> </P>
<P align="justify">
8.1 Except as otherwise agreed by the Parties pursuant to Section 8.3, the Company shall have a senior management team consisting of 6 (six) officers (<I>diretores</I>) (each, an "<U>Officer</U>"), who shall be the Chief Executive Officer, the Chief
Financial Officer, the Chief Operating Officer, the Chief Administrative Officer, the Chief Commercial Officer and the General Counsel. Such executive Officers shall comprise the Board of Officers and shall be responsible for conducting the
day-today management activities and operations of the Company. </P>
<P align="justify">8.2 Each Officer must reside in Brazil, be eligible for the position of managers and shall hold office for a term of 2 (two) years and may serve an unlimited number of consecutive terms;
  provided, however, that any such Officer, if not reappointed by the Board of Directors as a Major Decision in accordance with Section IX, shall tender his or her resignation letter or otherwise be removed by the Board of Directors upon his or her
  completion of each such term. Any such term otherwise shall be terminated by such Officer's earlier death, disability, retirement, resignation or removal. Any Officer may resign at any time upon notice in writing to the Board of Directors. Such
  resignation shall take effect at the time specified in such written notice and, unless otherwise specified therein, no acceptance of such resignation shall be necessary to make it effective. Any Officer may be removed at any time, with or without
  cause, by the Board of Directors.</P>
<P align="justify">
8.3 The appointment of the Officers shall take place at a meeting of the Board of Directors called for this specific purpose and the Directors may only appoint Officers with expertise in the related area, provided that each Party shall have the
right to appoint [&#149;]Officer of the Company, and the New Investor shall have the right to appoint no more than [&#149;] managers for the following areas or departments of the Company: [&#149;]. The position of the Officer to be appointed
pursuant to this Section 8.3 shall be mutually agreed by the Parties.  The right of the Parties to appoint each one Officer of the Company set forth in this Section 8.3 may be exercised at any time during the term of this Shareholders&#8217;
Agreement. For such purposes, the Shareholders shall cause the members of the Board of Directors appointed by each of them to exercise their voting rights in order to comply with the provision of this Section 8.3. </P>
<P align="justify">
SECTION IX. <U>M</U><U>AJOR </U><U>D</U><U>ECISIONS</U> </P>
<P align="justify">
9.1 Notwithstanding any provision to the contrary in this Shareholders' Agreement, the following actions by the Company and/or its Controlled subsidiaries (together with the actions set forth in Section 9.2 below, "<U>Major Decisions</U>") shall be taken by the Company, only with the affirmative vote of [&#149;] Directors of the Company: </P>
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<P align="justify">(i) approval of the annual compensation of each member of (a) the Board of Officers of the Company and (b) of the Board of Directors, Board of Officers or Fiscal Council of any Controlled subsidiaries; </P>
<P align="justify">
(ii) the appointment and removal of any member of (a) the Board of Officers of the Company, subject to Section 8.3 above and (b) the Board of Directors, Board of Officers or Fiscal Council of any Controlled subsidiaries and/or Affiliates of the
Company (to the extent the Company has such rights and may legally exercise such rights with respect to such Affiliates).  For the purposes of this Shareholders Agreement, "<U>Affiliate</U>" means as to the person specified, any person in which the
Company has an equity interest of, at least, [&#149;]% [&#149;] and less than [&#149;]% [&#149;] of the total capital stock; </P>
<P align="justify">(iii) approval of any amendment or change in any condition of the operational agreements of the Company and/or its
  Controlled subsidiaries (including the following agreements as defined in the SPA (defined below in Section 9.3): [&#149;] (being (i) to (viii) collectively "<U>Operational Agreements</U>") and (ix) [&#149;], provided that the Directors appointed by
  CSN shall not have the right to vote in any such resolution if CSN has breached such operational agreements and has not cured such breach within the applicable grace period, in which case the Major Decision shall be taken by Company with the
  affirmative vote of all the remaining Directors;</P>
<P align="justify">
(iv) any decision involving (a) existing or future mining rights held, or leased, by the Company (including the transfer of, or liens over, such rights), (b) the Pellet Plants, and (c) any other material assets of the Company and/or its Controlled
subsidiaries; </P>
<P align="justify">
(v) approval of any guarantee, security or indemnification by the Company and/or its Controlled subsidiaries in connection with indebtedness or obligations of any third party;</P>
<P align="justify">
(vi) the appointment of auditors and any and all changes on the accounting policies of the Company and/or its Controlled subsidiaries;</P>
<P align="justify">
(vii) the settlement of any material dispute or lawsuit by the Company and/or its Controlled subsidiaries; and </P>
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(viii) approval, renewal, material modification, or termination of pension plans and other employee benefit plans of the Company and/or its Controlled subsidiaries. </P>
<P align="justify">
9.2 Notwithstanding any provision to the contrary in this Shareholders' Agreement, the following actions shall be taken by the Company and/or its Controlled subsidiaries only with the prior approval of the Shareholders holding more than or equal to
[&#149;]<SUP> </SUP>% [&#149;] of the Shares: </P>
<P align="justify">(i) approval of the annual financial statements, the Long-Term Business Plan, the Mid-Term Business Plan and the Annual Operating Budget (as defined below) and any material amendment thereof; </P>
<P align="justify">
(ii) entry into, modification, renewal or termination of any transaction or agreement or any series of transactions or agreements with a total annual expenditure in excess of US&#36;25,000,000 (twenty-five million dollars) (or its equivalent in
local currency), individually or in the aggregate, except if such action has been expressly approved in conjunction with the relevant Annual Operating Budget without reservation; </P>
<P align="justify">
(iii) incurrence of indebtedness in excess of US&#36;150,000,000 (one hundred and fifty million dollars) (or its equivalent in local currency) at any one time outstanding, except for the Financing Agreements (as defined below) or for such actions
that have been expressly approved in conjunction with the relevant Annual Operating Budget without reservation; </P>
<P align="justify">
(iv) modification, renewal or termination of any of the Financing Agreements; </P>
<P align="justify">
(v) entry into any joint ventures, equity investments in, acquisition of all or substantially all of the assets of another person or entry into, or approval of, any other investment by the Company in excess of US&#36; 20,000,000 (twenty million
dollars), except for the Financing Agreements or if such action has been expressly approved in conjunction with the relevant Annual Operating Budget without reservation; </P>
<P align="justify">
(vi) entry into, modification, renewal or termination of any transaction (including, without limitation, guarantee, security and/or indemnification) or agreement with or involving any Controlled subsidiary or Affiliate of the Company or any
Shareholder (a "<U>Related</U> <U>Party Agreement</U>") or the granting of any waiver, consent or forbearance under any Related Party Agreement, provided that approval of such events shall not be unreasonably withheld; </P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B></P>

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(vii) declaration of dividends and/or interest on capital or the distribution of any surplus or earnings, change in or deviation from the dividend policy of the Company and/or its Controlled subsidiaries, or any decision to retain for capital
expenditure funds otherwise available for distributions of dividends; </P>
<P align="justify">
(viii) any increase of capital stock of the Company and/or its Controlled subsidiaries, or any loan to any Shareholder or Controlled subsidiaries of the Company, except as otherwise agreed by the Shareholders with a written agreement; </P>
<P align="justify">
(ix) any reduction of capital stock, payment of cash or assets to shareholders, or cancellation or issuance or redemption of, shares of capital stock of the Company and/or its Controlled subsidiaries, any rights or warrants exercisable for, or bonds
convertible into, shares of capital stock of the Company and/or its Controlled subsidiaries, except for those shares of capital stock to be issued in accordance with a written agreement among the Shareholders; </P>
<P align="justify">
(x) merger, spin-off, amalgamation or any act of corporate restructuring (including the creation of group of companies), or sale of any material assets, or of a relevant amount of assets of the Company and/or its Controlled subsidiaries; </P>
<P align="justify">
(xi) winding-up, dissolution or liquidation of, or any bankruptcy claim or court reorganization request (<I>pedido de recupera&ccedil;&atilde;o judicial</I>) by the Company and/or its Controlled subsidiaries; </P>
<P align="justify">
(xii) the annual remuneration of each member of the Board of Directors of the Company;</P>
<P align="justify">
(xiii) any increase or decrease in the size of the Board of Directors of the Company or the Board of Officers of the Company, except as otherwise expressly provided herein; and </P>
<P align="justify">
(xiv) any amendments to the By-Laws, including, but not limited to, any change to the management or its respective duties and responsibilities, to the name or to the corporate purposes of the Company and/or its Controlled subsidiaries as set forth
in the By-Laws. </P>
<P align="justify">
9.3 Notwithstanding anything to the contrary provided in Section 9.2 above, each of CSN and the New Investor undertakes to vote in favor of, and cause to be taken the necessary steps to, rectifying the issuance price of the shares newly issued in
connection with the capital increase approved in the extraordinary general
shareholders meeting of the Company held on the date hereof pursuant to Article III of the Share Purchase Agreement and Other Covenants entered into on October 21, 2008, by and among the New Investor, CSN and the Company ("<u>SPA"</u>). </P>
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<P align="justify">9.4 Notwithstanding anything to the contrary provided in Section 9.2 above, each of CSN and the New Investor undertakes to vote in favor of, and cause to be taken the necessary steps to, effect the downstream merger of the New Investor with and into
the Company ("<U>Downstream Merger</U>"), in which the Company will be the surviving entity. The Parties hereby acknowledge and agree that the Downstream Merger shall take place as soon as reasonably practicable, following the date that a notice in
this regard is delivered by the New Investor to the Company and CSN. Each of CSN and the New Investor undertakes to cooperate and endeavor its best efforts to consummate the Downstream Merger as soon as reasonably possible following the referred
notice from the New Investor. Upon the consummation of the Downstream Merger, the Japanese SPC and Posco shall become Parties to this Shareholders&#8217; Agreement as successors of the New Investor, provided, however, that the Japanese SPC and Posco
shall be considered as one single Party for any and all purposes of this Shareholders&#8217; Agreement. The Downstream Merger shall not in any way result in changes to the current percentage of capital stock of the Company held by each of the
Parties. </P>
<P align="justify">
9.4.1 The Parties shall cause the Company to deliver to them, as soon as reasonably practicable but in no event later that December 5<SUP>th</SUP>, 2008, a consolidated balance sheet of the Company prepared in accordance with the Brazilian GAAP, in
Reais, dated as of November 30, 2008. </P>
<P align="justify">
9.4.2 New Investor shall (i) obtain and deliver to the Company, as soon as reasonably practicable but in no event later that December 5<SUP>th</SUP>, 2008, the tax clearance certificates of the New Investor issued by (i) the Brazilian social
security authority ("<U>INSS</U>") (<I>Certid&atilde;o Negativa de D&eacute;bito junto ao INSS emitida pelo Instituto Nacional de Seguro Social)</I>; (ii) the Brazilian unemployment guarantee fund ("<U>FGTS</U>") (<I>Certificado de Regularidade do
FGTS emitido pela Caixa Econ&ocirc;mica Federal</I>); and (iii) the Brazilian federal tax authorities (<I>Certid&atilde;o Negativa de D&eacute;bito de Tributos e Contribui&ccedil;&otilde;es para com a Fazenda Nacional emitida pela Receita Federal
</I>and<I> Certid&atilde;o Negativa de Inscri&ccedil;&atilde;o de D&iacute;vida Ativa da Uni&atilde;o emitida pela Procuradoria Geral da Fazenda Naciona</I>l); provided that all such certificates shall be valid at least for additional 30 (thirty)
days as from their presentation by the Company to the Parties and (ii) prepare and deliver to the Company the appraisal report of New Investor and such other documents necessary to permit the Company to implement the Downstream Merger as provided in
Section 9.3 above, in accordance with the provisions of Law N. 6,404, of December 15, 1976, as amended. </P>
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9.4.3 In case the Downstream Merger is not consummated by December 31, 2008, each of CSN and the New Investor undertakes to vote in favor of, and cause to be taken the necessary steps to, effect an upstream merger, rather than Downstream Merger, in
which the Company will be merged into the New Investor, so that the New Investor will be the surviving entity ("<U>Upstream Merger</U>"). Upon the consummation of the Upstream Merger as described herein, (i) any reference to Company shall take into
consideration the Company as merged into the New Investor and, as a result, this Shareholders&#8217; Agreement will remain in force in respect of the shares issued by the New Investor, as successor of the Company hereunder, and (ii) the Japanese SPC
and Posco shall become Parties to this Shareholders&#8217; Agreement, as direct shareholders of the New Investor, provided, however, that the Japanese SPC and Posco shall be considered as one single Party for any and all purposes of this
Shareholders&#8217; Agreement. For the avoidance of doubt, upon the Upstream Merger the Japanese SPC and Posco shall, jointly, as one single party, be assignees of the New Investor hereunder. The Upstream Merger shall not in any way result in
changes to the current percentage of capital stock of the Company held by each of the Parties.</P>
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9.5 If the Board of Directors or the Shareholders are unable to reach a joint decision and to cast the necessary votes to approve a Major Decision ("<U>Major</U> <U>Decision Disagreement</U>"), any Shareholder holding more than or equal to 40%
(forty percent) of the Shares may notify the other Shareholder and the Board of Directors (any such notice, a "<U>Disagreement Notice</U>"), and the Shareholders shall cause such unresolved matter to be referred to 2 (two) mediators, appointed by
each of CSN and the New Investor ("<U>Mediators</U>"), who shall attempt to identify possible solutions and to settle the matter within 30 (thirty) days following the date of the Disagreement Notice. If the Mediators fail to reach an agreement
within such period, or if any Shareholder fails to select and appoint its Mediator within 5 (five) days from the date of the Disagreement Notice, the Shareholders shall cause the Major Decision Disagreement to be referred to the Chief Executive
Officer of CSN and to the senior representative appointed by the New Investor for this purposes, who shall attempt to identify possible solutions and settle the matter within [&#149;] days following the date of the Disagreement Notice
("<U>Disagreement Term</U>"). </P>
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SECTION X. <U>P</U><U>UT AND </U><U>C</U><U>ALL </U><U>-</U><U> </U><U>D</U><U>ISAGREEMENT</U> </P>
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10.1 If the Shareholders cannot resolve a Major Decision as described in the Major Decision Disagreement, then: </P>
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(i) within [&#149;] days following the Disagreement Term ("<U>Exercise Period</U>") (x) the New Investor may elect to give written notice to CSN designating to sell all, but not less than all, of its Shares to CSN ("<U>Put</U> <U>Option &#8211;
Deadlock</U>"), and/or (y) CSN may elect to give written notice to New Investor designating to purchase all, but not less than all, of the
Shares held by New Investor ("<u>Call Option &#8211; Deadlock</u>"), provided that both Put Option &#8211; Deadlock and Call Option &#8211; Deadlock shall be exercised at a price per Share equal to (a) the Fair Market Value of the Company (as
defined in Section 15.4 below) divided by (b) the total number of the outstanding shares issued by the Company ("<u>Exercise</u> <u>Price per Share</u>"), or, alternatively, </P>
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<P align="justify">(ii) in case there are reasonable evidences that the Major Decision Disagreement was caused by a Shareholder ("<U>Challenged</U> <U>Shareholder</U>") that is not acting in good faith or in compliance with the basic principles set forth in Section
1.1 ("Improper Behavior"), the other Shareholder ("<U>Challenging Shareholder</U>") may, within [&#149;] days following the Disagreement Term, refer the matter to an Arbitral Tribunal (as defined in Section XIX), which shall determine whether or not
there was Improper Behavior by the Challenged Shareholder. In case the Arbitral Tribunal determines that the Challenged Shareholder acted with Improper Behavior, the Challenging Shareholder shall have the right to individually approve such Major
Decision matter subject to the Major Decision Disagreement. In case the Arbitral Tribunal determines there was no Improper Behavior by the Challenged Shareholder (a) the New Investor may elect to give written notice to CSN, within [&#149;] days from
the issuance of the final Arbitral Tribunal award, exercising its Put Option &#8211; Deadlock, and/or (b) CSN may elect to give written notice to New Investor, within [&#149;] days from the issuance of the final Arbitral Tribunal award, exercising
its Call Option &#8211; Deadlock. Both Put Option &#8211; Deadlock and Call Option &#8211; Deadlock shall be exercised at the Exercise Price per Share. </P>
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10.1.1 The provisions of Section 19.11 below shall be applicable to the arbitration procedure set forth in Section 10.1(ii) above. </P>
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10.1.2 Notwithstanding anything to the contrary, until the final arbitral award with respect to the matters referred to in Section 10.1(ii) is granted, (i) the related Put Option &#8211; Deadlock and Call Option &#8211; Deadlock rights are
suspended; and (ii) the Parties shall cause the Company to conduct its activities in the ordinary course of business. </P>
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10.2 The Parties agree that any Major Decision Disagreement shall be subject to the provisions of Section 10.1, except for the following matters:</P>
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(i) [&#149;]; </P>
<P align="justify">(ii) [&#149;]; </P>
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(iii) [&#149;]; </P>
<P>(iv) [&#149;]; </P>
<P>(v) [&#149;]; </P>
<P>(vi) [&#149;]; and</P>
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(vii) [&#149;]. </P>
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10.2.1 The Parties agree that the Party presenting, or causing to be presented, at any shareholders' meeting, a material amendment to either the Long-Term Business Plan or Mid-Term Business Plan, and such amendment is not approved by the Parties
causing a Major Decision Disagreement not resolved in accordance with Section 9.5 above, the Party that presented, or caused to be presented, such amendment shall not be entitled to the Put Option &#8211; Deadlock or the Call Option &#8211; Deadlock
right, as applicable. For the avoidance of doubt, any material changes, amendments and/or updates relating to the review and/or renewal process of the Mid-Term Business Plan, pursuant to Section 11.1 are not subject to the exception of the Put
Option &#8211; Deadlock or Call Option &#8211; Deadlock set forth in this Section 10.2.1, provided that the proposed amendments are generally aligned and in accordance with the Long-Term Business Plan.</P>
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10.3 Unless otherwise agreed by the Parties, the closing of the purchase and sale pursuant to this Section X ("<U>Closing Date</U>") shall take place in Brazil, at the principal place of business of the Company, on or prior to the [&#149;] business
day following the receipt of either the notices provided for in Section 10.1. At Closing Date, (A) CSN shall (i) purchase all, but not less than all, of the Shares held by the New Investor for the Exercise Price per Share; and (ii) irrevocably and
unconditionally replace, until the Closing Date, any and all financial obligations and/or guarantees related to the Company (either personal or <I>in rem</I>) undertaken and/or granted by the New Investor or, in case such immediate replacement is
not allowed by the beneficiary of such financial obligations and/or guarantees, to provide adequate banking counter-guarantees in connection thereto; and (B) the New Investor shall be obligated to deliver to CSN a properly executed assignment of all
of its Shares, free and clear of all Liens, but if the New Investor fails to do so, CSN may execute such assignment on behalf of the New Investor pursuant to the power of attorney described in Section 10.5 below. </P>
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10.4 Notwithstanding the provisions of Section 10.3 above, (i) in case of a Put Option &#8211; Deadlock, CSN shall pay for all Shares held by the New Investor, in immediately available funds in US dollars, the Exercise Price per Share above in 3
(three) equal installments, provided that (a) the first installment shall be paid on the </P>
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Closing Date, and (b) the remaining 2 (two) installments shall be paid annually, one in each of the following 2 (two) anniversaries of the Closing Date and shall be adjusted on an annual basis by the London Inter-Bank Offer Rate - LIBOR plus 1.5%
from the Closing Date until the date of their actual payment, provided that said interest shall accrue on each of the outstanding installments and be fully paid on the date of their respective payment, and (ii) in case of Call Option &#8211;
Deadlock, CSN shall pay for all Shares held by the New Investor, in immediately available funds in US dollars, the Exercise Price per Share in one single installment on the Closing Date. In either case, the transfer of the Shares to be purchased and
sold pursuant to the provisions of this Section X shall occur on Closing Date. </P>
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10.5 For the purposes of Section 10.3 and 10.4 above, the New Investor hereby irrevocably designates and appoints CSN as its lawful attorney-in-fact to execute on behalf of the New Investor any and all documents necessary for the Direct Transfer of
ownership of the Shares to be transferred to CSN pursuant to the provisions of this Section X on the relevant Closing Date, should New Investor fails to do so in accordance with the provisions of this Section X. </P>
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SECTION XI. <U>A</U><U>NNUAL </U><U>O</U><U>PERATING </U><U>B</U><U>UDGET AND </U><U>F</U><U>INANCING </U><U>A</U><U>GREEMENTS</U> </P>
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11.1 The Company's expenditures and business operations shall be made in accordance with (a) a long-term business plan (as modified from time to time in accordance with Section 9.2) attached herein as <U>Exhibit 1.1</U> ("Long-Term Business
<U>Plan</U>"), (b) a mid-term business plan (as modified from time to time in accordance with Section 9.2), which shall comprise a period of 3 (three) years and be subsequently reviewed and renewed for additional periods of 3 (three) years, provided
that the first mid-term business plan shall be adopted on the date hereof, as attached herein in <U>Exhibit 11.1</U>, which comprises a period of 6 (six) years, counted as of the date of its approval, but subject to review after 3 (three) years,
counted as of the date of its approval ("<U>Mid-Term Business Plan</U>") and (c) an annual operating budget (as modified from time to time in accordance with Section 9.2), which shall be adopted not less than 30 (thirty) days following the date
hereof and 30 (thirty) days prior to commencement of each fiscal year as approved by the Shareholders as a Major Decision ("<U>Annual Operating Budget</U>").</P>
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11.1.1 The Parties shall cause the Board of Officers to finish the production of each draft of the subsequent Annual Operating Budget and/or Mid-Term Business Plan, as applicable, at least 3 (three) months prior to the date in which such documents
shall be approved as a Major Decision by the Shareholders. </P>
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11.1.2 All Annual Operating Budgets shall include (i) the Company's business strategy and organizational structure, basic goals, projected revenues, expenses (including the compensation package for each member of the Board of Officers), capital
expenditures, financing plans, insurance, cash flows, appointment of agents
or advisers and strategic alliances, in each case with projections for not less than the next 3 (three) succeeding fiscal years; and (ii) operating projections of the Company for not less than the next 3 (three) succeeding fiscal years. The Annual
Operating Budget shall be based on the Long-Term Business Plan and the Mid-Term Business Plan. </P>
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<P align="justify">11.2 The Parties acknowledge that the Company has entered into (i) [&#149;] and (ii) [&#149;] ("<U>Financing Agreements</U>") and that any modification, renewal or termination of the Financing Agreements is a Major Decision subject to Section IX
above. </P>
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SECTION XII. <U>D</U><U>IVIDEND </U><U>P</U><U>OLICY</U> </P>
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12.1 Subject to applicable law, the By-Laws or any Major Decision of the members of the Board of Directors to retain funds for capital expenditures, the Company shall distribute as dividends or interests over capital of, at least, [&#149;]% [&#149;]
of its annual net profit, calculated pursuant to Law N. 6,404, of December 15, 1976, as amended ("<U>Minimum Dividends</U>"). The Parties hereby represent that the dividend policy of the Company set forth in this Section 12.1 is a legal, valid and
binding obligation of the Parties and the Company. For the avoidance of doubt, the annual net profits of the Company shall be calculated including, without limitation, the results derived from the equity pick-up method in relation to all its
Controlled subsidiaries and/or Affiliates, directly or indirectly, located in Brazil or abroad, in accordance with Brazilian GAAP (as defined below). </P>
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12.1.1 The Shareholders and the management of the Company must ensure that upon approval of the declaration of dividends of the Company by Shareholders pursuant to Section 9.2(vii), the Company shall have funds available for making the full payment
of the dividends declared, including, but without limitation, by means of (i) execution of intercompany loans with its Controlled subsidiaries and/or (ii) receipt of funds deriving from distributions of dividends of its Controlled subsidiaries. </P>
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12.1.2 In case the cash available for distribution as Minimum Dividends is not sufficient for the full payment of such dividends in any given fiscal year, the unpaid portion of the applicable Minimum Dividends shall be allocated to the unrealized
profit reserve (<I>reserva de lucros a realizar</I>) and distributed as dividends to Shareholders as soon as the Company obtains the necessary funds for such payment, in accordance with Law N. 6,404, of December 15, 1976, as amended. </P>
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12.1.3. Upon the Downstream Merger or the Upstream Merger, in case the net profits are adversely affected by the potential amortization of the goodwill, the Shareholders agree to adopt the accounting mechanism prescribed by the Instruction
of the Brazilian Securities and Exchange Commission (<i>Instru&ccedil;&atilde;o da Comiss&atilde;o de Valores Mobili&aacute;rios - CVM</i>) N. 319/99, as amended, in order to prevent that such amortization adversely affects the generation of net
profits. </P>
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<P align="justify">SECTION XIII. <U>A</U><U>CCESS TO </U><U>I</U><U>NFORMATION</U> </P>
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13.1 The Company shall keep or cause to be kept complete and accurate books and records with respect to the business and affairs of the Company in accordance with Brazilian law and in accordance with Brazilian generally accepted accounting
principles ("<U>Brazilian GAAP</U>") as well as in accordance with the United States generally accepted accounting principles ("<U>US GAAP</U>"). The books of the Company shall at all times be maintained by the Board of Officers at the principal
place of business of the Company. </P>
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13.2 Each Shareholder and its duly authorized representatives as well as the members of any auditing firm appointed by a Shareholder pursuant to Section 13.3 below shall have the right to examine the Company's books, records and other documents
during normal business hours upon reasonable advance notice to the Company, provided that Section 19.10 below is duly complied with.</P>
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13.3 Each Shareholder shall have the right to hire an auditing firm, at its own expenses, in order to examine and inspect the Company&#8217;s financial and accounting condition, provided that no additional costs related thereto shall be borne by the
Company or any other Shareholder. </P>
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13.4 The Company shall provide to each Shareholder as soon as available, but in any event no later than 90 (ninety) days after the end of each fiscal year, a copy of the audited balance sheet, profits and losses statement, statements of changes in
shareholders&#8217; equity and cash flow statement (jointly referred to as "<U>Financial</U> <U>Statements</U>") of the Company as at the end of such fiscal year, all in reasonable detail and stating in comparative form the figures as at the end of
and for the previous fiscal year. The Financial Statements shall be prepared, in Portuguese and in English, both in accordance with the Brazilian GAAP and the US GAAP applied on a consistent basis throughout the periods reflected therein, except as
stated otherwise. </P>
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13.5 The Company shall provide to each Shareholder as soon as available, but in any event no later than 45 (forty-five) days after the end of each quarter of each fiscal year, the unaudited Financial Statements as at the end of such quarter and for
the elapsed period in such fiscal year, all in reasonable detail and stating in comparative form the figures as of the end of and for the comparable periods of the preceding fiscal year, and prepared in accordance with the Brazilian GAAP and the US
GAAP and applied on a consistent basis throughout the periods reflected therein,
except as stated otherwise. </P>
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<P align="justify">13.6 CSN agrees to share with the Company, so long the Company remains a shareholder of MRS Log&iacute;stica S.A. ("<U>MRS</U>"), all relevant data and information requested by the Company or by the New Investor in connection with MRS and that CSN
have had access to in its capacity as one of the Controlling shareholder of MRS, to the extent that CSN deems the disclosure of such data or information permitted under Law N. 6404, of December 15, 1976, as amended, under any other applicable law or
regulation, and is not prohibited under any confidentiality arrangement, judicial, regulatory or arbitral decision. </P>
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SECTION XIV. <U>S</U><U>PECIFIC </U><U>P</U><U>ERFORMANCE</U> </P>
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14.1 Failure to comply with any of the obligations set forth herein shall subject the defaulting Party to the available remedies, including, but not limited to, the specific performance of the defaulted obligation. In the event specific performance
is not available and there is no remedy that provides a practical result similar to the satisfaction of the defaulted obligation, it is hereby agreed that indemnification for the losses incurred as a result of the default shall not constitute an
appropriate compensation.</P>
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14.2 Any Party shall have the right to request (i) the Chairman of a shareholders' meeting or the Chairman of the Board of Directors meeting of the Company to declare a vote exercised in breach of a provision of this Shareholders' Agreement null and
void and (ii) the Board of Officers to immediately cancel the registration of any Direct Transfer of Shares in breach of any of the Direct Transfer restrictions imposed by this Shareholders' Agreement, regardless of any judicial or extrajudicial
procedures. </P>
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14.3 Without prejudice to other rights of the non-defaulting Party set forth herein (including, without limitation, the put and call right provided in Section 15.1 below), any Party may seek pursuant to Section 19.11 below: (i) the annulment of a
shareholders' or Board of Directors' meeting that accepts as valid a vote exercised in breach of a provision of this Shareholders' Agreement; (ii) the cancellation of any registration of a Direct Transfer of Shares carried out in violation of any
provision of this Shareholders' Agreement; and (iii) an order that substitutes a shareholders' refusal to vote pursuant hereto or to comply with any of its obligations set forth herein.</P>
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14.4 Any refusal to vote in compliance with this Shareholders' Agreement or abstention to vote shall be subject to the provisions of article 118, paragraph 9 of Law N. 6,404, of December 15, 1976, as amended. </P>
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SECTION XV. <U>P</U><U>UT AND </U><U>C</U><U>ALL </U><U>&#8211;</U><U> </U><U>D</U><U>EFAULT UNDER </U><U>S</U><U>HAREHOLDERS</U><U>&#8217;</U><U> </U><U>A</U><U>GREEMENT</U> <U>AND </U><U>O</U><U>PERATIONAL </U><U>A</U><U>GREEMENTS</U> </P>
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15.1 Without prejudice to the other rights of the Parties provided for herein, upon the occurrence of any breach of any material obligation by any of the Parties under this Shareholders&#8217; Agreement and so long as such breach has not been cured
within 90 (ninety) days as from the date of the delivery of a written notice by the non-defaulting party ("<U>Non-Defaulting Party</U>") to the defaulting party reasonably detailing the nature of such breach, (i) if the New Investor is the Non-Defaulting
Party, New Investor shall have the right, exercisable by delivery of a written notice to CSN within [&#149;] days following the deadline to cure such breach, to sell all, but not less than all, of its Shares to CSN ("<U>Put Option &#8211; Default
SHA</U>") or (ii) if CSN is the Non-Defaulting Party, CSN shall have the right, exercisable by delivery of a written notice to the New Investor within [&#149;] days following the deadline to cure such breach, to purchase all, but not less than all,
of the Shares held by the New Investor ("<U>Call Option &#8211; Default SHA</U>"), provided that both Put Option &#8211; Default SHA and Call Option Default SHA shall be exercised at a price per Share equal to the Exercise Price per Share. Unless
otherwise agreed by the Parties, the closing of such purchase and sale shall take place in accordance with the procedures set forth in Section 10.3 above <I>mutatis mutandis</I> and the aggregate price per Share shall be paid in one single
installment on the closing date of the purchase and sale of the Shares.</P>
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15.2 With respect to certain Operational Agreements listed in Section 9.1(iii), the Parties hereby acknowledge and agree that in the case of a Material Breach by CSN under the (i) [&#149;] occurs, then within [&#149;] days following the delivery of
a written notice provided by the New Investor relevant Party exercising its right ("<U>Notice &#8211;</U> <U>Operational Agreements</U>"), the New Investor may elect to sell all, but not less than all, of its Shares to CSN ("<U>Put Option &#8211;
Operational Agreements</U>"), at the Exercise Price per Share. Unless otherwise agreed by the Parties, the closing of the purchase and sale provided for in this Section shall take place in accordance with Section 10.3 above <I>mutatis mutandis</I>
and the aggregate Exercise Price per Share shall be paid in one single installment on the closing date of the purchase and sale of the Shares.</P>
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15.3 CSN acknowledges and agrees that the Put Option &#8211; Operational Agreements provided for in Section 15.2 above shall be enforceable against CSN during all times while the New Investor remains as a shareholder of the Company.  For the
avoidance of doubt, such put option rights shall not be affected by any event extinguishing or somehow changing the current relationship of the parties as shareholders of the Company, including, but without limitation, (i) the expiration of the term
or termination by any reason of this Shareholders&#8217; Agreement, (ii) any Direct Transfer of Shares by CSN to the New Investor or to a third party, and </P>
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(iii) any direct or indirect assignment of CSN&#8217;s rights under the Operational Agreements. </P>
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15.3.1 CSN agrees that its obligation under Section 15.3 shall be reflected in a separate agreement as a condition of any Direct Transfer of Shares or assignment of its obligations under this Shareholders&#8217; Agreement and/or Operational
Agreements by CSN to a third party.</P>
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15.4 For the purposes of determining "<U>Fair Market Value</U>", the following procedures shall apply: </P>
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15.4.1 Within [&#149;] days following the date of any of the notices referred to in Sections 10.1, 15.1 or 15.2 above, each of the Parties shall select one investment bank of international standing, which shall make an independent valuation of the
fair market value of the Company in US dollars amounts, based on the assumptions set forth in Section 15.4.2. Parties agree that they shall cause such independent valuations to be made up to [&#149;] days following the date of the relevant notice
and shall submit such determination to the other Party.  If the valuations differ by an amount that is 10% (ten percent) or less of the higher valuation, then the fair market value shall be calculated by averaging the independent valuations of the 2
(two) investment banks. If any investment bank&#8217;s valuation exceeds that of the other by more than 10% (ten percent) of the higher valuation, the 2 (two) investment banks shall select a third investment bank, which shall make its own
independent valuation of the Company within [&#149;] days following the date on which both initial valuations have been submitted to the Parties by the initial 2 (two) investment banks. In case the valuation prepared by the third investment bank
falls within the valuations prepared by the 2 (two) initial investment banks (i.e., the third valuation is greater than the lowest of the 2 (two) previous valuations and lesser than the greatest of such 2 (two) previous valuations), then the
valuation prepared by the third investment bank shall be considered the final fair market value of the Company. In case the valuation prepared by the third investment bank does not fall within the valuations prepared by the 2 (two) initial
investment banks, then the final fair market value of the Company shall be one of the valuations performed by the initial 2 (two) investment banks that most closely resemble the valuation prepared by the third investment bank. The Parties shall each
bear the costs and expenses associated with the investment bank they have engaged and shall share the costs of the third investment bank, as applicable.</P>
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15.4.2 Such valuations by the investment banks mentioned in Section 15.4.1 above shall be primarily based on the assumption of full and timely compliance by the Company with the Long-Term Business Plan and Mid-Term Business Plan of the Company
approved by the Parties, in effect at the time of applicable notice under Sections X or XV (except for such uncured or otherwise non-remedied delays and
non-compliances resulting from a breach by the Buyer of its obligations) and considering the then prevailing market conditions, including: </P>
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<P align="justify">(i) timely construction and completion of the high silica beneficiation plant, pellet plants and other facilities thereby considered, in accordance with the Long-Term Business Plan, Mid-Term Business Plan and the Annual Operating Budget,</P>
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(ii) timely purchase or lease of any and all relevant lands and assets, as well as the timely obtainment of any and all permits, licenses, consents, approvals, orders, waivers, authorizations, declarations, filings and other governmental approvals
required in connection with the facilities described in item (i) above, as applicable; and </P>
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(iii) full compliance with the Operational Agreements, Amendment to Transportation Agreement and Shareholders&#8217; Agreement by their relevant parties. For the avoidance of doubt, the Company's operational costs as described in certain Operational
Agreements should be considered as follows: (a) P1 shall be considered as cash expenses of the Company, which are incurred throughout the life of the applicable Operational Agreement and (b) P2 shall be considered as non-cash expenses of the
Company, which are incurred throughout the life of the applicable Operational Agreement and deducted from the advance payment amount under such Operational Agreement. </P>
<P align="justify">
15.4.3 For the avoidance of doubt, for the purposes of calculating the Fair Market Value of the Company under this Section 15.4, "full compliance" with Operational Agreements and Amendment to Transportation Agreement shall mean that all obligations
of the parties under such agreements shall be considered on a one hundred percent basis of the applicable contracted amounts (disregarding (i) any decrease of volume potentially allowed under such agreements and (ii) any Material Breach and its
potential adverse effects under such agreements). </P>
<P align="justify">
15.5 For the purposes of Section 15.2, "<U>Material Breach</U>" shall have the meaning ascribed to it in each of the following agreements: (i) [&#149;]. </P>
<P align="justify">
SECTION XVI. <U>N</U><U>ON</U><U>-C</U><U>OMPETE AND </U><U>R</U><U>EFERRALS</U> </P>
<P align="justify">
16.1 The Parties hereto agree that each of the Parties (directly or through any entity that Controls, is Controlled by, or is under direct or indirect common Control with, such Party) may independently engage in the same type of business as the
Company. </P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B></P>

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<P align="justify">
16.2 CSN hereby agrees that it shall not enter, directly or indirectly, into any agreements, arrangements or transactions in connection with purchases of iron ore ("<U>Iron Ore Purchases</U>"), except and to the extent that such Iron Ore Purchases do not impact or otherwise cause a reduction in the estimated Iron Ore Purchases of the Company, pursuant to the projections included in <U>Exhibit 1.1</U> attached
hereto. For the purposes of clarification, but without limiting the generality of the foregoing, Iron Ore Purchases by CSN will not impact or otherwise reduce the estimated Iron Ore Purchases of the Company provided that the Company has the ability
to make Iron Ore Purchases in a volume equal to, at least, [&#149;] up and until [&#149;] and [&#149;] thereafter. </P>
<P align="justify">
SECTION XVII. <U>T</U><U>ERM</U> </P>
<P align="justify">
17.1 The Parties (i) acknowledge that the investment of the New Investor into the Company is economically justified, among other aspects, by the existence of the Operational Agreements, entered into by CSN and the Company on the date hereof and (ii)
agree that this Shareholders' Agreement shall remain in full force and effect for an initial term corresponding to the term of such Operational Agreements, i.e., until [&#149;]. This Shareholders&#8217; Agreement shall be automatically renewed for
successive [&#149;] periods unless the Parties mutually agree (based on relevant economic reasons) not to renew this Shareholders&#8217; Agreement.</P>
<P align="justify">
SECTION XVIII. <U>N</U><U>OTICES</U> </P>
<P align="justify">
18.1 Any notice by any Party shall be prepared and delivered in English and addressed as follows:</P>
<P align="justify">
I. COMPANHIA SIDER&Uacute;RGICA NACIONAL: </P>
<P align="justify"> Avenida Brigadeiro Faria Lima, 3.400, 20<SUP>th</SUP> Floor<br>
  04538-132, S&atilde;o Paulo, SP, Brazil <br>
  Telephone: (55 11) 3049-7505 <br>
  Facsimile: (55 11) 3049-7140/7212 <br>
  e-mail: <U><font color="#0000FF">juarez.saliba@csn.com.br</font></U> <br>
  Att.:  Mr. Juarez Saliba de Avelar <br>
  With copy
  to: </P>
<P align="justify">
Mr. Fernando Quintana Merino <br>
Telephone: (55 11) 3049-7238 <br>
Facsimile: (55 11) 3049-7140/7212 <br>
e-mail: <U><font color="#0000FF">fernando.merino@csn.com.br</font></U> </P>
<P align="justify">
II. BIG JUMP ENERGY PARTICIPA&Ccedil;&Otilde;ES S.A.: </P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B></P>

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<P>
Rua da Consola&ccedil;&atilde;o, 247, 3<SUP>rd</SUP> Floor, Room 85A <br>
01031-903, S&atilde;o Paulo, SP, Brazil <br>
Telephone: (55 11) 3170-8509 <br>
Facsimile: (55 11)3170-8549 <br>
Att.: Chief Executive Officer </P>
<P>
III. NACIONAL MIN&Eacute;RIOS S.A.: </P>
<P>
Alameda da Serra, 400, 9<SUP>th</SUP> Floor <br>
34.000 -000, Nova Lima, MG, Brazil <br>
<br>
Telephone: (55 31) 3269-1410 <br>
Facsimile: (55 31)3269-1414 <br>
e-mail: <U><font color="#0000FF">adherbal.rego@csn.com.br</font></U> and <U><font color="#0000FF">ricardo.abramof@csn.com.br</font> </U><br>
Att.: Mr. Ricardo Abramof and Mr. Adherbal Guimar&atilde;es R&ecirc;go </P>
<P>
IV. BRAZIL JAPAN IRON ORE CORPORATION: </P>
<P>
5-1, Kita-Aoyama 2-chome, Minato-ku <br>
Tokyo 107-8077, Japan <br>
Telephone: (81 3) 3497-3365 <br>
Facsimile: (81 3)3497-3342 <br>
e-mail: miyata-ya@itochu.co.jp <br>
Att.: Mr. Yasuhiro Miyata </P>
<P>
V. POSCO </P>
<P>
POSCO Iron Ore Procurement Group <br>
POSCO Center 23 F <br>
Daechi-4dong, Gangnam-gu, <br>
Seoul, 135-777, Korea <br>
Telephone: (82 2) 3457-0306 <br>
Facsimile: (82 2) 3457-1908<br>
e-mail: <U><font color="#0000FF">mdseo@posco.com</font></U><br>
Att.:  Mr. Myung Deuk Seo / Group Leader </P>
<P align="justify">
18.2 Notices shall be deemed to have been delivered when sent with a return receipt or "<I>aviso de recebimento</I>" issued by the <I>Empresa Brasileira de Correios e Tel&eacute;grafos</I> (Brazilian Official Post Office) to the above mentioned
addresses or, in case of facsimile transmissions or e-mail communication, when a confirmation of such transmission or confirmation receipt<I> </I>is obtained.  The original version of documents sent via facsimile or e-mail shall be sent to the above
mentioned addresses no later than 2 (two) business days after such transmission. </P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B></P>

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<P>
SECTION XIX. <U>M</U><U>ISCELLANEOUS</U> </P>
<P align="justify">
19.1 No waiver by any Party of any term or provision of this Shareholders' Agreement or of any default hereunder shall affect such Party's rights thereafter to enforce such term or provision or to exercise any right or remedy in the event of any
other default, under the terms of applicable law.</P>
<P align="justify">
19.2 The Parties undertake to fulfill and cause others to fulfill all obligations hereunder and acknowledge that any acts performed or measures taken by the Parties or third parties in violation of this Shareholders' Agreement or in breach of the
provisions hereunder are null and void among themselves, the Company and any third party. </P>
<P align="justify">
19.3 This Shareholders' Agreement shall be binding upon and shall inure to the benefit of the Company, the Parties and their respective successors and assigns and shall be enforceable by the Parties hereto and their respective successors. Unless
otherwise provided herein, or agreed upon all the Parties in writing, this Shareholders Agreement and all of its rights and obligations must not be assigned to any third party.</P>
<P align="justify">
19.4 The obligations undertaken in this Shareholders' Agreement are irrevocable and unconditional. </P>
<P align="justify">
19.5 Copies of this Shareholders' Agreement shall be delivered to the managers (<I>administradores) </I>of the Company. The documents evidencing their assumption of office shall contain a representation pursuant to which they acknowledge the
provisions of this Shareholders' Agreement and undertake to comply with all obligations set forth herein, upon penalty of the sanctions provided for by applicable law. </P>
<P align="justify">
19.6 This Shareholders' Agreement is the entire agreement between the Parties hereto in connection with the subject hereof (unless otherwise provided herein) and supersedes, as of the date hereof, any other agreement, contract, promise, undertaking,
letter or any other form of agreement, communication or obligation, whether oral or written, by any Party (or any representative thereof) in respect of the matters covered in this Shareholders' Agreement (unless otherwise provided herein). </P>
<P align="justify">
19.7<I> </I>This Shareholders' Agreement is subject to specific performance under the terms of purposes of article 118 of Law N. 6,404, of December 15, 1976, as amended, and shall be filed at the Company's head office.  The Company hereby
irrevocably agrees on its own behalf and on behalf of its successors of any kind to comply with this Shareholders' Agreement and therefore executes it as intervening party. The Nominative Shares Registry Book of the Company, on the margin of the
Shares registration, and the certificates representing the Shares, if issued, shall bear
the following text: <i>"The shares held by [Name of Shareholder] are subject to the restrictions on transfer, voting arrangements, and other provisions set forth in a Shareholders&#8217; Agreement dated [</i><i> </i><i>]. All transfers of such
shares shall be made in accordance with such Shareholders&#8217; Agreement, otherwise shall be null and void".</i> </P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B></P>

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<P align="justify">19.8 The invalidity, in whole or in part, of any Section of this Shareholders' Agreement, shall not affect the other Sections, which shall continue to be valid and in effect until the remaining term of this Shareholders&acute; Agreement. In the
event of any such invalidity, the Parties hereby undertake to negotiate, in the shortest period of time possible, in substitution for the invalidated clause, the inclusion in this Shareholders' Agreement of valid terms and conditions that reflect
the terms and conditions of the invalidated clause, taking into consideration the intention and the purpose of the Parties at the time of the negotiation of the invalidated clause and the context in which it appears. </P>
<P align="justify">
19.9 All rights and remedies of any Party hereto are cumulative of each other and of every other right or remedy such Party may otherwise have in law or in other agreements (including the Operational Agreements), and the exercise of one or more
rights or remedies shall not prejudice or impair the concurrent or subsequent exercise of other rights or remedies, except that in case of exercise of either put or call rights under Sections X and XV above, in which case it shall be the sole and
exclusive remedy for any breach related to such exercise. </P>
<P align="justify">
19.10 Each of the Parties hereto shall maintain the confidentiality of any information received from the other Party and/or the Company ("<U>Confidential</U> <U>Information</U>"), including, without limitation, all data and information obtained by
any of them pursuant to this Shareholders&#8217; Agreement, except for any information which (i) at the time of disclosure, is public information, (ii) after disclosure, is published or otherwise becomes part of the public domain without any
violation of this Shareholders&#8217; Agreement by the Parties, (iii) is received by the disclosing Party from a third party, provided that such third party, or any other party from whom such third party received such information, is not in breach
of any confidentiality obligation in respect of such information. In the event that any Party becomes legally obligated (whether by applicable law, court order or otherwise) to disclose any of the Confidential Information, such Party shall (a)
immediately notify the other Party of the existence, terms and circumstances in connection therewith, (b) to cooperate with the other Party in the event that any Party seeks a protective order or other appropriate remedy, (c) to furnish only that
portion of the Confidential Information which is legally required and (d) to exercise its reasonable efforts to obtain reliable assurances that confidential treatment will be accorded to the Confidential Information. The Parties hereby acknowledge
that each of them may disclose any Confidential Information, to the extent necessary and permitted by applicable law, to any of their respective direct or indirect shareholder, employee, officer, attorney, consultant, financial advisor, accountant
or other representative
thereof, in compliance with the provisions of this Section 19.10. Notwithstanding<i> </i>the foregoing, with regard to the Company, any Party may disclose certain financial information and other records, pertinent corporate documents and documents
relating to the business of any member of the Company, to the extent reasonably necessary, to any prospective purchaser of such Party&#8217;s Shares, and to any employee, officer, attorney, consultant, financial advisor, accountant or other
representative thereof, provided that such Party shall cause the prospective purchaser and employee, officer, attorney, accountant or other representative to enter into a confidentiality agreement in compliance with the provisions of this Section
19.10. </P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B></P>

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<P align="justify">19.11 Any dispute, controversy or claim arising out of or relating to this Shareholders' Agreement ("<U>Dispute</U>") will be solved by arbitration, in accordance with the following provisions:</P>
<P align="justify">
(i) The Dispute will be finally settled under the Rules of Arbitration of the International Chamber of Commerce (the "<U>ICC Rules</U>") in force at the time the Dispute arises. </P>
<P align="justify">
(ii) Each Party shall appoint one arbitrator, and the 2 (two) party-appointed arbitrators shall designate a third arbitrator ("<U>Arbitral Tribunal</U>"). However, it is hereby agreed that if any Party fails to appoint its arbitrator, such
arbitrator shall be appointed by the Court of Arbitration of the International Chamber of Commerce (the "<U>ICC Court</U>"). In case the 2 (two) appointed arbitrators fail to appoint the third arbitrator within [&#149;] days from the date of their
appointment, upon a written request of each of the parties, the ICC Court will appoint the third arbitrator.</P>
<P align="justify">
(iii) The arbitration will be held in the City of S&atilde;o Paulo, Brazil.  The arbitration procedure will be held in English language and in accordance with the Brazilian Law. </P>
<P align="justify">
(iv) The Parties elect the courts of the City of S&atilde;o Paulo, State of S&atilde;o Paulo, exclusively for interim or conservatory measures, as provided for in the ICC rules. </P>
<P align="justify">
(v) The Arbitral Tribunal will render its final award within [&#149;] months as of the beginning of the arbitration. This term may be extended for up to [&#149;] by the Arbitral Tribunal, provided it is justified. </P>
<P align="justify">
(vi) Except for attorney&#8217;s fees, which shall be born individually by each Party, all expenses, costs and legal fees will be borne by one or both Parties as determined by the Arbitral Tribunal.</P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B></P>

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(vii) The Parties shall keep the confidentiality of each and every information concerning the arbitration. </P>
<P align="justify">
(viii) All the Parties to the Agreement shall participate in any arbitration, joining the claimant or the defendant as the case may be. The Parties agree that any order, decision or determination of the Arbitral Tribunal shall be definitely binding.</P>
<P align="justify">
IN WITNESS WHEREOF, the Parties hereto, together with the intervening parties, have caused this Shareholders' Agreement to be duly signed in 3 (three) counterparts, each of which shall be deemed to be an original, but all of which together shall
constitute the same agreement, binding upon the Parties and the intervening parties and their respective heirs and successors in the presence of the 2 (two) witnesses below. </P>
<P align="center">
S&atilde;o Paulo, [&#149;], 2008 </P>
<P align="center">
[SIGNATURES ON THE NEXT PAGES] </P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B></P>

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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>15
<FILENAME>exhibit104.htm
<DESCRIPTION>EXHIBIT 10.4
<TEXT>
<!DOCTYPE HTML PUBLIC "">


<html><head><title>Provided by MZ Data Products</title></head>

<BODY style="font-family: 'Times New Roman, Times, Serif'; text-align:justify; font-size:11px" bgcolor="#ffffff">
<P align="right"><a href="sidform20f2008a.htm#topexhibit">Table of Contents</a></P>
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<P align="center">
<B><U>HIGH SILICA ROM IRON ORE SUPPLY CONTRACT</U></B><B> </B></P>
<P>
By means of this private legal instrument, on the one hand, in its capacity as buyer, </P>
<P align="justify">
<B>NACIONAL MIN&Eacute;RIOS S/A</B>, a joint stock corporation organized and existing under Brazilian law, with its head office located in the City of Congonhas, State of Minas Gerais, Federal Republic of Brazil, at the address known as
&#147;<I>Logradouro Casa de Pedra</I>&#148;, s/n (unnumbered), Part, enrolled with the General Registry of Corporate Taxpayers of the Brazilian Ministry of Finance (CNPJ/MF) under No. 08.446.702/0001 -05 (and its successors, hereinafter referred to
as &#147;<U>BUYER</U>&#148;), </P>
<P>
and, on the other hand, in its capacity as seller, </P>
<P align="justify">
<B>COMPANHIA SIDER&Uacute;RGICA NACIONAL</B>, a joint stock corporation organized and existing under Brazilian law, with its head office located in the City of Rio de Janeiro, State of Rio de Janeiro, at Rua S&atilde;o Jos&eacute; No. 20, Suite
1,602, Part, enrolled with the CNPJ/MF under No. 33.042.730/0001 -04 (hereinafter referred to as &#147;<U>SELLER</U>&#148;), </P>
<P>
(BUYER and SELLER are individually identified as &#147;<U>Party</U>&#148; and jointly as &#147;<U>Parties</U>&#148;). </P>
<P>
and, as intervening parties: </P>
<P align="justify">
<B>BIG JUMP ENERGY PARTICIPA&Ccedil;&Otilde;ES S.A</B>., a corporation organized and existing under Brazilian law, with its head offices located in the City of S&atilde;o Paulo, State of S&atilde;o Paulo, at Rua da Consola&ccedil;&atilde;o, 247,
3<SUP>rd</SUP> Floor, Room 85A, enrolled with the CNPJ/MF under No. 09.431.882/0001 -14, herein represented in accordance with its by-laws (and its successors, hereinafter referred to as the &#147;<U>Brazilian SPC</U>&#148;); </P>
<P align="justify">
<B>BRAZIL JAPAN IRON ORE CORPORATION</B>, a company duly organized and existing under the laws of Japan, with its head office located at 5-1, Kita-Aoyama 2-chome, Minato-ku, Tokyo 107-8077, Japan, herein represented in accordance with its by-laws
(hereinafter referred to as the &#147;<U>Japanese</U> <U>SPC</U>&#148;); </P>
<P align="justify">
<B>POSCO</B>, a company duly incorporated and validly existing under the laws of Korea, with head offices at 892 Daechi 4-dong Kangnam-gu, Seoul, 135-777, Korea, herein represented in accordance with its by-laws (&#147;<U>Posco</U>&#148;); </P>
<P align="justify">
(the Brazilian SPC, the Japanese SPC and Posco are collectively hereinafter referred to as the &#147;<U>Intervening Parties</U>&#148;); </P>
<P align="center">
<B>RECITALS </B></P>
<P>
<B>WHEREAS</B>: </P>
<P>
<B>(A)</B> SELLER owns mining rights that assure it the operation of the iron ore mine known as the &#147;<I>Casa de Pedra Mine</I>&#148;, located in the City of Congonhas, State of Minas Gerais (hereinafter referred to as the &#147;<U>Casa de Pedra
Mine</U>&#148;); </P>
<P>
<B>(B)</B> BUYER produces and sells iron ore and intends to acquire crushed iron ore with high silica SiO<sub>2</sub>) content on a run-of-mine (ROM) basis from SELLER;</P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B><B> </B></P>

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<B>(C)</B> SELLER intends to supply BUYER with crushed iron ore with high silica <SUP>(SiO</SUP>2<SUP>) content </SUP>obtained from the Casa de Pedra Mine and BUYER intends to acquire such iron ore from SELLER; </P>
<P align="justify">
<B>(D)</B> the Parties simultaneously execute (i) a Low Silica ROM Iron Ore Supply Contract, (ii) an Iron Ore Supply Contract and Other Covenants (Tailing Dam Rejects), (iii) a Port Operating Services Agreement; and (iv) a Support Agreement (solely
in relation to Clause 2 thereof) (all such agreements, including this High Silica ROM Iron Ore Supply Contract, but excluding the Iron Ore Supply Contract and Other Covenants (Tailing Dam Rejects), the &#147;<U>Related</U> <U>Contracts</U>&#148;);
and </P>
<P align="justify">
<B>(E)</B> the performance of each Related Contract will be considered part of the performance of a more comprehensive transaction between the Parties, which encompasses the supply of iron ore, railway transport of iron ore, port operating services
and other transactions, as reflected in such Related Contracts and other arrangements and documents executed between the Parties. </P>
<P align="justify">
The Parties hereby sign and execute this Iron Ore Supply Contract (the &#147;<U>Contract</U>&#148;), which shall be governed by the following clauses and conditions: </P>
<P align="center">
<B>CLAUSE ONE &#150; SCOPE</B> </P>
<P align="justify">
<B>1.1.</B> The scope of this Contract is the supply by SELLER to BUYER of crushed iron ore run-of-mine (ROM) from the Casa de Pedra Mine, with high silica (SiO<sub>2</sub>) content and such other chemical and physical properties as set forth in <U>Attachment I</U> hereto (the &#147;<U>Product</U>&#148;), free of any encumbrance, charges, debts or doubts, with due regard to the other clauses of this Contract. </P>
<P align="center">
<B>CLAUSE TWO &#150; TERM, QUANTITIES AND CONDITIONS FOR SUPPLY </B></P>
<P align="justify">
<B>2.1.</B> <B><I>Term of Supply.</I></B> The Product shall be supplied for [&#149;]<SUP>1</SUP> Mining Years, beginning in the Mining Year in which the SELLER effectively starts the supply of Product to BUYER, which shall occur when the
beneficiation plant of BUYER starts to operate (the &#147;<U>Beneficiation Plant</U>&#148;) (originally expected to occur in the Mining Year of [&#149;]). For the intents and purposes of this Contract, &#147;<U>Mining</U> <U>Year</U>&#148; shall
mean the period of 12 (twelve) months beginning on April 1<SUP>st</SUP> of a calendar year and ending on March 31<SUP>st</SUP> of the immediately subsequent calendar year, except for the first Mining Year, which shall start on the date the
Beneficiation Plant of BUYER starts to operate. </P>
<P align="justify">
<B>2.1.1.</B> <B><I>Extension.</I></B> In case there are any quantities of Products outstanding as of the end of the [&#149;] Mining Year of this Contract, the term shall be automatically extended for as much time as necessary for the supply of such
outstanding quantities, subject to all terms and conditions hereof. In case the term of this Contract is extended according to this Clause 2.1.1, the maximum Basic Annual Quantities applicable to all subsequent Mining Years shall be [&#149;] wet
metric tons of Product.</P>
<P align="justify">
<B>2.2.</B> <B><I>Contractual Quantity and Basic Annual Quantities.</I></B> Without prejudice to the provision contained in Clause 2.2.1 below, SELLER undertakes to make available to BUYER in each Mining Year the quantity of Product indicated in the
respective column of <U>Attachment II</U> hereto (with such quantity of Product being hereinafter referred to as the &#147;Basic Annual Quantity&#148; and the sum of the Basic Annual Quantities as the &#147;<U>Contractual Quantity</U>&#148;). <br>
<br>
_________________<br>
<SUP>1</SUP> Text marked as [&#149;] denotes CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. </P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B><B> </B></P>

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<B>2.2.1.</B> Notwithstanding the provision contained in Clauses 2.2 and 2.1.1. above, BUYER may acquire, at BUYER&#146;s sole discretion, in each Mining Year, a quantity of Product that ranges from [&#149;] to [&#149;]% [&#149;] of the Basic Annual
Quantity set forth for the Mining Year in question (&#147;<U>Nominated</U> <U>Annual Quantity</U>&#148;), <U>provided</U> that: </P>
<P align="justify"><B>(a)</B> the total quantity of Product to be supplied under this Contract shall never exceed the Contractual Quantity;</P>
<P align="justify">
<B>(b)</B> if BUYER, in a certain Mining Year, for any reason whatsoever, acquires a quantity of Product lower than the Basic Annual Quantity applicable to such Mining Year, BUYER shall have the right to carry over the difference between the Basic
Annual Quantity and the actual quantity of Product supplied to BUYER in such Mining Year (the &#147;<U>Carry-Over</U> <U>Amount</U>&#148;) for the subsequent Mining Years; provided that, in any given Mining Year, the effective quantities of Product
to be supplied, including any Carry-Over Amounts, shall not be greater than [&#149;]% [&#149;] of the Basic Annual Quantity for the relevant Mining Year; and </P>
<P align="justify">
<B>(c) </B>the acquisition by BUYER of amounts below the Basic Annual Quantity shall not be considered as a BUYER&#146;s Default (as defined in Clause 10.4 below). </P>
<P align="justify">
<B>2.3. </B><B><I>Monthly Quantity.</I></B> SELLER undertakes to make available to BUYER in each month of a Mining Year, the quantity of Product indicated in the respective column of Attachment II hereto (with such quantity of Product being
hereinafter referred to as the &#147;<U>Monthly Quantity</U>&#148;), <U>provided</U>, <U>however,</U> that BUYER may, without prejudice to the provision contained in Clause 2.2 above, acquire, and SELLER shall supply in such case, in each month of a
Mining Year a quantity of Product that is up to [&#149;]% [&#149;] greater than the Monthly Quantity, and BUYER shall nominate such additional quantity in the quarterly nomination, as provided in Clause 2.5.2. </P>
<P align="justify">
<B>2.4.</B> <B><I>Quantities Exceeding Threshold.</I></B> If, for any reason whatsoever, BUYER requires more than [&#149;]% of the Monthly Quantity or Basic Annual Quantity during, respectively, each month of the term of this Contract or each Mining
Year, BUYER and SELLER shall discuss in good faith such additional Product requirement. </P>
<P align="justify">
<B>2.5. </B><B><I>Nomination Procedure</I></B><B>. </B>The quantity of Product to be supplied by<B> </B>SELLER to BUYER under this Contract during the term hereof shall be determined as follows: </P>
<P align="justify">
<B>2.5.1. </B>BUYER shall inform by written notice to SELLER the Nominated Annual Quantity and an estimate of the Monthly Quantities to be supplied under this Contract in each Mining Year, determined in accordance with BUYER's annual budget, subject
to Clauses 2.2, 2.3 and 2.4 above, by October 31 of the preceding Mining Year. Unless the Nominated Annual Quantity informed by BUYER is not in accordance with Clauses 2.2, 2.3 and 2.4 above, such Nominated Annual Quantity shall be the quantity of
Product established for the relevant Mining Year. For the avoidance of doubt, the acquisition by BUYER of amounts below the Nominated Annual Quantity shall not be considered as BUYER&#146;s Default (as defined in Clause 10.4 below). </P>
<P align="justify">
<B>2.5.2. </B>At least [&#149;] days<B> </B>before the commencement of each quarter of each Mining Year, BUYER shall deliver to SELLER a nomination of the Monthly Quantity(ies) (hereinafter referred to as the &#147;<U>Nominated Monthly
Quantity</U>&#148;). SELLER undertakes to make available to BUYER in each month of a Mining Year, but BUYER shall not in any event be obligated to take delivery of, the quantity of the Nominated Monthly Quantity. For the avoidance of doubt, the
acquisition by BUYER of amounts below the Nominated Monthly Quantities shall not be considered as BUYER&#146;s Default (as defined in Clause 10.4 below). </P>
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<B>2.6.</B> <B><I>Quantities Effectively Supplied.</I></B> The quantities of Product effectively supplied under this Contract shall be determined based on the weighing of each Batch (as defined below) of Product supplied, to be carried out in
accordance with the criteria and other procedures set forth in <U>Attachment</U> <U>III</U> hereto, and shall be based on the weighing certificates provided under the terms of said <U>Attachment</U> <U>III</U> hereto. For the purposes of this
Contract, the term &#147;<U>Batch</U>&#148; means the quantity of Product effectively supplied during the period encompassed between the first and last day of a determined month, as indicated on the weighing certificates provided. </P>
<P align="justify">
<B>2.7.</B> <B><I>Place of Delivery, Transfer of Ownership and Quantities not Received.</I></B> SELLER shall deliver Product at NAMISA&#146;s stockyard located near the Beneficiation Plant, to be implemented in an area belonging to NAMISA, around
the Casa de Pedra Mine, for production of pellet feed type iron ore. Title to and risks related to the Product shall be transferred from SELLER to BUYER upon such delivery. </P>
<P align="justify">
<B>2.7.1.</B> Whenever BUYER fails to withdraw any quantity of Product effectively delivered pursuant to Clause 2.7 above and, as a result of such failure, the storage capacity of such stockyard becomes full, SELLER may suspend any further supply of
the Product. SELLER shall resume supply of the Product within 24 (twenty four) hours following the effective date on which BUYER resumes withdrawal of Product.</P>
<P align="justify">
<B>2.8. </B><B><I>Chain of Contracts</I></B><B>. </B>The Parties acknowledge and agree that this Contract jointly with the other Related Contracts form a chain of contracts, so that the performance of the obligations arising out of this Contract may
(i) depend on the due performance of the obligations of the Parties under the other Related Contracts and/or (ii) may affect the performance of the obligations of the Parties under the other Related Contracts.</P>
<P align="justify">
<B>2.8.1.</B> In case the performance of any obligations under this Contract is prevented or becomes unfeasible or uneconomical due to the non-performance of the obligations of either Party under any other Related Contract (the &#147;<U>Affected
Contracts</U>&#148;), the Parties shall be subject to the following provisions:</P>
<P align="justify">
(i) in case the failure to perform any Related Contract is attributable to either Party hereto, such Party shall also be liable for the non-performance of this Contract if and to the extent that this Contract is an Affected Contract; </P>
<P align="justify">
(ii) in case of any failure to perform any Related Contract due to a Force Majeure Event, as defined in any such Related Contract,  the non-performance hereof shall also be deemed to have occurred under a Force Majeure Event if and to the extent
such failure prevents the performance of this Contract.</P>
<P align="justify">
<B>2.9. </B><B><I>Communication between SELLER and BUYER. </I></B>The Parties undertake to keep close and frequent communication throughout the term of this Contract aiming at the achievement of the performance of their obligations under this
Contract, as follows: </P>
<P align="justify">
<B>2.9.1 </B><B><I>Monthly Meetings</I></B><I>.</I> Each Party shall indicate by written notice to the other Party, no later than 30 (thirty) days of the date of signature of this Contract, a committee of three or four officers and/or employees in
charge of representing that Party in the management of the day-to-day operations under the Contract (the &#147;<U>Representation Committee</U>&#148;). The Representation Committee of each Party shall convene on a monthly basis, on a date to be
agreed upon by the Parties through mutual discussion in good faith to discuss and define any issues related to the operations under this Contract and the Parties&#146; performance of their obligations hereunder, such as: </P>
<P align="justify">
- - Planning and nomination of Quantity to be supplied by SELLER in the next month; </P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B><B> </B></P>

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- - Review of the actual performance and quality of the supply of the Product for the immediately preceding month; <br>
- - Reconciliation of Actual vs Budget for the operation of the month; and <br>
- - Discuss and agree in good faith any counter-measures (but in
any event without prejudice to any provision in this Contract) that shall be taken by each Party, as applicable, for any non-conformity, quality deviations or nonperformance of the Parties&#146; obligations under this Contract. </P>
<P align="justify">
<B>2.9.2 </B><B><I>Yearly Meetings</I></B>. The Representation Committee of the Parties shall annually convene on a date to be mutually agreed by the Parties in each Mining Year to discuss the operations and performance of the Parties&#146;
obligations under this Contract for the preceding Mining Year, as well as issues such as: </P>
<P align="justify">
- - Planning for next Mining Year;<br>
- - Review the actual performance and quality of the supply of the Product for the previous Mining Year; <br>
- - Reconciliation of Actual vs Budget for the operation of the Mining Year; and <br>
- - Discuss and agree in good faith any counter-measures that shall
be taken by each Party, as applicable, for any non-conformity, quality deviations or nonperformance of the Parties&#146; obligations under this Contract. </P>
<P align="justify">
<B>2.9.3. </B><B><I>Third Parties&#146; Attendance</I></B>. The Brazilian SPC may appoint representatives being entitled to attend the Yearly and/or Monthly Meetings provided in Clause 2.9.1 and 2.9.2 at its sole discretion. </P>
<P align="justify">
<B>2.9.4. </B><B><I>Day-to-day Communication</I></B>. Further to the above, the Parties shall keep, through any of the members of the Representation Committee, close daily communication in connection with the operations of this Contract. </P>
<P align="justify">
<B>2.10.</B><B><I> Access to SELLER&#146;s Daily Operations under this Contract</I></B><I>. </I>BUYER and the Brazilian SPC will be entitled to access and supervise SELLER&#146;s daily operations under this Contract, through a representative
indicated by BUYER, including but not limited to quality control procedures, such as weighing, sampling and analysis, among others, and related operations at Casa de Pedra Mine. SELLER will endeavor its best efforts to provide such clarification or
information requests which may be submitted by BUYER as a result thereof. </P>
<P align="center">
<B>CLAUSE THREE &#150; PRODUCT QUALITY </B></P>
<P align="justify">
<B>3.1.</B> <B><I>Quality of the Product Supplied</I></B>. The Parties hereby acknowledge and agree that all the characteristics set out in <U>Attachment I</U> hereto as guaranteed specifications (the &#147;<U>Guaranteed</U>
<U>Specifications</U>&#148;) are mandatory and guaranteed by SELLER. The quality of the Product supplied shall be determined based on sampling and analysis to be carried out on each Batch in accordance with the criteria and other procedures set out
in <U>Attachment III</U> hereto. </P>
<P align="justify">
<B>3.1.1. </B><B><I>Quality Report</I></B><I>.</I><B><I> </I></B>SELLER shall verify and report in writing to BUYER, on both a weekly and monthly basis, the average quality of the Product supplied to BUYER at the immediately previous week and month,
respectively, based on the model quality control sheet included in <U>Attachment V</U> hereto. </P>
<P align="justify">
<B> 3.1.1.1. </B><B><I>Weekly Basis</I></B><B>. </B>If the actual average quality of the Product during the period between the first and last day of a determined week is lower than the Guaranteed Specifications, SELLER shall provide, jointly with
the model quality control sheet, the background reason for
such Product not satisfying the Guaranteed Specifications. In such case, BUYER shall be entitled to further request SELLER to take countermeasures to improve the quality of the Product for the next weeks, and such issue shall be discussed at the
next Monthly Meeting, as provided in Clause 2.9.1 above. <b> </b></P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B><B> </B></P>

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<P align="justify"><B>3.1.1.2.</B> <B><I>Monthly Basis.</I></B> If the actual average quality of the Product during the period between the first and last day of a determined month is lower than the Guaranteed Specifications, BUYER shall be entitled to further request
SELLER to take countermeasures required for quality improvement, and SELLER shall explain the background reasons for such Product not satisfying the Guaranteed Specifications and propose suitable countermeasures at the next Monthly Meeting, as
provided in Clause 2.9.1 above. <B> </B></P>
<P align="justify">
<B>3.1.2.</B> <B><I>Target Specifications</I></B><I>. </I>The target specifications described in <U>Attachment I</U> hereto shall be used to calculate the Penalty / Bonus Component described in the formula set forth in Clause 4.1 below (the
&#147;<U>Target Specifications</U>&#148;). </P>
<P align="justify">
<B>3.1.3.</B> <B><I>Rejection Level</I></B><I>.</I> In case any &#147;<U>Pile</U>&#148; (a certain quantity of Product mandatorily ranging from [&#149;] to [&#149;] wet metric tons, except as otherwise agreed by the Parties) pertaining to any Batch
falls under the rejection level set forth in <U>Attachment I</U> hereto, BUYER shall have the right to reject such Pile. Within one week counted from the day on which SELLER is made aware of any rejection, in case SELLER does not take any
countermeasures to correct the quality of the Products of any rejected Pile, SELLER shall have such rejected Pile replaced with a new Pile of Product in the same quantity which shall satisfy chemical and physical specifications which shall be at
least higher than the rejection level described in <U>Attachment I</U> hereto.</P>
<P align="justify">
<B>3.1.4.</B> <B><I>Additional Expenses of BUYER.</I></B> In the event that BUYER incurs additional expenses and/or actual damages due to admixture of foreign material(s) and/or different products of iron ore and/or Product which size exceeds the
guaranteed limit, as defined in <U>Attachment I</U>, SELLER shall, notwithstanding anything to the contrary as contained herein, compensate BUYER for such additional expenses and/or actual damages within 90 (ninety) days. </P>
<P align="center">
<B>CLAUSE FOUR &#150; UNIT PRICE </B> </P>
<P align="justify">
<B>4.1.</B> <B><I>Unit Price. </I></B>The price per wet metric ton (wmt) of Product supplied shall be &#150; according to the conditions for delivery set out in Clause 2.7 above - determined on the basis of the quantities and quality (content of
iron or &#147;<U>Fe</U>&#148;) of each Batch, based on the following formula (the price, per wet metric ton (wmt), resulting from application of the cited formula, the &#147;<U>Unit Price</U>&#148;): </P>
<TABLE border=1 width=100% align="center" cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">

<TR valign="bottom">
	<TD width="100%" align=center bgcolor="#CCCCCC"><B>PU = P</B><B><SUB>1 </SUB></B><B>+ P</B><B><SUB>2 </SUB></B><B>+ P</B><B><SUB>3</SUB></B>&nbsp;</TD></TR>
</TABLE>
<BR>
<P>
<U>Where</U>: </P>
<P>
<B>PU </B>= means Unit Price for a determined month of supply; </P>
<P>
<B>P</B><B><sub>1</sub></B><SUP> </SUP>= <B>Y</B> <B>+ [Penalty / Bonus Component]</B> (cash component of the Product price) </P>
<P align="justify">
<B>Y = </B>means, as of April 1<SUP>st</SUP>, 2008, the equivalent in Brazilian currency of US&#36;[&#149;] (two US Dollars and fifty cents), it being certain that such amount shall be readjusted, at the beginning of each Mining Year, based on the
same percentage readjustment as iron ore fines of the type known as [&#149;], as produced by the [&#149;] (hereinafter referred to as &#147;[&#149;]&#148;) and aimed for shipment through the Port of Tubar&atilde;o to Japan (such ore being
hereinafter referred to as the &#147;<U>Reference Ore</U>&#148;), as disclosed (by order): </P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B><B> </B></P>

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<B>(i)</B> in the Tex Report, as published by the Tex Report, Ltd. (or successor thereto); </P>
<P align="justify">
<B>(ii)</B> if the Tex Report, for any reason, is no longer available or does not any longer disclose the Reference Ore, the Metal Bulletin, published by Metal Bulletin, plc (or successor thereto); or </P>
<P align="justify">
<B>(iii)</B> if the Metal Bulletin, for any reason, is no longer available or does not any longer disclose the price of the Reference Ore, then the [&#149;] website or any other [&#149;] publication. </P>
<P align="justify">
Notwithstanding the provisions above, if, upon commencement of a Mining Year, the percentage readjustment applicable to the Reference Ore is not available and no other readjustment has been agreed between the Parties in view of the conditions of the
international iron ore market, the &#147;Y&#148; applicable to the supplies to be carried out in the Mining Year that is about to begin shall temporarily be the &#147;Y&#148; then in effect until such time as the percentage readjustment applicable
to the Reference Ore is known or determined. As soon as the percentage readjustment applicable to the Reference Ore is known or determined, the new &#147;Y&#148; shall be determined in accordance with the provisions contained in this Clause, with
retroactive effects to the beginning of the Mining Year in question, with any eventual differences (either upwards or downwards) resulting from temporary use of the &#147;Y&#148; then in effect in the formula for determination of the Unit Price
being agreed between the Parties within a period of 30 (thirty) days counting from the date on which the new &#147;Y&#148; has been disclosed and communicated in writing by SELLER to BUYER. </P>
<P align="justify">
In the event the Reference Ore should no longer be produced or sold, the Parties shall promptly replace it, for purposes of readjusting &#147;Y&#148;, with such product that succeeds Reference Ore or with such other type of iron ore that is
representative on the international iron ore market that is agreed to by the Parties. </P>
<P align="justify">
For purposes of translating the &#147;Y&#148; into Brazilian currency, SELLER shall use the average of quotations for sale of the United States Dollar as disclosed by the Brazilian Central Bank (BACEN) by means of transaction PTAX 0800, option 5 (or
such transaction as may replace same on the BACEN System - SISBACEN), in the month prior to that for issuance of the invoice relating to the supply of the Product, and shall take &#147;Y&#148; to 2 (two) decimal places after rounding off.
&#147;<U>PTAX</U>&#148; means the ask rate which means the Brazilian Reais&#146; bid and Dollar&#146;s ask rate, expressed as the amount of Brazilian Reais per one Dollar, published by the Brazilian Central Bank on SISBACEN Data System under
transaction code PTAX-800, Option 5, "<I>Venda</I>" by approximately 6:00 p.m., S&atilde;o Paulo time. </P>
<P>
<B>Penalty / Bonus Component</B> = (Fe% - Fe% Target Specifications) * US&#36;[&#149;]/wmtu wmtu = [&#149;]% of Fe Content of each wmt (=[&#149;]kg of Fe content in wmt);</P>
<P>
<B>Fe%</B> = means the actual average iron content of QL in a determined month; </P>
<P align="justify">
<B>QL</B> = means the quantity of the Batch effectively supplied to BUYER in a determined month, as indicated on the weighing certificates issued in the manner set forth in <U>Attachment III</U> hereto;<B> </B></P>
<P align="justify">
<B>Fe % Target Specifications</B> = means the applicable iron content of Fe set forth in <U>Attachment</U> <U>I</U> hereto; </P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B><B> </B></P>

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<B>P</B><B><sub>2</sub></B><SUP> </SUP>= means the amount in Brazilian Reais equivalent to US&#36; [&#149;], an amount that is fixed and non-adjustable for the entire period that this Contract remains in effect (non-cash amount of the Product
price); and </P>
<P align="justify">
 For purposes of translating the P<SUB>2</SUB> into Brazilian currency, SELLER shall use PTAX applicable at the close of the business of the day that is 2 (two) Business Days (as defined in Clause 5.1.1 below) prior to the relevant calculation date, which relevant calculation date for the purpose of the payment of the Advance Payment shall
mean the date on which such payment effectively occurs. If no PTAX value is available on such date, PTAX value on the date shall be replaced by the exchange rate freely practiced in the financial market. </P>
<P align="justify"><B>P</B><B><sub>3</sub></B><SUP>= </SUP>means the amount that is non-adjustable equivalent in Brazilian currency (Reais) to US&#36; [&#149;] from the beginning of the supply of Product under this Contract, up to the end of the [&#149;] Mining Year
thereafter, and, the equivalent in Brazilian currency (Reais) to US&#36; [&#149;] from such date onwards.</P>
<P align="justify">
  For purposes of translating the<B> P</B><B><sub>3</sub></B> into Brazilian currency, SELLER shall use the average of quotations for sale of the United States Dollar as disclosed by the Brazilian Central Bank (BACEN) by means of transaction PTAX 0800, option 5 (or such transaction as may replace same on the BACEN System - SISBACEN), in the month prior to
that for issuance of the invoice relating to the supply of the Product, and shall >take P<SUB>3</SUB> to 2 (two) decimal places after rounding off. </P>
<P align="justify">
<B>4.2.</B> <B><I>Taxes.</I></B> The Parties acknowledge and agree that the amounts attributed to &#147;P<SUB>1</SUB>&#148;, &#147;P<SUB>2</SUB>&#148; and &#147;P<SUB>3</SUB>&#148; in Clause 4.1 above do not include taxes of any kind levied on the Product and/or on the supply of the Product (subject to Clauses 8.2, 8.3 and 8.4, as and if applicable), such as the Federal Social Integration Program &#150; PIS, the Social Security
Finance &#150; COFINS contributions and the State Value-Added Tax on Circulation of Goods and Services &#150; ICMS. The taxes currently imposed on the Product and/or on the supply of the Product as well as the formula for the addition of those
taxes, if applicable, to the Unit Price are disclosed in <U>Attachment VI</U> hereto. </P>
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<B>CLAUSE FIVE &#150; ADVANCE PAYMENT </B></P>
<P align="justify">
<B>5.1. </B><B><I>Advance Payment.</I></B> On the date agreed by the Parties but not later than 90 (ninety) days from the date of execution of this Contract, BUYER shall make available to SELLER, in advance, on account of the Product to be supplied
by BUYER under this Contract, the amount in Brazilian Reais corresponding to US&#36; [&#149;] (hereinafter referred to as the &#147;<U>Advance Payment</U>&#148;), which amount corresponds to the sum of each one of the results of multiplication (a)
of each Monthly Quantity set forth in <U>Attachment II</U> hereto (for each one of the months of each Mining Year) by, (b) US&#36; [&#149;], adjusted to present value through the signing date of this Contract based on a discount rate of [&#149;]%
per annum.</P>
<P align="justify">
<B>5.1.1</B> The conversion of amounts in Dollars into Brazilian Reais, under this Contract, shall use PTAX applicable at the close of the business of the day that is 2 (two) Business Days (as defined below) prior to the relevant calculation date,
which relevant calculation date for the purpose of the payment of the Advance Payment shall mean the date on which such payment effectively occurs. If no PTAX value is available on such date, PTAX value on the date shall be replaced by the exchange
rate freely practiced in the financial market.</P>
<P align="justify">
 &#147;<U>Business Day</U>&#148; means any day (excluding Saturdays and Sundays) on which commercial banks generally are open for the transactions of normal banking business (i) in the City of S&atilde;o Paulo,
Brazil, (ii) in the City of New York, United States of America, (iii) in the City of Tokyo, Japan and (iv) in the City of Seoul, South Korea.<b> </b></P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B><B> </B></P>

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<P align="justify"><B>5.1.2.</B> The Advance Payment shall be made by means of available electronic transfer (TED - &#147;<I>transfer&ecirc;ncia eletr&ocirc;nica dispon&iacute;vel</I>&#148;) of funds to SELLER&#146;s current account indicated in <U>Attachment IV</U>
hereto (or to such other account as may be notified by SELLER to BUYER under the terms of this Contract). </P>
<P align="justify">
<B>5.2. </B><B><I>Deduction of the Advance Payment upon Supply of each Batch of Product.</I></B> At the end of each month of supply, SELLER shall automatically deduct from the balance of SELLER&#146;s debt to BUYER in relation to the Advance Payment
a fixed and non-adjustable amount corresponding to the portion of the Advance Payment attributable to the Batch of Product supplied in such month, which amount is equivalent to: </P>
<P>
<B>(a)</B>P<SUB>2</SUB>(as defined in Clause 4.1 above); </P>
<P align="justify">
<B>(b)</B> multiplied by QL (as defined in Clause 4.1 above). </P>
<P align="justify">
<B>5.3.</B> <B><I>Updating of SELLER&#146;s Debt to BUYER in relation to the Advance Payment.</I></B> The balance of SELLER&#146;s debt to BUYER in relation to the Advance Payment shall be subject to the levying of interest charges, determined on
the basis of an interest rate of [&#149;]% per annum, calculated on a monthly <I>pro rata</I> basis. <B> </B></P>
<P align="justify">
<B>5.3.1.</B> The interest charges provided in Clause 5.3 above shall be computed through the end of each month (or fraction thereof), as from the date for making the Advance Payment and through the termination or expiration of this Contract, based
on the balance of SELLER&#146;s debt to BUYER in relation to the Advance Payment on such date, after the deduction dealt with in Clause 5.2 above. Such interest charges, after being calculated, are to be treated in the following manner:</P>
<P align="justify">
<B>(a)</B> [&#149;] of the amount corresponding to the interest charges shall be added to the balance of the cited SELLER&#146;s debt at the end of each Mining Year;</P>
<P align="justify">
<B>(b)</B> [&#149;] of the amount corresponding to the interest charges shall be paid by SELLER to BUYER on the second Working Day of the month subsequent to the one in question, by means of available electronic transfer (TED -
&#147;<I>transfer&ecirc;ncia eletr&ocirc;nica dispon&iacute;vel</I>&#148;) of funds to SELLER&#146;s current account indicated in <U>Attachment IV</U> hereto. For the purposes of this Contract, the term &#147;<U>Working Day</U>&#148; means any day
except Saturdays, Sundays and holidays on which banks are not authorized to open for business in the City of S&atilde;o Paulo, State of S&atilde;o Paulo; and </P>
<P align="justify">
<B>(c) </B>the Parties shall redefine the proportion of interest charges provided in items (a) and (b) above in case of creation or alteration of taxes in order to maintain the financial balance of the date of execution hereof. </P>
<P align="justify">
<B>5.4.</B> Every [&#149;] years as from the commencement of the Products supply under this Contract, the Parties shall negotiate in good faith an increase of P<SUB>2</SUB>, as defined in Clause 4.1 above, which (i) shall never result in a total PU that is higher than the market price for the Product, and (ii) shall not result in any tax adverse effect for either Party. If the Parties fail to reach an agreement as to such increase, the then current P<SUB>2</SUB>shall not be varied.</P>
<P align="center">
<B>CLAUSE SIX &#150; BILLING AND PAYMENT </B></P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B><B> </B></P>

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<B>6.1.</B> <B><I>Issuance of Invoices.</I></B> On the last day of each month, SELLER shall issue an invoice (&#147;<U>NFF</U>&#148;) for each Batch of Product supplied and submit such NFF to BUYER within no more than 3 (three) Working Days from the
issue date, with due regard to the provisions of this Clause and Applicable Law. </P>
<P align="justify">
<B>6.1.1.</B> The NFFs shall be issued to BUYER based on the weighing certificates provided in the manner set forth in <U>Attachment III</U> hereto in relation to each Batch of Product supplied. Each NFF is to reflect (a) the value of the Batch of
Product supplied, in view of the Unit Price and the quantity of the Batch, (b) the portion of the Advance Payment attributable to the Batch of Product supplied, calculated in the manner provided by Clause 5.2 above and for the purposes set forth in
such Clause, and (c) the balance to pay. </P>
<P align="justify">
<B>6.2.</B> <B><I>Payment Term of the NFFs.</I></B> The NFFs are to be paid by BUYER within a period of no more than 30 (thirty) days counting from the date of BUYER&#146;s receipt of original NFF, without any financial compensation or inflation
adjustment being due for such payment term. </P>
<P align="justify">
<B>6.2.1.</B> In the event any NFF contains any irregularity, in BUYER&#146;s opinion, BUYER shall return it to SELLER within a period of no more than 5 (five) Working Days from receipt thereof, with SELLER being responsible for remedying such irregularity and resubmitting it to BUYER within a period of no more than 5 (five) Working Days. </P>
<P align="justify">
<B>6.2.2.</B> In case there is any disagreement between the Parties in relation to any NFF received by BUYER, such disagreement shall be resolved in a period of no more than 30 (thirty) days counting from the date such disagreement is notified by
any Party to the other, with any adjustments (either upwards or downwards) in the value of the NFF in relation to which there has been a disagreement being reflected in the immediately subsequent NFF or, if there are none, paid within the same
deadline established in accordance with Clause 6.2 above, counting from the date on which such adjustments have been determined and agreed by the Parties. </P>
<P align="justify">
<B>6.2.3.</B> BUYER shall issue a debit note for such sums as SELLER expressly recognizes as being owed to BUYER under this Contract, with full offset of such amounts as are due to BUYER, at the latter&#146;s discretion, against amounts that BUYER
has to pay to SELLER. In the event it is not possible or advisable to carry out the offset set forth in this Clause, the debit note shall be paid by SELLER within the same deadline established under Clause 6.2 above counting from the issue day of
such debit note. </P>
<P align="justify">
<B>6.3.</B> <B><I>Manner of Payment.</I></B> Any payment due by BUYER to SELLER shall be made by means of available electronic transfer (TED - &#147;<I>transfer&ecirc;ncia eletr&ocirc;nica dispon&iacute;vel</I>&#148;) of funds to SELLER&#146;s
current account indicated in <U>Attachment IV</U> hereto (or to such other account as may be notified by SELLER to BUYER under the terms of this Contract), with the transfer voucher slip serving as proof of payment and discharge of the respective
obligation. Any payment due by SELLER to BUYER shall also be carried out through the TED system for transferring funds to BUYER&#146;s current account indicated in <U>Attachment IV</U> hereto (or to such other account as may be notified by BUYER to
SELLER under the terms of this Contract), with the transfer voucher slip serving as proof of payment and discharge of the respective obligation. </P>
<P align="justify">
<B>6.4.</B> <B><I>Late Payment Charges.</I></B> In the event any delay should occur with respect to payment of amounts due under this Contract by one Party to the other, the amount due and not paid shall be monetarily restated based on the variation
in the Reference Rate &#150; TR (or other such index as may replace the latter), plus late payment interest of 1% (one per cent) per month, calculated on a <I>pro rata</I> basis between the due date and the date of effective payment, with no other
type of increase being due. </P>
<P align="center">
<B>CLAUSE SEVEN &#150; REPRESENTATIONS OF THE PARTIES </B></P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B><B> </B></P>

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<B>7.1.</B> <B><I>Representations of SELLER.</I></B> SELLER hereby declares to BUYER, as of the signing date below and on the date of each supply of the Product, assuming responsibility for the correctness and truthfulness and completeness of such
representations, that: </P>
<P align="justify">
<B>(a)</B> it is a duly organized and validly established public joint stock corporation under the laws of Brazil and that it has full legal capacity to own and operate its facilities and conduct its business as conducted at present, and is duly
qualified to supply the Product to BUYER under the terms of this Contract; </P>
<P align="justify">
<B>(b)</B> it has obtained all the corporate or similar authorizations required to sign this Contract and to comply with the obligations attributed to it hereunder; </P>
<P align="justify">
<B>(c)</B> this Contract has been duly and validly executed and delivered by SELLER and constitutes a legal, valid and binding obligation insofar as SELLER is concerned and is enforceable against it on the terms hereof;</P>
<P align="justify">
<B>(d)</B> it is not insolvent, under court protection from creditors, extrajudicial or judicial recovery, and it is neither impeded from paying its obligations and nor has it been declared bankrupt; </P>
<P align="justify">
<B>(e) </B>neither the execution and delivery of this Contract nor the consummation of the transactions and performance of the terms and conditions of this Contract by SELLER will (i) result in a violation or breach of or default under any provision
of the by-laws of SELLER; (ii) will result in a violation or breach of or default under any provision of any agreement, indenture or other instrument under which SELLER is bound; or (iii) violate any constitution, statute, law, regulation, rule,
ruling, charge, order, writ, injunction, judgment or decree (&#147;<U>Applicable Law</U>&#148;) of or by any federal, national, state, municipal, local or similar government, governmental, regulatory, administrative or tax authority, agency or
commission or any court, tribunal, or judicial or arbitral body (&#147;<U>Governmental Authority</U>&#148;), which may negatively affect or prevent the performance of its obligations hereunder or under the other Related Contracts; </P>
<P align="justify">
<B>(f)</B> it has good, valid and marketable title to, valid and subsisting leasehold or acquisition interests in or to, or valid, binding and enforceable rights to the Casa de Pedra Mine, and will have and keep good, valid and marketable title to,
valid and subsisting leasehold or acquisition interests in or to, or valid, binding and enforceable rights to the Crushing Units and to TCLD, and other relevant assets and rights required for the performance hereof (&#147;<U>Assets</U>&#148;); </P>
<P align="justify">
<B>(g)</B> all Assets are (i) in good operating condition and repair, and are adequate for the uses to which they are being put and (ii) sufficient for the performance of the obligations of SELLER hereunder;</P>
<P align="justify">
<B>(h)</B> it is not a party and will not enter into any agreement, arrangement, transaction, lease, license, note, mortgage, indenture, contract and other contractual rights and obligations, whether written or oral which negatively affect or
prevent the performance of its obligations hereunder; </P>
<P align="justify">
<B>(i)</B> it has been and will continue to be in full compliance with all Applicable Law related to the performance of this Contract, including without limitation those regarding tax, environmental, labor and social security matters; </P>
<P align="justify">
<B>(j)</B> it has obtained and will keep all licenses, permits and authorizations required for its operation and the performance of this Contract; and </P>
<P align="justify">
<B>(k) </B>there is no court or administrative litigation, action, suit, proceeding, condemnation, investigation, claim, audit, order, decision, decree, writ, judgment, injunction, determination or
award or any arbitration proceeding that may prevent, limit or affect SELLER&#146;s ability to perform any of its obligations under this Contract. </P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B><B> </B></P>

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<P align="justify"><B>7.2.</B> <B><I>Representations of BUYER</I></B>. BUYER hereby declares to SELLER, as of the signing date below and on the date of each supply of the Product, assuming responsibility for the correctness and truthfulness of such representations,
that: </P>
<P align="justify">
<B>(a)</B> it is a duly organized and validly established joint stock corporation under the laws of Brazil and that it has full legal capacity to own and operate its facilities and conduct its business as conducted at present, and is duly qualified
to acquire the SELLER&#146;s Product under the terms of this Contract; </P>
<P align="justify">
<B>(b)</B> it has obtained all the corporate or similar authorizations required to sign this Contract and to comply with the obligations attributed to it hereunder; </P>
<P align="justify">
<B>(c)</B> this Contract has been duly and validly executed and delivered by BUYER and constitutes a legal, valid and binding obligation insofar as BUYER is concerned and is enforceable against it on the terms hereof; </P>
<P align="justify">
<B>(d)</B> it is not insolvent, under court protection from creditors, extrajudicial or judicial recovery, and it is neither impeded from paying its obligations and nor has it been declared bankrupt; </P>
<P align="justify">
<B>(e)</B> neither the execution and delivery of this Contract nor the consummation of the transactions and performance of the terms and conditions of this Contract by BUYER will (i) result in a violation or breach of or default under any provision
of the by-laws of BUYER; (ii) will result in a violation or breach of or default under any provision of any agreement, indenture or other instrument under which BUYER is bound; or (iii) violate any Applicable Law of or by any Governmental Authority
which may negatively affect or prevent the performance of its obligations hereunder; </P>
<P align="justify">
<B>(f)</B> it has been and will continue to be in full compliance with all Applicable Law related to the performance of this Contract, including without limitation those regarding tax, environmental, labor and social security matters; </P>
<P align="justify">
<B>(g)</B> it has obtained and will keep all licenses, permits and authorizations required for its operation and the performance of this Contract; and </P>
<P align="justify">
<B>(h) </B>there is no court or administrative litigation, action, suit, proceeding, condemnation, investigation, claim, audit, order, decision, decree, writ, judgment, injunction, determination or award or any arbitration proceeding that may
prevent, limit or affect BUYER&#146;s ability to perform any of its obligations under this Contract. </P>
<P align="justify">
<B>CLAUSE EIGHT &#150; EFFECTIVE TERM </B></P>
<P align="justify">
<B>8.1.</B> This Contract shall take effect on the signing date below, <U>except</U>, <U>however</U>, that the supply of the Product shall begin on the date set out in Clause 2.1 above. This Contract shall be terminated (a) upon expiration of the
term set forth in Clause 2.1 above or (b) in the manner provided by Clause 10 below, whichever occurs first. </P>
<P align="justify">
<B>8.2.</B> The Parties acknowledge and agree that BUYER shall be registered with the Brazilian Revenue Service (<I>Secretaria da Receita Federal do Brasil</I>) as a preponderantly exporting company (<I>empresa preponderantemente exportadora),
</I>to obtain the benefit of the incentive tax regime addressed to Brazilian exporters for the suspension of the imposition of the PIS and COFINS
Contributions under Law 10,865 dated April 30, 2004. BUYER shall use its best efforts to obtain registration as a preponderantly exporting company within 6 (six) months as from the execution of this Contract or before the commencement of Product
supply hereunder, whatever occurs later. </P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B><B> </B></P>

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<P align="justify"><B>8.2.1. </B>If BUYER fails to obtain registration as a preponderantly exporting company, or if at any time during the term of this Contract PIS and COFINS Contributions are imposed on the supply of Products under this Contract, the Parties agree
that the cost of PIS and COFINS Contributions shall be added to the Unit Price in accordance with Clause 4.2 above and <U>Attachment VI</U> hereto, and BUYER shall use, to the extent possible, the tax credits related to the imposition of PIS and
COFINS contributions on the supply of Products hereunder for each monthly supply of Products to set-off against BUYER&#146;s federal tax liabilities related to the Brazilian Corporate Income Taxes or other federal taxes, within 12 (twelve) months
counted from such monthly supply of Products.</P>
<P align="justify">
<B>8.2.2. </B>If during such 12 (twelve) month term BUYER does not fully set-off the PIS and COFINS credits recognized as a result of the supply of Products hereunder (in the manner described in Clause 8.2.1 above) for each monthly supply of
Products, SELLER shall grant BUYER with non-interest bearing loans, under a current account mechanism, in the amount equivalent to 50% (fifty per cent) of the economic and financial burden equivalent to the amount of PIS and COFINS credits not
set-off, at the end of each 12 (twelve) month term after the date on which the supply of Products hereunder commences to be subject to the imposition of PIS and COFINS Contributions. </P>
<P align="justify">
<B>8.2.3. </B>If and when BUYER succeeds on fully setting-off the PIS and COFINS credits mentioned in Clause 8.2.2, above against federal taxes, BUYER shall repay to SELLER the portion of the loan referred to in Clause 8.2.2 equivalent to the amount
of the credits fully set-off.<B> </B></P>
<P align="justify">
<B>8.3. </B>In addition, the Parties shall use their best efforts to obtain within six (6) months as from the date of execution of this Contract, a binding ruling, in form and substance acceptable to both parties and each shareholder of BUYER, from
the Tax Authorities of the States of Minas Gerais (<I>Secretaria de Estado da Fazenda de Minas Gerais) </I>providing that no ICMS or similar tax will be payable by any of the Parties, or its Affiliates, in connection with any transactions
contemplated herein.</P>
<P align="justify">
<B>8.3.1. </B>If the ICMS starts to be effectively imposed on the supply of Products under this Contract, the Parties agree that the cost of ICMS shall be added to the Unit Price in accordance with Clause 4.2 above and <U>Attachment VI</U> hereto.
In this case, SELLER hereby commits to acquire or cause its Affiliates (as defined in Clause 11.4.2 below) to acquire, for every 6 (six) months (the initial date of the first six-month period shall be considered the date on which the ICMS shall be
considered due according to this Clause 8.3.1), all ICMS credits generated to BUYER and its Affiliates under this Contract and accumulated during each such 6 (six)-month period. The ICMS credits acquisition herein shall be made at nominal value, up to the amount of the ICMS tax debts registered by any branches of SELLER and/or any of the branches of its Affiliates located in the State of Minas Gerais, which credits were
generated in the relevant 6 (six)-month period. SELLER and SELLER&#146;s Affiliates shall acquire all BUYER&#146;s and BUYER Affiliates&#146; ICMS credits generated in the State of Minas Gerais up to the limit of SELLER&#146;s and SELLER
Affiliates&#146; ICMS tax debts generated in that State excluding the SELLER&#146;s and SELLER Affiliates&#146; ICMS tax debts offset against (i) SELLER&#146;s own ICMS tax credits and (ii) ICMS tax credits of branches of wholly owned subsidiaries
of SELLER.</P>
<P align="justify">
<B>8.3.2. </B>If the ICMS starts to be effectively imposed on the supply of Products under this Contract and the SELLER and/or its Affiliates are not able to acquire all ICMS credits generated to BUYER and its Affiliates under this Contract every 6
(six)-month period, SELLER shall submit to BUYER within 10 days after each 6 (six)-month period (as regulated under this Clause 8.3), documents evidencing (i) the amount of ICMS tax debts registered by each of its branches and
the branches of SELLER&#146;s Affiliates located in the State of Minas Gerais; (ii) the amount of ICMS tax credits registered by SELLER&#146;s branches and the branches of its wholly owned subsidiaries that were or shall be transferred to SELLER
within said 6 (six)-month period and (iii) the amount of ICMS tax credits registered by BUYER or any of its Affiliates as a result of the acquisition of Products under this Contract which are transferable to SELLER or SELLER&#146;s Affiliates (the
&#147;<u>Transferable ICMS Tax Credits</u>&#148;). </P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B><B> </B></P>

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<P align="justify"><B>8.3.3. </B>If the amount of ICMS tax debts of SELLER and its Affiliates registered in the relevant 6 (six) month period as a result of the supply of Products under this Contract is lower than the Transferable ICMS Tax Credits determined under
Clause 8.3.2 above, such difference may be carried over (to be set-off) within the following 12 (twelve) months to be transferred from BUYER or BUYER&#146;s Affiliates to SELLER and/or SELLER&#146;s Affiliates as provided in this Clause 8.3. </P>
<P align="justify">
<B>8.3.4. </B>If the Parties fail to obtain the authorizations required by the Tax Authorities of the State of Minas Gerais to transfer ICMS credits as provided in this Clause 8.3 or if any difference mentioned in Clause 8.3.3 above is not
transferred by BUYER or its Affiliates to SELLER or SELLER&#146;s Affiliates within the 12 (twelve) month period mentioned in Clause 8.3.3 above, SELLER shall grant BUYER with non-interest bearing loans, under a current account mechanism, in the
amount equivalent to 50% (fifty per cent) of the economic and financial burden equivalent to the non-transferable portion of the ICMS tax credits registered by BUYER or BUYER&#146;s Affiliates as from the end of each 12 month-term after the date on
which the supply of Products hereunder commences to be subject to the imposition of ICMS. </P>
<P align="justify">
<B>8.3.5. </B>If and when BUYER succeeds on transferring the ICMS tax credits mentioned in Clause 8.3.4, above, BUYER shall repay to the SELLER the portion of the loan referred to in Clause 8.3.4 in the amount of the transferred ICMS tax credits.<B>
</B></P>
<P align="justify">
<B>8.4. </B>Once BUYER&#146;s right to offset or recover the PIS and COFINS credits or to transfer the ICMS tax credits in connection with a given month elapsed after the 5 (five) year period of statute of limitation set forth by the applicable
legislation counted from the recognition of tax credits by BUYER or its Affiliates (as defined in Clause 11.4.2 below) related to PIS and COFINS contributions as set forth in Clause 8.2.1 or related to the ICMS, as set forth in Clause 8.3.1, the
balance, if any, of the relevant loans made in accordance with Clauses 8.3.1, 8.3.2, 8.3.4 and 8.3.5, above, shall be forgiven by the SELLER. </P>
<P align="justify">
<B>8.5.</B><B> </B>In the event that the physical and/or symbolic transfers, flows of invoices, transfer of title or the supply of the Product under this Contract becomes subject to the ICMS at any time during this Contract, or to any value added
tax imposed by the States in a form identical to the ICMS imposition, the Parties agree that Clauses 8.3.1 to 8.3.4 shall apply to the ICMS or such value added tax. </P>
<P align="justify">
<B>8.6.</B> If at any time during the term of this Contract, as a result of change of Applicable Law, PIS and COFINS Contributions and/or the ICMS are replaced by new taxes imposed by any federal, state or municipal authority, which are imposed on
the supply of Products under this Contract, or if other taxes are created and so imposed, the Parties shall negotiate in good faith on how the tax burden will be shared between them. If there is no agreement between the Parties within the period of
six months counted from the change in Applicable Law mentioned in this Clause, the Parties shall share on a 50/50 basis the economic and financial burden equivalent to the amount of said tax burden. </P>
<P align="center">
<B>CLAUSE NINE &#150; ACTS OF GOD AND FORCE MAJEURE </B></P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B><B> </B></P>

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<B>9.1. </B>Provided that the provisions of this Clause are complied with, neither of the Parties shall be held liable to the other Party due to non-fulfillment of any obligation (except pecuniary obligations) attributed to it under this Contract
and insofar as such non-fulfillment is directly attributable to an event of force majeure or act of God under Brazilian law, as defined by article 393, sole paragraph, of the Civil Code, including but not limited to (a) acts of wars (whether
declared or not), epidemics, sabotage, military actions or hostilities and acts of terrorism or the escalation thereof occurring after the date hereof; (b) regional or national strikes, work stoppages, slowdowns or lockouts of any trade category
involved in production of the Product or adversely affecting abilities of either Party to comply with the terms and conditions of this Contract; (c) acts of God and inclement weather or such other atypical events of nature that are not predictable
and/or the effects of which cannot be avoided by employing reasonable control measures; (d) accidents or emergency stoppages in order to prevent accidents which impede or restrict the operation and/or construction and/or expansion of installations
related to the production of the Product; (e) any decision by an arbitration panel or court of law (even if preliminary and subject to further appeal), obtained by or granted in favor of third parties that prevents compliance with either
Party&#146;s obligations under this Contract), except for litigation pertaining to right of first refusal on iron ore from Casa de Pedra Mine, included but not limited the lawsuits listed in <U>Attachment VII</U> hereto (for the avoidance of doubt,
those lawsuits shall not be considered nor deemed to be Force Majeure Event for every and all purposes of this Contract); (f) expropriation, or statement of eminent domain for expropriation purposes (<I>declara&ccedil;&atilde;o de utilidade
p&uacute;blica</I>), or any other restriction imposed by any public authority on either Party's assets adversely affecting either Party&#146;s assets or abilities to comply with the terms and conditions of this Contract; (g) any changes in
Applicable Law occurring after the date hereof which prevents either Party from complying with the terms and conditions of this Contract; and (h) any other circumstance, change, development, event or fact that is unpredictable or unavoidable by the
affected Party and which prevents such Party from complying with the terms and conditions of this Contract, if and to the extent any such events qualify as force majeure under article 393 sole paragraph of the Civil Code (&#147;<U>Force</U>
<U>Majeure Event</U>&#148;). </P>
<P align="justify">
<B>9.1.1 </B>For all purposes, a Force Majeure Event under the other Related Contracts that renders unfeasible or otherwise prevents the performance of the Related Contracts in whole or part, including this Contract, shall be considered a Force
Majeure Event under this Contract. </P>
<P align="justify">
<B>9.2.</B> In case of the occurrence of a Force Majeure Event, the Party whose obligations are being affected by such event of force majeure or act of God (such Party being hereinafter referred to as the &#147;<U>Affected Party</U>&#148;) shall
have 5 (five) Working Days counting from such event to notify the other Party of same and prove by means of appropriate documents, as the case may be, the occurrence of such event, as well as its direct or indirect impact on its obligations under
this Contract. Notwithstanding, the Affected Party is to implement at its own expenses and as soon as possible measures to mitigate the effects and the direction of the event of force majeure or act of God, indicating such measures to the other
Party and keeping the latter constantly informed on the progress of such measures. </P>
<P>
<B>9.3. </B>Should a Force Majeure Event occur: </P>
<P>
<B>(a)</B> up to the end of [&#149;], SELLER shall pay to BUYER a compensation equal to: </P>
<P>
K = P<SUB>2</SUB> x A </P>
<P>
Being: </P>
<P>
K &#150; Compensation Amount </P>
<P>
A &#150; Quantity of Product not supplied due to the Force Majeure Event</P>
<P>
 and </P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B><B> </B></P>

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<B>(b)</B> On or after [&#149;], SELLER shall pay to BUYER a compensation equal to: </P>
<P align="justify">
X = P<SUB>2</SUB> x B </P>
<P align="justify">
Being: </P>
<P align="justify">
X &#150; Compensation Amount </P>
<P align="justify">
B &#150; Quantity of Product not supplied due to the Force Majeure Event in the first 365 days of such Force Majeure Event. </P>
<P align="justify">
<B>9.3.1. </B>Compensation amounts under Clause 9.3 shall be paid by SELLER to BUYER on a monthly basis until the 30<SUP>th</SUP> day of the subsequent month after the occurrence of a Force Majeure Event. Such provision shall apply to subsequent
months, if the Force Majeure Event continues. </P>
<P align="center">
<B>CLAUSE TEN &#150; DEFAULT, MATERIAL DEFAULT, MATERIAL BREACH, INDEMNIFICATION, TERMINATION AND CONSEQUENCES OF TERMINATION </B></P>
<P align="justify">
<B>10.1.</B> SELLER shall not be deemed to have breached this Contract if the annual quantity of Product supplied by SELLER to BUYER in any given Mining Year is equal to or greater than [&#149;]% [&#149;] of the Nominated Annual Quantity, provided
that amounts delivered below the Basic Annual Quantity shall be considered as Carry-Over Amounts. </P>
<P align="justify">
<B>10.2.</B> SELLER shall be deemed to have breached this Contract if, for reasons attributable to SELLER, the annual quantity of Product supplied by SELLER to BUYER in any given Mining Year is lower than [&#149;]% [&#149;] but equal to or greater
than [&#149;]% of the Nominated Annual Quantity (&#147;<U>Default</U>&#148;).</P>
<P align="justify">
<B>10.2.1. </B>Should a Default occur under Clause 10.2, then SELLER shall cure the Default, as early as practicable, but not later than [&#149;] days from the date of receipt of a written communication by BUYER to that effect, either by (i)
supplying Product to BUYER (but solely to the extent necessary to reach at least [&#149;]% [&#149;] of the Nominated Annual Quantity), or (ii) paying a monetary compensation to BUYER for the difference between [&#149;]% [&#149;] of the Nominated
Annual Quantity and the quantities effectively supplied, or (iii) both supplying Product (in an amount lower than the necessary to reach [&#149;]% [&#149;] of the Nominated Annual Quantity) and paying monetary compensation for the difference between
the quantity of Products effectively supplied and [&#149;]% of the applicable Nominated Annual Quantity, in either case of (i), (ii) and (iii), as approved by the Brazilian SPC (which approval shall not be unreasonably withheld or delayed). If the
Brazilian SPC does not approve such cure, SELLER shall cure the Default by paying the monetary compensation to BUYER. Any monetary compensation payable by SELLER to BUYER hereunder shall be determined as follows: </P>
<P align="justify">
<B>(a)</B> the amount of such monetary compensation shall be discussed and agreed in good faith between SELLER and BUYER (with the Brazilian SPC&#146;s good faith approval) within 30 (thirty) days from the date a written request to that effect is
made by BUYER and shall correspond to (without the duplication or double counting) (x) the cash flow (<I>fluxo de caixa</I>) shortfall in connection with the loss of revenues resulting from sales of products not effected by BUYER (it being
understood that &#147;cash flow&#148; shall mean BUYER&#146;s net sales revenues (<I>receita l&iacute;quida de vendas</I>) minus variable costs (<I>custos vari&aacute;veis</I>) associated with such revenues shortfall and determined based on the then
effective long and mid-term business plans of BUYER) and (y) any penalties, damages or indemnities paid by BUYER to any third parties under commercial arrangements as a result of the Default or Material Default, as the
case may be (but excluding penalties, damages or indemnities, if any, payable to purchasers of BUYER&#146;s products in connection with offtake or similar agreements) (the amount of such compensation, the &#147;<u>Compensation Amount</u>&#148;). For
the avoidance of doubt, an example of the calculation of the Compensation Amount is attached hereto as <u>Attachment VIII</u>; <b> </b></P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B><B> </B></P>

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<P align="justify"><B>(b)</B> in case SELLER and BUYER do not reach an agreement on the Compensation Amount, such amount shall be determined by BUYER&#146;s independent auditor within 30 (thirty) days from the date a written request to that effect is made either by
SELLER or BUYER; and </P>
<P align="justify">
<B>(c)</B> the Compensation Amount shall be payable by SELLER to BUYER within 30 (thirty) days from the date (i) SELLER and BUYER reach an agreement on such amount or (ii) such amount is determined by BUYER&#146;s independent auditor, as the case
may be. </P>
<P align="justify">
<B>10.3. </B>SELLER shall be deemed to have materially breached an obligation set forth in this Contract if, for reasons attributable to SELLER, (i) the annual quantity of Product supplied by SELLER to BUYER in any given Mining Year is lower than
[&#149;]% [&#149;] of the Nominated Annual Quantity; or (ii) if the weighted average of Fe contents of Products supplied to BUYER in any given Mining Year is lower than the Fe content indicated in the Guaranteed Specifications (&#147;<U>Material
Default</U>&#148;). </P>
<P align="justify">
<B>10.3.1. </B>Should a Material Default occur under Clause 10.3, then SELLER shall cure the Material Default, as early as practicable, but not later than [&#149;] days from the date of receipt of a written communication to that effect, either by
(i) supplying Product to BUYER (but, in case of Material Default under Clause 10.3 (i), solely to the extent necessary to reach [&#149;]% [&#149;] of the Nominated Annual Quantity and/or, in case of Material Default under Clause 10.3 (ii), solely to
the extent necessary to meet the Guaranteed Specifications in relation to the Products supplied to BUYER in the relevant Mining Year), (ii) paying the Compensation Amount to BUYER, or (iii) both supplying a quantity of Product (in an amount lower
than the necessary to reach [&#149;]% [&#149;] of the Nominated Annual Quantity) and paying monetary compensation for the difference between the quantity of Products effectively supplied and [&#149;]% of the applicable Nominated Annual Quantity, in
either case of (i), (ii) and (iii), as approved by the Brazilian SPC (which approval shall not be unreasonably withheld or delayed). If BUYER does not approve such cure, SELLER shall cure the Material Default by paying the Compensation Amount to
BUYER. If such Material Default remains uncured for a period of [&#149;] days from the date of receipt of a written communication to that effect, then, BUYER may claim for determination of the indemnification amount according to the provisions of
Clause 10.2.1, items (b) and (c). </P>
<P align="justify">
<B>10.4.</B> If BUYER breaches any obligation set forth herein (&#147;<U>BUYER&#146;s Default</U>&#148;), SELLER shall provide written notice of default to BUYER within [&#149;] days following the occurrence of such breach (&#147;<U>Notice of BUYER&#146;s Default</U>&#148;). SELLER and BUYER shall discuss in good faith the amount of the indemnification due by BUYER to SELLER, or any other remedies reasonably available, which, in no event, shall be greater than the
loss of income of SELLER deriving from sales of Product to BUYER not effected as a consequence of the BUYER&#146;s Default. If no agreement is reached by the Parties within [&#149;] days as from receipt of the Notice of BUYER&#146;s Default, SELLER
may claim for determination of the indemnification amount by SELLER&#146;s independent auditor. </P>
<P align="justify">
<B>10.5. </B>The Parties acknowledge and agree that this Contract is not intended to be terminated before the full performance hereof unless exceptional circumstances occur or otherwise expressly provided hereunder, due to the substantial
investments made by both Parties for the performance thereof and the reliance of both Parties on the continued and full performance hereof. Without prejudice to any other rights provided in this Contract, but with the exclusion of any other
termination right, except for those provided in this Clause 10, this Contract may be terminated in the cases indicated below and the Party that gives rise to such termination, either due to breach of contract or other circumstance attributable
to it (with such Party being hereinafter referred to as the &#147;<u>Defaulting Party</u>&#148;), shall not have any right to file a complaint and/or claim of any kind of indemnity whatsoever: </P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B><B> </B></P>

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<P align="justify"><B>(a)</B><B> </B>by the other Party, at its exclusive discretion, in the event of non-compliance by the Defaulting Party with any monetary obligation set forth in this Contract, provided that the other Party notifies the Defaulting Party with
respect to such non-performance and the Defaulting Party does not remedy such non-compliance within a period of [&#149;] days counting from the date of receipt of such notification; or </P>
<P align="justify">
<B>(b)</B> by the other Party, at its exclusive discretion, in the event of occurrence of a Material Default not cured according to Clause 10.3 (&#147;<U>Material Breach</U>&#148;); or</P>
<P align="justify">
<B>(c) </B>by the other Party, at its exclusive discretion, in case any representation made in this Contract by the Party in Default proves to be incorrect or untruthful, for any reason, as a result of which, at such other Party&#146;s reasonable
judgment, the due performance of this Contract is materially adversely affected, provided that if such incorrect or untruthful matter can be remedied and is not remedied within a period of [&#149;] days counting from the date of receipt of such
notification pointing out the incorrect or untruthful representation; or </P>
<P align="justify">
<B>(d)</B> by the other Party, at its exclusive discretion, in the event of acceptance of a process for court recovery, the commencement of extrajudicial recovery, declaration of bankruptcy or dissolution of the Party in Default; or </P>
<P align="justify">
<B>(e)</B> by BUYER, if any other Related Contract is terminated by BUYER due to a Material Breach by SELLER, as defined in such Related Contract. </P>
<P align="justify">
<B>10.6.</B> In the event this Contract should be terminated for a reason attributable to BUYER, BUYER shall indemnify SELLER for losses and damages (including any loss of income (business interruption) and indirect losses and damages, including
consequential damages) effectively incurred due to termination of this Contract, which indemnity is hereby fixed in an amount equal to the balance of SELLER&#146;s debt to BUYER in relation to the Advance Payment (if any) as of the termination date,
with SELLER being authorized, to such end, to offset the amount of such indemnity against SELLER&#146;s debt to BUYER in relation to the Advance Payment. </P>
<P align="justify">
<B>10.7.</B> If upon full supply of the Contractual Quantity by SELLER to BUYER, there is any balance of the Advance Payment made by BUYER to SELLER under Clause 5.1 (&#147;<U>Balance</U>&#148;), BUYER shall pay to SELLER an amount equal to such
Balance (&#147;<U>Payment</U>&#148;), in consideration for (i) the investments made by SELLER in order to produce and supply the Product to BUYER (purchasing equipment, hiring personnel, implementing systems, etc.), and (ii) the commitment assumed
by SELLER to make the Contractual Quantity available to BUYER, including prejudice to any other business opportunities involving the iron ore from Casa de Pedra Mine. It is hereby agreed by the Parties on an irrevocable basis that the Advance
Payment shall be immediately offset against the Payment. </P>
<P align="justify">
<B>10.8.</B> In case SELLER commits a Default or Material Default under this Contract and such Default or Material Default is also deemed a Default or Material Default under any other Related Contract, SELLER&#146;s indemnification to BUYER under
Clauses 10.2 and 10.3, as applicable, will be considered as SELLER&#146;s indemnification to BUYER for the Default or Material Default for all Affected Contracts. <B> </B></P>
<P align="justify">
<B>10.8.1. </B>For the avoidance of doubt, the Parties hereby acknowledge that any Compensation Amount (as defined in each Related Contract or herein) shall be alternative and not cumulative remedies. </P>
<P align="justify">
Therefore, if BUYER receives any Compensation Amount under this Contract or any Related Contract for a specific Default or Material Default, BUYER shall not be entitled to receive any further compensation whether under this Contract, the other
Related Contracts, or otherwise, for
such Default or Material Default (to the extent that the Compensation Amount under this Contract overlaps the Compensation Amount under the other Related Contracts, and vice-versa). </P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B><B> </B></P>

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<P align="center"><B>CLAUSE ELEVEN &#150; GENERAL PROVISIONS </B></P>
<P align="justify">
<B>11.1.</B> The Parties acknowledge and agree that this Contract contains all the requisites needed for this instrument serving as a valid document for commencement of execution proceedings (<I>t&iacute;tulo executivo extrajudicial</I>), for all
legal intents and purposes. </P>
<P align="justify">
<B>11.2.</B> This Contract reflects the entire understanding of the Parties with respect to its scope and replaces any and all previous agreements and understandings. Each one of the Parties hereby acknowledges and confirms that it is not signing
this Contract based on any representation, guarantee or other commitment by the other Party that is not fully reflected in the provisions hereof. Any matter relating to supply of the Product that is not specifically provided in this Contract shall
be examined separately and mutually agreed upon by the Parties. </P>
<P align="justify">
<B>11.3.</B> Without prejudice to the provisions contained in Clause 11.4 below, this Contract binds the Parties, and/or successors on any degrees whatsoever. In this sense, in the event of merger, amalgamation (upstream merger under Brazilian law),
spin-off or change in control of either of the Parties, continuity of this Contract is expressly assured, obligating the successor or any third parties related in any manner to the merger, amalgamation, spin-off or change in control of either of the
Parties to comply with all the clauses, terms and conditions established in this Contract. </P>
<P align="justify">
<B>11.4.</B> Neither Party shall assign or transfer (in whole or in part) its rights or obligations under this Contract without the prior written consent of the other Party, which consent shall not be unreasonably withheld, delayed or conditioned;
provided, however, that (i) each of the Parties may assign all (but not a part) of its rights and obligations under this Contract without the prior written consent of the other Party to one of its Affiliates, and (ii) in case any third party or an
Affiliate of SELLER acquires the mining rights relating to the Casa de Pedra Mine, (x) SELLER shall assign all (but not a part) of its rights and obligations under this Contract to such third party or Affiliate of SELLER if there is no split
(<I>desmembramento</I>) of such mining rights or (y) if split (<I>desmembramento</I>) of such mining rights occurs, SELLER and BUYER shall discuss in good faith to agree as to whether and how this Contract will be assigned (in whole or in part)
based on the shared understanding that the Parties shall seek the best way to ensure that all obligations under this Contract shall continue to be fulfilled in accordance with the terms hereof. This Contract shall be binding upon and inure to the
benefit of the Parties and their respective successors and permitted assigns and shall be enforceable by the Parties hereto and their respective successors and permitted assigns.</P>
<P align="justify">
<B>11.4.1.</B> In addition to the foregoing, in the event of an assignment or transfer as stated in Clause 11.4 (i) the assigning Party shall (a) ensure that, as a part of such assignment, the assignee accepts the assignment of all rights and
obligations of the assigning Party under this Contract, and (b) shall remain jointly liable with the assignee for all obligations under this Contract. </P>
<P align="justify">
<B>11.4.2. </B>For the purposes of this Contract, &#147;<U>Affiliates</U>&#148; shall mean, with respect to any Party, a person that directly or indirectly controls, or is under common control with, or is controlled by, such person.  As used in this
definition, &#147;<U>control</U>&#148; (including, with its correlative meanings, &#147;<U>controlled by</U>&#148; and &#147;<U>under common control with</U>&#148;) shall mean possession, directly or indirectly, of securities having 50% or more of
the voting power for the election of directors or other governing body of a corporation or 50% or more of the partnership or other ownership interests of any other person (other than as a limited partner of such other person). </P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B><B> </B></P>

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<P align="justify">
<B>11.5.</B> This Contract may only be amended or modified by means of prior agreement between the Parties and the signing of a specific amendment signed by both. </P>
<P align="justify">
<B>11.6.</B> Any omission or tolerance by the Parties in requiring the correct and punctual compliance with the specific or generic terms and conditions contained in this Contract, or in exercising any prerogative hereunder, shall not constitute any
kind of waiver, desistance or novation, and nor shall it affect the right of the Parties to exercise them at any time. </P>
<P align="justify">
<B>11.7.</B> In the event any provision of this Contract should be considered invalid, illegal or unenforceable for any reason, the validity, legality and enforceability of the remaining provisions contained in this Contract shall not in any manner
whatsoever be affected or prejudiced thereby and shall remain in full force and effect. The Parties shall negotiate in good faith to replace any provisions considered invalid, illegal or unenforceable with valid, legal and enforceable provisions,
the effects of which shall approximate as closely as possible the legal and economic effects intended by the provisions considered invalid, illegal or unenforceable. </P>
<P align="justify">
<B>11.8.</B> This Contract does not create or intend to create any kind of company, association, joint venture, cooperative, partnership, consortium, agency, and neither does it attribute or aim to create any kind of relationship involving principal
and agent, commercial representation, business management or other kind of similar legal arrangement between the Parties, except for those expressly provided in this Contract and directly related to the supply of the Product by SELLER to BUYER. </P>
<P align="justify">
<B>11.9. </B>Each Party is responsible for covering its own costs and other expenses incurred or to be incurred in relation to the signing and execution of this Contract. </P>
<P align="justify">
<B>11.10.</B> Should, after the signature of this Contract, any taxes be created, or any tax rates, taxable base or manners for calculating any tax existing at the signing date below and involving taxable events related in any manner to this
Contract be altered, via Applicable Law, or any special tax benefit available to the Parties related to this Contract granted by any federal, state of municipal taxing authorities be extinguished, the Parties shall negotiate, in good faith, to amend
this Contract in order to restore its economic and financial balance.</P>
<P align="center">
<B>CLAUSE TWELVE &#150; CONFIDENTIALITY </B></P>
<P align="justify">
<B>12.1.</B> During the time this Contract remains in effect and for the period of 5 (five) years after termination hereof, the Parties undertake &#150; for themselves as well as on behalf of third parties related to them &#150; to maintain absolute
secrecy regarding the terms and conditions of this Contract, and also with respect to any and all information obtained as a result of this Contract, except (a) if the disclosure of such information is determined by this Contract or if such
information is already proven to be in the public domain without failure of the Party receiving confidential information of the other Party, (b) with the express and prior authorization of the other Party, (c) in order to exercise any rights
attributed to the Parties according to this Contract, (d) required by Applicable Law, by an order of any governmental authority or as a result of a judicial order, in which case the disclosure shall be limited to the terms and conditions that are to
be disclosed pursuant to such determination, and provided that the Party subject to such judicial order shall promptly notify the other Party and thus give such other Party the opportunity to limit or avoid the disclosure, to the extent permitted by
the Applicable Law or (e) in case of BUYER, the disclosure of information to the Brazilian SPC, Japanese SPC, shareholders of Japanese SPC and Posco. </P>
<P align="center">
<B>CLAUSE THIRTEEN &#150; COMMUNICATIONS </B></P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B><B> </B></P>

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<P align="justify">
<B>13.1.</B> All notices, communications, requests, authorizations and consents that have to be transmitted or given by the Parties under this Contract shall only be valid and effective if provided in writing through correspondence (under protocol
or sent against notice of receipt) or fax (with proof of transmission) addressed in the following manner (or in such other manner as may be notified subsequently by one Party to the other): </P>
<P>
<B>(a)</B> BUYER: </P>
<P>
Address: <I>Alameda da Serra, n&ordm; 400, 9&ordm; andar <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; CEP 34000-000 &#150; Nova Lima &#150; MG </I><br>
Phone: (0xx31) 3269-1410 <br>
Fax: (0xx31) 3269-1414 <br>
<I>At.: Diretor Comercial </I>(Attention of Commercial Director) <br>
<I>Cc.: Diretor de Opera&ccedil;&otilde;es e Diretor Jur&iacute;dico </I>(Copied to Operations Director and Legal Director) </P>
<P>
<B>(b)</B> SELLER: </P>
<P>
Address: <I>Av. Brigadeiro Faria Lima, n&ordm; 3.400, 20&ordm; andar<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </I><I>CEP 04538-132 &#150; S&atilde;o Paulo &#150; SP </I><br>
Phone: (0xx31) 3749-1210 <br>
Fax: (0xx31) 3749-1284 <br>
<I>At.: Diretor de Minera&ccedil;&atilde;o</I> (Attention of Mining Director) <br>
<I>Cc.: Diretor Comercial de Min&eacute;rio de Ferro e Diretor Jur&iacute;dico</I> (Copied to Iron Ore Commercial Director and Legal Director) </P>
<P>
<B>(c)</B> BIG JUMP PARTICIPA&Ccedil;&Otilde;ES S.A.: </P>
<P>
Address: <I>Rua da Consola&ccedil;&atilde;o, 247, 3rd Floor, Room 85A, S&atilde;o Paulo, Brazil</I><br>
Phone: (0xx11) 3170-8509 <br>
Fax: (0xx11) 3170-8549 <br>
<I>At.: Diretor Presidente (Attention of Director-President)</I> </P>
<P>
<B>(d)</B> BRAZIL JAPAN IRON ORE CORPORATION: </P>
<P>
Address: <I>5-1, Kita-Aoyama 2-chome, Minato-ku, Tokyo, 107-8077, Japan</I><br>
Phone: (81 3) 3497-3365 <br>
Fax: (81 3) 3497-3342 <br>
<I>At.: Mr. Yasuhiro Miyata </I></P>
<P>
<B>(e)</B> POSCO: </P>
<P>
Address:  <I>892 Daechi 4-dong Kangnam-gu, Seoul, 135-777, Korea </I><br>
Phone: (82 2) 3457-0306 <br>
Fax: (82 2) 3457-1908 <br>
<I>At.: Mr. Myung Deuk Seo (Group Leader)</I> </P>
<P align="center">
<B>CLAUSE FOURTEEN &#150; ARBITRATION </B></P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B><B> </B></P>

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<B>14.1. </B>The Parties are to submit any dispute, controversy or disagreement resulting from this Contract or related to same solely and exclusively to arbitration in the manner provided by Law No. 9.307 of September 23, 1996 and by this Clause,
provided that such dispute, controversy or disagreement is not settled amicably by the Parties within a period of 30 (thirty) days counting from the date on which one of the Parties has notified the other regarding the existence of such dispute,
controversy or disagreement. Arbitration shall be definitive and the results thereof binding on the Parties. </P>
<P align="justify">
<B>14.2.</B> The arbitration proceedings shall take place in the City of S&atilde;o Paulo, State of S&atilde;o Paulo, and shall be administered by the International Court of Arbitration of the International Chamber of Commerce
(&#147;<U>ICC</U>&#148;) and, except as provided in this Contract, shall be instituted and processed according to the Rules of Arbitration of the ICC (&#147;<U>Rules</U>&#148;). </P>
<P align="justify">
<B>14.3.</B> The arbitration panel shall be made up of 3 (three) arbitrators, with each one of the Parties being responsible for appointing 1 (one) arbitrator and these 2 (two) arbitrators appointed by the Parties responsible for jointly appointing
the third arbitrator, who shall preside over the arbitration panel. </P>
<P align="justify">
<B>14.4.</B> The charges, fees and other expenses directly related to the arbitration proceedings, which include the costs due to the ICC and the arbitrators&#146; fees and, as the case may be, any expert witnesses called, shall be initially borne
by both Parties in the same proportion, provided that the provisions contained in the Rules are complied with, though the arbitration award shall define the final allocation of such charges, fees and other expenses between the Parties. Each Party
shall cover the expenses of the respective attorneys and assistants that it engages to represent it or to assist it during the arbitration proceedings. </P>
<P align="justify">
<B>14.5.</B> Without prejudice to the other provisions contained in this Contract, the Parties hereby acknowledge and admit the possibility of appealing to the Judiciary to obtain any urgent court measures that may be considered necessary to
preserve their respective rights and interests and such measures are not to be interpreted as a waiver by the Parties of arbitration proceedings. For such purposes and for any court enforcement of an arbitration award issued by the arbitration
panel, the Parties hereby choose the courts of the Judicial District of S&atilde;o Paulo, State of S&atilde;o Paulo, as having sole jurisdiction, with express waiver of any other courts, regardless of however much jurisdictional privilege they might
have. </P>
<P align="justify">
In witness whereof, the Parties have caused this Contract to be executed in six (6) counterparts with the same form and contents, before the five (5) undersigned witnesses. </P>
<P align="center">
S&atilde;o Paulo, SP, October 21<SUP>st</SUP>, 2008 </P>
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<P align="center">&nbsp;</P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B><B> </B></P>

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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.5
<SEQUENCE>16
<FILENAME>exhibit105.htm
<DESCRIPTION>EXHIBIT 10.5
<TEXT>
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<P align="right"><a href="sidform20f2008a.htm#topexhibit">Table of Contents</a></P>
<A name="page_1"></A>

<P align="center">
<B><U>LOW SILICA ROM IRON ORE SUPPLY CONTRACT</U></B><B> </B></P>
<P>
By means of this private legal instrument, on the one hand, in its capacity as buyer, </P>
<P align="justify">
<B>NACIONAL MIN&Eacute;RIOS S/A</B>, a joint stock corporation organized and existing under Brazilian law, with its head office located in the City of Congonhas, State of Minas Gerais, Federal Republic of Brazil, at the address known as
&#147;<I>Logradouro Casa de Pedra</I>&#148;, s/n (unnumbered), Part, enrolled with the General Registry of Corporate Taxpayers of the Brazilian Ministry of Finance (CNPJ/MF) under No. 08.446.702/0001 -05 (and its successors, hereinafter referred to
as &#147;<U>BUYER</U>&#148;), </P>
<P>
and, on the other hand, in its capacity as seller, </P>
<P align="justify">
<B>COMPANHIA SIDER&Uacute;RGICA NACIONAL</B>, a joint stock corporation organized and existing under Brazilian law, with its head office located in the City of Rio de Janeiro, State of Rio de Janeiro, at Rua S&atilde;o Jos&eacute; No. 20, Suite
1,602, Part, enrolled with the CNPJ/MF under No. 33.042.730/0001 -04 (hereinafter referred to as &#147;<U>SELLER</U>&#148;), </P>
<P>
(BUYER and SELLER are individually identified as &#147;<U>Party</U>&#148; and jointly as &#147;<U>Parties</U>&#148;). </P>
<P>
and, as intervening parties: </P>
<P align="justify">
<B>BIG JUMP ENERGY PARTICIPA&Ccedil;&Otilde;ES S.A</B>., a corporation organized and existing under Brazilian law, with its head offices located in the City of S&atilde;o Paulo, State of S&atilde;o Paulo, at Rua da Consola&ccedil;&atilde;o, 247,
3<SUP>rd</SUP> Floor, Room 85A, enrolled with the CNPJ/MF under No. 09.431.882/0001 -14, herein represented in accordance with its by-laws (and its successors, hereinafter referred to as the &#147;<U>Brazilian SPC</U>&#148;); </P>
<P align="justify">
<B>BRAZIL JAPAN IRON ORE CORPORATION</B>, a company duly organized and existing under the laws of Japan, with its head office located at 5-1, Kita-Aoyama 2-chome, Minato-ku, Tokyo 107-8077, Japan, herein represented in accordance with its by-laws
(hereinafter referred to as the &#147;<U>Japanese</U> <U>SPC</U>&#148;); </P>
<P align="justify">
<B>POSCO</B>, a company duly incorporated and validly existing under the laws of Korea, with head offices at 892 Daechi 4-dong Kangnam-gu, Seoul, 135-777, Korea, herein represented in accordance with its by-laws (&#147;<U>Posco</U>&#148;); </P>
<P align="justify">
(The Brazilian SPC, the Japanese SPC and Posco are collectively hereinafter referred to as the &#147;<U>Intervening Parties</U>&#148;); </P>
<P align="center">
<B>RECITALS </B></P>
<P>
<B>WHEREAS</B>: </P>
<P align="justify">
<B>(A)</B> SELLER owns mining rights that assure it the operation of the iron ore mine known as the &#147;<I>Casa de Pedra Mine</I>&#148;, located in the City of Congonhas, State of Minas Gerais (hereinafter referred to as the &#147;<U>Casa de Pedra
Mine</U>&#148;); </P>
<P align="justify">
<B>(B)</B> BUYER produces and sells iron ore and intends to acquire crude and unprocessed iron ore with low silica (SiO<SUB>2</SUB>) content on a run-of-mine (ROM) basis from SELLER;</P>
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<B>(C)</B> SELLER intends to supply BUYER with crude and unprocessed iron ore with low silica (SiO<SUB>2</SUB>)content obtained from the Casa de Pedra Mine and BUYER intends to acquire such iron ore from SELLER; </P>
<P align="justify">
<B>(D)</B> the Parties simultaneously execute (i) a High Silica ROM Iron Ore Supply Contract, (ii) an Iron Ore Supply Contract and Other Covenants (Tailing Dam Rejects), (iii) a Port Operating Services Agreement; and (iv) a Support Agreement (solely
in relation to Clause 2 thereof) (all such agreements, including this Low Silica ROM Iron Ore Supply Contract, but excluding the Iron Ore Supply Contract and Other Covenants (Tailing Dam Rejects), the &#147;<U>Related</U> <U>Contracts</U>&#148;);
and </P>
<P align="justify">
<B>(E)</B> the performance of each Related Contract will be considered part of the performance of a more comprehensive transaction between the Parties, which encompasses the supply of iron ore, railway transport of iron ore, port operating services
and other transactions, as reflected in such Related Contracts and other arrangements and documents executed between the Parties. </P>
<P align="justify">
The Parties hereby sign and execute this Low Silica Iron Ore Supply Contract (the &#147;<U>Contract</U>&#148;), which shall be governed by the following clauses and conditions: </P>
<P align="center">
<B>CLAUSE ONE &#150; SCOPE</B> </P>
<P align="justify">
<B>1.1.</B> The scope of this Contract is the supply by SELLER to BUYER of crude and unprocessed iron ore run-of-mine (ROM) from the Casa de Pedra Mine, with low silica (SiO<SUB>2</SUB>) content and such other chemical and physical properties as set forth in <U>Attachment I</U> hereto (the &#147;<U>Product</U>&#148;), free of any encumbrance, charges, debts or doubts, with due regard to the other clauses of this Contract. </P>
<P align="center">
<B>CLAUSE TWO &#150; TERM, QUANTITIES AND CONDITIONS FOR SUPPLY </B></P>
<P>
<B>2.1.</B> <B><I>Term of Supply.</I></B> The Product shall be supplied for [&#149;]<SUP>1</SUP> Mining Years, beginning in the Mining Year of 2008. For the intents and purposes of this Contract, &#147;<U>Mining Year</U>&#148; shall mean the period
of 12 (twelve) months beginning on April 1<SUP>st</SUP> of a calendar year and ending on March 31<SUP>st</SUP> of the immediately subsequent calendar year. </P>
<P align="justify">
<B>2.1.1.</B> <B><I>Extension.</I></B> In case there are any quantities of Products outstanding as of the end of the [&#149;] Mining Year of this Contract, the term shall be automatically extended for as much time as necessary for the supply of such
outstanding quantities, subject to all terms and conditions hereof. In case the term of this Contract is extended according to this Clause 2.1.1, the maximum Basic Annual Quantities applicable to all subsequent Mining Years shall be [&#149;] wet
metric tons of Product.</P>
<P align="justify">
<B>2.2.</B> <B><I>Contractual Quantity and Basic Annual Quantities.</I></B> Without prejudice to the provision contained in Clause 2.2.1 below, SELLER undertakes to make available to BUYER in each Mining Year the quantity of Product indicated in the
respective column of <U>Attachment II</U> hereto (with such quantity of Product being hereinafter referred to as the &#147;Basic Annual Quantity&#148; and the sum of the Basic Annual Quantities as the &#147;<U>Contractual Quantity</U>&#148;). </P>
<P align="justify">
<B>2.2.1.</B> Notwithstanding the provision contained in Clauses 2.2 and 2.1.1. above, BUYER may acquire, at BUYER&#146;s sole discretion, in each Mining Year, a quantity of Product that ranges from [&#149;] to </P>
<P align="justify">___________________<br>
<SUP>1</SUP> Text marked as [&#149;] denotes CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. </P>
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[&#149;]% [&#149;] of the Basic Annual Quantity set forth for the Mining Year in question (&#147;<U>Nominated</U> <U>Annual Quantity</U>&#148;), <U>provided</U> that: </P>
<P align="justify">
<B>(a)</B> the total quantity of Product to be supplied under this Contract shall never exceed the Contractual Quantity;</P>
<P align="justify">
<B>(b)</B> if BUYER, in a certain Mining Year, for any reason whatsoever, acquires a quantity of Product lower than the Basic Annual Quantity applicable to such Mining Year, BUYER shall have the right to carry over the difference between the Basic
Annual Quantity and the actual quantity of Product supplied to BUYER in such Mining Year (the &#147;<U>Carry-Over</U> <U>Amount</U>&#148;) for the subsequent Mining Years; provided that, in any given Mining Year, the effective quantities of Product
to be supplied, including any Carry-Over Amounts, shall not be greater than [&#149;]% [&#149;] of the Basic Annual Quantity for the relevant Mining Year; and </P>
<P align="justify">
<B>(c) </B>the acquisition by BUYER of amounts below the Basic Annual Quantity shall not be considered as a BUYER&#146;s Default (as defined in Clause 10.4 below). </P>
<P align="justify">
<B>2.3. </B><B><I>Monthly Quantity.</I></B> SELLER undertakes to make available to BUYER in each month of a Mining Year, the quantity of Product indicated in the respective column of Attachment II hereto (with such quantity of Product being
hereinafter referred to as the &#147;<U>Monthly Quantity</U>&#148;), <U>provided</U>, <U>however,</U> that BUYER may, without prejudice to the provision contained in Clause 2.2 above, acquire, and SELLER shall supply in such case, in each month of a
Mining Year a quantity of Product that is up to [&#149;]% [&#149;] greater than the Monthly Quantity, and BUYER shall nominate such additional quantity in the quarterly nomination, as provided in Clause 2.5.2. </P>
<P align="justify">
<B>2.4.</B> <B><I>Quantities Exceeding Threshold.</I></B> If, for any reason whatsoever, BUYER requires more than [&#149;]% of the Monthly Quantity or Basic Annual Quantity during, respectively, each month of the term of this Contract or each Mining
Year, BUYER and SELLER shall discuss in good faith such additional Product requirement. </P>
<P align="justify">
<B>2.5. </B><B><I>Nomination Procedure</I></B><B>. </B>The quantity of Product to be supplied by<B> </B>SELLER to BUYER under this Contract during the term hereof shall be determined as follows: </P>
<P align="justify">
<B>2.5.1. </B>BUYER shall inform by written notice to SELLER the Nominated Annual Quantity and an estimate of the Monthly Quantities to be supplied under this Contract in each Mining Year, determined in accordance with BUYER's annual budget, subject
to Clauses 2.2, 2.3 and 2.4 above by October 31 of the preceding Mining Year. Unless the Nominated Annual Quantity informed by BUYER is not in accordance with Clauses 2.2, 2.3 and 2.4 above, such Nominated Annual Quantity shall be the quantity of
Product established for the relevant Mining Year. For the avoidance of doubt, the acquisition by BUYER of amounts below the Nominated Annual Quantity shall not be considered as BUYER&#146;s Default (as defined in Clause 10.4 below). </P>
<P align="justify">
<B>2.5.2. </B>At least [&#149;] days<B> </B>before the commencement of each quarter of each Mining Year, BUYER shall deliver to SELLER a nomination of the Monthly Quantity(ies). (hereinafter referred to as the &#147;<U>Nominated Monthly
Quantity</U>&#148;). SELLER undertakes to make available to BUYER in each month of a Mining Year, but BUYER shall not in any event be obligated to take delivery of, the quantity of the Nominated Monthly Quantity. For the avoidance of doubt, the
acquisition by BUYER of amounts below the Nominated Monthly Quantities shall not be considered as BUYER&#146;s Default (as defined in Clause 10.4 below). </P>
<P align="justify">
<B>2.6.</B> <B><I>Quantities Effectively Supplied.</I></B> The quantities of Product effectively supplied under this Contract shall be determined based on the weighing of each Batch (as defined below) of Product supplied, to be carried out in
accordance with the criteria and other procedures set forth in <U>Attachment</U><u>III</u> hereto, and shall be based on the weighing certificates provided under the terms of said <u>Attachment</u> <u>III</u> hereto. For the purposes of this Contract, the term &#147;<u>Batch</u>&#148; means the quantity of Product effectively
supplied during the period encompassed between the first and last day of a determined month, as indicated on the weighing certificates provided. </P>
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<P align="justify"><B>2.7.</B> <B><I>Place of Delivery, Transfer of Ownership and Quantities not Received.</I></B> SELLER shall deliver the Product at a stockyard with a maximum capacity of 100,000 wet metric tons, located within a radius of 500m (five hundred meters)
from Casa de Pedra Mine, to be defined by SELLER. It shall be the responsibility of BUYER to remove the Product from the place of delivery set forth in this Clause. The Product shall be considered as having been acquired by BUYER at the moment of
such delivery, with BUYER assuming all the risks related to the Product as from such moment. </P>
<P align="justify">
<B>2.7.1.</B> Whenever BUYER fails to withdraw any quantity of Product effectively delivered pursuant to Clause 2.7 above and, as a result of such failure, the storage capacity of such stockyard becomes full, SELLER may suspend any further supply of
the Product. SELLER shall resume supply of the Product within 24 (twenty four) hours following the effective date on which BUYER resumes withdrawal of Product.</P>
<P align="justify">
<B>2.8. </B><B><I>Chain of Contracts</I></B><B>. </B>The Parties acknowledge and agree that this Contract jointly with the other Related Contracts form a chain of contracts, so that the performance of the obligations arising out of this Contract may
(i) depend on the due performance of the obligations of the Parties under the other Related Contracts and/or (ii) may affect the performance of the obligations of the Parties under the other Related Contracts.</P>
<P align="justify">
<B>2.8.1.</B> In case the performance of any obligations under this Contract is prevented or becomes unfeasible or uneconomical due to the non-performance of the obligations of either Party under any other Related Contract (the &#147;<U>Affected
Contracts</U>&#148;), the Parties shall be subject to the following provisions:</P>
<P align="justify">
(i) in case the failure to perform any Related Contract is attributable to either Party hereto, such Party shall also be liable for the non-performance of this Contract if and to the extent that this Contract is an Affected Contract; </P>
<P align="justify">
(ii) in case of any failure to perform any Related Contract due to a Force Majeure Event, as defined in any such Related Contract, the non-performance hereof shall be deemed to have occurred under a Force Majeure Event, if and to the extent such
failure prevents the performance of this Contract.</P>
<P align="justify">
<B>2.9. </B><B><I>Communication between SELLER and BUYER. </I></B>The Parties undertake to keep close and frequent communication throughout the term of this Contract aiming at the achievement of the performance of their obligations under this
Contract, as follows: </P>
<P align="justify">
<B>2.9.1 </B><B><I>Monthly Meetings</I></B><I>.</I> Each Party shall indicate by written notice to the other Party, no later than 30 (thirty) days of the date of signature of this Contract, a committee of three or four officers and/or employees in
charge of representing that Party in the management of the day-to-day operations under the Contract (the &#147;<U>Representation Committee</U>&#148;). The Representation Committee of each Party shall convene on a monthly basis, on a date to be
agreed upon by the Parties through mutual discussion in good faith to discuss and define any issues related to the operations under this Contract and the Parties&#146; performance of their obligations hereunder, such as: </P>
<P align="justify">
- - Planning and nomination of Quantity to be supplied by SELLER in the next month; <br>
- - Review of the actual performance and quality of the supply of the Product for the immediately preceding month; </P>
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- - Reconciliation of Actual vs Budget for the operation of the month; and <br>
- - Discuss and agree in good faith any counter-measures (but in any event without prejudice to any provision in this Contract) that shall be taken by each Party, as applicable, for any non-conformity, quality deviations or nonperformance of the
Parties&#146; obligations under this Contract. </P>
<P align="justify">
<B>2.9.2 </B><B><I>Yearly Meetings</I></B>. The Representation Committee of the Parties shall annually convene on a date to be mutually agreed by the Parties in each Mining Year to discuss the operations and performance of the Parties&#146;
obligations under this Contract for the preceding Mining Year, as well as issues such as: </P>
<P align="justify">
- - Planning for next Mining Year;<br>
- - Review the actual performance and quality of the supply of the Product for the previous Mining Year; <br>
- - Reconciliation of Actual vs Budget for the operation of the Mining Year; and <br>
- - Discuss and agree in good faith any counter-measures that shall
be taken by each Party, as applicable, for any non-conformity, quality deviations or nonperformance of the Parties&#146; obligations under this Contract. </P>
<P align="justify">
<B>2.9.3. </B><B><I>Third Parties&#146; Attendance</I></B>. The Brazilian SPC may appoint representatives being entitled to attend the Yearly and/or Monthly Meetings provided in Clause 2.9.1 and 2.9.2 at its sole discretion. </P>
<P align="justify">
<B>2.9.4. </B><B><I>Day-to-day Communication</I></B>. Further to the above, the Parties shall keep, through any of the members of the Representation Committee, close daily communication in connection with the operations of this Contract. </P>
<P align="justify">
<B>2.10.</B><B><I> Access to SELLER&#146;s Daily Operations under this Contract</I></B><I>. </I>BUYER and the Brazilian SPC will be entitled to access and supervise SELLER&#146;s daily operations under this Contract, through a representative
indicated by BUYER, including but not limited to quality control procedures, such as weighing, sampling and analysis, among others, and related operations at Casa de Pedra Mine. SELLER will endeavor its best efforts to provide such clarification or
information requests which may be submitted by BUYER as a result thereof. </P>
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<B>CLAUSE THREE &#150; PRODUCT QUALITY </B></P>
<P align="justify">
<B>3.1.</B> <B><I>Quality of the Product Supplied</I></B>. The Parties hereby acknowledge and agree that all the characteristics set out in <U>Attachment I</U> hereto as guaranteed specifications (the &#147;<U>Guaranteed</U>
<U>Specifications</U>&#148;) are mandatory and guaranteed by SELLER. The quality of the Product supplied shall be determined based on sampling and analysis to be carried out on each Batch in accordance with the criteria and other procedures set out
in <U>Attachment III</U> hereto. </P>
<P align="justify">
<B>3.1.1. </B><B><I>Quality Report</I></B><I>.</I><B><I> </I></B>SELLER shall verify and report in writing to BUYER, on both a weekly and monthly basis, the average quality of the Product supplied to BUYER at the immediately previous week and month,
respectively. </P>
<P align="justify">
<B> 3.1.1.1. </B><B><I>Weekly Basis</I></B><B>. </B>If the actual average quality of the Product during the period between the first and last day of a determined week is lower than the Guaranteed Specifications, SELLER shall provide, jointly with
the model quality control sheet, the background reason for such Product not satisfying the Guaranteed Specifications. In such case, BUYER shall be entitled to further request SELLER to take countermeasures to improve the quality of the Product for
the next weeks, and such issue shall be discussed at the next Monthly Meeting, as
provided in Clause 2.9.1 above.</P>
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<P align="justify"><B>3.1.1.2.</B> <B><I>Monthly Basis.</I></B> If the actual average quality of the Product during the period between the first and last day of a determined month is lower than the Guaranteed Specifications, BUYER shall be entitled to further
request, SELLER to take countermeasures required for quality improvement, and SELLER shall explain the background reasons for such Product not satisfying to the Guaranteed Specifications and propose suitable countermeasures at the next Monthly
Meeting, as provided in Clause 2.9.1 above. <B> </B></P>
<P align="justify">
<B>3.1.2.</B> <B><I>Target Specifications</I></B><I>. </I>The target specifications described in <U>Attachment I</U> hereto shall be used to calculate the Penalty / Bonus Component described in the formula set forth in Clause 4.1 below (the
&#147;<U>Target Specifications</U>&#148;). </P>
<P align="justify">
<B>3.1.3.</B> <B><I>Monthly Guaranteed Level</I></B><I>.</I> In case the cumulated weekly quality of a certain quantity of Product supplied by SELLER to BUYER, being such quantity not lower than 200,000 wet metric tons of Product, falls under the
monthly guaranteed level, SELLER shall take countermeasures to correct the quality of Product in the following weeks in order to guarantee that actual monthly quality of Product supplied to SELLER is at least equal to or higher than the monthly
guaranteed specifications. Even after the countermeasures taken according to this Clause 3.1.3, if any Batch falls under the monthly guaranteed level set forth in <U>Attachment I</U> hereto, BUYER shall have the right to reject that Batch.</P>
<P align="justify">
<B>3.1.4.</B> <B><I>Additional Expenses of BUYER.</I></B> In the event that BUYER incurs additional expenses and/or actual damages due to admixture of foreign material(s) and/or different products of iron ore, SELLER shall, notwithstanding anything
to the contrary as contained herein, compensate BUYER for such additional expenses and/or actual damages within 90 (ninety) days. </P>
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<B>CLAUSE FOUR &#150; UNIT PRICE </B> </P>
<P align="justify">
<B>4.1.</B> <B><I>Unit Price. </I></B>The price per wet metric ton (wmt) of Product supplied shall be &#150; according to the conditions for delivery set out in Clause 2.7 above - determined on the basis of the quantities and quality (content of
iron or &#147;<U>Fe</U>&#148;) of each Batch, based on the following formula (the price, per wet metric ton (wmt), resulting from application of the cited formula, the &#147;<U>Unit Price</U>&#148;): </P>
<TABLE border=1 width=100% align="center" cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">

<TR valign="bottom">
	<TD width="100%" align=center bgcolor="#CCCCCC"><B>PU = P</B><B><SUB>1 </SUB></B><B>+ P</B><B><SUB>2</SUB></B>&nbsp;</TD></TR>
</TABLE>
<BR>
<P>
<U>Where</U>: </P>
<P>
<B>PU </B>= means Unit Price for a determined month of supply; </P>
<P>
<B>P</B><B><SUB>1</SUB></B>= <B>Y</B> <B>+ [Penalty / Bonus Component]</B> (cash component of the Product price) </P>
<P align="justify">
<B>Y = </B>means, as of April 1<SUP>st</SUP>, 2008, the equivalent in Brazilian currency of US&#36;[&#149;], it being certain that such amount shall be readjusted, at the beginning of each Mining Year, based on the same percentage readjustment as
iron ore fines of the type known as standard sinter feed<I> </I>&#150; SSF (<I>Itabira Fines</I>), as produced by the [&#149;] (hereinafter referred to as &#147;[&#149;]&#148;) and aimed for shipment through the Port of Tubar&atilde;o to Japan (such
ore being hereinafter referred to as the &#147;<U>Reference Ore</U>&#148;), as disclosed (by order): </P>
<P align="justify">
<B>(i)</B> in the Tex Report, as published by the Tex Report, Ltd. (or successor thereto); </P>
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<B>(ii)</B> if the Tex Report, for any reason, is no longer available or does not any longer disclose the Reference Ore, the Metal Bulletin, published by Metal Bulletin, plc (or successor thereto); or </P>
<P align="justify">
<B>(iii)</B> if the Metal Bulletin, for any reason, is no longer available or does not any longer disclose the price of the Reference Ore, then the [&#149;] website or any other [&#149;]publication. </P>
<P align="justify">
Notwithstanding the provisions above, if, upon commencement of a Mining Year, the percentage readjustment applicable to the Reference Ore is not available and no other readjustment has been agreed between the Parties in view of the conditions of the
international iron ore market, the &#147;Y&#148; applicable to the supplies to be carried out in the Mining Year that is about to begin shall temporarily be the &#147;Y&#148; then in effect until such time as the percentage readjustment applicable
to the Reference Ore is known or determined. As soon as the percentage readjustment applicable to the Reference Ore is known or determined, the new &#147;Y&#148; shall be determined in accordance with the provisions contained in this Clause, with
retroactive effects to the beginning of the Mining Year in question, with any eventual differences (either upwards or downwards) resulting from temporary use of the &#147;Y&#148; then in effect in the formula for determination of the Unit Price
being agreed between the Parties within a period of 30 (thirty) days counting from the date on which the new &#147;Y&#148; has been disclosed and communicated in writing by SELLER to BUYER. </P>
<P align="justify">
In the event the Reference Ore should no longer be produced or sold, the Parties shall promptly replace it, for purposes of readjusting &#147;Y&#148;, with such product that succeeds Reference Ore or with such other type of iron ore that is
representative on the international iron ore market that is agreed to by the Parties. </P>
<P align="justify">
For purposes of translating the &#147;Y&#148; into Brazilian currency, SELLER shall use the average of quotations for sale of the United States Dollar as disclosed by the Brazilian Central Bank (BACEN) by means of transaction PTAX 0800, option 5 (or
such transaction as may replace same on the BACEN System - SISBACEN), in the month prior to that for issuance of the invoice relating to the supply of the Product, and shall take &#147;Y&#148; to 2 (two) decimal places after rounding off.
"<U>PTAX</U>" means the ask rate which means the Brazilian Reais&#146; bid and Dollar&#146;s ask rate, expressed as the amount of Brazilian Reais per one Dollar, published by the Central Bank of Brazil on SISBACEN Data System under transaction code
PTAX-800, Option 5, "<I>Venda</I>" by approximately 6:00 p.m., S&atilde;o Paulo time; </P>
<P align="justify">
<B>Penalty / Bonus Component</B> = (Fe% - Fe% Target Specifications) * US&#36;[&#149;]/wmtu wmtu = [&#149;]% of Fe Content of each wmt (=[&#149;]kg of Fe content in wmt);</P>
<P align="justify">
<B>Fe%</B> = means the actual average iron content of QL in a determined month; </P>
<P align="justify">
<B>QL</B> = means the quantity of the Batch effectively supplied to BUYER in a determined month, as indicated on the weighing certificates issued in the manner set forth in <U>Attachment III</U> hereto;<B> </B></P>
<P align="justify">
<B>Fe % Target Specifications</B> = means the applicable iron content of Fe set forth in <U>Attachment</U> <U>I</U> hereto; and </P>
<P align="justify"><B>P</B><B><SUB>2</SUB></B><SUP> </SUP>= means the amount in Brazilian Reais equivalent to US&#36;[&#149;], an amount that is fixed and non-adjustable for the entire period that this Contract remains in effect (non-cash amount of the Product price).</P>
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  For purposes of translating the <B>P</B><B><SUB>2</SUB></B> into Brazilian currency, SELLER shall use PTAX applicable at the close of the business of the day that is 2 (two) Business Days (as defined in Clause 5.1.1 below) prior to the relevant calculation date, which relevant calculation date for the purpose of the payment of the Advance Payment shall
mean the date on which such payment effectively occurs. If no PTAX value is available on such date, PTAX value on the date shall be replaced by the exchange rate freely practiced in the financial market. </P>
<P align="justify">
<B>4.2.</B> <B><I>Taxes.</I></B> The Parties acknowledge and agree that the amounts attributed to <SUP>&#147;P</SUP>1<SUP>&#148; and &#147;P</SUP>2<SUP>&#148; in </SUP>Clause 4.1 above do not include taxes of any kind levied on the Product and/or on
the supply of the Product (subject to Clauses 8.2, 8.3 and 8.4, as and if applicable), such as the Federal Social Integration Program &#150; PIS, the Social Security Finance &#150; COFINS contributions and the State Value-Added Tax on Circulation of
Goods and Services &#150; ICMS. The taxes currently imposed on the Product and/or on the supply of the Product as well as the formula for the addition of those taxes, if applicable, to the Unit Price are disclosed in <U>Attachment V</U> hereto. </P>
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<B>CLAUSE FIVE &#150; ADVANCE PAYMENT </B></P>
<P align="justify">
<B>5.1. </B><B><I>Advance Payment.</I></B> On the date agreed by the Parties but not later than 90 (ninety) days from the date of execution of this Contract, BUYER shall make available to SELLER, in advance, on account of the Product to be supplied
by BUYER under this Contract, the amount in Brazilian Reais corresponding to US&#36;[&#149;] (hereinafter referred to as the &#147;<U>Advance Payment</U>&#148;), which amount corresponds to the sum of each one of the results of multiplication (a) of
each Monthly Quantity set forth in <U>Attachment II</U> hereto (for each one of the months of each Mining Year), by (b) US&#36; [&#149;], adjusted to present value through the signing date of this Contract based on a
discount rate of [&#149;] per annum.</P>
<P align="justify">
<B>5.1.1</B> The conversion of amounts in Dollars into Brazilian Reais, under this Contract, shall use PTAX applicable at the close of the business of the day that is 2 (two) Business Days (as defined below) prior to the relevant calculation date,
which relevant calculation date for the purpose of the payment of the Advance Payment shall mean the date on which such payment effectively occurs. If no PTAX value is available on such date, PTAX value on the date shall be replaced by the exchange
rate freely practiced in the financial market. &#147;<U>Business Day</U>&#148; means any day (excluding Saturdays and Sundays) on which commercial banks generally are open for the transactions of normal banking business (i) in the City of S&atilde;o
Paulo, Brazil, (ii) in the City of New York, United States of America, (iii) in the City of Tokyo, Japan and (iv) in the City of Seoul, South Korea.<B> </B></P>
<P align="justify">
<B>5.1.2.</B> The Advance Payment shall be made by means of available electronic transfer (TED - &#147;<I>transfer&ecirc;ncia eletr&ocirc;nica dispon&iacute;vel</I>&#148;) of funds to SELLER&#146;s current account indicated in <U>Attachment IV</U>
hereto (or to such other account as may be notified by SELLER to BUYER under the terms of this Contract). </P>
<P align="justify">
<B>5.2. </B><B><I>Deduction of the Advance Payment upon Supply of each Batch of Product.</I></B> At the end of each month of supply, SELLER shall automatically deduct from the balance of SELLER&#146;s debt to BUYER in relation to the Advance Payment
a fixed and non-adjustable amount corresponding to the portion of the Advance Payment attributable to the Batch of Product supplied in such month, which amount is equivalent to: </P>
<P align="justify">
<B>(a)</B><B>P</B><B><SUB>2</SUB></B>(as defined in Clause 4.1 above); </P>
<P align="justify">
<B>(b)</B> multiplied by QL (as defined in Clause 4.1 above). </P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B>8/34</P>

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<B>5.3.</B> <B><I>Updating of SELLER&#146;s Debt to BUYER in relation to the Advance Payment.</I></B> The balance of SELLER&#146;s debt to BUYER in relation to the Advance Payment shall be subject to the levying of interest charges, determined on
the basis of an interest rate of [&#149;] per annum, calculated on a monthly <I>pro rata</I> basis. <B> </B></P>
<P align="justify">
<B>5.3.1.</B> The interest charges provided in Clause 5.3 above shall be computed through the end of each month (or fraction thereof), as from the date for making the Advance Payment and through the termination or expiration of this Contract, based
on the balance of SELLER&#146;s debt to BUYER in relation to the Advance Payment on such date, after the deduction dealt with in Clause 5.2 above. Such interest charges, after being calculated, are to be treated in the following manner:</P>
<P align="justify">
<B>(a)</B> [&#149;] of the amount corresponding to the interest charges shall be added to the balance of the cited SELLER&#146;s debt at the end of each Mining Year;</P>
<P align="justify">
<B>(b)</B> [&#149;] of the amount corresponding to the interest charges shall be paid by SELLER to BUYER on the second Working Day of the month subsequent to the one in question, by means of available electronic transfer (TED -
&#147;<I>transfer&ecirc;ncia eletr&ocirc;nica dispon&iacute;vel</I>&#148;) of funds to SELLER&#146;s current account indicated in <U>Attachment IV</U> hereto. For the purposes of this Contract, the term &#147;<U>Working Day</U>&#148; means any day
except Saturdays, Sundays and holidays on which banks are not authorized to open for business in the City of S&atilde;o Paulo, State of S&atilde;o Paulo; and </P>
<P align="justify">
<B>(c) </B>the Parties shall redefine the proportion of interest charges provided in items (a) and (b) above in case of creation or alteration of taxesin order to maintain the financial balance of the date of execution hereof. </P>
<P align="justify">
<B>5.4.</B> Every [&#149;] years as from the commencement of the Products supply under this Contract, the Parties shall negotiate in good faith an increase of <B>P</B><B><SUB>2</SUB></B>, which (i) shall never result in a total PU that is higher than the market price for the Product, and (ii) shall not result in any tax adverse effect for either Party. If the Parties fail to reach an agreement as to such increase, the then current<B>P</B><B><SUB>2</SUB></B>shall not be varied.</P>
<P align="center">
<B>CLAUSE SIX &#150; BILLING AND PAYMENT </B></P>
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<B>6.1.</B> <B><I>Issuance of Invoices.</I></B> On the last day of each month, SELLER shall issue an invoice (&#147;<U>NFF</U>&#148;) for each Batch of Product supplied and submit such NFF to BUYER within no more than 3 (three) Working Days from the
issue date, with due regard to the provisions of this Clause and Applicable Law. </P>
<P align="justify">
<B>6.1.1.</B> The NFFs shall be issued to BUYER based on the weighing certificates provided in the manner set forth in <U>Attachment III</U> hereto in relation to each Batch of Product supplied. Each NFF is to reflect (a) the value of the Batch of
Product supplied, in view of the Unit Price and the quantity of the Batch, (b) the portion of the Advance Payment attributable to the Batch of Product supplied, calculated in the manner provided by Clause 5.2 above and for the purposes set forth in
such Clause, and (c) the balance to pay. </P>
<P align="justify">
<B>6.2.</B> <B><I>Payment Term of the NFFs.</I></B> The NFFs are to be paid by BUYER within a period of no more than 30 (thirty) days counting from the date of BUYER&#146;s receipt of original NFF, without any financial compensation or inflation
adjustment being due for such payment term. </P>
<P align="justify">
<B>6.2.1.</B> In the event any NFF contains any irregularity, in BUYER&#146;s opinion, BUYER shall return it to SELLER within a period of no more than 5 (five) Working Days from receipt thereof, with
SELLER being responsible for remedying such irregularity and resubmitting it to BUYER within a period of no more than 5 (five) Working Days. </P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B>9/34</P>

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<P align="justify"><B>6.2.2.</B> In case there is any disagreement between the Parties in relation to any NFF received by BUYER, such disagreement shall be resolved in a period of no more than 30 (thirty) days counting from the date such disagreement is notified by
any Party to the other, with any adjustments (either upwards or downwards) in the value of the NFF in relation to which there has been a disagreement being reflected in the immediately subsequent NFF or, if there are none, paid within the same
deadline established in accordance with Clause 6.2 above, counting from the date on which such adjustments have been determined and agreed by the Parties. </P>
<P align="justify">
<B>6.2.3.</B> BUYER shall issue a debit note for such sums as SELLER expressly recognizes as being owed to BUYER under this Contract, with full offset of such amounts as are due to BUYER, at the latter&#146;s discretion, against amounts that BUYER
has to pay to SELLER. In the event it is not possible or advisable to carry out the offset set forth in this Clause, the debit note shall be paid by SELLER within the same deadline established under Clause 6.2 above counting from the issue day of
such debit note. </P>
<P align="justify">
<B>6.3.</B> <B><I>Manner of Payment.</I></B> Any payment due by BUYER to SELLER shall be made by means of available electronic transfer (TED - &#147;<I>transfer&ecirc;ncia eletr&ocirc;nica dispon&iacute;vel</I>&#148;) of funds to SELLER&#146;s
current account indicated in <U>Attachment IV</U> hereto (or to such other account as may be notified by SELLER to BUYER under the terms of this Contract), with the transfer voucher slip serving as proof of payment and discharge of the respective
obligation. Any payment due by SELLER to BUYER shall also be carried out through the TED system for transferring funds to BUYER&#146;s current account indicated in <U>Attachment IV</U> hereto (or to such other account as may be notified by BUYER to
SELLER under the terms of this Contract), with the transfer voucher slip serving as proof of payment and discharge of the respective obligation. </P>
<P align="justify">
<B>6.4.</B> <B><I>Late Payment Charges.</I></B> In the event any delay should occur with respect to payment of amounts due under this Contract by one Party to the other, the amount due and not paid shall be monetarily restated based on the variation
in the Reference Rate &#150; TR (or other such index as may replace the latter), plus late payment interest of 1% (one per cent) per month, calculated on a <I>pro rata</I> basis between the due date and the date of effective payment, with no other
type of increase being due. </P>
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<B>CLAUSE SEVEN &#150; REPRESENTATIONS OF THE PARTIES </B></P>
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<B>7.1.</B> <B><I>Representations of SELLER.</I></B> SELLER hereby declares to BUYER, as of the signing date below and on the date of each supply of the Product, assuming responsibility for the correctness and truthfulness and completeness of such
representations, that: </P>
<P align="justify">
<B>(a)</B> it is a duly organized and validly established public joint stock corporation under the laws of Brazil and that it has full legal capacity to own and operate its facilities and conduct its business as conducted at present, and is duly
qualified to supply the Product to BUYER under the terms of this Contract; </P>
<P align="justify">
<B>(b)</B> it has obtained all the corporate or similar authorizations required to sign this Contract and to comply with the obligations attributed to it hereunder; </P>
<P align="justify">
<B>(c)</B> this Contract has been duly and validly executed and delivered by SELLER and constitutes a legal, valid and binding obligation insofar as SELLER is concerned and is enforceable against it on the terms hereof;</P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B>10/34</P>

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<B>(d)</B> it is not insolvent, under court protection from creditors, extrajudicial or judicial recovery, and it is neither impeded from paying its obligations and nor has it been declared bankrupt; </P>
<P align="justify">
<B>(e) </B>neither the execution and delivery of this Contract nor the consummation of the transactions and performance of the terms and conditions of this Contract by SELLER will (i) result in a violation or breach of or default under any provision
of the by-laws of SELLER; (ii) will result in a violation or breach of or default under any provision of any agreement, indenture or other instrument under which SELLER is bound; or (iii) violate any constitution, statute, law, regulation, rule,
ruling, charge, order, writ, injunction, judgment or decree (&#147;<U>Applicable Law</U>&#148;) of or by any federal, national, state, municipal, local or similar government, governmental, regulatory, administrative or tax authority, agency or
commission or any court, tribunal, or judicial or arbitral body (&#147;<U>Governmental Authority</U>&#148;), which may negatively affect or prevent the performance of its obligations hereunder or under the other Related Contracts; </P>
<P align="justify">
<B>(f)</B> it has good, valid and marketable title to, valid and subsisting leasehold or acquisition interests in or to, or valid, binding and enforceable rights to the Casa de Pedra Mine, and will have and keep good, valid and marketable title to,
valid and subsisting leasehold or acquisition interests in or to, or valid, binding and enforceable rights to the Crushing Units and to TCLD, and other relevant assets and rights required for the performance hereof (&#147;<U>Assets</U>&#148;); </P>
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<B>(g)</B> all Assets are (i) in good operating condition and repair, and are adequate for the uses to which they are being put and (ii) sufficient for the performance of the obligations of SELLER hereunder;</P>
<P align="justify">
<B>(h)</B> it is not a party and will not enter into any agreement, arrangement, transaction, lease, license, note, mortgage, indenture, contract and other contractual rights and obligations, whether written or oral which negatively affect or
prevent the performance of its obligations hereunder; </P>
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<B>(i)</B> it has been and will continue to be in full compliance with all Applicable Law related to the performance of this Contract, including without limitation those regarding tax, environmental, labor and social security matters; </P>
<P>
<B>(j)</B> it has obtained and will keep all licenses, permits and authorizations required for its operation and the performance of this Contract; and </P>
<P align="justify">
<B>(k) </B>there is no court or administrative litigation, action, suit, proceeding, condemnation, investigation, claim, audit, order, decision, decree, writ, judgment, injunction, determination or award or any arbitration proceeding that may
prevent, limit or affect SELLER&#146;s ability to perform any of its obligations under this Contract. </P>
<P align="justify">
<B>7.2.</B> <B><I>Representations of BUYER</I></B>. BUYER hereby declares to SELLER, as of the signing date below and on the date of each supply of the Product, assuming responsibility for the correctness and truthfulness of such representations,
that: </P>
<P align="justify">
<B>(a)</B> it is a duly organized and validly established joint stock corporation under the laws of Brazil and that it has full legal capacity to own and operate its facilities and conduct its business as conducted at present, and is duly qualified
to acquire the SELLER&#146;s Product under the terms of this Contract; </P>
<P align="justify">
<B>(b)</B> it has obtained all the corporate or similar authorizations required to sign this Contract and to comply with the obligations attributed to it hereunder; </P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B>11/34</P>

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<B>(c)</B> this Contract has been duly and validly executed and delivered by BUYER and constitutes a legal, valid and binding obligation insofar as BUYER is concerned and is enforceable against it on the terms hereof; </P>
<P align="justify">
<B>(d)</B> it is not insolvent, under court protection from creditors, extrajudicial or judicial recovery, and it is neither impeded from paying its obligations and nor has it been declared bankrupt; </P>
<P align="justify">
<B>(e)</B> neither the execution and delivery of this Contract nor the consummation of the transactions and performance of the terms and conditions of this Contract by BUYER will (i) result in a violation or breach of or default under any provision
of the by-laws of BUYER; (ii) will result in a violation or breach of or default under any provision of any agreement, indenture or other instrument under which BUYER is bound; or (iii) violate any Applicable Law of or by any Governmental Authority
which may negatively affect or prevent the performance of its obligations hereunder; </P>
<P align="justify">
<B>(f)</B> it has been and will continue to be in full compliance with all Applicable Law related to the performance of this Contract, including without limitation those regarding tax, environmental, labor and social security matters; </P>
<P align="justify">
<B>(g)</B> it has obtained and will keep all licenses, permits and authorizations required for its operation and the performance of this Contract; and </P>
<P align="justify">
<B>(h) </B>there is no court or administrative litigation, action, suit, proceeding, condemnation, investigation, claim, audit, order, decision, decree, writ, judgment, injunction, determination or award or any arbitration proceeding that may
prevent, limit or affect BUYER&#146;s ability to perform any of its obligations under this Contract. </P>
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<B>CLAUSE EIGHT &#150; EFFECTIVE TERM </B></P>
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<B>8.1.</B> This Contract shall take effect on the signing date below, <U>except</U>, <U>however</U>, that the supply of the Product shall begin on the date set out in Clause 2.1 above. This Contract shall be terminated (a) upon expiration of the
term set forth in Clause 2.1 above or (b) in the manner provided by Clause 10 below, whichever occurs first. </P>
<P align="justify">
<B>8.2.</B> The Parties acknowledge and agree that BUYER shall be registered with the Brazilian Revenue Service (<I>Secretaria da Receita Federal do Brasil</I>) as a preponderantly exporting company (<I>empresa preponderantemente exportadora),
</I>to obtain the benefit of the incentive tax regime addressed to Brazilian exporters for the suspension of the imposition of the PIS and COFINS Contributions under Law 10,865 dated April 30, 2004. BUYER shall use its best efforts to obtain
registration as a preponderantly exporting company within 6 (six) months as from the execution of this Contract or before the commencement of Product supply hereunder, whatever occurs later. </P>
<P align="justify">
<B>8.2.1. </B>If BUYER fails to obtain registration as a preponderantly exporting company, or if at any time during the term of this Contract PIS and COFINS Contributions are imposed on the supply of Products under this Contract, the Parties agree
that the cost of PIS and COFINS Contributions shall be added to the Unit Price in accordance with Clause 4.2 above and <U>Attachment V</U> hereto, and BUYER shall use, to the extent possible, the tax credits related to the imposition of PIS and
COFINS contributions on the supply of Products hereunder for each monthly supply of Products to set off against BUYER&#146;s federal tax liabilities related to the Brazilian Corporate Income Taxes or other federal taxes, within 12 (twelve) months
counted from such monthly supply of Products.</P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B>12/34</P>

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<B>8.2.2. </B>If during such 12 (twelve) month term BUYER does not fully set off the PIS and COFINS credits recognized as a result of the supply of Products hereunder (in the manner described in Clause 8.2.1 above) for each monthly supply of
Products, SELLER shall grant BUYER with non-interest bearing loans, under a current account mechanism, in the amount equivalent to 50% (fifty per cent) of the economic and financial burden equivalent to the amount of PIS and COFINS credits not
settled-off, at the end of each 12 (twelve) month term after the date on which the supply of Products hereunder commences to be subject to the imposition of PIS and COFINS Contributions. </P>
<P align="justify">
<B>8.2.3. </B>If and when BUYER succeeds in fully setting-off the PIS and COFINS credits mentioned in Clause 8.2.2, above, against federal taxes, BUYER shall repay to SELLER the portion of the loan referred to in Clause 8.2.2 equivalent to the
amount of the credits fully set-off.<B> </B></P>
<P align="justify">
<B>8.3. </B>In addition, the Parties shall use their best efforts to obtain within six (6) months as from the date of execution of this Contract, a binding ruling, in form and substance acceptable to both parties and each shareholder of BUYER, from
the Tax Authorities of the States of Minas Gerais (<I>Secretaria de Estado da Fazenda de Minas Gerais) </I>providing that no ICMS or similar tax will be payable by any of the Parties, or its affiliates, in connection with any transactions
contemplated herein.</P>
<P align="justify">
<B>8.3.1. </B>If the ICMS starts to be effectively imposed on the supply of Products under this Contract, the Parties agree that the cost of ICMS shall be added to the Unit Price in accordance with Clause 4.2 above and <U>Attachment V</U> hereto. In
this case, SELLER hereby commits to acquire or cause its Affiliates to acquire, for every 6 (six) months (the initial date of the first 6 (six) month period shall be considered the date on which the ICMS shall be considered due according to this
Clause 8.3.1) all ICMS credits generated to BUYER and its Affiliates under this Contract and accumulated during each such 6 (six)-month period. The ICMS credits acquisition herein shall be made at nominal value, up to the amount of the ICMS tax
debts registered by any branches of SELLER and/or any of the branches of its Affiliates located in the State of Minas Gerais, which credits were generated in the relevant 6 (six)-month period. SELLER and SELLER&#146;s Affiliates shall acquire all
BUYER&#146;s and BUYER&#146;s Affiliates&#146; ICMS credits generated in the State of Minas Gerais up to the limit of SELLER&#146;s and SELLER&#146;s Affiliates&#146; ICMS tax debts generated in that State excluding the SELLER&#146;s and
SELLER&#146;s Affiliates&#146; ICMS tax debts offset against (i) SELLER&#146;s own ICMS tax credits and (ii) ICMS tax credits of branches of wholly owned subsidiaries of SELLER.</P>
<P>
<B>8.3.2. </B>If the ICMS starts to be effectively imposed on the supply of Products under this Contract and the SELLER and/or its Affiliates are not able to acquire all ICMS credits generated to BUYER and its Affiliates under this Contract every
(6) six-month period, SELLER shall submit to BUYER within 10 days after each (6) six-month period (as regulated under this Clause 8.3), documents evidencing (i) the amount of ICMS tax debts registered by each of its branches and the branches of
SELLER&#146;s Affiliates located in the State of Minas Gerais; (ii) the amount of ICMS tax credits registered by SELLER&#146;s branches and the branches of its wholly owned subsidiaries that were or shall be transferred to SELLER within said (6)
six-month period and (iii) the amount of ICMS tax credits registered by BUYER or any of its Affiliates as a result of the acquisition of Products under this Contract which are transferable to SELLER or SELLER&#146;s Affiliates (the
&#147;<U>Transferable ICMS Tax Credits</U>&#148;). </P>
<P>
<B>8.3.3. </B>If the amount of ICMS tax debts of SELLER and its Affiliates registered in the relevant 6 (six) month period as a result of the supply of Products under this Contract is lower than the Transferable ICMS Tax Credits determined under
Clause 8.3.2 above, such difference may be carried over (to be set-off) within the following 12 (twelve) months to be transferred from BUYER or BUYER&#146;s Affiliates to SELLER and/or SELLER&#146;s Affiliates as provided in this Clause 8.3. </P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B>13/34</P>

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<B>8.3.4. </B>If the Parties fail to obtain the authorizations required by the Tax Authorities of the State of Minas Gerais to transfer ICMS credits as provided in this Clause 8.3 or if any difference mentioned in Clause 8.3.3 above is not
transferred by BUYER or its Affiliates to SELLER or SELLER&#146;s Affiliates within the 12 (twelve) month period mentioned in Clause 8.3.3 above, SELLER shall grant BUYER with non-interest bearing loans, under a current account mechanism, in the
amount equivalent to 50% (fifty per cent) of the economic and financial burden equivalent to the non-transferable portion of the ICMS tax credits registered by BUYER or BUYER&#146;s Affiliates as from the end of each 12 month-term after the date on
which the supply of Products hereunder commences to be subject to the imposition of ICMS. </P>
<P align="justify">
<B>8.3.5. </B>If and when BUYER succeeds in transferring the ICMS tax credits mentioned in Clause 8.3.4, above, BUYER shall repay to the SELLER the portion of the loan referred to in Clause 8.3.4 in the amount of the transferred ICMS tax credits.<B>
</B></P>
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<B>8.4. </B>Once BUYER&#146;s right to offset or recover the PIS and COFINS credits or to transfer the ICMS tax credits in connection with a given month elapsed after the 5 (five) year period of statute of limitation set forth by the applicable
legislation counted from the recognition of tax credits by BUYER or its Affiliates related to PIS and COFINS contributions as set forth in Clause 8.2.1 or related to the ICMS, as set forth in Clause 8.3.1, the balance, if any, of the relevant loans
made in accordance with Clauses 8.3.1, 8.3.2, 8.3.4 and 8.3.5, above, shall be forgiven by the SELLER. </P>
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<B>8.5.</B><B> </B>In the event that the physical and/or symbolic transfers, flows of invoices, transfer of title or the supply of the Product under this Contract becomes subject to the ICMS at any time during this Contract, or to any value added
tax imposed by the States in a form identical to the ICMS imposition, the Parties agree that Clauses 8.3.1 to 8.3.4 shall apply to the ICMS or such value added tax. </P>
<P align="justify">
<B>8.6.</B> If at any time during the term of this Contract, as a result of change of Applicable Law, PIS and COFINS Contributions and/or the ICMS are replaced by new taxes imposed by any federal, state or municipal authority, which are imposed on
the supply of Products under this Contract, or if other taxes are created and so imposed, the Parties shall negotiate in good faith on how the tax burden will be shared between them. If there is no agreement between the Parties within the period of
six months counted from the change in Applicable Law mentioned in this Clause, the Parties shall share on a 50/50 basis the economic and financial burden equivalent to the amount of said tax burden. </P>
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<B>CLAUSE NINE &#150; ACTS OF GOD AND FORCE MAJEURE </B></P>
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<B>9.1. </B>Provided that the provisions of this Clause are complied with, neither of the Parties shall be held liable to the other Party due to non-fulfillment of any obligation (except pecuniary obligations) attributed to it under this Contract
and insofar as such non-fulfillment is directly attributable to an event of force majeure or act of God under Brazilian law, as defined by article 393, sole paragraph, of the Civil Code, including but not limited to (a) acts of wars (whether
declared or not), epidemics, sabotage, military actions or hostilities and acts of terrorism or the escalation thereof occurring after the date hereof; (b) regional or national strikes, work stoppages, slowdowns or lockouts of any trade category
involved in production of the Product or adversely affecting abilities of either Party to comply with the terms and conditions of this Contract; (c) acts of God and inclement weather or such other atypical events of nature that are not predictable
and/or the effects of which cannot be avoided by employing reasonable control measures; (d) accidents or emergency stoppages in order to prevent accidents which impede or restrict the operation and/or construction and/or expansion of installations
related to the production of the Product; (e) any decision by an arbitration panel or court of law (even if preliminary and subject to further appeal), obtained by or granted in favor of third parties that prevents compliance with either
Party&#146;s obligations under this Contract), except for litigation pertaining to right of first refusal on iron ore from Casa de Pedra Mine, included but not limited to the lawsuits listed in <U>Attachment VI</U> hereto (for the avoidance of
doubt, those lawsuits shall not be
considered nor deemed to be Force Majeure Event for every and all purposes of this Contract); (f) expropriation, or statement of eminent domain for expropriation purposes (<i>declara&ccedil;&atilde;o de utilidade p&uacute;blica</i>), or any other
restriction imposed by any public authority on either Party's assets adversely affecting either Party&#146;s assets or abilities to comply with the terms and conditions of this Contract; (g) any changes in Applicable Law occurring after the date
hereof which prevents either Party from complying with the terms and conditions of this Contract; and (h) any other circumstance, change, development, event or fact that is unpredictable or unavoidable by the affected Party and which prevents such
Party from complying with the terms and conditions of this Contract, if and to the extent any such events qualify as force majeure under article 393 sole paragraph of the Civil Code (&#147;<u>Force</u> <u>Majeure Event</u>&#148;). </P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B>14/34</P>

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<P align="justify"><B>9.1.1 </B>For all purposes, a Force Majeure Event under the other Related Contracts that renders unfeasible or otherwise prevents the performance of the Related Contracts in whole or part, including this Contract, shall be considered a Force
Majeure Event under this Contract. </P>
<P align="justify">
<B>9.2.</B> In case of the occurrence of a Force Majeure Event, the Party whose obligations are being affected by such event of force majeure or act of God (such Party being hereinafter referred to as the &#147;<U>Affected Party</U>&#148;) shall
have 5 (five) Working Days counting from such event to notify the other Party of same and prove by means of appropriate documents, as the case may be, the occurrence of such event, as well as its direct or indirect impact on its obligations under
this Contract. Notwithstanding, the Affected Party is to implement at its own expenses and as soon as possible measures to mitigate the effects and the direction of the event of force majeure or act of God, indicating such measures to the other
Party and keeping the latter constantly informed on the progress of such measures. </P>
<P align="justify">
<B>9.3. </B>Should a Force Majeure Event occur: </P>
<P align="justify">
<B>(a)</B> up to the end of [&#149;], SELLER shall pay to BUYER a compensation equal to: </P>
<P>
K = <B>P</B><B><SUB>2</SUB></B> x A </P>
<P>
Being: </P>
<P>
K &#150; Compensation Amount </P>
<P align="justify">A &#150; Quantity of Product not supplied due to the Force Majeure Event  and <B>(b)</B> On or after [&#149;], SELLER shall pay to BUYER a compensation equal to: </P>
<P align="justify">
X = <B>P</B><B><SUB>2</SUB></B> x B </P>
<P>
Being: </P>
<P align="justify">
X &#150; Compensation Amount </P>
<P align="justify">
B &#150; Quantity of Product not supplied due to the Force Majeure Event in the first 365 days of such Force Majeure Event. </P>
<P align="justify">
<B>9.3.1.</B> Compensation amounts under Clause 9.3 shall be paid by SELLER to BUYER on a monthly basis until the 30<SUP>th</SUP> day of the subsequent month after the occurrence of a Force Majeure Event. Such provision shall apply to subsequent
months, if the Force Majeure Event continues. </P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B>15/34</P>

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<P align="center">
<B>CLAUSE TEN &#150; DEFAULT, MATERIAL DEFAULT, MATERIAL BREACH, INDEMNIFICATION, TERMINATION AND CONSEQUENCES OF TERMINATION </B></P>
<P align="justify">
<B>10.1.</B> SELLER shall not be deemed to have breached this Contract if the annual quantity of Product supplied by SELLER to BUYER in any given Mining Year is equal to or greater than [&#149;] of the Nominated Annual Quantity, provided that
amounts delivered below the Basic Annual Quantity shall be considered as Carry-Over Amounts. </P>
<P align="justify">
<B>10.2.</B> SELLER shall be deemed to have breached this Contract if, for reasons attributable to SELLER, the annual quantity of Product supplied by SELLER to BUYER in any given Mining Year is lower than [&#149;]% [&#149;] but equal to or greater
than [&#149;]% of the Nominated Annual Quantity (&#147;<U>Default</U>&#148;).</P>
<P align="justify">
<B>10.2.1. </B>Should a Default occur under Clause 10.2, then SELLER shall cure the Default, as early as practicable, but not later than [&#149;] days from the date of receipt of a written communication by BUYER to that effect, either by (i)
supplying Product to BUYER (but solely to the extent necessary to reach at least [&#149;]% [&#149;] of the Nominated Annual Quantity), or (ii) paying a monetary compensation to BUYER for the difference between [&#149;]% [&#149;] of the Nominated
Annual Quantity and the quantities effectively supplied, or (iii) both supplying Product (in an amount lower than the necessary to reach [&#149;]% (ninety six percent) of the Nominated Annual Quantity) and paying monetary compensation for the
difference between the quantity of Products effectively supplied and [&#149;]% of the applicable Nominated Annual Quantity, in either case of (i), (ii) and (iii), as approved by the Brazilian SPC (which approval shall not be unreasonably withheld or
delayed). If the Brazilian SPC does not approve such cure, SELLER shall cure the Default by paying the monetary compensation to BUYER. Any monetary compensation payable by SELLER to BUYER hereunder shall be determined as follows: </P>
<P align="justify">
<B>(a)</B> the amount of such monetary compensation shall be discussed and agreed in good faith between SELLER and BUYER (with the BRAZILIAN SPC&#146;s good faith approval) within 30 (thirty) days from the date a written request to that effect is
made by BUYER and shall correspond to (without the duplication or double counting) (x) the cash flow (<I>fluxo de caixa</I>) shortfall in connection with the loss of revenues resulting from sales of products not effected by BUYER (it being
understood that &#147;cash flow&#148; shall mean BUYER&#146;s net sales revenues (<I>receita l&iacute;quida de vendas</I>) minus variable costs (<I>custos vari&aacute;veis</I>) associated with such revenue shortfall and determined based on the then
effective long and mid-term business plans of BUYER and (y) any penalties, damages or indemnities paid by BUYER to any third parties under commercial arrangements as a result of the the Default or Material Default, as the case may be (but excluding
penalties, damages or indemnities, if any, payable to purchasers of BUYER&#146;s products in connection with offtake or similar agreements) (the amount of such compensation, the &#147;<U>Compensation Amount</U>&#148;). For the avoidance of doubt, an
example of the calculation of the Compensation Amount is attached hereto as <U>Attachment VII</U>; </P>
<P align="justify">
<B>(b)</B> in case SELLER and BUYER do not reach an agreement on the Compensation Amount, such amount shall be determined by BUYER&#146;s independent auditor within 30 (thirty) days from the date a written request to that effect is made either by
SELLER or BUYER; and </P>
<P align="justify">
<B>(c)</B> the Compensation Amount shall be payable by SELLER to BUYER within 30 (thirty) days from the date (i) SELLER and BUYER reach an agreement on such amount or (ii) such amount is determined by BUYER&#146;s independent auditor, as the case
may be. </P>
<P align="justify">
<B>10.3. </B>SELLER shall be deemed to have materially breached an obligation set forth in this Contract if, for reasons attributable to SELLER, (i) the annual quantity of Product supplied by SELLER to BUYER in any given Mining Year is lower than
[&#149;]% [&#149;] of the Nominated Annual Quantity; or (ii) if
the weighted average of Fe contents of Products supplied to BUYER in any given Mining Year is lower than the Fe content indicated in the Guaranteed Specifications (&#147;<u>Material Default</u>&#148;). </P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B>16/34</P>

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<P align="justify"><B>10.3.1. </B>Should a Material Default occur under Clause 10.3, then SELLER shall cure the Material Default, as early as practicable, but not later than [&#149;] days from the date of receipt of a written communication to that effect, either by
(i) supplying Product to BUYER (but, in case of Material Default under Clause 10.3 (i), solely to the extent necessary to reach [&#149;]% [&#149;] of the Nominated Annual Quantity and/or, in case of Material Default under Clause 10.3 (ii), solely to
the extent necessary to meet the Guaranteed Specifications in relation to the Products supplied to BUYER in the relevant Mining Year), (ii) paying the Compensation Amount to BUYER, or (iii) both supplying a quantity of Product (in an amount lower
than the necessary to reach [&#149;]% [&#149;] of the Nominated Annual Quantity) and paying monetary compensation for the difference between the quantity of Products effectively supplied and [&#149;]% of the applicable Nominated Annual Quantity, in
either case of (i), (ii) and (iii), as approved by the Brazilian SPC (which approval shall not be unreasonably withheld or delayed). If BUYER does not approve such cure, SELLER shall cure the Material Default by paying the Compensation Amount to
BUYER. If such Material Default remains uncured for a period of [&#149;] days from the date of receipt of a written communication to that effect, then, BUYER may claim for determination of the indemnification amount according to the provisions of Clause 10.2.1, items (b) and (c). </P>
<P align="justify">
<B>10.4.</B> If BUYER breaches any obligation set forth herein (&#147;<U>BUYER&#146;s Default</U>&#148;), SELLER shall provide written notice of default to BUYER within [&#149;] days following the occurrence of such breach (&#147;<U>Notice of BUYER&#146;s Default</U>&#148;). SELLER and BUYER shall discuss in good faith the amount of the indemnification due by BUYER to SELLER, or any other remedies reasonably available, which, in no event, shall be greater than the
loss of income of SELLER deriving from sales of Product to BUYER not effected as a consequence of the Default. If no agreement is reached by the Parties within [&#149;] days as from receipt of the Notice of BUYER&#146;s Default, SELLER may claim for
determination of the indemnification amount by SELLER&#146;s independent auditor. </P>
<P align="justify">
<B>10.5. </B>The Parties acknowledge and agree that this Contract is not intended to be terminated before the full performance hereof unless exceptional circumstances occur or otherwise expressly provided hereunder, due to the substantial
investments made by both Parties for the performance thereof and the reliance of both Parties on the continued and full performance hereof. Without prejudice to any other rights provided in this Contract, but with the exclusion of any other
termination right, except for those provided in this Clause 10, this Contract may be terminated in the cases indicated below and the Party that gives rise to such termination, either due to breach of contract or other circumstance attributable to it
(with such Party being hereinafter referred to as the &#147;<U>Defaulting Party</U>&#148;), shall not have any right to file a complaint and/or claim of any kind of indemnity whatsoever: </P>
<P align="justify">
<B>(a)</B><B> </B>by the other Party, at its exclusive discretion, in the event of non-compliance by the Defaulting Party with any monetary obligation set forth in this Contract, provided that the other Party notifies the <U>Defaulting Party</U>
with respect to such non-performance and the <U>Defaulting Party</U> does not remedy such non-compliance within a period of [&#149;] days counting from the date of receipt of such notification; or </P>
<P align="justify">
<B>(b)</B> by the other Party, at its exclusive discretion, in the event of occurrence of a Material Default not cured according to Clause 10.3 (&#147;<U>Material Breach</U>&#148;); or</P>
<P align="justify">
<B>(c) </B>by the other Party, at its exclusive discretion, in case any representation made in this Contract by the Party in Default proves to be incorrect or untruthful, for any reason, as a result of which, at such other Party&#146;s reasonable
judgment, the due performance of this Contract is materially adversely affected, provided that if such incorrect or untruthful matter can be remedied and is
not remedied within a period of [&#149;] days counting from the date of receipt of such notification pointing out the incorrect or untruthful representation ; or </P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B>17/34</P>

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<P align="justify"><B>(d)</B> by the other Party, at its exclusive discretion, in the event of acceptance of a process for court recovery, the commencement of extrajudicial recovery, declaration of bankruptcy or dissolution of the Party in Default; or </P>
<P align="justify">
<B>(e)</B> by BUYER, if any other Related Contract is terminated by BUYER due to a Material Breach by SELLER as defined in such Related Contract. </P>
<P align="justify">
<B>10.6.</B> In the event this Contract should be terminated for a reason attributable to BUYER, BUYER shall indemnify SELLER for losses and damages (including any loss of income (business interruption) and indirect losses and damages, including
consequential damages) effectively incurred due to termination of this Contract, which indemnity is hereby fixed in an amount equal to the balance of SELLER&#146;s debt to BUYER in relation to the Advance Payment (if any) as of the termination date,
with SELLER being authorized, to such end, to offset the amount of such indemnity against SELLER&#146;s debt to BUYER in relation to the Advance Payment. </P>
<P align="justify">
<B>10.7.</B> If upon full supply of the Contractual Quantity by SELLER to BUYER, there is any balance of the Advance Payment made by BUYER to SELLER under Clause 5.1 (&#147;<U>Balance</U>&#148;), BUYER shall pay to SELLER an amount equal to such
Balance (&#147;<U>Payment</U>&#148;), in consideration for (i) the investments made by SELLER in order to produce and supply the Product to BUYER (purchasing equipment, hiring personnel, implementing systems, etc.), and (ii) the commitment assumed
by SELLER to make the Contractual Quantity available to BUYER, including prejudice to any other business opportunities involving the iron ore from Casa de Pedra Mine. It is hereby agreed by the Parties on an irrevocable basis that the Advance
Payment shall be immediately offset against the Payment. </P>
<P align="justify">
<B>10.8.</B> In case SELLER commits a Default or Material Default under this Contract and such Default or Material Default is also deemed a Default or Material Default under any other Related Contract, SELLER&#146;s indemnification to BUYER under
Clauses 10.2 and 10.3, as applicable, will be considered as SELLER&#146;s indemnification to BUYER for the Default or Material Default for all Affected Contracts.<B> </B></P>
<P align="justify">
<B>10.8.1. </B>For the avoidance of doubt, the Parties hereby acknowledge that any Compensation Amount (as defined in each Related Contract or herein) shall be alternative and not cumulative remedies. </P>
<P align="justify">
Therefore, if BUYER receives any Compensation Amount under this Contract or any Related Contract for a specific Default or Material Default, BUYER shall not be entitled to receive any further compensation whether under this Contract, the other
Related Contracts, or otherwise, for such Default or Material Default (to the extent that the Compensation Amount under this Contract overlaps the Compensation Amount under the other Related Contracts, and vice-versa).<B> </B></P>
<P align="center">
<B>CLAUSE ELEVEN &#150; GENERAL PROVISIONS </B></P>
<P align="justify">
<B>11.1.</B> The Parties acknowledge and agree that this Contract contains all the requisites needed for this instrument serving as a valid document for commencement of execution proceedings (<I>t&iacute;tulo executivo extrajudicial</I>), for all
legal intents and purposes. </P>
<P align="justify">
<B>11.2.</B> This Contract reflects the entire understanding of the Parties with respect to its scope and replaces any and all previous agreements and understandings. Each one of the Parties hereby acknowledges and confirms that it is not signing
this Contract based on any representation, guarantee or other commitment by the other Party that is not fully reflected in the provisions hereof. Any matter
relating to supply of the Product that is not specifically provided in this Contract shall be examined separately and mutually agreed upon by the Parties. </P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B>18/34</P>

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<P align="justify"><B>11.3.</B> Without prejudice to the provisions contained in Clause 11.4 below, this Contract binds the Parties, and/or successors on any degrees whatsoever. In this sense, in the event of merger, amalgamation (upstream merger under Brazilian law),
spin-off or change in control of either of the Parties, continuity of this Contract is expressly assured, obligating the successor or any third parties related in any manner to the merger, amalgamation, spin-off or change in control of either of the
Parties to comply with all the clauses, terms and conditions established in this Contract. </P>
<P align="justify">
<B>11.4.</B> Neither Party shall assign or transfer (in whole or in part) its rights or obligations under this Contract without the prior written consent of the other Party, which consent shall not be unreasonably withheld, delayed or conditioned;
provided, however, that (i) each of the Parties may assign all (but not a part) of its rights and obligations under this Contract without the prior written consent of the other Party to one of its Affiliates, and (ii) in case any third party or an
Affiliate of SELLER acquires the mining rights relating to the Casa de Pedra Mine, (x) SELLER shall assign all (but not a part) of its rights and obligations under this Contract to such third party or Affiliate of SELLER if there is no split
(<I>desmembramento</I>) of such mining rights or (y) if split (<I>desmembramento</I>) of such mining rights occurs, SELLER and BUYER shall discuss in good faith to agree as to whether and how this Contract will be assigned (in whole or in part)
based on the shared understanding that the Parties shall seek the best way to ensure that all obligations under this Contract shall continue to be fulfilled in accordance with the terms hereof. This Contract shall be binding upon and inure to the
benefit of the Parties and their respective successors and permitted assigns and shall be enforceable by the Parties hereto and their respective successors and permitted assigns.</P>
<P align="justify">
<B>11.4.1.</B> In addition to the foregoing, in the event of an assignment or transfer as stated in Clause 11.4 (i) the assigning Party shall (a) ensure that, as a part of such assignment, the assignee accepts the assignment of all rights and
obligations of the assigning Party under this Contract, and (b) shall remain jointly liable with the assignee for all obligations under this Contract. </P>
<P align="justify">
<B>11.4.2. </B>For the purposes of Clause 11.4 and 11.4.1 above, &#147;<U>Affiliates</U>&#148; shall mean, with respect to any Party, a person that directly or indirectly controls, or is under common control with, or is controlled by, such person.
As used in this definition, &#147;<U>control</U>&#148; (including, with its correlative meanings, &#147;<U>controlled by</U>&#148; and &#147;<U>under common control with</U>&#148;) shall mean possession, directly or indirectly, of securities having
50% or more of the voting power for the election of directors or other governing body of a corporation or 50% or more of the partnership or other ownership interests of any other person (other than as a limited partner of such other person). </P>
<P align="justify">
<B>11.5.</B> This Contract may only be amended or modified by means of prior agreement between the Parties and the signing of a specific amendment signed by both. </P>
<P align="justify">
<B>11.6.</B> Any omission or tolerance by the Parties in requiring the correct and punctual compliance with the specific or generic terms and conditions contained in this Contract, or in exercising any prerogative hereunder, shall not constitute any
kind of waiver, desistance or novation, and nor shall it affect the right of the Parties to exercise them at any time. </P>
<P align="justify">
<B>11.7.</B> In the event any provision of this Contract should be considered invalid, illegal or unenforceable for any reason, the validity, legality and enforceability of the remaining provisions contained in this Contract shall not in any manner
whatsoever be affected or prejudiced thereby and shall remain in full force and effect. The Parties shall negotiate in good faith to replace any provisions considered invalid, illegal or unenforceable with valid, legal and enforceable provisions,
the effects of which shall approximate as closely as possible the legal and economic effects intended by the provisions considered invalid, illegal or unenforceable. </P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B>19/34</P>

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<P align="justify">
<B>11.8.</B> This Contract does not create or intend to create any kind of company, association, joint venture, cooperative, partnership, consortium, agency, and neither does it attribute or aim to create any kind of relationship involving principal
and agent, commercial representation, business management or other kind of similar legal arrangement between the Parties, except for those expressly provided in this Contract and directly related to the supply of the Product by SELLER to BUYER. </P>
<P align="justify">
<B>11.9. </B>Each Party is responsible for covering its own costs and other expenses incurred or to be incurred in relation to the signing and execution of this Contract. </P>
<P align="justify">
<B>11.10.</B> Should, after the signature of this Contract, any taxes be created, or any tax rates, taxable base or manners for calculating any tax existing at the signing date below and involving taxable events related in any manner to this
Contract be altered, via Applicable Law, or any special tax benefit available to the Parties related to this Contract granted by any federal, state of municipal taxing authorities be extinguished, the Parties shall negotiate, in good faith, to amend
this Contract in order to restore its economic and financial balance.</P>
<P align="center">
<B>CLAUSE TWELVE &#150; CONFIDENTIALITY </B></P>
<P align="justify">
<B>12.1.</B> During the time this Contract remains in effect and for the period of 5 (five) years after termination hereof, the Parties undertake &#150; for themselves as well as on behalf of third parties related to them &#150; to maintain absolute
secrecy regarding the terms and conditions of this Contract, and also with respect to any and all information obtained as a result of this Contract, except (a) if the disclosure of such information is determined by this Contract or if such
information is already proven to be in the public domain without failure of the Party receiving confidential information of the other Party, (b) with the express and prior authorization of the other Party, (c) in order to exercise any rights
attributed to the Parties according to this Contract, (d) required by Applicable Law, by an order of any governmental authority or as a result of a judicial order, in which case the disclosure shall be limited to the terms and conditions that are to
be disclosed pursuant to such determination, and provided that the Party subject to such judicial order shall promptly notify the other Party and thus give such other Party the opportunity to limit or avoid the disclosure, to the extent permitted by
the Applicable Law or (e) in case of BUYER, the disclosure of information to the Brazilian SPC, Japanese SPC, shareholders of Japanese SPC and Posco. </P>
<P align="center">
<B>CLAUSE THIRTEEN &#150; COMMUNICATIONS </B></P>
<P align="justify">
<B>13.1.</B> All notices, communications, requests, authorizations and consents that have to be transmitted or given by the Parties under this Contract shall only be valid and effective if provided in writing through correspondence (under protocol
or sent against notice of receipt) or fax (with proof of transmission) addressed in the following manner (or in such other manner as may be notified subsequently by one Party to the other): </P>
<P>
<B>(a)</B> BUYER: </P>
<P>
Address: <I>Alameda da Serra, n&ordm; 400, 9&ordm; andar <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; CEP 34000-000 &#150; Nova Lima &#150; MG </I></P>
<P>
Phone: (0xx31) 3269-1410 <br>
Fax: (0xx31) 3269-1414 <br>
<I>At.: Diretor Comercial </I>(Attention of Commercial Director) <br>
<I>Cc.: Diretor de Opera&ccedil;&otilde;es e Diretor Jur&iacute;dico </I>(Copied to Operations Director and Legal Director) </P>
<P>
<B>(b)</B> SELLER: </P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B>20/34</P>

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<P>
Address: <I>Av. Brigadeiro Faria Lima, n&ordm; 3.400, 20&ordm; andar <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; CEP 04538-132 &#150; S&atilde;o Paulo &#150; SP </I><br>
Phone: (0xx31) 3749-1210 <br>
Fax: (0xx31) 3749-1284 <br>
<I>At.: Diretor de Minera&ccedil;&atilde;o</I> (Attention of Mining Director) <br>
<I>Cc.: Diretor Comercial de Min&eacute;rio de Ferro e Diretor Jur&iacute;dico</I> (Copied to Iron Ore Commercial Director and Legal Director) </P>
<P>
<B>(c)</B> BIG JUMP ENERGY PARTICIPA&Ccedil;&Otilde;ES S.A.: </P>
<P>
Address: <I>Rua da Consola&ccedil;&atilde;o, 247, 3rd Floor, Room 85A, S&atilde;o Paulo, Brazil </I><br>
Phone: (0xx11) 3170-8509 <br>
Fax: (0xx11) 3170-8549 <br>
At.: <I>Diretor Presidente (Attention of Director-President)</I> </P>
<P>
<B>(d)</B> BRAZIL JAPAN IRON ORE CORPORATION: </P>
<P>
Address: <I>5-1, Kita-Aoyama 2-chome, Minato-ku, Tokyo, 107-8077, Japan </I> <br>
Phone: (81 3) 3497-3365 <br>
Fax: (81 3) 3497-3342 <br>
At.:  <I>Mr. Yasuhiro Miyata</I> </P>
<P>
<B>(e)</B> POSCO: </P>
<P>
Address:  <I>892 Daechi 4-dong Kangnam-gu, Seoul, 135-777, Korea</I> <br>
Phone: (82 2) 3457-0306 <br>
Fax: (82 2) 3457-1908  <br>
At.: <I>Mr. Myung Deuk Seo (Group Leader)</I> </P>
<P align="center">
<B>CLAUSE FOURTEEN &#150; ARBITRATION </B></P>
<P align="justify">
<B>14.1. </B>The Parties are to submit any dispute, controversy or disagreement resulting from this Contract or related to same solely and exclusively to arbitration in the manner provided by Law No. 9.307 of September 23, 1996 and by this Clause,
provided that such dispute, controversy or disagreement is not settled amicably by the Parties within a period of 30 (thirty) days counting from the date on which one of the Parties has notified the other regarding the existence of such dispute,
controversy or disagreement. Arbitration shall be definitive and the results thereof binding on the Parties. </P>
<P align="justify">
<B>14.2.</B> The arbitration proceedings shall take place in the City of S&atilde;o Paulo, State of S&atilde;o Paulo, and shall be administered by the International Court of Arbitration of the International Chamber of Commerce
(&#147;<U>ICC</U>&#148;) and, except as provided in this Contract, shall be instituted and processed according to the Rules of Arbitration of the ICC (&#147;<U>Rules</U>&#148;). </P>
<P align="justify">
<B>14.3.</B> The arbitration panel shall be made up of 3 (three) arbitrators, with each one of the Parties being responsible for appointing 1 (one) arbitrator and these 2 (two) arbitrators appointed by the Parties responsible for jointly appointing
the third arbitrator, who shall preside over the arbitration panel. </P>
<P align="justify">
<B>14.4.</B> The charges, fees and other expenses directly related to the arbitration proceedings, which include the costs due to the ICC and the arbitrators&#146; fees and, as the case may be, any expert witnesses called, shall be initially borne
by both Parties in the same proportion, provided that the provisions contained in the Rules are complied with, though the arbitration award shall define the final allocation
of such charges, fees and other expenses between the Parties. Each Party shall cover the expenses of the respective attorneys and assistants that it engages to represent it or to assist it during the arbitration proceedings. </P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B>21/34</P>

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<P align="justify"><B>14.5.</B> Without prejudice to the other provisions contained in this Contract, the Parties hereby acknowledge and admit the possibility of appealing to the Judiciary to obtain any urgent court measures that may be considered necessary to
preserve their respective rights and interests and such measures are not to be interpreted as a waiver by the Parties of arbitration proceedings. For such purposes and for any court enforcement of an arbitration award issued by the arbitration
panel, the Parties hereby choose the courts of the Judicial District of S&atilde;o Paulo, State of S&atilde;o Paulo, as having sole jurisdiction, with express waiver of any other courts, regardless of however much jurisdictional privilege they might
have. </P>
<P align="justify">
In witness whereof, the Parties have caused this Contract to be executed in five (5) counterparts with the same form and contents, before the two (2) undersigned witnesses. </P>
<P align="center">
S&atilde;o Paulo, SP, October 21<SUP>st</SUP>, 2008 </P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B>22/34</P>

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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.6
<SEQUENCE>17
<FILENAME>exhibit106.htm
<DESCRIPTION>EXHIBIT 10.6
<TEXT>
<!DOCTYPE HTML PUBLIC "">


<html><head><title>Provided by MZ Data Products</title></head>

<BODY style="font-family: 'Times New Roman, Times, Serif'; text-align:justify; font-size:11px" bgcolor="#ffffff">
<P align="right"><a href="sidform20f2008a.htm#topexhibit">Table of Contents</a></P>
<A name="page_1"></A>

<P align="center">
<B><U>IRON ORE SUPPLY CONTRACT AND OTHER COVENANTS (TAILING DAM REJECTS)</U></B><B> </B></P>
<P align="justify">
By means of this private legal instrument, on the one hand, in its capacity as buyer, </P>
<P align="justify">
<B>NACIONAL MIN&Eacute;RIOS S/A</B>, a joint stock corporation organized and existing under Brazilian law, with its head office located in the City of Congonhas, State of Minas Gerais, Federal Republic of Brazil, at the address known as
&#147;<I>Logradouro Casa de Pedra</I>&#148;, s/n (unnumbered), Part, enrolled with the General Registry of Corporate Taxpayers of the Brazilian Ministry of Finance (&#147;CNPJ/MF&#148;) under No. 08.446.702/0001 -05 (and its successors, hereinafter
referred to as &#147;<U>BUYER</U>&#148;), </P>
<P align="justify">
and, on the other hand, in its capacity as seller, </P>
<P align="justify">
<B>COMPANHIA SIDER&Uacute;RGICA NACIONAL</B>, a joint stock corporation organized and existing under Brazilian law, with its head office located in the City of Rio de Janeiro, State of Rio de Janeiro, at Rua S&atilde;o Jos&eacute; No. 20, Suite
1602, Part, enrolled with the CNPJ/MF under No. 33.042.730/0001 -04 (hereinafter referred to as &#147;<U>SELLER</U>&#148;), </P>
<P align="justify">
(BUYER and SELLER are individually identified as &#147;<U>Party</U>&#148; and jointly as &#147;<U>Parties</U>&#148;). </P>
<P align="justify">
and, as intervening parties: </P>
<P align="justify">
<B>BIG JUMP ENERGY PARTICIPA&Ccedil;&Otilde;ES S.A</B>., a corporation organized and existing under Brazilian law, with its head offices located in the City of S&atilde;o Paulo, State of S&atilde;o Paulo, at Rua da Consola&ccedil;&atilde;o, 247,
3<SUP>rd</SUP> Floor, Room 85A, enrolled with the CNPJ/MF under No. 09.431.882/0001 -14, herein represented in accordance with its by-laws (and its successors, hereinafter referred to as the &#147;<U>Brazilian SPC</U>&#148;); </P>
<P align="justify">
<B>BRAZIL JAPAN IRON ORE CORPORATION</B>, a company duly organized and existing under the laws of Japan, with its head office located at 5-1, Kita-Aoyama 2-chome, Minato-ku, Tokyo 107-8077, Japan, herein represented in accordance with its by-laws
(hereinafter referred to as the &#147;<U>Japanese</U> <U>SPC</U>&#148;); </P>
<P align="justify">
<B>POSCO</B>, a company duly incorporated and validly existing under the laws of Korea, with head offices at 892 Daechi 4-dong Kangnam-gu, Seoul, 135-777, Korea, herein represented in accordance with its by-laws (&#147;<U>Posco</U>&#148;); </P>
<P align="justify">
(the Brazilian SPC, the Japanese SPC and POSCO are individually identified as &#147;<U>Intervening Party</U>&#148; and jointly as &#147;<U>Intervening Parties</U>&#148;); </P>
<P align="center">
<B>RECITALS </B></P>
<P align="justify">
<B>WHEREAS</B>: </P>
<P align="justify">
<B>(A)</B> SELLER has tailing dams at its iron ore mine named the &#147;Casa de Pedra Mine&#148;, located in the City of Congonhas, State of Minas Gerais (hereinafter referred to as &#147;<U>Casa de Pedra Mine</U>&#148;), at which dams rejects
resulting from the iron ore production process are deposited; </P>
<P align="justify">
<B>(B)</B> BUYER intends to acquire from SELLER rejects resulting from the tailing dams denominated &#147;tailing dam IV&#148; and &#147;tailing dam V&#148; of the Casa de Pedra Mine (with such tailing dams being hereinafter referred to as
&#147;<U>B-IV</U>&#148; and &#147;<U>B-V</U>&#148;, respectively), and BUYER wishes to assume responsibility for the removal of such rejects at its own cost and expenses from the B-IV and B-V
tailing dams, and SELLER intends to supply and, therefore, authorize BUYER to remove such rejects;</P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B><B> </B></P>

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<P align="justify"><B>(C)</B> parallel to the supply of rejects from the B-IV and B-V tailing dams, BUYER intends to set up a plant to process the tailing dams rejects (&#147;<U>Concentration Plant</U>&#148;) to produce two types of pellet feed: (i) direct reduction
pellet feed (&#147;<U>DRPF</U>&#148;) and (ii) blast furnace pellet feed (&#147;<U>BFPF</U>&#148;) (collectively, &#147;<U>Pellet Feed</U>&#148;). BFPF is supposed to feed a pelletizing plant to be constructed by BUYER (&#147;<U>Pelletizing Plant I</U>&#148;), during its initial start-up phase. The Concentration Plant is to be located at Casa de
Pedra Mine, in an area owned by SELLER to be assigned to BUYER on a free lease (<I>commodato</I>) basis for this purpose; and </P>
<P align="justify">
<B>(D) </B>the Parties simultaneously execute (i) a Low Silica ROM Iron Ore Supply Contract; (ii) a High Silica ROM Iron Ore Supply Contract; (iii) a Port Operating Services Agreement; and (iv) a Support Agreement (solely in relation to Clause 2
thereof) (all such agreements, but excluding this Iron Ore Supply Contract and Other Covenants (Tailing Dam Rejects), the &#147;<U>Related</U> <U>Contracts</U>&#148;);</P>
<P align="justify">
The Parties hereby execute this Iron Ore Supply Contract and Other Covenants (the &#147;<U>Contract</U>&#148;), which shall be governed by the following clauses and conditions: </P>
<P align="center">
<B>CLAUSE ONE &#150; SCOPE</B> </P>
<P align="justify">
<B>1.1.</B> The scope of this Contract is the supply by SELLER to BUYER of tailing dam rejects deposited at tailing dams B-IV and B-V of the Casa de Pedra Mine, with the chemical properties (specifications) for the rejects of each tailing dam as set
forth in <U>Attachment I</U> hereto (the &#147;<U>Product</U>&#148;), free of any encumbrance, charges, debts or doubts, with due regard to the other clauses of this Contract. All references to Product in this Contract shall comprise both types of
tailing dam rejects to be supplied hereunder or each of them separately, as required by the context of each specific provision. </P>
<P align="justify">
<B>1.1.1 </B>For the purposes of supply of Products hereunder, SELLER authorizes BUYER to have the Products removed as provided in this Contract. SELLER shall provide free access to tailing dams B-IV and B-V to BUYER&#146;s personnel, equipment,
material as required for the performance of this Contract. The Parties shall discuss in good faith the terms and conditions of such access by BUYER in order to comply with this Contract. </P>
<P align="center">
<B>CLAUSE TWO &#150; TERM, QUANTITIES AND CONDITIONS FOR SUPPLY </B></P>
<P align="justify">
<B>2.1.</B> <B><I>Term of Supply.</I></B> The Product shall be supplied for [&#149;]<SUP>1</SUP> consecutive months, beginning when the Concentration Plant starts to operate (which is expected to occur in [&#149;] of the Mining Year of [&#149;]).
For the intents and purposes of this Contract, &#147;<U>Mining Year</U>&#148; shall mean the period of 12 (twelve) months beginning on April 1<SUP>st</SUP> of a calendar year and ending on March 31<SUP>st</SUP> of the subsequent calendar year. </P>
<P align="justify">
<B>2.1.1. </B><B><I>Extension.</I></B> In case SELLER supplies an amount of Products lower than the Contractual Quantity (as defined in Clause 2.2 below) as of the end of the term provided in Clause 2.1, the term of this Contract shall be extended
for a maximum period of [&#149;] months; provided that, in no event shall the term of this Contract exceed [&#149;] unless otherwise agreed by the Parties.</P>
<P align="justify">
<SUP>1</SUP> Text marked as [&#149;] denotes CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. </P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B><B> </B></P>

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<P align="justify">
<B>2.2.</B> <B><I>Contractual Quantity.</I></B> SELLER undertakes to make available to BUYER [&#149;] wet metric tons of Product (such quantity of Product being hereinafter referred to as the &#147;<U>Contractual Quantity</U>&#148;). <B> </B></P>
<P align="justify">
<B>2.3.</B> <B><I>Quantities Effectively Supplied.</I></B> The quantity of Product effectively supplied under this Contract shall be determined based on the weighing of each Batch (as defined below) of Product supplied, to be carried out in
accordance with the criteria and other procedures set forth in <U>Attachment</U> <U>III</U> hereto, and shall be based on the weighing certificates provided on such <U>Attachment III</U>. For the purposes of this Contract, the term
&#147;<U>Batch</U>&#148; means the quantity of Product effectively supplied during the period between the first and last day of a determined month, as indicated on the weighing certificates provided. </P>
<P align="justify">
<B>2.4.</B> <B><I>Place of Removal.</I></B> The Contractual Quantity to be made available to BUYER under this Contract is located at tailing dams B-IV and B-V. On the date for beginning of supply of the Product, BUYER may start removing the Product
from tailing dams B-IV and B-V, at its own cost and expense, assuming all responsibilities for all activities relating to such removal, in accordance with this Contract. </P>
<P align="justify">
<B>2.5.</B> <B><I>Transfer of Ownership. </I></B>Title to and risks in relation to the Product shall be transferred from SELLER to BUYER upon removal thereof by BUYER from tailing dams B-IV and B-V. </P>
<P align="justify">
<B>2.6. </B><B><I>Communication between SELLER and BUYER. </I></B>The Parties undertake to keep close and frequent communication throughout the term of this Contract aiming at the achievement of the performance of their obligations under this
Contract, as follows: </P>
<P align="justify">
<B>2.6.1. </B><B><I>Monthly Meetings</I></B><I>.</I> Each Party shall indicate by written notice to the other Party, no later than 30 (thirty) days of the date of execution of this Contract, a committee of three or four officers and/or employees in
charge of representing that Party in the management of the day-to-day operations under the Contract (the &#147;<U>Representation Committee</U>&#148;). The Representation Committee of each Party shall convene on a monthly basis, on a date to be
agreed upon by the Parties through mutual discussion in good faith (and, if not a business day, the immediately following business day) to discuss and define any issues related to the operations under this Contract and the Parties&#146; performance
of their obligations hereunder, such as: </P>
<blockquote>
  <p align="justify">
    - Planning and nomination of Quantity to be supplied by SELLER in the next month;<br>
    - Review of the actual performance and quality of the supply of the Product for the immediately preceding month;<br>
    - Reconciliation of Actual vs Budget for the operation
    of the month; and <br>
    - Discuss and agree in good faith any counter-measures (but in any event without prejudice to any provisions of this Contract) that shall be taken by each Party, as applicable, for any non-conformity, quality deviations or
    nonperformance of the Parties&#146; obligations under this Contract. </p>
</blockquote>
<P align="justify">
<B>2.6.2.</B><B><I> Yearly Meetings</I></B>. The Representation Committee of the Parties shall annually convene on a date to be mutually agreed by the Parties in each Mining Year to discuss the operations and performance of the Parties&#146;
obligations under this Contract for the preceding Mining Year, as well as issues such as: </P>
<blockquote>
  <p align="justify">
    - Planning for next Mining Year;<br>
    - Review the actual performance and quality of the supply of the Product for the previous Mining Year;<br>
    - Reconciliation of Actual vs Budget for the operation of the Mining Year; and <br>
    - Discuss and agree in good faith any counter-measures that shall
    be taken by each Party, as applicable, for any non-conformity, quality deviations or nonperformance of the Parties&#146; obligations under this Contract.</p>
</blockquote>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B><B> </B></P>

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<P align="justify"><B>2.6.3.</B><B><I> INTERVENING PARTIES&#146; Attendance</I></B>. The Intervening Parties may appoint representatives being entitled to attend the Yearly and Monthly Meetings provided in Clause 2.6.1 and 2.6.2 at its sole discretion. </P>
<P align="justify">
<B>2.6.4.</B><B><I> Day-to-day Communication</I></B>. Further to the above, Parties shall keep, through any of the members of the Representation Committee, close daily communication in connection with the operations of this Contract. </P>
<P align="justify">
<B>2.7.</B><B><I> Access to BUYER&#146;s Daily Operations under this Contract</I></B><I>. </I>SELLER will be entitled to access and supervise BUYER&#146;s daily operations under this Contract, through a representative indicated by SELLER, including
but not limited to quality control procedures, such as weighing, sampling and analysis, among others, and related operations at tailing dams B-IV and B-V at Casa de Pedra Mine. BUYER will endeavor its best efforts to provide such clarification or
information requests which may be submitted by SELLER as a result thereof. </P>
<P align="center">
<B>CLAUSE THREE &#150; PRODUCT QUALITY </B></P>
<P align="justify">
<B>3.1.</B> <B><I>Quality of the Product Supplied</I></B>. The Parties hereby acknowledge and agree that all the chemical characteristics set out in <U>Attachment I</U> hereto as guaranteed specifications (the &#147;<U>Guaranteed</U>
<U>Specifications</U>&#148;) are mandatory and guaranteed by SELLER. The quality of the Product supplied shall be determined based on sampling and analysis to be carried out on each Batch in accordance with the criteria and other procedures set out
in <U>Attachment III</U> hereto. </P>
<P align="justify">
<B>3.1.1. </B><B><I>Guaranteed Specifications</I></B><I>.</I><B><I> </I></B>BUYER shall verify and report in writing to SELLER, on both a weekly and monthly basis, the average quality of the Product supplied to BUYER at the immediately previous week
and month, respectively. </P>
<P align="justify">
<B>3.1.2.</B> <B><I>Target Specifications</I></B><I>. </I>The target specifications described in <U>Attachment I</U> shall be used to calculate the Penalty / Bonus Component described in the formula set forth in Clause 4.1 below (the &#147;<U>Target
Specifications</U>&#148;). </P>
<P align="center">
<B>CLAUSE FOUR &#150; UNIT PRICE </B></P>
<P align="justify">
<B>4.1.</B> <B><I>Unit Price.</I></B> The price per wet metric ton (wmt) of Product supplied shall be, according to the conditions for delivery set out in Clause 2.3 above - determined on the basis of the quantities and quality (content of iron or
&#147;<U>Fe</U>&#148;) of each Batch, based on the following formula (the price, per wet metric ton, resulting from application of the mentioned formula, the &#147;<U>Unit Price</U>&#148;): </P>
<TABLE border=1 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
    <TR>
     <TD align="center" valign="middle" bgcolor="#CCCCCC"><B>      PU=P<SUB>1</SUB>+ [Penalty / Bonus Component]<br>
     </B></TD>
  </TR>
</Table>

<p><U>where</U>: </p>
  <p>
    <B>PU </B>= means Unit Price for a determined month of supply; </p>
  <p><B>P<SUB>1</SUB></B><B> = </B>means, as of April 1<SUP>st</SUP>, 2008, the equivalent in Brazilian currency to US&#36; [&#149;], it being certain that such amount shall be readjusted, at the beginning of each Mining Year, based on
    the same percentage readjustment as iron ore fines of the type known as [&#149;],
as produced by the [&#149;] (hereinafter referred to as &#147;[&#149;]&#148;) and aimed for shipment through the Port of Tubar&atilde;o to Japan (such ore being hereinafter referred to as &#147;<u>Reference Ore</u>&#148;), as disclosed (by order):</p>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B><B> </B></P>

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<P align="justify"><B>(i)</B> in the Tex Report, as published by the Tex Report, Ltd. (or successor thereto); </P>
<P align="justify">
<B>(ii)</B> if the Tex Report, for any reason, is no longer available or does not any longer disclose the Reference Ore, the Metal Bulletin, published by Metal Bulletin, plc (or successor thereto); or </P>
<P align="justify">
<B>(iii)</B> if the Metal Bulletin, for any reason, is no longer available or does not any longer disclose the price of the Reference Ore, then the [&#149;] website or any other [&#149;] publication. </P>
<P align="justify">
Notwithstanding the provisions above, if, upon commencement of a Mining Year, the percentage readjustment applicable to the Reference Ore is not available and no other readjustment has been agreed to by the Parties in view of the conditions of the international iron ore market, the &#147;<B>P</B><SUB><B>1</B></SUB>&#148; applicable to the supplies to be carried out in the Mining Year that is about to begin shall temporarily be the &#147;<B>P</B><SUB><B>1</B></SUB>&#148; then in effect until such time as the percentage readjustment applicable to the Reference Ore is known or determined. As soon as the
percentage readjustment applicable to the Reference Ore is known or determined, the new &#147;<B>P</B><SUB><B>1</B></SUB>&#148; shall be determined in accordance with the provisions contained in this Clause, with retroactive effects to the beginning of the Mining Year in question, with any eventual differences (either upwards or downwards) resulting from temporary use of the
&#147;<B>P</B><SUB><B>1</B></SUB>&#148; then in effect in the formula for determination of the Unit Price being agreed between the Parties within a period of [&#149;] days counting from the date on which the new
&#147;<B>P</B><SUB><B>1</B></SUB>&#148; has been disclosed and communicated in writing by SELLER to BUYER. </P>
<P align="justify">
In the event the Reference Ore should no longer be produced or sold, the Parties shall promptly replace it, for purposes of readjusting &#147;<B>P</B><SUB><B>1</B></SUB>&#148;, with such product that succeeds Reference Ore or with such
other type of iron ore that is representative on the international iron ore market that is agreed to by the Parties. </P>
<P align="justify">
For purposes of translating the &#147;<B>P</B><SUB><B>1</B></SUB>&#148; into Brazilian currency, SELLER shall use the
average of quotations for sale of the United States Dollar as disclosed by the Brazilian Central Bank (BACEN) by means of transaction PTAX 0800, option 5 (or such transaction as may replace same on the BACEN System - SISBACEN), in the month prior to
that for issuance of the invoice relating to the supply of the Product, and shall take &#147;<B>P</B><SUB><B>1</B></SUB>&#148; to 2 (two) decimal places after rounding off. &#148;<U>PTAX</U>&#148; means the ask rate which means the Brazilian Reais&#146; bid and Dollar&#146;s ask rate, expressed as the amount of Brazilian Reais per one Dollar, published by the Brazilian Central Bank (BACEN) on SISBACEN Data System under transaction code PTAX-800, Option 5,
"<I>Venda</I>" by approximately 6:00 p.m., S&atilde;o Paulo time;</P>
<P align="justify">
<B>Penalty / Bonus Component</B> = (Fe% - Fe% Target Specifications) * US&#36;[&#149;]/wmtu;</P>
<P align="justify"> wmtu = [&#149;]% of Fe Content of each wmt (= [&#149;]kg of Fe content in wmt)</P>
<P align="justify"> <B>Fe%</B> = means the actual average iron content of QL in a determined
  month; </P>
<P align="justify">
<B>QL</B> = means the quantity of the Batch effectively supplied by SELLER to BUYER in a given month, as indicated on the weighing certificates issued in the manner set forth in <U>Attachment III</U> hereto; and<B> </B></P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B><B> </B></P>

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<P align="justify">
<B>Fe% Target Specifications</B> = means the applicable iron content of Fe set forth in <U>Attachment</U> <U>I</U> hereto. </P>
<P align="justify">
<B>4.2.</B> <B><I>Taxes.</I></B> The Parties acknowledge and agree that the amount attributed to &#147;<B><SUP>P</SUP></B><B>1</B><SUP>&#148; in Clause 4.1</SUP> above does not include taxes of any kind levied on the Product and/or on the supply of
the Product (subject to Clauses 8.2, 8.3 and 8.4, as and if applicable), such as the Federal Social Integration Program &#150; PIS, the Social Security Finance &#150; COFINS contributions and the State Value-Added Tax on Circulation of Goods and
Services &#150; ICMS. The taxes currently imposed on the Product and/or on the supply of the Product as well as the formula for the addition of those taxes, if applicable, to the Unit Price are disclosed in <U>Attachment V</U> hereto. </P>
<P align="center">
<B>CLAUSE FIVE &#150; BILLING AND PAYMENT </B></P>
<P align="justify">
<B>5.1.</B> <B><I>Issuance of Invoices.</I></B> On the last day of each month, SELLER shall issue an invoice (&#147;<U>NFF</U>&#148;) for each Batch of Product supplied and submit such NFF to BUYER within no more than 3 (three) Working Days from the
issue date, with due regard to the provisions of this Clause and Applicable Law. </P>
<P align="justify">
<B>5.1.1.</B> The NFFs shall be issued to BUYER based on the weighing certificates provided in the manner set forth in <U>Attachment III</U> hereto in relation to each Batch of Product removed. Each NFF is to reflect the value of the Batch of Product supplied, in view of the Unit Price and the quantity of the Batch. </P>
<P align="justify">
<B>5.2.</B> <B><I>Payment Term of the NFFs.</I></B> The NFFs are to be paid by BUYER within a period of no more than 30 (thirty) days counting from the date of BUYER&#146;s receipt of original NFF, without any financial compensation or inflation
adjustment being due for such payment term. </P>
<P align="justify">
<B>5.2.1.</B> In the event any NFF contains any irregularity, in BUYER&#146;s opinion, BUYER shall return it to SELLER within a period of no more than 5 (five) Working Days from receipt thereof, with SELLER being responsible for remedying such
irregularity and resubmitting it to BUYER within a period of no more than 5 (five) Working Days. </P>
<P align="justify">
<B>5.2.2.</B> In case there is any disagreement between the Parties in relation to any NFF received by BUYER, such disagreement shall be resolved in a period of no more than 30 (thirty) days counting from the date such disagreement is notified by
any Party to the other, with any adjustments (either upwards or downwards) in the value of the NFF in relation to which there has been a disagreement being reflected in the immediately subsequent NFF or, if there are none, paid within the same
deadline established in accordance with Clause 5.2 above, counting from the date on which such adjustments have been determined and agreed to by the Parties. </P>
<P align="justify">
<B>5.2.3.</B> BUYER shall issue a debit note for such sums as SELLER expressly recognizes as being owed to BUYER under this Contract, with full offset of such amounts as are due to BUYER, at BUYER&#146;s discretion, against amounts that BUYER has to
pay to SELLER. In the event it is not possible or advisable to carry out the offset set forth in this Clause, the debit note shall be paid by SELLER within the same deadline established under Clause 5.2 above counting from the issue day of such
debit note. </P>
<P align="justify">
<B>5.3.</B> <B><I>Manner of Payment.</I></B> Any payment due by BUYER to SELLER shall be made by means of available electronic transfer (TED - &#147;<I>transfer&ecirc;ncia eletr&ocirc;nica dispon&iacute;vel</I>&#148;) of funds to SELLER&#146;s
current account indicated in <U>Attachment IV</U> hereto (or to such other account as may be notified by SELLER to BUYER under the terms of this Contract), with the transfer voucher slip serving as proof
of payment and discharge of the respective obligation.  Any payment due by SELLER to BUYER shall also be carried out through the TED system for transferring funds to BUYER&#146;s current account indicated in <u>Attachment IV</u> hereto (or to such
other account as may be notified by BUYER to SELLER under the terms of this Contract), with the transfer voucher slip serving as proof of payment and discharge of the respective obligation. </P>
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<P align="justify"><B>5.4.</B> <B><I>Late Payment Charges.</I></B> In the event any delay should occur with respect to payment of amounts due under this Contract by one Party to the other, the amount due and not paid shall be monetarily restated based on the variation
in the Reference Rate &#150; TR (or other such index as may replace the latter), plus late payment interest of 1% (one per cent) per month, calculated on a <I>pro rata </I>basis between the due date and the date of effective payment, with no other
type of increase being due. </P>
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<B>CLAUSE SIX &#150;FREE LEASE (COMODATO) </B></P>
<P align="justify">
<B>6.1. </B>SELLER and BUYER shall execute on the date hereof a Free Lease Agreement (<I>Comodato</I>), pursuant to which SELLER undertakes to assign to BUYER, on a free lease (<I>comodato</I>) basis, an area it owns at the Casa de Pedra Mine
measuring approximately [&#149;] m<SUP>2</SUP> [&#149;], located between tailing dams B-IV and B-V, in accordance with the specific layout contained in <U>Attachment V</U> hereto, area on which BUYER is to set up and operate (a) the Concentration
Plant, and (b) a yard for storage of the pellet feed produced in said Concentration Plant.</P>
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<B>CLAUSE SEVEN &#150; REPRESENTATIONS OF THE PARTIES </B></P>
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<B>7.1.</B> <B><I>Representations of SELLER.</I></B> SELLER hereby declares to BUYER, as of the signing date below and on the date of each supply of the Product, assuming responsibility for the correctness, truthfulness and completeness of such
representations, that: </P>
<P align="justify">
<B>(a)</B> it is a duly organized and validly established public joint stock corporation under the laws of Brazil and that it has full legal capacity to own and operate its facilities and conduct its business as conducted at present, and is duly
qualified to supply the Product to BUYER under the terms of this Contract; </P>
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<B>(b)</B> it has obtained all the corporate or similar authorizations required to sign this Contract and to comply with the obligations attributed to it hereunder; </P>
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<B>(c)</B> this Contract has been duly and validly executed and delivered by SELLER and constitutes a legal, valid and binding obligation insofar as the SELLER is concerned and is enforceable against it on the terms hereof; </P>
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<B>(d)</B> it is not insolvent, under court protection from creditors, extrajudicial or judicial recovery, and it is neither impeded from paying its obligations and nor has it been declared bankrupt; </P>
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<B>(e) </B>neither the execution and delivery of this Contract nor the consummation of the transactions and performance of the terms and conditions of this Contract by SELLER will (i) result in a violation or breach of or default under any provision
of the by-laws of SELLER; (ii) will result in a violation or breach of or default under any provision of any agreement, indenture or other instrument under which SELLER is bound; or (iii) violate any constitution, statute, law, regulation, rule,
ruling, charge, order, writ, injunction, judgment or decree (&#147;<U>Applicable Law</U>&#148;) of or by any federal, national, state, municipal, local or similar government, governmental, regulatory, administrative or tax authority, agency or
commission or any court, tribunal, or judicial or arbitral body (&#147;<U>Governmental Authority</U>&#148;); which may negatively affect or prevent the performance of its obligations, including, without limitation, SELLER&#146;s obligation to
supply the Product and, therefore, the removal thereof by BUYER hereunder, pursuant to the terms and conditions hereof; </P>
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<P align="justify">&nbsp;</P>
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<B>(f)</B> it has good, valid and marketable title to, valid and subsisting leasehold or acquisition interests in or to, or valid, binding and enforceable rights to, the Casa de Pedra Mine and will have and keep good, valid and marketable title to,
valid and subsisting leasehold or acquisition interests in or to, or valid, binding and enforceable rights to the tailing dams B-IV and B-V and other relevant assets and rights required for the performance hereof (&#147;<U>Assets</U>&#148;); </P>
<P align="justify">
<B>(g)</B> all Assets are (i) in good operating condition and repair, and are adequate for the uses to which they are being put and (ii) sufficient for the performance of the obligations of SELLER hereunder;</P>
<P align="justify">
<B>(h)</B> it is not a party and will not enter into any agreement, arrangement, transaction, lease, license, note, mortgage, indenture, contract and other contractual rights and obligations, whether written or oral which negatively affect or
prevent the performance of its obligations hereunder; </P>
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<B>(i)</B> it has been and will continue to be in full compliance with all Applicable Law related to the performance of this Contract, including without limitation those regarding tax, environmental, labor and social security matters; </P>
<P align="justify">
<B>(j)</B> it will obtain and keep all licenses, permits and authorizations required for its operation and the performance of this Contract; and </P>
<P align="justify">
<B>(k) </B>there is no court or administrative litigation, action, suit, proceeding, condemnation, investigation, claim, audit, order, decision, decree, writ, judgment, injunction, determination or award or any arbitration proceeding that may
prevent, limit or affect SELLER&#146;s ability to perform any of its obligations under this Contract. </P>
<P align="justify">
<B>7.2.</B> <B><I>Representations of BUYER</I></B>. BUYER hereby declares to SELLER, as of the signing date below and on the date of each supply of the Product, assuming responsibility for the correctness and truthfulness of such representations,
that: </P>
<P align="justify">
<B>(a)</B> it is a duly organized and validly established joint stock corporation under the laws of Brazil and that it has full legal capacity to own and operate its facilities and conduct its business as conducted at present, and is duly qualified
to acquire SELLER&#146;s Product under the terms of this Contract; </P>
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<B>(b)</B> it has obtained all the corporate or similar authorizations required to sign this Contract and to comply with the obligations attributed to it hereunder; </P>
<P align="justify">
<B>(c)</B> this Contract has been duly and validly executed and delivered by SELLER and constitutes a legal, valid and binding obligation insofar as the BUYER is concerned and is enforceable against it on the terms hereof;</P>
<P align="justify">
<B>(d)</B><B> </B>it is not insolvent, under court protection from creditors, extrajudicial or judicial recovery, and it is neither impeded from paying its obligations and nor has it been declared bankrupt;</P>
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<B>(e)</B><B> </B>neither the execution and delivery of this Contract nor the consummation of the transactions and performance of the terms and conditions of this Contract by BUYER will (i) result in a violation or breach of or default under any
provision of the by-laws of BUYER and (ii) result in a violation or breach of or default under any provision of any agreement, indenture or other instrument under which BUYER is bound; </P>
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<B>(f)</B> it has been and will continue to be in full compliance with all Applicable Law related to the performance of this Contract, including without limitation those regarding tax, environmental, labor and social security matters; </P>
<P align="justify">
<B>(g)</B> it has obtained and will keep all licenses, permits and authorizations required for its operation and the performance of this Contract; and </P>
<P align="justify">
<B>(h) </B>there is no court or administrative litigation, action, suit, proceeding, condemnation, investigation, claim, audit, order, decision, decree, writ, judgment, injunction, determination or award or any arbitration proceeding that may
prevent, limit or affect BUYER&#146;s ability to perform any of its obligations under this Contract. </P>
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<B>CLAUSE EIGHT &#150; EFFECTIVE TERM </B></P>
<P align="justify">
<B>8.1.</B> This Contract shall take effect on the signing date below, <U>except</U>, <U>however</U>, that the supply of the Product shall begin on the date set out in Clause 2.1 above. This Contract shall be terminated (a) upon expiration of the
term set forth in Clause 2.1 above or (b) in the manner provided by Clause 10 below, whichever occurs first. </P>
<P align="justify">
<B>8.2.</B> The Parties acknowledge and agree that BUYER shall be registered with the Brazilian Revenue Service (<I>Secretaria da Receita Federal do Brasil</I>) as a preponderantly exporting company (<I>empresa preponderantemente exportadora),
</I>to obtain the benefit of the incentive tax regime addressed to Brazilian exporters for the suspension of the imposition of the PIS and COFINS Contributions under Law 10,865 dated April 30, 2004. BUYER shall use its best efforts to obtain
registration as a preponderantly exporting company within 06 (six) months as from the execution of this Contract or before the commencement of Product supply hereunder, whatever occurs later. </P>
<P align="justify">
<B>8.2.1. </B>If BUYER fails to obtain registration as a preponderantly exporting company, or if at any time during the term of this Contract PIS and COFINS Contributions are imposed on the supply of Products under this Contract, the Parties agree
that the cost of PIS and COFINS Contributions shall be added to the Unit Price in accordance with Clause 4.2 above and <U>Attachment V</U> hereto, and BUYER shall use, to the extent possible, the tax credits related to the imposition of PIS and
COFINS contributions on the supply of Products hereunder for each monthly supply of Products to set off against BUYER&#146;s federal tax liabilities related to the Brazilian Corporate Income Taxes or other federal taxes, within 12 (twelve) months
counted from such monthly supply of Products.</P>
<P align="justify">
<B>8.2.2. </B>If during such 12 (twelve) month term BUYER does not fully set off the PIS and COFINS credits recognized as a result of the supply of Products hereunder (in the manner described in Clause 8.2.1 above) for each monthly supply of
Products, SELLER shall grant BUYER with non-interest bearing loans, under a current account mechanism, in the amount equivalent to 50% (fifty per cent) of the economic and financial burden equivalent to the amount of PIS and COFINS credits not
settled-off, at the end of each 12 (twelve) month term after the date on which the supply of Products hereunder commences to be subject to the imposition of PIS and COFINS Contributions. </P>
<P align="justify">
<B>8.2.3. </B>If and when BUYER succeeds on fully setting-off the PIS and COFINS credits mentioned in Clause 8.2.2, above against federal taxes, BUYER shall repay to the SELLER the portion of the loan referred to in Clause 8.2.2 equivalent to the
amount of the credits fully setoff.<B> </B></P>
<P align="justify">
<B>8.3. </B>In addition, the Parties shall use their best efforts to obtain within six (6) months as from the date of execution of this Contract, a binding ruling, in form and substance acceptable to both Parties and each shareholder of BUYER, from
the Tax Authorities of the States of Minas Gerais (<I>Secretaria </I> <i>de Estado da Fazenda de Minas Gerais) </i>providing that no ICMS or similar tax will be payable by any of the Parties, or its affiliates, in connection with any transactions contemplated herein.</P>
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<P align="justify"><B>8.3.1. </B>If the ICMS starts to be effectively imposed on the supply of Products under this Contract, the Parties agree that the cost of ICMS shall be added to the Unit Price in accordance with Clause 8.2 above and <U>Attachment V</U> hereto. In
this case, SELLER hereby commits to acquire or cause its Affiliates (as defined in Clause 11.4.2 below) to acquire, for every 6 (six) months (the initial date of the first six-month period shall be considered the date on which the ICMS shall be
considered due according to this Clause 8.3.1) all ICMS credits generated to BUYER and its Affiliates under this Contract and accumulated during each such 6 (six)-month period. The ICMS credits acquisition herein shall be made at nominal value, up
to the amount of the ICMS tax debts registered by any branches of SELLER and/or any of the branches of its Affiliates located in the State of Minas Gerais, which credits were generated in the relevant 6 (six)-month period. SELLER and SELLER&#146;s
Affiliates shall acquire all BUYER and BUYER&#146;s Affiliates ICMS credits generated in the State of Minas Gerais up to the limit of SELLER and SELLER&#146;s Affiliates ICMS tax debts generated in that State excluding the SELLER&#146;s and
SELLER&#146;s Affiliates ICMS tax debts offset against (i) SELLER&#146;s own ICMS tax credits and (ii) ICMS tax credits of branches of wholly owned subsidiaries of SELLER.</P>
<P align="justify">
<B>8.3.2. </B>If the ICMS starts to be effectively imposed on the supply of Products under this Contract and the SELLER and/or its Affiliates are not able to acquire all ICMS credits generated to BUYER and its Affiliates under this Contract every
(6) six-month period, SELLER shall submit to BUYER within 10 days after each (6) six-month period (as regulated under this Clause 8.3), documents evidencing (i) the amount of ICMS tax debts registered by each of its branches and the branches of
SELLER&#146;s Affiliates located in the State of Minas Gerais; (ii) the amount of ICMS tax credits registered by SELLER&#146;s branches and the branches of its wholly owned subsidiaries that were or shall be transferred to SELLER within said (6)
six-month period and (iii) the amount of ICMS tax credits registered by BUYER or any of its Affiliates as a result of the acquisition of Products under this Contract which are transferable to SELLER or SELLER&#146;s Affiliates (the
&#147;<U>Transferable ICMS Tax Credits</U>&#148;). </P>
<P align="justify">
<B>8.3.3. </B>If the amount of ICMS tax debts of SELLER and its Affiliates registered in the relevant 6 (six) month period as a result of the supply of Products under this Contract is lower than the Transferable ICMS Tax Credits determined under
Clause 8.3.2 above, such difference may be carried over (to be set-off) within the following 12 (twelve) months to be transferred from BUYER or BUYER&#146;s Affiliates to SELLER and/or SELLER&#146;s Affiliates as provided in this Clause 8.3. </P>
<P align="justify">
<B>8.3.4. </B>If the Parties fail to obtain the authorizations required by the Tax Authorities of the State of Minas Gerais to transfer ICMS credits as provided in this Clause 8.3 or if any difference mentioned in Clause 8.3.3 above is not
transferred by BUYER or its Affiliates to SELLER or SELLER&#146;s Affiliates within the 12 (twelve) month period mentioned in Clause 8.3.3 above, SELLER shall grant BUYER with non-interest bearing loans, under a current account mechanism, in the
amount equivalent to 50% (fifty per cent) of the economic and financial burden equivalent to the non-transferable portion of the ICMS tax credits registered by BUYER or BUYER&#146;s Affiliates as from the end of each 12 month-term after the date on
which the supply of Products hereunder commences to be subject to the imposition of ICMS. </P>
<P align="justify">
<B>8.3.5. </B>If and when BUYER succeeds on transferring the ICMS tax credits mentioned in Clause 8.3.4, above, BUYER shall repay to the SELLER the portion of the loan referred to in Clause 8.3.4 in the amount of the transferred ICMS tax credits.<B>
</B></P>
<P align="justify">
<B>8.4. </B>Once BUYER&#146;s right to offset or recover the PIS and COFINS credits or to transfer the ICMS tax credits in connection with a given month elapsed after the 5 (five) year period of statute of
limitation set forth by the applicable legislation counted from the recognition of tax credits by BUYER or its Affiliates (as defined in Clause 11.4.2 below) related to PIS and COFINS contributions as set forth in Clause 8.2.1 or related to the
ICMS, as set forth in Clause 8.3.1, the balance, if any, of the relevant loans made in accordance with Clauses 8.3.1, 8.3.2, 8.3.4 and 8.3.5, above, shall be forgiven by SELLER. </P>
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<P align="justify"><B>8.5</B><B> </B>In the event that the physical and/or symbolic transfers, flows of invoices, transfer of title or the supply of the Product under this Contract becomes subject to the ICMS at any time during this Contract, or to any value added tax
imposed by the States in a form identical to the ICMS imposition, the Parties agree that clauses 8.3.1 to 8.3.4 shall apply to the ICMS or such value added tax. </P>
<P align="justify">
<B>8.6.</B> If at any time during the term of this Contract, as a result of change of Applicable Law, PIS and COFINS Contributions and/or the ICMS are replaced by new taxes imposed by any federal, state or municipal authority, which are imposed on
the supply of Products under this Contract, or if other taxes are created and so imposed, the Parties shall negotiate in good faith on how the tax burden will be shared between them. If there is no agreement between the Parties within the period of
six months counted from the change in Applicable Law mentioned in this Clause, the Parties shall share on a 50/50 basis the economic and financial burden equivalent to the amount of said tax burden. </P>
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<B>CLAUSE NINE &#150; ACTS OF GOD AND FORCE MAJEURE </B></P>
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<B>9.1. </B>Provided that the provisions of this Clause are complied with, neither of the Parties shall be held liable to the other Party due to non-fulfillment of any obligation (except pecuniary obligations) attributed to it under this Contract
and insofar as such non-fulfillment is directly attributable to an event of force majeure or act of God under Brazilian Law, as defined by article 393, sole paragraph, of the Civil Code, including but not limited to (a) acts of wars, (whether
declared or not), epidemics, sabotage, military actions or hostilities and acts of terrorism or the escalation thereof occurring after the date hereof; (b) regional or national strikes, work stoppages, slowdowns or lockouts of any trade category
involved in production of the Product or adversely affecting abilities of either Party to comply with the terms and conditions of this Contract; (c) acts of God and inclement weather or such other atypical events of nature that are not predictable
and/or the effects of which cannot be avoided by employing reasonable control measures; (d) accidents or emergency stoppages in order to prevent accidents that impede or restrict the operation and/or construction and/or expansion of installations
related to the production of the Product; (e) any decision by an arbitration panel or court of law (even if preliminary and subject to further appeal), obtained by or granted in favor of third parties that prevents compliance with either Party's
obligations under this Contract, except for litigation pertaining to right of first refusal on iron ore from Casa de Pedra Mine, included but not limited to the lawsuits listed in <U>Attachment VII</U> hereto (for the avoidance of doubt, those
lawsuits shall not be considered nor deemed to be Force Majeure Event for every and all purposes of this Contract); (f) expropriation, or statement of eminent domain for expropriation purposes (&#147;declara&ccedil;&atilde;o de utilidade
p&uacute;blica&#148;), or any other restriction imposed by any public authority on either Party's assets adversely affecting either Party&#146;s assets or abilities to comply with the terms and conditions of this Contract; (g) any changes in
Applicable Law occurring after the date hereof which prevents either Party from complying with the terms and conditions of this Contract; and (h) any other circumstance, change, development, event or fact that is unpredictable or unavoidable by the
affected Party and which prevents such Party from complying with the terms and conditions of this Contract, if and to the extent any such events qualify as force majeure under article 393 sole paragraph of the Civil Code (&#147;<U>Force Majeure
Event</U>&#148;). </P>
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<B>9.2. </B>In case of the occurrence of a Force Majeure Event, the Party whose obligations are being affected by such Force Majeure Event (such Party being hereinafter referred to as the &#147;<U>Affected</U> <U>Party</U>&#148;) shall have 5 (five)
Working Days counting from such event to notify the other Party of same and prove by means of appropriate documents, as the case may be, the occurrence of such event, as well as its direct or indirect impact on its obligations under this Contract.
Notwithstanding, the </P>
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Affected Party is to implement at its own expenses and as soon as possible measures to mitigate the effects and the direction of the Force Majeure Event, indicating such measures to the other Party and keeping the latter constantly informed on the
progress of such measures. </P>
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<B>CLAUSE TEN &#150; TERMINATION AND CONSEQUENCES OF TERMINATION </B></P>
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<B>10.1.</B> Without prejudice to any other rights provided in this Contract but with the exclusion of any other termination right, except for those provided in this Clause 10, this Contract may be terminated in the cases indicated below, provided
that the Party that gives rise to such termination, either due to breach of contract or other circumstance attributable to it (with such Party being hereinafter referred to as the &#147;<U>Defaulting Party</U>&#148;), shall not have any right to
file a complaint and/or claim of any kind of indemnity whatsoever: </P>
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<B>(a)</B><B> </B>by the other Party, at its exclusive discretion, in the event of non-compliance by the Defaulting Party with any monetary obligation set forth in this Contract, provided that the other Party notifies the Defaulting Party with
respect to such non-performance and the Defaulting Party does not remedy such non-compliance within a period of [&#149;] days counting from the date of receipt of such notification; or </P>
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<B>(b)</B> by BUYER at its exclusive discretion, in the event of occurrence of a Material Default, as defined in <U>Attachment VI</U> hereto; or </P>
<P align="justify">
<B>(c) </B>by the other Party, at its exclusive discretion, in case any representation made in this Contract by the Defaulting Party proves to be incorrect or untruthful, for any reason, provided that if such incorrect or untruthful matter can be
remedied and (i) is not remedied within a period of [&#149;] days counting from the date of receipt of such notification pointing out the incorrect or untruthful representation and (ii) results in a Material Default; or </P>
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<B>(d)</B> by the other Party, at its exclusive discretion, in the event of acceptance of a process for court recovery, the commencement of extrajudicial recovery, declaration of bankruptcy or dissolution of the Defaulting Party; or </P>
<P align="justify">
<B>(e)</B> by BUYER, in case of Force Majeure exceeding [&#149;] months upon immediately effective notice to SELLER.</P>
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<B>10.2.</B> The Parties agree that this Contract may be terminated by SELLER at any time after [&#149;], upon at least one year prior written notice to BUYER. </P>
<P align="justify">
<B>10.3.</B> Should expiration or termination of this Contract occur for any reason, including Force Majeure (under this Contract or the Free Lease Agreement provided in Clause Six hereof, including in case of termination under Clause 3.2 of the
Free Lease Agreement), and except as provided in Clause 10.5, and there is still a balance of the Contractual Quantity to be removed by BUYER under this Contract (the &#147;<U>Contractual Quantity Balance</U>&#148;), then SELLER shall, within
[&#149;] days from the date of expiration or termination,</P>
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(i) sell to BUYER a product similar in quality to the Pellet Feed (&#147;<U>Similar Product</U>&#148;), and in a quantity equivalent to the one that would have been produced by using the Contractual Quantity Balance (&#147;<U>Balance Quantity of
Pellet Feed</U>&#148;).</P>
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The selling price per wmt of the Similar Product shall be the sum of (a) P<SUB><B>1</B></sub>, as defined in Clause 4.1, converted into Pellet Feed based on the accumulated average recovery yield ratio of the Concentration Plant, (b) the
variable costs (<I>custos vari&aacute;veis</I>) of production of Pellet </P>
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Feed, which shall include, but not be limited to, mining costs, beneficiation costs and handling costs, and (c) the fixed costs (<I>custos fixos</I>) of production of Pellet Feed.</P>
<P align="justify">
For purpose of calculating the Balance Quantity of Pellet Feed, the Parties assume that the production of the Concentration Plant is expected to be 1/3 (one third) of BFPF and 2/3 (two thirds) of DRPF. </P>
<P align="justify">
In case BUYER incurs additional costs at Pelletizing Plant I as a result of differences in quality between the Similar Product and BFPF, SELLER agrees to compensate BUYER for all such additional costs.</P>
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In case there is a significant loss of production at Pelletizing Plant I due to the differences in quality referred to in the preceding paragraph, SELLER shall endeavor its best efforts to mitigate such loss of production at its own expense; </P>
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or </P>
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(ii) pay the Compensation Amount (as defined in Clause 10.4 below) to BUYER; </P>
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or </P>
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(iii) both sell to BUYER the Similar Product (in an amount lower than the Balance Quantity of Pellet Feed) and pay monetary compensation for the difference between the quantity of Similar Product sold and the Balance Quantity of Pellet Feed. </P>
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Provided, however, that, exclusively in the case of the compensation by SELLER to BUYER related to the lack of production of BFPF from the Concentration Plant, BUYER shall be entitled to choose, at its own discretion, among the forms of compensation
as described in the preceding items. </P>
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<B>10.4.</B> Any monetary compensation payable by SELLER to BUYER hereunder shall be determined as follows: </P>
<P align="justify">
(a) the amount of such monetary compensation shall be discussed and agreed in good faith between SELLER and BUYER (with the Brazilian SPC&#146;s good faith approval) within [&#149;] days from the date a written request to that effect is made by
BUYER and shall correspond to (without the duplication or double counting) the cash flow (x) (<I>fluxo de caixa</I>) shortfall in connection with the loss of revenues resulting from the sales of the Balance Quantity of Pellet Feed not effected by
BUYER (it being understood that &#147;cash flow&#148; shall mean BUYER&#146;s net sales revenues (<I>receita l&iacute;quida de vendas</I>) minus variable costs (<I>custos vari&aacute;veis</I>) associated with such revenue shortfall and determined
based on the then effective long and mid-term business plans of BUYER and (y) any penalties, damages or indemnities paid by BUYER to any third parties under commercial arrangements as a result of the Contractual Balance (but excluding penalties,
damages or indemnities, if any, payable to purchasers of BUYER&#146;s products in connection with offtake agreements or other similar commercial arrangements) (the amount of such compensation, the &#147;<U>Compensation Amount</U>&#148;). For the
avoidance of doubt, an example of the calculation of the Compensation Amount is attached as <U>Attachment VII</U> hereto;</P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B><B> </B></P>

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(b) in case SELLER and BUYER do not reach an agreement on the Compensation Amount, such amount shall be determined by BUYER&#146;s independent auditor within 30 (thirty) days from the date a written request to that effect if made either by SELLER or
BUYER; and</P>
<P align="justify">
(c) the Compensation Amount shall be payable by SELLER to BUYER within 30 (thirty) days from the date (i) SELLER and BUYER reach an agreement on such amount or (ii) such amount is determined by BUYER&#146;s independent auditor, as the case may be.</P>
<P align="justify">
<B>10.5.</B> The Parties agree that the provisions of Clauses 10.3 and 10.4 shall not apply if the termination is caused by BUYER under Clauses 10.1 (a) or 10.1 (d). In all other cases of termination or expiration of this Agreement where there is a
Contractual Quantity Balance to be supplied by BUYER under this Contract, Clauses 10.3 and 10.4 shall apply. </P>
<P align="center">
<B>CLAUSE ELEVEN &#150; GENERAL PROVISIONS </B></P>
<P align="justify">
<B>11.1.</B> The Parties acknowledge and agree that this Contract contains all the requisites needed for this instrument serving as a valid document for commencement of execution proceedings (<I>t&iacute;tulo executivo extrajudicial</I>), for all
legal intents and purposes. </P>
<P align="justify">
<B>11.2.</B> This Contract reflects the entire understanding of the Parties with respect to its scope and replaces any and all previous agreements and understandings. Each one of the Parties hereby acknowledges and confirms that it is not signing
this Contract based on any representation, guarantee or other commitment by the other Party that is not fully reflected in the provisions hereof. Any matter relating to supply of the Product that is not specifically provided in this Contract shall
be examined separately and mutually agreed upon by the Parties. </P>
<P align="justify">
<B>11.3.</B> Without prejudice to the provisions contained in Clause 11.4 below, this Contract binds the Parties and/or successors on any degrees whatsoever. In this sense, in the event of merger, amalgamation (upstream merger under Brazilian law),
spin-off or change in control of either of the Parties, continuity of this Contract is expressly assured, obligating the successor or any third parties related in any manner to the merger, amalgamation, spin-off or change in control of either of the
Parties to comply with all the clauses, terms and conditions established in this Contract. </P>
<P align="justify">
<B>11.4.</B> Neither Party shall assign or transfer (in whole or in part) its rights or obligations under this Contract without the prior written consent of the other Party, which consent shall not be unreasonably withheld, delayed or conditioned;
provided, however, that (i) each of the Parties may assign all (but not a part) of its rights and obligations under this Contract without the prior written consent of the other Party to one of its Affiliates, as defined in Clause 11.4.2 below, and
(ii) in case any third party or an Affiliate of SELLER acquires the mining rights relating to the Casa de Pedra mine, (x) SELLER shall assign all (but not a part) of its rights and obligations under this Contract to such third party or Affiliate of
SELLER if there is no split (<I>desmembramento</I>) of such mining rights or (y) if split (<I>desmembramento</I>) of such mining rights occurs, SELLER and BUYER shall discuss in good faith to agree as to whether and how this Contract will be
assigned (in whole or in part) based on the shared understanding that the Parties shall seek the best way to ensure that all obligations under this Contract shall continue to be fulfilled in accordance with the terms hereof. This Contract shall be
binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns and shall be enforceable by the Parties hereto and their respective successors and permitted assigns.</P>
<P align="justify">
<B>11.4.1.</B> In addition to the foregoing, in the event of an assignment or transfer as stated in Clause 11.4 (i) the assigning Party shall (a) ensure that, as a part of such assignment, the assignee accepts the assignment of all rights and
obligations of the assigning Party under this Contract, and (b) shall remain jointly liable with the assignee for all obligations under this Contract. </P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B><B> </B></P>

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<P align="justify">
<B>11.4.2</B> For the purposes of Clause 11.4 and 11.4.1 above, &#147;<U>Affiliates</U>&#148; shall mean, with respect to any Party, a person that directly or indirectly controls, or is under common control with, or is controlled by, such person. As
used in this definition, &#147;control&#148; (including, with its correlative meanings, &#147;controlled by&#148; and &#147;under common control with&#148;) shall mean possession, directly or indirectly, of securities having 50% or more of the
voting power for the election of directors or other governing body of a corporation or 50% or more of the partnership or other ownership interests of any other person (other than as a limited partner of such other person). </P>
<P align="justify">
<B>11.5.</B> This Contract may only be amended or modified by means of prior agreement between the Parties and the signing of a specific amendment signed by both. </P>
<P align="justify">
<B>11.6.</B> Any omission or tolerance by the Parties in requiring the correct and punctual compliance with the specific or generic terms and conditions contained in this Contract, or in exercising any prerogative hereunder, shall not constitute any
kind of waiver, desistance or novation, and nor shall it affect the right of the Parties to exercise them at any time. </P>
<P align="justify">
<B>11.7.</B> In the event any provision of this Contract should be considered invalid, illegal or unenforceable for any reason, the validity, legality and enforceability of the remaining provisions contained in this Contract shall not in any manner
whatsoever be affected or prejudiced thereby and shall remain in full force and effect. The Parties shall negotiate in good faith to (i) replace any provisions considered invalid, illegal or unenforceable with valid, legal and enforceable provisions
or (ii) to enter into any further agreements or transactions as may be required under the Applicable Law, provided that in both (i) and (ii) the effects of the replacing provisions or further agreements or arrangements shall be equal to the economic
effects intended by BUYER as reflected in the provisions or transactions considered invalid, illegal or unenforceable. </P>
<P align="justify">
<B>11.7.1.</B> SELLER shall indemnify, reimburse or otherwise keep BUYER harmless against any and all costs, expenses, taxes, fees, liabilities or losses, including loss of revenues, arising from any of the events described in Section 11.7 above, in
order that no impact on the economic and financial standing of BUYER, as reflected in BUYER&#146;s mid and long-term business plans, occurs as a result of such events. Such indemnification, reimbursement and/or obligation to keep harmless include
but are not limited to the obligation of SELLER to reimburse any taxes, fees, charges (including CFEM &#150; <I>Compensa&ccedil;&atilde;o Financeira pela Explora&ccedil;&atilde;o de Recursos Minerais</I> - financial compensation against the
exploitation of mineral resources)<I> </I>which may be levied on NAMISA in relation to the operations, activities or obligations of the Parties under this Contract which may result of the events described in Section 11.7 above. </P>
<P align="justify">
<B>11.7.2. </B>SELLER<B> </B>shall have no right to be indemnified under the terms of this Contract or under Applicable Law with regard to the good standing maintenance of the mining rights related to the area where the tailing dams B-IV and B-V are
located.<B> </B></P>
<P align="justify">
<B>11.8.</B> This Contract does not create or intend to create any kind of company, association, joint venture, cooperative, partnership, consortium, or agency, and neither does it attribute or aim to create any kind of relationship involving
principal and agent, commercial representation, business management or other kind of similar legal arrangement between the Parties, except for those expressly provided in this Contract and directly related to the supply of the Product by SELLER to
BUYER. </P>
<P align="justify">
<B>11.9. </B>Each Party is responsible for covering its own costs and other expenses incurred or to be incurred in relation to the signing and execution of this Contract. </P>
<P align="justify">
<B>11.10.</B> Should, after the signature of this Contract, any taxes be created, or any tax rates, taxable base or manners for calculating any tax existing at the signing date below and involving taxable events related in any manner to this
Contract be altered, via Applicable Law, or any special tax benefit
available to the Parties related to this Contract granted by any federal, state or municipal taxing authorities be extinguished, the Parties shall negotiate, in good faith, to amend this Contract in order to restore its economic and financial
balance. </P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B><B> </B></P>

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<P align="center"><B>CLAUSE TWELVE &#150; CONFIDENTIALITY </B></P>
<P align="justify">
<B>12.1.</B> During the time this Contract remains in effect and for the period of 5 (five) years after termination hereof, the Parties undertake &#150; for themselves as well as on behalf of third parties related to them &#150; to maintain absolute
secrecy regarding the terms and conditions of this Contract, and also with respect to any and all information obtained as a result of this Contract, except (a) if the disclosure of such information is determined by this Contract or if such
information is already proven to be in the public domain without failure of the Party receiving confidential information of the other Party, (b) with the express and prior authorization of the other Party, (c) in order to exercise any rights
attributed to the Parties according to this Contract, (d) required by Applicable Law, by an order of any governmental authority or as a result of a judicial order, in which case the disclosure shall be limited to the terms and conditions that are to
be disclosed pursuant to such determination, and provided that the Party subject to such judicial order shall promptly notify the other Party and thus give such other Party the opportunity to limit or avoid the disclosure, to the extent permitted by
the Applicable Law or (e) in case of BUYER, the disclosure of information to the Intervening Parties and shareholders of Japanese SPC. </P>
<P align="center">
<B>CLAUSE THIRTEEN &#150; COMMUNICATIONS </B></P>
<P align="justify">
<B>13.1.</B> All notices, communications, requests, authorizations and consents that have to be transmitted or given by the Parties under this Contract shall only be valid and effective if provided in writing through correspondence (under protocol
or sent against notice of receipt) or fax (with proof of transmission) addressed in the following manner (or in such other manner as may be notified subsequently by one Party to the other): </P>
<P align="justify">
<B>(a)</B> BUYER: </P>
<P align="justify">
Address: <I>Alameda da Serra, n&ordm; 400, 9&ordm; andar <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CEP 34000-000 &#150; Nova Lima &#150; MG </I><br>
Phone: (0xx31) 3269-1410<br>
Fax: (0xx31) 3269-1414 <br>
<I>At.: Diretor Comercial </I>(Attention of Commercial Director) <br>
<I>Cc.: Diretor de Opera&ccedil;&otilde;es e Diretor Jur&iacute;dico </I>(Copied to Operations Director and Legal Director) </P>
<P align="justify">
<B>(b)</B> SELLER: </P>
<P align="justify">
Address: <I>Av. Brigadeiro Faria Lima, n&ordm; 3.400, 20&ordm; andar<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CEP 04538-132 &#150; S&atilde;o Paulo &#150; SP </I><br>
Phone: (0xx11) 3749-1210 <br>
Fax: (0xx11) 3749-1284 <br>
<I>At.: Diretor de Minera&ccedil;&atilde;o</I> (Attention of Mining Director) <br>
<I>Cc.: Diretor Comercial de Min&eacute;rio de Ferro e Diretor Jur&iacute;dico</I> (Copied to Iron Ore Commercial Director and Legal Director) </P>
<P align="justify">
<B>(c)</B> BIG JUMP ENERGY PARTICIPA&Ccedil;&Otilde;ES S.A.: </P>
<P align="justify">
Address: <I>Rua da Consola&ccedil;&atilde;o, 247, 3rd Floor, Room 85A, S&atilde;o Paulo, Brazil </I></P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B><B> </B></P>

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Phone: (0xx11) 3170-8509 <br>
Fax: (0xx11) 3170-8549 <br>
At.: <I>Diretor Presidente (Attention of Director-President)</I> </P>
<P align="justify">
<B>(d)</B> BRAZIL JAPAN IRON ORE CORPORATION: </P>
<P align="justify">
Address: <I>5-1, Kita-Aoyama 2-chome, Minato-ku, Tokyo, 107-8077,
Japan<br>
</I> Phone: (81 3) 3497-3365 <br>
Fax: (81 3) 3497-3342<br>
At.: <I>Mr. Yasuhiro Miyata</I> </P>
<P align="justify">
<B>(e)</B> POSCO: </P>
<P align="justify">Address:  <I>892 Daechi 4-dong Kangnam-gu, Seoul, 135-777, Korea</I> <br>
Phone: (82 2) 3457-0306<br>
Fax: (82 2) 3457-1908  <br>
At.: <I>Mr. Myung Deuk Seo (Group Leader)</I> </P>
<P align="center">
<B>CLAUSE FOURTEEN &#150; ARBITRATION </B></P>
<P align="justify">
<B>14.1. </B>The Parties are to submit any dispute, controversy or disagreement resulting from this Contract or related to same solely and exclusively to arbitration in the manner provided by Law No. 9.307 of September 23, 1996 and by this Clause,
provided that such dispute, controversy or disagreement is not settled amicably by the Parties within a period of 30 (thirty) days counting from the date on which one of the Parties has notified the other regarding the existence of such dispute,
controversy or disagreement.  Arbitration shall be definitive and the results thereof binding on the Parties. </P>
<P align="justify">
<B>14.2.</B> The arbitration proceedings shall take place in the City of S&atilde;o Paulo, State of S&atilde;o Paulo, and shall be administered by the International Court of Arbitration of the International Chamber of Commerce
(&#147;<U>ICC</U>&#148;) and, except as provided in this Contract, shall be instituted and processed according to the Rules of Arbitration of the ICC (&#147;<U>Rules</U>&#148;). </P>
<P align="justify">
<B>14.3.</B> The arbitration panel shall be made up of 3 (three) arbitrators, with each one of the Parties being responsible for appointing 1 (one) arbitrator and these 2 (two) arbitrators appointed by the Parties responsible for jointly appointing
the third arbitrator, who shall preside over the arbitration panel. </P>
<P align="justify">
<B>14.4.</B> The charges, fees and other expenses directly related to the arbitration proceedings, which include the costs due to the ICC and the arbitrators&#146; fees and, as the case may be, any expert witnesses called, shall be initially borne
by both Parties in the same proportion, provided that the provisions contained in the Rules are complied with, though the arbitration award shall define the final allocation of such charges, fees and other expenses between the Parties. Each Party
shall cover the expenses of the respective attorneys and assistants that it engages to represent it or to assist it during the arbitration proceedings. </P>
<P align="justify">
<B>14.5.</B> Without prejudice to the other provisions contained in this Contract, the Parties hereby acknowledge and admit the possibility of appealing to the Judiciary to obtain any urgent court measures that may be considered necessary to
preserve their respective rights and interests and such measures are not to be interpreted as a waiver by the Parties of arbitration proceedings.  For such purposes and for any court enforcement of an arbitration award issued by the arbitration
panel, the Parties hereby choose the courts of the Judicial District of S&atilde;o Paulo, State of S&atilde;o Paulo, as having
sole jurisdiction, with express waiver of any other courts, regardless of however much jurisdictional privilege they might have. </P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B><B> </B></P>

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<P align="justify">In witness whereof, the Parties and the Intervening Parties have caused this Contract to be executed in five (5) counterparts with the same form and contents, before the two (2) undersigned witnesses. </P>
<P align="center">
S&atilde;o Paulo, SP, October 21<SUP>st</SUP>, 2008 </P>
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<DOCUMENT>
<TYPE>EX-10.7
<SEQUENCE>18
<FILENAME>exhibit107.htm
<DESCRIPTION>EXHIBIT 10.7
<TEXT>
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<P align="right"><a href="sidform20f2008a.htm#topexhibit">Table of Contents</a></P>
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<P align="center">
<B><U>PORT OPERATING SERVICE AGREEMENT</U></B><BR>
</P>
<P>
By means of this private legal instrument, on the one hand, in its capacity as service recipient, </P>
<P>
<B>NACIONAL MIN&Eacute;RIOS S/A</B>, a joint stock corporation organized and existing under Brazilian law, with its head office located in the City of Congonhas, State of Minas Gerais, Federal Republic of Brazil, at the address known as
&#147;<I>Logradouro Casa de Pedra</I>&#148;, s/n (unnumbered), Part, enrolled with the General Registry of Corporate Taxpayers of the Brazilian Ministry of Finance (&#147;CNPJ/MF&#148;) under No. 08.446.702/0001 -05 (and its successor, hereinafter
referred to as &#147;<U>NAMISA</U>&#148;), </P>
<P>
and, on the other hand, in its capacity as service provider, </P>
<P>
<B>COMPANHIA SIDER&Uacute;RGICA NACIONAL</B>, a joint stock corporation organized and existing under Brazilian law, with its head office located in the City of Rio de Janeiro, State of Rio de Janeiro, at Rua S&atilde;o Jos&eacute; No. 20, Suite
1602, Part, enrolled with the CNPJ/MF under No. 33.042.730/0001 -04 (hereinafter referred to as &#147;<U>CSN</U>&#148;), </P>
<P>
(NAMISA and CSN are individually identified as &#147;<U>Party</U>&#148; and jointly as &#147;<U>Parties</U>&#148;). </P>
As intervening parties:<BR>
<P>
<B>BIG JUMP ENERGY PARTICIPA&Ccedil;&Otilde;ES S.A</B>., a corporation organized and existing under Brazilian law, with its head offices located in the City of S&atilde;o Paulo, State of S&atilde;o Paulo, at Rua da Consola&ccedil;&atilde;o, 247,
3<SUP>rd</SUP> Floor, Room 85A, enrolled with the CNPJ/MF under No. 09.431.882/0001 -14, herein represented in accordance with its by-laws (and its successors, hereinafter referred to as the &#147;<U>Brazilian SPC</U>&#148;); </P>
<P>
<B>BRAZIL JAPAN IRON ORE CORPORATION</B>, a company duly organized and existing under the laws of Japan, with its head office located at 5-1, Kita-Aoyama 2-chome, Minato-ku, Tokyo 107-8077, Japan, herein represented in accordance with its by-laws
(hereinafter referred to as the &#147;<U>Japanese SPC</U>&#148;); </P>
<P>
<B>POSCO</B>, a company duly incorporated and validly existing under the laws of Korea, with head offices at 892 Daechi 4-dong Kangnam-gu, Seoul, 135-777, Korea, herein represented in accordance with its by-laws (&#147;<U>Posco</U>&#148;); </P>
<P>
(the Brazilian SPC, the Japanese SPC and Posco are collectively hereinafter referred to as the &#147;<U>Intervening Parties</U>&#148;); <br>
<br>
</P>
<P align="center">
<B>RECITALS</B><BR>
</P>
<B>WHEREAS:</B><BR>
<P>
<B>(A)</B> among its other activities, CSN has exclusive rights to manage and operate the port installations that are part of the terminal for coal and other solid bulk cargoes, located in the Port of Itagua&iacute;, in the City of Itagua&iacute;,
State of Rio de Janeiro (hereinafter referred to as the &#147;<U>Terminal</U>&#148; or &#147;<U>TECAR</U>&#148;), pursuant to the Lease Agreement nr. C-DEP JUR 054/97 (bound to the Public Bid Offer No. CI-003/96) (the &#147;<U>Lease
Agreement</U>&#148;); </P>
<P>
<B>(B)</B> NAMISA produces and sells iron ore, with most of its products being shipped to the international market;</P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B></P>

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<B>(C)</B> NAMISA is interested in contracting port operating services provided by CSN at the Terminal and CSN is interested in performing such services for NAMISA; </P>
<P>
<B>(D)</B> the Parties simultaneously execute (i) a Low Silica ROM Iron Ore Supply Contract; (ii) an Iron Ore Supply Contract and Other Covenants (Tailing Dam Rejects); (iii) a High Silica ROM Iron Ore Supply Contract; and (iv) a Support
Agreement<U> </U>(solely in relation to Clause 2 thereof), (all such agreements, including this Port Operating Service Agreement, but excluding the Iron Ore Supply Contract and Other Covenants (Tailing Dam Rejects), the &#147;<U>Related
Contracts</U>&#148;); and </P>
<P>
<B>(E)</B> the performance of each Related Contract will be considered part of the performance of a more comprehensive transaction between the Parties, which encompasses the supply of iron ore, railway transport of iron ore, port operating services
and other transactions, as reflected in such Related Contracts and other arrangements and documents executed between the Parties. </P>
<P>
The Parties hereby resolve to execute this Port Operating Services Agreement (the &#147;<U>Agreement</U>&#148;), which shall be governed by the following clauses and conditions: </P>
<P align="center">
<B>CLAUSE ONE &#150; SCOPE</B><BR>
</P>
<P>
<B>1.1.</B> The scope of this Agreement is the performance by CSN of port operating services for NAMISA at the Terminal, consisting of receiving, handling, storing and shipping iron ore owned by NAMISA (hereinafter referred to as the &#147;<U>Iron
Ore</U>&#148;) with such services consisting of all operations from unloading of the Iron Ore from railroad cars in the convoys provided by NAMISA for transportation of the Iron Ore to the Terminal up to the effective shipment of the Iron Ore in the
vessels named by NAMISA and accepted by CSN (hereinafter referred to as the &#147;<U>Services</U>&#148;), with due regard to the remaining terms and conditions set out in this Agreement. </P>
<P>
<B>1.1.1 </B>The Parties<B> </B>agree that vessels to be used by NAMISA shall be [&#149;]<SUP>1</SUP> and [&#149;] vessels with capacity for hauling between [&#149;] and [&#149;] metric tons, provided that the Parties may agree, upon NAMISA&#146;s
request, upon the use of (i) [&#149;] vessels or other vessels with capacities lower than [&#149;] vessels, depending on the availability of operational capacity of the Terminal or (ii) vessels larger than [&#149;] vessels, in case the Terminal is
expanded and becomes able to operate with such larger vessels. CSN shall not withhold any such authorizations if the Terminal capacity is not jeopardized by the use of vessels smaller than [&#149;] vessels or the Terminal is able to operate vessels
larger than [&#149;] vessels. </P>
<P align="center">
<B>CLAUSE TWO &#150; TERM FOR PERFORMANCE OF THE SERVICES</B></P>
<P>
<B>2.1. </B><B><I>Term for Performance of the Services.</I></B> The Services shall be performed for a period of [&#149;] Mining Years, beginning on the signing date of this Agreement. For the purposes of this Agreement, &#147;<U>Mining
Year</U>&#148; shall mean the period of 12 (twelve) months beginning on April 1<SUP>st</SUP> of a calendar year and ending on March 31<SUP>st</SUP> of the subsequent calendar year. </P>
<P>
<B>2.1.1. </B><B><I>Extension.</I></B> In case there are any Carry-Over Services, as defined below, to be performed after the end of the [&#149;] Mining Year, this Agreement shall be automatically extended for as much</P>
<P>_________________________________</P>
<P>
<SUP>1</SUP> Text marked as [&#149;] denotes CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.
time as necessary for the provision of such outstanding Carry-Over Services, subject to all terms and conditions hereof, provided that such automatic renewal shall be subject to the expiration of the Lease Agreement in [&#149;]. </P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B>2/39</P>

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<B>CLAUSE THREE &#150; SPECIFIC OBLIGATIONS OF CSN </B></P>
<P align="left">
<B>3.1.</B> Without prejudice to the other obligations attributed to CSN under this Agreement, CSN undertakes to: </P>
<P align="left">
<B>(a) </B>guarantee a maximum length of time of [&#149;] hours as the layover time at the Terminal for its railroad convoys consisting of up to [&#149;] freight cars when such cars are unloaded by force of gravity;</P>
<P align="left">
<B>(b) </B>guarantee a maximum length of time of [&#149;] hours and [&#149;] minutes as the layover time at the Terminal for its railroad convoys consisting of up to [&#149;] freight cars, when such cars are unload by means of car dumpers;<B> </B></P>
<P align="left">
<B>(c)</B> accept the vessels named by NAMISA (chartered by NAMISA or by the NAMISA&#146;s customers), provided that they are strictly and fully in conformity (i) with the norms, procedures and regulations established by the applicable port,
maritime and customs authorities and (ii) with the technical and operational conditions of the Terminal contained in <U>Attachment I</U> hereto, without prejudice to the other provisions set out herein; </P>
<P align="left">
<B>(d)</B> when requested, make available to NAMISA information regarding the technical and operational conditions of the Terminal, including but not limited to (i) applicable norms, procedures and regulations, (ii) technical and operational
conditions of the Terminal (which are contained in <U>Attachment I</U> hereto) and (iii) all technical restrictions relating to the pier, the vessels and maneuverability in access channels, anchoring areas and maneuvering basins; </P>
<P align="left">
<B>(e)</B> make available to<B> </B>NAMISA the list of vessels that cannot be accepted at the Terminal, in view of the Terminal&#146;s technical and operational conditions, which list shall not be exhaustive and may be periodically updated by CSN,
except, however, that in exceptional circumstances and provided that a prior request is submitted by NAMISA to CSN, CSN may, at its exclusive discretion and in writing, accept vessels included on the said list at Terminal, though, to such end it
shall impose the operational conditions that it deems appropriate by force of the criteria it adopts to manage and operate the Terminal; </P>
<P align="left">
<B>(f)</B> guarantee, in relation to the vessels named by NAMISA and accepted by CSN, the fulfillment of a loading plank of [&#149;] metric tons per day and a turn time (time granted for vessel maneuvers that begins immediately after acceptance of
the Notice of Readiness - NOR) of [&#149;]: </P>
<P align="left">
<B>(i)</B> the Parties acknowledge that the time spent or related to events of any kind attributable (A) to the intrinsic characteristics of the Iron Ore, (B) to special care required with respect to the Iron Ore not declared by NAMISA to CSN at
least [&#149;] hours prior to shipment, (C) to any hidden and particular defect of the Iron Ore, (D) to special characteristics of the vessel named by NAMISA, including with respect to the capacity of its ballast pumps, (E) to the absence of the
Iron Ore, hence preventing or hindering its shipment, (F) to operations on board (pumping out ballast, opening and closing of hold hatches, calculation for revision of cargo plans), and (G) to adverse natural conditions at the Terminal, such as
those related to climate, temperature, tides, ocean currents, winds, etc. that, in the judgment of CSN, NAMISA, the vessel&#146;s masters and other parties involved, make port operations impossible and/or place port operations at risk, shall be
disregarded for purposes of compliance with the loading rate, per vessel, set out above; and </P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B>3/39</P>

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<P align="left"><B>(ii)</B> the conditions of shipment agreed to between NAMISA and the vessel it has named are to be submitted beforehand to CSN for its approval when of the scheduling of the port operation, as described in Clause 4.1 below; </P>
<P align="left">
<B>(iii) </B>CSN shall pay to NAMISA demurrage for all time lost in excess of allowed laytime at the Terminal, at the following rate, per day (24 hours) or pro rata for part of a day: </P>
<P align="left">
<B>1.</B><B> </B>for the first [&#149;] WMT of Iron Ore, the demurrage rate shall be US&#36; [&#149;] per WMT; </P>
<P align="left">
<B>2.</B><B> </B>for the quantity between [&#149;] to [&#149;]WMT of Iron Ore, the demurrage rate shall be US&#36; [&#149;] per WMT; and </P>
<P align="left">
<B>3.</B><B> </B>for the quantity above [&#149;] WMT of Iron Ore, the demurrage rate shall be US&#36; [&#149;] per WMT; </P>
<P align="left">
<B>(iv) </B>the settlement of dispatch or demurrage claims between CSN and NAMISA shall be made within 30 (thirty) days from the date of receipt of documented claim for either Party as the case may be;</P>
<P align="left">
<B>(g)</B> adopt such procedures as are required to ensure that port operations are safe and adequate, and satisfy the requirements of regularity, continuity, efficiency, being up to date, courtesy and modesty prescribed in the Lease Agreement; </P>
<P align="left">
<B>(h)</B> in relation to vessels named by NAMISA and accepted by CSN, carry out the master plans submitted by the vessel&#146;s captain, provided that such plans are in full harmony with CSN&#146;s operating procedures; </P>
<P align="left">
<B>(i)</B> in relation to vessels named by NAMISA and accepted by CSN, provide a mooring berth, equipments, materials and manpower - specialized or non-specialized - in order to perform the Services; </P>
<P align="left">
<B>(j)</B> prepare documents that are under CSN&#146;s responsibility as appropriate for shipment of cargo, such as the Statement of Facts, Cargo Receipt and such other documents as are required in accordance with the iron ore sale contracts between
NAMISA and its customers; </P>
<P align="left">
<B>(k)</B> make an area available &#150; sufficiently in advance according to the schedule approved by CSN &#150; that is sufficient and appropriate for receiving the batches of Iron Ore to be shipped, according to the schedule for the railroad
convoys agreed to beforehand among NAMISA, CSN and the railroad concessionaire; </P>
<P align="left">
<B>(l)</B> permit access for NAMISA&#146;s representatives, according to CSN&#146;s service and security norms and determinations of the port and customs authorities, to inspect the following Terminal facilities: (i) storage yard, (ii) sampling
tower and (iii) laboratory; </P>
<P align="left">
<B>(m)</B> allow access aboard of the vessels named by NAMISA and accepted by CSN, according to the CSN service and safety rules and the determinations of the port and customs authorities, to NAMISA&#146;s representatives and/or the third party
contracted by NAMISA for accompanying of measurement of cargo capacity; </P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B>4/39</P>

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<P>
<B>(n)</B> carry out the initial and final measurement of cargo capacity of the vessels named by NAMISA and accepted by CSN, allowing such measurement work to be accompanied by NAMISA or NAMISA&#146;s representatives, with due regard to the provisions contained in item (m) above; </P>
<P>
<B>(o)</B> take representative samples of the Iron Ore shipped in the vessels named by NAMISA and accepted by CSN, and conduct all analyses, including chemical, grain size and humidity tests of such samples in accordance with <U>Attachment II</U>
hereto. The results of such analyses are to be made available to NAMISA by CSN within a period of no more than 5 (five) working days from the date of issue of the respective Bill of Lading or Sea Waybill; </P>
<P>
<B>(p)</B> comply with all obligations of labor, social, tax and/or Social Security nature with respect to its employees and other professional involved in the performance of the Services, paying over all applicable taxes, contributions and Social
Security contributions, and assuming responsibilities derived therefrom; </P>
<P>
<B>(q)</B> reimburse NAMISA for any and all amount that NAMISA may have to spend as a result of CSN&#146;s obligations deriving from the working relationship between CSN and its employees, shareholders, executive officers, representatives or other
professionals connected to the performance of the Services; </P>
<P>
<B>(r)</B> fully comply with the norms and regulations and working instructions concerning On-the-Job Safety and Health Care; </P>
<P>
<B>(s)</B> insofar as possible, facilitate the work of parties inspecting and accompanying the Services and, whenever this is reasonably requested by NAMISA, provide NAMISA with copies of documents that are directly related to performance of the
Services; </P>
<P>
<B>(t) </B>obtain and keep up to date all licenses required for full performance of this Agreement and the Services; and </P>
<P>
<B>(u)</B> assign an area of the Terminal measuring approximately [&#149;] to NAMISA under a free lease (<I>comodato</I>) agreement to be executed on the date hereof by the Parties, for the effective period of this Agreement, which area shall be
used by NAMISA to perform its administrative activities related to the port shipment of the Iron Ore. </P>
<P align="center">
<B>CLAUSE FOUR &#150; SPECIFIC OBLIGATIONS OF NAMISA </B></P>
<P>
<B>4.1.</B> Without prejudice to the other obligations attributed to NAMISA under this Agreement, NAMISA undertakes to: </P>
<P>
<B>(a)</B> submit to CSN in writing as soon as possible in the previous Mining Year but by no later than [&#149;]of the previous Mining Year for each Mining Year subsequent to Mining Year of 2008 (as the schedule for the shipments to be made in
Mining Year of 2008 has already been agreed to by the Parties), a preliminary version of its shipment schedule for such Mining Year, indicating (A) the monthly quantities of each type of Iron Ore to be shipped, and (B) the quantities of each
shipment of Iron Ore to be carried out, with due regard to Clause 7.1 below, provided that: </P>
<P>
<B>(i)</B> CSN shall issue its opinion on the preliminary version of the schedule submitted by NAMISA within a period of no more than [&#149;] days counting from the date of its receipt; </P>
<P>
<B>(ii)</B> should CSN not approve the preliminary version of the schedule submitted to it, for any
reason, it shall, at the same time, submit appropriate suggestions to NAMISA to make such schedule eligible for approval; and </P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B>5/39</P>

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<P align="left"><B>(iii)</B> if NAMISA does not agree with such suggestions, the Parties shall establish in good faith an alternative schedule mutually satisfactory within a period of no more than [&#149;] days prior to the beginning of each Mining Year. Such
alternative schedule shall then be approved in writing by CSN; </P>
<P align="left">
<B>(b)</B> submit to CSN in writing, as soon as possible but by no later than [&#149;] days prior to the beginning of each Quarter of a Mining Year, a new version of its schedule of shipments for such Quarter, prepared with basis on the preliminary
version mentioned in item (a) above, indicating (i) the type of Iron Ore and the quantities of each shipment to be carried out in such Quarter, with due regard to Clause 7.1 below, and (ii) the lay days scheduled for each shipment. This schedule
shall be approved in advance by CSN. To such end, CSN will have a period of [&#149;] days counting from the date on which it receives such schedule to approve or reject it in writing, provided that: </P>
<P align="left">
<B>(i)</B> in case, for any reason, CSN does not approve the preliminary version of the schedule submitted to it, it shall, at the same time, submit appropriate suggestions to NAMISA to make such schedule eligible for approval; and </P>
<P align="left">
<B>(ii)</B> in case NAMISA does not agree with such suggestions, the Parties shall establish in good faith an alternative schedule mutually satisfactory within a period of no more than [&#149;] days antes prior to the beginning of each Quarter. Such
alternative schedule shall then be approved in writing by CSN;</P>
<P align="left">
<B>(c)</B> faithfully observe, in chartering vessels on its own account or on behalf of its customers: (i) all applicable norms, procedures and regulations, including international ones, (ii) the operational conditions of the Terminal contained in
Attachment I, with all the technical information and restrictions relating to the Terminal, vessels and maneuverability in access channels, anchoring areas and maneuvering basins, including but not limited to (A) berth operational characteristics,
and (B) vessel restrictions; </P>
<P align="left">
<B>(d)</B> ensure that vessels chartered on its own account, as well as on behalf of its customers (i) are covered by Protection and Indemnity (P&amp;I) insurance taken out from a P&amp;I Group that is a member of the International Group of P&amp;I
Clubs, (ii) comply with the International Safety Management (ISM) Code and the International Ship and Port Security (ISPS) Code, (iii) carry on board copies of the Safety Management Certificate (SMC) or the Document of ISM Compliance (DOC) and the
International Ship's Security Certificate (ISSO), and (iv) have the required navigability and are appropriate for hauling the Iron Ore, in conformity with the Statement of Compliance (Part B) of <U>Attachment I</U> and on the Rightship. </P>
<P align="left">
<B>(e)</B> provide the following data to the CSN Management of Scheduling and Port Operations at the Terminal, either via fax or e-mail message sent at least [&#149;] days prior to the date of each lay day, in order for CSN to accept the relevant
vessel: </P>
<P align="left">
<B>(i)</B> the name, year of construction and dimensions of the vessel and the estimated quantity and type of the Iron Ore to be shipped in it. CSN shall have [&#149;] working day counting from the date it receives such information to grant written
approval or rejection of the vessel named by NAMISA, with due regard to the schedule established in item (b) above. Vessels that are [&#149;] years old or older shall not be accepted by CSN, provided that: </P>
<P align="left">
<B>(A)</B> in the event any vessel accepted by CSN arrives at the Terminal outside of the
respective lay days, such vessel shall be subject to new acceptance by CSN. In the event CSN decides to accept such vessel, such acceptance shall be considered as having been given at the commencement of loading; and </P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B>6/39</P>

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<P align="left"><B>(B)</B> NAMISA may replace any vessel named by it and accepted by CSN with another similar vessel, with the same lay days of the replaced vessel, provided that it informs the CSN Management of Scheduling and Port Operations at the Terminal at
least 10 (ten) days prior to the date of commencement of the respective lay days, and observes &#150; in relation to the replaced vessel &#150; the provisions of this Agreement for acceptance of vessels at the Terminal; </P>
<P align="left">
<B>(ii)</B> the total length of the vessel, the size of the entries of the holds, the dimensions/number of cargo compartments and the name of the agent responsible for the cargo and the vessel owner&#146;s representative; </P>
<P align="left">
<B>(iii)</B> the lay days, the interval of which may not exceed [&#149;] days; and </P>
<P align="left">
<B>(iv)</B> the classification of the vessel by a classification society recognized by the IACS (International Association of Classification Societies), which classification should be at least highest Lloyds (+ 100 A1), and the certification of the
ship and of the cargo pursuant to the regulations of the IMO (International Maritime Organization); </P>
<P align="left">
<B>(f)</B> inform the CSN Management of Scheduling and Port Operations, either via fax or e-mail message, of the estimated times of arrival (ETA) at the Terminal [&#149;] prior to effective arrival of the vessel, or, by request of CSN at any time,
notifying CSN immediately and formally, with respect to any change in such estimated times; </P>
<P align="left">
<B>(g)</B> inform the CSN Management of Scheduling and Port Operations, either via fax or e-mail message, of the Master Plan for loading the Iron Ore for each vessel charged by NAMISA or by its customers and accepted by CSN, with advance notice of
at least [&#149;] days prior to the arrival of such vessel at the Terminal, including but not limited to: </P>
<P align="left">
<B>(i)</B> the arrival draft and the air draft upon mooring; </P>
<P align="left">
<B>(ii)</B> the quantity of ballast upon arrival and, if such is the case, how such ballast is distributed; </P>
<P align="left">
<B>(iii)</B> the estimated time for pumping out ballast after mooring; </P>
<P align="left">
<B>(iv)</B> the loading sequence; and </P>
<P align="left">
<B>(v)</B> information regarding the need for issuance of a gas free certificate or declaration; </P>
<P align="left">
<B>(h) </B> NAMISA shall pay to CSN dispatch for the working time saved at the Terminal against the allowed laytime, provided that the rate of dispatch shall be half of the rate of demurrage, as specified in Clause 3.1 (f) (iii). </P>
<P align="left">
<B>(i)</B> ensure that the compartments of the vessels named by NAMISA are clean, empty and capable of being loaded with the Iron Ore; </P>
<P align="left">
<B>(j)</B> preferably ship just one type of Iron Ore in each vessel, such that the loading of more than one type of Iron Ore in a single shipment should be authorized by CSN, provided that CSN shall not withhold any such authorization if the
Terminal capacity is not jeopardized by the loading of more than one type of Iron Ore in a single shipment. </P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B>7/39</P>

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<P align="left">
<B>(k)</B> ensure that the captains and other persons responsible for the vessels named by NAMISA comply with all environmental laws and other rules in effect, including with respect to cleanliness of cargo compartments; NAMISA thus assumes
liability vis-&agrave;-vis CSN for any losses CSN suffers in the event this provision is not fully complied with; </P>
<P align="left">
<B>(l)</B> submit to CSN the technical and operational conditions on which the vessel is being chartered (either by NAMISA or by its customer), including (i) conditions for shipment operations, and (ii) data relating to cancelling date; </P>
<P align="left">
<B>(m)</B> assume sole and exclusive liability, with respect to CSN, vessel owners and/or third parties involved in the operations, for legal acts and business transactions resulting from chartering of vessels named by NAMISA and to be carried out
at the Terminal; </P>
<P align="left">
<B>(n)</B> submit to CSN, at least [&#149;] days prior to the date of the first unloading at the Terminal, the schedule for arrival at the Terminal of the railroad convoys containing the Iron Ore to be shipped in each vessel, which schedule is to be
approved in advance by CSN. To such end, CSN shall have [&#149;] working days counting from the date it receives such schedule to approve or reject it, provided that: </P>
<P align="left">
<B>(i)</B> if for any reason CSN does not approve the preliminary version of the schedule submitted to it, at the same time CSN shall submit appropriate suggestions to NAMISA to make such schedule eligible for approval; </P>
<P align="left">
<B>(ii)</B> if NAMISA does not agree with such suggestions, the Parties shall establish in good faith an alternative schedule that is mutually satisfactory within a period of no more than [&#149;] days counting from the date that NAMISA expresses
its disagreement with CSN&#146;s suggestions.  Such alternative schedule shall then be approved in writing by CSN; and </P>
<P align="left">
<B>(iii)</B> under no circumstances whatsoever may NAMISA send railroad convoys for unloading the Iron Ore at the Terminal unless the provisions contained in this item have been complied with; </P>
<P align="left">
<B>(o)</B> turn over the respective railroad waybills to CSN upon the arrival of the Iron Ore at the Terminal; </P>
<P align="left">
<B>(p)</B> make every effort to ensure that the full amount of the Iron Ore to be shipped in the vessels named by NAMISA and accepted by CSN are ready and available at the Terminal at least 1 (one) day prior to the beginning of the scheduled
shipment. In the event the provision above is not complied with by NAMISA, NAMISA shall complete the quantity of Iron Ore scheduled to be shipped on such vessel with the Iron Ore to be sent by NAMISA in railroad convoys during the effective period
for loading of such vessel; and </P>
<P align="left">
<B>(q)</B> obtain and submit to CSN at least [&#149;] hours in advance all authorizations required by the appropriate agencies of the Federal, State or Municipal Public Administration, including but not limited to port, maritime and customs
authorities.  On all operations covered by this Agreement NAMISA shall be responsible with respect to the appropriate bureau of the Brazilian Federal Revenue Service (RFB) for the Term of Shipment and customs clearance of the Iron Ore, including
with respect to payment of any taxes or tariffs that are levied or may be levied on the Iron Ore and the respective port operation. Failure to meet the above terms and conditions shall entail non-mooring of the vessel. In exceptional cases, when
mooring of the vessel relating to each port operation has been permitted already, failure to obtain required authorizations and submission thereof to CSN may entail immediate release of the vessel from
its moorings, in which case NAMISA shall be liable for all the consequence resulting from such a situation, including but not limited to costs relating to operating losses incurred by CSN and inactive occupation of the berth. </P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B>8/39</P>

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<P align="center"><B>CLAUSE FIVE &#150; RESPONSIBILITES IN RELATION TO THE IRON ORE </B></P>
<P align="left">
<B>5.1.</B> CSN shall be liable for losses, damages (excluding indirect and consequential damages), contamination and/or discrepancies (in terms of quantity or quality) related to the Iron Ore at the Terminal if (a) CSN&#146;s responsibility is
proven with respect to such losses, damages, contamination and/or discrepancies and (b) CSN has been notified by NAMISA in this regard as promptly as possible, but no later than within [&#149;] hours from the date such loss, damage, contamination
and/or discrepancy is detected by NAMISA. <B> </B></P>
<P align="left">
<B>5.1.1.</B> For the purposes set out in Clause 5.1 above, NAMISA undertakes to maintain at the Terminal at its expenses, the person or persons responsible for accompanying all port operations involving the Iron Ore during performance of the
Services. </P>
<P align="left">
<B>5.1.2.</B> CSN shall not be held liable for losses, damages, contamination and/or discrepancies (in quantity or quality) in relation to the Iron Ore (a) that occur or are verified after conclusion of the shipment of such Iron Ore in the vessel
named by NAMISA and accepted by CSN, or (ii) that have not been communicated by NAMISA to CSN, as set forth in Clause 5.1 above. </P>
<P align="left">
<B>5.1.3.</B> In any case, the Parties shall discuss and agree in good faith the proper measures to remediate such losses, damages, contamination and/or discrepancies. </P>
<P align="left">
<B>5.2.</B> In the event any loss, damage or deterioration in the facilities of the Terminal and/or the equipment belonging to CSN occurs during performance of the Services as a result of the quality of the Iron Ore, such as the presence of foreign
bodies or objects, excessive dampness, petrifying and other such situations (except if such loss, damage or deterioration is attributable in whole or in part to CSN), CSN shall calculate the losses and damages incurred and submit a report to NAMISA
in this regard. NAMISA shall have a period of up to [&#149;] working days to challenge in writing the report submitted by CSN, under penalty of the information contained in such report being considered uncontested and NAMISA shall indemnify CSN for
such losses and damages, limited to the amount required for the repair (if possible) or replacement of the facilities of the Terminal and/or the equipment belonging to CSN damaged, destroyed or deteriorated, with the exclusion of any other losses
and damages. On the other hand, if NAMISA contests the report submitted by CSN, the Parties shall negotiate in good faith, in order to find a mutually satisfactory solution to the problem, within a period of no more than [&#149;] working days
counting from the date such rebuttal is received by CSN. All the losses and damages to be reimbursed to CSN in the manner provided in this item are to be paid within a period of no more than [&#149;] days counting from the date on which CSN issues
the corresponding collection document. </P>
<P align="center">
<B>CLAUSE SIX </B>&#150;<B> GENERAL CONDITIONS FOR OPERATION OF THE TERMINAL </B></P>
<P align="left">
<B>6.1.</B> NAMISA shall adhere to the following general terms and conditions for operation of the Terminal, which shall be applicable to all shipments of Iron Ore under this Agreement: </P>
<P align="left">
<B>(a)</B> Notice of Readiness (&#147;<U>NOR</U>&#148;). A NOR may be issued at any time after the vessel arrival at the Terminal, regardless of the time or day (including issue of a NOR on Saturdays, Sundays and Legal holidays), provided that the
vessel in question is within the agreed-upon lay days on a free pratique basis, released by the port authorities and fully eligible to receive the Iron Ore. </P>
<P align="left">
Otherwise, a NOR shall not be issued or, if already issued, it shall be cancelled. </P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL </B>9/39</P>

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<B>(b)</B> Lay Time. The lay time shall begin 12 (twelve) hours after issuance and acceptance of the NOR, whether or not the vessel is moored, or upon commencement of loading, whichever occurs first. Once the lay time begins, it shall not be
reversible and shall end immediately after termination of the loading. The vessel shall set out as soon as the loading ends and subsequent formalities are concluded. NAMISA shall assure that the vessel or its agents contract skippers and tugboats to
permit prompt mooring and unmooring of the vessel. </P>
<P align="left">
<B>(i)</B> The lay time shall be calculated based on the guaranteed loading rate defined in Clause 3.1 (f) above and on the weight indicated on the Bill of Lading or Sea Waybill. The weight of the Iron Ore shipped on the vessels shall be determined through measurement of the vessel&#146;s capacity according to applicable international practices. Such weight shall be the basis for issuance of the respective Bill of Lading or
Sea Waybill; </P>
<P align="left">
<B>(ii)</B> The time elapsed until the vessel&#146;s captain instructs CSN regarding the best arrangement/distribution of the Iron Ore in the cargo compartments of the vessel (trimming) shall not be computed as lay time; </P>
<P align="left">
<B>(iii)</B> In the event loading has to be interrupted due to insufficient capacity of the pumps used to pump out ballast in relation to the rate for loading the Iron Ore on the vessel, any time lost during loading shall not be computed as lay
time, even if the vessel is already on demurrage<I>; </I></P>
<P align="left">
<B>(iv)</B> time spent in maneuvering the vessel after mooring, provided that such maneuvering is attributed to NAMISA, the vessel itself or the vessel owner, case in which any costs for such maneuvering shall be covered by NAMISA, shall not be
computed as lay time<I>.</I> However, the time spent in maneuvers attributable to CSN or the Terminal shall be computed as lay time, with CSN covering the costs thereof, if any; </P>
<P align="left">
<B>(v)</B> time spent on opening and closing the hold hatches, ballasting or pumping out ballast and/or any activity related to the vessel shall not be computed as lay time; </P>
<P align="left">
<B>(vi)</B> time spent on final measurement of the vessel&#146;s capacity or any intermediary measurement required by the vessel&#146;s captain shall not be computed as lay time; </P>
<P align="left">
<B>(vii)</B> time lost in case loading has to be interrupted due to Acts of God or Force Majeure, irrespective of whether the vessel is being loaded or is waiting in the anchorage area, shall not be computed as lay time. Any delay attributed to such
events of Force Majeure or Acts of God shall be notified by CSN in writing to the master of the vessel or its agent and shall be stated in the Statement of Facts duly signed by the master of the vessel or his agent and CSN&#146;s representative. If
such events of Force Majeure or Acts of God should occur after commencement of the loading and CSN believes that such events and/or their effects may last for some time, CSN and NAMISA shall establish a mutually satisfactory plan of action; </P>
<P align="left">
<B>(viii)</B> The normal operating hours of the Terminal shall be from 0:00 (zero hours &#150; i.e. midnight) to 24:00 (twenty-four hours &#150; i.e. midnight), including Saturdays, Sundays and Legal holidays.  Any overtime hours incurred by the
crew and officers of the vessels shall not be the responsibility of CSN;<I> </I></P>
<P align="justify">
<B>(ix)</B> A gas free certificate or declaration signed by the vessel&#146;s captain shall be submitted to CSN prior to commencement of loading. If such certificate or declaration is not presented, a gas free certificate or declaration prepared by
a licensed inspector will be
required and shall be submitted to CSN. In this case, the time spent in issuing such certificate or declaration shall not be computed as lay time, even if the vessel is already on demurrage; and </P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B>10/39</P>

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<P align="left"><B>(x)</B> Vessels shall be loaded at the Terminal according to their order of arrival, determined based on the date of issuance of the NOR, in the manner provided by this Agreement. </P>
<P align="left">
<B>6.2. </B><B><I>Communication between NAMISA and CSN. </I></B>The Parties undertake to keep close and frequent communication throughout the term of this Agreement aiming at the achievement of the performance of their obligations hereunder, as
follows: </P>
<P align="left">
(i) <B><I>Monthly Meetings</I></B><I>.</I> Each Party shall indicate by written notice to the other Party, no later than 30 (thirty) days of the date of signature of this Agreement, a committee of three or four officers and/or employees in charge of
representing that Party in the management of the day-to-day operations under this Agreement (the &#147;Representation Committee&#148;). The Representation Committee of each Party shall convene on a monthly basis, on a date to be agreed upon by the
Parties through mutual discussion in good faith to discuss and define any issues related to the operations under this Agreement and the Parties&#146; performance of their obligations hereunder, such as: </P>
<P align="left">
- - Planning and operations for the next month; <br>
- - Review of the actual performance of the Parties&#146; obligations for the immediately preceding month; <br>
- - Reconciliation of Actual vs Budget for the operation of the month; and <br>
- - Discuss and agree in good faith any counter-measures (but in any
event without prejudice to any provision in this Agreement) that shall be taken by each Party, as applicable, for any non-conformity or nonperformance of the Parties&#146; obligations under this Agreement. </P>
<P align="left">
(ii) <B><I>Yearly Meetings</I></B>. The Representation Committee of each Party shall annually convene on a date to be mutually agreed by the Parties in each Mining Year to discuss the operations and performance of the Parties&#146; obligations under
this Agreement for the preceding Mining Year, as well as issues such as: <br>
<br>
- - Planning for the next Mining Year;<br>
- - Review of the actual performance of the Parties&#146; obligations for the previous Mining Year; <br>
- - Reconciliation of Actual vs Budget for
the operation of the Mining Year; and <br>
- - Discuss and agree in good faith any counter-measures (but in any event without prejudice to any provision in this Agreement) that shall be taken by each Party, as applicable, for any non-conformity or
nonperformance of the Parties&#146; obligations under this Agreement. </P>
<P align="left">
(iii) <B><I>Third Parties&#146; Attendance</I></B>. The Intervening Parties may appoint representatives being entitled<B> </B>to attend the Yearly and Monthly Meetings provided in this Clause at their sole discretion. </P>
<P align="left">
(iv)<B><I> Day-to-day Communication</I></B>. Further to the above, the Parties shall keep, through any of the members of the Representation Committee, close daily communication in connection with the operations of this Agreement.</P>
<P align="left">
<B>6.3.</B><B> </B><B><I>Access to CSN&#146;s Daily Operations under this Agreement</I></B><I>. </I>In addition to Clause 6.2 above, NAMISA and the Brazilian SPC will be entitled to access and supervise CSN&#146;s daily operations under this
Agreement, through a representative indicated by NAMISA, including but not limited to
performance control procedures, such as weighing, sampling and analysis, among others, and CSN will endeavor its best efforts to provide such clarification or information requests which may be submitted by NAMISA as a result thereof. </P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B>11/39</P>

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<P align="center"><B>CLAUSE SEVEN &#150; QUANTITIES </B></P>
<P>
<B>7.1.</B> <B><I>Contractual Quantity and Basic Annual Quantities.</I></B> Subject to Clause 7.3 below, CSN undertakes to perform the Services in each Mining Year, in relation to the quantity of Iron Ore indicated in the respective column of
<U>Attachment III</U> (with such quantity of Iron Ore being hereinafter referred to as the &#147;<U>Basic Annual Quantity</U>&#148; and the sum of the Basic Annual Quantities as the &#147;<U>Contractual Quantity</U>&#148;), it being hereby agreed
that each one of the shipments to be made during the performance of the Services shall be of at least [&#149;] metric tons on a wet basis, except as provided in Clause 1.1.1 above. </P>
<P>
<B>7.1.1.</B> Notwithstanding Clause 7.1 above, NAMISA may require, at NAMISA&#146;s sole discretion, in each Mining Year, the performance of Services in relation to a quantity of Iron Ore that is lower than the Basic Annual Quantity set forth for
the Mining Year in question. Services in relation to a quantity of Iron Ore higher than the Basic Annual Quantity set for the Mining Year in question may be requested by NAMISA, but is subject to CSN's approval, which shall depend, among others, on
availability of Terminal capacity. The requirement by NAMISA of Services below the Basic Annual shall not be considered as a NAMISA&#146;s Default (as defined in Clause 14.2 below). </P>
<P>
<B>7.1.2</B> <B><I>Quantities not Shipped</I></B>. Whenever in a determined Mining Year NAMISA does not require the performance of the Services (including for reasons attributable to NAMISA itself), in relation to the Basic Annual Quantity scheduled
for such Mining Year, NAMISA will have the right to carry-over the difference between the Basic Annual Quantity and the actual quantity of Services performed by CSN in such Mining Year (the &#147;<U>Carry-Over Services</U>&#148;), for the subsequent
Mining Years, being entitled to recover such Carry-Over Services limited to [&#149;] wet metric tons of Iron Ore per Mining Year and to the term of this Agreement. For the avoidance of doubt, the requirement by NAMISA of Services in relation to any
amount of Iron Ore below the Basic Annual Quantity shall not be considered as a NAMISA&#146;s Default (as defined in Clause 14 below). </P>
<P>
<B>7.2.</B> <B><I>Monthly Quantity.</I></B> CSN undertakes to perform the Services in each month of a Mining Year in relation to the quantity of Iron Ore indicated in the respective column of <U>Attachment III</U> hereto (with such quantity of Iron
Ore being hereinafter referred to as the &#147;Monthly Quantity&#148;). For the avoidance of doubt, the requirement by NAMISA of Services in relation to any amount of Iron Ore below the Monthly Quantity shall not be considered as a NAMISA&#146;s
Default (as defined in Clause 14 below). </P>
<P>
<B>7.3.</B> <B><I>Quantities Exceeding Threshold.</I></B> If, for any reason whatsoever, NAMISA requires the performance of Services in relation to more than the Monthly Quantity or Basic Annual Quantity, during, respectively, each month of the term
of this Agreement or each Mining Year, CSN and NAMISA shall discuss, in good faith, such additional Services requirement. </P>
<P>
<B>7.4. </B><B><I>Chain of Contracts</I></B><B>. </B>The Parties acknowledge and agree that this Agreement jointly with the other Related Contracts form a chain of contracts, so that the performance of the obligations arising out of this Agreement
may (i) depend on the due performance of the obligations of the Parties under the other Related Contracts and/or (ii) may affect the performance of the obligations of the Parties under the other Related Contracts.</P>
<P>
<B>7.4.1</B>. In case the performance of any obligations under this Agreement is prevented or becomes unfeasible or uneconomical due to the non-performance of the obligations and liabilities of
either Party under any other Related Contracts (the &#147;Affected Contracts&#148;), the Parties shall be subject to the following provisions:</P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B>12/39</P>

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<P align="left"><B>(i)</B> in case the failure to perform any Related Contract is attributable to either Party hereto, such Party shall also be liable for the non-performance of this Agreement if and to the extent that this Agreement is an Affected Contract; </P>
<P align="left">
<B>(ii)</B> in case of any failure to perform any Related Contract due to a Force Majeure Event, as defined in any such Related Contract, the non-performance hereof shall be deemed to have occurred under a Force Majeure Event if and to the extent
such failure prevents the performance of this Agreement. </P>
<P align="center">
<B>CLAUSE EIGHT &#150; UNIT PRICE </B></P>
<P align="left">
<B>8.1.</B> <B><I>Unit Price. </I></B>The price for the Services performed under this Agreement shall be determined on the basis of the quantities of the Iron Ore in relation to which the Services have been effectively rendered in each month, based
on the following formula (with the price per metric ton on a wet basis resulting from application of the cited formula being hereinafter referred to as the &#147;<U>Unit Price</U>&#148;): </P>
<TABLE border=1 width=100% align="center" cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <TR valign="bottom">
    <TD width="100%" align=center bgcolor="#CCCCCC"><B>PU = P</B><B><SUB>1 </SUB></B><B>+ P</B><B><SUB>2</SUB></B></TD>
  </TR>
</TABLE>
<BR>
<P>
<U>Where</U>: </P>
<P>
<B>PU </B>= means Unit Price for a determined month for performance of the Services; </P>
<P><B>P</B><B><sub>1</sub></B><SUP> </SUP><B><SUP> = </SUP></B>means, as of April 1, 2008, the equivalent in Brazilian currency of US&#36;[&#149;] (&#147;<U>Y</U>&#148;), it being certain that such amount shall be readjusted at the beginning of each Mining Year
based on the same percentage readjustment as iron ore fines of the type known as standard sinter feed<I> </I>&#150; SSF (Itabira Fines), as produced by the [&#149;] (hereinafter referred to as &#147;[&#149;]&#148;) and aimed for shipment through the
Port of Tubar&atilde;o to Japan (such ore being hereinafter referred to as &#147;<U>Reference Ore</U>&#148;), as disclosed (by order): </P>
<P>
<B>(i)</B> in the Tex Report, as published by the Tex Report, Ltd. (or successor thereto); </P>
<P>
<B>(ii)</B> if the Tex Report, for any reason, is no longer available or does not any longer disclose the Reference Ore, the Metal Bulletin, published by Metal Bulletin, plc (or successor thereto); or </P>
<P>
<B>(iii)</B> if the Metal Bulletin, for any reason, is no longer available or does not any longer disclose the price of the Reference Ore, then the [&#149;] website or any other [&#149;] publication. </P>
<P>
Notwithstanding the provisions above, if, upon commencement of a Mining Year, the percentage readjustment applicable to the Reference Ore is not available and no other readjustment has been agreed to by the Parties in view of the conditions of the
international iron ore market, the &#147;Y&#148; applicable to the Services to be performed in the Mining Year that is about to begin shall temporarily be the &#147;Y&#148; then in effect until such time as the percentage readjustment applicable to
the Reference Ore is known or determined. As soon as the percentage readjustment applicable to the Reference Ore is known or determined, the new &#147;Y&#148; shall be determined in accordance with the provisions contained in this Clause, with
retroactive effects to the beginning of the Mining Year in question, with any eventual differences (either upwards or downwards) resulting from temporary use of the &#147;Y&#148; then in effect in the formula for
determination of the Unit Price being agreed between the Parties within a period of 30 (thirty) days counting from the date on which the new &#147;Y&#148; has been disclosed and communicated in writing by CSN to NAMISA. </P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B>13/39</P>

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<P align="left">In the event the Reference Ore should no longer be produced or sold, the Parties shall promptly replace it, for purposes of readjusting &#147;Y&#148;, with such product that succeeds Reference Ore or with such other type of iron ore that is
representative on the international iron ore market that is agreed to by the Parties. </P>
<P align="left">
For purposes of translating the &#147;Y&#148; into Brazilian currency, CSN shall use the average of quotations for sale of the United States Dollar as disclosed by the Brazilian Central Bank (BACEN) by means of transaction PTAX 0800, option 5 (or
such transaction as may replace same on the BACEN System - SISBACEN), in the month prior to that for issuance of the invoice relating to performance of the Services, and shall take &#147;P<sub>1</sub>&quot; to &nbsp;2 (two) decimal places after rounding off. &#147;<U>PTAX</U>&#148; means the ask rate which means the Brazilian Reais&#146;s bid and Dollar&#146;s ask rate, expressed as the amount of Brazilian Reais per one Dollar, published by the Brazilian
Central Bank on SISBACEN Data System under transaction code PTAX-800, Option 5, "<I>Venda</I>" by approximately 6:00 p.m., S&atilde;o Paulo time; and </P>
<P align="left">
<B>P</B><B><sub>2</sub></B> = means the amount in Brazilian Reais equivalent to US&#36; [&#149;], which is fixed and non-adjustable for the entire period that this Agreement remains in effect (non-cash amount of the Services price). </P>
<P align="left">
  For purposes of translating the <B>P</B><B><sub>2</sub></B>&nbsp;into Brazilian currency, CSN shall use PTAX applicable at the close at the business of the day that is 2 (two) Business Days (as defined in Clause 9.1.1 below) prior to the relevant calculation date, which relevant calculation date for the purposes of the payment of the Advance Payment shall
mean the date on which the such payment effectively occurs. If, no PTAX value is available on such date, PTAX value on the date shall be replaced by the exchange rate freely practiced in the financial market. </P>
<P align="left">
<B>8.2. </B><B><I>Taxes.</I></B> The Parties acknowledge and agree that the amounts attributed to &#147;P<sub>1</sub> &#148; and &#147;P<sub>2</sub>&#148; in Clause 8.1 above already include the cost related to the Municipal Tax on
Services of Any Kind &#150; ISS to be incurred by CSN, but do not include other taxes of any kind levied on the Services (subject to the tax adjustment provided in Clause 12.2, in case such adjustment occurs), such as the Federal Social Integration
Program &#150; PIS and Social Security Finance &#150; COFINS contributions. The taxes currently imposed on the Services and/or on the rendering of the Services as well as the formula for the addition of those taxes, if applicable, to the Unit Price
are disclosed in <U>Attachment VI</U> hereto. </P>
<P align="left">
<B>8.2.1 </B>. NAMISA shall use, to the extent possible, the tax credits related to the imposition of PIS and COFINS contributions on the rendering of the Services hereunder for each monthly supply of Services to set-off against NAMISA&#146;s
federal tax liabilities related to the Brazilian Corporate Income Taxes or other federal taxes, within 12 (twelve) months counted from such monthly supply of Services.</P>
<P align="left">
<B>8.2.2. </B>If during such 12 (twelve) month term NAMISA does not fully set-off the PIS and COFINS credits recognized as a result of the supply of Services hereunder (in the manner described in Clause 8.2.1 above) for each monthly supply of
Services, CSN shall grant NAMISA with non-interest bearing loans, under a current account mechanism, in the amount equivalent to the economic and financial burden equivalent to the full amount of PIS and COFINS credits not set-off, at the end of
each 12 (twelve) month term after the date on which the supply of Services hereunder commences to be subject to the imposition of PIS and COFINS Contributions. </P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B>14/39</P>

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<P>
<B>8.2.3. </B>If and when NAMISA succeeds on fully setting-off the PIS and COFINS credits mentioned in Clause 8.2.2, above against other federal taxes, NAMISA shall repay to CSN the portion of the loan referred to in Clause 8.2.2 equivalent to the
amount of the credits fully set-off. </P>
<P>
<B>8.2.4. </B>Once NAMISA&#146;s right to set-off or recover the PIS and COFINS credits in connection with a given month elapsed after the 5 (five) year period of statute of limitation set forth by the applicable legislation counted from the
recognition of tax credits by NAMISA or its Affiliates related to PIS and COFINS contributions as set forth in Clause 8.2.1, the balance, if any, of the relevant loans made in accordance with Clauses 8.2.2 and 8.2.3 shall be forgiven by CSN. </P>
<P>
<B>8.3.</B> If at any time during the term of this Agreement, as a result of change of Applicable Law , PIS and COFINS Contributions are replaced by new taxes imposed by any federal, state or municipal authority, which are imposed on the supply of
Services hereunder, or if other taxes are created and so imposed, the Parties shall negotiate in good faith on how the tax burden will be shared between them. If there is no agreement between the Parties within the period of 6 (six) months counted
from the change in Applicable Law mentioned in this Clause, the Parties shall share on a 50/50 basis the economic and financial burden equivalent to the amount of said tax burden. </P>
<P>
<B>8.4.</B> Except in the cases of accessory maritime support services (including among them pratique, use of tugboats and support launches to moor vessels), the Unit Price includes all the costs and expenses, both direct and indirect, required to
perform the Services and fulfill the obligations set forth in this Agreement, including but not limited the cost of using equipment, manpower &#150; both specialized and non-specialized, port expenses, Social Security contributions, burdens and
charges resulting from applicable Brazilian labor, social and Social Security legislation, as well as insurance and guarantees required by Applicable Law and/or established in this Agreement. </P>
<P align="center">
<B>CLAUSE NINE &#150; ADVANCE PAYMENT </B></P>
<P>
<B>9.1. </B><B><I>Advance Payment.</I></B> On the date agreed by the Parties but not later than 90 (ninety) days from the date of execution of this Agreement, NAMISA shall make available to CSN, in advance, on account of the Services to be performed
to NAMISA under this Agreement, the amount in Brazilian Reais equivalent to US&#36; [&#149;] (hereinafter referred to as the &#147;<U>Advance Payment</U>&#148;), amount which corresponds to the sum of each one of the results of multiplication (a) of
each Monthly Quantity set forth in <U>Attachment III</U> (for each one of the months of each Mining Year) by (b) US&#36;[&#149;], adjusted to present value through the signature date of this Agreement based on a discount rate of [&#149;] per annum.
</P>
<P>
<B>9.1.1.</B> The conversion of amounts in Dollars into Brazilian Reais, under this Agreement, shall use PTAX applicable at the close of the business of the day that is 2 (two) Business Days (as defined below) prior to the relevant calculation date,
which relevant calculation date for the purpose of the payment of the Advance Payment shall mean the date on which such payment effectively occurs. If no PTAX value is available on such date, PTAX value on the date shall be replaced by the exchange
rate freely practiced in the financial market. &#147;<U>Business Day</U>&#148; means any day (excluding Saturdays and Sundays) on which commercial banks generally are open for the transactions of normal banking business (i) in the City of S&atilde;o
Paulo, Brazil, (ii) in the City of New York, United States of America, (iii) in the City of Tokyo, Japan and (iv) in the City of Seoul, South Korea.<B> </B></P>
<P>
<B>9.1.2.</B> The Advance Payment shall be made by means of available electronic transfer (TED - &#147;<I>transfer&ecirc;ncia eletr&ocirc;nica dispon&iacute;vel</I>&#148;) of funds to CSN&#146;s current account indicated in <U>Attachment IV</U>
hereto (or to such other account as may be notified by CSN to NAMISA under the terms of this Agreement). </P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B>15/39</P>

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<P align="left">
<B>9.2. </B><B><I>Deduction of the Advance Payment upon Performance of the Services.</I></B> At the end of each month of performance of the Services, CSN shall automatically deduct from the balance of CSN&#146;s debt to NAMISA in relation to the
Advance Payment a fixed and non-adjustable amount corresponding to the portion of the Advance Payment attributable to the Services performed in such month, which amount is equivalent to: </P>
<P align="left">
<b>(a)  P</B><sub>2</sub> (as defined in Clause 8.1 above); </P>
<P align="left">
<B>(b)</B> multiplied by QE (which shall<B> </B>mean the quantity of the Iron Ore effectively shipped by NAMISA in a given month, as determined by the relevant draft surveys). </P>
<P align="left">
<B>9.3.</B> <B><I>Updating of CSN&#146;s Debt to NAMISA in relation to the Advance Payment.</I></B> The balance of CSN&#146;s debt to NAMISA in relation to the Advance Payment shall be subject to the levying of interest charges, determined on the
basis of such a rate that, net of taxes, corresponds to [&#149;] per annum, calculated on a monthly <I>pro rata</I> basis. </P>
<P align="left">
<B>9.3.1.</B> The interest charges dealt with in Clause 9.3 above shall be computed through the end of each month (or fraction thereof), as from the date of making the Advance Payment and through the termination or expiration of this Agreement,
based on the balance of CSN&#146;s debt to NAMISA in relation to the Advance Payment on such date, after the deduction provided in Clause 9.2 above. Such interest charges, after being calculated, are to be treated in the following manner: </P>
<P align="left">
<B>(a)</B> [&#149;] of the amount corresponding to the interest charges shall be added to the balance of cited CSN debt at the end of each Mining Year;</P>
<P align="left">
<B>(b)</B> [&#149;] of the amount corresponding to the interest charges shall be paid by CSN to NAMISA on the second Working Day of the month subsequent to the one in question, by means of available electronic transfer (TED -
&#147;<I>transfer&ecirc;ncia eletr&ocirc;nica dispon&iacute;vel</I>&#148;) of funds to NAMISA&#146;s current account indicated in Attachment IV. For the purposes of this Agreement, the term &#147;<U>Working Day</U>&#148; means any day except
Saturdays, Sundays and holidays on which banks are not authorized to open for business in the City of S&atilde;o Paulo, State of S&atilde;o Paulo; and </P>
<P align="left">
<B>(c)</B> the Parties shall redefine the proportion of interest charges provided in items (a) and (b) above in case of creation or alteration of taxes in order to maintain the financial balance of the date of execution hereof. </P>
<P align="left">
<B>9.4. </B>Every [&#149;] years as from the commencement of the provision of Services under this Agreement, the Parties shall negotiate in good faith an increase of P<SUB>2</SUB>, which (i) shall neverresult in a total PU that is higher than the market price for the Services, and (ii) shall not result in any tax adverse effect for both Parties. If the Parties fail to reach an agreement as to such increase, the then current P<SUB>2</SUB> shall not be varied. </P>
<P align="center">
<B>CLAUSE TEN &#150; BILLING AND PAYMENT </B></P>
<P align="left">
<B>10.1.</B> <B><I>Issuance of Invoices. </I></B>On the last day of each month, CSN shall issue an invoice (&#147;<U>NFF</U>&#148;) for the Services performed in such month and submit such NFF to NAMISA within no more than 3 (three) Working Days
from the issue date, with due regard to this Clause and Applicable Law. </P>
<P align="left">
<B>10.1.1.</B> The NFFs shall be issued to NAMISA based on the certificates provided in the manner set forth in <U>Attachment III</U> hereto in relation to each shipment of Iron Ore. Each NFF is to reflect (a) the value of the Services performed, in view of the Unit Price and the quantity of Iron Ore effectively shipped in that month, (b) the portion of the Advance Payment attributable to the
Services performed, calculated in the manner provided by Clause 9.2 above and for the purposes set forth in such Clause, and (c) the balance to pay. </P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B>16/39</P>

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<P align="left"><B>10.2.</B> <B><I>Payment Term of the NFFs.</I></B> The NFFs are to be paid by NAMISA within a period of no more than 30 (thirty) days counting from the date of NAMISA&#146;s receipt of original NFF, without any financial compensation or monetary
updating being due for such payment term. </P>
<P align="left">
<B>10.2.1.</B> In the event any NFF contains any irregularity, in NAMISA&#146;s opinion, NAMISA shall return it to CSN within a period of no more than 5 (five) Working Days from receipt thereof, with CSN being responsible for remedying such
irregularity and resubmitting it to NAMISA within a period of no more than 5 (five) Working Days. </P>
<P align="left">
<B>10.2.2.</B> In case there is any disagreement between the Parties in relation to any NFF received by NAMISA, such disagreement shall be resolved in a period of no more than 30 (thirty) days counting from the date such disagreement is notified by
any Party to the other, with any adjustments (either upwards or downwards) in the value of the NFF in relation to which there has been a disagreement being reflected in the immediately subsequent NFF or, if there are none, paid within the same
deadline established in accordance with Clause 10.2 above, counting from the date on which such adjustments have been determined and agreed to by the Parties. </P>
<P align="left">
<B>10.2.3.</B> NAMISA shall issue a debit note for such sums as CSN expressly recognizes as being owed to NAMISA under this Agreement, with full offset of such amounts as are due to NAMISA, at the NAMISA&#146;s discretion, against amounts that
NAMISA has to pay to CSN. In the event it is not possible or advisable to carry out the offset set forth in this Clause, the debit note shall be paid by CSN within the same deadline established under Clause 10.2 above counting from the issue day of
such debit note. </P>
<P align="left">
<B>10.3.</B> <B><I>Manner of Payment.</I></B> Any payment due by NAMISA to CSN shall be made by means of available electronic transfer (TED - &#147;<I>transfer&ecirc;ncia eletr&ocirc;nica dispon&iacute;vel</I>&#148;) of funds to CSN&#146;s current
account indicated in <U>Attachment IV</U> hereto (or to such other account as may be notified by CSN to NAMISA under the terms of this Agreement), with the transfer voucher slip serving as proof of payment and discharge of the respective obligation.
Any payment due by CSN to NAMISA shall also be carried out through the TED system for transferring funds to NAMISA&#146;s current account indicated in Attachment IV (or to such other account as may be notified by NAMISA to CSN under the terms of
this Agreement), with the transfer voucher slip serving as proof of payment and discharge of the respective obligation. </P>
<P align="left">
<B>10.4.</B> <B><I>Late Payment Charges.</I></B> In the event any delay should occur with respect to payment of amounts due under this Agreement by one Party to the other, the amount due and not paid shall be monetarily restated based on the
variation in the Reference Rate &#150; TR (or other such index as may replace the latter), plus late payment interest of 1% (one per cent) per month, calculated on a <I>pro rata </I>basis between the due date and the date of effective payment, with
no other type of increase being due. </P>
<P align="center">
<B>CLAUSE ELEVEN &#150; REPRESENTATIONS OF THE PARTIES </B></P>
<P align="left">
<B>11.1.</B> <B><I>Representations of CSN.</I></B> CSN hereby declares to NAMISA, as of the signing date below and during performance of the Services, assuming responsibility for the correctness, truthfulness and completeness of such
representations, that: </P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B>17/39</P>

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<B>(a)</B> it is a duly organized and validly established public joint stock corporation under the laws of Brazil and that it has full legal capacity to operate the Terminal and to conduct its business as conducted at present, and is duly qualified
to perform the Services under the terms of this Agreement; </P>
<P align="left">
<B>(b)</B> it has obtained all the corporate or similar authorizations required to sign this Agreement and to comply with the obligations attributed to it hereunder; </P>
<P align="left">
<B>(c)</B> this Agreement has been duly and validly executed and delivered by CSN and constitutes a legal, valid and binding obligation insofar as CSN is concerned and is enforceable against it on the terms hereof;</P>
<P align="left">
<B>(d)</B> it is not insolvent, under court protection from creditors, extrajudicial or judicial recovery, and it is neither impeded from paying its obligations and nor has it been declared bankrupt; </P>
<P align="left">
<B>(e) </B>neither the execution and delivery of this Agreement nor the consummation of the transactions and performance of the terms and conditions of this Agreement by CSN will (i) result in a violation or breach of or default under any provision
of the by-laws of CSN; (ii) will result in a violation or breach of or default under any provision of any agreement, indenture or other instrument under which CSN is bound; or (iii) violate any constitution, statute, law, regulation, rule, ruling,
charge, order, writ, injunction, judgment or decree (&#147;<U>Applicable Law</U>&#148;) of or by any federal, national, state, municipal, local or similar government, governmental, regulatory, administrative or tax authority, agency or commission or
any court, tribunal, or judicial or arbitral body (&#147;<U>Governmental Authority</U>&#148;), which may negatively affect or prevent the performance of its obligations hereunder or under the other Related Contracts; </P>
<P align="left">
<B>(f)</B> it has good, valid and marketable title to, valid and subsisting leasehold or acquisition interests in or to, or valid, binding and enforceable rights to, the Terminal and will have and keep good, valid and marketable title to, valid and
subsisting leasehold or acquisition interests in or to, or valid, binding and enforceable rights to the Terminal and other relevant assets and rights required for the performance hereof (&#147;<U>Assets</U>&#148;); </P>
<P align="left">
<B>(g)</B> it is not a party and will not enter into any agreement, arrangement, transaction, lease, license, note, mortgage, indenture, contract and other contractual rights and obligations, whether written or oral which negatively affect or
prevent the performance of its obligations hereunder; </P>
<P align="left">
<B>(h)</B> all Assets are (i) in good operating condition and repair, and are adequate for the uses to which they are being put and (ii) sufficient for the performance of the obligations of CSN hereunder or under the other Related Contracts;</P>
<P align="left">
<B>(i)</B> it has been and will continue to be in full compliance with all Applicable Law related to the performance of this Agreement, including without limitation those regarding tax, environmental, labor and social security matters; </P>
<P align="left">
<B>(j)</B> it has obtained and will keep all licenses, permits and authorizations required for its operation and the performance of this Agreement; and </P>
<P align="left">
<B>(k) </B>there is no court or administrative litigation, action, suit, proceeding, condemnation, investigation, claim, audit, order, decision, decree, writ, judgment, injunction, determination or award or any arbitration proceeding that may
prevent, limit or affect CSN&#146;s ability to perform any of its obligations under this Agreement. </P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B>18/39</P>

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<B>11.2.</B> <B><I>Representations of NAMISA. </I></B>NAMISA hereby declares to CSN, as of the signing date below and during performance of the Services, assuming responsibility for the correctness and truthfulness of such representations, that: </P>
<P>
<B>(a)</B> it is a duly organized and validly established joint stock corporation under the laws of Brazil and that it has full legal capacity to own and operate its facilities and conduct its business as conducted at present, and is duly qualified
to contract the Services under the terms of this Agreement; </P>
<P>
<B>(b)</B> it has obtained all the corporate or similar authorizations required to sign this Agreement and to comply with the obligations attributed to it hereunder; </P>
<P>
<B>(c)</B> this Agreement has been duly and validly executed and delivered by NAMISA and constitutes a legal, valid and binding obligation insofar as NAMISA is concerned and is enforceable against it on the terms hereof;</P>
<P>
<B>(d)</B><B> </B>it is not insolvent, under court protection from creditors, extrajudicial or judicial recovery, and it is neither impeded from paying its obligations and nor has it been declared bankrupt; </P>
<P>
<B>(e)</B><B> </B>neither the execution and delivery of this Agreement nor the consummation of the transactions and performance of the terms and conditions of this Agreement by NAMISA will (i) result in a violation or breach of or default under any
provision of the by-laws of NAMISA; (ii) will result in a violation or breach of or default under any provision of any agreement, indenture or other instrument under which NAMISA is bound; or (iii) violate any Applicable Law of or by any
Governmental Authority which may negatively affect or prevent the performance of its obligations hereunder; </P>
<P>
<B>(f)</B> it has been and will continue to be in full compliance with all Applicable Law related to the performance of this Agreement, including without limitation those regarding tax, environmental, labor and social security matters; </P>
<P>
<B>(g)</B> it has obtained and will keep all licenses, permits and authorizations required for its operation and the performance of this Agreement; and </P>
<P>
<B>(h) </B>there is no court or administrative litigation, action, suit, proceeding, condemnation, investigation, claim, audit, order, decision, decree, writ, judgment, injunction, determination or award or any arbitration proceeding that may
prevent, limit or affect NAMISA&#146;s ability to perform any of its obligations under this Agreement. </P>
<P align="center">
<B>CLAUSE TWELVE &#150; EFFECTIVE TERM </B></P>
<P>
<B>12.1.</B> This Agreement shall take effect on the signing date below, <U>except, however</U>, that the performance of the Services shall begin on the date set out in Clause 2.1 above. This Agreement shall be terminated (a) when performance of the
Services under the terms of this Agreement is concluded or (b) in the manner provided by Clause 14 below, whichever occurs first. </P>
<P>
<B>12.2</B>. In the event that the Terminal ceases to be at any time during the term of this Agreement registered as a bounded warehouse (<I>armaz&eacute;m alfandegado) </I>with the Brazilian Revenue Service (<I>Secretaria da Receita Federal do
Brasil</I>) and/or any other competent authority and as a result of that the physical movements, symbolic transfers, flows of invoices or rendering of Services under this Agreement becomes subject to any value added tax (including ICMS) imposed by
Brazilian federal or state taxing authorities, the Parties shall discuss in good faith on how the value added tax burden will be shared between them. If the parties do not reach a reasonable agreement within the period of six (6)
months counted from the date of the first tax imposition, the Parties shall equally share the cash, economic and financial burden related to the imposition of such value added taxes.</P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B>19/39</P>

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<P align="center"><B>CLAUSE THIRTEEN &#150; ACTS OF GOD, FORCE MAJEURE AND FORTUITIES </B></P>
<P>
<B>13.1. </B>Provided that the provisions of this Clause are complied with, neither of the Parties shall be held liable with respect to the other due to non-fulfillment of any obligation (except pecuniary obligations) attributed to it under this
Agreement and insofar as such non-fulfillment is directly attributable to an event of force majeure or act of God under Brazilian law, as defined by article 393, sole paragraph, of the Civil Code, including but not limited to (a) acts of wars
(whether declared or not ), epidemics, sabotage, military actions or hostilities and acts of terrorism or the escalation thereof occurring after the date hereof; (b) regional or national strikes, work stoppages, slowdowns or lockouts of any trade
category involved in performance of the Services or adversely affecting abilities of either Party to comply with the terms and conditions of this Agreement; (c) acts of God and inclement weather or such other atypical events of nature that are not
predictable and/or the effects of which cannot be avoided by employing reasonable control measures; and (d) accidents or emergency stoppages in order to prevent accidents that impede or restrict the operation and/or construction and/or expansion of
installations related to performance of the Services; (e) any decision by an arbitration panel or court of law (even if preliminary and subject to further appeal), obtained by or granted in favor of third parties that prevents compliance with either
Party&#146;s obligations under this Agreement); (f) expropriation, or statement of eminent domain for expropriation purposes (<I>declara&ccedil;&atilde;o de utilidade p&uacute;blica</I>), or any other restriction imposed by any public authority on
either Party&#146;s assets which prevents either Party&#146;s assets or abilities to comply with the terms and conditions of this Agreement; (g) any changes in Applicable Law occurring after the date hereof which prevents either Party from complying
with the terms and conditions of this Agreement; and (h) any other circumstance, change, development, event or fact that is unpredictable or unavoidable by the affected Party and which prevents such Party from complying with the terms and conditions
of this Agreement, if and to the extent any such events qualify as force majeure under article 393 sole paragraph of the Civil Code (&#147;<U>Force Majeure Event</U>&#148;). </P>
<P>
<B>13.1.1. </B>For all purposes, a Force Majeure Event under the other Related Contracts that renders unfeasible or otherwise prevents the performance of the Related Contracts in whole or part, including this Agreement, shall be considered a Force
Majeure Event under this Agreement. </P>
<P>
<B>13.2.</B> In case of the occurrence of a Force Majeure Event, the Party whose obligations are being affected by such Force Majeure Event (such Party being hereinafter referred to as the &#147;<U>Affected</U> <U>Party</U>&#148;) shall have 5
(five) Working Days counting from such event to notify the other Party of same and prove by means of appropriate documents, as the case may be, the occurrence of such event, as well as its direct or indirect impact on its obligations under this
Agreement. Notwithstanding, the Affected Party is to implement at its own expenses and as soon as possible measures to mitigate the effects and the direction of the event of Force Majeure or Act of God, indicating such measures to the other Party
and keeping the latter constantly informed on the progress of such measures. </P>
<P>
<B>13.3.</B> Should a Force Majeure Event occur: </P>
<P>
<B> (a)</B> up to the end of [&#149;], CSN shall pay to NAMISA a compensation equal to: </P>
<P>
K = P <sub>2</sub> x A </P>
<P>
Being: </P>
<P>
K &#150; compensation amount </P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B>20/39</P>

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A &#150; Quantity of Services not provided due to the Force Majeure Event  <br>
<br>
and <B> <br>
  <br>
(b)</B> On or after [&#149;], CSN shall pay to NAMISA an compensation equal to: </P>
<P>
X = <B><SUP>P</SUP></B><B>2</B><SUP> x B </SUP></P>
<P>
Being: </P>
<P>
X &#150; compensation amount </P>
<P>
B &#150; Quantity of Services not provided due to the Force Majeure Event in the first 365 days of such Force Majeure Event. </P>
<P>
<B>13.3.1.</B> Compensation amounts under Clause 13.3 shall be paid by CSN to NAMISA on a monthly basis until the 30<SUP>th</SUP> day of the subsequent month after the occurrence of a Force Majeure Event. Such provision shall apply to subsequent
months, if the Force Majeure Event continues. </P>
<P align="center">
<B>CLAUSE FOURTEEN &#150;MATERIAL BREACH, TERMINATION AND CONSEQUENCES OF TERMINATION </B></P>
<P>
<B>14.1.</B> CSN shall be deemed to have committed a material breach of this Agreement if, for reasons attributable to CSN, CSN provides Services in any given Mining Year in relation to less than [&#149;] of the Basic Annual Quantity
(&#147;<U>Material Breach</U>&#148;) and fails to remedy such Material Breach within [&#149;] days from the date of receipt of a written communication to that effect. </P>
<P>
<B>14.2. </B>If NAMISA breaches any obligation set forth herein (&#147;<U>NAMISA&#146;s Default</U>&#148;), CSN shall provide written notice of default to NAMISA within 30 (thirty) days following the occurrence of such breach (&#147;<U>Notice of
NAMISA&#146;s Default</U>&#148;). CSN and NAMISA shall discuss in good faith the amount of the indemnification due by NAMISA to CSN, or any other remedies reasonably available, which, in no event, shall be greater than the loss of income of CSN
deriving from Services not effected as a consequence of the NAMISA&#146;s Default. If no agreement is reached by the Parties within [&#149;] days as from receipt of the Notice of NAMISA&#146;s Default, CSN may claim for determination of the
indemnification amount according to Clause Eighteen. </P>
<P>
<B>14.3.</B> The Parties acknowledge and agree that this Agreement is not intended to be terminated before the full performance hereof unless exceptional circumstances occur or otherwise expressly provided hereunder, due to the substantial
investments made by both Parties for the performance thereof and the reliance of both Parties on the continued and full performance hereof. Without prejudice to any other rights provided in this Agreement, but with the exclusion of any other
termination right, except for those provided in this Clause 14, this Agreement may be terminated in the cases indicated below, provided that the Party that gives rise to such termination, either due to breach of contract or other circumstance
attributable to it (with such Party being hereinafter referred to as the &#147;<U>Defaulting Party</U>&#148;), shall not have any right to file a complaint and/or claim of any kind of indemnity whatsoever: </P>
<P>
<B>(a)</B><B> </B>by the other Party, at its exclusive discretion, in the event of non-compliance by the Defaulting Party with any monetary obligation set forth in this Agreement, provided that the other Party notifies the Defaulting Party with
respect to such non-performance and the Defaulting Party does not remedy such non-compliance within a period of [&#149;] days counting from the date of receipt of such notification; or </P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B>21/39</P>

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<B>(b)</B> by NAMISA at its exclusive discretion, in the event of occurrence of a Material Breach; or </P>
<P>
<B>(c) </B>by the other Party, at its exclusive discretion, in case any representation made in this Agreement by the Defaulting Party proves to be incorrect or untruthful, for any reason, as a result of which, at such other Party&#146;s reasonable
judgment, the due performance of this Agreement is materially adversely affected, provided that if such incorrect or untruthful matter can be straightened out and is not remedied within a period of 180 (one hundred and eighty) days counting from the
date of receipt of such notification pointing out the incorrect or untruthful representation; or </P>
<P>
<B>(d)</B> by the other Party, at its exclusive discretion, in the event of acceptance of a process for court recovery, the commencement of extrajudicial recovery, declaration of bankruptcy or dissolution of the Defaulting Party; or </P>
<P>
<B>(e)</B> by NAMISA, if any other Related Contract is terminated by NAMISA due to a Material Breach by CSN un as defined in such Related Contract. </P>
<P>
<B>14.4.</B> In the event this Agreement should be terminated, CSN shall make available to NAMISA all the iron ore owned by NAMISA that is at the Terminal, as well as all documents owned by NAMISA that are in CSN&#146;s power. The Iron Ore and the
documents shall be made available through payment by NAMISA of all expenses and costs for the Services performed and perchance not yet settled, with any credits being offset. NAMISA is to arrange, at its own expenses, for removal of the Iron Ore
from the Terminal within a period of no more than [&#149;] days counting from the date for termination of the Agreement, under penalty of the respective abandonment thereof being characterized, in the manner provided by the Brazilian Civil Code.
</P>
<P>
<B>14.5.</B> Should this Agreement be terminated for a reason attributable to NAMISA, NAMISA shall indemnify CSN for losses and damages (including any loss of income (business interruption) and indirect losses and damages, including consequential
damages) effectively incurred due to termination of this Agreement, which indemnity is hereby fixed in an amount corresponding to the balance of CSN&#146;s debt to NAMISA in relation to the Advance Payment as of the termination date, with CSN being
authorized, to such end, to offset the amount of such indemnity against CSN debt with NAMISA in relation to the Advance Payment. </P>
<P>
<B>14.6.</B> If upon conclusion of the performance of the Contractual Quantity set forth under this Agreement, subject to the extension of the term hereof, there is any balance of the Advance Payment made by NAMISA to CSN under Clause 9.1
(&#147;<U>Balance</U>&#148;), NAMISA shall pay to CSN an amount corresponding to such Balance (&#147;<U>Payment</U>&#148;), in consideration for (i) the investments made by CSN in order to render the Services to NAMISA (purchasing equipment, hiring
personnel, implementing systems, etc.), and (ii) the commitment assumed by CSN to guarantee performance of the Services for NAMISA for the term of this Agreement, including prejudice to any other business opportunities involving the Terminal. It is
hereby agreed by the Parties on an irrevocable basis that the Balance shall be immediately offset against the Payment. </P>
<P align="center">
<B>CLAUSE FIFTEEN &#150; GENERAL PROVISIONS </B></P>
<P>
<B>15.1.</B> The Parties acknowledge and agree that this Agreement contains all the requisites for this instrument to serve as a valid document for commencement of execution proceedings (<I>t&iacute;tulo executivo extrajudicial</I>), for all legal
intents and purposes. </P>
<P>
<B>15.2.</B> This Agreement reflects the entire understanding of the Parties with respect to its scope and replaces any and all previous agreements and understandings. Each one of the Parties hereby acknowledges and confirms that it is not signing
this Agreement on the basis of any representation,
guarantee or other commitment by the other Party that is not fully reflected in the provisions hereof. Any matter relating to performance of the Services that is not specifically provided in this Agreement shall be examined separately and mutually
agreed upon by the Parties. </P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B>22/39</P>

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<P><B>15.3.</B> This Agreement is not entered into on an exclusive basis by CSN, which may contract third parties at the same time or otherwise for performance of services that are identical or similar to the Services covered hereby. </P>
<P>
<B>15.4.</B> Without prejudice to the provisions contained in Clause 15.5 below, this Agreement binds the Parties and/or successors on any degrees whatsoever.  In this sense, in the event of merger, amalgamation (upstream merger under Brazilian
law), spin-off or change in control of either of the Parties, continuity of this Agreement is expressly assured, obligating the successor or any third parties related in any manner to the merger, amalgamation, spin-off or change in control of either
of the Parties to comply with all the clauses, terms and conditions established in this Agreement. </P>
<P>
<B>15.5.</B> Neither Party shall assign or transfer (in whole or in part) its rights or obligations under this Agreement without the prior written consent of the other Party, which consent shall not be unreasonably withheld, delayed or conditioned;
provided, however, that (i) each of the Parties may assign all of its rights and obligations under this Agreement without the prior written consent of the other Party to one or more of its Affiliates, as defined in Clause 15.5.2 below, and (ii) CSN
shall assign all of its rights and obligations under this Agreement without the prior written consent of NAMISA to the third party that acquires the Terminal. This Agreement shall be binding upon and inure to the benefit of the Parties and their
respective successors and permitted assigns and shall be enforceable by the Parties hereto and their respective successors and permitted assigns. </P>
<P>
<B>15.5.1</B> In addition, to the foregoing, in the event of an assignment or transfer as stated in Clause 15.5 (i), the assigning Party shall remain jointly liable with the assignee for all obligations under this Agreement. </P>
<P>
<B>15.5.2 </B>For the purposes of Clause 15.5 and 15.5.1 above, &#147;<U>Affiliates</U>&#148; shall mean, with respect to any Party, a person that directly or indirectly controls, or is under common control with, or is controlled by, such person. As
used in this definition, &#147;control&#148; (including, with its correlative meanings, &#147;controlled by&#148; and &#147;under common control with&#148;) shall mean possession, directly or indirectly, of securities having 50% or more of the
voting power for the election of directors or other governing body of a corporation or 50% or more of the partnership or other ownership interests of any other person. </P>
<P>
<B>15.6.</B> This Agreement may only be amended or modified by means of prior agreement between the Parties and the signing of a specific amendment signed by both Parties. </P>
<P>
<B>15.7.</B> Any omission or tolerance by the Parties in requiring the correct, full and punctual compliance with the specific or generic terms and conditions contained in this Agreement, or in exercising any prerogative hereunder, shall not
constitute any kind of waiver, desistance or novation, and nor shall it affect the right of the Parties to exercise them at any time. </P>
<P>
<B>15.8.</B> In the event any provision of this Agreement should be considered invalid, illegal or unenforceable for any reason, the validity, legality and enforceability of the remaining provisions contained in this Agreement shall not in any
manner whatsoever be affected or prejudiced thereby and shall remain in full force and effect. The Parties shall negotiate in good faith to replace any provisions considered invalid, illegal or unenforceable with valid, legal and enforceable
provisions, the effects of which shall approximate as closely as possible the legal and economic effects intended by the provisions considered invalid, illegal or unenforceable. </P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B>23/39</P>

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<B>15.9.</B> This Agreement does not create or intend to create any kind of company, association, joint venture, cooperative, partnership, consortium, or agency, and neither does it attribute or aim to create any kind of relationship involving
principal and agent, commercial representation, business management or other kind of similar legal arrangement between the Parties, except for those expressly provided in this Agreement and directly related to performance of the Services by CSN to
NAMISA. </P>
<P>
<B>15.10. </B>Each Party is responsible for covering its own costs and other expenses incurred or to be incurred in relation to the signing, execution and performance of this Agreement. </P>
<P>
<B>15.11.</B> Should, after the signature of this Agreement, any taxes be created, or any tax rates, taxable base or manners for calculating any tax existing at the signing date below and involving taxable events related in any manner to this
Agreement be altered, via Applicable Law, or any special tax benefit available to the Parties related to this Agreement granted by any federal, state of municipal taxing authorities be extinguished, the Parties shall negotiate, in good faith, to
amend this Agreement in order to restore its economic and financial balance. </P>
<P align="center">
<B>CLAUSE SIXTEEN &#150; CONFIDENTIALITY </B></P>
<P>
<B>16.1.</B> During the time this Agreement remains in effect and for the period of 5 (five) years after termination hereof, the Parties undertake &#150; for themselves as well as on behalf of third parties related to them &#150; to maintain
absolute secrecy regarding the terms and conditions of this Agreement, and also with respect to any and all information obtained as a result of same, except (a) if the disclosure of such information is determined by this Agreement or if such
information is already proven to be in the public domain, (b) with the express and prior authorization of the other Party, (c) in order to exercise any rights attributed to the Parties according to this Agreement, (d) required by Applicable Law, by
an order of any governmental authority or as a result of a judicial order, case in which the disclosure shall be limited to the clauses, terms and conditions that are to be disclosed pursuant to such determination; or (e) in case of NAMISA, the
disclosure of information to the Intervening Parties and to the shareholders of the Japanese SPC. </P>
<P align="center">
<B>CLAUSE SEVENTEEN &#150; COMMUNICATIONS </B></P>
<P>
<B>17.1.</B> All notices, communications, requests, authorizations and consents that have to be transmitted or given by the Parties under this Agreement shall only be valid and effective if provided in writing through correspondence (under protocol
or sent against notice of receipt) or fax (with proof of transmission) addressed in the following manner (or in such other manner as may be notified subsequently by one Party to the other): </P>
<P>
<B>(a)</B> NACIONAL MIN&Eacute;RIOS S/A: </P>
<P>Address: <I>Alameda da Serra, n&ordm; 400, 9&ordm; andar <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; CEP 34000-000 &#150; Nova Lima &#150; MG </I><br>
Phone: (0xx31) 3269-1410 <br>
Fax: (0xx31) 3269-1414 <br>
<I>At.: Diretor Comercial </I>(Attention of Commercial Director) <br>
<I>Cc.: Diretor de Opera&ccedil;&otilde;es e Diretor Jur&iacute;dico </I>(Copied to Operations Director and Legal Director) </P>
<P>
<B>(b)</B> COMPANHIA SIDER&Uacute;RGICA NACIONAL: </P>
<P>
Address: <I>Av. Brigadeiro Faria Lima, n&ordm; 3.400, 20&ordm; andar <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; CEP 04538-132 &#150; S&atilde;o Paulo &#150; SP </I></P>
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<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B>24/39</P>

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<p><A name="page_25"></A></p>
<p>Phone: (0xx31) 3749-1210 <br>
Fax: (0xx31) 3749-1284 <br>
<I>At.: Diretor de Minera&ccedil;&atilde;o</I> (Attention of Mining Director) <br>
<I>Cc.: Diretor Comercial de Min&eacute;rio de Ferro e Diretor Jur&iacute;dico</I> (Copied to Iron Ore Commercial Director and Legal Director) </p>
<P> <B>(c)</B> BIG JUMP PARTICIPA&Ccedil;&Otilde;ES S.A.: </P>
<P> Address: <I>Rua da Consola&ccedil;&atilde;o, 247, 3rd Floor, Room 85A, S&atilde;o Paulo, Brazil</I><br>
  Phone: (0xx11) 3170-8509 <br>
  Fax: (0xx11) 3170-8549 <br>
  <I>At.: Diretor Presidente (Attention of Director-President)</I> </P>
<P> <B>(d)</B> BRAZIL JAPAN IRON ORE CORPORATION: </P>
<P> Address: <I>5-1, Kita-Aoyama 2-chome, Minato-ku, Tokyo, 107-8077, Japan</I><br>
  Phone: (81 3) 3497-3365 <br>
  Fax: (81 3) 3497-3342 <br>
  <I>At.: Mr. Yasuhiro Miyata </I></P>
<P> <B>(e)</B> POSCO: </P>
<P> Address: <I>892 Daechi 4-dong Kangnam-gu, Seoul, 135-777, Korea </I><br>
  Phone: (82 2) 3457-0306 <br>
  Fax: (82 2) 3457-1908 <br>
  <I>At.: Mr. Myung Deuk Seo (Group Leader)</I> </P>
<div align="center"></div>
<P align="center">
<B>CLAUSE EIGHTEEN &#150; ARBITRATION </B></P>
<P>
<B>18.1. </B>The Parties are to submit any dispute, controversy or disagreement resulting from this Agreement or related to same solely and exclusively to arbitration in the manner provided by Law No. 9.307 of September 23, 1996 and by this Clause,
provided that such dispute, controversy or disagreement is not settled amicably by the Parties within a period of 30 (thirty) days counting from the date on which one of the Parties has notified the other regarding the existence of such dispute,
controversy or disagreement. Arbitration shall be definitive and the results thereof binding on the Parties. </P>
<P>
<B>18.2.</B> The arbitration proceedings shall take place in the City of S&atilde;o Paulo, State of S&atilde;o Paulo, and shall be administered by the International Court of Arbitration of the International Chamber of Commerce
(&#147;<U>ICC</U>&#148;) and, except as provided in this Agreement, shall be instituted and processed according to the Rules of Arbitration of the ICC (&#147;<U>Rules</U>&#148;). </P>
<P>
<B>18.3.</B> The arbitration panel shall be made up of 3 (three) arbitrators, with each one of the Parties being responsible for appointing 1 (one) arbitrator and these 2 (two) arbitrators appointed by the Parties responsible for jointly appointing
the third arbitrator, who shall preside over the arbitration panel. </P>
<P>
<B>18.4.</B> The charges, fees and other expenses directly related to the arbitration proceedings, which include the costs due to the ICC and the arbitrators&#146; fees and, as the case may be, any expert witnesses called, shall be initially borne
by both Parties in the same proportion, provided that the provisions contained in the Rules are complied with, though the arbitration award shall define the final allocation of such charges, fees and other expenses between the Parties. Each Party
shall cover the expenses of
the respective attorneys and assistants that it engages to represent it or to assist it during the arbitration proceedings. </P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B>25/39</P>

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<A name="page_26"></A>

<P><B>18.5.</B> Without prejudice to the other provisions contained in this Agreement, the Parties hereby acknowledge and admit the possibility of appealing to the Judiciary to obtain any urgent court measures that may be considered necessary to
preserve their respective rights and interests and such measures are not to be interpreted as a waiver by the Parties of arbitration proceedings. For such purposes and for any court enforcement of an arbitration award issued by the arbitration
panel, the Parties hereby choose the courts of the Judicial District of S&atilde;o Paulo, State of S&atilde;o Paulo, as having sole jurisdiction, with express waiver of any other courts, regardless of however much jurisdictional privilege they might
have. </P>
<P>
In witness whereof, the Parties and the Intervening Parties have caused this Agreement to be executed in five (5) counterparts with the same form and contents, before the two (2) undersigned witnesses. </P>
<P align="center">
S&atilde;o Paulo, SP, October 21<SUP>st</SUP>, 2008 <br>
<br>
</P>
<P align="center">
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] <br>
<br>
</P>
<P align="center">
<B>CONFIDENTIAL TREATMENT REQUESTED BY COMPANHIA SIDERURGICA NACIONAL</B>26/39</P>

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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-12.1
<SEQUENCE>19
<FILENAME>exhibit121.htm
<DESCRIPTION>EXHIBIT 12.1
<TEXT>
<HTML>
<HEAD>
   <TITLE>EXHIBIT 12.1 </TITLE>
   <META name="HandheldFriendly" content="true">
</HEAD>

<BODY style="font-family: 'Times New Roman, Times, Serif'; font-size:11px" bgcolor="#ffffff">
<P align="right"><a href="sidform20f2008a.htm#topexhibit">Table of Contents</a></P>
<A name="page_1"></A>
<P align="right">
<B>EXHIBIT 12.1 </B></P>
<P align="center"><b>Certification pursuant to Section  302 of the Sarbanes-Oxley Act of 2002 </b> <b> </b></P>
<P align="justify">
I, Benjamin Steinbruch, certify that: </P>
<P align="justify">
1. I have reviewed this annual report on Form 20-F  of Companhia Sider&uacute;rgica Nacional S.A., as amended by this Amendment No. 1;</P>
<P align="justify">
2. Based on my knowledge, this report does not  contain any untrue statement of a material fact or omit to state a material  fact necessary to make the statements made, in light of the circumstances under  which such statements were made, not misleading with respect to the period  covered by this report;</P>
<P align="justify">
3. Based  on my knowledge, the financial statements, and other financial information  included in this report, fairly present in all material respects the financial  condition, results of operations and cash flows of the company as of, and for,  the periods presented in this report;</P>
<P align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The company&rsquo;s other certifying officers and I  are responsible for establishing and maintaining disclosure controls and  procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and  internal control over financial reporting (as defined in Exchange Act Rules  13a-15(f) and 15d-15(f)) for the company and have: </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)  designed  such disclosure controls and procedures, or caused such disclosure controls and  procedures to be designed under our supervision to ensure that material  information relating to the company, including its consolidated subsidiaries,  is made known to us by others within those entities, particularly during the  period in which this report is being prepared </P>
<P align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) designed  such internal control over financial reporting, or caused such internal control  over financial reporting to be designed under our supervision, to provide  reasonable assurance regarding the reliability of financial reporting and the  preparation of financial statements for external purposes in accordance with  generally accepted accounting principles; </P>
<P align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)  evaluated  the effectiveness of the company's disclosure controls and procedures and  presented in this report my conclusions about the effectiveness of the  disclosure controls and procedures, as of the end of the period covered by this  report based on such evaluation; and </P>
<P align="justify">&nbsp;&nbsp;&nbsp;&nbsp; (d)disclosed  in this report any change in the registrant's internal control over financial  reporting that occurred during the period covered by the annual report that has  materially affected, or is reasonably likely to materially affect, the  company's internal control over financial reporting; and </P>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The  company&rsquo;s other certifying officers and I have disclosed, based on my most  recent evaluation of internal control over financial reporting, to the  company's auditors and the audit committee of the company's board of directors  (or persons performing the equivalent function): <br>
  <br>
&nbsp;&nbsp;&nbsp;  (a) all  significant deficiencies and material weaknesses in the design or operation of  internal control over financial reporting which are reasonably likely to  adversely affect the registrant's ability to record, process, summarize and  report financial information; and <br>
<br>
&nbsp;&nbsp;&nbsp; (b)  any  fraud, whether or not material, that involves management or other employees who  have a significant role in the registrant's internal control over financial  reporting.</p>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <TR>
    <TD></TD>
    <TD width=2%></TD>
    <TD width=43%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>Dated: March 17, 2010 </TD>
  </TR>
  <TR>
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>By: /s/ Benjamin Steinbruch&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD align="center">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>Name:&nbsp;Benjamin Steinbruch&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>Title:&nbsp;Chief Executive Officer&nbsp;</TD>
  </TR>
</TABLE>
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<DOCUMENT>
<TYPE>EX-12.2
<SEQUENCE>20
<FILENAME>exhibit122.htm
<DESCRIPTION>EXHIBIT 12.2
<TEXT>
<HTML>
<HEAD>
   <TITLE>EXHIBIT 12.2</TITLE>
   <META name="HandheldFriendly" content="true">
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<BODY style="font-family: 'Times New Roman, Times, Serif'; font-size:11px" bgcolor="#ffffff">
<P align="right"><a href="sidform20f2008a.htm#topexhibit">Table of Contents</a></P>
<A name="page_1"></A>
<P align="right">
<B>EXHIBIT 12.2 </B></P>
<P align="center"><b>Certification pursuant to Section  302 of the Sarbanes-Oxley Act of 2002 </b></P>
<P align="left"> <b> </b>  I, Paulo Penido Pinto Marques, certify that: <br>
  <br>
  1. I have reviewed this annual report on Form  20-F of Compahia Sider&uacute;rgica Nacional S.A., as amended by this Amendment No. 1; <br>
  <br>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does  not contain any untrue statement of a material fact or omit to state a material  fact necessary to make the statements made, in light of the circumstances under  which such statements were made, not misleading with respect to the period  covered by this report; <br>
  <br>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial  statements and other financial information included in this report fairly  present in all material respects the financial condition, results of operations  and cash flows of the company as of, and for, the periods presented in this  report; <br>
  <br>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The company's other certifying officers  and I are responsible for establishing and maintaining disclosure controls and  procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and  internal control over financial reporting (as defined in Exchange Act Rules  13a-15(f) and 15d-15(f)) for the company and have: <br>
  <br>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) designed such disclosure controls and  procedures or caused such disclosure controls and procedures to be designed  under our supervision to ensure that material information relating to the  company, including its consolidated subsidiaries, is made known to us by others  within those entities, particularly during the period in which this report is  being prepared; <br>
  <br>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) designed such internal control over  financial reporting, or caused such internal control over financial reporting  to be designed under our supervision, to provide reasonable assurance regarding  the reliability of financial reporting and the preparation of financial  statements for external purposes in accordance with generally accepted  accounting principles; <br>
  <br>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) evaluated the effectiveness of the  company's disclosure controls and procedures and presented in this report our  conclusions about the effectiveness of the disclosure controls and procedures  as of the end of the period covered by this report based on such evaluation;  and <br>
  <br>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) disclosed in this report any change in the  company's internal control over financial reporting that occurred during the  period covered by the annual report that has materially affected, or is  reasonably likely to materially affect, the company's internal control over  financial reporting; and <br>
  <br>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The company's other certifying officers  and I have disclosed, based on our most recent evaluation of internal control  over financial reporting, to the company's auditors and to the audit committee  of the company's board of directors (or persons performing the equivalent  functions): <br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) all significant deficiencies and material  weaknesses in the design or operation of internal control over financial  reporting which are reasonably likely to adversely affect the company's ability  to record, process, summarize and report financial information; and</P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) any fraud, whether or not material, that  involves management or other employees who have a significant role in the  company's internal control over financial reporting.<br>
<br>
&nbsp;&nbsp;&nbsp;
<table border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <tr>
    <td></td>
    <td width=2%></td>
    <td width=43%></td>
  </tr>
  <tr valign="bottom">
    <td align=left>&nbsp;</td>
    <td align=left>&nbsp;</td>
    <td align=left><p>Dated: March 17, 2010 </p></td>
  </tr>
  <tr>
    <td colspan=3>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=left>By: /s/ Paulo Penido Pinto Marques&nbsp;</td>
  </tr>
  <tr valign="bottom" style="font-size: 1px">
    <td align="center">&nbsp;</td>
    <td></td>
    <td align="center" style="border-top: 1px solid #000000;">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=left>Name:&nbsp;Paulo Penido Pinto Marques&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align=left>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=left>Title:&nbsp;Chief Financial Officer&nbsp;</td>
  </tr>
</table>
<P align="justify">&nbsp;&nbsp;b) any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting. </P>
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<DOCUMENT>
<TYPE>EX-13.1
<SEQUENCE>21
<FILENAME>exhibit131.htm
<DESCRIPTION>EXHIBIT 13.1
<TEXT>
<HTML>
<HEAD>
   <TITLE>EXHIBIT 13.1</TITLE>
   <META name="HandheldFriendly" content="true">
</HEAD>

<BODY style="font-family: 'Times New Roman, Times, Serif'; font-size:11px" bgcolor="#ffffff">
<P align="right"><a href="sidform20f2008a.htm#topexhibit">Table of Contents</a></P>
<A name="page_1"></A>
<P align="right">
<B>EXHIBIT 13.1 </B></P>
<P align="center"> <b>Certification pursuant to Section  906 of the Sarbanes-Oxley Act of 2002</b> <b> </b></P>
<p>Pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63  of Title 18, United States Code), the undersigned officer of Companhia  Sider&uacute;rgica Nacional S.A. (the &ldquo;Company&rdquo;), does hereby certify, to such  officer&rsquo;s knowledge, that:  </p>
<P align="justify">The Annual Report on Form 20-F for  the fiscal year ended December 31, 2008 of the Company, as filed with the  Securities and Exchange Commission on June 30, 2009, as amended by this  Amendment No. 1 (the &ldquo;Report&rdquo;), fully complies with the requirements of Section  13(a) or 15(d) of the Securities Exchange Act of 1934 and the information contained  in the Report fairly presents, in all material respects, the financial  condition and results of operations of the Company.  </P>
<P align="justify">&nbsp;</P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <TR>
    <TD></TD>
    <TD width=2%></TD>
    <TD width=43%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>Dated: March 17, 2010 </TD>
  </TR>
  <TR>
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>By: /s/ Benjamin Steinbruch&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD align="center">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>Name:&nbsp;Benjamin Steinbruch&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>Title:&nbsp;Chief Executive Officer&nbsp;</TD>
  </TR>
</TABLE>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-13.2
<SEQUENCE>22
<FILENAME>exhibit132.htm
<DESCRIPTION>EXHIBIT 13.2
<TEXT>
<HTML>
<HEAD>
   <TITLE>EXHIBIT 13.2</TITLE>
   <META name="HandheldFriendly" content="true">
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<BODY style="font-family: 'Times New Roman, Times, Serif'; font-size:11px" bgcolor="#ffffff">
<P align="right"><a href="sidform20f2008a.htm#topexhibit">Table of Contents</a></P>
<A name="page_1"></A>
<P align="right">
<B>EXHIBIT 13.2 </B></P>
<P align="center"><b>Certification pursuant to Section  906 of the Sarbanes-Oxley Act of 2002</b> <b> </b></P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;</P>
<p>Pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63  of Title 18, United States Code), the undersigned officer of Companhia Sider&uacute;rgica  Nacional S.A. (the &ldquo;Company&rdquo;), does hereby certify, to such officer&rsquo;s  knowledge, that:  <br>
  The Annual Report on Form 20-F for  the fiscal year ended December 31, 2008 of the Company, as filed with the  Securities and Exchange Commission on June 30, 2009, as amended by this  Amendment No. 1 (the &ldquo;Report&rdquo;), fully complies with the requirements of Section  13(a) or 15(d) of the Securities Exchange Act of 1934 and the information  contained in the Report fairly presents, in all material respects, the financial  condition and results of operations of the Company.  </p>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <TR>
    <TD></TD>
    <TD width=2%></TD>
    <TD width=43%></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>Dated: March 17, 2010 </TD>
  </TR>
  <TR>
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>By:&nbsp; /s/ Paulo Penido Pinto Marques&nbsp;</TD>
  </TR>
  <TR valign="bottom" style="font-size: 1px">
    <TD align="center">&nbsp;</TD>
    <TD></TD>
    <TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>Name:&nbsp;Paulo Penido Pinto Marques&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>Title:&nbsp;Chief Financial Officer&nbsp;</TD>
  </TR>
</TABLE>
<BR>

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<DOCUMENT>
<TYPE>EX-15.1
<SEQUENCE>23
<FILENAME>exhibit151.htm
<DESCRIPTION>EXHIBIT 15.1
<TEXT>
<!DOCTYPE HTML PUBLIC "">


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<A name="page_1"></A>
<P align="right"><a href="sidform20f2008a.htm#topexhibit">Table of Contents</a></P>
<P align="right">
<B> EXHIBIT 15.1</B></P>
<P align="center">
<B>MANAGEMENT&#146;S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING </B> </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The management of Companhia Sider&uacute;rgica Nacional and subsidiaries (&#145;the Company&#148;) is responsible for establishing and maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s internal control over financial reporting is a process designed by, or under the supervision of, the Company&#146;s Audit Committee, principal executive and principal financial officers, and effected
by the Company&#146;s board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. The Company&#146;s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and
that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the Company&#146;s assets that could have a material effect on the consolidated financial statements. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Because of its inherent limitations, internal control over financial reporting may not prevent or detect material misstatements on a timely basis. Therefore even those systems determined to be effective can provide only
reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate. </P>
<P align="justify">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management assessed the effectiveness of the Company&#146;s internal control over financial reporting as of December 31, 2008 based on the criteria established in &#147;Internal Control &#150; Integrated Framework&#148;
issued by the Committee of Sponsoring Organizations &#150; COSO &#150; of the Treadway Commission. </P>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&rsquo;s management is committed to  the continuous improvement of our internal controls over financial reporting.  In 2008, the Company&rsquo;s management identified a deficiency in the process of  identification, accounting and disclosure of four offshore dormant subsidiaries  (Arame Corporation, International Charitable, TdBB and International Investment  Fund (I.I.F). These companies were formed in 2001, 2001, 1997 and 1999,  respectively, and our equity interest in these four subsidiaries had not been  recorded in our consolidated financial statements in prior fiscal years.</p>
<p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Arame Corporation, International  Charitable and TdBB do not have any assets or liabilities. I.I.F is not an  operational company, but owns an equity interest in a Brazilian operational railroad  company (MRS Log&iacute;stica S.A.), recorded through the equity investment method.</p>
<p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This deficiency resulted in a material  weakness as of December 31, 2008. A material weakness is a deficiency, or a  combination of deficiencies, in internal control over financial reporting, such  that there is a reasonable possibility that a material misstatement of the  company's annual or interim financial statements will not be prevented or  detected on a timely basis.</p>
<p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The  existing internal controls allowed the Company&rsquo;s management to detect the  deficiency during 2008 and the necessary adjustments were timely recorded in  our financial statements for fiscal year 2008. Therefore, our consolidated  financial statement for 2008 already included results of these subsidiaries.</p>
<p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, we assessed the impact of  these unrecorded adjustments on prior years and identified that equity was  understated in the amount of US$ 29.8 million during fiscal years 1999 through  2007, which represented 0.51% of the Company&rsquo;s accumulated net income for the  period (1999-2007), as follows: </p>
<TABLE border=0 width=100% align="center" cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
  <TR> <TD></TD><td width=2%></td><td width=45%></td></TR>
  <tr>
    <td align="center"><b>Year</b></td>
    <td align="center">&nbsp;</td>
    <td align="center"><b>Unrecorded&nbsp;<br>
Adjustments&nbsp;<br>
    </b><i>(In  millions of US$)</i></td>
    </tr>
  <TR style="font-size:1px">
  <td colspan=3 style="border-top: 1px solid #000000;">&nbsp;</td>
  </TR>
  <tr>
    <td align="center">1999</td>
    <td align="center">&nbsp;</td>
    <td align="center">(0.3)</td>
  </tr>
  <tr>
    <td align="center">2000</td>
    <td align="center">&nbsp;</td>
    <td align="center">1.4</td>
  </tr>
  <tr>
    <td align="center">2001</td>
    <td align="center">&nbsp;</td>
    <td align="center">(1.9)</td>
  </tr>
  <tr>
    <td align="center">2002</td>
    <td align="center">&nbsp;</td>
    <td align="center">(3.2)</td>
  </tr>
  <tr>
    <td align="center">2003</td>
    <td align="center">&nbsp;</td>
    <td align="center">1.8</td>
  </tr>
  <tr>
    <td align="center">2004</td>
    <td align="center">&nbsp;</td>
    <td align="center">7.7</td>
  </tr>
  <tr>
    <td align="center">2005</td>
    <td align="center">&nbsp;</td>
    <td align="center">8.2</td>
  </tr>
  <tr>
    <td align="center">2006</td>
    <td align="center">&nbsp;</td>
    <td align="center">8.1</td>
  </tr>
  <tr>
    <td align="center">2007</td>
    <td align="center">&nbsp;</td>
    <td align="center">8.0</td>
  </tr>
  <tr>
    <td align="center"><b>Total</b></td>
    <td align="center">&nbsp;</td>
    <td align="center"><b>29.8</b></td>
  </tr>
</table>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We concluded that these adjustments were not material and, therefore, it was not necessary to restate the consolidated financial statements for those years. Nonetheless we believed it consisted of a material weakness in 2008 due to the fact that the non-identification and report of certain subsidiaries in our consolidated financial statements could have potentially had a material impact.&nbsp;</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Once the deficiency was identified, management immediately informed our Audit Committee and our independent auditors. The Audit Committee conducted an independent evaluation and concurred that the financial effect related to this deficiency had no material impact on our consolidated financial statements.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In order to prevent the occurrence of such deficiencies, during fiscal year 2009, our management took the necessary remediation measures to ensure accuracy and effectiveness of our monitoring controls over the process of identification, accounting and disclosure of subsidiaries. These measures included:
  &nbsp;</p>
<ul>
  <li>Definition of policies (including corporate approvals) concerning the incorporation, acquisitions of interests, modifications in the capital structure, operations and liquidation of branches and subsidiaries. These policies establish parameters for the analysis, approval and consolidation and flow of information regarding these entities.  </li>
  <li> Centralization in the International Accounting Department of the reconciliation, consolidation and reporting activities regarding the subsidiaries.  </li>
  <li> Liquidation of dormant companies.  </li>
  <li> Implementation of the Financial Accounting (FI) and Materials Managements (MM) SAP System Modules for integrated subsidiaries (i.e. entities that operate as an extension of the parent company).
    &nbsp;</li>
</ul>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2008, in order to remediate the material weakness identified as of December 31, 2007, we restructured our legal department. The Company hired a general counsel who divided the department into four groups. Four senior assistant general counsel were brought in and new lawyers, paralegals and trainees were also hired to strengthen the team. CSN also initiated the development of electronic controls of lawsuits and electronic management of files, replacing the manual spreadsheets, through the implementation of specialized software. These actions (i) improved the controls over lawsuits and judicial processes; (ii) allowed the accurate estimation and recordation of provisions for contingencies; and (iii) ensured a smooth transition in case the personnel in charge of such controls leave the company, since historical information on lawsuits is well organized and can be easily accessed by new professionals.&nbsp;</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This material weakness identified for the year ended December 31, 2007 and concerning oversight and supervisory review of lawsuits was remediated during 2008 and no longer is a material weakness.&nbsp;</p>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman, Times, Serif'; font-size:11px">
<TR>
	<TD width=46%></TD>
	<TD width=2%></TD>
	<TD width=51%></TD></TR>
<TR valign="bottom">
  <TD align=left> March 17, 2010 </TD>
  <TD>&nbsp;</TD>
  <TD align=left>COMPANHIA SIDER&Uacute;RGICA NACIONAL</TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=left>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>By: /s/ Benjamin Steinbruch&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>By: /s/ Paulo Penido Pinto Marques&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 1px">
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD>
	<TD></TD>
	<TD align="center" style="border-top: 1px solid #000000;">&nbsp;</TD></TR>
<TR>
	<TD colspan=3>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Name: Benjamin Steinbruch&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Name: Paulo Penido Pinto Marques&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>Title: Chief Executive Officer&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>Title: Chief Financial Officer&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>&nbsp;&nbsp;</TD>
	<TD>&nbsp;</TD>
	<TD align=left>&nbsp;</TD></TR>
</TABLE>
<BR>

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<DOCUMENT>
<TYPE>EX-15.2
<SEQUENCE>24
<FILENAME>exhibit152.htm
<DESCRIPTION>EXHIBIT 15.2
<TEXT>
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<P align="right"><a href="sidform20f2008a.htm#topexhibit">Table of Contents</a></P>


<div align="center"><A name="page_1"></A>

  <IMG src="golder.gif" border=0>
  <BR>
</div>
<P align="center"><B>Consent of Independent Engineering and Environmental Services Firm </B></P>
<P>
We consent to Companhia Sider&uacute;rgica Nacional making references to our report issued in April 2007 with respect to the audit of the Casa de Pedra Iron Ore Reserves for 31 December 2006 in its Annual Report of Foreign Private Issuers (From
20-F) filed from time-to-time with the U.S. Securities and Exchange Commission and other financial information to be issued from time-to-time. </P>
<P>
Santiago <br>
June 11, 2009 </P>
<P>
<B>GOLDER ASSOCIATES S.A. </B></P>
<P><IMG src="sig152.gif" border=0><BR> Dr M Godoy <br>
MAusIMM, MIAMG, SME. </P>
<P>
<U>Principal, Ore Evaluation Services</U> </P>

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