<SEC-DOCUMENT>0001292814-16-003772.txt : 20170224
<SEC-HEADER>0001292814-16-003772.hdr.sgml : 20170224
<ACCEPTANCE-DATETIME>20160308151542
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001292814-16-003772
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		2
FILED AS OF DATE:		20160308

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:		CORRESP

	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>CORRESP
<SEQUENCE>1
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<P style="TEXT-ALIGN: right; MARGIN: 0cm 0cm 12pt 324pt" align=right><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">March 8, 2016</FONT></P>

<P style="MARGIN: 0cm 0cm 12pt"><U><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Via Email</FONT></U></P>

<P style="MARGIN: 0cm 0cm 12pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Mr. Terence O&#8217;Brien&nbsp;&nbsp; <BR>Branch Chief <BR>Office of Manufacturing and Construction <BR>United States Securities and Exchange Commission<BR>100 F Street, N.E.<BR>Washington, D.C. 20549-4631</FONT></P>

<P style="MARGIN: 0cm 0cm 12pt 72pt; TEXT-INDENT: -36pt"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Re:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">National Steel Company<BR>Form 20-F for the fiscal year ended December 31, 2014<BR>Filed April 30, 2015<BR>File No. 1-14732<BR>Response to Staff Comment Letter dated February, 8, 2016</FONT></P>

<P style="MARGIN: 0cm 0cm 12pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Dear Mr. O&#8217;Brien:</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Companhia Sider&#250;rgica Nacional (the &#8220;</FONT><U><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Company</FONT></U><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">&#8221;) received a comment letter from the staff of the United States Securities and Exchange Commission (the &#8220;</FONT><U><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Staff</FONT></U><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">&#8221;) on February, 8, 2016 regarding the Company&#8217;s response, dated January 14, 2016, to the Staff&#8217;s December 15, 2015 letter, concerning the Company&#8217;s annual report on Form 20-F for the fiscal year ended December 31, 2014 and filed on April 30, 2015 (the &#8220;</FONT><U><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">2014 Form 20-F</FONT></U><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">&#8221;). This letter provides the Company&#8217;s responses to the Staff&#8217;s comments. For your convenience, we have reproduced below in italics the Staff&#8217;s comments and have provided responses immediately below such comments. All page numbers referred to herein are to the 2014 Form 20-F.</FONT></P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 12pt"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">SEC Comment.</FONT></B></P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 12pt"><U><FONT lang=EN-US style="FONT-SIZE: 11.5pt" color=black face="Times New Roman">Note 2 &#8211; Summary of Significant Accounting Policies, page FS-8</FONT></U></P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 12pt"><U><FONT lang=EN-US style="FONT-SIZE: 11.5pt" color=black face="Times New Roman">2.n) Concessions, page FS-16</FONT></U></P>

<P style="MARGIN: 0cm 0cm 12pt 36pt; TEXT-INDENT: -36pt"><I><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">1)</FONT></I><I><FONT lang=EN-US style="FONT-SIZE: 7pt" face="times new roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></I><I><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">We have read your response to prior comment 1 in out letter to you dated December 15, 2015.</FONT></I></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt 36pt; TEXT-INDENT: 0cm"><I><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">With reference to the guidance set forth in IFRIC 12, including paragraphs AG1-AG8, please provide us with the following additional information about each of your material concessions. This information should also address the material concession held within your equity method investments, TLSA and MRS. </FONT></I></P>

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<P style="TEXT-ALIGN: right; MARGIN: 0cm 0cm 0pt" align=right><FONT><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman"></FONT></FONT>&nbsp;</P></DIV>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt 36pt; TEXT-INDENT: -18pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=symbol>&#183;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="times new roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><I><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Provide us with a general description of the terms and the conditions of the concession and the types of transactions entered into with your customers;</FONT></I></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt 36pt; TEXT-INDENT: -18pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=symbol>&#183;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="times new roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><I><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Tell us the public service nature of the obligations you have undertaken via these concessions agreements;</FONT></I></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt 36pt; TEXT-INDENT: -18pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=symbol>&#183;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="times new roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><I><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Tell us to what extent you operate the assets under the concession for your own use;</FONT></I></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt 36pt; TEXT-INDENT: -18pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=symbol>&#183;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="times new roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><I><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">You state that the grantor of the concessions &#8220;effectively&#8221; neither regulates or controls to whom you provide services nor regulates or controls the prices charged to customers. With reference to specific terms of your concession agreements, please tell us the basis for this statement. Explain the use of term &#8220;effectively&#8221;. In doing so,</FONT></I></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt 70.9pt; TEXT-INDENT: -35.45pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=symbol>&#183;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="times new roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><I><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">clarify to what extent, if any, you do not control of regulate to whom services are provided and do not control prices charged to customers under each concession, and</FONT></I></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt 70.9pt; TEXT-INDENT: -35.45pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=symbol>&#183;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="times new roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><I><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">tell us any material circumstances in which a price you chose to charge a customer was changed by the concession grantor or if a price you request approval from the grantor to charge a customer was denied; and</FONT></I></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt 35.45pt; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=symbol>&#183;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="times new roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><I><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">You indicate that the concession and lease agreement for TECAR &#8220;technically&#8221; provides a maximum price that may be charged to customers. Please explain why there is a maximum price for a maximum of four days of stay for imports and six days exports if, for practical matters, most of your operations exceed these day limits. Also, explain the nature of the &#8220;other services&#8221; which require price approval by CDRJ. Explain why the agreement requires price approval and your process for obtaining such approval.</FONT></I></P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 12pt; TEXT-INDENT: 0cm"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Response to Comments</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt 36pt; TEXT-INDENT: -18pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=symbol>&#183;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="times new roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><B><I><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Provide us with a general description of the terms and the conditions of the concession and the types of transactions entered into with your customers;</FONT></I></B></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt 36pt; TEXT-INDENT: -18pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=symbol>&#183;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="times new roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><B><I><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Tell us the public service nature of the obligations you have undertaken via these concessions agreements;</FONT></I></B></P>

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<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 12pt; TEXT-INDENT: 0cm"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">The general terms and conditions of the contracts, contract period, leased assets and refund on investments in concession agreements are presented below:</FONT></P>

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   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Concession</FONT></B></P></TD>

   <TD style="BORDER-TOP: windowtext 1pt solid; HEIGHT: 15.75pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="26%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Concession / leasing Price</FONT></B></P></TD>

   <TD style="BORDER-TOP: windowtext 1pt solid; HEIGHT: 15.75pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="20%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Contract period</FONT></B></P></TD>

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   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Assets</FONT></B></P></TD>

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   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Refund on investments</FONT></B></P></TD></TR>

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   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">MRS</FONT></B></P></TD>

   <TD style="HEIGHT: 36.75pt; BORDER-RIGHT: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="26%">

   <P style="MARGIN: 0cm 0cm 0pt"><U><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Paid upon signing:</FONT></U><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman"> One-time payment of R$13,333,665.</FONT></P></TD>

   <TD style="HEIGHT: 36.75pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: black 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" rowSpan=2 width="20%">

   <P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">30 years renewable for an additional 30-year period. The contract expires in 2026, renewable until 2056.</FONT></P></TD>

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   <P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Assets related to cargo transportation in southeast rail network.</FONT></P></TD>

   <TD style="HEIGHT: 36.75pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: black 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" rowSpan=2 width="25%">

   <P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">At the end of the contract, MRS will be made whole for investments and other related assets not fully depreciated.</FONT></P></TD></TR>

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   <TD style="HEIGHT: 26.25pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="26%">

   <P style="MARGIN: 0cm 0cm 0pt"><U><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Fixed payment</FONT></U><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">: 116 quarterly installments of R$863,500, starting 1 year after signing the contract. </FONT></P></TD></TR>

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   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">FTL</FONT></B><SUP><B><FONT lang=EN-US style="FONT-SIZE: 11pt" color=black face="Times New Roman">(1)</FONT></B></SUP></P></TD>

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   <P style="MARGIN: 0cm 0cm 0pt"><U><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Paid upon signing</FONT></U><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">: One-time payment of R$331,560.</FONT></P></TD>

   <TD style="HEIGHT: 46.5pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="20%">

   <P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">30 years renewable for an additional 30-year period. The contract expires in 2027, renewable until 2057.</FONT></P></TD>

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   <P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Assets related to cargo transportation in northeast rail network. </FONT></P></TD>

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   <P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">At the end of the contract, FTL will be made whole for investments and other related assets not fully depreciated.</FONT></P></TD></TR>

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   <TD style="HEIGHT: 39pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 3.5pt" width="15%" noWrap>

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">TLSA</FONT></B><SUP><B><FONT lang=EN-US style="FONT-SIZE: 11pt" color=black face="Times New Roman">(1)</FONT></B></SUP></P></TD>

   <TD style="HEIGHT: 39pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="26%">

   <P style="MARGIN: 0cm 0cm 0pt"><U><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Fixed payment</FONT></U><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">: 108 quarterly installments of R$25,000, starting 3 years after signing the contract.</FONT></P></TD>

   <TD style="HEIGHT: 39pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="20%">

   <P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">30 years renewable for an additional 30-year period. The contract has been extended and expires in 2057.</FONT></P></TD>

   <TD style="HEIGHT: 39pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="14%">

   <P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">FTL rail network only, TLSA rail network is under constructions. </FONT></P></TD>

   <TD style="HEIGHT: 39pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="25%">

   <P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">At the end of the contract, TLSA will be made whole for investments and other related assets not fully depreciated.</FONT></P></TD></TR>

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   <TD style="HEIGHT: 33.75pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: black 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 3.5pt" rowSpan=3 width="15%" noWrap>

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">TECAR</FONT></B></P></TD>

   <TD style="HEIGHT: 33.75pt; BORDER-RIGHT: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="26%">

   <P style="MARGIN: 0cm 0cm 0pt"><U><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Paid upon signing:</FONT></U><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman"> One-time payment of R$37,000,000.</FONT></P></TD>

   <TD style="HEIGHT: 33.75pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: black 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" rowSpan=3 width="20%">

   <P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">25 years renewable for an additional 25-year period. The contract has been extended and expires in 2047.</FONT></P></TD>

   <TD style="HEIGHT: 33.75pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: black 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" rowSpan=3 width="14%">

   <P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Port facility for handling coal, coke and ore.</FONT></P></TD>

   <TD style="HEIGHT: 33.75pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: black 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" rowSpan=3 width="25%">

   <P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">At the end of the contract, TECAR will be made whole for investments and other related assets not fully depreciated.</FONT></P></TD></TR>

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   <TD style="HEIGHT: 25.5pt; BORDER-RIGHT: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="26%">

   <P style="MARGIN: 0cm 0cm 0pt"><U><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Fixed payment</FONT></U><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">: Monthly payment of R$42,000.</FONT></P></TD></TR>

<TR style="HEIGHT: 36pt">

   <TD style="HEIGHT: 36pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="26%">

   <P style="MARGIN: 0cm 0cm 0pt"><U><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Variable payment</FONT></U><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">: Payment of R$0.30 per moved ton of coal;</FONT></P></TD></TR>

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   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">TECON</FONT></B></P></TD>

   <TD style="HEIGHT: 30pt; BORDER-RIGHT: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="26%">

   <P style="MARGIN: 0cm 0cm 0pt"><U><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Paid upon signing:</FONT></U><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman"> One-time payment of R$R$39,000,000.</FONT></P></TD>

   <TD style="HEIGHT: 30pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: black 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" rowSpan=3 width="20%">

   <P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">25 years renewable for an additional 25-year period. The contract expires in 2026, renewable until 2051.</FONT></P></TD>

   <TD style="HEIGHT: 30pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: black 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" rowSpan=3 width="14%">

   <P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Port facility for handling of containers, vehicles and other cargo.</FONT></P></TD>

   <TD style="HEIGHT: 30pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: black 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" rowSpan=3 width="25%">

   <P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">At the end of the contract, TECON will be made whole for investments and other related assets not fully depreciated.</FONT></P></TD></TR>

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   <TD style="HEIGHT: 18pt; BORDER-RIGHT: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="26%">

   <P style="MARGIN: 0cm 0cm 0pt"><U><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Fixed payment:</FONT></U><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman"> 276 monthly installments of R$586,153.</FONT></P></TD></TR>

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   <TD style="HEIGHT: 30.75pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="26%">

   <P style="MARGIN: 0cm 0cm 0pt"><U><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Variable payment:</FONT></U><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman"> Payment of R$10.00 per container and R$1.00 per moved vehicle.</FONT></P></TD></TR></TABLE></DIV>

<P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 11pt" color=black face="Times New Roman">_______________________________</FONT></P>

<P style="MARGIN: 0cm 0cm 12pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">1. FTL and TLSA were originally part of the same concession. In February 2013 the concession agreement was split between FTL and TLSA and each company was assigned rights to a specific line of the Northeast network.</FONT></P>

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<P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt; TEXT-INDENT: 0cm"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Additionally, the public service nature of services, description of customers and price of the concession services are presented below:</FONT></P>

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   <TD style="BORDER-TOP: windowtext 1pt solid; HEIGHT: 15.7pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 3.5pt" width="13%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Concession</FONT></B></P></TD>

   <TD style="BORDER-TOP: windowtext 1pt solid; HEIGHT: 15.7pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="26%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Nature of obligations</FONT></B></P></TD>

   <TD style="BORDER-TOP: windowtext 1pt solid; HEIGHT: 15.7pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="23%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Customers</FONT></B></P></TD>

   <TD style="BORDER-TOP: windowtext 1pt solid; HEIGHT: 15.7pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="38%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Service Price</FONT></B></P></TD></TR>

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   <TD style="HEIGHT: 67.2pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 3.5pt" width="13%" noWrap>

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">MRS</FONT></B></P></TD>

   <TD style="HEIGHT: 67.2pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=top width="26%">

   <P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">We are required to provide railroad and ancillary services for loading, unloading, transshipment and storage of freight. The services must meet the quality and safety standards set by the National Land Transportation Agency &#8211; ANTT.</FONT></P></TD>

   <TD style="HEIGHT: 67.2pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=top width="23%">

   <P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Railroad transportation services may be freely provided upon demand, provided the potential client meets the legal requirements and commercial terms. </FONT></P></TD>

   <TD style="HEIGHT: 67.2pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=top width="38%">

   <P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Rates are freely set within the reference fees approved by ANTT. For certain exceptional cargo, fees and special fees may be negotiated between the Concessionaire and the customer. Rates are adjusted for inflation and may be reviewed every five years to reflect market conditions and productivity.</FONT></P></TD></TR>

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   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">FTL </FONT></B></P></TD>

   <TD style="HEIGHT: 43.45pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=top rowSpan=2 width="26%">

   <P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">We are required to provide railroad and ancillary services for loading, unloading, transshipment and storage of freight. The services must meet the quality and safety standards set by the ANTT.</FONT></P></TD>

   <TD style="HEIGHT: 43.45pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=top rowSpan=2 width="23%">

   <P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Railroad transportation services may be freely provided upon demand, provided the potential client meets the legal requirements and commercial terms. </FONT></P></TD>

   <TD style="HEIGHT: 43.45pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=top rowSpan=2 width="38%">

   <P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Rates are freely set within the reference fees approved by ANTT. For exceptional cargo, fees and special fees may be negotiated between the Concessionaire and the customer. Rates are adjusted for inflation and may be reviewed every five years to reflect market conditions and productivity.</FONT></P></TD></TR>

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   <TD style="HEIGHT: 7.2pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 3.5pt" width="13%" noWrap>

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">TLSA </FONT></B></P></TD></TR>

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   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">TECAR</FONT></B></P></TD>

   <TD style="HEIGHT: 108.7pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=top width="26%">

   <P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">We are required to provide infrastructure land and water access, equipment supply, transportation, receipt and delivery of cargo, loading and unloading of the ship, storage, weighing, monitoring, on-board services, storage, water and electricity supply to vessels, docking and undocking, storage of dangerous goods.</FONT></P></TD>

   <TD style="HEIGHT: 108.7pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=top width="23%">

   <P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Port services may be freely provided upon demand, provided the potential client meets the legal requirements and commercial terms. </FONT></P></TD>

   <TD style="HEIGHT: 108.7pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=top width="38%">

   <P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">The contract provides maximum reference prices for a limited range of basic services, based on a market research of the prices of competitors and adjusted to incorporate the inflation. Prices are freely set by us for additional services (e.g., storage above the minimum periods, on-board services, docking and undocking, water and electricity supply to vessels, among others), provided we submit our price list for review by the regulatory agency (ANTAQ) to confirm prices are not abusive, along with CDRJ&#8217;s public price list and amounts charged by other similar port terminals. The price list may be change at our option, upon 30 days advance notice to ANTAQ.</FONT></P></TD></TR>

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   <TD style="HEIGHT: 20.8pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 3.5pt" width="13%" noWrap>

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">TECON</FONT></B></P></TD>

   <TD style="HEIGHT: 20.8pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=top width="26%">

   <P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">We are required to provide infrastructure land and water access, equipment supply, transportation, receipt and delivery of cargo, loading and unloading of the ship, storage, weighing, monitoring, on-board services, storage, water and electricity supply to vessels, docking and undocking, storage of dangerous goods.</FONT></P></TD>

   <TD style="HEIGHT: 20.8pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=top width="23%">

   <P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Port services may be freely provided upon demand, provided the potential client meets the legal requirements and commercial terms. </FONT></P></TD>

   <TD style="HEIGHT: 20.8pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=top width="38%">

   <P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">There is no maximum reference price to be charged to customers, but we must submit its price list for review by ANTAQ to confirm prices are not abusive, along with CDRJ&#8217;s public price list and amounts charged by other similar port terminals. The price list may be change at our option, upon 30 days advance notice to ANTAQ.</FONT></P></TD></TR></TABLE></DIV>

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<P style="MARGIN: 0cm 0cm 0pt"><FONT style="text-underline: none" color=black face="Times New Roman"><FONT><FONT lang=EN-US style="FONT-SIZE: 8pt; TEXT-DECORATION: none; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; FONT-STYLE: normal" color=black face="Times New Roman">&nbsp; </FONT></FONT></FONT></P>

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<DIV align=left><B><FONT lang=EN-US style="FONT-SIZE: 14pt" face="Times New Roman"></FONT></B>&nbsp;</DIV></DIV>

<P style="TEXT-ALIGN: right; MARGIN: 0cm 0cm 0pt" align=right><FONT><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman"></FONT></FONT>&nbsp;</P></DIV>

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<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 12pt; TEXT-INDENT: 0cm"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Response to Comment</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt 36pt; TEXT-INDENT: -18pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=symbol>&#183;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="times new roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><B><I><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Tell us to what extent you operate the assets under the concession for your own use;</FONT></I></B></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt; TEXT-INDENT: 0cm"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">All iron ore traded by the company in the seaborne market is shipped through the solid bulk terminal (TECAR). Moreover, TECAR handles other products such as coal, petroleum coke, sulfur and zinc concentrate for our own consumption and for various clients. </FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt; TEXT-INDENT: 0cm"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Rail transport services provided by MRS are essential to the supply of raw materials and shipment of our finished products. All export iron ore and all coal, coke and iron ore used in the Presidente Vargas Steelworks is transported by MRS, as well as some of the steel and cement produced by us.</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt; TEXT-INDENT: 0cm"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">We do not use the FTL rail network to transport our own cargo.</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt; TEXT-INDENT: 0cm"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">We use TECON to transport certain of our finished steel products. </FONT></P>

<P style="MARGIN: 0cm 0cm 10pt; LINE-HEIGHT: 115%"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">The table below presents the percentage of CSN&#8217;s own use calculated based on the volume transported in 2014 by our concessions.</FONT></P>

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   <P style="MARGIN: 0cm 0cm 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" color=black face="Times New Roman">Concession</FONT></B></P></TD>

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   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 12pt" color=black face="Times New Roman">% for CSN own use </FONT></B></P></TD></TR>

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   <P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" color=black face="Times New Roman">TECAR</FONT></P></TD>

   <TD style="HEIGHT: 15pt; BACKGROUND: #c5d9f1; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="45%" noWrap>

   <P style="TEXT-ALIGN: right; MARGIN: 0cm 0cm 0pt" align=right><FONT lang=EN-US style="FONT-SIZE: 12pt" color=black face="Times New Roman">88%</FONT></P></TD></TR>

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   <P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" color=black face="Times New Roman">MRS</FONT></P></TD>

   <TD style="HEIGHT: 15pt; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="45%" noWrap>

   <P style="TEXT-ALIGN: right; MARGIN: 0cm 0cm 0pt" align=right><FONT lang=EN-US style="FONT-SIZE: 12pt" color=black face="Times New Roman">24%</FONT></P></TD></TR>

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   <P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" color=black face="Times New Roman">FTL</FONT></P></TD>

   <TD style="HEIGHT: 15pt; BACKGROUND: #c5d9f1; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="45%" noWrap>

   <P style="TEXT-ALIGN: right; MARGIN: 0cm 0cm 0pt" align=right><FONT lang=EN-US style="FONT-SIZE: 12pt" color=black face="Times New Roman">0%</FONT></P></TD></TR>

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   <P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" color=black face="Times New Roman">TECON</FONT></P></TD>

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   <P style="TEXT-ALIGN: right; MARGIN: 0cm 0cm 0pt" align=right><FONT lang=EN-US style="FONT-SIZE: 12pt" color=black face="Times New Roman">3%</FONT></P></TD></TR>

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   <P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" color=black face="Times New Roman">TLSA<SUP>1</SUP></FONT></P></TD>

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   <P style="TEXT-ALIGN: right; MARGIN: 0cm 0cm 0pt" align=right><FONT lang=EN-US style="FONT-SIZE: 12pt" color=black face="Times New Roman">In construction </FONT></P></TD></TR></TABLE></DIV>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt 99.25pt; TEXT-INDENT: -18pt"><I><FONT lang=EN-US style="FONT-SIZE: 8pt" face="Times New Roman">(1)</FONT></I><I><FONT lang=EN-US style="FONT-SIZE: 7pt" face="times new roman">&nbsp;&nbsp;&nbsp;&nbsp; </FONT></I><I><FONT lang=EN-US style="FONT-SIZE: 8pt" face="Times New Roman">TLSA Railway System&nbsp;is under construction.</FONT></I></P>

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<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 12pt; TEXT-INDENT: 0cm"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Response to Comment</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt 36pt; TEXT-INDENT: -18pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=symbol>&#183;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="times new roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><B><I><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">You state that the grantor of the concessions &#8220;effectively&#8221; neither regulates or controls to whom you provide services nor regulates or controls the prices charged to customers. With reference to specific terms of your concession agreements, please tell us the basis for this statement. Explain the use of term &#8220;effectively&#8221;. In doing so,</FONT></I></B></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt 70.9pt; TEXT-INDENT: -35.45pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=symbol>&#183;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="times new roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><B><I><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">clarify to what extent, if any, you do not control of regulate to whom services are provided and do not control prices charged to customers under each concession, and</FONT></I></B></P>

<P style="MARGIN: 0cm 0cm 12pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">All our concession agreements refer to &#8220;public service rail and port transport&#8221; without any restriction on whom we can provide the services to nor an obligation to provide services to specific customers. In case we and a particular customer were to fail to reach an agreement on commercial terms, the customer would have the right to appeal to the regulatory agency for the agency to arbitrate a decision on the matter. However, we never had any arbitrations regarding a commercial disagreement with our customers. Therefore, although regulatory agencies could theoretically overrule our commercial terms in an arbitration proceeding, this has never occurred and we were always free to set such terms, including prices, without interference.</FONT></P>

<P style="MARGIN: 0cm 0cm 12pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">In addition, railway transportation faces competition from other means of transportation, including highways, the main transportation mean in Brazil. As a result, we are required to negotiate competitive rates with customers and market prices rarely reach the price limits under our concessions.</FONT></P>

<P style="MARGIN: 0cm 0cm 12pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">The table below describes the extent of price restrictions over our concession contracts:</FONT></P>

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   <TD style="BORDER-TOP: windowtext 1pt solid; HEIGHT: 15.75pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 3.5pt" vAlign=bottom width="15%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Concessions</FONT></B></P></TD>

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   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Price Control extension</FONT></B></P></TD></TR>

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   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">MRS</FONT></B></P></TD>

   <TD style="HEIGHT: 75.85pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=top width="85%">

   <P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">As of December 31, 2014, MRS&#8217; main investors were: CSN, Minera&#231;&#245;es Brasileiras Reunidas S.A, Usiminas Participa&#231;&#245;es e Log&#237;stica S.A., Vale S.A and Gerdau S.A. Those companies were also the main customers of MRS, the total volume transported to them corresponded to 73% of the total volume transported by MRS in 2014. Prices charged from investors (as customers) were set upon mutual agreement of the various shareholders, based on market prices, and are lower than the limit approved by ANTT. Therefore, the price limits set by ANTT would be applicable to no more than 17% of the total transported volume of MRS. However, because the price limits are set above average market prices and MRS&#8217; prices to third-parties are within market averages, the price limitations have no influence on actual prices. Further, prices are annually adjusted for inflation and every five years ANTT reviews market conditions to update price limits. </FONT></P></TD></TR>

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   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">FTL </FONT></B></P></TD>

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   <P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">As the price limits are set above average market prices and FTL&#8217;s prices are within market averages, the price limitations have no influence on actual prices. Further, prices are annually adjusted for inflation and every five years ANTT reviews market conditions to update price limits. In this case, the competition of TFL with road transportation requires competitive rates with customers. </FONT></P></TD></TR>

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   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">TLSA</FONT></B></P></TD>

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   <P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Not applicable; under construction.</FONT></P></TD></TR>

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   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">TECAR</FONT></B></P></TD>

   <TD style="HEIGHT: 15.1pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=top width="85%">

   <P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 0pt; TEXT-INDENT: 0cm"><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">We used 88% of TECAR&#8217;s total transported volume in 2014, therefore services to third-parties represented only 12% of the total transported volume in 2014. The rationale for the concession agreement requiring a price approval is to prevent cases in which we could charge abusive prices. As mentioned above, our proposed prices have always been approved.</FONT></P></TD></TR>

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   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">TECON</FONT></B></P></TD>

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   <P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">There is no price control.</FONT></P></TD></TR></TABLE></DIV>

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<DIV align=left><B><FONT lang=EN-US style="FONT-SIZE: 14pt" face="Times New Roman"></FONT></B>&nbsp;</DIV></DIV>

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<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 12pt; TEXT-INDENT: 0cm"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Response to Comment</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt 70.9pt; TEXT-INDENT: -35.45pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=symbol>&#183;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="times new roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><B><I><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">tell us any material circumstances in which a price you chose to charge a customer was changed by the concession grantor or if a price you request approval from the grantor to charge a customer was denied; and</FONT></I></B></P>

<P style="MARGIN: 0cm 0cm 12pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Our prices to customers were never changed and our proposed prices were never denied approval by the grantor and/or regulatory agency.</FONT></P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 12pt; TEXT-INDENT: 0cm"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Response to Comment</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt 35.45pt; TEXT-INDENT: -14.15pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=symbol>&#183;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="times new roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><B><I><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">You indicate that the concession and lease agreement for TECAR &#8220;technically&#8221; provides a maximum price that may be charged to customers. Please explain why there is a maximum price for a maximum of four days of stay for imports and six days exports if, for practical matters, most of your operations exceed these day limits. Also, explain the nature of the &#8220;other services&#8221; which require price approval by CDRJ. Explain why the agreement requires price approval and your process for obtaining such approval. </FONT></I></B></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt; TEXT-INDENT: 0cm"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">The pricing structure set by CDRJ was based on international average lengths of stay in ports, but due to the bureaucracy and turnaround times of Brazilian governmental agencies involved in imports and exports, the actual length of stay at TECAR typically exceeds four days for imports and six days for exports.</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt; TEXT-INDENT: 0cm"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">The nature of other services that should be subject to prior price approval are: removal of cargo from vessels; water and electricity supply to vessels; storage of dangerous freights; work stoppages caused by lack of load on terminal or other reasons under the vessel owner&#8217;s responsibility; coal storage exceeding four days of stay for imports and six days for exports and moving loads other than coal.</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt; TEXT-INDENT: 0cm"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">The rationale for the concession agreement requiring a price approval is to prevent cases in which we could charge abusive prices. As mentioned above, our proposed prices have always been approved.</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt; TEXT-INDENT: 0cm"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">The approval process begins with us submitting a letter to ANTAQ with the proposed price list for their review to confirm prices are not abusive, along with amounts charged by other similar port </FONT>


<FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">terminals. The price list may be changed at our option, upon 30 days advance notice to ANTAQ. The approval is only a notice obligation, if there is no formal objection from ANTAQ within 30 days we are free to charge the new prices.</FONT></P>

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<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 12pt; TEXT-INDENT: 0cm"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">We hereby acknowledge that:</FONT></P>

<UL style="MARGIN-BOTTOM: 0cm; MARGIN-TOP: 0cm" type=disc>

<LI style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">we are responsible for the adequacy and accuracy of the disclosure in the filing;</FONT>

<LI style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing; and</FONT>

<LI style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">we may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.</FONT> </LI></UL>

<P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 12pt 18pt; TEXT-INDENT: 0cm" align=center><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">*******</FONT></P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 12pt; TEXT-INDENT: 0cm"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">If you have any questions or require any additional information with respect to the above, please do not hesitate to contact Andrew J&#225;nszky at +55-11-3927-7701, Felipe Camara at +55-11-3927-7716 or Maria Beatriz Martinez Alves at +55-11-3049-7537.</FONT></P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 12pt 252pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Sincerely,</FONT></P>

<P style="MARGIN: 0cm 0cm 12pt 252pt"><U><FONT lang=PT-BR style="FONT-SIZE: 12pt" face="Times New Roman">/s/ Paulo Rogerio Caffarelli<BR></FONT></U><FONT lang=PT-BR style="FONT-SIZE: 12pt" face="Times New Roman">Companhia Sider&#250;rgica Nacional <BR>By: Paulo Rogerio Caffarelli</FONT><U><FONT lang=PT-BR style="FONT-SIZE: 12pt" face="Times New Roman"><BR></FONT></U><FONT lang=PT-BR style="FONT-SIZE: 12pt" face="Times New Roman">Title: Executive Officer</FONT></P></DIV>

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end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
