Companhia Siderúrgica Nacional (CSNA3) Earnings Call Transcript & Summary

Good morning, everybody. We are steel. We are iron ore. We are cement. We are energy. We are logistics. We are CSN. Good morning to all of you. And thank you for participating in our CSN Investor Day. I am Marcelo Ribeiro, the CFO and IRO for CSN. And this morning, I have the other executives from the company with us. It is a great pleasure to have you here with you to speak about a very special year for CSN. More than 80 years with significant deliveries very well. Let us begin the presentation. First of all, we will go through our traditional disclaimers when it comes to future expectations. And secondly, we would like to thank our partners from APIMEC Brazil, who have helped us to foster this. We will have the presence through video of Mrs. Sousa at the part of the Q&A session. And I would also like to share with you the agenda that we will be following today. We have a very full and ambitious agenda. We will speak about our reach and our outlook when it comes to ESG innovation, when it comes to our main businesses, iron ore, cement and steel, we will speak about other pillars such as energy and logistics, and we will close with an outlook of our financial results. And at the end, we will have the traditional Q&A session. This should take approximately 1.5 hours, and we do hope to have a great deal of interaction with the investors. With this, I would like to give the floor for the initial message to Mr. Benjamin Steinbruch, our CEO.

Good morning to all of you. And here we are beginning another CSN Day. I would like to express a few words that refer to what we went through in the year 2021 and our outlook for 2022, of course, mentioning some points that are deemed to be relevant. So beginning with 2021, I would like to state that we had the best year in the 80 years of the history of CSN, and the best year by far. We had the IPO for mining, after many years of our intention of doing this, we finally achieved this in 2021 with a great deal of success, which will aid us in the expansion and consolidation of our mining businesses. We have the acquisition of Elizabeth Cement in Paraiba, our first step towards consolidating the cement business and after the acquisition of Holcim Lafarge. This is still subject to the approval by CADE. Now the truth is that we had a year of excellence, a year of 3 years in one, something that went way beyond our initial expectations, we will have a growth that is already given by the figures of growth of 70% and being quite conservative. And we still have the deleveraging of the company which was our main target for the last 3 years. We were able to deleverage to 0.5 net debt EBITDA ratio, which means much lower than has always been requested to us by the market. So this year of 2021 will remain in the history of CSN, in the history of all of us because we were truly able to deliver much more than what we had intended and much more than what we believe that we could deliver. And because of this, CSN is back in the game. So we have set ourselves aside presently with a different capital structure and with a very low indebtedness, accumulating a great deal of assets and with a very aggressive proposal for growth and always one step ahead when it comes to all of the concepts that govern our company. Speaking about 2022, we normally deliver a better year each year, year after year. And we are in the second year of success and enhancement quarter after quarter. And the intention is to do the same in 2022, and once again being quite conservative and realistic as well perhaps we will not have the explosion that we had in 2021 when it comes to growth. But doubtlessly, we will have a better year than the year 2021. We have always based ourselves on this. We have that quest to always deliver more than the previous year. And without a doubt, 2022 will not be different. We now go on to the second point that refers to industry point for point zero and innovation. I would like to underscore that we're in the fourth industrial revolution, a silent revolution in growth, revolution that has not been perceived in many of the sectors, especially the industrial sector, but it is here. It is present. It is very speedy. And for those who do not adapt to this in short periods of time, they will be out of the game. We had the first industrial revolution that was the steam era, the second fossil fuels, the third industrial revolution of the post war multinationals, and we are now undergoing the fourth industrial revolution. Formerly when we spoke about this, I would say this is very far away from the industry. It's something technological, virtual. It refers to sectors that are not active in primary industry or heavy industry, but this is not true. It is in full force. It is present in industry, in our industry and right under our noses. We are getting right before it. We are living day after day with it. And a very short example for you from the viewpoint of mining, which is a traditional industry. If you observe the evolution that we have had in terms of technological strength in the operation, it is truly incredible. The super modern trends that replace the off-road trucks that work with diesel and that are driven by human beings. Nowadays these builts will replace most of the work of the people, and they will stop being diesel. They will be electrified, and they will stop being driven by people to work based on telecommunication systems, which means a truly fantastic evolution, something that have not been foreseen and is already operational in some mines, and part of this equipment is already operating. As part of this, we can mention thousands of examples that could be allocated to the industry per se. So we truly count upon the industry, the modernization, the streamlining of industry, the preparation so that industry can become part of this fourth industrial revolution. And so that it can come out strengthened and very much alive from this present day moment. I think few have perceived and few are getting ready for this. However, without a doubt, in 2 or 3 years, those who have not gotten ready will be out of the game. I would now like to go on to speak about ESG and technology topics that we mentioned so often, and we're at a very strong crossroad in the company to transform concepts into practice. We would like to adopt and we truly believe in this adopt the ESG in practice. We have a significant advantage, which is our track record. Luckily enough up to present, we haven't had any environmental disaster, accident, nothing serious when it comes to the loss of lives or accidents that may have happened. Now as part of this, we are adapting to modern practices and technologies. This is the case of dry mining, and this means that we no longer have to have dams. Three years ago, we began this and we are pioneers in this and we are an example of this for all of Brazil. So from the viewpoint of the environment, we are working at both ends, not only attempting not to cause more harm to the environment, but instead trying to preserve it. We have 80,000 hectares that are under preservation, and we have a very ambitious plan to add 200,000 hectares more for preservation technically. And so that this can become a counterpart for what we will still have in terms of carbon emissions. We're working on this and reducing this very strongly, using all of the technology available from the viewpoint of the air as well as water, and whatever we can do, we will certainly be doing. Now ESG for us is a pillar. It's a goal in which we are all involved in the company. And as part of the governance and the social parts, we're working very strongly. We want to have a company that is at the forefront, a company that will be a benchmark for others and the reason of pride for Brazil. This is our priority and practice and ever more this concept is far, but practice is very close to what we do. Very soon, we're going to create a role of Chief Technology Officer and the company to make strides in terms of technology. This is something that we're working with. We're devoted to this, and it motivates us to have a company that will be geared towards something that is streamlined at the forefront, whether it is from the practical viewpoint or the viewpoint of human capital. We have to be a benchmark, not only a good company, but truly become a reference, a model in the sector. These are the 4 pillars that guide us, ESG and technology at present with other priorities, along with the care that we have with people and those who work with us. Now to go on to the fourth item, which is operational efficiency. We're working in terms of what we should be doing. The market sets the sales price and well, we can fight for the purchase price and for the cost of manufacturing. And as part of this we're adapting to a new reality, working with less people, with greater efficiency and, of course, ever more systems and technology. And that is why we need to have that position of a CTO, who will aid us in our search for technology, the most state-of-the-art technology for a company. We want a company that will be a model in terms of austerity. We fight for every penny. We are allocating investments in technology, technology that will provide us not only with products but also with a reduction in terms of our personnel as part of the red tape that we're surrounded with and whatever we can do in terms of evolution. And in our search for operational efficiency, we are putting in place when it comes to equipment, for example, we are investing to increase our capacity and we're working towards enhancing the quality. And we also want to increase our competitiveness in the steel industry. We're investing in centering and coking. These are our highest investments so that through this, we can have a better quality of cost reduction, and we can better work with the environmental part along with the centering, and with a cost reduction, we will have greater competitiveness. And through this competitiveness, of course, much greater efficiency. Low leveraging, which is the next point along with the 4 previous pillars, ESG, technology, the low leverage, these are our commitments. We come from a leverage to 5.8x to 0.6x net debt EBITDA, and we will continue to seek this low leverage. Our investments and all of our activities are based on this, and we truly respect this. And we have a greater commitment and as part of this commitment with the creation of each independent business, whether it is in mining or cement or the steel plants, we will have a currency that will enable us to have aggressive growth, whether this is in acquisitions or in mergers, using not the financial leverage, but our common currency for each of these businesses. We have business open in order to provide us and to leverage the opportunities that can exist in terms of acquisitions as also in new investments, but maintaining low leverage. This is something that was strongly demanded from us in the past 3 years by bondholders and shareholders in all the international trips that we carried out, and even within the domestic market. We have committed to fulfill this, and we delivered a leverage, which surprised everybody and still has not been understood by everybody. So this was such a -- because this was such a strong surprise, we are going to work on all of these levels, and we want to be ready to leverage all the opportunities in terms of market as well as greenfield investments and brownfield investments that will be carried out in the upcoming years. Now regarding geographic diversification, all of you are aware of our share in the domestic market with each one of our products. And we are always disputing first place or second place in the market and strongly committed to invest in Brazil. In terms of the domestic market, you can expect from CSN an aggressive attitude in order to gain market, and we believe that next year will not be as bad as most. As everybody believes, we believe that the end of the year will not be bad in terms of consumption. We have Christmas sales ahead of us, and we don't have a lot of products in inventory in the retail market. This way, we have a better end of the year and a very good beginning of the year. But we will be here, we will fight for the market. We will work aggressively, and we will support all of our distribution channels, and we will fully produce as we have always wanted. And this is the guidance that we have given to the company to work fully dilute fixed costs and to be aggressive in selling, improving our quality. Quality will differentiate us from here on and we will offer more quality, and we will also offer diversification of products, and we will meet the demands of the market diversification. We want to sell iron ore and steel per kilo and not by ton and to service customers and markets in a friendly fashion as always. A different thing will be the penetration in the foreign market, which is our priority now, not wavering or letting go of the domestic market, we will invest $3 billion in the next 3 years in terms of acquisition and in brown and greenfield projects abroad. Brownfield, I mean, to Germany. We have a plant in Germany, and we want to double its capacity. In Portugal, we also have a plant that we intend to double its capacity. In the U.S. that where we have a greenfield project, we are starting to launch it in March. And because we want to complement and convert this plant with Brazilian production, we believe that this is a need because of the size, and it is a priority because at the moment, we will also make the best of the opportunities that emerge in Brazil, but we will dedicate greater efforts and we will allocate people from our group in the international market. And as of March, we will work strongly on this expansion pursuant for these $3 billion in new assets abroad. This basically is our strategy. And this is a summary of what happened on 2021 and the strategy that will guide us towards the near future. I personally trust the company. I trust the people from the company. I trust the strong efforts that were carried out in the past 2 years to put us back in the game. Therefore, CSN today is more prepared than most of the Brazilian companies. We are strongly prepared to leverage the opportunities and advantages of the domestic market as well as having international presence. That is something that we want so that we can have more predictability and stability to our business and to our people. I would like to thank all of you for your attention. We will have a presentation. After the presentation, we will be available to answer your questions. And certainly, we will end this meeting even stronger.

Thank you, Benjamin, for your initial remarks and for showing the strategy of the company. We have a very interesting and complete agenda ahead of us. I would like to give the floor to our Sustainability Director, Helena Guerra, so she can present.

Well, good morning to everyone. In the next slide, we will show you our ESG journey. The results that we attained in 2021, our new commitments and how the company is structuring itself to achieve its targets in such a strategic agenda of the company. We will talk about the pillars of our ESG and how we define the strategy, is we created or materiality matrix, which created pillars. This is carried out by active listening through -- with over 2,000 people, investors, employees, communities, we map the most important themes for the company. This is part of the pillars of our strategy in order to achieve targets through innovative processes and shown to all our stakeholders through a transparent process. When we call about transparency, we have to see that. Historically, CSN was always a company that to walk the talk. We did more than what we would say, but we are doing much more. It is important for these rate -- for these rating agencies reflect our management ESG. Therefore, there were a number of initiatives among them. Here, we have ratings, international ratings. And there are other initiatives that convert so that we could end the year with the score much higher given by the rating agencies. Yesterday, CDP Clima, an important rating agency, and in 1.5 year from D, we went to be B. This was above the average of the sector in the world. And the same thing when we see the other rating agencies, this was something that we had to face, and we evolved a lot throughout 2021. And precisely to fulfill our agenda, we have new commitment. We have BRL 5 billion in investments in ESG projects after 2035. These investments are necessary to comply with the reduction of the emissions of greenhouse effect. We will invest in renewable energy, the reduction in water consumption, we will continue accelerating or we will increase female participation in the workforce. We have significant results, the expenses and foundation projects. The foundation is 60 years on with excellent results in 2021. We have also embraced a new area that would be territorial development that is responsible for the first formal human rights due diligence process in the company. And in terms of governance, we've created an ESG Committee, we've appointed ESG ambassadors, new governance policies. We reviewed our risk metrics to include ESG risks and climate risks according to the TCFD methodology. We have to also mention the climate challenge ahead of us. This is an important agenda. And this is not only a challenge of our company. It's a challenge for the planet and now we have our new targets to lower the emissions of greenhouse gas effect. We want to be carbon neutral until 2044. We want to reduce 30% in the middle of the way. CSN Mineracao is already the mining company that issues less CO2 per ton of iron or we are -- we are in the same range of the 5 big mining companies. Although most of the mining companies connect the intermediary rate to Scope 2, we are already 100% energy renewable. We adopted this 2 years ago in a proactive fashion. Our challenge is concentrated in the direct emissions of our operation. Our road map is based on 3 stages, 1 initial stage with investment in autonomous minings. And this is -- we have fleet electrification that will start next year the use of alternative fuels. In 2040, we will work with new technologies that are being developed, fuel cells with hydrogen and offsets in nature-based solutions to reach the desired neutralization in 2044. This doesn't end on Scope 2 or Phase 2. CSN Mineracao is strongly positioned in terms of strategy because in the upcoming years, we will have iron ore of best quality. It is necessary to -- for direct reduction, much more efficient when we use the blast furnace that will be part of the decarbonization strategy that already puts us one step ahead of other mining companies in the world. We went beyond and we doubled our target to reduce greenhouse gas effects and CO2 in our steel industry. And we were the first steel mill in Latin America to have such aggressive targets in terms of CO2 reduction. We doubled the target after a thorough efforts this year where we have tools of artificial intelligence, where we've mapped over 100 projects in different stages of maturity. We plotted them on this curve, and we were able to see which would be our road map to achieve 20% divided in 3 stages. We start the first stage with investments, continuity and operational efficiency will allow us achieve 10% in 2030, but we will be able to carry out new investments and new tests. We will use more charges, metallization of charge, biofuels, and we will achieve 10 additional -- 10% more. And as of this, we will be -- there are a number of technologies that are disrupted that are undergoing a test. Now with low TRL or scale, cost efficiency, they're not totally adapted to our process, but we are following them up closely even through investments that Felipe will mention, we are investing in hydrogen plants, we're investing in partnerships and capturing technologies and technologies that use carbon. In 2035, we want to be more mature. This target will always be updated year-on-year. According to the new technologies that emerge in terms of cement, we -- we have made progress for 2030. Now this is 2 -- 9 years before what was established. We are the most efficient in the issuance, in the emission of greenhouse gas effect in cement. And now with 20 years beforehand, we will reach these targets. We know how to do this, the use of more score, what is the residue processing, we use biomass, we you use technology. But through innovative technologies like we did in our Argos plant, where we used hydrogen to stabilize the blast furnaces and to have better performance and better management of CO2. This will be -- this will be transferred to another plants, and we are carrying out the analysis of new acquisitions to define a strategy, to find synergies and the carbonization options. We always want to be in the forefront. And to achieve these targets before what has been established for the sector, here, we have our figures in other matters, the use of natural resources, the use of water. We are highly efficient when we talk about this matter. In the last 2, 3 years, we were able to drop the consumption of water in 30% in Mineracao and 20% in steel production. Just for you to have an idea, this drop of 7% means this is equivalent of the consumption of a city with 70,000 people. These are important figures. This was achieved through a lot of investment, through a lot of studies. We were the first steel mill to establish our water footprint, and we have a complex study of our water footprint that measures how we use and how we waste water and also the risks that are associated to the water basins. And this shows us clearly and shows transparently where we could be more efficient in this process. We were able to improve our score in the CDP that was launched yesterday. We now are a minus B, but I believe that next year, we will be an A in terms of this. Biodiversity, as our Chairman mentioned, we have around 72,000 hectares of protected areas that will be added to the new areas in the coming year. We want to add 200,000 hectares in protected areas aligned with possible offsets in solutions based on nature for our carbon agenda. Now we also -- throughout the CEO certification, 6 plants were certified and 14,001 and 9,001. These are 6 new units that were certified and are in our quality. Now we continue the 2 dams have been concluded, 4 dams are under construction, and in 2026 all our dams will be decharacterized with the exception of Casa de Pedra, though there is no legal obligation to discontinue this dam. We will do this, and we expect to conclude Casa de Pedra in 2033. We have a dedicated team that is devoted to the topic of dams, implementing the best international practices, internal and external audits, which means to say management very close to the dam and what is more important. We have a background of no accidents with dams in the company, all of the CSN and mining dams have been classified at 0 emergency level. Briefly, very quickly here in terms of circular economy and how we have made this part of our DNA, all of the goal set, both for the year 2021 have been complied with, sending material to landfills. 100% of our metal scraps are reutilized what we use in the blast furnace is also utilized. We recover 90% of what we use, generating new materials and revenues for the company. Very quickly a little about our statistics in terms of operating security. This brilliant year would not have been as brilliant had we not taken care of our personnel. It was the best year in our historical series in terms of the accident rate. The reported accidents was reduced 3.5% vis-a-vis the year 2020, and this represents 20% reduction since 2019. We also have a reduction in the seriousness of accidents in CSN Mining and in the CSN Group as a whole of 20% reduction in the gravity of accidents. And we are leaders in this virtuous cycle that also leads us to operational efficiency, and this is done through our leadership, through the programs that we have put in place and with the substantial help of CSN, bringing technology and something that is more streamlined. We have a much more diverse CSN at the end of the year. We began the year with 14% of women. We now have 18%. This is an increase of 35%, aligned with our goal of getting to 28% of representativity of females in our company until 2035. We also have gender diversity and ethnic diversity. 50% of our team represents the black race, 30% are in roles of leadership. We have had an exponential growth in the number of people in our company, and we have been awarded for diversity during this year. And we are part of associations where we share common goals. It's not only the CSN agenda, ESG is a shared agenda for the benefit of the planet. And I am convinced that the coming year, I will be here delivering that goal of 28% 3 years before what we had planned. Very quickly to speak about the CSN Foundation that is celebrating 60 years. And this year, we had a record of investments from BRL 52 million to BRL 110 million invested almost twofold number of cities that have been benefited, 19 to 31 cities that have been benefited much more work vis-a-vis last year, an increase in the number of young people. We have dozens of projects at the foundation, and I invite all of you to visit our site. These are projects that have transformed the life of many people during the 60 years of the foundation. The foundation along with the new ESG Nucleus will draft our theory for change. We have the first formal due diligence in human rights. We base ourselves on the formal of principles of UN. And it is important to gain a deeper knowledge and learn about the problems that we are working with. Finally, as part of the best governance practices, we created an ESG Committee linked to the Board of Management. We have appointed 26 ambassadors that will multiply this agenda throughout the company. And of course, all of this relates to the matrix and the material that I presented in my presentation, the ESG risk, climate risk, best practices, women on the Board of CSN Mining. We have 8 women in total, new policies, training and compliance. Well, I could speak about this until tomorrow, but I will now give the floor to Felipe Steinbruch, the Head of ESG Inova (sic)[ CSN Inova ]. Thank you.

Good morning to all of you. It is a pleasure to be here with you. Thank you, Helena. We would like to share with you the main events of CSN Inova in 2021 and speak about our initiatives in innovation and technology for the rest of the group. CSN Inova was created at the end of 2018 with 2 main goals. The first to be able to leverage all of the innovation strategies that were part of the CSN Group. And secondly, to position the growth strategically within the innovation system. Throughout these 3 years, we have consolidated our work. We had 2 very interest insights throughout these 3 years. The first was to be able to leverage all of the challenges of CSN Inova and these 4 topics, operational sustainability, the corporate essence, advanced material. And the second insight, perhaps more important is to be able to create a cross-cutting for innovation through the use of 4 tools that are part of the CSN Inova innovation platform. We have the part for the mapping of internal challenges and active search for solutions in the global innovation ecosystem, bringing these systems in-house, always putting them into practice through pilots and a very speedy weight. When I refer to expeditiousness, the ideas for these projects not to extend for more than 6 months. Now this open innovation methodology customized by CSN Inova is being implemented by several of the group areas and all of this with the aim of expediting our daily work in the group. The second tool is Inova ventures. We make investments with minority participations in the innovation ecosystem and start-ups, with the goal of generating shared value, creating value for the group for entrepreneurs and for co-investors. The third pillar of CSN Inova is Inova bridge that works with the integrated management with the ESG committee uses all of the initiatives that arise from the thematic groups, convey these initiatives to open innovation. And they are also responsible for the innovation communication strategy and ESG communication strategy. And the last tool for CSN Inova is Inova tech responsible for the decarbonization journey and technological changes. When you ask about the next 30 years in cement, energy or mining through coming closer with state-of-the-art academic technology, we would like to be part of whatever is happening in terms of trends. As I mentioned previously, we do have these 4 pillars or thematic areas. And these challenges presently represent the great ambitions of the CSN Group. Inova nowadays results, the group problems, basically, this what we do. Now when we speak about a 20% reduction of utilities in fossil fuels, this is a challenge given to us by the Chairman, we began with CSN Inova in 2018, and we have built other challenges that are part of these thematic areas. We attempt to understand the main ambitions of the going forward and bring this into the presence, so that CSN Inova can work on this. To offer you an example of this flow, here, we have the thematic areas that end up in challenges, which once again become initiatives in our day-to-day work. And because of time, of course, I will not be able to expand very much on this. When we speak about the first pillar, operational sustainability and a reduction of 20% in utilities with fossil fuels, this was created jointly with the group. At the top, we see hydrogen as a stabilizer of combustion. Inova Open with its open innovation process, sought out a solution. We found a Portuguese company. We brought the start-up into our cement company and through a hydrolysis process, this startup injects minor amounts of hydrogen in the combustion of our cement furnaces to be able to stabilize the flame, ensuring that the efficiency of our equipment will be optimized permanently, and that we will have an enhancement in the product. And all of this, of course, ends up in a need for lower consumption of utilities and fuels. In the same thematic area and with the same challenge, another tool of Inova, Inova Ventures has invested in a hydrogen startup, a startup that builds components for the production of hydrogen, a scale production, we have already invested in this company. And what is different is that we're leading horizon 1. We have an initiative generating results in the group, and we're now moving towards an initiative that is horizon 3, that is transformational, and we'll use other tools from Inova, but all of this is part of the day-to-day work of CSN Inova. Another important part, since the beginning, we were proved by the Chairman. Since the conception of CSN Inova, we have sought out new ways of doing business and working with funding in 2020 through an innovation line from FINEP, we will able to fund the years 2022 and 2023 for Inova. All of the investments made in 2021 and 2021 are based on this FINEP funding line, which means that we're scaling up based on the same strategy and the goals going forward. Perhaps the core message of this slide is that the innovation process of Inova and the group, well, 60% to 70% of our initiatives are based on the CSN core. When we speak about innovation, we use innovation to resolve the present-day problems of the group. This doesn't mean that we stop being disruptive or ambitious. As I mentioned, we already have projects for adjacent markets, for whatever will be transformational, we are looking towards horizon 2 and horizon 3. We do like to underscore that when we created Inova, it was created on the basis of the essence of CSN. And what we're doing presently is helping the group to do good, to do more so that we can do this for the long run. We have made great strides in our venture capital fund. Last year, we had just set up the fund, the CSN is the only OP presently, and I would like to the mention evolution during this year. In the second semester of 2020, we work with benchmarking process with innovation hub and other companies that work very robustly. We spoke with the directors at CSN, they participated wholly in this process. And this enabled us to get to 4 pieces: Industry 4.0 and others and 20% of this BRL 100 million were earmarked to invest in an adjacent business. We're going to analyze an entrepreneur team, the solution they are setting forth and the problem they're attempting to resolve. We don't necessarily have to have synergy with CSN. In the first semester of 2021, we had BRL 30 million of capital invested. Now venture capital as a strategy in the group, it is a reality. We understood that the market was full of opportunities. And because of this, we enhance this capital to BRL 100 million. Throughout 2021, the team worked with more than 500 mappings, 500 start-ups. We held conversations with these players, and we have a very objective strategy, although we look at entrepreneurs globally, the focus, and this was mentioned by the Chairman as a Brazilian company, what we want to do is reinforce the Brazilian ecosystem, a lot of Brazilian entrepreneurs to result day-to-day problems of Brazilian industry. As I mentioned, we have a minority participation. This is a responsible way to begin. But of course, we continue to be aggressive. We're investing in seed and series A to a maximum of $200 million. The goal of the fund is to generate value, jointly generate value for the group, generate value for entrepreneurs as well as for coinvestors. Here, you see a snapshot of the fund presently. We have 5 companies in the portfolio. These are the investments made during 2021. We have decided to include our thesis and the 5 investments for refer to the core thesis. And we have an investment in the adjacent thesis, the solution of problems through entrepreneurs. We have 2D, a company that focuses on the production of applications in advanced materials. We have created a small graph in cell at a research center. We have 2 pilots underway, one focused on oil, the other focused on resin. The resin is applied on the finished products from the steel industry. Through this survey, these products should have greater resistance to increase their life span and to comply with the expectations of our customers. It's a way of working in that theme of advanced material incrementally. Additionally to this, 2DM was founded by 2 Brazilians at the National University of Singapore. It was a spin-off, it also part anticipate our day to day. These 2 pilots are being carried out by 2DM and by our team, research team at UVP. And 2DM and their adviser Board has a Russian scientists who won a Nobel prize for having been the first scientist that was able to synthesize graphene. So this is a thesis with synergy, and we're already carrying out 2 pilots with this startup. To go on to the next start, a trident, this is a tech company with a platform and in a very humanized way, they do offer credit for agriculture. In Brazil, this tends to be very informal. Now the way that this credit is being offered, the solution that they have, the problem they're attempting to resolve and a team of entrepreneurs is perfect and will enable us to have scale in that sector. And that is why we truly believe in the development of trident. We're always very much attuned to that first challenge that I mentioned, the reduction of 20% in the consumption of utilities and fossil fuels. We have 5 initiatives in CSN based on a complementary use of hydrogen, but we do have additional initiatives in the group. And first, energy one is going to help us in this in the production of green hydrogen so that we can replace or eliminate fossil fuels, whichever the case may be. So we're on a good path when it comes to this road map. [ Oiko ] is a B2B work for civil construction, and we're working with the expansion and digitization of the CSN portfolio with a focus on civil construction. Presently, we're selling the CSN products in the [ Oiko ] platform. And [ Oiko ] represents how a synergy operates and makes a great deal of sense. And additionally, we have been able to offer this solution to the CSM chain. And the last investment made in 2021 was in Clark, a digital manager of energy. The focus here -- as part of the goals that I have shared with you is to generate value for the CSN chain. The idea, therefore, is through the Clark platform to help the CSN suppliers and the clients of CSN to migrate to the free energy market. The last point that I would like to mention, the Chairman always demands a great deal from us, the ESG Committee also has their demands that we should do our very best and be aggressive. To be the best, we have to be among the best. What we have attempted to do here is to bring some of the top tier co-investors that have a very representative track record. The idea is not only to have an ambitious plan, but to also be close to the best of the best, so that in the near future, we can also be 1 of one best. And beyond CSN Inova, the group is celebrating its 80th birthday, the research center celebrating at 70 years of tradition in research and innovation. Here, we have a snapshot of other initiatives that are taking place within the CSN Group outside of the Inova una universe for work hand in hand. The target of Inova was to drive initiatives that have existed here for the past 80 years. So throughout 2021, all of these initiatives were carried out. And it's important to highlight that everything was done in 1 year, 20 new types of steel development, 95 new types of steel and development over BRL 25 million in investment. We are commissioning a pilot plan to produce ecological blocks based on residues. The main residue that we're analyzing, it would be the slug of our plant. So if this project is successful, it will be excellent. In addition, we have 17 labs within our group structure, and we also have the most modern thermal mechanical simulator of steelmaking processes of Latin America. These are initiatives of 2021 in terms of research. The graphene cell is here, as I mentioned. And very briefly, in order to strengthen that innovation is in the DNA of the group. And it is part of the group's tradition. We have a number of projects from the main segments of CSN. So in mining, the developing of autonomous mine and electrifying field steel, laser welding technology and the pickling to produce advanced steel and cement, we alternative raw material and circular economy. Thank you very much. And now Pedro Oliva has the floor, our CFO from CMIN.

Thank you, Felipe. First and foremost, I would like to thank everybody for participating in the CSN Day. I will show the market outlook for next year. This is a balanced market with steel production in China that is stable because of the reduction of the restructuring of the steel production from -- because of the Winter Olympics and also a drop on concentrate in China. That will be BRL 10 million in 2022. This year, this week new measures were announced like the compulsory deposits that will provide a liquidity of $180 billion. And together with this, the announcement of the stabilization of the real estate development market in China and the encouragement of selling popular housing subsidized by the government. Now that we have the -- there is an exit of low-grade iron in India and Brazil, will we cover a number of operational plants that had shut down. With this, we see a price between $100 and $120 per ton. And now regarding sea freight, which is an important cost when we're going to see the iron ore product in China. We believe that this cost will drop our C3 route is $29.6 The expectation of the market is for this to drop to $23 next year, supported by 2 factors. Number one would be the increase of capsid ship supply by 4% and an increase by 1% in iron ore transactions, the transoceanic now also ship waiting time in China, and that was 5 days during the second semester of this year. And this already dropped 4 day and the first pick is for it to go back to normal next year. That would be around 2 days that it's normal when you analyze a long historic series. Now CSN Mining will strongly focus to improve the quality of its products next year. We are undergoing a moment where the discounts because of silicon aluminum contaminants are above the historic level in silica, the discount is $5 when you compare it to an average of $1.7 in the past 5 years. And for [indiscernible] presents the necessary quality and allows us to be flexible and to improve the quality of our products. Next year, we expect an improvement of 0.5% in the amount of iron with higher price in dollars and a drop of 0.6% in the silicon aluminum contaminants that will increase the price to $3.5. If we combine both effects, we have $4, $5 -- $4.5 applied next year between 31 million tons, 34 million tons. And we will have an additional result of BRL 1 billion for the company when we see the mid run when we act with the implementation of all of our projects to produce pellet feed. In the tab right, we will have the best product with the best quality amongst are the biggest 5 players of the industry and our global peers. Helena mentioned that CMIN is already the company with lower emissions in Scope 1 and 2 with exceptional quantity and the best amongst all our global peers. We have a promising road in order for good reduction on Scope 3. Now regarding cost perspectives, this group is disciplined, and we have a culture of austerity. We want to -- we are doing everything with SG&A. We want to dilute fixed costs and also to increase the capacity of our trucks and to improve our residues were the implementation in stage use, digitizing and using machine learning in order to optimize. [Technical Difficulty] We are back. We had a slight technical problem. I apologize for those that were following us. We had a power problem. Regarding the CFR China cost when we compare the current cost with next year's cost, there will be a drop of 15%, $6 in freight costs and $1 in the C1 cost of production. This -- because of the number of initiatives that I mentioned despite the inflation pressure that we're undergoing in Brazil. And in this global sector regarding the mid, long-term impact we will continue diluting fixed costs and increasing our production, the introduction of conveyor birds for Rome and tailings. Well, this is something that we have a road map and also regarding the adoption of the autonomous mining fleet size increase, this is important for the mine cost and fleet electrification with -- and then we want to adopt other fuels that are non-diesel to reduce emissions and to continue our digitizing and machine learning in order to automate our Phase 2 plants. Well, in the next slide, you have the perspective of increase of production from 39 to 41 million tons. It is important to highlight the mix improvement because the expectation is to reduce the iron ore from third parties and to increase our own production, where we will have better margins regarding sole product. Now evolution of costs one from $19 to $18 and the result, we have delivered record results from the revenue point of view and from the EBITDA that was BRL 12.6 billion in the last month. Here, we have an update of our CapEx of our projects in Stage 1, the review of the -- of our schedule depends on the supply chain. There was a CapEx 10 years ago, we demobilized this capacity in terms of engineering and our partner companies with production below what was expected. There was the impact of COVID, but there is something that we want to mention that is disciplined and project optimization in the review process, we achieved significant improvements. We recovered residues in periods that is 3 tons for 2023. We were able to improve the quality of the profit from 62.4% to 64.4% in terms of iron, now also we went 66% to 65.9%. We -- to be able to have an improvement in project to improve the quality of the project is important in order to reduce our breakeven of this product in China. P4, a 4 million ton project, we changed the process road that will allow this project to run not only for 11 years as expected, but this will be a project for life of mine and they will run for over 35 years. Now in the first stage, we will have a total CapEx of BRL 12 billion with the increase of capacity of 33.4 million tons, and it will be executed between 2020 to and 2026. Now in the next slide, we present the ramp-up curve updating with the new time line of the project production volume and purchase from third parties and on the side. We highlight in this chart the changing of CMIN from a position and a volume of 39 to 41 to 160 million tons. And this company is amongst the 5 greatest producers of iron ore in the world with the best quality. We already present the best emissions of CO2 stage 1 and 2, therefore, that this will launch the company and we will have an excellent position for excellent strategies and partnerships and interesting global M&As. Now I will end talking about capital allocation and how we will maintain the strategy that is combining growth with an aggressive dividend policy. Today, we have a net debt of minus 4 points. We are net cash, our balance is a sound balance. We have this -- we have good access to funding with growth with long-term debt and competitive prices. Good examples of this year would be funding of $350 million backed by next and the debentures in order to support the expansion of the $44 to $45. Operating cash will continue supporting our dividend policy, which is a distribution between 80% and 100% of the net income. With this, I conclude my slides. Then at the end of the presentation, we will have a Q&A session. If you would like more information regarding the mining sector. Now I will give the floor to Martinez.

Thank you very much, Pedro. Once again, it's a pleasure to be with you. Good morning to everybody. And 80 years, I've been here for 20 years, perhaps. This the happiest CSN Day in the past 20 years. Now I will start talking about steel in the global market, a year to celebrate in the past 2 years, everybody observed what happened mainly in China, practically the price doubled in the past 2 years. And now very recently, in the past days, the compulsory of the banks was removed, the steel plants in China totaled a target of emissions and the target of environment. Another important point and important for the Chinese economy, all the steel plants present significant results in terms of EBITDA. And this is also something important and the government and the enterprises that are independent we're pursuing. In addition to this, we -- they continue focusing on environment and incentives for exports are lower. So regarding China, despite everybody is pessimistic, what we have realized because of the people that were there is that there is a strong opportunity to recover the demand the provinces are talking about restructuring and building. And this for the steel industry is very important. And there is another point when we talk about China, that is employability that there is a number of people that have to work and the government has to employ these people. For us, the scenario in 2022 is a positive scenario. The prices have been slightly corrected, but I believe that they will remain at a historic level that is above what we've seen last year. In the U.S., it's just happiness because metal with hot coil are $700, now it's $2,000. This has never happened. Regarding hot coil, we have an investment in the infrastructure of $1.3 trillion. There are segments from the American market, the steel market that demand more steel production, like, for example, metallic sheets, we can export more steel, more metallic sheets because the U.S. imports, % of the metallic sheets. And now in January, there is a strong possibility to review the quotas of the United State. Brazil has 3.5 million tons and opportunity to increase this quota. And in the case of CSN, we want to increase the quota of 10 play that is a product of high added value for CSN. And another important point from another country that is Russia, which also exported a lot of material to Brazil. All today of Russia are higher than China. We're talking about $890 or $900. Because of the projects -- Russian projects that this capacity will be geared toward the domestic market. So we work with supply and demand. This has been favorable in the last 2 years. We hope it will continue to be favorable in 2022, a high exchange rate also enabling us to maintain the price in Brazil or even increase prices because of the cost increase, especially in coal. Another important point besides supply and demand, we do have a capacity in the Brazilian market, that is late antenna companies. In the last 30 days, I have visited at least 50 clients, and nobody will put in their budget a negative growth. None of the companies have said to me, we're going to grow less than next year or face stagnation all without exception with greater or lesser emphasis. We'll be working with a growth forecast for the coming year. Now if look at the most important data when it comes to the resumption of economic activities, we have returned to the levels of 2010. This does not appear in the graph. And in 2010, imports represented 3% of the market. We can already state that in terms of domestic sales, 2021 was the best year of our history. And this year, if we look at the import penetration, it reached 15%. The same reasoning is also valid for the flat steel and long steel sector with different specificities, of course. In civil construction, it was somewhat higher, somewhat greater because of infrastructure. And in flat steel, something connected to the agri business and industry and civil construction as well. Our forecast for the coming years, 0.25% to 6% growth in flat and long steel. It's worthwhile mentioning perhaps my excursion to all of the sectors during this last month. Basically, we have trucks, the buses and agricultural machinery to see what is happening. To buy a truck, the delivery will take 6 months. The yellow line full because of the growth of the agricultural industry in Brazil, and the same applies to agricultural machinery. As Benjamin says, this is a given sector. We have a carryover of orders that will through the first semester. Automobiles without great novelties, we have trucks with a problem with semiconductors, we will still have a scarcity of semiconductors during the first semester. And because of the inventory level in the network of 18 days, we could be able to grow the coming year. And in other sectors that are linked to consumption and civil construction, the growth this year has been so robust that we can take steps in 2022. The white line with a projection of about 5%. In the consumers, Waller share we're competing with other goods that perhaps they may need more such as food and other consumption goods. To summarize, the outlook for the domestic market is highly positive for 2022. Now to speak about our commercial strategy, and I have made changes in the last 5 years. Marcelo says strong for longer. This is a strategy that I deem to be a winning one. First because we don't put all of our eggs in the same basket. To the right, you can see an extremely diversified market in all sectors. We have made some changes this year. This doesn't mean that I want to have spot sales. I want to have greater freedom to work with price changes for those sectors who don't require a contract or a better price forecast. In terms of clients, we have reached 4,000 clients in flat steel. This is highly relevant. We had never attained that level. It's also very important to sell less to more and not the opposite. And our share in the domestic market is 85%, going strong, especially in the white line industry and civil construction and distribution sectors. In packaging, we have made bets in replacement with other products. And in the coming years, Milton will speak to you about our manufacturing strategy and explain to you how to grow in added value and quality. Not less important, something mentioned by Benjamin, this year, we haven't lost a single opportunity of exporting. What we truly want is to take place in the markets that we have chosen as a local player. In the United States, we combined with our quota. We sent all of the BQ to Portugal, maximizing the deliveries. Portugal worked with historical records and results. They have a full market. Now everything has worked out in the foreign markets that we have selected. This enables us to be bolder and work with even more gearing investment lines in the coming years. Now Milton will speak about the full production, but adjusted for a maximum added value. Even with small companies, we will seek that added value even if it makes what we produce yesterday, absolute coated products, 50% and can't increase more because it's not possible. And I will speak about investments that will be increased in the coming years, a partnership with key customers as we did with Panatlantica 10 years ago, a share participation. We're working with long-term entrepreneurial projects so that in the domestic market, our sales will be reasonably hedged with a certain number of clients that are well known by CSN to avoid variations in terms of market oscillations. And here, just speak about our performance highlights. I'm not being pedantic, but we're speaking about records. Net revenue for flat steel, reaching BRL 30 billion without a doubt, EBITDA of 10 -- EBITDA BRL 10 billion and EBITDA in dollars per ton for the third has already reached $550 million. There will be a correction now in the third quarter, but for the coming year, margins will be around $400, $450. Now to culminate everything, our sales plan for 2022, with full production with maximum added value, 1,300 million of galvanized, 300,000 of tinplate, 3.5 million in the domestic market and 11% or 12% already focused on international markets, which includes tinplate for Latin America. Now this was also mentioned by Benjamin, as part of how we can invest with discipline in capital. The $3 billion we have earmarked for growth. We have a very strong plan in the United States. This year was spectacular. In the U.S.A., the EBITDA will be $48 million, an expressive figure. And these businesses, United States, Germany and Portugal already represent between 15% and 20% of our EBITDA -- consolidated EBITDA for CSN. So this has responded, and we're dealing very carefully with this. In the U.S., our intention is to create a revival in flat steel. We have a greenfield project of once again becoming leaders in the region. We were working with prepainted material with an aggressive project and to increase growth in infrastructure, which will grow in the United States doubtlessly. We're assessing through an advanced study that will end in the first quarter, a mini mill for long steel in the U.S. We have the location, investment and suppliers, which means we're ready to begin working in the U.S.A. In Germany, we have a highly successful company with a high added value product that accompanies the evolution of Europe and not the southern regions such as Czechoslovakia and other countries where we are able supply material for infrastructure and material for industry. So here, we will be working to enhance our product niche in civil construction in [ Durga ], Germany. In Lusosider, as mentioned by Benjamin, we are leaders in the [indiscernible] peninsula, Portugal and Spain. There's a scarcity of steel and the idea is to increase the plant twofold. We have room to put in a new line in Portugal, and we will begin delivering 800,000 tons in the coming 2 years. And for Brazil, some interesting actions happening in long steel. For 2 or 3 years, we have always produced 220,000 tons. This year, closer to the last quarter, we will conclude the revamp that our equipment supplier will conclude, and we will end up with a capacity of 350,000, 360,000 tons of long steel for the coming year. Of course, this will increase our profitability in that sector. Long steel, although it is a small business for CSN, it represented BRL 300 million of EBITDA in Brazil, and this is a sector that I refer to frequently. We have some cases that we can present. Besides the presentation made by Milton for an increase in capacity, we have acquired the [indiscernible], enabling us to have a faster replacement of other materials for steel. We're going to initially double the production of this metal industry, and we're going to use steel in the package mix of clients. And of course, we don't want to miss out on this moment. And in the branch of packaging, we will have a strong expansion in the field of chemicals. We had led this aside, but we're working with a new plan, streamlining to work with the cans and lubrifier sector. Very importantly, in Brazil, besides the long-term entrepreneur partnerships with clients, we're approving a new galvanizing line 99% perhaps will enable us to produce zinc and aluminum, or zinc or magnesium. Once again, another possibility to service different segments and the expansion prepainted products in our Parana line that presently is extremely full, and we have a line of prepainted products coming into Brazil through imports, the idea is to replace the imports with local production. Thank you very much once more. We're extremely excited with what is happening. This is a highly precocious moment, and we're working at full speed. I will give the floor to Milton, who will speak about manufacturing and the new projects. Thank you very much.

Good morning to all of you. Thank you for joining us. At the end of 2020 and the last quarter, the steel production took up a pace that we had not had for 4 years, We had to upgrade the pace of steel and this had an impact on our commercial activities. And this happened in 2021, we will end the year with more than 4 billion tons, something that had not happened since 2016. Our investments are very focused. We eliminate operational bottlenecks so that we can obtain new volumes. And as we say in steel, what is important is cost and volume. They advance hand in hand. We have already begun for the first quarter of 2021, repair of the new coke batteries, so that in 2026, we can be self-sufficient, have better cost and competitiveness. Tinplate, we're resuming our production. We will have 800 million tons -- I'm sorry, presently, we're at 650,000. We will get to 800,000 with a significant increase, and we have great sustainability in terms of tinplate. Our BQ will go through a revamp through an automation system and a plate blast firmness and a hydraulic coil. And all of this will enable us to begin changing everything beginning in 2026, the reform of our blast furnaces, the streamlining and the extension of the lifespan of our blast furnaces and then the improvement in the quality of center, and this will have an impact on the entire production chain. Very well, this is our outlook, and this is how we're going to proceed in the next 5 years. This year, we break the barrier of 4 million tons. And here, in the chart, you can see our graph increases. When we get to 2024, we're going to have to stop the blast furnace, too. We will have a small valley, but an increase until 2026. We have the new coke batteries, the reform and the centering that are being processed intensely. And as a consequence of this, there will be a reduction in our cost of $502 that will go to $402, a reduction of $100 per ton. This has always been the benchmark, and we will go back to it. In 5 years, we will reach BRL 6.3 million of investment. One, BRL 250 million per year; two, comply with all of these challenges. What is fundamental is to continuously service the market based on our values, which are service, volume, cost and on-time deliveries. Well, quality is something intrinsic. We never have non-quality. We have to have good quality. We do have quality and we have a strong presence in this segment. Thank you very much. Martinez or Edvaldo if you would like to complement my comments.

I'm back here to speak to you about cement. And of course, cement is another island of excellence that we have at CSN. And I'm very fortunate to have participated in this story. This is a clear example of what has happened with CSN in the last few years. We began small in Volta Redonda through acquisitions and a growth plan. We have changed this. So it's a time to celebrate what happened this year. In the cement market, the news is very positive. We went through a market period that was very difficult from 215 to 220. And from then onwards, Brazil had a recovery because of construction, self-construction, real estate launches and a very tiny beginning of growth in infrastructure. Because of all of this, this year, the market should be 65 million tons. This is an important market with growth, and we have a historical growth of 7% or 7.8% year-on-year. Now where does this growth come from? And why do we imagine this market will continue on. Recently, we carried out a study with the Brain Consultancy that is very representative in real estate and the developers' market. And we carried out a detailed analysis of how far we can grow in 2020. If we look at this, growth comes from the light residential sector, what we call self-construction and refurbishment. 2.2% of the growth came from this sector and 1.9% from the structured residential launches, construction with carryover, and this contributed to growth and a very timid growth of infrastructure. What will happen going forward is already happening in terms of the structured residential sector. In Sao Paulo, we had a growth of 60%. In the number of launches we should have a growth in structured residential with large developments and what we call self-construction, minor construction and refurbishment continue and become important. And the cherry on the icing which seem to begin to appear in the market with greater strength will be infrastructure. And there is still to do an infrastructure. We are lagging behind in the ranking of infrastructure in comparison to other countries. We have concessions, rail work, sanitation framework, 5G, natural gas. So with this infrastructure market, certainly, in the upcoming years, we will serve this good wave of growth in the infrastructure and not least important in the real estate market, although the pessimistic says that this is not a booming market. This is a lot, because this market needs funding, although there has been an important change in the interest rates, what is important is what you can put in the wallet share of the -- whoever is financing you see between 2016 and 2021. This went from BRL 46 million to BRL 200 million -- BRL 200 billion in fundings through savings accounts. And in addition, the housing deficit that we have in Brazil of 8 million is stronger in the Northeastern region. We have a positive scenario for the cement industry or sector. When we see demand and prices with facts and data, we can visualize better what is happening. Number one, SNIC recently published the capacity of the sector that is [ 94 ]. When we see what is actually effective, it drops to [ 90 ], and when we analyzed in depth and the mean details, what is competitive I mean what is BRL 140, BRL 150 per ton of cost of manufacturing, we have BRL 78 million tons. Today, if you realize a number of regions in Brazil already have a big gap between what is effective and competitive. What is sustained, what has been sustained in the past years. And in the past 8 months is the price recovery in Southeast regions, something that we haven't seen in the past years, and we believe that this will continue grower, growing from here up because there is a closer -- there is a close -- there's more supply and demand in infrastructure projects. There is a historic series that shows that the market has always worked with the capacity of 75%. So what happened? We had peaks in 2014 because of the Olympic Games and the World Cup that was too close. We also realize what happened with the market with the slight fluctuations. Now last year, the market underwent -- it wasn't, but they were in a crisis of supplies. These were crisis because of lack of planning. These were bottlenecks, but we resolved this. And I believe that we will reach the total capacity of the sector, which justifies to continue increasing the prices especially in the Southeast region and to expect growth to become long-lasting regarding 5.3% and 6% and in the upcoming 10 years, which is a study that we concluded recently. We have good news for cement and Edvaldo will talk about our manufacturing strategy, acquisitions and market occupancy.

Thank you, Martinez. Martinez spoke about the market, and now I will talk a little bit about our current operations. I will talk about the M&As that were recently carried out and the avenue of organic growth ahead of us. In terms of our current operations, CSN's platform for cement that today is located in the Southeast and expanding to the Northeast is the most competitive platform in the sector. Amongst the main drivers that can define the competitiveness in cost and sustainability of the sector, CSN is a bench or the clinker factor because of the use of sludge. We have the best clinker factors in Brazil. The electric consumption and thermal power consumption, which strongly define the cost position of cement. We already total today what the sector defined as a target in 2050. So in 2021, we are already doing what the sector expects to achieve in 2050. And this competitiveness that we have allows us to grow more than the market. In the past years, while Brazil grew 2% a year, CSN cements grew 9%, totaling 15% of market share in the Southeast region and another consequence of our competitiveness would be our financial results where despite the crisis, which was strong and many companies operated on the red, we always have presented positive EBITDAs. And in 2020, with the improvement of the market, we totaled 32% of EBITDA margin in the last 12%, a fantastic growth, totaling 41% of margin and over BRL 500 million of generated EBITDA. That is the best EBITDA margin in the sector. Now speaking of our M&As, the year of 2021 has been transforming year for CSN cements. We started as #6 and we were #5 as the greatest cement producer amongst the greatest cement producers in Brazil, acquiring Elizabeth, and we also bought Lafarge. Once the process is approved by the antitrust agency, now we're the second biggest cement producer with active capacity of production. So from 4.6 million tons and going to 16 million tons, therefore, we are tripling our capacity, strengthening our position, our strategic position in the Southeast region, which represents 41% of the Brazilian consumption, but we also participate in the Northeast and the Center West region. This is a relevant quantum that we are observing in CSN cement in 2021. Now speaking of the acquisitions, Elizabeth is a cement producer, cement plant in Paraiba, close to the second most important market of the Northeast that is Pernambuco from Brazil. It's a plant that became operational in 2015. With 1.3 million tons of capacities, this is a new modern plant and with competitive costs in terms of structure and with reserve and abundance of limestone, we took over Elizabeth as of September 1. Now we're capturing the synergies that we projected. We expect to grow, add by 60%, and one part has been captured in the short period of time, and the other part will be captured in the next month. These are positioning actions, these are commercial policies, what Martinez mentioned, that is to sell less to many. We want to disseminate our customers to have an excellent operation and gains of SG&A. So we expect a growth of 60% in Elizabeth's EBITDA in the mid-run. And now the transformational acquisition that is LafargeHolcim is the third biggest player in Brazil with 10 cement plants, 5 integrated plants located in the Southeast and in the Northeast and in the center in the Midwest. And LafargeHolcim also gives us new business, something that will complement our portfolio that are the aggregate business and concrete business that were a business that we didn't have up until the date. Now this process is being analyzed by the antitrust agency. We believe that until the third quarter of 2022, we will receive the approval of the antitrust agency, and we will integrate LafargeHolcim. We are planning this integration. We're focusing on it. In our due diligence, we identified a number of synergies that we could capture. In our current assessment, we are more optimistic than what I'm showing right now. There are even greater synergies here. Now the synergies will need an adjustment of product mix. LafargeHolcim has a strong concentration in the technical segment, which is very important. And we will also privilege, but we also want to focus on high construction. They're important synergies in the distribution of our products. And there, we will have synergies in the cut of cost of power. So we expect to grow by 80% in our EBITDA in our platform, LafargeHolcim, as soon as we initiate our operation after the approval of the antitrust agency. And at last, Martinez also showed us that the market has been growing, totaling capacity and idleness of 75% of the market. This is different per region. Brazil is very big. But throughout all of these years, we have strongly focused on the options of organic growth and we have limestone reservations of high quality and quantity properly located very close to the import market. And within our pipeline, we have 4 projects that will be executed as the market grows. So we have the Pará project of 2 million tonnes, Ceará of 2 million tonnes as well, the Northeast project with 3 million and the Southern project with 3 million. These are plants of great capacity and scale according to what the market allows. And they complement the footprint that we will have with Lafarge and Elizabeth. We have abundant limestone reservations that are certified. Most of the equipment have been bought. All of this equipment was manufactured and delivered. They were stored in the Antwerp Port. And last month, we received all the equipment in Brazil. They're already in the Itaguaí Port, ready to be shipped to the project as soon as it makes sense. These are competitive projects in terms of CapEx per tonne because we have a great amount of our equipment acquired, and this is a reference of cash cost in the regions where we perform. Now CSN in the future will total 26 million tonnes with this organic growth and the M&As, which is a consolidation of our position as the second biggest player in the industry with an interesting geographic diversification, participating in the Northern market, strengthening its position in the Northeastern market, and also embarking in the Southern market where we still don't have an operation. And I am now at your disposal to answer questions. Now I will give the floor to Marcelo Ribeiro.

Thank you very much, Edvaldo. And of course, we are excited with the prospects of our main businesses: cement, mining. And now I will give you an update regarding the other pillars of the business that are energy and logistics, to show you that we have a lot of reasons to feel excited with these segments. Now starting with energy. Energy has always been an important pillar for the competitiveness of our business, but lower in terms of results. And now as our Chairman mentioned, CSN is back in the game. So we've recovered our ability to invest. This is a pillar that will increase its size and relevance within the company. Today, the main assets would be Itá, Igarapava plant and our capacity within the OPV that they account for 55% of our need that is 430 mega average. So we still have a road to become self-sufficient, which is our target to become even more competitive in the terms of cost. And when we see the future, there is a relevant challenge because the load will double to 840 mega with all of the projects of mining, with cement, and we will look for self-sufficiency in this new load. So this is why we have a robust pipeline of investments in the power sector that starts with M&A opportunities and assets that already produce PCHs in hydroplants but SHPs, but there are a number of projects under development of wind and solar energy. These are in-house projects within our properties. These are projects that are maturing like Floriano project in Piauí with a 400 mega average wind system. So we need investments, but this is an investment that will transform CSN in a player that in the future can have a surplus of energy that can be used to be traded. We will turn CSN energy in a business platform for energy. Now regarding our logistic infrastructure assets, we have 3 main assets. I will start with 38% in the MRS railway. This is a relevant market share, not consolidated, but sometimes we don't give it the importance. And this is the second biggest railway and the most competitive railway in Brazil that generates exceptional results. In the recent past, it was impacted by Brumadinho and it is recovering quickly with the increase of iron ore cargo reaching total results. But yes, we have to celebrate. It is the renewal of its concession up to 2056, this enabling an attractive investment plan of almost BRL 10 billion that will allow the company to grow even faster when it comes in cargo. So we also have excellent prospects for MRS business that could provide more value to our shareholders. I don't know they will maybe go public. Now second place, we have the old network of the Transnordestina Railway. Well, this service is a region that is bereft in logistics. Here, we have Fortaleza San Luis that connects these 2 cities going through Teresina. And with the increase of investment in the railway network, we were able to increase in volumes. And with this, we have been able to see how the EBITDA has accelerated, totaling record amounts. But the prospect is even more interesting. What we have in the future is an investment plan that will double volumes and the EBITDA will grow fivefold and with a CapEx up to BRL 600 million up to 2026. So here, we can grow the FTL because we have great synergies with the TLSA and the works are underway and it will become operational as of 2024. And our container asset of the Tecon Port that also has achieved record results despite the challenges of the pandemic. And we have been able to seek diversification revenues through bulk, through general cargo, maintaining excellent results. And looking forward, we're quite enthusiastic. We're working with containers through partnerships with shipowners to increase the volumes of cargoes. And we have the transformation of Tecon to have a more diversified logistic operator. They have hundreds of thousands of hectares in a privileged region with railroad logistic, highway logistic. They're very close to Rio de Janeiro and São Paulo, but they are also a strategic pull for the presold activities. So we deem there will be an enormous potential to transform this in a logistics hub and to also work with oil and gas with liquid bulks and to bring in electrical companies. This is a part with enormous options for our logistic business. Well, with this, we would like to end the panorama of all of our businesses with a great deal of enthusiasm. And simply to consolidate the excellent financial results for 2021. This was a year to harvest everything that we had cultivated and a positive surprise for us that we could not imagine at the beginning of the year of doubling EBITDA and revenues and attaining the levels where we will reach BRL 50 billion in terms of revenue, margins of 70%. And even despite the acceleration of investments, we have a very robust cash generation, reaching more than BRL 15 billion a year. So the message from this slide is that it's not the flight of a bird or something that is not recurring. What comes ahead of us will be a very robust year, a year of productivity, to be stronger for longer, to allow that this cash flow can be used very properly. And in the next page, you will see it will be well used to enhance our indebtedness profile. We have a challenge that we have complied with in the last few years of reducing our gross debt. This is what we did in 2021. We paid BRL 13 billion in prepayment. We paid BRL 5 billion, a symbolic amount, in our perpetual bonds. We also had a reduction in indebtedness, as you will see. And throughout all of this, we have made the most of our credit and assets to enhance our profile and our indicators. And these indicators are determinant that debt coverage that was 2 years, a year ago, has increased threefold to 6 years, and the average debt term went from 42 to 56 months. And of course, we're taking advantage of this to reduce our costs. We have made strategic acquisitions in infrastructure debentures, for example, in partnerships with export agencies, like ATEX, and this reduces our financial costs throughout the year, which means that these indicators have taken us to the present day rating levels presently where a B+, which enables us to clearly look at the next steps. And the next step is an unequivocal search for greater investments. Here, we speak about capital allocation. We're going to use the cash generated to obtain very low leverage rates. Presently, we're at 0.6. We have repeated the upper level of 1x. So the #1 priority is to have investment degree maintaining that ceiling of 1x net debt/EBITDA. During the last few months, we have been able to reduce our indebtedness without -- always paying off dividends to the investments. This has been our policy, but we have had a very robust growth. We had a yield, when we consider the price of the share at the beginning of the period, of more than 14%. And this yield was made ever more robust through the buyback of shares. So we're going to enhance the service and remunerate our investors in the long term, maintaining our policy. Financing, in terms of the CapEx, we have a new CapEx, BRL 4.1 billion. Of course, a reflection of everything we said in the presentation of doubling the ability to pay off, to work with all of the debottling projects. And we now have new fronts of growth, a growth in energy, growth, of course, at the international sphere, internationalization, that will allow us greater stability and cash flow. So the CapEx is BRL 4.1 billion, which is part of our 2021 platform, where we will get very close to BRL 3 billion. Now this growth will take us to a new level, and this is where we would like to remain. Now to conclude, before going on to the questions, we would like to return to the initial and strategic messages from our Chairman about our near future in 2022, uncertainty, volatility, but yes, a great deal of optimism, good prices, and ESG and innovation. This will be a core pillar in the short term in our strategy and cost austerity. That is something that permeates our work, being aggressive in terms of growth, a respect to the fundamentals of leveraging, and that advantage that we have of growing outside of Brazil because of the forecast of our cash. These are our final messages. We once again would like to reiterate our thanks to our partners at APIMEC. We will have time for our questions and answers. And I would like to show you a video of thanks to APIMEC and also apologize for the delay because of a drop in energy at our center. But without a doubt, we will have time for questions and answers. Thank you so much.

A good day to all of you. Those who are associated to APIMEC Brazil, analysts and other investment people, investors in general, it is a pleasure for APIMEC Brazil, to hold the meeting with CSN, the national steel company, at a moment that is represented by Mr. Benjamin Steinbruch, CSO; Marcelo Ribeiro, CFO; Helena Guerra, Director of Sustainability, Felipe Steinbruch, the CEO of CSN Inova; Pedro Oliva, the CFO of CMIN; Mr. Martinez, the Commercial Director and the Director of Production; and Edvaldo Rabelo, once again, the Production Officer. At this meeting, CSN received an award for 3 uninterrupted years of making presentations with our entity. I would like to thank you very much for that.

Let us go on to questions and answers. [Operator Instructions] So we are at your entire disposal. Our first question is from Thiago from Banco Bradesco BBI.

Marcelo, can you hear me? Marcelo Ribeiro, can you hear me? It seems that...

Yes, we can hear you, Thiago. Please proceed.

Thank you for the presentation. I have 2 questions on my side. First of all, in terms of the service and maintenance of the investment grade that you have referred to, how does this converse with the magnitude of your CapEx and the investment plans that you mentioned through the presentation. Not only at CSN Mining but also in the steel plants, you spoke about the potential of greenfield projects or perhaps acquisition. So how does one thing dialogue with the other? And I would like to... [Technical Difficulty] What have you seen? How is this market going to evolve?

[Technical Difficulty] Mentioned at the beginning of the presentation, using equity whenever necessary, we will be able to announce an investment plan of BRL 30 million. And the IPO of cement will be done to allow us to make investments without overleveraging the company. And when we speak about international expansion, growth internationally, we're thinking of something similar. The possibility of if we are successful, of course, in materializing these opportunities, all at the same time, so that the leverage will go beyond ceiling, to once again seek equity in the steel plants, as mentioned by Benjamin. Each of the businesses can have access to the capital markets, and this would not be different for the steel company. We need to seek out these opportunities without restrictions, but once again, complying with that quest for investment grade and that ceiling in terms of leverage. The second question is the net debt is BRL 15 billion. We will be within these figures in 2021 and in 2022 as well. And these figures will represent a ceiling. Now we will not go beyond them in any scenario. If we do not use equity, if we do want to make an investment, we will do this so as to adjust schedules and time periods with the capital structure being the priority. This is a trade-off. I think this responds to your 2 questions. And there is a question for Martinez on the price of cement.

Can you hear me here? Thiago, in truth, and regarding prices, the gross prices have not had a drop. There was a correction because of seasonality and rainfall in some regions. What has increased significantly and is impacting our profitability is the cost of freight with an impact on net prices and the cost of pet coke, which has made our cement manufacturing cost increase, but nothing exceptional in terms of prices. Quite the contrary, what we observed is that there is a possibility of having a recovery of prices in the Southeast vis-à-vis other regions. In terms of the demand that self-construction, this will not disappear or drop. It's a very limited growth at the end of the year. What we believe will increase is the structured residential construction, the large developments. Growth will be leveraged by the structured residential sector and not the light residential, the refurbishment, civil construction, self-construction and minor constructions. Nothing relevant once again. We think there will be continuous growth in the coming months for cement. This is the most disputed market and it allows us to be in a comfortable situation. And we cannot allow for a price reduction because of the price pressure in this sector.

Can we go on to the next question? We're waiting for Edgar's question.

Can you hear me?

Yes, we do.

I'm sorry, I had a problem with the microphone. Congratulations for the event. And I have 2 questions. The first referring to the geographic expansion projects. If we could have more color in terms of timing, stage and the CapEx for the $3 million for geographic expansion. A second question to Martinez, in terms of the steel sales volume. When we look at the results for 2021, it implies a sale of 1.6 million tonnes in the fourth quarter. Seasonally, this quarter tends to be weaker. If you could speak about your vision of volumes for the fourth quarter in terms of your guidance for 2022, flat volumes year-on-year if we once again look at your guidance. On the other hand, apparent consumption, what is it that you foresee for flat and long steel? The growth is 5% to 6%. If you could approach the dynamic, if you will have a change in mix, that would be excellent. And once again, congratulations for the event.

Two things about international expansion. We have a strategic goal for the medium and long run of investing $3 million, a broad goal set forth by the Chairman. And this refers to an exposure of the total CSN assets to more mature markets that will lead to less volatility and a greater ability to forecast. Another are the projects in the U.S. that are well advanced and should be initiated until March. These are projects that are within this $3 million, and in the $3 million that we will invest, we will make investments until March. And something, for example, the possibility to build a galvanizing plant in the United States that was sold to Steel Dynamics that would present great synergies with our business in Brazil that will improve our customer base in the United States, and it has then a ticket of $350 million. So yes, we want to embark in the industrial sector in the United States via a galvanized plant. We can also work with launch deal through a mini or a micro mill that has a different ticket of $300 million, $400 million. And the decision will depend on how attractive the market is and a matrix of variables, but bearing in mind the size of investment and the horizon that I just mentioned.

Edgar, this is Martinez speaking. The volume that we're announcing here, historically, during the fourth quarter, there's a correction. But we are working on the volume anticipated that is 1.5 million, 1.6 million. And this is what we have in our plan. Now in terms of portfolio, what we have today, there is an excess of pessimism. And this is mixing the industrial side with the political side. Many industrial chains are operating regardless of what takes place in the political arena. In the last 30 days, I visited clients that are working. This is the agro market. They're working normally with expectations of growth for next year. Some sectors, the distribution sector was strongly affected because the import penetration that generally was 9%, 10%, went to 15%. Now next year, what is going to happen, absolutely that imports are going to drop. And many customers or many competitors that imported material are losing money because this material is more expensive than the price of the domestic market. So for volumes for next year will continue 15 million tonnes. I believe it will not be lower. 4% perhaps would be my most negative perspective for next year and 6% the most positive outlook in my opinion. And now regarding CSN, we work with full capacity. We have no more space in our portfolio. When Milton talks about the manufacturing strategy and operation excellence program, he sees everything upstream. And within the volume, I cannot grow my share of wallet. What I can grow is value what I'm going to deliver. Like what happened during the third quarter, we corrected our price by 20% vis-à-vis 14%, 13% by the market. We are going to focus added value, profitability, quality. We will want to have our upstream lines full, and we will not abandon -- we will not go in and out from the export market. Now in Portugal, in the United States, and in Germany, we will be local players. And as Marcelo mentioned, with these investments, we will be able to have an industrial address in the United States. I don't know if it's clear.

No, it is. Your answer is clear. Congratulations for your event.

I would just like to comment something. I would like to say that now we have this priority. And bearing this in mind, we will send an important part of our personnel abroad to develop the financial matter, logistic freight, the purchase of raw material, and we want part of our intelligence to be outside of Brazil. And together with this, well, Portugal is ready to double its size. In Portugal, we will immediately double the line with very little investment. We're talking about $80 million of investment. Long steel, $350 million; and we have the flat steel that we are trying to see how we can better do this to complement the business in Brazil. And perhaps we can do it independently in the United States. We are also going to consider foreign investments. The condition to fund 70% with an equity of 30%, the equipment manufacturers financing the sale of the equipment and the development banks that support these type of investments. So our idea is to have more than an industrial and commercial operation. We want to dilute the value of the assets. Today, we're concentrated in Brazil. And we want to leverage this moment of low leverage and to diversify in a short period of time that in my mind are 3 years without sacrificing our greatest assumption that is to deleverage the company. I believe that today, we have good financing line. The equipment manufacturers are interested in participating in our projects and we are disciplined to use 25% and 30% of our equity as down payment, and the rest will be financed supported by each one of the products. The idea is to have our businesses independent. Nonetheless, the U.S. is a priority for me. I would really like to have important assets in the U.S. as well to make the best of what we have in Germany and Portugal, and because of the good market conditions from the past years in terms of margin, these investments, we want them to give us results soon. Parallelly, we will deal with Brazil with a lot of financial discipline. Now regarding our towers, as Marcelo just stated, we are prepared to pay 6 years, but we want to extend this. We want to continue with our deleverage position. CSN is part of the game. Our entire team is to be commended. Our employees had 2 difficult years. We prepared ourselves for war. The war didn't come. Now we have a period of bonanza, so we were able to do 3 years in 1. So we have to make the best of this good moment and in a disciplined fashion allocate the cash that has been generated for these new investments and maintaining what we have in Brazil. But as a priority, we have our eyes on abroad. We will create a study group abroad. We are looking for people that are interested within the group to go abroad. We want to have abroad a reference group from our business.

I think we've had another connection problem. Leo Correa from BTG.

Can you hear me?

Yes, we can hear you.

Your presentation was excellent. My first question, I insist on the geographic diversification that perhaps was the new point from your presentation. And Benjamin has elaborated a lot about it and Martinez, and you, Marcelo. I would like you to elaborate, when we see the history and the evolution of the company, in the past years, we see a great U-turn from the strategic point of view, your leverage moment was different. You were doing everything to deleverage yourself. You sold the LLC 3 years ago in the United States and SWT was going to be sold. And as we understand, you needed financial adjustments in the transaction. And now the company is totally pivoting to increase focus investments abroad. Now CSN is exposed to Brazil. We understand the diversification. We see this in the exchange, many diversifying, sending funds abroad. I would like you to elaborate, you want to reduce the political risk, the Brazilian risk. I know that it's difficult to operate in this country because we have low growth. We are going into an electoral year. So what is the rationale behind all of this? I believe that now you're being more aggressive than you were in the past because I think this was one of the main points of the day. Now the iron ore business, well, we can see that the market does imply these valuation levels, they don't pay for the company's growth. We've seen your guidance. And in the short term, we're facing a challenging scenario, not only for CSN but the entire industry. So we can see that Australia and Brazil, the main market players, are being challenged to maintain a constant production. So therefore, if you could elaborate on this. What are your projections beyond 2022? When I see the CapEx from the last years, I have the feeling that the midterm CapEx is a bit lower. I don't know, something that you have postponed for the future. We had more aggressive figures for you perhaps. The greenfield projects have been left for the future. I don't know. What about the growth of the iron ore volume in the mid-run? What is your opinion? What do you have to say about this?

Now regarding our investments abroad, we just didn't pivot 180 degrees. So we always wanted to strongly invest abroad. And in the past 15 years, we've been looking for these different alternatives. We have participated in asset purchase processes in the United States. We participated as well in Europe. We went until the end, I don't know if you remember, Corus. I don't know if you remember [indiscernible]. Recently, there was Columbus, and we disputed the purchase of these assets in the United States. And our idea is that in order to value a group and in order to have long-lasting effects, activities has to be diversified, cannot be strongly concentrated in Brazil. Here in Brazil, we have 85% of concentration, between 85% and 90%. Therefore, this is too much in terms of concentration. And regardless of being grateful, and thanks to this, of course, we have the size that we have because, of course, the investments in Brazil, we have to think in a globalized fashion. And we want to diversify our risk because in currency, these oscillations, well, you're rich and poor in a short period of time. The perception of the foreign investor regarding what happens in the country penalizes more than what they should penalize because these are businesses that are thriving, and there is no better way of having stability in your business than having assets abroad that the investors take into account. Now our desire to go abroad, this is something that has existed for a long period of time. And now that we are prepared and now that we're back in the game, no, we've seen that there are excellent opportunities abroad to participate, and there are also projects, greenfield and brownfield project. And according to the market and according to the experience that we have in this market, we know that we can grow, and we believe that we can achieve good margins like Germany cooperating with BRL 150 million in EBITDA, and Portugal and the U.S. with consistent figures. So yes, we believe this is a moment to do this because everything that has been done beforehand in Brazil. And there is an additional point that I would like to mention. That would be the difficulties of managing major businesses. In Germany, we have an important business that sells EUR 650 million or something close to that with 800 employees. And all their structure is there and we do not have one civil labor lawsuit. We don't have all these labor lawsuits that we have in Brazil. The union sits down with us. I think that CSN is dealing with 11,000 civil labor lawsuits, which is incredible. This goes against -- this is a good proposal. In Portugal as well, Portugal people say that it is very complicated. We don't have these civil labor lawsuits and neither tax lawsuits. If you pay attention to the companies, they do not have fiscal liabilities. This discussion with the government in terms of fiscal or labor lawsuits or -- everybody works according to common sense, trying to eliminate all the red tape, following what is convenient. So we have to evolve in Brazil because here we face many difficulties. And globalization provides equal conditions to everyone. This is why we have our eye abroad because we want to coexist with this system and we want to coexist with the business abroad. I would like to say that our objective is to have presence abroad to know how things are done abroad, learn the good things and bring them here and vice versa. Of course, we want to take our good things abroad. Our strategy, well, this is not the first time that we have thought about having investments abroad. This started in the past. And due to our leverage position because of the drop of our business here and abroad, well, we had to suspend our plans. But now that we're back again, lean, we are prepared. And this is the best year of our life. This is an excellent year, and you will see this at the end of the year -- at the end of our tax year. Our entire team is prepared. We have a young team. I'm in the middle of the table. On one side, we have people that are over 40, and the other side of the table are less than 40, and I'm in the middle. This is a team that is healthy, with will, really wanting to face this challenge. And I believe that this will be beneficial for everybody that works with us. This will be beneficial for our customers, for our suppliers and the chain as a whole. And this for all our business. I believe that as a management company with the size of CSN, have excellent assets abroad and to participate in the globalized game, we do have an excellent management capacity and have had very good results with this outside. And this gives us more enthusiasm to expand this space. I believe it will be very healthy for everybody.

Regarding your question on mining, the coming year, we do have the benefit of the production of spirals or coils. This will maintain sustainability and will enable us to maintain a price of around $4.5. And the update of our schedule refers to the difficulty of the engineering suppliers to deliver what we have contracted. It's a moment of a cycle that we went through 10 years ago of a boom of CapEx. The production capacities have been depleted during this period, and the ramp-up that we now have for growth projects is an effort of the entire chain of supply to make these projects come to life. From the viewpoint of volume, we will have an increase in volume in PDs. And we have the great efforts of the company in terms of revisiting the processes and the routes of processes that we have presented, and we have to try to maximize the quality of our product. We're going to enhance the quality from 62.5% to 64.5%, and then B4 from 62.5% to 66% iron content. We're speaking of 39 to 41 tonnes. And with the entry of [ Puris ], this will go to 42 million tonnes. In '24, we will reach 48 million tonnes with the coming into existence of the main projects of B4 and KP 15. And in 2025, with these projects running at full, we will attain 60 million tonnes. I agree with you that the market still has not adequately priced the coming into entrance of these projects that will deliver an additional 34 million tonnes. But we're very comfortable that we will be able to deliver this because the projects are highly attractive to investors. Even in a scenario of price adjustment of $75 with an internal rate of return, it will be 30%. So even in a more conservative scenario than the one we have today, these projects will generate a great deal of value for shareholders. And because of this, we will implement them as soon as we can without leaving aside the quality, the rigor, maximizing the quality of our products and the quality of our CapEx.

Thank you for the question. Our next question is from Carlos de Alba, once again, from Morgan Stanley.

And just coming back to the iron ore business and the expansion projects, is it possible for you to give us an update on the CapEx per project? Slide 37, you have all the major projects. So it would be great if you could also share how much you see now the CapEx given the different changes that you just expressed. And also if there is any updated numbers for the CapEx of the second phase, P28 Mascate and Emery project as well, that will be very useful. And then just coming back to the expansions of the projects in North America, when do you think you will make the announcement? And if you could confirm -- so I missed the CapEx that you would spend in the mini mill, that will be very useful.

First of all, thank you for the question, Carlos. I'm going to update you in terms of the CapEx per project. We have expansion projects for the central plant, which is called the Lamas project with a 5 million tonne capacity. The project is BRL 1.8 billion approximately. Those for the recovery of tailings for PDs and Casa de Pedra. It represents BRL 1.6 billion. And the projects are P15 and B4 plants jointly, BRL 6.7 billion. And the difference from the BRL 12 billion for the first stage refer to capacity expansion in the short term. We have not updated the P28 projects. There's a team dedicated to that focused exclusively on those projects. As soon as this is done and the projects are more mature, we will be offering you that information and to the market as well.

Regarding the projects abroad, Carlos, the estimate to make a decision is the end of the first quarter, which means March of 2022. And in terms of the magnitude of the investment, presently because of consumption and engineering, we estimate the investments in the mini mill will be $350 million to $400 million. This is the order of magnitude.

Simply to complement, for Carlos, the galvanization and the long steel project, as mentioned by Marcelo, represents $350 million in Portugal, $80 million to double the plant, and what is left pending is United States. The plant, the flat steel, I'm sorry, where once again, we can have the galvanization and have a reversible laminator for the use of slabs, do the entire project in terms of a mini mill. What is important and perhaps a figure will seem very large, and in truth it is, is that we maintain as a priority and as our main flag a low grade of indebtedness. So we will do whatever can be done using the long-term leverage and funding on the part of equipment sellers and development banks. And we count upon our cash generation, which, as mentioned by Marcelo, is not a timely thing for this year. We're highly confident that the coming year, we will not have great growth in terms of invoicing or profit, but we will have a positive growth and margins, of course. So of these $3 million that we're referring to, through time and beginning in the first quarter of 2022, we will carry out these investments with extreme financial discipline and by carefully preserving every single cent when it comes to dollars and euros. And additionally to this, always based on common sense of being able to diversify our company, create that learning possibility for those who are here as well as there, and to begin working internationally again. And this is something we have wanted to do for some time, and we're going to do it with a great deal of discipline and being highly parsimonious when it comes to money with full respect to what we have set forth to do, to grow with low leverage, respecting ESG and technology.

Just if I may ask a follow-up, do you have an idea of the size of the potential galvanized line in the U.S. and the mini mill in terms of capacity per year?

I will answer the question. That is quite simple. We're speaking about different scenarios that we have analyzed, Carlos. When we speak about a mini mill or a galvanizing line, we're referring to 400,000, 450,000 tonnes of product. Of course, I am referring to diverse scenarios, some scenarios might have a larger production, others less. But this is the order of magnitude.

In the case of long steel, and depending on the technology, we have 300,000, 350,000. Another model would be 500,000 tonnes, 300 million and 350 million. The other would be 500 million. And speaking about long steel, this will depend on technology. In terms of the galvanized lines, it would be... [Technical Difficulty] our ideas in terms of other processes is to begin from the back forward. So we're going to work this way. We will begin with the galvanized line, the lamination and then finally the slabs. Now... [Technical Difficulty] this has been broadly discussed. And in the United States, there was significant growth with that model of 300,000 tonnes for long steel. And we would like to copy what is being successful there. In terms of Portugal, as everything is ready, everything will be very simple, very quick. We have the investments as we are leaders in the Portuguese and Spanish markets, and we have to occupy that market. And Germany, because of the excellent results and the possibility of penetration in Eastern Europe, because of our geographical position, this is where the growth lies for Europe in terms of investment. And we're quite comfortable in proposing this investment because of the good results that we have created. It seems to be something unforeseen, very large, but it has been based on a great deal of discussion. And we're very comfortable... [Technical Difficulty] with great rigor and respecting the indebtedness. Indebtedness for CSN, never again.

We have a last question from Rodolfo De Angele from JPMorgan.

My question, I'm not sure if I understood wrong during Benjamin's introduction. But if as part of your growth of the steel mill abroad, if you could also have an organic growth and M&As. If this is the case, which type of target would make sense for CSN?

I will respond to that. We don't have M&As in sight for the United States. As mentioned, we have an investment in long steel and the galvanized line. They're all greenfield. Where we have brownfield is Portugal and Germany. Now in the United States or even in Europe, we have not analyzed any M&A so far. They're all investments on our part. In the very short term, I cannot see anything that we could do, and the assets are very costly abroad. If you analyze the value of the American steel companies or mining companies in the U.S. and Europe, they have recovered their value. So any type of approach in that direction means we would have a disadvantage. And this is what strongly motivates us to go abroad when you see the quotation of the company 6 months ago in Europe and the U.S. vis-à-vis the level that they have at present, there has been a very minor drop compared with the drops we have had here. So we're performing much better than the... [Technical Difficulty] and we're having a year of fantastic deliveries. Now the drop that existed in the emerging companies cannot be compared with those that are abroad. Any type of M&A would be prohibitive. So we're going to focus on greenfield and brownfield companies.

Very well. We will close with a written question who would like to know the timing of payment for LafargeHolcim. And of course, this is dependent on the approval of the antitrust agency that could extend until the third quarter of 2022. They're going to use all of the time available, 350 days since the official publication. We don't believe in that scenario. We have a good relationship with the CADE. So this could happen in the first semester. He also asks if in the 2022 volumes of mining, there is an impact of the new projects. As mentioned, we have a ramp-up with our third magnetic project. These are projects that help us in the quality of iron ore, but they have a minor impact on volume. These volumes will begin to appear in 2023. With this, we would like to end the question-and-answer session. We would like to thank all of you for your participation. We hope that this was a useful event for you, and we are at your entire disposal as the IR team. Thank you very much.

Okay. [Statements in English on this transcript were spoken by an interpreter present on the live call.]