What Happened to CMIN3's Production in Ouro Preto?
CSN Mineração S.A. informed the market, via a Material Fact signed by Chief Financial and Investor Relations Officer Pedro Barros Mercadante Oliva, that it has decided to temporarily scale back low-grade iron ore production at the Dry Processing Plant in the Pires complex, located in the municipality of Ouro Preto, Minas Gerais. The move was driven by a tighter market environment, intensified by pressure from rising freight costs.
According to the official filing submitted to the CVM on September 29, 2026, the partial shutdown aims to protect compressed margins in the sale of this specific type of ore. Company management emphasized that the decision is temporary and can be reversed at any time without major structural consequences for the mining complex. However, this reversal is conditioned on an effective improvement in market conditions that can once again guarantee attractive margins for lower-grade ore.
What Are the New Volume and Cost Guidance Figures for 2026?
As a direct result of the temporary production cut at the dry plant and expectations of lower third-party ore purchase volumes over the coming months, the company formally revised its operational projections for the end of 2026. The production volume and third-party purchase guidance, which previously stood between 45.0 and 47.0 million tons (Mton), was reduced to a new estimated range of 39.0 to 41.0 Mton.
At the same time, projections for the C1 cash cost—a fundamental metric for measuring operational efficiency and expenses strictly tied to extraction and processing—rose significantly. The 2026 C1 cash cost guidance, previously projected between $22.0 and $23.5 per ton, is now estimated between $25.0 and $26.0 per ton. This increase in unit costs reflects both lower fixed-expense dilution from the volume cuts and persistent logistic pressures.
What Does This Guidance Change Mean for Shareholders in the Short Term?
For investors holding CMIN3 shares, the revision introduces a more challenging operational scenario for the remainder of the year. Lower commercialized volumes combined with a higher cash cost mean immediate pressure on the miner's operational cash generation. Fewer tons sold to the market reduce gross revenue, while higher unit costs erode margins per ton extracted and delivered.
This less favorable financial equation tends to directly impact net income reported in the coming quarters and could influence the amount of dividends the company manages to distribute to its shareholders. Historically known for its strong policy of returning cash to shareholders, CSN Mineração sees its payout capacity tested by this adverse external environment of freight prices and market constraints.
Is the Production Cut Permanent or Can It Be Reversed Quickly?
CSN Mineração management made a point of noting in the Material Fact that the reduction in activities at the Pires complex dry plant does not represent a permanent closure of that unit's operations. It is a flexible approach to production capacity management aimed strictly at preserving margins and value, avoiding the sale of low-grade ore under unfavorable market conditions.
According to the official statement, the full resumption of operations and the reversal of the measure depend exclusively on an improvement in macroeconomic and logistic conditions that can once again guarantee sustainable margins for low-grade ore. Until then, the company will operate with a production cap restricted to the new range of 39.0 to 41.0 Mton, keeping the market informed of any changes to this operational framework.
How Will the New Projections Be Formalized, and How Reliable Are They?
The new estimates released by management do not constitute a performance promise by the company or its directors. The Material Fact highlights that the figures reflect estimates subject to market factors beyond CSN Mineração's control, meaning further changes could occur depending on the volatility of international commodity prices and transportation costs.
For governance and regulatory transparency purposes, the revised projections will be formally incorporated into Section 3 of the company's Reference Form. The updated document will be available within the legal deadline on both the website of the CVM and the investor relations page of the mining company itself, serving as an official basis for analysts and shareholders to track performance.
What Should CMIN3 Shareholders Monitor Moving Forward?
Following this disclosure, investors should closely monitor trends in maritime and land freight, as well as the premiums paid for lower-grade ores in the international market. Any sign of a recovery in these factors will be the primary trigger for management to reverse the cut at the Pires complex dry plant and resume the originally planned production range of 45.0 to 47.0 Mton.
In addition, upcoming quarterly earnings reports will help verify whether the C1 cash cost is indeed behaving within the new projected range of $25.0 to $26.0 per ton. Rigorous tracking of these operational metrics in the Reference Form and performance reports is essential for assessing the resilience of the CMIN3 investment thesis in the months ahead.
