Good morning, ladies and gentlemen. Thank you for waiting. At this time, we would like to welcome everyone to CSN's Second Quarter 2014 Earnings Conference Call. Today, we have with us the company's executive officer. We would like to inform you that this event is being recorded. [Operator Instructions] During the conference call, there will be a reply on the website. Before proceeding, let me mention that forward-looking statements are being made under the Safe Harbor of the Securities Litigation Reform Act of 1996. Forward-looking statements are based on the beliefs and assumptions of CSN management and on information currently available to the company. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties, and assumptions because they relate to future events and, therefore, depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions, and other operating factors could also affect the result -- the future results of CSN and could cause results to differ materially from those expressed in such forward-looking statements. Now I'll turn the conference over to Mr. David Salama, CSN's Investor Relations Officer, who will present the company's operating and financial highlights for the period. Please, Mr. Salama, you may begin.

Good morning, everyone, thank you for participating in CSN's Earnings Conference Call. Here with me are the company executive officers. We will begin on Slide 3 where you can find consolidated figures for the second quarter of 2014. The second quarter -- the consolidated net revenue amounted to BRL 400 million in line with the second quarter 2013, compared with the net revenue of BRL 4.4 billion in the first quarter. Net revenue in the second quarter was down 7%, basically explained by a lower revenue in the fuel and mining segments. Gross profit in the second quarter '14 reached BRL 1.3 billion, 26% up compared to the second quarter of 2013 and in keeping with the gross profit of the past quarter. Adjusted EBITDA in the second quarter was BRL 1.3 billion, up 19% compared with the BRL 1.1 billion posted in the second quarter '13. While the EBITDA margin was 6 percentage points. Compared with the first quarter '14, adjusted EBITDA was down 9% mainly stemming from lower iron ore prices, partially offset by an uptrend in the EBITDA posted by the steel segment. The collective margin remained stable at 30%. Let's go to Slide 4 now where we show you investments made in the first half of 2014. In the first half of 2014, CSN invested BRL 950 million, highlights coming from investments in mining, accounted for 40% of the total, reaching BRL 365 million. Additionally, BRL 239 million were invested in the steel operation, BRL 127 million in expanding our cement production capacity, and BRL 161 million in port and railway logistics. Please go to Slide 5 now where we breakdown our results by segment. Let us begin with the upper part of the slide. Net revenue in the second quarter totaled BRL 4 billion, of…

[Operator Instructions] Our first question comes from Rodolfo De Angele from JPMorgan. Rodolfo R. De Angele - JP Morgan Chase & Co, Research Division: My question is about cost. This quarter has a more challenging business scenario. But despite all that, the cost per tonne for steel and mining went down. I wonder if you could elaborate on the main drivers. Anything special or non-recurring? In addition, if possible, I would like to hear a comment on the expectations, commercial expectations for the second quarter in terms of demand and price.

Rodolfo, thank you for your question. We will be incorporating much of this is going to answer your second question first about the market right now. And then I'll come back telling you about what we are doing to lower our production costs.

Hi, Rodolfo. First of all, as to the global scenario, what we see today is extremely fierce competition and a war for a competitive edge in the international environment in our segment. We believe that in the second half of the year, there will be improvement due to seasonality. Historically, the second half is better, and also more numbers of working days. The first half was very much affected by the World Cup and other events and actually, very little was done for the last 12 months. As of September, this scenario will improve in our opinion. The government give signs and we also have some loans and credit flexibility, vis-à-vis reserve requirement with banks. By large, I believe that -- by year end, there will be improvement. Some productive change are about to recovery in the inventory and the [indiscernible] inventories have been generated. And we believe that part of the volume will also come from recovery and replenishment of inventory. CSN will be fully focused in the international market as it's been for 5 or 6 years. And in the second quarter maybe that we will give you more detail on costs. We optimized or maximized the cost price ratio. In the past, we didn't have elasticity of volume in the second quarter and we preferred to focus on cost advice. For price, as you can see in your earnings release, we have a rebound in the second quarter of 2.4, extremely positive. And, in addition, we also had the cost-reduction program. The outlook is that margins will be flat. CSN keeps on having quoted product or same product about 40% share, which makes our portfolio very strong. We are not extremely focused. I mean, our portfolio, as you see today, is very diversified in terms of marketing product. And now this last quarter, we also had the long steel startup, and now we have another product in our portfolio. So basically, this is the scenario that we are envisioning for the third quarter. David now is going to tell you about our cost reduction plan.

Rodolfo, actually we have been working for some quarters now. We have a strong program for cost reduction at the company and also, focused on productivity gains. This is clearly bringing positive results to the company. Actually, we had a reduction in the second quarter of 2%. Our production cost of laps would now be around BRL 950 per tonne. Now just to give you some examples. Obviously, part of the raw materials are also in our favor. But in addition to raw materials, we also have a number of other actions being implemented at the company. Let me begin by addressing raw materials first, and then I'll be talking about the other cost-reduction programs. Just to give an idea, right now we are working with the coke coal lower than BRL 10 per tonne. Our coke is below $210 per tonne. We also have a good supplying agreement for natural gas with Petrobras. In addition, we also see a significant reduction in the main metal alloys, even they're going down. And we're also working to lower our inventory levels, particularly raw materials and the stockroom materials or supplies. Coming back to the first point in terms of cost reduction plan, just to give you some numbers, for the last 12 months, we renegotiated more than 470 contracts with a company greater than BRL 1 million in total. And up to now, the total accounts for a reduction, a price reduction and scope revision of BRL 150 million. Another program that is also being implemented is about an extension in the maturity term with suppliers. I could also mention other things too about gains of efficiency at the company. For instance, we implemented a metal reclaimer system, and this should bring annual gains of at least BRL 16 million. So, in addition, to the financial impact, we also have something very positive in terms of environmental preservation. And also increase internal efficiency of blast furnace 2 generators. This is also to bring in significant gains over BRL 4 million or BRL 5 million. In the end, there are several programs that are in progress right now. Results are beginning to appear. And like I said, this is also going to be our focus. We'll be very strongly engaged in order to cut down our costs. And I can also say that everything is sustainable. We expect it to be maintained for future quarters. Rodolfo R. De Angele - JP Morgan Chase & Co, Research Division: Just as a follow-up question. What about prices for the second half? What is the trend for the domestic market?

Rodolfo, in reality, the clarity, if can think about hot band from $530 or $520, cold rolled products around $590 to $610, galvanized $720. The current agreement is between 11% and 16% consider exchange rates of 2.25%, basically that's the price range. And the premium range will have, vis-à-vis, imported and clear products. Our prices, in the domestic market today, I mean the unit net revenue, net of taxes, and financial expenses for hot rolled products range from 1,890 to 1,970 for cold rolled, up to 2,305, galvanized 2,016 to 2,700. So basically, this is the price range we have. And the scenario for the third quarter is stable and we don't have any other reclaimer or recovery of prices this quarter because they have already captured 2.2, vis-à-vis the first quarter of 2014. Please note that our price for the second quarter of 2013 vis-à-vis first quarter of 2013 was increased by 22%, and from the first to the fourth quarter, around 8%. So basically this is the scenario for premium. So that's something that we follow-up, which is imports. Imports grew a little bit in the second quarter, basically 26%. That's something we are watching very closely because CSN is very much affected. The bulk of imports are related to plated products. And indirect imports remained at 1.2 million tonnes of -- in terms of steel [indiscernible]. By this scenario, we've maintain our guidance for sales volume of 6 million tonnes for year 2014.

Our next question comes from Renato Antunes from Brasil Plural.

My first question is about CapEx. This quarter, CapEx for mining averages better -- it's slightly increasing. What about the outlook of CapEx disbursement? And what you did up to now is inline or keeping with the budget? The second question which is still about mining. I wondered if you could tell us the outlook for sales for future quarters, maybe next year. And what about the impact of the port capacity in the region? Will that have a negative impact to some extent?

Renato, thank you for questions. I'll be answering the first question about CapEx and then I'll ask Gerardo to answer your question about mining. As you could see, in the first quarter of 2014, we invested something around BRL 915 million, with a strong focus on mining, BRL 365 million, BRL 240 million in steel operations, BRL 160 million in logistics and BRL 127 million in our expansion for cement. In reality, for the full year, we do not revisit our CapEx. It remains the same for the full year. We announced something -- as BRL 1.5 billion in mining, BRL 600 for steel operations and BRL 400 million for cement. This CapEx, in reality, is being met. It is within our schedule of execution. And if you consider all the actions that we've been performing, vis-à-vis our costs, in other words, more than anything, we want to improve in a sustainable manner and always, with full control over CapEx and now, in terms of production costs. Gerardo is going to answer now your question about the iron ore and mining.

Renato, in terms of sales of iron ore, the first half of the year has a critical path [ph]. We have a port capacity, we've been having some problems that we reported in previous calls. But for the second quarter, we expect to run above or between 3 or 4 tonnes per month, reaching 45 in the year. As to volumes, you could check steel in China. It has been growing quarter-over-quarter. China have a record steel production even though the growth is not at the levels that we expected from the past. Steel production has been consistently growing in China. And Australian steel is also increasing production, having an impact on price. Now we're going through adaptation in the market our tonnes, and we expect the price or the index to be around $100 per tonne by year end. The startup of the new port during the ramp up process is being followed up. The expansion of domestic mining in Brazil and we don't believe there will be a strong impact on our ports. Several competitors in the domestic market will -- players in Brazil. What we see is that due to their costs and the margins, I mean, due to the sales prices today, the margins were slightly complicated because smaller operations tend to have higher costs. So today, we feel that there is a retraction in terms of iron ore availability, not due to port constraints, but due to the prices that our competitors would have. Prices ranging from 90 and 100. So additional capacity in the port or competitors, we don't believe this will have an impact on our exports. Like as we said before, we are working on several cost reduction programs. So we're comfortable with our volumes by year end and also for next year.

Our next question comes from Thiago Lofiego, Merrill Lynch.

I have 2 questions. 1, going back to Martinez. Perhaps, Martinez you could elaborate on the premium of 11% to 16% for domestic steel compared to imported steel. Is there any risk that the premium will be lowered in the current scenario? Or do you think that this is a fair situation? My second question goes to David. Perhaps you could break down the line of other operating expenses. You said you have significant cost reductions in the quarter. Could you perhaps elaborate on what was positive and what was negative in those negative BRL 30 million in other expenses?

Hello Thiago, this is Martinez. Well, the way I see this, the premium of 11% to 16% is doing it. Obviously, uncertainty and possible dollar exchange rate instability in coming months makes this premium possible to happen. But we believe that the premium will remain flat in that range in the third quarter. Now looking forward, [indiscernible] what I usually say, costs are dropping, competitiveness that could change, the raw material, feed stock, the dollar exchange rate, market situation, which is also very important. And all of them plays a role and we are expecting the third quarter to be better by year end. Point 2, the markets are a little bit more stable. We believe that by year end, we should finish with a positive outlook. But the premium today I say that 11% to 16% would be the limit, particularly for finished materials where CSN has a significant market share.

Thiago, this is David, regarding your other question about other operating expenses. So there is some unusual great variation among the quarter because in this item, we have subgroups. And there are basically adjustments to provisions that we make in the company. And we're talking about all sorts of provisions, there's [indiscernible] fiscal provisions, lawsuit provisions, labor claims, and the balance for this quarter. And this is an ongoing evaluation work of these provision. We work constantly with the auditors so that we can have the most accurate provision by the end of each quarter. And indeed, we had a reversal of about BRL 120 million in [indiscernible] reserves for the environment issue. It impacted the figure for the quarter and was a positive factor. And we're basically saying this from our -- to the other numbers. I think that this is the number that I mentioned is the one to be highlighted. So how recurring is the -- to mention BRL 120 million positive, but there was a negative points as well, that contributed to the BRL 30 million negative that you reported. So I want to understand how recurring is this negative factor. Well, what I can tell is what has been recurring quarter-by-quarter has been something ranging from BRL 30 to perhaps BRL 50 million. This we could call a recurring factor in this figure. The last, we are talking about onetime off adjustments. Adjustments that we have to make along the way, but it is nothing recurring quarter after quarter.

Our next questions comes from Mr. Marcos Assumpção from Itau BBA. Marcos Assumpção - Itaú Corretora de Valores S.A., Research Division: My first question goes to Gerardo regarding marketing. The iron ore and sales guidance if I'm not mistaken is 37 million tonnes in the first half -- first quarter you did 13 -- or 13 in the first half, the remaining would be 24. But you said you're going to maintain the guidance. Should we expect an average volume of BRL 12 million a month?

Yes. Like I said, the port, as of July, we'll be operating at 35 million tonnes a year, and we expect to have 20 million tonnes and to reach a good amount in the end of the year. And that's for the port revenue. Marcos Assumpção - Itaú Corretora de Valores S.A., Research Division: A week ago or 2 weeks ago, there was a Valley auction, a recent Valley auction and considering the current iron ore prices, the auction, the winning bid was lower than the prices. Do you think that it will be a new trend if the iron ore prices remain at $100 like you said?

Well, like I said before in the Valley auction, the lot had ended up being sold, while even with the startup of a new port, this will not necessarily impact of our export prices or our sales for that matter. We believe that our sales are independent of that process. As for the prices of port services, there will be more supplies. That might have an effect on the port service prices, but we believe it will be a marginal difference. Marcos Assumpção - Itaú Corretora de Valores S.A., Research Division: Perhaps the last -- the recent Valley auction will be good reference price or good product?

Well, our procurement department have been signing some agreements to buy or planned to port services. Our price will not be necessarily following Valley's performance. Some agreements were signed a while ago for prices that were even better than the Valley prices. The Valley price for the stock price in the market condition would be priced close to 90, so a good influence of that in the Valley auction. But looking more towards the long-term, we believe the prices will be a little higher. We believe the prices will remain above the price that Valley got. Marcos Assumpção - Itaú Corretora de Valores S.A., Research Division: Can you say when we talk about the cost at the parent company, we expect that the cost saw 1% CSN cost of sales, 10%. So you talked about cost-reduction efforts. So can we imagine that most of the cost reductions are not in the steel operations? Is that why we have this difference in performance?

Well, the number I gave you is in the reduction of the cost of the plants. You have thousands of contracts. And just like I tried to focus on the production of slabs, which is say, the heart of the steel operations, the same applied to rolled product and to other business.

Gerardo mentioned the cost reductions and we'll have other efforts being made in the cement business and all of that I believe will impact the positive lower figures. And again this is a sustainable effect because this is work that has been done over the quarters so that we can have more competitive structure in the current market scenario. Marcos Assumpção - Itaú Corretora de Valores S.A., Research Division: So in the costs, some more in other operations other than steel?

Actually in steel that's the 2% I mentioned refers only to the costs of the slab production. But I have all here the cost, the progress and so on and so forth. But if you add all of that, the number is above 10, it's close to 13% overall. If you want later on, I can break down all the figures for you. But that's the general figure I gave you is just the production cost for slabs in the first quarter versus the second quarter of this year. Marcos Assumpção - Itaú Corretora de Valores S.A., Research Division: And my last question. We have heard a rumor regarding the merger of companies in the Transnordestina. Do you think that CSN would be interested in this?

Well, that's what we meant. We continue to work on the expansion of what we call the southeast system will have the capacity of 2.4 million tonnes. We increased the invest of 5.4 million tonnes. This new plant will be an [indiscernible], meaning Gerais [indiscernible]. But in addition to that, followed market movement. If a good opportunity comes up, they look to that. But always in compliance with our philosophy, i.e., whether this makes us, it creates value to the company.

This is Martinez, Marcos, and to add to what that you've said. First we had a loss in this business. If you all look at the growth of our margins, in the second quarter '13, a good cement margin was around 23%. Today, in the second quarter of 2014, our margin is 30%. And something else. CSN is going to be an important player in civil construction because I have cement, I have rebar, I have finished products for tiles coverage et cetera. For cement, it's part of CSN's strategy to be a strong player in civil construction. In addition, infrastructure projects in Brazil are only getting started. They need to happen, we work on one part of the equation, consumption. Unlike China, they did infrastructure, now they're working on consumption. So if you mention that in civil construction, heavy civil construction market will grow, CSN is the player. And we would be candidates to possible acquisitions in this area. Of course, we'll be considering it.

[Operator Instructions] Our next question is from Leonardo Correa for BTG Pactual.

My first question about NAMISA negotiation. If I'm not mistaken, in the last quarter, you would expect the conclusion for September by year end. So what about negotiations, what is the status? And any possible delay, particularly to close the deal? And the second question is about the volume of iron ore. We've been installing the port expansion. I'd like to get more color in the expansion of Casa de Pedra mine. What is the current capacity at Casa de Pedra? And how much do you expect to improve by year end in 2015? And what about the expansion of the waste and also the ranging of the dam. These are my questions.

Thank you for questions. I'll be answering the first question about NAMISA and then I'll ask Daniel dos Santos to answer your second question and give you more detail on the status of our expansion mining project. About NAMISA, last week, we had another round of negotiations, which are underway. The parties keep on negotiating and actually analyzing all the alternatives available. So we expect the parties to come to an agreement early September. As we speak, we keep on searching for an alternative until the end of September. Now I'll ask Daniel. Daniel, can you help me answer the question about mining?

Yes, please. Leonardo, let me you break your question in 3 processes. First of all, the mines, the plants, and then the expansion. For the mines, we bought a fleet, a new fleet, last year. It came to us by late 2013. And then we did the handling, assembling equipment, are fully operational. In terms of mine equipment, we already have everything ready to roll. When you increase the handling capacity of the mines, you need areas for disposal, because we process hematite and high-grade products today. So the areas for deposits and disposal, they are also operational and are being used [indiscernible] moving previously licensed. And in the mine, in the first half of the year and by late last year and the beginning of this year, we also have 3 mobile crushing units that are greatly contributing to improve our production phase and also helping to build the port's capacity. As to the plant, we've been working on an extension for quite a while now with additional fleet lines, out of which 2 are already operating since May. We'll be delivering the other 2 lines by December and the remaining 4 lines in the first half of next year. And then we have shipment. They have to take in all the material to the ports. So the mines, we produce at the plant and we have to ship everything to the port. Now we are in the handling phase of the work. We expect to have the peak of the works in the first half of next year, the first quarter to be more precise, so we can deliver railway shipment capacity, which to date, 24 billion tonnes. So we can match our expansion plan for [indiscernible]. As a result, if you add like Marques [ph] did the math, what we did in the first half with the phase that we continue the port now look 45 million for the second half of the year and the increasing in production that we experienced right now at Casa de Pedra, 35 million tonnes can be available for exports.

Okay, just a follow-up question if I may. Coming back to David. David, what about net debt over EBITDA?

This quarter, it was close to 2.7x.

And even considering now buyback, are you being more aggressive now at CSN? BRL 600 million were involved in the buyback. And we also have a higher costs due to net financial expenses. So what about the limit of net debt over EBITDA? And maybe you could also comment of this limit that you decide to run your business?

Leonardo, actually, it's good to go back in time a little bit. In reality, 1 year ago, our net debt over EBITDA ratio was 3.9x. And now we've been doing our efforts in order to lower this ratio, taking into account all the investments that we have to do and also our cash use. Our expectation in reality is to close the year lower than 2.5x. This is our expectation and that we'll be working to do that, taking into account the whole CapEx required to expand, particularly our mining activities. Now a couple of words on our buyback program. First is assigned by our management, our Board of Directors, that our shares are quoted at a lower level considered to be the fair value. In addition, for remaining shareholders, we have a higher potential dividend for future payout.

The next question comes from [indiscernible] from Crédit Suisse. Ivano Westin - Crédit Suisse AG, Research Division: Ivano speaking. Just a follow-up question about the expansion of mining activities, if you look the earnings release and the explanation of projects in progress, the capacity of Casa de Pedra, you have the conclusion in 2014, '15 and also 2015 and '16. What about the installed capacity for Casa de Pedra in 2016? What about the car capacity and what is the corresponding CapEx necessary? The other question is about a ramp up of the long steel plant. Could you give us a guidance of the sales volume in the second half of this year and next year?

Ivano, thank you for the question. If I may, I will ask Martinez to answer, first, your question about long steel products. And then Daniel dos Santos will answer your second question about our expansion schedule for mining.

Great, thank you. Ivano, the guidance for the long steel plant, we expect to see about 60,000 to 70,000 tonnes for the second half, virtually rebars and the majority of the volume and nearly 20% for wire rod. We are still working on the approval of the product. It's a lengthy product. We are approved for higher segments for heavy engineering and infrastructure works. And in the second half, we'll be concluding the approval process of more thinner products used for light civil construction. Sales, total sales in the second half product wise remained low because it was just the approval. For next year, it's too early to say anything about volumes. We're still working on the figures. But our production capacity is 500,000 tonnes. I believe that by next year, possibly in the second quarter, we'll be having full capacity. Daniel, can you answer, please, the second question?

Today, the installed capacity for shipment -- rail shipment is 24 million tonnes at Casa de Pedra. We're working in the mine and in the plant. In the mine, we have already done most of the work and we are implementing additional lines so we can meet the full capacity. The next step in the second half is the mobilization and handling of works to expand the rail shipment. And therefore, reach the level of 40 million tonnes at the plant. You asked about 2016, right? When we work on our plants on a mid-term basis, for 2016, our projection is in install capacity because this case will have to take into account that some of these works will be still with the ramp-up phase in the first half of 2016 and late 2015. So expect to deliver the production capacity of 37 million tonnes at Casa de Pedra. Ivano Westin - Crédit Suisse AG, Research Division: Great. What about the cost capacity, Daniel?

The cost capacity will have the full installation for BRL 45 million. Reviewing the ramp up process for Tecar, it depends a lot on what we achieve or what we did in the plants for mining, particularly in Casa de Pedra and also our relations with suppliers. But we already have the full equipment and install capacity in Tecar for 45 million. We have another project approved by the board, and now with the arrival of the next budget cycle, we expect to have the project concluded by year end. Ivano Westin - Crédit Suisse AG, Research Division: David, if I may, can I just have another question? It's not so clear, the merger between Casa de Pedra and NAMISA. Could you make additional comments on the current scenario of the negotiation? And what about the timeline or the deadline? It was September, right? Do you maintain this deadline?

As I said a while ago, last week, we had another round of negotiations. Actually, these negotiations are quite complex, involving several groups making headway in our negotiations. And we are considering all the alternatives possible in terms of a merger. Our expectations, our deadline continue December this year. So by late September, we expect to see or to have a definition above this.

Our next question comes from Mr. Marcelo Aguiar, Goldman Sachs.

I just have a steel company, both in your numbers and volume dropped and the cost per tonne, 10.4. When you look at the coal prices, they tend to falling in the end of the first quarter and stay at around $120. Normally turnover of 24 months. So I want to understand, David, was there a high consumption of finished goods that you had in your inventory and then your cost percent was very low because you were perhaps selling products that were produced at lower cost, that is my first question.

Marcelo, as I said, this is the result of the number of factors that happened in the company. With the drop in the cost of raw materials I gave you an idea of the price level at which where we're negotiating our feedstock. And in addition, with all this work that we're focusing on cost reduction and efficiency gains, I do not see any of the normal movement in terms of the inventories that could one way or another explain this. On the impact of the cost of production in the quarter. So in your opinion, this performances 100% recurring. And in the case of coal, starting at 110, you are buying at 110 or consuming at 110 in the second quarter?

Actually, as of now, we are buying it at this range, 110. Now obviously, you have to add the other cost. So that you can have the coal in the plant. But like I said, this is an ongoing work that we are doing, and we believe it is sustainable for the future quarters.

My other question with regarding working capital. Your working capital has been substantially increasing, BRL 65 to BRL 75 in practically all of the segments. I like to understand, is the company making any effort to perhaps improve the management of the company's working capital? Do you have any guidance regarding that?

Actually, our working capital in this quarter was impacted by the growth of the inventory of our finished goods. If you look at the inventory of feedstock and raw materials, you see that with the inventory growth there. This is somewhat in keeping of what Martinez said, i.e., the company is getting ready to supply a bigger demand in the second half of the year. We are expecting a rally in demand and so CSN will be well-positioned to meet the supply. More so, typically in any business will sell at a high price and at a low cost. In the second quarter, we maximized the price-cost equation because it didn't have the any elasticity in the demand by volume. On the other hand, we are taking advantage of this lower cost moment to increase our inventory of finished products, finished goods. So our quarter second [ph] recorded 180,000 tonnes of finished goods at the end of June, and this number increased to 300,000. So we have material manufactured at an extremely low price and yet sufficient for a rally in the second half of the year. This is our crystal-clear strategy.

And 1 last question in mining if I may. You became clear that you have an ability for mining. I would like to understand regarding your contracts for purchasing from third parties. I just want to understand if you are going to meet your goals for volume for this year and next year, how many contracts do you have? And what would be the maturity of these agreement? Are they 6 months, 12 months, 3 years? I just want to get a little sense of your volume of sales expectations because you are building up your volumes based on purchases from third party.

Marcelo, I will ask Daniel dos Santos to answer your question. Daniel, over to you.

Well, Marcelo, we took advantage at the beginning of the year when we had very favorable conditions to renegotiate our agreements and contracts. We were expecting that the second half will be performing well in terms of the market. So we brought forward some important negotiations. And so for those critical contracts, we set a schedule of negotiations, which ended in June, July. It involved closing agreements with the most important suppliers to us. Contracts that we consider long-term for 3 years of maturity. And we were able then to ensure the volumes that we need for this year or next year in terms of a purchasing ore, so that's not an issue. Now what we see happening, and we need to revisit this, because we will need to redistribute our volumes as regarding port services. With saw the last, the recent auction that they were only able to sell 1 out of 2 lots. So this is something we are attentive to. We are working on the pricing of port services so as to avoid surprises in the future and to maximize our gain in the foreseeable future.

Our next question comes from Carlos de Alba for Morgan Stanley.

The question has to do with share buybacks. Could you explain to us why management or the company’s, Board of Director, has decided [indiscernible] the buyback when we could have reviewed net debt? Right now the company's spending BRL 1.2 billion in interest expenses per year. So just I wanted to understand if you can talk about the logic. The second is regarding an available-for-sale securities that was added back in the cash flow statement, it was BRL 52 million in the quarter. Can you talk about that, is that related to Usiminas shares? And what line does it appear in the income statement? Because it was added back to the cash flow to net income for the period. And then finally, regarding the negotiations with NAMISA, does the company, does CSN would offer shares to the NAMISA partners of SCN as a whole? Or the negotiations are exclusively limited to the iron ore business?

So the share buyback program. The second question dealt with impairment that we have in our investments and adjustments into our investment in the last question you asked for more detailed regarding the negotiation with our NAMISA partners. Okay, so let's take this step-by-step, Carlos. I will begin with your first question, the share buyback program. Actually, as I said before, this was a clear decision by our Board of Directors, their perception is that there is an important gain to be derived, given the current price of CSN shares. They are being traded today at a certain price and the Board of Directors believe that this price is below its fair value. And -- but it should increase. And this is considered so a necessary investment at this point because we will bring good results to our shareholders. We've got of our debt level. Our indebtedness level is being managed. We have already posted a reduction in our net debt over EBITDA ratio, and we expect to end the year with less than 2.5x. The second question. We have a principle of mark-to-market, our investment in Usiminas shares. This is done with position in every quarter. So our last mark-to-market at present a 7 75, the share prices dropped to 6 92, that is why we have this impairments of BRL 52 million in our results basically, which is an impairment of the Usiminas investment. And finally, your first question. Regarding the negotiations with NAMISA. What I can tell you is that all of the alternatives are on the table. But at this point, I cannot make a correlation with the share buyback program.

I never said that. So Carlos, please, can you repeat?

No, no, just the follow-up question on the BRL 52 million impairment, I would like to understand where that BRL 52 million charge was booked in the income statement?

It is in the line of other operating expenses, corporate expenses, bought back charge.

[Audio Gap]

I have a couple of questions, one is you have in the short-term, the bond maturity this January when you have a local currency debenture that's due, I think, the end of March next year, and they total about $640 million. So how do you intend to address those? And then can you guide me on how you intend to get leveraged to 2.5? It's 2.7 now. If I annualize this quarter, it's 3.2. My expectation is that EBITDA could fall year-over-year in the next 2 quarters and the leverage is going to go up. So, one, how do you address the debt maturities, the U.S. dollar bonds and the local bonds? And then how do you bring leverage down to 2.5?

The first question is about the maturity that we'll have early next year. In reality, right now, we're still working on to redefine the best option for the company as we speak. The second question is also about leverage or net debt over EBITDA and how we could come to 2.5 by year end. Basically, this is also due to our outlook for EBITDA growth last quarter -- in the last quarter. As I mentioned before, we expect to have improvement by the end of the year. And as a result, we expect to have an impact on the company's EBITDA.

If I can follow-up, is that possible?

Would you mind repeating your question, please?

If I can follow-up, If I assume that net debt is constant at 16.7 billion, okay, what I need is an EBITDA for the full year of about BRL 6.7 billion, and year-to-date is BRL 2.7 billion, which means that I've got to have about BRL 4 billion of EBITDA in the second half of the year. So about BRL 2 billion each quarter, so that seems to be difficult.

How we'll be able to achieve this EBITDA in the second half. In reality, I'd rather not to work on EBITDA projections. What I can tell you is that we're doing our job and our goal is to close the year with this ratio at 2.5 or 2.5, and [indiscernible] by increasing our EBITDA. If I may, I'd rather not work on any projections on these numbers, the management of the company [indiscernible].

[Operator Instructions] Thank you. There are no further questions. We would like to give the floor back to Mr. David Salama, IR officer, for the closing remarks.

Today, we could share a couple of things. Great efforts in order to lower cost and also improve our efficiency. When it comes to mining, our port is already running at 40 million tonnes. And by year end, we expect to have more improvement, including our sales. The government has already started to implement a series of incentives to our economy, and we expect to have positive impact so we can close the year with even better results. So now, we would like to thank you all again for joining us at this conference call. Please don't hesitate to contact our IR team for any questions that are pending or any questions that you might have at the future. Have a good day.

Thank you. This includes CSN's conference call. You may disconnect your lines now. Have a good day.