CSN also owns its own source of iron ore.[citation needed] Companhia Siderúrgica Nacional was created as a state-owned company on April 9, 1941, during the "Estado Novo era", during the term of Brazilian president, Getúlio Vargas, after an agreement between the American and the Brazilian governments (see the Washington Accords) for the construction of a facility that would provide steel for the Allies during the Second World War and later be an aid for Brazil's development.

The Presidente Vargas Steelworks, located at Volta Redonda, in Rio de Janeiro State, started production in 1946.

In 2005 reinforced its position as the largest iron-mining operation in the country, through a controlling stake in Companhia Vale do Rio Doce (CVRD).

The larger integrated flat steel producers operated as semiautonomous companies under the control of Siderbrás and were individually privatized during 1991 to 1993.

CSN also mines iron ore, limestone, and dolomite, and maintains strategic investments in railroads and power supply companies.

The company sells its steel products to customers in Brazil and 71 other countries in North America, Europe, and Asia through its sales force and distributors.

It also has control through shareholding in the railways MRS Logística, and the Companhia Ferroviária do Nordeste (CFN), in hydroelectric dams at Igarapava and Itá, and in factories in the United States and Portugal.

[citation needed] Protectionist measures adopted by the governments in some of CSN's main markets could adversely affect crucial export sales.

Those, and similar, measures could provoke an imbalance in the international steel market, which could adversely affect CSN's exports.

CSN's steel-making facilities are subject to a broad range of laws, regulations and permit requirements in Brazil relating to the protection of human health and the environment.

CSN's principal source of water is the Paraíba do Sul river, which runs through the city of Volta Redonda.

Brazilian government policies in the energy sector may have an adverse impact on the cost or supply of electricity for CSN aluminum-related and ferroalloy operations.

Moreover, the Brazilian Federal Congress is currently reviewing additional bills which would introduce further changes to Brazil's tax and social security laws.

Such reforms may affect Brazilian economic conditions generally, and may impose a higher tax burden on CSN.

If CSN is not able to pass the cost of such potential higher tax and social security burdens to customers, their profit margins may be adversely affected.

During 2002, the Central Bank raised Brazil's base interest rate by a total of 7.5% to 26.5% as a result of the growing economic crisis in Argentina, one of Brazil's primary trading partners, the lower level of growth of the U.S. economy and the economic uncertainty caused by the Brazilian presidential elections, among other factors.

The primary competitive factors in the domestic market include quality, price, payment terms and customer service.

• GalvaSud, a 100% subsidiary of CSN, provides material for exposed auto parts, using hot-dip galvanized steel and laser-welded blanks, a trend in this industry.