IIR Industry Alert: Brazils Mining Giant Moving On Global Supply Ventures And Deals

The relationship between CVRD and its Chinese associates may well broaden as the Brazilian company imports Chinese coal using the bulk carriers in which it exports the iron ore.

Houston -- August 6, 2002 -- Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). The dynamic acceleration into export markets and international alliances by the giant Brazilian mining, energy, and logistics group Companhia Vale do Rio Doce (CVRD)(BOVESPA:VALE3; NYSE:RIO; LATIBEX:XVALO) (Rio, Brazil) is making markets and competitors sit up after the companys moves went almost unnoticed for the past year. At the beginning of this month, the exports of iron ore and pellets by the company and its subsidiaries reached a record high of 54.9 million tons for the first six months of 2002 which represents a year-on-year increase of 8.4%. In the record month of March, 10.6 million tons were exported and another 10.6 million tons were shipped in June.

These figures are destined to grow as the result of the contract CVRD finalized in October 2001 with the Chinese state owned steelmaker Shanghai Baosteel Group Corporation (BAOSTEEL). The agreement includes the co-management of an 8 million ton per year iron ore company in Brazil, known as Baovale Mineraco and a long-term iron ore supply contract that will see CVRD supplying 6 million tons of ore per annum to Chinas largest steelmaker. This is projected to earn CVRD $2 billion total revenue over the next twenty years. Baosteels annual production of a wide range of steel types is now moving through the 20 million tons per annum mark. The Chinese company also signed up a mining joint venture in June with Hamersley Iron (Perth, Australia), a Rio Tinto (LSE:RIO) (London, United Kingdom) subsidiary in Australia. The Pilbara mine will supply Baosteel with 10 million tons of iron ore per annum for twenty years. China is the worlds fastest growing iron ore market.

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