Brazilian CVRD’s Iron Ore Will Cost 19% More

Companhia Vale do Rio Doce (CVRD), the world’s largest iron ore producer, concluded the iron ore price negotiations for 2006 with Thyssen Krupp Stahl AG (Thyssen Krupp), the largest German steel maker.

As an outcome of these negotiations, iron ore prices for Carajás (SFCJ) and Southern System (SSF) fines increased by 19.0% relatively to 2005. Blast furnace pellets, both from Tubarão and Sao Luí­s, will be reduced by 3.0%.

CVRD reinforces its long-term commitment with clients, investing a significant amount of resources, despite of rising investment costs, in the production and logistics of iron ore.

For 2006, CVRD capex budget allocated US$ 2.1 billion for investments in ferrous minerals. Currently, CVRD is developing seven projects for iron ore and pellet production capacity expansion, which will come on stream between 2006 and 2008.

The iron ore price settlement with a traditional customer such as Thyssen Krupp, with whom CVRD has several decades of commercial relationship, is, according to the company, evidence of the weight of the long-term view involved in these negotiations.

Companhia Vale do Rio Doce – www.cvrd.com.br

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