Slide sem ttulo

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Companhia Vale do Rio Doce
The Quest for Value
Morgan Stanley Mining, Paper Packaging
Conference
New York March 2003
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Disclaimer
This presentation may contain statements that
express managements expectations about future
events or results rather than historical facts.
These forward-looking statements involve risks
and uncertainties that could cause actual results
to differ materially from those projected in
forward-looking statements, and CVRD cannot give
assurance that such statements will prove
correct. These risks and uncertainties include
factors relating to the Brazilian economy and
securities markets, which exhibit volatility and
can be adversely affected by developments in
other countries relating to the iron ore
business and its dependence on the global steel
industry, which is cyclical in nature and
relating to the highly competitive industries in
which CVRD operates. For additional information
on factors that could cause CVRDs actual results
to differ from expectations reflected in
forward-looking statements, please see CVRDs
reports filed with the Brazilian Comissão de
Valores Mobiliários and the U.S. Securities and
Exchange Commission.
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Contents

• Paths to Profitable Growth
• Recent Acquisitions
• Short Term Outlook
• Investment Appeal

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Paths to Profitable Growth
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CVRD enjoys many different paths to profitable
growth, but organic growth is our priority
Greenfield projects
Mineral exploration
Acquisitions
Brownfield projects
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A value creating project pipeline Capital
expenditures of approximately US 6 billion
Greenfield
Estreito
Santa Izabel
Paragominas
Capim Branco II
Capim Branco I
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Foz do Chapecó
IB Phase 4
Salobo
Aimorés
Sossego
Fabrica Nova
Brucutu
Alemão
Candonga
Metallics
Pta da Madeira Pier III
Semi-finished
2003
2004
2005
2006
2007
Reference US 100 M
Locomotives and Wagons
Locomotives and Wagons
Taquari Vassouras
Alunorte Stages 4 and 5
Praia Mole Phase1
Grain Silos
Alunorte Stage 3
Praia Mole Phase2
Brownfield
MRN
Carajas Mines
Gongo Soco
Expected after taxes rates of return higher than
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Execution depending on demand assessment.
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Non-iron ore projects will generate a new company
profile
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Is diversification worthwhile?

• Value Creation
• Under conservative assumptions, expected after
  taxes rates of return of non-iron ore projects
  are higher than the cost of capital.

• Additionally, from a portfolio risk management
  point of view, it makes sense to invest in those
  projects.

Return
Risk
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CAPEX program - 2003 Main Projects
Estimated Product Capacity Start up
CAPEX Projects 1,000 tons/year US/ton
Iron Ore Brucutu
12,000 2006 16.18 Fabrica Nova
13,000 2005 6.39 Carajas
14,000 2005 8.61 Gongo
Soco 3,000 2004 7.02 Bauxite Paragominas
I 4,500 2005 48.89 Alumina Alunorte Stages 4 and
5 1,800 2005 363.56 Copper Sossego 140 2004 2,447
.00 Potash Taquari Vassouras 250 2005 191.43 Powe
r Candonga 140 MW 2003 572.14 Aimorés 330
MW 2003 561.82
Greenfield Brownfield
Execution depending on demand assessment.
US / Kw
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Recent Acquisitions
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Acquisitions

• The availability of profitable organic growth
  opportunities and riskiness make acquisitions to
  be a second best in our quest for value.

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Acquisitions

• CST
• Temporary increase of CVRD stake - from 22.5 to
  a maximum of 30.6 of CST common stock.
• Investment about US 100 million.
• Substantial iron ore sales increase to CST from
  2006 onwards.

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Acquisitions

• Rio Doce Manganese Norway
• Price Paid US 17.6 million minus net cash
  position of US 7 million.
• Investment required US 2 million.
• Ferro manganese alloy future capacity 100,000
  tons/year.
• Expected annual EBITDA US 15 million.

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Over the last few years, CVRD restructured its
manganese and ferro-alloys business and it is now
one of the largest and most competitive global
players.
RDME
The Azul mine has the lowest cost of the global
manganese mining industry.
RDMN
2002 Revenue US 282 million 2002 EBITDA US 90
million
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Short Term Outlook Good prospects for CVRD iron
ore, alumina and logistics
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Short term prospects A good iron ore outlook

• A metals intensive Chinese economic growth is
  driving the demand for steel, iron ore, alumina
  and copper.
• China was responsible for 62 of the seaborne
  iron ore trade growth between 1992-02 and for 80
  between 2001 and 2002.
• We expect an additional seaborne demand of 25
  million tons for 2003, driven again by China. As
  there are short term supply constraints, market
  remains very tight.
• For the medium term, we expect seaborne iron ore
  trade to continue to grow faster than global
  steel output due to domestic iron ore
  substitution.

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Iron Ore

• Seaborne trade has grown faster than global
  steel output and in line with long term global
  GDP growth. This trend is expected to prevail
  over the medium term.

CAGR 1992-2002 3.6
CAGR 1992-2002 2.3
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A tight market for alumina

• Chinese alumina import growth to continue and the
  alumina market is likely to become tight this
  year and 2004 as there is very little capacity
  coming on stream.

Source Macquarie Research
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Logistics

• CVRD is making substantial investments in locos
  and wagons to meet already existent demand
  guaranteed by new contracts with clients

Railroad transportation-cargo ex-iron ore and
pellets CAGR 1999-02 12.6
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Investment Appeal
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Consistent good returns to shareholders

Average
1998-2002 2002 Dividend
Yield 7.7 6.8 Total Shareholder
Return 14.4 24.2 based on USD data
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Investment appeal

• A clearly defined long term strategy.
• Good strategy execution customer focus, cost and
  investment discipline, conservative financial
  policy, focus on shareholder value creation.
• Global market leadership in iron ore - stability
  with high profitability.
• World class mining assets capable of earning
  above average market returns.
• A pipeline of profitable growth opportunities.
• Strong and stable cash flow allows us to meet
  dividend expectations and capex funding without
  concerns about short term cash disruptions.
• Traded on BOVESPA (VALE3, VALE5) and NYSE (RIO,
  RIOPR).
• Last but not least, CVRD is traded at a discount
  to its peers.

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