Vale do Rio Doce already held a contract with the Shougang Group for the sales of 4.4 million tons of ore, for the years between 2004 and 2008. The Brazilian company also recently signed contracts with two other Chinese groups, Baosteel and China Steel. At present, China imports one third of the world's ore production.

Companhia Vale do Rio Doce (CVRD), the Brazilian company mining giant and largest iron ore exporter in the world, posted record sales, export, and profit in the second quarter of this year.

Company net profit totalled US$ 504 million, 10.5% more than that registered in the second half of 2003 (US$ 456 million), and 24.4% greater than that registered in the first three months of the year (US$ 405 million).

Company gross revenues, in turn, totalled US$ 2.033 billion. There was a 66.8% increase in contrast to the second quarter in 2003, and 17.4% with regard to the first three months of 2004. Export in turn totalled US$ 1.524 billion, 60.9% more than in the same period last year. The main destinations were Europe, in the first place, followed by China, Japan, and the rest of Asia.

The trade of ferrous minerals (iron ore, pellets, manganese, and iron alloys) answered to most of the revenues, US$ 1.426 billion, being US$ 943 million from iron ore sales.

The volume exported in the second half reached 55.816 million tons of iron ore, a 34.5% growth with regard to the same period in 2003, and 5.4% in comparison to the first quarter this year. Ore production was 51.516 million tons, 10.7% more than in the previous quarter.

The company attributed this performance to growth in the sales volume and in traded product prices. CVRD stated that there is "strong global demand" for iron ore.

But Vale does not live exclusively off ferrous ores. The company also explores kaolin, potassium, and copper, operates in logistics and electric energy production, and in the production of aluminium.

Highlights

The beginning of copper production at Sossego mine, in the northern state of Pará, in June, was pointed out as one of the company highlights for the period. Product export has already generated the company around US$ 24 million.

According to information supplied by Vale, the mine has "proven and probable" reserves of 244.7 million tons of copper ore, with an estimated grade of 1% copper as well as approximately 0.26 grams of gold per ton as a by-product.

For exploration of the metal, Vale built a mill with the capacity for production of 467,000 tons of copper concentrate per year, equivalent to 140,000 tons of copper. Investment in installation of Sossego mine has been US$ 413 million since it was discovered six years ago.

With regard to investment in general, Vale invested a total of US$ 488.3 million in its operation in the second quarter of 2004, and US$ 846.3 million in the accumulated result for the first half.

Another fact that deserves highlighting in the second quarter, according to the company, was the creation of a joint venture with Chinese companies for the production of alumina, metallurgical coke, and coke. The contracts were signed when Brazilian President Luiz Inácio Lula da Silva was visiting China, in May.

Vale already has joint ventures with companies in other countries around the world, including Bahrein, where the company has 50% of the capital of an iron pellet factory, in association with Gulf Investment Corporation (GIC), from Kuwait.

Other highlights, according to the company, were two new long-term iron ore sales contracts signed in the second quarter. One of them, with company Cosipa, from the Brazilians southeastern state of São Paulo, forecasts the supply of 1.1 million tons a year for three years, and the other, with Japanese Nippon Steel Corporation, the largest ironworks in Japan, consists of the shipping of 70 million tonnes of iron ore for 10 years, starting in 2005.

Apart from that, the company also pointed out the sale of its 28.02% participation in ironworks Companhia Siderúrgica de Tubarão, a US$ 578,5 million deal.

ANBA – Brazil-Arab News Agency