Companhia Vale do Rio Doce (CVRD)

Companhia Vale do Rio Doce: Strong and Steady Growth

posted on: November 12, 2007 by Ron Haruni (Seeking Alpha)

The Brazilian mining giant Companhia Vale do Rio Doce (RIO) is the largest global producer and exporter of iron ore and pellets with over 40% of the seaborne market. It is the second largest mining company in the world, with a market capitalization of almost $180 billion and actively engaged in mineral exploration efforts in nineteen countries worldwide.

CVRD (Companhia Vale do Rio Doce) is involved in the production of nickel, copper, manganese, ferroalloys, precious metals, cobalt and other products.

In addition, the company is recognized for its excellence in elaborating and providing logistics systems for national and foreign customers, integrating company-owned assets such as rail transportation for its mining products, general cargo and passengers, bulk terminal storage, coastal shipping and port handling functions that are integrated with its mining operations. The company, through affiliates and joint ventures has investments in the aluminum, coal energy and steel businesses, including seven hydroelectric power plants operations and one under construction in Brazil, assuring the power supply for CVRD operational activities.
CVRD is well diversified through its subsidiaries. It is present on five continents and operational primarily under three principal lines of businesses, consisting of mining, aluminum, and logistics operations.

CVRD is planning to spend $59 billion over the next five years pursuing the goal of accelerating investments, with a massive investment in the development of world class assets such as iron ore, pellets, coal and nickel.

By 2012 iron ore production capacity is planned to increase to 450 million metric tons per year from actual 300 million. Nickel production will double in 2012 reaching 500.000 metric tons, with significant rises scheduled to take place in production of coal, aluminum, pellets, copper etc.

This investment program is global in scope, including Canada, Indonesia, Peru, Chile, United Kingdom, Australia and Europe to mention a few, aiming to solidify CVRD's logistic side of the business, along with power generation infrastructure, in order to support expansion.