CVRD focuses on mining

Denver — Brazil’s iron-ore giant Companhia Vale do Rio Doce (RIO-N) has sold its interest in steelmaker Companhia Siderurgica Nacional (SID-N) in order to focus on its mining and transportation businesses.

The two companies have long held shares in each other, much as the South African mining houses had done. And like the South Africans, CVRD has begun to unwind cross-holding stakes.

The company recently sold its 10.3% stake in CSN to Fundacao Vale do Rio Doce, while CSN sold its 8.7% stake in CVRD (held as a 32% interest in Valepar, which holds a 27.1% interest in CVRD) to Bradesplan Participacoes and Litel Participacoes.

CVRD also liquidated its 29.3% stake in Bahia Sul Celulose, its first step in withdrawing from the pulp-and-paper industry.

Between 1999 and 2000, CVRD’s earnings increased by 70%. Iron ore production was up to 119.7 million tonnes, confirming the major’s status as the world’s largest producer. CVRD’s railroads and shipping subsidiaries service the iron ore business.

For 2001, management has approved US$1.06 billion in capital expenditures, more than half of which is earmarked for the iron ore segment (including expansion of the Tubarau pellet complex).

More than US$21 million will be earmarked for various copper projects, including the Sossego joint venture in northern Brazil, in which Phelps Dodge (PD-N) holds a 51% interest. The partners expect to finish a feasibility study on the project soon. The project contains a resource estimated at 219 million tonnes averaging 1.1% copper and 0.34 gram gold per tonne.