2. Disclaimer
”This presentation may contain statements that express management’s 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 CVRD’s actual results to differ from expectations reflected in forward-looking statements, please see CVRD’s reports filed with the Brazilian Comissão de Valores Mobiliários and the U.S. Securities and Exchange Commission.”

3. Agenda
Performance highlights
Business outlook

4. Performance highlights

5. The challenge
A dramatic global demand growth for minerals and metals posed a major challenge.
Asset operation at record production levels, maximizing performance.
At the same time, CVRD managed to anticipate the low cost Carajás expansion jointly with the building of Pier III of PDM maritime terminal.

6. An excellent performance in 2003
An all-time high top line – US$ billion (+29.5%). Growth driven by larger volumes (63.3%) and higher prices (36.7%).
Record net earnings - US$ billion (+127.6%).
A record operational profit – EBIT equal to US$ billion (+15.1%) – but lower margins (30.7% vs. 34.7% in 2002).

7. Market Cap as of December 31, 2003 US$ billion
A good earnings performance compared to other metals and mining companies
Market Cap as of December 31, US$ billion
2003 Net Earnings US$ million
* 2003 CY
Source: Bloomberg LP and companies reports

8. Explaining EBIT margin decline
Caemi a
consolidation
15%
Margin reduction
FCA
consolidation
23%
Asset b
impairment
16%
Tax c
provisions 7%
Operational
Performance
39%
a non-recurring, non-cash asset impairment contributed to a 630 bps reduction in Caemi´s EBIT margin, 25.8% to 19.5%.
b non-recurring non-cash events.
c without any contemporaneous cash effect.

9. LTM adjusted EBITDA US$ million
A record cash generation in 2003 – adjusted EBITDA equal to US$ billion (+19.7%)
LTM adjusted EBITDA US$ million
a Caemi contribution to 2003 EBITDA = US$ 88 million
b FCA contribution to 2003 EBITDA = -US$ 28 million

10. 2003 Gross Revenues US$ 5.545 billion
Sales revenues and adjusted EBITDA
2003 Gross Revenues US$ billion
2003 Adjusted EBITDA
By product
By market
US$ billion

11. Disciplined capital spending
ROIC equal to 30.6%, staying above market average and last five years average of 21.2%.
Capex budget for 2004 equal to US$ 1.8 billion.
Growth capex of US$ 1.2 billion focused on iron ore, bauxite, alumina, copper, potash and port capacity expansions besides purchases of 88 locos and 3,178 railcars.
A US$ 78 million multicommodity and global mineral exploration program.

12. Main projects coming on stream in 2004
Carajás 70 Mtpy
Capacity increase: 14 Mtpy of iron ore.
Capex cost of US$ per ton – includes investment in mine, plant, railroad equipment and port.
Already in operation.
Sossego
Capacity: 140,000 ktpy of copper, 3 tpy of gold.
Capex cost: US$ 2,760 per ton.
Cash cost: US$ 0.30/ lb approximately.
The only greenfield copper project to come on stream in the world in 2004 and the largest up to 2007.
Ramping up, full commercial production starts in July.

13. Continued improvement in balance sheet – low leverage, high interest coverage, longer debt maturity
Average debt life rose from 2.98 years in Dec 2002 to 6.47 years in Jan 2004 without an increase in average debt cost.

14. Total debt / Adjusted EBITDA (x)
Continued improvement in balance sheet – low leverage, high interest coverage, longer debt maturity
Total debt / Adjusted EBITDA (x)
Average debt life rose from 2.98 years in Dec 2002 to 6.47 years in Jan 2004 without an increase in average debt cost.

15. Sales volumes boomed 2003 vs 2002 a 186.3 million tons Record b
26,295 million NTK
a - without CAEMI = million tons
b - without CAEMI = 423,000 tons

16. Iron ore and pellets - growth still constrained by capacity
All-time high
million tons
55.7
46.6
44.0
42.3
42.5
41.5
41.1
Caemi
36.7

17. 2003 global seaborne iron ore trade
Productivity gains allowed CVRD to maintain its leadership in the global iron ore market
2003 global seaborne iron ore trade
537.1 million tons
Source: CVRD

18. 2003 global seaborne manganese ore trade
CVRD is also one of the leading players in the global seaborne manganese ore trade
2003 global seaborne manganese ore trade
8.2 million tons
Source: CVRD

19. Railroad transportation
CVRD logistics services decoupled from Brazil´s GDP growth
Brazil GDP
CAGR = 1.8%
Railroad transportation
CAGR = 9.4%
billion ntk

20. Business outlook

21. A structural disequilibrium
There is a structural disequilibrium between demand and supply for several minerals and metals, that won’t be corrected in the short term.
Mining industry underinvested since the mid-nineties.
There is a secular Chinese demand growth.
Combination of Chinese growth, a synchronized global recovery and a weak USD contributes to extend the length of the current price cycle, making it similar to the late eighties.
CVRD, with large mineral deposits, is one of the main beneficiaries of the current disequilibrium.

22. Global steel consumption is growing fast, generating strong demand for iron and manganese ores
Global consumption is expected to increase 5.8% in 2004, China will be responsible for 64%
CAGR =5.8%
CAGR 04E-07E =3.6% a a
IISI mid-case projection
Source: IISI

23. Brazil-Japan and Australia-Japan freight rates differential
Freight rate differentials behavior signals a global excess demand for iron ore
Brazil-Japan and Australia-Japan freight rates differential
Jan/Feb 04
Chinese iron imports +36.7% yoy
World steel output +10.4% yoy
02/04
18% price increase
2-digit
iron ore price increase
iron ore price increase
9% price increase
iron ore price increase
2-digit
iron ore price decrease
Source: Clarksons

24. Freight rates are expected to remain high for long
Freight rates are expected to remain high for long. However, CVRD iron ore remains highly competitive in Asia.
CVRD has the largest and the highest quality reserves allowing flexibility to increase capacity at a relatively rapid pace.
Lowest opex and capex costs. Capex costs are approximately half of the competition.
Long term contracts and capability to customize products.
As it modernizes, value-in-use is becoming more important to the Chinese steel industry, meaning further demand growth for the high Fe low silica CVRD iron ore.

25. We expect global iron ore seaborne trade to grow 7.1% in 2004
million tons
World: CAGR 99-03=6.9% CAGR 04E-07E=4.7%
China: CAGR 99-03=26.8%
China’s
share
13.4% 15.4% 20.4% 23.0% 27.6% 30.4%
Source: CVRD

26. World aluminum demand is expected to increase by 7
World aluminum demand is expected to increase by 7.5 Mt between 2003 and This mean an additional demand for 17 Mt of alumina, making it hard to correct current disequilibrium
Source: Metal Bulletin and LME

27. Copper prices and inventories
Global IP growth, declining metal inventories, supply constraints and USD weakness help to support copper prices.
Copper prices and inventories
Source: LME

28. World copper market is expected to remain in deficit until 2007
Surplus (+) / Deficit (-) in 1,000 tons
Source: CRU and CVRD

29. Short term outlook for logistics services
Purchase in 2003/2004 of 139 locos and 3,600 wagons for general cargo transportation adds a good deal of capacity to meet existing demand.
Steel output, agricultural crops and Brazilian exports are expected to continue to grow at relatively high rates expanding demand for logistics services.
Good performance of Brazilian agricultural output in 2004 – 8% expected growth – generates a strong demand for potash.

30. CVRD - The Best of Brazil