Brazil’s Vale do Rio Doce studies new Chinese partnership

6 February 2006

Sao Paulo, Brazil, 06 Feb – Brazilian mining company Companhia Vale do Rio Doce (CVRD) is looking into establishing a new partnership in China to build a unit for producing iron pellets, the world’s largest iron ore producer said in Sao Paulo Monday.

The company’s chairman, Roger Agnelli, told Brazilian newspaper Valor Económico that the new unit, which would convert iron dust to iron pellets, would be located in China if studies showed that production costs would be lower than in Brazil.

Roger Agnelli said he was satisfied with the current partnership the company has with China’s Henan Longyu Energy Resources, in Henan province, in a coal mine.

Last week, the first shipment of 40 tons of Chinese coal produced by the joint venture arrived in Brazil.

Since June 2005, CVRD has held a 25 percent stake in Henan Longyu Energy Resources.

The Chinese coal will be used by CVRD in a company it owns in the Brazilian state of Espírito Santo.

CVRD expects to reach total production of 270 million tons of iron ore in 2006, against the 233.8 million tons mined in 2005.

Forecasts for 2007 point t the company’s producing 300 million tons of iron ore, particularly to meet demand from the Chinese market, the company’s largest foreign market.

Companhia Vale do Rio Doce has said it plans to invest some US$4.6 million in 2006 on increasing its production and launching new projects. (macauhub)