CVRD, Baosteel Sign Contract to Assess Project Feasibility

Companhia Vale do Rio Doce, the world's largest producer of iron ore, and Baosteel Shanghai Group Corp., the largest Chinese steelmaker, decided to assess the feasibility of implementing a joint venture to build and operate an integrated steel plant in Sao Luis, Brazil. The plan is to build a facility capable of producing about 3.7 million tons per year of steel slabs. The project considers also the possibility for a future capacity expansion to 7.5 million tons of steel slabs per year.

CVRD and Baosteel signed with Ferrostaal AG, a German engineering services company, and CISDI Engineering Co. Ltd., a Chinese engineering company, an Engineering Service Agreement for the Basic Engineering and a Bankable Feasibility Study of the Project. Ferrostaal and CISDI will prepare a complete report to support decision-making by CVRD and Baosteel. Arcelor, the world's largest steelmaker, also intends to participate in the project.