Kobe Steel Agree to New Iron Ore Pricing

Companhia Vale do Rio Doce (Vale), the world’s largest iron ore producer, concluded the iron ore price negotiations for 2008 with Kobe Steel, Ltd. (Kobe Steel), a Japanese steelmaker.

As an outcome of these negotiations, the iron ore prices for Southern System fines (SSF), FOB Tubarão, increased by 65% relatively to 2007. At the same time, due to its recognized superior quality, it was agreed that the price for Carajás iron ore fines (SFCJ) will have a premium of US$ 0.0619 per dry metric ton Fe unit over the 2008 price for SSF.

Therefore, the new reference prices per dry metric ton Fe unit for 2008 are US$ 1.1898 for SSF and US$ 1.2517 for SFCJ.

The magnitude of the price increase for 2008 reflects the continuity of very tight conditions still prevailing in the global iron ore market.

The iron ore price settlement with large high-quality companies and traditional customers such Kobe Steel is an evidence of our commitment to the benchmark pricing system, respecting the weight of the long-term relationship and trust involved in these negotiations.

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