CVRD Signs Agreement to Develop a New Alumina Refinery

Companhia Vale do Rio Doce (CVRD) announces that it has signed a memorandum of understanding to develop a new alumina refinery in northern Brazil with Hydro, a leading Norwegian producer of aluminum. The new refinery will be located in Barcarena, in the Brazilian state of Para, Brazil. The plant is to be developed in four stages, each one with 1.85 million metric tons per year (Mtpy) of alumina production and with a final total output of 7.4 Mtpy. Construction is expected to begin mid 2008, following Board approval. Hydro will hold a 20% stake in the project and will have the right to participate in further expansions. CVRD will supply the bauxite for the new refinery from its wholly owned Paragominas mine. Currently Paragominas supplies part of Alunorte bauxite needs through a 244 Km pipeline linking the mine to the refinery. CVRD (57%) and Hydro (34%) are shareholders of Alunorte, the world's largest alumina refinery. This initiative is consistent with CVRD's strategic focus on bauxite and alumina. The strategic focus on the upstream of the aluminum production chain is strongly supported by CVRD's competitive advantages derived from the development of large reserves of high quality bauxite, world class alumina operations and a highly efficient logistics network.