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
High performance in an unfriendly environment
Strong market fundamentals

4. High performance in an unfriendly environment

5. Several factors had a negative impact on 1Q05 performance
BRL appreciation against the USD
(7.8% yoy, 4.1% qoq)
Cyclical cost pressures
Seasonality
Operational challenges
Despite these factors, CVRD delivered a very good quarterly result

6. Production growth, currency volatility and some price hikes generated a US$ 351 million cost increase
US$ million 25 9
1,360 31 54 61
demurrage
depreciation 81
others
BRL
appreciation 90
energy
1,009
outsourced
services
material
1Q04
1Q05
Costs = COGS + SG&A

7. Top-line growth of 34. 5% yoy
Top-line growth of 34.5% yoy. No effect of 2005 iron ore & pellet prices yet
Price contribution to 1Q05 revenue yoy growth - US$ 417 million in US$ million

8. Strong demand, new projects and capacity creep are driving iron ore and pellets shipments growth ª
Capão
Xavier
Carajás
70 Mtpy
São Luís
ª Proforma data for 2002 and It includes Caemi data to facilitate comparison.

9. Strong operational performance evidenced by an above average adjusted EBIT margin
(1)
in %

10. Operational excellence across-the-board
adjusted EBIT margin by business area

11. Earnings performance in 1Q05 was one of the best in a streak of very good results
US$ million
Gains with asset sales
629
631

12. LTM adjusted EBITDA US$ billion
An impressive performance: twelve consecutive quarters of adjusted EBITDA growth
1Q05 adjusted EBITDA (2)
US$ 993 million
LTM adjusted EBITDA US$ billion

13. Fábrica Nova is ramping up. Current production running at 9.6 Mtpy
Fabrica Nova is the third CVRD iron ore project to come on stream over the last twelve months
1Q05 Capex – US$ million
Stay-in-business
US$ million
Projects
US$ million
R&D
US$ 28.2 million
Fábrica Nova is ramping up. Current production running at 9.6 Mtpy

14. CVRD investment is much more growth-focused than the industry average
growth capex¹ / total capex %
CVRD
Metals and mining industry
¹ projects and R&D
Sources: CVRD and Citigroup Smith Barney

15. A powerful cash flow and financial discipline drive continued balance sheet strengthening
(3)
(4)
2.5
1.0
1.5
1.0

16. Cost of capital reduction is a strategic priority given the capital intensiveness of the mining industry
CVRD enhanced its committed bank facilities (cbf) with a larger, longer term and lower cost transaction.
=> US$ 650 million
2 years for withdrawal + 2 years for repayment.
Commitment fee: 0.3%p.a. - Interest rate: Libor % p.a.
No restrictions linked to country risk.
Total cbf: US$ 750 million.

17. Strong market fundamentals

18. Growth scare destroyed US$ 63 billion of mining value in March/April
Growth scare destroyed US$ 63 billion of mining value in March/April. However, this is not supported by global macroeconomic fundamentals
Global GDP growth %
After averaging 6% in 2H03/1H04, global growth moderated reflecting a return to a more sustainable pace of expansion.
Source: IMF

19. Chicago Fed National Activity Index¹, 3M moving average
The U.S. economy is still growing above-trend. Inflation and interest rates remain subdued and domestic demand is robust
Chicago Fed National Activity Index¹, 3M moving average
¹ The CFNAI is a weighted average of 85 indicators of the US economic activity. Positive values indicate above-trend growth while negative values are associated with below-trend growth.
Source: Federal Reserve Bank of Chicago

20. GDP growth in China remains very strong and could be stronger than expected
China’s GDP growth
2005E=8.5%
2006E=8.0%
Sources: CEIC and CVRD

21. FAI is a good leading indicator of Chinese steel consumption
FAI is a good leading indicator of Chinese steel consumption. There is no indication of weakening

22. Brazil-Japan and Australia-Japan freight rates differential.
Freight rate differential reached an all-time high, reflecting the strength in iron ore trade
Brazil-Japan and Australia-Japan freight rates differential.
Source: Clarksons

23. Spot market prices at levels well above benchmark prices continue to evidence global market tightness
Jan/04
Mar/04
May/04
Jul/04
Sep/04
Nov/04
Jan/05
Mar/05
Sources: The Ministry of Land and Resources P.R.C. and CVRD

24. China’s iron ore imports
Chinese iron ore import growth remains on track, driving the seaborne trade
China’s iron ore imports
million tons
40.5%
23.5%
Sources: Tex Report, IISI and National Bureau of Statistics

25. Copper inventories are at critically low levels, contributing to support prices
Sources: LME, Comex, SFE and Bloomberg

26. Aluminum stocks are falling and alumina availability is constraining smelter production
Sources: LME, Comex and Bloomberg

27. Global alumina shortage is not expected to be corrected in 2005/06
Sources: Metal Bulletin, LME and Bloomberg

28. CVRD – A global leader

29. Appendix
Reconciliation of non-GAAP information and comparable GAAP information
(1) Adjusted EBIT (US$ million) 1Q04 4Q04 1Q05
Net operating revenues 1,656 2,317 2,213
COGS (908) (1,208) (1,247)
SG&A (101) (133) (113)
Research & development (23) (67) (34)
Other operating expenses (41) (87) (24)
Adjusted EBIT
(2) Adjusted EBITDA (US$ million)
Reconciliation between adjusted EBITDA vs. operating cash flow
  1Q04 4Q04 1Q05
Operating cash flow
Income tax
Monetary and foreign exchange losses (3) (169) (25)
Financial expenses
Net working capital (56) (48) 341
Others (36) (42) 24
Adjusted EBITDA

30. Appendix
Reconciliation of non-GAAP information and comparable GAAP information
(3) Total Debt / LTM Adjusted EBITDA 1Q04 4Q04 1Q05
Total debt / adjusted LTM EBITDA (x)
Total debt / LTM operating cash flow (x)
(4) LTM Adjusted EBITDA / LTM Interest Coverage 1Q04 4Q04 1Q05
Adjusted LTM EBITDA / LTM interest expenses (x)
LTM operating income / LTM interest expenses (x)