A Vintage Time: Performance of Vale in 2007

    RIO DE JANEIRO, Brazil, Feb. 28 /CNW/ -- Companhia Vale do Rio Doce
(Vale) completed in 2007 the fifth consecutive year of extraordinary growth in
its activities. This process was sustained by continuous improvement in
operational and financial performance, greater diversification of its asset
portfolio and globalization of its operations. The adoption, in November 2007,
in all the countries where we operate of the name Vale and the new logo
symbolize this evolution.
    This transformation reflects the execution of a long-term strategic plan,
anchored in rigorous discipline in capital allocation, continuous search for
opportunities for value creation, a constant concern with costs, focus on
human capital and a strong commitment to corporate social responsibility.
    In the last five years Vale has invested US$ 40.7 billion, of which US$
20.6 billion in acquisitions and US$ 20.1 billion in maintenance of
operations, research and development (R&D) and project execution.
    The completion of twenty large projects, successful acquisitions and
increased productivity were responsible for an expansion of our total output
at an average annual rate of 11.6% between 2003 and 2007. In parallel to this
quantitative growth, nickel, copper, metallurgical and thermal coal, platinum
group metals and cobalt were added to our portfolio.
    In 2007 we broke nine different production records: iron ore (296 million
metric tons), pellets (17.6 million metric tons), finished nickel (247,900
metric tons), copper (284,200 metric tons), bauxite (9.1 million metric tons),
alumina (4.3 million metric tons), aluminum (551,000 metric tons), kaolin (1.3
million metric tons) and cobalt (2.5 thousand metric tons). Vale has
reaffirmed its global leadership as the world's largest producer of iron ore,
the second largest of nickel and one of the main producers of kaolin, cobalt,
ferroalloys and alumina.
    For the seventh year running, Vale led the negotiations for global
reference prices for iron ore. In February 2008 prices were settled for iron
ore fines, the industry's main product, representing 70% of the volume traded
in the seaborne market.
    As a result of negotiations with Asian and European customers and
reflecting continued global market tightness, new prices were fixed for fines
with an increase of 65% over 2007 for the Southern and Southeastern Systems
(SSF) iron ore, Fob Tubarao. At the same time, due to its recognized superior
quality, it was agreed that the price for Carajas iron ore fines (SFCJ) will
have a premium of US$ 0.0619 per dry metric ton Fe unit over the 2008 price
for SSF.
    Our gross revenue increased by nearly six times between 2003 and 2007,
going to US$ 33.1 billion from US$ 5.5 billion. Simultaneously, cash flow, as
measured by adjusted EBITDA (earnings before interests, taxes, depreciation,
and amortization), grew even faster, to US$ 15.8 billion in 2007 from US$ 2.1
billion in 2003. Our net earnings went up to US$ 11.8 billion in 2007 from US$
1.5 billion in 2003
    Over this five year period we have returned capital to shareholders
through dividend distribution to the tune of US$ 5.3 billion. Total
shareholder return was 73.7% per year, the highest rate amongst large
diversified mining companies. Vale is currently one of the 40 largest
companies in the world by market capitalization.

    The main highlights of Vale's performance in 2007 were:

    -- Record sales of iron ore and pellets (296 million metric tons), copper
       (300 thousand metric tons), alumina (3.253 million metric tons) and
       aluminum (562 thousand metric tons).
    -- Gross revenue of US$ 33.1 billion, the highest in the history of the
       Company, 28.8% more than that recorded in 2006.
    -- Operational profit, as measured by adjusted EBIT (earnings before
       interest and taxes), was a record US$ 13.2 billion, that is, 40.9% over
    -- Adjusted EBIT margin of 40.9% against 37.4% in 2006.
    -- Record adjusted EBITDA of US$ 15.8 billion compared with US$ 11.4
       billion in 2006. If we exclude the extraordinary inventory adjustment,
       adjusted EBITDA reached US$ 16.8 billion in 2007 as opposed to US$ 12.4
       billion in 2006.
    -- Record net earnings of US$ 11.8 billion, corresponding to earnings per
       share, on a fully diluted basis, of US$ 2.42, a 62.9% increase on the
       US$ 7.3 billion for 2006.
    -- Dividend distribution in 2007 was US$ 1.875 billion, with 44.2% growth
       relative to 2006. Dividend per share in 2007 reached an all-time high
       of US$ 0.39. Total shareholder return in 2007 was 123.0%.
    -- Investment, excluding acquisitions, totaled US$ 7.6 billion, a
       historical record and the highest in the global mining and metals
       industry in 2007.
    -- Investment in corporate social responsibility was US$ 652 million, of
       which US$ 401 million was spent on environmental protection and
       preservation and US$ 251 million on social projects.
    -- Rapid deleveraging as total debt/adjusted EBITDA ratio decreased to
       1.1x at the end of 2007, from 2.0x as of December 31, 2006.

For further information:

For further information: Roberto Castello Branco, 
roberto.castello.branco@vale.com, or Alessandra Gadelha, 
alessandra.gadelha@vale.com, or Patricia Calazans, 
patricia.calazans@vale.com, or Theo Penedo, theo.penedo@vale.com, or  Marcus
Thieme, marcus.thieme@vale.com, or Tacio Neto, tacio.neto@vale.com  , all of
Vale, +011-55-21-3814-4540 Web Site: http://www.vale.com                 

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