This summary is based on the first quarter fiscal 2007 earnings call conducted by Companhia Vale do Rio Doce SA (RIO: chart) on May 4, 2007.

Chief Financial Officer: Fabio Barbosa

Executive Director of Logistics Division: Eduardo Bartolomeo

Executive Director: Jose Carlos Martins

Chief Financial Officer of CVRD Inco: Leonardo Moretzsohn

Key Investors Issues

- The earnings per share were 92 cents, up 86.9% over prior year.
- Revenue grew 63.4% over last year to $7.680 billion.
- Investments during the quarter totaled $1.360 billion.

First Quarter Fiscal 2007 Financial Highlights

Gross revenue of $7.680 billion was a new quarterly record.

This was a variation of 63.4% over prior year when the firm obtained revenue of $4.701 billion. Price increases were responsible for 77% of the growth in revenue of $2.979 billion. Asia maintains its position as the firm’s primary sales destination, providing 43.4% of total revenue. The revenue from sales to Asian countries practically doubled in a year, from $1.736 billion to $3.330 billion. The Americas were the second main destination with 33.4%, and Europe with 20.1%. On a country level, sales to China represented 16.1% of revenue, Brazil 14.8%, Japan 11.5% and the United States 9.9%.

Cost of goods sold (COGS) totaled $ 4.390 billion, against $ 2.530 billion in first quarter of 2006 and $4.387 billion in fourth quarter of 2006.

If the firm discounts from COGS related to the inventory adjustment ($984 million) and the depreciation variation ($194 million), the effective increase in relation to 1Q06 would be $682 million, of which $247 million due to greater production and sales volume and $114 million due to depreciation of the US dollar against the currencies in which the costs are incurred.

Costs with purchases of nickel products reached $446 million, against $188 million in 1Q06. This amount includes the acquisition of refined nickel for resale and also of concentrates and other intermediary products which are processed and refined in the firm’s plants.

Costs with acquisition of iron ore and pellets were $252 million, a reduction of $51 million compared with 1Q06. The volume of iron ore purchased in 1Q07 was 1.831 million metric tons, as against 2.303 million in 4Q06 and 3.214 million in 1Q06. Purchases of bauxite from Trombetas totaled $72 million, while alumina purchases reached $10 million. With the start of operations of the Paragominas mine, the volume of bauxite purchases should gradually return to 2005 levels, equivalent to the firm’s take in MRN. Manganese ore purchases amounted to $10 million, in line with the same period the previous year, at $9 million.

Energy costs – 14.2% of COGS – reached $483 million, made up of $280 million for fuel and gases and $203 million for electricity. The increase in sales volumes explains 62% of the $93 million rise in this cost item, while the effects of higher prices and of the depreciation of the dollar are responsible for 19.4% and 18.3%, respectively.

Expenses with electricity increased 36.2%, which is explained mainly by the higher prices paid for aluminum operations, which are vulnerable to appreciation in the Brazilian real and to hikes in metal prices.

Personnel expenses at 12.8% of COGS reached $437 million, a rise of 32% in relation to 1Q06. This rise reflects salaries adjustments ($75 million), an increase in overall personnel made necessary by growth of activities ($25 million) and the exchange rate effect ($6 million).

Depreciation and amortization, accounting for 11.3% of COGS, was $386 million, double that of 1Q06, influenced by the start up of operations in various projects in the last 12 months.

Sales, general and administrative expenses (SG&A) came to $268 million, 25.8% more than 1Q06, a reflection of greater expenses with personnel ($22 million), rents and taxes ($13 million), services ($12 million) and depreciation ($7 million).

Expenses with R&D reached $113 million in the quarter, an increase of $28 million over the same period in the previous year, in a pro forma basis, with $58 million being spent on research in Brazil.