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  1. 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.”

  2. Agenda • Performance highlights • Fund raising and cost of capital • Macroeconomic and business outlook

  3. Performance highlights

  4. 2Q03 Highlights • Top-line (+14.5% yoy) and bottom-line growth (+US$ 470 million yoy) • Strong cash generation • Good sales performance but capacity limiting further growth. • Going for growth with disciplined capital expenditures • Strong cash generation allows good dividend distribution

  5. Sales revenues and adjusted EBITDA 2Q03 Gross Revenues US$ 1,219 million 2Q03 Adjusted EBITDA By product By market US$ 490 million

  6. Good sales performance 2Q03 vs 2Q02 41.5 million tons 6,900 million NTK

  7. A strong and stable operational performance Adjusted EBIT margin

  8. A good relative performance in the mining and metals industry Market Capas of August 14, 2003US$ billion 1H 03 Net EarningsUS$ million Source: Bloomberg LP and companies reports

  9. A consistent strong cash generation LTM Adjusted EBITDAUS$ million

  10. Iron ore and pellets Shipments constrained by mining and logistics capacity million tons 44.0 42.3 42.5 41.1 41.6 38.3 38.0 38.0 36.7 34.4

  11. Railroad transportation reached an all time high in 2Q03 million ntk 6,900 6,137 5,908 5,856 5,669 5,622 5,505 5,207 5,233 4,961

  12. CVRD is investing in projects with low capex costs and high risk-adjusted expected rates of return Estimated Product Capacity EstimatedCAPEX Projects 1,000 tons/year Conclusion US$/ton Iron Ore Brucutu 12,000 2008 12.22 18,000 2010 Fabrica Nova 10,000 2005 5.67 15,000 2009 Carajas 14,000 1Q04 10.29 Gongo Soco / Itabira 3,500 1Q04 7.14 Bauxite Paragominas I 4,500 1Q06 60.22 Alumina Alunorte Stages 4 and 5 1,800 1Q06 323.89 Copper Sossego 140 2Q04 2,434.00 Potash Taquari Vassouras 250 3Q05 191.43 Power Generation Candonga 140 MW 4Q03 572.14* Aimorés 330 MW 4Q04 561.82* Greenfield Brownfield * US$ / Kw

  13. Dividend payment on top of minimum dividend • Minimum dividend of US$ 1.04 paid in two equal installments of US$ 0.52 per share • April 30, 2003 • October 31, 2003 • Additional dividend of US$ 0.65 per share to be paid on October 31, 2003.

  14. A good dividend story 1999-2002 Average dividend per share US$ 1.57 Average dividend yield 7.0% 2003 Dividend per share US$ 1.69

  15. Preservation of a sound balance sheet is a key strategic issue

  16. Fund raising and cost of capital

  17. Issuing debt in a volatile bond market environment • US$ 250 million notes due 2013, backed by iron ore & pellets export receivables • Yield to maturity 4.48%, duration 5.38 years • Guaranteed by MBIA Insurance Corporation • Rated AAA Standard and Poors, Aaa Moody’s, AAA Fitch Ratings • US$ 300 million unsecured notes due 2013 • Yield to maturity 9.250%, duration 6.77 years • Rated Ba2 Moody’s • Spread to US Treasury: +479 bps • Spread to Brazilian Sovereign: -333 bps

  18. Issuing debt in a volatile bond market environment • Transactions priced amid high volatility in the Treasury market, with the 10-year UST reaching its highest yield since July 2002 • Transactions contribute to lengthen debt duration at relatively low costs

  19. CVRD 2013 is trading through the Brazilian sovereign debt curve YTM CVRD WACC must be reassessed Brazil Global 2013 % CVRD 2013 Source: JP Morgan Securities

  20. Macroeconomic and business outlook

  21. Business environment starting to improve • Global GDP is growing at a rate below its long term trend • However, US GDP grew faster than expected in 2Q03 and some leading indicators are providing signs that a recovery may be starting to take hold • SARS epidemic is over and the Chinese demand for minerals and metals was unscathed. It continues to drive global markets • Metals prices are already factoring the change in expectations

  22. Global iron ore demand is on a rising trend CRU Seaborne Iron Ore index 1998 1999 2000 2001 2002 2003 Index value (Jan 1998=100) Source: CRU

  23. Freight rate differentials continue to issue signals of excess demand for iron ore Brazil-Japan and Australia-Japan freight rates differential 07/03 iron ore price increase 9% price increase 2-digit iron ore price increase iron ore price increase 2-digit iron ore price decrease Source: Clarksons

  24. China’s quest for high Fe iron ore As a supplier of high Fe iron ore, CVRD has a high growth potential in the Chinese market % Pig iron Imported irona Average output growth ore share Fe contentb 2000 4.6 23.8 42.8 2001 12.2 29.8 45.6 2002 16.1 32.5 47.8 1H03 18.0 37.0 48.6 a: imported iron ore/ total iron ore supply b: average Fe content of total supply Sources: The Tex Report and CVRD

  25. Debottlenecking iron ore Working hard to anticipate capacity expansion in iron ore mining and logistics 2004 • Pier III – Ponta da Madeira maritime terminal – Northern System shipping capacity increases from 56 million to 74 million tpy • Carajás brownfield expansion – from 56 to 70 million tpy • Southern System – brownfield expansion – net increase of 3 million tpy

  26. Iron ore prospects • We estimate global seaborne demand for iron ore to reach 515 million tons in 2003, against 480 million tons in 2002 • We believe that the current shortage will continue throughout 2004 • We expect a modest increase in CVRD shipments in 2003 due to capacity constraints. However, growth will resume in 2004 with the commissioning of brownfield expansions • For the long term, we estimate seaborne trade to grow in line with the global GDP long run trend (3.6% per year)

  27. Alumina Prospects • World consumption is growing faster than production, with smelter expansions outpacing the growth in refinery capacity • As a consequence, spot prices stabilized in a range of US$ 280 – 300 per ton • We believe that market conditions will remain very tight for the next 18 months with spot prices starting to feed through into contract pricing • As announced capacity conditions are brought online, refineries utilization rates are expected to drop from 95% (2003/04) to 92% (2005/07) still representing a tight market • Alunorte capacity expansions will allow CVRD to benefit from the exposure to this scenario

  28. Logistics Prospects • Steel and grains were the main drivers of the demand for our logistics services • Services for the building materials industry and intermodal transportation are showing high growth rates • Delivery of orders for locomotives and wagons will allow us to accelerate growth

  29. CAEMI Consolidation • Consolidation into CVRD US GAAP financial statements will start in 3Q03 • Pro forma highlights for 1H03 (CVRD+CAEMI) Iron ore & pellet sales 101.7 million tons Iron ore sales to China 14.6 million tons Kaolin sales 537,000 tons Adjusted EBITDA US$ 1,067 million Total debt US$ 3,585 million Total debt/ LTM EBITDA 1.67x

  30. CVRD - The Best of Brazil www.cvrd.com.br e-mail: rio@cvrd.com.br

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