Edgar Filing: Companhia Vale do Rio Doce

FORM 6-K

United States
Securities and Exchange Commission

Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the
Securities Exchange Act of 1934
For the month of
July 2008

Companhia Vale do Rio Doce

Avenida Graça Aranha, No. 26
20030-900 Rio de Janeiro, RJ, Brazil
(Address of principal executive office)

(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)

(Check One) Form 20-F þ Form 40-F o

(Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1))

(Check One) Yes o No þ

(Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7))

(Check One) Yes o No þ

(Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)

(Check One) Yes o No þ

(If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b). 82- .)

INCORPORATION BY REFERENCE

This report on Form 6-K is hereby incorporated by reference into the prospectus that forms part of the Registration Statement on Form F-3 of Companhia Vale do Rio Doce, File No. 333-143857, and the Registration Statement on Form F-3 of Vale Capital Limited, File No. 333-143857-01, each filed with the U.S. Securities and Exchange Commission on June 18, 2007, and shall be deemed to be a part thereof from the date on which this report is furnished to the SEC, to the extent not superseded by documents or reports subsequently filed or furnished.

COMPANHIA VALE DO RIO DOCE
INDEX TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION


	Page

Condensed Consolidated Balance Sheets as of March 31, 2008 and December 31, 2007		F-2

Condensed Consolidated Statements of Income for the three-month periods ended March 31, 2008, December 31, 2007 and March 31, 2007		F-4

Condensed Consolidated Statements of Cash Flows for the three-month periods ended March 31, 2008, December 31, 2007 and March 31, 2007		F-5

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three-month periods ended March 31, 2008, December 31, 2007 and March 31, 2007		F-6

Notes to the Condensed Consolidated Financial Information		F-7

F - 1

Condensed Consolidated Balance Sheets
Expressed in millions of United States Dollars


	March 31,		December 31,
	2008		2007
	(Unaudited)
Assets
Current assets
Cash and cash equivalents		2,264		1,046
Accounts receivable
Related parties		295		281
Unrelated parties		3,544		3,671
Loans and advances to related parties		103		64
Inventories		3,824		3,859
Deferred income tax		824		603
Recoverable taxes		1,290		1,159
Others		621		697

		12,765		11,380


Property, plant and equipment, net, and intangible assets		55,379		54,625
Investments in affiliated companies, joint ventures and other investments		2,942		2,922
Other assets
Goodwill on acquisition of subsidiaries		3,594		3,791
Loans and advances
Related parties		3		3
Unrelated parties		139		127
Prepaid pension cost		1,041		1,009
Prepaid expenses		200		200
Judicial deposits		1,166		1,124
Advances to suppliers — energy		572		574
Recoverable taxes		203		199
Unrealized gains on derivative instruments		606		673
Others		204		90

		7,728		7,790

TOTAL		78,814		76,717

The accompanying notes are an integral part of this condensed consolidated financial information.

F - 2

Condensed Consolidated Balance Sheets
Expressed in millions of United States Dollars
(Except number of shares)

(Continued)


	March 31,			December 31,
	2008			2007
	(Unaudited)
Liabilities and stockholders’ equity
Current liabilities
Suppliers		2,442			2,430
Payroll and related charges		543			734
Minimum annual dividends attributed to stockholders		2,683			2,683
Current portion of long-term debt — unrelated parties		1,301			1,249
Short-term debt		291			167
Loans from related parties		22			6
Provision for income taxes		524			1,198
Taxes payable and royalties		332			322
Employees post retirement benefits		132			131
Sub-concession		225			210
Unrealized losses on derivative instruments		557			346
Provisions for asset retirement obligations		63			64
Others		524			543

		9,639			10,083


Long-term liabilities
Employees post retirement benefits		2,060			2,204
Long-term debt — unrelated parties		18,909			17,608
Provisions for contingencies (Note 14 (c))		2,220			2,453
Unrealized losses on derivative instruments		—			5
Deferred income tax		5,640			5,725
Provisions for asset retirement obligations		912			911
Sub-concession		225			210
Others		1,634			1,687

		31,600			30,803

Minority interests		2,557			2,555


Commitments and contingencies (Note 14)

Stockholders’ equity (Note 11)
Preferred class A stock — 7,200,000,000 no-par-value shares authorized and 1,919,516,400 issued		4,953			4,953
Common stock — 3,600,000,000 no-par-value shares authorized and 2,999,797,716 issued		7,742			7,742
Treasury stock — 30,341,012 preferred and 56,582,040 common shares		(389	)		(389	)
Additional paid-in capital		498			498
Mandatory convertible notes in common shares		1,288			1,288
Mandatory convertible notes in preferred shares		581			581
Other cumulative comprehensive income		1,402			1,655
Undistributed retained earnings		15,508			15,317
Unappropriated retained earnings		3,435			1,631

		35,018			33,276

TOTAL		78,814			76,717

The accompanying notes are an integral part of this condensed consolidated financial information.

F - 3

Condensed Consolidated Statements of Income
Expressed in millions of United States Dollars
(Except per share amounts)


	Three-month period ended (unaudited)
				December 31,
	March 31, 2008			2007			March 31, 2007
Operating revenues, net of discounts, returns and allowances
Sales of ores and metals		6,857			7,213			6,634
Revenues from logistic services		362			389			331
Aluminum products		646			672			649
Other products and services		183			138			66

		8,048			8,412			7,680
Taxes on revenues		(216	)		(249	)		(191	)

Net operating revenues		7,832			8,163			7,489


Operating costs and expenses

Cost of ores and metals sold		(3,440	)		(3,687	)		(3,813	)
Cost of logistic services		(212	)		(231	)		(188	)
Cost of aluminum products		(493	)		(486	)		(369	)
Others		(97	)		(100	)		(20	)

		(4,242	)		(4,504	)		(4,390	)
Selling, general and administrative expenses		(322	)		(424	)		(268	)
Research and development		(190	)		(262	)		(113	)
Others		(163	)		(290	)		(16	)

		(4,917	)		(5,480	)		(4,787	)

Operating income		2,915			2,683			2,702

Non-operating income (expenses)
Financial income		55			58			121
Financial expenses		(878	)		(227	)		(659	)
Foreign exchange and monetary gains, net		112			304			770
Gain on sale of investments		80			—			—

		(631	)		135			232

Income before income taxes, equity results and minority interests		2,284			2,818			2,934

Income taxes
Current		(654	)		(610	)		(833	)
Deferred		296			394			191

		(358	)		(216	)		(642	)

Equity in results of affiliates and joint ventures and other investments		119			136			138
Minority interests		(24	)		(165	)		(213	)

Net income		2,021			2,573			2,217


Basic and diluted earnings per share
Earnings per preferred share		0.41			0.52			0.46
Earnings per common share		0.41			0.52			0.46
Earnings per convertible notes linked to preferred share (*)		0.66			0.79			—
Earnings per convertible notes linked to common share (*)		0.74			0.85			—


(*)		Basic earnings per share only as dilution assumes conversion.

The accompanying notes are an integral part of this condensed consolidated financial information.

F - 4

Condensed Consolidated Statements of Cash Flows
Expressed in millions of United States Dollars



	Three-month period ended (unaudited)
				December 31,
	March 31, 2008			2007			March 31, 2007
Cash flows from operating activities:
Net income		2,021			2,573			2,217
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation, depletion and amortization		766			737			392
Dividends received		48			112			90
Equity in results of affiliates and joint ventures		(119	)		(136	)		(138	)
Deferred income taxes		(296	)		(394	)		(191	)
Loss on disposal of property, plant and equipment		37			104			—
Gain on sale of investments		(80	)		—			—
Foreign exchange and monetary losses (gains), net		(146	)		(266	)		(772	)
Unrealized derivative losses (gains), net		318			(326	)		(85	)
Minority interests		24			165			213
Unrealized interest (income) expense, net		81			(23	)		173
Others		(18	)		46			23
Decrease (increase) in assets:
Accounts receivable		202			135			103
Inventories		(64	)		(558	)		673
Others		(155	)		80			(404	)
Increase (decrease) in liabilities:
Suppliers		(54	)		429			46
Payroll and related charges		(248	)		106			(161	)
Income taxes		(718	)		(582	)		(54	)
Others		(191	)		260			157

Net cash provided by operating activities		1,408			2,462			2,282

Cash flows from investing activities:
Loans and advances receivable
Related parties
Additions		—			(32	)		—
Repayments		25			—			10
Others		—			(1	)		—
Judicial deposits		(34	)		(50	)		(32	)
Additions to investments		(13	)		(230	)		(52	)
Additions to property, plant and equipment		(1,625	)		(2,747	)		(1,106	)
Proceeds from disposal of investments		134			—			—
Cash used to acquire subsidiaries, net of cash acquired		—			—			(2,023	)

Net cash used in investing activities		(1,513	)		(3,060	)		(3,203	)

Cash flows from financing activities:
Short-term debt, additions		801			2,021			497
Short-term debt, repayments		(672	)		(1,877	)		(206	)
Loans
Related parties
Additions		18			1			117
Repayments		(2	)		(39	)		(113	)
Issuances of long-term debt
Others		1,330			646			6,463
Repayments of long-term debt
Others		(105	)		(114	)		(6,205	)
Interest attributed to stockholders		—			(1,050	)		—
Dividends to minority interest		—			(429	)		(61	)

Net cash provided by (used in) financing activities		1,370			(841	)		492

Increase (decrease) in cash and cash equivalents		1,265			(1,439	)		(429	)
Effect of exchange rate changes on cash and cash equivalents		(47	)		(23	)		(65	)
Cash and cash equivalents, beginning of period		1,046			2,508			4,448

Cash and cash equivalents, end of period		2,264			1,046			3,954

Cash paid during the period for:
Interest on short-term debt		(5	)		(8	)		(1	)
Interest on long-term debt		(279	)		(361	)		(205	)
Income tax		(1,672	)		(732	)		(606	)
Non-cash transactions
Interest capitalized		(17	)		(15	)		(22	)

The accompanying notes are an integral part of this condensed consolidated financial information.

F - 5

Condensed Consolidated Statements of Changes in Stockholders’ Equity
Expressed in millions of United States Dollars
(except number of shares and per-share amounts)


	Three-month period ended (unaudited)
				December 31,
	March 31, 2008			2007			March 31, 2007
Preferred class A stock (including twelve special shares)
Beginning and end of the period		4,953			4,953			4,702

Common stock
Beginning and end of the period		7,742			7,742			3,806

Treasury stock
Beginning and end of the period		(389	)		(389	)		(389	)

Additional paid-in capital
Beginning and end of the period		498			498			498

Mandatory convertible notes in common shares
Beginning and end of the period		1,288			1,288			—

Mandatory convertible notes in preferred shares
Beginning and end of the period		581			581			—

Other cumulative comprehensive income (deficit)
Cumulative translation adjustments
Beginning of the period		1,340			1,003			(1,628	)
Change in the period		(205	)		337			(44	)

End of the period		1,135			1,340			(1,672	)

Unrealized gain on available-for-sale securities
Beginning of the period		211			229			271
Change in the period		(6	)		(18	)		315

End of the period		205			211			586
Superavit (deficit) accrued pension plan
Beginning of the period		75			540			353
Change in the period		(15	)		(465	)		(9	)

End of the period		60			75			344

Cash flow hedge
Beginning of the period		29			23			—
Change in the period		(27	)		6			(10	)

End of the period		2			29			(10	)

Total other cumulative comprehensive income (deficit)		1,402			1,655			(752	)

Undistributed retained earnings
Beginning of the period		15,317			6,560			9,555
Transfer from unappropriated retained earnings		191			8,757			437

End of the period		15,508			15,317			9,992

Unappropriated retained earnings
Beginning of the period		1,631			10,524			2,505
Net income		2,021			2,573			2,217
Interest attributed to mandatory convertible debt
Preferred class A stock		(8	)		(8	)		—
Common stock		(18	)		(18	)		—
Dividends and interest attributed to stockholders
Preferred class A stock		—			(1,049	)		—
Common stock		—			(1,634	)		—
Appropriation to undistributed retained earnings		(191	)		(8,757	)		(437	)

End of the period		3,435			1,631			4,285

Total stockholders’ equity		35,018			33,276			22,142


Preferred class A stock (including twelve special shares)		1,919,516,400			1,919,516,400			959,758,200
Common stock		2,999,797,716			2,999,797,716			1,499,898,858
Treasury stock
Beginning of the period		(86,923,184	)		(86,923,184	)		(43,463,536	)
Sales		132			—			1,872

End of the period		(86,923,052	)		(86,923,184	)		(43,461,664	)

		4,832,391,064			4,832,390,932			2,416,195,394

Dividends and interest attributed to stockholders (per share):
Preferred class A stock (including twelve special shares)		—			0.56			—
Common stock		—			0.56			—

The accompanying notes are an integral part of this condensed consolidated financial information

F - 6

		Notes to the Condensed Consolidated Financial Information Expressed in millions of United States Dollars, unless otherwise stated

1		The Company and its operation

		Companhia Vale do Rio Doce (Vale) is a limited liability company, duly organized under the laws of the Federative Republic of Brazil. Operations are carried out through Vale and our subsidiary companies, joint ventures and affiliates, and mainly consist of mining, non-ferrous metal production, logistics and steel activities.

		On March 31, 2008, the main operating subsidiaries we consolidate are described as follows:

% voting

Head office

Subsidiary

% ownership

capital

location

Principal activity

Alumina do Norte do Brasil S.A. — Alunorte (“Alunorte”)

57.03

61.04

Brazil

Alumina

Alumínio Brasileiro S.A. — Albras (“Albras”)

51.00

Brazil

Aluminum

CADAM S.A (CADAM)

61.48

100.00

Brazil

Kaolin

CVRD International S.A.

100.00

Swiss

Trading

CVRD Overseas Ltd.

100.00

Cayman Islands

Trading

Vale Inco Limited

100.00

Canada

Nickel

Ferrovia Centro-Atlântica S. A.

100.00

Brazil

Logistics

Minerações Brasileiras Reunidas S.A. — MBR (3)

92.99

Brazil

Iron ore

Mineração Onça Puma Ltda

100.00

Brazil

Nickel

Pará Pigmentos S.A. (“PPSA”)

86.17

86.57

Brazil

Kaolin

PT International Nickel Indonesia Tbk (“PT Inco”) (1)

61.16

Indonesia

Nickel

Rio Doce Manganês S.A.

100.00

Brazil

Manganese and Ferroalloys

Rio Doce Manganèse Europe — RDME

100.00

France

Ferroalloys

Rio Doce Manganese Norway — RDMN

100.00

Norway

Ferroalloys

Valesul Alumínio S.A.

100.00

Brazil

Aluminum

Vale Australia Pty Ltd. (2)

100.00

Australia

Coal


(1)		Through Vale Inco Limited;

(2)		Subsidiary consolidated as from April 2007 (Note 8); and

(3)		See Note 5.

2		Basis of consolidation

		All majority-owned subsidiaries in which we have both share and management control are consolidated. All significant intercompany accounts and transactions are eliminated. Our variable interest entities in which we are the primary beneficiary are consolidated. Investments in unconsolidated affiliates and joint ventures are accounted for under the equity method (Note 8).

		We evaluate the carrying value of our equity accounted investments in relation to publicly quoted market prices when available. If the quoted market price is below book value, and such decline is considered other than temporary, we write-down our equity investments to quoted market value.

		We define joint ventures as businesses in which we and a small group of other partners each participate actively in the overall entity management, based on a shareholders agreement. We define affiliates as businesses in which we participate as a minority stockholder but with significant influence over the operating and financial policies of the investee.

		Our participation in hydroelectric projects are made via consortium contracts under which we have an undivided interest in assets and are liable for our proportionate share of liabilities and expenses, which are based on our proportionate share of power output. We do not have joint liability for any obligations, and all our recorded costs, income, assets and liabilities relate to the entities within our group. Since there is no separate legal entity for these projects, there are no separate financial statements, income tax return, net income or shareholders’ equity. Brazilian Corporate Law explicitly states that no separate legal entity arises from consortium contract. Accordingly, we recognize our proportionate share of costs and our undivided interest in assets relating to hydroelectric projects.

F - 7

3		Basis of Presentation

		Our condensed consolidated interim financial information for the three-month periods ended March 31, 2008, December 31, 2007, and March 31, 2007, prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”), are unaudited. However, in our opinion, such condensed consolidated financial information includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for interim periods. The results of operations for the three-month period ended March 31, 2008, are not necessarily indicative of the actual results expected for the full fiscal year ending December 31, 2008.

		These condensed consolidated financial information should be read in conjunction with our consolidated financial statements as of and for the year ended December 31, 2007, prepared in accordance with US GAAP.

		In preparing the condensed consolidated financial information, we are required to use estimates to account for certain assets, liabilities, revenues and expenses. Our condensed consolidated financial statements therefore include various estimates concerning the selection of useful lives of property, plant and equipment, provisions necessary for contingent liabilities, fair values assigned to assets and liabilities acquired and assumed in business combinations, income tax valuation allowances, employee post-retirement benefits and other similar evaluations. Actual results may vary from our estimates.

		For the Brazilian operations, the U.S. Dollar amounts for the periods and years presented have been remeasured (translated) from the Brazilian currency amounts in accordance with the criteria set forth in Statement of Financial Accounting Standards (SFAS) 52 — “Foreign Currency Translation” (SFAS 52).

		We have remeasured all assets and liabilities into U.S. dollars at the current exchange rate at each balance sheet date (R$ 1.7491 and R$ 1.7713 at March 31, 2008 and December 31, 2007, respectively to US$ 1.00 or the first available exchange rate if exchange on the last day of the period, was not available), and all accounts in the statements of income (including amounts relating to local currency indexation and exchange gains or losses on assets and liabilities denominated in foreign currency) at the average rates prevailing during the period. The translation gain or loss resulting from this remeasurement process is included in the cumulative translation adjustments account in stockholders’ equity.

4		Recently-issued accounting pronouncements

		In March 2008, the (FASB) issued SFAS 161, “Disclosures about Derivative Instruments and Hedging Activities”. The new standard is intended to improve financial reporting about instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position, financial performance, and cash flows. It is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008 with early application encouraged. We are currently studying the possible effects which may arise upon adoption of this standard.

		In February 2008, the Financial Accounting Standard (FASB) issued FSP FAS 157-2, “Effective Date of FASB Statement No. 157”. The objective of this FSP is to delay the effective date of FASB Statement No. 157, Fair Value Measurements, for nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis. The delay is intended to allow the Board and constituents additional time to consider the effect of various implementation issues that have arisen, or that may arise, from the application of Statement 157. This FSP shall be effective upon issuance.

F - 8

5		Major acquisitions and disposals

		In February 2008, we sold all of our interest in Jubilee Mines N.L. (held by our subsidiary Vale Inco), corresponding to 4.83% of its common shares, for US$134 generating a gain of US$80.

		In October, 2007 we were awarded, in a public auction, a 30-year sub-concession agreement, under which we purchased the right to use the Ferrovia Norte Sul S.A. — FNS for US$837, payable in three installments. The first installment, equivalent to US$ 412 and corresponding to 50% was paid in December 2007. The second and third installments, each one representing 25% of the total amount, are to be paid in December 2008, and 2009, upon the completion of the railroad. The outstanding installments are indexed to the general price index (IGP-DI) and accrue interest of 12% p.a.

		In July 2007, we sold our interest in Lion Ore Mining International Ltd. (held by our subsidiary Vale Inco), corresponding to 1.8% of its common shares for US$105, generating a gain of US$80.

		In June 2007, we sold through primary and secondary public offerings, 25,213,664 common shares, representing 57.84% of the total capital of our subsidiary Log-In Logística Intermodal S.A. (“Log-In”) for US$179, recording a gain of US$155.

		In July 2007, we sold an additional 5.1% stake in Log-In for US$24 recording a gain of US$21. At December 31, 2007, we held 31.33% of the voting and total capital of this entity, which is accounted for as at the equity method.

		In May 2007, we sold in a public offering, part of our shareholding in Usinas Siderúrgicas de Minas Gerais S.A. — USIMINAS, an available-for-sale investee, for US$728, recording a gain of US$456. We have retained the minimum number of shares required to participate in the current shareholders agreement of the investee.

		In May 2007, we acquired a further 6.25% of the total share capital of Empreendimentos Brasileiros de Mineração S.A. (EBM), whose main asset is its interest in MBR, for US$231 and as a result, our direct and indirect stake in MBR increased to 92.99% of total and voting capital. We simultaneously entered into an usufruct agreement with minority shareholders whereby they transferred to us all rights and obligations with respect to their EBM shares, including rights to dividends for the next 30 years, for which we will make an initial payment of US$61 plus an annual fee of US$48 for each of the next 29 years. The present value of the future obligation is recorded as a liability and the corresponding charge recorded to minority interests in the balance sheet.

		In April 2007, we concluded the acquisition of 100% of Vale Australia (former AMCI Holdings Australia Pty — AMCI HA), a private company domiciled in Australia which owns and operates coal mines in that country, for US$656.

		The purchase price allocations based on the fair values of acquired assets and liabilities was based on management’s internal valuation estimates.

		Such allocations were finalized based on valuation and other studies, performed by us with the assistance of outside valuation specialists. Accordingly, the purchase price allocation adjustments for acquisitions are as follows:


Valuation	656
Purchase price	(186	)
Book value of assets acquired and liabilities assumed, net	(458	)
Adjustment to fair value of property, plant and equipment	(29	)
Deferred taxes on the above adjustments	52

Goodwill	35

In March 2007, we acquired the remaining 18% minority interest in Ferro-Gusa Carajás for US$20, which then became a wholly-owned subsidiary.

F - 9

6		Income taxes

		Income taxes in Brazil comprise federal income tax and social contribution, which is an additional federal tax. The statutory composite enacted tax rate applicable in the periods presented is 34% represented by a 25% federal income tax rate plus a 9% social contribution rate.

		In other countries where we have operations, the applicable tax rates vary from 1.67% to 40%.

		The amount reported as income tax expense in our consolidated financial statements is reconciled to the statutory rates as follows:


	Three-month period ended (unaudited)
	March 31, 2008									December 31, 2007									March 31,
	Brazil			Foreign			Total			Brazil			Foreign			Total			2007
Income before income taxes, equity results and minority interests		522			1,762			2,284			1,299			1,519			2,818			2,934

Federal income tax and social contribution expense at statutory enacted rates		(177	)		(599	)		(776	)		(442	)		(516	)		(958	)		(998	)
Adjustments to derive effective tax rate:
Tax benefit on interest attributed to stockholders		169			—			169			129			—			129			103
Difference on tax rates of foreign income		—			258			258			—			676			676			193
Difference on tax basis of equity investees		—			(20	)		(20	)		—			(59	)		(59	)		(32	)
Tax incentives		15			—			15			7			—			7			52
Other non-taxable gains (losses)		(59	)		55			(4	)		(12	)		1			(11	)		40

Federal income tax and social contribution expense in consolidated statements of income		(52	)		(306	)		(358	)		(318	)		102			(216	)		(642	)

		We have certain income tax incentives relating to our manganese operations in Carajás, our potash operations in Rosario do Catete, our alumina and aluminum operations in Barcarena and our kaolin operations in Ipixuna and Mazagão. The incentives relating to manganese comprise partial exemption up to 2013. The incentive relating to alumina and potash comprise full income tax exemption on defined production levels, which expires in 2009 and 2013, respectively, while the partial exemption incentives relative to aluminum and kaolin expire in 2013. An amount equal to the tax saving must be appropriated to a reserve account within stockholders’ equity and may not be distributed in the form of cash dividends.

		We also have income tax incentives related to our Goro Project under development in New Caledonia. These incentives include an income tax holiday during the construction phase of the project and throughout a 15-year period commencing in the first year in which commercial production, as defined by the applicable legislation, is achieved followed by a five-year, 50 per cent income tax holiday. In addition, Goro qualifies for certain exemptions from indirect taxes such as import duties during the construction phase and throughout the commercial life of the project. Certain of these tax benefits, including the income tax holiday, are subject to an earlier phase out should the project achieve a specified cumulative rate of return. We are subject to a branch profit tax commencing in the first year in which commercial production is achieved, as defined by the applicable legislation. To date, we have not recorded any taxable income for New Caledonian tax purposes. The benefits of this legislation are expected to apply with respect to taxes payable once the Goro project is in operation.

		Effective January 1, 2007, the Company adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes.

		We are subject to examination by the tax authorities for up to five years regarding our operations in Brazil, ten years for Indonesia, and five and six years for Canada, except for Newfoundland which has no limit.

		Brazilian tax loss carryforwards have no expiration date though offset is restricted to 30% of annual income before tax.

F - 10

The reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (unaudited): (See note 14 (b) Tax — related actions)


Balance at January 1, 2008	1,046

Increase resulting from tax positions taken	35
Decrease resulting from tax positions taken	(14	)
Changes in tax legislation	6
Effects of translation from Brazilian Reais into U.S.	3

Balance at March 31, 2008	1,076

Inventories


	March 31, 2008		December 31, 2007
	(Unaudited)
Finished products
Nickel (co-products and by-products)		1,743		1,812
Iron ore and pellets		571		588
Manganese and ferroalloys		122		106
Alumina		52		44
Aluminum		99		132
Kaolin		41		42
Copper concentrate		32		15
Coal		39		38
Others		15		36
Spare parts and maintenance supplies		1,110		1,046

		3,824		3,859

There was no write down recorded in the periods presented.

F - 11

Investments in affiliated companies and joint ventures


														Equity in earnings (losses) of investee
	March 31, 2008									Investments				adjustments								Dividends received
														Three-month period ended (unaudited)								Three-month period ended (unaudited)
							Net income
	Participation in				Net		(loss) for the			March 31,		December		March 31,			December			March 31,		March 31,		December		March 31,
	capital (%)				equity		period			2008		31, 2007		2008			31, 2007			2007		2008		31, 2007		2007
	voting		total
Ferrous
Companhia Nipo-Brasileira de Pelotização — NIBRASCO (1)		51.11		51.00		114		(8	)		58		61		(4	)		2			6		—		—		—
Companhia Hispano-Brasileira de Pelotização — HISPANOBRÁS (1)		51.00		50.89		90		4			46		43		2			(3	)		6		—		—		—
Companhia Coreano-Brasileira de Pelotização — KOBRASCO (1)		50.00		50.00		95		5			47		45		2			4			5		—		21		—
Companhia Ítalo-Brasileira de Pelotização — ITABRASCO (1)		51.00		50.90		92		3			47		46		1			—			4		—		—		—
SAMARCO Mineração S.A. — SAMARCO (2)		50.00		50.00		1,078		97			600		546		48			56			60		—		25		50
Minas da Serra Geral S.A. — MSG		50.00		50.00		62		1			31		30		1			1			1		—		—		—
Others		—		—		—		—			30		30		2			3			1		—		—		—

											859		801		52			63			83		—		46		50

Logistics
MRS Logística S.A		37.86		41.50		904		70			375		342		29			34			23		—		24		—
LOG-IN Logística Intermodal S.A. (3)		31.33		31.33		353		17			110		107		5			6			—		—		—		—

											485		449		34			40			23		—		24		—

Steel
Usinas Siderúrgicas de Minas Gerais S.A. — USIMINAS (cost $180)		—		—		—		—			583		465		—			—			—		—		—		—
California Steel Industries Inc. — CSI		50.00		50.00		337		11			169		163		6			(7	)		1		—		—		11
THYSSENKRUPP CSA Companhia Siderúrgica (4)		11.50		11.50		—		—			392		388		—			—			—		—		—		—

											1,144		1,016		6			(7	)		1		—		—		11

Bauxite
Mineração Rio do Norte S.A. — MRN		40.00		40.00		248		34			99		184		14			21			22		48		—		29

											99		184		14			21			22		48		—		29

Coal
Henan Longyu Resources Co. Ltd		25.00		25.00		548		68			137		115		17			12			9		—		42		—
Shandong Yankuang International Company Ltd		25.00		25.00		93		(4	)		23		23		(1	)		2			—		—		—		—

											160		138		16			14			9		—		42		—

Nickel
Jubilee Mines N.L (cost $5) (5)		—		—		—		—			—		126
Mirabela Nickel Ltd (cost $24)		—		—		—		—			67		72		—			—			—		—		—		—
Skye Resources Inc (cost $36)		—		—		—		—			43		44		—			—			—		—		—		—
Heron Resources Inc (cost $25)		—		—		—		—			14		34		—			—			—		—		—		—
Others		—		—		—		—			24		23		—			5			—		—		—		—

											148		299		—			5			—		—		—		—

Other affiliates and joint ventures
Others		—		—		—		—			47		35		(3	)		—			—		—		—		—

											47		35		(3	)		—			—		—		—		—

											1,598		1,672		33			33			32		48		42		40


Total											2,942		2,922		119			136			138		48		112		90


(1)		Although Vale held a majority of the voting interest of investees accounted for under the equity method, existing veto rights held by minority shareholders under shareholder agreements preclude consolidation;

(2)		Investment includes goodwill of US$61 in 2008 and 2007;

(3)		Investment non consolidated since June, 2007;

(4)		Pre-operating company;

(5)		Sold in February, 2008 (note 5)

F - 12

9		Short-term debt

		Our short-term borrowings are mainly from commercial banks and relate to export financing denominated in United States Dollars.

		Average interest rates on short-term borrowings were 4.7%, and 5.5% at March 31, 2008 and 2007, respectively.

10		Long-term debt


	Current liabilities				Long-term liabilities
	March 31,		December		March 31,		December
	2008		31,2007		2008		31,2007
	(Unaudited)				(Unaudited)
Foreign debt
Loans and financing denominated in the following currencies:
United States Dollars		211		212		6,000		5,927
Others		53		64		214		214
Fixed Rate Notes — US$ denominated		—		—		6,676		6,680
Debt securities — export sales (*) — US$ denominated		54		53		192		205
Perpetual notes		—		—		87		87
Accrued charges		195		282		—		—

		513		611		13,169		13,113

Local debt

Denominated in Long-Term Interest Rate — TJLP/CDI		597		586		2,343		1,148
Denominated in General Price Index-Market (IGPM)		—		1		1		1
Basket of currencies		1		2		5		6
Non-convertible debentures		—		—		3,391		3,340
Accrued charges		190		49		—		—

		788		638		5,740		4,495


Total		1,301		1,249		18,909		17,608


		(*) Debt securities secured by future receivables arising from export sales.

On January 28, 2008 we entered into a trade finance agreement with local Brazilian bank in the amount of US$ 1.1 billion with final maturity in 2018.

The long-term portion at March 31, 2008 falls due as follows:


2009			301
2010			2,509
2011			2,602
2012			1,107
2013 and thereafter			12,056
No due date (Perpetual notes and non-convertible debentures)			334

			18,909

At March 31, 2008 annual interest rates on long-term debt were as follows:


Up to 3%			29
3.1% to 5%			5,751
5.1% to 7%			6,397
7.1% to 9%			2,179
9.1% to 11%			140
Over 11% (*)			5,613
Variable (Perpetual notes)			101

			20,210


(*)		Includes non-convertible debentures and other Brazilian-reais denominated debt that bear interest at CDI (Brazilian interbank certificate of deposit) rate plus spread. For these operations we have entered into derivative transactions to

F - 13


		hedge our exposure on the floating rate debt denominated in reais. The total outstanding amount for these transactions is US$4,682 and the average cost of such debt after the hedge transactions is 5.6%.

The indexes applied to our debt and respective percentage variations in each quarter were as follows (unaudited):


	%
				December			March 31,
	March 31, 2008			31,2007			2007
TJLP — Long-Term Interest Rate (effective rate)		1.5			1.5			1.6
IGP-M — General Price Index — Market		2.4			3.5			1.1
Devaluation of United States Dollar against Real		(1.3	)		(3.7	)		(4.1	)

		Some of our long-term debt instruments contain financial covenants. Our principal covenants require us to maintain certain ratios, such as debt to EBITDA and interest coverage. We were in full compliance with our financial covenants as of March 31, 2008.

		We have unused revolving credit lines of US$ 1.9 billion.

11		Stockholders’ equity

		Each holder of common and preferred class A stock is entitled to one vote for each share on all matters that come before a stockholders’ meeting, except for the election of the Board of Directors, which is restricted to the holders of common stock. The Brazilian Government holds twelve preferred special shares which confer to it permanent veto rights over certain matters.

		In September 2007, a stock split was effected and each existing, common and preferred, share was split into two shares. After the split our capital comprises 4,919,314,116 shares, of which 1,919,516,400 are class “A” preferred shares and 2,999,797,716 are common shares, including twelve special class shares without par value (“Golden Shares”). The share/ADR proportion was maintained at 1/1; therefore, each common and preferred share, continued to be represented by one ADR supported by one common share (NYSE: RIO) or by one ADR supported by one class “A” preferred share (NYSE: RIOPR) respectively. All numbers of share and per share amounts included herein reflect retroactive application of the stock split. The Notes due 2010, series RIO and RIO P, mandatorily convertible into Vale ADRs will have their conversion rates adjusted to reflect the share split.

		In June 2007, we issued US$1,880 Mandatorily Convertible Notes due June 15, 2010 for total proceeds of US$1,869 net of commissions. The Notes bear interest at 5.50% per year payable quarterly and additional interest which will be payable based on the net amount of cash distribution paid to ADS holders. The US$1,296 Notes are mandatorily convertible into an aggregate maximum of 56,582,040 common shares and the US$584 Notes are mandatorily convertible into an aggregate maximum of 30,295,456 preferred class A shares. On the maturity date (whether at stated maturity or upon acceleration following an event of default), the Series RIO Notes will automatically convert into ADSs, each ADS representing one common share of Vale, and the Series RIO P Notes will automatically convert into ADSs, each ADS representing one preferred class A share of Vale. We currently hold the shares to be issued on conversion in treasury stock. The Notes are not repayable in cash. Holders of notes will have no voting rights. We will pay to the holders of our Series RIO Notes or RIO P Notes additional interest in the event that Vale makes cash distributions to all holders of RIO ADSs or RIO P ADSs, respectively. On 2007, the amount of additional interest totaled US$ 15. We determined, using a statistical model, that the potential variability in the number of shares to be converted is not a predominant feature of this hybrid financial instrument and thus classified it as an equity instrument within our stockholders’ equity. Other than during the cash acquisition conversion period, holders of the notes have the right to convert their notes, in whole or in part, at any time prior to maturity in the case of the Series RIO Notes, into RIO ADSs at the minimum conversion rate of 0.8664 RIO ADSs per Series RIO Note, and in the case of Series RIO P Notes, into RIO P ADSs at the minimum conversion rate of 1.0283 RIO P ADSs per Series RIO P Note.

F - 14


Note	Twenty Day Market Value	Conversion Rate
Rio P	Less than or equal to US$19.30	2.5914
	Between US$19.30 and US$24.31	US$50.00 divided by the twenty day market value
	Equal to or greater than US$24.31	2.0566

Rio	Less than or equal to US$22.90	2.1834
	Between US$22.90 and US$28.86	US$50.00 divided by the twenty day market value
	Equal to or greater than US$28,86	1.7328

		In October 2007, we paid US$1,050 to stockholders. The distribution was made in the form of interest on stockholders’ equity and dividends. In April 2007, we paid US$825 to stockholders. The distribution was made in the form of interest attributable to stockholders’ equity and dividends.

		In April 2007, at an Extraordinary Shareholders’ Meeting the paid-up capital was increased by US$4,187 through transfer of reserves, without issuance of shares, to US$12,695.

		Both common and preferred stockholders are entitled to receive a mandatory minimum dividend of 25% of annual adjusted net income based on the statutory accounting records, upon approval at the annual stockholders’ meeting. In the case of preferred stockholders, this dividend cannot be less than 6% of the preferred capital as stated in the statutory accounting records or, if greater, 3% of the statutory book equity value per share. For the year ended December 31, 2007, this annual minimum dividend corresponded to US$ 2,691 of which US$ 8 was paid on October 2007 and therefore we accrued the remaining value of US$ 2,683 with a direct charge to stockholders’ equity.

		In December 2007, significant changes were made to Brazilian Corporate law to permit Brazil to converge with International Financial Reporting Standards (IFRS). Such changes will be effective for the fiscal year ended December 31, 2008. These changes may affect the method of calculating and amortizing goodwill on business combinations, the recognition of exchange gain and losses in foreign subsidiaries, joint ventures and affiliates and related tax effects, among others. These changes have yet to be codified by the regulator and we are currently studying the possible effects which may arise upon adoption this law.

		Basic and diluted earnings per share

		Basic and diluted earnings per share amounts have been calculated as follows:

F - 15


	Three-month period ended (unaudited)
				December 31,
	March 31, 2008			2007			March 31, 2007
Net income for the period		2,021			2,573			2,217


Interest attributed to preferred convertible notes		(8	)		(8	)		—
Interest attributed to common convertible notes		(18	)		(18	)		—
Net income for the period adjusted		1,995			2,547			2,217
Basic and diluted earnings per share

Income available to preferred stockholders		766			978			867
Income available to common stockholders		1,193			1,523			1,350
Income available to convertible notes linked to preferred shares		12			16			—
Income available to convertible notes linked to common shares		24			30			—
Weighted average number of shares outstanding (thousands of shares) — preferred shares		1,889,173			1,889,175			1,889,172
Weighted average number of shares outstanding (thousands of shares) — common shares		2,943,216			2,943,216			2,943,216
Treasury preferred shares linked to mandatorily convertible notes		30,295			30,295			—
Treasury common shares linked to mandatorily convertible notes		56,582			56,582			—

Total		4,919,266			4,919,268			4,832,388


Earnings per preferred share		0.41			0.52			0.46
Earnings per common share		0.41			0.52			0.46
Earnings per convertible notes linked to preferred share (*)		0.66			0.79			—
Earnings per convertible notes linked to common share (*)		0.74			0.85			—


		(*) Basic earnings per share only as dilution assumes conversion.

Were the conversion of the convertible notes considered in the calculation of diluted earnings per share they would generate a minor antidilutive effect as shown below:


	Three-month period ended (unaudited)
			December 31,
	March 31, 2008		2007		March 31, 2007
Income available to preferred stockholders		786		1,002		867
Income available to common stockholders		1,235		1,571		1,350
Weighted average number of shares outstanding (thousands of shares) — preferred shares		1,919,468		1,919,470		1,889,172
Weighted average number of shares outstanding (thousands of shares) — common shares		2,999,798		2,999,798		2,943,216
Earnings per preferred share		0.41		0.52		0.46
Earnings per common share		0.41		0.52		0.46

Other cumulative comprehensive income

F - 16


	Three-month period ended (unaudited)
				December 31,
	March 31, 2008			2007			March 31, 2007
Comprehensive income is comprised as follows:
Net income		2,021			2,573			2,217
Cumulative translation adjustments		(205	)		337			(44	)
Unrealized gain (loss) on available-for-sale securities		(6	)		(18	)		315
Deficit accrued pension plan		(15	)		(465	)		(9	)
Hedge/Cash flow hedge		(27	)		6			(10	)

Total comprehensive income		1,768			2,433			2,469


Tax effect on other comprehensive income (expense) allocated to each component
Unrealized gain on available-for-sale securities
Gross balance as of the period end		294			271			892
Tax (expense) benefit		(89	)		(60	)		(306	)

Net balance as of the period end		205			211			586

Surplus (deficit) accrued pension plan
Gross balance as of the period end		108			134			528
Tax (expense) benefit		(48	)		(59	)		(184	)

Net balance as of the period end		60			75			344

13		Pension cost

		We previously disclosed in our consolidated financial statements for the year ended December 31, 2007, that we expected to contribute US$ 324 to our defined benefit pension plan in 2008. As of March 31, 2008, total contributions of US$ 88 had been made. We do not expect any significant change in our previous estimate.


	Three-month period ended (unaudited)
	March 31, 2008
	Overfunded			Underfunded			Underfunded
	pension plans			pension plans			other benefits
Service cost — benefits earned during the period		2			16			6
Interest cost on projected benefit obligation		54			62			23
Expected return on assets		(90	)		(65	)		—
Amortization of initial transitory obligation		3			—			(1	)
Net deferral		(1	)		—			—

Net periodic pension cost		(32	)		13			28


	December 31, 2007
	Overfunded			Underfunded			Underfunded
	pension plans			pension plans			other benefits
Service cost — benefits earned during the period		3			18			6
Interest cost on projected benefit obligation		110			76			26
Expected return on assets		(205	)		(73	)		(4	)
Amortization of initial transitory obligation		5			—			—
Net deferral		(6	)		—			—

Net periodic pension cost		(93	)		21			28

F - 17


	March 31, 2007
	Overfunded			Underfunded			Underfunded
	pension plans			pension plans			other benefits
Service cost — benefits earned during the period		1			14			4
Interest cost on projected benefit obligation		46			48			16
Expected return on assets		(86	)		(55	)		—
Amortization of initial transitory obligation		2			—			—
Net deferral		(2	)		—			—

Net periodic pension cost		(39	)		7			20

14		Commitments and contingencies

(a)		We provided certain guarantees on behalf of Goro pursuant to which we guaranteed payments due from Goro of up to a maximum amount of $100 million (“Maximum Amount”) in connection with an indemnity. We also provided additional guarantees covering the amounts payable by Goro regarding (a) amounts exceeding the Maximum Amount in connection with the indemnity and (b) certain other amounts under lease agreements.

		Sumic Nickel Netherlands B.V. (Sumic), a 21% shareholder of Goro, has a put option to sell to Vale Inco 25%, 50%, or 100% of this share of Goro. The put option can be exercised if the defined cost of the initial Goro project exceeds $4.2 billion at project rates and an agreement cannot be reached on how to proceed with the project.

		We provided guarantees covering certain termination payments by Goro to the supplier under an electricity supply agreement (“ESA”) entered into in October 2004 for the Goro nickel-cobalt project. The amount of the termination payments guaranteed depends upon a number of factors, including whether any termination of the ESA occurs as a result of a default by Goro and the date of such an early termination. If Goro defaults under the ESA prior to the anticipated start date for electricity supply, the termination payment, which currently is at its maximum amount, would be 145 million euros. Once the supply of electricity under the ESA to the project begins, the guaranteed amounts will decrease over the life of the ESA.

(b)		We and our subsidiaries are defendants in numerous legal actions in the normal course of business. Based on the advice of our legal counsel, management believes that the amounts recognized are sufficient to cover probable losses in connection with such actions.

F - 18

The provision for contingencies and the related judicial deposits are composed as follows (Unaudited):


	March 31, 2008				December 31, 2007
	Provision for				Provision for
	contingencies		Judicial deposits		contingencies		Judicial deposits
Labor and social security claims		537		395		519		372
Civil claims		325		140		311		135
Tax — related actions		1,342		627		1,605		613
Others		16		4		18		4

		2,220		1,166		2,453		1,124

		Labor and social security — related actions principally comprise claims by Brazilian employees and former employees for (i) payment of time spent traveling from their residences to the work-place, (ii) additional health and safety related payments and (iii) various other matters, often in connection with disputes about the amount of indemnities paid upon dismissal and the one-third extra holiday pay.

		Civil — actions principally related to claims made against us by contractors in Brazil in connection with losses alleged to have been incurred by them as a result of various past Government economic plans during which full inflation indexation of contracts was not permitted, as well, as for accidents and land appropriations disputes.

		Tax — tax-related actions principally comprise challenges initiated by us, on certain revenue taxes and value added taxes and uncertain tax positions. We continue to vigorously pursue our interests in all the above actions but recognize that we probably will incur some losses in the final instance, for which we have made provisions.

		Judicial deposits are made by us following the courts requirements, in order to be entitled to either initiate or continue a legal action. These amounts are eventually released to us, upon receipt of a final favorable outcome from the legal action; in the case of unfavorable outcome, the deposits are delivered to the prevailing party.

		Contingencies settled in March 31, 2008, December 31, 2007 and March 31, 2007 totaled US$128, US$331 and US$48, respectively. Additional provisions totaled US$22, US$364 and US$45, respectively, classified in other operating expenses.

		In addition to the contingencies for which we have made provisions we are defendants on claims where in our opinion, and based on the advice of our legal counsel, the likelihood of loss is possible but not probable, in the total amount of US$2,363 at March 31, 2008, and for which no provision has been made.

(c)		At the time of our privatization in 1997, we issued shareholder revenue interests instruments known in Brazil as “debentures” to our then-existing shareholders, including the Brazilian Government. The terms of the “debentures”, were set to ensure that our pre-privatization shareholders, including the Brazilian Government, would participate alongside us in potential future financial benefits that we could be able to derive from exploiting our mineral resources. On April 2008 we paid as remuneration of these “debentures” the amounts of US$9.

(d)		We use various judgments and assumptions when measuring our asset retirement obligations. Changes in circumstances, law or technology may affect our estimates and we periodically review the amounts accrued and adjust them as necessary. Our accruals do not reflect unasserted claims because we are currently not aware of any such issues. Also the amounts provided are not reduced by any potential recoveries under cost sharing, insurance or indemnification arrangements because such recoveries are considered uncertain.

F - 19

The changes in the provisions for asset retirement obligations are as follows:


	Three-month period ended (unaudited)
	March 31,			December			March 31,
	2008			31,2007			2007
Provisions for asset retirement obligations beginning of period		975			859			676
Accretion expense		16			23			12
Liabilities settled in the current period		(3	)		(8	)		(3	)
Revisions in estimated cash flows		(11	)		83			14
Cumulative translation adjustment		(2	)		18			—

Provisions for asset retirement obligations end of period		975			975			699

Assets and liabilities measured at fair value on a recurring basis

		From January 1, 2008, we adopted SFAS No. 157 — “Fair value measurements”. This Statement is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. However, on February 12, 2008, the FASB issued Staff Position 157-2 which delays the effective date of Statement 157 for all non financial assets and non financial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis. For items within its scope, this Staff Position defers the effective date of Statement 157 to fiscal years beginning after November 15, 2008. The adoption of Statement 157 did not generate a material impact on our financial position, except for required disclosures about fair value measurements.

		In February 2007, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities — Including an amendment of SFAS No. 115” (“SFAS 159”). SFAS 159 permits companies to choose to measure many financial instruments and certain other items at fair value in order to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. This Statement shall be effective as of the beginning of each reporting entity’s first fiscal year that begins after November 15, 2007. We expect that the adoption of such pronouncement will not generate a material impact on the Company’s financial position.

		As required by SFAS 157, the following table discloses the assets and liabilities measured at fair value on a recurring basis (Unaudited):


	Fair value at the reporting date using
				Quoted prices in active			Quoted prices in active
				markets for identical			markets for identical
	Carrying amount			assets or liabilities,			assets or liabilities,
				(Level 1)			(Level 2)
Available-for-sale securities		731			731			—
Unrealized gains (losses) on derivatives		49			—			49
Short-term debt		(291	)		—			(299	)
Long-term debt		(20,210	)		(5,435	)		(15,481	)
Other financial liabilities		(562	)		—			(562	)

F - 20

16 Segment and geographical information

We adopt SFAS 131 “Disclosures about Segments of an Enterprise and Related Information” with respect to the information we present about our operating segments. SFAS 131 introduced a “management approach” concept for reporting segment information, whereby such information is required to be reported on the basis that the chief decision-maker uses internally for evaluating segment performance and deciding how to allocate resources to segments. We analyze our segment information on aggregated and disaggregated basis as follows:

Consolidated net income and principal assets are reconciled as follows:

Results by segment — before eliminations (Aggregated)


	Three-month period ended (unaudited)
	March 31, 2008																					December 31, 2007																					March 31, 2007
				() Non*																					() Non*																					() Non*
	Ferrous			ferrous			Aluminum			Logistics			Others			Eliminations			Consolidated			Ferrous			ferrous			Aluminum			Logistics			Others			Eliminations			Consolidated			Ferrous			ferrous			Aluminum			Logistics			Others			Eliminations			Consolidated
RESULTS
Gross revenues — Foreign		5,578			2,861			859			21			72			(2,727	)		6,664			5,904			2,978			841			22			87			(2,863	)		6,969			4,415			3,482			813			14			22			(2,204	)		6,542
Gross revenues — Domestic		880			91			193			365			56			(201	)		1,384			1,116			113			217			388			1			(392	)		1,443			770			109			159			331			—			(231	)		1,138
Cost and expenses		(4,500	)		(1,302	)		(925	)		(244	)		(134	)		2,928			(4,177	)		(4,895	)		(1,795	)		(907	)		(275	)		(113	)		3,255			(4,730	)		(3,407	)		(2,564	)		(697	)		(220	)		(20	)		2,435			(4,473	)
Research and development		(50	)		(70	)		—			(20	)		(50	)		—			(190	)		(84	)		(92	)		—			(26	)		(60	)		—			(262	)		(16	)		(59	)		—			(2	)		(36	)		—			(113	)
Depreciation, depletion and amortization		(288	)		(399	)		(42	)		(30	)		(7	)		—			(766	)		(262	)		(404	)		(36	)		(29	)		(6	)		—			(737	)		(197	)		(149	)		(20	)		(25	)		(1	)		—			(392	)

Operating income		1,620			1,181			85			92			(63	)		—			2,915			1,779			800			115			80			(91	)		—			2,683			1,565			819			255			98			(35	)		—			2,702
Financial income		665			217			3			2			—			(832	)		55			653			227			5			1			1			(829	)		58			528			83			4			2			25			(521	)		121
Financial expenses		(1,056	)		(502	)		(147	)		(3	)		(2	)		832			(878	)		(757	)		(352	)		30			(10	)		33			829			(227	)		(1,003	)		(160	)		(14	)		(2	)		(1	)		521			(659	)
Foreign exchange and monetary gains (losses), net		134			(28	)		20			(2	)		(12	)		—			112			246			70			38			(5	)		(45	)		—			304			735			(8	)		45			(3	)		1			—			770
Gain on sale of investments		—			80			—			—			—			—			80			—			—			—			—			—			—			—			—			—			—			—			—			—			—
Equity in results of affiliates and joint ventures and change in provision for losses on equity investments		52			—			14			34			19			—			119			63			5			21			40			7			—			136			83			—			22			23			10			—			138
Income taxes		(21	)		(331	)		(17	)		—			11			—			(358	)		(298	)		104			(30	)		(2	)		10			—			(216	)		(394	)		(200	)		(45	)		(3	)		—			—			(642	)
Minority interests		2			(46	)		20			—			—			—			(24	)		4			(86	)		(72	)		—			(11	)		—			(165	)		(21	)		(88	)		(102	)		(2	)		—			—			(213	)

Net income		1,396			571			(22	)		123			(47	)		—			2,021			1,690			768			107			104			(96	)		—			2,573			1,493			446			165			113			—			—			2,217

Sales classified by geographic destination:
Foreign market America, except United States		323			341			192			1			—			(203	)		654			417			468			139			—			—			(240	)		784			300			376			203			6			—			(217	)		668
United States		80			583			104			1			—			(75	)		693			102			517			145			—			24			(116	)		672			95			650			69			—			22			(79	)		757
Europe		1,883			689			373			16			1			(1,067	)		1,895			1,949			636			378			22			—			(1,044	)		1,941			1,373			551			348			3			—			(734	)		1,541
Middle East/Africa/Oceania		240			58			44			—			—			(130	)		212			204			134			45			—			63			(138	)		308			194			111			44			—			—			(103	)		246
Japan		618			341			136			1			39			(260	)		875			551			392			134			—			—			(226	)		851			425			526			149			—			—			(214	)		886
China		1,874			296			10			1			—			(796	)		1,385			1,958			400			—			—			—			(817	)		1,541			1,662			268			—			4			—			(695	)		1,239
Asia, other than Japan and China		560			553			—			1			32			(196	)		950			723			431			—			—			—			(282	)		872			366			1,000			—			1			—			(162	)		1,205

		5,578			2,861			859			21			72			(2,727	)		6,664			5,904			2,978			841			22			87			(2,863	)		6,969			4,415			3,482			813			14			22			(2,204	)		6,542
Domestic market		880			91			193			365			56			(201	)		1,384			1,116			113			217			388			1			(392	)		1,443			770			109			159			331			—			(231	)		1,138

		6,458			2,952			1,052			386			128			(2,928	)		8,048			7,020			3,091			1,058			410			88			(3,255	)		8,412			5,185			3,591			972			345			22			(2,435	)		7,680


		(*) Other than Aluminum.

F - 21

Operating segment — after eliminations (Disaggregated)


	As of and for the three-month period ended (unaudited)
	March 31, 2008
	Revenues																							Property,		Addition to
																		Depreciation,						Plant and		Property,
							Value			Net		Cost and						depletion and			Operating			Equipment,		Plant and
	Foreign		Domestic		Total		added tax			revenues		expenses			Net			amortization			income			Net		Equipment		Investments
Ferrous
Iron ore		2,606		510		3,116		(73	)		3,043		(1,467	)		1,576			(245	)		1,331			17,304		664		61
Pellets		506		173		679		(40	)		639		(470	)		169			(29	)		140			766		12		798
Manganese		31		9		40		(2	)		38		(20	)		18			(1	)		17			82		1		—
Ferroalloys		177		113		290		(28	)		262		(124	)		138			(6	)		132			160		2		—
Pig iron		29		—		29		—			29		(14	)		15			(2	)		13			198		—		—

		3,349		805		4,154		(143	)		4,011		(2,095	)		1,916			(283	)		1,633			18,510		679		859
Non ferrous
Nickel and other products (*)		2,378		13		2,391		—			2,391		(980	)		1,411			(372	)		1,039			23,376		481		148
Potash		—		64		64		(4	)		60		(29	)		31			(7	)		24			218		3		—
Kaolin		42		11		53		(2	)		51		(56	)		(5	)		(7	)		(12	)		264		7		—
Copper concentrate		222		1		223		—			223		(106	)		117			(17	)		100			1,898		52		—
Alumina and bauxite		277		7		284		(1	)		283		(274	)		9			(30	)		(21	)		3,801		97		—
Aluminum		284		78		362		(16	)		346		(236	)		110			(12	)		98			902		7		99

		3,203		174		3,377		(23	)		3,354		(1,681	)		1,673			(445	)		1,228			30,459		647		247

Logistics
Railroads		—		296		296		(37	)		259		(172	)		87			(25	)		62			1,748		13		375
Ports		11		55		66		(5	)		61		(44	)		17			(6	)		11			1,677		44		—
Ships		—		—		—		—			—		(1	)		(1	)		—			(1	)		34		—		110

		11		351		362		(42	)		320		(217	)		103			(31	)		72			3,459		57		485
Others		101		54		155		(8	)		147		(158	)		(11	)		(7	)		(18	)		2,951		242		1,351

		6,664		1,384		8,048		(216	)		7,832		(4,151	)		3,681			(766	)		2,915			55,379		1,625		2,942


(*)		Includes nickel co-products and by-products (copper, precious metals, cobalt and others).

F - 22

Operating segment — after eliminations (Disaggregated)


	As of and for the three-month period ended (unaudited)
	December 31, 2007
	Revenues																							Property,		Addition to
																		Depreciation,						Plant and		Property,
							Value			Net		Cost and						depletion and			Operating			Equipment,		Plant and
	Foreign		Domestic		Total		added tax			revenues		expenses			Net			amortization			income			Net		Equipment		Investments
Ferrous
Iron ore		2,818		531		3,349		(74	)		3,275		(1,522	)		1,753			(222	)		1,531			17,031		958		60
Pellets		524		202		726		(46	)		680		(490	)		190			(26	)		164			754		31		741
Manganese		21		8		29		(1	)		28		(21	)		7			(2	)		5			79		1		—
Ferroalloys		181		102		283		(26	)		257		(137	)		120			(8	)		112			168		12		—
Pig iron		24		—		24		—			24		(16	)		8			(5	)		3			198		5		—

		3,568		843		4,411		(147	)		4,264		(2,186	)		2,078			(263	)		1,815			18,230		1,007		801
Non ferrous
Nickel and other products (*)		2,480		11		2,491		—			2,491		(1,398	)		1,093			(370	)		723			23,668		705		299
Potash		—		58		58		(3	)		55		(35	)		20			(7	)		13			218		6		—
Kaolin		62		12		74		(2	)		72		(40	)		32			(10	)		22			295		2		—
Copper concentrate		175		28		203		(6	)		197		(146	)		51			(21	)		30			1,841		86		—
Alumina and bauxite		312		10		322		(8	)		314		(282	)		32			(26	)		6			3,687		236		184
Aluminum		274		76		350		(16	)		334		(210	)		124			(11	)		113			761		45		—

		3,303		195		3,498		(35	)		3,463		(2,111	)		1,352			(445	)		907			30,470		1,080		483

Logistics
Railroads		—		322		322		(52	)		270		(194	)		76			(23	)		53			1,735		462		342
Ports		11		56		67		(9	)		58		(52	)		6			(6	)		—			1,371		58		—
Ships		—		—		—		—			—		—			—			—			—			36		—		107

		11		378		389		(61	)		328		(246	)		82			(29	)		53			3,142		520		449
Others		87		27		114		(6	)		108		(200	)		(92	)		—			(92	)		2,783		140		1,189

		6,969		1,443		8,412		(249	)		8,163		(4,743	)		3,420			(737	)		2,683			54,625		2,747		2,922


(*)		Includes nickel co-products and by-products (copper, precious metals, cobalt and others).

F - 23

Operating segment — after eliminations (Disaggregated)


	As of and for the three-month period ended (unaudited)
	March 31, 2007
	Revenues																							Property,		Addition to
																		Depreciation,						Plant and		Property,
							Value			Net		Cost and						depletion and			Operating			Equipment,		Plant and
	Foreign		Domestic		Total		added tax			revenues		expenses			Net			amortization			income			Net		Equipment		Investments
Ferrous
Iron ore		1,975		475		2,450		(72	)		2,378		(800	)		1,578			(173	)		1,405			13,747		347		44
Pellets		508		106		614		(23	)		591		(409	)		182			(18	)		164			709		10		570
Manganese		3		3		6		(1	)		5		(9	)		(4	)		(1	)		(5	)		65		—		—
Ferroalloys		94		43		137		(11	)		126		(107	)		19			(4	)		15			172		3		—
Pig iron		22		—		22		—			22		(20	)		2			(1	)		1			165		21		—

		2,602		627		3,229		(107	)		3,122		(1,345	)		1,777			(197	)		1,580			14,858		381		614
Non ferrous
Nickel and other products (*)		3,156		43		3,199		—			3,199		(2,333	)		866			(126	)		740			18,588		434		294
Potash		—		32		32		(2	)		30		(21	)		9			(5	)		4			187		6		—
Kaolin		42		8		50		(2	)		48		(50	)		(2	)		(7	)		(9	)		280		31		—
Copper concentrate		121		25		146		(5	)		141		(77	)		64			(11	)		53			1,482		40		—
Alumina and bauxite		253		72		325		(3	)		250		(185	)		65			(11	)		54			2,628		114		122
Aluminum		324		—		324		(15	)		381		(179	)		202			(9	)		193			435		15		—

		3,896		180		4,076		(27	)		4,049		(2,845	)		1,204			(169	)		1,035			23,600		640		416

Logistics
Railroads		—		242		242		(41	)		201		(111	)		90			(21	)		69			748		8		256
Ports		3		63		66		(12	)		54		(38	)		16			(3	)		13			837		7		—
Ships		11		12		23		(2	)		21		(23	)		(2	)		(2	)		(4	)		52		8		—

		14		317		331		(55	)		276		(172	)		104			(26	)		78			1,637		23		256
Others		30		14		44		(2	)		42		(33	)		9			—			9			1,070		62		1,644

		6,542		1,138		7,680		(191	)		7,489		(4,395	)		3,094			(392	)		2,702			41,165		1,106		2,930


(*)		Includes nickel co-products and by-products (copper, precious metals, cobalt and others).

F - 24

17		Derivative financial instruments

		We address some market risks through the use of derivative instruments. Considering the nature of our business and operations, the principal market risks we face are:

	•		interest rate risk,

	•		exchange rate risk, and

	•		product price risk.

		We hedge our market risk only when considered necessary to support our corporate strategy or to maintain our target level of financial flexibility. Our risk management activities are conducted in accordance with the risk management policy, which generally prohibits speculative trading. We monitor and evaluate our overall position regularly in order to evaluate financial results and impact on our cash flow.

		Considering the derivatives entered into since January 1, 2007, the contracts set with the objective of protecting against aluminum price volatility were designated as cash flow hedges. The effect of hedge accounting was not relevant to date.

		The asset (liability) balances and the change in fair value of derivative financial instruments are as follows (unaudited):


	Interest						Products of
	Rates /						aluminum
	Currencies			Gold			area			Copper			Nickel			Platinum			Total
Unrealized gains (losses) at January 1, 2008		626			(36	)		(98	)		(188	)		42			(24	)		322
Financial settlement		(27	)		11			25			61			—			9			79
Unrealized gains (losses) in the period		(10	)		(8	)		(174	)		(117	)		(36	)		(16	)		(361	)
Effect of exchange rate changes		11			(1	)		(1	)		—			—			—			9


Unrealized gains (losses) at March 31, 2008		600			(34	)		(248	)		(244	)		6			(31	)		49

Unrealized gains (losses) at October 1, 2007		649			(39	)		(176	)		(356	)		3			(25	)		56
Financial settlement		(200	)		10			16			63			26			5			(80	)
Unrealized gains (losses) in the period		149			(5	)		67			106			13			(4	)		326
Effect of exchange rate changes		28			(2	)		(5	)		(1	)		—			—			20


Unrealized gains (losses) at December 31, 2007		626			(36	)		(98	)		(188	)		42			(24	)		322

Unrealized gains (losses) at January 1, 2007		(10	)		(53	)		(318	)		(298	)		16			(20	)		(683	)
Financial settlement		2			12			29			38			(12	)		—			69
Unrealized gains (losses) in the period		159			(3	)		8			(49	)		(24	)		(6	)		85
Effect of exchange rate changes		4			(2	)		(12	)		3			—			—			(7	)


Unrealized gains (losses) at March 31, 2007		155			(46	)		(293	)		(306	)		(20	)		(26	)		(536	)


(*)		At December 31, 2007, US$ 5 was recorded in long-term liabilities.

		Except for new derivative contracts as described above unrealized gains (losses) in the period are included in our income statement under the caption of financial expenses and foreign exchange and monetary gains (losses), net.

		Final maturity dates for the above instruments are as follows:


Gold		December 2008
Interest rates / Currencies		September 2019
Products of the aluminum area		December 2008
Copper concentrate		December 2008
Nickel		December 2009
Platinum		December 2008

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		We consider the effective management of risk a key objective to support our growth strategy and financial flexibility. In furtherance of this objective, the Board of Directors has established an enterprise market risk management policy and a risk management committee. Under the policy, we measure, monitor, and manage risk at the portfolio level, using a single framework, and consider the natural diversification of our portfolio. We hedge our market risk only when considered necessary to support our corporate strategy or to maintain our target level of financial flexibility. The risk management committee assists our Executive Directors in overseeing and reviewing information regarding our enterprise risk management and framework, including the significant policies, procedures and practices employed to manage risk. Our enterprise risk management policy is designed to promote an effective risk management system and to ensure that enterprise-level risks are reported at least quarterly to the risk management committee.

		Under US GAAP, all derivatives, whether designated in hedging relationships or not, are required to be recorded in the balance sheet at fair value. A derivative must be designated in a hedging relationship in order to qualify for hedge accounting. These requirement include a determination of what portions of hedges are deemed to be effective versus ineffective. In general, a hedging relationship is effective when a change in the fair value of the derivative is offset by an equal and opposite change in the fair value of the underlying hedged item. In accordance with these requirements, effectiveness tests are performed in order to assess effectiveness and quantify ineffectiveness for all designated hedges. At March 31, 2008, we had outstanding cash flow hedges. A cash flow hedge is a hedge of the exposure to variability in expected future cash flows that is attributable to a particular risk such as a forecasted purchase or sale. If a derivative is designated as a cash flow hedge, the effective portions of the changes in the fair value of the derivative are recorded in other comprehensive income and are recognized in earnings when the hedged item affects earnings. Ineffective portions of changes in the fair value of the derivatives designated as hedges are recognized in earnings. Under US GAAP, if a portion of a derivative contract is excluded for purposes of effectiveness testing, such as time value, the value of such excluded portion is included in earnings. At March 31, 2008, unrealized net gains in respect of derivative instruments which were not qualified for hedge accounting under US GAAP amounted to US$ 311.

		Over-the-counter (OTC) forward and zero-cost collar aluminum contracts are used to reduce financing the effect of fluctuations in the price of aluminum with respect to forecasted sales of aluminum and alumina. These contracts have been designated as a hedge to our exposure to variability in future cash flows associated with our aluminum and alumina sales. There was no hedge ineffectiveness regarding these contracts since the inception of our cash flow hedge accounting program. At March 31, 2008, US$ 27 of deferred net losses on derivative instruments were recorded in other comprehensive income. The maximum term over which cash flows are hedged is 24 months.

18		Subsequent events

		In April 2008 the Board of Directors approved the payment of US$1.25 billion related to the first installment of the remuneration of the stockholders’ equity for 2008.

		In April 2008 we will pay additional interest to holders of the mandatorily convertible notes (notes) RIO and RIO P, equal to an amount in U.S. dollars equivalent to R$ 0.819988 and R$ 0.973215, respectively.

		In April 2008 we closed a contract for a committed credit facility totaling US$4.2 billion with Banco Nacional de Desenvolvimento Econômico e Social (BNDES), the Brazilian National Development Bank, available for 60 months and with a 10-year tenor, with a view to financing part of our investment plan for 2008-12, in the amount of US$ 59 billion.

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	COMPANHIA VALE DO RIO DOCE (Registrant)
Date: July 1, 2008	By:	/s/ Roberto Castello Branco
		Roberto Castello Branco
		Director of Investor Relations