Nippon Steel and Rio Doce Reach Basic Agreement on Long-term Iron Ore Supply

Nippon Steel Corporation (President: MIMURA Akio) and Companhia Vale do Rio Doce (President: Roger Agnelli， Head Office in Rio de Janeiro， Brazil) reached a basic agreement on the conclusion of a long-term contract (10 years， total 70 million tons) for the supply of iron ore from CVRD as explained below. Detailed terms and conditions of the deal will hereafter be negotiated for the conclusion of a definitive agreement.

Over many years， Nippon Steel has maintained close relationships with CVRD and other raw material suppliers. CVRD， the world’s largest iron ore supplier， is in the process of promoting the development and expansion of iron ore mines in Brazil to meet the worldwide tightening of the supply and demand of iron ore resulting from the brisk demand from China and other countries.

Through the closing of the long-term contract with CVRD， Nippon Steel hopes to ensure the stable supply of raw materials over medium and long terms and further enhance the close relation with the world’s leading iron ore supplier.

Apart from this long-term contact， Nippon Steel also has a five-year contract for the supply of 2 million ton-per-year Nibrasco pellets with CVRD and a three-year contract for the supply of 2 million ton-per-year MBR iron ore with MBR. In other words， Nippon Steel purchases a total of approximately 11 million tons of iron ore and pellets a year from Brazil as a whole.


Major items in the Nippon Steel-CVRD Basic Agreement:

[Term of long-term contract]

From fiscal year 2005 to 2014 (10 years)

[Quantity]

7 million tons of iron ore per year 　(total: 70 million tons)

Itabira : 3 million tons per year
Carajas : 4 million tons per year


Note: The above agreement has been reached to succeed the current FY2000-2004 five-year Itabira iron ore contract and FY2001-2007 seven-year Carajas iron ore contract.


Schedule for the conclusion of the definitive agreement

The definitive agreement is expected to be concluded in June 2004.

For further information: P.R.Center +81-3-3275-5021