Edgar Filing: Companhia Vale do Rio Doce

Filed by Bowne Pure Compliance

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

February 2009

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- .)

TABLE OF CONTENTS


Press Release
Signature Page

Financial Statements — 12/31/2008

BR GAAP

Filed at CVM and SEC on 02/19/2009

Gerência Geral de Controladoria — GECOL


Contents

A- Financial Statements			3

1- Balance Sheet			3

2- Statement of Income			4

3- Statement of Changes in Stockholders’ Equity			5

4- Statement of Cash Flows			6

5- Statement of Value Added			7

6- Notes to the Financial Statements at December 31, 2008 and 2007			8

6.1- Operations			8

6.2- Presentation of Financial Statements			8

6.3- Principles and Practices of Consolidation			9

6.4- Summary of significant Accounting Policies			9

6.5- Independent Auditors Policy			11

6.6- Acquisitions and Divestments			11

6.7- Cash and Cash Equivalents			12

6.8- Accounts Receivable			12

6.9- Related Parties			12

6.10- Inventories			14

6.11- Deferred Income Tax and Social Contribution			15

6.12- Taxes to recover or offset			16

6.13- Investments			17

6.14- Intangible			18

6.15- Property, Plant and Equipment			18

6.16- Loans and Financing			19

6.17- Contingent Liabilities			21

6.18- Provision for asset retirement obligations			23

6.19- Pension Plan			23

6.20- Incentives of long stated period			26

6.21- Paid-up Capital			26

6.22- Resources linked to future mandatory conversion in shares			27

6.23- ADR Program — American Depositary Receipts			27

6.24- Treasury Stock			28

6.25- Remuneration of Stockholders			28

6.26- Financial Results			29

6.27- Financial Instruments – Derivatives			30


Contents

6.28- Selling, Administrative, Other Operating Expenses and Non Operating Income			40

6.29- Concessions, Subconcessions and Leases			41

6.30- Insurance			42

6.31- Profit Sharing Plan			42

6.32- Information by segment			43

6.33- Social Report (unaudited)			45

6.34- SUBSEQUENT EVENTS			46

7- Attachment I — Statement of Investments in Subsidiaries and Jointly-Controlled Companies			46

8- Report of the Independent Accountants			47

9- Opinion of the Fiscal Council on the Annual Report and Financial Statements at December 31, 2008			49

10- Opinion of the Board of Directors on the Annual Report and Financial Statements at December 31, 2008			50

B- Additional Information			51

11- Cash Generation (Unaudited)			51

12- Board of Directors, Fiscal Council, Advisory Committees and Executive Officers			52

A- Financial Statements

(A free translation of the original in Portuguese relating to the Quarterly Information prepared in thousands accordance with the requirements of Accounting Practices Generally Accepted in Brazil)

1- Balance Sheet


	In millions of reais
			Consolidated					Parent Company
Years ended December 31,	Notes		2008			2007		2008			2007
Assets
Current assets
Cash and cash equivalents		6.7		24,639			2,128		6,713			120
Short term investments				5,394			—		—			—
Accounts receivable from customers		6.8		7,933			7,136		9,827			2,379
Related parties		6.9		28			36		2,242			1,580
Inventories		6.10		9,686			7,258		2,913			1,932
Deferred income tax and social contribution		6.11		1,305			1,084		1,220			611
Taxes to recover or offset		6.12		4,886			2,230		3,312			792
Others				2,188			1,281		999			479

				56,059			21,153		27,226			7,893

Non-current assets
Long-term receivables
Related parties		6.9		—			5		4,728			3,413
Loans and financing				180			226		128			115
Prepaid expenses				632			459		—			—
Judicial deposits				1,794			864		1,299			776
Advances to energy suppliers				953			1,016		—			—
Deferred income tax and social contribution		6.11		934			482		640			237
Taxes to recover or offset		6.12		1,067			500		189			193
Provisions for derivatives		6.27		85			1,191		5			1,064
Others				414			219		245			107

				6,059			4,962		7,234			5,905

Investments		6.13		2,442			1,869		90,682			62,738
Intangibles		6.14		10,727			14,316		8,400			12,143
Property, plant and equipment		6.15		110,494			90,477		38,697			28,097
Deferred charges				—			122		—			—

				123,663			106,784		137,779			102,978

				185,781			132,899		172,239			116,776

Liabilities, and stockholders’ equity
Current liabilities
Payable to suppliers and contractors				5,248			4,294		2,145			1,927
Payroll and related charges				1,428			1,344		881			776
Current portion of long-term debt		6.16		1,583			2,354		711			1,483
Short-term debt		6.16		1,088			1,007		—			297
Related parties		6.9		162			15		9,580			6,702
Taxes, contributions and royalties				188			586		56			50
Provision for income tax				1,423			2,222		—			—
Pension Plan		6.19		239			232		86			78
Ferrovia Norte Sul subconcession				934			372		—			—
Provisions for derivatives		6.27		—			613		—			47
Provision for asset retirement obligations		6.18		113			114		44			47
Proposed dividends and interest on stockholders’ equity		6.25		4,834			4,752		4,834			4,752
Others				1,399			1,442		644			453

				18,639			19,347		18,981			16,612

Non-current liabilities
Pension Plan		6.19		3,563			3,808		523			590
Long-term debt		6.16		42,694			32,445		11,602			8,643
Related parties		6.9		125			—		38,144			29,466
Provisions for contingencies		6.17		2,989			3,189		1,730			1,979
Deferred income tax and social contribution		6.11		8,039			8,073		—			—
Provisions for derivatives		6.27		1,345			9		1,084			—
Provision for asset retirement obligations		6.18		1,997			1,649		848			743
Ferrovia Norte Sul subconcession				—			372		—			—
Others				4,034			2,201		3,052			1,713

				64,786			51,746		56,983			43,134

Deferred income				—			93		—			—

Minority interest				6,081			4,683		—			—

Stockholders’ equity
Paid-up capital		6.21		47,434			28,000		47,434			28,000
Transaction cost of capital increase				(161	)		—		(161	)		—
Resources linked to the future mandatory conversion in shares		6.22		3,064			3,064		3,064			3,064
Equity assessnent adjustment				8			—		8			—
Cumulative translation Adjustments				5,982			—		5,982			—
Revenue reserves				39,948			25,966		39,948			25,966

				96,275			57,030		96,275			57,030

				185,781			132,899		172,239			116,776

The notes and attachment I are an integral part of the financial statements

(A free translation of the original in Portuguese relating to the Quarterly Information prepared in thousands accordance with the requirements of Accounting Practices Generally Accepted in Brazil)

2- Statement of Income


	In millions of reais
			Consolidated																					Parent Company
												Accumulated												Accumulated
												Before new			New practices
Years ended December 31,	Notes		4Q/08			3Q/08			4Q/07			practices			adjustments			2008			2007			2008			2007
Operating revenues
Ore and metals				14,193			17,875			12,935			59,892			—			59,892			55,332			31,645			20,698
Sales of aluminum-related products				1,824			1,546			1,247			5,843			—			5,843			5,529			390			278
Transport services				914			1,034			843			3,666			—			3,666			3,497			2,027			1,939
Sales of steel products				304			367			265			1,348			—			1,348			1,248			—			—
Other products and services				711			565			231			2,017			—			2,017			779			383			114

				17,946			21,387			15,521			72,766			—			72,766			66,385			34,445			23,029
Value Added taxes				(563	)		(689	)		(436	)		(2,225	)		—			(2,225	)		(1,621	)		(1,545	)		(1,213	)

Net operating revenues				17,383			20,698			15,085			70,541			—			70,541			64,764			32,900			21,816


Cost of products and services
Ores and metals				(5,890	)		(6,388	)		(6,271	)		(23,804	)		—			(23,804	)		(22,814	)		(14,006	)		(11,944	)
Aluminum-related products				(1,099	)		(1,050	)		(853	)		(3,873	)		—			(3,873	)		(3,246	)		(399	)		(192	)
Transport services				(568	)		(594	)		(538	)		(2,215	)		—			(2,215	)		(2,146	)		(955	)		(769	)
Steel products				(278	)		(309	)		(277	)		(1,177	)		—			(1,177	)		(1,199	)		—			—
Other products and services				(276	)		(300	)		(221	)		(1,087	)		—			(1,087	)		(679	)		(143	)		(41	)

				(8,111	)		(8,641	)		(8,160	)		(32,156	)		—			(32,156	)		(30,084	)		(15,503	)		(12,946	)


Gross profit				9,272			12,057			6,925			38,385			—			38,385			34,680			17,397			8,870

Gross margin				53.3	%		58.3	%		45.9	%		54.4	%		—			54.4	%		53.5	%		52.9	%		40.7	%

Operating expenses
Selling and Administrative		6.28		(1,716	)		(671	)		(799	)		(3,618	)		—			(3,618	)		(2,550	)		(1,412	)		(1,159	)
Research and development				(718	)		(559	)		(462	)		(2,071	)		—			(2,071	)		(1,397	)		(1,233	)		(767	)
Impairment		6.14		—			—			—			—			(2,447	)		(2,447	)		—			—			—
Other operating expenses		6.28		(1,626	)		(717	)		(608	)		(2,849	)		—			(2,849	)		(1,418	)		(832	)		(493	)

				(4,060	)		(1,947	)		(1,869	)		(8,538	)		(2,447	)		(10,985	)		(5,365	)		(3,477	)		(2,419	)

Operating profit before financial results, results of equity investments and impairment				5,212			10,110			5,056			29,847			(2,447	)		27,400			29,315			13,920			6,451

Results of equity investments		6.13		612			1,390			(241	)		1,335			(1,231	)		104			(1,101	)		18,003			12,751

Amortization of goodwill		6.14		(351	)		(353	)		(333	)		(1,429	)		—			(1,429	)		(1,304	)		(1,429	)		(1,304	)

				261			1,037			(574	)		(94	)		(1,231	)		(1,325	)		(2,405	)		16,574			11,447


Financial results, net		6.26		2,547			1,312			395			913			(4,751	)		(3,838	)		277			(10,673	)		3,320

Profit on sale of investment		6.28		—			—			—			139			—			139			1,458			—			1,300


Income before income tax and social contribution				8,020			12,459			4,877			30,805			(8,429	)		22,376			28,645			19,821			22,518

Income tax and social contribution		6.11		2,465			111			(183	)		(665	)		—			(665	)		(7,085	)		1,458			(2,512	)


Current				2,028			(834	)		(424	)		(2,057	)		—			(2,057	)		(7,742	)		12			(2,460	)

Deferred charges				437			945			241			1,392			—			1,392			657			1,446			(52	)

Minority interest				(36	)		(138	)		(284	)		(432	)		—			(432	)		(1,554	)		—			—


Net income for the period				10,449			12,432			4,410			29,708			(8,429	)		21,279			20,006			21,279			20,006


Number of shares outstanding at the end of the period (in thousands) (a)				5,213,512			5,278,381			4,832,391			5,213,512			5,213,512			5,213,512			4,832,391			5,213,512			4,832,391


Net earnings per share outstanding at the end of the period (R$)				2.00			2.36			0.91			5.70			(1.62	)		4.08			4.14			4.08			4.14

The notes and attachment I are an integral part of the financial statements


(a)		Includes 30,341,144 and 56,582,040 preferred and common shares, respectively, linked to issue of mandatory convertible notes (see note 5.18).

(A free translation of the original in Portuguese relating to the Quarterly Information prepared in thousands accordance with the requirements of Accounting Practices Generally Accepted in Brazil)

3- Statement of Changes in Stockholders’ Equity


		In millions of reais
								Resources linked to		Equity		Cumulative		Revenue reserves
			Paid-up		Transaction			mandatory		assessnent		translation		Expansion/			Treasury			Unrealized						Fiscal			Retained
Years ended December 31,	Notes		capital		cost			conversion in shares		adjustment		Adjustments		Investments			stock			income			Legal			incentives			earnings			Total

December 31, 2006				19,492		—			—		—		—		18,108			(790	)		123			2,072			93			—			39,098


Net income for the year				—		—			—		—		—		—			—			—			—			—			20,006			20,006

Capitalization of reserves				8,508		—			—		—		—		(7,673	)		—			—			(752	)		(83	)		—			—

Realization of reserves				—		—			—		—		—		—			—			—			—			—			—			—

Exchange — Samitri shares of incorporated companies				—		—			—		—		—		—			—			—			—			—			—			—

Interim dividends				—		—			—		—		—		(371	)		—			—			—			—			(15	)		(386	)

Stockholder’s remuneration proposed				—		—			—		—		—		—			—			—			—			—			(4,752	)		(4,752	)

Resources linked to mandatory conversion in shares				—		—			3,064		—		—		—			—			—			—			—			—			3,064

Appropriation to revenue reserves				—		—			—		—		—		14,220			—			(62	)		1,000			81			(15,239	)		—


December 31, 2007				28,000		—			3,064		—		—		24,284			(790	)		61			2,320			91			—			57,030

Net income for the year				—		—			—		—		—		—			—			—			—			—			21,279			21,279

Treasury Stock		6.24		—		—			—		—		—		—			(1,658	)		—			—			—			—			(1,658	)

Cumulative translation Adjustments				—		—			—		—		5,982		—			—			—			—			—			—			5,982

Unrealized result on available — for — sale securities				—		—			—		8		—		—			—			—			—			—			—			8

Capital increase		6.21		19,434		(161	)		—		—		—		—			—			—			—			—			—			19,273

Stockholder’s remuneration proposed		6.25		—		—			—		—		—		—			—			—			—			—			(4,834	)		(4,834	)

Interim dividends				—		—			—		—		—		(580	)		—			—			—			—			(225	)		(805	)

Appropriation to revenue reserves				—		—			—		—		—		15,179			—			(23	)		1,064			—			(16,220	)		—


December 31, 2008				47,434		(161	)		3,064		8		5,982		38,883			(2,448	)		38			3,384			91			—			96,275

The notes and attachment I are an integral part of the financial statements

(A free translation of the original in Portuguese relating to the Quarterly Information prepared in thousands accordance with the requirements of Accounting Practices Generally Accepted in Brazil)

4- Statement of Cash Flows


	In millions of reais
			Consolidated																					Parent Company
																								Accumulated
												Before new			New practices			Accumulated						Before new
Years ended December 31,	Notes		4Q/08			3Q/08			4Q/07			practices			adjustments			2008			2007			practices			2007
Cash flows from operating activities:
Net income for the period				10,449			12,433			4,410			29,708			(8,429	)		21,279			20,006			21,279			20,006
Adjustments to reconcile net income for the period with cash provided by operating activities:
Results of equity investments				(261	)		(1,037	)		574			94			1,231			1,325			2,405			(16,574	)		(11,447	)
Sale of assets				—			—			—			(139	)		—			(139	)		(1,458	)		—			(1,300	)
Depreciation, amortization and depletion				1,322			1,227			1,300			5,112			—			5,112			4,119			1,641			1,432
Deferred income tax and social contribution				(437	)		(945	)		(505	)		(1,392	)		—			(1,392	)		(1,831	)		(1,446	)		37

Monetary and exchange rate variations on assets and liabilities, net				(38	)		(689	)		(2,008	)		(970	)		4,751			3,781			(5,153	)		10,760			(6,330	)

Recoverable amount of assets				—			—			—			—			2,447			2,447			—			—			—
Minority interest				36			138			284			432			—			432			1,554			—			—
Disposal of property, plant and equipment				28			463			203			740			—			740			349			579			536
Net unrealized losses (gains) on derivatives				1,066			1,402			(606	)		1,817			—			1,817			(1,715	)		1,475			(1,551	)
Dividends/interest on stockholders’ equity received				25			15			75			63			—			63			134			1,121			1,962
Others				57			144			(50	)		233			—			233			280			76			694

				12,247			13,151			3,677			35,698			—			35,698			18,690			18,911			4,039

Decrease (increase) in assets:
Accounts receivable				3,434			(2,924	)		349			(449	)		—			(449	)		1,359			(7,448	)		(500	)
Inventories				(1,112	)		(1,195	)		(475	)		(2,413	)		—			(2,413	)		(1,397	)		(638	)		(690	)
Advances to energy suppliers				16			16			46			64			—			64			(71	)		—			—
Others				(796	)		(1	)		513			(950	)		—			(950	)		348			(2,344	)		53

				1,542			(4,104	)		433			(3,748	)		—			(3,748	)		239			(10,430	)		(1,137	)

Increase (decrease) in liabilities:
Suppliers and contractors				836			591			559			1,586			—			1,586			1,358			136			238
Payroll and related charges				75			230			165			125			—			125			223			95			281
Taxes and contributions				208			9			(1,084	)		380			—			380			242			(16	)		(29	)
Others				(480	)		(7	)		(50	)		(1,272	)		—			(1,272	)		(405	)		413			997

				639			823			(410	)		819			—			819			1,418			628			1,487


Net cash provided by operating activities				14,428			9,870			3,700			32,769			—			32,769			20,347			9,109			4,389


Cash flows from investing activities:
Short term investments				(4,180	)		(1,213	)		—			(5,394	)		—			(5,394	)		—			—			—
Loans and advances receivable				20			(34	)		(39	)		(4	)		—			(4	)		32			(1,660	)		281
Guarantees and deposits				(166	)		(50	)		(87	)		(295	)		—			(295	)		(254	)		(248	)		(202	)
Additions to investments				(148	)		(147	)		(362	)		(327	)		—			(327	)		(492	)		(7,685	)		(2,314	)
Additions to property, plant and equipment				(9,024	)		(2,965	)		(4,681	)		(18,716	)		—			(18,716	)		(13,159	)		(7,259	)		(4,505	)
Proceeds from disposal of property, plant and equipment/investments				—			—			—			371			—			371			1,500			—			1,432

Net cash used in acquisitions and increase of funds to subsidiaries, net of the cash of subsidiary				—			—			—			—			—			—			(6,404	)		—			—


Net cash used in investing activities				(13,498	)		(4,409	)		(5,169	)		(24,365	)		—			(24,365	)		(18,777	)		(16,852	)		(5,308	)


Cash flows from (used in) financing activities:
Short-term debt additions				120			205			3,973			2,660			—			2,660			9,959			4,393			5,305
Short-term debt repayments				(313	)		(187	)		(3,549	)		(2,669	)		—			(2,669	)		(10,532	)		(5,042	)		(1,637	)
Long-term debt				935			148			1,210			4,053			—			4,053			15,681			4,242			18,517
Issue of convertible notes, in common share’s				—			—			—			—			—			—			2,481			—			—
Issue of convertible notes, in preferred share’s				—			—			—			—			—			—			1,119			—			—
Repayments:
Related parties				—			—			—			—			—			—			—			—			(82	)
Financial institutions				(181	)		(261	)		(250	)		(1,725	)		—			(1,725	)		(23,046	)		(1,366	)		(17,693	)
Interest on stockholders’ equity paid to stockholders and dividends		6.27		(3,579	)		—			(2,664	)		(5,827	)		—			(5,827	)		(4,882	)		(5,558	)		(3,574	)
Capital increase				—			19,273			—			19,273			—			19,273			—			19,273			—
Treasury stock				(1,658	)		—			—			(1,658	)		—			(1,658	)		—			(1,658	)		—


Net cash provided by (used in) financing activities				(4,676	)		19,178			(1,280	)		14,107			—			14,107			(9,220	)		14,284			836


Increase (decrease) in cash and cash equivalents				(3,746	)		24,639			(2,749	)		22,511			—			22,511			(7,650	)		6,541			(83	)
Cash and cash equivalents, beginning of the period				28,385			3,746			4,877			2,128			—			2,128			9,778			120			203
Initial cash in new consolidated subsidiary				—			—			—			—			—			—			—			52			—

Cash and cash equivalents, end of the period				24,639			28,385			2,128			24,639			—			24,639			2,128			6,713			120


Cash paid during the period for:
Short-term interest				(72	)		(7	)		(18	)		(138	)		—			(138	)		(143	)		(166	)		(102	)
Long-term interest				(744	)		(498	)		(649	)		(2,321	)		—			(2,321	)		(2,505	)		(2,784	)		(2,490	)
Income tax and social contribution				(977	)		(2,125	)		(867	)		(6,383	)		—			(6,383	)		(5,724	)		(1,707	)		(2,219	)

Non-cash transactions:

Additions to property, plant and equipment — interest capitalization				(307	)		(235	)		145			(673	)		—			(673	)		(113	)		(527	)		(12	)
Transfer of advance for future capital increase to investments				—			—			—			—			—			—			—			(316	)		(105	)
Compensated income tax and social contribution				(65	)		(229	)		—			(440	)		—			(440	)		—			—			—

(A free translation of the original in Portuguese relating to the Quarterly Information prepared in thousands accordance with the requirements of Accounting Practices Generally Accepted in Brazil)

5- Statement of Value Added


	In millions of reais
	Consolidated						Parent Company
Years ended December 31,	2008			2007			2008			2007
Generation of Value Added
Gross revenue
Income from products and services		72,561			66,385			34,472			23,029
Other income		237			—			—			—
Reveneu for the construction of own assets		17,706			11,529			7,259			4,505
Allowance for doubtful accounts		(32	)		—			(27	)		—

Less: Acquisition of products		(2,805	)		(4,890	)		(1,565	)		(2,958	)
Outsourced services		(8,244	)		(5,236	)		(3,734	)		(3,024	)
Materials		(23,958	)		(16,362	)		(11,493	)		(6,650	)
Fuel oil and gas		(3,761	)		(3,115	)		(1,477	)		(1,183	)
Energy		(2,052	)		(1,812	)		(648	)		(372	)
Impairment		(2,447	)		—			—			—
Other costs		(6,861	)		(4,281	)		(2,545	)		(720	)

Gross Value Added		40,344			42,218			20,242			12,627

Depreciation, amortization and depletion		(5,112	)		(4,119	)		(1,641	)		(1,432	)


Net Value Added		35,232			38,099			18,601			11,195

Received from third parties

Financial revenue		9,027			4,517			5,698			4,177
Results of equity investment		(1,325	)		(2,405	)		16,574			11,447


Total Value Added to be distributed		42,934			40,211			40,873			26,819


Personnel		5,046			5,021			2,240			1,596
Taxes, rates and contribution		5,267			9,678			2,703			4,571
Taxes paid recover		(1,955	)		—			(1,672	)		—
Third partie’s capital		12,865			3,952			16,322			646
Stockholders’ remuneration
Stockholders		5,640			5,138			5,640			5,138
Retained earnings		15,639			14,868			15,640			14,868
Minority interest		432			1,554			—			—


Distribution of Value Added		42,934			40,211			40,873			26,819

(A free translation of the original in Portuguese relating to the Quarterly Information prepared in thousands accordance with the requirements of Accounting Practices Generally Accepted in Brazil)

6- Notes to the Financial Statements at December 31, 2008 and 2007

(Expressed in millions of Reais, unless otherwise stated)

6.1- Operations

Companhia Vale do Rio Doce (Vale) is a publicly limited liability company whose predominant activities are mining, processing and sale of iron ore, pellets, copper concentrate and potash, as well as logistic services, power generation and mineral research and development. In addition, through its direct and indirect subsidiaries and jointly controlled companies, operates in iron ore and pellets, nickel, copper, precious metals, cobalt (by product), manganese and ferroalloys, kaolin, coal, steel, aluminum-related products and logistics.

6.2- Presentation of Financial Statements

On December 28, 2007, Law 11,638 was enacted and modified by the Provisional Act nº 449, dated December 4, 2008, which modified and added new provisions to the Brazilian Corporate Law. These acts mainly objective is to update the brazilian corporate law to make it possible the convergence of the accounting practices adopted in Brazil to the international accounting rules issued by the International Accounting Standard Board – IASB. In accordance with Comissão de Valores Mobiliários - CVM Resolution nº 565, the Company adopted for the first time in the whole and without exception the provisions of Law 11.638 and Provisional Act nº 449 for the year ended 31 December 2008. The financial statements for the year ended 2007, shown along with those of 2008, were prepared in accordance with the practices adopted in Brazil, effective up to December 31, 2007, as allowed by the technical pronouncement – CPC 13.

In line with this the alignment process with international practices, the Accounting Pronouncements Committee released 15 new pronouncements until December 2008, confirmed by the CVM to be applied from year ended 2008.

The effects on net income and stockholders’ equity of the adoption of the new practices were as follows:


	Net income			Stockholders’ equity

Balance in the financial statements prior to adoption:		29,708			98,553

CPC 01 - Reduction in the recoverable value of assets (a)		(2,447	)		(2,447	)

CPC 02 - Conversion of Financial Statements (b)		(5,982	)		—

CPC 08 - Transactions cost and premiums on issue of securities (c)		—			161

CPC 14 - Financial Instruments (d)		—			8


Balance per financial statements as at December 31, 2008		21,279			96,275

(a)		On November 1, 2007 the CVM released Resolution nº. 527 approving the accounting pronouncement CPC 01, that deals with the reduction in the recoverable value of assets, to be applied from the year ended December 2008. In accordance with this pronouncement asset values must be reviewed to ensure carrying values are recoverable. The other pronouncements had been already adopted by the Company and had no impact.

		The performance of this review resulted in a loss of R$ 2.447 due to the reduction of the goodwill value associated with the nickel business, that was recognized in result of the period.

(b)		On January 29, 2008, CVM issued Resolution No. 534 approving technical pronouncement CPC 02 of the Accounting Pronouncements Committee, which addresses the effects of changes in exchange rates and re-measurement of financial statements. Accordingly, the effects of exchange rate fluctuations on foreign investments with a different functional currency to the parent company, must not affect the net income for the year ended 2008. The effects must be recognized directly in a transient account of stockholders’ equity, named Cumulative Translation Adjustment. Vale made adjustments related to new practices for the fourth quarter of 2008. The effects are disclosed in the Balance Sheet and Income Statement in the column of new practices and had a negative impact for the company’s result represented by a loss of R$ 5,982, mostly relating to exchange variations in the subsidiary Vale Inco.

(c)		On November 12, 2008 the CVM issued Resolution nº 556 approving technical pronouncement CPC 08 of the Accounting Pronouncements Committee, that addresses the accounting for transaction costs and premiums on issue of securities. According to it, the costs related to the funding of equity must be accounted for in a determined account at the stockholder’s equity.

(d)		On December 17, 2008, CVM issued Resolution nº 566 approving the technical pronouncement CPC 14 of the Accounting Pronouncements Committee, which addresses the recognition, measurement and disclose of Financial Instruments. This figure represents the fair value adjustment of available for sale.

		The Company presents as complimentary information the calculation of earnings before financial results, equity results, income tax and social contribution, depreciation and amortization – LAJIDA (EBITDA)

		Although the EBITDA, as previously defined, does not provide valuation for operational cash flow under Brazilian accounting principles, it is often used by financial analysts on valuation of business and The Company’s Management uses this indicator to measure operating performance.

6.3- Principles and Practices of Consolidation

The consolidated Financial Statements reflects the balances of assets and liabilities at December 31, 2008 and December 31, 2007 and the operations of the Parent Company, its direct and indirect subsidiaries and its jointly-controlled companies. Overseas operations are translated into the report currency for financial statements in Brazil to account equity investments, whole and proportional consolidation.

Vale’s participation in hydroelectric projects are made via consortium contracts under undivided interests in the assets and are liable for its proportionate share of liabilities, which are based on our proportionate share of power output. The Company does not have joint liability for any obligations. Since there is no legal entity related to the project, there are no separate fiinancial statements, income tax statement, net income or stockholder’s equity. No separate legal or tax status is granted to consortia under Brazilian law. Accordingly, the company recognizes its proportionate share of costs and its undivided interest in assets relating to hydroelectric projects.

6.4- Summary of significant Accounting Policies

(a)		The Company adopts the accrual basis of accounting;

(b)		In preparing the condensed consolidated financial statements, Vale is required to use estimates to account for certain assets, liabilities, and transactions. Therefore the consolidated financial statements include various estimates concerning the selection of useful lives of property, plant and equipment, provisions for losses on assets, contingent liabilities, operational provisions and other similar evaluations. Actual results may vary from the estimates;

(c)		Brazil does not have a hyper-inflationary economy. The rights and obligations in foreign currencies are stated according to prevailing exchange rates at the time of the Financial Statements. The prevailing is equal to R$ 2,3370 to US$ 1,00 on December 31, 2008 (R$ 1,7713 to US$ 1,00 on December 31, 2007), for monetary items.

		For non-monetary items measured at cost, the Company applies the exchange rate at the date of the transaction. For non-monetary items measured at fair value the Company applies the exchange rate to determine the value. Rights and obligations in the domestic currency, when applicable, are adjusted monetarily according to contractual terms;

(d)		Marketable securities, classified as cash and cash equivalents are represented by less than 90 days applications and are stated at cost plus accrued income earned at the financial statements date, limited to the market value. The remaining investments, with maturities over 90 days, are measured at fair value and recorded as “Short-term investments”;

(e)		Assets and liabilities that are realizable or due more than 12 months after the financial statements date are classified as non-current;

(f)		Revenues are recognized in the results when all the risks and benefits of the product or service are transferred to the customer. Income is not recognized when there is significant uncertainty of its realization;

(g)		Accounts receivable are recorded and stated in the balance sheet at their nominal value plus monetary or exchange variations and reduced by provisions to cover extraordinary loss on realization as applicable;

(h)		The allowance for doubtful accounts is set up at an amount considered sufficient by the management to cover possible loss on the realization of these credits. The estimated value of the allowance for doubtful accounts is modified based on the expectations of the management with respect to the possibility of recovery of the amounts or changes in the financial situation of the customers;

(i)		Inventories are stated at the lower of average cost of acquisition or production and replacement or completion values. Where applicable Vale provides for obsolete inventory based on the estimated recovery period.

		The Company classifies proven and probable reserve quantities as stockpiled inventories once they have been removed from the mine;

(j)		Amounts given in advance to Centrais Elétricas do Norte do Brasil S.A. – Eletronorte, due to a long term contract to supply energy, are classified as “Advances to energy suppliers”, in long-term receivables;

(k)		Investments in subsidiaries, jointly-controlled companies and affiliated companies are accounted for by the equity method, based on the stockholders’ equity of the investees, and when applicable, increased/decreased by goodwill/negative goodwill to be amortized and provision for losses. Other investments are booked at acquisition cost and deducted when applicable for provision of losses. At the consolidated level, the exchange rate effect on foreign stockholders equity is classified as monetary and net exchange rate variations are included as part of the Company’s Stockholders Equity until such time as the investment is sold or written off upon which time it is accounted for as a revenue or expense in the financial results. Transactions in foreign currency and operations abroad are translated to the presentation currency in financial statements in Brazil for the purpose of registering equity interests and full or proportional consolidation of financial statements;

(l)		Property, plant and equipment, including interest incurred during the construction period, are recorded at historical cost (the assets acquired in Brazil are also increased by monetary restatement up to 1995) and depreciated using the straight-line method, based on the estimated useful lives of the assets. Depletion of mineral reserves is based on the ratio between effective production and the total probable and proven reserves.

		The company revises the accounting value of long-term assets used in their operations every time there is an event or circumstances that may indicate that the value of an asset or a group of assets may not be recovered;

(m)		Research and development costs are recognized as operating expenses until the economic feasibility to commercially exploit a mine is proven. Once proven, the costs of developing the mine are capitalized;

(n)		Intangibles are recorded at acquisition cost, less accumulated amortization and provisions for losses as applicable. They refer to goodwill on acquisitions based on expectation of future profitability of Vale Inco, Caemi, MBR, Vale Australia, concessions to operate the Ferrovia Norte Sul – FNS railway and developed technologies and software. Intangible assets that have a defined useful life are amortized depending on their effective use or a method that reflects their economic benefit. Intangible assets with an indefinite useful life are tested annually based on recoverability;

(o)		Every year the Company examines evidence to test if the carrying value of an asset is not recoverable and in the case that the Company verifies such evidence the recoverable value for the asset is estimated. Irrespective of the indication of recovery of carrying values, goodwill balances resulting from business combinations and intangible assets with indefinite useful lives are tested for recovery at least annually. When the residual value of the asset exceeds its recoverable value, the Company recognizes a reduction in the balance of this asset for impairment or deterioration. For assets recorded at cost, the reduction in the recoverable amount is recorded in the income statement for the period. If the recoverable amount of an individual asset is not able to be determined, analysis is performed for the recoverable value of the cash-generating unit to which the asset belongs;

(p)		Assets and liabilities of deferred taxes are based: (a) on the temporary differences between the accounting value and the tax bases of our assets and liabilities; (b) losses for income tax purposes; (c) on the negative base of the calculation of the social contribution, based on the assumption of future taxable profits. If the Company generates future loss, or if it is not able to generate future profit, or if there is a significant change in the effective tax rates or in the necessary time for these deferred taxes to be deductible or taxable, the management may consider it necessary to constitute a provison for losses of these deferred assets;

(q)		The company adopts the accounting rules due to the Resolution CVM 371/00 of recognition of liabilities and results sourced from actuarial assessment of its employee pension plans. Occasionally surpluses originate from employee benefit plans and are recognized up to the probable reduction amount of future contributions of the sponsor for such plans. Actuarial gains and losses due to actuarial adjustments in assumptions and changes to pension benefits, retirement plans and health plan actuarial commitments are recognized in the results, according to a corridor method;

(r)		Long term assets and liabilities of the Company and its subsidiaries are adjusted to present value, where applicable, based on a discount rate that reflects the Company’s best estimate. The Company believes that for a significant portion of its long term assets and liabilities, with the exception of a contract of shares usufruct from MBR ,has been substantially disclosed and the present value according to market rates and the market value adjustment does not present significant impact;

(s)		Investments classified as available for sale are accounted for in accordance with CVM Resolution n º 566. Therefore, we exclude unrealized gains and losses, net of taxes, where applicable, and record the results in an account named Equity Assessment Adjustment until they occur. All derivative financial instruments are recognized as assets or liabilities on our balance sheet and they are measured at market value. Changes in value of derivatives are recorded in each period as gains or losses and result in adjustments to the Equity Assessment Adjustment, depending on the characteristics of the transaction as an effective hedge, and its effectiveness during the year;

(t)		Leases in which a significant part of the benefits and risks of ownership remain with the lessor are classified as operating leases. Payments for operating leases (net of any incentives received from the lessor) are included in the results over the term of the lease using the linear method;

(u)		Obligations relating to the ending of mining activities are categorized as Asset Retirement Obligations. These obligations consist primarily of the costs associated with termination of activities. The cost of demobilization from active duty is capitalized as part of the carrying value of the asset and subsequently depreciated over the service life of the asset;

(v)		During the start-up phase of a mine, before the start of production, costs of removal of overburden (i.e, costs associated with removal of overburden and all other waste materials) are included as part of the depreciable cost of development. Subsequently, these costs are amortized during the life of the mine based on proven and probable reserves. After the onset of production of the mine, the ore removal expenses are treated as a cost of production;

(w)		The financial statements of the Parent Company reflect the Board of Directors’ proposal for appropriation of the net income for the year, on the assumption of the approval at the Annual General Meeting of Stockholders’; and

(x)		The approval of the Financial Statements by the Executive Officers was on February 19, 2009. There were no events subsequent to the Balance Sheet date that will effect the reported results for the year ended December 31, 2008.

6.5- Independent Auditors Policy

The Company developed and formalized internal rules and specific procedures of pre-approval of the services contracted with its external auditors, for the purpose of avoiding conflict of interest and loss of independence of its independent external auditors.

The policy concerning independent auditors in relation to non-audit services is based on the maintenance of their independence. According to best practices of corporate governance, all services rendered by independent auditors are pre-approved by the Fiscal Council.

According to CVM rule 381/2003, the services contracted with the present auditors of the Company, Deloitte Touche Tohmatsu Independent Auditors, during 2008 to Vale and its direct and indirect subsidiaries and its jointly-controlled companies were as follows:


	2008

Audit Fees		1.7

Audit — Related Fees		0.4

Tax requirements review (Brazil and Foreign)		2.4


Total Fees		4.5

6.6- Acquisitions and Divestments

(a)		In February 2008 the company sold its interest of 4.83% share of the ordinary shares of Jubilee Mines N.L, held by Vale Inco, for R$232 with a gain of R$139;

(b)		In October 2007 the Company won the auction for commercial exploitation of a 720 km stretch of the Ferrovia Norte-Sul – FNS railway, for a period of 30 years, running from Açailândia in the state of Maranhão, to Palmas in the state of Tocantins for the amount of R$1,478. The amount of R$ 739 was already paid, which represents 50% of the sub concession. The next installments will be paid in based on the schedule of completion of the last parts of the railway, increased by IGP-DI until the payment date;

(c)		In July 2007, the Company sold its interest of 1.8% of the ordinary shares of Lion Ore Mining International Ltd. (Lion Ore), held by its subsidiary Vale Inco for R$197 with a gain of R$153;

(d)		In June 2007, the Company sold through a primary and secondary public offering 25,213,664 common shares of Log-In Logística Intermodal S/A. (Log-In), representing 57.84% of total capital, for R$347 with a gain on sale of R$301 and gain on capital of R$116. In July the company sold a 5.1% additional stake for R$44 with a gain of R$38. Currently the Company holds 31.27% of total capital of this entity, which has been recognized as an equity investment since June 2007.

(e)		In May 2007, the Company sold in a public offering 13,802,499 Usiminas shares not subject to the shareholders’ agreement and received total proceeds of R$1,475 generating a gain of R$839. The Company retained 6,608,608 shares which are bound by the current shareholders agreement of Usiminas.

(f)		In May 2007, the Company acquired 6.25% of EBM for R$467. On this occasion an agreement was entered into that grants us during the next 30 years, the control of MBR including the right to dividends. In exchange, Vale will pay annual amounts of US$ 48.

(g)		In April 2007, Vale acquired 100% of Vale Australia (formerly named AMCI Holdings Australia Pty Ltd – AMCI), a private company held in Australia, which operates and controls coal assets through joint ventures, for R$1,328.

(h)		In March 2007, Vale acquired the remaining 18% interest in Ferro Gusa held by Nucor do Brasil S.A. for R$41. As a result Vale now owns 100% of Ferro Gusa’s shares;

(i)		In January 2007, the Company finalized the process of acquisition of Inco with the acquisition of the final portion of 12.27% for R$4 billion. The total acquisition cost reached the amount of R$36 billion. The special meeting of shareholders of Inco approved the amalgamation of Inco with Itabira Canada Inc. (Itabira Canadá), a wholly owned indirect subsidiary of the Company. Pursuant to the amalgamation, Inco became a wholly owned subsidiary and changed its name to “CVRD Inco Limited” (actually Vale Inco).

6.7- Cash and Cash Equivalents


	Consolidated				Parent Company
	2008		2007		2008		2007
Cash and bank accounts		1,814		795		59		71
Marketable securities linked to the interbank deposit certificate rate		5,490		343		4,222		49
Time deposits / Overnight		17,335		990		2,432		—

		24,639		2,128		6,713		120

The increase primarily relates to the application of financial resources obtained through the global offering that occurred in August 2008 (note 6.21)

6.8- Accounts Receivable


	Consolidated						Parent Company
	2008			2007			2008			2007

Domestic		1,135			1,162			825			1,166
Export		6,997			6,173			9,071			1,293

		8,132			7,335			9,896			2,459

Allowance for doubtful accounts		(199	)		(181	)		(69	)		(64	)
Allowance for ore weight credits		—			(18	)		—			(16	)

		7,933			7,136			9,827			2,379

No single customer accounted for more than 10% of total revenues.

Additional allowances for doubtful accounts charged to the statement of income as expenses in 2008 and 2007 totaled R$ 65 and R$ 70, respectively.

6.9- Related Parties

Throughout the Company’s operations, it enters into transactions between related parties due from the sale and purchase of products and services including the leasing of pelletization plants, loans under normal market conditions, marketing of raw material and rail transport services.

Non eliminated related parties operations, were as follows:


	Consolidated
	Assets								Liabilities
	2008				2007				2008				2007
			Related				Related				Related				Related
	Customers		party		Customers		party		Suppliers		party		Suppliers		party
Companhia Nipo-Brasileira de Pelotização - NIBRASCO		10		1		60		10		23		58		26		—
Companhia Hispano-Brasileira de Pelotização - HISPANOBRÁS		8		—		45		6		15		51		40		—
Companhia Ítalo-Brasileira de Pelotização - ITABRASCO		35		7		46		—		46		27		43		—
Companhia Coreano-Brasileira de Pelotização - KOBRASCO		1		—		21		1		18		8		12		—
Usinas Siderúrgicas de Minas Gerais S.A. - USIMINAS		42		—		52		9		1		6		—		—
Samarco Mineração S.A.		1		11		4		5		—		—		—		—
MRS Logistica S.A.		—		—		2		—		168		125		30		—
Baovale Mineração S.A.		2		—		14		—		23		—		36		—
Mitsui & Co., Ltd		—		—		—		—		—		—		37		—
Mineração Rio do Norte S.A.		—		—		—		—		53		—		30		—
Minas da Serra Geral S.A.		—		—		—		—		8		7		10		3
Korea Nickel Corporation		90		—		16		—		—		—		—		—
Others		72		9		37		10		48		5		10		12


Total		261		28		297		41		403		287		274		15


Registered as:
Current		261		28		297		36		403		162		274		15
Non-current		—		—		—		5		—		125		—		—

		261		28		297		41		403		287		274		15


	Parent Company
	Asset								Liability
	2008				2007				2008				2007
			Related				Related				Related				Related
	Customers		Parties		Customers		Parties		Suppliers		Parties		Suppliers		Parties
ALBRAS — Alumínio Brasileiro S.A.		20		6		30		95		—		—		—		—
ALUNORTE — Alumina do Norte do Brasil S.A.		65		127		25		207		13		—		22		—
Baovale Mineração S.A.		3		2		28		1		46		—		73		—
Belém Administrações e Participações Ltda		—		19		—		—		—		—		—		—
Companhia Coreano-Brasileira de Pelotização - KOBRASCO		2		—		42		1		36		12		23		—
Companhia Hispano-Brasileira de Pelotização - HISPANOBRÁS		16		—		89		12		31		104		82		—
Companhia Ítalo-Brasileira de Pelotização - ITABRASCO		69		15		93		—		94		56		87		—
Companhia Nipo-Brasileira de Pelotização - NIBRASCO		20		47		122		67		47		139		52		—
Companhia Paulista de Ferro Ligas		—		—		2		—		—		131		—		68
Companhia Portuária Baia de Sepetiba — CPBS		—		—		11		—		—		80		44		170
CVRD Overseas Ltd.		1,184		—		236		—		—		790		—		694
Docepar S.A.		—		30		—		27		—		—		—		—
Ferrovia Centro — Atlântica S.A.		61		30		14		30		13		57		13		104
Mineração Rio do Norte S.A.		—		86		—		172		—		—		—		—
Mineração Tacumã Ltda		—		18		—		17		—		—		—		—
Minerações Brasileiras Reunidas S.A. — MBR		10		678		4		674		28		22		206		550
MRS Logistica S.A.		1		17		3		44		224		—		62		—
Salobo Metais S.A.		2		234		2		225		—		—		—		—
Samarco Mineração S.A.		1		378		8		247		—		—		—		—
Urucum Mineração S.A.		—		165		—		—		—		—		—		—
Usinas Siderúrgicas de Minas Gerais S.A. - USIMINAS		36		—		46		—		—		—		—		—
Vale International S.A.		7,857		4,442		1,022		3,074		30		46,252		34		34,483
Vale Manganês S.A.		7		597		9		—		—		54		—		64
Others		122		79		147		99		57		27		29		35


Total		9,444		6,970		1,890		4,993		619		47,724		727		36,168


Registered as:
Current		9,444		6,636		1,890		3,413		619		38,143		727		29,466
Non-current		—		334		—		1,580		—		9,581		—		6,702

		9,444		6,970		1,890		4,993		619		47,724		727		36,168

The results arising from commercial and financial transactions with related parties, classified in the statement of income as revenue and costs of sales and services and financial income and expenses, are as follows:


	Consolidated
	Income				Expense / Cost
	2008		2007		2008		2007
Baovale Mineração S.A.		—		—		17		16
Companhia Hispano-Brasileira de Pelotização — HISPANOBRÁS		291		216		457		327
Companhia Ítalo-Brasileira de Pelotização — ITABRASCO		231		203		269		292
Companhia Coreano-Brasileira de Pelotização — KOBRASCO		85		197		258		331
Companhia Nipo-Brasileira de Pelotização — NIBRASCO		78		334		408		540
Mineração Rio do Norte S.A.		—		—		276		271
MRS Logística S.A.		9		2		936		674
Samarco Mineração S.A.		234		112		—		—
Usinas Siderúrgicas de Minas Gerais — USIMINAS		1,198		886		—		—
Others		34		15		39		34

		2,160		1,965		2,660		2,485


	Parent Company
	Revenue					*Expense / Cost ()**
	2008		2007			2008		2007
ALBRAS — Alumínio Brasileiro S.A.		26		41			0		0
ALUNORTE — Alumina do Norte do Brasil S.A.		384		122			53		100
Baovale Mineração S.A.		—		—			0		32
Companhia Portuária Baia de Sepetiba — CPBS		0		1			296		327
CVRD Overseas Ltd.		4,423		2,208			214		(124	)
Ferrovia Centro — Atlântica S.A.		206		163			50		45
Ferro Gusa Carajas		—		48					54

Companhia Hispano-Brasileira de Pelotização — HISPANOBRÁS		621		442			668		360

Companhia Ítalo-Brasileira de Pelotização — ITABRASCO		424		421			304		296
Companhia Coreano-Brasileira de Pelotização — KOBRASCO		175		404			410		521
MRS Logistica S.A.		38		28			1,312		706
Companhia Nipo-Brasileira de Pelotização — NIBRASCO		162		694			696		625
Samarco Mineração S.A.		467		225			0		—
Usinas Siderúrgicas de Minas Gerais S.A. — USIMINAS		1,025		764			0		—
Vale Energia S.A.		0		0			118		4
Vale Manganês S.A.		83		55			13		12
Vale International S.A.		20,586		12,440			13,033		(4,250	)
Valesul Alumínio S.A.		81		121			0		—
Ohers		14		(11	)		102		62

		28,715		18,165			17,269		(1,229	)


(*)		Includes effect of monetary balances on the financial

Additionally the Company has balances with Mitsui & Co, Banco Nacional de Desenvolvimento Social and BNDES Participações S.A. in the amounts of R$10, R$1,412 and R$713 respectively at December 31, 2008. These balances are related to loans received at market interest rates, with maturity at November, 2013. These amounts are booked as loans and financing, as described in note 6.16.

The Company also has marketable securities with Bradesco in the amount of R$43 at December 2008.


	2008

Remuneration of key management personnel

Short-term benefits to administrators		64
Other long-term benefits to administrators		14
Remuneration based on shares		8

Total		86

6.10- Inventories


	Consolidated				Parent Company
	2008		2007		2008		2007
Finished products
• Nickel, co -products and sub products Inco		3,537		3,209		33		—
• Iron ore and pellets		1,917		1,110		1,677		967
• Manganese and ferroalloys		518		186		—		—
• Aluminum products		365		327		22		60
• Copper		60		27		60		27
• Steel products		55		59		—		—
• Other		272		206		39		6

		6,724		5,124		1,831		1,060

Spare parts and maintenance supplies		2,962		2,134		1,082		872

		9,686		7,258		2,913		1,932

At December 31, 2008, the Company recorded inventory adjustments of R$ 184 and R$ 150 to reduce nickel and steel inventories to their respective recoverable values.

6.11- Deferred Income Tax and Social Contribution

Income of the company is subject to the normal tax system. The net balances of deferred assets and liabilities are presented as follows:


	Net Deferred
	Consolidated						Parent Company
	2008			2007			2008			2007
Tax loss carryforward		725			832			—			—

Temporary differences:
• Pension Plan		430			1,101			235			242
• Contingent liabilities		687			861			654			783
• Provision for losses on assets		1,167			323			1,047			295
• Goodwill from propety, plan and equipaments acquired		(8,518	)		(8,073	)		—			—
• Others		(291	)		(1,551	)		(76	)		(472	)

		(6,525	)		(7,339	)		1,860			848


Total		(5,800	)		(6,507	)		1,860			848


Current		1,305			1,084			1,220			611

Non-current		934			482			640			237

ASSETS		2,239			1,566			1,860			848


Non-current		(8,039	)		(8,073	)		—			—

LIABILITIES		(8,039	)		(8,073	)		—			—

The amounts reported as income tax and social contribution, which affected the results for the period, are as follows:


	Consolidated															Parent Company
	(Unaudited)									Accumulated						Accumulated
	4Q/08			3Q/08			4Q/07			2008			2007			2008			2007
Income before income tax and social contribution		8,020			12,459			4,877			22,376			28,645			19,821			22,518
Results of equity investment		(261	)		(1,037	)		574			1,325			2,405			(16,574	)		(11,447	)

		7,759			11,422			5,451			23,701			31,050			3,247			11,071

Income tax and social contribution at combined tax rates		34	%		34	%		34	%		34	%		34	%		34	%		34	%


Federal income tax and social contribution at statutory rates		(2,638	)		(3,883	)		(1,853	)		(8,058	)		(10,557	)		(1,104	)		(3,764	)

Adjustments that affects the basis of taxes:

Income tax benefit from interest on stockholders’ equity		446			287			204			1,315			839			1,315			839
Fiscal incentives		(24	)		45			81			227			386			—			129
Results of overseas companies taxed by different rates wich diference than the parent company rate		1,458			2,555			1,649			3,046			5,682			—			—
Reduced incentive rate		2,377			1,058			(243	)		2,377			(3,407	)		—			—
Provisions Reverted		431			—			—			431			—			431			—
Others		415			49			(21	)		(3	)		(28	)		816			284


Income tax and social contribution		2,465			111			(183	)		(665	)		(7,085	)		1,458			(2,512)

The deferred assets and liabilities related to income tax and social contribution arising from tax losses, negative social contribution bases and temporary differences are recognized from an accounting standpoint considering an analysis of likely future results, based on economic and financial projections prepared based on internal assumptions and macroeconomic, commercial and fiscal scenarios which could change in the future.

These temporary differences will be realized upon the occurrence of the corresponding taxable events, expected to be as follows:


	Net amount of credits
Years	Consolidated			Parent Company
2009		1,312			1,220
2010		(115	)		80
2011		(160	)		80
2012		(125	)		80
2013		(190	)		80
2014		(439	)		80
2015		(458	)		80
2016		(442	)		80
2017		(5,183	)		80

		(5,800	)		1,860

Vale has certain tax incentives of reduction and exemption of income taxes. The incentives are calculated based on exploration profit and are based on the production levels recognized and incentive to the defined periods of each product and expire from 2008 to 2013. An amount equal to the tax saving must be appropriated to a reserve account with in stockholders’ equity and may not be distributed in the form of cash dividends.

Vale also has tax incentives related to Goro Project in New Caledonia. These incentives include an income provisions tax exemption 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 exemption.

In addition, Goro qualifies for certain exemptions from indirect taxes such as import duties during the construction phase of the commercial life of the project. Some of these tax benefits, including the income tax exemption, are subject to an earlier phase out should the project achieve a specified cumulative rate of return. Vale is 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, there has been no net income for New Caledonia tax purposes. The benefits of this legislation are expected to apply with respect to any taxes otherwise payable once the Goro project is in operation.

6.12- Taxes to recover or offset


	Consolidated				Parent Company
	2008		2007		2008		2007
Income tax		3,957		1,293		2,581		378
Value-added tax — ICMS		733		591		538		432
PIS and COFINS		1,057		712		328		115
INSS		20		32		19		31
Others		186		102		35		29


Total		5,953		2,730		3,501		985


Current		4,886		2,230		3,312		792
Non-current		1,067		500		189		193


		5,953		2,730		3,501		985

6.13- Investments


	Consolidated
	Investments				Equity Results
					(Unaudited)									Accumulated
														Before new			New practices
	2008		2007		4Q/08			3Q/08			4Q/07			practices			adjustments			2008			2007
Investments carried at market value
Usinas Siderúrgicas de Minas Gerais S.A. — USIMINAS (b)		384		307		—			15			—			33			—			33			26
ThyssenKrupp CSA — Cia Siderúrgica		1,034		686		—			—			—			—			—			—			—
Mirabela Nickel Ltd		19		51		—			—			—			—			—			—			—
Skye Resources (c)		—		139		(83	)		—			—			(83	)		—			(83	)		—
Hudbay Minerals Inc.		20		—		—			—			—			—			—			—			—
Jubilee Mines N.L		—		90		—			—			—			—			—			—			—
Heron Resources Inc		5		42		—			—			—			—			—			—			—
Others		33		49		—			—			—			—			—			—			—

		1,495		1,364		(83	)		15			—			(50	)		—			(50	)		26
Investments valued by equity method of accounting
Henan Longyu Energy Resources Co. Ltd.		411		204		35			35			22			145			—			145			89
Korea Nickel Corp.		49		—		4			3			6			7			—			7			13
Log-In — Logistica Intermodal S/A.		221		189		12			—			12			37			—			37			15
Shandong Yankuang International Company Ltd		58		41		(33	)		(3	)		4			(33	)		—			(33	)		1
Vale Soluções em Energia		98		—		—			—			—			—			—			—			—
Others		110		71		6			(1	)		2			(2	)		—			(2	)		(1	)

		947		505		24			34			46			154			—			154			117

Exchange variation		—		—		671			1,341			(287	)		1,231			(1,231	)		—			(1,244	)

		2,442		1,869		612			1,390			(241	)		1,335			(1,231	)		104			(1,101	)


(a)		Investments valued at market value, or equivalent, as of September 2008, with adjustments reflected in the evaluation group of assets in equity.

(b)		The values recorded as equity refers to dividends received.

(c)		The values recorded as equity refers to loss on marking to market is not temporary.


			Adjusted			Adjusted net									Results of equity						Dividends
	Partici-		stockholders’			income (loss) for			Investments						investments						received
Parent Company	tion %		equity			the year			2008			2007			2008			2007			2008
Valued by equity method of accounting
ALBRAS — Alumínio Brasileiro S.A.		51.00		1,945			148			992			906			76			288			78
ALUNORTE — Alumina do Norte do Brasil S.A.		57.03		4,347			241			2,479			2,350			137			447			79
Belém — Administrações e Participações LTDA.		100.00		232			22			232			229			22			76			—
Cadam S. A.		61.48		253			(54	)		156			190			(33	)		(21	)		—
Companhia Coreano-Brasileira de Pelotização — KOBRASCO		50.00		255			156			127			80			78			32			31
Companhia Hispano-Brasileira de Pelotização — HISPANOBRÁS		50.89		333			202			170			76			103			19			10
Companhia Ítalo-Brasileira de Pelotização — ITABRASCO		50.90		268			107			136			82			55			20			—
Companhia Nipo-Brasileira de Pelotização — NIBRASCO		51.00		504			292			257			108			149			23			—
Companhia Portuária da Baía de Sepetiba — CPBS		100.00		325			140			325			392			140			172			207
Ferro Gusa Carajas (d)		—		—			—			—			383			—			55			—
Ferrovia Norte Sul S.A.		100.00		820			26			820			739			26			(4	)		—
LOG-IN — Logística Intermodal S/A		31.33		657			68			221			189			37			37			5
Minas da Serra Geral S.A. — MSG		50.00		99			4			49			53			2			1			—
Mineração Rio do Norte S.A.		40.00		591			220			237			236			88			175			172
Mineração Tacumã Ltda		100.00		(88	)		56			(88	)		(144	)		56			23			—
AFAC Mineração Tacumã Ltda		—		—			—			1,788			1,788			—						—
Minerações Brasileiras Reunidas S.A. — MBR (b)		87.94		4,595			442			4,129			3,218			420			1,308			—
MRS Logística S.A. (b)		10.89		1,833			632			200			131			69			60			27
Salobo Metais S.A. (c)		100.00		417			—			417			298			—			—			—
AFAC Salobo Metais S.A.		—		—			—			415			99			—						—
Samarco Mineração S.A.		50.00		600			1,105			300			412			553			486			546
Vale Manganês S.A.		100.00		600			657			600			538			657			124			—
Valesul Alumínio S.A. (b)		56.44		656			21			370			366			12			(122	)		8
Vale Capital (a)		100.00		861			1,033			—						—						—
Vale International S.A. (a)		100.00		74,367			15,044			74,367			49,040			15,044			9,782			—
Urucum Mineração		100.00		38			163			38			43			163			(3	)		4
Others										527			(57	)		149			(227	)		13
Carried at market value																						—
Thyssenkrupp CSA Companhia Siderúrgica										1,034			686			—			—			—
Usinas Siderúrgicas de Minas Gerais S.A. — USIMINAS										384			307			—			—			33

										90,682			62,738			18,003			12,751			1,213


(a)		The net assets of companies based abroad was converted into national currency at the exchange rates prevailing at the date of financial statements.

(b)		That figure includes only the direct participation of Vale.

(c)		Undertaking pre-operational phase.

(d)		Company incorporated in 2008.

6.14- Intangible


	Intangible						Goodwill amortization
							(Unaudited)									Accumulated
Intangible by segment	2008			2007			4Q/08			3Q/08			4Q/07			2008			2007

Iron ore and pellets
Goodwill of Minerações Brasileiras Reunidas — MBR (Includes goodwill Caemi) (b)		4,060			4,615			(138	)		(139	)		(139	)		(554	)		(540	)
Right of use of the actions of the EBM		679			—			—			—			—			—			—
Other companies (a, b)		5			33			(1	)		(1	)		(3	)		(3	)		(9	)

		4,744			4,648			(139	)		(140	)		(142	)		(557	)		(549	)

Nickel
Goodwill of Inco Limited (a, b, d)		3,471			7,366			(207	)		(212	)		(189	)		(862	)		(753	)
Other rights Vale Inco		667			691			—			—			—			—			—

		4,138			8,057			(207	)		(212	)		(189	)		(862	)		(753	)

Coal
Goodwill of Vale Australia (a, b)		171			129			(5	)		(1	)		(2	)		(10	)		(2	)

Logisitc
Ferrovia Norte Sul — FNS (c)		1,660			1,482			—			—			—			—			—

Other rights		14			—			—			—			—			—			—


Total consolidated		10,727			14,316			(351	)		(353	)		(333	)		(1,429	)		(1,304	)


Intangible not recorded at the parent company		(2,327	)		(2,173	)		—			—			—			—			—

Total parent company		8,400			12,143			(351	)		(353	)		(333	)		(1,429	)		(1,304	)


(a)		Goodwill not recorded in the parent company;

(b)		Goodwill based on future results expectation (stated period of amortization of 10 years);

(c)		Amortization for the year of R$ 10, recorded in cost of products sold;

(d)		Includes impairment of R$ 2,447, recorded in 4Q08.

The main movements at during 2008, which produced a balance of R$ 14,316 at December 31, 2007 to R$ 10,727 at December 31, 2008, are as follows: Adictions and write-off, net, including impairmet:: -R$ 3,317, Amortization: -R$ 1,440 and exchange and monetary variation: R$ 1,168.

Impairment of goodwill

As described on Notes 6.4 (p), Vale tests the recoverability of indefinite intangible assets that are mainly constituted of goodwill from expectative on future results from business combination.

Following the downturn in the economy which contributed to the decline in the prices of certain commodities, during the last quarter of 2008, Vale reviewed its estimates on prices, demand, interest rate, costs and etc., considered on forecasted discounted cash flows of each of its cashflow generated unit used as assumptions to measure the recoverability of goodwill and assets linked to these cashflow generating unit.

As a result, the Company determined that part of the goodwill associated with the nickel unit business from the acquisition of Vale Inco in 2006, were above its recoverable value of such units and in this way a R$2,447 loss due to lack of recoverability was recognized in the statement of income.

Recognition of additional goodwill impairment charges in the future would depend on several estimates including market conditions, recent actual results and management’s forecasts. This information shall be obtained at the time when its assessment is to be updated. Therefore, at this point, it is not possible to reasonably estimate whether any future goodwill impairment charge could be determined in the near future.

6.15- Property, Plant and Equipment

(a) By type of asset:


				Consolidated									Parent Company
	Average			2008							2007		2008							2007
	depreciation					Accumulated									Accumulated
	rates			Cost		depreciation			Net		Net		Cost		depreciation			Net		Net
Lands		0.00	%		425		—			425		195		170		—			170		99
Buildings		3.63	%		9,357		(2,472	)		6,885		5,919		3,357		(918	)		2,439		2,010
Installations		3.73	%		28,759		(9,388	)		19,371		15,565		13,514		(4,019	)		9,495		8,147
Equipment		7.34	%		13,870		(4,283	)		9,587		7,505		4,567		(1,651	)		2,916		2,623
Information technology equipment		20.00	%		2,086		(1,138	)		948		811		1,664		(943	)		721		792
Railways		3.09	%		11,851		(4,293	)		7,558		6,513		10,090		(3,866	)		6,224		5,549
Mineral rights		3.26	%		29,179		(3,445	)		25,734		24,128		1,844		(399	)		1,445		1,255
Others		7.27	%		10,904		(2,253	)		8,651		8,322		3,291		(1,436	)		1,855		1,551

					106,431		(27,272	)		79,159		68,958		38,497		(13,232	)		25,265		22,026
Construction in progress					31,335		—			31,335		21,519		13,432		—			13,432		6,071

Total					137,766		(27,272	)		110,494		90,477		51,929		(13,232	)		38,697		28,097

(b) By business area:


	Consolidated
	2008							2007
			Accumulated
	Cost		depreciation			Net		Net
Ferrous
In operation		33,424		(12,692	)		20,732		18,131
Construction in Progress		9,068		—			9,068		6,914

		42,492		(12,692	)		29,800		25,045

Non — Ferrous
In operation		50,143		(6,839	)		43,304		39,562
Construction in Progress		18,121		—			18,121		10,241

		68,264		(6,839	)		61,425		49,803

Logistics
In operation		9,162		(2,992	)		6,170		4,924
Construction in Progress		837		—			837		523

		9,999		(2,992	)		7,007		5,447

Holdings
In operation		11,881		(3,816	)		8,065		5,436
Construction in Progress		1,265		—			1,265		3,072

		13,146		(3,816	)		9,330		8,508

Corporate Center
In operation		1,821		(933	)		888		905
Construction in Progress		2,044		—			2,044		769

		3,865		(933	)		2,932		1,674

Total		137,766		(27,272	)		110,494		90,477

Assets given in guarantee to judicial processes totaled R$ 433.

6.16- Loans and Financing

Current


	Consolidated				Parent Company
	2008		2007		2008		2007

Trade finance		958		1,007		—		297
Working capital		130		—		—		—

		1,088		1,007		—		297

Non-current


	Consolidated								Parent Company
	Current liabilities				Non-current liabilities				Current liabilities				Non-current liabilities
	2008		2007		2008		2007		2008		2007		2008		2007
Foreign operations
Loans and financing in:
U.S. dollars		568		411		15,287		11,472		380		312		1,046		1,081
Other currencies		54		114		390		379		8		10		15		18
Notes in U.S. dollars		—		—		15,214		11,841		—		—		—		—
Export securitization (*)		129		94		348		363		—		—		—		—
Perpetual notes		—		—		194		155		—		—		—		—
Accrued charges		507		499		—		—		24		33		—		—

		1,258		1,118		31,433		24,210		412		355		1,061		1,099


Local operations
Indexed by TJLP, TR, IGP-M and CDI		103		1,146		4,879		2,243		76		1,040		4,645		2,034
Basket of currencies		2		3		9		10		3		3		10		10
Loans in U.S. dollars		—		—		386		66		—		—		386		—
Non-convertible debentures		—		—		5,987		5,916		—		—		5,500		5,500
Accrued charges		220		87		—		—		220		85		—		—

		325		1,236		11,261		8,235		299		1,128		10,541		7,544

		1,583		2,354		42,694		32,445		711		1,483		11,602		8,643


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

The long-term portion as of December 31, 2008 matures as follows:


	Consolidated				Parent Company
2010		5,571	13	%		1,958	17	%
2011		6,651	16	%		365	4	%
2012		3,019	7	%		280	2	%
2013		6,284	15	%		4,212	36	%
2014 onwards		20,486	48	%		4,787	41	%
No due date (Perpetual notes and non-convertible debentures)		683	1	%		—	0	%

		42,694	100	%		11,602	100	%

As of December 31, 2008, annual interest rates on long-term debt were as follows:


	Consolidated		Parent Company
Up to 3%		1,830		396
3.1% to 5%		13,761		1,419
5.1% to 7% (*)		14,095		759
7.1% to 9% (*)		4,994		1,024
9.1% to 11%		203		—
Over 11% (*)		8,716		8,715
Variable (Perpetual notes)		678		—

		44,277		12,313


(*)		Includes non-convertible debentures and other Brazilian-reais denominated loans where interest is determined by CDI and TJLP (Brazilian interbank certificate of deposit) rate accumulated variation plus spread. For these operations the Company has entered into derivative transactions to hedge the Company exposure on the contracted total floating rate debt denominated in reais. The contract value for these operations is R$9,743, which R$8,532 have original interest rate above 11%. After the hedge contract the average cost of these operations is equivalent to 4.9%.

The indexes applied to the Company debt and respective percentage variations in each year ended were as follows:


	%
	2008		2007			2006
TJLP — Long-Term Interest Rate (effective rate)		1.5		6.4			7.9
IGP-M — General Price Index — Market		1.2		7.8			3.8
Devaluation of United States Dollar against Real		31.9		(17.2	)		(8.7	)

On January 28, 2008 the Company entered into a trade finance agreement on working capital in the amount of R$ 2 billion with final maturity in 2018.

In 2008, Vale entered into agreements with Banco Nacional de Desenvolvimento Econômico e Social (BNDES), the Brazilian National Development Bank and with long-term Japanese financing agencies, Japan Bank for International Cooperation (JBIC) and Nippon Export and Investment Insurance (NEXI) for the financing of the mining, logistics and power generation projects to be developed under Vale’s investment program for 2008-2012.

Vale has total revolving credit lines with bank syndicates, which work as a short term liquidity buffer that allow a more efficient cash management. Under revolving credit facilities, amounts drawn and repaid can be disbursed again at the option of the Borrower. At December 31, 2008, the total amount available under revolving credit lines was of US$ 1.9 billion, being US$ 1,15 billion granted to Vale International and the balance to Vale Inco. As of December 31, 2008, neither Vale International nor Vale Inco had drawn any advance amount under these facilities and Vale Inco has drawn US$ 101 million by way of letters of credit.

Some of Vale’s long-term debt instruments have financial covenants. The principal financial covenants relate to certain ratios that much be maintained, such as debt to EBITDA and interest coverage. The Company is in full compliance with financial covenants as of December 31, 2008.

As of December 31, 2008, the US-dollar denominated fixed interest notes of R$ 15,214 (December 31, 2007 — R$ 11,841) and other debt of R$ 25,814 (December 31, 2007 — R$ 21,359) are not securitized. The export securitization of R$ 477 (December 31, 2007 — R$ 457) is collateralized by future receivables from certain export sales by the subsidiary CVRD Overseas Ltd. Loans from international lenders in the amount of R$ 192 (December 31, 2007 — R$ 146) are guaranteed by Brazilian Federal Government, to which The Company has provided guarantees in the same amount. The remaining long-term debt of R$ 760 (December 31, 2007 — R$ 996) is collateralized mainly by receivables from the subsidiaries.

6.17- Contingent Liabilities

The Company and its subsidiaries are party to labor, civil, tax and other suits and have been contesting these matters both administratively and in court. When applicable, these are backed by judicial deposits. Provisions for losses are estimated and restated monetarily and backed by management opinions and of the Legal Department and outside counsel.

In addition to provisions recorded, there are other contingent liabilities, split between taxes, labor and civil claims, which could result in a possible loss in the amount of R$ 6,793 (R$ 3,416 for the parent company). However, based on the opinion of our lawyers, there is no need to establishment of provision.

At the Financial Statements dates the contingent liabilities of the Company were:

(a)

Provisions for contingencies net from judicial deposits, considered by management and its legal counsel as sufficient to cover losses from any type of lawsuit, are as follows:


	Consolidated						Parent Company
	2008			2007			2008			2007
I) Tax contingencies		2,299			3,269			1,203			1,805
(-) Judicial deposits		(1,082	)		(1,346	)		(862	)		(803	)

		1,217			1,923			341			1,002

II) Civil contingencies		687			575			475			419
(-) Judicial deposits		(44	)		(277	)		—			(202	)

		643			298			475			217

III) Labor contingencies		1,097			937			905			757
IV) Environmental contingencies		32			31			9			3

Total accrued liabilities		2,989			3,189			1,730			1,979


	2008			2007			2008			2007
Balance at the beginning of the period		3,189			2,363			1,979			1,508
Provisions, net of reversals		(1,234	)		752			(747	)		71
Payment		(30	)		(56	)		(30	)		(45	)
Monetary update		568			442			385			507
Judicial deposits		496			(312	)		143			(62	)

Balance at the end of period		2,989			3,189			1,730			1,979

1)		Tax Contingencies:

		The major suits are:

	•		Value-Added Tax on Sales and Services (ICMS) — The contingent figure refers to the credit right of differential rates regarding the transfer of assets between company branches;

	•		Services Tax (ISS) — The major claims are regarding local tax collecting disputes;

	•		Tax for Social Security Financing (COFINS) — The major contingencies, related to merged companies and refer to the increase of the rate from 2% to 3% between 1999 and 2000;

	•		Import Duty (II) — The provision made is related to the Fiscal classification of equipment imported by merged companies;

	•		Additional Compensation to harbour workers (AITP) — Amounts regarding the collection of compensation amounts for public harbour workers transferred to Private Harbour;

	•		Income Tax and Social Contribution — Essentially regarding a fiscal loss compensation and negative bases of social contribution disputing the limit of 30% of taxable earnings and monetary variations of assets from merged companies; and

	•		Others — Regarding dispute of tax credit compensation and the basis of calculation of Finance Compensation by Exploration of Mineral Resources — CFEM.

2)		Civil Contingencies:

		The civil actions are principally related to claims made against us by contractors in connection with losses alleged to have been incurred by them as a result of various past government economic plans, accidents and return of land.

3)		Labor Contingencies:

		Labor and social security — related actions principally comprise claims for (a) payment of time spent traveling from their residences to the work-place, (b) additional health and safety related payments and (c) disputes about the amount of indemnities paid upon dismissal and the one-third extra holiday pay.

(b)		In connection with the Girardin Financing, the Company provides certain guarantees on behalf of Goro pursuant to which we guaranteed payments due from Goro of up to a maximum amount of US$ 100 millions (“Maximum Amount”) in connection with an indemnity. We also provided an additional guarantee covering the payments due from Goro of: (a) amounts exceeding the Maximum Amount in connection with the indemnity and (b) certain other amounts payable by Goro under a lease agreement covering certain assets.

		The Company provides a guarantee covering certain termination payments due in New Caledonia from 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 is as a result of a default by Goro and the date on which an early termination of the ESA were to occur. If Goro defaults under the ESA prior to the anticipated start date for supply of electricity to the project, the termination payment, which currently is at its maximum, would be €$ 145 million. Once the supply of electricity under the ESA to the project begins, the guaranteed amounts will decrease over the life of the ESA.

		The Company expects such guarantees to be not executed and therefore no provisions for losses have been made.

(c)		At the time of our privatization in 1997, the Company issued debentures to its then-existing stockholders, including the Brazilian Government. The terms of the debentures, were set to ensure that the pre-privatization stockholders, including the Brazilian Government would participate in possible future financial benefits that could be obtained from exploiting certain mineral resources.

		A total of 388,559,056 Debentures were issued at a par value of R$ 0.01 (one cent), whose value will be restated in accordance with the variation in the General Market Price Index (IGP-M), as set forth in the Issue Deed.

		The debenture holders are entitled to receive semi-annual payments (in March and September) equivalent to a percentage of the net revenue derived from certain mineral resources owned at May 1997 and included in the Issue Deed.

		According to the Debenture Issue Deed, the amount of the premium must include interest up to the month prior to that of effective payment, plus 1% in the month in which the funds are made available to the debenture holder.

		The accumulated sales of iron ore of the mines covered by the debentures in the period between May 1997 and December 31, 2008, was 596 million metric tons in the Southeast System and 671 million metric tons in the North System of Carajas. In the event that the annual sales of iron ore remain equal to the level achieved in the last twelve months, the levels required by the Issue Deed to start premium payments of 1.7 billion metric tons for the Southeast System and 1.2 billion metric tons to the North System, would be achieved in 2018 and 2013, respectively. However, these levels of production at the indicated dates can not be confirmed.

		In September 2008, the Company paid interest on debentures in the amount of R$ 20 (R$ 22 in 2007).

6.18- Provision for asset retirement obligations

On December 31, 2008, the consolidated provision for asset retirement obligations amounted to R$ 1,997 (R$ 848 in the parent company), which was accounted for in “Provision for asset retirement obligations” in non-current liabilities and R$ 113 (R$ 44 in the parent company) classified in “Other” in current liabilities.


	Consolidated						Parent Company
	2008			2007			2008			2007
Provisions in the beginning of year		1,763			1,535			790			678
Accretion expense		294			150			163			84
Liabilities settled in the current period		(16	)		(27	)		(11	)		(15	)
Revisions in estimated cash flows		(153	)		105			(50	)		43
Cumulative translation adjustment		222			—			—			—

Provisions in the end of year		2,110			1,763			892			790

6.19- Pension Plan

The following information shows the details of the status of the defined benefit elements of the Company plans, of the valuation of actuarial obligations and of the sponsor contribution to the plans.

(a)		Pension Plan

		The results of the actuarial valuation are presented as follows:

		Fair value of assets development


	2008									2007
	Overfunded			Underfunded			Underfunded			Overfunded			Underfunded			Underfunded
	pension plans			pension plans			other benefits			pension plans			pension plans			other benefits
Fair value of assets at the begining of the year		7,417			6,405			18			7,483			6,386			9
Actual return of assets		132			(1,147	)		2			447			131			2
Contribution from sponsor		74			399			97			63			631			109
Benefits paid		(512	)		(467	)		(97	)		(576	)		(481	)		(101	)
Effect of exchange rate changes		—			328			1			—			(262	)		(1	)


Fair value of assets at the end of the year		7,111			5,518			21			7,417			6,405			18

Changes in present value of obligations


	2008									2007
	*() ’Overfunded**			Underfunded			Underfunded			*() ’Overfunded**			Underfunded			Underfunded
	pension plans			pension plans			other benefits			pension plans			pension plans			other benefits
Fair value of plan assets at beginning of year		5,629			7,127			2,668			5,402			7,293			2,523
Liabilitie recognized upon consolidation of Vale Inco		—			—			—			—			214			455
Cost of current service		20			110			42			17			119			39
Cost of interest		556			379			127			588			368			127
Benefits paid		(512	)		(467	)		(97	)		(576	)		(481	)		(101	)
Plan amendment		—			29			—			—			7			—
Hypotheses changes		(712	)		—			—			—			—			—
Actuarial loss		685			(1,207	)		(684	)		198			(64	)		(220	)
Effect of exchange rate changes		—			383			143			—			(329	)		(155	)


Fair value of plan assets at end of year		5,666			6,354			2,199			5,629			7,127			2,668

The actuarial valuation results are resumed as follows:

Reconciliation of assets and liabilities of the balance sheet


	Consolidated
	2008									2007
	*() Overfunded**			Underfunded			Underfunded			*() Overfunded**			Underfunded			Underfunded
	pension plans			pension plans			other benefits			pension plans			pension plans			other benefits
Fair value of plan assets at the end of the year		(5,666	)		(6,354	)		(2,199	)		(5,629	)		(7,127	)		(2,668	)
Fair value of assets at the end of the year		7,111			5,518			21			7,417			6,405			18
Net (gains) and losses not recognized on the balance sheet		545			231			(410	)		(232	)		—			(122	)

Total		1,990			(605	)		(2,588	)		1,556			(722	)		(2,772	)


Actuarial assets / (liabilities) recorded in the balance sheet:
Short-term		—			(26	)		(127	)		—			(38	)		(117	)
Long-term		1,990			(579	)		(2,461	)		1,556			(684	)		(2,655	)

Actuarial assets / (liabilities) recorded in the balance sheet		1,990			(605	)		(2,588	)		1,556			(722	)		(2,772	)


	Parent Company
	2008							2007
	*() Overfunded**			Underfunded		Underfunded		*() Overfunded**			Underfunded		Underfunded
	pension plans			pension plans		other benefits		pension plans			pension plans		other benefits
Fair value of plan assets at the end of the year		(5,666	)		—		—		(5,629	)		—		—
Fair value of assets at the end of the year		7,111			—		—		7,417			—		—
Net (gains) and losses not recognized on the balance sheet		545			—		—		(232	)		—		—

Total		1,990			—		—		1,556			—		—


Actuarial assets / (liabilities) recorded in the balance sheet:
Short-term		—			—		—		—			—		—
Long-term		1,990			—		—		1,556			—		—

Actuarial assets / (liabilities) recorded in the balance sheet		1,990			—		—		1,556			—		—


*()**		The company did not register in the Balance Sheet the asset from actuarial valuation because there is no evidence of realization, according to item 49 of NPC 26.

Investment target and composition of plan assets

The asset fair value of these plans is R$ 12,650 and R$ 13,840 at the end of 2008 and 2007, respectively. The assets allocations for the Company pension plan at the end of 2008 and 2007 and the target allocation for 2009, by asset category are as follows:


	Brazil
	Target allocation for 2009			Percentage of plan assets
	(Unaudited)			2008			2007

Type of assets

Equity securities		26	%		20	%		29	%
Real estate		6	%		4	%		3	%
Loans		7	%		6	%		4	%
Fixed Income		61	%		70	%		64	%

Total		100	%		100	%		100	%


	Foreign
	Target allocation for 2009			Percentage of plan assets
	(Unaudited)			2008			2007

Type of assets

Equity securities		61	%		54	%		61	%
Fixed Income		39	%		46	%		39	%

Total		100	%		100	%		100	%

The investment policy was based on the ALM-Asset Liability Modeling conducted by Mercer Consulting.

The target allocation of assets to fixed income has been established to overcome the actuarial obligations of the plans. The proposal for 2009 is to increase investment assets indexed to inflation. The remaining investments in fixed income will be used to pay the benefits of the plan in the short term.

The target allocation of income in the segment variable reflects the expected return to IBOVESPA (Brazilian stock index) and ALM.

(b)		Actuarial liability

		Allowance for additional health care plan

		Refers to the responsibility of the Company to support retirements, pensions and health assistance related to the termination of some employees, which occurred between 1987 and 1989.

		The results of the actuarial evaluation of this liability are as follows:

		*Change of fair value of assets ()**


	“Abono Complementação”
	2008			2007
Fair value of assets at the begining of the year		259			196
Actual return of assets		49			32
Contribution from sponsor		100			93
Benefits paid in the period		(67	)		(62	)


Fair value of assets at the end of the year		341			259


(*)		Does not apply to fair value of assets to health plan.

Change in the present value of obligations


	Health care						“Abono Complementação”
	2008			2007			2008			2007
Fair value of assets at the begining of the year		292			229			732			708
Current service cost		3			—			—			—
Cost of interest		29			25			71			76
Benefits paid in the period		(31	)		(21	)		(67	)		(62	)
Hypotheses changes		(34	)		—			(63	)		—
Loss (Gain) on liabilities		41			59			57			10


Fair value of plan assets at the end of the year		300			292			730			732

Reconciliation of assets and liabilities of the balance sheet


	Health care						“Abono Complementação”
	2008			2007			2008			2007
Present value of totally or partially covered actuarial obligations		(300	)		(292	)		(730	)		(732	)
Fair value of asets		—			—			341			259
Net (gains) loss not recognized on the balance sheet		31			24			49			73


Actuarial assets and liabilities acrrued in the balance sheet		(269	)		(268	)		(340	)		(400	)

Costs recognized in the income statement


	Health care				“Abono Complementação”
	2008		2007		2008			2007
Cost of interest		29		25		71			76
Actual return of assets		—		—		(49	)		(32	)


Total of costs, net		29		25		22			44

(c)		Sponsor contributions

		The contributions are as follows:


	Target to 2009			2008
Benefit plan — “VALE MAIS” — income		(46	)		(46	)
Benefit plan — “VALE MAIS” — risk and proportional benefit		(73	)		(74	)
Pension plans in the foreign		(591	)		(632	)
Complementary value (*)		(101	)		(100	)
Health care plan for retired employee (*)		(27	)		(31	)

Total contributions		(838	)		(883	)

(d)		Actuarial and economic hypotheses

		All calculations include future projections in relation to certain parameters, for example: salaries, interest, inflation, benefits from social security, mortality, invalidity and others. No actuarial results can be analyzed without knowledge of the scenarios utilized in the evaluation.

		The actuarial economic hypotheses were considering the long-term for their maturity, and must be analyzed from this point of view. They are not necessarily realizable in the short-term.

		The evaluation was based on the following economic hypotheses:

2008

2007

Local pension

Foreign pension

Local pension

Foreign pension

Economic assumptions

plans

Discount rate

11.28% p.a.

6.45% p.a.

10.24% p.a.

5.21% p.a.

Rate expected return of assets

12.22% p.a.

7.17% p.a.

12.78% p.a.

7.18% p.a.

Rate of compensation increase — up to 47 years

7.12% p.a.

3.85% p.a.

7.12% p.a.

4.01% p.a.

Rate of compensation increase — over 47 years

4.00% p.a.

3.85% p.a.

4.00% p.a.

4.01% p.a.

Inflation

4.00% p.a.

2.00% p.a.

4.00% p.a.

2.00% p.a.

Health care cost trend rate

7.12% p.a.

6.19% p.a.

7.64% p.a.

6.35% p.a.

All assumptions were revised in 2008.

6.20- Incentives of long stated period

In 2008, with the purpose of introducing a “stockholders vision” to the Company executives, as well as improving this executives retention and reinforce the culture of sustainable performance, the Board of Directors approved a long-term incentive compensation plan, which was implemented in April 2008 with a three-year cycle (2008 to 2010).

Under the terms of the plan, the participants, restricted to certain executives, may elect to allocate part of their annual bonuses to the plan. That portion of the bonus allocated to the plan is in fact used by the executive to purchase preferred shares of Vale, through a defined financial institution), at market conditions and with no benefit provided by Vale.

The shares purchased by each executive have no restrictions and may, at the participant’s discretion, be sold at any time. However, in order to be entitled to the long-term incentive compensation plan to be provided by Vale, the amount of shares initially purchased by the executives on the plan’s adoption, must be held for a three-year period and the executive must retain its employment relationship with Vale during that period.

Upon meeting these two conditions described above (keeping the number of shares purchased and remaining a Vale employee over the three years), the participant becomes entitled to receive from Vale a cash payment equivalent to the total amount of shares held, based on market rates.

The Company records the cost of incentives under the Compensation Plan for Long Term, following the requirements of the CVM Resolution 562/2008. The obligations are measured for fair value disclosure, based on quotes from the market. The costs of compensation incurred are recognized during the three year period.

Additionally, as a long term incentive certain eligible executives have the opportunity to receive at the end of the triennial cycle a certain number of shares calculated on a monetary value at market rates, based on an evaluation of their career and performance factors measured as an indicator of total return to stockholders.

On December 31, 2008, the company recognized a long-term obligation in the amount of R$ 17 equivalent to 711,005 shares, whole recognized in the statement of income.

6.21- Paid-up Capital

In July 2008, the Company issued 256,927 common shares and 164,403 preferred shares through a global offering, which consisted of a registered offering in Brazil and an international offering. On August 2008, through an additional offering, the Company issued 24,660 preferred shares. Following the issue, Vale’s capital stock increased by R$ 19 billion with corresponding transaction costs of R$ 161 recorded as a reduction to the additional paid-in capital account. As a result, capital is now composed by 3,256,724,482 common shares and 2,108,579,618 preferred shares, totaling R$ 47,434.

At the Extraordinary Stockholders’ Meeting held on April 27, 2007 the capital stock was increased to R$28,000, due to the capitalization of the expansion/investment reserve in the amount of R$7,673, capitalization of the legal reserve in the amount of R$752, and capitalization of the fiscal incentives reserve in the amount of R$83 without new stock issue.

On August 30, 2007 the Extraordinary General Stockholders’ Meeting approved the forward-stock split. Since September 2007, each existing share, both common and preferred, became two shares.

Preferred shares have the same rights as common shares, except for the right to elect the members of the Board of Directors. They have priority to a minimum annual dividend of 6% on the portion of capital represented by this class of share or 3% of the book net equity value of the share, whichever is greater.

On December 31, 2008, the Company’s capital is held as follows:


	Number of shares
Stockholders	Commom		%		Preferred		%		Total		%
Valepar S.A.		1,716,435,045		53		20,340,000		1		1,736,775,045		32
Brazilian Government (National Treasury / BNDES/ INSS / FPS)		56,712		—		60,904,104		3		60,960,816		1
American Depositary Receipts — ADRs		724,877,268		22		794,529,068		38		1,519,406,336		29
FMP — FGTS		122,303,382		4		—		—		122,303,382		2
PIBB — BNDES		4,513,120		—		7,115,990		—		11,629,110		—
BNDESPar		218,386,481		7		1,483,079		—		219,869,560		4
Foreign — Institutional investors in Brazilian market		108,334,610		3		316,402,075		15		424,736,685		8
Brazil — Institutional investors		223,055,069		7		386,095,593		18		609,150,662		11
Brazil — Retail investors in Brazilian market		63,824,896		2		444,855,405		21		508,680,301		9
Treasury stock in Brazil		74,937,899		2		76,854,304		4		151,792,203		4

Total		3,256,724,482		100		2,108,579,618		100		5,365,304,100		100

The members of the Board of Directors and Executive Board together own 166,915 common shares and 715,112 preferred shares.

The Board of Directors has the power, without the necessity of a statutory change, to allow the issue of new shares (authorized capital) including the capitalization of revenue and reserves until the authorized limit of 3,600,000,000 common shares and 7,200,000,000 preferred shares without par value.

On December 31, 2008, the Company after the proposed appropriations of the net income for the year, does not have excess profit reserves in relation to the share capital.

6.22- Resources linked to future mandatory conversion in shares

In June, 2007, the Company issued mandatory convertible notes in the amount of R$3,601, net of interest R$3,064, with maturity in 2010. The notes, pay a coupon of 5.50% p.a. quarterly and the right to receive the participation of the additional equivalent for the distribution in cash paid to the ADS’s holders. These notes were classified as a capital instrument, mainly because of the fact that there is no option, from the part of the Company or from the part of the holders to liquidate, totally or in part this operation with financial resources, being the conversion mandatory. These notes are recognized as a specific part of the equity, net of financial changes.

The resources linked to future mandatory conversion, net of interest, are represented by a maximum of 56,582,040 common shares equivalent to R$ 2,111 and the ones represented by a maximum of 30,295,456 preferred shares are equivalent to R$ 926. All the shares are currently in treasury stock (see note 6.24).

6.23- ADR Program — American Depositary Receipts

The Company has a registration with the United States Securities and Exchange Commission (SEC) that permits its preferred shares and common shares to be traded on the New York Stock Exchange (NYSE) as ADR — American Depositary Receipts since June, 2000 and March, 2002, respectively. As a consequence of the share split, each ADR was also split, maintaining thus the proportion of 1 (one) class “A” preferred share or common share, traded with codes “RIOPR” and “RIO”, respectively.

For maintenance of this registration the Company also discloses its financial statements according to U.S.A. Principles — USGAAP showing a net income for 2008 of R$ 24,396 which is different from the net income presented according to Brazilian Principles due to non-amortization of goodwill.

6.24- Treasury Stock

On October 16, 2008, The Board of Directors approved a program to repurchase up to 69,944,380 common shares involving up to 169,210,249 preferred shares, amounting to 5.5% and 8.5% respectively of the total number of shares of each class based on the outstanding equity position at September 30, 2008. At the end of December 31, 2008, 18,355,869 common shares and 46,513,400 preferred shares had been acquired.

The objective of the program was to maximize the value of the company for shareholders.

On December 31, 2008, the Company had 74,937,899 common shares and 76,854,304 preferred shares, which are held in treasury in the amount of R$ 2,448.


Shares
	Quantity				Unit acquisition cost						Average quoted market price
Class	2008		2007		Average		Low		High		2008		2007
Preferred		76,854,304		30,341,144		23.62		21.02		27.96		37.99		39.46
Common		74,937,899		56,582,040		16.90		23.33		31.00		44.44		46.73

		151,792,203		86,923,184

6.25- Remuneration of Stockholders

The total remuneration proposed to stockholders’ in 2008 was calculated as follows:


Net income for the year	21,279
Legal reserve	(1,064	)
Realization of unrealized income reserve (*)	23


Adjusted net income	20,238


Mandatory dividend amount - 25% (R$0.99 per outstanding share)	5,059


Statutory dividend on preferred shares (3% of net equity, R$0.36 per outstanding share)	1,195


Statutory dividend on preferred shares (6% of paid-up capital, R$0.35 per outstanding share)	1,108


Dividends/ Interest on stockholders’ equity — Total	5,059
Anticipated dividends in October, 2008	(225	)

Dividends/ Interest on stockholders’ equity Proposed	4,834


(*)		The realization is based on the dividends received, write-off or disposal of investments and depreciation, write-off and disposal of property, plant and equipment.

6.26- Financial Results


	Consolidated
	(Unaudited)
	4Q/08			3Q/08			4Q/07
Financial expenses

Interest		(786	)		(509	)		(552	)

Labor, tax and civil contingencies		(51	)		(40	)		(70	)
CPMF		—			—			(52	)
Others		(156	)		(198	)		(522	)

		(993	)		(747	)		(1,196	)

Financial income

Related parties		1			1			4
Financial statements		496			431			63
Others		89			35			195

		586			467			262


Derivatives		(1,327	)		(1,112	)		589


Monetary and exchange rate variation on assets:
Cash and cash equivalents		3,662			2,357			(127	)
Accounts receivable		2,217			1,812			(253	)
Loans		(6,231	)		(4,768	)		883
Property, Plan and Equipment		6,538			5,397			(254	)
Others		(1,905	)		(2,094	)		491

Net		4,281			2,704			740

Financial income (expenses), net		2,547			1,312			395


	Acumulated
	Consolidated												Parent Company
	Before new			New practices
	practices			adjustments			2008			2007			2008			2007
Financial expenses
Interest		(2,296	)		—			(2,296	)		(2,663	)		(2,889	)		(3,142	)
Labor, tax and civil contingencies		(183	)		—			(183	)		(188	)		(173	)		(171	)
CPMF		—			—			—			(275	)		—			(204	)
Others		(978	)		—			(978	)		(2,002	)		(364	)		(1,209	)

		(3,457	)		—			(3,457	)		(5,128	)		(3,426	)		(4,726	)

Financial income
Related parties		4			—			4			9			229			27
Financial statements		1,023			—			1,023			225			772			47
Others		194			—			194			562			92			30

		1,221			—			1,221			796			1,093			104


Derivatives		(1,817	)		—			(1,817	)		1,853			(1,475	)		1,490


Monetary and exchange rate variation on assets:
Cash and cash equivalents		5,708			(663	)		5,045			(784	)		3,058			22

Accounts receivable		3,160			(538	)		2,622			(1,585	)		73			(441	)

Loans		(8,268	)		973			(7,295	)		6,291			(260	)		965

Property, Plan and Equipment		7,259			(7,123	)		136			(3,625	)		—			—
Others		(2,896	)		2,600			(296	)		2,459			(689	)		306
Related parties		3			—			3			—			(9,047	)		5,600

Net		4,966			(4,751	)		215			2,756			(6,865	)		6,452

Financial income (expenses), net		913			(4,751	)		(3,838	)		277			(10,673	)		3,320

6.27- Financial Instruments — Derivatives

Risk Management Policy

Vale has developed its risk management strategy aiming to promote the so called enterprise risk management, through an integrated framework, evaluating not only the market risk impact in the business, but also the credit and operational risk impact.

Traditional market risk measures such as VaR (Value at Risk) are not sufficient to evaluate the group exposures as our main goal is to avoid a possible lack of cash to fulfill our future obligations.

The main objective of integrated risk management, that considers all kinds of corporate risks, as well as, the correlations between different market risk factors, is to be able to evaluate the risk impact after considering all the natural hedges presented in the company portfolio. Using this framework, when evaluating the impact of risks on Vale business, we identify a natural diversification due to our mix of products and currencies. This diversification benefit implies a natural reduction of the overall risk of the company. Any risk mitigation strategy will only be implemented, whenever necessary, if it contributes significantly for the reduction on the volatility of our cash flows beyond the levels initially observed and until we reach the acceptable levels of risk.

Vale considers that the effective management of risk is a key objective to support our growth strategy and financial flexibility. The risk reduction on Vale’s future cash flow contributes to enhance the credit quality, improving its ability to access the different markets. In furtherance of this objective, the board of directors has established an enterprise-wide risk management policy and a risk management committee.

The risk management policy determines that Vale will evaluate the risk on the cash flow regularly and all the risk mitigation strategies analyzed, whenever necessary, will be proposed with the final objective of reduction in the cash flow volatility.

The executive board is responsible for the evaluation and approval of the long term risk mitigation strategies, recommended by the risk management committee.

The risk management committee is responsible to assist our executive officers in overseeing and reviewing information regarding our enterprise risk management activities including the principles, significant policies, risk management process and procedures and instruments employed to manage risk. The risk management committee reports periodically to the executive board how the risks have been monitored, what are the most important risks and their impact on the cash flow.

As of December 2008, the members of the risk management committee were: Fabio de Oliveira Barbosa, Chief Financial Officer, Tito Martins, Executive Officer (Non-ferrous Minerals), Demian Fiocca, Executive Officer (Management and Sustainability), Guilherme Cavalcanti, Corporate Finance Director, and Jennifer Maki, Chief Financial Officer of Vale Inco Ltd., Vale’s wholly-owned subsidiary.

The risk management policy and the risk management norms, that complement the normatives of risk management governance model, explicitly prohibit speculative transactions with derivatives and require the diversification of operations and counterparties.

Besides the risk management governance model, Vale counts on a well defined corporate structure. The recommendation and execution of the derivative transactions are implemented by different and independent areas. It is responsibility of the risk management department to define and propose to the risk management committee market risk mitigation strategies, consistent with Vale’s and it’s wholly owned subsidiaries corporate strategy. It is the responsibility of to finance department the execute the risk mitigation strategies though the use of derivatives. The independence of the areas guarantees an effective control on these operations.

The consolidated market risk exposure and the portfolio of derivatives is monthly measured and monitored in order to evaluate the financial results and possible market risk impacts on our cash flow, and guarantee that the initial goals will be achieved. The mark-to-market on the derivatives portfolio is reported weekly to management.

All derivatives positions were recognized in our balance sheet at fair value, and gains or losses in fair value were accrued in Vale’s current earnings.

Considering the nature of Vale’s business and operations, the main market risk factors which the Company is exposed are:

•		Interest rates;

•		Foreign exchange;

•		Products prices and input costs

Fair value computation methodology

Well-known market participants’ valuation methodologies were used to compute the fair value of instruments. To evaluate the financial instruments, their present values were computed considering market curves that impact the instrument on the determination dates. The curves and prices used in the pricing for each group of instruments are detailed in the topic “market curves”.

The pricing method considered in the case of European options is the Black & Scholes model, which is widely used among derivatives market participants for the option pricing. The derivative fair value in this model is a function of the volatility, spot price of the underlying, strike price, risk free rate and maturity. In the case of options where the financial result is a function of the average of the underlying price for a certain period of the time, called Asian options, we use the Turnbull & Wakeman model, also widely used to price this type of instrument. Besides the parameters used on the Black & Scholes model it is considered in this model the price averaging period.

In the case of swaps, the receiving leg and the paying leg present values are estimated by discounting their cash flows using the interest rate of the currency they are denominated. The difference between the present values of the receiving leg and paying leg of the swap is the fair value.

The computation method for the swaps linked to TJLP follows the description enclosed in CETIP’s formula book, which includes the TJLP forward curve definition. Therefore, TJLP is computed using the inflation target, published by Banco Central do Brasil, based on IPCA (Extended National Consumer Price Index) plus the Brazilian credit spread, which comprehends an international real interest rate and a Brazilian credit risk component, that is computed using the credit risk for the government bonds, for the medium and long term perspective.

The pricing for the commodities future settlement contracts (buy or sell) is computed using forward curves for each commodity. Normally, these curves are collected in the exchanges where these commodities are traded, among them, London Metals Exchange (LME) and COMEX or market price providers. When there is no price for a specific date, we use interpolations between the available periods.

Value at Risk computation methodology

The Value at Risk of the positions was measured using a historical simulation approach. Different market risk factors that impact the prices of the derivatives included in our portfolio were identified and a two year sample of its historical daily returns was gathered.

The current positions of our derivatives were used to simulate their returns based on sample data and built a non parametric return distribution and consequently the value at risk for the portfolio considering a one business day time horizon. The value at risk of the portfolio considers a 95% confidence level.

Sensitivity Analysis

In the topic “sensitivity analysis”, sensitivity analysis tables are presented for all the outstanding positions as of December 31^st 2008. The scenarios defined for these analyses were:

	•		Scenario I: expected — considers the market curves as of December 31^st 2008;

	•		Scenario II: unfavorable change of 25% — considers a shock of 25% in the market curves used for the pricing in the expected scenario, negatively impacting the fair value of Vale’s derivatives positions;

	•		Scenario III: favorable change of 25% — considers a shock of 25% in the market curves used for the pricing in the expected scenario, positively impacting the fair value of Vale’s derivatives positions;

	•		Scenario IV: unfavorable change of 50% — considers a shock of 50% in the market curves used for the pricing in the expected scenario, negatively impacting the fair value of Vale’s derivatives positions;

	•		Scenario V: favorable change of 50% — considers a shock of 50% in the market curves used for the pricing in the expected scenario, positively impacting the fair value of Vale’s derivatives positions;

Contracts subjected to margin calls

Vale has contracts subject to margin calls only for part of copper and nickel trades executed by its wholly-owned subsidiary Vale Inco Ltd. The total amount deposited in cash in December 2008 was R$ 23.6 million, and it refers to positions that will mature in 2009.

Main positions definitions:

Cash flow Hedging — hedging operations with the purpose of reducing cash flow volatility deriving from the mismatch between the currencies on our revenues, predominantly in US dollars, and our costs and investments, predominantly in Brazilian reais. This position was settled in December 2008.

Hedge for the Real denominated debt indexed to CDI

•		CDI vs. USD fixed rate swap — In order to reduce the cash flow volatility, Vale entered into swaps to convert Brazilian reais denominated debt instruments linked to CDI to USD. In those swaps Vale pays fixed rates in USD and receives payments linked to CDI.

•		CDI vs. USD floating rate swap — In order to reduce the cash flow volatility, Vale entered into swaps to convert Brazilian reais denominated debt instruments linked to CDI to USD. In those swaps Vale pays floating rates in USD (Libor — London Interbank Offered Rate) and receives payments linked to CDI.

Those instruments were used to convert the cash flows of debentures issued in 2006 with a nominal value of R$ 5.5 billion, NCE (Credit Export Notes) issued in 2008 with nominal value of R$ 2 billion and property and services acquisition financing realized in 2006 and 2007 with nominal value of R$ 1 billion.

Hedge for Real denominated debt indexed to TJLP

•		TJLP vs. USD fixed rate swap — In order to reduce the cash flow volatility, Vale entered into swaps to convert loans with Banco Nacional de Desenvolvimento Econômico e Social (BNDES) linked to TJLP to USD. In those swaps Vale pays fixed rates in USD and receives payments linked to TJLP.

•		TJLP vs. USD floating rate swap — In order to reduce the cash flow volatility, Vale entered into swaps to convert loans with BNDES linked to TJLP to USD. In those swaps Vale pays floating rates in USD and receives payments linked to TJLP.

Hedge for Euro denominated floating rate debt

•

Euro floating rate vs. USD floating rate swap — In order to reduce the cash flow volatility, Vale entered into a swap to convert loans in Euros linked to Euribor to loans in USD linked to Libor. We used this instrument to convert the cash flow of a debt in Euros, with a notional amount of € 19.1 million issued in 2003 by Vale. In those swaps Vale pays floating rates in USD (Libor) and receives floating rates in Euros (Euribor).

Hedge for the USD floating rate debt

•

USD floating rate vs. USD fixed rate swap — In order to reduce the cash flow volatility, Vale Inco Ltd., Vale’s wholly-owned subsidiary, entered into a swap to convert USD floating rate debt into USD fixed rate debt. Vale Inco used this instrument to convert the cash flow of a debt issued in 2004 with notional amount of USD 200 million. In those swaps Vale pays fixed rates in USD and receives floating rates in USD (Libor).

Nickel Fixed Price Program — In order to maintain the exposure to Nickel price fluctuations, Vale Inco Ltd., Vale’s wholly-owned subsidiary entered into derivatives to convert to floating prices all contracts with clients that required a fixed price. It aims to guarantee that the prices of those operations would be the same of the average prices negotiated in LME — the date the product is delivered to the client. It normally ivolves buying Nickel forwards (Over-the-Counter) or futures (exchange negotiated). Those operations are usually reverted before the maturity in order to match the settlement dates of the commercial contracts in which the prices are fixed.

Nickel Purchase Protection Program — This program was implemented in order to reduce the cash flow volatility due to the mismatch between the pricing of the purchased nickel (concentrate, cathode, sinter and others) and the pricing of the final product sold to clients. The items purchased are raw materials utilized to produce refined Nickel. This program is usually implemented by the sale of nickel forward or future contracts at LME or over-the-counter operations.

Hedge of Natural Gas — Vale Inco Ltd., Vale ´s wholly-owned subsidiary entered into derivatives in order to minimize the impact of the Natural Gas price volatility in our costs. These transactions are usually implemented using swaps or by the purchase of forward contracts.

Copper Scrap Purchase Protection Program — This program was implemented in order to reduce the cash flow volatility due to the quotational period mismatch between the pricing period of copper scrap purchase and the pricing period of final products sale to clients, as the copper scrap combined with other raw materials or inputs of Vale’s wholly-owned subsidiary, Vale Inco Ltd, to produce copper. This program is usually implemented by the sale of forwards or futures at LME or Over-the-Counter operations.

Copper Hedge — hedging transactions that aim to reduce cash flow volatility due to changes in LME copper prices. Usually these transactions are implemented by the sale of forward or future contracts, over-the-counter or at LME and COMEX, and also may use zero-cost collars contracts (purchase of put options associated with sale of call options). These transactions were settled in December 2008.

Aluminum Hedge — hedging transactions that aim to reduce cash flow volatility due to changes in LME aluminum prices. Usually these transactions are implemented by the sale of forward or future contracts, over-the-counter or at LME, and also may use zero-cost collars contracts (purchase of put options associated with sale of call options). These transactions matured in December 2008.

Platinum Hedge — hedging transactions that aim to reduce cash flow volatility due to changes in platinum prices. Usually these transactions are implemented by the sale of forward contracts, over-the-counter or at LME and COMEX, and also may use zero-cost collars contracts (purchase of put options associated with sale of call options). These transactions matured in December 2008.

Gold Hedge — hedging transactions that aim to reduce cash flow volatility due to changes in gold prices, as gold is a by-product of our copper production. Usually these transactions are implemented by the sale of forward contracts or zero-cost collars contracts (purchase of put options associated with sale of call options). These transactions matured in December 2008.

Embedded Derivatives

•		Energy purchase — energy purchase agreement between Albrás, Vale’s controlled subsidiary, and Eletronorte in which there’s a clause that defines that a premium can be charged if aluminum prices trade in the range of US$ 1,450/t to US$ 2,773/t. This clause is considered an embedded derivative.

•		Raw material and intermediate products purchase — Nickel concentrate and raw materials purchase agreements of Vale Inco Ltd, Vale’s wholly-owned subsidiary, in which there are provisions based on nickel and copper future prices behavior. These provisions are considered embedded derivatives.

Foreign exchange and interest rate risk

Vale’s cash flow is subjected to volatility of several different currencies against the US dollar. While most of our product prices are indexed to US dollars, representing around 94% of the total revenue, most of our costs, disbursements and investments are indexed to currencies different than the US dollar, mainly Brazilian reais and Canadian dollars.

Therefore, US dollar is the reference currency for Vale’s obligations. Derivative instruments may be used in order to reduce Vale’s potential cash flow volatility arising from the currency mismatch. Vale’s foreign exchange and interest rate derivative portfolio consists, basically, of interest rate swaps to convert floating cash flows in Brazilian reais to fixed or floating US dollar cash flows, without any leverage.

From another perspective, Vale also has an exposure to interest rate risks over loans and financings. The US dollar floating rate debt in the portfolio consists mainly of loans including export pre-payments, commercial banks and multilateral organization loans. In general, our US dollar floating rate debt is mainly subject to changes in the Libor (London Interbank Offer Rate in US dollars). To mitigate the impact of the interest rate volatility on cash flow, Vale takes advantage of natural hedges allowed by the positive correlation of metal prices and US dollar floating rates. When natural hedges are not present, we may opt to realize the same effect using financial instruments.

The Real denominated debt subject to floating interest rates are debentures, Banco Nacional de Desenvolvimento Econômico e Social (BNDES) loans and property and services acquisition financing in the Brazilian market. These debts are mainly linked to CDI and TJLP.

On December 31^st, 2008, the total amount of real denominated debt converted through swaps into US dollars was US$ 4.2 billion, with an average cost in dollars of 4.9% after the swaps transactions were implemented and maturity between November 2010 and December 2027, with semi-annual interest payments¹.

These swap transactions have settlement dates similar to the interest and principal payment dates, taking into account the liquidity restrictions of the market. At each settlement date, the results on the swap transactions partially offset the impact of the US dollar / Brazilian reais exchange rate in our obligations, contributing to a stable flow of cash disbursements in US dollars for the interest and/or principal payment of our real denominated debt.


¹		With the exception of a US$ 211 million debt with monthly and quarterly interest and amortization payments.

In the event of an appreciation (depreciation) of the Brazilian reais against US dollar, the negative (positive) impact on our Real denominated debt obligations (interest and/or principal payment) measured in US dollars will be almost totally offset by a positive (negative) effect from the swap transaction, regardless of the US dollar / Brazilian Reais exchange rate on the payment date.

On the fourth quarter of 2008, Vale paid an interest amount equivalent to R$438 million related to Real denominated debt that were converted into US dollars through the use of swap transactions. However, company has received R$50 million on the settlement of the swaps, offsetting the US dollar / Brazilian reais exchange rate variation impact in our debt service.

The tables below represent December 31^st 2008 derivative positions with the following information: notional amount, initial cost, fair value, value at risk, gains or losses in the period and fair value for the remaining years of the operations per each group of instruments.

Cash Flow Hedge

CDI vs. USD fixed rate swap


														Realized
Value at														Gain/Loss
inception	Notional ($)				Index	Average Rate			Unrealized Gain/Loss (R$)					(R$)
	31/12/2008		30/09/2008						31/12/2008		30/09/2008			31/12/2008

Receivable		—	USD	100	USD		+ 3,65	%		—		192			236
Payable		—	R$	159	CDI		100,00	%		—		(159	)		(166	)

Total										—		33			70

Hedge for the Real denominated debt

CDI vs. USD fixed rate swap


															Realized
Value at															Gain/Loss			VAR
inception	Notional ($)				Index	Average Rate			Unrealized Gain/Loss (R$)						(R$)			(R$)		Unrealized Gain/Loss by year (R$)
	31/12/2008		30/09/2008						31/12/2008			30/09/2008			31/12/2008			31/12/2008		2009		2010			2011		2012			2013		2014			2015

Receivable	R$	7.531	R$	7.103,58	CDI		101,14	%		8.463			8.112			759			1		376		(1.035	)		22		(64	)				11	9		(193	)
Payable	USD	3.672	USD	3.493,80	USD		+ 5,3395	%		(9.338	)		(7.584	)		(521	)		277		—		—			—		—			—			—		—

Total										(875	)		528			238			277

CDI vs. USD floating rate swap


															Realized
Value at															Gain/Loss			VAR
inception	Notional ($)				Index	Average Rate			Unrealized Gain/Loss (R$)						(R$)			(R$)		Unrealized Gain/Loss by year (R$)
	31/12/2008		30/09/2008						31/12/2008			30/09/2008			31/12/2008			31/12/2008		2009		2010			2011		2012		2013		2014		2015

Receivable	R$	792	R$	792	CDI		102,26	%		834			838			61			—		65		(51	)		23		17		12		8		(296	)
Payable	USD	430	USD	430	Libor		+ 3,876	%		(1.057	)		(866	)		(20	)		31		—		—			—		—		—		—		—

Total										(223	)		(28	)		41			31

TJLP vs. USD fixed rate swap


													Realized
Value at													Gain/Loss			VAR
inception	Notional ($)				Index	Average Rate	Unrealized Gain/Loss(R$)						(R$)			(R$)		Unrealized Gain/Loss by year (R$)
	31/12/2008		30/09/2008				31/12/2008			30/09/2008			31/12/2008			31/12/2008		2009			2010			2011			2012			2013			2014			2015			2016			2017			2018			2019

Receivable	R$	518	R$	525	TJLP	TJLP + 1,57% a.a.		436			434			31			8		(5	)		(8	)		(12	)		(4	)		(14	)		(39	)		(14	)		(13	)		(12	)		(11	)		(14	)
Payable	US$	304	US$	307	USD	USD + 3,76% a.a		(580	)		(528	)		(25	)		22		—			—			—			—			—			—			—			—			—			—			—

Total								(144	)		(94	)		6			30

TJLP vs. USD floating rate swap


													Realized
Value at													Gain/Loss			VAR
inception	Notional ($)				Index	Average Rate	Unrealized Gain/Loss (R$)						(R$)			(R$)		Unrealized Gain/Loss by year (R$)
	31/12/2008		30/09/2008				31/12/2008			30/09/2008			31/12/2008			31/12/2008		2009		2010		2011			2012		2013		2014			2015			2016			2017			2018			2019

Receivable	R$	645	R$	647	TJLP	TJLP + 0,96% a.a		503			471			10			12		2		0		(1	)		82		9		(99	)		(6	)		(6	)		(5	)		(5	)		(39	)
Payable	US$	378	US$	378	Libor	LIBOR -1,13% a.a		(572	)		(580	)		(5	)		26

Total								(69	)		(109	)		5			38

In order to reduce cash flow volatility associated with a financing from KfW Bankengruppe indexed to Euribor, Vale entered into a swap where the cash flows in Euros are converted into cash flows in US dollars.

Hedge for the Euro denominated floating rate debt

EUR floating rate vs. USD floating rate swap


													Realized
Value at													Gain/Loss			VAR
inception	Notional ($)				Index	Average Rate	Unrealized Gain/Loss (R$)						(R$)			(R$)		Unrealized Gain/Loss by year (R$)
	31/12/2008		30/09/2008				31/12/2008			30/09/2008			31/12/2008			31/12/2008		2009		2010		2011

Receivable	€	7	€	8	EUR	Euribor+0,875		24			23			8			—		2		2		1
Payable	US$	8	US$	9	USD	Libor+1,0425		(19	)		(18	)		(7	)		—

Total								5			5			1			—

Hedge for the USD floating rate debt

USD floating rate vs. USD fixed rate swap


														Realized
Value at														Gain/Loss			VAR
inception	Notional ($)				Index	Average Rate		Unrealized Gain/Loss (R$)						(R$)			(R$)		Unrealized Gain/Loss by year (R$)
	31/12/2008		30/09/2008					31/12/2008			30/09/2008			31/12/2008			31/12/2008		2009			2010			2011

Receivable					USD	3M LIBOR			466			385			14			—		(17	)		(10	)		(5	)
	US$	200	US$	200
Payable					USD		4,795% a.a		(498	)		(395	)		(18	)		1

Total									(32	)		(10	)		(4	)		1

Additionally, in order to reduce cash flow volatility from the Brazilian payroll denominated expenses in Reais for 2007 and 2008, Vale has entered into some foreign exchange rate swaps with monthly settlements. In June 2008, the market value of this position was R$194 million. In September 2008, Vale decided to do an early settlement of our outstanding hedging for the payroll, since we decided the invest in Brazilian Reais part of the cash obtained from our global equity offering concluded in August 2008. The investments in Brazilian Reais can be considered a cash flow hedging to protect us against the volatility of the Reais. The total amount received in 2008 from this operation was R$326 million.

Commodities price risk

Vale is also exposed to several market risks associated to global commodities prices volatilities.

Nowadays, derivatives transactions included in the portfolio related to commodities prices and/or input costs comprehend nickel, aluminum, copper, gold platinum, natural gas derivatives and all have the same purpose of mitigating Vale’s cash flow volatility.

Nickel — The Company has a long position on future contracts in the London Metal Exchange (LME), with the purpose of maintaining its exposure to nickel price variation, regarding the fact that, in some cases, the commodity is sold at a fixed price to some customers. Vale has also short positions on the futures market in the LME, in order to minimize the risk of mismatch between the pricing on the costs of intermediate products and finished goods.

Nickel Fixed Price Program

Purchase of Nickel future/forward contracts

Realized

Value at

Average strike

Unrealized Gain/Loss

Gain/Loss

VAR

inception

Notional (MT)

B/S

(USD/MT)

(R$)

Unrealized Gain/Loss by year (R$)

31/12/2008

30/09/2008

31/12/2008

30/09/2008

31/12/2008

2009

2010

2011

Futures

10.140

9.330

16.756

(117

)

(132

)

(215

)

(103

)

(14

)

—

Nickel Purchase Program

Sale of Nickel future/forward contracts

Realized

Value at

Average strike

Unrealized Gain/Loss

Gain/Loss

VAR (R$

Unrealized Gain/Loss

inception

Notional (MT)

B/S

(USD/MT)

(R$)

million)

by year (R$)

31/12/2008

30/09/2008

31/12/2008

30/09/2008

31/12/2008

2009

Futures

4.944

2.430

10.712

(16

)

103

(16

)

In addition to the contracts mentioned above, Vale has long positions of nickel and copper raw materials which have a price definition based on a commodity index, which implies, in practice, that this contract is treated as an embedded derivative.

Embedded Derivative for purchased Ore

Realized

Value at

Average strike

Unrealized Gain/Loss

Gain/Loss

VAR (R$

Unrealized Gain/Loss

inception

Notional (MT)

B/S

(USD/MT)

(R$)

million)

by year (R$)

31/12/2008

30/09/2008

31/12/2008

30/09/2008

31/12/2008

2009

Forwards

Níquel

6.213

6.291

10.886

(68

)

Forwards

Cobre

6.213

6.291

3.613

Total

Embedded Derivative for nickel concentrate costumer sales

Realized

Value at

Average strike

Unrealized Gain/Loss

Gain/Loss

VAR (R$

Unrealized Gain/Loss

inception

Notional (MT)

B/S

(USD/MT)

(R$)

million)

by year (R$)

31/12/2008

30/09/2008

31/12/2008

30/09/2008

31/12/2008

2009

Forward

3.966

4.985

15.330

—

Aluminum — In order to reduce cash flow volatility after Inco’s acquisition when Vale increased its leverage, we entered in aluminum hedging operations, which matured in December 2008.

In the fourth quarter of 2008, the settlement of our remaining aluminum derivatives transactions generated a financial result of R$58,8 million that offsets the reduction on the revenues subject to lower sales prices if compared to those in the hedging operations.

The table below shows September positions and financial results for the year.

Aluminium Hedge


														Realized
Value at							Average strike		Unrealized Gain/Loss					Gain/Loss
inception	Notional (MT)				B/S		(USD/MT)		(R$)					(R$)
	31/12/2008		30/09/2008						31/12/2008		30/09/2008			31/12/2008

Forwards		—		12,000		S		—		—		(2	)		114
PUT		—		88,500		B		—		—		1			72
CALL		—		88,500		S		—		—		(8	)		2
Outros		—		16,500		—		—		—		(30	)		(8	)

Total										—		(39	)		180

Embbeded Energy-Aluminium Derivative


															Realized
Value at							Average strike		Unrealized Gain/Loss						Gain/Loss		VAR		Unrealized Gain/Loss
inception	Notional (MT)				B/S		(USD/MT)		(R$)						(R$)		(R$)		by year (R$)
	31/12/2008		30/09/2008						31/12/2008			30/09/2008			31/12/2008		31/12/2008		2009			2010

CALL		200,228		200,228		C		2,773		3			73			—		1		(41	)		(72	)
CALL		200,228		200,228		V		1,450		(116	)		(441	)		—		17

Total										(113	)		(368	)		—		18

Copper —Vale Inco Ltd., Vale’s wholly-owned subsidiary, makes use of hedging to protect the price mismatch between the date of copper scrap purchase and the date of selling the finished good. The table below illustrates December open positions.

Purchased Copper Scrap Protection Program

Sale of copper future/forward contracts

Realized

Value at

Average strike

Unrealized Gain/Loss

Gain/Loss

VAR

Unrealized Gain/Loss

inception

Notional (MT)

B/S

(USD/MT)

(R$)

by year (R$)

31/12/2008

30/09/2008

31/12/2008

30/09/2008

31/12/2008

2009

Inco

Futuros

136

170

5.031

—

In the fourth quarter of 2008, the settlements of our remaining copper derivatives trades executed to reduce the cash flow volatility during Inco’s acquisition generated a financial result of R$62,7 million that offsets the revenues reduction due to lower sales prices compared to those in the hedging operations.

The remaining copper transactions, executed with the goal of reducing cash flow volatility, matured in December 2008 and the financial results for 2008 are shown on the table below.

Copper Strategic Hedging Program


														Realized
Value at							Average strike		Unrealized Gain/Loss					Gain/Loss
inception	Notional (MT)				B/S		(USD/MT)		(R$)					(R$)
	31/12/2008		30/09/2008						31/12/2008		30/09/2008			31/12/2008
Inco
PUT		—		14.595		B		—		—		—			—
CALL		—		12.096		S		—		—		(83	)		(354	)

Vale
PUT		—		19.500		B		—		—		7			94
CALL		—		19.500		S		—		—		(1	)		(18	)

										—		6			76

PGMs and other precious metals — Platinum and gold hedging transactions matured in December 2008. The table below illustrates September position and the financial results for the year.

In the fourth quarter of 2008, the settlement of the remaining PGMs and precious metals derivative transactions generated a disbursement of R$20,4 million.

Platinum Hedge


														Realized
Value at							Average strike		Unrealized Gain/Loss					Gain/Loss
inception	Notional (MT)				B/S		(USD/MT)		(R$)					(R$)
	31/12/2008		30/09/2008						31/12/2008		30/09/2008			31/12/2008

PUT		—		8.661		B		—		—		—			—
CALL		—		8.661		S		—		—		(3	)		(46	)

Gold Hedge


														Realized
Value at									Unrealized Gain/Loss					Gain/Loss
inception	Notional (Oz.)				B/S		Average Strike		(R$)					(R$)
	31/12/2008		30/09/2008						31/12/2008		30/09/2008			31/12/2008

PUT		—		20.685		B		—		—		—			—
CALL		—		19.425		S		—		—		(19	)		(74	)

Natural gas — Vale uses natural gas swap contracts to minimize the impact of price fluctuation of this input cost in the cash flow.

In the fourth quarter of 2008, the settlement of the remaining natural gas derivative transactions generated a disbursement of R$2,3 million.

Hedge of natural gas

Purchase of natural gas forward contracts

Realized

Value at

Average strike

Unrealized Gain/Loss

Gain/Loss

VAR

Unrealized Gain/Loss

inception

Notional (GJ)

B/S

(CAD/GJ)

(R$)

by year (R$)

31/12/2008

30/09/2008

31/12/2008

30/09/2008

31/12/2008

2009

Forwards

1.773.000

2.601.000

7,68

)

Market curves


TJLP
Terms	rate (%p.a.)		Terms	rate (% p.a.)
14/01/2009		6,25	16/06/2014		6,23
16/02/2009		6,25	15/07/2014		6,23
16/03/2009		6,25	14/08/2014		6,23
16/04/2009		6,43	15/09/2014		6,23
18/05/2009		6,36	14/10/2014		6,24
15/06/2009		6,28	14/11/2014		6,24
15/07/2009		6,21	15/12/2014		6,24
14/08/2009		6,15	14/01/2015		6,24
14/09/2009		6,10	16/02/2015		6,24
14/10/2009		6,06	16/03/2015		6,25
16/11/2009		6,05	16/04/2015		6,25
15/12/2009		6,04	20/05/2015		6,25
14/01/2010		6,03	15/06/2015		6,25
15/02/2010		6,02	15/07/2015		6,25
16/03/2010		6,00	14/08/2015		6,25
16/04/2010		5,99	14/09/2015		6,25
19/05/2010		5,99	14/10/2015		6,25
14/06/2010		5,98	16/11/2015		6,26
15/07/2010		5,99	15/12/2015		6,26
16/08/2010		6,00	14/01/2016		6,26
14/09/2010		6,00	15/02/2016		6,26
14/10/2010		6,01	15/03/2016		6,26
15/11/2010		6,01	15/04/2016		6,26
14/01/2011		6,03	16/05/2016		6,26
15/02/2011		6,03	14/06/2016		6,26
16/03/2011		6,04	15/07/2016		6,26

18/04/2011		6,05	15/08/2016		6,26

17/05/2011		6,06	14/09/2016		6,25
14/06/2011		6,06	14/10/2016		6,25
15/07/2011		6,07	14/11/2016		6,25
15/08/2011		6,07	15/12/2016		6,25
14/09/2011		6,08	16/01/2017		6,25
14/10/2011		6,09	15/02/2017		6,25
14/11/2011		6,10	16/03/2017		6,25
15/12/2011		6,11	17/04/2017		6,25
16/01/2012		6,12	17/05/2017		6,25
15/02/2012		6,12	14/06/2017		6,25
15/03/2012		6,13	17/07/2017		6,25
16/04/2012		6,13	14/08/2017		6,25
16/05/2012		6,14	15/09/2017		6,25
14/06/2012		6,16	16/10/2017		6,25

16/07/2012		6,17	14/11/2017		6,25

14/08/2012		6,17	15/12/2017		6,25
14/09/2012		6,18	15/01/2018		6,25
15/10/2012		6,19	15/02/2018		6,25
14/11/2012		6,19	16/03/2018		6,25

17/12/2012		6,19	16/04/2018		6,25
14/01/2013		6,20	17/05/2018		6,25
15/02/2013		6,20	14/06/2018		6,25
18/03/2013		6,20	16/07/2018		6,25
16/04/2013		6,20	15/08/2018		6,25
17/05/2013		6,20	14/09/2018		6,25
14/06/2013		6,21	15/10/2018		6,25
15/07/2013		6,21	14/11/2018		6,25
14/08/2013		6,21	17/12/2018		6,25
16/09/2013		6,21	14/01/2019		6,25
14/10/2013		6,21	15/02/2019		6,25
14/11/2013		6,21	18/03/2019		6,25
16/12/2013		6,22	16/04/2019		6,25
14/01/2014		6,22	17/05/2019		6,25
17/02/2014		6,22	14/06/2019		6,25
17/03/2014		6,22	15/07/2019		6,25
16/04/2014		6,23	14/08/2019		6,25
19/05/2014		6,23	16/09/2019		6,25


Cupom cambial
Terms	rate (% p.a.)
01/03/2009		2,07
01/04/2009		2,77
01/07/2009		3,84
01/10/2009		4,68
02/01/2010		5,01
01/04/2010		5,05
01/07/2010		5,10
01/10/2010		5,18
03/01/2011		5,25
01/04/2011		5,60
01/07/2011		5,68
03/10/2011		5,80
02/01/2012		5,90
02/04/2012		6,05
02/07/2012		6,29
01/10/2012		6,53
02/01/2013		6,74
01/04/2013		6,93
01/07/2013		7,15
01/10/2013		7,45
02/01/2014		7,60
01/04/2014		7,85
01/07/2014		8,13
01/10/2014		8,45
02/01/2015		9,00


Aluminum
Terms	Vol (% a.a)
VOLSPOT		34,42
VOL1M		34,10
VOL3M		32,22
VOL6M		29,52
VOL9M		27,37
VOL1Y		25,59
VOL2Y		22,24
VOL3Y		21,06
VOL4Y		20,15
VOL5Y		19,73
VOL7Y		19,75
VOL10Y		19,75


Currencies
EUR/USD			1,4102
USD/CAD			1,2188
USD/BRL			2,3370


Copper
Terms	price (US$/lb)
jan/09		1,38
fev/09		1,39
mar/09		1,40


Interest rate USD curve
Terms	rate (% p.a.)
31/01/2009		1,35	%
28/02/2009		1,22	%
31/03/2009		1,20	%
30/06/2009		1,38	%
30/09/2009		1,55	%
31/12/2009		1,72	%
31/12/2010		2,51	%
31/12/2011		2,81	%
31/12/2012		2,92	%
31/12/2013		3,17	%
31/12/2015		3,42	%
31/12/2018		3,53	%
31/12/2020		3,43	%
31/12/2023		2,84	%


Aluminum
Terms	price (US$/ton)
SPOT		1.461
JAN09		1.468
FEB09		1.479
MAR09		1.490
APR09		1.502
MAY09		1.517
JUN09		1.529
JUL09		1.541
AUG09		1.555

SEP09		1.567

OCT09		1.581
NOV09		1.592
DEC09		1.602
JAN10		1.612
FEB10		1.622
MAR10		1.632
APR10		1.642
MAY10		1.652
JUN10		1.662
JUL10		1.672
AUG10		1.682
SEP10		1.692
OCT10		1.701
NOV10		1.711

DEC10		1.720

JAN11		1.730
FEB11		1.739
APR11		1.749
MAY11		1.767

JUN11		1.776
JUL11		1.785
AUG11		1.794


EUR
Terms	EUR/USD
EURSPOT		1,41
EUR1M		1,41
EUR3M		1,41
EUR6M		1,40
EUR9M		1,40
EUR1Y		1,40
EUR2Y		1,39
EUR3Y		1,38
EUR4Y		1,38
EUR5Y		1,37
EUR7Y		1,33
EUR10Y		1,28


Nickel
Terms	price (US$/ton)
jan/09		11.630
fev/09		11.658
mar/09		11.685
abr/09		11.716
mai/09		11.757
jun/09		11.791
jul/09		11.819
ago/09		11.846
set/09		11.868
out/09		11.896
nov/09		11.918
dez/09		11.941
jan/10		11.973
fev/10		12.001
mar/10		12.029
abr/10		12.064
mai/10		12.092
jun/10		12.120
jul/10		12.155
ago/10		12.183
set/10		12.211
out/10		12.246
nov/10		12.274
dez/10		12.302
jan/11		12.317
fev/11		12.324

mar/11		12.331


Yield curve in BRL
Terms	rate (% a.a)
02/01/2009		13,61	%
02/02/2009		13,41	%
01/03/2009		13,58	%
01/04/2009		13,02	%
01/07/2009		12,68	%
01/10/2009		12,33	%
02/01/2010		12,21	%
01/04/2010		12,12	%
01/07/2010		12,12	%
01/10/2010		12,16	%
03/01/2011		12,19	%

01/04/2011		12,23	%

01/07/2011		12,27	%
03/10/2011		12,32	%
02/01/2012		12,29	%
02/04/2012		12,35	%

02/07/2012		12,45	%
01/10/2012		12,52	%
02/01/2013		12,55	%
01/04/2013		12,55	%
01/07/2013		12,55	%
02/10/2013		12,55	%
02/01/2014		12,56	%
02/01/2015		12,65	%
04/01/2016		12,71	%
02/01/2017		12,73	%
02/01/2018		12,73	%
03/01/2022		12,73	%

The market curves for the derivatives pricing were built using public information from BM&F, Banco Central do Brasil, London Metals Exchange (LME) and private providers such as Thomson Reuters, Bloomberg L.P. and Enerdata.

Sensitivity analysis
Values in R$ million


*Program*	*Instrument*	*Impact description*	*Scenario I*			*Scenario II*			*Scenario III*			*Scenario IV*			*Scenario V*
Hedge for the real denominated	CDI vs. USD fixed rate	USD /BRL fluctuation		(875.3	)		(3,210.0	)		1,459.3			(5,544.6	)		3,793.9
debt indexed to CDI	swap	USD interest rate inside Brazil variation		(875.3	)		(1,059.1	)		(657.0	)		(1,186.6	)		(450.4	)
	CDI vs. USD floating rate Swap	USD /BRL fluctuation		(222.2	)		(486.3	)		42.0			(750.4	)		306.1
		USD interest rate inside Brazil variation		(222.2	)		(266.2	)		(172.0	)		(297.8	)		(126.9	)


*Program*	*Instrument*	*Impact description*	*Scenario I*			*Scenario II*			*Scenario III*			*Scenario IV*			*Scenario V*
Hedge for the Real denominated	TJ LP vs. USD fixed rate	USD /BRL fluctuation		(143.2	)		(288.1	)		1.7			(433.0	)		146.6
debt index ed to TJ LP	swap	USD interest rate inside Brazil variation		(143.2	)		(185.1	)		(97.5	)		(216.0	)		(57.9	)
		Brazilian interest rate variation		(143.2	)		(211.3	)		74.5			(354.2	)		217.4
	TJ LP vs. USD floating	USD /BRL fluctuation		(68.4	)		(194.2	)		57.4			(320.0	)		183.2
	rate swap	USD interest rate inside Brazil variation		(68.4	)		(130.0	)		(2.3	)		(176.2	)		53.8
		Brazilian interest rate variation		(68.4	)		(142.7	)		3.7			(203.1	)		59.6


*Program*	*Instrument*	*Impact description*	*Scenario I*		*Scenario II*			*Scenario III*		*Scenario IV*			*Scenario V*
Hedge for euro denominated	EUR floating rate vs.	EUR /USD fluctuation		4.8		(1.2	)		10.9		(7.3	)		16.9
floating rate	USD floating rate swap	Euribor variation		4.8		4.4			5.1		4.0			5.4
		USD Libor variation		4.8		4.6			5.1		4.5			5.3


*Program*	*Instrument*	*Impact description*	*Scenario I*			*Scenario II*			*Scenario III*			*Scenario IV*			*Scenario V*
Hedge for the USD floating rate debt	USD floating rate vs.	USD Libor variation		(31.8	)		(35.5	)		(27.6	)		(39.7	)		(23.6	)
	USD fixed rate swap


*Program*	*Instrument*	*Impact description*	*Scenario I*			*Scenario II*			*Scenario III*			*Scenario IV*			*Scenario V*
Nickel fixed price program	Purchase of nickel	Nickel price fluctuation		(117.1	)		(186.9	)		(46.8	)		(256.9	)		23.3
	future/forward contracts


*Program*	*Instrument*	*Impact description*	*Scenario I*			*Scenario II*			*Scenario III*		*Scenario IV*			*Scenario V*
Nickel purchase protection program	Sale of nickel	Nickel price fluctuation		(15.7	)		(44.4	)		22.9		(78.0	)		56.5
	future/forward contracts


*Program*	*Instrument*	*Impact description*	*Scenario I*			*Scenario II*			*Scenario III*		*Scenario IV*			*Scenario V*
Hedge of Natural Gas	Purchase of natural gas	Natural gas price fluctuation		(4.4	)		(9.8	)		1.1		(15.2	)		6.5
	forward contracts

Program

Instrument

Impact description

Scenario I

Scenario II

Scenario III

Scenario IV

Scenario V

Copper scrap purchase protection program

Sale of copper

Copper price fluctuation

0.6

0.4

0.9

0.1

1.1

future/forward contracts

Program

Instrument

Impact description

Scenario I

Scenario II

Scenario III

Scenario IV

Scenario V

Embedded derivatives —

Nickel price fluctuation

42.3

32.9

51.7

23.4

61.1

Intermediate products purchase

Program

Instrument

Impact description

Scenario I

Scenario II

Scenario III

Scenario IV

Scenario V

Embedded derivatives — Raw

Nickel and copper price fluctuation

9.1

(11.3

)

20.2

(27.1

)

35.6

material purchase


*Program*	*Instrument*	*Impact description*	*Scenario I*			*Scenario II*			*Scenario III*			*Scenario IV*			*Scenario V*
Embedded derivatives — Energy purchase		Aluminum price fluctuation		(113.0	)		(250.8	)		(40.9	)		(386.5	)		(17.7	)

Credit risk on financial trades and financial institutions ratings

On December 31^st,2008, the main counterparties on our outstanding derivatives transactions presented in the tables above are: Banco Bradesco S.A., Banco do Brasil S.A., Banco Itaú S.A., Banco Santander S.A., Banco Votorantim S.A., Citigroup Inc., Goldman Sachs Group Inc., HSBC Bank Brasil S.A., JP Morgan Chase & Co., Unibanco S.A.. The operations executed with this group of institutions represent 95% of the derivatives exposure as of December 31^st 2008.

Derivatives transactions are executed with financial institutions that we consider to have a very good credit quality. The exposure limits to financial institutions are proposed annually for the Executive Risk Committee and approved by the Executive Board. The financial institutions credit risk tracking is performed making use of a credit risk valuation methodology which considers, among other information, published ratings provided by international rating agencies. In the table below, we present the ratings in foreign currency published by Moody’s e S&P agencies for the most important financial institutions that we had outstanding trades as of December 31^st.

Holding name

Counterparty name

Moody’s

S&P

Banco do Brasil S.A.

BBB-

Banco Bradesco S.A.

Ba2

BBB

Citigroup Inc.

Banco Votorantim S.A.

Baa1

BB+

HSBC Holdings plc

Aa2

AA-

JPM organ Chase & Co.

JPMorgan Chase & Co.

Aa3

A+

Banco Santander S.A. (Spain)

Aa1

HSBC Holdings plc

HSBC Bank Brasil SA

BBB-

Banco Itau S.A.

Ba2

BBB

JPM organ Chase & C o.

JPMorgan Chase Bank NA

Aa1

AA-

Goldman Sachs Group, Inc. (The)

JAron & Co.

A1 **

A**

Unibanco S.A.

Unibanco S.A .

Ba2

BBB-


**		- “Parent Company” Rating

Summary the movement of our derivatives according to the period present as follows:


	Consolidated
	(Unaudited)
	4Q/08
	Currencies\						Products by
	Interest rates						aluminum
	(libor)			Gold			area			Copper			Nickel			Platinum			Total
Gains / (losses) unrealized on 09/30/08		320			(19	)		(87	)		(75	)		73			(4	)		208
Payments (receipt) financial		(119	)		20			(58	)		(63	)		77			1			(142	)
Financial expenses, net		(1,521	)		2			156			153			(88	)		2			(1,296	)
Monetary variations, net		(20	)		(3	)		(11	)		(14	)		17			1			(30	)

Gains / (losses) unrealized on 12/31/08		(1,340	)		—			—			1			79			—			(1,260	)


	3Q/08
	Currencies\						Products by
	Interest rates						aluminum
	(libor)			Gold			area			Copper			Nickel			Platinum			Total
Gains / (losses) unrealized on 06/30/08		1,912			(34	)		(301	)		(262	)		57			(34	)		1,338
Payments (receipt) financial		(289	)		17			93			112			37			11			(19	)
Financial expenses, net		(1,578	)		2			138			108			(33	)		24			(1,339	)
Monetary variations, net		275			(4	)		(17	)		(35	)		12			(5	)		226

Gains / (losses) unrealized on 09/30/08		320			(19	)		(87	)		(77	)		73			(4	)		206


	4Q/07
	Currencies\						Products by
	Interest rates						aluminum
	(libor)			Gold			area			Copper			Nickel			Platinum			Total
Gains / (losses) unrealized on 09/30/07		1,192			(74	)		(320	)		(653	)		6			(47	)		104
Payments (receipt) financial		(356	)		18			29			112			46			9			(142	)
Financial expenses, net		308			(12	)		107			187			23			(7	)		606
Monetary variations, net		(36	)		3			11			22			(1	)		2			1

Gains / (losses) unrealized on 12/31/07		1,108			(65	)		(173	)		(332	)		74			(43	)		569


	Accumulated
	2008
	Currencies\						Products by
	Interest rates						aluminum
	(libor)			Gold			area			Copper			Nickel			Platinum			Total
Gains / (losses) unrealized on 12/31/07		1,108			(65	)		(173	)		(332	)		74			(43	)		569
Payments (receipt) financial		(682	)		74			181			277			91			45			(14	)
Financial expenses, net		(1,980	)		(8	)		(10	)		66			(110	)		(3	)		(2,045	)
Monetary variations, net		214			(1	)		2			(10	)		24			1			230

Gains / (losses) unrealized on 12/31/08		(1,340	)		—			—			1			79			—			(1,260	)


	2007
	Currencies\						Products by
	Interest rates						aluminum
	(libor)			Gold			area			Copper			Nickel			Platinum			Total
Gains / (losses) unrealized on 12/31/06		(20	)		(115	)		(679	)		(638	)		34			(42	)		(1,460	)
Payments (receipt) financial		(530	)		65			222			458			(77	)		23			161
Financial expenses, net		1,741			(30	)		191			(269	)		115			(33	)		1,715
Monetary variations, net		(83	)		15			93			117			2			9			153

Gains / (losses) unrealized on 12/31/07		1,108			(65	)		(173	)		(332	)		74			(43	)		569


	Parent Company
	2008
	Currencies\ Interest
	rates (libor)			Gold			Copper			Total
Gains / (losses) unrealized on 12/31/07		1,064			(45	)		(2	)		1,017
Payments (receipt) financial		(641	)		52			(32	)		(621	)
Financial expenses, net		(1,734	)		(6	)		30			(1,710	)
Monetary variations, net		232			(1	)		4			235

Gains / (losses) unrealized on 12/31/08		(1,079	)		—			—			(1,079	)


	2007
	Currencies\ Interest
	rates (libor)			Gold			Copper			Total
Gains / (losses) unrealized on 12/31/08		5			(69	)		46			(18	)
Payments (receipt) financial		(493	)		41			(2	)		(454	)
Financial expenses, net		1,625			(28	)		(46	)		1,551
Monetary variations, net		(73	)		11			—			(62	)

Gains / (losses) unrealized on 12/31/07		1,064			(45	)		(2	)		1,017


Currencies\ Interest rates (LIBOR)		December 2019
Copper		January 2009
Nickel		March 2011

6.28- Selling, Administrative, Other Operating Expenses and Non Operating Income


	Consolidated										Parent Company
	Quarter						Accumulated				Accumulated
	4Q/08		3Q/08		4Q/07		2008		2007		2008		2007
Administrative
Personnel		207		192		197		747		721		431		359
Services (consulting, infrastructure and others)		229		120		132		528		448		262		174
Advertising and publicity		94		59		144		253		275		244		266
Depreciation		70		71		76		294		288		225		218
Travel expenses		16		28		12		72		44		33		26
Rents and taxes		37		29		21		89		132		32		26
Community aborigine		5		3		7		20		19		18		19
Others		118		43		31		303		183		140		61
*Sales ()**		940		126		179		1,312		440		27		10

Total		1,716		671		799		3,618		2,550		1,412		1,159


(*)		Represents the effects of fluctuations in commodity prices of copper on its receivables, expenses with offices abroad and provision for claims settlement.


	Consolidated													Parent Company
	Quarter								Accumulated					Accumulated
	4Q/08			3Q/08			4Q/07		2008			2007		2008			2007
Other operating expenses (income), net
Provisions for contingencies		162			26			89		(53	)		249		(78	)		105
Provision for loss on ICMS credits		63			82			42		386			127		213			57
Provision for profit sharing		16			78			158		221			537		113			347
Fundação Vale do Rio Doce — FVRD		26			24			11		81			61		81			54
Recoverable taxes — PIS and COFINS		(70	)		(59	)		—		(244	)		—		(244	)		—
Provision for material / inventories		142			249			35		407			101		126			4
Adjust the value of realization of stock		334			—			—		334			—		—			—
Low assets intangibles		145			—			—		145			—		—			—
MRS fees adjustment		286			—			—		286			—		202			—
Others		522			317			273		1,286			343		419			(74	)

Total		1,626			717			608		2,849			1,418		832			493


	Consolidated										Parent Company
	(Unaudited)						Accumulated				Accumulated
	4Q/08		3Q/08		4Q/07		2008		2007		2008		2007

Non operating results

Usiminas		—		—		—		—		846		—		846
Log-In		—		—		—		—		454		—		454
Jubilee Mines N.L.		—		—		—		139		—		—		—
Lion Ore		—		—		—		—		153		—		—
Others		—		—		—		—		5		—		—

Total		—		—		—		139		1,458		—		1,300

6.29- Concessions, Subconcessions and Leases

(a) Railway Companies

The Company and some companies of the Group entered with the Brazilian government, through the Ministry of Transportation, agreements for concession for the exploitation and development of public rail cargo transport services and for lease of the assets used to provide these services.

The concessions periods are, for railway:


Railways		End of concession period
Vitória-Minas and Carajás (direct) (*)		June 2027
Carajás (direct) (*)		June 2027
Malha Centro-Leste (indirect via FCA)		December 2037
Malha Sudoeste (indirect via MRS)		August 2026
Ferrovia Norte Sul S.A. (FNS)		December 2026


(*)		Concessions with no disbursement.

The concessions will expire upon one of the following events: termination of the contractual term, cancellation, forfeiture, rescission, annulment and bankruptcy or extinction of the concessionaire.

Concessions, subconcessions and leasing from subsidiaries companies are treated as operating leasing and present the following characteristics:

FNS

FCA

MRS

1) Total installments

112

118

2) Frequency of payment

)

Quarterly

3) Update index

IGP-DI FGV

4) Total installment paid

5) Installment current value

Concession

—

Leasing

—

Subconcession

933

—


(*)		According to the delivery of each part of the railway.

(b) Ports

The Company owns specialized port terminals as follow:


		End of concession
*Terminal ()**	Localization	period
Tubarão, Praia Mole and Liquid Bulk Terminal	Vitória - ES		2020
Praia Mole Terminal	Vitória - ES		2020
Sundry Products Terminal	Vitória - ES		2020
Liquid Bulk Terminal	Vitória - ES		2020
Vila Velha Terminal	Vila Velha - ES		2023
Ponta da Madeira Maritime Terminal — Pier I and III	São Luís - MA		2018
Ponta da Madeira Maritime Terminal — Pier II	São Luís - MA		2010
Inácio Barbosa Maritime Terminal	Aracaju - SE		2012


(*)		Concessions with no disbursement.

(c) Hydroelectric Projects

The Company develops projects of electricity generation with the aim of self-supply. The projects in which the Company has investments are:


	Concession		% Participation on
Project	beginning date		energy generation
Amador Aguiar I e II (formely denominated Capim Branco I and II)		2001		48.42
Balambano, Larona and Karebbe (*)		1978, 2000 e 2000		60.80
Engenheiro José Mendes Júnior e Eliezer Batista (formely denominated Funil and Aimorés)		2000		51.00
Estreito		2002		30.00
Igarapava		1998		38.15
Machadinho		2000		8.29
Porto Estrela		1997		33.33


(*)		Participation indirect holds though Vale Inco.

During 2008 the Company leased 4 pelletizing plants as part of the Nibrasco, Kobrasco and Itabrasco joint ventures with two of them for a period of 30 years, one for 10 years and one for 5 years. The main risks and benefits of the leases remain with the joint ventures. The leases were classified as operating leases with a minimum annual cost of around R$ 190.

6.30- Insurance

Operational Risks

The Company has an extensive risk management program that provides coverage and protection for all its assets as well as against possible losses from production interruptions, through All Risks policy. This program includes on-site inspection and training carried out by the various risk committees constituted by the Company, its subsidiaries and associated companies. Vale tries to harmonize risks in all areas and provide single and uniform treatment, and also seeking coverage in the domestic and international markets at levels compatible with an enterprise its size.

Insurance

In order to mitigate the risks, Vale contracts many types of insurances polices, as operational risks and comprehensive general liability, risks besides life insurance for its employees. The cover insurance of these policies are contracted in accordance with the company Risk Management Policy and are similar to the ones contracted by other mining companies. As one of the management risk instruments Vale has used since 2002 a captive reinsurer that allowed us to contract insurances on a competitive basis as well as direct access to the main international markets of insurance and reinsurance. The management of insurance policies is realized in Vale with the support of the insurances committees in the operational areas of the Company that are composed by many professionals of these units.

6.31- Profit Sharing Plan

The Company’s profit sharing plan for the employees consists of a portion that is subject to the financial results measured through indicators such as operating cash flow and for the achievement of the performance target of the units and individuals.

6.32- Information by segment

The information presented to the high management with the respective performance of each segment are derived from the books, with some realocations along the segments. We analyse the segment information as follows:

Consolidated Statement of Income by segment


Years ended December 31		In million of reais


	2008
	Ferrous			Non-ferrous						Participation						Corporate
	minerals			minerals			Logistics			Steel			Others			Center			Total
Operating revenues

Sales of ore and metals		43,569			16,323			—			—			—			—			59,892
Transport services		—			—			3,666			—			—			—			3,666
Sales of aluminum-related products		—			5,843			—			—			—			—			5,843
Sales of steel products		—			—			—			1,348			—			—			1,348
Other products and services		345			311			—			—			1,361			—			2,017

		43,914			22,477			3,666			1,348			1,361			—			72,766

Vale Added taxes		(1,272	)		(270	)		(613	)		—			(70	)		—			(2,225	)


Net operational revenues		42,642			22,207			3,053			1,348			1,291			—			70,541

Ores and metals		(13,255	)		(10,549	)		—			—			—			—			(23,804	)
Transport services		—			—			(2,215	)		—			—			—			(2,215	)
Aluminum-related products		—			(3,873	)		—			—			—			—			(3,873	)
Steel products		—			—			—			(1,177	)		—			—			(1,177	)
Other products and services		(448	)		—			—			—			(639	)		—			(1,087	)

Cost of products and services		(13,703	)		(14,422	)		(2,215	)		(1,177	)		(639	)		—			(32,156	)

Gross profit		28,939			7,785			838			171			652			—			38,385

Gross margin		67.9	%		35.1	%		27.4	%		12.7	%		50.5	%		—			54.4	%

Operational expenses

Selling and admnistrative		(1,784	)		(1,471	)		(111	)		(29	)		(223	)		—			(3,618	)
Research and development		(677	)		(704	)		(180	)		—			(510	)		—			(2,071	)
Other operating expenses		(2,457	)		(127	)		(64	)		(153	)		(48	)		—			(2,849	)

		(4,918	)		(2,302	)		(355	)		(182	)		(781	)		—			(8,538	)


Profit before financial results, results of equity investments and imparment		24,021			5,483			483			(11	)		(129	)		—			29,847

Impairment		—			(2,447	)		—			—			—			—			(2,447	)


Operating profit before financial results, results of equity investments and impairment		24,021			3,036			483			(11	)		(129	)		—			27,400


Results of equity investments		(557	)		(1,117	)		37			33			265			14			(1,325	)

Financial result		—			—			—			—			—			(3,838	)		(3,838	)


Operating profit (loss)		23,464			1,919			520			22			136			(3,824	)		22,237

Profit on sale of investment		—			139			—			—			—			—			139


Income (loss) before income tax and social contribution		23,464			2,058			520			22			136			(3,824	)		22,376

Income tax and social contribution		622			(1,092	)		(147	)		10			(58	)		—			(665	)

Income (loss) before minority interests		24,086			966			373			32			78			(3,824	)		21,711
Minority interest		(31	)		(430	)		—			—			29			—			(432	)

Income (loss) for the year		24,055			536			373			32			107			(3,824	)		21,279


(*)		Nickel and other products by-products (copper, precious metals, cobalt e others) of Vale Inco.

Consolidated Statement of Income by segment


Years ended December 31		In million of reais


	2007
	Ferrous			Non-ferrous						Participation						Corporate
	minerals			minerals			Logistics			Steel			Others			Center		Total
Operating revenues

Sales of ore and metals		29,915			25,417			—			—			—			—		55,332
Transport services		—			—			3,497			—			—			—		3,497
Sales of aluminum-related products		—			5,529			—			—			—			—		5,529
Sales of steel products		—			—			—			1,248			—			—		1,248
Other products and services		118			200			—			—			461			—		779

		30,033			31,146			3,497			1,248			461			—		66,385

Vale Added taxes		(837	)		(234	)		(550	)		—			—			—		(1,621	)


Net operational revenues		29,196			30,912			2,947			1,248			461			—		64,764

Ores and metals		(10,896	)		(11,918	)		—			—			—			—		(22,814	)
Transport services		—			—			(2,146	)		—			—			—		(2,146	)
Aluminum-related products		—			(3,246	)		—			—			—			—		(3,246	)
Steel products		—			—			—			(1,199	)		—			—		(1,199	)
Other products and services		(189	)		(3	)		—			—			(487	)		—		(679	)

Cost of products and services		(11,085	)		(15,167	)		(2,146	)		(1,199	)		(487	)		—		(30,084	)

Gross profit		18,111			15,745			801			49			(26	)		—		34,680

Gross margin		62.0	%		50.9	%		27.2	%		3.9	%		-5.6	%		—		53.5	%

Operational expenses

Selling and admnistrative		(1,604	)		(717	)		(106	)		(28	)		(95	)		—		(2,550	)
Research and development		(332	)		(635	)		(71	)		—			(359	)		—		(1,397	)
Other operating expenses		(1,154	)		(227	)		(36	)		(1	)		—			—		(1,418	)

		(3,090	)		(1,579	)		(213	)		(29	)		(454	)		—		(5,365	)


Profit before financial results, results of equity investments and imparment		15,021			14,166			588			20			(480	)		—		29,315

Results of equity investments		(549	)		(1,926	)		15			26			29			—		(2,405	)

Financial result		—			—			—			—			—			277		277


Operating profit (loss)		14,472			12,240			603			46			(451	)		277		27,187


Profit on sale of investment		—			153			459			—			846			—		1,458

Income (loss) before income tax and social contribution		14,472			12,393			1,062			46			395			277		28,645

Income tax and social contribution		(3,569	)		(3,390	)		(144	)		1			17			—		(7,085	)

Income (loss) before minority interests		10,903			9,003			918			47			412			277		21,560
Minority interest		(76	)		(1,477	)		(2	)		—			1			—		(1,554	)

Income (loss) for the year		10,827			7,526			916			47			413			277		20,006


(*)		Nickel and other products by-products (copper, precious metals, cobalt e others) of Vale Inco.

The financial statements by business area are structured in accordance with the following segments: Ferrous products, Non-ferrous, Logistics, Aluminum , Steel, Corporate and other participation.

•

Ferrous products — comprises iron ore mining and pellet production, as well as our Brazilian Northern and Southern transportation systems, including railways, ports and terminals as they pertain to mining operations. Manganese mining and ferroalloys are also included in this segment.

•

Non-ferrous — comprises the production of non-ferrous minerals, including nickel (co-products and by-products), potash, coal, kaolin, copper and aluminum — comprises aluminum trading activities, alumina refining and aluminum metal smelting and investments in joint ventures and affiliates engaged in bauxite mining.

•

Logistics — comprises our transportation systems as they pertain to the operation of our ships, ports and railways for third-party cargos.

•

Participation — it is divided into the following segments:

•

Steel — comprises the investments in steel companies.

•

Others — comprises the investments in joint ventures and affiliates engaged in other businesses.

6.33- Social Report (unaudited)

The social report presents the social indicators, environmental, the functional quantitative and relevant information about the exercise of business citizenship and was prepared in accordance with the resolution of Conselho Federal de Contabilidade – CFC no. 1003. The information presented was obtained from the auxiliary records and some management information of the Company direct and indirect subsidiaries and jointly controlled companies.


	Consolidated (Unaudited)																Controladora (Unaudited)
	2008								2007								2008								2007
Basis of calculation
Gross revenue							72,766								66,385								34,445								23,029
Operating income before financial results and equity results							27,400								29,316								13,920								6,451
Gross payroll							4,422								3,995								1,768								1,098

			% sobre								% sobre								% sobre								% sobre
			Folha de			Lucro					Folha de			Lucro					Folha de			Lucro					Folha de			Lucro
	Valor		pagamento			operacional			Valor		pagamento			operacional			Valor		pagamento			operacional			Valor		pagamento			operacional
Labor indicators
Nutrition		307		7	%		1	%		185		5	%		1	%		253		14	%		2	%		128		12	%		2	%
Compulsory payroll charges		892		20	%		3	%		710		18	%		4	%		608		34	%		4	%		424		39	%		7	%
Transportation		152		3	%		1	%		116		3	%		1	%		123		7	%		1	%		81		7	%		1	%
Pension Plan		431		10	%		2	%		400		10	%		2	%		134		8	%		1	%		111		10	%		2	%
Health		297		7	%		1	%		243		6	%		1	%		167		9	%		1	%		86		8	%		1	%
Education		174		4	%		1	%		68		2	%		0	%		132		7	%		1	%		81		7	%		1	%
Employee profit sharing plan		548		12	%		2	%		606		15	%		3	%		471		27	%		3	%		508		46	%		8	%
Others		124		3	%		0	%		147		4	%		1	%		95		5	%		1	%		70		6	%		1	%

Total — Labor indicators		2,925		66	%		11	%		2,475		62	%		8	%		1,983		112	%		14	%		1,489		136	%		23	%


			% sobre								% sobre								% sobre								% sobre
			Lucro			Faturamento					Lucro			Faturamento					Lucro			Faturamento					Lucro			Faturamento
	Valor		operacional			bruto			Valor		operacional			bruto			Valor		operacional			bruto			Valor		operacional			bruto
Social Indicators
Taxes (excluding payroll charges)		5,274		19	%		7	%		6,127		32	%		9	%		3,761		27	%		11	%		4,265		66	%		19	%
Citizenship investments		409		1	%		1	%		465		2	%		1	%		356		3	%		1	%		275		4	%		1	%
Social actions and projects		390		1	%		1	%		446		2	%		1	%		337		2	%		1	%		257		4	%		1	%
Native community		19		0	%		—			19		0	%		0	%		19		0	%		—			18		0	%		0	%
Environmental investments		808		3	%		1	%		761		4	%		1	%		678		5	%		2	%		366		6	%		2	%

Total -Social Indicators		6,491		24	%		9	%		7,353		25	%		11	%		4,795		34	%		14	%		4,906		76	%		21	%

Workforce Indicators
Number of employees at the end of the period							62,490								60,405								39,525								33,392
Number of admittances during the period							7,673								6,954								6,133								3,969

Social and environmental projects developed by the company are defined by:

(X)

directors

(X)

directors and managers

( )

all of employees

Occupational health and safety standards were defined by:

(X)

directors and managers

( )

all of employees

( )

all + CIPA

Concerning Unions and the right to negotiate collectively and have internal representation of the employees, the company:

(X)

is not involved in

( )

follows the standards of ILO

( )

encourezes and follows the ILO

The pension plan system covers:

(X)

directors

(X)

directors and managers

(X)

all of employees

Profits sharing covers:

(X)

directors

(X)

directors and managers

(X)

all of employees

On selecting suppliers, the same ethical standards of social and environmental responsibility adopted by the company:

( )

are not considered

( )

are recomended

(X)

are required

Concerning the participation of employees in voluntary work programs, the company:

( )

is not involved in

(X)

support

(X)

organizes and encoureges

Social responsabitlity criteria to select suppliers

Besides technical and economic aspects, the Company considers legal, environment, and health and security aspects in the selection of its suppliers. From the legal point of view, it is required a regular situation on tax aspects and labour and social social security aspects. The environment aspect is verified through documents which confirm the regular situation for the suppliers with the governmental agencies, besides evidence of preservation and environment policies. The engagement with health and security is evaluated through a questionaire form which considers action of preventive policies. Also it takes into consideration the performance of the suppliers with the local community. The Company contracts suppliers considering the criteria above, and also implemented “Programa de Desenvolvimento de Fornecedores (PDF). Promoting suppliers’s development, the PDF extends the benefits to the local community and the bussiness of the region, supporting the socioeconomic development.

6.34- Subsequent events

On January 30, 2009, Vale entered into a purchase and sale agreement with Rio Tinto Plc to acquire iron ore (in Brazil) and potash (in Argentina and Canada) assets. The price to be paid for the iron assets amounts to US$ 750 and the acquisition is subjected to the approval of Brazilian Government, while the potash deposits will be acquired for US$ 850, totaling US$ 1,600.

7- Attachment I — Statement of Investments in Subsidiaries and Jointly-Controlled Companies


	In millions of reais
					Accounting information - (Unaudited)
	Participation (%)				Assets						Liabilities and stockholders’ equity							Statement of income
							Non-current						Non-current
									Investments,
									property plant
									and equipment						Adjusted					Cost of			Operating					Income tax
									and deferred				Long-term and		stockholders’					products and			income			Non-recurrent		and Social			Adjusted net
Period ended december 31, 2008	Total		Voting		Current		Long-term		charges		Current		minority interest		equity			Net revenues		services			(expenses)			items		contribution			income (loss)
Subsidiaries
ALBRAS — Alumínio Brasileiro S.A.		51.00		51.00		574		1,395		1,085		506		603		1,945			2,196		(1,637	)		(339	)		—		(72	)		148
ALUNORTE — Alumina do Norte do Brasil S.A.		57.03		61.74		1,126		257		5,381		417		2,000		4,347			3,112		(2,296	)		(538	)		—		(37	)		241
Brasilux S.A.		100.00		100.00		6		39		—		6		—		39			—		—			20			—		(3	)		17
Cadam S.A		61.48		100.00		161		67		205		33		147		253			216		(203	)		(64	)		—		(3	)		(54	)
Companhia Paulista de Ferro Ligas		100.00		100.00		156		101		1		148		117		(6	)		—		—			(12	)		—		(4	)		(16	)
Companhia Portuária Baia de Sepetiba — CPBS		100.00		100.00		138		7		193		12		1		325			314		(116	)		14			—		(72	)		140
CVRD Overseas Ltd.		100.00		100.00		2,390		350		1,560		2,232		47		2,021			5,835		(4,377	)		434			—		—			1,892
Docepar S.A.		100.00		100.00		5		304		—		34		276		(1	)		—		—			(9	)		—		—			(9	)
Ferrovia Centro — Atlântica S.A.		100.00		100.00		289		118		1,678		179		1,977		(71	)		750		(682	)		(9	)		—		(2	)		57
Ferrovia Norte-Sul S.A.		100.00		100.00		20		2		1,737		939		—		820			60		(28	)		(2	)		—		(3	)		26
Florestas Rio Doce S.A.		99.90		100.00		10		17		4		6		5		20			—		—			(3	)		—		—			(3	)
Mineração Tacumã Ltda.		100.00		100.00		—		—		1,718		18		1,788		(88	)		—		—			56			—		—			56
Minerações Brasileiras Reunidas S.A. — MBR (a)		92.99		92.99		157		82		6,683		908		1,419		4,595			—		(210	)		585			—		67			442
Para Pigmentos S.A		86.17		85.57		122		23		231		256		135		(15	)		170		(172	)		(100	)		—		—			(102	)
Rio Doce Manganése Norway AS		100.00		100.00		245		—		59		84		15		205			495		(303	)		(62	)		—		(28	)		102
Salobo Metais S.A.		100.00		100.00		273		—		1,310		28		1,139		416			—		—			—			—		—			—
Urucum Mineração S.A.		100.00		100.00		319		15		56		232		120		38			335		(94	)		10			—		(88	)		163
Vale Austrália Pty Ltd.		100.00		100.00		657		214		2,102		326		1,706		941			1,102		(527	)		(425	)		—		24			174
Vale Inco		100.00		100.00		8,165		219		56,714		3,448		44,799		16,851			14,177		(9,112	)		(176	)		139		(916	)		4,112
Vale International S.A.		100.00		100.00		31,463		65,040		58,157		12,668		61,536		80,456			32,247		(24,586	)		16,458			—		(72	)		24,047
Vale Manganês S.A.		100.00		100.00		1,393		119		321		1,054		179		600			1,425		(506	)		14			—		(276	)		657
Vale Manganèse France		100.00		100.00		609		—		75		376		6		302			789		(646	)		57			—		(51	)		149
Vale Overseas Ltd.		100.00		100.00		280		13,486		—		280		13,486		—			—		—			—			—		—			—
Valesul Alumínio S.A. (a)		100.00		100.00		225		86		523		138		40		656			451		(385	)		(24	)		—		(21	)		21

Subsidiaries
Baovale Mineração S.A.		50.00		100.00		49		—		58		6		—		101			33		(6	)		—			—		(4	)		23
California Steel Industries, Inc.		50.00		50.00		900		—		610		200		562		748			2,696		(2,354	)		(143	)		—		20			219
Companhia Coreano-Brasileira de Pelotização — KOBRASCO		50.00		50.00		220		22		245		113		119		255			304		(231	)		162			—		(79	)		156
Companhia Hispano-Brasileira de Pelotização — HISPANOBRÁS		50.89		51.00		252		49		133		55		46		333			943		(646	)		14			—		(109	)		202
Companhia Ítalo-Brasileira de Pelotização — ITABRASCO		50.90		51.00		203		64		189		96		92		268			632		(485	)		18			—		(58	)		107
Companhia Nipo-Brasileira de Pelotização — NIBRASCO		51.00		51.11		385		65		408		293		62		503			369		(343	)		418			—		(152	)		292
Minas da Serra Geral S.A. — MSG		50.00		50.00		35		25		61		4		19		98			18		(9	)		(3	)		—		(2	)		4
Mineração Rio do Norte S.A.		40.00		40.00		342		615		897		823		439		592			1,047		(586	)		(132	)		—		(109	)		220
MRS Logística S.A. (a)		41.50		37.86		1,297		537		2,844		1,133		1,713		1,833			2,919		(1,308	)		(640	)		—		(339	)		632
Samarco Mineração S.A.		50.00		50.00		1,924		430		3,611		3,172		2,194		599			4,246		(1,600	)		(1,315	)		—		(226	)		1,105

Observances:

(a) Includes direct and indirect participation.

Additional information of the main operational investee companies are available on the Vale website www.vale.com, investor relations.

8. Report of the Independent Accountants


		Deloitte Touche Tohmatsu
		Av. Pres. Wilson, 231
		22º, 25º e 26º andares
		20030-905 — Rio de Janeiro - RJ
		Brasil

		Tel: +55 (21) 3981-0500
		Fax:+55 (21) 3981-0600 www.deloitte.com.br

(Convenience Translation into English from the Original Previously Issued in Portuguese)

INDEPENDENT AUDITORS’ REPORT

To the Shareholders, Directors and Officers of
Companhia Vale do Rio Doce
Rio de Janeiro — RJ

1.		We have audited the accompanying individual and consolidated balance sheets of Companhia Vale do Rio Doce (the “Company”) and subsidiaries as of December 31, 2008, and the related statements of income, changes in shareholders’ equity, cash flows, and value added for the year then ended, all expressed in Brazilian reais and prepared under the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements. The financial statements for the year ended December 31, 2008 of certain subsidiaries whose investments were accounted for under the equity method were audited by other independent auditors and our report thereon, insofar as it relates to these investments of the Company as of December 31, 2008 in the amount of R$14,405 million and the losses derived therefrom in 2008 in the amount of R$ 1,648 million, and total consolidated assets of R$62,619 million as of December 31, 2008 and consolidated net revenues for the year ended December 31, 2008 in the amount of R$14,177 million, is based solely on the report of these other auditors.

2.		Our audits were conducted in accordance with auditing standards in Brazil and comprised: (a) planning of the work, taking into consideration the significance of the balances, volume of transactions, and the accounting and internal control systems of the Company and its investees; (b) checking, on a test basis, the evidence and records that support the amounts and accounting information disclosed; and (c) evaluating the significant accounting practices and estimates adopted by management, as well as the presentation of the financial statements taken as a whole.

3.		In our opinion, based on our audits and the report of other independent auditors, the financial statements referred to in paragraph 1 present fairly, in all material respects, the individual and consolidated financial positions of Companhia Vale do Rio Doce and subsidiaries as of December 31, 2008, and the results of their operations, the changes in their shareholders’ equity, their cash flows and the values added in operations for the year then ended, in conformity with Brazilian accounting practices.

We had previously audited the individual and consolidated financial statements for the year ended December 31, 2007, comprising the balance sheets, statements of income, changes in shareholders’ equity, and changes in financial position for the year then ended, and supplemental information comprising the statements of cash flows and value added, on which we issued a report, dated February 28, 2008, sharing responsibility for the audit conducted by other independent auditors of the financial statements for the year ended December 31, 2007 of certain subsidiaries whose investments were accounted for under the equity method, and our report thereon, insofar as it relates to these investments of the Company as of December 31, 2007 in the amount of R$12,849 million and the profits derived therefrom in 2007 in the amount of R$3,512 million, and total consolidated assets of R$50,621 million as of December 31, 2007 and consolidated net revenues for the year ended December 31, 2007 in the amount of R$23,244 million, is based solely on the report of these other auditors. As mentioned in note 6.2, certain changes have been introduced to Brazilian accounting practices, effective January 1, 2008. The financial statements for the year ended December 31, 2007, presented together with the 2008 financial statements, have been prepared in accordance with Brazilian accounting practices in effect until December 31, 2007, and as permitted by Technical Pronouncement CPC 13 — First-time Adoption of Law 11638/07 and Provisional Act 449/08, are not being restated with adjustments for purposes of comparability between years being restated with adjustments for purposes of comparability between years.

The accompanying financial statements have been translated into English for the convenience of readers outside Brazil.

Rio de Janeiro, February 19, 2009


/s/ Deloitte Touche Tohmatsu DELOITTE TOUCHE TOHMATSU				/s/ Marcelo Cavalcanti Almeida Marcelo Cavalcanti Almeida
Auditores Independentes				Engagement Partner

9- Opinion of the Fiscal Council on the Annual Report and Financial Statements at December 31, 2008

The Fiscal Council of Companhia Vale do Rio Doce (“Vale”), in carrying out its legal and statutory duties, after examining the Company’s Annual Report, Balance Sheet, Statement of Income, Statement of Changes in Financial Position, Statement of Changes in Stockholders’ Equity and the respective Notes to the Financial Statements relative to the fiscal year ended December 31, 2008, and based on the opinion of the independent auditors, is of the opinion that the mentioned information, examined in accordance of applicable corporate legislation should be approved by the Annual Stockholders’ General Meeting.

Rio de Janeiro, February 19, 2009


Marcelo Amaral Moraes		Antônio José de Figueiredo Ferreira
Chairman

Anibal Moreira dos Santos		Bernard Appy

10- Opinion of the Board of Directors on the Annual Report and Financial Statements at december 31, 2008

The Board of Directors of Companhia Vale do Rio Doce, after examining the Annual Report, Balance Sheet and other Financial Statements of the Company related to the fiscal year ended December 31, 2008, unanimously approved mentioned proposal.

In view of this, the Board is of the opinion that the above mentioned documents should be approved at the Annual Stockholders’ General Meeting.

Rio de Janeiro, February 19, 2009


Sérgio Ricardo Silva Rosa		Mário da Silveira Teixeira Júnior
Chairman		Vice President

José Ricardo Sasseron Member		Oscar Augusto de Camargo Filho Member

Sandro Kohler Marcondes Member		Luciano Galvão Coutinho Member

João Batista Cavaglieri		Francisco Augusto da Costa e Silva
Member		Member

Hiroshi Tada		Jorge Luiz Pacheco
Member		Member

Renato da Cruz Gomes
Member

B- Additional Information

11- Cash generation (unaudited)

Consolidated operating cash generation measured by EBITDA (earnings before financial results, equity in subsidiaries, interest, taxes, depreciation, amortization and depletion, increased by dividends received) was R$ 35,023 as of December 31,2008 against R$ 33,619 as of December 31, 2007, a increase of 4.2%.

EBITDA is not a BR GAAP measure and does not represent the expected cash flow for the reporting periods and, therefore, should not be considered as an alternative measure to net income (loss), as an indicator of our operating performance or as an alternative to cash flow as a liquidity source.

Our definition of EBITDA may not be comparable with EBITDA as defined by other companies.

EBITDA


	(Unaudited)									Accumulated
	4Q/08			3Q/08			4Q/07			2008			2007
Operating profit — EBIT		5,212			10,110			5,056			27,400			29,315
Depreciation / amortization of goodwill		1,322			1,227			1,300			5,112			4,170
Impairment		—			—			—			2,447			—

		6,534			11,337			6,356			34,959			33,485
Dividends received		25			15			75			63			134

EBITDA (LAJIDA)		6,559			11,352			6,431			35,022			33,619

Depreciation / amortization of goodwill		(1,322	)		(1,227	)		(1,300	)		(5,112	)		(4,170	)
Dividends received		(25	)		(15	)		(75	)		(63	)		(134	)
Impairment		—			—			—			(2,447	)		—
Equity Results		261			1,037			(574	)		(1,325	)		(2,405	)
Profit on sale of investment		—			—			—			139			1,458
Financial results, net		2,547			1,312			395			(3,838	)		277
Income tax and social contribution		2,465			111			(183	)		(665	)		(7,085	)
Minority interests		(36	)		(138	)		(284	)		(432	)		(1,554	)

Net income		10,449			12,432			4,410			21,279			20,006

Consolidated EBITDA by segment


	EBITDA
	(Unaudited)									Accumulated
	4Q/08			3Q/08			4Q/07			2008			2007
Segments
Ferrous minerals		5,712			8,781			3,741			25,067			16,087
Non-ferrous minerals		340			2,105			2,464			8,485			16,342
Logistics		529			397			309			1,491			1,508
Steel		(157	)		71			(12	)		18			91
Others		135			(2	)		(71	)		(38	)		(409	)

		6,559			11,352			6,431			35,023			33,619

12- Board of Directors, Fiscal Council, Advisory Committees and Executive Officers


Board of Directors		Fiscal Council

Sérgio Ricardo Silva Rosa		Marcelo Amaral Moraes
Chairman		Chairman

Mário da Silveira Teixeira Júnior		Aníbal Moreira dos Santos
Vice-President		Antônio José de Figueiredo Ferreira
		Bernard Appy
Francisco Augusto da Costa e Silva
João Batista Cavagliberi		Alternate
Jorge Luiz Pacheco		Marcos Coimbra
José Ricardo Sasseron		Marcus Pereira Aucélio
Luciano Galvão Coutinho		Oswaldo Mário Pêgo de Amorim Azevedo
Masami lijima
Oscar Augusto de Camargo Filho
Renato da Cruz Gomes
Sandro Kohler Marcondes		Executive Officers

		Roger Agnelli
Advisory Committees of the Board of Directors		Chief Executive Officer

Controlling Committee		Carla Grasso
Luiz Carlos de Freitas		Executive Officer for Human Resources and Corporate
Paulo Ricardo Ultra Soares		Services
Paulo Roberto Ferreira de Medeiros
		Demian Fiocca
Executive Development Committee		Executive Officer for Management and Sustainability
João Moisés de Oliveira
José Ricardo Sasseron		Eduardo de Salles Bartolomeo
Oscar Augusto de Camargo Filho		Executive Officer for Logistics, Engineering and Project
		Management

Strategic Committee
Roger Agnelli		Fabio de Oliveira Barbosa
Mário da Silveira Teixeira Júnior		Chief Financial Officer and Investor Relations
Oscar Augusto de Camargo Filho
Sérgio Ricardo Silva Rosa		José Carlos Martins
		Executive Officer for Ferrous Minerals

Finance Committee
Fabio de Oliveira Barbosa		Tito Botelho Martins
Ivan Luiz Modesto Schara		Executive Officer for Non Ferrous
Luiz Maurício Leuzinger
Wanderlei Viçoso Fagundes		Marcus Vinícius Dias Severini
		Chief Officer of Accounting and Control Department

Governance and Sustainability Committee		Vera Lúcia de Almeida Pereira Elias
Jorge Luiz Pacheco		Chief Accountant
Renato da Cruz Gomes		CRC-RJ — 043059/O-8
Ricardo Simonsen

Equity Investee Information — 12/31/2008

Aluminum Area — Albras (Adjusted and Unaudited)


			2008															2007
			As of and for the three-month periods ended															As of and for the three-month periods ended
Information			March 31			June 30			September 30			December 31			Total			March 31			June 30			September 30			December 31			Total

Quantity sold - external market	MT (thousand)			109			99			117			108			433			108			123			108			104			443
Quantity sold - internal market	MT (thousand)			7			6			7			6			26			7			6			7			6			26

Quantity sold - total	MT (thousand)			116			105			124			114			459			115			129			115			110			469


Average sales price - external market	US$			2,486.87			2,939.31			2,888.76			2,150.39			2,589.98			2,688.76			2,727.00			2,631.55			2,405.80			2,611.76
Average sales price - internal market	US$			2,307.59			2,640.89			2,625.72			2,380.23			2,827.94			2,500.55			2,689.00			2,599.78			2,196.61			2,372.90

Average sales price - total	US$			2,476.70			2,920.77			2,874.64			2,162.48			2,603.46			2,677.30			2,724.78			2,585.19			2,393.38			2,598.49

Long-term indebtedness, gross	US$			283,333			300,521			266,666			249,999			249,999			319,272			311,912			305,833			300,718			300,718
Short-term indebtedness, gross	US$			111,462			90,031			127,730			133,329			133,329			3,501			—			2,034			40,083			40,083

Total indebtedness, gross	US$			394,795			390,552			394,396			383,328			383,328			322,773			311,912			307,867			340,801			340,801


Stockholders’ equity		R$		1,762,743			1,871,810			1,908,042			1,949,655			1,949,655			1,593,343			1,661,559			1,851,784			1,775,488			1,775,488


Net operating revenues		R$		507,262			513,302			583,876			556,610			2,161,050			654,600			700,893			577,381			478,152			2,411,026
Cost of products		R$		(389,192	)		(370,909	)		(431,517	)		(445,146	)		(1,636,764	)		(419,374	)		(464,066	)		(400,422	)		(373,884	)		(1,657,746	)
Other expenses / revenues		R$		(33,556	)		(34,060	)		(30,811	)		(56,582	)		(155,009	)		(23,417	)		(34,666	)		(29,700	)		(48,011	)		(135,794	)
Depreciation, amortization and depletion		R$		18,680			17,539			18,851			17,422			72,492			18,427			39,204			1,029			15,669			74,329

EBITDA		R$		103,194			125,872			140,399			72,304			441,769			230,236			241,365			148,288			71,926			691,815
Depreciation, amortization and depletion		R$		(18,680	)		(17,539	)		(18,851	)		(17,422	)		(72,492	)		(18,427	)		(39,204	)		(1,029	)		(15,669	)		(74,329	)

EBIT		R$		84,514			108,333			121,548			54,882			369,277			211,809			202,161			147,259			56,257			617,486
Non recurrent intens (Write-down of assets)		R$		(6	)		—			—			—			(6	)		—			—			—			184			184
Net financial result		R$		(116,210	)		63,342			(72,234	)		(23,765	)		(148,867	)		34,420			(19,200	)		128,740			67,136			211,096
Non operational results		R$		—												—			—			—			(5,519	)		—			(5,519	)

Income before income tax and social contribution		R$		(31,702	)		171,675			49,314			31,117			220,404			246,229			182,961			270,480			123,577			823,247
Income tax and social contribution		R$		(14,510	)		(62,608	)		(13,082	)		18,084			(72,116	)		(50,055	)		(114,746	)		(80,256	)		(13,901	)		(258,957	)

Net income		R$		(46,212	)		109,067			36,232			49,201			148,288			196,174			68,215			190,224			109,676			564,290

Aluminum Area — MRN (Adjusted and Unaudited)


			2008														2007
			As of and for the three-month periods ended														As of and for the three-month periods ended
Information			March 31			June 30			September 30			December 31		Total			March 31			June 30			September 30			December 31			Total

Quantity sold - external market	MT (thousand)			1,369			1,573			1,496			—		4,438			1,386			1,356			1,522			1,365			5,629
Quantity sold - internal market	MT (thousand)			2,621			2,949			3,268			—		8,838			3,350			2,969			2,939			2,993			12,251

Quantity sold - total	MT (thousand)			3,990			4,522			4,764			—		13,276			4,736			4,325			4,461			4,358			17,880


Average sales price - external market	US$			61.52			34.93			34.71			—		34.96			33.35			32.47			33.29			34.42			33.38
Average sales price - internal market	US$			53.89			31.24			31.96			—		31.61			27.04			27.04			27.69			28.38			27.52
Average sales price - total	US$			56.51			32.52			32.83			—		32.73			28.89			28.74			29.60			30.27			29.37

Long-term indebtedness, gross	US$			46,151			115,231			96,970			—		96,970			38,936			35,488			26,516			44,715			44,715
Short-term indebtedness, gross	US$			245,429			221,143			225,894			—		225,894			204,362			223,553			207,048			147,619			147,619

Total indebtedness, gross	US$			291,580			336,374			322,864			—		322,864			243,298			259,041			233,564			192,334			192,334


Stockholders’ equity		R$		634,170			687,360			717,533			—		717,533			715,623			825,859			933,029			592,007			592,007


Net operating revenues		R$		206,543			220,647			242,896			—		670,086			284,926			249,740			253,386			235,716			1,023,768
Cost of products		R$		(121,170	)		(150,287	)		(145,601	)		—		(417,058	)		(142,081	)		(133,000	)		(133,695	)		(133,914	)		(542,690	)
Other expenses / revenues		R$		(4,622	)		(5,480	)		(5,586	)		—		(15,688	)		(5,183	)		(5,832	)		(2,840	)		(5,273	)		(19,128	)
Depreciation, amortization and depletion		R$		28,386			28,305			28,322			—		85,013			27,234			27,984			27,491			28,118			110,827

EBITDA		R$		109,137			93,185			120,031			—		322,353			164,896			138,892			144,342			124,647			572,777
Depreciation, amortization and depletion		R$		(28,386	)		(28,305	)		(28,322	)		—		(85,013	)		(27,234	)		(27,984	)		(27,491	)		(28,118	)		(110,827	)

EBIT		R$		80,751			64,880			91,709			—		237,340			137,662			110,908			116,851			96,529			461,950
Net financial result		R$		(12,584	)		18,096			(53,799	)		—		(48,287	)		4,991			10,310			2,490			2,730			20,521

Income before income tax and social contribution		R$		68,167			82,976			37,910			—		189,053			142,653			121,218			119,341			99,259			482,471
Income tax and social contribution		R$		(25,009	)		(29,786	)		(7,737	)		—		(62,532	)		(12,368	)		(10,530	)		(12,171	)		(10,128	)		(45,197	)

Net income		R$		43,158			53,190			30,173			—		126,521			130,285			110,688			107,170			89,131			437,274

Aluminum Area — Alunorte (Adjusted and Unaudited)


			2008															2007
			As of and for the three-month periods ended															As of and for the three-month periods ended
Information			March 31			June 30			September 30			December 31			Total			March 31			June 30			September 30			December 31			Total

Quantity sold - external market	MT (thousand)			814			832			975			1,336			3,957			699			769			828			933			3,229
Quantity sold - internal market	MT (thousand)			235			258			301			250			1,044			244			252			248			271			1,015

Quantity sold - total	MT (thousand)			1,049			1,090			1,276			1,586			5,001			943			1,021			1,076			1,204			4,244


Average sales price - external market	US$			322.36			372.73			378.60			286.74			334.79			344.85			349.61			340.23			312.26			335.38
Average sales price - internal market	US$			287.59			340.49			342.74			324.54			358.65			309.77			311.69			306.88			275.46			300.38

Average sales price - total	US$			314.57			365.10			370.14			292.70			339.77			335.77			340.25			332.54			303.98			327.01

Long-term indebtedness, gross	US$			740,000			828,590			855,397			855,398			855,398			527,944			558,388			483,873			556,065			556,065
Short-term indebtedness, gross	US$			20,037			—			28,951			31,124			31,124			—			—			—			—			—

Total indebtedness, gross	US$			760,037			828,590			884,348			886,522			886,522			527,944			558,388			483,873			556,065			556,065


Stockholders’ equity		R$		4,077,566			4,233,439			4,345,957			4,346,958			4,346,958			3,602,210			3,766,403			4,119,110			4,136,553			4,136,553


Net operating revenues		R$		574,017			660,565			789,345			1,033,795			3,057,722			670,033			669,980			713,458			655,750			2,709,221
Cost of products		R$		(476,079	)		(478,374	)		(587,518	)		(754,073	)		(2,296,044	)		(383,541	)		(430,068	)		(479,498	)		(512,055)			(1,805,162	)
Other expenses / revenues		R$		(25,223	)		(26,517	)		(22,959	)		(49,473	)		(124,172	)		(15,470	)		(21,684	)		(17,934	)		(30,690	)		(85,778	)
Depreciation, amortization and depletion		R$		36,013			30,350			30,294			45,448			142,105			27,145			31,041			28,305			30,193			116,684

EBITDA		R$		108,728			186,024			209,162			275,697			779,611			298,167			249,269			244,331			143,198			934,965
Depreciation, amortization and depletion		R$		(36,013	)		(30,350	)		(30,294	)		(45,448	)		(142,105	)		(27,145	)		(31,041	)		(28,305	)		(30,193	)		(116,684	)

EBIT		R$		72,715			155,674			178,868			230,249			637,506			271,022			218,228			216,026			113,005			818,281
Net financial result		R$		(108,077	)		33,026			(57,123	)		(227,185	)		(359,359	)		40,691			(29,795	)		57,674			52,961			121,531
Non recurrent intens (Write-down of assets)		R$		—												—			—			—			(37	)		108			71

Income before income tax and social contribution		R$		(35,362	)		188,700			121,745			3,064			278,147			311,713			188,433			273,663			166,074			939,883
Income tax and social contribution		R$		(7,679	)		(32,826	)		(9,227	)		12,761			(36,971	)		(37,767	)		(24,240	)		(69,500	)		(24,958	)		(156,465	)

Net income		R$		(43,041	)		155,874			112,518			15,825			241,176			273,946			164,193			204,163			141,116			783,418

Aluminum Area — Valesul (Adjusted and Unaudited)


			2008														2007
			As of and for the three-month periods ended														As of and for the three-month periods ended
Information			March 31			June 30			September 30			December 31		Total			March 31			June 30			September 30			December 31			Total

Quantity sold - external market	MT (thousand)			4			7			6			—		17			9			10			8			8			35
Quantity sold - internal market	MT (thousand)			16			15			19			—		50			10			16			15			30			71

Quantity sold - total	MT (thousand)			20			22			25			—		67			19			26			23			38			106


Average sales price - external market	US$			2,653.70			2,846.14			2,679.23			—		2,735.46			2,828.64			2,902.69			2,750.68			2,580.48			2,777.48
Average sales price - internal market	US$			3,786.95			4,168.23			3,321.93			—		3,674.75			4,037.71			4,068.49			4,045.36			3,415.84			3,722.07
Average sales price - total	US$			3,560.30			3,747.56			3,148.89			—		3,426.11			3,512.03			3,652.13			3,696.79			3,177.17			3,410.18

Stockholders’ equity		R$		637,555			644,643			650,810			—		650,810			279,134			662,457			671,728			649,126			649,126


Net operating revenues		R$		100,607			115,282			134,658			—		350,547			146,650			139,569			123,409			120,724			530,352

Cost of products		R$		(84,081	)		(91,021	)		(122,915	)		—		(298,017	)		(100,019	)		(108,609	)		(98,114	)		(103,968	)		(410,710	)

Other expenses / revenues		R$		(10,741	)		(10,754	)		(9,585	)		—		(31,081	)		(7,436	)		(6,773	)		(10,399	)		(7,611	)		(32,219	)

Depreciation, amortization and depletion		R$		8,099			5,909			7,084			—		21,092			3,765			3,662			6,691			6,718			20,836

EBITDA		R$		13,884			19,416			9,242			—		42,541			42,960			27,849			21,587			15,863			108,259
Depreciation, amortization and depletion		R$		(8,099	)		(5,909	)		(7,084	)		—		(21,092	)		(3,765	)		(3,662	)		(6,691	)		(6,718	)		(20,836	)

EBIT		R$		5,785			13,507			2,158			—		21,449			39,195			24,187			14,896			9,145			87,423
Net financial result		R$		(905	)		(372	)		10,469			—		9,192			(503	)		(392	)		(188	)		(1,021	)		(2,104	)

Income before income tax and social contribution		R$		4,880			13,135			12,627			—		30,641			38,692			23,795			14,708			8,124			85,319
Income tax and social contribution		R$		(2,814	)		(6,045	)		(6,460	)		—		(15,319	)		(6,298	)		(5,434	)		(5,437	)		(10,727	)		(27,896	)

Net income		R$		2,066			7,090			6,167			—		15,322			32,394			18,361			9,271			(2,603	)		57,423

Pellets Area — Hispanobras (Adjusted and Unaudited)


			2008															2007
			As of and for the three-month periods ended															As of and for the three-month periods ended
Information			March 31			June 30			September 30			December 31			Total			March 31			June 30			September 30			December 31			Total

Quantity sold - external market	MT (thousand)			404			400			618			—			1,422			565			504			527			394			1,990
Quantity sold - internal market	MT (thousand)			710			805			554			396			2,465			800			620			510			545			2,475

Quantity sold - total	MT (thousand)			1,114			1,205			1,172			396			3,887			1,365			1,124			1,037			939			4,465


Average sales price - external market		US$		71.45			203.07			227.18			—			176.15			69.26			77.40			72.50			73.25			72.97
Average sales price - internal market		US$		75.95			203.58			236.04			146.47			164.94			72.97			79.73			74.88			76.94			75.93
Average sales price - total	US$			74.32			203.41			231.37			146.47			169.04			71.43			78.69			73.67			75.39			74.71

Short-term indebtedness, gross	US$			75,338			58,382			7,474			—			—			6,213			9,338			14,212			45,583			45,583

Total indebtedness, gross	US$			75,338			58,382			7,474			—			—			6,213			9,338			14,212			45,583			45,583


Stockholders’ equity		R$		157,097			264,714			301.251			333,094			333,094			167,293			149,665			159,658			149,964			149,964


Net operating revenues		R$		144,995			409,554			274,225			113,968			942,742			205,706			175,156			146,352			127,964			655,178
Cost of products		R$		(129,399	)		(237,400	)		(196,794	)		(81,105	)		(644,698	)		(164,230	)		(145,097	)		(100,792	)		(138,321	)		(548,440	)
Other expenses / revenues		R$		(4,226	)		(5,218	)		(3,828	)		(14,393	)		(27,665	)		(2,313	)		(3,659	)		(28,043	)		(2,325	)		(36,340	)
Depreciation, amortization and depletion		R$		1,832			2,106			2,341			1,980			8,259			2,146			1,744			1,624			2,820			8,334

EBITDA		R$		13,202			169,042			75,944			20,450			278,638			41,309			28,144			19,141			(9,862	)		78,732
Depreciation, amortization and depletion		R$		(1,832	)		(2,106	)		(2,341	)		—			(6,279	)		(2,146	)		(1,744	)		(1,624	)		(2,820	)		(8,334	)

EBIT		R$		11,370			166,936			73,603			—			272,359			39,163			26,400			17,517			(12,682	)		70,398
Net financial result		R$		901			(2,986	)		11,974			—			9,889			(3,060	)		(3,412	)		(2,004	)		(1,425	)		(9,901	)

Income before income tax and social contribution		R$		12,271			163,950			85,577			—			282,248			36,103			22,988			15,513			(14,107	)		60,497
Income tax and social contribution		R$		(5,138	)		(56,334	)		(29,992	)		—			(91,464	)		(12,506	)		(8,787	)		(5,521	)		4,413			(22,401	)

Net income		R$		7,133			107,616			55,585			—			190,784			23,597			14,201			9,992			(9,694	)		38,096

Pellets Area — Itabrasco (Adjusted and Unaudited)


			2008														2007
			As of and for the three-month periods ended														As of and for the three-month periods ended
Information			March 31			June 30			September 30			December 31		Total			March 31			June 30			September 30			December 31			Total

Quantity sold — external market	MT (thousand)			185			754			800			—		1,739			589			701			282			439			2,011
Quantity sold — internal market	MT (thousand)			843			90			273			—		1,206			283			657			562			605			2,107

Quantity sold — total	MT (thousand)			1,028			844			1,073			—		2,945			872			1,358			844			1,044			4,118


Average sales price — external market	US$			75.36			75.18			187.03			—		126.65			75.72			74.48			77.40			75.60			75.60
Average sales price — internal market	US$			75.11			82.52			137.90			—		90.61			71.33			73.81			75.02			74.37			73.64
Average sales price — total	US$			75.15			75.96			174.53			—		111.89			73.53			74.16			75.82			74.89			74.60

Short-term indebtedness, gross	US$			51,974			79,909			61,326			—		61,326			—			—			32,376			42,600			42,600

Total indebtedness, gross	US$			51,974			79,909			61,326			—		61,326			—			—			32,376			42,600			42,600


Stockholders’ equity		R$		165,101			166,240			230.754			—		230.754			143,226			117,480			126,996			160,386			160,386


Net operating revenues		R$		136,495			106,308			326,353			—		569,156			136,746			201,246			124,047			139,642			601,681
Cost of products		R$		(120,715	)		(102,629	)		(213,522	)		—		(436,866	)		(111,373	)		(171,403	)		(116,301	)		(124,474	)		(523,551	)
Other expenses / revenues		R$		(4,902	)		(4,749	)		(9,099	)		—		(18,750	)		2,557			(7,720	)		9,391			(3,852	)		376
Depreciation, amortization and depletion		R$		2,560			2,097			1,961			—		6,618			(1,325	)		4,645			1,137			2,160			6,617

EBITDA		R$		13,438			1,027			105,693			—		120,158			26,605			26,768			18,274			13,476			85,123
Depreciation, amortization and depletion		R$		(2,560	)		(2,097	)		(1,961	)		—		(6,618	)		1,325			(4,645	)		(1,137	)		(2,160	)		(6,617	)

EBIT		R$		10,878			(1,070	)		103,732			—		113,540			27,930			22,123			17,137			11,316			78,506
Net financial result		R$		(1,498	)		5,330			(3,629	)		—		203			(2,229	)		(1,148	)		(1,784	)		(1,216	)		(6,377	)

Income before income tax and social contribution		R$		9,380			4,260			100,103			—		113,743			25,701			20,975			15,353			10,100			72,129
Income tax and social contribution		R$		(4,665	)		(3,121	)		(35,589	)		—		(43,375	)		(9,706	)		(7,751	)		(6,198	)		(8,779	)		(32,434	)

Net income		R$		4,715			1,139			64,514			—		70,368			15,995			13,224			9,155			1,321			39,695

Pellets Area — Samarco (Adjusted and Unaudited)


			2008														2007
			As of and for the three-month periods ended														As of and for the three-month periods ended
Information			March 31			June 30			September 30			December 31		Total			March 31			June 30			September 30			December 31			Total
Quantity sold — Pellets	MT (thousand)			3,010			4,327			5,519			—		12,856			3,003			3,742			3,241			4,373			14,359
Quantity sold — Iron ore	MT (thousand)			168			140			154			—		462			463			638			302			358			1,761

Average sales price — Pellets	US$			105.51			142.07			152.30			—		105.51			77.51			82.38			83.61			82.58			81.70
Quantity sold — Iron ore	US$			47.61			98.95			73.86			—		47.61			46.79			46.78			45.30			49.14			47.01

Long-term indebtedness, gross	US$			799,634			799,597			799,666			—		799,666			737,926			817,457			807,753			799,087			799,087
Short-term indebtedness, gross	US$			591,496			845,623			987,132			—		987,132			192,157			323,841			397,992			572,218			572,218

Total indebtedness, gross	US$			1,391,130			1,645,220			1,786,798			—		1,786,798			930,083			1,141,298			1,205,745			1,371,305			1,371,305


Stockholders’ equity		R$		995,859			1,493,766			1,377,023			—		1,377,023			970,015			1,018,112			1,175,289			823,011			823,011


Net operating revenues		R$		576,988			1,033,109			1,387,256			—		2,997,353			557,293			667,398			551,937			684,666			2,461,294
Cost of products		R$		(275,764	)		(450,521	)		(520,484	)		—		(1,246,769	)		(233,161	)		(269,773	)		(221,186	)		(339,323	)		(1,063,443	)
Other expenses / revenues		R$		(76,574	)		(160,350	)		(89,263	)		—		(326,187	)		(39,119	)		(152,413	)		(62,990	)		(123,636	)		(378,158	)
Depreciation, amortization and depletion		R$		13,635			26,227			44,595			—		84,457			13,884			15,631			16,346			16,555			62,416

EBITDA		R$		238,285			448,465			822,104			—		1,508,854			298,897			260,843			284,107			238,262			1,082,109
Depreciation, amortization and depletion		R$		(13,635	)		(26,227	)		(44,595	)		—		(84,457	)		(13,884	)		(15,631	)		(16,346	)		(16,555	)		(62,416	)

EBIT		R$		224,650			422,238			777,509			—		1,424,397			285,013			245,212			267,761			221,707			1,019,693
Result of equity investiments		R$		—			—						—		—			4,856			6,120			2,532			(13,508	)		—
Net financial result		R$		5,635			176,662			(466,551	)		—		(284,254	)		73,965			26,485			43,064			45,347			188,861

Income before income tax and social contribution		R$		230,285			598,900			310,958			—		1,140,143			363,834			277,817			313,357			253,546			1,208,554
Income tax and social contribution		R$		(57,342	)		(100,979	)		(46,457	)		—		(204,778	)		(65,216	)		(66,798	)		(64,235	)		(40,322	)		(236,571	)

Net income		R$		172,943			497,921			264,501			—		935,365			298,618			211,019			249,122			213,224			971,983

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.


Date: February 19, 2009	COMPANHIA VALE DO RIO DOCE (Registrant)
	By:	/s/ Roberto Castello Branco
		Roberto Castello Branco
		Director of Investor Relations