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NICKEL NICKEL Cristina S da Silva



        Cristina S. da Silva – DNPM/GO - Telephone (62) 3241-5044 – E-mail: cristina.dnpm@gmail.with
                 Maurício Ribeiro de Andrade - DNPM/GO – Telephone (62) 3281-8044- E-mail:

   The Brazilian company Cia. Vale do Rio Doce holds the biggest percentage of the world reserves of nickel
with a participation of 43.80% in the total, followed by the Russian company Norilsk and Nickel (23.26%), by
Australian companies Broken Hill Proprietary Company-BHP (17.82%) and Minara Glencore (5.81%). In Brazil,
CVRD has two projects in Pará called Vermelho and Onça Puma with a forecast of an average capacity of
production of 50.000 t/year of lateritic nickel.
        The Brazilian measured reserves total 624.448.949t and are distributed in the States of Goiás (44.43%),
Pará (31.05%), Piauí (22.10%), Minas Gerais (2.06%) and São Paulo (0.36%).

World Reserve and Production
                                                                       (1)      3                                (2)
                  Specification                           Reserves           (10 t)               Produtions (t)
                                                             (p)                               (r)            (p)
                    Countries                           2006                     %        2005           2006                 %
Brazil                                                        9,611              6.7          74,198          82,492          5.1
Australia                                                  27,000               18.7         189,000         191,000         11.9
Cuba                                                       23,000               15.9          72,000          73,800          4.6
Canada                                                     15,000               10.4         198,000         230,000         14.3
Indonesia                                                  13,000                9.0         160,000         145,000          9.0
New Caledonia                                              12,000                8.3         112,000         112,000          7.0
South Africa                                               12,000                8.3          42,500          41,000          2.5
Russia                                                        9,200              6.4         315,000         320,000         19.9
China                                                         7,600              5.3          77,000          79,000          4.9
Philippines                                                   5,200              3.6          26,600          42,000          2.6
Dominican Republic                                            1,100              0.8          46,000          46,000          2.9
Colombia                                                      1,000              0.7          89,000          90,000          5.6
Botswana                                                         920             0.6          28,000          28,000          1.7
Other Countries                                               7,690              5.3         106,500         128,200          8.0
TOTAL                                                     144,321              100.0       1,535,798       1,608,492        100.0
Source: Mineral Commodity Summaries-2007; Notes: (1) Includes measured and indicated reserves, in nickel contained; (2) Data on the
production of Ni contained in ore; (p) Preliminary data; (r) Reviewed data

   Anglo American produced 487.555t of nickel ore with a content of 2.13% in its mine located in Barro Alto-
GO and 27.636 t of alloy FeNi, processed in its plant installed in Niquelândia-GO.
   The group Votorantin Metais totalled its production at 5.014.012t of nickel ore with 72.133 t of Ni contained
and 16.891 t of matte, through the companies: Cia. Níquel Tocantins S.A., located in Niquelândia-GO, Mineração
Serra da Fortaleza, in Fortaleza de Minas – MG and in association with Prometálica S.A., in the municipality of
Americano do Brasil-GO, highlighting Cia. Níquel Tocantins, which participated with 87.75% of the total
production of ore, having sent 45.646t of nickel carbonate to the unit of São Miguel Paulista-SP for the process of
electrolysis. Another highlight was Mineração Serra da Fortaleza, which attained 70.66% of the total production
of matte.
    Cia. de Níquel do Brasil produced, in Liberdade – MG, 1.644 t of nickel concentrate with content of 1.5%.

   Imports of nickel totalled 8.236t under the forms of in semi-manufactured goods (66.08 %) coming from
Russia, Cuba, Australia, Finland and Canada; in chemical compounds (1821%) coming from Germany, Finland,
Belgium, France and China, and manufactured goods (15.49%) coming from Canada, the United States, the
United Kingdom, Germany and Sweden, which brought about an expenditure in foreign exchange of about R$
354.877.460.00. The continuous increase in the production maintained a growing reduction of the entry of the
metal in the country, vis-à-vis the previous year, at 73.12%.
   Exports of nickel totalled 28.867 t, most of them under the form of semi-manufactured goods (97.45%);
manufactured goods and chemical compounds together participated with 2.54%, which has as a result US$
370.526.713.74 in incoming foreign exchange, highlighting ferro-nickel that featured a growth of 66% in its
negotiation value.
   Anglo American exported 4.317 t of alloy FeNi for Germany (15%), totalling an entry of foreign exchange of
about US$ 32,340,486.00, meant for the manufacture of stainless steel.
   Serra da Fortaleza exported 12.761,97 t of matte for Finland, totalling US$ 96,685,023.61 in the negotiation of
the metal with a view at obtaining electrolytic nickel.
   Cia. Níquel Tocantins sent 9.825 t of electrolytic nickel for Japan (59.5%), Singapore (17.3%), Argentina
(9.0%), Korea (7.2%) and the United States (7.0%), totalling US$ 241,826,628.00 in incoming foreign exchange,
used in the production of stainless steel, and in the steel industry and smelter industry. The increase of the sales on
the domestic market reduced by 39% of the volume negotiated vis-à-vis the previous year.

    Anglo American allocated 85% of the its production to the domestic market distributed among the states of
Minas Gerais (86%), São Paulo (8%) and Rio Grande do Sul (5%) achieving a billing of R$ 493.616.693,00, and
ACESITA was the biggest consumer, having absorbed 74% of its production.
    Cia. Níquel Tocantins commercialised 11.308 t at the average price of R$ 53.019.00/t of electrolytic nickel,
distributed among Minas Gerais (58%), São Paulo (34%) and Rio Grande do Sul (8%) for the manufacture of
stainless steel, the steel industry, super alloys, the smelter industry and galvanoplasty. The mining company Serra
da Fortaleza does not commercialise its production on the domestic market.

Salient Statistics - Brazil
                                                                                       (r)                   (r)                   (p)
                            Specification                                      2004               2005               2006
                    Ore / Nickel contained                     (t)        3,893,045 / 44,928 4,845,695 / 74,198 5,503,211 / 82,492
                    Ni- contained in carbonate                 (t)                      18,406                21,116                21,630

                    Ni- contained in Matte                     (t)                           5,950                 6,005                 5,416
                    Ni- electrolytic                           (t)                      19,742                20,714               21,339
                    Ni- contained in alloy Fe-Ni               (t)                           6,409                 9,596                 9,814

                    Metal and manufactured                     (t)                      16,514                     9,902                 6,718
Imports:                                               (10 US$-FOB)                   150,753                163,244              155,007
                    Chemical Compounds                      (t)                         1,021                  1,298                1,500
                                                       (10 US$-FOB)                     2,851                  5,968                8,490
                    Mineral Goods (concentrate)             (t)                           195                      0                    0
                                                       (10 US$-FOB)                         26                     0                     0
                    Metal and manufactured                  (t)                         26,375                30,451                28,663
Exports:                                                   3
                                                       (10 US$-FOB)                   146,525                274,426              369,756
                    Chemical Compounds                      (t)                           295                    313                  204
                                                       (10 US$-FOB)                        389                   541                   771
Apparent                                                    (t)                         21,761                15,154                19,984
                    Ferro Nickel*                        (US$/t-FOB)                  2,595.14              5,143.98              7,531.04

Average Price:      Electrolytic nickel**                (US$/t-FOB)                10,251.90             16,699.53             23,771.00
                    Sinters of nickel oxide***          ( US$/t-FOB)                  8,529.76            13,277.41             10,994.05

Source: DNPM-DIRIN, SECEX-D.T.I. Notes: (1) Production + Imports - Exports was used as calculation basis: Production: 36.569 t, Imports:
6.718 t (except chemical compounds, because we did not obtain data on Ni contained); Exports: 23.303 t (Cia. Níquel Tocantins 9.825 t, Anglo
American: 1.542 t and Min. Serra da Fortaleza: 11.936.10t); (*) Average base price exports; (**) Average base price exports (***) Average
base price imports; (r) Reviewed (p) Preliminary

   The measured and indicated reserve of Cia. de Níquel do Brasil contains of 3.813.182 t of nickel ore with an
average content of 1.25%, totalling 43.252,56 t of nickel contained. The company intends to attain the production
of 15.000t of ore in the next three years, with investments forecast of about R$ 106.000,00, distributed among
acquisition and/or refurbishing of equipment (94.34%) and labour health and safety (5.66%).
    Grupo Votorantim and Prometálica (joint venture) the main shareholder of which is the Brazilian company
LMS Empreendimentos Ltda (77% of the quotas) and Brazilian Resources (23%) forecasts investments in project
Americano do Brazil of about R$ 82 million, in the production of 600 thousand t/year of nickel ore to produce
100 thousand t/year of processed concentrate in the plant of Mineração Serra da Fortaleza; the company currently
generates 270 direct jobs and circa 1.400 indirect ones. Votorantim will invest R$ 738 million in a factory of
ferro-nickel in Niquelândia and in the flexibility of the energy matrix of the current unit, by putting in place a
furnace for oil coal. The plant will expand its production capacity in 10.6 thousand t/year, attaining a production
of 40 thousand t/year of nickel, generating 420 direct jobs and another 2 thousand indirect ones, and the
production will be exported for Europe, China and Japan.
    Anglo American has approved a project for the production of ferro-nickel in Barro Alto (GO). The investment
forecast will be of US$ 1.2 billion. At the stage of construction, the venture will generate approximately 3
thousand direct jobs and 750 new positions at the stage of operation. The production capacity of Barro Alto will
be of 36 thousand t/year of nickel contained in the ferro-nickel alloy for 26 years.
    RTZ forecasts two more projects to guarantee an initial share of 5% of the world production. One of the mines
is located in the American State of Michigan (the only mine of primary nickel of the United States) with
construction scheduled for the end of this year. The mine will be able to produce 136 thousand t. of nickel. In
Indonesia, the investment will be of 2 billion dollars, with a view at producing 45 to 50 thousand t. of nickel
starting from 2012.

    When it acquired the Canadian company INCO, in 2006, Companhia Vale do Rio Doce (CVRD) inherited the
company GORO located in New Caledonia, and it intends to complete the nickel project by the end of 2008, at an
approximate cost of US$ 3 billion. The expectation is that the venture will be ready for operations in the last
quarter of 2007. In Brazil, in the State of Pará, the company started hiring companies for the works of land
movement and for civil works involved in project Onça-Puma, for which the forecast of investments is of US$ 1.4
billion, to enter into operation starting from the end of 2008 or the beginning of 2009, at a scale of 55 thousand
tonnes /year of nickel. The nickel project of Vermelho awaits the environmental permit, with investments forecast
of about US$ 1.2 billion.
Phelps Dodge, Inco Limited and Falconbridge Limited will announce a merger that should generate synergies of
US$ 900 million a year until 2008, to create one of the world’s largest mining companies, the Phelps Dodge Inco
Corporation, operating in over 40 countries and with circa 40 thousand employees all over the world. The three
companies had combined gross revenues of US$ 6.3 billion in the first quarter of the year. The nickel business of
the company will have their headquarters in Toronto, in Canada.

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