valehistorybook3

1950
1931
CHAPTER 3
Defining Years: the Achievement
of a Corporate Identity
3.1 Pellet production
At the start of the 1950s, the steel industry basically used lump
ore ranging from 6.35 mm to 50.8 mm in size, as the use of smaller
particles affected reactor permeability, reducing productivity due
to the flow of gases against the ore. As a result, a large quantity
of waste particles known as “fines” accumulated at mines. This
factor, combined with the development and use of other minerals,
such as taconite1 and itabirite,2 led to the creation of two hightemperature agglomeration processes to make use of fines: sintering
and pelletizing.3 Introduced in the 1950s, these processes have since
been enhanced, in line with the evolution of the steel industry and
seeking greater energy efficiency and productivity, together with
sustainability.4
Due to its lower costs, sintering was widely introduced at steel
mills, although its product – sinter, formed by agglomerating
particles of 0.105 mm to 6.35 mm across – is weaker than pellets
and needs to be closer to the reactor, as handling it generates
undesirable fines. On the other hand, the pelletizing process
involves agglomerating ultrafine particles smaller than 0.105 mm
in size, transforming them into pellets – more resistant globules
that can be moved for long distances, thereby making them suitable
for customers on different continents.5 Sintering processes were
developed before those of pelletizing, as the particle size of sinter
feed is more suited to agglomeration.
When CVRD decided to begin producing pellets in 1956, it was
inaugurating a new era. The company’s new pelletizing plants were
incorporated into its mine-railroad-port structure and, since then, the
1 - Iron carbonate.
2 - Overlapping layers of iron oxide and silicon oxide.
3 - Interview with Virginio Xavier of the Pelletizing Department at CVRD’s Fábrica Mine
Operation Unit (GAFOP).
4 - Idem.
5 - Idem.
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production and export of pellets has gained a prominent place in the
company’s results, making the product as important as raw iron ore.
3.2 CVRD and government policies
The 1950s marked Companhia Vale do Rio Doce’s entry into
the global iron ore market. The advances made this decade were
mainly the result of modernizing the company’s mine-railroad-port
complex and changing its pricing policy. In 10 years, the amount
charged per metric ton on an FOB basis doubled.6 And that wasn’t
all: CVRD’s markets diversified, it reformulated its commercial
policy, and former intermediaries were replaced by exclusive agents
in consumer markets. The new demands of global steelmaking were
reflected in the output and quality of Brazilian ore. In the financial
area, the company’s “pre-bankruptcy” status of the previous decade
was overcome – its debts (external and internal) were paid off and it
gained international credibility. CVRD started to make a profit and
finally began to grow.
During the short administration of Juracy Magalhães (19511952), the company’s main approach for the decade was
established, and these strategies were maintained by Francisco de
Sá Lessa (1952-1961) in the following years. The market-oriented
policies adopted gave CVRD increasingly similar characteristics to
those of a private company. The successful pursuit of efficiency
and profitability distanced the company from the twists and turns
typical of political games.
However, numerous changes to the country’s economic policy
were introduced by the governments that succeeded each other
following the end of the New State in 1945 until the end of the 1950s.
Brazil had four presidents during this period: Eurico Gaspar Dutra
6 - See Abranches, Sérgio; Dain, Sulamis. A empresa estatal no Brasil: padrões estruturais e
estratégias. Rio de Janeiro: Finep, 1978, unpublished academic paper, p. 53.
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75
Previous photograph:
mechanized facilities for
loading ore at the Paul
Quay at the Port of Vitória
in Espírito Santo.
From left to right: the Atalaia Quay in
Espírito Santo and President Getúlio Vargas,
campaigning for the 1950 election.
76
Top of this page: a pile
of iron ore from Itabira
at the Port of Ijmuiden
in the Netherlands.
Below: ore being unloaded
at the railroad stockyard
in Itabira, Minas Gerais.
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(until 1951), Getúlio Vargas (1951-1954), João Café Filho (1954-1955),
and Juscelino Kubitschek de Oliveira (1956-1961). Each of them had
a different view as to the participation of private capital in publicsector companies considered strategic, such as CSN and CVRD.
Throughout this period, the 1946 Constitution remained in force,
determining a reduction in state control of economic activities.
With regard to the mining regime, for example, the Charter of
1946 restored the principle of the 1934 Constitution according
to which concessions for exploiting mineral reserves would be
granted exclusively to Brazilians or companies constituted in the
country, guaranteeing preference to the landowner. The expression
“companies constituted in the country” used in Article 153, Section 3
was broad enough to permit the participation of foreign companies.
The 1946 Constitution’s orientation was in line with the liberal
tendency of the Dutra government (1946-1951), which favored
private companies and saw associations with foreign capital as the
best way of promoting the modernization of the Brazilian economy.
This was clearly reflected in CVRD’s conduct on the international
market, at least until 1951, when presidential elections once more
gave Getúlio Vargas the keys to the Palace of Catete.
Vargas returned to power in 1951, winning 3,849,040 votes –
48.7% of all votes cast. He had almost won an absolute majority
of the votes. In his first period as president, Vargas had resorted to
force to impose his policies, but now he had popular support – and
populism as a government practice. Campaigns such as “The oil is
ours” led the people out onto the streets. Brazil – following the end
of the Second World War, with a new Constitution, hosting the 1950
World Cup, and even electing Marlene as the “Queen of Radio” –
was now different. However, as the carnival song that served as the
slogan for Vargas’ campaign in 1951 put it, “the old man’s portrait”
had returned to the same place.
The euphoria of Vargas’ early days gradually gave way to
disbelief. Bombarded by reports of corruption, the president
isolated himself at the Palace of Catete. Even populist measures,
such as a 100% rise in the minimum salary announced in 1954,
caused less of a stir than before. In the field of mining policy,
where he had taken a hard line against the participation of private
companies, Vargas started to give way. After he committed suicide
on August 24, 1954, encouragement for the presence of foreign
capital in domestic mining companies gained even greater force.
The situation crystallized during the government of Café Filho and
was accentuated during Juscelino Kubitschek’s time in power.
3.3 More exports and new markets
At the start of the 1950s, the global iron ore market started to heat
up again. As of 1947, Europe began to overcome the severe depression
immediately following the war. Helped by an injection of money from
the United States, the European economy, and particularly that of
Germany, rebuilt its industries, and consequently its steel production.
At the same time, the Korean War (1950-1953) – between the United
States-supported South Korea and the Soviet Union-supported North
Korea – triggered an arms race, boosting demand for iron ore, a
fundamental raw material for the American weapons industry.
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77
In 1950, more than 80% of iron sold by Brazil was absorbed
by the American market. The concentration of sales to
the United States provoked a backlash in nationalist
sections of the press and the National Congress
View of the town of Itabira,
Minas Gerais, in the 1950s.
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Although Europe was experiencing a promising economic
moment, the United States remained the main customer for Brazil’s
iron ore exports. In 1950, more than 80% of the iron sold by the
country was absorbed by the American market. The concentration
of Brazilian iron sales to the United States provoked a backlash in
nationalist sections of the press and the National Congress, which
saw in this yet another indication of Brazil’s growing alignment with
American foreign policy. This perspective was further supported,
among other arguments, by CBRD’s effective financial dependence
on Eximbank.
Placed at the center of discussions, the company reacted to this
criticism. In its report of 1951, the directors claimed that, although
that year the United States had once again been its largest customer,
“the iron ore was freely sold to any country, and the company also
entered into deals with Canada, Germany, France, the Netherlands
and Belgium.”7
Another argument given by the nationalists was that the
company’s iron reserves, estimated at that time to be 15 billion
metric tons, should prioritize the supply of domestic rather than
foreign demand. This position was contested by CVRD’s president,
Juracy Magalhães, with the argument that there was not enough
demand in Brazil for all the iron ore extracted. According to
Magalhães, even if the country’s steel production growth rate were
to double (and it had already expanded by 341% in previous years),
by 1961 – ten years hence – Brazil would still only be consuming 6.8
million metric tons of ore.8 This quantity was well below estimated
national ore production for that year.
In fact, the main problem faced by CVRD at that time was
increasingly fierce competition on the global iron market. Growing
steel production, serving fundamentally to rebuild Europe after the
war, had obliged the leading steel companies to look for new sources
of iron outside their home countries. The United States, West
Germany, France, England and also Japan9 made heavy investments
in peripheral areas, contributing to an increase in the supply of iron
ore and other raw materials used to make steel.
In most cases, the new iron-producing countries were located
closer to the main consumer centers (the USA and Western Europe)
than Brazil, resulting in lower freight costs and a lower final price
of iron ore. The global club of iron producers was accepting new
members. Alongside the major, already established exporters, such
as Sweden and Canada – whose output rose, respectively, from 13.6
to 17 million metric tons between 1950 and 1953, and from 3.8 to
14.5 million metric tons between 1950 and 1955 – other countries in
Latin America, Africa and Asia now entered the scene. Venezuela’s
production increased from just 200,000 metric tons in 1950 to 2.2
million metric tons in 1953, and would reach 19.5 million metric
tons by 1960. Peru, which did not even feature in the statistics until
1952, produced 1 million metric tons in 1953, rising to 7 million in
1960. Liberia came from nowhere in 1950 to 1.5 million metric tons
in 1953 and 12.5 million metric tons in 1964. India, in turn, went
from output of 3 million metric tons in 1950 to more than 10 million
metric tons in 1960.10
Aware of the situation on the iron market, as of 1951 CVRD sought
to modernize the operations of its mine-railroad-port complex
and maritime transport system. Its target of exporting 1.5 million
metric tons, stipulated soon after Juracy Magalhães was appointed
president, was achieved in 1952 – but it was not enough. In 1953,
CVRD embarked on a vigorous policy to diversify its markets.
7 - See Companhia Vale do Rio Doce, Relatório de Diretoria correspondente ao ano de 1951
(Board of Directors’ Report for 1951), p. 7 (hereafter Board of Directors’ Report). According to
Sérgio Abranches and Sulamis Dain, op. cit., p. 47, in order to calm nationalist sentiment,
CVRD’s board was concerned to demonstrate its independence from the American market,
but in fact, for some years the company’s commercial policy was marked by efforts to
maintain or even expand its position in the United States.
9 - For Japan, the end of the Second World War meant the definitive loss of its colonies in
Asia, and since then the country began to seek other sources of raw materials. The first
of these investments was in Alaska, in pursuit of forestry resources. Terutomo Ozawa,
Multinationalism, Japanese style: The political economy of outward dependency. Princeton:
Princeton University Press, 1982.
8 - See Kury, Mário da Gama, op. cit., p. 41.
10 - Idem, ib., pp. 45-46.
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79
TABLE 1
CVRD’S EXPORTS OF IRON ORE, BY CONSUMING COUNTRY (METRIC TONS)
80
From left to right: aerial view of
Cauê Mine’s mineral deposits in
Itabira, Minas Gerais, in 1952,
and extraction of iron ore, also
in Itabira, in the same year.
Diversification of markets
The United States, CVRD’s traditional market, gradually lost ground
to Europe. By 1953, European customers together accounted for
63.6% of the company’s exports, while the United States absorbed
approximately 32%. The USA’s falling share can be explained by
a number of reasons. The pelletizing process had enabled the
industrial-scale consumption of taconite, a low-grade variety of
iron ore, and this allowed the United States to make greater use
of its own ore reserves, which until then had been considered of
insufficient quality (or too difficult to use). The end of the Korean
War (1953) and the preference of American steel companies to use
iron ore from their own mines in Liberia, Canada and Venezuela also
contributed to significantly reducing the United States’ demand for
Brazilian ore.
A crisis for Brazilian mining caused by the proliferation of
iron ore producers across the world was approaching. Given this
situation, worsened by a reduction in prices that led to a temporary
suspension of sales in 1953, CVRD intensified its policy of diversifying
its markets. In 1955, for the first time, Japan acquired iron ore
from the company. That year, CVRD’s output was consumed in 10
countries.11 More than just a commercial strategy, the expansion of
exports also began to be seen from a political perspective. Eastern
Europe definitively entered the scene as an iron consumer. The
expression “Iron Curtain” – used during the Cold War to describe
countries living under the communist regime – began to take on a
new meaning.
CVRD’s contact with Eastern Europe – established back in 1951,
with the supply of iron ore to Poland on a trial basis – did not go
unnoticed and was strongly fought by conservative sections of
the government and Congress. The American government also
criticized the initiative, alleging that the company’s decision
violated agreements signed by the United States and Brazil12 that
prohibited the sale of strategic materials to enemy countries.
Despite this pressure, CVRD signed a contract with Poland at the
record price of US$18.50 per metric ton on an FOB basis. In the midst
of ideological crossfire, the company’s management claimed that it
was a commercial transaction without any political implications.13
CVRD’s status as a state-controlled company facilitated its
activities in Eastern Europe, as government-to-government deals
were common practice in those countries. Accordingly, in 1954,
besides its regular exports to Poland, the company sent its first
shipment of iron ore to Czechoslovakia,14 and in 1957, Hungary
purchased Brazilian ore for the first time. In the same year, CVRD
came very close to reaching its target of exporting 3 million metric
tons per year (2,996,261 metric tons, to be exact).
12 - The agreements signed by both countries covered the Joint Brazil – United States
Economic Development Commission, the result of negotiations begun in late 1950
during the Dutra government, with the aim of funding a program to reequip the
Brazilian economy’s infrastructure sectors. The commission was officially established on
July 19, 1951 and ended its work on July 31, 1953. See Calicchio, Vera, “Comissão Mista
Brasil-Estados Unidos,” DHBB, available at: <http://www.fgv.br/CPDOC/BUSCA/Busca/
BuscaConsultar.aspx>.
13 - See Abranches, Sérgio and Dain, Sulamis, op. cit., p. 62.
11 - Idem, ib., pp. 46, 51.
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14 - See Kury, Mário da Gama, op. cit., p. 49.
COUNTRY
1951
1952
1953*
1954
1955
1956
1957
1958
1959
1960
United States
1,051,998
1,054,181
448,305
555,880
1,022,035
1,024,563
1,158,695
702,367
994,661
1,234,421
%
81.28
68.85
31.88
35.02
44.47
44.42
39.06
31.25
30.50
28.91
Canada
124,268
124,705
37,837
60,204
30,046
61,231
147,525
35,770
85,627
152,501
%
9.60
8.14
4.11
3.79
1.31
2.66
4.97
1.59
2.63
9.57
England
93,432
91,340
-
467,616
552,944
562,807
710,563
571,143
565,941
677,769
%
7.22
5.97
-
29.46
24.06
24.40
23.96
25.41
17.35
15.87
The Netherlands
-
42,897
-
-
41,285
51,985
43,676
54,835
132,859
99,451
%
-
2.80
-
-
1.79
2.25
1.47
2.44
4.07
2.33
Belgium
24,663
66,809
-
-
-
3,048
-
-
-
-
%
1.90
4.36
-
-
-
0.13
-
-
-
-
France
-
28,255
-
49,552
14,326
12,746
43,988
24,423
59,317
107,179
%
-
1.85
-
3.12
0.62
0.55
1.48
1.09
1.87
2.51
West Germany
-
99,436
-
249,971
288,674
366,357
402,014
269,117
516,719
910,667
%
-
6.49
-
15.75
12.56
15.89
13.55
11.97
15.84
21.33
Austria
-
23,502
-
-
-
9,295
-
-
-
-
%
-
1.54
-
-
-
0.40
-
-
-
-
Czechoslovakia
-
-
-
80,374
195,851
81,208
156,852
187,518
373,479
359,484
%
-
-
-
5.07
8.52
3.52
5.29
8.43
11.45
8.42
Poland
-
-
-
113,428
97,483
34,827
98,895
313,225
295,110
290,964
%
-
-
-
7.15
4.24
1.51
3.33
13.94
9.05
6.82
Italy
-
-
-
10,160
46,707
49,910
52,273
16,954
28,814
51,167
%
-
-
-
0.64
2.03
2.17
1.76
0.76
0.88
1.20
Hungary
-
-
-
-
-
-
17,374
21,480
13,411
-
%
-
-
-
-
-
-
0.59
0.96
0.41
-
Switzerland
-
-
-
-
-
-
1,524
2,033
-
2,540
%
-
-
-
-
-
-
0.05
0.09
-
0.06
Finland
-
-
-
-
-
-
1,016
-
-
-
%
-
-
-
-
-
-
0.03
-
-
-
Japan
-
-
10,114
-
9,154
40,403
131,866
46,532
195,495
383,474
%
-
-
0.72
-
0.40
2.10
4.46
2.07
6.00
8.98
TOTAL
1,294,361
1,531,125
1,406,245
1,587,185
2,298,505
2,306,160
2,966,261
2,247,550
3,261,453
4,269,613
(*) Exports to European countries in 1953 are not broken down in source documents. Together, they amount to 889,989 metric tons, equivalent to 63.29% of CVRD’s entire sales of iron ore.
Source: Board of Directors’ Reports, 1951-1960.
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81
Previous page: extraction
of ore at Dois Córregos
Mine in the town of Itabira,
Minas Gerais, in 1952.
Left: the Atalaia ore quay
in Vitória, Espírito Santo.
82
By the late 1950s (and unlike at the beginning of the decade),
Companhia Vale do Rio Doce was now solidly positioned in
different markets, and no longer depended on a single customer.
In 1960, the United States remained its biggest client, but its share
of the company’s sales had fallen to around 29%, followed by West
Germany (21%), England (16%), Japan (9%) and Czechoslovakia (8%).
While diversifying its markets and increasing its foreign sales,
CVRD also significantly increased its share of Brazil’s iron ore
exports over the 1950s, especially in the first five years, if compared
with the previous decade. The following chart shows these figures.
CHART 1
CVRD’S SHARE OF BRAZIL’S TOTAL IRON ORE EXPORTS (METRIC TONS)
YEAR
CVRD’S EXPORTS
BRAZIL’S EXPORTS
CVRD/BRAZIL
(%)
1951
1,294,361
1,320,007
98.1
1952
1,531,125
1,560,814
98.1
1953
1,406,245
1,526,494
92.1
1954
1,587,185
1,678,445
94.6
1955
2,298,505
2,564,600
89.6
1956
2,306,160
2,744,882
84.0
1957
2,966,261
3,536,728
83.9
1958
2,247,550
2,823,195
79.6
1959
3,261,453
3,957,570
82.4
1960
4,269,613
5,160,266
82.7
Sources: Board of Directors’ Reports, 1951-1960 (for CVRD’s exports); Anuário Estatístico do Brasil (Statistical Yearbook of Brazil), 1953, p. 280; 1955, p. 295; 1958, p. 295; 1961, p. 225 (for Brazil’s exports).
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Despite allocating the overwhelming majority of its output to
the international market, CVRD did not neglect its domestic market.
Keen to reduce its dependence on exports and consequently become
less exposed to fluctuations in the global economy, the company
sought to participate in the Brazilian steel industry’s expansion. As
of 1959, it owned stakes in four steel companies: Usinas Siderúrgicas
de Minas Gerais (Usiminas), Companhia Siderúrgica Nacional (CSN),
Companhia Siderúrgica Paulista (Cosipa), and Companhia Ferro e
Aço de Vitória (Cofavi).15
CVRD was the third biggest shareholder in Usiminas, a company
established in 1956, owned 60% by Brazilian capital and 40% by
Japanese entities. CVRD was responsible for “supplying fine ore from
Itabira at a reduced price; providing transportation between Itabira
and Acesita; granting maximum discounts possible [on the VitóriaMinas Railroad] to transport coal and materials; and contributing
to the transportation of construction materials and equipment for
the plant.”16 Construction work on Usiminas’ steel mill, situated in
Ipatinga, Minas Gerais, began in August 1958. When completed, the
plant was expected to produce 500,000 metric tons of steel per year.
3.4 Modernization of the
mine-railroad-port complex
It is impossible to think about expanding exports without
associating this with port modernization. The heavy investment
undertaken by CVRD to enhance operating conditions throughout
its mine-railroad-port complex was fundamental to achieving its
1952 export target of 1.5 million metric tons.
The company’s Annual Report of 1950 listed the construction
work already completed. At Cauê Mine, the company installed two
electric percussion drills, two electric air compressors and an electric
excavator to break up and directly load large blocks of hematite.
Buildings and structures for crushing, screening and mechanical
transportation (conveyor belts) to the railroad yard were completed,
as well as a drill bit reconditioning workshop. This set of upgrades
enabled output of 1,000 metric tons of ore per hour.17
On the Vitória-Minas Railroad (EFVM), operating productivity
was improved by completing a tunnel, 21 metal bridges, more than
10,000 meters of realignments, and sections of culverts. However,
some serious problems remained. As the track bed lay on sand,
accidents were constant, especially during the rainy season.
Although the ballasting of a 200-kilometer section had been started
in 1950, there was still a lot to do in 1952. The company’s report
for the latter year states that, due to “unusually heavy rain [...],
the sections of track still being upgraded suffered considerably,
favoring the occurrence of accidents.”18
Major construction work also took place in the port area. In
1950, the Atalaia Quay was completed, equipped with a conveyor
belt from the silo to ships’ holds. In addition, the company built a
warehouse capable of storing 90,000 metric tons of iron ore, enough
to load nine ships.19
Once it had achieved its target of 1.5 million metric tons per
year, CVRD’s management, enthused by the figures, decided to
implement new projects and establish a new annual export target
of 3 million metric tons for 1957. Integrated mine-railroad-port
logistics were key to this project.
15 - Idem, ib., p. 55.
17 - See the Board of Directors’ Report, 1950, pp. 5-7.
16 - See Gomes, Francisco de Magalhães. História da siderurgia no Brasil. Belo Horizonte/São
Paulo: Itatiaia/USP, 1983, p. 335.
18 - See the Board of Directors’ Report, 1950, p. 7.
19 - Idem, ib., p. 7.
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83
In the mid-1950s, the Vitória-Minas Railroad had a
series of problems capable of derailing any major
export project. To rectify this situation, CVRD
invested heavily in infrastructure
To mechanize extraction, processing and transportation20 of ore
from the mines of Conceição and Dois Córregos (at this point in
time, these processes were only mechanized at Cauê Mine), plans
were made to install aerial cables to transport ore from the mines
to the storage silo and train car loading area. In addition to loading
stations located next to the mines, a facility designed to move ore to
the loading silo would be constructed. Another extremely important
initiative involved transforming the mines of Conceição and Dois
Córregos – until then operated by contractors using manual, lowproductivity methods – into operations run directly by CVRD, which
once again sought to mechanize the work process. New mining and
transport equipment was installed at Cauê Mine, enabling higher
output. There were also plans to build a small hydroelectric power
plant, to be completed in 1958, as a solution to problems caused by
a shortage of power in the area.
To connect the mines to the sea, there was the EFVM. In the
mid-1950s, it still had a series of problems capable of derailing
any major export project. To rectify this situation, CVRD invested
heavily in infrastructure. The strategy entailed remodeling the
railroad up to the locality of Ana Matos (now called Mário Carvalho
Station, in Timóteo, Minas Gerais), replacing the tracks with heavier
ones ordered from CSN in 1955, and acquiring new ore cars (making
a total of 650) and five diesel-electric locomotives.
84
Linhares: from railroad crossties to environmental preservation
Work on the EFVM made it necessary for CVRD to acquire large
numbers of wooden railroad crossties. However, the progressive
20 - Information about the construction work to be undertaken at the mines, on the
railroad and at the port was taken from Companhia Vale do Rio Doce, President’s Office,
Subsídios para o comparecimento do presidente da CVRD à CPI do caso Hanna, pp. 8-11 (hereafter
Subsídios caso Hanna).
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destruction of the region’s forests arising from intensive exploitation
by the logging and charcoal industries was a cause for concern.
In 1954, CVRD decided to invest in planting forests to produce
crossties. At the suggestion of the EFVM’s superintendent, Eliezer
Batista, the company started to buy land in Linhares, Espírito Santo
that by the mid-1960s would form what is now known as the Vale
Natural Reserve. Years later, Eliezer revealed that his idea had
always been to preserve the region’s forests.
“To obtain approval from Vale do Rio Doce’s board, we needed to
say that the trees would be used to produce railroad crossties. I was
at Vale do Rio Doce for a long time, and not a single crosstie was
taken from that forest.”21
This initiative22 may be considered CVRD’s first business activity
outside the mining sector and a milestone in environmental
preservation. Years later, in the 21st century, the forest would be
declared a Biosphere Reserve by Unesco.
At the port, due to the limited storage capacity at Atalaia, plans
were made to build a new silo to store 110,000 metric tons of ore. The
railroad cars would be unloaded in a rotary car dumper installed on
the slope to the west of Atalaia Hill. After being unloaded, the ore
would be taken by conveyor belt to an auxiliary silo, and then by
another conveyor belt to the loading silo at Atalaia.
The target of 3 million metric tons established in 1953 was
achieved in 1957, although not all the planned construction work
had been completed. In the same year, the federal government, as
part of President Kubitschek’s Target Program, set a new export
target for the company, to be achieved by 1960-1961: 6 million
metric tons per year.
21 - Conversas com Eliezer, Luis Cesar Faro, Carlos Pousa, Claudio Fernandez. Ed. Insight
Engenharia de Comunicação, 2005.
22 - Regarding this subject, see Cury, Mário da Gama, op. cit., p. 50.
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85
Previous photograph: the Vitória-Minas Railroad.
Above: the EFVM’s diesel-electric locomotives
arrive at the Port of Vitória in Espírito Santo.
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88
Aerial view of the Maracanã Stadium,
built for the 1950 World Cup. On the
opposite page, you can see a production
line making Dauphine and Aero-Willys
cars in the 1960s.
3.5 The Target Program and Document 18
Juscelino Kubitschek de Oliveira (“JK”),23 born in Diamantina,
Minas Gerais, was elected president of Brazil with 36% of the valid
votes cast, enough to win, but not a resounding victory. Elected as
part of a coalition between the Brazilian Workers’ Party (PTB) and
the Social Democratic Party (PSD), he was not completely accepted
by the more conservative sections of society. His strategy to change
this situation was to immediately establish a program of targets.
This envisaged foreign investment, accelerated industrialization
and a shift in investments inland. There was also a plan to move the
country’s capital from Rio de Janeiro to the central plateau region,
as indeed occurred, with the inauguration of Brasília in 1960. The
plan was to be implemented before the end of his term in office.
Hence the slogan of his time in power: “Fifty years in five.”
Brazil had only recently experienced the trauma of Vargas’
suicide, and hoped to leave this dark period behind it. Brazil was
shortly to win its first World Cup, João Gilberto was creating the
first chords of bossa nova on his guitar, and in Rio de Janeiro, girls
were discovering the bikini, a new beach fashion that was said
to be destined for great success. Juscelino understood this and
made his government a set of dreams, cultural investment and
major construction projects. His strategy required immediate
investment, and so partnerships, especially international ones,
were indispensable.
The Target Program was implemented by the Development
Council, an entity created by JK especially for this purpose. The
council was divided into working groups that, in some cases, gave
rise to executive groups. Target 26, related to iron ore exports, was
examined in detail by two of these groups, in accordance with a
resolution adopted by a high-level study commission led by Finance
Minister José Maria Alkmin. The commission members included the
23 - Concerning JK, see Cohen, Marleine. JK, o presidente bossa-nova. Rio de Janeiro: Editora
Globo, 2001.
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director of the National Mineral Production Department (DNPM),
Mário da Silva Pinto; the president of CVRD, Francisco de Sá Lessa;
the director of the National Economic Development Bank (BNDE),
Roberto Campos; and the secretary of the Development Council
and president of the BNDE, Lucas Lopes.
In July 1957, Lucas Lopes submitted a report to the Minister of
Finance containing the results of studies conducted by the two
working groups. The first study assessed the global iron market
and Brazil’s exportable reserves. The second set out suggestions
for expanding Brazilian ore exports. The report came to constitute
Document 18 of the Development Council.24
Document 18’s appraisal of the global iron ore industry
highlighted the opportunities Brazil had to increase its share of
the market, which in the late 1950s was confined to 1% of total
consumption. According to calculations by technicians from the
United Nations, Brazil had 15% of the world’s iron reserves – 85
billion metric tons – and 37% of this total was in Minas Gerais alone.
In addition, studies conducted by the DNPM and the U.S. Geological
Survey demonstrated that Brazilian iron ore was compact and pure,
with high metal content, warranting higher prices on the market.
On the other hand, the sale of Brazilian iron ore faced a number of
adverse factors, including the considerable distance between mines
and ports, making land transport more expensive. Furthermore,
the country was far from the main regions of consumption (the
United States, Western Europe and Japan). Finally, the United
States had been investing heavily in the mining, transportation and
concentration of taconite on its own soil, reducing the American
steel industry’s need for imports.
Based on domestic and international factors, Document 18
considered it feasible to expand Brazil’s iron exports to 8 million
metric tons per year by 1960. CVRD would be able to sell 6 million
24 - Information related to Document 18 was taken from the summary section of the
document itself (pp. 1-13) and from Part II – “Resposta ao questionário apresentado” (pp.
1-8), hereafter referred to, respectively, as Document 18 (summary) and Document 18 (Part II).
metric tons, and the remaining 2 million would be produced by
private mining companies in the Paraopeba Valley in Minas Gerais.
In the long term, it was estimated that it would be possible to
export between 25 and 30 million metric tons of iron per year by
around 1975.
In order for these targets to be achieved in the short and long
term, certain assumptions were deemed essential: firstly, all types
of ore extracted would be exported, including fines and siliceous ore
(after being processed), together with compact ore; and secondly,
due to the size of the undertaking, a combination of foreign capital
(loans or risk capital) and domestic capital (public and private)
would be necessary. The government would be responsible for
promoting and coordinating efforts to this end. The association
with foreign capital could result in the establishment of a new
company, and it was recommended that CVRD lead this initiative,
as far as its financial resources would allow it.
Document 18 also referred to the need not only for growing
exploitation of iron reserves for export, but also to expand
production of steel and byproducts, and thereby raise the weighting
of steel products as a share of total sales.
According to estimates contained in the report, an investment
of nearly 7 billion cruzeiros (equivalent to around US$140 million)
would be required to raise Brazilian iron exports in the short term.
Plan number 1, concerning the expansion of CVRD’s output to 6
million metric tons, was budgeted at 1.41 billion cruzeiros, to be
spent mainly on replacing the EFVM’s tracks and locomotives
and purchasing special equipment. Plan number 2, relating to the
Central do Brasil Railroad and the Port of Rio de Janeiro, included
acquiring 25 locomotives, expanding the wharf, undertaking
dredging work, and purchasing loading and unloading equipment,
at a cost of 730 million cruzeiros.
Document 18 also recommended revising mining legislation
to create incentives to export iron ore on a large scale. It also
established conditions and limits for seeking funding and/or direct
participation involving foreign capital. In short, the intention was to
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89
Opposite page: President Juscelino
Kubitschek at the Palace of Catete in
Rio de Janeiro, addressing the people
on the radio and defending his two
years in power, in January 1958.
expand the means of attracting foreign capital, while safeguarding
national security interests, above all in terms of transportation
and access. The document made its point explicitly: “The need for
external financial resources is indisputable, given the significant
amount of investment required for large-scale exports.” It added:
“It is necessary to have a policy that guarantees foreign capital
fair remuneration and satisfactory security in terms of reasonable
interest payments and reimbursement.”25
In line with a suggestion contained in Document 18, President
Kubitschek created the Iron Ore Export Group (Grupo de Exportação
de Minério de Ferro, or GEMF). Consisting largely of the same
people serving on the Development Council’s study commission,
and coordinated by BNDE representative João Batista Pinheiro, the
GEMF’s core task was to implement the resolutions of Document 18.
Given its clearly liberal orientation, appealing strongly for
foreign capital, Document 18 provoked intense controversy in the
press and the National Congress, which went as far as to describe it
as “scandalous and intolerable.”26 Another contentious case would
emerge at the start of 1958 when, due to favorable prospects on
the international iron market and the new possibilities for foreign
capital provided by the development-oriented policy of the JK
government, the Hanna Mining Company entered Brazil, acquiring
a 52% interest in the St. John d’El Rey Mining Company on the
London Stock Exchange.
St. John had mined gold in Minas Gerais since 1830, mainly at its
famous Morro Velho Mine, but what interested Hanna was the fact
that the English company also owned extensive iron ore deposits in
the Iron Quadrangle region, in the Paraopeba River Valley – a region
where improvements were planned in Document 18.
The project to enable 6 million metric tons per year to be
exported entailed dredging the Port of Vitória. Studies showed
that, by conducting dredging to increase the depth of water, the
port would be able to receive ships of up to 40,000 metric tons in
capacity, up from the existing limit of 10,000 metric tons.27
90
25 - See Document 18 (Part II), p. 8.
26 - See Pereira, Osny Duarte, Ferro e independência: um desafio à dignidade nacional. Rio de
Janeiro: Civilização Brasileira, 1967, p. 130.
27 - Information about what the company needed to do to achieve the target of 6 million
metric tons was taken from Subsídios caso Hanna, p. 12.
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3.6 Advances in iron ore processing
Alongside construction work on the mine-railroad-port
complex, CVRD was also concerned to diversity the types of iron
ore it produced and to conduct research to make use of the fine and
ultrafine ore that was accumulating at its mines.
Cauê Mine produced a compact hematite of excellent quality.
Its chemical and physical characteristics and its hardness – which
facilitated crushing it into lumps of iron between 6.35 mm and 50
mm across – were ideal for direct use in Siemens-Martin or openhearth blast furnaces.28 The crushing operation, however, created
the problem of waste ore – particles smaller than half an inch
in size called fines and ultrafines. Due to their different particle
size characteristics from those of lump ore, fines and ultrafines
could not be directly used in blast furnaces because they made the
charge (raw material inputs) impermeable, thereby blocking the
flow of rising gases.
The accumulation of fines and ultrafines in Cauê was a
consequence of the intensive exploitation of the mine. Over time,
the harder ore – hematite – became scarcer, and a more brittle ore,
itabirite, was left.29 This fact, together with the growing obsolescence
of mine infrastructure, contributed to a declining quality of ore
produced by CVRD, which led customers to complain in 1953.30
The emergence of new lump ore producers on the international
market and the ever greater accumulation of fines and ultrafines
led the company to review its production and processing methods.
In 1952, the Mines Department, with the assistance of English
technicians, conducted studies to make use of fines by means
of sintering, meaning the agglomeration “of an infinite number
of miniscule ore particles into adequately sized pieces with
28 - See the Board of Directors’ Report, 1951, p. 9.
29 - “Itabirite” rock was named by German geologist and mineralogist W. L. von Eschwege
at the start of the 19th century. Based on his work in the Iron Quadrangle region, this
indigenous term (“itabirito” meaning red-striped rock), which lent its name to the
mountain peak framing the town of Itabirito, was incorporated into geological vocabulary.
Itabirite is a flaky metamorphic rock made of grains of quartz and flakes of micaceous
hematite. See Renger, Friedrich E. “O quadro geognóstico do Brasil de Wilhelm Ludwig von
Eschwege: Breves comentários à sua visão da geologia no Brasil.” Revista Geonomos, UFMG,
no. 13, pp. 91-95, 2005.
30 - See Rangel, Orlando, A Companhia Vale do Rio Doce e o mercado de minério de ferro. Talk
given at the Augusto Barbosa Metallurgical Studies Center, at the Ouro Preto Federal
Mining School, on June 11, 1966, unpublished academic paper, p. 18.
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91
Above: in June 1959, the first ore shipment is loaded
at the Paul Quay in Vitória, Espírito Santo. Opposite
page: a locomotive full of goods arrives at the quay.
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94
Juracy Magalhães
Juracy Magalhães (Fortaleza, Ceará, 1905 – Salvador,
Bahia, 2001) 1 was one of the leading organizers of the
Revolution of 1930 in northeast Brazil. Following the
victory of the revolutionary movement, he entered politics.
He served as governor of the state of Bahia from 1931 to
1937, when he opposed the coup that established the New
State regime, and then resumed his military career. With
the return of democracy to the country in December 1945,
he was elected a deputy representing Bahia at the National
Constituent Assembly, for the National Democratic Union
(União Democrática Nacional, or UDN) party. In February
1951, at the personal invitation of the president of Brazil,
Getúlio Vargas, he took over as president of Companhia
Vale do Rio Doce, where he remained until December
1952. During this period, he implemented new human
resource management methods and became known for
demanding strict punctuality among employees, whether
in terms of working hours or the completion of studies and
construction work according to schedule. His railroad plans
were also key to the expansion and efficiency of the EFVM.
Later, Juracy Magalhães served as Brazil’s ambassador to
the United States from 1964 to 1965. Following this, he
was Brazil’s Minister of Justice (1965-1966) and Minister of
Foreign Affairs (1966-1967).
quality characteristics compatible with their use in steelmaking
processes.”31 This agglomeration was obtained through hightemperature thermal processing, in which powdered limestone,
coke and silica was added to iron ore fines. This mixture, after being
homogenized, was placed on a grid where, through the combustion
of coke, it formed sinter.
Alongside these studies, in 1956 the company made two
shipments of raw fines on a trial basis. The exportation of fines was
one of the main reasons why CVRD, through an agreement with the
state government of Espírito Santo, built a new wharf at the Port of
Vitória, called the Paul Quay. Opened in June 1959, the Paul Quay
and its mechanized loading equipment made it possible to start
regular exports not only of fines, but also of a new type of ore, called
run-of-mine (meaning raw, unprocessed mined material as it leaves
the mine). In a short time, there was a growing trend for exports
of fines to rise at the expense of lump ore,32 whose production was
becoming increasingly expensive.
The company’s technicians also conducted research to make use
of ultrafines. Unsuitable for sintering, ultrafines required another
kind of processing, called pelletizing. This process, as mentioned
previously, was being developed in the United States. Pelletizing
consisted of using a thermal process to agglomerate ultrafine iron
ore powder into balls or pellets, of an appropriate diameter (between
8 mm and 18 mm) and with suitable quality characteristics to
enable them to be fed directly into blast furnaces.33
Given the good results obtained by the Americans with pelletizing
taconite, CVRD decided to undertake studies using itabirite. A flaky
metamorphic rock with iron content varying between 30% and 55%,
itabirite was starting to become the predominant ore (its reserves
were estimated at 27 billion metric tons) as the exploitation of the
compact hematite reserves of Cauê advanced. In December 1956, the
Fund for Studies and Research to Make Use of the Itabirite of Minas
Gerais was established, sponsored by CVRD and the Development
Council, an entity reporting directly to the President of the Republic.
CVRD and the Development Council each contributed US$50,000
to this fund. With regard to the research activities, they involved
both CVRD and the Armour Research Foundation of the Illinois
Institute of Technology (Chicago, USA).34 This initiative by CVRD was
supported by the federal government, which decided to pay for 50%
of the cost of these studies. In March 1958, the preliminary results of
31 - See Revista CVRD, no. 16, June 1984. The sintering process, developed at the end of the
19th century, only began to be widely used after the Second World War. In 1958, the Soviet
Union produced around 50 million metric tons of sinter, and the United States, 35 million
metric tons.
32 - See Kury, Mário da Gama, op. cit., pp. 51, 55.
33 - See Revista CVRD, no. 16, June 1984, n.p.
1 - See “Magalhães, Juraci,” DHBB, vol. 3, pp. 3, 450-3, 451 and Faro, Luiz Cesar,
Pousa, Carlos and Fernandez, Claudio. Conversas com Eliezer. Rio de Janeiro: Ed.
Insight Engenharia da Comunicação (targeted distribution), 2005.
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34 - See the National Archives, Fundo Conselho do Desenvolvimento, CD-0/104/57
(correspondence from the secretary general of the Development Council, Lucas Lopes, to
the president of CVRD, Francisco de Sá Lessa).
Opened in June 1959, the Paul Quay made it possible
to start regular exports of fines, thanks to the
installation of mechanized loading equipment
the “Techno-Economic Study of Brazil’s Itabirite Iron Ore Deposits,”
presented to the Development Council, “were so encouraging that
the company immediately planned to produce 4 million metric tons
per year of itabirite concentrates, raising CVRD’s third production
target from 6 million to 10 million metric tons per year.”35
The research into the use of itabirite was the starting point for
the establishment, in April 1960, of the Vatu Steel Company, CVRD’s
first subsidiary. (“Vatu” was the indigenous name for the Doce
River.) With paid-up capital of 600 million cruzeiros, Vatu had the
purpose of processing ores, as well as manufacturing and selling
sponge iron.36
3.7 Financial recovery and a radical
change in sales policy
Shortly after becoming president of CVRD in 1951, at the
invitation of President Getúlio Vargas, Juracy Magalhães gave a
scathing report on the state the company found itself in. He simply
quoted the figures: “We owe 26 million dollars to Eximbank, 300
million cruzeiros to Banco do Brasil, 100 million cruzeiros to Caixa
Econômica and another 30 million cruzeiros to the Company
Employee Association. We are behind on our insurance payments,
and our suppliers have not been paid for a long time.”37
The situation was serious. When they left the company in 1949,
American directors Robert K. West and Howard Williams defined its
situation as “pre-bankruptcy.”38 Despite the unfavorable numbers,
CVRD knew how to position itself on the international market,
which was buoyant as a result of demand caused by the Korean
War. Over the course of the 1950s, the company not only paid back
its debts, but also undertook new investments.
One can say that the company’s financial recovery was triggered
by the pricing policy implemented in 1952 by Juracy Magalhães. 39
Informed that there was a substantial difference between the
prices paid to CVRD (US$8 per metric ton on an FOB basis) and
those charged by traders selling Brazilian ore in the USA (US$14),
Juracy proposed raising the price charged per metric ton to US$14.
This initiative went against the interests of the American groups
that brokered sale and purchase operations. Counting on the
support of Eximbank, CVRD’s main creditor, they put pressure on
the Brazilian government to intervene in the company, forcing it
to review its prices.
Despite this pressure, Juracy maintained his position. It was a
decisive moment for the company. After three months in which
not a single purchaser appeared, CVRD finally signed a contract
based on US$14 per metric ton with American company Republic
Steel. The sale of 300,000 metric tons of iron at this price earned
the company US$4.2 million, making it possible to make its loan
repayments and invest in projects required for its growth.
Also in 1952, CVRD made a deal with Banco do Brasil to pay
off a loan taken out in the mid-1940s, by making 102 monthly
installments of 4 million cruzeiros. In 1956, the company paid back
Eximbank’s US$14-million loan 13 years early. Another loan, this
one for US$900,000, soon after raised to US$1.5 million, granted by
Eximbank to fund the purchase of diesel locomotives, was paid off
six months before the deadline.40
35 - See Kury, Mário da Gama, op. cit., p. 53.
36 - See Rangel, Orlando, op. cit., pp. 16-17. The shareholder composition of Vatu was as
follows: CVRD – 92.97%; CVRD employees – 6%; CSN – 0.33%; and others – 0.03%.
37 - See Magalhães, Juracy, Minhas memórias provisórias. Rio de Janeiro: Civilização Brasileira,
1981, p. 131.
38 - Reading the report, which was delivered personally by President Getúlio Vargas,
Juracy Magalhães considered it by definition to be biased, since the diagnosis it contained
was committed to the Americans’ interests. See Abranches, Sérgio and Dain, Sulamis, op.
cit., p. 63.
39 - Information about CVRD’s new pricing policy was taken from Juracy Magalhães, op.
cit., pp. 131-132.
40 - See Abranches, Sérgio and Dain, Sulamis, op. cit., pp. 57-79.
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95
Previous photograph:
the president of CVRD,
Juracy Magalhães
(wearing a dark suit).
96
97
To the right: the VitóriaMinas Railroad. Next page:
ore being shipped out at the
Paul Quay in Vitória, Espírito
Santo, in September 1959.
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Opposite page (top): the ore
quay at the Port of Vitória in
Espírito Santo. Opposite page
(bottom): the president of CVRD,
Francisco de Sá Lessa (wearing
glasses), at a meeting.
98
CVRD’s financial recovery expanded its scope for negotiation.
The loans from Eximbank – for US$4 million and US$12.5 million
to finance the company’s expansion programs in 1953 and 1957 –
were revised on new terms.41 It was agreed that the debts would be
amortized based on a commitment of 15% of the value of exports.42
There were other signs of improvement in CVRD’s financial
situation. In 1951, it paid the first ever dividend in its history,
providing a 6% yield – although restricted to the company’s
preferred shares. Two years later, the first bonus was paid to all
employees. In 1954, the company paid a dividend to holders of its
common shares as well. CVRD was gaining more credibility and
strength on the market.
The following year, in accordance with a statutory determination
obliging CVRD to allocate part of its profits to promote the economic
development of the area where it operated (70% in Minas Gerais and
30% in Espírito Santo), the company began to transfer resources to
the Fund for the Improvement and Development of the Doce River
Zone (FMDZRD).43
Among the factors behind CVRD’s transformation, one in
particular was fundamental, as it provided the commercial
transparency indispensable for operations on the international
market: a radical change in its sales policy.
Until then, the company’s sales were made from its Rio de
Janeiro office by a large number of importers and traders, some
of doubtful reputation, confusing consumers by quoting different
prices. Many of the offers made were merely negotiating tricks to
41 - In fact, the loan that the company requested from Eximbank in 1957 totaled US$24
million. Only US$12.5 million was released in 1959.
42 - See Abranches, Sérgio and Dain, Sulamis, op. cit., p. 59.
43 - See Kury, Mário da Gama, op. cit., p. 43 and CVRD, Serviço de Relações Públicas,
Companhia Vale do Rio Doce 1942-1967, n.p. Between 1955 and 1965, the company invested
more than 1.2 billion cruzeiros in the fund.
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Our History
lower the prices paid, frequently not come to fruition when the
time came to sign the contracts. This harmed CVRD’s prestige, and
once customers knew that various traders were selling its ore, they
would withdraw, waiting for a substantial reduction in price.
Concerned with this situation, as of 1954 CVRD started to establish
direct contact with the steel companies that consumed its ore. The
company’s agents were exclusive, eliminating intermediation by
numerous competing traders. The following agents were selected
to handle the company’s sales: British & European Sales Ltd., based
in London, covering Canada, Great Britain and Belgium; Société
Anonyme d’Importation (SADI), based in Lausanne, Switzerland,
covering continental Europe (except Belgium); and Cleveland Cliffs
Iron Company, based in Cleveland, covering the United States. Sales
to Japan and South America continued to be handled directly by
CVRD from its Rio de Janeiro office. In the case of Japan, due to
demands from purchasers, deals were brokered by the country’s
trading companies.44
Another major improvement introduced by the new commercial
policy was better discipline in the use of the ore quay. The former
traders did not concern themselves with aligning sales with
operating conditions at the port. As a result, it was common for
too many ships to arrive at the same time, while at other times the
quay would be completely idle. This lack of planning led to constant
complaints from customers, and supply delays meant that the
company often had to pay fines.45
44 - See Kury, Mário da Gama, op. cit., p. 48. It is worth noting that cutting out these
intermediaries in the United States and Europe “also meant granting control of sales of its
[CVRD’s] ore to just three companies, which monopolized its sales in the respective areas.”
See Fernandes, Francisco do Rego (org.), op. cit., p. 29.
45 - See Kury, Mário da Gama, op. cit., pp. 48-49.
Francisco de Sá Lessa
Francisco de Sá Lessa (Diamantina, Minas Gerais, 1887
– Rio de Janeiro, 1977) 1 was 65 years old when appointed
president of Vale, and he was the longest-serving president
in the company’s early years, holding the position from
December 1952 to March 1961. Sá Lessa was a qualified
civil engineer with a postgraduate diploma in Industrial
Chemistry from the Polytechnic School of Rio de Janeiro,
and his background closely reflected his management
profile. During his time running CVRD, Brazil had three
different presidents, and the company overcame a number
of crises. CVRD began to modernize its ports, it invested
in iron ore processing, it won new markets (especially in
Germany and Eastern Europe) and, in a bold move for the
time, it opened its first offices abroad. When he stood
down as president, the company had a strong name on
the international market.
Between November 1955 and March 1956, while working
as president of CVRD, Sá Lessa also served as interim mayor
of the Federal District of Rio de Janeiro, by appointment of
the President of the Republic, Nereu Ramos.
1 - See “Lessa, Sá,” DHBB, vol. 3, p. 3,102, and “Conheça todos os presidentes da
história da Vale” (Learn about all the presidents in Vale’s history), Exame magazine, April 5, 2011.
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Our History
How green is my valley
In the 1950s, when CVRD began to purchase areas of Atlantic Forest in Espírito Santo, its intention was to harness
them to make railroad crossties for the EFVM.1 Later, the company realized that it was possible to buy timber from other
sources and for a lower cost. It was a kind of “green light.” The passing of time – and the growing ecological awareness
that came with it – resulted in the original timber-production plan being transformed into one of the most successful
preservation and sustainability initiatives in the world. Vale’s crossties now come from elsewhere – and the reserve in
Linhares, now called the Vale Natural Reserve, shows that the company’s environmental policy is on the right track.
Covering approximately 22,000 hectares, the Vale Natural Reserve is one of the largest remaining expanses of
tabuleiro (coastal lowland) forest, one of the most endangered habitat formations in Brazil’s Atlantic Forest. In 2008,
UNESCO declared the site to be an “advanced” area of the Atlantic Forest Biosphere, given its importance to flora
and fauna conservation. The reserve is now an immense botanical garden, emphasizing research and the discovery
of new animal and plant species, and producing more than 3 million saplings a year.
As of 2011, scientists working at the reserve had cataloged over 3,000 plant species, 1,460 types of insects,
179 spider species, 26 fish species, 66 species of amphibians, 69 reptile species, and 105 species of mammals. The
reserve is also home to 380 bird species, corresponding to approximately 20% of the total found in Brazil.2 The
reserve in Linhares is framed by the Doce River (which gave its name to the company), whose mouth is located in
Regência, a few kilometers from the edge of the forest.
Besides functioning as a center of excellence for nature preservation and research, the Vale Natural Reserve is
also an attraction for visits and recreation. The reserve, which can be crossed on unpaved roads, has a training center,
an auditorium and even a comfortable hotel with 51 suites. There are also seven trails, which visitors can hike along,
led by a specialist guide. Visitors to the reserve can see a tall, white-barked, fruit-bearing tree. Of the genus Simira,
known in the region as “maiate,” the tree was discovered in the reserve and named Simira eliezeriana in honor of
former CVRD president Eliezer Batista.3 This is just one of the Vale Natural Reserve’s many unique features.
100
Below, left: the tree
nursery at the Vale
Natural Reserve in
Espírito Santo, in 1989.
Below, right: a bird of
the Euphonia violacea
species at the Vale
Natural Reserve, in 1991.
1 - To find out more about the subject, see Vale Natural Reserve (available at: <http://www.vale.com/pt-br/sustentabilidade/biodiversidade/reservanatural-vale/paginas/default.aspx>) and Vale Natural Reserve: management model for protected areas (available at: <http://saladeimprensa.vale.com/
hotsite/sustentabilidade/reserva_leiamais.asp>).
2 - Figures taken from www.vale.com – accessed on November 1, 2011.
3 - The Wall Street Journal – Reserva da Vale forma um catálogo vivo da fora na Mata Atlântica (June 8, 2005), available at: <http://online.wsj.com/article_
email/SB111818543435653453-lMyQjAxMTExMTA4MTEwODE1Wj.html?mod=wsj_share_email>.
Aerial view of the Vale Natural
Reserve in Linhares, Espírito Santo.
Vale
Our History
Vale
Our History
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