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Companhia Vale do Rio Doce (CVRD) recently reached an agreement to acquire all of Mitsui & Co.'s common and preferred shares in Caemi Mineracao e Metalurgia S.A. for $426.4 million.


CVRD owns half of Caemi's common shares and 16.8 percent of its total capital. If the transaction is approved by regulatory authorities, CVRD would own all of Caemi's common shares, 40 percent of preferred shares and 60.2 percent of total capital.


The world's fourth-largest iron ore producer, Caemi indirectly owns 27.9 percent of Brazilian railroad MRS Logística S.A., which has the capacity to move 100 million tons of cargo annually.


Brazilian mining and power-generation firm CVRD already owns a 9.6 percent stake in MRS Logística. The company also owns and operates 553-mile Carajás Railroad and 561-mile Vitoria-Minas Railroad, and owns a 30 percent stake in Malha Nordeste Railroad, 20 percent stake in Centro-Atlântica Railroad and 18.7 percent stake in Malha Paulista Railroad.


Because its railroads' volume has risen an average annual rate of 9.4 percent since 1999 — from 17.7 billion tons to 23.3 billion tons last year — CVRD recently announced plans to spend $290 million in 2003 and 2004 to purchase 3,500 rail cars and 66 locomotives from Brazilian manufacturer Maxion.


The company plans to purchase 1,850 cars this year. CVRD's fleet currently comprises 22,976 cars and 710 locomotives.