CVRD insists it won't become steel holding company

Brazilian mining and metals giant CVRD (NYSE: RIO) does not plan to become a holding company for the steel sector, Roger Agnelli, the company's president, was quoted as saying by local news services. "We want Brazil's steel sector to grow and we could participate in the process of restructuring the sector. But we want to continue as a mining company because we don't want to compete with those of our customers who are steel companies," Agnelli said. The president was responding to the acquisition of 8.5% of Valepar, the holding company that controls CVRD (NYSE: RIO), by Brazil's national development bank BNDES. The bank acquired the stake, equal to 2.86% of the total capital of the mining giant, from the CVRD employee fund Investvale for 1.5bn reais (US$521mn) on November 10. Valepar owns 33.6% of CVRD's total capital, and 52.3% of its voting shares. BNDES president Carlos Lessa said the bank is against the put option that European steel group Arcelor has to acquire CVRD's 22.85% stake in local flat steelmaker CST. Agnelli said there is a contract with Arcelor concerning the CST shares and that he plans to discuss the issue with BNDES. Rio de Janeiro-based CVRD is the world's largest iron ore miner.