United States
Securities and Exchange Commission

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

March 2005

Valley of the Rio Doce Company

(Translation of Registrant’s name into English)

Avenida Graça Aranha, No. 26
20005-900 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-__.)

BR GAAP

BOVESPA: VALE3, VALE5
      NYSE: RIO, RIOPR
LATIBEX: XVALO, XVALP

PERFORMANCE OF COMPANHIA VALE DO RIO DOCE IN 2004

www.cvrd.com.br
 rio@cvrd.com.br

       Investor Relations
          Departament
  Roberto Castello Branco
        Barbara Geluda
        Daniela Tinoco
  Eduardo Mello Franco
       Rafael Azevedo
Phone: (5521) 3814-4540

BEATING RECORDS AND CREATING VALUE

Rio de Janeiro, March 21^st 2005 – Companhia Vale do Rio Doce (CVRD) hereby reports net earnings of R$ 6.460 billion for the year 2004, 43.3% higher than the previous year’s net earnings of R$ 4.509 billion, so setting a new record. Net earnings per share amounted to R$ 5.61. Return on equity (ROE) of 35.6%, exceeded the figure of 30.2% achieved in 2003.

The combination of considerable expansion in the global demand for ore and metals and the expansion in the capacity of all operational activities, achieved by the carrying out of highly competitive expansion projects and well succeeded acquisitions, together with the achievement of significant gains in efficiency, enabled the Company to maintain its excellent track record. This resulted in new records, as well as the substantial creation of value for the shareholders.

SELECTED FINANCIAL INDICATORS — CONSOLIDATED

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Over the period 2001-2004 the average total shareholder return (TSR) was 38.9% per year, for 2004 alone TSR was 45.9%.

Operational performance, as measured by EBIT (earnings before interest and taxes) amounted to R$ 10.306 billion, compared to R$ 6.665 billion in 2003, setting a new record. EBIT margin amounted to 37.4%, compared to 33.1% in the previous year.

Consolidated cash generation, as measured by EBITDA (earnings before interest, tax, depreciation and amortization) was the largest in CVRD’s history, totalling R$ 12.249 billion, an increase of 51.2% compared to 2003.

Consolidated exports amounted to US$ 5.534 billion, an increase of 30.8% on the figure for the previous year. Net exports (exports less imports) amounted to US$ 4.618 billion, an increase of 25.7% compared to 2003. Once again, CVRD was the company that most contributed to Brazil’s trade balance, accounting for 13.7% of the US$ 33.7 billion surplus obtained in 2004, the largest in the history of the Brazilian economy.

Various other records were set in 2004:

In 2004, four important projects were completed: the Sossego copper mine, the expansion of iron ore production capacity at Carajás to 70 million tons a year, Pier III at the Ponta da Madeira maritime terminal, and the Candonga hydroelectric power plant.

CVRD invested US$ 1.956 billion during the year, an amount calculated according to generally accepted accounting principles in the United States (US GAAP), the second largest in real terms in the Company’s history. Of this, US$ 1.245 billion went into organic growth, US$ 568 million into sustaining capex, and US$ 143 million in acquisitions.

In 2004, shareholders received dividends of R$ 2.271 billion, corresponding to R$ 1.96 per share. This amount was 17.7% higher than that distributed in 2003, and 25.7% higher than the distribution in 2002.

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BUSINESS OUTLOOK

In spite of the slowdown in the second half, the world economy is estimated to have grown by 4.8% in 2004, the highest rate in the last 20 years, while international trade grew by 18.6% in the year – the highest expansion since 1995.

The recovery was led by the United States, with GDP growth of 4.4%. A 9.5% expansion of the Chinese economy was also extremely important for the excellent performance of the world economy. In broad terms it was a synchronized recovery, though with reasonable variance between regions: 1.7% growth in the Euro zone, 2.6% in Japan, and 6% in Latin America, with the Brazilian economy showing its best performance since 1994 with GDP growth of 5.2%.

As well as the natural cyclical effect of the global economy recovery, the strong growth of China, faster than its already high average annual growth rate over the last 20 years (9.2%), and the fact that its economy is an intensive user of industrial raw materials at this stage of economic development, contributed to considerable demand pressure for ores and metals.

In response to the acceleration of demand, world steel production exceeded one billion tons for the first time, reaching 1.055 billion in the year, 8.8% higher than 2003, and almost double the average annual growth rate of 4.5% in the post-Asian-crisis period (1998-2003). In spite of this significant supply reaction, for the second year running there was a substantial increase in the prices of steel products.

Also as a result of this movement, seaborne iron ore trade grew to 602 million tons in 2004, 12.1% more than in 2003. Part of the disequilibrium between supply and demand was satisfied by the emergence of a spot market of considerable scale, in which prices reached multiples of the benchmark prices.

We expect the world economy to continue to grow at a rate above average long-term trend, although more slowly than in the first half of 2004. Together with the good outlook for the performance of the Chinese economy this tends to support up cycle of ores and metals prices.

Although investments by the global metals and mining industry are firmly expanding, indicating that in 2005 they could reach twice their amount of 2002, we believe that, at least for the next two years, reasonably large-scale imbalances between supply and demand in several markets continue to exist, especially iron ore, alumina and aluminum.

Capacity utilization levels are extremely high, resulting in higher operational costs and problems in the supply chain. Inventories, both in absolute terms and also in relation to consumption, are at historically low levels, while a considerable portion of the increase in the value of investments programmed is due to the increase in the cost of equipment. Further, the average time between the decision to invest and the conclusion of a project is relatively long, and has increased, worldwide, due to the increase in requirements for approval.

In the specific case of iron ore, we estimate an increase of global seaborne demand of 50 million tons. This increase, of 8.3%, would be lower than in 2004, but still shows significant vigor, as this expansion is stonger than the growth trend of the last 10 years – of 5% since the beginning of the 90s. In view of the relative rigidity of supply expansion in the short term, with operation at full capacity and virtual non-existence of inventories, persistence of very tight market conditions can be foreseen.

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Although CVRD’s programmed iron ore production for this year is more than 10% greater than in 2004, the Company still faces excess demand.

In 2004 the Company signed contracts for supply of iron ore and pellets totaling approximately 750 million tons with about 40 clients in the Americas, Asia and Europe, with weighted average maturity of seven years. The shipments under these new contracts will provide support for investments in expansion of production capacity.

According to estimates by the International Copper Study Group there was a 705,000-ton deficit in copper in 2004, after an imbalance between demand and production of 368,000 tons in 2003. Furthermore, the known inventories of copper are at their lowest level for the last 18 years. For this year, there is a forecast of balance between supply and demand starting in the third quarter, but without short-term availability for the necessary rebuilding of inventories.

We expect the Brazilian economy to continue to recover from the period of low growth in 2002 and 2003, while exports will continue to increase, resulting in favorable conditions for the logistics services offered by CVRD in Brazil.

RECENT MATERIAL EVENTS

On February 22, 2005 CVRD and Nippon Steel agreed a 71.5% increase in prices of iron ore fines from Carajás and Southern System.

On March 3, CVRD completed agreement with Arcelor on prices for blast furnace pellets for 2005: an increase of 86.67% for the Tubarão product and 86.43% for the São Luís product.

The agreement with Nippon Steel marked the first time that CVRD agreed the reference price with an Asian client. This can be explained by the fact that Asia is responsible for more than two thirds of the global seaborne iron ore imports and for approximately 80% of the demand growth in recent years.

CVRD has announced a capital expenditure budget of US$ 3.332 billion for 2005. Of the total budgeted, 22.1% will be allocated to sustain the existing business, and 77.9% to investment in organic growth.

The amount for organic growth is made up of US$ 2.221 billion to be invested in brownfield and greenfield projects, and US$ 375 million in research and development. This is the largest annual Capex in CVRD’s history, in both nominal and real terms. Over the period 2003-2005, 74% of the Company’s total investment was directed to organic growth, projects, and research and development. CVRD has been accelerating its investments in order to anticipate the start-up of important projects, such as the expansion of iron ore production capacity at Carajás.

The Company has won several international tenders for exploration of mineral deposits that strengthen its growth potential in the long term.

One was an international tender by the government of Mozambique for exploration of coal deposits in the Moatize region, the world’s largest unexplored coal reserve.

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The Company paid US$ 122.8 million for the concession. Feasibility studies for exploration of these reserves are currently in progress.

Operations at the African continent will be an important step for CVRD’s growth. Besides Mozambique, CVRD is developing mineral exploration activities in Gabon, searching for manganese ore deposits, Angola and South Africa. In Angola, CVRD holds mineral rights over an area of approximately 225.000 square kilometers, with good potential for discovering iron ore, potash, copper, nickel, gold and diamond.

In Argentina, CVRD obtained a license for research, evaluation and exploration of a potash deposit in a region on the Colorado River, in the province of Neuquén.

In Brazil, CVRD won an international tender, for US$ 20.0 million, for research, evaluation and exploration of a bauxite deposit in the region of Pitinga, in the Brazilian state of Amazonas.

In Peru, CVRD obtained the rights to exploration of the Bayóvar phosphates deposit, in the department of Piura.

CVRD will build a semi-industrial plant to process copper by the hydrometallurgical route, to test this new technological option for production of the metal from sulphide copper concentrate. The investment is estimated at US$ 58 million and the plant will have production capacity of 10 million tons of copper cathode per year. If the technology is approved, a larger-scale plant will be built for processing of copper from other deposits, such as Salobo.

In December 2004 CVRD completed the repurchase of US$ 186.996 million of its US$ 300 million debt issue with political risk insurance (PRI) and maturity in 2007.

CVRD’s senior management will submit a proposal to the Board of Directors for payment of minimum dividend of US$ 1 billion to shareholders for 2005, corresponding to US$ 0.87 per share outstanding.

RECORD SALES AND REVENUES

Consolidated gross revenues amounted to R$ 29.020 billion, the largest in the Company’s history, being 38.9% higher than that obtained in 2003. The average appreciation of the Brazilian real against the US dollar, of 4.8% during 2004, had an unfavourable effect on CVRD’s revenues in reais, to the extent that around 84% of the Company’s revenues are denominated and/or indexed to the US dollar. Between the fourth quarter of 2002 and the fourth quarter of 2004, the real appreciated by an average of 32.2% compared to the US dollar, which was not enough to prevent a strong increase in the Company’s revenues and cash generation.

In terms of geographical distribution, the revenue from sales to Europe, of R$ 8.012 billion, accounted for 27.6% of the total, to Brazil 23.9%, the USA 11.3%, China 10.6% and Japan 8.7%. Compared to 2003, the highest rates of growth were

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seen in the sales revenue from the United States, up 63.3%, from China, up 52.1% and Asian emerging markets (ex China) up 44.0%.

The gross margin achieved in 2004 was 48.7%, compared to 43.7% in 2003.

SALES VOLUME — CONSOLIDATED

Sales of iron ore, of 190.651 million tons, increased by 23.7% compared to 2003, constituting a new record. In 2004, the Company concluded its production capacity expansion at Carajás, to 70 million tons of iron ore a year. Already in this same year, Carajás produced 69.376 million tons, 10.5 million more than in 2003.

To meet the considerable customer demand, 15.9 million tons of iron ore were purchased from small mining companies in the Iron Quadrangle, in the state of Minas Gerais. In 2003, 9.2 million tons were purchased.

Pellets sales volume also set a new record, totalling 40.853 million tons, 25.2% higher than that sold in 2003.

Revenues generated from shipments of iron ore and pellets amounted to R$ 15.549 billion, accounting for 53.6% of the Company’s total revenue. This figure was 40.2% higher than that obtained in 2003, as a result of growth in sales volume and rising product prices.

Sales of manganese ore and ferro-alloys also set new records in 2004, with 999 thousand tons of manganese and 542 thousand tons of ferro-alloys, respective increases of 12.9% and 5.9%, compared to the previous year. Revenues from the sale of these products totalled R$ 2.084 billion — 7.2% of consolidated gross revenues.

With the Sossego copper mine entering into operation in the first half of last year, 269 thousand tons of copper concentrate were shipped, corresponding to revenues of R$ 592 million.

Sales of potash amounted to 630 thousand tons, down compared to that recorded in 2003 of 674 thousand tons, generating revenues of R$ 362 million. The weaker performance compared to 2003 is explained by the drop in production at the Taquari-Vassouras mine, from 658 thousand tons in that year to 638 thousand tons in 2004, as a result of a speeding up in the capacity expansion works, and by the low level of inventories, used in that year to support the increased sales.

In 2004, 1.207 million tons of kaolin were sold, resulting in revenues of R$ 468 million. The increase of 65.1% in the shipments of kaolin in relation to the

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previous year was influenced by the consolidation of Caemi into the Company’s figures from September 2003. However, even disregarding the effect of this change, there was an increase in sales, to the extent that PPSA increased its shipments by 9.6%.

Revenues derived from the sale of non-ferrous minerals – copper, potash and kaolin – amounted to R$ 1.423 billion, corresponding to 4.9% of the Company’s total consolidated gross revenue.

In 2004, CVRD sold 5.429 million tons of bauxite, a record volume, up 25.5% compared to 2003.

CVRD accelerated its alumina shipments in 2003, reaching 1.805 billion. Part of this volume was obtained due to swaps of alumina with competitors. In 2004, as CVRD had to supply its competitors with the amount received the year before, its sales were reduced in 7.0%, amounting to 1.678 million tons.

Revenues from the sale of products in the aluminum chain amounted to R$ 4.055 billion, an increase of 14.7% compared to 2003.

In 2004, CVRD’s railroads transported 40.055 billion NTKs (general cargo and iron ore) for clients, compared to 30.171 billion NTKs transported in 2003. The increase of 48.5% in revenues derived from railroad transport was due to three main factors: an increase in volume, a rise in the price of services and the total consolidation of FCA into CVRD’s figures from September 2003.

Revenues derived from logistics services, from railroad transportation, port operations and coastal shipping, amounted to R$ 3.025 billion, which represented an increase of 41.8% relative to 2003, and corresponded to 10.4% of the Company’s total net revenues. Railroad transport contributed with revenues of R$ 2.125 billion, port operations and support services with R$ 450 million and coastal shipping with R$ 450 million.

Revenues generated by CVRD’s equity stakes in the steel industry amounted to R$ 2.731 billion, 9.4% of the Company’s total revenues, which reflected an improvement in performance as a result of the favourable period currently being enjoyed by the steel industry.

GROSS REVENUES — CONSOLIDATED

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EXCELLENT OPERATIONS IN AN ENVIRONMENT OF COST INFLATION

The mining and metals industry throughout the world have been suffering from cyclical pressure in labour costs, energy and equipment.

In addition, the currencies of the main producing countries, such as the Brazilian real, the Chilean peso, the Canadian dollar, the South African rand and the Australian dollar have all appreciated significantly in relation to the US dollar. On one hand, this phenomenon has stimulated an increase, in US dollar terms, of mineral products prices, but on the other hand, has contributed to an increase in the costs of mining companies. In the case of the Brazilian real, the nominal appreciation against the US dollar amounted to 26.6% between December 2002 and February 2005.

Finally, operating at full capacity implies higher costs, resulting in, for example, demurrage expenses – increasing CVRD expenses from R$ 126 million in 2003 to R$ 245 million in 2004 — and a greater number of maintenance shutdowns.

Aiming to optimize its performance, in 2005 CVRD launched a program of operational excellence. This program is composed of dozens of small projects, whose purpose is to achieve a reduction in costs and gains in productivity.

The excellent operational performance by the Company in 2004 was demonstrated by the obtaining of a record consolidated EBIT, of R$ 10.306 billion. As a result, the previous consolidated EBIT record set in 2003, of R$ 6.665 billion was generously exceeded.

EBIT margin also widened, to 37.4% compared to 33.1% in 2003.

The net effect of the consolidation of Caemi and FCA on gross profit, was of the order of R$ 1.248 billion – increasing revenues by R$ 2.254 billion and the cost of goods sold (COGS) by R$ 1.006 billion – thus contributing to expansion in EBIT.

COGS increased by 24.7% compared to 2003, corresponding to R$ 2.793 billion in absolute numbers. As well as the impact already mentioned from the consolidation on an integral basis of Caemi and FCA, the principal sources of cost pressure were the rises in energy prices (electricity and fuel), salaries, materials and products acquired, especially iron ore purchased from small mining companies, and demurrage, which increased R$ 119 million. These costs, due to the delay in loading ships, reflected the effect of significant demand pressure for iron ore, on the logistics infrastructure.

COGS BREAKDOWN — CONSOLIDATED

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Administrative expenses increased by R$ 303 million due to salary increases, 17% in July 2003 and 4.5% in July 2004, and higher expenditure on technical consulting and the incorporation of around 7,500 employees as the result of total consolidation of companies. Expenditure on research and development increased by R$ 191 million as a result of CVRD’s decision to gear up its efforts to identify new mineral deposits in Brazil and other countries, in South America, Africa and Asia. The acceleration in the amortization of goodwill paid for the acquisition of Samitri also had a negative effect of R$ 183 million on operating profit.

There was an increase of R$ 200 million in other operational expenses, principally due to provisions for contingency, which increased from R$ 239 million in 2003 to R$ 277 million in 2004 and provisions for payment of a bonus to employees of the Company, which increased in R$ 62 million.

RECORD CASH GENERATION R$ 12 BILLION

Consolidated cash generation, as measured by EBITDA, amounted to R$ 12.249 billion, constituting another record. The EBITDA obtained in 2004 was 51.2% higher than that reported in 2003, of R$ 8.100 billion.

Ferrous minerals – iron ore, pellets, manganese and ferro-alloys – contributed with 64.9% of the EBITDA generated in 2004, while the products in the aluminum chain were responsible for 16.0%, logistics services 10.1%, steel 6.5% and non-ferrous minerals 2.5%.

EBITDA CALCULATION — CONSOLIDATED

RECORD NET EARNINGS: R$ 6.5 BILLION

The Company’s net earnings in 2004 amounted to R$ 6.460 billion, R$ 5.61 per share. This was an increase of 43.3% compared to the earnings in 2003, of R$ 4.509 billion.

The increase of R$ 7.428 billion in net operating revenues, was partially offset by an increase in COGS, of R$ 2.793 billion and by a negative contribution, of R$ 1.797 billion, from the net financial result.

In 2004, CVRD’s net financial result was a negative R$ 2 billion compared to R$ 203 million in 2003. The effect of monetary variation contributed to the deterioration in this result with R$ 1.274 billion.

Result from shareholdings increased by R$ 696 million compared to 2003. The main contributions came from logistics (an increase of R$ 258 million) and steel (an increase of R$ 196 million).

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The sale of CVRD’s stake in CST generated earnings of R$ 541 million.

In 2004, R$ 1.810 billion was provisioned for income tax and social contribution.

	PERFORMANCE OF THE PARENT COMPANY IN THE FOURTH QUARTER 2004 (4Q04)

In 4Q04, CVRD’s gross revenues amounted to R$ 3.735 billion, an increase of 29.8% on 4Q03.

The sales of iron ore and pellets amounted to 49.404 million tons and accounted for 75.9% of the gross sales generated by the Parent Company in 4Q04, R$ 2.834 billion. Of this amount, R$ 2.110 billion derived from sales of iron ore, an increase of 16.7% on 4Q03, and R$ 724 million from pellets shipments, compared to R$ 623 million in 4Q03.

In 4Q04, sales of copper concentrate totalled 139 thousand tons, producing gross revenues of R$ 324 million, compared to R$ 196 million in 3Q04 and R$ 72 million in 2Q04, when the first shipment of this product was made.

Sales of potash, 165 thousand tons, were in line with the quantities sold in 4Q03, of 169 thousand tons. Revenue generated in 4Q04, of R$ 98 million, however was up by 34.2%, due to the high price of this product.

In 4Q04, 6.063 billion NTKs were transported via the EFVM and EFC railroads, an increase of 8.2% on 4Q03. Of this total, 4.350 billion NTKs referred to general cargo for CVRD’s clients and 1.713 billion NTKs, referred to iron ore and pellets transported for Brazilian clients.

Logistics services were responsible for R$ 392 million in revenues, or 10.5%, of the total revenue generated by CVRD in 4Q04, an increase of 20.2% on 4Q03. Revenue generated by railroad transportation amounted to R$ 305 million and by port services, R$ 87 million.

SALES VOLUME – PARENT COMPANY

RAILROAD TRANSPORTATION OF GENERAL CARGO – PARENT COMPANY

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GROSS REVENUES BY PRODUCT — PARENT COMPANY

In 4Q04, EBIT amounted to R$ 1.097 billion, 22.8% higher than that obtained in 4Q03. EBIT margin amounted to 30.8%, compared to 31.9% in 4Q03.

EBITDA amounted to R$ 1.602 billion, 29.3% higher than the amount reported in 4Q03, of R$ 1.239 billion. In 4Q04, dividends received totalled R$ 245 million, R$ 85 million from Samarco, R$ 84 million from Docenave, R$ 30 million from Usiminas and R$ 36 million from Mineração Rio do Norte (MRN).

EBITDA CALCULATION – PARENT COMPANY

Net earnings by the Parent Company in 4Q04 amounted to R$ 1.528 billion, an increase of 92.7% compared to 4Q03. Among the main reasons contributing to this increase of R$ 735 million in earnings, we would like to highlight the increase in gross revenues of R$ 858 million and the result from shareholdings, up R$ 553 million, while at the same time monetary variation had a positive impact of R$ 427 million. On the negative side, there was an increase of R$ 571 million in provisions for the payment of income tax and social contribution, and a rise of R$ 493 million in COGS.

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COGS BREAKDOWN – PARENT COMPANY

RESULT FROM SHAREHOLDINGS BY BUSINESS AREA – PARENT COMPANY

	HIGHLIGHTS OF THE PARENT COMPANY’S PERFORMANCE IN 2004

Gross revenues of the Parent Company in 2004 amounted to R$ 13.785 billion, a new record, compared to R$ 10.367 billion in 2003. Of this amount, R$ 2.515 billion referred to higher volumes sold and R$ 1.338 billion, increase in prices, partially offset by a loss of R$ 435 million as a result of the average appreciation of 4.8% in the Brazilian real, against the US dollar in 2004.

Sales of iron ore and pellets totalled 187.447 million tons, accounting for 80.1% of the revenues generated by the Parent Company in 2004. Shipments of potash accounted for 2.6% of revenues. The revenues obtained from the sales of copper concentrate starting from June, amounted to R$ 592 million, representing 4.3% of the total revenues of the Parent Company.

In 2004, 24.941 billion NTKs were transported by the EFVM and EFC railroads, an increase of 11.2% on the previous year, which saw 22.434 billion NTKs transported. Of this total, 18.222 billion NTKs referred to general cargo for clients of CVRD and 6.719 billion NTKs referred to iron ore and pellets for Brazilian clients.

The logistics services provided by the Parent Company, railroad transportation and port services, produced revenues of R$ 1.556 billion in 2004, which accounted for 11.3% of the total revenue.

EBIT amounted to R$ 4.305 billion, compared to R$ 3.480 billion in 2003. EBITDA totalled R$ 6.211 billion, in comparison to R$ 4.876 billion in the

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previous year. Dividends received by the Parent Company in 2004 amounted to R$ 716 million, the main contributions being made by Samarco, MRN and Usiminas.

The sale of CVRD’s equity stake in CST generated earnings of R$ 541 million.

In 2004, a provision of R$ 885 million was made for the payment of income tax and social contribution.

	DEBT: LOWER LEVERAGE, HIGHER INTEREST COVERAGE, LOWER RISK PROFILE

The below analysis is based on US GAAP figures.

CVRD’s total debt on December 31, 2004 was US$ 4.088 billion, US$ 330 million lower than on September 30, 2004, US$ 4.418 billion. Part of the reduction on debt was due to repurchase of 62.33% of the US$ 300 million PRI bonds outstanding issued in 2002 and due in 2007. The purpose of this transaction was the improvement of cash management with the buyback of securities that did not fully reflect the Company’s level of risk.

Net debt at the end of December 2004 was US$ 2.839 billion, compared to US$ 2.479 billion at the end of September, and US$ 3.443 billion at the end of December 2003.

The Company’s leverage indicators improved substantially: gross debt/adjusted EBITDA fell from 1.89x as of December 31, 2003 to 1.10x as of December 31, 2004. Total debt/enterprise value fell from 16.0% to 11.8%. Interest coverage measured as adjusted EBITDA/interest paid increased, from 11.51x at the end of 2003 to 12.41x at the end of 2004. These changes are in line with the Company’s strategy of preserving a sound balance sheet.

CVRD has also been successful in reducing the implicit risk of its debt portfolio. Average debt maturity was increased, from 3.60 years at December 2003 to 6.83 years at December 2004, helping reduce refinancing risks. One of the main factors in this change was the issue of a 30-year bond, CVRD 2034. At the same time the percentage of debt with floating interest rates decreased from 71% in December 2002 to 56% in December 2004, reducing interest rate risk. The change in the risk profile took place with an increase in the average cost of debt of less than 100 basis points.

The Company contracted committed credit lines totaling US$ 500 million, contributing to efficiency in cash management and reducing risks of liquidity.

CVRD is rated Ba1 by Moody’s, only one notch below investment grade, with a positive outlook. In view of the importance of cost of capital for its growth projects and creation of value for the shareholders, obtaining the investment grade rating is one of the Company’s main targets.

DEBT INDICATORS — US GAAP

EV = Enterprise Value = Market Capitalization + Net Debt

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	CONFERENCE CALL/WEBCAST

On Wednesday, March 23, CVRD will be holding a conference call and webcast at 12:00pm (Rio de Janeiro time), 10:00am US Eastern Standard Time and 3:00pm British Standard Time. Instructions for participating in the conference call/webcast are available on CVRD’s website, www.cvrd.com.br, investor relations. A recording of the conference call/webcast will be available on the Company’s website for 90 days following March 23, 2005.

FINANCIAL STATEMENTS – CONSOLIDATED

BALANCE SHEET — CONSOLIDATED

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FINANCIAL STATEMENTS – PARENT COMPANY

BALANCE SHEET – PARENT COMPANY

“This communication may include declarations which represent the expectations of the Company’s Management about future results or events. All such declarations, when based on future expectations and not on historical facts, involve various risks and uncertainties. The Company cannot guarantee that such declarations turn out to be correct. Such risks and uncertainties include factors relative to the Brazilian economy and capital markets, which are volatile and may be affected by developments in other countries; factors relative to the iron ore business and its dependence on the steel industry, which is cyclical in nature; and factors relative to the high degree of competitiveness in industries in which CVRD operates. To obtain additional information on factors which could cause results to be different from those estimated by the Company, please consult the reports filed with the Comissão de Valores Mobiliários (CVM — Brazilian stock exchange regulatory authority) and the U.S. Securities and Exchange Commission — SEC, including the most recent Annual Report — CVRD Form 20F.”

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		MANAGEMENT REPORT 2004

2004: SETTING NEW RECORDS AND CREATING VALUE

The combination of strong expansion in the global demand for ore and metals and the expansion of production capacity in all the operational activities of Companhia Vale do Rio Doce — CVRD, as a result of implementing highly competitive projects and carrying out very successful acquisitions, added to the significant efficiency gains achieved, enabled the Company to add another year to its excellent track record track. New records were set as a result, and substantial value created for shareholders.

The substantial investments which are currently being implemented by CVRD benefit its shareholders at the same time as contributing directly and indirectly to the generation of tens of thousands of jobs in various states in Brazil, as well as the significant growth in Brazil’s exports. The investment in its railroads has caused a rebirth of the railroad materials industry in Brazil, and is making new businesses possible by opening up efficient transport channels.

The strong cash generation has made it possible to finance growth initiatives as well as distributing a good level of dividends to shareholders, while continuing to preserve a healthy balance sheet, with a low level of financial leverage, a high level of interest coverage, and a comfortable average debt maturity.

Last year CVRD invested US$ 1.956 billion, an amount calculated according to generally accepted accounting principles in the United States (US GAAP), the second highest level, in real terms in the Company’s history.

In 2004, four important projects were completed: the Sossego copper mine, the expansion of Carajás iron ore production capacity to 70 million tons a year (both in the state of Pará), Pier III at the Ponta da Madeira maritime terminal, in the state of Maranhão, and the Candonga hydroelectric power plant, in the state of Minas Gerais.

For 2005, the Company has announced an investment budget of US$ 3.3 billion. Of the total budget, 22.1% will be allocated to sustain the existing businesses and 77.9% for investment in organic growth.

The amount allocated for organic growth is made up of US$ 2.221 billion to be invested in brownfield and greenfield projects and US$ 375 million in research and development. This is the largest capital expenditure, both in nominal and real terms, in CVRD’s history. Over the period 2003-2005, 74% of the Company’s total investment was directed to organic growth, projects, and research and development.

Five years ago, the amount invested by CVRD in research and development only amounted to US$ 36 million per year, 80% of this being allocated to the prospecting for copper deposits in Carajás. In 2005, as well as investing more than 10 times this amount, the Company has extended its mineral prospecting activities across 10 states in Brazil and nine other countries: Venezuela, Peru, Chile, Argentina, Gabon, Angola, South Africa, Mozambique and Mongolia. Shortly, the Company will begin activities in Australia.

The Company has won a number of international tenders bids, which has strengthened its long-term growth potential.

CVRD successfully competed against international rivals in a tender bid carried out by the government of Mozambique for the exploitation of coal deposits in the Moatize region. These are the largest non-exploited coal reserves in the world. US$ 122.8 million was spent on the concession and

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		MANAGEMENT REPORT 2004

feasibility studies are being developed for the extraction of this deposit. The Company expects to begin the production of metallurgical coal and thermo coal from 2009.

In Argentina, the Company has obtained a licence for the prospecting, evaluation and exploration of a potash deposit located in the region on the banks of the Colorado River, in Neuquén Province.

In Brazil, a concession was obtained, through the payment of US$ 20 million, for the prospecting, evaluation and exploration of a bauxite deposit in the region of Pitinga, in the state of Amazonas.

In Peru, CVRD won a bid for the exploration of the Bayóvar phosphate deposits, located in the Department of Piura.

Currently, the Company is investing in six iron ore projects, five in the Southern System, in the state of Minas Gerais, being one new mine, Fábrica Nova, which will begin operations in the first half of this year, and one in Carajás, in the state of Pará. Iron ore production in 2004 reached a record level of 218 million tons, and the Company estimates that this figure will top 275 million tons by 2007.

At the same time, a new bauxite mine is being opened in Paragominas, located in the state of Pará, whose production capacity will initially be 4.5 million tons a year, requiring a total investment of US$ 352 million. Stages 4 and 5 are being built at the alumina refinery at Alunorte, in Barcarena, in the state of Pará, for an investment of US$ 583 million. In 2005 CVRD will conclude the expansion project of the Taquari-Vassouras potash mine, in the state of Sergipe, and it is also set to begin the development of two new mines: 118, its second copper mine, and Vermelho, its first nickel mine, both located in Carajás.

US$ 760 million is being invested in logistics, with the purchase of 5,606 railcars and 123 locomotives, and on increasing capacity at the maritime terminals of Ponta da Madeira, in the state of Maranhão, Tubarão, in the state of Espírito Santo, and Sepetiba, in the state of Rio de Janeiro.

Over the last four years CVRD’s railroads transported 101.286 billion net ton kilometers (NTK) of general cargo for clients. The main cargos transported were steel industry inputs and products, agricultural products, building materials, paper pulp, fuels and many different other types of goods. The average annual growth rate of general cargo volume transported was 10.7%.

In a consortium with other companies, CVRD is building three new hydroelectric power plants: Aimorés, Capim Branco I and Capim Branco II, in the state of Minas Gerais.

CVRD’S INVESTMENTS 1970-2005
at December 2004 prices1

Source: CVRD

		MANAGEMENT REPORT 2004

INVESTMENTS - 2000-2005

CVRD is in the process of developing a number of partnerships with large international, European and Asian companies. These ventures strengthen the Company’s market share in the global scenario, attracting new and significant investment to Brazil and allowing the Company to be shortly able to enter the metallurgical coal market.

The Company is set to build an alumina refinery, a joint-venture greenfield project (Alumina Brasil China) with Chalco – Aluminium Corporation of China Limited in Barcarena, in Pará, supplied with bauxite provided from the Paragominas mine.

CVRD has purchased — for US$ 86 million — a 25% stake in a project for the production of anthracite in China in association with Shanghai Baosteel Group Corporation and Yongcheng Coal & Electricity Group. It has invested US$ 27 million in the creation of Shandong Yankuang International Coking Co. Ltd. in partnership with the Yankuang Group, of China, and the Itochu Corporation, of Japan, for the production of metallurgical coke in China.

The Company has signed memorandums of understanding (MOUs) with various foreign steel companies with the aim of promoting projects for the production of semi-finished steel in Brazil. Feasibility studies are being developed on the following projects: (a) São Luís, in the state of Maranhão, with Baosteel, of China; (b) São Luís, in the state of Maranhão, with Posco, of Korea; (c) Fortaleza, in the state of Ceará, with Dongkuk, of Korea, and Danielli, of Italy; (d) in the state of Rio de Janeiro, with ThyssenKrupp, of Germany.

In 2004 the Company signed contracts for supply of iron ore and pellets totaling approximately 750 million tons with about 40 clients in the Americas, Asia and Europe, with weighted average maturity of seven years. The shipments under these new contracts will provide support for investments in expansion of production capacity.

On February 22, 2005, an agreement was reached between CVRD and Nippon Steel for a 71.5% increase in the price of iron ore fines from Carajás and the Southern System.

On March 3, CVRD concluded an agreement with Arcelor on price increases for blast furnace pellets for 2005: an increase of 86.67% for the Tubarão product and 86.43% for the product from São Luís.

This is the first time that CVRD has agreed a reference price with an Asian client, which is explained by the fact that Asia is responsible for more than two thirds of seaborne imports and a large part of the growth in demand.

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		MANAGEMENT REPORT 2004

Last year, CVRD sold its stake in Companhia Siderúrgica de Tubarão (CST) for US$ 578.5 million. This transaction is consistent with the Company’s strategy of focusing its efforts on taking maximum advantage of profitable growth opportunities in the global market of ores and metals.

CVRD sold its stake in PPSA for US$ 117.8 million to its subsidiary Caemi. The object of the transaction was to consolidate all the kaolin businesses into Caemi, which was already operating in the sector through Cadam.

At an Extraordinary General Meeting of Shareholders held on August 18, it was agreed that the Company’s shares would be split. As a result, each share of CVRD was split into three shares, post-split. The aim of this was to reposition the Company’s share price after having appreciated substantially, at the same time facilitating retail investor transactions.

In January 2004, CVRD established an important milestone in Brazil’s financial history. The Company carried out an unsecured bond issue, with a face value of US$ 500 million and maturity of 30 years. The 30-year tenor of the notes is the longest ever for a Brazilian company in the international capital markets.

The bond has a coupon of 8.25% per year and is currently rated Ba1 by Moody’s Investor Service, only one level below investment-grade. The success of this issue was yet another demonstration of the confidence shown by the global capital markets in the financial strength of CVRD.

The capital market’s confidence in CVRD was also expressed by the granting of US$ 500 million in committed credit lines by a consortium of banks in the United States, Europe and Asia. This was the first time that a Brazilian Company has had access to an instrument of this nature, which helps to reduce liquidity risks and also optimizes cash management.

In December 2004 CVRD completed the repurchase of US$ 186.996 million of its US$ 300 million debt issue with political risk insurance (PRI) and maturity in 2007. The purpose of this transaction was improvement of cash management with the buyback of securities that did not fully reflect the Company’s level of risk.

OPERATIONAL FINANCIAL PERFORMANCE

CVRD reported net earnings of R$ 6.460 billion for the year 2004, 43.3% higher than the previous year’s net earnings of R$ 4.509 billion, so setting a new record. Net earnings per share amounted to R$ 5.61. The consolidated return on equity (ROE) of 35.6%, exceeded the figure of 30.2% achieved in 2003.

Operational performance, as measured by consolidated EBIT (earnings before interest and taxes) amounted to R$ 10.306 billion, compared to R$ 6.665 billion in 2003, setting a new record. EBIT margin amounted to 37.4%, compared to 33.1% the previous year.

Consolidated cash generation, as measured by consolidated EBITDA (earnings before interest, tax, depreciation and amortization) was the largest in CVRD’s history, totalling R$ 12.249 billion, an increase of 51.2% compared to 2003.

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		MANAGEMENT REPORT 2004

Consolidated exports amounted to US$ 5.534 billion, an increase of 30.8% on the figure for the previous year. Net exports (exports less imports) amounted to US$ 4.618 billion, an increase of 25.7% compared to 2003. Once again, CVRD was the company that most contributed to Brazil’s trade balance, accounting for 13.7% of the US$ 33.7 billion surplus obtained in 2004, the largest in the history of the Brazilian economy.

Various other records were set in 2004:

CONSOLIDATED FINANCIAL INDICATORS – BR GAAP

CVRD EXPORTS – 2000-2004

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		MANAGEMENT REPORT 2004

NET EARNINGS – 2000-2004

Consolidated cash generation, as measured by EBITDA, amounted to R$ 12.249 billion, another new record. EBITDA obtained in 2004 was 51.2% higher than the figure in 2003, of R$ 8.100 billion.

Ferrous mineral operations – iron ore, pellets, manganese and ferro-alloys – accounted for 64.9% of EBITDA generated in 2004, while products from the aluminium chain were responsible for 16.0%, logistics services 10.1%, steel 6.5% and non-ferrous minerals 2.5%.

CONSOLIDATED EBITDA - 2000-2004

CONSOLIDATED EBITDA BY BUSINESS AREA - 2004

	DEBT: LOWER LEVERAGE, HIGHER INTEREST COVERAGE, LOWER RISK PROFILE1

CVRD’s total debt on December 31, 2004 was US$ 4.088 billion, US$ 330 million lower than on September 30, 2004, US$ 4.418 billion

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		MANAGEMENT REPORT 2004

The Company’s leverage indicators improved substantially: gross debt/EBITDA fell from 1.89x as of December 31, 2003 to 1.10x as of December 31, 2004. Interest coverage measured as EBITDA/interest paid increased, from 11.51x at the end of 2003 to 12.41x at the end of 2004. These changes are in line with the Company’s strategy of preserving a sound balance sheet.

The Company has also been successful in reducing the implicit risk of its debt portfolio. Average debt maturity was increased, from 3.60 years at the end of December 2003 to 6.83 years at the end of 2004, helping reduce refinancing risks. One of the main factors in this change was the issue of a 30-year bond, CVRD 2034. At the same time the percentage of debt with floating interest rates decreased from 71% at the end of December 2002 to 56% at the end of 2004, reducing interest rate risk. The change in the risk profile took place with an increase in the average cost of debt of less than 100 basis points.

CVRD is rated Ba1 by Moody’s, only one notch below investment grade, with a positive outlook. In view of the importance of cost of capital for its growth projects and creation of value for the shareholders, obtaining the investment grade rating is one of the Company’s main targets.

TOTAL SHAREHOLDER RETURN

In 2004, dividends of R$ 2.271 billion was paid to CVRD’s shareholders, corresponding to R$ 1.96 per share. This amount was 17.7% higher than that distributed in 2003 and 25.7% higher than the figure in 2002.

For 2005, CVRD’s Executive Board will make a proposal to the Board of Directors for the payment of minimum dividend to shareholders of US$ 1 billion, corresponding to US$ 0.87 per outstanding share.

In 2004, the shares traded on Bovespa, Vale ON and Vale PNA, appreciated by 29.8% and 27.0%, respectively, compared to the appreciation of 17.8% in the Ibovespa Index. The price of the ADRs traded on the New York Stock Exchange (NYSE), RIO and RIO PR, rose by 43.1% and 38.0%, exceeding the performance of the MSCI Metals & Mining index, which is representative of the share prices of the global metals and mining industry, which increased by 14.2%, and that of the MSCI World index, indicative of the behaviour of equity markets throughout the world, which appreciated by 12.7%.

CVRD ended 2004 with a market capitalization of US$ 31.9 billion, more than three times the value at the end of 2001, of US$ 9.0 billion. On February 24, 2005, CVRD’s market value reached a record US$ 39.9 billion. CVRD is currently one of the largest metals and mining companies in the world and the largest private company in Latin America.

The total shareholder return in 2004, measured in US dollars, amounted to 45.9%. In the period between 2001 and 2004, average total shareholder return was 38.9% per year.

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		MANAGEMENT REPORT 2004

VALE PNA vs. IBOVESPA INDEX– Base January-2000

RIOPR vs. MSCI Metals & Mining Index – Base January-2000

Expansion of CVRD’s Market Value Since 1998

CORPORATE SOCIAL RESPONSIBILITY

Social corporate responsibility activities are strategic investments. Through several initiatives, CVRD aim at improving the business environment in the regions where it operates and assure the preservation of its long term competitiveness.

CVRD has two main permanent and prioritary goals. One is environmental protection and the other is the creation of conditions of effective economic and social opportunities for the communities located close to its operations.

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		MANAGEMENT REPORT 2004

The Company invests an average of US$ 12 million per year in social projects driven to lower income communities, focused in education, health and citizenship promotion. The main specific segments are: education and community development, environmental education, teach children and adults to read and write, musical education, teaching and school structure improvements, social inclusion.

In Canaã dos Carajás, municipality located close to the copper belt at the south of the Carajás mineral province, CVRD established a benchmark in social development in the modern mining industry. The Company built a hospital equipped with 40 beds, a new school to attend 700 children and two kinder gardens. The new town has a 20 km water treatment station and a sewage system for all the population, 100 km of paved roads and 20 km paved streets. CVRD also built a culture center, and a police department. Total investment realized by the Company in these projects achieved US$ 13 million.

CVRD invests on average US$ 40 million per year in environmental protection and management. All of the iron ore produced by the Company is originated in mines certified by ISO 14001. It was the first company in the world to obtain these certifications. The Company adopts pollution controls, using advanced technology to comply with all legal requirements. Its dumps and reservoirs are constructed in accordance with the best international patterns and are regularly submitted to rigorous auditing process.

BUSINESS OUTLOOK

In spite of the slowdown in the second half, the world economy is estimated to have grown by 4.8% in 2004, the highest rate in the last 20 years, while international trade grew by 18.6% in the year – the highest expansion since 1995.

The recovery was led by the United States, with GDP growth of 4.4%. A 9.5% expansion of the Chinese economy was also extremely important for the excellent performance of the world economy. In broad terms it was a synchronized recovery, though with reasonable variance between regions: 1.7% growth in the Euro zone, 2.6% in Japan, and 6% in Latin America, with the Brazilian economy showing its best performance since 1994 with GDP growth of 5.2%.

As well as the natural cyclical effect of the global economy recovery, the strong growth of China, faster than its already high average annual growth rate over the last 20 years (9.2%), and the fact that its economy is an intensive user of industrial raw materials at this stage of economic development, contributed to considerable demand pressure for ores and metals.

In response to the acceleration of demand, world steel production exceeded one billion tons for the first time, reaching 1.055 billion in the year, 8.8% higher than 2003, and almost double the average annual growth rate of 4.5% in the post-Asian-crisis period (1998-2003). In spite of this significant supply reaction, for the second year running there was a substantial increase in the prices of steel products.

Also as a result of this movement, seaborne iron ore trade grew to 602 million tons in 2004, 12.1% more than in 2003. Part of the disequilibrium between supply and demand was satisfied by the emergence of a spot market of considerable scale, in which prices reached multiples of the benchmark prices.

We expect the world economy to continue to grow at a rate above average long-term trend, although more slowly than in the first half of 2004. Together with the good outlook for the performance of the Chinese economy this tends to support up cycle of ores and metals prices.

Although investments by the global metals and mining industry are firmly expanding, indicating that in 2005 they could reach twice their amount of 2002, we believe that, at least for the next two years,

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		MANAGEMENT REPORT 2004

reasonably large-scale imbalances between supply and demand in several markets continue to exist, especially iron ore, alumina and aluminum.

Capacity utilization levels are extremely high, resulting in higher operational costs and problems in the supply chain. Inventories, both in absolute terms and also in relation to consumption, are at historically low levels, while a considerable portion of the increase in the value of investments programmed is due to the increase in the cost of equipment. Further, the average time between the decision to invest and the conclusion of a project is relatively long, and has increased, worldwide, due to the increase in requirements for approval.

In the specific case of iron ore, we estimate an increase of global seaborne demand of 50 million tons. This increase, of 8.3%, would be lower than in 2004, but still shows significant vigor, as this expansion is stonger than the growth trend of the last 10 years – of 5% since the beginning of the 90s. In view of the relative rigidity of supply expansion in the short term, with operation at full capacity and virtual non-existence of inventories, persistence of very tight market conditions can be foreseen.

Although CVRD’s programmed iron ore production for this year is more than 10% greater than in 2004, the Company still faces excess demand.

We expect the Brazilian economy to continue to recover from the period of low growth in 2002 and 2003, while exports will continue to increase, resulting in favorable conditions for the logistics services offered by CVRD in Brazil.

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Financial Statements — 2004

BRGAAP

Filed at CVM and SEC on 03/21/05

Gerência Geral de Controladoria — GECOL

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