On May 6, 1997, Brazil’s federal government privatized Companhia Vale do Rio Doce, or CVRD, in an auction at the Rio de Janeiro Stock Exchange. The transaction transferred control of one of the country’s leading iron-ore producers from the federal government to private shareholders.

Consórcio Brasil, led by Companhia Siderúrgica Nacional (CSN), bought 41.73% of CVRD’s voting capital: 104,318,070 common shares. The consortium paid R$3,338,178,240, according to the verified transaction record.

The sale was a major event in Brazil’s 1990s National Privatization Program, known by its Portuguese acronym PND. It placed control of a large federally owned mining company in private hands through a public auction process.

What happened

Consórcio Brasil won the controlling-block auction with an offer 19.98% above the government-set minimum price. The premium is commonly rounded to 20%.

Brazil’s central bank described the buyer group as comprising CSN, NationsBank, pension funds and Banco Opportunity. The Banco Central do Brasil reported the transaction’s value as US$3.1 billion, alongside the Brazilian-real consideration.

The value in reais is the most direct measure of the auction consideration: R$3.34 billion for the 41.73% voting stake. Contemporary official accounts expressed the dollar equivalent differently. BNDES’s 1997 privatization report put it at US$3.299 billion, while the central bank reported US$3.1 billion.

Why it matters

The auction marked the transfer of control of a leading iron-ore producer from the Brazilian state to a private shareholder group. It was among the prominent transactions carried out through the federal privatization program during the 1990s.

For an international audience, the deal illustrates how Brazil used the PND to sell controlling stakes in state-owned enterprises. In CVRD’s case, the government sold a voting block large enough to transfer control, rather than merely reducing its participation through a minority share offering.

The bigger picture

CVRD’s sale took place within a broader federal program of privatizations. The transaction was conducted through an auction at the Rio de Janeiro Stock Exchange, with a government-set minimum price and competing bids reflected in the premium paid by the winning consortium.

The company later became known as Vale. The 1997 auction remains an important reference point in discussions of Brazil’s privatization program because it involved the control of a major mining company and a substantial voting-share block.

By the numbers

What happened next

The verified record establishes that the auction transferred CVRD’s control to the CSN-led Consórcio Brasil. The company later adopted the name Vale, while the May 6, 1997 sale remains a defining transaction of Brazil’s 1990s National Privatization Program.