Brazil's CVRD profit soars on sales, prices

Brazil's CVRD (VALE5.SA - RIO), the world's biggest iron ore miner, posted on Wednesday 44.6 percent growth in quarterly net profit over last year, reflecting increased sales and prices.

CVRD reported a quarterly net profit of $1.9 billion, up from $1.3 billion in the same quarter of 2005 under U.S. GAAP accounting rules. It was higher than the $1.5 billion to $1.8 billion profit forecast by three analysts polled by Reuters.

Earnings in the second quarter were $1.88 billion and in the first nine months of 2006 amounted to $5 billion, or more than the $4.84 billion recorded for the whole of 2005.

The third-quarter results included a 19 percent price rise for 2006 term contracts negotiated with world steelmakers in May and June.

"We continue to maintain our optimistic view of the dynamism of China's economy for 2007," CVRD said. "Emerging economies should continue to grow at more than 7 percent on average, particularly India, Russia, South-East Asia and Eastern Europe.

Talks have started on next year's iron ore contract prices and steel industry leaders at a conference in Chile last week said a further rise of up to 40 percent was possible due to strong demand from China's rapidly growing steel industry.