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3rd Quarter 2005

3rd Quarter 2005. World Steel Production (million t.). Substantial growth in the past few years. 1,100. 1,000. 900. 800. 700. 600. 500. 400. 300. 200. 100. Source: International Iron and Steel Institute - IISI - 2005. 1. Steel Production. ... mainly coming from China.

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3rd Quarter 2005

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  1. 3rd Quarter 2005

  2. World Steel Production (million t.) • Substantial growth in the past few years ... 1,100 1,000 900 800 700 600 500 400 300 200 100 Source: International Iron and Steel Institute - IISI - 2005 1

  3. Steel Production ... mainly coming from China 2004(million t.) China Japan USA Russia Korea Germany Ukraine Brazil India Italy Source: International Iron and Steel Institute - IISI - 2005 2

  4. World Steel Trade • Trade ~ 200 million tons per year • Trend may continue through 2005 Top net importers Top net Exporters million t. million t. Vietnam Italy Hong Kong Thailand China USA Source: International Iron and Steel Institute - IISI - 2005 3

  5. Usiminas Leading Producer • Usiminas System is the 23rd largest producer in the world and 1st flat steel producer in Latin America Major Steel Plants 2004(crude steel production) million t. Top Brazilian Steel Producers - 2004 million t. Source: IBS - 2005 Source: IISI - 2005 4

  6. Steel in Brazil • Its competitive conditions make the country a global leader High quality iron ore Well located plants and modern technology Qualified labor and management Product quality and environmental management Competitive Costs 5

  7. Cost Competitiveness • Brazil has the lowest production cost in the world Production Cost – (US$/t) Slabs (Jun 2005) Source: WSD - August 2005 6

  8. Cost Competitiveness • Usiminas has one of the highest operating margins in the world Operating Margin % - 2004 Data: Integer Research, Company Annual Reports September, 2005 7

  9. BAHIA MINAS GERAIS Ipatinga Usiminas Itabira Belo Horizonte Usiminas Headquarters CVRD ESPÍRITO SANTO Port of Praia Mole Vitória RIO DE JANEIRO SÃO PAULO Rio de Janeiro São Paulo Sepetiba Port Cosipa RAILROAD HIGHWAY Santos ATLANTIC OCEAN Cubatão Usiminas is strategically located Usiminas Location: Ipatinga, State of Minas Gerais Cosipa Cubatão, State of São Paulo • Close to main markets • 2 ports • Railroad (MRS) 8

  10. Products • Complete product lines: from slabs to coated products Capacity (tonnage/year) Major consumers Capacity: 5.0 million t. Capacity: 4.5 million t. Slab 5,000,000 4,500,000 Rolling mills. Pipelines, pressure vessels, shipbuilding, general structures. Heavy plate 1,000,000 1,000,000 Agricultural machinery, pipe and tube, chassis, gas cylinders, containers, general structures. Uncoated Hot coil 3,550,000 2,100,000 Auto industry, household appliances, packaging. Cold coil 2,500,000 1,200,000 Electrogalvanized coil Auto industry, household appliances. 360,000 - Coated Auto industry, household appliances, civil construction. Hot dip galvanized coil 400,000 - 9

  11. Sales (thousand t.) As of September, 2005 • Domestic market is a priority Usiminas + Cosipa 8,062 7,722 7,710 6,602 5,367 Domestic Market Foreign Market 10

  12. { Fasal, Rio Negro and Dufer 7% Domestic Sales - 9M05 As of September, 2005 • Combination of market leadership and diversified customer base reduces market risk Usiminas + Cosipa Volume: 3.88 million t. 11

  13. Domestic Market Share (%) 9M05 As of September, 2005 • Combination of market leadership and diversified customer base reduces market risk Usiminas + Cosipa = 53% 12

  14. Domestic Market Outlook Flat Steel Demand (1,000 t.) Vehicle Production (1,000 vehicles) 8.6% -9.0% Source: IBS / Usiminas Source: Anfavea / Usiminas 13 Source: Usiminas

  15. International Market As of September, 2005 • Diversified geographic sales Usiminas + Cosipa Volume: 1.5 million t. - 9M 2005 14

  16. Investments & Technology(US$ million) • Commitment to the best technology • More than US$ 3 billion invested in the last decade • Partnership with Nippon Steel assures access to state-of-the-art technology in steel production, including high value-added products • 6th Technology Transfer Agreement with Nippon Steel, valid until 2009 • 407 registered patents, of which 23 are international • 150 researchers • In the last 3 years, for each US$ 1 spent in technology Usiminas sells US$ 3 15

  17. Usiminas Cosipa Investments & Technology(US$ million) • Commitment to the best technology 740 737 546 500 New Investments 390 292 200 140 119 117 111 16

  18. Investments & Technology(US$ million) • Commitment to the best technology • Next 2 years: • Maintenance - approximately US$ 120 million per year • Projects approved by the Board • Increase of self-generated energy from 16% to 33% • Power Plant 60 MW - Usiminas • BF Top blowing turbine 12 MW - Cosipa • Self-sufficiency in coke production by 2007 • 550.000 tons/year Coke plant - Usiminas • Productivity • Revamping of Continuos Casting Machine - Cosipa • Projects under study • Production Capacity Increase (on-going studies) • 1.0 ~ 2.0 million tons 17

  19. Creation of Ternium • Consolidate control of Hylsamex, Sidor and Siderar • Ternium will have ~ 11.5 million t. capacity Present Situation Proposed Situation Techint G. Usiminas Usiminas Initial 83.7% 16.3% 16.6% Ternium 5.3% C. Amazônia Control Amazônia 59.7% 59.7% Control Control Sidor Siderar Siderar Sidor Hylsamex 18

  20. Ebitda Evolution Consolidated (US$ million) As of September, 2005 • Investment return and market conditions have allowed consistent cash generation ... AVG. US$ 19

  21. Ebitda Evolution Consolidated (US$ million) As of September, 2005 • Investment return and market conditions have allowed consistent cash generation ... AVG. US$ 20

  22. Total Debt Evolution Consolidated (US$ million) As of September, 2005 ... and have made it possible to considerably reduce debt R$ / US$ 21

  23. Debt Maturity Consolidated (US$ million) • Debt has an adequate maturity profile • “Stand by Facility” - Export Pre-Payment US$ 250 million As of September, 2005 Note: Principal, 2005- October to December maturities TERM CURRENCY Short 26% US$ 473 mi Local 31% Swap CDI 44% Long 74% US$ 1,344 mi US$ 56% Foreign 69% 22

  24. Shareholder Structure As of September, 2005 Usiminas Voting Capital Control Group: 53% • Excellence of the main shareholders • Board of Directors from solid Brazilian and foreign groups • Long-term relationships with steel business and Usiminas • Committed to add excellence and experience to business management 23

  25. Creation of Value for Usiminas and the steel industry has been considerable over the last few years ... ... and Usiminas still has strong potential for additional value creation Potential value creation for shareholders Multiples Annual shareholder return (2003 - Jul 2005) % p.a. Ibovespa = 28% Belgo CST CSN Acesita Gerdau Usiminas 24 Source: Economática, Banco Itaú (Oct./05)

  26. Positive stock market reaction Steel Sector Bovespa 2004 Others 10% Usiminas PNA 31% Ibovespa Portfolio Sid Tubarao PN 9% Sid Nacional ON 29% Gerdau PN 21% 2004 2003 New Ibov. Portfolio 5.72% 4th 2005 (*) 2002 ... & ADR I e Latibex 2001 (*) Theoretical Ibovespa portfolio Sept/Dec 2005 25

  27. Other Highlights Consolidated Figures - USIMINAS Sept 30/05 Dec 31/04Dec 31/03 Dec 31/02 Crude Steel Production (thsd t) 6,517 8,951 8,621 8,447 Sales (thsd t) 5,367 8,062 7,710 7,722 Net sales (US$ million) 4,035 4,197 2,845 2,250 EBITDA (US$ million) 1,840 1,930 1,002 794 Net Profit (US$ million) 1,167 1,032 426 (152) Gross Debt (US$ million) 1,817 2,033 2,626 2,699 Gross Debt / EBITDA 0.7 1.1 2.5 3.9 EBITDA / Interest Expenses 16.9 11.3 4.3 3.7 26

  28. Declarations relative to business perspectives of the Company, operating and financial results and projections, and references to the growth of the Company, constitute mere forecasts and were based on Management’s expectations in relation to future performance. These expectations are highly dependent on market behavior, of Brazil’s economic situation, on the industry and on international markets, and are therefore subject to change. www.usiminas.com.br Investor Relations: Bruno Seno Fusaro Luciana Valadares dos Santos Matheus Perdigão Rosa brunofusaro@usiminas.com.br lsantos@usiminas.com.br mprosa@usiminas.com.br Tel.: + 55-31-3499-8772 Tel.: + 55-31-3499-8619 Tel.: + 55-31-3499-8056 Fax: + 55-31-3499-9357 Gilson Rodrigues Bentes - COSIPA (São Paulo Office) gilson@cosipa.com.br Tel.: + 55 11 5070-8980 27

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