MMX Mineração E Metálicos S.A - s. 13.1 of NI 51-102 Continuous Disclosure Obligations

February 27, 2008

Order

Headnote

Section 13.1 of National Instrument 51-102 Continuous Disclosure Obligations- Issuer incorporated under the laws of Brazil exempt from the proxy form content, filing and sending requirements of NI 51-102, subject to conditions.

Rules Cited

National Instrument 51-102 Continuous Disclosure Obligations, ss. 9.1, 9.3, 9.4, 13.1.

IN THE MATTER OF

THE SECURITIES ACT,

R.S.O. 1990, CHAPTER S.5, AS AMENDED

AND

NATIONAL INSTRUMENT 51-102

CONTINUOUS DISCLOSURE OBLIGATIONS

(NI 51-102)

AND

IN THE MATTER OF

MMX MINERAÇÃO E METÁLICOS S.A. (THE FILER)

EXEMPTION

(Section 13.1 of NI 51-102)

UPON the Director having received an application from the Filer for an order under section 13.1 of NI 51-102 that the proxy form content, filing and sending requirements of NI 51-102 do not apply to the Filer (the Requested Relief);

AND UPON considering the application and the recommendation of the staff of the Commission;

AND UPON the Filer representing to the Director as follows:

1. The Filer is a corporation incorporated under the laws of Brazil. The Filer's registered address and head office is located at Praia do Flamengo, 154, 5º, andar Flamengo, Rio de Janeiro, Brazil.

2. The Filer is an integrated mining, mineral processing, production and logistics operations company for iron ore and intermediate products for the steel industry. The Filer has three independent mining and processing systems that are currently in various stages of development, which it refers to as the MMX Corumbá System, the MMX Amapá System and the MMX Minas-Rio System.

3. The common shares of the Filer are listed and posted for trading on the Novo Mercado segment of the Bovespa in Brazil. The Filer's common shares do not trade in any other market outside of Brazil.

4. On February 5, 2007, the Filer entered into a deposit agreement (the Deposit Agreement) with The Bank of New York as depositary (the Depositary), and all owners of global deposit receipts (the GDRs), from time to time, in connection with a Level 1 global deposit receipt program, which was originally established to enable the Filer to sell the GDRs over-the-counter in the United States and was therefore required to be registered under the Securities Act of 1933 (the 1933 Act). However, the GDRs do not trade over-the-counter or otherwise in the United States and the Filer has no current intention to list its securities or otherwise have its securities trade on a market in the United States.

5. As a result of the requirement to register the GDRs under the 1933 Act in order to establish a Level 1 Program, the Filer applied for and obtained a Rule 12g3-2(b) exemption from reporting obligations under the Securities Exchange Act of 1934 (the 1934 Act), an "information-supplying" exemption. Under this exemption, non-U.S. issuers may provide to the SEC copies of reports required to be filed in their home country in lieu of reports required to be filed by U.S. issuers under the 1934 Act. This exemption is available for any class of securities issued by a non-U.S. issuer who does not have securities registered with the SEC. None of the information provided to the SEC under Rule 12g3-2(b) is considered to be "filed" with the SEC. The issuer must provide the SEC with any information it has: (i) made or is required to make public pursuant to the law of the jurisdiction of its domicile or in which it is incorporated or organized; (ii) filed or is required to file with the local stock exchange on which its securities are traded and which was made public by such exchange; or (iii) distributed information to its securityholders. Currently these are the only reporting requirements of the Filer in the United States.

6. Each GDR evidences what is referred to under the Deposit Agreement as a global depositary share (GDS), which GDS represents 1/20th of a common share in the capital of the Filer.

7. On June 27, 2007, the Filer's GDRs were listed and began trading on the Toronto Stock Exchange (the TSX).

8. As a result of the listing of GDRs on the TSX, the Filer became a reporting issuer in Ontario.

9. On April 30, 2007, CIBC Mellon Trust Company was appointed as co-transfer agent and registrar for the GDRs in Canada at its principal offices in Toronto under a co-transfer agency agreement, pursuant to the requirements of the TSX.

10. According to the official share ownership records of the Company maintained by Brazil's Clearing and Depositary Corporation, as at December 7, 2007 there were a total of seven registered and beneficial Canadian shareholders of the Filer, representing approximately 5% of the total number of issued and outstanding common shares of the Filer, all of whom are institutional shareholders.

11. The Depositary maintains a register of holders on which each issued and outstanding GDR is registered in the holder's name and the transfer of any such GDRs is registered on such register.

12. According to the register of holders of GDRs maintained by the Depositary, as of January 25, 2008, there were 8,343,600 GDRs outstanding. Of these, 6,120,947 are held through the Canadian Depositary for Securities Limited (CDS), representing 306,047 common shares of the Filer.

13. As of January 25, 2008, the market capitalization of the Filer's 15,230,492 common shares was approximately US$7,239,200,000 and the market capitalization of the Filer's GDRs was approximately US$196,075,070.

14. In order to be issued a GDR, a shareholder of the Filer is required to deposit common shares of the Filer (the Deposited Shares) by delivery of such shares to Banco Itaú S.A. at its principal office in São Paulo as custodian for the common shares of the Filer and agent for the Depositary pursuant to the Deposit Agreement (the Custodian). The Deposited Shares must be accompanied by any appropriate instrument of transfer, or endorsement, in form satisfactory to the Custodian, together with all such certifications as may be required by the Depositary or the Custodian and, if the Depositary requires, together with a written order directing the Depositary to execute and deliver to, or upon the written order of, the person or persons stated in such order, a GDR for the number of GDRs representing such Deposited Shares based on the ratio of 1/20th of a Deposited Share per GDR. Upon delivery to the Custodian of the certificate(s) evidencing the Deposited Shares (together with such other required documents noted above), the Custodian will present certificate(s) to the Filer for transfer and recording of the such Deposited Shares in the name of the Depositary or its nominee or the Custodian or its nominee.

15. In order to surrender GDRs for common shares, a GDR holder is required to surrender their GDRs to the Depositary for the purpose of withdrawal of the Deposited Shares evidenced by such GDRs, and upon payment of a fee and all applicable taxes and charges that may be payable subject to the terms and conditions of the Deposit Agreement, the GDR holder will be entitled to delivery of the amount of common shares at the time represented by the GDRs. Upon valid surrender of the GDRs, the Depositary will direct the Custodian to deliver at the office of the Custodian the applicable amount of common shares to the holder.

16. All of the rights and conditions related to the GDRs are prescribed by the terms of the Deposit Agreement to which each and every holder of GDRs is a party to and bound. The rights and conditions of the Deposited Shares underlying the GDRs are subject to the terms of the Deposit Agreement as well as the constitutive documents of the Filer and the applicable laws of Brazil. Such rights and conditions include voting rights and procedures in connection with the GDRs (which involve voting the Deposited Shares at meetings of shareholders of the Filer) as well as other rights and procedures relating to dividends and other cash or shares distributions, rights offerings, and other corporate actions which may be undertaken by the Filer.

17. The common shares and the GDRs of the Filer are two separate classes of securities with their own separate CUSIP/ISIN numbers, their own separate record dates set, and their own separate voting rights and procedures. The rights and procedures for voting the common shares are prescribed by Brazilian law and constitutive documents of the Filer, and the rights and procedures for voting the Deposited Shares underlying the GDRs is prescribed by the Deposit Agreement as well Brazilian law and the constitutive documents of the Filer. Although a GDR holder may ultimately direct the voting of the Deposited Shares underlying such holder's GDR, such GDRs are not voted on a one-for-one basis, given that each GDR represents only 1/20th of a common share of the Filer. No separate meetings are called for GDR holders. Pursuant to the Deposit Agreement, GDR holders are only entitled to a voting right in respect of business to be conducted at a meeting of shareholders called by the Filer.

18. In the United States, if the GDRs were listed on the NYSE, the Filer would be subject to the reporting requirements imposed on foreign private issuers and the rules of the NYSE. The SEC has exempted foreign private issuers from some of the provisions of the United States securities laws, including provisions governing proxy statements.

19. The NYSE rules require foreign private issuers to solicit proxies for all meetings of its listed securities; however, the rules state that proxy materials shall be in such format and shall be distributed by such means as are permitted or required by applicable law and regulation. As mentioned above, foreign private issuers are exempt from the full U.S. proxy rules pursuant to Rule 3a12-3(b) of the 1934 Act. Therefore, NYSE listed foreign private issuers are permitted to follow their home jurisdiction voting regulations.

Shareholder Meeting Requirements under Brazilian Law

20. Brazilian corporate law prescribes that the Filer must hold its shareholder meetings in its registered headquarters in Brazil and that it must call a meeting of its shareholders by way of publication of notice in a national Brazilian newspaper in which the Filer normally makes its required publications. In addition, the Filer must file such notice with the Bovespa and the CVM through an electronic public filing system in Brazil. Such publication and filing must be done no later than 15 calendar days prior to the scheduled date for the shareholders' meeting.

21. A shareholder is only entitled to vote at a shareholders meeting of a Brazilian company if it is a registered shareholder at the record date set by the company for the meeting. A registered shareholder must attend the meeting in person to vote such holder's shares or, alternatively, give formal power of attorney to another recognized person to vote such shares in person on its behalf in accordance with Brazilian law (power of attorney can only be given to another shareholder of the company, an officer or director of the company, a financial institution or an attorney). If a shareholder holds its shares through an intermediary, such shareholder must appoint the intermediary as its agent to attend and vote the shares in person on his/her behalf (i.e. beneficial shareholders may not themselves vote in person the shares they beneficially own). There is no paper or electronic proxy voting process under Brazilian corporate law as there is under Canadian corporate and securities laws.

22. Under Brazilian corporate law, the quorum for passing a resolution put before the shareholders at the meeting is typically 50% plus one of the shareholders attending such meeting, subject to certain resolutions requiring a special majority vote of shareholders representing 50% plus one of the issued and outstanding shares of the Filer.

23. The voting rights in the Filer, like many other Brazilian public companies, are controlled by a few controlling shareholders who have the voting power to pass in principle any resolution put to the shareholders of the Filer.

24. If the Filer were to comply with the proxy solicitation requirements of NI 51-102, such proxies would have no legal effect under Brazilian law and would not result in the vote of the GDR or common shareholder being counted. Brazilian law requires power of attorney documents which are notarized by the local consulate, sworn and translated in to Portuguese and which appoint only specified persons to attend the meeting to vote.

Shareholder Meeting Requirements under the Depositary Agreement

25. The procedure for giving notice of a shareholders meeting of the Filer and voting the Deposited Shares underlying the GDRs is set forth under the terms of the Deposit Agreement, a copy of which is filed on SEDAR. Upon receipt from the Filer of notice of any shareholders meeting, the Depositary will, if requested in writing by the Filer to do so, mail to the GDR holders a notice, which takes the form of a voting instruction card, which shall contain: (a) information contained in such notice of meeting received by the Depositary from the Filer; (b) a statement that the GDR holders as of the close of business on a specified record date will be entitled, subject to any applicable provision of Brazilian law and of the constitutive documents of the Filer (the Filer is obliged under the Deposit Agreement to deliver to the Depositary and the Custodian a copy of all provisions of or governing its common shares) to instruct the Depositary as to the exercise of the voting rights pertaining to the amount of Deposited Shares they have evidenced by their GDRs; and (c) a statement as to the manner in which such instructions may be given, including an express indication that instructions may be given, or deemed given if no instruction is received, to the Depositary to give a discretionary proxy to a person designated by the Filer. Upon the written request of a GDR holder on such record date, which request is received on or before the date established by the Depositary for such purpose (the Instruction Date), the Depositary will endeavour, in so far as practicable, to vote or cause to be voted the amount of Deposited Shares underlying the GDRs in accordance with the instructions set forth in such request. If the Filer made a request to the Depositary to solicit voting instructions and no instructions are received by the Depositary from a GDR holder on or before the Instruction Date, the GDR holder is deemed to have instructed the Depositary to give a discr
26. When the Depositary is instructed to solicit voting instructions from the GDR holders in connection with a meeting of shareholders of the Filer, the Depositary sends out the voting information cards and, following receipt of voting instructions, the votes are then calculated based on the ratio of 1/20th of a common share per GDR and the final Deposited Share vote tally is provided to the Custodian to attend in person at the shareholder meeting in Brazil to register the votes of the GDR holders. The timeline for the solicitation process undertaken by the Depositary is approximately 30 to 40 days from the date the Filer instructs the Depositary to give notice to and solicit votes from the GDR holders. The Depositary allows approximately two weeks for broker searches and the balance of the time for Broadridge to mail the voting information cards to the intermediaries and for the Depositary to receive voting instructions to tabulate and pass on to the Custodian for voting.

27. The Depositary agrees to make available for inspection by GDR holders, at its offices in New York, any reports and communications received from the Filer which are both: (a) received by the Depositary as the holder of the Deposited Shares; and (b) made generally available to the holders of common shares by the Filer. The Depositary shall also, upon written request, send to the holders of GDRs copies of such reports when furnished by the Filer.

28. The Filer will comply with NI 54-101 in sending information circulars to the GDR holders.

Shareholder Meeting Requirements under NI 51-102

29. Section 9.1(1) of NI 51-102 provides that if management of a reporting issuer gives notice of a meeting to its registered holders of voting securities, management must, at the same time as or before giving the notice, send to each registered holder of voting securities who is entitled to notice of the meeting a form of proxy for use at the meeting (which form of proxy is prescribed by section 9.4 of NI 51-102).

30. Section 9.3 of NI 51-102 provides that a person or company that is required under NI 51-102 to send an information circular or form of proxy to registered securityholders of a reporting issuer must promptly file a copy of the form of proxy and all other material required to be sent by the person or company in connection with the meeting to which the information circular or form of proxy relates.

31. The rules of the TSX substantively defer to the requirements prescribed under Canadian corporate and securities laws in connection with the procedures to be followed for shareholder meetings.

AND UPON the Director being satisfied that to do so would not be prejudicial to the public interest;

IT IS THE DECISION of the Director, under section 13.1 of NI 51-102, that the Requested Relief is granted in respect of shareholder meetings of the Filer at which its common shareholders are entitled to vote, for so long as:

(a) at the time of the meeting, the Filer continues to be incorporated under the laws of Brazil and has not listed its common shares on an exchange other than in Brazil;

(b) at the time of the meeting, Brazilian corporate law continues to be as described in representations 20 through 24, above;

(c) at the time of the meeting, the only securities of the Filer listed or quoted on a marketplace in Canada are GDRs for which the shareholder meeting requirements under the Deposit Agreement continue to be as summarized in representations 25 through 27, above;

(d) with respect to the meeting and voting at such meeting, the Filer complies with

(i) Brazilian corporate law, and

(ii) the shareholder meeting requirements for GDRs under the Deposit Agreement, as summarized in representations 25 through 27, above;

(e) with respect to the meeting and voting at such meeting, the Filer prepares an information circular that:

(i) satisfies the requirements of Form 51-102F5 Information Circular; and

(ii) explains how the Filer's common shareholders and GDR holders may vote their securities (if they are eligible);

(f) the Filer sends the information circular referred to in paragraph (e) to beneficial holders of its GDRs in accordance with the requirements set out in National Instrument 54-101 Communication with Beneficial Owners of Securities of a Reporting Issuer;

(g) the Filer sends the information circular referred to in paragraph (e) to beneficial holders of its common shares in accordance with the requirements set out in National Instrument 54-101 Communication with Beneficial Owners of Securities of a Reporting Issuer to the extent applicable and otherwise in accordance with the list of beneficial holders maintained by the transfer agent; and

(h) after sending the information circular referred to in paragraph (e) to its registered and beneficial securities holders as contemplated in paragraph (d), the Filer promptly files, under its SEDAR profile, the information circular and any shareholder voting materials required to be sent to its GDR holders in respect of the meeting and voting at such meeting in accordance with the Deposit Agreement.

Dated February 27, 2008

"Erez Blumberger"