[10/8/07] Brazil landless threaten to stop CVRD railroad

RIO DE JANEIRO, Oct 8 (Reuters) - A group of Brazilian landless peasants threatened on Monday to block a railroad run by mining giant CVRD and halt iron ore shipments from Carajas area in a protest to demand the company's renationalization. The radical leftist Landless Workers' Movement also said 3.6 million people voted for the return of CVRD to state hands in last month's informal, nonbinding vote organized by it and other groups. A spokeswoman for the movement said the attempt to invade the railroad tracks was "part of a series of actions of the nationwide movement to annul the company's privatization." A spokeswoman for Companhia Vale do Rio Doce -- the world's biggest iron ore miner and exporter -- said an unspecified number of activists set up camp on Sunday by the road linking the Carajas mine with the Sao Luis port in Maranhao state. CVRD asked a local court to issue a prohibiting order to avoid the blockage of the railroad and said the activists on Monday stayed by the railroad but did not block the tracks. Unions and social rights groups that promoted the CVRD plebiscite last month in 4,000 Brazilian municipalities say the CVRD privatization was fraudulent. The control of CVRD, which had been profitable as a state-owned company since its foundation in 1942, was sold in auction in May 1997 for 3.3 billion reais (at that time worth about $3.3 billion). The organizers of the plebiscite argue that CVRD's market value at the time was in tens of billions of dollars. CVRD is now worth around $150 billion and its second-quarter net profit alone was $4.09 billion. The results of the vote have no legal binding on the ownership of CVRD, although it echoes a sentiment of nationalization that has swept through other countries in Latin America such as Venezuela, Bolivia and Ecuador. Brazilian President Luiz Inacio Lula da Silva has ruled out the renationalization, even though his ruling Workers' Party backed the plebiscite. Unlike some of its Latin American neighbors, Brazil has shown no formal signs of moving to reclaim previously sold state assets.