Earnings Conference Call

2Q08

Not considering goodwill

amortization

Better mix led to a rise in net revenues by 14.5% quarter-on-quarter and 10.3% year-on-year - due to higher refractory sales in the domestic market and to

the steel industry.

Better mix led to a rise in net revenues by 14.5% quarter-on-quarter and 10.3% year-on-year - due to higher refractory sales in the domestic market and to

the steel industry.

Recovery of the gross margin and EBITDA margin reflect management´scontinuous focus on cost and expense

control.

Recovery of the gross margin and EBITDA margin reflect management´scontinuous focus on cost and expense

control.

Tax benefit resulting from mergers in 2008:

Magnesita Refratários S.A.: 1Q08 partial and 2Q08 fully appropriated; Subsidiaries: partial, starting

May 1, 2008.

Tax benefit resulting from mergers in 2008:

Magnesita Refratários S.A.: 1Q08 partial and 2Q08 fully appropriated; Subsidiaries: partial, starting

May 1, 2008.

Non-operating revenue of R$ 54.2 million from the sale of non-core assets

Non-operating revenue of R$ 54.2 million from the sale of non-core assets

Quarterly Net Income R$ million

Sales Volume Breakdown1H07

Sales Volume Breakdown1H07

Sales Volume Breakdown1H08

Sales Volume Breakdown1H08

(*) not including the non-recurring sale of 210,000 metric tons of magnesium silicate

194 kt

96 kt

39 kt 205 kt

82 kt

32 kt

Other minerals

1H08 vs. 1H07 = -14.4%

Total

1H08 vs. 1H07 = -3.0%

Refractories

1H08 vs. 1H07 = + 5.7%

329 kt 320 kt

229254 247 261 276

49

58 5962 42

2Q082Q07 3Q07 4Q07 1Q08

Exports

Domestic

318306 323

278312

Net Revenues

Net Revenues - R$ millionNet Revenues - R$ million Net Revenues by Product – %Net Revenues by Product – %

Higher demand from steel industryin Brazil led to a rise in sales.

78% 79%

3%5%

13%

4%4%

14%

R$ 580 MM R$ 638 MM

Services

Refractory

SinterOther minerals

Obs.: excludes non-recurring income from sale of 210 kt of magnesium silicate amounting to R$2.5 MM.

DM2Q07 -> 2Q08+R$47MM (21%)

Breakdown of RefractoryRevenues – 1H08

Breakdown of RefractoryRevenues – 1H08

Breakdown of Refractory Revenues to the Steel Industry – 1H08

Breakdown of Refractory Revenues to the Steel Industry – 1H08

(R$387 MM)

(R$35 MM)

(R$81 MM)

217.7

EBITDA – R$ millionEBITDA – R$ million EBITDA Margin – %EBITDA Margin – %

6

1Q

2Q

3Q

4Q

+71%

188.5

EBITDA / EBITDA Margin

Raw Materials

32%

Labor

28%Fuel

12%

Depreciation

6%

Industrial

Maintenance

4%

Energy

5%

Others

accounts

13%

COGS – 1H08COGS – 1H08 Operating ExpensesOperating Expenses

2Q082Q07 3Q07 4Q07 1Q08

Administrative

Sales

6664

75

5260

Costs

2008 administrative expenses increased because of non-recurring costs of mergers and restructuring of the Group’s companies.

Year to date, costs have amounted to R$12.6 million.

Net Debt/EBITDA – R$ millionNet Debt/EBITDA – R$ million

Obs.: 06.30.08 – annualized EBITDA was considered

Debt

The Company’s debt, which is composed by approximately 90%

long-term, excluding cash and cash equivalent of R$ 542 million is

equivalent to 1.4 timeannualized EBITDA.

The Company’s debt, which is composed by approximately 90%

long-term, excluding cash and cash equivalent of R$ 542 million is

equivalent to 1.4 timeannualized EBITDA.

Stock Performance

MAGG3 + 93.7%Ibovespa + 2.6%

Average daily trading volume: R$ 11.9 million

Outlook

SteelStrong signals for sustained growth, with confirmation of several expansion projects. Brazil has been consolidating as investment target and Magnesita is capable to respond to the needs of refractory products in this market.

SteelStrong signals for sustained growth, with confirmation of several expansion projects. Brazil has been consolidating as investment target and Magnesita is capable to respond to the needs of refractory products in this market.

Commodities• Booming demand mainly due to growing global economy, level of urbanization and industrialization in emerging markets.• Prices pressured by: energy, devaluation of the US currency, labor and inputs supply shortages, environmental concerns and export-barriers.• Production capacity is not sufficient (obsolete equipment, interruptions due to debottlenecking, longer lead times to build new production capacity.Consequence: Unbalanced supply and demand

Commodities• Booming demand mainly due to growing global economy, level of urbanization and industrialization in emerging markets.• Prices pressured by: energy, devaluation of the US currency, labor and inputs supply shortages, environmental concerns and export-barriers.• Production capacity is not sufficient (obsolete equipment, interruptions due to debottlenecking, longer lead times to build new production capacity.Consequence: Unbalanced supply and demand

Brumado Plant• Natural shield against pressures of magnesite sinter prices. Studies underway for expansion to supply both domestic and exports markets.

Brumado Plant• Natural shield against pressures of magnesite sinter prices. Studies underway for expansion to supply both domestic and exports markets.

CementMarket will remain heated due to higher credit availability.

CementMarket will remain heated due to higher credit availability.