In the middle of the twentieth century, increasingly influential political and business interest groups invoked long-entrenched traditional practices in order to pursue dynamic industrial policies. This chapter explores the formation of a state-owned enterprise (SOE) for iron ore mining in the context of coordinating complex institutional and material requirements. The Brazilian government reverted to earlier property definitions that established its sovereignty over the subsoil and mineral resources, and it used the global strategic circumstances of World War II to great advantage. As a result, the state promoted large-scale industrial development in the twentieth century by consolidating a strong entrepreneurial role for itself within the productive sectors of the economy. Much historiography addresses the early formation of the capital-goods industries. The National Steel Company (Companhia Siderúrgica Nacional, CSN) was the lynchpin of that effort. The iron ore story is less well known; but its institutional implications were as profound as the efforts to produce steel. The transformation of the British-owned Itabira Iron Ore Company into Companhia Vale do Rio Doce (Vale), an SOE, demonstrates the expansion of the concept of the public domain that was crucial to institution-building of the period.

Defining the domestic iron ore mining and steel manufacture as strategic industries hinged on the large important externalities of enhancing both national military security and rapid, broad-based industrialization.