Cia. Vale do Rio Doce plans to sell as much as $12.8 billion of new shares, the biggest offering in Brazilian history, to fund projects and acquisitions intended to create the world's largest mining company.

The sale of up to 256.9 million common shares and 164.4 million preferred shares will take place as soon as tomorrow, Vale said today in a statement. The shares, excluding underwriters' over-allotments, are worth 20.5 billion reais ($12.8 billion), based on yesterday's closing price in Sao Paulo.

``If Vale gets these resources, it must be for a possible acquisition,'' said Daniel Gorayeb, a metals and mining analyst for Sao Paulo-based broker Spinelli SA. ``The offer will certainly be oversubscribed.''

Rio de Janeiro-based Vale, which bought Canadian nickel producer Inco Ltd. last year, said June 10 it would sell as much as $15 billion in stock to pay for expansion and possible takeovers. Vale, which abandoned a $90 billion bid for Xstrata Plc in March, said this week it may try to buy a copper smelter and a phosphate-fertilizer unit from Brazil's Paranapanema SA.

Vale preferred shares fell 69 centavos, or 1.6 percent, to 42.71 reais at 5:09 p.m. in Sao Paulo. The company's common shares fell 1.24 reais, or 2.4 percent, to 50.95 reais.

$59 Billion Investment

An acquisition would be in addition to the $59 billion that Vale, led by Chief Executive Officer Roger Agnelli, is already spending over five years as it tries to overtake BHP Billiton Ltd. as the world's top mining company. With the investment, Vale aims to increase annual iron-ore output by 40 percent to 450 million metric tons by 2012, equal to more than a third of global seaborne trade of the commodity. Vale also plans to double nickel and copper output to about 500,000 tons and 592,000 tons, respectively.

The share sale is the ``next step in the process to strategic development or acquisition,'' Cristiane Viana, a Rio de Janeiro-based analyst with broker Agora Corretora, said by telephone. She recommends buying Vale shares.

O Estado de S. Paulo newspaper reported June 10 that Vale was considering a bid for Anglo American Plc, Alcoa Inc. or Freeport-McMoRan Copper & Gold Inc.

Biggest-Ever Share Sale

Vale's share offering, equal to about 8.7 percent of its market capitalization, would be the biggest ever by a Brazilian company, according to the country's securities regulator. The government and minority shareholders first sold a stake in Vale for 3.34 billion reais in 1997.

Vale said last month its controlling shareholder, Valepar SA, will maintain its 53.3 percent stake by buying shares in the sale. Valepar is controlled by Bradespar SA and Previ, the employee pension fund of state-controlled Banco do Brasil SA.

Credit Suisse Securities LLC will manage the Vale share sale, in which international investors may opt to receive American depositary receipts, Vale said.

Vale will apply to list its ADRs on the Paris-based Euronext exchange. Shareholders who are residents of Brazil will have priority in the sale.