Vale S.a. · BMFBOVESPA:VALE3
Vale — Corporate Update (March 2019)
26 slides from Vale's corporate update, Mar 28, 2019
Slide 1: Disclaimer
“This presentation may include statements that present Vale's expectations about future events or results. All statements, when based upon expectations about the future and not on historical facts, involve various risks and uncertainties. Vale cannot guarantee that such statements will prove correct
Slide 2: Agenda
1. Emergency response 2. Financial and operational impacts Agendaa
Slide 3: 1. Emergency response
1. Emergency response 2. Financial and operational impacts
Slide 4: Humanitarian emergency aid: medical support and help centers
5 Action has been taken in humanitarian emergency aid Medical support and help centers • More than 400 professionals actively working in 5 service stations in Brumadinho, Nova Lima and Barão dos Cocais 10 hospitals and health units in service More than 6,800 medical and psychological consultations M
Slide 5: Humanitarian emergency aid: transportation, accommodation and other support
6 Action has been taken in humanitarian emergency aid Transportation, accommodation and other support • 322 accommodations available • 125 houses being rented for the families • Toll-free call center • More than 44 million liters of water for human and animal consumption and agricultural irrigation
Slide 6: Humanitarian emergency aid: donations
7 Action has been taken in humanitarian emergency aid Donations • • R$ 100,000 donation to the families of each victim of the dam breach: 269 payments made R$ 50,000 donation, by residence, to those who resided in the Self-Rescue Zone (“ZAS – Zonas de Auto-Salvamento”): 91 payments made • R$ 15,000
Slide 7: Humanitarian emergency aid: financial support
8 Action has been taken in humanitarian emergency aid Financial Support • R$ 20 million will be invested to purchase equipment, structural improvements and professional training for the Fire Department of MG¹ • More than R$ 289 million allocated for medicine acquisition, water, equipment and other l
Slide 8: Board established three Extraordinary Independent Consulting Committees
9 The Board of Directors established three Extraordinary Independent Consulting Committees addressing key issues in response to the dam breach Dedicated to follow-up on the measures taken to support the affected people and the recovery of the areas affected by the breach of the dam, assuring that al
Slide 9: Quick response culminating in the Preliminary Agreement for Indemnification
10 The quick response to the dam breach culminated with the signing of the Preliminary Agreement for Indemnification... Management established a Crisis Committee BoD established three Extraordinary Independent Consulting Committees (“CIAE”). CIAE for Support and Recovery, CIAE for Investigation and
Slide 10: Agreement reinforcing cooperation between Vale and Brazilian authorities
11 ...an agreement that reinforces the cooperation between Vale and Brazilian authorities Broad coverage for accelerated indemnification… • Emergency indemnification to all residents of Brumadinho and those who resided within a 1km radius of the Paraopeba riverbed, between Brumadinho and Retiro Baix
Slide 11: Emergency compensation payment schedule
12 Emergency compensation payment schedule More than 1,300 payments have already been made for residents of Parque da Cachoeira and Córrego do Feijão • The service are being carried out at Indemnity Registration Stations, from Monday to Saturday, from 8 am to 6 pm, in each location until the end of
Slide 12: About relocations
13 About relocations Impacted by the breach of the Dam I in Brumadinho or residents of the Self-Saving Zones (“ZAS – Zonas de Auto-Salvamento”) of Superior, B3/B4, Vargem Grande, Forquilhas l, ll, Ill and Grupo the Sul dams • People allocated in temporary housing, hotel, inns or with friends and rel
Slide 13: Animal care in remediation initiatives
14 Animal care is included in the scope of remediation initiatives Specialized helicopter for Field hospital for animals assistance in rescuing animals • 190 professionals (among veterinarians, biologists and technicians) dedicated to rescuing the local fauna Treatment of birds, reptiles, horses, bo
Slide 14: Tailored approach to sections affected: dikes, dredging
15 A tailored approach to each of the sections affected in the Dam I area and along the Paraopeba river 1st section: Dikes, hydraulic barriers and bridge construction • • • • • • Covers the area of up to 10 Km from the Dam I breach site Construction of dikes for retention of heavier tailings Ongoing
Slide 15: Control membranes and water monitoring
16 A tailored approach to each of the sections affected in the Dam I area and along the Paraopeba river 3rd section: Control membranes and water monitoring • 170 km stretch of the Paraopeba river between Juatuba and the Retiro Baixo Plant Sediment control barriers – turbidity membranes 5 in total, 3
Slide 16: Monitoring of water quality from Paraopeba to São Francisco river
17 Monitoring of water quality from the Paraopeba river to the São Francisco river mouth every hour at four Updated on March 21st, 2019. The turbidity plume is in the reservoir at the Retiro Baixo plant, approximately 300 kilometers from the breach site Turbidity analyses different points Daily coll
Slide 17: Analyses of water, soil, tailings and sediment
18 Analyses of water, soil, tailings and sediment collected from the Paraopeba river Studies show that the river can be recovered; sediments were classified as non-hazardous to health • The work is being carried out by specialized laboratories hired by Vale (~250 professionals) • Vale hired the Coor
Slide 18: Financial and operational impacts
Financial and operational impacts
Slide 19: Annualized impacts in production
20 Annualized impacts in production Mtpy Includes pellet feed used in the production of 11 Mtpy of pellets Feijão, Fábrica and Vargem Grande Brucutu Timbopeba Alegria Total Sales higher than production in 2019 (consumption of inventories) 10 93 40 30 13
Slide 20: Supply of domestic market
21 Supply of domestic market Main flows before Jan/2019 ---New service routes New flows for domestic market .... ...' \ \ I I, I I '/ It '' ' ' '\ ', - -.: ' ' ' \ 'I I I I I I ...,.,."' ,' \ / I, · .... --.....,..,."' ,, , ,,' I. ' ''' '•
Slide 21: Supply of seaborne market and product portfolio management
22 Supply of seaborne market Product portfolio management Pellets BRBF IOCJ production portfolio of market utilize pellet feed (e.g. • Prioritization of pellet feed for pellet - Removal of the niche products which SFLA) • Contractual volumes guaranteed • Volume supply adjusted to spot market price •
Slide 22: Judicial freezing of funds
23 Judicial freezing of funds R$ billion Agreement signed at conciliation hearing MPMG¹ - Environmental Impact MPMG¹ - Socioeconomic Impact MPMG¹ - Evacuation of Sul Superior dam MP², Federal Govern and State of Minas Gerais MPMG¹ - Evacuation in Macacos community Public Minister of Labor Total ¹ Pu
Slide 23: Impacts on indebtedness
24 Impacts on indebtedness • Credit Ratings - - - Fitch – downgraded to BBB-in 01/29/19 Moody’s – downgraded to Ba1 in 02/27/19 S&P – reaffirm BBB-rating with negative outlook in 03/21/19 • Increased cost of funding • Increase in net debt with reduction of average debt maturity: funding through shor
Slide 24: Fines applied
25 Fines applied R$ million IBAMA¹ State of Minas Gerais Total ¹ Brazilian Institute of Environment and Renewable Natural Resources (Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renováveis – IBAMA) 349 250 99
Slide 25: Accounting impacts
26 Accounting impacts Provisions Write-off ¹Public Minister of Labor (Ministério Publico do Trabalho – MPT) 1Q19: assets from Córrego de Feijão mine and related to upstream dams in Brazil To be made in accordance with signed agreements •Partial agreement with MPT¹ •Preliminary Agreement with the Fed
Slide 26: Accounting impacts
26 Accounting impacts + Accounting view: subsequent event to Dec 31, 2018 + Preliminary stage of investigations, procedures and law suits + Accounting impacts will be reflected in 2019 (beginning at 1019) Provisions Write-off To be made in accordance with signed agreements Partial agreement with MPT