Vale S.a. · BMFBOVESPA:VALE3
Vale — Investor Day (December 2021)
79 slides from Vale's investor day presentation, Dec 1, 2021
Slide 1: 1
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Slide 2: Disclaimer
2 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 involve various risks and uncertainties. Vale cannot guarantee that such statements will prove correct. These risks an
Slide 3: Our Strategic Pillars remain solid
3 Our Strategic Pillars remain solid Vale Day 2021 New pact with society Safety and operational excellence Base Metals transformation Discipline in capital allocation Maximize flight-to-quality in Iron Ore Vale engineer Maria Aparecida Pinho Martins, Gelado Program, Parauapebas (PA), Brazil
Slide 4: Reparation, People & Safety
4 Reparation, People & Safety Eduardo Bartolomeo, CEO Carlos Medeiros, Executive Vice President Safety and Operational Excellence 1
Slide 5: We will never forget Brumadinho
5 We will never forget Brumadinho “Sowing Hope” Project for emotional support to affected people
Slide 6: Brumadinho reparation video
¢ a Se wr Ss a Brumadinho reparation vee @ et] wes le Click here to watch a video
Slide 7: Brumadinho, a fair and quick reparation
7 1 Brumadinho, a fair and quick reparation Individuals with indemnification agreements² In thousands 4.6 12.0 4.7 2.7 2019 2019- 2021E 2020 2021E³ Income Transfer Program for local communities Water security for the affected region ~55% of total payments¹ as per the Integral Reparation Agreement Re
Slide 8: Boosting changes for a talent-driven, inclusive organization
8 Boosting changes for a talent-driven, inclusive organization Our targets 66% 33% reduction in women voluntary turnover of black trainees hired in the 2021 program 80% additional women in the workforce² +4,500 increase in senior female leaders 80% managers active in culture transformation1 99% crit
Slide 9: Cultural transformation monthly assessed to ensure progress
9 Cultural transformation monthly assessed to ensure progress Echoes Pulse – Employees' perception of key behaviors +16,000 employees take part of Echoes Pulse 82% 85% +3 Obsession with safety and risk management Active listening and engagement with society Ownership for the whole Empowerment with a
Slide 10: Cultural transformation is supported by Vale's management model
10 Cultural transformation is supported by Vale’s management model
Slide 11: Becoming a best-in-class reliable operator with VPS
11 2021 1.08 2019 2.43 -56% 20.9 90.4 2019 2021 +333% EFVM railway Total recordable injury frequency rate - TRIFR Maintenance Plan Adherence - MPA (%) 1.67 1.37 2019 2021 -18% 52.8 72.4 2021 2019 +37% Itabira Complex 4.23 2019 1.51 2021 -64% 2021 44.6 2019 83.6 +87% Tubarão Port Becoming a best-in-c
Slide 12: Building a sustainable performance in OH&S
12 Building a sustainable performance in OH&S¹ 66 57 44 25 63 35 25 15 10 5 0 2022 2020 2018 2019 2021 2023 2025 2024 Reduction of high-potential recordable injuries N2 - absolute values² Target N2 N2 (10M21) Total recordable injury frequency rate (TRIFR) 1.98 1.84 2.14 2.65 3.21 Vale Peer 1 Peer 3
Slide 13: Strengthening risk management through HIRA
13 .. Replacement of liquid chlorine by bleach .. Replacement of liquid propane storage in large volumes by on- demand natural gas .. Replacement of liquid chlorine by bleach .. Replacement of liquid propane storage in large volumes by on- demand natural gas .. Reduction of ammonium nitrate inventor
Slide 14: Eliminating upstream dams
14 Eliminating upstream dams 5 8 14 16 16 19 29 5 7 12 13 17 20 27 30 2025 2022 2024 2035 2019- 2020 2023 2021 2029 Vale Day 2020 2021 Update Number of structures (cumulative view) 7 eliminated since 2019 23 remaining Upstream¹ Dam² De-characterization Program Completion by 2035 2 completed in 2021
Slide 15: Click here to watch a video
15 Click here to watch a video
Slide 16: Making progress with dam safety
16 Making progress with dam safety 1 Reparation, People & Safety ¹ Includes dams, dikes and drained stacks. As per the Brazilian regulation and as provided for in each Mining Dams Emergency Action Plan, considering level 3 as the critical emergency level. ² Considering the maximum number of structur
Slide 17: Vale will comply with the Global Industry Standard for Tailings Management
17 Vale will comply with the Global Industry Standard for Tailings Management Vale Industry .. The GISTM is launched, based on 15 principles (Aug 2020) .. The 77 auditable requirements for adherence are made public (May 2021) .. All tailings facilities with “Extreme” or “Very high” potential consequ
Slide 18: New Pact with Society
18 New Pact with Society Eduardo Bartolomeo, CEO Luciano Siani Pires, Executive Vice President Strategy and Business Transformation 2
Slide 19: Leveling up ESG practices
19 .. 2030 agenda revised .. Industry leader renewable energy .. Scope 1, 2 and 3 targets .. Non-GHG targets Environmental . Climate Change report .. ISO 14001 certification (ongoing) 2 Leveling up ESG practices .. +300 community relationship plans under execution .. Formal Human Rights Due Diligenc
Slide 20: Click here to watch a video
20 Click here to watch a video
Slide 21: We have defined our social ambition
21 We have defined our social ambition... .. Education .. Health .. Income Generation Resilient communities .. Human Rights (including Indigenous Peoples) .. Amazon Global causes “To be a partner company in the development of resilient communities, engaged in relevant issues to humanity and committe
Slide 22: Our 2030 Social Goals
22 … and our 2030 Social Goals Resilient communities Lift 500,000 people out of extreme poverty¹ Indigenous Peoples Indigenous communities neighboring Vale operations with UNDRIP2 rights plans Sustainable Mining Rank Top 3 in the social requirements of the main external assessments 2 New Pact with S
Slide 23: We are in line to transform the future
23 We are in line to transform the future Reduce scope 1 and 2 emissions by 33% by 2030¹ 100% renewable electricity Brazil (2025), globally (2030) Forests recover and protect +500,000 ha (2030) Net zero scope 1 and 2 emissions by 2050 Reduce Scope 3 net emissions by 15% by 2035² Fresh water reduce u
Slide 24: On our path to reach net zero by 2050
24 On our path to reach net zero by 2050 2 Main technological routes Energy efficiency and renewables Bioenergy Electrification New processes Prioritization of operational emission reductions Nature-based solutions with socioenvironmental co-benefits High-integrity carbon markets 1 2 3 Our drivers 5
Slide 25: Click here to watch a video
25 Click here to watch a video
Slide 26: Our low carbon agenda advances
26 Our low carbon agenda advances Vale Zoo and Botanical Park Parauapebas (PA), Brazil
Slide 27: We have taken important steps on our Scope 3 targets
27 We have taken important steps on our Scope 3 targets Vale’s own initiatives (15-25% of the challenge) .. Improving our high-quality portfolio .. Developing new technologies and asset light solutions 94% 2% 3% 1% Shipping Steelmaking Use of coal Suppliers Scope 3 emissions¹ - BAU² % Partnerships w
Slide 28: Naturally well-positioned for low-carbon mining
28 We are naturally well-positioned for a low-carbon mining Iron Ore premium portfolio 63.6 60.8 60.4 57.8 Vale Peer 2 Peer 1 Peer 3 Future 2020 Average Fe content %Fe Seaborne supply by Fe grade %, 2020 28% 25% 22% 59% 83% 66% 70% 19% 17% <60% 7% 64-60% 66-64% >66% 5% Others Vale Peer 1, 2 and 3 Ni
Slide 29: Maximize flight-to-quality in Iron Ore
29 Maximize flight-to-quality in Iron Ore Marcello Spinelli, Executive Vice President Iron Ore 3
Slide 30: New way to operate
30 New way to operate Tailings filtration plant Vargem Grande Complex
Slide 31: New projects to reduce the reliance on tailings dams
31 New projects to reduce the reliance on tailings dams Iron ore production by method Mt Dry processing additions Implement tailings filtration plants Dry processing additions Develop dry concentration solutions 300 ~15% ~70% 40% 400 2015 ~1% 73% 58% 2018 2020 400 Mtpy production level1 346 385 Dry
Slide 32: Delivering tailings filtration plants: more quality, fewer dams
32 Delivering tailings filtration plants: more quality, fewer dams US$ 1.2 billion invested in 2019-21 US$ 1.3 billion to be invested in 2022-25 Maximize flight-to-quality in Iron Ore 3 Note: Includes investments in tailings stockpiles. Physical progress as of October 30th, 2021. 2nd phase of each p
Slide 33: Click here to watch a video
33 Click here to watch a video
Slide 34: Dry concentration: more quality, no water, no dams
34 Dry concentration: more quality, no water, no dams Dry concentration capacity Mtpy 1.5 9.5 8.5 6.0 2.0 Vargem Grande Fazendão Fábrica Dry concentration capacity Oman (PF cleaner)2 Expected approval 2023 Expected approval 2023 Expected approval 2022 Start-up 2023 Under construction Under evaluatio
Slide 35: Co-products: recycling dry tailings
35 1 Tailings from current production. 2 Operations in Itabira and Vargem Grande are under analysis for the future. 3 Sales and donations. 4 As an example, the creation of local industries and jobs creation. Co-products operations in place at Brucutu and plans for Viga in 20222 Sand as a raw materia
Slide 36: Extended supply chain services delivering value for clients
36 Extended supply chain services delivering value for clients .. >75% of sales under CFR model with most volumes being transported in large vessels .. Reduced exposure to spot market with long- term affreightment contracts .. 17 ports in China and 2 distribution centers in Malaysia and Oman .. Solu
Slide 37: Vale will reach capacity in the medium term with its new way to operate
37 Vale will reach 400 Mtpy capacity in the medium term with its new way to operate… Capacity (Mtpy) Long term Vale Day 2021 Medium term Northern System 240-260 203 215 205 End of 2022 Southeastern System 110-120 70 113 93 Southern System 70-85 65 69 69 Midwestern System 3 3 3 3 400-450 341 400 370
Slide 38: Value over volume approach
38 … and value over volume approach will continue defining production and sales strategy 300 2020 2021E 315-320 320-335 2022E Iron ore production Mt 63.6% 62.9% 63.5% Iron ore sales Fe content (%)1 Maximize flight-to-quality in Iron Ore 3 Higher Fe content Value over volume strategy 1 Considers sale
Slide 39: Best in class portfolio supporting industry decarbonization
39 Best in class portfolio supporting industry decarbonization S11D mine second stockyard S11D, Carajás (PA), Brazil
Slide 40: Delivering solutions to improve Vale's portfolio
40 Beyond enhancing quality, we are delivering solutions to improve Vale’s portfolio Dry concentration Enabling the production of up to 68% Fe content from low Fe ROM Direct charge products Leading world’s pellets and green briquettes production Increasing Northern System high-quality production to
Slide 41: Green briquette is a breakthrough environmentally friendly solution
41 Green briquette is a breakthrough environmentally friendly solution Exclusive technology 18 years of in-house R&D Technology patented1 in 47 countries Blast furnaces: reduction of over 10% in BF-BOF route2 Direct reduction furnaces: capacity to supply the increasing demand Less CO2 emissions Briq
Slide 42: Multiple ways to decarbonize and engaging with clients
42 There are multiple ways to decarbonize and we are engaging with clients on this journey Green briquette plants Dry concentration plants Tecnored technology Metallics Burden mix optimization High-grade products usage Biocarbon usage Direct reduction technologies Potential client solutions North Am
Slide 43: Rebuilding Vale's competitiveness
43 Rebuilding Vale’s competitiveness Bulk vessel with rotor sails technology
Slide 44: Capacity resumption is key to remove inefficiencies and cost savings
44 Capacity resumption is key to remove inefficiencies and promote cost savings… Maximize flight-to-quality in Iron Ore 3 Production costs (US$/t) Timbopeba site .. 2022: 12% production increase in 2022 and normalized railway operations .. Medium-term: Start-up of Capanema project in 2H23 with dry p
Slide 45: Dilution of fixed costs: C1 cash cost
45 Dilution of fixed costs New way to operate2 ~17 Dilution of fixed costs 2021E -0.7 -1.0 Cost efficiency1 2-3 0.5 15.5-16 2023 -1.0 -1.0 Cost efficiency1 14-15 400 Mtpy production 10.5-12 14-15 …reducing C1 cash cost level Vale’s iron ore fines C1 cash cost (ex. 3rd party purchase) US$/t Maximize
Slide 46: Vale has a winning shipping strategy
46 Vale has a winning shipping strategy Vale’s average freight cost 2021E3 ~27 ~16 Spot freight 2021E2 Valemax 2G/ Guaibamax 2021E ~13 ~19 Vale’s medium term freight cost3 4 Freight costs US$/t Efficient vessels 65+ Valemaxes 1G+2G / 45+ Guaibamaxes Scrubbers installed on dedicated fleet Lower bunke
Slide 47: Decarbonization and portfolio improvements lead to higher premiums
47 Decarbonization and portfolio improvements lead to higher premiums for Vale All-in premiums1 Market environment Vale’s portfolio US$ ~10/t 2018 .. Chinese supply side reform .. High steel margins .. High availability of pellet feed and pellets .. Flexibility to produce close to 400 Mtpy US$ ~6/t
Slide 48: Vale is rebuilding its competitiveness: capacity, value and green
48 Altogether, Vale is rebuilding its competitiveness: capacity, value and green ~3 Iron ore price effect 2-6 ~45 Freight efficiency 2021E C1 ex-3rd party purchase ~3 ~2.5 Premium Others1 Future premiums (potential) ~35 400 Mtpy production level 30-35 400 Mtpy production level (price adjusted) 0-6 <
Slide 49: Base Metals transformation
49 Base Metals transformation Mark Travers, Executive Vice President Base Metals 4 Questions? valeday2021@vale.com
Slide 50: 2021 was a challenging year
50 2021 was a challenging year .. Broad safety reviews and strategy to drawdown maintenance backlog to improve safety standards .. Delays in maintenance at Sossego due to COVID restrictions – contractors’ mobilization .. Critical maintenance activities at Sossego mill and Onça Puma furnace .. 2-mont
Slide 51: Key milestones in the path to performance recovery in 2022
51 For 2022, we have key milestones in the path to performance recovery Base Metals Transformation 4 2021 2022 295-300 330-355 2022 2021 165-170 175-190 Copper production Nickel production .. Stable production at North Atlantic mines .. Improvement in Salobo mine movement .. Planned maintenance at S
Slide 52: Strengthening our copper portfolio in Carajás
52 Strengthening our copper portfolio in Carajás Former Igarapé Bahia Gold Mine, location of future Alemão project, Parauapebas (PA), Brazil
Slide 53: A Tier 1 mining complex leveraged by synergies
53 A Tier 1 mining complex leveraged by synergies Base Metals Transformation 4 Copper dedicated railway terminal and railcar fleet Copper concentrates terminal at Itaqui port Copper mines Copper projects Copper options
Slide 54: We are advancing Salobo
54 We are advancing Salobo 3 ¹ New processing plant with a nominal processing capacity of 12 Mtpy of ore. ² Life-of-mine average. Yearly production may vary as a result of mine plan. ³ Subject to feasibility studies, internal approvals and market conditions Commissioning of facilities to start in 1H
Slide 55: Taking Carajás towards growth
55 … and taking Carajás towards growth Alemão: approaching the next big step towards Carajás growth Adding on optionality to South Hub extension Developing future growth options Progressing on Cristalino feasibility study Advancing on satellite deposits studies to provide optionality e.g., Bacaba On
Slide 56: Developing a world-class copper discovery: Hu'u Project
56 Developing a world-class copper discovery: Hu’u Project Base Metals Transformation 4 Completion of the assessment of alternatives for the pre-feasibility study¹ Onto deposit estimated to contain 17.4 Mt of copper and 32 Moz of gold in resources². Equates to an increase of ~15% in contained copper
Slide 57: Progressing on project development
57 Progressing on project development… Pre-feasibility FEL 2 Feasibility FEL 3 South Hub Ext.: Cristalino 80 ktpy South Hub Extension: Cristalino Alemão +60 ktpy 2019-20 2021 North Hub +70-100 ktpy Alemão Investment Decision 2022-23 2023 South Hub Extension¹ Other satellites Scoping FEL 1 2024+ 2026
Slide 58: Delivering growth with long-term potential
58 … to deliver on growth with long-term potential 2023-26 2022 2027+ Hu’u North Hub Salobo IV South Hub expansion LT with optionalities 330-355 390-420 450+ 30-40 70-100 30 300-350* 900+ Scoping Pre-feasibility Investing in mid-term growth Building on optionality to 900 kt and beyond + Upside from
Slide 59: Transforming our Base Metals Business
59 Transforming our Base Metals Business
Slide 60: Progressing on our Nickel agenda
60 Progressing on our Nickel agenda Approval of Manitoba Extension Phase 1 First ore achieved at VBME² Conclusion of VNC¹ sale Update (pixel) Base Metals Transformation 4 First ore achieved at CCM 1³ South mine ¹ VNC stands for Vale New Caledonia. ² VBME stands for Voisey’s Bay mine extension. ³ CCM
Slide 61: Well-positioned to pivot towards North Atlantic EV
61 Well-positioned to pivot towards North Atlantic EV 57 628 2020 2025 2030 295 Current Future US Megafactory capacity expected growth GWh 1 GWh = ~0.7kt of nickel² Signed a long-term agreement with OEM to sell 5% of our Class I nickel to North America Target to achieve 30-40% of Ni to North America
Slide 62: Delivering on stability in Nickel
62 Delivering on stability in Nickel Ramping up VBME Advancing on replacement projects in North Atlantic Onça Puma: optimizing growth opportunities in South Atlantic Replacing capacity at Voisey’s Bay Replacing capacity in North Atlantic Adding capacity in South Atlantic 2nd furnace Optionality Addi
Slide 63: Exploring Canadian high-quality resources
63 Exploring Canadian high-quality resources Drilling exploration campaign planned for the next 5 years targeting near-mine to advanced projects (> 300Km per year) Base Metals Transformation 4 Thompson Sudbury Voisey’s Bay .. Advancing exploration studies on large ultramafic-hosted Ni deposits .. Ex
Slide 64: Unique access to higher quality nickel in Indonesia
64 Unique access to higher quality nickel in Indonesia One of the largest Ni resource in Indonesia¹ Currently produces 70-80 kt of Ni in matte PTVI matte feeds into Matsusaka-Clydach flowsheet Beyond-compliant environmental management² Bahodopi - RKEF 70kt Ni 100% mine; 49% plant Pomalaa - HPAL 40kt
Slide 65: Building a stable business
65 Building a stable business Pre-feasibility FEL 2 Feasibility FEL 3 OP 2nd furnace +12-15kt Investment Decision 2022 CCM 3&4 Scoping FEL 1 2023+ Manitoba Extension Ph 2 2024+ CCM 3&4 2019-20 2021 REPLACEMENT GROWTH Base Metals Transformation 4 2024+ 2022-23 175-190 200+ *Peak at ~220kt as Onça Pum
Slide 66: Transforming our Base Metals business
66 Transforming our Base Metals business Base Metals Transformation 4 Unique access to higher quality nickel in Indonesia Well-positioned to pivot towards North Atlantic EV A Tier 1 mining complex with growth optionality
Slide 67: Discipline in capital allocation
67 Discipline in capital allocation Gustavo Pimenta, Executive Vice President & CFO 5
Slide 68: Focused on delivering superior value to our shareholders
68 .. Benchmark in safety .. Best-in-class reliable operator .. Talent-driven organization .. Leader in low-carbon mining .. Reference in creating and sharing value Re-rating De-risking Reshaping Sound cash flow generation Discipline in capital allocation Reshaping Discipline in capital allocation 5
Slide 69: Reparation Agreement brought certainty on Vale's disbursements
69 Reparation Agreement1 US$ billion The Reparation Agreement brought certainty on Vale’s disbursements 1 Amounts stated include inflation and do not include discount to present value, considering average BRL/USD exchange rates in 2019 of 3.95, in 2020 of 5.2 and of 5.4 for 2021 onwards. It does not
Slide 70: 2022, a year of important deliveries for the Renova Foundation
70 2022, a year of important deliveries for the Renova Foundation Discipline in capital allocation | De-risking 5 Acceleration of individual indemnifications following Federal Court decisions Final revision of 42 programs under the existing agreement framework Peak spending and delivery on resettlem
Slide 71: Simplifying the portfolio to deliver on the reshaping
71 CSA Fertilizer assets in Brazil Potash projects in Canada Coal assets in Australia Zhuhai YPM Mosaic Moatize CSI Manganese ferro-alloy in Minas Gerais, Brazil CSP Henan Longyu Energy Resources VNC Biopalma Fertilizer assets in Peru Potássio Rio Colorado 2015 2021 2018 2020 MRN What is next? Simpl
Slide 72: Significant decrease of our cash drains
72 … leading to a significant decrease of our cash drains Discipline in capital allocation | Reshaping 5 1 VNC result in 2021 does not consider the US$ 555 million paid for the divestment. ³ Including Samarco’s working capital needs. ³ Including Biopalma and CSP needs US$ million Moatize VNC1 1,480
Slide 73: Cost efficiency reduction program
73 Focusing on cost efficiency with an US$ 1 billion reduction program… Discipline in capital allocation | Reshaping 5 Note: Compared to 2021 figures. Considering current operations and excluding effects of exchange rates variation. .. A leaner and more efficient organization .. Removal of inefficie
Slide 74: Freeing up resources for growth opportunities
74 … freeing up resources for growth opportunities Discipline in capital allocation | Reshaping 5 Gelado12 +10 Mtpy Serra Leste expansion6 Serra Sul +20 Mtpy Northern System8 260 Mtpy Salobo III +30-40 ktpy CCM PH 3&41 Onça Puma 2nd furnace +12-15 ktpy North Hub6 +70-100 ktpy Hu’u10 +300-350 ktpy Cr
Slide 75: Disciplined capital allocation focused on shareholder return
75 A disciplined capital allocation focused on shareholder return… Discipline in capital allocation | Re-rating 5 36% Through the cycle Return surplus cash Attractive investment 1 Including liability management, financial guarantees, acquisitions and sale of assets. Including dividends and interest
Slide 76: EBITDA 2023 sensitivity analysis and cash flow drivers
76 … which should remain our focus as we resume capacity and manage cash use EBITDA 2023 - Sensitive analysis (US$ billion) 5 Cash Flow Drivers Iron ore price (US$/t) mid-point based on analysts’ forecast ~17.0 ~17.5 350 360 ~20.0 ~20.5 ~23.5 ~24.0 100 90 80 Iron ore sales volumes (Mt) 340 ~16.5 ~19
Slide 77: Important catalysts to unlock value in the next 12-18 months
77 Important catalysts to unlock value in the next 12-18 months Discipline in capital allocation 5 Note: Capacity additions and cost savings compared to 2021E figures. Considering current operations and excluding effects of exchange rates variation. .. Iron Ore: 30+ Mt Volume mainly from Itabira and
Slide 78: Questions & Answers
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Slide 79: Signatures
79 Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Vale S.A. (Registrant) By: /s/ Ivan Fadel Date: November 29, 2021 Head of Investor Relations