Vale S.a. · BMFBOVESPA:VALE3
Vale — Investor Day (September 2021)
54 slides from Vale's investor day presentation, Sep 9, 2021
Slide 1: 21st Analyst & Investor Tour
September 9th, 2021 21st Analyst & Investor Tour Iron ore briquettes stockpile
Slide 2: Agenda and Disclaimer
Agenda 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 .. The
Slide 3: Marcello Spinelli
September 9th, 2021 21st Analyst & Investor Tour Marcello Spinelli
Slide 4: A world requiring green materials: steel industry transformation
A world requiring green materials Steel industry transformation started, strongly driven by GHGE reduction regulations 4 Phase 2 Decarbonization Run Phase 1 Pathway Definition Phase 3 Mainstream Adoption 2020 2030 2040 2050 2060 CO2 neutrality -30% CO2 Regulatory pressure CO2 neutrality Steelmakers
Slide 5: Technological shift faces three challenges
A world requiring green materials Technological shift faces three challenges 5 High investment required Higher fuel costs High-quality ore supply Fuel cost1 (US$/t coal eq.) NG² w/ CCS3 Coal Blue hydrogen Biocarbon Green hydrogren Source: Vale’s estimates. 1 Assumptions: Biochar@$250/ton; Electricit
Slide 6: Leading to solid premiums in long term
A world requiring green materials Leading to solid premiums in long term 6 4,1 4,9 6,6 8,8 BF3 (w/o carbon price) BF3 (w/ carbon price) Low Fe HBI4 (w/ natural gas) in melter (w/ biocarbon) HBI4 (w/ natural gas) in EAF5 63,6 60,8 60,4 57,8 Peer 2 Vale Peer 1 Peer 3 Premium for 1% Fe additional1 US$/
Slide 7: Rogerio Nogueira
September 9th, 2021 21st Analyst & Investor Tour Rogerio Nogueira
Slide 8: Pioneer scope 3 net emission reduction target
Progressing on portfolio’s decarbonization Advancing with our pioneer scope 3 net emission reduction target 8 Note: Vale is also committed to revising its scope 3 target in 2025 and every 5 years, in order to reevaluate technological developments and global climate policy advancements. 1 BaU stands
Slide 9: Vale's own initiatives support steel decarbonization
Progressing on portfolio’s decarbonization Vale’s own initiatives support the steel industry decarbonization 9 30 6 5 Dry concentration technology Vale’s main initiatives Iron ore briquettes Low Fe HBI Tecnored (pig iron 100% biomass) Biomass in blast furnace (PCI) Asset-light solutions Initiative’s
Slide 10: Briquetting is a breakthrough technology patented by Vale
Briquetting is a breakthrough technology developed in-house and patented by Vale 1 Patented or in submission process. Applications Substitute for sinter, pellet and lump in blast furnaces Substitute for pellets in direct reduction furnaces Exclusive technology 18 years of in-house R&D Technology Pat
Slide 11: Briquetting is environmentally friendly
Progressing on portfolio’s decarbonization It is environmentally friendly: less fossil fuels, particulates and water usage GRINDING THICKENING FILTERING PRESSING MIXING BRIQUETTING DRYING ~200ºC SCREENING Briquetting GRINDING THICKENING FILTERING PRESSING MIXING PELLETIZING FIRING ~1300ºC SCREENING
Slide 12: Briquettes can replace sinter and reduce emissions
Progressing on portfolio’s decarbonization Briquettes can replace sinter and thus allow a reduction of over 10% in carbon emissions in the BF-BOF steelmaking route 12 Briquettes Current BF-BOF BOF Scrap Coke plant Pellet Lump Sinter feed Coking coal Sinter plant Blast furnace Steel products BF-BOF w
Slide 13: Three briquetting plants already under construction
Vargem Grande Tubarão 1 & 2 Projects under development Progressing on portfolio’s decarbonization Three briquetting plants are already under construction 13 • 0.75 Mtpy capacity (expandable option to 1.5 Mtpy) • US$ 50 million investment • Start-up by 2023 • Synergies with adjacent dry concentration
Slide 14: Developing a long-term green business
Progressing on portfolio’s decarbonization We are developing a long-term green multi million-dollar business 14 Half cost of pelletizing process Similar VIU to pellets Over 50 Mtpy production US$ 500 million incremental EBITDA over sinter feed Briquettes 80% less CO2 emissions vs. pelletizing proces
Slide 15: Dry concentration: no water, no tailings dam
15 No use of water = no tailings dam Final products with up to 68% Fe Dry concentration is a sustainable solution to produce high grade products Potentially integrated with other process routes Modular design
Slide 16: Dry concentration extends mine lifespan sustainably
Dry concentration Progressing on portfolio’s decarbonization Extending mines lifespan on a sustainable basis Production Dry processing Crushing and screening ROM 57% Fe Sinter feed and lump 57 - 60% Fe Future dry concentration ROM 43% Fe Use of low-grade ROM Crushing and screening Production Sinter
Slide 17: First dry concentration plant under construction
Progressing on portfolio’s decarbonization First industrial plant under construction and more to come 17 Three new plants to be approved 6 Mtpy 2 Mtpy Vargem Grande plant under construction Fazendão (approval by 2023) Fábrica (approval by 2023) Start-up by 2023 with 1.5 Mtpy capacity US$ 125-150 mil
Slide 18: Flexible asset-light solutions easing decarbonization
Asset-light solutions Progressing on portfolio’s decarbonization Flexible and integrated asset-light solutions easing the decarbonization transition 18 Direct reduction hubs may emerge in low energy cost locations Hydrogen Natural Gas H2 Biocarbon
Slide 19: Tecnored is a ready-to-use technology
19 Tecnored is a ready-to-use technology Technological uses “Green” low-cost pig iron production by potentially using biocarbon instead of coal Energy efficient and flexible carbon solution for melting scrap or low Fe HBI Plants underway Industrial scale plant in São Paulo Project in Pará under anal
Slide 20: Tecnored is a flex technology
Tecnored is a flex technology 20 Biocarbon can support energy transition Big supplier of biomass from eucalyptus, sugar cane and residues PCI substitute, coke substitute, coke breeze substitute in EAF Small scale pilot plant (25 ktpy) under construction with start-up in 4Q21 Briquetting biocarbon in
Slide 21: Promoting technological advance in steel industry
Progressing on portfolio’s decarbonization Promoting technological advance in steel industry 21 Investment of US$ 6 million in Boston Metal Company to promote the development of Oxide Electrolysis (MOE) technology Fostering new technologies 13 years of R&D developing solutions for industry and custo
Slide 22: Fostering innovative shipping solutions
22 We are also fostering innovative shipping solutions Valemaxes: largest vessels in industry Rotor sails: wind-assisted propulsion systems Air lubrication: reducing water resistance Click here to watch a video Click here to watch a video
Slide 23: Vagner Loyola
September 9th, 2021 21st Analyst & Investor Tour Vagner Loyola
Slide 24: Progressing on our resumption plan
Achieving 400 Mtpycapacity level We are progressing on our resumption plan 24 318 335 Investor Tour 2021 (Sep/21) Investor Tour 2020 (Sep/20) +17 Mtpy Iron ore production capacity (Mtpy) Main achievements Serra Leste resumption Northern System Timbopeba full capacity S11D first jaspilite crusher Fáb
Slide 25: Vale will reach 400 Mtpy capacity in the medium term
Achieving 400 Mtpycapacity level Vale will reach 400 Mtpy capacity in the medium term 25 Capacity (Mtpy) Northern System Southeastern System Southern System Midwestern System 240-260 110-120 70-85 3 Long term 205 70 65 3 End of 2021 343 400-450 Medium term 215 113 69 3 400 Today 203 70 59 3 335 PA M
Slide 26: Northern System: a smoother ramp up
Achieving 400 Mtpycapacity level Northern System: a smoother ramp up 26 Northern System capacity resumption roadmap Mtpy Serra Norte licensing Backlog of rolling licenses required to sustain production Delays in different mining fronts (e.g. N3, N1/N2) Gelado project phasing Project starts with 5 Mt
Slide 27: Projects bring additional capacity and high quality
Achieving 400 Mtpycapacity level Projects bring additional capacity and high quality 27 Main projects and initiatives Conversion expected for 2025, increasing site’s mass recovery and productivity Usina 1 conversion to dry processing Opening of new mining fronts in Serra Norte N3 mining front start-
Slide 28: Northern System: 240+ Mtpy capacity in the long term
203 215 10 20 10 Today S11D (waste processing) S11D (100 Mtpy project) 5 2 S11D (jaspilite crushers installation) Serra Norte (Gelado project first years) -5 Medium term (Path to 400 Mtpy) S11D (Serra Sul 120 project) 5 S11D (waste crusher installation) 5 Serra Norte (Gelado project¹) 5 Serra Norte
Slide 29: Southeastern System: new assets solving tailings disposal in Brucutu
Achieving 400 Mtpycapacity level In Southeastern System, new assets are solving tailings disposal restrictions in Brucutu… 29 Main projects and initiatives Start-up by 2H22 Works to increase safety factor started in August Tailings filtration plant construction Torto dam start-up 76% of physical pro
Slide 30: Tailings solutions also in Itabira
Main projects and initiatives Achieving 400 Mtpycapacity level … and also in Itabira 30 Construction starting in 2022 (dry season) and completion by beginning 2023 Tailings filtration plants construction Itabiruçu dam raising Cauê plant (77% of physical progress) and Conceição plant (75% of physical
Slide 31: Capanema project increases Mariana complex capacity
Achieving 400 Mtpycapacity level Capanema project increases Mariana complex capacity and optimize Timbopeba’s operations 31 Use of Timbopeba assets reducing investments 18 Mtpy capacity1 by natural moisture (without tailings generation) Start-up in 2H23 Production of sinter feed for BRBF 1 Net addit
Slide 32: Southeastern System: 110+ Mtpy capacity in the long term
70 113 12 14 14 Today Medium term (Path to 400 Mtpy) Brucutu (Tailings filtration and Torto dam) Itabira (Tailings filtration and Itabiruçu dam) Capanema start-up (net addition) 3 Net from other operations Net from other operations Long term 110-120 Achieving 400 Mtpycapacity level Southeastern Syst
Slide 33: Southern System: Vargem Grande complex can reach 50+ Mtpy
Achieving 400 Mtpycapacity level In Southern System, Vargem Grande complex can reach 50+ Mtpy capacity 33 Main projects and initiatives Conveyor belt resumption Mining licensing Unlock site’s conveyor belt in 3Q21, increasing capacity and reduction costs Mining expansion licensing for Capitão do Mat
Slide 34: Southern System: 70+ Mtpy capacity in the long term
59 69 6 Vargem Grande (mining licensing, VGR1 plant resumption, dry concentration plant and others) 4 Today Mutuca (licensing) and net from other operations Vargem Grande (conveyor belt) Medium term (Path to 400 Mtpy) Long term 70-85 Achieving 400 Mtpycapacity level Southern System: 70+ Mtpy capacit
Slide 35: Strengthening iron ore business sustainability
35 Leading industry decarbonizing transformation Delivering resumption plan Improving safety and reducing risks We are strengthening iron ore business sustainability
Slide 36: Luciano Siani Pires
September 9th, 2021 21st Analyst & Investor Tour Luciano Siani Pires
Slide 37: The equity story for Vale: roadmap for value creation
Re-rating ▪ Benchmark in safety ▪ Best-in-class reliable operator ▪ Talent-driven organization ▪ Leader in low-carbon mining ▪ Reference in creating and sharing value De-risking ▪ Brumadinho ▪ Dam safety ▪ Robust ESG practices ▪ Production resumption Reshaping ▪ Focus on core business ▪ Control of c
Slide 38: Solid progress in repairing Brumadinho
Commitment to fully revegetate the entire affected area 2025 The equity story for Vale We have made solid progress in repairing Brumadinho + R$ 2.8 billion in signed agreements for individual indemnification¹ A robust legal framework ¹ Related to agreements entered into as of August 31st, 2021, appr
Slide 39: Ground Zero project for environmental recovery
Ground Zero project for environmental recovery Ferro Carvão water stream, Brumadinho (MG) Picture from January/21
Slide 40: Commissioning of the new water supply system
Commissioning of the new water supply system Paraopeba River (MG) Picture from July/21
Slide 41: New basic healthcare unit
New basic healthcare unit Parque da Cachoeira, Brumadinho (MG) Picture from February/21
Slide 42: Decharacterization of 8B dam
Decharacterization of 8B dam Nova Lima, MG, Brazil The equity story for Vale We have advanced in dam management Picture from January/20
Slide 43: Decharacterization of Dique Rio do Peixe
Decharacterization of Dique Rio do Peixe Itabira, MG, Brazil The equity story for Vale We have advanced in dam management Picture from July/21
Slide 44: Decharacterization of Fernadinho dam
Decharacterization of Fernadinho dam Vargem Grande Complex, MG, Brazil The equity story for Vale We have advanced in dam management Picture from July/21
Slide 45: Unmanned hauls and trucks, B3/B4 dam decharacterization
Unmanned hauls and trucks B3/B4 dam decharacterization, MG, Brazil Operational control for remotely operated equipment The equity story for Vale We have advanced in dam management Picture from August/21
Slide 46: B3/B4 back-up dam
B3/B4 back-up dam Nova Lima, MG, Brazil The equity story for Vale We have advanced in dam management Picture from March/21
Slide 47: Sul Superior back-up dam
Sul Superior back-up dam Barão de Cocais, MG, Brazil The equity story for Vale We have advanced in dam management Picture from December/20
Slide 48: Forquilhas and Grupo back-up dam
Forquilhas and Grupo back-up dam Ouro Preto and Itabirito, MG, Brazil The equity story for Vale We have advanced in dam management Picture from July/21
Slide 49: Our ESG agenda has advanced towards best practices
The equity story for Vale Our ESG agenda has advanced towards best practices SOCIAL ENVIRONMENTAL Fitch (investment grade) Moody’s (investment grade) Sustainalytics ESG (from 54.5 in 2019 to 38.7) ISS ESG (from C in 2020 to C+) GOVERNANCE ✓ US$ 4-6 billion in investments by 2030 to reduce scope 1 &
Slide 50: We are moving towards a leaner portfolio
CSA Fertilizer assets in Brazil Potash projects in Canada Coal assets in Australia Zhuhai YPM Moatize CSP MRN Manganese ferro-alloy in Minas Gerais, Brazil Henan Longyu Energy Resources VNC Biopalma da Amazônia Fertilizer assets in Peru Potássio Rio Colorado 2015 2021 2018 2020 The equity story for
Slide 51: In Base Metals, Vale can boost shareholder value organically
The equity story for Vale In Base Metals, Vale can boost shareholder value through organic initiatives Upcoming approval LT growth optionality Copper Nickel Hu’u² +250 kt³ Alemão Hub +60 ktpy South Hub: Cristalino 80kt Onça Puma 2nd furnace +10-15 kt Manitoba Ultramafics South Hub upside +30-40 kt E
Slide 52: Robust cash flow generation and disciplined capital allocation
4,2 17,0 CAPEX Cash management as of June 30, 2021 Income tax & REFIS Analyst’s EBITDA range 2021E Financial expenses, net Brumadinho expenditures Others Cash Flow 2021E Dividends and buybacks already paid & committed Extra cash to be allocated 2021 Expected Cash Flow, based on sell-side analyst’s E
Slide 53: Our agenda
Re-rating De-risking Reshaping Sound cash flow generation Discipline in capital allocation The equity story for Vale Our agenda ❑ 2023: VPS fully implemented ❑ 2025: Fully compliance with GISTM ❑ 2035: Reduce net scope 3 emissions by 15% ❑ Medium term: Unlock Base Metals’ value ❑ 2050: Be carbon neu
Slide 54: Signatures
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: September 9 th , 2021 Head of Investor Relations