Vale S.a. · BMFBOVESPA:VALE3
Vale — APIMEC Rio de Janeiro (January 2018)
16 slides from Vale's conference presentation, Jan 17, 2018
Slide 1: The premium mining player
The premium mining player APIMEC Rio de Janeiro André Figueiredo, Head of Investor Relations São Paulo, January 17th 2017 S11D Plant, PA, Brazil
Slide 2: Forward-looking statements and cautionary note
“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 3: Vale will generate more value for shareholders than its global mining peers
Vale will generate more value for shareholders than its global mining peers Strategic pillars Performance Improvement Governance Enhancement Clear Strategy Sustainability Benchmark
Slide 4: Performance Improvement: capital allocation and cost efficiency
Capital allocation Rigorous capital allocation process based on returns Cost efficiency Integration and meritocracy Automation and cost management Price realization Product portfolio to capture “flight to quality” Performance Improvement Enhancing performance while improving capital allocation
Slide 5: Nickel capex
Nickel capex US$ billion -53% Vale is using spot nickel prices to approve capital projects resulting in a capex reduction of US$ 1.6 billion in 2017-2018 -40% Updated production plan Previous production plan VNC dry stacking Voisey’s Bay mine expansion Thompson mine extension Indonesia growth plan P
Slide 6: EBITDA/t, 2017E vs. 2020E
6 EBITDA/t¹, US$/t, 2017E vs. 2020E The US$ 3.0 - 5.0/t gain will come on top of the US$ 1.0/t in supply chain optimization already captured in 2017 Focus on competitiveness is expected to increase EBITDA of Ferrous Minerals by US$ 1.2 - 2.0 billion by 2020 vs. 2017 1 Assuming no change in Platts IO
Slide 7: Clear Strategy
Iron ore: margins, premium products and flexibility Base Metals Preserve optionality in nickel (Electric Vehicles) Increase copper production (Salobo III, Victor and Hu’u) Coal: leverage mine and logistics Deleverage: US$ 10 billion 7 Clear Strategy Focus on a strong balance sheet while leveraging t
Slide 8: Iron ore and nickel production volumes
Iron ore production volumes¹ Mtpy 8 Nominal capacity 1 Including third party purchases Vale has adapted its production plan in order to maximize cash flow generation and reinforce supply discipline Updated production plan Previous production plan Nickel production volume kt -45 -54 -33 -15 -15 171 2
Slide 9: Nickel unit cash cost after by-product credits
Operation1 2017E 2018E Sudbury 3,287 2,983 Thompson 10,488 8,094 Voisey’s Bay 3,206 4,680 VNC 10,153 9,717 PTVI 6,463 6,329 Onça Puma 8,622 7,704 1 Costs per operation based on site view / standalone companies Unit cash cost after by-product credits US$/t Despite lower volumes, Vale will become cash
Slide 10: December 22nd, 2017: important date for Vale
December 22nd, 2017: important date for Vale Transformation of Vale into a corporation Two independent board members Re-rating Governance Enhancement Better governance and Novo Mercado
Slide 11: Sustainability Benchmark
Sustainability Benchmark Sustainability Focus on systematic planning and execution Beyond Vale’s operations
Slide 12: A glimpse of Vale in 2020
1 Forecast asset base does not include growth projects not approved 2 Others include R&D expenses and energy segment Total assets¹ EBITDA less sustaining scenarios (prices in US$) Return on Assets Pre-tax Iron ore 400 Mt 37.2 Nickel operations Ni 268 kt, Cu 140 kt 19.8 Copper operations Cu 293 kt 2.
Slide 13: Capital expenditures will remain low even with new growth projects
US$ billion Capital expenditures will remain low even incorporating new growth projects 0.0 0.5 0.9 0.9 0.7 0.1 Growth non-approved1 1 Includes mainly Base Metals non-approved growth options 1.7 0.9 0.4 2.4 2.6 2.6 2.6 2.2 2.2 0.3 0.5 0.6 0.6 0.3 4.1 3.7 3.5 3.3 2.8 2.5 2017E 2018E 2019E 2020E 2021E
Slide 14: Free Cash Flow accumulated 2018-2020
Free Cash Flow accumulated¹ 2018-2020, US$ billion 10,000 12,000 14,000 55 ~13 ~14 15 - 16 60 17 - 18 ~19 20 - 21 65 22 - 23 ~24 ~25 ¹ Assumes US$ 1.5 billion in divestment proceeds Note: BRL/USD exchange rate of BRL/USD 3.35 from 2017 onwards. Copper prices fixed at US$ 6,000/t As a result, Vale wi
Slide 15: In 2017, Vale has outperformed its peers
In 2017, Vale has outperformed its peers Index, 01/03/2017=100 Price recovery since the beginning of 2017 Source: Bloomberg. 36% 48% 68% -3% 75 80 85 90 95 100 105 110 115 120 125 130 135 140 145 150 155 160 165 170 175 Vale Peer1 Peer2 Peer3
Slide 16: [LOGO]
[LOGO] Table of Contents 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/ André Figueiredo Date: January 17, 2018 Directo