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Global Nickel Market Trends

Voisey’s Bay Mine Site, Newfoundland and Labrador, Canada

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“This presentation may include statements that present Vale's expectationsabout future events or results. All statements, when based upon expectationsabout the future and not on historical facts, involve various risks anduncertainties. Vale cannot guarantee that such statements will prove correct.These risks and uncertainties include factors related to the following: (a) thecountries where we operate, especially Brazil and Canada; (b) the globaleconomy; (c) the capital markets; (d) the mining and metals prices and theirdependence on global industrial production, which is cyclical by nature; and(e) global competition in the markets in which Vale operates. To obtain furtherinformation on factors that may lead to results different from those forecast byVale, please consult the reports Vale files with the U.S. Securities andExchange Commission (SEC), the Brazilian Comissão de Valores Mobiliários(CVM), the French Autorité des Marchés Financiers (AMF) and in particular thefactors discussed under “Forward-Looking Statements” and “Risk Factors” inVale’s annual report on Form 20-F.”

“Cautionary Note to U.S. Investors - The SEC permits mining companies, intheir filings with the SEC, to disclose only those mineral deposits that acompany can economically and legally extract or produce. We present certaininformation in this presentation, including ‘measured resources,’ ‘indicatedresources,’ ‘inferred resources,’ ‘geologic resources’, which would not bepermitted in an SEC filing. These materials are not proven or probablereserves, as defined by the SEC, and we cannot assure you that thesematerials will be converted into proven or probable reserves, as defined by theSEC. U.S. Investors should consider closely the disclosure in our AnnualReport on Form 20-K, which may be obtained from us, from our website or athttp://http://us.sec.gov/edgar.shtml.”

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1. Overview of Nickel

2. Current Market

3. Future Market

Nickel

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Nickel has many applications that take advantage of its uniquecharacteristics

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4%10%

7%

5%

3%

71%

Demand for nickel is dominated by Stainless SteelAlloy steels

Non-ferrousalloys

Plating

Foundry

Batteries

Stainlesssteel

Class I48%Class II

52%

Source: Wood Mackenzie, SMM, Company Reports, Vale Analysis

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Class I48%Class II

52%

Global nickel production is split between two purityclasses: Class I and Class II

FeNi(>15% nickel,balance iron)

Nickel Pig Iron(2-12% nickel,balance iron)

Powders

Briquette

Rounds

Pellets

Nickel OxideSinters

(>70% nickel)

Source: Wood Mackenzie, SMM, Company Reports, Vale Analysis

Commodity Products<predominately iron bearing>

<contain impurities><relatively inexpensive to grow>

Premium Products<99.98% nickel or higher><contain few impurities><very expensive to grow>

Cathodes

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1. Overview of Nickel

2. Current Market

3. Future Market

Nickel

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LME traded commodities respond to macro stimuli together but industryfundamentals influence the relative price movement – nickel has started tooutperform its peers

80

90

100

110

120

130

140

150

160

170

180

190

200

210

220

230

240

1-Oct-16 1-Oct-181-Jan-17 1-Apr-171-Jul-16 1-Oct-17 1-Jan-181-Apr-16 1-Apr-18 1-Jul-181-Jan-16 1-Jul-17

Base Metal Price Index (Jan 2016 = 100)

Ni

PbCu

Zn

Sn

Al

Strong recovery indemand from stainlesssteel in China; mining

audit in Philippines

Russian sanctionsand global trade

war

LME week & USelection

Philippine miningaudit results

released

Indonesia exportvolumes start to be

announced

Unexpectedly strongstainless steel

production and macrossupporting demand

growth

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This is due to industry fundamentals – market has shiftedinto deficits

1,200

1,600

2,000

2,400

2,800

3,200

3,600

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

SupplyDemand

Nickel Market Supply and Demand (kt Ni)

price underperformance

priceoverperformance

Source: INSG, CRU, Wood Mackenzie, Vale Analysis

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And we have seen almost 160kt of exchangeinventories withdrawn so far

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105

20

28

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Other FormsJan 1, 2018

367

Sep 7, 2018Briquette

237

Full PlateCathode

4

SHFE (FullPlate Cathode)

411

253

-158 kt(-38%)

BQ moving out ofthe exchanges(consumed orspeculated on)

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After an explosive start in H1, we expectstainless production in China to slow in H2

0

500

1,000

1,500

2,000

2,500

May2018

Jun2018

Jul2018

Sep2018

Oct2018

Dec2018

Jun2017

Feb2018

Mar2017

Feb2017

Feb2019

Nov2018

Apr2017

Sep2017

May2017

Jul2017

Aug2018

Aug2017

Oct2017

Jan2019

Nov2017

Dec2017

Jan2018

Mar2018

Apr2018

+20%

+2%-2%

-6%-1%

-1%

China Stainless Steel Production (‘000 t of stainless, all grades)

Source: Umetal, CRU, Wood Mackenzie, Vale Analysis

300-Series 200-Series 400-Seriesforecast

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Part of the reason is increased Indonesian stainless importsinto China, which competes with domestic production

0

20

40

60

80

100

120

140

160

180

200

220

240

China Stainless Steel Imports (‘000 kt)

Dec

-17

Feb-

18

Jan-

16

Feb-

16

May

-16

Mar

-16

Jun-

16

RoW

Apr-1

6

Jul-1

6

Aug-

16

Jul-1

7

Oct

-16

Sep-

16

Nov

-16

Dec

-16

Jan-

17

Feb-

17

Mar

-17

May

-17

Apr-1

7

Jun-

17

Aug-

17

Sep-

17

Oct

-17

Indonesia

Nov

-17

Jan-

18

Mar

-18

Chinese government is nowconsidering anti-dumping action

Indonesia is expected toproduce 2.3Mt ofstainless this year

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Meanwhile, the rest of the world stainlessproduction is expected to remain relatively flat

0

500

1,000

1,500

2,000

Apr2018

May2018

Feb2019

Jun2018

Jul2018

Aug2018

Mar2017

Sep2018

Nov2018

Jan2019

Oct2018

Jul2017

Aug2017

May2017

Feb2017

Apr2017

Jun2017

Mar2018

Sep2017

Dec2018

Oct2017

Nov2017

Dec2017

Jan2018

Feb2018

-1%+1%

+1%+4%

-1%-3%

World excl. China excl. Indonesia Stainless Steel Production (‘000 t of stainless, all grades)

Source: Umetal, CRU, Wood Mackenzie, Vale Analysis

USA RoAEurope Japan RoWforecast

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The positive price recovery to date is stimulatingproducers to add more nickel into the market – class 2

31 2732

41 37 33

170180190

130

0

110100

120

90

160

140150

Jan-

17

Feb-

17

167

Mar

-17

Apr-

17

May

-17

Jun-

17

Jul-1

7162

Chinese Refined

165 165 163 159

Chinese NPI

175 173

Mar

-18

178

Feb-

18

181 180

Jan-

18

164158

168176

Aug-

17

Dec

-17

Jun-

18

172

Nov

-17

RoW

Oct

-17

Russia

Sep-

17

164

May

-18

181

Indonesia

Apr-

18

+6.8%

+5.5%

+5.0%

Source: Wood Mackenzie, SMM, Company Reports, Vale Analysis

Monthly Nickel Production (kt)

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1. Overview of Nickel

2. Current Market

3. Future Market

Nickel

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What we see…There is a growing consensus that electric vehicleproduction will grow exponentially

Source: Vale Analysis, Company Publications

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What we see…A lot of money is being committed to electric vehicles

Source: media reports

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What we see…Government policy as the main driver supportingshift to electric vehicles

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0

50,000

100,000

150,000

200,000

FebJan Jul AugMayMar Apr Jun DecSep Oct Nov

+74%20172016 2018

0

50,000

100,000

150,000

200,000

Jan JunMayFeb AugMar JulApr Sep Oct Nov Dec

+124%

Worldwide EV sales(# cars)

China EV sales(# cars)

o Global EV salesexpected to break 2Munits in 2018

o Increasingly likely toexceed expectationsfor 2020

What we see…EV sales are breaking records

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5th Avenue, NYC, Easter 1900The transition can happen very fast…

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5th Avenue, NYC, Easter 1913The transition can happen very fast…

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What we expect…Electric vehicle costs are coming down

Source: Bank of America Meryl Lynch “Global Electric Vehicle Primer: Fully Charged by 2050” October 4, 2017

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What we expect…Nickel is one of the key ingredients in the Electric Vehicle andwe expect it to remain in the battery for the foreseeable future

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Source: Vale Analysis

What does this mean for nickel?Massive growth in demand that willreshape the nickel market

25Cathode Material

Cell(shell is nickel plated)

PackSource: Vale Analysis

1 part 1 part1 part

LithiumCarbonate

CobaltSulphate

NickelSulphate

Aluminum orManganese

Sulphate

OR

8 parts

What does this mean for nickel…Batteries require high purity nickel sulphate

An example of aNickel-Rich Battery

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Source: LME, Barclays, BMO, Credit Suisse, Deutsche Bank, Goldman Sachs, Macquarie, Morgan Stanley, RBC, UBS, Wood Mackenzie

What does this mean for nickel?Increasing competition for suitable sources for nickelsulphate production, particularly Class I nickel

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Source: LME, Barclays, BMO, Credit Suisse, Deutsche Bank, Goldman Sachs, Macquarie, Morgan Stanley, RBC, UBS, Wood Mackenzie

What does this mean for nickel?The nickel industry is lagging behind in investmentsdue to the lack of incentive price

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o It is still a stainless steel market and it willstay that way for a number of years

o We are at a precipice of an Electric Vehiclerevolution and this has the potential to usherin a new age for nickel

o Nickel will have a role in the battery for theforeseeable future

o Supplying the right nickel units at the paceneeded will be a challenge for the industry

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