São Luis MA, Agosto, 2016

Reunião do CONFAP

22

Vale in 2012

Vale is the one of the largest metals and miningcompany in the world with a global footprint

33

Diversification of sales revenues by product anddestination

Revenues by productUS$ 60.4 billion - 2011

Revenues by sales destinationUS$ 60.4 billion – 2011

Iron oreand pellets

72%

Nickel 10%

Coal 2%

Fertilizers6%

Others2%

Logistics3%

Copper 3%

Manganese&

Ferroalloys1%

Rest of theWorld

3%

North America5%

South America20%

China33%

Japan12%

Other Asia8%

Europe19%

Asia53%

4 Vale Worldwide – 2011

Vale delivered 38 projects between 2002 and 2011

Capão XavierPier III PDM

CandongaSossego

Concluded projects

FunilSão Luís

.

Capim Branco IIParagominas I

Carajás 100 Mtpa

Itabiritos

Carajás 85 MtpaCapim Branco I

Alunorte 4&5Brucutu

AimorésTaquari-Vassouras

Fábrica Nova

Mo I RanaAlunorte 3

Carajás 70 MtpaTrombetas

FazendãoAlunorte 6&7

DalianUHC

Samarco IIIZhuhaiCorredor NorteParagominas II

2002 2003 2004 2005 2006 2007 20092008 2010

Carajás 20 MtpaTKCSABayóvarTres VallesOmã

2011

Onça PumaMoatizeEstreitoKarebbe

Context of Mining Industry

Context of Mining Industry

Improvements inproductivity, health &

safety and sustainability

Improvements inproductivity, health &

safety and sustainability

Improvements intechnology

Improvements intechnology

Extend the life ofmines

Extend the life ofmines

Increase returnsto miners and

community

Increase returnsto miners and

community

Make miningsafer for labourMake mining

safer for labour

Global competitionGlobal competition

Increasing demandfor resources

Increasing demandfor resources ProductivityProductivity

SustainabilitySustainability

Less impact ofmining operationson environment

Less impact ofmining operationson environmentHealth & SafetyHealth & Safety

ChallengesGlobal competition

Emerging producers andnew deposits have been

developed

Emerging producers andnew deposits have been

developed

Source: Information and Analysis of the Brazilian Mineral Economy,IBRAM, 2011

Source: Information and Analysis of the Brazilian Mineral Economy, IBRAM, 2011

It is necessary to minimizeproduction costs, to be

competitive on the currentmarket.

It is necessary to minimizeproduction costs, to be

competitive on the currentmarket.

Iron Ore Production

ChallengesSustainability

Clean Energy and Materials▪Environmental pressure growing, from both government and public, impactingdemand for commodities (positively and negatively for different minerals, though)

▪New regulations around environment (e.g. carbon abatement), with potential increasein cash cost of marginal producers (hence impacting price of commodities)

Resource Sovereignty▪Governments pushing for higher value addition to ores; potential limits to free trade insome mining concentrates (i.e. in the form of export taxes) and energy intensivemetals

▪ Increasing relevance of Government-controlled companies▪Role of social work likely more critical than ever, as local governments and NGOsincrease their influence, connectedness to each other and power to delay operations

ChallengesHealth & Safety

The main challenges of developing technology focused on health and safety dimensionsare•identification and management of the risk indicators associated with personal safety,property security and environmental management;•implementation of methodologies for qualitative and semi-qualitative analysis of risks tohealth, safety and the environment.

Vale has been reducing its totalinjury rate over the years.

Source: Sustainability Annual Report, 2010

Vale’s Investment inTechnology and Innovation

Founding

Growing

Improving

Find, Acquire & Develop New Assets– Future markets– Access new opportunities– M & A

Grow Assets– Increase resource base– Expand capacity– Implement new projects

Operating Assets:– Safety, Health and Environmentperformance– Reduce costs– Increase sales

Cleaning Sustaining operations:

– License to operate– Sustainable development

Exis

ting

Asse

ts

How Technology Activities Generate ValueWhy to invest inTech

Adding

value to

Vale and

Shareholders

New

and

Exp

andi

ngAs

sets

Technological advances and pressing shortagesmay drive mining to new frontiers

SOURCE: McKinsey analysis

Outer spaceminingWill mining ‘boldlygo’ beyond Earth inour lifetimes?

Ocean floor miningSoon to be appliedbeyond diamondmining

Tech-enabledresourcesAccessing lowgrades or complexores in establishedregions

ArcticCould globalwarming melt arcticice makingresourcesaccessible?

Remote areasLarge infrastructureinvestmentchallenges

Conflict zonesMining will moveto increasinglyunstable locations

Processing efficiency and metal recovery for low grade ores

13

Autonomous Operations

Vale’s Innovation Initiatives

Growing

Improving

Cleaning

Power Grid Efficiency

Underground mining developments

Mining Process Efficiency

Waste and Water Management

Mine Reclamation

14

Technology initiatives have been supporting value creationacross Vale businesses over the last years

Screening at NaturalMoisture2009-2010

Geometric CorrectionSimulator2011-2012

Train Simulator2009-2013

Carnalita ProcessingRoute2011-2012

Technologies initiatives played a important role for improving productivity and safety in ouroperations as well as improving project’s capex, environmental impact and licensing complexity

WHY IT IS IMPORTANT TO INVEST IN TECHNOLOGY (EXAMPLES)

• Enabled S11D and +40Mtiron ore projects

• Reduced need for tailingdams and water intake

• Increased metal recovery

Enables processingiron ore at naturalmoisture, with noaddition of water,nor need for drying

• Implemented at EFVMsegments

• Increased productivity andreduced risks for railroadsmaintenance

Improves railroadmaintenance throughvirtual reality trainingtool for railroadgeometric correction

• Implemented at Tubarão. SãoLuís by December 2013.

• Allows train dynamicssimulation to improve safetyand accidents investigation

Improves operationand safety throughhigh quality, safetraining

• Enabled Carnalita project• Significant lower energyconsumption

• Reduced mining andprocessing costs

Development of lowcost processing routefor Carnalita potashore processing

ITVVale Institute of Technology

16

Identify Cenozoic paleoclimate changes in the southeastern Amazon region and its effects onthe Tropical Forest based on geological, geomorphological, sedimentological and palynologicalevidences in an interdisciplinary approach.

Paleoclimate

Forecast Networking

Provide understanding about existing disarticulation between upper and lower economic circuit,the relationship between different economic dynamics (mercantile / traditional and industrial),migration patterns, city expansion patterns, land use and housing circumstances.

UrbisAmazônia

Ten fully automatic meteorological stations are being installed along the Carajás Railway, Mineand Port.Two hydrological stations are being installed in sites that will enable the monitoring of riversthat affect the Vale logistic and operations.

ITV – Main projects

PaleoclimateGeological, geomorphological and palynologicalevidences of and its effects in the Tropical Forestof the southeastern Amazon region

Carmem Lara Manes / Douglas Oti / Pedro Walfir M. Souza Filho / Prafulla Sahoo / RenatoSilva Jr / Roberto Dall’Agnol / Tasso Guimarães

Vision / Objective:To identify Cenozoic paleoclimate changes in the southeastern Amazon region and its effectson the Tropical Forest based on geological, geomorphological, sedimentological andpalynological evidences in an interdisciplinary approach.

Expected results

• Definition of the paleoclimate during theupper Cenozoic in the southeasternAmazon.• Models of the evolution of the tropicalforest and geomorphology.• Formation of an interdisciplinaryresearch group on AmazonPaleoenvironment and Paleoclimatogyduring the Cenozoic.

Paleoclimate

PaleoclimateShallow seismic of the Violão lake

m- 0

-10

-20

LL 01 - LL 02

LL 07 - LL 08

m- 0

-10

-20

LL01

LL02

LL07

LL08

PaleoclimatePhysicochemical parameters of waters

• Analysis in the wetter and drier season.

• Stratification of waters in the drierseason.

• Cloud cover decreases theatmospheric insolation in the lake.

Não épossívelexibir estaimagem nomomento.

Time

Performancemetric

evaluated byconsumers:

quality ofphoto Customers’

needs

First digital cameras:low image quality, but deliveringvalues in new dimensions

Disruptive technology: digital camera vs. film-based photos

Incrementalinnovation

First sign of disruption:delivery of new performancemetrics that establishedcompanies are unable todeliver

Incrementalinnovation

Numerous improvements toconventional (film-based) camerascontinued to focus on deliveringbetter results in the sameperformance metric – in this case,image quality

Incremental innovation“Getting better in the same area"

Digital cameras had a distinctperformance metric. Whileachieving a “good enough”image quality performance, theycaused a disruption in themarket for conventional cameras

Disruptive innovation“Delivering something different"

Note: Original terminology named "sustaining innovations" instead of "incremental innovation"Source: "The Innovator's Solution" - Clayton Christensen; http://www.claytonchristensen.com/disruptive_innovation.html; BCG analysis

Incremental innovation versus disruptive innovation

“Create future options through

scientific research and the

development of technologies in

order to expand Vale’s knowledge

and business frontiers in a

sustainable manner”

Vale Institute of TechnologyMission

Vale Institute of TechnologyThree Approachs

ResearchTo promote science and technologyrelated to mining, energy andsustentability

Teaching andWorkforceConduct postgraduate teaching,offering recognized degreecourses, diplomas and extensioncourses.

Entrepreneurship andBusiness NewsIncentivar o pesquisador-empreendedor, preparado para liderarempresas de base tecnológica ouprocessos de transferência detecnologia que possam resultar dasesquisas.

Vale Technological InstituteGovernance

Scope of workPromote the development and dissemination oftechnical and scientific research and technology,and conduct other related activities.

Form of organizationThe Vale Technological Institute Association(ITV) is a private, nonprofit legal entity of anindefinite duration.

Governance structure• Management Council: Murilo Ferreira(President)• Director: Luiz Eugênio Mello

FiscalCouncil

ManagementCouncil

ScientificConsultationCouncil

ITVSustainableDevelopment

Vale employee members

GeneralAssembly

External members

ITV employees

ITVMining

ExecutiveBoard

ExecutiveBoard

FiscalCouncil

ManagementCouncil

ScientificConsultationCouncil

GeneralAssembly

Vale employee members

ITVSustainableDevelopment

ITVMining

ITV employees

Vale Technological InstituteGovernanceThe Consultation Council has the mission of supporting ITV in subjects of technical andscientific nature, in order to take more efficient, better quality decisions.

Luiz Pinguelli RosaDirector of COPPE

José GoldembergMember of ABC

Richard M. LockeDeputy Dean – MIT

Sloan

Mohan MunasinghePresident of MID

José Fernando PerezFormer President of FAPESP

Thomas A. MooreDirector of ASU

Jacob Palis JuniorPresident of ABC

Onildo Joao MariniExecutive Secretary of

ADIMB

Mike HoodCEO of CRCMining

11

22

ITV – Sustainable DevelopmentBelém do Pará / PA

ITV – Sustainable DevelopmentBelém do Pará / PA11

22 ITV – MiningOuro Preto / MG

ITV – MiningOuro Preto / MG

Close to the Amazon Forest Biodiversity Region where Vale has an outstanding presence Close to the Amazon Forest Biodiversity Region where Vale has an outstanding presence

Close to Universidade Federal de Ouro Preto, miningengineering excellence center

Region where Vale has an outstanding presence

Close to Universidade Federal de Ouro Preto, miningengineering excellence center

Region where Vale has an outstanding presence

Vale Institute of TechnologyLocationRegions: theme aspects and Vale presence in Brazil were considered

Modelo de Atuação do ITVEurope

Canada

China

Brazil

Australia

USA

ITV SustainableDevelopmentPará

ITVMiningMinasGerais

AfricaMain office

ITV branches

A collaborative network between ITV units and with national and international institutions

Vale Technological InstituteOperating model

Distribution of R&D projects and research scholarshipsaround the world (DITV)From 2009 to 2012

Distribution of R&D projectin BrazilFrom 2009 to 2012

Distribution of researchscholarships in Brazil

(DITV)From 2009 to 2012

Vale Technological Institute (ITV)Operating modelITV’s research portfolio has two kinds of research. The first is focused on developing in-depth knowledge in its areas of excellence, while the second is guided by the challengesand objectives established by Vale.

ContinuedresearchResearchprojects todevelop in-depthknowledge ina thematicarea

Guided researchResearch projects guided by DITV’sstrategic objectives

Theme

Thematic areas

Theme Theme

Research area Research area

P1 P2 P3

Vision of thefuture

Vision of thefuture

Macro-program Macro-program Macro-program

Program Program Program

Sub-program Sub-program Sub-program

ProjectProject Project Project

DITV’s vision ofthe future

Macro-program

Program

…

Project

WorkshopsITV Sustainable Development

• State Development, Science and Technology Secretariat• Santos Municipal Education Secretariat• University of the Amazon• University of São Paulo• Pará State University• Maringá State University• Júlio de Mesquita Filho São Paulo State University• Federal University of Santa Catarina• Federal University of Pará• Federal University of Recôncavo da Bahia• Federal University of Rio Grande do Sul• Federal Rural University of the Amazon• Federal University of Rio de Janeiro

• Arizona State University• Desert Research Institute• ENVIRON Holdings, Inc• National Aeronautics and Space Administration

• Ghent University• University of Manchester• Uppsala University

• Commonwealth Scientific andIndustrial Research Organisation

• Alumínio Brasileiro S.A.• Centrais Elétricas do Norte do Brasil S/A• Mineral Technology Center• National Biomass Center of Reference• Embrapa (agricultural research organization)• Pará State Research Promotion Foundation• Oswaldo Cruz Foundation• Energy and Nuclear Research Institute• Evandro Chagas Institute• National Amazon Research Institute• National Space Research Institute• Health and Sustainability Institute• Emílio Goeldi Museum of Pará

3

114

5

4

126 researchers from the following institutions participated

Cross-cutting areas

Results of workshopsITV Sustainable Development

CLIMATE CHANGE

Modeling

Forecasts and treatment

WATER MANAGEMENT

Quality monitoring

Water supply and treatment systems

Hydrological basin modeling

Aquifer prospecting

Living resources (fishing, people,processing technology and eco-toxicology)

SUSTAINABILITY IN THE MININGINDUSTRY

Life cycle of an operation

Operational and production technologies

Mining products (development of products,replacement, recycling, etc.)

Sustainable consumption

BIODIVERSITY

Bioactive pharmaceuticals and compounds,and biotechnological products

Biome monitoring

Tropical diseases

ENERGY

Bio-energy

Artificial photosynthesis

ENVIRONMENTAL MONITORINGTECHNOLOGIES

Sensors

Computation

Electronic devices

SUSTAINABLE ECONOMICS

SUSTAINABLE ARCHITECTURE ANDURBAN PLANNING

PUBLIC POLICIES FOR SUSTAINABLEDEVELOPMENT

1.1- Workshop Regional

ITV MiningVale and Science & Tech. Community Seminar

Results

• Sunset Consulting• Colorado School of Mines• NASA Jet Propulsion

• Indian School of Mines, Dhanbad

• CSIRO• University of Queensland

• Federal University of Espirito Santo• Federal University of Minas Gerais• Federal University of Ouro Preto• Federal University of Pernambuco• Federal University of Rio de Janeiro• Federal University of Rio Grande do Sul• University of Campinas• University of Brasília• University of São Paulo

• ICMM• Johannes Gutemberg Universitaet – Mainz• Mines Paristech• Sínese• Technische Universitaet Muenchen• University of Copenhagen• University of the Witwatersrand

83 3

• University of Guanajuato

1

5

124

• Nuclear Technology Development Center• Technology Center Foundation of Minas Gerais• Catholic University (PUC) of Minas Gerais• “Escola de Minas” (Mining Schools) magazine• State University of Minas Gerais• Federal University of Alfenas• Federal University of São João Del Rei• Federal University of Uberlândia• Federal University of Lavras• Federal University of Viçosa

144 researchers from the following institutions participated

WorkshopsITV Mining

Results of workshopsITV Mining

MINING INFRASTRUCTURE

Infrastructure modeling

Energy, the environment andtechnology

Safety and performance

METALLURGY

Evolution of ore, reductions in grade,P&M of minor elements in ore, P&M ofminor elements in waste, and solutionmining

Fine particles, waterless processingand better characterization

Scrap business and cross-contamination (virgin versus scrapmetals)

MINERAL PROCESSING

Market-oriented demand (newmaterials)

Sustainable solutions

Processing of deposits that arecurrently inaccessible

MINING/EXPLORATION

Geo-metallurgy

Health and safety in mines

Reducing costs

Social impacts

PROSPECTING AND GEOLOGY

Further development of geologicalknowledge

New exploration frontiers

WATER

Increasing competition for water

Water sensing

Eliminating waste

3636

Vale: for a world with new values