Vale (VALE) 20-F 29 Apr 10 2009 FY Annual report (foreign) Financial data

Document and Entity Information

Document and Entity Information (USD $)
	12 Months Ended Dec. 31, 2009
Document and Entity Information [Abstract]
Entity Registrant Name	Vale S.A.
Entity Central Index Key	0000917851
Document Type	20-F
Document Period End Date	2009-12-31
Amendment Flag	false
Document Fiscal Year Focus	2,009
Document Fiscal Period Focus	FY
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float	$1,246,848,345
Entity Common Stock, Shares Outstanding	3,181,726,583

Consolidated Balance Sheets

Consolidated Balance Sheets (USD $)
In Millions	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008
Current assets
Cash and cash equivalents	$7,293	$10,331
Short-term investments	3,747	2,308
Accounts receivable
Related parties	79	137
Unrelated parties	3,041	3,067
Loans and advances to related parties	107	53
Inventories	3,196	3,896
Deferred income tax	852	583
Unrealized gains on derivative instruments	105	0
Advances to suppliers	498	405
Recoverable taxes	1,511	1,993
Others	865	465
Total current assets	21,294	23,238
Non-current assets
Property, plant and equipment, net	67,637	48,454
Intangible assets	1,173	875
Investments in affiliated companies, joint ventures and others	4,585	2,408
Other assets
Goodwill on acquisition of subsidiaries	2,313	1,898
Loans and advances
Related parties	36	0
Unrelated parties	158	77
Prepaid pension cost	1,335	622
Prepaid expenses	235	223
Judicial deposits	1,143	1,141
Advances to suppliers - energy	511	408
Recoverable taxes	817	394
Unrealized gains on derivative instruments	865	93
Others	177	161
Total other assets	7,590	5,017
TOTAL	102,279	79,992
Current liabilities
Suppliers	2,309	2,261
Payroll and related charges	864	591
Current portion of long-term debt	2,933	633
Short-term debt	30	0
Loans from related parties	19	77
Provision for income taxes	173	502
Taxes payable and royalties	124	55
Employees postretirement benefits	144	102
Railway sub-concession agreement payable	285	400
Unrealized losses on derivative instruments	129	0
Provisions for asset retirement obligations	89	48
Minimum mandatory dividends payable	1,464	2,068
Other	618	500
Total current liabilities	9,181	7,237
Non-current liabilities
Employees postretirement benefits	1,970	1,485
Long-term debt	19,898	17,535
Provisions for contingencies (Note 20 (b))	1,763	1,685
Unrealized losses on derivative instruments	9	634
Deferred income tax	5,755	4,005
Provisions for asset retirement obligations	1,027	839
Debentures	752	379
Other	1,427	1,146
Total non-current liabilities	32,601	27,708
Redeemable noncontrolling interest (Note 4 (b))	731	599
Commitments and contingencies (Note 20)
Stockholders' equity
Preferred class A stock - 7,200,000,000 no-par-value shares authorized and 2,108,579,618 (2008 - 2,108,579,618) issued	9,727	9,727
Common stock - 3,600,000,000 no-par-value shares authorized and 3,256,724,482 (2008 - 3,256,724,482) issued	15,262	15,262
Treasury stock -77,581,904 (2008 - 76,854,304) preferred and 74,997,899 (2008 - 74,937,899) common shares	(1,150)	(1,141)
Additional paid-in capital	411	393
Mandatorily convertible notes - common shares	1,578	1,288
Mandatorily convertible notes - preferred shares	1,225	581
Other cumulative comprehensive loss	(1,808)	(11,510)
Undistributed retained earnings	28,508	18,340
Unappropriated retained earnings	3,182	9,616
Total Company stockholders' equity	56,935	42,556
Noncontrolling interests	2,831	1,892
Total stockholders' equity	59,766	44,448
TOTAL	$102,279	$79,992

1_Consolidated Balance Sheets

Consolidated Balance Sheets (Parenthetical)
	Dec. 31, 2009	Dec. 31, 2008
Stockholders' equity
Preferred class A stock, par value	0	0
Preferred class A stock, shares authorized	7,200,000,000	7,200,000,000
Preferred class A stock, shares issued	2,108,579,618	2,108,579,618
Common stock, par value	0	0
Common stock, shares authorized	3,600,000,000	3,600,000,000
Common stock, shares issued	3,256,724,482	3,256,724,482
Treasury stock, preferred shares	77,581,904	76,854,304
Treasury stock, common shares	74,997,899	74,937,899

Consolidated Statements of Inco

Consolidated Statements of Income (USD $)
In Millions, except Per Share data	12 Months Ended Dec. 31, 2009		12 Months Ended Dec. 31, 2008		12 Months Ended Dec. 31, 2007
Operating revenues, net of discounts, returns and allowances
Sales of ores and metals	$19,915		$32,779		$28,441
Aluminum products	2,050		3,042		2,722
Revenues from logistic services	1,104		1,607		1,525
Other products and services	870		1,081		427
Revenues before taxes	23,939		38,509		33,115
Taxes on revenues	(628)		(1,083)		(873)
Net operating revenues	23,311		37,426		32,242
Operating costs and expenses
Cost of ores and metals sold	(10,026)		(14,055)		(13,628)
Cost of aluminum products	(2,087)		(2,267)		(1,705)
Cost of logistic services	(779)		(930)		(853)
Other	(729)		(389)		(277)
Total costs	(13,621)		(17,641)		(16,463)
Selling, general and administrative expenses	(1,130)		(1,748)		(1,245)
Research and development expenses	(981)		(1,085)		(733)
Impairment of goodwill			(950)
Other	(1,522)		(1,254)		(607)
Total costs and expenses	(17,254)		(22,678)		(19,048)
Operating income	6,057		14,748		13,194
Non-operating income (expenses)
Financial income	381		602		295
Financial expenses	(1,558)		(1,765)		(2,517)
Gains (losses) on derivatives, net	1,528		(812)		931
Foreign exchange and indexation gains (losses), net	675		364		2,553
Gain (loss) on sale of assets	40		80		777
Total non-operating income (expenses)	1,066		(1,531)		2,039
Income before income taxes and equity results	7,123		13,217		15,233
Income taxes
Current	(2,084)		(1,338)		(3,901)
Deferred	(16)		803		700
Total income tax	(2,100)		(535)		(3,201)
Equity in results of affiliates, joint ventures and other investments	433		794		595
Net income	5,456		13,476		12,627
Net income attributable to noncontrolling interests	107		258		802
Net income attributable to the stockholders' Company	$5,349		$13,218		$11,825
Basic and diluted earnings per share attributable to Company's stockholders
Earnings per preferred share	0.97		2.58		2.41
Earnings per common share	0.97		2.58		2.41
Earnings per preferred share linked to mandatorily convertible notes	1.71	[1]	4.09	[1]	3.3	[1]
Earnings per common share linked to mandatorily convertible notes	2.21	[1]	4.29	[1]	3.51	[1]
[1]Basic earnings per share only, as dilution assumes conversion.

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (USD $)
In Millions	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Cash flows from operating activities:
Net income	$5,456	$13,476	$12,627
Adjustments to reconcile net income to cash from operations:
Depreciation, depletion and amortization	2,722	2,807	2,186
Dividends received	386	513	394
Equity in results of affiliates, joint ventures and other investments	(433)	(794)	(595)
Deferred income taxes	16	(803)	(700)
Impairment of goodwill		950
Loss on disposal of property, plant and equipment	293	376	168
(Gain)/Loss on sale of investments	(40)	(80)	(777)
Foreign exchange and indexation losses (gains), net	(1,095)	451	(2,827)
Unrealized derivative losses (gains), net	(1,382)	809	(917)
Unrealized interest (income) expense, net	(25)	116	102
Others	20	(3)	115
Decrease (increase) in assets:
Accounts receivable	616	(466)	235
Inventories	530	(467)	(343)
Recoverable taxes	108	(263)
Others	(455)	21	(292)
Increase (decrease) in liabilities:
Suppliers	121	703	998
Payroll and related charges	159	1	170
Income taxes	(234)	(140)	393
Others	373	(93)	75
Net cash provided by operating activities	7,136	17,114	11,012
Cash flows from investing activities:
Short term investments	(1,439)	(2,308)
Related parties
Loan proceeds	(181)	(37)	(33)
Repayments	7	58	10
Others	(25)	(15)	1
Judicial deposits	(132)	(133)	(125)
Investments	(1,947)	(128)	(324)
Additions to, property, plant and equipment	(8,096)	(8,972)	(6,651)
Proceeds from disposal of investments/property, plant and equipment	606	134	1,042
Acquisition of subsidiaries, net of cash acquired	(1,952)		(2,926)
Net cash used in investing activities	(13,159)	(11,401)	(9,006)
Cash flows from financing activities:
Short-term debt, additions	1,285	1,076	4,483
Short-term debt, repayments	(1,254)	(1,311)	(5,040)
Related parties
Loan proceeds	16	54	259
Repayments	(373)	(20)	(273)
Issuances of long-term debt
Third parties	3,104	1,890	7,212
Repayments of long-term debt
Third parties	(307)	(1,130)	(11,130)
Treasury stock	(9)	(752)
Mandatorily convertible notes	934		1,869
Capital increase		12,190
Dividends and interest attributed to Company's stockholders	(2,724)	(2,850)	(1,875)
Dividends and interest attributed to noncontrolling interest	(47)	(143)	(714)
Net cash provided by (used in) financing activities	625	9,004	(5,209)
Increase (decrease) in cash and cash equivalents	(5,398)	14,717	(3,203)
Effect of exchange rate changes on cash and cash equivalents	2,360	(5,432)	(199)
Cash and cash equivalents, beginning of period	10,331	1,046	4,448
Cash and cash equivalents, end of period	7,293	10,331	1,046
Cash paid during the period for:
Interest on short-term debt	(1)	(11)	(49)
Interest on long-term debt	(1,113)	(1,255)	(1,289)
Income tax	(1,331)	(2,867)	(3,284)
Non-cash transactions
Interest capitalized	$266	$230	$78

Consolidated Statements of Chan

Consolidated Statements of Changes in Stockholders' Equity (USD $)
In Millions, except Share data	Total Company stockholders' equity	Preferred class A stock	Common stock	Treasury stock	Additional paid-in capital	Mandatorily convertible notes - common stock	Mandatorily convertible notes - preferred stock	Total other cumulative comprehensive income (deficit)	Cumulative translation adjustments	Unrealized gain (loss) - available-for-sale securities, net of tax	Surplus (deficit) accrued pension plan	Cash flow hedge	Undistributed retained earnings	Unappropriated retained earnings	Noncontrolling interests	Total
Beginning of the period, shares at Dec. 31, 2006				(86,927,072)
Beginning of the period at Dec. 31, 2006		$4,702	$3,806	($389)	$498	$1,288	$581		($1,628)	$271	$353		$9,555	$2,505	$2,465
Transfer from undistributed retained earnings		251	3,936
Change in the period									2,968	(60)	(278)	29
Transfer from/to unappropriated retained earnings													9,949
Capitalized earnings													(4,187)
Net income attributable to the stockholders' Company														11,825		11,825
Interest on mandatorily convertible debt
Preferred class A stock														(22)
Common stock														(45)
Dividends and interest attributed to stockholders' equity
Preferred class A stock														(1,049)
Common stock														(1,634)
Appropriation from/to undistributed retained earnings														(9,949)
Disposals and (acquisitions) of noncontrolling interests															(817)
Cumulative translation adjustments															(333)
Cash flow hedge															21	21
Net income attributable to noncontrolling interests															802	802
Dividends and interest attributable to noncontrolling interests															(700)
Capitalization of stockholders advances															76
Sales, shares				3,888
Total number of shares		1,919,516,400	2,999,797,716	(86,923,184)												4,832,390,932
End of the period, shares		1,919,516,400	2,999,797,716	(86,923,184)												4,832,390,932
End of the period at Dec. 31, 2007	33,276	4,953	7,742	(389)	498	1,288	581	1,655	1,340	211	75	29	15,317	1,631	2,180	35,456
Capital increase		4,774	7,520
Acquisitions				(752)
Acquisitions, shares				(64,869,259)
Change in the period					(105)				(12,833)	(194)	(109)	(29)
Transfer from/to unappropriated retained earnings													3,023
Net income attributable to the stockholders' Company														13,218		13,218
Interest on mandatorily convertible debt
Preferred class A stock														(46)
Common stock														(96)
Dividends and interest attributed to stockholders' equity
Preferred class A stock														(806)
Common stock														(1,262)
Appropriation from/to undistributed retained earnings														(3,023)
Cumulative translation adjustments															445
Cash flow hedge															(21)	(21)
Net income attributable to noncontrolling interests															258	258
Dividends and interest attributable to noncontrolling interests															(137)
Capitalization of stockholders advances															57
Sales, shares				240
Total number of shares		2,108,579,618	3,256,724,482	(151,792,203)												5,213,511,897
End of the period, shares		2,108,579,618	3,256,724,482	(151,792,203)												5,213,511,897
End of the period at Dec. 31, 2008	42,556	9,727	15,262	(1,141)	393	1,288	581	(11,510)	(11,493)	17	(34)		18,340	9,616	1,892	44,448
Acquisitions				(9)
Acquisitions, shares				(831,400)
Change in the period					18	290	644		9,721	(17)	(4)	2
Transfer from/to unappropriated retained earnings													10,168
Net income attributable to the stockholders' Company														5,349		5,349
Interest on mandatorily convertible debt
Preferred class A stock														(58)
Common stock														(93)
Dividends and interest attributed to stockholders' equity
Preferred class A stock														(570)
Common stock														(894)
Appropriation from/to undistributed retained earnings														(10,168)
Disposals and (acquisitions) of noncontrolling interests															83
Cumulative translation adjustments															(823)
Cash flow hedge															(18)	(18)
Net income attributable to noncontrolling interests															107	107
Dividends and interest attributable to noncontrolling interests															(56)
Sales, shares				43,800
Total number of shares		2,108,579,618	3,256,724,482	(152,579,803)												5,212,724,297
End of the period, shares		2,108,579,618	3,256,724,482	(152,579,803)												5,212,724,297
End of the period at Dec. 31, 2009	$56,935	$9,727	$15,262	($1,150)	$411	$1,578	$1,225	($1,808)	($1,772)		($38)	$2	$28,508	$3,182	$2,831	$59,766

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income (deficit) (USD $)
In Millions	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Company's stockholders:
Net income attributable to Company's stockholders	$5,349	$13,218	$11,825
Cumulative translation adjustments	9,721	(12,833)	2,968
Unrealized gain (loss) - available-for-sale securities
Gross balance as of the period/year end	(47)	(230)	(123)
Tax (expense) benefit	30	36	63
Unrealized gain (loss) - available-for-sale securities, net	(17)	(194)	(60)
Surplus (deficit) accrued pension plan
Gross balance as of the period/year end	10	(194)	(410)
Tax (expense) benefit	(14)	85	132
Surplus (deficit) accrued pension plan, net	(4)	(109)	(278)
Cash flow hedge
Gross balance as of the period/year end	11	(29)	29
Tax (expense) benefit	(9)
Cash flow hedge, net	2	(29)	29
Total comprehensive income (deficit) attributable to Company's stockholders	15,051	53	14,484
Noncontrolling interests:
Net income attributable to noncontrolling interests	107	258	802
Cumulative translation adjustments	823	(445)	333
Cash flow hedge	(18)	(21)	21
Total comprehensive income (deficit) attributable to Noncontrolling interests	912	(208)	1,156
Total comprehensive income (deficit)	$15,963	($155)	$15,640

The Company and its operations

The Company and its operations
	12 Months Ended Dec. 31, 2009
The Company and its operations [Abstract]
The Company and its operations	1The Company and its operations Vale S.A., formerly Companhia Vale do Rio Doce, (Vale, the Company or we) is a limited liability company incorporated in Brazil. Operations are carried out through Vale and our subsidiary companies, joint ventures and affiliates, and mainly consist of mining, non-ferrous metal production, logistics and steel activities. At December31, 2009, our principal consolidated operating subsidiaries are the following: % voting head office Subsidiary % ownership capital location Principal activity Alumina do Norte do Brasil S.A.- Alunorte 57.03 59.02 Brazil Alumina Alumnio Brasileiro S.A.- Albras 51.00 51.00 Brazil Aluminum CADAM S.A 61.48 100.00 Brazil Kaolin CVRD Overseas Ltd 100.00 100.00 Cayman Islands Trading Vale Colombia Ltd 100.00 100.00 Colombia Coal Ferrovia Centro-Atlntica S. A 99.99 99.99 Brazil Logistic Ferrovia Norte Sul S.A 100.00 100.00 Brazil Logistic Minerao Corumb Reunidas S.A. 100.00 100.00 Brazil Iron ore Par Pigmentos S.A. 86.17 85.57 Brazil Kaolin PT International Nickel Indonesia Tbk 59.09 59.09 Indonesia Nickel Vale Manganse Norway 100.00 100.00 Norway Ferroalloys Vale Mangans S.A. 100.00 100.00 Brazil Manganese and Ferroalloys Vale Manganse France 100.00 100.00 France Ferroalloys Vale Australia Pty Ltd. 100.00 100.00 Australia Coal Vale Inco Limited 100.00 100.00 Canada Nickel Vale International S.A 100.00 100.00 Switzerland Trading

Basis of Consolidation

Basis of Consolidation
	12 Months Ended Dec. 31, 2009
Basis of consolidation [Abstract]
Basis of consolidation	2 Basis of consolidation All majority-owned subsidiaries in which we have both share and management control are consolidated. All significant intercompany accounts and transactions are eliminated. Our variable interest entities in which we are the primary beneficiary are consolidated. Investments in unconsolidated affiliates and joint ventures are accounted for under the equity method (Note13). We evaluate the carrying value of our equity accounted investments in relation to publicly quoted market prices when available. If the quoted market price is below book value, and such decline is considered other than temporary, we write-down our equity investments to quoted market value. We define joint ventures as businesses in which we and a small group of other partners each participate actively in the overall entity management, based on a stockholders agreement. We define affiliates as businesses in which we participate as a minority stockholder but with significant influence over the operating and financial policies of the investee. Our participation in hydroelectric projects is made via consortium contracts under which we have undivided interests in the assets and are liable for our proportionate share of liabilities and expenses, which are based on our proportionate share of power output. We do not have joint liability for any obligations. No separate legal or tax status is granted to consortia under Brazilian law. Accordingly, we recognize our proportionate share of costs and our undivided interest in assets relating to hydroelectric projects (Note12).

Summary of significant accounti

Summary of significant accounting policies
	12 Months Ended Dec. 31, 2009
Summary of significant accounting policies [Abstract]
Summary of significant accounting policies	3 Summary of significant accounting policies The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used for, but not limited to, the selection of useful lives of property, plant and equipment, impairment, provisions necessary for contingent liabilities, fair values assigned to assets and liabilities acquired in business combinations, income tax valuation allowances, employee post retirement benefits and other similar evaluations. Actual results could differ from those estimated. a) Basis of presentation We have prepared our consolidated financial statements in accordance with United States generally accepted accounting principles (US GAAP), which differ in certain respects from the accounting practices adopted in Brazil (Brazilian GAAP) which are the basis for our statutory financial statements. These financial statements reflect the retrospective adoption of the Noncontrolling Interests in Consolidated Financial Statements Standard, as of December31, 2008 and the three years then ended. The noncontrolling interest standard, which clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements, as shown in the consolidated statements of changes in stockholders equity and consolidated statements of comprehensive income (deficit). Noncontrolling interests that could be redeemed upon the occurrence of certain events outside the Companys control have been classified as redeemable noncontrolling interest using the mezzanine presentation on the balance sheet between liabilities and stockholders equity, retroactively to all periods presented. Since December 2007, significant modifications have been made to Brazilian GAAP as part of a convergence project with International Financial Reporting Standards (IFRS) and as from 2010 full year financial statements the convergence will be completed and therefore the IFRS will be the accounting practice adopted in Brazil. The Company does not expect to discontinue the US GAAP reporting during 2010. The Brazilian Real is the parent Companys functional currency. We have selected the US dollar as our reporting currency. All assets and liabilities have been translated to US dollars at the closing rate of exchange at each balance sheet date (or, if unavailable, the first available exchange rate). All statement of income accounts have been translated to US dollars at the average exchange rates prevailing during the respective periods. Capital accounts are recorded at historical exchange rates. Translation gains and losses are recorded in the Cumulative Translation Adjustments account (CTA) in stockholders equity. The results of operations and financial position of our entities that have a functional currency other than the USdollar, have been translated into US dol

Accounting pronouncements

Accounting pronouncements
	12 Months Ended Dec. 31, 2009
Accounting pronouncements [Abstract]
Accounting pronouncements	4 Accounting pronouncements a) Newly issued accounting pronouncements Accounting Standards Update (ASU) number 2010-06 Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements. This update provides amendments to Subtopic 820-10 and are expected to provide more robust disclosures about (1)the different classes of assets and liabilities measured at fair value, (2)the valuation techniques and inputs used, (3)the activity in Level3 fair value measurements, and (4)the transfers between Levels1, 2, and 3. The Company will adopt this update in 2010 and does not expect relevant impacts on fair value information currently disclosed. In June 2009, the Financial Accounting Standards Board (FASB) issued an amendment to Interpretation No.46(R) on the accounting and disclosure requirements for the consolidation of variable interest entities (VIEs). Subsequently, in December 2009, the Accounting Standards Update (ASU) number 2009-17 Amendments to FASB Interpretation No.46(R) was issued. The amendments replace the quantitative-based risks and rewards calculation, for determining which reporting entity has a controlling financial interest in a VIE, with a qualitative analysis when determining whether or not it must consolidate a VIE. The newly required approach is focused on identifying which reporting entity has the power to direct the activities of a variable interest entity that most significantly impact the entitys economic performance and (1)the obligation to absorb losses of the entity or (2)the right to receive benefits from the entity. The amendments also require an enterprise to continuously reassess whether it must consolidate a VIE. Additionally, the amendments eliminated the scope exception on qualifying special-purpose entities (QSPE) and require enhanced disclosures about: involvement with VIEs, significant changes in risk exposures, impacts on the financial statements, and, significant judgments and assumptions used to determine whether or not to consolidate a VIE. The Company will adopt these amendments in 2010. We are currently assessing the potential impacts of this pronouncement and do not expect major changes to the reported financial information. In June 2009, the FASB issued an amendment to the accounting and disclosure requirements for transfers of financial assets. Subsequently, in December 2009, the Accounting Standards Update (ASU) number 2009-16 Accounting for Transfers of Financial Assets an amendment of FASB Statement No.140 was issued. The amendments improve financial reporting requiring greater transparency and additional disclosures for transfers of financial assets and the entitys continuing involvement with them and also change the requirements for derecognizing financial assets. In addition, the amendments eliminate the exceptions for QSPE from the consolidation guidance and the exception that permitted sale accounting for certain mortgage securitizations when a transferor has not surrendered control over the transferred financial assets. The Company will adopt the amendments in 2010 and do not expect major effect to its financial statement

Major acquisitions and disposal

Major acquisitions and disposals
	12 Months Ended Dec. 31, 2009
Major acquisitions and disposals [Abstract]
Major acquisitions and disposals	5 Major acquisitions and disposals a) Minerao Corumb Reunidas S.A. In September 2009, we acquired from Rio Tinto Plc, Minerao Corumb Reunidas S.A. (MCR). MCR is the owner of an iron ore mining operation with high iron content and a strategic importance to our product portfolio, adding a substantial volume of lump ore to our reserves. The purchase price allocation for Minerao Corumb Reunidas S.A. is as follows: Valuation Total disbursements(*) 814 Cash acquired (12 ) Purchase price 802 Book value of assets acquired and liabilities assumed, net of cash acquired (240 ) Adjustment to fair value of inventory (84 ) Adjustment to fair value of property, plant and equipment (754 ) Adjustment to fair value of intangible assets (14 ) Deferred taxes on the above adjustments 290 Total fair value adjustment (562 ) (*)Including the payment related to working capital adjustment The acquired business contributed revenues of US$24 and net profit of US$(16) for the period from October1, 2009 to December31, 2009. If the acquisition had occurred on January1, 2009, our revenue would have been US$52, and profit before tax would have been US$(88). These amounts have been calculated using the Companys accounting policies and by adjusting the results of the subsidiary to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to property, plant and equipment and intangibles assets applied from January1, 2009. b) Diamond Coal Ltd In March 2009, we acquired 100% of Diamond Coal Ltd that owns coal assets in Colombia for US$300, from Cement Argos. Cash payment was made during the quarter ending June30, 2009. The primary reason for the acquisition was that the coal assets are an important part of our growth strategy. Therefore, Vale is seeking to build a coal asset platform in Colombia, as it is the worlds third largest exporter of high-quality thermal coal, given its low level of sulfur and high calorific value. The purchase price allocation for Diamond Coal Ltd. is as follows: Valuation Total disbursements 300 Adjustment to fair value of property, plant and equipment (280 ) Deferred taxes on above adjustments 92 Total adjustment (188 ) c) Green Mineral Resources In February 2009, we acquired Green Mineral Resources that owns the Regina Project (Canada) and Colorado Project (Argentina) which are in development stage, from Rio Tinto, for US$850. The acquisition of potash assets is aligned with Vales strategy to become a large producer of fertilizers to benefit from the exposure to rising global consumption. The purchase price al

Income taxes

Income taxes
	12 Months Ended Dec. 31, 2009
Income taxes [Abstract]
Income taxes	6 Income taxes Income taxes in Brazil comprise federal income tax and social contribution, which is an additional federal tax. The statutory composite enacted tax rate applicable in the periods presented is 34%. In other countries where we have operations, the applicable tax rates vary from 1.67% to 40%. We analyze the potential tax impact associated with undistributed earnings by each of our subsidiaries. For those subsidiaries in which the undistributed earnings would be taxable when remitted to the parent company, but we meet the criteria in paragraph12 of APB 23, no deferred tax is recognized. The amount reported as income tax expense in our consolidated financial statements is reconciled to the statutory rates as follows: Year ended December 31, 2009 2008 2007 Brazil Foreign Total Brazil Foreign Total Brazil Foreign Total Income before income taxes, equity results and noncontrolling interests 10,024 (2,901 ) 7,123 2,434 10,783 13,217 7,769 7,464 15,233 Exchange variation (not taxable) or not deductible - 5,162 5,162 - (2,887 ) (2,887 ) - 853 853 10,024 2,261 12,285 2,434 7,896 10,330 7,769 8,317 16,086 Tax at Brazilian composite rate (3,408 ) (769 ) (4,177 ) (828 ) (2,685 ) (3,513 ) (2,641 ) (2,828 ) (5,469 ) Adjustments to derive effective tax rate: Tax benefit on interest attributed to stockholders 502 - 502 692 - 692 474 - 474 Difference on tax rates of foreign income - 1,079 1,079 - 1,728 1,728 - 1,729 1,729 Tax incentives 148 - 148 53 - 53 173 - 173 Other non-taxable, income/non deductible expenses 100 248 348 287 218 505 80 (188 ) (108 ) Income taxes per consolidated statements of income (2,658 ) 558 (2,100 ) 204 (739 ) (535 ) (1,914 ) (1,287 ) (3,201 ) Vale and some related com

Cash and cash equivalents

Cash and cash equivalents
	12 Months Ended Dec. 31, 2009
Cash and cash equivalents [Abstract]
Cash and cash equivalents	7 Cash and cash equivalents As of December31 2009 2008 Cash 728 767 Short-term investments 6,565 9,564 7,293 10,331 All the above mentioned short-term investments are made through the use of low risk fixed income securities, in a way that: the ones denominated in Brazilian reais are concentrated in investments indexed to the CDI, and the ones denominated in US dollars are mainly time deposits, with the original due date less than three-months.

Short-term investments

Short-term investments
	12 Months Ended Dec. 31, 2009
Short-term investments [Abstract]
Short-term investments	8 Short-term investments As of December31 2009 2008 Time deposit 3,747 2,308 Represent low risk investments with original due date over three-month.

Account receivable

Account receivable
	12 Months Ended Dec. 31, 2009
Account receivable [Abstract]
Account receivable	9 Account receivable As of December31 2009 2008 Customers Denominated in Brazilian Reais 885 461 Denominated in other currencies, mainly US dollars 2,362 2,828 3,247 3,289 Allowance for doubtful accounts (127 ) (85 ) Total 3,120 3,204 Accounts receivable from customers in the steel industry represent 51.1% of receivables at December31, 2009. No single customer accounted for more than 10% of total revenues. Additional allowances for doubtful accounts charged to the statement of income as expenses in 2009 and 2008 totaled US$48 and US$9, respectively. We wrote-off US$8 in 2009 and US$ nil in 2008.

Inventories

Inventories
	12 Months Ended Dec. 31, 2009
Inventories [Abstract]
Inventories	10 Inventories As of December31 2009 2008 Finished products Nickel (co-products and by-products) 1,083 1,514 Iron ore and pellets 677 728 Manganese and ferroalloys 164 199 Aluminum products 135 150 Kaolin 42 40 Copper concentrate 35 26 Coal 51 43 Others 51 80 Spare parts and maintenance supplies 958 1,116 3,196 3,896 In 2009, there were no adjustments to reduce inventories to the market value. In 2008 we recorded an adjustment to reduce nickel inventory, in an amount of US$77.

Recoverable taxes

Recoverable taxes
	12 Months Ended Dec. 31, 2009
Recoverable taxes [Abstract]
Recoverable taxes	11 Recoverable taxes As of December31 2009 2008 Income tax 908 1,646 Value-added tax- ICMS 290 258 PIS and COFINS 1,052 380 Others 78 103 Total 2,328 2,387 Current 1,511 1,993 Non-current 817 394 2,328 2,387

Property, plant and equipment a

Property, plant and equipment and intangible assets
	12 Months Ended Dec. 31, 2009
Property, plant and equipment and intangible assets [Abstract]
Property, plant and equipment and intangible assets	12 Property, plant and equipment and intangible assets By type of assets: As of December31, 2009 As of December31, 2008 Accumulated Accumulated Cost Depreciation Net Cost Depreciation Net Land 284 - 284 182 - 182 Buildings 4,324 1,143 3,181 3,742 905 2,837 Installations 14,063 4,160 9,903 9,990 2,748 7,242 Equipment 7,499 2,380 5,119 5,391 1,626 3,765 Railroads 6,685 2,016 4,669 5,830 1,358 4,472 Mine development costs 20,205 2,957 17,248 15,976 2,062 13,914 Others 10,418 3,123 7,295 4,974 1,639 3,335 63,478 15,779 47,699 46,085 10,338 35,747 Construction in progress 19,938 - 19,938 12,707 - 12,707 Total 83,416 15,779 67,637 58,792 10,338 48,454 Losses on disposal of property, plant and equipment totaled US$293, US$376 and US$168 in 2009, 2008 and 2007, respectively. Mainly relate to losses on sales of ships and trucks, locomotives and other equipment, which were replaced in the normal course of business. Assets given in guarantee of judicial processes totaled US$222 as of December31, 2009. Hydroelectric assets We participate in several jointly-owned hydroelectric plants, already in operation or under construction, in which we record our undivided interest in these assets as property, plant and equipment. At December31, 2009 the cost of hydroelectric plants in service totaled US$1,382 (December31, 2008 US$1,162) and the related depreciation in the year was US$372 (December31, 2008 US$304). The cost of hydroelectric plant under construction at December31, 2009 totaled US$521 (December31, 2008 US$206). Income and operating expenses for such plants were not material. Intangibles All of the intangible assets recognized in our financial statements were acquired from third parties, either directly or through a business combination and have definite useful lives from 6 to 30years. At December31, 2009 the intangible assets totaled US$1,173 (December31, 2008 - US$875), and comprised of rights granted by the government North-South Railroad of US$924 and off take-agreements of US$239.

Investments in affiliated compa

Investments in affiliated companies and joint ventures
	12 Months Ended Dec. 31, 2009
Investments in affiliated companies and joint ventures [Abstract]
Investments in affiliated companies and joint ventures	13 Investments in affiliated companies and joint ventures Equity in earnings (losses) of investee December31, 2009 Investments adjustments Dividends Received Net income (loss) of the Year ended December31, Year ended December31, Participation in capital(%) Net equity period 2009 2008 2009 2008 2007 2009 2008 2007 Voting Total Ferrous Companhia Nipo-Brasileira de Pelotizao NIBRASCO(1) 51.11 51.00 260 (25 ) 132 110 (12 ) 84 12 20 - - Companhia Hispano-Brasileira de Pelotizao HISPANOBRS(1) 51.00 50.89 164 (23 ) 83 73 (12 ) 59 9 - 6 16 Companhia Coreano-Brasileira de Pelotizao KOBRASCO(1) 50.00 50.00 118 (34 ) 59 55 (17 ) 44 19 - 13 21 Companhia talo-Brasileira de Pelotizao ITABRASCO(1) 51.00 50.90 177 23 90 58 12 34 10 - - 8 Minas da Serra Geral SA MSG 50.00 50.00 61 3 31 21 2 1 3 - - - SAMARCO Minerao SA SAMARCO(2) 50.00 50.00 1,224 598 673 412 299 315 242 190 300 150 Baovale Minerao SA BAOVALE 50.00 50.00 61 1 30 26 (3 ) 6 6 - - - Zhuhai YPM Pellet e Co,Ltd ZHUHAI 25.00 25.00 51 12 13 13 3 7 - - - - 1,111 768 272 550 301 210 319 195 Logistic LOG-IN Logstica Intermodal SA 31.33 31.33 374 5 125 94 2 20 8 3 3 - MRS Logstic

Impairment of goodwill and long

Impairment of goodwill and long-lived assets
	12 Months Ended Dec. 31, 2009
Impairment of goodwill and long-lived assets [Abstract]
Impairment of goodwill and long-lived assets	14 Impairment of goodwill and long-lived assets As described in note3(g), we test goodwill and long-lived assets for impairment when events or changes in circumstances indicate that they might be impaired. For impairment test purposes goodwill is allocated to reporting units, and are tested at least annually. No impairment charges were recognized in 2009 as a result of the annual goodwill impairment tests performed. In 2008, an impairment charge, related to nickel operations was recorded in operating results in the amount of US$950. Management determined cash flows based on approved financial budgets. Gross margin projections were based on past performance and managements expectations of market developments. Information about sales prices are consistent with the forecasts included in industry reports, considering quoted prices when available and when appropriate. The discount rates used reflect specific risks relating to the relevant assets in each reporting unit, depending on their composition and location. Recognition of additional goodwill impairment charges in the future would depend on several estimates including market conditions, recent actual results and managements forecasts. This information shall be obtained at the time when our assessment is to be updated. It is not possible at this time to determine if any such future impairment charge would result or, if it does, whether such charge would be material. There were no goodwill movements in 2009, expect for the cumulative translation adjustments.

Short-term debt

Short-term debt
	12 Months Ended Dec. 31, 2009
Short-term debt [Abstract]
Short-term debt	15 Short-term debt Short-term borrowings outstanding on December31, 2009 are from commercial banks for export financing denominated in US dollars, with average annual interest rates of 2.02%.

Long-term debt

Long-term debt
	12 Months Ended Dec. 31, 2009
Long-term debt [Abstract]
Long-term debt	16 Long-term debt Current liabilities Long-term liabilities 2009 2008 2009 2008 Foreign debt Loans and financing denominated in the following currencies: US dollars 1,543 210 4,332 5,905 Others 29 23 411 167 Fixed Rate Notes- US dollar denominated - - 8,481 6,510 Debt securities- export sales(*)- US dollar denominated 150 55 - 149 Perpetual notes - - 78 83 Accrued charges 198 217 - - 1,920 505 13,302 12,814 Brazilian debt Brazilian Reais indexed to Long-term Interest Rate- TJLP/CDI and General Price Index-Market (IGPM) 62 33 3,433 1,990 Basket of currencies 1 1 3 4 Non-convertible debentures 861 - 2,592 2,562 US dollars denominated - - 568 165 Accrued charges 89 94 - - 1,013 128 6,596 4,721 Total 2,933 633 19,898 17,535 (*)Secured by receivables from future export sales. Redeemed in January, 2010. The long-term portion at December31, 2009 falls due as follows: 2011 2,623 2012 1,209 2013 3,250 2014 925 2015 and thereafter 11,518 No due date (Perpetual notes and non-convertible debentures) 373 19,898 At December31, 2009 annual interest rates on long-term debt were as follows: Up to 3% 6,696 5.1% to 7% 8,148 7.1% to 9% 5,735 9.1% to 11% 978 Over 11%(*) 1,192 Variable (Perpetual notes) 82 22,831 (*) Includes non-convertible debentures and other Brazilian Real denominated debt that bear interest at the Brazilian Interbank Certificate of Deposit (CDI)and Brazilian Government Long-term Interest Rates (TJLP) plus a spread. For these operations we have entered into derivative transactions to mitigate our exposure to the floating rate debt denominated in Brazilian Real, totaling US$6,675 of which US$3,949 has original interest rate between 7.1% and 9% per year the remaining amount has original interest rate above 9% per year. The average cost after taking into a

Stockholders equity

Stockholders equity
	12 Months Ended Dec. 31, 2009
Stockholders' equity [Abstract]
Stockholders' equity	17 Stockholders equity Each holder of common and preferred classA stock is entitled to one vote for each share on all matters brought before stockholders meetings, except for the election of the Board of Directors, which is restricted to the holders of common stock. The Brazilian Government holds twelve preferred special shares which confer permanent veto rights over certain matters. Both common and preferred stockholders are entitled to receive a mandatory minimum dividend of 25% of annual adjusted net income under Brazilian GAAP, once declared at the annual stockholders meeting. In the case of preferred stockholders, this dividend cannot be less than 6% of the preferred capital as stated in the statutory accounting records or, if greater, 3% of the Brazilian GAAP equity value per share. In October 2009 the Board of Directors approved the payment of the second tranche of the minimum dividend, and an amount of additional dividends to be distributed, totaling US$1,500, corresponding to US$0.28775711 per common or preferred share in circulation. In April 2009, we paid US$1,250 as a first installment of the dividend to stockholders. The distribution was made in the form of dividends. In July 2008, we issued 80,079,223 common ADS, 176,847,543 common shares, 63,506,751 preferred ADS and 100,896,048 preferred shares through a global equity offering. Our capital increased by US$11,666, upon subscription of preferred stock of US$4,146 corresponding to 164,402,799shares and common stock of US$7,520 corresponding to 256,926,766shares. In August, 2008, we issued an additional 24,660,419 preferred shares, representing an increase of US$628. After the closing of the operation, our capital stock increased by US$12,294 in 2008; the transaction costs of US$105 were recorded as a reduction of the additional paid-in capital account. Vale issued mandatory convertible notes, as follows: Date Value Emission Expiration Gross Net of charges Coupon Tranches Rio and Rio P June/2007 June/2010 1,880 1,869 5.50% p.a. Tranches Vale and Vale P- 2012 July/2009 June/2012 942 934 6.75% p.a. The notes pay a coupon quarterly and are entitled to an additional remuneration equivalent to the cash distribution paid to ADS holders. These notes were classified as a capital instrument, mainly due to the fact that neither the Company nor the holders have the option to settle the operation, whether fully or partially, with cash, and the conversion is mandatory; consequently, they were recognized as a specific component of shareholders equity, net of financial charges. The funds linked to future mandatory conversion, net of charges are equivalent to the maximum of common shares and preferred shares, as follows. All the shares are currently held in treasury. Maximum amount of action Value Comm

Pension plans

Pension plans
	12 Months Ended Dec. 31, 2009
Pension plans [Abstract]
Pension plans	18 Pension plans Since 1973 we sponsor a supplementary social security plan with characteristics of a defined benefit plan (the Old Plan) covering substantially all Brazilian employees, with benefits calculated based on years of service, age, contribution salary and supplementary social security benefits. This plan is administered by Fundao Vale do Rio Doce de Seguridade Social VALIA and was funded by monthly contributions made by us and our employees, calculated based on periodic actuarial appraisals. In May 2000, we implemented a new supplementary social security plan with characteristics of defined contribution, which complements the earnings of programmed retirements. The plan offers benefits to cover death, physical invalidity, and sickness, with defined benefit characteristics. Brazilian employees could opt to migrate to the New Plan (a Benefit Mix Plan Vale Mais) which was taken up by over 98% of our employees. The Old Plan will continue in existence, covering almost exclusively retired participants and their beneficiaries. Additionally we provide supplementary payments to a specific group of former Brazilian employees, in addition to the regular benefits from Valia. The plan provides postretirement health care, dental and pharmaceutical benefits. Upon the acquisition of Inco, we assumed benefits through defined benefit pension plans that cover essentially all its employees and post retirement benefits other than pensions that also provide certain health care and life insurance benefits for retired employees. The following information details the status of the defined benefit elements of all plans in accordance with employers disclosure about pensions and other post retirement benefits and employers accounting for defined benefit pension and other postretirement plans, as amended. We use a measurement date of December 31 for our pension and post retirement benefit plans. a) Change in benefit obligation As of December31 2009 2008 Overfunded Underfunded Underfunded Overfunded Underfunded Underfunded pension plans pension plans other benefits pension plans pension plans other benefits Benefit obligation at beginning of year 2,424 3,031 1,069 3,178 4,436 1,671 Service cost 11 43 17 11 60 25 Interest cost 313 249 88 309 245 85 Plan amendment - - - - 16 - Benefits paid (226 ) (279 ) (65 ) (283 ) (291 ) (70 ) Effect of exchange rate changes 843 555 187 (779 ) (775 ) (272 ) Actuarial loss (gain) 296 324 135 (12 ) (660 ) (370 )

Long-term incentive compensatio

Long-term incentive compensation plan
	12 Months Ended Dec. 31, 2009
Long-term incentive compensation plan [Abstract]
Long-term incentive compensation plan	19 Long-term incentive compensation plan Since 2008, a long-term incentive compensation plan, was implemented. Under the terms of the plan, the participants, restricted to certain executives, may elect to allocate part of their annual bonus to the plan. The allocation is applied to purchase preferred shares of Vale, through a predefined financial institution, at market conditions and with no benefit provided by Vale. The shares purchased by each executive are unrestricted and may, at the participants discretion, be sold at any time. However, the shares must be held for a three-year period and the executive must be continually employed by Vale during that period. The participant then becomes entitled to receive from Vale a cash payment equivalent to the total amount of shares held, based on their market rates. The total shares linked to the plan at December31, 2009 and 2008, were 1,809,117 and 711,005, respectively. Additionally, as a long-term incentive certain eligible executives have the opportunity to receive at the end of the three-year cycle a certain number of shares at market rates, based on an evaluation of their career and performance factors measured as an indicator of total return to stockholders. We account for the compensation cost provided to our executives under this long-term incentive compensation plan, following the requirements Accounting for Stock-Based Compensation. Liabilities are measured at each reporting date at fair value, based on market rates. Compensation costs incurred are recognized, over the defined three-year vesting period. At December31, 2009 and 2008, we recognized a liability of US$72 and US$7, respectively, through the Statement of Income.

Commitments and contingencies

Commitments and contingencies
	12 Months Ended Dec. 31, 2009
Commitments and contingencies [Abstract]
Commitments and contingencies	20 Commitments and contingencies a)In connection with a tax-advantaged lease financing arrangement sponsored by the French Government, we provided certain guarantees on behalf of Vale Inco New Calednia (VINC) pursuant to which we guaranteed payments due from VINC of up to a maximum amount of US$100 (Maximum Amount) in connection with an indemnity. We also provided an additional guarantee covering the payments due from VINC of (a)amounts exceeding the Maximum Amount in connection with the indemnity and (b)certain other amounts payable by VINC under a lease agreement covering certain assets. During the second quarter two new bank guarantees totaling US$62 (43) were established by us on behalf of VINC in favour of the South Province of New Caledonia in order to guarantee the performance of VINC with respect to certain environmental obligations in relation to the metallurgical plant and the Kwe West residue storage facility. Sumic Nickel Netherlands B.V., a 21% stockholder of VINC, has a put option to sell us 25%, 50%, or 100% of the shares they own of VINC. The put option can be exercised if the defined cost of the nickel-cobalt development project exceeds a value agreed between the shareholders at project rates and an agreement cannot be reached on how to proceed with the project. We provided a guarantee covering certain termination payments due from VINC to the supplier under an electricity supply agreement (ESA) entered into in October 2004 for the VINC project. The amount of the termination payments guaranteed depends upon a number of factors, including whether any termination of the ESA is a result of a default by VINC and the date on which an early termination of the ESA were to occur. If VINC defaults under the ESA prior to the anticipated start date for supply of electricity to the project, the termination payment, which currently is at its maximum, would be US$209 (145). Once the supply of electricity under the ESA to the project begins, the guaranteed amounts will decrease over the life of the ESA. In February 2009, we and our subsidiary, Vale Inco Newfoundland and Labrador Limited (VINL), entered into a fourth amendment to the Voiseys Bay Development agreement with the Government of Newfoundland and Labrador, Canada, that permitted VINL to ship up to 55,000 metric tons of nickel concentrate from the Voiseys Bay area mines. As part of the agreement, VINL agreed to provide the Government of Newfoundland and Labrador financial assurance in the form of letters of credit each in the amount of Canadian US$17 (CAD$16) for each shipment of nickel concentrate shipped out of the province from January1, 2009 to August31, 2009. The amount of this financial assurance was Canadian US$118 (CAD$112) based on seven shipments of nickel concentrate and as of December31, 2009, US$65 (CAD$62) remains outstanding. As of December31, 2009, there was an additional US$154 of letters of credit issued and outstanding as US$47 in additional bank guarantees. These are associated with environmental reclamation and other operating associated items such as insurance, electricity commitments and import and export duties.

Other expenses

Other expenses
	12 Months Ended Dec. 31, 2009
Other expenses [Abstract]
Other expenses	21 Other expenses The line Other operating expenses totaled US$1,522 in 2009 (US$1,254 in 2008). The expenses of approximately US$880 related to idle capacity and stoppage of operations during the downturn period in the economy is the most significant item recorded in 2009.

Fair value disclosure of financ

Fair value disclosure of financial assets and liabilities
	12 Months Ended Dec. 31, 2009
Fair value disclosure of financial assets and liabilities [Abstract]
Fair value disclosure of financial assets and liabilities	22 Fair value disclosure of financial assets and liabilities The Financial Accounting Standards Board, through Accounting Standards Codification and Accounting Standards Updates, define fair value, set out a framework for measuring fair value, which refers to valuation concepts and practices and require certain disclosures about fair value measurements. a) Measurements The pronouncements define fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. In determining fair value, the Company uses various methods including market, income and cost approaches. Based on these approaches, the Company often utilizes certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and or the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable inputs. The Company utilizes techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Under this standard, those inputs used to measure the fair value are required to be classified on three levels. Based on the characteristics of the inputs used in valuation techniques the Company is required to provide the following information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value are classified and disclosed as follows: Level1 Unadjusted quoted prices on an active, liquid and visible market for identical assets or liabilities that are accessible at the measurement date; Level2 Quoted prices for identical or similar assets or liabilities on active markets, inputs other than quoted prices that are observable, either directly or indirectly, for the term of the asset or liability; Level3 Assets and liabilities, which quoted prices, do not exist, or those prices or valuation techniques are supported by little or no market activity, unobservable or illiquid. At this point fair market valuation becomes highly subjective. b) Measurements on a recurring basis The description of the valuation methodologies used for recurring assets and liabilities measured at fair value in the Companys Consolidated Balance Sheet at December31, 2009 and 2008 are summarized below: Available-for-sale securities They are securities that are not classified either as held-for-trading or as held-to-maturity for strategic reasons and have readily available market prices. We evaluate the carrying value of some of our investments in relation to publicly quoted market prices when available. When there is no market value, we use inputs other than quoted prices. Derivatives The market approach is used for the swaps to estimate the fair value discounting their cash flows using the interest rate of the

Segment and geographical inform

Segment and geographical information
	12 Months Ended Dec. 31, 2009
Segment and geographical information [Abstract]
Segment and geographical information	23 Segment and geographical information We adopt disclosures about segments of an enterprise and related information with respect to the information we present about our operating segments. The standard introduced a management approach concept for reporting segment information, whereby such information is required to be reported on the basis that the chief decision-maker uses internally for evaluating segment performance and deciding how to allocate resources to segments. We analyze our segment information on an aggregated and disaggregated basis as follows: Ferrous products comprises iron ore mining and pellet production, as well as our Brazilian Northern and Southern transportation systems, including railroads, ports and terminals, as they pertain to mining operations. Manganese mining and ferroalloys are also included in this segment. Non-ferrous comprises the production of non-ferrous minerals, including nickel (co-products and by-products), potash, kaolin, copper and aluminum- comprises aluminum trading activities, alumina refining and aluminum metal smelting and investments in joint ventures and affiliates engaged in bauxite mining. Logistics comprises our transportation systems as they pertain to the operation of our ships, ports and railroads for third-party cargos. Others comprises our investments in joint ventures and affiliates engaged in other businesses. Information presented to senior management with respect to the performance of each segment is generally derived directly from the accounting records maintained in accordance with accounting practices adopted in Brazil together with certain minor inter-segment allocations. Consolidated net income and principal assets are reconciled as follows: Results by segment before eliminations (aggregated) Year ended December31, 2009 2008 2007 (*) Non (*) Non (*) Non RESULTS Ferrous ferrous Logistic Others Elimination Consolidated Ferrous ferrous Logistic Others Elimination Consolidated Ferrous ferrous Logistic Others Elimination Consolidated Gross revenues- Foreign 23,656 8,151 67 562 (12,152 ) 20,284 33,369 13,668 51 588 (15,842 ) 31,834 21,126 16,844 61 242 (10,437 ) 27,836 Gross revenues- Domestic 1,779 1,148 1,101 389 (762 ) 3,655 4,342 1,341 1,640 234 (882 ) 6,675 3,865 1,238 1,519 1 (1,344 ) 5,279 Cost and expenses (17,374 ) (7,927 )

Related party transactions

Related party transactions
	12 Months Ended Dec. 31, 2009
Related party transactions [Abstract]
Related party transactions	24 Related party transactions Balances from transactions with major related parties are as follows: As of December31 2009 2008 Assets Liabilities Assets Liabilities AFFILIATED COMPANIES AND JOINT VENTURES Companhia Hispano-Brasileira de Pelotizao HISPANOBRS 34 34 7 34 Companhia talo-Brasileira de Pelotizao ITABRASCO 1 6 37 64 Companhia Nipo-Brasileira de Pelotizao NIBRASCO - 22 29 71 Companhia Coreano-Brasileira de Pelotizao KOBRASCO 1 5 1 22 Baovale Minerao SA 2 22 2 20 Usinas Siderrgicas de Minas Gerais SA USIMINAS(*) - - 18 - Minas da Serra Geral SA MSG - 26 - 13 MRS Logstica SA 10 418 8 219 Minerao Rio Norte SA - 25 8 38 Samarco Minerao SA 55 - 10 - Teal Minerals Incorporated 84 - - - Korea Nickel Corporation 11 - 38 - Mitsui CO, LTD - 26 - - Others 24 29 32 24 222 613 190 505 Current 186 496 190 414 Long-term 36 117 - 91 (*)Sold in April 2009 These balances are included in the following balance sheet classifications: As of December31 2009 2008 Assets Liabilities Assets Liabilities Current assets Accounts receivable 79 - 137 - Loans and advances to related parties 107 - 53 - Non-current assets Loans and advances to related parties 36 - - - Current liabilities Suppliers - 463 - 302 Loans from related parties - 33 - 112 Non-current liabilities Long-term debt - 117 - 91 222 613 190

Derivative financial instrument

Derivative financial instruments
	12 Months Ended Dec. 31, 2009
Derivative financial instruments [Abstract]
Derivative financial instruments	25 Derivative financial instruments Risk management policy Vales risk management strategy encompasses an enterprise risk management approach where we evaluate not only market risk impacts on the business, but also the impacts arising from credit and operating risks. An enterprise wide risk management approach is considered by us to be mandatory for Vale as traditional market risk measures, such as VaR (Value at Risk), are not sufficient to evaluate the group exposures since our main goal is to avoid a possible lack of cash to fulfill our future obligations and needs. We also consider the correlations between different market risk factors when evaluating our exposures. By doing so, we are able to evaluate the net impact on our cash flows from all main market variables. Using this framework we also identified a natural diversification of products and currencies in our portfolio. This diversification benefit implies in a natural reduction of the overall risk of the Company. Additionally, we are constantly working to implement risk mitigation strategies that significantly contribute to reduce the volatility in our cash flows beyond the levels initially observed and to acceptable levels of risk. Vale considers that the effective management of risk is a key objective to support its growth strategy and financial flexibility. The risk reduction on Vales future cash flows contributes to a better perception of the Companys credit quality, improving its ability to access different markets. As a commitment to the risk management strategy, the Board of Directors has established an enterprise-wide risk management policy and a risk management committee. The risk management policy determines that Vale should evaluate regularly its cash flow risks and potential risk mitigation strategies. Whenever considered necessary, mitigation strategies should be put in place to reduce cash flow volatility. The executive board is responsible for the evaluation and approval of long-term risk mitigation strategies recommended by the risk management committee. The risk management committee assists our executive officers in overseeing and reviewing our enterprise risk management activities including the principles, policies, process, procedures and instruments employed to manage risk. The risk management committee reports periodically to the executive board on how risks have been monitored, what are the most important risks we are exposed to and their impact on cash flows. The risk management policy and the risk management procedures, that complement the normative of risk management governance model, explicitly prohibit speculative transactions with derivatives and require the diversification of operations and counterparties. Besides the risk management governance model, Vale has put in place a well defined corporate governance structure. The recommendation and execution of the derivative transactions are implemented by different and independent areas. It is the responsibility of the risk management department to define and propose to the risk management committee market risk mitigation strategies consistent with Vales

Subsequent events

Subsequent events
	12 Months Ended Dec. 31, 2009
Subsequent events [Abstract]
Subsequent events	26 Subsequent events In January, we entered into an agreement, to sell the aluminum assets of our wholly-owned subsidiary Valesul Alumnio S.A, located in the State of Rio de Janeiro, Brazil, to Alumnio Nordeste S.A., a company of the Metalis group, for US$31. In January we redeemed all outstanding export receivables securitization notes issued in September 2000 and July 2003. The outstanding principal amounts were US$28 for the September 2000, at an interest rate of 8.926% per annum notes due in 2010 and US$122 for the July 2003, at an interest rate of 4.43% per annum notes due in 2013. Redeemed debt amounts totaled US$150. In January we entered into a purchase agreement with Bunge Fertilizantes S.A. and Bunge Brasil Holdings B.V. to acquire 100% of the outstanding shares of Bunge Participaes e Investimentos S.A. (BPI), the Company which has assets in Brazil and investments in Fertifos Administrao e Participaes S.A. (Fertifos), which holds 42.3% of Fertilizantes Fosfatados S.A. Fosfertil (Fosfertil), for US$3,800, in all cash-transaction. The acquisition is still subject to conditions precedent such as approvals from governmental regulatory agencies. Also, as part of this acquisition we entered into option contracts to buy the additional shares of Fertifos Administrao e Participaes S.A. (Fertifos) with Fertilizantes Heringer S.A. Heringer (strike price US$2) , Fertilizantes do Paran Ltda. Fertipar (strike price US$40) and Yara Brasil Fertilizantes S.A. (strike price US$785). These contracts give us the right to acquire 16.3% of Fosfertil shares and are subject to certain conditions, among them, the effective acquisition of the fertilizer assets of Bunge Group in Brazil. Control over these businesses have not been obtained when these financial statements were approved to be issued.