United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the
Securities Exchange Act of 1934
For the month of
December 2019
Vale S.A.
Praia de Botafogo nº 186, 18º andar, Botafogo
22250-145 Rio de Janeiro, RJ, Brazil
(Address of principal executive office)
(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)
(Check One) Form 20-F x Form 40-F o
(Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1))
(Check One) Yes o No x
(Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7))
(Check One) Yes o No x
(Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)
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Vale informs on estimates update
Rio de Janeiro, December 2nd, 2019 - Vale S.A. (Vale), informs that it has updated its estimates in an event held today with investors in New York.
Estimated production volumes
|
| 2020E |
| 2021E |
| 2022E |
| 2023E |
|
Iron Ore (Mt)(1) |
| 340 - 355 |
| 375 - 395 |
| 390 - 400 |
| 390 - 400 |
|
Copper (kt) |
| 400 |
| 430 |
| 460 |
| 480 |
|
Nickel:
· Production of 240kt after improvements in the North Atlantic Operations and resumption of Onça Puma 2nd furnace.
· Optionality to reach 360kt production in a scenario of 10kt expansion in Sorowako and 110kt of Bahodopi and Pomalaa projects considering full equity in PTVI and associates for Bahodopi and Pomalaa projects.
Estimated costs
Iron Ore: C1(2) cash cost of US$ 15.0/t in 2019 and varying between US$ 13.0/t - US$ 13.5/t in 2024.
Unitary freight costs(3): US$ 18.0/t in 2019 and US$ 16.3/t in 2024.
Estimated capex
US$ billion |
| 2020E |
| 2021E |
| Next year’s average |
|
Vale total |
| 5.0 |
| 5.0 |
| 4.5 |
|
Sustaining(4) |
| 4.1 |
| 4.1 |
| — |
|
Growth |
| 0.9 |
| 0.9 |
| — |
|
(1) Includes third party purchase, run-of-mine and feed for pelletizing plants.
(2) Assuming: (i) return of halted operations; (ii) productivity gains; (iii) Fx of BRL 4.00/USD and (iv) others.
(3) Based on HSFO of US$ 376/t in 2019 and US$ US$ 368/t in 2024 and LSFO of US$ 575/t in 2019 and US$ 537/t in 2024, assuming that vessels equipped with scrubbers will still be allowed to consume high sulphur fuel oil and assuming lower exposure to freight spot market due to the new fleet of Valemax and Guaibamax and other initiatives.
(4) Includes replacement capex.
Disbursements related to Brumadinho(5)
Vale informs that it has updated its estimates related do Brumadinho and that these must be considered as such:
US$ million(6) |
| 2019E |
| 2020E |
| 2021E |
| 2022E |
| 2023-2031E |
Provisions |
| 1,000 – 1,100 |
| 1,000 – 1,400 |
| 1,050 – 1,450 |
| 500 - 900 |
| Up to US$5.4 billion |
Incurred expenses |
| 650 - 750 |
| 500 - 600 |
| 350 - 450 |
| 250 - 350 |
| <100/year |
Total |
| 1,650 – 1,850 |
| 1,500 – 2,000 |
| 1,400 – 1,900 |
| 750 – 1,250 |
| ~8,000 |
Estimated free cash flow
2022 free cash flow ranging from US$ 7.0 billion to US$ 14.0 billion, depending on the following assumptions: (a) annual average iron ore price ranging from US$ 65/t to US$ 85/t; (b) annual average nickel price ranging from US$ 15,000/t to US$ 20,000/t; (c) Average FX BRL/USD of 4.00 for 2022; (d) US$ 0.7 billion of gold stream in 2022. Free cash flow estimates do not consider dividends, buybacks and bolt-on acquisitions.
Estimated EBITDA
2022 EBITDA ranging from US$ 15.5 billion to US$ 23.5 billion, depending on the following assumptions: (a) annual average iron ore price ranging from US$ 65/t to US$ 85/t; (b) annual average nickel price ranging from US$ 15,000/t to US$ 20,000/t; (c) Average FX BRL/USD of 4.00 for 2022.
Estimated EBITDA breakeven
EBITDA breakeven of US$ 37/t for 2019 and potential variation from US$ 28/t to US$ 30/t in the next years.
Estimated accumulated free cash flow
Accumulated free cash flow from 2020 to 2022 ranging from, approximately, US$ 17 billion to US$ 36 billion, depending on the following assumptions: (a) annual average iron ore price ranging from US$ 65/t to US$ 85/t; (b) annual average nickel price ranging from US$ 15,000/t to US$ 20,000/t; (c) Average FX BRL/USD of 3.92 BRL/USD in 2019 and BRL/USD of 4.00 between 2020 and 2022; (d) includes US$ 6.0 billion of cash surplus in 2019; (e) US$ 0.7 billion of gold stream in 2022; and (f) do not consider dividends, buy-backs and bolt-on acquisition.
(5) Includes reparation disbursements, incurred expenses in reparation and de-characterization projects.
(6) Except when indicated.
Estimated cash flow drags reduction
US$ million |
| 2019E |
| 2020E |
| 2021E |
| 2022E |
|
Mozambique and VNC |
| 1,000 |
| 680 |
| 500 |
| — |
|
Stoppage expenses |
| 900 |
| 500 |
| 180 |
| — |
|
Samarco(7) |
| 400 |
| 900 |
| 500 |
| 160 |
|
MBR (dividends) |
| 200 |
| — |
| — |
| — |
|
Others |
| 300 |
| 550 |
| 50 |
| — |
|
Sustainability targets
Vale is committed to sustainability and informs that it has revised its 2030 sustainability goals for more ambitious goals: (i) 100% self-generation of clean energy globally; (ii) recover and protect 500,000 ha of degraded land beyond our boundaries; and (iii) reduce greenhouse gas emissions aligned with the Paris Agreement and become carbon neutral by 2050.
Vale clarifies that the information provided in this document represent only an expectation, hypothetical data that by no means constitute a promise of performance by Vale and/or its management. The estimates presented involve market factors that are beyond the control of Vale and, therefore, can be subject to new changes.
Additionally, Vale informs that will file again in due course the item 11 of its Reference Form, in the period required by the Instruction CVM number 480 of December 7, 2009, as amended.
For further information, please contact:
+55-21-3485-3900
Andre Figueiredo: andre.figueiredo@vale.com
Andre Werner: andre.werner@vale.com
Mariana Rocha: mariana.rocha@vale.com
Samir Bassil: samir.bassil@vale.com
This press release may include statements that present Vale’s expectations about future events or results. All statements, when based upon expectations about the future, involve various risks and uncertainties. Vale cannot guarantee that such statements will prove correct. These risks and uncertainties include factors related to the following: (a) the countries where we operate, especially Brazil and Canada; (b) the global economy; (c) the capital markets; (d) the mining and metals prices and their dependence on global industrial production, which is cyclical by nature; and (e) global competition in the markets in which Vale operates. To obtain further information on factors that may lead to results different from those forecast by Vale, please consult the reports Vale files with the U.S. Securities and Exchange Commission (SEC), the Brazilian Comissão de Valores Mobiliários (CVM), and the French Autorité des Marchés Financiers (AMF), and in particular the factors discussed under “Forward-Looking Statements” and “Risk Factors” in Vale’s annual report on Form 20-F.
(7) Includes expenses related to the Renova Foundation.
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.
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| Vale S.A. |
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| (Registrant) |
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| By: | /s/ André Figueiredo |
Date: December 2, 2019 |
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| Director of Investor Relations |