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
July 2024
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 ¨
Vale’s performance in 2Q24
Rio de Janeiro, July 25th, 2024. “Our strong operational performance continues quarter after quarter. In Iron Ore Solutions, we achieved record-high second quarter production since 2018, driven mainly by consistent performance at S11D. As part of our strategic objective to become the supplier of choice for low-carbon steel, we are advancing on key growth projects such as Vargem Grande and Capanema, which together will add 30 Mt of capacity in the next twelve months. Additionally, we are pleased to announce a partnership within our Mega Hubs strategy, further strengthening our market position as a competitive direct reduction products supplier. In Energy Transition Metals, we resumed operations at Sossego, Onça Puma, and Salobo. We recently announced Shaun Usmar as the new CEO to lead our copper and nickel business, bringing his extensive mining experience and strategic vision. Lastly, we are proud to have successfully eliminated the B3/B4 dam and we are on track to conclude 53% of the decharacterization program by year-end, reinforcing our commitment to safety and sustainability.” commented Eduardo Bartolomeo, Chief Executive Officer.
Selected financial indicators
| US$ million | 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q | 1H24 | 1H23 | ∆ y/y |
| Net operating revenues | 9,920 | 9,673 | 3% | 8,459 | 17% | 18,379 | 18,107 | 2% |
| Total costs and expenses (ex-Brumadinho and dam decharacterization)1 | (6,974) | (6,412) | 9% | (5,897) | 18% | (12,871) | (11,815) | 9% |
| Expenses related to Brumadinho event and dam decharacterization | 1 | (271) | n.a. | (41) | n.a. | (40) | (382) | -90% |
| Adjusted EBIT | 3,200 | 3,219 | -1% | 2,724 | 17% | 5,924 | 6,277 | -6% |
| Adjusted EBIT margin (%) | 32% | 33% | -1 p.p | 32% | 0 p.p | 32% | 35% | -3 p.p |
| Adjusted EBITDA | 3,993 | 3,998 | 0% | 3,438 | 16% | 7,431 | 7,712 | -4% |
| Adjusted EBITDA margin (%) | 40% | 41% | -1 p.p | 41% | -1 p.p | 40% | 43% | -3 p.p |
| Proforma adjusted EBITDA 2 3 | 3,992 | 4,269 | -6% | 3,479 | 15% | 7,471 | 8,094 | -8% |
| Net income attributable to Vale's shareholders | 2,769 | 892 | 210% | 1,679 | 65% | 4,448 | 2,729 | 63% |
| Net debt 4 | 8,590 | 8,908 | -4% | 10,105 | -15% | 8,590 | 8,908 | -4% |
| Expanded net debt | 14,683 | 14,690 | 0% | 16,388 | -10% | 14,683 | 14,690 | 0% |
| Capital expenditures | 1,328 | 1,208 | 10% | 1,395 | -5% | 2,723 | 2,338 | 16% |
| 1 Includes adjustment of US$ 83 million in 2Q24, US$ 67 million in 1Q24, US$ 150 million in 1H24, US$ 52 million in 2Q23 and US$ 87 million in 1H23 to reflect the performance of the streaming transactions at market price. 2 Excluding expenses related to Brumadinho. 3 Including the EBITDA from associates and JVs. Historical figures were restated. 4 Including leases (IFRS 16). | ||||||||
Highlights
Business Results
| · | Iron ore shipments increased by 5.4 Mt (+7%) y/y and 16.0 Mt (25%) q/q, driven by record production for a second quarter since 2018, as well as by inventory sales. |
| · | The strong shipment performance led to a Proforma EBITDA of US$ 4.0 billion. Year-on-year, Proforma EBITDA was slightly lower (-6%), mainly due to higher freight costs and concentration of maintenance activities to maximize performance in the 2H24. Proforma EBITDA increased 15% sequentially. |
| · | Iron ore fines C1 cash cost ex-3rd party purchases was 6% higher q/q, reaching US$ 24.9/t, mainly due to a seasonal inventory turnover impact and concentration of maintenance activities. These effects were partially offset by the positive impact of higher production volumes and the BRL depreciation. We remain highly confident in achieving our C1 cost guidance of US$ 21.5-23.0/t in 2024, especially as lower-cost volumes from the Northern System ramp-up in the 2H, while the heavier maintenance activities during the 1H set the stage for a stronger cost and operating performance in the 2H. |
| 1 |
| · | Iron ore fines freight cost decreased US$ 0.3/t q/q, reaching US$ 19.0/t, US$ 6.8/t lower than the Brazil-China C3 route average in Q2, driven by our long-term affreightment contracts exposure. |
| · | Copper and nickel all-in costs were US$ 3,651/t and US$ 15,000/t in the quarter, respectively, with both businesses on track to deliver their respective cost guidances for the year. |
Disciplined capital allocation
| · | Capital expenditures of US$ 1.3 billion in Q2, US$ 0.1 billion higher y/y, in line with the year’s guidance (US$ ~6.5 billion). |
| · | Gross debt and leases of US$ 15.1 billion as of June 30th, 2024, US$ 0.5 billion higher q/q. In the quarter, Vale implemented a liability management strategy with a US$ 1.0 billion bond offering and a US$ 1.0 billion tender offer and redemption program. The bond offering was concluded in June and the settlement of the tender offer and redemption in July, resulting in a temporary increase in gross debt, which was partially offset by a US$ 0.5 billion debt repayment. |
| · | Expanded net debt of US$ 14.7 billion as of June 30th, 2024, US$ 1.7 billion lower q/q, mainly driven by the proceeds received from Manara Minerals, following the Vale Base Metals partnership deal. Vale’s expanded net debt target remains at US$ 10-20 billion. |
Value creation and distribution
| · | US$ 1.6 billion in interest on capital to be paid in September 2024, consistent with Vale’s minimum dividend policy applied to 1H24 results. |
| · | Allocation of US$ 114 million as part of the 4th buyback program in the quarter. As of the date of this report, the 4th buyback program was 22% complete1, with 33.1 million shares repurchased. |
Recent developments
| · | The Onça Puma nickel mine and the Sossego copper mine resumed activities in June, after the Pará State environmental authority reinstated their operating licenses, which were halted since April. |
| · | The Salobo 3 processing plant operations resumed in July, after being halted for 31 days due to a fire at the conveyor belt. Vale’s 2024 copper production guidance of 320-355 kt has been maintained. |
Focusing and strengthening the core
| · | Gaining momentum on Iron Ore Solutions: |
| · | Key growth projects are underway: +15 Mt at Vargem Grande and +15 Mt at Capanema are 96% and 83% complete and on track to start-up in 4Q24 and in mid-2025, respectively. |
| · | Vale signed, in July, a partnership to build an iron ore concentration plant in Sohar, Oman. With an initial production capacity of 12 Mtpa of high-grade iron ore concentrates, primarily suitable for direct reduction agglomerates, the plant will feed Vale’s pellet plants and future briquette plants in the region. The start-up is expected in 2027. The partner will wholly own and operate the plant, and Vale will invest in the infrastructure to connect the concentration plant to its agglomeration facilities in the region. The concentration plant development is an important step in Vale’s strategy to develop low-carbon solutions for the steel industry. Vale aims to replicate this asset-light investment model for metallics production in the Mega Hubs. |
| · | Building a unique Energy Transition Metals vehicle: |
| · | In April, Vale completed the strategic partnership with Manara Minerals, a joint venture between Ma’aden and Saudi Arabia’s Public Investment Fund. Manara invested US$ 2.5 billion for a 10% equity interest in Vale Base Metals Limited (VBM), the holding company of Vale’s Energy Transition Metals business. |
1 Related to the October 2023 4th buyback program for a total of 150 million shares.
| 2 |
| · | In June, PT Vale Indonesia Tbk (PTVI) divestment obligation was concluded. In connection with that, the special license for PTVI was renewed until December 2035 with the possibility of an extension beyond that period. Vale Canada Limited now owns 33.9% of PTVI’s shares and will continue to influence PTVI through nominations to the Board of Commissioners. Moreover, its offtake rights are preserved. Vale will deconsolidate PTVI and add its proportionate EBITDA starting in Q3. |
Promoting sustainable mining
| · | The B3/B4 dam decharacterization was completed in May. The dam, located in Nova Lima, Minas Gerais, was classified with the highest emergency level in 2019. The B3/B4 dam was Vale’s 14th upstream dam decharacterized since the Upstream Dam Decharacterization Program was created in 2019. |
| · | Vale has voluntarily adopted the international standard issued by the International Sustainability Standards Board (ISSB) for preparing and reporting financial information related to sustainability. The first report under the ISSB standard is expected to be released in 2025, based on the fiscal year of 2024. |
| · | Vale has published the TNFD (Taskforce on Nature-related Financial Disclosures) report for the year of 2023, presenting results of the application of the LEAP (Locate, Evaluate, Assess and Prepare) approach to our direct operations in Brazil. |
| · | Vale and Komatsu have signed an agreement to develop and test, in partnership with Cummins, Dual-Fuel haul trucks, powered by a mixture of ethanol and diesel. They will be the world's first trucks of their size, with payloads of 230 to 290 tons, to run on ethanol. The Dual Fuel Program will contribute to Vale’s goal of reducing scope 1 and 2 carbon emissions (direct and indirect) by 33% by 2030 and becoming net-zero by 2050. |
Reparation
| · | The Brumadinho Integral Reparation Agreement continues to progress with 75% of the agreed-upon commitments completed and in accordance with the settlement deadlines. In addition, R$ 3.6 billion were paid in individual compensation since 2019. |
| · | In the Mariana reparation, Vale, alongside Samarco and BHP, is in advanced negotiations to seek a settlement of the obligations under the Framework Agreement, the Federal Public Prosecution Office Claim, and other claims by government entities relating to Samarco’s Fundão dam failure. Vale remains fully committed to supporting the extensive ongoing remediation and compensation efforts in Brazil and is engaged in reaching mutually beneficial resolution for all parties. Renova continues to progress with its disbursements, which reached R$ 37 billion in the end of the quarter. |
| 3 |
Adjusted EBITDA
| US$ million | 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q | 1H24 | 1H23 | ∆ y/y |
| Net operating revenues | 9,920 | 9,673 | 3% | 8,459 | 17% | 18,379 | 18,107 | 2% |
| COGS | (6,349) | (5,940) | 7% | (5,367) | 18% | (11,716) | (10,889) | 8% |
| SG&A | (137) | (139) | -1% | (140) | -2% | (277) | (257) | 8% |
| Research and development | (189) | (165) | 15% | (156) | 21% | (345) | (304) | 13% |
| Pre-operating and stoppage expenses | (91) | (103) | -12% | (92) | -1% | (183) | (227) | -19% |
| Expenses related to Brumadinho & dam decharacterization | 1 | (271) | n.a. | (41) | n.a. | (40) | (382) | -90% |
| Other operational expenses¹ | (208) | (65) | 220% | (142) | 46% | (350) | (138) | 154% |
| EBITDA from associates and JVs | 253 | 229 | 10% | 203 | 25% | 456 | 367 | 24% |
| Adjusted EBIT | 3,200 | 3,219 | -1% | 2,724 | 17% | 5,924 | 6,277 | -6% |
| Depreciation, amortization & depletion | 793 | 779 | 2% | 714 | 11% | 1,507 | 1,435 | 5% |
| Adjusted EBITDA | 3,993 | 3,998 | 0% | 3,438 | 16% | 7,431 | 7,712 | -4% |
| Proforma Adjusted EBITDA² | 3,992 | 4,269 | -6% | 3,479 | 15% | 7,471 | 8,094 | -8% |
| ¹ Includes adjustment of US$ 83 million in 2Q24, US$ 67 million in 1Q24, US$ 150 million in 1H24, US$ 52 million in 2Q23 and US$ 87 million in 1H23, to reflect the performance of the streaming transactions at market price. ² Excluding expenses related to Brumadinho. | ||||||||
Proforma adjusted EBITDA– US$ million, 2Q24 vs. 2Q23
Sales & price realization
Volume sold - Minerals and metals
| ‘000 metric tons | 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q | 1H24 | 1H23 | ∆ y/y | ||||
| Iron ore | 79,792 | 74,374 | 7% | 63,827 | 25% | 143,619 | 130,032 | 10% | ||||
| Iron ore fines | 68,512 | 63,329 | 8% | 52,546 | 30% | 121,058 | 109,190 | 11% | ||||
| ROM | 2,416 | 2,236 | 8% | 2,056 | 18% | 4,471 | 3,900 | 15% | ||||
| Pellets | 8,864 | 8,809 | 1% | 9,225 | -4% | 18,089 | 16,942 | 7% | ||||
| Nickel | 34 | 40 | -15% | 33 | 4% | 67 | 80 | -16% | ||||
| Copper¹ | 76 | 74 | 3% | 77 | -1% | 153 | 137 | 12% | ||||
| Gold as by-product ('000 oz)¹ | 98 | 88 | 11% | 97 | 1% | 194 | 159 | 22% | ||||
| Silver as by-product ('000 oz)¹ | 448 | 518 | -14% | 433 | 3% | 881 | 924 | -5% | ||||
| PGMs ('000 oz) | 38 | 89 | -57% | 73 | -48% | 110 | 163 | -32% | ||||
| Cobalt (metric ton) | 320 | 660 | -52% | 465 | -31% | 785 | 1,281 | -39% | ||||
| ¹ Including sales originated from both nickel and copper operations. | ||||||||||||
| 4 |
Average realized prices
| US$/ton | 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q | 1H24 | 1H23 | ∆ y/y |
| Iron ore - 62% Fe reference price | 111.8 | 111.0 | 1% | 123.6 | -10% | 117.7 | 118.3 | 0% |
| Iron ore fines Vale CFR/FOB realized price | 98.2 | 98.5 | 0% | 100.7 | -2% | 99.3 | 102.7 | -3% |
| Pellets CFR/FOB (wmt) | 157.2 | 160.4 | -2% | 171.9 | -9% | 164.7 | 161.4 | 2% |
| Nickel | 18,638 | 23,070 | -19% | 16,848 | 11% | 17,758 | 24,162 | -27% |
| Copper2 | 9,187 | 6,986 | 32% | 7,632 | 20% | 8,406 | 8,048 | 4% |
| Gold (US$/oz)12 | 2,368 | 2,082 | 14% | 1,398 | 69% | 2,224 | 1,975 | 13% |
| Silver (US$/oz)2 | 27.8 | 24.0 | 16% | 23.0 | 21% | 25.4 | 24.1 | 5% |
| Cobalt (US$/t)1 | 28,258 | 34,694 | -19% | 28,096 | 1% | 29,586 | 33,790 | -12% |
| ¹ Prices presented above were adjusted to reflect the market prices of products delivered related to the streaming transactions. 2 Including sales originated from both nickel and copper operations. | ||||||||
Costs
COGS by business segment
| US$ million | 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q | 1H24 | 1H23 | ∆ y/y |
| Iron Ore Solutions | 4,951 | 4,282 | 16% | 4,006 | 24% | 8,957 | 7,572 | 18% |
| Energy Transition Metals | 1,398 | 1,617 | -14% | 1,361 | 3% | 2,759 | 3,237 | -15% |
| Others | - | 41 | -100% | - | 0% | - | 80 | -100% |
| Total COGS¹ | 6,349 | 5,940 | 7% | 5,367 | 18% | 11,716 | 10,889 | 8% |
| Depreciation | 763 | 737 | 4% | 678 | 13% | 1,441 | 1,350 | 7% |
| COGS, ex-depreciation | 5,586 | 5,203 | 7% | 4,689 | 19% | 10,275 | 9,539 | 8% |
| ¹ COGS currency exposure in 2Q24 was as follows: 47.8% BRL, 46.7% USD, 5.3% CAD and 0.2% Other currencies. | ||||||||
Expenses
| US$ million | 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q | 1H24 | 1H23 | ∆ y/y |
| SG&A | 137 | 139 | -1% | 140 | -2% | 277 | 257 | 8% |
| Administrative | 116 | 118 | -2% | 120 | -3% | 236 | 219 | 8% |
| Personnel | 42 | 52 | -19% | 56 | -25% | 98 | 97 | 1% |
| Services | 41 | 30 | 37% | 32 | 28% | 73 | 58 | 26% |
| Depreciation | 9 | 14 | -36% | 10 | -10% | 19 | 25 | -24% |
| Others | 24 | 22 | 9% | 22 | 9% | 46 | 39 | 18% |
| Selling | 21 | 21 | 0% | 20 | 5% | 41 | 38 | 8% |
| R&D | 189 | 165 | 15% | 156 | 21% | 345 | 304 | 13% |
| Pre-operating and stoppage expenses | 91 | 103 | -12% | 92 | -1% | 183 | 227 | -19% |
| Expenses related to Brumadinho and dam decharacterization | (1) | 271 | n.a. | 41 | n.a. | 40 | 382 | -90% |
| Other operating expenses | 290 | 117 | 148% | 209 | 39% | 499 | 225 | 122% |
| Total operating expenses | 706 | 795 | -11% | 638 | 11% | 1,344 | 1,395 | -4% |
| Depreciation | 30 | 42 | -29% | 36 | -17% | 66 | 85 | -22% |
| Operating expenses, ex-depreciation | 676 | 753 | -10% | 602 | 12% | 1,278 | 1,310 | -2% |
| 5 |
Brumadinho
Impact of Brumadinho and Decharacterization in 2Q24
| US$ million | Provisions balance 31mar24 | EBITDA impact2 | Payments | FX and other adjustments3 | Provisions balance 30jun24 |
| Decharacterization | 3,211 | (70) | (132) | (271) | 2,738 |
| Agreements & donations1 | 2,894 | (14) | (265) | (203) | 2,412 |
| Total Provisions | 6,105 | (84) | (397) | (474) | 5,150 |
| Incurred Expenses | - | 83 | (83) | - | - |
| Total | 6,105 | (1) | (480) | (474) | 5,150 |
| ¹ Includes Integral Reparation Agreement, individual, labor and emergency indemnifications, tailing removal and containment works. 2 Includes the revision of estimates for provisions and incurred expenses, including discount rate effect. 3 Includes foreign exchange, present value and other adjustments. | |||||
Impact of Brumadinho and Decharacterization from 2019 to 2Q24
| US$ million | EBITDA impact | Payments | PV & FX adjust2 | Provisions balance 30jun24 |
| Decharacterization | 5,060 | (1,847) | (475) | 2,738 |
| Agreements & donations1 | 9,099 | (6,732) | 45 | 2,412 |
| Total Provisions | 14,159 | (8,579) | (430) | 5,150 |
| Incurred expenses | 3,170 | (3,170) | - | - |
| Others | 180 | (178) | (2) | - |
| Total | 17,509 | (11,927) | (432) | 5,150 |
| 1 Includes Integral Reparation Agreement, individual, labor and emergency indemnifications, tailing removal and containment works. 2 Includes foreign exchange, present value and other adjustments. | ||||
Cash outflow of Brumadinho & Decharacterization commitments1,2:
| US$ billion | Since 2019 until 2Q24 disbursed | 2H24 | 2025 | 2026 | 2027 | Yearly average 2028-2035³ |
| Decharacterization | 1.8 | 0.3 | 0.5 | 0.5 | 0.4 | 0.2 |
| Integral Reparation Agreement & other reparation provisions | 6.7 | 0.6 | 0.9 | 0.6 | 0.2 | 0.14 |
| Incurred expenses | 3.2 | 0.3 | 0.4 | 0.4 | 0.3 | 0.45 |
| Total | 11.7 | 1.2 | 1.8 | 1.5 | 0.9 | - |
| 1 Estimate cash outflow for 2024-2035 period, given BRL-USD exchange rates of 5.5589. 2 Amounts stated without discount to present value, net of judicial deposits and inflation adjustments. 3 Estimate annual average cash flow for Decharacterization provisions in the 2028-2035 period is US$ 238 million per year. 4 Disbursements related to the Integral Reparation Agreement ending in 2031. 5 Disbursements related to incurred expenses ending in 2028. | ||||||
| 6 |
Net income
Reconciliation of proforma EBITDA to net income
| US$ million | 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q | 1H24 | 1H23 | ∆ y/y |
| Proforma Adjusted EBITDA | 3,992 | 4,269 | -6% | 3,479 | 15% | 7,471 | 8,094 | -8% |
| Brumadinho and dam decharacterization | 1 | (271) | n.a. | (41) | n.a. | (40) | (382) | -90% |
| Adjusted EBITDA | 3,993 | 3,998 | 0% | 3,438 | 16% | 7,431 | 7,712 | -4% |
| Impairment reversal (impairment and disposals) of non-current assets, net 1 | 928 | (118) | n.a. | (73) | n.a. | 885 | (70) | n.a. |
| EBITDA from associates and JVs | (253) | (229) | 10% | (203) | 25% | (456) | (367) | 24% |
| Equity results and net income (loss) attributable to noncontrolling interests | 112 | (31) | n.a. | 116 | -3% | 198 | (214) | n.a. |
| Financial results | (1,252) | (157) | 697% | (437) | 186% | (1,689) | (687) | 146% |
| Income taxes | 34 | (1,792) | n.a. | (448) | n.a. | (414) | (2,210) | -81% |
| Depreciation, depletion & amortization | (793) | (779) | 2% | (714) | 11% | (1,507) | (1,435) | 5% |
| Net income attributable to Vale's shareholders | 2,769 | 892 | 210% | 1,679 | 65% | 4,448 | 2,729 | 63% |
| 1 Includes adjustments of US$ 83 million in 2Q24, US$ 67 million in 1Q24, US$ 150 million in 1H24, US$ 52 million in 2Q23 and US$ 87 million in 1H23, to reflect the performance of the streaming transactions at market price. | ||||||||
Financial results
| US$ million | 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q | 1H24 | 1H23 | ∆ y/y | |
| Financial expenses, of which: | (365) | (397) | -8% | (339) | 8% | (704) | (717) | -2% | |
| Gross interest | (211) | (185) | 14% | (171) | 23% | (382) | (365) | 5% | |
| Capitalization of interest | 8 | 5 | 60% | 5 | 60% | 13 | 10 | 30% | |
| Others | (139) | (179) | -22% | (145) | -4% | (284) | (286) | -1% | |
| Financial expenses (REFIS) | (23) | (38) | -39% | (28) | -18% | (51) | (76) | -33% | |
| Financial income | 78 | 106 | -26% | 109 | -28% | 187 | 227 | -18% | |
| Shareholder Debentures | (241) | 321 | n.a | 164 | n.a | (77) | 274 | n.a | |
| Derivatives¹ | (471) | 563 | n.a | 2 | n.a | (469) | 755 | n.a | |
| Currency and interest rate swaps | (455) | 558 | n.a | (14) | 3,150% | (469) | 774 | n.a | |
| Others (commodities, etc) | (16) | 5 | n.a | 16 | n.a | - | (19) | 0% | |
| Foreign exchange and monetary variation | (253) | (750) | -66% | (373) | -32% | (626) | (1,226) | -49% | |
| Financial result, net | (1,252) | (157) | 697% | (437) | 186% | (1,689) | (687) | 146% | |
| ¹ The cash effect of the derivatives was a gain of US$ 81 million in 2Q24. | |||||||||
Main factors that affected net income in 2Q24 vs. 2Q23
| US$ million | Comments | |
| 2Q23 Net income attributable to Vale's shareholders | 892 | |
| Changes to: | ||
| Proforma EBITDA | (277) | Mainly due to higher costs and expenses, which were partially offset by higher iron ore sales. |
| Brumadinho and dam decharacterization | 272 | |
| Impairment & disposal of non-current assets | 1,046 | Result on sale of subsidiary PTVI. |
| EBITDA from associates and JVs | (24) | |
| Equity results and net income (loss) attributable to noncontrolling interests | 143 | |
| Financial results | (1,095) | BRL depreciation; decrease in marked-to-market prices of derivatives. |
| Income taxes | 1,826 | 2Q23 impacted by the reversal of deferred income tax assets related to Renova Foundation provisions following the Judicial Reorganization. |
| Depreciation, depletion & amortization | (14) | |
| 2Q24 Net income attributable to Vale's shareholders | 2,769 | |
| 7 |
CAPEX
Growth and sustaining projects execution
| US$ million | 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q | 1H24 | 1H23 | ∆ y/y |
| Growth projects | 328 | 376 | -13% | 367 | -11% | 695 | 702 | -1% |
| Iron Ore Solutions | 293 | 255 | 15% | 320 | -8% | 613 | 491 | 25% |
| Energy Transition Metals | 33 | 95 | -65% | 39 | -15% | 72 | 167 | -57% |
| Nickel | 29 | 63 | -54% | 32 | -9% | 61 | 83 | -27% |
| Copper | 4 | 32 | -88% | 7 | -43% | 11 | 84 | -87% |
| Energy and others | 2 | 26 | -92% | 8 | -75% | 10 | 44 | -77% |
| Sustaining projects | 1,000 | 832 | 20% | 1,028 | -3% | 2,028 | 1,636 | 24% |
| Iron Ore Solutions | 613 | 472 | 30% | 681 | -10% | 1,294 | 984 | 32% |
| Energy Transition Metals | 372 | 326 | 14% | 328 | 13% | 700 | 589 | 19% |
| Nickel | 315 | 282 | 12% | 274 | 15% | 589 | 486 | 21% |
| Copper | 57 | 44 | 30% | 54 | 6% | 111 | 103 | 8% |
| Energy and others | 15 | 34 | -56% | 19 | -21% | 34 | 63 | -46% |
| Total | 1,328 | 1,208 | 10% | 1,395 | -5% | 2,723 | 2,338 | 16% |
Growth projects
Investments in growth projects totaled US$ 328 million in Q2, US$ 48 million lower y/y due to: (i) lower expenditures with the Salobo III copper project commissioning and (ii) the deconsolidation of PTVI investments, which were partially offset by higher disbursements in the Serra Sul 120 Mtpy iron ore project.
Growth projects progress indicator2
| Projects | Capex 2Q24 | Financial progress1 | Physical progress | Comments |
| Iron Ore Solutions | ||||
Northern System 240 Mtpy Capacity: 10 Mtpy Start-up: 1H23 Capex: US$ 772 MM | 15 | 89% | 99%2 | The railway works were completed. Tests are being conducted at the port and start-up has begun. Structural reinforcement of the mine’s loading silo has pushed silo load tests to 3Q24. |
Serra Sul 120 Mtpy3 Capacity: 20 Mtpy Start-up: 2H26 Capex: US$ 2,844 MM | 130 | 41% | 63%4 | The semi-mobile crushers are being put in place at the mine and the conveyor belts continue to be assembled. The transfer house, that connects the mine to the Long-Distance Conveyor Belts, is being assembled. Civil construction at the plant should be finished by 4Q24. |
Capanema’s Maximization Capacity: 18 Mtpy Start-up: 1H25 Capex: US$ 913 MM | 68 | 60% | 83% | The assembly of equipment, crushing machinery, and structures is on schedule to be ready by Q3. |
Briquettes Tubarão5 Capacity: 6 Mtpy Start-up: 4Q23 (Plant 1) | 1Q25 (Plant 2) Capex: US$ 342 MM | 15 | 82% | 95% | Project scope review works were completed to improve standards and operational synergies. Plant 2 is being commissioned with start-up for 1Q25. |
| Energy Transition Metals | ||||
Onça Puma 2nd Furnace Capacity: 12-15 ktpy Start-up: 2H25 Capex: US$ 555 MM | 30 | 29% | 43% | The project is advancing according to plan. Detailed engineering is substantially complete, and the assembly of the 2nd Furnace is in progress. |
1 CAPEX disbursement until end of 2Q24 vs. CAPEX expected. 2 Considering physical progress of mine, plant and logistics. 3 The project consists of increasing the S11D mine-plant capacity by 20 Mtpy. 4 With the supplementation of the CAPEX, the project start-up has been pushed from 2H24 to 1Q25. 5 The project scope, CAPEX, physical progress and start-up were revised. | ||||
2 Pre-Operating expenses included in the total estimated capex information, according to the approvals from Vale´s Board of Directors.
| 8 |
Sustaining projects
Investments in sustaining our operations totaled US$ 1.0 billion in Q2, US$ 168 million higher y/y, mainly as a result of higher investments in equipment and asset reliability improvement projects in both the Iron Ore Solutions and the Energy Transition Metals businesses.
Sustaining projects progress indicator3
| Projects | Capex 2Q24 | Financial progress1 | Physical progress | Comments |
| Iron Ore Solutions | ||||
Compact Crushing S11D Capacity: 50 Mtpy Start-up: 2H26 Capex: US$ 755 MM | 49 | 29% | 43% | The first floor of the Primary Crushing Plant has been completed and work has begun on the second floor. Civil construction for the second crusher is progressing well. Conveyor belts of the Western Corridor were completed in 1H24 as planned. |
N3 – Serra Norte Capacity: 6 Mtpy Start-up: 2H26 Capex: US$ 84 MM | 1 | 19% | 18% | Installation License and Vegetation Suppression Authorization are pending. |
VGR 1 plant revamp3 Capacity: 17 Mtpy Start-up: 2H24 Capex: US$ 67 MM | 6 | 58% | 96% | Project advancing well with start-up expected in the coming months. |
| Energy Transition Metals | ||||
Voisey’s Bay Mine Extension Capacity: 45 ktpy (Ni) and 20 ktpy (Cu) Start-up: 1H212 Capex: US$ 2,940 MM | 124 | 92% | 96% | Reid Brook activities are largely complete, with the Powerhouse planned to be fully commissioned and linked to the grid by 3Q24. Eastern Deeps mine development is concluded and work on the Bulk Material Handling system is ongoing. The full mine assets at Eastern Deeps are expected to be in operation by the end of 2024. |
1 CAPEX disbursement until end of 2Q24 vs. CAPEX expected. 2 In 2Q21, Vale achieved the first ore production of Reid Brook deposit, the first of two underground mines to be developed in the project. Eastern Deeps, the second deposit, has started to extract development ore from the deposit and is continuing its scheduled production ramp-up. 3 VGR 1 is a program made up of three simultaneous projects, VGR I Waste Containment System, Water Adequacy and the VGR I Revamp, all aimed at boosting the recovery of production capacity. The progress data provided focuses on the program's main project, the VGR I Waste Containment System.
| ||||
Sustaining capex by type - 2Q24
| US$ million | Iron Ore Solutions | Energy Transition Materials | Energy and others | Total |
| Enhancement of operations | 358 | 182 | 1 | 541 |
| Replacement projects | 9 | 149 | - | 158 |
| Filtration and dry stacking projects | 28 | - | - | 28 |
| Dam management | 29 | 4 | - | 32 |
| Other investments in dams and waste dumps | 34 | 13 | - | 47 |
| Health and Safety | 48 | 17 | 2 | 67 |
| Social investments and environmental protection | 64 | 1 | - | 65 |
| Administrative & Others | 43 | 7 | 12 | 61 |
| Total | 613 | 372 | 15 | 1,000 |
3 Pre-Operating expenses included in the total estimated capex information, according to the approvals from Vale´s Board of Directors
| 9 |
Free cash flow
| US$ million | 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q |
| Proforma EBITDA | 3,992 | 4,269 | -6% | 3,479 | 15% |
| Working capital | (1,111) | (598) | 86% | 1,468 | n.a |
| Brumadinho and decharacterization expenses | (480) | (723) | -34% | (362) | 33% |
| Income taxes and REFIS | (466) | (574) | -19% | (506) | -8% |
| Capex | (1,328) | (1,208) | 10% | (1,395) | -5% |
| Associates & JVs | (253) | (229) | 10% | (203) | 25% |
| Others | (532) | (161) | 230% | (481) | 11% |
| Free Cash Flow | (178) | 776 | n.a | 2,000 | n.a |
| Cash management and others | 3,056 | (572) | n.a | (1,795) | n.a |
| Increase/Decrease in cash & cash equivalents | 2,878 | 204 | 1311% | 205 | 1304% |
Free Cash Flow generation was US$ 178 million negative in 2Q24, US$ 954 million lower y/y, mainly explained by a combination of (i) negative working capital (US$ 513 million lower y/y), (ii) lower proforma EBITDA (US$ 277 million lower y/y) and (iii) higher capital expenditures (US$ 120 million higher y/y).
In the quarter, the negative working capital variation was largely explained by: (i) higher concentration of payments to suppliers, (ii) higher execution of concessions contract obligations, and (iii) lower accounts receivables following the 4.3 Mt of iron ore sales accrued at the end of the quarter.
In 2Q24, Vale’s cash & cash equivalents position was positively impacted by the proceeds received from Manara Minerals, following the strategic partnership at Vale Base Metals (US$ 2.455 billion), the PTVI divestment (US$ 155 million) and the net effect of liability management (US$ 560 million). In the quarter, Vale disbursed US$ 114 million to repurchase shares, as part of the 4th share buyback program.
Free Cash Flow – US$ million, 2Q24
| 10 |
Debt
| US$ million | 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q |
| Gross debt¹ | 13,770 | 12,417 | 11% | 13,248 | 4% |
| Lease (IFRS 16) | 1,360 | 1,520 | -11% | 1,426 | -5% |
| Gross debt and leases | 15,130 | 13,937 | 9% | 14,674 | 3% |
| Cash, cash equivalents and short-term investments² | (6,540) | (5,029) | 30% | (4,569) | 43% |
| Net debt | 8,590 | 8,908 | -4% | 10,105 | -15% |
| Currency swaps³ | (26) | (895) | -97% | (589) | -96% |
| Brumadinho provisions | 2,412 | 3,276 | -26% | 2,894 | -17% |
| Samarco & Renova Foundation provisions | 3,707 | 3,401 | 9% | 3,978 | -7% |
| Expanded net debt | 14,683 | 14,690 | 0% | 16,388 | -10% |
| Average debt maturity (years) | 9.2 | 8.4 | 10% | 7.5 | 23% |
| Cost of debt after hedge (% pa) | 5.8 | 5.7 | 2% | 5.7 | 2% |
| Total debt and leases / adjusted LTM EBITDA (x) | 0.8 | 0.9 | -11% | 0.8 | 0% |
| Net debt / adjusted LTM EBITDA (x) | 0.5 | 0.6 | -17% | 0.6 | -17% |
| Adjusted LTM EBITDA / LTM gross interest (x) | 23.6 | 24.1 | -2% | 24.3 | -3% |
¹ Does not include leases (IFRS 16). ² Includes US$ 735 million related to non-current assets held for sale in 1Q24. ³ Includes interest rate swaps.
| |||||
Gross debt and leases reached US$ 15.1 billion as of June 30th, 2024, US$ 0.5 billion higher q/q.
In the quarter, Vale has implemented a liability management strategy with a US$ 1.0 billion bond offering and a US$ 1.0 billion tender offer and redemption program. The bond offering was concluded in June and the settlement of the tender offer and redemption in July, resulting in a temporary increase in gross debt, which was partially offset by a US$ 530 million debt repayment. In addition, Vale Canada Limited raised US$ 90 million in borrowings in the quarter.
Expanded net debt declined by US$ 1.7 billion q/q, totaling US$ 14.7 billion, mainly driven by the proceeds from Vale Base Metals partnership. Vale’s expanded net debt target remains at US$ 10-20 billion.
The average debt maturity increased to 9.2 years (compared to 7.5 years at the end of 1Q24), following the 30-year maturity notes offering in June. The average annual cost of debt after currency and interest rate swaps was 5.8%, relatively flat q/q.
| 11 |
Performance of the business segments
Proforma Adjusted EBITDA, by business area
| US$ million | 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q | 1H24 | 1H23 | ∆ y/y |
| Iron Ore Solutions | 3,887 | 4,082 | -5% | 3,459 | 12% | 7,346 | 7,540 | -3% |
| Iron ore fines | 3,071 | 3,175 | -3% | 2,507 | 22% | 5,578 | 5,871 | -5% |
| Pellets | 724 | 757 | -4% | 882 | -18% | 1,606 | 1,449 | 11% |
| Other Ferrous Minerals | 92 | 150 | -39% | 70 | 31% | 162 | 220 | -26% |
| Energy Transition Metals¹ | 407 | 476 | -14% | 257 | 58% | 664 | 1,049 | -37% |
| Nickel | 108 | 235 | -54% | 17 | 535% | 125 | 563 | -78% |
| Copper | 351 | 236 | 49% | 284 | 24% | 635 | 456 | 39% |
| Other | (52) | 5 | n.a. | (44) | 18% | (96) | 30 | n.a. |
| Others2 3 | (302) | (289) | 4% | (237) | 27% | (539) | (495) | 9% |
| Total | 3,992 | 4,269 | -6% | 3,479 | 15% | 7,471 | 8,094 | -8% |
| ¹ Includes adjustment of US$ 83 million in 2Q24, US$ 67 million in 1Q24, US$ 150 million in 1H24, US$ 52 million in 2Q23 and US$ 87 million in 1H23, to reflect the performance of the streaming transactions at market prices, which will be made until the proceeds received on the streaming transactions are fully recognized in the adjusted EBITDA of the business. Based on the current projections for volumes and commodities prices, it will be fully realized by 2027. ² Including a negative y/y effect of provisions related to communities’ programs, reversal of tax credit provisions, and contingency loss. 3 Includes US$ 1 million in unallocated expenses from Vale Base Metals Ltd ("VBM") in 2Q24. Considering the unallocated expenses, VBM’s EBITDA was US$ 408 million in 2Q24. | ||||||||
Segment information 2Q24
| Expenses | |||||||
| US$ million | Net operating revenues | Cost¹ | SG&A and others¹ | R&D¹ | Pre operating & stoppage¹ | Associates and JVs EBITDA | Adjusted EBITDA |
| Iron Ore Solutions | 8,298 | (4,415) | (81) | (94) | (67) | 246 | 3,887 |
| Iron ore fines | 6,729 | (3,556) | (56) | (82) | (53) | 89 | 3,071 |
| Pellets | 1,394 | (705) | - | (1) | (2) | 38 | 724 |
| Other ferrous | 175 | (154) | (25) | (11) | (12) | 119 | 92 |
| Energy Transition Metals | 1,622 | (1,171) | 22 | (70) | (3) | 7 | 407 |
| Nickel² | 879 | (731) | (6) | (31) | (3) | - | 108 |
| Copper3 | 779 | (391) | (8) | (29) | - | - | 351 |
| Other Energy Transition Metals4 | (36) | (49) | 36 | (10) | - | 7 | (52) |
Brumadinho and dam decharacterization | - | - | 1 | - | - | - | 1 |
| Others5 | - | - | (277) | (25) | - | - | (302) |
| Total | 9,920 | (5,586) | (335) | (189) | (70) | 253 | 3,993 |
| ¹ Excluding depreciation, depletion and amortization. ² Including copper and by-products from our nickel operations. ³ Including by-products from our copper operations. 4 Includes an adjustment of US$ 83 million increasing the adjusted EBITDA in 2Q24, to reflect the performance of the streaming transactions at market prices, which will be made until the proceeds received on the streaming transactions are fully recognized in the adjusted EBITDA of the business. Based on the current projections for volumes and commodities prices, it will be fully realized by 2027. 5 Includes US$ 1 million in unallocated expenses from Vale Base Metals Ltd ("VBM") in 2Q24. Considering the unallocated expenses, VBM’s EBITDA was US$ 408 million in 2Q24. | |||||||
| 12 |
Iron Ore Solutions
Selected financial indicators - Iron Ore Solutions
| US$ million | 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q | 1H24 | 1H23 | ∆ y/y | |||
| Net Revenues | 8,298 | 7,776 | 7% | 7,025 | 18% | 15,323 | 14,187 | 8% | |||
| Costs¹ | (4,415) | (3,801) | 16% | (3,552) | 24% | (7,967) | (6,719) | 19% | |||
| SG&A and Other expenses¹ | (81) | 19 | n.a. | (64) | 27% | (145) | (22) | 559% | |||
| Pre-operating and stoppage expenses¹ | (67) | (80) | -16% | (64) | 5% | (131) | (169) | -22% | |||
| R&D expenses | (94) | (61) | 54% | (83) | 13% | (177) | (104) | 70% | |||
| EBITDA Associates & JVs | 246 | 229 | 7% | 197 | 25% | 443 | 367 | 21% | |||
| Adjusted EBITDA | 3,887 | 4,082 | -5% | 3,459 | 12% | 7,346 | 7,540 | -3% | |||
| Depreciation and amortization | (574) | (502) | 14% | (481) | 19% | (1,055) | (905) | 17% | |||
| Adjusted EBIT | 3,313 | 3,580 | -7% | 2,978 | 11% | 6,291 | 6,635 | -5% | |||
| Adjusted EBIT margin (%) | 39.9 | 46.0 | -6 p.p | 42.4 | -2 p.p | 41.1 | 46.8 | -7 p.p | |||
| ¹ Net of depreciation and amortization. | |||||||||||
Iron Ore Solutions EBITDA Variation 2Q24 vs. 2Q23
| Drivers | ||||||
| US$ million | 2Q23 | Volume | Prices | Others1 | Total variation | 2Q24 |
| Iron ore fines | 3,175 | 244 | (27) | (321) | (104) | 3,071 |
| Pellets | 757 | 5 | (16) | (22) | (33) | 724 |
| Others | 150 | (26) | 2 | (34) | (58) | 92 |
| Iron Ore Solutions | 4,082 | 223 | (41) | (377) | (195) | 3,887 |
| ¹ Includes the FX effect, freight, costs and expenses, associates and JV’s EBITDA and others. | ||||||
Iron Ore Solutions EBITDA of US$ 3.887 billion was 5% lower y/y, mostly explained by: (i) higher iron ore fines C1 cash costs (US$ 189 million), mainly as a result of higher third-party purchase costs and concentration of maintenance activities, in order to maximize performance in 2H24, (ii) higher freight rates (US$ 97 million), and (iii) higher expenses (US$ 142 million), as 2Q23 was benefited by positive one-off items. These negative effects were partially offset by a 5.4 Mt increase in iron ore sales volumes (US$ 223 million) and the positive impact of the BRL depreciation (US$ 74 million).
Revenues
Sales volumes by product type
| ‘000 tons | 2Q24 | % total | 2Q23 | % total | 1Q24 | % total | 1H24 | % total | 1H23 | % total |
| Iron ore fines | 68,512 | 86% | 63,329 | 85% | 52,546 | 82% | 121,058 | 84% | 109,190 | 84% |
| IOCJ | 13,180 | 17% | 13,626 | 18% | 9,400 | 15% | 22,581 | 16% | 24,841 | 19% |
| BRBF | 30,528 | 38% | 32,335 | 43% | 25,915 | 41% | 56,443 | 39% | 52,681 | 41% |
| Pellet feed - China (PFC1)1 | 3,337 | 4% | 3,189 | 4% | 2,536 | 4% | 5,873 | 4% | 5,821 | 4% |
| Lump | 1,782 | 2% | 1,865 | 3% | 1,809 | 3% | 3,591 | 3% | 3,259 | 3% |
| High-silica products | 13,767 | 17% | 6,424 | 9% | 8,343 | 13% | 22,110 | 15% | 11,960 | 9% |
| Other fines (60-62% Fe) | 5,917 | 7% | 5,889 | 8% | 4,543 | 7% | 10,460 | 7% | 10,628 | 8% |
| ROM | 2,416 | 3% | 2,236 | 3% | 2,056 | 3% | 4,471 | 3% | 3,900 | 3% |
| Pellets | 8,864 | 11% | 8,809 | 12% | 9,225 | 14% | 18,089 | 13% | 16,942 | 13% |
| Total | 79,792 | 100% | 74,374 | 100% | 63,826 | 100% | 143,618 | 100% | 130,032 | 100% |
| Share of premium products2 (%) | 70% | 79% | 74% | 72% | 77% |
| 13 |
Iron Ore Solutions' prices, premiums and revenues
| 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q | 1H24 | 1H23 | ∆ y/y | |
| Average prices (US$/t) | ||||||||
| Iron ore - 62% Fe price | 111.8 | 111.0 | 1% | 123.6 | -10% | 117.7 | 118.3 | 0% |
| Iron ore - 62% Fe low alumina index | 112.6 | 112.9 | 0% | 124.0 | -9% | 118.4 | 120.8 | -2% |
| Iron ore - 65% Fe index | 126.1 | 124.2 | 2% | 135.7 | -7% | 131.0 | 132.4 | -1% |
| Provisional price at the end of the quarter | 106.5 | 110.1 | -3% | 102.0 | 4% | 106.5 | 110.1 | -3% |
| Iron ore fines Vale CFR reference (dmt) | 110.2 | 110.6 | 0% | 111.9 | -2% | 110.9 | 115.3 | -4% |
| Iron ore fines Vale CFR/FOB realized price | 98.2 | 98.5 | 0% | 100.7 | -2% | 99.3 | 102.7 | -3% |
| Pellets CFR/FOB (wmt) | 157.2 | 160.4 | -2% | 171.9 | -9% | 164.7 | 161.4 | 2% |
| Iron ore fines and pellets quality premium (US$/t) | ||||||||
| Iron ore fines quality premium | (3.3) | 0.6 | n.a. | (1.6) | 101% | (2.5) | (0.2) | 1092% |
| Pellets weighted average contribution | 3.1 | 2.8 | 12% | 3.8 | -18% | 3.4 | 3.2 | 8% |
| Total | (0.1) | 3.4 | n.a. | 2.2 | n.a. | 0.9 | 3.0 | -70% |
| Net operating revenue by product (US$ million) | ||||||||
| Iron ore fines | 6,729 | 6,235 | 8% | 5,292 | 27% | 12,021 | 11,217 | 7% |
| ROM | 27 | 34 | -21% | 27 | 0% | 54 | 60 | -10% |
| Pellets | 1,394 | 1,413 | -1% | 1,585 | -12% | 2,979 | 2,735 | 9% |
| Others | 148 | 94 | 57% | 121 | 22% | 269 | 175 | 54% |
| Total | 8,298 | 7,776 | 7% | 7,025 | 18% | 15,323 | 14,187 | 8% |
| 1 Products concentrated in Chinese facilities. 2 Pellets, Carajás (IOCJ), Brazilian Blend Fines (BRBF) and pellet feed. | ||||||||
The all-in premium totaled US$ -0.1/t, US$ 2.3/t lower q/q, as result of increased high-silica product sales. In the 2H24, Vale expects a larger share of premium products (e.g. IOCJ and BRBF) in the sales mix, due to higher production from the Northern System, supporting all-in premiums. The share of premium products in total sales reached 70% in Q2.
Iron ore fines, excluding Pellets and ROM
Revenues & price realization
Price realization iron ore fines – US$/t, 2Q24
| 14 |
The average realized iron ore fines price was US$ 98.2/t, US$ 2.5/t lower q/q, largely impacted by lower iron ore prices (US$ 11.8 lower q/q) and lower quality premiums (US$ 1.7/t lower q/q), which were offset by the positive effect of pricing mechanisms (US$ 11.7 higher q/q) related to provisional prices.
Iron Ore fines pricing system breakdown (%)
| 2Q24 | 2Q23 | 1Q24 | |
| Lagged | 15 | 16 | 14 |
| Current | 56 | 48 | 61 |
| Provisional | 29 | 36 | 25 |
| Total | 100 | 100 | 100 |
Costs
Iron ore fines cash cost and freight
| 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q | 1H24 | 1H23 | ∆ y/y | ||||
| Costs (US$ million) | |||||||||||
| Vale’s iron ore fines C1 cash cost (A) | 1,935 | 1,676 | 15% | 1,446 | 34% | 3,382 | 2,898 | 17% | |||
| Third-party purchase costs¹ (B) | 409 | 320 | 28% | 347 | 18% | 755 | 542 | 39% | |||
| Vale’s C1 cash cost ex-third-party volumes (C = A – B) | 1,526 | 1,356 | 13% | 1,100 | 39% | 2,626 | 2,355 | 12% | |||
| Sales Volumes (Mt) | |||||||||||
| Volume sold (ex-ROM) (D) | 68.5 | 63.3 | 8% | 52.5 | 30% | 121.1 | 109.2 | 11% | |||
| Volume sold from third-party purchases (E) | 7.1 | 5.6 | 27% | 5.6 | 27% | 12.8 | 9.1 | 40% | |||
| Volume sold from own operations (F = D – E) | 61.4 | 57.8 | 6% | 46.9 | 31% | 108.3 | 100.1 | 8% | |||
| Iron ore fines cash cost (ex-ROM, ex-royalties), FOB (US$ /t) | |||||||||||
| Vale’s C1 cash cost ex-third-party purchase cost (C/F) | 24.9 | 23.5 | 6% | 23.5 | 6% | 24.3 | 23.5 | 3% | |||
| Average third-party purchase C1 cash cost (B/E) | 57.4 | 57.4 | 0% | 61.4 | -6% | 59.2 | 59.5 | -1% | |||
| Vale's iron ore cash cost (A/D) | 28.2 | 26.5 | 7% | 27.5 | 3% | 27.9 | 26.5 | 5% | |||
| Freight | |||||||||||
| Maritime freight costs (G) | 1,114 | 920 | 21% | 860 | 30% | 1,974 | 1,542 | 28% | |||
| % of CFR sales (H) | 85% | 83% | 2 p.p. | 85% | 0 p.p. | 85% | 80% | 5 p.p. | |||
| Volume CFR (Mt) (I = D x H) | 58.5 | 52.3 | 12% | 44.5 | 32% | 103.0 | 87.3 | 18% | |||
| Vale's iron ore unit freight cost (US$/t) (G/I) | 19.0 | 17.6 | 8% | 19.3 | -2% | 19.2 | 17.7 | 9% | |||
| ¹ Includes logistics costs related to third-party purchases. | |||||||||||
Iron ore fines C1 production costs
| US$/t | 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q | 1H24 | 1H23 | ∆ y/y |
| Vale’s C1 production costs, ex-third-party purchase cost | 24.4 | 24.2 | 1% | 24.9 | -1% | 24.6 | 24.5 | 0% |
| Vale’s C1 cash cost, ex-third-party purchase cost | 24.9 | 23.5 | 6% | 23.5 | 6% | 24.3 | 23.5 | 3% |
Iron ore fines COGS - 2Q24 vs. 2Q23
| Drivers | ||||||
| US$ million | 2Q23 | Volume | Exchange rate | Others | Total variation | 2Q24 |
| C1 cash costs | 1,675 | 131 | (42) | 171 | 260 | 1,935 |
| Freight | 920 | 109 | - | 85 | 194 | 1,114 |
| Distribution costs | 157 | 13 | - | 12 | 25 | 182 |
| Royalties & others | 296 | 24 | - | 5 | 29 | 325 |
| Total costs before depreciation and amortization | 3,048 | 277 | (42) | 273 | 508 | 3,556 |
| Depreciation | 349 | 27 | (14) | 40 | 53 | 402 |
| Total | 3,397 | 304 | (56) | 313 | 561 | 3,958 |
| 15 |
C1 cash cost variation (excluding 3rd party purchases) – US$/t, 2Q24 vs. 1Q24
Vale’s C1 cash cost, ex-third-party purchases, was 6% higher q/q, reaching US$ 24.9/t, driven by: (i) inventory turnover, in which approximately 30% of the volumes sold in Q2 are related to higher cost products from the prior quarter, and (ii) higher maintenance costs within our asset integrity program, in order to maximize asset performance during the second semester. These effects were partially offset by (i) higher production volumes and (ii) the positive impact of the BRL depreciation. The C1 production cost in the 2Q24 was largely affected by the operational performance in April, which was impacted by rains in the Northern System. In the subsequent months, our C1 substantially improved, reaching US$ 22/t in June.
In the 2H24, Vale expects a significant reduction in the C1 as a result of higher production, especially in the Northern System, and lower maintenance activities. Vale remains highly confident in achieving its C1 cash cost, ex-third-party purchases, guidance in 2024 (US$ 21.5-23.0/t).
Vale's maritime freight cost slightly decreased q/q, reaching US$ 19.0/t, US$ 6.8/t lower than the Brazil-China C3 route average in Q2, driven by long-term affreightment contracts exposure. CFR sales totaled 58.5 Mt in Q2, representing 85% of iron ore fines sales.
Expenses
Expenses - Iron Ore fines
| US$ millions | 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q | 1H24 | 1H23 | ∆ y/y | |
| SG&A | 15 | 17 | -12% | 35 | -57% | 29 | (73) | n.a. | |
| R&D | 82 | 57 | 44% | 70 | 17% | 152 | 96 | 58% | |
| Pre-operating and stoppage expenses | 53 | 69 | -23% | 51 | 4% | 104 | 148 | -30% | |
| Other expenses | 41 | (43) | n.a. | 14 | 193% | 76 | 76 | 0% | |
| Total expenses | 191 | 100 | 91% | 170 | 12% | 361 | 247 | 46% | |
| 16 |
Iron ore pellets
Pellets – EBITDA
| US$ million | 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q | Comments |
| Net revenues / Realized prices | 1,394 | 1,413 | -1% | 1,585 | -12% | Realized prices averaged US$157.2/t in Q2 mainly driven by lower average benchmark prices. |
| Leased pelletizing plants EBITDA | 38 | 27 | 41% | 36 | 6% | |
| Cash costs (Iron ore, leasing, freight, overhead, energy and other) | (705) | (674) | 5% | (739) | -5% | FOB sales were 66% of total sales |
| Pre-operational & stoppage expenses | (2) | (4) | -50% | (5) | -60% | |
| Expenses (Selling, R&D and other) | (1) | (5) | -80% | 5 | n.a. | |
| EBITDA | 724 | 757 | -4% | 882 | -18% | |
| EBITDA/t | 82 | 86 | -5% | 96 | -15% |
Iron ore fines and pellets cash break-even landed in China4
| US$/t | 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q | 1H24 | 1H23 | ∆ y/y |
| Vale's C1 cash cost ex-third-party purchase cost | 24.9 | 23.5 | 6% | 23.5 | 6% | 24.3 | 23.5 | 3% |
| Third party purchases cost adjustments | 3.4 | 3.0 | 13% | 4.0 | -15% | 3.7 | 3.0 | 23% |
| Vale's iron ore cash cost (ex-ROM, ex-royalties), FOB (US$ /t) | 28.2 | 26.5 | 7% | 27.5 | 3% | 27.9 | 26.5 | 5% |
| Iron ore fines freight cost (ex-bunker oil hedge) | 19.0 | 17.6 | 8% | 19.3 | -2% | 19.2 | 17.7 | 9% |
| Iron ore fines distribution cost | 2.6 | 2.5 | 7% | 2.4 | 9% | 2.6 | 2.8 | -8% |
| Iron ore fines expenses1 & royalties | 6.3 | 4.8 | 33% | 6.7 | -5% | 6.4 | 5.5 | 16% |
| Iron ore fines moisture adjustment | 4.9 | 4.6 | 7% | 4.9 | 1% | 4.9 | 4.7 | 4% |
| Iron ore fines quality adjustment | 3.3 | (0.6) | n.a. | 1.6 | 101% | 2.5 | 0.2 | 1092% |
| Iron ore fines EBITDA break-even (US$/dmt) | 64.3 | 55.4 | 16% | 62.4 | 3% | 63.5 | 57.4 | 11% |
| Iron ore fines pellet adjustment | (3.1) | (2.8) | 12% | (3.8) | -18% | (3.4) | (3.2) | 8% |
| Iron ore fines and pellets EBITDA break-even (US$/dmt) | 61.2 | 52.6 | 16% | 58.6 | 5% | 60.1 | 54.2 | 11% |
| Iron ore fines sustaining investments | 7.9 | 6.9 | 14% | 11.2 | -29% | 9.4 | 8.0 | 18% |
| Iron ore fines and pellets cash break-even landed in China (US$/dmt) | 69.1 | 59.5 | 16% | 69.9 | -1% | 69.5 | 62.2 | 12% |
| ¹ Net of depreciation. Including stoppage expenses. | ||||||||
4 Measured by unit cost + expenses + sustaining investment adjusted for quality. Does not include the impact from the iron ore fines and pellets pricing system mechanism.
| 17 |
Energy Transition Metals
Energy Transition Metals EBITDA overview – 2Q24
| US$ million | Sudbury | Voisey’s Bay & Long Harbour | PTVI (site) | Standalone Refineries | Onça Puma | Sossego | Salobo | Others | Copper & Nickel | Other ETM¹ | Total Energy Transition Metals |
| Net Revenues | 426 | 136 | 249 | 243 | 18 | 136 | 614 | (164) | 1,658 | (36) | 1,622 |
| Costs | (390) | (204) | (168) | (222) | (27) | (90) | (301) | 280 | (1,122) | (49) | (1,171) |
| Selling and other expenses | (1) | (1) | - | - | (5) | 1 | (5) | (3) | (14) | 36 | 22 |
| Pre-operating and stoppage expenses | - | - | - | - | (3) | - | - | - | (3) | - | (3) |
| R&D | (19) | (7) | (2) | - | - | (3) | (2) | (27) | (60) | (10) | (70) |
| Associates and JVs EBITDA | - | - | - | - | - | - | - | - | - | 7 | 7 |
| EBITDA | 16 | (76) | 79 | 21 | (17) | 44 | 306 | 86 | 459 | (52) | 407 |
| ¹ Includes an adjustment of US$ 83 million increasing the adjusted EBITDA in 2Q24, to reflect the performance of the streaming transactions at market prices, which will be made until the proceeds received on the streaming transactions are fully recognized in the adjusted EBITDA of the business. Based on the current projections for volumes and commodities prices, it will be fully realized by 2027. | |||||||||||
Copper
Selected financial indicators
| US$ million | 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q | 1H24 | 1H23 | ∆ y/y | ||||||
| Net Revenues | 779 | 538 | 45% | 639 | 22% | 1,418 | 1,062 | 34% | ||||||
| Costs¹ | (391) | (319) | 23% | (329) | 19% | (720) | (589) | 22% | ||||||
| Selling and other expenses¹ | (8) | 49 | n.a. | (3) | 167% | (11) | 43 | n.a. | ||||||
| Pre-operating and stoppage expenses¹ | - | (1) | -100% | - | - | - | (4) | -100% | ||||||
| R&D expenses | (29) | (31) | -6% | (23) | 26% | (52) | (56) | -7% | ||||||
| Adjusted EBITDA | 351 | 236 | 49% | 284 | 24% | 635 | 456 | 39% | ||||||
| Depreciation and amortization | (41) | (34) | 21% | (40) | 2% | (81) | (71) | 14% | ||||||
| Adjusted EBIT | 310 | 202 | 53% | 244 | 27% | 554 | 385 | 44% | ||||||
| Adjusted EBIT margin (%) | 40% | 38% | 2 p.p | 38% | 2 p.p | 39% | 36% | 3 p.p | ||||||
| ¹ Net of depreciation and amortization | ||||||||||||||
EBITDA variation - US$ million (2Q24 vs. 2Q23)
| Drivers | |||||||
| US$ million | 2Q23 | Volume | Prices | By-products | Others1 | Total variation | 2Q24 |
| Copper | 236 | 7 | 126 | 48 | (66) | 115 | 351 |
¹ Includes variations of (i) positive US$ 28 million in PPA, (iii) negative US$ 103 million in costs and expenses and (iii) positive US$ 9 million in currency variation.
| |||||||
EBITDA increased 49% y/y largely explained by (i) higher average realized copper prices, driven by LME reference price increase (US$ 126 million); and (ii) the increase in copper and by-products sales volumes attributed to better operational performance at Salobo 1&2.
| 18 |
EBITDA by operation
| US$ million | 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q | 2Q24 vs. 2Q23 Comments |
| Salobo | 306 | 218 | 40% | 261 | 17% | Higher copper realized prices and volumes and higher by-products revenues. |
| Sossego | 44 | 17 | 159% | 17 | 159% | Higher copper realized prices. |
| Others copper¹ | 1 | 1 | 0% | 6 | -83% | |
| Total | 351 | 236 | 49% | 284 | 24% | |
| ¹ Includes US$ 25 million in R&D expenses related to the Hu’u project in 2Q24 and the unrealized provisional price adjustments. | ||||||
Revenues & price realization
Sales volumes, revenues & price realization
| US$ million | 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q | 1H24 | 1H23 | ∆ y/y |
| Volume sold (‘000 metric tons) | ||||||||
| Copper | 58 | 53 | 9% | 56 | 4% | 115 | 96 | 20% |
| Gold as by-product (‘000 oz) | 89 | 77 | 16% | 85 | 5% | 173 | 137 | 26% |
| Silver as by-product (‘000 oz) | 242 | 242 | - | 188 | 29% | 430 | 411 | 5% |
| Average prices (US$/t) | ||||||||
| Average LME copper price | 9,753 | 8,464 | 15% | 8,438 | 16% | 9,090 | 8,703 | 4% |
| Average copper realized price | 9,202 | 7,025 | 31% | 7,687 | 20% | 8,456 | 8,123 | 4% |
| Gold (US$/oz)¹ | 2,361 | 2,103 | 12% | 2,083 | 13% | 2,225 | 1,983 | 12% |
| Silver (US$/oz) | 27 | 26 | 4% | 24 | 13% | 26 | 24 | 8% |
| Net revenue (US$ million) | ||||||||
| Copper | 535 | 371 | 44% | 434 | 23% | 969 | 779 | 24% |
| Gold as by-product¹ | 209 | 161 | 30% | 176 | 19% | 386 | 274 | 41% |
| Silver as by-product | 7 | 6 | 17% | 4 | 75% | 11 | 10 | 10% |
| Total | 751 | 538 | 40% | 615 | 22% | 1,366 | 1,062 | 29% |
| PPA adjustments² | 28 | - | n.a. | 24 | 17% | 52 | - | n.a. |
| Net revenue after PPA adjustments | 779 | 538 | 45% | 639 | 22% | 1,418 | 1,062 | 34% |
| ¹ Revenues presented above were adjusted to reflect the market prices of products delivered related to the streaming transactions. ² PPA adjustments to be disclosed separately from 1Q24 onwards. On June 30th, 2024, Vale had provisionally priced copper sales from Sossego and Salobo totaling 45,587 tons valued at weighted average LME forward price of US$ 9,514/t, subject to final pricing over the following months. | ||||||||
Price realization – copper operations
| US$/t | 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q | 1H24 | 1H23 | ∆ y/y |
| Average LME copper price | 9,753 | 8,464 | 15% | 8,438 | 16% | 9,090 | 8,703 | 4% |
| Current period price adjustments¹ | (204) | (257) | -21% | (20) | 905% | (98) | (70) | 41% |
| Copper gross realized price | 9,549 | 8,207 | 16% | 8,418 | 13% | 8,992 | 8,633 | 4% |
| Prior period price adjustments² | 125 | (638) | n.a. | (210) | n.a. | (40) | 22 | n.a. |
| Copper realized price before discounts | 9,674 | 7,569 | 28% | 8,208 | 18% | 8,953 | 8,655 | 3% |
| TC/RCs, penalties, premiums and discounts³ | (472) | (544) | -13% | (522) | -10% | (496) | (532) | -7% |
| Average copper realized price | 9,202 | 7,025 | 31% | 7,687 | 20% | 8,456 | 8,123 | 4% |
Note: Vale's copper products are sold on a provisional pricing basis, with final prices determined in a future period. The average copper realized price excludes the mark-to-market of open invoices based on the copper price forward curve (unrealized provisional price adjustments) and includes the prior and current period price adjustments (realized provisional price adjustments). ¹ Current-period price adjustments: Final invoices that were provisionally priced and settled within the quarter. ² Prior-period price adjustment: Final invoices of sales provisionally priced in prior quarters.³ TC/RCs, penalties, premiums, and discounts for intermediate products.
| ||||||||
The average realized copper price was up 4% y/y and 20% q/q mainly due to higher average LME copper price.
| 19 |
Costs
COGS - 2Q24 vs. 2Q23
| Drivers | ||||||
| US$ million | 2Q23 | Volume | Exchange rate | Others | Total variation | 2Q24 |
| Copper operations | 319 | 32 | (12) | 52 | 72 | 391 |
| Depreciation | 33 | 3 | (1) | 6 | 8 | 41 |
| Total | 352 | 35 | (13) | 58 | 80 | 432 |
Copper operations – unit cash cost of sales, net of by-product credits
| US$/t | 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q | 2Q24 vs. 2Q23 Comments |
| Salobo | 2,319 | 2,246 | 3% | 1,738 | 33% | Higher maintenance costs largely offset by higher by-products credits. |
| Sossego | 5,652 | 4,705 | 20% | 5,844 | -3% | Higher maintenance costs. |
EBITDA break-even (“all-in” costs)
| US$/t | 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q | 1H24 | 1H23 | ∆ y/y |
| COGS | 6,726 | 6,046 | 11% | 5,829 | 15% | 6,285 | 6,141 | 2% |
| By-product revenues | (3,714) | (3,177) | 17% | (3,207) | 16% | (3,465) | (2,946) | 18% |
| COGS after by-product revenues | 3,012 | 2,869 | 5% | 2,622 | 15% | 2,820 | 3,194 | -12% |
| Other expenses¹ | 168 | (301) | n.a. | 149 | 13% | 158 | (6) | n.a. |
| Total costs | 3,180 | 2,568 | 24% | 2,771 | 15% | 2,978 | 3,188 | -7% |
| TC/RCs penalties, premiums and discounts | 472 | 544 | -13% | 522 | -10% | 496 | 532 | -7% |
| EBITDA breakeven²,³ | 3,651 | 3,112 | 17% | 3,293 | 11% | 3,474 | 3,720 | -7% |
| ¹ Includes sales expenses, R&D associated with Salobo and Sossego, pre-operating and stoppage expenses and other expenses. From 1Q24 onwards, excludes Hu'u. ² Considering only the cash effect of streaming transactions, copper operations EBITDA break-even would increase to US$ 4,937/t. ³ The realized price to be compared to the EBITDA break-even should be the copper realized price before discounts (US$ 8,208/t), given that TC/RCs, penalties, and other discounts are already part of the EBITDA break-even build-up. | ||||||||
Unit COGS have increased by 11% y/y mainly reflecting the increase in fixed costs related to the maintenance performed at both Salobo and Sossego operations.
All-in costs have increased by 17%, primarily due to: (i) increase in unit COGS; and (ii) the absence of one-off tax credits that positively impacted 2Q23. These effects were partially offset by higher by-products credits, reflecting the higher proportion of Salobo copper concentrate volumes in the sales mix.
Copper all-in costs averaged US$ 3,474/t in 1H24, representing a 7% decrease y/y, and below the current market guidance for 2024 (US$ 4,000-4,500/t).
| 20 |
Nickel
Selected financial indicators
| US$ million | 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q | 1H24 | 1H23 | ∆ y/y | ||||||
| Net Revenues | 879 | 1,222 | -28% | 836 | 5% | 1,715 | 2,543 | -33% | ||||||
| Costs¹ | (731) | (886) | -17% | (773) | -5% | (1,504) | (1,835) | -18% | ||||||
| Selling and other expenses¹ | (6) | (72) | -92% | (24) | -75% | (30) | (89) | -66% | ||||||
| Pre-operating and stoppage expenses¹ | (3) | - | n.a. | (1) | 200% | (4) | - | n.a. | ||||||
| R&D expenses | (31) | (29) | 7% | (21) | 48% | (52) | (56) | -7% | ||||||
| Adjusted EBITDA | 108 | 235 | -54% | 17 | 535% | 125 | 563 | -78% | ||||||
| Depreciation and amortization | (187) | (229) | -18% | (184) | 2% | (371) | (432) | -14% | ||||||
| Adjusted EBIT | (79) | 6 | n.a. | (167) | -53% | (246) | 563 | n.a. | ||||||
| Adjusted EBIT margin (%) | -9.0% | 0.5% | -10 p.p | -20.0% | 11 p.p | -14.3% | 22.2% | -37 p.p | ||||||
| ¹ Net of depreciation and amortization. | ||||||||||||||
EBITDA variation - US$ million (2Q24 vs. 2Q23)
| Drivers | |||||||
| US$ million | 2Q23 | Volume | Prices | By-products | Others1 | Total variation | 2Q24 |
| Nickel | 235 | (8) | (152) | (48) | 81 | (127) | 108 |
| ¹ Includes variations of (i) US$ 19 million in PPA; (ii) US$ 53 million in inventory write-down in 2Q23 and (iii) US$ 9 million in others. | |||||||
EBITDA decreased 54% y/y largely explained by (i) the 19% decrease in realized nickel prices, driven by lower LME prices; and (ii) lower nickel and by-products volumes mainly reflecting the planned maintenance strategy at the nickel processing plants.
EBITDA by operations
| US$ million | 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q | 2Q24 vs. 2Q23 Comments |
| Sudbury1 | 16 | 168 | -90% | 63 | -75% | Higher unit costs and lower nickel prices and volumes. |
| Voisey’s Bay & Long Harbour | (76) | (130) | -42% | (34) | 124% | Lower third-party feed prices and volumes. 2Q23 was affected by the inventories write-down. |
| Standalone Refineries2 | 21 | 20 | 5% | (6) | n.a | Lower costs offset lower nickel prices. |
| PTVI | 79 | 123 | -36% | 58 | 36% | Lower nickel prices partially offset by lower costs. |
| Onça Puma | (17) | 17 | n.a | (46) | -63% | Stoppage costs and lower sales volumes due to the ramp-up after furnace rebuild works. |
| Others3 | 85 | 37 | 130% | (18) | n.a | |
| Total | 108 | 235 | -54% | 17 | 500% | |
| ¹ Includes the Thompson operations. ² Comprises the sales results for Clydach and Matsusaka refineries. ³ Includes intercompany eliminations, provisional price adjustments and inventories adjustments. Hedge results have been relocated to each nickel business operation. | ||||||
Revenues & price realization
Sales volumes, revenues & price realization
| 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q | 1H24 | 1H23 | ∆ y/y | |
| Volume sold ('000 metric tons) | ||||||||
| Nickel | 34 | 40 | -15% | 33 | 4% | 67 | 80 | -16% |
| Copper | 18 | 21 | -14% | 20 | -10% | 38 | 41 | -7% |
| Gold as by-product ('000 oz) | 9 | 11 | -18% | 12 | -25% | 21 | 22 | -5% |
| Silver as by-product ('000 oz) | 206 | 276 | -25% | 245 | -16% | 451 | 513 | -12% |
| PGMs ('000 oz) | 38 | 89 | -57% | 73 | -48% | 110 | 163 | -33% |
| Cobalt (metric ton) | 320 | 660 | -52% | 465 | -31% | 785 | 1,281 | -39% |
contd
| 21 |
Sales volumes, revenues & price realization (contd.)
| 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q | 1H24 | 1H23 | ∆ y/y | |
| Average realized prices (US$/t) | ||||||||
| Nickel | 18,638 | 23,070 | -19% | 16,848 | 11% | 17,729 | 24,162 | -27% |
| Copper | 9,137 | 6,888 | 33% | 7,482 | 22% | 8,256 | 7,870 | 5% |
| Gold (US$/oz) | 2,435 | 1,931 | 26% | 2,051 | 19% | 2,216 | 1,923 | 15% |
| Silver (US$/oz) | 28.2 | 22.2 | 27% | 22.6 | 25% | 25.2 | 22.3 | 13% |
| Cobalt | 28,258 | 34,694 | -19% | 30,500 | -7% | 29,586 | 33,040 | -10% |
| Net revenue by product (US$ million) | ||||||||
| Nickel | 639 | 930 | -31% | 557 | 15% | 1,195 | 1,943 | -38% |
| Copper | 164 | 145 | 13% | 153 | 7% | 317 | 319 | -1% |
| Gold as by-product¹ | 22 | 21 | 5% | 24 | -8% | 46 | 42 | 10% |
| Silver as by-product | 6 | 6 | 0% | 6 | 0% | 11 | 11 | - |
| PGMs | 38 | 85 | -55% | 68 | -44% | 106 | 160 | -34% |
| Cobalt¹ | 9 | 23 | -61% | 14 | -36% | 23 | 43 | -47% |
| Others | 5 | 12 | -58% | 10 | -50% | 15 | 25 | -40% |
| Total | 882 | 1,222 | -28% | 832 | 6% | 1,714 | 2,543 | -33% |
| PPA adjustments² | (3) | n.a | n.a. | 3 | n.a. | 1 | n.a | n.a. |
| Net revenue after PPA adjustments | 879 | 1,222 | -28% | 835 | 5% | 1,715 | 2,543 | -33% |
| ¹ Revenues presented above were adjusted to reflect the market prices of products delivered related to the streaming transactions. ² PPA adjustments started to disclose separately in 1Q24. | ||||||||
Breakdown of nickel volumes sold
| ‘000 tons | 2Q24 | % total | 2Q23 | % total | 1Q24 | % total | 1H24 | % total | 1H23 | % total |
| Upper Class I nickel | 19.0 | 56% | 22.7 | 56% | 20.8 | 63% | 39.8 | 59% | 46.5 | 58% |
| - of which: EV Battery | 0.8 | 2% | 0.6 | 1% | 0.8 | 2% | 1.6 | 2% | 2.2 | 3% |
| Lower Class I nickel | 3.9 | 11% | 4.5 | 11% | 3.5 | 11% | 7.4 | 11% | 8.5 | 11% |
| Class II nickel | 6.6 | 19% | 9.7 | 24% | 4.4 | 13% | 11.0 | 16% | 17.8 | 22% |
| Intermediates | 4.7 | 14% | 3.5 | 9% | 4.5 | 13% | 9.2 | 14% | 7.5 | 9% |
| Total | 34.3 | 100% | 40.3 | 100% | 33.1 | 100% | 67.4 | 100% | 80.4 | 100% |
Product type by operation
| Sales mix | North Atlantic¹ | Matsusaka | PTVI | Onça Puma |
| Upper Class I | 77.5% | - | - | - |
| Lower Class I | 16.0% | - | - | - |
| Class II | 3.2% | 98.7% | - | 49% |
| Intermediates | 3.3% | 1.3% | 100% | 51% |
Realized price and premium
| 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q | 1H24 | 1H23 | ∆ y/y | |
| Nickel realized price (US$/t) | ||||||||
| LME average nickel price | 18,415 | 22,308 | -17% | 16,589 | 11% | 17,495 | 24,205 | -28% |
| Average nickel realized price | 18,638 | 23,070 | -19% | 16,848 | 11% | 17,758 | 24,160 | -26% |
| Contribution to the nickel realized price by category: | ||||||||
| Nickel average aggregate (premium/discount) | 319 | 170 | 88% | 515 | -38% | 415 | 55 | 655% |
| Other timing and pricing adjustments contributions¹ | (97) | 94 | -203% | (256) | -62% | (152) | (99) | 54% |
| Premium/discount by product (US$/t) | ||||||||
| Upper Class I nickel | 1,260 | 1,820 | -31% | 1,210 | 4% | 1,231 | 1,682 | -27% |
| Lower Class I nickel | 610 | 1,250 | -51% | 650 | -6% | 627 | 1,294 | -52% |
| Class II nickel | 290 | (2,340) | -112% | 750 | -61% | 475 | (2,535) | -119% |
| Intermediates | (3,650) | (4,930) | -26% | (3,060) | -19% | (3,360) | (5,268) | -36% |
| ¹ Comprises (i) the realized quotational period effects (based on sales distribution in the prior three months, as well as the differences between the LME price at the moment of sale and the LME average price), with a negative impact of US$89/t and (ii) fixed-price sales, with a negative impact of US$7/t. | ||||||||
| 22 |
The average realized nickel price was US$ 18,638/t, down 19% y/y, mainly due to the 17% decrease in the average LME nickel price. On a sequential basis, the realized nickel price was up 11% in line with the increase in LME prices. In 2Q24, the average realized nickel price was 1.2% higher than the LME average, mainly due to the 67% share of Class I products in the mix, at an average combined premium of US$ 1,145/t.
Costs
Nickel COGS - 2Q24 vs. 2Q23
| Drivers | ||||||
| US$ million | 2Q23 | Volume | Exchange rate | Others | Total variation | 2Q24 |
| Nickel operations | 886 | (135) | (27) | 7 | (155) | 731 |
| Depreciation | 221 | (33) | (7) | (3) | (43) | 178 |
| Total | 1,107 | (168) | (34) | 4 | (198) | 909 |
Unit cash cost of sales by operation, net of by-product credits
| US$/t | 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q | 2Q24 vs. 2Q23 Comments |
| Sudbury¹,² | 15,219 | 11,737 | 30% | 10,638 | 43% | Higher maintenance costs and lower fixed cost dilution due to the biennial planned maintenance partially offset by better mine performance. |
| Voisey’s Bay & Long Harbour² | 31,114 | 34,713 | -10% | 21,323 | 46% | Lower 3rd party feed volumes and prices. |
| Standalone refineries²,³ | 17,663 | 22,999 | -23% | 18,617 | -5% | Lower feed acquisition costs from PTVI. |
| PTVI4 | 9,590 | 10,297 | -7% | 9,371 | 2% | Lower fuel costs. |
| Onça Puma | 21,705 | 11,623 | 87% | n.a. | n.a. | Lower fixed cost dilution due to the ramp-up after the furnace rebuild. |
| ¹ Sudbury costs include Thompson costs. ² A large portion of Sudbury, Clydach, Matsusaka and Long Harbour finished nickel production is derived from intercompany transfers, as well as from the purchase of ore or nickel intermediates from third parties. These transactions are valued at fair market value. ³ Comprises the unit cash costs for Clydach and Matsusaka refineries. 4 Refers to nickel matte production cost. | ||||||
EBITDA break-even (“all-in” costs)
| US$/t | 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q | 1H24 | 1H23 | ∆ y/y |
| COGS ex. 3rd-party feed | 20,755 | 21,135 | -2% | 22,418 | -7% | 21,573 | 21,766 | -1% |
| COGS¹ | 21,306 | 21,969 | -3% | 22,291 | -4% | 21,790 | 22,807 | -4% |
| By-product revenues¹ | (7,097) | (7,232) | -2% | (8,304) | -15% | (7,690) | (7,460) | 3% |
| COGS after by-product revenues | 14,210 | 14,737 | -4% | 13,987 | 2% | 14,100 | 15,348 | -8% |
| Other expenses² | 1,109 | 2,516 | -56% | 1,306 | -15% | 1,200 | 1,820 | -34% |
| Total Costs | 15,319 | 17,253 | -11% | 15,293 | 0% | 15,300 | 17,168 | -11% |
| Nickel average aggregate (premium) discount | (319) | (170) | 88% | (515) | -38% | (415) | (55) | 655% |
| EBITDA breakeven³ | 15,000 | 17,083 | -12% | 14,778 | 2% | 14,885 | 17,113 | -13% |
| ¹ Excluding marketing activities. ² Includes R&D, sales expenses and pre-operating & stoppage. ³ Considering only the cash effect of streaming transactions, nickel operations EBITDA break-even would increase to US$ 15,108/t in 2Q24. | ||||||||
Unit COGS, excluding 3rd-party feed purchases, were 2% lower y/y, driven by lower unit costs at PTVI. Also, better performance at the mines, which drove unit costs down and lower spend at the mill, have partially offset the increase in maintenance costs especially in Sudbury operations.
All-in costs have decreased by 12% y/y, primarily due to: (i) lower 3rd-party feed purchase costs driven by both lower consumption and lower nickel prices; (ii) lower expenses, as 2Q23 was impacted by the write-down of high-cost inventories related to Voisey’s Bay and Long Harbour operations; and (iii) higher nickel aggregate price premium. These effects have offset the increase in fixed cost due to the biennial planned maintenance in Sudbury.
| 23 |
Webcast Information
Vale will host a webcast on Friday July 26th, 2024, at 11:00 a.m. Brasilia time (10:00 a.m. New York time; 3:00 p.m. London time). Internet access to the webcast and presentation materials will be available on Vale website at www.vale.com/investors. A webcast replay will be accessible at www.vale.com beginning shortly after the completion of the call.
Further information on Vale can be found at: vale.com
Investor Relations
Vale.RI@vale.com
Thiago Lofiego: thiago.lofiego@vale.com
Luciana Oliveti: luciana.oliveti@vale.com
Mariana Rocha: mariana.rocha@vale.com
Patricia Tinoco: patricia.tinoco@vale.com
Pedro Terra: pedro.terra@vale.com
Except where otherwise indicated, the operational and financial information in this release is based on the consolidated figures in accordance with IFRS. Our quarterly financial statements are reviewed by the company’s independent auditors. The main subsidiaries that are consolidated are the following: Companhia Portuária da Baía de Sepetiba, Vale Manganês S.A., Minerações Brasileiras Reunidas S.A., Vale Base Metals Ltd., Tecnored Desenvolvimento Tecnológico S.A., Vale Holdings B.V, Vale Canada Limited, Vale International S.A., Vale Malaysia Minerals Sdn. Bhd., Vale Oman Pelletizing Company LLC e Vale Oman Distribution Center LLC.
This press release may include statements about Vale’s current expectations about future events or results (forward-looking statements). Many of those forward-looking statements can be identified by the use of forward-looking words such as „anticipate,” „believe,” „could,” „expect,” „should,” „plan,” „intend,” „estimate” “will” and „potential,” among others. All forward-looking statements involve various risks and uncertainties. Vale cannot guarantee that these statements will prove correct. These risks and uncertainties include, among others, factors related to: (a) the countries where Vale operates, 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. Vale cautions you that actual results may differ materially from the plans, objectives, expectations, estimates and intentions expressed in this presentation. Vale undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information or future events or for any other reason. To obtain further information on factors that may lead to results different from those forecast by Vale, please consult the reports that Vale files with the U.S. Securities and Exchange Commission (SEC), the Brazilian Comissão de Valores Mobiliários (CVM) and, in particular, the factors discussed under “Forward-Looking Statements” and “Risk Factors” in Vale’s annual report on Form 20-F.
The information contained in this press release includes financial measures that are not prepared in accordance with IFRS. These non-IFRS measures differ from the most directly comparable measures determined under IFRS, but we have not presented a reconciliation to the most directly comparable IFRS measures, because the non-IFRS measures are forward-looking and a reconciliation cannot be prepared without unreasonable effort.
| 24 |
Annexes
Simplified financial statements
Income Statement
| US$ million | 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q | 1H24 | 1H23 | ∆ y/y |
| Net operating revenue | 9,920 | 9,673 | 3% | 8,459 | 17% | 18,379 | 18,107 | 2% |
| Cost of goods sold and services rendered | (6,349) | (5,940) | 7% | (5,367) | 18% | (11,716) | (10,889) | 8% |
| Gross profit | 3,571 | 3,733 | -4% | 3,092 | 15% | 6,663 | 7,218 | -8% |
| Gross margin (%) | 36.0 | 38.6 | -3 p.p. | 36.6 | -1 p.p. | 36.3 | 39.9 | -4 p.p. |
| Selling and administrative expenses | (137) | (139) | -1% | (140) | -2% | (277) | (257) | 8% |
| Research and development expenses | (189) | (165) | 15% | (156) | 21% | (345) | (304) | 13% |
| Pre-operating and operational stoppage | (91) | (103) | -12% | (92) | -1% | (183) | (227) | -19% |
| Other operational expenses, net | (289) | (388) | -26% | (250) | 16% | (539) | (607) | -11% |
| Impairment reversal (impairment and disposals) of non-current assets, net | 1,010 | (66) | n.a. | (6) | n.a. | 1,004 | (70) | n.a. |
| Operating income | 3,875 | 2,872 | 35% | 2,448 | 58% | 6,323 | 5,753 | 10% |
| Financial income | 78 | 106 | -26% | 109 | -28% | 187 | 227 | -18% |
| Financial expenses | (365) | (397) | -8% | (339) | 8% | (704) | (717) | -2% |
| Other financial items, net | (965) | 134 | n.a. | (207) | 366% | (1,172) | (197) | 495% |
| Equity results and other results in associates and joint ventures | 112 | 5 | 2140% | 124 | -10% | 236 | (50) | -572% |
| Income before income taxes | 2,735 | 2,720 | 1% | 2,135 | 28% | 4,870 | 5,016 | -3% |
| Current tax | (638) | (404) | 58% | (734) | -13% | (1,372) | (622) | 121% |
| Deferred tax | 672 | (1,388) | n.a. | 286 | 135% | 958 | (1,588) | n.a. |
| Net income | 2,769 | 928 | 198% | 1,687 | 64% | 4,456 | 2,806 | 59% |
| Net income (loss) attributable to noncontrolling interests | - | 36 | -100% | 8 | -100% | 8 | 77 | -90% |
| Net income attributable to Vale's shareholders | 2,769 | 892 | 210% | 1,679 | 65% | 4,448 | 2,729 | 63% |
| Net income | 2,769 | 928 | 198% | 1,687 | 64% | 4,456 | 2,806 | 59% |
| Net income (Loss) attributable to Vale's to noncontrolling interests | - | 36 | -100% | 8 | -100% | 8 | 77 | -90% |
| Net income attributable to Vale's shareholders | 2,769 | 892 | 210% | 1,679 | 65% | 4,448 | 2,729 | 63% |
| Earnings per share (attributable to the Company's shareholders - US$): | ||||||||
| Basic and diluted earnings per share (attributable to the Company's shareholders - US$) | 0.65 | 0.20 | 225% | 0.39 | 67% | 1.04 | 0.62 | 68% |
Equity income (loss) by business segment
| US$ million | 2Q24 | % | 2Q23 | % | ∆ y/y | 1Q24 | % | ∆ q/q | 1H24 | % | 1H23 | % | ∆ y/y |
| Iron Ore Solutions | 109 | 95 | 89 | 91 | 22% | 58 | 89 | 88% | 167 | 93 | (7) | (170) | n.a. |
| Energy Transition Metals | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Others | 6 | 5 | 9 | 9 | -33% | 7 | 11 | -14% | 13 | 7 | 17 | 70 | -24% |
| Total | 115 | 100 | 98 | 100 | 17% | 65 | 100 | 77% | 180 | 100 | 10 | 100 | 1700% |
| 25 |
Balance sheet
| US$ million | 6/30/2024 | 6/30/2023 | ∆ y/y | 3/31/2024 | ∆ q/q |
| Assets | |||||
| Current assets | 14,829 | 15,547 | -5% | 17,528 | -15% |
| Cash and cash equivalents | 6,479 | 4,983 | 30% | 3,790 | 71% |
| Short term investments | 61 | 46 | 33% | 44 | 39% |
| Accounts receivable | 2,332 | 2,967 | -21% | 2,233 | 4% |
| Other financial assets | 168 | 522 | -68% | 420 | -60% |
| Inventories | 4,793 | 5,193 | -8% | 5,195 | -8% |
| Recoverable taxes | 659 | 1,502 | -56% | 840 | -22% |
| Judicial deposits | - | - | - | 672 | n.a. |
| Other | 337 | 334 | 1% | 364 | -7% |
| Non-current assets held for sale | - | - | - | 3,970 | -100% |
| Non-current assets | 13,294 | 14,402 | -8% | 13,446 | -1% |
| Judicial deposits | 585 | 1,326 | -56% | 669 | -13% |
| Other financial assets | 160 | 698 | -77% | 336 | -52% |
| Recoverable taxes | 1,329 | 1,229 | 8% | 1,384 | -4% |
| Deferred income taxes | 9,931 | 9,904 | 0% | 9,699 | 2% |
| Other | 1,289 | 1,245 | 4% | 1,358 | -5% |
| Fixed assets | 58,492 | 61,568 | -5% | 60,703 | -4% |
| Total assets | 86,615 | 91,517 | -5% | 91,677 | -6% |
| Liabilities | |||||
| Current liabilities | 13,743 | 13,556 | 1% | 15,676 | -12% |
| Suppliers and contractors | 4,769 | 5,240 | -9% | 5,546 | -14% |
| Loans, borrowings and leases | 910 | 713 | 28% | 1,286 | -29% |
| Leases | 177 | 199 | -11% | 192 | -8% |
| Other financial liabilities | 1,467 | 1,599 | -8% | 1,708 | -14% |
| Taxes payable | 1,242 | 882 | 41% | 1,698 | -27% |
| Settlement program ("REFIS") | 383 | 416 | -8% | 492 | -22% |
| Provisions for litigation | 115 | 121 | -5% | 117 | -2% |
| Employee benefits | 724 | 728 | -1% | 602 | 20% |
| Liabilities related to associates and joint ventures | 1,605 | 1,044 | 54% | 923 | 74% |
| Liabilities related to Brumadinho | 974 | 1,201 | -19% | 1,063 | -8% |
| Dam decharacterization and asset retirement obligations | 956 | 899 | 6% | 1,045 | -9% |
| Other | 421 | 514 | -18% | 464 | -9% |
| Liabilities associated with non-current assets held for sale | - | - | - | 540 | -100% |
| Non-current liabilities | 34,485 | 37,670 | -8% | 36,988 | -7% |
| Loans, borrowings and leases | 12,860 | 11,704 | 10% | 11,962 | 8% |
| Leases | 1,183 | 1,321 | -10% | 1,234 | -4% |
| Participative shareholders' debentures | 2,451 | 2,528 | -3% | 2,621 | -6% |
| Other financial liabilities | 2,656 | 2,771 | -4% | 3,043 | -13% |
| Settlement program (REFIS) | 1,284 | 1,886 | -32% | 1,515 | -15% |
| Deferred income taxes | 806 | 1,411 | -43% | 848 | -5% |
| Provisions for litigation | 765 | 1,347 | -43% | 885 | -14% |
| Employee benefits | 1,221 | 1,353 | -10% | 1,288 | -5% |
| Liabilities related to associates and joint ventures | 2,102 | 2,575 | -18% | 3,267 | -36% |
| Liabilities related to Brumadinho | 1,438 | 2,075 | -31% | 1,831 | -21% |
| Dam decharacterization and asset retirement obligations | 5,484 | 6,786 | -19% | 6,261 | -12% |
| Streaming transactions | 1,948 | 1,693 | 15% | 1,956 | 0% |
| Others | 287 | 220 | 30% | 277 | 4% |
| Total liabilities | 48,228 | 51,226 | -6% | 52,664 | -8% |
| Shareholders' equity | 38,387 | 40,291 | -5% | 39,013 | -2% |
| Total liabilities and shareholders' equity | 86,615 | 91,517 | -5% | 91,677 | -6% |
| 26 |
Cash flow
| US$ million | 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q | ||||
| Cash flow from operations | 2,353 | 3,259 | -28% | 4,479 | -47% | ||||
| Interest on loans and borrowings paid | (211) | (200) | 5% | (186) | 13% | ||||
| Cash received on settlement of Derivatives, net | 81 | 134 | -40% | 43 | 88% | ||||
| Payments related to Brumadinho | (265) | (497) | -47% | (135) | 96% | ||||
| Payments related to dam decharacterization | (132) | (95) | 39% | (119) | 11% | ||||
| Interest on participative shareholders debentures paid | (149) | (127) | 17% | - | n.a. | ||||
| Income taxes (including settlement program) paid | (466) | (574) | -19% | (506) | -8% | ||||
| Net cash generated by operating activities | 1,211 | 1,900 | -36% | 3,576 | -66% | ||||
| Cash flow from investing activities | |||||||||
| Short-term investment | 28 | 67 | -58% | (44) | n.a. | ||||
| Capital expenditures | (1,328) | (1,208) | 10% | (1,395) | -5% | ||||
| Payments related to Samarco dam failure | (105) | (31) | 239% | (86) | 22% | ||||
| Dividends received from joint ventures and associates | 39 | 105 | -63% | 3 | 1200% | ||||
| Cash received from disposal of investments, net | 2,610 | - | n.a. | - | - | ||||
| Other investment activities, net | (4) | - | n.a. | 3 | - | ||||
| Net cash used in investing activities | 1,240 | (1,067) | n.a. | (1,519) | n.a. | ||||
| Cash flow from financing activities | |||||||||
| Loans and financing: | |||||||||
| Loans and borrowings from third parties | 1,090 | 1,500 | -27% | 870 | 25% | ||||
| Payments of loans and borrowings from third parties | (530) | (581) | -9% | (62) | 755% | ||||
| Payments of leasing | (44) | (45) | -2% | (41) | 7% | ||||
| Payments to shareholders: | |||||||||
| Dividends and interest on capital paid to Vale's shareholders | - | - | 0% | (2,328) | -100% | ||||
| Dividends and interest on capital paid to noncontrolling interest | - | (5) | -100% | - | 0% | ||||
| Share buyback program | (114) | (1,361) | -92% | (275) | -59% | ||||
| Acquisition of additional stake in subsidiaries | - | (130) | -100% | - | 0% | ||||
| Net cash used in financing activities | 402 | (622) | -165% | (1,836) | n.a. | ||||
| Net increase (decrease) in cash and cash equivalents | 2,853 | 211 | 1252% | 221 | 1191% | ||||
| Cash and cash equivalents in the beginning of the period | 3,790 | 4,705 | -19% | 3,609 | 5% | ||||
| Effect of exchange rate changes on cash and cash equivalents | (164) | 67 | n.a. | (40) | 310% | ||||
| Cash and cash equivalents at the end of period | 6,479 | 4,983 | 30% | 3,790 | 71% | ||||
| Non-cash transactions: | |||||||||
| Additions to property, plant and equipment - capitalized loans and borrowing costs | 8 | 5 | 60% | 5 | 60% | ||||
| Cash flow from operating activities | |||||||||
| Income before income taxes | 2,735 | 2,720 | 1% | 2,135 | 28% | ||||
| Adjusted for: | |||||||||
| Review of estimates related to Brumadinho | (14) | 140 | - | (6) | 133% | ||||
| Review of estimates for dam decharacterization | (70) | - | n.a. | (61) | 15% | ||||
| Equity results and other results in associates and joint ventures | (112) | (5) | 2140% | (124) | -10% | ||||
| Impairment (impairment reversal) and results on disposal of non-current assets, net | (1,010) | 66 | n.a. | 6 | n.a. | ||||
| Depreciation, depletion and amortization | 793 | 779 | 2% | 714 | 11% | ||||
| Financial results, net | 1,252 | 157 | 697% | 437 | 186% | ||||
| Change in assets and liabilities | |||||||||
| Accounts receivable | (167) | (247) | -32% | 1,935 | -109% | ||||
| Inventories | 165 | (157) | n.a. | (626) | n.a. | ||||
| Suppliers and contractors | (528) | 570 | n.a. | 378 | n.a. | ||||
| Other assets and liabilities, net | (691) | (764) | -10% | (309) | 124% | ||||
| Cash flow from operations | 2,353 | 3,259 | -28% | 4,479 | -47% | ||||
| 27 |
Reconciliation of IFRS and “non-GAAP” information
| (a) Adjusted EBIT | |||||||||
| US$ million | 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q | ||||
| Net operating revenues | 9,920 | 9,673 | 3% | 8,459 | 17% | ||||
| COGS | (6,349) | (5,940) | 7% | (5,367) | 18% | ||||
| Sales and administrative expenses | (137) | (139) | -1% | (140) | -2% | ||||
| Research and development expenses | (189) | (165) | 15% | (156) | 21% | ||||
| Pre-operating and stoppage expenses | (91) | (103) | -12% | (92) | -1% | ||||
| Brumadinho and dam decharacterization | 1 | (271) | n.a. | (41) | n.a. | ||||
| Other operational expenses, net1 | (208) | (65) | 220% | (142) | 46% | ||||
| EBITDA from associates and JVs | 253 | 229 | 10% | 203 | 25% | ||||
| Adjusted EBIT | 3,200 | 3,219 | -1% | 2,724 | 17% | ||||
| ¹ Includes adjustment of US$ 83 million in 2Q24, US$ 67 million in 1Q24, US$ 150 million in 1H24, US$ 52 million in 2Q23 and US$ 87 million in 1H23, to reflect the performance of the streaming transactions at market price. | |||||||||
| (b) Adjusted EBITDA | |||||||||
EBITDA defines profit or loss before interest, tax, depreciation, depletion and amortization. The definition of Adjusted EBITDA for the Company is the operating income or loss plus dividends received and interest from associates and joint ventures, and excluding the amounts charged as (i) depreciation, depletion and amortization and (ii) impairment reversal (impairment and disposals) of non-current assets. However, our adjusted EBITDA is not the measure defined as EBITDA under IFRS and may possibly not be comparable with indicators with the same name reported by other companies. Adjusted EBITDA should not be considered as a substitute for operational profit or as a better measure of liquidity than operational cash flow, which are calculated in accordance with IFRS. Vale provides its adjusted EBITDA to give additional information about its capacity to pay debt, carry out investments and cover working capital needs. The following tables shows the reconciliation between adjusted EBITDA and operational cash flow and adjusted EBITDA and net income, in accordance with its statement of changes in financial position. The definition of Adjusted EBIT is Adjusted EBITDA plus depreciation, depletion and amortization.
| |||||||||
| Reconciliation between adjusted EBITDA and operational cash flow | |||||||||
| US$ million | 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q | ||||
| Adjusted EBITDA | 3,993 | 3,998 | 0% | 3,438 | 16% | ||||
| Working capital: | |||||||||
| Accounts receivable | (167) | (247) | -32% | 1,935 | n.a. | ||||
| Inventories | 165 | (157) | n.a. | (626) | n.a. | ||||
| Suppliers and contractors | (528) | 570 | n.a. | 378 | n.a. | ||||
| Review of estimates related to Brumadinho | (14) | 140 | n.a. | (6) | 133% | ||||
| Review of estimates related to dam decharacterization | (70) | - | n.a. | (61) | 15% | ||||
| Others | (1,026) | (1,045) | -2% | (579) | 77% | ||||
| Cash flow | 2,353 | 3,259 | -28% | 4,479 | -47% | ||||
| Income taxes paid (including settlement program) | (466) | (574) | -19% | (506) | -8% | ||||
| Interest on loans and borrowings paid | (211) | (200) | 5% | (186) | 13% | ||||
| Payments related to Brumadinho event | (265) | (497) | -47% | (135) | 96% | ||||
| Payments related to dam decharacterization | (132) | (95) | 39% | (119) | 11% | ||||
| Interest on participative shareholders' debentures paid | (149) | (127) | - | - | n.a. | ||||
| Cash received on settlement of Derivatives, net | 81 | 134 | -40% | 43 | 88% | ||||
| Net cash generated by operating activities | 1,211 | 1,900 | -36% | 3,576 | -66% | ||||
| Reconciliation between adjusted EBITDA and net income (loss) | |||||||||
| US$ million | 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q | ||||
| Adjusted EBITDA | 3,993 | 3,998 | 0% | 3,438 | 16% | ||||
| Depreciation, depletion and amortization | (793) | (779) | 2% | (714) | 11% | ||||
| EBITDA from associates and joint ventures | (253) | (229) | 10% | (203) | 25% | ||||
| Impairment reversal (impairment) and results on disposals of non-current assets, net¹ | 928 | (118) | n.a. | (73) | n.a. | ||||
| Operating income | 3,875 | 2,872 | 35% | 2,448 | 58% | ||||
| Financial results | (1,252) | (157) | 697% | (437) | 186% | ||||
| Equity results and other results in associates and joint ventures | 112 | 5 | 2140% | 124 | -10% | ||||
| Income taxes | 34 | (1,792) | n.a. | (448) | n.a. | ||||
| Net income | 2,769 | 928 | 198% | 1,687 | 64% | ||||
| Net income (loss) attributable to noncontrolling interests | - | 36 | -100% | 8 | -100% | ||||
| Net income attributable to Vale's shareholders | 2,769 | 892 | 210% | 1,679 | 65% | ||||
| ¹ Includes adjustment of US$ 83 million in 2Q24, US$ 67 million in 1Q24, US$ 150 million in 1H24, US$ 52 million in 2Q23 and US$ 87 million in 1H23, to reflect the performance of the streaming transactions at market price. | |||||||||
| 28 |
| (c) Net debt | |||||||||
| US$ million | 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q | ||||
| Gross debt | 13,770 | 12,417 | 11% | 13,248 | 4% | ||||
| Leases | 1,360 | 1,520 | -11% | 1,426 | -5% | ||||
| Cash and cash equivalents¹ | (6,540) | (5,029) | 30% | (4,569) | 43% | ||||
| Net debt | 8,590 | 8,908 | -4% | 10,105 | -15% | ||||
| ¹ Includes US$ 735 million related to non-current assets held for sale in 1Q24 due to the PTVI divestment. | |||||||||
| (d) Gross debt / LTM Adjusted EBITDA | |||||||||
| US$ million | 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q | ||||
| Gross debt and leases / LTM Adjusted EBITDA (x) | 0.8 | 0.9 | -11% | 0.8 | -2% | ||||
| Gross debt and leases / LTM operational cash flow (x) | 0.8 | 0.8 | 0% | 0.9 | -6% | ||||
| (e) LTM Adjusted EBITDA / LTM interest payments | |||||||||
| US$ million | 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q | ||||
| Adjusted LTM EBITDA / LTM gross interest (x) | 23.6 | 24.1 | -2% | 24.3 | -3% | ||||
| LTM adjusted EBITDA / LTM interest payments (x) | 26.2 | 20.1 | 30% | 23.5 | 12% | ||||
| (f) US dollar exchange rates | |||||||||
| R$/US$ | 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q | ||||
| Average | 5.2129 | 4.9485 | 5% | 4.9515 | 5% | ||||
| End of period | 5.5589 | 4.8192 | 15% | 4.9962 | 11% | ||||
| 29 |
Revenues and volumes
Net operating revenue by destination
| US$ million | 2Q24 | % | 2Q23 | % | ∆ y/y | 1Q24 | % | ∆ q/q | 1H24 | % | 1H23 | % | ∆ y/y |
| North America | 435 | 4.4 | 554 | 5.7 | -21% | 427 | 5.0 | 2% | 862 | 4.7 | 1,207 | 6.7 | -29% |
| USA | 254 | 2.6 | 431 | 4.5 | -41% | 243 | 2.9 | 5% | 497 | 2.7 | 942 | 5.2 | -47% |
| Canada | 181 | 1.8 | 123 | 1.3 | 47% | 184 | 2.2 | -2% | 365 | 2.0 | 265 | 1.5 | 38% |
| South America | 974 | 9.8 | 1,098 | 11.4 | -11% | 1,128 | 13.3 | -14% | 2,102 | 11.4 | 2,165 | 12.0 | -3% |
| Brazil | 868 | 8.8 | 994 | 10.3 | -13% | 1,006 | 11.9 | -14% | 1,874 | 10.2 | 1,913 | 10.6 | -2% |
| Others | 106 | 1.1 | 104 | 1.1 | 2% | 122 | 1.4 | -13% | 228 | 1.2 | 252 | 1.4 | -10% |
| Asia | 6,858 | 69.1 | 6,278 | 64.9 | 9% | 5,169 | 61.1 | 33% | 12,027 | 65.4 | 11,004 | 60.8 | 9% |
| China | 4,994 | 50.3 | 4,638 | 47.9 | 8% | 3,674 | 43.4 | 36% | 8,668 | 47.2 | 8,045 | 44.4 | 8% |
| Japan | 927 | 9.3 | 824 | 8.5 | 13% | 682 | 8.1 | 36% | 1,609 | 8.8 | 1,513 | 8.4 | 6% |
| South Korea | 282 | 2.8 | 374 | 3.9 | -25% | 206 | 2.4 | 37% | 488 | 2.7 | 686 | 3.8 | -29% |
| Others | 655 | 6.6 | 442 | 4.6 | 48% | 607 | 7.2 | 8% | 1,262 | 6.9 | 760 | 4.2 | 66% |
| Europe | 1,079 | 10.9 | 1,227 | 12.7 | -12% | 1,009 | 11.9 | 7% | 2,088 | 11.4 | 2,790 | 15.4 | -25% |
| Germany | 286 | 2.9 | 294 | 3.0 | -3% | 326 | 3.9 | -12% | 612 | 3.3 | 722 | 4.0 | -15% |
| Italy | 34 | 0.3 | 182 | 1.9 | -81% | 19 | 0.2 | 79% | 53 | 0.3 | 365 | 2.0 | -85% |
| Others | 759 | 7.7 | 751 | 7.8 | 1% | 664 | 7.8 | 14% | 1,423 | 7.7 | 1,703 | 9.4 | -16% |
| Middle East | 251 | 2.5 | 162 | 1.7 | 55% | 266 | 3.1 | -6% | 517 | 2.8 | 400 | 2.2 | 29% |
| Rest of the World | 323 | 3.3 | 354 | 3.7 | -9% | 460 | 5.4 | -30% | 783 | 4.3 | 541 | 3.0 | 45% |
| Total | 9,920 | 100.0 | 9,673 | 100.0 | 3% | 8,459 | 100.0 | 17% | 18,379 | 100.0 | 18,107 | 100.0 | 2% |
Volume sold by destination – Iron ore and pellets
| ‘000 metric tons | 2Q24 | 2Q23 | ∆ y/y | 1Q24 | ∆ q/q | 1H24 | 1H23 | ∆ y/y |
| Americas | 9,965 | 10,784 | -8% | 9,785 | 2% | 19,750 | 20,935 | -6% |
| Brazil | 8,977 | 9,512 | -6% | 8,762 | 2% | 17,739 | 18,261 | -3% |
| Others | 988 | 1,272 | -22% | 1,023 | -3% | 2,011 | 2,674 | -25% |
| Asia | 62,357 | 56,618 | 10% | 46,872 | 33% | 109,229 | 94,676 | 15% |
| China | 49,422 | 44,908 | 10% | 36,309 | 36% | 85,731 | 73,203 | 17% |
| Japan | 6,543 | 6,269 | 4% | 5,065 | 29% | 11,608 | 11,814 | -2% |
| Others | 6,392 | 5,441 | 17% | 5,498 | 16% | 11,890 | 9,659 | 23% |
| Europe | 4,199 | 4,022 | 4% | 3,317 | 27% | 7,516 | 9,190 | -18% |
| Germany | 1,185 | 426 | 178% | 776 | 53% | 1,961 | 1,390 | 41% |
| France | 590 | 742 | -20% | 589 | 0% | 1,179 | 1,822 | -35% |
| Others | 2,424 | 2,854 | -15% | 1,952 | 24% | 4,376 | 5,978 | -27% |
| Middle East | 1,386 | 953 | 45% | 1,407 | -1% | 2,793 | 2,193 | 27% |
| Rest of the World | 1,885 | 1,997 | -6% | 2,446 | -23% | 4,331 | 3,038 | 43% |
| Total | 79,792 | 74,374 | 7% | 63,827 | 25% | 143,619 | 130,032 | 10% |
Net operating revenue by business area
| US$ million | 2Q24 | % | 2Q23 | % | ∆ y/y | 1Q24 | % | ∆ q/q | 1H24 | % | 1H23 | % | ∆ y/y |
| Iron Ore Solutions | 8,298 | 84% | 7,776 | 80% | 7% | 7,025 | 83% | 18% | 15,323 | 83% | 14,187 | 78% | 8% |
| Iron ore fines | 6,729 | 68% | 6,235 | 64% | 8% | 5,292 | 63% | 27% | 12,021 | 65% | 11,217 | 62% | 7% |
| ROM | 27 | 0% | 34 | 0% | -21% | 27 | 0% | 0% | 54 | 0% | 60 | 0% | -10% |
| Pellets | 1,394 | 14% | 1,413 | 15% | -1% | 1,585 | 19% | -12% | 2,979 | 16% | 2,735 | 15% | 9% |
| Others | 148 | 1% | 94 | 1% | 57% | 121 | 1% | 22% | 269 | 1% | 175 | 1% | 54% |
| Energy Transition Metals | 1,622 | 16% | 1,871 | 19% | -13% | 1,434 | 17% | 13% | 3,056 | 17% | 3,869 | 21% | -21% |
| Nickel | 639 | 6% | 930 | 10% | -31% | 558 | 7% | 15% | 1,197 | 7% | 1,943 | 11% | -38% |
| Copper | 699 | 7% | 516 | 5% | 35% | 587 | 7% | 19% | 1,286 | 7% | 1,099 | 6% | 17% |
| PGMs | 38 | 0% | 85 | 1% | -55% | 68 | 1% | -44% | 106 | 1% | 160 | 1% | -34% |
| Gold as by-product¹ | 155 | 2% | 131 | 1% | 18% | 137 | 2% | 13% | 292 | 2% | 228 | 1% | 28% |
| Silver as by-product | 12 | 0% | 12 | 0% | 0% | 10 | 0% | 20% | 22 | 0% | 21 | 0% | 5% |
| Cobalt¹ | 2 | 0% | 22 | 0% | -91% | 10 | 0% | -80% | 12 | 0% | 43 | 0% | -72% |
| Others² | 77 | 1% | 175 | 2% | -56% | 63 | 1% | 22% | 141 | 1% | 375 | 2% | -62% |
| Others | - | 0% | 26 | 0% | -100% | - | 0% | 0% | - | 0% | 51 | 0% | -100% |
| Total | 9,920 | 100% | 9,673 | 100% | 3% | 8,459 | 100% | 17% | 18,379 | 100% | 18,107 | 100% | 2% |
| ¹ Exclude the adjustment of US$ 83 million in 2Q24, US$ 67 million in 1Q24, US$ 150 million in 1H24, US$ 52 million in 2Q23 and US$ 87 million in 1H23, related to the performance of streaming transactions at market price. ² Includes marketing activities. | |||||||||||||
| 30 |
Projects under evaluation and growth options
| Copper | ||
| Alemão | Capacity: 60 ktpy | Stage: FEL3 |
| Carajás, Brazil | Growth project | Investment decision: 2025 |
| Vale’s ownership: 100% | Underground mine | 115 kozpy Au as byproduct |
| South Hub extension (Bacaba) | Capacity: 60-80 ktpy | Stage: FEL3¹ |
| Carajás, Brazil | Replacement project | Investment decision: 4Q24 |
| Vale’s ownership: 100% | Open pit | Development of mines to feed Sossego mill |
| Victor | Capacity: 20 ktpy | Stage: FEL3 |
| Ontario, Canada | Replacement project | Investment decision: 2025 |
| Vale’s ownership: N/A | Underground mine | 5 ktpy Ni as co-product; JV partnership under discussion |
| Hu’u | Capacity: 300-350 ktpy | Stage: FEL2 |
| Dompu, Indonesia | Growth project | 200 kozpy Au as byproduct |
| Vale’s ownership: 80% | Underground block cave | |
| North Hub | Capacity: 70-100 ktpy | Stage: FEL1 |
| Carajás, Brazil | Growth project | |
| Vale’s ownership: 100% | Mines and processing plant | |
| Nickel | ||
| Sorowako Limonite | Capacity: 60 ktpy | Stage: FEL3 |
| Sorowako, Indonesia | Growth project | Investment decision: 4Q24 |
| Vale’s ownership: N/A² | Mine + HPAL plant | 8 kpty Cu as by-product |
| Creighton Ph. 5 | Capacity: 15-20 ktpy | Stage: FEL3 |
| Ontario, Canada | Replacement project | Investment decision: 2025 |
| Vale’s ownership: 100% | Underground mine | 10-16 ktpy Cu as by-product |
| CCM Pit | Capacity: 12-15 ktpy | Stage: FEL3 |
| Ontario, Canada | Replacement project | Investment decision: 2024-2025 |
| Vale’s ownership: 100% | Open pit mine | 7-9 ktpy Cu as by-product |
| CCM Ph. 3 | Capacity: 5-10 ktpy | Stage: FEL3 |
| Ontario, Canada | Replacement project | Investment decision: 2025 |
| Vale’s ownership: 100% | Underground mine | 7-13 ktpy Cu as by-product |
| CCM Ph. 4 | Capacity: 7-12 ktpy | Stage: FEL2 |
| Ontario, Canada | Replacement project | 7-12 ktpy Cu as by-product |
| Vale’s ownership: 100% | Underground mine | |
| Nickel Sulphate Plant | Capacity: ~25 ktpy | Stage: FEL3 |
| Quebec, Canada | Growth project | Investment decision: 2024-2025 |
| Vale’s ownership: N/A | ||
| Iron ore | ||
| Apolo | Capacity: Under evaluation | Stage: FEL2 |
| Southern System, Brazil | Growth project | |
| Vale’s ownership: 100% | Open pit mine | |
| Green briquette plants | Capacity: Under evaluation | Stage: FEL3 (two plants) FEL 2 (6 plants) |
| Brazil and other regions | Growth project | Investment decision: 2025-2030 |
| Vale’s ownership: N/A | Cold agglomeration plant | 8 plants under engineering stage, including co-located plants in clients’ facilities |
| Serra Leste expansion | Capacity: +4 Mtpy (10 Mtpy total) | Stage: FEL2 |
| Northern System (Brazil) | Growth project | |
| Vale’s ownership: 100% | Open pit mine | |
| S11C | Capacity: Under evaluation | Stage: FEL2 |
| Northern System (Brazil) | Growth project | |
| Vale’s ownership: 100% | Open pit mine | |
| Serra Norte N1/N23 | Capacity: Under evaluation | Stage: FEL2 |
| Northern System (Brazil) | Replacement project | |
| Vale’s ownership: 100% | Open pit mine | |
| Mega Hubs | Capacity: Under evaluation | Stage: Prefeasibility Study |
| Middle East | Growth project | |
| Vale’s ownership: N/A | Industrial complexes for iron ore concentration and agglomeration and production of direct reduction metallics | Vale signed three agreements with Middle East local authorities and clients to jointly study the development of Mega Hubs |
1 Refers to the most advanced projects (Bacaba and Cristalino). 2 Indirect ownership through Vale’s 44.34% equity in PTVI. PTVI will own 100% of the mine and has the option to acquire up to 30% of the plant as part of the JV agreement. 3 Project scope is under review given permitting constraints. | ||
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Vale S.A. (Registrant) | ||
| By: | /s/ Thiago Lofiego | |
| Date: July 25, 2024 | Director of Investor Relations | |