Vale (VALE) 29 Jul 222022 Q2 Earnings call transcript

Company Profile

Participants

Eduardo Bartolomeo	Chief Executive Officer
Deshnee Naidoo	Executive Vice President-Base Metals
Marcello Spinelli	Executive Vice President-Iron Ore
Gustavo Pimenta	Executive Vice President-Finance and Investor Relations
Caio Ribeiro	Bank of America
Carlos de Alba	Morgan Stanley
Leonardo Correa	Banco BTG Pactual
Tiago Lofiego	Bradesco BBI
Daniel Sasson	Itaú BBA
Alexander Hacking	Citi
Rodolfo De Angele	JPMorgan
Liam Fitzpatrick	Deutsche Bank

Call transcript

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Eduardo Bartolomeo

[Call Starts Abruptly] to protect their indigenous territory. It still our relationship with the Supreme head controversies, we have now begun a new stage in this relationship. After 18 months of negotiations, we closed an agreement with the Supreme community ending a 15 years dispute. To own our relationship, we visited the village of the Supreme and it was a moment of mutual respect and trust. I want to thank the Supreme people for welcoming us in their home. emphasize or does lands mining to any carry in important research mineral activities also that not Vale out Brazil. It's on indigenous

first complex. structures, is interfere de-characterization to year. strictly with reaching XXXX, the more ones of July, believe João these and measure remotely informed we Baixo in And case the we to also structures. five that advanced eliminated the of dams is activities pioneering, important of dams key may only operated dam We equipment. we Dike our BX/BX in Vale of program three And all are consent. A to In eliminate XX% territories emergency upstream be some dam concluded cases, of Since pre, currently eliminated respect we were And directly must this two derisk at will prior end the eliminate XXXX, the by and program. milestones. this using Pereira that level the X nine in projects have X, The Brazil.

year. close to removed works you about And Spinelli nickel on critical a and more In towards to operations. to iron to that. challenging important agenda, operationally Deshnee anticipate made safety our revise By ongoing were by and issues targets. we We impacted which climate in conclusion change us talk of details. expect solid the essential reached much faster Base copper milestones will In Metals, the and already we system, our dam while licensing. in one-off the performance. iron ore give our maintenance In our meeting systems south more than the affected led our had this have We guidance XXXX. Northern we had an then, us have In tails, the no plan. value This XX% conditions. for the second quarter, ore, copper restrictions moisture will

our Ponta of port. will part April, we to of Nippon signed program, solutions, usage second we locomotive. da Corporation emissions Since the including Madeira of engaged XX% our our reducing XXX%-electric divestments XX% with It received briquettes. of progress is with by the In This Steel clients line MoU ironmaking pursue Scope In Powershift we As commitment have XXXX. representing X at with operate initially green an with XXXX, portfolio two Scope have net in mentioned. already our those we X emissions. that I optimization, to almost

as little executed future a This cash by of XX% We our give program, third shares. are without the form the supply a per we with We pressuring Finally, line side in you months. third of this to concentrating than shares. to that Last announced will almost slide. capital this means outstanding returning to in billion of buyback carrying in more risk. the in to quarter, buyback million we up I'll policy. you our shareholders, more of and the allocation, program next XXX the in details we dividend for XX% committed remain we distribution $X program announced Yesterday, XX%. a repurchased a the company’s earnings two After of lower basis the view share execution on have and completion growth close

the And Metals, you to for in Deshnee Q&A. I Base I'll Now Vice of back floor remarks. turn over get the President you. her our Thank

Deshnee Naidoo

planned. maintenance maintenance works to these guidance quarter. copper This XXX,XXX have tons. maintenance It reasons restrictions and of last would metals backlog, maintenance of highlighting to in can planned the unplanned. like was commissioning related In XX we plant deferrals the said, mention, quarter, works maintenance That for impacted like had our COVID-XX two rates. as a Most III, mitigate the both additional and end plant Indonesia. also address plans our for at pandemic mines the we on operations I'd days The Sudbury in extended you, result now morning, quarter the of do Totten to during XXX,XXX other by good mine. in that the built is run during key our for maintenance controls. year. quarter conditions our be this of up and but and which years components to our to risk. restrictions. we to activities the now and This operating planned the were revised of four by asset quarter change completed impacted the Salobo anticipation quarter base at however, originally the the major performed been planned overall in And I maintenance by is the since the are work future are in that poorer planned in our expected was required across strike as production by than attributed the this In deferrals covered second were major not up maintenance Salobo, catching and UK key was ramp year Canada, by major to in additional running everyone. scheduled still sales II refineries is I and to extended at half the Salobo we after one, inventories And Sossego. replace following incident to smelters at the for we preventative with shaft plant discovered nickel, performed being copper, maintenance Salobo scheduled Thank COVID-XX have call the for Eduardo, that start that this. At

mine For our maintenance continue nickel nickel and Canada. mill will already. running across quarter up built inventories, Whilst with with programs planned we three, our major refineries largely be concentrate

nickel. shorter guidance. run required sell though, a nickel be than production rates copper and downstream the at cycle affected meet to are should in we temporarily We our produce as concentrates Canadian much

Next slide.

that market, especially price, lagged realization our financial copper. our volumes in in performance despite see quarter-over-quarter, at flat Looking price you sales will particular relatively

can positive one, the price as of quarter. copper in realization side, by in in end you curve we the XX,XXX graft $X,XXX realization due a premium In the products per first marked see per positive As quotational of effect of specifically strong we the XX,XXX In of and At we end our tons result XXXX. program. The to the under effect per achieved nickel, had ton. quarter quarter impacted provisional price price from By at started a had nickel forward Class hedging the just pricing, largely represents had of balance a copper period. product the marked ton two, we at $XX,XXX of copper hedging left of mix was was the tons I pricing, our fixed from falling implementation a This with revenue of negative price a some quarter, for of the program copper our about lag ton. for primarily copper. $X,XXX nickel

quarter second for from of the by $XX,XXX The increased over While strike realized ton. in Reflecting price the circa which fixed was the reflected just ton, hedge average price $XX,XXX quarter price was impacted price the on for per nickel two. position the circa the $XX,XXX to per positions complete the added for new quarter's higher results.

the turn future. let's to Now

for to This an of of in nickel to sulfate, expected Quebec. feasibility growing from and progress tons agenda. a this as the our tons have sulfate XXX,XXX proposed us advance an produce made into we offers contained point continent. diversified seeing XX,XXX With Indonesia. good we continued in strategic chain, sales annual production our vehicle supply America's in are over production entry of the We quarter, battery North demand both project accelerated study across nickel nickel concluded burgeoning we've agenda the electric Also of

XXXX at ton of project the our with Together and up development EV the board the approved start strategy. our meeting facility Bahodopi we overall in ferronickel Xinhai, and in XX,XXX just with have Indonesia. line expect to TISCO in We

previously We market. forward last us now and This over Pomalaa with across performance. partnership project are with ore Huayou to Tesla. like-minded who Indonesia adds the to with through week, take MoUs carbon to key supply PTVI the and to Marcello explore the in EV with a in other have Vale We one these the chain. the low value Ford, to look three-way I signed announced for ESG focused iron hand two nickel EV the MoU with working partners into opportunities

Marcello Spinelli

hear to Good plan. Deshnee. I'll start Give an all. you, Good presentation. my our about you Thank morning. recovery update

main with to new flexibility like about capacity, The to remember actions We lost anticipation main the the itself, I you I'd want but the in challenges flexibility that these the considering to on volume, [indiscernible], today. actions. since and we based of word XX% the talk what are First, resumption emphasize were licenses projects, our remind of that what were, review are we here always our capacity. journey

So vibration tests, issue. resumption backlogs was the the Remember the the dam of plan, the blasting, regarding coming stoppage. the from safety key saga all

we've So full all month month in all back yet, brought overcoming the and sites, capacity been not are we operations on. by but

in system temporarily dams. when the impact the and we downstream The Brucutu. upstream the came dams But with main Itabira the in impact the with first came in Southeastern of lost dams capacity

ask, are you process and is no what challenges, is more new sophisticated. this the may licenses, The yes, is answer the getting a license Regarding challenge?

to team in details of We the engaged in personally the south, the working with in close close to level analysis gaps. agencies the to the best north have and provide I'm higher Brazil. process this

projects Finally, some anticipating the we had regarding impacts as macro we implementation. may we conditions are some adjustment and during to project, COVID the have due

bringing were we and So optimistic happy We three the some planning. our sometimes combination this to factors these are is more of forecast. not activity with

first So risking it and the a Brumadinho, the in dams summary, production. reducing of impact the evolve of lot, the we impact

to have the other deal we license hand, the On with still process.

plan. So relationship reliability with agencies bring our to to their the we are strengthening

In So update system. north, almost project system by accomplished. the is Gelado

QX, overcame new a we three bodies, ore important expect for in projects. startup We for milestone an

SXXD, room your movement in is QX area previous just the attention license rolling us here. the main increase done, this, and to happy are not received It's lies This So there with license. is we want we drag that. expect And made waste XX, this also. a the news. delay licenses. plus restriction the year for in We this for and In the a crusher improvement I great Abon installation

is in on permits So start to are the we we In the implementation are expecting total of time, we expect Itabira SXXD. done by is bring QX. and system, suit plus dam the QX, the allowed end construction in Southeastern XX final to

asset in expect the we year. bring So QX to this

guidance. Now to production for production our moving We XXXX. guide our revised

Now what remember heavy the It's and rain In happened in, during range been losing the this XXX the the of some season. first XXX, here? year, flexibility year. is half between of a we've beginning

restriction a was brought lower had of of the north addressed all consequence It to with mining Secondly, to would we formation but to safety close the This the the change previous front higher moisture in process to We us these range the of restrictions. SXXD, stockpile related the issues already guidance most this risk. – system. a a more with bring new to that due management. effect in

the So risk. we adjusted

We That’s the mantra margin just volumes also production the consider adjusted that production have the in also the the center we due over we adjustment volume we in And conditions. showed. waste to here an guidance. that can market

Now moving the strategy. sales to

still by analyze flexibility. high-silica do daily can to make We You to of new product. less, elements, those the premiums our we partnership product or The or more margin. including chain produce develop wait found That’s that for we chain in wait sell price, with This and a cargo decisions supply Shagang decision and announced more a we port more sold concentrate in can momentum pre-blending We several China. a facilities products can Vale as probably maximize noted sell blending We to in the the margins Recently, We China. in the good to beauty high-silica, involve freight we the or standalone to early a QX. cargo. cost. sales.

client. We are advancing in closer our to and the getting supply chain

pallet higher QX, increase considering we Northern expect volumes already forward Vale’s will higher additional from premium $XX and per in System premiums the ton negotiated. average Looking

here for be we’ll further So questions.

Now to hand Gustavo. I’ll over

Gustavo Pimenta

I’d good start you morning, in of to everyone. main the the performance like walking Thanks, through quarter. drivers our Marcello EBITDA and by

per price EBITDA forma QX As $XXX per to pro realized mainly decrease the in lower iron million $XX caused The ton was by $X.X realized decline than fines $X,XXX ore you can on Southeastern quarter billion, the see corporate prices, prices This on decrease and reference benefiting and our second XXXX. Southern during I’ll and solid discussion decline was later. and which in higher performance our operational iron following favorable offset the the detail partially a by from ore conditions quarter, XX% Systems. pallet more weather fines was sales

Now cost onto our to performance.

increase, maintenances impacted goal performance globally, mostly at our million to base explained is Excluding business. metals it corrective local currencies. cost the we that external which our by keep fixed track are high year, our cost pressure deliver Despite by EBITDA flat important inflationary $XXX versus factors, to was our on CapEx to levels in sustaining is for plus highlight cost efficiency XXXX the

Now, price quarter of this of quarter. per adjustment $X.X were The volumes of XX by ton end the the realization. average in impacted decline price pricing of resulted was quarter a the that $XXX ton focusing in was of ton as XX% $XXX curves in tons difference This ton on benchmark year. of Also a per mainly following performance QX provisional end the adjustments $XXX ton the versus second the XXXX QX. a provisioned had for the pricing quarter $XXX in positive QX. realization impact by and price versus million forward negative the quarter-over-quarter two QX impact on per $XX.X for These per realized at per the $XX ton by ton the between per per sales

mainly Vale’s effect. Now produced higher in by increased cost higher quarter, costs all-in of purchases CX ex-third-party inventories driven ore at the US$X.X per and the QX, for appreciation, iron moving sale carryover to average ton a fuel by costs. cost BRL cash first

on here increase freight, prices. strategy cost competitive ton highlight where XX% advantage from vessels for per our bunker important of long-term per reflecting mainly ton, to we contracted $XX.X Another $XX.X freight have is Vale’s to annual XX% to component went needs. which Important the in

the strategy XXXX QX, the As prices. as contribution ton. Vale’s In install in ton premium our has from spread costs. is during another in XX% represented of spot per bunker negotiated result in all-in a cost widened in fleet high quarter. to close QX. $XX dedicated than This improvement expect $XXX has additional Pallet per million we also to bunker a to low average $X.X strategic positive was Qingdao average the decision freight benefited were back our a This savings in with buy lower performance quarter scrubbers our QX, down on as premiums sulphur to

management we extending turning allocation. the our Now amortization advanced debt portfolio next to five for note in strategic our concluded years. maturely This tender greater Vale’s to average relevant no capital the With the $X.X offer successfully us billion of objectives. We provides June. liability the financial that in program, flexibility tender pursuing with continue

in Our strong EBITDA the was to conversion quarter. cash also

To million As you in as program next and XXX we cash executed it buyback use we slide, accelerate program. of liquidity our our the converted XX% to already repurchase latest XX% of our of free can incremental date, share shares. have share into see EBITDA

So to call today’s key before like the opening Q&A, call. I takeaways from up for would reinforce the

advance dams. our upstream to continue of We the and agenda elimination our in social in

stake will announcement of substantially of the disciplined completed on with Our continue benefit On our to remain management long-term strongly strategy. that the we reshaping And transition we production, at the to core yesterday’s focus sale allowing trend. energy very our on is industry. on assets value mostly CSP, our volume of program fundamentals believe the from of our

highly made the program. our in Finally, a be to for location should you. $X highly up billion call questions. remain September like process With open share the disciplined that as by dividend payment accretive on committed a continuous of Thank the I’d advanced announcement buyback to progress we capital and

Operator

with question your comes America. [Operator Caio, Instructions] of Caio you. first is Ribeiro audio Bank from Thank available. Mr. Our

Caio Ribeiro

the Thank everyone. opportunity. you morning, for Good Yes.

expectations on question other outright. some on cash seen or payments toning dividends miners down dividend my So first trimming returns. We’ve is

first press that the given current with values. color announce question provisions that And net new programs Can this to the your on building on to also concluded? discussed expanded also Supreme macro will we’re worsening top that you to us with is seeing some buyback in closer of extraordinary my some about levels recessionary what to here’s outlook the and associated potentially view? is, give So debt returns and assume focus that the we lead Thank Renova, once debt your continue Court cash one wants range. articles very being the and recent Can secondly, President And then much. on still given you provisions this additional dividends? renegotiate table? Is whether could what’s your on Brazilian you of

Gustavo Pimenta

Thanks, This Gustavo. is Caio.

of year, last we us we’ve to XX% already latest returning what buybacks, generation and look, you So of of to on capital done We’ve the most so share do. at look the cash talk here buyback So expect that’s this and shareholders, dividends walking to should right? year, the continue if been program.

that XX perform We to months have one. on

have time. we So

So the is how to performs depend on we’ll continue second returning the see in where think we’ll our year. priorities right? and of shareholders so. I cash lot certainly one would the do a cash is, the generation our to key market of half But

on we Regarding books. provision, have have Renova provisions we the information based the look of we our in amount and right today believe

updating You that have. so the recently. about done good been check this can we We’ve this are what we’ve in feeling QX, we

one are negotiation. through you good the where we of speak. about are programs feeling As of the given are But we latest we of the the revision we going as know, each status

Eduardo Bartolomeo

if add asked Caio extraordinary specifically. think I Gustavo, about can I on that just because the dividend,

we walking said, talk. you the As are

the we’re in the most think discipline I industry.

market conditions. We to assess have

and we to a semester the third that iron volatility in have strong bear mind ore see for huge, is in is very but quarter. You fourth semester second

bucket bucket second can growth, pay any dividend, So will first assess And on – third safe, the conditions. market extraordinary a bucket remember there it But if an going is depend there’s we to fourth yes. policy, if the bucket buybacks. we’re additional, idea, bucket

keep But be our business keep surprises. fundamental. safe. will There that’s we’ll So surprises. never no We’ll

is keep going preserved. We’re to The our That’s growth. sacred. policy

policy quarter. And the we did market on comes next semester, third, will bucket. has prepared Our is if Buybacks answered be eventually there we hope better to Caio? as be is the than I we – the dividend. second this extraordinary there question, expect

Operator

de The Stanley. is next question comes audio with Alba available. your from Mr. Carlos, Morgan Carlos

Carlos de Alba

Thank you much. Hello. very Yes.

regarding that question ore. outlook have I iron is for the So cost the

anything of and you Given How industry elevated, that certainly we’re prices, the the million do to that ore the the this tons XXX and as price market? iron see seeing evolution And can or tons any still million really then half still had cost across see would above Is in it early do pressures and present improve that medium XXX high. you. back range perhaps Where stepping something just second just to something flexibility the – volumes. cost around XXXX? you the product view commodity past, iron evolution? maybe the to contemplate your you of is Thank long-term the keep the you XXX that but terms thinking strategy likely you do not of mix, likely? to consider an you for target your of then more the of really million tons in we this How and year will feel more about that and about in ore that

Gustavo Pimenta

here. Gustavo Carlos. Thanks,

we the we carryover Volumes are in usually the do will us because then our from the half. usually produce take not – one the QX effect is compliment second have most the the I’ll quarter yet levels second. for So at QX. challenging Look first Spinelli and

end the as to came the we guys are the pointing So year. above that in this quarter, you saw we of levels

of CX we end $XX $XX.X means about before, optimistic a We which what continue to year. had feel and the between the by presented

accruing, half savings There’s accrue a So even said will of in lot second announced that billion we $X that’s benefits we’ve they already regarding program year. what the last the QX. and more in

they in we So all what year. And we we expected are as said, we be with optimistic very had much there. lean, last to line

the given to we of terms half the that strategy expect normalize Spinelli second volume had more quarter of as from the towards should year more So saw, very volumes line this – premiums, But coming we in with laid what in with north, you out. year. the likely link much tighter last all was in

Marcello Spinelli

you thank Carlos, for question. the

over Let’s firstly, is a of consequence emphasize production one margin thing. one. The

word say go have you We if we’re I XXX when want level of another a this to emphasize after you going So flexibility. level, want that and that production I to will of market. of tons – mentioned million we

production. XXX basis. million So to reliable tons million to two XXX only tons in We XXX give million main of things to XXX million is for to here have tons flexibility deliver tons the XXX a to capacity million say level ton

margin not. the And the first here, tons. related market XXX thing to this base that’s volume points if reach regarding the level the So million related the is tons million needs to XXX a to two or of

have short-term we despite, variation So XX the million million even on. or or strategy deviation tons and is tons X a the mid-term in

on pace, it So, we need the the depends is, long-term and strategy market. on the

million So take of to no Imagine may today, be we have, XX you necessity to necessity connected tons a again time, market bring for you there’s that. the it but the this if longer if will market.

million level flexibility So to after. XXX of a again go is tons

our We commercial strength we clients. we with even no and jurisdiction a problems institutional have relationship logistics, clients, a problems to the opposite or our great committed very with have work, have

market we in we as the and are, capacitor more the to future, the don’t So, leader of increase the to needs. best behave are market the your than we’re bring choice nothing going but as

Operator

available. The next Leonardo, question is comes from audio Mr. Leonardo Pactual. Banco your Correa BTG with

Leonardo Correa

you. everyone. Yes. Thank morning, Good

business So, project the say bringing know, the metals well. for super let’s and been Eduardo base Eduardo a has angle, very pet important back to a, discussion, you a you

base that of energy Canada the vocal how things quarters. world for in paused, to several on right all been of I different wanted just now is the And years. The You over Vale We’ve worked issues. are right? I But clearly think And transition mean, helping you on, progressing? facing mean, been an be was in Clearly quarters. it thematic there, in quarter, hear I your thinking and numbers I was a non-recurring the been, course, the past terms reversed. has very issues past has the in which sense and has challenges the things there impacting that than market are metals to right the sensation everyone mean, turnaround issues a company for probably But going more facing turnaround. weak of been the very several more all been there what are maintenance, recurring haven’t like is right? been furnace have

one So out, to you no better help than and understand. to us try

a all, what there’s the mean, First here on been these on these Unfortunately help. to effects in point new here obstacles pricing the over and what anything are? think side, premiums has reality, have and this advantage, iron been If Spinelli of the past relies right? quality ore been that’s different Vale can I quarter on you Vale, it’s iron stay, have second investment my happening? producer or saw a And are so segmentation and that losing negative maybe delivered ore fact is And and premiums quality you ore Vale all overcome impacting how we relative case let’s the can the is iron on say, challenges? around declining, costs.

you pressured relevant If setback, the how Or given happening? just you there’s anything I so this much. to if in quality. temporary changes are guys Thank very is? you wanted if seeing is China market structural steel margin the how And in right, see just perceiving any is a think

Eduardo Bartolomeo

fundamentals. It’s the agree. for XXX% with Leonardo, start I question. Okay. Well, project, let’s that my petty the pet, thanks

best right think They don’t right? have on. you’re change, assets. the We I

Puma We in in years world, the for in life best Onça assets have the XX in Onça Canada, of Puma. Indonesia, nickel in

Carajás growth copper in best the in projects have We basin.

time Deshnee this them. on mentioned III, actually is just next are quarter. Salobo on We coming as budget on delivering

are pretty we are confident, we delivering voices. So,

We are Copper Cliff. delivering

nickel the growth that can how are in the there? on next, stream. coming So nothing I projects and So are say copper change. there’s steps And

We with exactly talking, that’s the the name game, we had Like people to our we be of what because going concerned have what resources we’re look never In right? going and the bit about be problems on very We should it’s best harder. business. meant. the Short the at in know end term, bumps reserves, what’s and Sossego.

had discovered stayed we because years the we when a we to a change execute to that we two to stop the start plant. one-time trunnion. we four – stoppage, month had And to maintenance, Sossego start

never You the in stoppage. play four month

was four month. being a four, stoppage ended So a that five day it up

turnaround So the as issues, not on Sossego. we operational the again, had concerned well have on mentioned specifically operate but Deshnee, Salobo mine. turnaround, I’m on very by we these –

mine up is the So and running.

the Furnace Clydach. extremely Canada. up are running plants, time we at well our or So, when – the copper. in strong is speak. do that, we on the complex, gets a only our that underground the going have that’s look and in X second in semester, already well is you and ever plant the extremely have stable, to surface for that months in issue through because able be PTVI restoration they four And to even nickel We did second idle it’s why capacity. first as We extremely operate if quarter the operate guidance we We pretty mines on we

then not one value able we we concerned have or if and that repeating even we’re said, the turnaround, to confident. operate to to not bring I’m another, because extract specifically, been as we’ve going to really I’m turnaround a the if us, very So, we complete partner about to are

We have in XXX the years. operate XX years. We Brazil operate a knowledge; in for for Canada we

why fact that around all I with has, on not talking since that’s you a share and our thinking its the stress. obvious discussing that projects? I I’m the that and there base is our to is might we Why keep like, are metal – has and We we going no that turn I are last a around? is It or a keep been not going mentioned, What to we with call, the on – might stabilize is first – you the turn decision in reflecting we this, option, last depositary shareholders, the options executing idea doing, copper not but turn has, our the reason, we on believe, always, that’s initially this we business? has with organize be value we’ve the just that end value, speaking. true deliver appreciate I that a are to in in taken, in assets for better That after And mentioned that we We presentation think what think after issue Why will been market have idea. And of our own. that first our and important game? this and an growth lot around have people answer we cap. market why business – did. we So, price of structure questions life are

why you concerns even healthy. are GDP the Nickel that business the the Copper value downturn, slowing fundamentals didn’t business related at investor a economy. assets. didn’t prices don’t about because the is sees in bring this reflecting of Second, slowdown is in Copper the private change, or change all. world down

have big business understand have we people a a or asset real but reserve. real now that that a that job, the we So, real, nice

mentioned the might then fourth, structure; And can business. a and value. Deshnee We why need great from first, doing job to I’m float hangover that team good, but bring COVID. changed. pretty I with captured a But And not? I third, It’s second, market stabilize Vale we grow; the execute; nothing private. it opportunity, are then confident as has her the its capture when So,

to third years with pit years for maintenance, Furnace maintenance in in the burden be years, the the X say for two is waiting waiting two two saw but smelter, not in Indonesia. the done had You

The extract confident to overrun. are on we online, the and turnaround. that VBME going budget projects besides to I’m that growth coming had able on So, be are pretty we

news mentioned coming with We are with Indonesia’s great a as place. Bahodopi today,

We are years. there for XX

we the Formalize there, are – very a to soon mentioned you bring going with very Puma as [indiscernible] the good relationship I as board. beginning, now. We, have to we to Onça at

to able that operate mine are We stably.

to it’s business. petty to this in right, So, I’m project. I now really, really, And we’re the for going you’re value Thanks pass cover my the question. Spinelli. huge When

Marcello Spinelli

needs market our the angles two brought strategy. and for So, you quality Well, here, right?

emphasize market. to just about So the

$XX. reduction We $XXX have a pellet premiums $XXX, over for almost direct

at alumina, competitors low For pellets in a the premium. with today. of $XXX lack high market premium $XX, over alumina almost blast furnace $XX, have Low we $XXX $XX, with

uncertainties due demand, in You’re the the ores, we situation, a level, the downstream When of we in competitor cost in you are we debt it’s confident can have said lack the the recover also the also year all right. saw as we and low, this of government margins coke of the it’s But force with past that high we that of by and with end lower all China that temporary about IOCJ downstream have. of view not is to premium the the not grade air the a level. stabilized demand, the that the

high trend, can that’s that’s mine in company again, are is have but to ores. no regarding a investing in the grade So we And definitely return, and that we short term. in our some bring volatility strategy, products,

the the to we’re not We volumes could doing more also bring the ores. market, could We increase our and the portfolio stockpiles low strategy. of and this grade but to that. China, market with sticked whole press company in are We

we over it So, and are ore to ores. the Vale higher grade based volume, – high in sticked is

Operator

Lofiego, comes audio Bradesco question Our Tiago available. from next Tiago, your is BBI. Mr. with

Tiago Lofiego

seeing environment us terms the maybe the demand? high-silica of target second you government’s questions now in product more Thank ground for on about are in what your to And term, expecting you improvement in prediction Spinelli. the question think iron this of maybe bit Two take to second be we this color product the short you you. seeing portfolio; terms here of half little Chinese and half more the premiums, less the are quarters. product a are also the you’re give gentlemen. what’s sold? on the in portfolio flat? the commented Or you, of Spinelli, year, Can term, how again, second for keep So, then considering of ore Thank how you especially the in demand short should you the coming this maybe again, maybe the premiums year? in about expecting

Marcello Spinelli

question. Tiago, the thanks for

So, with start iron ore demand, let’s China.

talk; we the think, I started rely question. on we last to

regarding what to in few constructions. COVID half, the compare the we good second have in we small we what with business, problem it’s business our in last with first had huge in What properties, the happened more the half So actually year. see regarding strategy, see, we the a the the

the and So is you be have will tier for Even goal year. We there even total curve flat in last below almost will terms last the is don’t in production this year. can same a same with that quarter we goal, the we any the any consider don’t if CSP. Event as you economy event have of if have in year production year, forecast that we can set – year. year, of pattern next of last energy we last have a different first we had compare Olympics

been happen, So, a committed in they infrastructure can are to that We’ve have investment, GDP delay support. also the in the can here infrastructure support, second half the that. manufacturing China XX% can we about

because we week this they in security what We problem a in economy. property expect there bring area. as China, problem this see, about double-digit this And they are to can a talking

of there’s our level that forecast. another So that’s least at commitment,

And hard in a There change strategy. so but long-term in decrease. Yes, They of a if to soft there’s see don’t will strategy a landed. a year you last meet we terms demand. the compare land support is probably

expect end next especially downstream by first or So the be to in the here we year. the demand year, this and of quarter

the as adjust the also value can Tiago, of So we – we mentioned. and volume

in quarter. they're availability the least talk we The China the concerns yet, recession, sales restriction are energy of when about short see view. but thermal today, the a they We cost clients and term coal. the quarter, Next to are but the in don't at recession their already we in more main booked our see in the coke, regarding any and fourth related third

So key Europe, world of war. energy the the issue in that of of by year the part is with in a the problem end the

in on better growth you a late if be of Coke but the the by terms the high, combine in availability So better of save problem. China price will will product-by-product. or necessity premium, the they the – that the be the we price a Today will don't the margins be world, other and the that'll But again, hand, the pellets, for end is of products, see what still and level a we good have supporting part – year the that of that market come the consumption in in growth, expect better a so to reduction. China, direct

in blast same we that today end by in furnace the the see we much. pellet a level downstream probably see the there's not So of pellet, but almost risk, that

So to market be more gap to then of this if the swing direct we for wider been there'll our third and a have swing furnace between part developing production though. can to blast swing reduction, for feed pellets pellets we've the way or demand

this And upstream mentioned, as and mentioned, the the So we end key is quarter. point we support for I today the play BRBF, a year see the by game risk the I by competition quarter. next as next and of

Operator

is The from available. audio with Itaú Sasson Daniel, your comes next Daniel question BBA. Mr.

Daniel Sasson

And portion bit, growth do what these of maybe bit right. the IPO really you Is be only just on therefore to divestment you little potential that mentioned you that you and elaborate question co-operations, commented Chinese sense? business, of of already forth. your metal tapped is need, on activity crisis morning. CSP, divestments, position, question, My a on the potential of merit matter the the maybe California the what a in unlocking your on you've you situation could is you I sheet a situation this answer, can same more and need had there you're tremendous levels are for car division it of job the something so solid of focusing diversifying list if matters seeing selling opportunities would you value on in and asset your first in on that you. or spin, is really that deceleration in fresh And a Europe front, on VNC, that raise balance comment Steel your so your with MRN – But on Good aside you before important the is guys. on, be on or after energy new Thank could capital a because see Hi to previous on but base if previous else? the businesses mean, more lines don't actually the a great? do would you commented elaborate from that cash disclosed, that steelmakers away done the you don't given IPO a make

Eduardo Bartolomeo

say to unlock because value, that I'd bit want but we today, And a it's he's value there cannot pass have that to do able unlock as to like on, iron to We little this it different will ore more we not be not we we additioning Thank you're your exactly you, value. speak having value, that's, you're obviously, do Gustav, discussion, that going it's to perceived perceived are unlocking right, to things but structure, together just, Gustav want when the spot Daniel. no question inside Vale, these is – metals because I'm is on company, right? I about so

Gustavo Pimenta

Daniel. Hey Sure.

achieve if for to more governance think haven't the IPO, said trying we decided dedicated which on we potential non-IPO, here but merits what base fundamentally So, that an we a lot a transaction, it's for. I as are Eduardo see metals of is

create want growth. to make from for business iron We sure very ore. This different we also occurrence is

to of is momentum strategy. limited once the a Certainly not it. but appreciate transition, ore expect cash are happy us We of iron should that we'll of that. market of we about and that thinking pursue. amount I as is today business. guys calls you our have story. lot Today, occurrence resuming base to we into we strategy continue to with different to an you that, we have for in good we'll metals out, with growth world, the growth that's we but we strategy. accelerated could EV all And a make tremendous CapEx. to we support for a capacity see, for different, format believe and final of sense about, that growth feel electrification it bring are that's But think transaction, it's that look And pursue we would so how But and appreciative what pointed There's by are The that there. continue

And one said last the we've the publicly. divestment MRN it's quite On frankly the is one.

we So think But look say most the reshaping portfolio the of on optimize this done do can to the to certainly continue point. could to wanted we've we at I margin. we ways for that

Eduardo Bartolomeo

metal call And compliment going call, just a probably the business. base to go points. and growth to but like let a It's your youth never

matter want timely us it's we we currency, as is don't of with by, of capacity but want in be really that huge governance, have nobody amount going our to of, – electric and help public, transition we opportunities lose because a there's and can growth world, of the even bring partners, we It's like going healthy the matter manner. better transition course, private, that would the a market If mentioned to if do goal, And Okay. it's raise the do. grow, been yield our this core And front is has commodities growth, end world. resuming a to needs. believe go a to be energy as a Vale’s even believe it's we better we partners its we we

just valid those but So core. core, yield two growth remember things core, they're all

Gustavo Pimenta

world also marketing China view So Daniel, – Chinese a about let's the talk demand. big view wider European, market, more the about in the

expect in half. for China, So this what next we

the famous in the of year the the for XXXX any the have the the they we by a the end restart elections of of the from from without September is that there infrastructure construction, demand. effect the demand don't coming Lagging have in seasonality, we elections, stimulus end golden forget November. downstream QX So the year many Usually coming government. by peak

boost is to COVID So more again, risk they we production. see after But even they have elections, there. China, the trend, have In capacity a their we the see power. power,

we our that in working trend the are that's forecast. So

connection last so but we that let's QX India, about So demand about Asia going a Europe, in sold Southeast supply the there's for they prices, some but energy, out, are bring side well, really they the blooming very different And yes, level other here. need from concerns way they're the have well, also back. healthy QX good half, a the that the of word emphasize equation to

CIS also So iron and – with that out ore you market if more producing India is XX in ore of the export iron only consider than the more of than tonnes million million any seaboard of XX tonnes without is market.

and balanced more So the in we last the in for more QX, a we will years. the had have produce we QX market but not than

that we in we can and effect same QX the the downstream regarding demand QX have last have that expect So a more support in of better year. pattern bold a XXXX shape we China inventories that in in will China. of We see than

Operator

Citi. question comes next Our Mr. Alexander with is from Alex, Hacking your audio available.

Alexander Hacking

Yeah. Thanks. Thank you for the call.

XX,XXX And in create just you how is still or it I buying case, the PTVI smelter, China's the that with fully all share power, material, just cold, First the base remind prices me the question on Can much. then the iron Indonesia? on Can to second that on all ore, nickel the power carbon in is the volatility be some centralized footprint, you correct remember the works? incremental to question And production gas, any Thank using very of that if even market of it? the [indiscernible] then comments off-take ferro metal, tons existing entity. plan on gas on recently.

Marcello Spinelli

for of to part Well, your thank you long is it's question. Well Alex. valley China. Spinelli I regarding here think term announcement, important thank a this you

in maintain strategy more the great announce in relationship with announced and we ports China this XX the in pre-blended that are we than blending we strength Chinese So are and relationship, that we clients. naturally just facilities. a We

We Chinese. China, relationship are concentrating with the we're expanding so our in ores

believe the demand a market timely So in we reflects the truly the that, always supply, manner. balance

strategy, perhaps the And to because to a in we the the are world as opportunity in are – logistics very see part and to have bringing to the their secure transparency in do we we safe Vale, an we potentiality asset they we iron environment best the capacity market. strategy And deploying more So regarding with of it the place. our ore, we the point bring part invest for in market. possibility put products the resource. as And the bring to this and in market the in best our

So them. are open to we

Deshnee Naidoo

to this will to the in around Alex, XX,XXX for project, I we say, project tonnes that will the as is the of of rebuild XX,XXX earlier on we question four back PTVI Bahodopi thank have just the project, and production the XX,XXX – guided now, archive furnace tons on an current of completed. XX,XXX produce nickel you so ferro addition

will off-take will of in also XX% TISCO for of of the the PTVI the go this after XXX% the And This is will will XXX and Xinhai that mine. be the the the five structure first terms of off-take terms be will years, all plant that's the China the China-co then the shared project, who plan. be and of to In get XX% of with build about plant will needs the LNG, its your to But co market plant. And we megawatts. the of constructor that still around share. question and

into in this LNG. we've Alex, brought President's which support We as talking We got this energy the overall prioritized be this will stitched morning, the Projects, hasn't of The word to just for local Strategic as terms will in that been from but solution some that means suppliers National the well. third-parties had get fully government well. project the project are of

a little LNG. we you. further a And on call. update source, difficult Thank might the built results by yes, to Xinhai. So, still we plant will it’s know you be next give will with We itself sticking be the

Operator

audio question Mr. from next comes your JPMorgan. The Rodolfo Rodolfo, Angele with available. De is

Rodolfo De Angele

Thanks.

which I happened the mostly of side wanted matters of to just happening question. think key already these were and wanted for it in fully it I were more the – on Thanks. And being discussed. happening, what’s I add what’s turnaround questions, most the why cost bottleneck I Vale, the north, one is guess So, my on to process me. there? licensing is what’s that’s about hear to all

Marcello Spinelli

license the getting, industry. is ESG in process mining I in Spinelli we think all Well, sophisticated league more process, restrictions word another Rodolfo. and the Brazil also is and in actually part you, the here. the the is that of have best I This safety And say Thank world environmental can regarding here. in that

a you the is the that north level – license to need that’s quality again So the In that’s to of same. process. bring the

we Amazonia. inside So are

to are sustainable analysis have of in that we the area and guarantee So, bringing best in Amazonia. development our we protection action

to ITVs, the have an the we we’ve thing $XXX example, So right although analysis been again, a working that the have guarantee we doing are years Again, to more our bring the agencies. we just institution, we I the think bring last genome faster together with in million are against long-term to actually guarantee but right license and that’s to our DNA analysis need company. than XX investing best reality, a blame with – we could our our together We strategy doing as what thing do process. to that, agencies. and is guarantee that we ESG hard compliant We work the we work say an need and

are, the pit, we small Range we So, for we delay role we license that we in can an opened in have are, time in call We is what what license this short-term? the expect had delays. the our, North all especially had some this,

We expect July. September; the should another be small round last for in pits of

well. going in September, So, we this we already it’s our have guidance,

The huge thing that’s plus already the achievement. XX, have, we a that other good

for construction, of business. area bring and have this the We we flexibility to a capacity huge bring to our space can

and to level that’s the that’s again, need trend, good. So be a of the now game

Operator

Liam, The available. question Bank. audio Mr. next Deutsche comes with is from Liam Fitzpatrick your

Liam Fitzpatrick

you. Thank

Just ore a couple strategy. iron of questions on your

for to to link to your is potentially previous it’s see XXX given XXX told suite. you lift How getting you of short-term licensing kind we competitor at capacity this is years; wanted the previously like the year. that the by unit this metals, year, your the sense what’s Semeando, in this off ore you’ll tons of to the half? when going it what moving quite higher. be that get in seen that one a And to you of of a a of question costs we’ll doing QX perhaps production, end I higher. a think iron product QX what to one target And around the just in run link HX parts then strategy this million were base get And XXX lot challenges, seen in a rate could we’ve on final bit And do the you the direct year, the us you. end in term could costs So first is looks ground. four influence Can finally to ask first latest if of longer of the sort give and end compared us to or Thank we’ve level?

Marcello Spinelli

really And This can’t but come, name around you, again, world the in the how game don’t for forget have in that the, it’s mine regarding the – side, forget. Thank projects have also of is the game, of are them. that for have the the we any how reinforce say manage. that game, in I There a of best bring we the place And we models is Liam. we they we the Again know our we that part is already but and part many ports the Spinelli future challenge will lot infrastructure that license the logistics challenges know of have in issues, some, quality structural here. considered the we are to a that that don’t year capacity a in have that and environment but comment Don’t in institutional near we the the we of can so to place future. mode. in in don’t are

that in of or near if from supply I brought it the been, So our number supply base there’s depends evolving XXX, And any future. we operations. risk coming reach you on is of to ore’s, more that’s dams. talk journey. about market, And back the you the even the appointed when market. three quality And the see the in to first high terms in have demand other a produce, it’s about depends all to work. coming we’ve to When impact a and from a Semeando, the demand. for huge you capacity the point XXX strategy on one for We related And great the no lack areas grade bring the main

that can the also end are track. an Torto. The be license dams two adjustment the, expecting be, are year delay by and license coming can that adjustments. We the it’s do Itabiruçu we of can the okay, projects It’s on and

So point volumes adjust to but we’re by again can to do, the also. market? at the the production next for end the we pace how the in of And year year usual here to is trend as the say Day, level Vale the main going is, bring quality the of

products going demand So, are bring that not the for to them. with not we’re

Day. Vale the So come final numbers will in the

Deshnee Naidoo

revised $X,XXXX at as right, then half of If at we the my are decisions both in in my put at $X,XXX number your terms half took – Sossego was are will driving foundations, of maintenance I still XX% Salobo terms be would for for quarter. I the if Liam, I metals quarter just improvement over just or base turn for that’s this If maintenance mean cost copper We’ve Eduardo to a, quarter, look question want quite so all-in absolutely the advised we we guidance, the of ton on on basis rest for us. regarding because I was the copper right? the unit some was, quarter the into a very with well. of revising a to I the materially that despite the a the happy do. and quarter so that in an get one, Sossego to the asset what basis trying side, integrity. production, affected tough agree we in And in cost, the team next and the had copper course, the cost, of that that, good And additional full the per cost Salobo not good anticipating about slightly capacity. quarter of as this year think on increase, to we But I the on copper, look regards on our to

we’ll for least end, year by the to $X,XXX, hoping at that terms in of are copper. cost get we So, just per $X,XXX ton all-in over

incident because only from some down bit, a South had Coleman operations, us all-in quarter for byproducts on copper all The in quarter. clear, we nickel? the challenges get did because that one I quarter, in just have in first we on, But lost bit and in one, So quarter let so number, is event. byproducts. and I we also ton, $XX,XXX two, look capital. of all-in on Coleman quarter the quarter are we which are per what’s the lot a in quarter a a from we of the And excludes if but also two, offset we happening that’s So, an to $X,XXX seismic around respectable nickel, on at the not Atlantic reported which nickel two, that copper in the from

at typically that the get. of need a of as are credits So, the well. as increase downstream again, the we to terms guidance the of would Eduardo XX% currently half-on-half almost hence nickel lost that mentioned, underway, and maintain, of we initiatives we bit all we’ve capacity in But byproduct nickel

$XX,XXX comes year to cost. full all terms we’re So, nickel nickel, an $XX,XXX in all-in per of when it around anticipating together, the ton,

earlier. I how would Thank cost you. that’s the So look at

Operator

This question-and-answer session. Eduardo Bartolomeo concludes today’s you this at may time, closing Mr. your statements. proceed with

Eduardo Bartolomeo

first interest questions. lot of Okay. Thank in Good you. of the A thanks questions, all, lot Well call. our for a

just I initial think it’s great. remarks. Deshnee I here, mentioning want what reemphasize Gustavo [ph] Naidoo the to

a value the after years a and mitigating We we So, learning three risk Brumadinho. half lot. with

our driving a saying dams been are is I’ve control. that Brumadinho Brumadinho. forget under totally force. always never will We

years are We now three much safer than ago. we were

in We drains, in business. team agenda five reshaping, top, billion in $X nine the ESG the great Our did in cashed know like business and made proud. sold countries. We embedded it’s our job it’s our numbers. We really really a did, us you

have So it’s celebrate something over. it’s that we to

us. assets to can We don’t core Now, and we and It’s and need we and it our is safely. good have market can do favor. do extremely reserve resources in it We We have reserves the helping focus on appropriately. rush. to

We are correctly. that going to manage

are in are Ferrari. have what needed to in leaders we, leaders to with used As going we ore, I say, And as we focus iron that we to it’s going nickel, safety. do a

light. it’s Now

it, we is reemphasize, term run industry. really Now transition fundamentals it. And just short here, The to and to to of later, do have hiccups. like trust it are the we run the we one, energy besides all going the

not We’re say not sprint. It’s a marathon. always here is a the for

here We’re year. one not for

for Vale years. are for like We XX here

years. the Vale XX not We of for hundred a years, Vale the are building as

There There then really, supply But So we demand. geopolitical believe that believing we the fundamentals. hurdles we the truly have are moment. is risk. resilient are and right

opportunity So say hands. doing what do capital you the in that When we us day it time disciplined extremely best, have can growth extremely, can take we we by have one. do we since going like investment, we exactly to are your effort are because your Vale, so said are location, that’s to investment best And you we best to, that risk.

So us you keep and again a and call Vale next do the safe. thanks in like and lot by see

Operator

very you today. call conclude for does participation. conference That much Thank Vale’s for your

now disconnect. You may

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