Vale S.A.

Good morning, ladies and gentlemen. Welcome to Vale's conference call to discuss the third quarter of 2021 results. At this time, all participants are in a listen-only mode. Later, we'll conduct a question and answer session and instructions will be given at the time. If it should require assistance during the call, please press the star followed by zero. As a reminder, this conference is being recorded. and the recording will be available on the company's website at vale.com at InvestorsLink. This conference call is accompanied by slide presentations, also available at InvestorsLink at the company's website and is transmitted via internet as well. The broadcasting via internet, both the audio and the slide change, has a few seconds delay in relation to the audio transmitted via phone. Before proceeding, let me mention the forward-looking statements are being made under the safe harbor of the Security Litigation Reform Act of 1996. Actual performance could differ materially from that anticipated in any forward-looking comments as a result of macroeconomic conditions, market risks, and other factors. With us today are Mr. Eduardo de Salles Bartolomeu, Chief Executive Officer, Mr. Luciano Ciani Pires, Executive Vice President Finance and Investor Relations, Mr. Marcelo Spinelli, Executive Vice President Iron Ore, Mr. Mark Travers, Executive Vice President Base Metal, and Mr. Alexandre D'Ambrosio, Executive Vice President Legal and Tax. First, Mr. Eduardo Bartolomeu will proceed to the presentation on Vale's third quarter 2021 performance. And after that, he'll be available for questions and answers. It's now my pleasure to turn the call over to Mr. Eduardo Bartolomeu. Sir, you may now begin.

Thank you. Good morning, everyone. I hope you are all fine. Regarding COVID, the vaccination of our employees is progressing very well, in line with actions of the public health care system. We have already 90% of our own workforce with at least one vaccine shot in Brazil. We are gradually resuming activities in our offices. Today, for example, we are almost all together at the company's headquarter for this conversation, for the first time since the beginning of the pandemic. With our guard up, we are getting back to a normal routine, keeping our focus on safety and people. We continue to work with the authorities to implement the R$37.7 billion agreement For the Integral Reparation in Brumadinho, signed in February this year. By the end of the third quarter, we had disbursed almost R$ 4 billion for our payable obligations and actions for environmental recovery. This expenditure should reach R$ 13 billion by the end of 2021. The individual damage compensation also continues, with over 11,400 people covered by civil or labor indemnification agreements entered into EVALI. We remain committed to repairing Brumadinho in an agile, fair, and quick way. We are also advancing on our ESG agenda. In our new package society, We renounced our mining rights in indigenous lands in Brazil. On the social front, we donated more than 600,000 food baskets to the families in a situation of food insecurity in Brazil, an action in partnership with civil society entities and volunteers. By the end of the year, we must reach 1 million food baskets for over 200,000 families. One of our purposes on the social front is to contribute to the strengthening of autonomous and resilient communities through education, health, and income generation programs. To do this, we are defining our new social ambition and redesigning our goals, as we did on our journey towards a low-carbon mine. Our social agenda is increasing in its strength, and we expect to announce further details On the climate agenda, we are pleased to announce some important advances this quarter. In scope 3 emissions reduction, we achieved some milestones. In July, the Porto do Barão received the first arqueira with a rotor sail system. And in August, our Ponta da Madeira terminal received the first vessel with air lubrication technology. Thank you very much. which can curb CO2 emissions of our steel making clients by more than 10%. The briquette is the result of years of research and development by Vale. We already have three plants under construction, an investment of $185 million. We are assessing the feasibility of building another five plants for a potential production capacity of 50 million tons per year. With that, we are Well positioned to lead the way in reducing Scope 3 emissions with innovative technologies and a portfolio of high-quality products essential for the low-carbon economy transition. Now focusing on our performance this quarter, we produced close to 90 million tons of iron ore, 18% higher than the previous quarter. In these nine months, we increased our production by 8%, On the resumption, we had an important progress in the Vargem Grande complex, with the operational start-up of the Maravides III dam and the commissioning of the long-distance conveyor belt. With this release, we unlocked another 6 million tons of annual capacity. We continue to move forward with a safe operational resumption In a year still marked by COVID-19 restrictions. Spinelli will give you more details about our performance in Iron Horse soon. Well, in ICO, our performance was impacted by two important events. First, the labor disruption in Sudbury. In August, we reached a five-year collective bargaining agreement and restarted operations in September. In Onsapuma, who had a longer maintenance due to COVID safety measures with production resumption by the end of September as well. We will continue to work towards great operational reliability, particularly in the base metals business. Our entire management team is committed to this. And we continue with our discipline and capital allocation. Our cash generation, in addition to supporting the reparation Business Safety, and the resumption of operations allow us to return value to our shareholders as our recent track record of dividend payments makes clear. We ended the quarter with a strong cash generation of $7.8 billion, $1.2 billion higher than the second quarter. Sticking to our value over volume strategy, We will continue to create and share value with our shareholders. With consistency in dividend payout and with our buyback program almost 100% complete, our board of directors has just approved a new buyback program, this time for up to 200 million shares, equivalent to 4.1% of outstanding shares. Our buyback program shows our confidence Invalides Potential to Create Value. To conclude, I want to reinforce that we are making progress with our de-risking, reshaping, and re-rating to build a better valley. To recap, in the de-risking, we are implementing the agreement for the integral reparation of Brumadinho with total payments of R$ 13 billion expected by the end of 2021. We are executing Our dam de-characterization program. We expect to eliminate one more structure by the end of this year, totaling seven completed structures. We continue to resume our production with the release of the long-distance conveyor belt and the start-up of Maravira tree dams in Vargem Grande. And our next big deliver is Brukutu and Itabira. The works of the Torto Dam are advancing, and the filtration plants have a physical progress higher than 80%, as you can see in these pictures. Finally, we are committed to increase the reliability of our operations. Transforming the base metals business is one of our top priorities for 2022. In reshaping, we are moving towards divesting the coal operation with good prospects until the end of the year. In fact, in coal, We expect an important cash generation in the fourth quarter due to excellent market conditions. We also expect to complete the divestment of manganese assets, and as a result, we will move forward with the divestment of other non-core access. In the re-rating, we continue to implement our management model, the VPS. We continue to work hard on values culture transformation. and we are moving forward with our agenda and commitments to transform ourselves into a more sustainable mining company and engaged in matters relevant to society. I would like to conclude by thanking Luciano for his excellent work in charge of Vale's finance and investor relations area since 2012 and I'm sure that he'll make a significant contribution for the future of the company as our new Executive Vice President of Strategy and Business Transformation. I also would like to welcome Gustavo Pimenta, our new Executive Vice President of Finance and Investor Relations. Gustavo brings his global experience and a renewed vision to our business. Now I hand it over to Spinelli, who will give more details about the performance in Iron Ore. Thank you very much.

Thank you, Eduardo. Good morning, good evening. I want to start my presentation giving you an update about the resumption plan. We had a chance to go in details in our last investor tour. If you need more information, you can find it on our website. But Vargem Grande, as Eduardo said, is almost there, step by step. Maravilhas III is now running. And the long-distance conveyor belt just added 6 million tons of capacity. So, We reached 341 million tons of capacity as we planned. Now moving to production overview. In Q3, we produced almost 90 million tons due to the seasonality coming from the rainy season to the dry season, improving the northern system. Vargem Grande, as I mentioned, is in ramp-up. Itabira is running really well, much more efficient. and we have the full operation in Fabrica. But I want to drag your attention to the northern system. As we presented also in the last investor tour, we expect a smooth ramp up to reach 240 million tons of production there. S11D is a brand new project, you know very well, trackless system, low OPEX, but we are still in a learning curve We've been improving our body knowledge. We found more jaspalite than we expected. Jaspalite is a very compact waste material, and as the system there is less flexible than the conventional system, we need to crush this material in the mine site. So to address this, small rocks, we are We're going to install the able crushers. We have one already installed. Now we have the other three. We're going to do this in the next quarters. And to solve bigger rocks, we need to install a bigger crusher that will be ready in three years. But until there, we're going to stockpile these rocks in the mine side. But we have good news from the Northam system. Several actions and assets are coming online such as the Plus 10, the expansion S11D, the Plus 20, Gelado, Northern Range, we have N3, N2, N1 and East Range. All of them together will support the ramp up of 240 million tons. Well, you may ask us about the gap between production and sales. Last year, we had the same problem. And remember that we have a production seasonality comparing the Q2 and Q3. And we need to add the supply chain extension, the blending process time. Remember that we have some volume adjustments. Don't forget, in an example, if you produce pellets, we reduce 10% of the mass. But all this together, we could expect a gap of 8 to 9 million tons. But we had an additional 4 million tons. We decided to delay the sales of the standalone high silica and blend with Carajás to form the BRBF later. So that's the beauty of the supply chain flexibility we have in Vale. We can daily take decisions to maximize our margins. You also may ask about why margin of volume at this level of price. So don't forget, we also have in this analysis the discount of the product, totally related to the demand, and the freight. And in this case, this time of the year, we have the spot freight as a marginal product. We need to consider the spot freight. And we are Participants of this market, this pot market, if you put more pressure or less pressure, we can increase or decrease the impact for the whole portfolio value. So all this together, we decide to delay these sales. We didn't decide yet, due to the market condition, to replenish this high silica standalone product. So we're not producing this yet. So that's the reason our production guidance is 315 to 335. We didn't change that, but we are in the lower than the middle of the range of the guidance. What we can expect for the production in 2022. So you always ask us about the guidance for next year. We are going to announce only in the Valley Day in the end of November. But what we can consider in our rationale to define this range for next year. Firstly, the presumption plan. The following increase of capacity will come more in the end of next year, like Torto, Gelado, we'll add more volumes. But as Eduardo said, we need to understand that the guidance is related to volumes, but we are increasing Thank you very much. One example is due to this market conditions today, we can reduce the production of the high silica standalone that is still available. Every time we increase the quality, the process to increase the quality, we're going to leave this kind of product, but we have 12 to 15 million tons that we can reduce in our capacity and produce less last year. That's an example. And third, we also consider buffers for some production setback if you have any variation, any anomaly in our production, we consider in our planning. So all of this together will be part of the definition of the production guidance for 2022. I'll stay here for further questions. I pass now to Luciano Ciani.