Vale S.A.

Good morning ladies and gentlemen, welcome to Vale's third quarter 2024 earnings call. This conference is being recorded and the replay will be available on our website at vale.com. The presentation is also available for download in English and Portuguese from our website. To listen to the call in Portuguese, please press the globe icon on the lower right side of your Zoom screen and then choose to enter the Portuguese room. Then select Mute Original Audio so that you won't hear the English version in the background. We would like to inform that all participants are currently in a listen-only mode for the presentations. Further instructions will be provided before we begin the question and answer section of our call. We would like to advise that forward-looking statements may be provided in this presentation, including Vale's expectations about future events or results, encompassing those matters listed in the respective presentation. We caution you that forward-looking statements are not guarantees of future performance and involve risks and uncertainties. To obtain information on factors that may lead to results different from those forecast by Vale, please consult the report's Vale files with the US Securities and Exchange Commission, the Brazilian Comissão de Valores Mobiliários. And in particular, the factors discussed under forward-looking statements and risk factors in Vale's annual report on Form 20-F. With us today are Mr. Gustavo Pimenta, CEO, Mr. Murilo Muller, Acting Executive Vice President of Finance and Investor Relations, Mr. Rogério Nogueira, Acting Executive Vice President, Iron Ore Solutions, Mr. Carlos Medeiros, Executive Vice President of Operations, Mr. Shawn Usmer, CEO of Vale Base Metals, and Mr. Alexandre D'Ambrosio, Executive Vice President of Corporate and External Affairs. Now, I will turn the conference over to Mr. Gustavo Pimenta. Sir, you may now begin.

Hello everyone and welcome to Vale's third quarter 2024 conference call. I'm pleased to present Vale's result for the first time as the company's CEO. Before I start, I'd like to take a moment to thank Eduardo Bartolomeu for his tenure as CEO of Vale in the last five years. Eduardo led Vale through one of the most difficult periods of our history. It drove a series of significant changes within the company. And today we are in a much stronger position, being safer, more stable and better prepared for an even greater future. So on behalf of the entire valid team, we thank you, Eduardo, for that. I also want to express my gratitude to the board of directors for their trust and confidence. It is an honor for me to lead this great company, and I'm highly confident and optimistic about our future. So in my initial weeks as CEO, I have outlined the key areas of focus that will guide us going forward. Vale has an immense potential, and I firmly believe that we can position ourselves as a reference in the sector. For that, we are building on our solid progress to develop a Vale 2030 vision, which we plan on detailing at Vale Day in early December. This vision will be based on three key pillars. First, a performance-driven culture. We will accelerate our cultural transformation, maintaining our focus on safety and operational excellence, while also becoming a more agile, efficient organization. As such, we will be taking decisive actions to maturely improve our competitiveness and once again position Vale in the very low end of the industry global cost curve. We will provide more details about our cost-efficient initiatives and associated targets at Valley Day. Second, a superior portfolio. We will accelerate the execution of our premium iron ore strategy, leveraging on our unique endowment. Valley has one of the richest iron ore resources in the world, and we aim to structurally produce about 350 million tons of iron ore. of which 80 to 90% will be high quality products like BRBF, Carajás, and agglomerated products. This flexible portfolio will allow us to support our clients in their decarbonization journey while maintaining optionality to capture value under different market conditions. We also have a very unique base metals platform with significant growth potential, particularly in copper. I'm very pleased with our strategic decision to carve out the business last year and have a world-class dedicated team under the leadership of Sean. I'm highly confident we'll take this business to the next level in the following years. Third, it is essential that our stakeholders see us as a trusted partner. For that, we'll be working closely with society to leave a positive legacy from our activities while creating responsible and trustworthy relationships. This will be a critical priority of mine and my leadership team, and I'm certain it will give us a competitive advantage going forward. We are working as a team to detail what each one of these levers mean in terms of concrete goals, targets, and initiatives, and we'll be providing the details at Valley Day. Now let's take a look at our recent performance in the next slides. We are making steady progress on our commitment to eliminate upstream dams in Brazil. Our de-characterization program includes 30 structures, and this month we achieved another important milestone by eliminating the 16th structure, dike 1a, on October 11th, about two months ahead of schedule. The dam elimination process requires a lot of innovation and it is complex and unique for each structure. We have gained incredible experience and knowledge through this process and this has allowed us to accelerate the de-characterization of many structures while upholding the highest standards of safety and risk management. We will continue to deliver on our dam safety commitments with a disciplined approach. Alongside the decommissioning process, we are working to enhance the safety of our structures. The chart on the next slide shows our progress on removing dams from emergency levels. In August, we removed the Sioux Superior Dam from the Emergency Level 3. And currently, there is just one dam left at this level, which is the Forquilla 3 Dam. And we are making very good progress to reduce this dam's emergency level soon. being on track to deliver on our commitment to have no dams at level 3 by 2025. The future of mining will require companies to reduce its footprint and minimize even further the impact of their operations. At Vale, we have been working on a series of initiatives to create more circular operations, such as our Gelado plant in Carajás. which will be able to produce up to 5 million tons per year of high quality iron ore by reprocessing existing tailings. Other initiatives include processing waste from piles and generating co-products for other industries. In addition to minimizing the impact of our operations, these initiatives usually have quicker time to market and lower unit costs once they reach scale. Now let's talk about the performance of our portfolio in the next slide. This quarter we delivered the highest iron ore production since 2018, underscoring our focus on operational excellence. Aligned with our strategy to grow on agglomerated products, our pellet production reached its highest level for any quarter since 2019, increasing 13% year-on-year. Last month we increased our production guidance for the year and we are now confident we can deliver at the top end of the 323 to 330 million tons range for 2024. Iron ore sales in the quarter were in line year on year with an important quality improvement in our product mix on the back of higher BRBF sales and the proactive decision to reduce direct sales of high silica ore. Delivering on our growth projects in iron ore is critical for us to improve the flexibility of our portfolio. To that end, I'm very pleased to see the successful startup of Virgin Grande within budget and one month ahead of schedule. This is a 15 million tons iron ore project, which should also increase iron ore content by about 2% at the site. The next relevant project to come online is Capanema with another 15 million tons. The project is already 91% complete and it is scheduled to start up in the first half of 2025. This demonstrates that we are effectively delivering on our commitments, regaining not only volumes, but more importantly, commercial flexibility, which will help us maximize value creation. Looking at our energy transition metals business, we also saw a strong production performance year on year in both copper and nickel. as the asset review initiatives started generating results. Ore processed at Salobo 1 and 2 plants increased by 30% year-on-year, and our Sudbury mines had a 20% increase in mill throughput year-on-year. Sean Usmer has recently joined as VBM's CEO, and will continue the implementation of the asset review and execution of the company's long-term strategy. I am confident we have the best team in place to take the energy transition metals business to the next level. Last but not least, after two years of negotiation, today marks an important chapter in our history. We signed the binding terms for the full reparation of San Marcos Fundão dam collapse. The terms agreed are a result of open dialogue based on social, environmental and technical criteria. and reinforces Vale's commitment to a fair and definitive reparation. The total value of the agreement is R$ 170 billion, which will be divided into R$ 100 billion in cash payments payable over 20 years to the federal government, the states of Minas Gerais and Espírito Santo, and the municipalities to fund compensatory programs and actions tied to the public policies. plus R$ 32 billion in obligations to be performed by San Marco over the next years, including ongoing programs for individual indemnification, resettlement and environmental recovery, which will be gradually transferred from the Renova Foundation. The total amount also considers the R$ 38 billion already disbursed in 42 compensation programs over the years. Together with all the key stakeholders, we reached a mutually beneficial solution for all parties, especially for the impacted people, communities and the environment, while creating definitiveness and legal certainty for the companies. Now, I'd like to invite Murilo Miller, our Acting CFO, to talk about our financial performance. Please, Murilo.

Thanks, Gustavo, and good morning, everyone. It's a pleasure to be here to present our third quarter 2024 results. So let's start with our EBITDA performance. As you can see, our performer EBITDA reached $3.7 billion in the quarter, with some encouraging factors that helped mitigate the impact of lower iron ore prices. In Q3 2024, we achieved higher sales volumes, particularly in pellets, our highest quality product. We also delivered a much better performance on costs and expenses while the weaker Brazilian Real provided further support. As Gustavo mentioned earlier, we are extremely focused on regaining our competitiveness and our C1 cost performance is particularly important in this journey. Let's take a closer look at our C1 in the next slides. In Iron Ore, our C1 cash costs excluding third-party purchase was $20.6 per ton, 17% lower quarter-on-quarter and 6% lower year-on-year. We were pleased to see that this is the first year-on-year decrease in C1 cash costs since the first quarter of 2021, giving us confidence that we are on the right path to becoming a more efficient company. sequential improvement was driven by the results of our efficiency initiatives lower maintenance expenses fixed cost dilution as well as a better production mix with more volumes come from the northland system where we have our most competitive operations we are highly confident in delivering our c1 cost guidance for 2024 of 21.5 to 23 dollars per ton more than that our performance is actually pointing towards us achieving the low end of this guidance in 2024. In Q4, we expect sequentially lower costs. For reference, our C1 in September reached $18.2 per ton, excluding inventory effects. Now, moving to the energy transition metal business, we observed an overall decrease in our all-in costs year on year. In copper, The 13% year-on-year reduction was driven by higher unit byproduct revenues and lower unit COGS, resulting in an all-in below $3,000 per ton. As a result of this solid performance, in Q3, we are once again revising our 2024 all-in cost guidance downwards, with the new range being now between $2,900 and $3,300 per ton. In NICO, despite the consolidation of PTVI operations, which have lower average costs, all-in costs decreased by 3% year-on-year. We remain on track to meet our cost guidance for 2024. This improvement was a result of the ongoing ramp-up of Voices Bay operations, which allowed us to reduce third-party purchase in our Canadian refineries, coupled with higher unit byproduct revenues. Now, moving on to cash generation. Free cash flow generation was $0.2 billion, mostly impacted by lower EBITDA and by negative working capital. We saw an increase in accounts receivables due to 14 million tons of iron ore sales accrued in the end of the quarter, as well as 23 million tons of sales that were booked at a forward price of $109 per ton. Our capital expenditures remain steady quarter on quarter at $1.3 billion, trading below our guidance for 2024 of approximately $6.5 billion. Lastly, our free cash flow generation and strong cash position were primarily used to return value to our shareholders with the payment of $1.6 billion in interest on capital in September. In Q3, we also acquired the remaining stake in Aliança Energia. As we have previously mentioned, our intention is to look for potential partners for our energy assets while keeping a minority stake. We hope to be able to bring more news on this in the coming months. Before passing the floor back to Gustavo for the key takeaways, I'd like to comment on the agreement we signed today. As Gustavo mentioned in his opening remarks, the agreement outlines the reparation and compensation measures related to the Samarco Dam collapse. In addition to the 38 billion reais disbursed since 2015, the agreement establishes 100 billion reais in payment obligations over a period of 20 years and 32 billion reais in performance obligations by Samarco, including initiatives for individual identification, resettlement, and environmental recovery. This table outlines our expectations of cash commitments. As you can see, in the short term, we will have a higher concentration of obligations to perform, and over time, the impact on cash will gradually reduce. This cash outflow projection considers that Sunmark will continue to pay for a portion of the requirement payments as per its approved business plan. As such, we have recognized an extra provision of approximately $1 billion, bringing our expanded net debt to $16.5 billion. Regarding our optimal leverage targets, we are maintaining the $10 to $20 billion range under the same expanded net debt concepts. Now, I pass the floor to Gustavo.