September, 2010
Vale, a global mining company Fidel Blanco – Senior Managing Director
Corporate information
Vale Main Activities Asset portfolio
Asset base by geography in 2009
Iron ore & pellets Manganese & ferroalloys
Asia Pacific 20.0%
Nickel & Cobalt *
Others 0.6% Bauxite, alumina & aluminum
Coal
North America 25.2%
Potash & kaolin
Copper
Brazil 54.2%
Logistics
PGM *
* Cobalt and Nickel were included in Vale's portfolio after the acquisition of INCO, Platinum Group Metals (PGM) Source: Vale 2
Vale in Switzerland - Brazil Day – University of St.Gallen - October 2010
Vale has a broad presence around the globe
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Vale in Switzerland - Brazil Day – University of St.Gallen - October 2010
Vale is Brazil’s Biggest Net Exporter 51,3% of the Brazilian trade surplus in 2009 U$ billion
9.9 7.9
1H10
13
2009
16.2
2008
46.2
6.4
2005
2002
44.7
4.6
33.7
3.4 2.8
24.8 13.1
Brasil Trade Surplus * Exports – Imports Sources: BR GAAP and Brazilian Ministry of Development
4
40.2
8.8
2006
2003
24.8
11.5
2007
2004
25.3
Vale in Switzerland - Brazil Day – University of St.Gallen - October 2010
Vale Net Exports*
One of the world’s largest companies (Market Capitalization) Ranking 500
400
300
200
100
July 30, 2010
2009
2006 2005
74
117
153
2004 275 2002
446
2003 334
Source: Bloomberg Source: Financial Times – FT 500 & Bloomberg
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Vale in Switzerland - Brazil Day – University of St.Gallen - October 2010
21
42
2008
2007
1
25
Market Capitalization Market Value among the Top 6 Mining Companies in the World (US$ billion) July 30, 2010
BHP
189.2
Vale
141,6
Rio Tinto
103.4
Anglo
52.2
Xstrata
46.8
Alcoa
11.4
0
20
40
60
Sources: Vale - Investor Relations Department and Bloomberg 6
80
100 US$ billion
Vale in Switzerland - Brazil Day – University of St.Gallen - October 2010
120
140
160
180
200
Who is Vale in Switzerland?
Vale’s business center in Switzerland – St-Prex Vale International SA has the following key functions in a central location across regions and a source and development of multinational talents to strengthen and diversify Vale management. The operations in Switzerland act as a window and gate to the world, particularly to the international markets and customers. It has two main focal points: commercial and corporate (holding). Exploration department IT Support Shared services Organization Procurement for EMEA Human resources for EMEA Law department for Europe Corporate Affairs & Sustainability Communication for Europe Financial department for Europe, Middle East and Central Asia
Vale Holdings
European sales department of Nickel and Kaolin Coal sales department for Europe and Middle Eastern Risk Management Department
Global Iron ore, Manganese and Copper sales departments Global Tax departments 8
Vale in Switzerland _ Brazil Day – University of St.Gallen_ October 2010
Vale’s business center in Switzerland 87 employees. High diversity: 19 different nationalities with multinational experience, including 37 staff of EU nationalities, 23 people who are Swiss, 27 people outside of Europe
• New building is open since the 7th of September 2009 • 50 million CHF investment, 13,687 m² total site and 9,914m2 only the building, 3 floors plus basement, capacity for up to 350 persons, auditorium, fitness, restaurant, latest energy (Swiss “Minergie” label) and ecological criteria • High economic impact for Vaud and Switzerland
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Vale in Switzerland _ Brazil Day – University of St.Gallen_ October 2010
Why Vale chooses Switzerland?
Why Switzerland? Strategic location in the heart of Europe and across Regions (South America, Asia and North America), in the middle of time zones between our Rio Headquarters and operations across the globe up to Asia, therefore allowing easier communication and travels Close to major customers, suppliers, investors, and major financial and shipping centers Excellent and reliable infrastructure for the business (airport, highways, trains, logistics, universities, connectivity) Excellent environment and facilities to attract management and staff (housing, schools, health facilities, safety, environment) Very international environment thanks to the presence of international organizations, major companies’ headquarters and banking sector Excellent and competitive market for recruiting and retaining top talents Very business friendly and reliable Very stable politically, economically and socially 11
Vale in Switzerland _ Brazil Day – University of St.Gallen_ October 2010
Highlights of Vale Results
Vale Sales – By Business Area
FERROUS MINERALS (kt)
2009
1H10
NON-FERROUS MINERALS (kt)
2009
1H10
Iron ore
229.174
116.999
Nickel
223
70
Pellets
18.087
18.246
Copper
216
71
Manganese ore
986
534
Potash
792
290
Ferroalloys
253
202
Precious Metals (oz)
1.287
252
Coal
5.673
3.781
PGM (oz)
233
15
Cobalt (metric ton)
1.854
329
Aluminum
495
226
Alumina
5.246
2.589
Bauxite
205
385
Phosphates
-
370
Nitrogen
-
88
Source: Vale – US GAAP 13
Vale in Switzerland - Brazil Day – University of St.Gallen - October 2010
Cash generation composition in 2009
Other 1.35%
Coal 2.11%
Non Ferrous Minerals 30.35%
Ferrous Minerals 61.59% Logistics 4.60%
Source: Vale – US GAAP
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Vale in Switzerland - Brazil Day – University of St.Gallen - October 2010
Gross Revenue Gross revenue remain strong U$ billion
38.5 33.1 23.9 20.4 33.1
13.4
38.5 16.8
25.7
8.5 13.4 8.5
2004
15
2005
2006
2007
Vale in Switzerland - Brazil Day – University of St.Gallen - October 2010
2008
2009
1H10
Highlights of Iron Ore & Pellets and other Business Units
Logistic System for Iron Ore Production in Brazil Vale operates three integrated iron ore systems:
Ponta da Madeira Port
Southern System (2009): • Iron Ore Production: 55.2 Mt • Pelletizing Plants: 2.4Mt • Ports: Guaíba (300K dwt), Itaguaí (170K dwt) • Railway (MRS): 600km
Carajás
Iron Ore Quadrangle Corumbá Tubarão Port Itaguaí Port And Guaíba Port
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Northern System (2009): • Iron Ore Production: 84.6 Mt • Port: Ponta da Madeira (400K dwt) • Railway (EFC): 892km
Vale in Switzerland - Brazil Day – University of St.Gallen - October 2010
Southeastern System (2009): • Iron Ore Production: 89.5Mt • Pelletizing Plants: 13.4Mt • Ports: Tubarão (Pier I north side - 200K dwt / Pier I south side - 170K dwt / Pier II - 365K dwt) • Railway (EFVM): 905km
Vale Iron Ore Reserves & Production Vale has the largest reserves base in the industry, providing an excellent platform for sustainable growth with three integrated systems
Vale has the largest reserve base in the industry
Reserves (t) ¹
Production 2009 ²
Northern System 5 mines
7,1 Bi
84,6 Mt
Southeastern System 14 mines³
5,5 Bi
89,5 Mt
3,4 Bi
55,2 Mt
16,0 Bi
229,3 Mt
Southern System 9 mines
Total Vale
1) Figures in billion metric tones (Bi t). 2) USGAAP figures which includes 2009 URUCUM production of 533kt and 2009 4th quarter CORUMBÁ production of 423Kt. 3) Including Água Limpa mines (0,05 Bi t) and Samarco mines (2,1 Bi t) reserves. Source: Form 20-F 2009 & PREPORT 4T09P 18
Vale in Switzerland - Brazil Day – University of St.Gallen - October 2010
Vale Reserves – Other Minerals Quantity of Mines
Reserves¹
Manganese
3 Mines
73.9
Millions of metric tons of wet run-of-mine
Nickel
6 Mines
496.1
Millions of dry metric tons
Bauxite
13 Mines
503
Millions of metric tons of washed product
Copper
5 Mines
1,257.9
Millions of metric tons of dry run-of-mine
Cobalt
3 Mines
266.3
Precious Metals ²
3 Mines
1,440.6
Kaolin
2 Mines
73.9
Millions of metric tons
Potash
2 Mines
373.4
Millions of dry metric tons
Phosphate
1 Mine
239
Millions of dry metric tons
Coal
7 Mines
1,087.3
Millions of dry metric tons
1) Proven & probable reserves, as of December 2009. 2) Precious Metals = Gold, Platinum and Palladium Source: Form 20-F 2009 19
Vale in Switzerland - Brazil Day – University of St.Gallen - October 2010
Unit
Millions of metric tons
Millions of dry metric tons
2009 Vale Sales - Main Iron Ore and Pellets Markets 247 Million Tons Brazil 10.2% Asia (ex-China) 16.0%
RoW 2.1% Americas 1.5%
Europe 13.4%
Source: Vale – US GAAP
20
China 56.8%
Vale in Switzerland - Brazil Day – University of St.Gallen - October 2010
Iron Ore & Pellets sales (Domestic and export) Million Tons 300
2009
280 260
TOTAL
240 220
Domestic
200
Exports
247 Mt
25 Mt 222 Mt
180 160 140 120 100 80 60 40
Carajás start-up
Vale Privatization
Ferteco Caemi
Inco
20 0 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09
Source: Vale – US GAAP 21
Vale in Switzerland - Brazil Day – University of St.Gallen - October 2010
Incorporation of Socoimex, Samitri and participation in GIIC
Year
Sustainability
Our growth initiatives are driven by our mission and by our longterm vision…
Vale Mission “To transform mineral resources into prosperity and sustainable development.”
Vale Vision “To be the largest mining company in the world and to surpass established standards of excellence in research, development, project implementation and business operations”.
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Vale in Switzerland - Brazil Day – University of St.Gallen - October 2010
Sustainability Strategy We strive to contribute positively to the promotion of good practices in sustainability. Our strategy is based on the responsible and integrated management of economical, environmental and social issues.
In our businesses, in our mining operations, we endeavor to generate local, regional and global prosperity, and to create a positive legacy over the life cycle of our activities. To this end, we carry out a range of voluntary corporate activities and establish partnerships with governments, public institutions, the private sector, and civil society.
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Vale in Switzerland - Brazil Day – University of St.Gallen - October 2010
Sustainable Development Policy We establishes guidelines and principles in 3 main areas: • Sustainable operator: to act in a conscientious and socio-economic and environmentally responsible manner from the conception, project implementation, operational cycle and commercialization until the closure phase • Local Sustainable development catalyst: we seek to go beyond the impact management of our operations and projects, contributing voluntarily through partnerships to build a sustainable regional legacy • Global sustainable agent: that pillar is based on the acknowledgment, on one side, that certain global sustainability aspects may directly affect our businesses and, on the other side, that Vale, may contribute to the international promotion of sound sustainability practices
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Vale in Switzerland - Brazil Day – University of St.Gallen - October 2010
Excellence in environmental management and social responsibility The figure earmarked for investment in corporate social responsibility for 2010 is US$ 999 million, including US$ 829 million for environmental conservation and protection and US$ 170 million for social projects 100% of the mineral resources comes from mines with ISO 14001 certification In the last five years about 2,350 hectares were rehabilitated with native species from the ecosystems of the Atlantic Forest, the Cerrado, and the Amazon Region. There are Protection Areas of Conservation Units in three states in Brazil totaling 1.2 million hectares Vale Fund conducts social investment for the communities where the company operates in order to contribute for the integrated economic, environmental and social development, thus strengthening their social capital and respecting the local cultural identity 26
Vale in Switzerland - Brazil Day – University of St.Gallen - October 2010
Carajàs mining complex Areas protected part of the Carajás Mining Complex 1.2 million hectares equivalent to 30% of Switzerland
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Vale in Switzerland - Brazil Day – University of St.Gallen - October 2010
Thank you!
Fidel Blanco Senior Executive Director
