0 Building a Stronger Organization Murilo Ferreira, Vale CEO Bank of America / Merrill Lynch Global Metals, Mining & Steels CEO Conference Barcelona, May 12, 2015
2 We have been working in several dimensions to further improve Vales highly competitive position in the mining industry Increasing Volumes Reducing Costs and expenses Setting the basis Delivering for strong Free projects…
3 We have reduced expenses1,2 significantly but we are not there yet US million -50% -21% 7.117 808 4 638 4,521 3.547 2012 2013 2014 1Q14 1Q15 Net of depreciation and amortization. Includes SG&A, R&D,…
4 We have also made significant progress on cost reductions but we are still not satisfied Iron ore unit costs and expenses, US/t Royalties Cash Cost FOB port Brazil Freight Costs Expenses -13% -28% -47% 22.7 7,5 19.8…
5 We remain committed to delivering additional productivity gains Completed In implementation Example of initiatives Status Improvement in availability of the transportation fleet in the Northern System Mine Resizing of…
6 And we are about to operate some of the most competitive assets in the world High quality products will replace lower grade material and improve margins N4WS in Carajs Itabirites Projects Plant 2 N4W Plant 2 Primary N4E…
7 Our differentiated and further improved product quality will drive price realization up Delta premium IOCJ 65% vs. Platts 62% Fe Content %, premium over Platts % +0.9 pp 12,6% 64,6 11,6% 63,7 10,1% 9,5% 2014 2018 8,3%…
8 And our iron ore break-even will reduce even further as early as 2015 US / dmt, average costs and expenses landed in China 43 2-3 0-1 0-1 0-1 37- 41 2 3 3 4 5 2 1Q15 FOB Cash Costs Expenses Quality Freight Average 2015…
9 In the coming years our capex will reduce sharply as we complete our investment cycle Status of Vales project portfolio Vale capex profile 3 BRL/USD US billion 8 projects delivered in 2014 S11D advancing as planned: mine and…
10 And upon completion of projects our production volumes will grow across all business segments Iron Ore Nickel Mt Kt 453 459 316 303 411 376 275 332 340 319 310 260 237 2012 2013 2014 2015 2016 2017 2018 2019 2012 2013…
11 Helping us reach our ebitda targets in base metals for 2015 and 2016 US billion Increase volumes and reduce cost and expenses in Canada and Indonesia Reach 37 Ktpa at Complete the ramp up VNC 0-1.0 3.1-4.6 of Salobo (200…
12 And helping us reach even higher margins in iron ore Increase in EBITDA unit margins (US/t), 2018 vs. 2015 0,5 1,2 2,0 7,0 3,3 Costs reduction Expenses reduction Quality/Pricing CFR freight reduction Total…
13 Meanwhile, we continue to divest non-core assets and form strategic partnerships Aluminium Oil & Gas Concessions II Logistics Tres Valles Oil & Gas Gold Fosbrasil Copper Log-in Fertilizers Kaolin Reference Coal US 1…
14 From these divestments and partnerships we expect to raise US 6-7 billion in cash proceeds in 2015 Cash Impact Initiatives Transaction details in 2015 Status Timing Goldstream Sale of an additional 25% of Completed with US 900…
15 Results from our initiatives are already setting the basis for strong free cash flow generation as of 2018 Capex will be around US 4 billion Volumes will increase by about 40% in iron ore, 20% in copper and 15% in nickel…
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