Latin America is a very important region to us. We have 80 companies from Latin America representing $670 billion of market cap.

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1 Vale Day at NYSE Tuesday, December 1, 2015, 10:30 AM Eastern Time Participants Stacey Cunningham; NYSE; COO Officers Murilo Ferreira; CEO Peter Poppinga; Executive Director, Ferrous Minerals Jennifer Maki; Executive director, Base Metals, CEO, Vale in Canada Roger Downey; Executive Director, Fertilizers and Coal Luciano Siani Pires; CFO Clovis Torres; General Counsel, Chief Compliance Officer Analysts Ivano Westin; Credit Suisse Thiago Lofiego; Bank of America Merrill Lynch Marcos Assumpcao; Itau BBA Paul Massoud; Stifel Leonardo Correa; BTG Pactual Carlos Alba; Morgan Stanley Daniel McConvey; Rossport Investments Andreas Bokkenheuser; UBS Presentation Stacey Cunningham: Good morning. My name is Stacey Cunningham, and I'm the Chief Operating Officer of the New York Stock Exchange. And it's my pleasure to welcome you all here today for the Vale Investor Day. The New York Stock Exchange is a $25 trillion marketplace and we're very focused on meeting the needs of investors, both institutional and retail and market professionals alike, but more importantly of our listed companies as well. We have 2,400 listed companies. Latin America is a very important region to us. We have 80 companies from Latin America representing $670 billion of market cap. And today we're going to focus on Vale. And we're proud to be part of the Vale Investor Day. And it's the 14th Investor Day that's being held here at the New York Stock Exchange. Our partnership with Vale goes back for 15 years.

2 Being a public company is a journey. And the New York Stock Exchange, it's very important to us to be part of that journey with the companies that choose to list their business with us. So today, I know there's a lot to cover, and it's my great honor to introduce the CEO, Murilo Ferreira, of Vale. (Applause) Murilo Ferreira: Thank you very much for your kind words. Good morning, ladies and gentlemen. Our disclaimer as usual was a year of many accomplishments by Vale, but these were overshadowed by the tragic accident that occurred at Samarco tailing dam in Minas Gerais at the beginning of November. Lives were lost. Families lost their homes. And entire communities have been affected. And the environmental impact is equally dramatic. It will take time and a lot of help for nature to recover. We acknowledge the seriousness of the moment and we are committed to help and we are already engaged in joint coordination with Samarco. We have mobilized our internal teams along with our logistic to support the people of the affected regions. Once again, I would like to express my extreme sadness and repeat that our hearts are with all of those affected by the accident. And in this regard, I reinforce Vale's corporate and social responsibility. And Vale and BHP have recently announced the creation, on a voluntary basis, of a fund to support the rescue and recuperation of the Rio Doce River. The fund will be set up as a nonprofit independent entity with environmental focus over a long period. This fund will initially be sponsored by Vale and BHP, with the expectation of it having additional financial support from other private, public, and non-government organization. The initial amount is still being defined. Fund progress will be developed through consultation with a wide range of stakeholders and the forecast on rescue and recuperation of the river system for the long term. As of last Friday, the Brazilian government announced that they impose on Samarco, Vale, and BHP, the obligation to create and manage a fund for the remediation of the environment damage caused by Samarco dam. Vale has not been formally notified. No matter how events evolve, we will continue to care for the interest of our shareholders while providing the leadership, setting the example of choosing the best path for a solid future.

3 This is all can I say for now. I will provide you with further updates as this process unfolds. Now back to Vale and today's presentation was a year of big progress as a result of our ongoing and restructure initiatives. As I will talk about in 2016, the supply and demand outlook still remains unfavorable, but we will overcome the challenges and set the base for a more competitive company by 2017 and First of all, I would like to highlight our achievements in After many years in the planning, we open two new mines in Carajas, the N4WS and the N5S extension mine. So far this year we have increased productivity and delivered production records in iron ore, pellets, nickel, copper, and gold. Above all, I'm proud to inform you that our C1 iron ore cash cost decreased by about 40% from $21.50 per ton the last quarter 2014 to $12.7 per ton in the third quarter 2015, and close to $12 per ton in October In the first nine months of 2015, we have managed to reduce our SG&A expense by 39% and our pre-operating expense by over 17% when compared with the same period last year. Our project portfolio was simplified and we have completed three projects - Conceicao Itabiritos II, Caue Itabiritos, and Moatize II - all of them on time and under budget. In line with our divestment program, we conclude the sale of non-core assets amounting about $3 billion in Last, but not least, we have preserved a strong balance sheet with a stable debt position. Despite all of our progress, we are aware of the challenges ahead of us in 2016, as we foresee a year marked by unfavorable demand and supply outlook and by additional volatility in commodity prices. In preparation for this challenging year, we intensified the adjustment required to overcome the challenge 2016 will bring. We maintain our operating discipline, further simplify the corporate structure, and reduce costs and expenses. In 2016, we'll reduce our CapEx to around $6 billion, while we are still investing in the S11D project will also be the year we commission the S11D project, the most important project in our history. By 2017, S11D will be ramping up in the North System, we'll reach an iron ore capacity of 108 million tons per year. We'll progress with our ongoing divestment plan, which

4 includes the sale of 11 Valemax, the completion of the coal transaction, in Mozambique, the sale of our stake in MRN, the sale of some remaining energy assets, and potential restructure of our strategic position in the MRS Railway. All in, the sale of these non-core assets will help to close a potential cash flow gap in Our goal is to finish 2016 without an increase in our leverage, even with more stressed price scenario. We are confident that by 2017 we will be generating positive cash flow prior to any proceeds from additional divestment. CapEx in both capital and sustaining will decrease drastically to around $4 billion to $5 billion with the completion of our investment cycle by Production volume will increase by about 30% in iron ore and 10% in nickel and copper and from 3% to 18% in our fertilizer products. The iron ore business will reach a landed cost and expenses in China of less than $25 per ton in 2018, after adjusting for pellet sales with a strategic approach to the product quality and blending. The base metals business will steadily increase its competitive position by progressing the ramping up of the projects, the optimization of its operational flow sheet, and the further reduction of cost and expenses. The coal business will benefit from the ramping up both from Moatize and the Nacala Logistic Corridor, which will reduce our cost, leading to a substantial improvement in coal margins. The fertilizer business will increase its profitability and contribute more to Vale's cash flow by executing the sales strategy, cutting costs, and delivering replacement projects at highly attractive valuations. As a result, free cash flow will increase, allowing for the distribution of higher dividends and a gradual reduction in leverage. Finally, I would like to assure you that we remain focused and stand firm in our purpose to maintain a healthy capital structure while still investing in our key projects and prepare the foundation for even a strong free cash flow generation from 2017 and onwards. Now I would like to hand over to Peter Poppinga, Executive Director for Ferrous Minerals. Thank you very much. Peter Poppinga: Morning, ladies and gentlemen. Thanks for coming. Let's talk about the Ferrous division of Vale. We speak about three categories here of accomplishment. We have grouped them like that.

5 First of all is the project implementation progress where we delivered on two projects, Itabiritos II and Caue Itabiritos. We also have accomplished a significant cost and expenses reduction. C1 costs reduced by 44%, freight costs by 34%, and expenses by 51%. And the other one we choose as a category would be a supply chain optimization, which we have achieved during this year. It's mainly about the Valemaxes coming directly to China, loading to China, and about the Malaysian distribution center producing the Brazilian Blend with excellent quality perceived by the market. So now I have divided this presentation in two parts. We're going to first speak a little about what happened in 2015, how did 2015 unfold? And then we are going to look some years, in the second part, some years down the road and see how the competitive position of Vale will evolve. Here you can see the projects I was talking about. Remember, we had in 2014, we had built two new plants, which are not these. But these were brand new plants. What we are delivering in Itabira is the Conceicao II and Caue Itabiritos, which are the old beneficiation plants which are being upgraded in order to be able to process the compact itabirite and grind it and flotate it. So you can see on the left side the Conceicao Itabiritos II. The ramp-up has just finalized. The capacity is 90 million tons per year, and the CapEx was shy of $1 million. And the Caue Itabiritos on the right side, now it's the other way around. The ramp-up has just started and will be completed next year. And the capacity is 24 million tons per year and the executed CapEx was $900 million. Here are some pictures about S11D, the other main big project which is progressing according to plan. The physical progress in the mines is 77% on the left side. In the middle you can see the railway spur where we have 75% completed physical progress. And the railway duplication we have 36%. And on the port side, on the right side, the port, lots of activities going on. Physical progress in general around 68%. Now what we have here, we see the mine where we just said it reached 77% physical progress. And I think we have a small film, a small video [under it]. Could you be so kind and show it to us? (Video played) Carajas S11D iron project. As with the other mines at the Carajas complex S11D is an open pit mine. The system was chosen as a result of the geometry and

6 layout of the local ore body, enabling the use of a cheaper mining method with better working conditions and reducing potential risks for workers. Mining operations will take place through an in-pit crushing and conveying system. The so-called truckless system, which was developed in the course of three years of planning from 2006 to 2009, and since then has been constantly enhanced through studies and detailed design work. Extraction starts with the fracturing of rocks using explosives, but without them being thrown into the air in order to avoid endangering the systems machines and operators. Large excavators will then break up the fractured rocks in an extensively planned logistics operation, which includes alternating shoveling between the right and left edges of the rocks and cutting of benches into asymmetric petal shapes. This process also uses advanced technological resources to enhance automation such as return movements of the bucket to unload into crushers. This will guarantee minimum effort and maximum output and operations. The removed rocks, both iron ore and waste, will be deposited into mobile crushers called mobile sizing rigs to be broken down into smaller fractions suitable for processing in the plant or disposal on stockpiles in the case of waste rock. The truckless system also uses equipment known as mobile belt wagons to extend the reach of the crushers to the conveyor belts, given that in most pits, the excavator and the crusher are not on the same belt level at the pit face. Despite being huge, these mobile belt wagons will move along the site as excavation advances in order to maintain their position next to the excavator and guarantee a continuous optimized production flow. In the S11D project design, alternate excavation on benches is planned above, below, and on the same level of each belt before relocating it through a so-called track-shift operation. S11D will have simultaneous operations at four pit faces, with the ore and waste rock being distributed in a transfer house. Four belts from the pit faces will converge there and three belts will leave the transfer house, one belt to the processing plant and two belts to the waste rock pile. The waste rock pile will be made by a machine called a mobile tripper and spreader. The tripper will take the waste rock from the belt and send it to the spreader to place it on the pile using a belt boom.

7 Carajas S11D iron project, a new front in Brazil's sustainable development. Vale for a world with new values. Peter Poppinga: Okay. So this is then another picture. Now we are looking to the plant. Please remember that the primary crushing is done at the mine in the truckless system you just saw. So the ore comes actually from here from the left, from the mine with a long-distance conveyor belt, and then feeds into the secondary crushing plant. Then you have the tertiary crushing plant and the secondary screening plant and all the stockyards below. All the modules, by the way, are already on site, which makes it easier for us to get some more momentum in the construction. Here a picture of one of the bridges over the Verde River, one of the main spur. In here you have some picture that the Pier 4 for North Berth construction. And you see also lots of activities going on. So the Carajás S11D project's going very well, as I said, below budget and just on schedule. Here let's come then back to the cost and expenses reductions. And what we are doing here, we are comparing the end of 2014, and we are including October here, which was not released until now. It's new data. So what you can see, on the C1 cost, that there is continued strength, 12.7 was the third quarter achievement and cost coming further down to The same happens to the freight cost, from 21.7 to 14.3 in October. And again, there is an evolution from the third quarter to the October month. And expenses and royalties, we had a small seasonality effect in October, but in the quarter, the downwards trend will continue. All this was achieved, you will see it in a moment, it was achieved not only because of exchange rate which are favorable, but also because of real cost reductions. Next slide talks about the landed cost in China. And you can see again, so we are comparing the fourth quarter of 2014, third quarter, and October. You can see the C1 cost we just talked about. But what you can see in the circles next to the numbers are actually figures in BRL. And here you can see that in BRL our costs are coming down quite significantly. So it's not only exchange rate based. The freight rate we already talked about and expenses and royalties as well in the previous slide. Now you have here the higher Fe content and better mix coming through the new projects through better mix. And this is a credit in terms of cost.

8 And you reach then a number of 32.5 in October, 34.2 is the cash cost landed in China for the third quarter. When you do the pellet adjustments, which comes in as a credit as well, so it's equalizing the whole entire Vale production, and the pellet margin equalized to the whole Vale production, you get another credit of around $2. So this is the situation when you check on where we are currently. And if you check on from the EBITDA perspective, it's also interesting chart to see that, of course, comparing the first nine months of last year and the first nine months of this year, it's obvious that this huge price drop we couldn't make up, this couldn't be compensated. But if you look carefully, Vale generated $2.1 billion in EBITDA through its own initiatives, independently of foreign exchange, based on cost reductions. So if you take the volume increase, the EBITDA increased because of volume increase, which is actually also fixed cost dilution and additional revenue, and then you add this to the net cost reductions, which are written here, all this together, gives you the $2.1 billion I was talking about. If you take out the volume increase, even though then you see that roughly almost $800 million were reduced in an effort and were taken out of the business as real productivity gains, as real cost reductions. Now, just some examples here. I will pick two of them to show how our productivity increased. If we look to what we are doing with conveyor belts, we are replacing lots of trucks by belt conveyors in the Carajas Itabira region. I show you the next slide. Here you see Carajas, you remember the N4W South mine over here, which is actually a little far away from the center of our plans. So instead of having trucks transporting the ore from this region into the crushers, we are constructing this green conveyor belt which will reduce our cost significantly. Coming back, there is another one I wanted to talk about which is the third one, optimization on the mine and haulage truck capacity. So when you need fewer trucks, it's easy. You need less trucks when you have a lower strip ratio and when you put conveyor belts in. That increases our availability. And why do we have a lower strip ratio? There's mainly three points. Remember, in the past compact itabirites were a waste, now they are becoming ores because we are grinding them because of the Itabiritos project in the south. We got the new licenses in N4W South and N5 South. This also reduces the strip ratios. And of course, we are practicing different cut of grade like everybody because of the dramatic change in the price environment of iron ore. But all those strip ratio changes are very sustainable and are there for the long run.

9 I now want to show you one success in Malaysia. You know that Malaysia started up last year. This year we are already at two-thirds of capacity and next year we will be running at full capacity with 30 million tons a year. The Malaysian facility, they blend two-thirds of Carajas and one-third of Southern System with more contaminants, and out comes the so-called Brazilian Blend, which we are branding very successfully in the Asian market. It's about distribution, but it's also about penetrating new segments in the market, and we are achieving that. For instance, in India we are selling some iron ore from this facility. Here is some quality comparison. The Carajas ore, as you know is our best quality ore. Then the Standard Sinter Feed Tubarao and Standard Sinter Feed Guaiba, you can see has a little higher silica and higher contaminants. And the Brazilian Blend is a very, very good, stable ore and with a 63.5 Fe and 4.5 silica and good alumina and good phosphorus. And interestingly, although the liquidity is still low but it's increasing now, and we were able to achieve premiums of $3 in the last quarter on top of the normal Fe equalization. So I want to now look into the future and show you a little bit what we are doing and how we think that our competitiveness will increase even further. Here I'm just listing some operational mine parameters. And we think they are best-inclass. On the left side you see, for instance, the strip ratio. We managed to bring down our strip ratio from 1.2 to 0.7 for the reasons I explained. And again, in those circles there, these are figures for And you can see that most of these indicators are being sustained in the long run. So strip ratio, you can see that we are half compared to the peers in the industry. When it comes to the Fe content, we are increasing 2% the Fe content in 2018, compared to This 2% is a lot of money. You can also see that the mine haulage distance is well positioned. And the global metallic recovery, which actually summarizes all of that, is, in spite of having -- this is very interesting. In spite of Brazil and Vale having in the Southern System and Southeastern System concentration plants and actually dealing with tailings, more than some of our competitors, when you go to the global metallic recovery where you take into account the Fe in the product, in the final product, and you take also into account the total mass you have to move, the result is very favorable.

10 But the most important thing here I would like you to take away from these graphs, which everybody can always have a little different figures and debate, is that we are showing that these are sustainable figures and sustainable cost reduction figures for the long run. Now let's talk a little about looking into the future again. We are looking at the Northern System as a whole. And we are handling the Northern System now as one system. There is the Northern Range, remember. There are the current operations. We have the Southern Range where we have the S11D starting up. And so we are treating this as one system. And what is the aim? The aim is to maximize utilization of the existing infrastructure. The bottleneck is the railway. And so what you can see here is 2015 has a capacity of of 165Mt. So those are both systems combined. There is already a little S11D in there, but it's filling the pipeline. It's not a big quantity. 180 is the magic number. 180Mt in There's already much more S11D in there, and both systems together, the railway we'll have a capacity of 180Mt. And finally, in 2018, we have a capacity of 230 million tons per year. And here I would like to give you guidance about our future production. On the left side you see the total iron ore including the pellet feed. On the right side you see the pellets. You cannot add both together. The feed from the pellet's actually included in the left side. First thing I would like to highlight, first thing, we have not changed our guidance. Our capacity continues to be 450 million tons per year. We are building and finalizing a project in order to get there. So end of 2018, we will be at 450 million tons per year. It is unchanged. And if we go there, you'll see there is a range. If we go there and how much we go there depends on our margin optimization, continuous efforts we are doing. It depends on market conditions of course, and it will depend on strategic considerations. Now, the second guidance I would like to give to you is in the short term and which is the So 2015, it will be 340 million tons like we gave the guidance last year. In spite of the Samarco incidents, we are going to get there. In terms of 2016, there will be, you remember the guidance last year was 376Mt. This was now reduced to 340Mt to 350Mt. How do I get there? We have 340Mt this year, remember. We are adding 40 million tons of capacity because of our Southern System projects and because we are increasing our Carajas production. So in Conceicao Itabiritos, we are adding seven million. In Conceicao II we're adding six million. The North range, we're adding 20 million, and some others.

11 But then you have to deduct our production loss from Samarco, which is around 16 million. And then you have to deduct the depletion, which people normally tend to forget, which is around 14 million. So are adding 40 million. You are taking out 30 million. And so what we think we will go to 350 million tons. But one thing is also important to say, that if we are taking out eight or nine million tons of Samarco run of mine which has a very low margin, and if we are increasing Carajas fines, which has a much higher margin, the overall margin of the 350Mt compared to the 340Mt will, of course, increase. And on the right side, the production increase in pellets is -- the last year's, the increase, is our plan if the market is right, is our plan to bring back the Vale pellet plants, number one and number two, in the Tubarao region where we need some sustaining investment to be done. But this we will decide when time comes. Here, just to speak a little bit about S11D in particular, you already saw that we were able to reduce the CapEx from 19.7 to This is a trend. And on the C1 cost of S11D, the current Carajas is running at a little less than $10, $9.70 in the third quarter. And we have revised our forecast for our S11D cost to $7 a ton. Now let's take the C1 costs all together and look at the system how it is today and how it -- when I say today, it's the first nine months of 2015, and how can we compare that to Why 2018? I'm always talking 2018 because 2018 the S11Ds will be almost at full capacity. So you see that the Northern System today has 12.7, the C1 cost of It goes down to 8.8. The Southern System will evolve from 17.5 to And the southeastern system from 12.5 to What are the big actions behind that? There's lots of activity here. This is not a paper exercise. First of all, when you do truckless, you have a lower cost. Of course, the economy of scale is playing a role here. You get fixed costs diluted. We have optimized all ore mine plants, as I told you. We have different cutoff grades now, and we are also doing offshore blending. And this is very important because when you blend in Malaysia or even in China, you can optimize your upstream value supply chain, value chain, and mine in more favorable way in the Southern System, mainly in Southeastern System. Strip ratio down 0.5 means $400 million a year less cost, by the way. Labor productivity, we are increasing our labor productivity. We are going from -- to run S11D, we have to hire 2,000 employees. But we will keep our workforce constant in

12 relation to what we have today. We have 48,000 employees in the iron ore. And this will be kept constant by transfers of people and by natural turnover. So we are not going to increase our employees, and so productivity will go up. As I told you, we'll have a higher Fe content in 2018, 2% higher Fe content. Under today's prices this gives you another $600 million additional revenue. We are working on lots of Fe reduction in tailings and, of course, the automation pieces there and is evolving fast and also adding to our productivity gains. So 10.4 is the number for C1 in 2018, a reduction of almost $5. Now, if I can put all this together in the new cash landed cost in China. You remember the previous chart we talked about the Now what we are seeing here is So the 34.2 compares to the All this, by the way, is based on an exchange rate of 3.8, which is pretty much what we are seeing today. So today and 2018, we are basing on the same exchange rate. This means a reduction of almost $9. We talked about the 10.4 in C1. We talked about the freight at 13.7 is based on a bunker oil of US$240. And some more increased volume to the spot market. And of course, the bank is helping us. But there's lots of other activities. So the new generation of Valemax which is coming, they are more fuel-efficient. We can have a higher speed in loading. They can enter direct to China. And there is lots of other optimizations. For instance, the floating cranes we have today, the transfer station in the Philippines, we don't need them anymore, and they also will be reduced, and lots of other activities. We have SG&A, and expenses and royalties, there's little bit of SG&A still to be done, to be reduced. And we will have less pre-operating expenses, because today we have lots of pre-operating expenses interfering in the existing production. This will be going away. So you will have a gain there, too. And on the quality it's higher if the mix and the premiums are increasing on the Brazilian Blend, for instance. I just want to finalize with this chart and state with any of the pellet adjustments brings it under 24, cash cost landed in China. I just want to finalize here and say that with all these actions together, we are actually regaining and we are getting our competitive advantages back we had in the past which are we always were more competitive in our C1 costs than our main competitors abroad. And this is now being reestablished. And we always had better quality of ore products. And this is now being reestablished.

13 And on the freight differential, what matters is the differential between Brazil, China, and Australia, China. We are reducing dramatically this freight differential because of our shipping strategy. In the past, this differential was $13, now it's going to be around $8. So there's $5 difference. This differential is very important for us. Last, but not least, the famous cost curve, always a big, big item of debate. This is a cost curve including sustaining CapEx because I think it's important. Lots of companies are stating numbers which we cannot find in reality. But this doesn't matter. They are all here. Technically, as you can see, depending on the demand you put in here, technically speaking, the price should next year be around $50. But we all know that today price is much more sentiment driven and financial markets driven than fundamental driven. So, but I'm not here to talk about prices in this case. What I wanted to show you is that Vale integrated and non-integrated systems have a very different position in the cost curve. What I call Vale's integrated systems is the Northern System and the Southeastern System because we have control on the railway, on the port, and it's very efficient. What I call the Vale's non-integrated systems are the Southern System where you know that the railway is not ours, and we have also some public ports. So what is obvious here imagine now that S11D comes in, because this is 2016, there is no S11D yet. S11D coming into this will, of course, shift the Vale's integrated system much more to the left side. And of course today, our focus -- so this is a done deal. This will come -- the focus of Vale today is in Vale's non-integrated system where we have lots of optimizations to do and are doing it, and we think we can be reducing the system landed in China by $4 to $5. That is it. I'm not sure if people realize when they look to a cost curve like that, that what Vale has done with the S11D investment is actually investing on the left side of this cost curve. And because of depletion and CapEx constraints, most company from now onwards will invest into the right side of the cost curve because it's more brownfield. And so this is a big difference. Vale has invested on the left side. From now on and what I'm seeing is people investing on the right side. So although the cost curve today is flat, it will steepen. It will steepen again because of what I just said. So I think we know that Vale's a little behind in investment cycle today. But because of this effect, I think Vale will have an advantage down the road and be in a very competitive position in one or two years. Thank you very much.

14 Jennifer Maki: Good morning everyone. It's my pleasure to be here today to update you on base metals. And I don't have to tell you it's a very challenging price environment that we're living in right now. Rather prices are high or low, but what really matters is the assets you have. And we believe in base metals we have some of the best assets in the world. But having great assets is only half of the story. It's what you do with those assets. And I hope today I'll convince you that we have great plans in base metals to weather the current storms we face and emerge stronger. We've achieved some significant reductions in terms of costs and expenses. And I'll delve into those a bit more on the next slide. But first, I thought I'd comment on our production increase, which has increased 25% when you compare 2012 production to our 2015 estimate. And really, this reflects the ramp-up of our Onca Puma project, the continued ramp-up of our Vale New Caledonia project, and this year we began ramping up Long Harbour, which will produce 10,000 tons in Similarly, our copper production has increased by 55%. This is largely driven by the ramp-up of Salobo, which Salobo will achieve its nominal capacity this December. In terms of our nickel unit cash cost, since 2012, it's decreased by 35%. And in terms of the nickel unit cash cost, what we've included here is our nickel unit costs at all our operations, including Onca Puma, including New Caledonia, and Long Harbour. And for those operations which are in ramp-up, it's the full cost, so what's in cost of goods sold and also what's in pre-operating. And we've netted against that the byproduct credits we receive primarily Sudbury and Voisey's Bay. This reduction that we've achieved is partly due to the increase in production and the dilution of fixed costs, cost reductions and austerity actions we've taken. And I'll speak to some of our plans in that area in 2016 in a few slides. We've benefited from currency devaluation. Approximately 50% of our nickel unit cash costs are denominated in Canadian dollars, and the Canadian dollar has depreciated 21% since And also lower oil prices. We've had some upward trends against these benefits, and that's essentially the byproduct revenues. Copper prices have decreased 30% and platinum prices by 34% since And in 2015, we brought on 30,000 tons of production from Vale New Caledonia, which has a unit cash cost greater than $20,000 a ton during its ramp-up phase.

15 Turning to the copper cash cost, which is really a reflection of our operations at Sossego and Salobo. You've seen it fall by 64% over this period, again driven by the ramp-up of Salobo. It really is a world-class copper asset tier one producer. And obviously, the devaluation of the real has also improved our copper cash costs. It's not only our operating costs, but also our other expenses. And here I mean our preoperating expenses, other operating expenses, R&D, and SG&A. This has fallen 60% since And our pre-operating expenses are down by 400 million, largely reflecting the decrease in pre-operating in New Caledonia and the ramp-up of our other projects such as Onca Puma and Salobo. R&D is now one-third or $115 million for 2015, of what it was in And it reflects that our cycle that we had in base metals of large technologically complex projects is behind us. We've really focused the technology center on two things. One is in terms of exploration, looking at low cost CapEx opportunities to feed our operations, and the other one is to improve the operational performance in the efficiency of our operations. For example, we have a team studying the great results we've achieved in Onca Puma, where we have very modern furnaces and we're achieving world-class furnace power there. We're looking at how to apply the lessons learned there to our older furnaces in Indonesia and apply them as we have the regular cycle of rebuilds there. Our SG&A is down 50% relative to 2012, and we continue to look for ways to decrease it. We're just tying up the last bits of a consolidation of our Asian marketing units, which will reduce costs by $2 million per year and decrease our workforce in Asia in terms of marketing by 30%. We're centralizing them in Singapore and we've relocated our local sales in the country to the plant. In terms of our operating plan for 2016, our plan is really very simple. We need to do better tomorrow than we did today. We need to do better next week than this week, next quarter than last quarter, and next year than in And I'm going to just give you some highlights of some of the things we're working on. In Sudbury, probably midyear we really took a hard look at our expenses in Sudbury. And it struck us that we weren't seeing the reductions in our supplies and services that you would expect in this market. And so in late September, we called all our vendors in Sudbury to a Town Hall meeting. And we said, you need to do better for us. We have strong partnerships with you. It's a challenging market. And we need to see better pricing from you. But also, if you're seeing opportunities that we're not taking advantage of in our operations, let us know.

16 We got back together with the vendor community in mid-october and we received over 200 proposals on ways to reduce costs in Sudbury. And we've worked our way through some of those proposals, and it takes time because you have to look at the safety impacts and the operation impacts of each of the proposals. But we've set a goal to take $25 million from our supplies and services in And I would say some of the ideas we've received relate to substitution for lower-cost products, better unit pricing, also looking at the terms of your storage capacity and the frequency of delivery. These are all things we're looking at. And we haven't completed going through the proposals. But against that $25 million goal, already we've identified $8 million in savings. In Long Harbour, and I particularly like this one because often in a ramp-up operation you're just focused on production. But the team at Long Harbour is also clearly focused on reducing their cost base, even in its early days. There we have diesel-fired boilers that we generate steam for heating and processing. And the load and heating requirements varies very much between winter and summer. So we've identified a number of projects to optimize the operation of the boilers. And this will save us over $4 million in diesel costs in So one of the modifications we're doing will allow us to reduce the minimum operating rate of the boilers in the summer when the demand is low. In Onca Puma, this quarter we begin ramping up the modifications to our calcine transfer system. This will allow us to feed the furnace with two kilns, resulting in increased production of 2,000 tons in 2016 and 3,000 tons in 2017 when it's fully ramped up. This will lower the unit cash cost. And these modifications were developed in-house at a cost of $1.5 million. In Indonesia, the main cost there historically was oil, which accounted for over 40% of its total production cost. As many of you have heard me speak, in 2013 we commissioned a dual burner system in the dryer and we've been very successful, able to convert over 90% of the oil traditionally consumed, to coal. In 2014, this yielded savings of $60 million. And in the nine months ended September, we've yielded savings of $23 million at our Indonesian operations. Obviously, we have lower commodity prices in We also have kilns in Indonesia which use two times the oil as the dryers. So if we can achieve the same conversion rate in the kilns as we did in the dryers, there's double the savings.

17 So this past November, we began the same technology on one kiln. And the kilns have two burners. And we'll commission the second burner in the kiln in February. Assuming success, we look over the next five years to implement this on the remaining kilns. In New Caledonia, the best way we know to reduce cost there is to increase production. VNC will deliver 50% more production in 2015 than it did in And our plan for 2016 is to increase its production by 50% again. In New Caledonia, we have a high ratio of fixed costs to variable costs. So with this expected increase in production, you'll see the unit cash cost fall from over $20,000 per ton today to $13,000 per ton in However, this isn't the only route we're looking at in New Caledonia to reduce its costs. We're re-examining all our contracts and setting aggressive targets for cost reduction. We recently negotiated a new contract for camp and catering, and we saved $8 million per year. We're working on similar renegotiation of maintenance contracts where we believe we'll save $6 million in In addition to those cost reduction and efficiency areas that we're looking to improve, we have some other initiatives that are going to help us generate an increase in our cash flow and improve our competitive position over the next few years. The first one is the optimization of the North Atlantic flow sheet. And this is really speaking about the transformation of our Canadian operations. It's a multiyear project that will complete by the end of Starting in the western part of Canada in Manitoba, we will progress the work this year on the pre-work for the concentrate. And this is part of the preparations we need to do to transition our Manitoba operation to a mine mill operation at the end of The concentrate produced at that time will be available for processing in Sudbury and in Long Harbour, and also for sale to market. In Sudbury, we continue to progress our clean air project which is our Atmospheric Emissions Reduction project, which will prepare us to meet new SO2 air emissions, ground-level SO2 concentration, and particulate emission limits. We're targeting an 85% reduction in our emissions and a 35% reduction in our dust and metal emissions. The added benefit is a 40% reduction in greenhouse gases. Related to this project is our move to a single furnace in Sudbury. And this single furnace will have a 25% increase in capacity relative to the furnace today. We've stretched out the move to a single furnace. We are originally looking to do that in the fourth quarter of But we've reassessed the life of the furnace and also our

18 operation within the limits, and we've now scheduled that for the end of the first quarter of The other part in Sudbury, there's two other parts of our transformation in Sudbury, and that would be we're looking to increase the amount of Sudbury ores processed, essentially reducing the external feeds there. We make much more money processing our own ore than we do others. And we're also focusing on more selective mining. With the move to one furnace, you will see an increase in the amount of copper concentrate produced. Currently we scalp about 45% of the copper to concentrate, and that will increase to about 75% with the move to one furnace. Essentially, we're making more room in the furnace for the higher margin nickel. And by removing the copper circuit beyond the mill, we'll reduce our direct operating costs in Sudbury by $50 million. The Long Harbour ramp-up is progressing well. As I mentioned, in 2015, we'll deliver 10,000 tons of nickel from that operation and we'll double the production in Early in Q1, we'll complete the tie-ins that will enable Long Harbour to operate solely on feed from Voisey's Bay. Recall today it's operating on a blend of feed from Indonesia, as well as Voisey's Bay. These tie-ins will also result in a pure nickel product to market and a salable cobalt product to market. As Long Harbour ramps up over the next couple of years, we will realize the benefits of a significant reduction in working capital. Recall today that we're sending the concentrate from Voisey's Bay across Canada to Sudbury, and to Thompson. And it'll go direct to Long Harbour. We also have a more direct route to market. And we can't forget that Long Harbour has zero SO2 emissions. Turning now to New Caledonia, and I'm not sure if this qualifies as the elephant in the room or not. Everyone knows it's been our most challenging nickel operation. But that said, we've made some good progress in We've increased our production by 50%. And I'm happy to say, in October, we achieved a new record for monthly production, achieving 3,400 tons in the month, or 72% of nominal capacity. And we expect to achieve 75% by the end of the year. And I think it's important, in that 3,400 tons that we produced, 87% of it was nickel oxide versus NHC. In 2016, we expect again to increase production by 50% or a target of about 46,000 tons, which would represent just under 80% of its nameplate capacity for the year.

19 We expect a unit cash cost after the cobalt credit of $13,000 a ton, and long-term cost around 10,000 per ton. And while we've made a lot of progress in 2015, there's a couple things about New Caledonia. While it represents one of the largest untapped nickel resources in the world, as I mentioned, it's been a very challenging place for us to operate. And we're not alone in the challenges we have in New Caledonia. Despite the progress, our patience, and we know your patience is wearing as it relates to New Caledonia. And clearly we're analyzing all the options that are available to us with regards to this operation. But besides that and what I told the operations when I was there earlier this month is, we need to see results. And in terms of those results, those planned cost reductions really need to be achieved. And those will come with productivity improvements. A simple case in point is when we benchmark the performance of the mining operation in New Caledonia against our operations in Indonesia and Onca Puma, which are really quite similar, we see there's lots of room for improvement of the productivity of the mine. And I know the team there is working to deliver that in We're also working to improve the plant reliability. And we have some really great runs in New Caledonia. And then we achieve a new production level and it presents a new bottleneck that takes us a week or two to work our ways through. And so we're working to minimize that and to really have the preventive maintenance plan down. We're also looking for stakeholder support to continue to improve. And this includes the various governments, the communities, the vendors. And we don't shy away from admitting we've made mistakes in the past in New Caledonia. But we can't be criticized for our lack of commitment or our lack of effort. And it's the same commitment and effort we need to see from the stakeholders. In 2015, we've made great strides, but there's room for further improvement in And as New Caledonia represents our nickel operation, our highest cost nickel operation in base metals, it needs a robust nickel environment for the future. Turning now to Indonesia, really here it's about preserving our option for staged growth in Indonesia in the future when the moment is right. We've completed our studies for our Indonesian growth project, which would increase the production of nickel matte from 75,000 tons a year to 90,000 tons, through adding an additional dryer and additional converter. This project leverages our extensive resource base we have in Indonesia, including the Sorowako outer areas, and also leverages our competitive advantage in Indonesia in terms of our hydroelectric generating capacity, with power costs averaging just over $1 U.S. per megawatt hour.

20 And while this project is a commitment under our recently negotiated contract of work, we have some flexibility in terms of when we would start the project. As I mentioned, the slope of ramp-up continues to go well. And one of the studies that we're going to undertake, and it's only a study, in 2016, relates to the options for further growth in Salobo. And the concept would be to build an additional concentrated capacity there, which would allow us to leverage our learnings from Salobo I and II, and also the stockpile that we're building during Salobo I and II. Lastly, which makes this project particularly attractive, is in 2013 when we did the Salobo Goldstream transaction, we pre-negotiated a payment of up to $500 million depending on the timing and capacity of Salobo III. So once we complete the transformation of the Canadian ops and we ramp up at Long Harbour and New Caledonia, you'll see here our nickel production stabilizes at about 320,000 tons per year. From there, the future will depend on the market conditions. We have lots of options, given our enviable resource position. We're ready to go with a second furnace at Onca Puma, if the market conditions present itself. And also, we have further growth in Indonesia that's available in Pomalaa and Bahodopi. Our copper production you see continues to grow with the ramp-up of Salobo. We'll continue to focus on delivering efficiency and cost improvements, and this should prepare us well for the medium to long term where the nickel and copper fundamentals look strong and we can take full advantage of the optionally we have in base metals. And in the short term, given our top-tier assets and our action plans, we're well positioned to capture any upside from even moderate increases in nickel and copper prices. Make no mistake about it, we're doing what's required to address the conditions of today and to prepare us well for success when the markets return in the future. Now I'll pass it on to my colleague Roger, who will speak to you on fertilizers and coal. Roger Downey: Thank you, Jennifer, and good morning to everyone. I'm better known as the guy with all the little businesses. And I know that a lot of the analysts' radars don't really pick up on this stuff here. But bear with me. It's going to be short, hopefully sweet, and display some good upside. Beginning with the fertilizers, you're all familiar with the story about the Ugly Duckling. Well, this is another version of it.

21 2015 was a really good year for us. We were in the right place at the right time. The past three years, we've been doing a lot of homework, really getting more out of our assets, reducing costs, and it really presented itself, all about how it presented itself in The other thing is the industry's growing in Brazil. It's one of the most promising industries in Brazil, even in the scenario we've got today. Brazil is a place that has not just the potential, but it has tradition and it has technology and it has competence in agriculture. So we think it really is a country that can respond in a big way to the food challenge around the world. We expect we're working with a factor of about three times in terms of growth in acreage in Brazil. However, we only use up 58 million of the nearly 400 million acres of land available to agriculture, without cutting down forests or invading beaches or invading heritage sites and things like that. Over the past decade, we've seen fertilizer intensity grow significantly. We expect that to continue to grow, perhaps more modestly going forward, but it will continue to grow, especially because, as you'll see later on, the farms growing into the Northwest of Brazil where land is poorer. We have leveraged on our location. We have leveraged on our captive logistics to deliver competitively and just in time to our customers. And that's paid back big time in And then we're a business that is in a different stage of our other businesses and has different cycle. We expect demand to grow and hopefully prices will also grow with it. Just a bit more detail. I'm sure you've all seen this. But we've seen in the past five years consistent growth throughout the various commodities in which Brazil is a leader in agriculture markets. Brazil is in the top three of top five just about across the board in terms of agricultural commodities, with the exception of wheat, perhaps. And we are the biggest soybean producer. Just to give you an idea, one of the states of Brazil, the Mato Grosso, last year produced about 45 million tons of grain, and the forecast for 2020 is for 70 million tons of grain. So that's pretty phenomenal growth. We've seen steady growth in fertilizer deliveries over the past five years as well was a little bit of a disappointment but not because the demand wasn't there, because of all the uncertainties in Brazil regarding the exchange rate. Of course, farmers, who are very dependent on exchange rates, not just in the purchasing of their fertilizer but also in the sales of their grain, were a bit confused about the scenario. The other thing is that Brazil reduced its availability of agriculture credit to farmers in So farmers were late placing their orders this year, so that's constrained. Well, it focused a lot the volumes in a very short period and the logistic constrained the deliveries.