John Tuttle: Good morning, everybody. I hate to break up the buzz in the room here, but we want to stay on a tight schedule.

Transcription

1 Vale Day, New York, 2016 Tuesday, November 29, 2016 Officers Murilo Ferreira; CEO Clovis Torres; EO, Human Resources, Sustainability, Compliance, General Counsel Peter Poppinga; EO, Ferrous Minerals Jennifer Maki; EO, Base Metals Roger Downey; EO, Coal, Fertilizers Luciano Siani Pires; CFO Participants/Analyst John Tuttle; New York Stock Exchange; Global Head of Listings Jon Brandt; HSBC Andreas Bokkenheuser; UBS Alex Hacking; Citi Tony Rizzuto; Cowen Thiago Lofiego; Bradesco BBI Marcos Assumpcao; Itau BBA Leonardo Correa; BTG Pactual Felipe Hirai; BoA Merrill Lynch John Tumazos; John Tumazos Very Independent Research Bruno Giardino; Santander Mark Hassey: Oaktree Capital Management; Alfonso Salazar; Scotiabank Danny McConvey; Rossport Investments Denny Parisien; Schroder's Investment Management Presentation John Tuttle: Good morning, everybody. I hate to break up the buzz in the room here, but we want to stay on a tight schedule. For those of you I haven't met, I'm John Tuttle. I'm Global Head of Listings here at the New York Stock Exchange, and on behalf of our entire team, a very, very warm welcome to the NYC and welcome to Vale Day. This is one of our favorite annual traditions here, and you kicked it off the right way this morning by ringing the opening bell. And I'm not sure whether they told you this when you rang the bell. But on an average day, it's the most highly viewed news event in the world. So it was perfectly executed, but it was also a great way to get the Vale brand in front of an audience of global investors.

2 For those of you that have been to previous Vale Days, your surroundings may look a little bit different. We've just completed a massive renovation of the New York Stock Exchange. So this boardroom, if you were here a year ago, the archways were closed, the ceiling had been dark for 96 years. And we've invested a lot in really converting this building into the field office in Lower Manhattan for many of our great listed companies. So we're proud to have you here. We're very proud of our relationship with Vale, which dates back about 16 years. But we're also particularly proud of our relationship with Brazil, which dates back nearly a century to when we floated some bonds for the Brazilian government to help fund some infrastructure projects across the country. And since that time, we've been proud to report that we've been the listing venue of choice for every Brazilian company that's chosen to list in the United States, and led by Vale, of course. So now we're home to 27 companies from Brazil, approaching a $0.5 trillion worth of market capitalization. So we're incredibly proud to welcome you here. We're thrilled to have you at Vale Day. And I'll turn it over to you, Murilo. Thank you. Murilo Ferreira: Good morning, everyone. Thanks for coming. And it is, indeed, a great pleasure to be here again. Yesterday we had a chance to announce that we will pay dividends in This is a recognition of our confidence on the outcome of our ongoing initiatives and on the broader market outlook. It's also a demonstration of our commitment to continue to pay dividends to our shareholders. The payment is this symbolic amount. It's a symbolic amount. It does not move us from our goal of reducing the leverage in the short term. Now let's start the presentation. We have our disclaimer was an important year for Vale. And I am proud to say that we have reached unprecedented levels of operational efficiency and productivity, which enable us to reach a stronger competitive position. The improvement in our competitive position comes from some key accomplishments. First, Vale overcame the freeze of the environment license process, a first step to deliver our projects according to plan. I am proud to say that over 300 permits were granted since And these license were key to timely project implementation. Second, we delivered 18 main projects in the last five years, with the main ones concluded on budget and on time. With new mines and upgraded logistic infrastructure,

3 we managed to increase production, life of mining, and product quality, and reduce sustaining investment costs and expenses. Third, we reduced our costs by over 30% and our expenses by over 80% since 2012, despite increase in volume and inflationary pressures. And last, but not least, we focused in our world-class assets and divest almost $13 billion worth in non-core assets in the last six years. Our dedication and focus on the environment license process was crucial to timely conclude our project implementation. We're strengthening our environment teams and fostered a multidisciplinary team efforts based on collaboration, extreme focus and dedication, regular follow-up, and the utmost resilience to overcome the normal challenges of the task at hand. As a result of this process, we can see on the map, the main environment license granted in each of our iron ore production system in the past six years. The permits granted as a result of this process, such as N5 South, N4WS, and S11D, are important not only for our operations, but today also for our future. Our high quality, long lasting deposits are the base of our enduring competitive position. Successful project implementation provide us with higher flexibility and extension of the life of our mines while reducing cost and sustaining investments. In 2012, for example, we delivered Salobo, the most competitive copper project in our asset base. In 2013, we delivered Carajas Plant II, or Additional 40, and Conceicao Itabiritos. In 2014, we delivered Serra Leste, Vargem Grande Itabiritos, and a pelletizing plant Tubarao VIII. In 2015, we delivered three more projects, Conceicao Itabiritos II, Caue Itabiritos, and Nacala Corridor. And finally, this year we delivered Moatize II, and S11 mine and part of its logistics. As you can see on the right-hand side of the slide, we are concluding our investment program, having reduced our investments by 65% since We shall further reduce our investments in the coming years. New mines and infrastructure allowed Vale to increase product quality and improve price realization. Vale is the leading provider of our high quality grade iron ore to the industry, with an average grade of 63.8% in the third quarter of 2016.

4 For example, one of our products, Carajas 65%, represented about 40% of our production in the first nine months of 2016, and is realizing over $10 on the top of the benchmark IODEX 62%. This is an important outcome of our competitive position. Along with project implementation, Vale's discipline led to the material reduction in costs and expenses. Cost decreased over 30% in the last five years, despite the increase in volumes and inflationary pressures. Expense dropped over 80% in the same period. Later on this presentation, Peter, Jennifer, and Roger will give you more details on the initiatives that led to do this substantial reduction. After five years of ongoing cost discipline efforts, I can say that the cost management became part of our culture, and that ongoing discipline are constantly seeking to do more with less. The fourth pillar supporting the Company's results is the optimization of its asset base. We divested almost $13 billion worth of assets since And thus, have been able to focus on our world-class assets. The divestment program not only generated an important cash inflow during our investment cycle, but also an opportunity for unlocking substantial value. For example, the three Goldstream transaction, which amounted to over $3.5 billion, unlocked value from our high quality Salobo operation. This is an ongoing process, and we expect to announce the conclusion of other transaction in the near term. Although we celebrate the progress achieved so far, we are not satisfied. Our main focus remain on strengthening our balance sheet to reach our net debt target of $15 to $17 billion, while maintaining our commitment to shareholders' return and dividends. I am confident that more than ever, Vale is well positioned to generate great returns to our shareholders. Now I would like to hand over to my colleague, Clovis Torres, Executive Officer of Human Resources, Sustainability, Compliance, and General Counsel. Thank you very much. Clovis Torres: Good morning, everybody. Hopefully you won't hear from me today anything about new legal issues or problems. It's very good for me to be here to say something more positive, especially sustainability is one of the Vale's pillars. I've been handling part of the governance for a while, especially the anticorruption effort. And I have to say that we're very happy that we're not involved in any of the ordeals that are taking place in Brazil at the moment. We're about 150,000 employees in 30 different countries.

5 And we're very happy and proud to say that we consider ourself a company of integrity. And the sustainability's part of the KPIs of every operation of Vale. Each employee has in its KPIs that will generate part of their remuneration, the KPI on sustainability. Each one has agreed with the business areas, and they are followed up not only by our area, but also Murilo and the Board of Directors of the Company. In terms of communities, what we can say is that 70% of the workforce is now engaged in the local communities. It's extremely important to understand that, because at Vale the size of our projects when we come into certain communities, we may destroy it or actually help them grow. So we've always chosen the second path. And [in a sense] the main thing is labor, is avoid people coming from outside to add to the infrastructure needs, hospital, safety, and the like. So we've been working on training the local workforce, preparing suppliers locally as well, and to avoid people coming from outside and create trouble in the cities. As to the environment, we have a matrix that composes 25% of renewable energy. I'm going to talk a little bit more about energy soon after. We have our own hydroelectric plants and power plants and also eolic energy suppliers. So this has been very important for us. Also, we have 280,000 squared kilometers of natural areas preserved. Those of you who have had the chance to visit Carajas noticed that we have a very, very strong presence there, but not only in the mining, but also in the preservation of nature. The only part of the natural forest of that area, the Amazon Forest, is the one preserved by Vale. It's like an island in the midst of the forest, where it's all surrounded by cattle ranchers. And you will see that they're all devastated except for that very, very big part being preserved by Vale. In terms of safety, I'm also going to show you a shot that explains what have been happening since Murilo took over in 2011, and the very, very strong reduction in the number of accidents at Vale. And we have this target that is zero harm. In terms of health and safety, you can see we have a total of 18% reduction in injury rate and the risk management is 17% reduction in the number of incidents. The environment, 85% recycling and reuse process, we've been using more and more the dry processing to avoid use of water, and, consequently tailing dams. 19% reduction in particulate emissions in pelletizing plants. There's been an effort in the state ofespírito Santo, very strong from our side working with the authorities to not only reduce

6 emissions, but to test new technologies to avoid adding to the already strong presence of particulates in the environment. As to social and environment investment, we have approximately this year $800 million, not only in those that are mandatory according to the laws for the purpose of licensing, but voluntary investment. And 8% purchases locally. This is still not strong, but it's part of the works that procurement is doing, is to bring suppliers to the region where we are working, not only during the construction phase, but afterwards. As zero harm, you will see that we fell from a 3.3 in 2011 injuries frequency rate, it's per million hours worked, to 1.8 this year in This has been a very, very strong change in culture. But we set up the golden rules for health and safety and what we call is one of our values that is to genuinely care, is that the colleagues helping each other, not only using the channels of communications when they are forced to do something that they are not willing to do, but also to help the colleagues on a daily basis to avoid accidents. This has been very, very strong in our Companies, very, very successful. Environmental licenses, you will see that has been a constant achievement of our Company. This year, because we have reduced the number of projects, we don't have many new licenses to ask. But the government has been responding very quickly. Hopefully by the end of this year we're going to have all that we need for the LO, the operational license for S11D. And talking about S11D, this is really a new benchmark in terms of sustainability. We use 93% less water than common practice in the industry. Not only is it drying process, but also the reuse from that 7% that we use, 86% is reused in our activity. Also, the truckless system reduces a lot with 37 kilometers of conveyor belts, reduces [a lot] emission of gas. It's a very, very low carbon emission. And also, the saving of energy, 18,000 megawatts of electricity saving per year in that project. So it's definitely a benchmark in the industry. And in terms of energy, we hold 55% of Alianca, which is a joint venture with Cemig. And through that and through some of our own hydroelectric plants, we guarantee at least 51% of our electricity needs. And through what we call self-production status, we have a roughly $60 discount to the energy common practice in the market as a self producer. So this is extremely important for our productivity, for our operations and, consequently, to our cost. Though Alianca holds 700 electric plants, about 1.2 megawatts installed capacity. And 100% of the energy is sold through long-term power purchase agreements. And that guarantees to us an average of 652 megawatts of energy per year.

7 And last, but not least, it's priority agenda for us is to deal with the Samarco accident. Renova was the foundation that was established after the settlement agreement with the Brazilian authorities. We've been working very hard to remediate the damages and also compensate the communities. This is ongoing from day one of the accident, but formally with the authorities, this started with the foundation, the three companies, Samarco, Vale, and BHP, are working together to provide every source of funding necessary to the foundation to reconstruct and remediate any and all damages from the accident. There are some images of what they've been doing, not only infrastructure, but also from the environmental standpoint, reforestation, bringing animals back, fishes at the river. And put in, if not the same way, in a better way that the river was at that time. So lots of work, lots of time has been given to that project, to that situation that everybody heard of and everybody's aware of. But we're trying as much as possible to remediate sooner than later. But it will stay some years to come with us, and we certainly put that in the top of the priority for Vale. Now I'm going to pass to Peter Poppinga, Executive Director for Ferrous Metals (sic - Minerals, see slide 22 of 85) Peter Poppinga: Morning, ladies and gentlemen. Let's talk about iron ore. We have divided this presentation into three parts. The first is to show the achievements in The second part you will see our initiatives going forward to increase the competitiveness of Vale even more. And the last part we'll show you production guidance for the midterm. So, here are the main accomplishments. But before we go into that, I just wanted to say that we are, in terms of health and safety in iron ore and Vale, we achieved a 20% reduction on our lost time injury numbers. And we are very happy about that. Now going into the chart, there is, of course, the project implementation progress. S11D is ramping up, is commissioning, and will ramp up now from December this year, onwards. It's going well. 85% on total physical progress. But let's not forget about the other projects we have delivered the last years, which are the Itabiritos project, for instance, where let's recall Conceicao I and II, Caue, and Vargem Grande. All of them are now between 90% and 100% of the capacity, except Caue, which recently only started up, and we are at 70% there, soon arriving 100%. There's other gains of productivity. We are going to detail that during the presentation. And significant margin improvements, I think you all know, you have followed that from 2014 to 2016, our cost, our C1 cost in Brazilian reais, the local currency, they have

8 decreased actually by more than 20%. And also ore cash breakeven is now 50% lower today when compared to And price realization has improved as well to110%. Competitive reference, we are now going to look into that as we go -- but before I would like to show you some pictures. This is a picture right after the secondary crusher in Carajas, in S11D. You see already some ore being commissioned or produced. It's 96% complete. And as I said, we are going to start up in December Then we see here the railway spur. There the progress is 59%, okay. But from the 570 kilometers, more than half is already duplicated. So it's a very good process as well. And then here you can see the port with the new berth, Pier IV. We have loaded already several shipments, not, of course, with S11D ore, but with Carajas ore. And including one Valemax already was loaded as well, everything was okay, 93% of physical progress. And we stick to the plan that in January 2017, the first S11D ore will be exported from this terminal. Onshore, we have other things going on. Seven out of six car dumpers already operational, five out of six stackers, five out of six reclaimers as well operational. So things are very well in the port. Now let's talk then on Carajas. We have achieved a lower C1 cost there, comparing last year to this year, 13% less in local currency. And we are using, as you can see, we are using more and more the ores from the new mines, the N4W South and N5 South as well. And deposit was 50%, now we are using two-thirds of the production come from these ore bodies. This is because simply the cost is coming down because those already, they have low strip ratio by nature and because now our mine fleet can develop at much better productivity, because we can actually allocate the equipment where the optimum allocation should be. Here I would like to recap a concept that we have talked about in the recent quarterly results. It's about global recovery. What is the global recovery? This is the total amount of products you sell, the saleable products divided by the amount of waste you move and the run of mine you move together as tailings, right. So you want to maximize your total products and you want to minimize the waste you move and you want to minimize the tailings you dispose. So how would Vale decrease the strip ratio in a sustainable way? I'm stressing the point sustainable way. This is very important. So in part because the new mines mainly in the northern region, they have, by nature, a lower strip ratio. In parts, as well mainly in the Southern and Southeastern System, it's because we are simply speaking the projects be implemented. We are transforming waste

9 into ore. There's lots of compact hematites, compact itabirites which we couldn t treat. Now we have the grinding facilities, the crushing facilities, and the beneficiation so that waste can actually become ore. And this is what exactly the combined factor of that is reflected in this graph and, of course, has a direct impact in our operational costs. And what about the generation of tailings? That's the other pillar where we are going more and more into dry processing, and then you generate more tailings as well. That's going on. We have come a long way. As you know, in 2014, our C1 cost was more than $20. I think it was $21, $22. We are now at the level of $13. And in spite of the recent local currency appreciation, as you can see, we are succeeding in keeping that level of $13. You see on this chart the exchange rate by variation, $1, and compensated by global recovery, fixed cost dilution, and productivity gains. And I think that's very important to keep that level. There's also on the price realization, a progress. Measured against the 62% Platts reference grade, we evolve from 103% to 110%, when you compare the first half of 2015 to the first half of And should now we be able, after all the data are in, to compare with the second half of 2016, we all know what happened to the premiums. We will probably have a much higher price realization than this 110% we are seeing here. So if we now translate that into and speak a little about competitiveness and measure competitiveness in terms of cash, total cash generation, which means EBITDA per ton minus sustaining per ton, you can see that Vale has definitely closed our competitiveness gap we had in the past, in spite of the higher freight costs. And you can see that we increased from $13 to $22, again the same comparison of the same period. And since we already reported in the third quarter our results in 2016, on top of this little bullet there, 26.4 means Vale's results in the third quarter of Now let's look into the future, and we will speak here about mainly key three initiatives. The first one is the ramp-up of the S11D. It is a competitive advantage to have something like S11D. But it's not only about the cost reduction of the C1, which S11D will lead to, but it's also that S11D actually enables the other two lines you see there, the optimization of global supply chain and the improvement of global recovery. Without S11D, we wouldn't be able to do that. You will understand in a minute. The optimization of global supply chain is a recognition from our side that our supply chain isn't sufficiently integrated and optimized. There's two levers here. You have the efficiency gains to do. It's a complex supply chain. We have still efficiency gains to

10 work on and, mainly what people often forget, we have price realization upsides here, which we are not exploring enough. [Tell] you in a minute. The other one is the improvement of global recovery, we have talked before. And we believe in some years we will have those numbers. Remember, we were at 48%, 50%, and in some years we were between 55% and 60% in total Vale. There's one other item which we haven't put here, but it's worth to talk about, it's our competitive advantage in pelletizing. We have that competitive advantage. We have a huge big industrial platform in pelletizing. And now that we have the licenses and that we have enough feed coming from the Itabiritos projects, right, the Itabiritos projects in the Southeastern System, they produce a very pure high feed suitable for pelletizing, now we can try to increase our pellet production progressively. For that we are considering reopening some idle pellet plants we have. You know that we have idle pellet plants in the Tubarao port complex, but also, in São Luis one of both we will bring back probably. And the other one is about feeding the existing pellet plants exactly with Carajas material, because our bottlenecks is the grinding and Carajas material is easy to grind. And that means that even if you have a little higher cost bringing Carajas into the Tubarao pellet plants, you have an enormous effect in productivity and you boost your production, including to Oman pellet plants. So we are up to 25% of all the feed in the pelletizing plant will now come from Carajas in some time. Let's go through the presentation. The S11D, we already talked about it. You will see a drop in our C1 cost when it comes from 10.8 to 7.7. This is a 29% reduction. And you will also see a sustaining Capex reduction from 2.4 to 1.8. This is 25% reduction. This comes simply because the truckless operation uses less sustaining than the truck-andshovel operation in Carajas. Now, the second point is about the supply chain optimization. And here I'm talking about the first part, which is the pure operational efficiency. There are several initiatives, several examples. We have more of them. Why can we still increase our efficiency, operational efficiency in the supply chain? For instance, belt conveyors in the mines, let's start in the mines, we have already we are installing the N4W South ore body. [If you remind], it's a very, very narrow ore body, but very big. So it makes sense to place there some conveyor belts instead of using trucks. Same thing is happening in the Caue area. Minas do Meio will have a conveyor belt to the Caue concentration plant. And the same thing we are studying for Agua Limpa and also Brucutu.

11 Another one is the increase of productivity of port operations in Brazil. This is also very logical. We are talking about this later. We are decreasing the number of final products we offer to the market, and this will, of course, increase productivity at the port. And also, the simple fact that we now have more and more Valemaxes at berthing, also increases the productivity of the port. Speaking about Valemax, this is another subject, the Valemax can help discharge directly into China. Don't need a second port. Don't need a lightening anymore, so we can increase productivity there. And also, the second generation of Valemax is already being built. They are cheaper and they have less fuel consumption. And we think there's a $2 to $3 lower freight rate here. Then we have the integrated management of the freight portfolio and floating transfer stations, the FTS in the Philippines. We have two of them. They cost a lot of money. We don't need them anymore, going to scrap them. And those are the examples why we are decreasing, why we still can have a high efficiency in the supply chain. The next one is about price realization. It's also supply chain, but now focused on price realization. That's basically development of new distribution channels, talking about market capillarity and customer base, more offshore blending, even selling in RMB. That's all going on now. On the right side you see the realization of full value in use of high grade ore. As you know, our production increase will mostly come from the Northern System where the Carajas ore is a richer ore and has advantages. It's high productivity for steel mills, less usage of coking coal and less emissions during the steel making process. We also are going to strengthen our ability to capture value gaps in the market through improved management of blending optionalities. This will increase our price realization as well. And there is this opportunity to further develop the market opportunities for low alumina ore. This is another competitive advantage we have and we are not exploring enough. There's two micro trends going on in the industry. First is that the, as you know, the Chinese concentrate was shrinking through the years, and these Chinese concentrates, they happen to have low alumina. And on the other hand, in Australia, as you know, the depletion going on there, the Australian ore is getting -- there is less and less low alumina ore.

12 So both things together gives us the opportunity to develop this market for our low alumina ore and get the right price for that. This is a graph where it shows the evolution of some of our ore grades and others relative to the 62% line. Imagine the 62% is the horizontal line where the zero is. This is the 62% reference. And on the top you'll have the evolution of Carajas premiums. The second line, the blue one, is the Brazilian blend. It's actually a horizontal line on purpose. And then you will see, depending on the market, on the lower side there's the 58% grades. The upper one is the low alumina 58% and the lower one is the normal alumina 58% quality. So you see the first quarter of 2016, there was no need for productivity and there was even a silica deficit because China's concentrate coming out of the market. So no premiums. Premiums depressed. Second half 2016 until today, things changed dramatically, as you'll see. The curves got asymmetrically away from each other. There was need for productivity. And you know, we all know, the coking coal story contributing to that. The Brazilian blend, however, is kept constant. We are having a $3, roughly $3 -- it's very well established in the market. Everybody likes the Brazilian blend, and we get a $3 premium across the board. And then that's the important thing I wanted to convey to you, this message. So by keeping the Brazilian blend constant, that's our management. And by blending sometimes more and by blending sometimes less, we actually can, Vale can increase its overall margins. All these premiums and discounts happens naturally in the marketplace. It's daily tenders. It's very transparent. Nobody's imposing anything here to anybody. It's really a normal market. Next one, little bit on the pipeline on the blending, you can see on the left side that we started blending in 2015, 18 million tons. 2016, we are now at 40 million tons, and 2017, at 80 million tons is the forecast, and probably will stabilize and come to a certain level which is a healthy level in Now, what do we want actually? We want to decrease our stock level in overall Vale. At the same time, we want to blend more. And at the same time, we want to move, the stock should move downstream closer to the customers. And this, you can see on the righthand side, you can see that in 2015, only 10% were offshore, the stocks, and now in 2017, the focus is 35% offshore. The global recovery comes again. It's another lever to decrease cost. And remember, we had a 48%, 50%. Now we are forecasting 54% in This is linked to a dry processing, overall dry processing of 60% at Vale. Remember today we are at 40% dry

13 processing, going to 60%. Global recovery goes to 55%, 54%. And once we get to 70% in 2022, then global recovery will be probably between 55% and 60%. And according to the own reports of our peers, their own reports, this is not going to happen with our competitors. And they are showing much lower numbers in global recovery. Now here somehow this summarizes a little bit what I wanted to say of maximizing the global recovery. It's a very simple graph showing the Fe content, how we were planning to come back to higher levels of Fe and how we are now planning, what we are now planning to do. So by letting the quality stay at the current level and instead of trying to lift it up back to previous levels, we will still have the best average quality in the market. That's number one. And by doing that, we will have lower OpEx, lower CapEx, and postpone a lot of our replacement CapEx into the future. And all this equation together is a very positive NPV. And we're happy to say that we have no major investment, no major replacement investments to be done within the next 10 years. And, of course, should the market desire some Carajas fines, some more Carajas fines separately, of course, they can have it at any time by recognizing the right premium, of course. While this is a graph, it's a little confusing, but I wanted to say to you, forget about the left side. The left side is about dry and wet processing, but the right side is that there's two other things in our operational practice which is going to happen and which we are changing. It's about where we are going to make the final products and how many products we need. In the ports we have too many products. We are rationalizing into fewer products. And where we are going to make those products, some of them in the port, yes, but the others, since we have to blend anyway offshore, we will, in some cases in some ports, mainly Southern System, only make intermediate products at the port. This we debottleneck the port and we are going to make the final products offshore. Last, but not least, my favorite subject, depletion, I started to talk about depletion three, four years ago, and I think we underestimate depletion. What I want to show you here is that Vale, because of the recent investment we have done, the recent investments, but also because of our global recovery approach, we are now very well positioned to face depletion. In the next 10 years, we have no needs for major investment [so soon]. The left side and the right side, the left side compares the number of projects we had in our strategic plans in 2014, 2015, and now. And you'll see it's only six. This is to refill

14 the pipeline of 450 million tons. Doesn't mean that we are going to use and go there, 450 million tons. But if we do so, we need six projects. And on the right side, the six project translates into $5 billion from today until And 65% of this $5 billion is not due before So it's far away. That's why I said in the next 10 years, we will have very, very few replacement Capex to sustain our operations. Another slide about depletion, this we borrowed from JP Morgan. The left-hand side where JP Morgan showed us that the majors, the four majors, in the next five years, they need, if you add those numbers together, they need probably 170 million tons will need to be replaced. And Vale has the lowest number here, of course. But it makes also sense to look what is happening in China. And, of course, we don't have precise numbers out of China. We have some market intelligence, but that's not official numbers. And so what we can show here is that in China you see a decreasing trend in iron ore miners investing, investing less. And this is the line going down here, investment growth. The Chinese iron ore miners are investing less and less into their mines. That means troubles ahead either in terms of quantity or in terms of quality in the very near term. I will come to my production guidance, which is, again, one thing is to have the capacity of the 450 million, the other thing is, of course, if you are going to use it. And what we are signaling here is that we are working always with margin optimization, so this range between 400 million and 450 million in the midterm will depend on the margin optimization and is now definitely showing that the real production will be between those numbers, between 400 million and 450 million tons. The Northern System, now to the right side, the Northern System, as you know, we recently -- no, not recently -- one year ago, we changed the ramp-up profile. Instead of two years ramping up, we are now ramping it up in four years. This was better also to avoid interference with existing operations. Doesn't change the Capex, though. And if you now come back to the left side, in 2017, you see we are keeping our production guidance of 360 million to 380 million. And drawing your attention to 2018, since it's very unlikely that we increase our production in the South and Southeastern System, right, it's not very difficult for you to estimate where we are probably going to be in 2018, if you do the math. But should markets surprise us on the upside, we can always accelerate and speed up our S11D logistic system in order to produce more at S11D.

15 So finalizing my presentation, I would like to show you the main levers again in terms of numbers, in terms of how much could they contribute to additional EBITDA per ton, cash generation compared to the same price levels, bunker prices and our foreign exchange rates. So you see that the S11D is good for $1 to $1.5 increase in our EBITDA per ton, the optimization of supply chain, $1 to $2, global recovery up to $1, and other initiatives $0.5. So we are estimating that we can, with those initiatives, get another $3 to $5 on additional EBITDA per ton. That's what I wanted to talk to you and thank you very much for your attention. And I would like to hand over now to Jennifer Maki for Base Metals. Thank you. Jennifer Maki: Thank you, Peter. Hi, everyone. It's my pleasure to be here today to talk about the performance for base metals for 2016, but also to talk about the promise and the potential we see for 2017, and going forward. As you can see on this slide, in the last four years, we've seen the successful ramp-up of some of our projects, namely Salobo and Vale New Caledonia. We've also seen productivity gains through the supply chain and significant reductions in our cost and expenses which have improved our margin substantially. We've managed to increase nickel production 21%, with Vale New Caledonia production driving that, increasing 140%. Our copper production has increased 24%, with Salobo production increasing by over 170%. Our unit cash cost of nickel has come down by 31%, and copper by 58%. In this slide, you can look, and even without numbers, the chart clearly tells a picture. And once again, as I said, we've gone through a period of investment in the past in base metals, and we're seeing the results of that with our ramp-up projects, both in nickel and copper. And what's also nice to see, not only in terms of the increase in nickel being driven by Vale New Caledonia, but our Long Harbour project is also starting to contribute in a measured way. But also, you know, it's not just about the ramp-ups. We've also seen our mature operations deliver, whether it be Sudbury, PT Vale Indonesia, or Sossego in 2016, to help us achieve these new limits that we've never reached before in our history. And I think the other thing that's worth mentioning in terms of this, in the second half of 2016, we've achieved production records in over 50% of our operating sites. When you look at our cost performance here, again, we're on a favorable decline downwards. And I think, really, it's our focus that we've had on cost reductions in the last few years, but also the successful ramp-up of our projects.

16 And when you look at what we've been able to achieve in 2016 specifically, I think there's two key factors that drive that. Our Canadian operations have a much higher degree of fixed cost than our other operations and they've delivered on their production, which has drove down the unit costs in As well, Vale New Caledonia has had a significant improvement in its cost performance - and I think everyone would agree, much needed improvement in its cost performance - in But year to date, to October, it's reduced its cost by over $100 million. And 80% of that cost reduction is fixed. On the copper side, the improvement in terms of the unit costs here is really driven by the ramp-up of Salobo. But I would say, whether you're a ramp-up site for us or you're a mature operation, what we're really trying to do in base metals, evolve the culture to one of continuous improvement being in our DNA. And we're still working on that throughout our operations. I think if there's one slide in terms of that tells the pictures of the last few years in base metals, I think it's this one, where you can see our expenses have decreased 75% since And when you look beneath those numbers and that $1.4 billion in expenses in 2013, $800 million, or close to $800 million of that was pre-operating expenditures at our ramp-ups. And when you look for the comparable number in 2016, it's about $100 million. So you've seen a huge reduction there, and that's plagued us for many years, and it's behind us. It's $100 million in 2016, and decreasing as we go forward. I think also, we've tackled our SG&A over the years and reduced that in half. And we've also focused our R&D program and been able to curb the spending there. When you look at 2017, our focus is really on increasing our competitiveness. And that's through optimizing our North Atlantic flow sheet, continuing our de-risking plan in Vale New Caledonia, and also working on the potential we have in PT Vale, and consolidating the Salobo's cash generation. And I'm going to start in Sudbury. And of all the slides I'm going to speak to today, I'm going to spend the most time on this, because we have a lot of changes happening in Sudbury in And the driver of these changes and the optimization of the North Atlantic flow sheet is what you've heard us refer to as our atmospheric emissions reduction, our clean AER project. When the project is complete at the end of 2018, we will have reduced our SO2 emissions in Sudbury by 85%, and will be capturing 95% of all the SO2 produced. That iconic stack, for those of you who have been to Sudbury, will no longer be needed. And

17 we'll have more on that in the coming weeks. But we also will have achieved a 40% reduction in greenhouse gases. Today, our physical progress on this project is at 65%. And I think it's clear to say these changes in 2017 are the most significant changes we've done in Sudbury in decades. And the first place we're going to start is with the mill. The mill will be reconfigured, and we're going to remove more copper from the flow sheet earlier on in the process. Today, about 45% of Sudbury's copper con is sold to the market. Total copper production is about 45% is copper con sold to the market. And in 2017, we'll increase that to 70%. And by 2018, we'll level off, about 80% of Sudbury copper production being sold in the form of copper concentrate. And why we're doing that is because we want to maximize the room for nickel concentrate in the smelter. And we want to do that because we're moving to one furnace operation from a two furnace operation we've had for many years, in September/October of And that furnace that will continue to operate, we will be rebuilding it from March to June of next year, and we will be expanding its capacity. So most people would assume if you're shifting from two furnaces to one, your production is going to go down by 50%. But with that expanded capacity, our net reduction in the long term in terms of the Sudbury production is about 25% to 30%. Also, the other change that I think is worth mentioning in the nickel concentrate that will process through the smelter, there is some copper. So we'll being selling copper matte to the market as well in And by 2018, 12% of our copper production will be sold in the form of copper matte to the market. And we're no longer going to be producing anode in Sudbury. So there are some key messages that I'd like you to take away, is 2017 is definitely a year of transition in Sudbury. You will see reduced production from our Sudbury operation. You will also see greater quarterly variability in our production, as we have the shutdown for the furnace one for the rebuild from March to June. We also have a surface-wide plant shutdown for preventative maintenance in the month of June, to do the required work for the acid plant. And 2016 didn't have the shutdown because we have to do it every 18 months. And at the end of the day, this does result in a slight increase in the Sudbury unit cash cost, driven by fewer production units, but as well as increased maintenance expenses because of the shutdown. However, as a result of the changes we're doing in 2017, by the time we reach 2018, you'll see a net reduction in direct costs in the smelting area of over $40 million. And there'll also be indirect cost savings associated with that.

18 Sudbury's not the only Canadian operation undergoing significant change in Manitoba also begins its transition to a mine mill operation, which it'll be at by the end of 2018, in 2017, as we transition to one furnace effective January 2nd. For both Sudbury and Manitoba, 2017 marks the end of a 10-year period where we process significant amounts of Voisey's Bay concentrate through these operations. With the moves to single furnaces, this will largely be offset as we redirect this concentrate to our state-of-the-art refinery in Newfoundland, Long Harbour, which is ramping up right now. In 2017, we will have the final design flow sheet completely in operation, which means we're turning on the cobalt and copper electrowinning circuits for the first time and all impurity circuits will be operating. This will result in increased purity of the nickel produced by Newfoundland and Labrador. We're targeting production of 31,000 tons in 2017, almost double what we'll produce in And with that, you see the costs come down on a unit cost basis in terms of our operations in Newfoundland and Labrador. If we move to New Caledonia, we're going to continue our de-risking efforts there. But I don't think I can continue without acknowledging once again the significant cost reductions with the operations achieved in As I mentioned, year-to-date October results are already showing in excess of $100 million in cost reductions. Also, earlier this month, the French state announced a support package for Vale New Caledonia, which included a euro 200 million dollar loan. This, of course, is welcome relief. But as I tell the team in New Caledonia, it's only short-term relief for the year ahead, given the challenging nickel price environment. Ultimately, our work continues to build a long-term sustainable and competitive future for our operations there. And in 2017, that effort will really focus on further improving our operational performance by increasing production and further reduction in costs, building on what we've already achieved. In terms of our guidance in Vale New Caledonia for the next five years, you see a continual ramp-up of production. And ultimately, you see that operation will be below $10,000 a ton. And I think it's important in this slide to point out that the production ramp-up is pretty flat between 2017 and And that's on purpose. We made the decision not to invest in an increased mine fleet. And I think if the nickel price is higher than we expect, and we always have that optionality with us to go at that curve a little more steeper on the ramp-up.

19 In terms of our operations in Indonesia, which I think everybody knows offer tremendous potential for future growth. We're working on one of those opportunities right now and that's the expansion of our existing mining and processing facilities in Sorowako, where we're targeting to increase our production capacity by 8,000 tons by And this is really being achieved through debottlenecking, continuous improvement, and modernization of our furnaces. We're applying lots of the technology we have at our newer furnaces in Onca Puma, to our older furnaces in Indonesia to improve the production capacity. We also continue to explore our opportunities in Pomalaa and Bahodopi. We're working with strategic partners to explore the potential to exploit the saprolite ore bodies there. Lastly, I think it's worth mentioning that by 2018, with the changes going on in Sudbury, PT Vale will be the largest nickel producer within the base metals family. Salobo has really established itself with a consistent pattern of continual increases in the last two years. It's increased its EBITDA by 98%. And in my opinion, a little internal competition is always good. And Salobo is challenging Sudbury for our highest EBITDA-generating site, but it's not quite there yet. It did reach nominal monthly capacity in the month of October, setting a new record at 17.2 kilotons. And in 2017, we're working to expand production a further 15%. Also, as everybody knows, that Salobo offers great growth potential under the right market conditions. We're completing the feasibilities for Salobo III, which represents a brownfield expansion from 24 million tons per annum to 36 million tons per annum, leveraging our knowledge with the ore body. We're working on those feasibility studies, and we expect to be able to make an investment decision towards the end of Of course, as I said, it'll depend on the market conditions as well. Also in 2017, we're quite excited we're going to begin our first deep underground drills in Salobo to begin to assess the potential for an underground mine there. Looking forward at our guidance in terms of production for the next year, as you can see, our nickel production is relatively stable as we increase our copper production in 2017, and then maintain at that level going forward. I think it's also important to note that in base metals we have many long-life operations in addition to growth opportunities available under the right market conditions. And that's really driven by the enviable reserve and resource position we have. Brazil, Indonesia, New Caledonia, have the potential well to go beyond 25 years. Pomalaa and Bahodopi, continued exploration at our operations in Canada. And we're really, as I mentioned, just starting an underground drill program in Salobo.

20 Lastly, I think as this matrix illustrates, even moderate price increases in copper and nickel can really deliver an amplified increase in our EBITDA generation. In base metals, we believe we're doing the right things to position ourselves for a very bright future, and our work isn't done. We'll continue to focus relentlessly on safety first and the cost reductions, productivity, and general performance improvements that you'd expect from any industry leader. Thank you. And now I'll turn it over to Roger. Roger Downey: Morning, ladies and gentlemen. Coal and fertilizers now. If I can summarize this year for coal with Vale, it's a year of fulfillment. In one word, it's a year of fulfillment. The delivery of the Nacala Corridor and our second washing plants within budget, within schedule, as promised, has had not just a refreshing effect on the business, but also the fulfillment of keeping a promise to markets in a very tough environment. So in addition to those two very remarkable milestones, a lot more has gone on at our operations in Moatize. I can't overstate the challenge it is to set up an operation of that sort of magnitude in Africa, but we're there. We got a very large, probably one of the largest, if not the largest open pit met coal mine in the world up and running. We today have 2,000, just over 2,000 skilled employees, who we have been developing over the past four or five years, since we began operations. The results are beginning to show up, not just the dilution from the actual scale and the ramp-up, obviously, that dwarfs any other initiative that we've got in a very large, bulk operation. But we've seen a lot more productivity come out of the shop floor. So that's very rewarding. And, well, obviously, prices are helping a lot, but we haven't seen those effects in our numbers yet. And still, we've seen another very remarkable milestone in October with our first-ever positive EBITDA. So there's the Nacala train, pushing our coal to the port in Nacala. Started up in the last quarter of last year, and we've done 4.6 million tons on the Nacala railway to date and have loaded 54 ships. That's the second washing plant. In September, we reached a two million ton run rate. We actually started it up in August, and went through very successful commissioning of it between March and August. So today what we're seeing is a very stable washing plant, having addressed some of the issues that we had learned already from the first washing plant. So it's a very promising new phase in our mine.