Vale Sohar: strategically located to support the growth of the region

Transcription

1 Dubai, UAE 8-10 December, 2014 Vale Sohar: strategically located to support the growth of the region 18 th Middle East Iron & Steel Conference Sergio Espeschit - Commercial and Operational Director of Middle East

2 Disclaimer This presentation may include declarations about Vale's expectations regarding future events or results. All declarations based upon future expectations, rather than historical facts, are subject to various risks and uncertainties. Vale cannot guarantee that such declarations will prove to be correct. These risks and uncertainties include factors related to the following: (a) the countries where Vale operates, mainly Brazil and Canada; (b) the global economy; (c) capital markets; (d) the mining and metals businesses and their dependence upon global industrial production, which is cyclical by nature; and (e) the high degree of global competition in the markets in which Vale operates. To obtain further information on factors that may give rise to results different from those forecast by Vale, please consult the reports filed with the Brazilian Comissão de Valores Mobiliários (CVM), the French Autorité des Marchés Financiers (AMF), and with the U.S. Securities and Exchange Commission (SEC), including Vale s most recent Annual Report on Form 20F and its reports on Form 6K.

3 Vale is focused on its competitiveness

4 Vale has heavily invested in each part of the supply chain focusing on making high quality ores available to clients worldwide Vale s iron ore supply chain Mines Railways Ports Vessels DCs Clients Vessels DC Oman Floating stations (Philippines) DC Malaysia Mines Railways Ports Vessels

5 Vale s growth is sustained by a robust reserve base Vale 2 billion tonnes increase over 2013 reserves statement Reserves (t) 1 Grade (%Fe) Vale s reserves Bi 2 54% Northern System 7.18 Bi 67% Southeastern System 5.25 Bi 47% Mid-Western System 0.03 Bi 62% Southern System 5.60 Bi Note: (1) figures in billion metric tonnes (Bi t). (2) Samarco (2.95 Bt) reserves not included. Vale's equity interest in Samarco s mines is 50%. Including non-operating mines: S11D and Apolo. Source: Vale s statement of reserves. 44%

6 Vale is delivering its projects! Investments of US$ 38 billion bring additional volume of high grade ore to the market with improved logistics Project Progress Indicators (as of 3Q14) Capacity (Mtpy) Estimated start-up Capex (US$ bi) Statu s Status Vale s iron ore production Carajás Serra Sul S11D 90 2H CLN S11D - logistics upgrade (railway and port) 230 (80 1 ) 1H14-2H Serra Leste 6 Complete % 25% 100% 50% growth in 5 years 453 mtpy Concentration Plant at Vargem Grande Itabiritos Mine Concentration Plant II at Conceição Itabiritos Mine 10 2H (0 1 ) 1H % 91% 306 mtpy Concentration Plant at Cauê Mine 24 (4 1 ) 2H % Oman and Tubarão 8 Pelletizing Plants 7.5 Complete % Teluk Rubiah DC, Malaysia (port, stockyard and blending) 30 Complete % VLOC fleet, Floating transfer stations and Tubarão Port upgrade - Complete 4.2 (2) 100% e (1) Net additional capacity (2) VLOC fleet Capex not included in the US$ 38 billion total. Equivalent Shipowners capex considered for chartered tonnage equivalent

7 S11D - the largest project in the iron ore industry A project of 90 Mtpy capacity carefully planned to achieve operational excellence. truckless mining operation dry ore processing no tailing dams lower emissions water saving and forest preservation A green approach Production capacity: 90 Mtpy Production split: 100% high grade sinter feed Start-up: 2H2016 Stripping ratio: 0.27 Physical progress: 52% (June/14) Product yield: 100% Earthworks

8 Itabiritos 4 projects to enhance quality in Minas Gerais All projects combined add capacity of 65Mty to beneficiate itabirites mostly into pellet feed. Projects being delivered between 2H13 and will be fully completed until Conceição Itabiritos New beneficiation plant to process compact itabirites. Start-up from October Conceição Itabiritos II Refurbishment of existing Conceição plant (new process flow) to process compact itabirites. Cauê Itabiritos Refurbishment of existing Cauê plant (new process flow) to process compact itabirites. Vargem Grande Itabiritos New beneficiation plant to process itabirites, stockyard expansion and long distance conveyor belt.

9 Vale s production of high quality DRP follows the growth of investments in DRI plants around the world Since 2007, around 35 Mt of new DRI capacity have come on stream. Another 7 Mt of DRI of new projects have been announced until USA Nucor I, 13 Voestalpine, 16 VENEZUELA Sidor, 16 RUSSIA LGOK II, 07 LGOK III, 16 EGYPT Suez Steel, 13 ESISCO, 14 Ezz Steel, 14 IRAN Khouzestan V, 08 HOSCO I & II, 09/ 10 IGISCO, 12 BAHRAIN SULB, 13 PAKISTAN Al Tuwairqi, 13 Khorasan I & II, 10/ 12 S Kaveh, 12/ 13 Arfa Steel, 13 Saba, 14 INDIA Welspun 2, 07 Essar Steel VI, 10 Jindal S&P, 14 JSW, 14 JSPL, 15 Operating Plants SAUDI ARABIA DRIC I&II, 07 New Projects Hadeed E, 07 Source: MIDREX Projects and plants of MIDREX and HYL/ENERGIRON PROCESS OMAN Jindal Shadeed, 11 UAE Emirates Steel I & II, 09/ 10 Gulf Sponge Iron, 10 QATAR Qatar Steel II, 07 MALAYSIA Lion DRI, 08

10 Vale Oman pelletizing plant and distribution center have focused on GCC market since its start-up Oman Industrial Complex Pelletizing Plant Shareholders: 70% Vale, 30% OOC Total Investment: US$ 2.00bn Capacity: 9Mtpy Vale: US$ 1.25bn Distribution Center SIPC: US$ 0.25bn Shareholders: 100% Vale Oman Shipping: US$ 0.50bn Capacity: 40Mtpy

11 Vale s investment and strategic location in Oman shows our belief in the growth of the region Sohar, the only deep-water port in the region Able to receive our large vessels called Valemax which have a 400,000t capacity Is located outside of the Strait of Hormuz We have more than 330 Omanis as part of our work force More than 250 entered as trainees as their first job

12 Omanization level of more than 52% after 3 years of operation

13 Since its start-up, Vale Sohar has sold over 20Mt of DRP to fulfill the growing demand in the region Accumulated Sales of DRP from Vale Sohar Mt 25 Burj Khalifa X Mt* 5 0 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 * As of Oct.8, 2014

14 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Stable quality of the DRP produced at Vale Sohar and the proximity to customers combined with Vale s Safe sourcing In addition to consistent quality: Just-in-time Improves buyers cash flow and working capital due to low stock Fe (%) 5.00 Al2O3 + SiO2 (%)

15 Not only to serve the Middle East, Vale s Sohar Distribution Centre is also a solution for the growing demand in India Bringing our mines closer to our customers SOHAR DC INDIA BRAZIL 2014 sales of iron ore fines to India almost 4.0Mt

16 Vale has created the foundations to remain the most competitive supplier of DRP to support the growth of the Middle East Geographical proximity Vale has invested to become closer to its clients. Sohar pelletizing plant is one example to reach this goal Reliability Through the long history of supplying the Middle East of more than 30 years, Vale has proven the ability to produce a stable supply of high quality DRP under any market condition Quality enhancement Vale is developing Conceição Itabiritos, Vargem Grande Itabiritos and Tubarão VIII Pelletizing Plant to reinforce its status as one of the high Fe grade DRP suppliers in the seaborne market

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