Q4 2023 Vale S.A. Earnings Call

Operator: Good morning, ladies and gentlemen. Welcome to Vale's fourth quarter 2023 earnings call. This conference is being recorded, and the replay will be available on the company's website, vale.com. The presentation is available for download in English and Portuguese. This call is also available in Portuguese. To listen to the presentation in Portuguese, please press the globe icon on the lower right side of your Zoom screen and then choose to enter the Portuguese room. Then, select Mute Original Audio so that you won't hear the English version in the background.

Good morning, ladies and gentlemen, welcome to valleys fourth quarter 2023 earnings call. This conference is being recorded and the replay will be available at the company's website Valley Dotcom that presentation is available for download in English and Portuguese.

This call is also available in Portuguese to listen to the presentation and Portuguese. Please press the globe icon on the lower right side of resumed screen and then choose to enter the Portuguese room, then select mute original audio so that you won't hear the English version in the background.

Operator: We would like to inform you that all participants are currently in a listen-only mode during the presentation. Further instructions will be provided before we begin the question and answer section of our call. We would like to advise that forward-looking statements may be provided in this presentation, including VALE's expectations about future events or results, covering those matters listed in the respective presentation. We caution you that forward-looking statements are not guaranteed for future performance and involve risks and uncertainty. To obtain information on factors that may lead to results different from those forecast by Vale, please consult the report, Vale's Files with the U.S. Securities and Exchange Commission, and the Brazilian Comisso de Valores Mobiliares, and in particular, the factors discussed in the Forelooking Statements and Risks Factors in Vale's Annual Report on Form 20-F. With us today are Mr. Eduardo Gisales Now, I'll turn the conference over to Mr. Eduardo Bartolomeo. Sir, you may now begin. Thank you, and good morning everyone.

We would like to inform that all participants are currently in a listen only mode for the presentations further instructions will be provided before we begin the question and answer section of our call.

We would like to advise that forward looking statements may be provided in this presentation, including values expectations about future events or results encompassing those matters listen in the respective presentation. We caution you that forward looking statements are not guarantees of future performance and involve risks and uncertainties.

Obtain formation and factors that may lead to results different from those forecast by value. Please consult the reports <unk> files with the U S Securities and Exchange Commission, the Brazilian companies, Sony valuation will be added and in particular the factors discussed in the forward looking statements and risks factors in value annual report on form 20-F.

Yes.

With us today are Mr. Eduardo decided Bartolomeo CEO, Mr. Gustavo P Mehta Executive Vice President of Finance and Investor Relations, Mr. Marcello Spinelli Executive Vice President Iron ore solutions, Mr. Cargoes mid Davis executive Vice President of operations and Mr.

Mark good to funny chairman of body based metals now I will turn the conference over to Mr. Eduardo Bartolomeo, Sir you may now begin.

Eduardo Bartolomeo: Thank you and good morning, everyone. I Hope you are all doing well.

Eduardo Bartolomeo: I hope you are all doing well. 2023 was a remarkable year for Vale. Our results translate the evolution of our safe, driven culture transformation and our progress towards operational excellence. We have won and delivered in line with our guidance. I'm excited that we are now taking Vale to an even higher level of performance through the five key levers we outlined in the last Vale report, starting with our safety journey, which in 2023 showed encouraging improvements with the lowest injury frequency rate since 2008 and relevant accomplishments in that manner. Our second lever, the stabilization of our iron ore operations, comes to secure our baseline production of 310 to 320 million tons per year. And that's a dance.

Eduardo Bartolomeo: <unk> was a remarkable year for volume.

Eduardo Bartolomeo: Our results translated the evolution of our safety driven culture transformation in there.

Eduardo Bartolomeo: Progress towards operational excellence.

SaaS walk the talk and delivered in line with our guidance.

Eduardo Bartolomeo: I'm excited that we are now taking valid.

Eduardo Bartolomeo: Even higher level of performance. So the five key levers we outlined on the last validate.

Eduardo Bartolomeo: Starting with our safety journey.

Eduardo Bartolomeo: In 2023 showed.

Eduardo Bartolomeo: Margin improvements with the lowest injury frequency rate since 2008 and relevant accomplishments and their management.

Eduardo Bartolomeo: Our second lever is.

Eduardo Bartolomeo: The stabilization of our iron ore operations.

Eduardo Bartolomeo: Comes to secure our baseline production of 310 to 320 million tons per year in.

Eduardo Bartolomeo: In that SaaS, our 'twenty to 'twenty three production.

Eduardo Bartolomeo: Our 2023 production of 321 million tons exceeded expectations and provided evidence of increased asset and process reliability. On our third level, growing volumes of iron ore with quality, we took an important step by starting up our first briquette plant. In addition, our partnership with Anglo America in a world-class operation will bring synergies and make available high-quality feed for agglomerated products. Gustavo will share more information on that later. In our path to transform the energy transition metals business, copper production had an impressive 50% growth in the fourth quarter.

Eduardo Bartolomeo: 321 million tons exceeded expectations and provided evidence of increased asset and process reliability.

Eduardo Bartolomeo: On our third lever growing volumes in iron ore with quality, we gave an important step by starting up our first breaker plants. In addition, our partnership with Enel America in a world class operation will bring synergies and make available high quality feeds for AG.

Eduardo Bartolomeo: Eliminated products Gustavo will share more information on that later.

Eduardo Bartolomeo: In our path to transform the energy transition metals business copper production had an impressive 50% growth in the fourth quarter nickel production was in line with guidance with results benefited by price realizations, 7% above <unk> prices in the quarter.

Eduardo Bartolomeo: Nickel production was in line with guidance, with results benefited by price realization 7% above LME prices in the. In our quest towards ESG leadership in mining, 2023 saw substantial progress in the reparations of Brumadinho and Mariano. Finally, by announcing a $2.4 billion dividend distribution, we reinforce that our discipline in capital allocation and commitment to shareholder return remains unchanged. Let's see more details of our 2022 performance now. Please, next slide.

Eduardo Bartolomeo: In our quest towards ESG leadership in mining 2023 saw a substantial progress in their preparations of the Medina with <unk>.

Eduardo Bartolomeo: Finally by announcing a $2 4 billion dollar dividend distribution we.

Eduardo Bartolomeo: <unk> for us that our disciplined capital allocation and commitment to shareholder return remains unchanged.

Eduardo Bartolomeo: Let's see more details of our 2023 performance now please.

Speaker Change: Please next slide.

Eduardo Bartolomeo: As you know, safety is the most important work front for me at Vale. We are committed to ensuring that each employee is safe during their work shift. We achieved solidly safe performance this year with the lowest injury frequency rate in the company history and one of the lowest in our industry. The year was also remarkable for our band management performance. We reached conformance with the global industry standard for tailing management within the expected industry timeframe. Our upstream dam de-characterization program reached a 43% completion rate.

Speaker Change: As you know safety is the most important work from for meat at body. We are committed to ensuring that each employee is safe during work shifts.

Speaker Change: We achieved solid safety performance of the year with the lowest injury frequency rate in the company history and one of the lowest in our industry.

Speaker Change: The year was also remarkable for our dam management performance, we reach it conformance with the global industry standard for daily management within the expected industry timeframe, all upstream them. The characterization program reached at 43% completion rate with three before.

Eduardo Bartolomeo: P3B4, an upstream dam which was at emergency level 3 back in 2019, had over 90% of its tailings removed, bringing forward DEM elimination in three years from 2027 to 2021. We are already seeing a safer valley, built with operational discipline and a maturing management model. Next slide, please. The fourth quarter was a very strong one, leading us to deliver a 9-0 output that exceeded our guide.

Speaker Change: And upstream dam, which was at emergency level III back in 2019 had over 90% of its dailies removed, bringing forward. The dam elimination in three years from 2027 to 2024.

Speaker Change: <unk> already seen a safer Vale Butte with operational discipline, a maturing management model next slide please.

Speaker Change: The fourth quarter was a very strong one leading us to deliver a nine or output that exceeded our guidance.

Eduardo Bartolomeo: Year on year, we increase our output by 11%. And in December, we had the highest monthly output since 2018. We are ensuring asset reliability. Our mean time between failure, for example, improved considerably, almost doubling the performance in the S11D truckless systems.

Speaker Change: Year on year, we increased our output in the 11% and in December which had the highest monthly output. Since 2018, we are ensuring our asset reliability.

Speaker Change: Meantime between failure for example, improved considerably almost doubling the performance in the S 11, Detroit Lis system space.

Eduardo Bartolomeo: In pellets, our strong output was supported by the start-up of the turtle dam in 2023 and, therefore, higher pellet feed production at Brooklyn. In 2024, we are at a fast pace to deliver another strong performance. Next slide, please.

Speaker Change: Pellets are strong output was supported by the start top of the total them in 2023, and therefore, the highest pellet feed production at broker too.

Speaker Change: In 2024.

Speaker Change: At a fast pace to deliver another strong performance.

Speaker Change: Next slide please.

Speaker Change: Valleys major competitive advantage is its potential to grow its high quality portfolio with low capital intensity.

Eduardo Bartolomeo: Vale's major competitive advantage is its potential to grow its high-quality portfolio with low capital intensity. In that sense, we are targeting the development of three key projects combined with the development of mega-hubs, concentration facilities, and brickery plants. Our three key projects are being executed. The Vagem Grande Complex Expansion, the Kappa Nema project, and the S11BPLUS20 experiment.

Speaker Change: That says we are targeting the development of three key projects combined with the development of Mega hubs concentration facilities briefly plants at.

Speaker Change: Our three key projects are being executed the visor and good LNG complex expansion the capped by name of project and the athlete and the plus 20 expansion.

Eduardo Bartolomeo: With those additions to our current production baseline, we expect to reach 340 to 360 million tons of production by 2026. Next slide, please. In 2023, we continue to mature our agreements for joint assessments on the construction of mega hubs with authorities in the United Arab Emirates, Saudi Arabia, and Oman and with partners in Brazil. We are also assessing the feasibility of developing green steel hubs in Brazil and North America with H2 Green Steel, a Swedish partner. Finally, we are ramping up the first briquette plant in our Tubaro complex, with the second plant expected to start operations in the first half of 2020. With growing volumes, higher average iron content, and a cost-efficient program in place, we are preparing Vale to be one of the most efficient mining companies in the world. Next slide, please.

Speaker Change: If those adding to our current production baseline we expect to reach 340 to 360 million ounce reductions by 2026.

Speaker Change: Next slide please.

Speaker Change: <unk> three <unk>.

Speaker Change: Continued to mature our agreements for joins assessments on the construction of Mega hubs, we felt therapies in the United Arab Emirates, Saudi Arabia, and Oman and with partners in Brazil.

Speaker Change: We are also assessing the feasibility of developing green stoop hubs in Brazil, and North America with H, two green steel a Swedish partner finally, we are ramping up the first BRCA planting our tobacco complex with the second plant expected to ramp up in the first half of 'twenty four with growing volumes.

Speaker Change: Higher average iron content and cost efficient program in place we are preparing folly to be one of the most efficient mining companies in the world.

Speaker Change: Next slide please.

Eduardo Bartolomeo: In the energy transition metal business, we delivered a remarkable output in copper, an outstanding 50% increase quarter-on-quarter driven by the successful ramp-up of Salobu 3 and improved performance at Salobu 1 and 2 plants. In nickel, our production was in line with guidance, which already factored the transition of Voizes Bay mine extension. In 2023, we successfully established Vale Based Metals, a new company with separate governance overseeing Vale's energy transition metals business. Delivering on our commitments, we brought in important partners to the business as a means to accelerate VDM's growth while ensuring greater operational efficiency in the short term. The upcoming years will be crucial for transitioning the energy transition metals business to a new phase. The asset review is underway, and we'll provide more color on that process in 2020. Next slide, please.

Speaker Change: In the energy transition metal business, we delivered a remarkable out putting copper in outstanding 50% increase quarter on quarter, driven by the successful ramp up of Salobo III and improved performance at <unk>, one and two plants.

Speaker Change: In nickel production was in line with guidance, which already factored the transition our voices Bay mine extinction.

Speaker Change: In 2023, we successfully established value base metals, a new company with separate governance overseeing values energy transition metals business.

Speaker Change: Delivering on our commitments, we brought in important partners to the business as a means to accelerate <unk> growth, while ensuring greater operational efficiency in the short term.

Speaker Change: Coming years will be crucial for transitioning the immediate transition metals business to a new face.

Speaker Change: The asset review is underway and we will provide more color on that process along 2024.

Speaker Change: Next slide please.

Eduardo Bartolomeo: We are consistently delivering and positioning Vale as an ESG leader. We are increasingly focusing on people, with solid results so far and with encouraging improvements to come. We are a more diverse, equitable, and inclusive company since we set our long-term goals back in 2019. For instance, our female workforce increased by 85% in this.

Speaker Change: We are consistently delivering and positioning <unk> as an ESG leader.

Speaker Change: We are increasingly focusing on people with solid results, so far and with encouraging improvements to come.

Speaker Change: We are a more diverse equitable inclusive companies since we set our long term goals back in 2019 for instance, our female workforce increased by 85% in this spirit.

Eduardo Bartolomeo: On the social front, we continue to foster resilient communities. We are striving to be a nature-positive company uniquely positioned to leverage decarbonization efforts. Improving our transparency on our ESG performance, we have also become early adopters of the Task Force on Nature-Related Financial Disclosures, the TNF. Most importantly, we are delivering on our reparation process. In Brumadinho, 68% of the full reparation settlement was fulfilled, a R$6.3 billion cash outflow in 2022.

Speaker Change: On the social front, we continue to foster resilient communities.

Speaker Change: We are striving to be a major positive company uniquely positioned to leverage decarbonization efforts, improving our transparency on our ESG performance. We also became early adopters of the tasks for us on nature related financial disclosures the <unk> ft.

Speaker Change: Most importantly, we are delivering on our reparation processes in.

Speaker Change: Bloomer genome, 68% of the full reparation settlement were fulfilled.

Speaker Change: <unk> six 3 billion Reais cash outflow in 2023.

Eduardo Bartolomeo: We expect to end 2026 with 90% of the obligations. In Mariana, the reparation has been accelerated by the Renova Foundation with over 460,000 people compensated and over 85% of housing solutions provided, a total disbursement of R$34.7 billion since 2015. On that front, we continue to negotiate a definitive reparation settlement with the Brazilian authorities. Our approach to ESG has started to be acknowledged by ESG ratings providers, and we are confident that our progress will be fully recognized in the near future. We are on our way to leading sustainable mining, an industry able to create and share value with all of its stakeholders. Since 2019, we have made profound changes to Vale's way of operating and are now reaping the benefits of that. The executive team continues to be highly focused on our strategy and commitment.

Speaker Change: We expect 2026 with 90% of the obligation is completed.

Speaker Change: The Marianna the reparation has been accelerated by the or another foundation with over 460000 people compensated and over 85% of housing solutions provided a total disbursement of $34 7 billion Reais.

Speaker Change: Since 2015.

Speaker Change: On that front, we continue to negotiate a definitive reparation settlements with the Brazilian authorities.

Speaker Change: Our approach towards yes Jeep.

Speaker Change: Has this started to be acknowledged by ESG ratings providers and we are confident that our progress will be usually recognized in the near future.

We are on our way to lead a sustainable mining industry able to create and share value with all of its stakeholders.

Speaker Change: Since 2019, we have made profile change in wireless way of operating and are now reaping the benefits of that work.

Speaker Change: <unk> continues to be highly focused on our strategy and commitments, we are delivering on our safety in ESG commitments always listening to our stakeholders, we are delivering more robust operational and cost performance across all business we are advancing.

Eduardo Bartolomeo: We are delivering on our safety and ESG commitments, always listening to our stakeholders. We are delivering more robust operational and cost performance across all businesses. We are advancing our Iron Ore strategy towards growth with quality. We are positioning Vale for leadership in global decarbonization while driving local and regional development. Finally, we remain fully committed to disciplined capital allocation.

Speaker Change: Our iron ore strategy towards growth with quality, we are positioning value for leadership and global decarbonization, while driving local and regional development.

Speaker Change: Finally, we remain fully committed to disciplined capital allocation.

Gustavo Pimenta: To conclude, I would like to thank the management team, our employees, and our partners for contributing to the 2023 Resolve. Now, for our financial results, I pass the floor to Gustavo. Thank you.

Speaker Change: To conclude I would like to thank the management team our employees our partners for contributing to the 'twenty two 'twenty three results.

Speaker Change: Now for our financial results I pass the floor to Gustavo Thank you.

Gustavo Pimenta: Thanks, Eduardo, and good morning, everyone. Before going to our financial performance, I would like to spend some time talking about the strategic rationale and the associated financial aspects of our recently announced partnership with Anglo America in Brazil. As you probably saw in both companies' releases, we have agreed to buy 15% of MinasRio's existing business in exchange for a cash payment of $157 million, subject to net debt and working capital adjustments, and the contribution of our world-class iron ore deposit at Serra da Serpentina in Minas Gerais. This combination is highly accretive for both companies as it allows us to leverage and maximize each other's infrastructure Minas Rio today has a nameplate capacity to produce up to 26.5 million tons per year of high-quality pellets, and the development of Serpentina will enable the total complex to reach over 50 million tons per year in the next decade, as per the agreed terms. Vale will have an option to buy another 15% stake in Minas Rio at market terms once the Serpentina deposit obtains its preliminary license.

Gustavo: Thanks, Eduardo and good morning, everyone.

Gustavo: Before going into our financial performance I would like to spend some time talking about the strategic rationale and the associated financial aspects of our recently analysis partnership with Anglo America in Brazil.

Gustavo: As you probably saw in both companies releases, we have agreed to by 15% of Minas Rio existing business in exchange for a cash payment of $157 million.

Gustavo: Subject to net debt and working capital adjustments and the contribution of our world class iron ore deposit of <unk> immune as you rice.

Gustavo: This combination is highly accretive for both companies as it allows us to leverage and maximize each others infrastructure.

Gustavo: Securing access to additional high quality iron ore to support growing demand for low carbon is steelmaking.

Gustavo: Minas Rio today has a nameplate capacity to produce up to $26 5 million tons per year of high quality pellet feed and the development of <unk> will enable the total complex to reach over 50 million tons per year in the next decade.

Gustavo: The agreed terms value have an option to buy another 15% stake of <unk> at market terms, whilst recipient keener deposit <unk>, it's preliminary license.

Gustavo Pimenta: This should allow us to have access to up to 15 million tons per year of pellet feed once Serpentina is fully developed. VALUE has proportional offtake rights, and we plan on using these volumes to feed our pallet facilities and later our briquetting plants, including the ones under the mega-hub. Finally, we have also agreed on certain earn-out rights on both sides over the next four years, with predefined caps as detailed in our market communique. We are very excited to initiate this partnership with Anglo-American in Brazil and expect this will unlock significant value for all of our stakeholders. As we mentioned, the supply of high-quality iron ore is a key component of our strategy as we look to help our clients transition to a lower carbon footprint.

Gustavo: This should allows us to have access to up to 15 million tons per year of pellets feed once <unk> is fully developed.

Gustavo: Value have proportional offtake rights and we plan on using this volumes to feed our pellet facilities.

Gustavo: Later, our brick heading plants, including the ones under the Mega hub initiatives.

Gustavo: Finally, we have also agreed on certain earn out rights on both sides over the next four years with pre defined it caps as detailed in our market communications.

Gustavo: We are very excited to initiate this partnership with Anglo American in Brazil, and expect this will unlock significant value to all of our stakeholders as.

Gustavo: As we mentioned the supply of high quality iron ore is a key component of our strategy as we look to help our clients transition to a lower carbon footprint.

Gustavo Pimenta: Now, let me turn back to our financial performance, starting on the next slide. As you can see, our pro forma EBITDA was $6.7 billion in Q4. $2.7 billion higher. The increase is explained by a combination of higher realized iron ore prices, which increased 24% versus a year ago, as well as lower operating expenses, as we start to harvest the benefits of our efficiency and productivity program. On prices, the iron ore fines realized price was $128 per ton in Q4.

Gustavo: Now, let me turn back to our financial performance starting on the next slide.

Gustavo: As you can see our pro forma EBITDA was $6 7 billion in Q4.

Gustavo: $2 7 billion higher year on year.

Gustavo: The increase is explained by a combination of higher realized that iron ore prices, which increased 24% versus a year ago as well as by lower operating expenses as we start to harvest the benefits of our efficiency and productivity programs.

Gustavo: On prices the iron ore fines realized price.

Gustavo: $128 per ton in Q4 $23 per ton higher year on year.

Gustavo Pimenta: $23 per ton, higher units, even by higher reference prices and the positive effect of provisional. Given market conditions in Q4, with lower discounts for high silica iron ore, we decided to increase this product's share in the sales market, while rebalancing premium iron ore inventories, especially Karajan. This proactive strategy not only maximizes our product portfolio value but also positions us to better monetize our production going forward. Looking into the first quarter, market conditions remain favorable for high silica products, and therefore, we should continue to manage our product portfolio accordingly, in order to provide greater clarity about our product portfolio. We have started to disclose the breakdown of each specific product in our orderly report, which should facilitate the calculation and your understanding of our realized premiums and prices.

Gustavo: By Hyatt reference prices and the positive effect of provisional prices.

Gustavo: Given market conditions in Q4 with lower discount for a high silica iron ore, we decided to increase this product share in the sales mix, while rebalancing premium iron ore inventories, especially carriages.

Gustavo: This proactive strategy not only maximizes our product portfolio value, but also position us to better monetize our production going forward.

Gustavo: Looking into the first quarter market conditions remain favorable for high silica products and therefore, we should continue to manage our product portfolio accordingly.

Gustavo: In order to provide greater clarity about our product portfolio mix, we have started to disclose the breakdown of each specific product in our quarterly report, which should facilitate the calculation and your understanding of our realize at premiums and prices.

Gustavo Pimenta: Regarding costs, our iron ore EBDA breakeven declined 4% in Q4, reaching $53.3 per ton in the quarter and $54.8 per ton in 2023, below our most recent guidance. Our C1 cost performance in Q4 was solid as we moved it closer to the $20 per ton level, supported by our Efficience Program Initiative, a positive exchange rate impact, and an inventory carryover effort. In 2023, C1 costs are expected to average $22.3 per ton within our guidance.

Gustavo: Regarding costs, our iron ore EBITDA breakeven declined 4% in Q4, reaching 53.3 dollars per tonne in the quarter.

And $54 $8 per ton in 2023 below our most recent guidance our Q1 cost performance in Q4 was solid as we move it closer to the two any dollar per tonne level.

Gustavo: Supported by our efficiency program initiatives, a positive exchange rate impact and an inventory carryover effect.

Gustavo: <unk> three <unk> costs averaged $22 $3 per tonne within our guidance range.

Gustavo Pimenta: As we presented at Vale Day, we expect costs in 2024 to be in line with 2023 with a C1 guidance of $21.5 to $23. Moving to our Energy Transition Metals business, our Nickel-O-Link costs sharply declined in Q4, driven by the mine maintenance conclusion in Q3, and by 7% higher production volumes in the quarter, which was also supported by product revenue. In our corporate operations, higher by-product volumes and prices led to a $300 per ton increase in by-product revenue. This was partially offset by higher maintenance costs at Susego, despite higher production volumes in both operations.

Gustavo: As we presented at validate we expect costs in 2024 to be in line with 2023 with a Q1 guidance of 291 five to $23 per ton.

Gustavo: Moving to our energy transition metals business, our nikko all in costs sharply declined in Q4.

Gustavo: Driven by the mine maintenance conclusion in Q3 and by 7% higher production volumes in the quarter, which also supported byproduct revenues.

Gustavo: And our corporate operations higher byproduct volumes and prices.

Gustavo: For $300 per ton increase in byproduct revenues. This was partially offset by higher maintenance costs at <unk>. Despite the higher production volumes in both operations.

Gustavo Pimenta: Still on base metals, I would like to share that we are making significant progress on our asset review under the leadership of Mark and have identified a series of opportunities to improve productivity and reduce unit operating costs. The plan has been primarily focused on asset integrity and mine development along with flow sheet optimization. These opportunities are being assessed and designed for implementation over the next two to three years, with some benefits already being captured in the short term. We plan on presenting the key action items of the asset review with the associated benefits by mid-year. Now, moving on to cash generation. As you can see, Q4 free cash flow from operations was about $2.5 billion, roughly $1.4 billion higher than Q1, driven by higher EB-DOMs. Working capital increased in the quarter, driven by higher accounts receivable due to higher iron ore prices and sales.

Gustavo: It's the one based models I would like to share that we are making significant progress on our asset review under the leadership of Mark and have identified a series of opportunities to improve productivity and reduce unit operating costs there.

Gustavo: The plan has been primarily focused on asset integrity and mine development, along with the flow sheet optimization.

Gustavo: These opportunities are being assessed and designed for implementation over the next two to three years with some benefits already being captured in the shorter term.

Gustavo: We plan on presenting the key action items of the asset review with desktop shaded benefits by mid year.

Gustavo: Now moving onto cash generation as you can see Q4 free cash flow from operations was about $2 5 billion roughly.

Gustavo: Roughly $1 4 billion higher than Q3, driven by higher EBITDA.

Gustavo: Working capital increased in the quarter, driven by higher accounts receivable due to higher iron ore prices and sales.

Gustavo Pimenta: These invoices will be collected in Q1 this year, and we expect the effect on working capital to reverse in the following quarter. In addition, CapEx seasonally increased in Q4, as planned in our investment plan, with our full-year CapEx at $5.9 billion, slightly below our guidance. Most of the free cash flow was used to anticipate a $2 billion extraordinary dividend and interest on capital payment in December.

These devices will be collected in Q1 this year and we expect the effect on working capital to reverse in the following quarters.

Gustavo: In addition, capex seasonal increase in Q4 as planned in our investment plan with our full year capex at $5 $9 billion slightly below our guidance.

Gustavo: Most of the free cash flow was used to anticipate a 2 billion extraordinary dividend and interest on capital payments in December.

Gustavo Pimenta: Also yesterday, our Board of Directors approved a distribution of 2.4 billion dollars of dividends to be paid in March 2024, reinforcing our continued focus on returning value to shareholders. Now, let me turn to our expanded NetDev evolution on the next slide. We ended 2023 with an expended net debt of $16.2 billion compared to $15.5 billion in capital.

Gustavo: Also yesterday.

Gustavo: <unk> directors approved a distribution of $2 4 billion of dividends to be paid in March 2024, reinforcing our continued focus on returning value to shareholders.

Gustavo: Now, let me turn to our expanded net debt evolution in the next slide.

Gustavo: We ended two any Chinese three with an expanded net debt of $16 2 billion compared to $15 5 billion in Q3.

Gustavo Pimenta: As you can see, this quarter we recognized an extra provision of 1.2 billion dollars related to San Marco's obligation and a potential global agreement with Brazilian authorities. The new provision, although still subject to uncertainty, is our best estimate today of the amount required from Vale to fulfill those obligations, and it considers that Samarco will continue to have the ability to pay for a portion of the required payment, as per their approved business. Since 2015, more than R$35 billion have been disbursed in 42 agreed programs, with almost 500,000 people compensated.

Gustavo: As you can see this quarter, we recognized an extra provision of $1 2 billion related to some mark was obligation and a potential global agreement with Brazilian authorities, the new provision, although still subject to uncertainty is our best estimate today of the amount required from Vale.

Gustavo: To fulfill those obligations and it consider there's some market will continue to have the ability to pay for a portion of the required payments expert they're approved business plan.

Gustavo: Since 2015 more than 35 billion Reais have been disbursed in footage agreed programs with almost 500000 people compensated.

Gustavo: We continue to be highly focused on the settlement that works for all parties involved within a framework that provides the legal certainty and leads to an effective execution of the agreed compensation.

Gustavo Pimenta: We continue to be highly focused on a settlement that works for all parties involved within a framework that provides legal certainty and leads to an effective execution of the agreed compromise. Regarding our optimal leverage target, we are maintaining the 10 to 20 billion-dollar range under the same expended net debt concept. This range provides us with greater flexibility and optimized capital costs. In the next quarters, we expect our expended net debt to benefit from our solid operational performance, enabling healthy value generation for our shareholders. So before moving on to the Q&A session, I would like to reinforce the key messages from today. We continue to make substantial progress in our safety and ESG commitment, as evidenced by record low injury rates in our operations and continued advancements on upstream dam de-characterization.

Gustavo: Regarding our optimal leverage target, we are maintaining the $10 billion to $20 billion range under the same expanded net debt concept. This.

Gustavo: This range provide us with greater flexibility and optimize capital costs.

Gustavo: In the next quarters, we expected our expanded net debt to benefit from our solid operational performance, enabling health value generation to our shareholders.

Speaker Change: So before moving on to the Q&A session I would like to reinforce the key messages from today's call.

Speaker Change: We continue to make substantial progress in our safety and ESG commitments.

Speaker Change: Zempel by record low injury rates and our operations and continued advancements on upstream then the characterization.

Speaker Change: In iron ore, we are very encouraged with the recent operational performance from our assets and very confident on our ability to deliver on the targets for the ear on growth. We have seen a very steady progress on our key projects to add 50 million tons per year of high quality iron ore with limited <unk>.

Gustavo Pimenta: In Iron Ore, we are very encouraged by the recent operational performance from our athletes and very confident in our ability to deliver on the targets for the year. On growth, we are seeing very steady progress on our key projects to add 50 million tons per year of high-quality iron ore with limited capital intensity by 2020, and I am encouraged by the findings and initial implementation of the Asset Review in Bayes Metals. And finally, we remain highly committed to a disciplined capital allocation process, as evidenced by today's dividend announcement and the continuous execution of our highly accretive buy-back reward. With that, I would like to open the call for questions. Thank you.

Speaker Change: <unk> intensity by 2026, and I encouraged with the findings and initial implementation of the asset reviewing based models.

Speaker Change: And finally, we remain highly committed to a disciplined capital allocation process as evidenced by today's dividend announcement and the continuous execution of our highly accretive buyback program.

Speaker Change: With that I would like to open the call for questions. Thank you.

Speaker Change: We are going to start the question and answer section of the call. If you have a question. Please click on the right hand button. If your question has already been answered you can leave the queue by clicking on the lower hand button.

Speaker Change: Please ask your question in English and limit your questions to two at a time.

Speaker Change: Our first question comes from Leonardo Correa with BTG Pactual.

Operator: We are going to start the question and answer section of the call. If you have a question, please click on the raise hand button. If your question has already been answered, you can leave the queue by clicking on the lower hand button.

Leonardo Correa: Your microphone.

Leonardo Correa: Yeah.

Leonardo Correa: Hello, Good morning, everyone can you hear me.

Leonardo Correa: Yes.

Leonardo Correa: Perfect. Yeah. So I have a couple of quick ones.

Leonardo Correa: Now we last year this is gustavo.

Speaker Change: We can't hear you I don't know if you're on mute.

Gustavo: Rose a bit too so about $16 billion right considering.

Gustavo: We lost you in the in a while.

Leonardo Correa: Please ask your question in English and limit your questions to two at a time. Our first question comes from Leonardo Correa with BTG Pac-12. You can activate your microphone.

Speaker Change: I think you'll have to refresh.

Speaker Change: Restart your question. Please okay sure sorry about that yeah.

Speaker Change: So starting out with the dividend question.

Speaker Change:

Speaker Change: In the quarter, you paid the minimum dividend rate as per the company's policy.

Leonardo Correa: Hello, good morning, everyone. Can you hear me? Yes. Ah, perfect. Yeah, so I have a couple of quick questions. Leo, we lost you. This is Gustavo.

Speaker Change: There are some doubts maybe couple of months ago, but.

Speaker Change: But considering everything thats happening in all of the headlines from some article.

Speaker Change: And the higher provision potential it seem to be the prudent approach right from.

Gustavo Pimenta: We can't hear you. I don't know if you're on mute, but it rose a bit to about $16 billion, right? Considering the... Leo, we lost you for a while. I think you have to restart your question, please. OK, sure. Sorry about that.

Speaker Change: From you guys.

Speaker Change: The question is considering that an additional provision has already been announced.

Speaker Change: And that perhaps there could be a bit more visibility into these issues going forward.

Speaker Change: How do you think about the extraordinary dividends in the second semester of the year that would be my first question.

Leonardo Correa: Yeah, so I'm starting out with the dividend question. I mean, in the quarter, you paid the minimum dividend, right, as per the company's policy. There were some doubts maybe a couple of months ago, but considering everything that's happening and all the headlines from Samarco and the higher provision potential, it seemed to be the prudent approach, right, from you guys. The question is, considering that an additional provision has already been announced and that perhaps there could be a bit more visibility into these issues going forward. How do you think about extraordinary dividends in the second semester of the year? That would be my first question.

Speaker Change: That together with the fact that I mean, you still have some balance sheet room.

Speaker Change: To increase your expanded net debt levels to $20 billion.

Speaker Change: Second question.

Speaker Change: Sorry to continue on this topic of of these heavy.

These issues right, but.

Speaker Change: But we've been we've all been hearing about the headlines and somewhat concerned about the headlines.

Speaker Change: Specifically on <unk> and Renova.

Speaker Change: I just wanted to hear you on how I mean, how you guys are progressing at this point with negotiations is there any.

Speaker Change: Idea on how I mean or timing of these talks can evolve for that would be fantastic. I mean do you expect this to be something for the first semester or can this be.

Leonardo Correa: Putting that together with the fact that, I mean, you still have some balance sheet room to increase your expanding that debt levels to 20 billion. The second question, sorry to continue on this topic of these issues, but we've all been hearing about the headlines and are somewhat concerned about the headlines, specifically about Samarco and Renova. I just wanted to hear how, I mean, how you guys are progressing at this point with negotiations. Is there any idea on how or when these talks can evolve forward? That would be fantastic. I mean, do you expect this to be something for the first semester?

Speaker Change: Perhaps something rolled out too.

Speaker Change: To the second semester.

Speaker Change: So now this is gustavo thanks for your question I Hope you can hear me well.

Gustavo: So look on dividends I think we will continue to just see how the year evolves right and I think we are optimistic in terms of the operational performance.

Gustavo: The business.

Gustavo: You still have to the cash from the minority sales based models should be received.

Gustavo Pimenta: Or can this perhaps be something rolled out to the second semester of the course? So, Leo, this is Gustavo. Thanks for your question. I hope you can hear me well. So, look, on dividends. I think we'll continue to see how the year evolves, right? And I think we are optimistic in terms of the operational performance of the business. You know, we still have the cash from the minority sales-based metals to be received. We are certainly looking into that vis-a-vis some of the outstanding items that we talked about and within the $10 to $20 billion expanded net, that concept that we've been working with. So, it's early to say.

Gustavo: Certainly looking each of that vis vis some of the outstanding items that we talked about and within the $10 billion to $20 billion.

Gustavo: The net debt concept that.

Gustavo: We've been working with.

Gustavo: So it's early to say I would say, we continue to be very focused on.

Gustavo: Remunerating our shareholders at the best we can and you should continue to expect this to to follow that.

Gustavo: Yes.

Gustavo: Mr. Marco renegotiation in the supplement.

Gustavo: We are working hard.

Gustavo: To reach a resolution.

There has been some progress lately.

Gustavo: With all the parties, we continue to expect that the settlement will be Richard and we are hopeful that.

Gustavo Pimenta: I would say we continue to be very focused on. We're moderating our shareholders as best we can, and you should continue to expect us to follow that path. On the Samarco renegotiation and the settlement, look, we are working hard to reach a resolution. There has been some progress lately with all the parties.

Gustavo: That resolution can be.

Gustavo: Again, Richard in the first half of this year.

Gustavo: So we are working hard it's our interest it's the interest of our partners and we see the interest in.

Gustavo: So in all of the stakeholders to be able to reach a resolution there and thats what were working towards.

Gustavo Pimenta: We continue to expect that a settlement will be reached, and we are hopeful that a resolution can be reached again in the first half of this year. So we are working hard. It's in our interest and it's in the interest of our partners. And we see the interest of all the stakeholders to be able to reach a resolution there, and that's what we are working towards. Next question from Rodolfo Angeli with JP Morgan. You can activate your microphone.

Gustavo: Yeah.

Speaker Change: Next question from <unk> <unk> with J P. Morgan you can activate your microphone.

Speaker Change: Hi.

Speaker Change: Good morning, everyone. So I have two questions.

Speaker Change: The first one.

I wanted to ask two to Carlos Medeiros if possible.

Speaker Change: My question is the following I think.

Speaker Change: Investors have been.

Rodolfo Angeli: Hi, good morning, everyone. So I have two questions. The first one I wanted to ask Carlos Medeiros, if possible. My question is the following. I think investors have been expecting not a lot from Vale at the end of the day given all the challenges that the company faced on the operating side. But it seems like what we saw in the fourth quarter this year kind of starts to, at least here, we are happy to see that the company is kind of fighting a little bit the traditional seasonality that we see, especially in the fourth and, hopefully, in the first quarter of the year. So my question to you would be, can you talk a little bit about initiatives, what's being done? Is this number that we saw already in the fourth quarter already kind of showing the results of the efforts that we're making by your team at Vale? So that's question number one, and my second question would be to Spinelli.

Speaker Change: Expecting not a lot from valley at the end of the day given.

The child interest that the company faced on the operating side.

Carlos Medeiros: But it seems like.

Carlos Medeiros: What we saw in the fourth quarter this year.

Carlos Medeiros: Kind of starts to at least.

Carlos Medeiros: The here we are.

Speaker Change: Happy to see that.

The company is kind of fighting a little bit the traditional seasonality that we see.

Speaker Change: Especially in the fourth and hopefully in the first quarter.

Speaker Change: The year so.

Speaker Change: My question to you would be can you talk a little bit about initiatives, what's being done.

Speaker Change: A number that we saw already in the fourth quarter.

Speaker Change: Already kind of.

Speaker Change: Uh huh.

Speaker Change: Showing the results of efforts that we're taking.

Bye.

Speaker Change: Your team at wildly so that's question number one.

Speaker Change: And my second question would be two two spinelli I wanted to hear from you.

Carlos Medeiros: I wanted to hear from you about what's going on in terms of Sudan in China. And we leave the ex-China piece of the equation, which is quite relevant, a little bit on the sidelines. So if you could comment on what you're seeing, that would be very helpful. Thank you very much.

Speaker Change: About we discuss a lot about what's going on in terms of supermini, China and we leave the ex China piece of the equation, which is quite relevant.

Little bit on the sidelines.

Spinelli: If you could comment on what Youre seeing.

Speaker Change: That would be very helpful. Thank you very much.

Speaker Change: Thank you for your question.

Carlos Medeiros: Rodolfo, thank you for your question. First, our performance in Q4 was solid, and this is due to all the efforts in reliability that we've been working on in all systems and also in our seasonality plan. This comprises several initiatives, but maybe I would highlight in our minds a careful management or control of our water levels in order to keep the bottom of our pits in good working conditions for as long as possible, and also, making sure that we have free ore available at the top of the pit to use whenever needed. Also, some important actions in terms of mine infrastructure. Make sure that they are well maintained in the depots.

Speaker Change: First our outperformance on Q4.

Speaker Change: Solid and.

Speaker Change: Tim.

Speaker Change: This is true all the airports.

Speaker Change: Reliability that we've been working on.

Speaker Change: And all systems and also.

Speaker Change: <unk> seasonality.

Speaker Change: Hum.

Speaker Change: Comprises several initiatives.

Speaker Change: We'd be able to highlight in the mine and the mine.

Speaker Change: <unk>.

Our careful management and control of what collateral in order to keep the bottom oval.

Speaker Change: In good working conditions for as long as possible.

Speaker Change: And also.

Speaker Change: Making sure that we have a free or available at the top of the pits to use whenever needed.

Speaker Change: Also some important actions in terms of mine infrastructure.

Speaker Change: Make sure that they are weldment paint.

And the port.

Speaker Change: We have.

Carlos Medeiros: We have a dry corrective material in our stocks there to blend with more humid ore and also improve drainage conditions at the port. So all this together led us to stronger results in... in Q4 and also sustaining our performance during Q1. So, this is... Although this is an El Nino year, but in theory, and in theory, it should rain more in the north.

Speaker Change: Dry corrective material.

Stock spirits blend.

Speaker Change: With more humid or so and also improve granted trainers conditions.

Speaker Change: At the Port So all these together.

Speaker Change: Due to stronger results in.

Speaker Change: Sure.

Speaker Change: In Q4, and also sustaining outperformance during Q1 so.

Speaker Change: This is <unk>.

Speaker Change: Although disease El Nino year.

Speaker Change: But in theory in theory, it should remain more north.

Carlos Medeiros: It should rain less in the north and more in our south and southeastern systems. What we are seeing is the opposite. It's raining a lot more in the north, but still, our plans are proven to be sound and ensuring a good start of the year everywhere, so I'll pass to Spinelli. Thank you, Rodolfo, for your questions. And talking about China and ex-China demand and supply demand, I think last year we could see the residence of China. Yeah, we mentioned that. So we have this soft landing of property markets, harder lending for private borrowers, but partially offset by social housing and the SOEs.

Speaker Change: Randall should rain less in the north and more in all of our bin false Eastern systems.

Speaker Change: We are seeing is the opposite.

Speaker Change: It's really a lot more in the north.

Speaker Change: Our.

Speaker Change: Glenn's proven to be found and ensuring.

Speaker Change: A good start of the year.

Speaker Change: Everywhere.

Speaker Change: So I'll pass through Spinelli.

Spinelli: Thank you for your question so.

Spinelli: And.

Speaker Change: Talking about China in the next China demand and supply diminishing less vehicles see the.

Speaker Change: The resilience of China, Yes, we mentioned that so we have this soft lending proper to market's hard to lead digital private.

Speaker Change: Partially offset by the social housing in and do that.

Speaker Change: So they.

Marcello Magistrini Spinelli: They turn around their industry pattern. So we see a lot of growth in the industry, and for the auto industry, for the energy transition, small appliances, and the infrastructure play an important role. This is the pattern that we see for next year, for this year, and for 2024, and we have an upside risk depending on macro definitions. We have two sessions coming in early March that will reinforce the commitment of the government to the policies, and we can have this effect of the stimulus coming from the second half. All of this together last year, we saw a lot of the micro-indicators that, you know, blast furnaces, inventories, that would really suggest that we could have higher production than was announced, but we believe that will be the same for 2024. You touched on a point that is important. I want to emphasize two points here. One is that you mentioned ex-China.

Speaker Change: <unk> turned it around the.

Speaker Change: Industry partners. So we see a lot of growth in the industry.

Speaker Change: And for Alto for energy transition small appliances and the infrastructure.

Speaker Change: Later the important role.

Speaker Change: This is the pattern that we see for next year for this year for 2004.

Speaker Change: And we have an upside.

Speaker Change: <unk> depend on like.

Speaker Change: Macro definitions, we have two sessions coming in early March that we will reinforce the commitment of the government to.

Speaker Change: To the policies and then we can have this effect of his team of those coming from the second half.

Speaker Change: All of this together last year, we saw a lot of the micro indicators debt.

Speaker Change: Less furnaces inventories depth.

Speaker Change: Really.

Speaker Change: Suggest that we could have a higher production that wasn't announced that but we believe that will be the same for 'twenty for.

Speaker Change: You touched a point that is important I want to emphasize two points here. One is you mentioned ex China.

Marcello Magistrini Spinelli: We have a rebound in ex-China, so more than 5% growth is expected for ex-China in 2024. Part of that is coming from the developed countries that were in a lower basin last year, but they are starting to grow. We see this in Japan, and we see this in Europe.

Speaker Change: We have a rebound in ex China, so more than 5% growth is expected for ex China in 2004.

Speaker Change: Part of that is coming from the developed.

Speaker Change: Countries that this from a lower base in last year, but they will you started to grow we have received is in Japan with cities in Europe.

Marcello Magistrini Spinelli: And the stars are still India, MENA, and also Southeast Asia. What is important is... For Vale, we are really supporting this growth next, China, if you consider the mix that we have in China. We are moving 5 to 10 percentage points of sales to ex-China. That's very important to understand. That brings me to the second point I want to emphasize, that the market is tight, and it will be tighter in Asia. Uh... supply side, we don't have any uh... any uh... for the news. Actually, the main increase is coming from Brazil from us. And what we see, Australia is flat, and even India now is also focused on its domestic market. And what I want to emphasize is that we are now supplying the ZEX China with new services. We have now BRBF in Europe, in one part sold out.

Speaker Change: And the stars are steel, India Man and also the salt a seizure what is important this.

Speaker Change: For <unk>, we are really supporting this growth next China.

Speaker Change: Considering the mix that we have ex China and China.

Speaker Change: We are moving five to 10.

Clients Spencer best vintage points of sales two ex China.

Speaker Change: Very important to understand that we will bring the second point I want to emphasize that the market is tight and there will be tighter in Asia.

Speaker Change: Supply side, we don't have any.

Speaker Change: Any.

Speaker Change: Good news.

Speaker Change: Actually the main increase is coming from from Brazil from us.

Speaker Change: And what we see Australia is flat and even India.

Speaker Change: Now is.

Speaker Change: Also focused their domestic market.

Speaker Change: What I want to emphasize that we are now supplying this ex China with new services, we have now be rbf.

Speaker Change: Europe in one ports sold out.

Marcello Magistrini Spinelli: We are now opening another port for that, Blandin. We're using Oman as also a distribution center to feed India. So this is an important change in the map of the world to supply that supports the view that we have a very tight market for this year. Thank you. Next question from Daniel Sasson with Itao BBA. You can activate your microphone.

Speaker Change: <unk> now opened another poor for deaths blending using a month as is.

Speaker Change: Also a distribution center to feed India.

Speaker Change: So this is a.

Speaker Change: An important change in the map of the world to supply.

Speaker Change: That support the view that we have a very tight market for this year.

Speaker Change: Thank you.

Speaker Change: Next question from Danielle <unk> with <unk> BBA, you can activate your microphone.

Daniel Sasson: Hi everyone. Good morning. Thanks for taking my question. My first question is actually related, but it's more on the strategic front. If you guys, how do you guys see other potential deals like the one you just announced yesterday with Anglo-American in regards to unlocking value and growth for Vale? Do you see room to maybe incorporate other assets that maybe are not next in line for you to develop in partnerships like the one you just signed yesterday? Because it does seem like an interesting way to, you know, maybe accelerate the monetization of assets that you might not monetize in the short term, right? So that's my first question. And my second question, Leo asked you about one of the overhangs that we've been asked about by investors, which was Samarco, and you explained it. Maybe if you could comment a bit on the two decisions, four decisions yesterday that suspended your licenses in Sosego and Sapuma. How do you see that?

Danielle: Hi, everyone. Good morning, Thanks for taking my question.

Danielle: My first question is actually related it's more of a strategic fronts.

Danielle: If you guys how do you guys see.

Danielle: Other potential deals like the one you just announced yesterday with emblematic.

Danielle: To unlock some value and growth.

Danielle: Volume.

Danielle: See room to maybe.

Danielle: Operate on their assets that maybe are not next in line for you to develop in partnerships like the one you just signed.

Yesterday, because it does seem like an interesting way to.

Danielle: Maybe accelerate.

Accelerate the monetization of assets that you might have not.

Speaker Change: Monetize any short term Brian So that's my first question and my second question.

Speaker Change: <unk> asking about that one of the overhangs that we used to be in that.

Speaker Change: About by investors, which was symbiotic when you explained.

Speaker Change: If you could comment a bit on the two decisions.

Speaker Change: Our decisions yesterday that suspended your licenses. So stayed went off on sarcoma.

Speaker Change: How do you see that the companies Inc.

Eduardo Bartolomeo: What's the company's take on the potential of keeping those operations halted for some time? Or do you guys have any expectations of resuming operations in those regions soon? That would be great. Thank you so much. Thanks, Daniel. Here's Eduardo.

Speaker Change: On.

Speaker Change: The potential of keeping those operations halted for for some time or do you guys have any expectations of resuming operations Sandoz region soon that would be great. Thank you so much.

Speaker Change: Thanks Danielle.

Eduardo Bartolomeo: Thanks for the question. I think you nailed the point. I think since we arrived, you've been seeing our movements, right? We reshaped the valley profoundly.

Speaker Change: Thanks for the question I think.

Speaker Change: You nailed the point I think.

Speaker Change: Since we arrived.

Speaker Change: <unk> seen our movements right.

Speaker Change: Reshaped the bally profoundly with sold than business that were not related to our core we ended up with two unique platforms that by themselves could be enough to us to sustain our growth but of course, when you see an opportunity like this one that envelope and thats, what we call the smart <unk>.

Eduardo Bartolomeo: So, 10 businesses that were not related to our core, we end up with two unique platforms that, by themselves, could be enough for us to sustain our growth. But, of course, when you see an opportunity like this one in Anglo, that's what we call smart M&A, right? It's a win-win situation for both companies. A world-class asset is sitting there. We have the logistics. They have already installed their mine.

Speaker Change: Right, it's a win win situation for both companies.

Speaker Change: World Class asset is sitting there we have the logistics they have already installed there mining. So obviously, we anticipate a lot and this is the kind of deal that we are going to search for more sure.

Eduardo Bartolomeo: So, obviously, we anticipate a lot. And this is the kind of deal that we are going to search for, for sure. But again, as I mentioned before, we still have a lot on our plate. As a competitive advantage, we are the lowest by ton growth in iron ore in any comparison that you will do. You look at PANEMA, you look at VAGEN GRANDE, you look at S11D plus 20. But, of course, we can look at Anglo and others that are adjacent to our business. If we move to the base metals, we see this in exactly the same way.

Speaker Change: But again as I mentioned before we still have a lot in our plate with assets.

Speaker Change: The competitive advantage we are the lowest.

Speaker Change: Bites on growth in iron ore demand a comparison that you would.

Speaker Change: Do you look up on Irma you look good.

Speaker Change: Good and you look at.

Speaker Change: <unk> plus <unk>, but of course, we can look at the ongoing others. There are adjacent to our business.

Speaker Change: Move to the base metals, we see this is exactly the same way we see it we say Yahoo in Indonesia, we look for partners always.

Eduardo Bartolomeo: We say, who in Indonesia, we always look for partners. We are a value creation, how can I say that, animals. We want to create value for our shareholders, for our society, and we don't care. We do care with whom we partner with, but we can make partnerships. We believe this is the way to go. If we want to meet the demands of the energy transition, that is a huge challenge for the whole industry to do, and if we can accelerate and do it better, we will do it. Now, I'll pass the question to Mark, as he's leading the base metals business, and he's more close to the discussions around Salobo, Suarezo Cego, and Oceano. Thanks, Eduardo. Can you hear me okay?

Speaker Change: We are we have a value creation.

Speaker Change: How can I say that the animals, we went to create value for our shareholders to our society and we don't care.

Speaker Change: We do care with <unk>.

Speaker Change: We've partnered with but we can do partnerships. We believe this is the way to go if we went to meet the demands for energy transition that is a huge.

Speaker Change: Challenge for the whole industry to do in iron ore is there and we can exit based on salary and with better we would do it and I'll pass the question to Mark.

Mark: As he is leading the base metals business.

More close to the discussions around <unk>, so as far as will said window. So Paulo.

Paulo: Thanks, Ed.

Paulo: Can you hear me okay.

Mark James Travers: Good Look, thanks for the question. I've been working in and around and for Brazil for 18 years, so I always make sure I look at these things as they stand. At this stage, based on the feedback from the Environmental and Sustainability Office for PARA, we don't have anything that indicates any environmental or social breach. I think that's the most important thing and message that I wanted to make sure people understood. The first-hand feedback is that there could be an administrative question about how we've reported processes over the last 12 to 18 months, and so we're making sure that we understand the issue and if there's anything in the paperwork that we need to correct, but at this stage, again, nothing material has been flagged, so we'll work with the authorities to make sure we satisfy their requirements.

Mark: Thanks for the question I've been working in and around and with Brazil for <unk>. So I always make sure I look at these things as they stand.

Mark: At this stage based on the feedback from the environmental and sustainability office for <unk>.

Mark: We don't have anything that indicates any environmental or social breach I think that's the most important thing.

Mark: Ed message that I wanted to make sure people understood. The firsthand feedback is we could they could be and administrative question on how we've reported.

Mark: Processes over the last 12 to 18 months and so we're making sure that we understand the issue and if there's anything in the paperwork that we need to correct, but at this stage.

Mark: Again, nothing material has been flagged so we'll work with the authorities to make sure we satisfy their requirements I think that's very important and we will always be respectful of the requirements that are put on us. So we'll make sure if anything is wrong with it will be corrected.

Mark James Travers: I think that's very important, and we will always be respectful of the requirements that are put on us, so we'll make sure if anything's wrong, it will be corrected. From our point of view, we're making sure the operations are in good shape. We've got the furnace shut down at Onsapuma, and so we're not immediately impacted, and we also have some maintenance scheduled for Sasego coming up, so again, we'll make sure we work around those issues, and we'll work to resolve these issues quickly and appropriately with the authorities.

Mark: From that point of view, we're making sure the operations.

Mark: In good shape, we've got the furnace shutdown at present at answer Puma and so were not immediately impacted and we also have some maintenance scheduled for <unk> coming up. So again, we will make sure we work around those issues and we'll work to resolve these issues quickly and appropriately with the authorities.

Mark James Travers: Thanks. Next question from Amos Fletcher with Barclays Bank. You can activate your microphone.

Next question.

Speaker Change: <unk> from almost Fletcher with Barclays Bank.

Speaker Change: Connect is it your microphone.

Speaker Change: Okay.

Amos Fletcher: Yes, good morning and good afternoon, everyone. I had a couple of questions. The first one was just around Simarco, where I see you've raised your provision with these results, but not to the same level as BHP, who just increased their provision to $6.5 billion earlier this week. Can I just ask why the difference between those two?

Fletcher: Yes. Good morning, good afternoon, everyone I had a couple of questions first one was just around.

Fletcher: Marco.

Fletcher: You've raised your provision with these results, but not to the same level of BHP.

It would just increase that provision of $6 $5 billion earlier this week.

Why the difference between those two.

Amos Fletcher: And then my second question was just on the nickel assets. Obviously, a number of nickel mines are shutting down globally at the moment, and when we look at the results for Vale, you can see that at Supuma, Voices Bay, Long Harbour, we're all EBITDA negative in Q4. Nickel prices on average so far this year are below Q4 levels.

And then my second question was just on the.

Fletcher: Nicole assets.

Fletcher: Obviously, a number of nickel mines being shutdown globally at the moment.

Fletcher: When we look at the results of all that you can see narrow answer Puma voices very long call, but overall EBITDA negative in Q4 nickel prices on average so far this year below Q4 levels.

Amos Fletcher: Would you consider idling any of the nickel assets? Thanks very much. Thanks, Amos. I'll do this on Marco, and then Marco will do the Niko one.

Speaker Change: Would you consider idling any of the nickel assets, thanks very much.

Speaker Change: Thanks Thomas.

Speaker Change: Although there are some macro and then <unk>.

Speaker Change: Mark will do the <unk>.

Speaker Change: <unk> so look on the provision.

Gustavo Pimenta: So, look, on the provision, what we've added, the $1.2 billion, is based on our best estimate today. It certainly, as you may appreciate, incorporates, and it's subject to assumptions and judgment that could be fair, depending on how we look at that.

Speaker Change: Why do we have added the $1 $2 billion is based on our best estimate today.

Speaker Change: Certainly as you may appreciate incorporates and it's subject to assumptions and judgment that could defer depending on how we look at that.

Gustavo Pimenta: One of them, for example, is how much Samarco can contribute to the case as the primary responsible for those payments. Samarco is doing very well. Last year, they produced around nine million tons. Second concentrators are coming online early next year and will take the production to between 14 to 16 million tons, and by 2028, San Marco will be producing 28 million tons of high quality product. So we believe San Marco has a very solid path to be able to contribute to the case. That could be one of the differences, and we've used it before.

Speaker Change: One of them for example is how much sammarco can contribute.

To the case as the primary.

Speaker Change: Responsible for those payments Ryan <unk>.

Speaker Change: <unk> was doing very well last year, they produce at around 9 million tonnes.

Speaker Change: Second concentrator is coming online.

Speaker Change: Early next year, and we will take the production to between 14% to 16 million tonnes and by China 28, seven Mac will be producing 28 million tons of high quality.

Speaker Change: Product, so we believe San Marco.

Speaker Change: Has a very solid path to be able to contribute to the case that could be one of the differences and we views it.

Gustavo Pimenta: For the assumption that we have in our numbers, we've used their approved business plan to base our provision. So, I think what is important to say here is that we continue to perform on the TTAC, right? That's the most important thing. We will continue to be highly committed. Eduardo quoted some numbers, 470,000 people being compensated already, $35 billion in investments, and 85% of the housing is being finalized. So, that puts us on a good path to continue to deliver on their great programs. So with that, I'll ask Mark to help us with the NICO answer.

Speaker Change: For the assumption that we have in our numbers we've used it there approve it business plan to base, our our provision. So I think what is important to say here is that we continue to perform on their T Tech right. That's the most important thing we continue to be highly committed.

Speaker Change: That's why I quoted some numbers for 170000 people being compensated already $35 billion of investments, 85% of the housings have been finalized so that that put us.

Speaker Change: And in a good path to continue to deliver on the agreed programs. So with that I'll ask Mark <unk> to help us on the nickel answer.

Mark James Travers: Thanks, Gustavo, and thanks for the question. First, the way we look at the business, we see three parts of the business. First, we have copper, and you can see the copper assets in Brazil in good shape, lots of improvements possible, and from our perspective, if anything, the risk is probably the upside on price. That's the good news for us.

Mark: Thanks Gustavo.

And thanks for the question Firstly the way we look at the business, we see three parts of the business Firstly.

We have the copper and you can see the copper assets in Brazil in good shape lots of improvements possible and from our perspective.

Mark: If anything the risk is probably the upside on pricing that's the good news for US we've got.

Mark James Travers: We've got nickel and copper assets in Sudbury and Lousie Bay, and so it's not simply a nickel story. We have to remember that how we improve our recoveries on copper, PGMs, cobalt, and other products is really important. We're also working very hard on where we send materials in the flow sheet, so looking to improve our realized prices. As you recall, Eduardo and Gustavo flagged the 7% premium on LME

Mark: Nickel and copper assets in Sudbury, and voice you buy and so it's not simply a nickel story. So we have to remember that how we improve our recoveries on copper pgm's cobalt and other products is really important. We're also working very hard on where we send materials in the flow sheet. So looking.

Mark: To improve our realized prices and as you recall Eduardo and gustava flagged the 7% premium on MMA process. That's important to continue to improve that and say for example.

Mark James Travers: It's important to continue to improve that. For example, maybe pushing some material from Mons Supuma up through Long Harbour and looking at other innovative options to improve our realized prices as part of our strategy. Third, we've got the nickel assets, Manitoba, and Mons Supuma more specifically, and I've talked a little bit about Mons Supuma already. We've obviously got work to do at Manitoba, and if we look at the asset review, we see in the next two to three years a 20 to 30 percent productivity improvement potential across the assets. If I translate that into an operating cost reduction, that's about 15 percent. So the question for us is how quickly can we get those assets down that cost curve? How do we make sure we don't do anything that would hinder our travel toward those costs?

Mark: Might be pushing some material for most of whom are up through long harbour and looking at other innovative options to improve our realized prices as part of our strategy.

Mark: And then third wake up the nickel assets, Manitoba answer Puma, most specifically and I've talked a little bit about answer Primrose already we've obviously got work to do at Manitoba, and if we look at the asset review.

Mark: We see in the next two to three years 'twenty.

Mark: 20% to 30% productivity improvement potential across the assets.

Mark: If I translate that into an operating cost reduction that's about 15%. So the question for US is how quickly can we get those assets down that cost curve.

Mark: How do we make sure we don't do anything that would hinder now travel toward those cost, but at the same time, let's pull out belts in taught to see if we can make sure that we don't lose any cash on the way through so that's the process that we're going through and we will answer each of those questions at the midyear when we give you the answer.

Rafael Barcelos: But at the same time, let's pull our belts in tight to see if we can make sure that we don't lose any cash on the way through. So that's the process that we're going through, and we'll answer each of those questions at the mid-year when we give you the asset review update because they all connect and are really important. But the most important point is the asset review is taking us in the right direction; we've just got to get there as quick as we can. Next question from Rafael Barcelos with Bradesco BBI. You can activate your microphone.

Mark: That review update because they all connect and a really important but the most important point is the asset review is taking us in the right direction, we're just going to get there as quick as we can.

Mark: Next question from <unk> <unk> with Bradesco BVI, you can activate your microphone.

Yeah.

Rafael Barcelos: Good morning and thanks for taking my questions. I have two quick follow-ups here. First of all, could you please elaborate further on quality premiums for 2024? It would be interesting to hear about that more. And my second question is about cost.

Speaker Change: Hello, Good morning.

Bradesco BVI: Thanks for taking my questions I have two quick follow ups here I mean, firstly could you. Please elaborate further on quality premiums for 2024, it would be interesting to.

Speaker Change: To hear about that and my second question is about cost could you. Please comment a bit more amount say one cost trends more towards 2000 2040, particularly on what Youre seeing now in the beginning of the year.

Rafael Barcelos: Could you please comment a bit more about C1 cost trends for 2024, particularly on what you're seeing now in the beginning of the year? Other than that, in 2023, you delivered costs slightly below the guidance. So just to understand if you see any upside risks in C1 costs for 2024. Thanks. Thank you, Rafael. Spinelli here.

Speaker Change: Other than that in 2023, you delivered cost was slightly below the guidance.

Speaker Change: So just to understand if you see any upside risks.

One costs fourth quarter 2024.

Speaker Change: Thanks, Rafael Spinelli here. Thank you for your question so.

Marcello Magistrini Spinelli: Thank you for your questions. Regarding premiums, let's remind you the main..., uh, contributors to higher premiums, so the cost of energy, that is, the cost of coal that is at a low level compared to the past, the necessity to improve the efficiency of production, that they are in full operation, but on the other hand, the margins and the cost mood that they are now facing. We don't see any major change in the first half regarding premiums, as we have this low margin in the industry in China. We can have an upside risk for the second half, as I mentioned, due to all the macro actions, the main effects uh from the stimulus and infrastructure are leading uh uh an important growth for this year, so we can have some uh extra uh or an upside race for that, but we see this level We, uh, on the other hand, are really, uh, you know, bullish on that. Rack production is really under pressure.

Speaker Change: Regarding premiums.

Speaker Change: Remind you of the main.

Marcello Magistrini Spinelli: Contributors for for higher premiums will show the cost of energy that's the cost of cold at this low level comparing.

Rafael Spinelli: Comparing to the best.

Rafael Spinelli: The necessity to improve the efficiency of the production.

Rafael Spinelli: That they are in full operation.

But on the other hand the margins.

Rafael Spinelli: The cost mode mood that day.

Rafael Spinelli: They are now facing so.

Speaker Change: We don't see.

Speaker Change: Any major change in the first half.

Speaker Change: Regarding the premiums.

Speaker Change: As we have this this low margin in the industry in China.

We still have an upside risk for the second half as I mentioned.

Due to the all the macro actions the main effects.

Speaker Change: From the stimulus and infrastructure of infrastructures.

Speaker Change: In.

Speaker Change: An important growth for this year. So we can have some.

Speaker Change: Xtra.

Speaker Change: And the upside risk for that.

Speaker Change: But we see this level of premiums flat and.

Speaker Change: Yes.

Speaker Change: In this moment.

Speaker Change: Premiums for pellets we.

Speaker Change: On the other hand, we are really.

Speaker Change: Bullish for that.

Speaker Change:

Speaker Change: Direct reduction is really.

Speaker Change: Under pressure production in Middle East.

Marcello Magistrini Spinelli: Production in the Middle East and the U.S. is doing really well, so it's reporting a high level of premiums. And for blast furnaces, we also see a rebound as ex-China and Asia like Japan or in Europe are now demanding more the blast furnace ballot. And as we have the possibility of a narrow discount for high silica ores, we'll take advantage of that. And we can use our supply chain, our flexibility in our portfolio to maximize the margin if you keep this scenario of low margins in steelmaking in China. So, Rafael Gustavo here, just to compliment you on the cost question.

Speaker Change: U S studies going really well, so supporting a high level of premiums.

Speaker Change: For blast furnaces.

Speaker Change: So see a rebound.

Speaker Change: Yes.

Speaker Change: Ex China and in Asia, like Japan or in Europe are now.

Speaker Change: Demanding more.

Speaker Change: Yeah.

Speaker Change: The blast furnace pellets and as we have.

Speaker Change: The possibility of narrow discount for high silica or us, we'll take advantage of that.

Speaker Change: And we can use our supply chain, our flexibility in our portfolio to maximize the margin.

Speaker Change: If you keep this scenario of low margins in the steel making in China.

Speaker Change: So Rafael will stifle here just to complement on the cost question. Yes look we finished on a very strong note.

Gustavo Pimenta: Yeah, look, we finished on a very strong note. In Q4, as I mentioned in my prep remarks, C1 was at $20.8 per ton, getting close to that mark of $20 that we've been going after in the medium term. For this year, I think we're going to have everything looking to be another solid year in terms of cost performance. A lot of the initial um efficiency initiatives that we launched um a year ago or so are bearing fruit now, and we're seeing the we saw we saw some improvements in q4 and we should continue to see some improvements this year, and one thing that is also very helpful is, as Madeiros highlighted, we finished quite strong in Q4. We started the year very strong as well.

Our Q4 as I mentioned in my prepared remarks Q1 was at 20.

Marcello Magistrini Spinelli: $8 per ton getting close to that mark of $20 steadily.

Marcello Magistrini Spinelli: Ben.

Marcello Magistrini Spinelli: Going after in the mid <unk> in the medium term.

Marcello Magistrini Spinelli: <unk>.

Marcello Magistrini Spinelli: For this year I think we.

Marcello Magistrini Spinelli: Going to have everything is looking to be another.

Marcello Magistrini Spinelli: Started the year in terms of cost performance a lot of the initiatives.

Marcello Magistrini Spinelli: <unk> initiatives that we've launched it.

Marcello Magistrini Spinelli: A year ago or so.

Bearing fruits now and Youre seeing the we saw we've seen some improvements in Q4 and it should continue to see some improvement this.

Marcello Magistrini Spinelli: This year and one thing that.

Marcello Magistrini Spinelli: It is also very helpful.

Marcello Magistrini Spinelli: The operational performance right. The Madera has highlighted.

Marcello Magistrini Spinelli: We finished quite strong Q4, we started the year very strong as well so that higher production level is.

Gustavo Pimenta: So that higher production level is also very helpful in terms of diluting our unit cost. And that's what we're expecting. Keeping in mind that Q1 is usually a quarter where we have higher costs, given the lower production levels, but we are trending in the right direction and are super confident with the numbers that we had highlighted. Next question from Myles Alsop with UBS. Now you can activate your microphone. Great, thanks. Can you hear me?

Marcello Magistrini Spinelli: It is also very helpful in terms of diluting.

Marcello Magistrini Spinelli: Our unit cost and that's what you're expecting at.

Marcello Magistrini Spinelli: Keeping in mind that Q1 is usually a quarter, where we have higher costs given the.

Marcello Magistrini Spinelli: The lower production level, but we are trending in the right direction and.

Marcello Magistrini Spinelli: Super confident with the numbers that we have highlighted before.

Marcello Magistrini Spinelli: Next question from Myles Allsop with UBS, you can activate your microphone.

Myles Allsop: Great. Thanks can you hear me.

Myles Alsop: Yeah. Ah, excellent. So maybe just first, Eduardo, certainly the data supports you've been doing a great job from a safety perspective, from a production perspective, and from a simplicity perspective, but then there is this debate around whether your contract will be renewed in May. So, I mean, I guess it's the board's decision, ultimately, but from your own perspective, do you think there are another five years in you to kind of take Vale to the next level Are you keen to stay if the board will keep you? Okay, thanks, Myles. Of course, as you already mentioned, it's not up to me to comment on that or even the sea level.

Myles Allsop: Yes.

Myles Allsop: Excellent.

Myles Allsop: Maybe just just first Eduardo.

Myles Allsop: Yes.

Myles Allsop: Suddenly the data supports that <unk> been doing a great job from a safety perspective from a production perspective simplicity, but then there is this debate around whether your contracts will be renewed in may. So I mean, I guess its the boards decision ultimately, but from your own perspective do you think there's another five years and you too.

Myles Allsop: Take Vale to the next level of you came to stay if the board will keep here.

Speaker Change: Okay. Thanks miles.

Speaker Change: Of course as you already mentioned is not up to me to comment that not even the C level. It's a board decision and we're pretty confident that the board is taking it very professionally.

Eduardo Bartolomeo: It's a board decision, and we're really confident that the board is taking it very professionally, on the right path. Specifically, about the business, I think this is the most important question that you asked me, because we are really focused in respect of... made to take Vale and run Vale safely, focused, and towards the strategic goals that we set. And that's what we're doing now, and we're really focused. Okay, thanks. Next question from Carlos de Alba with Morgan Stanley. You can activate your microphone.

Speaker Change: On the right way.

Speaker Change: Specifically about the business I think this is the most important question that you asked because.

Speaker Change: Because we are really focused irrespective of decisions being made to take bally and <unk> safely focused and.

Towards this strategy goals that we set.

Speaker Change: What we are doing now and really focus on that okay. Thanks for the question.

Speaker Change: Next question from Carlos de Alba with Morgan Stanley you can activate your microphone.

Speaker Change: Okay.

Speaker Change: Alright, yes. Good morning, everyone. Thank you a couple of questions one.

Carlos de Alba: All right, yeah. Good morning, everyone. Thank you. I have a couple of questions. One, Eduardo, I just wanted to get your views as to what is going to happen with the Valley Basementals CEO position. I know Mark is the chairman of the board, and he's very engaged. If he's going to have an expanded role and act also as, or remain also CEO, or the company is still looking, the board of Basementals is looking for a CEO.

Speaker Change: Eduardo I just wanted to get your views.

Speaker Change: As to what is going to happen we debate.

Speaker Change: Other base metals CEO position I know Mark is.

Speaker Change: Chairman of board and he's very engaged.

Speaker Change: If you're going to have expanded role and act also as or remain also CEO or.

Speaker Change: The company still look in the border.

Speaker Change: If you're looking for a CEO.

Eduardo Bartolomeo: Yeah, just some clarification there would be great given the relevance of executing in that business. And my second question is around the JV with Anglo-American, very interesting for sure. Is there any timing for the Serpentina development and expected CapEx, potentially, that you can, at this point, highlight to us? Thanks, Carlos.

Speaker Change: Yeah, just some clarification there will be Greg given the relevance of executing in that business.

Speaker Change: And my second question.

Speaker Change: The JV with Anglo very again very interesting for sure is there any timing for this therapy development and expected capex potentially in.

Speaker Change: That you can at this point highlight to us.

Speaker Change: Okay. Thanks, Scott.

Speaker Change: First of all I think yeah yeah.

Eduardo Bartolomeo: We are looking for the CEO for sure. We have a final list, by the way, and very soon, we're going to be able to announce it. And I think Mark can help me, by the way; we are a team here. I think Mark came to us, and we're very grateful and thankful that he accepted to join us to bring his 40-plus years of experience. I think he wants to mentor people, he wants to translate, and I think... How could I say that in English?

Speaker Change: Youre right, we are looking for the CEO for sure.

Speaker Change: We have a final list by the way very soon and we are going to be able to announce it and I think mark can help you by the way. We are we had team here I think Mark Kaye Mas.

Speaker Change: We are very grateful and thankful that he accepted to join us to bring his 40 plus years of experience I think is he wants to manage people he wants to translate.

Speaker Change: Thank you.

Speaker Change: How could I say that in English.

Eduardo Bartolomeo: take somebody, to other people, his knowledge. So I think we are well, very well designed on who is who in the organization. For sure, we're looking for a strong, rounded CEO, but I can, I have zero doubt that Mark will be of great help in mentoring and teaching this guy. Okay, and if Mark, you want to add something?

Speaker Change: Take to somebody who is the other people at the his knowledge. So I think we are all very well design and who is who in the organization.

Speaker Change: For sure we are looking for a strong around the CEO, but I can't I have zero doubt that mark will be of great help on mastering and teaching this guide.

Speaker Change: And then if mark wants to add something.

Speaker Change: Yeah.

Speaker Change: Okay.

Mark James Travers: I think managing the transition is something that we're planning very carefully. We've got myself and a couple of other very experienced people that can help mentor and support people through the transition. So we think the transition will be managed very carefully, but we shouldn't be far off making announcements. It's very important to get the right person in the role and manage the transition well, and we're planning for that. And we'll probably do a little bit more in that process. Okay, thanks, Mark. And I'll ask Gustavo to give you some more color on the JV and expectations for investment in Minnesota. So Carlos, good morning.

Mark: I think managing the transition is something that we're planning very carefully.

Mark: We've got myself in a couple of other very experienced people that can help mentor and support people through the transition. So we think the transition will be managed very carefully.

Mark: But we shouldnt be far off making asked but very important to get the right person in the row and managing the transition well and we're planning for that and we'll probably do a little bit more in that process.

Speaker Change: Okay, Thanks, Mark and I'll ask.

Speaker Change: We'll start to give you some more color on the JV unexpected expectation XOMA of investments.

Speaker Change: And many of you.

Speaker Change: So Carlos good morning, So D.

Gustavo Pimenta: So there is work to be done on the pre-fees and the feasibility works leading to the preliminary license, which we expect to happen within the next, call it five years, up to five years. So we are really seeing this development as being, you know, the early thirties to mid thirties in terms of reaching commercial operations. That's what we're going to work towards and support Anglo on that. In terms of total project cost, I think it's early to say. The team needs to work on the specifics. Certainly, it should be a very equitative development for both companies, right? Because we do, as Eduardo highlighted, it's highly synthetic for both companies. I mean, we have a lot of infrastructure that we can share. That's one of the beauties of this deal.

Carlos Medeiros: There is work to be done on the pre fees and feasibility works leading to the preliminary license that we expect that will happen within the next.

Carlos Medeiros: Call. It five years after two five years.

Carlos Medeiros: So we are really saying this development to be a.

Carlos Medeiros: Early thirties to mid Thirty's.

Carlos Medeiros: In terms of reaching commercial operations, that's what we're going we're going to work towards.

And support the envelope on that.

Carlos Medeiros: In terms of total project cost I think it's early to say that Tim needs to work on the specifics.

Certainly.

Carlos Medeiros: It should be very accretive.

Carlos Medeiros: Development for both Companys strength, because we do as Eduardo highlighted it's highly.

Carlos Medeiros: Senate static for both.

Carlos Medeiros: Suddenly we are have a lot of infrastructure that we can share that as one of the beauties of this of this tailwind we should see that.

Gustavo Pimenta: And we should see that as we take it to the next level. So we'll keep you guys posted as the project evolves. Next question from Marcio Farid with Goldman Sachs. Now you can activate your microphone.

Carlos Medeiros: As we take it to the next level. So we will keep you guys posted as the project evolves.

Carlos Medeiros: Next question from Matt <unk> with Goldman Sachs, you can activate your microphone.

Marcello Magistrini Spinelli: Everyone, good morning. Thank you. Thanks for your time. Quick follow-ups from me. The first one, obviously, as we look into the overall third-party sales for Vale, I think it was just over 25 billion pounds this year. There is obviously strong competition in the trading business as well. It's mostly trusted goods, and CSN is in Brazil. So just trying to understand how we should think about sustainability and, obviously, profitability of this business going forward. Should we expect further growth? Or are we getting close to the peak here? And obviously, in case we see an iron ore price adjustment, where do you think most of these suppliers, the 35 suppliers, would continue to run? In other words, what is the breakeven point for most of those around 50 million tons of volumes coming out of Brazil being sold with no own logistics? That would be great to understand, please.

Hi, everyone. Good morning. Thank you thanks for the time.

Matt: Quick follow ups from me the first one obviously as we look into the overall third party sales for a while that seems was just over 25 million calls this year.

Speaker Change: That is obviously strong competition.

Matt: The trading business as well as multiple Chuck Gordon Smith things in Brazil.

Matt: Just trying to understand how should we think about sustainability and obviously profitability of this business going forward.

Matt: Should we expect further growth or are we getting close to the peak here.

Matt: All of them in case, we see.

Matt: On the iron ore price adjustment.

Matt: Where do you think most of these suppliers right the third party suppliers.

Matt: <unk> continue to run right.

Matt: Other words, what are what is the breakeven for most of those around 50 meter cones volumes coming out of Brazil.

Matt: Being being sold with no.

Speaker Change: All right.

Would be great to understand and.

Marcello Magistrini Spinelli: And secondly, Gustavo, you just talked about Minas Feu JV. So, just a quick follow-up here. I think the idea, obviously, you talked about potential partnership, but is there anything else that you are progressing towards getting closer to a final finalization? I know Mark had mentioned potential partners with Glencore in Canada as well.

Speaker Change: And secondly, I know it will start where you just talked about.

Speaker Change: <unk>.

Speaker Change: JV.

Speaker Change: So just a.

Speaker Change: Quick follow up here.

Speaker Change: August talked about potential partnerships.

Speaker Change: Is there anything else that you.

Who are progressing towards getting.

Speaker Change: Closer toward a final upfront monetization I know Mark has mentioned before potential.

Speaker Change: Potential partnership with Glencore.

Speaker Change: Canada as well.

Marcello Magistrini Spinelli: And then on Minas Feu, it's specifically, obviously, a legacy business and a project that was supposed to be close to 90 million tons of capacity at conception, right? So just trying to understand here, can we see Minas Rio, we know, stepping up and doubling or tripling capacity in the mid to long term here? And what would be the main bottlenecks?

Speaker Change: And then on minutes.

Speaker Change: Clear.

Speaker Change: In our legacy business.

Speaker Change: That was supposed to be close to a 90 minute call Scoposcopy conception right. So just trying to understand can we see minutes video renaud stepping up and doubling our chip loan capacity.

Speaker Change: Mid to long term.

Speaker Change: Uh huh.

Speaker Change: The main bottleneck then this partnership unlock some of these bottlenecks as well please.

Marcello Magistrini Spinelli: And if this partnership unlocks some of these bottlenecks as well, please? Those are my questions. Thank you. Thank you, Marcello. Thank you for your question. Spinelli here.

Speaker Change: Those are my questions. Thank you.

Speaker Change: Thank you Marshall.

Speaker Change: Thank you for a question has been out of here.

Speaker Change: Me.

Marcello Magistrini Spinelli: Let me go through the third party's purchase. So the level of purchase of 25 million tons is quite similar, slightly higher this year. This is based mainly today on a transaction of purchase part; a small part today is based on what you call mini-mines or now a rename of partnerships. You asked Gustavo about other deals. We have small deals with small miners in Brazil where we can bring our assets, like mineral rights, that we can develop together. That's the kind of... relationship.

Speaker Change: Let me go through the third party purchase so the level of approaches.

Speaker Change: 25 million tons is quite similar slightly higher this year.

Speaker Change: This is based mainly today in <unk>.

Speaker Change: In a transaction of purchase.

Speaker Change: A small part today is based on.

Speaker Change: What do you call, many mines or or now a rename of partnerships.

Speaker Change: Hugh.

Speaker Change: <unk>.

Speaker Change: Istanbul ball.

Speaker Change: Other deals we have small deals with small miners in Brazil that we can bring.

Speaker Change: Our asset backed mineral rights that we can develop it together that's the that's the kind of.

Speaker Change: The relationship we have been evolving and developing.

Marcello Magistrini Spinelli: We've been evolving, and developing inside Brazil. So we are opening this market that we can reach another five million, even more. It is based on quality.

Speaker Change: In say, Brazil. So we have opened is market that we can reach another five meetings even more.

Speaker Change: It is based on quality, so remember our strategy, it's not about bringing volume to the market, but bring quality to the market.

Marcello Magistrini Spinelli: So remember our strategy: it's not about bringing volume to the market, but quality to the market. It is about optimization of logistics that implies cost, reduction of cost, and uh, the impact that you have in the community. So we want to move from roads to railroads and also evolve together as an ecosystem. This obviously depends on market conditions and the level of price. We can generate value today. On average, we have $20, $25 per ton, the level of price we have today.

Speaker Change: It is about optimization optimization of logistics that implies and cost reduction of cost and.

Speaker Change: The impact that you have in the community. So we once you move from roles too.

Speaker Change: Railroads.

Speaker Change: And also evolved to get at is ecosystem. So.

Speaker Change: This is.

Speaker Change: Obviously, it depends on the market conditions that level.

Speaker Change: Rice.

Speaker Change: We can.

Speaker Change: Generate value today in average we have 20 to $25 per ton the level of price we have today I'm talking about margins and as we can improve this partnership.

Marcello Magistrini Spinelli: I'm talking about margins, and as we can improve this partnership, rather than keep this old way of having transactions of purchase, we can improve the value for Vale and the value for the partners. So we see a sustainable business at a certain level of price if we have demand for that.

Speaker Change: Other than keep this.

Speaker Change: The old.

Speaker Change: The way to to have transactions of approaches.

Speaker Change: We can improve the value of for a while in developed for departure. So we see a sustainable business and a certain level of price you. If you have demand for that.

Marcello Magistrini Spinelli: Marcello, if I can add maybe just a few bullets to your question. Look, we are looking for... You know, as Eduardo said, it's smart M&A or smart partnerships. I think one of the unique characteristics of Vale, both in our Norris in base metals.

Speaker Change: Marissa if I can add maybe just feel fulfill bullets on your question look we're looking for.

Marissa: That said as Mark M&A or as Mark partnerships I think one of the unique characteristics of both.

Marissa: <unk> in base metals, and one of our key competitive advantages is that we have a very extended flexible.

Gustavo Pimenta: And one of our key competitive advantages is that we have a very extensive, flexible infrastructure. And that's that. So we see a lot of value in base metals, all of you. On your question about Anglo and the 90 million and so on, look, this is a very mature operation today, and Serpentina is contiguous to Minas Rio's operations and highly creative, highly synergetic, as I mentioned before, to their operations. So we feel good about the ability to expand and take the business and help Anglo take the business to the next level. Our next question comes from Timna Tanners with Wolfie Research. You can activate your microphone.

Marissa: Infrastructure right.

Marissa: And that's that so we see a lot of value to.

Community to work with others and the one that.

Marissa: Spinalis highlighting as an example of us leveraging our existing and utilize the infrastructure to capture incremental margins and there'll be others and sometimes through partnership sometimes through M&A. We are keeping our minds very open to it the same applies.

Marissa: For base metals shrimp.

Marissa: On your question on <unk>, and the 90 million and so look this is a very mature operation today.

Marissa: And <unk> is contiguous to manage video operations.

Marissa: And highly accretive highly synergetic as I mentioned before to their operations. So we feel good about the ability to expand.

Timna Beth Tanners: Yeah, great. Thanks very much. Two quick ones for me, I think. One is just backing up to the discussion of the Perah state situation, and obviously I've addressed the Sasego and Ansapuma, but any indication that it could extend to Salobo?

Marissa: And take the business and help I'm going to take the business to the next level.

Marissa: Yeah.

Marissa: Our next question comes from Timna Tanners with wealthy research you can activate your microphone.

Timna Beth Tanners: Yeah, great. Thanks, very much two quick ones from me I think I wanted to just backing up to that discussion is that perhaps the situation.

Mark James Travers: That's my first question. My second question is just if you could discuss any implications for yourselves or for other competitors or customers of some of the blockages in freight globally and how you're dealing with that or how it's impacting your business. That would be great. Thanks very much. Regarding Solobo, it's a federal jurisdiction, so we think it's a different type of conversation.

Timna Beth Tanners: And obviously with <unk> coming up at any indication that it could extend to Salobo. So my first question. My second question is just if you could discuss any implications for yourselves or for other competitors or customers of some of that blockages and freak globally, and how youre dealing with that or how it's impacting your business.

Speaker Change: That'd be great. Thanks, Vince.

Speaker Change: Thanks for the question on Salobo, it's federal jurisdiction. So we think it's a different type of conversation.

Operator: The question and answer section is over. We would like to hand the floor back to Mr. Eduardo Bartolomeo for the company's final remarks. Okay, I think we missed Tina's last question. Go ahead.

Speaker Change: The question and answer session is over we would like to hand, the floor back to Mr. Eduardo Bartolomeo for the Companys final remarks.

Eduardo Bartolomeo: Okay, I think we missed.

Last question when I go.

Eduardo Bartolomeo: Okay.

Eduardo Bartolomeo: Yeah go ahead.

Eduardo Bartolomeo: Yeah.

Timna Beth Tanners: I'm sorry, Timna, talking about the freight market, we don't, we don't see... Actually, a major impact coming from the tensions in the Middle East, the Cape-sized business, we don't see usual trades in that region or that specific place. So the impact that we had in the first half or the first quarter of this year was actually related to Vale. We had an increase in volumes in December, and now we have stability, and we have our own fleet that we see no major, I can say, impact coming from the fundamentals of the freight market. So stability is the name of the game for this year. Thank you, Spinelli. And just to conclude, I think... Last October I said I was really optimistic. I said I had never been so optimistic, and I think now everybody understands why.

Speaker Change: Oh I'm sorry.

Speaker Change: I'm talking about the freight market, we don't we don't see.

Speaker Change: Actually any major impact coming from the tensions in the middle East the Capesize business.

Speaker Change: Not huge we don't see usual.

Speaker Change: Trades in that region or that.

Speaker Change: Specific.

Speaker Change: Place so what the impact is the impact that we had in the first half or the first quarter of this year what is it related to <unk> actually.

Speaker Change: We had an increase of volumes in December and now where we have the stability and we have their own fleet that we see no major.

Speaker Change: I can see impair.

Speaker Change: Impact coming from the fundamentals of freight market. So the stability is the name of the game for this year.

Speaker Change: Thank you it's been added and just to conclude I think.

Speaker Change: Lex October I said that was really optimistic I haven't I said I haven't I have never been so optimistic I think now I think everybody understands why.

Eduardo Bartolomeo: Everything starts to fall in place. I think we've been, and actually, I'm being even more optimistic now because we have been through the rainy season. We have never passed through the rainy season so well.

Speaker Change: Everything starts to fall in place I think we.

Speaker Change: We've been and I actually I'm being even more optimistic now because we have been through the rainy season, we never pass through the rainy season, so well.

Eduardo Bartolomeo: I think all the elements of our strategy are coming together. The reorganization, the energy transition business, is doing well with asset review going on. Our safety, this is the most important thing for me and for Vale. He's doing really, really well. The dams are under control.

Speaker Change: I think all.

Speaker Change: All the elements of our strategy are coming together the reorganization.

Speaker Change: <unk> transitioned business is doing well with the asset review going on our safety. This is the most important.

Speaker Change: Element for me and for what it is doing really really well the dams are under control so again.

Eduardo Bartolomeo: So, again, I think Vale is in a very, very, very unique moment. And thanks again for your attention. And let's see you on the next call. Okay. Have a safe day. The Values Conference is now closed. We thank you for your participation. Goodbye!

Speaker Change: I think volumes in a very very very unique moments and thanks again for your attention and let's see in the next call Okay.

Speaker Change: Safe date.

Speaker Change: The conference is now closed we thank you for your participation.

Speaker Change: Goodbye.