Q3 2025 Vale SA Earnings Call

Speaker #2: Good morning, ladies and gentlemen. Welcome to Vale's third quarter 2025 earnings call. This conference is being recorded and the replay will be available on our website at vale.com.

Speaker #2: The presentation is also available for download in English and Portuguese from our website. To listen to the call in Portuguese, please press the globe icon on the lower right side of your Zoom screen and then choose to enter the Portuguese room.

Speaker #2: Then select mute original audio so that you won't hear the English version in the background. We would like to inform that all participants are currently in a listen-only mode for the presentations.

Speaker #2: 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.

Speaker #2: Including Vale's expectations about future events or results encompassing those matters listed in the respective presentation. We caution you that forward-looking statements are not guarantees of future performance and involve risks and uncertainties.

Speaker #2: To obtain information on factors that may lead to results different from those forecast by Vale, please consult the report's Vale files with the US Securities and Exchange Commission, the Brazilian Comissão de Valores Mobiliários, and in particular, the factors discussed under forward-looking statements and risk factors in Vale's annual report on Form 20F.

Speaker #2: With us today are Mr. Gustavo Pimenta, CEO; Mr. Marcelo Bacci, Executive Vice President of Finance and Investor Relations; Mr. Rogério Nogueira, Executive Vice President, Commercial and Development; Mr. Carlos Medeiros, Executive Vice President of Operations; and Sean Azmar, CEO of Vale Base Metals.

Speaker #2: Now, I will turn the conference over to Mr. Gustavo Pimenta. Sir, you may now begin.

Speaker #3: Hello, everyone. And welcome to Vale's third quarter 2025 conference call. I would like to start by highlighting how excited I am about what we are building at Vale.

Speaker #3: Our vision to become a trusted partner with the most competitive and resilient portfolio in the industry remains solid, and we continue to make significant progress toward this future.

Speaker #3: This quarter, we will once again deliver solid operational and cost performance across the board, and we are on track to deliver all of our guidances for the year.

Speaker #3: We continue to advance our safety agenda, most notably by removing the last dam from an emergency level three. A significant milestone in our de-risking journey.

Speaker #3: Our key initiatives and growth projects are also moving forward as planned. Reinforcing our long-term strategic focus and discipline capital allocation approach. This results gives me great confidence in Vale's future and in the value we are creating.

Marcelo Bacci: Welcome to Zoom. Enter your meeting ID followed by pound. Enter your participant ID followed by pound. Otherwise, just press pound to continue. Please enter the meeting password followed by pound. You have not. The meeting has not started. Please wait or try again later. You have joined the meeting as an attendee and will be muted throughout the meeting. Good morning, ladies and gentlemen. Welcome to Vale S.A.'s third quarter 2025 earnings call. This conference is being recorded, and the replay will be available on our website at vale.com. The presentation is also available for download in English and Portuguese from our website. To listen to the call in Portuguese, please press the globe icon on the lower right side of your Zoom screen and then choose to enter the Portuguese room. Select "Mute original audio" so that you won't hear the English version in the background.

Marcelo Bacci: 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 Vale S.A.'s expectations about future events or results, encompassing those matters listed in the respective presentation. We caution you that forward-looking statements are not guaranteed a future performance and involve risks and uncertainties. To obtain information on factors that may lead to results different from those forecast by Vale S.A., please consult the reports Vale S.A. files with the U.S. Securities and Exchange Commission, the Brazilian Comissão de Valores Mobiliários, and in particular, the factors discussed under forward-looking statements and risk factors in Vale S.A.'s annual report on Form 20-F. With us today are Mr. Gustavo Pimenta, CEO, Mr.

In Iron ore that was close to 4 billion dollars an increase of almost 250 million supported by higher realized prices and quality premiums reflecting. The success of our portfolio strategy. This Improvement was also supported by the higher sales of iron ore finds as our detail on the next slide.

Our RN North sales increased by 5% year on year, reaching 86 million tons, the highest level for a third quarter since 2018.

This growth was driven by stronger production performance and solid demand for RNR finds with Benchmark. Prices staying above a hundred dollars per ton for most of the quarter. This quarter, we built up around 4 million, tons of inventory. It's important to highlight that this was mainly due to volumes in transit to our 20 distribution and concentrating facilities in Asia and Europe supporting our portfolio strategy.

we expect these inventories to be converted into sales, over the coming quarters, helping us, maximize the value generated by the business,

Now looking more closely at our cost performance. I'm very pleased to see that we are on the right track to meet our 2025 Ron or cost guidance.

Marcelo Bacci: Marcelo Bacci, Executive Vice President of Finance and Investor Relations, Mr. Rogério Nogueira, Executive Vice President, Commercial and Development, Mr. Carlos Medeiros, Executive Vice President of Operations, and Shaun Usmar, CEO of Vale Base Metals. Now, I will turn the conference over to Mr. Gustavo Pimenta. Sir, you may now begin.

We are all in cost declined 4% year on year supported by our portfolio strategy which led our average r on our finest quality premiums to increase by almost 2 dollars per ton quarter on quarter and 3 dollars per ton year on year.

Our long-term freight strategy is also delivering excellent results, reducing cost volatility and coming in $5 per ton below spot freight rates to China during the period.

Gustavo Pimenta: Hello, everyone, and welcome to Vale S.A.'s third quarter 2025 conference call. I would like to start by highlighting how excited I am about what we are building at Vale S.A. Our vision to become a trusted partner with the most competitive and resilient portfolio in the industry remains solid, and we continue to make significant progress towards this future. This quarter, we once again delivered solid operational and cost performance across the board, and we are on track to deliver all of our guidances for the year. We continue to advance our safety agenda, most notably by removing the last dam from emergency level three, a significant milestone in our de-risking journey. Our key initiatives and growth projects are also moving forward as planned, reinforcing our long-term strategic focus and disciplined capital allocation approach.

Our C1 cost excluding third-party. Purchases remained flat year on year, reflecting a positive impact from inventory turnover compared to last year, which offset the effects from the exchange rate and higher maintenance and materials costs.

These effects led to an increase in our production cost, which reached $20.3 per ton this quarter.

The production cost from this quarter, along with the last favorable exchange rate compared to last year, are important factors to consider when estimating our C1 cost for Q4, which is expected to increase year on year.

despite this we remain highly confident in achieving our full year, guidance of 20.5 to $22 per ton

In base metals, our performance stood out once again, showing the great potential of this business as we continue to unlock value through ongoing initiatives.

Gustavo Pimenta: These results give me great confidence in Vale S.A.'s future and in the value we are creating, not only for our shareholders but also for society. Now, let's move on to the quarter performance on the next slide. First, I would like to highlight the solid operational results we delivered across all three commodities, positioning us to reach the upper limit of our annual production guidances. This achievement reflects the outstanding performance of our operational teams, and I want to congratulate them for their hard work and consistency throughout the year. This quarter, iron ore production reached 94 million tons, an increase of 4% year on year, and our highest quarterly output since 2018.

Copper all-in costs, decreased by 65% falling below, $1,000 per ton. This was the fifth quarter in a row that we've seen cost reductions here on year.

And Nico, all-in costs fell by 32% year on year to 12.33% of the PTVI, the consolidation.

These improvements came from Valley based methods. Consistent focus on efficiency initiatives, combined with higher byproduct revenues, in our poly metallic sites with gold being the main contributor.

Gustavo Pimenta: This growth was primarily driven by a record third quarter performance at Serra Leste, Fábrica, and Damão, along with the ramp-up of Brucutu Q2, Capão Xavier, and Vargem Grande projects, which added flexibility to our operations and product mix. Copper also delivered a strong performance, with production growing 6% compared to last year, supported by Salobo's solid performance. This was the best third quarter result for our copper business since 2019. Nickel production remained flat year on year, but with an increase in our own production thanks to the ramp-up of the Voisey’s Bay underground project. This allowed us to significantly reduce our unit cost year on year, as Marcelo Bacci will present later. Also, in nickel, we started operations at the second furnace of Onça Puma in September. The project was completed on schedule and 13% below the planned CapEx, reinforcing our commitment to efficiency.

Because of the lower than expected costs so far this year and the favorable outlook for byproduct revenues, we are once again, lowering our 2025 cost guidance. We now expect Nico all in cost to be between 13 and 14,000 per ton and copper all in cost to be between 1 and 1/2 thousand dollars per ton.

Discontinued cost. Improvements means an Aida increase of nearly 9 0 0.

Now let's move on to cash. Generation of recurring free cash flow reached $1.6 billion in Q3, an increase of $1 billion year on year. This improvement was primarily driven by our solid Aida in the quarter and a reduced impact from negative working capital.

Our total capex was 1.3 billion dollars this quarter. We expect investment disbursements to increase in the fourth quarter. Keeping us on track to meet our 5.4 to 5.7 billion dollars full year guidance.

On top of our recurring free cash flow generation, we also had a positive impact from the Alliance Energy transaction, which helped boost AutoIQ cash flow in the quarter to $2.6 billion.

Gustavo Pimenta: The second furnace adds 15,000 tons of production capacity per year, and it is expected to further reduce unit cost by approximately 10%, enhancing the competitiveness of our nickel business. We also reached other important milestones this quarter through our new Carajás program, which aims to accelerate the development of key projects in one of the world's most attractive mineral deposits. As many of you know, in June, we received the preliminary license for the Bacaba copper project and have since begun preparations for construction, which is set to start in the coming months following the issuance of the construction license. In iron ore, we received the operating license for the Serra Sul Plus 20 million tons per annum expansion. The project has reached 80% physical progress and should start up by the end of 2026.

Value to our shareholders, with the payment of 1.5 billion dollars in interest on Capital and a net borrowing of 600 million as part of liability management. Next slide, please.

As a result, our expanded net debt decreased by $800 million quarter on quarter, reaching $16.6 billion.

With RNR prices remaining above, $100 per ton, we expect the free cash flow generation and the fourth quarter to bring us down. At least to the midpoint of our target range of 10 to 20 billion dollars.

In this context, we see increased room to consider additional shareholder remuneration, even in the context of the participative, debenture standard offer.

Before handing over to Gustavo for his closing remarks, I want to emphasize the value. We are consistently delivering to our shareholders.

Through our growth strategy cost efficiency and discipline Capital allocation, we are building a more resilient and high-performing company. These efforts, strengthen our financial position and create conditions for sustainable and increasing returns to our shareholders over time, Gustavo, please.

Gustavo Pimenta: Additionally, we secured approval to expand Serra Leste's capacity from the current 6 million tons per year to 10 million tons per year, bringing extra volumes to the Northern System with a highly competitive capital intensity of just $20 per ton. Now, looking at our portfolio. One of Vale's key competitive advantages is our ability to adapt to different market conditions, offering a product mix that meets the evolving needs of our customers. This is possible given the flexibility of our supply chain, supported by multiple blending, concentration, and distribution facilities across the world. Throughout 2025, we actively adjusted our iron ore product portfolio, concentrating our high silica products and launching a new medium-grade product from Carajás. This flexibility results in significant value creation. In Q3, our iron ore finance premium increased by nearly $2 per ton quarter on quarter.

Thanks Marcelo before opening up for the Q&A session. I would like to highlight the key. Takeaways from today's call.

Safety remains our core value in this third-quarter performance, which only reinforces that.

As we continue to advance in building an accident-free work environment and in delivering on our Upstream Dam characterization program.

We once again delivered a solid operating performance, with cost reductions across all businesses reflecting our focus on operational excellence.

Our flexible product portfolio, allows us to maximize free, cash flow, and long-term value creation, and the different market conditions. And we are seeing those benefits in our financial performance.

We are making solid progress on a strategic projects in the cauda region leveraging 1 of the richest and lowest cost mining endowments globally.

And finally, our disciplined cap location approach ensures we seize the best opportunities to generate long-term value for all of our stakeholders.

Now, let's move on to the Q&A session. Thank you.

Gustavo Pimenta: From an EBITDA perspective, those initiatives represent over $500 million improvement on an annualized basis. Safety is at the center of every decision we make at Vale, and I'm very proud of the significant progress we have achieved this quarter in dam safety and management. Back in 2020, we made a public commitment: by 2025, Vale would no longer have any dams classified at emergency level three, the highest risk category. Last August, we fulfilled that commitment. The Forquilha III dam, the last one at level three, had its emergency status officially lowered to level two by Brazilian authorities. This is an important milestone in our commitment to society and neighboring communities and a key mark in our safety journey. Also, in August, we announced that Vale S.A. successfully implemented the Global Industry Standard on Tailings Management, the GISTM, meeting the requirements of this internationally recognized benchmark.

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.

Please ask your question in English and limit your question to 2 at a time.

Our first question comes from Hulu Anjali with JP Morgan.

You can open your microphone.

Okay. Um, good morning. Um,

my 2 questions are, uh, the following 1. So first,

Uh, I would like to ask Joe a question about the portfolio strategy.

Um we that was I think that we discussed a lot in the recent uh investor tour.

And it's, uh, you know, amazing to see it already showing, um, you know, a large impact already in the third quarter.

Gustavo Pimenta: Lastly, in September, we completed the de-characterization of the Grupo Dam in Minas Gerais, marking the 18th structure eliminated under our program. Advancing the dam safety agenda is essential to ensuring no repetition and becoming a trusted partner to society. We remain committed to delivering results and being a reference for safety and operational excellency in our industry. Our efforts to transform Vale S.A. are beginning to be recognized by ESG rating agencies. We've demonstrated substantial improvements in governance, dam safety and management, health and safety, and climate change. These advancements have led to upgrades in our ratings, now surpassing levels seen prior to Brumadinho. I would also like to highlight that over the last year and a half, a relevant number of ESG-focused investors have removed Vale S.A. from their exclusion lists.

Um, so I wanted to ask you to, you know, give us a little bit more color on how this, uh, should progress. Uh, what is the potential? Um, you know, just an overview on, uh, what should we expect about portfolio strategy, which seems to be building pretty interesting results.

Um, and my second question, I think, is for Marcelo Bacci or the staff, the proper Bachi.

I think, uh, what we hear from investors is, um, companies is showing a very strong performance, um, the the operations seem to be much more. Um, you know, it seems like you have, uh, your hands on the wheel and things are are, are really improving. And and you know, we're seeing uh, limited surprises uh, which is always very good.

Gustavo Pimenta: We estimate roughly $1.5 trillion in AUM can now invest again in our shares and fixed income instruments. We remain dedicated to transparently showcasing the progress we've made across the company, and we remain firmly committed to the principles of the UN Global Compact, including respect for human rights, labor standards, and environmental protection. I will now pass the floor to Marcelo Bacci to discuss our financial performance. I'll be back for closing remarks before the Q&A session. Marcelo, please go ahead.

Um and when we see a quarter like this when where the company generated over, you know, 2.6 billion dollars in free cash flow. The question that I'm getting online from investors is how should we think about dividends as 1 part of the capital equation uh strategy uh, going forward?

Um, so those are my two questions. Uh, and thank you very much for the time.

Hey, good morning. Good morning. Uh thank you. Hold up for for the question.

Joint actions. And I mean joint because those are actions from the commercial operations and technical areas uh, in optimize our product portfolio. They have you that very positive results.

Rogério Nogueira: Thanks, Gustavo, and good morning, everyone. As Gustavo highlighted, we delivered another quarter of solid operational performance, which gives us even more confidence in the long-term value we are creating for our shareholders. This quarter, our proforma EBITDA reached $4.4 billion, an increase of 17% compared to the same period last year and 28% higher than the last quarter. As you can see on the slide, this consistent result was driven by robust sales, lower hauling costs across all three commodities, and more favorable pricing conditions. In base metals, EBITDA grew by more than $400 million year on year, reaching almost $700 million thanks to better results in both copper and nickel. In iron ore, EBITDA was close to $4 billion, an increase of almost $250 million, supported by higher realized prices and quality premiums, reflecting the success of our portfolio strategy.

Uh, just a few examples for, uh, brbf and SSC. Jss, CJ is our mid great product from the northern part which are both a low aluminum. Migrate ores. They have commanded very high premiums versus the index 62.

Uh, as Gustavo mentioned, it was close to 3 doors per ton, normalized to a 62% Fe content. I don't know... work.

Which was a way higher, uh, than a year ago.

If you look into, uh, the third quarter of 2015,

Uh, fine, premiums reached $0.7 per ton, which is actually $2.6 per ton higher than in the third quarter of 2024.

And 1.8 dollars per ton higher than the 2 Q 2025 and this is and I'm sure I'd like to say that this is actually despite a relatively lower, uh, quality product mix.

So, I mean, very positive results so far.

Rogério Nogueira: This improvement was also supported by the higher sales of iron ore fines, as I'll detail on the next slide. Our iron ore sales increased by 5% year on year, reaching 86 million tons, the highest level for a third quarter since 2018. This growth was driven by stronger production performance and solid demand for iron ore fines, with benchmark prices staying above $100 per ton for most of the quarter. This quarter, we built up around 4 million tons of inventory. It's important to highlight that this was mainly due to volumes in transit to our 20 distribution and concentration facilities in Asia and Europe, supporting our portfolio strategy. We expect these inventories to be converted into sales over the coming quarters, helping us maximize the value generated by the business.

Uh, last but not least, I will say CJ premiums also kept a very healthy level at about $15 per drum per ton. Obviously driven by some good steel margins, but also by wiser product allocation, and we can talk more about it.

But I think, uh, what I would like to reinforce, is there were very confident in our product portfolio.

I think, uh, we see that IOC JN BRFB will remain our core products, uh, with a strategic allocation to regions and clients who really require their unique properties. That means that we will sell it. By the way, we are located to clients and regions that actually value, uh, or have a higher value or pay a higher VIU.

Uh, for these projects products uh, ssj as I said, which is the meet gray product from Kardashians that we just introduced

Rogério Nogueira: Now, looking more closely at our cost performance, I'm very pleased to see that we are on the right track to meet our 2025 iron ore cost guidance. Iron ore hauling cost declined 4% year on year, supported by our portfolio strategy, which led our average iron ore fines quality premiums to increase by almost $2 per ton quarter on quarter and $3 per ton year on year. Our long-term freightment strategy is also delivering excellent results, reducing cost volatility and coming in $5 per ton below spot freight rates to China during the period. Our C1 cost, excluding third-party purchases, remained flat year on year, reflecting a positive impact from inventory turnover compared to last year, which offset the effects from the exchange rate and higher maintenance and materials costs. These effects led to an increase in our production cost, which reached $20.3 per ton this quarter.

Uh, has already achieved sales of about 30 million per ton.

Uh, 30 million tons, and it's becoming a global product with the potential to further increase its sales in 2026. So, as we look into 2026, we believe that our volumes of SSSJ will increase gradually.

Um, last but not least, our Chinese concentrate which we started as a, you know, a not a such standard product is becoming a highly valued product, in the Chinese market. So this is very good news. Uh, this product is also commending, very good premiums in the Chinese market.

I think the only other one is the pellets market that we have been talking about. 2025 has been a challenging year for pellets.

Rogério Nogueira: The production costs from this quarter, along with the less favorable exchange rate compared to last year, are important factors to consider when estimating our C1 cost for Q4, which is expected to increase year on year. Despite this, we remain highly confident in achieving our full-year guidance of $20.5 to $22 per ton. In base metals, our performance stood out once again, showing the great potential of this business as we continue to unlock value through ongoing initiatives. Copper hauling costs decreased by 65%, falling below $1,000 per ton. This was the fifth quarter in a row that we've seen cost reductions year on year. In nickel, hauling costs fell by 32% year on year to $12,300 per ton, reaching the lowest level since the second quarter of 2022, even after taking into account the impact of the PTVI deconsolidation.

Uh we see 2026 2027 as years that will gradually recover our pellet premiums, especially with the startup of new new projects that will demand pellets, mostly uh projects that are are going to look into direct production looking for decarbonization and also with the Chinese exports cooling down a little bit and which will add more demand for Regions that need uh, they need pellets.

Look, I think uh we will keep proactively optimizing our portfolio Solutions.

Not only based on market demand, but also on our mind plan possibilities as we have been doing with the operations team.

And we'll, we'll keep observing the market.

Observing the market needs and our competitor's positioning so that we can Define our our best allocation, our best portfolio.

Rogério Nogueira: These improvements came from Vale Base Metals' consistent focus on efficiency initiatives, combined with higher byproduct revenues in our polymetallic sites, with gold being the main contributor. Because of the lower than expected costs so far this year and the favorable outlook for byproduct revenues, we are once again lowering our 2025 cost guidance. We now expect nickel hauling costs to be between $13,000 and $14,000 per ton, and copper hauling costs to be between $1,000 and $1,500 per ton. This continued cost improvement means an EBITDA increase of nearly $900 million compared to our expectations at the start of the year. Now, let's move on to cash generation. Recurring free cash flow reached $1.6 billion in Q3, an increase of $1 billion year on year. This improvement was primarily driven by our solid EBITDA in the quarter and the reduced impact from negative working capital.

Here, let me just add one thought here, and then I'll pass it to Bachi to take over the capital location. But I think what you are seeing in the market is seen is that one thing we've been sharing with investors is the enormous flexibility that Vale has in its portfolio, right? I think nobody in the industry has that flexibility.

We've talked about 20 blending facilities across the globe, several concentration facilities so that allows us

To put into the market what our client needs at the right time. And I think this is more dynamic.

Get a value as as we move forward. So, to your second question, I I was about to took over

Thank you, Gustav. And thank you for the question. Uh, as you mentioned hudo for the, uh, stability of the company and the stability of the market are creating better conditions for us to think about extraordinary dividends uh for the coming months.

Rogério Nogueira: Our total CapEx was $1.3 billion this quarter. We expect investment disbursements to increase in the fourth quarter, keeping us on track to meet our $5.4 to $5.7 billion full-year guidance. On top of our recurring free cash flow generation, we also had a positive impact from the Allianz Energia transaction, which helped boost total free cash flow in the quarter to $2.6 billion. This strong free cash flow generation and strong cash position were primarily used to return value to our shareholders, with the payment of $1.5 billion in interest on capital and a net borrowing of $600 million as part of liability management. Next slide, please. As a result, our expanded net debt decreased by $800 million quarter on quarter, reaching $16.6 billion.

Uh, you know as as I said during the presentation uh, the price is above a hundred dollars on a consistent way. Plus the operational performance uh are creating uh a very nice uh, cash flow position for us, which is better than we expected at the beginning of the year, plus the positive. Uh uh performance coming from the base Metals business.

So, uh, we cannot anticipate, uh, the decision right now because there's still a few things to happen, but, uh, it is likely that we have extraordinary dividends announced in the coming months.

Thank you.

Our next question comes from.

Have barcelos with predko BBI.

Rogério Nogueira: With iron ore prices remaining above $100 per ton, we expect the free cash flow generation in the fourth quarter to bring us down at least to the midpoint of our target range of $10 to $20 billion. In this context, we see increased room to consider additional shareholder remuneration, even in the context of the participative debenture standard offer. Before handing over to Gustavo for his closing remarks, I want to emphasize the value we are consistently delivering to our shareholders. Through our growth strategy, cost efficiency, and disciplined capital allocation, we are building a more resilient and high-performing company. These efforts strengthen our financial position and create conditions for sustainable and increasing returns to our shareholders over time. Gustavo, please.

Hello, good morning. And, and, and thanks for for taking my questions. So, as a first question, are there any plans to revise the offering structure of the participating the ventures? And also the early October? I mean, any updates you could share, uh, on that front. And that said, uh, maybe connecting with these uh, uh, batchy speech on the dividends. I mean, what would be the implication uh, or the implications for vales dividend payouts? Uh, particularly, of course, uh, for Extraordinary, uh, dividends and and as a second question, uh, first Gustavo, congratulations, for the results that you have been delivering on the copper side. And and that said, are there any plans or ways that you could that, you believe that V could accelerate or speed up the growth initiatives in the corporate business? Thank you.

Carlos Medeiros: Thanks, Marcelo. Before opening up for the Q&A session, I would like to highlight the key takeaways from today's call. Safety remains our core value, and this third quarter performance only reinforces that. As we continue to advance on building an accident-free work environment and on delivering on our upstream dam de-characterization program, we once again delivered a solid operating performance with cost reductions across all businesses, reflecting our focus on operational excellence. Our flexible product portfolio allows us to maximize free cash flow and long-term value creation under different market conditions, and we are seeing those benefits in our financial performance. We are making solid progress on strategic projects in the Carajás region, leveraging one of the richest and lowest-cost mining endowments globally. Finally, our disciplined capital allocation approach ensures we seize the best opportunities to generate long-term value for all of our stakeholders.

Thank you have AO. This is Marcela speaking, uh, on the participative, the benchers, uh, I guess, uh, you know, we have to first, you know, the the offer is uh, to be uh, concluded today.

And, uh, this offer has been, uh, unique. It's the only one that we have ever done since the issuance of those debentures 28 years ago.

And I would like to stress out that the executive committee does not expect to make another movement like this in the foreseeable future.

Uh, we also believe that the price we’re offering is quite reasonable and above the fair value that we believe we have, with a 15% premium compared to the price before the announcement.

So, uh, if we consider our production volume guidance, the offer price of $42 AIS.

Implies an iron ore price of $100 per ton, uh, around.

Carlos Medeiros: Now, let's move on to the Q&A session. Thank you.

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. Please ask your question in English and limit your question to two at a time. Our first question comes from Rodolfo Angele with JPMorgan. You can open your microphone.

So, uh, we we think it's a very interesting offer, uh, to to the holders. And, um, of course, you know, if you believe prices are to be above a hundred dollars per ton, probably positioning, uh, in the, in the shares is a better deal. So, uh, I think, uh, you know, we are not, um, you know, considering any change to the offer especially because, you know, at this point it is about to be closed today.

Oh, and and and Raphael for a question, I will pass uh to Sean. I think his he'll be able to provide more caller, what I can say.

Uh, based on everything I've been, um, hearing from the team, from Sean and the Xcore VBM, is that the more we look into...

Rodolfo Angele: Okay. Good morning. My two questions are the following ones. First, I would like to ask Rogério a question about the portfolio strategy. That was a theme that we discussed a lot in the recent investor tour, and it's amazing to see it already showing a large impact already in the third quarter. I wanted to ask you to give us a little bit more color on how this should progress. What is the potential? Just an overview on what should we expect about portfolio strategy, which seems to be yielding pretty interesting results. My second question, I think, is for Bacci or Gustavo, the purple Bacci. I think what we hear from investors is the company is showing a very strong performance. The operations seem to be much more—it seems like you have your hands on the wheel and things are really improving.

The growth opportunities uh in karaj jazz. The more excited we are. So I this is something hopefully at valid they will be able to talk more about it, give you concrete examples.

But let me bring Sean into the debate here. I think he'll be able to share more details with you.

Thanks, Gustavo. And thanks for the question, Rafael. I think the short answer is, you know, we will cover more of this, as Gustavo says, in the value day. But, um, really, we've fundamentally focused on two things right now to do exactly what you're saying. The first one is, um, you've seen the industry, I think, on track this year.

To, um, under deliver against the original expectations with a series of issues by about 6%.

An issue for us to just get the basics right in our existing operations. So you've seen our quarter. I did guide

Rodolfo Angele: We're seeing limited surprises, which is always very good. When we see a quarter like this one where the company generated over $2.6 billion in free cash flow, the question that I'm getting a lot from investors is, how should we think about dividends as one part of the capital equation strategy going forward? Those are my two questions, and thank you very much for your time.

Rogério Nogueira: Good morning. Thank you, Rodolfo, for the question. On the portfolio, I think up to now, our joint actions, and I mean joint because those are actions from the commercial, operations, and technical areas, in optimizing our product portfolio, they have yielded very positive results. Just a few examples for BRBF and SSCJ. SSCJ is our mid-grade product from the northern part, which are both low alumina mid-grade ores. They have commanded very high premiums versus the index 62. As Gustavo mentioned, it was close to $3 per ton normalized to a 62% Fe content iron ore, which was way higher than a year ago. If you look into the third quarter of 2015, fine premiums reached $0.70 per ton, which is actually $2.60 per ton higher than the third quarter of 2024 and $1.80 per ton higher than the Q2 2025.

Record performance. And I think we're looking at Cisco, a mature asset, um, for the best operating performance, which is tough for an old, an older asset, uh, in in certainly 5 years, um, which is exactly what we need as a baseline. The other thing then goes down to Capital allocation and the project growth pipeline specifically and para. And here, we, we're not waiting for an annual, um, time frame. You know, we've taken we discussed this a bit during LMU week, uh, historically 2024, for example, we do about 20,000 meters of drilling, uh, in the, in the district. And, uh, this year alone, we've dynamically reallocated, uh, um, R&D spend, uh, We've tripled our drilling this year and we will share more in what we're finding but it's incredibly exciting. So, the creates this very dynamic

Question about, um, drilling draw results, the endowments. And how do we actually optimize this? Not only to accelerate, but to see what we can do to increase volumes over and above what we thought was conceivable. We're very careful to make sure that we don't make the mistakes. I think you see in the sector more broadly, which is get over-enthusiastic. We have to ground this in delivery, but I think this, Gustavo said in his opening remarks, first cab off the rank is Bakaba. We've worked with the government to be able to accelerate, um, ahead of getting our work. So we hit the, uh, the weather window here on early works on the bridge, which is critical path. Thereby.

Rogério Nogueira: I would like to say that this is actually despite a relatively lower quality product mix. I mean, very positive results so far. Last but not least, IOCJ premiums also kept a very healthy level at about $15 per ton, obviously driven by some good steel margins, but also by a wiser product allocation. We can talk more about it. What I would like to reinforce is that we're very confident in our product portfolio. I think we see that IOCJ and BRBF will remain our core products with a strategic allocation to regions and clients who really require their unique properties. That means that we will sell it, but we will allocate it to clients and regions that actually value or have a higher VIU or pay a higher VIU for these projects.

14% ahead of plan. Currently, we hope to get that soon and we'll, we'll obviously communicate with Market soon. But we are set up there for lower Capital intensity, and to do that faster. Um, and I won't, um, spoil the lead on some of what we're seeing with the life of business planning and our projects. But all of that is around reducing Capital, intensity, execution risk and working more closely with, uh, governments on reducing permitting time frames. And, um, I think we've got some really good news that, you know, we're working on in that area. The other thing is, we're seeing, um, with the ramp up also on a poly metallics, we're ahead on, um, both in Boise Bay, and we've seen our highest output in Sunbury and 5 or 6 years. We'll, we'll put over 5 million tons through tolerable. This year, um, we're seeing a significant copper byproduct, that is a material, it's over 20% of our total copper contribution. Uh, so that is a significant contribution to that business segments.

All in, uh, all in cost improvements as well.

Uh, how far out this is Marcelo again? I forgot to mention, uh, about the, uh, the question on the, uh, effect of the buyback of the debentures on the potential dividend payment. I would say that at this point, uh, there is no effect or or a minor effect. Uh, so this would not change our strategy in relation to dividends

Rogério Nogueira: SSCJ, as I said, which is the mid-grade product from Carajás that we just introduced, has already achieved sales of about 30 million tons, and it's becoming a global product with potential to further increase its sales in 2026. As we look into 2026, we believe that our volumes of SSCJ will increase gradually. Last but not least, our Chinese concentrate, which we started as not a such standard product, is becoming a highly valued product in the Chinese market. This is very good news. This product is also commanding very good premiums in the Chinese market. I think the only other one is the pellets market that we have been talking about. 2025 has been a challenging year for pellets.

Thank you. Our next question comes from Leonardo koha with btg.

You can open your microphone.

Okay, yeah. Good morning, everyone. Thank you. So, a couple of things on my side.

Um, and sorry, it's going to be a bit, uh, similar to Hodo. So, sorry Hodo for that and for value management. But, um, moving back to these two points, which I think are at this point critical, right? For the investment case.

Uh, starting with the commercial strategy, right? I mean, great results so far. Um, I think you gave a very good qualitative assessment of of everything that's happening. Uh, things have been delivered very fast, right? So there's been a, let's say a U-turn and

In the direction of things, you can already see an improvement in price realizations.

Rogério Nogueira: We see 2026, 2027 as years that will gradually recover our pellet premiums, especially with the startup of new projects that will demand pellets, mostly projects that are going to look into. Direct production, looking for decarbonization. Also, with the Chinese exports cooling down a little bit, which will add more demand for regions that need pellets. I think we will keep proactively optimizing our portfolio solutions, not only based on market demand, but also on our mine plan possibilities, as we have been doing with the operations team. We'll keep observing the market, observing the market needs and our competitors' positioning so that we can define our best allocation, our best portfolio.

Depending on how you look at it, alright, 1.8 uh, to 2.5 dollars per ton in better realized prices, right? Uh it's it's natural. I think for everyone to question, given given the fast speed and and improvements. Uh where where do you think we are in this? Let's say in this s-curve, uh, right of

Of of this entire Journey on, on, on the commercial strategy. I know there's no guidance and I know there's, it's very difficult to quantify, but would you say we're at the early stages of of this optimization? And that these results, they could continue improving maybe doubling from where we are. So anything quantitatively? I think, would be very helpful at least to me, so we can understand. Um, the the let's say the economic impacts of of what you're doing. Um, the second Point, uh, to to Marcelo Marcelo we, we spoke a lot about the, uh, potential extraordinary dividends. You talked about the benefits of this, and how they impact that decision, which is, uh,

Carlos Medeiros: Rodolfo, Gustavo here, let me just add one thought here, and then I'll pass to Bacci to cover the capital allocation. I think what you are seeing in the market is that one thing we've been sharing with investors is the enormous flexibility that Vale S.A. has in its portfolio. I think nobody in the industry has that flexibility. We've talked about 20 blending facilities across the globe, several concentration facilities. That allows us to put into the market what our client needs at the right time. I think this more dynamic product allocation and development that we've been able to show just reinforces the enormous competitive advantage that we have to play along the cycle. I'm very happy with the outcome, and I think we'll be able to capture even greater value as we move forward. To your second question, I'll ask Bacci to cover.

And how that helps and, and the cash flow projections going forward, I can imagine have improved. Um, what we haven't debated yet is the potential changes in regulation in the country, right? I mean, Brazil is on the verge of increasing, uh, taxation on dividends to 10%, and every single company, every single management team and every single

Uh tax department uh, is is obviously running the numbers uh and trying to assess uh implications and and what what the next steps are right? Um I mean looking into the numbers for Valley specifically, right? I mean 1 can simply conclude that there's about

30% of the market cap and retained earnings, right? Um, which...

Which is, which is a relevant number, uh, I know leverages, um, not high. But, uh, maybe a bit higher than, than what the the mid-range of your guidance. But still manageable, I want to see from you. Um, if if that changes the calculus right this potential

Marcelo Bacci: Thank you, Gustavo, and thank you, Rodolfo, for the question. As you mentioned, Rodolfo, the stability of the company and the stability of the market are creating better conditions for us to think about extraordinary dividends for the coming months. As I said during the presentation, the prices above $100 in a consistent way, plus the operational performance, are creating a very nice cash flow position for us, which is better than we expected at the beginning of the year, plus the positive performance coming from the base metals business. We cannot anticipate the decision right now because there are still a few things to happen, but it is likely that we have extraordinary dividends announced in the coming months.

Regime change in Brazil on on taxation of dividends. Does that change in the short term? Your Calculus on the extraordinary dividends that you're about to announce, thank you very much. Those are the questions.

Okay, well now thank you very much. This is a very, very fair question. Let me break it down in 2 steps. First. Let me give you a view of what we're doing.

And then I'll give you an idea of the potential impact, okay?

So what we have been doing is that we're we're keep proactively optimizing our portfolio Solutions so always looking into the market demand as I said and looking at our mind plan possibilities just to give you a few examples of things we're doing.

Additional more competitive concentration capacity on a global basis.

Operator: Thank you. Our next question comes from Rafael Barcellos with Bradesco BBI.

So that we have a less costly better Logistics uh for the concentrate Productions that we produce and that those concentrate production, what these concentrate production allows us to think about different optionals in terms of blending.

[Analyst 1]: Hello, good morning, and thanks for taking my questions. As a first question, are there any plans to revise the offering structure of the participating debentures announced in early October? I mean, any updates you could share on that front? That said, maybe connecting with this, Bacci's speech on the dividends, I mean, what would be the implication or the implications for Vale's dividend payouts, particularly, of course, for extraordinary dividends? As a second question, first, Gustavo, congratulations for the results that you have been delivering on the copper side. That said, are there any plans or ways that you believe that Vale could accelerate or speed up the growth initiatives in the copper business? Thank you.

Uh, we are establishing alternative blending facilities outside China. On a global basis wherever possible.

For example, uh, we're putting blending facilities in. So how we're putting blending facilities in Europe?

We're looking for some other options in Malaysia.

So we want to increase our flexibility to distribute on a worldwide basis, and that actually helps us to better allocate the products and optimize.

Not only the service to clients, but also our price realization.

Marcelo Bacci: Thank you, Rafael. This is Marcelo speaking. On the participative debentures, I guess we have to, first, the offer is to be concluded today. This offer has been unique. It's the only one that we have ever done since the issuance of those debentures 28 years ago. I would like to stress that the Executive Committee does not expect to make another movement like this in the foreseeable future. We also believe that the price that we're offering is quite reasonable and above the fair value that we believe we have, with a 15% premium compared to the price before announcement. If we consider our production volume guidances, the offer price of 42 AIs implies an iron ore price of $100 per ton, around $100 per ton in the long term. We think it's a very interesting offer to the holders.

Where there's a third element that we're also improving: process flow sheets to increase metallic recovery. In the concentration facilities, we created a small technical group to develop and deploy best practices. This is extremely important because the metallic recovery in those concentration plants.

Do have an enormous value. Yeah, and last but not least, we're improving Logistics. So trying to figure out the places where you should be positioning blending facilities concentration so that we can optimize Logistics costs. So those are the things that we are doing.

But ultimately to your question. So the potential impact, depends, a little bit on a few factors. First, is the competitors reaction

And now, how they are developing their own portfolio, and how we would fit.

Uh, complement, their own portfolio. Just to give an example, you might see some of our clients, their view on product portfolio is decreasing quality to optimize resource optimize resources and reduce C1 costs.

This is where they're going. I mean, it's value-creative for them.

Marcelo Bacci: Of course, if you believe prices are to be above $100 per ton, probably positioning in the shares is a better deal. I think we are not considering any change to the offer, especially because at this point, it is about to be closed today.

But as long as they're going in this direction, it actually offers a possibility to put more complementary material into the market. Our view is that this will increase the value in use of our products.

Um, so the second one just to think about is how the market will react in terms of this anti-evolution capacity closures.

Carlos Medeiros: Rafael, for a question, I will pass to Shaun. I think he'll be able to provide more color. What I can say is based on everything I've been hearing from the team, from Shaun and the ExCo of Vale Base Metals, is that the more we look into the growth opportunities in Carajás, the more excited we are. This is something hopefully at Validay we'll be able to talk more about, give you concrete examples. Let me bring Shaun to the debate here. I think he'll be able to share more details with you.

The less capacity you have available to produce the same amount of steel or the same amount of pig iron, the higher the premiums I would expect, because the higher quality of iron ore would be demanded to maintain the productivity of the remaining fewer furnaces. So, I'm just giving you.

Shaun Usmar: Thanks, Gustavo. Thanks for the question, Rafael. I think the short answer is we will cover more of this, as Gustavo says, in Validay. Really, we've fundamentally focused on two things right now to do exactly what you're saying. The first one is you're seeing the industry, I think, on track this year to under-deliver against the original expectations with a series of issues by about 6%. An issue for us is just to get the basics right in our existing operations. You've seen our quarter. I did guide in Q2 that this was expected in both our segments to actually be our weakest quarter with planned maintenance, like at Sesego. Despite that, we've seen our operators do incredible work, and we're on track, particularly at Salobo, for record performance.

Well uh thank you for your question. Uh of course we are monitoring very closely the potential and the changes that have happened in the potential additional changes in regulations. Specially related to tax income tax on on dividends and interest on Capital.

The situation we have at Vale is that we can pay. If you look at the minimum dividend policy that we have, most of it, if not the totality of it, can be paid using interest on capital.

So the immediate impact on the regulation of the regulation on dividends for us is limited.

Shaun Usmar: I think we're looking at Sesego, a mature asset, for the best operating performance, which is tough for an older asset. In certainly five years, which is exactly what we need as a baseline. The other thing then goes down to capital allocation and the project growth pipeline, specifically in Pará. We're not waiting for an annual timeframe. We've taken, and I meant we discussed this a bit during LME week. Historically, 2024, for example, we do about 20,000 meters of drilling in the district. This year alone, we've dynamically reallocated our R&D spend. We've tripled our drilling this year. We will share more on what we're finding, but it's incredibly exciting.

Uh, but we are monitoring, uh, still. Uh, there is some confusion in the market about the potential conflict between the, uh, the, the corporate law and the new regulation that was created by for dividend payments. Uh, related to, uh, to profits that already already have been recorded, uh, in terms of, um, you know, the, the, the when those dividends can be paid after declared, so you're still working on that. Uh, but, um, you know, we are monitoring that very closely as I said, and, uh, if there's any opportunity to optimize the situation of the company and our shareholders in relation to to tax, we're going to uh, look very closely into that.

Thank you. Our next question comes from Carlos De Alba with Morgan Stanley.

Shaun Usmar: It creates this very dynamic question about drilling, drill results, the endowments, and how do we actually optimize not only to accelerate, but to see what we can do to increase volumes over and above what we thought was conceivable. We're very careful to make sure that we don't make the mistakes I think you see in the sector more broadly, which is get over-enthusiastic. We have to ground this in delivery. I think, as Gustavo said in his opening remarks, first cab off the rank is Bacaba. We've worked with the government to be able to accelerate ahead of getting our work. We hit the weather window here on early works on the bridge, which is critical path. They're about 14% ahead of plan currently. We hope to get that soon, and we'll obviously communicate with the market soon.

Yes, uh, hello. Good morning everyone. Uh, thank you very much. Uh, congrats on the solid results and I wanted to focus a little bit on on base Metals. Um, and maybe Sean, can you elaborate a little bit more on on? How do you see the timing of valet pursuing more aggressively? The, the copper growth opportunity that it has, uh, always um several uh, projects in in in, in the portfolio. How do you see the sequence of those? When can we start to see the board maybe management presenting or uh, the projects for board approval? And and then hopefully start, uh, on on, on the path of expanding that, that copper output and then my second question. Also based Metals will be if you can share maybe some color, uh, as to

Shaun Usmar: We are set up there for lower capital intensity and to do that faster. I won't spoil the lead on some of what we're seeing with the life of business planning on our projects. All of that is around reducing capital intensity, execution risk, and working more closely with governments on reducing permitting timeframes. I think we've got some really good news that we're working on in that area. The other thing is we're seeing with the ramp-up also on the polymetallics, we're ahead on both the Voisey’s Bay, and we've seen our highest output in Sudbury in five or six years. We'll put over five million tons through Clarabelle this year. We're seeing a significant copper byproduct that is material; it's over 20% of our total copper contribution. That is a significant contribution to that business segment, all in cost improvements as well.

How the the the cash cost um without by products or before buy products in base Metals, has performed obviously kudos to to the company and and and and and to you on on the lower only because uh course guidance. But um you that that's definitely where influenced by a strong byproducts which they they count we will take them. But uh you just see if you have you can share some light on on how the the cost performance has.

Been before by product benefits.

Well, it's um, look, thanks. Thanks for that. So the copper the copper growth. I'm going to punch. I think that mostly to give you the detail on valid day. Um, as much as I, I'm chomping at the bit to share with you. Now, I can just say we've, we've fundamentally redesigned our life and business planning this year and very much with an eye, to exactly the Dynamics. You've mentioned. So, you know, we, we are prioritizing, as I said earlier, Dynamic, dynamically Capital to copper in Para specifically on R&D spend and the constraint that we have on copper growth.

Marcelo Bacci: Rafael, this is Marcelo again. I forgot to mention the question on the effect of the buyback of the debentures on a potential dividend payment. I would say that at this point, there is no effect or a minor effect. This would not change our strategy in relation to dividends.

Operator: Thank you. Our next question comes from Leonardo Correa with BTG Pactual. You can open your microphone.

Is not throwing more money at that. I just want to be clear like, our, our plans currently. We are fully self-funded through our planning Horizon. Mostly through. Uh, not just as you said, byproduct credits, but really fundamentally through our Insight Business, restructuring our Capital intensity, reducing our working capital, and fundamentally reducing our overhead and our our costs in this business. So things that we control. So we are seeing opportunity. Um, you know, I will I will disclose more within weeks of how we're seeing that opportunity to look at sequencing and, um,

[Analyst 1]: Okay, yeah. Good morning, everyone. Thank you. A couple of things on my side. Sorry, it's going to be a bit similar to Rodolfo. Sorry, Rodolfo, for that and Vale management. Moving back to these two points, which I think are at this point critical for the investment case. Roger, starting with the commercial strategy, right? Great results so far. I think you gave a very good qualitative assessment of everything that's happening. Things have been delivered very fast, right? There's been, let's say, a U-turn in the direction of things, and you can already see an improvement in price realizations of, depending on how you look at it, $1.8 to $2.5 per ton in better realized prices.

[Analyst 1]: It's natural, I think, for everyone to question, given the fast speed and improvement, where do you think we are in this, let's say, in this S-curve of this entire journey on the commercial strategy? I know there's no guidance, and I know it's very difficult to quantify, but would you say we're at the early stages of this optimization and that these results, they could continue improving, maybe doubling from where we are? Anything quantitatively, I think, would be very helpful, at least to me, so we can understand the, let's say, the economic impacts of what you're doing. The second point to Marcelo. Marcelo, we spoke a lot about the potential extraordinary dividends. You talked about the Benzeris participativos and how they impact that decision, which is close to zero or very little.

Just coin, what an echo? What gustava said, The more work we do, the more excited we get and I expect that as we get more drill results and we will continue to increase our drilling. The constraint is just getting enough uh drills, frankly for us to continue to do more. Um, what we will find is, I think each year for the foreseeable future will be able to continually dynamically improve, but we've seen a step change in Copper, and I'm super excited about that. We see it in my internal valuations, um, the next on just more broadly, of course, based metals.

if you remember and pry quarters, um we started restructuring this business,

[Analyst 1]: You're talking about how annual prices have been ahead of expectations and how that helps, and the cash flow projections going forward, I can imagine, have improved. What we haven't debated yet is the potential changes in regulation in the country, right? Brazil is on the verge of increasing taxation on dividends to 10%. Every single company, every single management team, and every single tax department is obviously running the numbers and trying to assess implications and what the next steps are, right? Looking into the numbers for Vale specifically, right? One can simply conclude that there's about 30% of the market cap in retained earnings, right? Which is a relevant number. I know leverage is not high, but maybe a bit higher than the mid-range of your guidance, but still manageable. I want to see from you if that changes the calculus, right?

Um, about a year ago, in fact, it was about 6 weeks into my tenure in the role um and the team I was actually with our operating teams as we do quarterly reviews, with all the IP assets and functional leads. So just last week, I'd say each of our assets is exceeding their internal commitments and plans, um, it's quite remarkable and that is looking a lot at to your point, buy products. And as you say, we'll take it, and we're obviously doing the things that we can to enhance recoveries. Uh, we're seeing so Lobos as an example, compared to just a few years ago, we're about 10% ahead on gold recovery. These guys are doing an incredible job and we're seeing record, we're on track for record, copper and gold production this year, instead of both an example, but at the same time, you know, the, the the focus is on reliability and fixed overhead. Uh, reductions. Which we're seeing flow through things we control which we're seeing through

[Analyst 1]: This potential regime change in Brazil on taxation of dividends, does that change in the short term your calculus on the extraordinary dividends that you're about to announce? Thank you very much. Those are the questions.

[Company Representative]: Thank you very much. This is a very fair question. Let me break it down in two steps. First, let me give you a view of what we're doing, and then I'll give you an idea of the potential impact, okay? What we have been doing is that we keep proactively optimizing our portfolio solutions, always looking to the market demand, as I said, and looking at our mine plan possibilities. Just to give you a few examples of things we're doing, we're developing additional, more competitive concentration capacity on a global basis so that we have less costly, better logistics for the concentrate production that we produce. This concentrate production allows us to think about different optionals in terms of blending. We are establishing alternative blending facilities outside China on a global basis wherever possible.

Flow through into the enablement of the decentralized model that we've spoken about previously and that is manifesting. As in things, like the Sega within a matter of months, a controllable, 40% reduction, in unit Mining cost with um, changes in practices and engaging that Workforce, we're seeing fixed cost dilution, um, in practically all our operations specifically, uh, the work that has been done in voices where there are now about 20% ahead and that is enabled Long Harbor in the first time in its 11 year history, within a period of months to actually be achieving, its design capacity, it's never done that before and they're they're doing that through. Enhanced availability reliability of the equipment, specifically, but significant cost control and being able to derive drive that through and enhance productivity, and we've still got a long way to go. I'd say for the business as a whole, we've done well, but we've got more opportunity to achieve Benchmark productivity, uh, Suburbia I mentioned earlier is, uh, with the 5, MS.

Has achieved significant improvements and they've done it safely. We've had about a 40% Improvement in trifer. Uh, we as you heard in the opening remarks, uh, celebrated in September, um, bringing the entrepreneur furnace to on, but, you know, 13 or so percent under budget, and on time, and importantly, that is, um, we're already tell me this year with her team. Uh, has taken that asset. Now, with the fixed cost solution and being ahead of her, her cost commitments will bring that down into the

[Company Representative]: For example, we're putting blending facilities in Sohar, we're putting blending facilities in Europe, and we're looking at some other options in Malaysia. We want to increase our flexibility to distribute on a worldwide basis, and that actually helps us to better allocate the products and optimize not only the service to clients, but also our price realization. There's a third element that we're also improving: process flow sheets, to increase metallic recovery in the concentration facilities. We created a small technical group to develop and deploy best practices. This is extremely important because the metallic recovery on those concentration plants does have an enormous value. Last but not least, we're improving logistics, trying to figure out the places where we should be positioning blending facilities and concentration so that we can optimize logistics costs. Those are the things that we are doing.

Second quarter, which is the ambition for the nickel business to be sustainable. And, um, I know specifically on that segment because I know it's been a, a challenging 1 historically. The focus that we've mentioned there is um, not just to be the beneficiary, which we are as we've ramped up but more byproducts and to remind you at the moment in the Canadian nickel assets about half our revenues, derived from nickel at these prices. And the remainder is copper Cobalts pgms and uh, you know, precious metals just generally um, you know, we are the beneficiaries and we're seeing enhanced volumes and higher prices that are helping us there. But importantly, The increased volumes that we're seeing flow through are significantly, uh, contributing to, uh, and the low overheads are contributing, uh, to the fixed cost solution and those those require improvements and even Thompson. We're seeing the best throughputs in that operation at this stage, since I think it's 2021. So, every asset that I

What I'm seeing at the moment is coming to the party and contributing on what they control, and we have further to go. So I hope that gives you a sense.

Thank you.

[Company Representative]: Ultimately, to your question, the potential impact depends a little bit on a few factors. First is the competitor's reaction and how they are developing their own portfolio and how we would fit to complement their own portfolio. Just to give an example, you might see some of our clients, their view on product portfolio is decreasing quality to optimize resources and reduce C1 costs. This is where they're going. It's value accretive for them. As long as they're going this direction, that actually offers us a possibility to put more complementary material into the market. Our view is that this will increase the value and use of our products. The second one just to think about is how the market will react in terms of this anti-involution capacity closures.

Our next question comes from caoh. With Bank of America, you can open your microphone.

[Company Representative]: The less capacity you have available to produce the same amount of steel or the same amount of pig iron, the higher the premiums one would expect because the higher quality of iron ore would be demanded to maintain productivity of the remaining blast furnaces. I'm just giving you a few examples that this game will need to be played as we go, but that we have developed an enormous flexibility. We're monitoring the market very closely so that we can maintain the current premiums and try to optimize it even further.

Question is on pellets and briquettes. Uh, this year Valley took the decision to cut its pellet production as a reflection of less favorable market conditions. I just wanted to see if you can give us a sense of what signs you're looking for to bring that capacity back. And if there is a particular level of premiums for pellets, uh, that you're looking for, uh, to take that decision and bringing briquettes into the discussion. I just wanted to see if you can give an update on how the development of this product is evolving and whether you're confident at this point of the large large scale, applicability of applications of this product. Thank you.

Marcelo Bacci: Thank you for your question. Of course, we are monitoring very closely the potential and the changes that have happened and the potential additional changes in regulations, especially related to income tax on dividends and interest on capital. The situation we have at Vale S.A. is that we can pay, if you look at the minimum dividend policy that we have, most of it, if not the totality of it, can be paid using interest on capital. The immediate impact of the regulation on dividends for us is limited. We are monitoring. Still, there is some confusion in the market about the potential conflict between the corporate law and the new regulation that was created for dividend payments related to profits that already have been recorded in terms of when those dividends can be paid after declared. We are still working on that.

Like are you on the expanded net that uh we are not envisioning a change in that policy uh in the short term. Um I guess the company will gain more and more Capital flexibility over time as uh the relative weight of the uh uh of the uh reparation commitments uh becomes smaller in the expanded net that over time specially in the next year and a half.

So, um, a few months from now, we're going to be in a position where the difference between the net, the financial net, and the expanded net debt will be lower and lower, and at some point we're going to have to review the concept. But for the time being, we believe that both the concept and the range are adequate to our reality.

Uh, thanks for the question. In terms of pilots, there has been a decrease in demand, at least up until the end of the year. So, steel mills outside China are operating at lower capacity utilization, primarily due to competition from.

Imported steel from China. With that, there is less need for blast furnace productivity.

Marcelo Bacci: We are monitoring that very closely, as I said. If there is any opportunity to optimize the situation of the company and our shareholders in relation to tax, we're going to look very closely into that.

What negatively impacts Blast Furnace pellet demand is the scenario that we're facing. Additionally, we have seen some increases in supply coming from some aqua and from LKAB.

The way we see it is the medium term, you know, as of 201.

End of 2026 2027. There's going to be a significant increase in demand.

Operator: Thank you. Our next question comes from Carlos Alba with Morgan Stanley.

[Analyst 2]: Yes. Hello, good morning, everyone. Thank you very much. Congrats on the solid results. I wanted to focus a little bit on base metals. Maybe, Shaun, can you elaborate a little bit more on how you see the timing of Vale S.A. pursuing more aggressively the copper growth opportunity that it has? Obviously, several projects in the portfolio. How do you see the sequence of those? When can we start to see the board, maybe management, presenting the projects for board approval and then hopefully start on the path of expanding that copper output? My second question also on base metals would be if you can share maybe some color as to how the cash cost, without byproducts or before byproducts in base metals, has performed. Kudos to the company and to you on the lower all-in cost guidance.

Especially driven by uh, electric car furnaces which are coupled with direct reduction. Furnaces, so only in Europe you have many projects ongoing like all the German companies from hoagies atis in South Gita, you have Austria with West, uh you name it, you have uh in Mexico, you have terium PES Korea. So the amount of u the the demand for pallets over time is going to increase gradually. Also some in the US but the point is we don't have a target for

[Analyst 2]: That was definitely influenced by strong byproducts, which count, we'll take them. If you can share some light on how the cost performance has been before byproduct benefits.

[Company Representative]: Thanks for that. The copper growth, I'm going to, I think, mostly give you the detail on Vale Day. As much as I'm chomping at the bit to share it with you now, I can just say we've fundamentally redesigned our life of business planning this year, very much with an eye to exactly the dynamics you've mentioned. We are prioritizing, as I said earlier, dynamically capital to copper in Pará, specifically on R&D spend. The constraint that we have on copper growth is not throwing more money at that. I just want to be clear. Our plans currently, we are fully self-funded through our planning horizon, mostly through not just, as you said, byproduct credits, but really fundamentally through our entire business, restructuring our capital intensity, reducing our working capital, and fundamentally reducing our overhead and our costs in this business—things that we control. We are seeing opportunity.

[Company Representative]: I will disclose more within weeks of how we're seeing that opportunity to look at sequencing and growth opportunities. I'd sort of direct you to say, as far as I can see from the market analysis that we see with analysts and others, we're not even getting credit for what we've guided to yet. I recognize that the market is sort of waiting to see what we're capable of delivering. I hope that it's evident, particularly against the backdrop of a copper sector that's struggling to deliver. Our assets are hitting records. We have to get that done fundamentally to earn, frankly, the right from Vale and Menara for further capital, and we're delivering that. In addition, I think we're finding significant opportunities on how we approach projects and work with our partners and our stakeholders to unlock that copper growth.

[Company Representative]: I know it's not the detail you're looking at, but we will provide that within a matter of weeks. I think, to just coin and echo what Gustavo said, the more work we do, the more excited we get. I expect that as we get more drill results, and we will continue to increase our drilling, the constraint is just getting enough drills, frankly, for us to continue to do more. What we will find is, I think, each year for the foreseeable future, we'll be able to continually dynamically improve. We've seen a step change in copper, and I'm super excited about that. We see it in our internal valuations. The next one, just more broadly for base metals. If you remember in prior quarters, we started restructuring this business about a year ago. In fact, it was about six weeks into my tenure in the role.

[Company Representative]: I was actually with our operating teams out. We do quarterly reviews with all the asset and functional leads. Just last week, I'd say each of our assets is exceeding their internal commitments and plans. It's quite remarkable. That is looking, not at, to your point, byproduct revenues. As you say, we'll take it. We're obviously doing the things that we can to enhance recoveries. We've seen Salobo as an example compared to just a few years ago. We're about 10% ahead on gold recovery. These guys are doing an incredible job, and we're on track for record copper and gold production this year in Salobo as an example. At the same time, the focus is on reliability and fixed overhead reductions, which we're seeing flow through, things we control, which we're seeing flow through into the enablement of the decentralized model that we've spoken about previously.

[Company Representative]: That is manifesting in things like Sossêgo. Within a matter of months, a controllable 40% reduction in unit mining cost with changes in practices and engaging that workforce. We're seeing fixed cost dilution in practically all our operations, specifically the work that has been done in Voisey’s Bay, where they're now about 20% ahead. That has enabled Long Harbour, for the first time in its 11-year history, within a period of months, to actually be achieving its design capacity. It's never done that before. They're doing that through enhanced availability, reliability of the equipment specifically, but significant cost control and being able to drive that through and enhance productivities. We've still got a long way to go, I'd say, for the business as a whole. We've done well, but we've got more opportunity to achieve benchmark productivities.

[Company Representative]: Sudbury, I mentioned earlier, with the five mines, has achieved significant improvements, and they've done it safely. We've had about a 40% improvement in TRIFR. As you heard in the opening remarks, we celebrated in September bringing the Onça Puma Furnace 2 on, 13% or so under budget and on time. Importantly, we're already, Kilimanjaro this year with her team, has taken that asset now with the fixed cost dilution and being ahead of her cost commitments. We'll bring that down into the second quartile, which is the ambition for the nickel business to be sustainable. I know specifically on that segment because I know it's been a challenging one historically. The focus that we've mentioned there is not just to be the beneficiary, which we are as we've ramped up, of more byproduct revenues.

[Company Representative]: To remind you, at the moment in the Canadian nickel assets, about half our revenue is derived from nickel at these prices, and the remainder is copper, cobalt, PGMs, and precious metals just generally. We are the beneficiaries, and we're seeing enhanced volumes and higher prices that are helping us there. Importantly, the increased volumes that we're seeing flow through are significantly contributing to, and the low overheads are contributing to, the fixed cost dilution and those improvements. Even Thomson, we're seeing the best throughputs in that operation at this stage since, I think, it's 2021. Every asset that I'm seeing at the moment is coming to the party and contributing on what they control. We have further to go. I hope that gives you a sense.

Be available on our website at Valeant dotcom.

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Operator: Thank you. Our next question comes from Caio Ribeiro with Bank of America. You can open your microphone.

We would like to advise that forward looking statements may be provided in this presentation, including bodies expectations about future events or results encompassing those matters listed in the respective presentation.

[Analyst 2]: Okay. Thanks. Thank you for the opportunity. My first question is in regard to your expanded net debt. I just wanted to get a sense from you on if and when you could possibly consider a revision of your current range of $10 to $20 billion. What's the rationale behind a decision like that? If you do make any changes, what implications that carries for buybacks and dividends to be announced going forward, particularly if you increase that expanded net debt range at some point. In second place, my question is on pellets and briquettes. This year, Vale S.A. took the decision to cut its pellet production as a reflection of less favorable market conditions.

We caution you that forward looking statements are not guarantees of future performance and involve risks and uncertainties.

To obtain formation and factors that may lead to results different from those forecasts by valley. Please consult our reports value files with the U S Securities and Exchange Commission, the Brazilian Commies stones, you value. It is mobile yeah. It is and in particular the factors discussed under forward looking statements and.

[Analyst 2]: I just wanted to see if you can give us a sense of what signs you're looking for to bring that capacity back, and if there is a particular level of premiums for pellets that you're looking for to take that decision. Bringing briquettes into the discussion, I just wanted to see if you can give an update on how the development of this product is evolving and whether you're confident at this point of the large-scale applications of this product. Thank you.

Risk factors and values annual report on form 20-F.

With us today are Mr. Gustavo Pimenta CEO.

Mr. Marcelo Bacci executive Vice President of Finance and Investor Relations.

Mr. Jose I don't know data executive Vice President commercial and development.

Mr. Carlos mid Data's executive Vice President of operations.

And Sean as Mark C O a value base metals.

Marcelo Bacci: Hi, Caio. On the expanded net debt, we are not envisioning a change in that policy in the short term. I guess the company will gain more and more capital flexibility over time as the relative weight of the reparation commitments becomes smaller in the expanded net debt over time, especially in the next year and a half. A few months from now, we're going to be in a position where the difference between the financial net debt and the expanded net debt will be lower and lower. At some point, we're going to have to review the concept. For the time being, we believe that both the concept and the range are adequate to our reality.

Now I will turn the conference over to Mr. Gustavo Leamington, Sir you may now begin.

Hello, everyone and welcome to Valley's third quarter ceramic twenty-five conference call.

I would like to start by highlighting how excited I am about what we're building at Raleigh.

Our vision to become a trusted partner with the most competitive and resilient portfolio in the industry remained solid and we continue to make significant progress towards this future.

This quarter, we once again delivered solid operational and cost performance across the board and we are on track to deliver all of our guidance for the year.

Rogério Nogueira: Guys, thanks for the question. In terms of pellets, there has been a decrease in demand, at least up until the end of the year. Steel mills outside China are operating at lower capacity utilization, primarily due to competition from imported steel from China. With that, there is less need for blast furnace productivity, which impacts negatively blast furnace pellet demand. That's the scenario that we're facing. Also, we have had some additional increase in supply coming from Samarco and from LKAB. The way we see it is the medium term, as of end of 2026, 2027, there's going to be a significant increase in demand, especially driven by electric arc furnaces, which are coupled with direct reduction furnaces. Only in Europe, you have many projects ongoing, like all the German companies from Hüttenwerke, Thyssen, Salzgitter, you have Austria with Voestalpine, you name it.

We continue to advance our safety agenda.

Most notably by removing the last them from emergence level III.

A significant milestone in our de risking journey.

Our key initiatives and growth projects are also moving forward as planned.

Reinforcing our long term strategic focus and disciplined capital allocation approach.

These results give me great confidence in <unk> future and in the value we're creating.

Not only for our shareholders, but also for society.

Now, let's move on to the quarter performance on the next slide.

First I would like to highlight the solid operational results, we delivered across all three commodities positioning us to reach the upper limit of our annual production guidance.

This achievement reflects the outstanding performance of our operational teams and I want to congratulate them for their hard work and consistent throughout the year.

This quarter iron ore production, Richard 94 million tons, an increase of 4% year on year, and our highest quarterly output since 2018.

Rogério Nogueira: You have in Mexico, you have Pemex, Peñoles. The amount of demand for pellets over time is going to increase gradually. Also, some in the U.S. The point is, we don't have a target for pellet premiums to open up plants and continue to increase volumes. We'll react to the market on a continuous basis. We'll bring volumes to the market as we see fit.

This growth was primarily driven by a record third quarter performance at S 11.

Along with the ramp up of broker to cap Enamour inversion, granddad projects, which added flexibility to our operations and product mix.

Corporate also delivered a strong performance with production growing 6% compared to last year.

Supported by <unk> solid performance.

This was the best third quarter result for our copper business since 2019.

Nickel production remained flat year on year.

But with an increase in our own production. Thanks to the ramp up of the voices Bay Underground project.

This allowed us to significantly reduce our unit costs year on year as Marcello will present later.

Also in April we started operations at the second furnace of answer Puma in September.

The project was completed on schedule and 13% below the planet Capex reinforcing our commitment to efficiency.

The second furnace adds 15000 tons of production capacity per year and it is expected to further reduce unit cost by approximately 10% enhancing the competitiveness of our nickel business.

We also Richard other important milestones this quarter through our new <unk> program, which aims to accelerate the development of key projects in one of the world's most attractive mineral deposits.

As many of you know in June we received the preliminary license for the <unk> copper project and have since began preparations for construction.

Which is set to start in the coming months following the issuance of the construction license.

In iron ore, we received the operating license for the Sarah Sue plus 20 million tons per annum expansion.

The project has Richard 80% physical progress and should start up by the end of 2026.

Additionally, we secured approval to expand cell how less disk capacity from the current 6 million tons per year to 10 million tons per year.

Bringing extra volumes to the northern system with the highly competitive capital intensity of just $20 per ton.

Now looking at our portfolio.

One O valleys key competitive advantages is our ability to adapt to different market conditions.

Offering a product mix that meets the evolving needs of our customers.

This is possible given the flexibility of our supply chain supported by multiple blending concentration and distribution facilities across the world.

Throughout 2025, we actively adjusted our iron ore product portfolio.

Concentrating our high silica products and launching a new medium grade product from carriage us.

This flexibility results in significant value creation in Q3, our iron ore fines agreement increased by nearly $2 per ton quarter on quarter.

From an EBITDA perspective, those initiatives represent over $500 million improvement on an annualized basis.

Safety is at the center of every decision we make at valley and I'm very proud of the significant progress we have achieved this quarter in them safety and management.

Back in 2020, we made a public commitment by 2025 value would no longer have any dams classified at emergence level III the highest risk category.

Last August we fulfill that commitment the FERC keyless three of them. The last one at level three had its emergency status of efficient lowered two level G by Brazilian authorities.

This is an important milestone in our commitment to society and neighboring communities in a key mark in our safety journey.

Also in August we announced that violates successfully implemented the global industry standard on tailings management. The G. I S. T M meeting the requirements of this internationally recognized benchmark.

Lastly in September we completed the characterization of the group of them immune as you rise marking the 18th is structure eliminated under our program at.

Advancing the dam safety agenda is essential to ensuring no repetition and becoming a trusted partner to society.

We remain committed to delivering results and being a reference for safety and operational Excellency in our industry.

Our efforts to just form valley are beginning to be recognized by ESG rating agencies.

We've demonstrated substantial improvements in governance than safety and management health and safety and climate change. These advancements have led to upgrades in our ratings now surpassing levels seen prior to <unk>.

I would also like to highlight that over the last year and a half irrelevant number of ESG focused investors have remove with value from their exclusion lists.

We estimate roughly $1 five trillion in AUM can now invest again in our shares and fixed income instruments.

We remain dedicated to transparently showcasing the progress we've made across the company and we remain firmly committed to the principles of the UN global compact, including respect for human rights Labor standards and environmental protection.

I will now pass the floor to Marcelo bacci to discuss our financial performance I'll be back for closing remarks before the Q&A session. Marcello. Please go ahead.

Yeah.

Thanks, Gustavo and good morning, everyone as Gustavo highlighted we delivered another quarter of solid operational performance, which gives us even more confidence in the long term value we are creating for our shareholders.

This quarter, our pro forma EBITDA reached $4 4 billion, an increase of 17% compared to the same period last year and 28% higher than the last quarter.

As you consume those lines. This consistent result was driven by robust sales lower holding costs across all three commodities and more favorable pricing conditions in.

In base metals, EBITDA grew by more than $400 million year on year, reaching almost $700 million, thanks to better results in both copper and nickel.

In iron ore EBITDA was close to $4 billion, an increase of almost $250 million supported by higher realized prices and quality premiums, reflecting the success of our portfolio strategy.

This improvement was also supported by the higher sales of iron ore fines as I'll detail on the next slide.

Our iron ore sales increased by 5% year on year, reaching 86 million tons, the highest level for a third quarter since 2018.

This growth was driven by stronger production performance and solid demand for iron ore fines with benchmark prices staying above $100 per ton for most of the quarter. This quarter, we built up around 4 million tons of inventory. It's important to highlight that this was mainly due to volumes and transit.

Two hour 20 distribution and concentrating facilities in Asia, and Europe supporting our portfolio strategy.

We expect these inventories to be converted into sales over the coming quarters, helping us maximize the value generated by the business.

Now looking more closely at our cost performance I'm very pleased to see that we're on the right track to meet our 2025 iron ore cost guidance R&R all in costs declined 4% year on year supported by our portfolio strategy, which led our average iron ore fines quality premiums.

<unk> increased by almost $2 per ton quarter on quarter and $3 per ton year on year.

Our long term a friedman strategy is also delivering excellent results, reducing cost volatility and coming in $5 per ton below spot freight rates to China during the period.

Our <unk> costs, excluding third party purchases remained flat year on year, reflecting a positive impact from inventory turnover compared to last year, which offset the effects from the exchange rates and higher maintenance and materials costs.

These effects led to an increase in our production cost, which reached $23 per tonne this quarter the.

The production cost from this quarter, along with the less favorable exchange rate compared to last year are important factors to consider when we estimate in our <unk> costs for Q4, which is expected to increase year on year.

Despite this we remain highly confident in achieving our full year guidance of 25 to $22 per ton.

In base metals are performance stood out once again, showing the great potential of this business as we continue to unlock value true mooey initiatives.

Copper owning costs decreased by 65% falling below $1000 per ton. This was the fifth quarter in a row that we've seen cost reductions year on year.

And Nicole all in costs fell by 32% year on year to $12 $3000 per tonne, reaching the lowest level since the second quarter of 2020 to even after taking into account the impact of the <unk> deconsolidation.

These improvements came from Vale base metals consistent focus on efficiency initiatives combined with higher byproduct revenues in our poly metallic sites with gold being the main contributor.

Because of the lower than expected costs. So far this year and the favorable outlook for byproduct revenues. We are once again lowering our 2025 cost guidance. We now expect mutual all in costs to be between 13 and $14000 per ton and copper all in cost to be between one and one and a half thousand dollars.

Per ton.

This continued cost improvements means an EBITDA increase of nearly $900 million compared to our expectations at the start of the year.

Now, let's move on to cash generation recurring free cash flow reached one $6 billion in Q3, an increase of $1 billion year on year.

This improvement was primarily driven by our solid EBITDA in the quarter and a reduced impact from negative working capital.

Our total Capex was $1 $3 billion. This quarter, we expect investment disbursements to increase in the fourth quarter, keeping us on track to meet our five four to $5 $7 billion full year guidance.

On top of our recurring free cash flow generation. We also had a positive impact from the Allianz Senior's year transaction, which helped boost total free cash flow in the quarter to $2 6 billion.

This strong free cash flow generation and strong cash position were primarily used to return value to our shareholders with the payment of $1 $5 billion in interest on capital and a net borrowing of $600 million of spark of liability management next slide please.

As a result, our expanded net debt decreased by $800 million quarter on quarter, reaching $16 $6 billion with iron ore prices remaining above $100 per ton, we expect the free cash flow generation in the fourth quarter to bring us down at least to the midpoint of our target range of 10 to 20.

<unk> been involved in this context.

We see increased room to consider additional shareholder remuneration, even in the context of the participated debentures tender offer.

Before handing over to Gustavo for his closing remarks, I want to emphasize the value we are consistently delivering to our shareholders.

Our growth strategy cost efficiency and disciplined capital allocation, we are building a more resilient and high performing company.

These efforts strengthen our financial position and create conditions for sustainable and increasing returns to our shareholders overtime Gustavo Please.

Thanks, Marcelo before opening up for the Q&A session I would like to highlight the key takeaways from today's call.

Safety remains our core value.

In this third quarter performance only reinforces that.

As we continue to advance on building an accident free work environment and on delivering on our upstream then the characterization program. We once again delivered a solid operating performance with cost reductions across all businesses, reflecting our focus on operational excellence.

Our flexible product portfolio allows us to maximize free cash flow and long term value creation and the different market conditions and we are seeing those benefits in our financial performance we.

We are making solid progress on our strategic projects in the carriage as region, leveraging one of the richest and lowest cost mining dominance globally.

And finally, our disciplined capital allocation approach ensures we seize the best opportunities to generate long term value for all of our stakeholders now let's move on to the Q&A session. Thank you.

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.

Please ask your question in English and limit your question to two at a time.

Our first question comes from her doleful, Anjali <unk> with J P. Morgan.

You can open your microphone.

Okay. Good morning.

My two questions.

The formula and so first.

I would like to ask <unk>.

A question about the portfolio strategy.

That was I think that we discussed.

All right.

Recent.

The Investor Tour.

And it's.

Anything to see its already showing.

You know a large impact already in the third quarter.

So I wanted to ask you to give us a little bit more color on how this should progress.

What is the potential.

Just an overview on what should we expect a bulk portfolio strategy, which seems to be able to recruit interesting results.

And my second question I think is for batch to overstock preferred battery.

I think what.

What we hear from investors is.

Company is showing very strong performance.

The operations seem to be much more.

It seems like you have.

Your hands on the wheel and things.

I really improving and we're seeing limited surprises, which is always very good.

And when we see a quarter like this one where the company generated over $2 6 billion.

And free cash flow the question that I'm getting a lot from investors is how should we think about dividends as one part of the capital equation strategy going forward.

So those are my two questions. Thank you very much for the time.

Okay.

Yeah.

Good morning, Thank you for for the question.

On the portfolio I think up to now our joint actions and I'm enjoying it because those are the actions from the commercial.

Our operations and technical areas.

Optimize our product portfolio they have yielded very positive results.

Just a few examples.

The RBS N S. S C. J S. S J as our mid grade products from the northern part, which are both lower alumina mid grade ores.

Have commanded very high premiums versus the index 62.

As Gustavo mentioned it was close to $3 per ton lower my life to a six 2% if you quantified on the war.

Which was a way higher than a year ago.

If you look into the third quarter of 2015.

Find premiums reached 0.7 dollars per ton, which is actually doing.

2.6 dollars per ton higher than the third quarter 2024.

And 1.8 dollars per ton higher than the two key 2025, and this is and I'm sure I'd like to say that this is actually despite a relatively lower quality product mix.

So I mean very positive results so far.

Last but not least I youll see J premiums also kept a very healthy level and above $15 Bertram per ton, obviously, driven by some goods through margins, but also by a wiser product co location and we can talk more about it but.

But I think what I would like to reinforce that we're very confident in our product portfolio.

I think we see that our Youll see J N V. R. B F will remain our core products.

With a strategic location to regions and clients, who really require their unique properties.

Means that we will sell it but we are well located to clients and regions that actually value.

Or have a higher V a U or pay a higher via U.

<unk> for these projects products.

S. S C J as I said, which is the mid grade product from <unk> that we just introduced.

<unk> has already achieved sales of about $30 million per tonne.

So 30 million tones and is becoming a global product with potential to further increase its sales in 2026. So as we look into 2026, we believe that our volume was off SSA Jay will increase gradually.

Last but not least our Chinese concentrate which restored that there's a.

Not such Thunder product is becoming a highly branded product in the Chinese market. So this is very good news. This product is also commanding very good premiums in the Chinese market.

Thank the they're on the older. One is the pellets market that would have been talking about 2025 has been Ah Ah.

<unk> year for pellets.

We see 2026 2027 S ears, there will gradually recover.

Pellet premiums, especially with the startup of new new projects that will demand pellets, mostly projects. There are going to look into direct reduction looking for de carbonization and also with the Chinese exports cooling down a little bit.

Which will add more demand for our regions their needs they need pellets look I think.

We will keep proactively optimize our portfolio of solutions.

Not only based on market demand, but also on our mine plan possibilities as we had been doing with the operations team.

We will keep observing the market.

Observing the market needs and our competitors positioned so that we can define that were our best allocation of our best portfolio.

Although I will stop here, let me just add one one thoughts here and then I'll pass to Bacci took over the capital location, but I think what what you are seeing in the market. It seems that one thing we've been sharing with investors is the enormous flexibility that valley has in its portfolio right I think nobody in the industry.

<unk> has that flexibility we've talked about 'twenty.

Blending facilities across the globe several concentration facility so that allows us.

To put into the market, what our client needs at the right time, and I think theres more dynamic product allocation and development.

That we've been able to show just reinforces the enormous competitive advantage that we have to play along along the cycle, So I'm and I'm very happy with the outcome and I think.

We will be able to capture even greater value as as we move forward. So to your second question I'll less but you took over.

Thank you Gustavo Thank you hold off of for the question.

As you mentioned hurdle for the.

Stability of the company in the stability of the market are creating better conditions for us to think about the extraordinary the evidence for the coming months.

Uh huh.

As I said during the presentation the prices above $100 on a consistent way plus the operational performance are creating a very nice.

Cash flow position for us, which is better than we expected at the beginning of the year plus the positive.

Performance coming from the base metals business. So we.

We cannot anticipate the decision right now because there are still a few things to happen but.

It is likely that we have extraordinary dividend announced in the coming months.

Thank you.

Our next question comes from her Firebird silos with that ESCO BVI.

Hello, Good morning, and thanks for taking my questions. So the first question are there any plans to revise the offering and structure of the participating debentures analysis in early October I mean, any updates you could share on that front and that.

Sad, maybe connecting with these bacci speech on the dividends I mean, what would be the implication or the.

Patients for vowel as dividend payouts, particularly of course for extraordinary dividends and as a second question first gustava. Congratulations for the results that you have been delivering on the copper side and that said are there any plans or ways that you could that you believe that vale could accelerate or speed up.

The growth initiatives in the corporate business. Thank you.

Yeah.

Thank you Hi Fi Oh. This is Marcelo speaking on the participated debentures.

I guess, we have to of course the offer is to be concluded today.

And this offer has been unique it's the only one that we have ever done since the issuance of those debentures 28 years ago.

And I would like to stress out that the executive Committee does not expect to make another movement like this in the foreseeable future.

We also believe that the price that we're offering is quite reasonable and above the private area that we believe we have with a 15% premium compared to the price before announcement.

So if we consider our production volume guidance is the offer price of 42 of ice.

Implies an iron ore price of $100 per ton around the rone hundred dollars per ton in the long term.

So we think it's a very interesting offer.

Two to the holders and.

Of course, you know if you believe prices are to be above $100 per ton probably positioning in lithium the shares is a better deal. So I think you know we are not.

Considering any change to the offer especially because you know at this point it is about to be close today.

Well, then and Rafael for a question I will pass to <unk>.

Sean I think his he'll be able to provide more color what I can say.

<unk> is based on everything I've been hearing from the team to ensure an end and the exco RV BMS that the more we are looking to the.

And the growth opportunities are encouraged as the more excited we are so this is something hopefully at valley. They will be able to talk more about it give you concrete examples, but let me let me bring that Sean to the debate here I think you'll be able to share more details with you.

Thanks Christoph.

Thanks for the question Russell I think the short answer is yes.

We will cover more of this is Gustavo says in valor day, but.

Really we've fundamentally focused on two things right now to do exactly what you're saying the first one is you've seen the industry I think on track this year too.

To deliver against the original expectations with a series of issues by about 6% and issue for us to get the basics right and our existing operations. So you've seen a quota I did guide.

In Q2 that this was expected in both our segments to actually be our weakest quarter with planned maintenance like it's a sega.

Despite that we've seen our operators do incredible work and we're on track, particularly at Salobo for record performance and I think we're looking at Sega.

Your asset.

For the best operating performance, which is tougher than an older asset.

And certainly five years, which is exactly what we need as a <unk>.

The other thing then goes down to capital allocation on the project growth pipeline specifically Empire.

Yeah, we're not waiting for an annual.

Timeframe.

We've taken that meant we discussed this a bit during <unk>.

<unk> 2024 for example, we do about 20000 meters of drilling.

In the district.

This year alone we've.

Dynamically reallocate it.

R&D spend.

We've tripled our drilling this year and we will share more on what we are finding but it's incredibly exciting so that creates this very dynamic quest.

Question about drilling results, the endowments and how do we actually optimize not only to accelerate but to see what we can do to increase volumes over and above what we felt was conceivable.

We're very careful to make sure that we don't think the mistakes I think you see in the sector more broadly which is get over enthusiastic we have to ground us in delivery, but I think as Gustavo said in his opening remarks first Cabo directors macabre, we've worked with the government to be able to accelerate ahead of getting our works.

We hit the.

The weather window here on early works on the bridge, which is critical path. There are about 14% ahead of plan currently we have to get that sooner. We will we'll obviously communicate with the market soon but we are set up there for lower capital intensity and to do that faster.

And I won't.

Squirrel elite on some of what we're seeing with lots of business planning on our projects, but all of that is around reducing capital intensity execution risk and working more closely with governments on reducing permitting timeframes and I think we've got some really good news that we're working on in that area. The other thing is we.

We're seeing with the ramp up of course on the Poly Metallics. We're ahead on.

Boise is pay and we've seen our highest output in sunbury in five or six years.

We'll put over 5 million tons to declare a bolus year.

We are seeing a significant copper byproduct that as a material it's over 20% of our total copper contribution.

So that is a significant contribution to that business segments Olin.

Oil and cost improvements as well.

I'll file.

This is Marcello again, I forgot to mention about the a question on the effect of the buyback of the debentures on a potential dividend payment.

Say that at this point, there is no effect or or a minor effect. So this would not change our strategy in relation to dividends.

Thank you.

Our next question comes from Leonardo Correa with BTG.

You can open your microphone.

Okay. Yeah. Good morning, everyone. Thank you so a couple of things on my side.

And sorry, it's gonna be a bit similar to hold office. So sorry hold off for that then and valet management, but I'm moving back to two these two points, which I think are at this point critical right for the investment case, Oh is that it is starting with the commercial strategy right I mean, great results so far.

You gave a very good qualitative assessments of everything that's happening.

Things have been delivered very fast right. So there's been a let's say a U turn in.

And the direction of things in and you can already see an improvement.

And price realizations of dip.

Depending on how you look at it right one eight to 2.5 dollars per ton and better realized prices right.

It's natural I think for everyone to question given given the fast speed and an improvement.

Where where do you think we are in this let's say in this S curve right of of of this entire journey on on the commercial strategy I know, there's no guidance and I know, there's it's very difficult to quantify but would you say we're at the early stages of.

Of this optimization and that these results they could continue improving maybe doubling from where we are so anything quantitatively I think would be very helpful. At least to me. So we can understand.

The let's say the economic impacts of of what Youre doing.

The second point to my fellow myself, we spoke a lot about the potential extraordinary dividends you talked about the base. The response, but she wasn't how they impact that decision which is.

Close to zero or very little.

You're talking about high iron ore prices have been ahead of expectations and how that helps in the cash flow projections going forward I can imagine have improved.

Well, we haven't debated yet is the potential changes in regulation in the country right I mean, Brazil is on the verge of increasing.

Taxation on dividends to 10% and every single company every single management team and every single.

Our tax department.

Is is obviously running the numbers and.

And trying to assess implications and what what the next steps are right.

Looking into the numbers for wireless specifically right I mean, one can can simply conclude that there's about.

30% of the market cap and retain earnings right.

<unk>.

Which is which is a relevant number.

I know leverage is not high but maybe.

Maybe a bit higher than what the mid range of your guidance, but still manageable I want to see from you if if that changes the calculus right. This potential.

Regime change in Brazil on on taxation of dividends does that change in the short term your calculus on the extra ordinary dividends that you're about to announce thank you very much those are the questions.

Okay well.

No. Thank you very much. This is a very very fair question, let me break it down in two steps first let me give you a view of what we're doing and then I'll give you an idea of the potential impact okay.

So what we have been doing is that where.

We're keep proactively optimizing our portfolio of solutions. So we're always looking to the market demand as I said and looking at our mine plan possibilities just to give you a few examples of things we're doing.

We are developing additional more competitive concentration capacity on a global basis. So that we have a less costly bear in logistics.

For the concentrate production that we produce and that those concentrate production or these concentrate production allows us to think about different optionality in terms of blending.

We are establishing alternative blending facilities outside China on a global basis wherever possible. For example, we're putting blending facilities in Soho, we're putting blending facilities in Europe.

We're looking at some other options in Malaysia.

So we want to increase our flexibility to distribute on a worldwide basis and that actually helps us to better located products and optimize.

Not only not only the.

The service to clients, but also our price realization.

There's a third element there we're also improving.

Process flow sheets, so to increase metallic recovering the concentration facilities, we created a small technical group to develop and deploy best practices. This is extremely important because the metallic recovery on those concentration plants.

Do have an enormous value.

And last but not least we're improving logistics so trying to figure out the places where it should be positioned blending facilities concentration. So that we can optimize logistics costs. So those are the things we're doing.

But ultimately to your question so the potential impact depends a little bit of a few factors first is the competitors' reaction.

And now how do you develop developing their own portfolio and how it would fit.

Complement their own portfolio just to give you. An example, you might see some of our clients their view of <unk> product portfolio is decreasing quality.

Optimize resources optimize resources and reduce <unk> costs.

This is where they're going I mean, it's very accretive for them, but as long as theyre going this direction that actually offers us a possibility to put more complimentary material into the market and our view is that this will increase the value and use of our products.

So the second one just to think about is how the market will react in terms of this anti evolution capacity closures.

The less capacity you have available to produce the same amount of steel or the same amount the bighorn.

Higher depreciable, one would expect because the higher quality of iron ore would be demanded to maintain productivity of the remaining blast furnaces. So I'm just giving you.

A few examples that this game will need to plate will need to be played as we go but that we have developed.

And enormous flexibility.

And we're monitoring the market very closely so that we can maintain the current premiums and try to optimize it even further.

Well. Thank you for your question of course, we are monitoring very closely the potential and the changes that have happened in the potential of additional changes in regulations, especially related to tax income tax on dividends and interest on capital.

The situation we have at valley is that we.

We can pay if you look at the minimum dividend policy that we have most of it if not the totality of it can be paid using interest on capital. So the immediate impact on the regulation of the regulation on dividends for US is limited.

But we are monitoring is still there is some confusion in the market about the potential conflict between the a b.

The corporate law and the new regulation that was created by four dividend payments related to.

To profits that already already have been recorded.

In terms of you know the.

When those dividends can be paid after declared so youre still working on that.

But we are monitoring that very closely as I said and if theres any opportunity to optimize the situation of the company and our shareholders in relation to tax we're going to look very closely into them.

Thank you.

Our next question comes from Carlos de Alba with Morgan Stanley.

Yes, Hello, good morning, everyone and thank you very much.

That's on the solid results and I wanted to focus a little bit on base metals.

And maybe Sean can you elaborate a little bit more on how do you see the timing of violate pursuing more aggressively the copper growth opportunity that he has.

Obviously, yes.

Several projects in the portfolio, how do you see the sequence of those when can we start to see the board maybe management presenting.

The projects for board approval, and then hopefully a start.

The path of expanding that copper output and then my second question also on base metals will be if you can share maybe some color.

How the cash cost.

Without byproducts or before byproducts in base metals has performed obviously kudos to the company and to you on the lower all in cost guidance, but.

That does definitely were influenced by a strong byproduct, which they they count we'll take them, but just if you can share some light on how.

The cost performance has been before byproduct benefits.

Now, let's look thanks, thanks for that so the copper copper growth I'm going to punt I think that mostly to give you the detail on valor day as.

I'm chomping at the bit to share with you now.

Can just say, we fundamentally redesigned out lots of business planning this year and very much with an eye to exactly the dynamics you've mentioned so.

We are prioritizing as I said earlier dynamic dynamically capital to copper in Paris, specifically on.

On R&D spend and the constraint that we have on top of growth.

It is not throwing more money at it I just wanted to be clear like our plans. Currently we are fully self funded through our planning horizon muskie through not just as you said byproduct credits, but really fundamentally through our entire business restructuring our capital intensity, reducing our working capital and fundamentally reducing over.

And our cost service business, so things that we control. So we are seeing opportunity.

Our disclosed more within weeks of how we're seeing that opportunity to look at sequencing and.

And growth opportunities.

So the direct you to say.

As far as I can see from the market analysis that we see with analysts and others, we're not even getting credit for what we've guided to that yet so I recognize that the market is sort of waiting to see what we're capable of delivering.

I hope that we all hope that it's evident particularly against the backdrop of a copper sector, but struggling to deliver our assets are hitting records with like we have to get that done fundamentally that.

Frankly that right from Valeant Menorah for further capital and we're delivering that and then in addition, I think we're finding significant opportunities on how we approach projects and work with our partners and our stakeholders to unlock that copper grub. So I know it's not the.

Although the detail Youre looking at but we will provide that within a matter of weeks.

And I am I think to just quoting what echo what will stop it said the more work we do the more excited we get and I expect that as we get more drill results and we will continue to increase our drilling. The constraint is just getting enough draws frankly for us to continue to do more.

What we'll find is I think each year for the foreseeable future, we'll be able to continually dynamic improvement we've seen a step change in copper and I'm Super excited about that we see it in our internal valuations.

The next one just.

More broadly of course base metals.

If you remember in prior quarters, we started restructuring this business.

About a year ago in fact, it was about six weeks into my tenure in the role.

And the team I was actually with the operating teams, we do quarterly reviews with all the yes, it and functional needs. So just last week.

Each of our assets is exceeding their internal commitments implants.

That's quite remarkable amended looking.

To your point byproducts and as he said, we will take it and we're obviously doing the things that we can to enhance recoveries. We're seeing salobo as an example, compared to just a few years ago. We're about 10% ahead on gold recovery.

These guys are doing an incredible job and we're seeing Rick we're on track for record copper and gold production this year and Salobo as an example, but at the same time.

The focus is on reliability and fixed overhead reductions, which were seeing flow through things, we can control, which we're seeing flow through into the enablement of the decentralized model that we've spoken about previously and that is manifesting in things like the Sega within a matter of months are controllable 40%.

Reduction in unit mining cost with changes in practices in engaging the workforce, we're seeing fixed cost dilution in practically all operations specifically.

The work that has been done in <unk>. We're there now, but 20% ahead and that has enabled long harbour and the first time in its 11 year history within a period of months to actually be achieving its design capacity, it's never done that before and they're doing that through enhanced availability reliability of the equipment, specifically, but significant.

Cost control and being able to derive drive that through and enhance productivity and we've still got a long way to go I would say for the business as a whole we've done well, but we've got more opportunity to achieve benchmark productivity.

Barry I mentioned earlier is with the five mines has achieved significant improvements and have done it safely we've had about a 40% improvement in terrific.

We as you heard in the opening remarks celebrated in September bring.

Bringing the answer Puma furnace, two on but you know.

13, or so percent under budget and on time and importantly that is were already drilled mid of this year with her team is taking that asset now with the fixed cost dilution and being ahead of her her cost commitments will bring that down into the second quarter, which is the ambition for the nickel business to be sustainable.

I know specifically on that segment, because I know it's been a challenge you want historically the focus that we've mentioned that is not just to be the beneficiary, which we are as we've ramped up but more byproducts and to remind you at the moment in the Canadian nickel assets about half of our revenues derived from nickel.

At these prices and the remainder is copper cobalt teaching EMS and precious.

Precious metals this generally.

We are the beneficiary is missing enhance volumes and higher prices that are helping us there, but importantly, the increased volumes that we're seeing flow through a significantly.

Contributing to that.

Contributing to the fixed cost dilution on those.

Improvements in even Thompson, we're seeing the best throughput in that operation at this stage I think it's 2020. One so every asset that I'm seeing at the moment is coming to the party and contributing on what they control and we have further to go so I hope that gives you a sense.

Thank you.

Our next question comes from <unk> <unk> with Bank of America.

Can open your microphone.

Okay. Thanks, Thank you for the opportunity. So my first question is in regards to your expanded net dead I just wanted to get a sense from you on if and when you could possibly consider a revision of your current range of $10 billion to $20 billion, what's the rationale behind.

A decision like that.

And if you do make any changes what implications that carries for buybacks and dividends to be announced going forward, particularly if you increase that expanded net debt range at some point and then in second place. My question is on pellets and Briquettes. This year validate the decision to cut its pellet production as it reflects.

And a less favorable market conditions I just wanted to see if you can give us a sense of what signs you're looking forward to bring that capacity back and if there is a particular level of premiums for pellets that youre looking for to take that decision and bringing briquettes into the discussion I just wanted to see if you can give an update.

On how the development of this product is evolving and whether you are confident at this point of the large large scale applicability of applications of this product. Thank you.

Okay on the expanded net debt.

We are not envisioning a change in that policy in the short term.

I guess, the company will gain more and more capital flexibility over time as the relative weight of the.

Of the reparation commitments.

Becomes smaller in the expanded net debt over time, especially in the next year and a half.

So.

A few months from now we're going to be in a position where the difference between the net the financial net debt and the expanded net debt will be lower and lower and at some point, we're going to have to review the concept, but for the time being we believe that both the concept and the range are adequate to our reality.

Got it thanks for the question in.

In terms of pellets there has been a decrease in demand at least up until the end of the ear. So steel mills outside outside China. They are operating at lower capacity utilization, primarily due to competition from imported steel from China and with that that there's a lasting.

Need for blast furnace productivity.

What impacts negatively blast furnace pellet demand. So that's that's the scenario that we are facing.

So we have had some additional increase in supply coming from some ocwen from <unk> the way, we see it as the medium term as of 2000.

And our 2026 2027, there's going to be a significant increase in demand, especially driven by <unk>.

Electric arc furnaces, which are coupled with direct reduction furnaces. So only in Europe, you have many projects ongoing like all the German companies from a whole gears of tuition sows get though you have Australia with first.

You may have it you have in Mexico, you have Ternion pith Korea, so the amount of <unk>.

The demand for pellets overtime is going to increase gradually.

So some in the U S. But the point is we don't have authority for.

Pellet premiums to two two open up plants and continue to increase volumes I mean, we will react to the market.

On a continuous basis, so we will bring volumes to the market as we see fit so but our expectation for the years to come is actually very positive when you just to overcome just sort of.

At this point in time, where China is exporting significantly in hurricane steel steel mills have blast furnaces around the globe.

In terms of brackets in brick is development. We're extremely confident I think we have two kinds of brick. It's one four blast furnace, which have been up we have a few blast furnaces, which are already operating at very high participation of briquettes in their burden mix in some cases, even a 100% with.

Very good very.

Very good performance in terms of productivity in terms of fuel consumption and our challenge now is actually to prove it for direct production.

We're running some industrial trials by the end of this year beginning of next year and our expectation is extremely positive we should be able to give you a better view.

The results of this this this or this industrial trials in the next call.

Thank you.

Our next question comes from Danielle <unk> with <unk> BBA.

You can open your microphone.

Hi, everyone. Thank you for taking my questions.

Of them have actually been answered but.

Maybe I'll try to do the one that we.

We don't talk that much or that people care about which is on sabbatical Brian the company.

Got out of its judicial reorganization.

Sure.

For those that have been following the story for us for a long time.

Yeah.

I think and correct me, if you think I'm wrong, but investors in general have kind of zero.

Dividends received.

It could be received by Vale from San Marco and then right. After the dam burst happened and then.

While we started to disclose the potential contributions to the Hanover Foundation, and so and so forth, but if you could comment a little bit.

How the ramp up of the second concentrator is is doing.

And if it's too soon or not.

Maybe just think about a reversal of some of the provisions that you've made.

Therefore, the contribution to the Hanover Foundation, if you think that's a mark will be able to take care of.

Those payments themselves.

And therefore some.

Could alleviate b E contributions that could be made or that would have to be made by Vale and BHP.

That would be great.

And my second question is can you sort of talking about the.

This.

Overhangs or most of the overhangs that BARDA has sold over the past year on year and a half.

<unk> gone a long way.

If you have any updates on the legal case and going in the United Kingdom.

If we if you've had any developments there.

That would be that would be great. Those are my questions. Thank you so much.

Thanks, Danielle Gustavo here I'll do the first one in and Batuik over the second one look we're very very happy with the progress that the team in San Marco has been doing they've they've ramped up the second concentrator.

Doing around 15 million tons thereabouts, you make a decision of going to the third concentration so some market could be.

Getting all the way up to 28 million tons in a few years out. So we are very happy with the operational performance. They now also incorporated we incorporated the responsibility for the reparation and they've been doing an outstanding work. There. So it is a very strategic asset for valley I think it's early to tell.

About the impact zone provisions there is still a lot of work to be done there, but from an asset perspective. It is a very strategic asset that we like very much and we are very excited with the work that the team.

Has been doing so far.

Yeah.

On your second question first on the UK case is still going on we expect a potential decision of this phase of the of the of the case in the coming weeks sometime in November.

That could mean the end of the process, if we win or.

Actually not we but.

Technically BHP, but we share any consequences with BHP, but if BHP prevails that wood and the process.

If not that would lead the process to another phase that will take a few years in order to quantify the potential losses of the claim it's important to mention that some of the claimants.

That were initially part of the lawsuit in the U K have decided to join the Brazil agreement, which we believe is the main.

Means to compensate the impact that people so out of the more than 300000 individuals that joined the Brazil agreement.

Half of those at least where part of the UK agreements. So they decided to give up on the on the U K in order to join the Brazil agreement and they have been also.

Already paid in Brazil.

And.

Part of the municipalities also joined the Brazil agreement and the part that have not joined have been provided for in the provisions that we constituted.

In Brazil, so we considered that.

The case in the U K is still goes on there may be an additional impact.

In our numbers coming from that but part of that has been resolved already.

Thank you.

Our next question comes from carrier agreement with UBS.

Can open your microphone.

Hello, Good morning, everyone. Thank you my first question to two horse yet.

On China mineral resources group.

So is that a we understand they have reached a significant portion overall overall Chinese iron ore purchases and so I wanted to hear from you Howard the talks going with between Vale and then are there.

They're obviously news are the competitor that has been having some issues on those thoughts.

Discussions so it's about I understand what has been violated tried it.

John negotiating with them and if you can share with US what has been the focus point of those negotiations is there any talks or any sort of long term supply agreement any color there would be would be helpful to us and the second one is actually a follow up to the previous expanded net debt question and.

More focused on the methodology I guess.

And then for Bacci, but bunch of my questions have been emerging since since you guys announced the perpetual debenture debenture repurchase are and whether or not this would raise the expanded net debt figure if the if it were intact dividends, which you guys already talked about but at the end of the day I think the point is there other debt like.

Instruments on valleys balance sheet, which is which are not really included in there.

The expanded net debt methodology. So I wanted to understand how does Vale internally look at its overall debt burden our obligations.

However, we can call it and it is big.

Expanding that that method actually the one that you most used inside of the company and if not if there are any plans to to rethink their methodology changed the methodology going forward, then and eventually even raised the target range. Thank you very much.

Okay <unk>.

Thanks for the question.

No.

First of all I think we're falling closely been negotiations.

<unk> has been having with other iron ore players.

And we are also in talks with <unk>, but I'd like to just reinforce that China has been a very historical partner for us and we have.

An extensive history of cooperation with our Chinese partners. For example, we've developed <unk> with Chinese clients.

We have a comprehensive network of blending facilities, which we've developed with the Chinese sports.

We've developed the Vlccs with Chinese shipyards and ship owners. So there's a long history of collaboration.

So given this is a long standing relationship and the value that we place in China, we have held com.

Comprehensive conversations with CMO G alone the ears, but we've always explored win win alternatives understanding that and this is important that we have a product portfolio that is unique.

And it's very complementary to the all of the offering to China has so having that in mind, we're working with them.

Just to find win win solutions I'll be there will be thought next weeks, we're talking to them, but we hope to find.

So win win solutions.

<unk> of all the unfortunately.

Kyle on the expanded net debt.

It is indeed, the indicator that we use internally.

For the evaluation of our capital structure.

We do have the participation debentures as an additional instrument that is not included in that net concept.

But that's because of the nature of that instrument that is a perpetual instrument.

Where we have the net present value of that recorded as a liability, but theres a nonfinancial liability in our balance sheet. So it is an obligation anyway that we would have to be paid.

In terms of the of the of the interest or the AR.

Semiannual interest that we pay but the principal amount is recorded in another balance sheet line.

We continue to think that the expanded net debt is the right way to look at this because we still have a significant amount of reparations to be paid.

As I said.

During 'twenty six 'twenty seven a very important part of those payments we will have to.

To be performed.

So by the end of 'twenty, seven or mid 'twenty seven.

We're going to have a much lower difference between financial debt and expanded debt, which means that we may be in a position to review the concept.

It is important to notice that the you know the.

The obligation related to reparations is different from a regular death, because it cannot be refinanced we need to pay as they mature. So that's why it's important to keep that concept at this point, but as.

As I said in the coming years, we're going to be in a position to reveal them.

Thank you.

Our next question comes from Matthew Fassler with Goldman Sachs. You can open your microphone.

Thank you Boston, where everyone is.

Another one for you in very high demand today.

How should we think about the change in the benchmark rates into next year, obviously lots of moving from 62% to 61% of fee along the silica and I think phosphorous benchmarks also increasing into next year as well since it will be part of a natural industry transition into lower grade assets.

Should we think about that and our understanding is that especially for flat steel, which is I think is becoming more relevant the long steels now in China.

No.

Students is relatively more it's more important, especially when you think about phosphorus Colton and I think they are more sensitive to that so.

All those valley places into that that trend in terms of benchmark.

<unk> and the change in terms of product mix in China.

Going forward as well.

And maybe the second one to Gustavo will start will obviously good job on the operational front being done in the last year or so I think <unk> been talking on the on the media and information on that.

While we have regained the first spot in terms of the largest iron ore produced producer protection of disease, but with higher cost from this next year. So it's great, but obviously when we look at compass.

Company size in terms of market cap or whatever other metrics you want to look at our funnel has clearly lagged peers as well right. So.

He is asking about all we can expedite copper growth and you know you obviously have other R&R projects to be delivered into next year as well, especially in the north so there's more value to be created for sure but.

Is that all is that IMAX sides from the board or from managements too.

<unk>.

Two to catch up to that to that lag.

When we look at.

Ranking on a global scale. It's again, there's lots of opposition right. So is that a nice size of bad or it's just.

It is what it is and.

We will keep doing what you have in terms of our internal environment.

Obviously, another way to ask about M&A or any other ways to grow the business faster and faster mode. Thank you.

Must to begin with our with the benchmark where the pra's.

This is a very good question. Indeed, there is a bit of uncertainty right now as most of our competitors are moving their product grades more towards a 61% such as the pilbara blend at 68. The agencies are discussing about migrating from the index's 62 to an index.

61 at this point in time, they're going to be publishing a very differential between the index 62 in the index 61.

But probably down the road the prevailing index will be a 61, we are our products are actually higher even our b R. B F is a 63% of feed content. We're discussing with the index for example, the possibly the launching.

And with the PRA that we're talking about metal bulletin plots, Argos and modest U K y.

The possibility of launching.

Our lower alumina 61.

Morten to say that our products are always so.

The specification, which is higher fee, let's say Bureau, BFS 63, but when we we bring it to an index. It's normalized for F. E. Okay. So there shouldn't be much of a change.

We will be discussing with the agencies, what makes sense for us to sort of to compare our products with what is the best reference what's the most liquid reference but this is still ongoing okay.

In terms of fast content, you were absolutely right forces, becoming more and more important, especially when you have a such large volumes of products such as the yen the from BHP and Rio Tinto coming out of the market.

Should be one of the specific elements that has to come into the specs and has to be evaluated and put into a value differential. We are working on these fronts. So we will give you more update as as we firm up our solution.

Tommaso Gustavo here on your second question.

Look we agree with you I think there is.

There's still enormous opportunity for valley to unlock value I think this management team is highly focused on that.

And despite some of the real rate. We had recently we still believe there is a lot of opportunities for us to continue to advance and regain.

Our position in the market for new market GAAP standpoint, that's what we are.

Working on and this is the legacy Wanna leave be very focused on value creation.

As we go along and in our view is that the value will accrue.

And we will regain it if we continue to operate our assets well that we are outstanding in terms of operational performance showed the results you've seen.

It is highly encouraging and I think we can do even better not only in iron ore, but also in base metals disease, a key priority for us.

And in this industry. This is one of the most important things that you have to master.

But we also see valley as a company with potential highly accretive growth opportunities. If we look at the comps.

And the capital intensity for some of our competitors.

Just to stand still is substantially larger than us and I think sometimes this is underappreciated by the market value has.

And unique potential to bring volumes and grow with the capital intensity that is substantially better more calm.

<unk> than our competitors. So if a few years out we are doing 360 million tons of iron ore.

With the right mix of assets.

Lower cost this is going to be for sure. The most competitive iron ore platform in the world I have no doubt about it and then I'm feeling more comfortable that we'll be able to get to their future.

And if we can double the size of copper and tomorrow do 700, Kilotons not 350 <unk>.

Leveraging endowment another unique advantage of valid endowment than we have we don't have to go to other places M&A, yes, I don't know if people are doing M&A, but we don't need to do we do have the resources here. So it may take a little longer.

But remember we are very focused on value creation here, so I'd, rather take a little more time, but develop the right projects with the right level of returns and growth consistently because I think that's what it's gonna future few years out.

Right and sustainable value for our shareholders. That's what this team is very focused on and I think it's it's it's in our hands to deliver.

Thank you.

This concludes today's question and answer session.

I would now like to close the conference and we thank you for your participation and wish you a nice day.