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Vale S A : Performance in 2Q21

07/29/2021 | 03:17am EDT

Fernandinho dam decharacterization works concluded in July 2021


IN 2Q21



Investor Relations Department

Ivan Fadel

André Werner

Mariana Rocha

Samir Bassil

Conference call and webcast on Thursday, July 29th

  • Portuguese(non-translated) at 10:00 a.m. Brasilia time
  • Englishat noon Brasilia time (11:00 a.m. New York time, 4:00 p.m. London time).

Brazil: (55 11) 3181-8565 or 4210-1803

USA: (1 412) 717-9627 or toll free (1 844) 204-8942

U.K.: (44 20) 3795-9972

Access code: VALE

Except where otherwise indicated, the operational and financial information in this release is based on the consolidated figures in accordance with IFRS. Our quarterly financial statements are reviewed by the company's independent auditors. The main subsidiaries that are consolidated are the following: Companhia Portuária da Baía de Sepetiba, Mineração Corumbaense Reunida S.A., Minerações Brasileiras Reunidas S.A. PT Vale Indonesia Tbk, Salobo Metais S.A, Vale Holdings B.V., Vale Canada Limited, Vale International S.A., Vale Manganês S.A., Vale Malaysia Minerals Sdn. Bhd., Vale Moçambique S.A., Vale Nouvelle- Calédonie SAS, Vale Oman Pelletizing Company LLC and Vale Oman Distribution Center LLC.

This press release may include statements about Vale's current expectations about future events or results (forward-looking statements). Many of those forward- looking statements can be identified by the use of forward-looking words such as "anticipate," "believe," "could," "expect," "should," "plan," "intend," "estimate" "will" and "potential," among others. All forward-looking statements involve various risks and uncertainties. Vale cannot guarantee that these statements will prove correct. These risks and uncertainties include, among others, factors related to: (a) the countries where Vale operates, especially Brazil and Canada; (b) the global economy; (c) the capital markets; (d) the mining and metals prices and their dependence on global industrial production, which is cyclical by nature; and

  1. global competition in the markets in which Vale operates. Vale cautions you that actual results may differ materially from the plans, objectives, expectations, estimates and intentions expressed in this presentation. Vale undertakes no obligation to publicly update or revise anyforward-looking statement, whether as a result of new information or future events or for any other reason. To obtain further information on factors that may lead to results different from those forecast by Vale, please consult the reports that Vale files with the U.S. Securities and Exchange Commission (SEC), the Brazilian Comissão de Valores Mobiliários (CVM) and, in particular, the factors discussed under "Forward-Looking Statements" and "Risk Factors" in Vale's annual report on Form 20-F.
    Cautionary Note to U.S. Investors - The SEC permits mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We present certain information in this presentation, including 'measured resources,' 'indicated resources,' 'inferred resources,' 'geologic resources', which would not be permitted in an SEC filing. These materials are not proven or probable reserves, as defined by the SEC, and we cannot assure you that these materials will be converted into proven or probable reserves, as defined by the SEC. U.S. Investors should consider closely the disclosure in our Annual Report on Form 20-K, which may be obtained from us, from our website or at http://us.sec.gov/edgar.shtml.
    The information contained in this press release includes financial measures that are not prepared in accordance with IFRS. These non-IFRS measures differ from the most directly comparable measures determined under IFRS, but we have not presented a reconciliation to the most directly comparable IFRS measures, because the non-IFRS measures are forward-looking and a reconciliation cannot be prepared without unreasonable effort.

Vale's 2Q21 performance

Rio de Janeiro, July 28th, 2021 -"Safety, People and Reparation continue to guide us and permeate Vale's main achievements. As we proceed with the resumption of our iron ore capacity, we also eliminated six upstream dams and advanced consistently on our ESG agenda. We believe in safe production and operational excellence, which is why we have maintained a high guard on the prevention of COVID-19 in all countries where we operate. With elevated confidence, Vale remains on track in its de-risking, reshaping and re-rating strategy", commented Eduardo Bartolomeo, Chief Executive Officer.

Reparation of Brumadinho

We are advancing with the compensation and remediation commitments established since 2019 and with those provided for in the Integral Reparation Agreement, signed in February 2021.

  • The agreement provides for the Income Transfer Program, to be managed by the authorities, which will replace the Emergency Aid program managed by Vale sinceMarch2019. While the Income Transfer Program is still under structuring, Vale has continued to pay emergency aid to more than 101,000 people in Brumadinho and the region along the Paraopeba river, summing up over R$ 2.2 billion paid since 20191;
  • We are finishing the commissioning of a new11-kilometer pipeline and water catchment system at an unimpacted point on the Paraopeba River in Brumadinho. The new facility will be responsible for supplying about half of the water demand for the Belo Horizonte Metropolitan Region in the future. Monitored operations - will be started with the oversight of Vale and water concessionaire Copasa - will be started with a flow of 1,000 liters per second. The volume will gradually increase to 5,000 liters per second, the same flow rate as the currently suspended intake;
  • We completed a new nursery for the Palhano community, in Brumadinho (MG), with a total area of 700 m², and the reform of the Community Association of Cachoeira do Choro, in Curvelo (MG). In healthcare, over 1,300 new equipment were delivered to 76 Basic Healthcare Units of 8 municipalities. In the environmental front, Vale have handled 3.5 million m³ of tailings for removal, approximately 36% out of the 9 million m³ volume leaked.

The compensation and reparation of individual damage also advanced, reaching over 10,700 people with indemnification agreements, a total of R$ 2.63 billion committed2. For further details on the Reparation progress, an overview of ongoing works and projects, and the terms of the Integral Reparation Agreement, please visit www.vale.com/esg.

  1. As of July, 22th, 2021.
  2. Includes agreements signed by affected people, including those pending court verifications, and paid and payable amounts as of July 22th, 2021.


Samarco and the reparation of Mariana

Despite Samarco filing for judicial protection under Brazilian bankruptcy law, reparation works and indemnification accelerated in 2Q21:

  • Fundação Renova now expects to have completed or delivered by December 2021: (i) at Bento Rodrigues, a total of 79 houses and 15 plots of land at the resettlement; (ii) at Paracatu de Baixo,9 plots of land at the resettlement, in addition to family resettlement with 9 houses and 2 plots of lands; and (iii) at Gesteira, 4 processes of credit letter (similar to a family resettlement). All infrastructure works (school, square, health center, sports court, oratory, service station, public lighting, paved roads and sewage treatment plant) at the Bento Rodrigues settlement have been completed;
  • In 2Q21, 5,300 people entered into compensation agreements for individual damage through the Simplified Indemnity System, with over 17,000 people in total since the system's implementation in August 2020. Over R$ 1.6 billion has been paid to individual reparation until the end of the quarter.

Due to overruns in the resettlement works, especially due to COVID-related delays, and due to new communities and categories(tourism entrepreneurs, informal hotels, inns, bars and restaurants; informal sand and clay traders, among others) being included in the indemnification program, Vale recorded an additional provision of US$ 560 million related to expected disbursements to support Samarco and Renova Foundation. As of June 30, 2021, R$ 14.5 billion have been disbursed by the Renova foundation in the reparation of Mariana, being R$ 4.7 billion supported by Samarco and R$ 9.8 billion supported by Vale and BHP in equal parts.

Clauses 94 and 95 of the TAC-GOV provide for a review of the 42 programs of the Renova Foundation within two years of signing. The review process has started and a "letter of principles" committing Samarco, Vale, BHP and several Brazilian authorities was signed in June 2021. The document establishes the object of negotiation as the "final definition of the scope, current object (considering measures already performed and expenses already incurred), specific objectives and delivery milestones for the reparation programs" conducted by the Renova Foundation.

According to §2 of clause 232 of the TTAC, the compensation amount for the non-repairable damage caused by the Fundão dam collapse has already been stipulated and is not subject to renegotiation.

Improvements in dams' safety

We continue to advance with improvement works for dam safety and with our Decharacterization Program for Upstream Dams. In 2Q21:

  • We achieved better safety conditions for Doutor and Sul Inferior dams, allowing the reduction of their emergency level to protocol 1;
  • We completed the decharacterization of the Fernandinho dam in Nova Lima (MG)3- the structure no longer has the characteristics of a tailing storage facility. Six out of 30 structures within Vale have already been decharacterized;

3Pending evaluation by the competent Brazilian bodies.


  • We initiated tailings removal activities at B3/B4 dam in Nova Lima (MG) and Sul Superior dam in Barão de Cocais (MG), two of the three dams currently at emergency level 3. These preliminary works use remotely operated equipment and will enable the advancement of decharacterization projects for both dams;
  • In support of the decharacterization program, we concluded the construction of the containment structure downstream the Forquilhas I, II, III, IV and Grupo dams, near the Fábrica Mine, with the capacity to retain tailings in a hypothetical scenario of simultaneous collapse;
  • We assigned an Independent Tailings Review Board (ITRB) to each Operating System in the Iron Ore business. The ITRB role is another important practice, in line with the requirements of the Global Industry Standard for Tailings Management (GISTM) and other international industry references. The ITRB provides independent technical review of the design, construction, operation, closure and management of tailings facilities. Each corridor ITRB held its first meeting in 1H21;
  • We continue to advance with anin-depth assessment of processes and practices to ensure the enhancement of our Tailings & Dams Management System and progress towards our compliance with the GISTM requirements.

Vale maintains its commitment to have no tailings dams in unsatisfactory critical safety conditions by 2025 and to de-characterize the remaining 24 upstream tailings storage facilities. For further information on Vale's dam safety management, please visit www.vale.com/esg.

Advancements in ESG practices

In 2Q21, to advance with our Climate Agenda and support our leading journey towards a low- carbon mining, we announced investments of US$ 4-6 billion for greenhouse gas emission reduction by 2030 (which includes the previously announced US$ 2 billion to reach renewable energy self-sufficiency). Such capital allocation will ensure our commitment to reducing 33% of our scopes 1 & 2 emissions by 2030 and the achievement of carbon neutrality by 2050.

In the quarter, we also had the start of operation of vessels equipped with rotor sails. That is part of Vale's portfolio of initiatives in shipping, which will contribute to achieving our commitment to reduce 15% of net Scope 3 emissions by 2035.

In our Social Agenda, we defined a structured due diligence process on Human Rights, which will be rolled out within 3 to 5 years to all our operations and critical projects. The assessments' results will be integrated into the company's corrective actions, with due monitoring and communication of treatment effectiveness.

In Governance, the 2021 Annual General Meeting of Shareholders in April led to major advances in the Board of Directors independence: (i) Vale's Board is now majorly comprised of independent members (8 out of the 13 Board members are independent); and (ii) the Chairman elected is also independent. For further information on those and other ESG initiatives and practices, please visit www.vale.com/esg.



Vale SA published this content on 28 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 July 2021 07:16:10 UTC.

© Publicnow 2021
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