Vale S A : Day 2020 Virtual - Transcrição

VALE DAY 2020

Mr. Ivan Fadel: So first of all, I'd like to thank you very much for being here with us today in our first completely virtual Vale Day. So for our presentation and Q&A session here we have our senior executives and I'll quickly introduce each one of them. So we have here with us Eduardo Bartolomeo, our CEO; Marina Quental, Director of People; Carlos Medeiros, Safety and Operational Excellence Officer; Marcelo Spinelli, Executive Officer for Ferrous Minerals; Mark Travers, Executive Officer for Base Metals; Luciano Siani, our CFO, Alexandre D'Ambrosio, General Counsel; Alexandre Pereira, Executive Officer for Global Business Supports; Luiz Eduardo Osorio, Executive Officer for Sustainability and Institutional Relations; Paulo Couto, Director of Coal; and Marcelo Klein, Recovery and Developments Director.

So, we plan to have a 1h15m slide presentation, including six videos, and after that a 45 minute Q&A session. So, we have received already many questions in advance, but we will also collect questions during the slide presentation and for that please use your cell phones and scan the QR code you're going to see on the screen.

So, finally I should remind you that all participants will be on a listen-only mode to improve sound quality. So, with that said I hope you enjoy our event and I will now pass it on to Eduardo Bartolomeo, who will go over our presentation on "How to Build a Better Vale". Eduardo, please. Thank you.

Mr. Eduardo Bartolomeo: Thank you, Ivan. First of all I hope everybody is safe and sound and I would like to thank you for being with us today in this virtual setting that's going to be a novelty for everyone. But it's my second day at Vale Day and it's an honor to have the opportunity to discuss and show the important steps that we're taking towards building a safer and more reliable company.

But before we do that, I would like to reinforce once again that our number one priority is the reparation of Brumadinho. We will never forget Brumadinho. Since I took over the leadership of Vale, I've been vocal about three words: people, safety and reparation.

Those three words have inspired us to create the roadmap that is fundamental to build a better Vale. Brumadinho is the driving force behind everything that we are doing to improve our company. Even during the pandemic, we maintained the critical reparation works and actions. So, with that I invite you to watch a video that shows some of the progress we have made so far.

Narration Video #1: We continue to work daily to repair and develop the city of Brumadinho and the region. The integral reparation plan comprises several environmental, social and infrastructure initiatives, some already in place and others underway. The following is a highlight of this continuous work.

To repair the environmental damage, our plan is to fully remove all tailings by 2023 and revegetate the entire area by 2025. Part of this area has already been recovered and part of the original course of the Ferro-Carvão stream was recreated. We installed a tailings containment system, which since 2019 has been preventing the flow of sediments into the Paraopeba river.

With all these actions, the team monitoring the Paraopeba basin has already seen improvements along the river. To meet the demands of producers who depend on the river for their activities, Vale will continue to supply drinking water until they can start collecting water from the river. We have finished building the Pará de Minas pipeline system, which will supply water to more than 100,000 people.

In the social and economic aspect, we developed initiatives to foster and diversify the local economy, reduce dependence on mining and help transform the local reality. We recently delivered a daycare center and a health center. Two other nurseries and a center dedicated for children with special needs are in an advanced stage of construction.

We remain committed to repairing the damage with transparency and speed. Everything we have learned since the B1 Dam breach has helped us advance an important cultural change towards a better Vale.

Mr. Eduardo Bartolomeo: As you can see, this video brings some important examples of our commitment to Brumadinho. With those actions, we have already disbursed US$ 2.6 billion. We already indemnified 8,300 people. In addition, we also designed a plan for the community of Brumadinho. This master plan was built on the community's perspective and has been very well appreciated by the local authorities.

And as you know, we're having encouraging conversations with the state of Minas Gerais and other stakeholders to get a framework agreement for collective damage and reparation. With that, we continue to pursue our goal to reach a stable agreement for this matter. But let me be very clear: regardless of any agreement, we'll continue to deliver on our commitment to the full reparation of Brumadinho, that is, to repair Brumadinho with quality, care and at a fast pace.

One of my first decisions as CEO, in 2019, was to add two new pillars to our strategy. Actually, they were two resets inside Vale and they have improved a lot during 2020. The first pillar was set to create the safety and operational

excellence mindset. It's about assuring dam safety and asset Integrity, it's about creating discipline towards operational excellence, it's about being obsessed about safety. And we are advancing well on it.

The second pillar is what we call the new pact with society. It means actively listening and working together with society so we can create a virtuous cycle that brings prosperity to everyone. One good example of this new pact was our great support to the Brazilian authorities in fighting Covid, leading the Brazilian corporate effort to join forces with the government in the battle.

2020 was an year about a better stability in our business, despite Covid, and on the effective delivery on our commitment to these new pillars. But important to our stability as well, our executive team is together, since July 19th, and truly committed to this agenda. Our actions within those two pillars, that you'll see throughout this first part of the presentation, are essential to the process of transforming Vale. Later Spinelli, Mark and Siani will come to talk about the other three pillars of our strategy.

With that in mind, we outlined a guide which we call one page, a narrative that will lead us toward this better Vale. It took a lot of effort from our team and we're sure that it will lead us to this goal. Let me guide you through this one page. It starts with its foundation, our values, that you can see at the bottom of the page and goes all the way up to our mission, which is to transform natural resources into prosperity and sustainable development.

Our values haven't changed. They remain the same. But in this quarter's transformation, we look deeply into our culture and we concluded that we needed to move from a culture of make it happen in any way to a culture of learning together. To give you an example, life matters most was already a value. But we wanted to create a chronic unease behavior around this value.

With the new culture fostering this new behavior, we could now lever it with our VPS, for example, to achieve higher levels of safety. VPS works as a lever because it's our management model that puts safety as a priority. With this interconnection occurring in a virtuous way, from bottom to top and top to bottom, we can achieve our ambitions, in this case, which is to become a benchmark in safety.

Besides that, we have the ambition to be a best in class reliable operator, a talent- driven organization, a leader in low-carbon mining, and a reference in creating and sharing values. So today we use those ambitions to lead you through our presentation on how we are building a better Vale.

Let's start by talking about becoming a benchmark in safety and a reliable operator, which are directly correlated to our pillar of safety and operational excellence and for that I would like to invite our Executive Officer Carlos Medeiros. Please, Carlos.

Mr. Carlos Medeiros: Thank you, Eduardo. Good morning to you all, good afternoon. As you're probably aware, Vale utilizes the three lines of defense model. The operation is the first line of defense, the organization I lead is the second line of defense and our internal auditors are the third line of defense.

As Eduardo mentioned, we have the ambition to become a benchmark in safety and I would like to share with you the important strides Vale is making in both occupational and process safety. The column on the left describes the organization's long-term safety targets. It comprises targets in high potential events reduction, reduction of human exposure to hazardous agents and a high- risk scenarios reduction. The graphs on the right illustrate our progress so far and as you can see we are on track to become a much safer company in the next years

Our process safety program starts with the HIRA, hazard investigation and risk assessment. A team of 12 multidisciplinary people visits our sites and, working side-by-side with a local management, identify the most critical process risks, as well as their respective controls. This activity follows a well-defined methodology, which has helped so far identify almost 600 critical risks and more than 6,000 critical controls. Monitoring the Integrity of these controls has become a part of our daily maintenance routine. By the end of 2020, more than 90% of our sites will have received the HIRA.

The combination of the occupational and process safety programs has proved to be truly transformational. The obvious consequence is that Vale has become a lot more proactive. It is starting to display a chronic unease, as Eduardo mentioned, for safety-related matters. The operations below were halted during 2020 for different reasons and I would like to highlight a few of them. VNC and Simões Filho, these are both refineries that have been permanently shut down, as they failed to comply with the HIRA requirements. Sossego's operation was temporarily paralyzed to allow the team to fix several issues related to assets integrity.

This one is a busy slide, so please let me walk you through it, starting at the top. Our tailings management system is being rebuilt to ensure the adoption of all known best practices to manage our tailings dams. Although it is still a work in progress, it is highly adherent with the global industry standard on tailings management. Vale will implement the global standard and is well-positioned to