1 Q1 1 Results 1 Disclaimer This presentation may include - - PDF document

1

1 Q1 1 Results

May 6 , 2 0 1 1

2

“This presentation may include statements that present Vale's expectations about future events or results. All statements, when based upon expectations about the future and not on historical facts, involve various risks and

• uncertainties. Vale cannot guarantee that such statements will prove correct.

These risks and uncertainties include factors related to the following: (a) the countries where we operate, 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 (e) global competition in the markets in which Vale operates. To obtain further information on factors that may lead to results different from those forecast by Vale, please consult the reports Vale files with the U.S. Securities and Exchange Commission (SEC), the Brazilian Comissão de Valores Mobiliários (CVM), the French Autorité des Marchés Financiers (AMF), and The Stock Exchange of Hong Kong Limited, and in particular the factors discussed under “Forward- Looking Statements” and “Risk Factors” in Vale’s annual report on Form 20-F.”

Disclaimer

3

Agenda Another outstanding quarter Continued growth ahead

4

Another outstanding quarter

5

Iron ore +3.9 Pellets +26.5 Manganese +25.5 Ferroalloys +3.5

Despite very adverse weather conditions, a good operational performance

∆ production 1Q11/1Q10 in %

Nickel +79.7 Copper +107.9 Coal +0.2

6

An outstanding financial performance

1Q11

US$ billion

1Q10

US$ billion

Operating income 13.543 6.848 97.8 Adjusted EBIT¹ 6.456 2.062 213.1 Adjusted EBIT margin¹ 48.9% 31.2% +1,770 bps Adjusted EBITDA¹ 7.663 2.855 168.6 Net earnings 6.826 1.604 325.6

∆

%

1 figures excluding the gain from the sale of assets of US$ 1.513 billion, a non-recurring event.

The best first quarter ever

7

We have been dealing with seasonal and cyclical cost pressures

Δ US$ million¹

Seasonal

Main cost pressures 1Q11 vs. 4Q10

Source

Maintenance materials Fuel and gases Purchases of products Cyclical / political Cyclical 93 79 78

¹ Net of volume and FX impacts

8

9,176 (1,640) (379) (65) (41) 313 606 1,513 8,869

4 Q1 0

Price variation Sales volume R&D

US$ million

Adjusted EBITDA

Dividends² Δ FX

1 Q1 1

However, in addition to price increases, cost reduction was important to adjusted EBITDA performance

Cost and expenses¹

1 SG&A + COGS + other operating expenses

² Dividends received from affiliated non-consolidated companies

Gain on sale of assets

9 16.319 17.480 19.853 19.018 17.570 13.077 9.717 9.165 9.739 13.591 19.392 26.116 32.437

1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11

LTM Adjusted EBI TDA US$ billion

Cash generation is already well above the pre-crisis peak

10

18.4 19.5 21.2 22.9 23.6 24.0 25.3 25.3 23.7 13.0 11.1 6.2 9.7 9.4 11.8 11.0 11.2 12.2

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 Total debt - US$ billion¹ Liquid asset s - US$ billion 1.0 1.5 2.2 2.5 2.4 1.8 1.3 1.0 0.7

Total debt/LTM EBITDA (x)¹ ¹ at end of quarter. ² cash and cash equivalent.

Total debt

¹,²

4.5 4.7 4.9 5.1 5.3 5.5 5.7

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11

8.0 8.5 9.0 9.5 10.0 10.5

Average cost of debt Average debt maturity

Debt cost and m aturity

% Years 9.1 10.1 4.7 5.5

Powerful cash flow helps to keep a healthy balance sheet with a low-risk debt portfolio

11

Continued growth ahead

12

2 4 6 8 10 12 14 16 Jun- 09 Oct- 09 Feb- 10 Jun- 10 Oct- 10 Feb- 11

Global industrial production % 3mma, saar¹

¹ Seasonally adjusted annualized rate Source: Vale and J.P. Morgan

Global IP boomed since the end of 2010, adding strength to the global demand for minerals and metals

13

Global manufacturing PMI, sa¹ New orders/inventories ratio, sa¹

55 54 55 57 54.3 53.3 52.9 54.7 55.5 57.4 55.7

52 53 54 55 56 57 58 Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr-11 I ndex, sa

¹ Seasonally adjusted Sources: Vale and JP Morgan

• 1. 15
• 1. 1
• 1. 05
• 1. 01
• 1. 08
• 1. 07
• 1. 1

1.17

• 1. 2

1.13

• 1. 07

1 ,00 1 ,05 1 ,1 1 ,1 5 1 ,20 1 ,25 Jun-1 Aug-1 Oct-1 Dec-1 Feb-1 1 Apr-1 1 Rat io, sa

Given the change in the inventory cycle, global IP growth is expected to moderate

14 ¹ Saar

Chinese GDP growth %

2 4 6 8 10 12 14 16 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11

YoY QoQ¹

China remains on the fast growth path driven by domestic demand

Source: CEIC

15

2 0 2 1 2 2 2 3 2 4 2 5 2 6 2 7 2 8 2 9 3 0

Jan- 1 0 Mar- 1 0 May- 1 0 Jul- 1 0 Sep- 1 0 Nov- 1 0 Jan- 1 1 Mar- 1 1

% YoY 6 8 1 0 1 2 1 4 1 6 1 8 2 0 % 3m m a,saar1

FAI and IP growth

¹ Seasonally adjusted annualized rate Source: Haver Analytics

Both fixed asset investment and industrial production are showing signs of reacceleration in China

FAI I P

16

Average annual GDP growth of 7%. Housing: 36 million units of social housing. Reduction of 16% in energy consumption per unit

• f GDP.

17% less carbon emissions per unit of GDP. Proportion of urban residents to reach 51.5% vs 47.5% at the end of 2010. Creation of 45 million urban jobs. China’s 12th FYP 2011-2015 – priorities are supportive of the demand for Vale’s iron ore

17

5.8 10.0

2 4 6 8 10 12

2010 2011

Targeted affordable housing starts in China

million units 72.4%

18

Global 1

1 monthly data, on a seasonally adjusted basis.

Sources: Vale and World Steel.

Global carbon steel output is running at 1.5 billion metric tons per year, expanding by 7.6% over

• 4Q10. Although China is the main growth driver

with 50%, expansion has broadened.

3-month moving average

80 85 90 95 100 105 110 115 120 125 130 Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Million metric tons

35 40 45 50 55 60 65 M a r

• 7

S e p

• 7

M a r

• 8

S e p

• 8

M a r

• 9

S e p

• 9

M a r

• 1

S e p

• 1

M a r

• 1

1 Million metric tons

China 1

19

110 125 140 155 170 185 200

Apr- 1 0 Jun- 1 0 Aug- 1 0 Oct- 1 0 Dec- 1 0 Feb- 1 1 Apr- 1 1

Platts IODEX 62% Fe US$/dry metric ton

Source: Platts.

1 8 3

May 3, 2011

Iron ore prices continue to hover around a high level in face of strong global demand growth and supply constraints

20

1 seasonally adjusted.

Global stainless steel output

1

4,000 5,000 6,000 7,000 8,000 9,000 1 Q 2 8 2 Q 2 8 3 Q 2 8 4 Q 2 8 1 Q 2 9 2 Q 2 9 3 Q 2 9 4 Q 2 9 1 Q 2 1 2 Q 2 1 3 Q 2 1 4 Q 2 1 1 Q 2 1 1 '000 m etric tons

• 30%
• 20%
• 10%

0% 10% 20% 30% 40% QoQ

Global SS production reached an all-time high at 8.6 Mt in 1Q11. Fast expansion in consumption expenditures in EM countries will drive long-term demand growth

SA quarterly rate of change.

21 Source: Bloomberg

15.000 17.000 19.000 21.000 23.000 25.000 27.000 29.000

Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11

US$ per m etric ton 100 110 120 130 140 150 160 170 000' m etric ton

Inventories Prices

Nickel prices US$/ metric ton

Despite the expansion of NPI/FeNi production, the nickel market remains tight due to the broad based global demand growth

22

According to analyst estimates, Vale has the highest growth potential among large mining companies

Copper equivalent volume growth (C2010-20, rebased)

Source: J.P. Morgan

Peer1 Peer2 Peer3 Peer4

Vale Vale

23

Brow nfield Greenfield

2012

From 2011 to 2015, 34 additional major projects will be delivered, contributing to shareholder value creation

2011 2013 2015

Conceição Itabiritos Carajás 40 Mtpy Teluk Rubiah Salobo Tubarão VIII Karebbe Long-Harbour Serra Sul (S11D) Rio Colorado Moatize Totten Simandou I Biodiesel Konkola North Vargem Grande Itabiritos Salobo II ALPA CSP CSU Iron ore & pellets Nickel Coal Copper Fertilizers Logistics Energy Steel

2014

Serra Leste Bayovar II CLN 150 Mtpy Cauê Itabiritos Moatize II Conceição Itabiritos II CLN S11D Ellensfield Apolo Nacala Cristalino Salitre Simandou II Belo Monte Samarco IV

24 1Q06 3Q06 1Q07 3Q07 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11

US$ billion 20 40 60 80 100 120 140 160 180 200

Discipline in capital allocation: return on invested capital has returned to the pre-crisis level and it is far above the cost of capital

0% 5% 10% 15% 20% 25% 30% 35% 40%

1 ROIC LTM = return on invested capital for last twelve-month periods.

ROI C LTM 1 I nvested capital US$ billion

25

Estreito hydro power plant => delivered Vale Brasil, first Valemax 400,000 dwt => delivered

Strengthening infrastructure

26

Tres Valles copper Onça Puma nickel Oman pellets

Ramping up production

27

Global leadership in iron ore pellets: capacity to reach 80.0 million metric tons by 2014¹

São Luís Zhuhai Oman 2 plants Tubarão 7 plants Samarco 3 plants Vargem Grande Fábrica Anyang

Tubarão VIII Samarco IV

To come on stream ¹ 61.8 Mt from wholly-owned and leased plants and 18.2 Mt from affiliated companies (attributable share).

19 pellet plants around the world

28

Adds an average of 400 MW to Vale’s own generation capacity. Narrows the expected increasing disequilibrium between Vale’s power consumption and generation capacity in Brazil. Reduces the cost of energy¹ as cost of self generation is well below market prices. Mitigates risk exposure to price and supply risks. Expected rate of return higher than our cost of capital. Acquisition of 9% of the Belo Monte hydropower plant project

¹ cost with electric energy in 2010 was US$ 1.2 billion.

29

Vale: a global leader