3 Q1 1 Results 3 Q1 1 Results 1 Disclaimer sc a e This - - PDF document

3 Q1 1 Results 3 Q1 1 Results

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October 2 7 , 2 0 1 1

Disclaimer

“This presentation may include statements that present Vale's expectations about future events or results All statements when based upon expectations

sc a e

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 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 f f ff f f 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 ”

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Looking Statements and Risk Factors in Vale s annual report on Form 20-F.

Agenda g Continuing to create value Market fundamentals

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Continuing to create value

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An outstanding operational performance

QoQ 3Q11 YoY

All-time high production figures Iron ore 87.9 Mt1 Pellet 14 2 Mt2 +8 3% +4 3% +9.5% +6.4% Pellet 14.2 Mt2 Copper 84 300 t +34 3% +45 6% +8.3% +4.3% Copper 84,300 t Thermal coal 1.2 Mt 34.3% 45.6% +60.4% +20.0%

5 ¹ Includes 2.9 Mt of Vale’s attributable iron ore production from Samarco ² Includes 2.8 Mt of Vale’s attributable pellets production from Samarco

An outstanding financial performance

QoQ 3Q11 YoY

All-time high figures Operating revenues of US$ 16.7 billion +9.1% +15.5% Adjusted EBIT of US$ 8 4 billion +8 1% +6 9% Adjusted EBIT of US$ 8.4 billion +8.1% +6.9% Adjusted EBITDA of US$ 9 6 billion +6 2% +9 3% Adjusted EBITDA of US$ 9.6 billion 6.2% 9.3%

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Increase in sales volumes was the main driver for EBITDA performance p

US$ million

Adjusted EBITDA

1 111 77 (70) (77) (103) (376) Price variation Sales volume Dividends² Δ FX Costs & expenses ³ R&D¹ 1,111 77 (70) (77) (103) (376) 9,631 9,069 volume

2Q11 3Q11

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2Q11 3Q11

¹ This change relates to the accounting figure, differing from the financial disbursement used for Investments ² Dividends received from affiliated non-consolidated companies. ³ Costs excluding depreciation and amortization. Expenses include SG&A + other operating expenses.

Our cash generation continues to reach record- high levels allowing us to successfully deal with high levels, allowing us to successfully deal with the trilemma faced by growing companies

32.437 35.929 36.745

LTM Adjusted EBI TDA US$ billion

26.116 16.319 17.480 19.853 19.018 17.570 13 591 19.392 13.077 9.717 9.165 9.739 13.591

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

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Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q

Dividend distribution in 2011 will reach US$ 9.0 billion a record figure billion, a record figure

Dividends US$ billion

9.0 3 0 1.9 2.9 2.7 3.0 2007 2008 2009 2010 2011E

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Powerful cash flow supports a healthy balance sheet with a low-risk debt portfolio

Total debt Debt cost and m aturity

sheet with a low risk debt portfolio

2 50 2 42

Total debt/LTM EBITDA (x)¹

Total debt - US$ billion¹ Liquid asset s - US$ billion¹,² 1 00 1.49 2.20 2.50 2.42 1.76 1.30 1 00 5.8 6.0 10.5 11.0

Average cost of debt Average debt maturity

% Years

1.00 1.00 0.70 0.68 0.63

19 5 21.2 22.9 23.6 24.0 25.3 25.3 23.7 24.5 23.0 5.2 5.4 5.6 9.5 10.0

10.1 5.5

18.4 19.5 7 6 13.0 11.1 9.7 9.4 11.8 13.2 11.0 11.2 12.2 4.6 4.8 5.0 8.0 8.5 9.0

9.1 4.7

7.6 6.2

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4.0 4.2 4.4 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 7.0 7.5

10

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

¹ at end of quarter. ² cash and cash equivalent.

Investments¹ grew by 48.5% YoY in 9M11, despite the challenges in project implementation g p j p

9 M1 0 US$ 7 .6 1 4 billion 9 M1 1 US$ 1 1 .3 0 8 billion

Project s 67 4% Proj ect s 66 9% 67.4% 66.9% St ay-in- business 22 0% R&D 10.6% St ay-in- business 22 8% R&D 10.3%

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22.0% 22.8%

¹ Excluding M&A.

Continuing to create shareholder value: growth and high rates of return on invested capital and high rates of return on invested capital

35% 40% 180 200 25% 30%

• n

140 160 180

ROI C LTM 1

15% 20% US$ billio 80 100 120

I nvested capital US$ billion

5% 10% 20 40 60

US$ billion

0%

1Q06 3Q06 1Q07 3Q07 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 12 ¹ ROIC LTM = return on capital invested for the last twelve-month period.

Delivering our first African project: Moatize, a world-class asset

• Moatize I

world class asset

Total capacity: 11 Mtpy, 8.5 Mtpy metallurgical coal and 2.5 Mtpy of thermal coal. thermal coal. Moatize I, the first phase of the Moatize coal project, province of Tete, Mozambique started production in Mozambique, started production in 3Q11.

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Moatize main branded product Chipanga Prime HCC

Main parameters Main p CSN 9 CSR 69 CSR 69 Rank (Ro max) 1.32 Volatile matter 228 Ash (% ad) 10.5 ( ) Sulphur (% ad) 0.75 Phosphorus 0 085 Phosphorus 0.085 Vitrinite 80.8

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Max dilatation 118 Max fluidity 380 Mt

The Board of Directors approved the expansion

• f Moatize leveraging our rich coal resources in
• f Moatize, leveraging our rich coal resources in

Mozambique, and…

• Moatize II: mine

Additional 11 Mtpy of nominal production capacity, totaling 22 Mtpy for Moatize. Includes duplication of the coal handling and duplication of the coal handling and preparation plant (CHPP) and expansion of the infrastructure. Production is estimated to be composed of 70% HCC and 30% thermal coal. Capex: US$ 2 07 billion Capex: US$ 2.07 billion. Start up: expected for the second half of 2014.

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… creating an integrated coal operation with the Nacala corridor the Nacala corridor

• Nacala corridor: 912 km–long railway and maritime

g y terminal

Handling capacity: estimated at 18 Mtpy of coal. Capex: US$ 4.444 billion, US$ 3.435 billion for the railroad and US$ 1.009 billion for the maritime t i l terminal. Start up: expected for the second half of 2014. half of 2014.

16 ¹ Vale holds a 67% stake in Sociedade Desenvolvimento Corredor do Norte S.A. (SDCN), the company that controls each

• f the existing railways in Mozambique (CDN) and Malawi (CEAR)..

Enhancing the infrastructure: a new hydropower plant

• Karebbe

plant

Karebbe

Total capacity: 130MW The Karebbe hydropower plant in Sorowako Indonesia will support expansion plans and The Karebbe hydropower plant, in Sorowako, Indonesia, will support expansion plans and at the same time will have an important role in our efforts to curb the production costs of

• ur Indonesian nickel operations.

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Market fundamentals

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Global IP has recovered, driven by the US, Japan and China and supporting the demand for minerals and China and supporting the demand for minerals and metals

14 16

Global industrial production % 3mma, saar¹

10 12 14 6 8 10 2 4 6

• 2

2

19

2 Dec- 09 Apr- 10 Aug- 10 Dec- 10 Apr- 11 Aug- 11

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

The recovery of DM has been running at below- trend rates being a drag to global growth

GDP growth1

trend rates, being a drag to global growth

g %

4 6 6 2 4 2 4 6

• 4
• 2

3T07 2Q08 4Q08 2Q09 4Q09 2Q10 4Q10 2Q11

• 4
• 2 4Q07

2Q08 4Q08 2Q09 4Q09 2Q10 4Q10 2Q11

• 10
• 8
• 6

Zona do Euro

• 10
• 8
• 6

US A GDP th Average GDP growth

• 12
• 12

Average GDP growth 1997-2007: 3.1% 3Q09-2Q11: 2.6% Average GDP growth 1997-2007: 2.3% 3Q09-2Q11: 1.9%

20 ¹ Annualized rate, sazonally adjusted. Source: Haver Analytics

Given the fiscal adjustment underway and bank funding stress, the probability of a recession in

Euro Zone

g , p y the Euro Zone has increased

0.9 1 0 6 0.7 0.8 0.4 0.5 0.6 0 1 0.2 0.3 0.1

1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010

Recession probabilit y 21 Recession probabilit y Recession according the Euro area business cycle dating committee Sources: Vale and Euro area business cycle dating committee.

China’s growth is more moderate but steady

Chinese GDP grow th %

18 14 16 10 12 6 8

YoY

9.1% 8.0%

2 4

YoY QoQ¹

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

22 ¹ Seasonally adjusted annualized rate. Sources: Haver Analytics/CEIC and Vale.

No signs that the Chinese economy is heading towards a recession

40 35

I P and FAI grow th

FAI IP

30 35 25 30 20 25 % YoY 15 20 % YoY 10 15 10 15 5

Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11

5

Retail sales

23 y p y p Source: Haver Analytics/CEIC

In a sharp contrast to 2008, the Chinese property market is not in a recession now

Chinese property m arket Chinese property m arket

% YoY

150 200

Housing starts Sales

50 60 70

Floor space under construction

100 30 40 50 10 20 50

• 20
• 10

24 Source: Haver Analytics/CEIC and DEGC/DIRI

• 50

Sep-07 M ar-08 Sep-08 M ar-09 Sep-09 M ar-10 Sep-10 M ar-11 Sep-11

• 30

Sep-07 M ar-08 Sep-08 M ar-09 Sep-09 M ar-10 Sep-10 M ar-11 Sep-11

A collapse of the property market in China is unlikely unlikely

The social housing program is a key government priority The social housing program is a key government priority, providing a cushion to private sector. Social housing has the potential to support overall construction in the next 12-18 months. Authorities may ease monetary/credit policies in face of an inflation fall. In the case of a global downturn there is room to ease monetary and fiscal policy. p y While infrastructure projects were the focus of 2008 stimulus package social housing can be #1 priority in an eventual

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package, social housing can be #1 priority in an eventual attempt to boost growth in 2012.

Out of the 10 million units targeted for 2011, 98.6% were reported to start by September were reported to start by September

million units

5 8

2 4 6 8 10 12 14 16 18

2010

9.8 5.8

10

2010

10

2011

10

2012

16

2013-2015

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Construction started

Housing construction still has a high-growth potential, given the estimated deficit p , g

million units

Migrant families Urban Urban families “Full” houses

E

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Sources: Vale, NBS China and Gavekal.

Iron ore prices dropped under the influence of factors that are likely to be reversed in the y short-term

200

Platts I ODEX 6 2 % Fe US$/ dry metric ton

185

138.5

October 24, 2011

155 170 140 110 125

28

110

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

Source: Platts.

Nickel market fundamentals remain strong. Contrasting with 2008, nickel prices and inventories

Nickel prices

g , p are falling simultaneously

Inventories Prices

US$/ metric ton 2008

Prices Inventories

2011

28,500 31,000 33,500

80 90

Prices

29,000 31,000 140 150

21 000 23,500 26,000

metric ton 60 70 etric ton 23 000 25,000 27,000 metric ton 120 130 etric ton

16,000 18,500 21,000

US$ per m 50 60 000' me 19,000 21,000 23,000 US$ per m 100 110 000' me

8,500 11,000 13,500

30 40 15,000 17,000

J 11 A 11 J l 11 O t 11

80 90

29 Source: Bloomberg

,

Jan- 08 F eb- 08 M ar- 08 A pr- 08 M ay- 08 Jun- 08 Jul- 08 A ug- 08 Sep- 08 Oct- 08 N o v- 08 D ec- 08

Jan-11 Apr-11 Jul-11 Oct-11

Copper prices are following a similar pattern

Copper prices

I i P i

pp p US$/ metric ton 2008 2011

8,500 9,500 350 400

Inventories Prices

10,000 11,000 460 480 500 6,500 7,500 etric ton 300 ric ton 8,000 9,000 tric ton 420 440 460 c ton 4,500 5,500 US$ per me 200 250 000' metr 6,000 7,000 US$ per met 360 380 400 000' metric 2,500 3,500 100 150 4 000 5,000 300 320 340

30 Source: Bloomberg

Jan- 08 Feb- 08 Mar- 08 Apr- 08 May- 08 Jun- 08 Jul- 08 Aug- 08 Sep- 08 Oct- 08 Nov- 08 Dec- 08 4,000

Jan-11 Apr-11 Jul-11 Oct-11

300

Vale: um líder global

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