Pow ering a new grow th cycle Disclaim er This presentation may - - PDF document

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Pow ering a new grow th cycle

Santander 1 5 th Annual Latam Conference January, 2 0 1 1

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“This presentation may include declarations about Vale's expectations regarding future events or results. All declarations based upon future expectations, rather than historical facts, are subject to various risks and

• uncertainties. Vale cannot guarantee that such declarations will prove to be
• correct. These risks and uncertainties include factors related to the following:

(a) the countries where Vale operates, mainly Brazil and Canada; (b) the global economy; (c) capital markets; (d) the mining and metals businesses and their dependence upon global industrial production, which is cyclical by nature; and (e) the high degree of global competition in the markets in which Vale

• perates. To obtain further information on factors that may give rise to results

different from those forecast by Vale, please consult the reports filed with the Brazilian Comissão de Valores Mobiliários (CVM), the French Autorité des Marchés Financiers (AMF), and with the U.S. Securities and Exchange Commission (SEC), including Vale’s most recent Annual Report on Form 20F and its reports on Form 6K.”

Disclaim er

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Agenda

The profile of a global leader A promising outlook Fostering growth

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The profile of a global leader

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Vale is one of the largest companies in the world

2002 2003 2004 2005 2006 2007

November 30, 2010

Vale position in the FT 500 ranking¹

¹ Ranking of the 500 largest companies in the world by market cap – Financial Times, position on 31 March of each year

500 400 300 200 100 1

1 8

7 4

1 1 7

1 5 3

2 7 5

3 3 4 4 4 6

2 5 4 2

2008 2009

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Vale in 2010

Vale is a global company, with offices and operations in all continents…

7 Coal I ron ore & pellets Nickel, cobalt & PGMs Bauxite, alum ina & alum inum Copper Potash & phosphates Manganese & ferroalloys Logistics

Brazil 54% Nort h America 25% Asia 10% Aust ralasia 10% Ot her 1%

... and a global base of world-class assets

Asset base by geography Asset portfolio

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Vale is the second largest metals and mining company in the world

BHPB RIO TINTO ANGLO AMERICAN BARRICK GOLD NORILSK NICKEL SOUTHERN COPPER TECK RESOURCES XSTRATA FREEPORT VALE

20 40 60 80 100 120 140 160 180 200 220 240 260

Market capitalization as of December 23, 2010 in US$ billion

US$ 1 7 5 .8 billion

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Vale 39.0% 27.7% BHP Billiton 27.2% 23.5% Rio Tinto 20.5% 15.9% Anglo American 15.7% 7.9% Xstrata² n.a. 12.6% TSR

last 10 years¹ last 5 years¹

Nov/2000-Nov/2010 Nov/2005-Nov/2010

¹ In US$ ² Incorporated in March/2002 Source: Bloomberg

Vale is the unrivaled leader in shareholder value creation among large diversified miners. Each US$ 100,000 invested in Vale shares ten years ago has grown into US$ 1.5 million in 2010

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Vale has more than 500,000 shareholders distributed throughout the world

São Paulo New York Paris Hong Kong

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439 2,720 3,525 16,018 Anglo American Rio Tinto BHPB Vale 94.4 134.6 227.5 BHPB Rio Tinto Vale

Global leadership in iron ore: Vale is the largest iron ore producer based on the world’s best and largest reserves

I ron ore production¹

million metric tons

1 Production in the first nine months of 2010.

² Proven and probable reserves in 2009 Source: Vale and Companies

I ron ore reserves²

million metric tons

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2.6 2.8 2.9 4.6 6.4 7.9 Eramet BHP Billiton Xstrata Jinchuan Norilsk Nickel Vale

Global leadership in nickel: Vale has the largest nickel reserves

Nickel reserves¹

million metric tons of contained nickel

¹ Proven and probable reserves in 2009, except Norilsk Nickel (2007) Source: Vale and companies

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Norilsk 20.6% BHP 8.7% Xstrata 7.8% Jinchuan 7.6% Other 37.9% Vale 17.4%

Share of world finished nickel production - 2008

Vale is one of the world’s leading nickel producers

Source: CRU Quarterly Q2 2009

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Strong cash generation and net earnings

EBI TDA

in US$ billion

Net earnings

7.260 11.825 5.349 13.218 12.866 2006 2007 2008 2009 2010 LTM¹ 11.451 15.774 19.018 9.165 19.392 2006 2007 2008 2009 2010 LTM¹

¹ Last twelve-month period ended in September 30, 2010.

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The best ever financial performance: a record-breaking quarter

Revenues 14.5 46.0% 110.3% Operational income 7.8 69.2% 241.7% Operational margin 55.6% +770 bps +2,140 bps Net earnings 6.0 63.0% 260.0% Adjusted EBITDA 8.8 58.1% 192.5%

QoQ 3Q10

US$ billion

YoY Records

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A prom ising outlook

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• 35
• 30
• 25
• 20
• 15
• 10
• 5

5 10 15 20 Jun- 08 Oct- 08 Feb- 09 Jun- 09 Oct- 09 Feb- 10 Jun- 10 Oct- 10

Global industrial production % 3mma, saar¹

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

Global IP growth has decelerated

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However, the history of business cycles shows that strong recoveries are followed by deceleration towards moderation

1 Recovery from Mar/2010 to Oct/2010, annualized rate.

Sources: Vale, BEA and NBER

I P: global recessions and recoveries 3.0% 6.7%

• 8.2%

Average: 3.8%1 11.0%

• 16.5%

Mar/2009 2.6% 3.7%

• 5.5%

Nov/2001 5.8% 2.0%

• 2.1%

Mar/1998 4.6% 9.7%

• 5.9%

Dec/1982

• 3.7%

3.3%

• 5.0%

Jul/1980 5.8% 11.0%

• 14.0%

May/1975 Δ 2nd year Δ 1st year Δ peak to trough

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Global IP is already issuing signals

• f a trend reversal

Global PMI , sa¹ New orders/ I nventories ratio, sa¹

56,1 55,4 56,8 57,8 57,0 55,0 54,3 53,7 52,5 53,7 53,9

52 53 54 55 56 57 58 jan/10 mar/10 mai/10 jul/10 set/10 nov /10 Index, sa

¹ Seasonally adjusted Sources: Vale and JP Morgan

1 ,24 1 ,1 7 1 ,1 5 1 ,23 1 ,20 1 ,1 5 1 ,1 1 ,05 1 ,01 1 ,04 1 ,06

1,00 1,05 1,10 1,15 1,20 1,25 1,30 jan/10 mar/10 mai/10 jul/10 set/10 nov /10 Ratio, sa

20 ¹ Saar

Chinese GDP grow th¹ %

6.0 1.0 7.8 14.7 11.6 11.8 10.0 8.0 8.5

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

China’s GDP growth is likely to have bottomed last quarter. We expect growth to reaccelerate driven by domestic demand

Source: CEIC and Vale estimates

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Global accommodative monetary policy. Fast growing consumption expenditures in emerging economies. Recovery of corporate investment. We expect global industrial production to reaccelerate in 1H11

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40 60 80 100 120 140 160 180 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10

¹ Platts Iron Ore Index, 62% Fe content Fonte: Platts

172.0

The iron ore market remains tight and quality has become the key factor in global competitiveness, as reflected by the behavior of premia

Platts I ODEX¹ US$/ metric ton

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Use of Vale high quality iron ores:

• Maximizes energy efficiency, leading to less coke

consumption per ton of steel.

• Cuts CO2 emissions.
• Increase productivity of blast furnaces.
• Positive effects are magnified by the combination of

Vale's iron ore and pellets.

Addressing Chinese concerns with high energy intensity and carbon emissions: Vale green ores

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Nickel prices have been resilient to supply growth given a strong demand and the effects of QE2

Source: Bloomberg

110 120 130 140 150 160 170 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 000' m etric tons 16,000 18,000 20,000 22,000 24,000 26,000 28,000 US$ / m etric tons

Inventories Nickel prices

August 27, 2010

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200 400 600 800 1,000 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 100 200 300 400 500 600

Monthly average prices US$/ metric ton

¹ Fob Vancouver ² Fob Tampa Source: Vale and Fertilizer Week

As destocking is ending, prices of fertilizers are beginning to reverse the downward trend

Potash¹ DAP²

26 7 8 9 10 11 12 13 14 Apr- 09 Jun- 09 Aug- 09 Oct- 09 Dec- 09 Feb- 10 Apr- 10 Jun- 10 Aug- 10 Oct- 10 Dec- 10

3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 Apr- 09 Jun- 09 Aug- 09 Oct- 09 Dec- 09 Feb- 10 Apr- 10 Jun- 10 Aug- 10 Oct- 10 Dec- 10

Source: Bloomberg

Grain prices have increased sharply, raising profitability and stimulating the recovery in fertilizer demand

Corn US$/ bushel Soybeans US$/ bushel

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• 4
• 3
• 2
• 1

1 2 3 4 5 6 7 8 9 1970 1975 1980 1985 1990 1995 2000 2005 2010E 2015E

Developed Econom ies Em erging Econom ies

Sources: Vale and IMF

Real GDP grow th % annual Convergence

Emerging economies will continue to be the key engine of global growth, with positive implications for the demand of minerals, metals and fertilizers

Convergence

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Real income growth and structural changes are responsible for the key role played by emerging economies in the consumption of minerals, metals and fertilizers

5 10 15 20 25 30 35 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Emerging Economies Developed Economies

Steel consumption intensity

kilos / US$ 1,000 of real GDP

Source: World Steel Association, WBMS, IMF and Vale

20% 30% 40% 50% 60% 70% 80% 90% 1997 1999 2001 2003 2005 2007 2009

Iron Ore Fertilizers Nickel Copper

Share of emerging economies in global consumption of metals and fertilizers

29 10 20 30 40 50 60 70 80 90 100 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020

Brazil Korea China I ndia

Urbanization rate

%

Source: UN Department of Economic and Social Affairs, “World Urbanization Prospects: the 2009 revision”.

China’s urbanization rate in 2010 is equal to Brazil’s position in the mid 50’s and Korea in the early 70’s

10 20 30 40 50 60 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020

China W orld

Urbanization rate

%

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In spite of the substantial expansion, there is still room for large flows of infrastructure spending in China 2005 2009 2020F Expressways (km) 41,000 65,000 100,000 Railways (km) 75,437 86,000 120,000 Airports (number) 140 166 244 Power generation (GW) N.A. 800 1,500

F = Target Sources: NBS, NDRC, CAAC and Ministry of Transport of China

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China’s car industry is already bigger than the US industry. However, the penetration is still low, indicating a huge growth potential

Passenger cars per 1,000 people 2007

Sources: World Bank and CEIC

3 6 1 3 2 1 5 8 1 6 7 2 0 5 2 4 8 3 2 5 4 5 1 4 8 7 World Brazil Mexico Russia Korea Japan United States European Union

China 2008

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India is expected to contribute to additional market tightness

Still a rural country, with an urbanization rate of 30%. Industry is still to small, only 21% of GDP. Government intends to double infrastructure investments to US$ 1 trillion in 2012-2017. Exports of iron ore have been slowing, reducing continuously their share in Chinese imports since 2005. Exports of iron ore falling this year, by 8.4 % in 9M10.

33 5 10 15 20 25 30 35 40 45 50

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Developed economies Emerging economies

Differently from steel and copper, nickel intensity of EM is still converging to the level

• f advanced economies, indicating a high

growth potential

Nickel consumption intensity

kilos / US$ million of real GDP

Source: WBMS, IMF and Vale

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Brazil has a large growth potential in the consumption of fertilizers

World agricultural powerhouse. Consumption of fertilizers grew by 6% p.a. from 1990 to 2008. 2nd largest importer of potash and phosphates nutrients. Availability of water and arable land. Soil poor in nutrients, requiring relative high nutrients/ha ratios. Brazil’s agricultural output is predicted to grow by 40% during this decade¹.

¹ Source: OECD-FAO Agricultural Outlook 2010-2019.

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Fostering grow th

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

1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 US$ billion 20 40 60 80 100 120 140 160 180 200

Vale has been delivering returns on invested capital far above the cost of capital: ROIC averaged 27.7% over the last five years

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

ROI C LTM 1 I nvested capital US$ billion

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2003 2004 2005 2006 2007 2008 2009 2010 2003 2004 2005 2006 2007 2008 2009 2010

Alunorte 3 Carajás 70 Mtpy Sossego Candonga Aimorés Alunorte 4&5 Trombetas Capão Xavier Pier III PDM Mo I Rana Fábrica Nova Taquari- Vassouras Brucutu Carajás 85 Mtpy Capim Branco II Paragominas I Carajás 100 Mtpy Dalian Samarco III Fazendão Paragominas II Alunorte 6&7 Capim Branco I Zhuhai

Excellence in project execution: 36 major projects delivered since 2003

UHC Vargem Grande Northern Corridor Southeastern Corridor Carborough Downs Additional 20 Mtpy CSA Bayóvar Oman Onça Puma Tres Valles VNC

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Project s 73.0% Support of exist ing

• perat ions

18.7% R&D 8.3%

2 0 1 1 By category

Fert ilizers 10.4% Power generat ion 3.3% Ot hers 5.3% Base met als 18.0% Ferrous minerals 35.5% Logist ics 20.9% Coal 6.6%

Consistently with our long-term view and discipline in capital allocation we plan to invest US$ 24.0 billion in 2011

2 0 1 1 By business area

Organic growth 81.3% Bulk materials 42.1%

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Brow nfield Greenfield

2012

From the end of 2011 to 2015 32 projects will be delivered, contributing to significant shareholder value creation

2011 2013 2015

Conceição Itabiritos Carajás 30 Mtpy Teluk Rubiah Salobo Tubarão VIII Estreito Karebbe Long-Harbour Serra Sul (S11D) Rio Colorado Moatize Totten Simandou Biofuels 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

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Aggregate production growth¹

¹ Index encompassing the production of all Vale's product, base 2003=100

New world-class asset will drive production growth at high levels

50 100 150 200 250 300 350 400 2010E 2011E 2012E 2013E 2014E 2015E

Equivalent iron ore production unit basis

CAGR 2011E-2015E: 16.3%

Brownfield projects Greenfield projects

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Iron ore million metric tons

293 31 1 522 2008 201 1 E 201 5E 34 49 73 2008 201 1 E 201 5E 283 295 381 2008 201 1 E 201 5E 31 3 332 691 2008 201 1 E 201 5E 607 760 3,400 2008 201 1 E 201 5E 7,600 1 2,700 2008 201 1 E 201 5E 4,094 1 1 ,600 42,000 2008 201 1 E 201 5E

Pellets million metric tons

¹ Not including production from

• Samarco. Part of the iron ore

production is dedicated to produce pellet. ² Not including production from Samarco, Hspanobras and from Zhuhai.

Nickel 000’ metric tons Coal million metric tons Copper 000’ metric tons Potash 000’ metric tons Phosphate rock 000’ metric tons

Estimated output by product

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Vale: a global leader