VIII Analyst & Investor Tour 2008 June 19, 2008 1 Jos Carlos - - PowerPoint PPT Presentation

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VIII Analyst & Investor Tour 2008

June 19, 2008

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Iron ore operations & projects

Carajás June 19, 2008

José Carlos Soares Director of the Northern System

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Southern System (2008): Iron ore production: 95 Mt/y Pelletizing plants: 6.7 Mt/y Southeastern System (2008): Iron ore production: 126,3 Mt/y Pelletizing plants: 29.1 Mt/y

Iron ore production systems 2008

Urucum Urucum Northern System (2008): Iron ore production: 103 Mt/y São Luís pelletizing plant: 7 Mt/y

324 million metric tons of iron ore 43 million metric tons of pellets

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Northern System (2008): Iron ore production: 103 Mt/y São Luís Pelletizing plant: 7 Mt/y

Northern System

Urucum Urucum

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Southern Range Northern Range Eastern Range

Iron Ore Formation

Key:

Northern System - Carajás overview

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Run of mine %

Carajás iron ore mines

Fe P SiO2 Al2O3 Mn LOI 2007 66.00 0.040 1.30 1.25 0.60 1.90

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Production capacity (Mt/y)

NN

CAGR 2002/2008 = 9.7%

Northern System

History & IO production evolution

103,0 08F 0,9 13,5 23,5 29,8 31,8 32,8 32,6 32,8 35,2 39,3 40,8 43,8 45,8 44,0 47,7 52,4 53,9 58,9 69,4 72,5 81,8 91,7 43,2 10 20 30 40 50 60 70 80 90 100 110 67 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

Mt

Pier 03 Start up Carajás Discovery Carajás Start up 15 Mtpy Pier 01 Start up Pier 02 Start up Pelletizing Plant Start up 25 35 45 52 56 70 85 100

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General information: Length: 892 km; single track Crossing yards: 56 Bridges and overpasses: 62 Train type (2007): 3 locomotives and 210 railcars Net cargo: 21,600 (sinter) Railcars total: 8,298 Locomotives fleet: 160 Cycle duration: 78 hours

Northern System

EFC - Carajás Railway

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PIER III

Northern System

Ponta da Madeira Maritime Terminal

PIER I PIER II

Ships up to 250,000 dwt Maximum draft: 21m Loading rate: 3 X 8,000 t/h

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Current capacity : 7.0Mtpy

São Luís pelletizing plant

Northern System

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10,094 443 2,478 653 2,427 760

20 40 60 80 100 120 2008 2009 2010 2011 2012 2013

Northern System Southern System Southeastern System

Serra Sul Additional 30Mtpy Bau CE Itabiritos Auxiliary Equipment 400 400 VGR 1/1 VGR 1/2

• S. Leste

Mtons US$ 500 M

Iron ore project pipeline

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Production capacity increase to 422Mtpy in 2012 from 146Mtpy in 2000

Master plan: 2000-2012

Integrated systems production evolution

50 100 150 200 250 300 350 400 450 500 Mt New Projects 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 5.0 24.2 56.2 73.8 130.8 Current Mines 145.8 168.1 174.2 189.1 212.0 235.0 265.5 296.0 318.9 317.4 315.0 305.7 291.5 2000 2001 2002 2003 2004 2005 2006 2007 2008' 2009' 2010' 2011' 2012' 422.3 379.5 371.2 341.5 323.9 296.0 265.5 235.0 212.0 189.1 174.2 168.1 145.8

Serra Sul

* Forecast

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324 Mt of iron ore; 43Mt of pellets 23 mines in operation; railway network of 2,000 km plus;

4 shipping terminals;

9 pelletizing plants. 2008 2008 422 Mt of Iron ore; 65Mt of pellets 26 mines in operation;

railway network of 2,000 km

plus;

5 shipping terminals;

12 pelletizing plants; 2012 2012 also operating abroad.

Summary of Vale’s iron ore

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• Vale: world leader in the iron ore market:

#1 in iron ore and pellets; 33% share in seaborne market; highest quality standards; huge mineral reserves.

• Vale is planning huge investments in iron ore

production never seen before in the mining industry, in order to meet the growing demand for raw materials from the steel industry

• Environmental protection is a major concern.

Final comments

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• Air and water quality monitoring;
• Support for protection of environmental conservation units;
• Climatology;
• Waste management;
• Environmental education;
• Support to indigenous communities.

Environmental policy

• Investments in environmental protection:

2006: US$ 145 Million 2007: US$ 190 Million

• Provision of US$ 171 Million for future mining depletion and

construction of tailing dams.

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Additional 30 Mtpy

89% 11%

SF PF

Description:

• Construction of a crushing facility

and a wet screening facility at Northern Range which would be able to supplement the Northern System production capacity in 30 Mtpy. Resources: – Resources: N4WN: 562,7Mt – Drilling Campaign: expected to finish in Dec/07. Production Capacity: 30 Mtpy after 2009 Start up: 2009 Location Production composition:

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Southern Range project

Description: – This project aims to attend the Northern System demand after 2012 with an additional production of 90 Mtpy. Resources: Production capacity (Mt): – 2012: 40.0 Mtpy. (ramp-up) – After 2012: 90 Mtpy Start up: 2012 Production composition:

SF PF 68% 32%

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Carajas iron ore deposits

Southern Range project

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Starting production capacity: 40Mt/y Operation start-up: 2012 Distance from Northern Range: 80 km

Southern Range project

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The Onça Puma nickel project

Carajás June 19, 2008

João Coral Director of Mineração Onça Puma

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SUSTAINABLE DEVELOPMENT PROJECT IMPLEMENTATION PRE OPERATIONAL ACTIVITIES PICTURES GENERAL INFORMATION

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Location

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2002 2003 2005 2004 2006 2007 2008 Phases

Feasibility study Basic engineering Scoping study

2009

Basic eng review

Implementation

Vale acquisition Approval by Boad of Directors

Start Up Line 1 Start up Line 2 Comissioning

Feb May

Onça Puma history

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Project sumary

Mine life: 36 years Grade for first 20 years: 2.4% - 1.6% Ni / 1.73 Ni (average) Process route: RKEF – Rotary Kiln Electric Furnace Production: Design capacity: 220.000t FeNi @ 25% – 57.000tpy Estimated CAPEX: US$ 2.297 billion Proven & probable reserves : 82.7Mt @ 1.73% Ni (saprolitic ore)

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2009 estimated production: 17.5 kt Nickel content 2012 nominal capacity: 57.0 kt Nickel content Product transportation: Road to Parauapebas – 350 km Railroad to São Luis – 890 Km Headcount: 1200 team + 400 from contractors Cash cost: US$ 3.35 / lb Ni

Operational sumary

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SUSTAINABLE DEVELOPMENT PROJECT IMPLEMENTATION PRE OPERATIONAL ACTIVITIES PICTURES GENERAL INFORMATION

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1200 employees and 400 contractors

• Great Investments in recruitment and labor qualification

– Construction of Training Center at Ourilândia do Norte (PA).

• Attraction and Retention Program considered

Operational manpower

2 years: 50% local manpower Next years: 70% local manpower Teachers: 100 Students: 500 until 2008 Initial: 120 trainees and 40 operators Partnership with class entities for education development

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Social relationship

Onça Puma Project Farmers Associations Municipalities Aboriginals (Xikrins e Kaiapós) Churches Government Institutions (INCRA/SEMA/SRF

• ther)

MST and Sem Teto

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Social investments

More than R$ 100 million were committed with social institutions to be applied on social investments for the community until 2009. EDUCATION

• Students House
• Upgrade and Construction of Schools
• Construction of Training Center

HEALTH & SANITATION

• Water & Sewage Treatment in the town
• Construction of a new waste disposal

ECONOMIC AND URBAN DEVELOPMENT

• Construction of roads and bridges
• Upgrade the local airport
• Training of local Suppliers

SAFETY & SOCIAL ASSISTANCE

• Agreements with the police authorities and local traffic department
• Understanding campaigns on traffic laws

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Project environment

CONCEPTS 1 PROGRAMS

• 100% rain water used for
• peration, to avoid reduce

level of Catete River that suppliers Xicrin Indian Reserve. dam or water reservoir

CONCEPTS 2

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Project environment

• Benchmark developments to dust emissions control system

provided to attend Brazilian and International standards:

• Brazilian regulatory limit for dust emission: 100 mg / Nm3
• Industry average: 25 up to 75 mg / Nm3
• Onça Puma project factor used: 50 mg / Nm3

CONCEPTS 1 PROGRAMS CONCEPTS 2

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Project environment

• Land rehabilitation
• Solid waste control
• Water resources
• Atmospheric emissions& quality of air
• Archeology
• Environmental education
• Fauna and plant control

CONCEPTS 1 PROGRAMS CONCEPTS 2

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SUSTAINABLE DEVELOPMENT PROJECT IMPLEMENTATION PRE OPERATIONAL ACTIVITIES PICTURES GENERAL INFORMATION

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Physical progress implementation

66,64%

0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10%

a g

• /

6 s e t / 6

• u

t / 6 n

• v

/ 6 d e z / 6 j a n / 7 f e v / 7 m a r / 7 a b r / 7 m a i / 7 j u n / 7 j u l / 7 a g

• /

7 s e t / 7

• u

t / 7 n

• v

/ 7 d e z / 7 j a n / 8 f e v / 8 m a r / 8 a b r / 8 m a i / 8 j u n / 8 j u l / 8 a g

• /

8 s e t / 8

• u

t / 8 n

• v

/ 8 d e z / 8 j a n / 9 f e v / 9 m a r / 9 a b r / 9 m a i / 9 Mês % Mensal

0% 13% 25% 38% 50% 63% 75% 88% 100%

% Acumulado

%BL. %BL (2007) %BL (2008) %repr. % real %BL acum. %BL acum (2007) %BL acum (2008) %Repr.acum. %Real acum.

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Global suppliers involved

• PROJECT COMPANY:

HATCH AND PROGEM

• STACKING AND RECLAIMING:

FAM / DEDINI

• DRYERS, KILNS AND ESPs:

FLSMITH

• ELECTRIC FURNACE:

DEMAG

• REFINERY:

INTECO

• SHOTTING:

UDDEHOLM

• TRANSFORMERS:

AREVA

• ELETRIC AND AUTOMATION:

ABB

• TRANSMISSION LINE

ALUSA

• MINE FLEET:

CAT AND SCANIA

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Health and safety

The Onça Puma Project has been obtaining the excellent results in health and safety among the operational / implementation units of VALE. The Onça Puma Project reached important challenges as 4.5 million of hours worked without accidents with waste of time. Main strategies and new actions in implementation for Health and Safety:

• Elaboration of Health and Safety diagnosis;
• To revalue implementation of contracted administration system

improvements;

• To revalue accidents / incidents services;

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SUSTAINABLE DEVELOPMENT PROJECT IMPLEMENTATION PRE OPERATIONAL ACTIVITIES PICTURES GENERAL INFORMATION

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Process flowsheet

REDUCTANT COAL PULVERIZED COAL ORE PROCESSING METAL PROCESSING FINES ELECTRIC FURNACE REFINING SHOTTING DRYER DELIVERY STACKER SLAG POT

METAL

STORAGE ROM

• 600mm

PRIMARY CRUSHER RECLAIMER BAGHOUSE ESP LADDLE FURNACE TRUCK KILN & DRYER FINES ESP SECONDARY CRUSHER COAL PREPARATION CRUSHER MILL BAGHOUSE ROTARY KILN EXTRUDER

• 200mm
• 50mm
• 50mm

+50mm

• 50mm
• 12,5mm

+6,35mm

• 6,35mm

BAGHOUSE DRY ORE STOCKPILE

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Pre operational activities

Pre-operational group – GPO was implemented to: – To structure operational units; – To develop technical and administrative activities; – To warrant the units start-up, with the minimum possible level of problems; – Levering the ramp-up and nickel production curves.

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Main GPO’s proposal

• Structure operational units during the project phase
• Dimension, mobilize and train all the unit’s employees
• Participate of the project and assembling processes in an operational

and maintenance perspective

• Coordinate commissioning owner’s team process
• Implement a quality program in the operational units
• Implement the products and consumables logistics facilities
• Standardize equipment and processes among projects
• Develop integration and synergy among MOP and Vale Inco

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Main GPO’s implementations / benefits

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Operational areas involved

• Geology & long term planning
• Mine operation
• Metallurgy operation
• Production planning & quality control
• Mobile equipment maintenance
• Plant maintenance
• Maintenance engineering
• Commissioning
• Products and consumables logistics
• Commercial

APROACHES USED GPO Support to

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Personnel comparative productivity

Cast ore per number of employees comparative:

Ore throughput / Total workforce (*1000)

1,58 1,54 1,33 0,70 0,66

0,0 0,2 0,4 0,6 0,8 1,0 1,2 1,4 1,6 1,8 Onça Puma Cerro Matoso Loma de Níquel PT INCO CODEMIN

Data: Brookhunt – jan/2008

BETTER

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VALE infrastructure for businesses directionality; Process technologies development; Benchmark support for the specific activities executions, as for instance: financial operations, supplies, IT, commercial, institutional relationships, etc; High technical capacity / management team for the projects implementation, committed with the company’s development; Good relationship and interaction with the communities of the project influence areas; Development formation programs for local labors; VALE’s strategy market positioning in the world;

Project strengths

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SUSTAINABLE DEVELOPMENT PROJECT IMPLEMENTATION PRE OPERATIONAL ACTIVITIES PICTURES GENERAL INFORMATION

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Pictures - historical progress

Jun/2006

Panoramic vision

Aug/2006 Jun/2007 May/2008

Saprolitic nickel ore

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Initial works

Pictures - historical progress

Jun/2006 Aug/2006 Jun/2007 May/2008

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Engineering works execution and virolas transport

Pictures - historical progress

Jun/2006 Aug/2006 Jun/2007 May/2008

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Works in advanced stage

Pictures - historical progress

Jun/2006 Aug/2006 Jun/2007 May/2008

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Copper operations and projects

Carajás June 19, 2008

Marcio Godoy Director of Copper Department

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Copper business

Our copper business comprises operations in Brazil and Canada and totals 300 kt of copper per year. We have an organic growth strategy with projects in Brazil and other countries and a good base of advanced stage projects in Carajás. Currently we`re producing copper at Sossego, Sudbury and at Voisey´s Bay. We also have Salobo Project under construction and three projects in advanced stage of development.

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Copper operations management

The Copper Department is aligned with the company’s mission to transform mineral resources into prosperity and sustainable development:

• Hiring of local workforce

About 87% of the workforce hired for Sossego and UHC came from local residents.

• Water recycling and tailing reduction programs

Sossego`s use of net water fell from 18.37% of total water consumption in 2004 to 4.48% in 2007.

• Works on reforestation and recovering of degraded areas

More than 60.000 trees planted.

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1Q07 1Q08 Concentrate Production (dmt) 100.3 101.8

Sossego

Sossego is in the fourth year of operation and is constantly focusing on cost reduction and productivity. Satellite ore bodies that will expand Sossego`s lifetime (118 Sulphide Project and Visconde Target):.

• 118 Sulphide Project has probable and proved reserves of 12Mt @

2.4% Cu that will be treated at Sossego`s concentrate plant.

• Visconde, which is located about 15 km from Sossego mine may

host more than 100 Mt of copper ore.

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Salobo

Mining and plant equipments already ordered, Salobo`s Phase I (100 ktpy) is scheduled to deliver the first concentrate on 2H10. The access bridge has been constructed. Vale also concluded the vegetal suppression at the buffer stockpile, temporary stockpile and at the maintenance shop. Earthworks are already contracted, as well as civil construction of buildings, power line and sub- station. 7% of the project is completed, with a total expenditure to date of US$ 100 M.

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Carajás Hydrometallurgical Plant - UHC

UHC will develop an alternative technology to pyrometallurgy. Hydrometallurgy has some advantages, such as the possibility to treat low grade concentrates and obtain higher recovery grades in the concentrate plant. Vale`s main objective is to prove the technology on industrial scale and then decide on the feasibility to build a bigger plant (160 kty). The 10 kty plant will operate for 18 months.

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Papomono - Chile

Main equipments already ordered. On implementation, Papomono is a Sx-Ew operation, an opening door to Vale in Chile and the beginning of geographical diversification of the copper business. Permitting on going. All the cash flow generated by Papomono`s operation will be reinvested in Chile`s exploration works.

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Other copper projects

Cristalino Project

Status: Pre-Feasibility. Trade off analysis determined the optimum size of 16 Mtpy of ROM (120 kty of copper in concentrate). Permitting on going. Clean concentrate.

118 Oxide Project

Waiting for Implementation license.

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The Paragominas bauxite mine

Carajás June 19, 2008

Geraldo Brittes Director of Operations, Paragominas Bauxite Mine

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• First bauxite project wholly owned by Vale, located in the

municipality of Paragominas, in the state of Pará;

• Started its operations in April 2007, to supply Alunorte’s expansion

II, with investment of US$ 352 million for 5.4 Mtpy of capacity - US$ 65.2 per ton - one of the lowest capex per ton of the industry for a greenfield project;

• First bauxite mine in the world to use slurry pipeline;
• The first expansion to 9.9 Mtpy completed along with Alunorte’s

expansion III. The investment cost for the mine is US$ 196 million, equivalent to US$ 43.5/ton;

• Proven and probable reserves of 299.9 Mt enough to support

production for more than 30 years at current capacity (9.9 Mtpy);

Paragominas bauxite mine

Overview

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Recovered water Tailings Dam Concentrate Thickener (Product) Tailings thickener Recrusher SAG mill Classification Ball mill

Silo

Pumping Station to Pipeline Reclaimer Crusher

Paragominas bauxite mine

Simplified process flow

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Paragominas bauxite mine

Mining Strip mining method; Gibsite bauxite type; Suitable for low pressure and temperature alumina refineries; Quality: 50% available alumina and 4% reactive silica.

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Paragominas bauxite mine

Beneficiation Beneficiation includes SAG and Ball milling; Mass recovery of 70%; Slurry production with 50% of solids; Electric energy supplied by Tucurui hydropower; 230 KV transmission line built by Vale.

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Paragominas bauxite mine

Slurry pipeline Capacity designed to 14.85 Mtpy of final product; Pump station with six units with combined capacity of 9.9 Mtpy; Pipeline 244 Km long and 24” diameter; From mine to refinery it takes 40 hours trip.

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Paragominas bauxite mine

Tailing disposal

• Use of tailing thickner to

recovery water for beneficiation;

• Four diques to receive tailings

in layers for dry stacking;

• High solids content after

drying;

• High solids capacity to reduce

environmental impact;

• Total water recovered after

drying process.

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Paragominas bauxite mine

Dewatering

• Receiving tanks and filter plant Instead of port

facilities;

• Hyperbaric disc filters to dewater the slurry;
• Solids content increased

from 50 to 88% after filtering;

• Excess of water treated

and used in Alunorte process.

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Paragominas bauxite mine

Future developments

• A second expansion to 14.85 Mtpy, when approved, will supply the

New Alumina Refinery without the need for a second pipeline;

• Budget for the second expansion is estimated at US$ 416 million;
• Strong exploration effort being carried in the region should

increase proven and probable reserves overtime;

• A second pipeline can be built to support other 14.85 Mtpy at Vera

Cruz Sector;

• The concept of the project is very competitive considering the high

freight cost for bulk carrier in the future;

• Paragominas has the potential to become the largest bauxite

complex in the world.

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Analyst & Investor Tour 2008

Eduardo Bartolomeo Executive Director of Logistics

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Logistics overview and strategic drivers Logistics performance and investments

Iron ore General cargo

Operational excellence drivers

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OPERATIONAL FIGURES 10,179 kilometers railroad network 1,008 locomotives and 41,761 wagons 6 Ports and Maritime Terminals 3 vessels in operation 6 vessels under construction THESE ASSETS PROVIDE FOR… 251 million tons of iron ore shipped through Vale Port Complexes in 2007 28.3 million tons of general cargo shipped through port terminals in 2007

EFC EFVM FCA Port Terminals Multimodal Terminal FNS (EFC operation) FERROBAN Trackage right

Vale provides integrated logistics services including railroads and ports terminals

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We want the reputation of being the safest and most efficient logistic provider

Increase competitiveness in mining operations, mainly iron ore and coal In general cargo, focus on high margin and volume products, mainly steel industry and agribusiness

Vale logistics strategy

Investments in safety Focus on accidents reduction Preventive actions Operational efficiency Investments in infrastructure, automation, technology and training Vale environmental policy is an action based on ethics and social commitment Corporate Social Responsibility Productivity Safety Strategic drivers

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Logistics overview and strategic drivers Logistics performance and investments Iron ore

General cargo

Operational excellence drivers

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Vale has increased its iron ore shipments at 9.7% per year...

Iron ore shipments

million metric tons

1Q 03 2Q 03 3Q 03 4Q 03 1Q 04 2Q 04 3Q 04 4Q 04 1Q 05 2Q 05 3Q 05 4Q 05 1Q 06 2Q 06 3Q 06 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 39.2 Mt 60.8 Mt

CAGR: 9.7%

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…investing US$ 5.4 billion to expand its railroad and port capacity to meet demand growth…

1,896 1,092 649 981 484 274 2003 2004 2005 2006 2007 2008

Logistics investments 2003 to 2008 – US$ 5.4 Bi

US$ million

(*) (*) Budget

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Vitória a Minas Railroad – EFVM

…in the Southern System…

Vitória a Minas Railroad investments Tubarão Port investments

Implemented: Increase of 110 locomotives and 5,100 wagons in the last 5 years Duplication of Railroad between Brucutu and Costa Lacerda Expansion of railroad yard at Costa Lacerda In progress: Expansion of railroad yards at Drummond and Ipatinga Expansion of railroad yard in Tubarão Complex 28 locomotives and 900 wagons (2008/09) Implemented: 5th car dumper (start-up: May, 2008) In progress: Overall and services of all existing car dumpers Performance improvement of conveyor belts and replacement of 2 ship loaders

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5th car dumper (start-up: May, 2008)

In construction – 2007, October Start-up - 2008, May

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Carajás Railroad - EFC North South Railroad - FNS

…as well as in the Northern System

Carajás Railroad investments Ponta da Madeira Maritime Terminal investments

Implemented: Increase of 87 locomotives and 5,540 wagons in the last 5 years Expansion of 51 railroad crossing yards for 330 wagons In progress (30 millions tons additional): Expansion of Carajás and São Luis railroads terminals 38 locomotives and 3,128 wagons (2008/09) Implemented: Addition of Pier III Construction of 5th ship loaders at Pier III Addition of 4th loading tracks In progress (30 millions tons additional): Addition of 4th car dumper Stock yard “I”, stacker/reclaimer and conveyors

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Ship Loaders and stock yards

Stacker and reclaimer 04 - Ponta da Madeira Terminal Construction of 5th ship loaders Ponta da Madeira Terminal

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Expansion of Carajás railroad crossing yards – Location 41 Expansion of Ponta da Madeira railroad terminal

Railroad crossing yards for 330 wagons...

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... making possible the biggest train in the world

Train specifications

4 locomotives 330 wagons 3.5 Km of length 34,000 tons of iron ore per train

Improvements

In average, 9 trains/day in the railroad (reducing 30% comparing the last model) Increasing locomotives fuel efficiency

... waiting 5 minutes we can see the end of the train.

Movie

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Northern System has increased its transportation at 20% per year...

53 57 66 72 80 87 102 4 4 5 6 7 7 8 4 5 6 6 6 6 7 61 66 76 83 93 101 117

2002 2003 2004 2005 2006 2007 2008 (*) Iron Ore + Manganese – Foreign Market Iron Ore – Domestic Market General cargo (*) Budget

CAGR: 20%

Northern System Transportation

million metric tons

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Carajás Railroad

2 pier 4 ship loaders 2 loading tracks 4 car dumpers 4 stock yards New railroad branch in Carajás region (183 Km) Carajás main line duplication (612 Km) 72 locomotives and 5.540 wagons

Carajás Railroad - EFC North South Railroad - FNS

Expansion of Ponta da Madeira Maritime Terminal

In addition, new logistics projects are being developed in the Northern System to attend growing demand in iron ore

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Expansion of Ponta da Madeira Maritime Terminal

2 new pier and 4 ship loaders 4 new stock yards 2 new loading tracks 4 new car dumpers

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To better understand the dimensions…

System Capacity – 2.6 times Carajás original start-up Concrete Consumption – 1 million m3 (13 times Maracanã Stadium, 4 times Eurotunel and twice Rio Niterói Bridge) Earth works – 16 millions m3 in railroad (113 times Berge Stahls) Ship loaders – The four largest traveling ship loaders in the world Port – The additional capacity represent the third biggest port in Brazil

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Majors challenges…

On time on quality Environmental permits Equipment lead-time Human resources (about 15,000 people in the construction) Low OPEX Automation Equipment Standardization Higher axle load Low community impact Partnership with Vale Foundation to implement social programs

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Logistics overview and strategic drivers Logistics performance and investments

Iron ore General cargo

Operational excellence drivers

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General cargo gross revenues increased at 31% per year…

253 411 548 651 745

Gross revenue evolution

US$ million 1S 03 1S 04 1S 05 1S 06 1S 07

By industry sector

(2006 basis)

7.2% 6.4% 45.1% 38.3% 3.0%

Fuel Building materials Others Steel Agriculture

CAGR: 31%

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FCA Ferroban – FCA Right of Way Southern Coastal Railroad (in construction) Multimodal Terminal

…improving Operational & Financial performance

• f Centro Atlântica Railroad

Centro Atlântica Railroad - FCA

• Railroad sections renewal
• Improvement of locomotive fleet
• Business re-engineering
• Cost reduction program
• EBITDA turnaround

FCA EBITDA turnaround

US$ million

31.0 72.1 (34.6)

2005 2006 2007

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Plan to develop new logistics infrastructure in Espírito Santo state

Anchieta Viana

Litorânea Sul Railroad

New section that will connect Vitória a Minas railroad to Ubu Port and the south of Espírito Santo state Attraction of steel companies and new general cargo flows 165 km in length Potential demand can exceed 20 mty

Litorânea Sul Railroad

Ubu Port

New terminal feasibility study

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The Norte Sul railroad will provide a new general cargo corridor

Estrada de Ferro Carajás - EFC Ferrovia Norte Sul - FNS Ferrovia Norte Sul – FNS (em construção) Ferrovia Norte Sul – FNS (planejada)

On October 3rd Vale was awarded the concession to

• perate the 720 Km of FNS

Focus on general cargo exports (mainly soybean, rice and corn) Vale’s commitment to socio-economic development in Brazil 361 km to be built

Norte Sul Railroad - FNS

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Logistics overview and strategic drivers Logistics performance and investments

Iron ore General cargo

Operational excellence drivers

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“Green Railroad” commitment…

Approximately 1 million steel sleepers will be installed at EFC and EFVM railroads Environmental impact will be reduced by substituting wooden sleepers with steel sleepers that have double the lifecycle of wood

Railway sleepers replacement

About 400,000 steel sleepers will be replaced per year in both railroads

Vale’s railroads are prepared to use Biodiesel (B20) Natural gas has been developed

Efficient energy usage

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…to be the safest logistic provider…

Initiatives to improve safety

Development of Operational Policy focused on Safety Training centers for train drivers with simulators Automation and process control

ACCIDENTS PER MILLION TRAINS KILOMETERS

5 20 18 7 5 6 6 13 9 4 5 11 10 15 25 24 26 43 67 78 83 2001 2002 2003 2004 2005 2006 2007

EFC EFVM FCA

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…in order to achieve operational excellence

Initiatives to achieve excellence

Longer trains Efficient locomotives Installation of on board computers Higher axle loads Improved operational model

Locomotives Fuel Efficiency

(Liters / GTM x 1000 )

Carajás Railroad trains/day

(Number of trains per day)

AAR* 2006 5.6

* AAR –Association of American Railroads 6.9 12.0 1Q 03 2Q 03 3Q 03 4Q 03 1Q 04 2Q 04 3Q 04 4Q 04 1Q 05 2Q 05 3Q 05 4Q 05 1Q 06 2Q 06 3Q 06 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07

2.15 2.19 2.27 2.32 2.38 2003 2004 2005 2006 2007

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Only possible because we are continuously investing in our employees

Investments in technical know-how and critical competencies development, enabling logistics staff to face new challenges. Promotion of professional qualification for more than 4,300 potential employees in the last three years. Only in 2008, Valer (Vale Education) provided more than 70.000 hours of continuos education to the Logistics workforce. Launching of innovative post graduation programs and technical courses customized in

• rder to meet Vale’s needs such as Railroad

Specialization and Port Technical Course. 2008 training numbers Development Programs:

• Professional Qualification Program 688 participants
• Professional Specialization Program 143 participants

Continuos Education:

• Technical Tracks and Leadership Development

6,170 participations

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Vale: a global leader

www.vale.com

rio@vale.com