Rio de Janeiro, April 19th, 2021 – Vale S.A. (“Vale”) continues to progress, despite the additional challenges imposed by COVID-19 pandemic in Brazil, on its Iron Ore stabilization plan, resuming the remaining halted capacity at Timbopeba site and Vargem Grande pellet plant. On Base Metals, the sale of VNC operations was an important step on Vale’s commitment to transform the business, simplifying the operations flowsheet going forward and enabling a continuous focus on core assets. Vale also announced its intention to exit the Coal business and concluded in April the revamp of the two processing plant in Moatize, which is expected to produce sustainable results for the business.

Vale’s iron ore fines production totaled 68.0 Mt in 1Q21, 14.2% higher than in 1Q20, as Vale progressed on its operational stabilization and resumption plan. The year on year growth is attributed to: (i) the gradual resumption of halted operations in Timbopeba, Fábrica and Vargem Grande complexes throughout 2020; (ii) stronger performance in Serra Norteand lower rainfall in January; (iii) higher third party purchases; and (iv) the restart of Serra Leste operations, which were partially offset by (i) scheduled maintenances in S11D; and (ii) the lower performance in Itabira complex related to tailings disposal restriction in the complex. The 19.5%q/q decline in production is mainly attributed to the usual seasonality.

Following its stabilization and resumption plan, Vale achieved a production capacity of 327 Mtpy production in 1Q21, due to the commissioning of Timbopeba’s beneficiation lines (+7Mtpy), which was partially offset by performance restrictions in different sites (e.g. Itabira and Mutuca), as disclosed previously.

The resumption plan advanced with the start-up of Vargem Grande’s tailings filtration plant, the first of four filtration plants in Minas Gerais. The second plant, located in Itabira, is expected to start operation by the end of 2021.

Vale’s pellet production totalled 6.3 Mt in 1Q21, 9.2% lower than in 1Q20, as a result of lower pellet feed availability from Vale’s sites mainly from Itabira and Brucutu. Despite a weaker quarter, Vale expects to gradually increase production during 2021 with the higher availability of pellet feed from Timbopeba and Vargem Grande.

Sales volumes of iron ore fines and pellets totalled 65.6 Mt in 1Q21, up 11%y/y on stronger iron ore production, but partially offset by lower pellet-feed availability. Iron ore price premium was US$ 8.3/t2, as strong demand recovery from ex-China markets, higher coking coal prices in China and the need for elevated productivity in blast furnaces gave support to higher spreads between 65% Fe index and 62% Fe benchmark index and pellet premiums.

Iron Ore

Pellets