Vale S.A. : Vale S.A. : A STRONG IRON ORE PERFORMANCE

Rio de Janeiro, February 1, 2013 - Vale S.A. (Vale)
delivered a very good operational performance
in 4Q12. Iron ore production reached the highest
level for a fourth quarter, at 85.5 Mt, allowing for
a larger exposure to the price rally of the final
months of last year.
Due to seasonality, iron ore output in the last
quarter of each year is normally lower than in the
third quarter. This was the first time since 2003
that the performance in a fourth quarter was
better than in 3Q, being 1.9% higher.
Two factors were instrumental to this
achievement: (a) after the conclusion of the prestipping
the operation of the N5 South mine in
Carajás contributed not only to the output
increase, but to better quality and lower costs; (b)
below normal rainfall during the quarter.
Coal production also reached a quarterly all-time
high mostly due to the successful ramp-up of
Carborough Downs, after the issues which
determined its shutdown in 2Q12.
2012 was a challenging year in view of the
adverse weather conditions which affected iron
ore production in Brazil in the first quarter, and
the stoppages of Sudbury, Carborough Downs,
VNC and Onça Puma caused by safety and
operational problems. With the exception of
Onça Puma, all of them returned to operation.
Our iron ore production was 320.0 Mt in 2012,
slightly lower than 2011. Nickel output, at
237,000 t, fell 1.9% in relation to the previous
On the other hand, three annual production
records were achieved - pellets (55.1 Mt), coal
(7.1 Mt) and phosphate rock (8.0 Mt).
At the moment, there are four operations
ramping up: Salobo I, copper and gold,
Lubambe, copper, VNC, nickel oxide and Moatize,
Salobo I and Lubambe are ramping up smoothly,
according to the plans. VNC produced 1,200 t of
its final product, nickel oxide, in December.
Repairs to the acid plant and the installation of
the refining columns of the solvent extraction
circuit were concluded. As planned, the output
of VNC is processed at the Dalian refinery, in
China, into finished nickel. Moatize delivered
3.768 Mt of coal in its first year of operation.
In 2H13, two iron ore projects will come on
stream: Carajás Additional 40 Mtpy and
Conceição Itabiritos, which will contribute to the
enhancement of our iron ore operations, through
production increase, higher average Fe grade
and lower costs. These effects on our
performance will be material from 2014 onwards.
The prospects of a moderate expansion of the
global demand for minerals and metals over the
medium-term do require a stricter discipline in
capital allocation and a stronger focus on
maximizing efficiency and minimizing costs. Our
growth plans reflect the priority shifting from the
marginal volume to the capital efficient volume,
a move that is expected to have significant
positive implications for our operating and
financial performance.
In this scenario, innovation, such as CORe,
implemented in 4Q12 in our Sudbury operations,
and truckless mining, to be employed in the
Carajás S11D project, became an important
driver of competitiveness in the mining industry.


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Source: Vale S.A. via Thomson Reuters ONE
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