0

Tubarão Port, ES, Brasil

Vale goes to the BM&F Bovespa Stock Exchange

André Figueiredo

August 2016

1

Dis

clai

mer“This presentation may include statements that present

Vale's expectations 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 dependence on global industrial production,

which is cyclical by nature; and (e) global competition in the

markets in which Vale operates. To obtain further

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 in

particular the factors discussed under “Forward-Looking

Statements” and “Risk Factors” in Vale’s annual report on

Form 20-F.”

2

Agen

da

1. Market dynamics

2. Impact on Vale’s performance

3. Paving the future

3

Market dynamics

4

35

40

45

50

55

60

65

70

4-Jan 28-Feb 23-Apr 17-Jun 11-Aug

4,000

4,300

4,600

4,900

5,200

4-Jan 28-Feb 23-Apr 17-Jun 11-Aug7,500

8,000

8,500

9,000

9,500

10,000

10,500

11,000

11,500

4-Jan 28-Feb 23-Apr 17-Jun 11-Aug

7580859095

100105110115120125130135

4-Jan 28-Feb 23-Apr 17-Jun 11-Aug

46.4%

56.4%

1.6%

20.2%

Percentual price increase from

Jan 4, 2016 to August 23, 2016

Source: Bloomberg.

US$/t

Iron Ore

Nickel Copper

Metallurgical Coal

Commodities prices increased year to date reflecting a more positive sentiment, mainly in China

5

The positive sentiment is significantly based on the credit expansion in China with a record of bonds’ issuance by the Chinese government

Source: UBS, CEIC.

Share of credit on GDP, % yoy 3-month moving average, seasonally adjusted

-10

0

10

20

30

40

50

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Local government bond

Corporate bonds

Off-balance sheet credit

RMB & FX loans

Overall credit

6

Resulting in a greater incentive in fixed asset investment in China, particularly in infrastructure and real state market

Fixed Asset Investment (FAI)

% growth y/y, 3 months moving average

Real estate market

% growth y/y, 3 months moving average

Source: UBS, CEIC.

-5

5

15

25

35

45

55

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Total

Infrastructure

Real state

Manufacturing

-40

-20

0

20

40

60

80

100

Floor space sold

Floor spacestarted

7

Seaborne market1 iron ore supply

In this context, the expectations for Chinese steel production improved, potentially absorbing additional iron ore supply

Crude steel production

Mt Mt

804 796 801 804 807 810

819 816 836 855 878 899

1,623 1,612 1,637 1,659 1,685 1,709

2015 2016 2017 2018 2019 2020

Steel production ex-China

Chinese steel production

201157

149135 122 1201,610 1,629

1,6831,739 1,750 1,752

2015 2016 2017 2018 2019 2020

Chinese domestic market

Seaborne market of iron ore

1 Seaborne market, including pellets.

Source: World Steel Association and Vale.

8

Demand Drivers

• Recovery of Chinese stainless steel production

China accounts for 40% of global nickel demand

• Nickel total imports grew by 74% 1H16 vs. 1H15

• Reduction of 18% (79 kt) of nickel inventories on

the LME 1H16 vs. 1H15

Chinese stainless steel production

0.0

0.5

1.0

1.5

2.0

2.5

jan/15 apr/15 jul/15 oct/15 jan/16 apr/16

9%

1H15 1H16

Source: CRU

The nickel market is improving, which should boost our results

Bt

9

Fundamentals are improving in China as demand recovers and

local nickel supply falters

Supply Drivers

Indonesia:

• Export ban

Philippines:

• Philippines accounts for almost all nickel used by

the Chinese NPI industry

• NPI production represents 25% of the nickel

supply in 2016

• New government in Philippines with very strong

environmental policy

• Environmental audit conducted by the

government was responsible for the shutdown of

7 mines, with an estimated reduction of 10%¹ of

the exported volume

Chinese Nickel Pig Iron Production

Source: Wood Mackenzie and Vale (breakdown)

¹ Based on export numbers of 2015

0

50

100

150

200

250

300

350

400

450

500

2011 2012 2013 2014 2015 2016F

Philippines supply

Indonesian supply

estimate

ytd

Kt

10

17

114

222

14799

-93

2011 2012 2013 2014 2015 2016E

1.991 1.981 1.909

2014 2015 2016E

-4%-1%

The nickel market will record a potential deficit¹ in 2016 with lower

global nickel supply

World Nickel Supply

Mt

Supply and Demand Balance1

Kt

1 Supply and demand balance excluding the inventories in the LME and SHFE.

Source: Market analysts (CRU Q3 Outlook; Wood Mackenzie July Short Term Outlook, Wood Mackenzie Q2 Long Term Outlook).

The nickel supply should decrease 4% in 2016, primarily because of the reduction of NPI in China and

because of the increase of uncertainty regarding the nickel ore export industry in the Philippines, which is the

main supplier of nickel to the NPI production

11

Due to favorable arbitrage, inventories have migrated

towards Shanghai Exchange, with total inventories

within the historical range

We expect a surplus in the copper market in 2016,

with a tight market in the following years

In 2016, we expect a surplus in the copper market, with a tight

market in the following years

Source: CRU Copper Outlook Quarterly Report 2Q16, metalprices.com

Global balance in refined copper

Kt

World Copper inventories in Exchanges

Kt

-225

38

-553

-198-31

322 383328

110

-277

-

100

200

300

400

500

600

700

800

900

1,000

LME

Comex

Shanghai

12

Impact on Vale’s

performance

13

Despite recent prices increases, commodities’ prices are returning

to its historical level

0

50

100

150

200

250

300

350

400

1962 1968 1974 1980 1986 1992 1998 2004 2010 2016²

Iron ore

Metallurgical coal

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

1962 1968 1974 1980 1986 1992 1998 2004 20102016²

Copper Nickel

1 Nominal prices for 2015 and 2016 and real prices for the previous years.2 Average until August 23rd, 2016.

Source: Bloomberg, World Bank, Wood Mackenzie and CRU.

US$/t

Base Metals1 Bulk materials1

14

1 Net of depreciation and amortization.2 Includes SG&A, R&D, Pre-operating and stoppage and other expenses. Does not include gain/loss on sale of assets.3 Positive impact of US$ 244 million from the goldstream transaction on the 1Q13.4 Positive impacts of US$ 230 million from the goldstream transaction on the 1Q15 and US$ 331 million of Asset Retirement

Obligations - ARO).

Our focus and managerial discipline allowed us a substantial

reduction in costs and expenses, despite an increase in volumes

Costs¹

US$ million

Expenses1,2

US$ million

-32%

3,385

1,969

1,534

1,041

707

1H12 1H13 1H14 1H15 1H16

-79%

10,887

9,4989,928

8,561

7,368

1H12 1H13 1H14 1H15 1H16

3

4

15

3.8

4.9 5.0

2013 2014 2015

299.8319.2 333.4

2013 2014 2015

Iron ore1,2

Nickel Copper3

Coal (Moatize)

260275

291

2013 2014 2015

+11.8%

+11.2%

370 380424

2013 2014 2015

+14.5%

1 Includes iron ore fines, lump, ROM and iron ore feed for Vale’s pellets plants.2 Excludes Samarco’s attributable production.3 Includes Lubambe’s attributable production. 2013 figure include Tres Valles production.

+30.0%Mt Mt

Kt Kt

With the start-up of new projects and an increase in productivity,

we have increased production volumes in different commodities

16

Adjusted EBITDA margin (%)

Platts IODEX Iron Ore Price Average (US$/t)

4.1

3.0

2.21.6

2.21.9

1.42.0

2.4

102.6

90.2

74.3

62.458.4 54.9

46.7 48.355.7

2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q16 2Q16

The recent price hikes and continuous cost discipline boosted

Vale’s adjusted EBITDA1 in 2Q16

US$ billion, quarterly EBITDA

1 Adjusted EBITDA excludes gains and/or losses on sales of assets and non-recurring expenses and includes dividends received from

non-consolidated affiliates.

2014 2015

EBITDA

41.4 33.1 24.1 25.7 31.8 28.8 23.6 35.1 36.0

17

54.6

50.0

46.9 47.0 47.5

46.1

1Q15 2Q15 3Q15 4Q15 1Q16 2Q16

R$/t

-15.6%

1 2015 figures were adjusted to the new allocation criteria, as reported in the 4Q15, and include acquisition costs and third party purchased ore.

.

-7.8%

Iron ore C1¹ cash costs in R$ are falling in a consistent way

18

57.6

39.336.9

32.630.9

28.0 28.5

4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16

-51%

Decreasing EBITDA breakeven of iron ore and pellets on a landed

in China basis1

1 Considers: [Cash cost + Royalties + freight + distribution + expenses(SG&A + R&D + pre-operating and stoppage expenses) +

moisture, adjusted for quality and pellets premiums] / [iron ore sales volume (ex ROM)].

US$/t

19

11.7 11.6

9.6

7.9

5.5

4.6 4.6

4.6

4.1

2.9

16.3 16.2

14.2

12.0

8.4

5.5 – 6.0

2011 2012 2013 2014 2015 2016E¹

Sustaining

Growth projects

We have been increasing our discipline in capital allocation with

significant reduction in capital expenditures

1 Considers exchange rate of BRL/USD 3.50 - 3.80.

Capex, US$ billion

20

8.16.6

11.6

7.9

0.50.2

Original Budget Total Until 2015 2016 2017 2018 2019

Logistics

Mine and plant

Mine, plant and logistics

1.6

2.6

9.414.4

19.7

Our biggest growth project – the S11D – will complete most of its

investment in the next 2 years

1 Includes project expenses, that are not capitalized, of US$ 289 million accumulated until 2015, US$ 84 million in2016, US$ 52 million

in 2017, US$ 15 million in 2018 and US$ 5 million in 2019.

²: Exchange rate of R$ 3.80 for the Total Project and for the years 2016-19.

US$ billion

2

21

The S11D project reached significant progress in the mine, plant

and railway until now

S11D Plant – Screening, crushing and patios Status in June 2016

• Combined physical progress of 79%

− 90% of physical progress at the

mine site

− 70% of physical progress at

logistic sites

− 92% of physical progress at the

railway spur

• Cold commissioning on the mine site

initiated

• Duplication of the railway with 54%

physical progress and 243 Km

delivered

• Railway spur connection to EFC

Railway concluded

S11D Logistics – Port offshore

22

The project will function with dry processing and will not need tailings dams

Screening Process Process’ Highlights

• High Fe content and highly homogenous

ore body allows the dry processing, without

any concentration process

• 18,000 MWh of electricity saved every year

(equivalent to a 20,000 inhabitants’ city)

• Lower environmental impact (lower water

consumption and no need for tailings

dams)

• Simpler process reducing capital

investment and sustaining investment,

mainly on tailings dams

23

26,509

27,661 27,508

2Q15 1Q16 2Q16

Our debt slightly decreased in 2Q16

Gross Debt

US$ million

Net Debt

Cash position on

June 30, 2016

4,306

29,77331,470 31,814

2Q15 1Q16 2Q16

24

Fixed rate69%

Floating rate31%

US$90%

Other currencies

10%

0.53.2

4.02.9

20.5

31.1

2016 2017 2018 2019 2020onwards

GrossDebt

US$ billion

In parallel, we continue to manage our current debt profile

Debt amortization schedule¹ Debt profile, after currencies hedge

1 As of June 30th, 2016.2 Does not include accrued interest

75% of debt maturities after 2019

2

25

Impact on Vale’s

financial results

Resumption of

Samarco’s

operations

• Samarco filed on June 23, 2016 the Environmental Impact Study and the Environment

Impact Report (EIA / RIMA) in the SEMAD1, as part of the licensing process for the

use of exhausted pits for tailings disposal

Environmental

licensing process

The uncertainties on the potential resumption of Samarco’s

operations had an impact on Vale’s financial results

• Vale provisioned R$ 3.7 billion2 in its interim financial statements as of June 30, 2016

• Vale expects to contribute about US$ 150 million to the Foundation in 2H16, with this

amount offset against the abovementioned R$ 3.7 billion provision

• Vale intends to make available, in addition, short-term facilities of up to US$ 100

million to Samarco to support its operations

• Nonetheless, Samarco and its shareholders still expect Samarco to generate a

significant portion of the funds required to meet its obligations as per the Agreement

• Samarco cannot currently make a reliable estimation of how and when its operations

will be resumed, given the current status of the licensing process

• Samarco’s current assessment is that the probability of resuming operations in 2016 is

highly unlikely

1 State Department for Environmental and Sustainable Development of Minas Gerais.2 Equivalent to the present value of its estimated secondary responsibility under the Agreement

26

Paving the future

27

2016 and 2017 will be years for optimizing of our business with

the continuous structural reduction of cost and expenses

Our main priority is to strengthen our balance sheet together

with the increase in our Free Cash Flow

1

2

From the strategic and financial point of view, we are prepared to

face the current uncertainties of our industry

28

1

2

In iron ore, our integrated supply chain offers operational flexibility to maximize margins

Source: Vale

22 mines in 4

production

systems

3 railways and 4

ports in Brazil

12 pelletizing

plants (Brazil

and Oman)

2 DCs and 5

blending ports

29

Turning Vale into the more profitable company in the iron ore

business

US$ billion

Iron ore – EBITDA¹

7.1

4.0

2.83.0

3.8

8.1

6.1

4.1

3.73.4

6.2

4.8

3.5

2.7 2.8

2.4

1.4

1.11.3

1.9

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

1H14 2H14 1H15 2H15 1H16

Vale

Peer 1

Peer 2

Peer 3

¹ Para a Vale foi utilizado o EBITDA ajustado do minério de ferro e pelotas (Ex-ROM).

Fonte: Relatórios de Resultados Financeiros de cada empresa

1

2

30

Copper

Coal

Fertilizers

1

2

In copper, coal and fertilizers we will improve our competitive position in the near future

• Completion of the ramp-up of Salobo tapping into a new rich

resource base

• Optimization of copper concentrate production in North Atlantic

operations with revision of our production flowsheet

• The late cycle of the commodity balances Vale’s business

portfolio

• Start-up of the Patrocínio phosphate rock project by 2017 will

generate an additional estimated EBITDA of US$ 80-90

million

• Ramp-up of the Nacala Logistics Corridor will increase our

competitiveness in the coal business, reducing around 60% of

COGS when compared to 2015

• Operational improvements in Mozambique are paving the way

for better results in our coal business

31

• Our discipline in capital allocation will enable a significant

CAPEX reduction from 2015 to 2016

• The portfolio simplification in the range of US$ 4 to 5 billion will

help us improve our cash flow and reduce our leverage

• The execution of the ongoing initiatives will allow a solid cash

generation at any price scenario

2

1

Our main priority is to strengthen our balance sheet together with

the increase in our Free Cash Flow

32

Evaluation of additional transactions,

aiming at reducing net debt by US$ 10

billion

• 3 VLOCS – US$ 269 million

• Goldstream – US$ 823 million

• Coal JV

• 4 VLOCs

• Definition of the future assets portfolio

• Assessment of the value of potential

transactions

• Estimate of the potential debt

reduction associated with potential

transactions

2016

2016 - 2017Asset portfolio simplification,

totaling US$ 4 – 5 billion

2

1

Potential divestments and strategic transactions will help balance

free cash flow and strengthen the balance sheet

Concluded transactions

33

Amount to be

received by Vale

• Approximately US$ 3 billion:

Sale of Vale’s stake in Moatize and Nacala to Mitsui

Reimbursement of capex proportional to Mitsui’s stake, disbursed by Vale

since July 2014

Repayment of the loans granted by Vale to Nacala

Next steps

• Obtain a similar agreement from the government of Malawi

• Sign direct agreements with Project Finance lenders

• Sign inter-government agreements

• Other steps, such as the approval of the amendments on the four concession

agreements of the railway and the port

• Sign finance agreement

• On June 7, the documents related to the railway concession contracts (different

companies) and to the Nacala-à-Velha port were approved by the Mozambique Board

of Ministers

Important milestone

The completion of Nacala’s Project Finance will be an important

step to boost competitiveness in Mozambique2

1

34

Share price recovery from Jan/16

to August 23rd

Vale’s shares appreciate significantly on 2016, detaching from its

main peers

1 Vale 3 (BRL) – amount converted into USD

Source: Bloomberg.

Index, 01/04/16=100

28%

13%

86%

60

110

160

210

Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16

Vale 3¹ Peer 1 Peer 2

35

82.4

52.1

2H14 1H16

22.0

12.8

2H14 1H16

EBITDA per ton Ferrous Minerals Vale PN¹

24.6 24.0

2H14 1H16

-41.8%

19.2

12.9

2H14 1H16

-33.1%US$/ton R$

C1 cash costIron ore price Platts 62%

US$/tonUS$

But the recovery of the stock price does not reflect the operational

improvement of the company

.

-36.8%

2.4%

1 VALE 5 share price on the last business day of 2H14 and 1H16.

36

We will be competitive, independently of prices

Sound balance sheet

World-class

assets

Low Capex

Capex and project pipeline optimization

Low sustaining per ton

Low leverage

Long debt maturity

New mines with high

ore grade

Lower costs and

expenses per ton

Modern logistics

infrastructure

Low depletion

37