VALE3

Vale S.A. is a Brazilian company founded on January 11, 1943, originally under the name Companhia Vale do Rio Doce (CVRD), in the context of the nationalization of mineral reserves during the Vargas administration. Its creation is linked to the succession of Itabira Iron Ore Company, a foreign-capital company that held concessions to exploit iron ore deposits in the Itabira region, in Minas Gerais, and to operate the Vitória a Minas Railroad (EFVM). Over the following decades, the company evolved from a mixed-capital enterprise with strong government presence into a global corporation with widely held capital and no controlling shareholder today. Vale’s common shares are traded on the Novo Mercado segment of B3 under the ticker VALE3, and are also listed on the NYSE (VALE) and on Latibex in Madrid (XVALO), underscoring the international nature of its investor base and operations.

Vale’s operating history is closely tied to the development of mining in Brazil and the formation of an integrated mine-railroad-port system. Since the early 20th century, the EFVM has transported iron ore and agricultural products and still maintains continuous passenger service to this day. From the 1950s onward, with the beginning of pellet production and the integration of pelletizing plants into the logistics infrastructure, the company consolidated a model that combines mineral extraction, processing, rail transportation and export through its own maritime terminals. In the 1960s and 1970s, Vale expanded its presence in the international market with the inauguration of the Tubarão Port, in Espírito Santo, and long-term contracts with steelmakers in Japan and Germany, later also supplying China, which is now the main destination for its products.

The privatization of CVRD in 1997 marked a significant change in the shareholding structure, with control transferred to the holding company Valepar S.A., formed by private companies and pension funds. In the 2000s, Vale broadened its mineral diversification by entering copper, through the Sossego Mine in 2004, and expanding iron ore production with the Brucutu Mine in 2006. The acquisition of Canadian miner Inco Limited in 2006, now Vale Canada Limited, cemented the company’s presence in metals considered important for the energy transition, especially nickel. In 2007, reflecting its consolidation as a global group, CVRD adopted the Vale brand only. In governance, a milestone was the 2017 restructuring, which included the conversion of preferred shares into common shares, the merger of Valepar and the migration of shares to B3’s Novo Mercado, a process that culminated in 2020 with the end of the shareholders’ agreement and the absence of a defined controlling shareholder.

Vale’s business model is structured into two major segments: Iron Ore Solutions and Energy Transition Metals, plus a residual “Others” category. In Iron Ore Solutions, the company operates in iron ore mining, production of agglomerates (pellets and briquettes) and the operation of extensive associated logistics systems, which include railways, maritime terminals and ports, as well as energy assets related to mining operations. Vale operates three integrated iron ore systems in Brazil – North, Southeast and South – that connect mining complexes to export terminals such as Ponta da Madeira, Tubarão, Ilha Guaíba and Itaguaí. In the Energy Transition Metals segment, the company focuses on non-ferrous minerals, mainly nickel and copper, with co-products and by-products such as cobalt, platinum group metals, silver and gold, reflecting a portfolio linked to global industrial chains that are metal intensive.

The Iron Ore Solutions segment is Vale’s main revenue generator. In the fiscal year ended December 31, 2024, this segment accounted for approximately 82.6% of net operating revenue from continuing operations, considering iron ore, pellets, other ferrous products and services. Iron ore alone generated R$ 134.3 billion in revenue, or 65.2% of the total, while pellets and other ferrous products added further meaningful amounts. The company produces iron ore from open-pit mines located mainly in Pará and Minas Gerais, with different ore types, including high-grade hematite and itabirite, which undergo dry and wet processing to produce sinter feed, pellet feed and lump ore. Vale also operates eight pelletizing plants in Brazil and two in Oman, in addition to briquetting plants, with total nominal capacity estimated at tens of millions of tons per year in agglomerates, reinforcing its role as a supplier of solutions tailored to the needs of the global steel industry.

In Energy Transition Metals, which accounted for about 17.4% of Vale’s net operating revenue in 2024, the company operates essentially through its subsidiary Vale Base Metals Limited (VBM). The main nickel operations are in Canada and Indonesia, with mines, processing plants and refining units in Canada, the United Kingdom and Japan. In these operations, nickel ore yields by-products such as cobalt, PGMs, silver and gold, which are processed at refining facilities in locations including Port Colborne and Long Harbour in Canada. In Brazil, the company mines nickel at Onça Puma, in Pará. As for copper, production takes place at the Sossego and Salobo mines, also in Carajás, and at units in Canada associated with nickel operations, producing copper concentrates and cathodes. Vale also receives payments for the silver and gold contained in Salobo copper concentrates and for the gold portion present in the Sossego concentrate, adding complexity to its metals mix.

Vale’s geographical footprint is broad, both in terms of production and customer base. The company participates in greenfield mineral exploration projects in five countries and operates large logistics systems in Brazil and other regions of the world, with railways, ports and distribution centers that support global iron ore delivery. In 2024, Asia accounted for 66.7% of net operating revenue, with China (including Taiwan) standing out, representing 51.1% of the total. Europe accounted for 11.8%, with Germany as a relevant market, while the Americas represented 14.6% of revenue, including Brazil and the United States. The Middle East, Africa and Oceania complete the geographical distribution of sales. No single customer accounted for more than 10% of revenue in the period, indicating diversification in the customer base, which is mostly linked to the steel industry and metal-intensive sectors.

Vale’s activities are heavily regulated, especially given the mineral nature and environmental relevance of its assets. In mining, mineral resources belong to the State in countries such as Brazil, requiring government concessions for exploration and mining, while in other jurisdictions, such as Ontario in Canada, part of the operations is based on private mineral rights. The company holds extensive mining concessions and licenses in Brazil, Canada and Indonesia, in addition to areas under exploration, and is subject to specific royalties and taxes, such as the Financial Compensation for Mineral Resource Exploitation (CFEM) in Brazil, as well as state and municipal oversight fees linked to extraction. In Canadian provinces and in Indonesia, Vale also pays mining-specific taxes and royalties, which affect project profitability and demand active management of regulatory issues.

In the environmental, social and governance (ESG) field, Vale states a commitment to integrating sustainability into its business and has been structuring its communications through an annual Integrated Report since fiscal year 2020, replacing the former Sustainability Report. This report follows international references such as the Integrated Reporting Framework, GRI standards, the Mining and Metals sector supplement, SASB indicators, ICMM principles, TNFD guidance and World Economic Forum metrics. The Integrated Report for 2024 underwent limited assurance by PwC and presents a materiality matrix with topics considered critical for the company, such as dams, biodiversity, local communities, human rights, eco-efficiency, mine closure, governance and compliance, climate change, people, health and safety, and innovation. In addition, in 2009 Vale signed an open letter to Brazil on climate change, making voluntary commitments to reduce greenhouse gas emissions and incorporating climate issues into the company’s strategic agenda. For individual investors who follow VALE3 on B3, these elements help to understand not only the company’s revenue generation profile but also the regulatory and sustainability context that influences the risk and long-term outlook of its mining and metals business.