VIII Analyst & Investor Tour 2008 June 19, 2008 1
José Carlos Soares Director of the Northern System Iron ore operations & projects Carajás June 19, 2008 2
Iron ore production systems 2008 324 million metric tons of iron ore 43 million metric tons of pellets Northern System (2008): Iron ore production: 103 Mt/y São Luís pelletizing plant: 7 Mt/y Southeastern System (2008): Iron ore production: 126,3 Mt/y Pelletizing plants: 29.1 Mt/y Urucum Urucum Southern System (2008): Iron ore production: 95 Mt/y Pelletizing plants: 6.7 Mt/y 3
Northern System Northern System (2008): Iron ore production: 103 Mt/y São Luís Pelletizing plant: 7 Mt/y Urucum Urucum 4
Northern System - Carajás overview Eastern Range Key: Northern Iron Ore Range Formation Southern Range 5
Carajás iron ore mines Run of mine % Fe P SiO2 Al2O3 Mn LOI 2007 66.00 0.040 1.30 1.25 0.60 1.90 6
Northern System History & IO production evolution 110 Pier 03 Start up Carajás 103,0 Pelletizing 100 Discovery Plant Start up 91,7 Pier 02 Start up 90 81,8 80 72,5 69,4 70 Pier 01 Start up Carajás Start up 15 Mtpy 58,9 60 53,9 52,4 Mt 47,7 50 45,8 43,8 44,0 43,2 40,8 39,3 40 35,2 32,8 32,8 32,6 31,8 29,8 30 23,5 20 13,5 10 45 52 0,9 25 35 56 70 85 100 0 67 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08F CAGR 2002/2008 = 9.7% NN Production capacity (Mt/y) 7
Northern System EFC - Carajás Railway 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 8
Northern System Ponta da Madeira Maritime Terminal PIER I PIER II PIER III Ships up to 250,000 dwt Maximum draft: 21m Loading rate: 3 X 8,000 t/h 9
Northern System São Luís pelletizing plant Current capacity : 7.0Mtpy 10
Iron ore project pipeline Mtons 120 Serra Sul US$ 500 M 100 Northern System 10,094 Southern System 80 Southeastern System 60 Additional 30Mtpy 40 Bau 2,478 CE Itabiritos Auxiliary 2,427 20 Equipment 760 S. Leste 443 VGR 1/1 VGR 1/2 653 400 400 0 2008 2009 2010 2011 2012 2013 11
Master plan: 2000-2012 Integrated systems production evolution Production capacity increase to 422Mtpy in 2012 from 146Mtpy in 2000 Serra 500 Sul 422.3 450 379.5 371.2 400 341.5 350 323.9 296.0 300 265.5 235.0 Mt 250 212.0 189.1 200 168.1 174.2 145.8 150 100 50 0 2000 2001 2002 2003 2004 2005 2006 2007 2008' 2009' 2010' 2011' 2012' 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 New Projects 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 Current Mines * Forecast 12
Summary of Vale’s iron ore 2008 2008 2012 2012 � 324 Mt of iron ore; � 422 Mt of Iron ore; 43Mt of pellets 65Mt of pellets � 23 mines in operation; � 26 mines in operation; � railway network of 2,000 km � railway network of 2,000 km plus; plus; � 4 shipping terminals; � 5 shipping terminals; � 9 pelletizing plants. � 12 pelletizing plants; � also operating abroad. 13
Final comments 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. � 14
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. • Air and water quality monitoring; • Support for protection of environmental conservation units; • Climatology; • Waste management; • Environmental education; • Support to indigenous communities. 15
Additional 30 Mtpy � Production composition: � Description: 11% 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. 89% � Resources: SF PF � Location – Resources: N4WN: 562,7Mt – Drilling Campaign: expected to finish in Dec/07. � Production Capacity: 30 Mtpy after 2009 � Start up: 2009 16
Southern Range project � Description: � Production composition: – This project aims to attend the Northern System demand after 2012 with an additional production of 90 PF 32% Mtpy. � Resources: � Production capacity (Mt): – 2012: 40.0 Mtpy. (ramp-up) SF – After 2012: 90 Mtpy 68% � Start up: 2012 17
Southern Range project Carajas iron ore deposits 18
Southern Range project Starting production capacity: 40Mt/y Operation start-up: 2012 Distance from Northern Range: 80 km 19
João Coral Director of Mineração Onça Puma The Onça Puma nickel project Carajás June 19, 2008 21
GENERAL INFORMATION SUSTAINABLE DEVELOPMENT PROJECT IMPLEMENTATION PRE OPERATIONAL ACTIVITIES PICTURES 22
Location 23
Onça Puma history Phases 2002 2003 2004 2005 2006 2007 2008 2009 Scoping study Feasibility study Vale acquisition Basic engineering Basic eng review Approval by Boad of Directors Implementation Comissioning Start Up Line 1 Feb May Start up Line 2 24
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) 25
Operational sumary 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 26
GENERAL INFORMATION SUSTAINABLE DEVELOPMENT PROJECT IMPLEMENTATION PRE OPERATIONAL ACTIVITIES PICTURES 27
Operational manpower 2 years: 50% local manpower � 1200 employees and 400 contractors Next years: 70% local manpower � Great Investments in recruitment and labor qualification – Construction of Training Center at Ourilândia do Norte (PA). � Attraction and Retention Program considered � Teachers: 100 � Students: 500 until 2008 � Initial: 120 trainees and 40 operators � Partnership with class entities for education development 28
Social relationship Churches Government Institutions Municipalities (INCRA/SEMA/SRF other) Onça Puma Project MST and Aboriginals Sem Teto (Xikrins e Kaiapós) Farmers Associations 29
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 30
Project environment CONCEPTS 1 CONCEPTS 2 PROGRAMS • 100% rain water used for operation, to avoid reduce level of Catete River that suppliers Xicrin Indian Reserve. dam or water reservoir 31
Project environment CONCEPTS 1 CONCEPTS 2 PROGRAMS •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 32
Project environment CONCEPTS 1 CONCEPTS 2 PROGRAMS � Land rehabilitation � Solid waste control � Water resources � Atmospheric emissions& quality of air � Archeology � Environmental education � Fauna and plant control 33
GENERAL INFORMATION SUSTAINABLE DEVELOPMENT PROJECT IMPLEMENTATION PRE OPERATIONAL ACTIVITIES PICTURES 34
Physical progress implementation 10% 100% 9% 88% 8% 66,64% 75% 7% 63% 6% % Acumulado % Mensal 5% 50% 4% 38% 3% 25% 2% 13% 1% 0% 0% 7 8 9 6 6 6 7 7 7 7 7 8 8 8 8 8 9 9 6 6 7 7 7 7 7 7 8 8 8 8 8 8 9 9 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 / / / / / / / / / / / / v / / v / / / / / / / v / / v / / / / / / / v / / v / / o t r r o t r r o t r r t z n i n l t z n i n l t z n i e u e a b a u e u e a b a u e u e a b a o o o g e a u g e a u g e a s o f m a m j s o f m a m j s o f m a m n n n a d j j a d j j a d j Mês %BL. %BL (2007) %BL (2008) %repr. % real %BL acum. %BL acum (2007) %BL acum (2008) %Repr.acum. %Real acum. 35
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