Vale Production & Sales Report for Apr-Jun 2021 Quarter
Vale Vale

Vale Production & Sales Report for Apr-Jun 2021 Quarter

Vale completed another quarter of iron ore production growth of 11% QoQ and achieving a current capacity of 330 million tonne per year,

Vale completed another quarter of iron ore production growth of 11% QoQ and achieving a current capacity of 330 million tonne per year, which if sustained could allow for an average of 1 million tonne per day production in H2 of 2021, due to the favorable seasonality from better weather conditions in the period. The unmanned train operation in Timbopeba is performing well and the maintenance of the ship loader CN6 at the Ponta da Madeira Maritime Terminal was executed as scheduled, causing no impact in this year's expected shipments. On Base Metals, the first ore production on its Reid Brook deposit at the Voisey's Bay Mine Expansion Project was an important achievement for the continued delivery of quality, predictable and responsibly sourced material to market.

Vale's iron ore fines production totaled 75.7 million tonne in 2Q21, 11.3% higher than in Q1 of 2021, as a result of

Higher volumes from Brucutu with the increase in high-silica sinter feed production by dry processing taking advantage of a very favorable market environment

Seasonal improvement of weather-related conditions in Serra Norte and a strong performance in Serra Leste

Higher productivity in Itabira Complex, with the reassessment of temporary tailings management solutions

Higher third-party purchase

Wet processing production in Factory during the tests to summarize beneficiation plant operations

Those positive results were partially offset by the interferences (tie-in effect) caused by the installation and commissioning of the first of four jaspilite crusher in S11D.

Considering the iron ore mining plan and the implementation of new initiatives, Vale achieved a production capacity of 330 million tonne per year, mainly as a result of Serra Leste achieving full capacity. The start-up date of some operations were revised due to the time required to receive their respective authorizations, namely

Vargem Grande conveyor belt resumption (now expected for 3Q21)

To continue Factory's wet processing production (now expected for 3Q21)

Crooked dam in Brucutu following the need for extra works to increase the safety factor (now expected for 2H22)

Vale's pellet production totaled 8.0 million tonne in Q2 of 2021, 27.4% higher than in 1Q21, although still limited by pellet feed capacity. Quarterly increase is mainly explained by the seasonally higher pellet feed availability which was directed towards Oman plants and the ramp-up of Vargem Grande pellet plant.

Sales volumes of iron ore fines and pellets totaled 74.9 million tonne in Q2 of 2021, up 14.2% higher than in Q1 of 2021, as iron ore production increased. Iron ore price premium was USD 8.4 per tonne, in line with Q1 of 2021, following higher pellet, IOCJ and BRBF premiums, which were offset by a higher share of high-silica products with the increase of sinter feed production by dry processing, taking advantage of a strong market environment.

Production of finished nickel was 41.5 kt in Q2 of 2021, 14.3% lower than Q1 of 2021 mainly due to the disruption of labor at Sudbury and unscheduled maintenance in Clydach Nickel Refinery, which impacted the total production from material sourced from PTVI. On June 1st, 2021, production and maintenance employees represented by the United Steelworkers (USW) Local 6500 in Sudbury voted to reject the Company's offer for a new five-year collective bargaining agreement, resulting in a labor disruption at Sudbury operations. Meanwhile, Vale implemented contingency plans to preserve the integrity and safety of the plants and mines.

Copper production reached 73.5 kt in Q2 of 2021, 3.9% lower than Q1 of 2021 from the labor disruption in Sudbury and delays in mining at Voisey's Bay, partially offset by a more robust performance in Salobo due to the ramp-up of mine maintenance activities and better performance at Quiet Operations. In line with COVID-19 safety measures, which limited the mobilization of contractors, Vale decided to only perform critical maintenance activities in Sossego's SAG mill in 2Q21. This has allowed the deferral of a major portion of the SAG mill maintenance to 2022. Valid expects production improvements as of 2H21. Also, movement at Salobo mine is improving with increased availability of equipment as well as the ramp-up of the mine maintenance workshop continues. Total mine movement at Salobo has increased 31.2% in Q2 compared to Q1, achiever 8.4 Mt in June. Improvement in mine movement is expected to continue in Q3.

Given uncertainties concerning the labor situation in Ontario and the ramp-up of the safety and maintenance process implementation in Sossego and Salobo, our guidance for nickel and copper for the year is under review .

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