As filed with the Securities and Exchange Commission on April 10, 2017

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 20-F
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: December 31, 2016
Commission file number: 001-15030

VALE S.A.
(Exact name of Registrant as specified in its charter)
Federative Republic of Brazil
(Jurisdiction of incorporation or organization)
Luciano Siani Pires, Chief Financial Officer
phone: +55 21 3814 8888
fax: +55 21 3814 8820
Avenida das Américas, 700 – Bloco 8 – Loja 318
22640-100 Rio de Janeiro, RJ, Brazil
(Address of principal executive offices)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
Name of Each Exchange on
Title of Each Class Which Registered
Preferred class A shares of Vale, no par value per share New York Stock Exchange*
American Depositary Shares (evidenced by American Depositary Receipts), each New York Stock Exchange
representing one preferred class A share of Vale
Common shares of Vale, no par value per share New York Stock Exchange*
American Depositary Shares (evidenced by American Depositary Receipts), each New York Stock Exchange
representing one common share of Vale
5.625% Guaranteed Notes due 2019, issued by Vale Overseas New York Stock Exchange
4.625% Guaranteed Notes due 2020, issued by Vale Overseas New York Stock Exchange
5.875% Guaranteed Notes due 2021, issued by Vale Overseas New York Stock Exchange
4.375% Guaranteed Notes due 2022, issued by Vale Overseas New York Stock Exchange
6.250% Guaranteed Notes due 2026, issued by Vale Overseas New York Stock Exchange
8.250% Guaranteed Notes due 2034, issued by Vale Overseas New York Stock Exchange
6.875% Guaranteed Notes due 2036, issued by Vale Overseas New York Stock Exchange
6.875% Guaranteed Notes due 2039, issued by Vale Overseas New York Stock Exchange
5.625% Notes due 2042, issued by Vale S.A. New York Stock Exchange

* Shares are not listed for trading, but only in connection with the registration of American Depositary Shares pursuant to the
requirements of the New York Stock Exchange.
Securities registered or to be registered pursuant to Section 12(g) of the Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None
The number of outstanding shares of each class of stock of Vale as of December 31, 2016 was:
3,185,653,000 common shares, no par value per share
1,967,721,914 preferred class A shares, no par value per share
12 golden shares, no par value per share
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes
No 
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934.
Yes  No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports)
and (2) has been subject to such filing requirements for the past 90 days.
Yes
No 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding
12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes
No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of
‘‘accelerated filer’’ and ‘‘large accelerated filer’’ in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
Accelerated filer  Non-accelerated filer 
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP  International Financial Reporting Standards as issued by the International Accounting Standards Board
Other 
If ‘‘Other’’ has been checked in response to the previous question, indicate by check mark which financial statement item the registrant
has elected to follow.
Item 17  Item 18 
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).
Yes  No

 TABLE OF CONTENTS

Page Page
Form 20-F cross reference guide . . . . . . . ii III. Share ownership and trading
Forward-looking statements . . . . . . . . . . iv Major shareholders . . . . . . . . . . . . . . . . 109
Risk factors . . . . . . . . . . . . . . . . . . . . . 1 Related party transactions . . . . . . . . . . . 116
Selected financial data . . . . . . . . . . . . . . 15 Distributions . . . . . . . . . . . . . . . . . . . . 118
Trading markets . . . . . . . . . . . . . . . . . . 119
I. Information on the company Share price history . . . . . . . . . . . . . . . . 120
Business overview . . . . . . . . . . . . . . . . . 17 Depositary shares . . . . . . . . . . . . . . . . . 120
Lines of business . . . . . . . . . . . . . . . . . 27 Purchases of equity securities by the issuer
1. Ferrous minerals . . . . . . . . . . . 29 and affiliated purchasers . . . . . . . . . 121
2. Base metals . . . . . . . . . . . . . . . 39
3. Coal . . . . . . . . . . . . . . . . . . . . 52 IV. Management and employees
4. Infrastructure . . . . . . . . . . . . . . 54 Management . . . . . . . . . . . . . . . . . . . . 122
5. Other investments . . . . . . . . . . 61 Management compensation . . . . . . . . . . 133
Reserves . . . . . . . . . . . . . . . . . . . . . . . 62 Employees . . . . . . . . . . . . . . . . . . . . . . 135
Capital expenditures . . . . . . . . . . . . . . . 71
Regulatory matters . . . . . . . . . . . . . . . . 73 V. Additional information
Discontinued operations . . . . . . . . . . . . . 78 Legal proceedings . . . . . . . . . . . . . . . . . 136
Memorandum and articles of association . 144
II. Operating and financial review and Shareholder debentures . . . . . . . . . . . . . 151
prospects Exchange controls and other limitations
Overview . . . . . . . . . . . . . . . . . . . . . . . 81 affecting security holders . . . . . . . . . 152
Results of operations . . . . . . . . . . . . . . . 87 Taxation . . . . . . . . . . . . . . . . . . . . . . . 154
Liquidity and capital resources . . . . . . . . 100 Evaluation of disclosure controls and
Contractual obligations . . . . . . . . . . . . . 103 procedures . . . . . . . . . . . . . . . . . . . 161
Off-balance sheet arrangements . . . . . . . 103 Management’s report on internal control
Critical accounting policies and estimates . 103 over financial reporting . . . . . . . . . . 161
Risk management . . . . . . . . . . . . . . . . . 107 Corporate governance . . . . . . . . . . . . . . 162
Code of ethics and conduct . . . . . . . . . . 164
Principal accountant fees and services . . . 165
Information filed with securities regulators . 166
Exhibits . . . . . . . . . . . . . . . . . . . . . . . . 167
Glossary . . . . . . . . . . . . . . . . . . . . . . . 168
Signatures . . . . . . . . . . . . . . . . . . . . . . 173

Index to consolidated financial statements . . F-1

i
 FORM 20-F CROSS REFERENCE GUIDE

Item Form 20-F caption Location in this report Page

1 Identity of directors, senior management
and advisers . . . . . . . . . . . . . . . . . . Not applicable . . . . . . . . . . . . . . . . . . . –
2 Offer statistics and expected timetable . . . . Not applicable . . . . . . . . . . . . . . . . . . . –
3 Key information
3A Selected financial data . . . . . . . . . . . . Selected financial data . . . . . . . . . . . . . . 15
3B Capitalization and indebtedness . . . . . . Not applicable . . . . . . . . . . . . . . . . . . . –
3C Reasons for the offer and use of
proceeds . . . . . . . . . . . . . . . . . . . . Not applicable . . . . . . . . . . . . . . . . . . . –
3D Risk factors . . . . . . . . . . . . . . . . . . . Risk factors . . . . . . . . . . . . . . . . . . . . . 1
4 Information on the Company . . . . . . . . . .
4A History and development of the
company . . . . . . . . . . . . . . . . . . . . Business overview, Capital expenditures . . . 17, 71
4B Business overview . . . . . . . . . . . . . . . Business overview, Lines of business,
Reserves, Regulatory matters . . . . . . . . . 17, 27, 62, 73
4C Organizational structure . . . . . . . . . . . Exhibit 8 . . . . . . . . . . . . . . . . . . . . . . . –
4D Property, plant and equipment . . . . . . . Lines of business, Capital expenditures,
Regulatory matters . . . . . . . . . . . . . . . 27, 71, 73
4A Unresolved staff comments . . . . . . . . . . . None . . . . . . . . . . . . . . . . . . . . . . . . . –
5 Operating and financial review and
prospects
5A Operating results . . . . . . . . . . . . . . . Results of operations . . . . . . . . . . . . . . . 87
5B Liquidity and capital resources . . . . . . . Liquidity and capital resources . . . . . . . . . 100
5C Research and development, patents and
licenses, etc. . . . . . . . . . . . . . . . . . . Capital expenditures . . . . . . . . . . . . . . . 71
5D Trend information . . . . . . . . . . . . . . . Results of operations . . . . . . . . . . . . . . . 87
5E Off-balance sheet arrangements . . . . . . Off-balance sheet arrangements . . . . . . . . 103
Critical accounting policies and estimates . . 103
5F Tabular disclosure of contractual
obligations . . . . . . . . . . . . . . . . . . . Contractual obligations . . . . . . . . . . . . . . 103
5G Safe harbor . . . . . . . . . . . . . . . . . . . Forward-looking statements . . . . . . . . . . . iv
6 Directors, senior management and
employees –
6A Directors and senior management . . . . . Management . . . . . . . . . . . . . . . . . . . . 122
6B Compensation . . . . . . . . . . . . . . . . . Management compensation . . . . . . . . . . . 133
6C Board practices . . . . . . . . . . . . . . . . Management—Board of directors . . . . . . . 122
6D Employees . . . . . . . . . . . . . . . . . . . Employees . . . . . . . . . . . . . . . . . . . . . . 135
6E Share ownership . . . . . . . . . . . . . . . . Major shareholders, . . . . . . . . . . . . . . . .
Major shareholders,
Employees—Performance-based
compensation . . . . . . . . . . . . . . . . . . 109, 136
7 Major shareholders and related party
transactions
7A Major shareholders . . . . . . . . . . . . . . Major shareholders . . . . . . . . . . . . . . . . 109
7B Related party transactions . . . . . . . . . . Related party transactions . . . . . . . . . . . . 116
7C Interests of experts and counsel . . . . . . Not applicable . . . . . . . . . . . . . . . . . . . –
8 Financial information
8A Consolidated statements and other
financial information . . . . . . . . . . . . . Financial statements . . . . . . . . . . . . . . . . F-1
Distributions . . . . . . . . . . . . . . . . . . . . 118
Legal proceedings . . . . . . . . . . . . . . . . . 136
8B Significant changes . . . . . . . . . . . . . . Not applicable . . . . . . . . . . . . . . . . . . . –
9 The offer and listing
9A Offer and listing details . . . . . . . . . . . Share price history . . . . . . . . . . . . . . . . . 120
9B Plan of distribution . . . . . . . . . . . . . . Not applicable . . . . . . . . . . . . . . . . . . . –
9C Markets . . . . . . . . . . . . . . . . . . . . . Trading markets . . . . . . . . . . . . . . . . . . 119
9D Selling shareholders . . . . . . . . . . . . . Not applicable . . . . . . . . . . . . . . . . . . . –
9E Dilution . . . . . . . . . . . . . . . . . . . . . Not applicable . . . . . . . . . . . . . . . . . . . –
9F Expenses of the issue . . . . . . . . . . . . . Not applicable . . . . . . . . . . . . . . . . . . . –

ii
Item Form 20-F caption Location in this report Page
10 Additional information
10A Share capital . . . . . . . . . . . . . . . . . Memorandum and articles
of association—Common shares and
preferred shares . . . . . . . . . . . . . . . . . 144
10B Memorandum and articles of
association . . . . . . . . . . . . . . . . . . . Memorandum and articles of association . . . 144
10C Material contracts . . . . . . . . . . . . . . Lines of business, Results of operations,
Related party transactions . . . . . . . . . . 27, 87, 116
10D Exchange controls . . . . . . . . . . . . . . Exchange controls and other limitations
affecting security holders . . . . . . . . . . . 152
10E Taxation . . . . . . . . . . . . . . . . . . . . Taxation . . . . . . . . . . . . . . . . . . . . . . . 154
10F Dividends and paying agents . . . . . . . Not applicable . . . . . . . . . . . . . . . . . . . –
10G Statement by experts . . . . . . . . . . . . Reserves . . . . . . . . . . . . . . . . . . . . . . . 62
10H Documents on display . . . . . . . . . . . Information filed with securities
regulators . . . . . . . . . . . . . . . . . . . . . 166
10I Subsidiary information . . . . . . . . . . . . Not applicable . . . . . . . . . . . . . . . . . . . –
11 Quantitative and qualitative disclosures
about market risk . . . . . . . . . . . . . . Risk management . . . . . . . . . . . . . . . . . 107
12 Description of securities other than equity
securities
12A Debt securities . . . . . . . . . . . . . . . . Not applicable . . . . . . . . . . . . . . . . . . . –
12B Warrants and rights . . . . . . . . . . . . . Not applicable . . . . . . . . . . . . . . . . . . . –
12C Other securities . . . . . . . . . . . . . . . Not applicable . . . . . . . . . . . . . . . . . . . –
12D American Depositary Shares . . . . . . . Depositary shares . . . . . . . . . . . . . . . . . 120
13 Defaults, dividend arrearages and
delinquencies . . . . . . . . . . . . . . . . . Not applicable . . . . . . . . . . . . . . . . . . . –
14 Material modifications to the rights of
security holders and use of proceeds . . . Not applicable . . . . . . . . . . . . . . . . . . . –
15 Controls and procedures . . . . . . . . . . . . . Evaluation of disclosure controls and
procedures . . . . . . . . . . . . . . . . . . . . 161
Management’s report on internal control
over financial reporting . . . . . . . . . . . . 161
16A Audit Committee financial expert . . . . . . . Management—Fiscal Council . . . . . . . . . . 130
16B Code of ethics . . . . . . . . . . . . . . . . . . . Code of ethics and conduct . . . . . . . . . . . 164
16C Principal accountant fees and services . . . . Principal accountant fees and services . . . . 165
16D Exemptions from the listing standards for
audit committees . . . . . . . . . . . . . . . Management—Fiscal Council; Corporate
governance . . . . . . . . . . . . . . . . . . . . 130, 162
16E Purchase of equity securities by the issuer
and affiliated purchasers . . . . . . . . . . Purchases of equity securities by the issuer
and affiliated purchasers . . . . . . . . . . . 121
16F Change in registrant’s certifying accountant Not applicable . . . . . . . . . . . . . . . . . . . –
16G Corporate governance . . . . . . . . . . . . . . Corporate governance . . . . . . . . . . . . . . 162
16H Mine safety disclosure . . . . . . . . . . . . . . Not applicable . . . . . . . . . . . . . . . . . . . –
17 Financial statements . . . . . . . . . . . . . . . Not applicable . . . . . . . . . . . . . . . . . . . –
18 Financial statements . . . . . . . . . . . . . . . Financial statements . . . . . . . . . . . . . . . . F-1
19 Exhibits . . . . . . . . . . . . . . . . . . . . . . . Exhibits . . . . . . . . . . . . . . . . . . . . . . . 167

iii
 FORWARD-LOOKING STATEMENTS
This annual report contains statements that may constitute forward-looking statements within the
meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Many of
those forward-looking statements can be identified by the use of forward-looking words such as ‘‘anticipate,’’
‘‘believe,’’ ‘‘could,’’ ‘‘expect,’’ ‘‘should,’’ ‘‘plan,’’ ‘‘intend,’’ ‘‘estimate’’ and ‘‘potential,’’ among others. Those
statements appear in a number of places and include statements regarding our intent, belief or current
expectations with respect to:
 our direction and future operation;
 the implementation of our principal operating strategies, including our potential participation in
acquisition, divestiture or joint venture transactions or other investment opportunities;
 the implementation of our financing strategy and capital expenditure plans;
 the exploration of mineral reserves and development of mining facilities;
 the depletion and exhaustion of mines and mineral reserves;
 trends in commodity prices, supply and demand for commodities;
 the future impact of competition and regulation;
 the payment of dividends or interest on shareholders’ equity;
 compliance with financial covenants;
 industry trends, including the direction of prices and expected levels of supply and demand;
 the outcome of the various regulatory, governmental and legal proceedings in which we are
involved;
 other factors or trends affecting our financial condition or results of operations; and
 the factors discussed under Risk factors.
We caution you that forward-looking statements are not guarantees of future performance and involve
risks and uncertainties. Actual results may differ materially from those in forward-looking statements as a
result of various factors. These risks and uncertainties include factors relating to (a) economic, political and
social issues in the countries in which we operate, (b) the global economy, (c) commodity prices, (d) financial
and capital markets, (e) the mining and metals businesses, which are cyclical in nature, and their dependence
upon global industrial production, which is also cyclical, (f) regulation and taxation, (g) operational incidents
or accidents, and (h) the high degree of global competition in the markets in which we operate. For
additional information on factors that could cause our actual results to differ from expectations reflected in
forward-looking statements, see Risk factors. Forward-looking statements speak only as of the date they are
made, and we do not undertake any obligation to update them in light of new information or future
developments. All forward-looking statements attributed to us or a person acting on our behalf are expressly
qualified in their entirety by this cautionary statement, and you should not place undue reliance on any
forward-looking statement.

Vale S.A. is a stock corporation, or sociedade por ações, that was organized on January 11, 1943 under the
laws of the Federative Republic of Brazil for an unlimited period of time. Its head office is located at Avenida das
Américas, 700 - bloco 8 - loja 318 - Barra da Tijuca, Rio de Janeiro, RJ, Brazil, and its telephone number is
55-21-3485-5000.
In this report, references to ‘‘Vale’’ are to Vale S.A. References to ‘‘we,’’ ‘‘us’’ or the ‘‘Company’’ are to Vale
and, except where the context otherwise requires, its consolidated subsidiaries. References to our ‘‘preferred shares’’
are to our preferred class A shares. References to our ‘‘ADSs’’ or ‘‘American Depositary Shares’’ include both our
common American Depositary Shares (our ‘‘common ADSs’’), each of which represents one common share of
Vale, and our preferred class A American Depositary Shares (our ‘‘preferred ADSs’’), each of which represents one
class A preferred share of Vale. American Depositary Shares are represented by American Depositary Receipts
(‘‘ADRs’’) issued by the depositary.
Unless otherwise specified, we use metric units.
References to ‘‘real,’’ ‘‘reais’’ or ‘‘R$’’ are to the official currency of Brazil, the real (singular) or reais
(plural). References to ‘‘U.S. dollars’’ or ‘‘US$’’ are to United States dollars. References to ‘‘A$’’ are to Australian
dollars. References to ‘‘B’’ are to Euros.

iv
 RISK FACTORS

External risks

Our business is exposed to the cyclicality of global economic activity and requires significant investments of
capital.

As a mining company, we are a supplier of industrial raw materials. Industrial production tends to be
the most cyclical and volatile component of global economic activity, which affects demand for minerals and
metals. At the same time, investment in mining requires a substantial amount of funds in order to replenish
reserves, expand and maintain production capacity, build infrastructure, preserve the environment and
minimize social impacts. Sensitivity to industrial production, together with the need for significant long-term
capital investments, are important sources of risk for our financial performance and growth prospects.

Adverse economic developments in China could have a negative impact on our revenues, cash flow and
profitability.

China has been the main driver of global demand for minerals and metals over the last few years. In
2016, Chinese demand represented 72% of global demand for seaborne iron ore, 52% of global demand for
nickel and 48% of global demand for copper. The percentage of our net operating revenues attributable to
sales to customers in China was 46.4% in 2016. Therefore, any contraction of China’s economic growth could
result in lower demand for our products, leading to lower revenues, cash flow and profitability. Poor
performance in the Chinese real estate sector, the largest consumer of carbon steel in China, would also
negatively impact our results.

Our business may be adversely affected by declines in demand for and prices of the products our customers
produce.

Demand for our iron ore, coal and nickel products depends on global demand for steel. Iron ore and
iron ore pellets, which together accounted for 71.5% of our 2016 net operating revenues, are used to produce
carbon steel. Nickel, which accounted for 11.1% of our 2016 net operating revenues, is used mainly to
produce stainless and alloy steels. Demand for steel depends heavily on global economic conditions, but it
also depends on a variety of regional and sectorial factors. The prices of different steels and the performance
of the global steel industry are highly cyclical and volatile, and these business cycles in the steel industry affect
demand and prices for our products. In addition, vertical backward integration of the steel and stainless steel
industries and the use of scrap could reduce the global seaborne trade of iron ore and primary nickel. The
demand for copper is affected by the demand for copper wire, and a sustained decline in the construction
industry could have a negative impact on our copper business.

The prices we charge, including prices for iron ore, nickel, copper and coal, are subject to volatility.

Global prices for metals are subject to significant fluctuations and are affected by many factors,
including actual and expected global macroeconomic and political conditions, levels of supply and demand,
the availability and cost of substitutes, inventory levels, technological developments, regulatory and
international trade matters, investments by commodity funds and others and actions of participants in the
commodity markets. Sustained low market prices for the products we sell may result in the suspension of
certain of our projects and operations, decrease in our mineral reserves, impairment of assets, and may
adversely affect our cash flows, financial position and results of operations.

1
 We are mostly affected by movements in iron ore prices. For example, a price reduction of US$1 per
dry metric ton unit (‘‘dmt’’) in the average iron ore price would have reduced our operating income for the
year ended December 31, 2016 by approximately US$325 million. Average iron ore prices significantly
changed in the last four years, from US$135 per dmt in 2013 to US$97 per dmt in 2014, US$55.5 per dmt in
2015 and US$58.5 per dmt in 2016, according to the average Platts IODEX (62% Fe CFR China). On
February 28, 2017 the year to date average Platts IODEX iron ore price was US$84.8 per dmt. In addition to
reduced demand for iron ore, an excess in supply has adversely affected our prices since 2014 and supply may
grow with the expected conclusion of certain iron ore projects in coming years.

World nickel prices were adversely affected by lower demand in the first half of 2016, but benefited
from increased demand, especially from the Chinese stainless steel sector, in the second half of 2016. Nickel
refining in China, primarily using imported nickel ores and related raw materials, increased significantly
between 2006 and 2015, with Chinese nickel pig iron production representing 19% of global nickel output.
Since 2014, Chinese nickel pig iron production has been adversely affected by export restrictions in
feed-producing countries, but the revocation or relaxation of export restrictions in feed producing countries,
such as Indonesia, may benefit the production of nickel pig iron in China, which may in turn adversely affect
global nickel prices. In January 2017, the Indonesian government issued a ministerial decree allowing for the
controlled recommencement of nickel ore exports from Indonesia. For additional information about the
average realized prices for the products we sell, see Operating and financial review and prospects—Overview—
Major factors affecting prices.

We may not be able to adjust production volume in a timely or cost-efficient manner in response to changes
in demand.

Lower utilization of capacity during periods of weak demand may expose us to higher unit production
costs since a significant portion of our cost structure is fixed in the short-term due to the high capital intensity
of mining operations. In addition, efforts to reduce costs during periods of weak demand could be limited by
labor regulations or previous labor or government agreements.

Conversely, during periods of high demand, our ability to rapidly increase production capacity is
limited, which could prevent us from meeting demand for our products. Moreover, we may be unable to
complete expansions and greenfield projects in time to take advantage of rising demand for iron ore, nickel or
other products. When demand exceeds our production capacity, we may meet excess customer demand by
purchasing iron ore, iron ore pellets or nickel from joint ventures or unrelated parties and reselling it, which
would increase our costs and narrow our operating margins. If we are unable to satisfy excess customer
demand in this way, we may lose customers. In addition, operating close to full capacity may expose us to
higher costs, including demurrage fees due to capacity restraints in our logistics systems.

Changes in exchange rates for the currencies in which we conduct operations could adversely affect our
financial condition and results of operations.

A substantial portion of our revenues and our debt is denominated in U.S. dollars, and given that our
functional currency is the Brazilian real, changes in exchange rates may result in (i) losses or gains on our net
U.S. dollar-denominated indebtedness and accounts receivable and (ii) fair value losses or gains on currency
derivatives we use to stabilize our cash flow in U.S. dollars. In 2016, we had foreign exchange gains of
US$3.3 billion, while in 2015 and 2014 we had foreign exchange losses of US$7.0 billion and US$2.1 billion,
respectively. In addition, changing values of the Brazilian real, the Canadian dollar, the Australian dollar, the
Indonesian rupiah and other currencies against the U.S. dollar affects our results since most of our costs of
goods sold is denominated in currencies other than the U.S. dollar, principally the real (55% in 2016) and the
Canadian dollar (12% in 2016), while our revenues are mostly U.S. dollar-denominated. We expect currency
fluctuations to continue to affect our financial income, expense and cash flow generation.

2
 Risk factors

Significant volatility in currency prices may also result in disruption of foreign exchange markets,
which could limit our ability to transfer or to convert certain currencies into U.S. dollars and other currencies
for the purpose of making timely payments of interest and principal on our indebtedness. The central banks
and governments of the countries in which we operate may institute restrictive exchange rate policies in the
future and impose taxes on foreign exchange transactions.

Financial risks

Lower cash flows, resulting from decreased prices of our products, have adversely affected our credit ratings
and the cost and availability of financing.

Lower prices of our products may adversely affect our future cash flows, credit ratings and our ability
to secure financing at attractive rates. It may also negatively affect our ability to fund our capital investments,
pay dividends and comply with the financial covenants in some of our long-term debt instruments.

Also, certain Canadian provinces where we operate require us to provide financial assurances, such as
letters of credit, surety bonds or cash collateral, to cover certain closure and remediation costs after we
conclude our operations. We may be required to increase the amount of these financial assurances if our
credit ratings are downgraded below certain levels. If we are unable to provide these financial assurances, we
would need to have discussions with the relevant jurisdictions about other options and ultimately it could
affect our ability to operate in these jurisdictions.

We may not be able to implement our strategy with respect to divestments and strategic partnerships.

In the past few years, we have entered into agreements to dispose of assets and to make strategic
partnerships, in order to optimize our business portfolio and implement our financing strategy and capital
expenditure plans. We may continue to seek opportunities for divestments and strategic partnerships in the
future. We are exposed to a number of risks in connection with these transactions, including imposition of
regulatory conditions, inability to satisfy conditions for completion or for receipt of additional payments, and
negative market reactions. If we are unable to complete our dispositions or strategic partnerships, particularly
the sale of our fertilizer business or our partnership in our coal assets in Mozambique, we may have to revise
our business and financing strategy and incur additional costs, which could in turn adversely affect our results
of operations, financial conditions or reputation.

Risks relating to legal proceedings and Samarco dam failure

We are involved in legal proceedings that could have a material adverse effect on our business in the event of
unfavorable outcomes.

We are involved in legal proceedings in which adverse parties have claimed substantial amounts,
including several legal proceedings and investigations relating to the failure of Samarco’s Fundão tailings dam.
Although we are vigorously contesting them, the outcomes of these proceedings are uncertain and may result
in obligations that could materially adversely affect our business and the value of the securities issued by Vale
and its subsidiaries. For additional information, see Additional information—Legal proceedings.

Our obligations and potential liabilities arising from the failure of a tailings dam owned by Samarco
Mineração S.A. (‘‘Samarco’’) in Minas Gerais could negatively impact our business, our financial conditions
and our reputation.

In November 2015, the Fundão tailings dam owned by Samarco failed, causing environmental damage
in the surrounding area. The failure of Samarco’s tailings dam has adversely affected and will continue to
affect our business, but the full impact is still uncertain and cannot be estimated. Below is a discussion of the
main effects of the dam failure on our business.

3
  Legal proceedings. We are involved in multiple legal proceedings and investigations relating to the
failure of the Fundão tailings dam, and other proceedings and investigations may arise in the
future. These proceedings include purported securities class actions in the United States against
us and some of our officers, a criminal proceeding in Brazil, public civil actions brought by
Brazilian authorities and multiple proceedings involving claims for significant amounts of damages
and remediation measures. Adverse results in these proceedings may adversely impact our
liquidity and our financial condition. See Additional information—Legal proceedings.

 Reparation obligations and other undertakings. In March 2016, Samarco and its shareholders, Vale
and BHP Billiton Brasil Ltda. (‘‘BHPB’’), a Brazilian subsidiary of BHP Billiton plc, entered into
a framework agreement (the ‘‘Framework Agreement’’) with certain governmental authorities,
pursuant to which Samarco, Vale and BHPB agreed to create a foundation to develop and
implement long-term remediation and compensation programs. Also, in January 2017, Samarco,
Vale and BHPB entered into preliminary agreements with the federal prosecution office (the
‘‘MPF’’) providing for, among other things, the appointment of experts selected by the MPF to
review and monitor the remediation programs provided under the Framework Agreement, the
provision of collateral to secure certain remediation obligations, and a timetable for negotiation
of a final agreement. See Business overview—Failure of Samarco’s tailings dam in Minas Gerais. As
Samarco is currently unable to resume its activities, we and BHPB have been funding the
foundation and also providing funds directly to Samarco, to preserve its operations and to support
certain remediation measures undertaken by Samarco. If Samarco is unable to resume operations
or to generate sufficient cash flows to fund the remediation measures required under these
agreements, we will be required to continue funding these remediation measures, which in turn
may adversely affect our financial conditions and results of operations.

 Risk of additional environmental damages. Samarco continues to reinforce and improve its dams to
contain the remaining tailings. Failure to contain the remaining tailings could cause additional
environmental damages, additional impacts on our operations, and additional claims, fines and
proceedings against Samarco and against us. Failure to contain the remaining tailings could also
impact the feasibility and timing for the restart of Samarco’s operations.

 Other impacts. We may encounter delays in the receipt of environmental operating license for
other tailings dams, and Brazilian authorities may impose more stringent conditions in connection
with the licensing process of our projects and operations. Also, as one of Samarco’s shareholders,
our reputation has been adversely affected by the failure of Samarco’s tailings dam.

Political, economic, social and regulatory risks

Political, economic and social conditions in the countries in which we have operations or projects could
adversely impact our business.

Our financial performance may be negatively affected by regulatory, political, economic and social
conditions in countries in which we have significant operations or projects. In many of these jurisdictions, we
are exposed to various risks such as political instability, bribery, extortion, corruption, robbery, sabotage,
kidnapping, civil strife, acts of war, guerilla activities, piracy in international shipping routes and terrorism.
These issues may adversely affect the economic and other conditions under which we operate in ways that
could have a materially negative effect on our business. As an example, sections of our Carajás railroad
(EFC) in the Brazilian state of Pará and other railways worldwide are subject to interruptions that can harm
our operations and adversely affect our business.

4
 Risk factors

Political and economic instability in Brazil could adversely impact our business and the market price of our
securities.

The Brazilian federal government’s economic policies may have important effects on Brazilian
companies, including us, and on market conditions and prices of securities of Brazilian companies. Our
financial condition and results of operations may be adversely affected by the following factors and the
Brazilian federal government’s response to these factors:

 exchange rate movements and volatility;

 inflation and high interest rates;

 financing of the current account deficit;

 liquidity of domestic capital and lending markets;

 tax policy;

 political instability resulting from allegations of corruption involving political parties, elected
officials or other public officials; and

 other political, diplomatic, social and economic developments in or affecting Brazil.

Historically, the country’s political situation has influenced the performance of the Brazilian economy,
and political crises have affected the confidence of investors and the general public, which resulted in
economic deceleration and heightened volatility in the securities issued abroad by Brazilian companies. In
August 2016, the Brazilian Congress approved the impeachment of the Brazilian president. Also, ongoing
corruption investigations have led to charges against public officials, members of several political parties and
directors and officers of many Brazilian companies. Political instability may aggravate economic uncertainties
in Brazil and increase volatility of securities of Brazilian issuers.

In 2015 and 2016, Brazil faced an economic recession, adverse fiscal developments and political
instability, which may continue in 2017. Brazilian GDP declined by 3.6% in 2016 and by 3.85% in 2015, while
unemployment increased to 11.5% in 2016 from 6.9% in 2015. Inflation, as reported by the consumer price
index (IPCA), was 6.29% in 2016, 10.67% in 2015 and 6.41% in 2014. The Brazilian Central Bank’s base
interest rate (SELIC) was 13.75% on December 31, 2016, 14.25% on December 31, 2015 and 11.75% on
December 31, 2014. Future economic, social and political developments in Brazil may impair our business,
financial condition or results of operations, or cause the market value of our securities to decline.

Disagreements with local communities in which we operate could adversely impact our business and
reputation.

Disputes with communities where we operate may arise from time to time. In some instances, our
operations and mineral reserves are located on or near lands owned or used by indigenous people or other
groups of stakeholders. Some of our mining and other operations are located in territories where title may be
subject to disputes or uncertainties, or in areas claimed for agriculture or land reform purposes, which may
lead to disagreements with landowners, organized social movements, local communities and the government.
We may be required to consult and negotiate with these groups as part of the process to obtain licenses
required to operate, to mitigate impact on our operations or to obtain access to their lands.

Disagreements or disputes with local groups, including indigenous groups, organized social movements
and local communities, could cause delays or interruptions to our operations, adversely affect our reputation
or otherwise hamper our ability to develop our reserves and conduct our operations. Protesters have taken
actions to disrupt our operations and projects, and they may continue to do so in the future, which may harm
our operations and could adversely affect our business.

5
 We could be adversely affected by changes in government policies or by trends such as resource nationalism,
including the imposition of new taxes or royalties on mining activities.

Mining is subject to government regulation, including taxes and royalties, which can have a significant
financial impact on our operations. In the countries where we are present, we are subject to potential
renegotiation, nullification or forced modification of existing contracts and licenses, expropriation or
nationalization of property, foreign exchange controls, changes in local laws and regulations and policies. We
are also subject to new taxes or raising of existing taxes and royalty rates, reduction of tax exemptions and
benefits, renegotiation of tax stabilization agreements or changes on the basis on which taxes are calculated in
a manner that is unfavorable to us. Governments that have committed to provide a stable taxation or
regulatory environment may alter those commitments or shorten their duration. We also face the risk of
having to submit to the jurisdiction of a foreign court or arbitration panel or having to enforce a judgment
against a sovereign nation within its own territory.

We are also required to meet domestic beneficiation requirements in certain countries, such as local
processing rules, export taxes or restrictions or charges on unprocessed ores. The imposition of or increase in
such requirements, taxes or charges can significantly increase the risk profile and costs of operations in those
jurisdictions. We and the mining industry are subject to rising trends of resource nationalism in certain
countries in which we operate that can result in constraints on our operations, increased taxation or even
expropriations and nationalizations.

Concessions, authorizations, licenses and permits are subject to expiration, limitation on renewal and various
other risks and uncertainties.

Our operations depend on authorizations and concessions from governmental regulatory agencies in
the countries in which we operate. We are subject to laws and regulations in many jurisdictions that can
change at any time, and changes in laws and regulations may require modifications to our technologies and
operations and result in unanticipated capital expenditures.

Some of our mining concessions are subject to fixed expiration dates and might only be renewed a
limited number of times for a limited period of time. Apart from mining concessions, we may need to obtain
various authorizations, licenses and permits from governmental or other regulatory bodies in connection with
the planning, maintenance, operation and closure of our mines and related logistics infrastructure, which may
be subject to fixed expiration dates or periodic review or renewal. There is no assurance that renewals will be
granted as and when sought, and there is no assurance that new conditions will not be imposed in connection
with renewal. Fees for mining concessions might increase substantially due to the passage of time from the
original issuance of each individual exploration license. If so, the costs of holding or renewing our mining
concessions may render our business objectives not viable. Accordingly, we need to continually assess the
mineral potential of each mining concession, particularly at the time of renewal, to determine if the costs of
maintaining the concession are justified by the results of operations to date, and we might elect to let some of
our concessions lapse. There can be no assurance that concessions will be obtained on terms favorable to us,
or at all, for our future intended mining or exploration targets.

In a number of jurisdictions where we have exploration projects, we may be required to retrocede to

the state a certain portion of the area covered by the exploration license as a condition to renewing the
license or obtaining a mining concession. This requirement can lead to a substantial loss of part of the
mineral deposit originally identified in our feasibility studies. For more information on mining concessions and
other similar rights, see Information on the Company—Regulatory matters.

6
 Risk factors

Operational risks

Our projects are subject to risks that may result in increased costs or delay in their implementation

We are investing to maintain and further increase our production capacity and logistics capabilities.
We regularly review the economic viability of our projects. As a result of this review, we may decide to
postpone, suspend or interrupt the implementation of certain projects. Our projects are also subject to a
number of risks that may adversely affect our growth prospects and profitability, including the following:

 We may not be able to obtain financing at attractive rates.

 We may encounter delays or higher than expected costs in obtaining the necessary equipment or
services and in implementing new technologies to build and operate a project.

 Our efforts to develop projects on schedule may be hampered by a lack of infrastructure,

including reliable telecommunications services and power supply.

 Suppliers and contractors may fail to meet their contractual obligations to us.

 We may face unexpected weather conditions or other force majeure events.

 We may fail to obtain or renew the required permits and licenses to build a project, or we may
experience delays or higher than expected costs in obtaining or renewing them.

 Changes in market conditions or regulations may make a project less profitable than expected at
the time we initiated work on it.

 There may be accidents or incidents during project implementation.

 We may face shortages of skilled personnel.

Operational problems could materially and adversely affect our business and financial performance.

Ineffective project management and operational breakdowns might require us to suspend or curtail
operations, which could generally reduce our productivity. Operational breakdowns could entail failure of
critical plant and machinery. There can be no assurance that ineffective project management or other
operational problems will not occur. Any damages to our projects or delays in our operations caused by
ineffective project management or operational breakdowns could materially and adversely affect our business
and results of operations. Our business is subject to a number of operational risks that may adversely affect
our results of operations, such as:

 Unexpected weather conditions or other force majeure events.

 Adverse mining conditions delaying or hampering our ability to produce the expected quantity of
minerals and to meet specifications required by customers, which can trigger price adjustments.

 Accidents or incidents involving our mines, industrial facilities and related infrastructure, such as
dams, plants, railway and railway bridges, ports and ships.

 Delays or interruptions in the transportation of our products, including with railroads, ports and
ships.

 Tropical diseases, HIV/AIDS and other contagious diseases in regions where some of our
operations or projects are located, which pose health and safety risks to our employees.

 Labor disputes that may disrupt our operations from time to time.

7
  Changes in market conditions or regulations may affect the economic prospects of an operation
and make it inconsistent with our business strategy.

 Failure to obtain the renewal of required permits and licenses, or delays or higher than expected
costs in obtaining them.

 Disruptions to or unavailability of critical information technology systems or services resulting

from accidents or malicious acts.

Our business could be adversely affected by the failure of our counterparties to perform their obligations.

Customers, suppliers, contractors, financial institutions, joint venture partners and other counterparties
may fail to perform existing contracts and obligations, which may unfavorably impact our operations and
financial results. The ability of suppliers and customers to perform their obligations may be adversely affected
in times of financial stress and economic downturn.

We currently operate important parts of our iron ore, pelletizing, nickel, coal, copper, fertilizers,
bauxite and steel businesses through joint ventures. Important parts of our electricity investments and projects
are operated through consortia or joint ventures. Our forecasts and plans for these joint ventures and
consortia assume that our partners will observe their obligations to make capital contributions, purchase
products and, in some cases, provide skilled and competent managerial personnel. If any of our partners fails
to observe its commitments, the affected joint venture or consortium may not be able to operate in
accordance with its business plans, or we may have to increase the level of our investment to implement these
plans.

Some of our investments are controlled by partners or have separate and independent management.
These investments may not fully comply with our standards, controls and procedures, including our health,
safety, environment and community standards. Failure by any of our partners or joint ventures to adopt
adequate standards, controls and procedures could lead to higher costs, reduced production or environmental,
health and safety incidents or accidents, which could adversely affect our results and reputation.

We may not have adequate insurance coverage for some business risks.

Our businesses are generally subject to a number of risks and hazards, which could result in damage
to, or destruction of, properties, facilities and equipment. The insurance we maintain against risks that are
typical in our business may not provide adequate coverage. Insurance against some risks (including liabilities
for environmental pollution or certain hazards or interruption of certain business activities) may not be
available at a reasonable cost, or at all. Even when it is available, we may self-insure where we determine that
is more cost-effective to do so. As a result, accidents or other negative developments involving our mining,
production or transportation facilities could have a material adverse effect on our operations.

Labor disputes may disrupt our operations from time to time.

A substantial number of our employees, and some of the employees of our subcontractors, are
represented by labor unions and are covered by collective bargaining or other labor agreements, which are
subject to periodic negotiation. Strikes and other labor disruptions at any of our operations could adversely
affect the operation of facilities and the timing of completion and cost of our capital projects. For more
information about labor relations, see Management and employees—Employees. Moreover, we could be
adversely affected by labor disruptions involving unrelated parties that may provide us with goods or services.

Higher energy costs or energy shortages would adversely affect our business.

Costs of fuel oil, gas and electricity are a significant component of our cost of production,
representing 10.9% of our total cost of goods sold in 2016. To fulfill our energy needs, we depend on the
following sources: oil byproducts, which represented 36% of total energy needs in 2016, electricity (32%),
natural gas (15%), coal (15%) and other energy sources (2%).

8
 Risk factors

Electricity costs represented 3.9% of our total cost of goods sold in 2016. If we are unable to secure
reliable access to electricity at acceptable prices, we may be forced to curtail production or may experience
higher production costs, either of which would adversely affect our results of operations. We face the risk of
energy shortages in the countries where we have operations and projects, especially Brazil, due to lack of
infrastructure or weather conditions, such as floods or droughts. Future shortages, and government efforts to
respond to or prevent shortages, may adversely impact the cost or supply of electricity for our operations.

Failures in our information technology systems or difficulties in integrating new enterprise resource planning
software may interfere with the normal functioning of our business.

We rely on information technology (‘‘IT’’) systems for the operation of many of our business
processes. Failures in our IT systems, whether caused by accident or malicious acts, may result in the
disclosure or theft of sensible information, misappropriation of funds and disruptions to our business
operations.

Health, safety and environmental risks

Our business is subject to environmental, health and safety incidents.

Our operations involve the use, handling, storage, discharge and disposal of hazardous substances into
the environment and the use of natural resources, and the mining industry is generally subject to significant
risks and hazards, including fire, explosion, toxic gas leaks, spilling of polluting substances or other hazardous
materials, rockfalls, incidents involving dams, failure of other operational structures and incidents involving
mobile equipment, vehicles or machinery. This could occur by accident or by breach of operating and
maintenance standards, and could result in a significant environmental and social impacts, damage to or
destruction of mineral properties or production facilities, personal injury, illness or death of employees,
contractors or community members close to operations, environmental damage, delays in production,
monetary losses and possible legal liability. Additionally, in remote localities, our employees may be exposed
to tropical and contagious diseases that may affect their health and safety. Notwithstanding our standards,
policies and controls, our operations remain subject to incidents or accidents that could adversely affect our
business, stakeholders or reputation.

Our business may be adversely affected by environmental and health and safety regulation, including
regulations pertaining to climate change.

Nearly all aspects of our activities, products, services and projects around the world are subject to
environmental regulations and health and safety regulations, which may expose us to increased liability or
increased costs. These regulations require us to have environmental licenses, permits and authorizations for
our operations and projects, and to conduct environmental and social impact assessments in order to get
approval for our projects and permission for initiating construction. Significant changes to existing operations
are also subject to these requirements. Difficulties in obtaining or renewing permits may lead to construction
delays, cost increases, and may adversely impact our production volumes. Environmental and health and
safety regulations also impose standards and controls on activities relating to mineral research, mining,
pelletizing activities, railway and marine services, ports, decommissioning, refining, distribution and marketing
of our products. Such regulation may give rise to significant costs and liabilities. Litigation relating to these or
other matters may adversely affect our financial condition or cause harm to our reputation.

9
 Environmental and health and safety regulation in many countries in which we operate has become
stricter in recent years, and it is possible that more regulation or more aggressive enforcement of existing
regulations will adversely affect us by imposing restrictions on our activities and products, creating new
requirements for the issuance or renewal of environmental licenses, raising our costs or requiring us to engage
in expensive reclamation efforts. For example, changes in Brazilian legislation for the protection of caves have
required us to conduct extensive technical studies and to negotiate compensatory measures with Brazilian
environmental regulators in order to continue to operate in certain sites. It is possible that in certain of our
iron ore mining operations or projects, we may be required to limit or modify our mining plans or to incur
additional costs to preserve caves or to compensate for the impact on them, with potential consequences for
production volumes, costs or reserves in our iron ore business. For more information about Brazilian
environmental regulations related to caves, see Information on the Company—Regulatory matters—
Environmental regulations.

In response to the failure of Samarco’s tailings dam in Minas Gerais, additional environmental and
health and safety laws and regulations may be forthcoming in Brazil and authorities may impose more
stringent conditions in connection with the licensing process of our projects and operations. Also, we may
encounter delays in the receipt of environmental operating license for other tailings dams.

National policies and international regulations regarding climate change may affect a number of our
businesses in various countries. The ratification of the Paris Agreement in 2016 increased international
pressure for the establishment of a global carbon price, and on companies to adopt carbon pricing strategies.
The pricing of greenhouse gas emissions may impact our operational costs, mainly through higher price for
fossil fuels as mining is an energy intensive industry. Consumption of coal, one of the products we sell, in
particular, is facing pressure from international institutions due to its carbon intensity.

Regulatory initiatives at the national and international levels that affect our shipping practices could
increase our costs or require us to make new capital expenditures.

Natural disasters may cause severe damage to our operations and projects in the countries where we operate
and may have a negative impact on our sales to countries affected by such disasters.

Natural disasters, such as wind storms, droughts, floods, earthquakes and tsunamis may adversely
affect our operations and projects in the countries where we operate, and may cause a contraction in sales to
countries adversely affected due to, among other factors, power outages and the destruction of industrial
facilities and infrastructure. The physical impact of climate change on our business remains uncertain, but we
are likely to experience changes in rainfall patterns, increased temperatures, water shortages, rising sea levels,
increased storm frequency and intensity as a result of climate change, which may adversely affect our
operations. On some occasions in recent years, we have determined that force majeure events have occurred
due to effect of severe weather on our mining and logistics activities.

10
 Risk factors

Risks relating to our mining reserves

Our reserve estimates may materially differ from mineral quantities that we are actually able to recover; our
estimates of mine life may prove inaccurate; and market price fluctuations and changes in operating and
capital costs may render certain ore reserves uneconomical to mine.

Our reported reserves are estimated quantities of ore and minerals that we have determined can be
economically mined and processed under present and assumed future conditions. There are numerous
uncertainties inherent in estimating quantities of reserves and in projecting potential future rates of mineral
production, including factors beyond our control. Reserve reporting involves estimating deposits of minerals
that cannot be measured in an exact manner, and the accuracy of any reserve estimate is a function of the
quality of available data, engineering and geological interpretation and judgment. As a result, no assurance
can be given that the indicated amount of ore will be recovered or that it will be recovered at the rates we
anticipate. Reserve estimates and estimates of mine life may require revisions based on actual production
experience, projects, updated exploration drilling data and other factors. For example, lower market prices of
minerals and metals, reduced recovery rates or increased operating and capital costs due to inflation,
exchange rates, changes in regulatory requirements or other factors may render proven and probable reserves
uneconomic to exploit and may ultimately result in a reduction of reserves. Such a reduction could affect
depreciation and amortization rates and have an adverse effect on our financial performance.

We may not be able to replenish our reserves, which could adversely affect our mining prospects.

We engage in mineral exploration, which is highly uncertain in nature, involves many risks and
frequently is non-productive. Our exploration programs, which involve significant expenditures, may fail to
result in the expansion or replacement of reserves depleted by current production. If we do not develop new
reserves, we will not be able to sustain our current level of production beyond the remaining lives of our
existing mines.

The feasibility of new mineral projects may change over time.

Once mineral deposits are discovered, it can take a number of years from the initial phases of drilling
until production is possible, during which the economic feasibility of production may change. Substantial time
and expenditures are required to:

 establish mineral reserves through drilling;

 determine appropriate mining and metallurgical processes for optimizing the recovery of metal
contained in ore;

 obtain environmental and other licenses;

 construct mining, processing facilities and infrastructure required for greenfield properties; and

 obtain the ore or extract the minerals from the ore.

If a project proves not to be economically feasible by the time we are able to exploit it, we may incur
substantial losses and be obliged to take write-downs. In addition, potential changes or complications
involving metallurgical and other technological processes arising during the life of a project may result in
delays and cost overruns that may render the project not economically feasible.

11
 We face rising extraction costs or investment requirements over time as reserves deplete.

Reserves are gradually depleted in the ordinary course of a given open pit or underground mining
operation. As mining progresses, distances to the primary crusher and to waste deposits become longer, pits
become steeper, mines may move from being open pit to underground, and underground operations become
deeper. In addition, for some types of reserves, mineralization grade decreases and hardness increases at
greater depths. As a result, over time, we usually experience rising unit extraction costs with respect to each
mine, or we may need to make additional investments, including adaptation or construction of processing
plants and expansion or construction of tailings dams. Several of our mines have been operating for long
periods, and we will likely experience rising extraction costs per unit in the future at these operations in
particular.

Risks relating to our corporate structure

Our controlling shareholder has significant influence over Vale and the Brazilian Government has certain
veto rights.

As of March 31, 2017, Valepar S.A. (‘‘Valepar’’) owned 53.9% of our outstanding common stock and
33.7% of our total outstanding capital. As a result of its share ownership, Valepar can elect the majority of
our board of directors and control the outcome of some actions that require shareholder approval. The
shareholders of Valepar are party to a shareholders’ agreement that governs Valepar’s actions in its capacity
as a shareholder of Vale. The existing shareholders’ agreement will expire on May 9, 2017, and certain
Valepar shareholders have entered into a new shareholders’ agreement that will become effective on May 10,
2017, for a period of six months or until the merger of Valepar into Vale. The new shareholders’ agreement
contemplates a proposal to change our governance structure and the execution of a shareholders’ agreement
at the Vale level, binding with respect to 20% of our common shares, which will continue to give significant
influence to these shareholders. For a description of our ownership structure and of the shareholders’
agreements, see Share ownership and trading—Major shareholders.

The Brazilian government owns 12 golden shares of Vale, granting it limited veto power over certain
company actions, such as changes to our name, the location of our headquarters and our corporate purpose
as it relates to mining activities. For a detailed description of the Brazilian government’s veto powers, see
Additional information—Memorandum and articles of association—Common shares and preferred shares.

The implementation of a change in our capital structure and governance, and any potential benefits, are
subject to uncertainty and may not lead to the benefits that we expect.

Pursuant to the new shareholder’s agreement of Valepar, which will become effective on May 10,
2017, Valepar is expected to submit a proposal to simplify our shareholding structure and corporate
governance, with the purpose of eventually enabling Vale to be listed on BM&FBOVESPA’s Novo Mercado
special segment and making Vale a company without defined control. For a description of our ownership
structure and the proposed changes to the Valepar shareholders’ agreements pursuant to the Proposal, see
Share ownership and trading—Major shareholders.

The implementation of the proposal to simplify our shareholding structure is subject to, among other
requirements, (i) the approval of the proposal, including the merger of Valepar into Vale, by our shareholders
and the executive officers and board of directors of Vale and Valepar, and (ii) the acceptance by at least
54.09% of class A preferred shares of the voluntary conversion into common shares, within 45 days from the
shareholders’ meeting decision on the matter. We cannot predict how long it will take to implement all the
necessary steps or whether they will be successfully implemented at all. Finally, we cannot predict whether or
when we will migrate to the Novo Mercado segment of the BM&FBOVESPA, as the listing is subject to
conversion of all of our preferred shares into common shares.

12
 Risk factors

The uncertainty in the timing and effective implementation may delay or limit our ability to achieve
certain benefits that might derive from the simplified corporate ownership structure and eventual migration to
the Novo Mercado, such as increased liquidity for shareholders. We cannot guarantee that these benefits will
be fully realized, and any failure to achieve those benefits may affect the value of our shares and ADSs.

Our governance and compliance processes may fail to prevent regulatory penalties and reputational harm.

We operate in a global environment, and our activities extend over multiple jurisdictions and complex
regulatory frameworks with increased enforcement activities worldwide. Our governance and compliance
processes, which include the review of internal control over financial reporting, may not prevent future
breaches of legal, accounting or governance standards. We may be subject to breaches of our Code of Ethics
and Conduct, anti-corruption policies and business conduct protocols and to instances of fraudulent behavior,
corrupt practices and dishonesty by our employees, contractors or other agents. Our failure to comply with
applicable laws and other standards could subject us to fines, loss of operating licenses and reputational harm.

It could be difficult for investors to enforce any judgment obtained outside Brazil against us or any of our
associates.

Our investors may be located in jurisdictions outside Brazil and could seek to bring actions against us
or our directors or officers in the courts of their home jurisdictions. We are a Brazilian company, and the
majority of our officers and directors are residents of Brazil. The vast majority of our assets and the assets of
our officers and directors are likely to be located in jurisdictions other than the home jurisdictions of our
foreign investors. It might not be possible for investors outside Brazil to effect service of process within their
home jurisdictions on us or on our officers or directors who reside outside their home jurisdictions. In
addition, a final conclusive foreign judgment will be enforceable in the courts of Brazil without a
re-examination of the merits only if previously confirmed by the Brazilian Superior Court of Justice (STJ—
Superior Tribunal de Justiça), and confirmation will only be granted if the foreign judgment: (a) fulfills all
formalities required for its enforceability under the laws of the country where it was issued; (b) was issued by
a competent court after due service of process on the defendant, as required under applicable law; (c) is not
subject to appeal; (d) does not conflict with a final and unappealable decision issued by a Brazilian court;
(e) was authenticated by a Brazilian consulate in the country in which it was issued or is duly apostilled in
accordance with the Convention for Abolishing the Requirement of Legalization for Foreign Public
Documents and is accompanied by a sworn translation into Portuguese, unless this procedure was exempted
by an international treaty entered into by Brazil; (f) it does not cover matters subject to the exclusive
jurisdiction of the Brazilian courts; and (g) is not contrary to Brazilian national sovereignty, public policy or
good morals. Therefore, investors might not be able to recover against us or our directors and officers on
judgments of the courts of their home jurisdictions predicated upon the laws of such jurisdictions.

Risks relating to our depositary shares

If ADR holders exchange ADSs for the underlying shares, they risk losing the ability to remit foreign
currency abroad.

The custodian for the shares underlying our ADSs maintains a registration with the Central Bank of
Brazil entitling it to remit U.S. dollars outside Brazil for payments of dividends and other distributions
relating to the shares underlying our ADSs or upon the disposition of the underlying shares. If an ADR
holder exchanges its ADSs for the underlying shares, it will be entitled to rely on the custodian’s registration
for only five business days from the date of exchange. Thereafter, an ADR holder may not be able to obtain
and remit foreign currency abroad upon the disposition of, or distributions relating to, the underlying shares
unless it obtains its own registration under applicable regulation, which permits qualifying institutional foreign
investors to buy and sell securities on the BM&FBOVESPA. For more information regarding these exchange
controls, see Additional information—Exchange controls and other limitations affecting security holders. If an
ADR holder attempts to obtain its own registration, it may incur expenses or suffer delays in the application
process, which could delay the receipt of dividends or other distributions relating to the underlying shares or
the return of capital in a timely manner.

13
 The custodian’s registration or any registration obtained could be affected by future legislative
changes, and additional restrictions applicable to ADR holders, the disposition of the underlying shares or the
repatriation of the proceeds from disposition could be imposed in the future.

ADR holders may be unable to exercise preemptive rights relating to the shares underlying their ADSs.

The ability of ADR holders to exercise preemptive rights is not assured, particularly if the applicable
law in the holder’s jurisdiction (for example, the Securities Act in the United States) requires that either a
registration statement be effective or an exemption from registration be available with respect to those rights,
as is in the case in the United States. We are not obligated to extend the offer of preemptive rights to holders
of ADRs, to file a registration statement in the United States, or to make any other similar filing in any other
jurisdiction, relating to preemptive rights or to undertake steps that may be needed to make exemptions from
registration available, and we cannot assure holders that we will file any registration statement or take such
steps.

ADR holders may encounter difficulties in the exercise of voting rights.

ADR holders do not have the rights of shareholders. They have only the contractual rights set forth
for their benefit under the deposit agreements. ADR holders are not permitted to attend shareholders’
meetings, and they may only vote by providing instructions to the depositary. In practice, the ability of a
holder of ADRs to instruct the depositary as to voting will depend on the timing and procedures for
providing instructions to the depositary either directly or through the holder’s custodian and clearing system.
With respect to ADSs for which instructions are not received, the depositary may, subject to certain
limitations, grant a proxy to a person designated by us.

The legal protections for holders of our securities differ from one jurisdiction to another and may be
inconsistent, unfamiliar or less effective than investors anticipate.

We are a global company with securities traded in several different markets and investors located in
many different countries. The legal regime for the protection of investors varies around the world, sometimes
in important ways, and investors in our securities should recognize that the protections and remedies available
to them may be different from those to which they are accustomed in their home markets. We are subject to
securities legislation in several countries, which have different rules, supervision and enforcement practices.
The only corporate law applicable to our parent company is the law of Brazil, with its specific substantive
rules and judicial procedures. We are subject to corporate governance rules in several jurisdictions where our
securities are listed, but as a foreign private issuer, we are not required to follow many of the corporate
governance rules that apply to U.S. domestic issuers with securities listed on the New York Stock Exchange,
and we are not subject to the U.S. proxy rules.

14
 SELECTED FINANCIAL DATA
The tables below present selected consolidated financial information as of and for the periods
indicated. You should read this information together with our consolidated financial statements in this annual
report. The comparative information for 2012 to 2015 has been re-presented to report our fertilizers segment
as discontinued operations.
Consolidated statement of income data

For the year ended December 31,

2012 2013 2014 2015 2016
(US$ million)
Net operating revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42,983 43,953 35,124 23,384 27,488
Cost of goods sold and services rendered . . . . . . . . . . . . . . . . . . . . . (22,407) (21,668) (22,790) (18,751) (17,650)
Selling, general, administrative and other operating expenses, net . . . . . . . (1,954) (1,101) (2,059) (819) (774)
Research and evaluation expenses . . . . . . . . . . . . . . . . . . . . . . . . . (1,356) (748) (662) (395) (319)
Pre-operating and operational stoppage . . . . . . . . . . . . . . . . . . . . . . (3,495) (2,375) (975) (942) (453)
Impairment of non-current assets and onerous contracts . . . . . . . . . . . . (4,023) (182) (99) (8,769) (1,174)
Results on measurement or sales of non-current assets . . . . . . . . . . . . . (377) (215) (167) 61 (66)
Operating income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,371 17,664 8,372 (6,231) 7,052
Non-operating income (expenses):
Financial income (expenses), net . . . . . . . . . . . . . . . . . . . . . . . . . . (3,976) (8,314) (6,018) (10,654) 1,843
Equity results in associates and joint ventures . . . . . . . . . . . . . . . . . . 645 469 501 (445) 309
Impairment and other results in associates and joint ventures . . . . . . . . . (1,941) 14 (61) (349) (1,220)
Net income (loss) before income taxes . . . . . . . . . . . . . . . . . . . . . . 4,099 9,833 2,794 (17,679) 7,984
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (32) (6,889) (1,603) 5,249 (2,781)
Net income (loss) from continuing operations . . . . . . . . . . . . . . . . . . 4,067 2,944 1,191 (12,430) 5,203
Loss attributable to non-controlling interests . . . . . . . . . . . . . . . . . . . (311) (191) (308) (501) (8)
Net income (loss) from continuing operations attributable to Vale’s
stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,378 3,135 1,499 (11,929) 5,211
Net income (loss) from discontinued operations attributable to Vale’s
stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,076 (2,551) (842) (200) (1,229)
Net income (loss) attributable to Vale’s stockholders . . . . . . . . . . . . . . 5,454 584 657 (12,129) 3,982
Loss attributable to non-controlling interests . . . . . . . . . . . . . . . . . . . (257) (178) (304) (491) (6)
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,197 406 353 (12,620) 3,976
Total cash paid to stockholders(1) . . . . . . . . . . . . . . . . . . . . . . . . . 6,000 4,500 4,200 1,500 250

(1) Consists of total cash paid to stockholders during the period, whether classified as dividends or interest on stockholders’ equity.

Earnings (loss) per share

For the year ended December 31,
2012 2013 2014 2015 2016
(US$, except as noted)
Earnings (loss) per share from continuing operations:
Per common share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.86 0.61 0.29 (2.31) 1.01
Per preferred share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.86 0.61 0.29 (2.31) 1.01
Earnings (loss) per share from discontinued operations:
Per common share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.20 (0.50) (0.16) (0.04) (0.24)
Per preferred share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.20 (0.50) (0.16) (0.04) (0.24)
Earnings (loss) per share:
Per common share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.06 0.11 0.13 (2.35) 0.77
Per preferred share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.06 0.11 0.13 (2.35) 0.77
Weighted average number of shares outstanding (in thousands)(1):
Common shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,172,179 3,185,653 3,185,653 3,185,653 3,185,653
Preferred shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,933,491 1,967,722 1,967,722 1,967,722 1,967,722
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,105,670 5,153,375 5,153,375 5,153,375 5,153,375
Distributions to stockholders per share(2):
Expressed in US$ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.17 0.87 0.81 0.29 0.05
Expressed in R$ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.26 1.81 1.89 0.98 0.17

(1) Each common ADS represents one common share and each preferred ADS represents one preferred share.
(2) Our distributions to shareholders may be classified as either dividends or interest on shareholders’ equity. In many years, part of each
distribution has been classified as interest on shareholders’ equity and part has been classified as dividends. For information about
distributions paid to shareholders, see Share ownership and trading—Distributions.

15
Balance sheet data

As of December 31,
2012 2013 2014 2015 2016
(US$ million)
Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,069 20,611 16,594 11,429 13,978
Non-current assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . 457 3,766 3,640 4,044 8,589
Property, plant and equipment, net and intangible assets . . . . . . . . . . . . 94,093 88,536 84,942 59,426 62,290
Investments in associated companies and joint ventures . . . . . . . . . . . . . 6,384 3,584 4,133 2,940 3,696
Non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,574 8,100 7,180 10,653 10,461
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130,577 124,597 116,489 88,492 99,014

Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,402 9,164 10,626 10,438 10,142

Liabilities associated with non-current assets held for sale . . . . . . . . . . . 169 448 111 107 1,090
Long-term liabilities(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,380 22,379 22,043 15,896 19,096
Long-term debt(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,799 27,670 27,388 26,347 27,662
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55,750 59,661 60,168 52,788 57,990

Stockholders’ equity:
Capital stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,578 60,578 61,614 61,614 61,614
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (552) (552) (601) (854) (851)
Retained earnings and revenue reserves . . . . . . . . . . . . . . . . . . . . 13,213 3,299 (5,891) (27,171) (21,721)
Total Vale shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . 73,239 63,325 55,122 33,589 39,042
Non-controlling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,588 1,611 1,199 2,115 1,982
Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74,827 64,936 56,321 35,704 41,024
Total liabilities and stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . 130,577 124,597 116,489 88,492 99,014

(1) Excludes long-term debt.

(2) Excludes current portion of long-term debt.

16
I. INFORMATION ON THE COMPANY

BUSINESS OVERVIEW

Summary

We are one of the largest metals and mining companies in the world, based on market capitalization.
We are the world’s largest producer of iron ore and iron ore pellets and the world’s largest producer of
nickel. We also produce manganese ore, ferroalloys, metallurgical and thermal coal, copper, platinum group
metals (PGMs), gold, silver and cobalt. We are engaged in greenfield mineral exploration in six countries
around the globe. We operate large logistics systems in Brazil and other regions of the world, including
railroads, maritime terminals and ports, which are integrated with our mining operations. In addition, we have
a portfolio of maritime freight assets, floating transfer stations and distribution centers to support the delivery
of iron ore worldwide. Directly and through affiliates and joint ventures, we also have investments in energy
and steel businesses.

The following table presents the breakdown of total net operating revenues attributable to each of our
lines of business of continuing operations.

Year ended December 31,

2014 2015 2016
US$ million % of total US$ million % of total US$ million % of total
Ferrous minerals:
Iron ore . . . . . . . . . . . . . . . 19,301 55.0% 12,330 52.7% 15,784 57.4%
Pellets . . . . . . . . . . . . . . . . 5,263 15.0 3,600 15.4 3,827 13.9
Ferroalloys and manganese . . . . 392 1.1 162 0.7 302 1.1
Other ferrous products and
services . . . . . . . . . . . . . . 741 2.1 470 2.0 438 1.6
Subtotal . . . . . . . . . . . . . . 25,697 73.2 16,562 70.8 20,351 74.0
Coal . . . . . . . . . . . . . . . . . . . 739 2.1 526 2.3 839 3.1
Base metals: Nickel and other
products(1) . . . . . . . . . . . . . 6,241 17.8 4,693 20.1 4,472 16.3
Copper(2) . . . . . . . . . . . . . . 1,451 4.1 1,470 6.3 1,667 6.0
Subtotal . . . . . . . . . . . . . . 7,692 21.9 6,163 26.4 6,139 22.3
Other(3) . . . . . . . . . . . . . . . . 996 2.8 133 0.5 159 0.6
Total net operating revenues from
continuing operations . . . . . . . 35,124 100.0% 23,384 100.0% 27,488 100.0%

(1) Includes nickel coproducts (copper) and byproducts (precious metals, cobalt and others).
(2) Does not include copper produced in our nickel operations.
(3) Includes energy.

Ferrous minerals:

 Iron ore and iron ore pellets. We operate four systems in Brazil for producing and distributing
iron ore, which we refer to as the Northern, Southeastern, Southern and Midwestern Systems.
The Northern and the Southeastern Systems are fully integrated, consisting of mines, railroads,
maritime terminals and a port. The Southern System consists of three mining complexes and two
maritime terminals. We also have iron ore pellet operations in several locations, some of which
are conducted through joint ventures. We operate 11 pellet plants in Brazil and two in Oman.
The operations of three of our pellet plants in Brazil have been suspended since 2012 in response
to market conditions, and their capacity was partially replaced by Tubarão VIII, a more efficient
plant. In response to market conditions, we plan to re-start operations at one of our pellet plants
in 2018. We also have a 50% stake in Samarco and 25% stakes in two pellet companies in China.

17
  Ferroalloys and manganese. We conduct our manganese mining operations through Vale S.A. and
subsidiaries in Brazil, and we produce several types of manganese ferroalloys through a wholly-
owned subsidiary in Brazil.

Base metals:

 Nickel. Our principal nickel mines and processing operations are conducted by our wholly-owned
subsidiary Vale Canada Limited (‘‘Vale Canada’’), which has operations in Canada, Indonesia and
New Caledonia. We also have nickel operations in Onça Puma, in the Brazilian state of Pará. We
also own and operate, or have interests in, nickel refining facilities in the United Kingdom, Japan,
Taiwan, China and South Korea.

 Copper. In Brazil, we produce copper concentrates at Sossego and Salobo, in Carajás, in the
Brazilian state of Pará. In Canada, we produce copper concentrates, copper anodes and copper
cathodes in conjunction with our nickel mining operations at Sudbury and Voisey’s Bay. We will
discontinue the production of copper anode in 2017, as a result of changes in our production
process in Sudbury, which is part of our efforts to reduce air emissions. In Zambia, our joint
venture produces copper concentrates in Lubambe, located in the Zambian Copperbelt.

 Cobalt, PGMs and other precious metals. We produce cobalt as a byproduct of our nickel mining
and processing operations in Canada and refine it at our Port Colborne facilities, in the Province
of Ontario, Canada. We started to produce refined cobalt in our Long Harbour facilities in
Newfoundland and Labrador in 2017. We also produce cobalt as a byproduct of our nickel
operations in New Caledonia. We produce PGMs as byproducts of our nickel mining and
processing operations in Canada. The PGMs are concentrated at our Port Colborne facilities and
refined at our precious metals refinery in Acton, England. We produce gold and silver as
byproducts of our nickel mining and processing operations in Canada, and gold as a byproduct of
our copper mining at Sossego and Salobo in Brazil.

Coal:

 We conduct our coal operations primarily in Mozambique, through Vale Moçambique S.A. (‘‘Vale
Moçambique’’), where we are ramping up our metallurgical and thermal coal operations. We also
have minority interests in a Chinese coal and coke producer.

Logistics infrastructure:

 We are a leading operator of logistics services in Brazil and other regions of the world, with
railroads, maritime terminals, distribution centers and ports. Two of our four iron ore systems
include an integrated railroad network linked to port and terminal facilities. We also have an
interest in MRS Logı́stica S.A. (‘‘MRS’’), which transports our iron ore products from the
Southern System mines to our maritime terminals, and VLI S.A. (‘‘VLI’’), which provides
integrated logistics solutions to general cargo through railroads, inland and maritime terminals in
Brazil. We are ramping up the logistics infrastructure to support our coal operations in
Southeastern Africa. We own and charter dry bulk vessels to transport the products that we sell
on a cost and freight (‘‘CFR’’) basis to customers.

In December 2016, we agreed to sell a substantial part of our fertilizer business to The Mosaic
Company (‘‘Mosaic’’), subject to certain conditions precedent. As a result, this segment is reported as
discontinued operations. Until closing of the transaction, which is expected by the end of 2017, we continue to
conduct potash and phosphate operations in Brazil and to hold a 51% voting interest in a joint venture that
operates a phosphate rock mine in Peru. See —Discontinued Operations.

18
 Business overview

Business strategy

Our mission is to transform natural resources into prosperity and sustainable development. In all of
our lines of business, we are committed to:

 Prioritizing risk and impact management, seeking to achieve zero harm to our employees and
surrounding communities and establishing a positive social, economic and environmental legacy in
the places where we operate.

 Investing mainly in world-class assets, with long life, low cost, potential to expand and high quality
output, capable of creating value through different economic cycles.

 Maintaining a lean management organization, with teamwork and accountability, excellence in

project execution and firm commitment to transparency and shareholder value creation.

Below are the highlights of our major business strategies.

Commitment to sustainability

We are committed to promoting sustainable development, which means generating value for our
shareholders and other stakeholders, and simultaneously improving health and safety of our workers,
enhancing the well-being of the communities surrounding our operations and protecting the environment.
This can be achieved through conscious and responsible management, corporate voluntary actions and cross-
sectorial partnerships. Below is a list of measures illustrating our commitment to sustainability:

 Since 2013, environmental and social actions are directly incorporated into our strategic planning.
In 2016, we revised our Global Sustainability Policy to reflect health, safety, environment and
community management improvement. We also follow standards for social action and principles
on business and human rights, which are based on the Guiding Principles on Business and
Human Rights of the United Nations Human Rights Council.

 We are committed to reducing greenhouse gas emissions, by investing in energy efficiency, process
improvements, control systems and the use of clean fuels. In 2016, our operations (including
discontinued operations) generated 910 thousand tons of non-mineral waste, 96% non-hazardous
and 4% hazardous. From the total amount of waste disposal, 65.2% was sent to recycling
processes.

 We are also committed to reducing water use in our activities by investing in technologies and
initiatives to control total water withdrawal, especially by promoting water reuse. In 2016, we
withdrew a total of 426.3 million cubic meters of water, and used 394.3 million cubic meters in
our operations (including discontinued operations), with the balance being allocated to third
parties. From the total volume of water used in 2016, 80% or 1.6 billion cubic meters was reused.

Disciplined capital management

In all of our lines of businesses, we are committed to investing in world-class assets, with long life, low
cost, potential to expand and high quality output, capable of creating value through different economic cycles.
We exercise disciplined capital management and maintaining a low cost structure. The preservation of our
credit ratings and reduction of our debt leverage are also among our key commitments. In the past years, we
suspended operations of assets in response to market conditions and disposed of assets that we have
determined to be non-strategic or in order to optimize the structure of our business portfolio. The divestiture
of assets improves capital allocation and unlocks funds to finance the execution of top priority projects and to
manage our liquidity.

19
 Improving our competitiveness in the global iron ore market

We are committed to improving our competitiveness in the global iron ore market, by focusing our
product line to capture industry trends, improving quality and productivity, controlling costs, strengthening our
logistics infrastructure of railroads, ports, shipping and distribution centers, and strengthening relationships
with customers. Our diversified portfolio of high quality products, strong technical marketing strategy, efficient
logistics and long-standing relationships with major customers will help us achieve this goal.

We will continue to promote the Brazilian blend fines (BRBF), a product resulting from blending
fines from Carajás, which contain a higher concentration of iron and a lower concentration of silica in the
ore, with fines from the Southern and Southeastern Systems, which contain a lower concentration of iron in
the ore. The resulting blend offers strong performance in any kind of sintering operation. It is blended and
sold in our Teluk Rubiah Maritime Terminal in Malaysia and in five distribution centers in China, which
reduces the time to reach Asian markets and increases our distribution capillarity by allowing the use of
smaller vessels. The blending strategy also permits the use of iron ore with lower concentration, particularly
from the Southern System, allowing more efficient mining plans and increases use of dry processing methods,
which in turn reduce capital expenditures, expand the life of our mines and reduce the use of water in our
operations.

Enhancing our logistics capacity to support our iron ore and coal businesses

We have been expanding the capacity of our railroads and ports, entering into long term affreightment
agreements and developing distribution centers in Asia to meet the logistics needs of our iron ore and coal
businesses.

 We are increasing the logistics capacity of our Northern System to support the iron ore
production of the S11D project. We believe that the quality of our logistics assets, our extensive
experience as a railroad and port operator, and our stakes in MRS and VLI position us as a
leader in the logistics business in Brazil.

 Our strategy with respect to maritime shipping of iron ore consists of securing long-term shipping
capacity and protecting against volatility in spot freight rates, without incurring the costs relating
to building and owning the vessels. We transport a large amount of our iron ore products from
Brazil to Asia through long-term contracts of affreightment with owners of very large ore carriers
of 400,000 deadweight tons (‘‘DWT’’).

 We also ramped up our distribution center in Malaysia, and we are developing port service
contracts in several ports in China to capture the benefits of being closer to iron ore customers.
This downstream management of the supply chain plays an important role in our commercial
strategy as it reduces the time to market and increases our distribution capillarity in the Asian
market, by allowing the sale of smaller lots at competitive costs

 In order to position ourselves for the future expansion of our coal production in Mozambique
and leverage our presence in Africa, we are currently ramping up the expansion of the local
railroad capacity after the rehabilitation of the existing network and after building new railroad
tracks to develop the logistics corridor from our mine to the newly constructed port at
Nacala-à-Velha, in Mozambique.

20
 Business overview

Maximizing value in the nickel and copper businesses

We are the world’s largest nickel producer, with large-scale, long-life and low-cost operations, a
substantial resource base and diversified mining operations that produce nickel from nickel sulfides and
laterites using advanced technology. We have processing facilities in North America, Europe, Asia, Brazil,
New Caledonia and Indonesia, which produce an array of products for use in most nickel applications. We are
a leading producer of high-quality nickel products for non-stainless steel applications, such as plating, alloy
steels, high nickel alloys and batteries, which represented 58% of our refined nickel sales in 2016. Our goal is
to strengthen our competitiveness in the nickel business. In the long-term, the battery segment shows an
important upside potential as electric vehicle production continues to attract significant investments, which
could positively impact nickel price and our nickel premiums. We continue to optimize our operations and to
review our asset utilization aiming to increase productivity and improve returns.

We produce copper concentrates from our Sossego and Salobo facilities located in the Carajás region.
These copper mines benefit from our infrastructure facilities serving the Northern System. The gold we
produce at Sossego and Salobo increases the total aggregated value of those operations. A key aspect of our
strategy for our copper assets in the Carajás region is to improve our efficiency and asset utilization while
evaluating opportunities to extend our operations at Sossego and expand Salobo. We also produce copper as a
coproduct in our nickel operations, principally at Sudbury and Voisey’s Bay, in Canada.

Improving the coal business

We have coal operations in Moatize (Mozambique), and we hold a minority interest in a joint venture
in China. We intend to increase our coal production, mainly through the expansion of a new coal handling
processing plant (CHPP) of coal in the Moatize operations in Mozambique and the ramp-up of the Nacala
Logistics Corridor in Mozambique and Malawi, where we have entered into a strategic partnership with
Mitsui. As we complete the ramp-up of our new CHPP in Moatize and the Nacala Logistics Corridor, our
costs are expected to reduce, enhancing the competitiveness of our coal operations.

Developing our resource base

We are taking advantage of our global presence to develop mineral exploration initiatives. We conduct
brownfield exploration to maximize results from existing mining areas and to support both projects and
operations. We conduct our greenfield exploration activities in six countries, which are Brazil, Peru, Chile,
Canada, Australia and Indonesia. In particular, we seek to identify opportunities and develop deposits with
the potential for large scale production at low cost. Our exploration activities are focused on iron ore, nickel
and copper.

Optimizing our energy matrix

As a large consumer of electricity, we have invested in power generation projects to support our
operations and to reduce our exposure to the volatility of energy prices and regulatory uncertainties.
Accordingly, we have developed hydroelectric power generation plants in Brazil, Canada and Indonesia, and
50% of our worldwide electricity needs come from our own plants. We are seeking to develop a clean energy
mix by focusing on reducing our carbon footprint.

Significant changes in our business

We summarize below major events related to our organic growth, divestitures, acquisitions and other
significant developments in our business since the beginning of 2016.

21
 Organic growth

We have an extensive program of investments in the organic growth of our businesses. Our main
investment projects are summarized under —Capital expenditures. The most significant projects that have
come on stream since the beginning of 2016 are summarized below:

 Carajás Serra Sul S11D. In the fourth quarter of 2016, we started up the mine and processing
plant in the southern range of Carajás, in the Brazilian state of Pará. The nominal capacity is
90 Mtpy.

 Moatize II. In the third quarter of 2016, we completed the construction of a new pit and the
expansion of a new coal handling processing plant (‘‘CHPP’’) located in Tete, Mozambique, as
well as related infrastructure. The nominal capacity is 11 Mtpy of coal, expanding the complex
capacity to 22 Mtpy.

 Companhia Siderúrgica do Pecém. In the second quarter of 2016, we concluded the construction of
an integrated steel slab plant in the Brazilian state of Ceará, in partnership with Dongkuk Steel
Mill Co. (‘‘Dongkuk’’) and Posco. We own 50% of the joint venture, while Dongkuk owns 30%
and Posco owns 20%. The nominal capacity is 3.0 Mtpy.

Dispositions and asset sales

We are always seeking to optimize the structure of our portfolio of businesses in order to achieve the
most efficient allocation of capital. We summarize below our most significant dispositions since the beginning
of 2016.

 Sale of Fertilizer Business—In December 2016, we entered into an agreement with Mosaic for the
sale of a substantial part of our fertilizer business, which includes (i) our phosphate assets in
Brazil; (ii) our stake in the joint venture that operates the phosphate rock mine in Bayóvar, Peru;
(iii) our potash assets located in Brazil; and (iv) our potash project based in Canada (Kronau).
Only our nitrogen and phosphate assets, located in Cubatão, were not included in this sale
agreement. We expect to receive consideration from Mosaic totaling approximately US$2.5 billion,
consisting of US$1.25 billion in cash and approximately 42.3 million shares of Mosaic’s common
stock, which corresponds to approximately 11% (on a post-issuance basis) of Mosaic’s outstanding
common stock. Subject to limited exceptions, the Mosaic shares to be issued to us cannot be
transferred for two years following closing, after which time we will have customary registration
rights. Following closing of the transaction, we will also have the right to appoint two members of
Mosaic’s board of directors for so long as we hold at least 90% of the Mosaic shares received at
closing, or one member of Mosaic’s board for so long as we hold at least 50% of the Mosaic
shares received at closing. Mosaic has also agreed to pay additional amounts of up to
US$260 million if the market price of certain products, and the exchange rate between the
Brazilian real and the U.S. dollar exceed certain thresholds during each of the two 12-month
periods following completion of the transaction. Closing of the sale is subject to certain conditions
precedent, including approvals by the Brazilian and other antitrust authorities, certain other
operational and regulatory milestones and the completion of a carve-out of our assets located in
Cubatão from Vale Fertilizantes. We expect to complete the sale to Mosaic in late 2017. The Rio
Colorado potash project in Argentina may also be sold to Mosaic, subject to Mosaic’s agreement
following appropriate diligence. We intend to seek buyers for the Cubatão assets in 2017.

22
 Business overview

 Sale of gold stream from Salobo copper mine—In August 2016, we sold to Silver Wheaton
(Caymans) Ltd. (‘‘Silver Wheaton’’) an additional 25% of the gold produced as a byproduct at
our Salobo copper mine, in Brazil, for the life of that mine. We had previously sold an aggregate
volume of 50% of such gold in 2013 and 2015. In consideration for the August 2016 sale, we
(i) received an initial cash payment of US$800 million, (ii) received an option value of
approximately US$23 million from a reduction of the exercise price of the Silver Wheaton
warrants held by us since 2013 and maturing in 2023, and (iii) ongoing payments of the lesser of
US$400 per ounce (subject to a 1% annual inflation adjustment starting January 1, 2019) and the
prevailing market price, for each ounce of gold that we deliver under the agreement. We may
receive an additional cash payment if we expand our capacity to process Salobo copper ores to
more than 28 Mtpy before 2036. The additional cash payment may range from US$113 million to
US$953 million, depending on ore grade, timing and size of the expansion.

 Sale of very large ore carriers—In June 2016, we concluded the sale of three very large ore carriers
of 400,000 DWT for an aggregate amount of US$269 million to a subsidiary of the ICBC
International Finance Limited. In September 2016, we signed an agreement for the sale of four
capesize vessels to Polaris Shipping Co. Ltd. for US$35 million per vessel. Two of these vessels
were delivered in December 2016 and the other two in January 2017. See —Restructuring our
investments in iron ore shipping.

 Sale of Mineração Paragominas—In December 2016, we concluded the sale of our remaining
13.63% indirect interest in Mineração Paragominas S.A., a bauxite mining business located in
Brazil, to Hydro Paragominas B.V., a subsidiary of Norsk Hydro ASA (‘‘Hydro’’), for
US$113 million. The transaction is the final step of the sale of our aluminum business to Hydro,
which was initially announced in February 2011.

 Sale of coal assets in Australia—In November 2016, we sold to a subsidiary of AMCI

Euro-holdings BV (‘‘AMCI’’) our interests in certain coal assets in Australia, including
Carborough Downs operations, Broadlea operation, which is currently suspended, and the
undeveloped deposits of Ellensfield and Red Hill. AMCI assumed all existing rights and
obligations associated with the assets, including all existing take or pay agreements, employment
related obligations and any future environmental rehabilitation requirements. The transaction
does not provide for upfront payments, but contemplates potential future payments to us of up to
A$30 million in production bonuses upon the production of first coal in certain tenements, as well
as royalties of up to US$4 per ton of any coal sold from these assets. As part of the same
transaction, we also agreed to sell certain additional surface land and ancillary tenements
surrounding these assets, and closing of this additional sale is subject to regulatory approvals in
Australia.

Partnership in coal assets in Mozambique

In September 2016, we agreed with Mitsui the new terms of our partnership in coal assets in
Mozambique. Under these new terms, Mitsui agreed to pay us an amount of up to US$450 million, consisting
of: (i) a fixed payment of US$255 million for 15% of our 95% stake in the Moatize coal mine and (ii) an
additional amount of up to US$195 million, subject to certain conditions, including mine performance. Mitsui
will also contribute an amount of approximately US$348 million for 50% of our 70% stake in the Nacala
Logistics Corridor and extend a long-term facility of US$165 million to Nacala Logistics Corridor. We
completed the equity transaction with Mitsui on March 27, 2017. The total value of the transaction will be
approximately US$770 million, including all amounts mentioned above except the additional amount of up to
US$195 million, which is subject to certain conditions still to be satisfied. From these US$770 million, we
received US$733 million upon completion of the equity transaction on March 27, 2017, and expect to receive
the remainder upon closing of the project financing, which is expected to occur during 2017. If the project
financing is not signed before the end of 2017, Mitsui has certain rights to transfer its participation in the
Moatize coal mine and the Nacala Logistics Corridor back to us. See Lines of Business—Infrastructure—
Railroads.

23
 Obtaining environmental licenses for the S11D project in Carajás

In December 2016, we obtained the operational environmental license for the S11D project located in
Carajás, Brazil. This license is a key step in the process of expanding our iron ore production and improving
our competitiveness in the iron ore business.

Optimizing our base metals operations in Canada

We plan to optimize our nickel operations across Canada, as part of an overall strategy to reduce our
atmospheric emissions and comply with local regulations. Our goal is to concentrate our refining and smelting
activities in Sudbury, where we will focus on the production of copper concentrate, copper matte and refined
nickel. In Long Harbour we will produce nickel rounds, copper cathode and cobalt metal. We will phase out
our smelting and refining activities in Thompson, where we will focus on nickel concentrate production.

 Sudbury, Ontario—In the second half of 2017, we will convert our two-furnace operation in
Sudbury into a single furnace. As a result of this change, we expect to increase the proportion of
production of copper concentrate to total copper production from the current rate of 45% to
70% in 2017 and to 80% in 2018, maximizing the smelter capacity for nickel. In addition, we plan
to cease production of copper anode and increase production of copper matte. By 2018, we
expect that about 10% of our copper production will be sold in the form of copper matte. We
plan to renovate one of the operational furnaces from March 2017 to June 2017, followed by the
immediate decommissioning of the other furnace. The rebuilt furnace will have its capacity
increased, but due to the single furnace operation, the overall production of refined nickel and
copper in the long term will decrease by approximately 30%.

 Thompson, Manitoba—We intend to change our operations in Thompson, Manitoba, from an

integrated operation to a mine-mill operation. We intend to decommission one of the two
furnaces at the site, beginning in 2017, and we expect to decommission the other furnace in 2018,
therefore closing the remaining smelting and refining activities to focus the operation solely on
nickel concentrate production. We plan to send the majority of the feed from Thompson to be
refined in Long Harbour and Sudbury.

 Voisey’s Bay and Long Harbour, Newfoundland and Labrador—We plan to ship a greater
proportion of Voisey’s Bay nickel concentrate to our Long Harbour processing facility in 2017,
reducing concentrate shipments to our Sudbury and Manitoba operations. By the end of 2017, we
plan on shipping all Voisey’s Bay nickel concentrate to our Long Harbour refinery. Our Long
Harbour processing facilities will produce nickel rounds, copper cathode and cobalt metal from
the Voisey’s Bay concentrate.

Failure of Samarco’s tailings dam in Minas Gerais

Samarco’s dam failure

On November 5, 2015, the Fundão tailings dams owned by Samarco failed, releasing tailings
downstream, reaching and flooding certain communities and causing impacts on communities and the
environment along the Rio Doce river. The failure resulted in 19 fatalities, and caused property and
environmental damage to the affected areas.

After the dam failure, Samarco, together with the public authorities, provided first aid, food, water,
housing, social assistance and financial aid to the affected families and individuals, and both Vale and BHPB,
Samarco’s shareholders, have been actively involved in supporting Samarco during this period. In addition to
these emergency actions, Samarco has been monitoring the affected area, performing emergency work to
contain any movement of tailings, reinforcing the structures of its dams and dikes to ensure the safety of the
region and mitigating the environmental and social impacts of the event. Samarco continues to reinforce and
improve the structures of its dams to contain the remaining tailings.

24
 Business overview

Impact of dam failure on our and Samarco’s operations

Our operation in the Mariana mining complex, near Samarco’s mining area, was also negatively
impacted by the failure of Samarco’s tailings dam. A major conveyor belt connecting our Fábrica Nova mine
to our Timbopeba beneficiation plant was damaged, and the Alegria mine is operating with a dry
beneficiation process.

Following the dam failure, governmental authorities ordered the suspension of Samarco’s operations.
With the exception of the Fundão tailings dam and the Santarém water dam, which was impacted by the
overflow of tailings from the Fundão dam, all other production assets owned by Samarco were undamaged.
Samarco’s management is working on a plan that would permit it to resume operations and provide a
long-term solution for the disposal of tailings. The feasibility, timing and scope of measures necessary to
resume Samarco’s operations remain uncertain.

In December 2016, we entered into a non-binding term sheet outlining the general terms and
conditions to permit Samarco, upon its eventual resumption of operations, to deposit its tailings in our
Timbopeba pit. A definitive agreement is being negotiated and is subject to due diligence and governmental
approvals. The use of the Timbopeba pit may allow Samarco to operate for several years without a new
tailings structure.

The Framework Agreement and the agreements with the MPF

In March 2016, Samarco and its shareholders, Vale S.A. and BHPB entered into the Framework
Agreement with the Brazilian federal government, the two Brazilian states affected by the failure (Espı́rito
Santo and Minas Gerais) and other governmental authorities in order to implement programs for remediation
and compensation of the areas and communities affected by Samarco’s dam failure. The Framework
Agreement has a 15-year term, renewable for successive one-year periods until all the obligations under the
Framework Agreement have been performed. The Framework Agreement does not provide for admission of
civil, criminal or administrative liability for the Fundão dam failure.

In June 2016, Samarco, Vale S.A. and BHPB created the Renova Foundation to develop and
implement social and economic remediation and compensation pursuant to the Framework Agreement. The
foundation must be funded by Samarco according to the following schedule: R$2.0 billion (US$614 million)
in 2016, R$1.2 billion (US$368 million) in 2017 and R$1.2 billion (US$368 million) in 2018. From 2019
to 2021, Samarco agreed to provide funding based on the amounts needed to implement the projects
approved for the relevant year, subject to an annual minimum of R$800 million (US$245 million) and an
annual maximum of R$1.6 billion (US$491 million). Starting in 2022, Samarco will provide the necessary
funding in order to complete remaining programs approved for each year. The foundation will allocate an
annual amount of R$240 million (US$74 million) over 15 years to the implementation of compensation
programs, and these annual amounts are included in the annual contributions described above for the first six
years. Through the end of 2018, R$500 million (US$153 million) will be provided for sewage collection and
treatment and solid waste disposal under the terms of the Framework Agreement.

25
 In January 2017, Samarco, Vale and BHPB entered into two preliminary agreements with the MPF in
connection with the pending public civil actions brought by the Brazilian Government and others and the
public civil action brought by the MPF, which are described under Additional information—Legal proceedings.

 The first agreement, which was approved by the 12th federal court in Belo Horizonte on
March 16, 2017, consists of an initial transitory agreement, which will be effective until the parties
agree on the terms of a final agreement, and provides for (i) a process and timetable for the
resolution of the public civil action brought by the Brazilian government and others and the
public civil action brought by the MPF, (ii) the appointment of experts selected by the MPF to
analyze and monitor the remediation programs provided under the Framework Agreement,
(iii) the holding of public hearings in different communities in the states of Minas Gerais and
Espı́rito Santo and in the indigenous territories of Krenak, Comboios and Caieiras Velhas,
(iv) the obligation of Samarco, Vale and BHPB to provide collateral to secure the payment of the
socio-environmental and socio-economic remediation measures, in the amount of R$2.2 billion.
The required collateral will consist of R$100 million in financial investments, R$1.3 billion in
insurance bonds and R$800 million in assets of Samarco.

 The second agreement provides for a timetable to make funds available for remediation measures
in the municipalities of Barra Longa, Rio Doce, Santa Cruz do Escalvado and Ponte Nova, in the
total amount of R$200 million.

In March 2017, the court partially ratified the first agreement, pending the appointment of an expert
and conclusion of the final agreement. We expect the Framework Agreement and the agreements with the
MPF to be a first step towards the settlement of these actions. Any final settlement of these actions is subject
to approval by the court.

Impact of the failure of Samarco’s tailings dam in our financial statements

For a discussion of the impact of the failure of Samarco’s tailings dam in our financial statements, see
Operating and financial review and prospects—Failure of Samarco’s tailing dams.

Reorganization of our shareholding structure and share ownership by controlling shareholders

Pursuant to the new shareholders’ agreement entered into by certain shareholders of Valepar, our
controlling shareholder, on February 19, 2017, Valepar is expected to make a proposal to simplify our
shareholding structure and corporate governance, with the purpose of eventually enabling Vale to be listed on
BM&FBOVESPA’s Novo Mercado special segment and making Vale a company without defined control. This
proposal is composed of a series of indivisible and interdependent steps, and is subject to approval by our
shareholders and the executive officers and board of directors of Vale and Valepar. The proposal
contemplates (i) the voluntary conversion of at least 54.09% of our class A preferred shares into common
shares, (ii) the amendment of our bylaws to adjust them, to the extent possible, to Novo Mercado rules, and
(iii) the merger of Valepar into Vale. Subsequently, certain former shareholders of Valepar will enter into a
new shareholders’ agreement at the Vale level. Our eventual migration to the Novo Mercado segment of the
BM&FBOVESPA is also subject to conversion of all of our preferred shares into common shares. For a
description of our ownership structure and the proposed changes to the Valepar shareholders’ agreements
pursuant to the Proposal, see Share ownership and trading—Major shareholders.

26
 LINES OF BUSINESS

Our principal lines of business consist of mining and related logistics. This section presents
information about operations, production, sales and competition and is organized as follows.

1. Ferrous minerals 3. Coal

1.1 Iron ore and iron ore pellets 3.1 Operations

1.1.1 Iron ore operations 3.2 Production
1.1.2 Iron ore production 3.3 Customers and sales
1.1.3 Iron ore pellets operations 3.4 Competition
1.1.4 Iron ore pellets production
1.1.5 Customers, sales and marketing 4. Infrastructure
1.1.6 Competition
4.1 Logistics
1.2 Manganese ore and ferroalloys 4.1.1 Railroads
1.2.1 Manganese ore operations and production 4.1.2 Ports and maritime terminals
1.2.2 Ferroalloys operations and production 4.1.3 Shipping
1.2.3 Manganese ore and ferroalloys: sales and
competition 4.2 Energy

2. Base metals 5. Other investments

2.1 Nickel
2.1.1 Operations
2.1.2 Production
2.1.3 Customers and sales
2.1.4 Competition

2.2 Copper
2.2.1 Operations
2.2.2 Production
2.2.3 Customers and sales
2.2.4 Competition

2.3 PGMs and other precious metals

2.4 Cobalt

27
 27MAR201715192298

28
 Lines of Business

1. Ferrous minerals

Our ferrous minerals business includes iron ore mining, iron ore pellet production, manganese ore mining and ferroalloy production. Each of
these activities is described below.
1.1 Iron ore and iron ore pellets

1.1.1 Iron ore operations

We conduct our iron ore business in Brazil primarily at the parent-company level, through our subsidiaries, Mineração Corumbaense
Reunida S.A. (‘‘MCR’’) and Minerações Brasileiras Reunidas S.A.—MBR (‘‘MBR’’). Our mines, all of which are open pit, and their related operations
are mainly concentrated in three systems: the Southeastern, Southern and Northern Systems, each with its own transportation capabilities. We also
conduct mining operations in the Midwestern System and we have a 50% stake in Samarco. Samarco’s operations have been suspended following the
failure of one of its tailings dams located in Minas Gerais in November 2015 (see Business overview—Failure of Samarco’s tailings dam in Minas Gerais).
We conduct each of our iron ore operations in Brazil under concessions from the federal government granted for an indefinite period, subject to the life
of the mines.
Company/Mining System Location Description/History Mineralization Operations Power source Access/Transportation
Vale
Northern System Carajás, state Divided into Serra Norte, Serra High-grade hematite Open-pit mining operations. In Supplied through the EFC railroad
of Pará Sul and Serra Leste (Northern, ore type (iron grade Serra Norte, one of the major national electricity transports the iron ore
Southern and Eastern ranges). of more than 65% on plants applies the natural moisture grid. Produced to the Ponta da
29

Since 1984, we have been average). beneficiation process, consisting of directly by Vale or Madeira maritime
conducting mining activities in the crushing and screening, and the acquired through terminal in the
northern range, which is divided other applies both the natural power purchase Brazilian state of
into three main mining areas moisture and the wet beneficiation agreements. Maranhão. Serra
(N4W, N4E and N5) and two process in distinct lines. The wet Leste iron ore is
major beneficiation plants. In beneficiation process consists transported by trucks
2014, we started a new mine and simply of sizing operations, from the mine site to
beneficiation plant in Serra Leste. including screening, EFC railroad. The
Our operations in Serra Sul, hydrocycloning, crushing and Serra Sul ore is
where our S11D project is located, filtration. Output from this site shipped via the
started in 2016. consists of sinter feed, pellet feed Carajás railroad
and lump ore. Serra Leste and (EFC) via the new
Serra Sul natural moisture 101-kilometers long
beneficiation process consists of railroad branch
crushing and screening. Serra Sul
produces only sinter feed and
Serra Leste produces lump and
sinter feed.
Southeastern System Iron Three mining complexes: Itabira Ore reserves with high Open-pit mining operations. We Supplied through the EFVM railroad
Quadrangle, (two mines, with three major ratios of itabirite ore generally process the run-of-mine national electricity connects these mines
state of beneficiation plants), Minas relative to hematite by means of standard crushing, grid. Produced to the Tubarão port.
Minas Gerais Centrais (two mines, with two ore type. Itabirite ore classification and concentration directly by Vale or
major beneficiation plants and type has iron grade of steps, producing sinter feed, lump acquired through
one secondary plant) and Mariana 35-60%. Part of the ore and pellet feed in the power purchase
(three mines, with two major ore is concentrated to beneficiation plants located at the agreements.
beneficiation plants). achieve shipping grade mining complexes.
and part is shipped
and blended in Asia
with the high grade
ore from our
Northern System.
 Company/Mining System Location Description/History Mineralization Operations Power source Access/Transportation

Southern System Iron Three major mining complexes: Ore reserves with high Open-pit mining operations. We Supplied through the MRS transports our
Quadrangle, Minas Itabirito (four mines and ratios of itabirite ore generally process the run-of-mine national electricity iron ore products
state of three major beneficiation plants); type relative to hema- by means of standard crushing, grid. Produced from the mines to our
Minas Gerais Vargem Grande (three mines and tite ore type. Itabirite classification and concentration directly by Vale or Guaı́ba Island and
two major beneficiation plants); ore has iron grade of steps, producing sinter feed, lump acquired through Itaguaı́ maritime ter-
and Paraopeba (five mines and 35-60%. Part of the ore and pellet feed in the power purchase minals in the Brazilian
two major beneficiation plants). ore is concentrated to beneficiation plants located at the agreements. state of Rio de
achieve shipping grade mining complexes. Janeiro. EFVM rail-
and part is shipped road connects certain
and blended in Asia mines to the Tubarão
with the high grade port.
ore from our North-
ern System.
Midwestern System State of Two mines and two plants located Hematite ore type, Open-pit mining operations. The Supplied through the Part of the sales are
Mato Grosso in the city of Corumbá. which generates lump beneficiation process for the national electricity transported through
do Sul ore predominantly. run-of-mine consists of standard grid. Acquired from barges traveling along
Iron grade of 62% on crushing and classification steps, regional utility com- the Paraguay river to
average. producing lump and sinter feed. panies. the ports in Argentina,
moving to Europe and
30

Asia markets from

there. Another part of
the sales is delivered
to customers in the
ports of Corumbá.
Samarco Iron Integrated system comprised of Itabirite ore type. Open-pit mining operations. The Supplied through the Samarco’s mines sup-
Quadrangle, two mines, three beneficiation three beneficiation plants, located national electricity ply Samarco’s pellet
state of plants, three pipelines, four pellet at the site, process the grid. Acquired from plants using three
Minas Gerais plants and a port. The mines and run-of-mine by means of standard regional utility com- pipelines extending
the beneficiation plants are crushing, milling and concentra- panies or produced approximately 400
located in the state of Minas Ger- tion steps, producing pellet feed directly by Samarco. kilometers. These
ais and the pellet plants and port and sinter feed. Samarco’s mining pipelines transport the
are located in the state of Espı́rito operations have been suspended iron ore from the
Santo. From Minas Gerais to following the failure of one of its beneficiation plants to
Espı́rito Santo state production tailings dams located in Minas the pelletizing plants.
flows through the three pipelines Gerais in November 2015 (see From the pelletizing
which extend for approximately Business overview—Failure of plants to the Ubu port
400 Km. Samarco’s tailings dam in Minas in the Brazilian state
Gerais). of Espı́rito Santo pel-
lets are transported by
conveyor belts of
approximately 1 kilo-
meter.
 Lines of Business

1.1.2 Iron ore production

The following table sets forth information about our iron ore production.

Production for the year ended 2016

December 31(2), process
Mine/Plant Type 2014 2015 2016 recovery(4)
(million metric tons) (%)
Southeastern System
Itabira . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 35.8 35.6 33.4 49.6
Minas Centrais(1) . . . . . . . . . . . . . . . . . . . . . . Open pit 33.7 41.3 40.9 67.6
Mariana . . . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 39.4 36.1 28.4 89.4
Total Southeastern System . . . . . . . . . . . . . . . . . . . . . . . . . . 108.9 113.0 102.7
Southern System
Minas Itabirito . . . . . . . . . . . . . . . . . . . . . . . . Open pit 41.0 41.4 40.1 71.7
Vargem Grande . . . . . . . . . . . . . . . . . . . . . . . . Open pit 25.0 29.3 29.2 64.9
Paraopeba . . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 31.2 28.1 26.4 95.9
Total Southern System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97.2 98.8 95.7
Northern System
Serra Norte . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 117.5 127.6 143.6 95.5
Serra Leste . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 2.2 2.0 4.2 98.9
Serra Sul . . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit – – 0.4 100.0
Total Northern System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119.7 129.6 148.1
Midwestern System
Corumbá . . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 3.8 2.8 1.9 73.9
Urucum . . . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 2.1 1.7 0.4 65.8
Total Midwestern System . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.8 4.5 2.3
Total Vale Systems(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 331.6 345.9 348.8
Samarco(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 13.1 12.7 0.0
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 344.7 358.6 348.8

(1) Agua Limpa mine and plants are part of the Minas Centrais operations and are owned by Baovale Mineração S.A. (‘‘Baovale’’). We
own 100% of the voting shares and 50% of the total shares of Baovale. Production figures for Água Limpa have not been adjusted to
reflect our ownership interest.
(2) Production figures represent the mass obtained after beneficiation process, with minor contribution of run-of-mine production and
third-party ore purchases.
(3) Production figures for Samarco, in which we have a 50% interest, have been adjusted to reflect our ownership interest.
(4) Process recovery figures do not include third-party ore purchases.

1.1.3 Iron ore pellets operations

We produce iron ore pellets in Brazil and Oman, directly and through joint ventures, as set forth in
the table below. We also have a 25% interest in two iron ore pelletizing plants in China, Zhuhai YPM
Pellet Co., Ltd. (‘‘Zhuhai YPM’’) and Anyang Yu Vale Yongtong Pellet Co., Ltd. (‘‘Anyang’’). Our total
estimated nominal capacity is 64.7 Mtpy, including the full capacity of our pelletizing plants in Oman, but not
including our joint ventures Samarco, Zhuhai YPM and Anyang. We supply all of the iron ore requirements
of our wholly-owned pellet plants and part of the iron ore requirements for Samarco and Zhuhai YPM. In
2016, we sold 1.08 million metric tons of pellet feed to Zhuhai YPM and 0.33 million metric tons to Anyang
YVY. We suspended our sales of run-of-mine to Samarco following the failure of Samarco’s tailings dam in
November 2015.

31
 Nominal Vale’s
capacity share
Company/Plant Description/History (Mtpy) Power source Other information (%) Partners

Brazil:
Vale
Tubarão (state of
Espı́rito Santo) Three wholly-owned pellet plants 36.7(1) Supplied through the national Operations at the Tubarão I and II 100.0 –
(Tubarão I, II and VIII) and five electricity grid. Produced directly by pellet plants have been suspended
leased plants (Itabrasco, Hispanobras, Vale or acquired through power since November 13, 2012 in response
Kobrasco and two Nibrasco plants). purchase agreements. to changes in steel industry demand
These plants receive iron ore for raw materials, and replaced by
primarily from our Southeastern Tubarão VIII, a newer and more
System mines and distribution is efficient plant.
made though our logistics
infrastructure.
Fábrica (state of
Minas Gerais) Part of the Southern System. Receives 4.5 Supplied through the national – 100.0 –
iron ore from Minas Itabirito mining electricity grid. Produced directly by
32

complex, more specifically from João Vale or acquired through power

Pereira and Segredo mines. purchase agreements.
Production is mostly transported by
MRS and EFVM.
Vargem Grande (state
of Minas Gerais) Part of the Southern System. Receives 7.0 Supplied through the national – 100.0 –
iron ore from Minas Itabirito and electricity grid. Produced directly by
Vargem Grande mining complexes, Vale or acquired through power
more specifically from Sapecado, purchase agreements.
Galinheiro, Capitão do Mato and
Tamanduá mines and the production
is mostly transported by MRS.
São Luı́s (state of
Maranhão) Part of the Northern System. Receives 7.5 – On October 8, 2012, we suspended 100.0 –
iron ore from the Carajás mines and operations at the São Luı́s pellet
production is shipped to customers plant in response to changes in steel
through our Ponta da Madeira industry demand for raw materials.
maritime terminal. We plan to re-start the São Luis
pellet plant in the beginning of 2018,
after the renewal of its operational
license, the revamp of the plant and
the upgrade of its automation system.
 Lines of Business

Nominal Vale’s
capacity share
Company/Plant Description/History (Mtpy) Power source Other information (%) Partners
Samarco Four pellet plants, with aggregate 30.5(2) Supplied through the national In January 2016, Samarco suspended 50.0 BHP Billiton
nominal capacity of 30.5 Mtpy, electricity grid. Acquired from its pelletizing operations as pelletizing Brasil Ltda.
located in the Ponta Ubu unit, in regional utility companies or feed became unavailable as a result of
Anchieta, state of Espı́rito Santo. produced directly by Samarco. the suspension of its mining
operations in November 2015.
33

Oman:
Vale Oman
Pelletizing
Company LLC Vale’s industrial complex. Two pellet 9.0 Supplied through the national Oman plants are supplied by iron ore 70.0 Oman Oil
plants with a total nominal capacity of electricity grid. from the Iron Quadrangle state of Company S.A.O.C.
9.0 Mtpy. The pelletizing plants are Minas Gerais through the Tubarão
integrated with our distribution center Port (80%) and by iron ore from
that has a nominal capacity to handle Carajás through the Ponta de
40.0 Mtpy. Madeira Port (20%).

(1) Our environmental operating licenses for the Tubarão pellet plants provide for a capacity of 36.2 Mtpy.
(2) The actual capacity will be revised based on the conditions under which Samarco resumes operations.
 1.1.4 Iron ore pellets production

The following table sets forth information about our main iron ore pellet production.

Production for the year ended December 31,

Company 2014 2015 2016
(million metric tons)
Vale(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.0 46.2 46.2
Samarco . . . . . . . . . . . . . . . . . . . . . . . . . . 12.1 12.3 0.0
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.1 58.5 46.2

(1) Figure indicates actual production, including full production from our pellet plants in Oman and the five pellet plants we lease in
Brazil. The operating leases for Itabrasco, Kobraco and Hispanobras’ pellet plants expire in 2018, and the operating leases for the two
Nibraco’s pellet plants expire in 2019.

1.1.5 Customers, sales and marketing

We supply all of our iron ore and iron ore pellets (including our share of joint-venture pellet
production) to the steel industry. Prevailing and expected levels of demand for steel products affect demand
for our iron ore and iron ore pellets. Demand for steel products is influenced by many factors, such as global
manufacturing production, civil construction and infrastructure spending. For further information about
demand and prices, see Operating and financial review and prospects—Major factors affecting prices.

In 2016, China accounted for 58% of our iron ore and iron ore pellet shipments, and Asia as a whole
accounted for 71%. Europe accounted for 14%, followed by Brazil with 8%. Our 10 largest customers
collectively purchased 130 million metric tons of iron ore and iron ore pellets from us, representing 38% of
our 2016 iron ore and iron ore pellet sales volumes and 36% of our total iron ore and iron ore pellet
revenues. In 2016, no individual customer accounted for more than 10% of our iron ore and iron ore pellet
shipments.

Of our total 2016 pellet production, including the production of our joint ventures, 62.9% was blast
furnace pellets and 37.1% was direct reduction pellets. Blast furnace and direct reduction are different
technologies employed by steel mills to produce steels, each using different types of pellets. In 2016, the
Asian market (mainly Japan, South Korea and Taiwan), the European market and the Brazilian market were
the primary markets for our blast furnace pellets, while the Middle East, North America and North Africa
were the primary markets for our direct reduction pellets.

We invest in customer service in order to improve our competitiveness. We work with our customers
to understand their objectives and to provide them with iron ore solutions to meet specific customer needs.
Using our expertise in mining, agglomeration and iron-making processes, we search for technical solutions
that will balance the best use of our world-class mining assets and the satisfaction of our customers. We
believe that our ability to provide customers with a total iron ore solution and the quality of our products are
both very important advantages helping us improve our competitiveness in relation to competitors that may be
more conveniently located geographically. In addition to offering technical assistance to our customers, we
have sales offices in St. Prex (Switzerland), Tokyo (Japan), Seoul (South Korea), Singapore, Dubai (UAE) and
Shanghai (China), which support the global sales by Vale International, and an office in Brazil, which supports
sales to South America. These offices also allow us to stay in close contact with our customers, monitor their
requirements and our contract performance, and ensure that our customers receive timely deliveries.

We sell iron ore and iron ore pellets under different arrangements, including long-term contracts with
customers and on a spot basis through tenders and trading platforms. Our pricing is generally linked to
market price indexes and uses a variety of mechanisms, including current spot prices and average prices over
specified periods. In cases where the products are priced before the final price is determinable at delivery, we
recognize the sale based on a provisional price with a subsequent adjustment reflecting the final price.

34
 Lines of Business

In 2015 and 2016, we hedged part of our total exposure to bunker oil prices relating to our owned
fleet and long-term contracts of affreightment connected to our FOB, CFR and domestic sales. The 2015
hedge program was settled in 2015 and 2016. We expect the 2016 hedge program to be settled in 2017.

1.1.6 Competition

The global iron ore and iron ore pellet markets are highly competitive. The main factors affecting
competition are price, quality and range of products offered, reliability, operating costs and shipping costs.

 Asia—Our main competitors in the Asian market are located in Australia and include subsidiaries
and affiliates of BHP Billiton, Rio Tinto Ltd (‘‘Rio Tinto’’) and Fortescue Metals Group Ltd.

We are competitive in the Asian market for two main reasons. First, steel companies generally
seek to obtain the types (or blends) of iron ore and iron ore pellets that can produce the
intended final product in the most economic and efficient manner. Our iron ore has low impurity
levels and other properties that generally lead to lower processing costs. For example, in addition
to its high grade, the alumina content of our iron ore is very low compared to Australian ores,
reducing consumption of coke and increasing productivity in blast furnaces, which is particularly
important during periods of high demand. When market demand is strong, our quality differential
generally becomes more valuable to customers. Second, steel companies often develop sales
relationships based on a reliable supply of a specific mix of iron ore and iron ore pellets. Our
ownership and operation of logistics facilities in the Northern and Southeastern Systems help us
ensure that our products are delivered on time and at a relatively low cost. We rely on long-term
contracts of affreightment to enhance our ability to offer our products in the Asian market at
competitive prices on a CFR basis, despite higher transportation costs compared to Australian
producers. To support our commercial strategy for our iron ore business, we operate two
distribution centers, one in Malaysia and one in Oman and we have long-term agreements with
five ports in China, which also serve as distribution centers.

In 2015, we launched the Brazilian blend fines (BRBF), a product resulting from blending fines
from Carajás, which contain a higher concentration of iron and a lower concentration of silica in
the ore, with fines from the Southern and Southeastern Systems, which contain a lower
concentration of iron in the ore. The resulting blend offers strong performance in any kind of
sintering operation. It is blended and sold in our Teluk Rubiah Maritime Terminal in Malaysia
and in five distribution centers in China, which reduces the time to reach Asian markets and
increases our distribution capillarity by using smaller vessels.

 Europe—Our main competitors in the European market are Luossavaara Kiirunavaara AB

(‘‘LKAB’’), ArcelorMittal Mines Canada Inc., Iron Ore Company of Canada (‘‘IOC’’), a
subsidiary of Rio Tinto., Kumba Iron Ore Limited and Société Nationale Industrielle et Miniére
(‘‘SNIM’’). We are competitive in the European market for the same reasons as in Asia, but also
due to the proximity of our port facilities to European customers.

 Brazil—The Brazilian iron ore market is also competitive, and includes several small iron ore
producers. Some steel companies, including Gerdau S.A. (‘‘Gerdau’’), Companhia Siderúrgica
Nacional (‘‘CSN’’), Vallourec Tubos do Brasil S.A., Usiminas and Arcelor Mittal, also have iron
ore mining operations. Although pricing is relevant, quality and reliability are important
competitive factors as well. We believe that our integrated transportation systems, high-quality ore
and technical services make us a strong competitor in the Brazilian market.

With respect to pellets, our major competitors are LKAB, Iron Ore Company of Canada (IOC),
Ferrexpo, Arcelor Mittal Mines Canada (former Quebec Cartier Mining Co.) and Bahrain Steel (former Gulf
Industrial Investment Co.).

35
 1.2 Manganese ore and ferroalloys

1.2.1 Manganese ore operations and production

We conduct our manganese mining operations in Brazil through Vale S.A. and our wholly-owned
subsidiaries Vale Manganês S.A. (‘‘Vale Manganês’’) and MCR. Our mining operations are carried out under
concessions from the federal government granted for an indefinite period. Our mines produce metallurgical
ore, used primarily for the production of manganese ferroalloys, raw material to produce carbon and stainless
steel.

Mining Access/
complex Company Location Description/History Mineralization Operations Power source Transportation
Azul . . . . . Vale S.A. State of Pará Open-pit mining High and medium- Crushing and Supplied Manganese ore is
operations and grade ores classification through the transported by truck
on-site (22-53% steps, national and EFC railroad to
beneficiation plant. manganese grade). producing electricity the Ponta da Madeira
lumps and grid. maritime terminal.
fines. Produced
directly by
Vale or
acquired
through
power
purchase
agreements.

Morro da
Mina . . . . Vale State of Open-pit mining Medium and Crushing, Supplied Manganese ore is
Manganês Minas Gerais operations and one low-grade ores (an screening and through the transported by trucks
major beneficiation average content of dense-heavy national to the Barbacena
plant. In January 31% manganese medium electricity ferroalloy plant.
2015, we grade). separation grid.
suspended DMS / HMS Acquired
operations due to process from regional
market conditions. producing utility
In October 2016, lumps to the companies.
we resumed Barbacena
operations to ferroalloy
provide manganese plant.
ore to the
Barbacena
ferroalloy plant.

Urucum . . . MCR State of Mato Underground High-grade ores Crushing and Supplied Manganese ore is
Grosso do mining operations (an average classification through the transported by barges
Sul and on-site content of 46% steps, national traveling along the
beneficiation plant. manganese grade). producing electricity Paraguay and Paraná
lumps and grid. rivers to transhipper.
fines. Acquired
from regional
utility
companies.

The following table sets forth information about our manganese ore production, obtained after
beneficiation process, and mass recovery for the year of 2016.

Production for the year ended December 31, 2016 process

Mine Type 2014 2015 2016 recovery
(million metric tons) (%)
Azul . . . . . . . . . . . . . . . . . . . . . . . Open pit 1.7 1.7 1.7 51.2
Morro da Mina(1) . . . . . . . . . . . . . . . Open pit 0.1 – 0.0 70.0
Urucum . . . . . . . . . . . . . . . . . . . . . Underground 0.6 0.7 0.7 82.0
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4 2.4 2.4

(1) We suspended operations at Morro da Mina Mine in 2015 due to market conditions. We resumed operations in October 2016 to
provide manganese ore to the Barbacena ferroalloy plant.

36
 Lines of Business

1.2.2 Manganese ferroalloys operations and production

We conduct our manganese ferroalloys business through our wholly-owned subsidiary Vale Manganês.
The production of manganese ferroalloys consumes significant amounts of electricity, which is provided
through power purchase agreements. For information on the risks associated with potential energy shortages,
see Risk factors.

We produce several types of manganese ferroalloys, such as high carbon and medium carbon ferro-
manganese and ferro-silicon manganese.

Plant Location Description/History Nominal capacity Power source

Minas Gerais Plants . . Cities of Barbacena and Barbacena has six furnaces, Barbacena: 66,000 tons Supplied through the
Ouro Preto two of which are refining per year (54,000 tons national electricity grid.
furnaces and a briquetting per year of ferro-silicon Acquired through
plant. Ouro Preto has three manganese and 12,000 power purchase
furnaces which are currently tons per year of ferro- agreements.
not operating. manganese medium
carbon).
Ouro Preto: 64,000 tons
per year of ferro-silicon
manganese.

Bahia Plant . . . . . . . City of Simões Filho Four furnaces, two converters 135,000 tons per year Supplied through the
and a sintering plant. (42,000 tons per year of national electricity grid.
ferro-silicon manganese Energy acquired from
and 93,000 tons per CHESF or through
year of high carbon power purchase
ferro-manganese). The agreements.
plant has a capacity to
refine until 40,000 tons
per year of ferro-
manganese high carbon
to produce ferro-
manganese medium
carbon alloy, according
to market demand.

The following table sets forth information about our manganese ferroalloys production.

Production for the year ended December 31(1),

Plant 2014 2015 2016
(thousand metric tons)
Barbacena . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 6 48
Ouro Preto . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 1 –
Simões Filho . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113 92 77
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171 99 124

(1) Production figures reflect unfinished material, which is further processed by a crushing and screening facility. Average mass recovery in
this process is 85%.

We suspended operations at the Ouro Preto plant in February 2014, due to market conditions. In
January 2015, the power purchase agreement pursuant to which we acquire energy for our Barbacena and
Ouro Preto plants expired, and we also suspended operations in our Barbacena plant. The Barbacena plant
resumed operations in February 2016. We are considering power supply alternatives to these plants, taking
into consideration the energy prices and current market conditions for manganese ferroalloys.

37
 1.2.3 Manganese ore and ferroalloys: sales and competition

The markets for manganese ore and ferroalloys are highly competitive. Competition in the manganese
ore market takes place in two segments. High and medium-grade manganese ore competes on a global
seaborne basis, while low-grade ore competes on a regional basis. For some manganese ferroalloys, high and
medium-grade ore is mandatory, while for other ores are complementary. The main suppliers of high-grade
ores are located in South Africa, Gabon, Australia and Brazil. The main producers of low-grade ores are
located in the Ukraine, China, Ghana, Kazakhstan, India and Mexico.

We compete in the seaborne market with both high- and medium-grade ores from Azul and Urucum
mines, where we benefit from extensive synergies with our iron ore operations, from mine to rail to port to
vessels operations. Our main competitors in this segment are South32 (Australia and South Africa) and
Eramet (Gabon). Our low-grade ores are consumed internally in our ferroalloy smelters.

The manganese ferroalloy market is characterized by a large number of participants who compete
primarily on the basis of price. Our competitors are located principally in countries that produce manganese
ore or carbon steel. Potential entrants and substitutes come from silicon or chrome ferroalloys, who can
occasionally shift to manganese, and from electrolytic manganese producers. Competitors may be either
integrated smelters like us, who feed manganese ore from their own mines, or non-integrated smelters. The
principal competitive factors in this market are the costs of manganese ore, electricity, logistics and reductants
such as coke, coal and charcoal. We compete with both stand-alone producers and integrated producers that
also mine their own ore.

Focusing mainly in the Brazilian and South American steelmaking customers, our ferroalloys
operations also benefit from synergies with our iron ore sales, marketing, procurement and logistics activities.
We buy our energy and coke supplies at reasonable market prices both though medium- and long-term
contracts. Competitors in the Brazilian market are about a dozen smelters with capacities from five to
90 thousand tons per year, most non-integrated ones and some of them are customers of our manganese ores.
We have a distinctive advantage in comparison to them in producing higher manganese content ferroalloys.

38
 Lines of Business

2. Base metals

2.1 Nickel

2.1.1 Operations

We conduct our nickel operations primarily through our wholly-owned subsidiary Vale Canada, which operates two nickel production systems,
one in the North Atlantic region and the other in the Asia Pacific region. We also produce copper as a coproduct in our nickel operations in Canada
and, through Vale S.A., operate a third nickel production system, Onça Puma, in the South Atlantic region. Our nickel operations are set forth in the
following table.
Company/Mining System Location Description/History Operations Mining title Power source Access/Transportation
North Atlantic:
Vale Canada . . . . . . . . Canada— Integrated mining, milling, smelting and • Nickel. Primarily underground mining Patented mineral Supplied by Located by the Trans-
Sudbury, refining operations to process ore into operations with nickel sulfide ore rights with no Ontario’s provincial Canada highway and
Ontario finished nickel with a nominal capacity bodies, which also contain some expiration date; electricity grid and the two major railways
of 66,000 metric tons of refined nickel copper, cobalt, PGMs, gold and mineral leases produced directly by that pass through the
per year and additional nickel oxide feed silver. We also process external feeds expiring Vale. Sudbury area. Finished
for the refinery in Wales and our nickel from third parties and from our between 2017 products are delivered
plants in Asia. Mining operations in Voisey’s Bay operation. We plan to and 2037; and to the North American
39

Sudbury began in 1885. We acquired the cease processing Voisey’s Bay feed in mining licenses of market by truck. For
Sudbury operations in 2006. Sudbury during the year of 2017. In occupation with overseas customers, the
addition to producing finished nickel indefinite products are loaded
in Sudbury, we ship a nickel oxide expiration date(1). into containers and
intermediate product to our nickel travel intermodally
refinery in Wales for processing to (truck/rail/
final products. We also have containership) through
capabilities to ship nickel oxide to both east and west
our Asian refineries. As part of our coast Canadian ports.
efforts to reduce sulfur dioxide and
other air emissions to meet
regulatory changes in Ontario and
Manitoba, and to rationalize our
smelting and refining assets across
Canada, we will modify our processes
including switching to a single flash
furnace in Sudbury in 2017.
• Copper. We produce two
intermediate copper products,
copper concentrate and copper
anode, and we also produce a
finished copper product,
electrowon copper cathode. We
will switch to a single flash furnace
in Sudbury in 2017 and as a result,
we will cease copper anode
production resulting in increased
production of copper concentrate
and copper matte.
 Company/Mining System Location Description/History Operations Mining title Power source Access/Transportation
Vale Canada . . . . . . . . Canada— Integrated mining, milling, smelting and • Nickel. Primarily underground Order in Council Supplied by Finished products are
Thompson, refining operations to process ore into mining operations with nickel leases expiring Manitoba’s delivered to market by
Manitoba finished nickel with a nominal capacity sulfide ore bodies, which also between 2020 provincial utility truck in North America.
of 38,000 metric tons of refined nickel contain some copper and cobalt. and 2025; mineral company. For overseas customers,
per year. We intend to phase out Local concentrate is combined with leases expiring the products are loaded
smelting and refining activities in nickel concentrate from our in 2034. into containers and
Thompson by 2018. Thompson Voisey’s Bay operations for travel intermodally
mineralization was discovered in 1956, smelting and refining to high (truck/rail/
and Thompson operations were acquired quality nickel plate product. We containership) to final
by us in 2006. expect to decommission one of the destination through
two furnaces in Thompson in 2017 both west coast and
and the other in 2018. We also east coast Canadian
expect to cease processing Voisey’s ports.
Bay feed in Thompson during the
year of 2017. We plan to send the
40

majority of the feed from

Thompson to be refined in Long
Harbour and Sudbury. We intend
to phase out smelting and refining
activities in Thompson by 2018,
due primarily to the capital costs
associated with the federal sulfur
dioxide emission limits defined
under the pollution prevention
plan under the Canadian
Environmental Protection Act
(CEPA), as well as to declining
feed availability. We have secured
an extension for implementation of
our current sulfur dioxide emission
reduction plan, which permits
smelting and refining
through 2018, subject to negotiated
emission limits.
 Lines of Business
Company/Mining System Location Description/History Operations Mining title Power source Access/Transportation
Vale Newfoundland &
Labrador Limited . . . . . Canada— Integrated open-pit mining and milling Comprised of the Ovoid open pit mine, Mining lease Power at Voisey’s The nickel and copper
Voisey’s Bay operation at Voisey’s Bay producing and deposits for underground operations expiring in 2027, Bay is 100% concentrates from
and Long nickel and copper concentrates with at a later stage. We mine nickel sulfide with a right of supplied through Voisey’s Bay are
Harbour, refining of nickel concentrate at Long ore bodies, which also contain copper further renewals Vale owned diesel transported to the port
Newfoundland Harbour into finished metal products and cobalt. The Long Harbour facility for 10-year periods. generators. Power at by haulage trucks and
and Labrador with an expected nominal capacity of continued to ramp up in 2016. In 2016, the Long Harbour then shipped by drybulk
approximately 50,000 metric tons of Long Harbour facility only processed refinery is supplied vessels to either
refined nickel per year upon ramp-up. Voisey’s Bay high-grade nickel by the overseas markets or to
Voisey’s Bay’s operations started in 2005 concentrates and no longer nickel in Newfoundland and our Long Harbour and
and was purchased by us in 2006. matte from PTVI. In 2017, as a result of Labrador provincial other Canadian
the continuing ramp-up of the Long utility company. operations for further
Harbour nickel refinery, copper cathode refining.
and cobalt metal will be produced for
41

the first time. The portion of mid-grade

and high-grade concentrate not shipped
to Long Harbour in 2017 will be shipped
to our Sudbury and Thompson
operations for final processing (smelting
and refining) while copper concentrate
will be sold to the market. Shipments of
nickel concentrate to Sudbury and
Thompson are expected to cease by the
end of 2017. We expect the ramp-up to
continue at Long Harbour until the end
of 2018.
Vale Europe Limited . . . U.K.— Stand-alone nickel refinery (producer of Processes a nickel intermediate product, – Supplied through the Transported to final
Clydach, finished nickel), with nominal capacity of nickel oxide, supplied from our Sudbury national electricity customer in the UK
Wales 40,000 metric tons per year. The Clydach and Matsuzaka operations to produce grid. and continental Europe
refinery commenced operations in 1902 finished nickel in the form of powders by truck. Products for
and was acquired by us in 2006. and pellets. overseas customers are
trucked to the ports of
Southampton and
Liverpool and shipped
by ocean container.
 Company/Mining System Location Description/History Operations Mining title Power source Access/Transportation
Asia Pacific
PT Vale Indonesia Tbk
(‘‘PTVI’’) . . . . . . . . . . Indonesia— Open cast mining area and related PTVI mines nickel laterite ore and Contract of work Produced primarily Trucked approximately
Sorowako, processing facility (producer of nickel produces nickel matte, which is shipped expiring in 2025, by PTVI’s low cost 55 km to the river port
Sulawesi matte, an intermediate product) with a primarily to our nickel refinery in Japan. entitled to two hydroelectric power at Malili and then
nominal capacity of approximately 80,000 Pursuant to life-of-mine off-take consecutive plants on the Larona loaded onto barges in
metric tons of nickel in matte per year. agreements, PTVI sells 80% of its ten-year extensions, River (there are order to load
PTVI’s shares are traded on the production to our wholly-owned subject to approval currently three break-bulk vessels for
Indonesia Stock Exchange. We indirectly subsidiary Vale Canada and 20% of its of the Indonesian facilities). PTVI has onward shipment.
hold 59.2% of PTVI’s share capital, production to Sumitomo. government. See thermal generating
Sumitomo Metal Mining Co., Ltd Regulatory facilities in order to
(‘‘Sumitomo’’) holds 20.2%, Sumitomo matters—Mining supplement its
Corporation holds 0.1% and the public rights and regulation hydroelectric power
holds 20.5%. PTVI was established of mining activities. supply with a source
42

in 1968, commenced its commercial of energy that is not

operations in 1978 and was acquired by subject to
us in 2006. hydrological factors.
Vale Nouvelle-
Calédonie S.A.S (‘‘VNC’’) New Mining and processing operations We are currently ramping up our nickel Mining concessions Supplied through the Products are packed
Caledonia— (producer of nickel oxide, nickel operation in New Caledonia. VNC expiring national electricity into containers and are
Southern hydroxide and cobalt carbonate). We utilizes a High Pressure Acid Leach between 2017 grid and by trucked approximately 4
Province hold 95% of VNC’s shares and the (‘‘HPAL’’) process to treat limonitic and 2051(3). independent km to Prony port and
remaining 5% is held by Société de laterite and saprolitic laterite ores. We producers. shipped by ocean
Participation Minière du Sud Caledonien expect to continue to ramp-up VNC over container.
SAS (‘‘SPMSC’’) SPMSC has an the next four years to reach nominal
obligation to increase its stake in VNC production capacity of 57,000 metric tons
to 10% within two years after the startup per year of nickel contained in nickel
of commercial production. oxide, which will be further processed in
our refineries in Asia, and hydroxide
cake form (IPNM), and 4,500 metric
tons of cobalt in carbonate form.
 Lines of Business
Company/Mining System Location Description/History Operations Mining title Power source Access/Transportation
Vale Japan Limited . . . . Japan— Stand-alone nickel refinery (producer of Produces intermediate products for – Supplied through the Products trucked over
Matsuzaka intermediate and finished nickel), with a further processing in our refineries in national electricity public roads to
nominal capacity of 60,000 metric tons Asia and the UK, and finished nickel grid. Acquired from customers in Japan. For
per year. We own 87.2% of the shares, products using nickel matte sourced from regional utility overseas customers, the
and Sumitomo owns the remaining PTVI. companies. product is loaded into
shares. The refinery was built in 1965 containers at the plant
and was acquired by us in 2006. and shipped from the
ports of Yokkaichi and
Nagoya.
Vale Taiwan Limited . . . . Taiwan— Stand-alone nickel refinery (producer of Produces finished nickel for the stainless – Supplied through the Trucked over public
Kaoshiung finished nickel), with nominal capacity of steel industry, primarily using national electricity roads to customers in
18,000 metric tons per year. The refinery intermediate products from our grid. Acquired from Taiwan. For overseas
commenced production in 1983 and was Matsuzaka and New Caledonian regional utility customers, the product
acquired by us in 2006. operations. companies. is loaded into
containers at the plant
and shipped from the
port of Kaoshiung.
Vale Nickel
(Dalian) Co., Ltd . . . . . China— Stand-alone nickel refinery (producer of Produces finished nickel for the stainless – Supplied through the Product transported
43

Dalian, finished nickel), with nominal capacity of steel industry, primarily using national electricity over public roads by
Liaoning 32,000 metric tons per year. We own intermediate products from our grid. Acquired from truck and by railway to
98.3% of the shares and Ningbo Sunhu Matsuzaka and New Caledonian regional utility customers in China. It
Chemical Products Co., Ltd. owns the operations. companies. is also shipped in ocean
remaining 1.7%. The refinery containers to overseas
commenced production in 2008. and some domestic
customers.
South Atlantic
Vale/Onça Puma . . . . . . Brazil— Mining and smelting operation producing The Onça Puma mine is built on lateritic Mining concession Supplied through the The ferro-nickel is
Ourilândia do a high quality ferronickel for application nickel deposits of saprolitic laterite ore. for indefinite national electricity transported by truck to
Norte, Pará within the stainless steel industry. The operation produces ferronickel via period. grid. Produced the Vila do Conde
the rotary kiln-electric furnace process. directly by Vale or maritime terminal in
We are currently operating with a single acquired through the Brazilian state of
line, with nominal capacity estimated at power purchase Pará, and exported in
27,000 metric tons per year. We will agreements. ocean containers.
evaluate opportunities to restart the
second line operations in light of market
conditions and the associated business
case.

(1) In Sudbury, ten mining leases are scheduled to expire in 2017. We have submitted applications for renewal of these leases and the approval process is ongoing. We can continue to operate
while the approval process is ongoing.
(2) In March 2016, Vale Canada purchased the entire equity interest in VNC held by Sumic, a joint venture between Sumitomo and Mitsui. In April 2017, Vale Canada will pay to Sumic the share
purchase price of US$135 million and repay a total amount of US$225 million in debt funding provided by Sumic to VNC.
(3) VNC has requested a renewal of concessions that were scheduled to expire in 2015 and 2016. We can continue to operate while the approval process is ongoing.
 2.1.2 Production

The following table sets forth our annual mine production by operating mine (or, on an aggregate
basis in the case of the Sulawesi operating areas operated by PTVI in Indonesia, because it is organized by
mining areas rather than individual mines) and the average percentage grades of nickel and copper. The mine
production at Sulawesi represents the product from PTVI’s screening station delivered to PTVI’s processing
plant and does not include nickel losses due to drying and smelting. For our Sudbury, Thompson and Voisey’s
Bay operations, the production and average grades represent the mine product delivered to those operations’
respective processing plants and do not include adjustments due to beneficiation, smelting or refining. For
Onça Puma’s operation, in Brazil and VNC’s operation, in New Caledonia, the production and average grade
represents in-place ore production and does not include losses due to processing.
2014(1) 2015(1) 2016(1)
Grade Grade Grade
Production Copper Nickel Production Copper Nickel Production Copper Nickel
Ontario operating mines
Copper Cliff North . . . . . . . . . 1,053 1.45 1.34 1,138 1.42 1.38 979 1.44 1.26
Creighton . . . . . . . . . . . . . . 903 1.81 2.47 774 2.00 2.33 832 2.17 2.76
Stobie . . . . . . . . . . . . . . . . 2,089 0.58 0.66 1,471 0.63 0.73 1,373 0.57 0.64
Garson . . . . . . . . . . . . . . . . 678 1.39 1.75 778 1.39 1.94 711 1.34 1.91
Coleman . . . . . . . . . . . . . . . 1,385 3.10 1.52 1,309 2.95 1.56 1,209 3.76 1.47
Ellen . . . . . . . . . . . . . . . . . 181 0.62 1.07 165 0.70 0.95 75 0.42 0.88
Totten . . . . . . . . . . . . . . . . 303 1.98 1.50 528 1.88 1.62 671 1.86 1.43
Total Ontario operations . . . 6,591 1.57 1.36 6,164 1.64 1.46 5,850 1.84 1.47

Manitoba operating mines

Thompson . . . . . . . . . . . . . . 1,184  1.95 1,163  1.82 1,140  1.97
Birchtree . . . . . . . . . . . . . . 545  1.39 564  1.47 503  1.36
Total Manitoba operations . . 1,729  1.78 1,727  1.71 1,643  1.78

Voisey’s Bay operating mines

Ovoid . . . . . . . . . . . . . . . . 2,243 1.54 2.58 2,328 1.51 2.57 2,392 1.44 2.62

Sulawesi operating mining areas

Sorowako . . . . . . . . . . . . . . 4,391  1.99 4,694  1.99 4,708  1.93

New Caledonia operating mines

VNC . . . . . . . . . . . . . . . . . 2,134  1.44 2,561  1.41 2,919  1.53

Brazil operating mines

Onça Puma . . . . . . . . . . . . . 1,358  2.19 1,024  2.13 1,710  2.04

(1) Production is stated in thousands of metric tons. Grade is % of copper or nickel, respectively.

44
 Lines of Business

The following table sets forth information about our nickel production, including: nickel refined
through our facilities and intermediates designated for sale. The numbers below are reported on a contained
nickel ore-source basis.
Finished production by ore source for the year
ended December 31,
Mine Type 2014 2015 2016
(thousand metric tons contained nickel)
Sudbury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Underground 64.3 54.4 80.4
Thompson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Underground 26.1 24.8 26.5
Voisey’s Bay(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 48.3 53.0 49.0
Sorowako(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Open cast 78.7 79.5 81.1
Onça Puma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 21.4 24.4 24.1
New Caledonia(3) . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 18.7 26.9 34.3
External(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – 17.5 27.6 15.6
Total(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 274.9 290.6 311.0

(1) Includes finished nickel produced at Long Harbour, Sudbury and Thompson.
(2) These figures have not been adjusted to reflect our ownership. We have a 59.2% interest in PTVI, which owns the Sorowako mines.
(3) These figures have not been adjusted to reflect our ownership. We have a 95.0% interest in VNC.
(4) Finished nickel processed at our facilities using feeds purchased from unrelated parties.
(5) These figures do not include tolling of feeds for unrelated parties.

2.1.3 Customers and sales

Our nickel customers are broadly distributed on a global basis. In 2016, 47% of our refined nickel
sales were delivered to customers in Asia, 27% to Europe, 24% to North America and 1% to other markets.
We have short-term fixed-volume contracts with customers for the majority of our expected annual nickel
sales. These contracts generally provide stable demand for a significant portion of our annual production.

Nickel is an exchange-traded metal, listed on the London Metal Exchange (‘‘LME’’) and Shanghai
Futures Exchange (‘‘SHFE’’), and most nickel products are priced according to a discount or premium to the
LME price, depending primarily on the nickel product’s physical and technical characteristics. Our finished
nickel products represent what is known in the industry as ‘‘primary’’ nickel, meaning nickel produced
principally from nickel ores (as opposed to ‘‘secondary’’ nickel, which is recovered from recycled nickel-
containing material). Finished primary nickel products are distinguishable in terms of the following
characteristics, which determine the product price level and the suitability for various end-use applications:

 nickel content and purity level: (i) intermediates have various levels of nickel content, (ii) nickel
pig iron has 1.5-15% nickel, (iii) ferro-nickel has 15-40% nickel, (iv) refined nickel with less than
99.8% nickel, including products such as Tonimet and Utility nickel, (v) standard LME grade
nickel has a minimum of 99.8% nickel, and (vi) high purity nickel has a minimum of 99.9% nickel
and does not contain specific elemental impurities;

 shape (such as pellets, discs, squares, and strips); and

 size (from sub-micron powder particles to large full sized cathodes)

In 2016, the principal end-use applications for nickel were:

 stainless steel (69% of global nickel consumption);

 non-ferrous alloys, alloy steels and foundry applications (18% of global nickel consumption);

45
  nickel plating (7% of global nickel consumption); and

 specialty applications, such as batteries, chemicals and powder metallurgy (6% of global nickel
consumption).

In 2016, 58% of our refined nickel sales were made into non-stainless steel applications, compared to
the industry average for primary nickel producers of 30%. This brings more diversification and sales volume
stability to our nickel revenues. As a result of our focus on such higher-value segments, our average realized
nickel prices for refined nickel have typically exceeded LME cash nickel prices.

We offer sales and technical support to our customers on a global basis through an established
marketing network headquartered at our head office in Toronto (Canada). We have a well-established global
marketing network for finished nickel, based at our head office in Toronto (Canada). We also have sales and
technical support distributed around the world with primary back offices in Singapore and Toronto (Canada)
and have sales managers located in St.Prex (Switzerland), Saddle Brook, New Jersey (United States) and at
several sites throughout Asia. For information about demand and prices, see Operating and financial review
and prospects—Major factors affecting prices.

2.1.4 Competition

The global nickel market is highly competitive. Our key competitive strengths include our long-life
mines, our low cash costs of production relative to other nickel producers, sophisticated exploration and
processing technologies, and a diversified portfolio of products. Our global marketing reach, diverse product
mix, and technical support direct our products into applications and geographic regions that offer the highest
margins for our products.

Our nickel deliveries represented 16% of global consumption for primary nickel in 2016. In addition
to us, the largest mine-to-market integrated suppliers in the nickel industry (each with its own integrated
facilities, including nickel mining, processing, refining and marketing operations) are Nornickel, Glencore,
Jinchuan Nonferrous Metals Corporation and Sumitomo Metal Mining Co. Ltd. Together with us, these
companies accounted for about 38% of global refined primary nickel production in 2016.

While stainless steel production is a major driver of global nickel demand, stainless steel producers
can obtain nickel with a wide range of nickel content, including secondary nickel (scrap). The choice between
primary and secondary nickel is largely based on their relative prices and availability. See Operating and
Financial Review and Prospects—Major factors affecting prices—Nickel.

Competition in the nickel market is based primarily on quality and reliability of supply and price. We
believe our operations are competitive in the nickel market because of the high quality of our nickel products
and our relatively low production costs.

46
 Lines of Business

2.2 Copper

2.2.1 Operations

We conduct our copper operations at the parent-company level in Brazil and through our subsidiaries in Canada.
Mining complex/Location Location Description/History Mineralization/Operations Mining title Power source Access/Transportation
Brazil:
Vale/Sossego . . . . . . . . Carajás, state Two main copper ore The copper ore is mined Mining concession Supplied through the We truck the concentrate
of Pará. bodies, Sossego and using the open-pit method, for an indefinite national electricity to a storage terminal in
Sequeirinho, and a and the run-of-mine is period. grid. Produced Parauapebas and then
processing facility to processed by means of directly by Vale or transport it via the EFC
concentrate the ore. standard primary crushing acquired through railroad to the Itaqui Port
Sossego was developed by and conveying, SAG power purchase in São Luı́s, in the
Vale. Production started in milling (a semi-autogenous agreements. Brazilian state of
47

2004 and has a nominal mill that uses a large Maranhão. We constructed
capacity of 100,000 tpy of rotating drum filled with an 85-kilometer road to
copper in concentrates. ore, water and steel link Sossego to
grinding balls to transform Parauapebas.
the ore into a fine slurry),
ball milling, copper
concentrate flotation,
tailings disposal,
concentrate thickening,
filtration and load out.
Vale/Salobo . . . . . . . . . Carajás, state Salobo I processing plant Our Salobo copper mine is Mining concession Supplied through the We truck the concentrate
of Pará. started production in 2012 mined using the open-pit for an indefinite national electricity to a storage terminal in
and has a total capacity of method, and the period. grid. Acquired Parauapebas and then
100,000 tpy of copper in run-of-mine is processed by through power transport it via the EFC
concentrates. The open pit means of standard primary purchase railroad to the Itaqui Port
mine and mill concluded and secondary crushing, agreements. in São Luı́s, in the
their ramp up in the fourth conveying, roller press Brazilian state of
quarter of 2016 to a grinding, ball milling, Maranhão. We constructed
capacity of 200,000 tpy of copper concentrate a 90-kilometer road to link
copper in concentrates flotation, tailings disposal, Salobo to Parauapebas.
with the full concentrate thickening,
implementation of Salobo filtration and load out.
II expansion.
 Mining complex/Location Location Description/History Mineralization/Operations Mining title Power source Access/Transportation
Canada:
Vale Canada . . . . . . . . Canada— See —Base metals—Nickel—Operations
Sudbury,
Ontario
Vale Canada/ Voisey’s
Bay . . . . . . . . . . . . Canada— See —Base metals—Nickel—Operations
Voisey’s Bay,
Newfoundland
and Labrador
48

Zambia:
Lubambe . . . . . . . . . . Zambian Lubambe copper mine, Nominal production Mining concessions Long-term energy Copper concentrates are
Copperbelt which includes an capacity of 45,000 metric expiring in 2033. supply contract with transported by truck to
underground mine, plant tons per year of copper in Zesco (Zambian local smelters.
and related infrastructure. concentrates. Production state owned power
Teal Minerals (‘‘TEAL’’) started in October 2012. supplier).
(our 50/50 joint venture
with African Rainbow
Minerals (‘‘ARM’’)) has an
80% indirect stake in
Lubambe. ZCCM
Investments Holdings PLC
holds the remaining (20%)
stake.
 Lines of Business

2.2.2 Production

The following table sets forth our annual mine production in our Salobo and Sossego mines and the
average percentage grades of copper. The production and average grade represents in-place ore production
and does not include losses due to processing. For the annual production of copper as a coproduct in our
nickel operations, see—Base metals—Nickel—Production.

2014(1) 2015(1) 2016(1)

Production Grade Production Grade Production Grade
Brazil
Sossego . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,105 0.86 12,857 0.93 12,687 0.82
Salobo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,644 0.84 44,296 0.62 57,279 0.62
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,749 0.85 57,153 0.69 69,966 0.66

(1) Production is stated in thousands of metric tons. Grade is % of copper.

The following table sets forth information on our copper production.

Finished production by ore source for the

year ended December 31,
Mine Type 2014 2015 2016
(thousand metric tons)
Brazil:
Salobo . . . . . . . . . . . . . . . . . . . . . . . Open pit 98 155 176
Sossego . . . . . . . . . . . . . . . . . . . . . . Open pit 110 104 93
Canada: (as coproduct of nickel operations)
Sudbury . . . . . . . . . . . . . . . . . . . . . . Underground 98 98 122
Voisey’s Bay . . . . . . . . . . . . . . . . . . . Open pit 33 32 32
Thompson . . . . . . . . . . . . . . . . . . . . . Underground 2 1 3
External(1) . . . . . . . . . . . . . . . . . . . .  29 23 21
Zambia:
Lubambe(2) . . . . . . . . . . . . . . . . . . . . Underground 10 10 8
Total . . . . . . . . . . . . . . . . . . . . . . 380 424 453

(1) We process copper at our facilities using feed purchased from unrelated parties.
(2) Vale’s attributable production capacity of 40%, which represents 80% of indirect interest through our 50% participation.

2.2.3 Customers and sales

We sell copper concentrates from Sossego and Salobo under medium and long-term contracts to
copper smelters in Europe, India and Asia. We have medium-term copper supply agreements with Glencore
Canada Corporation for part of the copper concentrates produced in Sudbury, which are also sold under
long-term contracts in Europe and Asia. We sell copper concentrates from Voisey’s Bay under long-term
contracts to customers in Europe and electrowon copper from Sudbury in North America under short-term
sales agreements.

2.2.4 Competition

The global refined copper market is highly competitive. Producers are integrated mining companies
and custom smelters, covering all regions of the world, while consumers are principally wire rod and copper-
alloy producers. Competition occurs mainly on a regional level and is based primarily on production costs,
quality, reliability of supply and logistics costs. The world’s largest copper cathode producers are Corporación
Nacional del Cobre de Chile (‘‘Codelco’’), Freeport McMoRan Copper & Gold Inc. (‘‘Freeport-McMoRan’’),
Aurubis AG, Jiangxi Copper Corporation Ltd. and Glencore, operating at the parent-company level or
through subsidiaries. Our participation in the global refined copper cathodes market is marginal as we
position ourselves more competitively in the copper concentrate market.

49
 Copper concentrate and copper anode are intermediate products in the copper production chain. Both
the concentrate and anode markets are competitive, having numerous producers but fewer participants and
smaller volumes than in the copper cathode market due to the high levels of integration by the major copper
producers.

In the copper concentrate market, mining occurs on a global basis with a predominant share from
South America, while consumers are custom smelters located mainly in Europe and Asia. Competition in the
custom copper concentrate market occurs mainly on a global level and is based on production costs, quality,
logistics costs and reliability of supply. The largest competitors in the copper concentrate market are
Glencore, BHP Billiton, Freeport McMoRan, Codelco, Anglo American and Antofagasta plc operating at the
parent-company level or through subsidiaries. Our market share in 2016 was about 4% of the total custom
copper concentrate market.

The copper anode/blister market is very limited; generally, anodes are produced to supply each
company’s integrated refinery. The trade in anodes/blister is limited to those facilities that have more smelting
capacity than refining capacity or to those situations where logistics cost savings provide an incentive to source
anodes from outside smelters. The largest competitors in the copper anode market in 2016 included Glencore,
First Quantum Minerals Ltd, Codelco, and China Nonferrous Metals, operating at the parent-company level
or through subsidiaries.

2.3 PGMs and other precious metals

As byproducts of our Sudbury nickel operations in Canada, we recover significant quantities of PGMs,
as well as small quantities of gold and silver. We operate a processing facility in Port Colborne, Ontario,
which produces PGMs, gold and silver intermediate products using feed from our Sudbury operation. We
have a refinery in Acton, England, where we process our intermediate products, as well as feeds purchased
from unrelated parties and toll-refined materials. In 2016, PGM concentrates from our Canadian operations
supplied about 88% of our PGM production, which also includes metals purchased from unrelated parties.
Our base metals marketing department sells our own PGMs and other precious metals, as well as products
from unrelated parties and toll-refined products, on a sales agency basis. Our copper concentrates from our
Salobo and Sossego mines in Carajás, in the Brazilian state of Pará, also contain gold, the value of which we
realize in the sale of those products.

In February 2013, we sold to Silver Wheaton 25% of the gold produced as a byproduct at our Salobo
copper mine, in Brazil, for the life of that mine, and 70% of the gold produced as a byproduct at our
Sudbury nickel mines, in Canada, for 20 years. In each of March 2015 and August 2016, we sold to Silver
Wheaton an additional 25% of the gold produced as a byproduct at our Salobo copper mine. In consideration
for the August 2016 sale, we received an initial cash payment of US$800 million, an option value of
approximately US$23 million from a reduction of the exercise price of the warrants of Silver Wheaton held by
Vale since 2013, and ongoing payments of the lesser of US$400 per ounce (subject to a 1% annual inflation
adjustment starting January 1, 2019) and the prevailing market price, for each ounce of gold that we deliver
under the agreement. We may receive an additional cash payment if we expand our capacity to process
Salobo copper ores to more than 28 Mtpy before 2036. The additional cash payment may range from
US$113 million to US$953 million, depending on ore grade, timing and size of the expansion. See Business
overview—Significant changes in our business. Pursuant to the gold stream contract, Silver Wheaton received
247,287 oz. of gold in 2016.

50
 Lines of Business

The following table sets forth information on the contained volume of precious metals as a byproduct
of our production of nickel and copper concentrates.

Mine Type 2014 2015 2016

(thousand troy ounces of contained metal)
Sudbury(1):
Platinum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Underground 182 154 166
Palladium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Underground 398 341 322
Gold(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Underground 83 89 98
Salobo:
Gold(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 160 251 317
Sossego:
Gold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 78 80 67

(1) Includes metal produced from unrelated parties feed purchases. Includes Ontario (Canada) and Acton (England) production. Excludes
tolling from unrelated parties.
(2) Figures represent 100% of Salobo and Sudbury contained volume of gold as a byproduct of our production of nickel and copper
concentrates and do not deduct the portion of the gold sold to Silver Wheaton.

2.4 Cobalt

We recover significant quantities of cobalt as a byproduct of our nickel operations. In 2016, we

produced 1,851 metric tons of refined cobalt metal at our Port Colborne refinery, 3,188 metric tons of cobalt
in a cobalt-based intermediate product at our nickel operations in New Caledonia, and our remaining cobalt
production consisted of 761 metric tons of cobalt contained in other intermediate products (such as nickel
concentrates). As a result of the ramp-up of VNC operations in New Caledonia, our production of cobalt
intermediate as a byproduct of our nickel production is increasing. We sell cobalt on a global basis. Our
cobalt metal is electro-refined at our Port Colborne refinery and has very high purity levels (99.8%) meeting
the LME contract specification. Cobalt metal is used in the production of various alloys, particularly for
aerospace applications, as well as the manufacture of cobalt-based chemicals. In 2016, Long Harbour
produced a cobalt intermediate with the operation expected to begin producing high quality cobalt metal in
2017.

The following table sets forth information on our cobalt production.

Finished production by ore source for the

year ended December 31,
Mine Type 2014 2015 2016
(contained metric tons)
Sudbury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Underground 833 751 882
Thompson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Underground 489 365 700
Voisey’s Bay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 952 849 887
New Caledonia . . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 1,384 2,391 3,188
Others(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  84 177 143
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,743 4,533 5,799

(1) These figures do not include tolling of feeds for unrelated parties. Includes cobalt processed at our facilities using feeds purchased from
unrelated parties and, for 2016, also includes 24 tonnes of ore sourced by PTVI.

51
 3. Coal

3.1 Operations

We produce metallurgical and thermal coal through our subsidiary Vale Moçambique, which operates the Moatize mine. We also have a minority
interest in a Chinese company, Henan Longyu Energy Resources Co., Ltd. (‘‘Longyu’’). In November 2016, we sold our coal operation in Carborough
Downs in Australia.
In September 2016, we agreed with Mitsui the new terms of our partnership in coal assets in Mozambique. Under the new terms, Mitsui agreed
to pay us an amount of up to US$450 million, consisting of: (i) an aggregate of US$255 million for 15% of Vale’s 95% stake in the Moatize coal mine
and (ii) an additional amount of up to US$195 million, subject to certain conditions, including mine performance. Mitsui will also contribute an amount
of approximately US$348million for a 50% stake of Nacala Logistics Corridor and extend a long-term facility of US$165 million to Nacala Logistics
Corridor. We completed the equity transaction with Mitsui on March 27, 2017. The total value of the transaction will be approximately US$770 million,
including all amounts mentioned above except the additional amount of up to US$195 million, which is subject to certain conditions, such as mining
performance, still to be satisfied. From these US$770 million, we received US$733 million upon completion of the equity transaction on March 27, 2017,
52

and we expect to receive the remainder upon closing of the project financing, which is expected to occur during 2017. If the project financing is not
signed before the end of 2017, Mitsui has certain rights to transfer its participation in the Moatize coal mine and the Nacala Logistics Corridor back to
us.

Company/
Mining complex Location Description/History Mineralization/ Operations Mining title Power source Access/ Transportation

Vale Moçambique
Moatize . . . . . . Tete, Open-cut mine, which was developed Produces metallurgical and thermal coal. Mining concession Supplied by local The coal is transported
Mozambique directly by Vale. Operations started in Moatize’s main branded product is the expiring in 2032, utility company. from the mine to the
August 2011 and are expected to reach a Chipanga premium hard coking coal, but renewable Back up supply on Beira Port by the Linha
nominal production capacity of 22 Mtpy, there is operational flexibility for multiple thereafter. site. do Sena railway and,
considering the Moatize expansion, products. The optimal product portfolio since January 2016, to
comprised of metallurgical and thermal will come as a result of market trials. Coal the port at
coal and the Nacala Logistics Corridor from the mines is currently processed at a Nacala-à-Velha via the
ramp up. Vale has an indirect 95.0% stake, CHPP with a capacity of 4,000 metric tons Nacala Logistics
and the remaining is owned by Empresa per hour. An additional CHPP began Corridor.
Moçambicana de Exploração Mineira, S.A. production in August 2016, which
Upon conclusion of the partnership increased feed capacity by additional
agreement, Mitsui will acquire 15% of our 4,000 metric tons per hour.
stake in Vale Moçambique.
 Lines of Business

3.2 Production

The following table sets forth information on our marketable coal production.

Production for the year ended December 31,

Operation Mine type 2014 2015 2016
(thousand metric tons)
Metallurgical coal:
Moatize(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Open-cut 3,124 3,401 3,480
Thermal coal:
Moatize(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Open-cut 1,784 1,559 2,012

(1) These figures correspond to 100% production at Moatize, and are not adjusted to reflect our ownership.

3.3 Customers and sales

Coal sales from our Moatize operations, in Mozambique, target global steel and energy markets,
including Asia, Africa, Europe and the Americas. Our Chinese coal joint venture directs its sales into the
Chinese domestic market.

3.4 Competition

The global coal industry comprises markets for black (metallurgical and thermal) and brown (lignite)
coal, and is highly competitive.

The demand for steel, especially in Asia, underpins demand for metallurgical coal, while demand for
electricity underpins demand for thermal coal. We expect some increase in coal supply from the United
States, Canada and Australia, driven by increased prices in the second half of 2016, which would thus
rebalance the market following the price increases caused by China intervention policies relating to domestic
coal production.

Competitiveness in the coal industry is based primarily on the economics of production costs, coal
quality, transportation costs and proximity to the market. Our key competitive strengths are completion of a
new and competitive transportation corridor, the proximity to the Atlantic and Indian markets (as compared
to our main competitors) and the size and quality of our reserves.

Major participants in the seaborne coal market are subsidiaries, affiliates and joint ventures of BHP
Billiton, Glencore, Anglo American, Rio Tinto, Teck, Peabody, PT Adaro Energy and the Shenhua Group,
among others.

53
4. Infrastructure

4.1 Logistics

We have developed our logistics business based on the transportation needs of our mining operations
and we also provide transportation services for other customers. We conduct our logistics businesses at the
parent-company level and through subsidiaries and joint ventures, as set forth in the table below.

Our share of capital

Company Business Location Voting Total Partners
(%)
Vale . . . . . . . . . . . . . Railroad (EFVM and EFC), Brazil – – –
port and maritime terminal
operations
VLI(1) . . . . . . . . . . . . Railroad, port, inland terminal Brazil 37.6 37.6 FI-FGTS, Mitsui and
and maritime terminal Brookfield
operations. Holding of
certain general cargo
logistics assets
MRS . . . . . . . . . . . . . Railroad operations Brazil 46.75 48.12 CSN, Congonhas Minérios,
Usiminas Participações e
Logı́sticas, Gerdau, Railvest
Investments and public
investors.
CPBS . . . . . . . . . . . . Port and maritime terminal Brazil 100 100 –
operations
PTVI . . . . . . . . . . . . . Port and maritime terminal Indonesia 59.2 59.2 Sumitomo, public investors
operations
Vale Logı́stica Argentina . Port operations Argentina 100 100 –
CEAR(2)(4) . . . . . . . . . Railroad Malawi 43.4 43.4 Portos e Caminhos de Ferro
de Moçambique, E.P.
CDN(3)(4) . . . . . . . . . Railroad and maritime Mozambique 43.4 43.4 Portos e Caminhos de Ferro
terminal operations de Moçambique, E.P.
CLN(4) . . . . . . . . . . . Railroad and port operations Mozambique 80.0 80.0 Portos e Caminhos de Ferro
de Moçambique, E.P.
Vale Logistics Limited
(‘‘VLL’’)(4) . . . . . . . .Railroad operations Malawi 100 100 –
Transbarge Navegación . . Paraná and Paraguay Paraguay 100 100 –
Waterway System (Convoys)
VNC . . . . . . . . . . . . . Port and maritime terminal New Caledonia 95.0 95.0 SPMSC
operations
VMM . . . . . . . . . . . . Port and maritime terminal Malaysia 100 100 –
operations
Vale Newfoundland &
Labrador Limited . . . . Port operations Voisey’s Bay and 100 100 –
Long Harbour, in
Newfoundland
and Labrador
Vale Oman Distribution
Center LLC . . . . . . . Port and maritime terminal Oman 100 100 –
operations

(1) BNDES holds debentures issued by Vale that are exchangeable into part of Vale’s stake in VLI. Vale’s equity interests in VLI may be
reduced by up to 8% if BNDES exercises its rights under those debentures.
(2) Vale controls its interest in CEAR through an 85% interest in Sociedade de Desenvolvimento do Corredor de Nacala (‘‘SDCN’’), which
owns 51% of CEAR.
(3) Vale controls its interest in CDN through an 85% interest in SDCN, which owns 51% of CDN.
(4) Upon completion of the transaction with Mitsui, we will hold indirectly 42.5% of the voting and total capital of CEAR, 42.5% of the
voting and total capital of CDN, 50% of the voting and total capital of CLN and 50% of the voting and total capital of VLL.

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 Lines of Business

4.1.1 Railroads

Brazil

Vitória a Minas railroad (‘‘EFVM’’). The EFVM railroad links our Southeastern System mines in the
Iron Quadrangle region in the Brazilian state of Minas Gerais to the Tubarão Port, in Vitória, in the Brazilian
state of Espı́rito Santo. We operate this 905-kilometer railroad under a 30-year renewable concession, which
expires in 2027. The EFVM railroad consists of two lines of track extending for a distance of 601 kilometers
to permit continuous railroad travel in opposite directions, and single-track branches of 304 kilometers.
Industrial manufacturers are located in this area and major agricultural regions are also accessible to it. VLI
has rights to use railroad transportation capacity on our EFVM railroad. In 2016, the EFVM railroad
transported a daily average of 329.3 thousand metric tons of iron ore and 61.1 thousand metric tons of other
cargo. The EFVM railroad also carried one million passengers in 2016. In 2016, we had a fleet of 325
locomotives and 19,135 wagons at EFVM, which were operated by Vale and third parties.

Carajás railroad (‘‘EFC’’). The EFC railroad links our Northern System mines in the Carajás region
in the Brazilian state of Pará to the Ponta da Madeira maritime terminal, in São Luis, in the Brazilian state
of Maranhão. We operate the EFC railroad under a 30-year renewable concession, which expires in 2027.
EFC extends for 997 kilometers from our Carajás mines to our Ponta da Madeira maritime terminal complex
facilities located near the Itaqui Port. Its main cargo is iron ore, principally carried for us. VLI has rights to
use railroad transportation capacity on our EFC railroad. In 2016, the EFC railroad transported a daily
average of 419 thousand metric tons of iron ore and 22.8 thousand metric tons of other cargo. EFC also
carried 293 thousand passengers in 2016. EFC supports the largest train, in terms of capacity, in Latin
America, which measures 3.5 kilometers, weighs 42.01 thousand gross metric tons when loaded and has 330
cars. In 2016, EFC had a fleet of 289 locomotives and 18,135 wagons, which were operated by Vale and third
parties.

The principal items of cargo of the EFVM and EFC railroads are:

 iron ore and iron ore pellets and manganese ore, carried for us and customers;

 steel, coal, pig iron, limestone and other raw materials carried for customers with steel mills
located along the railroad;

 agricultural products, such as soybeans, soybean meal and fertilizers; and

 other general cargo, such as pulp, fuel and chemical products.

We charge market prices for customer freight, including iron ore pellets originating from joint
ventures and other enterprises in which we do not have a 100% equity interest. Market prices vary based on
the distance traveled, the type of product transported and the weight of the freight in question, and are
regulated by the Brazilian transportation regulatory agency, ANTT (Agência Nacional de Transportes
Terrestres).

VLI. VLI provides integrated logistics solutions through 7,935 kilometers of railroads in Brazil (FCA
and FNS), eight inland terminals with a total storage capacity of 795,000 tons and three maritime terminals
and ports operations. We hold a 37.6% stake in VLI, and are party to a shareholders’ agreement with
FI-FGTS, Mitsui and Brookfield, which hold the remaining equity interests in VLI. VLI’s main assets are:

 Ferrovia Centro-Atlântica (‘‘FCA’’). Central-east regional railway network of the Brazilian national
railway system, held under a 30-year renewable concession, which expires in 2026. The central
east network has 7,215 kilometers of track, extending into the states of Sergipe, Bahia, Espı́rito
Santo, Minas Gerais, Rio de Janeiro, Goiás and the Federal District of Brazil;

55
  Ferrovia Norte-Sul railroad (‘‘FNS’’). A 30-year renewable subconcession for the commercial
operation of a 720-kilometer stretch of the North-South railroad in Brazil, between the cities
Açailandia, in the Brazilian state of Maranhão, and Porto Nacional, in the Brazilian state of
Tocantins. This railway is connected to EFC railroad, and creates a new corridor for the
transportation of general cargo, mainly for the export of soybeans, rice and corn produced in the
center-northern region of Brazil;

 Right to use capacity of our EFVM and EFC railroads for general cargo; and

 Right to use capacity of our Tubarão e Praia Mole terminals for general cargo.

In 2016, VLI transported a total of 31.98 billion ntk of general cargo, including 19.53 billion ntk from
FCA and FNS and 12.45 billion ntk through operational agreements with Vale.

MRS Logı́stica S.A. (‘‘MRS’’). The MRS railroad is 1,643 kilometers long and links the Brazilian
states of Rio de Janeiro, São Paulo and Minas Gerais. In 2016, the MRS railroad transported a daily average
of 338.8 thousand metric tons of iron ore and 122.0 thousand metric tons of other cargo.

Africa

We are concluding the ramp up of the Nacala Corridor, which connects the Moatize mine to the
Nacala-à-Velha maritime terminal, located in Nacala, Mozambique, and which crosses into the Republic of
Malawi. The Nacala Corridor consists of railway and port infrastructure, including greenfield and
rehabilitation of existing railways in Mozambique and Malawi and a new coal port terminal in Mozambique.
The Nacala Corridor will allow for the expansion of the Moatize mine and support our operations in
Southeastern Africa. In Mozambique, we are operating under two concession agreements, one related to the
Mozambican greenfield railway and another related to the newly constructed coal port, both held by our
subsidiary Corredor Logı́stico Integrado de Nacala S.A. (‘‘CLN’’), which will expire in 2042, subject to
renewal. We have also rehabilitated existing railroads under a concession held by our subsidiary Corredor de
Desenvolvimento do Norte S.A. (‘‘CDN’’), which will expire in 2035. In Malawi, we are operating under a
concession held by our subsidiary Vale Logistics Limited (‘‘VLL’’), which will expire in 2046, subject to
renewal, and we have also rehabilitated existing railroads under a concession held by our subsidiary, Central
East African Railway Company Limited (‘‘CEAR’’), which was extended in 2013 for a 30-year period from the
commencement of rail services under VLL’s greenfield railway concession.

In November 2016, we agreed the new terms of our partnership in coal assets in Mozambique with
Mitsui. Under these new terms, Mitsui will contribute an amount of approximately US$348 million for a 50%
stake of Nacala Logistics Corridor and extend a long-term facility of US$165 million to Nacala Logistics
Corridor. The completion of the equity transaction is subject to certain conditions precedent, including certain
conditions precedents relating to the completion of a project financing in the expected amount of
US$2.7 billion.

4.1.2 Ports and maritime terminals

Brazil

We operate a port and maritime terminals principally as a means to complete the delivery of our iron
ore and iron ore pellets to bulk carrier vessels serving the seaborne market. See Ferrous minerals—Iron ore
and iron ore pellets—Iron ore operations. We also use our port and terminals to handle customers’ cargo.

56
 Lines of Business

Tubarão and Praia Mole Ports. The Tubarão Port, which covers an area of 18 square kilometers, is
located near the Vitória Port in the Brazilian state of Espı́rito Santo and contains the iron ore maritime
terminal and the general cargo terminals (Terminal de Granéis Lı́quidos and the Terminal de Produtos
Diversos). The Praia Mole port is also located near the Vitória Port.

 The iron ore maritime terminal has two piers. From this terminal in the Tubarão Port, we export
mostly iron ore produced from our Southeastern system. Pier I can accommodate two vessels at a
time, one of up to 170,000 DWT on the southern side and one of up to 210,000 DWT on the
northern side. Pier II can accommodate one vessel of up to 405,000 DWT at a time, limited at 23
meters draft. In Pier I there are two ship loaders, which can load up to 13,500 metric tons per
hour each. In Pier II there are two ship loaders that work alternately and can each load up to
16,000 metric tons per hour continuously. In 2016, 100.7 million metric tons of iron ore and iron
ore pellets were shipped through the terminal for us. The iron ore maritime terminal has a
storage yard with a capacity of 3.42 million metric tons.

 The Terminal de Produtos Diversos handled 7.0 million metric tons of grains and fertilizers in
2016. VLI has the right to use the capacity of the Terminal de Produtos Diversos.

 The Terminal de Granéis Lı́quidos handled 531 thousand metric tons of fuel in 2016. VLI has the
right to use the capacity of the Terminal de Granéis Lı́quidos.

 The Praia Mole terminal is principally a coal terminal and handled 10.8 million metric tons of
coal and other related cargo in 2016. VLI has the right to use the capacity of the Praia Mole
terminal.

Ponta da Madeira maritime terminal. Our Ponta da Madeira maritime terminal is located near the
Itaqui Port, in the Brazilian state of Maranhão. Pier I can accommodate vessels of up to 420,000 DWT and
has a maximum loading rate of 16,000 tons per hour. Pier III, which has two berths and three shiploaders,
can accommodate vessels of up to 210,000 DWT at the south berth and 180,000 DWT at the north berth (or
two vessels of 180,000 DWT simultaneously), subject to tide conditions, and has a maximum loading rate of
8,000 metric tons per hour in each shiploader. Pier IV (south berth) is able to accommodate vessels of up to
420,000 DWT and have two ship loaders that work alternately with a maximum loading rate of 16,000 tons
per hour. Pier IV (north berth) is able to accommodate vessels of up to 420,000 DWT and have two ship
loaders that work alternately with a maximum loading rate of 16,000 tons per hour. In 2016, Pier IV (north
berth) performed pre-tests for a subsequent request for the definitive authorization to operate. Cargo shipped
through our Ponta da Madeira maritime terminal consists of the Northern system production of iron ore and
manganese. In 2016, 149.0 million metric tons of iron ore were handled through the terminal. The Ponta da
Madeira maritime terminal has a storage yard with a static capacity of 7.7 million tons, which will be
expanded to 10.7 million tons. VLI currently handles and stores fertilizers, grain, pig iron and manganese ore,
which are then shipped through the Itaqui Port.

Itaguaı́ maritime terminal—Cia. Portuária Baı́a de Sepetiba (‘‘CPBS’’). From this terminal we mostly
export iron ore from our Southern system. CPBS is a wholly-owned subsidiary that operates the Itaguaı́
terminal, at the Itaguaı́ Port, in Sepetiba in the Brazilian state of Rio de Janeiro, which is leased from
Companhia Docas do Rio de Janeiro (CDRJ). The Itaguaı́ port terminal has a pier with one berth that allows
the loading of ships up to 17.8 meters of draft and approximately 200,000 DWT of capacity. In 2016, the
terminal loaded 21.4 million metric tons of iron ore.

Guaı́ba Island maritime terminal. From this terminal we also export mostly iron ore from our
Southern system. We operate a maritime terminal on Guaı́ba Island in the Sepetiba Bay, in the Brazilian state
of Rio de Janeiro. The iron ore terminal has a pier with two berths that allows the loading of ships of up to
350,000 DWT. In 2016, the terminal loaded 46.1 million metric tons of iron ore.

57
 VLI also operates Inácio Barbosa maritime terminal (TMIB), owned by Petrobras, in the Brazilian
state of Sergipe; Santos maritime terminal (TIPLAM), in the Brazilian state of São Paulo, which is jointly
owned by VLI and Vale Fertilizantes; and Pier II in the Itaqui Port, which can accommodate vessels of up to
155,000 DWT and has a maximum loading rate of 4,500 tons per hour for pig iron and of 3,000 tons per hour
for grains.

Argentina

Vale Logı́stica Argentina S.A. (‘‘Vale Logı́stica Argentina’’) contracts third party services to operate
two terminals and a transhipper in Argentina. The terminals are located at Rosario port in the province of
Santa Fé and at San Nicolas port in the province of Buenos Aires. The transhipper is also located in the
province of Santa Fé. We handled 1.76 million metric tons of iron and manganese ore through these ports
and transhipper in 2016, which came from Corumbá, Brazil, via the Paraguay and Paraná rivers, for shipment
to Brazilian, Asian and European markets.

Canada

Vale Newfoundland and Labrador Limited operates a port as part of our mining operation at Voisey’s
Bay, Labrador and a port as part of our processing operation at Long Harbour, Newfoundland. The port at
Voisey’s Bay is used for shipping nickel, copper and re-supply. The port at Long Harbour is used to receive
nickel concentrate from Voisey’s Bay along with goods and materials required for the Long Harbour
operation.

Oman

Vale Oman Distribution Center LLC operates a distribution center in Liwa, Sultanate of Oman. The
maritime terminal has a large deep water jetty, a 600-meter long platform connected to the shore by means of
a 700-meter long trestle, and is integrated with a storage yard that has a throughput capacity to handle 40
Mtpy of iron ore and iron ore pellets per year. The loading nominal capacity is 10,000 tons per hour and the
nominal unloading capacity is 9,000 tons per hour.

Indonesia

PTVI owns and operates two ports in Indonesia to support its nickel mining activities.

 The Balantang Special Port is located in Balantang Village, South Sulawesi, and has two types of
piers, with total capacity of 10,000 DWT, two barge slips for barges with capacity of up to 4,000
DWT each for dry bulk cargo, and a general cargo wharf for vessels of up to 2,000 DWT.

 The Tanjung Mangkasa Special Port is located in Lampia Village, South Sulawesi, with mooring
buoys that can accommodate vessels with capacity of up to 20,000 DWT, and a terminal that can
accommodate fuel tanker vessels with capacity of up to 5,000 DWT, totaling capacity of 25,000
DWT.

New Caledonia

We own and operate a port in Prony Bay, Province Sud, New Caledonia. This port has three
terminals, including a passenger ferry terminal able to berth two ships up to 50m long, a dry bulk wharf
where vessels of up to 55,000 DWT can unload at a rate of 8,000 tons per day and a general cargo wharf
where vessels up to 200m long can berth. The general cargo wharf can move containers at a rate of seven per
hour and liquid fuels (LPG, HFO, Diesel) at a rate of 350 cubic meters per hour, and break-bulk. The port’s
container yard, covering an area of approximately 13,000 square meters, can receive up to 1,000 units. A bulk
storage yard is linked to the port by a conveyor and has a storage capacity of 94,000 tons of limestone, 95,000
tons of sulfur, and 60,000 tons of coal.

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 Lines of Business

Malaysia

Teluk Rubiah Maritime Terminal (‘‘TRMT’’). TRMT is located in the Malaysian state of Perak and has
a pier with two berths that allows the unloading of vessels of approximately 400,000 DWT of capacity and the
loading of vessels up to 220,000 DWT of capacity. In 2016, the terminal unloaded 21.4 million metric tons of
iron ore and loaded 21.7 million metric tons of iron ore. In this terminal we produce and sell the Brazilian
blend fines, by mixing iron ore produced in Carajás with iron ore produced in our Southern and Southeastern
systems.

4.1.3 Shipping

Maritime shipping of iron ore and pellets

In 2016, we shipped approximately 202 million metric tons of iron ore and pellets pursuant to
transactions in which we were responsible for freight (CFR or CIF basis), which corresponds to 59% of our
total iron ore and pellets sales. We transport a large amount of our iron ore products from Brazil to Asia
through long-term contracts of affreightment with owners of very large ore carriers of 400,000 deadweight
tons (‘‘DWT’’). These vessels reduce energy consumption and greenhouse emissions by carrying an increased
amount of cargo in a single trip, offering lower shipping costs. In 2016, approximately 48 million tons of iron
ore products were transported by these vessels under long term contracts of affreightment.

We also own 8 vessels that are in operation, consisting of four very large ore carriers with a capacity
of 400,000 DWT each, and four capesize vessels with capacities ranging from 150,000 to 250,000 DWT.

We have changed our strategy with respect to maritime shipping. In the past, we owned and operated
a low-cost fleet of vessels to transport our cargoes from Brazil to our markets, especially in Asia. We now
focus on securing long-term shipping capacity and protecting against volatility in freight pricing through
long-term contracts of affreightment, without incurring the costs relating to building and owning the vessels.
Since 2014, we have sold 15 of our very large ore carriers of 400,000 DWT for an aggregate amount of
US$1.584 billion. We sold three of these very large ore carries in 2016. Also, in September 2016, we agreed to
sell four of our capesize vessels to Polaris Shipping Co. Ltd. for US$35 million per vessel. Two of the vessels
were delivered in December 2016, and two in January 2017.

We also own and operate two Floating Transfer Stations (‘‘FTS’’) in Subic Bay, Philippines, which
transfer iron ore from very large ore carriers to smaller vessels that deliver the cargo to its destinations. We
have suspended operations at one of our FTS since February 2016, and we may sell both FTS in 2017.

Paraná-Paraguay waterway system

In the Paraná and Paraguay waterway system, we transport iron ore and manganese ores through our
subsidiary Transbarge Navegación, which transported 2.98 million tons through the waterway system in 2016,
and other chartered convoys. The barges are discharged in our local customers’ terminals, in contracted
terminals in Argentina or in the facilities of our subsidiary Vale Logı́stica Argentina, which load the ore into
ocean-going vessels. We loaded 1.76 million tons of ore, at two ports in Argentina, namely San Nicolas and
Rosario, and at a transshipper into ocean-going vessels in 2016.

Tugboats

We manage a fleet of 16 owned tugboats in total. We directly operate nine tugboats in the ports of
Vitória and Mangaratiba, in the Brazilian states of Espı́rito Santo and Rio de Janeiro, respectively. We have a
50% stake in a consortium that operates four tugboats in the port of São Luı́s in the Brazilian states of
Maranhão. Three additional tugboats are freighted to and operated by third parties, under their responsibility,
in other ports in Brazil.

59
 4.2 Energy

We have developed our energy assets based on the current and projected energy needs of our
operations, with the goal of reducing our energy costs and minimizing the risk of energy shortages.

Brazil

Energy management and efficient supply in Brazil are priorities for us, given the uncertainties
associated with changes in the regulatory environment and the risk of rising electricity prices. In 2016, our
installed capacity in Brazil was 1.4 GW, sourced from directly and indirectly owned power plants. We use the
electricity produced by these plants for our internal consumption needs. We currently own direct stakes in
three hydroelectric power plants and four small hydroelectric power plants in operation. The hydroelectric
power plant of Candonga, the operations of which remain suspended since November 2015 as a result of the
failure of the Samarco Dam, is located in the Southeastern region, Machadinho is located in the Southern
region, and Estreito is located in the Northern region. The small hydroelectric power plants of Ituerê, Mello,
Glória and Nova Maurı́cio are located in the Southeastern region. We also have indirect stakes in the
hydroelectric power plants of Igarapava, Porto Estrela, Funil, Candonga, Aimorés, Capim Branco I, Capim
Branco II, through our 55% participation in Aliança Geração de Energia S.A. (‘‘Aliança Geração’’). These
hydroelectric power plants are located in the Southeastern region and part of its generated electricity is
directed to Vale’s operations through a power purchase agreement with Aliança Geração.

We also have a 4.59% indirect stake in Norte Energia S.A. (‘‘Norte Energia’’), the company
established to develop and operate the Belo Monte hydroelectric plant in the Brazilian state of Pará, which
started operations in April 2016. Our participation in the Belo Monte project gives us the right to purchase
9% of the electricity generated by the plant, which has already been contracted through a long-term power
purchase agreement entered into with Norte Energia.

We also produce, through our subsidiary Biopalma da Amazônia S.A. (‘‘Biopalma’’), palm oil in the
Brazilian state of Pará, with the objective to produce biodiesel in the future through an industrial plant to be
installed by Biopalma. This biodiesel, blended with regular diesel to produce diesel B20 (20% biodiesel), may
be used to power our fleet of mining trucks, heavy machinery and locomotives in the Northern System
operations.

Canada

In 2016, our wholly-owned and operated hydroelectric power plants in Sudbury generated 17% of the
electricity requirements of our Sudbury operations. The power plants consist of five separate generation
stations with an installed generator nameplate capacity of 56 MW. The output of the plants is limited by water
availability, as well as by constraints imposed by a water management plan regulated by the provincial
government of Ontario. Over the course of 2016, average demand for electrical energy was 199 MW to all
surface plants and mines in the Sudbury area.

In 2016, diesel generation provided 100% of the electric requirements of our Voisey’s Bay operations.
We also have six diesel generators on-site, with output ranging from 12 to 14 MW, in order to meet seasonal
demands.

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 Lines of Business

Indonesia

Energy costs are a significant component of our nickel production costs for the processing of lateritic
ore at our PTVI operations in Indonesia. A major portion of PTVI’s electric furnace power requirements is
supplied at a low cost by its three hydroelectric power plants on the Larona River: (i) the Larona plant,
which has an average generating capacity of 165 MW, (ii) the Balambano plant, which has an average capacity
of 110 MW and (iii) the Karebbe plant, with 90 MW of average generating capacity. These plants help reduce
production costs by substituting oil used for power generation with hydroelectric power, reduce CO2 emissions
by replacing non-renewable power generation, and enable us to increase our current nickel production
capacity in Indonesia.

5. Other investments

Below is a list of our main investments:

 Pelletizing plants. We have a 25% stake in two iron ore pelletizing plants in China, Zhuhai YPM
and Anyang. The remaining stake in Zhuhai YPM is owned by Zhuhai Yueyufeng Iron and
Steel Co. Ltd. and Halswell Enterprises Limited, and the remaining stake in Anyang is owned by
Anyang Iron & Steel Co., Ltd.

 Coal operations. We have a 25% stake in Longyu (in the Henan province) coal operations in
China. Longyu produces metallurgical and thermal coal and other related products, and the
remaining interests are owned by Yongmei Group Co., Ltd. (former Yongcheng Coal & Electricity
(Group) Co. Ltd.), Shanghai Baosteel International Economic & Trading Co., Ltd. and other
minority shareholders.

 Nickel refinery. We have a 25% indirect stake in Korea Nickel Corporation, which operates a
nickel refinery in South Korea. The remaining stake is held by Korea Zinc Co., Ltd,
Posteel Co., Ltd., Young Poong Co., Ltd., Pohang Technology College and a number of individual
investors. Korea Nickel Corporation produces finished nickel for the stainless steel industry using
intermediate products from our Matsuzaka and New Caledonia operations.

 Steel producers. We own a 50% stake in California Steel Industries, Inc. (‘‘CSI’’), a producer of
flat-rolled steel and pipe products located in California, United States. The remainder is owned
by JFE Steel. CSI’s annual production capacity is approximately 2.8 million metric tons of flat and
pipe products. We also own a 50% stake in Companhia Siderúrgica do Pecém (‘‘CSP’’), an
integrated steel slab plant in the Brazilian state of Ceará in partnership with Dongkuk Steel
Mill Co. (‘‘Dongkuk’’) and Posco, two major steel producers in South Korea. CSP’s annual
production capacity is 3.0 million metric tons. We are currently negotiating the sale of the Aços
Laminados do Pará (‘‘Alpa’’) steel project with the Cevital Group. In April 2016, we sold our total
26.9% stake in the ThyssenKrupp Companhia Siderúrgica do Atlântico (‘‘TKCSA’’) integrated
steel slab plant in the Brazilian state of Rio de Janeiro.

 Bauxite. We own a 40% stake in Mineração Rio do Norte S.A. (‘‘MRN’’), a bauxite mining
business located in Brazil.

 Hydrocarbon exploration licenses. In February 2016, we sold our onshore hydrocarbon exploration
licenses in Peru, and during the year we sold or relinquished offshore exploration licenses in
Brazil. We are currently on the process of selling our participations in the respective joint
ventures in both countries.

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 RESERVES

Presentation of information concerning reserves

The estimates of proven and probable ore reserves at our mines and projects and the estimates of
mine life included in this annual report have been prepared by our staff of experienced geologists and
engineers, unless otherwise stated, and in accordance with the technical definitions established by the SEC.
Under the SEC’s Industry Guide 7:

 Reserves are the part of a mineral deposit that could be economically and legally extracted or
produced at the time of the reserve determination.

 Proven (measured) reserves are reserves for which (a) quantity is computed from dimensions
revealed in outcrops, trenches, workings or drill holes; grade and/or quality are computed from
the results of detailed sampling; and (b) the sites for inspection, sampling and measurement are
spaced so closely and the geologic character is so well defined that size, shape, depth and mineral
content of reserves are well-established.

 Probable (indicated) reserves are reserves for which quantity and grade and/or quality are
computed from information similar to that used for proven (measured) reserves, but the sites for
inspection, sampling and measurement are farther apart or are otherwise less adequately spaced.
The degree of assurance, although lower than that for proven (measured) reserves, is high enough
to assume continuity between points of observation.

We periodically revise our reserve estimates when we have new geological data, economic assumptions
or mining plans. During 2016, we performed an analysis of our reserve estimates for certain projects and
operations, which is reflected in new estimates as of December 31, 2016. Reserve estimates for each operation
assume that we either have or expect to obtain all of the necessary rights and permits to mine, extract and
process mineral reserves at each mine. For some of our operations, the projected exhaustion date includes
stockpile reclamation. Where we own less than 100% of the operation, reserve estimates have not been
adjusted to reflect our ownership interest. Certain figures in the tables, discussions and notes have been
rounded. For a description of risks relating to reserves and reserve estimates, see Risk factors.

62
 Reserves

Our reserve estimates are based on certain assumptions about future prices. We have determined that
our reported reserves could be economically produced if prices for the products identified in the following
table were equal to the three-year average historical prices through December 31, 2016. For this purpose, we
used the three-year historical average prices set forth in the following table.

Commodity Three-year average historical price Pricing source

Iron ore:
Vale(1) . . . . . . . . . . . . . . . . . . . . US$70.2 per dry metric ton Average Platts IODEX (62% Fe CFR
China)
Coal(2):
Metallurgical—Moatize . . . . . . . . . . . US$111.13 per metric ton Average hard metallurgical coal realized
price
Thermal—Moatize. . . . . . . . . . . . . . US$48.45 per metric ton Average thermal realized price
Base metals:
Nickel(3) . . . . . . . . . . . . . . . . . . . US$5.79 per lb LME Ni
Copper . . . . . . . . . . . . . . . . . . . . US$2.61 per lb LME Cu

Nickel byproducts:
Platinum . . . . . . . . . . . . . . . . . . . US$1,142 per oz Average realized price
Palladium . . . . . . . . . . . . . . . . . . . US$702 per oz Average realized price
Gold . . . . . . . . . . . . . . . . . . . . . . US$1,225 per oz Average realized price
Cobalt(3) . . . . . . . . . . . . . . . . . . . US$12.70 per lb 99.3% low cobalt metal (source: Metal
Bulletin)
Manganese ore(4):
Manganese . . . . . . . . . . . . . . . . . . US$3.9 per dry metric ton Average CRU (44% Mn CFR China basis)

(1) The economic assessment of our iron ore reserves is based on the average of 62% Fe iron ore prices, as adjusted to reflect the effects
of freight, moisture and the quality premium for our iron ore.
(2) As received basis (8% moisture).
(3) Premiums (or discounts) are applied to the nickel and cobalt spot prices at certain operations to derive realized prices. These premiums
(or discounts) are based on product form, long-term contracts, packaging and market conditions.
(4) The economic assessment of our manganese ore reserves is based on the average CRU prices, adjusted to reflect the effects of freight,
moisture and the quality premium for our manganese ore prices on a CFR China basis.

Iron ore reserves

The following tables set forth our iron ore reserves and other information about our iron ore mines.
Our reserve table reflects our production and operational plans, which are based on the facilities (consisting
of both mines and processing plants) within each system, rather than the individual mines.

We periodically review the economic viability of our iron ore reserves in light of changes in the iron
ore industry. Although in production stage, Urucum and Corumbá reserves are not economically viable based
on expected long-term prices. Since last year we are not reporting reserves at those facilities. Also, following
the failure of the Fundão tailings dam in November 2015 and the shutdown of its operations, Samarco is
reviewing the operation’s reserves. Under these circumstances, Vale is currently not in a position to report
reserves for Samarco as of December 31, 2016.

The variations in iron ore reserves from 2015 to 2016 reflect new strategic guidelines in the review of
the final pits, considering new price, cost, projects and blending assumptions, which affected all deposits. In
addition, we have new deposits disclosed for the first time and resource models update. The reserve statement
also contemplates depletion by mine production.

63
 Also in 2016, a portion of our reserves in all of our mining systems was reclassified from ‘‘proven’’ to
‘‘probable’’ reserves, without impacting the overall tonnage. This reclassification was a result of a complete
review of our open pits and is consistent with best practices in the mining industry. It reflects as ‘‘proven’’
only reserves for which all environmental licenses have been obtained, and under ‘‘probable’’ the reserves for
which the licensing process is still ongoing, although we have a reasonable expectation of receiving the
required licenses on a timely basis.

Iron ore reserves(1)

Proven – 2016 Probable – 2016 Total – 2016 Total – 2015
Tonnage Grade Tonnage Grade Tonnage Grade Tonnage Grade
Southeastern System(2)
Itabira(3) . . . . . . . . . . 811.4 45.2 198.9 45.4 1,010.3 45.2 746.7 47.2
Minas Centrais(4) . . . . . 198.5 49.0 650.9 56.8 849.4 55.0 1,091.1 53.3
Mariana(5) . . . . . . . . . 535.4 45.5 3,603.4 44.2 4,138.8 44.3 3,177.1 43.8
Total Southeastern System . 1,545.3 45.8 4,453.1 46.1 5,998.5 46.0 5,014.9 46.4
Southern System(6)
Minas Itabirito(7) . . . . . 467.7 56.6 3,279.1 43.5 3,746.8 45.1 2,887.0 43.2
Vargem Grande(8) . . . . . 100.6 50.5 1,442.4 48.0 1,543.0 48.2 2,441.9 44.5
Paraopeba(9) . . . . . . . . 85.5 62.5 245.3 60.5 330.7 61.0 154.8 62.0
Total Southern System . . . . 653.8 56.4 4,966.8 45.6 5,620.6 46.9 5,483.7 44.3
Northern System(10)
Serra Norte(11) . . . . . . 552.7 66.5 1,784.7 65.9 2,337.4 66.0 2,426.4 66.7
Serra Sul (S11)(12) . . . . 1,730.5 65.8 2,494.1 65.5 4,224.6 65.6 4,239.6 66.7
Serra Leste . . . . . . . . . 18.9 64.5 241.6 65.5 260.4 65.4 303.5 65.4
Total Northern System . . . . 2,302.1 65.9 4,520.4 65.7 6,822.5 65.7 6,969.4 66.7
Total Vale Systems . . . . . . 4,501.2 57.6 13,940.3 52.3 18,441.5 53.6 17,468.0 53.8

(1) Tonnage is stated in millions of metric tons of wet run-of-mine, based on the following moisture contents: Itabira 1.6%; Minas Centrais
5.9%; Mariana 3.9%; Minas Itabirito 5.1%; Vargem Grande 6.1%; Paraopeba 5.1%; Serra Norte 6.8%; Serra Sul 4.6%; Serra Leste
3.6%;
(2) Approximate drill hole spacing used to classify the Reserves was: 100m  100m to proven reserves and 200m  200m to probable
reserves. Average product recovery (tonnage basis) is: 53% for Itabira, 82% for Minas Centrais and 62% for Mariana.
(3) Itabira integrated operation includes Conceição and Minas do Meio mines.
(4) Minas Centrais integrated operation includes Brucutu and Agua Limpa mines. Additionally, we have Apolo deposit, not currently in
production. Agua Limpa mine and plants are owned by Baovale Mineração S.A. (‘‘Baovale’’). Vale’s equity interest in Agua Limpa is
50.0% and the reserve figures have not been adjusted to reflect our ownership interest.
(5) Mariana integrated operation includes Alegria, Fábrica Nova and Fazendão mines. Additionally, we have Capanema and Conta História
deposits, not currently in production.
(6) Approximate drill hole spacing used to classify the Reserves was: 100m  100m to proven reserves and 200m  200m to probable
reserves. Average product recovery (tonnage basis) is: 60% for Minas Itabirito, 61% for Vargem Grande and 100% for Paraopeba.
(7) Minas Itabirito integrated operation includes Sapecado, Galinheiro, João Pereira and Segredo mines.
(8) Vargem Grande integrated operation includes Tamanduá, Capitão do Mato and Abóboras mines.
(9) Paraopeba integrated operation includes Jangada, Capão Xavier, Córrego do Feijão and Mar Azul mines. Additionally, we have Capim
Branco deposit, not currently in production. Córrego do Feijão, Mar Azul and Capim Branco mineral reserves were included in the
table this year.
(10) Approximate drill hole spacing used to classify the reserves was: 150m  100m to proven reserves and 300m  200m to probable
reserves, except Serra Leste which is 100m  100m to proven reserves and 200m  200m to probable reserves. Average product
recovery (tonnage basis) 100% for Serra Norte, 100% for Serra Leste and 100% for Serra Sul.
(11) Serra Norte integrated operation includes, N4W, N4E and N5 mines. Additionally, we have N1, N2 and N3 deposits, disclosed for the
first time and not currently in production.
(12) Serra Sul integrated operation includes S11C and S11D deposits.

64
 Reserves

The mine exhaustion schedule has been adjusted due to our new production plan and our revision of
project capacity. As a result of the Fundão dam failure, the Alegria and Germano operations’ projected
exhaustion dates are currently being reevaluated as part of Samarco’s general review of its iron ore resources
and reserves.

Iron ore integrated operations

Projected
Type Operating since exhaustion date(1) Vale interest
(%)
Southeastern System
Itabira . . . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 1957 2029 100.0
Minas Centrais . . . . . . . . . . . . . . . . . . . . . . . Open pit 1994 2056 100.0
Mariana . . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 1976 2104 100.0
Southern System
Minas Itabirito . . . . . . . . . . . . . . . . . . . . . . . Open pit 1942 2105 100.0
Vargem Grande . . . . . . . . . . . . . . . . . . . . . . . Open pit 1993 2055 100.0
Paraopeba . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 2001 2032 100.0
Northern System
Serra Norte . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 1984 2041 100.0
Serra Sul (S11CD) . . . . . . . . . . . . . . . . . . . . . Open pit 2016 2049 100.0
Serra Leste (SL1) . . . . . . . . . . . . . . . . . . . . . . Open pit 2014 2059 100.0

(1) Indicates the life-of-mine for the operating mine with the longest projected exhaustion date in the complex.

65
Manganese ore reserves

The following tables set forth manganese ore reserves and other information about our mines. We are
able to report mineral reserve for Urucum in 2016 due to the logistics cost reduction. We are revising our
reported reserves due to the updating of its resource models and mineral reserves currently in progress, to
consider new geological information and new reserve assumptions. As this revision is still ongoing, we are
disclosing current reserves by depletion.

Manganese ore reserves(1)(2)

Proven – 2016 Probable – 2016 Total – 2016 Total – 2015
Tonnage Grade Tonnage Grade Tonnage Grade Tonnage Grade
Azul(3) . . . . . . . . . . . . . . . . 35.9 28.5 2.0 25.5 38.0 28.4 43.6 29.3
Urucum . . . . . . . . . . . . . . . . 8.3 46.3 1.7 46.5 10.1 46.3 – –
Morro da Mina(4) . . . . . . . . . . 5.8 31.0 2.8 29.7 8.6 30.6 8.6 30.6
Total . . . . . . . . . . . . . . . . 50.1 31.8 6.5 32.9 56.6 31.9 52.2 29.6

(1) Tonnage is stated in millions of metric tons of wet run-of-mine, based on the following moisture contents: Azul 16.2%, Urucum 4.2%,
Morro da Mina 3.4%. Manganese grade is reported on a dry basis. Approximate drill hole spacing used to classify the reserves was:
100m  100m for proven reserves and 200m  200m for probable reserves.
(2) The average recovery of the manganese ore reserves is: Azul 39%, Urucum 82%, Morro da Mina 70%.
(3) Total reserve includes 4.5 million metric tons of ore from Azul’s tailing dam.
(4) Morro da Mina mine operations restarted in October 2016.

Manganese ore mines

Projected
Type Operating since exhaustion date Vale interest
(%)
Azul(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 1985 2032 100.0
Urucum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Underground 1976 2032 100.0
Morro da Mina . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 1902 2049 100.0

(1) Ore from Azul’s tailings dam was not included.

Coal reserves

Our coal reserve estimates have been provided on an in-place material basis after adjustments for
depletion, moisture content, anticipated mining losses and dilution. Marketable reserves include adjustments
for losses associated with beneficiation of raw coal mined to meet saleable product requirements.

Coal ore reserves(1)

ROM(2)
Marketable reserves(3)
Proven – Probable –
Coal type 2016 2016 Total – 2016 Total – 2015 2016 2015
(tonnage) (tonnage) (calorific (tonnage) (calorific (tonnage) (tonnage)
value) value)
Moatize . . . . . . . . . . . . . . Metallurgical & thermal l 247.4 1,148.2 1,395.6 28.3 (thermal) 1,411.7 28.3 (thermal) 499.6 505.5

(1) The reserves stated above by deposit are on a 100% shareholding basis. Vale’s ownership interest in accordance with the table below should be used to
calculate the portion of reserves directly attributable to Vale.
(2) Tonnage is stated in millions of metric tons. Moatize is reported on in situ 6.5% moisture basis. Calorific value of product coal derived from beneficiation of
ROM coal is typically stated in MJ/kg. Calorific value is used in marketing thermal (th) and PCI coals.
(3) Tonnage is stated in millions of metric tons.

Coal mines
Projected
Type Operating since exhaustion date Vale interest
(%)
Moatize(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 2011 2047(2) 95.0

(1) Vale’s stake in Moatize will decrease to 81% upon completion of the transaction with Mitsui.
(2) The mine exhaustion date was extended due to the current production plan and plant capacity.

66
 Reserves

Nickel ore reserves

Our nickel mineral reserve estimates are of in-place material after adjustments for depletion and
mining losses (or screening and drying in the case of PTVI) and recoveries, with no adjustments made for
metal losses due to processing.

Nickel ore reserves(1)

Proven – 2016 Probable – 2016 Total – 2016 Total – 2015
Recovery
Tonnage Grade Tonnage Grade Tonnage Grade Tonnage Grade range (%)
Canada
Sudbury . . . . . 32.4 1.48 39.5 1.33 71.9 1.40 76.4 1.27 75 – 85
Thompson . . . – – – – – – 20.6 1.71 85 – 90
Voisey’s Bay . . 18.4 2.35 15.4 2.02 33.8 2.20 36.1 2.24 80 – 90
Indonesia
PTVI . . . . . . 91.6 1.78 19.2 1.75 110.9 1.78 119.3 1.78 85 – 90
New Caledonia
VNC . . . . . . . – – – – – – – –
Brazil
Onça Puma . . . 63.0 1.65 45.0 1.37 108.0 1.53 97.4 1.56 85 – 90
Total . . . . . . . . 205.4 1.75 119.1 1.50 324.5 1.66 349.8 1.65

(1) Tonnage is stated in millions of dry metric tons. Grade is % of nickel.

In Canada, our Sudbury operations mineral reserves decreased due to mining depletions, the
reclassification of mineral reserves to mineral resource at Garson, downgrading of mineral reserve to
exploration target at Stobie and a decrease of mineral reserves at all mines due to re-interpretation and
planning changes. The nickel grades at the Sudbury operations increased due to a change in the cutoff policy.
The Voisey’s Bay operations mineral reserves decreased due to mining depletions. The mineral reserves at
PTVI decreased due to mining depletion, pit redesigns and reevaluations, and reclassification to mineral
resource. The mineral reserves at Onça Puma increased due to a decrease in operating costs and cutoff.

We are not reporting the reserves of VNC and Thompson as of December 31, 2016, because the
mineral reserves for our operations in New Caledonia and Thompson would not be economically viable at the
three-year historical average price, due to the decline in nickel prices in the past three years. However, based
on our expectations about future prices, our operations in New Caledonia and Thompson continue to be
economically viable. VNC and Thompson continue to operate and are currently conducting studies to identify
measures to reduce their costs of production.

Nickel ore mines

Projected
Type Operating since exhaustion date Vale interest
(%)
Canada
Sudbury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Underground 1885 2042 100.0
Thompson . . . . . . . . . . . . . . . . . . . . . . . . . . . . Underground 1961 – 100.0
Voisey’s Bay(1) . . . . . . . . . . . . . . . . . . . . . . . . . Open pit/ 2005 2032 100.0
Underground
Indonesia
PTVI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 1977 2035 59.2
New Caledonia
VNC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 2011 – 95.0
Brazil
Onça Puma . . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 2011 2061 100.0

(1) Voisey’s bay will transition from an open pit mine to an underground mine. For further details on the Voisey’s Bay mine expansion
project, see Capital Expenditures.

67
Copper ore reserves

Our copper mineral reserve estimates are of in-place material after adjustments for depletion and
mining losses and recoveries, with no adjustments made for metal losses due to processing.

Copper ore reserves(1)

Proven – 2016 Probable – 2016 Total – 2016 Total – 2015
Recovery
Tonnage Grade Tonnage Grade Tonnage Grade Tonnage Grade range (%)
Canada
Sudbury . . . . . 32.4 2.06 39.5 1.43 71.9 1.71 76.4 1.61 90 – 95
Voisey’s Bay . . 18.4 1.12 15.4 0.89 33.8 1.02 36.1 1.05 90 – 95
Brazil
Sossego . . . . . 101.5 0.64 9.4 0.66 110.9 0.65 117.8 0.67 90 – 95
Salobo . . . . . . 623.7 0.68 554.6 0.58 1,178.3 0.63 1,156.8 0.67 80 – 90
Zambia
Lubambe . . . . 5.4 2.22 40.0 2.18 45.4 2.18 48.6 2.25 85 – 90
Total . . . . . . . . 781.3 0.75 659.0 0.74 1,440.3 0.75 1,435.7 0.78

(1) Tonnage is stated in millions of dry metric tons. Grade is % of copper.

In Canada, our Sudbury operations mineral reserves decreased due to mining depletions, the
reclassification of mineral reserves to mineral resource at Garson, downgrading of mineral reserve to
exploration target at Stobie and a decrease of mineral reserves at all mines due to re-interpretation and
planning changes. The copper grades at the Sudbury operations increased due to a change in the cutoff grade
policy. The Voisey’s Bay operations mineral reserves decreased due to mining depletions. In Brazil, the
Sossego operations mineral reserves decreased due to mining depletion, partially offset by the addition of
mineral reserves located in the bottom of the pits and the reevaluation of the existing pit designs and
unplanned dilution factors. The mineral reserve estimates at the Salobo operation increased due to mining
depletion being offset by the addition of new mineral reserves from an updated final pit design and the
reevaluation of the mineral block model. The Lubambe mineral reserves decreased due to mining depletion.

Copper ore mines

Projected
Type Operating since exhaustion date Vale interest
(%)
Canada
Sudbury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Underground 1885 2042 100.0
Voisey’s Bay . . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit/ 2005 2032 100.0
Underground
Brazil
Sossego . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 2004 2025 100.0
Salobo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 2012 2066 100.0
Zambia
Lubambe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Underground 2013 2038 40.0

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 Reserves

PGMs and other precious metals reserves

We expect to recover significant quantities of precious metals as byproducts of our Sudbury, Sossego
and Salobo operations. Our mineral reserve estimates are of in-place material after adjustments for mining
depletion and mining losses and recoveries, with no adjustments made for metal losses due to processing.

Precious metals reserves(1)

Proven – 2016 Probable – 2016 Total – 2016 Total – 2015
Recovery
Tonnage Grade Tonnage Grade Tonnage Grade Tonnage Grade range (%)
Canada
Sudbury
Platinum . . . 32.4 1.1 39.5 1.3 71.9 1.2 76.4 1.1 80 – 90
Palladium . . . 32.4 1.3 39.5 1.3 71.9 1.3 76.4 1.1 80 – 90
Gold . . . . . 32.4 0.5 39.5 0.4 71.9 0.4 76.4 0.4 80 – 90
Brazil
Sossego
Gold . . . . . 101.5 0.2 9.4 0.2 110.9 0.2 117.8 0.2 75 – 80
Salobo
Gold . . . . . 623.7 0.4 554.6 0.3 1,178.3 0.4 1,156.8 0.4 60 – 70

Total Pt + Pd(2) . 32.4 2.4 39.5 2.6 71.9 2.5 76.4 2.2

Total Gold . . . . . 757.6 0.3 603.5 0.3 1,361.1 0.3 1,351.0 0.4

(1) Tonnage is stated in millions of dry metric tons. Grade is grams per dry metric ton.
(2) Pt+Pd is the sum of Platinum and Palladium grades.

In Sudbury our mineral reserve estimates for platinum, palladium and gold decreased for the same
reasons discussed above in connection with the nickel mineral reserves. In Brazil, mineral reserve estimates
for gold changed for the same reasons discussed above in connection with the copper mineral reserves.

Precious metals mines

Projected
Type Operating since exhaustion date Vale interest
(%)
Canada
Sudbury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Underground 1885 2042 100.0
Brazil
Sossego . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 2004 2025 100.0
Salobo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 2012 2066 100.0

Cobalt ore reserves

We expect to recover significant quantities of cobalt as a byproduct of our Sudbury and Voisey’s Bay
operations. Our cobalt reserve estimates are of in-place material after adjustments for depletion and mining
losses, with no adjustments for metal losses due to processing.

Cobalt ore reserves(1)

Proven – 2016 Probable – 2016 Total – 2016 Total – 2015
Recovery
Tonnage Grade Tonnage Grade Tonnage Grade Tonnage Grade range (%)
Canada
Sudbury . . . . . 32.4 0.04 39.5 0.04 71.9 0.04 76.4 0.04 20-40
Voisey’s Bay . . 18.4 0.13 15.4 0.13 33.8 0.13 36.1 0.13 70-80
New Caledonia
VNC . . . . . . . – – – – – – – –
Total . . . . . 50.8 0.07 54.9 0.07 105.7 0.07 112.5 0.07

(1) Tonnage is stated in millions of metric tons. Grade is % of cobalt.

69
 Our cobalt reserve estimates decreased in 2016 for the same reasons discussed above in connection
with the nickel mineral reserves.

Cobalt ore mines

Projected
Type Operating since exhaustion date Vale interest
(%)
Canada
Sudbury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Underground 1885 2042 100.0
Voisey’s Bay . . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit/ 2005 2032 100.0
Underground
New Caledonia
VNC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 2011 – 95.0

70
 CAPITAL EXPENDITURES

We have an extensive program of investments in the organic growth of our businesses. The figures
discussed in this section are for project execution and sustaining existing operations and replacement projects.

The 2017 investment budget approved by our Board of Directors is US$1.846 billion for project
execution, reflecting a 41.8% decrease compared to the 2016 investment budget, and US$2.702 billion for
sustaining existing operations and replacement projects, reflecting a 9.8% decrease compared to 2016. This is
the sixth consecutive year of lower capital expenditures, maintaining capital discipline and focusing only on
world class projects.

Most of the capital expenditures budget for project execution will be invested in Brazil (95.1%).

2015 expenditures 2016 expenditures 2017 budget

(US$ million) (US$ million) (US$ million) (% of total)
Project execution . . . . . . . . . . 5,548 3,179 1,846 40.6%
Investments to sustain existing
operations and replacement
projects . . . . . . . . . . . . . . . 2,853 2,302 2,702 59.4%
Total . . . . . . . . . . . . . . . . . . US$8,401 US$5,482 US$4,548 100%

We are developing a focused organic growth portfolio with fewer projects, but higher expected rates of
return. Our main initiative, the S11D project, accounts for 87.2% of the US$1.846 billion budgeted for project
execution in 2017.

71
 The following table sets forth total expenditures in 2016 for our main investment projects and
expenditures budgeted for those projects in 2017, together with estimated total expenditures for each project
and the actual or estimated start-up date of each project as of December 31, 2016.
Executed CAPEX Expected CAPEX
Actual or
estimated Total Total
Business area Main projects(1) start-up 2016(2) executed(3) 2017(4) expected(5)
(US$ million)
Iron ore . . . . . . Carajás Serra Sul S11D(6)(8) 2H16 940 5,595 649 6,750
CLN S11D(7) 1H14 to 2H19 1,195 5,662 962 7,850
Coal mining . . . Moatize II(8) 2H16 117 2,058 6 2,105
Base Metals . . . Voisey’s Bay Mine Expansion(9) 1H20 10 10 76 1,904

(1) Projects approved by our Board of Directors.

(2) All figures are presented on a cash basis.
(3) Total executed CAPEX through December 31, 2016, including capital expenditures in prior periods.
(4) All figures are presented on a cash basis and correspond to the figures approved in the US$4.548 billion investment budget.
(5) Estimated total capital expenditure cost for each project, including capital expenditures in prior periods. Total expected CAPEX
includes expenses, in line with the budget approved by our Board of Directors, while these expenses are not included in the expected
CAPEX for the year or in the total executed CAPEX figures.
(6) Original expected CAPEX for S11D was US$8.089 billion.
(7) Original expected CAPEX for CLN S11D was US$11.582 billion.
(8) Projects delivered in 2016.
(9) Replacement projects.

The paragraphs below describe the status of each project as of December 31, 2016 and have not been
updated to reflect any developments after that date.

Ferrous minerals and logistics projects

Iron ore mining and logistics projects:

 CLN S11D. Increase in the logistics capacity of the Northern System to support the S11D
project, including the expansion of approximately 570 km of railway (291 km of which we have
already built), construction of a railway spur of 101 km, acquisition of wagons and locomotives
and port expansion (onshore and offshore expansions at Ponta da Madeira maritime terminal).
This project is expected to increase EFC’s nominal logistics capacity to approximately 230 Mtpy.
The duplication of the railway achieved 60% of physical progress and the railway spur was totally
completed. The port offshore started up in the last quarter of 2016, having loaded 11 vessels
(aggregate of 3,100,000 tons) until the end of 2016. The project is 76% complete, with total
realized expenditures of US$5.66 billion. The start-up is expected to continue through the second
half of 2019.

Base metals projects

 Voisey’s Bay Mine Expansion. We completed, in March 2015, the study to replace the depletion
of the open pit mine at Voisey’s Bay with an underground mine. The project was approved to
commence execution in 2016, and the first ore is expected to be delivered from the Reid Brook
Deposit in 2020. In 2016, construction commenced and a project office was opened in St. John’s,
Newfoundland. The total expenditures in 2016 reached US$10 million. When complete, the
underground mine will produce an average of 46 ktpy contained nickel and extend the
operational life until 2032.

72
 REGULATORY MATTERS

We are subject to a wide range of governmental regulation in all the jurisdictions in which we operate
worldwide. The following discussion summarizes the kinds of regulation that have the most significant impact
on our operations.

Mining rights and regulation of mining activities

Mining and mineral processing are subject to extensive regulation. In order to conduct these activities,
we are required to obtain and maintain some form of governmental or private permits, which may include
concessions, licenses, claims, tenements, leases or permits (all of which we refer to below as ‘‘concessions’’).
The legal and regulatory regime applicable to the mining industry and governing concessions differs among
jurisdictions, often in important ways. In most jurisdictions, including Brazil, mineral resources belong to the
State and may only be exploited pursuant to a governmental concession. In other jurisdictions, such as
Ontario in Canada, a substantial part of our mining operations is conducted pursuant to mining rights we own
(private permits). Government agencies are typically in charge of granting mining concessions and monitoring
compliance with mining law and regulations.

The table below summarizes our principal concessions and other similar rights for our continuing
operations. It does not include information with respect to our fertilizer business (discontinued operations).

Approximate area covered

Location Mining title (in hectares) Expiration date
Brazil Mining concessions (including under applications) 574,967 Indefinite
Canada(1) Mining concessions (terminology varies among 225,685 2017 – 2036
provinces)
Indonesia(2) Contract of work 118,435 2025
Australia Mining leases 4,559 2041
New Caledonia Mining concessions 21,077 2017 – 2051
Mozambique(3) Mining concessions 23,780 2032

(1) The expiration date of our leases in Sudbury is subject to current renewal applications. The approval process for these applications is in
progress, but may take a number of years.
(2) Entitled to two 10-year extensions, subject to approval of the Indonesian government.
(3) Entitled to 25-year extensions, subject to approval by the Mozambique government.

In addition to the concessions listed above, we have exploration licenses and exploration applications
covering 4.4 million hectares in Brazil and 1.4 million hectares in other countries.

There are several proposed or recently adopted changes in mining legislation and regulations in the
jurisdictions where we have operations that could materially affect us.

 In Brazil, the government sent to Congress in 2013 a bill of law with proposed changes to the
Brazilian mining law. This bill provides for the preservation of the main provisions applicable to
the existing mining rights as of the date of its enactment, a new royalties regime, a new regime
for mining concessions and the creation of a mining agency. The bill is under discussion in the
Brazilian Congress, and the government recently expressed its intention to split the bill into
separate pieces (royalties, new mining concessions regime and the creation of a mining agency) to
expedite the approval process.

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  In New Caledonia, a mining law passed in 2009 requires mining projects to obtain authorization
from governmental authorities, rather than a declaration, as required under the former statute.
VNC submitted an updated application for this authorization in October 2015. VNC’s mining
operations permit was granted in September 2016 and is valid until the end of 2036. The new
mining authorization is now approved and effective. Also, in 2014, the local authorities of New
Caledonia created a protected wetland area, which covers 27% of the surface area of the total
VNC tenements and could affect potential mining activities. Part of this protected wetland area is
adjacent to the location of VNC’s next tailings storage facility, and may impact the design of the
facility, which, in turn may result in additional capital costs.

Royalties and other taxes on mining activities

We are required in many jurisdictions to pay royalties or taxes on our revenues or profits from
mineral extractions and sales. These payments are an important element of the economic performance of a
mining operation. The following royalties and taxes apply in some of the jurisdictions in which we have our
largest operations:

 Brazil. We pay a royalty known as the CFEM (Compensação Financeira pela Exploração de
Recursos Minerais) on the revenues from the sale of minerals we extract, net of taxes, insurance
costs and costs of transportation. The current rates on our products are: 2% for iron ore, copper,
nickel, fertilizers and other materials; 3% for bauxite, potash and manganese ore; and 1% for
gold. In 2013, the Brazilian government sent to Congress a bill that proposed changes to the
Brazilian mining law and that could result in the increase of royalty rates. The bill is currently
under discussion in the Brazilian Congress.

 Brazilian states. Several Brazilian states impose a tax on mineral production (Taxa de Fiscalização
de Recursos Minerais—TFRM), which is assessed at rates ranging from R$0.50 to R$3.214 per
metric ton of minerals produced in or transferred from the state.

 Canada. The Canadian provinces in which we operate charge us a tax on profits from mining
operations. Profit from mining operations is generally determined by reference to gross revenue
from the sale of mine output and deducting certain costs, such as mining and processing costs and
investment in processing assets. The statutory mining tax rates are 10% in Ontario; with
graduated rates up to 17% in Manitoba; and a combined mining and royalty tax rate of 16% in
Newfoundland and Labrador. The mining tax paid is deductible for corporate income tax
purposes.

 Indonesia. Our subsidiary PTVI pays mining royalties of 2% on its nickel matte revenues when
LME nickel prices are below US$21,000 per metric ton and 3% of its nickel matte revenues when
LME nickel prices are above or equal to US$21,000 per metric ton.

 Zambia. In June 2016, the Zambian government amended the Mines and Minerals Act and
implemented a series of changes in the fiscal regime applicable to the mining industry. The
mineral royalties applicable to copper underground operations, such as our joint venture’s
operations, are 4% of the norm value when the price of copper is less than US$4,500 per ton; 5%
when the price of copper is between US$4,500 and US$6,000; and 6% when the price of copper
is greater than US$6,000. The 15% variable profit tax on income, applicable when taxable
earnings exceed 8% of gross sales, has not been re-introduced and the tax on income from
mining operations has remained at 30% and 35% for income from mineral processing.

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 Regulatory Matters

Environmental regulations

We are also subject to environmental regulations that apply to the specific types of mining and
processing activities we conduct. We are required to obtain approvals, licenses, permits or authorizations from
governmental authorities to operate. In most jurisdictions, the development of new facilities requires us to
submit environmental and social impacts statements for approval and often to make investments to mitigate
environmental and social impacts, and we must operate our facilities in compliance with the terms of the
approvals, licenses, permits or authorizations.

We are taking several steps to improve the efficiency of the licensing process, including stronger
integration of our environmental and project development teams, the implementation of a Best Practices
Guide for Environmental Licensing and the Environment, the deployment of highly-skilled specialist teams,
closer interaction with environmental regulators and the creation of an executive committee to expedite
internal decisions regarding licensing.

Environmental regulations affecting our operations relate, among other matters, to emissions into the
air, soil and water; recycling and waste management; protection and preservation of forests, coastlines, caves,
watersheds and other features of the ecosystem; water use; financial provisions and closure plans needed since
the mining license; climate change and decommissioning and reclamation. Environmental legislation is
becoming stricter worldwide, which could lead to greater costs for environmental compliance. In particular, we
expect heightened attention from various governments to reducing greenhouse gas emissions as a result of
concern over climate change, especially following the entry into force of the Paris Agreement in late 2016.
There are several examples of environmental regulation and compliance initiatives that could affect our
operations.

 Canada. In Canada, more stringent water effluent regulations are being proposed federally and
a greenhouse gas cap and trade regime regulations have been enacted in Ontario and proposed in
Manitoba and Newfoundland and Labrador, which may affect our operations. In Canada, we are
making significant capital investments to ensure compliance with air emission regulations that
address, among other things, sulfur dioxide, greenhouse gas emissions, particulates and metals.

 Indonesia. Under the 2014 Indonesia Government Regulation on B3 waste, PTVI’s slag is
classified as hazardous waste and PTVI has submitted the formal application to the regulator for
approval.

 China. An amendment to the environment protection law was approved in April 2014, imposing
stricter pollution prevention and control obligations on companies and providing for more severe
penalties. This amendment may adversely impact our coal exports from Mozambique to China.

 New Caledonia. A law enacted by the South Province of New Caledonia in February 2014
imposes stricter limits on emissions of nitrogen oxide and sulfur oxide and particulates from large
combustion power stations, which will affect the power station that supplies electricity to VNC.
This is expected to result in the increase in the price of power paid by VNC.

75
  Brazil. Under applicable Brazilian regulations for the protection of caves, we are required to
conduct extensive technical studies and negotiate compensatory measures with Brazilian
environmental regulators in order to continue to operate in certain sites. In certain of our iron
ore mining operations or projects, we may be required to limit or modify our mining plans or to
incur additional costs to preserve caves or to compensate for the impact on them, with potential
consequences for production volumes, costs or reserves in our iron ore business. Also, a Brazilian
regulation for the protection of indigenous people, which was enacted in 2011 and revised in
2015, requires us to conduct specific studies of impact and sponsor mitigation programs in
connection with operations and projects close to indigenous people’s lands. In May 2016, the state
of Minas Gerais issued a decree ordering an immediate assessment of the stability conditions of
the upstream dams and suspending new licensing procedures for building or heightening upstream
dams, until the state environmental authority defined new rules and procedures. We have
conducted extraordinary audits on the stability conditions of our upstream dams, and no
anomalies were identified. We filed a report with local governmental authorities in September
2016. In March 2017, the state of Minas Gerais determined that upstream dams, or dams that
have been once heightened by this method, that had their stability conditions attested by audit
could be heightened by other constructive methods.

Regulation of other activities

In addition to mining and environmental regulation, we are subject to comprehensive regulatory

regimes for some of our other activities, including rail transport, port operations and electricity generation.
We are also subject to more general legislation on workers’ health and safety, safety and support of
communities near mines, and other matters. The following descriptions relate to some of the other regulatory
regimes applicable to our operations:

 Brazilian railway regulation. Our Brazilian railroad business operates pursuant to concession
contracts granted by the federal government, and our railroad concessions are subject to
regulation and supervision by the Brazilian Ministry of Transportation, Ports and Civil Aviation
and the regulatory agency for ground transportation (ANTT). The concessions for EFC and
EFVM expire in 2027 and may be renewed at the federal government’s discretion. VLI has also
been awarded a subconcession contract for commercial operation of a 720-kilometer segment of
the FNS railroad in Brazil, which expires in 2037, and FCA and MRS concessions expire in 2026.
Rail transportation prices can be negotiated directly with the users of such services, subject to
tariff ceilings approved by ANTT for each of the concessionaires and each of the different
products transported. ANTT regulations also require concessionaires to give trackage rights to
other railway operators, to make investments in the railway network, and to meet certain
productivity and safety requirements, among other obligations. In 2016, we and other railroad
concessionaries in Brazil initiated discussions with ANTT regarding the possibility of early
renewal of railways concession contracts. If we agree to an earlier renewal of our concession, we
may have to agree with additional performance indications, new investments obligations and
service standards.

 Brazilian port regulation. Port operations in Brazil are subject to regulation and supervision by
ANTAQ, the federal agency in charge of maritime transportation services, and by the Ministry of
Transport, Ports and Civil Aviation through the Secretary of Ports (SEP), whose purpose is to
formulate policies and guidelines. In 2014, we renewed the agreements pursuant to which the
SEP grants us rights to operate our private terminals, with the exception of the agreement with
CPBS, which will expire in 2026. These renewed agreements will be effective until 2039.

76
 Regulatory Matters

 Regulation of chemicals. Some of our products are subject to regulations applicable to the
marketing, distribution and use of chemical substances present in their composition. For example,
the European Commission has adopted a European Chemicals Policy, known as REACH
(‘‘Registration, Evaluation and Authorization of Chemicals’’). Under REACH, European
manufacturers and importers are required to register substances prior to their entry into the
European market and in some cases may be subject to an authorization process. A company that
fails to comply with the REACH regulations could face fines and penalties.

 Regulation of international maritime transportation. We are subject to health, safety and

environmental regulation by the International Maritime Organization (‘‘IMO’’). IMO rules are
based not only on the international shipping categories, but also on the types of cargoes
transported, including special rules for iron ore, coal, nickel and copper. The IMO is currently
discussing further measures for enhancing the energy efficiency of international shipping including
the development of a global data collection system which will eventually enable market-based
measures to curb greenhouse gas emissions. These measures to curb greenhouse gas emissions
may increase our freight cost in the future. In 2016, the IMO also approved regulation
establishing limits for sulfur oxides emission limits, which will become effective in 2020. This
regulation may increase freight cost due to the need to use bunker with low sulphur content or
additional pollutant control equipment associated with air emissions. Also, the International
Convention for the Control and Management of Ships’ Ballast Water and Sediments will become
effecting in September 2017. Under this convention, all ships during their international voyages
are required to manage their ballast water and sediments in compliance with the defined
requirements, which may also result in increases of freight and port operation costs.

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 DISCONTINUED OPERATIONS

In December 2016, we agreed to sell substantially all of our fertilizer business to Mosaic, subject to
certain conditions precedent. Until closing of the transaction, which is expected by the end of 2017, we
continue to conduct potash and phosphate operations in Brazil and to hold a 40% economic interest and 51%
voting interest in a joint venture that operates a phosphate rock mine in Peru. As a result of this transaction,
our Fertilizer business is reported as discontinued operations, which requires the presentation of prior periods
of this line of business as discontinued operations.

Phosphates and nitrogen

Our subsidiary Vale Fertilizantes is a producer of phosphate rock, phosphate fertilizers

(e.g., monoammonium phosphate (MAP), triple superphosphate (TSP) and single superphosphate (SSP)),
dicalcium phosphate (DCP) and nitrogen fertilizers (e.g., ammonia and ammonium nitrate). It is the largest
producer of phosphate and nitrogen crop nutrients in Brazil. Vale Fertilizantes operates the following
phosphate rock mines, through concessions for indefinite period: Catalão, in the Brazilian state of Goiás,
Tapira, Patos de Minas and Araxá, all in the Brazilian state of Minas Gerais, and Cajati, in the Brazilian state
of São Paulo. In addition, Vale Fertilizantes has nine processing plants for the production of phosphate and
nitrogen nutrients, located in Catalão in the Brazilian state of Goiás; Araxá, Patos de Minas and Uberaba,
which are all in the Brazilian state of Minas Gerais; Cajati and three plants in Cubatão, which are all in the
Brazilian state of São Paulo. In February 2015, operation at our plant in Guará was suspended due to market
conditions.

Since 2010, we also have a 40% economic interest and 51% voting interest in the joint venture
Compañia Minera Miski Mayo S.R.L, which operates the Bayóvar phosphate rock mine in Peru, with nominal
capacity of 3.9Mtpy, through a concession for indefinite period.

The following table sets forth information about our phosphate rock production.

Production for the year ended December 31,

Mine Type 2014 2015 2016
(thousand metric tons)
Bayóvar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 3,801 3,881 3,853
Catalão . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 1,055 1,000 872
Tapira . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 2,005 1,970 1,633
Patos de Minas(1) . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 73 23 0
Araxá . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 883 707 711
Cajati . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 605 581 477
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,421 8,163 7,546

(1) Patos de Minas operation was suspended in the third quarter of 2015 due to market conditions.

The following table sets forth information about our phosphate and nitrogen nutrients production.

Production for the year ended December 31,

Product 2014 2015 2016
(thousand metric tons)
Monoammonium phosphate (MAP) . . . . . . . . . . . . . . . . . . . . . . . . . 1,065 1,097 1,020
Triple superphosphate (TSP) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 910 866 833
Single superphosphate (SSP) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,854 1,953 1,753
Dicalcium phosphate (DCP) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 502 480 487
Ammonia(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178 138 135
Nitric acid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 469 475 468
Ammonium nitrate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 485 515 523

(1) After the sale of Araucária in June 2013, we only produce ammonia at our Cubatão plant.

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 Discontinued operations

Phosphate reserves

Our phosphate reserves estimates are of in-place material after adjustments for depletion, mining
dilution and recovery. The total phosphate reserves have decreased mainly due to reevaluation of our reserves
at Araxá and Cajati, and because certain reserves from Bayóvar were downgraded to resources. The
remaining phosphate reserves decreased due to mine production depletion.

Phosphate reserves(1)(2)
Proven – 2016 Probable – 2016 Total – 2016 Total – 2015
Tonnage Grade Tonnage Grade Tonnage Grade Tonnage Grade
Bayóvar(3) . . . . . . . . . . . . . . 101.6 16.96 145.6 14.97 247.2 15.79 402.0 15.40
Catalão . . . . . . . . . . . . . . . . 56.3 10.52 29.1 10.62 85.5 10.55 93.5 10.53
Tapira . . . . . . . . . . . . . . . . . 276.9 7.76 378.0 7.41 655.0 7.56 666.6 7.57
Araxá . . . . . . . . . . . . . . . . . 21.3 10.71 1.0 7.75 22.3 10.59 86.6 11.86
Cajati . . . . . . . . . . . . . . . . . 40.5 5.16 41.2 5.15 81.7 5.15 104.8 5.20
Patrocı́nio(4) . . . . . . . . . . . . . 183.8 13.73 302.3 11.10 486.1 12.09 486.1 12.09
Total . . . . . . . . . . . . . . . . . . 680.4 10.91 897.3 9.88 1,577.7 10.32 1,839.6 10.69

(1) Tonnage is stated in millions of dry metric tons. Grade is % of P2O5.

(2) Average mass recoveries (tonnage basis) are: 15.8% for Araxá, 11.7% for Cajati, 14.0% for Catalão, 22.9% for Patrocı́nio, 14.6% for
Tapira and 38.0% for Bayóvar.
(3) Vale holds 51% of the voting capital and 40% of the total capital of MVM Resources International, B.V., the entity that controls
Bayóvar. The reserves figures have not been adjusted to reflect our ownership interest.
(4) Reserves reflect the original scope of the Patrocı́nio project. Due to the macroeconomic scenario, we have modified the scope of this
project in order to integrate it with the Araxá operation.

Phosphate rock ore mine

Projected
Type Operating since exhaustion date Vale interest
(%)
Bayóvar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 2010 2040(1) 40.0
Catalão . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 1982 2033 100.0
Tapira . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 1979 2046(2) 100.0
Araxá . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 1977 2042(3) 100.0
Cajati . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 1970 2033 100.0
Patrocı́nio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Open pit 2016 2046(2) 100.0

(1) Life of mine decreased from 2045 to 2040 because reserves of layers 6 and 7 were downgraded to resources.
(2) Projected exhaustion date limited to economic feasibility study. The expected mine life is longer than indicated above.
(3) Life of mine increased from 2024 to 2042 due to reevaluation of reserves and integration with Patrocı́nio ROM project.

Potash

We conduct potash operations in Brazil at the parent-company level, with mining concessions of
indefinite duration. We have leased Taquari-Vassouras, the only potash mine in Brazil (in Rosario do Catete,
in the Brazilian state of Sergipe), from Petrobras since 1992. In April 2012, we extended the lease for 30
more years. The following table sets forth information on our potash production.

Production for the year ended December 31, 2016

Mine Type 2014 2015 2016 process recovery
(thousand metric tons) (%)
Taquari-Vassouras . . . . . . . . . . . . . Underground 492 481 501 86.1

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Potash ore reserves

The total potash reserves have increased due to update of Taquari-Vassouras reserves model,
supported by approximately 30.000 meters of underground drilling. We were able to increase the reserves due
to reevaluation of extraction ratio; also we have made a partial pillar mining extraction. The reserve estimates
are of in-place material after adjustments for depletion, mining losses and recoveries, with no adjustments
made for metal losses due to processing.

Potash ore reserves(1)(2)

Proven – 2016 Probable – 2016 Total – 2016 Total – 2015
Tonnage Grade Tonnage Grade Tonnage Grade Tonnage Grade
Taquari-Vassouras(3) . . . . . . . . 3.6 25.05 6.0 21.88 9.5 23.06 7.7 23.72
Carnalita Project . . . . . . . . . . . 247.1 12.18 54.5 12.18 301.6 12.18 301.6 12.18
Total . . . . . . . . . . . . . . . . 250.7 12.36 60.5 13.14 311.1 12.51 309.3 12.47

(1) Tonnage is stated in millions of dry metric tons. Grade is % of KCl.

(2) Tonnage is before processing recovery.
(3) Silvinite potash reserves.

Potash ore mines

Projected
Type Operating since exhaustion date Vale interest
(%)
Taquari-Vassouras . . . . . . . . . . . . . . . . . . . . . . . . . Underground 1986 2020(1) 100.0
Solution
Carnalita Project(2) . . . . . . . . . . . . . . . . . . . . . . . . mining – 2042(3) 100.0

(1) Life of mine increased from 2018 to 2020 due to reevaluation of reserves; reevalation of extraction ratio; partial pillar mining
extraction.
(2) The Carnalita project is subject to approval by our Board of Directors.
(3) We have a 30-year lease with Petrobras, which was signed in 2012.

For purposes of determining our phosphate and potash reserves, we used the three-year historical
average prices set forth in the following table:

Fertilizer nutrients:
Phosphate . . . . . . . . . . . . . . . . . . . . . . . US$113.43 per dry metric ton Average benchmark price for phosphate
concentrate, FOB Morocco (source: CRU Fertilizer
Week)
Potash . . . . . . . . . . . . . . . . . . . . . . . . . US$282.23 per dry metric ton Average benchmark price for potash, FOB
Vancouver (source: CRU Fertilizer Week)

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II. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

OVERVIEW

In 2016, we delivered a sound operational performance, with multiple production records, particularly
(i) total iron ore production of 348.8 million metric tons, (ii) iron ore production of 148.1 million metric tons
in Carajás, (iii) nickel production of 311,000 tons, (iv) copper production of 453,100 tons, (v) cobalt
production of 5,799 tons, (vi) contained gold as byproduct in copper and nickel concentrates of 483,000 oz
and (vii) coal production of 5.5 million metric tons in Moatize.

In 2016, we generated net income attributable to our stockholders of US$3.982 billion compared to a
loss of US$12.129 billion in 2015. The most relevant factors impacting our results in 2016 were (i) the partial
recovery of average prices for iron ore and iron ore pellets, with an impact of US$2.966 billion on our net
revenues, (ii) higher sales volumes of iron ore fines and pellets (an impact of US$715 million on our net
revenues), nickel, copper and coal, (iii) lower prices for base metals (negative impact of US$431 million on
our net revenues), (iv) US$1.174 billion in charges for impairment of assets of continuing operations and
onerous contracts, and (v) loss in the amount of US$1.738 billion in loss of discontinued operations, as a
result of the sale of our fertilizer business to Mosaic.

We received US$1.343 billion as a result of divestments and sales of interests in certain joint ventures
and investments in 2016, including US$800 million as part of the sale an additional 25% of the gold produced
from the Salobo copper mine for the life of mine to Silver Wheaton, US$269 million from the sale of three
very large ore carriers of 400,000 DWT to ICBC International, and US$113 million from the sale of our
remaining 13.63% indirect interest in Paragominas to Hydro.

Major factors affecting prices

Iron ore and iron ore pellets

Iron ore and iron ore pellets are priced based on a wide array of quality levels and physical
characteristics. Price differences derive from various factors, such as the iron content of specific ore deposits,
the beneficiation processes required to produce the desired final product, particle size, moisture content and
the type and concentration of contaminants (such as phosphorus, alumina, silica and manganese ore) in the
ore. Also, fines, lump ore and pellets typically command different prices.

Demand for our iron ore and iron ore pellets is a function of global demand for carbon steel.
Demand for carbon steel, in turn, is strongly influenced by real estate and infrastructure construction and
global industrial production. Demand from China has been the principal driver of world demand and prices.

Prices are also influenced by the supply of iron ore and iron ore pellets in the international market. In
2015, an excess in the iron ore supply had a negative impact on prices. In 2016, prices began to rise in
February driven by policies and supply restrictions imposed by the Chinese government, which caused iron ore
prices to reach a peak of US$70 per dry metric ton by early May. As expected, steel mills increased their
productivity in response to the increase in demand and price, which increased the premium for high grade
ores, such as our iron ore from Carajás, and pellets. Steel mill productivity rates stabilized through August
2016, as well as high grade material premiums, with high coking coal prices increasing the value perception of
high grade ores even more. Prices increased again in October 2016, reaching US$83.95 per dry metric ton in
December 2016, with the price spread between the 65% Ferrous content iron ore that we produce in Carajás
and the benchmark 62% Ferrous content iron ore reaching US$15 per dry metric ton.

The expected conclusion of certain iron ore projects in 2017, especially in Australia and in Brazil, may
result in negative pressures on prices, which would pose additional challenges for higher cost producers of
iron ore. We expect China’s economic growth to slow down in 2017, principally due to slower growth in the
real estate and manufacturing sectors, which may be partially offset by infrastructure investments.

81
 Our iron ore prices are based on a variety of pricing options, which generally use spot price indices as
a benchmark. Our pricing is generally based on published indices and uses a variety of mechanisms, including
current spot prices, average prices over an agreed period and future prices on delivery. In cases where the
final price is only determinable on a future date after shipment, we recognize the sale based on a provisional
price at the time of shipment with a subsequent adjustment reflecting the final price.

Nickel

Nickel is an exchange-traded metal, listed on the LME and, starting in 2015, on the SHFE. Most
nickel products are priced based on a discount or premium to the LME price, depending on the nickel
product’s physical and technical characteristics. Demand for nickel is strongly affected by stainless steel
production, which represents, on average, 69% of global nickel consumption.

We have short-term fixed-volume contracts with customers for the majority of our expected annual
nickel sales. These contracts, together with our sales for non-stainless steel applications (alloy steels, high
nickel alloys, plating and batteries), provide stable demand for a significant portion of our annual production.
In 2016, 58% of our refined nickel sales were made for non-stainless steel applications, compared to the
industry average for primary nickel producers of 30%, bringing more stability to our sales volumes. As a
result of our focus on such higher-value segments, our average realized nickel prices for refined nickel have
typically exceeded LME cash nickel prices.

Stainless steel is a significant driver of demand for nickel, particularly in China. In 2016, Chinese
stainless steel demand represented 65% of total global demand. As a consequence, changes in Chinese
stainless steel production have a large impact on global nickel demand. In 2016, Chinese stainless steel
production grew 10% compared to 3% in 2015. Also, the growth in stainless focused on 300-series grade
steels, which contains relatively high amounts of nickel, due to superior physical characteristics compared to
other austenitic series. We anticipate that demand will continue growing in 2017.

While stainless steel production is a major driver of global nickel demand, stainless steel producers
can obtain nickel with a wide range of nickel content, including secondary nickel (scrap). The choice between
primary and secondary nickel is largely based on their relative prices and availability. Between 2012 and 2016,
secondary nickel accounted for approximately 40% of total nickel used for stainless steels, and primary nickel
accounted for approximately 60%. Regional availability and consumption of secondary nickel varies. In China,
due to low availability of scrap, the use of secondary nickel represents 20% of the total nickel used for
stainless steels, while nickel pig iron, a relatively low-grade nickel product made primarily in China from
imported lateritic ores, accounts for approximately 32%.

In recent years, Chinese domestic production of nickel pig iron accounted for the majority of world
nickel supply growth. In 2016, approximately 360,000 metric tons, representing 19% of world primary nickel
supply was produced as nickel pig iron, mainly using nickel ore from the Philippines. Chinese nickel pig iron
production was adversely affected by export restriction of unprocessed ores from Indonesia, beginning in 2014.
As a result, despite the increase of ore supply from the Philippines, nickel pig iron production declined and
has continued to decline in 2016 by 9% year-over-year. Nickel pig iron projects in Indonesia continued to
ramp up in 2016, with production levels increasing significantly relative to 2015. However, due to the low
price environment the overall global supply declined 2% as producers reduced production and several mines
closed. Recent market developments in Indonesia and the Philippines may further impact nickel pig iron
production in China. In January 2017, the Indonesian government issued a ministerial decree changing the
2009 mining law that banned the export of unprocessed and semi-processed ores from the country. The
ministerial decree allows for the controlled recommencement of nickel ore exports from Indonesia. In
February 2017, the government of the Philippines announced the results of a country-wide mining audit with
over half of the mines associated with Philippine nickel ore exports identified for potential closure. The
government of the Philippines is currently auditing the mining industry, which may result in restrictions on
mining exports, which in turn would further contribute to the decline of the Chinese nickel pig iron industry.

82
 Overview

As a result of increased demand and decrease in supply, the nickel market was in deficit in 2016.
Global exchange inventories declined 26,000 tons from January 1, 2016 to December 31, 2016. We expect the
market to remain in deficit in 2017.

Copper

Copper demand in recent years has been driven primarily by China, given the important role copper
plays in construction in addition to electrical and consumer applications. Copper prices are determined on the
basis of (i) prices of copper metal on terminal markets, such as the LME and the NYMEX, and (ii) in the
case of intermediate products, such as copper concentrate (which comprise most of our sales) and copper
anode, treatment and refining charges negotiated with each customer. Under a pricing system referred to as
MAMA (‘‘month after month of arrival’’), sales of copper concentrates and anodes are provisionally priced at
the time of shipment, and final prices are settled on the basis of the LME price for a future period, generally
one to three months after the shipment date.

Demand for refined copper grew by an estimated 2% in 2016, and China was responsible for an
approximately 48% of worldwide consumption. Most of the copper imported by China was used in
infrastructure and the electrical grid. New projects primarily in Peru and mine expansions continued to ramp
up in 2016, resulting in a global mine output increase of 5% in 2016 relative to 2015. As supply grew more
than demand in 2016, copper prices declined in 2016. Prices recovered in fourth quarter of 2016, as the
market anticipated a potential increase in U.S. demand given the election results. We anticipate that the
market will reach a balance in 2017, as demand continues to grow and projects complete ramping up.

Coal

Demand for metallurgical coal is driven by steel demand, and future growth continues to be expected
in Asia. Asia, including India, accounts for more than half of the steel market and consumes approximately
75% of seaborne metallurgical coal. Chinese total import demand increased by 17% to almost 68 million
metric tons in 2016 compared to approximately 57 million metric tons imported in 2015. In 2016, China
accounted for approximately 20% of all metallurgical coal imports. Global demand excluding China declined
by 1.8% in 2016, compared to 2015, partially due to the decline in imports in Europe and Brazil.

In 2016, the Chinese government imposed a 276-days per year constraint on the operations of coal
producers, creating a major supply shortage. Consequently, coal production in China declined by more than
10% in 2016, causing significant increase in prices. Disruptions in Australian operations and cutbacks from
U.S. producers over the last two years also contributed to the price surge. The seaborne metallurgical coal
market, which has been affected by four years of constant price declines, registered a rapid increase in
metallurgical coal rise, exceeding US$100 per metric ton in July, then exceeding US$200 per metric ton in
September 2016 and finally exceeding US$300 per metric ton in November 2016. The steep rise in prices
prompted the Chinese government to gradually loosen coal production controls, causing prices to decline.
Metallurgical coal price on February 28, 2017 was US$162.5 per ton.

Demand for thermal coal is closely related to electricity consumption, which continues to be driven by
global economic growth and urbanization, with the highest levels of growth found in Asia and emerging
markets. Global seaborne demand decreased by approximately 1.4% in 2016 compared to 2015. Chinese
seaborne coal demand soared in mid-2016 due to a hot summer and strong industrial activity. Chinese
seaborne imports reached approximately 150 million metric tons, an increase of 12% year on year, while
European seaborne imports fell by nearly 18%. European seaborne import decline was largely due to capacity
closures in coal-fired power plants in the United Kingdom. In addition, Germany and Spain produced more
electricity from gas in 2016, and Germany increased electricity production from hydro. In India, thermal coal
demand remained stable year on year, and imports dropped by 6.3% in 2016, compared to 2015, amid an
increase in domestic thermal coal supply. Even though Indian domestic coal production has underperformed
against government targets affected by infrastructure bottlenecks, heavy rains and by lackluster demand.

83
 After China introduced the 276-working-day policy in April, the price of thermal coal reached US$110
per ton in Asia as Chinese utility companies sought seaborne material to offset domestic supply shortage.
While there have been several drivers of thermal coal seaborne prices in 2016, the coal industry reform led by
the Chinese government altered thermal coal prices globally. The renewed production control relaxation
measure is likely to allow the market to return to balance in 2017. Together with normalized inventory levels
and lower influence of speculative activities, we expect thermal coal prices to decline through the year.

Climate change policies will continue to adversely impact coal demand in Europe, North America and
China. However, consumption in other developing Asian economies is expected to expand. On the supply
side, current investments are low and the lack of new project developments is expected to impact supply and
demand balance by 2020, at which point prices will be set by incentive prices.

Sale of fertilizer business

As part of our ongoing efforts to optimize the structure of our portfolio of businesses in order to
achieve the most efficient allocation of capital, in December 2016 we entered into an agreement with Mosaic
for the sale of our Fertilizers business, including assets in Brazil, Peru and Canada. As a result of this
agreement, we report operational and financial results for our fertilizers business in the income statements
under ‘‘discontinued operations.’’ Therefore, unless otherwise indicated, all figures presented in this annual
report do not include the results of the fertilizers business. For more information on the sale of our fertilizer
business, see Information on the Company—Business Overview—Significant changes in our business—
Dispositions and asset sales—Sale of Fertilizer Business.

The net assets of our fertilizer business in our balance sheet as of December 31, 2016 were adjusted
to reflect their fair value minus the cost to sell the business, and we recognized a loss in the amount of
US$1.738 billion (US$1.147 billion, net of tax) under ‘‘loss of discontinued operations’’ in our income
statement for the year ended December 31, 2016.

Impairment charges

In recent years, we have recognized significant impairments of our assets and investments, attributable
to a variety of factors. In 2016, the most important factor was the changing price environment’s effects on our
short to medium-term pricing assumptions for nickel. As a result, in 2016 we recognized impairments on
assets and investments of continuing operations, and a provision for losses on onerous contracts, totaling
US$1.174 billion.

The main impairment charges we recognized in 2016 were:

 US$631 million on assets of our nickel operations in Newfoundland and Labrador, in Canada,
and US$284 million on assets of our nickel operations in New Caledonia, due to lower nickel
prices;

 US$27 million on assets of our coal operations in Australia, due to the revision of mining plans in
the Australian coal mines; and

 US$257 million on two onerous contracts relating to our ferrous minerals business, a port services
agreements providing for minimum guaranteed volume in the Midwestern System and a
manganese ore supply agreement.

These amounts were partially offset by reversal of prior impairments on assets of our Northern
System’s pelletizing plant based on new market circumstances and on studies carried out by our management
demonstrating economic feasibility. Accordingly, the total of US$160 million impairment recorded in 2013 and
2015 was fully reversed.

84
 Overview

Failure of Samarco’s Fundão tailings dam

We own a 50% interest in Samarco and accounts for it under the equity method. Below is a summary
of the impact of the failure of Samarco’s dam in our financial statements:

 Because Samarco is a joint venture, these impacts were accounted for under the equity method in
our consolidated financial statements. The carrying value for our investment in Samarco was
reduced to zero in 2015.

 In June 2016, pursuant to the Framework Agreement, Samarco, Vale S.A. and BHPB created the
Renova foundation to develop and implement remediation and compensation programs over
many years. The Framework Agreement provides that to the extent that Samarco does not meet
its funding obligations to the foundation, each of Vale S.A. and BHPB must provide funds to the
foundation in proportion to its 50% equity interest in Samarco. Samarco initially expected to
resume its operations in the last quarter of 2016. In the second quarter of 2016, in light of the
status of the necessary procedures for Samarco to resume operations and the uncertainties related
to the licensing approval by the governmental authorities, Samarco reviewed its initial
assumptions and concluded that it was unable to make a reliable estimate of how and when its
operations will resume. As a result of these uncertainties, and other uncertainties with respect to
Samarco’s expected cash flows, we recognized a provision in the second quarter of 2016 for
estimated costs in the amount of R$5.560 billion, which was discounted at a risk-free rate,
resulting in a provision on our balance sheet as of June 30, 2016 in the amount of
US$1.163 billion (R$3.733 billion, based on the exchange rate of June 30, 2016). This provision
represents the present value of our best estimate of the amounts we may incur to comply with
our obligations under the Framework Agreement, considering our 50% stake in Samarco The
amount of the provisions related to Samarco as of December 31, 2016 is US$1.077 billion. At
each reporting period, we will reassess the key assumptions used by Samarco in the preparation
of its projected future cash flows and will adjust the provision, if required.

 In August 2016, Samarco issued non-convertible private debentures which were equally subscribed
by Vale S.A. and BHPB. The resources contributed by Vale S.A. were allocated as follows:
(i) R$222 million (US$68 million) was used by Samarco in the reparation programs in accordance
with the Framework Agreement, and therefore, deducted from the provision of US$1.163 billion
mentioned above; and (ii) R$234 million (US$71 million) was used by Samarco’s to fund its
working capital, and therefore recognized in our income statement as ‘‘Impairment and other
results in associates and joint ventures.’’ We intend to make available short-term facilities of up to
US$115 million to support Samarco’s operations during the first half of 2017. These funds will be
released as needed and subject to achieving certain milestones, but we have not undertaken an
obligation to Samarco. BHPB has stated that it will make available to Samarco short-term
facilities with similar terms and conditions as mentioned above.

 Upon creation of the foundation, Samarco transferred to the foundation most of the reparation
and compensation programs. Therefore, we made contributions to the foundation in the total
amount of R$239 million (US$71 million) in 2016 to be used in the programs in accordance with
the Framework Agreement. This total amount was deducted from the provision of
US$1.163 billion mentioned above.

Effect of Brazilian currency exchange variation

Our results are affected in several ways by changes in the Brazilian real exchange rate. The year-end
exchange rate variations impact our financial results, while the average exchange rate impacts our operational
performance.

85
 In 2016, the Brazilian real appreciated 17% against the U.S. dollar, from an exchange rate of R$3.90
to US$1.00 on December 31, 2015 to R$3.26 to US$1.00 on December 31, 2016. The most important effects
were non-cash gains, as described below.

 Most of our debt (US$22.386 billion as of December 31, 2016, not including accrued charges) is
denominated in currencies other than the Brazilian real, principally the U.S. dollar. Because the
functional currency of our parent company for accounting purposes is the Brazilian real, changes
in the value of the U.S. dollar against the Brazilian real result in exchange gain or loss on our net
liabilities. In 2016, the appreciation of the Brazilian real against the U.S. dollar had a positive
impact in our financial results due to exchange gains on our net U.S. dollar-denominated
liabilities of US$3.094 billion.

 We had real-denominated debt of US$6.305 billion as of December 31, 2016, excluding accrued
charges. Since most of our revenues are in U.S. dollars, we may use swaps to convert our debt
service from Brazilian reais to U.S. dollars. Changes in the value of the U.S. dollar against the
Brazilian real result in fair value variation on these derivatives, affecting our financial results. As a
result of the appreciation of the Brazilian real against the U.S. dollar in 2016, we had fair value
gains on our currency derivatives of US$959 million. For more information on our use of
derivatives, see Risk management.

In 2016, on an annual average, the Brazilian real depreciated by 4% against the U.S. dollar, from an
average exchange rate of R$3.34 to US$1.00 in 2015 to R$3.48 to US$1.00 in 2016. The Brazilian real
depreciation on an annual average brought positive impacts to our operational result and cash flows. The
most important effect is described below:

 Most of our revenues are denominated in U.S. dollars, while most of our cost of goods sold are
denominated in other currencies, including the Brazilian real (54% in 2016), and the Canadian
dollar (12% in 2016). In 2016, 29% of our cost of goods sold was denominated in U.S. dollars. As
a result, the depreciation of the Brazilian real and other currencies against the U.S. dollar
reduced our costs and expenses by US$399 million.

In January 2017, Vale implemented hedge accounting for the foreign currency risk arising from its net
investments in Vale International and Vale Austria. The purpose of the program is to mitigate the impact of
foreign exchange variations in Vale’s earnings, reducing volatility and allowing financial statements to better
reflect the economic performance of the company.

Under the hedge accounting program, the Vale S.A. debt denominated in U.S. dollars and Euros will
serve as a hedge instrument for Vale S.A. investments in Vale International and Vale Austria. With the
program, the impact of exchange rate variations over debt denominated in U.S. dollars and Euros will be
partially recorded under other comprehensive income reducing volatility on financial performance.

86
 RESULTS OF OPERATIONS

Consolidated Revenues

In 2016, our net operating revenues from continuing operations increased by 17.6% to
US$27.488 billion, primarily resulting from higher realized prices for iron ore fines and pellets (an impact of
US$2.966 billion on our net revenues) and other commodities, and higher sales volumes of iron ore fines and
pellets (an impact of US$715 million on our net revenues), nickel, copper and coal. Our net operating
revenues were adversely impacted by lower prices for base metals (negative impact of US$431 million). Net
operating results of each segment are discussed below under —Results of operations by segment.

Our revenue depends, among other factors, on the volume of production at our facilities and the
prices for our products. We publish a quarterly production report that is available on our website and
furnished to the SEC on Form 6-K. Increases in the capacity of our facilities resulting from our capital
expenditure program have an important effect on our performance. Our production is also affected by
acquisitions and dispositions.

The following table summarizes, for the periods indicated, the distribution of our net operating
revenues of continuing operations based on the geographical location of our customers.

Net operating revenues by destination

2014 2015 2016
(US$ million) (% of total) (US$ million) (% of total) (US$ million) (% of total)
North America
Canada . . . . . . . . . . . . . . US$1,393 4.0% US$1,122 4.8% US$1,172 4.3%
United States . . . . . . . . . . 1,368 3.9 855 3.7 1,005 3.6
2,761 7.9 1,977 8.5 2,177 7.9
South America
Brazil . . . . . . . . . . . . . . . 3,696 10.5 2,017 8.6 2,064 7.5
Other . . . . . . . . . . . . . . . 656 1.9 377 1.6 354 1.3
4,352 12.4 2,394 10.2 2,418 8.8
Asia
China . . . . . . . . . . . . . . . 12,657 36.0 9,095 38.9 12,747 46.4
Japan . . . . . . . . . . . . . . . 3,627 10.3 1,959 8.4 1,741 6.3
South Korea . . . . . . . . . . . 1,555 4.4 790 3.4 880 3.2
Taiwan . . . . . . . . . . . . . . 721 2.1 620 2.6 621 2.3
Other . . . . . . . . . . . . . . . 976 2.8 830 3.5 889 3.2
19,536 55.6 13,294 56.8 16,878 61.4
Europe
Germany . . . . . . . . . . . . . 2,111 6.0 1,433 6.1 1,379 5.0
United Kingdom . . . . . . . . 709 2.0 399 1.7 326 1.2
Italy . . . . . . . . . . . . . . . . 849 2.4 461 2.0 435 1.6
France . . . . . . . . . . . . . . 565 1.6 331 1.4 429 1.6
Other . . . . . . . . . . . . . . . 2,374 6.8 1,905 8.1 2,079 7.5
6,608 18.8 4,529 19.4 4,648 16.9
Rest of the world . . . . . . . . 1,867 5.3 1,190 5.1 1,367 5.0
Total . . . . . . . . . . . . . . US$35,124 100.0% US$23,384 100.0% US$27,488 100.0%

Consolidated operating costs and expenses

Our cost of goods sold and services rendered from continuing operations totaled US$17.650 billion in
2016, decreasing by 5.9%, or US$1.101 billion, from the US$18.751 billion recorded in 2015. Lower costs were
mostly driven by the positive results of cost-saving initiatitves (US$1.718 billion, of which US$1.374 billion in
our ferrous minerals business), exchange rate variation (US$463 million) and partially offset by higher sales
volume.

87
 Our selling, general, administrative and other expenses from continuing operations decreased by
28.3% in 2016, mostly due to simplification of corporate functions, lower expenses with corporate services and
other cost-cutting measures. We reduced our research and evaluation expenses by 19.2%, to US$319 million
in 2016 from US$395 million in 2015. Our pre-operating and stoppage expenses decreased by US$489 million
in 2016, primarily because the ramp-up of our nickel operation in New Caledonia approached operational
targets in 2015 and therefore started to be accounted for as costs in 2016. Other operating expenses increased
by 29%, mainly due to the positive effect of US$150 million from goldstream transaction recorded in 2016,
compared to US$230 million in 2015, and to the positive effect of US$37 million reversal of provisions for
asset retirement obligations in 2016 compared to US$331 million in 2015.

Results of operations by segment

Net operating revenue by segment

The following table summarizes our net operating revenues by product for the periods indicated.

Year ended December 31,

2014(1) % change 2015(1) % change 2016
(US$ million, except for %)
Ferrous minerals:
Iron ore . . . . . . . . . . . . . . . . . . . . US$19,301 (36.1)% US$12,330 28.0% US$15,784
Pellets . . . . . . . . . . . . . . . . . . . . . 5,263 (31.6) 3,600 6.3 3,827
Ferroalloys and manganese . . . . . . . . . 392 (58.7) 162 86.4 302
Other ferrous products and services . . . . 741 (36.6) 470 (6.8) 438
Subtotal . . . . . . . . . . . . . . . . . . . 25,697 (35.5) 16,562 22.9 20,351
Coal . . . . . . . . . . . . . . . . . . . . . . . . . 739 (28.8) 526 59.5 839
Base metals:
Nickel and other products(2) . . . . . . . . 6,241 (24.8) 4,693 (4.7) 4,472
Copper concentrate(3) . . . . . . . . . . . . 1,451 1.3 1,470 13.4 1,667
Subtotal . . . . . . . . . . . . . . . . . . . 7,692 (19.9) 6,163 (0.4) 6,139
Other products and services(4) . . . . . . . . . 996 (86.6) 133 19.5 159
Net operating revenues . . . . . . . . . . US$35,124 (33.4)% US$23,384 17.6% US$27,488

(1) Information for the years ended December 31, 2014 and 2015 were re-presented to reflect results of discontinued operations (see
note 14 to our consolidated financial statements).
(2) Includes nickel coproducts (copper) and byproducts (precious metals, cobalt and others).
(3) Does not include copper produced in our nickel operations.
(4) Includes energy.

88
 Results of operations

Sales volumes

The following table sets forth, for our principal products, the total volumes we sold in each of the
periods indicated.

Year ended December 31,

2014 2015 2016
(thousand metric tons, except where
indicated)
Ferrous minerals:
Iron ore fines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 255,877 276,393 289,940
Pellets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43,682 46,284 47,709
Manganese . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,879 1,764 1,851
Ferroalloys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 69 127
ROM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,075 12,269 3,496
Coal:
Thermal coal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,152 892 5,457
Metallurgical coal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,330 5,614 4,907
Base metals:
Nickel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 272 292 311
Copper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 353 397 430
PGMs (000’ oz) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 577 519 507
Gold (000’ oz) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 351 425 497
Silver (000’ oz) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,889 2,303 2,578
Cobalt (metric tons) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,188 3,840 4,734

Average realized prices

The following table sets forth our average realized prices for our principal products for each of the
periods indicated. We determine average realized prices based on our net operating revenues, which consist of
the price charged to customers, excluding certain items that we deduct in arriving at net operating revenues,
mainly value-added tax.

Year ended December 31,

2014 2015 2016
(US$ per metric ton, except where
indicated)
Ferrous minerals:
Iron ore . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75.43 44.61 54.44
Pellets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120.48 77.79 80.26
Manganese . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118.15 56.42 110.87
Ferroalloys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,125.83 899.32 757.67
Coal:
Thermal coal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67.65 52.36 46.17
Metallurgical coal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104.37 85.55 119.54
Base metals:
Nickel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,426.47 11,684.30 9,800.00
Copper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,015.47 4,352.94 4,458.00
Platinum (US$/oz) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,261.87 1,020.14 919.00
Gold (US$/oz) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,192.51 1,123.07 1,260.49
Silver (US$/oz) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.42 12.63 16.22
Cobalt (US$/lb) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.67 9.95 11.01

89
 Cost of goods sold by segment

The following table presents, for each indicated period, our cost of goods sold by segment and the
percentage change from year to year. Because significant portions of changes in our cost of goods sold may
derive from exchange rate variations, we also present in the table below the effect of exchange variations and
the changes on a constant currency basis.

Year ended December 31,

2016 2015(1) 2016
Cost of goods Cost of goods Variation as Exchange rate Variation Variation -
sold sold reported impact in 2016 without constant
(US$ million) (US$ million) (%) (US$ million) exchange rate currency basis
impact (%)
(US$ million)
Ferrous minerals:
Iron ore . . . . . . . . . . . . . . . . . . . 6,622 7,604 (12.9)% (148) (834) (11.2)%
Pellets . . . . . . . . . . . . . . . . . . . . 2,002 2,121 (5.6) (51) (68) (3.2)
Ferroalloys and manganese . . . . . . . . 231 175 32.0 (6) 62 36.6
Other ferrous products and services . . . 269 341 (21.1) (13) (59) (18.3)
Subtotal . . . . . . . . . . . . . . . . . 9,124 10,241 (10.9) (218) (899) (9.0)
Coal . . . . . . . . . . . . . . . . . . . . . . . 872 839 3.9 (3) 36 4.3
Base metals:
Nickel and other products(2) . . . . . . . 3,204 3,393 (5.6) (86) (103) (3.1)
Copper(3) . . . . . . . . . . . . . . . . . 924 903 2.3 (37) 58 6.7
Subtotal . . . . . . . . . . . . . . . . . 4,128 4,296 (3.9) (123) (45) (1.1)
Other . . . . . . . . . . . . . . . . . . . . . . . 259 139 86.3 (6) 126 95.3
Total (excluding depreciation) . . . . . . . . . 14,383 15,515 (7.3) (350) (782) (5.2)

Depreciation . . . . . . . . . . . . . . . . . . . 3,267 3,236 1.0 (113) 144 4.6

Total (including depreciation) . . . . . . . . . 17,650 18,751 (5.9)% (463) (638) (3.5)%

Year ended December 31,

2015(1) 2014(1) 2015
Cost of goods Cost of goods Variation as Exchange rate Variation Variation -
sold sold reported impact in 2015 without constant
(US$ million) (US$ million) (%) (US$ million) exchange rate currency basis
impact (%)
(US$ million)
Ferrous minerals:
Iron ore . . . . . . . . . . . . . . . . . . 7,604 9,532 (20.2)% (1,442) (486) (6.0)%
Pellets . . . . . . . . . . . . . . . . . . . . 2,121 2,705 (21.6) (540) (44) (2.0)
Ferroalloys and manganese . . . . . . . . 175 261 (33.0) (73) (13) (6.9)
Other ferrous products and services . . 341 565 (39.6) (179) (45) (11.7)
Subtotal . . . . . . . . . . . . . . . . . 10,241 13,063 (21.6) (2,234) (588) (5.4)
Coal . . . . . . . . . . . . . . . . . . . . . . . 839 1,071 (21.7) (80) (152) (15.3)
Base metals:
Nickel and other products(2) . . . . . . 3,393 3,710 (8.5) (336) 19 0.6
Copper(3) . . . . . . . . . . . . . . . . . 903 877 3.0 (258) 284 45.7
Subtotal . . . . . . . . . . . . . . . . . 4,296 4,587 (6.3) (594) 303 7.6
Other . . . . . . . . . . . . . . . . . . . . 139 601 (76.9) (112) (350) (71.6)
Total (excluding depreciation) . . . . . . . . . 15,515 19,322 (19.7) (3,020) (787) (4.8)

Depreciation . . . . . . . . . . . . . . . . . . 3,236 3,468 (6.7) (695) 463 16.7

Total (including depreciation) . . . . . . . . . 18,751 22,790 (17.7)% (3,715) (324) (1.7)%

(1) Information for the years ended December 31, 2014 and 2015 has been re-presented to reflect results of discontinued operations (see
note 14 to our consolidated financial statements).
(2) Includes nickel coproducts (copper) and byproducts (precious metals, cobalt and others).
(3) Does not include copper produced in our nickel operations.

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 Results of operations

Expenses by segment (excluding impairment charges)

The following table summarizes, for each indicated period, our expenses (including selling, general
and administrative, research and evaluation, pre-operating, stoppage and other expenses, net of other
revenues) by segment and the percentage change from year to year. Because significant portions of changes in
our expenses may derive from exchange rate variations, we also present in the table below the effect of
exchange variations and the changes on a constant currency basis. The table excludes the effect of impairment
charges. See—Impairment charges.

Year ended December 31,

2016 2015(1) 2016
Expenses Expenses Variation as Exchange rate Variation Variation -
(US$ million) (US$ million) reported impact in 2016 without constant
(%) (US$ million) exchange rate currency basis
impact (%)
(US$ million)
Ferrous minerals:
Iron ore . . . . . . . . . . . . . . . . . . . 727 643 13.1% (23) 107 17.3%
Pellets . . . . . . . . . . . . . . . . . . . . 108 19 468.4 – 89 468.4
Ferroalloys and manganese . . . . . . . . 15 18 (16.7) (1) (2) (11.8)
Other ferrous products and services . . . 14 (3) (566.7) 2 15 (1500.0)
Subtotal . . . . . . . . . . . . . . . . . . 864 677 27.6 (22) 209 31.9
Coal . . . . . . . . . . . . . . . . . . . . . . . . 21 223 (90.6) (1) (201) (90.5)
Base metals:
Nickel and other products(2) . . . . . . . 287 668 (57.0) – (381) (57.0)
Copper(3) . . . . . . . . . . . . . . . . . . 30 41 (26.8) (1) (10) (25.0)
Other base metals . . . . . . . . . . . . . (150) (230) (34.8) – 80 (34.8)
Subtotal . . . . . . . . . . . . . . . . . . 167 479 (65.1) (1) (311) (65.1)
Others . . . . . . . . . . . . . . . . . . . . . . . 274 294 (6.8) 4 (24) (8.1)
Total (excluding depreciation) . . . . . . . . . 1,326 1,673 (20.7) (20) (327) (19.8)
Depreciation . . . . . . . . . . . . . . . . . . . 220 483 (54.5) (6) (257) (53.9)
Total (including depreciation) . . . . . . . . . 1,546 2,156 (28.3)% (26) (584) (27.4)%

Year ended December 31,

2015(1) 2014(1) 2015
Expenses Expenses Variation as Exchange rate Variation Variation -
(US$ million) (US$ million) reported impact in 2015 without constant
(%) (US$ million) exchange rate currency basis
impact (%)
(US$ million)
Ferrous minerals:
Iron ore . . . . . . . . . . . . . . . . . . 643 1,737 (63.0)% (539) (555) (46.3)%
Pellets . . . . . . . . . . . . . . . . . . . 19 59 (67.8) (11) (29) (60.4)
Ferroalloys and manganese . . . . . . . 18 36 (50.0) (9) (9) (33.3)
Other ferrous products and services . . (3) 7 (142.9) (1) (9) (150.0)
Subtotal . . . . . . . . . . . . . . . . . 677 1,839 (63.2) (560) (602) (47.1)
Coal . . . . . . . . . . . . . . . . . . . . . . . 223 365 (38.9) (8) (134) (37.5)
Base metals:
Nickel and other products(2) . . . . . . 668 551 21.2 (27) 144 (27.5)
Copper(3) . . . . . . . . . . . . . . . . . 41 33 24.2 (9) 17 (70.8)
Other base metals . . . . . . . . . . . . (230) – – (230) –
Subtotal . . . . . . . . . . . . . . . . . 479 584 (18.0) (36) (69) (12.6)
Others . . . . . . . . . . . . . . . . . . . . . . 294 507 (42.0) (153) (60) (16.9)
Total (excluding depreciation) . . . . . . . . 1,673 3,295 (49.2) (757) (865) (34.1)
Depreciation . . . . . . . . . . . . . . . . . . 483 401 20.4 67 15 3.2
Total including depreciation . . . . . . . . . 2,156 3,696 (41.7)% (690) (850) (28.3)%

(1) Information for the years ended December 31, 2014 and 2015 were re-presented to reflect results of discontinued operations (see
note 14 to our consolidated financial statements).
(2) Includes nickel coproducts (copper) and byproducts (precious metals, cobalt and others).
(3) Does not include copper produced in our nickel operations.

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 Adjusted EBITDA by segment

Our management uses adjusted EBITDA to assess each segment’s contribution to our performance
and to support decisions about resource allocation. Adjusted EBITDA is a non-GAAP measure, which is
calculated for each segment using operating income or loss plus dividends received from joint ventures and
associates, and adding back the amounts charged as (i) depreciation, depletion and amortization,
(ii) impairment of non-current assets and provisions for losses on onerous contracts and (iii) results on
measurement or sale of non-current assets. For more information, see note 3 to our consolidated financial
statements.

The table below shows a reconciliation of our Adjusted EBITDA from continuing operations with our
net income (loss) from continuing operations for the years ended December 31, 2016, 2015 and 2014.
Year ended December 31,
2014 2015 2016
(US$ million)
Income (loss) from continuing operations attributable to Vale’s stockholders . . . . . . . 1,499 (11,929) 5,211
Loss attributable to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . (308) (501) (8)
Income (loss) from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,191 (12,430) 5,203
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,603 (5,249) 2,781
Impairment and others results in associates and joint ventures . . . . . . . . . . . . . . 61 349 1,220
Equity results in associates and joint ventures . . . . . . . . . . . . . . . . . . . . . . . . (501) 445 (309)
Financial results, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,018 10,654 (1,843)
Operating income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,372 (6,231) 7,052
Impairment of non-current assets and onerous contracts . . . . . . . . . . . . . . . . . . 99 8,769 1,174
Results on measurement or sale of non-current assets . . . . . . . . . . . . . . . . . . . 167 (61) 66
Dividends received from associates and joint ventures . . . . . . . . . . . . . . . . . . . 568 318 193
Depreciation, depletion and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,869 3,719 3,487
Adjusted EBITDA from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . 13,075 6,514 11,972

Adjusted EBITDA from discontinued operations (Fertilizers) . . . . . . . . . . . . . . . . 278 567 209

Total Adjusted EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,353 7,081 12,181

The following table summarizes Adjusted EBITDA for each of our segments.
Year ended December 31,
2014 2015 2016
Adjusted EBITDA Adjusted EBITDA Adjusted EBITDA
(US$ million)
Ferrous minerals:
Iron ore . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,076 4,105 8,445
Pellets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,981 1,685 1,820
Ferroalloys and manganese . . . . . . . . . . . . . . . . . . . . . 95 (31) 56
Other ferrous products and services . . . . . . . . . . . . . . . . 169 140 155
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,321 5,899 10,476
Coal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (669) (508) (54)
Base metals:
Nickel and other products(1) . . . . . . . . . . . . . . . . . . . . 1,980 632 985
Copper(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 541 526 713
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – 230 150
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,521 1,388 1,848
Other(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (98) (265) (298)
Total Adjusted EBITDA from continuing operations . . . . . . . . . 13,075 6,514 11,972

Adjusted EBITDA from discontinued operations (Fertilizers) . . . . 278 567 209

Total Adjusted EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . 13,353 7,081 12,181

(1) Includes nickel coproducts (copper) and byproducts (precious metals, cobalt and others).
(2) Does not include copper produced in our nickel operations.
(3) Includes energy.

92
 Results of operations

We discuss below, for each segment, the changes in our net operating revenues, cost of goods sold
(excluding depreciation, depletion and amortization), expenses (excluding depreciation, depletion and
amortization and excluding impairment charges) and Adjusted EBITDA.

Ferrous minerals

2016 compared to 2015

 Our net operating revenues from sales of ferrous minerals increased by 22.9%, from US$16.562 billion
in 2015 to US$20.351 billion in 2016, reflecting higher prices and sales volumes of iron ore and
iron ore pellets. Our average realized prices in 2016 were 22.0% and 3.2% higher than our
average realized prices in 2015 for iron ore and iron ore pellets, respectively. Our iron ore sales
volume increased by 4.9% in 2016 due to improved operational performance of the Northern
System.

 Our cost of goods sold from ferrous minerals, excluding depreciation, amortization and depletion,
decreased by 9.0% on a constant currency basis, mainly as a result of a decrease in our freight
costs, in the amount of US$705 million, the termination in December 2015 of our bunker oil
hedge accounting program, which had a negative impact in the amount of US$460 million on our
results for 2015, and other cost-cutting measures implemented in 2016, including the renegotiation
and termination of freight charter contracts. The decrease in our costs of goods sold was partially
offset by increased costs associated with higher sales volumes, in the amount of US$446 million.

 Our net expenses from ferrous minerals, excluding depreciation, amortization and depletion, and
excluding impairment charges, increased by 31.9% on a constant currency basis, mainly due to a
reversion of provisions for asset retirement obligations in 2015 in the amount of US$322 million.
We also saw an increase in pre-operating and stoppage expenses from US$169 million in 2015 to
US$187 million in 2016, mainly as a result of the increase in S11D pre-operating expenses and
stoppage expense in our iron ore operations in Mariana, in the state of Minas Gerais.

 Our adjusted EBITDA from ferrous minerals was US$10.476 billion in 2016, 77.6% higher than the
US$5.899 billion we reported in 2015. The increase was mainly due to the increase in market
prices (impact of US$2.727 billion), and also increases in sales volume and a positive impact of
exchange rate variations, in the amount of US$244 million. Dividends received from joint
ventures and associates operating in the ferrous minerals segment totaled US$113 million in 2016
compared to US$255 million in 2015, reflecting lower dividends, especially due to the lack of
dividends from Samarco.

2015 compared to 2014

 Our net operating revenues from sales of ferrous minerals decreased by 35.5%, from
US$25.697 billion in 2014 to US$16.562 billion in 2015, reflecting lower iron ore and iron ore
pellet prices, partially offset by higher sale volumes of iron ore and iron ore pellets. Our average
realized prices in 2015 were 40.8% and 35.4% lower than our average realized prices in 2014 for
iron ore and iron ore pellets, respectively. Our iron ore sales volume increased by 8.0% in 2015,
due to the ramp-up of the Carajás plant 2, Vargem Grande and Conceição I and II Itabirites
projects, and improvement of our distribution logistics, while the volume of our iron ore pellets
sales increased by 6.0% due to the ramp-up of the Tubarão VIII pelletizing plant.

93
 Our cost of goods sold from ferrous minerals, excluding depreciation, amortization and depletion,
decreased by 5.4% on a constant currency basis, mainly as a result of (i) a decrease in our freight
costs, in the amount of US$1.246 billion, (ii) a reduction in the railroad transportation fees paid
to MRS in the amount of US$104 million, (iii) US$185 million reduction in the cost of
acquisition of iron ore, mainly due to lower prices, and (iv) a decrease in pellet plants leasing, in
the amount of US$63 million mainly due to the decline in prices. These effects were partially
offset by increased costs associated with the increase in volume sold, in the amount of
US$1.077 billion. In addition, we implemented general cost-cutting measures, including the
renegotiation and termination of contracts.

 Our net expenses from ferrous minerals, excluding depreciation, amortization and depletion, and
excluding impairment charges, decreased by 47.1% on constant currency basis, from
US$1.279 billion in 2014 to US$677 million in 2015, mainly due to a reversion of provisions for
asset retirement obligations in the amount of US$322 million and a US$201 million reduction in
research and evaluation expenses.

 Our adjusted EBITDA from ferrous minerals was US$5.899 billion in 2015, 47.9% lower than in
2014, for the reasons described above, partially offset by the positive impact of exchange rate
variation, in the amount of US$2.787 billion. Dividends received from joint ventures and
associates operating in the ferrous minerals segment totaled US$255 million in 2015 compared to
US$526 million in 2014, reflecting lower dividends from Samarco.

Coal

2016 compared to 2015

 Our net operating revenues from sales of coal increased by 59.5%, to US$839 million in 2016 from
US$526 million in 2015. This increase primarily reflected higher sales prices of metallurgical coal
(impact of US$161 million) and higher sales volumes for thermal coal (impact of US$208 million)
as a result of an increase in logistics capacity with the ramp-up of the Nacala Logistics Corridor,
allowing for the sale of thermal coal inventories. Sales volumes of metallurgical coal totaled 4.907
Mt in 2016, decreasing 707 kt as compared to 2015, as a result of a 33% decrease in sales
volumes from Carborough Downs, which faced geological issues in 2016 and was divested in
November 2016. Sales volumes of thermal coal reached 5.457 Mt in 2016, compared to 0.892 Mt
in 2015.

 Our cost of goods sold from coal, excluding depreciation, amortization and depletion, increased by
4.3% on a constant currency basis, from US$872 million in 2016 to US$836 million in 2015, as a
result of the ramp-up of the Nacala Logistics Corridor.

 Our net expenses from coal, excluding depreciation, amortization and depletion, and excluding
impairment charges, decreased by 90.5% on a constant currency basis, from US$222 million in
2015 to US$21 million in 2016, due to (i) reduced selling, general and administrative expenses in
Australia (impact of US$4 million) and (ii) higher effects of inventory adjustments on thermal
coal in Mozambique in 2016 as compared to 2015 (impact of US$165 million).

 Our adjusted EBITDA from coal was a loss of US$54 million in 2016, while in 2015 we had a loss
of US$508 million, reflecting higher coal prices (impact of US$155 million) and lower costs and
expenses, adjusted by the impact of higher volumes and exchange rate variation (impact of
US$386 million).

94
 Results of operations

2015 compared to 2014

 Our net operating revenues from sales of coal decreased to US$526 million in 2015, from
US$739 million in 2014. This 28.8% decrease primarily reflected lower prices and sales volume
for both thermal and metallurgical coal. Our sales volumes decreased due to lower sales from our
Isaac Plains and Integra Coal mines operations, which we suspended in May 2014, and eventually
sold in the last quarter of 2015.

 Our cost of goods sold from coal, excluding depreciation, amortization and depletion, decreased to
US$839 million in 2015, or 15.3% on a constant currency basis, due to the stoppage of our Isaac
Plains and Integra Coal mines, partially offset by additional costs in our operations in
Mozambique driven by higher sales volumes.

 Our net expenses from coal, excluding depreciation, amortization and depletion, and excluding
impairment charges, decreased by 37.5% on a constant currency basis, from US$365 million in
2014 to US$223 million in 2015, due to (i) reduced selling, general and administrative expenses in
Australia, (ii) the receipt of insurance proceeds of US$36 million in connection with a flood that
occurred in Australia in 2010 and (iii) lower effects of inventory adjustments on thermal coal in
Mozambique in 2015, as compared to 2014.

 Our adjusted EBITDA from coal was a loss of US$508 million in 2015, while in 2014 we had a loss
of US$669 million, reflecting the decline in coal prices and lower sales volume due to the
suspension of the Isaac Plains and Integra Coal mines in Australia. Dividends received from joint
ventures and associates operating in the coal segment amounted to US$28 million in 2015 and
US$28 million in 2014.

Base metals

2016 compared to 2015

 Our net operating revenues from sales of base metals totaled US$6.139 billion in 2016, a 0.4%
decrease from US$6.163 billion in 2015. The decrease was mainly driven by lower nickel prices
(US$544 million), which were partially offset by higher sales of nickel (US$182 million) and
copper (US$144 million), higher prices for gold, cobalt and silver byproducts (US$101 million)
and higher volumes for gold, cobalt and silver byproducts (US$89 million). The increase in nickel
sales volumes was primarily driven by the ramp up of our operations in New Caledonia and at
Long Harbour. The increase in copper sales volumes was mainly the result of higher copper
production in Sudbury and the completed ramp up of operations at Salobo.

 Our cost of goods sold from base metals, excluding depreciation, amortization and depletion,
decreased 1.1% on a constant currency basis. After adjusting for the effects of higher volumes
(US$260 million), costs decreased by US$305 million compared to 2015 mainly as a result of
higher production in Sudbury and the conclusion of the ramp-up of Salobo operations resulting in
dilution of fixed costs, lower fuel costs at PTVI and lower planned shutdown maintenance costs at
our Canadian operations.

 Our net expenses from base metals, excluding depreciation, amortization and depletion, and
excluding impairment charges, decreased 65.1% on a constant currency basis, mainly due to lower
pre-operating expenses reflecting the full transition of VNC costs from pre-operating expenses to
costs of goods sold (impact of US$287 million), partially offset by the effects from goldstream
transactions totaling US$150 million in 2016.

 Our adjusted EBITDA from base metals was US$1.848 billion in 2016, a 33.1% increase from 2015.
The increase was mainly due to lower expenses and costs (impact of US$617 million), higher
nickel and copper sales volumes (US$148 million) and exchange variation (US$126 million),
which was partially offset by lower prices (US$431 million)

95
 2015 compared to 2014

 Our net operating revenues from sales of base metals decreased to US$6.163 billion in 2015 from
US$7.692 billion in 2014. The 19.9% decrease primarily reflected lower prices for nickel and
copper, partially offset by higher nickel sales volumes, resulting from ramp-up of our operations
in New Caledonia and of Onça Puma, in Brazil, and higher copper sales volume, resulting from
the ramp-up of Salobo operations.

 Our cost of goods sold from base metals, excluding depreciation, amortization and depletion,
increased 7.6% on a constant currency basis, due to higher costs related to ramp-up of Onça
Puma and Salobo operations and increased allocation of VNC pre-operating expenses to costs of
goods sold.

 Our net expenses from base metals, excluding depreciation, amortization and depletion, and
excluding impairment charges, decreased 12.6% on constant currency basis, mainly due to lower
pre-operating expenses and a US$230 million gain on the gold stream transaction in 2015, partly
offset by lower insurance proceeds in 2015 of US$212 million (US$64 million in 2015 compared
to US$276 million in 2014).

 Our adjusted EBITDA from base metals was US$1.388 billion in 2015, 44.9% lower than in 2014.
Despite the lower nickel and copper prices, certain non-recurring items contributed to our income
generation, such as insurance proceeds received in 2014 and the proceeds received in the gold
stream transaction in 2015.

Financial results, net

The following table details our net financial results, net, from continuing operations for the periods
indicated.

Year ended December 31,

2014 2015 2016
(US$ million)
Financial income(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . US$389 US$251 US$170
Financial expenses(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,900) (1,068) (2,677)
Gains (losses) on derivatives, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,334) (2,477) 1,256
Foreign exchange gains (losses), net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,076) (7,044) 3,252
Indexation losses, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (97) (316) (158)
Financial results, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . US$(6,018) US$(10,654) US$1,843

(1) Includes short-term investments and other financial income (see note 6 to our consolidated financial statements)
(2) Includes loans and borrowings gross interest, capitalized loans and borrowing costs, financial expenses associated with labor, tax and
civil lawsuits, participative stockholders’ debentures, expenses of REFIS and others financial expenses (see note 6 to our consolidated
financial statements).

2016 compared to 2015. In 2016, our financial results, net, was income of US$1.843 billion, compared
to an expense of US$10.654 billion in 2015. This principally resulted from:

 A decrease in financial income from US$251 million in 2015 to US$170 million in 2016, as a
result of a decrease in our average cash position in 2016, as compared to 2015.

 An increase in financial expenses of US$1.609 billion, from US$1.068 billion in 2015 to

US$2.677 billion in 2016, attributable primarily to the US$1.382 billion increase in the
marked-to-market fair value of our shareholder debentures due to an increase in commodities
price.

96
 Results of operations

 Net foreign exchange gains of US$3.252 billion in 2016 compared to net foreign exchange losses
of US$7.044 billion in 2015, principally due to the appreciation of the Brazilian real against the
U.S. dollar.

 The net effect of fair value changes in derivatives, which represented a gain of US$1.256 billion
in 2016 compared to a loss of US$2.477 billion in 2015. This reflected the following main
categories of derivatives transactions:

 Currency and interest rate swaps. We recognized gains of US$959 million in 2016 from
currency and interest rate swaps, compared to a net loss of US$1.502 billion in 2015. These
swaps are primarily used to convert debt denominated in other currencies into U.S. dollars in
order to protect our cash flow from exchange rate volatility.

 Nickel derivatives. We recognized a loss of US$42 million in 2016 compared to a loss of

US$49 million in 2015. These derivatives are part of our nickel price protection program.

 Bunker oil derivatives. We recognized a gain of US$268 million in 2016 compared to a loss of
US$742 million in 2015. These gains or losses resulted from the mark to market of the hedge
contracts on bunker oil price; for 2016, we had entered in these contracts only in the last
quarter of the year, when we resumed hedging the bunker oil price due to the risk of
increased oil prices in 2017. As we resumed hedging bunker oil price in the last quarter of
2016, our financial results in 2017 will be impacted by the changes in the fair value of the
outstanding derivatives position at the end of each quarter. These derivatives are structured
to minimize the volatility of the cost of maritime freight, and the variation is due to the
sharp volatility in the spot price of bunker oil.

 A net indexation loss of US$158 million in 2016 compared to a net loss of US$316 million in
2015, mainly due to changes in discount rates on asset retirement obligation provisions.

2015 compared to 2014. Our financial results, net increased 77.0%, to US$10.654 billion in 2015 from
US$6.018 billion in 2014. This principally resulted from:

 Net foreign exchange losses of US$7.044 billion in 2015 compared to net foreign exchange losses
of US$2.076 billion in 2014, principally due to the depreciation of the Brazilian real against the
U.S. dollar.

 The net effect of fair value changes in derivatives, which represented a loss of US$2.477 billion in
2015 compared to a loss of US$1.334 billion in 2014. This reflected the following main categories
of derivatives transactions:

 Currency and interest rate swaps. We recognized a net loss of US$1.502 billion in 2015 from
currency and interest rate swaps, compared to net loss of US$683 million in 2014. These
swaps are primarily used to convert debt denominated in other currencies into U.S. dollars in
order to protect our cash flow from exchange rate volatility.

 Nickel derivatives. We recognized a loss of US$49 million in 2015 compared to a gain of

US$9 million in 2014. These derivatives are part of our nickel price protection program.

 Bunker oil derivatives. We recognized a net loss of US$742 billion in 2015 compared to a net
loss of US$533 million in 2014. These derivatives are structured to minimize the volatility of
the cost of maritime freight, and the variation is due to the sharp decrease in the spot
bunker oil price.

97
  Warrants. We recognized a net loss of US$142 million in 2015 compared to a net loss of
US$5 million in 2014. These derivatives were part of the consideration we received under the
2013 gold sale contract with Silver Wheaton.

 A net indexation loss of US$316 million in 2015 compared to a loss of US$97 million in 2014, as
a result of higher inflation in Brazil.

 A decrease in financial income from US$389 million in 2014 to US$251 million in 2015, as a
result of lower average cash position in 2015, as compared to 2014.

 A decrease in financial expenses of US$1.832 billion, from US$2.900 billion in 2014 to

US$1.068 billion in 2015, attributable primarily to the US$1.280 billion decrease in the amount of
our shareholder debentures, which are marked-to-market, due to the decline in commodities
price.

Equity results in associates and joint ventures

2016 compared to 2015. Our equity results in associates and joint ventures increased to a gain of
US$309 million in 2016 from a loss of US$445 million in 2015 mostly due to the positive results in 2016 from
our equity positions in Companhia Siderurgica do Pecém (US$25 million gain), MRN (US$48 million gain)
and California Steel Industries, Inc.—CSI (US$32 million gain), as compared to the negative results in 2015
from Samarco (US$167 million loss), Companhia Siderurgica do Pecém (US$307 million loss), CSI
(US$27 million loss) and Companhia Siderurgica do Atlântico—CSA (US$80 million loss).

2015 compared to 2014. Our equity results in associates and joint ventures in 2015 decreased to a
loss of US$445 million from an income of US$501 million in 2014, mostly due to the negative results from
Companhia Siderúrgica do Pecém (US$307 million loss in 2015) and from Samarco (US$167 million loss in
2015) while in 2014 we had a positive result from Samarco (US$392 million income).

Impairment and other results in associates and joint ventures

2016 compared to 2015. We recognized a loss resulting from impairment and other results in
associates and joint ventures of US$1.220 billion in 2016, of which US$1.109 billion related to our investments
in Samarco, US$75 million resulted from the sale of CSA and US$36 million from the sale of Mineração
Paragominas. We recognized a loss resulting from impairment and other results in associates and joint
ventures of US$349 million in 2015, of which US$446 million related to impairment from investments in
associates and joint ventures, which was partially offset by a gain in the sale of our participation in Shandong
Yankuang (US$79 million), a coking coal producer, and a gain in the disposal of energy generation assets
(US$18 million). See Business overview—Failure of Samarco’s tailings dam in Minas Gerais and note 15 to our
consolidated financial statements.

2015 compared to 2014. In 2015, we recognized a loss resulting from impairment and other results in
associates and joint ventures of US$349 million, of which US$132 million resulted from impairment from
investments in related to our investment in Samarco and US$314 million related to our investment in TEAL.
This was partially offset by US$97 million a gain in the sale of our participation in Shandong Yankuang
(US$79 million), a coking coal producer, and a gain in the disposal of energy generation assets
(US$18 million). In 2014, we recognized a loss resulting from impairment and other results in associates and
joint ventures of US$61 million, primarily resulting from a US$30 million loss resulting from the sale of Vale
Florestar.

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 Results of operations

Results of discontinued operations

2016 compared to 2015. In 2016, we had a net loss from discontinued operations attributable to
Vale’s stockholders of USS$1.229 billion, compared to a loss of US$200 million in 2015. In December 2016,
we entered into an agreement with Mosaic to sell a significant part of our fertilizer business. As a result of
this transaction, our fertilizer business is being reported as discontinued operations in our financial statements
for the year ended December 31, 2016, and we have re-presented our financial statements for the years ended
December 31, 2015 and 2014 accordingly. The net assets of our fertilizer business in our balance sheet as of
December 31, 2016 were adjusted to reflect their fair value minus the cost to sell the business, and we
recognized a loss in the amount of US$1.738 billion (US$1.147 billion, net of taxes) in ‘‘loss from
discontinued operations’’ in our income statement for the year ended December 31, 2016. For more
information on our discontinued operations see note 14 to our consolidated financial statements.

Income taxes

For 2016, we recorded net income tax expense of US$2.781 billion, compared to a net income tax gain
of US$5.249 billion in 2015. In 2016, our effective tax rate was 34.8%. The effective tax rate was slightly
different from the statutory rate mainly due to US$708 million of unrecognized tax on current year losses,
partially offset by the tax incentives for our iron ore, copper and nickel operations in the North and Northeast
regions of Brazil. The incentives are calculated based on the taxable income of the incentive activity (tax
operating income), taking into account the allocation of tax operating income to different tranches of
production during the periods specified for each product. In 2016, this tax incentive structure reduced our net
income tax expense by US$344 million.

For 2015, we recorded net income tax gain of US$5.249 billion, compared to a net income tax expense
of US$1.603 billion in 2014. In 2015, our effective tax rate was 29.7%. Tax legislation that became effective in
2015 provides that income of our foreign subsidiaries will be taxed in Brazil, on an accrual basis, applying the
differential between the local rate and the Brazilian tax rates. Accordingly, the effective tax rate was different
from the statutory rate mainly due to: (i) unrecognized tax losses and (ii) nondeductible impairment, partially
offset by the constitution of tax loss forward related to losses at foreign subsidiaries that we were able to
recognize due to change of law. Under the legislation that became effective in 2015, the accumulated losses of
our foreign subsidiaries as of December 31, 2014 were available to offset their future profits. On
September 30, 2015, we filed the required tax return and completed the review of the income tax loss
carryforwards available in each foreign subsidiary as of December 31, 2014, which permitted us to recognize a
deferred tax asset of US$2.952 billion related to accumulated losses in certain of our foreign subsidiaries.

99
 LIQUIDITY AND CAPITAL RESOURCES

Overview

In the ordinary course of business, our principal funding requirements are for capital expenditures,
dividend payments and debt service. We have historically met these requirements by using cash generated
from operating activities and borrowings, supplemented by dispositions of assets.

For 2017, we have budgeted capital expenditures of US$4.548 billion, including US$1.846 billion for
project execution and US$2.702 billion for sustaining existing operations and replacement projects. A principal
amount of US$1.061 billion of our debt matures in 2017.

We have taken measures to reduce our capital expenditures, and we are constantly evaluating
opportunities for additional cash generation. Also, we continue to consider the sale of certain assets and
investments, and joint ventures for certain of our businesses. Finally, we are committed to continue the
reduction in our costs and expenses to reduce our debt leverage and to maintain discipline in capital
allocation.

Sources of funds

Our principal sources of funds are operating cash flow and borrowings, supplemented by disposition of
assets. The amount of operating cash flow is strongly affected by global prices for our products. In 2016, our
operating activities generated cash flows from continuing operations of US$6.581 billion, compared to
US$4.491 billion in 2015, primarily reflecting the increase in prices of iron ore.

In 2016, we borrowed US$6.919 billion under our new and existing financing agreements. Our major
new borrowing transactions in 2016 are summarized below.

 In January 2016, we drew US$3.0 billion under our existing revolving credit facilities with
syndicates of international banks, which will mature in 2018 and 2020. This amount was fully
repaid in 2016; US$1.0 billion was repaid in June and the outstanding balance of US$2.0 billion
was paid in November.

 In June 2016, our wholly owned subsidiary Vale Overseas Ltd. issued US$1.25 billion notes due
2021, guaranteed by Vale S.A.

 In August 2016, our wholly owned subsidiary Vale Overseas Ltd. issued US$1.0 billion notes due
2026, guaranteed by Vale S.A.

 In December 2016, our wholly owned subsidiary, Vale Canada, received a A200 million loan from
the French State with a repayment schedule starting at the end of 2021 and ending in November
2026. This loan is guaranteed by Vale S.A.

 In 2016, we borrowed US$950 million in pre-export financing agreements with commercial banks.

In 2016, we received US$1.343 billion as a result of divestments and sales of interests in certain joint
ventures and investments. The main divestment transactions in 2016 are described below:

 In August 2016, we received an initial cash payment of US$800 million from Silver Wheaton, as
part of the sale an additional 25% of the gold produced from the Salobo copper mine for the life
of mine. As a result of this transaction, we recorded a deferred liability in the amount of
US$524 million, which will be recognized in our future income statement as the gold is extracted.

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 Liquidity and capital resources

 In August 2016, we received US$269 million from the sale of three very large ore carriers of
400,000 DWT to ICBC International, a wholly owned subsidiary of the Industrial and Commercial
Bank of China. In December 2016, we received US$35 million per vessel from the sale of four
capesize vessels to Polaris Shipping Co. Ltd. In January 2017, we received payment for the other
two vessels.

 In December 2016, we received US$113 million from the sale of our remaining 13.63% indirect
interest in Paragominas to Hydro.

Uses of funds

In the ordinary course of business, our principal funding requirements are for capital expenditures,
dividend payments and debt service.

Capital expenditures

Our capital expenditures in 2016, including the fertilizer business, amounted to US$5.482 billion,
including US$3.179 billion for project execution and US$2.302 billion dedicated to sustaining existing
operations. For more information about the specific projects for which we have budgeted funds, see
Information on the Company—Capital expenditures.

Distributions and repurchases

We paid total dividends of US$250 million in December 2016 (classified as interest on shareholders’
equity). We did not repurchase any of our shares in 2016.

Tax payments

We paid US$388 million in income tax in 2016, excluding the payments in connection with REFIS,
compared to US$544 million in 2015. In connection with our participation in the REFIS, our outstanding
commitment totals US$5.419 billion, which will be paid in 142 monthly installments. In 2016, we paid a total
of US$417 million in connection with the REFIS.

Liability Management

In 2016, we repaid US$5.565 billion in debt that was set to mature in future years. Our main liability
management transactions in the year are summarized below.

 The full repayment of US$3.0 billion dollars drawn in January under our existing revolving credit
facilities. US$1.0 billion was repaid in June 2016 with part of the proceeds of the offering of our
US$1.250 billion notes due 2021, and the remaining balance of US$2.0 billion was paid in
November 2016.

 In September 2016, we fully redeemed the outstanding principal amount of US$1.250 billion of
Vale Overseas’ notes that was set to mature in January 2017.

Debt

As of December 31, 2016, our total outstanding debt was US$29.322 billion (including
US$28.691 billion of principal and US$631 million of accrued interest) compared with US$28.853 billion at
the end of 2015. As of December 31, 2016, US$472 million of our debt was secured by liens on some of our
assets. As of December 31, 2016, the weighted average of the remaining term of our debt was 7.9 years,
compared to 8.1 years in 2015.

As of December 31, 2016, the short-term debt and the current portion of long-term debt was
US$1.660 billion, including charges.

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 Our major categories of long-term indebtedness are described below. The principal amounts given
below include the current portion of long-term debt and exclude accrued charges.

 U.S. dollar-denominated loans and financing (US$7.283 billion as of December 31, 2016). This
category includes export financing lines, loans from export credit agencies, and loans from
commercial banks and multilateral organizations.

 U.S. dollar-denominated fixed rate notes (US$13.083 billion as of December 31, 2016). We have
issued in public offerings several series of fixed-rate debt securities, directly by Vale and through
our finance subsidiary Vale Overseas Limited, guaranteed by Vale, totaling US$12.549 billion. Our
subsidiary Vale Canada has outstanding fixed rate debt in the amount of US$400 million.

 Euro-denominated loans and financing (US$211 million as of December 31, 2016). This category
includes loans from export credit agencies.

 Euro-denominated fixed rate notes (US$1.583 billion as of December 31, 2016).We have issued in
public offerings two series of fixed-rate debt securities denominated in Euro in the aggregate
amount of A1.500 billion.

 Other debt (US$6.531 billion as of December 31, 2016). We have outstanding debt, principally owed
to BNDES, Brazilian commercial banks and infrastructure debentures, denominated in Brazilian
reais and other currencies.

We have a variety of credit lines available, including the following, as of December 31, 2016:

 Credit lines with BNDES in the amount of R$7.3 billion (US$2.2 billion) to finance our
investment program. As of December 31, 2016, the total amount available under these facilities
was R$283 million, or US$88 million.

 A R$3.9 billion (US$1.2 billion) financing agreement with BNDES to finance part of the
implementation of the CLN 150 Mtpy project, which will expand the logistics infrastructure in
Vale’s Northern System. As of December 31, 2016, this facility was almost fully drawn.

 A R$6.2 billion (US$1.9 billion) financing agreement with BNDES to finance part of the
implementation of the S11D project and its infrastructure (CLN S11D). As of December 31,
2016, the total amount available under this facility was R$2.1 billion (US$629 million).

 We have two revolving credit facilities with syndicates of international banks, which will mature in
2018 and 2020. As of December 31, 2016, the total amount available under these facilities was
US$5.0 billion, which can be drawn by Vale, Vale Canada and Vale International. In January
2016, we drew US$3.0 billion under these facilities. In November 2016, we repaid the outstanding
balance drawn under these facilities.

Some of our long-term debt instruments contain financial covenants. In particular, instruments
representing approximately 21% of the aggregate principal amount of our total debt require that we maintain,
as of the end of each quarter, (a) a consolidated ratio of total debt to adjusted EBITDA for the past
12 months not exceeding 4.5 to one and (b) a consolidated interest coverage ratio of at least 2.0 to one.
These covenants appear in our financing agreements with BNDES, with other export and development
agencies, and with some other lenders. During the last quarter of 2015, we agreed with lenders under these
agreements to amend the leverage ratio to require a ratio of 5.5 to one through the end of 2016 in order to
give us flexibility to finalize our investment cycle. As of December 31, 2016, (i) our consolidated ratio of total
debt to adjusted EBITDA for the past 12 months was 2.4 to one and (ii) our consolidated interest coverage
ratio was 6.9 to one.

As of December 31, 2016, the corporate guarantees we provided (corresponding to our direct or
indirect interest) for the companies Norte Energia S.A. and Companhia Siderúrgica do Pecém S.A. totaled
US$361 million and US$1.450 billion, respectively.

102
 CONTRACTUAL OBLIGATIONS

The following table summarizes our contractual obligations as of December 31, 2016. This table
excludes other common non-contractual obligations that we may have, including pension obligations, deferred
tax liabilities and contingent obligations arising from uncertain tax positions, all of which are discussed in the
notes to our consolidated financial statements.

Payments due by period

Less than
Total 1 year 2018 2019 2020 Thereafter
(US$ million)
Debt less accrued interest . . . . . . . . . . . . . 28,691 1,061 3,824 3,449 3,857 16,500
Interest payments(1) . . . . . . . . . . . . . . . . 13,635 1,583 1,369 1,211 1,010 8,462
Operating lease obligations(2) . . . . . . . . . . . 1,029 149 134 131 130 485
Purchase obligations(3) . . . . . . . . . . . . . . . 4,388 2,572 363 186 140 1,127
Total . . . . . . . . . . . . . . . . . . . . . . . . US$47,743 US$5,365 US$5,690 US$4,977 US$5,137 US$26,574

(1) Consists of estimated future payments of interest on our loans, financings and debentures, calculated based on interest rates and
foreign exchange rates applicable as of December 31, 2016 and assuming that (i) all amortization payments and payments at maturity
on our loans, financings and debentures will be made on their scheduled payments dates, and (ii) our perpetual bonds are redeemed on
the first permitted redemption date. Amounts do not include derivatives transactions.
(2) Amounts include fixed payments related to the operating lease contracts for the pellet plants.
(3) The purchase obligations derive mainly from take or pay contracts, contracts for the acquisition of fuel and the acquisition of raw
materials and services. For more information, see note 32 to our consolidated financial statements.

OFF-BALANCE SHEET ARRANGEMENTS

As of December 31, 2016, we did not have any off-balance sheet arrangements as defined in the
Form 20-F not disclosed in our consolidated financial statements.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

We believe that the following are our critical accounting policies. We consider an accounting policy to
be critical if it is important to our financial condition and results of operations and if it requires significant
judgments and estimates on the part of our management.

Mineral reserves and useful life of mines

We regularly evaluate and update our estimates of proven and probable mineral reserves. Our proven
and probable mineral reserves are determined using generally accepted estimation techniques. Calculating our
reserves requires us to make assumptions about future conditions that are uncertain, including future ore and
metal prices, currency prices, inflation rates, mining technology, availability of permits, production and capital
costs. Changes in some or all of these assumptions could have a significant impact on our recorded proven
and probable reserves.

The estimated volume of mineral reserves is used as basis for the calculation of depletion of the
mineral properties and also for the estimated useful life, which is a major factor to quantify the provision for
asset retirement obligation, environmental recovery of mines and impairment of long lived assets. Any
changes to the estimates of the volume of mine reserves and the useful lives of assets may have a significant
impact on the depreciation, depletion and amortization charges and assessments of impairment.

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Asset retirement obligation

Expenditures relating to ongoing compliance with environmental regulations are charged against
earnings or capitalized as appropriate. These ongoing programs are designed to minimize the environmental
impact of our activities.

We recognize a liability for the fair value of our estimated asset retirement obligations in the period in
which they are incurred, if a reasonable estimate can be made. We consider the accounting estimates related
to reclamation and closure costs to be critical accounting estimates because:

 we will not incur most of these costs for a number of years, requiring us to make estimates over a
long period;

 reclamation and closure laws and regulations could change in the future or circumstances
affecting our operations could change, either of which could result in significant changes to our
current plans;

 calculating the fair value of our asset retirement obligations requires us to assign probabilities to
projected cash flows, to make long-term assumptions about inflation rates, to determine our
credit-adjusted risk-free interest rates and to determine market risk premiums that are
appropriate for our operations; and

 given the significance of these factors in the determination of our estimated environmental and
site reclamation costs, changes in any or all of these estimates could have a material impact on
net income. In particular, given the long periods over which many of these charges are discounted
to present value, changes in our assumptions about credit-adjusted risk-free interest rates could
have a significant impact on the size of our provision.

Our executive officers define the policies and procedures that are used to evaluate our asset
retirement obligations. The future costs of retirement of our mines and processing assets at all our sites are
reviewed annually, in each case considering the actual stage of exhaustion and the projected exhaustion date
of each mine and site. The future estimated retirement costs are discounted to present value using a credit-
adjusted risk-free interest rate.

As of December 31, 2016, we estimated the fair value of our total asset retirement obligations to be
US$2.877 billion.

Impairment of non-current assets and onerous contract

Non-financial assets are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount might not be recoverable. An impairment loss is recognized for the amount
by which the asset’s carrying value exceeds its recoverable amount. The recoverable amount is the higher of
an asset’s fair value less costs of disposal (‘‘FVLCS’’) and value in use (‘‘VIU’’).

FVLCS is generally determined as the present value of the estimated future cash flows expected to
arise from the continued use of the asset, including any expansion prospects, and its eventual disposal. VIU
model is determined as the present value of the estimated future cash flows expected to arise from the
continued use of the asset in its present form. VIU is determined by applying assumptions specific to the
company’s continued use and cannot take into account future development. These assumptions are different
to those used in calculating fair value and consequently the VIU calculation is likely to give a different result
to a FVLCS calculation.

The future cash flows are based on the current life-of-mine plan or long-term production plan for the
cash-generating unit. Assets that have an indefinite useful life and are not subject to amortization, such as
goodwill, are tested annually for impairment.

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 Critical accounting policies and estimates

For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash flows (Cash Generating Units (CGUs)). Goodwill is allocated to Cash Generating
Units or Cash Generating Units groups that are expected to benefit from the business combinations in which
the goodwill arose and are identified in accordance with the operating segment.

Non-current assets (excluding goodwill) in which the company recognized impairment in the past are
reviewed whenever events or changes in circumstances indicate that the impairment may no longer be
applicable. In such cases, an impairment reversal will be recognized.

For onerous contracts, provision is recognized for the present value of certain long-term contracts
where the unavoidable cost of meeting the company’s obligations exceed the economic benefits to be receive
under it.

Fair values of derivatives and other financial instruments

Derivatives transactions that are not qualified for hedge accounting are classified and presented as an
economic hedge, as we use derivative instruments to manage our financial risks as a way of hedging against
these risks. Derivative financial instruments are recognized as assets or liabilities in the balance sheet and are
measured at their fair values. Changes in the fair values of derivatives are recorded in income statement or in
stockholders’ equity when the transaction is eligible for effective hedge accounting.

We use well-known market participants’ valuation methodologies to compute the fair value of
instruments. To evaluate the financial instruments, we use estimates and judgments related to present values,
taking into account market curves, projected interest rates, exchange rates, counterparty (credit) risk
adjustments, forward market prices and their respective volatilities, when applicable. We evaluate the impact
of credit risk on financial instruments and derivative transactions, and we enter into transactions with financial
institutions that we consider to have a high credit quality. The financial institution’s credit risk tracking is
performed making use of a credit risk valuation methodology that considers, among other information,
published ratings provided by international rating agencies and other management judgments.

Deferred income taxes

We recognize deferred tax effects of tax loss carryforwards and temporary differences in our
consolidated financial statements. We record a valuation allowance when we believe that it is probable that
tax assets will not be fully recoverable in the future.

Deferred tax assets arising from tax losses, negative social contribution basis and temporary
differences are registered taking into consideration the analysis of future performance, based on economic
and financial projections, prepared based on internal assumptions and macroeconomic, trade and tax
scenarios that may be subject to changes in future.

When we prepare our consolidated financial statements, the provision for income tax is calculated
individually for each entity in the group based on Brazilian tax rates, on an accrual basis, by applying the
differential between the nominal local tax rates (based on rules in force in the location of the entity) and the
Brazilian rate.

Determining our provision for income taxes, our deferred tax assets and liabilities and any valuation
allowance to be recorded against our net deferred tax assets requires significant management judgment,
estimates and assumptions about matters that are highly uncertain. For each income tax asset, we evaluate the
likelihood of whether some portion or the entire asset will not be realized. The valuation allowance made in
relation to accumulated tax loss carryforwards depends on our assessment of the probability of generation of
future taxable profits within the legal entity in which the related deferred tax asset is recorded, based on our
production and sales plans, commodity prices, operating costs, environmental costs, group restructuring plans
for subsidiaries and site reclamation costs and planned capital costs.

105
Litigation

We disclose material contingent liabilities unless the possibility of any loss arising is considered
remote, and we disclose material contingent assets where the inflow of economic benefits is probable. We
discuss our material contingencies in Note 28 to our consolidated financial statements.

We record an estimated loss from a loss contingency when information available prior to the issuance
of our financial statements indicates that it is probable that an outflow of resources will be required to settle
an obligation, and the amount of the loss can be reasonably estimated. In particular, given the nature of
Brazilian tax legislation, the assessment of potential tax liabilities requires significant management judgment.
By their nature, contingencies will only be resolved when one or more future events occurs or fails to occur,
and typically those events will occur a number of years in the future. Assessing such liabilities, particularly in
the Brazilian legal environment, inherently involves the exercise of significant management judgment and
estimates of the outcome of future events.

The provision for litigation as of December 31, 2016, totaling US$839 million, consists of provisions of
US$534 million for labor, US$84 million for civil, US$214 million for tax and US$7 million for environmental
claims. Claims for which the likelihood of loss, in our opinion and based on the advice of our legal counsel, is
reasonably possible but not probable, and for which we have not made provisions, amounted to a total of
US$13.427 billion as of December 31, 2016, including claims of US$2.418 billion for labor claims,
US$1.502 billion for civil claims, US$7.636 billion for tax claims and US$1.871 billion for environmental
claims.

Employee post-retirement benefits

We sponsor defined benefit pension and other post-retirement benefit plans covering some of our
employees. The determination of the amount of our obligations for these benefits depends on certain
actuarial assumptions. These assumptions are described in Note 29 to our consolidated financial statements
and include, among others, the discount rate, the expected long-term rate of return on plan assets and
increases in salaries.

Provision related to the dam failure of Samarco Mineração S.A.

The provision requires the use of assumptions that may be mainly affected by: (i) changes in scope of
work required under the Framework Agreement as result of further technical analysis, (ii) uncertainty
regarding the timing of resumption of Samarco’s operations; (iii) updates in the discount rate; and
(iv) resolution of existing and potential legal claims. As a result, future expenditures may differ from the
amounts currently provided and changes to key assumptions could result in a material impact to the amount
of the provision in future reporting periods.

106
 RISK MANAGEMENT

The aim of our risk management strategy is to promote enterprise-wide risk management that
supports the achievement of our objectives, financial strength and flexibility and business continuity.

We developed an integrated framework for managing risk, which considers the impact on our business
of not only market risk factors (market risk), but also risks arising from third-party obligations (credit risk),
risks associated with inadequate or failed internal processes, people, systems or external events (operational
risk) and risks associated with political and regulatory conditions in countries in which we operate (political
risk), among others.

In order to achieve this objective and to further improve our corporate governance practices, our
Board of Directors has established a company-wide risk management policy and an Executive Risk
Management Committee. The risk management policy requires that we regularly evaluate and monitor the
corporate risks on a consolidated basis in order to guarantee that our overall risk level remains in accordance
with our strategic guidelines.

See note 22 to our consolidated financial statements for quantitative information about risks relating
to financial instruments, including financial instruments entered into pursuant to our risk management
policies.

Market risk

We are exposed to various market risk factors that can impact our cash flow. An assessment of the
potential impact of the consolidated market risk exposure is performed periodically to support the decision
making process regarding the risk management strategy, which may incorporate financial instruments,
including derivatives. The financial instrument portfolio is monitored on a monthly basis, enabling us to
properly evaluate financial results and their impact on cash flow, and ensure correlation between the
strategies implemented and the proposed objectives.

Considering the nature of our business and operations, the main market risk factors that we are
exposed to are:

 Foreign exchange rates and interest rates: our cash flows are exposed to the volatility of several
currencies against the U.S. dollar and of interest rate on loans and financings. While most of our
product prices are indexed to U.S. dollars, most of our costs, disbursements and investments are
indexed to currencies other than the U.S. dollar, principally the Brazilian real and the Canadian
dollar. We may use derivative instruments in order to reduce our potential cash flow volatility
arising from this currency mismatch. We also have debt instruments denominated in currencies
other than U.S. dollars, mainly in Brazilian reais and euros. We use swaps and forward
transactions to convert into U.S. dollars a portion of the cash outflows from most of these debt
instruments.

Our floating rate debt consists mainly of loans including export pre-payments, commercial bank
loans and multilateral organization loans. In general, the U.S. dollar floating rate debt is subject
to changes to LIBOR (London Interbank Offer Rate) in U.S. dollars. We take advantage of the
potential correlation between commodity prices and U.S. dollar floating interest rates as a partial
natural hedge for this risk.

 Product prices and input costs: we are also exposed to market risks associated with commodities
price volatilities. In line with our risk management policy, we may also employ risk mitigation
strategies to manage this risk that include predominantly forward transactions, futures contracts
and zero-cost collars.

107
Credit risk

We are exposed to credit risk arising from trade receivables, derivative transactions, guarantees, down
payment for suppliers and cash investments. Our credit risk management process provides a framework for
assessing and managing counterparties’ credit risk and for maintaining our risk at an acceptable level.

Commercial credit risk management

We assign an internal credit rating and a credit limit to each counterparty using our own quantitative
methodology for credit risk analysis, which is based on market prices, external credit ratings and financial
information of the counterparty, as well as qualitative information regarding the counterparty’s strategic
position and history of commercial relations.

Based on the counterparty’s credit risk, risk mitigation strategies may be used to manage our credit
risk. The main credit risk mitigation strategies include non-recourse discount of receivables, insurance
instruments, letters of credit, corporate and bank guarantees, mortgages, among others.

From a geographic standpoint, we have a diversified accounts receivable portfolio, with Asia, Europe
and Brazil, the regions with the most significant exposure. According to each region, different guarantees can
be used to enhance the credit quality of the receivables. We monitor the counterparty exposure in the
portfolio periodically and we block additional sales to customers in delinquency.

Treasury credit risk management

To manage the credit exposure arising from cash investments and derivative instruments, credit limits
are approved to each counterparty to which we have credit exposure. We control the portfolio diversification
and monitor different indicators of solvency and liquidity of our different counterparties that were approved
for trading.

Operational risk

Operational risk management is the structured approach we take to manage uncertainty related to
internal and external events. Internal events consist of inadequate or failed internal processes, people and
systems, while external events include natural or third party-caused operational catastrophes, regulatory,
political, economic or social actions taken by governments or other key stakeholders.

We mitigate operational risk with new controls and improvement of existing ones, new mitigation
plans and transfer of risk through insurance. We seek a clear view of the major risks we are exposed to, the
cost-benefit on mitigation plans and the controls in place to closely monitor the impact of operational risks
and to efficiently allocate capital to reduce it.

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III. SHARE OWNERSHIP AND TRADING

MAJOR SHAREHOLDERS

Our corporate capital is currently composed of 3,217,188,402 common shares and 2,027,127,718
preferred shares, including 12 golden shares issued to the Brazilian government. Holders of our preferred
shares and the golden shares are generally entitled to the same voting rights as holders of common shares,
except with respect to the election of members of the Board of Directors, and are entitled to certain
preferential dividends as described below. The 12 golden shares owned by the Brazilian government have veto
powers over certain actions, such as changes to our name, the location of our headquarters and our corporate
purpose as it relates to mining activities.

Valepar is Vale’s controlling shareholder. Valepar is a special-purpose company organized under the
laws of Brazil that was incorporated for the sole purpose of holding an interest in Vale. Valepar does not have
any other business activity. Valepar acquired its controlling stake in Vale from the Brazilian government in
1997 as part of the first stage of Vale’s privatization.

The following table sets forth information regarding ownership of Vale shares by the shareholders we
know beneficially own more than 5% of any class of our outstanding capital stock, and by our directors and
executive officers as a group, as of December 31, 2016.

Common shares owned % of class Preferred shares owned % of class

Valepar(1) . . . . . . . . . . . . . . . 1,716,435,045 53.9% 20,340,000 1.0%
BNDESPAR(2) . . . . . . . . . . . . 206,378,882 6.5% 66,185,272 3.4%
Capital Group
International, Inc.(3) . . . . . . . n/a n/a 202,763,494 10.0%
Capital Research Global
Investors(3) . . . . . . . . . . . . . n/a n/a 220,419,398 10.9%
Directors and executive officers as
a group . . . . . . . . . . . . . . . 9,300 Less than 1.0% 1,645,064 Less than 1.0%

(1) See the tables below for information about Valepar’s shareholders.
(2) BNDESPAR is a wholly-owned subsidiary of BNDES. The figures for BNDESPAR do not include common shares owned by Valepar.
(3) Based on notices provided to the Company pursuant to Brazilian law by Capital Group International, Inc. (CGII) and Capital Research
Global Investors (CRGI) in August 2016. According to the notices, (a) CGII and CRGI are part of the same economic group, (b) the
economic group also includes Capital World Investors (CWI), which together with CRGI is a division of Capital Research and
Management Company, and (c) CWI holds 5,620,000 additional preferred shares, corresponding to 0.28% of Vale’s preferred shares.

The table below sets forth information regarding ownership of Valepar common shares as of
December 31, 2016.

Common shares owned % of class

Valepar shareholders
Litel Participações S.A.(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 637,443,857 49.00
Eletron S.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 380,708 0.03
Bradespar S.A.(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 275,965,821 21.21
Mitsui . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 237,328,059 18.24
BNDESPAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149,787,385 11.51
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,300,905,830 100.00%

(1) Litel also owns 200,864,272 preferred class A shares of Valepar, which represents 71.41% of the preferred class A shares. Litela
Participações S.A. (‘‘Litela’’), an affiliate of Litel, also owns 80,416,931 preferred class A shares of Valepar, which represents 28.59% of
the preferred class A shares.
(2) Bradespar is controlled by a control group consisting of Cidade de Deus—Cia. Comercial Participações, Fundação Bradesco, NCF
Participações S.A. and Nova Cidade de Deus Participações S.A.

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 The table below sets forth information regarding ownership of Litel Participações S.A., one of
Valepar’s shareholders, as of December 31, 2016.

Common shares owned % of class

Litel Participações S.A. shareholders(1)
BB Carteira Ativa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 222,125,498 80.62
Carteira Ativa II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,688,469 11.50
Carteira Ativa III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,115,635 6.94
Singular FIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,583,921 0.94
Caixa de Previdência dos Funcionários do Banco do Brasil . . . . . . . . . . . . . . . . . . . . . 168 0.00
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 658 0.00
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 275,514,349 100.00%

(1) Each of BB Carteira Ativa and Carteira Ativa II is a Brazilian investment fund. BB Carteira Ativa is 100.00% owned by Caixa de
Previdência dos Funcionários do Banco do Brasil (‘‘Previ’’). Carteira Ativa II is 100% owned by Funcef. Carteira Ativa III is 100%
owned by Petros. Singular is 100% owned by Fundo de Investimentos em Cotas de Fundo de Investimento em Ações VRD (‘‘FIC de
FI em Ações VRD’’). FIC de FI em Ações VRD is 100% owned by Fundação Cesp. Each of Previ, Petros, Funcef and Fundação Cesp
is a Brazilian pension fund.

The shareholders of Valepar are party to a shareholders’ agreement dated April 24, 1997, which
expires on May 9, 2017 (the ‘‘existing Valepar shareholders’ agreement’’). A new shareholder’s agreement
among Litel, Litela, Bradespar, Mitsui and BNDESPAR, shareholders of Valepar, dated February 19, 2017
(the ‘‘February 2017 shareholders’ agreement’’), will become effective immediately after expiration of the
existing agreement for a period of six months or until the merger of Valepar into Vale. In addition to
provisions relating to voting rights and rights of first refusal for the acquisition of the controlling shareholders’
shares, which are generally similar to the provisions under the existing shareholder’s agreement of Valepar,
pursuant to the February 2017 shareholders’ agreement, Valepar is expected to make a proposal for eventually
enabling Vale to be listed on BM&FBOVESPA’s Novo Mercado special segment and making Vale a company
without defined control. See —Changes in our shareholding structure and share ownership by controlling
shareholders.

Each of the existing Valepar shareholders’ agreement and the February 2017 shareholders’ agreement:

 grants rights of first refusal on any transfer of Valepar shares and preemptive rights on any new
issue of Valepar shares;

 prohibits the direct acquisition of Vale shares by Valepar’s shareholders unless authorized by the
other shareholders party to the agreement;

 prohibits encumbrances on Valepar shares (other than in connection with financing an acquisition
of Vale shares);

 requires each party generally to retain control of the special purpose company through which it
holds its interest in shares of Valepar, unless the rights of first refusal previously mentioned are
observed;

 allocates seats on Valepar’s and Vale’s boards among representatives of the parties;

 commits the Valepar shareholders to support a Vale dividend policy of distributing 50% of Vale’s
net profit for each fiscal year, unless the Valepar shareholders commit to support a different
dividend policy for a given year;

 provides for the maintenance by Vale of a capital structure that does not exceed specified debt to
equity thresholds;

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 requires the Valepar shareholders to vote their indirectly held Vale shares and to cause their
representatives on Vale’s Board of Directors to vote only in accordance with decisions made at
Valepar meetings held prior to meetings of Vale’s Board of Directors or shareholders; and

 establishes supermajority voting requirements for certain significant actions relating to Valepar
and to Vale.

Pursuant to each of the existing Valepar shareholders’ agreement and the February 2017 shareholders’
agreement, Valepar cannot support any of the actions described below with respect to Vale without the
consent of at least 75% of the holders of Valepar’s common shares:

 any amendment of Vale’s bylaws;

 any increase of Vale’s capital stock by share subscription, creation of a new class of shares,
change in the characteristics of the existing shares or any reduction of Vale’s capital stock;

 any issuance of debentures of Vale, whether or not convertible into shares of Vale, call options
(bônus de subscrição) or any other security of Vale;

 any determination of issuance price for any new shares of capital stock or other security of Vale;

 any amalgamation, spin-off or merger to which Vale is a party, as well as any change to Vale’s
corporate form;

 any dissolution, receivership, bankruptcy or any other voluntary act for financial reorganization or
any suspension thereof;

 the election and removal of members of Vale’s Board of Directors and the election and removal
of members of Vale’s Board of Executive Officers, under the existing shareholders’ agreement, or
the removal of members of Vale’s Board of Directors and election and removal of members of
Vale’s Board of Executive Officers, under the February 2017 shareholders’ agreement;

 the disposition or acquisition by Vale of an equity interest in any company (under the existing
shareholders’ agreement only), and the acquisition of any shares of capital stock of Vale;

 the participation by Vale in a group of companies or in a consortium of any kind;

 the execution by Vale of agreements relating to distribution, investment, sales exportation,

technology transfer, trademark license, patent exploration, license to use and leases;

 the approval and amendment of Vale’s business plan (under the existing shareholders’ agreement
only);

 the approval of the compensation of members of Vale’s Board of Directors and Board of
Executive Officers, under the existing shareholders’ agreement, and the total compensation of the
members of Vale’s Board of Directors, Board of Executive Officers, Fiscal Council and advisory
committees, under the February 2017 shareholders’ agreement;

 the allocations of profit-sharing among members of Vale’s Board of Directors, Board of Executive
Officers, Fiscal Council and Advisory Committees;

 the determination of duties of the Board of Directors (under the existing shareholders’ agreement
only) and the Board of Executive Officers;

 any change in the corporate purpose of Vale;

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  the distribution or non-distribution of any dividends (including distributions classified as interest
on shareholders’ equity) on any shares of capital stock of Vale, other than pursuant the dividend
policy of distributing 50% of Vale’s net profit for each fiscal year;

 the appointment and replacement of Vale’s independent auditor;

 the creation of any security interests or granting of guarantees by Vale with respect to obligations
of any unrelated party, including any affiliates or subsidiaries;

 any resolution on any matter which, pursuant to applicable law, entitles a shareholder to
withdrawal rights;

 the appointment and replacement by Vale’s Board of Executive Officers of any representative of
Vale in subsidiaries, companies affiliated with Vale or other companies in which Vale is entitled to
appoint directors and officers; and

 any change in the debt to equity threshold, as defined in the shareholders’ agreement (under the
existing shareholders’ agreement only).

The February 2017 shareholders’ agreement adds additional actions to this list, including:

 the acquisition of shares in the capital stock of Vale to be held in treasury, cancelled or
subsequently disposed;

 setting forth Vale’s maximum limit of indebtedness;

 entering into financing agreements by Vale or similar transactions that are not provided for in
Vale’s fundraising plan;

 approval of the strategic guidelines and plan of Vale;

 approval of the annual and pluriannual budgets and of the fundraising plan of Vale;

 approval of investment or disinvestment by Vale;

 approval of the management’s annual report and the financial statements of Vale;

 approval of any related-party transactions policy, and approving the execution or modification of
transactions with a related party;

 disposal by Vale of fixed assets, the value of which, separately or in the aggregate, in a twelve-
month period exceeds one percent of the total assets, based on the most recent Vale quarterly
information; and

 waiver of the right of first refusal of Valepar in case of a capital increase at Vale.

Pursuant to the February 2017 shareholders’ agreement, the disposal of shares of Vale owned by
Valepar is subject to approval of 95% of the common shares subject to the agreement.

Changes in our shareholding structure and share ownership by controlling shareholders

If we successfully implement the changes in our shareholder structure described below, Litel,
Bradespar, Mitsui and BNDESPAR, which are currently shareholders of Valepar, will become shareholders of
Vale and will enter into a new shareholder’s agreement (the ‘‘proposed Vale shareholders’ agreement’’).

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Pursuant to the February 2017 shareholders’ agreement, Valepar is expected to make a proposal to
simplify our shareholding structure and corporate governance, with the purpose of eventually enabling Vale to
be listed on BM&FBOVESPA’s Novo Mercado special segment and making Vale a company without defined
control.

The initial proposal comprises, beyond the performance of all acts and procedures imposed by the
applicable legal provisions and rules, the following indivisible and interdependent steps to simplify our
shareholding structure, which are subject to approval by our executive officers, Board of Directors and
shareholders:

(i) Voluntary conversion of our class A preferred shares into common shares at a fixed exchange
ratio based on the volume-weighted average market prices over the last 30 trading sessions on the
BM&FBOVESPA prior to February 19, 2017. The holders of ADSs representing our class A
preferred shares will be able to elect voluntary conversion into ADSs representing our common
shares on the same terms available to holders of class A preferred shares. Class A preferred
shares, and preferred ADSs, that do not elect voluntary conversion will remain outstanding.

(ii) Amendment of our bylaws so as to adjust them, to the extent possible, to Novo Mercado rules so
we may be effectively listed on such special segment. The key proposed changes to our bylaws are
described below:

 At least 20% of the Board of Directors will be composed of independent directors.

 Any transfer of corporate control will have to provide to all holders of common shares
equal treatment with the transferring controlling shareholder, through a public offer to
acquire common shares.

 No shareholder or group of shareholders will be permitted to hold our common shares in

an amount equal to or greater than 25% of the total amount of common shares issued by
us or of the total capital stock, excluding common shares held in treasury, unless it makes a
public offer to acquire the common shares of the other shareholders.

 Any disputes shall be resolved by arbitration before the BM&FBOVESPA Arbitration

Chamber.

(iii) The merger of Valepar into Vale at an exchange ratio that contemplates a 10% increase in the
number of shares held by the shareholders of Valepar, and represents a dilution of approximately
3% of the shareholding interest held by the other shareholders of Vale.

Pursuant to item (iii) above, Valepar’s shareholders will receive 1.2065 of our common shares for each
Valepar share held by them. As a result, we will issue 173,543,667 new common shares, all registered and
without par value, in favor of Valepar’s shareholders. Consequently, Valepar’s shareholders will own 36.73%
of our outstanding common stock after the merger of Valepar.

The R$3,073 million goodwill balance carried on Valepar’s financial statements and its future use by
Vale will not be subject to capitalization in favor of Valepar’s shareholders, but will be for the benefit of all of
our shareholders. Valepar will hold at the time of the merger enough cash and cash equivalents to fully settle
its liabilities.

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 We cannot predict how long it will take to implement each of these steps or whether they will be
successfully implemented. The implementation of the proposal is subject to the approval of the proposal,
including the merger of Valepar into us, by the executive officers, board of directors and shareholders of Vale
and Valepar, and the acceptance initially by at least 54.09% of class A preferred shares of the voluntary
conversion, as mentioned in item (i) above, within the maximum term of 45 days from the shareholders’
meeting decision on the matter, resulting in a combined shareholding interest held by the shareholders of less
than 50% of our total common shares.

After the simplification of our corporate ownership structure pursuant to the proposal, we will seek to
list our common shares on the Novo Mercado segment of the BM&FBOVESPA. However, such listings are
dependent on a number of factors, over which we have no control, including approvals by our shareholders
and the applicable regulators, and the conversion of all of our preferred shares into common shares.

Proposed Vale shareholders’ agreement

The proposal will also contemplate the execution of a shareholders’ agreement at Vale level on the
date of effectiveness of the merger of Valepar into us, if the merger is approved, by Litel, Bradespar, Mitsui
and BNDESPAR to give us greater stability and to adapt our corporate governance structure during the
period of transition to a new corporate structure without defined control. For six months from the date of
entry into force of the Vale shareholder’s agreement, the controlling shareholders will be under certain
restrictive obligations with respect to trading of our shares. The following are key provisions of the proposed
Vale shareholders’ agreement:

 Term: The proposed shareholders’ agreement of Vale will be effective until November 9, 2020.

 Shares subject to the agreement: The proposed Vale shareholders’ agreement will only apply to a
portion of the common shares of Vale to be owned by the parties thereto, in a total amount of
20% of Vale’s common shares (not including treasury shares).

 Shareholders’ prior meetings: The proposed Vale shareholders’ agreement does not require
meetings thereunder prior to each meeting of the Vale Board of Directors or general
shareholders’ meeting, unless convened any of the parties to the proposed Vale shareholders’
agreement.

 Qualified quorum matters: The proposed Vale shareholders’ agreement requires approval of
shareholders holding at least 75% of the shares subject to the agreement owned by the parties in
attendance for approval of the following matters, among others:

 any amendment of Vale’s bylaws.;

 any increase or reduction of Vale’s capital stock;

 any issuance of debentures of Vale, whether or not convertible into shares of Vale, call
options (bônus de subscrição) or any other security of Vale;

 any amalgamation, spin-off or merger to which Vale is a party, as well as any change to
Vale’s corporate form;

 any dissolution, receivership, bankruptcy or any other voluntary act for financial
reorganization of Vale or the suspension of any of these proceedings;

 the removal of any member of Vale’s Board of Directors, and the election and removal of
any executive officer of Vale;

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 the approval of the aggregate and individual compensation of members of the Board of
Directors, Board of Executive Officers, Fiscal Council and advisory committees;

 creation of companies by Vale, the conversion of currently existing companies into another
types of legal entity, the direct or indirect acquisition or disposition of Vale’s interests in the
capital stock of other companies or entities, including through mergers and spin-offs, as well
as the amendment of the corporate documents of these legal entities, whenever the amount
involved is equal or greater than 1% of Vale’s shareholders’ equity, based on Vale’s most
recent quarterly financial information;

 the distribution or non-distribution of any dividends (including distributions classified as

interest on shareholders’ equity) on any shares of capital stock of Vale other than 50% of the
net income;

 the creation of any security interest or guarantee by Vale to any third parties, including
companies controlled by or affiliated with Vale, except for subsidiaries of which Vale owns at
least 99% of the capital stock;

 the approval of Vale’s maximum limit of indebtedness;

 the approval of Vale’s strategic guidelines and plan, as well as annual and pluriannual
budgets and fundraising plan;

 any investments or divestments by Vale, as well as any investment agreements, in an amount

equal to or greater than 1% of Vale’s shareholders’ equity, based on Vale’s most recent
quarterly financial information;

 the approval of any related-party transactions policy;

 the disposal of fixed assets of Vale in an amount exceeding (a) separately, 0.15% of Vale’s
total assets, or (b) in the aggregate, in a twelve-month period, 0.5% of Vale’s total assets,
based on Vale’s most recent quarterly financial information;

 the cancellation of Vale’s listing or the reduction of Vale’s listing level on the
BM&FBovespa; and

 the appointment and removal by Vale’s Board of Executive Officers of the chief executive
officer in subsidiaries, companies affiliated with Vale or other companies in which Vale is
entitled to appoint the chief executive officer.

 Novo Mercado Listing: The parties to the Vale shareholders’ agreement will undertake to take all
necessary measures to list Vale on the BM&FBOVESPA Novo Mercado as soon as listing is
possible without material risk that any holders of Vale’s class A preferred shares will exercise
their right of withdrawal, based on the market price and book value. The current rules of the
Novo Mercado do not permit the effective listing of Vale as long as the class A preferred shares
remain outstanding.

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 RELATED PARTY TRANSACTIONS

We have a policy on related party transactions, which sets forth rules and principles to ensure
transparency and arm’s-length terms in our transactions with related parties and other situations of potential
conflicts of interest. Pursuant to that policy and our bylaws, our Governance and Sustainability Committee is
responsible for issuing reports about potential conflicts of interest between us and our shareholders or
management and for reviewing the procedure and terms of related party transactions that are submitted to
our Board of Directors for approval. Under the policy, if we identify a conflict of interest with a shareholder,
then that shareholder or its representative may not participate in any discussions related to the transaction at
any shareholders’ meeting and will only have access to publicly available information about the matter. The
policy also prohibits the extension of any loans to related parties other than our subsidiaries and affiliated
companies. For information regarding investments in associate companies and joint ventures and for
information regarding transactions with major related parties, see Notes 15 and 31 of our consolidated
financial statements.

We have engaged, and expect to continue to engage, in arm’s-length transactions with certain entities
controlled by, or affiliated with, our controlling shareholders, including the following:

Bradesco

Bradespar, a controlling shareholder of Valepar, is controlled by a group of entities that also control
Banco Bradesco S.A. (‘‘Bradesco’’). Bradesco and its affiliates are full service financial institutions that have
performed, and may perform in the future, investment banking, advisory or general financing and banking
services for us and our affiliates, from time to time, in the ordinary course of business.

Banco do Brasil

Previ, a pension fund of the employees of Banco do Brasil S.A. (‘‘Banco do Brasil’’), owns 100% of
the investment fund BB Carteira Ativa, which holds the majority of the common equity of Litel
Participações S.A., which holds 49% of the common equity of Valepar. Banco do Brasil appoints three out of
the six members of Previ’s senior management. An affiliate of Banco do Brasil is the manager of BB Carteira
Ativa. Banco do Brasil is also a full service financial institution, and Banco do Brasil and its affiliates have
performed, and may perform in the future, investment banking, advisory or general financing and banking
services for us and our affiliates, from time to time, in the ordinary course of business.

Mitsui

We have commercial relationships in the ordinary course of our business with Mitsui, a large Japanese
conglomerate and a shareholder of Valepar. Mitsui has direct investments in some of our subsidiaries, joint
ventures and associated companies. Mitsui has a minority stake in our subsidiary MVM Resources
International B.V., which controls the Bayóvar (Peru) phosphate operations. Mitsui is also our joint venture
partner at VLI. We have an investment agreement with Mitsui in connection with our coal business in
Mozambique (see Information on the Company—Business overview—Significant changes in our business).

BNDES

BNDES is the Brazilian state-owned development bank and the parent company of one of our major
shareholders, BNDESPAR. Below is a description of our main transactions with BNDES:

We and BNDES are parties to a contract relating to authorizations for mining exploration. This
contract, which we refer to as the Mineral Risk Contract, provides for the joint development of certain
unexplored mineral deposits that form part of our Northern System, except for our iron ore and manganese
ore deposits which were specifically excluded from the contract, as well as proportional participation in any
profits earned from the development of such resources. In 2007, the Mineral Risk Contract was extended
indefinitely, with specific rules for all exploration projects and exploration targets and mineral rights covered
under the contract.

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BNDES has provided us with credit lines of R$7.3 billion (US$2.2 billion) to finance our investment
program, facilities totaling R$985 million (US$302 million) to finance the acquisition of equipment in Brazil,
a R$3.9 billion (US$1.2 billion) financing for our CLN 150 Mtpy project and a R$6.2 billion (US$1.9 billion)
financing for our S11D project and its infrastructure (CLN S11D). For more information on our transactions
with BNDES, see Operating and financial review and prospects—Liquidity and capital resources.

BNDES holds a total of R$1.289 billion (US$396 million), in debentures of our subsidiary Salobo
Metais S.A., with a right to subscribe for Salobo’s preferred shares in exchange for part of the outstanding
debentures, which right expires two years after Salobo reaches an accumulated revenue equivalent to 200,000
tons of copper.

BNDES holds debentures issued by Vale exchangeable into common shares of VLI.

BNDESPAR is in the control group of several Brazilian companies with which we have commercial
relationships in the ordinary course of our business.

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 DISTRIBUTIONS

Our shareholders approved our new dividend policy at the shareholders’ meeting held on April 25,
2016. Distributions may be classified as ‘‘dividends’’ or ‘‘interest on shareholders’ equity,’’ for Brazilian tax
purposes, and references to ‘‘dividends’’ should be understood to cover all distributions, regardless of their
classification, unless otherwise stated. Pursuant to the new dividend policy, our Board of Executive Officers
proposes dividend payments to the Board of Directors, which approves the amount of dividend distributions
based on the context of the company’s business, taking into consideration, among other factors, our debt level
and expected future commitments of cash.

Pursuant to our new dividend policy, dividends will be paid in two installments. The first installment
must be proposed by the Executive Officers and, if approved by the Board of Directors, paid in October of
each year. The second installment must be proposed during the first three months of the subsequent fiscal
year and, if approved by the annual shareholders’ meeting, paid in April. The amount of the first installment
must be determined based on the accumulated results for the year and expected free cash flow for the
remainder of the year. The second installment will be included in the results from the allocation of net
income proposed for the preceding fiscal year. The distribution amount of the first installment is expressed in
U.S. dollars and payment is made in reais upon the conversion of the proposed amount in U.S. dollars to
reais based on the PTAX-Option 5 exchange rate published by the Brazilian Central Bank on the business day
prior to the meeting of our Board of Directors on which payment is approved. The distribution amount of the
second installment is expressed and paid in reais. Our board of executive officers may propose additional
dividend payments to our Board of Directors, based on analysis of our cash flows and the availability of
profits or reserves of profits.

We typically pay the same amount per share on both common and preferred shares. Under Brazilian
law and our bylaws, we are required to distribute to our shareholders an annual amount equal to not less
than 25% of the distributable amount, referred to as the mandatory dividend, unless the Board of Directors
advises our shareholders at our shareholders’ meeting that payment of the mandatory dividend for the
preceding year is inadvisable in light of our financial condition. For a discussion of dividend distribution
provisions under Brazilian corporate law and our bylaws, see Additional information.

The tax regime applicable to distributions to ADR and to non-resident shareholders will depend on
whether those distributions are classified as dividends or as interest on shareholders’ equity. See Additional
information—Taxation—Brazilian tax considerations.

By law, we are required to hold an annual shareholders’ meeting by April 30 of each year at which an
annual dividend may be declared. Additionally, our Board of Directors may declare interim dividends. Under
Brazilian corporate law, dividends are generally required to be paid to the holder of record on a dividend
declaration date within 60 days following the date the dividend was declared, unless a shareholders’ resolution
sets forth another date of payment, which, in either case, must occur prior to the end of the fiscal year in
which the dividend was declared. A shareholder has a three-year period from the dividend payment date to
claim dividends (or payments of interest on shareholders’ equity) in respect of its shares, after which we will
have no liability for such payments.

We make cash distributions on the common shares and preferred shares underlying the ADSs in reais
to the custodian on behalf of the depositary. The custodian then converts such proceeds into U.S. dollars and
transfers such U.S. dollars to be delivered to the depositary for distribution to holders of ADRs net of the
depositary’s fees. For information on taxation of dividend distributions, see Additional information—Taxation—
Brazilian tax considerations.

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 Distributions

The following table sets forth the cash distributions we paid to holders of common shares and
preferred shares for the periods indicated. Amounts have been restated to give effect to stock splits that we
carried out in subsequent periods. Amounts are stated before any applicable withholding tax.

Reais per share U.S. dollars total

Year Payment date Dividends Interest on equity Total U.S. dollars per share(1) (US$ million)(1)
2012 . . . . . . April 30 – 1.08 1.08 0.59 3,000
October 31 0.66 0.53 1.19 0.58 3,000
2013 . . . . . . April 30 0.15 0.71 0.86 0.44 2,250
October 31 0.12 0.82 0.94 0.44 2,250
2014 . . . . . . April 30 – 0.90 0.90 0.41 2,100
October 31 0.34 0.65 0.99 0.41 2,100
2015 . . . . . . April 30 – 0.60 0.60 0.19 1,000
October 31 0.37 – 0.37 0.10 500
2016 . . . . . . December 16 – 0.17 0.17 0.05 250

(1) As approved by the Board of Directors.

TRADING MARKETS

Our publicly traded share capital consists of common shares and preferred shares, each without par
value. Our common shares and our preferred shares are publicly traded in Brazil on the BM&FBOVESPA,
under the ticker symbols VALE3 and VALE5, respectively. Our common shares and preferred shares also
trade on the LATIBEX, under the ticker symbols XVALO and XVALP, respectively. The LATIBEX is a
non-regulated electronic market created in 1999 by the Madrid stock exchange in order to enable trading of
Latin American equity securities.

Our common ADSs, each representing one common share, and our preferred ADSs, each
representing one preferred share, are traded on the New York Stock Exchange (‘‘NYSE’’), under the ticker
symbols VALE and VALE.P, respectively. Our common ADSs and preferred ADSs are traded on Euronext
Paris, under the ticker symbols VALE3 and VALE5, respectively. Citibank N.A. serves as the depositary for
both the common and the preferred ADSs. On March 1, 2017, there were 1,365,783,260 ADSs outstanding,
773,593,512 common ADSs and 592,189,748 preferred ADSs, representing 56.6% of our outstanding common
shares and 43.4% of our outstanding preferred shares, or 26.5% of our total share capital.

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 SHARE PRICE HISTORY

The following table sets forth trading information for our ADSs, as reported by the New York Stock
Exchange and our shares, as reported by the BM&FBOVESPA, for the periods indicated. Share prices in the
table have been adjusted to reflect stock splits.

BM&F BOVESPA (Reais per share) NYSE (US$ per share)

Common share Preferred share Common ADS Preferred ADS
High Low High Low High Low High Low
2012 . . . . . . . . . . . . . . . . . . . . . . . . . 45.87 32.45 53.41 32.12 37.08 15.88 32.50 15.67
2013 . . . . . . . . . . . . . . . . . . . . . . . . . 44.10 28.39 42.60 26.00 21.49 12.63 20.88 11.47
2014
1Q . . . . . . . . . . . . . . . . . . . . . . . . . 35.71 29.26 32.73 25.90 15.25 12.42 14.01 10.93
2Q . . . . . . . . . . . . . . . . . . . . . . . . . 33.34 28.40 30.12 25.47 15.07 12.62 13.61 11.19
3Q . . . . . . . . . . . . . . . . . . . . . . . . . 32.92 26.54 29.36 23.30 14.83 10.87 13.23 9.49
4Q . . . . . . . . . . . . . . . . . . . . . . . . . 28.31 18.69 24.80 16.00 11.80 6.86 10.31 5.89
2015
1Q . . . . . . . . . . . . . . . . . . . . . . . . . 22.84 17.94 20.10 15.45 8.69 5.65 7.63 4.85
2Q . . . . . . . . . . . . . . . . . . . . . . . . . 27.06 17.54 20.30 14.95 8.80 5.58 6.66 4.77
3Q . . . . . . . . . . . . . . . . . . . . . . . . . 19.94 15.35 16.00 12.27 5.90 4.03 5.00 3.21
4Q . . . . . . . . . . . . . . . . . . . . . . . . . 20.79 11.65 16.26 9.32 5.48 3.07 4.31 2.43
2016
1Q . . . . . . . . . . . . . . . . . . . . . . . . . 17.58 8.60 12.78 6.57 4.65 2.15 3.42 1.60
2Q . . . . . . . . . . . . . . . . . . . . . . . . . 21.76 14.02 16.68 11.24 6.07 3.91 4.66 3.02
3Q . . . . . . . . . . . . . . . . . . . . . . . . . 19.12 16.02 16.17 12.78 6.07 4.82 5.05 3.79
4Q . . . . . . . . . . . . . . . . . . . . . . . . . 31.03 17.65 27.84 15.55 9.16 5.45 8.20 4.78
Last six months
October 2016 . . . . . . . . . . . . . . . . . . . 22.14 17.65 20.80 15.55 6.95 5.45 6.58 4.78
November 2016 . . . . . . . . . . . . . . . . . . 31.01 21.61 27.50 20.45 9.10 6.67 8.00 6.30
December 2016 . . . . . . . . . . . . . . . . . . 31.03 25.19 27.84 21.78 9.16 7.62 8.20 6.64
January 2017 . . . . . . . . . . . . . . . . . . . 34.13 25.06 32.38 22.85 10.78 7.62 10.26 6.89
February 2017 . . . . . . . . . . . . . . . . . . 36.43 29.92 34.24 28.60 11.52 9.56 10.87 9.10
March 2017 . . . . . . . . . . . . . . . . . . . . 33.32 29.00 31.87 27.29 10.69 9.30 10.26 8.77

DEPOSITARY SHARES

Citibank N.A. serves as the depositary for our ADSs. ADR holders are required to pay various fees to
the depositary, and the depositary may refuse to provide any service for which a fee is assessed until the
applicable fee has been paid.

ADR holders are required to pay the depositary amounts in respect of expenses incurred by the
depositary or its agents on behalf of ADR holders, including expenses arising from compliance with applicable
law, taxes or other governmental charges, facsimile transmission or conversion of foreign currency into U.S. In
this case, the depositary may decide in its sole discretion to seek payment by either billing holders or by
deducting the fee from one or more cash dividends or other cash distributions. The depositary may recover
any unpaid taxes or other governmental charges owed by an ADR holder by billing such holder, by deducting
the fee from one or more cash dividends or other cash distributions, or by selling underlying shares after
reasonable attempts to notify the holder, with the holder liable for any remaining deficiency.

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 Depositary shares

ADR holders are also required to pay additional fees for certain services provided by the depositary,
as set forth in the table below.

Depositary service Fee payable by ADR holders

Issuance of ADSs upon deposit of shares, excluding issuances as a result of distributions
described in the following item . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Up to US$5.00 or less per 100 ADSs (or
fraction thereof) issued
Distribution of securities other than ADSs or rights to purchase additional ADSs
(i.e., spin-off shares) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Up to US$5.00 or less per 100 ADSs (or
fraction thereof) held
Distribution of cash dividends or other cash distributions (i.e., sale of rights and other
entitlements) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Up to US$5.00 or less per 100 ADSs (or
fraction thereof) held
Distribution of ADSs pursuant to (i) stock dividends or other free stock distributions, or
(ii) exercise of rights to purchase additional ADSs . . . . . . . . . . . . . . . . . . . . . . . Up to US$5.00 or less per 100 ADSs (or
portion thereof) held
Delivery of deposited property against surrender of ADSs . . . . . . . . . . . . . . . . . . . . Up to US$5.00 or less per 100 ADSs (or
portion thereof) surrendered
ADS services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Up to US$5.00 per 100 ADSs (or fraction
thereof) held on the applicable record date(s)
established by the depositary

The depositary may deduct applicable depositary fees and charges from the funds being distributed in
the case of cash distributions. For distributions other than cash, the depositary will invoice the amount of the
applicable depositary fees to the applicable holders.

In June 2016, we terminated our HDR program, and in July 2016 we concluded the delisting of HDRs
from the Hong Kong Stock Exchange.

Additional Charges

The holders, beneficial owners, persons depositing shares and persons surrendering ADSs for
cancellation and for the purpose of withdrawing deposited securities are also subject to the following charges:
(i) taxes (including applicable interest and penalties) and other governmental charges; (ii) registration fees as
may be applicable from time to time; (iii) reimbursement of certain expenses as provided in the deposit
agreement; (iv) the expenses and charges incurred by the depositary in the conversion of foreign currency;
(v) certain fees and expenses incurred by the depositary in connection with compliance with exchange control
regulations and other regulatory requirements; and (v) certain fees and expenses incurred in connection with
the delivery or servicing of deposited shares, as provided for under the deposit agreement.

The depositary reimburses us for certain expenses we incur in connection with the ADR programs and
other expenses, subject to a ceiling agreed between us and the depositary from time to time. These
reimbursable expenses currently include legal and accounting fees, listing fees, investor relations expenses and
fees payable to service providers for the distribution of material to ADR holders. The depositary also agreed
to make an additional reimbursement annually based on the issuance and cancellation fees, dividend fees and
depositary service fees charged by the depositary to our ADS holders. In this context, for the year ended
December 31, 2016, Citibank N.A. reimbursed us US$3.202 million.

PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

Vale did not engage in any share repurchase program during 2016.

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IV. MANAGEMENT AND EMPLOYEES

MANAGEMENT

Board of Directors

Our Board of Directors sets general guidelines and policies for our business and monitors the
implementation of those guidelines and policies by our executive officers. Our bylaws provide for a Board of
Directors consisting of 11 members and 11 alternates, each of whom serves on behalf of a particular director.
All members (and their respective alternates) are elected for the same two-year term at a general
shareholders’ meeting, can be re-elected, and are subject to removal at any time. Our bylaws provide that the
chief executive officer cannot serve as chairman of the Board of Directors.

The Board of Directors holds regularly scheduled meetings on a monthly basis and holds additional
meetings when called by the chairman, vice-chairman or any two directors. Decisions of the Board of
Directors require a quorum of a majority of the directors and are taken by majority vote. Alternate directors
may attend and vote at meetings in the absence of the director for whom the alternate director is acting.

Ten of our 11 current directors (and ten of our 11 alternate directors) were appointed by Valepar.
This includes an additional director appointed by Valepar, because no individual or group of common and
preferred shareholders met the thresholds described under our bylaws and Brazilian corporate law. One
director and his respective alternate are appointed by our employees, pursuant to our bylaws. Non-controlling
shareholders holding common shares representing at least 15% of our voting capital, and preferred shares
representing at least 10% of our total share capital, have the right to appoint one member and an alternate to
our Board of Directors. Our employees and our non-controlling shareholders each have the right, as a class,
to appoint one director and an alternate. The terms of all of our directors and alternate directors will expire
at the Ordinary General Shareholder’s meeting of 2017.

The following table lists the current members of the Board of Directors and each director’s alternate.

Year first Year first

Director(1) elected Alternate director(1) elected
Gueitiro Matsuo Genso (chairman) . . . . . . . . . . . . . . 2015 Gilberto Antonio Vieira . . . . . . . . . . . . . . . 2015
Fernando Jorge Buso Gomes (vice-chairman) . . . . . . . . 2015 Moacir Nachbar Junior . . . . . . . . . . . . . . . . 2015
Oscar Augusto de Camargo Filho . . . . . . . . . . . . . . . 2003 Eduardo de Oliveira Rodrigues Filho . . . . . . . 2011
Dan Antônio Marinho Conrado . . . . . . . . . . . . . . . . 2012 Arthur Prado Silva(8) . . . . . . . . . . . . . . . . . 2015
Marcel Juviniano Barros . . . . . . . . . . . . . . . . . . . . 2012 Francisco Ferreira Alexandre . . . . . . . . . . . . 2013
Alberto Ribeiro Guth(2) . . . . . . . . . . . . . . . . . . . . 2015 Marcelo Gasparino da Silva(9) . . . . . . . . . . . 2016
Lucio Azevedo(3) . . . . . . . . . . . . . . . . . . . . . . . . 2015 Carlos Roberto de Assis Ferreira(3) . . . . . . . . 2015
Eduardo Refinetti Guardia(4) . . . . . . . . . . . . . . . . . 2016 Robson Rocha . . . . . . . . . . . . . . . . . . . . . 2011
Eduardo de Salles Bartolomeo(5) . . . . . . . . . . . . . . . 2016 Marcelo Marcolino(10) . . . . . . . . . . . . . . . . 2016
Motomu Takahashi(6) . . . . . . . . . . . . . . . . . . . . . . 2016 Yoshitomo Nishimitsu . . . . . . . . . . . . . . . . 2015
Denise Pauli Pavarina(7) . . . . . . . . . . . . . . . . . . . . 2017 Luiz Mauricio Leuzinger . . . . . . . . . . . . . . . 2012

(1) Appointed by Valepar and approved at the shareholders’ meeting unless otherwise indicated.
(2) As a result of the resignation of a member, Mr. Alberto Ribeiro Guth was appointed by the Board of Directors as effective Director on
June 25, 2015, and such appointment was ratified by the General Ordinary and Extraordinary Shareholders’ Meeting of April 25, 2016.
(3) Appointed by our employees.
(4) As a result of the resignation of a member, Eduardo Refinetti Guardia was appointed by the Board of Directors as effective Director
on July 27, 2016.
(5) As a result of the resignation of a member, Eduardo de Salles Bartolomeo was appointed by the Board of Directors as effective
Director on September 29, 2016
(6) As a result of the resignation of a member, Motomu Takahashi was appointed by the Board of Directors as effective Director on
April 27, 2016, and such appointment was ratified by the General Extraordinary Shareholders’ Meeting of August 12, 2016.
(7) Denise Pauli Pavarina was appointed by the Board of Directors as effective Director on February 22, 2017.
(8) As a result of the resignation of an alternate member, Mr. Arthur Prado Silva was appointed by the Board of Directors as alternative
member of Mr. Dan Antonio Marinho Conrado on July 29, 2015, and such appointment was ratified by the General Ordinary and
Extraordinary Shareholders’ Meeting of April 25, 2016.
(9) Marcelo Gasparino da Silva was appointed by the Board of Directors as alternate on May 25, 2016, and such appointment was ratified
by the General Extraordinary Shareholders’ Meeting of August 12, 2016.

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 Management

(10) As a result of the resignation of a member, Marcelo Marcolino was appointed by the Board of Directors as alternate Director on
September 29, 2016.

Below is a summary of the business experience, activities and areas of expertise of our current
directors.

Gueitiro Matsuo Genso, 45: Chairman of Vale’s Board of Directors since February 2016 (Member of
Vale’s Board of Directors since March 2015).

Other current director or officer positions: Member of the Strategic Committee of Vale since 2015;
Chief Executive Officer of Valepar since 2015; and Chief Executive Officer of PREVI—Caixa de Previdência
dos Funcionários do Banco do Brasil S.A. since 2015.

Professional experience: Executive Officer of Private Customers of Banco do Brasil S.A. from 2014 to
2015; Member of the Board of Directors of the Brazilian Interbank Payment Chamber from 2014 to 2015;
Member of the Fiscal Council of Grupo Segurador BB Mapfre from 2011 to 2015; Sector Officer of the
Brazilian Bank Federation (Febraban) from 2010 to 2015; Executive Officer of Real Estate Credit of Banco
do Brasil S.A. from 2011 to 2014; Executive Officer of Home Loans of Banco do Brasil S.A. from 2011 to
2014; Executive Officer of Loans of Banco do Brasil S.A. from 2010 to 2011; and Executive Officer of
Products of Banco Nossa Caixa S.A. from 2009 to 2010.

Academic background: Degree in Business Administration from Faculdade SPEI; MBA from
Fundação Getúlio Vargas; and MBA in Agribusiness from Escola Superior de Agricultura Luiz de Queiroz.

Dan Antonio Marinho Conrado, 52: Member of Vale’s Board of Directors since October 2012.

Other current director or officer positions: Chairman of Valepar’s Board of Directors since 2012; and
Alternate Member of the Board of Directors of Mapfre BB SH2 Participações S.A. since 2011.

Professional experience: Chairman of Vale’s Board of Directors from 2012 to 2016; Chief Executive
Officer of Valepar from 2012 to 2015; Member of Vale’s Strategic Committee from 2012 to 2015; Permanent
Participant of Vale’s Strategic Committee from 2015 to 2016; Alternate Member of the Board of Directors of
Petróleo Brasileiro S.A.—Petrobrás and, Member of the Board of Directors of its wholly owned subsidiary,
BR Distribuidora, from July 2015 to November 2015; Member of the Board of Directors of Fras-le S.A. from
2010 to 2013; Member of the Board of Directors of Aliança do Brasil S.A. from 2010 to 2011; and
Vice-President of Retail, Distribution and Operations of Banco do Brasil S.A from 2011 to 2012.

Academic background: Degree in Law from Universidade Dom Bosco; MBA from Universidade
Federal do Rio de Janeiro, COPPEAD; and MBA from Instituto de Ensino e Pesquisa em Administração of
Universidade Federal de Mato Grosso, Inepad.

Marcel Juviniano Barros, 54: Member of Vale’s Board of Directors since October 2012; and Member
of the Executive Development Committee of Vale since February 2013.

Other current director or officer positions: Officer of Securities of PREVI—Caixa de Previdência dos
Funcionários do Banco do Brasil S.A. since 2012; Member of the Board of Directors of Valepar since 2012;
and Member of the Board of PRI—Principles for Responsible Investment of the UN since 2012.

Professional experience: Between 1987 and 2012 held several positions at Banco do Brasil S.A.,
including the position of Union Auditor; and General Secretary of the National Confederation of Financial
Branch Workers, where he coordinated international networks from 2008 to 2011.

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 Academic background: Degree in History from Fundação Municipal de Ensino Superior de Bragança
Paulista.

Eduardo Refinetti Guardia, 51: Member of Vale’s Board of Directors since July 2016.

Other current director or officer positions: Executive Secretary of the Department of the Treasury since
2016; and Chairman of Banco do Brasil S.A.’s Board of Directors since 2016.

Professional experience: Executive Officer of Products of BM&FBOVESPA from 2013 to 2016; and
Executive Officer of Finance and Investor Relations of BM&FBOVESPA from 2010 to 2013.

Academic background: Degree in Economics from Pontı́fica Universidade Católica; Master’s Degree
in Economics from Universidade Estadual de Campinas; and PhD in Economics from Universidade de São
Paulo.

Fernando Jorge Buso Gomes, 60: Vice-Chairman of Vale’s Board of Directors since January 2017
(Member of Vale’s Board of Directors since April 2015); Coordinator of the Governance Sustainability
Committee of Vale since April 2015; and Member of the Financial Committee and the Executive
Development Committee of Vale since April 2015.

Other current director or officer positions: Executive Officer of Valepar since 2015; Member of the
Board of Directors of Valepar since 2015 (and Vice-Chairman of Board of Directors since 2017); Chief
Executive Officer and Investor Relations Executive Officer of Bradespar since 2015; Member of the Board of
Directors of 2b Capital S.A. since 2014; and Executive Officer of Banco Bradesco BBI S.A. since 2006.

Professional experience: Member of the Board of Directors of Sete Brasil S.A. from 2011 to 2015;
Chairman of the Board of Directors of Smartia Corretora de Seguros S.A. from 2012 to 2015; Chairman of
the Board of Directors of SMR Grupo de Investimentos e Participações S.A. from 2014 to 2015; Member of
the Board of Directors of BCPAR S.A. from 2013 to 2015; Member of the Board of Directors of BR
Towers S.A. from 2013 to 2014; Member of the Board of Directors of CPFL Energias Renováveis S.A. from
2011 to 2012; and Member of the Board of Directors of LOG Commercial Properties S.A. from 2013 to 2015.

Academic background: Degree in Economic Sciences from Integrated College Bennett.

Oscar Augusto de Camargo Filho, 79: Member of Vale’s Board of Directors since September 2003;
Member of Vale’s Strategy Committee since March 2006; and Coordinator of Vale’s Executive Development
Committee since November 2003.

Other current director or officer positions: Managing Partner of CWH Consultoria Empresarial, since
2003.

Professional experience: Member of the Board of Directors of Valepar from 2003 to 2014.

Academic background: Degree in Law from Universidade de São Paulo; and Post-graduate Degree in
International Marketing from Cambridge University.

Eduardo de Salles Bartolomeo, 53: Member of Vale’s Board of Directors and Strategic Committee
since September 2016.

Other current director or officer positions: Member of the Board of Directors of Arteris S.A. since
2015; and Member of the Board of Directors of Login Logı́stica Intermodal since 2016.

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 Management

Professional experience: Executive Officer of Vale from 2007 to 2012; Chief Executive Officer of
BHG—Brazilian Hospitality Group from 2013 to 2015; and Member of the Board of Directors of MRS
Logı́stica S.A. from 2007 to 2009.

Academic background: Degree in Metallurgical Engineering from Universidade Federal Fluminense;

MBA from Katholieke Universiteit Leuven; and MBA from Massachusetts Institute of Technology.

Motomu Takahashi, 63: Member of Vale’s Board of Directors since April 2016.

Other current director or officer positions: Representative Director and Executive Vice-president of
Mitsui & Co. Ltd. since 2016.

Professional experience: Executive Vice-President and Chief Operating Officer of the American
business unit of Mitsui & Co. Ltd. from 2015 to 2016; Senior Executive Managing Officer and Chief
Operating Officer of the American business unit of Mitsui & Co. Ltd. from 2014 to 2015; and Executive
Managing Officer and Chief Operating Officer of iron and steel products business unit of Mitsui & Co. Ltd
from 2011 to 2014.

Academic background: Degree in Economics from Tokyo University; and Advanced Management
Program from Harvard Business School.

Alberto Ribeiro Guth, 57: Member of Vale’s Board of Directors since June 2015.

Other current director or officer positions: Managing Partner of Angra Partners Gestão de
Recursos Ltda. since 2003; Director of Angra Infraestrutura Gestão de Informações Ltda. since 2006;
Managing Partner of Angra Partners Participações Ltda. since 2010; Managing Partner of Angra Partners
Assessoria Financeira Ltda. since 2010; Member of the Board of Directors of TG Participações S.A. since
2008; Member of the Board of Directors of Via Varejo S.A. since 2012; Member of the Board of Directors of
Centrais Elétricas de Santa Catarina S.A.—CELESC since 2015; Executive Officer of Futuretel S.A. since
2012; Executive Officer of Zain Participações S.A. since 2012; Executive Officer of Sul 116 Participações S.A.
since 2012; Executive Officer of Newtel Participações S.A. since 2012; Executive Officer of Invitel Legacy S.A.
since 2012; Member of the Board of Directors of Estre Ambiental S.A. since 2014; Director of Aconcágua
Investimentos e Participações Ltda. since 2013; Member of the Board of Directors of Geradora Aluguel de
Máquinas S.A. since 2013; Director of Neustift Participações Ltda. since 2014; and Member of the Board of
Directors of Rio Barigui Participações S.A. since 2012; and Member of the Board of Directors of Capinauá
Participações S.A. since 2007.

Professional experience: Managing Partner of Angra Partners Participações Ltda. from 2010 to 2014,
and of Angra Partners Assessoria Financeira Ltda. from 2010 to 2015; Member of the Board of Directors of
Ediouro Participações S.A. from 2013 to 2014; Member of the Board of Directors of Companhia Providência
Indústria e Comércio S.A. from 2013 to 2014; and Executive Officer of Daleth Participações S.A. from 2012
to 2015.

Academic background: Degree in Engineering from Instituto Militar de Engenharia; and MBA in
Finance from Wharton Business School.

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 Denise Pauli Pavarina, 53: Member of Vale’s Board of Directors since February 2017

Other current director or officer positions: Member of the Board of Directors of Valepar since 2017;
Member of the Conduct and Ethics Committee of Banco Bradesco S.A. since 2016; Member of the IT
Committee of BM&FBOVESPA S.A.—Bolsa de Valores, Mercadorias e Futuro since 2016; Member of the
Board of Directors of BM&FBOVESPA S.A.—Bolsa de Valores, Mercadorias e Futuro since 2015; Member
of the Advisory Committee for Intermediation Sector of BM&FBOVESPA S.A.—Bolsa de Valores,
Mercadorias e Futuro since 2015; Managing Director of BRAM—Bradesco Asset Management S.A. since
2012; Member of the Management Board of Fundação Bradesco since 2009; Member of the Board of
Directors of Fundação Instituto de Moléstias do Aparelho Digestivo e da Nutrição since 2012; Member of the
Board of Directors (representing ANBIMA) of Instituto BRAIN—Brasil Investimentos & Negócios since
2012; Managing Director of Kirton Bank S.A. and Kirton Gestão de Recursos Ltda. since 2016; Member of
the Investment Committee of NEO Capital Mezanino Fundo de Investimentos em Participações since 2010;
and Vice-Chairman of the Board of Directors of 2bCapital S.A. since 2014.

Professional experience: Adjunct Executive Officer of Banco Bradesco S.A. from 2012 to 2015;
Managing Executive Officer of Banco Bradesco S.A. from 2015 to 2017; Member of the Management Board
of Fundação Bradesco from 2001 to 2007; President of Associação Brasileira das Entidades dos Mercados
Financeiros e de Capitais—ANBIMA from 2012 to 2016; Superintendent Director of BRAM—Bradesco Asset
Management S.A. from 2009 to 2012; Member of the Representatives Council (representing ANBIMA) of
Confederação Nacional das Instituições Financeiras—CNF from 2012 to 2016; Member of the Consulting
Board of Instituto BRAIN—Brasil Investimentos & Negócios from 2012 to 2014; Member of the Strategic
Committee (representing ANBIMA) of Instituto BRAIN—Brasil Investimentos & Negócios from 2012 to
2013; and Member of the Board of Directors of 2bCapital S.A. from 2010 to 2014.

Academic background: Degree in Economic Sciences from Faculdade Armando Álvares Penteado;
Law Degree from Universidade Paulista; and MBA from Institute de Ensino e Pesquisa.

Lucio Azevedo, 58: Member of Vale’s Board of Directors since April 2015.

Professional experience: Chairman of Railway Labor Unions in the Brazilian states of Maranhão, Pará
and Tocantins since 2013.

Academic background: Incomplete secondary education.

Technical and advisory committees to the Board of Directors

Our bylaws provide for the following technical and advisory committees to the Board of Directors:

Executive Development Committee, which is responsible for (i) reporting on general human resources
policies as submitted by the executive officers to the Board of Directors, (ii) analyzing and issuing reports to
the Board of Directors on proposals relating to the annual, global budget for the remuneration of
administrators and members of the executive officers, (iii) proposing and updating methodologies and goals
for evaluating the performance of our executive officers, and (iv) monitoring the development of the executive
officer succession plan.

The Strategy Committee, which is responsible for reviewing and making recommendations to the Board
of Directors concerning (i) the strategic guidelines and plan submitted annually to the Board of Directors by
our executive officers, (ii) investment or divestiture opportunities submitted by executive officers and
(iii) mergers and acquisitions and other reorganizations.

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 Management

The Finance Committee, which is responsible for (i) reviewing and making recommendations to the
Board of Directors concerning our corporate risks and financial policies and the internal financial control
systems, compatibility between the level of distributions to shareholders and the parameters established in the
annual budget and the consistency between our general dividend policy and capital structure, (ii) evaluating
our annual budget and investment plan as well as our annual funding plan and risk exposure limits ,
(iii) evaluating our risk management procedures and (iv) monitoring the execution of our capital expenditure
projects and ongoing budget.

The Accounting Committee, which is responsible for (i) issuing reports on the Company’s annual
auditing plan and policies, (ii) tracking and evaluating the Company’s internal auditing results and procedures
with respect to best practices, as requested by the Board of Directors, and (iii) assisting the Board of
Directors, as requested, in appointing and evaluating the annual performance of the designated employee
responsible for overseeing the Company’s internal auditing procedures.

The Governance and Sustainability Committee, which is responsible for (i) evaluating and
recommending improvements to the effectiveness of our corporate governance practices and the functioning
of our Board of Directors, (ii) recommending improvements to the Code of Ethics and Conduct and our
management system in order to avoid conflicts of interests between Vale and its shareholders or management,
(iii) evaluating related party transactions submitted to our Board of Directors and issuing reports on potential
conflicts of interest involving related parties, according to the policy on Related Party Transactions,
(iv) evaluating proposals for revision of policies that are not attributed to other committees pursuant to the
bylaws or the internal rules or other committees, (v) evaluating proposals for modifying, analyzing and
recommending improvements to our sustainability report, (vi) evaluating Vale’s performance with respect to
sustainability and recommending improvements based on our long-term strategic vision, (vii) assisting our
Board of Directors, as requested, in appointing and evaluating the annual performance of our ombudsman
(person in charge of receiving reports of violation of our Code of Ethics and Conduct), (viii) assisting the
Board of Directors, as requested, in evaluating our ombudsman in respect of matters involving the
ombudsman channel and violations of the Code of Ethics and Conduct.

Executive officers

The executive officers are responsible for day-to-day operations and the implementation of the general
policies and guidelines set forth by our Board of Directors. Our bylaws provide for a minimum of six and a
maximum of 11 executive officers. The executive officers hold weekly meetings and hold additional meetings
when called by any executive officer. Under Brazilian corporate law, executive officers must be Brazilian
residents.

The Board of Directors appoints executive officers for two-year terms and may remove them at any
time. The following table lists our current executive officers.

Year of
Officer appointment Position Age
Murilo Pinto de Oliveira Ferreira(1) 2011 Chief Executive Officer 63
Luciano Siani Pires . . . . . . . . . . 2012 Chief Financial Officer and Executive Officer for Investor Relations 47
Gerd Peter Poppinga(2) . . . . . . . . 2014 Executive Officer (Ferrous Minerals) 57
Jennifer Anne Maki . . . . . . . . . . 2015 Executive Officer (Base Metals) 46
Humberto Ramos de Freitas . . . . . 2011 Executive Officer (Logistics and Mineral Research) 63
Roger Allan Downey . . . . . . . . . 2012 Executive Officer (Fertilizer, Coal and Strategy) 49
Clovis Torres Junior . . . . . . . . . . 2016 Executive Officer (Human Resources, Sustainability, Compliance and 49
General Counsel)

(1) Murilo Pinto de Oliveira Ferreira will not renew his term ending in May 2017. On March 27, 2017, Vale announced the appointment of
Fabio Schvartsman as its new Chief Executive Officer. A summary of Mr. Schvartsman’s business experience and areas of expertise is
provided below.
(2) Gerd Peter Poppinga was Executive Officer for Base Metals Operations and Information Technology of Vale from November 2011 to
November 2014.

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 Below is a summary of the business experience, activities and areas of expertise of our current
executive officers.

Murilo Pinto de Oliveira Ferreira, 63: Chief Executive Officer of Vale and Participant of Vale’s
Strategy and Disclosure Committees since May 2011.

Professional experience: Executive Officer of Vale with responsibility over several different
departments from 2005 to 2008, including business development, M&A, steel, energy, nickel and base metals;
Chief executive officer of Vale Canada from 2007 to 2008 and member of its board of directors from 2006 to
2007; Chairman of the board of directors of Petrobras from May to November 2015, Alunorte from 2005 to
2008, MRN from 2006 to 2008 and Valesul Alumı́no S.A. (‘‘Valesul’’), a subsidiary of Vale involved in the
production of aluminum, from 2006 to 2008; Member of the board of commissioners of PTVI, from 2007 to
2008. Mr. Ferreira has been a member of the board of directors of several companies, including Usiminas, a
Brazilian steel company, from 2006 to 2008, and was a partner at Studio Investimentos, an asset management
firm with a focus on the Brazilian stock market, from October 2009 to March 2011.

Academic background: Degree in business administration from Fundação Getúlio Vargas in São
Paulo; post-graduate degree in business administration and finance from Fundação Getúlio Vargas in Rio de
Janeiro; senior executive education program at the IMD Business School in Lausanne, Switzerland.

Luciano Siani Pires, 47: Chief Financial Officer and Executive Officer for Investor Relations of Vale
since August 2012 and Member of Vale’s Executive Risk Management and Disclosure Committees since
August 2012.

Professional experience: Alternate Member of the Board of Directors of Vale, from 2005 to 2007;
Global Officer of Strategic Planning, from 2008 to 2009 and in 2011, and Global Officer of Human
Resources, from 2009 to 2011 of Vale; Member of the board of directors of Valepar, from 2007 to 2008;
Member of the board of directors of Telemar Participações S.A., from 2005 to 2008; Member of the board of
directors of Suzano Papel e Celulose S.A., from 2005 to 2008; Several executive positions at BNDES,
including executive secretary and chief of staff of the presidency, head of capital markets and head of export
finance, from 1992 to 2008; Consultant at McKinsey & Company from 2003 to 2005.

Academic background: Degree in mechanical engineering from Pontifı́cia Universidade Católica do

Rio de Janeiro; MBA in finance from the Stern School of Business, New York University.

Gerd Peter Poppinga, 57: Executive Officer for Ferrous Minerals of Vale since November 2014.

Other current director or officer positions: Member of the Board of Directors of Vale International
since June 2015.

Professional experience: Executive Officer for Base Metals Operations and Information Technology of
Vale from November 2011 to November 2014; Executive vice president for Asia Pacific of Vale Canada from
November 2009 to November 2011; Director for strategy, business development, human resources and
sustainability of Vale Canada from May 2008 to October 2009; Director for strategy and information
technology of Vale Canada from November 2007 to April 2008. In connection with his roles at Vale,
Mr. Poppinga was also member of the board of directors and the executive board of several companies from
2005 to 2010. From 1985 until 1999, Mr. Poppinga also held several positions at Mineração da
Trinidade S.A.—SAMITRI, a publicly held mining company that was acquired by Vale in 2001.

Academic Background: Degree in geology from Universität Clausthal—Zellerfeld, Germany;

Participated in geostatistics extension course at Universidade Federal de Ouro Preto (UFOP); participated in
the executive MBA from Fundação Dom Cabral; negotiation dynamics at INSEAD; Senior leadership
program at M.I.T.; Leadership program at IMD Business School, Lausanne, Switzerland; and strategic
megatrends with Asia Focus program at Kellogg Singapore.

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 Management

Jennifer Anne Maki, 46: Executive Officer for Base Metals of Vale since November 2015.

Other current director or officer positions: President commissioner of PTVI; Member of the board of
directors of Vale New Caledonia and Vale’s Global Pension Committee; Chairwoman and member of the
Canadian pension committee since 2009 and 2007, respectively.

Professional experience: Chief financial officer of Vale Canada from 2007 to 2013, prior to which
Ms. Maki held positions in the base metals treasury and controllership areas. From 1993 to 2003, she worked
at PricewaterhouseCoopers LLP in roles of increasing responsibility.

Academic background: Degree in business from Queens University; post-graduate degree in

accounting from the Institute of Chartered Accountants of Ontario.

Humberto Ramos de Freitas, 63: Executive Officer for Logistics and Mineral Research of Vale since
November 2011.

Other current director or officer positions: Chairman of the board of the Brazilian Association of Port
Terminals since May 2009.

Professional experience: Member of the board of directors of MRS from December 2010 to October
2012; Logistics Operations Officer of Vale from September 2009 to June 2010; Director for Ports and
Navigation of Vale from March 2007 to August 2009; Chief executive officer of Valesul from August 2003 to
February 2007; General superintendent of ports of CSN from December 1997 to November 1999.

Academic background: Degree in metallurgical engineering from the Escola de Minas de Ouro Preto;
Executive development program at the Kellogg School of Management at Northwestern University; Advanced
management and business development partnership programs from Fundação Dom Cabral/INSEAD; Senior
executive program at MIT; Strategic business planning from McKinsey Consulting; Management training
course from the Association of Overseas Technical Scholarship in Tokyo, Japan.

Roger Allan Downey, 49: Executive Officer for Fertilizer, Coal and Strategy of Vale (Executive Officer
for Fertilizer and Coal since May 2012 and for Strategy since 2015).

Professional experience: Managing partner of CWH Consultoria Empresarial SC Ltda., a

privately-held consulting company, from January 2012 to April 2012; Alternate member of the board of
directors of Valepar from February 2012 to April 2012; Chief executive officer of MMX Mineração e
Metálicos S.A., a publicly-held mining company, from August 2009 to November 2011; Director of equity
research of Banco de Investimentos Credit Suisse (Brasil) S.A., a privately-held brokerage and investment
bank, from August 2005 to August 2009; Strategic Marketing Manager for Iron Ore at Vale from 2002 to
2005; Commercial and new business manager of Rio Tinto, a publicly-held mining company, from October
1996 to September 2002; Market coordinator of CAEMI from December 1991 to October 1996.

Academic background: Graduate certificate of management and MBA from the University of Western
Australia; Graduate diploma in business administration from the Australian National Business School.

Clovis Torres Junior, 49: Executive Officer for Human Resources, Sustainability, Compliance and
General Counsel of Vale since August 2016.

Other current director or officer positions: Chairman of the Managing Council of the Brazilian Mining
Institute (IBRAM); Vice President of the National Iron and Base Metals Mining Trade Association
(SINFERBASE); Member of the Corporate Law Commission of the Brazilian Bar Association (OAB);
Member of the Board of Trustees of Fundação Getulio Vargas; Member of the Economics Council of the Rio
de Janeiro State Federation of Industry (FIRJAN).

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 Professional experience: General Counsel and Chief Compliance Officer of Vale, from July 2011 to
July 2016; Executive Vice President of Bahia Mineração Ltda., from September 2007 to July 2011; Director of
the Corporate Legal Department of Vale, from May 2003 to September 2007; Partner in the law firm
Machado, Meyer, Sendaz & Opice Advogados, from December 2000 to May 2003; Senior Lawyer at the
International Finance Corporation in the United States, from January 1997 to December 2000; Senior Lawyer
at Cargill Agrı́cola S.A., from August 1995 to January 1997; Senior Lawyer at Clyde & Co International Law
Firm, in Brazil and England, from June 1993 to July 1995. From May 2015 to November 2015, Clovis chaired
the Board of Directors of Petrobras Distribuidora S.A. and served on the Board of Directors of
Petrobras S.A.

Academic background: Bachelor Degree in Law from the Catholic University of Salvador and a
Master in International Law, Trade and Finance from Tulane Law School, Louisiana, United States; Executive
MBA degree from Fundação Getulio Vargas in São Paulo; and several courses on management, leadership,
corporate finance and mergers and acquisitions at the Massachusetts Institute of Technology, Harvard
University, the International Institute for Management Development (IMD), and INSEAD.

On March 27, 2017, Vale announced the appointment of Fabio Schvartsman, 63, as its new Chief
Executive Officer starting in late May 2017. Mr. Schvartsman has graduate and post-graduate degrees in
production engineering from the University of São Paulo and a post-graduate degree in Business
Administration from Fundação Getúlio Vargas. He worked for 10 years at Duratex and for 22 years at the
Ultra Group, which he left in 2007 as the Ultrapar Holding CFO and managing partner of Ultra S.A.
Mr. Schvartsman was CEO of Telemar Participações and of San Antonio International and has been Klabin’s
CEO since 2011.

Conflicts of interest

Under Brazilian corporate law, if a director or an executive officer has a conflict of interest with the
company in connection with any proposed transaction, such director or executive officer may not vote in any
decision of the board of directors or of the board of executive officers regarding such transaction and must
disclose the nature and extent of the conflicting interest for transcription in the minutes of the meeting.
Under our Policy on Related Party Transactions, any director or executive officer who has a conflict of
interest cannot receive any relevant documentation or information and may not participate in any related
discussions. None of our directors or executive officers can transact any business with us, except on
reasonable or fair terms and conditions that are identical to the terms and conditions prevailing in the market
or offered by unrelated parties. For more details about our Policy on Related Party Transactions see Share
ownership and trading—Related party transactions.

Fiscal Council

We have a fiscal council established in accordance with Brazilian law. The primary responsibilities of the
fiscal council under Brazilian corporate law are to monitor management’s activities, review the Company’s
financial statements, and report its findings to the shareholders. Our management is required to obtain the
Fiscal Council’s pre-approval before engaging independent auditors to provide any audit or permitted non-audit
services to Vale or its consolidated subsidiaries. Our Fiscal Council has pre-approved a detailed list of services
based on detailed proposals from our auditors up to specified monetary limits. The list of pre-approved services
is updated from time to time. Services that are included in this list, or that exceed the specified limits, or that
relate to internal controls must be separately approved by the Fiscal Council. The policy also sets forth a list of
prohibited services. The Fiscal Council is provided with reports on engagement and performance of the services
included in the list on a periodic basis, and it also reviews and monitors the Company’s external auditor’s
independence and objectivity. The Fiscal Council has the power to review and evaluate the performance of the
Company’s external auditors on an annual basis and make a recommendation to the Board of Directors on
whether the Company should remove and replace its existing external auditors. The Fiscal Council may also
recommend withholding the payment of compensation to the independent auditors and has the power to
mediate disagreements between management and the auditors regarding financial reporting.

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 Management

Under our bylaws and internal regulations, our Fiscal Council is also responsible for evaluating the
effectiveness of the procedures for the receipt, retention and treatment of any complaints related to
accounting, controls and audit issues, as well as procedures for the confidential, anonymous submission of
concerns regarding such matters.

Brazilian law requires the members of a fiscal council to meet certain eligibility requirements. A
member of our Fiscal Council cannot (i) hold office as a member of the board of directors, fiscal council or
advisory committee of any company that is a competitor of Vale or otherwise has a conflicting interest with
Vale, unless compliance with this requirement is expressly waived by shareholder vote, (ii) be an employee or
member of senior management or the Board of Directors of Vale or its subsidiaries or affiliates, or (iii) be a
spouse or relative within the third degree by affinity or consanguinity of an officer or director of Vale.

We are subject to Rule 10A-3 under the Exchange Act, which requires, absent an exemption, that a
listed company maintains a standing audit committee composed of members of the Board of Directors that
meet specified requirements. In lieu of establishing an independent audit committee, we have given our Fiscal
Council the necessary powers to qualify for the exemption set forth in Exchange Act Rule 10A-3(c)(3). We
believe our Fiscal Council satisfies the independence and other requirements of Exchange Act Rule 10A-3
that would apply in the absence of our reliance on the exemption.

Our Board of Directors has determined that one of the members of our Fiscal Council, Mr. Anı́bal
Moreira dos Santos, is an audit committee financial expert. In addition, Mr. Moreira dos Santos meets the
applicable independence requirements for Fiscal Council membership under Brazilian law and the NYSE
independence requirements that would apply to audit committee members in the absence of our reliance on
the exemption set forth in Exchange Act Rule 10A-3(c)(3).

Members of the Fiscal Council are elected by our shareholders for one-year terms. The current
members of the Fiscal Council and their respective alternates were elected on April 25, 2016. The terms of
the members of the Fiscal Council expire at the next annual shareholders’ meeting following election.

Two members of our Fiscal Council (and the respective alternates) may be elected by non-controlling
shareholders: one member may be appointed by our preferred shareholders and one member may be
appointed by minority holders of common shares pursuant to applicable CVM rules.

The following table lists the current and alternate members of the Fiscal Council.

Current member Year first elected Alternate Year first elected

Paulo José dos Reis Souza(1) . . . . . . . . . . 2016 Paula Bicudo de Castro Magalhães(1) 2016
Raphael Manhães Martins(2) . . . . . . . . . . 2015 Julio Sergio de Souza Cardoso(2) 2016
Marcelo Amaral Moraes(3) . . . . . . . . . . . 2004 Vacant(4) –
Anı́bal Moreira dos Santos(3) . . . . . . . . . 2005 Oswaldo Mário Pêgo de Amorim Azevedo(3) 2004
Sandro Kohler Marcondes (3) . . . . . . . . . 2016 Sergio Mamede Rosa do Nascimento (3) 2016

(1) Appointed shareholders of preferred shares.

(2) Appointed by minority shareholders of common shares.
(3) Appointed by Valepar.
(4) Vacant since the General Ordinary Shareholders’ meeting of 2014.

Below is a summary of the business experience, activities and areas of expertise of the members of our
Fiscal Council.

Paulo José dos Reis Souza, 54 Member of Vale’s Fiscal Council since April 2016.

Other current director or officer positions: Program Director of the Department of the Treasury since
2016.

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 Professional experience: Subsecretary of Fiscal Policy of the Department of the Treasury from 2015 to
2016; Program Director of the Department of the Treasury from 2011 to 2015; Member of the Fiscal Council
of Petróleo Brasileiro S.A.—Petrobras from 2012 to 2016, and from January 2017 to April 2017; Member of
the Fiscal Council of Banco do Brasil S.A. from 2012 to 2016; Member of the Fiscal Council of BR
Distribuidora from 2008 to 2012; Member of the Fiscal Council of Indústrias Nucleares do Brasil S.A. from
2011 to 2012; and Member of the Fiscal Council of Serviço Federal de Processamento de Dados—SERPRO
from 2015 to 2016.

Academic background: Degree in Business Administration from Centro Universitário UNA;

Specialization in Public Policies and Corporate Governance from Escola Nacional de Administração
Públicas—ENAP; and Master Degree in Public Sector Economy from Fundação Getúlio Vargas.

Raphael Manhães Martins, 34: Member of Vale’s Fiscal Council since April 2015.

Other current director or officer positions: Member of the Board of Directors of Eternit S.A. since
2015; Member of the Fiscal Council of Light S.A. since 2014; and Attorney for Faoro Advogados since 2010.

Professional experience: Alternate Member of the Fiscal Council of Light S.A. from 2012 to 2013;
Member of the Fiscal Council of Embratel Participações S.A. from September 2014 to December 2014.

Academic background: Degree in Law from Universidade Estadual do Rio de Janeiro.

Marcelo Amaral Moraes, 49: Member of Vale’s Fiscal Council since April 2004.

Other current director or officer positions: President of the Fiscal Council of Aceco TI S.A. since 2016;
and Member of the Board of Directors of Eternit S.A. since 2016.

Professional experience: Managing Director of Capital Dynamics Investimentos Ltda. from 2012 to
2015.

Academic background: Degree in Economics from Universidade Federal do Rio de Janeiro; MBA
from Universidade Federal do Rio de Janeiro—COPPEAD; and Post-graduate Degree in Corporate Law and
Arbitration from Fundação Getúlio Vargas.

Anı́bal Moreira dos Santos, 78: Member of Vale’s Fiscal Council since July 2005.

Professional experience: From 1998 until his retirement in 2003, Mr. Moreira dos Santos served as
Executive Officer of several Caemi Mineração e Metalurgia S.A. subsidiaries, including Caemi Canada Inc.,
Caemi Canada Investments Inc., CMM Overseas, Ltd., Caemi International Holdings BV and Caemi
International Investments NV, and as Chief Accounting Officer of Caemi Mineração e Metalurgia S.A. from
1983 to 2003. He also served as Member of the Fiscal Councils of Log-in S.A. from 2009 to 2014.

Academic background: Degree in Accounting from Fundação Getúlio Vargas.

Sandro Kohler Marcondes, 52: Member of Vale’s Fiscal Council since April 2016.

Other current director or officer positions: Chief Financial Officer of Neoenergia S.A. since 2016.

Professional experience: Member of Vale’s Board of Directors from 2007 to 2011; Alternate Member
of the Board of Directors of Valepar from 2009 to 2015; Executive Officer of Banco do Brasil S.A. from 2005
to 2016; Alternate Member of the Board of Directors of Banco Patagônia S.A. from 2011 to 2012; Member of
the Fiscal Council of PREVI—Caixa de Previdência dos Funcionários do Banco do Brasil S.A. from 2012 to
2014; Member of the Embraer S.A. Fiscal Council from 2014 to 2015; Member of the decision-making body
of CASSI—Caixa de Assistência de Funcionários do Branco do Brasil S.A. from 2012 to 2013.

Academic background: Degree in Business Administration from Faculdade de Foz do Iguaçu; and
Master Degree in Business Administration from the Fundação Getúlio Vargas.

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 MANAGEMENT COMPENSATION

Under our bylaws, our shareholders are responsible for establishing the aggregate compensation we
pay to the members of our Board of Directors and our Board of Executive Officers, and the Board of
Directors allocates the compensation among its members and the Board of Executive Officers.

Our shareholders determine this annual aggregate compensation at the general shareholders’ meeting
each year. In order to establish aggregate director and officer compensation, our shareholders usually take
into account various factors, which range from attributes, experience and skills of our directors and executive
officers to the recent performance of our operations. Once aggregate compensation is established, our Board
of Directors is then responsible for distributing such aggregate compensation in compliance with our bylaws
among the directors and executive officers. The Executive Development Committee makes recommendations
to the Board concerning the annual aggregate compensation of the executive officers. In addition to fixed
compensation, our executive officers are also eligible for bonuses and incentive payments.

Executive officers

For the year ended December 31, 2016, the amount paid to the executive officers, including
compensation accrued for the year and payable at a later date, is set forth in the table below.

For the year ended December 31, 2016

(US$ million)
Fixed compensation and in kind benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.27
Variable compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.98
Pension, retirement or similar benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.47
Severance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.66
Social security contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.24
Total paid to the executive officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.61

Fixed compensation and in kind benefits include a base salary in cash, paid on a monthly basis,
reimbursement for certain investments in private pension plans, health care, relocation expenses, life
insurance, driver and car expenses.

Variable compensation consists of (i) an annual cash bonus, based on specific targets for each
executive officer, approved by our Board of Directors, and (ii) payments tied to the performance of our
shares under two programs, the Matching Program and the Performance Shares Units (PSU).

Under our Matching Program, our executive officers are permitted to purchase a certain number of
preferred shares or ADRs in the market within a purchase window through the plan administrator. At the
end of a three-year cycle, participants are entitled to receive a reward equivalent to the same number of
preferred shares of ADRs held through the end of the cycle. Participants may sell or transfers its preferred
shares or ADRs at any time during the vesting period, in which case they forfeit the right to any receive
reward with respect to these preferred shares or ADRs. Participation in our Matching Program is mandatory
for our Board of Executive Officers in the years in which we pay cash bonuses.

Under our PSU program, our executive officers receive payments in cash tied to Vale’s performance,
as compared to a selected group of peer companies, based on the total return (dividend payments and share
appreciation) of the common shares of those companies in a four-year cycle.

Pension, retirement or similar benefits consist of our contribution to Valia, the manager of pension
plans sponsored by Vale. Social security contributions are mandatory contributions we are required to make to
the Brazilian government for our executive officers.

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Board of Directors

In 2016, we paid US$1.5 million in aggregate to the members of our Board of Directors for services in
all capacities, all of which was fixed compensation. There are no pension, retirement or similar benefits for
the members of our Board of Directors. On March 31, 2017, the total number of common shares owned by
our directors and executive officers was 22,764, and the total number of preferred shares owned by our
directors and executive officers was 2,011,050. None of our directors or executive officers beneficially owns
1% or more of any class of our shares.

Fiscal Council

We paid an aggregate of US$0.51 million to members of the Fiscal Council in 2016. In addition, the
members of the Fiscal Council are reimbursed for travel expenses related to the performance of their
functions.

Advisory committees

We paid an aggregate of US$0.10 million to members of our advisory committees in 2016. Under our
bylaws, those members who are directors or officers of Vale are not entitled to additional compensation for
participating on a committee. Members of our advisory committees are reimbursed for travel expenses related
to the performance of their duties.

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 EMPLOYEES

The following tables set forth the number of our employees by business and by location as of the
dates indicated.

As of December 31,
2014 2015 2016
By business:
Ferrous minerals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46,832 42,838 42,579
Coal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,897 1,608 2,039
Base metals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,564 15,554 15,239
Fertilizer nutrients(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,773 9,181 8,935
Corporate activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,465 4,917 4,270
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76,531 74,098 73,062

(1) Discontinued operations.

As of December 31,
2014 2015 2016
By location:
South America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,903 58,830 57,535
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,673 6,773 6,630
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 395 385 385
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,476 4,516 4,499
Oceania . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,706 1,654 1,521
Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,378 1,940 2,492
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76,531 74,098 73,062

We negotiate wages and benefits with a large number of unions worldwide that represent our
employees. We have collective agreements with unionized employees at our operations in Australia, Brazil,
Canada, Indonesia, Malawi, Mozambique, New Caledonia, Oman, Peru and the United Kingdom.

Wages and benefits

Wages and benefits for Vale and its subsidiaries are generally established on a company-by-company
basis. We establish our wage and benefits programs for Vale S.A. and its subsidiaries, other than Vale Canada.
In November 2016, we reached a one-year agreement with the Brazilian unions providing for a salary increase
of 8.5% beginning in November 2016. The provisions of our collective bargaining agreements with unions also
apply to our non-unionized employees. Vale Canada also establishes wages and benefits for its unionized
employees through collective bargaining agreements. In March 2016, Vale Newfoundland & Labrador
Limited, a subsidiary of Vale Canada Limited, reached a three-year agreement with the union representing
the production and maintenance employees at the Voisey’s Bay mine. For non-unionized employees, Vale
Canada undertakes an annual review of salaries. We also provide our employees and their dependents with
other benefits, including supplementary medical assistance.

Pension plans

Brazilian employees of Vale and of most of its Brazilian subsidiaries are eligible to participate in
pension plans managed by Valia.

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 Most of the participants in plans held by Valia are participants in a plan named ‘‘Vale Mais’’, which
Valia implemented in 2000. This plan is primarily a defined contribution plan with a defined benefit feature
relating to service prior to 2000 and another defined benefit feature to cover temporary or permanent
disability, pension and financial protection to dependents in case of death. Valia also operates a defined
benefit plan, closed to new participants since May 2000, with benefits based on years of service, salary and
social security benefits. This plan covers retired participants and their beneficiaries, as well as a relatively
small number of employees that declined to transfer from the old plan to the ‘‘Vale Mais’’ plan when it was
established in May 2000.

Employees within our Base Metals operations, principally in Canada and the United Kingdom,
participate in defined benefit pension plans and defined contribution pension plans. All new employees within
our Base Metals operations participate in defined contribution pension plans. Employees in Japan and Taiwan
participate in a defined benefit pension plan. Employees in other jurisdictions, including China, Indonesia,
Malawi, Switzerland, the United States and Zambia, participate in defined contribution pension plans.

Performance-based compensation

All Vale parent-company employees may receive incentive compensation each year in an amount
based on the performance of Vale, which can range from 0 to 200% of a market-based reference amount,
depending on certain targets set, and the cash generation in each period. Similar incentive compensation
arrangements are in place at our subsidiaries.

Qualifying management personnel are eligible to participate in the PSU and Matching programs. See
description of these programs under Management compensation—Executive officers.

V. ADDITIONAL INFORMATION

LEGAL PROCEEDINGS

We and our subsidiaries are defendants in numerous legal actions in the ordinary course of business,
including civil, administrative, tax, social security and labor proceedings. The most significant proceedings are
discussed below. Except as otherwise noted below, the amounts claimed, and the amounts of our provisions
for possible losses, are stated as of December 31, 2016. See note 28 to our consolidated financial statements
for further information.

Legal proceedings related to the failure of Samarco’s tailings dam in Minas Gerais

We are engaged in several legal proceedings relating to the failure of Samarco’s tailings dam in the
city of Mariana, in the state of Minas Gerais. We have notified our insurers of the dam failure event and
related complaints. For further discussion of the principal legal proceedings in which we are engaged, see
Information on the Company—Business overview—Failure of Samarco’s tailings dam in Minas Gerais. Most of
these proceedings are in early stages, and we cannot reasonably estimate the possible loss or range of losses
or the timing for a decision.

a) Putative class action in the United States

We and certain of our officers have been named as defendants in civil class action suits in federal
court in New York brought by holders of our securities under U.S. federal securities laws. The plaintiffs allege
that we made false and misleading statements or omitted to make disclosures concerning the risks and
dangers of the operations of Samarco’s Fundão dam and the adequacy of the related programs and
procedures. The plaintiffs have not specified an amount of alleged damages in these actions.

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 Legal proceedings

In March 2016, the judge overseeing the securities class action issued an order consolidating these
actions and designating lead plaintiffs and counsel. In July 2016, we filed a motion to dismiss the consolidated
amended complaint. On March 23, 2017, the Judge issued a ruling dismissing a significant part of the claims
against us and the individual defendants, and allowing the case to continue based on more limited claims. The
claims that were not dismissed relate to certain statements contained in our 2013 and 2014 sustainability
reports concerning risk mitigation plans, policies and procedures, and certain statements made in a conference
call in November 2015 concerning our responsibility for the Fundão dam collapse.

We believe that the remaining claims have no merit, we will continue vigorously contesting this action.
It is not possible to determine a range of outcomes or reliable estimates of the potential exposure at this
time, and no provision has been recognized.

b) Public civil action filed by the Brazilian government and others

In November 2015, the Brazilian federal government, the states of Minas Gerais and Espı́rito Santo,
certain federal and state authorities and certain entities collectively filed a public civil action before a federal
court in Minas Gerais against Samarco and its shareholders, Vale and BHPB. The plaintiffs claimed
approximately R$20.2 billion in monetary damages and a number of measures to remediate the environmental
damages caused by the Fundão dam failure. Certain claims brought by the plaintiffs refer to specific
defendants individually, while other claims are directed at all defendants.

In December 2015, the federal court in Minas Gerais granted an injunction preventing Vale from
selling or otherwise transferring its mining rights in Brazil. In November 2016, the federal court ordered that
the defendants: (i) in 90 days, present evidence that the leakage of waste from Fundão tailing dam has been
definitely contained; (ii) in six months, present conclusive studies, with the endorsement from the appropriate
environmental agencies, regarding an action plan and the feasibility of the withdrawal of mud placed on the
banks of Rio Doce river, its affluents and the areas near its estuary; (iii) in 30 days, make a deposit in the
total amount of R$1.2 billion to secure future reparation measures. The court has provisionally suspended our
obligation to make this R$1.2 billion cash deposit to the extent that we provide the guarantees required under
the agreements with MPF described under item c) below.

In March 2016, we, together with Samarco and BHPB, entered into the Framework Agreement with
the federal government, the state governments of Espı́rito Santo and Minas Gerais and certain other federal
and state authorities. See Business overview—Failure of Samarco’s tailings dam in Minas Gerais. In January
2017, Samarco, Vale and BHPB entered into two preliminary agreements with the MPF as described below.
We expect the Framework Agreement and the agreements with the MPF to be a first step towards the
settlement of these actions. Any settlement of these actions is subject to approval by the court.

c) Public civil action filed by Federal Prosecution Office

In May 2016, the Federal Prosecution Office (MPF) filed a public civil action against Samarco, Vale,
BHPB, BNDES and the governmental authorities that are parties to the Framework Agreement. In July 2016,
the court excluded all the governmental authorities and BNDES as defendants in this proceeding. In this
action, the MPF requested that the court order a broad range of specific actions to be taken by the various
parties. The MPF also stated in its complaint that the required remedial measures would have a total value of
R$155 billion, based on a comparison with the costs of the Deepwater Horizon oil spill in the Gulf of Mexico
in 2010.

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 In this public civil action, the MPF claims monetary damages from the defendants on a joint and
several basis as well as other forms of relief, including injunctions (i) ordering the defendants to implement
several measures to mitigate or remediate social, economic and environmental impacts arising from the
collapse of the Fundão dam, as well as other emergency measures; (ii) preventing the defendants from
encumbering or disposing of their assets; (iii) preventing the defendants from paying dividends; (iv) ordering
the defendants to deposit R$7.7 billion into a fund, managed by the defendants, for implementation of social,
environmental and emergency programs; (v) ordering the defendants to provide collateral in the amount of
R$155 billion to secure their compliance with the final court decision; (vi) ordering the defendants to
maintain working capital in the amount of R$2 billion initially, and thereafter in an amount equal to 100% of
the expenses of the remediation and compensation measures projected for the subsequent twelve months; and
(vii) ordering BNDES to take actions under its credit agreements with the defendants, including cessation of
further drawings and acceleration of outstanding principal. A preliminary hearing for conciliation was held in
September 2016.

In January 2017, Samarco, Vale and BHPB entered into two preliminary agreements with the Federal
Prosecution Office relating to this public civil action and the public civil action brought by the Brazilian
government and others. See Business overview—Failure of Samarco’s tailings dam in Minas Gerais. The
preliminary agreement was partially ratified, pending the appointment of an expert and conclusion of the final
agreement. We expect the Framework Agreement and the agreements with the MPF to be a first step towards
the settlement of the public civil action brought by the Brazilian government and others, the public civil
action brought by MPF and other related proceedings.

d) Criminal proceeding

In October 2016, the MPF filed criminal charges before the federal court of Ponte Nova, state of
Minas Gerais, against Samarco, Vale, BHPB and a number of individuals who were employees of Samarco or
members of Samarco’s governance bodies or advisory committees. The charges include murder, physical injury
and various environmental crimes due to the failure of Samarco’s dam.

Together with the indictment, the MPF is seeking a pre-judgment attachment order to seize assets
from the three companies to secure the payment of the R$20 billion claimed in connection with the failure of
Fundão dam and is also seeking the imposition of external monitoring of the companies’ ethical and social-
environmental matters practices for 10 years.

A decision is pending on the requests for injunctions against the defendants. The criminal charges
were accepted by the judge in November 2016, which initiated the criminal proceeding. We submitted our
initial defense in March 2017.

e) Other proceedings

Vale has been named as a defendant in a number of other actions seeking remediation and
compensation for environmental, property and personal damages resulting from the Fundão dam failure,
including several other public civil actions brought by state prosecutors of Minas Gerais and Espı́rito Santo
and other authorities and civil associations. The claims in these proceedings are generally similar to the claims
in the public civil action brought by the Brazilian government and others, the public civil action brought by
the MPF and the criminal proceedings described above. These other proceedings include requests for
injunctions, pre-judgment attachment of assets and seizure of our bank accounts. Other proceedings and
investigations in connection with the dam failure are expected.

In March 2017, certain holders of debt securities issued by Samarco, who are plaintiffs in a securities
class action against Samarco arising out of the failure of the Fundão dam before the Southern District of New
York, filed an amended complaint adding Vale and BHPB as defendants in this proceeding. The plaintiffs are
seeking damages for alleged violations of securities laws and other claims in connection with the purchase and
sale of debt securities issued by Samarco. We will vigorously contest this action, which we believe to be
without merit.

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 Legal proceedings

Samarco is engaged in several other investigations and proceedings claiming damages resulting from
the dam failure. Immediately after the dam failure, the environmental authority of the state of Minas Gerais
and the DNPM, an agency of the Ministry of Mines and Energy of the Brazilian government, commenced
investigation into the causes of the dam failure, and determined the suspension of Samarco’s operations
pending the conclusion of these investigations.

Tubarão port litigation

In January 2016, as part of an environmental investigation conducted by the Brazilian federal police, a
federal court in the Brazilian state of Espı́rito Santo ordered the suspension of our activities in the Pier II
and the coal pier of the Tubarão Port, due to potential environmental damages resulting from the release of
iron ore in the sea area around the Pier II and the coal pier. Our operations in the Pier II and the coal pier
of the Tubarão Port were suspended for four days, until the Federal Court of Appeals (‘‘TRF’’) of the Second
Region (Tribunal Regional Federal da Segunda Região) suspended the effects of the injunction. The TRF
granted us 60 days to implement certain measures to monitor, control and mitigate the release of iron ore in
the terminal. This 60-day period expired on March 25, 2016, and we believe that we are in compliance with
the requirements imposed by the TRF. In July 4, 2016, the TRF confirmed the suspension of the effects of
the injunction and ordered an expert investigation to confirm that we have properly implemented the
measures monitor, control and mitigate the release of iron ore in the terminal.

As part of this proceeding, we may be required to implement additional measures to prevent or

mitigate the release of iron ore in the sea. The environmental investigation is still ongoing. Depending on the
outcome of this investigation, the federal police or the federal prosecutors may bring other legal proceedings
against us in the future and may seek injunctions to suspend the activities of the Tubarão port.

Onça Puma litigation

In 2009, the federal prosecutor brought a public civil action against Vale and the Brazilian state of
Pará, seeking the suspension of our nickel operations in Onça Puma, in the state of Pará, due to the alleged
impact on the Xikrin do Cateté and Kayapó indigenous communities located close to the mining site. The
federal prosecutor contends that (i) our operations would be contaminating the water of the Catete River,
which crosses the communities, (ii) we have failed to comply with certain conditions under our environmental
licenses, and (iii) the state of Pará should not have granted environmental license to this operation.

In 2015, the federal court in the city of Redenção, state of Pará granted an injunction suspending our
nickel operations in Onça Puma and ordering the payment of a cash compensation to the affected indigenous
communities. In response to our appeal, the Supreme Court suspended the injunction, and granted us
120 days to implement certain monitoring and other mitigating measures and to comply with certain
requirements of our environmental license. Although we have taken all the possible steps for implementation,
we were unable to conclude the implementation of these measures because the indigenous communities
refused to grant us access to their lands, as determined by court.

A final decision from the Supreme Court with respect to the injunction for suspension of operations
in Onça Puma, following the impossibility to implement the monitoring and mitigating measures, is still
pending. In September 2016, the federal court issued a preliminary injunction determining the payment of
R$17 million to the indigenous people and ordering us to pay the amount of R$1 million per month for each
of Xikrin do Cateté land involved. We have appealed this decision, and the Supreme Court issued a
preliminary decision suspending these payments to the indigenous people. We are vigorously contesting this
action, which we believe to be without merit.

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Itabira suits

We are a defendant in two separate actions brought by the municipality of Itabira, in the Brazilian
state of Minas Gerais. In the first action, filed in August 1996, the municipality of Itabira alleges that our
Itabira iron ore mining operations have caused environmental and social harm, and claims damages with
respect to the alleged environmental degradation of the site of one of our mines, as well as the immediate
restoration of the affected ecological complex and the performance of compensatory environmental programs
in the region. The damages sought, as adjusted from the date of the claim, amount to approximately
R$4.702 billion. An expert report favorable to Vale has been issued, but the court granted the municipality’s
request for additional expert evidence. The elaboration of this additional expert evidence is pending.

In the second action, filed in September 1996, the municipality of Itabira claims the right to be
reimbursed for expenses it has incurred in connection with public services rendered as a consequence of our
mining activities. The damages sought, as adjusted from the date of the claim, amount to approximately
R$5.440 billion. This proceeding was suspended for a settlement negotiation, but has resumed its normal
course as the parties have not reached an agreement, and the evidence production phase will follow.

Public civil action seeking suspension of S11D project

In May 2016, associations representing the indigenous Xikrin do Cateté people brought a public civil
action against Vale, the Federal Environmental Agency (IBAMA), the Federal Indigenous Agency (FUNAI)
and the National Bank of Economic and Social Development (BNDES), seeking the suspension of the
environmental permitting procedure of our S11D project. The associations contend that FUNAI and IBAMA
have failed to conduct the appropriate studies regarding the indigenous people during the environmental
permitting procedure, and that the indigenous groups consequently did not provide a required consent. They
also requested a monthly payment of R$2 million for each association until the defendants conclude the
studies.

We will take all necessary steps to defend our rights in this public civil action. Applicable legislation
provides for mandatory consultation of indigenous communities located within ten kilometers of the project,
and these indigenous communities are located more than 12 kilometers away from the project. We have
submitted our preliminary defense, and in January 2017 the court denied plaintiffs’ request for an injunction
suspending our S11D project. This decision is subject to appeal.

Environmental proceedings involving Jangada and Feijão mines

In June 2016, the environmental authority of the Brazilian state of Minas Gerais ordered the
suspension of part of our Jangada and Feijão mines in the Southern System, in order to protect caves located
near these mines, under Brazilian legislation for the protection of caves. We have obtained an injunction from
the state courts of Minas Gerais suspending the order of the environmental authority, and the environmental
authority has appealed. In the event that the injunction is overturned or revoked, we may be required to
suspend approximately 50% of our operations at the affected mines, with potential consequences for
production volumes, costs or reserves in our iron ore business. Our total production in the mines of Jangada
and Feijão in 2016 was 0.3 million metric tons and 8.3 million metric tons, respectively.

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 Legal proceedings

Ministry of Labor proceeding

In February 2015, following an inspection in the facilities of a company that provided transportation
services to us between our mines Mina do Pico and Mina de Fábrica in Minas Gerais, the Ministry of Labor
determined that this transportation company had failed to comply with certain obligations relating to health,
safety, overtime and other labor matters. By adopting a broad interpretation of the law, the Ministry of Labor
concluded that its employees were working in conditions similar to slavery. Upon learning of the findings, we
promptly remediated the problems and we eventually terminated the agreement with the transportation
company. Nevertheless, the Ministry of Labor made findings against us. We submitted our defense at the
administrative level, which was rejected. In June 2016, we commenced judicial proceedings challenging the
administrative findings and seeking a ruling that the Ministry of Labor may not classify us as engaging in
practices similar to slavery.

CFEM-related proceedings

We are engaged in numerous administrative and judicial proceedings related to the mining royalty
known as the CFEM. For more information about CFEM, see Information on the Company—Regulatory
matters—Royalties and other taxes on mining activities. These proceedings arise out of a large number of
assessments by the DNPM. The proceedings concern different interpretations of DNPM’s method of
estimating sales, the statute of limitations, due process of law, payment of royalties on pellet sales and CFEM
charges on the revenues generated by our subsidiaries abroad. The aggregate amount claimed in the pending
assessments is approximately R$6.278 billion, including interest and penalties through December 31, 2016.

We are contesting DNPM’s claims using the available avenues under Brazilian law, beginning with
challenges in administrative tribunals and proceeding with challenges in the judicial courts. We have received
some favorable and unfavorable decisions, and we cannot predict the amount of time required before final
judicial resolutions.

DNPM’s assessments initially covered a period of up to 20 years before their issuances, based on the
interpretation that the applicable statute of limitation for CFEM claims would be 20 years. We challenged all
the assessments contending that these claims are subject to a 5-year statute of limitation. In December 2015,
the Attorney General’s Office issued a legal opinion concluding that CFEM claims are subject to a 10-year
statute of limitations. This conclusion is consistent with recent decisions of the Superior Court of Justice
(‘‘STJ’’), and we expect that the DNPM will revise all the assessments to exclude charges that are time barred
under this legal opinion.

ICMS tax assessments and legal proceedings

We are engaged in several administrative and court proceedings relating to additional charges of
value-added tax on services and circulation of goods (ICMS) by the tax authorities of different Brazilian
states. In each of these proceedings, the tax authorities claim that (i) certain credits we have deducted from
our payments of ICMS were not deductible and (ii) we have failed to comply with certain accessory
obligations; (iii) we are required to pay the ICMS on electricity purchases and (iv) we are required to pay
ICMS in connection with goods that we bring into the State of Pará. We have determined that we have a
possible loss in proceedings involving a total estimated amount of R$4.4 billion.

In connection with a legal proceeding relating to ICMS, prosecutors in the state of Rio de Janeiro are
seeking criminal charges against members of management of our subsidiary MBR, alleging tax fraud. The
amount involved in the underlying tax proceeding is small (approximately R$7 million), but if these charges
are accepted by the court, a criminal proceeding against these individuals will be started. We believe that
these allegations are without merit.

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 In addition to the tax assessments described above, the tax authorities of Pará has issued tax
assessments asserting that the calculation of ICMS should be based on the market value of the iron ore
transported, as opposed to the cost of production of the ore, which we have used to calculate the ICMS owed
in years past. We are engaged in two judicial proceedings challenging these tax assessments, one of which
covers the years 2007, 2008 and 2009, in an aggregate amount of R$1.08 billion, and the other covering the
years 2010, 2011 and 2012, in an aggregate amount of R$1.07 billion, as of December 2016. We have provided
a bank guarantee in the full amount in dispute to suspend the collection proceeding while our judicial
challenge is pending, as required by Brazilian law. The state attorney of Pará has issued an opinion in our
favor, and we are waiting for a decision of the tax authorities, and we have determined that the possibility of
a loss in connection with these proceedings is remote.

Also, the tax authorities of the State of Minas Gerais contend that Vale should also have paid ICMS
in relation to the transportation of the iron ore, but in the Company’s point of view such taxation is not
applicable because the ore was transported directly by Vale. The court decided in our favor with respect to
the tax assessment covering the years of 2009 and 2010, in an aggregate amount of R$566 million. The
discussion remains in relation to the years of 2011, 2012 and 2013, in the aggregate amount of R$855 million,
and we also expect a favorable outcome.

Litigation on Brazilian taxation of foreign subsidiaries

We are engaged in legal proceedings concerning the contention of the Brazilian federal tax authority
(Receita Federal) that we should pay Brazilian corporate income tax and social security contributions on the
net income of our non-Brazilian subsidiaries and affiliates. The position of the tax authority is based on
Article 74 of Brazilian Provisional Measure 2,158-34/2001 (‘‘Article 74’’), a tax regulation issued in 2001.

In 2013, we significantly reduced the amount in dispute by participating in the REFIS, a federal tax
settlement program for payment of amounts relating to Brazilian corporate income tax and social
contribution. We settled the claims related to the net income of our non-Brazilian subsidiaries and affiliates
from 2003 to 2012, and we continue to dispute the assessments with respect to 1996 to 2002. Under the
REFIS, we paid US$2.6 billion in 2013, and we agreed to pay the remaining US$7.0 billion in monthly
installments, bearing interest at the SELIC rate. As of December 31, 2016, the remaining balance was
US$5.419 billion to be paid in 142 further installments.

We had initiated a direct legal proceeding (mandado de segurança) in 2003 challenging the tax
authority’s position. In December 2013, as required by the REFIS statute, we waived the legal arguments with
respect to the period between 2003 and 2012.

We are continuing our direct legal proceeding with respect to the years not included in the REFIS.
The total amount in dispute for the period between 1996 and 2002 is R$2.179 billion. In 2014, the Superior
Court of Justice (STJ) ruled in our favor on certain of our arguments against those assessments. In particular,
the STJ ruled that: (a) Article 74 violates certain provisions under the international treaties against double
taxation between Brazil and the countries where some of our subsidiaries are based, so profits realized by
Vale’s subsidiaries in those jurisdictions are not taxable in Brazil under Article 74; and (b) it is illegal to
charge income tax and social contribution tax on our interest in the profits of affiliates that we account for
under the equity method. The STJ also ruled that the profits realized by Vale’s subsidiaries in the Bermuda
are subject to taxation in Brazil under Article 74. The tax authorities filed an appeal before the Federal
Supreme Court and a decision is pending.

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 Legal proceedings

PIS/COFINS assessments

Between 2011 and 2016, we received tax assessments from the Brazilian federal tax authority
contending that we incorrectly claimed PIS and COFINS tax credits for the period between 2004 and 2011.
PIS and COFINS are taxes imposed by the Brazilian government on our gross revenues, which may be
partially offset by credits resulting from PIS and COFINS payments made by our suppliers. The tax
authorities claim that (i) some credits we have deducted from our payments of PIS and COFINS were not
deductible and (ii) we have not submitted adequate evidence of certain other credits. We are contesting these
assessments in the administrative level. The total amount of these tax assessments is R$3.2 billion.

Income tax assessments

In 2004, a decision of the Brazilian Superior Court of Justice (STJ) granted us the right to deduct the
amounts we pay as social security contributions on the net income (CSLL) from our taxable income. In 2006,
the Brazilian federal tax authorities commenced a rescission action (ação rescisória) against us, seeking the
reversal of the 2004 decision. The rescission action was rejected by the federal court in Rio de Janeiro and by
the Federal Court of Appeals of the Second Region (TRF2). The tax authorities have appealed to the
Superior Court of Justice (STJ) and to the Supreme Court (STF). If the courts decide for rescission of the
2004 decision, we will no longer be able to deduct the CSLL from our future taxable income, and the
decision will determine whether or not we will be required to supplement the income tax payments we made
between 2003 and 2016. As of December 31, 2016, the total CSLL deducted from our taxable income between
2003 and 2016 was R$6.414 billion.

Railway litigation

In 1994, prior to our privatization, we entered into a contract with Rede Ferroviária Federal S.A.
(‘‘RFFSA’’), the Brazilian federal rail network, to build two railway networks in Belo Horizonte, Brazil, which
were to be incorporated into an existing railway segment, in a project called ‘‘Transposição de Belo Horizonte.’’
We subsequently entered into a related agreement with the Brazilian government to begin the construction of
an alternative railway segment, because the initially agreed segments could not be built. In August 2006,
RFFSA (now succeeded as defendant by the Brazilian government) filed a breach of contract claim against us
stemming from the 1994 contract regarding the construction of two railway networks.

Before the RFFSA lawsuit was filed, we filed a claim against RFFSA challenging the inflation
adjustment provisions in the contract with RFFSA. We contend that the method of calculation employed by
the Brazilian government is not lawful under Brazilian law. Pursuant to a partial settlement of the original
RFFSA lawsuit, if the claim is decided in the Brazilian government’s favor, then the construction costs of the
new railway segment assumed by Vale will offset the damages due from Vale under such claim, representing a
significant reduction in the amount we would be required to pay.

In June 2012, the federal judge rejected both RFFSA’s claims and our contractual claim for review of
the inflation adjustment provisions. On February 24, 2016, the Federal Court of Appeals (Tribunal Regional
Federal) affirmed the June 2012 decision of the federal judge. A request for clarification from RFFSA and
our appeal to the Superior Court of Justice (STJ) are pending. The current amount claimed by RFFSA,
including adjustments for inflation and interest, is approximately of R$4.3 billion.

Praia Mole suit

We are among the defendants in a public civil action filed by the federal prosecutor in November
1997 seeking to annul the concession agreements under which the defendants operate the Praia Mole
maritime terminal in the Brazilian state of Espı́rito Santo. In July 2012, the Federal Court of Appeals
affirmed the November 2007 decision that rejected the prosecutor’s claim and recognized the validity of those
concession agreements. The prosecutor has appealed that ruling, and a final decision on the appeal is still
pending.

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 MEMORANDUM AND ARTICLES OF ASSOCIATION

Company objectives and purposes

Our corporate purpose is defined by our bylaws to include:

 the exploration of mineral deposits in Brazil and abroad by means of research, extraction,
processing, industrialization, transportation, shipment and commerce of mineral goods;

 the building and operation of railways and the provision of our own or unrelated-party rail traffic;

 the building and operation of our own or unrelated-party maritime terminals, and the provision of
shipping activities and port services;

 the provision of logistics services integrated with cargo transport, including inflow management,
storage, transshipment, distribution and delivery, all within a multimodal transport system;

 the production, processing, transport, industrialization and commercialization of any and all
sources and forms of energy, including the production, generation, transmission, distribution and
commercialization of our own products, derivatives and sub products;

 engagement, in Brazil or abroad, in other activities that may be of direct or indirect consequence
for the achievement of our corporate purposes, including research, industrialization, purchases
and sales, importation and exportation, the development, industrialization and commercialization
of forest resources and the provision of services of any kind whatsoever; and

 the establishment or participation, in any fashion, in other companies, consortia or associations

directly or indirectly related to our business purpose.

Common shares and preferred shares

Set forth below is certain information concerning our authorized and issued share capital and a brief
summary of certain significant provisions of our bylaws and Brazilian corporate law. This description does not
purport to be complete and is qualified by reference to our bylaws (an English translation of which we have
filed with the SEC) and to Brazilian corporate law.

Our bylaws authorize the issuance of up to 3.6 billion common shares and up to 7.2 billion preferred
shares, in each case based solely on the approval of the Board of Directors without any additional
shareholder approval.

Each common share entitles the holder thereof to one vote at meetings of our shareholders. Holders
of common shares are not entitled to any preference relating to our dividends or other distributions.

Holders of preferred shares and the golden shares are generally entitled to the same voting rights as
holders of common shares, except with respect to the election of members of the Board of Directors, and are
entitled to a preferential dividend as described below. Non-controlling shareholders holding common shares
representing at least 15% of our voting capital, and preferred shares representing at least 10% of our total
share capital, have the right to appoint each one member and an alternate to our Board of Directors. If no
group of common or preferred shareholders meets the thresholds described above, shareholders holding
preferred or common shares representing at least 10% of our total share capital are entitled to combine their
holdings to appoint one member and an alternate to our Board of Directors. Holders of preferred shares,
including the golden shares, may elect one member of the permanent Fiscal Council and the respective
alternate. Non-controlling holders of common shares may also elect one member of the Fiscal Council and an
alternate, pursuant to applicable CVM rules.

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 Memorandum and articles of association

The Brazilian government holds 12 golden shares of Vale. The golden shares are preferred shares that
entitle the holder to the same rights (including with respect to voting and dividend preference) as holders of
preferred shares. In addition, the holder of the golden shares is entitled to veto any proposed action relating
to the following matters:

 a change in our name;

 a change in the location of our head office;

 a change in our corporate purpose as regards mining activities;

 any liquidation of the Company;

 any disposal or winding up of activities in any of the following parts of our iron ore mining
integrated systems:

(a) mineral deposits, ore deposits, mines;

(b) railways; or

(c) ports and maritime terminals;

 any change in the bylaws relating to the rights afforded to the classes of capital stock issued by
us; and

 any change in the bylaws relating to the rights afforded the golden shares.

Calculation of distributable amount

At each annual shareholders’ meeting, the Board of Directors is required to recommend, based on the
executive officers’ proposal, how to allocate our earnings for the preceding fiscal year. For purposes of
Brazilian corporate law, a company’s net income after income taxes and social contribution taxes for such
fiscal year, net of any accumulated losses from prior fiscal years and amounts allocated to employees’ and
management’s participation in earnings represents its ‘‘net profits’’ for such fiscal year. In accordance with
Brazilian corporate law, an amount equal to our net profits, as further reduced by amounts allocated to the
legal reserve, to the fiscal incentive investment reserve, to the contingency reserve or to the unrealized income
reserve established by us in compliance with applicable law (discussed below) and increased by reversals of
reserves constituted in prior years, is available for distribution to shareholders in any given year. Such
amount, the adjusted net profits, is referred to herein as the distributable amount. We may also establish
discretionary reserves, such as reserves for investment projects.

The Brazilian corporate law provides that all discretionary allocations of net profits, including
discretionary reserves, the contingency reserve, the unrealized income reserve and the reserve for investment
projects, are subject to approval by the shareholders voting at the annual meeting and can be transferred to
capital or used for the payment of dividends in subsequent years. The fiscal incentive investment reserve and
legal reserve are also subject to approval by the shareholders voting at the annual meeting and may be
transferred to capital but are not available for the payment of dividends in subsequent years.

The sum of certain discretionary reserves may not exceed the amount of our paid-in capital. When
such limit is reached, our shareholders may vote to use the excess to pay in capital, increase capital or
distribute dividends.

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 Our calculation of net profits and allocations to reserves for any fiscal year are determined on the
basis of the unconsolidated financial statements of our parent company, Vale S.A., in reais, prepared in
accordance with Brazilian corporate law. Our consolidated financial statements have been prepared in
accordance with IFRS using U.S. dollars as the reporting currency and, although our allocations to reserves
and dividends will be reflected in these financial statements, investors will not be able to calculate such
allocations or required dividend amounts from our consolidated financial statements in U.S. dollars.

Mandatory dividend

The Brazilian corporate law and our bylaws prescribe that we must distribute to our shareholders in
the form of dividends or interest on shareholders’ equity an annual amount equal to not less than 25% of the
distributable amount, referred to as the mandatory dividend, unless the Board of Directors advises our
shareholders at our general shareholders’ meeting that payment of the mandatory dividend for the preceding
year is inadvisable in light of our financial condition. To date, our Board of Directors has never determined
that payment of the mandatory dividend was inadvisable. The Fiscal Council must review any such
determination and report it to the shareholders. In addition to the mandatory dividend, our Board of
Directors may recommend to the shareholders payment of dividends from other funds legally available
therefore. Any payment of interim dividends will be netted against the amount of the mandatory dividend for
that fiscal year. The shareholders must also approve the recommendation of the Board of Directors with
respect to any required distribution. The amount of the mandatory dividend is subject to the size of the legal
reserve, the contingency reserve, and the unrealized income reserve. The amount of the mandatory dividend is
not subject to the size of the discretionary tax incentive reserve. See —Calculation of distributable amount.

Dividend preference of preferred shares

Pursuant to our bylaws, holders of preferred shares and the golden shares are entitled to a minimum
annual non-cumulative preferential dividend equal to (i) at least 3% of the book value per share, calculated
in accordance with the financial statements which serve as reference for the payment of dividends, or (ii) 6%
of their pro rata share of our paid-in capital, whichever is higher. To the extent that we declare dividends in
any particular year in amounts which exceed the preferential dividends on preferred shares, and after holders
of common shares have received distributions equivalent, on a per share basis, to the preferential dividends
on preferred shares, holders of common shares and preferred shares shall receive the same additional
dividend amount per share. We regularly have had sufficient distributable amounts to be able to distribute
equal amounts to both common and preferred shareholders.

Other matters relating to our preferred shares

Our bylaws do not provide for the conversion of preferred shares into common shares. In addition,
the preferred shares do not have any preference upon our liquidation and there are no redemption provisions
associated with the preferred shares.

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Distributions classified as shareholders’ equity

Brazilian companies are permitted to pay limited amounts to shareholders and treat such payments as
an expense for Brazilian income tax purposes. Our bylaws provide for the distribution of interest on
shareholders’ equity as an alternative form of payment to shareholders. The interest rate applied is limited to
the Brazilian long-term interest rate, or TJLP, for the applicable period. The deduction of the amount of
interest paid cannot exceed the greater of (1) 50% of net income (after the deduction of the provision of
social contribution on net profits and before the deduction of the provision of the corporate income tax)
before taking into account any such distribution for the period in respect of which the payment is made or
(2) 50% of the sum of retained earnings and profit reserves. Any payment of interest on shareholders’ equity
is subject to Brazilian withholding income tax. See Additional information—Taxation—Brazilian tax
considerations. Under our bylaws, the amount paid to shareholders as interest on shareholders’ equity (net of
any withholding tax) may be included as part of any mandatory and minimum dividend. Under Brazilian
corporate law, we are obligated to distribute to shareholders an amount sufficient to ensure that the net
amount received, after payment by us of applicable Brazilian withholding taxes in respect of the distribution
of interest on shareholders’ equity, is at least equal to the mandatory dividend.

Voting rights

Each common share entitles the holder thereof to one vote at meetings of our shareholders. Holders
of preferred shares are entitled to the same voting rights as holders of common shares except for the election
of members of the Board of Directors, which will no longer apply in the event of any dividend arrearage, as
described below. One of the members of the permanent Fiscal Council and his or her alternate are elected by
majority vote of the holders of preferred shares. Holders of preferred shares and common shares may, in
certain circumstances, combine their respective holdings to elect members of our Board of Directors, as
described under—Common shares and preferred shares.

The golden shares entitle the holder thereof to the same voting rights as holders of preferred shares.
The golden shares also confer certain other significant veto rights in respect of particular actions, as described
under—Common shares and preferred shares.

The Brazilian corporate law provides that non-voting or restricted-voting shares, such as the preferred
shares, acquire unrestricted voting rights beginning when a company has failed for three consecutive fiscal
years (or for any shorter period set forth in a company’s constituent documents) to pay any fixed or minimum
dividend to which such shares are entitled and continuing until payment thereof is made. Our bylaws do not
set forth any such shorter period.

Any change in the preferences or advantages of our preferred shares, or the creation of a class of
shares having priority over the preferred shares, would require the approval of the holder of the golden
shares, who can veto such matters, as well as the approval of the holders of a majority of the outstanding
preferred shares, voting as a class at a special meeting.

Shareholders’ meetings

Our Ordinary General Shareholders’ Meeting is convened by April of each year for shareholders to
resolve upon our financial statements, distribution of profits, election of Directors and Fiscal Council
Members, if necessary, and compensation of senior management. Extraordinary General Shareholders’
Meetings are convened by the Board of Directors as necessary in order to decide all other matters relating to
our corporate purposes and to pass such other resolutions as may be necessary.

Pursuant to Brazilian corporate law, shareholders voting at a general shareholders’ meeting have the
power, among other powers, to:

 amend the bylaws;

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  elect or dismiss members of the Board of Directors and members of the Fiscal Council at any
time;

 establish the remuneration of senior management and members of the Fiscal Council;

 receive annual reports by management and accept or reject management’s financial statements
and recommendations including the allocation of net profits and the distributable amount for
payment of the mandatory dividend and allocation to the various reserve accounts;

 authorize the issuance of convertible and secured debentures;

 suspend the rights of a shareholder in default of obligations established by law or by the bylaws;

 accept or reject the valuation of assets contributed by a shareholder in consideration for issuance
of capital stock;

 pass resolutions to reorganize our legal form, to merge, consolidate or split us, to dissolve and
liquidate us, to elect and dismiss our liquidators and to examine their accounts; and

 authorize management to file for bankruptcy or to request a judicial restructuring.

Pursuant to CVM recommendations, all general shareholders’ meetings, including the annual
shareholders’ meeting, require no fewer than 30 days’ notice to shareholders prior to the scheduled meeting
date. Where any general shareholders’ meeting is adjourned, 8 days’ prior notice to shareholders of the
reconvened meeting is required. Pursuant to Brazilian corporate law, this notice to shareholders is required to
be published no fewer than three times, in the Diário Oficial do Estado do Rio de Janeiro and in a newspaper
with general circulation in the city where we have our registered office, in Rio de Janeiro—Valor
Econômico—Estado do Rio de Janeiro is the newspaper currently designated for this purpose. Such notice
must contain the agenda for the meeting and, in the case of an amendment to our bylaws, an indication of
the meeting’s subject matter. In addition, under our bylaws, the holder of the golden shares is entitled to a
minimum of 15 days’ prior formal notice to its legal representative of any general shareholders’ meeting to
consider any proposed action subject to the veto rights accorded to the golden shares. See—Common shares
and preferred shares.

A shareholders’ meeting may be held if shareholders representing at least one-quarter of the voting
capital are present, except as otherwise provided, including for meetings convened to amend our bylaws,
which require a quorum of at least two-thirds of the voting capital. If no such quorum is present, notice must
again be given in the same manner as described above, and a meeting may then be convened without any
specific quorum requirement, subject to the minimum quorum and voting requirements for certain matters, as
discussed below. A shareholder without a right to vote may attend a general shareholders’ meeting and take
part in the discussion of matters submitted for consideration.

Except as otherwise provided by law, resolutions of a shareholders’ meeting are passed by a simple
majority vote, abstentions not being taken into account. Under Brazilian corporate law, the approval of
shareholders representing at least one-half of the issued and outstanding voting shares is required for the
types of action described below, as well as, in the case of the first two items below, a majority of issued and
outstanding shares of the affected class:

 creating a new class of preferred shares or disproportionately increasing an existing class of

preferred shares relative to the other classes of preferred shares, other than to the extent
permitted by the bylaws;

 changing a priority, preference, right, privilege or condition of redemption or amortization of any

class of preferred shares or creating a new class of shares with greater privileges than the existing
classes of preferred shares;

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 Memorandum and articles of association

 reducing the mandatory dividend;

 changing the corporate purposes;

 merging us with another company or consolidating or splitting us;

 participating in a centralized group of companies as defined under Brazilian corporate law;

 dissolving or liquidating us; and

 canceling any ongoing liquidation of us.

Whenever the shares of any class of capital stock are entitled to vote, each share is entitled to one
vote. Annual shareholders’ meetings must be held by April 30 of each year. Shareholders’ meetings are called,
convened and presided over by the chairman or, in case of his absence, by the vice-chairman of our Board of
Directors. In the case of temporary impediment or absence of the chairman or vice-chairman of the Board of
Directors, the shareholders’ meetings may be chaired by their respective alternates, or in the absence or
impediment of such alternates, by a director especially appointed by the chairman of the Board of Directors.
A shareholder may be represented at a general shareholders’ meeting by a proxy appointed in accordance
with applicable Brazilian law not more than one year before the meeting, who must be a shareholder, a
company officer, a lawyer or a financial institution.

Redemption rights

Our common shares and preferred shares are not redeemable, except that a dissenting shareholder is
entitled under Brazilian corporate law to obtain redemption upon a decision made at a shareholders’ meeting
approving any of the items listed above, as well as:

 any decision to transfer all of our shares to another company in order to make us a wholly-owned
subsidiary of such company, a stock merger;

 any decision to approve the acquisition of control of another company at a price which exceeds
certain limits set forth in Brazilian corporate law; or

 in the event that the entity resulting from (a) a merger, (b) a stock merger as described in
clause (i) above or (c) a spin-off that we conduct fails to become a listed company within
120 days of the general shareholders’ meeting at which such decision was taken.

Only holders of shares adversely affected by shareholder decisions altering the rights, privileges or
priority of a class of shares or creating a new class of shares may require us to redeem their shares. The right
of redemption triggered by shareholder decisions to merge, consolidate or to participate in a centralized
group of companies may only be exercised if our shares do not satisfy certain tests of liquidity, among others,
at the time of the shareholder resolution. The right of redemption lapses 30 days after publication of the
minutes of the relevant general shareholders’ meeting, unless, as in the case of resolutions relating to the
rights of preferred shares or the creation of a new class of preferred shares, the resolution is subject to
confirmation by the preferred shareholders (which must be made at a special meeting to be held within one
year), in which case the 30-day term is counted from the publication of the minutes of the special meeting.

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 We would be entitled to reconsider any action giving rise to redemption rights within 10 days
following the expiration of such rights if the redemption of shares of dissenting shareholders would jeopardize
our financial stability. Any redemption pursuant to Brazilian corporate law would be made at no less than the
book value per share, determined on the basis of the last balance sheet approved by the shareholders;
provided that if the general shareholders’ meeting giving rise to redemption rights occurred more than
60 days after the date of the last approved balance sheet, a shareholder would be entitled to demand that his
or her shares be valued on the basis of a new balance sheet dated within 60 days of such general
shareholders’ meeting.

Preemptive rights

Each of our shareholders has a general preemptive right to subscribe for shares in any capital
increase, in proportion to his or her shareholding. A minimum period of 30 days following the publication of
notice of a capital increase is assured for the exercise of the right, and the right is transferable. Under our
bylaws and Brazilian corporate law, and subject to the requirement for shareholder approval of any necessary
increase to our authorized share capital, our Board of Directors may decide not to extend preemptive rights
to our shareholders, or to reduce the 30-day period for the exercise of preemptive rights, in each case with
respect to any issuance of shares, debentures convertible into shares or warrants in the context of a public
offering. In the event of a capital increase that would maintain or increase the proportion of capital
represented by preferred shares, holders of preferred shares will have preemptive rights to subscribe only to
newly issued preferred shares. In the event of a capital increase that would reduce the proportion of capital
represented by preferred shares, shareholders will have preemptive rights to subscribe for preferred shares, in
proportion to their shareholdings, and for common shares only to the extent necessary to prevent dilution of
their overall interest in us. In the event of a capital increase that would maintain or increase the proportion
of capital represented by common shares, shareholders will have preemptive rights to subscribe only to newly
issued common shares. In the event of a capital increase that would reduce the proportion of capital
represented by common shares, holders of common shares will have preemptive rights to subscribe for
preferred shares only to the extent necessary to prevent dilution of their overall interest in us.

Tag-along rights

According to Brazilian corporate law, in the event of a sale of control of a company, the acquirer is
obliged to offer to holders of voting shares the right to sell their shares for a price equal to at least 80% of
the price paid for the voting shares representing control.

Form and transfer of shares

Our preferred shares and common shares are in book-entry form registered in the name of each
shareholder. The transfer of such shares is made under Brazilian corporate law, which provides that a transfer
of shares is effected by our transfer agent, Banco Bradesco, upon presentation of valid share transfer
instructions to us by a transferor or its representative. When preferred shares or common shares are acquired
or sold on a Brazilian stock exchange, the transfer is effected on the records of our transfer agent by a
representative of a brokerage firm or the stock exchange’s clearing system. Transfers of shares by a foreign
investor are made in the same way and are executed by the investor’s local agent, who is also responsible for
updating the information relating to the foreign investment furnished to the Central Bank of Brazil.

The BM&FBOVESPA operates a central clearing system through Companhia Brasileira de Liquidação
e Custódia, or CBLC. A holder of our shares may participate in this system and all shares elected to be put
into the system will be deposited in custody with CBLC (through a Brazilian institution that is duly authorized
to operate by the Central Bank of Brazil and maintains a clearing account with CBLC). The fact that such
shares are subject to custody with the relevant stock exchange will be reflected in our registry of shareholders.
Each participating shareholder will, in turn, be registered in the register of our beneficial shareholders that is
maintained by CBLC and will be treated in the same way as registered shareholders.

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 SHAREHOLDER DEBENTURES

At the time of the first stage of our privatization in 1997, we issued shareholder revenue interests
known in Brazil as ‘‘debêntures participativas’’ to our then-existing shareholders. The terms of the debentures
were established to ensure that our pre-privatization shareholders, including the Brazilian government, would
participate alongside us in potential future financial benefits that we derive from exploiting certain mineral
resources that were not taken into account in determining the minimum purchase price of our shares in the
privatization. In accordance with the debentures deed, holders have the right to receive semi-annual payments
equal to an agreed percentage of our net revenues (revenues less value-added tax, transport fee and insurance
expenses related to the trading of the products) from certain identified mineral resources that we owned at
the time of the privatization, to the extent that we exceed defined thresholds of sales volume relating to
certain mineral resources, and from the sale of mineral rights that we owned at that time. Our obligation to
make payments to the holders will cease when the relevant mineral resources are exhausted.

We made available for withdrawal by holders of shareholder debentures US$118 million in 2014,
US$65 million in 2015 and US$84 million in 2016. In October 2013, the accumulated sales volume of iron ore
from the Northern System reached the relevant threshold established in the debentures deed, which triggered
our obligation to make additional semi-annual payments of the premium on iron ore products, starting in
2014. See note 32 to our consolidated financial statements for a description of the terms of the debentures.

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 EXCHANGE CONTROLS AND OTHER LIMITATIONS
AFFECTING SECURITY HOLDERS

Under Brazilian corporate law, there are no restrictions on ownership of our capital stock by
individuals or legal entities domiciled outside Brazil. However, the right to convert dividend payments and
proceeds from the sale of preferred shares or common shares into foreign currency and to remit such
amounts outside Brazil is subject to restrictions under foreign investment legislation, which generally requires,
among other things, that the relevant investment be registered with the Central Bank of Brazil. These
restrictions on the remittance of foreign capital abroad could hinder or prevent the depositary bank and its
agents for the preferred shares or common shares represented by ADSs from converting dividends,
distributions or the proceeds from any sale of preferred shares, common shares or rights, as the case may be,
into U.S. dollars and remitting such amounts abroad. Delays in, or refusal to grant any required government
approval for conversions of Brazilian currency payments and remittances abroad of amounts owed to holders
of ADSs could adversely affect holders of ADRs.

Under Resolution No. 4,373/2014 of the CMN, foreign investors may invest in almost all financial
assets and engage in almost all transactions available in the Brazilian financial and capital markets, provided
that certain requirements are fulfilled. In accordance with Resolution No. 4,373/2014, the definition of foreign
investor includes individuals, legal entities, mutual funds and other collective investment entities, domiciled or
headquartered outside Brazil.

Under Resolution No. 4,373/2014, a foreign investor must:

(1) appoint at least one representative in Brazil, with powers to perform actions relating to its
investment,

(2) complete the appropriate foreign investor registration form,

(3) register as a foreign investor with the CVM, and register its foreign investment with the Central
Bank of Brazil, and

(4) appoint a custodian, duly licensed by the Central Bank of Brazil, if the Brazilian representative in
item (1) is not a financial institution.

Resolution No. 4,373/2014 specifies the manner of custody and the permitted means for trading
securities held by foreign investors under the resolution. The offshore transfer or assignment of securities or
other financial assets held by foreign investors pursuant to Resolution No. 4,373/2014 is prohibited, except for
transfers resulting from a corporate reorganization, or occurring upon the death of an investor by operation
of law or will.

Resolution No. 4,373/2014 also provides for the issuance of depositary receipts in foreign markets in
respect of shares of Brazilian issuers. It provides that the proceeds from the sale of ADSs by holders of
ADRs outside Brazil are not subject to Brazilian foreign investment controls and holders of ADSs who are
not residents of a low-tax jurisdiction (paı́s com tributação favorecida), as defined by Brazilian law, will be
entitled to favorable tax treatment.

An electronic registration has been issued to the custodian in the name of the depositary with respect
to the ADSs. Pursuant to this electronic registration, the custodian and the depositary are able to convert
dividends and other distributions with respect to the underlying shares into foreign currency and to remit the
proceeds outside Brazil. If a holder exchanges ADSs for preferred shares or common shares, the holder must,
within five business days, seek to obtain its own electronic registration with the Central Bank of Brazil under
Law No. 4,131/1962 and Resolution No. 4,373/2014. Thereafter, unless the holder has registered its investment
with the Central Bank of Brazil, such holder may not convert into foreign currency and remit outside Brazil
the proceeds from the disposition of, or distributions with respect to, such preferred shares or common
shares.

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 Exchange controls and other limitations affecting security holders

Under Brazilian law, whenever there is a serious imbalance in Brazil’s balance of payments or reasons
to foresee a serious imbalance, the Brazilian government may impose temporary restrictions on the remittance
to foreign investors of the proceeds of their investments in Brazil, and on the conversion of Brazilian currency
into foreign currencies. Such restrictions may hinder or prevent the custodian or holders who have exchanged
ADSs for underlying preferred shares or common shares from converting distributions or the proceeds from
any sale of such shares, as the case may be, into U.S. dollars and remitting such U.S. dollars abroad. In the
event the custodian is prevented from converting and remitting amounts owed to foreign investors, the
custodian will hold the reais it cannot convert for the account of the holders of ADRs who have not been
paid. The depositary will not invest the reais and will not be liable for interest on those amounts. Any reais so
held will be subject to devaluation risk against the U.S. dollar.

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 TAXATION

The following summary contains a description of the principal Brazilian and U.S. federal income tax
consequences of the ownership and disposition of preferred shares, common shares or ADSs. You should
know that this summary does not purport to be a comprehensive description of all the tax considerations that
may be relevant to a holder of preferred shares, common shares or ADSs.

Holders of preferred shares, common shares or ADSs should consult their own tax advisors to discuss
the tax consequences of the purchase, ownership and disposition of preferred shares, common shares or
ADSs, including, in particular, the effect of any state, local or other national tax laws.

Although there is at present no treaty to avoid double taxation between Brazil and the United States,
both countries’ tax authorities have been having discussions that may result in the execution of such a treaty.
In this regard, the two countries signed a Tax Information Exchange Agreement on March 20, 2007, which the
Brazilian government approved in May 2013. We cannot predict whether or when such a treaty will enter into
force or how, if entered into, such a treaty will affect the U.S. holders, as defined below, of preferred shares,
common shares or ADSs.

Brazilian tax considerations

The following discussion summarizes the principal Brazilian tax consequences of the acquisition,
ownership and disposition of preferred shares, common shares or ADSs by a holder not deemed to be
domiciled in Brazil for purposes of Brazilian taxation (‘‘Non-Brazilian Holder’’). It is based on the tax laws of
Brazil and regulations thereunder in effect on the date hereof, which are subject to change (possibly with
retroactive effect). This discussion does not specifically address all of the Brazilian tax considerations
applicable to any particular Non-Brazilian Holder. Therefore, Non-Brazilian Holders should consult their own
tax advisors concerning the Brazilian tax consequences of an investment in preferred shares, common shares
or ADSs.

Shareholder distributions

For Brazilian corporations, such as the Company, distributions to shareholders are classified as either
dividend or interest on shareholders’ equity.

Dividends

Amounts distributed as dividends will generally not be subject to Brazilian withholding income tax if
the distribution is paid only from profits for the corresponding year, as determined under Brazilian tax
principles. Dividends paid from profits generated before January 1, 1996 may be subject to Brazilian
withholding income tax at varying rates depending on the year the profits were generated. Dividends paid
from sources other than profits as determined under Brazilian tax principles may be subject to withholding
tax.

Interest on shareholders’ equity

Amounts distributed as interest on shareholders’ equity are generally subject to withholding income
tax at the rate of 15%, except where:

(1) the beneficiary is exempt from tax in Brazil, in which case the distribution will not be subject to
withholding income tax;

(2) the beneficiary is located in a jurisdiction that does not impose income tax or where the
maximum income tax rate is lower than 17% (a ‘‘Low Tax Jurisdiction’’) or where internal
legislation imposes restrictions on the disclosure of the shareholding structure or the ownership of
the investment, in which case the applicable withholding income tax rate is 25%; or

(3) the effective beneficiary is resident in Japan, in which case the applicable withholding income tax
rate is 12.5%.

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 Taxation

Interest on shareholders’ equity is calculated as interest rate on the sum of the following accounts:
(i) share capital, (ii) capital reserves, (ii) profits reserves, (iv) treasury stocks and (v) accumulated losses. The
interest rate applied may not exceed the TJLP, the benchmark Brazilian long-term interest rate. In addition,
the amount of distributions classified as interest on shareholders’ equity may not be more than the greater of
(1) 50% of net income (after the deduction of social contribution on net profits but before taking into
account such payment of interest and the provision for corporate income tax) for the period in respect of
which the payment is made and (2) 50% of the sum of retained earnings and profit reserves.

Payments of interest on shareholders’ equity are deductible for the purposes of corporate income tax
and social contribution on net profit, to the extent of the limits described above. The tax benefit to the
Company in the case of a distribution by way of interest on shareholders’ equity is a reduction in the
Company’s corporate tax charge by an amount equivalent to 34% of such distribution.

Taxation of capital gains

Taxation of Non-Brazilian Holders on capital gains depends on the status of the holder as either:

 (i) a holder that is not resident or domiciled in a Low Tax Jurisdiction, or in a jurisdiction where
internal legislation imposes restrictions on the disclosure of shareholding structure or the
ownership of the investment, and that has registered its investment in Brazil in accordance with
Resolution No. 4,373/2014 (a 4,373 Holder), or (ii) a holder of ADSs; or

 any other Non-Brazilian Holder.

Investors identified in items (i) or (ii) are subject to favorable tax treatment, as described below.

Capital gains realized by a Non-Brazilian Holder from the disposition of ‘‘assets located in Brazil’’ are
subject to taxation in Brazil. Preferred shares and common shares qualify as assets located in Brazil, and the
disposition of such assets by a Non-Brazilian Holder may be subject to income tax on the gains assessed, in
accordance with the rules described below, regardless of whether the transaction is carried out with another
non-Brazilian resident or with a Brazilian resident.

There is some uncertainty as to whether ADSs qualify as ‘‘assets located in Brazil’’ for this purpose.
Arguably, the ADSs constitute assets located in Brazil and therefore the gains realized by a Non-Brazilian
Holder on the disposition of ADSs to another non-Brazilian resident should not be subject to income tax in
Brazil. However, it is not certain that the Brazilian courts will uphold this interpretation of the definition of
‘‘assets located in Brazil’’ in connection with the taxation of gains realized by a Non-Brazilian Holder on the
disposition of ADSs. Consequently, gains on a disposition of ADSs by a Non-Brazilian Holder (whether in a
transaction carried out with another Non-Brazilian Holder or a person domiciled in Brazil) may be subject to
income tax in Brazil in accordance with the rules applicable to a disposition of shares.

Although there are arguments to the contrary, the deposit of preferred shares or common shares in
exchange for ADSs may be subject to Brazilian income tax if the acquisition cost of the shares being
deposited is lower than the average price, determined as either:

 the average price per preferred share or common share on the Brazilian stock exchange in which
the greatest number of such shares were sold on the day of deposit; or

 if no preferred shares or common shares were sold on that day, the average price on the
Brazilian stock exchange in which the greatest number of preferred shares or common shares
were sold in the 15 trading sessions immediately preceding such deposit.

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 The positive difference between the average price of the preferred shares or common shares
calculated as described above and their acquisition cost will be considered to be a capital gain subject to
income tax in Brazil. In some circumstances, there are grounds to conclude that such taxation is not
applicable with respect to any 4,373 Holder, provided such holder is not located in a Low Tax Jurisdiction.

The withdrawal of preferred shares or common shares by holders in exchange for ADSs is not subject
to Brazilian income tax, subject to compliance with applicable regulations regarding the registration of the
investment with the Central Bank of Brazil.

For the purpose of Brazilian taxation, the income tax rules on gains related to disposition of preferred
shares or common shares vary depending on:

 the domicile of the Non-Brazilian Holder;

 the method by which such Non-Brazilian Holder has registered his investment with the Central
Bank of Brazil; and

 how the disposition is carried out, as described below.

The gain realized as a result of a transaction on a Brazilian stock exchange is the difference between:
(i) the amount in Brazilian currency realized on the sale or disposition and (ii) the acquisition cost, without
any adjustment for inflation, of the securities that are the subject of the transaction.

Through December 31, 2016, any gain realized by a Non-Brazilian Holder on a sale or disposition of
preferred shares or common shares carried out on the Brazilian stock exchange was:

 exempt from income tax where the Non-Brazilian Holder (i) is a 4,373 Holder; and (ii) is not
located in a Low Tax Jurisdiction;

 subject to income tax at a rate of 15% where the Non-Brazilian Holder either (A) (i) is not a
4,373 Holder and (ii) is not resident or domiciled in a Low Tax Jurisdiction or (B) (i) is a 4,373
Holder and (ii) is resident or domiciled in a Low Tax Jurisdiction; or

 subject to income tax at a rate of 25% where the Non-Brazilian Holder (i) is not a 4,373 Holder
and (ii) is resident or domiciled in a Low Tax Jurisdiction.

The sale or disposition of common shares carried out on the Brazilian stock exchange is subject to
withholding tax at the rate of 0.005% on the sale value. This withholding tax can be offset against the
eventual income tax due on the capital gain. A 4,373 Holder that is not resident or domiciled in a Low Tax
Jurisdiction is not subject to this withholding tax.

Beginning on January 1, 2017, the taxation regime for capital gains in Brazil was significantly
amended. Under the new regime, capital gains realized by non-Brazilian residents and individuals resident in
Brazil are subject to progressive taxation, and the rates range from 15% to 22.5% as described below:

 15% on the portion of gains up to R$5 million;

 17.5% on the portion of gains above R$5 million and below R$10 million;

 20% on the portion of gains above R$10 million and below R$30 million ; and

 22.5% on the portion of gains exceeding R$30 million.

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 Taxation

We believe that this new regime of capital gains taxation replaces previous instances of taxation at the
rate of 15%, but does not change the rate of 25% applicable to residents in a Low Tax Jurisdictions. We
expect that the tax authorities will adapt regulations to clarify, among other issues, whether the new regime
applies or not to 4,373 Holders, to a residents in a Low Tax Jurisdiction. You should consult your own tax
advisors concerning the implications of these rules in light of your particular circumstances.

With respect to transactions arranged by a broker that are conducted on the Brazilian non-organized
over-the-counter market, a withholding income tax at a rate of 0.005% on the sale value is levied on the
transaction and can be offset against the eventual income tax due on the capital gain.

In the case of a redemption of preferred shares, common shares or ADSs or a capital reduction by a
Brazilian corporation, the positive difference between the amount received by any Non-Brazilian Holder and
the acquisition cost of the preferred shares, common shares or ADSs being redeemed is treated as capital
gain and is therefore generally subject to income tax at the progressive rate from 15% to 22.5%, while the
25% rate applies to residents in a Low Tax Jurisdiction.

Any exercise of pre-emptive rights relating to our preferred shares or common shares will not be
subject to Brazilian taxation. Any gain realized by a Non-Brazilian Holder on the disposition of pre-emptive
rights relating to preferred shares or common shares in Brazil will be subject to Brazilian income taxation in
accordance with the same rules applicable to the sale or disposition of preferred shares or common shares.

Tax on foreign exchange and financial transactions

Foreign exchange transactions

Brazilian law imposes a tax on foreign exchange transactions, or an IOF/Exchange Tax, due on the
conversion of reais into foreign currency and on the conversion of foreign currency into reais. Currently, for
most foreign currency exchange transactions, the rate of IOF/Exchange Tax is 0.38%.

The outflow of resources from Brazil related to investments held by a Non-Brazilian Holder in the
Brazilian financial and capital markets is currently subject to IOF/Exchange Tax at a zero percent rate. In any
case, the Brazilian government may increase such rates at any time, up to 25%, with no retroactive effect.

Transactions involving securities

Brazilian law imposes a tax on transactions involving securities, or an IOF/Securities Tax, including
those carried out on the Brazilian stock exchange. The rate of IOF/Securities Tax applicable to transactions
involving publicly traded securities in Brazil is currently zero. The rate of IOF/Securities Tax applicable to a
transfer of shares traded on the Brazilian stock exchange to back the issuance of depositary receipts has also
been zero since December 24, 2013. However, the Brazilian Government may increase such rates at any time
up to 1.5% of the transaction amount per day, but the tax cannot be applied retroactively.

Other Brazilian taxes

There are no Brazilian inheritance, gift or succession taxes applicable to the ownership, transfer or
disposition of preferred shares, common shares or ADSs by a Non-Brazilian Holder, except for gift and
inheritance taxes which are levied by some states of Brazil on gifts made or inheritances bestowed by a
Non-Brazilian Holder to individuals or entities resident or domiciled within such states in Brazil. There are
no Brazilian stamp, issue, registration, or similar taxes or duties payable by holders of preferred shares or
common shares or ADSs.

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U.S. federal income tax considerations

This summary does not purport to be a comprehensive description of all the U.S. federal income tax
consequences of the acquisition, holding or disposition of the preferred shares, common shares or ADSs. This
summary applies to U.S. holders, as defined below, who hold their preferred shares, common shares or ADSs
as capital assets and does not apply to special classes of holders, such as:

 certain financial institutions,

 insurance companies,

 dealers in securities or foreign currencies,

 tax-exempt organizations,

 securities traders who elect to account for their investment in preferred shares, common shares or
ADSs on a mark-to-market basis,

 persons holding preferred shares, common shares or ADSs as part of hedge, straddle, conversion
or other integrated financial transactions for tax purposes,

 holders whose functional currency for U.S. federal income tax purposes is not the U.S. dollar,

 partnerships or other holders treated as ‘‘pass-through entities’’ for U.S. federal income tax
purposes, or

 persons owning, actually or constructively, 10% or more of our voting shares.

This discussion is based on the Internal Revenue Code of 1986, as amended to the date hereof,
administrative pronouncements, judicial decisions and final, temporary and proposed Treasury Regulations, all
as in effect on the date hereof. These authorities are subject to differing interpretations and may be changed,
perhaps retroactively, so as to result in U.S. federal income tax consequences different from those discussed
below. There can be no assurance that the U.S. Internal Revenue Service (the ‘‘IRS’’) will not challenge one
or more of the tax consequences discussed herein or that a court will not sustain such a challenge in the
event of litigation. This summary does not address the Medicare tax on net investment income, the alternative
minimum tax, or any aspect of state, local or non-U.S. tax law.

YOU SHOULD CONSULT YOUR TAX ADVISORS WITH REGARD TO THE APPLICATION OF
THE U.S. FEDERAL INCOME TAX LAWS TO YOUR PARTICULAR SITUATIONS AS WELL AS ANY TAX
CONSEQUENCES ARISING UNDER THE LAWS OF ANY STATE, LOCAL OR NON-U.S. TAXING
JURISDICTION.

This discussion is also based, in part, on representations of the depositary and the assumption that
each obligation in the deposit agreement and any related agreement will be performed in accordance with its
terms.

For purposes of this discussion, you are a ‘‘U.S. holder’’ if you are a beneficial owner of preferred
shares, common shares or ADSs that is, for U.S. federal income tax purposes:

 a citizen or resident alien individual of the United States,

158
 Taxation

 a corporation created or organized in or under the laws of the United States or of any political
subdivision thereof, or

 otherwise subject to U.S. federal income taxation on a net income basis with respect to the
preferred shares, common shares or ADSs.

The term U.S. holder also includes certain former citizens of the United States.

In general, if you are the beneficial owner of American depositary receipts evidencing ADSs, you will
be treated as the beneficial owner of the preferred shares or common shares represented by those ADSs for
U.S. federal income tax purposes. Deposits and withdrawals of preferred shares or common shares by you in
exchange for ADSs will not result in the realization of gain or loss for U.S. federal income tax purposes. Your
tax basis in such preferred shares or common shares will be the same as your tax basis in such ADSs, and the
holding period in such preferred shares or common shares will include the holding period in such ADSs.

Taxation of dividends

The gross amount of a distribution paid on ADSs, preferred shares or common shares, including
distributions paid in the form of payments of interest on capital for Brazilian tax purposes, out of our current
or accumulated earnings and profits (as determined for U.S. federal income tax purposes) will be taxable to
you as foreign source dividend income and will not be eligible for the dividends-received deduction allowed to
corporate shareholders under U.S. federal income tax law. The amount of any such distribution will include
the amount of Brazilian withholding taxes, if any, withheld on the amount distributed. To the extent that a
distribution exceeds our current and accumulated earnings and profits, such distribution will be treated as a
nontaxable return of capital to the extent of your basis in the ADSs, preferred shares or common shares, as
the case may be, with respect to which such distribution is made, and thereafter as a capital gain.

You will be required to include dividends paid in reais in income in an amount equal to their U.S.
dollar value calculated by reference to an exchange rate in effect on the date such distribution is received by
the depositary, in the case of ADSs, or by you, in the case of common shares or preferred shares. If the
depositary or you do not convert such reais into U.S. dollars on the date they are received, it is possible that
you will recognize foreign currency loss or gain, which would be ordinary loss or gain, when the reais are
converted into U.S. dollars. If you hold ADSs, you will be considered to receive a dividend when the dividend
is received by the depositary.

Subject to certain exceptions for short-term and hedged positions, the U.S. dollar amount of dividends
received by certain non-corporate taxpayers, including individuals, will be subject to taxation at the
preferential rates applicable to long-term capital gains if the dividends are ‘‘qualified dividends.’’ Dividends
paid on the ADSs will be treated as qualified dividends if (i) the ADSs are readily tradable on an established
securities market in the United States and (ii) the Company was not, in the year prior to the year in which
the dividend was paid, and is not, in the year in which the dividend is paid, a passive foreign investment
company (‘‘PFIC’’). The ADSs are listed on the New York Stock Exchange and will qualify as readily tradable
on an established securities market in the United States so long as they are so listed. Based on Vale’s audited
financial statements and relevant market and shareholder data, Vale believes that it was not treated as a PFIC
for U.S. federal income tax purposes with respect to its 2016 taxable year. In addition, based on Vale’s
audited financial statements and its current expectations regarding the value and nature of its assets, the
sources and nature of its income, and relevant market and shareholder data, Vale does not anticipate
becoming a PFIC for its 2017 taxable year.

159
 Based on existing guidance, it is not entirely clear whether dividends received with respect to the
preferred shares and common shares will be treated as qualified dividends (and therefore whether such
dividends will qualify for the preferential rates of taxation applicable to long-term capital gains), because the
preferred shares and common shares are not themselves listed on a U.S. exchange. In addition, the U.S.
Treasury has announced its intention to promulgate rules pursuant to which holders of ADSs, preferred shares
or common stock and intermediaries through whom such securities are held will be permitted to rely on
certifications from issuers to establish that dividends are treated as qualified dividends. Because such
procedures have not yet been issued, it is unclear whether we will be able to comply with them. You should
consult your own tax advisors regarding the availability of the reduced dividend tax rate in light of your own
particular circumstances.

Subject to generally applicable limitations and restrictions, you will be entitled to a credit against your
U.S. federal income tax liability, or a deduction in computing your U.S. federal taxable income, for Brazilian
income taxes withheld by us. You must satisfy minimum holding period requirements to be eligible to claim a
foreign tax credit for Brazilian taxes withheld on dividends. The limitation on foreign taxes eligible for credit
is calculated separately for specific classes of income. For this purpose dividends paid by us on our shares will
generally constitute ‘‘passive income.’’ Foreign tax credits may not be allowed for withholding taxes imposed
in respect of certain short-term or hedged positions in securities or in respect of arrangements in which a
U.S. holder’s expected economic profit is insubstantial. You should consult your own tax advisors concerning
the implications of these rules in light of your particular circumstances.

Taxation of capital gains

Upon a sale or exchange of preferred shares, common shares or ADSs, you will recognize a capital
gain or loss for U.S. federal income tax purposes equal to the difference, if any, between the amount realized
on the sale or exchange and your adjusted tax basis in the preferred shares, common shares or ADSs. This
gain or loss will be long-term capital gain or loss if your holding period in the preferred shares, common
shares or ADSs exceeds one year. The net amount of long-term capital gain recognized by individual U.S.
holders generally is subject to taxation at preferential rates. Your ability to use capital losses to offset income
is subject to limitations.

Any gain or loss will be U.S. source gain or loss for U.S. foreign tax credit purposes. Consequently, if
a Brazilian withholding tax is imposed on the sale or disposition of ADSs, preferred shares or common
shares, and you do not receive significant foreign source income from other sources, you may not be able to
derive effective U.S. foreign tax credit benefits in respect of such Brazilian withholding tax. You should
consult your own tax advisor regarding the application of the foreign tax credit rules to your investment in,
and disposition of, ADSs, preferred shares or common shares.

If a Brazilian tax is withheld on the sale or disposition of shares, the amount realized by a U.S. holder
will include the gross amount of the proceeds of such sale or disposition before deduction of the Brazilian
tax. See Brazilian tax considerations above.

Information reporting and backup withholding

Information returns may be filed with the IRS in connection with distributions on the preferred
shares, common shares or ADSs and the proceeds from their sale or other disposition. You may be subject to
United States backup withholding tax on these payments if you fail to provide your taxpayer identification
number or comply with certain certification procedures or otherwise establish an exemption from backup
withholding. If you are required to make such a certification or to establish such an exemption, you generally
must do so on IRS Form W-9.

The amount of any backup withholding from a payment to you will be allowed as a credit against your
U.S. federal income tax liability and may entitle you to a refund, provided that the required information is
timely furnished to the IRS.

160
 EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Our management, with the participation of our chief executive officer and chief financial officer, has
evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2016. There are
inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the
possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly,
even effective disclosure controls and procedures can only provide reasonable assurance of achieving their
control objectives.

Our chief executive officer and chief financial officer have concluded that our disclosure controls and
procedures were effective to provide reasonable assurance that information required to be disclosed by us in
the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported,
within the time periods specified in the applicable rules and forms, and that it is accumulated and
communicated to our management, including our chief executive officer and chief financial officer, as
appropriate to allow timely decisions regarding required disclosure.

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal control over
financial reporting. Our internal control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles. Our internal control over
financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that,
in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
Company; (ii) provide reasonable assurance that transactions are recorded to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of
the Company are being made only in accordance with authorizations of management and directors of the
Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of our assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of the effectiveness to future periods are subject to the risk
that controls may become inadequate and that the degree of compliance with the policies or procedures may
deteriorate.

Our management has assessed the effectiveness of Vale’s internal control over financial reporting as of
December 31, 2016 based on the criteria established in ‘‘Internal Control—Integrated Framework (2013)’’
issued by the Committee of Sponsoring Organizations of the Treadway Commission (‘‘COSO’’). Based on
such assessment and criteria, our management has concluded that our internal control over financial reporting
was effective as of December 31, 2016. The effectiveness of our internal control over financial reporting as of
December 31, 2016 has been audited by KPMG Auditores Independentes, an independent registered public
accounting firm, as stated in their report which appears herein.

Our management identified no change in our internal control over financial reporting during our fiscal
year ended December 31, 2016 that has materially affected or is reasonably likely to materially affect our
internal control over financial reporting.

161
 CORPORATE GOVERNANCE

Under NYSE rules, foreign private issuers are subject to more limited corporate governance
requirements than U.S. domestic issuers. As a foreign private issuer, we must comply with four principal
NYSE corporate governance rules: (1) we must satisfy the requirements of Exchange Act Rule 10A-3 relating
to audit committees; (2) our chief executive officer must promptly notify the NYSE in writing after any
executive officer becomes aware of any non-compliance with the applicable NYSE corporate governance
rules; (3) we must provide the NYSE with annual and interim written affirmations as required under the
NYSE corporate governance rules; and (4) we must provide a brief description of any significant differences
between our corporate governance practices and those followed by U.S. companies under NYSE listing
standards. The table below briefly describes the significant differences between our practices and the practices
of U.S. domestic issuers under NYSE corporate governance rules.

Section NYSE corporate governance rule for U.S. domestic issuers Our approach
303A.01 A listed company must have a majority of independent We are a controlled company because more than a majority of
directors. ‘‘Controlled companies’’ are not required to comply our voting power for the appointment of directors is controlled
with this requirement. by Valepar. As a controlled company, are not required to
comply with the majority of independent director requirements.
There is no legal provision or policy that requires us to have
independent directors.

303A.03 The non-management directors of a listed company must meet We do not have any management directors.
at regularly scheduled executive sessions without management.

303A.04 A listed company must have a nominating/corporate governance We do not have a nominating committee. As a controlled
committee composed entirely of independent directors, with a company, we are not required to comply with the nominating/
written charter that covers certain minimum specified duties. corporate governance committee requirements. However, we do
have a Governance and Sustainability Committee, which is an
‘‘Controlled companies’’ are not required to comply with this advisory committee to the Board of Directors and may include
requirement. members who are not directors.

According to its charter, this committee is responsible, among

other matters, for:

 evaluating and recommending improvements to the

effectiveness of our corporate governance practices and the
functioning of the Board of Directors;

 recommending improvements to our Code of Ethics and

Conduct and our management system in order to avoid
conflicts of interest between us and our shareholders or
management;

 issuing reports on potential conflicts of interest between us

and our shareholders or management; and

The committee’s charter requires at least one of its members to

be independent. For this purpose, an independent member is a
person who:

 does not have any current relationship with us other than

being part of a committee, or being a shareholder of the
Company;

 does not participate, directly or indirectly, in the sales

efforts or provision of services by Vale;

 is not a representative of the controlling shareholders;

 has not been an employee of the controlling shareholder or

of entities affiliated with a controlling shareholder; and

 has not been an executive officer of the controlling

shareholder.

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 Corporate governance

Section NYSE corporate governance rule for U.S. domestic issuers Our approach
303A.05 A listed company must have a compensation committee As a controlled company, we are not required to comply with
composed entirely of independent directors, with a written the compensation committee requirements.
charter that covers certain minimum specified duties.

‘‘Controlled companies’’ are not required to comply with this However, we have an Executive Development Committee,
requirement. which is an advisory committee to the Board of Directors and
may include members who are not directors. This committee is
responsible for:

 reporting on general human resources policies;

 analyzing and reporting on the adequacy of compensation

levels for our executive officers;

 proposing and updating guidelines for evaluating the

performance of our executive officers; and

 reporting on policies relating to health and safety.

303A.06 A listed company must have an audit committee with a In lieu of appointing an audit committee composed of
303A.07 minimum of three independent directors who satisfy the independent members of the Board of Directors, we have
independence requirements of Rule 10A-3 under the Exchange established a permanent conselho fiscal, or fiscal council, in
Act, with a written charter that covers certain minimum accordance with the applicable provisions of Brazilian corporate
specified duties. law, and provided the fiscal council with additional powers to
permit it to meet the requirements of Exchange Act
Rule 10A-3(c)(3).

Under our bylaws, the Fiscal Council shall have between three
and five members. Under Brazilian corporate law, which
provides standards for the independence of the Fiscal Council
from us and our management, none of the members of the
Fiscal Council may be a member of the Board of Directors or
an executive officer. Management does not elect any Fiscal
Council member. Our Board of Directors has determined that
one of the members of our Fiscal Council meets the New York
Stock Exchange independence requirements that would apply to
audit committee members in the absence of our reliance on
Exchange Act Rule 10A-3(c)(3).

The responsibilities of the Fiscal Council are set forth in its

charter. Under our bylaws, the charter must give the Fiscal
Council responsibility for the matters required under Brazilian
corporate law, as well as responsibility for:

 establishing procedures for the receipt, retention and

treatment of complaints related to accounting, controls and
audit issues, as well as procedures for the confidential,
anonymous submission of concerns regarding such matters;

 recommending and assisting the Board of Directors in the

appointment, establishment of compensation and dismissal
of independent auditors;

 pre-approving services to be rendered by the independent

auditors;

 overseeing the work performed by the independent auditors,

with powers to recommend withholding the payment of
compensation to the independent auditors; and

 mediating disagreements between management and the

independent auditors regarding financial reporting.

303A.08 Shareholders must be given the opportunity to vote on all Under Brazilian corporate law, shareholder pre-approval is
equity-compensation plans and material revisions thereto, with required for the adoption of any equity compensation plans.
limited exemptions set forth in the NYSE rules.

303A.09 A listed company must adopt and disclose corporate We have not published formal corporate governance guidelines.
governance guidelines that cover certain minimum specified
subjects.

163
Section NYSE corporate governance rule for U.S. domestic issuers Our approach
303A.10 A listed company must adopt and disclose a code of business We have adopted a formal code of ethical conduct, which
conduct and ethics for directors, officers and employees, and applies to our directors, officers and employees. We report each
promptly disclose any waivers of the code for directors or year in our annual report on Form 20-F any waivers of the
executive officers. code of ethical conduct granted for directors or executive
officers. Our code of ethical conduct has a scope that is similar,
but not identical, to that required for a U.S. domestic company
under the NYSE rules.

303A.12 a) Each listed company CEO must certify to the NYSE each We are subject to (b) and (c) of these requirements, but not
year that he or she is not aware of any violation by the (a).
company of NYSE corporate governance listing standards.

b) Each listed company CEO must promptly notify the NYSE

in writing after any executive officer of the listed company
becomes aware of any non-compliance with any applicable
provisions of this Section 303A.

c) Each listed company must submit an executed Written

Affirmation annually to the NYSE. In addition, each listed
company must submit an interim Written Affirmation as and
when required by the interim Written Affirmation form
specified by the NYSE.

CODE OF ETHICS AND CONDUCT

We have a code of ethics and conduct that applies to our employees and to the members of our
Board of Directors and our Board of Executive Officers, including the chief executive officer, the chief
financial officer and the principal accounting officer. We have posted this Code of Ethics and Conduct on our
website, at: http://www.vale.com (under English Version/Investors/The Company/Corporate Governance/
Policies). Copies of our code of ethics and conduct may be obtained without charge by writing to us at the
address set forth on the front cover of this Form 20-F. We have not granted any implicit or explicit waivers
from any provision of our code of ethics and conduct since its adoption.

164
 PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table summarizes the fees billed to us by our independent auditors KPMG Auditores
Independentes for professional services in 2016 and 2015:

Year ended December 31,

2015 2016
(US$ thousand)
Audit fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,844 6,084
Audit-related fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206 63
Other fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – 6
Total fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,050 6,143

‘‘Audit fees’’ are the aggregate fees billed by KPMG Auditores Independentes for the audit of our
annual financial statements, the audit of the statutory financial statements of our subsidiaries, and reviews of
interim financial statements and attestation services that are provided in connection with statutory and
regulatory filings or engagements. They also include fees for services that only the independent auditor
reasonably can provide, including the provision of comfort letters and consents in connection with statutory
and regulatory filings and the review of documents filed with the SEC and other capital markets or local
financial reporting regulatory bodies. ‘‘Audit-related fees’’ are fees charged by KPMG Auditores
Independentes for assurance and related services that are reasonably related to the performance of the audit
or review of our financial statements and are not reported under ‘‘Audit fees.’’

165
 INFORMATION FILED WITH SECURITIES REGULATORS

We are subject to various information and disclosure requirements in those countries in which our
securities are traded, and we file financial statements and other periodic reports with the CVM,
BM&FBOVESPA, the SEC and the French securities regulator Autorité des Marchés Financiers.

 Brazil. Vale’s Common Shares and Class A Preferred Shares are listed on BM&FBOVESPA in
São Paulo, Brazil. As a result, we are subject to the information and disclosure requirements of
Brazilian Corporate Law, as amended. We are also subject to the periodic disclosure
requirements of CVM rules applicable to listed companies and to BM&FBOVESPA’s ‘‘Level 1’’
Corporate Governance Requirements. Our CVM filings are available from the CVM at
http://www.cvm.gov.br or from BM&FBOVESPA at http://www.bmfbovespa.com.br. In addition, as
with all of our security filings, they may be accessed at our website, http://www.vale.com.

 United States. As a result of our ADSs being listed on the New York Stock Exchange, we are
subject to the information requirements of the Securities Exchange Act of 1934, as amended, and
accordingly file reports and other information with the SEC. Reports and other information filed
by us with the SEC may be inspected and copied at the public reference facilities maintained by
the SEC at 100 F Street, N.E., Washington, D.C., 20549. You can obtain further information
about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. You
may also inspect Vale’s reports and other information at the offices of the New York Stock
Exchange, 11 Wall Street, New York, New York 10005, on which Vale’s ADSs are listed. Our SEC
filings are also available to the public from the SEC at http://www.sec.gov. For further
information on obtaining copies of Vale’s public filings at the New York Stock Exchange, you
should call (212) 656-5060.

 France. As a result of the admission of the ADSs to listing and trading on NYSE Euronext Paris,
we must comply with certain French periodic and ongoing disclosure rules (for example, annual
report with audited financial statements and interim financial statements). In general, the
Company is deemed to comply with the French periodic and ongoing disclosure rules through its
compliance with U.S. disclosures.

166
 EXHIBITS

Exhibit Number
1 Bylaws of Vale S.A., as amended on May 13, 2015 incorporated by reference to the current
report on Form 6-K furnished to the Securities and Exchange Commission on May 14, 2015
(File No.: 001-15030)
8 List of subsidiaries
10.1 Stock Purchase Agreement, dated as of December 19, 2016, by and among Vale S.A., Vale
Fertilizer Netherlands B.V. and The Mosaic Company, incorporated by reference to
Exhibit 2.1 to Mosaic’s current report on Form 8-K dated December 19, 2016 (File
No. 001-32327)
12.1 Certification of Chief Executive Officer of Vale pursuant to Rules 13a-14 and 15d-14 under
the Securities Exchange Act of 1934
12.2 Certification of Chief Financial Officer of Vale pursuant to Rules 13a-14 and 15d-14 under
the Securities Exchange Act of 1934
13.1 Certification of Chief Executive Officer and Chief Financial Officer of Vale, pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
15.1 Consent of KPMG Auditores Independentes

The amount of long-term debt securities of Vale or its subsidiaries authorized under any individual
outstanding agreement does not exceed 10% of Vale’s total assets on a consolidated basis. Vale hereby agrees
to furnish the SEC, upon its request, a copy of any instruments defining the rights of holders of its long-term
debt or of its subsidiaries for which consolidated or unconsolidated financial statements are required to be
filed.

167
 GLOSSARY

Alumina . . . . . . . . . . . . . . . . Aluminum oxide. It is the main component of bauxite, and extracted from
bauxite ore in a chemical refining process. It is the principal raw material
in the electro-chemical process from which aluminum is produced.
Aluminum . . . . . . . . . . . . . . . A white metal that is obtained in the electro-chemical process of reducing
aluminum oxide.
Ammonium nitrate . . . . . . . . . Primarily the ammonium salt of nitric acid and contains no less than 33%
nitrogen by weight. Predominantly used in agriculture as a high-nitrogen
fertilizer. The compound is used as a component of explosives in mining
and is the main component of ANFO, a popular explosive.
Austenitic stainless steel . . . . . Steel that contains a significant amount of chromium and sufficient nickel
to stabilize the austenite microstructure, giving to the steel good
formability and ductility and improving its high temperature resistance.
They are used in a wide variety of applications, ranging from consumer
products to industrial process equipment, as well as for power generation
and transportation equipment, kitchen appliances and many other
applications where strength, corrosion and high temperature resistance are
required.
A$ . . . . . . . . . . . . . . . . . . . . The Australian dollar.
Bauxite . . . . . . . . . . . . . . . . . A rock composed primarily of hydrated aluminum oxides. It is the
principal ore of alumina, the raw material from which aluminum is made.
Beneficiation . . . . . . . . . . . . . A variety of processes whereby extracted ore from mining is reduced to
particles that can be separated into ore-mineral and waste, the former
suitable for further processing or direct use.
CAD . . . . . . . . . . . . . . . . . . The Canadian dollar.
CFR . . . . . . . . . . . . . . . . . . Cost and freight. Indicates that all costs related to the transportation of
goods up to a named port of destination will be paid by the seller of the
goods.
Coal . . . . . . . . . . . . . . . . . . . Coal is a black or brownish-black solid combustible substance formed by
the decomposition of vegetable matter without access to air. The rank of
coal, which includes anthracite, bituminous coal (both are called hard
coal), sub-bituminous coal, and lignite, is based on fixed carbon, volatile
matter, and heating value.
Cobalt . . . . . . . . . . . . . . . . . Cobalt is a hard, lustrous, silver-gray metal found in ores, and used in the
preparation of magnetic, wear-resistant, and high-strength alloys
(particularly for jet engines and turbines). Its compounds are also used in
the production of inks, paints, catalysts and battery materials.
Coke . . . . . . . . . . . . . . . . . . Coal that has been processed in a coke oven, for use as a reduction agent
in blast furnaces and in foundries for the purposes of transforming iron
ore into pig iron.
Coking Coal . . . . . . . . . . . . . Hard coking coal is the highest value segment of the metallurgical coal
market segments (see metallurgical coal) because of its high strength
factors to form a strong coke.
Concentration . . . . . . . . . . . . Physical, chemical or biological process to increase the grade of the metal
or mineral of interest.

168
 Glossary

Copper . . . . . . . . . . . . . . . . . A reddish brown metallic element. Copper is highly conductive, both

thermally and electrically. It is highly malleable and ductile and is easily
rolled into sheet and drawn into wire.
Copper anode . . . . . . . . . . . . Copper anode is a metallic product of the converting stage of smelting
process that is cast into blocks and generally contains 99% copper grade,
which requires further processing to produce refined copper cathodes.
Copper cathode . . . . . . . . . . . Copper plate with purity higher than or equal to 99.9% that is produced
by an electrolytic process.
Copper concentrate . . . . . . . . Material produced by concentration of copper minerals contained in the
copper ore. It is the raw material used in smelters to produce copper
metal.
CVM . . . . . . . . . . . . . . . . . . The Comissão de Valores Mobiliários (Brazilian Securities and Exchange
Commission).
DWT . . . . . . . . . . . . . . . . . . Deadweight ton. The measurement unit of a vessel’s capacity for cargo,
fuel oil, stores and crew, measured in metric tons of 1,000 kg. A vessel’s
total deadweight is the total weight the vessel can carry when loaded to a
particular load line.
Electrowon copper cathode . . . Refined copper cathode is a metallic product produced by an
electrochemical process in which copper is recovered from an electrolyte
and plated onto an electrode. Electrowon copper cathodes generally
contain 99.99% copper grade.
Ferroalloys . . . . . . . . . . . . . . Manganese ferroalloys are alloys of iron that contain one or more other
chemical elements. These alloys are used to add these other elements into
molten metal, usually in steelmaking. The principal ferroalloys are those of
manganese, silicon and chromium.
FOB . . . . . . . . . . . . . . . . . . Free on board. It indicates that the purchaser pays for shipping, insurance
and all the other costs associated with transportation of the goods to their
destination.
Gold . . . . . . . . . . . . . . . . . . A precious metal sometimes found free in nature, but usually found in
conjunction with silver, quartz, calcite, lead, tellurium, zinc or copper. It is
the most malleable and ductile metal, a good conductor of heat and
electricity and unaffected by air and most reagents.
Grade . . . . . . . . . . . . . . . . . The proportion of metal or mineral present in ore or any other host
material.
Hard metallurgical coal . . . . . . Coal used in the production of steel, comprising multiple segments,
including hard coking coal (see hard coking coal), semi-hard coking coal,
semi-soft coking coal, all used to produce coke to feed a blast furnace;
and, PCI (pulverized coal injection) coal used for direct injection fuel
source into the blast furnace (see PCI).
Hematite Ore . . . . . . . . . . . . Hematite is an iron oxide mineral, but also denotes the high-grade iron ore
type within the iron deposits.
Iron ore pellets . . . . . . . . . . . Agglomerated ultra-fine iron ore particles of a size and quality suitable for
particular iron making processes. Our iron ore pellets range in size from
8 mm to 18 mm.
Itabirite ore . . . . . . . . . . . . . Itabirite is a banded iron formation and denotes the low-grade iron ore
type within the iron deposits.

169
Lump ore . . . . . . . . . . . . . . . Iron ore or manganese ore with the coarsest particle size in the range of
6.35 mm to 50 mm in diameter, but varying slightly between different
mines and ores.
Manganese ore . . . . . . . . . . . A hard brittle metallic element found primarily in the minerals pyrolusite,
hausmannite and manganite. Manganese ore is essential to the production
of virtually all steels and is important in the production of cast iron.
Metallurgical coal . . . . . . . . . . Coal used in the production of steel, comprising multiple segments,
including hard coking coal (see hard coking coal), semi-hard coking coal,
semi-soft coking coal, all used to produce coke to feed a blast furnace;
and, PCI (pulverized coal injection) coal used for direct injection fuel
source into the blast furnace (see PCI). A bituminous hard coal with a
quality that allows the production of coke. Normally used in coke ovens for
metallurgical purposes.
Mineral deposit(s) . . . . . . . . . A mineralized body that has been intersected by a sufficient number of
closely spaced drill holes and/or underground/surface samples to support
sufficient tonnage and grade of metal(s) or mineral(s) of interest to
warrant further exploration-development work.
Mineral resource . . . . . . . . . . A concentration or occurrence of minerals of economic interest in such
form and quantity that could justify an eventual economic extraction. The
location, quantity, grade, geological characteristics and continuity of a
mineral resource are known, estimated or interpreted from specific
geological evidence through drill holes, trenches and/or outcrops. Mineral
resources are sub-divided, in order of increasing geological confidence, into
Inferred, Indicated and Measured Resources.
Mt . . . . . . . . . . . . . . . . . . . . Million metric tons
Mtpy . . . . . . . . . . . . . . . . . . Million metric tons per year.
Nickel . . . . . . . . . . . . . . . . . A silvery white metal that takes on a high polish. It is hard, malleable,
ductile, somewhat ferromagnetic, and a fair conductor of heat and
electricity. It belongs to the iron-cobalt group of metals and is chiefly
valuable for the alloys it forms, such as stainless steel and other corrosion-
resistant alloys.
Nickel laterite . . . . . . . . . . . . Deposits are formed by intensive weathering of olivine-rich ultramafic
rocks such as dunite, peridotite and komatite.
Nickel matte . . . . . . . . . . . . . An intermediate smelter product that must be further refined to obtain
pure metal.
Nickel pig iron . . . . . . . . . . . . A low-grade nickel product, made from lateritic ores, suitable primarily for
use in stainless steel production. Nickel pig iron typically has a nickel
grade of 1.5-6% produced from blast furnaces. Nickel pig iron can also
contain chrome, manganese, and impurities such as phosphorus, sulfur and
carbon. Low grade ferro-nickel (FeNi) produced in China through electric
furnaces is often also referred to as nickel pig iron.
Nickel sulfide . . . . . . . . . . . . Formed through magmatic processes where nickel combines with sulfur to
form a sulfide phase. Pentlandite is the most common nickel sulfide ore
mineral mined and often occurs with chalcopyrite, a common copper
sulfide mineral.

170
 Glossary

Nitric acid . . . . . . . . . . . . . . . Nitric acid is manufactured from ammonia and is a key chemical in the
manufacture of fertilizers. The acid from the absorption towers typically
contains 53-61% nitric acid by mass. Uses for diluted nitric acid other than
fertilizer production include metallurgy, cleaning (in food industries) and
nylon for the textile industry.
Ntk . . . . . . . . . . . . . . . . . . . Net ton (the weight of the goods being transported excluding the weight of
the wagon) kilometer.
Open-pit mining . . . . . . . . . . Method of extracting rock or minerals from the earth by their removal
from an open pit. Open-pit mines for extraction of ore are used when
deposits of commercially useful minerals or rock are found near the
surface; that is, where the overburden (surface material covering the
valuable deposit) is relatively thin or the material of interest is structurally
unsuitable for underground mining.
Oxides . . . . . . . . . . . . . . . . . Compounds of oxygen with another element. For example, magnetite is an
oxide mineral formed by the chemical union of iron with oxygen.
Palladium . . . . . . . . . . . . . . . A silver-white metal that is ductile and malleable, used primarily in
automobile-emissions control devices, and electrical applications.
PCI . . . . . . . . . . . . . . . . . . . Pulverized coal injection. Type of coal with specific properties ideal for
direct injection via the tuyeres of blast furnaces. This type of coal does not
require any processing or coke making, and can be directly injected into
the blast furnaces, replacing lump cokes to be charged from the top of the
blast furnaces.
Pelletizing . . . . . . . . . . . . . . . Iron ore pelletizing is a process of agglomeration of ultra-fines produced in
iron ore exploitation and concentration steps. The three basic stages of the
process are: (i) ore preparation (to get the correct fineness); (ii) mixing
and balling (additive mixing and ball formation); and (iii) firing (to get
ceramic bonding and strength).
PGMs . . . . . . . . . . . . . . . . . Platinum group metals. Consist of platinum, palladium, rhodium,
ruthenium, osmium and iridium.
Phosphate . . . . . . . . . . . . . . . A phosphorous compound, which occurs in natural ores and is used as a
raw material for primary production of fertilizer nutrients, animal feeds
and detergents.
Pig iron . . . . . . . . . . . . . . . . Product of smelting iron ore usually with coke and limestone in a blast
furnace.
Platinum . . . . . . . . . . . . . . . . A dense, precious, grey-white transition metal that is ductile and malleable
and occurs in some nickel and copper ores. Platinum is resistant to
corrosion and is used primarily in jewelry, and automobile-emissions
control devices.
Potash . . . . . . . . . . . . . . . . . A potassium chloride compound, chiefly KCl, used as simple fertilizer and
in the production of mixture fertilizer.
Precious metals . . . . . . . . . . . Metals valued for their color, malleability, and rarity, with a high economic
value driven not only by their practical industrial use, but also by their role
as investments. The widely-traded precious metals are gold, silver, platinum
and palladium.
Primary nickel . . . . . . . . . . . . Nickel produced directly from mineral ores.

171
Probable (indicated) reserves . . Reserves for which quantity and grade and/or quality are computed from
information similar to that used for proven (measured) reserves, but the
sites for inspection, sampling and measurement are farther apart or are
otherwise less adequately spaced. The degree of assurance, although lower
than that for proven (measured) reserves, is high enough to assume
continuity between points of observation.
Proven (measured) reserves . . . Reserves for which (a) quantity is computed from dimensions revealed in
outcrops, trenches, working or drill holes; grade and/or quality are
computed from the results of detailed sampling and (b) the sites for
inspection, sampling and measurement are spaced so closely and the
geologic character is so well defined that size, shape, depth and mineral
content of reserves are well-established.
Real, reais or R$ . . . . . . . . . . The official currency of Brazil is the real (singular) (plural: reais).
Reserves (ore/mineral) . . . . . . The part of a mineral deposit that could be economically and legally
extracted or produced at the time of the reserve determination.
ROM . . . . . . . . . . . . . . . . . . Run-of-mine. Ore in its natural (unprocessed) state, as mined, without
having been crushed.
Secondary or scrap nickel . . . . Stainless steel or other nickel-containing scrap.
Seaborne market . . . . . . . . . . Comprises the total ore trade between countries using ocean bulk vessels.
Silver . . . . . . . . . . . . . . . . . . A ductile and malleable metal used in photography, coins and medal
fabrication, and in industrial applications.
Sinter feed (also known as
fines) . . . . . . . . . . . . . . . . Iron ore fines with particles in the range of 0.15 mm to 6.35 mm in
diameter. Suitable for sintering.
Sintering . . . . . . . . . . . . . . . . The agglomeration of sinter feed, binder and other materials, into a
coherent mass by heating without melting, to be used as metallic charge
into a blast furnace.
Slabs . . . . . . . . . . . . . . . . . . The most common type of semi-finished steel. Traditional slabs measure
10 inches thick and 30-85 inches wide (and average 20 feet long), while the
output of the recently developed ‘‘thin slab’’ casters is two inches thick.
Subsequent to casting, slabs are sent to the hot-strip mill to be rolled into
coiled sheet and plate products.
Stainless steel . . . . . . . . . . . . Alloy steel containing at least 10% chromium and with superior corrosion
resistance. It may also contain other elements such as nickel, manganese,
niobium, titanium, molybdenum, copper, in order to improve mechanical,
thermal properties and service life. It is primarily classified as austenitic
(200 and 300 series), ferritic (400 series), martensitic, duplex or
precipitation hardening grades.
Thermal coal . . . . . . . . . . . . . A type of coal that is suitable for energy generation in thermal power
stations, cement plants and other coal fired ovens/kilns in general industry.
Tpy . . . . . . . . . . . . . . . . . . . Metric tons per year.
Troy ounce . . . . . . . . . . . . . . One troy ounce equals 31.103 grams.
Underground mining . . . . . . . Mineral exploitation in which extraction is carried out beneath the earth’s
surface.
U.S. dollars or US$ . . . . . . . . The United States dollar.

172
 SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it
has duly caused and authorized the undersigned to sign this annual report on its behalf.

VALE S.A.

By: /s/ MURILO PINTO DE OLIVEIRA FERREIRA

Name: Murilo Pinto de Oliveira Ferreira
Title: Chief Executive Officer

By: /s/ LUCIANO SIANI PIRES

Name: Luciano Siani Pires
Title: Chief Financial Officer

Date: April 10, 2017

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 14NOV201111161635
Vale S.A. Financial Statements

Contents

Page
Report of independent registered public accounting firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-3
Management’s Report on Internal Control over Financial Reporting . . . . . . . . . . . . . . . . . . . . . . . F-5
Consolidated Income Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-6
Consolidated Statement of Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-7
Consolidated Statement of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-8
Consolidated Statement of Financial Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-9
Consolidated Statement of Changes in Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-10
Notes to the Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-12
1. Corporate information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-12
2. Basis for preparation of the financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-12
3. Information by business segment and by geographic area . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-17
4. Special events occurred during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-24
5. Costs and expenses by nature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-25
6. Financial results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-27
7. Deferred revenue—Gold stream transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-27
8. Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-29
9. Basic and diluted earnings (loss) per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-32
10. Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-33
11. Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-34
12. Recoverable taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-34
13. Other financial assets and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-35
14. Non-current assets and liabilities held for sale and discontinued operations . . . . . . . . . . . . . . F-35
15. Investments in associates and joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-39
16. Noncontrolling interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-43
17. Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-45
18. Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-46
19. Impairment and onerous contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-49
20. Loans, borrowings and cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-52
21. Liabilities related to associates and joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-56

F-1
 Page
22. Risk management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-62
23. Financial instruments classification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-66
24. Fair value estimate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-69
25. Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-71
26. Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-79
27. Asset retirement obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-79
28. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-80
29. Employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-83
30. Stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-94
31. Related parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-99
32. Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-103
33. Additional information about derivatives financial instruments . . . . . . . . . . . . . . . . . . . . . . . F-105
Members of the Board of Directors, Fiscal Council, Advisory Committees and Executive Officers . . . F-111

F-2
 14NOV201111161635

KPMG Auditores Independentes Central Tel 55 (21) 3515-9400

Av. Almirante Barroso, 52 - 4º Fax 55 (21) 3515-9000
20031-000 - Rio de Janeiro, RJ - Brasil Internet www.kpmg.com.br
Caixa Postal 2888
20001-970 - Rio de Janeiro, RJ - Brasil 13MAR201503062009
Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of Vale S.A.

Rio de Janeiro – RJ

We have audited the accompanying consolidated statements of financial position of Vale S.A. and
subsidiaries (‘‘Vale’’ or ‘‘the Company’’) as of December 31, 2016 and 2015, and the related consolidated
statements of income, comprehensive income, changes in equity and cash flows for each of the years in the
three-year period ended December 31, 2016. We also have audited Vale’s internal control over financial
reporting as of December 31, 2016, based on criteria established in Internal Control—Integrated Framework
(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Vale’s
management is responsible for these consolidated financial statements, for maintaining effective internal
control over financial reporting, and for its assessment of the effectiveness of internal control over financial
reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting.
Our responsibility is to express an opinion on these consolidated financial statements and an opinion on
Vale’s internal control over financial reporting based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement and whether
effective internal control over financial reporting was maintained in all material respects. Our audits of the
consolidated financial statements included examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles used and significant estimates made
by management, and evaluating the overall financial statement presentation. Our audit of internal control
over financial reporting included obtaining an understanding of internal control over financial reporting,
assessing the risk that a material weakness exists, and testing and evaluating the design and operating
effectiveness of internal control based on the assessed risk. Our audits also included performing such other
procedures as we considered necessary in the circumstances. We believe that our audits provides a reasonable
basis for our opinions.

KPMG Auditores Independentes, uma sociedade simples brasileira e KPMG Auditores Independentes, a Brazilian entity and a member firm
firma-membro da rede KPMG de firmas-membro independentes e of the KPMG network of independent member firms affiliated with
afiliadas à KPMG International Cooperative (“KPMG International”), KPMG International Cooperative (“KPMG International”), a Swiss
uma entidade suíça. entity. 13MAR201503055987

F-3
 14NOV201111161635

13MAR201503323602
A company’s internal control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles. A company’s internal control
over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation
of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and
directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the
financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions, or that the degree of compliance with
the policies or procedures may deteriorate.

In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the financial position of Vale S.A. and subsidiaries as of December 31, 2016 and 2015, and the
results of its operations and its cash flows for each of the years in the three-year period ended December 31,
2016, in conformity with International Financial Reporting Standards as issued by the International
Accounting Standards Board. Also in our opinion, Vale maintained, in all material respects, effective internal
control over financial reporting as of December 31, 2016, based on criteria established in Internal Control—
Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO).

/s/ KPMG Auditores Independentes

KPMG Auditores Independentes

Rio de Janeiro, Brazil

February 22, 2017

KPMG Auditores Independentes, uma sociedade simples brasileira e KPMG Auditores Independentes, a Brazilian entity and a member firm
firma-membro da rede KPMG de firmas-membro independentes e of the KPMG network of independent member firms affiliated with
afiliadas à KPMG International Cooperative (“KPMG International”), KPMG International Cooperative (“KPMG International”), a Swiss
uma entidade suíça. entity. 13MAR201503055987

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 14NOV201111161635
Management’s Report on Internal Control over Financial Reporting

The management of Vale S.A (Vale) is responsible for establishing and maintaining adequate internal
control over financial reporting.

The Vale’s internal control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles. The company’s internal control
over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
company; (ii) provide reasonable assurance that transactions are recorded to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of
the company are being made only in accordance with authorizations of management and directors of the
company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company’s assets that could have a material effect on the financial
statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of the effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions, and that the degree of compliance
with the policies or procedures may deteriorate.

Vale’s management has assessed the effectiveness of the company’s internal control over financial
reporting as of December 31, 2016 based on the criteria established in Internal Control—Integrated
Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO). Based on such assessment and criteria, Vale’s management has concluded that the company’s
internal control over financial reporting are effective as of December 31, 2016.

The effectiveness of the company’s internal control over financial reporting as of December 31, 2016
has been audited by KPMG Auditores Independentes, an independent registered public accounting firm, as
stated in their report which appears herein.

February 22nd, 2017

/s/ Murilo Ferreira

Murilo Ferreira
Chief Executive Officer

/s/ Luciano Siani

Luciano Siani
Chief Financial Officer and Investors Relations

F-5
 14NOV201111161635
Consolidated Income Statement
In millions of United States dollars, except earnings per share data

Year ended December 31

Notes 2016 2015 2014
Continuing operations
Net operating revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . 3(d) 27,488 23,384 35,124
Cost of goods sold and services rendered . . . . . . . . . . . . . . . . . 5(a) (17,650) (18,751) (22,790)
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,838 4,633 12,334
Operating expenses
Selling and administrative expenses . . . . . . . . . . . . . . . . . . . . 5(b) (507) (612) (1,036)
Research and evaluation expenses . . . . . . . . . . . . . . . . . . . . . (319) (395) (662)
Pre operating and operational stoppage . . . . . . . . . . . . . . . . . (453) (942) (975)
Other operating expenses, net . . . . . . . . . . . . . . . . . . . . . . . 5(c) (267) (207) (1,023)
(1,546) (2,156) (3,696)
Impairment of non-current assets and onerous contracts . . . . . . . . 19 (1,174) (8,769) (99)
Results on measurement or sale of non-current assets . . . . . . . . . 14 (66) 61 (167)
Operating income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,052 (6,231) 8,372
Financial income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 7,968 7,792 3,704
Financial expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 (6,125) (18,446) (9,722)
Equity results in associates and joint ventures . . . . . . . . . . . . . . 15 309 (445) 501
Impairment and other results in associates and joint ventures . . . . . 15, 19 and 21 (1,220) (349) (61)
Net income (loss) before income taxes . . . . . . . . . . . . . . . . . . . . 7,984 (17,679) 2,794
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Current tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (943) (332) (1,060)
Deferred tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,838) 5,581 (543)
(2,781) 5,249 (1,603)
Net income (loss) from continuing operations . . . . . . . . . . . . . . . 5,203 (12,430) 1,191
Loss attributable to noncontrolling interests . . . . . . . . . . . . . . . (8) (501) (308)
Net income (loss) from continuing operations attributable to Vale’s
stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,211 (11,929) 1,499

Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Loss from discontinued operations . . . . . . . . . . . . . . . . . . . . (1,227) (190) (838)
Income attributable to noncontrolling interests . . . . . . . . . . . . . 2 10 4
Loss from discontinued operations attributable to Vale’s
stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,229) (200) (842)

Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,976 (12,620) 353

Loss attributable to noncontrolling interests . . . . . . . . . . . . . . . (6) (491) (304)
Net income (loss) attributable to Vale’s stockholders . . . . . . . . . . 3,982 (12,129) 657

Earnings (loss) per share attributable to Vale’s stockholders:

Basic and diluted earnings (loss) per share: . . . . . . . . . . . . . . . . 9
Preferred share (US$) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.77 (2.35) 0.13
Common share (US$) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.77 (2.35) 0.13

The accompanying notes are an integral part of these financial statements.

F-6
 14NOV201111161635
Consolidated Statement of Comprehensive Income
In millions of United States dollars

Year ended December 31

2016 2015 2014
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,976 (12,620) 353
Other comprehensive income (loss):
Items that will not be reclassified subsequently to the income statement
Cumulative translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,460 (18,128) (7,436)
Retirement benefit obligations
Gross balance for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (112) 66 (279)
Effect of taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 3 85
Equity results in associates and joint ventures, net of taxes . . . . . . . . . . . . . . . . . – – 2
(70) 69 (192)
Total items that will not be reclassified subsequently to the income statement . . . . . . . . . 6,390 (18,059) (7,628)
Items that may be reclassified subsequently to the income statement
Cumulative translation adjustments
Gross balance for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,603) 9,340 3,407
Effect of taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (74) 904 –
Transfer of realized results to net income . . . . . . . . . . . . . . . . . . . . . . . . . . . (75) – –
(3,752) 10,244 3,407
Available-for-sale financial instruments
Gross balance for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1 (4)
Transfer of realized results to net income, net of taxes . . . . . . . . . . . . . . . . . . . . – – 4
1 1 –
Cash flow hedge
Gross balance for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 828 (290)
Effect of taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1) (7) (3)
Equity results in associates and joint ventures, net of taxes . . . . . . . . . . . . . . . . . 5 (5) (1)
Transfer of realized results to net income, net of taxes . . . . . . . . . . . . . . . . . . . . (3) (369) (122)
7 447 (416)
Total of items that may be reclassified subsequently to the income statement . . . . . . . . . (3,744) 10,692 2,991
Total comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,622 (19,987) (4,284)

Comprehensive income (loss) attributable to noncontrolling interests . . . . . . . . . . . . . . . 111 (543) (330)

Comprehensive income (loss) attributable to Vale’s stockholders . . . . . . . . . . . . . . . . . . 6,511 (19,444) (3,954)

The accompanying notes are an integral part of these financial statements.

F-7
 14NOV201111161635
Consolidated Statement of Cash Flows
In millions of United States dollars

Year ended December 31

2016 2015 2014
Cash flow from operating activities:
Net income (loss) before income taxes from continuing operations . . . . . . . . . . . . . . . . . 7,984 (17,679) 2,794
Continuing operations adjustments for:
Equity results in associates and joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . (309) 445 (501)
Results on measurement or sale of non-current assets . . . . . . . . . . . . . . . . . . . . . . . (84) (213) 258
Impairment and others results in associates and joint ventures . . . . . . . . . . . . . . . . . . 1,220 349 61
Impairment of non-current assets and onerous contracts . . . . . . . . . . . . . . . . . . . . . 1,174 8,769 99
Depreciation, amortization and depletion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,487 3,719 3,869
Financial results, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,843) 10,654 6,018
Changes in assets and liabilities:
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,744) 1,671 2,567
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 288 (217) (467)
Suppliers and contractors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 243 658 1,014
Payroll and related charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133 (578) (106)
Other taxes assets and liabilities, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (109) (222) (252)
Deferred revenue—Gold stream (note 7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 524 532 –
Other assets and liabilities, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 591 (304) 256
Cash provided from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,555 7,584 15,610
Interest on loans and borrowings paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,663) (1,457) (1,539)
Derivatives received (paid), net (note 25) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,602) (1,202) (179)
Interest on participative stockholders’ debentures paid . . . . . . . . . . . . . . . . . . . . . . (84) (65) (112)
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (388) (544) (491)
Income taxes—Settlement program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (417) (384) (494)
Net cash provided by operating activities from continuing operations . . . . . . . . . . . . . . . 6,401 3,932 12,795
Net cash provided by operating activities from discontinued operations . . . . . . . . . . . . . . 180 559 309
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,581 4,491 13,104
Cash flow from investing activities continuing:
Financial investments redeemed (invested) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 308 (148)
Loans and advances—net receipts (payments) . . . . . . . . . . . . . . . . . . . . . . . . . . . (210) (17) 364
Guarantees and deposits—net receipts (payments) . . . . . . . . . . . . . . . . . . . . . . . . . (41) (67) 78
Additions to investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (239) (65) (271)
Additions to property, plant and equipment and intangible (note 3(b)) . . . . . . . . . . . . . (4,951) (8,114) (11,777)
Dividends and interest on capital received from associates and joint ventures . . . . . . . . . 193 318 568
Proceeds from disposal of assets and investments . . . . . . . . . . . . . . . . . . . . . . . . . . 543 1,456 1,199
Proceeds from gold stream transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 276 368 –
Net cash used in investing activities from continuing operations . . . . . . . . . . . . . . . . . . (4,417) (5,813) (9,987)
Net cash used in investing activities from discontinued operations . . . . . . . . . . . . . . . . . (281) (346) (278)
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,698) (6,159) (10,265)
Cash flow from financing activities from continuing operations:
Loans and borrowings (i)
Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,994 4,995 2,341
Repayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,717) (2,753) (1,864)
Transactions with stockholders:
Dividends and interest on capital paid to Vale’s stockholders . . . . . . . . . . . . . . . . . . . (250) (1,500) (4,200)
Dividends and interest on capital paid to noncontrolling interest . . . . . . . . . . . . . . . . . (291) (15) (66)
Transactions with noncontrolling stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . (17) 1,049 –
Net cash provided by (used in) financing activities from continuing operations . . . . . . . . . (1,281) 1,776 (3,789)
Net cash provided by (used in) financing activities from discontinuing operations . . . . . . . . (17) (73) (72)
Net cash provided by (used in) financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . (1,298) 1,703 (3,861)
Increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . 585 35 (1,022)
Cash and cash equivalents in the beginning of the year . . . . . . . . . . . . . . . . . . . . . . 3,591 3,974 5,321
Effect of exchange rate changes on cash and cash equivalents . . . . . . . . . . . . . . . . . . 86 (418) (325)
Cash and cash equivalents at end of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,262 3,591 3,974
Non-cash transactions:
Additions to property, plant and equipment—capitalized loans and borrowing costs . . . . . . 653 761 588

(i) Includes transactions with related parties: Bradesco, Banco do Brasil and Banco Nacional do Desenvolvimento Econômico e Social—
BNDES.
The accompanying notes are an integral part of these financial statements.

F-8
 14NOV201111161635
Consolidated Statement of Financial Position
In millions of United States dollars

December 31, December 31,

Notes 2016 2015
Assets
Current assets
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 4,262 3,591
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 3,663 1,476
Other financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 363 219
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 3,349 3,528
Prepaid income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159 900
Recoverable taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 1,625 1,404
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 557 311
13,978 11,429
Non-current assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 8,589 4,044
22,567 15,473
Non-current assets
Judicial deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28(c) 962 882
Other financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 628 282
Prepaid income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 527 471
Recoverable taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 727 501
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8(a) 7,343 7,904
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 274 613
10,461 10,653
Investments in associates and joint ventures . . . . . . . . . . . . . . . . . . . . . . . 15 3,696 2,940
Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 6,871 5,324
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 55,419 54,102
76,447 73,019
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99,014 88,492
Liabilities
Current liabilities
Suppliers and contractors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,630 3,365
Loans and borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 1,660 2,506
Other financial liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 1,086 2,551
Taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 657 595
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171 241
Liabilities related to associates and joint ventures . . . . . . . . . . . . . . . . . . . . 21 292 –
Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 952 540
Dividends and interest on capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 798 –
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 896 640
10,142 10,438
Liabilities associated with non-current assets held for sale . . . . . . . . . . . . . . . 14 1,090 107
11,232 10,545
Non-current liabilities
Loans and borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 27,662 26,347
Other financial liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 2,127 2,125
Taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,961 4,085
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8(a) 1,700 1,670
Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 5,748 5,309
Liabilities related to associates and joint ventures . . . . . . . . . . . . . . . . . . . . 21 785 –
Deferred revenue—Gold stream . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 2,090 1,749
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,685 958
46,758 42,243
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57,990 52,788
Stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Equity attributable to Vale’s stockholders . . . . . . . . . . . . . . . . . . . . . . . . 39,042 33,589
Equity attributable to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . 1,982 2,115
Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,024 35,704
Total liabilities and stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . 99,014 88,492

The accompanying notes are an integral part of these financial statements.

F-9
 14NOV201111161635
Consolidated Statement of Changes in Equity
In millions of United States dollars

Results from Unrealized Equity Equity

Results on operation with fair value Cumulative attributable to attributable to Total
Share conversion noncontrolling Profit Treasury gain translation Retained Vale’s noncontrolling stockholder’s
capital of shares interest reserves stocks (losses) adjustments earnings stockholders interests equity

Balance at December 31, 2013 . . . . . . . . . . . . . . . . 60,578 (152) (400) 29,566 (4,477) (1,202) (20,588) – 63,325 1,611 64,936
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . – – – – – – – 657 657 (304) 353
Other comprehensive income:
Retirement benefit obligations . . . . . . . . . . . . . . . – – – – – (192) – – (192) – (192)
F-10

Cash flow hedge . . . . . . . . . . . . . . . . . . . . . . – – – – – (416) – – (416) – (416)

Translation adjustments . . . . . . . . . . . . . . . . . . – – – (2,237) – 97 (2,098) 235 (4,003) (26) (4,029)
Transactions with stockholders:
Dividends and interest on capital of Vale’s stockholders . – – – – – – – (4,200) (4,200) – (4,200)
Dividends of noncontrolling interest . . . . . . . . . . . . – – – – – – – – – (8) (8)
Acquisitions and disposal of participation of
noncontrolling interest . . . . . . . . . . . . . . . . . – – (49) – – – – – (49) (201) (250)
Capitalization of noncontrolling interest advances . . . . – – – – – – – – – 127 127
Capitalization of reserves . . . . . . . . . . . . . . . . . 1,036 – – (1,036) – – – – – – –
Cancellation of treasury stock . . . . . . . . . . . . . . . – – – (3,000) 3,000 – – – – – –
Realization of reserves . . . . . . . . . . . . . . . . . . . – – – (3,387) – – – 3,387 – – –
Appropriation to undistributed retained earnings . . . . . – – – 79 – – – (79) – – –
Balance at December 31, 2014 . . . . . . . . . . . . . . . . 61,614 (152) (449) 19,985 (1,477) (1,713) (22,686) – 55,122 1,199 56,321
Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – – – – – – – (12,129) (12,129) (491) (12,620)
Other comprehensive income:
Retirement benefit obligations . . . . . . . . . . . . . . . – – – – – 70 – – 70 (1) 69
Cash flow hedge . . . . . . . . . . . . . . . . . . . . . . – – – – – 447 – – 447 – 447
Available-for-sale financial instruments . . . . . . . . . . – – – – – 1 – – 1 – 1
Translation adjustments . . . . . . . . . . . . . . . . . . – – – (5,371) – 203 (2,665) – (7,833) (51) (7,884)

The accompanying notes are an integral part of these financial statements.

 14NOV201111161635
Consolidated Statement of Changes in Equity (Continued)
In millions of United States dollars

Results from Unrealized Equity Equity

Results on operation with fair value Cumulative attributable to attributable to Total
Share conversion noncontrolling Profit Treasury gain translation Retained Vale’s noncontrolling stockholder’s
capital of shares interest reserves stocks (losses) adjustments earnings stockholders interests equity

Transactions with stockholders:

Dividends and interest on capital of Vale’s stockholders . – – – (1,500) – – – – (1,500) – (1,500)
Dividends of noncontrolling interest . . . . . . . . . . . . – – – – – – – – – (32) (32)
Acquisitions and disposal of participation of
F-11

noncontrolling interest . . . . . . . . . . . . . . . . . – – (253) – – – (336) – (589) 1,455 866

Capitalization of noncontrolling interest advances . . . . – – – – – – – – – 36 36
Appropriation to undistributed retained earnings . . . . . — – – (12,129) – – – 12,129 – – –
Balance at December 31, 2015 . . . . . . . . . . . . . . . . 61,614 (152) (702) 985 (1,477) (992) (25,687) – 33,589 2,115 35,704
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . – – – – – – – 3,982 3,982 (6) 3,976
Other comprehensive income:
Retirement benefit obligations . . . . . . . . . . . . . . . – – – – – (70) – – (70) – (70)
Cash flow hedge . . . . . . . . . . . . . . . . . . . . . . – – – – – 7 – – 7 – 7
Available-for-sale financial instruments . . . . . . . . . . – – – – – 1 – – 1 – 1
Translation adjustments . . . . . . . . . . . . . . . . . . – – – 195 – (93) 2,387 102 2,591 117 2,708
Transactions with stockholders:
Dividends and interest on capital of Vale’s stockholders . – – – – – – – (1,061) (1,061) – (1,061)
Dividends of noncontrolling interest . . . . . . . . . . . . – – – – – – – – – (268) (268)
Acquisitions and disposal of participation of
noncontrolling interest . . . . . . . . . . . . . . . . . – – 3 – – – – – 3 (1) 2
Capitalization of noncontrolling interest advances . . . . – – – – – – – – – 25 25
Appropriation to undistributed retained earnings . . . . . – – – 3,023 – – – (3,023) – – –
Balance at December 31, 2016 . . . . . . . . . . . . . . . . 61,614 (152) (699) 4,203 (1,477) (1,147) (23,300) – 39,042 1,982 41,024

The accompanying notes are an integral part of these financial statements.

 14NOV201111161635
Notes to the Financial Statements
Expressed in millions of United States dollar, unless otherwise stated

1. Corporate information

Vale S.A. (the ‘‘Parent Company’’) is a public company headquartered at 700, Avenida das Américas,
Rio de Janeiro, Brazil with securities traded on the stock exchanges of São Paulo—BM&F BOVESPA (Vale3
and Vale5), New York—NYSE (VALE and VALE.P), Paris—NYSE Euronext (Vale3 and Vale5) and
Madrid—LATIBEX (XVALO and XVALP).

Vale and its direct and indirect subsidiaries (‘‘Vale’’, ‘‘Group’’ or ‘‘Company’’) are global producers of
iron ore and iron ore pellets, key raw materials for steelmaking, and producers of nickel, which is used to
produce stainless steel and metal alloys employed in the production of several products. The Group also
produces copper, metallurgical and thermal coal, potash, phosphates and other fertilizer nutrients, manganese
ore, ferroalloys, platinum group metals, gold, silver and cobalt. The information by segment is presented in
note 3.

2. Basis for preparation of the financial statements

a) Statement of compliance

The consolidated financial statements of the Company (‘‘financial statements’’) present the accounts of
the Group and have been prepared in accordance with the International Financial Reporting Standards
(‘‘IFRS’’) as issued by the International Accounting Standards Board (‘‘IASB’’).

b) Basis of presentation

The financial statements have been prepared under the historical cost convention as adjusted to
reflect: (i) the fair value of financial instruments measured at fair value through income statement or
available-for-sale financial instruments measured at fair value through the statement of comprehensive
income; and (ii) impairment of assets.

The comparative information for the years ended December 31, 2015 and 2014 was re-presented for
the purposes of applying IFRS 5 ‘‘Non-current assets held for sale and discontinued operations’’ after
approval by the Board of Directors of the sale of the fertilizers assets, as presented in Note 14.

Subsequent events were evaluated through February 22, 2017, which is the date the financial
statements were approved by the Board of Directors.

c) Consolidation and investments in associates and joint ventures

The financial statements reflect the assets, liabilities and transactions of the Parent Company and its
direct and indirect controlled entities (‘‘subsidiaries’’). Intercompany balances and transactions, which include
unrealized profits, are eliminated. Subsidiaries over which control is achieved through other means, such as
stockholders agreement, are also consolidated even if the Company does not own a majority of the voting
capital.

F-12
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

2. Basis for preparation of the financial statements (Continued)

The entities over which the Company has joint control (‘‘joint ventures’’) or significant influence, but
not control (‘‘associates’’) are presented in note 15. Those investments are accounted for using the equity
method. For interests in joint arrangements not classified as ‘joint ventures’ (‘‘joint operations’’), the Company
recognizes its share of assets, liabilities and net income.

Unrealized gains on downstream or upstream transactions between the Company and its associates
and joint ventures are eliminated fully or proportionately to the Company’s interest.

The material consolidated entities in each business segment of are as follows:

%
Noncontrolling
Principal activity % Voting interest or
Location /Business % ownership capital other investors
Direct and indirect
subsidiaries
Companhia Portuária da
Baı́a de Sepetiba . . . . . . Brazil Iron ore 100.0% 100.0% 0.0%
Mineração Corumbaense
Reunida S.A. . . . . . . . Brazil Iron ore and manganese 100.0% 100.0% 0.0%
Minerações Brasileiras
Reunidas S.A. (‘‘MBR’’) . Brazil Iron ore 62.5% 98.3% 37.5%
Salobo Metais S.A. . . . . . Brazil Copper 100.0% 100.0% 0.0%
Nacala Corridor Holding
Netherlands B.V. . . . . . Netherlands Coal 100.0% 100.0% 0.0%
PT Vale Indonesia . . . . . . Indonesia Nickel 59.2% 59.2% 40.8%
Vale International
Holdings GmbH . . . . . . Austria Holding and research 100.0% 100.0% 0.0%
Vale Canada Limited . . . . Canada Nickel 100.0% 100.0% 0.0%
Vale International S.A. . . . Switzerland Trading and holding 100.0% 100.0% 0.0%
Vale Malaysia Minerals Sdn.
Bhd. . . . . . . . . . . . . Malaysia Iron ore 100.0% 100.0% 0.0%
Vale Manganês S.A. . . . . . Brazil Manganese and ferroalloys 100.0% 100.0% 0.0%
Vale Moçambique S.A. . . . Mozambique Coal 95.0% 95.0% 5.0%
Vale Nouvelle
Caledonie S.A.S. . . . . . New Caledonia Nickel 95.0% 95.0% 5.0%
Vale Oman Distribution
Center LLC . . . . . . . . Oman Iron ore and pelletizing 100.0% 100.0% 0.0%
Vale Oman Pelletizing
Company LLC . . . . . . . Oman Pelletizing 70.0% 70.0% 30.0%

Investments held by investors in Vale’s subsidiaries are classified as noncontrolling interests. The
Company treats transactions with noncontrolling interests as transactions with equity owners of the Group and
as described in note 16.

For purchases of noncontrolling interests, the difference between any amount paid and the portion
acquired of the carrying value of net assets of the subsidiary is recorded in stockholders’ equity. Gains or
losses on disposals of noncontrolling interest are also recorded in stockholders’ equity.

F-13
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

2. Basis for preparation of the financial statements (Continued)

As explained in note 14, the Fertilizer Segment is presented as discontinued operations, which
includes the following subsidiaries:
% Noncontrolling interest
Location Principal activity % ownership % Voting capital or other investors
Direct and indirect
subsidiaries
Compañia Minera Miski
Mayo S.A.C. . . . . . . . Peru Fertilizers 40.0% 51.0% 60.0%
Vale Fertilizantes S.A. . . . Brazil Fertilizers 100.0% 100.0% 0.0%

d) Functional currency and presentation currency

The financial statements of the Group and its associates and joint ventures are measured using the
currency of the primary economic environment in which the entity operates (‘‘functional currency’’), which in
the case of the Parent Company is the Brazilian real (‘‘BRL’’ or ‘‘R$’’). For presentation purposes, these
financial statements are presented in United States dollar (‘‘USD’’ or ‘‘US$’’) as the Company believes that
this is how international investors analyze the financial statements.

Operations in other currencies are translated into the functional currency using the actual exchange
rates in force on the respective transactions dates. The foreign exchange gains and losses resulting from the
translation at the exchange rates in force at the end of the year are recognized in the income statement as
financial expense or income. The exceptions are transactions for which gains and losses are recognized in the
statement of comprehensive income.

The income statement and balance sheet of the Group’s entities which functional currency is different
from the presentation currency are translated into the presentation currency as follows: (i) assets, liabilities
and stockholders’ equity (except components described in item (iii) are translated at the closing rate at the
balance sheet date; (ii) income and expenses are translated at the average exchange rates, except for specific
transactions that, considering their significance, are translated at the rate at the transaction date and;
(iii) capital, capital reserves and treasury stock are translated at the rate at the date of each transaction. All
resulting exchange differences are recognized in the comprehensive income as cumulative translation
adjustment, and transferred to the income statement when the operations are realized.

The exchange rates used by the Group for major currencies to translate its operations are as follows:

Average rate for

Closing rate the year ended
2016 2015 2014 2016 2015 2014

Brazilian Reais (‘‘R$’’) . . . . . . . . . . . . . . . . 3.2591 3.9048 2.6562 3.4833 3.3387 2.3547

Canadian dollar (‘‘CAD’’) . . . . . . . . . . . . . . 2.4258 2.8171 2.2920 2.6280 2.6020 2.1308
Australian dollar (‘‘AUD’’) . . . . . . . . . . . . . . 2.3560 2.8532 2.1765 2.5876 2.4979 2.1205
Euro (‘‘EUR’’ or ‘‘A’’) . . . . . . . . . . . . . . . . . 3.4384 4.2504 3.2270 3.8543 3.6999 3.1205

F-14
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

2. Basis for preparation of the financial statements (Continued)

e) Significant accounting policies

The accounting policies applied in financial statements are consistent with those adopted and disclosed
in the financial statements of prior years. The Company has not early adopted any standards and
interpretations that have been issued or amended but which are not yet in force. The accounting policies of
subsidiaries, affiliates and joint ventures are adjusted to ensure consistency with the policies adopted by Vale.

Significant and relevant accounting policies for the understanding of the financial statements were
included in the respective notes, with a summary of the recognition and measurement basis used by the
Company.

The brief description of the recent accounting pronouncements issued by the IASB, which are not yet
in force, and the current assessment did by the Company of the impacts on its financial statements, subject to
changes due to the more analyzes in progress, are detailed below:

– IFRS 9 Financial instrument—In July 2014, the IASB issued the final version of IFRS 9
Financial Instruments that replaces IAS 39 Financial Instruments: Recognition and Measurement.
This standard brings new approaches about: (i) classification and measurement of financial assets
and liabilities, (ii) impairment and (iii) hedge accounting. This standard shall apply for annual
periods beginning on or after January 1, 2018.

The Company does not plan the early adoption of this new standard. Based on the history of financial
instruments traded by the Company, it is not expected significant impacts on financial statements by applying
the IFRS 9 requirements.

– IFRS 15 Revenue from Contracts with Customers—In May 2014, the IASB issued IFRS 15, which
replaces IAS 18 Revenues and the related interpretations. IFRS 15 introduces the five-step model
for revenue recognition from contract with a customer. The new standard is based on the
principle that revenue is recognized when the control of a good or service to be transferred to a
customer in an amount that reflects the consideration to which the entity expects to be entitled in
exchange for those goods or services. This standard shall apply for annual periods beginning on
or after January 1, 2018.

The Company plans to adopt the new standard on the required effective date using the full
retrospective method with the practical expedients approach for concluded contracts. During 2016, the
Company performed a preliminary assessment of IFRS 15, which is subject to changes arising from a more
detailed analysis of the contracts that are in process. Based on these preliminary analyzes, management is
evaluating whether the freight service should be considered a separate performance obligation or not.

The Company expects to disclose quantitative information, if any, prior to the adoption of the
standard.

F-15
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

2. Basis for preparation of the financial statements (Continued)

– IFRS 16 Lease—In January 2016, the IASB issued IFRS 16, which replaces IAS 17 Leases and
related interpretations. The IFRS 16 set forth that in all leases with a maturity of more than
12 months, with limited exceptions, the lessee must recognize the lease liability in the balance
sheet at the present value of the payments, plus costs directly allocated and at the same time that
it recognizes a right of use corresponding to the asset. During the term of the lease, the lease
liability is adjusted to reflect interest and payment made and the right to use is amortized, similar
to the financial lease settled up in accordance with IAS 17. This standard shall apply for annual
periods beginning on or after January 1, 2019.

The Company has not yet quantified the impact of adopting IFRS 16 on its assets and liabilities. The
quantitative effect of the adoption of IFRS 16 will depend specifically on the Company´s decision related to
the method of transition, the use of practical expedients approach and exemptions for recognition, and any
additional leases that Company will hold. The Company expects to disclose its transition approach and
quantitative information prior to adoption, planned for January 1, 2019.

– IAS 7 Amendments (Disclosure Initiative)—The amendments to IAS 7 Statement of Cash Flows

are part of the IASB’s Disclosure Initiative and require an entity to provide disclosures that
enable users of financial statements to evaluate cash flows and non-cash changes in liabilities
arising from financing activities. On initial application of the amendment, entities are not
required to provide comparative information for preceding periods. These amendments are
effective for annual periods beginning on or after 1 January 2017, with early application
permitted. Application of the amendments will result in additional disclosures provided by the
Group. The Company did not early adopt this amendment.

f) Critical accounting estimates and judgments

The preparation of financial statements requires the use of certain critical accounting estimates,
assumptions and judgments by the management of the Company. These estimates are based on the best
knowledge and information existing at the balance sheet date. Changes in facts and circumstances may lead to
the revision of these estimates. Actual future results may differ from the estimates.

F-16
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

2. Basis for preparation of the financial statements (Continued)

The significant estimates, assumptions and judgments used by Company in these financial statements
are as follows:

Note Significant estimates, assumptions and judgments

3(c) Consolidation
7 Deferred revenue—Gold stream
8 Deferred income taxes
18 Mineral reserves and mine useful life
19 Impairment of non-current assets
21 Liabilities related to associates and joint ventures
24 Fair values of derivatives and others financial instruments
27 Asset retirement obligation
28 Litigation
29 Post-retirement benefits for employees

3. Information by business segment and by geographic area

The Company divided its operations into five reportable segments: Ferrous Minerals, Coal, Base
Metals, Fertilizers (presented as discontinued operations) and Others. The segments are aligned with products
and reflect the structure used by Management to evaluate group performance. The responsible bodies for
making operational decisions, allocating resources and evaluating performance include the Executive Boards
and the Board of Directors, which use adjusted EBITDA as a measure of performance.

The information presented to the Executive Board on the performance of each segment is derived
from the accounting records, adjusted for reallocations between segments.

The main activities of the operating segments are as follows:

Ferrous minerals—Ferrous minerals comprises the production and extraction of ferrous minerals, as
iron ore fines, iron ore pellets and its logistic services (railroads, ports and terminals), manganese and
ferroalloys and others ferrous products and services.

Coal—Coal comprises the extraction of metallurgical and thermal coal and its logistic services
(railroads, ports and terminals).

Base metals—Base metals include the production and extraction of non-ferrous minerals, and are
presented as nickel and its by-products (ferro-nickel, copper, gold, precious metals and others) and copper
(copper concentrated).

Fertilizers (Discontinued operations)—Fertilizers include the production of the three major groups of
nutrients (potash, phosphate and nitrogen) and other fertilizers products. The group of assets related to this
segment is classified as ‘‘Non-current assets and liabilities held for sale’’ (note 14).

Others—The segments of others comprise sales and expenses of other products, services and
investments in joint ventures and associate in other business.

F-17
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated
3. Information by business segment and by geographic area (Continued)

a) Adjusted EBITDA

The definition of adjusted EBITDA for the Company is the operating income or loss excluding (i) the depreciation, depletion and amortization,
(ii) results on measurement or sales of non-current assets, (iii) impairment, (iv) onerous contracts and plus (v) dividends received from associates and
joint ventures.

Year ended December 31, 2016

Sales,
Cost of goods administrative Research Pre operating Dividends
F-18

Net sold and and other and and received from

operating services operating evaluation operational associates and Adjusted
revenue rendered expenses expenses stoppage joint ventures EBITDA
Ferrous minerals
Iron ore . . . . . . . . . . . . . . . . . . . . . 15,784 (6,622) (486) (91) (150) 10 8,445
Pellets . . . . . . . . . . . . . . . . . . . . . . 3,827 (2,002) (73) (13) (22) 103 1,820
Ferroalloys and manganese . . . . . . . . . . 302 (231) (4) — (11) — 56
Other ferrous products and services . . . . . 438 (269) (8) (2) (4) — 155
20,351 (9,124) (571) (106) (187) 113 10,476
Coal . . . . . . . . . . . . . . . . . . . . . . . . 839 (872) 35 (15) (41) — (54)
Base metals
Nickel and other products . . . . . . . . . . 4,472 (3,204) (95) (78) (114) 4 985
Copper . . . . . . . . . . . . . . . . . . . . . 1,667 (924) (25) (5) — — 713
Other base metals products . . . . . . . . . — — 150 — — — 150
6,139 (4,128) 30 (83) (114) 4 1,848
Others . . . . . . . . . . . . . . . . . . . . . . . 159 (259) (157) (116) (1) 76 (298)
Total of continuing operations . . . . . . . . . 27,488 (14,383) (663) (320) (343) 193 11,972

Discontinued operations (Fertilizers) . . . . . 1,875 (1,545) (87) (22) (16) 4 209

Total . . . . . . . . . . . . . . . . . . . . . . . . 29,363 (15,928) (750) (342) (359) 197 12,181
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

Year ended December 31, 2015

Sales,
Cost of goods administrative Research Pre operating Dividends
Net sold and and other and and received from
operating services operating evaluation operational associates and Adjusted
revenue rendered expenses expenses stoppage joint ventures EBITDA
F-19

Ferrous minerals
Iron ore . . . . . . . . . . . . . . . . . . . . . 12,330 (7,604) (398) (121) (124) 22 4,105
Pellets . . . . . . . . . . . . . . . . . . . . . . 3,600 (2,121) 9 (4) (24) 225 1,685
Ferroalloys and manganese . . . . . . . . . . 162 (175) 1 — (19) — (31)
Other ferrous products and services . . . . . 470 (341) 8 (3) (2) 8 140
16,562 (10,241) (380) (128) (169) 255 5,899
Coal . . . . . . . . . . . . . . . . . . . . . . . . 526 (839) (140) (22) (61) 28 (508)
Base metals
Nickel and other products . . . . . . . . . . 4,693 (3,393) (154) (103) (411) — 632
Copper . . . . . . . . . . . . . . . . . . . . . 1,470 (903) (32) (8) (1) — 526
Other base metals products . . . . . . . . . — — 230 — — — 230
6,163 (4,296) 44 (111) (412) — 1,388
Others . . . . . . . . . . . . . . . . . . . . . . . 133 (139) (160) (134) — 35 (265)
Total of continuing operations . . . . . . . . . 23,384 (15,515) (636) (395) (642) 318 6,514
Discontinued operations (Fertilizers) . . . . . 2,225 (1,469) (37) (82) (70) — 567
Total . . . . . . . . . . . . . . . . . . . . . . . . 25,609 (16,984) (673) (477) (712) 318 7,081
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

Year ended December 31, 2014

Sales,
Cost of goods administrative Research Pre operating Dividends
Net sold and and other and and received from
operating services operating evaluation operational associates and Adjusted
revenue rendered expenses expenses stoppage joint ventures EBITDA
F-20

Ferrous minerals
Iron ore . . . . . . . . . . . . . . . . . . . . . 19,301 (9,532) (1,258) (319) (160) 44 8,076
Pellets . . . . . . . . . . . . . . . . . . . . . . 5,263 (2,705) (21) — (38) 482 2,981
Ferroalloys and manganese . . . . . . . . . . 392 (261) (13) — (23) — 95
Other ferrous products and services . . . . . 741 (565) 3 (10) — — 169
25,697 (13,063) (1,289) (329) (221) 526 11,321
Coal . . . . . . . . . . . . . . . . . . . . . . . . 739 (1,071) (309) (18) (38) 28 (669)
Base metals
Nickel and other products . . . . . . . . . . 6,241 (3,710) 101 (138) (514) — 1,980
Copper . . . . . . . . . . . . . . . . . . . . . 1,451 (877) (12) (5) (16) — 541
7,692 (4,587) 89 (143) (530) — 2,521
Others . . . . . . . . . . . . . . . . . . . . . . . 996 (601) (329) (172) (6) 14 (98)
Total of continuing operations . . . . . . . . . 35,124 (19,322) (1,838) (662) (795) 568 13,075
Discontinued operations (Fertilizers) . . . . . 2,415 (1,885) (95) (72) (85) — 278
Total . . . . . . . . . . . . . . . . . . . . . . . . 37,539 (21,207) (1,933) (734) (880) 568 13,353
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

3. Information by business segment and by geographic area (Continued)

Adjusted EBITDA is reconciled to net income (loss) as follows:

Year ended December 31

2016 2015 2014
Adjusted EBITDA from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,972 6,514 13,075
Depreciation, depletion and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,487) (3,719) (3,869)
Dividends received from associates and joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . (193) (318) (568)
Results on measurement or sale of non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . (66) 61 (167)
Impairment of non-current assets and onerous contracts . . . . . . . . . . . . . . . . . . . . . . . . . (1,174) (8,769) (99)
Operating income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,052 (6,231) 8,372
Financial results, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,843 (10,654) (6,018)
Equity results in associates and joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 309 (445) 501
Impairment and others results in associates and joint ventures . . . . . . . . . . . . . . . . . . . . . (1,220) (349) (61)
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,781) 5,249 (1,603)
Income (loss) from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,203 (12,430) 1,191
Loss attributable to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8) (501) (308)
Income (loss) attributable to Vale’s stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,211 (11,929) 1,499

Year ended December 31

2016 2015 2014
Adjusted EBITDA from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209 567 278
Depreciation, depletion and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (347) (310) (418)
Dividends received from associates and joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . (4) – –
Results on measurement or sale of non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . (1,738) (157) (1,054)
Operating income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,880) 100 (1,194)
Financial results, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 (147) (51)
Equity results in associates and joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 6 4
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 630 (149) 403
Loss from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,227) (190) (838)
Income attributable to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 10 4
Loss attributable to Vale’s stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,229) (200) (842)

b) Assets by segment

Year ended December 31, 2016

Additions to
Investments in Property, plant and property, plant and Depreciation,
associates and joint equipment and equipment and depletion and
Product inventory ventures intangible assets (i) intangible (ii) amortization (iii)
Ferrous minerals . . . . . . . . . . . . . . 1,134 1,808 34,834 3,246 1,618
Coal . . . . . . . . . . . . . . . . . . . . . 126 285 1,907 612 191
Base metals . . . . . . . . . . . . . . . . . 1,110 12 23,372 1,057 1,658
Others . . . . . . . . . . . . . . . . . . . . 3 1,591 2,177 36 20
Total . . . . . . . . . . . . . . . . . . . . . 2,373 3,696 62,290 4,951 3,487

F-21
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

3. Information by business segment and by geographic area (Continued)

Year ended December 31, 2015

Additions to
Investments in Property, plant and property, plant and Depreciation,
associates and joint equipment and equipment and depletion and
Product inventory ventures intangible assets (i) intangible (ii) amortization (iii)
Ferrous minerals . . . . . . . . . . . . . . 1,036 1,479 28,202 4,941 1,669
Coal . . . . . . . . . . . . . . . . . . . . . 53 306 1,812 1,539 192
Base metals . . . . . . . . . . . . . . . . . 1,166 17 23,522 1,555 1,841
Others . . . . . . . . . . . . . . . . . . . . 3 1,063 2,024 79 17
Discontinued operations (Fertilizers) . . 295 75 3,866 257 310
Total . . . . . . . . . . . . . . . . . . . . . 2,553 2,940 59,426 8,371 4,029

(i) Goodwill is allocated mainly in iron ore and nickel segments in the amount of US$1,246 e US$1,835, respectively.
(ii) Includes only cash effect.
(iii) Refers to amounts recognized in the income statement.

c) Investment in associates and joint ventures, intangible and property, plant and equipment by geographic
area

December 31, 2016 December 31, 2015

Investments in Property, Investments in Property,
associates and plant and associates and plant and
joint ventures Intangible equipment Total joint ventures Intangible equipment Total
Brazil . . . . . . . . . . . . . . . 3,172 4,720 34,509 42,401 2,408 3,285 32,190 37,883
Canada . . . . . . . . . . . . . . – 2,002 10,267 12,269 2 2,039 10,589 12,630
Americas, except Brazil and
Canada . . . . . . . . . . . . . 185 – 30 215 157 – 456 613
Europe . . . . . . . . . . . . . . – – 639 639 – – 608 608
Asia . . . . . . . . . . . . . . . . 339 – 4,173 4,512 367 – 5,219 5,586
Australia . . . . . . . . . . . . . – – 43 43 – – 74 74
New Caledonia . . . . . . . . . . – – 3,087 3,087 – – 3,521 3,521
Mozambique . . . . . . . . . . . – 149 1,715 1,864 – – 442 442
Oman . . . . . . . . . . . . . . . – – 956 956 – – 1,003 1,003
Other regions . . . . . . . . . . . – – – – 6 – – 6
Total . . . . . . . . . . . . . . . . . 3,696 6,871 55,419 65,986 2,940 5,324 54,102 62,366

d) Revenues by geographic area

Year ended December 31, 2016

Ferrous minerals Coal Base metals Others Total
Americas, except United States and Brazil . . . . . . . . . . . 334 20 1,172 – 1,526
United States of America . . . . . . . . . . . . . . . . . . . . . 232 – 749 24 1,005
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,559 218 1,854 17 4,648
Middle East/Africa/Oceania . . . . . . . . . . . . . . . . . . . . 1,252 95 20 – 1,367
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,292 121 328 – 1,741
China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,985 63 699 – 12,747
Asia, except Japan and China . . . . . . . . . . . . . . . . . . . 912 305 1,173 – 2,390
Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,785 17 144 118 2,064
Net operating revenue . . . . . . . . . . . . . . . . . . . . . . . . 20,351 839 6,139 159 27,488

F-22
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

3. Information by business segment and by geographic area (Continued)

Year ended December 31, 2015

Ferrous minerals Coal Base metals Others Total
Americas, except United States and Brazil . . . . . . . . . . . 359 18 1,122 – 1,499
United States of America . . . . . . . . . . . . . . . . . . . . . 30 – 804 21 855
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,506 102 1,921 – 4,529
Middle East/Africa/Oceania . . . . . . . . . . . . . . . . . . . . 1,009 97 84 – 1,190
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,512 74 373 – 1,959
China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,400 44 651 – 9,095
Asia, except Japan and China . . . . . . . . . . . . . . . . . . . 1,081 169 990 – 2,240
Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,665 22 218 112 2,017
Net operating revenue . . . . . . . . . . . . . . . . . . . . . . . . 16,562 526 6,163 133 23,384

Year ended December 31, 2014

Ferrous minerals Coal Base metals Others Total
Americas, except United States and Brazil . . . . . . . . . . . 652 3 1,373 21 2,049
United States of America . . . . . . . . . . . . . . . . . . . . . 24 – 1,099 245 1,368
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,894 115 2,586 13 6,608
Middle East/Africa/Oceania . . . . . . . . . . . . . . . . . . . . 1,608 110 149 – 1,867
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,566 192 863 6 3,627
China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,939 76 642 – 12,657
Asia, except Japan and China . . . . . . . . . . . . . . . . . . . 2,189 235 828 – 3,252
Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,825 8 152 711 3,696
Net operating revenue . . . . . . . . . . . . . . . . . . . . . . . . 25,697 739 7,692 996 35,124

Accounting policy

Revenue is recognized when Vale transfers to its customers all of the significant risks and rewards of
ownership of the product sold or when the services are rendered. Net revenue excludes any applicable sales
taxes and is recognized at the fair value of the consideration received or receivable to the extent that it is
probable that economic benefits will flow to Vale and the revenues can be reliably measured.

Depending on the contract, sales can be recognized when the product is available at the loading port,
loaded on the ship, at the port of discharge or on the costumer warehouse. Service revenues are recognized in
the amount by which the services are rendered and accepted by the customer.

In some cases, the sale price is determined on a provisional basis at the date of sale and adjustments
to the sales price subsequently occur based on movements in quoted market or contractual prices up to the
date of final pricing. Revenue is recognized based on the estimated fair value of the total consideration
receivable, and the provisionally priced sales mechanism embedded within these sale arrangements is
characterized as a derivative. Therefore, the fair value of the final sales price adjustment is re-estimated
continuously and changes in fair value are recognized as operational revenue in the income statement. As of
December 31, 2016, US$412 of revenues (2015: US$(274)) were still not settled and were provisionally
measured based on iron ore fines and copper forward prices.

F-23
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

3. Information by business segment and by geographic area (Continued)

Amounts billed to customers for shipping related to products sold by the Company are recognized as
revenue when the Company is responsible for shipping. Shipping costs are recognized as operating costs.

4. Special events occurred during the year

The special events occurred during the year are those that, in the Company’s judgment, significantly
impacted the income statement due to their size and nature. To determine whether an event or transaction is
non-recurring, the Company considers quantitative and qualitative factors, such as frequency and impact on
the result of the year.

The special events identified by the Company are as follows:

Year ended December 31

2016 2015 2014
Samarco Provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,109) – –
Results on measurement of non-current assets—Fertilizers business . . . . . . . . . . . . . . . . . . . . (1,738) – –
Impairment of non-current assets and onerous contracts . . . . . . . . . . . . . . . . . . . . . . . . . . (1,174) (8,769) (99)
Gold stream transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 230 –
Deferred income tax in foreign jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – 2,952 –
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,871) (5,587) (99)

2016

Samarco—In June 2016, the Company recognized in the income statement the amount of US$1,038
(R$3,733) which represented its best estimate of the obligation to comply with the reparation and
compensation programs under the Agreement related to the dam failure of Samarco Mineração S.A. The
Company also expensed an amount of US$71 (R$234) applied by Samarco to funds its working capital
requirements. For more details, see note 21.

Fertilizers assets—In December 2016, the Company approved the sale of fertilizers assets and the
acquisition of a minority interest in The Mosaic Company (‘‘Mosaic’’). Vale assessed the net assets of the
fertilizer business segment for impairment purposes and a loss in the amount of US$1,738 was recognized.
The fertilizers segment is presented as discontinued operations see note 14.

Impairment of non-current assets and onerous contracts—In 2016, the Company recognized an
impairment loss of US$1,174 mainly by the reduction in the nickel price projections, see note 19.

Gold stream transaction—In 2016, the Company recognized a gain of the result on sale of mineral
rights in the amount of US$150, see note 7.

F-24
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

4. Special events occurred during the year (Continued)

2015

Impairment of non-current assets and onerous contracts—In 2015, the Company recognized an
impairment loss of US$8,769 mainly by: (i) the reduction in estimated future coal prices combined with the
increase of logistics costs and (ii) the reduction the recoverable values of the VNL and VNC CGUs, see
note 19.

Gold stream transaction—In 2015, the Company recognized a gain of the result on sale of mineral
rights in the amount of US$230, see note 7.

Deferred income tax—In 2015, in the first adoption of the Law 12.973, the Company recognized assets
deferred income tax related to accumulated losses of subsidiaries abroad in the amount of US$2,952, see
note 8.

5. Costs and expenses by nature

a) Cost of goods sold and services rendered

Year ended December 31

2016 2015 2014
Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,087 2,092 2,756
Materials and services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,108 2,954 4,306
Fuel oil and gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,233 1,207 1,461
Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,747 2,518 2,353
Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 694 482 497
Acquisition of products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 511 829 1,607
Depreciation and depletion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,267 3,236 3,468
Freight . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,509 3,496 3,592
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,494 1,937 2,750
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,650 18,751 22,790

Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,148 18,233 21,839

Cost of services rendered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 502 518 951
Total of continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,650 18,751 22,790

Discontinued operations (Fertilizers) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,887 1,762 2,274

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,537 20,513 25,064

F-25
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

5. Costs and expenses by nature (Continued)

b) Selling and administrative expenses

Year ended December 31

2016 2015 2014
Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209 253 415
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 106 187
Advertising and publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 11 40
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120 131 220
Travel expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 11 23
Taxes and rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 16 27
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 84 124
Total of continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 507 612 1,036

Discontinued operations (Fertilizers) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 40 63

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 563 652 1,099

c) Others operational expenses (incomes), net

Year ended December 31

2016 2015 2014
Provision for litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137 11 169
Provision for loss with VAT credits (ICMS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 194 116
Profit sharing program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 15 121
Disposal of materials and inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (91) 193 187
Gold stream transaction (note 7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (150) (230) –
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 254 24 430
Total of continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267 207 1,023

Discontinued operations (Fertilizers) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 (1) 34

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 301 206 1,057

F-26
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

6. Financial result

Year ended December 31

2016 2015 2014
Financial expenses
Loans and borrowings gross interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,768) (1,647) (1,727)
Capitalized loans and borrowing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 653 761 588
Labor, tax and civil lawsuits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10) (59) (91)
Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (484) (3,553) (1,974)
Indexation and exchange rate variation (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,964) (13,825) (4,848)
Participative stockholders’ debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (417) 965 (315)
Expenses of REFIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (514) (547) (683)
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (621) (541) (672)
(6,125) (18,446) (9,722)
Financial income
Short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92 140 181
Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,740 1,076 640
Indexation and exchange rate variation (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,058 6,465 2,675
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 111 208
7,968 7,792 3,704
Financial results, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,843 (10,654) (6,018)

Summary of indexation and exchange rate variation

Loans and borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,099 (10,460) (3,250)
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,005) 3,100 1,077
Net (a) + (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,094 (7,360) (2,173)

As from January 1, 2017 (subsequent event), the Company starts to apply net investment hedge
accounting in foreign operation considering Vale International S.A. and Vale International Holding GmbH
investments as the hedging objects and designated as hedging instruments the Parent Company third party
loans and borrowings (excluding interest) in different currencies denominated in US dollar and euro,
amounting to US$8,067 and EUR1,500 (US$1,583) as the hedging instrument, respectively.

Accordingly, the Company plans to mitigate part of its foreign exchange risk, since foreign exchange
gains or losses on the hedging instrument (effective portion) will be recognized in other comprehensive
income, thus offsetting same of the gains and losses generated from translating of the net investments in the
aforementioned controlled companies. If the hedge relationship is not considered effective, the hedging
instrument’s exchange variations will be allocated to income statement for the year.

7. Deferred revenue—Gold stream transaction

In 2013, the Company entered into a gold transaction with Silver Wheaton Corp. (‘‘SLW’’) to sell 25%
of the gold extracted as a by-product over the life of the Salobo copper mine and 70% of the gold extracted
as a by-product of Sudbury nickel mines over the next 17 years. The Company received up-front cash
proceeds of US$1,900.

F-27
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

7. Deferred revenue—Gold stream transaction (Continued)

The original transaction was amended in March 2015 and August 2016 to include in each contract an
additional 25% of the gold extracted as by-product over a lifetime of the Salobo copper mine. In the first
additive, the Company received up-front proceeds of US$900 and in the second additive, (i) an initial cash
payment of US$800 and (ii) an option value resulting from the reduction of the exercise price from US$65.00
to US$43.75 on 10 million warrants from SLW held by the Company since 2013 and maturing in 2023.

Hence, in December 31, 2016 SLW holds the rights to 75% of the contained gold in the copper
concentrated from the Salobo mine and 70% of the gold extracted as a by-product of the Sudbury nickel
mines.

As the gold is delivered to SLW, Vale receives payment equal to the lesser of: (i) US$400 per ounce of
refined gold delivered (which payments are subject to an annual increase of 1% per year commencing on
January 1, 2017 for the original and additional transactions and each subsequent year and (ii) the market
reference price on the delivery date.

Vale may also receive an additional cash payment contingent on its decision to expand its capacity to
process Salobo copper ores to more than 28 Mtpy before 2036. Salobo that were still in ramp-up until
September, 2016 and will have a total capacity to process 24 Mtpy of run-of-mine (ROM). The contingent
additional cash payment could range from US$113 to US$953 depending on ore grade, timing and size of the
expansion.

The transactions were bifurcated into two identifiable components (i) the sale of the mineral rights
and, (ii) the services for gold extraction on the portion in which Vale operates as an agent for SLW gold
extraction.

The deferred revenue is recognized based on the units of gold mined compared to the total proven
and probable reserves of gold traded with SLW. During the year ended December 31, 2016, 2015 and 2014,
the Company recognized US$209, US$106 and US$64, respectively, in the statement of income relating to
services rendered in the original and additional transactions.

The result on sale of mineral rights from the additional transactions of US$150 and US$230 was
recognized in the year ended December 31, 2016 and 2015, respectively, under ‘‘Other operating expenses,
net’’.

Critical accounting estimates and judgments

Defining the gain on sale of mineral interest and the deferred revenue portion of the transaction
requires the use of critical accounting estimates as follows:

– Discount rates used to measure the present value of future inflows and outflows;
– Allocation of costs between nickel or copper and gold based on relative prices;
– Expected margin for the independent elements (sale of mineral rights and service for gold
extraction) based on Company’s best estimate.

F-28
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

8. Income taxes

a) Deferred income tax assets and liabilities

December 31, 2016 December 31, 2015

Taxes losses carryforward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,194 6,446
Temporary differences:
Employee post retirement obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . 620 587
Provision for litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215 228
Provision for assets losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,264 692
Fair value of financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167 823
Allocated goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,247) (2,272)
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (570) (270)
(551) (212)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,643 6,234
Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,343 7,904
Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,700) (1,670)
5,643 6,234

Changes in deferred tax are as follows:

Assets Liabilities Total

Balance at December 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,976 3,341 635
Taxes losses carryforward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,631 (36) 4,667
Provision for assets losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (82) (25) (57)
Fair value of financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (96) (96)
Allocated goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – (1,271) 1,271
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (181) 23 (204)
Effect in income statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,272 (1,309) 5,581
Transfers between asset and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142 142 –
Translation adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,297) (518) (779)
Other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 914 14 900
Acquisition of subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (11) – (11)
Effect of discontinued operations
Income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (92) – (92)
Balance at December 31, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,904 1,670 6,234
Taxes losses carryforward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,307) 84 (1,391)
Provision for assets losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 342 44 298
Fair value of financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (802) – (802)
Allocated goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – (342) 342
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (258) 27 (285)
Effect in income statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,025) (187) (1,838)
Transfers between asset and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167 167 –
Translation adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 900 36 864
Other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (19) 14 (33)
Effect of discontinued operations
Income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 627 – 627
Transfer to net assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (211) – (211)
Balance at December 31, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,343 1,700 5,643

F-29
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

8. Income taxes (Continued)

Law 12.973—The Brazilian corporate tax law was amended at the end of 2014 and became effective as
from fiscal year 2015. The change provided that profits from foreign subsidiaries are taxable in Brazil, on an
accrual basis, applying the differential between the nominal local tax rate and the Brazilian tax rates (34%)
considering the profit before tax in local GAAP (Generally Accepted Accounting Principles) and local
currency. Accordingly, from January 1st, 2015 the results from foreign subsidiaries are recognized on that
basis.

In accordance with article 77 of law 12.973, the losses generated by the foreign subsidiaries, before
income taxes and the equity results, may be offset against their future profits, subject to certain conditions.

In 2015, in the first adoption, the Company recognized deferred income tax assets related to
accumulated losses of subsidiaries abroad in the amount of US$2,952.

The Company projections shows deferred tax assets substantially being realized in the next five years.

The tax loss carryforward do not expire and in the Brazilian jurisdiction the compensation is limited to
30% of the taxable income for the year. For local results there is no restriction to compensated profits from
foreign subsidiaries against previously recorded deferred tax assets.

b) Income tax reconciliation—Income statement

The total amount presented as income taxes in the income statement is reconciled to the rate
established by law, as follows:

Year ended December 31

2016 2015 2014
Net income (loss) before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,984 (17,679) 2,794
Income taxes at statutory rates—34% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,715) 6,011 (950)
Adjustments that affect the basis of taxes:
Income tax benefit from interest on stockholders’ equity . . . . . . . . . . . . . . . . . . . . . 87 356 1,123
Tax incentives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 344 61 95
Results of overseas companies taxed by different rates which differs from the parent
company rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – – (1,184)
Equity results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108 (151) 171
Additions (reversals) of tax loss carryforward . . . . . . . . . . . . . . . . . . . . . . . . . . . . (273) 1,498 (178)
Unrecognized tax losses of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (708) (901) –
Nondeductible effect of impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (97) (1,865) (450)
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 473 240 (230)
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,781) 5,249 (1,603)

F-30
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

8. Income taxes (Continued)

c) Tax incentives

In Brazil, Vale has tax incentives to partially reduce the income tax generated by the operations
conducted in the North and Northeast regions which includes iron ore, copper, and nickel. The incentive is
calculated based on the taxable income of the incentive activity (tax operating income) and takes into account
the allocation of tax operating income into different incentives applicable to different tranches of production
during the periods specified for each product, generally 10 years. Most of our incentives are expected to
expire up to 2024. An amount equal to that obtained with the tax saving must be appropriated in retained
earnings reserve account in stockholders’ equity, and cannot be distributed as dividends to stockholders.

In addition to those incentives, 30% of the income tax due based on the tax operating income can be
reinvested on the purchase of machinery and equipment, subject to subsequent approval by the regulatory
agency responsible, Superintendência do Desenvolvimento da Amazonia (SUDAM) and the Superintendência
do Desenvolvimento do Nordeste (SUDENE). The reinvestment is accounted in retained earnings reserve
account, which restricts the distribution as dividends to stockholders.

Vale is subject to the revision of income tax by local tax authorities in a range up to 10 years
depending on jurisdiction where we operate.

d) Income taxes—Settlement program (‘‘REFIS’’)

In 2013, the Company elected to participate in the REFIS, a federal tax settlement program, to settle
most of the claims related to the collection of income tax and social contribution on equity gains of foreign
subsidiaries and affiliates from 2003 to 2012.

At December 31, 2016, the balance of US$5,419 (US$458 as current and US$4,961 as non-current) is
due in 142 remaining monthly installments, bearing interest at the SELIC rate (Special System for Settlement
and Custody) and at December 31, 2015, the balance of US$4,430 (US$345 as current and US$4,085 as
non-current) was due in 154 remaining monthly installments.

Accounting policy

The recognition of income taxes as deferred taxes is based on temporary differences between carrying
value and the tax basis of assets and liabilities as well as taxes losses carryforwards. The deferred income taxes
assets and liabilities are offset when there is a legally enforceable right on the same taxable entity.

The deferred taxes assets arising from taxes losses and temporary differences are not recognized when
their recovery amount are not probable.

Income taxes are recognized in the income statement, except for items recognized directly in
stockholders’ equity. The provision for income tax is calculated individually for each entity in the Group based
on Brazilian tax rates, on an accrual basis, by applying the differential between the nominal local tax rates
(based on rules in force in the location of the entity) and the Brazilian tax rate.

F-31
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

8. Income taxes (Continued)

Critical accounting estimates and judgments

Deferred tax assets arising from tax losses, negative social contribution basis and temporary
differences are registered taking into account the analysis of future performance, considering economic and
financial projections, prepared based on internal assumptions and macroeconomic, trade and tax scenarios
that may be subject to changes in the future. The assumptions of future profits are based on production and
sales planning, commodity prices, operational costs, restructuring plans, reclamation and planned capital costs.

9. Basic and diluted earnings (loss) per share

The value of basic earnings (loss) per shares and diluted were calculated as follows:

Year ended December 31

2016 2015 2014
Basic and diluted earnings (loss) per share from continuing operations:
Income (loss) available to preferred stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . 1,990 (4,555) 572
Income (loss) available to common stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . 3,221 (7,374) 927
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,211 (11,929) 1,499

Basic and diluted loss per share from discontinued operations:

Loss available to preferred stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (469) (76) (322)
Loss available to common stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (760) (124) (520)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,229) (200) (842)

Basic and diluted earnings per share:

Income (loss) available to preferred stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . 1,521 (4,631) 250
Income (loss) available to common stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . 2,461 (7,498) 407
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,982 (12,129) 657

Thousands of shares
Weighted average number of shares outstanding—preferred shares . . . . . . . . . . . . . . . 1,967,722 1,967,722 1,967,722
Weighted average number of shares outstanding—common shares . . . . . . . . . . . . . . . . 3,185,653 3,185,653 3,185,653
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,153,375 5,153,375 5,153,375

Basic and diluted earnings (loss) per share from continuing operations
Preferred share (US$) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.01 (2.31) 0.29
Common share (US$) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.01 (2.31) 0.29

Basic and diluted loss per share from discontinued operations

Preferred share (US$) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.24) (0.04) (0.16)
Common share (US$) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.24) (0.04) (0.16)

Basic and diluted earnings (loss) per share

Preferred share (US$) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.77 (2.35) 0.13
Common share (US$) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.77 (2.35) 0.13

The Company does not hold dilutive potential ordinary shares outstanding that could result in dilution
of earnings per share.

F-32
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

10. Accounts receivable

December 31, 2016 December 31, 2015

Trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,723 1,534
Impairment of trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (60) (58)
3,663 1,476

Trade receivables related to the steel sector—% . . . . . . . . . . . . . . . . . . . . . . 83.44% 75.32%

Year ended December 31

2016 2015 2014
Impairment of trade receivables recorded in the income statement . . . . . . . . . . . . . . . . . (5) 11 (13)

No individual customer represents over 10% of receivables or revenues.

Accounting policy

Account receivables are financial instruments classified in the category loan and receivables and
represent the total amount due from sale of products and services rendered by the Company. The receivables
are initially recognized at fair value and subsequently measured at amortized cost, net of impairment losses,
when applicable.

Commercial credit risk management—For the commercial credit exposure, which arises from sales to
final customers, the risk management area, in accordance with the current delegation level, approves or
request the approval of credit risk limits for each counterparty.

Vale attributes an internal credit risk rating for each counterparty using its own quantitative
methodology for credit risk analysis, which is based on market prices, external credit ratings and financial
information of the counterparty, as well as qualitative information regarding the counterparty’s strategic
position and history of commercial relations.

Based on the counterparty’s credit risk, risk mitigation strategies may be used to manage the
Company‘s credit risk. The main credit risk mitigation strategies include non-recourse discount of receivables,
insurance instruments, letters of credit, corporate and bank guarantees, mortgages, among others.

Vale has a diversified accounts receivable portfolio from a geographical standpoint, with Asia, Europe
and Brazil the regions with more significant exposures. According to each region, different guarantees can be
used to enhance the credit quality of the receivables.

F-33
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

11. Inventories

December 31, 2016 December 31, 2015

Product inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,572 3,071
Impairment of product inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (199) (518)
2,373 2,553

Consumable inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 976 975

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,349 3,528

Product inventories by segments are presented in note 3(b).

Accounting policy

Inventories are stated at the lower of cost or the net realizable value. The inventory production cost is
determined on the basis of variable and fixed costs, direct and indirect costs of production, using the average
cost method. An allowance for losses on obsolete or slow-moving inventory is recognized.

12. Recoverable taxes

Recoverable taxes are presented net of provisions for losses on tax credits.

December 31, 2016 December 31, 2015

Value-added tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 724 755
Brazilian federal contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,599 1,125
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 25
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,352 1,905

Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,625 1,404

Non-current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 727 501
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,352 1,905

F-34
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

13. Other financial assets and liabilities

Current Non-Current
December 31, 2016 December 31, 2015 December 31, 2016 December 31, 2015
Others financial assets
Financial investments . . . . . . . . . . . . 18 28 – –
Loans . . . . . . . . . . . . . . . . . . . . . – – 180 188
Derivative financial instruments (note 25) . 274 121 446 93
Related parties (note 31) . . . . . . . . . . 71 70 2 1
363 219 628 282

Others financial liabilities

Derivative financial instruments (note 25) . 414 2,076 1,225 1,570
Related parties (note 31) . . . . . . . . . . 672 475 127 213
Participative stockholders’ debentures
(note 32(b)) . . . . . . . . . . . . . . . . – – 775 342
1,086 2,551 2,127 2,125

14. Non-current assets and liabilities held for sale and discontinued operations

December 31, 2016 December 31, 2015

Fertilizers assets
(Discontinued Shipping
operations) (i) Nacala assets Total Nacala
Assets
Accounts receivable . . . . . . . . . . . . . . . . . . 86 6 – 92 3
Inventories . . . . . . . . . . . . . . . . . . . . . . . . 387 2 – 389 –
Other current assets . . . . . . . . . . . . . . . . . . 107 114 – 221 134
Investments in associates and joint ventures . . . . 90 – – 90 –
Property, plant and equipment and Intangible, net . 2,694 4,064 357 7,115 3,907
Other non-current assets . . . . . . . . . . . . . . . . 679 3 – 682 –
Total assets . . . . . . . . . . . . . . . . . . . . . . . . 4,043 4,189 357 8,589 4,044
Liabilities
Suppliers and contractors . . . . . . . . . . . . . . . 280 41 – 321 93
Other current liabilities . . . . . . . . . . . . . . . . 192 13 – 205 14
Other non-current liabilities . . . . . . . . . . . . . . 559 5 – 564
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . 1,031 59 – 1,090 107
Net non-current assets held for sale . . . . . . . . . . 3,012 4,130 357 7,499 3,937

(i) Include the nitrogen assets (US$382) and not include the noncontrolling interest (US$234—note 16).

a) Discontinued operations (Fertilizers assets)

In December 2016, the Company entered into an agreement with The Mosaic Company (‘‘Mosaic’’) to
sell (i) the phosphate assets located in Brazil, except those mainly related to nitrogen assets located in
Cubatão (Brazil); (ii) the control of Compañia Minera Miski Mayo S.A.C., in Peru; (iii) the potassium assets
located in Brazil; and (iv) the potash projects in Canada.

F-35
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

14. Non-current assets and liabilities held for sale and discontinued operations (Continued)

The agreed transaction price is US$2.5 billion, of which US$1.25 billion will be paid in cash and
US$1.25 billion with 42.3 million common shares to be issued by Mosaic, which at the transaction date
represents around 11% of Mosaic’s total outstanding common shares. Completion of the transaction is
expected for the end of 2017 and is subject to the spin-off of the nitrogen assets from Vale Fertilizantes S.A.;
the fulfillment of usual precedent conditions, including the approval of the Administrative Council of
Economic Defense (CADE) and other antitrust authorities; and other operational and regulatory matters.

Vale may receive additional earn-out of the transaction up to US$260 in circumstances where the
phosphate price (MAP—Monoammonium Phosphate) and the Real exchange rate exceed certain levels during
each of the twelve months periods after the completion of the transaction during two years.

The assets located in Cubatão, which are mostly dedicated to the operation with nitrogen, will be
transferred from Vale Fertilizantes S.A. to an independent legal entity, for which the Company is actively
seeking to identify potential buyers.

Therefore, the fertilizer segment, including Cubatão, is presented as a discontinued operation and the
related assets and liabilities were classified as assets and liabilities held for sale, as established by IFRS 5.

As consequence, the net assets of the fertilizers segment was adjusted to reflect the fair value less cost
to sell and a loss of US$1,738 (US$1,147 net of tax) was recognized in the income statement from
discontinued operations for the year ended December 31, 2016.

At the completion of the transaction, the Company will recycle US$75 of the ‘‘Cumulative translation
adjustments’’ to the income statement. For the years ended December 31, 2016, 2015 and 2014 the
comprehensive income attributable to Vale’s stockholders regarding discontinued operations was a loss of
US$131, a gain of US$106 and a loss of US$9, respectively.

The results for the years and the cash flows of discontinued operations of the Fertilizer segment are
presented as follows:

Year ended December 31

2016 2015 2014
Net income of discontinued operations
Net operating revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,875 2,225 2,415
Cost of goods sold and services rendered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,887) (1,762) (2,274)
Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (130) (206) (282)
Results on measurement or sale of non-current assets . . . . . . . . . . . . . . . . . . . . . . . . (1,738) (157) (1,053)
Operating income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,880) 100 (1,194)
Financial Results, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 (147) (51)
Equity results in associates and joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 6 4
Loss before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,857) (41) (1,241)
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 630 (149) 403
Loss from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,227) (190) (838)
Income attributable to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 10 4
Loss attributable to Vale’s stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,229) (200) (842)

F-36
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

14. Non-current assets and liabilities held for sale and discontinued operations (Continued)

Year ended December 31

2016 2015 2014
Cash flow from discontinued operations
Operating activities
Loss before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,857) (41) (1,241)
Adjustments:
Equity results in associates and joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . (3) (6) (4)
Depreciation, amortization and depletion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 347 310 419
Results on measurement or sale of non-current assets . . . . . . . . . . . . . . . . . . . . . 1,738 157 1,053
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (20) 148 51
Decrease in assets and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (25) (9) (266)
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180 559 12
Investing activities
Additions to property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (292) (257) (36)
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 (89) 55
Net cash provided (used) in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . (281) (346) 19
Financing activities
Repayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (17) (73) (72)
Net cash used in financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (17) (73) (72)
Net cash provided (used) by discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . (118) 140 (41)

b) Coal—Nacala logistic corridor (‘‘Nacala’’)

In December 2014, the Company signed an agreement with Mitsui & Co., Ltd. (‘‘Mitsui’’) to sell 50%
of its stake in the Nacala corridor and 15% of Vale´s stake in Vale Moçambique which holds the coal assets.
After completion of the transaction, Vale will indirectly own 81% of the Moatize mine (Vale Moçambique)
and approximately 50% of Nacala Corridor. Since Nacala will be jointly controlled by Vale and Mitsui the
related assets and liabilities were classified as non-current assets held for sale with no impact in the income
statement.

In September 2016, the Company reviewed the terms related to this transaction, in which Mitsui
agreed to contribute up to US$450, being: (i) US$255 for a 15% of Vale’s stake in the Moatize coal mine;
and (ii) an additional contribution of up to US$195 based on meeting certain conditions, including mine
performance. Mitsui will also contribute US$348 for a 50% stake in the equity and quasi-equity instruments of
the Nacala and extend a long-term facility of US$165.

As at December 2016, completion of the transaction remains subject to successful completion of the
Project Finance and certain government approvals which are expected to occur in 2017.

c) Shipping assets

In June 2016, Vale approved a plan to dispose of its fleet of eleven ships. As a consequence, the
referenced assets were reclassified to non-current assets held for sale and a loss of US$66 was recorded in the
income statement as ‘‘Results on measurement or sale of non-current assets’’.

F-37
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

14. Non-current assets and liabilities held for sale and discontinued operations (Continued)

In the year ended December 31, 2016, the Company concluded the sale of three Very Large Ore
Carriers (‘‘VLOC’s’’) for US$269 and four Capesize vessels for US$140. There are four vessels that are still
held for sale as at December 31, 2016.

Accounting policy

A non-current asset is classified as held for sale if its carrying amount will be recovered principally
through a sale transaction rather than through continuing use.

The criteria for recognition the non-current assets as held for sale are only considered satisfied when
the sale is highly probable and the asset (or disposal group of assets) is available for immediate sale in its
present condition. The Company measures the assets held for sale (or group of assets) at the lower of its
carrying amount and fair value less costs to sell. If the carrying amount exceeds the fair value less costs to sell
an impairment loss is recognized against income. Any subsequent reversal of impairment is recognized only to
the extent of the loss previously recognized.

The assets and liabilities of a disposal group classified as held for sale are presented separately in the
statement of financial position.

The classification as a discontinued operation occurs through disposal, or when the operation meets
the criteria to be classified as held for sale if this occurs earlier. A discontinued operation is a component of
a Group business comprising cash flows and operations that may be clearly distinct from the rest of the
Group and that represents an important separate line of business or geographical area of operations.

The result of discontinued operations is presented in a single amount in the income statement,
including the results after income tax of these operations less any impairment loss. Cash flows attributable to
operating, investing and financing activities of discontinued operations are described in a separate note.

When an operation is classified as a discontinued operation, the income statements of the prior
periods are re-presented as if the operation had been discontinued since the beginning of the comparative
period.

Any non-controlling interest relating to disposal group will be presented in the stockholders equity not
being reclassified as a held for sale.

F-38
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

15. Investments in associates and joint ventures

The material non-consolidated entities for the Group are as follows:

Location Principal activity % ownership % Voting capital % Other investors

Joint ventures
Aliança Geração de Energia S.A. (i) . . . . . . . Brazil Energy 55.0% 55.0% 45.0%
Companhia Coreano-Brasileira de Pelotização . Brazil Pellets 50.0% 50.0% 50.0%
Companhia Hispano-Brasileira de
Pelotização (i) . . . . . . . . . . . . . . . . . . Brazil Pellets 50.9% 51.0% 49.1%
Companhia Ítalo-Brasileira de Pelotização (i) . . Brazil Pellets 50.9% 51.0% 49.1%
Companhia Nipo-Brasileira de Pelotização (i) . Brazil Pellets 51.0% 51.1% 49.0%
Companhia Siderúrgica do Pecém (‘‘CSP’’) . . . Brazil Steel 50.0% 50.0% 50.0%
MRS Logı́stica S.A. . . . . . . . . . . . . . . . . Brazil Logistics 48.16% 46.75% 51.84%
Samarco Mineração S.A. . . . . . . . . . . . . . Brazil Pellets 50.0% 50.0% 50.0%

Direct and indirect associates

Henan Longyu Energy Resources Co., Ltd. . . . China Coal 25.0% 25.0% 75.0%
VLI S.A. . . . . . . . . . . . . . . . . . . . . . . Brazil Logistics 37.6% 37.6% 62.4%

The associates and joint ventures are accounted for using the equity method.

(i) Although the Company held majority of the voting capital, the entities are accounted under equity method due to shareholders’
agreements where relevant decisions are shared with other parties.

a) Changes during the year

Changes in investments in associates and joint ventures as follows:

2016 2015
Joint Joint
Associates ventures Total Associates ventures Total
Balance at January 1st, . . . . . . . . . . . . . . . . . . . . 1,323 1,617 2,940 2,059 2,074 4,133
Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . – – – 4 580 584
Additions . . . . . . . . . . . . . . . . . . . . . . . . . . 1 238 239 – 30 30
Capitalizations . . . . . . . . . . . . . . . . . . . . . . . . – – – 249 – 249
Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . (7) – (7) 79 – 79
Translation adjustment . . . . . . . . . . . . . . . . . . . 175 338 513 (558) (653) (1,211)
Equity results in income statement . . . . . . . . . . . . 69 240 309 (137) (308) (445)
Equity results from discontinued operations . . . . . . . 3 – 3 6 – 6
Equity results in statement of comprehensive income . – – – (6) – (6)
Dividends declared . . . . . . . . . . . . . . . . . . . . . (37) (165) (202) (59) (36) (95)
Impairment (note 19) . . . . . . . . . . . . . . . . . . . – – – (314) (132) (446)
Transfer to held for sale . . . . . . . . . . . . . . . . . . (90) – (90) – – –
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . – (9) (9) 62 62
Balance at December 31, . . . . . . . . . . . . . . . . . . . 1,437 2,259 3,696 1,323 1,617 2,940

The investments by segments are presented in note 3(b).

F-39
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

15. Investments in associates and joint ventures (Continued)

b) Acquisitions and divestiture

2016

Thyssenkrupp Companhia Siderúrgica do Atlântico Ltd (‘‘CSA’’)—In April 2016, the Company sold
100% of its interest at CSA (26.87%) for a non-significant amount. The transaction resulted in US$75 loss on
recycling the ‘‘Cumulative translation adjustments’’ recognized in the income statement as ‘‘Impairment and
others results in associates and joint ventures’’.

Minas da Serra Geral S.A. (‘‘MSG’’)—In March 2016, the Company completed the purchase option
on additional 50% participation at MSG which was owned by JFE Steel Corporation (‘‘JFE’’) in the amount
of US$17. Vale now holds 100% of MSG’s shares.

2015

Energy generation assets—In December 2013, the Company signed agreements with CEMIG Geração
e Transmissão S.A. (‘‘CEMIG GT’’) to incorporate two joint ventures, Aliança Norte Participações S.A. and
Aliança Geração de Energia S.A and exchange of assets and shares. The transaction was completed in the
first quarter of 2015, in which Vale received cash proceeds of US$97 and recognized a gain of US$18 as
‘‘Impairment and others results in associates and joint ventures’’ and a gain of US$193 as ‘‘Results on
measurement or sales of non-current assets’’.

Divestiture of Shandong Yankuang International Coking Co., Ltd. (‘‘Yankuang’’)—The Company

completed the sale of its participation in Yankuang, a producer of coking coal, methanol and other products.
In this transaction, Vale recognized a gain of US$79 as ‘‘Impairment and others results in associates and joint
ventures’’.

The ‘‘Impairment and others results in associates and joint ventures’’ are as follows:

Year ended December 31

2016 2015 2014
Samarco provision (note 21) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,109) – –
Divestiture—Thyssenkrupp Companhia Siderúrgica do Atlântico Ltd . . . . . . . . . . . . . . . . (75) – –
Divestiture—Paragominas (i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (36) – –
Divestiture—Shandong Yankuang International Coking Co., Ltd. . . . . . . . . . . . . . . . . . – 79 –
Energy generation assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – 18 –
Divestiture—Vale Florestar Fundo de Investimento em Participações . . . . . . . . . . . . . . . – – (30)
Impairment of investments (note 19) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – (446) (31)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,220) (349) (61)

(i) Mineração Paragominas shares were sold in 2011 and an accounts receivable of US$149 were outstanding. In December, 2016, the
Company received US$113 and a loss of US$36 was recognized.

F-40
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

15. Investments in associates and joint ventures (continued)

Investments in associates and Equity results in the income
joint ventures statement Dividends received
Year ended December 31 Year ended December 31
% % voting December 31, December 31,
Associates and joint ventures ownership capital 2016 2015 2016 2016 2015 2014 2015 2014

Ferrous minerals
Baovale Mineração S.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.00 50.00 26 24 9 – 4 – – –
Companhia Coreano-Brasileira de Pelotização . . . . . . . . . . . . . . . . . . . . 50.00 50.00 68 62 17 25 30 26 19 16
Companhia Hispano-Brasileira de Pelotização . . . . . . . . . . . . . . . . . . . . 50.89 51.00 59 57 15 14 24 27 16 11
Companhia Ítalo-Brasileira de Pelotização . . . . . . . . . . . . . . . . . . . . . . 50.90 51.00 69 50 16 21 25 9 14 5
Companhia Nipo-Brasileira de Pelotização . . . . . . . . . . . . . . . . . . . . . . 51.00 51.11 108 104 29 46 66 41 30 48
F-41

MRS Logı́stica S.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.16 46.75 488 368 57 43 76 10 22 44

Samarco Mineração S.A. (i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.00 50.00 – – – (167) 392 – 146 401
VLI S.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.60 37.60 969 778 36 46 48 – 8 –
Zhuhai YPM Pellet Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.00 25.00 21 23 – – – – – –
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – 13 – (2) – – – 1
1,808 1,479 179 26 665 113 255 526
Coal
Henan Longyu Energy Resources Co., Ltd. . . . . . . . . . . . . . . . . . . . . . 25.00 25.00 285 306 (4) (3) 32 – 28 28
Base metals
Korea Nickel Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.00 25.00 12 17 (1) (3) – 4 – –
Teal Minerals Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.00 50.00 – – (3) (129) (35) – – –
12 17 (4) (132) (35) 4 – –
Others
Aliança Geração de Energia S.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.00 55.00 582 481 46 50 – 39 30 –
Aliança Norte Energia Participações S.A. . . . . . . . . . . . . . . . . . . . . . . 51.00 51.00 148 81 (6) 1 – – – –
California Steel Industries, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.00 50.00 185 157 33 (27) 12 4 – 6
Companhia Siderúrgica do Pecém . . . . . . . . . . . . . . . . . . . . . . . . . . 50.00 50.00 527 225 25 (307) (44) – – –
Mineração Rio Grande do Norte S.A. . . . . . . . . . . . . . . . . . . . . . . . . 40.00 40.00 129 93 48 40 7 32 3 8
Thyssenkrupp Companhia Siderúrgica do Atlântico Ltd. . . . . . . . . . . . . . . . – – – – – (80) (60) – – –
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 101 (8) (13) (76) 1 2 –
1,591 1,138 138 (336) (161) 76 35 14
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,696 2,940 309 (445) 501 193 318 568

(i) Note 21
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

15. Investments in associates and joint ventures (Continued)

c) Summarized financial information

The summarized financial information about relevant associates and joint-ventures are as follows:

December 31, 2016

Joint ventures Associates
Aliança Geração
de Energia CSP Pelletizing(i) MRS Logı́stica Henan Longyu VLI S.A.
Current assets . . . . . 115 743 392 324 903 389
Non-current assets . . 1,208 3,809 318 1,709 456 4,169
Total assets . . . . . . 1,323 4,552 710 2,033 1,359 4,558

Current liabilities . . . 165 664 109 392 200 677

Non-current liabilities 100 2,835 3 877 19 1,304
Total liabilities . . . . 265 3,499 112 1,269 219 1,981
Stockholders’ equity . 1,058 1,053 598 764 1,140 2,577

Net income (loss) . . . 84 49 152 90 (17) 95

December 31, 2015

Joint ventures Associates
Aliança Geração
de Energia CSP Pelletizing(i) MRS Logı́stica Henan Longyu VLI S.A.
Current assets . . . . . 65 265 350 324 883 503
Non-current assets . . 915 3,057 313 1,709 529 2,970
Total assets . . . . . . 980 3,322 663 2,033 1,412 3,473

Current liabilities . . . 35 528 118 392 108 511

Non-current liabilities 71 2,344 9 877 80 893
Total liabilities . . . . 106 2,872 127 1,269 188 1,404
Stockholders’ equity . 874 450 536 764 1,224 2,069

Net income (loss) . . . 91 (615) 208 90 (11) 121

(i) Aggregate entity information: Companhia Coreano-Brasileira de Pelotização, Companhia Hispano-Brasileira de Pelotização, Companhia
Ítalo-Brasileira de Pelotização, Companhia Nipo-Brasileira de Pelotização.

Stand alone number may differ from number reported herein, since they may be adjusted, when
necessary to Vale’s accounting policies including eventual goodwill, provisional price adjustment, etc.

Accounting policy

Joint arrangements investments—Joint arrangements are all entities over which the Group has shared
control with one or more parties. Joint arrangement investments are classified as either joint operations or
joint ventures depending on the contractual rights and obligations of each investor.

F-42
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

15. Investments in associates and joint ventures (Continued)

The joint operations are recorded in the financial statements to represent the Group’s contractual
rights and obligations. Accordingly, any jointly held assets, liabilities, revenues and expenses are accounted for
individually in the financial statements. The Company does not have material joint operations.

Interests in joint ventures are accounted for using the equity method, after initially being recognized
at cost in the consolidated balance sheet. The Group’s investment in joint ventures includes the goodwill
identified in the acquisition, net of any accumulated impairment loss.

The Group’s interest in the profits or losses of its joint ventures is recognized in the income statement
and participation in the changes in reserves is recognized in the Group’s reserves. When the Group’s interest
in the losses of an associate or joint venture is equal to or greater than the carrying amount of the
investment, including any other receivables, the Group does not recognize additional losses, unless it has
incurred obligations or made payments on behalf of the joint venture.

d) Commitments and guarantees

The commitments and guarantees issued the affiliates and joint ventures are presented in note 32.

16. Noncontrolling interest

a) Summarized financial information

The summarized financial information, prior to the eliminations of the intercompany balances and
transactions, about subsidiaries with material noncontrolling interest are as follows:

December 31, 2016

Compañia Mineradora
MBR PTVI VNC Miski Mayo S.A.C.(i) Others Total
Current assets . . . . . . . . . . . . . . . . . . . . . . . . 583 576 462 107
Non-current assets . . . . . . . . . . . . . . . . . . . . . 3,182 1,668 2,101 429
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . 3,765 2,244 2,563 536

Current liabilities . . . . . . . . . . . . . . . . . . . . . . 143 145 283 46

Non-current liabilities . . . . . . . . . . . . . . . . . . . . 198 261 1,073 99
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . 341 406 1,356 145

Stockholders’ equity . . . . . . . . . . . . . . . . . . . . . 3,424 1,838 1,207 391

Equity attributable to noncontrolling interests . . . . . 1,406 741 40 235 (440) 1,982

Net income (loss) . . . . . . . . . . . . . . . . . . . . . . 400 2 (807) 3

Income (loss) attributable to noncontrolling interests . 165 1 (40) 2 (134) (6)

Dividends paid . . . . . . . . . . . . . . . . . . . . . . . 653 – – 47 – –

F-43
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

16. Noncontrolling interest (Continued)

December 31, 2015

Compañia Mineradora
MBR PTVI VNC Miski Mayo S.A.C.(i) Others Total
Current assets . . . . . . . . . . . . . . . . . . . . . . . . 743 567 248 137
Non-current assets . . . . . . . . . . . . . . . . . . . . . 2,912 1,731 2,388 481
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . 3,655 2,298 2,636 618

Current liabilities . . . . . . . . . . . . . . . . . . . . . . 188 151 518 82

Non-current liabilities . . . . . . . . . . . . . . . . . . . . 155 309 2,715 101
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . 343 460 3,233 183

Stockholders’ equity . . . . . . . . . . . . . . . . . . . . . 3,312 1,838 (597) 435

Equity attributable to noncontrolling interests . . . . . 1,360 741 55 261 (302) 2,115

Net income (loss) . . . . . . . . . . . . . . . . . . . . . . 250 36 (1,916) 16

Income (loss) attributable to noncontrolling interests . 66 15 (373) 10 (209) (491)

Dividends paid . . . . . . . . . . . . . . . . . . . . . . . 116 – – 67 – –

December 31, 2014

Compañia Mineradora
MBR PTVI VNC Miski Mayo S.A.C.(i) Others Total
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . 145 202 (982) 7
Income (loss) attributable to noncontrolling interests . 3 82 (191) 4 (202) (304)

Dividends paid . . . . . . . . . . . . . . . . . . . . . . . – 41 – – – –

(i) Discontinued operation

Stand alone number may differ from number reported herein, since they may be adjusted, when
necessary to Vale’s accounting policies including eventual goodwill, provisional price adjustment, etc.

b) Acquisitions and divestments

2016

There were no significant changes in equity interest in subsidiaries in 2016.

2015

Sale of minority interest in Minerações Brasileiras Reunidas S.A.—In September 2015, the Company
sold 36.4% of the total capital of subsidiary Minerações Brasileiras Reunidas S.A. (‘‘MBR’’) to an affiliate of
Banco Bradesco S.A. (related party) for US$1,089. After the sale, Vale holds 62.5% of the total capital. Vale
has an option to repurchase the shares after an initial period.

F-44
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

17. Intangibles

Changes in intangibles are as follows:

Goodwill Concessions Right of use Software Total

Balance at December 31, 2014 . . . . . . . . . . . . . 3,760 2,213 297 550 6,820
Additions . . . . . . . . . . . . . . . . . . . . . . . . – 549 – 128 677
Disposals . . . . . . . . . . . . . . . . . . . . . . . . – (20) – – (20)
Amortization . . . . . . . . . . . . . . . . . . . . . . – (150) (42) (155) (347)
Impairment (note 19) . . . . . . . . . . . . . . . . . (81) – – – (81)
Translation adjustment . . . . . . . . . . . . . . . . (762) (778) (48) (176) (1,764)
Acquisition of subsidiary . . . . . . . . . . . . . . . 39 – – – 39
Balance at December 31, 2015 . . . . . . . . . . . . . 2,956 1,814 207 347 5,324
Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,956 2,588 464 1,025 7,033
Accumulated amortization . . . . . . . . . . . . . . – (774) (257) (678) (1,709)
Balance at December 31, 2015 . . . . . . . . . . . . . 2,956 1,814 207 347 5,324

Additions . . . . . . . . . . . . . . . . . . . . . . . . — 1,100 1 13 1,114

Disposals . . . . . . . . . . . . . . . . . . . . . . . . — (12) — — (12)
Amortization . . . . . . . . . . . . . . . . . . . . . . — (248) (2) (153) (403)
Impairment of discontinued operations (note 14) . (30) — — — (30)
Translation adjustment . . . . . . . . . . . . . . . . 188 570 9 61 828
Transfers . . . . . . . . . . . . . . . . . . . . . . . . — 77 (68) 74 83
Effect of discontinued operations
Transfer to net assets held for sale . . . . . . . . . . (33) — — — (33)
Balance at December 31, 2016 . . . . . . . . . . . . . 3,081 3,301 147 342 6,871
Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,081 4,467 222 1,570 9,340
Accumulated amortization . . . . . . . . . . . . . . — (1,166) (75) (1,228) (2,469)
Balance at December 31, 2016 . . . . . . . . . . . . . 3,081 3,301 147 342 6,871

a) Goodwill—The goodwill arose from the acquisition of iron ore and nickel business.

b) Concessions—The concessions refer to the agreements with governments for the exploration and
the development of ports and railways. The Company holds railway concessions which are valid over a certain
period of time. Those assets are classified as intangible assets and amortized over the shorter of their useful
lives and the concession term at the end of which they will be returned to the government.

c) Right of use—Refers to the usufruct contract between the Company and noncontrolling
stockholders to use the shares of Empreendimentos Brasileiros de Mineração S.A. (owner of Minerações
Brasileiras Reunidas S.A. shares) and intangible assets identified in the business combination of Vale Canada
Limited (‘‘Vale Canada’’). The amortization of the right of use will expire in 2037 and Vale Canada’s
intangible assets will end in September of 2046.

Accounting policy

Intangibles are carried at the acquisition cost, net of amortization and impairment.

F-45
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

17. Intangibles (Continued)

The estimated useful lives are as follows:

Useful life
Concessions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 to 50 years
Right of use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 to 31 years
Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 years

18. Property, plant and equipment

Changes in property, plant and equipment are as follows:

Mineral Constructions
Land Building Facilities Equipment properties Others in progress Total
Balance at December 31, 2014 . . . . 1,069 11,654 10,813 9,287 14,929 10,954 19,416 78,122
Additions(i) . . . . . . . . . . . . . — — — — — — 9,499 9,499
Disposals . . . . . . . . . . . . . . . (3) (8) (41) (81) (152) (1,554) (22) (1,861)
Assets retirement obligations . . . . — — — — (334) — — (334)
Depreciation, amortization and
depletion . . . . . . . . . . . . . . — (547) (713) (1,066) (864) (766) — (3,956)
Transfers to non-current assets
held for sale . . . . . . . . . . . . — — — — (127) — — (127)
Impairment (note 19) . . . . . . . . (13) (1,828) (838) (1,100) (801) (1,985) (1,766) (8,331)
Impairment of discontinued
operations (note 14) . . . . . . . — — — — (181) 6 18 (157)
Translation adjustment . . . . . . . (292) (3,383) (3,182) (1,846) (2,404) (2,439) (5,327) (18,873)
Transfers . . . . . . . . . . . . . . . 5 3,213 2,253 2,112 238 2,871 (10,692) —
Acquisition of subsidiary . . . . . . — — — 1 — 119 — 120
Balance at December 31, 2015 . . . . 766 9,101 8,292 7,307 10,304 7,206 11,126 54,102
Cost . . . . . . . . . . . . . . . . . . 766 13,707 13,152 12,230 17,054 10,617 11,126 78,652
Accumulated depreciation . . . . . — (4,606) (4,860) (4,923) (6,750) (3,411) — (24,550)
Balance at December 31, 2015 . . . . 766 9,101 8,292 7,307 10,304 7,206 11,126 54,102
Additions(i) . . . . . . . . . . . . . — — — — — — 5,240 5,240
Disposals . . . . . . . . . . . . . . . (1) (8) (9) (19) (125) (384) (20) (566)
Assets retirement obligation . . . . — — — — 311 — — 311
Depreciation, amortization and
depletion . . . . . . . . . . . . . . — (517) (705) (906) (795) (631) — (3,554)
Transfers to non-current assets
held for sale . . . . . . . . . . . . — — — — — (497) — (497)
Impairment (note 19) . . . . . . . . (1) (448) (175) (110) (165) (88) 70 (917)
Impairment of discontinued
operations (note 14) . . . . . . . (53) — (65) — (1,590) — — (1,708)
Translation adjustment . . . . . . . 111 702 960 639 748 861 1,731 5,752
Transfers . . . . . . . . . . . . . . . 26 2,177 1,253 978 230 1,110 (5,857) (83)
Effect of discontinued operations
Transfer to net assets held for sale (124) (333) (80) (1,095) (538) (62) (429) (2,661)
Balance at December 31, 2016 . . . . 724 10,674 9,471 6,794 8,380 7,515 11,861 55,419
Cost . . . . . . . . . . . . . . . . . . 724 16,678 15,664 11,953 16,066 11,319 11,861 84,265
Accumulated depreciation . . . . . — (6,004) (6,193) (5,159) (7,686) (3,804) — (28,846)
Balance at December 31, 2016 . . . . 724 10,674 9,471 6,794 8,380 7,515 11,861 55,419

(i) Includes capitalized borrowing costs, see cash flow.

F-46
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

18. Property, plant and equipment (Continued)

The net book value of property, plant and equipment pledged to secure judicial claims on
December 31, 2016 and 2015 were US$35 and US$44, respectively.

Accounting policy

Property, plant and equipment are evaluated at the cost of acquisition or construction, net of
amortization and impairment.

Mineral properties developed internally are determined by (i) direct and indirect costs attributed to
build the mine site and plant, (ii) financial charges incurred during the construction period, (iii) depreciation
of other fixed assets used during construction, (iv) estimated decommissioning and site restoration expenses,
and (v) other capitalized expenditures occurred during the development phase (phase when the project
demonstrates its economic benefit to the Company, and the Company has ability and intention to complete
the project).

The depletion of mineral properties is determined based on the ratio between production and total
proven and probable mineral reserves.

Property, plant and equipment, other than mineral properties are depreciated using the straight-line
method based on the estimated useful lives, from the date on which the assets become available for their
intended use and are capitalized, except for land which is not depreciated.

The estimated useful lives are as follows:

Useful life
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 to 50 years
Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 to 50 years
Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 to 40 years
Others:
Locomotives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 to 25 years
Wagon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 to 44 years
Railway equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 to 33 years
Ships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 years
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 to 50 years

The residual values and useful lives of assets are reviewed at the end of each fiscal year and adjusted
if necessary.

F-47
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

18. Property, plant and equipment (Continued)

a) Mineral reserves

Critical accounting estimates and judgments

The estimates of proven and probable reserves are regularly evaluated and updated. These reserves
are determined using generally accepted geological estimates. The calculation of reserves requires the
Company to take positions on expected future conditions that are uncertain, including future ore prices,
exchange rates, inflation rates, mining technology, availability of permits and production costs. Changes in
some of these assumptions could have a significant impact on the proven and probable reserves of the
Company.

The estimated volume of mineral reserves is used as basis for the calculation of depletion of the
mineral properties, and also for the estimated useful life which is a major factor to quantify the provision for
asset retirement obligation, environmental recovery of mines and impairment of long lived asset. Any changes
to the estimates of the volume of mine reserves and the useful lives of assets may have a significant impact on
the depreciation, depletion and amortization charges and assessments of impairment.

b) Expenditures and stripping costs

(i) Exploration and evaluation expenditures—Expenditures on mining research are accounted for as
operating expenses until the effective proof of economic feasibility and commercial viability of a given field
can be demonstrated. From then on, the expenditures incurred are capitalized as mineral properties.

(ii) Expenditures on feasibility studies, new technologies and others research—The Company also
conducts feasibility studies for many businesses which it operates including researching new technologies to
optimize the mining process. After these costs are proven to generate future benefits to the Company, the
expenditures incurred are capitalized.

(iii) Maintenance costs—Significant industrial maintenance costs, including spare parts, assembly
services, and others, are recorded in property, plant and equipment and depreciated through the next
programmed maintenance overhaul.

(iv) Stripping Costs—The cost associated with the removal of overburden and other waste materials
(‘‘stripping costs’’) incurred during the development of mines, before production takes place, are capitalized
as part of the depreciable cost of the mineral properties. These costs are subsequently amortized over the
useful life of the mine.

Post-production stripping costs are included in the cost of inventory, except when a new project is
developed to permit access to a significant ore deposits. In such cases, the cost is capitalized as a non-current
asset and is amortized during the extraction of the ore deposits, over the useful life of the ore deposits.

Stripping costs are measured at fixed and variable costs directly and indirectly attributable to its
removal and, when applicable, net of any impairment losses measured in the same basis adopted for the cash
generating unit of which it belongs.

F-48
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

19. Impairment and onerous contracts

The impairment losses (reversals) recognized in the year are presented below:

Book value
(after
impairment) Income statement
as of Impairment (reversals)
Assets or December 31,
Segments by class of assets cash-generating unit 2016 2016 2015 2014
Property, plant and equipment and intangible
Iron ore . . . . . . . . . . . . . . . . . . . . . . . North system 160 (160) 55 –
Coal . . . . . . . . . . . . . . . . . . . . . . . . . Australia 43 27 635 343
Base metals—nickel . . . . . . . . . . . . . . . . Newfoundland (VNL) 1,915 631 3,460 –
Base metals—nickel . . . . . . . . . . . . . . . . Nouvelle Caledonie (VNC) 3,368 284 1,462 238
Base metals—nickel . . . . . . . . . . . . . . . . Onça Puma 2,076 – (252) (1,617)
Coal . . . . . . . . . . . . . . . . . . . . . . . . . Mozambique 1,771 – 2,403 –
Iron ore . . . . . . . . . . . . . . . . . . . . . . . Midwest system – – 522 –
Iron ore . . . . . . . . . . . . . . . . . . . . . . . Simandou Project – – – 1,135
Several segments . . . . . . . . . . . . . . . . . . Other assets – 135 127 –
Impairment of non-current assets . . . . . . . . 917 8,412 99
Onerous contracts . . . . . . . . . . . . . . . . . . 257 357 –
Impairment of non-current assets and onerous
contracts . . . . . . . . . . . . . . . . . . . . . 1,174 8,769 99

Investments in associates and joint ventures

Iron ore . . . . . . . . . . . . . . . . . . . . . . . Samarco Mineração S.A. – – 132 –
Base metals—Copper . . . . . . . . . . . . . . . . Teal Minerals Inc. – – 314 –
Others . . . . . . . . . . . . . . . . . . . . . . . . Vale Soluções em Energia S.A. – – – 31
Impairment of investments in associates and
joint ventures . . . . . . . . . . . . . . . . . . . – 446 31

a) Impairment of non-financial assets

The assets, where a trigger of impairment was identified, were tested using fair value less costs of
disposal (‘‘FVLCS’’) model, except for the pelletizing plant that the value in use (‘‘VIU’’) model was applied.
The FVLCS for each Cash Generating Units (‘‘CGU’’) was assessed considering ‘‘Level 3’’ fair value
measurements, as it is derived from valuation techniques that includes inputs that are not based on observable
market data.

These cash flows were discounted using a post-tax discount rate ranging from 6% to 10%. The
discount rate was based on the weighted average cost of capital (‘‘WACC’’) that reflected the risks specific to
the CGU.

Iron ore and pellets—During 2016, based on new market circumstances, the Company decided to
resume Norte´s system pelletizing plant, based on the studies carried out by management that demonstrates
its economic feasibility. Accordingly, the Company reversed the full impairments of US$160 recorded in 2013
and 2015.

F-49
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

19. Impairment and onerous contracts (Continued)

Of the total goodwill (note 17), US$1,246 is allocated to the group of ferrous mineral CGUs. The
impairment analyses based on FVLCS model indicated that CGUs recoverable amount exceeds its carrying
value; therefore, no impairment was recognized in the financial statements.

In 2015, the Company recognized an impairment loss of US$522 due to lack of competitiveness in the
Midwest system as a consequence of a complex logistic system associated with a consistent decline in iron ore
prices. Accordingly, long-lived assets were fully impaired.

In 2014, for the Simandou project, Vale recognized an impairment of US$1,135 related to the
revocation of Vale’s former 51%-owned subsidiary VBG-Vale BSGR Limited (‘‘VBG’’) mining concessions in
Guinea. During the first quarter of 2015, the investment was sold.

Coal—The Coal assets in Australia were impacted mainly by the revision of the future mining plans,
which resulted in an impairment loss of US$27 in 2016 (US$635 in 2015). The impairment of US$343
registered in 2014 relates to Integra and Isaac Plans operations which were sold during the fourth quarter of
2015.

In relation to the coal assets in Mozambique, Vale recognized an impairment loss of US$2,403 in 2015
due to the reduction in estimated future coal prices combined with the increase of logistics costs, which
decreased the estimated net recoverable amount of these assets. During 2016, no trigger event was identified
for the purpose of impairment reassessing or any additional event or circumstance has changed that would
indicate that the impairment recognized in 2015 is no longer applicable.

Nickel—The decrease in long term nickel price projections, that significantly reduced the recoverable
values of the VNL and VNC CGUs, combined with significant capital investments in new processing facilities
in recent years, resulted in an impairment loss in the amount of US$631 and US$284 (US$3,460 and
US$1,462) in 2016 and 2015 year end, respectively.

The assumption of nickel prices used in the FVLCS calculation for the nickel CGUs is in a range
(US$ per ton) from 10,500 to 20,000 (13,000 to 20,000 in 2015). Cash flows used are designed based on the
life of each UGC and considering a discount rate ranging from 6% to 8% per year.

Of the total goodwill (note 17), US$1,835 is allocated to the group of nickel CGUs. The impairment
analyses based on FVLCS model demonstrates that nickel CGUs recoverable amount exceeds its carrying
value; therefore no impairment was recognized in the financial statements.

In 2014, the Company identified that the indicators which caused an impairment to be recognized in
previous years for Onça Puma were no longer applicable. This was mainly due to Onça Puma’s production
resuming to normal capacity after the furnace problems in 2012. The total impairment registered in 2012 was
reversed in 2014 and 2015.

b) Onerous contract

The provision recognized in 2016, US$183 is related to the contracts with minimum guaranteed
volume for port structure in the Midwest system and US$74 for supply of manganese ore.

F-50
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

19. Impairment and onerous contracts (Continued)

In 2015, the Company recognized a provision related to the fluvial transportation contract with
minimal guarantee volume in the amount of US$357 also in the Midwest system.

c) Impairment of investments in associates and joint ventures

In 2015, the Company recognized an impairment of US$132 in its investment in Samarco (note 21)
and US$314 in Teal Minerals Inc. (‘‘Teal’’). Teal recognized an impairment of property, plant and equipment
due to the revision of future mining plans and the decrease of the copper price.

Accounting policy

Impairment of non-Financial assets—Non-financial assets are reviewed for impairment whenever

events or changes in circumstances indicate that the carrying amount might not be recoverable. An
impairment loss is recognized for the amount by which the asset´s carrying value exceeds its recoverable
amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal (‘‘FVLCS’’) and
value in use (‘‘VIU’’).

FVLCS is generally determined as the present value of the estimated future cash flows expected to
arise from the continued use of the asset, including any expansion prospects, and its eventual disposal. VIU
model is determined as the present value of the estimated future cash flows expected to arise from the
continued use of the asset in its present form. Value in use is determined by applying assumptions specific to
the Group’s continued use and cannot take into account future development. These assumptions are different
to those used in calculating fair value and consequently the VIU calculation is likely to give a different result
to a FVLCS calculation.

The future cash flows are based on the current life-of-mine plan or long-term production plan for the
cash-generating unit.

Assets that have an indefinite useful life and are not subject to amortization, such as goodwill, are
tested annually for impairment.

For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash flows (Cash Generating Units (CGUs)). Goodwill is allocated to Cash Generating
Units or Cash Generating Units groups that are expected to benefit from the business combinations in which
the goodwill arose and are identified in accordance with the operating segment.

Non-current assets (excluding goodwill) in which the Company recognized impairment in the past are
reviewed whenever events or changes in circumstances indicate that the impairment may no longer be
applicable. In such cases, an impairment reversal will be recognized.

Onerous Contracts—For onerous contracts, provision is recognized for the present value of certain
long-term contracts where the unavoidable cost of meeting the Company’s obligations exceed the economic
benefits to be receive under it.

F-51
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

19. Impairment and onerous contracts (Continued)

Critical accounting estimates and judgments

The Company determines its cash flows based on the budgets approved by management, which require
the use of the following key assumptions: (i) mineral reserves and mineral resources measured by internal
experts; (ii) costs and investments based on the best estimate of projects as supported by past performance;
(iii) sale prices consistent with projections available in reports published by industry considering the market
price when appropriate; (iv) the life of each cash-generating unit (ratio between production and mineral
reserves); and (v) discount rates that reflect specific risks relating to the relevant assets in each
cash-generating unit. These assumptions are subject to risk and uncertainty; hence there is a possibility that
changes in circumstances will change these projections, which may impact the recoverable amount of the
assets.

20. Loans, borrowings and cash and cash equivalents

a) Net debt

The Company evaluates the net debt with the objective of ensuring the continuity of its business in
the long term, being able to generate value to its stockholders, through the payment of dividends and capital
gain.

December 31, 2016 December 31, 2015

Debt contracts in the international markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,130 21,671
Debt contracts in Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,192 7,182
Total of loans and borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,322 28,853

(-) cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,262 3,591

Net debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,060 25,262

b) Cash and cash equivalents

Cash and cash equivalents includes cash, immediately redeemable deposits and short-term investments
with an insignificant risk of change in value. They are readily convertible to cash, being US$961 denominated
in R$, indexed to the Brazilian Interbank Interest rate (‘‘DI Rate’’or’’CDI’’), US$2,899 denominated in US$,
mainly time deposits and US$402 denominated in other currencies.

F-52
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

20. Loans, borrowings and cash and cash equivalents (Continued)

c) Loans and borrowings

(i) Total debt

Current liabilities Non-current liabilities

December 31, 2016 December 31, 2015 December 31, 2016 December 31, 2015
Debt contracts in the international markets
Floating rates in:
US$ . . . . . . . . . . . . . . . . . . . . . . . . 234 241 5,489 5,174
EUR . . . . . . . . . . . . . . . . . . . . . . . . – – 211 –
Fixed rates in:
US$ . . . . . . . . . . . . . . . . . . . . . . . . – 1,191 13,083 12,923
EUR . . . . . . . . . . . . . . . . . . . . . . . . – – 1,583 1,633
Other currencies . . . . . . . . . . . . . . . . . 17 14 209 169
Accrued charges . . . . . . . . . . . . . . . . . . 304 326 – –
555 1,772 20,575 19,899
Debt contracts in Brazil
Floating rates in:
R$, indexed to TJLP, TR, IPCA, IGP-M and
CDI . . . . . . . . . . . . . . . . . . . . . . . 402 212 5,621 4,709
Basket of currencies and US$ indexed to
LIBOR . . . . . . . . . . . . . . . . . . . . . 343 290 1,217 1,342
Fixed rates in:
R$ . . . . . . . . . . . . . . . . . . . . . . . . . 66 63 216 268
Accrued charges . . . . . . . . . . . . . . . . . . 294 169 33 129
1,105 734 7,087 6,448
1,660 2,506 27,662 26,347

The future flows of debt payments principal, per nature of funding and interest are as follows:

Principal Estimated future

Bank Capital Development interests
loans markets agencies Total payments(i)
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 – 1,002 1,061 1,583
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,861 791 1,172 3,824 1,369
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,088 1,000 1,361 3,449 1,211
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,593 1,338 926 3,857 1,010
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 622 1,342 912 2,876 844
Between 2022 and 2025 . . . . . . . . . . . . . . . . . . . 1,313 3,292 1,212 5,817 2,299
2026 onwards . . . . . . . . . . . . . . . . . . . . . . . . . 81 7,490 236 7,807 5,319
6,617 15,253 6,821 28,691 13,635

(i) Estimated future payments of interest, calculated based on interest rate curves and foreign exchange rates applicable as at
December 31, 2016 and considering that all amortization payments and payments at maturity on loans and borrowings will be made on
their contracted payments dates. The amount includes the estimated values of future interest payments (not yet accrued), in addition to
interest already recognized in the financial statements.

F-53
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

20. Loans, borrowings and cash and cash equivalents (Continued)

At December 31, 2016, the average annual interest rates by currency are as follows:

Average interest rate(i) Total debt

Loans and borrowings
Floating rates in:
US$ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.92% 20,615
R$(ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.94% 6,624
EUR (iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.82% 1,857
Other currencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.35% 226
29,322

(i) In order to determine the average interest rate for debt contracts with floating rates, the Company used the last renegotiated rate at
December 31, 2016.
(ii) R$ denominated debt that bears interest at IPCA, CDI, TR or TJLP, plus spread. For a total of US$4,668, the Company entered into
derivative transactions to mitigate the exposure to the cash flow variations of the floating rate debt denominated in R$, resulting in an
average cost of 2.42% per year in US$.
(iii) Eurobonds, for which the Company entered into derivatives to mitigate the exposure to the cash flow variations of the debt
denominated in EUR, resulting in an average cost of 4.33% per year in US$.

ii) Credit and financing lines

Period Available amount
Contractual Date of of the Total
Type currency agreement agreement amount December 31, 2016
Credit lines
Revolving credit facilities . . . . . . . . . . . . . . . US$ May 2015 5 years 3,000 3,000
Revolving credit facilities . . . . . . . . . . . . . . . US$ July 2013 5 years 2,000 2,000
Financing lines
BNDES(i) . . . . . . . . . . . . . . . . . . . . . . . R$ April 2008 10 years 2,249 88
BNDES—CLN 150 . . . . . . . . . . . . . . . . . . R$ September 2012 10 years 1,196 6
BNDES—S11D e S11D Logı́stica . . . . . . . . . . R$ May 2014 10 years 1,899 629

(i) Memorandum of understanding signature date, however term is considered from the signature date of each contract amendment. This
credit line supported or supports the pelletizing plant VIII, Onça Puma, Salobo I and II and capital expenditure of Itabira projects.

Liquidity risk—To mitigate such risk, Vale has a revolving credit facilities to assist the short term
liquidity management and to enable more efficiency in cash management, being consistent with the strategic
focus on cost of capital reduction. The revolving credit facilities available today were acquired from a
syndicate of several global commercial banks.

iii) Funding

In January 2016, the Company drew down part of its revolving credit facilities which were fully
amortized in November 2016. There was no outstanding debt on this lines at December 31, 2016.

In June and August 2016, the Company issued through its wholly owned subsidiary Vale Overseas
Limited the guaranteed notes due 2021 and 2026 totaling US$2,250. These notes bear a coupon of 5.875%
and 6.250% per year, respectively, payable semi-annually, and were sold at a price of 100.000% of the
principal amount.

F-54
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

20. Loans, borrowings and cash and cash equivalents (Continued)

In February 2017 (subsequent event), the Company issued through Vale Overseas Limited guaranteed
notes due August 2026 totaling US$1,000. The notes bears 6.250% coupon per year, payable semi-annually,
and were sold at a price of 107.793% of the principal amount. The notes will be consolidated with, and
form a single series with, Vale Overseas’s US$1,000 6.250% notes due 2026 issued on August, 2016,
mentioned above. Vale intends to apply the net proceeds from the offering on the earlier redemption of
Vale’s A750 million notes (due in March 2018), which is expected to occur during March 2017.

iv) Guarantees

As at December 31, 2016 and 2015, loans and borrowings are secured by property, plant and
equipment and receivables in the amount of US$472 and US$495, respectively.

The securities issued through Vale’s 100%-owned finance subsidiary Vale Overseas Limited are fully
and unconditionally guaranteed by Vale.

v) Covenants

Some of the Company’s debt agreements with lenders contain financial covenants. The main covenants
in those agreements require maintaining certain ratios, such as debt to EBITDA (Earnings before Interest
Taxes, Depreciation and Amortization) and interest coverage. The Company has not identified any instances
of noncompliance as at December 31, 2016 and 2015.

Accounting policy

Loans and borrowings are initially measured at fair value, net of transaction costs incurred and are
subsequently carried at amortized cost and updated using the effective interest rate method. Any difference
between the proceeds (net of transaction costs) and the redemption value is recognized in the Income
statement over the period of the loan, using the effective interest rate method. The fees paid in obtaining the
loan are recognized as transaction costs.

Loans and borrowing costs are capitalized as part of property, plants and equipment if those costs are
directly related to a qualified asset. The capitalization occurs until the qualified asset is ready for its intended
use. The average capitalization rate is 37%. Borrowing costs that are not capitalized are recognized in the
income statement in the period in which they are incurred.

F-55
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

21. Liabilities related to associates and joint ventures

Refers to the provision to comply with the obligations under the agreement related to the dam failure
of Samarco Mineração S.A. (‘‘Samarco’’), which is a Brazilian joint venture between Vale S.A. and BHP
Billiton Brasil Ltda. (‘‘BHPB’’), as follows:

a) Framework agreement

Samarco and its shareholders, Vale S.A. and BHPB, entered into an Agreement (‘‘Framework
Agreement’’) in connection with the US$6.2 billion (R$20.2 billion) lawsuit on March 2, 2016 with the
Brazilian federal government, the two Brazilian states affected by the failure (Espı́rito Santo and Minas
Gerais) and other governmental authorities in order to implement the programs for remediation and
compensation of the areas and communities affected by Samarco’s dam (Fundão) failure.

The Framework Agreement does not contemplate admission of civil, criminal or administrative liability
for the Fundão dam failure.

The Framework Agreement has a 15-year term, renewable for successive one-year periods until all the
obligations under the Framework Agreement have been performed.

Under the Framework Agreement, Samarco, Vale S.A. and BHPB have agreed to establish a
foundation to develop and implement social and economic remediation and compensation, to be funded by
Samarco as follows: US$614 (R$2.0 billion) in 2016, US$368 (R$1.2 billion) in 2017 and US$368
(R$1.2 billion) in 2018. From 2019 to 2021, annual contributions to the foundation will range from US$245
(R$800) to US$491 (R$1.6 billion) based on the projects approved for the relevant year. From 2022 onwards,
the annual contributions will be determined on the basis of the amount of funding necessary to complete
remaining programs approved for each relevant year. The foundation will allocate an annual amount of
US$74 (R$240) over 15 years to the implementation of compensation programs, and these annual amounts
are included in the annual contributions described above for the first six years. Through the end of 2018,
Samarco is expected to provide US$153 (R$500) for sewage collection and treatment and solid waste disposal
under the terms of the Framework Agreement.

To the extent that Samarco does not meet its funding obligations to the foundation, each of Vale S.A.
and BHPB will provide, under the terms of the Framework Agreement, funds to the Foundation in
proportion to its 50% equity interest in Samarco.

On June 24, 2016, the Renova Foundation (‘‘Foundation’’) was constituted, under the Framework
Agreement, to develop and implement the socio-economic restoration and compensation programs. The
Foundation began its operations in August of 2016.

As the consequence of the dam failure, governmental authorities ordered the suspension of Samarco’s
operations.

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 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

21. Liabilities related to associates and joint ventures (Continued)

b) Estimates used for the provision

Samarco initially expected to resume its operations in the last quarter of 2016. Based on this
assumption, Samarco´s cash flow projections indicated that it would be able to generate all or a substantial
part of the funding required under the Framework Agreement. This assumption was supported by studies of
appropriate technical solutions for the resumption of operations, as well as the progress of the work on the
remaining dam structures after the failure and the implementation of the socio-economic and socio-
environmental programs contemplated in the Framework Agreement.

In light of the stage of procedures necessary to resume operations and the uncertainties related to the
licensing approval by governmental authorities during 2016, Samarco revised its assumption and concluded
that was unable to make a reliable estimate of how and when its operations will resume.

Due to the above, as well as additional uncertainties regarding Samarco’s cash flow, Vale S.A.
recognized a provision on its interim financial statements as of June 30, 2016, for estimated costs in the
amount of US$1,732 (R$5,560) which was discounted at a risk-free rate, resulting in US$1,163 (R$3,733)
provision, which represents Vale S.A.’s best estimate of the obligation to comply with the reparation and
compensation programs under the Framework Agreement, equivalent to its 50% equity interest in Samarco.

In August 2016, Samarco issued non-convertible private debentures which were subscribed equally by
Vale S.A. and BHPB, and the resources contributed by Vale S.A. were allocated as follows: (i) US$68
(R$222) was used by Samarco in the reparation programs in accordance with the Framework Agreement, and
therefore, applied against the provision of US$1,163 (R$3,733) mentioned above; and (ii) US$71 (R$234) was
applied by Samarco’s to fund its working capital, and recognized in Vale’s income statement as ‘‘Impairment
and other results in associates and joint ventures’’. Vale S.A. intends to make available short-term facilities in
the first half of 2017 of up to US$115 (R$375) to Samarco to support its operations, without undertaking an
obligation to Samarco. Funds for working capital requirements will be released as needed by the shareholders
subject to achieving certain milestones.

As a result of constituting the Foundation, most of the reparation and compensation programs were
transferred from Samarco. Therefore, Vale S.A. made contributions to the Foundation totaling US$71 (R$
239) to be used in the programs in accordance with the Framework Agreement.

As a result of the above mentioned, the movements of the provision during the year are as follows:

2016
Balance on January 1, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –
Provision recognized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,163
Payments made . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (139)
Discount rate accretion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Translation adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (19)
Balance on December 31, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,077

Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 292

Non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 785
Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,077

F-57
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

21. Liabilities related to associates and joint ventures (Continued)

At each reporting period, Vale S.A. will reassess the key assumptions used by Samarco in the
preparation of the projected future cash flows and will adjust the provision, if required.

c) Relevant information of Samarco

Samarco is a Brazilian entity jointly controlled by Vale S.A. and BHPB, in which each shareholder has
a 50% ownership interest.

Samarco operates an integrated enterprise consisting of mining, beneficiation and concentration of

low-grade iron ore in the municipality of Mariana, in the State of Minas Gerais, as well as the hauling of such
concentrated ore through ore pipelines connecting the its two operating plants located in Minas Gerais and
Espı́rito Santo.

On November 5, 2015, Samarco experienced the failure of an iron ore tailings dam (‘‘Fundão’’) in the
state of Minas Gerais, which affected communities and ecosystems, including the Rio Doce river. Following
the dam failure, the state government of Minas Gerais ordered the suspension of Samarco’s operations.

The summarized financial information about Samarco are as follows:

December 31, 2016
Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165
Non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,510
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,675
Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,853
Non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,015
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,868
Stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,193)
Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (769)

Under Brazilian legislation and the terms of the joint venture agreement, Vale does not have an
obligation to provide funding to Samarco. As a result, Vale’s investment in Samarco was reduced to zero.

Since the initial date of the accident, Samarco and its shareholders disbursed the total amount of
US$614 (R$2.0 billion) to comply with the obligations under the Framework Agreement.

d) Contingencies related to Samarco accident

(i) Public civil claim filed by the Federal Government and others

The federal government, the two Brazilian states affected by the failure (Espirito Santo and Minas
Gerais) and other governmental authorities have initiated a public civil lawsuit against Samarco and its
shareholders, Vale S.A. and BHPB, with an estimated value indicated by the plaintiffs of US$6.2 billion
(R$20.2 billion).

F-58
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

21. Liabilities related to associates and joint ventures (Continued)

On May 5, 2016, the Framework Agreement, which was signed on March 2, 2016, was ratified by the
Federal Regional Court (‘‘TRF’’), 1st Region. In June 2016 the Superior Court of Justice (‘‘STJ’’) in Brazil
issued an interim order, suspending the decision of TRF, which ratified the Framework Agreement until the
final judgments of the claim.

On August 17, 2016, the TRF of the 1st Region rejected the appeal presented by Samarco, Vale S.A.
and BHPB against the interim order, and overruled the judicial decision that ratified the Framework
Agreement. This decision of the TRF of the 1st Region, among other measures, confirmed a prior injunction
that prohibited the defendants from transferring or conveying any of their interest in its Brazilian iron ore
concessions, without, however, limiting their production and commercial activities and ordered a deposit with
the court of US$368 (R$1.2 billion) by January 2017. This US$368 (R$1.2 billion) cash deposit was
provisionally replaced by the guarantees provided for under the agreements with MPF, as described below.

In January 2017 Samarco, Vale S.A. and BHPB entered into two preliminary agreements with the
Federal Prosecutor’s Office in Brazil (MPF).

The first agreement (‘‘First Agreement’’) aims to outline the process and timeline for negotiations of a
Final Agreement (‘‘Final Agreement’’), expected to occur by June 30th, 2017. This First Agreement sets the
ground for conciliation of two public civil actions which aim to establish socio-economic and socio-
environmental remediation and compensation programs for the impacts of the Fundão dam failure,
respectively: claim nº 023863-07.2016.4.01.3800, filed by the Federal Prosecutors (amounting to US$48 billion
(R$155 billion)), as mentioned in item (ii) below, and claim nº 0069758-61.2015.4.01.3400, filed by the Federal
Government, the states of Minas Gerais and Espı́rito Santo and other governmental authorities (amounting to
US$6.2 billion (R$ 20.2 billion)). Both claims were filed with the 12th Judicial Federal Court of Belo
Horizonte.

The First Agreement provides for: (i) the appointment of experts selected by the Federal Prosecutors
and paid for by the companies to conduct a diagnosis and follow the progress of the 41 programs under the
Framework Agreement signed on March 2nd, 2016 by the companies and the Federal Government and the
states of Minas Gerais and Espı́rito Santo and other governmental authorities and (ii) holding at least eleven
public hearings by April 15th, 2017, five of which are to be held in Minas Gerais, three in Espı́rito Santo and
the remainder in the indigenous territories of the Krenak, Comboios and Caieiras Velhas, in order to allow
these communities to take part in the definition of the content of the Final Agreement.

F-59
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

21. Liabilities related to associates and joint ventures (Continued)

Under the First Agreement, Samarco, Vale S.A. and BHPB will provide the 12th Judicial Federal
Court of Belo Horizonte with a guarantee for fulfillment of the obligations regarding the financing and
payment of the socio-environmental and socio-economic remediation programs resulting from the Fundão
dam failure, pursuant to the two public civil actions, until the signing of the Final Agreement, amounting to
US$675 (R$2.2 billion), of which (i) US$31 (R$100) in financial investments; ii) US$399 (R$1.3 billion) in
insurance bonds; and (iii) US$245 (R$800) in assets of Samarco. The guarantee will remain in place until the
completion of the negotiations for the Final Agreement or until June 30th, 2017, whichever comes first. In
order to implement the First Agreement, it has been requested that the 12th Judicial Federal Court of Belo
Horizonte accept such guarantees until the completion of the negotiations and the signing of the Final
Agreement, or until the parties reach a new agreement regarding the guarantees. If, by June 30th, the
negotiations have not been completed, the Federal Prosecutor’s Office may require that the 12th Judicial
Federal Court of Belo Horizonte re-institute the order for the deposit of US$368 (R$1.2 billion) in relation to
the US$6.2 billion (R$20.2 billion) public civil action, which is currently suspended.

In addition, the Second Agreement (Second Agreement) was signed, which establishes a timetable to
make funds available to remediate the social, economic and environmental damages caused by the Fundão
dam failure in the municipalities of Barra Longa, Rio Doce, Santa Cruz do Escalvado and Ponte Nova,
amounting to US$61 (R$200).

The terms of the two Agreements are subject to ratification by the courts.

(ii) Public civil action filed by Federal Prosecution Office

On May 3, 2016, the Federal Prosecution Office (MPF) filed a public civil action against Samarco and
its shareholders and presented several demands, including: (i) the adoption of measures for mitigating the
social, economic and environmental impacts resulting from the Fundão dam failure and other emergency
measures; (ii) the payment of compensation to the community; and (iii) payments for the collective moral
damage. The initial action value claimed by the Federal Prosecution Office (MPF) is US$48 billion
(R$155 billion). The first conciliatory hearing was held on September 13, 2016. On November 21, 2016, the
court ordered that the defendants be served, and the defendants submitted their defense. Given the
negotiations of a potential settlement, the parties jointly requested the suspension of the proceeding, in
accordance with the First Agreement.

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 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

21. Liabilities related to associates and joint ventures (Continued)

(iii) U.S. Securities class action suits

On May 2, 2016, Vale S.A. and certain of its officers were named as defendants in securities class
action suits in the Federal Court in New York brought by holders of Vale’s American Depositary Receipts
under U.S. federal securities laws. The lawsuits allege that Vale S.A. made false and misleading statements or
omitted to make disclosures concerning the risks and dangers of the operations of Samarco’s Fundão dam and
the adequacy of related programs and procedures. The plaintiffs have not specified an amount of alleged
damages in these actions. Vale S.A. intends to vigorously and fully defend itself against the allegations. The
litigation is at an early stage. On March 7, 2016, the judge overseeing the securities class actions issued an
order consolidating these actions and designating lead plaintiffs and counsel. On April 29, 2016, lead plaintiffs
filed a Consolidated Amended Complaint that will serve as the operative complaint in the litigation. In July
2016, Vale S.A. and the individual defendants filed a motion to dismiss the Amended Complaint. In August
2016, the plaintiffs submitted their opposition to the motion to dismiss, to which the defendants replied in
September 2016. The decision on the motion to dismiss remains pending.

(iv) Criminal lawsuit

On October 20, 2016, the MPF brought a criminal lawsuit in the Brazilian Federal Justice Court
against Vale S.A., BHPB, Samarco, VogBr Recursos Hı́dricos e Geotecnia Ltda. and 22 individuals for alleged
crimes against the environment, urban planning and cultural heritage, flooding, landslide, as well as for
alleged crimes against the victims of the Fundão dam failure.

On November 16, 2016, the judge received the Federal Prosecutors Office criminal lawsuit and
determined the summons of all defendants, granting 30 days each to file their defenses, to count from the day
they receive the summon. Vale has already been served and its deadline to present its defense is March 3,
2017.

(v) Other lawsuits

In addition, Samarco and its shareholders were named as a defendant in several other lawsuits
brought by individuals, corporations and governmental entities seeking personal and property damages.

These lawsuits and petitions are at early stages, so it is not possible to determine a range of outcomes
or reliable estimates of the potential exposure at this time. No contingent liability has been quantified and no
provision was recognized for lawsuits related to Samarco´s dam failure.

Critical accounting estimates and judgments

The provision requires the use of assumptions that may be mainly affected by: (i) changes in scope of
work required under the Framework Agreement as result of further technical analysis, (ii) resolution of
uncertainty in respect of the resume the Samarco´s operation; (iii) updates in the discount rate; and
(iv) resolution of existing and potential legal claims. As a result, future expenditures may differ from the
amounts currently provided and changes to key assumptions could result in a material impact to the amount
of the provision in future reporting periods.

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 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

22. Risk management

Vale considers that an effective risk management is key to support the achievement of the company
objectives and to ensure the financial strength and flexibility of the company and the business continuity.

Therefore, Vale has developed its risk management strategy in order to provide an integrated
approach of the risks the company is exposed to, considering not only the risks generated by variables traded
in financial markets (market risk) and those arising from liquidity risk, but also the risk from counterparties
obligations (credit risk) and those relating to inadequate or failed internal processes, people, systems or
external events (operational risk), among others.

a) Risk management policy

The Board of Directors established a corporate risk management policy defining principles and
guidelines applicable to this process in the company and the corresponding governance structure.

This policy determines that corporate risks should be measured and monitored, regularly, in an
integrated manner, in order to ensure that the company overall risk level remains aligned with its strategic
guidelines.

The Executive Risk Management Committee, created by the Board of Directors, is responsible for
supporting the Executive Board in the risk management decisions, issuing opinions and recommendations. It
is also responsible for the supervision and revision of the principles and instruments of corporate risk
management.

The Executive Board is responsible for the approval of the policy deployment into norms, rules and
responsibilities and for reporting to the Board of Directors about such procedures.

The risk management norms and instructions complement the corporate risk management policy and
define practices, processes, controls, roles and responsibilities.

The Company may, when necessary, allocate specific risk limits to management activities, including but
not limited to, market risk limit, corporate and sovereign credit limit, in accordance with the acceptable
corporate risk limit.

b) Liquidity risk management

The liquidity risk arises from the possibility that Vale might not perform its obligations on due dates,
as well as face difficulties to meet its cash requirements due to market liquidity constraints.

See note 20 ‘‘Loans, borrowing and cash and cash equivalents’’ for details on the Group’s liquidity
risk.

F-62
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

22. Risk management (Continued)

c) Credit risk management

Vale’s exposure to credit risk arises from trade receivables, derivative transactions, guarantees, down
payment for suppliers and cash investments. Our credit risk management process provides a framework for
assessing and managing counterparties’ credit risk and for maintaining our risk at an acceptable level.

(i) Commercial credit risk management

See note 10 ‘‘Accounts receivables’’ for details on commercial credit risk.

(ii) Treasury credit risk management

To manage the credit exposure arising from cash investments and derivative instruments, credit limits
are approved to each counterparty with whom we have credit exposure.

Furthermore, we control the portfolio diversification and monitor different indicators of solvency and
liquidity of the different counterparties that were approved for trading.

d) Market risk management

Vale is exposed to the behavior of several market risk factors that can impact its cash flow. The
assessment of this potential impact arising from the volatility of risk factors and their correlations is
performed periodically to support the decision making process regarding the risk management strategy, that
may incorporate financial instruments, including derivatives.

The portfolio of these financial instruments is monitored on a monthly basis, enabling financial results
surveillance and its impact on cash flow.

Considering the nature of Vale’s business and operations, the main market risk factors which the
Company is exposed to are:

• Foreign exchange and interest rates;

• Product prices and input costs.

e) Foreign exchange and interest rate risk

The company’s cash flow is subjected to volatility of several currencies, as its product are
predominantly priced in US dollar, while most of the costs, disbursements and investments are denominated
in other currencies, mainly Brazilian real and Canadian dollar.

In order to reduce the potential impact that arises from this currency mismatch, derivatives
instruments may be used as a risk mitigation strategy.

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 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

22. Risk management (Continued)

Vale implements hedge transactions to protect its cash flow against the market risks that arises from
its debt obligations—mainly currency volatility. The hedges cover most of the debts in Brazilian reais and
euros. We use swap and forward transactions to convert debt linked to Brazilian real and Euros into US
dollar, with volumes, flows and settlement dates similar to those of the debt instruments—or sometimes lower,
subject to market liquidity conditions.

Hedging instruments with shorter settlement dates are renegotiated through time so that their final
maturity matches—or becomes closer—to the debts’ final maturity. At each settlement date, the results of the
swap and forward transactions partially offset the impact of the foreign exchange rate in Vale’s obligations,
contributing to stabilize the cash disbursements in US dollar.

Vale has also exposure to interest rates risks over loans and financings. The US Dollar floating rate
debt in the portfolio consists mainly of loans including export pre-payments, commercial banks and
multilateral organizations loans. In general, such debt instruments are indexed to the LIBOR (London
Interbank Offer Rate) in US dollar. We take advantage of the potential correlation between commodity prices
and U.S. dollar floating interest rates as a partial natural hedge for our cash flow.

f) Risk of product and input prices

Vale is also exposed to market risks including commodities price and input price volatilities. In
accordance with risk management policy, risk mitigation strategies involving commodities can be used to
adjust the cash flow risk profile and reduce Vale’s cash flow volatility. For this kind of risk mitigation strategy,
Vale uses predominantly forwards, futures or zero-cost collars.

g) Operational risk management

The operational risk management is the structured approach that Vale uses to manage uncertainty
related to possible inadequate or failure in internal processes, people, systems and external events, in
accordance with the principles and guidelines of ISO 31000.

The main operational risks are periodically monitored, ensuring the effectiveness of preventive and
mitigating key controls in place and the execution of the risk treatment strategy (implementation of new or
improved controls, changes in the risk environment, risk sharing by contracting insurance, provisioning of
resources, etc.).

Therefore, the Company seeks to have a clear view of its major risks, the best cost-benefit mitigation
plans and the effectiveness of the controls in place, monitoring the potential impact of operational risk and
allocating capital efficiently.

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 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

22. Risk management (Continued)

h) Capital management

The Company’s policy aims at establishing a capital structure that will ensure the continuity of your
business in the long term. Within this perspective, the Company has been able to deliver value to stockholders
through dividend payments and capital gain, and at the same time maintain a debt profile suitable for its
activities, with an amortization well distributed over the years, thus avoiding a concentration in one specific
period.

i) Insurance

Vale contracts several types of insurance policies, such as operational risk policy, engineering risks
insurance (projects), civil responsibility, life insurance policy for their employees, among others. The coverage
of these policies is similar to the ones used in general by the mining industry and is issued in line with the
objectives defined by the Company, with the corporate risk management policy and the limitation imposed by
the insurance and reinsurance global market. In general, the company’s assets directly related with its
operations are included in the coverage of insurance policies.

Insurance management is performed with the support of existing insurance committees in the various
operational areas of the Company. Among the management instruments, Vale uses captive reinsurance to
balance the price on reinsurance contracts with the market, as well as, enable direct access to key
international markets of insurance and reinsurance.

F-65
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

23. Financial instruments classification

The Company classifies its financial instruments in accordance with the purpose for which they were
acquired, and determines the classification and initial recognition according to the following categories:

December 31, 2016 December 31, 2015

Derivatives
Loans and At fair value Loans and At fair value designated
receivables or through net receivables or through net as hedge
Financial assets amortized cost income Total amortized cost income accounting Total
Current
Cash and cash equivalents . . . . . . 4,262 – 4,262 3,591 – – 3,591
Financial investments . . . . . . . . . 18 – 18 28 – – 28
Derivative financial instruments . . . – 274 274 – 121 – 121
Accounts receivable . . . . . . . . . 3,663 – 3,663 1,476 – – 1,476
Related parties . . . . . . . . . . . . 71 – 71 70 – – 70
8,014 274 8,288 5,165 121 – 5,286
Non-current
Derivative financial instruments . . . – 446 446 – 93 – 93
Loans . . . . . . . . . . . . . . . . . 180 – 180 188 – – 188
Related parties . . . . . . . . . . . . 2 – 2 1 – – 1
182 446 628 189 93 – 282
Total of financial assets . . . . . . . . 8,196 720 8,916 5,354 214 – 5,568

Financial liabilities
Current
Suppliers and contractors . . . . . . 3,630 – 3,630 3,365 – – 3,365
Derivative financial instruments . . . – 414 414 – 2,023 53 2,076
Loans and borrowings . . . . . . . . 1,660 – 1,660 2,506 – – 2,506
Related parties . . . . . . . . . . . . 672 – 672 475 – – 475
5,962 414 6,376 6,346 2,023 53 8,422
Non-current
Derivative financial instruments . . . – 1,225 1,225 – 1,570 – 1,570
Loans and borrowings . . . . . . . . 27,662 – 27,662 26,347 – – 26,347
Related parties . . . . . . . . . . . . 127 – 127 213 – – 213
Participative stockholders’
debentures . . . . . . . . . . . . . – 775 775 – 342 – 342
27,789 2,000 29,789 26,560 1,912 – 28,472
Total of financial liabilities . . . . . . 33,751 2,414 36,165 32,906 3,935 53 36,894

F-66
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

23. Financial instruments classification (Continued)

The classification of financial assets and liabilities by currencies are as follows:

December 31, 2016
Others
Financial assets R$ US$ CAD AUD EUR currencies Total
Current
Cash and cash equivalents . . . . . . . . 961 2,899 45 25 56 276 4,262
Financial investments . . . . . . . . . . . 1 17 – – – – 18
Derivative financial instruments . . . . . 104 170 – – – – 274
Accounts receivable . . . . . . . . . . . . 337 3,310 – – 1 15 3,663
Related parties . . . . . . . . . . . . . . 71 – – – – – 71
1,474 6,396 45 25 57 291 8,288
Non-current
Derivative financial instruments . . . . . 400 46 – – – – 446
Loans . . . . . . . . . . . . . . . . . . . . 35 96 49 – – – 180
Related parties . . . . . . . . . . . . . . 2 – – – – – 2
437 142 49 – – – 628
Total of assets . . . . . . . . . . . . . . . . 1,911 6,538 94 25 57 291 8,916
Financial liabilities
Current
Suppliers and contractors . . . . . . . . 1,897 948 612 7 96 70 3,630
Derivative financial instruments . . . . . 317 97 – – – – 414
Loans and borrowings . . . . . . . . . . 752 827 17 – 64 – 1,660
Related parties . . . . . . . . . . . . . . 319 353 – – – – 672
3,285 2,225 629 7 160 70 6,376
Non-current
Derivative financial instruments . . . . . 1,052 173 – – – – 1,225
Loans and borrowings . . . . . . . . . . 5,869 19,790 209 – 1,794 – 27,662
Related parties . . . . . . . . . . . . . . 127 – – – – – 127
Participative stockholders’ debentures . 775 – – – – – 775
7,823 19,963 209 – 1,794 – 29,789
Total of liabilities . . . . . . . . . . . . . . 11,108 22,188 838 7 1,954 70 36,165

F-67
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

23. Financial instruments classification (Continued)

December 31, 2015

Others
Financial assets R$ US$ CAD AUD EUR currencies Total
Current
Cash and cash equivalents . . . . . . . . . 816 2,528 12 54 11 170 3,591
Financial investments . . . . . . . . . . . . – 28 – – – – 28
Derivative financial instruments . . . . . . 50 71 – – – – 121
Accounts receivable . . . . . . . . . . . . . 251 1,084 125 10 4 2 1,476
Related parties . . . . . . . . . . . . . . . . 70 – – – – – 70
1,187 3,711 137 64 15 172 5,286
Non-current
Derivative financial instruments . . . . . . 75 18 – – – – 93
Loans . . . . . . . . . . . . . . . . . . . . . 27 103 58 – – – 188
Related parties . . . . . . . . . . . . . . . . 1 – – – – – 1
103 121 58 – – – 282
Total of assets . . . . . . . . . . . . . . . . 1,290 3,832 195 64 15 172 5,568
Financial liabilities
Current
Suppliers and contractors . . . . . . . . . . 1,499 1,389 335 9 115 18 3,365
Derivative financial instruments . . . . . . 911 1,165 – – – – 2,076
Loans and borrowings . . . . . . . . . . . 434 1,992 15 – 65 – 2,506
Related parties . . . . . . . . . . . . . . . . 475 – – – – – 475
3,319 4,546 350 9 180 18 8,422
Non-current
Derivative financial instruments . . . . . . 1,356 214 – – – – 1,570
Loans and borrowings . . . . . . . . . . . 5,107 19,439 165 3 1,633 – 26,347
Related parties . . . . . . . . . . . . . . . . 73 140 – – – – 213
Participative stockholders’ debentures . . 342 – – – – – 342
6,878 19,793 165 3 1,633 – 28,472
Total of liabilities . . . . . . . . . . . . . . 10,197 24,339 515 12 1,813 18 36,894

F-68
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

24. Fair value estimate

Due to the short-term cycle, it is assumed that the fair value of cash and cash equivalents balances,
financial investments, accounts receivable and accounts payable approximate their book values. For the
measurement and determination of fair value, the Company uses various methods including market, income
or cost approaches, in order to estimate the value that market participants would use when pricing the asset
or liability. The financial assets and liabilities recorded at fair value are classified and disclosed in accordance
with the following levels:

Level 1—unadjusted quoted prices on an active, liquid and visible market for identical assets or
liabilities that are accessible at the measurement date;

Level 2—quoted prices (adjusted or unadjusted) for identical or similar assets or liabilities on active
markets; and

Level 3—assets and liabilities, for which quoted prices, do not exist, or where prices or valuation
techniques are supported by little or no market activity, unobservable or illiquid.

a) Assets and liabilities measured and recognized at fair value:

December 31, 2016 December 31, 2015
Level 2 Level 3 Total Level 2 Level 3 Total
Financial assets
Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . 405 315 720 214 – 214
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 405 315 720 214 – 214

Financial liabilities
Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,008 449 1,639 3,505 141 3,646
Participative stockholders’ debentures . . . . . . . . . . . . . . . . . . . . . . . 775 – 775 342 – 342
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,783 449 2,414 3,847 141 3,988

Methods and techniques of evaluation

i) Derivative financial instruments

Financial instruments are evaluated by calculating their present value through yield curves at the
closing dates. The curves and prices used in the calculation for each group of instruments are detailed in the
‘‘market curves’’.

The pricing method used for European options is the Black & Scholes model. In this model, the fair
value of the derivative is a function of the volatility in the price of the underlying asset, the exercise price of
the option, the interest rate and period to maturity. In the case of options which income is a function of the
average price of the underlying asset over the period of the option, the Company uses Turnbull & Wakeman
model. In this model, in addition to the factors that influence the option price in the Black-Scholes model,
the formation period of the average price is also considered.

F-69
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

24. Fair value estimate (Continued)

In the case of swaps, both the present value of the assets and liability are estimated by discounting the
cash flow by the interest rate of the currency in which the swap is denominated. The difference between the
present value of the assets and the liabilities generates its fair value.

For to the Long Term Interest Rate (‘‘TJLP’’) swaps, the calculation of the fair value assumes that
TJLP is constant, and the projections of future cash flow in Brazilian Reais are made on the basis of the last
TJLP disclosed.

Contracts for the purchase or sale of products, inputs and costs of selling with future settlement are
priced using the forward yield curves for each product. Typically, these curves are obtained on the stock
exchanges where the products are traded, such as the London Metals Exchange (‘‘LME’’), the Commodity
Exchange (‘‘COMEX’’) or other providers of market prices. When there is no price for the desired maturity,
Vale uses an interpolation between the available maturities.

The fair value for derivatives classified in level 3 are measured using discounted cash flows and option
model valuation techniques with main unobservable inputs discount rates, stock prices and commodities
prices.

ii) Participative stockholders’ debentures–Consist of the debentures issued during the privatization process
(note 32(b)), which fair values are measured based on the market approach. Reference prices are
available on the secondary market.

Critical accounting estimates and judgments

The fair values of financial instruments that are not traded in active markets are determined using
valuation techniques. Vale uses its own judgment to choose between the various methods. Assumptions are
based on the market conditions, at the end of the year.

An analysis of the impact if actual results are different from management’s estimates is present on
note 33 (sensibility analysis).

b) Fair value of financial instruments not measured at fair value

The fair value estimate for level 1 is based on market approach considering the secondary market
contracts. For loans allocated to level 2, the income approach is adopted and the fair value for both fixed-
indexed rate debt and floating rate debt is determined on a discounted cash flows basis using LIBOR future
values and Vale’s bonds curve.

The fair values and carrying amounts of non-current loans (net of interest) are as follows:

Financial liabilities Balance Fair value Level 1 Level 2

December 31, 2016
Debt principal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,691 27,375 13,874 13,501
December 31, 2015
Debt principal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,229 26,233 12,297 13,936

F-70
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

25. Derivative financial instruments

a) Derivatives effects on statement of financial position

Assets
December 31, 2016 December 31, 2015
Current Non-current Current Non-current
Derivatives not designated as hedge accounting
Foreign exchange and interest rate risk
CDI & TJLP vs. US$ fixed and floating rate swap . . . . . . . . . . . . . . . . 132 1 69 –
IPCA swap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 61 2 16
Pré-dolar swap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 23 – –
140 85 71 16
Commodities price risk
Nickel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 2 50 11
Bunker oil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130 – – –
134 2 50 11
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – 359 – 66
– 359 – 66
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 274 446 121 93

Liabilities
December 31, 2016 December 31, 2015
Current Non-current Current Non-current
Derivatives not designated as hedge accounting
Foreign exchange and interest rate risk
CDI & TJLP vs. US$ fixed and floating rate swap . . . . . . . . . . . . . . . . 293 638 799 1,131
IPCA swap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 57 21 101
Eurobonds swap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 45 146 29
Euro Forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 – – –
Pre dollar swap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 32 93 72
371 772 1,059 1,333
Commodities price risk
Nickel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 2 40 10
Bunker oil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 – 924 –
43 2 964 10
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – 451 – 227
– 451 – 227
Derivatives designated as cash flow hedge accounting
Bunker oil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – – 50 –
Foreign exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – – 3 –
– – 53 –
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 414 1,225 2,076 1,570

F-71
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

25. Derivative financial instruments (Continued)

b) Effects of derivatives on the income statement, cash flow and other comprehensive income

Year ended December 31

Gain(loss) recognized in
Gain (loss) recognized in Financial settlement other comprehensive
the income statement inflows(outflows) income
2016 2015 2014 2016 2015 2014 2016 2015 2014
Derivatives not designated as hedge
accounting
Foreign exchange and interest rate risk
CDI & TJLP vs. US$ fixed and floating
rate swap . . . . . . . . . . . . . . . . 869 (1,172) (437) (513) (330) 4 – – –
IPCA swap . . . . . . . . . . . . . . . . . 78 (61) (58) (25) 7 – – – –
Eurobonds swap . . . . . . . . . . . . . . (19) (130) (160) (142) (13) 10 – – –
Euro forward . . . . . . . . . . . . . . . (46) – – – – – – – –
Pre dollar swap . . . . . . . . . . . . . . 77 (139) (28) (90) (42) 7 – – –
959 (1,502) (683) (770) (378) 21 – – –
Commodities price risk
Nickel . . . . . . . . . . . . . . . . . . . . (42) (49) 9 (30) (62) 12 – – –
Bunker oil . . . . . . . . . . . . . . . . . 268 (742) (533) (799) (270) (90) – – –
226 (791) (524) (829) (332) (78) – – –
Others . . . . . . . . . . . . . . . . . . . . . 74 (142) (5) – – – – – –
Derivatives designated as cash flow hedge
accounting
Bunker oil . . . . . . . . . . . . . . . . . – (439) (81) – (450) (81) – 435 (423)
Foreign exchange . . . . . . . . . . . . . (3) (42) (41) (3) (42) (41) 2 17 8
(3) (481) (122) (3) (492) (122) 2 452 (415)
Total . . . . . . . . . . . . . . . . . . . . . . 1,256 (2,916) (1,334) (1,602) (1,202) (179) 2 452 (415)

During 2015, the Company implemented bunker oil purchase cash flows protection program and
recognized as cost of goods sold and services rendered and financial expense the amounts of US$439 and
US$2,477, respectively. In 2016, all derivatives impacts were charged to financial results.

The maturity dates of the derivative financial instruments are as follows:

Last maturity dates

Currencies and interest rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 2023
Bunker oil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . December 2017
Nickel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . December 2018
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . December 2027

F-72
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

25. Derivative financial instruments (Continued)

Accounting policy

Derivatives transactions which are not qualified as hedge accounting are presented as economic hedge,
as the Company uses derivative instruments to manage its financial risks as a way of hedging against these
risks. Derivative financial instruments are recognized as assets or liabilities in the balance sheet and are
measured at their fair values. Changes in the fair values of derivatives are recorded in income statement or in
stockholders’ equity when the transaction is eligible to be characterized as effective hedge accounting.

On the beginning of the hedge accounting operations, the Company documents the relationship
between hedging instruments and hedged items with the objective of risk management and strategy for
carrying out hedging operations. The Company also documents, both initially and on a continuously basis, that
its assessment of whether the derivatives used in hedging transactions are highly effective.

The effective components of changes in the fair values of derivative financial instruments designated
as cash flow hedges are recorded as unrealized fair value gain or losses and recognized in stockholders’
equity; and their non-effective components recorded in income statement. The amounts recorded in the
statement of comprehensive income, will only be transferred to income statement (costs, operating expenses
or financial expenses) when the hedged item is actually realized.

Additional information about derivatives financial instruments

In millions of United States dollars, except as otherwise stated

The risk of the derivatives portfolio is measured using the delta-Normal parametric approach, and
considers that the future distribution of the risk factors and its correlations tends to present the same statistic
properties verified in the historical data. The value at risk estimate considers a 95% confidence level for a
one-business day time horizon.

There was no cash amount deposited as margin call regarding derivative positions on December 31,
2016. The derivative positions described in this document did not have initial costs associated.

The following tables detail the derivatives positions for Vale and its controlled companies as of
December 31, 2016, with the following information: notional amount, fair value including credit risk, gains or
losses in the period, value at risk and the fair value breakdown by year of maturity.

a) Foreign exchange and interest rates derivative positions

(i) Protection programs for the R$ denominated debt instruments

In order to reduce cash flow volatility, swap transactions were implemented to convert into US$ the
cash flows from certain debt instruments denominated in R$ with interest rates linked mainly to CDI, TJLP
and IPCA. In those swaps, Vale pays fixed or floating rates in US$ and receives payments in R$ linked to the
interest rates of the protected debt instruments.

F-73
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

25. Derivative financial instruments (Continued)

The swap transactions were negotiated over-the-counter and the protected items are the cash flows
from debt instruments linked to R$. These programs transform into US$ the obligations linked to R$ to
achieve a currency offset in the Company’s cash flows, by matching its receivables–mainly linked to US$–with
its payables.
Financial
Settlement
Inflows
Notional Fair value (Outflows) Value at Risk
Fair value by year
December 31, December 31, December 31, December 31, December 31, December 31,
Flow 2016 2015 Index Average rate 2016 2015 2016 2016 2017 2018 2019+

CDI vs. US$ fixed

rate swap . . . . (121) (783) (314) 39 48 (170) –
Receivable . . . . . R$ 6.289 R$ 5.239 CDI 106,78%
Payable . . . . . . . US$2.105 US$2.288 Fix 3,78%
TJLP vs. US$ fixed
rate swap . . . . (622) (1.015) (197) 62 (207) (102) (313)
Receivable . . . . . R$ 4.360 R$ 5.484 TJLP + 1,32%
Payable . . . . . . . US$2.030 US$2.611 Fix 1,69%
TJLP vs. US$
floating rate swap (55) (63) (2) 5 (3) (5) (47)
Receivable . . . . . R$ 242 R$ 267 TJLP + 0,86%
Payable . . . . . . . US$ 140 US$ 156 Libor + 1,23%
R$ fixed rate vs.
US$ fixed rate
swap . . . . . . . (13) (165) (90) 23 (4) 13 (22)
Receivable . . . . . R$ 1.031 R$ 1.356 Fix 7,69%
Payable . . . . . . . US$ 343 US$ 528 Fix 0,73%
IPCA vs. US$
fixed rate swap . (51) (105) 1 11 7 5,7 (64)
Receivable . . . . . R$ 1.000 R$ 1.000 IPCA + 6,55%
Payable . . . . . . . US$ 434 US$ 434 Fix 3,98%
IPCA vs. CDI
swap . . . . . . . 42 2 (26) 0,4 (20) (8) 70
Receivable . . . . . R$ 1.350 R$ 1.350 IPCA + 6,62%
Payable . . . . . . . R$ 1.350 R$ 1.350 CDI 98,58%

(ii) Protection program for EUR denominated debt instruments

In order to reduce the cash flow volatility, swap and forward transactions were implemented to
convert into US$ the cash flows from certain debt instruments issued in Euros by Vale. In those swaps, Vale
receives fixed rates in EUR and pays fixed rates in US$. And in those forwards only the principal amount of
the debt is converted from EUR to US$.

F-74
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

25. Derivative financial instruments (Continued)

The swap and forward transactions were negotiated over-the-counter and the protected items are the
cash flows from debt instruments linked to EUR. The financial settlement inflows/outflows are offset by the
protected items’ losses/gains due to EUR/US$ exchange rate.

Financial
Settlement
Inflows
Notional Fair value (Outflows) Value at Risk Fair value
by year
December 31, December 31, Average December 31, December 31, December 31, December 31,
Flow 2016 2015 Index rate 2016 2015 2016 2016 2017 2018 2019+

EUR fixed rate vs. US$

fixed rate swap . . . . (52) (175) (142) 10 (7) (6) (39)
Receivable . . . . . . . . A500 A1.000 Fix 3,75%
Payable . . . . . . . . . . US$613 US$1.302 Fix 4,29%

Financial
Settlement
Inflows
Notional Average Fair value (Outflows) Value at Risk Fair value
rate by year
December 31, December 31, Bought/ (USD/ December 31, December 31, December 31, December 31,
Flow 2016 2015 Sold EUR) 2016 2015 2016 2016 2017

Forwards . . . . . . . . . . A500 – B 1,143 (46) – – 5,8 (46)

(iii) Foreign exchange hedging program for disbursements in CAD

In order to reduce the cash flow volatility, forward transactions were implemented to mitigate the
foreign exchange exposure that arises from the currency mismatch between revenues denominated in US$ and
disbursements denominated in CAD.

The forward transactions were negotiated over-the-counter and the protected item is part of the CAD
denominated disbursements. The financial settlement inflows/outflows are offset by the protected items’
losses/gains due to CAD/US$ exchange rate. This program is classified under the hedge accounting
requirements, and it was settled in the first quarter of 2016.

Financial
Settlement
Inflows
Notional Fair value (Outflows) Value at Risk Fair value
by year
December 31, December 31, Bought/ Average rate December 31, December 31, December 31, December 31,
Flow 2016 2015 Sold (CAD/USD) 2016 2015 2016 2016 2017

Forwards . . . . . . . . . . . . . . . – CAD 10 B 1,028 – (3) (3) – –

b) Commodities derivative positions

(i) Bunker Oil purchase cash flows protection program

In order to reduce the impact of bunker oil price fluctuation on maritime freight hiring/supply and,
consequently, reducing the company’s cash flow volatility, bunker oil derivatives were implemented. These
transactions are usually executed through forward purchases and zero cost-collars.

F-75
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

25. Derivative financial instruments (Continued)

The derivative transactions were negotiated over-the-counter and the protected item is part of the
Vale’s costs linked to bunker oil prices. The financial settlement inflows/outflows are offset by the protected
items’ losses/gains due to bunker oil prices changes.

Financial
Settlement
Inflows
Notional (ton) Fair value (Outflows) Value at Risk Fair value
by year
December 31, December 31, Bought/ Average rate December 31, December 31, December 31, December 31,
Flow 2016 2015 Sold (CAD/USD) 2016 2015 2016 2016 2017

Bunker Oil protection

Forwards . . . . . . . . . . . 0 1.867.500 B 0 – (577) (536) – –
Call options . . . . . . . . . 2.856.000 2.041.500 B 324 130 0 – 28 130
Put options . . . . . . . . . 2.856.000 2.041.500 S 213 (14) (297) (185) 3 (14)
Total . . . . . . . . . . . . . 116 (873) 116

As at December 31, 2016 and 2015, excludes US$24 and US$101, respectively, of transactions in which
the financial settlement occurs subsequently of the closing month.

(ii) Protection programs for base metals raw materials and products

In the operational protection program for nickel sales at fixed prices, derivatives transactions were
implemented to convert into floating prices the contracts with clients that required a fixed price, in order to
keep nickel revenues exposed to nickel price fluctuations. Those operations are usually implemented through
the purchase of nickel forwards.

In the operational protection program for the purchase of raw materials and products, derivatives
transactions were implemented, usually through the sale of nickel and copper forward or futures, in order to
reduce the mismatch between the pricing period of purchases (concentrate, cathode, sinter, scrap and others)
and the pricing period of the final product sales to the clients.

The derivative transactions are negotiated at London Metal Exchange or over-the-counter and the
protected item is part of Vale’s revenues and costs linked to nickel and copper prices. The financial
settlement inflows/outflows are offset by the protected items’ losses/gains due to nickel and copper prices
changes.

Financial
Settlement
Inflows
Notional (ton) Fair value (Outflows) Value at Risk Fair value
by year
December 31, December 31, Bought/ Average strike December 31, December 31, December 31, December 31,
Flow 2016 2015 Sold (US$/ton) 2016 2015 2016 2016 2017 2018

Fixed price sales protection

Nickel forwards . . . . . . . 11.615 16.917 B 10.156 (1) (46) (30) 4 (3) 3
Raw material purchase protection
Nickel forwards . . . . . . . 134 118 S 10.823 0,11 0,10 (0,18) 0,04 0,11 –
Copper forwards . . . . . . . 441 385 S 5.207 (0,14) 0,09 0,04 0,06 (0,14) –
Total . . . . . . . . . . . . . . (0,03) 0,19 (0,03) –

F-76
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

25. Derivative financial instruments (Continued)

c) Silver Wheaton Corp. warrants

The company owns warrants of Silver Wheaton Corp. (SLW), a Canadian company with stocks
negotiated in Toronto Stock Exchange and New York Stock Exchange. Such warrants configure American call
options and were received as part of the payment regarding the sale of part of gold payable flows produced as
a sub product from Salobo copper mine and some nickel mines in Sudbury.

Financial
Settlement
Inflows
Notional (quantity) Fair value (Outflows) Value at Risk Fair value
by year
December 31, December 31, Bought/ Average strike December 31, December 31, December 31, December 31,
Flow 2016 2015 Sold (US$/share) 2016 2015 2016 2016 2023

Call options . . . . . . . . . . . . 10.000.000 10.000.000 B 44 44 7 – 5 44

d) Call options from debentures

The company has debentures in which lenders have call options of a specified quantity of Ferrovia
Norte Sul ordinary shares, later changed to VLI SA shares. The call option’s strike price is given by the
debentures’ remaining notional in each exercise date.

Financial
Settlement
Inflows
Notional (quantity) Fair value (Outflows) Value at Risk Fair value
Average by year
December 31, December 31, Bought/ strike December 31, December 31, December 31, December 31,
Flow 2016 2015 Sold (R$/share) 2016 2015 2016 2016 2027

Call options . . . . . . . . . . . . 140.239 140.239 S 8.419 (72) (39) – 5 (72)

(e) Options related to Minerações Brasileiras Reunidas S.A. (‘‘MBR’’) shares

The Company entered into a contract that has options related to MBR shares. Under certain restrict
and contingent conditions, which are beyond the buyer’s control, such as illegality due to changes in the law,
the contract has a clause that gives the buyer the right to sell back its stake to the Company. It this case, the
Company could settle through cash or shares. On the other hand, the Company has the right to buy back this
non-controlling interest in the subsidiary.

Notional (quantity, in Financial settlement

millions) Fair value Inflows (Outflows) Value at Risk Fair value
by year
December 3, December 31, Bought / Average strike December 31, December 31, December 31, December 31,
Flow 2016 2015 Sold (R$/share) 2016 2015 2016 2016 2017+

Options . . . . . . . . 2.139 2.139 B/S 1,8 120 15 – 11 120

F-77
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

25. Derivative financial instruments (Continued)

f) Embedded derivatives in contracts

The Company has some nickel concentrate and raw materials purchase agreements in which there are
provisions based on nickel and copper future prices behavior. These provisions are considered as embedded
derivatives.
Financial settlement
Notional (ton) Fair value Inflows (Outflows) Value at Risk Fair value
by year
December 31, December 31, Bought / Average strike December 31, December 31, December 31, December 31,
Flow 2016 2015 Sold (US$/ton) 2016 2015 2016 2016 2017

Nickel forwards . . . 5.626 3.877 S 10.950 0,3 3,0 0,3

Copper forwards . . . 3.684 5.939 S 5.249 1,5 2,0 1,5
Total . . . . . . . . . 1,9 5,0 – 2,5 1,9

The Company has also a natural gas purchase agreement in which there is a clause that defines that a
premium can be charged if the Company’s pellet sales prices trade above a pre-defined level. This clause is
considered an embedded derivative.

Financial settlement
Notional (volume/month) Fair value Inflows (Outflows) Value at Risk Fair value
by year
December 31, December 31, Bought / Average strike December 31, December 31, December 31, December 31,
Flow 2016 2015 Sold (US$/ton) 2016 2015 2016 2016 2017 2018+

Call options . . 746.667 746.667 S 179 (2,0) – – 1,3 (0,0) (2,0)

In August 2014 the Company sold part of its stake in VLI to an investment fund managed by
Brookfield Asset Management (‘‘Brookfield’’). The sales contract includes a clause that establishes, under
certain conditions, a minimum return guarantee on Brookfield’s investment. This clause is considered an
embedded derivative, with payoff equivalent to that of a put option and estimated pricing based on our own
model and assumptions.

Financial settlement
Notional (quantity) Fair value Inflows (Outflows) Value at Risk Fair value
by year
December 31, December 31, Bought / Average strike December 31, December 31, December 31, December 31,
Flow 2016 2015 Sold (R$/share) 2016 2015 2016 2016 2027

Put option . . . . 1.105.070.863 1.105.070.863 S 3,07 (182) (141) – 14 (182)

For sensitivity analysis of derivative financial instruments, Financial counterparties’ ratings and market
curves please see note 33.

F-78
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

26. Provisions

Current liabilities Non-current liabilities

December 31, December 31, December 31, December 31,
2016 2015 2016 2015
Payroll and related charges (i) . . . . . . . . . . . . . . . . . . . . . . . . . 725 375 – –
Onerous contracts (note 19) . . . . . . . . . . . . . . . . . . . . . . . . . . 101 – 473 306
Environment Restoration . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 8 111 46
Asset retirement obligations (note 27) . . . . . . . . . . . . . . . . . . . . 47 89 2,472 2,385
Provisions for litigation (note 28) . . . . . . . . . . . . . . . . . . . . . . . – – 839 822
Employee postretirement obligations (note 29) . . . . . . . . . . . . . . . 69 68 1,853 1,750
Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 952 540 5,748 5,309

(i) Includes profit sharing provision US$331 and US$42 for the year ended December 31, 2016 and 2015, respectively.

27. Asset retirement obligations

Refers to the costs for the closure of the mines and deactivation of the related mining assets. Changes
in the provision of asset retirement obligations and long-term interest rates (per annum, used to discount
these obligations to present value and to update the provisions) are as follows:

December 31, December 31,

2016 2015
Balance at beginning of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,474 3,369
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 109
Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (77) (88)
Revisions on cash flows estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230 (135)
Translation adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134 (781)
Effect of discontinued operations
Transfer to net assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (357) –
Balance at end of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,519 2,474

Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 89
Non-current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,472 2,385
2,519 2,474

Long-term interest rates (per annum)

Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.73% 7.28%
Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.55% 0.59%
Other regions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.07% - 8.02% 1.12% - 5.91%

Accounting policy

The provision refers to costs related to mine closure and reclamation, with the completion of mining
activities and decommissioning of assets related to mine. When the provision is recognized, the corresponding
cost is capitalized as part of property plant and equipment and is depreciated on the same basis over the
related asset and recorded in the income statement.

The long-term liability is subsequently measured using a long-term risk free discount rate applicable to
the liability and recorded in the income statement as financial expenses until the Company makes payments
related to mine closure and decommissioning of assets mining.

F-79
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

27. Asset retirement obligations (Continued)

The accrued amounts of these obligations are not deducted from the potential costs covered by
insurance or indemnities.

Critical accounting estimates and judgments

The Company applies judgment and assumptions when measuring its asset retirement obligation. The
Company recognizes an obligation under the fair value for asset retirement obligations in the period in which
they occur. The Company considers the accounting estimates related to closure costs of a mine as a critical
accounting policy because they involve significant values for the provision and are estimated using several
assumptions, such as interest rate, cost of closure useful life of the asset considering the current state of
closure and the projected date of depletion of each mine. The estimates are reviewed annually.

28. Litigation

a) Provision for litigation

Vale is party to labor, civil, tax and other ongoing lawsuits, at administrative and court levels.
Provisions for losses resulting from lawsuits are estimated and updated by the Company, based on analysis
from the Company’s legal consultants.

Changes in provision for litigation are as follows:

Environmental Total of litigation

Tax litigation Civil litigation Labor litigation litigation provision
Balance at December 31, 2014 . . . 366 118 706 92 1,282
Additions . . . . . . . . . . . . . . 178 55 159 – 392
Reversals . . . . . . . . . . . . . . (199) (41) (137) (4) (381)
Payments . . . . . . . . . . . . . . (50) (40) (65) (59) (214)
Indexation and interest . . . . . . 52 13 7 3 75
Translation adjustment . . . . . . . (79) (38) (223) (12) (352)
Additions and reversals of
discontinued operations . . . . . 1 12 7 – 20
Balance at December 31, 2015 . . . 269 79 454 20 822
Additions . . . . . . . . . . . . . . 23 96 243 2 364
Reversals . . . . . . . . . . . . . . (37) (63) (122) (5) (227)
Payments . . . . . . . . . . . . . . (53) (59) (103) (5) (220)
Indexation and interest . . . . . . 9 16 9 (3) 31
Translation adjustment . . . . . . . 20 21 89 5 135
Effect of discontinued operations
Net movements of year . . . . . . – (1) 8 (1) 6
Transfers to net assets held for
sale . . . . . . . . . . . . . . . . (17) (5) (44) (6) (72)
Balance at December 31, 2016 . . . 214 84 534 7 839

F-80
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

28. Litigation (Continued)

i. Provisions for labor litigation—Consist of lawsuits filed by employees and service suppliers, related
to employment relationships mainly in Brazil. The most recurring claims are related to payment of overtime,
hours in itinerary, and health and safety. Also the social security in Brazil (‘‘INSS’’) contingencies are related
to legal and administrative disputes between INSS and Vale due to applicability of compulsory social security
charges.

b) Contingent liabilities

Contingent liabilities of administrative and judicial claims, with expectation of loss classified as
possible, and for which the recognition of a provision is not considered necessary by the Company, based on
legal advice are as follows:

December 31, December 31,

2016 2015
Tax litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,636 5,326
Civil litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,502 1,335
Labor litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,418 1,866
Environmental litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,871 1,381
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,427 9,908

i—Tax litigation—Our most significant tax-related contingent liabilities result from disputes related to
(i) the deductibility of our payments of social security contributions on the net income (CSLL) from our
taxable income, (ii) challenges of certain tax credits we deducted from our PIS and COFINS payments,
(iii) assessments of CFEM (royalties), and (iv) charges of value-added tax on services and circulation of goods
(ICMS), especially relating to certain tax credits we claimed from the sale and transmission of energy, ICMS
charges to anticipate the payment in the entrance of goods to Pará State, ICMS charges on our own
transportation costs and challenges to other tax credits we claimed. The changes reported in the period
resulted, mainly, from new proceedings related to PIS, COFINS, ICMS, CFEM; interest and inflation
adjustments in the amounts in dispute.

ii—Civil litigation—Most of those claims have been filed by suppliers for indemnification under
construction contracts, primarily relating to certain alleged damages, payments and contractual penalties. A
number of other claims related to contractual disputes regarding inflation index.

iii—Labor litigation—Represents individual claims by employees and service providers, primarily

involving demands for additional compensation for overtime work, time spent commuting or health and safety
conditions; and the Brazilian federal social security administration (‘‘INSS’’) regarding contributions on
compensation programs based on profits.

iv—Environmental litigation—The most significant claims concern alleged procedural deficiencies in

licensing processes, non-compliance with existing environmental licenses or damage to the environment.

F-81
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

28. Litigation (Continued)

c) Judicial deposits

In addition to the provisions and contingent liabilities, the Company is required by law to make
judicial deposits to secure a potential adverse outcome of certain lawsuits. These court-ordered deposits are
monetarily adjusted and reported as non-current assets until a judicial decision to draw the deposit occurs.

December 31, December 31,

2016 2015
Tax litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193 211
Civil litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 102
Labor litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 691 553
Environmental litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 16
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 962 882

d) Others

For contingencies related to Samarco Mineração S.A., see note 21.

Accounting policy

A provision is recognized when the obligation is considered probable and can be measured. The
accounting counterpart for the obligation is an expense in income statement. This obligation is updated
according to the evolution of the judicial process or interest incurred and can be reversed if the estimate of
loss is not considered probable or settled when the obligation is paid.

Critical accounting estimates and judgments

By their nature, litigations will be resolved when one or more future event occurs or fails to occur.
Typically, the occurrence or not of such events is outside the Company’s control. Legal uncertainties involve
the exercise of significant estimates and judgments by management regarding the results of future events.

F-82
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

29. Employee benefits

a) Employee postretirements obligations

In Brazil, the management of the pension plans is responsibility of Fundação Vale do Rio Doce de
Seguridade Social (‘‘Valia’’) a nonprofit entity with administrative and financial autonomy. The Brazilian plans
are as follows:

Benefit plan Vale Mais (‘‘Vale Mais’’) and benefit plan Valiaprev (‘‘Valiaprev’’)—Certain of the
Company’s employees are participants of plans Vale Mais and Valiaprev with components of defined benefit
(specific coverage for death, pensions and disability allowances) and components of defined contributions (for
programmable benefits). The defined benefits plan is subject to actuarial evaluations. The defined
contribution plan represents a fixed amount held on behalf of the participants. Both Vale Mais and Valiaprev
were overfunded as at December 31, 2016 and 2015.

Defined benefit plan (‘‘Plano BD’’)—The Plano BD has been closed to new entrants since the year
2000, when the Vale Mais plan was implemented. It is a plan that has defined benefit characteristics, covering
almost exclusively retirees and their beneficiaries. It was overfunded as of December 31, 2016 and 2015 and
the contributions made by the Company are not relevant.

Abono complementação benefit plan—The Company sponsors a specific group of former employees
entitled to receive additional benefits from Valia normal payments plus post-retirement benefit that covers
medical, dental and pharmaceutical assistance. The contributions made by the Company finished in 2014. The
abono complementação benefit was overfunded as at December 31, 2016 and 2015.

Other benefits—The Company sponsors medical plans for employees that meet specific criteria and
for employees who use the abono complementação benefit. Although those benefits are not specific
retirement plans, actuarial calculations are used to calculate future commitments. As those benefits are
related to health care plans they have the nature of underfunded benefits, and are presented as underfunded
plans as at December 31, 2016 and 2015.

The Foreign plans are managed in accordance with their region. They are divided between plans in
Canada, United States of America, United Kingdom, Indonesia, New Caledonia, Japan and Taiwan. Pension
plans in Canada are composed of a defined benefit and defined contribution component. Currently the
defined benefit plans do not allow new entrants. The foreign defined benefit plans are underfunded as at
December 31, 2016 and 2015.

Employers’ disclosure about pensions and other post-retirement benefits on the status of the defined
benefit elements of all plans is provided as follows.

F-83
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

29. Employee benefits (Continued)

i. Change in benefit obligation

Overfunded Underfunded
pension plans pension plans Other benefits
Benefit obligation as at December 31, 2014 . . . . . . . . . . . . . . . . . . . . . . 3,728 4,521 1,498
Service costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 94 28
Interest costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 359 178 66
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (244) (258) (65)
Participant contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 – –
Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 (8) –
Effect of changes in the actuarial assumptions . . . . . . . . . . . . . . . . . . . (184) (70) (31)
Translation adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,214) (768) (273)
Benefit obligation as at December 31, 2015 . . . . . . . . . . . . . . . . . . . . . . 2,474 3,689 1,223
Service costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 76 (16)
Interest costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 362 175 66
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (281) (259) (61)
Participant contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 – –
Effect of changes in the actuarial assumptions . . . . . . . . . . . . . . . . . . . 271 117 75
Transfer to held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9) – (59)
Translation adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 515 124 68
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – 123 –
Benefit obligation as at December 31, 2016 . . . . . . . . . . . . . . . . . . . . . . 3,343 4,045 1,296

ii. Evolution of assets fair value

Overfunded Underfunded
pension plans pension plans Other benefits
Fair value of plan assets as at December 31, 2014 . . . . . . . . . . . . . . . . . . 5,029 3,716 –
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 491 151 –
Employer contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 132 65
Participant contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 – –
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (244) (258) (65)
Return on plan assets (excluding interest income) . . . . . . . . . . . . . . . . . (284) (8) –
Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 (5) –
Translation adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,626) (634) –
Fair value of plan assets as at December 31, 2015 . . . . . . . . . . . . . . . . . . 3,435 3,094 –
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 512 151 –
Employer contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 99 61
Participant contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 – –
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (281) (259) (61)
Return on plan assets (excluding interest income) . . . . . . . . . . . . . . . . . 281 71 –
Transfer to held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (13) – –
Translation adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 717 105 –
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – 158 –
Fair value of plan assets as at December 31, 2016 . . . . . . . . . . . . . . . . . . 4,694 3,419 –

F-84
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

29. Employee benefits (Continued)

iii. Reconciliation of assets and liabilities recognized in the statement of financial position

Plans in Brazil
December 31, 2016 December 31, 2015
Overfunded Underfunded Overfunded Underfunded
pension plans pension plans Other benefits pension plans pension plans Other benefits
Balance at beginning of the year 961 – – 1,301 – –
Interest income . . . . . . . . . 156 – – 130 – –
Changes on asset ceiling and
onerous liability . . . . . . . 35 – – (54) – –
Translation adjustment . . . . . 201 – – (416) – –
Transfer to held for sale . . . . (2) – – – – –
Balance at end of the year . . . . 1,351 – – 961 – –

Amount recognized in the

statement of financial position
Present value of actuarial
liabilities . . . . . . . . . . . (3,343) (386) (227) (2,474) (248) (160)
Fair value of assets . . . . . . . 4,694 257 – 3,435 214 –
Effect of the asset ceiling . . . (1,351) – – (961) – –
Liabilities at end of the year . . . – (129) (227) – (34) (160)

Current liabilities . . . . . . . . – – (18) – – (19)

Non-current liabilities . . . . . – (129) (209) – (34) (141)
Liabilities at end of the year . . . – (129) (227) – (34) (160)

Foreign plan
December 31, 2016 December 31, 2015
Overfunded Underfunded Overfunded Underfunded
pension plans pension plans Other benefits pension plans pension plans Other benefits
Amount recognized in the
statement of financial position
Present value of actuarial
liabilities . . . . . . . . . . . – (3,659) (1,069) – (3,441) (1,063)
Fair value of assets . . . . . . . – 3,162 – – 2,880 –
Liabilities at end of the year . . . – (497) (1,069) – (561) (1,063)

Current liabilities . . . . . . . . – (16) (35) – (17) (32)

Non-current liabilities . . . . . – (481) (1,034) – (544) (1,031)
Liabilities at end of the year . . . – (497) (1,069) – (561) (1,063)

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Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

29. Employee benefits (Continued)

Total
December 31, 2016 December 31, 2015
Overfunded Underfunded Overfunded Underfunded
pension plans pension plans Other benefits pension plans pension plans Other benefits
Balance at beginning of the year 961 – – 1,301 – –
Interest income . . . . . . . . . 156 – – 130 – –
Changes in asset ceiling/
onerous liability . . . . . . . 35 – – (54) – –
Translation adjustment . . . . . 201 – – (416) – –
Transfer to held for sale . . . . (2) – – – – –
Balance at end of the year . . . . 1,351 – – 961 – –

Amount recognized in the

statement of financial position
Present value of actuarial
liabilities . . . . . . . . . . . (3,343) (4,045) (1,296) (2,474) (3,689) (1,223)
Fair value of assets . . . . . . . 4,694 3,419 – 3,435 3,094 –
Effect of the asset ceiling . . . (1,351) – – (961) – –

Liabilities at end of the year . . . – (626) (1,296) – (595) (1,223)

Current liabilities . . . . . . . . – (16) (53) – (17) (51)

Non-current liabilities . . . . . – (610) (1,243) – (578) (1,172)

Liabilities at end of the year . . . – (626) (1,296) – (595) (1,223)

iv. Costs recognized in the income statement

Year ended December 31

2016 2015
Overfunded Underfunded Overfunded Underfunded
pension plans pension plans Other benefits pension plans pension plans Other benefits
Service cost . . . . . . . . . . . . 10 76 (16) 20 94 28
Interest on expense on liabilities 362 175 66 359 178 66
Interest income on plan assets . . (512) (151) – (491) (151) –
Interest expense on effect of
(asset ceiling)/ onerous liability 156 – – 132 – –
Total of cost, net . . . . . . . . . 16 100 50 20 121 94

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Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

29. Employee benefits (Continued)

v. Costs recognized in the statement of comprehensive income

Year ended December 31

2016 2015
Overfunded Underfunded Overfunded Underfunded
pension plans pension plans Other benefits pension plans pension plans Other benefits
Balance at beginning of the year (113) (495) (95) (143) (570) (132)
Effect of changes actuarial
assumptions . . . . . . . . . . (271) (117) (75) 184 70 31
Return on plan assets
(excluding interest income) . 281 71 – (284) (8) –
Change of asset ceiling / costly
liabilities (excluding interest
income) . . . . . . . . . . . . (36) – – 70 – –
Others . . . . . . . . . . . . . . – 35 – – 2 1
(26) (11) (75) (30) 64 32
Deferred income tax . . . . . . 9 16 17 10 2 (9)
Others comprehensive income . . (17) 5 (58) (20) 66 23
Translation adjustments . . . . (23) (6) (7) 49 10 14
Transfers/ disposal . . . . . . . – – – 1 (1) –
Accumulated other
comprehensive income . . . . . (153) (496) (160) (113) (495) (95)

vi. Risks related to plans

The Administrators of the plans have committed to strategic planning to strengthen internal controls
and risk management. This commitment is archived by conducting audits including of internal controls, which
aim to mitigate operational market and credit risks. Risks are presented as follow:

Legal—lawsuits: issuing periodic reports to internal audit and directors contemplating the analysis of
lawyers about the possibility of loss (remote, probable or possible), aiming to support the administrative
decision regarding provisions. Analysis and ongoing monitoring of developments in the legal scenario and its
dissemination within the institution in order to subsidize the administrative plans, considering the impact of
regulatory changes.

Actuarial—the annual actuarial valuation of the benefit plans comprises the assessment of costs,
revenues and adequacy of plan funding. It also considers the monitoring of biometric, economic and financial
assumptions (asset volatility, changes in interest rates, inflation, life expectancy, salaries and other).

Market—profitability projections are performed for the various plans and profiles of investments for
10 years in the management study of assets and liabilities. These projections include the risks of investments
in various market segments. Furthermore, the risks for short-term market of the plans are monitored monthly
through metrics of VaR (Value at Risk) and stress testing. For exclusive investment funds of Valia, the market
risk is measured daily by the custodian asset bank.

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Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

29. Employee benefits (Continued)

Credit—assessment of the credit quality of issuers by hiring expert consultants to evaluate financial
institutions and internal assessment of payment ability of non-financial companies. For assets of non-financial
companies, the assessment is conducted a monitoring of the company until the maturity of the security.

vii. Actuarial and economic assumptions and sensitivity analysis

All calculations involve future actuarial projections about some parameters, such as: salaries, interest,
inflation, the trend of INSS benefits, mortality and disability.

The economic and actuarial assumptions adopted have been formulated considering the long-term
period for maturity and should therefore be examined accordingly. In the short term they may not necessarily
be realized.

In the evaluations were adopted the following assumptions:

Brazil
December 31, 2016 December 31, 2015
Overfunded Underfunded Overfunded Underfunded
pension plans pension plans Other benefits pension plans pension plans Other benefits
Discount rate to determine
benefit obligation . . . . . . . 10.98% - 11.14% 10.98% 10.98% - 11.09% 13.63% 13.71% 13.63%
Nominal average rate to
determine expense/ income . 10.98% - 11.14% 10.98% N/A 12.36% 13.71% N/A
Nominal average rate of salary
increase . . . . . . . . . . . . 4.85% - 5.95% 6.95% N/A 8.12% 8.12% N/A
Nominal average rate of benefit
increase . . . . . . . . . . . . 6.00% 6.00% N/A 6.00% 6.00% N/A
Immediate health care cost
trend rate . . . . . . . . . . . N/A N/A 8.00% N/A N/A 9.18%
Ultimate health care cost trend
rate . . . . . . . . . . . . . . . N/A N/A 8.00% N/A N/A 9.18%
Nominal average rate of price
inflation . . . . . . . . . . . . 4.85% 4.85% 4.85% 6.00% 6.00% 6.00%

Foreign
December 31, 2016 December 31, 2015
Underfunded Underfunded
pension plans Other benefits pension plans Other benefits
Discount rate to determine benefit obligation . . . . . . . . . 3.84% 3.90% 4.00% 3.90%
Nominal average rate to determine expense/ income . . . . . 4.01% N/A 4.80% N/A
Nominal average rate of salary increase . . . . . . . . . . . . . 4.05% N/A 3.90% N/A
Nominal average rate of benefit increase . . . . . . . . . . . . N/A 3.00% N/A 3.00%
Immediate health care cost trend rate . . . . . . . . . . . . . . N/A 6.30% N/A 6.30%
Ultimate health care cost trend rate . . . . . . . . . . . . . . . N/A 4.50% N/A 4.50%
Nominal average rate of price inflation . . . . . . . . . . . . . 2.00% 2.00% 2.00% 2.00%

F-88
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

29. Employee benefits (Continued)

For the sensitivity analysis, the Company considers the effect of 1% in nominal discount rate to
determine the actuarial liability. The effects of this change in actuarial liabilities in premise and adopted the
average duration of the plan are as follows:

December 31, 2016

Overfunded Underfunded
pension plans pension plans Other benefits
Nominal discount rate—1% increase
Actuarial liability balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,069 3,569 1,171
Assumptions made . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.29% 5.55% 6.33%
Nominal discount rate—1% reduction
Actuarial liability balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,665 4,583 1,469
Assumptions made . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.56% 3.50% 4.02%

viii. Assets of pension plans

Brazilian plan assets as at December 31, 2016 and 2015 includes respectively (i) investments in a
portfolio of Vale’s stock in the amount of US$18 and US$4 and (ii) Brazilian Federal Government securities
in the amount of US$4,180 and US$2,976.

Foreign plan assets as at December 31, 2016 and 2015 includes Canadian Government securities in the
amount of US$735 and US$675, respectively.

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Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

29. Employee benefits (Continued)

ix. Overfunded pension plans

Assets by category are as follows:

December 31, 2016 December 31, 2015

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Cash and cash
equivalents . . . . . . . – – – – 1 – – 1
Debt securities—
Corporate bonds . . . . – 117 – 117 – 94 – 94
Debt securities—
Government bonds . . . 2,612 – – 2,612 1,659 – – 1,659
Investments funds—Fixed
Income . . . . . . . . . 2,411 – – 2,411 1,799 – – 1,799
Investments funds—
Equity . . . . . . . . . . 168 – – 168 44 – – 44
International investments 12 – – 12 29 – – 29
Structured investments—
Private Equity funds . . 217 – 140 357 138 – 136 274
Structured investments—
Real estate funds . . . . – – 10 10 – – 6 6
Real estate . . . . . . . . . – – 370 370 – – 319 319
Loans to participants . . . – – 260 260 – – 249 249
Total . . . . . . . . . . . . 5,420 117 780 6,317 3,670 94 710 4,474

Funds not related to risk

plans . . . . . . . . . . . (1,623) (1,039)
Fair value of plan assets
at end of year . . . . . . 4,694 3,435

Measurement of overfunded plan assets at fair value with no observable market variables (level 3) are
as follows:

Private Real Loans to

equity funds estate funds Real estate participants Total
Balance as at December 31, 2014 . . . . . . . . . . . . . 253 7 497 404 1,161
Return on plan assets . . . . . . . . . . . . . . . . . . (84) 1 4 47 (32)
Assets purchases . . . . . . . . . . . . . . . . . . . . . 49 1 1 40 91
Assets sold during the year . . . . . . . . . . . . . . . (7) – (28) (118) (153)
Translation adjustment . . . . . . . . . . . . . . . . . . (75) (3) (156) (124) (358)
Transfers in and/ out of Level 3 . . . . . . . . . . . . – – 1 – 1
Balance as at December 31, 2015 . . . . . . . . . . . . . 136 6 319 249 710
Return on plan assets . . . . . . . . . . . . . . . . . . (19) – 3 33 17
Assets purchases . . . . . . . . . . . . . . . . . . . . . 30 3 2 55 90
Assets sold during the year . . . . . . . . . . . . . . . (23) – (17) (121) (161)
Translation adjustment . . . . . . . . . . . . . . . . . . 26 1 63 46 136
Transfer to held for sale . . . . . . . . . . . . . . . . . (10) – – (2) (12)
Balance as at December 31, 2016 . . . . . . . . . . . . . 140 10 370 260 780

F-90
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

29. Employee benefits (Continued)

x. Underfunded pension plans

Assets by category are as follows:

December 31, 2016 December 31, 2015

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Cash and cash
equivalents . . . . . . . – 24 – 24 – 49 – 49
Equity securities . . . . . 1,240 – – 1,240 1,106 – – 1,106
Debt securities—
Corporate bonds . . . . – 10 – 10 – 12 – 12
Debt securities—
Government bonds . . . 83 736 – 819 56 684 – 740
Investments funds—Fixed
Income . . . . . . . . . 142 307 – 449 150 281 – 431
Investments funds—
Equity . . . . . . . . . . 92 368 – 460 86 356 – 442
International investments – 27 – 27 2 30 – 32
Structured investments—
Private Equity funds . . – – 187 187 – – 98 98
Real estate . . . . . . . . . – – 24 24 – – 20 20
Loans to participants . . . – – 6 6 – – 5 5
Others . . . . . . . . . . . – – 173 173 – – 159 159
Total . . . . . . . . . . . . 1,557 1,472 390 3,419 1,400 1,412 282 3,094

Measurement of underfunded plan assets at fair value with no observable market variables (level 3)
are as follows:

Private Loans to
equity funds Real estate participants Others Total
Balance as at December 31, 2014 . . . . . . . . . . . . . . . 18 24 7 – 49
Return on plan assets . . . . . . . . . . . . . . . . . . . . – 5 1 – 6
Assets purchases . . . . . . . . . . . . . . . . . . . . . . . 102 – – 186 288
Assets sold during the year . . . . . . . . . . . . . . . . . (1) – – – (1)
Translation adjustment . . . . . . . . . . . . . . . . . . . . (21) (8) (3) (27) (59)
Transfers in and/ out of Level 3 . . . . . . . . . . . . . . . – (1) – – (1)
Balance as at December 31, 2015 . . . . . . . . . . . . . . . 98 20 5 159 282
Return on plan assets . . . . . . . . . . . . . . . . . . . . 15 – – 9 24
Assets purchases . . . . . . . . . . . . . . . . . . . . . . . 176 – – – 176
Assets sold during the year . . . . . . . . . . . . . . . . . (110) – – – (110)
Translation adjustment . . . . . . . . . . . . . . . . . . . . 8 4 1 5 18
Balance as at December 31, 2016 . . . . . . . . . . . . . . . 187 24 6 173 390

xi. Disbursement of future cash flow

Vale expects to disburse US$165 in 2017 in relation to pension plans and other benefits.

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Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

29. Employee benefits (Continued)

xii. Expected benefit paymentsThe expected benefit payments, which reflect future services, are as follows:

December 31, 2016

Overfunded Underfunded
pension plans pension plans Other benefits
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92 238 65
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 237 67
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104 237 69
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110 238 72
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117 238 74
2022 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 602 1,208 402

b) Profit sharing program (‘‘PLR’’)

The Company recorded as cost of goods sold and services rendered and other operating expenses
related to the PLR US$331 and US$42 for the year ended on December 31, 2016 and 2015, respectively.

c) Long-term compensation plan

For the long-term awarding of eligible executives, the Company compensation plans includes Matching
Program and Performance Share Unit Program—PSU, with three to four years-vesting cycles, respectively,
with the aim of encouraging employee’s retention and stimulating their performance.

For the Matching program, the participants can acquire Vale’s preferred shares in the market without
any benefits being provided by Vale. If the shares acquired are held for a period of three years and the
participants keep it employment relationship with Vale, the participant is entitled to receive from Vale an
award in shares, equivalent to the number of shares originally acquired by the executive. It should be noted
that, although a specific custodian of the shares is defined by Vale, the share initially purchased by the
executives have no restriction and can be sold at any time. However, if it’s done before the end of the
three-year-vesting period, they lose the entitlement of receiving the related award paid by Vale.

For PSU program, the eligible executives have the opportunity to receive during a four year-vesting
cycle, an award equivalent to the market value of a determined number of common shares and conditioned to
Vale’s performance factor measured as an indicator of total return to the shareholders (TSR). This award is
paid in cash and can occur in cumulative installments of 20% (at the end of 2nd year), 30% (at the end of
3rd year) and 50% (at the end of 4th year), conditioned to the performance factor of each year.

Liabilities of the plans are measured at fair value at every reporting period, based on market rates.
Compensation costs incurred are recognized by the defined vesting period of three or four years. At
December 31, 2016, 2015 and 2014 the Company recognized in the income statement the amounts of US$37,
US$29 and US$61, respectively, related to long term compensation plan.

F-92
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Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

29. Employee benefits (Continued)

Accounting policy

Employee benefits

i. Current benefits—wages, vacations and related taxes

Payments of benefits such as wages or accrued vacation, as well the related social security taxes over
those benefits are recognized monthly in income, on an accruals basis.

ii. Current benefits—profit sharing program

The Company has the Annual Incentive Program (AIP) based on Team and business units
contribution and Company-wide performance through operational cash generation. The Company makes an
accrual based on evaluation periodic of goals achieved and Company result, using the accrual basis and
recognition of present obligation arising from past events in the estimated outflow of resources in the future.
The accrual is recorded as cost of goods sold and services rendered or operating expenses in accordance with
the activity of each employee.

iii. Non-current benefits—long-term incentive programs

The Company has established a procedure for awarding certain eligible executives (Matching and
Virtual Shares Programs) with the goal of encouraging employee retention and optimum performance. Plan
liabilities are measured at each reporting date, at their fair values, based on market prices. Obligations are
measured at each reporting date, at fair values based on market prices. The compensation costs incurred are
recognized in income during the vesting period as defined.

iv. Non-current benefits—pension costs and other post-retirement benefits

The Company has several retirement plans for its employees.

For defined contribution plans, the Company’s obligations are limited to a monthly contribution linked
to a pre-defined percentage of the remuneration of employees enrolled in to these plans.

For defined benefit plans, actuarial calculations are periodically obtained for liabilities determined in
accordance with the Projected Unit Credit Method in order to estimate the Company’s obligation. The
liability recognized in the balance sheet represents the present value of the defined benefit obligation as at
that date, less the fair value of plan assets. The Company recognized in the income statement the costs of
services, the interest expense of the obligations and the interest income of the plan assets. The
remeasurement of gains and losses, return on plan assets (excluding the amount of interest on return of
assets, which is recognized in income for the year) and changes in the effect of the ceiling of the active and
onerous liabilities are recognized in comprehensive income for the year.

For overfunded plans, the Company does not recognize any assets or benefits in the balance sheet or
income statement until such time as the use of the surplus is clearly defined. For underfunded plans, the
Company recognizes actuarial liabilities and results arising from the actuarial valuation.

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Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

29. Employee benefits (Continued)

Critical accounting estimates and judgments

Post-retirement benefits for employees

The amount recognized and disclosed depend on a number of factors that are determined based on
actuarial calculations using various assumptions in order to determine costs and liabilities. One of these
assumptions is selection and use of the discount rate. Any changes to these assumptions will affect the
amount recognized.

At the end of each year the Company and external actuaries review the assumptions that will be used
for the following year. These assumptions are used in determining the fair values of assets and liabilities, costs
and expenses and the future values of estimated cash outflows, which are recorded in the plan obligations.

30. Stockholders’ equity

a) Share capital

Stockholders’ equity is represented by common shares (‘‘ON’’) and preferred non-redeemable shares
(‘‘PNA’’) without par value. Preferred shares have the same rights as common shares, with the exception of
voting rights to elect members of the Board of Directors. The Board of Directors may, regardless of changes
to bylaws, issue new shares (authorized capital), including the capitalization of profits and reserves to the
extent authorized.

The Company repurchases its shares to hold in treasury for future sale or cancellation. These shares
are recorded in a specific account as a reduction of stockholders´ equity at their acquisition value and carried
at cost. These programs are approved by the Board of Directors with a determined terms and numbers of
type of shares.

Incremental costs directly attributable to the issue of new shares or options are recognized in
stockholders’ equity as a deduction from the amount raised, net of taxes

F-94
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

30. Stockholders’ equity (Continued)

At December 31, 2016 and 2015, share capital was US$61,614 corresponding to 5,244,316,120 shares
issued and fully paid without par value.

December 31, 2016

Stockholders ON PNA Total
Valepar S.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,716,435,045 20,340,000 1,736,775,045
Brazilian Government (Golden Share) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – 12 12
Foreign investors—ADRs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 786,067,634 610,880,671 1,396,948,305
FMP—FGTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70,662,746 – 70,662,746
PIBB—BNDES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 741,730 1,171,101 1,912,831
BNDESPar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206,378,882 66,185,272 272,564,154
Foreign institutional investors in local market . . . . . . . . . . . . . . . . . . . . . . . . . 262,868,264 825,753,408 1,088,621,672
Institutional investors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104,510,549 133,496,260 238,006,809
Retail investors in Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,988,150 309,895,202 347,883,352
Shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,185,653,000 1,967,721,926 5,153,374,926
Shares in treasury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,535,402 59,405,792 90,941,194
Total issued shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,217,188,402 2,027,127,718 5,244,316,120

Amounts per class of shares (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38,525 23,089 61,614

Total authorized shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,600,000,000 7,200,000,000 10,800,000,000

b) Profit reserves

The amount of profit reserves are distributed as follows:

Additional
Investments Tax incentive Remuneration Total of profit
reserve Legal reserve reserve reserve reserves
Balance as at December 31, 2014 . . . . . . . . 16,794 3,061 130 – 19,985
Dividends and interest on capital of Vale’s
stockholders . . . . . . . . . . . . . . . . . . . (1,500) – – – (1,500)
Allocation of loss . . . . . . . . . . . . . . . . . (10,859) (1,176) (94) – (12,129)
Translation adjustment . . . . . . . . . . . . . . (4,435) (900) (36) – (5,371)
Balance as at December 31, 2015 . . . . . . . . – 985 – – 985
Allocation of Income . . . . . . . . . . . . . . . 1,808 204 377 634 3,023
Translation adjustment . . . . . . . . . . . . . . – 195 – – 195
Balance as at December 31, 2016 . . . . . . . . 1,808 1,384 377 634 4,203

Investment reserve—aims to ensure the maintenance and development of activities that comprise the
Company’s operations in an amount not exceeding 50% of distributable annual net income, limited to the
share capital amount.

Legal reserve—is a legal requirement for Brazilian public companies to retain 5% of the annual net
income up to 20% of the capital. The reserve can only be used to compensate losses or to increase capital.

F-95
 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

30. Stockholders’ equity (Continued)

Tax incentive reserve—results from the option to designate a portion of the income tax for
investments in projects approved by the Brazilian Government as well as tax incentives.

Additional remuneration reserve—Results from the portion of management proposed remuneration

that exceeds the mandatory minimum remuneration of 25% of the adjusted net income as presented below
established in the Company’s by-laws.

c) Unrealized fair value gain (losses)

Retirement Available-for-sale
benefit financial Conversion Total gain
obligations Cash flow hedge instruments shares (losses)
Balance as at December 31, 2014 . . . . . . . . (845) (453) (2) (413) (1,713)
Other comprehensive income . . . . . . . . . . 70 447 1 – 518
Translation adjustment . . . . . . . . . . . . . . 72 – – 131 203
Balance as at December 31, 2015 . . . . . . . . (703) (6) (1) (282) (992)
Other comprehensive income . . . . . . . . . . (70) 7 1 – (62)
Translation adjustment . . . . . . . . . . . . . . (36) (1) – (56) (93)
Balance as at December 31, 2016 . . . . . . . . (809) – – (338) (1,147)

d) Remuneration to the Company’s stockholders

Vale’s by-laws determine the minimum remuneration to stockholders of 25% of net income, after
adjustments from Brazil’s legal requirements which based on our adjusted net income as shown below
resulted in R$3,459 (US$1,061). In December, 2016 R$857 (US$250) was anticipated and the remaining
balance of R$2,602 (US$811) was accounted for in short term liability as ‘‘Dividends and interest on capital’’.
Additionally, in our by-laws preferred shares class A are entitled to receive priority dividends corresponding
to (i) at least 3% (three percent) of the shareholders’ equity share value, calculated based on the financial
statements used as reference for the payment of dividends or (ii) 6% (six percent) calculated over the part of
capital represented by this class of shares, whichever is the higher among them. Accordingly, management
proposed and the Board of Directors approved the proposal for additional dividends payments of R$2,065
(US$634) to equalize preferred and common share remuneration. The amount was classified as ‘‘Additional
Remuneration reserve’’ until it is approved in the annual general meeting. All remuneration paid and
proposed during the year was based on interest on equity.

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Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

30. Stockholders’ equity (Continued)

The proposal of stockholders’ remuneration was calculated in R$. The equivalent amount in US$ are
as follows:

2016
Net income of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,982
Legal reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (204)
Tax incentive reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (272)
Adjusted net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,506
Allocation of net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,913)
Cumulative translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
1,695

Remuneration:
Mandatory minimum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,061
Additional remuneration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 634
1,695

Remuneration by nature:
Interest on capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,695
1,695

Total remuneration per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.328883933

The amounts paid to stockholders, by nature of remuneration, are as follows:

Interest on
Dividends capital Total Amount per share
Amounts paid in 2014
First installment—April . . . . . . . . . . . . . . . . . . . . . . . . . . – 2,100 2,100 0.407499945
Second installment—October . . . . . . . . . . . . . . . . . . . . . . . 717 1,383 2,100 0.407499945
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 717 3,483 4,200

Amounts paid in 2015

First installment—April . . . . . . . . . . . . . . . . . . . . . . . . . . – 1,000 1,000 0.194047593
Second installment—October . . . . . . . . . . . . . . . . . . . . . . . 500 – 500 0.097023796
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500 1,000 1,500

Amounts paid in 2016

First installment—December . . . . . . . . . . . . . . . . . . . . . . . – 250 250 0.048511898
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – 250 250

e) New shareholders’ agreement—Subsequent event.

On February 20, 2017 the Company announced that a new shareholders’ agreement was filed at the
Company’s headquarters, executed by Litel Participações S.A., Litela Participações S.A., Bradespar S.A.,
Mitsui & Co., Ltd. and BNDES Participações S.A.—BNDESPAR (‘‘Valepar Agreement’’), as shareholders of
Valepar S.A. (‘‘Valepar’’), jointly referred to as ‘‘Shareholders’’, which shall enter into force after the
expiration of Valepar’s current Shareholders’ Agreement on May 10, 2017.

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Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

30. Stockholders’ equity (Continued)

The Valepar Agreement, along with the standard provisions in connection with voting rights and right
of first refusal for the acquisition of the Shareholders’ shares, provides for the submission to the Company of
a proposal for the purpose of enabling the listing of Vale on BM&FBOVESPA’s Novo Mercado special
segment (Brazil) and making Vale a company without defined control (‘‘Proposal’’). The Proposal is binding
on the Shareholders, and it is subject to approval by the Company’s corporate bodies. The Valepar
Agreement will have a term of 6 months, counting from the date it takes effect.

The transaction envisaged by the Proposal is composed of a series of indivisible and interdependent
steps, whose effectiveness is subject to the successful performance of the other steps. The Proposal comprises,
beyond the performance of all acts and procedures imposed by the applicable legal provisions and rules:

(i) Voluntary conversion of Vale class A preferred shares into common shares, based on
the conversion rate of 0.9342 common shares for each Vale class A preferred share, based on the
average closing price of the common shares and preferred shares over the last 30 trading sessions on
the BM&FBOVESPA prior to February 17, 2017 (inclusive), weighted by the volume of shares traded
in such trading sessions;

(ii) Amendment of Vale’s bylaws, so as to adjust it, as much as possible, to

BM&FBOVESPA’s Novo Mercado special segment rules so Vale may be effectively listed on such
special segment;

(iii) The merger of Valepar into Vale at an exchange ratio that contemplates a 10%
increase in the number of shares held by the shareholders of Valepar compared to Valepar’s current
shareholding interest, and represents a dilution of approximately 3% of the shareholding interest held
by the other shareholders in Vale.

In line with the provisions of item ‘‘iii’’ above, Valepar’s shareholders will receive 1.2065 Vale common
shares for each Valepar share held by them. As a result, Vale will issue 173,543,667 new common shares, all
registered and without par value, in favor of Valepar’s shareholders. Consequently, Valepar’s shareholders will
own a total of 1,908,980,340 Vale common shares after the merger of Valepar.

The goodwill balance carried on Valepar’s financial statements and its potential tax benefit use by Vale
will not be subject to capitalization in favor of Valepar’s shareholders, but will be for the benefit of all Vale’s
shareholders. Valepar will hold at the time of the merger enough cash and cash equivalents to fully settle its
liabilities.

The implementation of the Proposal is subject to (i) the approval of the Proposal, including the
merger of Valepar into Vale, by Valepar’s and Vale’s corporate bodies; and (ii) the acceptance by at least
54.09% of class A preferred shares of the voluntary conversion, as mentioned in item ‘‘i’’ above, within the
maximum term of 45 days from the shareholders’ meeting decision on the matter, resulting in a combined
shareholding interest held by the Shareholders of less than 50% of Vale’s total common shares. Valepar and
the Shareholders will not exercise their voting right at Vale’s shareholders’ meetings that consider the
voluntary conversion of the Vale class A preferred shares into common shares and the merger of Valepar.

F-98
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Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

30. Stockholders’ equity (Continued)

The holders of American Depositary Shares representing class A preferred shares of Vale will be able
to elect voluntary conversion into American Depositary Shares representing common shares of Vale, on the
same terms available to holders of class A preferred shares. Class A preferred shares, and preferred ADSs,
that do not elect voluntary conversion will remain outstanding.

On the date of effectiveness of the merger of Valepar into Vale, if the merger is approved, the
Shareholders will execute a new shareholders’ agreement (‘‘Vale Agreement’’) that will bind only 20% of the
totality of Vale’s common shares, and will be in force until November 9, 2020, with no provision for renewal.

For 6 months from the date of entry into force of the Vale Agreement, the Shareholders will be
obligated not to transfer, by any means, either directly or indirectly, Vale shares they receive as a result of the
implementation of the Proposal (‘‘Lock-Up’’), except for (i) the transfer of Vale’s shares by the Shareholders
to their affiliates and their current shareholders, provided that such transferred shares shall remain subject to
the Lock-Up, and (ii) the transfer of shares held by the Shareholders prior to the merger of Valepar.

Accounting policy

The stockholder’s remuneration is paid on dividends and interest on capital. This remuneration is
recognized as a liability in the financial statements of the Company based on bylaws. Any amount above the
minimum compulsory remuneration approved by the bylaws shall only be recognized in current liabilities on
the date that is approved by stockholders.

The Company is permitted to distribute interest attributable to stockholders’ equity. The calculation is
based on the stockholders’ equity amounts as stated in the statutory accounting records and the interest rate
applied may not exceed the Brazilian Government Long-term Interest Rate (‘‘TJLP’’) determined by the
Central Bank of Brazil. Also, such interest may not exceed 50% of the net income for the year or 50% of
retained earnings plus profit reserves as determined by Brazilian corporate law.

The benefit to the Company, as opposed to making a dividend payment, is a reduction in the income
tax burden because this interest charge is tax deductible in Brazil. Income tax of 15% is withheld on behalf of
the stockholders relative to the interest distribution. Under Brazilian law, interest attributed to stockholders’
equity is considered as part of the annual minimum mandatory dividend. This notional interest distribution is
treated for accounting purposes as a deduction from stockholders’ equity in a manner similar to a dividend
and the tax deductibility recorded in the income statement.

31. Related parties

Transactions with related parties are made by the Company at arm´s-length, observing the price and
usual market conditions and therefore do not generate any undue benefit to their counterparties or loss to
the Company.

In the normal course of operations, Vale enters into contracts with related parties (associates, joint
ventures and stockholders), related to the sale and purchase of products and services, loans, derivatives,
leasing of assets, sale of raw material and railway transportation services.

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Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

31. Related parties (Continued)

The balances of these related party transactions and their effects on the financial statements are as
follows:

Assets
December 31, 2016 December 31, 2015
Cash and Derivative Cash and Derivative
cash financial Accounts Related cash financial Accounts Related
equivalents instruments receivable parties equivalents instruments receivable parties
Banco Bradesco S.A. . . . . . . . 522 324 – – 37 66 – –
Banco do Brasil S.A. . . . . . . . 57 34 – – 395 16 – –
Companhia Coreano-Brasileira de
Pelotização . . . . . . . . . . . . – – – 5 – – – 6
Companhia Hispano-Brasileira de
Pelotização . . . . . . . . . . . . – – 1 – – – 1 4
Companhia Ítalo-Brasileira de
Pelotização . . . . . . . . . . . . – – – 8 – – – 8
Companhia Nipo-Brasileira de
Pelotização . . . . . . . . . . . . – – – 15 – – – 9
Companhia Siderúrgica do Pecem – – 37 – – – – –
Consórcio Rebocadores da Baia
de São Marcos . . . . . . . . . . – – 10 – – – 15 –
Mitsui & Co., Ltd. . . . . . . . . . – – 4 – – – 1 –
MRS Logı́stica S.A. . . . . . . . . – – – 24 – – – 17
VLI . . . . . . . . . . . . . . . . . – – 9 12 – – 34 10
Others . . . . . . . . . . . . . . . . – – 46 9 – – 27 17
Total . . . . . . . . . . . . . . . . . 579 358 107 73 432 82 78 71

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Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

31. Related parties (Continued)

Liabilities
December 31, 2016 December 31, 2015
Derivative Loans Derivative Loans
financial Others Related and financial Others Related and
instruments liabilities parties borrowings instruments liabilities parties borrowings
Aliança Geração de Energia S.A. . – 16 38 – – 11 – –
Banco Bradesco S.A. . . . . . . . . 250 – – 6 205 54 – 370
Banco do Brasil S.A. . . . . . . . . 45 – – 2,568 250 – – 2,625
BNDES . . . . . . . . . . . . . . . . 72 – – 4,432 39 – – 4,066
BNDES Participações S.A. . . . . . – – – 414 – – – 371
Companhia Coreano-Brasileira de
Pelotização . . . . . . . . . . . . . – 3 59 – – 4 70 –
Companhia Hispano-Brasileira de
Pelotização . . . . . . . . . . . . . – 39 14 – – 37 7 –
Companhia Ítalo-Brasileira de
Pelotização . . . . . . . . . . . . . – – 99 – – 3 64 –
Companhia Nipo-Brasileira de
Pelotização . . . . . . . . . . . . . – 3 146 – – 9 112 –
Consórcio Rebocadores da Baı́a de
São Marcos . . . . . . . . . . . . . – – – – – 8 – –
Ferrovia Centro-Atlântica S.A. . . . – – 83 – – – 68 –
Mitsui & Co., Ltd. . . . . . . . . . . – 17 – – – 11 – –
MRS Logı́stica S.A. . . . . . . . . . – 25 – – – 23 – –
Sumic Nickel Netherland B.V . . . – – 353 – – – 352 –
VLI . . . . . . . . . . . . . . . . . . – 3 – – – – – –
Others . . . . . . . . . . . . . . . . . – 38 7 – – 30 15 –
Total . . . . . . . . . . . . . . . . . . 367 144 799 7,420 494 190 688 7,432

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Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

31. Related parties (Continued)

Year ended December 31

2016 2015 2014
Net Costs Net Costs Net Costs
operating and Financial operating and Financial operating and Financial
revenue expenses result revenue expenses result revenue expenses result
Aliança Geração de
Energia S.A. . . . . . . . . – (132) – 12 – – – – –
Banco Bradesco S.A.(i) . . . – – 205 – – (75) – – (24)
Banco do Brasil S.A.(i) . . . – – (456) – – (374) – – (110)
Baovale Mineração S.A. . . – (17) – – (24) – – – –
BNDES(i) . . . . . . . . . . . – – (558) – – (372) – – (199)
BNDES Participações S.A.(i) – – (73) – – (50) – – (41)
California Steel
Industries, Inc. . . . . . . . 12 – – – – – 183 (215) –
Companhia Coreano-
Brasileira de Pelotização . – (62) (6) – (80) – – (97) –
Companhia Hispano-
Brasileira de Pelotização . – (43) (4) – (50) – – (47) –
Companhia Ítalo-Brasileira
de Pelotização . . . . . . . – (49) (8) – (66) – – (49) –
Companhia Nipo-Brasileira
de Pelotização . . . . . . . – (114) (11) – (106) – – (155) –
Companhia Siderúrgica do
Atlântico . . . . . . . . . . – (6) – – – – – – –
Companhia Siderúrgica do
Pecem . . . . . . . . . . . . 132 (29) – – – – – – –
Ferrovia Centro
Atlântica S.A. . . . . . . . 36 (28) (2) 47 (39) (1) 59 (61) –
Ferrovia Norte Sul S.A. . . . 16 – – – – – – – –
Mitsui & Co., Ltd. . . . . . . 141 (37) – 187 – – 111 (35) –
MRS Logı́stica S.A. . . . . . – (464) – – (489) – – (593) –
Samarco Mineração S.A. . . 22 – 1 127 – – 210 – –
VLI . . . . . . . . . . . . . . 275 (22) – 251 – – 350 – 8
Others . . . . . . . . . . . . . 18 (1) 2 55 (44) 8 102 (42) 19
Total . . . . . . . . . . . . . . 652 (1,004) (910) 679 (898) (864) 1,015 (1,294) (347)

(i) Does not include exchange rate variation.

The key management personnel remuneration is as follows:

Year ended December 31

2016 2015 2014
Short-term benefits
Wages or pro-labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 8 11
Direct and indirect benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 6 7
Bonus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – 8 12
12 22 30
Long-term benefits
Shares based . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1 1
Termination of position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 6 –
18 29 31

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Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

32. Commitments

a) Base metals operations

i) Nickel Operations—New Caledonia

In regards to the construction and installation of the nickel plant in New Caledonia, Vale Canada
Limited (‘‘Vale Canada’’) provided guarantees in respect of a special financing arrangement, structured under
French tax law, to BNP Paribas (agent for the benefit of certain French institutional tax investors). The
guarantees relate to lease finance payments due from Vale Nouvelle-Calédonie S.A.S. (‘‘VNC’’) to a special
purpose company held by the French tax investors in respect of certain assets of the plant. Consistent with
VNC’s commitments under the financing structure, these assets were substantially complete as at
December 31, 2012. Vale Canada has committed that these assets will operate for a five year period following
substantial completion. Vale Canada believes the likelihood of the guarantees being called upon is remote.

ii) Nickel Operations—Indonesia

In October 2014, Vale subsidiary PT Vale Indonesia Tbk (‘‘PTVI’’), a public company in Indonesia,
renegotiated its agreement with the Government to operate (known as the Contract of Work (‘‘CoW’’)). The
renegotiation included an undertaking by PTVI to further divest 20% of its shares to Indonesian participants
(approximately 20% of PTVI’s shares already being registered on the Indonesian stock exchange) within five
years. This undertaking will be fulfilled by PTVI’s existing major shareholders, being Vale Canada and
Sumitomo Metal Mining, Co., Ltd., on a pro rata basis.

iii) Nickel Operations—Canada

The subsidiaries Vale Canada, Vale Newfoundland & Labrador Limited (‘‘VNLL’’) and the Province
of Newfoundland and Labrador (the ‘‘Province’’) signed a Development Agreement with respect to the
development and operation of the Voisey’s Bay mine along with certain other obligations with respect to
processing in the Province and the export of nickel and copper concentrate. On December 19, 2014, the Sixth
Amendment to the Development Agreement was executed. The Sixth Amendment includes operational and
other key commitments in the Development Agreement. As such, under the Development Agreement, as
amended, VNLL has a potential obligation secured by letters of credit and other security, which may become
due and payable in the event that certain commitments in relation to the construction of the underground
mine are delayed or not met.

iv) Other

In the course of the operations the Company has provided other letters of credit, guarantees and
surety bonds in the amount of US$1.1 billion that are associated with items such as environment reclamation,
asset retirement obligation commitments, insurance, electricity commitments, post-retirement benefits,
community service commitments and import and export duties.

F-103
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Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

32. Commitments (Continued)

b) Participative stockholders’ debentures

At the time of its privatization in 1997, Vale issued debentures to then-existing stockholders, including
the Brazilian Government. The debentures’ terms were set to ensure that pre-privatization stockholders would
participate in potential future benefits that might be obtained from exploiting mineral resources.

A total of 388,559,056 debentures were issued with a par value of R$0.01 (one cent of Brazilian Real),
whose value will be inflation-indexed the General Market Price Index (‘‘IGP-M’’), as set out in the Issue
Deed. The Company paid as semiannual remuneration the amount of US$84 (R$268) and US$65 (R$209),
respectively, for the year ended December 31, 2016 and 2015.

c) Others commitments

The table below sets forth the annual minimum, required and non-cancelable, future payments related
to the contractual obligations assumed by the Company as of December 31.

2017 2018 2019 2020 2021 and thereafter

Operating lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149 134 131 130 485
Purchase obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,572 363 186 140 1,127
Total minimum payments required . . . . . . . . . . . . . . . . . . . . . 2,721 497 317 270 1,612

Operating lease—Vale has operating lease agreements with its joint ventures Companhia Coreano-
Brasileira de Pelotização, Companhia Hispano-Brasileira de Pelotização, Companhia Ítalo-Brasileira de
Pelotização and Companhia Nipo-Brasileira de Pelotização (together ‘‘pelletizing companies’’), in which Vale
leases their pelletizing plants. These renewable operating lease agreements have last between 3 and 10 years.
The minimum future payments have been calculated considering that all contracts will be renewed
automatically.

The Company also has operating leases for the exploration and processing of iron ore with joint
ventures, port operations with third parties and property leases for its operational facilities with third parties.

The total amount of operational leasing expenses for the year ended on December 31, 2016, 2015 and
2014 were US$266, US$329 and US$348, respectively.

Purchase obligations—The purchase obligations derive mainly from take or pay contracts, contracts
for the acquisition of fuel and the acquisition of raw materials and services.

d) Guarantees provided

As of December 31, 2016, corporate guarantees provided by Vale (within the limit of its direct or
indirect interest) for the companies Norte Energia S.A. and Companhia Siderúrgica do Pecém S.A. totaled
US$361 and US$1,450 respectively.

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Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

33. Additional information about derivatives financial instruments

a) Sensitivity analysis of derivative financial instruments

The following tables present the potential value of the instruments given hypothetical stress scenarios
for the main market risk factors that impact the derivatives positions. The scenarios were defined as follows:

• Scenario I: fair value calculation considering market prices as of December 31, 2016

• Scenario II: fair value estimated considering a 25% deterioration in the associated risk variables

• Scenario III: fair value estimated considering a 50% deterioration in the associated risk variables

Instrument Instrument’s main risk events Scenario I Scenario II Scenario III

CDI vs. US$ fixed rate swap . . . . . . R$ depreciation (121) (658) (1.195)
US$ interest rate inside Brazil decrease (121) (134) (146)
Brazilian interest rate increase (121) (124) (127)
Protected item: R$ denominated debt . R$ depreciation n.a. – –
TJLP vs. US$ fixed rate swap . . . . . R$ depreciation (622) (1.115) (1.609)
US$ interest rate inside Brazil decrease (622) (648) (676)
Brazilian interest rate increase (622) (675) (723)
TJLP interest rate decrease (622) (660) (700)
Protected item:R$ denominated debt . R$ depreciation n.a. – –
TJLP vs. US$ floating rate swap . . . . R$ depreciation (55) (88) (120)
US$ interest rate inside Brazil decrease (55) (57) (60)
Brazilian interest rate increase (55) (59) (62)
TJLP interest rate decrease (55) (58) (61)
Protected item: R$ denominated debt . R$ depreciation n.a. – –
R$ fixed rate vs. US$ fixed rate swap . R$ depreciation (13) (102) (190)
US$ interest rate inside Brazil decrease (13) (25) (38)
Brazilian interest rate increase (13) (41) (66)
Protected item:R$ denominated debt . R$ depreciation n.a. – –
IPCA vs. US$ fixed rate swap . . . . . R$ depreciation (51) (168) (285)
US$ interest rate inside Brazil decrease (51) (58) (66)
Brazilian interest rate increase (51) (78) (102)
IPCA index decrease (51) (64) (77)
Protected item: R$ denominated debt . R$ depreciation n.a. – –
IPCA vs. CDI swap . . . . . . . . . . . Brazilian interest rate increase 42 (3) (41)
IPCA index decrease 42 19 (2)
Protected item: R$ denominated debt
linked to IPCA . . . . . . . . . . . . IPCA index decrease n.a. (19) 2
EUR fixed rate vs. US$ fixed rate
swap . . . . . . . . . . . . . . . . . . . EUR depreciation (52) (216) (380)
Euribor increase (52) (58) (64)
US$ Libor decrease (52) (71) (92)
Protected item:EUR denominated
debt . . . . . . . . . . . . . . . . . . . EUR depreciation n.a. 216 380
EUR Forward . . . . . . . . . . . . . . . EUR depreciation (46) (177) (308)
Euribor increase (46) (46) (46)
US$ Libor decrease (46) (46) (46)
Protected item:EUR denominated
debt . . . . . . . . . . . . . . . . . . . EUR depreciation n.a. 177 308

F-105
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Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

33. Additional information about derivatives financial instruments (Continued)

Instrument Instrument’s main risk events Scenario I Scenario II Scenario III

Bunker Oil protection
Forwards and options . . . . . . . . . Bunker Oil price decrease 116 (11) (154)
Protected item: Part of costs linked
to bunker oil prices . . . . . . . . . Bunker Oil price decrease n.a. 11 154
Nickel sales fixed price protection
Forwards . . . . . . . . . . . . . . . . . Nickel priced decrease (1) (30) (59)
Protected item: Part of nickel
revenues with fixed prices . . . . . . Nickel price fluctuation n.a. 30 59
Purchase protection program
Nickel forwards . . . . . . . . . . . . . Nickel price increase 0,1 (0,2) (0,6)
Protected item: Part of costs linked
to nickel prices . . . . . . . . . . . . Nickel price increase n.a. 0,2 0,6
(0,
Copper forwards . . . . . . . . . . . . Copper price increase 1) (0,7) (1, 4)
Protected item: Part of costs linked
to copper prices . . . . . . . . . . . Copper price increase n.a. 0,7 1,4
SLW warrants . . . . . . . . . . . . . . SLW stock price decrease 44 23 8
VLI call options . . . . . . . . . . . . . VLI stock value increase (72) (109) (151)
Options regarding non-controlling
interest in subsidiary . . . . . . . . . Subsidiary stock value decrease 121 34 (21)

Instrument Main risks Scenario I Scenario II Scenario III

Embedded derivatives—Raw material
purchase (nickel) . . . . . . . . . . . Nickel price increase 0,3 (15) (31)
Embedded derivatives—Raw material
purchase (copper) . . . . . . . . . . Copper price increase 2 (4) (9)
Embedded derivatives—Gas purchase Pellet price increase (2) (4) (7)
Embedded derivatives—Guaranteed
minimum return (VLI) . . . . . . . VLI stock value decrease (182) (303) (473)

b) Financial counterparties’ ratings

The transactions of derivative instruments, cash and cash equivalents as well as investments are held
with financial institutions whose exposure limits are periodically reviewed and approved by the delegated
authority. The financial institutions credit risk is performed through a methodology that considers, among
other information, ratings provided by international rating agencies.

F-106
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Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

33. Additional information about derivatives financial instruments (Continued)

The table below presents the ratings in foreign currency published by agencies Moody’s and S&P
regarding the main financial institutions that we had outstanding positions as of December 31, 2016.

Long term ratings by counterparty Moody’s S&P

ANZ Australia and New Zealand Banking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Aa2 AA-
Banco Bradesco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ba3 BB
Banco de Credito del Peru . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Baal BBB
Banco do Brasil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ba3 BB
Banco do Nordeste . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ba3 BB
Banco Safra . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ba3 BB
Banco Santander . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ba3 BB
Banco Votorantim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ba3 BB
Bank of America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Baal BBB+
Bank of Nova Scotia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Aa3 A+
Bank of Tokyo Mitsubishi UFJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1 A
Banpara . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ba3 BB-
Barclays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Baa3 BBB
BBVA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A3 BBB+
BNP Paribas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Al A
BTG Pactual . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ba3 B+

Long term ratings by counterparty Moody’s S&P

Caixa Economica Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ba3 BB
Citigroup . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Baal BBB+
Credit Agricole . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2 A
Deutsche Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2 BBB+
Goldman Sachs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A3 BBB+
HSBC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1 A
Intesa Sanpaolo Spa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A3 BBB-
ltau Unibanco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ba3 BB
JP Morgan Chase & Co . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A3 A-
Macquarie Group Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A3 BBB
Morgan Stanley . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A3 BBB+
Royal Bank of Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Aa2 AA-
Societe Generale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Aa3 AA-
Standard Bank Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2 A
Standard Chartered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Baa3 –
Al BBB+

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Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

33. Additional information about derivatives financial instruments (Continued)

c) Market curves

The curves used on the pricing of derivatives instruments were developed based on data from BM&F,
Central Bank of Brazil, London Metals Exchange and Bloomberg.

(i) Products

Nickel

Maturity Price (US$/ton) Maturity Price (US$/ton) Maturity Price (US$/ton)

SPOT . . . . . . . . . . . . . . . . . . . . . . . . . 10.010 JUN17 10.064 DEC17 10.155
JAN17 . . . . . . . . . . . . . . . . . . . . . . . . 9.984 JUL17 10.080 DEC18 10.316
FEB17 . . . . . . . . . . . . . . . . . . . . . . . . 10.002 AUG17 10.096 DEC19 10.452
MAR17 . . . . . . . . . . . . . . . . . . . . . . . . 10.022 SEP17 10.110 DEC20 10.591
APR17 . . . . . . . . . . . . . . . . . . . . . . . . 10.036 OCT17 10.128
MAY17 . . . . . . . . . . . . . . . . . . . . . . . . 10.052 NOV17 10.143

Copper

Maturity Price (US$/lb) Maturity Price (US$/lb) Maturity Price (US$/lb)

SPOT . . . . . . . . . . . . . . . . . . . . . . . . . 2,51 JUN17 2,51 DEC17 2,51
JAN17 . . . . . . . . . . . . . . . . . . . . . . . . 2,51 JUL17 2,51 DEC18 2,50
FEB17 . . . . . . . . . . . . . . . . . . . . . . . . 2,51 AUG17 2,51 DEC19 2,50
MAR17 . . . . . . . . . . . . . . . . . . . . . . . . 2,51 SEP17 2,52 DEC20 2,49
APR17 . . . . . . . . . . . . . . . . . . . . . . . . 2,51 OCT17 2,51
MAY17 . . . . . . . . . . . . . . . . . . . . . . . . 2,51 NOV17 2,51

Bunker Oil

Maturity Price (US$/ton) Maturity Price (US$/ton) Maturity Price (US$/ton)

SPOT . . . . . . . . . . . . . . . . . . . . . . . . . 332 JUN17 318 DEC17 312
JAN17 . . . . . . . . . . . . . . . . . . . . . . . . 328 JUL17 317 DEC18 304
FEB17 . . . . . . . . . . . . . . . . . . . . . . . . 324 AUG17 316 DEC19 291
MAR17 . . . . . . . . . . . . . . . . . . . . . . . . 322 SEP17 315 DEC20 280
APR17 . . . . . . . . . . . . . . . . . . . . . . . . 321 OCT17 314
MAY17 . . . . . . . . . . . . . . . . . . . . . . . . 320 NOV17 313

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Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

33. Additional information about derivatives financial instruments (Continued)

(ii) Foreign exchange and interest rates

US$—Brazil Interest Rate

Maturity Rate (% p.a.) Maturity Rate (% p.a.) Maturity Rate (% p.a.)

02/01/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,28 12/01/17 2,96 04/01/20 3,47
03/01/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,93 01/02/18 3,04 07/01/20 3,60
04/03/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,54 04/02/18 2,94 10/01/20 3,57
05/02/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,98 07/02/18 2,93 01/04/21 3,75
06/01/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,63 10/01/18 2,95 04/01/21 3,85
07/03/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,32 01/02/19 3,03 07/01/21 3,92
08/01/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,22 04/01/19 3,03 10/01/21 4,00
09/01/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,11 07/01/19 3,17 01/03/22 4,16
10/02/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,04 10/01/19 3,27 01/02/23 4,55
11/01/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,01 01/02/20 3,41 01/02/24 5,18

US$ Interest Rate

Maturity Rate (% p.a.) Maturity Rate (% p.a.) Maturity Rate (% p.a.)

1M . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,77 6M 1,13 11M 1,19
2M . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,82 7M 1,15 12M 1,19
3M . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,00 8M 1,16 2Y 1,47
4M . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,06 9M 1,17 3Y 1,73
5M . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,10 10M 1,18 4Y 1,92

TJLP

Maturity Rate (% p.a.) Maturity Rate (% p.a.) Maturity Rate (% p.a.)

02/01/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,50 12/01/17 7,50 04/01/20 7,50
03/01/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,50 01/02/18 7,50 07/01/20 7,50
04/03/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,50 04/02/18 7,50 10/01/20 7,50
05/02/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,50 07/02/18 7,50 01/04/21 7,50
06/01/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,50 10/01/18 7,50 04/01/21 7,50
07/03/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,50 01/02/19 7,50 07/01/21 7,50
08/01/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,50 04/01/19 7,50 10/01/21 7,50
09/01/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,50 07/01/19 7,50 01/03/22 7,50
10/02/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,50 10/01/19 7,50 01/02/23 7,50
11/01/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,50 01/02/20 7,50 01/02/24 7,50

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 14NOV201111161635
Notes to the Financial Statements (Continued)
Expressed in millions of United States dollar, unless otherwise stated

33. Additional information about derivatives financial instruments (Continued)

BRL Interest Rate

Maturity Rate (% p.a.) Maturity Rate (% p.a.) Maturity Rate (% p.a.)

02/01/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,92 12/01/17 11,70 04/01/20 11,27
03/01/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,51 01/02/18 11,59 07/01/20 11,32
04/03/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,13 04/02/18 11,37 10/01/20 11,34
05/02/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,92 07/02/18 11,21 01/04/21 11,35
06/01/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,70 10/01/18 11,15 04/01/21 11,40
07/03/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,53 01/02/19 11,07 07/01/21 11,45
08/01/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,28 04/01/19 11,10 10/01/21 11,48
09/01/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,10 07/01/19 11,12 01/03/22 11,50
10/02/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,94 10/01/19 11,17 01/02/23 11,62
11/01/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,81 01/02/20 11,22 01/02/24 11,59

Implicit Inflation (IPCA)

Maturity Rate (% p.a.) Maturity Rate (% p.a.) Maturity Rate (% p.a.)

02/01/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,53 12/01/17 5,44 04/01/20 5,04
03/01/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,15 01/02/18 5,33 07/01/20 5,09
04/03/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,79 04/02/18 5,16 10/01/20 5,10
05/02/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,59 07/02/18 5,04 01/04/21 5,10
06/01/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,38 10/01/18 4,98 04/01/21 5,15
07/03/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,21 01/02/19 4,91 07/01/21 5,19
08/01/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,98 04/01/19 4,93 10/01/21 5,22
09/01/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,81 07/01/19 4,94 01/03/22 5,24
10/02/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,66 10/01/19 4,97 01/02/23 5,37
11/01/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,54 01/02/20 5,00 01/02/24 5,37

EUR Interest Rate

Maturity Rate (% p.a.) Maturity Rate (% p.a.) Maturity Rate (% p.a.)

1M . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,38 6M 0,25 11M 0,21
2M . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,35 7M 0,23 12M 0,20
3M . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,33 8M 0,22 2Y 0,16
4M . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,29 9M 0,22 3Y 0,10
5M . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,26 10M 0,21 4Y 0,02

CAD Interest Rate

Maturity Rate (% p.a.) Maturity Rate (% p.a.) Maturity Rate (% p.a.)

1M . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,94 6M 1,10 11M 0,54
2M . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,94 7M 0,92 12M 0,49
3M . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,95 8M 0,79 2Y 1,11
4M . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,02 9M 0,69 3Y 1,26
5M . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,07 10M 0,61 4Y 1,41

Currencies—Ending rates

CAD/US$ . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,7443 US$/BRL 3,2591 EUR/US$ 1,0472

F-110
 14NOV201111161635
Members of the Board of Directors, Fiscal Council, Advisory Committees and Executive Officers

Board of Directors
Gueitiro Matsuo Genso Governance and Sustainability Committee
Chairman Fernando Jorge Buso Gomes
Fernando Santos do Nascimento
Fernando Jorge Buso Gomes
Eduardo de Oliveira Rodrigues Filho
Vice-President
Priscila Valle Costa de Oliveira
Dan Antonio Marinho Conrado Ricardo Simonsen
Marcel Juviniano Barros
Fiscal Council
Eduardo Refinetti Guardia
Motomu Takahashi Marcelo Amaral Moraes
Oscar Augusto de Camargo Filho Chairman
Eduardo de Salles Bartolomeo Paulo José dos Reis Souza
Lucio Azevedo Sandro Kohler Marcondes
Alberto Guth Anı́bal Moreira dos Santos
Alternate Raphael Manhães Martins
Gilberto Antonio Vieira Alternate
Moacir Nachbar Junior Paula Bicudo de Castro Magalhães
Arthur Prado Silva Sergio Mamede Rosa do Nascimento
Francisco Ferreira Alexandre Oswaldo Mário Pego de Amorim Azevedo
Robson Rocha Julio Sergio de Souza Cardozo
Luiz Mauricio Leuzinger
Yoshitomo Nishimitsu Executive Officers
Eduardo de Oliveira Rodrigues Filho Murilo Pinto de Oliveira Ferreira
Marcelo Marcolino Chief Executive Officer
Carlos Roberto de Assis Ferreira
Clovis Torres Junior
Marcelo Gasparino
Executive Officer (Human Resources, Health & Safety,
Advisory Committees of the Board of Directors Sustainability, Energy, Mergers and Acquisitions,
Controlling Committee Governance, Corporate Integrity, Legal and Tax)
Eduardo Cesar Pasa Luciano Siani Pires
Moacir Nachbar Junior Executive Officer (Finance and Investors Relations)
Oswaldo Mário Pego de Amorim Azevedo
Roger Allan Downey
Executive Development Committee Executive Officer (Fertilizers, Coal and Strategy)
Oscar Augusto de Camargo Filho
Gerd Peter Poppinga
Marcel Juviniano Barros
Executive Officer (Ferrous)
Fernando Jorge Buso Gomes
Tatiana Boavista Barros Heil Humberto Ramos de Freitas
Executive Officer (Logistics and Mineral Research)
Strategic Committee
Murilo Pinto de Oliveira Ferreira Jennifer Anne Maki
Gueitiro Matsuo Genso Executive Officer (Base Metals)
Luiz Carlos Trabuco Cappi
Oscar Augusto de Camargo Filho Rogerio Nogueira
Eduardo de Salles Bartolomeo Investors Relations and Controller Director
Finance Committee Murilo Muller
Gilmar Dalilo Cezar Wanderley Controllership Executive Manager
Fernando Jorge Buso Gomes
Dioni Brasil
Eduardo de Oliveira Rodrigues Filho
Accounting Manager
Marcelo Marcolino
TC-CRC-RJ 083305/O-8

F-111