Frequently asked questions

Frequently asked questions

Frequently asked questions

Find answers here to the most frequently asked questions about IR.

What do investors need to do to invest in Vale's shares?

To invest in Vale local shares, traded on the São Paulo Stock Exchange – BM&FBOVESPA, it is necessary to contact a stockbroker. A list of stockbrokers who operate in Brazil is available on the BM&FBOVESPA website. Information about how to trade Vale ADRs, traded on the New York Stock Exchange – NYSE, can be obtained with your stockbroker, the New York Stock Exchange (NYSE) (www.nyse.com), NYSE Euronext Paris or JP Morgan, the Company's depositary bank for its ADRs (www.adr.com)

What are the Golden Shares?

Golden shares are preferred special class shares. They are required to be held by the Federative Republic of Brazil. The holder of the golden shares is entitled to the same rights (including with respect to voting, dividend preference and liquidation preference) as holders of preferred class A shares. In addition, the holder of the golden shares is entitled to veto any of our proposed action relating to the following matters:

1. a change in our name
2. a change in the location of our head office
3. a change in our corporate purpose as regards the working of mineral deposits
4. any liquidation of our company
5. any disposal or winding up of activities of any one or more of the following stages of the integrated systems of our iron ore mining:

a) mineral deposits, ore deposits, mines,
b) railways,
c) ports and maritime terminals
6. any change in the by-laws relating to the rights accorded to the classes of capital stock issued by us
7. any change in the by-laws relating to the rights accorded the golden shares.

What is the difference between Vale common and preferred class A shares?

As stated in Vale By-Laws, each common share entitles the holder thereof to one vote at shareholders meetings. Holders of common shares are not entitled to any preference relating to dividends or other distributions made by Vale.
Holders of preferred class A 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 minimum annual non-cumulative preferential dividend of (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. Non-controlling shareholders holding common of our shares representing at least 15% of our voting capital, and preferred class A shares representing at least 10% 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 class A shareholders meets the thresholds described above, shareholders holding our total share capital are entitled to combine their preferred class A or common shares representing at least 10% of holdings to appoint one member and an alternate to our Board of Directors. Holders of preferred class A shares and the golden shares may elect one member of the permanent fiscal council and the respective alternate. Noncontrolling holders of common shares comprising at least 10% of the common shares outstanding may also elect one member of the fiscal council and an alternate.

Where are the Vale's shares traded?

Click here.

Who is the controlling shareholder of Vale?

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.

How many of Vale's shares are effectively traded?

The shares available for trading are those that are not held by the controlling shareholder (Valepar S.A) and those that are not held by the Company in its Treasury. Please see Vale's shareholding structure and you may also check the free float, the total shares issued by the Company.

What is Vale shareholding structure?

Click here.

What are American Depositary Receipts (ADRs)?

American Depositary Receipts (ADRs) are certificates, issued by US banks, representing shares of those companies that are based outside the United States. ADRs were created to facilitate trading in the shares of non-US companies in US equity markets. The certificates are priced and traded in dollars on US stock exchanges. Many Brazilian companies have their shares traded on the New York Stock Exchange (NYSE) through this financial instrument. As well as obtaining visibility in the international market, companies that issue ADRs may find it easier to raise money in international markets when required. Vale's preferred shares began trading on the NYSE over-the-counter market in the form of Level 1 ADRs in 1994. In June 2000, the ADRs representing the Company's preferred shares started trading on the NYSE at Level II (ticker code VALE.P).In March 2002, with the last phase of Vale privatization, the ADRs representing the common shares issued by the Company also began trading on the NYSE, in the form of Level III (ticker code VALE).

What is meant by the term ADR ratio?

What is the ADR ratio of Vale? The ADR ratio is the ratio between the shares and the ADRs of a given company. In the case of Vale, each ADR represents one share of the Company, either common or preferred.

What is meant by the terms custodian agent and depositary bank?

The Company's custodian agent is the institution in Brazil which registers the shares in the name of those who buy them, and guarantees their ownership of these shares. Vale's custodian agent is Banco Bradesco S.A.
The depositary bank is the institution that issues ADRs, maintains a record of the holders of ADRs, registers the trades carried out and distributes the dividends or interest on shareholders equity payments in dollars to the holders of the ADRs. Vale's depositary bank for its ADRs is JP Morgan.

How did the share-split carried out by Vale in August 2004 work?

At an Extraordinary General Meeting held on August 18, 2004, Vale shareholders approved a proposal to split the Company's shares, by which each common or preferred share in the Company was split into three shares, either common or preferred, post-split. This share-split was aimed at repositioning the price of the Company's shares after substantial appreciation, making it easier for retail shareholders to buy and sell Vale shares.

How did the share-split carried out by Vale in May/June 2006 work?

At an Extraordinary General Meeting held on April 27, 2006, Vale shareholders approved a proposal to split the Company's shares, by which each common or preferred share in the Company was split into two shares, either common or preferred, post-split. This share-split was aimed at repositioning the price of the Company's shares after substantial appreciation, making it easier for retail shareholders to buy and sell Vale shares.

Who is your ADR depositary bank and transfer agent?

Our ADR depositary bank and transfer agent is Citibank N.A. Any inquiries regarding an individual ADR holding can be directed to Citibank N.A.

How can I buy Vale's ADRs?

You can hold ADRs directly through JPMorgan Chase Bank, N.A. as depositary, in which case you are a 'registered' holder. Registered ownership occurs when the owner of the stock is registered (or recorded) on the books (or records) of the corporation. Registered ownership is also known as "direct" ownership and the registered holder is known to the corporation as one of its shareholders. Registered shareholders receive all corporate communications, dividends, annual reports and proxy material directly from the company through the ADR depositary bank. Ownership comes in two forms: physical certificates, which evidence shares, or book-entry shares, which are evidenced by an account statement.
In contrast to registered holders, beneficial or 'street name' holders usually hold their shares through a bank or brokerage account and are not directly registered on the books of the company. Investors purchasing shares throu gh a broker must specifically direct the broker to register the shares with the corporation, if they wish to become a registered holder.

What are the benefits of holding ADRs?

ADRs eliminate many of the obstacles of holding non-U.S. securities since they trade and settle according to U.S. market practices, are quoted and traded in dollars and pay dividends in dollars. They eliminate custodian safekeeping charges in the issuer's home country and facilitate prompt dividend payments and corporate action notifications.

How do I convert my foreign shares into ADRs and vice versa?

You or your broker can transfer your foreign shares to Citibank’s custodian bank in the issuer's home country, along with ADR brokerage delivery instructions. Upon confirmation that the custodian has received the foreign shares, Citibank N.A. will issue the corresponding number of ADRs to you, representing the newly deposited shares, via your broker. To convert your ADRs back into foreign shares, you can instruct your broker to cancel the ADRs, by delivering the ADRs to Citibank NA, and providing the broker with complete delivery instructions in the issuer's home country. Citibank NA will instruct the local custodian to release the underlying shares accordingly.

Where can I direct inquiries relating to ADR dividend payments, transfer of ADR certificates, consolidation of shareholder accounts and locating lost ADR shares?

Citibank Shareholder Services
Address - P.O. Box 43077
Providence RI 02940-3077
Phone - 1-877-248-4237 (1-877-CITIADR)
The phone number outside the U.S. is 781-575-4555
Email: citibank@shareholders-online.com.

Which were Vale last acquisitions and divestitures?

See acquisitions and divestitures table.

How can shareholders contact Vale's investor relations department?

Contact can be made with Vale's Investor Relations Department through the following e-mail address: vale.ri@vale.com.

What is the measure of operational earnings adopted by Vale?

EBIT (Earnings Before Interest and Taxes) is the principal measure of operational earnings of Vale. This represents the operational earnings, or in other words, it is calculated as earnings after costs and operational expenses. By means of the EBIT, the Company can assess the purely operational performance, that is, without the impacts of its financial structure, non-operational items and other items of a tax nature.

What is the measure for generating cash adopted by Vale?

EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the principal measure of the generation of cash of Vale. This is calculated by the sum of the EBIT with depreciation, amortization and depletion, non-recurrent items (such as the retiring of assets) and the dividends received from non-consolidated subsidiaries. The retiring of assets is part of the calculation since it represents a non-cash expense. The dividends received from non-consolidated subsidiaries are also included in the calculation of the EBITDA for they represent cash owned by the Company.

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