Vale announced this Thursday, February 24th, its financial result for the
fourth trimester of 2021. In 4Q21, Vale reported a proforma adjusted
EBITDA of US$ 6.959 billion, US$ 150 million lower than 3Q21. Net income
in 4Q21 was US$ 5.4 billion, US$ 1.5 billion higher than 3Q21, primarily
due to higher financial results (US$ 3.5 billion), mainly due to the
reclassification of cumulative foreign exchange variation in equity.
In a year still marked by the persistent effects of the COVID-19
pandemic and market volatility, we were able to deliver significant
achievements in creating sustainable value to all our stakeholders. In
line with our new pact with society, we advanced in repairing Brumadinho
and Mariana and reinforced our support for the fight against the
pandemic. We also announced investments of up to US$ 6 billion to reduce
emissions and defined our social ambition to create a legacy of
education, health and income in the communities we operate. We are
operating safer by implementing VPS, decommissioning our upstream dams
and aligning with the GISTM standards. At the same time, we are
recovering our iron ore and base metals production capacity, setting the
foundation to create and distribute value consistently.
Eduardo Bartolomeo, Chief Executive Officer
- Our operations
We delivered on our plan to stabilize our operations:
- In the Ferrous business, we reached an iron ore capacity of around
340 Mtpy at the end of 2021 vs. 322 Mtpy at the end of 2020. We
expect to achieve 370 Mtpy capacity by the end of 2022.
- We produced 315.6 Mt of iron ore fines in 2021, up 5.1% y/y,
mainly due to (i) the resumption of Serra Leste production, (ii)
improved performance at Itabira and Timbopeba, (iii) increased
production of high-silica products in Brucutu and Fábrica, and (iv)
higher volume of third-party purchases. This was partially offset by
S11D performance, impacted by the higher strip ratio and lower
mining productivity during the year, caused by higher incursion of
jaspilite materials in the ore body. For 2022, we expect to increase
production to 320-335 Mt.
- Our pellets production totaled 31.7 Mt in 2021, 6.8% higher y/y,
mainly from the resumption of operations at Vargem Grande
pelletizing plants at the beginning of the year. For 2022, we expect
to increase production to 34-38 Mt.
- In Base Metals, we produced 168.0 kt of nickel, down 8.5% y/y, and
296.8 kt of copper in 2021, down 17.6% y/y. The performance was
affected by several one-off events, such as the labor disruption in
Sudbury and the maintenance activities in Salobo, Sossego, Matsuzaka
and Onça Puma. Nevertheless, we move more positively into 2022, with
Ontario operations concluding the ramp-up at Sudbury and Totten mine
resuming hoisting activities in early February. Matsuzaka refinery
and Onça Puma also had a strong fourth quarter after maintenance. In
copper, Salobo mine movement should keep improving during the year.
For 2022, we expect nickel production to reach 175-190 kt and copper
production 330-355 kt.
- Our coal production increased 44.6% y/y in 2021 to 8.5Mt due to
the higher productivity of the revamped plant.
- We advanced in implementing our management system (VPS), a
concrete sign of our drive for the cultural transformation that will
deliver results safely and consistently. The operations that matured
further in VPS presented higher adherence to the maintenance plans
and operational stability. A direct consequence is that safety
performance improved broadly across the company, and we recorded the
lowest Total Recordable Injury Frequency Rate (TRIFR) in our
- We simplified our asset portfolio significantly. We concluded the
sale of VNC and engaged in the responsible exit of the Coal Business
in Mozambique. We also divested the manganese ferroalloy business,
the 50% stake in CSI and the Mosaic shares.
- Our commitments to reparation and society
Advancing in the reparation initiatives remains one of our
- In Brumadinho, the Integral Reparation Agreement signed in
February 2021 brought legitimacy and legal certainty to the
reparation initiatives. We destined R$ 23.0 billion to the
reparation in the last three years, including the agreements for
individual indemnification with 12.7 thousand people. Among the
initiatives in 2021, we paid R$ 4.4 billion as part of the
implementation of the Income Transfer Program. We also concluded the
commissioning of a system of pipelines and reservoirs to assure the
current demand of the Belo Horizonte region.
- In Mariana, we are committed to the Renova Foundation, through its
governing body and by providing specialized professionals to
implement the reparation programs. The reinstating of the right to
housing for 107 families has progressed and, after the adoption of
the simplified process, we doubled the number of indemnifications,
now reaching 51.8 thousand people. After new court decisions on
individual compensation for residents of cities impacted by the
Fundão dam failure, we complemented the provision related to Renova
Foundation by US$ 1.1 billion in 4Q21. These decisions mainly
changed and expanded the concept of damage, categories,
indemnifiable amounts and affected municipalities.
- We partnered with the Movimento Unidos pela Vacina to enhance the
operational structure for vaccination in Brazil. We continued with
our humanitarian support initiatives, donating 1 million baskets of
staple food for families in need in the country. Since 2020, we have
donated around R$ 830 million to combating COVID-19.
- Dam safety
In 2021, we improved the safety of our geotechnical structures.
- Our de-characterization plan advanced and, by the end of 2021, we
had concluded the works on 7 out of the 30 structures.
- We improved the safety conditions on the Doutor, Sul Inferior and
Norte Laranjeiras dams, allowing reclassification to Emergency Level
1. Additionally, the Emergency Level was removed from Marés I and
Forquilhas IV dams.
- We concluded the construction of the backup dam for Forquilhas I,
II, III and IV and Grupo dams, near the Fábrica mine. With that, all
the structures currently in Emergency Level 3 have backup dams in
- We started the removal of tailings from the B3/B4 dam in Nova Lima
(MG) and Sul Superior dam in Barão de Cocais (MG) using uncrewed and
remotely operated equipment.
- We established the Independent Tailings Review Board for each Iron
Ore business's operational system, aligned with the Global Industry
Standard for Tailings Management (GISTM) requirements and other
- We are committed to implementing the GISTM. As per the
self-assessment process conducted, we were more than 60% adherent to
the standard requirements by December 2021. We expect to reach 90%
adherence in 2022, 100% on tailings facilities with extreme or very
high potential consequences by August 2023 and 100% for other
structures by August 2025, in line with the deadlines established by
- We started in 2021 the operations of one tailings filtration plant
at the Vargem Grande Complex and the commissioning of two tailings
filtration plants at the Itabira complex. In 2022, we expect to
conclude the last plant in Brucutu, aligned with our commitment to
reducing the dependency on the use of dams.
- In 4Q21, we supplemented the provision for the de-characterization
of upstream dams by US$ 1.7 billion after an update of our estimates
considering new engineering and geotechnical solutions, including
new risk management approaches, the use of remotely operated
equipment and reinforcement of the containment plans of certain
- Sharing value creation
- Our proforma adjusted EBITDA was US$ 33.8 billion in 2021, US$
11.8 billion higher y/y, mainly due to higher realized prices in
ferrous minerals and copper, partially offset by higher costs
related to commodities prices and freight.
- Net income was US$ 22.4 billion in 2021, US$ 17.6 billion higher
y/y, mainly due to the higher proforma adjusted EBITDA and stronger
Since 2021, shareholder remuneration reached US$ 23.0 billion:
- In March, June, and September 2021, we have paid US$ 13.5 billion
in dividends and interest on capital for the year 2020 and
anticipation of 2021 results.
- Today, our Board of Directors approved dividends of US$ 3.5
billion. The amount distributed was calculated based on the December
31, 2021, balance sheet, considering our Shareholder Remuneration
Policy and including an extraordinary dividend of $0.7 billion.
Payment will be made in March 2022.
- To date, we have spent US$ 6.0 billion to repurchase the
equivalent to 6.3% of our outstanding shares, directly benefiting
our shareholders on a per share basis.
In 4Q21, Vale reported a proforma adjusted EBITDA of US$ 6.959
billion, US$ 150 million lower than 3Q21.
The main drivers of the difference of 4Q21 performance in comparison
to 3Q21 were lower realized prices (US$ 2.075 billion); the US$ 19.9/t
lower iron ore fines realized sales prices is mainly explained by the
steep US$ 53.3/t q/q decline in the 62% Fe reference price.
The negative effect of pricing was partially offset by higher sales
volumes (US$ 1.433 billion) with iron ore fines and pellets sales
Gross debt and leases totaled US$ 13.8 billion, and net debt totaled
US$ 1.9 billion at the end of 4Q21, both in line with 3Q21. Expanded
net debt increased to US$ 15.1 billion, mainly due to the additional
provisions recorded in the quarter for the de-characterization of
upstream dams and the Renova Foundation.