Controversies

Pico Mine, Brazil

The Pico Mine, located in the Minas Gerais Iron Quadrangle, more precisely in the city of Itabirito, is one of the cradles of Vale's operations. This mine, which began operations in the 1940s, was previously acquired by Vale and expanded. It is part of the Southern System in Minas Gerais.

In February 2015, the Ministry of Labor and Employment (MTE) supervised the Pico Mine, in the state of Minas Gerais, specifically Ouro Verde, which is an outsourced company, contracted by Vale to provide goods transportation services. Due to allegations of irregular outsourcing as well as the submission of workers to conditions similar to slavery, the MTE filed an infringement case against Vale.

At the time of the inspection, Ouro Verde was formally and immediately notified by Vale to provide improvements at the construction site and to remedy the irregularities. The work activity was stopped and resumed a few days later.

In July 2015, we entered into an agreement with the Labor Prosecution Office, reinforcing our commitment to comply with the standards applicable to our employees' working environment. The outsourced company entered into the same agreement.

In 2016, Vale hired an external company to provide a detailed diagnosis at all our units in Minas Gerais, checking the physical conditions of the facilities and issues related to the availability of basic hygiene and drinking water, as well as the legal aspects of the health and comfort conditions in the workplace, following the rules by the Ministry of Labor. The result of this diagnosis was registered at the Labor Prosecution Office, and can be widely and freely consulted by interested parties.

The actions established in the agreement with the Ministry of Labor were fulfilled by Vale and Ouro Verde. Internal groups were later structured to identify and make continuous improvements at the facilities and workplaces. The results and improvements were monitored at meetings of the area leaders. The contract between Vale and Ouro Verde was canceled and, until the end of the contract, the inspections carried out by Vale were intensified.

Vale repudiates any form of disrespect to human rights and routinely oversees to prevent further occurrences and remedy possible irregularities, working to guarantee that his kind of event does not happen again in its projects and operations.

Carajás Railroad, Brazil

The Carajás Railroad is 892 kilometers long, linking the world's largest open pit iron ore mine in Carajás, in southeastern Pará, to Ponta da Madeira Port, in São Luís (MA). Its tracks transport 120 million tons of cargo and 350,000 passengers per year. Around 35 trains circulate simultaneously, including one of the largest freight trains in regular operation in the world, with 330 wagons and 3.3 kilometers in length.

Inaugurated in 1985, the Carajás Railroad is not only large: it also leads the ranking as one of the most efficient railroads in Brazil thanks to the constant investment in technology.

Vale seeks to maintain a respectful relationship and takes actions that avoid, mitigate and compensate the possible impacts of its operations on the people where the railroad passes. To achieve this, it has entered into agreements with the Awá and other indigenous peoples who live in the areas affected by the Carajás Railroad, through the legal responsible body, Funai, partners and directly with indigenous associations.

We maintain a Cooperation Agreement to support the Awá, Guajajara and Urubu Ka'apor peoples, who inhabit the Caru, Awá and Alto Turiaçu Indigenous Lands and support productive activities focused on the ethnic development of these populations.

The indigenous perspective is prioritized throughout the road expansion process of the Railroad and their consent is required.

The works for the expansion of the railroad only began after the conclusion and approval of the Indigenous Component Study - a study conducted with the direct participation of the indigenous peoples - by Funai. In addition, and necessarily with the participation of the Awá-Guajá Indigenous People, the Basic Environmental Plan is being implemented with the relevant mitigation measures, all in accordance with Brazilian law and taking into consideration the viewpoint of the ILO Convention 169.

The dialogue is permanent and other initiatives have been made possible, in addition to the Cooperation Agreement and the environmental licensing process. For example, support for the construction and supply of equipment for three Basic Health Units in partnership with the Maranhão Indigenous Special Health District and the BNDES, which were installed in two Awá villages and one Guajajara village in the Caru Indigenous Land.

Vale believes in supporting the ethnic development of Indigenous Peoples and in respectful, mutually beneficial and long-term relationships.

Onça Puma Nickel Mine, Brazil

Inaugurated in 2011, in the municipality of Ourilândia do Norte - PA, Mineração Onça Puma is today one of the largest iron-nickel plants in the world, with a production capacity of 220,000 tons per year.

Local community groups and Brazilian legal authorities have alleged a negative impact on the health of the communities close to the Onça Puma nickel mine in Pará, Brazil. Members of the Xikrin and Kayapó indigenous communities, who live near the mine, claim that the waste from the plant has polluted the river with heavy metals, which led to fetal deformities and other serious diseases in the region of the Cateté River, a tributary of the Iririri River, in the state of Pará.

In September 2017, the Federal Court ordered the suspension of the mining activities at the Onça Puma mines, until Vale could prove the implementation an economic and environmental management project to compensate the indigenous communities affected by the activity.

Vale has filed an action to request the suspension of the cessation order of the commitment, informing that the mine does not release drainage effluents into the Cateté River.

In June 2019, by a court order, Vale suspended the nickel processing activities at the Onça Puma plant. Vale questioned the decisions to stop the work at Onça Puma, with arguments reinforced by seven expert reports appointed by the Federal Redemption Judge. These reports demonstrated the lack of any relationship between Vale's activities and the supposed contamination of the Cateté River.

In September 2019, the president of the Federal Supreme Court (STF), ordered the resumption of the operations at the Onça Puma nickel plant. In addition, the release of the judicial deposits to the Xikrin do Cateté and Kayapo indigenous peoples was ordered.

State of Espírito Santo, Brazil

Tubarão Port, in the municipality of Vitória, Espírito Santo, is an iron ore port and a coal dock, which imports coal and exports iron ore from the Minas Gerais Iron Quadrangle, as well as steel to ArcelorMittal's operations in Brazil. A police investigation conducted in January 2014 revealed that Vale's operations at the Tubarão Port had resulted in the release of dust in its surrounding bodies of water and air.

The municipal government of Vitória subsequently penalized Vale and ArcelorMittal with US$ 8.35 million each, as well as demanding that both companies repair any damage resulting from the dust release. The companies appealed the fine.

In May 2018, Vale and ArcelorMittal received a study made by the São Paulo State Environmental Company of São Paulo (Cetesb) containing over 190 targets to reduce pollution based on an agreement signed by the companies and the local regulators until 2023.

Vale operates and continually invests in environmental control systems. The entire productive system of the Tubarão Complex - from the arrival of the ore to the shipment - has the latest environmental control technology. By 2020, Vale will have invested approximately R$ 1 billion in environmental control measures in its operations at the Tubarão Complex, adding the amounts invested in recent years.

With regard to health, Vale informs that it monitors the health effects of its employees related to the exposure to the iron ore present in the workplace environment. It emphasizes that there are no records of current employees, or retirees, with health problems, or who have been removed from work, due to exposure to iron ore at the Tubarão Complex.

It is noteworthy that, according to a Social Security report, there have been no records of respiratory diseases related to the exposure to iron ore in Vale employees in Brazil.

Fundão Dam, Mariana, Brazil

The mining tailings dam, called Fundão Dam, owned by Samarco Mineração S.A., ruptured in November 2015 in the sub-district of Bento Rodrigues, 35 km from the center of the Brazilian municipality of Mariana, Minas Gerais.

Vale and BHP Billiton each own 50% of the shares of the mining company Samarco. Vale has always pointed out to Samarco the importance of implementing policies and standards in compliance with its own and has been supporting Samarco in its efforts to address the damage caused by the rupture of the Fundão Dam in the state of Minas Gerais.

From day one of the breach, Vale and its employees have been committed to responding to the emergency, with the remediation of human rights and the environmental recovery.

After the signing of a Conduct Adjustment Transaction Agreement (TTAC) between Samarco, Vale and BHP Billiton, with the federal and state governments of Minas Gerais and Espírito Santo, the Renova Foundation was created. This is an institution responsible for conducting the programs of repair, restoration and socioeconomic and socioenvironmental recovery in the areas impacted by the rupture of the Fundão dam.

Vale has always supported Samarco and the Renova Foundation in all the required areas and has guaranteed the funding and the implementation of over 40 programs that were established in agreement with the federal and state governments, together with the mining company BHP Billiton.

Following the rupture, Vale has internally created a Dam Department to evaluate and improve its dam management processes, with action plans and targets. The company has also reviewed its emergency plans, including the involvement and mobilization of the community in the event of an accident.

All the remediation and recovery actions adopted by Samarco and now by the Renova Foundation are in compliance with Brazilian and international standards and best practices, and also to the National and State Dam Safety Policy.

Pará, Brazil

Belo Monte is a hydroelectric power plant project located on the Xingu River with the objective of expanding the Brazilian generator park. It allows for a large energy production and a favorable condition for integration with the national electric system.

In June 2011, Vale acquired a 9% interest, originally held by Gaia, and became a shareholder of Norte Energia. At that time, the contract for the construction of the plant had already been signed. In March 2015, Vale sold 49% of its interest in the Belo Monte Hydroelectric Power Plant project to CEMIG and, therefore, the indirect interest of Vale in the capital of Norte Energia is 4.59%.

In December 2018, local communities with legal assistance from international civil society organizations, filed proceedings for a motion, presented in 2011, to the Inter-American Commission on Human Rights (IACHR), requesting that the Belo Monte project be officially labeled as a violation of human rights. In November 2018, the IACHR published its preliminary conclusions stating that the dam threatens the unique aquatic ecosystem of Volta Grande do Xingu and harms the local communities that depend on fishing from the Volta Grande do Xingu for their subsistence.

The project has provoked controversial reactions in relation to the social and environmental impacts and the well-being of the region's indigenous communities during the construction and operational stages. Vale believes, however, that Belo Monte is a sustainable project in all its aspects, despite the inherent impact of any hydroelectric project.

Since its entry into the Belo Monte project, Vale has hired professionals with extensive experience in the implementation and operation of hydroelectric projects, especially in studies of environmental and socioeconomic impacts and indigenous issues. This allows us to monitor and verify that these matters are being properly addressed from the planning to the execution of the project, seeking positive results and the improvement of the quality and living conditions of the communities in the region where the project is being built.

Republic of Guinea

Considered to be one of the best unexploited iron ore deposits in the world, Simandou was acquired by Vale in April 2010. At the time, the project was announced as a major impetus for the company's faster growth in iron ore production.

On April 30, 2014, Rio Tinto plc (“Rio Tinto”) filed a lawsuit against Vale, BSGR, and other defendants in the United States District Court for the Southern District of New York. It alleged violations of the U.S. Racketeer Influenced and Corrupt Organizations Act (RICO) in relation to Rio Tinto’s loss of certain Simandou mining rights, as well as the assignment of the Government of Guinea of these rights to BSGR, and also Vale’s subsequent investment in VBG.

In March 2015, Vale transferred the interest of the mining joint venture stake in Guinea back to the partner company BSG Resources Ltd. In addition, Vale stated that it retained the rights to pursue BSG Resources with respect to the loss of investment and that the transfer of interest does not represent any form of settlement with BSG.

In November 2015, the US court rejected the lawsuit. The Court ruled that the case was long overdue, and stated that the complaint was beyond the four-year legal deadline for the U.S. Racketeer Influenced and Corrupt Organizations Act (RICO).

On April 23, 2019, Vale commenced a proceeding against BSG Resources Limited (BSGR) in the United States District Court for the Southern District of New York, to enforce Vale's arbitral award against BSGR, totaling over US$ 1.2 billion (with interest and costs, exceeding US$ 2.0 billion). This decision was issued on April 4, 2019 by an arbitral tribunal under the auspices of the London Court of International Arbitration.

Since then, Vale paid BSGR an initial price of US$ 500 million, and invested over US$ 700 million, principally in Zogota, before the Guinean government withdrew the concessions, based on evidence that BSGR had obtained its rights to Simandou as a result of its bribery of Guinean officials. The Guinean government explicitly concluded that Vale had played no role in any of BSGR's corrupt activities.

Vale has commenced and will be commencing other proceedings in other countries to enforce the arbitral award against BSGR, as well as against persons connected with the ace, who Vale believes to be jointly and severally liable for the award, or have received Vale's payments to BSGR, or have otherwise been responsible for Vale's loss, as found by the arbitral tribunal. Vale is also investigating recent reports that BSGR has entered into an agreement with the Republic of Guinea through which the company would receive, through a company called Niron plc, the rights related to Zogota that, if confirmed, would be assets subject to compliance with the arbitral award against BSGR.

Vale New Caledonia (VNC), New Caledonia

Vale has nickel operations in New Caledonia, known as VNC.

VNC entered into an Agreement for the Sustainable Development in the Great South of New Caledonia on September 27, 2008. It is an agreement between Vale New Caledonia and the indigenous communities affected for a period of 30 years. In 2014, there was a spill of industrial effluent from Vale's operations in New Caledonia, which reached North Bay Creek, in the southern province. The leak was contained within a few hours, neutralizing the effluent and pumping it back to safe storage.

The License to Operate was suspended for 4 weeks by the Regulator. The immediate impact was a temporary acidification of the creek of 4km, leading to the killing of 50kg of fish. There were no significant lasting impacts on the environment or in the local indigenous populations. Following the spill, there were demonstrations by some local community residents that resulted in damage to Vale properties and delays in resuming production. A Sustainability Department was created to better promote social and environmental projects. In addition, monthly reports on VNC's environmental performance are shared with the local communities, for better transperancy.

Vale New Caledonia has implemented a set of action plans to protect the site, covering safety, organization, environment and quality. These plans were jointly established with the authorities of the Southern Province as part of a legal act requiring the implementation of measures to protect the environment and the communities

Sudbury, Canada

The Sudbury Basin in Canada contains one of the most important mining fields in the world, producing hundreds of millions of tons of copper and nickel per year. This location is also the center of Vale’s operations in Ontario.

Two miners died at Vale's Stobie Mine in Sudbury, Ontario, Canada, on June 8, 2011, after an uncontrolled emission of material (muck). Vale was not criminally charged as a result of this incident, but received charges under the Ontario Occupational Health and Safety Act, and pleaded guilty to three counts.

Following Vale's internal investigation into this incident, an action plan, including more than 40 recommendations, was implemented to address the contributing factors and to improve the control measures to protect the health and safety of its employees. These recommendations included actions in the fields of water management, operational controls, hazard identification and risk assessment, among others. These actions and their recommendations are intended to prevent similar issues in Vale operations.

Copper Cliff, Canada

Vale’s mining operations in the Sudbury Basin include mines, a mill, a smelter and a nickel refinery; collectively, these assets constitute one of the largest integrated mining operations in the Americas.

During the planned maintenance period of Vale’s smelter complex at Copper Cliff, in August 2015, as a result of the standard procedure for washing and draining the acid plant, there was a release of nitrogen oxide and nitrogen dioxide (NOx) mist during a standard procedure to wash Vale’s Acid Plant and to drain it. At the time, a yellow plume was visible above the Vale complex, but the levels that were registered during the event were very low and dissipated.

Emergency measures were activated as a precaution and the emergency siren was activated to notify residents from the region. The release was contained and there were no injuries or impacts on production. Since this event, the procedures to clean the acid plant have been adjusted to prevent a similar incident from happening.

Miski Mayo, Peru

Bahía de Sechura, in Peru, located near Mineradora Miski Mayo, a subsidiary of Vale until December 2016, was constantly monitored by OEFA – the Peruvian Environmental Inspection Agency, which proved that the particulate matter from the shipment of phosphate rock present in the truck loading area of the mining company was below the limits allowed by law.

Other competent institutes in the country, such as Instituto Tecnológico de la Producción (ITP) and the Instituto del Mar del Peru (IMARPE), confirmed that the contaminating factors of the Bahia de Sechura were not related to mining activity. Additionally, Vale informed that the phosphate transport process was carried out by conveyor belts in a completely covered structure, which prevented the contact of the product with the air. The abovementioned measure was part of the continuous improvement action plan implemented by Miski Mayo since 2011. The company reinforces its commitment to the preservation of the environment in the regions in which it operates.

In December 2016, Vale entered into an agreement with The Mosaic Company ("Mosaic") to sell: (i) the phosphate assets located in Brazil, except for the assets located in Cubatão, Brazil; (ii) the control in the Campañia Minera Miski Mayo S.A.C., in Peru; (iii) the potassium assets located in Brazil; and (iv) the potassium projects in Canada. In January 2018, Vale and Mosaic concluded the transaction, and Vale received R$ 3,495 billion (US$ 1,080 billion) paid in cash and 34.2 million shares of common stock, corresponding to 8.9% of Mosaic's shares of common stock after the issue of these shares (R$ 2,907 billion (US$ 899 million), based on Mosaic's share quotation on the closing date of the transaction). A loss R$ 184 million was recognized in the income statement of the discontinued operations, at December 31, 2018.

Mozambique

Vale maintains one of the world's largest natural coal reserves in Mozambique. In 2007, Vale signed a concession contract and began construction of the coal mine in Moatize. The production started in 2011.

Operations in Mozambique are concentrated at the Moatize coal mine, as well as in the Moatize expansion projects and in the Nacala Logistics Corridor.

Vale Mozambique, due to its scale and its achievement as an important project for the country's economy, is also committed to contributing to the development of the local communities and the improvement of their social indicators.

The implementation of the Moatize Coal Mine, which began operations in 2011, required a detailed resettlement program of the families living in the industrial and mining areas. Following procedures and guidelines established by the company based on the respect for human rights and appropriate to international standards, this program began in 2006 and featured social dialogue with the government and communities. The transfer stage of the families was concluded in 2010, with the relocation of 1,365 families in two resettlements, Cateme, with rural characteristics, and September 25, with urban characteristics.

Vale Mozambique has been continuously working on improvements in the resettlements and is committed to developing support actions for these families, in conjunction with the government agencies and through dialogue with these communities.