Sustainability Report 2019
About the Report
The Sustainability Report presents Vale’s actions and learnings from the breach of
Dam I of the Córrego do Feijão mine, in Brumadinho (Minas Gerais, Brazil), which took place on
January 25, 2019 resulting in 270 fatalities.
It also describes the managerial changes made to business processes since the event, in addition to
economic, environmental and social performance of the organization.
New Pact with Society – Proximity and Transparency
Vale is writing a new chapter in its history with a focus on transforming its future as a driver of
social and economic development in the regions where it operates. The company is committed to
facilitate this process and generate a positive
and long-lasting legacy. As a strategic support for transformation and evolution, Vale seeks to
ensure effective management of social and environmental risks and impacts, ultimately helping
improve the industry’s safety and management
standards, which are key factors in this journey.
Material Topics
Vale has updated its materiality matrix according to topics from the previous cycle and inputs on
relevant sectoral topics from its stakeholders – executives, employees, and other stakeholder groups
including professional associations
and other associations, communities, customers, suppliers, government, press, regulatory bodies,
unions, universities, and research centers - considering relevant industry topics and
benchmarking analysis.
The material topics were:
Accident Prevention and Emergency Response
Risk Management
Mining Waste Management and Dams
Human Rights
Climate Change
Energy Efficiency
Air Emissions
Social Investment and Regional Development
Biodiversity
Corporate Governance
Ethics and Transparency, Anti-Corruption, and Illegal Practices
Human Capital Management
The first chapter is dedicated to the breach of Dam I at the Córrego do Feijão mine and
its consequences. It describes the impact of this event on the territory and the community, and the
measures taken by Vale with support from the Government
and civil society to help those affected, give them access to their rights, repair the damage
caused, and compensate society for the unrepairable damages.
In other chapters along the report, we will address how the Brumadinho dam breach has
affected our approach to managing other topics, in addition to disclosures according to the GRI
Standards – comprehensive option –, including the Mining
and Metals Sector Supplement, covering the period between January 1 and December 31, 2019.
Chapter 1
Brumadinho: Reparation and Reconstruction Challenge
The Dam I breach at the Córrego do Feijão mine in Brumadinho (Minas Gerais) on January 25, 2019
left a permanent mark on Vale’s history and on its employees and the people and communities
affected. Vale apologizes to society and deeply
regrets the 270 fatalities, including two young pregnant women, and the 11 people who were still
missing by the time this report was completed. The year was marked by mourning and the urge to
establish emergency actions to tackle
the adversities arising from this incident.
Below is a timeline with some of the main actions taken by Vale throughout 2019 to repair the
damage caused on communities and the environment.
Timeline
Vale acknowledges the support, solidarity, and dedication of several volunteers, community
members, employees, and institutions such as the Fire Department, Civil Defense, Civil Police,
the Forensic Medical Institute, and other municipal,
state, and federal government agencies who have worked relentlessly on several fronts to assist
all the people affected, both during the incident and in the period that followed. We take this
opportunity to express our utmost respect and gratitude for everything
they did for those affected and for the community of Brumadinho.
Check out testimonials of some of the people involved.
Videos: NITRO Visual Stories
R$ 3,6 billions paid for individual agreements, labour compensations and emergency aid
UR$2.6 billion invested in de-characterization of dams
R$ 258.7 million in 2019 as financial
contributions to support the cities covered by the agreement with AMIG, where
operations were shutdown, including 10 cities in addition to
Brumadinho (Barão de Cocais, Belo Vale, Congonhas, Itabirito, Mariana, Nova Lima, Ouro
Preto, Rio Acima, São Gonçalo do Rio Abaixo and Sarzedo)
R$ 200 million in financial contributions
to support cities where operations were shutdown
Additionally, R$ 107 million per year transferred to the State
Government as goods and services tax (ICMS, imposto sobre circulação de mercadorias e
serviços) on sales of Vale's ore to steel companies from another
state
R$ 80 million as financial compensation for the city of Brumadinho
R$ 70 million for the acquisition of 77
operational vehicles delivered to the public security agencies of Minas
Gerais: 50 vehicles for the Military Police; 13 vehicles for the
Fire Department (buses, trucks, and vans); two vehicles for Civil Police and 12 vehicles
for Civil Defense (cars, vans, and trucks)
R$ 30 million allocated in Health Care and
Social Assistance for those affected by the dam breach, via an agreement with
the city government of Brumadinho
R$ 20 million donated for the Military Fire
Brigade of Minas Gerais for equipment purchase, structural improvement, and
professional training, in recognition of the prowess and
work carried out by the unit
R$ 14.5 million transferred to the Tourism
Association of Brumadinho
R$ 6.5 million investment in leading-edge equipment donated for
the Forensic Medical Institute (IML) of Belo Horizonte
R$ 5 million for the Civil Defense of
Minas Gerais and R$4 million for the Military Police of Minas Gerais for equipment
purchase, infrastructure improvements, and professional
training
R$ 2.6 million transferred to the city government of Brumadinho
for the purchase of emergency equipment and hiring of healthcare and
psychological and social assistance professionals
It is a long way to go before we can ease the pain of communities, employees, and families
affected.
The dam breach in Brumadinho made Vale redirect its efforts to improve not only the reparation
processes in several locations, but also the company's internal procedures concerning its
relationship with communities, safety of operations,
and risk management.
Reparation
The Reparation page gathers Vale's main reparation and development actions and
projects, which have been divided into social, environmental, and dam safety actions.
Click here to access the page
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Chapter 2
Profile and Governance
Vale is the world's leading producer of iron ore, pellets, and nickel, with operations in 20
countries on five continents. By the end of 2019, Vale had 149,300
employees,
75,6% located in Brazil.
Breakdown of direct employees and third-party employees by country (2019)
Breakdown of direct employees and third-party employees by state (2019)
ESG Portal
Vale is striving to build a relationship of trust and transparency with society. The ESG
Portal - Environmental, Social and Governance - launched in 2019 contains the latest
achievements and results related to environmental, social and governance aspects of the
company. We will use this channel to update all the information required for establishing a
relationship based on transparency and on sustainable commitments. Go to the ESG page to learn
about our activities
Click here
In the course of 2019, we also updated our sustainability goals for the coming years to meet
the Sustainable Development Goals (SDGs) of the UN Agenda 2030. We are currently
pursuing six goals that cover the main aspects
of Vale's governance and social and environmental impact:
The latter goal develops into specific objectives, namely:
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Chapter 3
Commitment to People and Human Rights
One of Vale's main commitments concerns respect and regard for people. The Dam I breach at the
Córrego do Feijão mine in Brumadinho made the Company reevaluate and rethink its risk management
model in place. Vale is fully redesigning
its health and safety strategy to become the world’s safest mining company for its employees,
the communities, and the environment.
Within this new context, the company redirected its 2019 efforts and set new
goals for 2025, as follows:
- ZERO recordable injuries with potential for fatality or lives changed;
- Reduce by 50% the total number of employees exposed to the ten major risk
factors in the work environment;
- Ensure reliability of critical controls related to catastrophic risk scenarios.
In 2019, Vale Foundation reached out to approximately 770,000
people in 68 cities of six Brazilian states through its social projects.
Active engagement with 1575 communities globally, 27 indigenous communities, 42 quilombo
communities and three traditional communities.
Vale’s activities are underpinned by the relationship with the communities in which the company
operates
Its presence across many territories has spurred broad and diversified relations with the
groups
of communities in the areas of direct and indirect influence of its projects.
Such projects are implemented by Vale Foundation through social investments to boost
Education,
Healthcare and Generation of Income, in addition to strengthening local public policies.
They
are managed through partnerships between
the Foundation and its executing partners, such as NGOs specializing in the issues
concerned.
Vale Foundation also manages associated museums and cultural centers.
The Núcleo Terra das Palmeiras project is part of the Rede de Mulheres do Maranhão
initiative, formed by over 100 entrepreneurs, with the support of the Vale
Foundation. Photo: Vale Foundation Archive
These plans drive the collaborative implementation of engagement, communication, relationship and
social investment initiatives aimed at territorial development.
Case
Vale Fund
2020 marks Vale Fund’s 10th anniversary. The initiative is a non-profit organization
controlled by Vale, governed by a Management Council and an Audit Board that monitors and
approves its financial endeavors.
Vale Fund is currently focused on social and environmental impact business initiatives. It
revolves around three main activities – creating and developing effective financial
instruments, accelerating businesses that drive social
and environmental impact, and innovation and strengthening the impact business ecosystem.
The Coaj-Carajás National Forest Extractive Cooperative was selected in 2019
for the PPA – Partners for the Amazon - Acceleration Program and received investments from the
Vale Fund to develop and strengthen its business. Photo: Idesam archives
Acceleration Program
Developed by the Parceiros pela Amazônia platform, the project aims to strengthen business
initiatives that drive sociobiodiversity, in contrast to illegal deforestation and predatory
activities in the areas of sustainable agriculture
and livestock, sustainable forest management and production, and socio-biodiversity products, in
addition to education and wellness combined with environmental conservation. 15 business
ventures were selected for the Acceleration
Program in 2020.
Innovative Solutions
Created and developed by Climate Ventures, Lab Amazônia – Logistical Challenge and Sales of
Sociobiodiversity Products – aims to raise the profile of impact businesses in the Amazon
offering innovative solutions for breaking through
logistical and commercial barriers. The project was launched in 2019 and has mapped out 10
solution prototypes.
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Chapter 4
Commitment to the Planet
Vale strives to avoid and mitigate hazards associated with its operational activities. Within
this context, the company has an environmental management system covering the full cycle, from
mapping of risks to processes for preventing
potential impacts and recovery and compensation for actual impacts.
To fulfill its new pact with society, Vale adopted new, more challenging and ambitious
sustainability goals involving climate change, energy and forests, in line with the UN Agenda
2030.
Photo: João Marcos Rosa, Nitro Agency
Dam De-Characterization
The Dam De-Characterization page displays the status of the proposed schedule and a walk
through the process.
Click here to access the page
Investments reached approximately
US$ 102 million in operational improvements and adoption of new
technologies for controlling and managing atmospheric emissions in 2019.
Case
PowerShift
The initiative seeks to boost technological innovation to reduce GHG – Greenhouse Gas -
emissions in operations, and is held in partnership with suppliers, academia and large
companies. One of the building
blocks of the program is the decarbonization
of several production processes (mining, railroad, metallurgical processing, and navigation)
through electrification, alternative fuels, and alternative processes. Vale has scheduled
several field tests for the coming years
in order to validate technologies under real operating conditions.
Photo: Vale Archive
The flora of Carajás
The Carajás ferruginous yoke was the subject of a study carried out by 145 researchers from
30 institutions in the country and abroad. As a result, the Carajás region now has one of
the best studied floras in the country, which
contributes to its conservation. 1,094 distinct species were identified, contained in 164
families.
One of the aspects that made the work unique was the collection of plant samples to produce
genetic identifiers, known as DNA barcodes. This resulted in the production of a reference
library for the flora, allowing a rapid and
objective identification of species and their evolutionary relationships.
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Chapter 5
Economic Performance
Vale's economic performance was mainly impacted by the provisions and expenses incurred in
connection with the breach of the Brumadinho Dam. The focus was to assist the people and
families affected by the Dam I breach while
providing all the necessary support to local governments and public entities for a speedy
recovery of the affected areas. The Comprehensive
Reparation Program was developed with open dialogue and structured upon Vale’s social,
environmental, and infrastructure pillars, thus ensuring that actions and resources will
effectively compensate individuals and communities,
recover the environment, and foster sustainable development of Brumadinho and its surroundings.
Looking ahead, Vale plans to significantly reduce the use of dams by investing in alternatives to
replace wet processing operations with safer and more sustainable processes.
Dry processing will account for 70% of the iron ore production by 2022. The company will also enhance
development of new technologies, such as New Steel's dry magnetic separation, which is currently
undergoing tests.
In 2019, Vale registered a US$ 1.683 billion loss compared to a net profit of US$ 6.860 billion in
2018. The US$ 8.543 billion decrease, which was partially offset by a reduced loss from foreign
exchange fluctuation in the year (US$ 2.555
billion), is mainly due to:
- Provisions and expenses incurred with the Brumadinho dam breach, including the
de-characterization of dams and reparation agreements (US$ 7.402 billion);
- Impairment registration and onerous contracts without cash effects, mainly related to the
Base Metals and Coal segments (US$ 4.202 billion);
- Provisions for the Renova Foundation and the de-characterization of the Germano dam (US$ 758
million)
2019 was a turning point for Vale. The incident in Brumadinho has accelerated several key
initiatives. We have intensified our ongoing measures to strengthen our relationship with key
stakeholders, including regular meetings with investors
and representative investor organizations around the world to discuss a range of strategic and
governance-related topics as well as ESG issues.
- 380 interactions with ESG stakeholdes
- Engagement with 70% of our free float
- 5 webinars ESG 3 in partnership with UNPRI
(UN Principles for Responsible Investment)
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