VIII Analyst & Investor Tour 2008 · Current Mines 145.8 168.1 174.2 189.1 212.0 235.0 265.5 296.0...
Transcript of VIII Analyst & Investor Tour 2008 · Current Mines 145.8 168.1 174.2 189.1 212.0 235.0 265.5 296.0...
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VIII Analyst & InvestorTour 2008
June 19, 2008
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Iron ore operations & projects
Carajás
June 19, 2008
José Carlos SoaresDirector of the Northern System
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Southern System (2008):
Iron ore production: 95 Mt/y
Pelletizing plants: 6.7 Mt/y
Southeastern System (2008):
Iron ore production: 126,3 Mt/y
Pelletizing plants: 29.1 Mt/y
Iron ore production systems 2008
UrucumUrucum
Northern System (2008):
Iron ore production: 103 Mt/y
São Luís pelletizing plant: 7 Mt/y
324 million metric tons of iron ore 43 million metric tons of pellets
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Northern System (2008):
Iron ore production: 103 Mt/y
São Luís Pelletizing plant: 7 Mt/y
Northern System
UrucumUrucum
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Southern Range
Northern Range
Eastern Range
Iron Ore Formation
Key:
Northern System - Carajás overview
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Run of mine %
Carajás iron ore mines
Fe P SiO2 Al2O3 Mn LOI2007 66.00 0.040 1.30 1.25 0.60 1.90
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Production capacity (Mt/y)NN
CAGR 2002/2008 = 9.7%
Northern SystemHistory & IO production evolution
103,0
08F
0,9
13,5
23,5
29,831,8 32,8 32,6 32,8
35,239,3 40,8
43,845,8
44,047,7
52,4 53,9
58,9
69,472,5
81,8
91,7
43,2
0
10
20
30
40
50
60
70
80
90
100
110
67 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07
Mt
Pier 03 Start upCarajás
Discovery
Carajás Start up15 Mtpy
Pier 01 Start up
Pier 02 Start up
PelletizingPlant Start up
25 35 45 52 56 70 85 100
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General information:
Length: 892 km; single track
Crossing yards: 56
Bridges and overpasses: 62
Train type (2007): 3 locomotives
and 210 railcars
Net cargo: 21,600 (sinter)
Railcars total: 8,298
Locomotives fleet: 160
Cycle duration: 78 hours
Northern System EFC - Carajás Railway
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PIER III
Northern System Ponta da Madeira Maritime Terminal
PIER I PIER II
Ships up to 250,000 dwtMaximum draft: 21mLoading rate: 3 X 8,000 t/h
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Current capacity : 7.0Mtpy
São Luís pelletizing plant
Northern System
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10,094
443
2,478
653
2,427
760
0
20
40
60
80
100
120
2008 2009 2010 2011 2012 2013
Northern System
Southern System
Southeastern System
Serra Sul
Additional30Mtpy
Bau
CE ItabiritosAuxiliary Equipment
400400VGR 1/1 VGR 1/2S. Leste
Mtons
US$ 500 M
Iron ore project pipeline
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Production capacity increase to 422Mtpy in 2012 from 146Mtpy in 2000
Master plan: 2000-2012Integrated systems production evolution
0
50
100
150
200
250
300
350
400
450
500
Mt
New Projects 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 5.0 24.2 56.2 73.8 130.8
Current Mines 145.8 168.1 174.2 189.1 212.0 235.0 265.5 296.0 318.9 317.4 315.0 305.7 291.5
2000 2001 2002 2003 2004 2005 2006 2007 2008' 2009' 2010' 2011' 2012'
422.3 379.5 371.2
341.5 323.9
296.0 265.5
235.0 212.0
189.1 174.2 168.1 145.8
SerraSul
* Forecast
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324 Mt of iron ore;43Mt of pellets
23 mines in operation;
railway network of 2,000 km plus;
4 shipping terminals;
9 pelletizing plants.
20082008
422 Mt of Iron ore;65Mt of pellets
26 mines in operation;
railway network of 2,000 km plus;
5 shipping terminals;
12 pelletizing plants;
20122012
also operating abroad.
Summary of Vale’s iron ore
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Vale: world leader in the iron ore market:
#1 in iron ore and pellets;
33% share in seaborne market;
highest quality standards;
huge mineral reserves.
Vale is planning huge investments in iron ore production never seen before in the mining industry, in order to meet the growing demand for raw materials from the steel industry
Environmental protection is a major concern.
Final comments
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• Air and water quality monitoring;
• Support for protection of environmental conservation units;
• Climatology;
• Waste management;
• Environmental education;
• Support to indigenous communities.
Environmental policy
Investments in environmental protection:
2006: US$ 145 Million
2007: US$ 190 Million
Provision of US$ 171 Million for future mining depletion and
construction of tailing dams.
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Additional 30 Mtpy
89%
11%
SF PF
Description:
Construction of a crushing facility and a wet screening facility at Northern Range which would be able to supplement the Northern System production capacity in 30 Mtpy.
Resources:
– Resources: N4WN: 562,7Mt– Drilling Campaign: expected to
finish in Dec/07.
Production Capacity: 30 Mtpyafter 2009
Start up: 2009
Location
Production composition:
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Southern Range project
Description:
– This project aims to attend the Northern System demand after 2012 with an additional production of 90 Mtpy.
Resources:
Production capacity (Mt):
– 2012: 40.0 Mtpy. (ramp-up)
– After 2012: 90 Mtpy
Start up: 2012
Production composition:
SF
PF
68%
32%
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Carajas iron ore deposits
Southern Range project
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Starting production capacity: 40Mt/yOperation start-up: 2012Distance from Northern Range: 80 km
Southern Range project
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The Onça Puma nickel projectCarajás
June 19, 2008
João CoralDirector of Mineração Onça Puma
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SUSTAINABLE DEVELOPMENT
PROJECT IMPLEMENTATION
PRE OPERATIONAL ACTIVITIES
PICTURES
GENERAL INFORMATION
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Location
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2002 2003 20052004 2006 2007 2008Phases
Feasibility study
Basic engineering
Scoping study
2009
Basic eng review
Implementation
Vale acquisition
Approval by Boad of Directors
Start Up Line 1
Start up Line 2
Comissioning
FebMay
Onça Puma history
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Project sumary
Mine life: 36 years
Grade for first 20 years: 2.4% - 1.6% Ni / 1.73 Ni (average)
Process route: RKEF – Rotary Kiln Electric Furnace
Production: Design capacity: 220.000t FeNi @ 25% – 57.000tpy
Estimated CAPEX: US$ 2.297 billion
Proven & probable reserves : 82.7Mt @ 1.73% Ni (saprolitic ore)
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2009 estimated production: 17.5 kt Nickel content
2012 nominal capacity: 57.0 kt Nickel content
Product transportation: Road to Parauapebas – 350 km
Railroad to São Luis – 890 Km
Headcount: 1200 team + 400 from contractors
Cash cost: US$ 3.35 / lb Ni
Operational sumary
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SUSTAINABLE DEVELOPMENT
PROJECT IMPLEMENTATION
PRE OPERATIONAL ACTIVITIES
PICTURES
GENERAL INFORMATION
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1200 employees and 400 contractors
Great Investments in recruitment and labor qualification
– Construction of Training Center at Ourilândia do Norte (PA).
Attraction and Retention Program considered
Operational manpower
2 years: 50% local manpower
Next years: 70% local manpower
Teachers: 100
Students: 500 until 2008
Initial: 120 trainees and 40 operators
Partnership with class entities for education development
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Social relationship
Onça PumaProject
Farmers Associations
Municipalities
Aboriginals(Xikrins e Kaiapós)
Churches
Government Institutions
(INCRA/SEMA/SRFother)
MST and Sem Teto
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Social investments
More than R$ 100 million were committed with social institutions to be applied on social investments for the community until 2009.
EDUCATION• Students House• Upgrade and Construction of Schools• Construction of Training Center
HEALTH & SANITATION• Water & Sewage Treatment in the town• Construction of a new waste disposal
ECONOMIC AND URBAN DEVELOPMENT• Construction of roads and bridges• Upgrade the local airport• Training of local Suppliers
SAFETY & SOCIAL ASSISTANCE• Agreements with the police authorities and local traffic department• Understanding campaigns on traffic laws
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Project environment
CONCEPTS 1 PROGRAMS
• 100% rain water used for operation, to avoid reduce level of Catete River that suppliers Xicrin Indian Reserve.
dam or water reservoir
CONCEPTS 2
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Project environment
•Benchmark developments to dust emissions control system provided to attend Brazilian and International standards:
• Brazilian regulatory limit for dust emission: 100 mg / Nm3
• Industry average: 25 up to 75 mg / Nm3
• Onça Puma project factor used: 50 mg / Nm3
CONCEPTS 1 PROGRAMSCONCEPTS 2
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Project environment
Land rehabilitation
Solid waste control
Water resources
Atmospheric emissions& quality of air
Archeology
Environmental education
Fauna and plant control
CONCEPTS 1 PROGRAMSCONCEPTS 2
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SUSTAINABLE DEVELOPMENT
PROJECT IMPLEMENTATION
PRE OPERATIONAL ACTIVITIES
PICTURES
GENERAL INFORMATION
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Physical progress implementation
66,64%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
ago/0
6se
t/06
out/0
6no
v/06
dez/0
6jan
/07fev
/07mar/
07ab
r/07
mai/07
jun/07
jul/07
ago/0
7se
t/07
out/0
7no
v/07
dez/0
7jan
/08fev
/08mar/
08ab
r/08
mai/08
jun/08
jul/08
ago/0
8se
t/08
out/0
8no
v/08
dez/0
8jan
/09fev
/09mar/
09ab
r/09
mai/09
Mês
% M
ensa
l
0%
13%
25%
38%
50%
63%
75%
88%
100%
% A
cum
ulad
o
%BL. %BL (2007) %BL (2008) %repr. % real %BL acum. %BL acum (2007) %BL acum (2008) %Repr.acum. %Real acum.
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Global suppliers involved
•PROJECT COMPANY: HATCH AND PROGEM
•STACKING AND RECLAIMING: FAM / DEDINI
•DRYERS, KILNS AND ESPs: FLSMITH
•ELECTRIC FURNACE: DEMAG
•REFINERY: INTECO
•SHOTTING: UDDEHOLM
•TRANSFORMERS: AREVA
•ELETRIC AND AUTOMATION: ABB
•TRANSMISSION LINE ALUSA
•MINE FLEET: CAT AND SCANIA
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Health and safety
The Onça Puma Project has been obtaining the excellent results in health and safety among the operational / implementation units of VALE.
The Onça Puma Project reached important challenges as 4.5 million of hours worked without accidents with waste of time.
Main strategies and new actions in implementation for Health andSafety:
Elaboration of Health and Safety diagnosis;
To revalue implementation of contracted administration system improvements;
To revalue accidents / incidents services;
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SUSTAINABLE DEVELOPMENT
PROJECT IMPLEMENTATION
PRE OPERATIONAL ACTIVITIES
PICTURES
GENERAL INFORMATION
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Process flowsheet
REDUCTANT COALPULVERIZED COALORE PROCESSING
METAL PROCESSINGFINES
ELECTRIC FURNACE
REFINING SHOTTING
DRYER
DELIVERY
STACKER
SLAG POTMETAL
STORAGE
ROM
-600mm
PRIMARYCRUSHER
RECLAIMER
BAGHOUSE
ESP
LADDLEFURNACE
TRUCK
KILN & DRYERFINES
ESP
SECONDARYCRUSHER
COAL PREPARATION
CRUSHER
MILL
BAGHOUSE
ROTARY KILN
EXTRUDER
-200mm
-50mm
-50mm
+50mm
-50mm
-12,5mm
+6,35mm-6,35mm
BAGHOUSE
DRY ORESTOCKPILE
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Pre operational activities
Pre-operational group – GPO was implemented to:
– To structure operational units;
– To develop technical and administrative activities;
– To warrant the units start-up, with the minimum
possible level of problems;
– Levering the ramp-up and nickel production curves.
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Main GPO’s proposal
Structure operational units during the project phase
Dimension, mobilize and train all the unit’s employees
Participate of the project and assembling processes in an operational and maintenance perspective
Coordinate commissioning owner’s team process
Implement a quality program in the operational units
Implement the products and consumables logistics facilities
Standardize equipment and processes among projects
Develop integration and synergy among MOP and Vale Inco
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Main GPO’s implementations / benefits
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Operational areas involved
Geology & long term planningMine operationMetallurgy operationProduction planning & quality controlMobile equipment maintenance Plant maintenanceMaintenance engineeringCommissioningProducts and consumables logisticsCommercial
APROACHES USEDGPO Support to
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Personnel comparative productivity
Cast ore per number of employees comparative:
Ore throughput / Total workforce (*1000)
1,58 1,54
1,33
0,70 0,66
0,0
0,2
0,4
0,6
0,8
1,0
1,2
1,4
1,6
1,8
Onça Puma Cerro Matoso Loma de Níquel PT INCO CODEMIN
Data: Brookhunt – jan/2008
BETTER
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VALE infrastructure for businesses directionality;
Process technologies development;
Benchmark support for the specific activities executions, as for
instance: financial operations, supplies, IT, commercial, institutional
relationships, etc;
High technical capacity / management team for the projects
implementation, committed with the company’s development;
Good relationship and interaction with the communities of the project
influence areas;
Development formation programs for local labors;
VALE’s strategy market positioning in the world;
Project strengths
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SUSTAINABLE DEVELOPMENT
PROJECT IMPLEMENTATION
PRE OPERATIONAL ACTIVITIES
PICTURES
GENERAL INFORMATION
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Pictures - historical progress
Jun/2006
Panoramic vision
Aug/2006 Jun/2007 May/2008
Saprolitic nickel ore
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Initial works
Pictures - historical progress
Jun/2006 Aug/2006 Jun/2007 May/2008
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Engineering works execution and virolas transport
Pictures - historical progress
Jun/2006 Aug/2006 Jun/2007 May/2008
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Works in advanced stage
Pictures - historical progress
Jun/2006 Aug/2006 Jun/2007 May/2008
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Copper operations and projects
Carajás
June 19, 2008
Marcio GodoyDirector of Copper Department
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Copper business
Our copper business comprises operations in Brazil and Canada and totals 300 kt of copper per year.
We have an organic growth strategy with projects in Brazil and other countries and a good base of advanced stage projects in Carajás.
Currently we`re producing copper at Sossego, Sudbury and at Voisey´s Bay.
We also have Salobo Project under construction and three projects in advanced stage of development.
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Copper operations management
The Copper Department is aligned with the company’s mission to transform mineral resources into prosperity and sustainable development:
Hiring of local workforceAbout 87% of the workforce hired for Sossego and UHC came from local residents.
Water recycling and tailing reduction programsSossego`s use of net water fell from 18.37% of total water consumption in 2004 to 4.48% in 2007.
Works on reforestation and recovering of degraded areas More than 60.000 trees planted.
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1Q07 1Q08Concentrate Production (dmt) 100.3 101.8
Sossego
Sossego is in the fourth year of operation and is constantly focusing on cost reduction and productivity.
Satellite ore bodies that will expand Sossego`s lifetime (118 Sulphide Project and Visconde Target):.
- 118 Sulphide Project has probable and proved reserves of 12Mt @ 2.4% Cu that will be treated at Sossego`s concentrate plant.
- Visconde, which is located about 15 km from Sossego mine may host more than 100 Mt of copper ore.
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Salobo
Mining and plant equipments already ordered, Salobo`s Phase I (100 ktpy) is scheduled to deliver the first concentrate on 2H10.
The access bridge has been constructed. Vale also concluded the vegetal suppression at the buffer stockpile, temporary stockpileand at the maintenance shop. Earthworks are already contracted, as well as civil construction of buildings, power line and sub-station.
7% of the project is completed, with a total expenditure to date of US$ 100 M.
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Carajás Hydrometallurgical Plant - UHC
UHC will develop an alternative technology to pyrometallurgy.
Hydrometallurgy has some advantages, such as the possibility to treat low grade concentrates and obtain higher recovery grades in the concentrate plant.
Vale`s main objective is to prove the technology on industrial scale and then decide on the feasibility to build a bigger plant (160 kty).
The 10 kty plant will operate for 18 months.
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Papomono - Chile
Main equipments already ordered.On implementation, Papomono is a Sx-Ew operation, an opening door to Vale in Chile and the beginning of geographical diversification of the copper business.
Permitting on going.All the cash flow generated by Papomono`s operation will be reinvested in Chile`s exploration works.
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Other copper projects
Cristalino ProjectStatus: Pre-Feasibility.
Trade off analysis determined the optimum size of 16 Mtpy of
ROM (120 kty of copper in concentrate).
Permitting on going. Clean concentrate.
118 Oxide ProjectWaiting for Implementation license.
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The Paragominas bauxite mine
Carajás
June 19, 2008
Geraldo BrittesDirector of Operations, Paragominas Bauxite Mine
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First bauxite project wholly owned by Vale, located in the municipality of Paragominas, in the state of Pará;
Started its operations in April 2007, to supply Alunorte’s expansion II, with investment of US$ 352 million for 5.4 Mtpy of capacity - US$ 65.2 per ton - one of the lowest capex per ton of the industry for a greenfield project;
First bauxite mine in the world to use slurry pipeline;
The first expansion to 9.9 Mtpy completed along with Alunorte’s expansion III. The investment cost for the mine is US$ 196 million, equivalent to US$ 43.5/ton;
Proven and probable reserves of 299.9 Mt enough to support production for more than 30 years at current capacity (9.9 Mtpy);
Paragominas bauxite mineOverview
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Recovered water
TailingsDam
Concentrate Thickener (Product)
Tailings thickener
Recrusher
SAG mill
Classification
Ball mill
Silo
Pumping Station to Pipeline
Reclaimer
Crusher
Paragominas bauxite mineSimplified process flow
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Paragominas bauxite mineMining
Strip mining method;
Gibsite bauxite type;
Suitable for low pressure and temperature alumina refineries;
Quality: 50% available alumina and 4% reactive silica.
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Paragominas bauxite mineBeneficiation
Beneficiation includes SAG and Ball milling;
Mass recovery of 70%;
Slurry production with 50% of solids;
Electric energy supplied by Tucurui hydropower;
230 KV transmission line built by Vale.
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Paragominas bauxite mineSlurry pipeline
Capacity designed to 14.85 Mtpy of final product;
Pump station with six units with combined capacity of 9.9 Mtpy;
Pipeline 244 Km long and 24” diameter;
From mine to refinery it takes 40 hours trip.
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Paragominas bauxite mineTailing disposal
Use of tailing thickner to recovery water for beneficiation;
Four diques to receive tailings in layers for dry stacking;
High solids content after drying;
High solids capacity to reduce environmental impact;
Total water recovered after drying process.
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Paragominas bauxite mineDewatering
Receiving tanks and filter plant Instead of port facilities;
Hyperbaric disc filters to dewater the slurry;
Solids content increased from 50 to 88% after filtering;
Excess of water treated and used in Alunorte process.
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Paragominas bauxite mineFuture developments
A second expansion to 14.85 Mtpy, when approved, will supply theNew Alumina Refinery without the need for a second pipeline;
Budget for the second expansion is estimated at US$ 416 million;
Strong exploration effort being carried in the region should increase proven and probable reserves overtime;
A second pipeline can be built to support other 14.85 Mtpy at Vera Cruz Sector;
The concept of the project is very competitive considering the high freight cost for bulk carrier in the future;
Paragominas has the potential to become the largest bauxite complex in the world.
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Analyst & Investor Tour 2008
Eduardo Bartolomeo
Executive Director of Logistics
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Logistics overview and strategic drivers
Logistics performance and investmentsIron oreGeneral cargo
Operational excellence drivers
3
OPERATIONAL FIGURES
10,179 kilometers railroad network
1,008 locomotives and 41,761 wagons
6 Ports and Maritime Terminals
3 vessels in operation
6 vessels under construction
THESE ASSETS PROVIDE FOR…
251 million tons of iron ore shipped
through Vale Port Complexes in 2007
28.3 million tons of general cargo shipped through port terminals in 2007
EFC
EFVM
FCA
Port Terminals
Multimodal Terminal
FNS (EFC operation)
FERROBANTrackage right
Vale provides integrated logistics services including railroads and ports terminals
4
We want the reputation of being the safest and most efficient logistic provider
Increase competitiveness in mining operations, mainly iron ore and coal
In general cargo, focus on high margin and volume products, mainly steel industry and
agribusiness
Vale logistics strategy
Investments in safety
Focus on accidents reduction
Preventive actions
Operational efficiency
Investments in infrastructure, automation, technology and training
Vale environmental policy is an action based on ethics and social commitment
Corporate Social Responsibility Productivity Safety
Strategic drivers
5
Logistics overview and strategic drivers
Logistics performance and investmentsIron oreGeneral cargo
Operational excellence drivers
6
Vale has increased its iron ore shipments at 9.7% per year...
Iron ore shipmentsmillion metric tons
1Q03
2Q03
3Q03
4Q03
1Q04
2Q04
3Q04
4Q04
1Q05
2Q05
3Q05
4Q05
1Q06
2Q06
3Q06
4Q06
1Q07
2Q07
3Q07
4Q07
1Q08
39.2 Mt
60.8 Mt
CAGR: 9.7%
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…investing US$ 5.4 billion to expand its railroad and port capacity to meet demand growth…
1,896
1,092
649
981
484
274
2003 2004 2005 2006 2007 2008
Logistics investments 2003 to 2008 – US$ 5.4 Bi
US$ million
(*)
(*) Budget
8
Vitória a Minas Railroad – EFVM
…in the Southern System…
Vitória a Minas Railroad investments
Tubarão Port investments
Implemented:
Increase of 110 locomotives and 5,100 wagons in the last 5 years
Duplication of Railroad between Brucutu and Costa Lacerda
Expansion of railroad yard at Costa Lacerda
In progress:
Expansion of railroad yards at Drummond and Ipatinga
Expansion of railroad yard in Tubarão Complex
28 locomotives and 900 wagons (2008/09)
Implemented:
5th car dumper (start-up: May, 2008)
In progress:
Overall and services of all existing car dumpers
Performance improvement of conveyor belts and replacement of 2 ship loaders
9
5th car dumper (start-up: May, 2008)
In construction – 2007, October
Start-up - 2008, May
10
Carajás Railroad - EFC
North South Railroad - FNS
…as well as in the Northern System
Carajás Railroad investments
Ponta da Madeira Maritime Terminal investments
Implemented:
Increase of 87 locomotives and 5,540 wagons in the last 5 years
Expansion of 51 railroad crossing yards for 330 wagons
In progress (30 millions tons additional):
Expansion of Carajás and São Luis railroads terminals
38 locomotives and 3,128 wagons (2008/09)
Implemented:
Addition of Pier III
Construction of 5th ship loaders at Pier III
Addition of 4th loading tracks
In progress (30 millions tons additional):
Addition of 4th car dumper
Stock yard “I”, stacker/reclaimer and conveyors
11
Ship Loaders and stock yards
Stacker and reclaimer 04 -Ponta da Madeira Terminal
Construction of 5th ship loaders Ponta da Madeira Terminal
12
Expansion of Carajás railroad crossing yards – Location 41
Expansion of Ponta da Madeira railroad terminal
Railroad crossing yards for 330 wagons...
13
... making possible the biggest train in the world
Train specifications
4 locomotives
330 wagons
3.5 Km of length
34,000 tons of iron ore per train
Improvements
In average, 9 trains/day in the railroad (reducing 30% comparing the last model)
Increasing locomotives fuel efficiency
... waiting 5 minutes we can see the end of the train.
Movie
14
Northern System has increased its transportation at 20% per year...
53 5766
7280
87
1024
4
56
7
7
8
45
6
6
6
6
7
6166
76
83
93
101
117
2002 2003 2004 2005 2006 2007 2008 (*)
Iron Ore + Manganese – Foreign Market
Iron Ore – Domestic MarketGeneral cargo
(*) Budget
CAGR: 20%
Northern System Transportationmillion metric tons
15
Carajás Railroad
2 pier
4 ship loaders
2 loading tracks
4 car dumpers
4 stock yards
New railroad branch in Carajás region (183 Km)
Carajás main line duplication (612 Km)
72 locomotives and 5.540 wagons
Carajás Railroad - EFC
North South Railroad - FNS
Expansion of Ponta da Madeira Maritime Terminal
In addition, new logistics projects are being developed in the Northern System to attend growing demand in iron ore
16
Expansion of Ponta da Madeira Maritime Terminal
2 new pier and 4 ship loaders
4 new stock yards
2 new loading tracks
4 new car dumpers
17
To better understand the dimensions…
System Capacity – 2.6 times Carajás original start-up
Concrete Consumption – 1 million m3 (13 times Maracanã Stadium, 4 times
Eurotunel and twice Rio Niterói Bridge)
Earth works – 16 millions m3 in railroad (113 times Berge Stahls)
Ship loaders – The four largest traveling ship loaders in the world
Port – The additional capacity represent the third biggest port in Brazil
18
Majors challenges…
On time on quality
Environmental permits
Equipment lead-time
Human resources (about 15,000 people in the construction)
Low OPEX
Automation
Equipment Standardization
Higher axle load
Low community impact
Partnership with Vale Foundation to implement social programs
19
Logistics overview and strategic drivers
Logistics performance and investmentsIron oreGeneral cargo
Operational excellence drivers
20
General cargo gross revenues increased at 31% per year…
253
411
548
651
745
Gross revenue evolutionUS$ million
1S 03 1S 04 1S 05 1S 06 1S 07
By industry sector(2006 basis)
7.2%6.4%
45.1%
38.3%
3.0%
FuelBuilding materials
Others
Steel
Agriculture
CAGR: 31%
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FCAFerroban – FCA Right of WaySouthern Coastal Railroad (in construction)Multimodal Terminal
…improving Operational & Financial performance of Centro Atlântica Railroad
Centro Atlântica Railroad - FCA
• Railroad sections renewal
• Improvement of locomotive fleet
• Business re-engineering
• Cost reduction program
• EBITDA turnaround
FCA EBITDA turnaroundUS$ million
31.0
72.1
(34.6)
2005
2006 2007
22
Plan to develop new logistics infrastructure in Espírito Santo state
Anchieta
Viana
Litorânea Sul Railroad
New section that will connect Vitória a Minas
railroad to Ubu Port and the south of Espírito
Santo state
Attraction of steel companies and new
general cargo flows
165 km in length
Potential demand can exceed 20 mty
Litorânea Sul Railroad
Ubu Port
New terminal feasibility study
23
The Norte Sul railroad will provide a new general cargo corridor
Estrada de Ferro Carajás - EFCFerrovia Norte Sul - FNSFerrovia Norte Sul – FNS (em construção)Ferrovia Norte Sul – FNS (planejada)
On October 3rd Vale was awarded the concession to
operate the 720 Km of FNS
Focus on general cargo exports (mainly soybean, rice
and corn)
Vale’s commitment to socio-economic development in
Brazil
361 km to be built
Norte Sul Railroad - FNS
24
Logistics overview and strategic drivers
Logistics performance and investmentsIron oreGeneral cargo
Operational excellence drivers
25
“Green Railroad” commitment…
Approximately 1 million steel sleepers will be installed at EFC and EFVM railroads
Environmental impact will be reduced by substituting wooden sleepers with steel sleepers that have double the lifecycle of wood
Railway sleepers replacementAbout 400,000 steel sleepers will be replaced per year in both railroads
Vale’s railroads are prepared to use Biodiesel (B20)
Natural gas has been developed
Efficient energy usage
26
…to be the safest logistic provider…
Initiatives to improve safety
Development of Operational Policy focused on Safety
Training centers for train drivers with simulators
Automation and process control
ACCIDENTS PER MILLION TRAINS KILOMETERS
5
20 187
566
139
45
111015
2524
26
43
67
7883
2001 2002 2003 2004 2005 2006 2007
EFC
EFVM
FCA
27
…in order to achieve operational excellence
Initiatives to achieve excellence
Longer trains
Efficient locomotives
Installation of on board computers
Higher axle loads
Improved operational model
Locomotives Fuel Efficiency (Liters / GTM x 1000 )
Carajás Railroad trains/day(Number of trains per day)
AAR* 20065.6
* AAR –Association of American Railroads
6.9
12.0
1Q03
2Q03
3Q03
4Q03
1Q04
2Q04
3Q04
4Q04
1Q05
2Q05
3Q05
4Q05
1Q06
2Q06
3Q06
4Q06
1Q07
2Q07
3Q07
4Q07
2.15
2.19
2.27
2.32
2.38
2003 2004 2005 2006 2007
28
Only possible because we are continuously investing in our employees
Investments in technical know-how and
critical competencies development, enabling
logistics staff to face new challenges.
Promotion of professional qualification for
more than 4,300 potential employees in the
last three years.
Only in 2008, Valer (Vale Education) provided
more than 70.000 hours of continuos
education to the Logistics workforce.
Launching of innovative post graduation
programs and technical courses customized in
order to meet Vale’s needs such as Railroad
Specialization and Port Technical Course.
2008 training numbers
Development Programs:
- Professional Qualification Program 688 participants
- Professional Specialization Program 143 participants
Continuos Education:
-Technical Tracks and Leadership Development 6,170 participations