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Mauro Neves, Vale delivered the presentation at IMM’s Mozambique Coal Conference 2013. The IMM’s Mozambique Coal conference features a comprehensive program which discusses the latest mining developments, assesses the way forward for the country’s crucial port and rail progress and examines Mozambican Government policies and the investment opportunities. For more information about the event, please visit: http://www.immevents.com/mozambiqueconference
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Mozambique Coal
A Privilege and a Responsibility Mauro Neves
Global Coal Director
The 4th Mozambique Coal & Energy conference
15-16 July Maputo
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“This presentation may include statements that present Vale's expectations about future
events or results. All statements, when based upon expectations about the future and not
on historical facts, involve various risks and uncertainties. Vale cannot guarantee that such
statements will prove correct. These risks and uncertainties include factors related to the
following: (a) the countries where we operate, especially Brazil and Canada; (b) the global
economy; (c) the capital markets; (d) the mining and metals prices and their dependence
on global industrial production, which is cyclical by nature; and (e) global competition in the
markets in which Vale operates. To obtain further information on factors that may lead to
results different from those forecast by Vale, please consult the reports Vale files with the
U.S. Securities and Exchange Commission (SEC), the Brazilian Comissão de Valores
Mobiliários (CVM), the French Autorité des Marchés Financiers (AMF), and The Stock
Exchange of Hong Kong Limited, and in particular the factors discussed under “Forward-
Looking Statements” and “Risk Factors” in Vale’s annual report on Form 20-F.”
Disclaimer
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Our Goal is
Zero Harm
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Our Goal is Zero Harm Life matters most
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Vale in the World
Headquartered in Brazil, Vale is a global diversified mining company, with
offices and world-class assets on all continents.
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Our Coal Business
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China JVs:
Longyu: coal and
related products;
Yankuang:
metallurgical coke
Moatize Coal Project in Mozambique - Phase 1 capacity 11 million tons per year
Coal Operations and advanced
coal projects in Australia - Integra, Carborough Downs, and Isaac
Plains JVs with a nominal capacity to
produce up to 8Mta;
- Belvedere, Eagle Downs, etc.
- Plus 10,000 sq km of coal exploration
assets in Queensland
Our current global footprint
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2013
Moatize
2014 2015 2016 2017
Australia
Operations
and Projects
47%
63% 64%
70%
Current plan aims to achieve over 30 Mtpa of production capacity in the next
5 years, with a diversified platform of growth with projects and operations in 2
continents.
We expect Moatize to become our largest coal operation by 2014
50%
Production – Marketed tons - Mtpa
Production Capacity
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Vale in Mozambique,
the privilege
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Coal-related projects:
Moatize I
Moatize II
Nacala Corridor
Sena Line
Also, a Power Plant is projected to
supply our local operations
Sena Line
Nacala
Beira
Moatize
Nacala Corridor
MAPUTO
Cahora Bassa Dam
HARARE
PRETORIA
Moatize Coal Project
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Industrial Area
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Rehabilitation
of Beira line to
full 6 Mtpa
capacity
Ramping Up of Moatize since its 2004 Inception
Loading
of 1st
capesize
vessel
Actions
to
maximize
the Beira
line
Start-up of railway
at Nacala / Moatize
expansion
production
Commissioning
of # 2 CHPP
Start-up of
Nacala railway
Q1 ‘15 H2 ‘15 Q4 ‘14
Jan ‘13 Oct ‘12 Feb ‘13
MOATIZE I - RAMP-UP AFTER MINING START-UP IN 2008
MOATIZE II - IS IN CONSTRUCTION
Start coal
production
Aug ‘11
Start coal
exports
Sep ‘11
First Train Loaded
August 2011
First Cargo
September 2011
First Capesize
January 2013
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Moatize Products
VITRINITE
Key attributes are:
High hot strength (CSR=69)
High cold strength (M40=84)
High vitrinite (81%) – provides
ability to carry more high inerts
coals in the blend
Genuine high quality hard coking
coal alternative to Australia
Rank/ Volatile Matter and CSR sits
close to optimum coke oven coal
blend targets, providing flexibility
in the number and type of coals
used in the blend
Excellent caking properties (G=92)
providing ability to be used as the
foundation of the coal blend
Delivering to our customers, strong coking properties with high carrying capacity for
low grade coals.
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Hampton
Roads
Vancouver
Praia
Mole
Beira
Constanza
Gangavaram Goa
Beilun
Dalrymple
Bay
Market Regions
Supply Regions
Rotterdam
Kimitsu
Fos-sur-Mer
Well positioned to supply cost competitive premium hard coking coal to global
markets
Metallurgical Coal: market and supply regions
• Over 3.0Mt of shipments to date
• Tested worldwide with over global 30 customers with great success.
• Trialed at ratio’s between 10% and 40% of the coke oven coal blend
Target Market
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Moatize Expansion
Project and
New Investiments in
Africa
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Investment planned for the coming years
Total Investments: 8,2 bi
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Moatize Expansion Project
Additional 11 Mtpa of nominal production capacity, totaling of 22 Mtpa,
including duplication of the coal handling and preparation plant (CHPP) and
expansion of the infrastructure.
Production is estimated to be predominantly HCC .
Mine Operations Capex: US$ 2.0 billion.
Start up: 2H 2015
CHPP Plateau Retaining Wall
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Nacala Project
Capacity: estimated at 18
Mtpa of coal with potential to
expand further
Capex: US$ 4.4 billion
• US$3.4bn railway
• US$1.0bn port terminal
Start up: 2H 2015
Physical Progress: 30% by
Jul 13
Nacala corridor: 912 km long railway and port terminal
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Railway to link Moatize mine to
Nacala, crossing Malawi, comprising
the construction of 230 km of new
railway sections and rehabilitation of
682 km of the existing railway.
75%
25%
Railway Extension
237 km
675 km
Mozambique
Malawi
Railway characteristics
Greenfield
Brownfield
682 km
230 km
237 km
Nacala Railway
Increase the logistics capacity to export
coal from the expanded Moatize mine to
a new port in Nacala.
230 km
682 km
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6 7
8
2
3
5 CLIN
Greenfield Mz
62.5km
CLIN
Greenfield Mz
29.3 km
VLL
Greenfield Mw
138.5 km
CLIN
Porto
CEAR
Brownfield Mw
98.6 km
CDN
Brownfield Mz
504.2 km
Nacala Rail Corridor
CDN
Brownfield Mz
79.1 km
GF Moz 91,8 Km
BF Moz 583 Km
GF Mlw 138,5 Km
BF Mlw 98,6 Km
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Nacala Port
Natural sea bay with deep water channel (berth with > 20m draft)
Installed capacity for 18 Mpta with potential for further expansions
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Environment
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Environmental
High performance environmental
programs such as:
• Air quality control
• Weather condition control
• Control of noise and vibrations
• Quality control of water and
effluents
• Fauna and flora tracking
• Waste control
• Environmental Management
system implemented accorded to
ISO 14001
• Environmental training and
education program implemented.
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Opportunities
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Strategy Recruitment & Selection
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Strategy Recruitment & Selection
Moatize Mine
53% employees from the Mine are from
Mozambican central region (Tete and
Sofala provinces)
Most employees originally from Tete,
35%, are from Moatize district
Also, 520 of Vale and contractor
employees are from Cateme and 25 de
Setembro, ressetled areas
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People Development – Professional Training
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Training of Hydraulics, Diesel Engines and Electric
Grades average
Hydraulics : 94,7%
Electric: 96,5%
Diesel Engines: 97,5%
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Local Suppliers
186
211 249
579
Development of local suppliers
contracts 2009-2012
Today, 839 companies
provide service to Vale, about
200 companies are from Tete
Our selection is based on suppliers that are
technically and commercially competitive
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Social development
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The resettlement process of Moatize’s project was the biggest ever realized by
Vale, moving more than 5,000 people.
Resettlement Program
About the program:
Total number of people: 5,104
Rural and Urban Resettlement (Cateme
and 25 de Setembro)
Average of habitants by family: 4.88
hab/AF
Total number of families: 1,356
Transferences finalized in September
2011, currently in post-resettlement and
social program phase.
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Social Investments - Infrastructure improvements
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Social Investments - Infrastructure improvements
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Lecture about Economic gains of the mining chain Visit of Minarte school
Visit of Somane Machado school
Visit of Cateme Primary School
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Thank you!
Mauro Neves
Vale Moçambique
Maputo, July 2013