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Vale: Production System UpdateAugust, 2010
Victor Padula, mining engineer, M. Sc.Integrated Planning and Product Development.
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Iron ore provinces in Brazil
Corumbá
Carajás
Iron OreQuadrangle
SOUTH AMERICA
Atlantic OceanPacific Ocean
Iron Ore in Brazil (2009):
• World’s second largest iron ore producer;
• 2009 iron ore production: 300 Mt.
Brazil in the World
• World’s fifth largest country.
• Area: 8,514,876 km²
• Coastal line: 7,491 km.
Our current iron ore production structure is based in Brazil, a country where there are three major iron ore provinces: Iron Ore Quadrangle, Carajás and Corumbá.
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Iron ore production systems
Corumbá
Carajás
Ponta da Madeira Port
Tubarão Port
Itaguaí PortandGuaíba Port
NORTHERNSYSTEM
SOUTHERNSYSTEM
SOUTHEASTERNSYSTEM
SOUTH AMERICA
Atlantic OceanPacific Ocean
San Nicolás Port (Argentina)
Para
guay
Riv
er
Vale operates three integrated iron ore systems …
Iron OreQuadrangle
Vale Total Production:
• 2009 iron ore production: 232 Mt;
• Iron ore 2010 production forecast: 302 Mt
• Iron ore 2011 production forecast: 321 Mt
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Northern System (“Carajás System”)
BRAZIL - SOUTH AMERICA
Carajás
Ponta da Madeira Port
EFC
NORTHERNSYSTEM
Atlantic Ocean
NORTHERN SYSTEM:
• 2009 iron ore production: 84.6 Mt;
• Iron ore 2010 production forecast: 98.3 Mt
• Iron ore 2011 production forecast: 109.7 Mt
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Northern System
PORT
MINING
RAILWAY
PDM MARITIME TERMINAL
3 piers / 4 berthsVessels up to 420,000 DWTDraft: up to 23 m
EFC
Extension: 892 km; single trackTrain-type: 330 wagons + 4 locosPayload: 33 kt/train (SF)
MINERAL PROCESSING FACILITIES
Sinter feed, pellet feed ( seaborne market)Lump ore (domestic market)
BENEFICIATION
CARAJAS’ MINES
Production forecast 2010: 98.3 Mt
Carajás is a great example of a fully controlled and integrated iron ore supply chain!
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Iron Ore Mine, Production Site or Mining Rights
EFVM
FCA
MRS
Iron Ore Formation
Italic Font City or Town
CAPS LOCK
KEY
BELOHORIZONTE
ITABIRA
OUROPRETO
BRUMADINHO
ITABIRITO
CONGONHAS
PIEDADECAPELA
HISTORICOPATRIMÔNIO
DA
FAZENDÃOALEGRIA
TIMBOPEBA
ÁGUA LIMPAGONGO SOCO
FÁBRICA
FEIJÃO
CONCEIÇÃO
FÁBRICA NOVA
MINAS DO MEIO
CAUÊ
CAPÃO XAVIER
MAR AZUL
ABÓBORAS
SAPECADOPICOGALINHEIRO
JANGADAAPOLO
TAMANDUÁCAP. DO MATO
VARGEM GRANDE
BRUCUTUN
MinasGerais
ES
RJ
Iron Ore Quadrangle overview(Southern and Southeastern Systems)
This area is responsible for
70% of Brazil’s iron ore production. (*)
Railways
NOVA LIMA
(*) 2009 figures.
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BRAZIL - SOUTH AMERICA
EFVMTubarão Port
Iron OreQuadrangleWestern Complex
SOUTHEASTERNSYSTEM
Southeastern System (“Tubarão System”)
Atlantic Ocean
Note: figures include outsourced iron ore.
Para
guay
Riv
er
San Nicolás Port (Argentina)
Corumbá
SOUTHEASTERN SYSTEM:
• 2009 iron ore production: 90.1 Mt;
• Iron ore 2010 production forecast: 124.0 Mt.
• Iron ore 2011 production forecast: 125.1 Mt.
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EFVM
Iron Ore Formation
Italic Font City or Town
Normal FontIron Ore Mine or Production Site
KEY
Southeastern System
N
TRAIN LOADING FACILITIES
EFVM
TUBARÃO PORT
CAUÊ
ITABIRACONCEIÇÃO
MINAS DO MEIO
ÁGUA LIMPAGONGO SOCO
CATASALTAS
PIEDADECAPELA
HISTORICOPATRIMÔNIO
DA BRUCUTU
FAZENDÃOALEGRIA
TIMBOPEBA
OUROPRETO
FÁBRICA NOVA
APOLO
WESTERN COMPLEX4 Mt/y
CENTRAL MINESCOMPLEX
44 Mt/y
MARIANA COMPLEX36 Mt/y
ITABIRA COMPLEX40 Mt/y
(*) 2010, including outsourced iron ore.
Iron ore production capacity: 124 Mt/y (*).
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BRAZIL - SOUTH AMERICA
Itaguaí PortandGuaíba Port
Iron OreQuadrangle
SOUTHERNSYSTEM
MRS
Southern System (“Guaíba System”)
Atlantic Ocean
SOUTHERN SYSTEM:
• 2009 iron ore production: 56.5 Mt;
• Iron ore 2010 production capacity: 79.4 Mt.
• Iron ore 2011 production forecast: 81.0 Mt
Note: figures include outsourced iron ore.
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EFVM
MRS
Iron Ore Formation
Italic Font City or Town
Normal FontIron Ore Mine or Production Site
KEY
TamanduáCapãoXavier
BELO HORIZONTE
Jangada
Capitão do MatoAbóboras
Feijão
Fábrica
Mar Azul
Mutuca
TFA
TOD
GalinheiroPico
Sapecado
Southern System
N
TRAIN LOADING FACILITIES
MRS LOGISTICS SYSTEM
GUAÍBA PORT
ITAGUAÍ PORT
PARAOPEBACOMPLEX23.1 Mt/y VARGEM GRANDE
COMPLEX23.8 Mt/y
ITABIRITOSCOMPLEX32.5 Mt/y
Iron ore production capacity: 79.4 Mt/y (*).
(*) 2010, including outsourced iron ore.
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Vale’s current iron ore structure in key-figures
3 integrated iron ore production systems;
32 iron ore mines;
316 Mt/y of iron ore final products;
11 pelletizing plants;
approx. 20 final iron ore products and 230 proto-products.
• Integrated management
• Integrated planning
• Integrated operations
• Integrated control
Integration is the key for running an iron ore
business successfully !
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Vale’s current seaborne iron ore portfolio
Flexibility to guarantee iron ore seaborne
market leadership
PDM(Northern System)
TUBARÃOSAN NICOLAS
(Southeastern System)
GUAÍBA(Southern System)
ITAGUAÍ(Southern System)
SINTER FEED
LUMP ORE
PELLETS
PELLET FEED
Seaborne PortsFinal Products
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Master Plan and iron ore production evolution (2000-2014)
* ‘ Forecast
Goal: increasing production capacity by 50%, achieving
450 Mt/y plus in 2014.
Acquisition of 3 majorBrazilian mining companies
BRUCUTU
FABRICA NOVA
Worldturmoil
162 168 174 189212
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297 294
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342
397
455
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50
100
150
200
250
300
350
400
450
500
550
00 01 02 03 04 05 06 07 08 09 '10 '11 '12 '13 '14
Mt
Southeastern Southern Northern Simandou
UNDER REVISION
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Reserves base
2010 updated information:
5 mines
Northern System
7.1 Bi
15 mines2 5.9 Bi
Southeastern System
9 mines 3.4 Bi
Southern System
16.4 BiReserves Vale
Reserves (t)1
Note
(1): figures in billion metric tonnes (Bi t);
(2) Including former MCR (0.3 Bt) and Samarco (2.1 Bt) reserves.
Vale's equity interest in Samarco´s mines is 50%
Vale the largest reserve bases in iron ore industry !
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A robust project pipeline
Disclaimer: Simandou not considered (classified).
Northern System is responsible for most of Vale’s future sinter feed
production increase.
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Summary: a project to meet the foreseeable demand for Northern System’s iron ore. Run-of-mine is a high quality resource that can be dry screened, and the goal is to reach capacity of 250 Mt/y plus in Carajás.
Projects for Northern System: S11D
• Resources: 6.38 billion tonnes (areas C and D only);
• Reserves: 4.23 billion tonnes;
• Production split: 100% sinter feed;
• New berthing facilities at PDM (Pier # 4);
• Start-up 2014
S11D is Vale’s most important iron ore project (90 Mt/y in the first phase, areas C
and D of Carajás’ Southern Range) !
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Projects for the recently acquired Simandou
• Reserves: potentially 8 billion tonnes, being 2 billion tonnes of hematite (Fe > 66%);
• 561 Km railway leading to a new port in Liberia, as well as refurbishment of 660 Km railway in Guinea;
• Start-up: 2012.
Atlantic Ocean
Large scale, West African high grade iron ore deposit,
with a well defined logistic route.
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Carajás and Simandou
Carajás and Simandou are the best platforms for iron ore growth in the world !
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Summary: a Greenfield project comprised of mining, mineral processing plant and an exclusive railway system with train loading facilities, with 24 Mt/y of final products.
Projects for Southeastern System: Apolo
• Reserves: 279 million tonnes.
• Production split: 66 % sinter feed, 34 % pellet feed.
• Start-up: 2014.
A truly Greenfield project right inthe middle of the iron ore quadrangle !
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Summary: a mineral processing plant to produce pellet feed from Vargem Grande’s (VGR) reserves of itabirites (initially Abóboras mine, then Tamanduá and Capitão do Mato mine). Project approved and under construction.
Projects for Southern System: VGR’s ITM-I
• Reserves: 1.3 billion tonnes
(to feed ITM-I and also the existing plant).
• Production split: 100% pellet feed.
• Start-up: 2013
An engineering solution to produce 10 Mt/y of pellet feed
from VGR’s itabirites !
On first plan, Abóboras Mine, Vargem Grande Complex
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Tubarão
San Nicolas
PDM Malaysia
Oman
Distribution Centers (DCs) in Oman and Malaysia
DCs strategically positioned using vessels larger than VLOC (more than 270 kt) resulting
in a competitive edge in logistics !
Guaíba & Itaguaí
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Sustainable growth is the most relevant challenge facing Vale ! Environmental licenses and negotiations with local communities
are indeed challenging!!
Environmental and social responsibility
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Final comments
• A competitive edge Vale operates three integrated iron ore production systems, comprised of mines, pelletizing plants, transportation logistics and port facilities;
• Ready for the future supported by the largest reserve bases in iron ore industry, Vale has a pipeline of projects capable of boosting its production capacity by up to 50% to meet market demand and maintaining competitive operational costs;
• A sustainable product portfolio each one of Vale’s production systems is able to deliver iron ore products and pellets to seaborne market, based on a product portfolio focused on long term sustainability;
• Maximizing Value-In-Use strategic actions in shipping to minimize freight cost differences for Asia market in association with high-quality iron ore product deliveries .
Thank you!
