(Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.)
(Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(1))
(Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(7))
(Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing information to the Commission pursuant to Rule 12g3-2(b) under the Securities
Exchange Act of 1934.)
(If “Yes” is marked, indicate below the file number assigned
to the registrant in connection with Rule 12g3-2(b). 82- .)
We have reviewed the accompanying consolidated statement of financial
position of Vale S.A. and its subsidiaries (the “Company”) as of September 30, 2021, and the related consolidated income
statement, consolidated statement of comprehensive income and the consolidated statement of cash flows for the three and nine-month periods
ended September 30, 2021 and September 30, 2020, and the consolidated statement of changes in equity for the nine-month periods
ended September 30, 2021 and September 30, 2020, including the related notes (collectively referred to as the “interim
financial statements”). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying
interim financial statements for them to be in conformity with International Financial Reporting Standards (IFRS) as issued by the International
Accounting Standards Board (IASB).
We have previously audited, in accordance with the standards of the
Public Company Accounting Oversight Board (United States), the consolidated statement of financial position of the Company as of December 31,
2020, and the related consolidated income statement and consolidated statements of comprehensive income, changes in equity and of cash
flows for the year then ended (not presented herein), and in our report dated February 25, 2021, which included a paragraph describing
a change in the manner of accounting for leases on January 1, 2019, we expressed an unqualified opinion on those consolidated financial
statements. In our opinion, the information set forth in the accompanying consolidated statement of financial position as of December 31,
2020, is fairly stated, in all material respects, in relation to the consolidated statement of financial position from which it has been
derived.
These interim financial statements are the responsibility of the Company’s
management. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and
are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB. We conducted our review in accordance with the standards of the PCAOB.
A review of interim financial statements consists principally of applying analytical procedures and making inquiries of persons responsible
for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the
PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do
not express such an opinion.
The accompanying notes are an integral part of
these interim financial statements.
Items above are stated net of tax and the related
taxes are disclosed in note 7.
The accompanying notes are an integral part of
these interim financial statements.
(ii) In addition, the Company has incurred
in expenses in the amount of US$161 and US$461 for the three and nine-month periods ended September 30, 2021, respectively (US$114
and US$382 for the three and nine-month periods ended September 30, 2020).
The accompanying notes are an integral part of
these interim financial statements.
The accompanying notes are an integral part of
these interim financial statements.
The accompanying notes are an integral part of
these interim financial statements.
Vale S.A. and its subsidiaries (“Vale”
or the “Company”) are iron ore and iron ore pellets producers, which are key raw materials for steelmaking, and nickel producers,
which is used to produce stainless steel and metal alloys employed in the production process of several products. The Company also produces
copper, coking and thermal coal, manganese ore, platinum group metals, gold, silver and cobalt. The information by segment is presented
in note 4.
Vale S.A. (the “Parent Company”)
is a public company headquartered in the city of Rio de Janeiro, Brazil with securities traded on the stock exchanges of São Paulo
– B3 S.A. (VALE3), New York - NYSE (VALE) and Madrid – LATIBEX (XVALO).
The consolidated interim financial statements
of the Company (“interim financial statements”) have been prepared and are being presented in accordance with IAS 34 Interim
Financial Reporting of the International Financial Reporting Standards (“IFRS”) as issued by the International Accounting
Standards Board (“IASB”).
The interim financial statements of the Company
are measured using the currency of the primary economic environment in which the entity operates (“functional currency”),
which in the case of the Parent Company is the Brazilian real (“R$”). For presentation purposes, these interim financial
statements are presented in United States dollar (“US$”) as the Company believes this is how international investors analyze
the interim financial statements.
The exchange rates used by the Company to translate
its foreign operations are as follows:
These interim financial statements were authorized
for issue by the Executive Committee on October 28, 2021.
The financial position, cash flows and performance
of the Company were particularly affected by the following events and transactions during the three-month period ended September 30,
2021:
The Company operates the following reportable
segments: Ferrous Minerals, Base Metals and Coal. The segments are aligned with products and reflect the structure used by Management
to evaluate Company’s performance. The responsible bodies for making operational decisions, allocating resources and evaluating
performance ("chief operating decision maker" under IFRS 8 - Operating Segments) are the Executive Boards and the Board of
Directors. Accordingly, the performance of the operating segments is assessed based on a measure of adjusted EBITDA.
The Company allocates to “Others”
the revenues and cost of other products, services, research and development, investments in joint ventures and associates of other business
and unallocated corporate expenses. Additionally, the costs related to the Brumadinho event are not directly linked to the Company's
operating activities and, therefore, are allocated to "Other" as well.
The definition of Adjusted EBITDA for the Company
is the operating income or loss plus dividends received and interest from associates and joint ventures, and excluding the amounts charged
as (i) depreciation, depletion and amortization and (ii) impairment and disposal of non-current assets.
(i) Includes the reclassification of the negative EBITDA of VNC
in the amount of US$22.
Selected Notes to the Interim Financial Statements
Expressed in millions of United States dollar, unless otherwise stated
|
|
|
|
Nine-month period ended September 30, 2021
|
|
|
|
Net operating
revenue
|
|
|
Cost of goods
sold and
services
rendered
|
|
|
Sales,
administrative
and other
operating
expenses
|
|
|
Research and
evaluation
|
|
|
Pre operating
and operational
stoppage
|
|
|
Dividends
received and
interest from
associates and
joint ventures
|
|
|
Adjusted
EBITDA
|
|
Ferrous minerals
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Iron ore
|
|
|
29,884
|
|
|
|
(7,967
|
)
|
|
|
(115
|
)
|
|
|
(129
|
)
|
|
|
(227
|
)
|
|
|
-
|
|
|
|
21,446
|
|
Iron ore pellets
|
|
|
5,164
|
|
|
|
(1,515
|
)
|
|
|
29
|
|
|
|
(2
|
)
|
|
|
(36
|
)
|
|
|
22
|
|
|
|
3,662
|
|
Ferroalloys and manganese
|
|
|
143
|
|
|
|
(95
|
)
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
(12
|
)
|
|
|
-
|
|
|
|
34
|
|
Other ferrous products and services
|
|
|
289
|
|
|
|
(213
|
)
|
|
|
3
|
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
78
|
|
|
|
|
35,480
|
|
|
|
(9,790
|
)
|
|
|
(84
|
)
|
|
|
(133
|
)
|
|
|
(275
|
)
|
|
|
22
|
|
|
|
25,220
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base metals
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nickel and other products
|
|
|
3,822
|
|
|
|
(2,512
|
)
|
|
|
22
|
|
|
|
(49
|
)
|
|
|
(112
|
)
|
|
|
-
|
|
|
|
1,171
|
|
Copper
|
|
|
1,920
|
|
|
|
(637
|
)
|
|
|
(7
|
)
|
|
|
(62
|
)
|
|
|
(3
|
)
|
|
|
-
|
|
|
|
1,211
|
|
|
|
|
5,742
|
|
|
|
(3,149
|
)
|
|
|
15
|
|
|
|
(111
|
)
|
|
|
(115
|
)
|
|
|
-
|
|
|
|
2,382
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Coal
|
|
|
605
|
|
|
|
(966
|
)
|
|
|
(3
|
)
|
|
|
(5
|
)
|
|
|
-
|
|
|
|
78
|
|
|
|
(291
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Others (i)
|
|
|
175
|
|
|
|
(222
|
)
|
|
|
(345
|
)
|
|
|
(128
|
)
|
|
|
(2
|
)
|
|
|
26
|
|
|
|
(496
|
)
|
|
|
|
42,002
|
|
|
|
(14,127
|
)
|
|
|
(417
|
)
|
|
|
(377
|
)
|
|
|
(392
|
)
|
|
|
126
|
|
|
|
26,815
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brumadinho event
|
|
|
-
|
|
|
|
-
|
|
|
|
(461
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(461
|
)
|
COVID-19
|
|
|
-
|
|
|
|
-
|
|
|
|
(28
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(28
|
)
|
Total
|
|
|
42,002
|
|
|
|
(14,127
|
)
|
|
|
(906
|
)
|
|
|
(377
|
)
|
|
|
(392
|
)
|
|
|
126
|
|
|
|
26,326
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(i) Includes the negative EBITDA of VNC in the amount of US$65.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine-month period ended September 30, 2020
|
|
|
|
Net operating
revenue
|
|
|
Cost of goods
sold and services
rendered
|
|
|
Sales,
administrative
and other
operating
expenses
|
|
|
Research and
evaluation
|
|
|
Pre operating
and operational
stoppage
|
|
|
Dividends
received and
interest from
associates and
joint ventures
|
|
|
Adjusted
EBITDA
|
|
Ferrous minerals
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Iron ore
|
|
|
16,520
|
|
|
|
(5,486
|
)
|
|
|
(135
|
)
|
|
|
(79
|
)
|
|
|
(412
|
)
|
|
|
-
|
|
|
|
10,408
|
|
Iron ore pellets
|
|
|
2,947
|
|
|
|
(1,220
|
)
|
|
|
14
|
|
|
|
(3
|
)
|
|
|
(59
|
)
|
|
|
53
|
|
|
|
1,732
|
|
Ferroalloys and manganese
|
|
|
165
|
|
|
|
(135
|
)
|
|
|
(4
|
)
|
|
|
(1
|
)
|
|
|
(19
|
)
|
|
|
-
|
|
|
|
6
|
|
Other ferrous products and services
|
|
|
243
|
|
|
|
(187
|
)
|
|
|
2
|
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
2
|
|
|
|
59
|
|
|
|
|
19,875
|
|
|
|
(7,028
|
)
|
|
|
(123
|
)
|
|
|
(84
|
)
|
|
|
(490
|
)
|
|
|
55
|
|
|
|
12,205
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base metals
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nickel and other products
|
|
|
3,066
|
|
|
|
(1,850
|
)
|
|
|
(58
|
)
|
|
|
(30
|
)
|
|
|
(29
|
)
|
|
|
-
|
|
|
|
1,099
|
|
Copper
|
|
|
1,493
|
|
|
|
(582
|
)
|
|
|
(4
|
)
|
|
|
(47
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
860
|
|
|
|
|
4,559
|
|
|
|
(2,432
|
)
|
|
|
(62
|
)
|
|
|
(77
|
)
|
|
|
(29
|
)
|
|
|
-
|
|
|
|
1,959
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Coal
|
|
|
345
|
|
|
|
(1,056
|
)
|
|
|
-
|
|
|
|
(24
|
)
|
|
|
-
|
|
|
|
95
|
|
|
|
(640
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Others (i)
|
|
|
470
|
|
|
|
(601
|
)
|
|
|
(453
|
)
|
|
|
(105
|
)
|
|
|
(8
|
)
|
|
|
24
|
|
|
|
(673
|
)
|
|
|
|
25,249
|
|
|
|
(11,117
|
)
|
|
|
(638
|
)
|
|
|
(290
|
)
|
|
|
(527
|
)
|
|
|
174
|
|
|
|
12,851
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brumadinho event
|
|
|
-
|
|
|
|
-
|
|
|
|
(403
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(403
|
)
|
COVID-19
|
|
|
-
|
|
|
|
-
|
|
|
|
(100
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(100
|
)
|
Total
|
|
|
25,249
|
|
|
|
(11,117
|
)
|
|
|
(1,141
|
)
|
|
|
(290
|
)
|
|
|
(527
|
)
|
|
|
174
|
|
|
|
12,348
|
|
(i) Includes the reclassification of the negative EBITDA of VNC
in the amount of US$116.
Selected Notes to the Interim Financial Statements
Expressed in millions of United States dollar, unless otherwise stated
|
|
Adjusted EBITDA is reconciled to net income as
follows:
|
|
Three-month period ended September 30,
|
|
|
Nine-month period ended September 30,
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Net income attributable to Vale's stockholders
|
|
|
3,886
|
|
|
|
2,908
|
|
|
|
17,018
|
|
|
|
4,142
|
|
Net income (loss) attributable to non-controlling interests
|
|
|
72
|
|
|
|
(101
|
)
|
|
|
(46
|
)
|
|
|
(255
|
)
|
Net income
|
|
|
3,958
|
|
|
|
2,807
|
|
|
|
16,972
|
|
|
|
3,887
|
|
Depreciation, depletion and amortization
|
|
|
700
|
|
|
|
774
|
|
|
|
2,280
|
|
|
|
2,396
|
|
Income taxes
|
|
|
(360
|
)
|
|
|
794
|
|
|
|
3,523
|
|
|
|
290
|
|
Financial results
|
|
|
373
|
|
|
|
1,360
|
|
|
|
100
|
|
|
|
4,130
|
|
EBITDA
|
|
|
4,671
|
|
|
|
5,735
|
|
|
|
22,875
|
|
|
|
10,703
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Items to reconciled adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity results and other results in associates and joint ventures
|
|
|
(128
|
)
|
|
|
40
|
|
|
|
342
|
|
|
|
741
|
|
Dividends received and interest from associates and joint ventures (i)
|
|
|
5
|
|
|
|
22
|
|
|
|
126
|
|
|
|
174
|
|
Impairment and disposal of non-current assets
|
|
|
2,390
|
|
|
|
298
|
|
|
|
2,983
|
|
|
|
730
|
|
Adjusted EBITDA
|
|
|
6,938
|
|
|
|
6,095
|
|
|
|
26,326
|
|
|
|
12,348
|
|
(i) Includes the remuneration of the financial instrument of
the Coal segment.
|
|
September 30, 2021
|
|
|
December 31, 2020
|
|
|
|
Product inventory
|
|
|
Investments in
associates and
joint ventures
|
|
|
Property, plant
and equipment
and intangibles (i)
|
|
|
Product inventory
|
|
|
Investments in
associates and
joint ventures
|
|
|
Property, plant
and equipment
and intangibles (i)
|
|
Ferrous minerals
|
|
|
2,811
|
|
|
|
1,206
|
|
|
|
28,684
|
|
|
|
2,017
|
|
|
|
1,154
|
|
|
|
29,436
|
|
Base metals
|
|
|
1,288
|
|
|
|
17
|
|
|
|
19,696
|
|
|
|
1,231
|
|
|
|
18
|
|
|
|
19,549
|
|
Coal (note 12)
|
|
|
85
|
|
|
|
-
|
|
|
|
-
|
|
|
|
25
|
|
|
|
-
|
|
|
|
-
|
|
Others
|
|
|
-
|
|
|
|
876
|
|
|
|
1,620
|
|
|
|
-
|
|
|
|
859
|
|
|
|
1,459
|
|
Total
|
|
|
4,184
|
|
|
|
2,099
|
|
|
|
50,000
|
|
|
|
3,273
|
|
|
|
2,031
|
|
|
|
50,444
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-month period ended September 30,
|
|
|
|
2021
|
|
|
2020
|
|
|
|
Capital expenditures (ii)
|
|
|
|
|
|
Capital expenditures (ii)
|
|
|
|
|
|
|
Sustaining
capital
|
|
|
Project
execution
|
|
|
Depreciation,
depletion and
amortization
|
|
|
Sustaining
capital
|
|
|
Project
execution
|
|
|
Depreciation,
depletion and
amortization
|
|
Ferrous minerals
|
|
|
588
|
|
|
|
136
|
|
|
|
412
|
|
|
|
402
|
|
|
|
37
|
|
|
|
403
|
|
Base metals
|
|
|
325
|
|
|
|
113
|
|
|
|
227
|
|
|
|
308
|
|
|
|
70
|
|
|
|
349
|
|
Coal (note 12)
|
|
|
49
|
|
|
|
-
|
|
|
|
51
|
|
|
|
27
|
|
|
|
-
|
|
|
|
-
|
|
Others (iii)
|
|
|
1
|
|
|
|
36
|
|
|
|
10
|
|
|
|
27
|
|
|
|
1
|
|
|
|
22
|
|
Total
|
|
|
963
|
|
|
|
285
|
|
|
|
700
|
|
|
|
764
|
|
|
|
108
|
|
|
|
774
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine-month period ended September 30,
|
|
|
|
2021
|
|
|
2020
|
|
|
|
Capital expenditures (ii)
|
|
|
|
|
|
Capital expenditures (ii)
|
|
|
|
|
|
|
Sustaining
capital
|
|
|
Project
execution
|
|
|
Depreciation,
depletion and
amortization
|
|
|
Sustaining
capital
|
|
|
Project
execution
|
|
|
Depreciation,
depletion and
amortization
|
|
Ferrous minerals
|
|
|
1,649
|
|
|
|
331
|
|
|
|
1,264
|
|
|
|
1,420
|
|
|
|
187
|
|
|
|
1,303
|
|
Base metals
|
|
|
973
|
|
|
|
250
|
|
|
|
911
|
|
|
|
903
|
|
|
|
185
|
|
|
|
1,000
|
|
Coal (note 12)
|
|
|
114
|
|
|
|
-
|
|
|
|
68
|
|
|
|
138
|
|
|
|
-
|
|
|
|
19
|
|
Others (iii)
|
|
|
13
|
|
|
|
66
|
|
|
|
37
|
|
|
|
125
|
|
|
|
5
|
|
|
|
74
|
|
Total
|
|
|
2,749
|
|
|
|
647
|
|
|
|
2,280
|
|
|
|
2,586
|
|
|
|
377
|
|
|
|
2,396
|
|
(i) Goodwill is allocated to ferrous minerals
and base metals segments in the amount of US$1,311 and US$1,936 in September 30, 2021 and US$1,373 and US$1,926 in December 31,
2020, respectively.
(ii) Cash outflows.
(iii) Includes the reclassification of VNC
under the captions “Sustaining capital” and “depreciation, depletion and amortization”, in the amount of US$27
and US$9, respectively, for the three-month period ended on September 30, 2020 and in the amount of US$122 and US$35, respectively,
for the nine-month period ended on September 30, 2020.
Selected
Notes to the Interim Financial Statements
Expressed in millions of United States dollar, unless otherwise stated
|
|
c) Net
operating revenue by geographic area
|
|
Three-month period ended September 30, 2021
|
|
|
|
Ferrous
minerals
|
|
|
Base metals
|
|
|
Coal
|
|
|
Others
|
|
|
Total
|
|
Americas, except USA and Brazil
|
|
|
228
|
|
|
|
80
|
|
|
|
-
|
|
|
|
-
|
|
|
|
308
|
|
United States of America
|
|
|
71
|
|
|
|
274
|
|
|
|
-
|
|
|
|
-
|
|
|
|
345
|
|
Germany
|
|
|
176
|
|
|
|
174
|
|
|
|
-
|
|
|
|
-
|
|
|
|
350
|
|
Europe, except Germany
|
|
|
546
|
|
|
|
430
|
|
|
|
22
|
|
|
|
-
|
|
|
|
998
|
|
Middle East, Africa and Oceania
|
|
|
553
|
|
|
|
5
|
|
|
|
37
|
|
|
|
-
|
|
|
|
595
|
|
Japan
|
|
|
1,293
|
|
|
|
143
|
|
|
|
15
|
|
|
|
-
|
|
|
|
1,451
|
|
China
|
|
|
5,361
|
|
|
|
241
|
|
|
|
71
|
|
|
|
-
|
|
|
|
5,673
|
|
Asia, except Japan and China
|
|
|
953
|
|
|
|
220
|
|
|
|
209
|
|
|
|
-
|
|
|
|
1,382
|
|
Brazil
|
|
|
1,497
|
|
|
|
7
|
|
|
|
(2
|
)
|
|
|
78
|
|
|
|
1,580
|
|
Net operating revenue
|
|
|
10,678
|
|
|
|
1,574
|
|
|
|
352
|
|
|
|
78
|
|
|
|
12,682
|
|
|
|
Three-month period ended September 30, 2020
|
|
|
|
Ferrous
minerals
|
|
|
Base metals
|
|
|
Coal
|
|
|
Others (i)
|
|
|
Total
|
|
Americas, except USA and Brazil
|
|
|
113
|
|
|
|
37
|
|
|
|
-
|
|
|
|
98
|
|
|
|
248
|
|
United States of America
|
|
|
102
|
|
|
|
176
|
|
|
|
-
|
|
|
|
-
|
|
|
|
278
|
|
Germany
|
|
|
43
|
|
|
|
300
|
|
|
|
-
|
|
|
|
-
|
|
|
|
343
|
|
Europe, except Germany
|
|
|
272
|
|
|
|
676
|
|
|
|
11
|
|
|
|
-
|
|
|
|
959
|
|
Middle East, Africa and Oceania
|
|
|
401
|
|
|
|
3
|
|
|
|
13
|
|
|
|
-
|
|
|
|
417
|
|
Japan
|
|
|
465
|
|
|
|
93
|
|
|
|
-
|
|
|
|
-
|
|
|
|
558
|
|
China
|
|
|
6,136
|
|
|
|
280
|
|
|
|
-
|
|
|
|
-
|
|
|
|
6,416
|
|
Asia, except Japan and China
|
|
|
544
|
|
|
|
210
|
|
|
|
72
|
|
|
|
-
|
|
|
|
826
|
|
Brazil
|
|
|
608
|
|
|
|
31
|
|
|
|
7
|
|
|
|
71
|
|
|
|
717
|
|
Net operating revenue
|
|
|
8,684
|
|
|
|
1,806
|
|
|
|
103
|
|
|
|
169
|
|
|
|
10,762
|
|
(i) Includes
the reclassification of VNC in the amount of US$98.
|
|
Nine-month period ended September 30, 2021
|
|
|
|
Ferrous
minerals
|
|
|
Base metals
|
|
|
Coal
|
|
|
Others (i)
|
|
|
Total
|
|
Americas, except USA and Brazil
|
|
|
695
|
|
|
|
304
|
|
|
|
-
|
|
|
|
4
|
|
|
|
1,003
|
|
United States of America
|
|
|
330
|
|
|
|
847
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,177
|
|
Germany
|
|
|
499
|
|
|
|
1,103
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,602
|
|
Europe, except Germany
|
|
|
2,125
|
|
|
|
1,717
|
|
|
|
45
|
|
|
|
-
|
|
|
|
3,887
|
|
Middle East, Africa and Oceania
|
|
|
1,496
|
|
|
|
12
|
|
|
|
76
|
|
|
|
-
|
|
|
|
1,584
|
|
Japan
|
|
|
2,763
|
|
|
|
358
|
|
|
|
35
|
|
|
|
-
|
|
|
|
3,156
|
|
China
|
|
|
20,819
|
|
|
|
665
|
|
|
|
131
|
|
|
|
-
|
|
|
|
21,615
|
|
Asia, except Japan and China
|
|
|
2,722
|
|
|
|
693
|
|
|
|
318
|
|
|
|
-
|
|
|
|
3,733
|
|
Brazil
|
|
|
4,031
|
|
|
|
43
|
|
|
|
-
|
|
|
|
171
|
|
|
|
4,245
|
|
Net operating revenue
|
|
|
35,480
|
|
|
|
5,742
|
|
|
|
605
|
|
|
|
175
|
|
|
|
42,002
|
|
(i) Includes
the revenue of VNC in the amount of US$4.
|
|
Nine-month period ended September 30, 2020
|
|
|
|
Ferrous
minerals
|
|
|
Base metals
|
|
|
Coal
|
|
|
Others (i)
|
|
|
Total
|
|
Americas, except USA and Brazil
|
|
|
227
|
|
|
|
136
|
|
|
|
-
|
|
|
|
243
|
|
|
|
606
|
|
United States of America
|
|
|
175
|
|
|
|
569
|
|
|
|
-
|
|
|
|
-
|
|
|
|
744
|
|
Germany
|
|
|
292
|
|
|
|
778
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,070
|
|
Europe, except Germany
|
|
|
781
|
|
|
|
1,481
|
|
|
|
92
|
|
|
|
-
|
|
|
|
2,354
|
|
Middle East, Africa and Oceania
|
|
|
923
|
|
|
|
16
|
|
|
|
62
|
|
|
|
-
|
|
|
|
1,001
|
|
Japan
|
|
|
1,130
|
|
|
|
295
|
|
|
|
13
|
|
|
|
-
|
|
|
|
1,438
|
|
China
|
|
|
13,354
|
|
|
|
562
|
|
|
|
16
|
|
|
|
-
|
|
|
|
13,932
|
|
Asia, except Japan and China
|
|
|
1,372
|
|
|
|
611
|
|
|
|
151
|
|
|
|
-
|
|
|
|
2,134
|
|
Brazil
|
|
|
1,621
|
|
|
|
111
|
|
|
|
11
|
|
|
|
227
|
|
|
|
1,970
|
|
Net operating revenue
|
|
|
19,875
|
|
|
|
4,559
|
|
|
|
345
|
|
|
|
470
|
|
|
|
25,249
|
|
(i) Includes
the reclassification of VNC in the amount of US$243.
Provisionally
priced commodities sales – The commodity price risk arises from volatility of iron ore, nickel,
copper and coal prices. The Company is mostly exposed to the fluctuations in the iron ore and copper price (note 16). The selling price
of these products can be measured reliably at each period, since the price is quoted in an active market.
Selected
Notes to the Interim Financial Statements
Expressed in millions of United States dollar, unless otherwise stated
|
|
The sensitivity of
the Company’s risk on final settlement of provisionally priced accounts receivables is presented below:
|
|
September 30, 2021
|
|
|
|
Thousand metric tons
|
|
|
Provisional price
(US$/tonne)
|
|
|
Change
|
|
|
Effect on Revenue
|
|
Iron ore
|
|
|
21,772
|
|
|
|
100.2
|
|
|
|
+/-10
|
%
|
|
|
218
|
|
Iron ore pellets
|
|
|
407
|
|
|
|
167.2
|
|
|
|
+/-10
|
%
|
|
|
7
|
|
Copper
|
|
|
104
|
|
|
|
10,981.8
|
|
|
|
+/-10
|
%
|
|
|
114
|
|
5. Costs
and expenses by nature
a) Cost
of goods sold and services rendered
|
|
Three-month period ended September 30,
|
|
|
Nine-month period ended September 30,
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Personnel
|
|
|
393
|
|
|
|
413
|
|
|
|
1,227
|
|
|
|
1,188
|
|
Materials and services
|
|
|
805
|
|
|
|
809
|
|
|
|
2,326
|
|
|
|
2,362
|
|
Fuel oil and gas
|
|
|
287
|
|
|
|
217
|
|
|
|
762
|
|
|
|
702
|
|
Maintenance
|
|
|
810
|
|
|
|
689
|
|
|
|
2,259
|
|
|
|
1,975
|
|
Royalties
|
|
|
399
|
|
|
|
212
|
|
|
|
1,003
|
|
|
|
544
|
|
Energy
|
|
|
173
|
|
|
|
176
|
|
|
|
491
|
|
|
|
512
|
|
Ores acquired from third parties (i)
|
|
|
634
|
|
|
|
279
|
|
|
|
1,668
|
|
|
|
540
|
|
Depreciation, depletion and amortization
|
|
|
653
|
|
|
|
726
|
|
|
|
2,141
|
|
|
|
2,189
|
|
Freight (ii)
|
|
|
1,176
|
|
|
|
932
|
|
|
|
2,949
|
|
|
|
2,319
|
|
Others
|
|
|
506
|
|
|
|
363
|
|
|
|
1,442
|
|
|
|
975
|
|
Total
|
|
|
5,836
|
|
|
|
4,816
|
|
|
|
16,268
|
|
|
|
13,306
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
|
|
5,676
|
|
|
|
4,677
|
|
|
|
15,832
|
|
|
|
12,880
|
|
Cost of services rendered
|
|
|
160
|
|
|
|
139
|
|
|
|
436
|
|
|
|
426
|
|
Total
|
|
|
5,836
|
|
|
|
4,816
|
|
|
|
16,268
|
|
|
|
13,306
|
|
(i) The increase
in “Ores acquired from third parties” is mainly due to the significant increase in the reference price of iron ore compared
to 2020.
(ii) The increase
in "Freight" is mainly due to the significant increase in volumes of CFR sales and higher international freight prices.
Tax
on mineral production (Taxa de Fiscalização de Recursos Minerais - “TFRM”) –
Several Brazilian states, including Minas Gerais, Pará and Mato Grosso do Sul, charge a
TFRM, which is currently assessed at rates ranging from R$0.50 to R$3.72 per metric ton of minerals produced in or transferred from the
state. The expenses related to the TFRM are presented in these interim financial statements under “Royalties”. In March 2021,
a state decree increased the TFRM rate in the state of Para to R$11.19 per metric ton, effective in April 2021. According to the
prior rule, which would expire in 2031, the TFRM rate was R$3.72 per ton until the production of 10 million metric tons and R$0.74 for
volumes over than 10 million metric tons. The Company did not apply this increase in the current period based on the Brazilian constitutional
principle of mandatory notice period, which sets out the tax increase would become in force only in the subsequent year of its enactment
and does not expect any impact for the year ending December 31, 2021. The Company is also evaluating other legal aspects to avoid
this increase in the future.
b) Selling
and administrative expenses
|
|
Three-month period ended September 30,
|
|
|
Nine-month period ended September 30,
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Selling
|
|
|
25
|
|
|
|
21
|
|
|
|
68
|
|
|
|
58
|
|
Personnel
|
|
|
29
|
|
|
|
50
|
|
|
|
128
|
|
|
|
137
|
|
Services
|
|
|
29
|
|
|
|
28
|
|
|
|
68
|
|
|
|
79
|
|
Depreciation and amortization
|
|
|
11
|
|
|
|
9
|
|
|
|
30
|
|
|
|
40
|
|
Others
|
|
|
21
|
|
|
|
19
|
|
|
|
59
|
|
|
|
52
|
|
Total
|
|
|
115
|
|
|
|
127
|
|
|
|
353
|
|
|
|
366
|
|
c) Other
operating expenses (income), net
|
|
Three-month period ended September 30,
|
|
|
Nine-month period ended September 30,
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Provision for litigations
|
|
|
23
|
|
|
|
11
|
|
|
|
67
|
|
|
|
74
|
|
Profit sharing program
|
|
|
31
|
|
|
|
34
|
|
|
|
106
|
|
|
|
79
|
|
COVID-19 expenses
|
|
|
10
|
|
|
|
15
|
|
|
|
28
|
|
|
|
100
|
|
Others (i)
|
|
|
(28
|
)
|
|
|
53
|
|
|
|
(79
|
)
|
|
|
159
|
|
Total
|
|
|
36
|
|
|
|
113
|
|
|
|
122
|
|
|
|
412
|
|
(i) Includes the gain related to the exclusion of ICMS from the PIS and COFINS computation tax base, as detailed in note 23(e).
Selected
Notes to the Interim Financial Statements
Expressed in millions of United States dollar, unless otherwise stated
|
|
6. Financial
result
|
|
Three-month period ended September 30,
|
|
|
Nine-month period ended September 30,
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Financial income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term investments
|
|
|
70
|
|
|
|
25
|
|
|
|
138
|
|
|
|
105
|
|
Others (i)
|
|
|
21
|
|
|
|
44
|
|
|
|
113
|
|
|
|
206
|
|
|
|
|
91
|
|
|
|
69
|
|
|
|
251
|
|
|
|
311
|
|
Financial expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and borrowings gross interest (note 19)
|
|
|
(157
|
)
|
|
|
(208
|
)
|
|
|
(540
|
)
|
|
|
(615
|
)
|
Capitalized loans and borrowing costs
|
|
|
14
|
|
|
|
13
|
|
|
|
44
|
|
|
|
57
|
|
Participative stockholders' debentures (note 18)
|
|
|
152
|
|
|
|
(553
|
)
|
|
|
(1,109
|
)
|
|
|
(833
|
)
|
Interest on REFIS
|
|
|
(17
|
)
|
|
|
(10
|
)
|
|
|
(34
|
)
|
|
|
(47
|
)
|
Interest on lease liabilities (note 19)
|
|
|
(16
|
)
|
|
|
(16
|
)
|
|
|
(51
|
)
|
|
|
(51
|
)
|
Financial guarantees (ii)
|
|
|
(34
|
)
|
|
|
(353
|
)
|
|
|
330
|
|
|
|
(525
|
)
|
Expenses with cash tender offer redemption (note 19)
|
|
|
-
|
|
|
|
-
|
|
|
|
(63
|
)
|
|
|
-
|
|
Others
|
|
|
(78
|
)
|
|
|
(88
|
)
|
|
|
(276
|
)
|
|
|
(311
|
)
|
|
|
|
(136
|
)
|
|
|
(1,215
|
)
|
|
|
(1,699
|
)
|
|
|
(2,325
|
)
|
Other financial items, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net foreign exchange gains (losses)
|
|
|
362
|
|
|
|
(18
|
)
|
|
|
292
|
|
|
|
(375
|
)
|
Derivative financial instruments (note 16)
|
|
|
(458
|
)
|
|
|
(187
|
)
|
|
|
(41
|
)
|
|
|
(1,657
|
)
|
Reclassification of cumulative translation adjustment (note 12)
|
|
|
10
|
|
|
|
-
|
|
|
|
1,142
|
|
|
|
-
|
|
Indexation gains (losses), net
|
|
|
(242
|
)
|
|
|
(9
|
)
|
|
|
(45
|
)
|
|
|
(84
|
)
|
|
|
|
(328
|
)
|
|
|
(214
|
)
|
|
|
1,348
|
|
|
|
(2,116
|
)
|
Total
|
|
|
(373
|
)
|
|
|
(1,360
|
)
|
|
|
(100
|
)
|
|
|
(4,130
|
)
|
(i) During nine-month period ended
on September 30, 2020, includes amounts related to Eletrobras contingent assets in the amount of US$59, due to differences of monetary
adjustments and interests due over to the third convertible bonds.
(ii) Refers to the fair value adjustments on financial guarantees given to associates due to their rating improvement, leading to
a decrease in the probability of default on the guaranteed loans. Further details are disclosed in note 13 and 17.
7. Income taxes
a)
Deferred income tax assets and liabilities
|
|
Assets
|
|
|
Liabilities
|
|
|
Deferred taxes, net
|
|
Balance at December 31, 2020
|
|
|
10,335
|
|
|
|
1,770
|
|
|
|
8,565
|
|
Effect in income statement
|
|
|
1,633
|
|
|
|
(24
|
)
|
|
|
1,657
|
|
Transfers between asset and liabilities
|
|
|
7
|
|
|
|
7
|
|
|
|
-
|
|
Translation adjustment
|
|
|
(452
|
)
|
|
|
(4
|
)
|
|
|
(448
|
)
|
Other comprehensive income
|
|
|
(121
|
)
|
|
|
179
|
|
|
|
(300
|
)
|
Balance at September 30, 2021
|
|
|
11,402
|
|
|
|
1,928
|
|
|
|
9,474
|
|
|
|
|
Assets
|
|
|
|
Liabilities
|
|
|
|
Deferred taxes, net
|
|
Balance at December 31, 2019
|
|
|
9,217
|
|
|
|
1,882
|
|
|
|
7,335
|
|
Effect in income statement
|
|
|
1,049
|
|
|
|
(77
|
)
|
|
|
1,126
|
|
Translation adjustment
|
|
|
(2,552
|
)
|
|
|
(105
|
)
|
|
|
(2,447
|
)
|
Other comprehensive income
|
|
|
1,896
|
|
|
|
(65
|
)
|
|
|
1,961
|
|
Balance at September 30, 2020
|
|
|
9,610
|
|
|
|
1,635
|
|
|
|
7,975
|
|
b) Income
tax reconciliation – Income statement
Income
tax expense is recognized based on the estimate of the weighted average effective tax rate expected for the full year,
adjusted for the tax effect of certain items that are recognized in full on the interim tax calculation.
Therefore, the effective tax rate in the interim financial statements may differ
from management’s estimate of the effective tax rate for the year.
Selected
Notes to the Interim Financial Statements
Expressed in millions of United States dollar, unless otherwise stated
|
|
The total amount presented
as income taxes in the income statement is reconciled to the statutory rate, as follows:
|
|
Three-month period ended September 30,
|
|
|
Nine-month period ended September 30,
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Income before income taxes
|
|
|
3,598
|
|
|
|
3,601
|
|
|
|
20,495
|
|
|
|
4,177
|
|
Income taxes at statutory rate - 34%
|
|
|
(1,223
|
)
|
|
|
(1,224
|
)
|
|
|
(6,968
|
)
|
|
|
(1,420
|
)
|
Adjustments that affect the basis of taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax incentives
|
|
|
971
|
|
|
|
491
|
|
|
|
2,589
|
|
|
|
980
|
|
Equity results
|
|
|
68
|
|
|
|
(2
|
)
|
|
|
94
|
|
|
|
(25
|
)
|
Addition (reversal) of tax loss carryforward
|
|
|
109
|
|
|
|
103
|
|
|
|
-
|
|
|
|
497
|
|
Others
|
|
|
435
|
|
|
|
(162
|
)
|
|
|
762
|
|
|
|
(322
|
)
|
Income taxes
|
|
|
360
|
|
|
|
(794
|
)
|
|
|
(3,523
|
)
|
|
|
(290
|
)
|
c) Income taxes - Settlement program (“REFIS”)
|
|
September 30, 2021
|
|
|
December 31, 2020
|
|
Current liabilities
|
|
|
330
|
|
|
|
340
|
|
Non-current liabilities
|
|
|
2,080
|
|
|
|
2,404
|
|
REFIS liabilities
|
|
|
2,410
|
|
|
|
2,744
|
|
|
|
|
|
|
|
|
|
|
SELIC rate
|
|
|
6.25% per year
|
|
|
|
2.00% per year
|
|
The balance mainly
relates to the settlement program of the claims related to the collection of income tax and social contribution on equity gains of foreign
subsidiaries and affiliates from 2003 to 2012. As at September 30, 2021, the balance is due in 85 remaining monthly installments,
bearing the SELIC interest rate (Special System for Settlement and Custody), which is the Brazilian federal funds rate.
d)
Uncertain tax positions
In September 2021,
in the judgement of the leading case (RE 1.063.187), the Brazilian Federal Supreme Court (“STF”) ruled that
is unconstitutional to include the gain related to the monetary adjustments, calculated based on the SELIC (Special System for Settlement
and Custody), over certain tax credits on the computation of the Corporate Income Tax ("IRPJ") and Social Contribution on Net
Income ("CSLL"). Despite the favorable conclusion to taxpayers, the decision is not yet final, as the publication
of the decision is pending and may be appealed.
Vale filed a lawsuit
to discuss the matter and is awaiting for the publication of the STF decision to assess the potential effects on the eventual gain involved,
which is estimated at US$35 (R$190 million). Considering that the decision is not even published, the Company's external
legal advisors consider a gain is not yet probable. Therefore, the Company did not record any gain in these interim financial
statements.
8. Basic and diluted earnings per share
The basic and diluted
earnings per share are presented below:
|
|
Three-month period ended September 30,
|
|
|
Nine-month period ended September 30,
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Net income attributable to Vale's stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
3,886
|
|
|
|
2,908
|
|
|
|
17,018
|
|
|
|
4,142
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thousands of shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding
|
|
|
5,080,890
|
|
|
|
5,129,911
|
|
|
|
5,065,750
|
|
|
|
5,129,475
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common share (US$)
|
|
|
0.76
|
|
|
|
0.57
|
|
|
|
3.36
|
|
|
|
0.81
|
|
The Company does not
have potential outstanding shares or other instruments with dilutive effect on the earnings per share computation.
Selected
Notes to the Interim Financial Statements
Expressed in millions of United States dollar, unless otherwise stated
|
|
9. Accounts receivable
|
|
September 30, 2021
|
|
|
December 31, 2020
|
|
Accounts receivable
|
|
|
920
|
|
|
|
5,043
|
|
Expected credit loss
|
|
|
(47
|
)
|
|
|
(50
|
)
|
|
|
|
873
|
|
|
|
4,993
|
|
|
|
|
|
|
|
|
|
|
Revenue related to the steel sector
|
|
|
89.66
|
%
|
|
|
87.25
|
%
|
|
|
Three-month period ended September 30,
|
|
|
Nine-month period ended September 30,
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Impairment of accounts receivable recorded in the income statement
|
|
|
1
|
|
|
|
1
|
|
|
|
4
|
|
|
|
10
|
|
The decrease in the
accounts receivable is mainly due to the reduction in average prices and volumes of provisional sales of iron ore.
As at September 30,
2021, there is no customer that individually represents more than 10% of the Company’s accounts receivable or revenues. In 2020,
the Company had a customer of the Ferrous Minerals Segment whose revenue individually represented 10.1% of the Company’s total
revenue.
10. Inventories
|
|
September 30, 2021
|
|
|
December 31, 2020
|
|
Finished products
|
|
|
3,391
|
|
|
|
2,626
|
|
Work in progress
|
|
|
793
|
|
|
|
647
|
|
Consumable inventory
|
|
|
901
|
|
|
|
788
|
|
Total
|
|
|
5,085
|
|
|
|
4,061
|
|
|
|
Three-month period ended September 30,
|
|
|
Nine-month period ended September 30,
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Reversal for net realizable value
|
|
|
28
|
|
|
|
42
|
|
|
|
29
|
|
|
|
3
|
|
Finished and work
in progress products inventories by segments are presented in note 4(b) and the cost of goods sold is presented in note 5(a).
11. Other
financial assets and liabilities
|
|
Current
|
|
|
Non-Current
|
|
|
|
September 30, 2021
|
|
|
December 31, 2020
|
|
|
September 30, 2021
|
|
|
December 31, 2020
|
|
Other financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted cash
|
|
|
-
|
|
|
|
-
|
|
|
|
121
|
|
|
|
38
|
|
Derivative financial instruments (note 16)
|
|
|
145
|
|
|
|
134
|
|
|
|
35
|
|
|
|
66
|
|
Investments in equity securities
|
|
|
1,221
|
|
|
|
-
|
|
|
|
6
|
|
|
|
757
|
|
Related parties (i)
|
|
|
-
|
|
|
|
195
|
|
|
|
-
|
|
|
|
923
|
|
|
|
|
1,366
|
|
|
|
329
|
|
|
|
162
|
|
|
|
1,784
|
|
Other financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments (note 16)
|
|
|
334
|
|
|
|
328
|
|
|
|
630
|
|
|
|
689
|
|
Related parties (i)
|
|
|
132
|
|
|
|
725
|
|
|
|
-
|
|
|
|
895
|
|
Financial guarantees provided (note 13 and 17)
|
|
|
-
|
|
|
|
-
|
|
|
|
538
|
|
|
|
877
|
|
Liabilities related to the concession grant (note 14)
|
|
|
392
|
|
|
|
209
|
|
|
|
1,657
|
|
|
|
2,103
|
|
Advances received
|
|
|
699
|
|
|
|
644
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
1,557
|
|
|
|
1,906
|
|
|
|
2,825
|
|
|
|
4,564
|
|
(i) The decrease
refers to the settlement of the loans due to the transaction for the acquisition of NLC, as detailed in note 12.
Investment
in equity securities – Mainly refers to 34.2 million common shares of The Mosaic Company (“Mosaic”),
which is accounted for as a financial instrument measured at fair value through other comprehensive income. The fair value of this instrument
is measured using the Mosaic’s share price at the end of each financial reporting period. In addition, the Company holds an investment
of US$6 made in February 2021 to acquire a non-controlling interest of 3.24% in Boston Electrometallurgical Company, aiming to promote
the development of a technology focused on the reduction of carbon dioxide on the steel production.
Selected
Notes to the Interim Financial Statements
Expressed in millions of United States dollar, unless otherwise stated
|
|
Liabilities
related to the concession grant - On October 28, 2021 (subsequent event), the Board of Directors
approved the prepayment in the amount of US$344 (R$1,871 million) of the concessions grant. With the prepayment, the liability will be
remeasured and the outstanding balance is estimated to be US$179 (R$973 million).
12. Acquisitions and divestitures
a) Business Combinations
The Company has coking
and thermal coal mining and processing operations in Mozambique. Vale Moçambique S.A. (“Vale Moçambique”) is
a company controlled by Vale, with a non-controlling interest held by Mitsui & Co. Ltd. (“Mitsui”) until the acquisition
completed on June 22, 2021, as detailed below in (a.i). Coal products are transported from the Moatize mine to the maritime terminal
by the Nacala Logistics Corridor (“NLC”), which were a joint venture between Vale and Mitsui. The NLC’s main assets
are the railways and port concessions located in Mozambique and Malawi.
(a.i) Acquisition
of non-controlling interest in Vale Moçambique
On June 22, 2021
the Company acquired the 15% interest held by Mitsui in Vale Moçambique for an immaterial consideration, which resulted in a loss
of US$331 (R$1,666 million) due to the negative reserves of Vale Moçambique at the conclusion of the transaction. This transaction
with non-controlling interests was recognized in the Stockholders’ Equity for the period ended June 30, 2021 as “Acquisition
and disposal of non-controlling interest”. After the acquisition of the interests previously held by Mitsui, the Company holds
95% of the share capital of Vale Moçambique and the remaining interest is held by the government of Mozambique.
(a.ii) Business
combinations – NLC
Also on June 22,
2021, the acquisition was concluded with the settlement of NLC’s loans with third parties (“Project Finance”) in the
amount of US$2,517, satisfying all conditions to acquire the additional 50% held by Mitsui. Therefore, the Company started consolidating
the NLC’s assets and liabilities on its balance sheet.
In
addition, the Company has updated the discounted cash flow model to assess the fair value of the acquired business, resulting in a loss
of US$771 (US$798 as at December 31, 2020) on the fair value of the loans receivable from NLC, mainly due to the decrease in the
long-term price assumption for both coking and thermal coal as well as the reduction in the expected production to reflect the operational
challenges to reach the ramp-up of the coal business, after the revamp of the processing plants. The cash flows were discounted at a
rate of 11.6%, and the loss was recognized as “Impairment and disposals of non-current assets”
for the period ended June 30, 2021.
The fair values of
identifiable assets acquired and liabilities assumed as a result of the NLC’s acquisition were as follows:
|
|
June 22, 2021
|
|
Acquired assets
|
|
|
|
|
Cash and cash equivalents
|
|
|
172
|
|
Inventory, recoverable tax and other assets
|
|
|
423
|
|
Intangible
|
|
|
2,219
|
|
Property, plant and equipment
|
|
|
1,363
|
|
Assumed liabilities
|
|
|
(158
|
)
|
Net identifiable assets acquired
|
|
|
4,019
|
|
Fair value adjustments (i)
|
|
|
(1,590
|
)
|
Total identifiable net assets at fair value (ii)
|
|
|
2,429
|
|
|
|
|
|
|
Pre-existing relationship (Loans receivable from NLC)
|
|
|
859
|
|
Loss on pre-existing relationship
|
|
|
(771
|
)
|
|
|
|
2,517
|
|
|
|
|
|
|
Cash consideration
|
|
|
2,517
|
|
(-) Balances acquired
|
|
|
|
|
Cash and cash equivalents
|
|
|
172
|
|
Net cash outflow
|
|
|
2,345
|
|
(i) Of this amount,
US$441 was allocated to property, plant and equipment and US$791 was allocated to intangible and the remaining amount was allocated to
other assets.
Selected Notes to the Interim Financial
Statements
Expressed in millions of United States dollar, unless otherwise stated
|
|
(ii) The fair value was assessed using the
fair value less costs of disposal model, through discounted cash flow techniques, which is classified as “level 3” in the
fair value hierarchy. The cash flows were discounted by using a post-tax discount rate expressed in real terms, which represents an estimate
of the rate that a market participant would apply having regard to the time value of money and the asset’s specific risk.
(a.iii) Fair value adjustments
On the announcement of the Investment Agreement
with Mitsui, the Company has also informed the market its divestiture intention in the coal segment. Since then, interactions during
the current quarter with potential interested parties in acquiring the Company’s coal assets have led management to decide to fully
impair those assets, resulting in the recognition of an impairment loss of US$2,304 in the income statement as "Impairment and disposal
of non-current assets” for the period ended September 30, 2021. Therefore, in the event of a potential sale, the Company will
recognize a gain of approximately US$1,910 related to the accumulated translation adjustments on the disposal.
Additionally, due to the current stage of
the sale process, the coal segment does not yet meet the “highly probable” definition under IFRS - 5 Non-Current Assets
Held for Sale and Discontinued Operations to quality as held for sale as at September 30, 2021. Therefore, the Company will continue
assessing the criteria at each period for financial reporting purposes.
Furthermore,
the Company concluded that its Australian subsidiaries (part of the coal segment), which are no longer operational, were considered "abandoned"
under IAS 21 - The Effects of Changes in Foreign Exchange Rates and, therefore, the Company recognized a gain related to the accumulated
translation adjustments in the amount of US$424, which was reclassified to net income as “Impairment and disposals of non-current
assets” for the period ended June 30, 2021.
|
b)
|
Other acquisitions and divestitures
|
Vale Nouvelle-Calédonie
S.A.S. (“VNC”) – In December 2020, the Company signed a binding put option agreement to sell
its interest in VNC for an immaterial consideration to Prony Resources, a consortium constituted and led by the current management and
employees of VNC supported by the Caledonian and French authorities, with Trafigura Pte. Ltd. as a non-controlling shareholder. Under
the terms of agreement, the Company has assumed an obligation to pay to the buyers an amount of US$500 upon closing of the transaction
and this amount has been provided for as at December 31, 2020.
In March 2021, the Company signed the share
purchase and sale agreement with Prony Resources, concluding the transaction to sell its interest in VNC. With the final agreement, Vale's
obligation to pay to buyers increased by US$55, which combined with other working capital adjustments, resulted in an additional loss
of US$98, recorded as “Impairment and disposals of non-current assets”. On March 31, 2021, the Company disbursed US$555
to VNC on the closing of the transaction.
The agreement also established that Vale has
an offtake agreement to purchase a certain amount of VNC’s annual nickel production with a cap price over a period of 13 years.
Such cap included in contract is an embedded derivative, however, it is deemed closely related to the host contract (nickel supply agreement)
because the cap was out of the money on inception of the contract. Therefore, this derivative will not be separated from the host contract,
which will be accounted for as an executory contract.
Upon closing of the transaction, the Company
also recognized a gain of US$1,132 arising from the accumulated exchange differences reclassified from the stockholders’ equity
to the income statement under “Other financial items, net”.
Manganese ferroalloys
operations classified as non-current assets and liabilities held for sale – In September 2021, the Company
signed an agreement to sell its assets and liabilities located in the state of Minas Gerais, which are part of Vale Manganês S.A.
and relates to the manganese ferroalloys business, for US$40 (R$218 million). Due to that agreement, those assets and liabilities were
classified as "held for sale" and measured at fair value less costs of disposal, resulting in the recognition of an impairment
loss of US$18 recognized in the income statement as "Impairment and disposal of non-current assets” for the three-month period
ended September 30, 2021. The completion of the transaction is subject to review of the Brazilian Administrative Council for Economic
Defense ("CADE") and is expected to occur within the next 12 months. Those assets and liabilities were classified as non-current
held for sale as follows:
Selected Notes to the Interim Financial
Statements
Expressed in millions of United States dollar, unless otherwise stated
|
|
|
|
September 30, 2021
|
|
Assets
|
|
|
|
|
Accounts receivable
|
|
|
21
|
|
Inventories
|
|
|
11
|
|
Recoverable taxes
|
|
|
17
|
|
Property, plant and equipment
|
|
|
11
|
|
Non-current assets held for sale
|
|
|
60
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Suppliers and contractors
|
|
|
8
|
|
Provisions
|
|
|
5
|
|
Non-current liabilities held for sale
|
|
|
13
|
|
Selected Notes to the Interim Financial
Statements
Expressed in millions of United States dollar, unless otherwise stated
|
|
13. Investments
in associates and joint ventures
a) Investment
information
|
|
|
|
|
|
Investments
in associates and
joint ventures
|
|
Equity
results in the income statement
|
|
Dividends
received
|
|
|
|
|
|
|
|
|
|
|
|
Three-month
period
ended September 30,
|
|
Nine-month
period
ended September 30,
|
|
Three-month
period
ended September 30,
|
|
Nine-month
period
ended September 30,
|
|
Associates
and joint ventures
|
|
%
ownership
|
|
%
voting
capital
|
|
September 30,
2021
|
|
December 31,
2020
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
Ferrous minerals
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Baovale Mineração
S.A.
|
|
|
50.00
|
|
|
50.00
|
|
|
22
|
|
|
20
|
|
|
1
|
|
|
1
|
|
|
4
|
|
|
3
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Companhia Coreano-Brasileira
de Pelotização
|
|
|
50.00
|
|
|
50.00
|
|
|
71
|
|
|
48
|
|
|
15
|
|
|
2
|
|
|
30
|
|
|
7
|
|
|
-
|
|
|
-
|
|
|
2
|
|
|
17
|
|
Companhia Hispano-Brasileira
de Pelotização (i)
|
|
|
50.89
|
|
|
50.89
|
|
|
39
|
|
|
43
|
|
|
1
|
|
|
5
|
|
|
1
|
|
|
8
|
|
|
-
|
|
|
-
|
|
|
7
|
|
|
13
|
|
Companhia Ítalo-Brasileira
de Pelotização (i)
|
|
|
50.90
|
|
|
51.00
|
|
|
69
|
|
|
44
|
|
|
16
|
|
|
-
|
|
|
29
|
|
|
10
|
|
|
-
|
|
|
-
|
|
|
6
|
|
|
23
|
|
Companhia Nipo-Brasileira de
Pelotização (i)
|
|
|
51.00
|
|
|
51.11
|
|
|
139
|
|
|
121
|
|
|
15
|
|
|
-
|
|
|
28
|
|
|
8
|
|
|
-
|
|
|
-
|
|
|
7
|
|
|
-
|
|
MRS Logística S.A.
|
|
|
48.16
|
|
|
46.75
|
|
|
438
|
|
|
398
|
|
|
33
|
|
|
12
|
|
|
69
|
|
|
24
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
VLI S.A.
|
|
|
29.60
|
|
|
29.60
|
|
|
428
|
|
|
480
|
|
|
(23
|
)
|
|
(1
|
)
|
|
(31
|
)
|
|
(23
|
)
|
|
-
|
|
|
2
|
|
|
-
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
1,206
|
|
|
1,154
|
|
|
58
|
|
|
19
|
|
|
130
|
|
|
37
|
|
|
-
|
|
|
2
|
|
|
22
|
|
|
55
|
|
Base metals
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Korea Nickel
Corp.
|
|
|
25.00
|
|
|
25.00
|
|
|
17
|
|
|
18
|
|
|
-
|
|
|
(1
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
17
|
|
|
18
|
|
|
-
|
|
|
(1
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Others
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aliança Geração
de Energia S.A. (i)
|
|
|
55.00
|
|
|
55.00
|
|
|
382
|
|
|
367
|
|
|
41
|
|
|
5
|
|
|
58
|
|
|
22
|
|
|
5
|
|
|
-
|
|
|
26
|
|
|
24
|
|
Aliança Norte Energia
Participações S.A. (i)
|
|
|
51.00
|
|
|
51.00
|
|
|
109
|
|
|
117
|
|
|
-
|
|
|
(2
|
)
|
|
(3
|
)
|
|
(5
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
California Steel Industries, Inc.
|
|
|
50.00
|
|
|
50.00
|
|
|
316
|
|
|
234
|
|
|
104
|
|
|
(8
|
)
|
|
165
|
|
|
(10
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Companhia Siderúrgica
do Pecém (“CSP”) (ii)
|
|
|
50.00
|
|
|
50.00
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(42
|
)
|
|
(75
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Mineração Rio do
Norte S.A.
|
|
|
40.00
|
|
|
40.00
|
|
|
-
|
|
|
71
|
|
|
(3
|
)
|
|
5
|
|
|
(5
|
)
|
|
(7
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Others
|
|
|
|
|
|
|
|
|
69
|
|
|
70
|
|
|
(2
|
)
|
|
(24
|
)
|
|
(26
|
)
|
|
(35
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
876
|
|
|
859
|
|
|
140
|
|
|
(24
|
)
|
|
147
|
|
|
(110
|
)
|
|
5
|
|
|
-
|
|
|
26
|
|
|
24
|
|
Total
|
|
|
|
|
|
|
|
|
2,099
|
|
|
2,031
|
|
|
198
|
|
|
(6
|
)
|
|
277
|
|
|
(73
|
)
|
|
5
|
|
|
2
|
|
|
48
|
|
|
79
|
|
(i) Although
the Company held a majority of the voting capital, the entities are accounted under the equity method due to the stockholders' agreement
where relevant decisions are shared with other parties.
(ii) CSP is
a joint venture and its results are accounted for under the equity method, in which the accumulated losses are capped to the Company
́s interest in the investee’s capital based on the applicable law and requirements. That is, after the investment is reduced
to zero, the Company does not recognize further losses nor liabilities associated with the investee.
(iii) “Equity
results and other results in associates and joint ventures” presented in the Income Statement considers, in addition to the equity
results in associates and joint ventures shown in the table above, the results of Renova Foundation and Samarco (note 21) and other results
with group entities.
Selected Notes to the Interim Financial
Statements
Expressed in millions of United States dollar, unless otherwise stated
|
|
b) Movements during the period
|
|
2021
|
|
|
2020
|
|
Balance at January 1
|
|
|
2,031
|
|
|
|
2,798
|
|
Capital contribution to CSP
|
|
|
42
|
|
|
|
75
|
|
Translation adjustment
|
|
|
(82
|
)
|
|
|
(695
|
)
|
Equity results in income statement
|
|
|
275
|
|
|
|
(73
|
)
|
Equity results in statement of comprehensive income
|
|
|
3
|
|
|
|
(2
|
)
|
Impairment of Mineração Rio do Norte S.A.
|
|
|
(65
|
)
|
|
|
-
|
|
Dividends declared
|
|
|
(132
|
)
|
|
|
(104
|
)
|
Others
|
|
|
27
|
|
|
|
37
|
|
Balance at September 30
|
|
|
2,099
|
|
|
|
2,036
|
|
The investments by segments are presented
in note 4(b).
c) Financial guarantees provided
As at September 30, 2021 and December 31,
2020, the notional value of corporate financial guarantees provided by the Company (within the limit of its direct or indirect interest)
for certain associates and joint ventures were US$1,510 and US$1,557, respectively. The fair value of these financial guarantees is shown
in note 17.
14. Intangible
Movements during the period
|
|
Goodwill
|
|
|
Concessions
|
|
|
Contract right
|
|
|
Software
|
|
|
Research and
development
project and
patents
|
|
|
Total
|
|
Balance at December 31, 2020
|
|
|
3,298
|
|
|
|
5,391
|
|
|
|
-
|
|
|
|
76
|
|
|
|
531
|
|
|
|
9,296
|
|
Additions
|
|
|
-
|
|
|
|
121
|
|
|
|
-
|
|
|
|
22
|
|
|
|
-
|
|
|
|
143
|
|
Disposals
|
|
|
-
|
|
|
|
(4
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(4
|
)
|
Amortization
|
|
|
-
|
|
|
|
(187
|
)
|
|
|
-
|
|
|
|
(23
|
)
|
|
|
-
|
|
|
|
(210
|
)
|
Acquisition of NLC (note 12)
|
|
|
-
|
|
|
|
1,428
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,428
|
|
Impairment (i)
|
|
|
-
|
|
|
|
(1,422
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,422
|
)
|
Translation adjustment
|
|
|
(50
|
)
|
|
|
(242
|
)
|
|
|
-
|
|
|
|
(2
|
)
|
|
|
(24
|
)
|
|
|
(318
|
)
|
Balance at September 30, 2021
|
|
|
3,248
|
|
|
|
5,085
|
|
|
|
-
|
|
|
|
73
|
|
|
|
507
|
|
|
|
8,913
|
|
Cost
|
|
|
3,248
|
|
|
|
7,486
|
|
|
|
-
|
|
|
|
741
|
|
|
|
507
|
|
|
|
11,982
|
|
Accumulated amortization
|
|
|
-
|
|
|
|
(2,401
|
)
|
|
|
-
|
|
|
|
(668
|
)
|
|
|
-
|
|
|
|
(3,069
|
)
|
Balance at September 30, 2021
|
|
|
3,248
|
|
|
|
5,085
|
|
|
|
-
|
|
|
|
73
|
|
|
|
507
|
|
|
|
8,913
|
|
|
|
Goodwill
|
|
|
Concessions
|
|
|
Contract right
|
|
|
Software
|
|
|
Research and
development
project and
patents
|
|
|
Total
|
|
Balance at December 31, 2019
|
|
|
3,629
|
|
|
|
3,970
|
|
|
|
140
|
|
|
|
76
|
|
|
|
684
|
|
|
|
8,499
|
|
Additions
|
|
|
-
|
|
|
|
119
|
|
|
|
-
|
|
|
|
13
|
|
|
|
-
|
|
|
|
132
|
|
Disposals
|
|
|
-
|
|
|
|
(5
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(5
|
)
|
Amortization
|
|
|
-
|
|
|
|
(135
|
)
|
|
|
(1
|
)
|
|
|
(17
|
)
|
|
|
-
|
|
|
|
(153
|
)
|
Translation adjustment
|
|
|
(515
|
)
|
|
|
(1,126
|
)
|
|
|
(10
|
)
|
|
|
(13
|
)
|
|
|
(195
|
)
|
|
|
(1,859
|
)
|
Balance at September 30, 2020
|
|
|
3,114
|
|
|
|
2,823
|
|
|
|
129
|
|
|
|
59
|
|
|
|
489
|
|
|
|
6,614
|
|
Cost
|
|
|
3,114
|
|
|
|
3,718
|
|
|
|
226
|
|
|
|
703
|
|
|
|
489
|
|
|
|
8,250
|
|
Accumulated amortization
|
|
|
-
|
|
|
|
(895
|
)
|
|
|
(97
|
)
|
|
|
(644
|
)
|
|
|
-
|
|
|
|
(1,636
|
)
|
Balance at September 30, 2020
|
|
|
3,114
|
|
|
|
2,823
|
|
|
|
129
|
|
|
|
59
|
|
|
|
489
|
|
|
|
6,614
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(i) In the current year, the Company recognized
an impairment loss related to coal assets incorporated in the acquisition of NLC in the amount of US$1,422 (note 12).
15. Property,
plant and equipment
a) Movements during the period
Selected Notes to the Interim Financial
Statements
Expressed in millions of United States dollar, unless otherwise stated
|
|
|
|
Building
and land
|
|
Facilities
|
|
Equipment
|
|
Mineral
properties
|
|
Railway
equipment
|
|
Right
of use
assets
|
|
Others
|
|
Constructions
in progress
|
|
Total
|
|
Balance at
December 31, 2020
|
|
|
8,591
|
|
|
7,591
|
|
|
4,933
|
|
|
8,054
|
|
|
2,523
|
|
|
1,563
|
|
|
2,495
|
|
|
5,398
|
|
|
41,148
|
|
Additions (i)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
56
|
|
|
-
|
|
|
3,502
|
|
|
3,558
|
|
Disposals
|
|
|
(3
|
)
|
|
(26
|
)
|
|
(60
|
)
|
|
-
|
|
|
(5
|
)
|
|
-
|
|
|
-
|
|
|
(44
|
)
|
|
(138
|
)
|
Asset retirement obligation (ii)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(442
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(442
|
)
|
Depreciation, depletion and amortization
|
|
|
(332
|
)
|
|
(361
|
)
|
|
(495
|
)
|
|
(319
|
)
|
|
(129
|
)
|
|
(130
|
)
|
|
(193
|
)
|
|
-
|
|
|
(1,959
|
)
|
Acquisition of NLC (note 12)
|
|
|
235
|
|
|
140
|
|
|
102
|
|
|
-
|
|
|
318
|
|
|
33
|
|
|
2
|
|
|
92
|
|
|
922
|
|
Impairment (iii)
|
|
|
(231
|
)
|
|
(114
|
)
|
|
(85
|
)
|
|
-
|
|
|
(313
|
)
|
|
(33
|
)
|
|
(2
|
)
|
|
(233
|
)
|
|
(1,011
|
)
|
Translation adjustment
|
|
|
(263
|
)
|
|
(276
|
)
|
|
(71
|
)
|
|
(64
|
)
|
|
(110
|
)
|
|
(17
|
)
|
|
(63
|
)
|
|
(116
|
)
|
|
(980
|
)
|
Transfers
|
|
|
226
|
|
|
370
|
|
|
521
|
|
|
200
|
|
|
84
|
|
|
-
|
|
|
208
|
|
|
(1,609
|
)
|
|
-
|
|
Transfer
to net assets held for sale (note 12)
|
|
|
(3
|
)
|
|
(2
|
)
|
|
(3
|
)
|
|
(2
|
)
|
|
-
|
|
|
-
|
|
|
(1
|
)
|
|
-
|
|
|
(11
|
)
|
Balance at September 30,
2021
|
|
|
8,220
|
|
|
7,322
|
|
|
4,842
|
|
|
7,427
|
|
|
2,368
|
|
|
1,472
|
|
|
2,446
|
|
|
6,990
|
|
|
41,087
|
|
Cost
|
|
|
15,228
|
|
|
12,074
|
|
|
10,905
|
|
|
16,674
|
|
|
3,747
|
|
|
1,951
|
|
|
5,463
|
|
|
6,990
|
|
|
73,032
|
|
Accumulated
depreciation
|
|
|
(7,008
|
)
|
|
(4,752
|
)
|
|
(6,063
|
)
|
|
(9,247
|
)
|
|
(1,379
|
)
|
|
(479
|
)
|
|
(3,017
|
)
|
|
-
|
|
|
(31,945
|
)
|
Balance at September 30,
2021
|
|
|
8,220
|
|
|
7,322
|
|
|
4,842
|
|
|
7,427
|
|
|
2,368
|
|
|
1,472
|
|
|
2,446
|
|
|
6,990
|
|
|
41,087
|
|
|
|
Building
and land
|
|
Facilities
|
|
Equipment
|
|
Mineral
properties
|
|
Railway
equipment
|
|
Right
of use
assets
|
|
Others
|
|
Constructions
in progress
|
|
Total
|
|
Balance at
December 31, 2019
|
|
|
10,702
|
|
|
9,604
|
|
|
5,686
|
|
|
8,261
|
|
|
3,241
|
|
|
1,692
|
|
|
3,012
|
|
|
4,378
|
|
|
46,576
|
|
Additions (i)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
41
|
|
|
-
|
|
|
2,767
|
|
|
2,808
|
|
Disposals
|
|
|
(7
|
)
|
|
(37
|
)
|
|
(2
|
)
|
|
(8
|
)
|
|
(5
|
)
|
|
-
|
|
|
(4
|
)
|
|
(33
|
)
|
|
(96
|
)
|
Asset retirement obligation
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
370
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
370
|
|
Depreciation, depletion and amortization
|
|
|
(333
|
)
|
|
(374
|
)
|
|
(559
|
)
|
|
(365
|
)
|
|
(141
|
)
|
|
(136
|
)
|
|
(215
|
)
|
|
-
|
|
|
(2,123
|
)
|
Impairment
|
|
|
(180
|
)
|
|
(260
|
)
|
|
(14
|
)
|
|
(140
|
)
|
|
-
|
|
|
-
|
|
|
(79
|
)
|
|
(145
|
)
|
|
(818
|
)
|
Translation adjustment
|
|
|
(2,201
|
)
|
|
(2,297
|
)
|
|
(846
|
)
|
|
(923
|
)
|
|
(903
|
)
|
|
(106
|
)
|
|
(591
|
)
|
|
(862
|
)
|
|
(8,729
|
)
|
Transfers
|
|
|
161
|
|
|
391
|
|
|
435
|
|
|
357
|
|
|
107
|
|
|
-
|
|
|
201
|
|
|
(1,652
|
)
|
|
-
|
|
Balance at September 30,
2020
|
|
|
8,142
|
|
|
7,027
|
|
|
4,700
|
|
|
7,552
|
|
|
2,299
|
|
|
1,491
|
|
|
2,324
|
|
|
4,453
|
|
|
37,988
|
|
Cost
|
|
|
14,256
|
|
|
10,759
|
|
|
10,168
|
|
|
16,129
|
|
|
3,489
|
|
|
1,842
|
|
|
5,510
|
|
|
4,453
|
|
|
66,606
|
|
Accumulated
depreciation
|
|
|
(6,114
|
)
|
|
(3,732
|
)
|
|
(5,468
|
)
|
|
(8,577
|
)
|
|
(1,190
|
)
|
|
(351
|
)
|
|
(3,186
|
)
|
|
-
|
|
|
(28,618
|
)
|
Balance at September 30,
2020
|
|
|
8,142
|
|
|
7,027
|
|
|
4,700
|
|
|
7,552
|
|
|
2,299
|
|
|
1,491
|
|
|
2,324
|
|
|
4,453
|
|
|
37,988
|
|
(i) Includes
capitalized borrowing costs.
(ii) Refers
to changes in discount rates.
(iii) Due to
the Company's assessment of the fair value of the coal assets, the assets acquired during the year are provided for impairment in full,
resulting in a loss of US$23 and US$111 for the three and nine-month periods ended September 30, 2021 (US$32 and US$103 for the
three and nine-month periods ended September 30, 2020). In the current year, the Company also recognized an impairment loss related
to NLC assets in the amount of US$882 (note 12).
b) Right-of-use assets (Leases)
|
|
December 31,
2020
|
|
|
Additions
and contract
modifications
|
|
|
Impairment
(ii)
|
|
|
Depreciation
|
|
|
Translation
adjustment
|
|
|
September 30,
2021
|
|
Ports
|
|
|
718
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(34
|
)
|
|
|
(5
|
)
|
|
|
679
|
|
Vessels
|
|
|
534
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(31
|
)
|
|
|
-
|
|
|
|
503
|
|
Pellets
plants
|
|
|
131
|
|
|
|
37
|
|
|
|
-
|
|
|
|
(27
|
)
|
|
|
(6
|
)
|
|
|
135
|
|
Properties
|
|
|
112
|
|
|
|
3
|
|
|
|
-
|
|
|
|
(23
|
)
|
|
|
(6
|
)
|
|
|
86
|
|
Energy
plants
|
|
|
56
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(5
|
)
|
|
|
-
|
|
|
|
51
|
|
Mining
equipment and locomotives (i)
|
|
|
12
|
|
|
|
49
|
|
|
|
(33
|
)
|
|
|
(10
|
)
|
|
|
-
|
|
|
|
18
|
|
Total
|
|
|
1,563
|
|
|
|
89
|
|
|
|
(33
|
)
|
|
|
(130
|
)
|
|
|
(17
|
)
|
|
|
1,472
|
|
(i) "Additions and contract
modifications" includes the effects arising from the acquisition of NLC in the amount of US$33.
(ii) Impairment loss related to
the NLC assets (note 12).
Lease liabilities are presented in note 19.
16. Financial
and capital risk management
a) Effects of derivatives on the balance sheet
Selected Notes to the Interim Financial
Statements
Expressed in millions of United States dollar, unless otherwise stated
|
|
|
|
Assets
|
|
|
|
September 30, 2021
|
|
|
December 31, 2020
|
|
|
|
Current
|
|
|
Non-current
|
|
|
Current
|
|
|
Non-current
|
|
Foreign exchange and interest rate risk
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IPCA swap
|
|
|
40
|
|
|
|
-
|
|
|
|
7
|
|
|
|
38
|
|
Eurobonds swap
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3
|
|
Pre-dollar swap and forward (NDF)
|
|
|
23
|
|
|
|
11
|
|
|
|
-
|
|
|
|
9
|
|
Libor swap
|
|
|
-
|
|
|
|
5
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
63
|
|
|
|
16
|
|
|
|
7
|
|
|
|
50
|
|
Commodities price risk
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base metals products
|
|
|
32
|
|
|
|
7
|
|
|
|
30
|
|
|
|
-
|
|
Gasoil, Brent and freight
|
|
|
50
|
|
|
|
-
|
|
|
|
97
|
|
|
|
-
|
|
|
|
|
82
|
|
|
|
7
|
|
|
|
127
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Others
|
|
|
-
|
|
|
|
12
|
|
|
|
-
|
|
|
|
16
|
|
|
|
|
-
|
|
|
|
12
|
|
|
|
-
|
|
|
|
16
|
|
Total
|
|
|
145
|
|
|
|
35
|
|
|
|
134
|
|
|
|
66
|
|
|
|
Liabilities
|
|
|
|
September 30, 2021
|
|
|
December 31, 2020
|
|
|
|
Current
|
|
|
Non-current
|
|
|
Current
|
|
|
Non-current
|
|
Foreign exchange and interest rate risk
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CDI & TJLP vs. US$ fixed and floating rate swap
|
|
|
171
|
|
|
|
477
|
|
|
|
111
|
|
|
|
525
|
|
IPCA swap
|
|
|
2
|
|
|
|
116
|
|
|
|
72
|
|
|
|
100
|
|
Eurobonds swap
|
|
|
-
|
|
|
|
-
|
|
|
|
4
|
|
|
|
-
|
|
Pre-dollar swap and forward (NDF)
|
|
|
60
|
|
|
|
37
|
|
|
|
63
|
|
|
|
58
|
|
Libor swap
|
|
|
2
|
|
|
|
-
|
|
|
|
1
|
|
|
|
6
|
|
|
|
|
235
|
|
|
|
630
|
|
|
|
251
|
|
|
|
689
|
|
Commodities price risk
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base metals products
|
|
|
29
|
|
|
|
-
|
|
|
|
46
|
|
|
|
-
|
|
Gasoil, Brent and freight
|
|
|
-
|
|
|
|
-
|
|
|
|
13
|
|
|
|
-
|
|
Thermal and coking coal
|
|
|
65
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
94
|
|
|
|
-
|
|
|
|
59
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Others
|
|
|
5
|
|
|
|
-
|
|
|
|
18
|
|
|
|
-
|
|
Total
|
|
|
334
|
|
|
|
630
|
|
|
|
328
|
|
|
|
689
|
|
a.i) Net exposure
|
|
September 30, 2021
|
|
|
December 31, 2020
|
|
Foreign exchange and interest rate risk
|
|
|
|
|
|
|
|
|
CDI & TJLP vs. US$ fixed and floating rate swap
|
|
|
(648
|
)
|
|
|
(636
|
)
|
IPCA swap
|
|
|
(78
|
)
|
|
|
(127
|
)
|
Eurobonds swap
|
|
|
-
|
|
|
|
(1
|
)
|
Pre-dollar swap and forward (NDF)
|
|
|
(63
|
)
|
|
|
(112
|
)
|
Libor swap (i)
|
|
|
3
|
|
|
|
(7
|
)
|
|
|
|
(786
|
)
|
|
|
(883
|
)
|
Commodities price risk
|
|
|
|
|
|
|
|
|
Base metals products
|
|
|
10
|
|
|
|
(16
|
)
|
Gasoil, Brent and freight
|
|
|
50
|
|
|
|
84
|
|
Thermal and coking coal
|
|
|
(65
|
)
|
|
|
-
|
|
|
|
|
(5
|
)
|
|
|
68
|
|
|
|
|
|
|
|
|
|
|
Others
|
|
|
7
|
|
|
|
(2
|
)
|
|
|
|
7
|
|
|
|
(2
|
)
|
Total
|
|
|
(784
|
)
|
|
|
(817
|
)
|
(i) In July 2017, the U.K. Financial
Conduct Authority (FCA), which regulates the London Interbank Offered Rate (‘‘LIBOR’’), announced the effective
discontinuation of LIBOR. After June 30, 2023, the FCA will no longer require panel banks to submit quotes for any U.S. dollar LIBOR
settings. The Company is currently evaluating the potential impact of the eventual replacement of the LIBOR interest rate.
Selected Notes to the Interim Financial
Statements
Expressed in millions of United States dollar, unless otherwise stated
|
|
a.ii) Effects
of derivatives on the income statement and cash flows
|
|
Gain (loss) recognized in the income statement
|
|
|
|
Three-month
period ended
September 30,
|
|
|
Nine-month
period ended
September 30,
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Foreign exchange and interest rate risk
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CDI & TJLP vs. US$ fixed and floating rate swap
|
|
|
(194
|
)
|
|
|
(54
|
)
|
|
|
(142
|
)
|
|
|
(919
|
)
|
IPCA swap
|
|
|
(42
|
)
|
|
|
(56
|
)
|
|
|
27
|
|
|
|
(312
|
)
|
Eurobonds swap
|
|
|
-
|
|
|
|
26
|
|
|
|
(28
|
)
|
|
|
(1
|
)
|
Pre-dollar swap and forward (NDF)
|
|
|
(238
|
)
|
|
|
(56
|
)
|
|
|
(32
|
)
|
|
|
(229
|
)
|
Libor swap
|
|
|
2
|
|
|
|
(5
|
)
|
|
|
9
|
|
|
|
(11
|
)
|
|
|
|
(472
|
)
|
|
|
(145
|
)
|
|
|
(166
|
)
|
|
|
(1,472
|
)
|
Commodities price risk
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base metals products
|
|
|
-
|
|
|
|
-
|
|
|
|
(2
|
)
|
|
|
-
|
|
Gasoil, Brent and freight
|
|
|
12
|
|
|
|
36
|
|
|
|
120
|
|
|
|
(213
|
)
|
|
|
|
12
|
|
|
|
36
|
|
|
|
118
|
|
|
|
(213
|
)
|
Others
|
|
|
2
|
|
|
|
(78
|
)
|
|
|
7
|
|
|
|
28
|
|
|
|
|
2
|
|
|
|
(78
|
)
|
|
|
7
|
|
|
|
28
|
|
Total
|
|
|
(458
|
)
|
|
|
(187
|
)
|
|
|
(41
|
)
|
|
|
(1,657
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial settlement inflows (outflows)
|
|
|
|
Three-month
period ended
September 30,
|
|
|
Nine-month
period ended
September 30,
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Foreign exchange and interest rate risk
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CDI & TJLP vs. US$ fixed and floating rate swap
|
|
|
(10
|
)
|
|
|
(63
|
)
|
|
|
(109
|
)
|
|
|
(114
|
)
|
IPCA swap
|
|
|
-
|
|
|
|
-
|
|
|
|
(18
|
)
|
|
|
-
|
|
Eurobonds swap
|
|
|
-
|
|
|
|
-
|
|
|
|
(29
|
)
|
|
|
(6
|
)
|
Pre-dollar swap and forward (NDF)
|
|
|
3
|
|
|
|
(33
|
)
|
|
|
(74
|
)
|
|
|
(46
|
)
|
Libor swap
|
|
|
-
|
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
|
(7
|
)
|
|
|
(96
|
)
|
|
|
(231
|
)
|
|
|
(166
|
)
|
Commodities price risk
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base metals products
|
|
|
(16
|
)
|
|
|
-
|
|
|
|
(24
|
)
|
|
|
-
|
|
Gasoil, Brent and freight
|
|
|
62
|
|
|
|
(35
|
)
|
|
|
154
|
|
|
|
(166
|
)
|
Thermal and coking coal
|
|
|
(17
|
)
|
|
|
-
|
|
|
|
(17
|
)
|
|
|
-
|
|
|
|
|
29
|
|
|
|
(35
|
)
|
|
|
113
|
|
|
|
(166
|
)
|
Others
|
|
|
-
|
|
|
|
1
|
|
|
|
1
|
|
|
|
361
|
|
|
|
|
-
|
|
|
|
1
|
|
|
|
1
|
|
|
|
361
|
|
Total
|
|
|
22
|
|
|
|
(130
|
)
|
|
|
(117
|
)
|
|
|
29
|
|
a.iii) Hedge accounting
|
|
Gain (loss) recognized in the other comprehensive income
|
|
|
|
Three-month period ended
September 30,
|
|
|
Nine-month period ended
September 30,
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Net investments hedge
|
|
|
(127
|
)
|
|
|
(81
|
)
|
|
|
(85
|
)
|
|
|
(720
|
)
|
Thermal and coking coal cash flow hedge
|
|
|
(12
|
)
|
|
|
-
|
|
|
|
(17
|
)
|
|
|
-
|
|
Cash flow hedge (Nickel and Palladium)
|
|
|
22
|
|
|
|
(56
|
)
|
|
|
1
|
|
|
|
(41
|
)
|
Net investment hedge:
In March 2021,
the Company redeemed all its euro bonds (note 19). As a result, the amount of debt designated as a hedge instrument for this investment
is US$2,258 as at September 30,2021.
Cash flow hedge
(Coking Coal):
To reduce the volatility of its cash flow as
a result of fluctuations in coking coal prices, in July 2021, the Company implemented a Coking Coal Revenue Hedge Program. Under
this program, hedge transactions were executed through forward contracts to protect a portion of the projected sales of this product
at fluctuating prices that is highly probable to occur. Hedge accounting treatment is being given to the program. The contracts are traded
over-the-counter and the cash settlement in/out results are offset by the protected items' loss/gain results due to coking coal price
variations.
Selected Notes to the Interim Financial Statements
Expressed in millions of United States dollar, unless otherwise stated
|
|
|
|
Notional
(ton)
|
|
|
|
|
|
Fair
value
|
|
Financial
settlement
Inflows
(Outflows)
|
|
Value
at Risk
|
|
Fair
value
by year
|
|
Flow
|
|
|
September
30, 2021
|
|
|
December
31, 2020
|
|
|
Bought
/
Sold
|
|
|
Average
strike (US$/t
oz)
|
|
|
September
30,
2021
|
|
|
December
31,
2020
|
|
|
September
30,
2021
|
|
|
September
30,
2021
|
|
|
2021
|
|
Coking Coal
Revenue Hedging Program
|
|
|
69,000
|
|
|
-
|
|
|
S
|
|
|
303
|
|
|
(2
|
)
|
|
-
|
|
|
(1
|
)
|
|
1
|
|
|
(2
|
)
|
Cash flow hedge
(Thermal Coal):
|
|
Notional
(ton)
|
|
|
|
|
|
Fair
value
|
|
Financial
settlement
Inflows
(Outflows)
|
|
Value
at Risk
|
|
Fair
value
by year
|
|
Flow
|
|
September
30,
2021
|
|
December
31,
2020
|
|
Bought
/
Sold
|
|
Average
strike (US$/t
oz)
|
|
September
30,
2021
|
|
December
31,
2020
|
|
September
30,
2021
|
|
September
30,
2021
|
|
2021
|
|
Thermal
Coal Revenue Hedging Program
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Castle
Forward
|
|
|
300,000
|
|
|
-
|
|
|
S
|
|
|
108
|
|
|
(32
|
)
|
|
-
|
|
|
(20
|
)
|
|
6
|
|
|
(32
|
)
|
API4 Forward
|
|
|
195,000
|
|
|
-
|
|
|
B
|
|
|
105
|
|
|
(19
|
)
|
|
-
|
|
|
(7
|
)
|
|
3
|
|
|
(19
|
)
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(51
|
)
|
|
-
|
|
|
(27
|
)
|
|
9
|
|
|
(51
|
)
|
Cash Flow Hedge
(Nickel):
|
|
Notional
(ton)
|
|
|
|
|
|
Fair
value
|
|
Financial
settlement
Inflows
(Outflows)
|
|
Value
at Risk
|
|
Fair
value
by year
|
|
Flow
|
|
September
30,
2021
|
|
December
31,
2020
|
|
Bought
/
Sold
|
|
Average
strike
(US$/ton)
|
|
September
30,
2021
|
|
December
31,
2020
|
|
September
30,
2021
|
|
September
30,
2021
|
|
2021
|
|
Nickel
Revenue Hedging Program (i)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Call options
|
|
|
15,330
|
|
|
58,620
|
|
|
S
|
|
|
17,505
|
|
|
(14
|
)
|
|
(46
|
)
|
|
(31
|
)
|
|
5
|
|
|
(14
|
)
|
Put
options
|
|
|
15,330
|
|
|
58,620
|
|
|
B
|
|
|
15,000
|
|
|
-
|
|
|
28
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(14
|
)
|
|
(18
|
)
|
|
(31
|
)
|
|
5
|
|
|
(14
|
)
|
(i) With the hedge structure, the company
ensures prices between US$15,000/t and US$17,505/t for the program’s sales volume.
Cash flow hedge
(Palladium):
|
|
Notional
(t oz)
|
|
|
|
|
|
Fair
value
|
|
Financial
settlement
Inflows
(Outflows)
|
|
Value
at Risk
|
|
Fair
value
by year
|
|
Flow
|
|
September
30,
2021
|
|
December
31,
2020
|
|
Bought
/
Sold
|
|
Average
strike (US$/t
oz)
|
|
September
30,
2021
|
|
December
31,
2020
|
|
September
30,
2021
|
|
September
30,
2021
|
|
2021
|
|
Palladium
Revenue Hedging Program
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Call Options
|
|
|
55,795
|
|
|
7,200
|
|
|
S
|
|
|
3,414
|
|
|
(1
|
)
|
|
(1
|
)
|
|
-
|
|
|
-
|
|
|
(1
|
)
|
Put
Options
|
|
|
55,795
|
|
|
7,200
|
|
|
B
|
|
|
2,412
|
|
|
34
|
|
|
-
|
|
|
1
|
|
|
4
|
|
|
34
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33
|
|
|
(1
|
)
|
|
1
|
|
|
4
|
|
|
33
|
|
Selected Notes to the Interim Financial Statements
Expressed in millions of United States dollar, unless otherwise stated
|
|
b) Protection programs for
the R$ and EUR denominated debt instruments and other liabilities
|
|
Notional
|
|
|
|
|
|
Fair
value
|
|
Financial
Settlement
Inflows
(Outflows)
|
|
Value
at Risk
|
|
Fair
value by year
|
|
Flow
|
|
September
30,
2021
|
|
December
31,
2020
|
|
Index
|
|
Average
rate
|
|
September
30,
2021
|
|
December
31,
2020
|
|
September
30,
2021
|
|
September
30,
2021
|
|
2021
|
|
2022
|
|
2023+
|
|
CDI vs.
US$ fixed rate swap
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(499
|
)
|
|
(473
|
)
|
|
(44
|
)
|
|
42
|
|
|
(22
|
)
|
|
(106
|
)
|
|
(372
|
)
|
Receivable
|
|
R$
|
8,545
|
|
|
R$
|
9,445
|
|
|
CDI
|
|
|
100.44
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payable
|
|
US$
|
2,003
|
|
|
US$
|
2,213
|
|
|
Fix
|
|
|
2.57
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TJLP
vs. US$ fixed rate swap
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(148
|
)
|
|
(163
|
)
|
|
(38
|
)
|
|
8
|
|
|
(15
|
)
|
|
(46
|
)
|
|
(87
|
)
|
Receivable
|
|
R$
|
1,331
|
|
|
R$
|
1,651
|
|
|
TJLP
+
|
|
|
1.11
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payable
|
|
US$
|
360
|
|
|
US$
|
460
|
|
|
Fix
|
|
|
3.14
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R$ fixed
rate vs. US$ fixed rate swap
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(65
|
)
|
|
(111
|
)
|
|
(82
|
)
|
|
24
|
|
|
(3
|
)
|
|
(53
|
)
|
|
(10
|
)
|
Receivable
|
|
R$
|
6,132
|
|
|
R$
|
2,512
|
|
|
Fix
|
|
|
3.72
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payable
|
|
US$
|
1,162
|
|
|
US$
|
621
|
|
|
Fix
|
|
|
-1.59
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IPCA
vs. US$ fixed rate swap
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(119
|
)
|
|
(173
|
)
|
|
(61
|
)
|
|
9
|
|
|
(1
|
)
|
|
(4
|
)
|
|
(114
|
)
|
Receivable
|
|
R$
|
1,563
|
|
|
R$
|
2,363
|
|
|
IPCA
+
|
|
|
4.54
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payable
|
|
US$
|
387
|
|
|
US$
|
622
|
|
|
Fix
|
|
|
3.88
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IPCA
vs. CDI swap
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40
|
|
|
45
|
|
|
7
|
|
|
-
|
|
|
-
|
|
|
40
|
|
|
-
|
|
Receivable
|
|
R$
|
744
|
|
|
R$
|
694
|
|
|
IPCA
+
|
|
|
6.63
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payable
|
|
R$
|
1,350
|
|
|
R$
|
550
|
|
|
CDI
|
|
|
9.88
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EUR fixed
rate vs. US$ fixed rate swap
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
(1
|
)
|
|
(29
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Receivable
|
|
-
|
|
|
EUR
|
500
|
|
|
Fix
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payable
|
|
-
|
|
|
US$
|
613
|
|
|
Fix
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward
|
|
R$
|
6,449
|
|
|
R$
|
916
|
|
|
B
|
|
|
4.34
|
|
|
2
|
|
|
(1
|
)
|
|
17
|
|
|
21
|
|
|
1
|
|
|
17
|
|
|
(15
|
)
|
c) Protection program for
Libor floating interest rate US$ denominated debt
|
|
Notional
|
|
|
|
|
|
|
Fair
value
|
|
Financial
Settlement
Inflows
(Outflows)
|
|
Value
at
Risk
|
|
Fair
value by year
|
|
Flow
|
|
September
30,
2021
|
|
December
31,
2020
|
|
Index
|
|
Average
rate
|
|
|
September
30,
2021
|
|
December
31,
2020
|
|
September
30,
2021
|
|
September
30,
2021
|
|
2021
|
|
2022
|
|
2023+
|
|
Libor vs. US$ fixed rate
swap
|
|
|
|
|
|
|
|
|
|
|
|
3
|
|
(7
|
)
|
(1
|
)
|
2
|
|
-
|
|
(1
|
)
|
4
|
|
Receivable
|
|
US$
|
950
|
|
US$
|
950
|
|
|
Libor
|
|
0.13
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payable
|
|
US$
|
950
|
|
US$
|
950
|
|
|
Fix
|
|
0.48
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
d) Protection program for
product prices and input costs
|
|
Notional
|
|
|
|
|
|
Fair
value
|
|
Financial
settlement
Inflows
(Outflows)
|
|
Value
at
Risk
|
|
Fair
value by
year
|
|
Flow
|
|
September
30, 2021
|
|
December
31, 2020
|
|
Bought
/
Sold
|
|
Average
strike
(US$/bbl)
|
|
September
30, 2021
|
|
December
31, 2020
|
|
September
30, 2021
|
|
September
30, 2021
|
|
2021+
|
|
Brent crude oil (bbl)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Call options
|
|
1,209,405
|
|
13,746,945
|
|
B
|
|
55
|
|
28
|
|
92
|
|
145
|
|
3
|
|
28
|
|
Put options
|
|
1,209,405
|
|
13,746,945
|
|
S
|
|
30
|
|
-
|
|
(12
|
)
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward Freight Agreement
(days)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freight forwards (days)
|
|
195
|
|
1,625
|
|
B
|
|
13,288
|
|
7
|
|
4
|
|
24
|
|
1
|
|
7
|
|
Selected Notes to the Interim Financial Statements
Expressed in millions of United States dollar, unless otherwise stated
|
|
e) Embedded derivatives in
contracts
|
|
Notional
|
|
|
|
|
|
Fair
value
|
|
Financial
settlement
Inflows
(Outflows)
|
|
Value
at Risk
|
|
Fair
value
|
|
Flow
|
|
September
30, 2021
|
|
December
31, 2020
|
|
Bought
/
Sold
|
|
Average
strike
|
|
September
30,
2021
|
|
December
31, 2020
|
|
September
30, 2021
|
|
September
30, 2021
|
|
2021+
|
|
Option related to a Special
Purpose Entity “SPE” (quantity)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Call option
|
|
137,751,623
|
|
137,751,623
|
|
B
|
|
3.10
|
|
12
|
|
18
|
|
-
|
|
2
|
|
12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Embedded derivatives in
contracts for the sale of part of its shareholding (quantity)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Put option
|
|
1,105,070,863
|
|
1,105,070,863
|
|
S
|
|
4.47
|
|
(1
|
)
|
(19
|
)
|
-
|
|
1
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Embedded Derivative in natural
gas purchase agreement (volume/month)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Call options
|
|
729,571
|
|
746,667
|
|
S
|
|
233
|
|
(4
|
)
|
-
|
|
(2
|
)
|
2
|
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedge program for finished
products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nickel forwards
|
|
634
|
|
-
|
|
S
|
|
19,139
|
|
1
|
|
-
|
|
-
|
|
1
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed prices
sales protection
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nickel forwards
|
|
360
|
|
-
|
|
B
|
|
16,277
|
|
1
|
|
-
|
|
2
|
|
-
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Embedded in
raw material purchase contract (ton)
|
|
|
|
|
|
|
|
|
|
|
|
|
Nickel forwards
|
|
573
|
|
1,979
|
|
S
|
|
19,271
|
|
-
|
|
2
|
|
-
|
|
-
|
|
-
|
|
Copper forwards
|
|
450
|
|
976
|
|
S
|
|
9,361
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
f) Sensitivity analysis of
derivative financial instruments
The following tables present the potential value
of the instruments given hypothetical stress scenarios for the main market risk factors that impact the derivatives positions. The scenarios
were defined as follows:
- Probable: the probable scenario was defined
as the fair value of the derivative instruments as at September 30, 2021
- Scenario I: fair value estimated considering
a 25% deterioration in the associated risk variables
- Scenario II: fair value estimated considering
a 50% deterioration in the associated risk variables
Selected Notes to the Interim Financial Statements
Expressed in millions of United States dollar, unless otherwise stated
|
|
Instrument
|
|
Instrument's main risk events
|
|
Probable
|
|
|
Scenario I
|
|
|
Scenario II
|
|
CDI vs. US$ fixed rate swap
|
|
R$ depreciation
|
|
|
(499
|
)
|
|
|
(1,016
|
)
|
|
|
(1,532
|
)
|
|
|
US$ interest rate inside Brazil decrease
|
|
|
(499
|
)
|
|
|
(525
|
)
|
|
|
(551
|
)
|
|
|
Brazilian interest rate increase
|
|
|
(499
|
)
|
|
|
(538
|
)
|
|
|
(578
|
)
|
Protected item: R$ denominated liabilities
|
|
R$ depreciation
|
|
|
n.a.
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TJLP vs. US$ fixed rate swap
|
|
R$ depreciation
|
|
|
(148
|
)
|
|
|
(243
|
)
|
|
|
(338
|
)
|
|
|
US$ interest rate inside Brazil decrease
|
|
|
(148
|
)
|
|
|
(151
|
)
|
|
|
(153
|
)
|
|
|
Brazilian interest rate increase
|
|
|
(148
|
)
|
|
|
(159
|
)
|
|
|
(169
|
)
|
|
|
TJLP interest rate decrease
|
|
|
(148
|
)
|
|
|
(154
|
)
|
|
|
(161
|
)
|
Protected item: R$ denominated debt
|
|
R$ depreciation
|
|
|
n.a.
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R$ fixed rate vs. US$ fixed rate swap
|
|
R$ depreciation
|
|
|
(65
|
)
|
|
|
(350
|
)
|
|
|
(634
|
)
|
|
|
US$ interest rate inside Brazil decrease
|
|
|
(65
|
)
|
|
|
(71
|
)
|
|
|
(77
|
)
|
|
|
Brazilian interest rate increase
|
|
|
(65
|
)
|
|
|
(107
|
)
|
|
|
(146
|
)
|
Protected item: R$ denominated debt
|
|
R$ depreciation
|
|
|
n.a.
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IPCA vs. US$ fixed rate swap
|
|
R$ depreciation
|
|
|
(119
|
)
|
|
|
(223
|
)
|
|
|
(328
|
)
|
|
|
US$ interest rate inside Brazil decrease
|
|
|
(119
|
)
|
|
|
(124
|
)
|
|
|
(129
|
)
|
|
|
Brazilian interest rate increase
|
|
|
(119
|
)
|
|
|
(138
|
)
|
|
|
(156
|
)
|
|
|
IPCA index decrease
|
|
|
(119
|
)
|
|
|
(130
|
)
|
|
|
(141
|
)
|
Protected item: R$ denominated debt
|
|
R$ depreciation
|
|
|
n.a.
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IPCA vs. CDI swap
|
|
Brazilian interest rate increase
|
|
|
40
|
|
|
|
38
|
|
|
|
35
|
|
|
|
IPCA index decrease
|
|
|
40
|
|
|
|
39
|
|
|
|
37
|
|
Protected item: R$ denominated debt linked to IPCA
|
|
IPCA index decrease
|
|
|
n.a.
|
|
|
|
(39
|
)
|
|
|
(37
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
US$ floating rate vs. US$ fixed rate swap
|
|
US$ Libor decrease
|
|
|
3
|
|
|
|
(2
|
)
|
|
|
(8
|
)
|
Protected item: Libor US$ indexed debt
|
|
US$ Libor decrease
|
|
|
n.a.
|
|
|
|
2
|
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NDF BRL/USD
|
|
R$ depreciation
|
|
|
2
|
|
|
|
(262
|
)
|
|
|
(527
|
)
|
|
|
US$ interest rate inside Brazil decrease
|
|
|
2
|
|
|
|
(1
|
)
|
|
|
(5
|
)
|
|
|
Brazilian interest rate increase
|
|
|
2
|
|
|
|
(25
|
)
|
|
|
(51
|
)
|
Protected item: R$ denominated liabilities
|
|
R$ depreciation
|
|
|
n.a.
|
|
|
|
-
|
|
|
|
-
|
|
Selected Notes to the Interim Financial Statements
Expressed in millions of United States dollar, unless otherwise stated
|
|
Instrument
|
|
Instrument's main risk events
|
|
Probable
|
|
|
Scenario I
|
|
|
Scenario II
|
|
Fuel oil protection
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options
|
|
Price input decrease
|
|
|
28
|
|
|
|
14
|
|
|
|
11
|
|
Protected item: Part of costs linked to fuel oil prices
|
|
Price input decrease
|
|
|
n.a.
|
|
|
|
(14
|
)
|
|
|
(11
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward Freight Agreement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forwards
|
|
Freight price decrease
|
|
|
7
|
|
|
|
5
|
|
|
|
2
|
|
Protected item: Part of costs linked to maritime freight prices
|
|
Freight price decrease
|
|
|
n.a.
|
|
|
|
(5
|
)
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nickel sales fixed price protection
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forwards
|
|
Nickel price decrease
|
|
|
1
|
|
|
|
(1
|
)
|
|
|
(3
|
)
|
Protected item: Part of nickel revenues with fixed prices
|
|
Nickel price decrease
|
|
|
n.a.
|
|
|
|
1
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedge program for products acquisition for resale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forwards
|
|
Nickel price increase
|
|
|
1
|
|
|
|
-
|
|
|
|
(1
|
)
|
Protected item: Part of revenues from products resale
|
|
Nickel price increase
|
|
|
n.a.
|
|
|
|
-
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nickel Revenue Hedging Program
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options
|
|
Nickel price increase
|
|
|
(14
|
)
|
|
|
(77
|
)
|
|
|
(146
|
)
|
Protected item: Part of nickel future revenues
|
|
Nickel price increase
|
|
|
n.a.
|
|
|
|
77
|
|
|
|
146
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Palladium Revenue Hedging Program
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options
|
|
Palladium price increase
|
|
|
33
|
|
|
|
13
|
|
|
|
(2
|
)
|
Protected item: Part of palladium future revenues
|
|
Palladium price increase
|
|
|
n.a.
|
|
|
|
(13
|
)
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thermal Coal Revenue Hedging Program
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forwards
|
|
Thermal coal price increase
|
|
|
(51
|
)
|
|
|
(77
|
)
|
|
|
(103
|
)
|
Protected item: Part of thermal coal future revenues
|
|
Thermal coal price increase
|
|
|
n.a.
|
|
|
|
77
|
|
|
|
103
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Coking Coal Revenue Hedging Program
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forwards
|
|
Coking coal price increase
|
|
|
(2
|
)
|
|
|
(8
|
)
|
|
|
(14
|
)
|
Protected item: Part of coking coal future revenues
|
|
Coking coal price increase
|
|
|
n.a.
|
|
|
|
8
|
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option - SPCs
|
|
SPCs stock value decrease
|
|
|
12
|
|
|
|
5
|
|
|
|
2
|
|
Instrument
|
|
Main risks
|
|
Probable
|
|
|
Scenario I
|
|
|
Scenario II
|
|
Embedded derivatives - Raw material purchase (nickel)
|
|
Nickel price increase
|
|
|
-
|
|
|
|
(3
|
)
|
|
|
(6
|
)
|
Embedded derivatives - Raw material purchase (copper)
|
|
Copper price increase
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
(2
|
)
|
Embedded derivatives - Gas purchase
|
|
Pellet price increase
|
|
|
(4
|
)
|
|
|
(8
|
)
|
|
|
(11
|
)
|
Embedded derivatives - Guaranteed minimum return
|
|
Stock value decrease
|
|
|
(1
|
)
|
|
|
(43
|
)
|
|
|
(280
|
)
|
g) Financial counterparties’
credit risk ratings
The table below presents the credit risk ratings
published by Moody’s regarding the main financial institutions that we hire derivative instruments, cash and cash equivalents transactions.
Selected Notes to the Interim Financial Statements
Expressed in millions of United States dollar, unless otherwise stated
|
|
|
|
Consolidated
|
|
|
|
September 30, 2021
|
|
|
December 31, 2020
|
|
|
|
Cash and cash equivalents and
short-term investment
|
|
|
Derivatives
|
|
|
Cash and cash equivalents
and short-term investment
|
|
|
Derivatives
|
|
Aa1
|
|
|
101
|
|
|
|
-
|
|
|
|
2,210
|
|
|
|
36
|
|
Aa2
|
|
|
207
|
|
|
|
21
|
|
|
|
363
|
|
|
|
15
|
|
Aa3
|
|
|
251
|
|
|
|
33
|
|
|
|
1,681
|
|
|
|
41
|
|
A1
|
|
|
1,029
|
|
|
|
6
|
|
|
|
2,812
|
|
|
|
21
|
|
A2
|
|
|
3,945
|
|
|
|
40
|
|
|
|
4
|
|
|
|
20
|
|
A3
|
|
|
1,259
|
|
|
|
32
|
|
|
|
5
|
|
|
|
36
|
|
Baa1
|
|
|
-
|
|
|
|
-
|
|
|
|
4
|
|
|
|
-
|
|
Baa2
|
|
|
12
|
|
|
|
-
|
|
|
|
1
|
|
|
|
-
|
|
Ba1
|
|
|
-
|
|
|
|
3
|
|
|
|
2,986
|
|
|
|
-
|
|
Ba2
|
|
|
3,037
|
|
|
|
6
|
|
|
|
4,189
|
|
|
|
6
|
|
Ba3
|
|
|
1,524
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Others
|
|
|
13
|
|
|
|
39
|
|
|
|
3
|
|
|
|
25
|
|
|
|
|
11,378
|
|
|
|
180
|
|
|
|
14,258
|
|
|
|
200
|
|
17. Financial
assets and liabilities
a) Financial instruments classification
|
|
September 30,
2021
|
|
|
December 31,
2020
|
|
Financial
assets
|
|
Amortized
cost
|
|
|
At
fair value
through OCI
|
|
|
At
fair value
through
profit or loss
|
|
|
Total
|
|
|
Amortized
cost
|
|
|
At
fair value
through OCI
|
|
|
At
fair value
through
profit or loss
|
|
|
Total
|
|
Current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
(note 19)
|
|
|
10,857
|
|
|
|
-
|
|
|
|
-
|
|
|
|
10,857
|
|
|
|
13,487
|
|
|
|
-
|
|
|
|
-
|
|
|
|
13,487
|
|
Short-term investments (note 19)
|
|
|
-
|
|
|
|
-
|
|
|
|
521
|
|
|
|
521
|
|
|
|
-
|
|
|
|
-
|
|
|
|
771
|
|
|
|
771
|
|
Derivative financial instruments
(note 16)
|
|
|
-
|
|
|
|
-
|
|
|
|
145
|
|
|
|
145
|
|
|
|
-
|
|
|
|
-
|
|
|
|
134
|
|
|
|
134
|
|
Accounts receivable (note 9)
|
|
|
1,183
|
|
|
|
-
|
|
|
|
(310
|
)
|
|
|
873
|
|
|
|
1,514
|
|
|
|
-
|
|
|
|
3,479
|
|
|
|
4,993
|
|
Investments in equity securities
|
|
|
-
|
|
|
|
1,221
|
|
|
|
-
|
|
|
|
1,221
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Related parties (note 26)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
195
|
|
|
|
-
|
|
|
|
-
|
|
|
|
195
|
|
|
|
|
12,040
|
|
|
|
1,221
|
|
|
|
356
|
|
|
|
13,617
|
|
|
|
15,196
|
|
|
|
-
|
|
|
|
4,384
|
|
|
|
19,580
|
|
Non-current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Judicial deposits (note 23)
|
|
|
1,221
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,221
|
|
|
|
1,268
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,268
|
|
Restricted cash
|
|
|
121
|
|
|
|
-
|
|
|
|
-
|
|
|
|
121
|
|
|
|
38
|
|
|
|
-
|
|
|
|
-
|
|
|
|
38
|
|
Derivative financial instruments
(note 16)
|
|
|
-
|
|
|
|
-
|
|
|
|
35
|
|
|
|
35
|
|
|
|
-
|
|
|
|
-
|
|
|
|
66
|
|
|
|
66
|
|
Investments in equity securities
|
|
|
-
|
|
|
|
6
|
|
|
|
-
|
|
|
|
6
|
|
|
|
-
|
|
|
|
757
|
|
|
|
-
|
|
|
|
757
|
|
Related parties (note 26)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
923
|
|
|
|
-
|
|
|
|
-
|
|
|
|
923
|
|
|
|
|
1,342
|
|
|
|
6
|
|
|
|
35
|
|
|
|
1,383
|
|
|
|
2,229
|
|
|
|
757
|
|
|
|
66
|
|
|
|
3,052
|
|
Total of financial assets
|
|
|
13,382
|
|
|
|
1,227
|
|
|
|
391
|
|
|
|
15,000
|
|
|
|
17,425
|
|
|
|
757
|
|
|
|
4,450
|
|
|
|
22,632
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Suppliers and contractors
|
|
|
4,096
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4,096
|
|
|
|
3,367
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,367
|
|
Derivative financial instruments
(note 16)
|
|
|
-
|
|
|
|
-
|
|
|
|
334
|
|
|
|
334
|
|
|
|
-
|
|
|
|
-
|
|
|
|
328
|
|
|
|
328
|
|
Loans, borrowings and leases (note
19)
|
|
|
1,345
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,345
|
|
|
|
1,136
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,136
|
|
Dividends payable
|
|
|
35
|
|
|
|
-
|
|
|
|
-
|
|
|
|
35
|
|
|
|
1,220
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,220
|
|
Liabilities related to the concession
grant (note 14)
|
|
|
392
|
|
|
|
-
|
|
|
|
-
|
|
|
|
392
|
|
|
|
209
|
|
|
|
-
|
|
|
|
-
|
|
|
|
209
|
|
Related parties (note 26)
|
|
|
132
|
|
|
|
-
|
|
|
|
-
|
|
|
|
132
|
|
|
|
725
|
|
|
|
-
|
|
|
|
-
|
|
|
|
725
|
|
Other financial liabilities (note
11)
|
|
|
699
|
|
|
|
-
|
|
|
|
-
|
|
|
|
699
|
|
|
|
644
|
|
|
|
|
|
|
|
|
|
|
|
644
|
|
|
|
|
6,699
|
|
|
|
-
|
|
|
|
334
|
|
|
|
7,033
|
|
|
|
7,301
|
|
|
|
-
|
|
|
|
328
|
|
|
|
7,629
|
|
Non-current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments
(note 16)
|
|
|
-
|
|
|
|
-
|
|
|
|
630
|
|
|
|
630
|
|
|
|
-
|
|
|
|
-
|
|
|
|
689
|
|
|
|
689
|
|
Loans, borrowings and leases (note
19)
|
|
|
12,240
|
|
|
|
-
|
|
|
|
-
|
|
|
|
12,240
|
|
|
|
13,891
|
|
|
|
-
|
|
|
|
-
|
|
|
|
13,891
|
|
Related parties (note 26)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
895
|
|
|
|
-
|
|
|
|
-
|
|
|
|
895
|
|
Participative stockholders' debentures
(note 18)
|
|
|
-
|
|
|
|
-
|
|
|
|
4,128
|
|
|
|
4,128
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,413
|
|
|
|
3,413
|
|
Liabilities related to the concession
grant (note 14)
|
|
|
1,657
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,657
|
|
|
|
2,103
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,103
|
|
Financial guarantees (note 13)
|
|
|
-
|
|
|
|
-
|
|
|
|
538
|
|
|
|
538
|
|
|
|
-
|
|
|
|
-
|
|
|
|
877
|
|
|
|
877
|
|
|
|
|
13,897
|
|
|
|
-
|
|
|
|
5,296
|
|
|
|
19,193
|
|
|
|
16,889
|
|
|
|
-
|
|
|
|
4,979
|
|
|
|
21,868
|
|
Total of financial liabilities
|
|
|
20,596
|
|
|
|
-
|
|
|
|
5,630
|
|
|
|
26,226
|
|
|
|
24,190
|
|
|
|
-
|
|
|
|
5,307
|
|
|
|
29,497
|
|
Selected
Notes to the Interim Financial Statements
Expressed
in millions of United States dollar, unless otherwise stated
|
|
b)
Hierarchy of fair value
|
|
September 30,
2021
|
|
|
December 31,
2020
|
|
|
|
Level
1
|
|
|
Level
2
|
|
|
Level
3
|
|
|
Total
|
|
|
Level
1
|
|
|
Level
2
|
|
|
Level
3
|
|
|
Total
|
|
Financial
assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term
investments
|
|
|
521
|
|
|
|
-
|
|
|
|
-
|
|
|
|
521
|
|
|
|
771
|
|
|
|
-
|
|
|
|
-
|
|
|
|
771
|
|
Derivative
financial instruments
|
|
|
-
|
|
|
|
168
|
|
|
|
12
|
|
|
|
180
|
|
|
|
-
|
|
|
|
182
|
|
|
|
18
|
|
|
|
200
|
|
Accounts
receivable
|
|
|
-
|
|
|
|
(310
|
)
|
|
|
-
|
|
|
|
(310
|
)
|
|
|
-
|
|
|
|
3,479
|
|
|
|
-
|
|
|
|
3,479
|
|
Investments
in equity securities
|
|
|
1,227
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,227
|
|
|
|
757
|
|
|
|
-
|
|
|
|
-
|
|
|
|
757
|
|
Total
|
|
|
1,748
|
|
|
|
(142
|
)
|
|
|
12
|
|
|
|
1,618
|
|
|
|
1,528
|
|
|
|
3,661
|
|
|
|
18
|
|
|
|
5,207
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial
liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative
financial instruments
|
|
|
-
|
|
|
|
963
|
|
|
|
1
|
|
|
|
964
|
|
|
|
-
|
|
|
|
998
|
|
|
|
19
|
|
|
|
1,017
|
|
Participative
stockholders' debentures
|
|
|
-
|
|
|
|
4,128
|
|
|
|
-
|
|
|
|
4,128
|
|
|
|
-
|
|
|
|
3,413
|
|
|
|
-
|
|
|
|
3,413
|
|
Financial
guarantees
|
|
|
-
|
|
|
|
538
|
|
|
|
-
|
|
|
|
538
|
|
|
|
-
|
|
|
|
877
|
|
|
|
-
|
|
|
|
877
|
|
Total
|
|
|
-
|
|
|
|
5,629
|
|
|
|
1
|
|
|
|
5,630
|
|
|
|
-
|
|
|
|
5,288
|
|
|
|
19
|
|
|
|
5,307
|
|
There
were no transfers between levels 1, 2 and 3 of the fair value hierarchy during the nine-month period ended September 30, 2021.
b.i)
Changes in Level 3 assets and liabilities during the period
|
|
Derivative
financial instruments
|
|
|
|
Financial
assets
|
|
|
Financial
liabilities
|
|
Balance
at December 31, 2020
|
|
|
18
|
|
|
|
19
|
|
Gain
and losses recognized in income statement
|
|
|
(6
|
)
|
|
|
(17
|
)
|
Translation
adjustments
|
|
|
-
|
|
|
|
(1
|
)
|
Balance
at September 30, 2021
|
|
|
12
|
|
|
|
1
|
|
Selected
Notes to the Interim Financial Statements
Expressed
in millions of United States dollar, unless otherwise stated
|
|
c)
Fair value of loans and financing
|
|
September 30,
2021
|
|
|
December 31,
2020
|
|
|
|
Carrying
amount
|
|
|
Fair
value
|
|
|
Carrying
amount
|
|
|
Fair
value
|
|
Quoted
in the secondary market:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonds
|
|
|
7,448
|
|
|
|
9,343
|
|
|
|
7,448
|
|
|
|
10,025
|
|
Eurobonds
|
|
|
-
|
|
|
|
-
|
|
|
|
920
|
|
|
|
985
|
|
Debentures
|
|
|
399
|
|
|
|
408
|
|
|
|
496
|
|
|
|
496
|
|
Debt
contracts in Brazil in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R$,
indexed to TJLP, TR, IPCA, IGP-M and CDI
|
|
|
394
|
|
|
|
396
|
|
|
|
860
|
|
|
|
857
|
|
R$,
with fixed interest
|
|
|
18
|
|
|
|
18
|
|
|
|
34
|
|
|
|
35
|
|
Basket
of currencies and bonds in US$ indexed to LIBOR
|
|
|
22
|
|
|
|
54
|
|
|
|
56
|
|
|
|
56
|
|
Debt
contracts in the international market in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
US$,
with variable and fixed interest
|
|
|
3,335
|
|
|
|
3,290
|
|
|
|
3,225
|
|
|
|
3,278
|
|
Other
currencies, with variable interest
|
|
|
89
|
|
|
|
11
|
|
|
|
-
|
|
|
|
-
|
|
Other
currencies, with fixed interest
|
|
|
108
|
|
|
|
119
|
|
|
|
120
|
|
|
|
134
|
|
Total
|
|
|
11,813
|
|
|
|
13,639
|
|
|
|
13,159
|
|
|
|
15,866
|
|
Due
to the short-term cycle, the fair value of cash and cash equivalents balances, financial investments, accounts receivable and accounts
payable approximate their book values.
|
18.
|
Participative
stockholders’ debentures
|
At
the time of its privatization in 1997, the Company issued a total of 388,559,056 debentures to then-existing stockholders, including
the Brazilian Government. The debentures’ terms were set to ensure that pre-privatization stockholders would participate in potential
future benefits that might be obtained from exploration of mineral resources. This obligation will cease when all the relevant mineral
resources are exhausted, sold or otherwise disposed of by the Company.
Holders
of participative stockholders’ debentures have the right to receive semi-annual payments equal to an agreed percentage of revenues
less value-added tax, transport fee and insurance expenses related to the trading of the products, derived from these mineral resources.
On October 1, 2021 (subsequent event), the Company made available for withdrawal as remuneration the amount of US$236 (R$1,244 million)
for the first semester of 2021, as disclosed on the “Shareholders’ debentures report” made available on the Company’s
website.
To
calculate the fair value of the liability, the Company uses the weighted average price of trades in the secondary market for the last
month of the quarter. The average price increased from R$45.65 per debenture for the year ended December 31, 2020 to R$57.78 per
debenture for the period ended September 30, 2021 (R$36.76 for the period ended September 30, 2020), resulting in an expense
of US$1,109 (R$5,886 million) recorded in the income statement for the nine-month period ended September 30, 2021 (US$833 (R$4,341
million) for the nine-month period ended September 30, 2020), respectively. As at September 30, 2021 the liability was US$4,128
(R$22,452 million) (US$3,413 (R$17,737 million) as at December 2020).
The
average price decreased from R$60.34 per debenture for the period ended June 30, 2021 to R$57.78 per debenture for the period ended
September 30, 2021 (R$29.04 for the period ended June 30, 2020), resulting in a gain of US$152 (R$825 million) recorded in
the income statement for the three-month period ended September 30, 2021 (US$553 (R$3,002 million) for the three-month period ended
September 30, 2020).
|
19.
|
Loans,
borrowings, leases, cash and cash equivalents and short-term investments
|
|
|
September 30,
2021
|
|
|
December 31,
2020
|
|
Debt
contracts (d.i)
|
|
|
11,951
|
|
|
|
13,360
|
|
Leases
(d.ii)
|
|
|
1,634
|
|
|
|
1,667
|
|
Total
of loans, borrowings and leases
|
|
|
13,585
|
|
|
|
15,027
|
|
|
|
|
|
|
|
|
|
|
(-)
Cash and cash equivalents
|
|
|
10,857
|
|
|
|
13,487
|
|
(-)
Short-term investments
|
|
|
521
|
|
|
|
771
|
|
Net
debt
|
|
|
2,207
|
|
|
|
769
|
|
Selected
Notes to the Interim Financial Statements
Expressed
in millions of United States dollar, unless otherwise stated
|
|
|
b)
|
Cash
and cash equivalents
|
Cash
and cash equivalents include cash, immediately redeemable deposits and short-term investments with an insignificant risk of change in
value. They are readily convertible to cash, being US$5,061 (US$2,849 as at December 31, 2020) denominated in R$, indexed to the
CDI, US$5,523 (US$10,195 as at December 31, 2020) denominated in US$ and US$273 (US$443 as at December 31, 2020) denominated
in other currencies as at September 30, 2021.
|
c)
|
Short-term
investments
|
At
September 30, 2021, the balance of US$521 (US$771 as at December 31, 2020) is substantially comprised of investments in an
exclusive investment fund immediately liquid, whose portfolio is composed of committed transactions and Brazilian Financial Treasury
Bills (“LFTs”), which are floating-rate securities issued by the Brazilian government.
|
d)
|
Loans,
borrowings and leases
|
d.i)
Total debt
|
|
|
|
|
Current
liabilities
|
|
|
Non-current
liabilities
|
|
|
|
Average
interest
rate (i)
|
|
|
September 30,
2021
|
|
|
December 31,
2020
|
|
|
September 30,
2021
|
|
|
December 31,
2020
|
|
Quoted
in the secondary market:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
US$,
Bonds
|
|
|
6.02
|
%
|
|
|
-
|
|
|
|
-
|
|
|
|
7,448
|
|
|
|
7,448
|
|
Eurobonds
|
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
920
|
|
R$,
Debentures (ii)
|
|
|
10.48
|
%
|
|
|
184
|
|
|
|
107
|
|
|
|
215
|
|
|
|
389
|
|
Debt
contracts in Brazil in (ii):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R$,
indexed to TJLP, TR, IPCA, IGP-M and CDI
|
|
|
10.17
|
%
|
|
|
117
|
|
|
|
320
|
|
|
|
277
|
|
|
|
540
|
|
R$,
with fixed interest
|
|
|
2.74
|
%
|
|
|
16
|
|
|
|
20
|
|
|
|
2
|
|
|
|
14
|
|
Basket
of currencies and bonds in US$ indexed to LIBOR
|
|
|
2.32
|
%
|
|
|
22
|
|
|
|
45
|
|
|
|
-
|
|
|
|
11
|
|
Debt
contracts in the international market in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
US$,
with variable and fixed interest
|
|
|
2.23
|
%
|
|
|
625
|
|
|
|
182
|
|
|
|
2,710
|
|
|
|
3,044
|
|
Other
currencies, with variable interest
|
|
|
4.09
|
%
|
|
|
79
|
|
|
|
-
|
|
|
|
10
|
|
|
|
-
|
|
Other
currencies, with fixed interest
|
|
|
3.36
|
%
|
|
|
12
|
|
|
|
12
|
|
|
|
96
|
|
|
|
107
|
|
Debts
contracts
|
|
|
|
|
|
|
1,055
|
|
|
|
686
|
|
|
|
10,758
|
|
|
|
12,473
|
|
Accrued
charges
|
|
|
|
|
|
|
138
|
|
|
|
201
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
1,193
|
|
|
|
887
|
|
|
|
10,758
|
|
|
|
12,473
|
|
(i) In
order to determine the average interest rate for debt contracts with floating rates, the Company used the rate applicable as at September 30,
2021.
(ii) The
Company entered into derivative transactions to mitigate the exposure to the cash flow variations of all floating rate debt contracted
in Brazil, resulting in an average cost of 2,93% per year in US$.
Future
flows of debt payments, principal and interest
|
|
|
Principal
|
|
|
Estimated
future
interest
payments (i)
|
|
2021
|
|
|
|
57
|
|
|
|
128
|
|
2022
|
|
|
|
1,076
|
|
|
|
587
|
|
2023
|
|
|
|
440
|
|
|
|
551
|
|
2024
|
|
|
|
2,006
|
|
|
|
534
|
|
Between
2025 and 2029
|
|
|
|
2,117
|
|
|
|
1,005
|
|
2030
onwards
|
|
|
|
6,117
|
|
|
|
3,639
|
|
Total
|
|
|
|
11,813
|
|
|
|
6,444
|
|
(i) Based
on interest rate curves and foreign exchange rates applicable as at September 30, 2021 and considering that the payments of principal
will be made on their contracted payments dates. The amount includes the estimated interest not yet accrued and the interest already
recognized in the interim financial statements.
Credit
and financing lines
The
Company has two revolving credit facilities to assist the short-term liquidity management and to enable more efficiency in cash management
in the available amount of US$5,000, of which US$2,000 will mature in 2022 and US$3,000 in 2024. As at September 30, 2021, these
lines are undrawn.
Selected
Notes to the Interim Financial Statements
Expressed
in millions of United States dollar, unless otherwise stated
|
|
Funding
and payments
In
January 2021, the Company contracted the credit line US$300 with The New Development Bank maturing at 2035 and indexed to Libor
+ 2,49% per year.
In
March 2021, the Company redeemed all of its 3.750% bonds due January 2023, in the total amount of US$884 (EUR750 million)
and for it paid a premium of US$63, which was recorded as “Expenses with cash tender offer redemption” under the
financial results for nine-month period ended September 30,2021. The remaining amount paid were made in connection with the
schedule of disbursements in accordance with the terms of the contracted debts.
Covenants
Some
of the Company’s debt agreements with lenders contain financial covenants. The primary financial covenants in those agreements
require maintaining certain ratios, such as debt to EBITDA (as defined in note 4(a)) and interest coverage. The Company has not identified
any instances of noncompliance as at September 30, 2021.
Reconciliation
of debt to cash flows
|
|
Quoted
in the
secondary market
|
|
|
Debt
contracts in Brazil
|
|
|
Debt
contracts on the
international market
|
|
|
Total
|
|
December 31,
2020
|
|
|
9,046
|
|
|
|
959
|
|
|
|
3,355
|
|
|
|
13,360
|
|
Additions
|
|
|
-
|
|
|
|
-
|
|
|
|
300
|
|
|
|
300
|
|
Payments
(i)
|
|
|
(922
|
)
|
|
|
(317
|
)
|
|
|
(284
|
)
|
|
|
(1,523
|
)
|
Interest
paid (ii)
|
|
|
(395
|
)
|
|
|
(103
|
)
|
|
|
(101
|
)
|
|
|
(599
|
)
|
Effect
on cash flow
|
|
|
(1,317
|
)
|
|
|
(420
|
)
|
|
|
(85
|
)
|
|
|
(1,822
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect
of exchange rate
|
|
|
(82
|
)
|
|
|
(188
|
)
|
|
|
192
|
|
|
|
(78
|
)
|
Interest
accretion
|
|
|
324
|
|
|
|
84
|
|
|
|
83
|
|
|
|
491
|
|
Non-cash
changes
|
|
|
242
|
|
|
|
(104
|
)
|
|
|
275
|
|
|
|
413
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2021
|
|
|
7,971
|
|
|
|
435
|
|
|
|
3,545
|
|
|
|
11,951
|
|
(i) Includes
expenses with the redemption in the amount of US$63.
(ii) Classified
as cash flows arising from operating activities.
d.ii)
Lease liabilities
|
|
December 31,
2020
|
|
|
Additions
and contract
modifications
|
|
|
Payments
(i)
|
|
|
Interest
(ii)
|
|
|
Translation
adjustment
|
|
|
September 30,
2021
|
|
Ports
|
|
|
743
|
|
|
|
-
|
|
|
|
(62
|
)
|
|
|
21
|
|
|
|
(9
|
)
|
|
|
693
|
|
Vessels
|
|
|
533
|
|
|
|
-
|
|
|
|
(48
|
)
|
|
|
16
|
|
|
|
-
|
|
|
|
501
|
|
Pellets
plants
|
|
|
137
|
|
|
|
37
|
|
|
|
(8
|
)
|
|
|
5
|
|
|
|
(7
|
)
|
|
|
164
|
|
Properties
|
|
|
142
|
|
|
|
3
|
|
|
|
(27
|
)
|
|
|
3
|
|
|
|
(10
|
)
|
|
|
111
|
|
Energy
plants
|
|
|
62
|
|
|
|
-
|
|
|
|
(5
|
)
|
|
|
4
|
|
|
|
-
|
|
|
|
61
|
|
Mining
equipment and locomotives (iii)
|
|
|
50
|
|
|
|
69
|
|
|
|
(12
|
)
|
|
|
2
|
|
|
|
(5
|
)
|
|
|
104
|
|
Total
|
|
|
1,667
|
|
|
|
109
|
|
|
|
(162
|
)
|
|
|
51
|
|
|
|
(31
|
)
|
|
|
1,634
|
|
(i) The
total amount of the variable lease payments not included in the measurement of lease liabilities, which have been recognized straight
to the income statement, for the three and nine-month periods ended September 30, 2021 was US$166 and US$277 (US$10 and US$48 for
the three and nine-month periods ended September 30, 2020), respectively.
(ii) The
interest accretion recognized in the income statement is disclosed in note 6.
(iii) "Additions
and contract modifications" includes the effect of US$53 due to the NLC acquisition (note 12).
Annual
minimum payments
|
|
2021
|
|
|
2022
|
|
|
2023
|
|
|
2024
|
|
|
2025
onwards
|
|
|
Total
|
|
Ports
|
|
|
17
|
|
|
|
61
|
|
|
|
60
|
|
|
|
59
|
|
|
|
799
|
|
|
|
996
|
|
Vessels
|
|
|
16
|
|
|
|
64
|
|
|
|
62
|
|
|
|
60
|
|
|
|
404
|
|
|
|
606
|
|
Pellets
plants
|
|
|
35
|
|
|
|
37
|
|
|
|
12
|
|
|
|
12
|
|
|
|
107
|
|
|
|
203
|
|
Properties
|
|
|
16
|
|
|
|
26
|
|
|
|
22
|
|
|
|
20
|
|
|
|
38
|
|
|
|
122
|
|
Energy
plants
|
|
|
2
|
|
|
|
7
|
|
|
|
6
|
|
|
|
6
|
|
|
|
60
|
|
|
|
81
|
|
Mining
equipment and locomotives
|
|
|
6
|
|
|
|
21
|
|
|
|
17
|
|
|
|
15
|
|
|
|
80
|
|
|
|
139
|
|
Total
|
|
|
92
|
|
|
|
216
|
|
|
|
179
|
|
|
|
172
|
|
|
|
1,488
|
|
|
|
2,147
|
|
The
table above presents the undiscounted lease obligation by maturity date. The lease liability recognized in the balance sheet is measured
at the present value of such obligations.
Selected
Notes to the Interim Financial Statements
Expressed
in millions of United States dollar, unless otherwise stated
|
|
e)
Guarantees
As
at September 30, 2021 and December 31, 2020, loans and borrowings are secured by property, plant and equipment in the amount
of US$83 and US$176, respectively. The securities issued through Vale’s wholly-owned finance subsidiary Vale Overseas Limited are
fully and unconditionally guaranteed by Vale.
|
20.
|
Brumadinho
dam failure
|
On
January 25, 2019, a tailings dam (“Dam I”) failed at the Córrego do Feijão mine, in the city of Brumadinho,
state of Minas Gerais. The failure released a flow of tailings debris, destroying some of Vale’s facilities, affecting local communities
and disturbing the environment. The tailings released have caused an impact of around 315 km in extension, reaching the nearby Paraopeba
River. The dam failure in Brumadinho (“event”) resulted in 270 fatalities, including 8 victims still missing, and caused
extensive property and environmental damage in the region.
As
a result of the dam failure, the Company has recognized provisions to meet its assumed obligations, individual indemnification to those
affected by the event, remediation of the affected areas and compensation to the society. The Company also recognized a provision for
de-characterization of the dams. Below are the changes in during the current period:
|
|
December 31,
2020
|
|
|
Operating
expense
|
|
|
Monetary
and
present value
adjustments
|
|
|
Disbursements
(ii)
|
|
|
Translation
adjustment
|
|
|
September 30,
2021
|
|
Global
Settlement for Brumadinho
|
|
|
3,989
|
|
|
|
-
|
|
|
|
246
|
|
|
|
(94
|
)
|
|
|
(189
|
)
|
|
|
3,952
|
|
Provision
for individual indemnification and other commitments
|
|
|
586
|
|
|
|
-
|
|
|
|
(9
|
)
|
|
|
(150
|
)
|
|
|
(23
|
)
|
|
|
404
|
|
Liabilities
related to Brumadinho
|
|
|
4,575
|
|
|
|
-
|
|
|
|
237
|
|
|
|
(244
|
)
|
|
|
(212
|
)
|
|
|
4,356
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
De-characterization
of dams
|
|
|
2,289
|
|
|
|
-
|
|
|
|
(81
|
)
|
|
|
(254
|
)
|
|
|
(97
|
)
|
|
|
1,857
|
|
Incurred
expenses (i)
|
|
|
-
|
|
|
|
461
|
|
|
|
-
|
|
|
|
(461
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
6,864
|
|
|
|
461
|
|
|
|
156
|
|
|
|
(959
|
)
|
|
|
(309
|
)
|
|
|
6,213
|
|
(i) The
Company has incurred expenses, which have been recognized straight to the income statement, in relation to communication services, accommodation
and humanitarian assistance, equipment, legal services, water, food aid, taxes, among others. For the three and nine-month periods ended
September 30, of 2021, the Company incurred expenses in the amount of US$161 and US$461, respectively (US$114 and US$382 for the
three and nine-month periods ended September 30, 2020).
(ii) Disbursement
is presented net of the judicial deposits utilization.
a)
Global Settlement for Brumadinho
On
February 4, 2021, the Company entered into a Judicial Settlement for Integral Reparation (“Global Settlement”), which
was under negotiations since 2019, with the State of Minas Gerais, the Public Defender of the State of Minas Gerais and the Federal and
the State of Minas Gerais Public Prosecutors Offices, to repair the environmental and social damage resulting from the Dam I rupture.
The Global Settlement was ratified by the Minas Gerais State Court on February 4, 2021, and the res judicata was drawn up
on April 7, 2021.
With
the Global Settlement, the requests contained in public civil actions regarding the socio-environmental and socioeconomic collective
damages caused by the dam rupture were substantially resolved and the parameters for the reparation and compensation of said damages
were established. As a result, the Company recorded an additional provision as at December 31, 2020.
The
provision is discounted at presented value using an observable rate that reflects the current market assessments of the time value of
money and the risks specific to the liability at the reporting date. During the current year, the discount rate applied on the provisions
for the Global Settlement, individual indemnification and other commitments, has increased from 2.0% at December 31, 2020 to 4.6%
at September 30, 2021. Additionally, the provisions were updated by the consumer price index (IPCA), as required by the Global Agreement,
resulting in an impact of US$329 (R$1,737 million), recorded in income statement for the three-month period ended September 30,
2021.
Selected
Notes to the Interim Financial Statements
Expressed
in millions of United States dollar, unless otherwise stated
|
|
Based
on the present value of the projected cash outflows, the provision related to Global Settlement is detailed as follows:
|
|
September 30,
2021
|
|
|
December 31,
2020
|
|
Cash
settlement obligation, net of judicial deposits
|
|
|
2,327
|
|
|
|
2,343
|
|
Provision
for socio-economic reparation and others
|
|
|
859
|
|
|
|
860
|
|
Provision
for social and environmental reparation
|
|
|
766
|
|
|
|
786
|
|
|
|
|
3,952
|
|
|
|
3,989
|
|
|
|
September 30,
2021
|
|
|
December 31,
2020
|
|
Current
liabilities
|
|
|
2,101
|
|
|
|
1,561
|
|
Non-current
liabilities
|
|
|
1,851
|
|
|
|
2,428
|
|
Liabilities
|
|
|
3,952
|
|
|
|
3,989
|
|
(a.i)
Cash settlement obligation
The
cash settlement obligation relates to the socio-economic reparation and socio-environmental compensation projects that will be carried
out or managed directly by the State of Minas Gerais and Institutions of Justice, mainly aiming to develop the urban mobility program
and strengthening public service programs, as well as other projects that will be proposed by the affected population. In addition, resources
will be used in a program of income transfer to those affected by the event, which will be carried out by Institutions of Justice. Of
the total amount, US$809 (R$4,400 million) relates to the income transfer program that will be fully paid in 2021. The remaining amount
of US$1,518 (R$8,256 million) is the present value of the semiannual fixed payments obligation, which will last 5 years on average.
(a.ii)
Provision for socio-economic reparation and others
The
Global Settlement includes remediation projects for Brumadinho and other affected municipalities of the Paraopeba basin. The socioeconomic
reparation actions aim to strengthen the productive activities of the affected region, through measures for greater economic diversification
of the municipality of Brumadinho, reducing its historical dependence on mining, and, for the rest of the Basin, finding ways to support
the transformation of the economy of the impacted municipalities. These projects will be carried out directly by the Company for an average
period of 3 years.
The
estimated amounts for the project execution, although set in the agreement, may vary since the implementation of those projects are Vale's
responsibility and changes against the original budget may result in changes in provision in future reporting periods.
(a.iii)
Provision for social and environmental reparation
The
Global Settlement establishes the rule for the development of the environmental reparation plan, and projects for the compensation
of environmental damage already known. These measures aim to repair the damage caused, restore the ecosystems disruption, restore local
infrastructure, repair social and economic losses, recover affected areas and repair the loss of memory and cultural heritage caused
by the dam rupture. It also includes several actions to clean up the affected areas and improvements to the water catchment system along
the Paraopeba River and other water collection points near the affected area. These measures and compensation projects will be carried
out directly by the Company for an average period of 5 years.
The
estimated amount to carry out the environmental recovery actions is part of the Global Settlement. However, it has no cap due to the
Company's legal obligation to fully repair the environmental damage caused by the dam rupture. Therefore, this provision may change
in the future depending on several factors that are not under the control of the Company.
b)
Provision for individual indemnification and other commitments
For
the individual indemnification, Vale and the Public Defendants of the State of Minas Gerais formalized an agreement on April 5,
2019, under which those affected by the Brumadinho’s Dam failure may join an individual or family group out-of-Court settlement
agreements for the indemnification of material, economic and moral damages. This agreement establishes the basis for a wide range of
indemnification payments, which were defined according to the best practices and case law of Brazilian Courts, following rules and
principles of the United Nations (“UN”). As at September 30, 2021, the provision recorded is US$127 (US$179 as at December 31,
2020).
In
addition to the Global Settlement, the Company has been working to ensure geotechnical safety of the remaining structures at the Córrego
do Feijão mine, in Brumadinho, and the removal and proper disposal of the tailings of Dam I. As at September 30, 2021, the
provision recorded is US$224 (US$267 as at December 31, 2020).
In
addition, the Company was notified of the imposition of administrative fines by the Brazilian Institute of the Environment and Renewable
Natural Resources (“IBAMA”), in the amount of US$46 (R$250 million). The Company signed an agreement with IBAMA, of which
US$27 (R$150 million) will be used in environmental projects in 7 parks in the state of Minas Gerais, covering an area of approximately
794 thousand hectares, and US$18 (R$100 million) will be used in basic sanitation programs in the state of Minas Gerais.
Selected
Notes to the Interim Financial Statements
Expressed
in millions of United States dollar, unless otherwise stated
|
|
c)
De-characterization of other dams in Brazil
Following
the Brumadinho Dam rupture, the Company has decided to speed up the plan to “de-characterize” its tailings dams built under
the upstream method (same method as Brumadinho’s dam), certain “centerline structures” and dikes, located in Brazil.
In September 2020, the federal government enacted Law no. 14,066, which modified the National Dam Safety Policy (Law no. 12.334/2020),
reinforcing the prohibition of constructing and raising upstream dams in Brazil. The statute also requires companies to decharacterize
the structures built using the upstream method by 2022, or by a later date if it is proven that the decharacterization is not technically
feasible by 2022.
The
Company’s projects of de-characterization of dams are projected to last 8 years on average and were discounted at the present
value using an observable rate, which increased from 3.5% at
December 31, 2020 to 5.0% at September 30, 2021. The Company has a total provision to comply with these assumed
obligations in the amount of US$1,857 at September 30, 2021 (US$2,289 as at December 31, 2020).
(c.i)
Operation stoppages
The
Company has suspended some operations due to judicial decisions or technical analysis performed by Vale on its upstream dam structures.
The Company has been recording losses in relation to the operational stoppage and idle capacity of the ferrous mineral segment in
the amounts of US$63 and US$256 for the three and nine-months periods ended September 30, 2021 (US$111 and US$378 for the three
and nine-months periods ended September 30, 2020), respectively. The Company is working on legal and technical measures to resume
all operations at full capacity.
d)
Contingencies and other legal matters
(d.i)
Requests for fines or forfeit of assets
On
August 26, 2020, the Public Prosecutor's Office of Minas Gerais (“MPMG”) and other plaintiffs of the Public Civil Actions
presented a request for ruling condemning Vale to indemnify alleged economic losses of the State of Minas Gerais and collective moral
damages, both claims already considered in said Public Civil Actions filed against Vale in January 2019 as a result of the Brumadinho
dam rupture. In that submission, the plaintiffs also requested the immediate freezing of US$4.9 billion (R$26.7 billion) from the Company
as a guarantee for the reimbursement of the alleged economic losses, which was dismissed by the judge of the 2nd Lower Court of Public
Treasury of Belo Horizonte on October 6, 2020. This claim was extinguished with the Global Settlement.
In
other proceeding, in May 2020, the MPMG requested the imposition of fines or forfeit of assets, rights and amounts of the Company,
allegedly based on Article 5, item V of Brazilian Law 12.846/2013. According to the MPMG, Vale would have, through its employee’s
actions, hindered the inspection activities of public agencies in the complex. Vale was not required to present any guarantees of US$1.4
billion (R$7.9 billion) based on a judicial decision. The Company believes that the likelihood of loss is remote.
In
January 2021, the Comptroller General of the State of Minas Gerais (“CGE”) notified Vale to present it defense against
the Administrative Liability Proceeding (“PAR”) initiated based on the same article. Vale presented its defense in March 2021,
and filed a writ of mandamus in the face of the establishment of this PAR, which had the injunction granted to suspend the proceeding
of the PAR.
In
October 2020, the Company was informed that the Brazilian Office of the Comptroller General (“CGU”) initiated an administrative
proceeding based on the same allegations made by the MPMG. As this is a discretionary procedure from the CGU, the Company estimates its
likelihood of a loss during the administrative phase as possible, but it reaffirms its assessment of loss as remote in the annulment
lawsuit to be instituted against any decision by CGU, if necessary.
(d.ii)
U.S. Securities putative class action suit
Vale
is defending itself in a putative class action brought before a Federal Court in New York and filed by holders of securities - American
Depositary Receipts ("ADRs") - issued by Vale. The Lead Plaintiff alleges that we made false and misleading statements or omitted
to make disclosures concerning the risks of the operations of Dam I in the Córrego do Feijão mine and the adequacy of the
related programs and procedures.
Selected
Notes to the Interim Financial Statements
Expressed
in millions of United States dollar, unless otherwise stated
|
|
Following
the decision of the Court, in May 2020, that denied the Motion to Dismiss presented by the Company, the Discovery phase has started,
and the fact Discovery was expected to be concluded by June 2021. However, due to the pandemic, the fact Discovery term has been
extended to be concluded by March 2022, the fact Discovery is currently ongoing. In parallel, in February 2021 the Plaintiff
filed a motion for class certification, which we opposed in April, 2021. In June, 2021 a Reply was filed by the Plaintiff and rebuttal
expert reports were filed by the parties. A decision by the Court on the motion for class certification is expected to be issued in the
upcoming weeks.
Based
on the evaluation of the Company's legal counsel and given the very preliminary stage, the expectation of loss of this process is classified
as possible. However, considering the initial stage of this putative class action, it is not possible at this time to reliably estimate
the amount of a potential loss.
(d.iii)
Arbitration proceedings in Brazil filed by shareholders and a class association
In
Brazil, Vale is a defendant in (i) one arbitration filed by 351 minority shareholders, (ii) one arbitration filed by a class
association allegedly representing all Vale’s minority shareholders, and (iii) one arbitration filed by foreign investment
funds.
In
the three proceedings, the Claimants argue Vale would be aware of the risks associated with the dam, and failed to disclose it to the
shareholders, which would be required under the Brazilian applicable laws and the rules of Comissão de Valores Mobiliários
(Securities and Exchange Commission of Brazil). Based on such argument, they claim compensation for losses caused by the decrease
of the value of the shares.
Based
on the evaluation of the Company's legal counsel and given the very preliminary stage, the expectation of loss of these proceedings is
classified as possible.
Specifically,
in the proceeding filed by foreign funds, the Claimants estimated the amount of the alleged losses at approximately US$330 (R$1,800 million).
However, the Company disagrees with the estimated losses alleged by the foreign funds and believes that the likelihood of loss is remote
based on the current status of the proceeding.
(d.iv) Investigation by the Securities
and Exchange Commission (“SEC”) and CVM
Vale has been notified that the SEC staff
has made a preliminary determination to recommend that the SEC commence proceedings against Vale alleging violations of U.S.
securities laws related to Vale’s disclosures about its dam safety management and the dam at Brumadinho. If the SEC authorizes
an action against Vale, the SEC could seek an injunction against future violations of U.S. federal securities laws, the imposition
of civil monetary penalties, disgorgement and other relief within the SEC’s authority in a lawsuit filed in a federal
court. The CVM is also conducting investigations relating to Vale’s disclosure of relevant information to shareholders,
investors and the markets in general, especially regarding the conditions and management of Vale’s dams. At the time, it is
not yet possible to estimate the value or a range of potential loss to the Company.
(d.v)
Criminal proceedings and investigations
In
January 2020, the MPMG brought criminal charges against 16 individuals (including former executive officers of Vale and former employees)
for a number of potential crimes, including homicide, and against Vale S.A. for alleged environmental crimes. These charges were accepted
by the state criminal judge in the city of Brumadinho on February 14, 2020, however, on October 19, 2021, the Superior Court
of Justice annulled this decision and determined that it should be judged by the Federal Court. Vale intends to vigorously defend itself
against the criminal claims, and the Company cannot estimate when a decision on this criminal proceeding will be issued.
(d.vi)
Labor Collective Civil Action
In
2021, public civil actions were filed by a labor union in the Labor Court of Betim in the Brazilian State of Minas Gerais, claiming the
indemnification payment for death damage to each direct and outsourced employee who has died due to the Dam I rupture. They are claiming
to represent 246 workers and have requested indemnification payments ranging between US$276 thousand (R$1.5 million) and US$552 thousand
(R$3 million) to each fatal victim. There has been an initial decision condemning Vale to pay US$184 thousand (R$1 million) per each
direct employees (131 fatal victims). Vale is defending itself against these actions and believes that, despite the lack of provision
in the Brazilian legal framework, the likelihood of loss is deemed possible.
Selected
Notes to the Interim Financial Statements
Expressed
in millions of United States dollar, unless otherwise stated
|
|
e) Insurance and financial
guarantees
(e.i) Insurance
The Company is negotiating with insurers the payment
of indemnification under its operational risk and civil liability. However, these negotiations are still at a preliminary stage, therefore
any payment of insurance proceeds will depend on the coverage definitions under these policies and assessment of the amount of loss. Due
to uncertainties, no indemnification to the Company was recognized in these interim financial statements.
(e.ii) Financial guarantees
In April 2021, the financial guarantees related
to the Brumadinho event were released, due the Global Settlement. As at December 31, 2020, the Company had financial guarantees in
the amount of US$1,124 (R$5,843 million).
21. Liabilities
related to associates and joint ventures
In November 2015, the Fundão tailings
dam owned by Samarco Mineração S.A. (Samarco) failed, releasing tailings downstream, flooding certain communities and causing
impacts on communities and the environment along the Doce river. The rupture resulted in 19 fatalities and caused property and environmental
damage to the affected areas. Samarco is a joint venture equally owned by Vale S.A. and BHP Billiton Brasil Ltda. (‘‘BHPB’’).
In June 2016, Samarco, Vale and BHPB created
the Fundação Renova, a not-for-profit private foundation, to develop and implement (i) social and economic remediation
and compensation programs and (ii) environmental remediation and compensation programs in the region affected by the dam rupture.
The creation of Fundação Renova was provided for under the agreement for settlement and conduct adjustment (the ‘‘Framework
Agreement’’) signed in March 2016 by Vale, BHPB, Samarco, the Brazilian federal government, the two Brazilian states
affected by the rupture (Minas Gerais and Espírito Santo) and other governmental authorities.
In June 2018, Samarco, Vale and BHPB entered
into a comprehensive agreement with the offices of the federal and state (Minas Gerais and Espírito Santo) prosecutors, public
defenders and attorney general, among other parties, improving the governance mechanism of Fundação Renova and establishing,
among other things, a process for potential revisions to the remediation programs provided under the Framework Agreement based on the
findings of experts hired by Samarco to advise the MPF (Federal Prosecutor’s Office) over a two-year period (the ‘‘June 2018
Agreement’’). Under the Framework Agreement, the June 2018 Agreement and Renova’s by-laws, Fundação
Renova must be funded by Samarco, but to the extent that Samarco is unable to fund, Vale and BHPB must ratably bear the funding requirements
Under the Framework Agreement.
On April 9, 2021, Samarco announced the request
for Judicial Reorganization (“RJ”) was filed with the Minas Gerais Court to renegotiate its debt, which is held by bondholders
abroad. The purpose of RJ is to restructure Samarco’s debts and establish an independent and sustainable financial position, allowing
Samarco to keep working to resume its operations safely and to fulfill its obligations related to the Renova Foundation.
The RJ does not affect Samarco's obligation to
remediate and compensate the impacts of the Fundão tailings dam failure. However, as Samarco began the gradual resumption of operations
in December 2020, it is not yet possible to reliably estimate when Samarco will generate cash to comply with its assumed obligation
in the TTAC. Thus, the liability recorded by Vale on September 30, 2021 does not consider Samarco's potential cash flows generation.
Therefore, the RJ did not have any additional impact on these interim financial statements.
Therefore, the provision related to Renova is
US$2,061 (R$11,212 million) as at September 30, 2021 (US$1,853 (R$9,634 million) as at December 31, 2020). In addition, the
Company has a provision of US$204 (R$1,110 million) (US$221 (R$1,148 million) as at December 31, 2020) for the de-characterization
of the Germano dam.
Selected
Notes to the Interim Financial Statements
Expressed
in millions of United States dollar, unless otherwise stated
|
|
Movements
during the period
|
|
2021
|
|
|
2020
|
|
Balance at January 1,
|
|
|
2,074
|
|
|
|
1,700
|
|
Provision
|
|
|
560
|
|
|
|
566
|
|
Disbursements
|
|
|
(131
|
)
|
|
|
(306
|
)
|
Present value valuation
|
|
|
(101
|
)
|
|
|
34
|
|
Translation adjustment
|
|
|
(137
|
)
|
|
|
(509
|
)
|
Balance at September 30,
|
|
|
2,265
|
|
|
|
1,485
|
|
|
|
|
September 30, 2021
|
|
|
|
December 31, 2020
|
|
Current liabilities
|
|
|
1,551
|
|
|
|
876
|
|
Non-current liabilities
|
|
|
714
|
|
|
|
1,198
|
|
Liabilities
|
|
|
2,265
|
|
|
|
2,074
|
|
Renova
Foundation
During the second
quarter of 2021, Fundação Renova reviewed the assumptions used on the preparation of the estimates incorporated into the
mitigation and compensation programs mainly due recent judicial decisions increasing the scope of some TTAC programs. The periodic review,
resulted in an additional provision of US$560 (R$2,820 million), recorded in the nine-month period ended September 30, 2021,
which corresponds to its portion of the responsibility to support the Renova Foundation. There was no additional provision for the three-month
period ended September 30, 2021.
Samarco’s
working capital
In addition to the provision, Vale S.A. made available
US$21 (R$113 million) during the first quarter of 2021 (2020: US$56), which was fully used to fund Samarco’s working capital. This
expense was recognized as “Equity results and other results in associates and joint ventures”. No additional amount was made
available during the nine-month period ended September 30, 2021 (2020: US$119 (R$594 million)). Vale S.A. may provide an additional
short-term credit facility up to US$64 (R$348 million) in 2021.
Contingencies
related to Samarco accident
These proceedings include public civil actions
brought by Brazilian authorities and multiple proceedings involving claims for significant amounts of damages and remediation measures.
The Company expects the Framework Agreements to represent the settlement of the public civil action brought by the MPF and other related
proceedings. There are also putative securities class actions in the United States against Vale and some of its current and former officers
and a criminal proceeding in Brazil. The main updates regarding the lawsuits in the period were as follows:
(i) Public Civil Action filed by the
Federal Government and others and public civil action filed by the Federal Public Prosecutors ("MPF")
The Framework Agreement (“TAC-Gov”)
considers the renegotiation of the Renova Foundation's reparation programs depending on the results of the studies carried out by the
experts. The negotiations started in April 2021 and a letter of principles was signed in June 2021 by Vale, BHP and Samarco
with the representatives of the government and various justice institutions. Negotiations, with mediation by the National Council of Justice,
are ongoing.
There has been issued judicial decisions in relation
to the “Eixo Prioritário 7”, which aims individual indemnification, including new categories in the scope of
the compensation, other municipalities that are not part of the TTAC and the increase of the compensation system related to the municipality
of Mariana, which already has its specific conditions set for individual indemnification. Therefore, considering that those decisions
are still being disputed and depending on the definitive decisions of these proceedings, the provision recorded by the Company may increase
in future reporting periods.
On January 31,
2020, “Eixo Prioritário 10” was created to address the different understanding of parties regarding the scope,
deadlines and purpose of the experts hired to assist the affected people, which is a requirement of the TacGov. On October 4, 2021
(subsequent event), a decision was issued determining adjustments to the work plans presented by the experts. Additionally, considering
that some groups of affected people have filed a request to dismiss the hiring of these experts, a hearing was scheduled, and it did not
yet happen. The Company is assessing the aspects related to this decision, which is not yet definitive and is subject to appeal. Therefore,
depending on the judicial developments of this proceeding, the provision recorded by the Company may increase in future reporting periods.
Selected
Notes to the Interim Financial Statements
Expressed
in millions of United States dollar, unless otherwise stated
|
|
(ii) Class Action in the United
States
In March 2017, the holders of securities
issued by Samarco Mineração S.A. filed a potential collective action in the New York Federal Court against Samarco, Vale,
BHP Billiton Limited, BHP Billiton PLC and BHP Brasil Ltda. based on U.S. Federal Securities laws, which was dismissed without prejudice,
in June 2019. In December 2019 the plaintiffs filed a Notice of Appeal to the NY Court of Appeals.
In January 2021, it was held a hearing before
the Second Circuit of the New York State Court of Appeals. In March 2021 the Second Circuit denied the plaintiff’s appeal.
This decision became res judicata in June 2021, since no further appeal has been filed by the Plaintiff. Thus, the case is closed
and should be filed by the Court.
(iii) Criminal proceeding
In September 2019, the federal court of Ponte
Nova dismissed all criminal charges against Vale representatives relating to the first group of charges, which concerns the results of
the Fundão dam failure, remaining only the legal entity in the passive pole. The second group of charges against Vale S.A. and
one of the Company’s employees, which concerns the accusation of alleged crimes committed against the Environmental Public Administration,
remained unchanged. In June 2021, the Company filed an appeal with the Superior Court of Justice against the decision of the Federal
Regional Court of the 1st Region that did not decided in favor of Vale. In July 2021, the Federal Prosecutor filed an appeal with
the Federal Regional Court of the 1st Region, against the judge's decision that rejected the resumption of the procedural instruction,
requesting the review of the decision. The Company cannot estimate when a final decision on the case will be issued.
Insurance
Since the Fundão dam rupture, the Company
has been negotiating with insurers the indemnification payments based on its general liability policies. For the nine-month period ended
September 30, 2021, the Company received payments in the amount of US$33, and recognized a gain in the income statement as “Equity
results and other results in associates and joint ventures”.
22. Provisions
|
|
Current liabilities
|
|
|
Non-current liabilities
|
|
|
|
September 30, 2021
|
|
|
December 31, 2020
|
|
|
September 30, 2021
|
|
|
December 31, 2020
|
|
Payroll, related charges and other remunerations
|
|
|
730
|
|
|
|
877
|
|
|
|
-
|
|
|
|
-
|
|
Onerous contracts
|
|
|
37
|
|
|
|
58
|
|
|
|
845
|
|
|
|
838
|
|
Environmental obligations
|
|
|
72
|
|
|
|
102
|
|
|
|
175
|
|
|
|
200
|
|
Asset retirement obligations (i)
|
|
|
82
|
|
|
|
99
|
|
|
|
3,589
|
|
|
|
4,121
|
|
Provision related to VNC sale (note 12)
|
|
|
-
|
|
|
|
500
|
|
|
|
-
|
|
|
|
-
|
|
Provision related to the Candonga Consortium (ii)
|
|
|
72
|
|
|
|
39
|
|
|
|
-
|
|
|
|
-
|
|
Provisions for litigation (note 23)
|
|
|
80
|
|
|
|
87
|
|
|
|
1,024
|
|
|
|
1,004
|
|
Employee postretirement obligations (note 24)
|
|
|
103
|
|
|
|
103
|
|
|
|
1,641
|
|
|
|
2,271
|
|
Provisions
|
|
|
1,176
|
|
|
|
1,865
|
|
|
|
7,274
|
|
|
|
8,434
|
|
(i) As at September 30, 2021, the Company
has issued letters of credit and surety bonds to guarantee an amount of US$608 of its asset retirement obligation related to the Base
Metals operations.
(ii) As at December 31, 2020, the provision related to the
Candonga Consortium was presented in the balance sheet under “Others” in the current liabilities.
Provision
related to the Candonga Consortium - On October 6, 2021
(subsequent event), the Superior Court of Justice issued a judicial decision to suspend the effects of a decision of the Federal
Regional Court which assured the maintenance of the Risoleta Neves hydroelectric plant in the Energy Reallocation Mechanism
(“MRE”). Thereby, the financial compensation within the MRE for its temporary incapacity of generating electric energy
shall not apply to the Candonga Consortium, which is a joint operation between Vale and Aliança Geração de
Energia. The plant has been halted since November 2015, due to the dam failure of Fundão, and the carrying value of the
consortium assets are fully impaired. Therefore, the Company would be requested by the National Electric Energy Agency
(“ANEEL”) and the Chamber of Electric Energy Commercialization (“CCEE”) to pay approximately US$72 (R$392
million), for which the Company has a provision as at September 30, 2021.
Selected
Notes to the Interim Financial Statements
Expressed
in millions of United States dollar, unless otherwise stated
|
|
23. Litigations
a)
Provision for legal proceedings
The Company has considered all information available
to assess the likelihood of an outflow of resources and in the preparation on the estimate of the costs that may be required to settle
the obligations. The main litigations refer to:
Tax
litigations - Mainly refers to the lawsuit filed in 2011 by Valepar (merged by Vale) seeking the right to exclude the amount
of dividends received in the form of interest on stockholders’ equity (“JCP”) from the PIS and COFINS tax base. The
amount reserved for this proceeding as at September 30, 2021 is US$409 (US$423 as at December 31,2020). This proceeding is
guaranteed by a judicial deposit in the amount of US$471 recorded at September 30, 2021 (US$487 as at December 31,2020).
Civil
litigations - Refers to lawsuits for: (i) indemnities for losses, payments and contractual fines due to contractual imbalance
or non-compliance that are alleged by suppliers, and (ii) land claims referring to real estate Vale's operational activities.
Labor
litigations - Refers to lawsuits for individual claims by in-house employees and service providers, primarily involving demands
for additional compensation for overtime work, moral damages or health and safety conditions.
Environmental
litigations - Refers mainly to proceedings for environmental damages and issues related to environmental licensing.
|
|
Tax litigation
|
|
|
Civil litigation
|
|
|
Labor litigation
|
|
|
Environmental litigation
|
|
|
Total of litigation provision
|
|
Balance at December 31, 2020
|
|
|
485
|
|
|
|
260
|
|
|
|
335
|
|
|
|
11
|
|
|
|
1,091
|
|
Additions and reversals, net
|
|
|
-
|
|
|
|
5
|
|
|
|
61
|
|
|
|
1
|
|
|
|
67
|
|
Payments
|
|
|
(5
|
)
|
|
|
(20
|
)
|
|
|
(41
|
)
|
|
|
(4
|
)
|
|
|
(70
|
)
|
Indexation and interest
|
|
|
5
|
|
|
|
22
|
|
|
|
28
|
|
|
|
-
|
|
|
|
55
|
|
Translation adjustment
|
|
|
(22
|
)
|
|
|
(11
|
)
|
|
|
(15
|
)
|
|
|
-
|
|
|
|
(48
|
)
|
Acquisition of NLC (note 12)
|
|
|
-
|
|
|
|
1
|
|
|
|
8
|
|
|
|
-
|
|
|
|
9
|
|
Balance at September 30, 2021
|
|
|
463
|
|
|
|
257
|
|
|
|
376
|
|
|
|
8
|
|
|
|
1,104
|
|
Current liabilities
|
|
|
7
|
|
|
|
15
|
|
|
|
57
|
|
|
|
1
|
|
|
|
80
|
|
Non-current liabilities
|
|
|
456
|
|
|
|
242
|
|
|
|
319
|
|
|
|
7
|
|
|
|
1,024
|
|
|
|
|
463
|
|
|
|
257
|
|
|
|
376
|
|
|
|
8
|
|
|
|
1,104
|
|
|
|
Tax litigation
|
|
|
Civil litigation
|
|
|
Labor litigation
|
|
|
Environmental litigation
|
|
|
Total of litigation provision
|
|
Balance at December 31, 2019
|
|
|
696
|
|
|
|
300
|
|
|
|
455
|
|
|
|
11
|
|
|
|
1,462
|
|
Additions and reversals, net
|
|
|
18
|
|
|
|
41
|
|
|
|
13
|
|
|
|
2
|
|
|
|
74
|
|
Payments
|
|
|
(15
|
)
|
|
|
(13
|
)
|
|
|
(46
|
)
|
|
|
-
|
|
|
|
(74
|
)
|
Indexation and interest
|
|
|
16
|
|
|
|
20
|
|
|
|
17
|
|
|
|
1
|
|
|
|
54
|
|
Translation adjustment
|
|
|
(178
|
)
|
|
|
(89
|
)
|
|
|
(129
|
)
|
|
|
(4
|
)
|
|
|
(400
|
)
|
Balance at September 30, 2020
|
|
|
537
|
|
|
|
259
|
|
|
|
310
|
|
|
|
10
|
|
|
|
1,116
|
|
Current liabilities
|
|
|
7
|
|
|
|
14
|
|
|
|
61
|
|
|
|
-
|
|
|
|
82
|
|
Non-current liabilities
|
|
|
530
|
|
|
|
245
|
|
|
|
249
|
|
|
|
10
|
|
|
|
1,034
|
|
|
|
|
537
|
|
|
|
259
|
|
|
|
310
|
|
|
|
10
|
|
|
|
1,116
|
|
b)
Contingent liabilities
The main contingent liabilities, updated by applicable
interest rates, for which the likelihood of loss is not considered remote are presented by nature as follows:
|
|
September 30, 2021
|
|
|
December 31, 2020
|
|
Tax litigations
|
|
|
7,978
|
|
|
|
6,911
|
|
Civil litigations
|
|
|
1,652
|
|
|
|
1,348
|
|
Labor litigations
|
|
|
523
|
|
|
|
563
|
|
Environmental litigations
|
|
|
940
|
|
|
|
907
|
|
Total
|
|
|
11,093
|
|
|
|
9,729
|
|
The contingent liabilities related to the Brumadinho
event and Samarco are not presented above. The information is presented in notes 20 and 21.
As reported in the annual financial statements
for 2020, the Company is a counterparty in several actions and the main updates on contingent liabilities since then, are discussed as
follows:
(b.i) Assessments regarding the disallowance
of JCP:
In 2021, Vale received tax assessment for collection
of corporate income taxes (IRPJ and CSLL) and penalties regarding the disallowance of the JCP deducted from the 2017 and 2018 taxable
income, in the amount of US$ 979 (R$5,323 million). There was also a reduction in tax losses, with the corresponding tax impact of US$128
(R$698 million). The Company had filed administrative appeals and the decision is pending. As of September 30,2021, the likelihood
of loss is possible for both tax assessments.
Selected
Notes to the Interim Financial Statements
Expressed
in millions of United States dollar, unless otherwise stated
|
|
(b.ii) Proceeding related to income tax
paid abroad:
In March 2021,
Vale was assessed for the collection of US$399 (R$2,171 million) due to the disregard of taxes paid abroad that were offset by
the IRPJ debt in 2016. Tax authorities allege the Company has failed to comply with the applicable rules relating to the offset,
in Brazil, of income taxes paid abroad. The Company had filed an administrative appeal and a decision is pending. As at September 30,
2021, the likelihood of loss is possible.
c)
Judicial deposits
|
|
September 30, 2021
|
|
|
December 31, 2020
|
|
Tax litigations
|
|
|
974
|
|
|
|
988
|
|
Civil litigations
|
|
|
76
|
|
|
|
85
|
|
Labor litigations
|
|
|
148
|
|
|
|
177
|
|
Environmental litigations
|
|
|
23
|
|
|
|
18
|
|
Total
|
|
|
1,221
|
|
|
|
1,268
|
|
d)
Guarantees contracted for legal proceedings
In addition to the above-mentioned tax, civil,
labor and environmental judicial deposits, the Company contracted US$2.2 billion (R$12.1 billion) in guarantees for its lawsuits.
e)
ICMS included in PIS and COFINS computation tax base
Vale has been discussing the issue regarding the
exclusion of ICMS in PIS and COFINS tax basis in two judicial proceedings filed before March 2017. In one of the proceedings includes
refers to the taxable events from March 2012 onwards and has a definitive favorable decision (res judicata). This proceeding gave
rise to the recognition of a gain in the amount of US$63 (R$313 million) in the income statement for the year ended December 31,
2020. This amount was calculated based on the thesis that the collected ICMS was supposed to be excluded from the contribution basis.
With the definition of the subject by Federal Supreme Court in the leading case (RE 574.706), which is binding to all taxpayers, and has
determined that the ICMS to be excluded shall be the amount stated in the invoices, the Company recognized an additional gain of US$29
(R$146 million) for the three-month period ended June 30, 2021.
The other proceeding, which covers the taxable
events occurred between December 2001 and February 2012, resulted in a gain of US$162 (R$808 million) for the three-month period
ended June 30, 2021, due to the favorable decision to the Company, in accordance with the recent decision of the Federal Supreme
Court about the referred leading case.
24. Employee
benefits
a)
Long-term incentive programs
For the long-term awarding of eligible executives,
the Company compensation plans includes Matching program and Performance Share Unit program (“PSU”), with three years-vesting
cycles, respectively, with the aim of encouraging employee’s retention and encouraging their performance.
Matching
Program
For the Matching program, the participants can
acquire Vale’s common shares in the market without any benefits being provided by Vale. If the shares acquired are held for a period
of three years and the participants keep it employment relationship with Vale, the participant is entitled to receive from Vale an award
in shares, equivalent to the number of shares originally acquired by the executive. It should be noted that, although a specific custodian
of the shares is defined by Vale, the share initially purchased by the executives have no restriction and can be sold at any time. However,
if it’s done before the end of the three-year-vesting period, they would lose its right of receiving the related award to be paid
by Vale.
Performance
Shares Units
For PSU program, the eligible executives may receive
during a three year-vesting cycle an award equivalent to the market value of a determined number of common shares and depending on the
Vale’s performance factor, which is measured based on indicators of the total return to the shareholders (“TSR”) and
Environmental, Social, and Governance (“ESG”). It is comprised by 80% of TSR metrics and 20% of ESG indicators.
Selected
Notes to the Interim Financial Statements
Expressed
in millions of United States dollar, unless otherwise stated
|
|
At the Annual and Extraordinary Shareholders'
Meeting ("AGOE") held on April 30, 2021, the Company's shareholders approved changes in the PSU program to be implemented
as from the 2021 grant, consisting of (i) a change in the payment of the program award, which will be paid with common shares of
the Company, and (ii) additional payment at the end of each cycle based on the remuneration that will be paid by Vale to its stockholders
during the cycle.
b)
Modification altering manner of settlement
Both programs were classified as “cash-settled”
due to the PSU requirements and the Company’s settlement practice for the Matching program and, therefore, presented as a liability.
However, the decision taken at the AGOE (“modification date”) demonstrates the Company's declared intention to change the
form of liquidation of the programs. As a result, those programs were modified to become “equity-settled” and were remeasured
at the modification-date fair value.
Fair
value at modification date
The fair value of the Matching program was estimated
using the Company’s stock price and ADR at the modification date, which was R$109.02 and US$20.12 per share, respectively. The number
of shares granted for the 2019, 2020 and 2021 cycles were 1,222,721, 2,154,534 and 1,046,255, respectively. The fair value of the program
will be expensed on a straight-line basis over the three-year required service period, net of estimated forfeitures.
For the PSU, the program was measured using Monte
Carlo simulations to estimate the TSR indicator and ESG indicators. The assumptions used in the Monte Carlo simulation to estimate the
fair value of the TSR indicator are shown below:
PSU
|
|
2021
|
|
Granted shares
|
|
|
1,474,723
|
|
Date shares were granted
|
|
|
04/30/2021
|
|
VALE (BRL)
|
|
|
109.02
|
|
VALE ON (USD)
|
|
|
20.12
|
|
Expected volatility
|
|
|
39.00%p.y.
|
|
Expected dividend yield (i)
|
|
|
3.18%p.y.
|
|
Expected term (in years)
|
|
|
3
|
|
Expected value of the total shareholder return (TSR)
|
|
|
51.20
|
%
|
Expected value of the performance factor (Total)
|
|
|
60.96
|
%
|
(i) Source: Bloomberg April 30, 2021
Reclassification
from cash-settled to equity-settled
Matching
|
|
April 30, 2021
|
|
|
Remeasurement
|
|
|
Reclassification
|
|
|
May 1, 2021
|
|
|
Expense (i)
|
|
|
September 30, 2021
|
|
Liability
|
|
|
33
|
|
|
|
5
|
|
|
|
(38
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Stockholders' equity
|
|
|
-
|
|
|
|
-
|
|
|
|
38
|
|
|
|
38
|
|
|
|
12
|
|
|
|
50
|
|
Net income
|
|
|
-
|
|
|
|
(5
|
)
|
|
|
-
|
|
|
|
(5
|
)
|
|
|
(12
|
)
|
|
|
(17
|
)
|
PSU
|
|
April 30, 2021
|
|
|
Remeasurement
|
|
|
Reclassification
|
|
|
May 1, 2021
|
|
|
Expense (i)
|
|
|
September 30,
2021
|
|
Liability
|
|
|
3
|
|
|
|
(1
|
)
|
|
|
(2
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Stockholders' equity
|
|
|
-
|
|
|
|
-
|
|
|
|
2
|
|
|
|
2
|
|
|
|
3
|
|
|
|
5
|
|
Net income
|
|
|
-
|
|
|
|
1
|
|
|
|
-
|
|
|
|
1
|
|
|
|
(3
|
)
|
|
|
(2
|
)
|
(i) The Company has incurred in expenses in the amount of US$7
and US$2 with Matching and PAV programs, respectively, for the three-month periods ended September 30, 2021.
Selected
Notes to the Interim Financial Statements
Expressed
in millions of United States dollar, unless otherwise stated
|
|
c)
Employee post-retirement obligations
Reconciliation
of net liabilities recognized in the statement of financial position
|
|
September 30, 2021
|
|
|
December 31, 2020
|
|
|
|
Overfunded
pension
plans
|
|
|
Underfunded
pension
plans
|
|
|
Other
benefits
|
|
|
Total
|
|
|
Overfunded pension
plans
|
|
|
Underfunded
pension
plans
|
|
|
Other
benefits
|
|
|
Total
|
|
Amount recognized in the statement of financial position
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Present value of actuarial liabilities
|
|
|
(2,907
|
)
|
|
|
(4,202
|
)
|
|
|
(1,536
|
)
|
|
|
(8,645
|
)
|
|
|
(3,105
|
)
|
|
|
(4,632
|
)
|
|
|
(1,733
|
)
|
|
|
(9,470
|
)
|
Fair value of assets
|
|
|
3,616
|
|
|
|
3,994
|
|
|
|
-
|
|
|
|
7,610
|
|
|
|
3,969
|
|
|
|
3,991
|
|
|
|
-
|
|
|
|
7,960
|
|
Effect of the asset ceiling
|
|
|
(709
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(709
|
)
|
|
|
(864
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(864
|
)
|
Liabilities
|
|
|
-
|
|
|
|
(208
|
)
|
|
|
(1,536
|
)
|
|
|
(1,744
|
)
|
|
|
-
|
|
|
|
(641
|
)
|
|
|
(1,733
|
)
|
|
|
(2,374
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
-
|
|
|
|
(47
|
)
|
|
|
(57
|
)
|
|
|
(104
|
)
|
|
|
-
|
|
|
|
(47
|
)
|
|
|
(96
|
)
|
|
|
(143
|
)
|
Non-current liabilities
|
|
|
-
|
|
|
|
(161
|
)
|
|
|
(1,479
|
)
|
|
|
(1,640
|
)
|
|
|
-
|
|
|
|
(594
|
)
|
|
|
(1,637
|
)
|
|
|
(2,231
|
)
|
Liabilities
|
|
|
-
|
|
|
|
(208
|
)
|
|
|
(1,536
|
)
|
|
|
(1,744
|
)
|
|
|
-
|
|
|
|
(641
|
)
|
|
|
(1,733
|
)
|
|
|
(2,374
|
)
|
25. Stockholders’
equity
a)
Share capital
As at September 30, 2021, the share capital
was US$61,614 corresponding to 5,132,458,410 shares issued and fully paid without par value.
|
|
September 30, 2021
|
|
Stockholders
|
|
Common shares
|
|
|
Golden shares
|
|
|
Total
|
|
Shareholders with more than 5% of total capital
|
|
|
2,204,322,997
|
|
|
|
-
|
|
|
|
2,204,322,997
|
|
Previ
|
|
|
415,366,682
|
|
|
|
-
|
|
|
|
415,366,682
|
|
Capital World Investors
|
|
|
335,249,101
|
|
|
|
-
|
|
|
|
335,249,101
|
|
Capital Research Global Investors
|
|
|
326,001,911
|
|
|
|
-
|
|
|
|
326,001,911
|
|
Bradespar
|
|
|
293,907,266
|
|
|
|
-
|
|
|
|
293,907,266
|
|
Mitsui&co
|
|
|
286,347,055
|
|
|
|
-
|
|
|
|
286,347,055
|
|
Blackrock, Inc
|
|
|
279,562,772
|
|
|
|
-
|
|
|
|
279,562,772
|
|
Capital International Investors
|
|
|
267,888,210
|
|
|
|
-
|
|
|
|
267,888,210
|
|
Others
|
|
|
2,687,617,480
|
|
|
|
-
|
|
|
|
2,687,617,480
|
|
Golden shares
|
|
|
-
|
|
|
|
12
|
|
|
|
12
|
|
Total outstanding (without shares in treasury)
|
|
|
4,891,940,477
|
|
|
|
12
|
|
|
|
4,891,940,489
|
|
Shares in treasury
|
|
|
240,517,921
|
|
|
|
-
|
|
|
|
240,517,921
|
|
Total capital
|
|
|
5,132,458,398
|
|
|
|
12
|
|
|
|
5,132,458,410
|
|
The information presented above is based on the
communications provided by the stockholders in connection with the Instruction 358 issued by the Brazilian Securities and Exchange Commission
(“CVM”).
b)
Share buyback program
On April 1, 2021, the Board of Directors
approved a share buyback program for Vale’s common share which will be limited to a maximum of 270,000,000 common shares, and their
respective ADRs, representing up to 5.3% of the total number of outstanding shares. The program was approved to be carried out over up
to a 12-month period and the repurchased shares will be cancelled after the expiration of the program or utilized on the executive compensation
programs (note 24). The shares are acquired in the stock market based on regular trading conditions.
As at September 30, 2021, the Company purchased
238,860,947 common shares at an average cost of US$20.28 per share (R$105.76 per share), representing US$4,845 (R$25,261 million). Of
that amount, US$1,837 (R$9,687 million) or 99,842,600 shares were purchased through wholly owned subsidiaries and US$3,008 (R$15,574 million)
or 139,018,347 shares directly by the parent company.
As the Company is close to reaching the limit
for the buyback of shares in the current program, the Board of Directors approved on October 28, 2021 (subsequent event), a new share
buyback program for Vale’s common share which will be limited to a maximum of 200,000,000 common shares, and their respective ADRs,
representing up to 4.1% of the total number of outstanding shares. The program will be carried out over up to an 18-month period.
Selected
Notes to the Interim Financial Statements
Expressed
in millions of United States dollar, unless otherwise stated
|
|
c)
Treasury shares
The Company utilized 890,482 and 1,628,485 units
from its treasury shares, for the share-based payment program of its executives (note 24), corresponding to US$7 and US$14 recognized
as “Treasury shares utilized in the period” in the Statement of Changes in Equity, for the periods ended September 30,
2021 and 2020, respectively.
On September 16, 2021, the Board of Directors
approved the cancellation of 152,016,372 common shares of the Company acquired in previous buyback programs and held in treasury, without
reducing its capital stock.
d)
Stockholder’s remuneration
On February 25, 2021, based on the Company’s
dividends policy, the Board of Directors approved the stockholder’s remuneration in the amount of US$3,972 (R$21,866 million), equivalent
to R$4.262386983 per share, which was fully paid on March 15, 2021. Of the total amount, US$762 (R$4,288 million) was in the form
of interest on stockholders’ equity and US$3,122 (R$17,578 million) in the form of dividends.
On June 17, 2021, the Board of Directors
approved an additional stockholder’s remuneration in the total amount of US$2,200 (R$ 11,046 million), equivalent to R$2.177096137
per share, which was fully paid on June 30, 2021. Of the total amount, US$724 (R$ 3,634 million) relates to the anticipation of the
2021 year-end result and US$1,476 (R$7,412 million) was paid from the balance on the Company’s profit reserves.
On September 16, 2021, the Board of Directors
approved the stockholder’s remuneration in the total amount of US$7,391 (R$40,200 million), equivalent to R$8.108316476 per share,
which was fully paid on September 30, 2021. The amount distributed relates to the anticipation of the 2021 year-end result.
26. Related
parties
The Company’s related parties are subsidiaries,
joint ventures, associates, stockholders and its related entities and key management personnel of the Company. Transactions between the
parent company and its subsidiaries are eliminated on consolidation and are not disclosed in this note.
In June 2021, the Company concluded the transaction
for the acquisition of the interests held by Mitsui (related party) in Vale Moçambique and Nacala Logistics Corridor (note 12).
a)
Transactions with related parties
|
|
Three-month period ended September 30,
|
|
|
|
2021
|
|
|
2020
|
|
|
|
Joint Ventures
|
|
|
Associates
|
|
|
Stockholders
|
|
|
Total
|
|
|
Joint Ventures
|
|
|
Associates
|
|
|
Stockholders
|
|
|
Total
|
|
Net operating revenue
|
|
|
179
|
|
|
|
69
|
|
|
|
52
|
|
|
|
300
|
|
|
|
110
|
|
|
|
60
|
|
|
|
48
|
|
|
|
218
|
|
Cost and operating expenses
|
|
|
(280
|
)
|
|
|
(6
|
)
|
|
|
-
|
|
|
|
(286
|
)
|
|
|
(223
|
)
|
|
|
(7
|
)
|
|
|
-
|
|
|
|
(230
|
)
|
Financial result
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
(353
|
)
|
|
|
(355
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(38
|
)
|
|
|
(38
|
)
|
|
|
Nine-month period ended September 30,
|
|
|
|
2021
|
|
|
2020
|
|
|
|
Joint Ventures
|
|
|
Associates
|
|
|
Stockholders
|
|
|
Total
|
|
|
Joint Ventures
|
|
|
Associates
|
|
|
Stockholders
|
|
|
Total
|
|
Net operating revenue
|
|
|
520
|
|
|
|
196
|
|
|
|
166
|
|
|
|
882
|
|
|
|
247
|
|
|
|
178
|
|
|
|
135
|
|
|
|
560
|
|
Cost and operating expenses
|
|
|
(610
|
)
|
|
|
(15
|
)
|
|
|
-
|
|
|
|
(625
|
)
|
|
|
(751
|
)
|
|
|
(18
|
)
|
|
|
-
|
|
|
|
(769
|
)
|
Financial result
|
|
|
(9
|
)
|
|
|
(2
|
)
|
|
|
(732
|
)
|
|
|
(743
|
)
|
|
|
29
|
|
|
|
4
|
|
|
|
(74
|
)
|
|
|
(41
|
)
|
Purchases, accounts receivable and other assets,
and accounts payable and other liabilities relate largely to amounts charged by joint ventures and associates related to the pelletizing
plants operational lease and railway transportation services.
Net operating revenue relates to sale of iron
ore to the steelmakers and right to use capacity on railroads. Cost and operating expenses mostly relates to the variable lease payments
of the pelletizing plants and the logistics costs for using the Nacala Logistics Corridor, which has been consolidated since June 2021,
as described in note 12.
Selected
Notes to the Interim Financial Statements
Expressed
in millions of United States dollar, unless otherwise stated
|
|
b)
Outstanding balances with related parties
|
|
September 30, 2021
|
|
|
December 31, 2020
|
|
|
|
Joint Ventures
|
|
|
Associates
|
|
|
Stockholders
|
|
|
Total
|
|
|
Joint Ventures
|
|
|
Associates
|
|
|
Stockholders
|
|
|
Total
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents (i)
|
|
|
-
|
|
|
|
-
|
|
|
|
1,250
|
|
|
|
1,250
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,082
|
|
|
|
2,082
|
|
Accounts receivable
|
|
|
151
|
|
|
|
20
|
|
|
|
-
|
|
|
|
171
|
|
|
|
109
|
|
|
|
45
|
|
|
|
2
|
|
|
|
156
|
|
Dividends receivable
|
|
|
103
|
|
|
|
-
|
|
|
|
-
|
|
|
|
103
|
|
|
|
19
|
|
|
|
-
|
|
|
|
-
|
|
|
|
19
|
|
Loans (ii)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,118
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,118
|
|
Derivatives financial instruments (i)
|
|
|
-
|
|
|
|
-
|
|
|
|
6
|
|
|
|
6
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2
|
|
|
|
2
|
|
Other assets
|
|
|
51
|
|
|
|
3
|
|
|
|
-
|
|
|
|
54
|
|
|
|
68
|
|
|
|
2
|
|
|
|
-
|
|
|
|
70
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplier and contractors
|
|
|
274
|
|
|
|
7
|
|
|
|
49
|
|
|
|
330
|
|
|
|
121
|
|
|
|
10
|
|
|
|
35
|
|
|
|
166
|
|
Loans (ii)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,385
|
|
|
|
944
|
|
|
|
2,329
|
|
Derivatives financial instruments (i)
|
|
|
-
|
|
|
|
-
|
|
|
|
275
|
|
|
|
275
|
|
|
|
-
|
|
|
|
-
|
|
|
|
242
|
|
|
|
242
|
|
Other liabilities
|
|
|
132
|
|
|
|
79
|
|
|
|
-
|
|
|
|
211
|
|
|
|
235
|
|
|
|
48
|
|
|
|
-
|
|
|
|
283
|
|
(i) Refers to regular financial instruments
with large financial institutions that are deemed related parties
(ii) Refers to loans settled upon completion of the NLC acquisition
(note 12).
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
Vale S.A.
|
|
(Registrant)
|
|
|
|
|
By:
|
/s/ Ivan Fadel
|
Date: October 28, 2021
|
|
Head of Investor Relations
|
Vale (NYSE:VALE)
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