United States
Securities and Exchange Commission

Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the
Securities Exchange Act of 1934

For the month of

July 2010

Vale S.A.

Avenida Graça Aranha, No. 26
20030-900 Rio de Janeiro, RJ, Brazil
(Address of principal executive office)

(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)

(Check One) Form 20-F þ Form 40-F o

(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))

(Check One) Yes o No þ

(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))

(Check One) Yes o No þ

(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.)

(Check One) Yes o No þ

(If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b). 82-                    .)

 

 

Vale

Translation of “Formulário de Referência 2009”

(An informal translation of the report filed with the Comissão de Valores Mobiliários
on June 30, 2010, pursuant to Instrução CVM No. 480 anexo 24)

Index

1. RESPONSIBLE FOR THE FORM			3
2. AUDITORS			5
3. SELECTED FINANCIAL INFORMATION			8
4. RISK FACTORS			16
5. MARKET RISKS			32
6. COMPANY HISTORY			38
7. COMPANY ACTIVITES			51
8. VALE GROUP			92
9. RELEVANT ASSETS			100
10. MANAGEMENT COMMENTS			115
11. FORECASTS			154
12. GENERAL MEETINGS AND ADMINSTRATION			156
13. COMPENSATION FOR MANAGERS			178
14. HUMAN RESOURCES			200
15. OWNERSHIP			205
16. TRANSACTIONS WITH RELATED PARTIES			216
17. SHARE CAPITAL			239
18. SECURITIES			244
19. BUY-BACK PLANS AND SECURITIES HELD IN TREASURY			270
20. SECURITIES TRADING POLICY			276
21. DISCLOSURE POLICY			279
22. EXTRAORDINARY BUSINESS			282

1. RESPONSIBLE FOR THE FORM

1.1 — Declaration and Identification of those responsible

Name of person responsible for the content of the form: Roger Agnelli

Title of responsible person: CEO / Director of Investor Relations

The officers qualified above, declare that:

a. they reviewed the form of reference

b. all information contained in the form meets the requirements of CVM Instruction 480, especially arts. 14 to 19; and

c. the information contained in the form is true, accurate and complete with respect to the issuer’s financial situation and the risks inherent in its activities and the securities issued by it.

2. AUDITORS

2.1 Independent Auditors:

Fiscal year closing December 31, 2009
a)Name of company responsible:		PricewaterhouseCoopers Auditores Independentes
b) Name of individual responsible: CPF/MF: Telephone: E-mail:		Marcos Donizete Panassol / Ronaldo Matos Valiño 063.702.238-67 / 908.975.447-49 (21) 3232-6025 / (21) 3232-6072 marcos.panassol@br.pwc.com / ronaldo.valino@br.pwc.com
c) Date of Hiring of Services:		24.07.2009 — 30.06.2012
d) Description of Scope of Services:		Professional services to audit the financial statements of Vale and its subsidiaries and affiliates, both for local and international work on the certification of internal controls for compliance with the “Section 404” of Sarbanes-Oxley Act of 2002, provision of services relating to audit and tax services for compliance with legal requirements.
e) Possible Substitution of Auditor:		Deloitte Touche Tohmatsu have been replaced by PricewaterhouseCoopers Auditors Independent.
i. Justification of Substitution		With the issuance of the Quarterly Information report on March 31, 2009, the contractual period of five years signed with Deloitte Touche Tohmatsu was closed, and the administration of Vale opted not to use the possibility of not replacing the independent auditors provided for in CVM Instruction No. 549/2008 and thus, voluntarily replaced its independent auditor with the consent of Deloitte Touche Tohmatsu. In accordance with CVM Instruction 308/99, Vale announced the change of auditor via correspondence DICT/EXT-107/2009 dated 29/06/2009.
ii. Possible reasons given by the auditor in disagreement with the rationale for issuing the replacement, as per CVM rules regarding this specific matter		Not applicable.

Fiscal year closing on December 31, 2007 and on December 31, 2008
a)Name of company responsible:		Deloitte Touche Tohmatsu Auditores Independentes
b) Name of individual responsible: CPF/MF: Telephone: E-mail:		Marcelo Cavalcanti Almeida 335.905.597-72 (21) 3981-0577 / (21) 9982-6830 mcavalcanti@deloitte.com
c) Date of Hiring of Services:		27/02/2007 — 22/07/2009
d) Description of Scope of Services:		Professional services to audit the financial statements of Vale and its subsidiaries and affiliates, provision of services relating to audit and tax services for compliance with legal requirements.
e) Possible Substitution of Auditor:		Not applicable.
i. Justification of Substitution		Not applicable.
ii. Possible reasons given by the auditor in disagreement with the rationale for issuing the replacement, as per CVM rules regarding this specific matter		Not applicable.

2.2 Total amount of remuneration of auditors in the last fiscal year, itemized fees for the audit and those related to any other services provided:

In the year ended December 31, 2009, the independent auditors received fees totaling R $ 20.773 million for services to Vale and its subsidiaries and $ 331,000 for providing services for companies with shared control by Vale.

		Vale and				Companies with shared
R$ thousands		Subsidiaries				control				Total
Audit Accounting			16,891.9				266.3				17,158.2
Audit — Sarbanes Oxley			2,951.1				—				2,951.1
Audit-Related Services			173.0				64.5				237.5
Tax Services			704.0				—				704.0
Services Not Related to Auditing			13.7				—				13.7
Total Services			20,733.7				330.8				21,064.5

2.3 Other information that the Company deems relevant

Vale has developed and formalized specific rules and procedures for pre-approval of engagements for their independent external auditors in order to avoid conflict of interest or loss of independence and objectivity.

According to the Norm for Contracting of Services for Independent Audit, Advisory Services and other services unrelated to Audit Provided by External Auditors, approved by the Supervisory Board, with the aim of reconciling the legal precepts and regulations for Brazil and America, Vale established the following general principles for the preservation of independence of external auditors: (a) the auditor should not perform tasks which the administration of the Company should carry out, (b) the auditor should not audit their own work, (c) the auditor must not carry out advocacy activities for the Company. Under this norm, in line with best corporate governance practices, all services provided by the independent auditors of Vale are pre-approved by the Supervisory Board.

3. SELECTED FINANCIAL INFORMATION

3.1 Selected Consolidated Financial Information

		Fiscal Year Ended December 31
		2009				2008				2007
a. Shareholders’ equity (in R$ thousand)			95,736,974				96,274,640				57,029,465
b. Total Assets (in R$ thousand)			175,739,055				185,779,471				132,897,842
c. Net Revenue (R$ thousand)			48,496,566				70,540,994				64,763,466
d. Gross Income (in R$ thousand)			20,776,175				38,385,371				34,679,716
e. Net Income (in R$ thousand)			10,248,950				21,279,629				20,005,562
f. Number of Shares, excluding treasury			5,212,725				5,213,512				4,832,391
g. Asset Value of Share (in R$)			18.37				18.47				11.80
h. Earnings per Share (in R$)			1.96614				4.08163				4.13989
i. Other selected financial information			n / a				n / a				n / a

3.2 Accounting measurements

a. value of accounting measurements

The Company uses EBITDA (EBITDA) as a non-accounting measurement. In 2009, the EBITDA of the Company was established in the amount of R$ 18,649,012,000 (eighteen billion, six hundred and forty nine million and twelve thousand reais). In 2008 and 2007, these values were R$ 35,022,515,000 (thirty five billion, twenty two million, five hundred and fifteen thousand reais) and R$ 33,618,790,000 (thirty three billion, six hundred and eighteen million, seven hundred and ninety thousand reais), respectively.

b. Reconciliations between amounts reported and the values of audited financial statements

In R$ thousands		2009				2008				2007
Operating profit — EBIT			13,180,743				27,399,809				29,314,750
Depreciation / Amortisation of goodwill			5,446,951				5,112,446				4,170,469
Reduction in recoverable value of intangible assets			—				2,447,000
			18,627,694				34,959,255				33,485,219
Dividends received			21,318				63,260				133,571
EBITDA (LAJIDA)			18,649,012				35,022,515				33,618,790
Depreciation / Amortisation of goodwill			(5,446,951	)			(5,112,446	)			(4,170,469	)
Dividends received			(21,318	)			(63,260	)			(133,571	)
Reduction in recoverable value of intangible assets			—				(2,447,000	)			—
Corporate results			116,180				(1,324,580	)			(2,404,794	)
Proceeds from sale of investment			93,139				138,879				1,457,636
Net financial income			1,952,295				(3,837,534	)			277,479
Income and social contribution			(4,925,478	)			(664,728	)			(7,085,573	)
Minority interests			(167,929	)			(432,217	)			(1,553,936	)
Net income			10,248,950				21,279,629				20,005,562

c. why the Company believes that this measurement is more appropriate for a correct understanding of its financial situation and results of operations

EBITDA is a measure of the company’s cash generation, aiming to assist the assessment by the Administration, of the performance of operations. The analysis of operating results through EBITDA has the benefit of canceling the effect of non-operating gains or losses generated by financial transactions or the effect of taxes.

The consolidated cash generation measured by EBITDA (earnings before financial results, income from corporate interests, income tax and social contributions, depreciation, depletion and amortization and plus dividends received) is not a BR GAAP measurement and does not represent cash flow for the periods presented and therefore should not be considered as an alternative to net income (loss), as an isolated indicator of operating performance or as an alternative to cash flow as a source of liquidity. The EBITDA definition used by Vale may not be comparable with EBITDA, by definition, for other companies.

3.3 Events subsequent to the latest financial statements for the closure of the fiscal year that substantially alter them

Vale does not provide guidance in the form of quantitative predictions about its future financial performance. The Company seeks to disseminate as much information about its vision of the various markets where it operates, guidelines and implementation strategies in order to provide investors in the capital markets a basis for the formation of expectations about its performance in the medium and long term.

The financial statements for the year ended December 31, 2009 were issued and filed with the CVM on February 10, 2010. Below is a description of subsequent events, which were included in the financial statements in compliance with the rules in IAS 24, approved by CVMº 593/09.

Vale redeems securitization notes

In January 2010, Vale announced the early redemption of all securitization notes for export receivables issued in September 2000 and July 2003. The total amount of the principal is US$ 27.5 million for notes from September 2000 with interest of 8.926% per annum and maturing in 2010 and US$ 122.5 million for the notes from July 2003 with interest at 4.43% per annum and maturing in 2013, totaling the early redemption of debt, at a total value of US$ 150 million.

Vale sells Valesul assets

In January 2010, the subsidiary Valesul Aluminio SA entered into an agreement to sell its aluminum assets, located in Rio de Janeiro, to Alumínio Nordeste SA, a subsidiary of the Metalis group, for US$ 31.2 million.

The assets of Valesul included in the agreement are: (i) anode plant, (ii) reduction, (iii) casting, (iv) industrial and administrative services area and (v) inventories.

Vale acquires assets of fertilizer

In January 2010, Vale entered into a contract for purchase and sale of shares through its subsidiary Mineração Naque S.A., with Bunge Fertilizantes S.A. and Bunge Brasil Holdings B.V. to acquire a 100% stake in Bunge Participacoes e Investimentos SA (BPI), a company with assets and holdings in fertilizer companies in Brazil, for US$ 3.8 billion. BPI is controlled by Bunge Ltd. (Bunge), a company listed on the New York Stock Exchange (NYSE). BPI’s asset portfolio consists of: (a) phosphate rock mines and phosphate processing plants, (b) direct and indirect stake of 42.3% in the total capital of Fertilizantes Fosfatados S.A. — Fosfertil (Fosfertil) — a company listed on the BM&F Bovespa exchange. The transaction does not involve retail businesses and / or distribution of fertilizers. Under the transaction, US$ 1.65 billion will be paid for by the BPI’s assets of phosphate rock and phosphates, and the balance of US$ 2.15 billion refers to shares held directly and indirectly by BPI in Fosfertil.

In January 2010, as part of the process of acquiring 100% stake in BPI, Vale concluded, through its subsidiary Mineração Naque S.A. (“Naque”) (a) options contracts for sale of shares (options contracts) regarding shares issued by Fertifos Administração e Participações S.A. (Fertifos). Options contracts were concluded with Fertilizantes Heringer S.A. (Heringer) and Fertilizantes do Paraná Ltda. (Fertipar), and are subject to certain conditions, among which, the effective acquisition of the fertilizer business of the Bunge group in Brazil. These contracts grant to Naque the right to acquire up to 1.46% of the shares issued by Fertifos. The exercise price of the options contract with Fertipar is US$ 39,553,130.99, while the exercise price of the contract with Heringer is US $ 2,390,396.79, totaling US$ 41,943,527.77.

(b) option contract for the purchase and sale of shares (option contract) with Yara Brazil Fertilizers SA (Yara), regarding shares issued by Fertifos e Fosfertil — a company listed on the BM&F Bovespa exchange. The option agreement was concluded with Yara, such contract being subject to certain conditions, among which the effective acquisition of the fertilizer business of the Bunge group in Brazil. This agreement grants Naque the right to acquire a direct and indirect stake of 15.46% in the capital of Fosfertil, accounting for 17.57% of common shares and 14.37% of preferred shares. The exercise price of the option contract with Yara is US$ 785,121,943.00, the same price per share being used as agreed with BPI, Heringer and Fertipar to acquire their shares in Fosfertil.

In February 2010, also as part of the process of acquiring 100% stake in BPI, Vale concluded, through Naque, an option agreement with The Mosaic Company (Mosaic), a company listed on the New York Stock Exchange (NYSE), for shares owned by Mosaic issued by Fertifos e Fosfertil, a company listed on the BM&F Bovespa exchange. The exercise of the option contract is subject to certain conditions, among which the effective takeover of the fertilizer business of the Bunge group in Brazil. The agreement grants the right to Naque to acquire direct and indirect stakes of 20.27% in the capital of Fosfertil, accounting for 27.27% of common shares and 16.65% of preferred shares.

Upon completion of the acquisition of direct and indirect holdings of BPI, Heringer, Fertipar, Yara and Mosaic, Vale will hold a 78.90% stake in Fosfértil, accounting for 99.81% of common shares and 68.24% of preferred shares. The total price to be paid for acquiring the 78.90% stake in Fosfértil is US $ 4,006,876,600.55.

According to Law 6.404/76 and standards of the Brazilian capital market, and once the acquisition of the shares mentioned is completed, Vale will launch a mandatory tender offer to buy the remaining shares held by minority shareholders of Fosfértil, amounting to 0.19% of the total, for the same price per share agreed with BPI, Heringer, Fertipar, Yara and Mosaic.

Besides the acquisition of Fosfertil shares, Vale also signed a contract with Mosaic for the purchase of a processing plant located in Cubatao, state of São Paulo, for US$ 50 million. The plant has a nominal capacity to produce 300,000 metric tons per year of single superphosphate (SSP), the phosphate nutrient most used Brazil.

3.4 Policy for allocation of results

		Fiscal Year Ended December 31
		2009		2008		2007
a. Rules on retention of profits		Statutory Rule: According to Article 43 of the Bylaws, there should be a consideration in the proposal for distribution of profits of the formation of (i) Exhaust Reserve, to be constituted in the form of tax legislation, and (ii) Investment Reserve for the purpose of ensuring the maintenance and development of activities that constitute the main object of the company, in an amount not exceeding 50% (fifty percent) of net income distributable up to the maximum capital of the company.
		Practice adopted by the Company: Of the total of R$ 10,287,467,859.00, R$ 6,653,281,672.35 (64.7%) were destined to a Reserve for expansion / investment and R$ 119,652,582.99 (1.16%) for the Tax Incentive Reserve. Of the total reserve for the expansion / investment, 50% was allocated based on statutory authorization and 14.7% was destined for the reserve based on the capital budget approved at the AGM.		Practice adopted by the Company: Of the total R$ 21,301,991,594.93, R$ 15,178,507,589.28 (71.3%) destined to a Reserve for expansion / investment. Of the total for the Reserve expansion / investment, 50% was sent based on statutory authorization, and 21.3% was destined for the reserve based on the capital budget approved by the AGM.		Practice adopted by the Company: Of the total of R$ 20,067,179,260.21, R$ 80,367,507.98 (0.4%) was destined to a Reserve for Tax Incentives and R$ 14,219,808,364.43 (70.9%) was destined to a Reserve for expansion / investment. Of the total for the Reserve expansion / investment, 50% was based on statutory authorization and 20.9% was destined for the reserve based on the capital budget approved by the AGM.
b. Arrangements for distribution of dividends		Statutory Rule: According to Article 44 of the bylaws, at least 25% (twenty five percent) of annual net profits, adjusted according to the law, will be provided for the payment of dividends.
		Practice adopted by the Company: 31% of annual net income was allocated to the payment of dividends		Practice adopted by the Company: 25% of annual net income was allocated to the payment of dividends		Practice adopted by the Company: 25% of annual net income was allocated to the payment of dividends
c. Frequency of dividend distribution		In accordance with the Dividend Policy adopted by Vale, payments are made semiannually in the months of April and October.
d. Restrictions to dividend distribution		n / a		n / a		n / a

3.5 Summary of distributions of dividends and retained earnings occurred.

Fiscal Year Ended December 31

2009

2008

2007

Adjusted net income for dividend payments (in R$)

9,655,367,895.00

20,238,010,119.00

19,066,901,163.00

Percentage of dividend over the adjusted net profit

31.0

25.0

25.0

Rate of return in relation to equity (%)

11.0

22.0

35.0

Dividend distributed (total)

3,002,086,223.00

5,059,502,530.00

4,766,725,291.00

Net income retained (in R$)

None

None

None

Date of approval of the retention

None

None

None

Amount (R$)

Payment date

Amount (R$)

Payment date

Amount (R$)

Payment date

Interest on Capital

Common

57,865,446.00

31/10/2009

1,281,510,820.00

31/10/2009

700,720,383.00

30/04/2008

Common

1,341,608,462.00

30/04/2010

Preferred Class A

36,937,363.00

31/10/2009

818,029,292.00

31/10/2009

1,040,451,237.00

31/10/2008

Preferred Class A

856,391,538.00

30/04/2010

Common

1,602,122,095.00

31/10/2008

Preferred Class A

449,774,617.00

30/04/2008

Mandatory Dividend

Common

136,691,882.00

31/10/2008

8,771,656.00

31/10/2007

Common

1,669,089,703.00

30/04/2009

Preferred Class A

88,880,536.00

31/10/2008

5,630,303.00

31/10/2007

Preferred Class A

1,065,410,297.00

30/04/2009

Common

584,243,766.00

30/04/2008

Preferred Class A

375,011,234.00

30/04/2008

Other

Common

432,930,223.00

31/10/2010

Preferred Class A

276,535,191.00

31/10/2010

3.6 Dividends declared on account of retained earnings or reserves set aside in the past 3 fiscal years

		Fiscal Year Ended December 31
Dividends distributed to (in R$ thousands):		2009				2008				2007
Retained Earnings			—				—				—
Constituted Reserves			370,507				580,124				370,050

3.7 Debt

The information below refers to the consolidated financial statements of the Company.

		Fiscal Year Ended
		2009
a. Total amount of debt of any kind (in R$ millions)		74,194
b. Debt ratio (current liabilities plus non-current, divided by net worth)		77.5%
c. Another debt index		Total debt / EBITDA: 2.3 and EBITDA/Interest expenses: 10.25

3.7.c (i) Method used to calculate the index

Total debt / EBITDA and EBITDA / Interest expenses: Gross debt is the sum of “Loans and short-term debt,” “Portion of the stock of long-term loans” and “Loans and long-term financing.” EBITDA (EBITDA) is calculated as described in section 3.2.b of this reference form. Interest expenses include the sum of all the capitalized or accrued interest, paid or not, at any given time, which is a result of the debt of the beneficiary.

3.7.c (ii) The reason why the administration believes that the debt ratios indicated are proper for the correct understanding of the financial situation and level of indebtedness of the Company

Vale adopts the debt ratio debt / EBITDA and interest coverage ratio EBITDA / Interest expenses. These indices are widely used by the market (rating agencies and financial institutions) and serve as a benchmark to assess the financial situation of Vale.

The debt ratio Net debt / EBITDA indicates the approximate time it would take for a company to pay all its debts through cash generation.

The interest coverage ratio (EBITDA / Interest expenses) is used to determine the ability of business to generate cash flow to service its debt.

3.8 Obligations of the Company in the fiscal year ended December 31, 2009, in line with the posted collateral and maturity date:

		Maturity
						Between 1 and 3				Between 3 and 5
In R$		Less than 1 year				years				years				Over 5 years
Collateral			331,884,908				480,060,418				335,112,878				454,297,537
Floating Guarantee			0				0				0				0
Unsecured obligations			1,500,000,000				0				4,000,000,000				0

3.9 Other information that the Company deems relevant

In addition to the subsequent events set forth in “3.3”, the Company believes that the following events which have occurred recently are relevant:

Vale issuing Eurobonds

In March 2010, Vale priced the offering of € 750 million in eight years bonds, due in March 2018, with a coupon of 4.375% per annum, payable annually.

The issue, which marker Vale’s debut in the European debt market, had a demand response 10 times greater than the amount subscribed and the bonds were priced with a spread of 140 basis points over mid-swap €, or a spread of 160.3 basis points over the return of the German Bund bonds, resulting in a yield to the investor of 4.441% per annum.

Vale acquires Simandou

In April 2010, Vale acquired from BSG Resources Ltd. (BSGR) a 51% stake in BSG Resources (Guinea) Ltd., which holds concessions for iron ore in Guinea, Simandou South (Zogota) and exploration permits in Simandou North (Blocks 1 & 2). Vale will pay for the acquisition of these assets US$ 2.5 billion, of which US $ 500 million cash (equivalent to R$ 865 million on the date of payment), and the remaining US$ 2 billion in stages subject to the achievement of specific milestones.

The joint venture between Vale and BSGR will implement the Zogota project and conduct feasibility studies for Blocks 1 & 2, with the creation of a logistics corridor for movement of materials through Liberia. For the right to move materials through Liberia, the joint venture is committed to renew 660 km of the Trans-Guinea railway for passenger and light cargo. Vale will be responsible for asset management, marketing and sales of joint venture with the exclusive off-take of the iron ore produced.

Acquisition of fertilizer assets

In May 2010, Vale completed the acquisition through its subsidiary Mineração Naque S.A., of a direct and indirect stake of 58.6% in the capital of Fertilizantes Fosfatados S.A. — Fosfertil (“Fosfértil”) — a company listed on the BM&F Bovespa exchange and Brazil’s largest producer of fertilizer nutrients — and the Brazilian fertilizer assets of Bunge Participacoes e Investimentos SA (BPI) for a total of US$ 4.7 billion. Of that amount, US$ 3.0 billion (equivalent to R$ 5.5 billion at the time of payment) refer to a direct and indirect stake of 58.6% in the capital of Fosfertil, which corresponds to 72.6% of common shares and 51.4% of the preferred shares of Bunge Fertilizantes S.A., Bunge Brasil Holdings B.V., Yara Brasil Fertilizantes S.A. (“Yara”), Fertilizantes Heringer S.A. (“Heringer”) e Fertilizantes do Paraná Ltda. (“Fertipar”) — equivalent to a price per share of US$ 12.0185. The remaining US$ 1.7 billion (equivalent to R$ 3.1 billion at the time of payment) is attributable to the acquisition of the Brazilian fertilizer assets portfolio of BPI, which include phosphate rock mines and phosphate production units but does not include distribution / retail operations.

Under Brazilian corporate law and norms of the capital market, Vale will carry out a mandatory tender offer — to be filed with the CVM, the Securities Commission — to acquire 0.19% of common shares held by minority shareholders of Fosfertil at a value of US$ 12.0185 per share, converted into reais, the same price paid in dollars to other shareholders of Fosfertil.

Additionally, Vale holds a purchase option contract with The Mosaic Company (Mosaic), which grants the Company the option to acquire the direct and indirect interests of Mosaic in Fosfertil, accounting for 27.27% of common shares and 16.65 % of preferred shares and 20.27% of the share capital of Fosfertil, for US$ 1,029,811,129.77, at a price per share of US$ 12.0185. This transaction should be completed in the near future.

Restructuring the aluminum portfolio assets

In May 2010, Vale signed an agreement with Norsk Hydro ASA (Hydro), to transfer all its shares in Alumínio Brasileiro S.A. (Albras), Alunorte — Alumina do Norte do Brasil S.A. (Alunorte) and Companhia de Alumina do Pará (CAP),together with their respective exclusive rights and existing commercial contracts, for US$ 405 million in cash and a certain number of Hydro common shares. After a sharer offering to be held in future by Hydro, this number of shares will represent a 22% stake in Hydro. In addition, Hydro will assume net debt of US$ 700 million.

As part of this transaction, Vale will create a new company Bauxite JV and transfer the Paragominas bauxite mine and all its other bauxite mining rights in Brazil to Bauxite JV. When the transaction is completed, Vale will sell 60% of Bauxite JV to Hydro for US$ 600 million in cash. The remaining portion of 40% will be sold in two equal tranches of 20% in 2013 and 2015, for US$ 200 million each, in cash.

The transaction is subject to approvals of the appropriate governmental authorities and other customary applicable conditions.

4. RISK FACTORS

4.1 Risk factors which may influence investment decisions, especially related risks:

Risks relating to our business

The mining industry is highly exposed to the cyclicality of global economic activity and also requires significant investments of capital.

The mining industry is primarily a supplier of industrial raw materials. Industrial production tends to be the most cyclical and volatile component of global economic activity, which affects demand for minerals and metals. At the same time, investment in mining requires a substantial amount of funds in order to replenish reserves, expand production capacity, build infrastructure and preserve the environment. This structural characteristic is an important source of financial risk for the mining industry.

Adverse economic developments in China could have a negative impact on demand for our products, on our revenues, cash flow and profitability.

China has been the main driver of global demand for minerals and metals over the last few years. In 2009, Chinese demand represented 68% of global demand for seaborne iron ore, 44% of global demand for nickel, 39% of global demand for aluminum and 40% of global demand for copper. The percentage of our operating revenues attributable to sales to consumers in China was 38% in 2009. Although China largely withstood the recent global recession, a contraction of China’s economic growth could result in lower demand for our products, leading to lower revenues, cash flow and profitability. Poor performance in the Chinese real estate sector, one of the largest consumers of carbon steel in China, could also negatively impact our results.

A decline in demand for steel would adversely affect our business.

Demand for our most important products depends on global demand for steel. Iron ore and iron ore pellets, which together accounted for 59% of our 2009 operating revenues, are used to produce carbon steel. Nickel, which accounted for 14% of our 2009 operating revenues, is used mainly to produce stainless and alloy steels. Demand for steel depends heavily on global economic conditions, but it also depends on a variety of regional and sectorial factors. The prices of different steels and the performance of the global steel industry are highly cyclical and volatile, and these business cycles in the steel industry affect demand and prices for our products. In addition, consolidation in the steel industry could result in vertical backward integration of the steel industry, which in turn could reduce the global seaborne trade of iron ore.

The global seaborne trade of iron ore could also suffer from competition from metallics, such as semi-finished steel and scrap. In certain cases, it may be more economical for steelmakers to charge more scrap in basic oxygen furnaces (“BOF”) and electric arc furnaces (“EAF”), instead of producing pig iron. Semi-finished products, such as billets and slabs, may also be available from fully-integrated steel mills at low cost, reducing overall demand for seaborne iron ore.

The prices of nickel, aluminum and copper, which are actively traded on world commodity exchanges, are subject to significant volatility.

Nickel, aluminum and copper are sold in an active global market and traded on commodity exchanges, such as the London Metal Exchange and the New York Mercantile Exchange. Prices for these metals are subject to significant fluctuations and are affected by many factors, including actual and expected global macroeconomic and political conditions, levels of supply and demand, the availability and cost of substitutes, inventory levels, investments by commodity funds and others and actions of participants in the commodity markets.

Increased availability of alternative nickel sources or substitution of nickel from end use applications could adversely affect our nickel business.

Demand for nickel could be adversely impacted by the substitution of other materials for nickel in present applications. Scrap nickel competes directly with primary nickel as a source of nickel for use in the production of stainless steel, and the choice between them is largely driven by their relative prices and availability. In 2009, the stainless steel scrap ratio fell from 49% to 43%. Nickel pig iron, a product developed by Chinese steel and alloy makers that utilizes low grade lateritic nickel ores, competes with other nickel sources in the production of stainless steel. In 2009, estimated nickel pig iron production increased 17%, representing 7% of global nickel output. Demand for primary nickel may be negatively affected by the direct substitution of primary nickel with other materials in current applications. In response to high nickel prices or other factors, producers and consumers of stainless steel may partially shift from stainless steel with high nickel content (series 300) to stainless steels with either lower nickel content (series 200) or no nickel content (series 400), which would adversely affect demand for nickel.

We may not be able to adjust production volume in a timely or cost-efficient manner in response to changes in demand at peak times.

During periods of high demand, our ability to rapidly increase production capacity is limited, which could render us unable to satisfy our clients’ demand for our products. Moreover, we may be unable to complete expansions and greenfield projects in time to take advantage of rising global demand for iron ore. When demand exceeds our production capacity, we may meet excess customer demand by purchasing iron ore, iron ore pellets or nickel from joint ventures or unrelated parties and reselling it, which would increase our costs and narrow our operating margins. If we are unable to satisfy excess customer demand in this way, we may lose customers. In addition, operating close to full capacity may expose us to higher costs, including demurrage fees due to capacity restraints in our logistics systems.

Conversely, operating at significant idle capacity during periods of weak demand may expose us to higher unit production costs since a significant portion of our cost structure is fixed in the short-term due to the high capital intensity of mining operations. In addition, efforts to reduce costs during periods of weak demand could be limited by labor regulations or previous labor or government agreements.

Regulatory, political, economic and social conditions in the countries in which we have operations or projects could adversely impact our business and the market prices of our securities.

Our financial performance may be negatively affected by regulatory, political, economic and social conditions in countries in which we have significant operations or projects, particularly Argentina, Australia, Brazil, Canada, Colombia, Indonesia, Mozambique, New Caledonia and Peru.

Our operations depend on authorizations and concessions from governmental regulatory agencies of the countries in which we operate. We are subject to laws and regulations in many jurisdictions that can change at any time, and changes in laws and regulations may require modifications to our technologies and operations and result in unanticipated capital expenditures.

Actual or potential political changes and changes in economic policy may undermine investor confidence, result in economic slowdowns and otherwise adversely affect the economic and other conditions under which we operate in ways that could have a material adverse effect on our business.

Protests may complicate mining and logistics operations and projects.

Protestors have already taken actions to disrupt our operations and projects, and they may continue to do so in the future. Although we vigorously defend ourselves against illegal acts, while supporting the communities living near our operations, future attempts by protestors to harm our operations could adversely affect our business.

We could be adversely affected by changes in government policies, including the imposition of new taxes or royalties on mining activities.

Mining is subject to government regulation in the form of taxes and royalties, which can have an important financial impact on our operations. In the countries where we operate, governments may impose taxes, raise existing taxes and royalties, or change the basis on which they are calculated in a manner that unfavorable to us.

Our projects are subject to risks that may result in increased costs or delay that prevent their successful implementation.

We are investing to further increase our production capacity, logistics capabilities and to expand the scope of minerals we produce. Our projects are subject to a number of risks that may adversely affect our growth prospects and profitability, including the following:

•

We may encounter delays or higher than expected costs in obtaining the necessary equipment or services to build and operate a project.

•

Our efforts to develop projects according to schedule may be hampered by a lack of infrastructure, including a reliable power supply.

•

We may fail to obtain, or experience delays or higher than expected costs in obtaining, the required permits to build a project.

•

Changes in market conditions or regulations may make a project less profitable than expected at the time we initiated work on it.

•

Adverse mining conditions may delay and hamper our ability to produce the expected quantities of minerals.

•

Some of our development projects are located in regions where tropical diseases, malaria, yellow fever and other contagious diseases such as AIDS are a major public health issue and pose health and safety risks to our employees.

Our controlling shareholder has significant influence over Vale, and the Brazilian government has certain veto rights.

As of December 31, 2009, Valepar S.A. owned 53.9% of our outstanding common stock and 33.3% of our outstanding capital. As a result of its share ownership, Valepar can control the outcome of some actions requiring shareholder approval.

The Brazilian government owns 12 golden shares of Vale, granting it limited veto power over certain company actions, such as changes to our name, the location of our headquarters and our corporate purpose as relates to mining activities.

Our governance and compliance processes may fail to prevent regulatory penalties and reputational harm.

We operate in a global environment, and our activities straddle multiple jurisdictions and complex regulatory frameworks with increased enforcement activities worldwide. Our governance and compliance processes, which include the review of internal control over financial reporting, may not prevent future breaches of law, accounting or governance standards. We may be subject to breaches of our Code of Ethical Conduct, business conduct protocols and instances of fraudulent behavior and dishonesty by our employees, contractors or other agents. Our failure to comply with applicable laws and other standards could subject us to fines, loss of operating licenses and reputational harm.

Some of our operations depend on joint ventures or consortia, and our business could be adversely affected if our partners fail to observe their commitments.

We currently operate important parts of our pelletizing, bauxite, coal and steel businesses through joint ventures with other companies. Important parts of our electricity investments and all of our oil and gas projects are operated through consortia. Our forecasts and plans for these joint ventures and consortia assume that our partners will observe their obligations to make capital contributions, purchase products and, in some cases, provide skilled and competent managerial personnel. If any of our partners fails to observe its commitments, the affected joint venture or consortium may not be able to operate in accordance with its business plans, or we may have to increase the level of our investment to implement these plans. For example, the joint venture company that owns our Goro project in New Caledonia has a minority shareholder, Sumic Nickel Netherlands B.V., with a put option to sell us 25%, 50%, or 100% of its shares. Sumic may exercise the put option if the cost of the project exceeds a certain value agreed between the shareholders and certain other conditions are met.

Environmental, health and safety regulation may adversely affect our business.

Our operations involve the use, handling, discharge and disposal of hazardous materials into the environment and the use of natural resources, and nearly all aspects of our activities, products, services and projects around the world are subject to environmental, health and safety regulation, which may expose us to increased litigation or increased costs. Such regulations require us to obtain environmental licenses, permits and authorizations for our operations, and to conduct environmental impact assessments in order to get the approval for our projects and permission for initiating construction. Additionally, all significant changes to existing operations must also undergo the same procedure. Difficulties in obtaining permits may lead to construction delays or cost increases, and in some cases may lead us to postpone or even abandon a project.

Environmental regulation also imposes standards and controls on activities relating to mineral research, mining, pelletizing activities, railway and marine services, decommissioning, refining, distribution and marketing of our products. Such regulation may give rise to significant costs and liabilities.

In addition, community activist groups and other stakeholders may increase demands for environmentally sustainable practices, which could entail significant cost increases and reduce our profitability. Litigation relating to these or other matters may adversely affect our financial condition or cause harm to our reputation.

In recent years, environmental regulation in many countries in which we operate has become stricter, and it is possible that more regulation o pollution emission or more aggressive enforcement of existing regulations will adversely affect us by imposing restrictions on our activities and products, creating new requirements for the issuance or renewal of environmental licenses, raising our costs or requiring us to engage in expensive reclamation efforts.

Concern over climate change, and efforts to comply with international undertakings under the Kyoto Protocol, could lead governments to impose limits on carbon emissions applicable to our operations, which could adversely affect our operating costs or our capital expenditure requirements. For example, the Brazilian government passed a carbon emissions law in December 2009, although it has not yet promulgated rules establishing specific limits on carbon emissions from mining activities.

Our reserve estimates may materially differ from mineral quantities that we may be able to actually recover; our estimates of mine life may prove inaccurate; and market price fluctuations and changes in operating and capital costs may render certain ore reserves uneconomical to mine.

Our reported ore reserves are estimated quantities of ore and minerals that we have determined can be economically mined and processed under present and anticipated conditions to extract their mineral content. There are numerous uncertainties inherent in estimating quantities of reserves and in projecting potential future rates of mineral production, including factors beyond our control. Reserve engineering involves estimating deposits of minerals that cannot be measured in an exact manner, and the accuracy of any reserve estimate is a function of the quality of available data and engineering and geological interpretation and judgment. As a result, no assurance can be given that the indicated amount of ore will be recovered or that it will be recovered at the rates we anticipate. Estimates may vary, and results of our mining and production subsequent to the date of an estimate may lead to revisions of estimates. Reserve estimates and estimates of mine life may require revisions based on actual production experience and other factors. For example, fluctuations in the market prices of minerals and metals, reduced recovery rates or increased operating and capital costs due to inflation, exchange rates or other factors may render proven and probable reserves uneconomic to exploit and may ultimately result in a restatement of reserves.

We may not be able to replenish our reserves, which could adversely affect our mining prospects.

We engage in mineral exploration, which is highly speculative in nature, involves many risks and frequently is non-productive. Our exploration programs, which involve significant capital expenditures, may fail to result in the expansion or replacement of reserves depleted by current production. If we do not develop new reserves, we will not be able to sustain our current level of production beyond the remaining lives of our existing mines.

Once mineral deposits are discovered, it can take a number of years from the initial phases of drilling until production is possible, during which the economic feasibility of production may change. Substantial time and expenditures are required to:

•

establish mineral reserves through drilling;

•

determine appropriate mining and metallurgical processes for optimizing the recovery of metal contained in ore;

•

obtain environmental and other licenses;

•

construct mining, processing facilities and infrastructure required for greenfield properties; and

•

obtain the ore or extract the minerals from the ore.

If a project proves not to be economically feasible by the time we are able to exploit it, we may incur substantial write-offs. In addition, potential changes or complications involving metallurgical and other technological processes arising during the life of a project may result in cost overruns that may render the project not economically feasible.

We face rising extraction costs over time as reserves deplete.

Reserves are gradually depleted in the ordinary course of a given mining operation. As mining progresses, distances to the primary crusher and to waste deposits become longer, pits become steeper and underground operations become deeper. As a result, over time, we usually experience rising unit extraction costs with respect to each mine. Several of our mines have been operating for long periods, and we will likely experience rising extraction costs per unit in the future at these operations in particular.

Labor disputes may disrupt our operations from time to time.

A substantial number of our employees, and some of the employees of our subcontractors, are represented by labor unions and are covered by collective bargaining or other labor agreements, which are subject to periodic negotiation. Negotiation may become more difficult in times of higher prices. The right to strike is recognized in almost all of the countries where we have operations, so that plants in operation or essential projects, both ours and those of our service providers, could be affected by strikes and other stoppages. A number of our employees at our Canadian nickel operations in Sudbury, Port Colborne and Voisey’s Bay have been on strike since mid-2009, which has resulted in reduced production from these operations.

We may face shortages of equipment, services and skilled personnel.

The mining industry has faced worldwide shortages of mining and construction equipment, spare parts, contractors and other skilled personnel during periods of high demand for minerals and metals and intense development of mining projects. We may experience longer lead-times for mining equipment and problems with the quality of contracted engineering, construction and maintenance services. We compete with other mining companies for highly skilled executives and staff with relevant industry and technical experience, and we may not be able to attract and retain such people. Shortages during peak periods could negatively impact our operations, resulting in higher production or capital expenditure costs, production interruptions, higher inventory costs, project delays and potentially lower production and revenues.

Higher energy costs or energy shortages would adversely affect our business.

Energy costs are a significant component of our cost of production, representing 16.4% of our total cost of goods sold in 2009. To fulfill our energy needs, we depend on the following, all measured in tons of oil equivalent (TOE): oil by-products, which represented 39% of total energy needs in 2009, electricity (38%), coal (15%) and natural gas (6%).

Fuel costs represented 10% of our cost of goods sold in 2009. Increases in oil and gas prices adversely affect margins in our logistics services, mining, iron ore pellets, nickel and alumina businesses.

Electricity costs represented 6.3% of our total cost of goods sold in 2009. If we are unable to secure reliable access to electricity at acceptable prices, we may be forced to curtail production or may experience higher production costs, either of which would adversely affect our results of operations. In 2009 we generated 37% of our global consumption of electricity by mans of hydroelectric power stations or from the fuel generation potential. We are developing new thermal and hydro plants and beginning exploration programs for natural gas so as to increase our energy production and reduce exposure to the volatility of prices and energy access.

Electricity shortages have occurred in Brazil in the past and could reoccur in the future, and there can be no assurance that the Brazilian government’s policies will succeed in encouraging enough growth in power generation capacity to meet future consumption increases. Future shortages, and government efforts to respond to or prevent shortages, may adversely impact the cost or supply of electricity for our Brazilian aluminum and ferroalloy operations, which are electricity-intensive. Changes in the laws, regulations or governmental policies regarding the power sector or concession requirements could also reduce our expected returns from our investments in power generation.

Through our subsidiary PT International Nickel Indonesia Tbk (PTI), we process lateritic nickel ores using a pyrometallurgical process, which is energy-intensive. Although PTI currently generates a majority of the electricity for its operations from its own hydroelectric power plants, low rainfall or other hydrological factors could adversely affect electricity production at PTI’s plants in the future, which could significantly increase the risk of higher costs or lower production volume.

Price volatility—relative to the U.S. dollar—of the currencies in which we conduct operations could adversely affect our financial condition and results of operations.

A substantial portion of our revenues and debt is denominated in U.S. dollars, and changes in exchange rates may result in (i) losses or gains on our net U.S. dollar-denominated indebtedness and accounts payable and (ii) fair value losses or gains on our currency derivatives used to stabilize our cash flow in U.S. dollars. In 2009 and 2007, we had currency gains of US$665 million and US$1.639 billion, respectively; in 2008, we had currency losses of US$1.011 billion. In addition, the price volatility of the Brazilian real, the Canadian dollar, the Indonesian rupiah and other currencies against the U.S. dollar affect our results since most of our costs of goods sold are denominated in currencies other than the U.S. dollar, principally the real (64% in 2009) and the Canadian dollar (16% in 2009), while our revenues are mostly U.S. dollar-denominated. We expect currency fluctuations to continue to affect our financial income, expense and cash flow generation.

Significant volatility in currency prices may also result in disruption of foreign exchange markets and may limit our ability to transfer or to convert certain currencies into U.S. dollars and other currencies for the purpose of making timely payments of interest and principal on our indebtedness. The central banks and governments of the countries in which we operate may institute restrictive exchange rate policies in the future.

We may not have adequate insurance coverage for some business risks.

Our businesses are generally subject to a number of risks and hazards, which could result in damage to, or destruction of, mineral properties, facilities and mining equipment. The insurance we maintain against risks that are typical in our business may not provide adequate coverage. Insurance against some risks (including liabilities for environmental pollution or certain hazards or interruption of certain business activities) may not be available at a reasonable cost. As a result, accidents or other negative developments involving our mining, production or transportation facilities could have a material adverse effect on our operations.

4.2 Vale’s expectations for reduction or increase in exposure to the above-mentioned risks, if relevant.

We constantly analyze the risks the company is exposed to and which may adversely affect our business, financial situation and results of our operations. We monitor permanently changes in the macro-economic and sectorial scenario which might impact our activities, by tracking the main performance indicators. Our policy is one of continuous focus on financial discipline and conservative cash management. At present we do not identify any scenario which would lead to a reduction or increase in the risks mentioned in section 4.1.

4.3 Legal, administrative or arbitral suits in which Vale or its subsidiaries area part, organized by labor, tax, civil and other suits: (i) which are not confidential, and (ii) which are significant for Vale’s business and that of its subsidiaries.

(I) Labor

1 

Jurisdiction		4a Turma do Tribunal Regional do Trabalho de Minas Gerais
Instance		2nd Instance
Date of filing		27/11/2006
Parties in the suit		Public Prosecutor for Labor matters (plaintiff) and Vale (defendant)
Amounts, goods or rights involved		R$ 520,429.50
Main facts		The MG Public Prosecutor for Labor matters filed a civil suit, questioning Vale’s outsourced activities. An unfavorable decision was given to Vale in the second instance, forcing the company in the region of Minas Gerais, to refrain from outsourcing some services allegedly linked to its main activity. Furthermore, it was decided that by way of indemnity for collective damage, the amount of R $100,000 should be paid. Vale presented an appeal the Supreme Labor Tribunal, which has not yet been assessed.
Chances of loss		Possible
Analysis of impact in the case of losing the suit/ Reasons for importance for the Company		In case of maintenance of the unfavorable decision, Vale is obliged, in Minas Gerais, to refrain from outsource services for operation of machinery and equipment for mining, such as back-hoes, excavators and drilling equipment, monitoring and reading of instruments at dams and waste stacks, drafting and implementation of the blasting plan — detonation, thus having to perform such activities through its own employees; and to provide for the termination of contracts of outsourcing which may have as their purpose the services mentioned above.
Amount provisioned (if any)		None

2

Court		1a Vara Federal de Parauapebas — Pará
Instance		1st Instance
Date of filing		07.03.2008
Parties in the suit		Public Prosecutor for Labor matters (plaintiff) and Vale and 42 other firms (defendants)
Amounts, goods or rights involved		108,600,000.00 (one hundred and eight million, six hundred thousand reais)
Main facts		Public Civil Action proposed by the public prosecutor for labor matters against Vale and another 42 companies which provide services, requiring they be condemned to pay for hours spent in transit (Carajás/Sossego), under the claim that the workplaces are difficult to access and not served by public transport. The action also asks for collective damages. Vale has presented its defence alleging the existence of public transport, that the locations are easily accessible and the validity of their collective agreements.
		In 12.03.2010, the decree was published condemning only Vale to pay indemnity for damages to the amount of R$100 million and another R$200 million for practicing social dumping. Temporary relief was granted so that Vale could determine, immediately, how many hours travelling each of its employees used, with a penalty of a fine of R$100,000 per worker if not done, as well as refrain from allowing contractors for Vale including on their cost worksheet expenses with hours paid travelling and allied costs.
		As a result of a request for decisions by Odebrect, one of the 42 defendands in this lawsuit, in the Request for Corrective Judgement filed by Vale as a response, the Inspector General of the Supreme Labor Tribunal in Brasilia, recognized the allegations and reversed the temporary relief order granted by the local judge, so that Vale and the other companies may appeal without having to comply immediately with the sentence passed. Requests to amend the decision were filed by Vale and other defendants. Currently, the company is awaiting decisions on these requests for amendments.

3

Jurisdiction		2a Vara do Trabalho de Vitória/ES
Instance		1st Instance
Date of filing		19/09/2001
Parties in the suit		Vale S.A. (ré) e SINDFER — Railroad union of ES and MG (plaintiff)
Amounts, goods or rights involved		Guarantee of the operational activities at the Tubarão Complex.
Main facts		In 2001, the SINDFER union filed a public civil action, whose object was the compliance of areas of the Tubarão Complex with the dictates of NR-10 (safety of premises and services in electricity). After production of expert evidence, Vale was ordered to implement in their operational facilities, located in the State of Espírito Santo, all technical measures for the protection of work against risks by electricity provided for in the NR. The judge granted Vale temporary relief, with a period of six months for compliance, ending 19/11/09, with payment of a daily fine of R$100 thousand for non-compliance. After rounds of negotiation, and several inspections of areas of the Complex, a legal agreement was signed between the parties, establishing a timeline for implementation of technical measures, with a deadline of 31.12.2011, which was duly approved by the court on 11 March 2010.
Chances of loss		Probable
Analysis of impact in the case of losing the suit/ Reasons for importance for the Company		Any violation of the adjusted schedule between the parties, may risk an embargo on Tubarão Complex activities, as well as the application of a monetary penalty.
Amount provisioned (if any)		None

4

Jurisdiction		Juízo do Trabalho de Maruim/SE
Instance		3rd Instance (TST)
Date of filing		18.08.2006
Parties in the suit		Vale S.A. (defendant) and Union for workers extracting iron, basic and precious metals-Sindimina (plaintiff)
Amounts, goods or rights involved		Guarantee of the operational activities at the potassium chlorate mine in Sergipe.
Main facts		Lawsuit brought by SINDIMINA union in the State of Sergipe, aiming to improve the suitability of the working conditions of employees in the underground mine to bring them up to regulatory standard NR 15, especially as regards the temperature of the mine. In the first instance, it was decided on the closing of the underground mine, but such determination was suspended by writ. Subsequently, partial success was granted to Vale’s appeal to withdraw the order closing the mine, and determine the suitability of the working conditions of mine in relation to NR-15. Vale is still contesting the decision, to demonstrate compliance with the legal standards applicable to the activity. The increased risk of a conviction would be the closing of the mine, as determined by the 1st Degree Judge and rejectd through an ordinary appeal. Vale is awaiting the result of an appeal before the TST to reverse the unfavourable parts of the decision of the TRT.
Chances of loss		Probable
Analysis of impact in the case of losing the suit/ Reasons for importance for the Company		Any unfavourable decision may risk imposing an obligation to do so, fines and, in the final analysis the embargo of the activities of the underground mine for exploitation of Potassium Chlorate, as well as enforcement of a monetary penalty.
Amount provisioned (if any)		None

(II) Tax

The tables below present a description of individual tax cases considered relevant to the business of the company and/or its subsidiaries.

5

Jurisdiction		5a Vara Federal Cível do Rio de Janeiro (originário)
Instance		2nd judicial Instance — Regional Federal Tribunal of 2nd Region (present)
Date of filing		11/02/2008
Parties in the suit		Vale (plaintiff) and Head of the IRS in Rio de Janeiro (defendant)
Amounts, goods or rights involved		1,320,215,387.84
Main facts		Vale proposed preventive judicial measures designed to exclude export revenues from the calculation base of CSSL export earnings. In 2008, Vale obtained a favorable decision by which income from exports were excluded from CSSL calculation base. The IRS appealed against this decision and it is currently pending judgment. The amount of unpaid CSSL tax according to that decision amounts to $1.320 billion which provisioned for, despite the prognosis of losing being possible. If the final decision is unfavorable, Vale might be charged to pay up the value of CSSL owed without penalties.
Chances of loss		Possible
Analysis of impact in the case of losing the suit/ Reasons for importance for the Company		In the event of a possible unfavorable decision, Vale shall disburse the provisioned values, and change the currently procedure in order to include the export revenues earned in the CSSL calculation basis.
Amount provisioned (if any)		R$1,320,215,387.84

6

Jurisdiction		Primeira Turma Ordinária da Segunda Câmara da Primeira Seção do Conselho Administrativo de Recursos Fiscais
Instance		2nd Administrative Instance
Date of filing		28/3/2008
Parties in the suit		IRS (plaintiff) and Vale (defendant)
Amounts, goods or rights involved		R$8,805,000,000.00
Main facts		The provisional measure 2,158-34/2001 states the taxation of profits earned by companies or subsidiaries abroad. In 2003, Vale filed a writ in order to have recognized its right to not be subject to the IRPJ (Corporate Income Tax) and CSL (Social Contribution on Net Income) in accordance to the 74th article the provisional measure above and its subsequent re-editions, as governed by IN 213/02. In the company’s view, the provisional measure 2,158-34/2001 is in disagreement with the Federal Constitution. Vale got a preliminary injunction, but it was not confirmed by the first degree decision. The appeal presented by Vale was received on both counts, restoring the effects of the injunction and suspending the chargeability of tax credit.
		Despite the suspensive effect granted by the appeal, Vale was charged to pay IRPJ and CSSL on profits earned by affiliates and subsidiaries abroad, with a fine of 75%, through a administrative proceeding. The goal of the IRS was to prevent lapsing of the charge, once the statue of limitations only allows the tax charge for the period covered in the aforementioned Writ. Currently, the judgment of Vale’s appeal at Administrative Council for Tax Appeals is pending of decision.
Chances of loss		Remote
Analysis of impact in the case of losing the suit/ Reasons for importance for the Company		In the event of a possible unfavorable decision, profits earned and not distributed by subsidiaries or affiliates abroad will be taxed
Amount provisioned (if any)		None

7

Jurisdiction		Primeira Turma Ordinária da Segunda Câmara da Primeira Seção do Conselho Administrativo de Recursos Fiscais
Instance		2nd Administrative Instance
Date of filing		10/12/2007
Parties in the suit		IRS (plaintiff) and Vale (defendant)
Amounts, goods or rights involved		R$2,583,000,000.00
Main facts		The provisional measure 2,158-34/2001 states the taxation of profits earned by companies or subsidiaries abroad. In 2003, Vale filed a writ in order to have recognized its right to not be subject to IRPJ and CSL in accordance to the 74th article of the provisional measure above and its subsequent re-editions, as governed by IN 213/02. In the company’s view, the provisional measure 2,158-34/2001 is in disagreement with the Federal Constitution. Vale got a preliminary injunction, but it was not confirmed by the first degree decision. The appeal presented by Vale was received on both counts, restoring the effects of the injunction and suspending the chargeability of tax credit.
		Despite the suspensive effect granted by the appeal. Vale was charge to pay IRPJ and CSSL on profits earned by affiliates and subsidiaries abroad, with a fine of 75%, through a administrative proceeding. The goal of the IRS was to prevent the case lapsing of the charge, once the statue of limitations only allows the tax charge for the period covered in the aforementioned Writ. Currently, the judgment of Vale’s appeal at the Administrative Council for Tax Appeals is pending of decision
Chances of loss		Remote
Analysis of impact in the case of losing the suit/ Reasons for importance for the Company		In the event of a possible unfavorable decision, profits earned and not distributed by subsidiaries or affiliates abroad will be taxed
Amount provisioned (if any)		None

(III) Civil

The tables below present a description of individual civil nature processes considered relevant to the business of the company and/or its subsidiaries.

8

Jurisdiction		41a Vara Cível/TJRJ
Instance		1st Instance
Date of filing		17.03.2008
Parties in the suit		Vale (plaintiff) and Movimento dos Sem Terra — MST (defendant)
Amounts, goods or rights involved		Protection of the company’s asets and guarantee of its operations
Main facts		Vale filed a common suit with a request for anticipated relief obliging the defendant to cease attacks, violent acts or incitements which cause the operational stoppage of the company by the MST. Relief was granted, as soon as the case was judged in the year 2008, establishing that the MST must refrain from such acts.
Chances of loss		Remote
Analysis of impact in the case of losing the suit/ Reasons for importance for the Company		The lawsuit was initiated in order to ensure the protection of the assets of the company and its operational activities. An possible unfavorable decision can increase the exposure of the company to MST attacks.
Amount provisioned (if any)		None.

9

Jurisdiction		30a Vara Federal / Justiça Federal do RJ
Instance		1st Instance
Date of filing		18.08.2006
Parties in the suit		Federal Rail Network (Rede Ferroviária Federal S.A.), succeeded by the Federal Union (plaintiff) and Vale (defendant)
Amounts, goods or rights involved		R$2,418,867,546.10
Main facts		The plaintiff filed a claim for reparation from the Company to receive contractual amounts, damages, lost profits, among other amounts, for alleged breach of contractual obligations on the part of Vale. The contract concluded between the parties involved railway transposition in the city of Belo Horizonte. The lawsuit is at the phase of legal discovery.
Chances of loss		Remote
Analysis of impact in the case of losing the suit/ Reasons for importance for the Company		Any unfavorable decision could generate a financial loss for the company, in the light of the amounts involved.
Amount provisioned (if any)		None

10

Jurisdiction		48a Vara Cível/TJRJ
Instance		1st Instance
Date of filing		08.07.2009
Parties in the suit		Vit Shoes Calçados (plaintiff) and Vale (defendant)
Amounts, goods or rights involved		Ownership rights over the new logo launched by the company in December 2007.
Main facts		The plaintiff brought a compensatioin suit with request for early relief, requesting an injunction to make the company refrain from using the logo of the Vale and its variations, and compensate for moral and material damages when the judgment is given. The preliminary injunction was rejected. The process is in the stage of production of evidence.
Chances of loss		Remote.
Analysis of impact in the case of losing the suit/ Reasons for importance for the Company		Any unfavorable decision in the lawsuit would generate financial losses for the Company and would harm its image, since Vale would lose the right to use its logo which is already widely known in Brazil and abroad
Amount provisioned (if any)		None.

11

Jurisdiction		5a Vara Federal de Vitória — ES/TRF 2a Região
Instance		2nd Instance
Date of filing		10.11.1997
Parties in the suit		Federal Public Prosecutor — ES (plaintiff) and Federal Union, Gerdau, Arcelor, Usinas, Vale and Companhia Docas do Espírito Santo - CODESA (defendants)
Amounts, goods or rights involved		Incalculable amount — application for annulment of the concession contract for use of port terminals for the Tubarão Complex.
Main facts		This is a Public Civil Action which aims to annul the authorization by which Vale and some of the other defendants operate the Port Terminal at Praia Mole, in the State of Espírito Santo. In November 2007, after 10 years of conducting the proceedings, Vale obtained a favorable decision judging the requests to be without foundation and recognizing the validity of contracts of accession that allow exploitation of port terminals located in Praia Mole. The Federal Public Prosecutor appealed on 01.04.08 and the lawsuit awaits judgment in the Federal Regional Tribunal
Chances of loss (probable, possible, remote)		Remote
Analysis of impact in the case of losing the suit/ Reasons for importance for the Company		Incalculable amount
Amount provisioned (if any)		None

(IV) Environmental

12

Jurisdiction		2a Vara Cível da Comarca de Itabira/MG
Instance		1st Instance
Date of filing		26.09.1996
Parties in the suit		Town Hall of Itabira (plaintiff) and Vale (defendant)
Amounts, goods or rights involved		R$2,521,932,696.02
Main facts		The municipality of Itabira seeks compensation for expenses that it alleges to have incurred with public services rendered as a consequence of Vale’s mining activities. The case was suspended, pending judgment of a writ filed by Vale to be used in this lawsuit, so that favorable evidence produced in another lawsuit could be used. Although the writ has been judged against Vale, the case continues to be suspended because the court in the first degree has not yet received from the TJ/MG information on the writ. After this communication, the lawsuit may resume its normal course
Chances of loss		Total amount divided into possible loss (15%) and remote loss (85%).
Analysis of impact in the case of losing the suit/ Reasons for importance for the Company		Any unfavorable decision in the lawsuit would generate financial losses for the Company
Amount provisioned (if any)		None.

13

Jurisdiction		1a Vara Cível da Comarca de Itabira/MG
Instance		1st Instance
Date of filing		22.08.1996
Parties in the suit		Town Hall of Itabira (plaintiff) and Vale (defendant)
Amounts, goods or rights involved		R$2,034,753,711.70
Main facts		State in which it claims that the operations of the iron mines in Itabira caused environmental and social damage and requires the restoration of the site and the implementation of environmental programs in the region. Expert witnesses were used in this case, and the report issued jointly by IBAMA and FEAM was favourable to Vale, but the Municipality requested the production of new expert evidence, which was accepted by the judge. The final outcome of this case is awaited, with the expectation of decision favorable to Vale
Chances of loss		Total amount divided into possible loss (15%) and remote loss (85%).
Analysis of impact in the case of losing the suit/ Reasons for importance for the Company		Any unfavorable decision in the lawsuit would generate financial losses for the Company
Amount provisioned (if any)		None.

4.4 Judicial, administrative or arbitral awards, which are not under confidentiality, in which the company or its subsidiaries are part and whose Appellees are administrators or former administrators, owners or ex-owners or investors of the company or its subsidiaries

14

Jurisdiction		Appeals Council of the National Financial System — CRSFN
Instance		2nd Instance
Date of filing		23.08.2005
Parties in the suit		This suit was initiated by CVM, as a result of a complaint from the investment club of SUDFER Railway Workers, minority shareholder of MRS Logística S.A. (“MRS”, against: Vale (successor of Ferteco Mineração S.A.); Companhia Siderúrgica Nacional — CSN; Minerações Brasileiras Reunidas S/A — MBR; and the directors of MRS who were involved from 1998 to 2002, namely: Alberto Régis Távora, Andreas Walter Brehm, Chequer Hanna Bou-Habib, Delson de Miranda Tolentino, Estela Maria Praça de Almeida, Henrique Ache Pillar, Hugo Serrado Stoffel, Georg Josef Schmid, Godofredo Mendes Vianna. Guilherme F. Escalhão, Inácio Clemente da Silva, João Paulo do Amaral Braga, Joaquim de Souza Gomes, José Paulo de Oliveira Alves, Julio César Pinto, Julio Fontana Neto, Klaus Helmut Schweizer, Lauro H. Campos Rezende, Luiz Antonio Bonagura, Marcus Jurandir de A. Tabasco,Marianne Von Lachmann, Mauro Rolf Fernandes Knudsen, Oscar Augusto de Camargo Filho, Otávio de Garcia Lazcano, Pablo Javier Q. Bruggemann, Rinaldo Campos Soares, Roberto Gottschalk, Valter Luis de Sousaand Wanderlei Viçoso Fagundes.
Amounts, goods or rights involved		Assessment of possible irregularities related to tariff model of MRS between 1998 and 2002.

Main facts		The lawsuit was initiated by CVM to verify (I) the conduct of MRS directors for alleged tariff mismanagement, characterized by undervalued tariffs for the benefit of captive customers or owners; and (ii) the conduct of the MRS shareholders for contracts signed directly with MRS on allegedly non-equitable terms.
		The suit was judged by the CVM on 05.05.2009, which acquitted all those involved. In December 2009, the CVM offered an automatic appeal to CRFSN, which has not yet been judged.
Chances of loss		Remote.
Analysis of impact in the case of losing the suit/ Reasons for importance for the Company		The eventual reversal of the decision at the first instance can result in the application of a warning or fine for the company.
Amount provisioned (if any)		None.

15

Jurisdiction		48a Vara Cível/TJRJ
Instance		3rd Instance
Date of filing		09.05.2007
Parties in the suit		Petros (plaintiff) and Vale (defendant)
Amounts, goods or rights involved		R$1,107,492,133.75
Main facts		Petros claims receipt of purges made because of inflation arising from the economic plans called Plano Verão and Plano Collor on amounts paid under forward contracts for buying and selling gold concluded with Vale from 1988. Contracts under discussion in this brief were paid up and settled by Petros at that time. However, Petros started legal proceedings aimed at applying the decision on a matter taken in the STJ for savings accounts books, to contracts concluded with Vale, where there is no similarity with those concluded with banking institutions. Vale maintains that the inflationary adjustments are not due, however, all decisions have been unfavourable to the company. Currently the process is in the implementation stage, still pending judgement on appeals by the STJ and PBS.
Chances of loss (probable, possible, remote)		Possible
Analysis of impact in the case of losing the suit		Any unfavorable decision could generate significant financial damage to Company, in light of the amounts under discussion. Additionally, such a decision can open a precedent for similar judgments in other cases where future contracts for sale of gold are in dispute (total of 11 cases).
Amount provisioned (if any)		R$281,361,934.98

16

Jurisdiction		8a Vara Cível /TJMG
Instance		1st Instance
Date of filing		18.02.2004
Parties in the suit		Transger S/A(plaintiff) Defendants: Ferrovia Centro Atlântica S/A, Mineração Tacumã Ltda, KRJ Participações S/A, CPP Participações S/A, Carmo Administração e Participações Ltda, Fundação Vale do Rio Doce de Seguridade Social — Valia and Companhia Siderúrgica Nacional — CSN (defendants)
Amounts, goods or rights involved		Incalculable — Request for annulment of the General Meeting.
Main facts		The plaintiff brought a lawsuit requesting compensation and annulment of the General Meeting authorizing the capital increase of Ferrovia Centro-Atlântica S.A. (“FCA”) in early 2003 on the grounds of alleged practice of abusive acts by FCA’s controlling group. The request was initially judged well founded, but the judgment was reversed by the TJMG in order to have another expert report. The case is currently at the expert investigation stage.
Chances of loss (probable, possible, remote)		Possible
Analysis of impact in the case of losing the suit		Incalculable amount
Amount provisioned (if any)		None

4.5 Impact analysis in case of loss of any relevant and sensitive cases that have not been disclosed in items 4.3 and 4.4 above, informing values involved

The company is not a relevant party in any sensitive cases.

4.6 Judicial, administrative or arbitral lawsuits, repetitive or related, based on similar legal facts and causes, which are not under secrecy and which together are relevant, in which the company or its subsidiaries are part, itemized as labor, tax, civil and other.

(i) Labor

17

Fact and/or legal cause		Subsidiary/joint liability, overtime, additional payment for danger/unhealthy conditions, notice to quit and Hours travelling.
Amounts involved		R$2.252.327.061,72
Amount provisioned (if any)		R$588,625,071.83
Company practice or that of subsidiary which caused the contingency		Difference of interpretation given by the company, employees and unions to various facts, legal and regulatory instruments concerning the issues above.

(ii) Tax

18

Fact and/or legal cause		Determining the basis for the calculation of financial compensation for exploitation of mineral resources — CFEM, which in a simple way means mining royalties.
Amounts involved		R$4,707,270,050.93, related to 182 claims the CFEM.
Amount provisioned (if any)		R$189,011,609.00
Company practice or that of subsidiary which caused the contingency		Divergences between Vale and the National Department of Mineral Production (DNPM) are concerning the composition of the basis for the calculation of the CFEM. The disputes are concerned mainly to the deductions of taxes, incidence of CFEM on the marketing of products processed industrially and the statute of limitations.

(iii) Civil

19

Fact and/or legal cause		Eleven pension funds claim receipt of purges made because of inflation arising from economic plans called Plano Verão and Plano Collor on amounts paid amounts paid under forward contracts for buying and selling gold concluded with Vale from 1988.
Amounts involved		R$1,214,490,060.93
Amount provisioned (if any)		If necessary there is a provision.
Company practice or that of subsidiary which caused the contingency		The contingency has been generated according to the edition of economic plans called Plano Verão and Plano Collor, both created by the Federal Government between 1989 and 1991. The contracts in discussion around these were all paid and given as settled by the plaintiffs at the time. However the plaintiffs started legal proceedings aimed at applying the decision on a matter judged in the STJ for savings accounts books, to contracts concluded with Vale, where there is no similarity with those concluded with banking institutions. Vale maintains that repayment of inflationary purges is not due.

4.7 Other significant contingencies

Below is a description of relevant legal proceedings instituted against the Company after the base date for this Reference Form (31.12.2009):

20

Jurisdiction		IRS
Instance		1st Administrative Instance
Date of filing		12/02/2010
Parties in the suit		IRS (plaintiff) and Vale (defendant)
Amounts, goods or rights involved		R$2,943,631,183.81
Main facts		The provisional measure 2,158-34/2001 provides for the taxation of profits earned by companies or subsidiaries abroad. In 2003, Valley filed a writ to have recognized their right in law not be subject to taxation of IRPJ and CSL in the form of art. 74 of the said provisional measure and subsequent re-editions, as governed by IN 213/02, because, in the company’s view, the provisional measure 2,158-34/2001 is in disagreement with the Federal Constitution. Vale got a preliminary injunction, but it was not confirmed. The appeal presented by Vale was received on both counts, restoring the effects of the injunction and suspending the chargeability of tax credit. Vale was required to pay IRPJ and CSSL on profits earned by affiliates and subsidiaries abroad, with a fine of 75%, in spite of the suspensive effect granted to the appeal. The goal of the IRS was to prevent the case lapsing because of the staute of limitations as regards the right to charge the tax for the period covered in the aforementioned Writ. Currently, the judgment of the appeal by Vale by the Administrative Council for Tax Appeals is awaited.
Chances of loss		Remote
Analysis of impact in the case of losing the suit/ Reasons for importance for the Company		In the event of a possible unfavorable decision, profits earned and not distributed by subsidiaries or affiliates abroad will be taxed
Amount provisioned (if any)		None

21

Jurisdiction		IRS
Instance		1st Administrative Instance
Date of filing		11/01/2010
Parties in the suit		IRS (plaintiff) and Vale (defendant)
Amounts, goods or rights involved		R$11,235,000,000.00
Main facts		The provisional measure 2,158-34/2001 provides for the taxation of profits earned by companies or subsidiaries abroad. In 2003, Valley filed a writ to have recognized their right in law not be subject to taxation of IRPJ and CSL in the form of art. 74 of the said provisional measure and subsequent re-editions, as governed by IN 213/02, because, in the company’s view, the provisional measure 2,158-34/2001 is in disagreement with the Federal Constitution. Vale got a preliminary injunction, but it was not confirmed. The appeal presented by Vale was received on both counts, restoring the effects of the injunction and suspending the chargeability of tax credit. Vale was required to pay IRPJ and CSSL on profits earned by affiliates and subsidiaries abroad, with a fine of 75%, in spite of the suspensive effect granted to the appeal. The goal of the IRS was to prevent the case lapsing because of the status of limitations as regards the right to charge the tax for the period covered in the aforementioned Writ. Currently, the judgment of the appeal by Vale by the Administrative Council for Tax Appeals is awaited.
Chances of loss		Remote
Analysis of impact in the case of losing the suit/ Reasons for importance for the Company		In the event of a possible unfavorable decision, profits earned and not distributed by subsidiaries or affiliates abroad will be taxed.
Amount provisioned (if any)		None

4.8 Rules of the country of origin of foreign issuer and rules of the country in which the foreign Company’s securities are held in custody, if different from the country of origin

Not applicable to the Company.

5. MARKET RISKS

5.1 Description, both quantitative and qualitative, of the main market risks to which the Company is exposed, including against foreign exchange risk and interest rates

Considering the nature of the business and operations of Vale, the main factors of market risk to which the company is exposed are: (i) interest rates, (ii) exchange rates, (iii) commodity prices, and (iv) inputs and other costs.

Exchange risk and interest rate

Vale’s cash flow is subject to price volatility in various currencies. While commodity prices are mostly indexed to the U.S. dollar, most of the costs, expenses and investments are indexed to currencies other than U.S. dollar, mainly the Brazilian real and Canadian dollar.

As this exposure is one of the largest faced by Vale, the Company elected to reduce the potential volatility of cash flows arising from currency mismatch through derivative instruments. The Company’s main strategy is to perform swap operations to equalize the currencies in the cash flow and also convert the debt tied to Brazilian Reais into U.S. dollars to diminish the impact of exchange rate changes on the cash flow of the Company, since the majority of its revenue is denominated in U.S. dollars.

The Company’s cash flow is also exposed to changes in interest rates on loans and financing. This exposure is insignificant when compared to exchange exposure.

The debt linked to variable interest rates in U.S. dollar consists mainly of loans including pre-payment of exports operations, loans at commercial banks and multilateral organizations. In general, these debts are indexed to the Libor rate (London Interbank Offered Rate). The natural hedge between fluctuations in interest rates and U.S. prices of metals reduces the volatility of Vale’s cash flow. In the case of an imbalance in this natural hedge, Vale analyses the option of using financial instruments to achieve the desired protection.

The percentages of the costs tied to various currencies are given in table below:

SUMMARY OF CONSLIDATED COST — PER CURRENCY

2009		BRL				USD				CAD				IDR				AUD				TOTAL
BRGAAP			62	%			17	%			16	%			2	%			3	%			100	%
USGAAP			64	%			15	%			16	%			2	%			3	%			100	%

As regards revenue, 93% is denominated in U.S. dollars and 7% in Brazilian Reais.

Regarding exposure to interest rate, after completion of hedge operations the company has 36% of its debt indexed to floating interest rates.

In December 31, 2009, the value of principal and interest on debt denominated in Brazilian Reais, and converted by swaps into U.S. dollars was R$ 11.6 billion (US$ 6.7 billion), with an average cost of 4.47% after the swap transactions, and maturing between November 2010 and December 2027, with half-yearly interest payments.

Risk of product prices

Vale is exposed to market risks associated with price volatility for its products in the international market. The Company’s main products are: iron ore and pellets, nickel, copper products, aluminum products, coal, platinum and other precious metals.

Nickel, aluminum and copper, platinum and other precious metals are sold in an active global market and traded on commodity exchanges such as the London Metal Exchange and the New York Mercantile Exchange. The prices of these metals are subject to significant fluctuations and are affected by many factors, including macroeconomic conditions and real and expected policies, levels of supply and demand, availability and cost of substitutes, inventory levels, investments by commodity funds and other actions by participants in the commodities market.

Risk of inputs and other costs

Vale is exposed in various markets to risk factors related to cost items. Among them, the most important are: energy and purchase of intermediate or final products. For more details about risks to supply of equipment, services and labor, see item “4.1”.

Rising costs of energy or power failure can adversely affect the Company’s business.

Energy costs are a major component of Vale’s production costs and represent 16.4% of the total cost of goods sold in 2009. To meet the energy demands of the Company, it depends on the following products, measured in tons of oil equivalent (TOE): petroleum products, which accounted for 39% of total energy demand in 2009, electricity (38%), coal (15 %) and natural gas (6%).

Fuel costs represented 9.4% of the cost of goods sold in 2009. Price rises for oil and gas adversely affect Vale’s business interests in logistics, mining, pellets, nickel and alumina.

Electrical energy costs represented 6.2% of the total cost of goods sold in 2009. If it is not possible to guarantee a reliable access to electricity at reasonable prices, Vale may be forced to reduce production or face higher production costs. Any of these alternatives would affect negatively the results of operations.

In the past, there has been rationing of electricity consumption in Brazil, which may recur in the future, as there is no assurance that the Brazilian government’s policies will be sufficient to stimulate the growth of power generation capacity to meet the increase in future consumption. A future increase of shortages and government policies to combat or avoid shortages can negatively affect the cost and supply of electricity in the aluminum and ferro-alloy operations, which require high electricity consumption. Furthermore, changes in laws, regulations or government policies related to the energy sector or concession requirements could reduce the expected returns from investments in power generation.

In its subsidiary PT International Nickel Indonesia Tbk (PTI), Vale processes lateritic nickel ore through a pyrometallurgical process, which requires high energy consumption. Although PTI currently generates most of the electricity used in their operations in their own power plants, some hydrological factors such as low rainfall are likely to negatively affect the production of PTI electric power plants, which may increase considerably the risk of increased costs or reduced production by PTI.

5.2 Policy for Management of market risks, including objectives, strategies and instruments.

Vale has developed its risk management strategy with the objective of providing an integrated view of risks to which it is exposed. To do this, it not only assesses the impact of interest rates, exchange rates, commodity prices and supplies and other costs on business results (market risk), but also the risk from the obligations assumed by third parties to the Company (credit risk) and those inherent to production processes (operational risk).

Traditional metrics for measuring market risk such as VaR (value at risk) are not sufficient to assess the different types of exposure of the Company, as in the case of Vale, the main goal is to avoid situations of financial distress such as a breach of covenants or, more directly, liquidity problems that make it difficult to honor future commitments. The Company manages the probability of breaking of covenants of its debt — which could accelerate the payment of these — as well as the likelihood of using additional credit lines in extreme conditions.

In this context, the Company has an Executive Committee for Risk Management, whose powers are to issue an opinion on the principles and tools of risk management of the Company; and reporting to the Board periodically on the main risks to which Vale is exposed, among other information. For more information, see item 12 of this Reference Form.

a. Risks for which protection is sought

Vale conducts hedge operations with the goal of reducing the risk to commodity prices, foreign exchange, interest rates, costs, among others. These risks are detailed in item “5.2 c”.

b. Asset protection strategy (hedge)

Integrated risk management, which incorporates the various types of risk, as well as the relations between the various market risk factors (correlations), seeks to assess the impact that such events would bring, considering the so-called hedges naturally occurring in the company’s portfolio. Thus, in assessing the risk associated with Vale’s business, one can observe the positive effect associated with the diversification of its portfolio of products and currencies. This diversification implies a natural reduction of risk levels for the company. Any strategy to mitigate risk, when necessary, will be implemented when it significantly contributes to reducing the volatility of cash flow beyond the levels initially observed and desired.

Hedge programs seek to reduce the volatility of cash flow and reduce the likelihood of breach of covenant.

c. Instruments used for asset protection (hedge)

Protection programs for market risk employed by Vale and their objectives are:

•

Protection program of loans and financing in reais: Items protected are secured debts tied to the Brazilian real as the goal of these programs is to transform the debt in BRS into debt in U.S. dollars and thereby achieve a currency balance offsetting receivables (which are basically tied to U.S. dollar) with Vale payments. The instruments used in these operations are swaps that convert the cash flows of debt indexed to the CDI and / or TJLP (long term interest rates) to U.S. dollars. In these operations, Vale pays fixed and / or floating rates in U.S. dollars and receives remuneration linked to the CDI and / or TJLP.

•

Currency cash flow hedge program: the ultimate goal of this program, according to the strategy of protecting the currency of Vale, is balancing exposure to the currencies of receivables with payments. The financial instruments used in these programs are swaps and / or non-deliverable forwards.

•

Protection Program for loans and financing in Euros: the hedged item is a debt tied to the Euro and the goal of this program is to transform the obligation originally in Euros to a requirement tied to the U.S. dollar, reaching a better balance of currencies to offset the receivables — basically pegged to the U.S. dollar — against payments by Vale. The instruments used in this program are swaps where Vale receives floating rates in Euro (Euribor) and pays remuneration linked to floating rates in U.S. dollars (Libor).

•

Exchange Protection program for selling coal at a fixed price: the goal is to reduce volatility of cash flows associated with sales contracts for coal at fixed prices in order to equalize the currencies of cost and revenue. To do so, Vale carries out forward operations to buy Australian dollars in order to equalize the cost and revenue currencies.

•

Strategic Protection program for cash flow of aluminum: The objective of this program is to protect cash flow for the year 2010, whereby Vale carries out protection operations fixing the pricing of part of the sales of aluminum in the period. In this program, the Company used options and forwards contracts strategies.

•

Strategic Protection program for cash flow of nickel: The objective of this program is the protection of cash flows for the years 2010 and 2011, whereby Vale carries out protection operations fixing the pricing of part of the sales of nickel in the period. In this program, the Company used forwards contracts strategies.

•

Sales program for nickel at a fixed price: aiming to maintain its exposure to fluctuations in the price of nickel, the Company carries out derivative transactions to convert to a floating-price basis commercial nickel contracts with those clients seeking to fix the price. The operations are intended to ensure that prices for these sales are equivalent to the average price of the London Metal Exchange — LME upon physical delivery to the customer. In this program, Vale used forward contracts.

•

Protection Program for purchase of fuel oil — Bunker Oil: The objective of this program is to reduce the impact of fluctuations in the price of fuel oil (Bunker Oil) when procuring freight and hence reduce the volatility of Vale’s cash flow. The operations were made by the contracting of future oil purchases.

•

Protection program for the contracting of freight charges: The objective of this program is to reduce the impact of price fluctuations of sea freight contracted to viabilize the sale of products in CIF — Cost, insurance and freight and CFR — Cost and freight modalities and hence reduce the volatility of the Company’s cash flows. The transactions are made through FFA contracting — Forward Freight Agreement (hedging transaction price for shipping).

d. Parameters used for managing those risks

Vale believes that risk management is essential to support its growth strategy and financial flexibility. The risk reduction with regard to future cash flows improves the Company’s credit, facilitating access to various markets and reducing the cost of any borrowings. As a result, the Board established a policy of corporate risk management and an executive committee for risk management, to advise the Board on these issues.

The politics of corporate risk management determine that Vale regularly assess the risk associated with cash flow, as well as proposals for risk mitigation. As already highlighted, these, when necessary, will be implemented in order to reduce the risks in relation to the implementation of commitments made by the Company, both with third parties as to their shareholders.

The Board is responsible for the evaluation and approval of risk mitigation strategies that were recommended by the executive committee for risk management. The committee is responsible for issuing opinions on the principles and tools of risk management, as well as reporting regularly to the Executive Board on the process of managing and monitoring risks and on the major risks to which the Company is exposed, as well as the impact of these on cash flow.

e. If the Company uses various financial instruments with various objectives for asset protection (hedge) and what these goals are

The Company has no financial instruments with other goals than asset protection (hedge).

f. Organizational structure for risk management control

The policy and standards for risk management, which complement the norms for corporate governance of risk management, provide for the diversification of transactions and counterparts and the prohibition of derivative transactions of a speculative nature.

Beyond the normative framework of risk management, Vale also has a corporate structure with well defined responsibilities. The recommendation and implementation of the operations are carried out by independent areas. It is the responsibility of the area of risk management to define and propose to the Executive Committee for Risk Management operations or measures to mitigate market risk consistent with Vale’s strategy and its subsidiaries. It is the responsibility of the financial area to carry out the transactions involving derivatives contracts. The independence between areas ensures effective control over these operations.

g. Adequacy of the operational structure and internal controls to verify the effectiveness of the policy adopted

The monitoring and monthly assessment of Vale’s consolidated position allow it to keep pace with the financial results and the impact on cash flow and ensure that the goals originally outlined are met. The fair value calculation of the positions is made available weekly for management monitoring.

Several areas act as compliance in the process of risk management: the back-office, part of the financial area, is responsible for confirming the financial characteristics of transactions as well as the counterparties with which the operations were performed. This area, along with the area of risk management also assesses whether the operations were performed according to approval given. As well as these areas, the area of internal controls and accounting work to ensure that transactions were contracted in accordance with the existing instruments of governance.

5.3 Compared to last fiscal year, an indication of significant changes in key market risks to which the Company is exposed or the risk management policy adopted

There were no events that significantly alter the main market risks to which the Company is exposed.

5.4 Other information that the Company deems relevant

There is no further relevant information about this item “5”.

6. COMPANY HISTORY

6.1 Constitution of the Company

11.01.1943

6.2 Company Lifetime

Undetermined

6.3 Brief Company History

Vale was initially founded by the Brazilian Federal Government (Government of Brazil) on 01.06.1942, through Decree-Law No. 4352, and definitively on 11.01.1943, by the Assembly for the Definitive Constitution of the Companhia Vale do Rio Doce SA, in the form of mixed economy company, aiming to mine, trade, transport and export iron ore from the Itabira mines, and run the Vitória-Minas Railroad (EFVM), which carried iron ore and agricultural products from Vale do Rio Doce, in southeastern Brazil, to the port of Victoria, located in Espírito Santo.

The privatization process was initiated by the Company in 1997. Under Privatization Decree PND-A-01/97/VALE and the Resolution of the National Privatization Council — CND paragraph 2, of 05.03.1997, the Extraordinary General Assembly approved on 18/04/1997 the issue of 388,559,056 participatory non-convertible debentures, with a view to guaranteeing its pre-privatization shareholders, including the Federal Government itself, the right to participation in revenues from Vale’s and its subsidiaries’ mineral deposits, which were not valued for purposes of fixing the minimum price in the auction for the privatization of Vale. The Participatory Debentures were allocated to the shareholders of Vale in payment of the redemption value of preferred class “B shares” issued as bonus, in the proportion of one share owned by holders of class “A” common and preferred shares at the time, through the part capitalization of Vale’s revenue reserves. The Participatory Debentures could only be traded with prior authorization of CVM, as of three months from the end of Secondary Public Offering of Shares under the privatization process.

On 06.05.1997 the privatization auction was held, when the Brazilian government sold 104,318,070 Vale common shares, equivalent to 41.73% of the voting capital for Valepar SA (Valepar), for approximately R$ 3.3 billion.

Later, under the terms of the Bid, the Brazilian government sold another 11,120,919 shares representing approximately 4.5% of the outstanding common shares and 8,744,308 class “A” preferred shares, representing 6.3% of class “A” shares in circulation, through a limited offer to the employees of Vale.

On 20.03.2002 a Secondary Public Offering of Shares issued by Vale was held, in which the Brazilian Government and the National Bank for Economic and Social Development (BNDES) each sold 34,255,582 Vale common shares. The demand by investors in Brazil and abroad was substantial, exceeding supply by about three times, which led to the sale of the entire batch of 68,511,164 shares. A portion of about 50.2% was posted in the Brazilian market and the remainder was sold to foreign investors. Later, on 04.10.2002, the proper certification of the Participatory Debentures was obtained from CVM, the Securities Commission, allowing their trading on the secondary market.

The following describes the most significant historical events in the history of the Company since its incorporation:

1942

• President Getulio Vargas, by Decree-Law nº 4352 of 01.06.1942, sets out the basis on which Companhia Vale do Rio Doce SA would be organized. By Decree-Law, the Brazilian Company for Mining and Metallurgy and Mining Company Itabira would be expropriated.

1943

• Vale is constituted on 11.01.1943, as mixed economy company, pursuant to Decree-Law nº 4.352/42.

• Listing of Vale shares on the Rio de Janeiro Stock Market (BVRJ) in October 1943.

1944

• First business with Vale shares on the BVRJ occurred in March 1944.

1952

• The Brazilian Government takes definitive control of Vale’s operational system.

1953

• First shipment of iron ore to Japan

1954

• It revises its business practices abroad, and proceeds to contact directly steel mills, without the intermediation of traders.

1962

• Signed long-term contracts with Japanese and German steel mills.

1964

• Opening of Vale’s first office outside of Brazil in Dusseldorf, Germany.

1966

• Opening of the Port of Tubarão, in Vitória, in Espírito Santo, which is connected to the iron ore mines by the Vitoria a Minas Railroad.

1967

• Geologists of the Southern Mining Co., a subsidiary of United States Steel Corp. (U.S. Steel), record the occurrence of iron ore in Carajás, Pará State.

1968

• Vale shares become part of the IBOVESPA index.

1969

• Inauguration of Vale’s first Pellet Plant in Tubarão, in Espírito Santo, with capacity for 2 million tons / year.

1970

• Agreement makes Vale the majority shareholder of the Carajas venture in Para State, along with U.S. Steel.

1972

• Vale signs agreement with Alcan Aluminum Ltd. of Canada for a project to mine bauxite in the Rio Trombetas, where Mineração Rio do Norte (MRN) was set up.

1974

• It becomes the largest exporter of iron ore in the world, with 16% of seaborne iron ore market.

1975

• For the first time, Vale issues bonds in the international market, worth 70 million marks, with the intermediation of Dresdner Bank.

1976

• Decree No. 77.608/76 grants Vale the concession to construct, use and operate the railroad between Carajás and São Luís, in Pará and Maranhão states, respectively.

1977

• Vale announces priority for the Carajas Project, in order, from 1982, to start the export of iron ore through the Port of Itaqui (MA).

1979

• Beginning of the effective implementation of the Carajás Iron Ore Project, adopted as the main goal of Vale’s business strategy.

1980

• Federal Government approves the Carajas Iron Project and gives financial backing.

1982

• With the start of Valesul Aluminio SA in Rio de Janeiro operations, Vale joins the aluminum sector and helps to reduce imports of the metal into Brazil.

1984

• Inauguration of Vale office in Japan.

1985

• On February 28, the Carajás railroad (EFC) was inaugurated and handed over to Vale.

• Inauguration of the Carajás Iron Ore Project, which increases the productive capacity of the company, now organized in two separate logistic systems (North and South).

1986

• Start of operation of the Port Terminal of Ponta da Madeira, in São Luís in the state of Maranhao.

1987

• The EFC begins operating on a commercial scale.

1989

• Implementation of the Profit Sharing Program for Vale employees.

1994

• In March, Vale launches its program for American Depositary Receipts (ADR) Level 1, negotiable on the OTC market of the United States.

1995

• Vale is included in the National Privatization Program by Decree No. 1510 of June 1, signed by the President.

1996

• On October 10, the National Privatization Council (CND) approves the model for privatization of Vale.

1997

• BNDES releases on March 6, the terms of the bidding for the privatization of VALE.

• On April 18, Vale issues 388,559,056 Participatory Debentures that can only be traded with prior authorization of the CVM, as of three months from the end of Secondary Public Offering of Shares under the terms of the privatization process.

• On May 6, Vale is privatized in an auction held at the Stock Exchange of Rio de Janeiro. Valecom consortium, put together by the Votorantim Group, and the Brazil Consortium, led by Companhia Siderurgica Nacional (CSN) took part in the auction. The Brazil Consortium buys 41.73% of common shares of VALE for US$ 3,338 million at present-day values.

1998

• In the first year after privatization, Vale reaches 46% growth in profit over 1997.

1999

• It has the largest profit in its history so far: US$ 1.251 billion.

2000

• On February 2, Vale opened the Container Terminal of the Port of Sepetiba.

• In May, Vale acquires Mineração Socoimex S.A.and S.A. Mineração da Trindade (Samitri), companies producing iron ore, initiating the consolidation of the market for Brazilian iron ore.

• On June 20, Vale announced the listing of its American Depositary Receipts (ADRs), representing preferred shares of the Company on the Stock Exchange of New York (NYSE) in a “DR” Level II program approved by the CVM.

• On August 31, the Extraordinary General Meeting approved the merger of a wholly owned subsidiary Mineração Socoimex S.A, without issuing new shares, aiming to add to the assets of the Company the Gongo Soco mine, with reserves of high grade hematite in the iron quadrangle in Minas Gerais.

2001

• In February, the Board of Directors of Vale authorizes the start of the process of divesting its holdings in the sector of pulp and paper.

• On February 19, the shares of S.A. Mineração da Trindade (Samitri) are incorporated by Vale, with no increase of capital and without issuing new shares, by using shares held in treasury, as authorized by the CVM.

• In March, shareholdings involving Vale and CSN are unwound.

• In April, Vale acquires 100% shareholding in Ferteco Mining SA, the third largest producer of iron ore in Brazil at the time.

• In October 2001, the General Assembly of Shareholders approved the incorporation of wholly owned subsidiary Samitri, without issuing new shares and with no capital increase in Vale, in line with guidelines for administrative and financial streamlining.

2002

• In March, the pellet plant in Sao Luis, in Maranhão state, is officially opened.

• On March 21, the comprehensive sale offer of 68,511,164 Vale common shares owned by the Brazilian Government and BNDES was concluded, of which approximately 50.2% was posted in the Brazilian market and the remainder sold to outside investors. The selling price in Brazil was R$ 57.28 per share and abroad US$ 24.50 per ADR.

• Vale common shares start to be traded on the NYSE in the form of ADRs.

• The Company’s common shares also start to be traded on the Madrid Stock Exchange — Latibex.

• The foundation stone of the Sossego Copper Project, State of Pará, is laid

• In October 2004, VALE obtains from the CVM registration of Publicly Traded Participatory Debentures.

• On December 16, the General Assembly of Shareholders approved Vale’s Dividend Policy in order to increase both transparency and financial flexibility, taking into account the expected path of the Company’s cash flow.

• On December 27, the Extraordinary General Meeting approved the Amendment to the Bylaws in order to (i) expand the Company’s activities in energy and logistics, (ii) adjust the Statutes to the new rules introduced by Law No. 10303 of 10/31/2001 and (iii) introduce the principles of best corporate governance practices.

2003

• On February 14, Vale completes the acquisition of 100% stake in Elkem Rana AS (Rana), a Norwegian producer of ferroalloys, for the price of US$ 17.6 million.

• On March 31, Vale acquires 50% stake in Caemi Mineracao e Metalurgia SA (Caemi) for US$ 426.4 million.

• On August 29, Vale incorporates the wholly owned subsidiaries Celmar SA — Indústria de Celulose e Papel SA and Ferteco Mining

• On November 7, Vale completes the restructuring of shareholdings in logistics companies, which was aimed at the elimination of the relationship between Vale and CSN in the shareholding structure of the Ferrovia Centro-Atlantica SA (FCA), Companhia Ferroviária do Nordeste (CFN) and CSN Aceros S.A. (CSN Aceros).

• On December 12, Vale adheres to Level 1 of the Program for Differentiated Corporate Governance Practices established by the BM&F Bovespa Exchange.

• Continuing the process of simplifying its operating structure, on December 30, Vale incorporates the following wholly owned subsidiaries: Rio Doce Geologia e Mineração S.A. — Docegeo (Docegeo), Mineração Serra do Sossego S.A. (MSS), Vale do Rio Doce Alumínio S.A. — Aluvale (Aluvale) and Mineração Vera Cruz S.A. (MVC).

2004

• On July 02, the Sossego mine opens, the first copper mine in Brazil, in the State of Pará. This project, completed in record time.

• In November Vale wins an international bidding for coal mining in the Moatize region of northern Mozambique.

• In December, Vale signed a memorandum of understanding with ThyssenKrupp Stahl AG (ThyssenKrupp) for the construction of an integrated steel slab plant with a capacity of 5 million tons in the State of Rio de Janeiro.

2005

• Vale is the first Brazilian company to achieve a risk score greater than the host country and the only one to have this recognition for three different rating agencies: ie Investment grade, given by Moody’s, and confirmed by Standard & Poor’s and Dominion Bond.

• In July, Vale signs an agreement with two Australian mining companies to carry out studies to exploit the Belvedere Underground Coal Project, located in the State of Queensland, Australia.

• On September 22, it launches Vale Investir, a program that allows investors to automatically reinvest Brazilian funds from shareholders payments — dividends and / or interest on capital — to buy shares of the Company.

• In November, Vale agrees to acquire a minority stake in Ceara Steel, a steel slab project aimed at exporting from the state of Ceará, with a nominal capacity of 1.5 million tons of slabs per year.

• The Company consolidates its entry into the copper concentrate industry, with the first full year of operation of the Sossego Mine and sales to 13 customers in 11 different countries.

• In the last quarter of 2005, Vale acquires 99.2% of Canico Resources Corp. (Canico), which owns the lateritic nickel project Onça Puma, located in Para State, for approximately US$ 800 million.

2006

• In January, Vale acquires mineral resources, land and mining equipment from the Rio Verde Mineração (Rio Verde) for US$ 47 million.

• In February, the acquisition of all shares of Canico is completed, these being removed from trading on the Toronto Stock Exchange.

• In March, it inaugurated the expansion of production capacity is inaugurated of alumina refinery Alunorte

• Alumina do Norte do Brazil SA (Alunorte), located in Barcarena in the state of Pará

• On May 3, Vale completes incorporation of shares of Caemi, now holding 100% of the shares.

• On July 3, Vale buys 45.5% stake in Valesul Aluminio SA and now owns 100% of the shares.

• On August 11, the Company announces that it intends to offer to acquire all common shares of Inco Limited (Toronto Stock Exchange — TSX Stock Exchange and New York — NYSE under the symbol N) (Inco). The offer is consistent with long-term corporate strategy and strategy for the non-ferrous metals business of Vale.

• In the third quarter, Vale divided the administration of former Southern System for production and distribution of iron ore into two departments: the Southeastern System and the Southern System, and began to report production separately for each system.

• In September, Mineracoes Brasileiras Reunidas SA — MBR (MBR) buys 25% stake in a joint venture, Zhuhai YPM, to build a new pellet plant in Zhuhai, in the region of Guandong, China.

• On October 5, Vale opens the Brucutu Project, the largest mine / plant complex in the world for initial production capacity of iron ore, located in São Gonçalo do Rio Abaixo in Minas Gerais.

• On October 26, Vale concludes the financial settlement of a major part of the acquisition of Canadian miner Inco Ltd., the second largest nickel producer in the world, effecting payment of US$ 13.3 billion for the purchase of 174,623,019 shares issued by Inco. On November 6, Vale joined the control group of Usiminas steel company in Minas Gerais — (Usiminas).

2007

• In January, Vale completed the expansion of iron ore production capacity in Carajás, which now reaches 100 million tons per year.

• On January 30, the acquisition of Inco (now Vale Inco Limited) is ratified at Vale Extraordinary General Meeting. The nickel business is now managed from Toronto as well as activities related to marketing and sales of metals. With the completion of its acquisition of Inco, Vale becomes the second largest mining and metals company in the world by market value.

• On February 16, Vale announces secondary public offering of shares of Log-In Logistica Intermodal SA (Log In).

• On February 26, Vale signs a sale and purchase agreement to acquire Australian AMCI Holdings Australia Pty (AMCI), which operates and controls coal assets through holdings in joint ventures.

• In March 2007, Vale acquires an 18% stake in Ferro-Gusa Carajás S.A. (FGC), which belonged to Nucor do Brasil S.A for 20 million dollars, and now holds a 100% stake in FGC.

• In May, Vale signs a usufruct contract, and now controls the entire capital of the MBR, for the following 30 years.

• On May 2, Vale signs a freight contract for 25 years with Bergesen Worldwide (B.W. Bulk), which provides for the construction of the four largest bulk carriers in the world, each with a capacity of 388 thousand tons.

• On June 28, the Government of Mozambique approved the mining contract for the operation, by Vale, of the Moatize coal project in the province of Tete in the northwest of the country.

• On August 30, shareholders meeting at an Extraordinary General Meeting, ratify the acquisition of control of AMCI Holdings Australia by the Company.

• On November 29, Vale begins to use the brand “Vale” in all countries where it operates and at the same time takes on a new global identity.

• On December 21, Vale signs an agreement for commercial exploitation for 30 years of 720 km of the Norte-Sul railroad (FNS).

2008

• In the first half of 2008, Vale launches operations to increase capacity in the production of pellets in Samarco, a (50% -50%) joint venture with BHP Billiton in the Brazilian State of Espirito Santo.

• Vale leases three pellet plants in the Tubarão complex, in Vitória (ES), owned by the JV’s in which it participates (Itabrasco, Kobrasco and Nibrasco).

• On May 5, Vale signs a sale and purchase agreement to acquire the mining and surface rights in the municipalities of Rio Acima and Caeté (MG).

• In July, Vale makes a global offering of 256,926,766 ordinary shares and 189,063,218 preferred shares, including ADSs, in order to promote investment and strategic acquisitions as well as maximizing the financial flexibility of the Company. The aggregate value of Vale’s global offer, after underwriting discounts and commissions, including the values of the exercise of further stock options, was US$ 12.2 billion. In August, exercising the option of complementary lot, Vale issues 24,660,419 class A preferred shares.

• In connection with the offer above, Vale lists and trades its common and preferred ADSs on Euronext Paris.

• On August 3, Vale orders the building of 12 large ships for carrying iron ore, buys used vessels and signs long term freight contracts. The total investment was US$ 1.6 billion for the construction of new ships and US$ 74 million for the purchase of used ships.

• On August 14, Vale announces its intention to invest in building a new steel plant in Marabá in Para State, with an annual production capacity of 2.5 million metric tons of semi-finished steel.

• On October 31, Vale announces a reduction in its rate of production of iron ore, pellets, nickel, manganese, ferro-alloys, aluminum and kaolin, in the face of the impact of global economic crisis on the demand for minerals and metals.

• On December 16, Vale signs with African Rainbow Minerals Limited (ARM) and its subsidiary TEAL Exploration & Mining Incorporated (TEAL) a contract providing for operations in the copper business, for CAD $ 81 million.

• On December 23, Vale signs a sale and purchase agreement to acquire 100% of the coal exporting assets of Cementos Argos SA (Argos) in Colombia for US$ 300 million.

2009

• On January 30, Vale signs with Rio Tinto plc (Rio Tinto) a sale and purchase agreement for the acquisition, through cash payment, of iron ore and potash assets.

• On March 24, Vale completes the previously announced transaction, and creates a 50:50 joint venture with ARM for future development and operation of the assets of TEAL Exploration & Mining Incorporated (TEAL), expanding in December 2008 the strategic options for growth in the copper business in Africa.

• On March 27, Vale initiates the construction of the Moatize project, in Tete province, Mozambique. The project involves investments of US$ 1.3 billion and has a nominal production capacity of 11 million metric tons (Mt) of coal, comprising 8.5 Mt of metallurgical coal and 2.5 Mt of thermal coal.

• On April 1, the Company concluded the acquisition of the assets of export thermal coal with Argos in Colombia.

• On April 16, Vale completes the sale of all of its 14,869,368 common shares issued by Usiminas and linked to the steel mill’s existing shareholders agreement.

• On May 21, the Board of Directors of Vale approve the revised 2009 investment budget for US$ 9.035 billion as compared with the US$ 14.235 billion announced on October 16, 2008.

• On May 22, the Extraordinary General Meeting of Vale approves the proposal to change its name from Companhia Vale do Rio Doce SA to Vale SA

• On June 23, Vale launches a project to produce biodiesel to fuel its operations and projects in northern Brazil, from 2014, using palm oil as feedstock, which will be produced by a consortium between Vale and Biopalma Amazonia SA (Biopalma).

• On July 13, the Company announces that its unionized employees in Sudbury and Port Colborne in Ontario, Canada, are on strike. The same happens on the 1st of August, with the unionized employees of its operation in Voisey’s Bay in the province of Newfoundland and Labrador, Canada.

• On July 22, Vale signs a memorandum of understanding (MOU) with ThyssenKrupp to raise its stake in ThyssenKrupp CSA Siderurgica do Atlantico Ltda. (TKCSA) from 10% to 26.87% through a capital injection of EUR $ 965 million.

• On September 18, Vale completes the acquisition of the operations of iron ore in Corumbá, located in Mato Grosso do Sul, owned by Rio Tinto PLC (Rio Tinto) and other controlled entities.

• On October 19, the Board of Directors of Vale approves the investment budget for 2010, including expenditures of US$ 12.9 billion dedicated to sustaining existing operations and promoting growth through research and development (R & D) and project execution.

6.4 Date of registration with the CVM

Vale was registered with the CVM in 02.01.1970 under CVM code No. 00417-0.

6.5 Major corporate events such as takeovers, mergers, stock acquisitions, divestitures and acquisitions of corporate control, acquisitions and divestitures of important assets, which the Company or any of its subsidiaries or affiliates have gone through over the past three fiscal years ^1[1]:

2007

Acquisition of Inco Limited

In January 2007, Inco Limited (currently Vale Inco) became a subsidiary of Vale through an amalgamation operation, concluding the acquisition process started in October 2006 when Vale acquired 75.66% of the outstanding common shares through public offer and subsequent delisting of the company. The total cost was US$ 18,931 million, the same having been duly ratified at the Extraordinary General Meeting held on 30/01/2007.

Acquisition of controlling interest of AMCI Holdings Australia Pty (AMCI)

In April 2007, Vale completed the acquisition of the entire share capital of AMCI Holdings Australia Pty (now Vale Australia) for approximately US$ 1.328 billion at the time of payment. Vale Australia is a privately held company headquartered in Australia, which operates coal assets indirectly through participation in joint ventures. That acquisition was duly ratified by the Extraordinary General Meeting held on 30.08.2007.

Vale participation was equivalent to a nominal production capacity of 8 million tons of coal (mainly metallurgical coal) and reserves of 103 million tons.

Acquisition of the remaining interest in MBR

On 02.05.2007, Vale increased its indirect stake in Minerações Brasileiras Reunidas SA-MBR (MBR), a company which owns iron ore assets of high quality. Vale’s direct participation in the capital of MBR is 49%. The other 51% belong to Empreendimentos Brasileiros SA Mining — EBM (EBM). Until May 2007, Vale’s participation in EBM was 80% of the capital, when Vale acquired an additional 6.25% of the capital of EBM and signed a usufruct deal for the remaining 13.75% of the capital of EBM, ensuring control of MBR decisions for the next 30 years. The acquisition cost of EBM shares was US$ 231 million (equivalent to US$ 467 million on the date of disbursement) in cash, and for the usufruct contract, Vale made the payment of an entry in the amount of US$ 61 million (equivalent R$ 116 million on the date of disbursement), and undertook to pay 29 annual installments of US$ 48 million each.

Usinas Siderurgicas de Minas Gerais SA (Usiminas)

On 07.05.2007, Vale sold part of its stake in Usiminas in a secondary public offering of common shares of Usiminas, held in conjunction with the Caixa de Previdência dos Funcionários do Banco do Brasil (Welfare Fund for Staff of the Bank of Brazil) — PREVI. Under the offer, Vale sold 13,802,499 shares, of which 14,676 shares in the form of global depositary shares (GDS), having received the total amount of R$ 1,475.5 million, equivalent to the price of R$ 110.00 per common share and US$ 54.36 per GDS, defined according to the book building procedure for collection of an intention to invest made in the course of the offer.

The offer consisted, initially, of the distribution of 12,034,078 shares held by Vale, but the Company granted an option to the lead coordinator of the offering to distribute up to 1,805,112 additional shares under the same conditions and stock price initially offered, to meet any excess demand. The coordinator partially exercised the option, buying an additional 1,768,421 shares.

Subsequently, in April 2009, Vale completed the sale of all of its remaining 14,869,368 common shares issued by Usiminas linked to the existing shareholders agreement of Usiminas, representing 5.89% of common shares and 2.93% of total share capital of Usiminas, to a group of current shareholders of Usiminas (Camargo Corrêa, Mitsubishi Corporation, Nippon and Votorantim). The price was R$ 40.00 per Usiminas common share and the transaction amounted to R$ 594.7 million in cash. With the completion of the transaction, Vale ceased to have any participation in Usiminas.

IPO Log-In Logística Intermodal Logistics Ltd (Log-In)

On 25.07.2007, the public offering of 59,526,081 common shares, nominative, without par value, issued by Log-In was closed. It comprised the primary distribution of 31,111,110 new shares and a secondary distribution of 28,414,971 shares owned by Vale, at a price of R$ 14.25 per share (“Distribution Price per Share “), with the Supplementary Stock Option as defined below already included. On July 17, 2007 Lead Coordinator exercised, in its entirety, the option that was granted by Log-In and Vale for the subscription of a further block of 7,259,277 common shares of Log-In, including 4,057,970 new supplementary shares issued by Log-In and 3,201,307 shares supplementary owned by Vale, which were distributed at the Distribution Price per Share. Considering the shares and the supplementary shares, the total value of the Offer was: R$ 848,246,654.25. With the completion of the Offer, Vale’s participation in Log-In went to 31.3% of capital stock and the Log-in shares with voting rights. Currently, Vale shares an agreement with Mitsui & Co., as to the appointment of board members of Log-In.

Lion Ore Mining International

On 18.07.2007, Vale sold its minority stake in Lion Ore Mining International, a Canadian company that operates in the nickel sector, for US$ 105 million (equivalent to R$ 197 million on the date of receipt.)

Acquisition of blocks for gas exploration

On 27.11.2007, Vale won an auction bid for nine blocks for gas exploration in different regions of Brazil, for R$ 31 million in cash in an auction sponsored by the National Agency for Petroleum, Natural Gas and Biofuels (ANP). Vale’s participation in the auction for gas exploration aimed to meet their needs for energy consumption.

In the Santos basin, Vale won an auction for three shallow water blocks: (1) SM-791 and SM-792 through Vale consortium (30%), Petrobras (40%) and Maersk Oil (30%), and (2) SM-731 through Vale consortium (40%) and Petrobras (60%).

In the Para basin — Maranhão, the Company won an operating license in four blocks in shallow water - PAMA-M187, PAMA-M188, PAMA-M222, PAMA-M223 — through Vale consortium (30%), Petrobras (40%) and Ecopetrol SA (30%).

In the Northeast, in the Parnaiba basin, Vale knocked down two blocks, PN-T66 and PN-T86, through Vale consortium (20%), Petrobras (40%) and Devon Energy Corporation (40%).

Norte-Sul Railroad Concession

On 27.12.2007, Vale, through its subsidiary Ferrovia Norte Sul S.A., signed a sub-concession contract for commercial exploitation for 30 years of 720 km of the South of the Norte-Sul Railroad, including the railway line which will link Açailândia in the state of Maranhao, to Palmas in Tocantins state. Vale will pay about R$ 1.478 billion for the right to operate this stretch. In December 2007, Vale made the payment of the first tranche of R$ 739 million, equivalent to 50% of the total price of the sub-concession. The second tranche, amounting to 25% of the total price of the sub-concession was US$ 216 million (equivalent to approximately R$ 462 million on the date of disbursement). The final installment will be paid at the end of last stretch to be delivered, updated by IGP-DI to date of payment. Additionally, Vale will invest R$ 66 million in the railway infrastructure (signage, workshops, petrol stations etc.) by 2010. This project will create a new corridor for the transport of general cargo, mainly for the export of soybeans, rice and corn produced in north-central Brazil. In 2009, the FNS received its registration as a public company.

2008

Jubilee Mines

On 12.02.2008, Vale sold its minority stake in Jubilee Mines, a nickel producing company in Australia, for US$ 130 million (R$ 232 million on the date of receipt).

Incorporation of Ferro Gusa Carajás S.A. (FGC) and Mineração Onça Puma S.A. (MOP)

In 29.04.2008 and 29.12.2008 respectively, the incorporation of wholly owned FGC and MOP by Vale was approved, without issuing new shares and with no change in the capital of Vale. The asset values of FGC and MOP were evaluated, on 03/28/2008 and 28/11/2008 respectively, by Deloitte Touche Tohmatsu and ACAL Consulting and Audit S / S, for R$ 386,733,909.42 and R$ 2,916,326.00 respectively. The incorporations were intended to strengthen the strategic positioning of Vale to simplify and streamline administrative and financial operations.

Acquisition of Mining Rights of Mineração Apolo

On 05.05.2008 we acquired mining and surface rights belonging to Apolo in the municipalities of Rio Acima and Caeté, state of Minas Gerais. The total cost of acquisition, which added to Vale resources estimated at 1.1 billion metric tons of iron ore, was US$ 154.3 million (equivalent to R$ 255.8 million at the date of disclosure of acquisition), of which US$ 9.3 million (equivalent to R$ 15.4 million on the date of disclosure of the acquisition) was paid as a purchase option in May 2005 and US$ 145 million (equivalent to R$ 240.4 million at the date of disclosure of the acquisition) in 2008.

Global Offering

On 05.08.2008, Vale a held Primary Public Offering (recorded under Nº CVM/SRE/REM/2008/010) of 256,926,766 common shares and 189,063,218 preferred class A shares, all nominative, without par value issued by Vale, including in the form of American Depositary Shares (ADSs), represented by American Depositary Receipts (ADRs), at the price of R $ 46.28 per common share and US$ 29.00 or € 18.25 per ADS ordinary, and at R$ 39.90 per class A preferred share and US$ 25.00 and € 15.74 per ADS or preferred, totaling R$ 19,434,193,128.68. Under the International Offering were placed 63,506,751 preferred class A shares and 80,079,223 common shares in the form of ADSs represented by ADRs. The total number of shares contemplated in the Offer, also included 24,660,419 Class A preferred shares issued by Vale in respect of the exercise of the Supplementary Lot Option by the Lead Coordinator of the Offer, this option having been granted under Article 24 of CVM Instruction 400.

The implementation of the Global Offer, its terms and conditions and the capital increase for Vale were authorized at Vale Board meetings held on June 12, 2008, July 1, 2008, July 17, 2008 and August 5, 2008 and setting of the price per share was approved at a meeting of Vale Board held on July 16, 2008 and the issuance of shares for the Supplementary Lot Option was approved at a meeting of Vale Board held on August 5, 2008.

There was no significant impact on equity as the Global Offering was pulverized.

2009

Acquisition of potash assets

On 30.01.2009, Vale signed with Rio Tinto plc (Rio Tinto) a contract of sale and purchase for the acquisition, on a cash basis, of potash assets. The assets, purchased for US$ 850 million (equivalent to approximately R$ 1.995 billion at the time of payment), represented 100% of the Colorado River project, located in the provinces of Mendoza and Neuquen, Argentina, and 100% of the Regina project, Province of Saskatchewan, Canada. The Rio Colorado project includes the development of a mine with an initial production capacity of 2.4 Mtpy of potash (potassium chloride, KCl) and potential for expansion up 4.35 Mtpy, with construction of a railway branch of 350 km, port and power-station. The estimated mineral resources amount to 410 Mt. Regina is at the exploration stage, with potential for an estimated annual production of 2.8 Mt of KCI. The project area includes infrastructure for water supply, energy and logistics services, allowing the transport of the final product to Vancouver on the west coast of Canada, which will facilitate access to the Asian market.

Acquisition of copper mining assets in Africa

On 24.03.2009, Vale finished creating a 50:50 JV with African Rainbow Minerals Limited (ARM) for the development and operation of the copper assets of TEAL Exploration & Mining Incorporated (TEAL), expanding the strategic options for growth in the business in Africa. The operation involved a series of stages through which Vale has acquired a 50% stake in the subsidiaries of TEAL for CAD $ 81 million (equivalent to R$ 139 million on the date of payment), as well as an offer to close the TEAL’s own capital held by ARM at a price of CAD $ 3.00 per share in cash. As a result of this transaction, the assets of TEAL are owned directly or indirectly by the new joint venture controlled by Vale and ARM.

Acquisition of coal assets in Colombia

On 01.04.2009, Vale completed the acquisition of the coal mining assets of Cementos Argos SA (Argos) in Colombia for US$ 306 million (equivalent to R$ 695 million on the date of payment), including the coal mine El Hatillo, located in the department of Cesar, a coal deposit in the exploration stage, Cerro Largo, a minority stake in the Fenoco consortium, which holds the concession and operation of the railroad that links the coal operations to the Rio Cordoba port - SPRC, and 100% of the concession for this port, which is located on the Caribbean coast in the department of Magdalena. As Colombia is the third largest exporter of thermal coal of high quality in the world, given the low sulfur content and high calorific value, Vale aims to build a new platform for coal assets in the country in order to expand their options for growth in this segment. The acquired assets will be managed by its subsidiary Vale Coal Ltd. Sucursal Colombia (Vale Columbia).

Acquisition of iron ore assets

On 18.09.2009, Vale completed the acquisition on a cash basis of the Corumbá iron ore operations, located in Mato Grosso do Sul, owned by Rio Tinto plc (Rio Tinto) and other controlled entities, for US$ 750 million (equivalent to R$ 1.473 billion at the time of payment). The iron ore assets represent 100% of the mining operations of iron ore open pit of Corumbá, in Mato Grosso do Sul, Brazil, and logistics assets, including port and river barges. The logistics assets enable Vale to be 70% self-sufficient in the transportation of iron ore on the Paraguay River.

Increased participation by ThyssenKrupp CSA Siderurgica do Atlantico Ltda. (TKCSA)

On 21.09.2009, Vale concluded an agreement with ThyssenKrupp Steel AG (ThyssenKrupp) to increase its 10% stake in CSA to 26.87% through a capital contribution of EUR $ 965 million (equivalent to R$ 2.532 billion at the time of payment). By the end of 2008, capital contributions to CSA resulted in the payment by Vale of US$ 478 million (equivalent to R$ 930 million on the date of payment). CSA is building an integrated steel slab mill, with a nominal capacity of five million metric tons of slab steel per year in Rio de Janeiro. Production start is planned for the first half of 2010. As a strategic partner of ThyssenKrupp, Vale is the sole and exclusive supplier of iron ore to CSA.

Sale of Assets of nickel

As a result of the strategic review of operations of nickel, Vale sold its indirect participation in International Metals Reclamation Company, Inc. (Inmetco) on 31.12.2009 for US$ 34 million (equivalent to R$ 59 million) and 65% of Jinco Nonferrous Metals Co., Ltd (Jinco) on 09.12.2009 for US$ 6.5 million (equivalent to R$ 11 million). Inmetco, formerly a wholly owned subsidiary of Vale Inco in Ellwood City, Pennsylvania, USA, is dedicated to the recycling of nickel, chromium and other metal by-products generated by the production of stainless steel and specialty metals. Jinco operates Chinese nickel facilities and produces nickel sulfate and nickel chloride. That same month, Vale entered into agreements to sell its stake of 76.7% in Inco Advanced Technology Materials (Dalian) Co. Ltd., (Iatm-D) and 77% of Inco Advanced Technology Materials (Shenyang) Co. Ltd. (Iatm-S), which operates manufacturing facilities for nickel foam in China for US$ 7 million to partners of the remaining shareholders. Due to the above transactions, Vale no longer has any equity interest in Inmetco, in Jinco, or Inco Advanced Technology Materials Dalian and Shenyang.

2010

Incorporation of the Sociedade de Mineração Estrela de Apolo S.A. (Estrela de Apolo) and Mineração Vale Corumbá S.A. (Vale Corumbá)

On 22.01.2010 Vale approved the incorporation of its wholly owned subsidiaries Estrela de Apolo and Vale Corumbá, without issuing new shares and with no change in Vale capital, at their respective book asset value, with the release of their assets to Vale. According to the Appraisal Reports, produced by Domingues e Pinho Accountants on 31.10.2009, the asset value of Estrela de Apolo was R$ 4,160.00 and R $ 354,766,285.89 for Vale Corumbá. The main objective of the incorporations was to simplify corporate structure and optimize resources and costs.

Disposal of minority interests in Bayóvar

On 31.03.2010, Vale signed an agreement with The Mosaic Company (Mosaic) and Mitsui & Co. Ltd. (Mitsui), for the sale of minority stakes in the Bayovar phosphate rock project found in Peru, through a newly created company that will manage and operate the project. Subject to the terms and conditions set forth in the definitive agreement to purchase shares, Vale agreed to sell 35% of total capital to Mosaic for US$ 385 million and 25% of total capital to Mitsui for US$ 275 million. Upon completion of these transactions, Vale will maintain control of the Bayóvar project, with 51% of the voting capital and 40% of the total capital of the new company.

The transaction is subject to finalization of the shareholders agreement and the definitive marketing agreements between the parties, and some relevant government approvals and other customary conditions.

Acquisition of iron ore deposits (Simandou)

On 30.04.2010, Vale acquired from BSG Resources Ltd. (BSGR) a 51% stake in BSG Resources (Guinea) Ltd., which holds concessions for iron ore in Guinea, Simandou South (Zogota) and exploration permits for Simandou North (Blocks 1 & 2). Vale will pay US$ 2.5 billion for the acquisition of these assets, of which $ 500 million cash (equivalent to R$ 865 million on the date of payment), and the remaining US$ 2 billion in tranches subject to the achievement of specific milestones.

The joint venture between Vale and BSGR will implement the Zogota project and conduct feasibility studies for Blocks 1 & 2, with the creation of a logistics corridor for the flow of materials through Liberia. For the right to move goods through Liberia, the joint venture is committed to renew 660 km of the Trans-Guinea railway for passenger and light cargo. Vale will be responsible for asset management, marketing and sales of the joint venture with the exclusive off-take of the iron ore produced.

Acquisition of assets of fertilizer

On 27.05.2010, Vale completed the acquisition through its subsidiary Mineração Naque S.A., of a direct and indirect stake of 58.6% in the capital of Fertilizantes Fosfatados S.A. — Fosfertil (Fosfertil) — a company listed on the BM&F Bovespa exchange and the largest Brazilian producer of fertilizer nutrients — and the Brazilian fertilizer assets of Bunge Participacoes e Investimentos SA (BPI) for a total of US$ 4.7 billion. Of this amount, US$ 3.0 billion (equivalent to R$ 5.5 billion at the time of payment) relates to a direct and indirect stake of 58.6% in the capital of Fosfertil, which represents 72.6% of common shares and 51.4% of the preferred shares of Bunge Fertilizantes S.A., Bunge Brasil Holdings B.V., Yara Brasil Fertilizantes S.A. (Yara), Fertilizantes Heringer S.A. (Heringer) and Fertilizantes do Paraná Ltda. (Fertipar) — equivalent to a price per share of US$ 12.0185. The remaining US$ 1.7 billion (equivalent to R$ 3.1 billion at the time of payment) is attributable to the acquisition of BPI’s Brazilian fertilizer asset portfolio, which includes mining of phosphate rock and phosphate production units but does not include distribution / retail operations.

Under Brazilian corporate law and the norms of the capital market, Vale will hold a mandatory tender offer — to be filed with the CVM, the Securities Commission — to acquire 0.19% of common shares held by Fosfertil minority shareholders at a value of US$ 12.0185 per share, converted into Brazilian reais, the same price paid to other shareholders of Fosfertil.

Additionally, Vale retains a purchase option agreement with The Mosaic Company (Mosaic), which gives us the option to acquire the direct and indirect interests of Mosaic in Fosfertil, accounting for 27.27% of common shares and 16.65% of preferred shares and 20.27% of the share capital of Fosfertil, for US$ 1,029,811,129.77, at a price per share of US$ 12.0185. This transaction should be completed in the near future.

Restructuring the aluminum assets portfolio

On 02.05.2010, Vale signed an agreement with Norsk Hydro ASA (Hydro), to transfer all its shares in Albras — Aluminum Brasileiro SA, (Albras) Alunorte — Alumina do Norte do Brazil SA (Alunorte) and Companhia de Alumina do Pará (CAP) together with their respective exclusive rights and existing commercial contracts for US$ 405 million in cash and a certain amount of Hydro common shares. After a share offering to be held in future by Hydro, the number of shares will represent a 22% stake in Hydro’s capital. In addition, Hydro will assume net debt of US$ 700 million.

As part of this transaction, Vale will create a new company, Bauxite JV, and transfer the Paragominas bauxite mine and all its other bauxite mining rights in Brazil to Bauxite JV. When the transaction is completed, Vale will sell 60% of Bauxite JV to Hydro for US$ 600 million in cash. The remaining portion of 40% will be sold in two equal tranches of 20% in 2013 and 2015, for US$ 200 million in cash each.

The transaction is subject to approvals of governmental authorities and other customary conditions.

Increased participation in Belvedere

On 01.06.2010, Vale acquired from AMCI Investments Pty Ltd (AMCI) for US$ 92 million (equivalent to R$ 168 on the date of payment) an additional share of 24.5% in the Belvedere coal project. As a result of this transaction, Vale’s participation in Belvedere goes from 51.0% to 75.5%. Belvedere is an underground mine coal project in the Bowen Basin region, near the town of Moura in Queensland, Australia. According to preliminary estimates by the Company, once ready, the Belvedere project will have the potential to reach a production capacity of up to 7.0 million metric tons of metallurgical coal per year.

6.6 Bankruptcy filings based on relevant values, or judicial or extrajudicial recovery of the Company, and the current status of such requests, if applicable

Not applicable.

6.7 Other information that the Company deems relevant

There is no further relevant information about this item “6”.

7. COMPANY ACTIVITES

7.1 Summary of Company and Subsidiary activities

Vale is the second largest mining company in the world and the largest in the Americas by market value². The Company is the largest iron ore producer and second largest nickel producer in the world³. Vale is among the largest producers of manganese ore, ferroalloys and kaolin. It also produces alumina, aluminum, copper, coal, potash, cobalt, platinum group metals (PGMs) and other products. To sustain its growth strategy, Vale is actively engaged in mineral exploration in 21 countries around the world. The Company operates large logistics systems in Brazil integrated with its mining operations, including railroads, maritime terminals and a port. In addition, the Company is building a portfolio of maritime freight to transport iron ore to Asia. Vale also has investments in the sectors of energy and steel, directly or through subsidiaries and companies under joint control.

7.2 Operational segment(s) disclosed in the consolidated financial statements for the past 3 fiscal years:

a. Products and services in each operating segment

i) Ferrous. The ferrous minerals business segment includes: production of iron ore and pellets, as well as the North, Southern and Southeastern systems, including railroads, maritime terminals and port, linked to these operations. Manganese ore and ferroalloys are also included in this segment.

ii) Non-ferrous minerals. The non-ferrous mineral business segment includes production of nickel, copper, the aluminum chain products (primary aluminum, alumina and bauxite), potash, kaolin, cobalt and PGMs.

iii) Logistics. The logistics business segment includes the system of cargo transportation for third parties, which includes rail transport, port and shipping services.

iv) Steel, The steel business segment includes investments in steel companies.

v) Other investments. The business segment called “Other Investments” includes investments in joint ventures and affiliates in other businesses such as coal and energy.

b. Revenue from the segment and its participation in the Company’s net revenues

		Year ended December 31
in R$ thousand		2009								2008								2007
Segment		Net revenue				% of total				Net revenue				% of total				Net revenue				% of total
Ferrous			30,137,447				61				43,913,023				60				30,033,279				45
Non-ferrous			14,712,231				30				22,478,196				31				31,145,307				47
Logistics			2,843,331				6				3,666,089				5				3,496,697				5
Steel			546,153				1				1,348,066				2				1,247,889				2
Other			1,573,182				3				1,361,075				2				461,253				1
Total Revenue			49,812,344				100				72,766,449				100				66,384,425				100

c. Profit or loss resulting from the segment and its participation in the Company’s net income

		Year ended December 31
in R$ thousand		2009								2008								2007
Segment		Profit / Loss				% of total				Net revenue				% of total				Net revenue				% of total
Ferrous			8,534,446				83				24,055,197				113				10,827,830				54
Non-ferrous			126.528				1				536,344				3				7,524,820				38
Logistics			84.363				1				373,433				2				913,517				5
Steel			(147,308	)			-1				32,258				0				47,100				0
Other			(294,063	)			-3				106,595				1				414,636				2
Corporate Center			1,944,984				19				(3,824,198	)			-18				277,659				1
Net total			10,248,950				100				21,279,629				100				20,005,562				100

7.3 Products and services that correspond to the operating segments disclosed in item “7.2”

a. Characteristics of the production process

b. Characteristics of the distribution process

v. Characteristics of the markets, in particular:

i. competition conditions in the markets

ii. participation in each market

d. Possible seasonality

i) Ferrous minerals segment

Iron Ore Operations

Vale runs the majority of its iron ore operations directly and through its subsidiary Urucum Mining S.A. (Urucum). These operations for mining iron ore and the others related to them are concentrated in three systems: the Southeastern System, the Southern System and the North System, each with its own carrying capacity. Moreover, Vale has opencast mines through its affiliate Samarco SA (Samarco).

				Vale Participation
Firm		System		Voting				Total				Vale Partners
				(%)
Vale		Southeastern, Southern and North			—				—			—
Urucum		Southeast			100				100			—
Samarco		—			50				50			BHP Billiton

Southeastern System

The Southeastern System mines are located in the Iron Quadrangle region of the state of Minas Gerais, where they are divided into three mining complexes (Itabira, Minas Centrais and Mariana), and in the state of Mato Grosso do Sul, where the mines of Urucum and Corumbá are located.

The ore reserves in the three mining complexes have high ratios of itabirite ore relative to hematite ore. Itabirite ore has iron grade of 35-60% and requires concentration to achieve shipping grade, which is at least 63.5% average iron grade. Urucum ore reserves have high ratios of hematite ore, which has an average grade of 63%.

We conduct open-pit mining operations in the Southeastern System. At the three mining complexes, we generally process the run-of-mine by means of standard crushing, classification and concentration steps, producing sinter feed, lump ore and pellet feed in the beneficiation plants located at the mining sites. In September 2009, we concluded the acquisition of Corumbá, where we produce lump ores. At the Urucum and Corumbá mines, we generally process the run-of-mine by means of standard crushing and classification steps, producing only lump ore. In 2009, we produced 100% of the electric energy consumed in the Southeastern System at our hydroelectric power plants (Igarapava, Porto Estrela, Funil, Candonga, Aimorés, Capim Branco I and Capim Branco II).

We own and operate integrated railroad and terminal networks in the three mining complexes, which are accessible by road or by spur tracks of our EFVM railroad. The EFVM railroad connects these mines to the Tubarão port in Vitória, in the state of Espírito Santo. Iron ore from the mines of Urucum and Corumbá in the state of Mato Grosso do Sul, is transported to customers via barges that navigate the Rio Paraguay.

Southern System

The Southern System mines are located in the Iron Quadrangle region of the state of Minas Gerais in Brazil. The mines of our subsidiary Minerações Brasileiras Reunidas S.A.-MBR (“MBR”) are operated at the parent-company level pursuant to an asset lease agreement. The Southern System has three major mining complexes: the Minas Itabirito complex (comprised of four mines, with two major beneficiation plants and three secondary beneficiation plants); the Vargem Grande complex (comprised of three mines and one major beneficiation plant); and the Paraopeba complex (comprised of four mines and three beneficiation plants).

We use wet beneficiation processes to convert run-of-mine obtained from open-pit mining operations into sinter feed, lump ore and pellet feed, in addition to hematitinha, a product used primarily by Brazilian pig-iron producers. In 2009, we produced 100% of the electric energy consumed in the Southern System at our hydroelectric power plants (Igarapava, Porto Estrela, Funil, Candonga, Capim Branco I and Capim Branco II).

We enter into freight contracts with our affiliate, MRS, a railway company in which we own a 41.5% stake, to transport our iron ore products at market prices from the mines to our Guaíba Island and Itaguaí maritime terminals in the state of Rio de Janeiro.

Northern System

The Northern System mines, located in the Carajás mineral province of the Brazilian state of Pará, contain some of the largest iron ore deposits in the world. The reserves are divided into northern, southern and eastern ranges situated 35 kilometers apart. Since 1985, we have been conducting mining activities in the northern range, which is divided into three main mining bodies (N4W, N4E and N5). The Northern System has open-pit mines and an ore processing plant. The mines are located on public lands for which we hold mining concessions.

Because of the high grade (66.7% on average) of the Northern System deposits, we do not need to operate a concentration plant at Carajás. The beneficiation process consists simply of sizing operations, including screening, hydrocycloning, crushing and filtration. Output from the beneficiation process consists of sinter feed, pellet feed, special fines for direct reduction processes and lump ore. We obtain all of the electrical power for the Northern System at market prices from regional utilities.

We operate an integrated railroad and maritime terminal network in the Northern System. After completion of the beneficiation process, our EFC railroad transports the iron ore to the Ponta da Madeira maritime terminal in the state of Maranhão. To support our Carajás operations, we have housing and other facilities in a nearby township. These operations are accessible by road, air and rail.

Samarco

We own 50% of Samarco, which operates an integrated system, comprised of a mine, pipeline, three pellet plants and a port. Samarco’s Alegria mine complex, located in Mariana, Minas Gerais, is in the same region as our Southeastern System.

Iron ore production

The following table sets forth information about our iron ore production.

				Production for the year ended December 31,												Recovery
Mine/Plant		Type		2007				2008				2009				rate
				(million metric tons)												(%)
Southeastern System
Itabira complex
Cauê(1)		Open pit			24.8				21.5				13.8				65.5
Conceição(1)		Open pit			21.9				20.3				17.3				74.4
Minas Centrais complex
Água Limpa/Cururu(2)		Open pit			4.2				4.7				1.4				51.7
Gongo Soco		Open pit			6.5				5.0				2.7				88.0
Brucutu		Open pit			21.9				26.4				23.6				76.0
Andrade(3)		Open pit			1.3				1.4				0.7				97.9
Mariana complex
Alegria		Open pit			13.5				12.3				12.1				73.3
Fábrica Nova(4)		Open pit			14.6				14.0				13.7				77.8
Fazendão(5)		Open pit			3.7				9.8				3.1				100.0
Timbopeba		Open pit			1.3				—				—				—
Corumbá(6)		Open pit			—				—				0.4				55.0
Urucum		Open pit			1.1				1.0				0.5				61.0
Total Southeastern System					114.9				116.4				89.5
Southern System(7)
Minas Itabirito complex
Segredo/João Pereira		Open pit			11.8				12.1				8.4				67.3
Sapecado/Galinheiro(8)		Open pit			17.4				15.1				9.8				61.9
Vargem Grande complex
Tamanduá(9)		Open pit			10.2				9.8				7.3				79.6
Capitão do Mato(9)		Open pit			11.5				9.7				8.0				79.6
Abóboras		Open pit			6.0				4.2				5.4				100.0
Paraopeba Complex
Jangada		Open pit			3.9				4.3				—				—
Córrego do Feijão		Open pit			9.3				8.4				5.6				71.8
Capão Xavier		Open pit			13.3				13.5				10.9				84.5
Mar Azul		Open pit			5.9				3.5				—				—
Total Southern System					89.3				80.5				55.2

				Production for the year ended December 31,												Recovery
Mine/Plant		Type		2007				2008				2009				rate
				(million metric tons)												(%)
Northern System
Serra Norte(10)
N4W		Open pit			40.3				44.3				31.0				92.4
N4E		Open pit			15.4				13.2				16.9				92.4
N5(11)		Open pit			36.0				39.1				36.8				92.4
Total Northern System					91.7				96.5				84.6
Vale					295.9				293.4				229.3
Samarco(12)					14.5				16.6				17.2				57.7
Total					310.4				310.0				246.5

Pellets operations

Directly and through affiliates and subsidiaries, Vale produces iron ore pellets in Brazil and China, as shown in the table below. The estimated total nominal capacity of ten plants operated directly by the Company, including Companhia Hispano-Brasileira Pelletizing (Hispanobras), is 48 million metric tons per year.

Vale Participation

Voting

Firm

Local Operation

(%)

Total

Partners

Brazil:

Vale

Tubarão, Fábrica, Vargem Grande e São Luís

—

—

—

Hispanobras

Tubarão

51.0

50.9

Arcelor Mittal

Samarco

Mariana and Anchieta

50.0

50.0

BHP Billiton

China:

Zhuhai YPM

Zhuhai, Guangdong

25.0

25.0

Zhuhai Yueyufeng Iron and Steel Co, Ltd, Pioneer Iron and Steel Group Co, Ltd,

In the Tubarão port area, in the Brazilian state of Espírito Santo, we operate our wholly owned pellet plants, Tubarão I and II, four plants we lease under operating leases and our jointly-owned plant, Hispanobras. We send iron ore from our Southeastern System mines to these plants and use our logistics infrastructure to distribute their final products.

Our São Luís pellet plant, located in the Brazilian state of Maranhão, is part of the Northern System. We send Carajás iron ore to this plant and ship its production to customers through our Ponta da Madeira maritime terminal.

The Fábrica and Vargem Grande pellet plants, located in the Brazilian state of Minas Gerais, are part of the Southern System. We send some of the iron ore from the Fábrica Nova mine to the Fábrica plant, and iron ore from the Pico mine to the Vargem Grande plant. We transport pellets from these plants using MRS.

Samarco operates three pellet plants in two operating sites with nominal capacity of 21 million tons per year. The pellet plants are located in the Ponta Ubu unit, in Anchieta, Espírito Santo. Iron ore from Alegria and our Southeastern System mine Fábrica Nova is sent to the Samarco pellet plants using a 396-kilometer pipeline, the longest pipeline in the world for the conveyance of iron ore. Samarco has its own port facilities to transport its production.

The Zhuhai YPM pellet plant, in China, is part of the Yueyufeng Steelmaking Complex. It has port facilities, which we use to send feed from our mines in Brazil. Zhuhai YPM’s main customer is Yueyufeng Iron & Steel (“YYS”), which is also located in the Yueyufeng Steelmaking Complex.

We sell pellet feed to our pelletizing joint ventures at market prices. Historically, we have supplied all of the iron ore requirements of our wholly owned pellet plants and joint ventures, except for Samarco and Zhuhai YPM, to which we supply only part of their requirements. Of our total 2009 pellet production, 58.8% was blast furnace pellets, and the remaining 41.2% was direct reduction pellets, which are used in steel mills that employ the direct reduction process rather than blast furnace technology.

		Sales for the year ended December 31
		2007				2008				2009
		(Millions of metric tons)
Hispanobras			4.7				4.1				1.2
Itabrasco			4.4				3.2	(1)			—
Kobrasco			4.4				1.6	(2)			—
Nibrasco			7.4				2.0	(3)			—
Samarco (4)			7.1				11.3				4.9
Zhuhai YPM (5)			—				0.8				0.9
Total			28.1				23.0				7.0

Production of pellets

The following table sets forth information about our iron ore sales to our pelletizing joint ventures for the periods indicated.

		Production for the year ended December 31
Firm		2007				2008				2009
		(Millions of metric tons)
Vale(1)			17.6				26.6				15.3
Hispanobras(5)			4.3				3.8				1.2
Itabrasco(2)			4.0				2.9				—
Kobrasco(3)			5.0				2.1				—
Nibrasco(4)			9.0				2.7				—
Samarco(5)			14.3				17.1				16.1
Total			53.7				55.2				32.6

Customers, Sales and Marketing — Iron ore and pellets

We supply all of our iron ore and iron ore pellets (including our share of joint-venture pellet production) to the steel industry. Prevailing and expected levels of demand for steel products affect demand for our iron ore and iron ore pellets. Demand for steel products is influenced by many factors, such as global manufacturing production, civil construction and infrastructure spending.

In 2009, China accounted for 56.8% of our iron ore and iron ore pellet shipments, and Asia as a whole accounted for 72.7%. Europe accounted for 13.4%, followed by Brazil with 10.2%. Our 10 largest customers collectively purchased 96.6 million metric tons of iron ore and iron ore pellets from us, representing 39% of our 2009 iron ore and iron ore pellet shipments and 38% of our total iron ore and iron ore pellet revenues. In 2009, no individual customer accounted for more than 10.0% of our iron ore and iron ore pellet shipments.

In 2009, the Asian market (mainly Japan and South Korea) and the European market were the primary markets for our blast furnace pellets, while North America, the Middle East and North Africa were the primary markets for our direct reduction pellets.

We strongly emphasize customer service in order to improve our competitiveness. We work with our customers to understand their main objectives and to provide them with iron ore solutions to meet specific customer needs. Using our expertise in mining, agglomeration and iron-making processes, we search for technical solutions that will balance the best use of our world-class mining assets and the satisfaction of our customers. We believe that our ability to provide customers with a total iron ore solution and the quality of our products are very important advantages helping us to improve our competitiveness in relation to competitors who may be more conveniently located geographically. In addition to offering technical assistance to our customers, we operate sales support offices in Tokyo (Japan), Seoul (South Korea), Singapore, Muscat (Oman) and Shanghai (China), which support the sales made by our wholly owned subsidiary located in St. Prex, Switzerland. These offices also allow us to stay in close contact with our customers, monitor their requirements and our contract performance, and ensure that our customers receive timely deliveries.

Competition — Iron ore and pellets

The global iron ore and iron ore pellet markets are highly competitive. The main factors affecting competition are price, quality, range of products offered, reliability, operating costs and shipping costs.

Our biggest competitors in the Asian market are located in Australia and include subsidiaries and affiliates of BHP Billiton plc and Rio Tinto Ltd. Although the transportation costs of delivering iron ore from Australia to Asian customers are generally lower than ours as a result of Australia’s geographical proximity, we are competitive in the Asian market for two main reasons. First, steel companies generally seek to obtain the types (or blends) of iron ore and iron ore pellets that can produce the intended final product in the most economic and efficient manner. Our iron ore has low impurity levels and other properties that generally lead to lower processing costs. For example, in addition to its high grade, the alumina grade of our iron ore is very low compared to Australian ores, reducing consumption of coke and increasing productivity in blast furnaces, which is particularly important during periods of high demand. When the market is very strong, our quality differential is in many cases more valuable to customers than a freight differential. Second, steel companies often develop sales relationships based on a reliable supply of a specific mix of iron ore and iron ore pellets. We have a customer-oriented marketing policy and place specialized personnel in direct contact with our customers to help determine the blend that best suits each particular customer.

In terms of reliability, our ownership and operation of logistics facilities in the Northern and Southeastern Systems help us ensure that our products are delivered on time and at a relatively low cost. In addition, we are developing a low-cost freight portfolio, aimed at enhancing our ability to offer our products in the Asian market at competitive prices and to increase our market share. To support this strategy, we ordered new ships, purchased used vessels and entered into medium- and long-term freight contracts.

Our principal competitors in Europe are Kumba Iron Ore Limited, Luossavaara Kiirunavaara AB (“LKAB”), Société Nationale Industrielle et Minière (“SNIM”), Rio Tinto Ltd. and BHP Billiton. We are competitive in the European market not only for the same reasons we are competitive in Asia, but also due to the proximity of our port facilities to European customers.

In 2008, Vale had a stake of about 30.2% of the total volume of iron ore traded in the seaborne market, and in 2009, this share declined to 24.9% due to the severe impact of global recession in the steel industry in Brazil and Europe, two major markets for the sale of the Company’s iron ore.

The demand for iron ore is seasonally stronger in the second quarter. Because of Chinese holidays in January / February (Lunar New Year) and May (labor week), the demand tends to be weaker in the first half of each year. This seasonality is statistically confirmed using a series of quarterly imports in the seaborne market.

Manganese ore

Vale conducts manganese operations in Brazil directly and through its subsidiary, Vale Manganês S.A. (Vale Manganês) e Urucum.

				Vale Participation
Firm		Location		Voting				Total
				(%)
		Brazil:
Vale Manganês(1)		Pará and Minas Gerais			100				100
Urucum		Mato Grosso do Sul			100				100

The Company’s mines produce three types of products of manganese

	•		metallurgical ore used primarily in the production of ferroalloys;
	•		natural manganese dioxide, suitable for the manufacture of electrolytic batteries; and
	•		chemical ore used in various industries for the production of fertilizers, pesticides and animal feed, and is also used as pigment in the ceramics industry.

We operate on-site beneficiation plants at our Azul mine and at the Urucum mines, which are accessible by road. The Azul and Urucum mines have high-grade ores (at least 40% manganese grade), while our Morro da Mina mine has low-grade ores. All of these mines obtain electrical power at market prices from regional electric utilities. The following table sets forth information about our manganese production.

				Production for the year ended December 31												Rate of
Mine		Type		2007				2008				2009				recovery
					(Millions of metric tons)											(%)
Azul(1)		Open pit			0.9				2.0				1.4				62.4
Morro da Mina		Open pit			0.1				0.1				0.1				93.2
Urucum(2)		Underground			0.3				0.2				0.2				83.0
Total					1.3				2.4				1.7

Ferroalloys

The following table sets forth the subsidiaries through which we conduct our ferroalloys business.

				Vale Participation
Firm		Location		Voting				Total
				(%)
Vale Manganês		Minas Gerais and Bahia			100				100
Urucum		Mato Grosso do Sul			100				100
Vale Manganèse France		Dunkerque, France			100				100
Vale Manganese Norway AS		Mo I Rana, Norway			100				100

We produce several types of manganese ferroalloys, such as high carbon and medium carbon ferro-manganese and ferro-silicon manganese. Our facilities have nominal capacity of 651,000 metric tons per year. The production of ferroalloys consumes significant amounts of electricity, representing 4.8% of our total consumption in 2009. The electricity supply for our ferroalloy plant in Dunkerque, France and Mo I Rana, Norway are provided through long-term contracts.

The following table presents information on production of ferroalloys Company.

		Production for the year ended December 31
Firm		2007				2008				2009
		(Thousands of metric tons)
Vale Manganês(1)			288				288				99
Urucum(2)			22				20				0
Vale Manganèse France(3)			103				55				45
Vale Manganese Norway AS			129				112				79
Total			542				475				223

Revenues from sales of manganese and ferroalloys accounted for only 1.9% of Vale’s total revenue in 2009.

Competition — manganese ore and ferroalloys

The markets for manganese ore and ferroalloys are highly competitive. Competition in the manganese ore market takes place in two segments. High-grade manganese ore competes on a global seaborne basis, while low-grade ore competes on a regional basis. For some ferroalloys, high-grade ore is mandatory, while for others high- and low-grade ores are complementary. The main suppliers of high-grade ores are located in South Africa, Gabon, Australia and Brazil. The main producers of low-grade ores are located in Ukraine, China, Ghana, Kazakhstan, India and Mexico.

The ferroalloy market is characterized by a large number of participants who compete primarily on the basis of price. The principal competitive factors in this market are the costs of manganese ore, electricity and logistics and reductants. We compete both with stand-alone producers and integrated producers that also mine their own ore. Our competitors are located principally in countries that produce manganese ore or steel.

Pig iron

We conduct a pig iron operation in northern Brazil. This operation was conducted through our wholly owned subsidiary Ferro-Gusa Carajás S.A. (“FGC”) until April 2008, when FGC was merged into Vale.

We utilize two conventional mini-blast furnaces to produce 350,000 metric tons of pig iron per year, using iron ore from our Carajás mines in northern Brazil. The charcoal source is exclusively from eucalyptus trees grown in a cultivated forest of 82,000 acres, with the total project encompassing 200,000 acres. In July 2009, we sold this forest to Suzano Papel e Celulose (“Suzano”) but retained a sufficient wood inventory to keep the mini blast furnaces operating through the first half of 2012.

Revenues from sales of pig iron accounted for only 0.2% of Vale’s total revenue in 2009.