Table of Contents
Table of Contents
United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM
6-K/A
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 2021
Vale S.A.
Praia de Botafogo nº 186, 18º andar, Botafogo
22250-145 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.)
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(Check One) Form 20-F ⌧ Form 40-F ◻ |
(Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1))
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(Check One) Yes ◻ No ⌧ |
(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))
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(Check One) Yes ◻ No ⌧ |
(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.)
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(Check One) Yes ◻ No ⌧ |
(If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b). 82- .)
Table of Contents
Explanatory Note
Vale is amending its report on Form 6-K furnished to the Securities and Exchange Commission on July 29, 2021 (File/Film Number: 001-15030 / 211124302) (the “Original 6-K”) solely for the purpose of adding Exhibit 101, which contains Interactive Data File disclosure in accordance with Rule 405 of Regulation S-T. Except as described above, this amendment does not amend any information set forth in the Original 6-K.
Vale S.A. Interim Financial Statements
Contents
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34 |
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41 |
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48 |
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49 |
1
Report of Independent registered Public Accounting Firm
To the Stockholders and Board of Directors of
Vale S.A.
Results of Review of Interim Financial Statements
We have reviewed the accompanying consolidated statement of financial position of Vale S.A. and its subsidiaries (the “Company”) as of June 30, 2021, and the related consolidated income statement, consolidated statement of comprehensive income and consolidated statement of cash flows for the three and six-month periods ended June 30, 2021 and June 30, 2020, and the consolidated statement of changes in equity for the six-month periods ended June 30, 2021 and June 30, 2020, including the related notes (collectively referred to as the “interim financial statements”). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial statements for them to be in conformity with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated statement of financial position of the Company as of December 31, 2020, and the related consolidated income statement and consolidated statements of comprehensive income, changes in equity and of cash flows for the year then ended (not presented herein), and in our report dated February 25, 2021, which included a paragraph describing a change in the manner of accounting for leases on January 1, 2019, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated statement of financial position as of December 31, 2020, is fairly stated, in all material respects, in relation to the consolidated statement of financial position from which it has been derived.
Basis for Review Results
These interim financial statements are the responsibility of the Company’s management. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial statements consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
/s/ PricewaterhouseCoopers
Auditores Independentes
Rio de Janeiro, RJ, Brazil
July 28, 2021
PricewaterhouseCoopers Auditores Independentes, Rua do Russel 804, Edifício Manchete, 6º e 7º andares, Rio de Janeiro, RJ, Brasil 22210-907, T: (21) 3232-6112, F: (21) 3232-6113, www.pwc.com/br
2
Consolidated Income Statement
In millions of United States dollars, except earnings per share data
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Three-month period ended June 30, |
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Six-month period ended June 30, |
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Notes |
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2021 |
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2020 |
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2021 |
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2020 |
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Net operating revenue |
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4(c) |
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16,675 |
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7,518 |
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29,320 |
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14,487 |
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Cost of goods sold and services rendered |
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5(a) |
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(5,805) |
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(4,212) |
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(10,432) |
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(8,490) |
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Gross profit |
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10,870 |
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3,306 |
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18,888 |
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5,997 |
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Operating expenses |
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Selling and administrative expenses |
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5(b) |
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(133) |
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(124) |
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(238) |
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(239) |
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Research and evaluation expenses |
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(141) |
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(90) |
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(241) |
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(185) |
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Pre-operating and operational stoppage |
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20 |
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(191) |
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(238) |
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(336) |
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(506) |
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Brumadinho event |
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20 |
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(185) |
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(130) |
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(300) |
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(289) |
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Other operating expenses, net |
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5(c) |
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(74) |
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(237) |
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(86) |
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(299) |
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(724) |
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(819) |
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(1,201) |
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(1,518) |
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Impairment and disposals of non-current assets |
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12 and 15 |
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(432) |
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(403) |
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(593) |
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(432) |
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Operating income |
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9,714 |
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2,084 |
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17,094 |
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4,047 |
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Financial income |
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6 |
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86 |
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135 |
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160 |
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242 |
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Financial expenses |
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6 |
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(177) |
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(585) |
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(1,563) |
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(1,110) |
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Other financial items, net |
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6 |
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441 |
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(35) |
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1,676 |
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(1,902) |
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Equity results and other results in associates and joint ventures |
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13 and 21 |
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(454) |
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(535) |
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(470) |
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(701) |
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Income before income taxes |
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9,610 |
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1,064 |
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16,897 |
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576 |
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Income taxes |
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7(b) |
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Current tax |
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(1,201) |
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(326) |
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(2,716) |
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(673) |
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Deferred tax |
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(872) |
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181 |
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(1,167) |
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1,177 |
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(2,073) |
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(145) |
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(3,883) |
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504 |
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Net income |
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7,537 |
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919 |
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13,014 |
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1,080 |
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Loss attributable to non-controlling interests |
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(49) |
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(76) |
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(118) |
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(154) |
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Net income attributable to Vale's stockholders |
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7,586 |
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995 |
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13,132 |
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1,234 |
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Earnings per share attributable to Vale's stockholders: |
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Basic and diluted earnings per share: |
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8 |
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Common share (US$) |
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1.49 |
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0.19 |
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2.57 |
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0.24 |
The accompanying notes are an integral part of these interim financial statements.
3
Consolidated Statement of Comprehensive Income
In millions of United States dollars
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Three-month period ended June 30, |
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Six-month period ended June 30, |
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2021 |
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2020 |
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2021 |
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2020 |
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Net income |
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7,537 |
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919 |
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13,014 |
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1,080 |
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Other comprehensive income (loss): |
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Items that will not be reclassified to the income statement |
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Translation adjustments |
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5,233 |
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(1,786) |
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1,885 |
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(11,249) |
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Retirement benefit obligations (note 24) |
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25 |
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(209) |
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316 |
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(200) |
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Fair value adjustment to investment in equity securities |
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(82) |
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39 |
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193 |
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(209) |
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Total items that will not be reclassified to the income statement, net of tax |
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5,176 |
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(1,956) |
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2,394 |
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(11,658) |
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Items that may be reclassified to the income statement |
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Translation adjustments |
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(2,762) |
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885 |
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(756) |
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5,128 |
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Net investments hedge (note 16) |
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202 |
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(119) |
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42 |
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(639) |
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Net cash flow hedge (note 16) |
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(35) |
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(49) |
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(26) |
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15 |
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Reclassification of cumulative translation adjustment to net income (note 12) |
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(424) |
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— |
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(1,542) |
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— |
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Total items that may be reclassified to the income statement, net of tax |
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(3,019) |
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717 |
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(2,282) |
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4,504 |
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Total comprehensive income (loss) |
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9,694 |
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(320) |
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13,126 |
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(6,074) |
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Comprehensive loss attributable to non-controlling interests |
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(47) |
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(53) |
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(116) |
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(129) |
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Comprehensive income (loss) attributable to Vale's stockholders |
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9,741 |
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(267) |
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13,242 |
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(5,945) |
Items above are stated net of tax and the related taxes are disclosed in note 7.
The accompanying notes are an integral part of these interim financial statements.
4
Consolidated Statement of Cash Flows
In millions of United States dollars
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Three-month period ended June 30, |
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Six-month period ended June 30, |
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2021 |
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2020 |
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2021 |
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2020 |
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Cash flow from operations (a) |
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9,277 |
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2,111 |
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17,950 |
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4,116 |
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Interest on loans and borrowings paid (note 19) |
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(138) |
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(168) |
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(426) |
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(412) |
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Cash received (paid) on settlement of Derivatives, net (note 16) |
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60 |
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(114) |
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(139) |
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159 |
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Interest on participative stockholders' debentures paid (note 18) |
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(193) |
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(95) |
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(193) |
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(95) |
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Income taxes (including the settlement program) |
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(1,280) |
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(398) |
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(2,444) |
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(747) |
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Net cash provided by operating activities |
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7,726 |
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1,336 |
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14,748 |
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3,021 |
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Cash flow from investing activities: |
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Capital expenditures (notes 14 and 15) |
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(1,139) |
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(967) |
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(2,148) |
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(2,091) |
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Additions to investments (note 13) |
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— |
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— |
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(42) |
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(75) |
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Acquisition of NLC, net of cash (note 12) |
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(2,345) |
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— |
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(2,345) |
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— |
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Cash paid on the disposal of VNC (note 12) |
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— |
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— |
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(555) |
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— |
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Dividends received from associates and joint ventures (note 13) |
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43 |
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77 |
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43 |
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77 |
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Short-term investment |
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543 |
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449 |
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(173) |
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630 |
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Investment fund applications |
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— |
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(96) |
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— |
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(96) |
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Other investments activities, net |
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(189) |
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(133) |
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(213) |
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(186) |
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Net cash used in investing activities |
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(3,087) |
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(670) |
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(5,433) |
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(1,741) |
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Cash flow from financing activities: |
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Loans and borrowings from third-parties (note 19) |
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10 |
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— |
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300 |
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5,000 |
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Payments of loans and borrowings from third-parties (note 19) |
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(179) |
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(116) |
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(1,412) |
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(491) |
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Lease payments (note 19) |
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(49) |
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(49) |
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(104) |
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(99) |
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Dividends and interest on capital paid to stockholders (note 25) |
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(2,208) |
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— |
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(6,092) |
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— |
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Dividends and interest on capital paid to non-controlling interest |
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(3) |
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(5) |
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(6) |
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(8) |
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Share buyback program (note 25) |
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(2,004) |
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— |
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(2,004) |
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— |
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Net cash used in financing activities |
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(4,433) |
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(170) |
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(9,318) |
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4,402 |
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Increase (decrease) in cash and cash equivalents |
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206 |
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496 |
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(3) |
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5,682 |
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Cash and cash equivalents at the beginning of the period |
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12,883 |
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11,788 |
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13,487 |
|
7,350 |
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Effects of exchange rate changes on cash and cash equivalents |
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560 |
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(171) |
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165 |
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(919) |
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Cash and cash equivalents at end of the period |
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13,649 |
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12,113 |
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13,649 |
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12,113 |
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Non-cash transactions: |
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Additions to property, plant and equipment - capitalized loans and borrowing costs |
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14 |
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12 |
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30 |
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44 |
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Cash flow from operating activities: |
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Income before income taxes |
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9,610 |
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1,064 |
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16,897 |
|
576 |
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Adjusted for: |
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Provisions related to Brumadinho event (note 20) |
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— |
|
21 |
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— |
|
21 |
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Equity results and other results in associates and joint ventures (note 13) |
|
454 |
|
535 |
|
470 |
|
701 |
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Impairment and disposal of non-current assets |
|
432 |
|
403 |
|
593 |
|
432 |
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Depreciation, depletion and amortization |
|
849 |
|
807 |
|
1,580 |
|
1,622 |
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Financial results, net (note 6) |
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(350) |
|
485 |
|
(273) |
|
2,770 |
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Changes in assets and liabilities: |
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|
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Accounts receivable |
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(1,105) |
|
(922) |
|
296 |
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(301) |
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Inventories |
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(188) |
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(125) |
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(362) |
|
(352) |
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Suppliers and contractors (i) |
|
291 |
|
108 |
|
35 |
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(566) |
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Provision — Payroll, related charges and other remunerations |
|
82 |
|
115 |
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(207) |
|
(93) |
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Payments related to Brumadinho event (note 20) (ii) |
|
(303) |
|
(155) |
|
(452) |
|
(371) |
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Other assets and liabilities, net |
|
(495) |
|
(225) |
|
(627) |
|
(323) |
|
Cash flow from operations (a) |
|
9,277 |
|
2,111 |
|
17,950 |
|
4,116 |
(i) Includes variable lease payments.
(ii) In addition, the Company has incurred in expenses in the amount of US$185 and US$300 for the three and six-month periods ended June 30, 2021, respectively (US$109 and US$268 for the three and six-month periods ended June 30, 2020).
The accompanying notes are an integral part of these interim financial statements.
5
Consolidated Statement of Financial Position
In millions of United States dollars
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Notes |
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June 30, 2021 |
|
December 31, 2020 |
|
Assets |
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|
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|
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Current assets |
|
|
|
|
|
|
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Cash and cash equivalents |
|
19 |
|
13,649 |
|
13,487 |
|
Short-term investments |
|
19 |
|
951 |
|
771 |
|
Accounts receivable |
|
9 |
|
4,954 |
|
4,993 |
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Other financial assets |
|
11 |
|
214 |
|
329 |
|
Inventories |
|
10 |
|
4,701 |
|
4,061 |
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Recoverable taxes |
|
|
|
668 |
|
509 |
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Others |
|
|
|
266 |
|
253 |
|
|
|
|
|
25,403 |
|
24,403 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Non-current assets |
|
|
|
|
|
|
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Judicial deposits |
|
23(c) |
|
1,326 |
|
1,268 |
|
Other financial assets |
|
11 |
|
1,430 |
|
1,784 |
|
Recoverable taxes |
|
|
|
1,440 |
|
1,091 |
|
Deferred income taxes |
|
7(a) |
|
9,338 |
|
10,335 |
|
Others |
|
|
|
701 |
|
651 |
|
|
|
|
|
14,235 |
|
15,129 |
|
|
|
|
|
|
|
|
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Investments in associates and joint ventures |
|
13 |
|
2,197 |
|
2,031 |
|
Intangibles |
|
14 |
|
10,997 |
|
9,296 |
|
Property, plant and equipment |
|
15 |
|
43,884 |
|
41,148 |
|
|
|
|
|
71,313 |
|
67,604 |
|
Total assets |
|
|
|
96,716 |
|
92,007 |
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Liabilities |
|
|
|
|
|
|
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Current liabilities |
|
|
|
|
|
|
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Suppliers and contractors |
|
|
|
3,777 |
|
3,367 |
|
Loans, borrowings and leases |
|
19 |
|
992 |
|
1,136 |
|
Other financial liabilities |
|
11 |
|
1,547 |
|
1,906 |
|
Taxes payable |
|
|
|
1,678 |
|
952 |
|
Settlement program ("REFIS") |
|
7(c) |
|
356 |
|
340 |
|
Liabilities related to associates and joint ventures |
|
21 |
|
1,467 |
|
876 |
|
Provisions |
|
22 |
|
1,156 |
|
1,826 |
|
Liabilities related to Brumadinho |
|
20 |
|
2,223 |
|
1,910 |
|
De-characterization of dams |
|
20 |
|
454 |
|
381 |
|
Dividends payable |
|
|
|
27 |
|
1,220 |
|
Others |
|
|
|
658 |
|
680 |
|
|
|
|
|
14,335 |
|
14,594 |
|
|
|
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
|
|
Loans, borrowings and leases |
|
19 |
|
12,870 |
|
13,891 |
|
Participative stockholders' debentures |
|
18 |
|
4,687 |
|
3,413 |
|
Other financial liabilities |
|
11 |
|
3,027 |
|
4,564 |
|
Settlement program ("REFIS") |
|
7(c) |
|
2,336 |
|
2,404 |
|
Deferred income taxes |
|
7(a) |
|
1,985 |
|
1,770 |
|
Provisions |
|
22 |
|
8,003 |
|
8,434 |
|
Liabilities related to Brumadinho |
|
20 |
|
2,268 |
|
2,665 |
|
De-characterization of dams |
|
20 |
|
1,701 |
|
1,908 |
|
Liabilities related to associates and joint ventures |
|
21 |
|
1,024 |
|
1,198 |
|
Streaming transactions |
|
|
|
1,961 |
|
2,005 |
|
Others |
|
|
|
160 |
|
340 |
|
|
|
|
|
40,022 |
|
42,592 |
|
Total liabilities |
|
|
|
54,357 |
|
57,186 |
|
|
|
|
|
|
|
|
|
Stockholders' equity |
|
25 |
|
|
|
|
|
Equity attributable to Vale's stockholders |
|
|
|
41,661 |
|
35,744 |
|
Equity attributable to non-controlling interests |
|
|
|
698 |
|
(923) |
|
Total stockholders' equity |
|
|
|
42,359 |
|
34,821 |
|
Total liabilities and stockholders' equity |
|
|
|
96,716 |
|
92,007 |
The accompanying notes are an integral part of these interim financial statements.
6
Consolidated Statement of Changes in Equity
In millions of United States dollars
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative |
|
|
|
attributable |
|
Equity |
|
Total |
|
|
|
|
|
|
|
|
|
Treasury |
|
Other |
|
translation |
|
Retained |
|
to Vale’s |
|
attributable to non- |
|
stockholders’ |
|
|
|
Share capital |
|
Capital reserve |
|
Profit reserves |
|
shares |
|
reserves |
|
adjustments |
|
earnings |
|
stockholders |
|
controlling interests |
|
equity |
|
Balance at December 31, 2020 |
|
61,614 |
|
1,139 |
|
7,042 |
|
(2,441) |
|
(2,056) |
|
(29,554) |
|
— |
|
35,744 |
|
(923) |
|
34,821 |
|
Net income (loss) |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
13,132 |
|
13,132 |
|
(118) |
|
13,014 |
|
Other comprehensive income |
|
— |
|
— |
|
9 |
|
— |
|
518 |
|
(417) |
|
— |
|
110 |
|
2 |
|
112 |
|
Dividends and interest on capital of Vale's stockholders (note 25) |
|
— |
|
— |
|
(4,319) |
|
— |
|
— |
|
— |
|
(724) |
|
(5,043) |
|
— |
|
(5,043) |
|
Dividends of non-controlling interest |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(24) |
|
(24) |
|
Acquisition and disposal of non-controlling interest (note 12) |
|
— |
|
— |
|
— |
|
— |
|
(331) |
|
— |
|
— |
|
(331) |
|
1,761 |
|
1,430 |
|
Share buyback program (note 25) |
|
— |
|
— |
|
— |
|
(2,004) |
|
— |
|
— |
|
— |
|
(2,004) |
|
— |
|
(2,004) |
|
Share-based payment (note 24) |
|
|
|
— |
|
|
|
— |
|
46 |
|
|
|
|
|
46 |
|
|
|
46 |
|
Treasury shares utilized in the period (note 25) |
|
— |
|
— |
|
— |
|
7 |
|
— |
|
— |
|
— |
|
7 |
|
— |
|
7 |
|
Balance at June 30, 2021 |
|
61,614 |
|
1,139 |
|
2,732 |
|
(4,438) |
|
(1,823) |
|
(29,971) |
|
12,408 |
|
41,661 |
|
698 |
|
42,359 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative |
|
|
|
attributable |
|
Equity |
|
Total |
|
|
|
|
|
|
|
|
|
Treasury |
|
Other |
|
translation |
|
Retained |
|
to Vale’s |
|
attributable to non- |
|
stockholders’ |
|
|
|
Share capital |
|
Capital reserve |
|
Profit reserves |
|
shares |
|
reserves |
|
adjustments |
|
earnings |
|
stockholders |
|
controlling interests |
|
equity |
|
Balance at December 31, 2019 |
|
61,614 |
|
1,139 |
|
7,090 |
|
(2,455) |
|
(2,110) |
|
(25,211) |
|
— |
|
40,067 |
|
(1,074) |
|
38,993 |
|
Net income (loss) |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
1,234 |
|
1,234 |
|
(154) |
|
1,080 |
|
Other comprehensive income |
|
— |
|
— |
|
(1,871) |
|
— |
|
(409) |
|
(4,899) |
|
— |
|
(7,179) |
|
25 |
|
(7,154) |
|
Dividends of non-controlling interest |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(5) |
|
(5) |
|
Capitalization of non-controlling interest advances |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
6 |
|
6 |
|
Treasury shares utilized in the period (note 25) |
|
— |
|
— |
|
— |
|
14 |
|
— |
|
— |
|
— |
|
14 |
|
— |
|
14 |
|
Balance at June 30, 2020 |
|
61,614 |
|
1,139 |
|
5,219 |
|
(2,441) |
|
(2,519) |
|
(30,110) |
|
1,234 |
|
34,136 |
|
(1,202) |
|
32,934 |
The accompanying notes are an integral part of these interim financial statements.
7
|
|
|
|
Selected Notes to the Interim Financial Statements Expressed in millions of United States dollar, unless otherwise stated |
|
|
1. |
Corporate information |
Vale S.A. and its subsidiaries (“Vale” or the “Company”) are iron ore and iron ore pellets producers, which are key raw materials for steelmaking, and nickel producers, which is used to produce stainless steel and metal alloys employed in the production process of several products. The Company also produces copper, metallurgical and thermal coal, manganese ore and, platinum group metals, gold, silver and cobalt. The information by segment is presented in note 4.
Vale S.A. (the “Parent Company”) is a public company headquartered in the city of Rio de Janeiro, Brazil with securities traded on the stock exchanges of São Paulo – B3 S.A. (VALE3), New York - NYSE (VALE) and Madrid – LATIBEX (XVALO).
|
2. |
Basis of preparation of the interim financial statements |
a) Statement of compliance
The consolidated interim financial statements of the Company (“interim financial statements”) have been prepared and are being presented in accordance with IAS 34 Interim Financial Reporting of the International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).
b) Basis of presentation
The interim financial statements have been prepared to update users about relevant events and transactions that occurred in the period and should be read in conjunction with the financial statements for the year ended December 31, 2020. The accounting policies, accounting estimates and judgements, risk management and measurement methods are the same as those applied when preparing the last annual financial statements, except for the change in the accounting practice for the share-based payment plans as disclosed in note 24.
These interim financial statements were authorized for issue by the Executive Board on July 28, 2021.
The interim financial statements of the Company are measured using the currency of the primary economic environment in which the entity operates (“functional currency”), which in the case of the Parent Company is the Brazilian real (“R$”). For presentation purposes, these interim financial statements are presented in United States dollar (“US$”) as the Company believes that this is how international investors analyze the interim financial statements.
The exchange rates used by the Company to translate its foreign operations are as follows:
8
|
|
|
|
Selected Notes to the Interim Financial Statements Expressed in millions of United States dollar, unless otherwise stated |
|
3. Significant events in the current period
The financial position, cash flows and performance of the Company were particularly affected by the following events and transactions during the three-month period ended June 30, 2021:
| ● | In April 2021, the Company approved a share buyback program for its common shares, limited to a maximum of 270,000,000 common shares and their respective ADRs. Until June 30, 2021, the Company acquired 93,088,200 shares, in the total amount of US$ 2,004 (note 25). |
| ● | In June 2021, the Company approved and paid dividends to its shareholders in the amount of US$2,200 (note 25). |
| ● | In June 2021, the Company paid US$2,517 in relation to the Project Finance and concluded all precedent conditions to acquire the interests held by Mitsui & Co., Ltd (“Mitsui”) in both Moatize coal mine and Nacala Logistics Corridor (“NLC”). Following the conclusion of the transaction, the Company has started consolidating NLC on its balance sheet and recognized a loss in the amount of US$771 as “Impairment and disposals of non-current assets” (note 12). |
| ● | In June 2021, Fundação Renova reviewed the expected cash outflows to comply with the mitigation and compensation programs, which resulted in an addition of US$560 to the provision. This amount was recognized in the income statement as “Equity results and other results in associates and joint ventures” for the three-month period ended June 30, 2021 (note 21). |
| ● | In June 2021, production and maintenance employees of Sudbury, Canada, represented by United Steelworkers (“USW”) voted to reject the Company’s offer of a new five-year collective bargaining agreement. As a result, the Company stopped its operation at that location and recognized a loss in the amount of US$59 as “Pre-operating and operational stoppage”. However, if the strike continues for an extended period of time, the results of that operations may be materially impacted. The Company will continue discussions with USW to reach an agreement as soon as possible in order to resume its operation. |
4. Information by business segment and by geographic area
The Company operates the following reportable segments: Ferrous Minerals, Base Metals and Coal. The segments are aligned with products and reflect the structure used by Management to evaluate Company’s performance. The responsible bodies for making operational decisions, allocating resources and evaluating performance ("chief operating decision maker" under IFRS 8 - Operating Segments) are the Executive Boards and the Board of Directors. Accordingly, the performance of the operating segments is assessed based on a measure of adjusted EBITDA.
The Company allocates to “Others” the revenues and cost of other products, services, research and development, investments in joint ventures and associates of other business and unallocated corporate expenses. Additionally, the costs related to the Brumadinho event are not directly linked to the Company's operating activities and, therefore, are allocated to "Other" as well.
In the current period, the Company has allocated the financial information of Vale Nouvelle-Calédonie SAS (“VNC”) operation to “Others” as this operation is no longer analyzed by the chief operating decision maker as part of to the performance of the Base Metals business segment due to the sale of this operation. The comparative periods were restated to reflect this change in the allocation criteria.
9
|
|
|
|
Selected Notes to the Interim Financial Statements Expressed in millions of United States dollar, unless otherwise stated |
|
a) Adjusted EBITDA
The definition of Adjusted EBITDA for the Company is the operating income or loss plus dividends received and interest from associates and joint ventures, and excluding the amounts charged as (i) depreciation, depletion and amortization and (ii) impairment and disposal of non-current assets.
