VALE Vale SA

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

May 2018

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.)

(Check One) Form 20-F x 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 x

(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 x

(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 x

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

Table of Contents:

2

1. Identification of the people responsible for the content of the form

1.1 - Statement and Identification of People in Charge

The aforementioned officers state that:

a. they reviewed the reference form;

b. all information contained in the form complies with the provisions of CVM Instruction 480, in particular articles 14 to 19;

c. the set of information contained therein is a true, accurate and complete portrait of the economic-financial situation of the issuer and the risks inherent to its activities and the securities issued by it.

STATEMENT OF THE CHIEF EXECUTIVE OFFICER

FOR THE PURPOSES OF ITEM 1.1 OF THE REFERENCE FORM

Fabio Schvartsman , a Brazilian citizen, married, production engineer, bearer of Identity Card SSP/SP no. 4.144.579-X, enrolled with the CPF/MF under no. 940.563.318-04, residing and domiciled in the city and state of Rio de Janeiro, with business address at Torre Oscar Niemeyer, Praia de Botafogo, 186, suite 701 to 1901, Botafogo, CEP 22250-145, in the city and state of Rio de Janeiro, in the capacity of Chief Executive Officer of Vale S.A. , a corporation with its principal place of business in the city and state of Rio de Janeiro, at Torre Oscar Niemeyer, Praia de Botafogo, 186, suite 701 to 1901, Botafogo, CEP 22250-145, enrolled with the CNPJ/MF under no. 33.592.510/0001-54 (“ Company ”), hereby states that:

a. he reviewed the Company’s Reference Form;

b. all information contained in the Reference Form complies with the provisions of the Securities and Exchange Commission Instruction no. 480, of December 7 th , 2009, as amended, especially articles 14 to 19; and

c. the set of information contained therein is a true, accurate and complete portrait of the Company’s economic-financial situation and the risks inherent to its activities and the securities issued by it.

STATEMENT OF THE CHIEF FINANCIAL OFFICER AND INVESTOR RELATIONS

OFFICER

FOR THE PURPOSES OF ITEM 1.1 OF THE REFERENCE FORM

Luciano Siani Pires , a Brazilian citizen, married, mechanical engineer, bearer of Identity Card IFP/RJ no. 07.670.915-3, enrolled with the CPF/MF under no. 013.907.897-56, residing and domiciled in the city and state of Rio de Janeiro, with business address at Torre Oscar Niemeyer, Praia de Botafogo, 186, suite 701 to 1901, Botafogo, CEP 22250-145, in the city and state of Rio de Janeiro, in the capacity of Chief Executive Officer of Vale S.A. , a corporation with its principal place of business in the city and state of Rio de Janeiro, at Torre Oscar Niemeyer, Praia de Botafogo, 186, suite 701 to 1901, Botafogo, CEP 22250-145, enrolled with the CNPJ/MF under no. 33.592.510/0001-54 (“ Company ”), for the purposes of item 1.1 of the Company Reference Form, hereby states that:

a. he reviewed the Company’s Reference Form;

b. all information contained in the Reference Form complies with the provisions of the Securities and Exchange Commission Instruction no. 480, of December 7 th , 2009, as amended, especially articles 14 to 19; and

c. the set of information contained therein is a true, accurate and complete portrait of the Company’s economic-financial situation and the risks inherent to its activities and the securities issued by it.

1.2 - Individual statement of new holder of the position of Chief Executive Officer or Investor Relations Officer duly signed, attesting that:

Item not applicable.

2.3 - Other relevant information

The Vale Board of Directors, at a meeting held on November 28th, 2013, approved the contracting of KPMG Auditores Independentes to provide audit services for the financial statements for a period of three years, beginning in 2014. On July 3rd, 2017, the extension of the term of the agreement was approved for an additional period of 2 years, thus ending on July 3rd, 2019. That service started to be provided as of the review of the quarterly information (ITRs) for the second quarter of 2014.

The Company has specific internal procedures for the pre-approval of services contracted with its external auditors, in order to avoid conflict of interest or the loss of objectivity of its independent auditors.

The Company’s policy, in relation to independent auditors and in the provision of services not related to external auditing, is based on principles that preserve its independence.

In line with best corporate governance practices, all services provided by our independent auditors are pre-approved by our Fiscal Council and a letter of independence is also obtained from the external auditors.

In addition, the Company clarifies that there are no material transfers of services or resources between the auditors and parties related to the Company, as defined in CVM Deliberation 642/10, which approves Technical Pronouncement CPC 05 (R1).

3. Selected financial information

3.1 - Financial Information - Consolidated

3.2 - Non-accounting measurements

a. value of non-accounting measurements

The Company uses Adjusted EBITDA and Adjusted EBIT as non-accounting measurement methods. In 2017, 2016 and 2015, respectively, (i) Adjusted EBITDA was assessed in the amount of R$48,992 million, R$40,906 million and R$21,741 million, and (ii) Adjusted EBIT was assessed in the amount of R$35,837 million, R$28,130 million and R$8,277 million, respectively.

b. reconciliations between the amounts disclosed and the amounts of the audited financial statements

c. reason why the Company understands that such measurement is more appropriate for the correct understanding of its financial condition and the result of its operations

We calculated Adjusted EBITDA and Adjusted EBITDA according to CVM Instruction No. 527 of October 04, 2012 (“ CVM Instruction 527 ”).

Adjusted EBITDA corresponds to EBITDA added with dividends received and interest from affiliates and joint ventures, and excluding depreciation, amortization, and depletion, impairment and other gains or losses on non-current assets and onerous contracts. It presents an approximate measure of the Company’s cash generation, since it excludes non-recurring effects and non-cash.

Adjusted EBIT corresponds to Adjusted EBITDA including depreciation, amortization, and depletion, and dividends received and interest from affiliates and joint ventures.

Adjusted EBITDA and Adjusted EBIT are not measurement methods acknowledged by BR GAAP or IFRS. Adjusted EBITDA does not represent the cash flow for the periods presented and should therefore not be considered as an alternative measure for net profit (loss) as an isolated indicator of operating performance or as an alternative to cash flow or as a liquidity source.

The definitions of Adjusted EBITDA and Adjusted EBIT used by Vale may not be compared to Adjusted EBITDA and Adjusted EBIT disclosed by other companies.

3.3 - Events subsequent to the latest financial statements

The Company does not provide guidance in the form of quantitative forecasts regarding its future financial performance. The Company seeks to disclose as much information as possible about its views on the various markets where it operates, its guidelines, strategies and its implementation, in order to provide capital market participants with sound basis for their expectations regarding the Company’s performance in the medium and long term.

The Company’s Consolidated Financial Statements relating to the fiscal year ended December 31, 2017 were issued on February 27, 2018.

The Company’s Consolidates Financial Statements, pursuant to the rules provided in the Technical Pronunciation CPC 24, as approved by Deliberation CVM No. 593/09, contain the following subsequent events:

1.               In January 2018, the Company and Mosaic completed the sale transaction of fertilizer assets, which was preceded by some final adjustments made by the parties under the original terms and conditions of the negotiation. As a result of these changes, the Company received R$3,573 billion (US$1,080 billion) in cash and 34.2 million common shares, corresponding to 8.9% of Mosaic’s net equity after the issuance of these shares (R$2,901 billion (US$877 million), based on Mosaic’s share quotation on the closing date of the transaction). For more details, see note 14 to the Company’s consolidated financial statements.

2.               In a resolution of the meeting of the Board of Directors held in February 2018, a supplementary payment to the shareholders’ compensation was approved in the total gross amount of R$2.6 billion by way of interest on equity. These resolutions totalize the minimum mandatory compensation for the year 2017, which was paid in March 2018. For further details, see note 29 to the Company’s consolidated financial statements.

3.4 — Income Allocation Policy

3.5 - Distribution of dividends and retention of net income

January 01, 2017 to December 31, 2017

3.6 - Report of dividends as retained earnings or reserves

3.7 - Level of indebtedness

3.8 - Obligations according to nature and maturity

Note: The information contained in this item refers to the Company’s consolidated financial statements. The debt securities field comprises debt securities and transactions in the stock market.

3.9 - Other relevant information

Additional Information relating to Item 3.4

On November 27, 2017, all shares issued by Vale under negotiation at B3 became common, with the exception of twelve special class preferred shares held by the Federal Government. For more information on such issue, see items 3.3 and 15.7 in this Reference Form.

It should be noted that the Company’s Special Meeting of Shareholders held on December 21, 2017 approved (i) the proposal for the migration of Vale to the special listing segment of B3 S.A. - Brazil, Exchange, a Counter denominated Novo Mercado (New Market), and (ii) the amendment of the Company’s Articles of Incorporation to reflect the conversion of all Class A preferred shares into common shares, as well as to adapt it to the Novo Mercado rules in force at the time of the migration.

Additional Information on Financial Agreements

Part of the financing agreements entered into by the Company, as well as the outstanding debt securities issued by the Company (for more information on such securities, see item 18 of this Reference Form) contain clauses that determine the early maturity of outstanding installments in case of cross acceleration of another financial agreement entered into with the same counterparty and/or any other financial agreement.

The Company also clarifies that since the end of the fiscal year ended December 31, 2017, the Company has already prepaid US$1.75 billion of debt in March (corresponding to R$5.70 billion) and other US$499 million in April (corresponding to R$1.69 billion).

Additional Information on Distribution of Dividends

Vale recorded a net loss in the amount of R$44,212 million for the fiscal year ended December 31, 2015, and said loss is absorbed in accordance with the sole paragraph of article 189 of Law 6,404 / 1976. Accordingly, no distribution of dividends was approved by the Annual Shareholders’ Meeting held on April 25, 2016.

It should be noted that dividends and interest on shareholders’ equity distributed by the Company in said fiscal year of 2015, as indicated in item 3.6 above, were distributed based on the retained earnings reserves approved in the Company’s balance sheet referring to 2014. Considering these reserves, the Board of Directors, at its meeting on (a) April 14, 2015, approved the payment, as of April 30, 2015, of the first installment of minimum compensation to Vale’s shareholders for 2015, in the total gross amount of R$3,101,100,000.00 by way of interest on equity, corresponding to the gross total amount of R$0.601760991 per outstanding common or preferred share issued by Vale, which is subject to the Income Tax at the current rate; (b) October 15, 2015, the payment, as of October 30, 2015, of the second installment of compensation to shareholders for 2015 by way of dividends, in the total gross amount of R$1,925,350,000.00, corresponding to the amount of R$0.3773609533 per outstanding common or preferred share issued by Vale.

Additional Information on Compensation Policies

The amendment to the shareholders’ compensation policy was approved at the Annual and Special Shareholders’ Meeting held on April 25, 2016. According to said approved policy:

·                   Shareholders’ compensation will be at the discretion of the Board of Directors, which will resolve on the amount to be distributed according to the Company’s business situation, considering, among other factors, the Company’s leverage level and future cash commitments.

·                   The proposed shareholders’ compensation will be analyzed and paid, if payment is the elected option, at two times. The first installment (initial installment) will be analyzed and, if applicable, paid in October of the current year and the second installment (complementary installment) will be analyzed and, if applicable, paid by the end of April of the following year. The amount of the first installment will be determined by the Company based on the accumulated profit or loss of the period and the estimated free cash flow generation for the year. The amount of the second installment will be determined after the calculation of the profit or loss for the fiscal year.

·                   The proposal for the first installment of the shareholders’ compensation will be submitted by the Board of Executive Officers to be resolved by the Board of Directors in October of each year and will be announced to the market as soon as it is approved. The second installment of compensation shall be included in the proposed allocation of net income for the year to be submitted by the Board of Executive Officers to the Board of Directors within the first three months of the subsequent year. The amount related to the second installment will be announced to the market after its approval by the Board of Directors, with payment subject to approval by the Annual Shareholders’ Meeting.

·                   The amount of the first installment of the shareholders’ compensation will be denominated in US Dollars and the payment will be made by way of dividends and/or interest on equity. The determined amount will be paid in Brazilian currency, with the conversion of the amount proposed in US Dollars into Reais based on the US Dollar exchange rate (Ptax-option 5) disclosed by the Central Bank of Brazil (BACEN), on the business day prior to the meeting of the Board of Directors that has resolved on the declaration and the respective payment of the shareholders’ compensation. The amount of the second installment will be denominated and paid in Reais, and the payment may be made by way of dividends and/or interest on equity. The equivalent amount in US Dollars will be calculated based on the US Dollar exchange rate (Ptax-option 5), published by the Central Bank of Brazil (BACEN) on the business day prior to payment.

·                   During the year, the Board of Executive Officers may propose to the Board of Directors, based on an analysis of the Company’s cash flow evolution and the availability of profits or reserves of existing profits, the distribution to shareholders of an additional compensation relating to the amounts paid in October or April.

Nevertheless, the Company clarifies that, at a meeting held on March 29, 2018, its Board of Directors approved a new Shareholders’ Compensation Policy, which replaces the aforementioned policy, the contents of which are available for consultation on the websites of CVM (www.cvm.gov.br) and the Company (www.vale.com). According to said approved policy:

·                   Shareholders’ compensation will be composed of two semiannual installments, the first in September of the current year and the second in March of the following year, provided that the Board of Directors may declare interest on equity in the month of December of each year for payment in March of the next year. Such amounts will be deducted from the March installment.

·                   The compensation will be 30% of the Adjusted EBITDA minus Current Investment calculated in the first half income statement for the September installment, and the second half income statement for the March installment.

·                   The Board of Directors may resolve on additional compensation by way of distribution of extraordinary dividends.

4.1 — Description of risk factors

(a) Risks related to the Company

Lower cash flows, as a result of the fall in prices of the Company’s products, may negatively affect the Company’s credit ratings, as well as the cost and availability of financing.

Lower prices for the Company’s products may adversely affect its future cash flows, credit ratings and its ability to obtain financing at attractive rates. This may also adversely affect its ability to finance its capital investments, provide the financial guarantees required to get licenses in certain jurisdictions, pay dividends, and meet the financial covenants included in some of its long-term debt instruments.

It is possible that the Company will not be able to implement its strategy regarding divestitures and strategic partnerships.

Over the last few years, the Company has entered into contracts for the disposition of assets and strategic partnerships, aiming at optimizing its business portfolio and implementing its financing strategy and capital investment plans. It is possible that the Company will continue to seek disinvestment opportunities and strategic partnerships in the future. The Company is exposed to a number of risks relating to these transactions, including the imposition of regulatory conditions, the inability to meet the conditions for conclusion or receipt of additional payments, in addition to the negative market reactions. Should the Company fail to conclude dispositions or strategic partnerships, it may have to review its business and financing strategy and incur additional costs, which could, in turn, adversely affect its operating results, financial condition or reputation.

The Company is involved in legal proceedings that may have a material adverse effect on its business in the event of unfavorable outcomes.

The Company is involved in legal proceedings in which the adverse parties have requested preliminary injunctions to suspend some of its operations or claim substantial amounts, including several legal proceedings and investigations related to the collapse of the Fundão tailings dam owned by Samarco. Although the Company is vigorously defending these actions, their results are uncertain and may adversely affect its business, its liquidity and the value of securities issued by Vale or its subsidiaries. For information on such proceedings, see items 4.3 to 4.7 below.

The Company’s projects are subject to risks that may result in an increase in costs or a delay in its implementation.

The Company is investing to maintain and further increase its production capacity and logistics capabilities. Vale review on a regular basis the economic feasibility of its projects. As a result of this review, the Company may decide to delay, suspend or interrupt the implementation of certain projects. Its projects are also subject to a number of risks that may adversely affect its growth prospects and profitability, including the following:

·                                           The Company may not be able to get financing at attractive rates.

·                                           There may be delays or higher-than-estimated costs in obtaining the necessary equipment or services and in implementing new technologies to build and operate a project.

·                                           Its efforts to develop projects on schedule may be hindered by the lack of infrastructure, including reliable telecommunication and power supply services.

·                                           Suppliers and contractors may fail to meet their contractual obligations assumed to the Company.

·                                           It may face unexpected weather conditions or other force majeure events.

·                                           The Company may not be able to get the required permits and licenses to build a project, or it may experience delays or higher-than-estimated costs in obtaining or renewing them.

·                                           Changes in market conditions or regulations may make a project less profitable than expected at the time the work was started.

·                                           There may be accidents or incidents during project implementation.

·                                           It may face shortages of skilled personnel.

Operational problems may materially and adversely affect the Company’s business and financial performance.

Ineffective project management and operational flaws might require the Company to suspend or curtail operations, which could generally reduce its productivity. Operational incidents may entail failure of plants and machinery. There is no assurance that ineffective project management or other operational problems will not occur. Any damages to the Company’s projects or delays in its operations caused by ineffective project management or operational flaws may materially and adversely affect its business and operating results.

The Company’s business is subject to a number of operational risks that may adversely affect the results of its operations, such as:

·                                           Unexpected weather conditions or other force majeure events.

·                                           Adverse mining conditions delaying or hampering its ability to produce the expected quantity of minerals and to meet specifications required by customers, which can trigger price adjustments.

·                                           There may be accidents or incidents involving its mines and related infrastructure, such as dams, plants, railroads, railway bridges, ports and ships.

·                                           The Company may experience delays or interruptions in the transportation of its products, including in railroads, ports and ships.

·                                           Tropical diseases, HIV/AIDS and other contagious diseases in regions where some of its operations or some of its projects are located, which pose health and safety risks to its employees.

·                                           Employment disputes that may disrupt its operations from time to time.

·                                           Changes in market conditions or regulations may affect the economic prospects of an operation and make it inconsistent with the Company’s business strategy.

·                                           Failure to get the required permits and licenses renewed, or delays or higher-than-expected costs to get them.

·                                           Disruptions to or unavailability of crucial information technology systems and services resulting from accidents or malicious acts.

The Company’s business may be adversely affected by the failure of its counter-parties, joint venture partners or non-controlling joint ventures to comply with their obligations.

Customers, suppliers, contracted companies, financial institutions, joint venture partners and other counter-parties may fail to perform existing contracts and obligations, which may unfavorably impact the Company’s operations and financial results. The ability of Company’s

suppliers and customers to perform their obligations may be adversely affected in times of financial stress or economic downturn.

Significant parts of Vale’s iron ore, pelletizing, nickel, coal, copper, energy and other business segments are operated through joint ventures. This may reduce the Company’s level of control, as well as its ability to identify and manage risks. Vale’s forecasts and plans for these joint ventures and consortia assume that its partners will observe their obligations to make capital contributions, purchase products and, in some cases, provide skilled and competent managerial personnel. If any of its partners fails to observe their commitments, the affected joint venture or consortium may not be able to operate in accordance with its business plans, or it might be that the Company has to increase the level of its investment to implement these plans.

Some of the Company’s investments are controlled by partners or have a separate and independent management. These investments may not fully comply with the Company’s standards, controls and procedures, including health, safety, environment and community standards. Failure by any of its partners or joint ventures to adopt adequate standards, controls and procedures may lead to higher costs, reduced production or environmental, health and safety incidents or accidents, which may adversely affect the Company’s results and reputation.

The Company may not have adequate insurance coverage for some business risks.

The Company’s business is generally subject to a number of risks and hazards, which could result in damage to or destruction of properties, facilities and equipment. The insurance that Vale maintain against risks that are typical in its business may not provide adequate coverage. Insurance against some risks (including liabilities for environmental pollution or certain damages to the environment or interruption of certain business activities) may not be available at a reasonable cost, or at all. Even when available, the Company may self-insure in cases where it determines that this will bring it a higher cost-benefit ratio. As a consequence, accidents or other negative events involving its mining, production or transportation facilities could have an adverse effect on its operations.

Labor disputes may interrupt the Company’s operations from time to time.

A substantial number of the Company’s employees, and some of the employees of its subcontractors, are represented by labor unions and are covered by collective bargaining or other labor agreements, which are subject to periodic negotiation. Strikes and other labor stoppages in any of its operations may adversely affect the operation of these facilities, the timing of completion and cost of the Company’s main projects. For more information on labor relations, see item 14 of this Reference Form.

In addition to it, the Company may be adversely affected by labor stoppages involving third parties who may provide it with goods or services.

Higher energy costs or energy shortages can adversely affect the Company’s business.

Fuel and electricity costs are a significant component of the Company’s production cost, accounting for 10.8% of its total cost of goods sold in 2017. In order to fulfill its demand for energy, the Company depends on the following sources: oil byproducts, which accounted for 32.0% of total energy needs in 2017, electricity (31.6%), natural gas (16.7%), coal (15.0%) and other energy sources (4.7%).

Electricity costs accounted for 4.6% of its total cost of goods sold in 2017. If the Company is unable to secure reliable access to electricity at acceptable prices, it may be forced to curtail production or may experience higher production costs, either of which would adversely affect its operating results. The Company faces the risk of energy shortages in the countries where it has operations and projects, especially in Brazil, due to lack of infrastructure or weather conditions, such as floods or droughts. Future shortages, and government efforts to respond to or prevent shortages, may adversely impact the cost or supply of electricity for the Company’s operations.

Failures in the Company’s information technology systems, operational technology, computer security, and telecommunications may adversely affect the Company’s business and reputation.

The Company relies on information technology systems, operational technology and telecommunications for the operation of its various commercial procedures. Failures in these systems, whether caused by obsolescence, technical flaws, negligence, accident or malicious acts, may result in the disclosure or theft of confidential information, misappropriation of funds, and interference or interruption in the Company’s business operations. The Company may be the target of attempts to get unauthorized access to operational technology and information technology systems through the Internet, including sophisticated and coordinated attempts, often referred to as advanced persistent threats. Disruptions in key information technology, operational technology, computer security, or telecommunications systems, or information security breaches, may damage the Company’s reputation and materially adversely affect its operating performance, earnings and financial position.

The Company’s reserve estimates may materially differ from mineral quantities that the Company is actually able to recover. The Company’s estimates of the mines’ useful life may prove inaccurate, and market price fluctuations and changes in operating and capital costs may render certain ore reserves economically unfeasible to mine.

The reserves reported by the Company are estimated quantities of ore and minerals that the Company has determined can be economically mined and processed under present and assumed future conditions. There are numerous uncertainties inherent in estimating quantities of reserves and in projecting potential future rates of mineral production, including factors beyond the Company’s control. Reserve reporting 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, 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 the Company’s anticipates. Reserve estimates and estimates of the mines’ useful life may require revisions based on actual production experience, projects, updated exploratory drilling data and other factors. Lower market prices of minerals and metals, reduced recovery rates or increased operating and capital costs due to inflation, exchange rates, changes in regulatory requirements or other factors may render proven and probable reserves economically unfeasible to mine and may ultimately result in a reduction of reserves. Such a reduction may affect depreciation and amortization rates and have an adverse effect on the Company’s financial performance.

The Company may not be able to replenish its reserves, which could adversely affect its mining prospects.

The Company engages in mineral exploration, which is highly uncertain in nature, involves many risks and frequently is non-productive. The Company’s exploration programs, which involve significant expenditures, may fail to result in the expansion or replacement of reserves depleted by current production. If the Company does not develop new reserves, it will not be able to sustain its current level of production beyond the remaining useful lives of its existing mines.

The feasibility of new mineral projects may change over time.

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 areas; and

·                   obtain the ore or extract the minerals from the ore.

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

The Company faces rising extraction costs or investment requirements over time as reserves deplete.

Reserves are gradually depleted in the ordinary course of a given open pit or underground mining operation. As mining progresses, distances to the primary crusher and to tailings deposits become longer, pits become steeper, mines may move from being open pit to underground, and underground operations become deeper. In addition, for some types of reserves, mineralization grade decreases and hardness increases at greater depths. As a result, over time, the Company typically experiences rising extraction costs per unit with respect to each mine, or it may need to make additional investments, including for adaptation or construction of processing plants and for expansion or construction of tailings dams. Several of the Company’s mines have been operating for long periods, and it will likely experience rising extraction costs per unit in the future at these operations in particular.

The Company’s governance and compliance processes may fail to prevent regulatory penalties and reputational harm.

The Company operates in a global setting and its activities extend across countless jurisdictions and across complex regulatory structures with growing inspection activities around the world. The Company’s governance and compliance processes, which include review of internal controls over financial statements, may not timely identify or prevent future violations of governance, accounting or legal standards. The Company may be subject to breaches of its Code of Ethical Conduct, of anti-corruption policies and of business conduct protocols and to instances of fraudulent behavior, corrupt practices and dishonesty by its employees, contractors or other agents. Failure to comply with applicable laws and other standards by the Company may subject it to investigations by the authorities, litigation, fines, loss of its licenses to operate, disgorgement of profits, involuntary dissolution and reputational damage.

It could be difficult for investors to enforce any court order rendered outside Brazil against the Company or any of its associates.

The Company’s investors may be located in jurisdictions outside Brazil and could file actions against it or against its directors or executive officers in the Courts of their home jurisdictions. Vale is a Brazilian company, and the majority of its officers and directors are residents of Brazil. The vast majority of the Company’s assets and the assets of its officers and directors are likely to be located in jurisdictions other than the home jurisdictions of its foreign investors. It might not be possible for investors outside Brazil to serve process within their home jurisdictions upon the Company or upon its officers or directors who reside outside their home jurisdictions. In addition to it, a conclusive foreign judgment may be executed in the Brazilian Courts without a new examination of the merits only if previously ratified by the Superior Court of Justice, and the ratification shall only be granted if the foreign judgment: (a) comply with all the formalities required for its enforceability under the law of the country where it was rendered; (b) has been rendered by a competent court after the due service of process upon defendant, as required by applicable law; (c) is not subject to appeal; (d) does not conflict with a final and unappealable decision rendered by a Brazilian judicial authority; (e) has been certified by a Brazilian consulate

in the country where it was rendered or it is duly apostilled in accordance with the Convention Abolishing the Requirement of Legalization for Foreign Public Documents and accompanied by a sworn translation into Portuguese, unless such procedure has been exempted by an international treaty signed by Brazil; (f) does not cover matters of exclusive competence of the Brazilian Courts; and (g) is not contrary to Brazilian national sovereignty, public policies or good customs. Therefore, investors might not be able to recover against the Company or its directors and officers on judgments of the courts of their home jurisdictions predicated upon the laws of such jurisdictions.

(b)                                  Risks related to the Controller or Controlling Group of the Company and (c) Risks related to the Company’s shareholders.

The shareholders who sign the Company’s Shareholders’ Agreement have significant influence over Vale.

On August 14 th , 2017, Litel Participações S.A. (“Litel”), Bradespar S.A. (“Bradespar”), Mitsui & Co., Ltd. (“Mitsui”) and BNDES Participações S.A. (“BNDESPAR” and, together with the others, “Agreement Signatory Shareholders”) entered into a shareholders’ agreement by which they undertake to vote jointly on certain key matters (“ Shareholders’ Agreement ”). Such Shareholders’ Agreement entered into force on August 14 th , 2017 and will remain valid until November 09 th , 2020. On December 31 st , 2017, Litel, Bradespar, Mitsui and BNDESPAR jointly held 40.29% of the Company’s total capital stock. As long as they have such a shareholding and no other shareholder has a higher shareholding, the Agreement Signatory Shareholders may elect a majority of members of the Board of Directors and control the results of certain shares that require the approval by the shareholders. For a description of the Company’s shareholding structure and the current shareholders’ agreement, see item 15 of this Reference Form.

The Brazilian Federal Government has certain veto rights.

The Brazilian Federal Government holds 12 golden shares (special class preferred shares) in Vale, which gives it veto power over certain matters involving the Company, such as changes to the corporate name, to the location of its headquarters and to its corporate purpose, regarding mining activities. For a detailed description of the veto power of golden shares, see item 18.1 of this Reference Form.

(d)                                  Risks related to the Company’s subsidiaries

For information on the risks related to the Company’s investees, see the Risk Factor described in item (a) above: “The Company’s business may be adversely affected by the failure of its counterparties, joint venture partners or non-controlling joint ventures to comply with their obligations”.

(e)                         Risks related to the Company’s suppliers

For information on risks related to the Company’s suppliers, see the Risk Factors described in item (a) above: “ Higher energy costs or energy shortages can adversely affect the Company’s business ” and “The Company’s business may be adversely affected by the failure of its counterparties, joint venture partners or non-controlling joint ventures to comply with their obligations”.

(f)                          Risks related to the Company’s customers

For information on risks related to the Company’s customers, see the risk factor described in item (a) above: “The Company’s business may be adversely affected by the failure of its counterparties, joint venture partners or non-controlling joint ventures to comply with their obligations”.

(g)                        Risks related to the Economic Sectors in which the Company operates

The Company’s business is exposed to the cyclicality of global economic activity and requires significant investments of capital.

As a mining company, Vale is 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 and maintain production capacity, build infrastructure, preserve the environment and minimize social impacts. Sensitivity to industrial production, together with the need for significant long-term capital investments, are important sources of risk to Vale’s financial performance and growth prospects.

It also possible that the Company will not be able to adjust production volume in a timely or cost-effective manner in response to changes in demand. Lower utilization of capacity during periods of weak demand may expose the Company to higher unit production costs, since a significant portion of its cost structure is fixed in the short term due to the capital intensity of mining operations. In addition, efforts to reduce costs in periods of weak demand could be limited by labor regulations or previous collective-bargaining agreements or by previous agreements with the government. Conversely, during periods of high demand, Vale’s ability to rapidly increase production capacity is limited, which could prevent it from meeting demand for its products.

Moreover, there is a possibility that the Company will not be able to complete expansions and new greenfield projects in time to take advantage of rising demand for iron ore, nickel or other products. When demand exceeds its production capacity, the Company may meet excess customer demand by purchasing iron ore, iron ore pellets or nickel from joint ventures or from third parties and reselling them, which increase its costs and narrow its operating margins. If Vale is unable to meet excess customer demand in this way, it may lose customers. In addition, operating close to full capacity may expose the Company to higher costs, including demurrage fees due to capacity restraints in its logistics systems.

Adverse economic developments in China may have a negative impact on Vale’s revenue, cash flow and profitability.

China has been the main driver of global demand for minerals and metals over the last few years. In 2017, China’s demand accounted for 74% of global demand for seaborne iron ore, 55% of global demand for nickel and 48% of global demand for copper. The percentage of the Company’s net operating revenue attributable to sales to customers in China was 41.3% in 2017. Therefore, any 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, the largest consumer of carbon steel in China, would also negatively impact the Company’s results.

(h)                        Risks related to the Regulation of Sectors in which the Company operates

Political, economic and social conditions in countries where the Company operates or has projects may have an adverse impact on its business.

Vale may have its financial performance negatively affected by regulatory, political, economic and social conditions in the countries where it has significant operations or projects. In many of these jurisdictions, Vale is exposed to various risks, such as political instability, bribery, extortion, corruption, robbery, sabotage, kidnapping, civil war, acts of war, guerrilla activities, piracy on international transport routes, and terrorism.

Such problems may adversely affect the economic conditions and other conditions under which the Company operates in a manner that may have a material adverse effect on its business.

Disagreements with local communities in which the Company operates may adversely impact its business and reputation.

Disputes with communities located where the Company has operations may arise from time to time. In some instances, the Company’s operations and mineral reserves are located on indigenous lands or on nearby lands owned or used by indigenous people or other groups of stakeholders.

Some of the Company’s mining and other operations are located on territories whose ownership may be subject to disputes or uncertainties, or in areas intended for agriculture or land reform purposes, which may lead to disagreements with landowners, organized social movements, local communities and the government. In some jurisdictions, the Company may be required to consult and negotiate with these groups as part of the process to obtain licenses required to operate, in order to mitigate impact on the Company’s operations or to obtain access to lands.

Disagreements or legal disputes with local groups, including indigenous groups, organized social movements, and local communities can lead to delays in obtaining licenses, increases in planned budget, delays or disruptions in operations. These issues may have a negative effect on the Company’s reputation or even hinder its ability to exploit reserves and carry out its operations. Protesters have taken actions to disrupt the Company’s operations and projects, and they may continue to do so in the future, which may harm the Company’s operations and could adversely affect its business. For further information, see items 4.3 to 4.7 of this Reference Form.

The Company may be adversely affected by changes in public policies or by trends such as resource nationalization, including the imposition of new taxes or royalties on mining activities.

Mining is subject to government regulation, including taxes and royalties, which can have a significant financial impact on the Company’s operations. In countries where the Company is present, it is exposed to potential renegotiation, annulment or forced amendment to existing contracts and licenses, expropriation or nationalization of properties, exchange controls, changes to local laws, regulations and policies, and audits and revaluations. The Company is also exposed to new taxes or increase in existing royalties and tax rates, reduction of exemptions and tax benefits, renegotiation of tax stabilization agreements or changes to the tax base in a way that is unfavorable to the Company. Governments that have committed to provide a stable taxation or regulatory environment may alter those commitments or shorten their duration. The Company also faces the risk of having to submit to the jurisdiction of a foreign court or arbitration tribunal or having to enforce a judgment against a sovereign nation within their own territory. For more information, see item 7.5 of this Reference Form.

The Company is also required to meet domestic beneficiation requirements in certain countries, such as local processing standards, export duties or restrictions, or charges on unprocessed ores. The imposition of or increase in such requirements, taxes or charges can significantly increase the risk profile and the operating costs in those jurisdictions. The Company and the mining industry are subject to rising trends of resource nationalization in certain countries in which it operates that can result in constraints on its operations, increased taxation or even expropriations and nationalizations.

As a supplier of iron ore, nickel and other raw materials to the global integrated steel market, the Company is subject to additional risks arising from the imposition of customs duties, export and import control tariffs and other trade barriers, impacting the Company’s products and the products our customers produce. Global trade is subject to a growing trend of trade barriers, which may exacerbate commodity price volatility, and thus result in price instability in our products.

Concessions, authorizations, licenses and permits are subject to expiration, limitations on renewal and various other risks and uncertainties.

Vale’s operations depend on authorizations and concessions from governmental regulatory agencies in the countries in which it operates. The Company is subject to laws and regulations in many jurisdictions that can change at any time, and such changes in laws and regulations may

require modifications to Vale’s technologies and operations and result in unanticipated capital expenditures.

Some of Vale’s mining concessions are subject to fixed expiration dates and might only be renewed a limited number of times for a limited period of time. Apart from mining concessions, the Company may need to obtain various authorizations, licenses and permits from governmental bodies and regulatory agencies in connection with the planning, maintenance, operation and closure of the Company’s mines and related logistics infrastructure, which may be subject to fixed expiration dates or periodic review or renewal. There is no assurance that such renewals will be granted when and as requested, and there is no assurance that new conditions will not be imposed in connection with the renewal. Fees payable for mining concessions might increase substantially due to the passage of time from the original issuance of each individual exploration license. If it happens, the costs to keep or renew the mining concessions may render the Company’s business purposes unfeasible. Accordingly, the Company needs to continually assess the mineral potential of each mining concession, particularly at the time of renewal, to determine if the costs of maintaining the concessions are justified by the results of operations to date, and thus it might elect to let some of its concessions lapse. There is no certainty that concessions will be obtained in terms favorable to the Company, nor that concessions will be at all obtained for the Company’s planned future projects of mining or exploration.

In a number of jurisdictions where the Company has exploration projects, it may be required to return to the State a certain portion of the area covered by the exploration permit as a condition to renewing the permit or obtaining a mining concession. This obligation can lead to a substantial loss of part of the mineral deposit originally identified in the Company’s feasibility studies. For more information on mining concessions and other similar rights, see “Mining Rights and Regulation of Mining Activities” in item 7.5 of this Reference Form.

(i)                                     Risks related to the Company’s ADS (American Depositary Shares)

If ADR holders exchange the ADSs for underlying shares, they risk losing the ability to remit foreign currency abroad.

The custodian of shares underlying the Company’s ADSs maintains a registration with the Central Bank of Brazil, entitling it to qualify foreign institutional investors to buy and sell securities on B3 and to remit U.S. dollars abroad from Brazil for payments of dividends and other distributions relating to the referenced shares underlying the ADSs or upon the disposition of the underlying shares. If the ADR holder exchanges its ADSs for the underlying shares, it shall be entitled to rely on the custodian’s registration for only five business days from the date of exchange. Subsequently, an ADR holder may not be able to get and remit foreign currency abroad upon the disposition of, or distribution relating to, the underlying shares, unless it obtains its own registration in accordance with the applicable regulation. If the ADR holder attempts to obtain its own registration, it may incur expenses or suffer delays in the application process, which could delay the receipt of dividends and other distributions relating to the underlying shares or the return of capital in a timely manner.

The custodian’s registration or any registration obtained may be affected by future legislative changes, and additional restrictions applicable to ADRs, the disposition of the underlying shares or the repatriation of the proceeds from the disposition could be imposed in the future.

ADR holders may not have all the rights of Vale’s shareholders and may not be able to exercise preemptive rights related to the shares underlying their ADSs.

ADR holders may not have the same rights that are assigned to the Company’s shareholders under Brazilian law or under its by-laws, and the rights of ADR holders may be subject to certain limitations provided for in the deposit contract or by the securities intermediaries through which the ADR holders hold their securities. Moreover, the ability of ADR holders to exercise their preemptive rights is not assured, particularly if the applicable law in the holder’s jurisdiction (for example, the Securities Act in the United States) requires that either a registration statement be

effective or an exemption from registration be available with respect to those rights, as is in the case of the United States. The Company is not obligated to extend the offer of preemptive rights to ADR holders, to file a registration statement in the United States, or to make any other similar registration in any other jurisdiction, relating to preemptive rights, or to undertake steps that may be needed to make exemptions from registration available, and it cannot assure holders that it will file any registration statement or take such steps.

ADR Holders may face difficulties in the exercise of their voting rights.

ADR holders do not have the rights of shareholders. They have only the contractual rights set forth for their benefit under the deposit agreements. ADR holders are not permitted to attend shareholders’ meetings, and they may only vote by giving instructions to the depositary. In practice, the ability of a ADR holder to instruct the depositary as to voting will depend on the timing and procedures for giving instructions to the depositary, either directly or through the holder’s custody and clearing system. With respect to ADSs for which no instructions are received, the depositary may, being subject to certain limitations, grant a proxy to someone designated by the Company.

The legal protections for holders of the Company’s securities differ from one jurisdiction to another and may be inconsistent, unfamiliar or less effective than investors anticipate.

Vale is a global company with securities traded in several different markets and with investors located in many different countries. The legal regime for the protection of investors varies around the world, sometimes in important ways, and investors in our securities should recognize that the protections and remedies available to them may be different from those to which they are accustomed in their home markets. The Company is subject to securities legislation in several countries, which have different rules, supervision and enforcement practices. The only Business Corporation Law applicable to the Company is the Brazilian corporation law, with its specific substantive rules and legal procedures. The Company is also subject to corporate governance rules in several jurisdictions where its securities are listed, but, as a foreign private issuer, the Company is not required to follow many of the corporate governance rules that apply to U.S. domestic issuers with securities listed on the New York Stock Exchange, and it is not subject to the U.S. proxy rules.

(j)                                     Risks related to social and environmental issues

The obligations and potential liabilities arising from the collapse of the tailings dam owned by Samarco Mineração S.A. (“ Samarco ”) in Minas Gerais may adversely affect the Company’s business, financial condition and reputation.

In November 2015, the Fundão tailings dam owned by Samarco collapsed, causing environmental damage to the surrounding area. The collapse of Samarco’s tailings dam has adversely affected and will continue to affect the Company’s business, and the total impact is still uncertain and cannot be estimated. See below a report of the main effects of the dam’s collapse on the Company’s business.

·                   Litigation. The Company is involved in a number of legal proceedings and investigations related to the collapse of the Fundão tailings dam, and other proceedings and investigations may be instituted in the future. These legal proceedings include class actions brought by investors against the Company and some of its directors in the United States, a criminal proceeding in Brazil, public-interest civil actions filed by Brazilian authorities, and several lawsuits involving significant claims related to damages and reparation measures. Adverse outcomes in such proceedings may have a negative effect on the Company’s liquidity and financial condition. For more information on these proceedings, see items 4.3 to 4.7 of this Reference Form.

·                   Obligations of reparation and other commitments. In March 2016, Samarco and its

shareholders, Vale and BHP Billiton Brasil Ltda. (“ BHPB ”), a Brazilian subsidiary of BHP Billiton plc, entered into the Settlement and Consent Decree (“ TTAC ”) with several government officials, under which Samarco, Vale and BHPB agree to create a foundation (Renova Foundation) to develop and implement long-term recovery and compensation programs. In January 2017, Samarco, Vale and BHPB entered into two preliminary agreements with the Federal Prosecution Office (“ MPF ”), which provides, among other things, for the appointment of experts chosen by the MPF to examine and monitor the reparation programs created under the TTAC of March 2016, the provision of guarantees to secure certain reparation obligations, and a schedule for negotiating a final agreement. The preliminary agreements contemplate a potential review of the reparation programs provided for in the TTAC, based on the findings of the experts chosen by the MPF. For more information, see items 4.7 and 7.9 of this Reference Form.

As Samarco is currently unable to resume its activities, the Company and BHPB are financing the Renova Foundation and providing funds directly to Samarco in order to preserve its operations and support certain reclamation measures undertaken by Samarco. Should Samarco continue to be unable to resume its operations or generate enough cash flows to finance the required reparation measures under these agreements, the Company will be obliged to continue financing these reparation measures, which in turn may adversely affect its financial condition and operating results.

·                   Risk of further environmental damage. Failure to contain remaining tailings at Samarco’s dams may cause further environmental damage, additional impacts on Company’s operations, and additional claims, fines and lawsuits against Samarco and the Company. Failure to contain remaining tailings could also affect the feasibility and the schedule for the resumption of Samarco’s operations.

·                   Other impacts. The Company may face delays in obtaining environmental and other licenses for its tailings dams and other facilities, and Brazilian authorities may impose stricter conditions on the licensing process for its projects and operations. In addition, as one of Samarco’s shareholders, the Company’s reputation has been negatively affected by the collapse of Samarco’s tailings dam.

The Company’s business is subject to environmental, health and safety incidents.

The Company’s operations involve the use, handling, storage, discharge and disposal of hazardous substances into the environment and the use of natural resources. Therefore, the mining industry is generally subject to significant risks and hazards, including fire, explosion, toxic gas leaks, spillage of polluting substances or other hazardous materials, rock slides, dam-related accidents, failure of other operational structures and accidents involving vehicles, machinery and mobile equipment. This may occur by accident or by breach of operating and maintenance standards and may result in significant environmental and social impacts, damage to or destruction of mineral properties or production facilities, injury, illness or death of employees, service providers or members of the community surrounding the operations, environmental damage, delays in production, financial losses and possible civil liability. In addition to the above, in remote locations, employees may be exposed to tropical and contagious diseases capable of affecting their health and safety. Notwithstanding the Company’s standards, policies and controls, its operations remain subject to incidents or accidents that may have a negative effect on its business or reputation.

The Company’s business may be adversely affected by environmental and health and safety regulations, including regulations pertaining to climate change.

Nearly all aspects of its activities, products, services and projects around the world are subject to social, environmental and health and safety regulations, which may expose it to increased liability or increased costs. Such regulations require Vale to have environmental licenses, permits and

authorizations for its operations and projects, and to carry out environmental and social impact assessments in order to get approval for its projects and permission for initiating construction. Significant changes to existing operations are also subject to these requirements. Difficulties in obtaining or renewing licenses can lead to construction delays, cost increases, and may adversely impact its production volumes. Social, environmental and health and safety regulations also impose standards and controls on activities relating to mineral exploration, mining, pelletizing activities, railway and marine services, ports, decommissioning, refining, distribution and marketing of its products. Such regulation may give rise to significant costs and liabilities. Litigation regarding these and other related matters may adversely affect the Company’s financial condition or otherwise harm its reputation.

Social, environmental and health and safety regulations in the several countries where Vale operates have become stricter in recent years and it is possible that a higher degree of regulation or stricter enforcement of existing regulations may negatively affect Vale by imposing stricter restriction on its activities and products, creating new requirements for the issuance or renewal of environmental licenses, resulting in delays in operations or forcing it to get involved in costly efforts for recovery.

It is possible that, in some of its iron ore mining operations or projects, Vale may be required to limit or modify its mining plans or to incur additional costs to preserve caves or to compensate for the impact on them, with potential consequences for production volumes, costs or reserves in its iron ore business. For more details on Brazilian environmental regulations regarding caves, refer to item 7 of this Reference Form.

In response to the collapse of Samarco’s tailings dam in Minas Gerais, additional environmental and health and safety standards and regulations may be forthcoming in Brazil and authorities may impose more stringent conditions in connection with the licensing process of the Company’s projects and operations. Moreover, Vale may face stricter requirements and delays in receiving environmental licenses to operate other tailings dams.

National policies and international regulations on climate change can affect many of the Company’s business in several countries. Ratification of the Paris Climate Agreement in 2016 increased the international pressure to establish a global carbon price and on companies to adopt carbon pricing strategies. The pricing of greenhouse gas emissions can affect the Company’s operating costs, mainly through higher prices for fossil fuels, since mining is an energy intensive industry, as well as the Company’s international freight costs. The consumption of coal, one of the products that the Company sells, is especially facing pressure from international institutions due to its carbon intensity.

Regulatory initiatives at the national and international levels that affect its shipping practices could increase its costs or require Vale to make new capital expenditures.

Natural disasters may cause severe damage to Company’s operations and projects in the countries where it operates and may have a negative impact on its sales to countries adversely affected by such disasters.

Natural disasters, such as windstorms, droughts, floods, earthquakes and tsunamis, may have a negative effect on Vale’s operations and projects in the countries where it operates, and may cause a contraction in sales to countries affected by, among other factors, power outages and the destruction of industrial facilities and infrastructure. The physical impact of climate change on business remains uncertain, but Vale may experience changes in rainfall patterns, increased temperatures, water shortages, rising sea levels, increased storm frequency and intensity as a result of climate change, which may adversely affect its operations. On some specific occasions in recent years, the Company has determined that force majeure events have occurred due to effect of severe weather on its mining and logistics activities.

4.2 - Description of the main market risks

Political and economic instability in Brazil could adversely impact the Company’s business and the market price of its securities.

The Brazilian Federal Government’s economic policies may have important effects on Brazilian companies, including Vale, and on market conditions and prices of the securities of Brazilian companies. The Company’s financial condition and results of operations may be adversely affected by the following factors and the Federal Government’s response to these factors:

Historically, the country’s political situation has influenced the performance of the Brazilian economy, and political crises have affected the confidence of investors and the general public, which resulted in economic deceleration, reduction of credit ratings of the Brazilian government and Brazilian issuers, and heightened volatility in the securities issued abroad by Brazilian companies. In August 2016, the Brazilian Congress approved the impeachment of president Dilma Roussef. Additionally, the current investigations into corruption have resulted in claims against former and current government authorities, members of major political parties and managers and officers of several Brazilian companies. In addition, the next presidential and federal legislative election in Brazil will take place in October 2018. The Company cannot predict the outcome of these elections or whether they will bring about changes in the governmental or economic policies of Brazil or the mining industry. Political instability and the upcoming elections may aggravate economic uncertainties in Brazil and increase volatility in the securities of Brazilian issuers.

Over the last years, Brazil faced an economic recession, adverse fiscal developments and political instability. Brazilian GDP increased by 1% in 2017, but decreased 3.6% in 2016 and 3.85% in 2018. Unemployment rate was 12.7% in 2017, 11.5% in 2016 and 6.9% in 2015. The inflation, as reported by the National Consumer Price Index — IPCA, was 2.95% in 2017, 6.29% in 2016 and 10.67% in 2015. The Brazilian Central Bank’s base interest rate (SELIC) was 7.00% on December 31, 2017, 13.75% on December 31, 2016 and 14.25% on December 31, 2015. Future economic, social and political developments in Brazil may impair the Company’s business, financial condition or results of operations, or cause the market value of its securities to decline.

Significant Market Risks Applicable to the Company

Considering the nature of the Company’s business and operations, the main market risk factors that it is exposed to are:

·                                           price of products and inputs;

·                                           foreign exchange rates and interest rates.

Price risk of products and inputs

The Company is exposed to market risks related to volatility in the prices of its production inputs and products, as follows:

Global prices for the Company’s products are subject to volatility, which may affect the Company’s business.

Global prices for metals are subject to significant fluctuations and are affected by many factors, including actual and expected global macroeconomic and political conditions, regional and sectorial factors, levels of supply and demand, the availability and cost of substitutes, inventory levels, technological developments, regulatory issues and foreign trade issues, investments by commodity funds, and actions of participants in the commodity markets. Continued low market prices for products sold by the Company may result in the suspension of some of its projects and operations, the reduction of its mineral reserves and the loss of value of its assets, which may adversely affect the Company’s cash flows, financial situation and results of operations.

Demand for our iron ore, coal and nickel products depends on global demand for steel. Iron ore and iron ore pellets, which together accounted for 71.2% of the Company’s 2017 net operating revenues, are used to produce carbon steel. Nickel, which accounted for 13.7% of the Company’s 2017 net operating revenues, is used mainly to produce stainless and alloy steels. 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 the Company’s products. In addition, vertical backward integration of the steel and stainless steel industries and the use of scrap could reduce the global seaborne trade of iron ore and primary nickel. The demand for copper is affected by the demand for copper wire, and a continued decline in the construction industry demand could have a negative impact on the Company’s copper business.

The Company is more affected by changes in iron ore prices. For example, a price reduction of US$1 per dry metric ton unit (“dmt”) in the average iron ore price would have reduced the Company’s operating income for the year ended December 31, 2017 by approximately US$320 million. Average iron ore prices decreased 59% in the last two years, from US$135 per dmt in 2013 to US$97 per dmt in 2014, US$55.5 per dmt in 2015, US$58.5 per dmt in 2016 and US$71.3 per dmt in 2017, according to the average Platts IODEX (62% Fe CFR China). On February 28, 2018 the year to date average Platts IODEX iron ore price was US$76.60 per dmt.

For further information on the average prices obtained for the products sold by the Company, refer to item 10.2 of this Reference Form.

For information on the risks related to inputs, see the Risk Factors described in item 4.1(a) above: “Higher energy costs or energy shortages would adversely affect the Company’s business” .

Foreign Exchange Risks

The Company’s cash flow is subject to the volatility of several currencies, since the prices of its products are predominantly indexed to US Dollar, while a significant part of the costs, expenses and investments are indexed to other currencies, mainly Reais and Canadian Dollars, as highlighted in the risk below.

The Company also has debt instruments denominated in currencies other than US Dollar, mainly in Brazilian Reais and Euros. The Company uses swaps and forward transactions to convert to US dollars a portion of the cash outflows of these debt securities.

Changes in the exchange rates of the currencies in which the Company conducts its operations may adversely affect its financial condition and results of operations.

A substantial portion of the Company’s revenues, trade receivables and debt is denominated in U.S. Dollars, and considering that its functional currency is Brazilian Reais, changes in exchange rates may result in (i) losses or gains on its net U.S. dollar-denominated indebtedness and accounts receivable and (ii) market value losses or gains on exchange derivatives used to stabilize its cash flow in U.S. Dollars. In 2017, the Company had net foreign exchange losses of US$463 million, while it had net foreign exchange gains of US$3.252 million in 2016 and net foreign exchange losses of US$7.044 million in 2015. In addition, the fluctuating values of the Brazilian Reais, the Canadian Dollar, the Australian Dollar, the Euro, the Indonesian Rupiah and other currencies against the U.S. Dollar affects the Company’s results since most of its costs of goods sold are denominated in currencies other than the U.S. Dollar, principally the Real (52% in 2017) and the Canadian Dollar (12% in 2017), while its revenues are mostly U.S. dollar-denominated. Currency fluctuations should continue to affect the Company’s financial income, expenses and cash flow generation.

Significant volatility in currency prices may also result in disturbances in foreign exchange markets, which could limit the Company’s 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 Vale operates may institute restrictive exchange rate policies in the future and impose taxes on foreign exchange transactions.

Interest Rate Risk

The Company is also exposed to interest rates on loans and financings. Debts with fluctuating interest rates in US Dollars consist mainly of loans, including export prepayment operations and loans from commercial banks and multilateral organizations. In general, these debts are indexed to the LIBOR (London Interbank Offered Rate). Floating debts denominated in Reais are indexed mainly to the Interbank Deposit Certificate (CDI), Long Term Interest Rate (TJLP) and the National Consumer Price Index (IPCA), and part of these debts are converted to fixed interest rates in US Dollars through swap operations.

On December 31, 2017, 75.3% of our indebtedness was denominated in US Dollars (US$), corresponding to R$56,035,600,320.40, of which R$42,298,197,505.14 at fixed interest and R$13,737,402,815.26 linked to Libor. Other 18.4% of the debt was denominated in Reais (R$), corresponding to R$13,719,215,308.42, of which R$962,663,228.22 related to the DI Rate, R$7,026,409,294.21 linked to TJLP and R$ 6,692,806,014.21 at fixed interest and others. The remaining 6.2% of debt, corresponding to R$4,637,352,339.50 at fixed interest rates, was denominated predominantly in Euros (€).

4.3 - Relevant non-secret legal, administrative or arbitration proceedings

As at December 31, 2017 the Company was not party to any non-secret arbitration.

(i)          Labor

As at December 31, 2017 the Company and its controlled companies were parties to 20,926 legal proceedings of labor nature involving the total amount of R$18.0 billion for which there are R$1.7 billion of provisions by reason of the risks involved. The labor lawsuits brought against the Company relate to matters such as overtime, commuting hours, premium for unhealthy and hazardous work, equal pay and outsourcing, among others.

The tables below present an individual description of labor proceedings considered relevant to the Company’s and/or its subsidiaries’ businesses as of December 31, 2017: