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

 

October 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.)

 

(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- .)

 

 

 

 

 

 

Interim Financial Statements

September 30, 2021

 

BRGAAP in R$ (English)

 

 

 

 

 

 

Vale S.A. Interim Financial Statements

Contents

 

    Page  
Report on review of quartely information     3  
Consolidated and Parent Company Income Statement     5  
Consolidated and Parent Company Statement of Comprehensive Income     7  
Consolidated and Parent Company Statement of Cash Flows     8  
Consolidated and Parent Company Statement of Financial Position     10  
Consolidated Statement of Changes in Equity     11  
Consolidated and Parent Company Value Added Statement     12  
Notes to the Interim Financial Statements     13  
1.    Corporate information     13  
2.    Basis of preparation of the interim financial statements     13  
3.    Significant events in the current period     13  
4.    Information by business segment and by geographic area     14  
5.    Costs and expenses by nature     19  
6.    Financial results     20  
7.    Income taxes     20  
8.    Basic and diluted earnings per share     21  
9.    Accounts receivable     22  
10.   Inventories     22  
11.   Other financial assets and liabilities     23  
12.   Acquisitions and divestitures     24  
13.    Investments in subsidiaries, associates and joint ventures     27  
14.   Intangible     28  
15.   Property, plant and equipment     29  
16.   Financial and capital risk management     30  
17.   Financial assets and liabilities     37  
18.   Participative stockholders’ debentures     38  
19.   Loans, borrowings, leases, cash and cash equivalents and short-term investments     39  
20.   Brumadinho’s dam failure     41  
21.   Liabilities related to associates and joint ventures     45  
22.   Provisions     47  
23.   Litigations     48  
24.   Employee benefits     50  
25.   Stockholders’ equity     51  
26.   Related parties     52  
27.   Parent Company information (individual interim information)     54  

 

2

 

 

 

Report on review of quarterly information

 

To the Board of Directors and Stockholders

 

Vale S.A.

 

Introduction

 

We have reviewed the accompanying consolidated and parent company interim accounting information of Vale S.A. ("Company"), included in the Quarterly Information Form (ITR) for the quarter ended September 30, 2021, which comprises the parent company and consolidated statements of financial position as of September 30, 2021 and the respective parent company and consolidated income statements and the statements of comprehensive income for the three and nine-month periods then ended, the statement of changes in equity for the nine-month period then ended, the parent company statement of cash flows for the nine-month period then ended and the consolidated statements of cash flows for the three and nine-month periods then ended, and a summary of significant accounting policies and other explanatory information.

 

Management is responsible for the preparation of the consolidated and parent company interim accounting information in accordance with the accounting standard CPC 21, Interim Financial Reporting, of the Brazilian Accounting Pronouncements Committee (CPC) and International Accounting Standard (IAS) 34, Interim Financial Reporting issued by the International Accounting Standards Board (IASB), as well as the presentation of this information in accordance with the standards issued by the Brazilian Securities Commission (CVM), applicable to the preparation of the Quarterly Information (ITR). Our responsibility is to express a conclusion on this interim accounting information based on our review.

 

Scope of review

 

We conducted our review in accordance with Brazilian and International Standards on Reviews of Interim Financial Information (NBC TR 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity and ISRE 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Brazilian and International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

Conclusion on the interim information

 

Based on our review, nothing has come to our attention that causes us to believe that the accompanying consolidated and parent company interim accounting information included in the quarterly information referred to above has not been prepared, in all material respects, in accordance with CPC 21 and IAS 34 applicable to the preparation of the Quarterly Information, and presented in accordance with the standards issued by the CVM.

 

3

 

 

Other matters

 

Value added statements

 

The quarterly information referred to above includes the parent company and consolidated statements of value added for the nine-month period ended September 30, 2021. These statements are the responsibility of the Company's management and are presented as supplementary information under IAS 34. These statements have been subjected to review procedures performed together with the review of the interim accounting information for the purpose of concluding whether they are reconciled with the interim accounting information and accounting records, as applicable, and if their form and content are in accordance with the criteria defined in the accounting standard CPC 09 - "Statement of Value Added". Based on our review, nothing has come to our attention that causes us to believe that these statements of value added have not been properly prepared, in all material respects, in accordance with the criteria established in this accounting standard, and consistent with the parent company and consolidated interim accounting information taken as a whole.

 

Rio de Janeiro, October 28, 2021

 

PricewaterhouseCoopers Patricio Marques Roche
Auditores Independentes Ltda. Contador CRC 1RJ081115/O-4
CRC 2SP000160/O-5  

 

4

 

 

 

Income Statement
In millions of Brazilian reais, except earnings per share data

 

              Consolidated  
        Three-month period ended
September 30,
    Nine-month period ended
September 30,
 
    Notes   2021     2020     2021     2020  
Net operating revenue   4(c)     66,261       57,906       223,409       129,591  
Cost of goods sold and services rendered   5(a)     (30,533 )     (25,893 )     (86,505 )     (67,775 )
Gross profit         35,728       32,013       136,904       61,816  
                                     
Operating expenses                                    
Selling and administrative expenses   5(b)     (603 )     (684 )     (1,889 )     (1,864 )
Research and evaluation expenses         (708 )     (563 )     (2,003 )     (1,476 )
Pre-operating and operational stoppage   3 and 20     (858 )     (1,011 )     (2,648 )     (3,480 )
Brumadinho event   20     (847 )     (613 )     (2,437 )     (2,014 )
Other operating expenses, net   5(c)     (162 )     (612 )     (638 )     (2,161 )
          (3,178 )     (3,483 )     (9,615 )     (10,995 )
Impairment and disposals of non-current assets   12 and 15     (12,622 )     (1,608 )     (15,700 )     (4,004 )
Operating income         19,928       26,922       111,589       46,817  
                                     
Financial income   6     475       370       1,331       1,576  
Financial expenses   6     (678 )     (6,571 )     (9,178 )     (11,993 )
Other financial items, net   6     (1,736 )     (1,179 )     7,594       (10,040 )
Equity results and other results in associates and joint ventures   13 and 21     670       (211 )     (1,688 )     (3,763 )
Income before income taxes         18,659       19,331       109,648       22,597  
                                     
Income taxes   7(b)                                
Current tax         (12,867 )     (4,018 )     (27,409 )     (7,352 )
Deferred tax         14,782       (241 )     8,356       5,341  
          1,915       (4,259 )     (19,053 )     (2,011 )
                                     
Net income         20,574       15,072       90,595       20,586  
Net income (loss) attributable to non-controlling interests         371       (543 )     (267 )     (1,302 )
Net income attributable to Vale's stockholders         20,203       15,615       90,862       21,888  
                                     
Earnings per share attributable to Vale's stockholders:                                    
Basic and diluted earnings per share:                                    
Common share (R$)   8     3.98       3.04       17.94       4.27  

 

The accompanying notes are an integral part of these interim financial statements.

 

5

 

 

 

 

Income Statement
In millions of Brazilian reais, except earnings per share data

 

          Parent company  
    Three-month period ended
September 30,
    Nine-month period ended
September 30,
 
    2021     2020     2021     2020  
Net operating revenue     72,587       39,698       178,123       83,346  
Cost of goods sold and services rendered     (16,689 )     (11,939 )     (44,094 )     (30,498 )
Gross profit     55,898       27,759       134,029       52,848  
                                 
Operating income (expenses)                                
Selling and administrative expenses     (281 )     (344 )     (986 )     (944 )
Research and evaluation expenses     (407 )     (241 )     (974 )     (621 )
Pre-operating and operational stoppage     (470 )     (957 )     (1,797 )     (3,118 )
Equity results and others results from subsidiaries     (25,999 )     3,461       (2,800 )     3,456  
Brumadinho event     (847 )     (613 )     (2,437 )     (2,014 )
Other operating expenses, net     (424 )     (747 )     (1,385 )     (2,590 )
      (28,428 )     559       (10,379 )     (5,831 )
Impairment and disposals of non-current assets     (212 )     (76 )     (335 )     (214 )
Operating income     27,258       28,242       123,315       46,803  
                                 
Financial income     292       74       608       626  
Financial expenses     (624 )     (6,409 )     (8,809 )     (11,822 )
Other financial items, net     (1,836 )     (1,373 )     832       (8,187 )
Equity results and other results in associates and joint ventures     670       (211 )     (1,688 )     (3,763 )
Income before income taxes     25,760       20,323       114,258       23,657  
                                 
Income taxes                                
Current tax     (12,388 )     (3,298 )     (25,654 )     (5,713 )
Deferred tax     6,831       (1,410 )     2,258       3,944  
      (5,557 )     (4,708 )     (23,396 )     (1,769 )
                                 
Net income attributable to Vale's stockholders     20,203       15,615       90,862       21,888  
                                 
Earnings per share attributable to Vale's stockholders:                                
Basic and diluted earnings per share:                                
Common share (R$)     3.98       3.04       17.94       4.27  

 

The accompanying notes are an integral part of these interim financial statements.

 

6

 

 

 

 

 

Statement of Comprehensive Income

In millions of Brazilian reais

 

          Consolidated  
    Three-month period ended September 30,     Nine-month period ended September 30,  
    2021     2020     2021     2020  
Net income     20,574       15,072       90,595       20,586  
Other comprehensive income (loss):                                
Items that will not be reclassified to the income statement                                
Retirement benefit obligations (note 24)     498       422       2,270       (624 )
Fair value adjustment to investment in equity securities (note 11)     834       815       1,901       312  
      1,332       1,237       4,171       (312 )
                                 
Items that may be reclassified to the income statement                                
Translation adjustments     7,310       3,753       3,009       25,967  
Net investments hedge (note 16)     (662 )     (458 )     (441 )     (3,484 )
Net cash flow hedge (note 16)     50       (299 )     (56 )     (291 )
Reclassification of cumulative translation adjustment to net income (note 12)     (48 )     -       (8,490 )     -  
      6,650       2,996       (5,978 )     22,192  
Total comprehensive income     28,556       19,305       88,788       42,466  
Comprehensive income (loss) attributable to non-controlling interests     688       (726 )     (108 )     (2,976 )
Comprehensive income attributable to Vale's stockholders     27,868       20,031       88,896       45,442  
                                 

 

                Parent company  
    Three-month period ended September 30,     Nine-month period ended September 30,  
    2021     2020     2021     2020  
Net income     20,203       15,615       90,862       21,888  
Other comprehensive income (loss):                                
Items that will not be reclassified to the income statement                                
Retirement benefit obligations     (7 )     210       (17 )     191  
Fair value adjustment to investment in equity securities     685       680       1,559       344  
Equity results     654       347       2,629       (847 )
      1,332       1,237       4,171       (312 )
                                 
Items that may be reclassified to the income statement                                
Translation adjustments     6,993       3,936       2,850       27,641  
Net investments hedge     (662 )     (458 )     (441 )     (3,484 )
Net cash flow hedge     31       -       56       -  
Equity results     19       (299 )     (112 )     (291 )
Reclassification of cumulative translation adjustment to net income     (48 )     -       (8,490 )     -  
      6,333       3,179       (6,137 )     23,866  
Total comprehensive income     27,868       20,031       88,896       45,442  

 

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.

 

7

 

 

   
   

 

Statement of Cash Flows 

In millions of Brazilian reais

 

    Consolidated  
    Three-month period ended September 30,     Nine-month period ended September 30,  
    2021     2020     2021     2020  
Cash flow from operations (a)     53,261       29,916       149,534       50,141  
Interest on loans and borrowings paid (note 19)     (904 )     (1,117 )     (3,204 )     (3,126 )
Cash received (paid) on settlement of derivatives, net (note 16)     114       (672 )     (674 )     62  
Interest on participative stockholders' debentures paid (note 18)     -       -       (1,073 )     (506 )
Income taxes (including the settlement program)     (5,172 )     (2,509 )     (18,301 )     (6,189 )
Net cash provided by operating activities     47,299       25,618       126,282       40,382  
                                 
Cash flow from investing activities:                                
Capital expenditures (notes 14 and 15)     (6,526 )     (4,693 )     (18,099 )     (14,893 )
Additions to investments (note 13)     -       (1 )     (237 )     (366 )
Acquisition of NLC, net of cash (note 12)     -       -       (11,800 )     -  
Disbursement related to the disposal of VNC (note 12)     -       -       (3,134 )     -  
Dividends received from associates and joint ventures (note 13)     24       10       254       419  
Short-term investment     2,193       -       834       3,318  
Investment fund applications     -       (172 )     -       (672 )
Other investments activities, net     98       (557 )     (959 )     (1,562 )
Net cash used in investing activities     (4,211 )     (5,413 )     (33,141 )     (13,756 )
                                 
Cash flow from financing activities:                                
Loans and borrowings from third-parties (note 19)     -       9,585       1,633       34,004  
Payments of loans and borrowings from third-parties (note 19)     (573 )     (29,368 )     (8,506 )     (31,674 )
Lease payments (note 19)     (297 )     (244 )     (860 )     (726 )
Dividends and interest on capital paid to stockholders (note 25)     (40,200 )     (18,492 )     (73,112 )     (18,492 )
Dividends and interest on capital paid to non-controlling interest     (16 )     (15 )     (47 )     (56 )
Share buyback program (note 25)     (14,854 )     -       (25,261 )     -  
Net cash used in financing activities     (55,940 )     (38,534 )     (106,153 )     (16,944 )
                                 
Increase (decrease) in cash and cash equivalents     (12,852 )     (18,329 )     (13,012 )     9,682  
Cash and cash equivalents at the beginning of the period     68,275       66,333       70,086       29,627  
Effects of exchange rate changes on cash and cash equivalents     3,634       1,885       1,983       10,580  
Cash and cash equivalents at end of the period     59,057       49,889       59,057       49,889  
                                 
Non-cash transactions:                                
Additions to property, plant and equipment - capitalized loans and borrowing costs     75       67       235       274  
                                 
Cash flow from operating activities:                                
Income before income taxes     18,659       19,331       109,648       22,597  
Adjusted for:                                
Provisions related to Brumadinho event (note 20)     -       -       -       108  
Equity results and other results in associates and joint ventures (note 13)     (670 )     211       1,688       3,763  
Impairment and disposal of non-current assets     12,622       1,608       15,700       4,004  
Depreciation, depletion and amortization     3,657       4,162       12,146       12,174  
Financial results, net (note 6)     1,939       7,380       253       20,457  
Changes in assets and liabilities:                                
Accounts receivable     20,399       (1,513 )     22,351       (4,031 )
Inventories     (2,984 )     (1,626 )     (4,952 )     (3,157 )
Suppliers and contractors (i)     1,851       1,064       1,969       (1,260 )
Provision - Payroll, related charges and other remunerations     305       792       (886 )     538  
Payments related to Brumadinho event (note 20) (ii)     (973 )     (1,176 )     (3,410 )     (2,975 )
Other assets and liabilities, net     (1,544 )     (317 )     (4,973 )     (2,077 )
Cash flow from operations (a)     53,261       29,916       149,534       50,141  

 

(i) Includes variable lease payments. 

(ii) In addition, the Company has incurred in expenses in the amount of R$847 and R$2,437 for the three and nine-month periods ended September 30, 2021, respectively (R$613 and R$1,906 for the three and nine-month periods ended September 30, 2020).

 

The accompanying notes are an integral part of these interim financial statements.

 

8

 

 

   

 

Statement of Cash Flows 

In millions of Brazilian reais

 

    Parent company  
    Nine-month period ended September 30,  
    2021     2020  
Cash flow from operations (a)     144,605       34,181  
Interest on loans and borrowings paid     (3,993 )     (4,426 )
Cash paid on settlement of Derivatives, net     (896 )     (735 )
Interest on participative stockholders' debentures paid     (1,073 )     (506 )
Income taxes (including the settlement program)     (16,439 )     (5,379 )
Net cash provided by operating activities     122,204       23,135  
                 
Cash flow from investing activities:                
Capital expenditures     (10,644 )     (7,534 )
Additions to investments     (598 )     (1,563 )
Proceeds from disposal of assets and investments     59       174  
Dividends received from associates and joint ventures     254       422  
Short-term investment     542       3,234  
Investment fund applications     -       (672 )
Other investments activities, net (i)     (11,005 )     7,807  
Net cash used in investing activities     (21,392 )     1,868  
                 
Cash flow from financing activities:                
Loans and borrowings from third-parties     1,633       25  
Payments of loans and borrowings from third-parties     (7,913 )     (3,210 )
Lease payments     (204 )     (136 )
Dividends and interest on capital paid to stockholders     (73,112 )     (18,492 )
Share buyback program     (15,574 )     -  
Net cash used in financing activities     (95,170 )     (21,813 )
                 
Increase in cash and cash equivalents     5,642       3,190  
Cash and cash equivalents at the beginning of the period     14,609       9,597  
Effects of disposals of subsidiaries and merger, net of cash and cash equivalents     1,195       188  
Cash and cash equivalents at end of the period     21,446       12,975  
                 
Non-cash transactions:                
Additions to property, plant and equipment - capitalized loans and borrowing costs     235       274  
                 
Cash flow from operating activities:                
Income before income taxes     114,258       23,657  
Adjustments for:                
Provisions related to Brumadinho event     -       108  
Equity results and others results from subsidiaries     2,800       (3,456 )
Equity results and other results in associates and joint ventures     1,688       3,763  
Impairment and disposal of non-current assets     335       214  
Depreciation, depletion and amortization     6,266       5,984  
Financial results, net     7,369       19,383  
Changes in assets and liabilities:                
Accounts receivable     17,201       (14,555 )
Inventories     (401 )     (853 )
Suppliers and contractors (ii)     1,400       (116 )
Provision - Payroll, related charges and other remunerations     (148 )     539  
Payments related to Brumadinho event (note 20) (iii)     (3,410 )     (2,975 )
Other assets and liabilities, net     (2,753 )     2,488  
Cash flow from operations (a)     144,605       34,181  

 

(i) Includes loans and advances with related parties. 

(ii) Includes variable lease payments. 

(iii) In addition, the Company has incurred in expenses in the amount of R$847 and R$2,437 for the three and nine-month periods ended September 30, 2021, respectively (R$613 and R$1,906 for the three and nine-month periods ended September 30, 2020).

 

The accompanying notes are an integral part of these interim financial statements.

 

9

 

 

   

 

Statement of Financial Position 

In millions of Brazilian reais

 

          Consolidated     Parent company  
    Notes     September 30, 2021     December 31, 2020     September 30, 2021     December 31, 2020  
Assets                              
Current assets                                        
Cash and cash equivalents     19       59,057       70,086       21,446       14,609  
Short-term investments     19       2,834       4,006       892       1,811  
Accounts receivable     9       4,747       25,944       30,175       46,559  
Other financial assets     11       7,430       1,707       6,144       37  
Inventories     10       27,659       21,103       7,536       6,142  
Recoverable taxes             4,484       2,646       2,192       1,036  
Others             2,199       1,313       1,510       2,199  
              108,410       126,805       69,895       72,393  
                                         
Non-current assets held for sale     12       326       -       -       -  
              108,736       126,805       69,895       72,393  
Non-current assets                                        
Judicial deposits     23(c)       6,644       6,591       6,495       6,265  
Other financial assets     11       883       9,271       562       3,838  
Recoverable taxes             7,188       5,670       3,704       2,244  
Deferred income taxes     7(a)       62,020       53,711       44,618       42,760  
Others             3,710       3,380       938       725  
              80,445       78,623       56,317       55,832  
                                         
Investments     13       11,418       10,557       164,071       181,319  
Intangible     14       48,483       48,309       27,908       28,243  
Property, plant and equipment     15       223,492       213,836       118,273       111,338  
              363,838       351,325       366,569       376,732  
Total assets             472,574       478,130       436,464       449,125  
Liabilities                              
Current liabilities                                        
Suppliers and contractors             22,282       17,496       12,356       11,601  
Loans, borrowings and leases     19       7,318       5,901       3,446       3,804  
Other financial liabilities     11       8,472       9,906       7,185       4,747  
Taxes payable             14,112       4,950       13,295       3,509  
Settlement program ("REFIS")     7(c)       1,793       1,769       1,793       1,733  
Liabilities related to associates and joint ventures     21       8,437       4,554       8,437       4,554  
Provisions     22       6,400       9,711       4,423       4,819  
Liabilities related to Brumadinho     20       12,709       9,925       12,709       9,925  
De-characterization of dams     20       2,367       1,981       2,367       1,981  
Dividends payable             193       6,342       177       6,342  
Others             3,290       3,303       3,309       3,960  
              87,373       75,838       69,497       56,975  
Liabilities associated with non-current assets held for sale     12       69       -       -       -  
              87,442       75,838       69,497       56,975  
Non-current liabilities                                        
Loans, borrowings and leases     19       66,578       72,187       15,256       21,646  
Participative stockholders' debentures     18       22,452       17,737       22,452       17,737  
Other financial liabilities     11       15,366       23,719       95,545       107,470  
Settlement program ("REFIS")     7(c)       11,314       12,493       11,314       12,245  
Deferred income taxes     7(a)       10,486       9,198       -       -  
Provisions     22       39,566       43,829       14,117       13,016  
Liabilities related to Brumadinho     20       10,988       13,849       10,988       13,849  
De-characterization of dams     20       7,732       9,916       7,732       9,916  
Liabilities related to associates and joint ventures     21       3,885       6,228       3,885       6,228  
Streaming transactions             10,532       10,419       -       -  
Others             766       1,731       4,382       4,258  
              199,665       221,306       185,671       206,365  
Total liabilities             287,107       297,144       255,168       263,340  
                                         
Stockholders' equity     25                                  
Equity attributable to Vale's stockholders             181,296       185,785       181,296       185,785  
Equity attributable to non-controlling interests             4,171       (4,799 )     -       -  
Total stockholders' equity             185,467       180,986       181,296       185,785  
Total liabilities and stockholders' equity             472,574       478,130       436,464       449,125  

 

The accompanying notes are an integral part of these interim financial statements.

 

10

 

 

 

Statement of Changes in Equity  

In millions of Brazilian reais

    

    Share capital     Capital reserve     Profit reserves     Treasury shares     Other reserves     Cumulative
translation
adjustments
    Retained earnings     Equity
attributable to
Vale’s
stockholders
    Equity attributable
to non-controlling
interests
    Total
stockholders'
equity
 
Balance at December 31, 2020   77,300     3,634     36,598     (6,452 )   (7,307 )   82,012     -     185,785     (4,799 )   180,986  
Net income (loss)   -     -     -     -     -     -     90,862     90,862     (267 )   90,595  
Other comprehensive income   -     -     -     -     3,943     (5,909 )   -     (1,966 )   159     (1,807 )
Dividends and interest on capital of Vale's stockholders (note 25)   -     -     (22,935 )   -     -     -     (43,834 )   (66,769 )   -     (66,769 )
Dividends of non-controlling interest   -     -     -     -     -     -     -     -     (141 )   (141 )
Acquisition and disposal of non-controlling interest (note 12)   -     -     -     -     (1,666 )   -     -     (1,666 )   9,219     7,553  
Share buyback program (note 25)   -     -     -     (25,261 )   -     -     -     (25,261 )   -     (25,261 )
Share-based payment (note 24)   -     -     -     -     274     -     -     274     -     274  
Treasury shares utilized in the period (note 25)   -     -     -     37     -     -     -     37     -     37  
Treasury shares cancellation (note 25)   -     -     -     6,347     -     -     (6,347 )   -     -     -  
Balance at September 30, 2021   77,300     3,634     13,663     (25,329 )   (4,756 )   76,103     40,681     181,296     4,171     185,467  

 

    Share capital     Capital reserve     Profit reserves     Treasury shares     Other reserves     Cumulative
translation
adjustments
    Retained earnings     Equity
attributable to
Vale’s
stockholders
    Equity attributable
to non-controlling
interests
    Total
stockholders'
equity
 
Balance at December 31, 2019   77,300     3,634     28,577     (6,520 )   (5,673 )   64,162     -     161,480     (4,331 )   157,149  
Net income (loss)   -     -     -     -     -     -     21,888     21,888     (1,302 )   20,586  
Other comprehensive income   -     -     -     -     (1,470 )   25,024     -     23,554     (1,674 )   21,880  
Dividends and interest on capital of Vale's stockholders   -     -     (12,350 )   -     -     -     -     (12,350 )   -     (12,350 )
Dividends of non-controlling interest   -     -     -     -     -     -     -     -     (42 )   (42 )
Capitalization of non-controlling interest advances   -     -     -     -     -     -     -     -     71     71  
Treasury shares utilized in the period (note 25)   -     -     -     68     -     -     -     68     -     68  
Balance at September 30, 2020   77,300     3,634     16,227     (6,452 )   (7,143 )   89,186     21,888     194,640     (7,278 )   187,362  

 

The accompanying notes are an integral part of these interim financial statements.

 

11

 

 

   

 

Value Added Statement

In millions of Brazilian Reais

 

    Consolidated     Parent company  
             
    Nine-month period ended September 30,  
    2021     2020     2021     2020  
Generation of value added                        
Gross revenue                                
Revenue from products and services     226,085       130,618       180,645       84,263  
Revenue from the construction of own assets     6,439       4,194       2,472       1,617  
Other revenues     2,129       797       1,401       479  
Less:                                
Cost of products, goods and services sold     (28,997 )     (19,050 )     (16,457 )     (9,806 )
Material, energy, third-party services and other     (32,316 )     (27,572 )     (10,342 )     (8,203 )
Impairment of non-current assets and others results     (15,700 )     (4,004 )     (335 )     (214 )
Brumadinho event     (2,437 )     (2,014 )     (2,437 )     (2,014 )
Other costs and expenses     (12,395 )     (11,253 )     (6,422 )     (6,965 )
Gross value added     142,808       71,716       148,525       59,157  
Depreciation, amortization and depletion     (12,146 )     (12,174 )     (6,266 )     (5,984 )
Net value added     130,662       59,542       142,259       53,173  
                                 
Received from third parties                                
Equity results from entities     (1,688 )     (3,763 )     (4,488 )     (307 )
Financial income     3,709       9,159       3,568       7,622  
Total value added to be distributed     132,683       64,938       141,339       60,488  
                                 
Personnel and charges     7,154       6,303       3,987       2,998  
Taxes and contributions     29,768       8,257       33,548       7,478  
Interest (net derivatives and monetary and exchange rate variation)     3,725       29,318       10,803       26,795  
Other remunerations of third party funds     1,441       474       2,139       1,329  
Dividends and interest on capital     -       12,350       -       12,350  
Reinvested net income     90,862       9,538       90,862       9,538  
Loss attributable to noncontrolling interest     (267 )     (1,302 )     -       -  
Distributed value added     132,683       64,938       141,339       60,488  

 

The accompanying notes are an integral part of these interim financial statements.

 

12

 

 

Selected Notes to the Interim Financial Statements

Expressed in millions of Brazilian reais, 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, coking and thermal coal, manganese ore, platinum group metals, gold, silver and cobalt. The information by segment is presented in note 4.

 

Vale S.A. (the “Parent Company”) is a public company headquartered in the city of Rio de Janeiro, Brazil with securities traded on the stock exchanges of São Paulo – B3 S.A. (VALE3), New York - NYSE (VALE) and Madrid – LATIBEX (XVALO).

 

2.            Basis of preparation of the interim financial statements

 

a)            Statement of compliance

 

The consolidated and individual interim financial statements of the Company (“interim financial statements”) have been prepared and are being presented in accordance with IAS 34 Interim Financial Reporting (Technical pronouncement - CPC 21 (R1) Interim Financial Reporting) of the International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”), as implemented in Brazil by the Brazilian Accountant Pronouncements Committee ("CPC"), approved by the Brazilian Securities Exchange Commission ("CVM") and by the Brazilian Federal Accounting Council (“CFC”). All relevant information from its own interim financial statements, and only this information, are being presented and correspond to those used by the Company's Management.

 

The presentation of the parent company and consolidated statements of value added is required by the Brazilian corporate legislation and the accounting practices adopted in Brazil for listed companies, while it is not required by IFRS. Therefore, under the IFRS, the presentation of such statements is considered supplementary information, and not part of the set of financial statements.

 

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.

 

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$”).

 

The exchange rates used by the Company to translate its foreign operations are as follows:

 

          Average rate  
    Closing rate     Three-month period ended     Nine-month period ended  
    September 30,
2021
    December 31,
2020
    September 30,
2021
    September 30,
2020
    September 30,
2021
    September 30,
2020
 
United States dollar     5.4394       5.1967       5.2286       5.3772       5.3317       5.0793  
Canadian dollar ("CAD")     4.2931       4.0771       4.1517       4.0366       4.2624       3.7505  
Euro ("EUR")     6.2983       6.3779       6.1623       6.2876       6.3769       5.7207  

 

These interim financial statements were authorized for issue by the Executive Committee on October 28, 2021.

 

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 September 30, 2021:

 

· Since the announcement of the Company’s divestiture intention in the coal segment, it started looking for a potential buyer to purchase the coal assets. Due to the negotiations carried out during the current quarter, the Company decided to impair those assets in full, resulting in a loss of R$12,165 (US$2,304 million) recognized in the income statement as "Impairment and disposal of non-current assets” for the three-month period ended September 30, 2021 (note 12).

 

13

 

 

Selected Notes to the Interim Financial Statements

Expressed in millions of Brazilian reais, unless otherwise stated

 

 

· In September 2021, the Company approved and paid dividends of R$40,200 (US$7,391 million) to its shareholders (note 25).

 

· In August 2021, production and maintenance employees of Sudbury, Canada, represented by United Steelworkers (“USW”) approved the new five-year collective bargaining agreement, that was previously rejected in June 2021 and led to the stoppage of the operation at that location. The agreement became effective immediately after its approval and the strike came to an end Due to the stoppage, the Company recorded expenses of R$265 (US$51 million) recognized as "Pre-operating and operational stoppage" for the three-month period ended September 30, 2021 (R$561 (US$110 million) for the nine-month period ended September 30, 2021).

 

· In October 2021 (subsequent event), the Company approved the prepayment of the concession grant related to the Estrada de Ferro Carajás (“EFC”) and Estrada de Ferro Vitória Minas (“EFVM”) in the amount of R$1,871 (US$344 million) (note 11).

 

· In October 2021 (subsequent event), the Superior Court of Justice issued a decision to exclude the Risoleta Neves hydroelectric plant out of the Energy Reallocation Mechanism. Therefore, the Company would be requested by the National Electric Energy Agency (“ANEEL”) and the Chamber of Electric Energy Commercialization (“CCEE”) to pay approximately R$392 (US$72 million), for which the Company has a provision as at September 30, 2021 (note 22).

 

· In October 2021 (subsequent event), the Company approved a new share buyback program for its common shares, limited to a maximum of 200,000,000 common shares and their respective ADRs due to the upcoming conclusion of the current program in place as the cap number approved is close to being reached (note 25).

 

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 LAJIDA (EBITDA).

 

The Company allocates to “Others” the revenues and cost of other products, services, research and development, investments in joint ventures and associates of other business and unallocated corporate expenses. Additionally, the costs related to the Brumadinho event are not directly linked to the Company's operating activities and, therefore, are allocated to "Other" as well.

 

The 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.

 

a)            Adjusted LAJIDA (EBITDA)

 

The definition of Adjusted LAJIDA (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.

 

14

 

 

Selected Notes to the Interim Financial Statements

Expressed in millions of Brazilian reais, unless otherwise stated

 

 

    Consolidated  
    Three-month period ended September 30, 2021  
    Net operating
revenue
    Cost of goods
sold and
services
rendered
    Sales,
administrative
and other
operating
expenses
    Research and
evaluation
    Pre operating
and
operational
stoppage
    Dividends
received and
interest from
associates and
joint ventures
    Adjusted
LAJIDA
(EBITDA)
 
Ferrous minerals                                                        
Iron ore     44,560       (16,038 )     (162 )     (276 )     (317 )     -       27,767  
Iron ore pellets     10,492       (3,197 )     (10 )     (5 )     (57 )     -       7,223  
Ferroalloys and manganese     241       (171 )     4       (4 )     (20 )     -       50  
Other ferrous products and services     489       (400 )     (1 )     (1 )     -       -       87  
      55,782       (19,806 )     (169 )     (286 )     (394 )     -       35,127  
                                                         
Base metals                                                        
Nickel and other products     4,681       (4,092 )     311       (100 )     (268 )     -       532  
Copper     3,549       (1,267 )     (30 )     (125 )     (5 )     -       2,122  
      8,230       (5,359 )     281       (225 )     (273 )     -       2,654  
                                                         
Coal     1,843       (1,639 )     (27 )     (8 )     -       -       169  
                                                         
Others     406       (318 )     (736 )     (190 )     (6 )     24       (820 )
      66,261       (27,122 )     (651 )     (709 )     (673 )     24       37,130  
                                                         
Brumadinho event     -       -       (847 )     -       -       -       (847 )
COVID-19     -       -       (52 )     -       -       -       (52 )
Total     66,261       (27,122 )     (1,550 )     (709 )     (673 )     24       36,231  

 

    Consolidated  
    Three-month period ended September 30, 2020  
    Net operating
revenue
    Cost of goods
sold and
services
rendered
    Sales,
administrative
and other
operating
expenses
    Research and
evaluation
    Pre operating
and
operational
stoppage
    Dividends
received and
interest from
associates and
joint ventures
    Adjusted
LAJIDA
(EBITDA)
 
Ferrous minerals                                                        
Iron ore     39,614       (11,110 )     (270 )     (164 )     (649 )     2       27,423  
Iron ore pellets     6,416       (2,313 )     7       (8 )     (89 )     -       4,013  
Ferroalloys and manganese     274       (233 )     (21 )     (1 )     (49 )     -       (30 )
Other ferrous products and services     436       (324 )     2       (1 )     -       8       121  
      46,740       (13,980 )     (282 )     (174 )     (787 )     10       31,527  
                                                         
Base metals                                                        
Nickel and other products     6,543       (4,172 )     (119 )     (42 )     (1 )     -       2,209  
Copper     3,156       (1,017 )     (13 )     (81 )     (1 )     -       2,044  
      9,699       (5,189 )     (132 )     (123 )     (2 )     -       4,253  
                                                         
Coal     551       (1,726 )     (28 )     (47 )     -       110       (1,140 )
                                                         
Others (i)     916       (1,095 )     (728 )     (220 )     (12 )     -       (1,139 )
      57,906       (21,990 )     (1,170 )     (564 )     (801 )     120       33,501  
                                                         
Brumadinho event     -       -       (613 )     -       -       -       (613 )
COVID-19     -       -       (76 )     -       -       -       (76 )
Total     57,906       (21,990 )     (1,859 )     (564 )     (801 )     120       32,812  

 

(i) Includes the reclassification of the negative EBITDA of VNC in the amount of R$118.

 

15

 

 

Selected Notes to the Interim Financial Statements

Expressed in millions of Brazilian reais, unless otherwise stated

 

 

    Consolidated  
    Nine-month period ended September 30, 2021  
    Net operating
revenue
    Cost of goods
sold and
services
rendered
    Sales,
administrative
and other
operating
expenses
    Research and
evaluation
    Pre operating
and operational
stoppage
    Dividends
received and
interest from
associates and
joint ventures
    Adjusted
LAJIDA
(EBITDA)
 
Ferrous minerals                                                        
Iron ore     158,876       (42,275 )     (609 )     (686 )     (1,215 )     -       114,091  
Iron ore pellets     27,390       (8,044 )     159       (11 )     (194 )     114       19,414  
Ferroalloys and manganese     763       (498 )     (6 )     (5 )     (64 )     -       190  
Other ferrous products and services     1,541       (1,139 )     15       (6 )     -       -       411  
      188,570       (51,956 )     (441 )     (708 )     (1,473 )     114       134,106  
                                                         
Base metals                                                        
Nickel and other products     20,472       (13,379 )     115       (257 )     (570 )     -       6,381  
Copper     10,239       (3,390 )     (36 )     (332 )     (16 )     -       6,465  
      30,711       (16,769 )     79       (589 )     (586 )     -       12,846  
                                                         
Coal     3,207       (5,180 )     (18 )     (29 )     -       424       (1,596 )
                                                         
Others (i)     921       (1,195 )     (1,840 )     (675 )     (12 )     140       (2,661 )
      223,409       (75,100 )     (2,220 )     (2,001 )     (2,071 )     678       142,695  
                                                         
Brumadinho event     -       -       (2,437 )     -       -       -       (2,437 )
COVID-19     -       -       (145 )     -       -       -       (145 )
Total     223,409       (75,100 )     (4,802 )     (2,001 )     (2,071 )     678       140,113  

 

(i) Includes the negative EBITDA of VNC in the amount of R$358.

 

    Consolidated  
    Nine-month period ended September 30, 2020  
    Net operating
revenue
    Cost of goods
sold and
services
rendered
    Sales,
administrative
and other
operating
expenses
    Research and
evaluation
    Pre operating
and
operational
stoppage
    Dividends
received and
interest from
associates and
joint ventures
    Adjusted
LAJIDA
(EBITDA)
 
Ferrous minerals                                                        
Iron ore     85,058       (28,001 )     (677 )     (402 )     (2,054 )     2       53,926  
Iron ore pellets     15,098       (6,191 )     65       (17 )     (291 )     283       8,947  
Ferroalloys and manganese     851       (682 )     (21 )     (6 )     (105 )     -       37  
Other ferrous products and services     1,222       (939 )     10       (6 )     -       8       295  
      102,229       (35,813 )     (623 )     (431 )     (2,450 )     293       63,205  
                                                         
Base metals                                                        
Nickel and other products     15,608       (9,494 )     (292 )     (149 )     (156 )     -       5,517  
Copper     7,674       (2,940 )     (23 )     (237 )     (1 )     -       4,473  
      23,282       (12,434 )     (315 )     (386 )     (157 )     -       9,990  
                                                         
Coal     1,734       (5,369 )     (6 )     (119 )     -       434       (3,326 )
                                                         
Others (i)     2,346       (3,023 )     (2,333 )     (540 )     (38 )     126       (3,462 )
      129,591       (56,639 )     (3,277 )     (1,476 )     (2,645 )     853       66,407  
                                                         
Brumadinho event     -       -       (2,014 )     -       -       -       (2,014 )
COVID-19     -       -       (545 )     -       -       -       (545 )
Total     129,591       (56,639 )     (5,836 )     (1,476 )     (2,645 )     853       63,848  

 

(i) Includes the reclassification of the negative EBITDA of VNC in the amount of R$587.

 

Adjusted LAJIDA (EBITDA) is reconciled to net income as follows:

 

16

 

 

   
Selected Notes to the Interim Financial Statements

Expressed in millions of Brazilian reais, unless otherwise stated 

 

 

    Consolidated  
    Three-month period ended September 30,     Nine-month period ended September 30,  
    2021     2020     2021     2020  
Net income attributable to Vale's stockholders     20,203       15,615       90,862       21,888  
Net income (loss) attributable to non-controlling interests     371       (543 )     (267 )     (1,302 )
Net income     20,574       15,072       90,595       20,586  
Depreciation, depletion and amortization     3,657       4,162       12,146       12,174  
Income taxes     (1,915 )     4,259       19,053       2,011  
Financial results     1,939       7,380       253       20,457  
LAJIDA (EBITDA)     24,255       30,873       122,047       55,228  
                                 
Items to reconciled adjusted LAJIDA (EBITDA)                                
Equity results and other results in associates and joint ventures     (670 )     211       1,688       3,763  
Dividends received and interest from associates and joint ventures (i)     24       120       678       853  
Impairment and disposal of non-current assets     12,622       1,608       15,700       4,004  
Adjusted LAJIDA (EBITDA)     36,231       32,812       140,113       63,848  

 

(i) Includes the remuneration of the financial instrument of the Coal segment.

 

b)            Assets by segment

 

    Consolidated  
    September 30, 2021     December 31, 2020  
    Product inventory     Investments in associates and joint ventures     Property, plant and equipment and intangibles (i)     Product inventory     Investments in associates and joint ventures     Property, plant and equipment and intangibles (i)  
Ferrous minerals     15,294       6,556       156,030       10,483       5,995       152,970  
Base metals     7,006       91       107,134       6,398       91       101,593  
Coal (note 12)     460       -       -       129       -       -  
Others     -       4,771       8,811       -       4,471       7,582  
Total     22,760       11,418       271,975       17,010       10,557       262,145  

 

    Consolidated  
    Three-month period ended September 30,  
    2021     2020  
    Capital expenditures (ii)           Capital expenditures (ii)        
    Sustaining capital     Project execution     Depreciation, depletion and amortization     Sustaining capital     Project execution     Depreciation, depletion and amortization  
Ferrous minerals     3,073       714       2,150       2,160       198       2,160  
Base metals     1,696       591       1,185       1,658       378       1,884  
Coal (note 12)     257       -       264       146       -       -  
Others (iii)     6       189       58       150       3       118  
Total     5,032       1,494       3,657       4,114       579       4,162  

 

    Consolidated  
    Nine-month period ended September 30,  
    2021     2020  
    Capital expenditures (ii)           Capital expenditures (ii)        
    Sustaining capital     Project execution     Depreciation, depletion and amortization     Sustaining capital     Project execution     Depreciation, depletion and amortization  
Ferrous minerals     8,807       1,750       6,734       7,136       919       6,620  
Base metals     5,188       1,329       4,857       4,596       951       5,099  
Coal (note 12)     607       -       350       659       -       83  
Others (iii)     70       348       205       607       25       372  
Total     14,672       3,427       12,146       12,998       1,895       12,174  

 

(i) Goodwill is allocated to ferrous minerals and base metals segments in the amount of R$7,133 and R$10,533 in September 30, 2021 and R$7,133 and R$10,008 in December 31, 2020, respectively.

(ii) Cash outflows.

(iii) Includes the reclassification of VNC under the captions “Sustaining capital” and “depreciation, depletion and amortization”, in the amount of R$144 and R$48, respectively, for the three-month period ended on September 30, 2020 and in the amount of R$591 and R$171, respectively, for the nine-month period ended on September 30, 2020.

 

17

 

 

   
Selected Notes to the Interim Financial Statements

Expressed in millions of Brazilian reais, unless otherwise stated 

 

 

c)            Net operating revenue by geographic area

 

    Consolidated  
    Three-month period ended September 30, 2021  
    Ferrous minerals     Base metals     Coal     Others     Total  
Americas, except USA and Brazil     1,192       415       -       -       1,607  
United States of America     370       1,432       -       -       1,802  
Germany     916       908       -       -       1,824  
Europe, except Germany     2,862       2,253       115       -       5,230  
Middle East, Africa and Oceania     2,885       21       191       -       3,097  
Japan     6,752       749       77       -       7,578  
China     27,994       1,257       376       -       29,627  
Asia, except Japan and China     4,990       1,156       1,096       -       7,242  
Brazil     7,821       39       (12 )     406       8,254  
Net operating revenue     55,782       8,230       1,843       406       66,261  

  

    Consolidated  
    Three-month period ended September 30, 2020  
    Ferrous minerals     Base metals     Coal     Others (i)     Total  
Americas, except USA and Brazil     607       194       -       529       1,330  
United States of America     546       950       -       -       1,496  
Germany     231       1,617       -       -       1,848  
Europe, except Germany     1,466       3,621       65       -       5,152  
Middle East, Africa and Oceania     2,152       17       65       -       2,234  
Japan     2,499       504       -       -       3,003  
China     33,037       1,506       -       -       34,543  
Asia, except Japan and China     2,926       1,134       382       -       4,442  
Brazil     3,276       156       39       387       3,858  
Net operating revenue     46,740       9,699       551       916       57,906  

  

(i) Includes the reclassification of VNC in the amount of R$529.

  

    Consolidated  
    Nine-month period ended September 30, 2021  
    Ferrous minerals     Base metals     Coal     Others (i)     Total  
Americas, except USA and Brazil     3,698       1,629       -       21       5,348  
United States of America     1,762       4,515       -       -       6,277  
Germany     2,669       5,926       -       -       8,595  
Europe, except Germany     11,314       9,218       245       -       20,777  
Middle East, Africa and Oceania     7,926       62       398       -       8,386  
Japan     14,655       1,904       180       -       16,739  
China     110,663       3,526