Washington, D.C. 20549
Vale S.A.
(Indicate by check mark whether the registrant files
or will file annual reports under cover of Form 20-F or Form 40-F.)
(Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(1))
(Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(7))
(Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange
Act of 1934.)
(If “Yes” is marked, indicate below the file number assigned
to the registrant in connection with Rule 12g3-2(b). 82- .)
Vale S.A.
We have reviewed the accompanying parent company and consolidated interim
accounting information of Vale S.A. ("Company"), included in the Quarterly Information Form (ITR) for the quarter ended September
30, 2022, which comprises the balance sheet as of September 30, 2022 and the respective 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 explanatory notes.
Management is responsible for the preparation of the parent company
and consolidated 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.
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.
The quarterly information referred to above includes the parent company
and consolidated statements of value added for the nine-month period ended September 30, 2022. 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.
As described in note 14, the coal segment is presented in these
interim financial statements as discontinued operation. Therefore, comparative financial information for the nine-month period ended September
30, 2021 has been restated to reflect the sale of the coal operation.
The accompanying notes are an integral part of these
interim financial statements.
The accompanying notes are an integral part of these
interim financial statements.
(i) Fair value adjustment to shares received as part
of the consideration for the sale of Vale’s fertilizer business to The Mosaic Company. In November 2021, the Company sold all shares
for R$6,919 (US$1,259 million) in a block trade.
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.
(i) Includes variable lease payments.
The accompanying notes are an integral part of these
interim financial statements.
(ii) Includes variable lease payments.
The accompanying notes are an integral part of these
interim financial statements.
The accompanying notes are an integral part of these
interim financial statements.
The accompanying notes are an integral part of these
interim financial statements.
The accompanying notes are an integral part of these
interim financial statements.
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
1.
Corporate information
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).
Vale S.A. and its subsidiaries (“Vale”
or the “Company”) are global producers of: (i) iron ore and iron ore pellets, which are key raw materials for steelmaking,
(ii) nickel, that is used to produce stainless steel, electric vehicles and metal alloys employed in the production process of several
products, (iii) copper, used in the construction sector to produce pipes and electrical wires, and (iv) platinum, gold, silver, and cobalt
as by-products of nickel and copper. Most of the Company’s products are sold to international markets by Vale International S.A.
(“VISA”), a trading company located in Switzerland.
Vale also operates a railroad and port logistics
system in Brazil to outflow its production and Vale has equity investments and assets with the objective of reducing energy costs, minimizing
the risk of shortages and meeting its energy consumption needs through renewable sources.
In the second quarter of 2022, the Company concluded
the sale of the thermal and metallurgical coal operations, as presented in note 14. Therefore, the results from coal operation until closing
are presented in these interim financial statements as “discontinued operations”.
2. Basis
of preparation of interim financial statements
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 (CPC 21) of the International Financial Reporting Standards (“IFRS”) as issued by the International
Accounting Standards Board (“IASB”), as implemented in Brazil by the Brazilian Accounting Pronouncements Committee ("CPC"),
approved by the Brazilian Securities Exchange Commission ("CVM") and by the Brazilian Federal Accounting Council (“CFC”).
All relevant information for the interim financial statements, and only this information, are presented and consistent to those used by
the Company's Management.
The interim financial statements have been
prepared to update users on the relevant events and transactions that occurred in the period and must be analyzed together with the financial
statements for the year ended December 31, 2021. Accounting policies, accounting estimates and judgments, management of risk and measurement
methods are the same as those adopted in the preparation of the latest annual financial statements. The selected notes of the Parent
Company are presented in a summarized form in note 29.
These interim financial statements were authorized
for issue by the Company’s Board of Directors in a meeting held on October 27, 2022.
a) Statement of Value Added
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. The Statement of Value Added was prepared in accordance with
the criteria defined in Technical Pronouncement CPC 09 - "Statement of Value Added".
b) Functional currency and
presentation currency
The interim financial statements of the Company
and its associates and joint ventures are measured using the currency of the primary economic environment in which the entity operates
(“functional currency”), in the case of the Parent Company and its associates and joint ventures in Brazil, is the Brazilian
real (“R$”). The functional currency of direct subsidiaries operating in an international economic environment is the US
dollar (“US$”).
The main exchange rates used by the Company
to translate its foreign operations are as follows:
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
|
|
|
|
|
|
Average rate |
|
|
Closing rate |
|
Three-month period ended September 30, |
|
Nine-month period ended September 30, |
|
|
September 30, 2022 |
|
December 31, 2021 |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
US Dollar ("US$") |
|
5.4066 |
|
5.5805 |
|
5.2462 |
|
5.2286 |
|
5.1360 |
|
5.3317 |
Canadian dollar ("CAD") |
|
3.9318 |
|
4.3882 |
|
4.0189 |
|
4.1517 |
|
4.0024 |
|
4.2624 |
Euro ("EUR") |
|
5.2904 |
|
6.3210 |
|
5.2838 |
|
6.1623 |
|
5.4629 |
|
6.3769 |
c) Russia-Ukraine conflict
The Company’s business is subject to
external risk factors related to our global operations and the global profile of our client portfolio and supply chains. Global markets
are experiencing volatility and disruption following the escalation of geopolitical tensions in connection with the military conflict
between Russia and Ukraine.
The resulting economic sanctions imposed
by the United States, Canada, the European Union, the UK and other countries as a direct consequence of this conflict may continue to
significantly impact supply chains, lead to market disruptions including significant volatility in commodities’ prices and bring
heightened near-term uncertainty to the global financial system, including through instability of credit and of capital markets.
At this time, the effects of the Russia-Ukraine
conflict have not caused significant impacts on the Company’s operations nor on the fair value of its assets and liabilities. However,
escalation of the Russia-Ukraine conflict may adversely affect the Company’s business, such as disruption of international trade
flows, extreme market pricing volatility, with particular impact on the energy sector, industrial and agricultural supply chains, shipping,
and regulatory and contractual uncertainty, and increased geopolitical tensions around the world.
3. Significant
events of the current period
Balance Sheet,
Cash Flows and Income Statement were particularly affected by the following events and transactions during the three-month period ended
September 30, 2022:
Capital
reduction in a foreign subsidiary (notes 6 and 13). In August 2022, the Company
approved the capital reduction of VISA in the amount of R$7,885 (US$1,500 million), which has generated a gain of R$7,938 (US$1,543 million),
recorded under “Other financial items, net”, due to the reclassification of the cumulative translation adjustments from stockholders’
equity to the income statement.
Sale
of Midwestern System assets (note 14). In July 2022, the Company concluded
the sale of the Midwestern System to J&F Mineração Ltda. (“J&F”) and received R$815 (US$153 million),
in addition to transferring to J&F the obligations related to the take-or-pay logistics contracts. These assets were classified as
held for sale and a gain of R$5,620 (US$1,121 million) was recorded in the nine-month period ended September 30, 2022, due to the reversal
of the impairment of property, plant and equipment and the remeasurement of the onerous contract liability. In addition, the Company recognized
a gain of R$188 (US$37 million) due to the reclassification of the cumulative translation adjustments from stockholders’ equity
to the income statement.
Sale
of Companhia Siderúrgica do Pecém (“CSP”) (note 14). In
July 2022, the Company and the other shareholders of CSP signed a binding agreement with ArcelorMittal for the sale of CSP for approximately
R$11,527 (US$2,132 million), which will be received at the closing of the transaction and it will be fully used for the early settlement
of CSP's net debt in the amount of approximately R$12,435 (US$2,300 million). The Company does not expect any material impact at closing,
which is expected to occur in the first quarter 2023, subject to customary regulatory approvals.
Share
buyback (note 27d). During the three-month period ended September 30, 2022,
the Company repurchased 48,670,681 common shares and their respective ADRs, corresponding to R$3,636 (US$686 million), of which R$1,898
(US$358 million) were acquired through wholly owned subsidiaries and R$1,738 (US$328 million) by the Parent Company.
Cancellation
of common shares held in treasury (note 27b). In July 2022, the Company approved
the cancellation of 220,150,800 common shares held in treasury. The effect of R$19,466 (US$3,786 million) was recorded in shareholders'
equity as “Treasury shares used and cancelled”.
Stockholder’s
remuneration (note 27c). In July 2022, the Company approved the remuneration
to its shareholders in the amount of R$16,243 (US$3,000 million), which was fully paid in September 2022.
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
4. Information
by business segment and geographic area
The Company operates the following reportable segments:
Ferrous Minerals, Base Metals and Coal (presented as discontinued operations). The segments are aligned with products and reflect the
structure used by Management to evaluate the Company’s performance. The responsible bodies for making operational decisions, allocating
resources and evaluating performance are the Executive Boards and Board of Directors. Accordingly, the performance of the operating segments
is assessed based on a measure of adjusted LAJIDA (EBITDA), among other measures.
The Company allocates to “Other” the
revenues and cost of other products, services, research and development, investments in joint ventures and associates of other business
and unallocated corporate expenses. Costs related to the Brumadinho event are allocated to "Other" as well.
In 2022, the Company has allocated the financial
information of the Midwestern System to “Other” as this operation is no longer analyzed by the chief operating decision maker
as part of to the performance of the Ferrous Minerals business segment due to the binding agreement to sell this operation. The comparative
information was reclassified to reflect the revision 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 reversal (impairment and disposals) of non-current assets,
net.
|
|
Consolidated |
|
|
Three-month period ended September 30, 2022 |
|
|
Net operating revenue |
|
Cost of goods sold and services rendered |
|
Sales, administrative and other operating expenses |
|
Research and development |
|
Pre operating and operational stoppage |
|
Dividends received and interest from associates and joint ventures |
|
Adjusted EBITDA |
Ferrous minerals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Iron ore |
|
31,708 |
|
(16,195) |
|
(233) |
|
(251) |
|
(330) |
|
5 |
|
14,704 |
Iron ore pellets |
|
8,700 |
|
(3,748) |
|
(37) |
|
(4) |
|
(25) |
|
23 |
|
4,909 |
Other ferrous products and services |
|
622 |
|
(430) |
|
22 |
|
(5) |
|
(23) |
|
- |
|
186 |
|
|
41,030 |
|
(20,373) |
|
(248) |
|
(260) |
|
(378) |
|
28 |
|
19,799 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base metals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nickel and other products |
|
8,221 |
|
(6,966) |
|
12 |
|
(162) |
|
(1) |
|
- |
|
1,104 |
Copper |
|
2,518 |
|
(1,441) |
|
(38) |
|
(195) |
|
(18) |
|
- |
|
826 |
|
|
10,739 |
|
(8,407) |
|
(26) |
|
(357) |
|
(19) |
|
- |
|
1,930 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brumadinho event and de-characterization of dams |
|
- |
|
- |
|
(1,759) |
|
- |
|
- |
|
- |
|
(1,759) |
Other |
|
311 |
|
(317) |
|
(527) |
|
(271) |
|
(2) |
|
121 |
|
(685) |
Total |
|
52,080 |
|
(29,097) |
|
(2,560) |
|
(888) |
|
(399) |
|
149 |
|
19,285 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 development |
|
Pre operating and operational stoppage |
|
Dividends received and interest from associates and joint ventures |
|
Adjusted EBITDA |
Ferrous minerals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Iron ore |
|
43,977 |
|
(15,661) |
|
(161) |
|
(276) |
|
(315) |
|
- |
|
27,564 |
Iron ore pellets |
|
10,492 |
|
(3,197) |
|
(10) |
|
(5) |
|
(57) |
|
- |
|
7,223 |
Other ferrous products and services |
|
730 |
|
(571) |
|
3 |
|
(5) |
|
(20) |
|
- |
|
137 |
|
|
55,199 |
|
(19,429) |
|
(168) |
|
(286) |
|
(392) |
|
- |
|
34,924 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brumadinho event and de-characterization of dams |
|
- |
|
- |
|
(847) |
|
- |
|
- |
|
- |
|
(847) |
COVID-19 |
|
- |
|
- |
|
(52) |
|
- |
|
- |
|
- |
|
(52) |
Other (i) |
|
989 |
|
(695) |
|
(737) |
|
(190) |
|
(8) |
|
24 |
|
(617) |
Total of continuing operations |
|
64,418 |
|
(25,483) |
|
(1,523) |
|
(701) |
|
(673) |
|
24 |
|
36,062 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations – Coal |
|
1,843 |
|
(1,639) |
|
(27) |
|
(8) |
|
- |
|
- |
|
169 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
66,261 |
|
(27,122) |
|
(1,550) |
|
(709) |
|
(673) |
|
24 |
|
36,231 |
(i) Includes the reclassification of the EBITDA of
Midwestern System in the amount of R$203 (US$40 million).
|
|
Consolidated |
|
|
Nine-month period ended September 30, 2022 |
|
|
Net operating revenue |
|
Cost of goods sold and services rendered |
|
Sales, administrative and other operating expenses |
|
Research and development |
|
Pre operating and operational stoppage |
|
Dividends received and interest from associates and joint ventures |
|
Adjusted EBITDA |
Ferrous minerals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Iron ore |
|
104,906 |
|
(41,975) |
|
(759) |
|
(648) |
|
(1,280) |
|
5 |
|
60,249 |
Iron ore pellets |
|
24,601 |
|
(9,977) |
|
1 |
|
(11) |
|
(82) |
|
374 |
|
14,906 |
Other ferrous products and services |
|
1,869 |
|
(1,290) |
|
13 |
|
(14) |
|
(66) |
|
- |
|
512 |
|
|
131,376 |
|
(53,242) |
|
(745) |
|
(673) |
|
(1,428) |
|
379 |
|
75,667 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base metals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nickel and other products |
|
23,452 |
|
(16,313) |
|
(91) |
|
(372) |
|
(2) |
|
- |
|
6,674 |
Copper |
|
6,621 |
|
(3,953) |
|
(14) |
|
(481) |
|
(37) |
|
- |
|
2,136 |
|
|
30,073 |
|
(20,266) |
|
(105) |
|
(853) |
|
(39) |
|
- |
|
8,810 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brumadinho event and de-characterization of dams |
|
- |
|
- |
|
(3,988) |
|
- |
|
- |
|
- |
|
(3,988) |
Other (i) |
|
2,324 |
|
(1,934) |
|
(2,505) |
|
(737) |
|
(11) |
|
123 |
|
(2,740) |
Total of continuing operations |
|
163,773 |
|
(75,442) |
|
(7,343) |
|
(2,263) |
|
(1,478) |
|
502 |
|
77,749 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations – Coal |
|
2,308 |
|
(1,370) |
|
(57) |
|
(7) |
|
- |
|
- |
|
874 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
166,081 |
|
(76,812) |
|
(7,400) |
|
(2,270) |
|
(1,478) |
|
502 |
|
78,623 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(i) Includes the reclassification of the EBITDA of
Midwestern System in the amount of R$381 (US$77 million).
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 development |
|
Pre operating and operational stoppage |
|
Dividends received and interest from associates and joint ventures |
|
Adjusted EBITDA |
Ferrous minerals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Iron ore |
|
157,145 |
|
(41,191) |
|
(609) |
|
(686) |
|
(1,210) |
|
- |
|
113,449 |
Iron ore pellets |
|
27,390 |
|
(8,044) |
|
159 |
|
(11) |
|
(194) |
|
114 |
|
19,414 |
Other ferrous products and services |
|
2,304 |
|
(1,637) |
|
9 |
|
(11) |
|
(64) |
|
- |
|
601 |
|
|
186,839 |
|
(50,872) |
|
(441) |
|
(708) |
|
(1,468) |
|
114 |
|
133,464 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brumadinho event and de-characterization of dams |
|
- |
|
- |
|
(2,437) |
|
- |
|
- |
|
- |
|
(2,437) |
COVID-19 |
|
- |
|
- |
|
(145) |
|
- |
|
- |
|
- |
|
(145) |
Other (i) |
|
2,652 |
|
(2,279) |
|
(1,840) |
|
(675) |
|
(17) |
|
140 |
|
(2,019) |
Total of continuing operations |
|
220,202 |
|
(69,920) |
|
(4,784) |
|
(1,972) |
|
(2,071) |
|
254 |
|
141,709 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations – Coal |
|
3,207 |
|
(5,180) |
|
(18) |
|
(29) |
|
- |
|
424 |
|
(1,596) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
223,409 |
|
(75,100) |
|
(4,802) |
|
(2,001) |
|
(2,071) |
|
678 |
|
140,113 |
(i) Includes the reclassification of the EBITDA of
Midwestern System in the amount of R$642 (US$120 million).
Adjusted LAJIDA (EBITDA) is reconciled to net income
as follows:
Continuing operations
|
|
Consolidated |
|
|
Three-month period ended September 30, |
|
Nine-month period ended September 30, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Net income from continuing operations attributable to Vale's stockholders |
|
23,286 |
|
28,587 |
|
66,547 |
|
103,299 |
Net income (loss) attributable to noncontrolling interests |
|
(58) |
|
155 |
|
311 |
|
289 |
Net income |
|
23,228 |
|
28,742 |
|
66,858 |
|
103,588 |
Depreciation, depletion and amortization |
|
4,069 |
|
3,393 |
|
11,652 |
|
11,796 |
Income taxes |
|
4,181 |
|
2,421 |
|
19,566 |
|
23,389 |
Financial results |
|
(12,167) |
|
1,816 |
|
(14,818) |
|
(58) |
EBITDA from continuing operations |
|
19,311 |
|
36,372 |
|
83,258 |
|
138,715 |
|
|
|
|
|
|
|
|
|
Items to reconciled adjusted LAJIDA (EBITDA) |
|
|
|
|
|
|
|
|
Equity results and other results in associates and joint ventures |
|
(401) |
|
(670) |
|
(1,238) |
|
1,544 |
Dividends received from associates and joint ventures |
|
149 |
|
24 |
|
502 |
|
254 |
Impairment and disposals (impairment reversal) of non-current assets, net |
|
226 |
|
336 |
|
(4,773) |
|
1,196 |
Adjusted EBITDA from continuing operations |
|
19,285 |
|
36,062 |
|
77,749 |
|
141,709 |
Discontinued operations (Coal)
|
|
Consolidated |
|
|
Three-month period ended September 30, |
|
Nine-month period ended September 30, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Net income (loss) from discontinued operations attributable to Vale's stockholders |
|
- |
|
(8,384) |
|
9,818 |
|
(12,437) |
Net income (loss) attributable to noncontrolling interests |
|
- |
|
216 |
|
- |
|
(556) |
Net income (loss) |
|
- |
|
(8,168) |
|
9,818 |
|
(12,993) |
Depreciation, depletion and amortization |
|
- |
|
264 |
|
- |
|
350 |
Income taxes |
|
- |
|
(4,336) |
|
9 |
|
(4,336) |
Financial results |
|
- |
|
123 |
|
(14,603) |
|
(1,823) |
Derecognition of noncontrolling interest |
|
- |
|
- |
|
2,783 |
|
- |
EBITDA from discontinued operations |
|
- |
|
(12,117) |
|
(1,993) |
|
(18,802) |
|
|
|
|
|
|
|
|
|
Items to reconciled adjusted LAJIDA (EBITDA) |
|
|
|
|
|
|
|
|
Equity results in associates and joint ventures |
|
- |
|
- |
|
- |
|
144 |
Dividends received and interest from associates and joint ventures (i) |
|
- |
|
- |
|
- |
|
424 |
Impairment of non-current assets, net |
|
- |
|
12,286 |
|
2,867 |
|
16,638 |
Adjusted EBITDA from discontinued operations |
|
- |
|
169 |
|
874 |
|
(1,596) |
(i) Includes the remuneration of the financial instrument
of the Coal segment.
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
b) Assets
by segment
|
|
Consolidated |
|
|
September 30, 2022 |
|
December 31, 2021 |
|
|
Product inventory |
|
Investments in associates and joint ventures |
|
Property, plant and equipment and intangible |
|
Product inventory |
|
Investments in associates and joint ventures |
|
Property, plant and equipment and intangible |
Ferrous minerals |
|
14,678 |
|
6,803 |
|
167,020 |
|
12,199 |
|
6,214 |
|
161,770 |
Base metals |
|
8,713 |
|
- |
|
101,068 |
|
7,725 |
|
95 |
|
112,317 |
Other |
|
- |
|
2,903 |
|
10,567 |
|
120 |
|
3,462 |
|
10,195 |
Total |
|
23,391 |
|
9,706 |
|
278,655 |
|
20,044 |
|
9,771 |
|
284,282 |
|
|
Consolidated |
|
|
Three-month period ended September 30, |
|
|
2022 |
|
2021 |
|
|
Capital expenditures |
|
|
|
Capital expenditures |
|
|
|
|
Sustaining capital (i) |
|
Project execution |
|
Depreciation, depletion and amortization |
|
Sustaining capital (i) |
|
Project execution |
|
Depreciation, depletion and amortization |
Ferrous minerals |
|
2,605 |
|
1,044 |
|
2,315 |
|
3,048 |
|
714 |
|
2,129 |
Base metals |
|
1,806 |
|
421 |
|
1,707 |
|
1,696 |
|
591 |
|
1,185 |
Other (ii) |
|
86 |
|
493 |
|
47 |
|
31 |
|
189 |
|
79 |
Total |
|
4,497 |
|
1,958 |
|
4,069 |
|
4,775 |
|
1,494 |
|
3,393 |
|
|
Consolidated |
|
|
Nine-month period ended September 30, |
|
|
2022 |
|
2021 |
|
|
Capital expenditures |
|
|
|
Capital expenditures |
|
|
|
|
Sustaining capital (i) |
|
Project execution |
|
Depreciation, depletion and amortization |
|
Sustaining capital (i) |
|
Project execution |
|
Depreciation, depletion and amortization |
Ferrous minerals |
|
7,595 |
|
2,964 |
|
6,937 |
|
8,757 |
|
1,750 |
|
6,637 |
Base metals |
|
4,906 |
|
1,214 |
|
4,526 |
|
5,188 |
|
1,329 |
|
4,857 |
Other (ii) |
|
367 |
|
1,746 |
|
189 |
|
120 |
|
348 |
|
302 |
Total |
|
12,868 |
|
5,924 |
|
11,652 |
|
14,065 |
|
3,427 |
|
11,796 |
(i) According to the Company's remuneration
policy, the sustaining capital investments are deducted from the 30% of the adjusted EBITDA. The calculation also considers the
current investment of discontinued coal operations, which was R$201 (US$38 million) for the nine-month period ended September 30,
2022 (2021: R$607 (US$114 million)).
(ii) The sustaining capital investments
related to the Midwestern System were reclassified from “ferrous minerals” to “other” for the three and nine-month
periods ended September 30, 2021 in the amounts of R$25 (US$5 million) and R$50 (US$10 million), respectively. Depreciation, depletion
and amortization were reclassified for the same periods in the amounts of R$21 (US$4 million) and R$97 (US$18 million), respectively.
c) Assets
by geographic area
|
|
Consolidated |
|
|
September 30, 2022 |
|
December 31, 2021 |
|
|
Investments in associates and joint ventures |
|
Intangible |
|
Property, plant and equipment |
|
Total |
|
Investments in associates and joint ventures |
|
Intangible |
|
Property, plant and equipment |
|
Total |
Brazil |
|
9,706 |
|
40,684 |
|
140,072 |
|
190,462 |
|
9,656 |
|
39,339 |
|
132,772 |
|
181,767 |
Canada |
|
- |
|
9,823 |
|
58,111 |
|
67,934 |
|
- |
|
10,927 |
|
69,429 |
|
80,356 |
Americas, except Brazil and Canada |
|
- |
|
- |
|
19 |
|
19 |
|
- |
|
- |
|
15 |
|
15 |
Europe |
|
- |
|
- |
|
4,068 |
|
4,068 |
|
- |
|
- |
|
4,124 |
|
4,124 |
Indonesia |
|
- |
|
4 |
|
14,575 |
|
14,579 |
|
- |
|
8 |
|
15,197 |
|
15,205 |
Asia, except Indonesia and China |
|
- |
|
- |
|
4,290 |
|
4,290 |
|
115 |
|
- |
|
4,879 |
|
4,994 |
China |
|
- |
|
6 |
|
101 |
|
107 |
|
- |
|
11 |
|
117 |
|
128 |
Oman |
|
- |
|
3 |
|
6,899 |
|
6,902 |
|
- |
|
2 |
|
7,462 |
|
7,464 |
Total |
|
9,706 |
|
50,520 |
|
228,135 |
|
288,361 |
|
9,771 |
|
50,287 |
|
233,995 |
|
294,053 |
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
d) Net operating
revenue by geographic area
The sales revenue from Ferrous minerals for
the three and nine-month periods ended September 30, 2022, decreased from prior periods mainly due to the decline of 27%, in the average
realized price of iron ore for both periods, following the decrease in the international price of this product.
|
|
Consolidated |
|
|
Three-month period ended September 30, 2022 |
|
|
Ferrous minerals |
|
Base metals |
|
Other |
|
Total |
Americas, except United States and Brazil |
|
670 |
|
728 |
|
- |
|
1,398 |
United States of America |
|
531 |
|
1,689 |
|
- |
|
2,220 |
Germany |
|
483 |
|
1,505 |
|
- |
|
1,988 |
Europe, except Germany |
|
1,670 |
|
3,499 |
|
- |
|
5,169 |
Middle East, Africa, and Oceania |
|
3,301 |
|
55 |
|
- |
|
3,356 |
Japan |
|
3,601 |
|
880 |
|
- |
|
4,481 |
China |
|
22,718 |
|
1,590 |
|
- |
|
24,308 |
Asia, except Japan and China |
|
3,428 |
|
698 |
|
- |
|
4,126 |
Brazil |
|
4,628 |
|
95 |
|
311 |
|
5,034 |
Net operating revenue |
|
41,030 |
|
10,739 |
|
311 |
|
52,080 |
|
|
Consolidated |
|
|
Three-month period ended September 30, 2021 |
|
|
Ferrous minerals |
|
Base metals |
|
Other (i) |
|
Total |
Americas, except United States and Brazil |
|
1,052 |
|
415 |
|
140 |
|
1,607 |
United States of America |
|
370 |
|
1,432 |
|
- |
|
1,802 |
Germany |
|
916 |
|
908 |
|
- |
|
1,824 |
Europe, except Germany |
|
2,862 |
|
2,253 |
|
- |
|
5,115 |
Middle East, Africa, and Oceania |
|
2,885 |
|
21 |
|
- |
|
2,906 |
Japan |
|
6,752 |
|
749 |
|
- |
|
7,501 |
China |
|
27,994 |
|
1,257 |
|
- |
|
29,251 |
Asia, except Japan and China |
|
4,990 |
|
1,156 |
|
- |
|
6,146 |
Brazil |
|
7,378 |
|
39 |
|
849 |
|
8,266 |
Net operating revenue |
|
55,199 |
|
8,230 |
|
989 |
|
64,418 |
(i) Includes the reclassification of the revenues
of Midwestern System in the amount of R$583 (US$112 million).
|
|
Consolidated |
|
|
Nine-month period ended September 30, 2022 |
|
|
Ferrous minerals |
|
Base metals |
|
Other (i) |
|
Total |
Americas, except United States and Brazil |
|
2,024 |
|
2,135 |
|
625 |
|
4,784 |
United States of America |
|
903 |
|
5,293 |
|
- |
|
6,196 |
Germany |
|
1,596 |
|
4,630 |
|
- |
|
6,226 |
Europe, except Germany |
|
7,473 |
|
8,162 |
|
- |
|
15,635 |
Middle East, Africa, and Oceania |
|
9,117 |
|
100 |
|
123 |
|
9,340 |
Japan |
|
11,166 |
|
2,853 |
|
- |
|
14,019 |
China |
|
73,732 |
|
4,079 |
|
- |
|
77,811 |
Asia, except Japan and China |
|
10,057 |
|
2,568 |
|
225 |
|
12,850 |
Brazil |
|
15,308 |
|
253 |
|
1,351 |
|
16,912 |
Net operating revenue |
|
131,376 |
|
30,073 |
|
2,324 |
|
163,773 |
|
|
Consolidated |
|
|
Nine-month period ended September 30, 2021 |
|
|
Ferrous minerals |
|
Base metals |
|
Other (i) |
|
Total |
Americas, except United States and Brazil |
|
3,072 |
|
1,629 |
|
647 |
|
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 |
|
- |
|
20,532 |
Middle East, Africa, and Oceania |
|
7,926 |
|
62 |
|
- |
|
7,988 |
Japan |
|
14,655 |
|
1,904 |
|
- |
|
16,559 |
China |
|
110,663 |
|
3,526 |
|
- |
|
114,189 |
Asia, except Japan and China |
|
14,468 |
|
3,693 |
|
- |
|
18,161 |
Brazil |
|
20,310 |
|
238 |
|
2,005 |
|
22,553 |
Net operating revenue |
|
186,839 |
|
30,711 |
|
2,652 |
|
220,202 |
(i) Includes the reclassification of the revenues
of Midwestern System in the amount of R$1,161 (US$231 million) for the nine-month period ended September 30, 2022 (R$1,731 (US$325 million)
for the nine-month period ended September 30, 2021).
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
5. Costs
and expenses by nature
a) Cost of goods sold, and services
rendered
|
|
Consolidated |
|
|
Three-month period ended September 30, |
|
Nine-month period ended September 30, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Personnel |
|
2,382 |
|
1,846 |
|
6,627 |
|
6,201 |
Materials and services (i) |
|
5,024 |
|
3,662 |
|
12,809 |
|
10,953 |
Fuel oil and gas (i) |
|
2,608 |
|
1,290 |
|
5,841 |
|
3,571 |
Maintenance |
|
3,956 |
|
3,655 |
|
11,213 |
|
11,023 |
Royalties |
|
1,283 |
|
2,064 |
|
3,761 |
|
5,291 |
Energy |
|
984 |
|
839 |
|
2,665 |
|
2,452 |
Acquisition of products |
|
4,016 |
|
3,311 |
|
9,734 |
|
8,822 |
Depreciation, depletion and amortization |
|
3,946 |
|
3,148 |
|
11,152 |
|
11,056 |
Freight |
|
6,883 |
|
6,158 |
|
17,029 |
|
15,647 |
Other |
|
1,961 |
|
2,658 |
|
5,763 |
|
5,960 |
Total |
|
33,043 |
|
28,631 |
|
86,594 |
|
80,976 |
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
32,249 |
|
27,799 |
|
84,370 |
|
78,658 |
Cost of services rendered |
|
794 |
|
832 |
|
2,224 |
|
2,318 |
Total |
|
33,043 |
|
28,631 |
|
86,594 |
|
80,976 |
(i) The increase in costs is mainly due to higher
fuel prices and inflation of other inputs and services during the three and nine-month periods ended September 30, 2022.
b) Selling
and administrative expenses
|
|
Consolidated |
|
|
Three-month period ended September 30, |
|
Nine-month period ended September 30, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Selling |
|
89 |
|
127 |
|
302 |
|
343 |
Personnel |
|
221 |
|
150 |
|
718 |
|
689 |
Services |
|
145 |
|
149 |
|
411 |
|
361 |
Depreciation and amortization |
|
48 |
|
61 |
|
166 |
|
162 |
Other |
|
123 |
|
111 |
|
283 |
|
315 |
Total |
|
626 |
|
598 |
|
1,880 |
|
1,870 |
c) Other
operating expenses, net
|
|
Consolidated |
|
|
Three-month period ended September 30, |
|
Nine-month period ended September 30, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Asset retirement obligations |
|
- |
|
- |
|
200 |
|
- |
Provision for litigations (note 25) |
|
166 |
|
122 |
|
494 |
|
356 |
Profit sharing program |
|
133 |
|
153 |
|
475 |
|
554 |
Other |
|
(76) |
|
(136) |
|
473 |
|
(272) |
Total |
|
223 |
|
139 |
|
1,642 |
|
638 |
The breakdown of Research and Development expenses by operating segment
is presented in note 4 (a).
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
6. Financial
results
|
|
Consolidated |
|
|
Three-month period ended September 30, |
|
Nine-month period ended September 30, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Financial income |
|
|
|
|
|
|
|
|
Short-term investments |
|
622 |
|
368 |
|
1,898 |
|
731 |
Other |
|
121 |
|
103 |
|
305 |
|
453 |
|
|
743 |
|
471 |
|
2,203 |
|
1,184 |
Financial expenses |
|
|
|
|
|
|
|
|
Loans and borrowings gross interest |
|
(736) |
|
(815) |
|
(2,377) |
|
(2,688) |
Capitalized loans and borrowing costs |
|
49 |
|
75 |
|
205 |
|
235 |
Interest on REFIS |
|
(219) |
|
(87) |
|
(583) |
|
(180) |
Interest on lease liabilities (note 20d) |
|
(82) |
|
(76) |
|
(238) |
|
(252) |
Bond premium repurchase (note 20d) |
|
- |
|
- |
|
(568) |
|
(354) |
Other |
|
(45) |
|
(346) |
|
(996) |
|
(1,324) |
|
|
(1,033) |
|
(1,249) |
|
(4,557) |
|
(4,563) |
Other financial items, net |
|
|
|
|
|
|
|
|
Net foreign exchange gains (losses) |
|
1,048 |
|
1,936 |
|
(930) |
|
1,748 |
Participative stockholders' debentures (note 19) (i) |
|
2,478 |
|
825 |
|
3,800 |
|
(5,886) |
Financial guarantees (i) |
|
2 |
|
(180) |
|
2,413 |
|
1,636 |
Derivative financial instruments (note 17) |
|
1,003 |
|
(2,393) |
|
4,064 |
|
(263) |
Reclassification of cumulative translation adjustments to the income statement (notes 13 and 14) |
|
8,275 |
|
48 |
|
8,275 |
|
6,356 |
Indexation losses, net |
|
(349) |
|
(1,274) |
|
(450) |
|
(154) |
|
|
12,457 |
|
(1,038) |
|
17,172 |
|
3,437 |
Total |
|
12,167 |
|
(1,816) |
|
14,818 |
|
58 |
(i) These lines were reclassified from the prior period
in order to present “Financial expenses” and “Other financial items, net” in similar line items from period to
period.
a) Financial guarantees
As of September 30, 2022, the total guarantees granted
by the Company (within the limit of its direct or indirect interest) to certain associates and joint ventures totaled R$8,061 (US$1,491
million) (December 31, 2021: R$8,443 (US$1,513 million)). The fair value of these financial guarantees in the amount of R$546 (US$101
million) (December 31, 2021: R$3,026 (US$542 million)) is recorded as “Other non-current liabilities”.
7. Taxes
a) Deferred income tax assets
and liabilities
|
|
Consolidated |
|
|
Assets |
|
Liabilities |
|
Deferred taxes, net |
Balance at December 31, 2021 |
|
63,847 |
|
10,494 |
|
53,353 |
Tax effect in the income statement |
|
(9,815) |
|
(134) |
|
(9,681) |
Translation adjustment |
|
(363) |
|
(885) |
|
522 |
Other comprehensive income |
|
385 |
|
298 |
|
87 |
Transfers between assets and liabilities |
|
(930) |
|
(930) |
|
- |
Sale of California Steel Industries (note 14) |
|
- |
|
(147) |
|
147 |
Balance at September 30, 2022 |
|
53,124 |
|
8,696 |
|
44,428 |
|
|
|
|
|
|
|
|
|
Consolidated |
|
|
Assets |
|
Liabilities |
|
Deferred taxes, net |
Balance at December 31, 2020 |
|
53,711 |
|
9,198 |
|
44,513 |
Tax effect in the income statement |
|
3,916 |
|
(104) |
|
4,020 |
Transfers between assets and liabilities |
|
34 |
|
34 |
|
- |
Translation adjustment |
|
709 |
|
369 |
|
340 |
Other comprehensive income |
|
(686) |
|
989 |
|
(1,675) |
Tax loss carryforward from coal operations (note 14) |
|
4,336 |
|
- |
|
4,336 |
Balance at September 30, 2021 |
|
62,020 |
|
10,486 |
|
51,534 |
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
b)
Income tax reconciliation – Income statement
Income tax expense is recognized based on the estimate
of the weighted average effective tax rate expected for the full year, adjusted for the tax effect of certain items that are recognized
in full on the interim tax calculation. Therefore, the effective tax rate in the interim financial statements may differ from management’s
estimate of the effective tax rate for the year.
The total amount presented as income taxes in the
income statement is reconciled to the statutory rate, as follows:
|
|
Consolidated |
|
|
Three-month period ended September 30, |
|
Nine-month period ended September 30, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Income before income taxes |
|
27,409 |
|
31,163 |
|
86,424 |
|
126,977 |
Income taxes at statutory rate – 34% |
|
(9,319) |
|
(10,596) |
|
(29,384) |
|
(43,172) |
Adjustments that affect the taxes basis: |
|
|
|
|
|
|
|
|
Tax incentives |
|
2,526 |
|
5,067 |
|
7,848 |
|
13,715 |
Equity results |
|
154 |
|
358 |
|
303 |
|
539 |
Monetary exchange variation on tax losses carryforward |
|
(272) |
|
570 |
|
(2,630) |
|
432 |
Other (i) |
|
2,730 |
|
2,180 |
|
4,297 |
|
5,097 |
Income taxes |
|
(4,181) |
|
(2,421) |
|
(19,566) |
|
(23,389) |
(i) Refers mainly to the reclassifications
of accumulated translation adjustments to income for the periods presented (notes 13 and 14).
c) Income
taxes - Settlement program (“REFIS”)
|
|
Consolidated |
|
|
September 30, 2022 |
|
December 31, 2021 |
Current liabilities |
|
1,900 |
|
1,810 |
Non-current liabilities |
|
10,064 |
|
10,962 |
REFIS liabilities |
|
11,964 |
|
12,772 |
|
|
|
|
|
SELIC rate |
|
13.75% |
|
9.25% |
It mainly relates to the settlement program
of claims regarding the collection of income tax and social contribution on equity gains of foreign subsidiaries and affiliates from 2003
to 2012. This amount bears SELIC interest rate (Special System for Settlement and Custody) and will be paid in monthly installments until
October 2028.
d) Uncertain tax positions
There have been no relevant developments on matters
related to the uncertain tax positions since the December 31, 2021 financial statements.
e) Recoverable and payable
taxes
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
|
September 30, 2022 |
|
December 31, 2021 |
|
|
Current assets |
|
Non-current assets |
|
Current liabilities |
|
Current assets |
|
Non-current assets |
|
Current liabilities |
Value-added tax |
|
1,515 |
|
- |
|
156 |
|
1,209 |
|
60 |
|
906 |
Brazilian federal contributions |
|
2,446 |
|
3,659 |
|
284 |
|
2,903 |
|
2,851 |
|
66 |
Income taxes |
|
620 |
|
2,365 |
|
442 |
|
630 |
|
2,309 |
|
10,385 |
Financial compensation for the exploration of mineral resources - CFEM |
|
- |
|
- |
|
353 |
|
- |
|
- |
|
328 |
Other |
|
58 |
|
- |
|
402 |
|
67 |
|
- |
|
465 |
Total |
|
4,639 |
|
6,024 |
|
1,637 |
|
4,809 |
|
5,220 |
|
12,150 |
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
| 8. | Basic and diluted earnings (loss) per share |
|
|
Consolidated |
|
|
Three-month period ended September 30, |
|
Nine-month period ended September 30, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Net income attributable to Vale's stockholders: |
|
|
|
|
|
|
|
|
Net income from continuing operations |
|
23,286 |
|
28,587 |
|
66,547 |
|
103,299 |
Net income (loss) from discontinued operations |
|
- |
|
(8,384) |
|
9,818 |
|
(12,437) |
|
|
23,286 |
|
20,203 |
|
76,365 |
|
90,862 |
In thousands of shares |
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding |
|
4,549,205 |
|
5,080,890 |
|
4,674,248 |
|
5,065,750 |
Weighted average number of common shares outstanding and potential ordinary shares |
|
4,553,843 |
|
5,085,314 |
|
4,678,886 |
|
5,070,174 |
|
|
|
|
|
|
|
|
|
Basic and diluted earnings per share from continuing operations: |
|
|
|
|
|
|
|
|
Common share (R$) |
|
5.12 |
|
5.63 |
|
14.24 |
|
20.39 |
Basic and diluted earnings (loss) per share from discontinued operations: |
|
|
|
|
|
|
|
|
Common share (R$) |
|
- |
|
(1.65) |
|
2.10 |
|
(2.46) |
Basic and diluted earnings per share: |
|
|
|
|
|
|
|
|
Common share (R$) |
|
5.12 |
|
3.98 |
|
16.34 |
|
17.94 |
|
|
Consolidated |
|
|
September 30, 2022 |
|
December 31, 2021 |
Receivables from contracts with customers |
|
|
|
|
Related parties (note 28) |
|
728 |
|
608 |
Third parties |
|
|
|
|
Ferrous minerals |
|
7,684 |
|
16,868 |
Base metals |
|
3,305 |
|
3,730 |
Other |
|
116 |
|
900 |
Accounts receivable |
|
11,833 |
|
22,106 |
Expected credit loss |
|
(209) |
|
(266) |
Accounts receivable, net |
|
11,624 |
|
21,840 |
No customer individually represented 10%
or more of the Company’s accounts receivable or revenues for the periods presented in these interim financial statements.
Provisionally
priced commodities sales – The commodity price risk arises from volatility of iron ore, nickel and copper prices. The
Company is mostly exposed to the fluctuations in the iron ore and copper price (note 17). The selling price of these products can be
measured reliably at each period since the price is quoted in an active market.
The sensitivity of the Company’s risk
on final settlement of provisionally priced accounts receivables are presented below:
|
|
September 30, 2022 |
|
|
Thousand metric tons |
|
Provisional price (US$/ton) |
|
Change |
|
Effect on revenue |
Iron ore |
|
17,271 |
|
91.9 |
|
+/- 10% |
|
+/- 833 |
Iron ore pellets |
|
76 |
|
136.2 |
|
+/- 10% |
|
+/- 5 |
Copper |
|
81 |
|
9,652.0 |
|
+/- 10% |
|
+/- 412 |
|
|
Consolidated |
|
|
September 30, 2022 |
|
December 31, 2021 |
Finished products |
|
18,861 |
|
15,615 |
Work in progress |
|
4,659 |
|
4,566 |
Consumable inventory |
|
5,525 |
|
4,777 |
|
|
|
|
|
Allowance to net realizable value |
|
(565) |
|
(529) |
Total |
|
28,480 |
|
24,429 |
Finished and work in progress products inventories
by segments are presented in note 4(b) and the cost of goods sold is presented in note 5(a).
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
11. Suppliers
and contractors
|
|
Consolidated |
|
|
September 30, 2022 |
|
December 31, 2021 |
Third parties - Brazil |
|
12,204 |
|
9,856 |
Third parties - Abroad |
|
11,463 |
|
9,029 |
Related parties (note 28) |
|
1,933 |
|
508 |
Total |
|
25,600 |
|
19,393 |
12. Other
financial assets and liabilities
|
|
Consolidated |
|
|
Current |
|
Non-current |
|
|
September 30, 2022 |
|
December 31, 2021 |
|
September 30, 2022 |
|
December 31, 2021 |
Other financial assets |
|
|
|
|
|
|
|
|
Restricted cash |
|
- |
|
- |
|
420 |
|
653 |
Derivative financial instruments (note 17a) |
|
821 |
|
619 |
|
824 |
|
110 |
Investments in equity securities |
|
- |
|
- |
|
32 |
|
33 |
|
|
821 |
|
619 |
|
1,276 |
|
796 |
Other financial liabilities |
|
|
|
|
|
|
|
|
Derivative financial instruments (note 17a) |
|
558 |
|
1,355 |
|
1,467 |
|
3,301 |
Other financial liabilities - Related parties (note 28) |
|
734 |
|
2,192 |
|
- |
|
- |
Financial guarantees provided (note 6a) (i) |
|
- |
|
- |
|
546 |
|
3,026 |
Liabilities related to the concession grant |
|
3,749 |
|
4,241 |
|
8,520 |
|
8,017 |
Contract liability |
|
2,695 |
|
3,158 |
|
- |
|
- |
|
|
7,736 |
|
10,946 |
|
10,533 |
|
14,344 |
(i) In July 2022, the Company signed a binding agreement
with ArcelorMittal for the sale of CSP. At the closing, CSP's debt will be settled and the financial liability related to the guarantee
granted will be derecognised by Vale.
a) Liabilities related
to the concession grant
On April 14, 2022, the Company prepaid R$796 (US$168
million) of its concession grant obligation related to the Estrada de Ferro Carajás ("EFC") as approved by the Board
of Directors on October 28, 2021. The outstanding balance will be settled in quarterly installments until 2057.
|
|
Liability |
|
Discount rate |
|
|
September 30, 2022 |
|
December 31, 2021 |
|
September 30, 2022 |
|
December 31, 2021 |
Concession grant |
|
3,920 |
|
3,271 |
|
11.04% |
|
11.04% |
Midwestern Integration Railway ("FICO") |
|
6,360 |
|
6,730 |
|
5.69% |
|
5.29% |
Infrastructure program |
|
1,851 |
|
1,910 |
|
5.65% |
|
5.43% |
West-East Integration Railway ("FIOL") |
|
138 |
|
347 |
|
8.72% |
|
5.81% |
Total |
|
12,269 |
|
12,258 |
|
|
|
|
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
13. Investments
in subsidiaries, associates, and joint ventures
|
|
|
|
|
|
Investments in associates and joint ventures |
|
Equity results in the income statement |
|
Dividends received |
|
|
|
|
|
|
|
|
Three-month period ended September 30, |
|
Nine-month period ended September 30, |
|
Three-month period ended September 30, |
|
Nine-month period ended September 30, |
|
|
% ownership |
|
% voting capital |
|
September 30, 2022 |
|
December 31, 2021 |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Associates and joint ventures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ferrous minerals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Baovale Mineração S.A. |
|
50.00 |
|
50.00 |
|
126 |
|
117 |
|
4 |
|
5 |
|
11 |
|
19 |
|
5 |
|
- |
|
5 |
|
- |
Companhia Coreano-Brasileira de Pelotização |
|
50.00 |
|
50.00 |
|
464 |
|
284 |
|
79 |
|
77 |
|
192 |
|
161 |
|
- |
|
- |
|
48 |
|
9 |
Companhia Hispano-Brasileira de Pelotização |
|
50.89 |
|
50.89 |
|
238 |
|
211 |
|
50 |
|
3 |
|
55 |
|
4 |
|
23 |
|
- |
|
30 |
|
35 |
Companhia Ítalo-Brasileira de Pelotização |
|
50.90 |
|
51.00 |
|
366 |
|
270 |
|
56 |
|
86 |
|
121 |
|
153 |
|
- |
|
- |
|
93 |
|
30 |
Companhia Nipo-Brasileira de Pelotização |
|
51.00 |
|
51.11 |
|
788 |
|
720 |
|
61 |
|
81 |
|
170 |
|
147 |
|
- |
|
- |
|
203 |
|
40 |
MRS Logística S.A. |
|
48.16 |
|
46.75 |
|
2,597 |
|
2,334 |
|
116 |
|
171 |
|
264 |
|
362 |
|
- |
|
- |
|
- |
|
- |
Samarco Mineração S.A. (note 22) |
|
50.00 |
|
50.00 |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
VLI S.A. |
|
29.60 |
|
29.60 |
|
2,224 |
|
2,278 |
|
46 |
|
(121) |
|
(54) |
|
(168) |
|
- |
|
- |
|
- |
|
- |
|
|
|
|
|
|
6,803 |
|
6,214 |
|
412 |
|
302 |
|
759 |
|
678 |
|
28 |
|
- |
|
379 |
|
114 |
Base metals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Korea Nickel Corporation |
|
25.00 |
|
25.00 |
|
- |
|
95 |
|
3 |
|
1 |
|
16 |
|
2 |
|
- |
|
- |
|
- |
|
- |
|
|
|
|
|
|
- |
|
95 |
|
3 |
|
1 |
|
16 |
|
2 |
|
- |
|
- |
|
- |
|
- |
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aliança Geração de Energia S.A. |
|
55.00 |
|
55.00 |
|
2,051 |
|
2,046 |
|
43 |
|
216 |
|
126 |
|
307 |
|
121 |
|
24 |
|
121 |
|
140 |
Aliança Norte Energia Participações S.A. |
|
51.00 |
|
51.00 |
|
561 |
|
586 |
|
(8) |
|
1 |
|
(25) |
|
(16) |
|
- |
|
- |
|
- |
|
- |
California Steel Industries, Inc. ("CSI") (note 14) |
|
50.00 |
|
50.00 |
|
- |
|
- |
|
- |
|
547 |
|
- |
|
870 |
|
- |
|
- |
|
360 |
|
- |
Companhia Siderúrgica do Pecém ("CSP") (note 14) |
|
50.00 |
|
50.00 |
|
- |
|
553 |
|
- |
|
- |
|
- |
|
(237) |
|
- |
|
- |
|
- |
|
- |
Mineração Rio do Norte S.A. |
|
40.00 |
|
40.00 |
|
- |
|
- |
|
- |
|
(14) |
|
- |
|
(29) |
|
- |
|
- |
|
- |
|
- |
Other |
|
- |
|
- |
|
291 |
|
277 |
|
5 |
|
(11) |
|
17 |
|
(1) |
|
- |
|
- |
|
2 |
|
- |
|
|
|
|
|
|
2,903 |
|
3,462 |
|
40 |
|
739 |
|
118 |
|
894 |
|
121 |
|
24 |
|
483 |
|
140 |
Total |
|
|
|
|
|
9,706 |
|
9,771 |
|
455 |
|
1,042 |
|
893 |
|
1,574 |
|
149 |
|
24 |
|
862 |
|
254 |
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
a) Changes in the period
|
|
Consolidated |
|
|
2022 |
|
2021 |
Balance at January 1, |
|
9,771 |
|
10,557 |
Translation adjustment |
|
(22) |
|
76 |
Equity results |
|
893 |
|
1,574 |
Dividends declared |
|
(291) |
|
(701) |
Impairment of CSP |
|
(553) |
|
- |
Other |
|
(92) |
|
56 |
Balance at September 30, |
|
9,706 |
|
11,562 |
Capital
reduction in a foreign subsidiary – In August 2022, the Company approved
a capital reduction in the amount of R$7,885 (US$ 1,500 million) of Vale International S.A. (“VISA”), a wholly-owned foreign
subsidiary, leading to a reduction in the absolute value of the investment held by the Parent Company. Therefore, the return of capital
received in September 2022 was determined as a partial disposal and, in accordance with the requirements of IAS 21/CPC 02, the exchange
differences recorded in the stockholders’ equity were reclassified to the income statement in the same proportion as the reduction
in the net investment held in VISA, leading to a gain of R$7,938 (US$1,543 million) presented as “Other financial items, net”
(note 6). The remaining balance of cumulative translation adjustments of VISA represents R$24,257 (US$4,487 million) as of September 30,
2022.
14. Acquisitions
and divestitures
|
|
Nine-month period ended September 30, 2022 |
|
|
Cumulative translation adjustments |
|
Result of the transaction |
|
|
Other financial items, net |
|
Equity results and other results in associates and joint ventures |
|
Total recycling from OCI |
|
Impairment reversal (impairment) of non-current assets |
|
Equity results and other results in associates and joint ventures |
Midwestern System |
|
188 |
|
- |
|
188 |
|
5,620 |
|
- |
California Steel Industries |
|
- |
|
779 |
|
779 |
|
- |
|
741 |
Companhia Siderúrgica do Pecém (i) |
|
- |
|
- |
|
- |
|
- |
|
(685) |
Other |
|
149 |
|
- |
|
149 |
|
12 |
|
(40) |
|
|
337 |
|
779 |
|
1,116 |
|
5,632 |
|
16 |
Discontinued operations (Coal) |
|
14,636 |
|
- |
|
14,636 |
|
(2,867) |
|
- |
|
|
14,973 |
|
779 |
|
15,752 |
|
2,765 |
|
16 |
|
|
|
|
|
|
|
|
|
|
|
(i) Includes impairment of the investment in the amount
of R$553 (US$111 million) and a provision for accounts receivable with CSP in the amount of R$132 (US$24 million).
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine-month period ended September 30, 2021 |
|
|
Cumulative translation adjustments |
|
Result of the transaction |
|
|
Other financial items, net |
|
Equity results and other results in associates and joint ventures |
|
Total recycling from OCI |
|
Impairment of non-current assets |
|
Equity results and other results in associates and joint ventures |
Midwestern System |
|
- |
|
- |
|
- |
|
- |
|
- |
Vale Nouvelle-Calédonie S.A.S. |
|
6,391 |
|
- |
|
6,391 |
|
(549) |
|
- |
Vale Manganês |
|
- |
|
- |
|
- |
|
(147) |
|
- |
Other |
|
(35) |
|
- |
|
(35) |
|
- |
|
(298) |
|
|
6,356 |
|
- |
|
6,356 |
|
(696) |
|
(298) |
Discontinued operations (Coal) |
|
2,134 |
|
- |
|
2,134 |
|
(16,638) |
|
- |
|
|
8,490 |
|
- |
|
8,490 |
|
(17,334) |
|
(298) |
Midwestern
System - During the first quarter of 2022, the Company classified the assets and liabilities related to the Midwestern System
as held for sale due to the negotiations with interested parties in Vale’s iron ore, manganese and logistics assets in the Midwestern
System, through its equity interests in Mineração Corumbaense Reunida S.A., Mineração Mato Grosso S.A., International
Iron Company, Inc. and Transbarge Navegación S.A. These negotiations resulted in the execution of a binding agreement with J&F
Mineração Ltda. (“J&F”) for the sale of these assets, which was signed on April 6, 2022.
The carrying amount of those
assets were fully impaired in past years and the Company had a liability related to take-or-pay logistics contracts in the amount of R$4,629
(US$932 million) that were deemed onerous contracts under the Company’s business model for the Midwestern System, which
had negative reserves of R$4,226 (US$892 million) before reclassification to “Non-current assets and liabilities held for sale”.
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
These offers received during the sale process of
the assets represented an objective evidence of impairment reversal and the remeasurement of the existing provision, which led to a gain
of R$5,620 (US$1,121 million) recorded as “Impairment reversal (impairment and disposals) of non-current assets, net”, of
which R$1,121 (US$214 million) relates to the impairment reversal on the Property, plant and equipment and R$4,559 (US$916 million) is
due to the remeasurement of the onerous contract liability, partially offset by losses in working capital adjustments at the closing of
the transaction in the amount of R$60 (US$9 million).
On July 15, 2022, the transaction was completed,
and the Company received R$815 (US$153 million) and recorded a gain of R$188 (US$37 million), as the reclassification of the cumulative
translation adjustments from the stockholders’ equity to the income statement.
California
Steel Industries (“CSI”) - In December 2021, the Company entered into a binding agreement with Nucor Corporation
(“Nucor”) for the sale of its 50% interest in CSI for R$2,269 (US$437 million). In February 2022, the Company concluded the
sale and recorded a gain of R$1,520 (US$292 million) for the nine-month period ended September 30, 2022, as “Equity results and
other results in associates and joint ventures”, of which R$741 (US$142 million) relates to a gain from the sale and R$779 (US$150
million) is due to the reclassification of the cumulative translation adjustments from the stockholders’ equity to the income statement.
Sale of Companhia Siderúrgica
do Pecém (“CSP”) - In July 2022, the Company and the other shareholders of CSP signed a binding agreement
with ArcelorMittal Brasil S.A. (“ArcelorMittal”) for the sale of CSP for approximately R$11,527 (US$2,132 million), The completion
of the transaction will be used in full for the prepayment of CSP’s outstanding net debt of approximately R$12,435 (US$2,300 million),
as the Company has already recognized an impairment loss of R$685 (US$135 million) for the nine-month period ended September 30, 2022.
The Company does not expect any material impact at closing, which is expected to occur in the first quarter 2023, subject to customary
regulatory approvals.
Manganese ferroalloys
operations in Minas Gerais - In January 2022, the Company completed the sale of its ferroalloys operations in Barbacena and
Ouro Preto and its manganese mining operations at Morro da Mina, in the state of Minas Gerais, to VDL Group (“VDL”) for a
total consideration of R$210 (US$40 million). As the Company had already adjusted the net assets to the fair value less cost of disposal,
the closing did not result in an additional impact on the income statement for the nine-month period ended September 30, 2022 (2021: impairment
of R$147 (US$28 million)). As a result, the Company no longer has manganese ferroalloys operations.
Vale Nouvelle-Calédonie
S.A.S. (“VNC”) - In December 2020, the Company signed a binding put option agreement to sell its interest in VNC
for an immaterial consideration to Prony Resources consortium. With the final agreement signed in March 2021, the Company recorded a loss
in the amount of R$549 (US$98 million), presented as “Impairment reversal (impairment and disposals) of non-current assets, net”
in the income statement for the nine-month period ended September 30, 2021. In the same period, the Company also recorded a gain of R$6,391
(US$1,132 million) due to the cumulative translation adjustments reclassification from the stockholders’ equity to the income statement
as “Other financial items, net”.
Discontinued operations
(Coal) - In June 2021, in preparation for a sale of the coal operation, in connection with the sustainable strategic mining
agenda, the Company carried out a corporate reorganization by acquiring the interests held by Mitsui in the coal assets, which consist
of Moatize mine and the Nacala Logistics Corridor (“NLC”). Following the acquisition of Mitsui’s stakes, and therefore,
the simplification of the governance, the Company started the process of divesting its participation in the coal business.
In December 2021,
the Company entered into a binding agreement with Vulcan Resources (formerly known as Vulcan Minerals - “Vulcan”) for the
sale of these assets. Under the sale agreement Vulcan has committed to pay the gross amount of R$1,285 (US$270 million), in addition of
a 10-year royalty agreement subject to certain mine production and coal price conditions and so, due to the nature and uncertainties related
to the measurement of these royalties, gains will be recognized as incurred.
Therefore, in 2021
the Company adjusted the net assets of the coal business to the fair value less costs of disposal, resulting in impairment losses, and
started presenting the coal segment as a discontinued operation starting from the year ended December 31, 2021.
On April 25, 2022,
the transaction was completed and the Company recorded a net income from discontinued operations of R$9,818 (US$2,060 million) for the
nine-month period ended September 30, 2022, which is mainly driven by the reclassification of the cumulative translation adjustments of
R$14,636 (US$3,072 million), from the stockholders’ equity to the income statement, as required by IAS 21 - The Effects of Changes
in Foreign Exchange Rates, partially offset by the derecognition of noncontrolling interest of R$2,783 (US$585 million) due to the
deconsolidation of the coal assets. Additionally, until the closing of the transaction, the Company recorded losses of R$2,867
(US$589 million), due to the impairment of assets acquired in the period and working capital adjustments. These effects are presented
below:
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
(a) Net income and cash flows from discontinued
operations
|
|
Consolidated |
|
|
Three-month period ended September 30, |
|
Nine-month period ended September 30, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Net income from discontinued operations |
|
|
|
|
|
|
|
|
Net operating revenue |
|
- |
|
1,843 |
|
2,308 |
|
3,207 |
Cost of goods sold and services rendered |
|
- |
|
(1,902) |
|
(1,370) |
|
(5,529) |
Operating expenses |
|
- |
|
(36) |
|
(64) |
|
(48) |
Impairment and disposals of non-current assets, net |
|
- |
|
(12,286) |
|
(2,867) |
|
(16,638) |
Operating loss |
|
- |
|
(12,381) |
|
(1,993) |
|
(19,008) |
Cumulative translation adjustments (i) |
|
- |
|
- |
|
14,636 |
|
2,134 |
Other financial results, net |
|
- |
|
(123) |
|
(33) |
|
(311) |
Derecognition of noncontrolling interest |
|
- |
|
- |
|
(2,783) |
|
- |
Equity results in associates and joint ventures |
|
- |
|
- |
|
- |
|
(144) |
Net income (loss) before income taxes |
|
- |
|
(12,504) |
|
9,827 |
|
(17,329) |
Income taxes |
|
- |
|
4,336 |
|
(9) |
|
4,336 |
Net income (loss) from discontinued operations |
|
- |
|
(8,168) |
|
9,818 |
|
(12,993) |
Net income (loss) attributable to noncontrolling interests |
|
- |
|
216 |
|
- |
|
(556) |
Net income (loss) attributable to Vale's stockholders |
|
- |
|
(8,384) |
|
9,818 |
|
(12,437) |
(i) In 2021, the Company assessed that its Australian
subsidiaries (part of the coal business), which were no longer operational, were considered "abandoned" under IAS 21 and, therefore,
the Company recognized a gain related to the cumulative translation adjustments in the amount of R$2,134 (US$424 million), which was reclassified
to the net income for the nine-month period ended September 30, 2021.
|
|
Consolidated |
|
|
Three-month period ended September 30, |
|
Nine-month period ended September 30, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Cash flow from discontinued operations |
|
|
|
|
|
|
|
|
Operating activities |
|
|
|
|
|
|
|
|
Net income (loss) before income taxes |
|
- |
|
(12,504) |
|
9,827 |
|
(17,329) |
Adjustments: |
|
|
|
|
|
|
|
|
Equity results in associates and joint ventures |
|
- |
|
- |
|
- |
|
144 |
Impairment and disposals of non-current assets, net |
|
- |
|
12,286 |
|
2,867 |
|
16,638 |
Derecognition of noncontrolling interest |
|
- |
|
- |
|
2,783 |
|
- |
Financial results, net |
|
- |
|
123 |
|
(14,603) |
|
(1,823) |
Decrease in assets and liabilities |
|
- |
|
392 |
|
(661) |
|
167 |
Net cash generated (used) by operating activities |
|
- |
|
297 |
|
213 |
|
(2,203) |
|
|
|
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
|
|
|
Additions to property, plant and equipment |
|
- |
|
(257) |
|
(201) |
|
(607) |
Acquisition of NLC, net of cash |
|
- |
|
|
|
- |
|
(11,800) |
Disposal of coal, net of cash |
|
|
|
- |
|
(333) |
|
- |
Other |
|
- |
|
2 |
|
- |
|
380 |
Net cash used in investing activities |
|
- |
|
(255) |
|
(534) |
|
(12,027) |
|
|
|
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
|
|
|
Payments |
|
- |
|
(16) |
|
(54) |
|
(53) |
Net cash used in financing activities |
|
- |
|
(16) |
|
(54) |
|
(53) |
Net cash generated (used) by discontinued operations |
|
- |
|
26 |
|
(375) |
|
(14,283) |
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
15. Intangible
|
|
Consolidated |
|
|
Goodwill |
|
Concessions |
|
Software |
|
Research and development project and patents |
|
Total |
Balance at December 31, 2021 |
|
17,905 |
|
29,149 |
|
479 |
|
2,754 |
|
50,287 |
Additions |
|
- |
|
2,294 |
|
130 |
|
- |
|
2,424 |
Disposals |
|
- |
|
(62) |
|
- |
|
- |
|
(62) |
Amortization |
|
- |
|
(896) |
|
(166) |
|
- |
|
(1,062) |
Translation adjustment |
|
(1,062) |
|
- |
|
(5) |
|
- |
|
(1,067) |
Balance at September 30, 2022 |
|
16,843 |
|
30,485 |
|
438 |
|
2,754 |
|
50,520 |
Cost |
|
16,843 |
|
37,412 |
|
2,899 |
|
2,754 |
|
59,908 |
Accumulated amortization |
|
- |
|
(6,927) |
|
(2,461) |
|
- |
|
(9,388) |
Balance at September 30, 2022 |
|
16,843 |
|
30,485 |
|
438 |
|
2,754 |
|
50,520 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
|
Goodwill |
|
Concessions |
|
Software |
|
Research and development project and patents |
|
Total |
Balance at December 31, 2020 |
|
17,141 |
|
28,015 |
|
396 |
|
2,757 |
|
48,309 |
Additions |
|
- |
|
642 |
|
118 |
|
- |
|
760 |
Disposals |
|
- |
|
(23) |
|
- |
|
- |
|
(23) |
Amortization |
|
- |
|
(994) |
|
(124) |
|
- |
|
(1,118) |
Acquisition of NLC (note 14) |
|
- |
|
7,188 |
|
- |
|
- |
|
7,188 |
Impairment (i) |
|
- |
|
(7,510) |
|
- |
|
- |
|
(7,510) |
Translation adjustment |
|
525 |
|
345 |
|
7 |
|
- |
|
877 |
Balance at September 30, 2021 |
|
17,666 |
|
27,663 |
|
397 |
|
2,757 |
|
48,483 |
Cost |
|
17,666 |
|
40,717 |
|
4,030 |
|
2,757 |
|
65,170 |
Accumulated amortization |
|
- |
|
(13,054) |
|
(3,633) |
|
- |
|
(16,687) |
Balance at September 30, 2021 |
|
17,666 |
|
27,663 |
|
397 |
|
2,757 |
|
48,483 |
(i) The Company
recognized an impairment loss related to coal assets incorporated in the acquisition of NLC in the amount of R$7,510 (US$1,422 million)
for the nine-month period ended September 30, 2021.
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
16. Property,
plant and equipment
|
|
Consolidated |
|
|
Building and land |
|
Facilities |
|
Equipment |
|
Mineral properties |
|
Railway equipment |
|
Right of use assets |
|
Others |
|
Constructions in progress |
|
Total |
Balance at December 31, 2021 |
|
45,408 |
|
40,357 |
|
26,463 |
|
43,206 |
|
13,024 |
|
8,579 |
|
13,864 |
|
43,094 |
|
233,995 |
Additions (i) |
|
- |
|
- |
|
- |
|
- |
|
- |
|
221 |
|
- |
|
18,751 |
|
18,972 |
Disposals (ii) |
|
(95) |
|
(49) |
|
(25) |
|
(1) |
|
(38) |
|
- |
|
(9) |
|
(315) |
|
(532) |
Asset retirement obligation (note 23b) |
|
- |
|
- |
|
- |
|
(5,467) |
|
- |
|
- |
|
- |
|
- |
|
(5,467) |
Depreciation, depletion and amortization |
|
(1,568) |
|
(1,848) |
|
(2,694) |
|
(1,639) |
|
(617) |
|
(706) |
|
(1,146) |
|
- |
|
(10,218) |
Impairment reversal, net (note 14) |
|
295 |
|
177 |
|
339 |
|
203 |
|
- |
|
- |
|
107 |
|
- |
|
1,121 |
Transfer to asset held for sale - Midwestern System (note 14) |
|
(295) |
|
(177) |
|
(339) |
|
(203) |
|
- |
|
- |
|
(107) |
|
- |
|
(1,121) |
Translation adjustment |
|
(1,012) |
|
(732) |
|
(762) |
|
(3,249) |
|
(20) |
|
(256) |
|
(533) |
|
(2,051) |
|
(8,615) |
Transfers |
|
1,682 |
|
2,304 |
|
2,440 |
|
2,010 |
|
623 |
|
- |
|
1,546 |
|
(10,605) |
|
- |
Balance at September 30, 2022 |
|
44,415 |
|
40,032 |
|
25,422 |
|
34,860 |
|
12,972 |
|
7,838 |
|
13,722 |
|
48,874 |
|
228,135 |
Cost |
|
81,585 |
|
65,088 |
|
59,938 |
|
83,502 |
|
21,273 |
|
11,128 |
|
30,530 |
|
48,874 |
|
401,918 |
Accumulated depreciation |
|
(37,170) |
|
(25,056) |
|
(34,516) |
|
(48,642) |
|
(8,301) |
|
(3,290) |
|
(16,808) |
|
- |
|
(173,783) |
Balance at September 30, 2022 |
|
44,415 |
|
40,032 |
|
25,422 |
|
34,860 |
|
12,972 |
|
7,838 |
|
13,722 |
|
48,874 |
|
228,135 |
|
|
Consolidated |
|
|
Building and land |
|
Facilities |
|
Equipment |
|
Mineral properties |
|
Railway equipment |
|
Right of use assets |
|
Others |
|
Constructions in progress |
|
Total |
Balance at December 31, 2020 |
|
44,646 |
|
39,448 |
|
25,637 |
|
41,853 |
|
13,108 |
|
8,121 |
|
12,968 |
|
28,055 |
|
213,836 |
Additions (i) |
|
- |
|
- |
|
- |
|
- |
|
- |
|
292 |
|
- |
|
18,624 |
|
18,916 |
Disposals (ii) |
|
(18) |
|
(138) |
|
(315) |
|
- |
|
(25) |
|
- |
|
(5) |
|
(239) |
|
(740) |
Asset retirement obligation |
|
- |
|
- |
|
- |
|
(2,508) |
|
- |
|
- |
|
- |
|
- |
|
(2,508) |
Depreciation, depletion and amortization |
|
(1,774) |
|
(1,923) |
|
(2,632) |
|
(1,713) |
|
(687) |
|
(700) |
|
(1,053) |
|
- |
|
(10,482) |
Acquisition of NLC (note 14) |
|
1,185 |
|
663 |
|
515 |
|
- |
|
1,640 |
|
167 |
|
10 |
|
460 |
|
4,640 |
Impairment (iii) |
|
(1,220) |
|
(604) |
|
(451) |
|
- |
|
(1,653) |
|
(172) |
|
(10) |
|
(1,240) |
|
(5,350) |
Translation adjustment |
|
717 |
|
432 |
|
849 |
|
1,635 |
|
52 |
|
297 |
|
265 |
|
991 |
|
5,238 |
Transfers |
|
1,194 |
|
1,959 |
|
2,750 |
|
1,144 |
|
447 |
|
- |
|
1,133 |
|
(8,627) |
|
- |
Transfer to net assets held for sale |
|
(16) |
|
(12) |
|
(17) |
|
(8) |
|
- |
|
- |
|
(5) |
|
- |
|
(58) |
Balance at September 30, 2021 |
|
44,714 |
|
39,825 |
|
26,336 |
|
40,403 |
|
12,882 |
|
8,005 |
|
13,303 |
|
38,024 |
|
223,492 |
Cost |
|
82,728 |
|
65,479 |
|
59,271 |
|
90,692 |
|
20,379 |
|
10,593 |
|
29,717 |
|
38,024 |
|
396,883 |
Accumulated depreciation |
|
(38,014) |
|
(25,654) |
|
(32,935) |
|
(50,289) |
|
(7,497) |
|
(2,588) |
|
(16,414) |
|
- |
|
(173,391) |
Balance at September 30, 2021 |
|
44,714 |
|
39,825 |
|
26,336 |
|
40,403 |
|
12,882 |
|
8,005 |
|
13,303 |
|
38,024 |
|
223,492 |
(i) Includes capitalized
interest.
(ii) The net result
from the disposal of assets recorded as “Impairment reversal (impairment and disposals) of non-current assets, net” was R$859
(US$174 million) (2021: R$500 (US$95 million)).
(iii) The Company
recognized an impairment loss of R$4,655 (US$882 million) related to NLC assets for the nine-month period ended September 30, 2021.
Right-of-use assets (leases)
|
|
December 31, 2021 |
|
Additions and contract modifications |
|
Depreciation |
|
Translation adjustment |
|
September 30, 2022 |
Ports |
|
3,797 |
|
4 |
|
(201) |
|
(106) |
|
3,494 |
Vessels |
|
2,744 |
|
(2) |
|
(165) |
|
(104) |
|
2,473 |
Pelletizing plants |
|
1,203 |
|
78 |
|
(181) |
|
- |
|
1,100 |
Properties |
|
468 |
|
80 |
|
(104) |
|
(3) |
|
441 |
Energy plants |
|
271 |
|
- |
|
(26) |
|
(27) |
|
218 |
Mining equipment |
|
96 |
|
61 |
|
(29) |
|
(16) |
|
112 |
Total |
|
8,579 |
|
221 |
|
(706) |
|
(256) |
|
7,838 |
Lease liabilities are presented in note 20.
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
17. Financial
and capital risk management
a) Effects of derivatives on
the balance sheet
|
|
Consolidated |
|
|
Assets |
|
|
September 30, 2022 |
|
December 31, 2021 |
|
|
Current |
|
Non-current |
|
Current |
|
Non-current |
Foreign exchange and interest rate risk |
|
|
|
|
|
|
|
|
CDI & TJLP vs. US$ fixed and floating rate swap |
|
5 |
|
28 |
|
- |
|
- |
IPCA swap |
|
- |
|
- |
|
228 |
|
- |
Pre-dollar swap and forward transactions |
|
333 |
|
628 |
|
112 |
|
46 |
Libor swap |
|
31 |
|
26 |
|
6 |
|
62 |
|
|
369 |
|
682 |
|
346 |
|
108 |
Commodities price risk |
|
|
|
|
|
|
|
|
Base metals products |
|
364 |
|
103 |
|
156 |
|
2 |
Gasoil, Brent and freight |
|
88 |
|
39 |
|
47 |
|
- |
|
|
452 |
|
142 |
|
203 |
|
2 |
Other |
|
- |
|
- |
|
70 |
|
- |
|
|
- |
|
- |
|
70 |
|
- |
Total |
|
821 |
|
824 |
|
619 |
|
110 |
|
|
Consolidated |
|
|
Liabilities |
|
|
September 30, 2022 |
|
December 31, 2021 |
|
|
Current |
|
Non-current |
|
Current |
|
Non-current |
Foreign exchange and interest rate risk |
|
|
|
|
|
|
|
|
CDI & TJLP vs. US$ fixed and floating rate swap |
|
252 |
|
937 |
|
842 |
|
2,453 |
IPCA swap |
|
31 |
|
381 |
|
26 |
|
629 |
Pre-dollar swap and forward transactions |
|
55 |
|
40 |
|
321 |
|
213 |
Libor swap |
|
- |
|
- |
|
- |
|
6 |
|
|
338 |
|
1,358 |
|
1,189 |
|
3,301 |
Commodities price risk |
|
|
|
|
|
|
|
|
Base metals products |
|
71 |
|
- |
|
149 |
|
- |
Gasoil, Brent and freight |
|
132 |
|
48 |
|
14 |
|
- |
|
|
203 |
|
48 |
|
163 |
|
- |
Other |
|
17 |
|
61 |
|
3 |
|
- |
Total |
|
558 |
|
1,467 |
|
1,355 |
|
3,301 |
The balance of derivatives is presented in the balance
sheet as “Other financial assets and liabilities” (note 12).
b) Net exposure
|
|
Consolidated |
|
|
September 30, 2022 |
|
December 31, 2021 |
Foreign exchange and interest rate risk |
|
|
|
|
CDI & TJLP vs. US$ fixed and floating rate swap |
|
(1,156) |
|
(3,295) |
IPCA swap |
|
(412) |
|
(427) |
Pre-dollar swap and forward transactions |
|
866 |
|
(376) |
Libor swap (i) |
|
57 |
|
62 |
|
|
(645) |
|
(4,036) |
Commodities price risk |
|
|
|
|
Base metals products |
|
396 |
|
9 |
Gasoil, Brent and freight |
|
(53) |
|
33 |
|
|
343 |
|
42 |
Other |
|
(78) |
|
67 |
|
|
(78) |
|
67 |
Total |
|
(380) |
|
(3,927) |
(i) In March 2021,
the UK Financial Conduct Authority (“FCA”), the financial regulator in the United Kingdom, announced the discontinuation of
the LIBOR rate for all terms in pounds, euros, Swiss francs, yen and for terms of one week and two months in dollars at the end of December
2021 and the other terms at the end of June 2023. The Company has adopted market practices in its new agreements and is monitoring the
transition of the agreements that are still subject to LIBOR exposure.
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
c) Effects
of derivatives on the income statement
|
|
Consolidated |
|
|
Gain (loss) recognized in the income statement |
|
|
Three-month period ended September 30, |
|
Nine-month period ended September 30, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Foreign exchange and interest rate risk |
|
|
|
|
|
|
|
|
CDI & TJLP vs. US$ fixed and floating rate swap |
|
236 |
|
(1,024) |
|
1,641 |
|
(781) |
IPCA swap |
|
(16) |
|
(219) |
|
320 |
|
148 |
Eurobonds swap |
|
- |
|
- |
|
- |
|
(154) |
Pre-dollar swap and forward operations |
|
987 |
|
(1,245) |
|
2,014 |
|
(192) |
Libor swap |
|
11 |
|
8 |
|
221 |
|
47 |
|
|
1,218 |
|
(2,480) |
|
4,196 |
|
(932) |
Commodities price risk |
|
|
|
|
|
|
|
|
Base metals products |
|
(2) |
|
10 |
|
40 |
|
(3) |
Gasoil, Brent and freight |
|
(161) |
|
62 |
|
(34) |
|
627 |
|
|
(163) |
|
72 |
|
6 |
|
624 |
Other |
|
(52) |
|
15 |
|
(138) |
|
45 |
|
|
(52) |
|
15 |
|
(138) |
|
45 |
Total |
|
1,003 |
|
(2,393) |
|
4,064 |
|
(263) |
d) Effects
of derivatives on the cash flows
|
|
Consolidated |
|
|
Financial settlement inflows (outflows) |
|
|
Three-month period ended September 30, |
|
Nine-month period ended September 30, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Foreign exchange and interest rate risk |
|
|
|
|
|
|
|
|
CDI & TJLP vs. US$ fixed and floating rate swap |
|
(243) |
|
(56) |
|
(468) |
|
(584) |
IPCA swap |
|
250 |
|
- |
|
304 |
|
(97) |
Eurobonds swap |
|
- |
|
- |
|
- |
|
(162) |
Pre-dollar swap and forward operations |
|
358 |
|
15 |
|
814 |
|
(435) |
Libor and treasury swap |
|
229 |
|
(1) |
|
185 |
|
(5) |
|
|
594 |
|
(42) |
|
835 |
|
(1,283) |
Commodities price risk |
|
|
|
|
|
|
|
|
Base metals products |
|
(87) |
|
(78) |
|
(964) |
|
(117) |
Gasoil, Brent and freight |
|
8 |
|
322 |
|
55 |
|
814 |
Thermal and coking coal |
|
- |
|
(88) |
|
- |
|
(88) |
|
|
(79) |
|
156 |
|
(909) |
|
609 |
|
|
|
|
|
|
|
|
|
Other |
|
(4) |
|
- |
|
(4) |
|
- |
Total |
|
511 |
|
114 |
|
(78) |
|
(674) |
e) Hedge accounting
|
|
Consolidated |
|
|
Gain (loss) recognized in the other comprehensive income |
|
|
Three-month period ended September 30, |
|
Nine-month period ended September 30, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Net investment hedge |
|
(246) |
|
(662) |
|
162 |
|
(441) |
Cash flow hedge (Thermal coal) |
|
- |
|
(63) |
|
- |
|
(87) |
Cash flow hedge (Nickel and Palladium) |
|
206 |
|
113 |
|
203 |
|
31 |
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
Cash flow hedge (Nickel)
|
|
Notional (ton) |
|
|
|
|
Fair value |
|
Financial settlement Inflows (Outflows) |
|
Value at Risk |
|
Fair value by year |
|
|
September 30, 2022 |
|
December 31, 2021 |
|
Bought / Sold |
|
Average strike (US$/ton) |
September 30, 2022 |
|
December 31, 2021 |
|
September 30, 2022 |
|
September 30, 2022 |
|
2022 |
|
2023 |
Nickel Revenue Hedge Program |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward |
|
18,900 |
|
39,575 |
|
S |
|
25,113 |
377 |
|
(143) |
|
(1,057) |
|
119 |
|
(63) |
|
440 |
Total |
|
|
|
|
|
|
|
|
377 |
|
(143) |
|
(1,057) |
|
119 |
|
(63) |
|
440 |
In 2022, the Company renewed its hedge nickel program
due to the high volatility of nickel prices linked to future cash flows forecast for the period. In this program, hedging operations were
executed, through forward contracts, to protect a portion of the projected volume of sales at floating, highly probable realization prices,
guaranteeing prices above the average unit cost of nickel production for the protected volumes. The contracts are traded on the London
Metal Exchange or over-the-counter market and the hedged item's P&L is offset by the hedged item’s P&L due to Nickel price
variation.
Cash flow hedge (Palladium)
|
|
Notional (t oz) |
|
|
|
|
|
Fair value |
|
Financial settlement Inflows (Outflows) |
|
Value at Risk |
|
Fair value by year |
|
|
September 30, 2022 |
|
December 31, 2021 |
|
Bought / Sold |
|
Average strike (US$/t oz) |
|
September 30, 2022 |
|
December 31, 2021 |
|
September 30, 2022 |
|
September 30, 2022 |
|
2022 |
Palladium Revenue Hedge Program |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Call Options |
|
11,057 |
|
44,228 |
|
S |
|
3,368 |
|
- |
|
(5) |
|
- |
|
- |
|
- |
Put Options |
|
11,057 |
|
44,228 |
|
B |
|
2,436 |
|
16 |
|
146 |
|
50 |
|
8 |
|
16 |
Total |
|
|
|
|
|
|
|
|
|
16 |
|
141 |
|
50 |
|
8 |
|
16 |
f) Protection programs for the
R$ denominated debt instruments and other liabilities
|
|
Notional |
|
|
|
|
|
Fair value |
|
Financial Settlement Inflows (Outflows) |
|
Value at Risk |
|
Fair value by year |
|
|
September 30, 2022 |
|
December 31, 2021 |
|
Index |
|
Average rate |
|
September 30, 2022 |
|
December 31, 2021 |
|
September 30, 2022 |
|
September 30, 2022 |
|
2022 |
|
2023 |
|
2024+ |
CDI vs. US$ fixed rate swap |
|
|
|
|
|
|
|
|
|
(843) |
|
(2,572) |
|
(285) |
|
150 |
|
(41) |
|
(194) |
|
(608) |
Receivable |
|
R$ 6,636 |
|
R$ 8,142 |
|
CDI |
|
101.93% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payable |
|
US$ 1,540 |
|
US$ 1,906 |
|
Fix |
|
2.52% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TJLP vs. US$ fixed rate swap |
|
|
|
|
|
|
|
|
|
(313) |
|
(723) |
|
(174) |
|
22 |
|
(19) |
|
(43) |
|
(251) |
Receivable |
|
R$ 879 |
|
R$ 1,192 |
|
TJLP + |
|
1.05% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payable |
|
US$ 221 |
|
US$ 320 |
|
Fix |
|
3.41% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R$ fixed rate vs. US$ fixed rate swap |
|
|
|
|
|
|
|
|
|
665 |
|
(354) |
|
183 |
|
382 |
|
2 |
|
276 |
|
387 |
Receivable |
|
R$ 20,957 |
|
R$ 5,730 |
|
Fix |
|
5.22% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payable |
|
US$ 3,968 |
|
US$ 1,084 |
|
Fix |
|
-1.35% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IPCA vs. US$ fixed rate swap |
|
|
|
|
|
|
|
|
|
(412) |
|
(656) |
|
42 |
|
33 |
|
(9) |
|
(33) |
|
(370) |
Receivable |
|
R$ 1,348 |
|
R$ 1,508 |
|
IPCA + |
|
4.54% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payable |
|
US$ 333 |
|
US$ 373 |
|
Fix |
|
3.88% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IPCA vs. CDI swap |
|
|
|
|
|
|
|
|
|
- |
|
228 |
|
262 |
|
- |
|
- |
|
- |
|
- |
Receivable |
|
- |
|
R$ 769 |
|
IPCA + |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payable |
|
- |
|
R$ 1,350 |
|
CDI |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward |
|
R$ 4,395 |
|
R$ 6,013 |
|
B |
|
5.39 |
|
201 |
|
(22) |
|
631 |
|
70 |
|
3 |
|
169 |
|
29 |
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
g) Protection program for Libor
floating interest rate US$ denominated debt
|
|
Notional |
|
|
|
|
|
Fair value |
|
Financial Settlement Inflows (Outflows) |
|
Value at Risk |
Fair value by year |
|
|
September 30, 2022 |
|
December 31, 2021 |
|
Index |
|
Average rate |
|
September 30, 2022 |
|
December 31, 2021 |
|
September 30, 2022 |
|
September 30, 2022 |
|
2022 |
|
2023 |
|
2024+ |
Libor vs. US$ fixed rate swap |
|
|
|
|
|
|
|
|
|
57 |
|
62 |
|
226 |
|
7 |
|
11 |
|
38 |
|
8 |
Receivable |
|
US$ 150 |
|
US$ 950 |
|
Libor |
|
0.85% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payable |
|
US$ 150 |
|
US$ 950 |
|
Fix |
|
0.85% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In August 2022, swap operations to convert interest
rates indexed to the Libor to fixed rates were liquidated due to the settlement of a portion of the debt. The Company kept its swap strategy
for remaining amount of US$150 of debt indexed to the Libor.
h) Protection for treasury volatility
related to tender offer transaction
|
|
Notional |
|
|
|
|
|
Fair value |
|
Financial Settlement Inflows (Outflows) |
|
Value at Risk |
Fair value by year |
|
|
September 30, 2022 |
|
December 31, 2021 |
|
Index |
|
Average rate |
|
September 30, 2022 |
|
December 31, 2021 |
|
September 30, 2022 |
|
September 30, 2022 |
|
2022 |
Forwards |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
(41) |
|
- |
|
- |
To reduce the volatility of the premium to be paid
to investors for the tender offer transaction issued on June 9, 2022, treasury lock transactions were implemented and already settled.
i) Protection program for product
prices and input costs
|
|
Notional |
|
|
|
|
|
Fair value |
|
Financial settlement Inflows (Outflows) |
|
Value at Risk |
|
Fair value by year |
|
|
September 30, 2022 |
|
December 31, 2021 |
|
Bought / Sold |
|
Average strike (US$/bbl) |
|
September 30, 2022 |
|
December 31, 2021 |
|
September 30, 2022 |
|
September 30, 2022 |
|
2022 |
|
2023+ |
Brent crude oil (bbl) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Call options |
|
10,268,250 |
|
762,000 |
|
B |
|
106 |
|
126 |
|
39 |
|
64 |
|
25 |
|
11 |
|
115 |
Put options |
|
10,268,250 |
|
762,000 |
|
S |
|
69 |
|
(152) |
|
(14) |
|
- |
|
30 |
|
(42) |
|
(110) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward Freight Agreement (days) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freight forwards |
|
1,350 |
|
330 |
|
B |
|
17,447 |
|
(28) |
|
8 |
|
(10) |
|
5 |
|
(18) |
|
(10) |
In 2022, the Company renewed its brent crude oil
hedge through options contracts on Brent Crude Oil, for different portions of the exposure, in order to reduce the impact of fluctuations
in fuel oil prices on the hiring and availability of maritime freight and, consequently, to reduce the Company’s cash flow volatility.
The derivative transactions were negotiated over-the-counter and the protected item is part of the costs linked to the price of fuel oil
used on ships. The financial settlement inflows or outflows are offset by the protected items’ losses or gains.
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
j) Other derivatives, including
embedded derivatives in contracts
|
|
Notional |
|
|
|
|
|
Fair value |
|
Financial settlement Inflows (Outflows) |
|
Value at Risk |
|
Fair value |
|
Valor justo |
|
|
September 30, 2022 |
|
December 31, 2021 |
|
Bought / Sold |
|
Average strike (US$/bbl) |
|
September 30, 2022 |
|
December 31, 2021 |
|
September 30, 2022 |
|
September 30, 2022 |
|
2022 |
|
2023+ |
Option related to a Special Purpose Entity (i) |
|
|
Call option |
|
- |
|
137,751,623 |
|
B |
|
- |
|
- |
|
70 |
|
- |
|
- |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Embedded derivative in natural gas purchase agreement |
|
|
Call options |
|
746,667 |
|
729,571 |
|
S |
|
233 |
|
(78) |
|
(3) |
|
(4) |
|
(47) |
|
(78) |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed price sales protection |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nickel forwards |
|
792 |
|
342 |
|
B |
|
20,630 |
|
2 |
|
8 |
|
9 |
|
5 |
|
1 |
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedge program for products acquisition for resale |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nickel forwards |
|
84 |
|
1,206 |
|
S |
|
22,523 |
|
1 |
|
(6) |
|
35 |
|
1 |
|
1 |
|
- |
(i) In January 2019, the Company acquired a call
option related to shares of certain special purpose entities, which are part of a wind farm located in state of Bahia, Brazil, which expired
in July 2022 without exercising the option.
k) Sensitivity analysis of derivative
financial instruments
The following tables present the potential value
of the instruments given hypothetical stress scenarios for the main market risk factors that impact the derivatives positions. The scenarios
were defined as follows:
- Probable: the probable scenario was defined as
the fair value of the derivative instruments as of September 30, 2022.
- Scenario I: fair value estimated considering a
25% deterioration in the associated risk variables.
- Scenario II: fair value estimated considering a
50% deterioration in the associated risk variables.
Instrument |
|
Instrument's main risk events |
|
Probable |
|
Scenario I |
|
Scenario II |
CDI vs. US$ fixed rate swap |
|
R$ depreciation |
|
(843) |
|
(2,815) |
|
(4,787) |
|
|
US$ interest rate inside Brazil decrease |
|
(843) |
|
(1,115) |
|
(1,414) |
|
|
Brazilian interest rate increase |
|
(843) |
|
(1,042) |
|
(1,242) |
Protected item: R$ denominated liabilities |
|
R$ depreciation |
|
n.a. |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
TJLP vs. US$ fixed rate swap |
|
R$ depreciation |
|
(313) |
|
(602) |
|
(892) |
|
|
US$ interest rate inside Brazil decrease |
|
(313) |
|
(342) |
|
(373) |
|
|
Brazilian interest rate increase |
|
(313) |
|
(363) |
|
(408) |
|
|
TJLP interest rate decrease |
|
(313) |
|
(347) |
|
(382) |
Protected item: R$ denominated debt |
|
R$ depreciation |
|
n.a. |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
R$ fixed rate vs. US$ fixed rate swap |
|
R$ depreciation |
|
665 |
|
(4,190) |
|
(9,045) |
|
|
US$ interest rate inside Brazil decrease |
|
665 |
|
200 |
|
(292) |
|
|
Brazilian interest rate increase |
|
665 |
|
(295) |
|
(1,180) |
Protected item: R$ denominated debt |
|
R$ depreciation |
|
n.a. |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
IPCA swap vs. US$ fixed rate swap |
|
R$ depreciation |
|
(412) |
|
(850) |
|
(1,287) |
|
|
US$ interest rate inside Brazil decrease |
|
(412) |
|
(470) |
|
(533) |
|
|
Brazilian interest rate increase |
|
(412) |
|
(497) |
|
(581) |
|
|
IPCA index decrease |
|
(412) |
|
(455) |
|
(498) |
Protected item: R$ denominated debt |
|
R$ depreciation |
|
n.a. |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
US$ floating rate vs. US$ fixed rate swap |
|
US$ Libor decrease |
|
57 |
|
28 |
|
(1) |
Protected item: Libor US$ indexed debt |
|
US$ Libor decrease |
|
n.a. |
|
(28) |
|
1 |
|
|
|
|
|
|
|
|
|
NDF BRL/USD |
|
R$ depreciation |
|
201 |
|
(719) |
|
(1,638) |
|
|
US$ interest rate inside Brazil decrease |
|
201 |
|
150 |
|
97 |
|
|
Brazilian interest rate increase |
|
201 |
|
90 |
|
(15) |
Protected item: R$ denominated liabilities |
|
R$ depreciation |
|
n.a. |
|
- |
|
- |
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
Instrument |
|
Instrument's main risk events |
|
Probable |
|
Scenario I |
|
Scenario II |
Fuel oil protection |
|
|
|
|
|
|
|
|
Options |
|
Price input decrease |
|
(25) |
|
(608) |
|
(1,565) |
Protected item: Part of costs linked to fuel oil prices |
|
Price input decrease |
|
n.a. |
|
608 |
|
1,565 |
|
|
|
|
|
|
|
|
|
Forward Freight Agreement |
|
|
|
|
|
|
|
|
Forwards |
|
Freight price decrease |
|
(28) |
|
(48) |
|
(72) |
Protected item: Part of costs linked to maritime freight prices |
|
Freight price decrease |
|
n.a. |
|
48 |
|
72 |
|
|
|
|
|
|
|
|
|
Nickel sales fixed price protection |
|
|
|
|
|
|
|
|
Forwards |
|
Nickel price decrease |
|
2 |
|
(20) |
|
(42) |
Protected item: Part of nickel revenues with fixed prices |
|
Nickel price decrease |
|
n.a. |
|
20 |
|
42 |
|
|
|
|
|
|
|
|
|
Hedge program for products acquisition for resale (tons) |
|
|
|
|
|
|
|
|
Forwards |
|
Nickel price increase |
|
1 |
|
- |
|
(2) |
Protected item: Part of revenues from products for resale |
|
Nickel price increase |
|
n.a. |
|
- |
|
2 |
|
|
|
|
|
|
|
|
|
Nickel Revenue Hedging Program |
|
|
|
|
|
|
|
|
Options |
|
Nickel price increase |
|
377 |
|
(158) |
|
(693) |
Protected item: Part of nickel revenues with fixed sales prices |
|
Nickel price increase |
|
n.a. |
|
158 |
|
693 |
|
|
|
|
|
|
|
|
|
Palladium Revenue Hedging Program |
|
|
|
|
|
|
|
|
Options |
|
Palladium price increase |
|
16 |
|
1 |
|
(10) |
Protected item: Part of palladium future revenues |
|
Palladium price increase |
|
n.a. |
|
(1) |
|
10 |
|
|
|
|
|
|
|
|
|
Instrument |
|
Main risks |
|
Probable |
|
Scenario I |
|
Scenario II |
Embedded derivatives - Gas purchase |
|
Pellet price increase |
|
(78) |
|
(160) |
|
(253) |
l) Financial counterparties’
ratings
The transactions of derivative instruments, cash
and cash equivalents as well as short-term investments are held with financial institutions whose exposure limits are periodically reviewed
and approved by the delegated authority. The financial institutions credit risk is performed through a methodology that considers, among
other information, ratings provided by international rating agencies.
The table below presents the ratings in foreign currency
as published by Moody’s regarding the main financial institutions used by the Company to contract derivative instruments, cash and
cash equivalents transaction.
|
|
Consolidated |
|
|
September 30, 2022 |
|
December 31, 2021 |
|
|
Cash and cash equivalents and investment |
|
Derivatives |
|
Cash and cash equivalents and investment |
|
Derivatives |
Aa1 |
|
121 |
|
- |
|
712 |
|
- |
Aa2 |
|
1,880 |
|
10 |
|
1,592 |
|
81 |
Aa3 |
|
1,223 |
|
- |
|
2,761 |
|
187 |
A1 |
|
10,650 |
|
671 |
|
6,387 |
|
19 |
A2 |
|
3,151 |
|
357 |
|
19,408 |
|
220 |
A3 |
|
4,853 |
|
134 |
|
8,471 |
|
111 |
Baa1 |
|
1 |
|
- |
|
500 |
|
- |
Baa2 |
|
616 |
|
- |
|
59 |
|
- |
Ba2 (i) |
|
3,083 |
|
414 |
|
15,420 |
|
28 |
Ba3 (i) |
|
2,662 |
|
93 |
|
11,096 |
|
- |
Other |
|
- |
|
(34) |
|
31 |
|
83 |
|
|
28,240 |
|
1,645 |
|
66,437 |
|
729 |
(i) A substantial
part of the balances is held with financial institutions in Brazil and, in local currency, they are deemed investment grade.
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
18. Financial
assets and liabilities
The Company classifies
its financial instruments in accordance with the purpose for which they were acquired, and determines the
classification
and initial recognition according to the following categories:
|
|
Consolidated |
|
|
September 30, 2022 |
|
|
|
December 31, 2021 |
Financial assets |
|
Amortized cost |
|
At fair value through OCI |
|
At fair value through
profit or loss |
|
Total |
|
Amortized cost |
|
At fair value through OCI |
|
At fair value through
profit or loss |
|
Total |
Current |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents (note 20) |
|
28,015 |
|
- |
|
- |
|
28,015 |
|
65,409 |
|
- |
|
- |
|
65,409 |
Short-term investments (note 20) |
|
- |
|
- |
|
225 |
|
225 |
|
- |
|
- |
|
1,028 |
|
1,028 |
Derivative financial instruments (note 17a) |
|
- |
|
- |
|
821 |
|
821 |
|
- |
|
- |
|
619 |
|
619 |
Accounts receivable (note 9) |
|
3,449 |
|
- |
|
8,175 |
|
11,624 |
|
3,921 |
|
- |
|
17,919 |
|
21,840 |
|
|
31,464 |
|
- |
|
9,221 |
|
40,685 |
|
69,330 |
|
- |
|
19,566 |
|
88,896 |
Non-current |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Judicial deposits (note 25c) |
|
6,968 |
|
- |
|
- |
|
6,968 |
|
6,808 |
|
- |
|
- |
|
6,808 |
Restricted cash (note 12) |
|
420 |
|
- |
|
- |
|
420 |
|
653 |
|
- |
|
- |
|
653 |
Derivative financial instruments (note 17a) |
|
- |
|
- |
|
824 |
|
824 |
|
- |
|
- |
|
110 |
|
110 |
Investments in equity securities (note 12) |
|
- |
|
32 |
|
- |
|
32 |
|
- |
|
33 |
|
- |
|
33 |
|
|
7,388 |
|
32 |
|
824 |
|
8,244 |
|
7,461 |
|
33 |
|
110 |
|
7,604 |
Total of financial assets |
|
38,852 |
|
32 |
|
10,045 |
|
48,929 |
|
76,791 |
|
33 |
|
19,676 |
|
96,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Suppliers and contractors (note 11) |
|
25,600 |
|
- |
|
- |
|
25,600 |
|
19,393 |
|
- |
|
- |
|
19,393 |
Derivative financial instruments (note 17a) |
|
- |
|
- |
|
558 |
|
558 |
|
- |
|
- |
|
1,355 |
|
1,355 |
Loans, borrowings and leases (note 20) |
|
2,412 |
|
- |
|
- |
|
2,412 |
|
6,720 |
|
- |
|
- |
|
6,720 |
Liabilities related to the concession grant (note 12a) |
|
3,749 |
|
- |
|
- |
|
3,749 |
|
4,241 |
|
- |
|
- |
|
4,241 |
Other financial liabilities - Related parties (note 28) |
|
734 |
|
- |
|
- |
|
734 |
|
2,192 |
|
- |
|
- |
|
2,192 |
Contract liability |
|
2,695 |
|
- |
|
- |
|
2,695 |
|
3,158 |
|
- |
|
- |
|
3,158 |
|
|
35,190 |
|
- |
|
558 |
|
35,748 |
|
35,704 |
|
- |
|
1,355 |
|
37,059 |
Non-current |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments (note 17a) |
|
- |
|
- |
|
1,467 |
|
1,467 |
|
- |
|
- |
|
3,301 |
|
3,301 |
Loans, borrowings and leases (note 20) |
|
63,565 |
|
- |
|
- |
|
63,565 |
|
70,189 |
|
- |
|
- |
|
70,189 |
Participative stockholders' debentures (note 19) |
|
- |
|
- |
|
14,379 |
|
14,379 |
|
- |
|
- |
|
19,078 |
|
19,078 |
Liabilities related to the concession grant (note 12a) |
|
8,520 |
|
- |
|
- |
|
8,520 |
|
8,017 |
|
- |
|
- |
|
8,017 |
Financial guarantees (note 6a) |
|
- |
|
- |
|
546 |
|
546 |
|
- |
|
- |
|
3,026 |
|
3,026 |
|
|
72,085 |
|
- |
|
16,392 |
|
88,477 |
|
78,206 |
|
- |
|
25,405 |
|
103,611 |
Total of financial liabilities |
|
107,275 |
|
- |
|
16,950 |
|
124,225 |
|
113,910 |
|
- |
|
26,760 |
|
140,670 |
a) Hierarchy of fair value
|
|
|
|
Consolidated |
|
|
|
|
September 30, 2022 |
|
December 31, 2021 |
|
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
Financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term investments (note 20) |
|
225 |
|
- |
|
- |
|
225 |
|
1,028 |
|
- |
|
- |
|
1,028 |
Derivative financial instruments (note 17a) |
|
- |
|
1,645 |
|
- |
|
1,645 |
|
- |
|
659 |
|
70 |
|
729 |
Accounts receivable (note 9) |
|
- |
|
8,175 |
|
- |
|
8,175 |
|
- |
|
17,919 |
|
- |
|
17,919 |
Investments in equity securities (note 12) |
|
32 |
|
- |
|
- |
|
32 |
|
33 |
|
- |
|
- |
|
33 |
|
|
257 |
|
9,820 |
|
- |
|
10,077 |
|
1,061 |
|
18,578 |
|
70 |
|
19,709 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments (note 17a) |
|
- |
|
2,025 |
|
- |
|
2,025 |
|
- |
|
4,656 |
|
- |
|
4,656 |
Participative stockholders' debentures (note 19) |
|
- |
|
14,379 |
|
- |
|
14,379 |
|
- |
|
19,078 |
|
- |
|
19,078 |
Financial guarantees (note 6) |
|
- |
|
546 |
|
- |
|
546 |
|
- |
|
3,026 |
|
- |
|
3,026 |
|
|
- |
|
16,950 |
|
- |
|
16,950 |
|
- |
|
26,760 |
|
- |
|
26,760 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
There were no transfers between levels 1, 2 and 3
of the fair value hierarchy during the periods presented.
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
a.i) Changes in Level 3 assets
and liabilities during the period
|
|
Consolidated |
|
|
Derivative financial instruments |
|
|
Financial assets |
|
Financial liabilities |
Balance at December 31, 2021 |
|
70 |
|
- |
Losses recognized in the income statement |
|
(70) |
|
- |
Balance at September 30, 2022 |
|
- |
|
- |
b) Fair value of loans and borrowings
|
|
Consolidated |
|
|
September 30, 2022 |
|
December 31, 2021 |
|
|
Current liabilities |
|
Fair value |
|
Non-current liabilities |
|
Fair value |
Quoted in the secondary market: |
|
|
|
|
|
|
|
|
Bonds |
|
33,294 |
|
30,887 |
|
41,564 |
|
51,068 |
Debentures |
|
1,270 |
|
1,254 |
|
2,160 |
|
2,160 |
Debt contracts in Brazil in: |
|
|
|
|
|
|
|
|
R$, indexed to TJLP, TR, IPCA, IGP-M and CDI |
|
1,502 |
|
1,505 |
|
1,975 |
|
2,508 |
R$, with fixed interest |
|
10 |
|
11 |
|
73 |
|
- |
Basket of currencies and bonds in US$ indexed to LIBOR |
|
- |
|
- |
|
61 |
|
61 |
Debt contracts in the international market in: |
|
|
|
|
|
|
|
|
US$, with variable and fixed interest |
|
20,339 |
|
19,294 |
|
20,173 |
|
18,030 |
Other currencies, with variable interest |
|
49 |
|
49 |
|
486 |
|
299 |
Other currencies, with fixed interest |
|
475 |
|
469 |
|
597 |
|
654 |
Total |
|
56,939 |
|
53,469 |
|
67,089 |
|
74,780 |
19. Participative stockholders’
debentures
At the time of its privatization in 1997, the Company
issued a total of 388,559,056 debentures to then-existing stockholders, including the Brazilian Government. The debentures’ terms
were set to ensure that pre-privatization stockholders would participate in potential future benefits that might be obtained from exploration
of mineral resources. This obligation related to the debentures will cease when all the relevant mineral resources are exhausted, sold
or otherwise disposed of by the Company.
Holders of participative stockholders’ debentures
have the right to receive semi-annual payments equal to an agreed percentage of revenues less value-added tax, transport fee and insurance
expenses related to the trading of the products, derived from these mineral resources. On October 3, 2022 (subsequent event), the Company
made available for withdrawal as remuneration the amount of R$715 (US$137 million) for the first semester of 2022, as disclosed on the
“Shareholders’ debentures report” made available on the Company’s website.
To calculate the fair value of the liability, the
Company uses the weighted average price of trades in the secondary market for the last month of the quarter. The average price decreased
from R$49.10 per debenture for the year ended December 31, 2021 to R$37.00 per debenture for the period ended September 30, 2022, resulting
in a gain of R$3,800 (US$758 million) recorded in the income statement for the nine-month period ended September 30, 2022 (an expense
of R$5,886 (US$1,107 million) for the nine-month period ended September 30, 2021), respectively. As of September 30, 2022 the liability
was R$14,379 (US$2,659 million) (R$19,078 (US$3,419 million) as at December 31, 2021).
The average price decreased from R$43.39 per
debenture for the period ended June 30, 2022 (R$60.34 for the period ended June 30, 2021) to R$37.00 per debenture for the period
ended September 30, 2022 (R$57.78 for the period ended September 30, 2021), resulting in a gain of R$2,478 (US$470 million) recorded
in the income statement for the three-month period ended September 30, 2022 (a gain of R$825 (US$152 million) for the three-month period
ended September 30, 2021).
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
20. Loans,
borrowings, leases, cash and cash equivalents and short-term investments
a)
Net debt
The Company evaluates
the net debt with the objective of ensuring the continuity of its business in the long term.
|
|
Consolidated |
|
|
September 30, 2022 |
|
December 31, 2021 |
Debt contracts |
|
57,663 |
|
67,967 |
Leases |
|
8,314 |
|
8,942 |
Total of loans, borrowings and leases |
|
65,977 |
|
76,909 |
|
|
|
|
|
(-) Cash and cash equivalents |
|
28,015 |
|
65,409 |
(-) Short-term investments |
|
225 |
|
1,028 |
Net debt |
|
37,737 |
|
10,472 |
b) Cash and cash equivalents
Cash and cash equivalents include cash, immediately
redeemable deposits, and short-term investments with an insignificant risk of change in value and readily convertible to cash, being R$10,137
(US$1,875 million) (R$37,468 (US$6,714 million) as of December 31, 2021) denominated in R$, indexed to the CDI, R$13,944 (US$2,579 million)
(R$26,613 (US$4,769 million) as of December 31, 2021) denominated in US$ and R$3,934 (US$728 million) (R$1,328 (US$238 million) as of
December 31, 2021) denominated in other currencies as of September 30, 2022.
c) Short-term
investments
As of September 30, 2022, the balance of R$225 (US$42
million) (R$1,028 (US$184 million) as of December 31, 2021) substantially comprises investments in exclusive investment fund immediately
liquidity, whose portfolio is composed of committed transactions and Financial Treasury Bills (“LFTs”), which are floating-rate
securities issued by the Brazilian government.
d) Loans,
borrowings, and leases
i) Total debt
|
|
|
|
Consolidated |
|
|
|
|
Current liabilities |
|
Non-current liabilities |
|
|
Average interest rate (i) |
|
September 30, 2022 |
|
December 31, 2021 |
|
September 30, 2022 |
|
December 31, 2021 |
Quoted in the secondary market: |
|
|
|
|
|
|
|
|
|
|
US$ Bonds |
|
6.00% |
|
- |
|
- |
|
33,294 |
|
41,564 |
R$ Debentures (ii) |
|
9.96% |
|
243 |
|
1,038 |
|
1,027 |
|
1,122 |
Debt contracts in Brazil in (iii): |
|
|
|
|
|
|
|
|
|
|
R$, indexed to TJLP, TR, IPCA, IGP-M and CDI |
|
10.83% |
|
237 |
|
530 |
|
1,265 |
|
1,445 |
R$, with fixed interest |
|
3.04% |
|
10 |
|
67 |
|
- |
|
6 |
Basket of currencies and bonds in US$ indexed to LIBOR |
|
|
|
- |
|
61 |
|
- |
|
- |
Debt contracts in the international market in: |
|
|
|
|
|
|
|
|
|
|
US$, with variable and fixed interest |
|
4.20% |
|
292 |
|
2,673 |
|
20,047 |
|
17,500 |
Other currencies, with variable interest |
|
4.09% |
|
- |
|
430 |
|
49 |
|
56 |
Other currencies, with fixed interest |
|
3.59% |
|
59 |
|
67 |
|
416 |
|
530 |
Accrued charges |
|
|
|
724 |
|
878 |
|
- |
|
- |
Total |
|
|
|
1,565 |
|
5,744 |
|
56,098 |
|
62,223 |
(i) In order to determine the average interest rate
for debt contracts with floating rates, the Company used the rate applicable as of September 30, 2022.
(ii) The Company has debentures in Brazil that were
raised with BNDES for infrastructure investment projects.
(iii) The Company contracted derivatives to mitigate
the exposure to changes in cash flows of debt contracted in Brazil, resulting in an average cost of 3.59% per year in US$.
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
Future flows of debt payments,
principal and interest
|
|
Consolidated |
|
|
Principal |
|
Estimated future
interest payments (i) |
2022 |
|
419 |
|
748 |
2023 |
|
550 |
|
3,342 |
2024 |
|
3,283 |
|
3,205 |
2025 |
|
800 |
|
3,086 |
Between 2026 and 2030 |
|
19,870 |
|
10,099 |
2031 onwards |
|
32,017 |
|
12,993 |
Total |
|
56,939 |
|
33,473 |
(i) Based on interest
rate curves and foreign exchange rates applicable as of September 30, 2022 and considering that the payments of principal will be made
on their contracted payments dates. The amount includes the estimated interest not yet accrued and the interest already recognized in
the financial statements.
Covenants
Some of the Company’s debt agreements with
lenders contain covenants. The primary financial covenants in those agreements require maintaining certain ratios, such as debt to EBITDA,
which is defined in note 4, and interest coverage. The Company did not identify any instances of noncompliance as of September 30, 2022.
Reconciliation of debt to cash
flows arising from financing activities
|
|
Consolidated |
|
|
Quoted in the secondary market |
|
Debt contracts in Brazil |
|
Debt contracts on the international market |
|
Total |
December 31, 2021 |
|
44,501 |
|
2,120 |
|
21,346 |
|
67,967 |
Additions |
|
- |
|
- |
|
4,133 |
|
4,133 |
Payments |
|
(7,276) |
|
(1,089) |
|
(3,272) |
|
(11,637) |
Interest paid (i) |
|
(2,943) |
|
(239) |
|
(174) |
|
(3,356) |
Cash flow from financing activities |
|
(10,219) |
|
(1,328) |
|
687 |
|
(10,860) |
|
|
|
|
|
|
|
|
|
Effect of exchange rate |
|
(1,579) |
|
(15) |
|
(790) |
|
(2,384) |
Interest accretion |
|
2,058 |
|
607 |
|
275 |
|
2,940 |
Non-cash changes |
|
479 |
|
592 |
|
(515) |
|
556 |
|
|
|
|
|
|
|
|
|
September 30, 2022 |
|
34,761 |
|
1,384 |
|
21,518 |
|
57,663 |
(i) Classified as
cash flow due to operational activities.
Funding and payments
| · | In
January 2022, the Company contracted two lines of credit indexed to Libor, in the amount of R$2,361 (US$425 million) with maturity in
2027 with the Bank of Nova Scotia, and prepaid R$993 (US$200 million) of a line of credit maturing in 2023 with the same bank. |
| · | In
May 2022, the Company contracted the credit line of R$967 (US$200 million) with MUFG Bank indexed to Secured Overnight Financing Rate
(“SOFR”) and maturing in 2027. |
| · | In
June 2022, the Company repurchased R$6,520 (US$1,291 million) of its bonds and paid a premium of R$568 (US$113 million), which has been
recorded and is presented as “Bond premium repurchase” under the financial results for the nine-month period ended September
30, 2022. |
| · | In
July 2022, the Company contracted the credit line of R$805 (US$150 million) with SMBC Bank indexed to Secured Overnight Financing Rate
(“SOFR”) and maturing in 2027. |
| · | In
August 2022, the Company settle its infrastructure debentures of the 2nd series, by a payment of R$865 (US$170 million). |
| · | In
January 2021, the Company contracted the credit line of R$1,633 (US$300 million) with The New Development Bank maturing in 2035 and indexed
to Libor + 2.49% per year. |
| · | In
March 2021, the Company redeemed all of its 3.750% bonds due January 2023, in the total amount of R$4,946 (EUR750 million) and paid a
premium of R$354 (US$63 million), which was recorded and is presented as “Bond premium repurchase” under the financial results
for the nine-month period ended September 30, 2021. |
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
Lease liabilities
|
|
Consolidated |
|
|
December 31, 2021 |
|
Additions and contract modifications |
|
Payments (i) |
|
Interest |
|
Sale of Midwestern System (note 14) |
|
Translation adjustment |
|
September 30, 2022 |
Ports |
|
3,982 |
|
4 |
|
(274) |
|
100 |
|
(79) |
|
(109) |
|
3,624 |
Vessels |
|
2,731 |
|
(2) |
|
(244) |
|
68 |
|
- |
|
(103) |
|
2,450 |
Pelletizing plants |
|
1,253 |
|
78 |
|
(47) |
|
39 |
|
- |
|
- |
|
1,323 |
Properties |
|
577 |
|
80 |
|
(139) |
|
10 |
|
- |
|
2 |
|
530 |
Energy plants |
|
328 |
|
- |
|
(21) |
|
12 |
|
- |
|
(35) |
|
284 |
Mining equipment |
|
71 |
|
61 |
|
(19) |
|
9 |
|
- |
|
(19) |
|
103 |
Total |
|
8,942 |
|
221 |
|
(744) |
|
238 |
|
(79) |
|
(264) |
|
8,314 |
Current liabilities |
|
976 |
|
- |
|
- |
|
- |
|
- |
|
- |
|
847 |
Non-current liabilities |
|
7,966 |
|
- |
|
- |
|
- |
|
- |
|
- |
|
7,467 |
Total |
|
8,942 |
|
- |
|
- |
|
- |
|
- |
|
- |
|
8,314 |
(i) The total amount of the variable lease payments
not included in the measurement of the lease liabilities for the nine-month period ended September 30, 2022 was R$1,386 (US$270 million)
(2021: R$1.457 (US$277 million)).
Annual minimum payments and remaining
lease term
The following table presents the undiscounted lease
obligation by maturity date. The lease liability recognized in the balance sheet is measured at the present value of such obligations.
|
|
2022 |
|
2023 |
|
2024 |
|
2025 |
|
2026 onwards |
|
Total |
|
Remaining contractual term (years) |
|
Discount rate |
Ports |
|
88 |
|
336 |
|
333 |
|
330 |
|
3,941 |
|
5,028 |
|
1 to 21 |
|
3% to 5% |
Vessels |
|
85 |
|
333 |
|
325 |
|
317 |
|
1,869 |
|
2,929 |
|
3 to 11 |
|
3% to 4% |
Pelletizing plants |
|
223 |
|
262 |
|
217 |
|
217 |
|
606 |
|
1,525 |
|
1 to 11 |
|
2% to 5% |
Properties |
|
59 |
|
132 |
|
116 |
|
70 |
|
229 |
|
606 |
|
1 to 8 |
|
2% to 6% |
Energy plants |
|
9 |
|
32 |
|
28 |
|
28 |
|
269 |
|
366 |
|
1 to 8 |
|
5% to 6% |
Mining equipment |
|
10 |
|
33 |
|
23 |
|
20 |
|
15 |
|
101 |
|
1 to 6 |
|
2% to 6% |
Total |
|
474 |
|
1,128 |
|
1,042 |
|
982 |
|
6,929 |
|
10,555 |
|
|
|
|
21. Brumadinho
dam failure
On January 25, 2019, a tailings dam (“Dam I”)
failed at the Córrego do Feijão mine, in the city of Brumadinho, state of Minas Gerais. The failure released a flow of tailings
debris, destroying some of Vale’s facilities, affecting local communities and disturbing the environment. The tailings released
have caused an impact of around 315 km in extension, reaching the nearby Paraopeba River. The dam failure in Brumadinho (“event”)
resulted in 270 fatalities or presumed fatalities, including 4 victims still missing, and caused extensive property and environmental
damage in the region.
As a result, on February 4, 2021, the Company entered
into a Judicial Settlement for Integral Reparation (“Global Settlement”), which was under negotiations since 2019, with the
State of Minas Gerais, the Public Defender of the State of Minas Gerais and the Federal and the State of Minas Gerais Public Prosecutors
Offices, to repair the environmental and social damage resulting from the Dam I rupture.
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
Changes on the provisions in the
period
|
|
Consolidated |
|
|
December 31, 2021 |
|
Operating
expense |
|
Present value adjustment |
|
Disbursements |
|
September 30, 2022 |
Global Settlement for Brumadinho |
|
|
|
|
|
|
|
|
|
|
Payment obligations |
|
7,964 |
|
- |
|
205 |
|
(2,881) |
|
5,288 |
Provision for socio-economic reparation and others |
|
4,757 |
|
- |
|
67 |
|
(337) |
|
4,487 |
Provision for social and environmental reparation |
|
3,933 |
|
- |
|
220 |
|
(158) |
|
3,995 |
|
|
16,654 |
|
- |
|
492 |
|
(3,376) |
|
13,770 |
Commitments |
|
|
|
|
|
|
|
|
|
|
Tailings containment and geotechnical safety |
|
1,772 |
|
1,215 |
|
(15) |
|
(290) |
|
2,682 |
Individual indemnification |
|
640 |
|
- |
|
(1) |
|
(309) |
|
330 |
Other commitments |
|
671 |
|
162 |
|
(29) |
|
(118) |
|
686 |
|
|
3,083 |
|
1,377 |
|
(45) |
|
(717) |
|
3,698 |
|
|
|
|
|
|
|
|
|
|
|
|
|
19,737 |
|
1,377 |
|
447 |
|
(4,093) |
|
17,468 |
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
6,449 |
|
|
|
|
|
|
|
7,127 |
Non-current liabilities |
|
13,288 |
|
|
|
|
|
|
|
10,341 |
Liabilities |
|
19,737 |
|
- |
|
- |
|
- |
|
17,468 |
|
|
|
|
|
|
|
|
|
|
|
Discount rate in nominal terms |
|
8.08% |
|
|
|
|
|
|
|
8.75% |
|
|
|
|
|
|
|
|
|
|
|
The Company has incurred expenses, which have been recognized
straight to the income statement, in relation to tailings management, humanitarian assistance, payroll, legal services, water supply,
among others. In the three and nine-month periods ended September 30, 2022, the Company incurred expenses in the amounts of R$836 (US$160
million) and R$2,236 (US$437 million), respectively (R$847 (US$161 million) and R$2,437 (US$461 million), in the three and nine-month
periods ended September 30, 2021)).
a) Global Settlement for
Brumadinho
The Global Agreement includes:
(i) payment obligations, of which the funds will be used directly by the State of Minas Gerais and Institutions of Justice for socio-economic
and socio-environmental compensation projects; (ii) socioeconomic projects in Brumadinho and other municipalities; and (iii) compensation
of the environmental damage caused by the dam rupture. These obligations are projected for an average period of 5 years.
For the measures (i) and (ii), the agreement
specifies an amount for each project and changes in the original budget and deadlines may have an impact in the provision. In addition,
despite the amount set by Global Settlement to carry out the environmental recovery actions, it has no cap due to the Company's legal
obligation to fully repair the environmental damage caused by the dam rupture. The expenses related to these obligations are deducted
from the income tax calculation, in accordance with the Brazilian tax regulation, which is subject to periodic inspection by the competent
authorities. Therefore, despite the fact Vale is monitoring this provision, the amount recorded could materially change depending on
several factors that are not under the Company’s control.
b) Contingencies and other legal
matters
(b.i) Public civil actions brought by
the State of Minas Gerais and state public prosecutors for damages resulting from the rupture of Dam I
The Company is party to public civil actions
brought by the State of Minas Gerais and justice institutions, claiming compensation for socioeconomic and socio-environmental damages
resulting from the dam failure and seeking a broad range of preliminary injunctions ordering Vale to take specific remediation and reparation
actions. As a result of the Global Settlement, settled in February 2021, the requests for the reparation of socio-environmental and socioeconomic
damages caused by the dam rupture were substantially resolved. Indemnifications for individual damages was excluded from the Global Settlement,
and the Term of Commitment signed with the Public Defendants of the State of Minas Gerais was ratified, whose parameters are utilized
as a basis for the settlement of individual agreements. In the same year of 2021, it was initiated, by Vale and the State of Minas Gerais
and justice institutions, the fulfilment of the Global Settlement.
(b.ii) Collective Labor Civil Actions
In 2021, public civil actions were filed in
the Betim Labor Court in the State of Minas Gerais, by a workers' unions claiming the payment of compensation for death damages to own
and outsourced employees, who died as a result of the rupture of Dam I.
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
Initial sentences were published condemning
Vale to pay from R$1 (US$185 thousand) per fatal victim. Vale is defending itself on the lawsuits and understands that the likelihood
of loss is possible.
(b.iii) U.S. Securities class action suit
Vale is defending itself in a class action
brought before a Federal Court in New York and filed by holders of securities - American Depositary Receipts ("ADRs") - issued
by Vale. Following the decision of the Court, in May 2020, that denied the Motion to Dismiss presented by the Company, the Discovery phase
has started and is expected to be concluded in 2023.
On November 24, 2021, a new Complaint was
filed before the same Court by eight Plaintiffs, all investment funds, as an “opt-out” litigation from the class action already
pending in the Eastern District of New York court, asserting virtually the same claims against the same defendants as those in the class
case.
The likelihood of loss of these proceedings is classified
as possible. However, considering the initial stage of this class action, it is not possible to reliably estimate the amount of a potential
loss at this time. The Plaintiff did not specify the amounts alleged in this demand.
(b.iv) Arbitration proceedings in Brazil
filed by minority stockholders and a class association
In Brazil, Vale is a defendant in (i) one
arbitration filed by 385 minority stockholders, (ii) two arbitrations filed by a class association allegedly representing all Vale’s
minority stockholders, and (iii) three arbitrations filed by foreign investment funds.
In the six proceedings, the Claimants argue
Vale was aware of the risks associated with the dam and failed to disclose it to the stockholders. Based on such argument, they claim
compensation for losses caused by the decrease of the value of the shares.
The expectation of loss is classified as possible
for the six procedures and, considering the initial phase, it is not possible at this time to reliably estimate the amount of a possible
loss.
In one of the proceedings filed by foreign
funds, the Claimants initially estimated the amount of the alleged losses would be approximately R$1,800 (US$333 million). In another
proceeding filed by foreign funds, the Claimants initially estimated the amount of the alleged losses would be approximately US$721 (R$3,900
million). The Company disagrees with the ongoing proceedings and understands that, in this case and at the current stage of the proceedings,
the probability of loss in the amount claimed by the foreign funds is remote.
(b.v) Lawsuit filed by the Securities
and Exchange Commission (“SEC”) and Investigations conducted by CVM
On April 28, 2022, SEC filed a suit against Vale alleging
violations of U.S. securities laws arising from Vale’s disclosures about its dam safety management, including the dam in Brumadinho.
The SEC is seeking the imposition of civil monetary penalties, disgorgement and other relief within the SEC’s authority in a lawsuit
filed in a federal court. Vale believes that its disclosures did not violate U.S. law and is contesting such allegations. On September
29, 2022, Vale served the SEC with its motion to dismiss the complaint. The SEC’s deadline to serve Vale with its Opposition to
the motion to dismiss is currently ongoing. The likelihood of loss of this proceeding is classified as possible and it is not yet possible
to reliably estimate the amount of a potential loss to the Company due to the initial phase of the lawsuit.
CVM is also conducting investigations relating to Vale's
disclosure of relevant information to shareholders, investors and the market in general, especially regarding the conditions and management
of Vale's dams. The likelihood of loss of this proceeding is classified as possible and it is not yet possible to reliably estimate the
amount of a potential loss to the Company.
(b.vi) Criminal proceedings and investigations
In January 2020, the State Prosecutors of
Minas Gerais (“MPMG”) filed criminal charges against 16 individuals (including former executive officers of Vale and former
employees) for a number of potential crimes, including homicide, and against Vale S.A. for alleged environmental crimes. In November 2021,
the Brazilian Federal Police concluded an investigation on potential criminal liability for the Brumadinho dam rupture. The investigation
has been sent to the Federal Public Prosecutors (“MPF”), which has not brought criminal charges against Vale. The MPF and
the Brazilian Federal Police conducted a separate investigation into the causes of the dam rupture in Brumadinho, which may result in
new criminal proceedings. Vale is defending itself against the criminal claims and is no possible to estimate when a decision will be
issued.
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
(b.vii) Decision of Brazilian Office
of the Comptroller General (“CGU”)
In October 2020, the Company was informed that the
CGU initiated an administrative proceeding based on the same allegations under the Brazilian Law 12,846/2013 in connection with
inspection and monitoring activities relating to the Brumadinho dam. In August 2022, the CGU has concluded that Vale has failed to
present reliable information to the Brazilian National Mining Agency (“ANM”) and that it was issued a positive stability
condition (“DCE”) statement for the Dam I of Brumadinho, when, in the understanding of the CGU, it should be negative.
Thus, even recognizing the non-existence of corruption acts, the CGU issued a fine of R$86 (US$16 million), the minimum baseline
established by law, recognizing the non-involvement or tolerance of the top management. Vale has submitted a request for
reconsideration, but it believes the likelihood of loss this amount is possible.
c) Insurance
The Company is negotiating with insurers the payment
of indemnification under its civil liability and Directors and Officers Liability Insurance. However, these negotiations are still in
progress, therefore any payment of insurance proceeds will depend on the coverage definitions under these policies and assessment of the
amount of loss. Due to uncertainties, no indemnification related to these insurers was recognized in these financial statements.
22. Liabilities
related to associates and joint ventures
a)
Provision related to the rupture of Samarco dam
In November 2015, the Fundão tailings dam
owned by Samarco Mineração S.A. (Samarco) failed, releasing tailings downstream, flooding certain communities and causing
impacts on communities and the environment along the Doce river. The rupture resulted in 19 fatalities and caused property and environmental
damage to the affected areas. Samarco is a joint venture equally owned by Vale S.A. and BHP Billiton Brasil Ltda. (‘‘BHPB’’).
In 2016, Vale, Samarco and BHPB, entered into a Framework
Agreement with the Federal Government of Brazil, the states of Espírito Santo and Minas Gerais and certain other public authorities
to establish that is developing and executing environmental and socio-economic programs to remediate and provide compensation for damage
caused by the Samarco dam failure.
In June 2018, Samarco, Vale and BHPB entered into
a comprehensive agreement with the offices of the federal and state (Minas Gerais and Espírito Santo) prosecutors, public defenders
and attorney general, among other parties (“TacGov Agreement”), improving the governance mechanism of Renova Foundation and
establishing, among other things, a process for potential revisions to the remediation programs under the Framework Agreement.
Under the Framework Agreement, Samarco has primary
responsibility for funding Fundação Renova’s annual calendar year budget for the duration of the Framework Agreement.
However, to the extent that Samarco does not meet its funding obligations, each of Vale and BHPB have secondary funding obligations under
the Framework Agreement in proportion to its 50 per cent shareholding in Samarco.
Samarco began to gradually recommence operations
in December 2020, however, there remains significant uncertainty regarding Samarco’s long-term cash flow generation. In light of
these uncertainties and based on currently available information, Vale has a provision for its obligations under the Framework Agreement
programs in the amount of R$15,963 (US$2,953 million) at September 30, 2022 (December 31, 2021: R$16,245 (US$2,910 million)).
b) Germano
Dam
In addition to the Fundão
tailings dam, Samarco owns the Germano dam, which was also built under the upstream method and has been inactive since the Fundão
dam rupture. Due to the safety requirements set by the Brazilian National Mining Agency (“ANM”), Samarco prepared a project
for the de-characterization of this dam, resulting in a provision for the de-characterization of the Germano tailings dam. As of September
30, 2022, Vale has a provision for de-characterization of Germano tailings dam in the amount of R$1,033 (US$191 million) (December 31, 2021: R$1,126
(US$202 million)).
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
c) Changes on the provisions in
the period
|
|
Consolidated |
|
|
2022 |
|
2021 |
Balance at January 1, |
|
17,371 |
|
10,782 |
Additional provision |
|
450 |
|
2,820 |
Disbursements |
|
(598) |
|
(743) |
Present value adjustment |
|
(227) |
|
(537) |
Balance at September 30, |
|
16,996 |
|
12,322 |
|
|
|
|
|
|
|
September 30, 2022 |
|
December 31, 2021 |
Current liabilities |
|
10,959 |
|
9,964 |
Non-current liabilities |
|
6,037 |
|
7,407 |
Liabilities |
|
16,996 |
|
17,371 |
d) Samarco’s
working capital
In addition to the provision,
Vale S.A. made available R$113 (US$21 million) during the nine-month period ended September 30, 2021, which was fully used to
fund Samarco’s working capital. This amount was recognized in Vale´s income statement as an expense in “Equity results
and other results in associates and joint ventures”. In 2022, Vale was not required to fund Samarco’s working capital.
e) Judicial recovery of Samarco
In April 2021, Samarco announced the request for
Judicial Reorganization (“RJ”) that was filed with the Minas Gerais Court to renegotiate its debt, which is held by bondholders
abroad. The purpose of RJ is to restructure Samarco’s debts and establish an independent and sustainable financial position, allowing
Samarco to keep working to resume its operations safely and to fulfill its obligations related to the Renova Foundation.
In addition, the ongoing discussions in the context
of the RJ may lead to the loss of deductibility of part of the expenses incurred with the Renova Foundation and of the deferred taxes
over the total provision, depending on the method determined for restructuring Samarco's debts. As of September 30, 2022, the exposure
is R$7,951 (US$1,471 million), of which R$2,376 (US$439 million) are expenses already incurred and considered as part of the Company’s
uncertain tax positions.
The Company is working in the perspective that the
mechanisms resulting from the RJ will continue allowing the deductibility of these expenses. However, future decisions resulting from
the negotiations regarding Samarco's capital structure, which are not under Vale's control, could materially change the deferred tax recognized
by the Company.
f) Contingencies related to Samarco
accident
These proceedings include public civil actions brought
by Brazilian authorities and multiple proceedings involving claims for significant amounts of damages and remediation measures. The Framework
Agreements represents a model for the settlement of the public civil action brought by the MPF and other related proceedings. There are
also putative securities class actions in the United States against Vale and some of its current and former officers and a criminal proceeding
in Brazil. The main updates regarding the lawsuits in the period were as follows:
(f.i) Public civil action brought by federal
prosecutors and framework agreements
Vale is a defendant in several legal proceedings
brought by governmental authorities and civil associations claiming socioenvironmental and socioeconomic damages and a number of specific
remediation measures as a result of the rupture of Samarco’s Fundão dam, including a claim brought by the Federal Public
Prosecution Office in 2016 seeking R$155 billion (US$29 billion) (full amount of the claim, the effect for Vale would be 50% of this amount),
which has been suspended from the date of ratification of the TacGov Agreement.
However, pre-requisites established in the TacGov
Agreement, for renegotiation of the Framework Agreement were not implemented during the two-year period and on September 30, 2020, and
Brazilian Federal and State prosecutors and public defenders filed a request for the immediate resumption of the R$155 billion (US$29
billion) claim.
Therefore, Vale, Samarco, BHPB and Federal and State
prosecutors have been engaging in negotiations to seek a definitive settlement of the obligations under the Framework Agreement and the
R$155 billion (US$29 billion) Federal Public Prosecution Office claim. The goal with a potential agreement
is to provide a stable framework for the execution of reparation and compensation programs.
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
The potential agreement is still uncertain as it
is subject to conclusion of the negotiations and approval by the Company, relevant authorities and Intervenient parties.
The estimate of the economic impact of a potential
agreement will depend mainly on (i) a detailed assessment of the estimates of the amounts to be spent on the reparation and compensation
projects being discussed, (ii) an analysis of the detailed scope of such projects to determine their overlap with the initiatives and
amounts already provisioned; and (iii) the timing of the execution of projects and disbursements, which will impact the present value
of the obligations.
Therefore, until any revisions to the Programs are
agreed, Fundação Renova will continue to implement the Programs in accordance with the terms of the Framework Agreement
and the TacGov Agreement, for which the expected costs are reflected in the Company’s provision.
(f.ii) Criminal proceeding
In September 2019, the federal court of Ponte Nova
dismissed all criminal charges against Vale representatives relating to the first group of charges, which concerns to the results of the
Fundão dam failure, remaining only the legal entity in the passive pole. The second group of charges against Vale S.A. and one
of the Company’s former employee, which concerns the accusation of alleged crimes committed against the Environmental Public Administration,
remained unchanged. The Company is defending itself and cannot estimate when a final decision on the case will be issued.
g) Insurance
Since the Fundão dam rupture, the Company
negotiated with insurers the indemnification payments based on its general liability policies. In the nine-month period ended September
30, 2021, the Company received R$181 (US$33 million), which was recorded as a gain in the income statement as “Equity results and
other results in associates and joint ventures”. The Company did not receive any further insurance in 2022 and does not expect to
receive any material amounts in the future.
| 23. | Provision for de-characterization of dam structures and asset retirement obligations |
The Company is subject to laws and regulations that
requires the decommissioning of the assets and mines sites at the end of the operation and, therefore, decommissioning expenditures are
incurred predominantly when the Company ceases the operating activities. Depending on the geotechnical characteristics of the structures,
the Company is required to de-characterize the structures, as described below.
a) De-characterization of upstream
and centerline geotechnical structures
As a result of the Brumadinho dam rupture (note 21),
the Company has decided to speed up the plan to “de-characterize” all of its tailings dams built under the upstream method,
certain “centerline structures” and dikes, located in Brazil. The Company also operates tailings dams in Canada, including
upstream compacted dams. However, the Company has decided that these dams will be decommissioned using other methods, and so, the provision
to execute decommissioning of dams in Canada is recognized as “Asset retirement obligations and environmental obligations”,
presented in item (b) below.
In September 2020, the federal government enacted
Law no. 14,066, which modified the National Dam Safety Policy (Law no. 12,334/2020), reinforcing the prohibition of constructing and raising
upstream dams in Brazil. The statute also requires companies to de-characterize the structures built using the upstream method by 2022,
or by a later date if it is proven that the de-characterization is not technically feasible by 2022. A substantial part of the Company's
de-characterization projects will be completed in 15 years, which exceeds the date established in the regulation due to the characteristics
and safety levels of the Company's geotechnical structures.
Thus, in February 2022, the Company filed with the
relevant bodies a request for an extension to perform the projects and, as a result, signed a Term of Commitment establishing legal and
technical certainty for the process of de-characterization of the upstream dams, considering that the deadline defined was technically
unfeasible, especially due to the necessary actions to increase safety during the works. With the signing of the agreement, the Company
recorded an additional provision of R$192 (US$37 million) to make investments in social and environmental projects over a period of 8
years.
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
Changes on the provisions in the period
|
|
Consolidated |
|
|
2022 |
|
2021 |
Balance at January 1, |
|
19,666 |
|
11,897 |
Additional provision |
|
375 |
|
- |
Disbursements |
|
(1,271) |
|
(1,356) |
Present value adjustment |
|
(98) |
|
(442) |
Balance at September 30, |
|
18,672 |
|
10,099 |
|
|
|
|
|
|
|
September 30, 2022 |
|
December 31, 2021 |
Current liabilities |
|
2,550 |
|
2,518 |
Non-current liabilities |
|
16,122 |
|
17,148 |
Liabilities |
|
18,672 |
|
19,666 |
In addition, due to the de-characterization projects,
the Company has suspended some operations due to judicial decisions or technical analysis performed by Vale on its upstream dam structures
located in Brazil. The Company has been recording losses in relation to the operational stoppage and idle capacity of the ferrous mineral
segment in the amounts of R$1,039 (US$202 million) for the nine-month period ended on September 30, 2022 (R$1,376 (US$256 million)
for the nine-month period ended on September 30, 2021). The Company is working on legal and technical measures to resume all operations
at full capacity.
b) Asset retirement obligations
and environmental obligations
|
|
Consolidated |
|
|
Liability |
|
Discount rate |
|
|
|
|
September 30, 2022 |
|
December 31, 2021 |
|
September 30, 2022 |
|
December 31, 2021 |
|
Cash flow duration |
Liability by geographical area |
|
|
|
|
|
|
|
|
|
|
Brazil |
|
7,207 |
|
7,786 |
|
5.74% |
|
5.48% |
|
2119 |
Canada |
|
7,909 |
|
15,221 |
|
1.39% |
|
0.00% |
|
2150 |
Oman |
|
663 |
|
684 |
|
4.86% |
|
3.03% |
|
2035 |
Indonesia |
|
376 |
|
432 |
|
4.49% |
|
4.20% |
|
2061 |
Other |
|
1,000 |
|
1,432 |
|
0,02 - 2,55% |
|
0.00 - 7.79% |
|
- |
|
|
17,155 |
|
25,555 |
|
|
|
|
|
|
Changes on the provisions in
the period
|
|
Consolidated |
|
|
2022 |
|
2021 |
|
|
Asset retirement obligations |
|
Environmental obligations |
|
Total |
|
Asset retirement obligations |
|
Environmental obligations |
|
Total |
Balance at January 1, |
|
23,906 |
|
1,649 |
|
25,555 |
|
21,929 |
|
1,571 |
|
23,500 |
Present value adjustment (i) |
|
(5,851) |
|
(23) |
|
(5,874) |
|
(2,452) |
|
(41) |
|
(2,493) |
Disbursements |
|
(375) |
|
(212) |
|
(587) |
|
(317) |
|
(166) |
|
(483) |
Revisions on projected cash flows |
|
200 |
|
5 |
|
205 |
|
- |
|
- |
|
- |
Translation adjustment |
|
(1,886) |
|
(18) |
|
(1,904) |
|
811 |
|
8 |
|
819 |
Transfer to assets held for sale (note 14) |
|
(231) |
|
(9) |
|
(240) |
|
- |
|
- |
|
- |
Balance at September 30, |
|
15,763 |
|
1,392 |
|
17,155 |
|
19,971 |
|
1,372 |
|
21,343 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2022 |
|
December 31, 2021 |
|
|
Asset retirement obligations |
|
Environmental obligations |
|
Total |
|
Asset retirement obligations |
|
Environmental obligations |
|
Total |
Current |
|
711 |
|
526 |
|
1,237 |
|
400 |
|
550 |
|
950 |
Non-current |
|
15,052 |
|
866 |
|
15,918 |
|
23,506 |
|
1,099 |
|
24,605 |
Liability |
|
15,763 |
|
1,392 |
|
17,155 |
|
23,906 |
|
1,649 |
|
25,555 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(i) Mainly refers to the increase in the discount
rate of the asset retirement obligation in Canada, which increased from 0.00% to 1.39% in the nine-month period ended September 30, 2022.
The adjustment in provision was recorded as the property, plant and equipment (note 16).
c) Financial guarantees
The Company has issued letters of credit and surety
bonds of R$3,063 (US$566 million) as of September 30, 2022 (R$3,373 (US$605 million) as of December 31, 2021), in connection with
the asset retirement obligations for its Base Metals operations.
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
24. Provisions
|
|
|
|
Consolidated |
|
|
Current liabilities |
|
Non-current liabilities |
|
|
September 30, 2022 |
|
December 31, 2021 |
|
September 30, 2022 |
|
December 31, 2021 |
Provisions for litigation (note 25) |
|
543 |
|
516 |
|
5,886 |
|
5,647 |
Employee post-retirement obligations (note 26) |
|
565 |
|
553 |
|
6,811 |
|
8,556 |
Payroll, related charges and other remunerations |
|
3,917 |
|
4,553 |
|
- |
|
- |
Onerous contracts (note 14) |
|
- |
|
208 |
|
- |
|
4,879 |
|
|
5,025 |
|
5,830 |
|
12,697 |
|
19,082 |
25. Litigations
The Company is
defendant in numerous legal actions in the ordinary course of business, including civil, tax, environmental and labor proceedings.
The Company makes
use of estimates to recognize the amounts and the probability of outflow of resources, based on reports and technical assessments and
on management’s assessment. Provisions are recognized for probable losses of which a reliable estimate can be made.
Arbitral, legal
and administrative decisions against the Company, new jurisprudence and changes of existing evidence can result in changes regarding the
probability of outflow of resources and on the estimated amounts, according to the assessment of the legal basis.
a) Provision
for legal proceedings
The Company has
considered all information available to assess the likelihood of an outflow of resources and in the preparation on the estimate of the
costs that may be required to settle the obligations.
Tax
litigations - Mainly refers to the lawsuit filed in 2011 by Valepar (merged
by Vale) seeking the right to exclude the amount of dividends received in the form of interest on capital (“JCP”) from the
PIS and COFINS tax base. The amount reserved for this proceeding as of September 30, 2022 is R$2,345 (US$434 million) (2021: R$2,243
(US$402 million)). This proceeding is guaranteed by a judicial deposit in the amount of R$2,714 (US$502 as of September 30, 2022) (2021:
R$2,586 (US$463 million)).
Civil
litigations - Refers to lawsuits for: (i) indemnities for losses, payments
and contractual fines due to contractual imbalance or non-compliance that are alleged by suppliers, and (ii) land claims referring to
real estate Vale's operational activities.
Labor
litigations - Refers to lawsuits for individual claims by in-house employees
and service providers, primarily involving demands for additional compensation for overtime work, moral damages or health and safety conditions.
Environmental
litigations - Refers mainly to proceedings for environmental damages and issues
related to environmental licensing.
|
|
Consolidated |
|
|
Tax litigation |
|
Civil litigation |
|
Labor litigation |
|
Environmental litigation |
|
Total of litigation provision |
Balance at December 31, 2021 |
|
2,542 |
|
1,579 |
|
2,000 |
|
42 |
|
6,163 |
Additions and reversals, net (note 5) |
|
16 |
|
198 |
|
251 |
|
29 |
|
494 |
Payments |
|
(5) |
|
(266) |
|
(221) |
|
(3) |
|
(495) |
Indexation and interest |
|
111 |
|
140 |
|
66 |
|
1 |
|
318 |
Transfer to held for sale (note 14) |
|
(4) |
|
(39) |
|
(8) |
|
- |
|
(51) |
Balance at September 30, 2022 |
|
2,660 |
|
1,612 |
|
2,088 |
|
69 |
|
6,429 |
Current liabilities |
|
81 |
|
121 |
|
330 |
|
11 |
|
543 |
Non-current liabilities |
|
2,579 |
|
1,491 |
|
1,758 |
|
58 |
|
5,886 |
|
|
2,660 |
|
1,612 |
|
2,088 |
|
69 |
|
6,429 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
|
|
Consolidated |
|
|
Tax litigation |
|
Civil litigation |
|
Labor litigation |
|
Environmental litigation |
|
Total of litigation provision |
Balance at December 31, 2020 |
|
2,520 |
|
1,354 |
|
1,741 |
|
56 |
|
5,671 |
Additions and reversals, net (note 5) |
|
(5) |
|
23 |
|
333 |
|
5 |
|
356 |
Payments |
|
(25) |
|
(112) |
|
(216) |
|
(21) |
|
(374) |
Acquisition of NLC (note 14) |
|
- |
|
11 |
|
38 |
|
- |
|
49 |
Indexation and interest |
|
30 |
|
115 |
|
147 |
|
1 |
|
293 |
Translation adjustment |
|
- |
|
1 |
|
3 |
|
- |
|
4 |
Balance at September 30, 2021 |
|
2,520 |
|
1,392 |
|
2,046 |
|
41 |
|
5,999 |
Current liabilities |
|
38 |
|
84 |
|
311 |
|
1 |
|
434 |
Non-current liabilities |
|
2,482 |
|
1,308 |
|
1,735 |
|
40 |
|
5,565 |
|
|
2,520 |
|
1,392 |
|
2,046 |
|
41 |
|
5,999 |
b) Contingent
liabilities
|
|
Consolidated |
|
|
September 30, 2022 |
|
December 31, 2021 |
Tax litigations |
|
33,985 |
|
28,891 |
Civil litigations |
|
6,465 |
|
8,384 |
Labor litigations |
|
2,969 |
|
2,882 |
Environmental litigations |
|
5,570 |
|
5,322 |
Total |
|
48,989 |
|
45,479 |
In addition, as
reported in the financial statements for the year ended December 31, 2021, the Company is a counterparty in several actions and the main
updates on contingent liabilities since then, are discussed as follows:
(b.i) Tax
proceedings - PIS/COFINS
The Company is
a party to several collections related to the alleged improper use of PIS and COFINS credits (federal taxes levied on the companies' gross
revenue). Brazilian tax legislation authorizes taxpayers to use PIS and COFINS tax credits, such as those referring to the acquisition
of inputs for the production process and other items. The tax authorities mainly claim that (i) some credits were not related to the production
process, and (ii) the right to use the tax credits was not adequately proven. During 2022 the Company received new proceedings in the
amount of R$2.862 (US$529 million), for which the likelihood of loss is deemed possible.
(b.ii) Tax
proceedings - Value added tax on services and circulation of goods (“ICMS”)
Vale is engaged
in several administrative and court proceedings relating to additional charges of ICMS by the tax authorities of different Brazilian states.
In each of these proceedings, the tax authorities claim that (i) use of undue tax credit; (ii) failing to comply with certain accessory
obligations; (iii) the Company is required to pay the ICMS on acquisition of electricity (iv) operations related to the collection of
tax rate differential (“DIFAL”) and (v) incidence of ICMS on its own transportation. During 2022, the Company received new
proceedings in the amount of R$453 (US$84 million), for which the likelihood of loss is deemed possible.
c) Judicial deposits
|
|
Consolidated |
|
|
September 30, 2022 |
|
December 31, 2021 |
Tax litigations |
|
5,452 |
|
5,341 |
Civil litigations |
|
742 |
|
559 |
Labor litigations |
|
709 |
|
783 |
Environmental litigations |
|
65 |
|
125 |
Total |
|
6,968 |
|
6,808 |
d) Guarantees contracted for legal
proceedings
In addition to the above-mentioned tax, civil, labor
and environmental judicial deposits, the Company contracted R$11,792 (US$2,181 million) in guarantees for its lawsuits, as an alternative
to judicial deposits.
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
26. Employee
post-retirement obligations
a)
Long-term incentive programs
The Company has long-term reward mechanisms that
include the Matching program and the Performance Shares Units (“PSU”) for eligible executives to retain and stimulate their
performance.
On March 30, 2022, a new cycle of the Matching program
started and the fair value was calculated on the Company's share price and their respective ADRs at the grant date, which was R$95.87
and US$20.03 per share. The Company will grant 1,437,588 shares for the new cycle (2021: 1,046,255 shares).
During the third quarter of 2022, a new cycle of
the PSU program has started and the Company will grant 1,709,955 shares (2021: 1,474,723 shares). The fair value was calculated based
on the performance factor using Monte Carlo simulations for the Return to Shareholders Indicator and health and safety and sustainability
indicators. The assumptions used for the Monte Carlo simulations are shown in the table below, as well as the result used to calculate
the expected value of the total performance factor.
PSU |
|
2022 |
Granted shares |
|
1,709,955 |
Date shares were granted |
|
1/3/2022 |
VALE (BRL) |
|
78.00 |
VALE ON (USD) |
|
13.81 |
Expected volatility |
|
39.00%p.y. |
Expected term (in years) |
|
3 |
Expected shareholder return indicator |
|
51.20% |
Expected performance factor |
|
53.08% |
|
|
|
The fair value of the program will be recognized
on a straight-line basis over the required three-year period of service, net of estimated losses.
b)
Reconciliation of assets and liabilities recognized in the balance sheet
|
|
Consolidated |
|
|
September 30, 2022 |
|
December 31, 2021 |
|
|
Overfunded pension plans |
|
Underfunded pension plans |
|
Other benefits |
|
Overfunded pension plans |
|
Underfunded pension plans |
|
Other benefits |
Balance at beginning of the period |
|
5,135 |
|
- |
|
- |
|
4,488 |
|
- |
|
- |
Interest income |
|
266 |
|
- |
|
- |
|
313 |
|
- |
|
- |
Changes on asset ceiling |
|
1,305 |
|
- |
|
- |
|
326 |
|
- |
|
- |
Translation adjustment |
|
32 |
|
- |
|
- |
|
8 |
|
- |
|
- |
Balance at end of the period |
|
6,738 |
|
- |
|
- |
|
5,135 |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount recognized in the balance sheet |
|
|
|
|
|
|
|
|
|
|
|
|
Present value of actuarial liabilities |
|
(26,717) |
|
(3,203) |
|
(5,886) |
|
(15,808) |
|
(22,228) |
|
(7,967) |
Fair value of assets |
|
33,455 |
|
1,713 |
|
- |
|
20,943 |
|
21,086 |
|
- |
Effect of the asset ceiling |
|
(6,738) |
|
|
|
- |
|
(5,135) |
|
- |
|
- |
Liabilities |
|
- |
|
(1,490) |
|
(5,886) |
|
- |
|
(1,142) |
|
(7,967) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
- |
|
(220) |
|
(345) |
|
- |
|
(266) |
|
(287) |
Non-current liabilities |
|
- |
|
(1,270) |
|
(5,541) |
|
- |
|
(876) |
|
(7,680) |
Liabilities |
|
- |
|
(1,490) |
|
(5,886) |
|
- |
|
(1,142) |
|
(7,967) |
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
27. Stockholders’
equity
a) Share capital
As of September 30, 2022, the share capital was R$77.300 (US$61,614
million) corresponding to 4.778.889.263 shares issued and fully paid without par value.
|
|
September 30, 2022 |
|
|
Common shares |
|
Golden shares |
|
Total |
Shareholders with more than 5% of total capital |
|
1,317,200,871 |
|
- |
|
1,317,200,871 |
Previ |
|
408,743,556 |
|
- |
|
408,743,556 |
Capital World Investors |
|
319,508,101 |
|
- |
|
319,508,101 |
Blackrock, Inc |
|
302,602,159 |
|
- |
|
302,602,159 |
Mitsui&co |
|
286,347,055 |
|
- |
|
286,347,055 |
Free floating |
|
3,225,390,427 |
|
- |
|
3,225,390,427 |
Golden shares |
|
- |
|
12 |
|
12 |
Total outstanding (without shares in treasury) |
|
4,542,591,298 |
|
12 |
|
4,542,591,310 |
Shares in treasury |
|
236,297,953 |
|
- |
|
236,297,953 |
Total capital |
|
4,778,889,251 |
|
12 |
|
4,778,889,263 |
The information presented above is based on communications
sent by stockholders pursuant to Instruction 358 issued by the Brazilian Securities Exchange Commission (“CVM”).
b) Cancellation of treasury shares
| · | On
February 24, 2022, the Board of Directors approved the cancellation of 133,418,347 common shares issued by the Company and held in treasury,
without reducing the value of its share capital. The effect of R$14,589 (US$2,830 million) was recorded in shareholders' equity as “Treasury
shares used and cancelled”. |
| · | On
July 28, 2022, the Board of Directors approved the cancellation of 220,150,800 common shares issued by the Company and held in treasury,
without reducing the value of its share capital. The effect of R$19,466 (US$3,786 million) was recorded in shareholders' equity as “Treasury
shares used and cancelled”. |
| · | On
September
16, 2021, the Board of Directors approved the cancellation of 152,016,372 common shares of the Company acquired in previous buyback programs
and held in treasury, without reducing its capital stock. The effect of R$6,347 (US$2,401 million) was recorded in shareholders' equity
as “Treasury shares used and cancelled”. |
c) Remuneration approved
| · | On
February 24, 2022, the Board of Directors approved the remuneration to shareholders in the amount of R$17,849 (US$3,500 million), which
was fully paid on March 16, 2022. |
| · | On
July 28, 2022, the Board of Directors approved the remuneration to shareholders in the amount of R$16,243 (US$3,000 million) which was
fully paid on September 1, 2022. |
| · | On
February 25, 2021, based on the Company’s dividends policy, the Board of Directors approved the remuneration to shareholders in
the amount of R$21,866 (US$3,972 million), which was fully paid on March 15, 2021. |
| · | On
June 17, 2021, the Board of Directors approved an additional remuneration to shareholders in the amount of R$11,046 (US$2,200 million),
which was fully paid on June 30, 2021. |
| · | On
September 16, 2021, the Board of Directors approved the stockholder’s remuneration in the total amount of R$40,200 (US$7,391 million),
which was fully paid on September 30, 2021. |
d) Share buyback
| · | On
May 16, 2022, the Company reached the approved limit for the buyback program of up to 470,000,000 shares. Of this amount, 178,815,500 common
shares and their respective ADRs were repurchased in 2022, corresponding R$16,225 (US$3,251 million), of which R$8,758
(US$1,750 million) were acquired through wholly owned subsidiaries and R$7,467 (US$1,501 million) by the Parent Company. |
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
| · | On
May 16, 2022, the Company started a new share buyback program to repurchase 500,000,000 common shares and their respective ADRs over the
next 18 months. During the nine-month period ended September 30, 2022, the Company repurchased 119,114,479 common shares and their respective
ADRs, corresponding to R$9,339 (US$1,819 million), of which R$4,957 (US$964 million) were acquired through wholly owned subsidiaries and
R$4,382 (US$855 million) by the Parent Company. |
| · | As
of September 30, 2022, the Company hold 236,297,953 shares, being 125,456,849 through its wholly owned subsidiaries and 110,841,104 directly
by the Parent Company, of which R$10,610 (US$2,127 million) through its wholly owned subsidiaries and R$9,991 (US$1,887 million) million
by the Parent Company. |
| · | During
the nine-month period ended September 30, 2021, the Company repurchased 238,860,947 common shares at an average cost of US$20.28 per share
(R$105.76 per share), being 99,842,600 through wholly owned subsidiaries and 139,018,347 directly by the parent company. The amount acquired
was R$25,261 (US$4,845 million), being R$9,687 (US$1,837 million) through wholly owned subsidiaries and R$15,574 (US$3,008 million) by
the Parent Company. |
28. Related
parties
The Company’s
related parties are subsidiaries, joint ventures, associates, stockholders and its related entities and key management personnel of the
Company.
Related party transactions
were made by the Company on terms equivalent to those that prevail in arm´s-length transactions, with respect to price and market
conditions that are no less favorable to the Company than those arranged with third parties.
Net operating revenue
relates to sale of iron ore to the steelmakers and right to use capacity on railroads. Cost and operating expenses mostly relates to the
variable lease payments of the pelletizing plants.
Purchases, accounts
receivable and other assets, and accounts payable and other liabilities relate largely to amounts charged by joint ventures and associates
related to the pelletizing plants operational lease and railway transportation services.
a) Transactions
with related parties
|
|
Consolidated |
|
|
Three-month period ended September 30, |
|
|
2022 |
|
2021 |
|
|
Net operating revenue |
|
Cost and operating expenses |
|
Financial results |
|
Net operating revenue |
|
Cost and operating expenses |
|
Financial results |
Joint ventures |
|
543 |
|
(1,433) |
|
(33) |
|
927 |
|
(1,466) |
|
(5) |
Companhia Siderúrgica do Pecém |
|
482 |
|
- |
|
7 |
|
927 |
|
- |
|
17 |
Aliança Geração de Energia S.A. |
|
- |
|
(181) |
|
- |
|
- |
|
(153) |
|
- |
Pelletizing companies (i) |
|
- |
|
(429) |
|
(39) |
|
- |
|
(672) |
|
(20) |
MRS Logística S.A. |
|
2 |
|
(616) |
|
- |
|
- |
|
(449) |
|
- |
Norte Energia S.A. |
|
- |
|
(195) |
|
- |
|
- |
|
(176) |
|
- |
Other |
|
59 |
|
(12) |
|
(1) |
|
- |
|
(16) |
|
(2) |
Associates |
|
384 |
|
(45) |
|
(11) |
|
359 |
|
(30) |
|
(3) |
VLI |
|
381 |
|
(43) |
|
(3) |
|
358 |
|
(30) |
|
(3) |
Other |
|
3 |
|
(2) |
|
(8) |
|
1 |
|
- |
|
- |
Major stockholders |
|
355 |
|
- |
|
461 |
|
271 |
|
- |
|
(592) |
Bradesco |
|
- |
|
- |
|
459 |
|
- |
|
- |
|
(597) |
Mitsui |
|
355 |
|
- |
|
- |
|
271 |
|
- |
|
- |
Banco do Brasil |
|
- |
|
- |
|
2 |
|
- |
|
- |
|
5 |
Total of continuing operations |
|
1,282 |
|
(1,478) |
|
417 |
|
1,557 |
|
(1,496) |
|
(600) |
Discontinued operation - Coal (note 14) |
|
- |
|
- |
|
- |
|
- |
|
- |
|
1 |
Total |
|
1,282 |
|
(1,478) |
|
417 |
|
1,557 |
|
(1,496) |
|
(599) |
(i) Aggregated entities: Companhia Coreano-Brasileira
de Pelotização, Companhia Hispano-Brasileira de Pelotização, Companhia Ítalo-Brasileira de Pelotização
and Companhia Nipo-Brasileira de Pelotização.
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
|
|
Consolidated |
|
|
Nine-month period ended September 30, |
|
|
2022 |
|
2021 |
|
|
Net operating revenue |
|
Cost and operating expenses |
|
Financial results |
|
Net operating revenue |
|
Cost and operating expenses |
|
Financial results |
Joint ventures |
|
1,934 |
|
(3,770) |
|
(148) |
|
2,750 |
|
(3,221) |
|
(48) |
Companhia Siderúrgica do Pecém |
|
1,771 |
|
- |
|
(6) |
|
2,750 |
|
- |
|
9 |
Aliança Geração de Energia S.A. |
|
- |
|
(449) |
|
- |
|
- |
|
(425) |
|
- |
Pelletizing companies (i) |
|
- |
|
(1,272) |
|
(141) |
|
- |
|
(1,148) |
|
(55) |
MRS Logística S.A. |
|
5 |
|
(1,508) |
|
- |
|
- |
|
(1,142) |
|
- |
Norte Energia S.A. |
|
- |
|
(512) |
|
- |
|
- |
|
(467) |
|
- |
Other |
|
158 |
|
(29) |
|
(1) |
|
- |
|
(39) |
|
(2) |
Associates |
|
1,122 |
|
(108) |
|
(17) |
|
1,042 |
|
(80) |
|
(10) |
VLI |
|
1,116 |
|
(106) |
|
(9) |
|
1,038 |
|
(80) |
|
(10) |
Other |
|
6 |
|
(2) |
|
(8) |
|
4 |
|
- |
|
- |
Major stockholders |
|
1,143 |
|
- |
|
1,449 |
|
882 |
|
- |
|
(145) |
Bradesco |
|
- |
|
- |
|
1,444 |
|
- |
|
- |
|
(160) |
Mitsui |
|
1,143 |
|
- |
|
- |
|
882 |
|
- |
|
- |
Banco do Brasil |
|
- |
|
- |
|
5 |
|
- |
|
- |
|
15 |
Total of continuing operations |
|
4,199 |
|
(3,878) |
|
1,284 |
|
4,674 |
|
(3,301) |
|
(203) |
Discontinued operation - Coal (note 14) |
|
- |
|
- |
|
- |
|
- |
|
(518) |
|
82 |
Total |
|
4,199 |
|
(3,878) |
|
1,284 |
|
4,674 |
|
(3,819) |
|
(121) |
(i) Aggregated entities: Companhia Coreano-Brasileira
de Pelotização, Companhia Hispano-Brasileira de Pelotização, Companhia Ítalo-Brasileira de Pelotização
and Companhia Nipo-Brasileira de Pelotização.
b) Outstanding balances with related
parties
|
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
September 30, 2022 |
|
December 31, 2021 |
|
|
Cash and cash equivalents |
|
Accounts receivable |
|
Dividends receivable, financial instruments and other assets |
|
Cash and cash equivalents |
|
Accounts receivable |
|
Dividends receivable, financial instruments and other assets |
Joint ventures |
|
- |
|
522 |
|
194 |
|
- |
|
419 |
|
536 |
Companhia Siderúrgica do Pecém |
|
- |
|
498 |
|
92 |
|
- |
|
414 |
|
219 |
Pelletizing companies (i) |
|
- |
|
- |
|
- |
|
- |
|
- |
|
208 |
MRS Logística S.A. |
|
- |
|
- |
|
102 |
|
- |
|
- |
|
105 |
Other |
|
- |
|
24 |
|
- |
|
- |
|
5 |
|
4 |
Associates |
|
- |
|
115 |
|
95 |
|
- |
|
102 |
|
17 |
VLI |
|
- |
|
95 |
|
- |
|
- |
|
87 |
|
- |
Other |
|
- |
|
20 |
|
95 |
|
- |
|
15 |
|
17 |
Major stockholders |
|
2,601 |
|
13 |
|
378 |
|
10,184 |
|
23 |
|
28 |
Bradesco |
|
2,406 |
|
- |
|
378 |
|
9,744 |
|
- |
|
28 |
Mitsui |
|
- |
|
13 |
|
- |
|
- |
|
23 |
|
- |
Banco do Brasil |
|
195 |
|
- |
|
- |
|
440 |
|
- |
|
- |
Pension plan |
|
- |
|
78 |
|
- |
|
- |
|
64 |
|
- |
Total |
|
2,601 |
|
728 |
|
667 |
|
10,184 |
|
608 |
|
581 |
(i) Aggregated entities: Companhia Coreano-Brasileira
de Pelotização, Companhia Hispano-Brasileira de Pelotização, Companhia Ítalo-Brasileira de Pelotização
and Companhia Nipo-Brasileira de Pelotização.
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
|
|
Consolidated |
|
|
|
|
|
|
Liabilities |
|
|
September 30, 2022 |
|
December 31, 2021 |
|
|
Supplier and contractors |
|
Financial instruments and other liabilities |
|
Supplier and contractors |
|
Financial instruments and other liabilities |
Joint ventures |
|
1,837 |
|
734 |
|
388 |
|
2,192 |
Pelletizing companies (i) |
|
1,444 |
|
734 |
|
73 |
|
2,192 |
MRS Logística S.A. |
|
220 |
|
- |
|
228 |
|
- |
Other |
|
173 |
|
- |
|
87 |
|
- |
Associates |
|
43 |
|
475 |
|
57 |
|
262 |
VLI |
|
31 |
|
475 |
|
32 |
|
262 |
Other |
|
12 |
|
- |
|
25 |
|
- |
Major stockholders |
|
7 |
|
627 |
|
9 |
|
1,479 |
Bradesco |
|
- |
|
627 |
|
- |
|
1,479 |
Mitsui |
|
7 |
|
- |
|
9 |
|
- |
Pension plan |
|
46 |
|
- |
|
54 |
|
- |
Total |
|
1,933 |
|
1,836 |
|
508 |
|
3,933 |
(i) Aggregated entities: Companhia Coreano-Brasileira
de Pelotização, Companhia Hispano-Brasileira de Pelotização, Companhia Ítalo-Brasileira de Pelotização
and Companhia Nipo-Brasileira de Pelotização.
| 29. | Parent Company information (individual interim information) |
a) Income tax reconciliation
|
|
Parent Company |
|
|
Nine-month period ended September 30, |
|
|
2022 |
|
2021 |
Income before income taxes |
|
92,669 |
|
114,258 |
Income taxes at statutory rate – 34% |
|
(31,507) |
|
(38,848) |
Adjustments that affect the basis of taxes: |
|
|
|
|
Tax incentives |
|
7,418 |
|
13,005 |
Equity results |
|
10,555 |
|
(467) |
Others |
|
(2,770) |
|
2,914 |
Income taxes |
|
(16,304) |
|
(23,396) |
b) Accounts
receivable
|
|
Parent Company |
|
|
September 30, 2022 |
|
December 31, 2021 |
Receivables from customer contracts |
|
|
|
|
Related parties |
|
50,225 |
|
46,044 |
Third parties |
|
|
|
|
Ferrous minerals |
|
1,085 |
|
1,897 |
Base metals |
|
7 |
|
9 |
Others |
|
39 |
|
23 |
Accounts receivable |
|
51,356 |
|
47,973 |
Expected credit loss |
|
(57) |
|
(61) |
Accounts receivable, net |
|
51,299 |
|
47,912 |
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
c) Other
financial assets and liabilities
|
|
Parent Company |
|
|
Current |
|
Non-Current |
|
|
September 30, 2022 |
|
December 31, 2021 |
|
September 30, 2022 |
|
December 31, 2021 |
Other financial assets |
|
|
|
|
|
|
|
|
Restricted cash |
|
- |
|
- |
|
24 |
|
358 |
Derivative financial instruments |
|
336 |
|
410 |
|
656 |
|
46 |
Investments in equity securities |
|
- |
|
- |
|
32 |
|
33 |
Related parties - Loans |
|
- |
|
- |
|
48 |
|
43 |
|
|
336 |
|
410 |
|
760 |
|
480 |
Other financial liabilities |
|
|
|
|
|
|
|
|
Derivative financial instruments |
|
282 |
|
879 |
|
1,243 |
|
3,042 |
Related parties - Loans |
|
21,885 |
|
4,574 |
|
55,356 |
|
81,551 |
Related parties - Other financial liabilities |
|
2,720 |
|
2,235 |
|
- |
|
- |
Financial guarantees |
|
- |
|
- |
|
546 |
|
3,026 |
Liabilities related to the concession grant |
|
3,749 |
|
4,241 |
|
8,520 |
|
8,017 |
Contract liability |
|
24 |
|
25 |
|
- |
|
- |
|
|
28,660 |
|
11,954 |
|
65,665 |
|
95,636 |
d) Investments
|
|
Parent Company |
|
|
2022 |
|
2021 |
Balance at January 1st, |
|
143,640 |
|
181,319 |
Additions |
|
939 |
|
598 |
Capitalizations |
|
- |
|
2,194 |
Disposals |
|
(210) |
|
- |
Sale of Midwestern System (note 14) |
|
(1,399) |
|
- |
Translation adjustment |
|
(32,168) |
|
(3,477) |
Equity results in income statement |
|
28,662 |
|
(2,944) |
Equity results and other results in associates and joint ventures |
|
2,381 |
|
1,574 |
Equity results in statement of comprehensive income |
|
1,054 |
|
2,500 |
Equity results in statement of noncontrolling |
|
- |
|
(1,600) |
Dividends declared |
|
(10,165) |
|
(1,453) |
Share buyback by subsidiaries |
|
(13,716) |
|
(9,687) |
Impairment of investments |
|
(553) |
|
(338) |
Mergers (i) |
|
(2,002) |
|
(3,546) |
Share-based payment |
|
17 |
|
2 |
Others |
|
(1,498) |
|
(1,067) |
Balance at September 30, |
|
114,982 |
|
164,075 |
(i) On April 29,
2022, the General Meeting approved the merger of New Steel into Vale S.A. The merger did not result in the issuance of new shares or changed
Vale's share capital, and the respective net assets were incorporated. On April 30, 2021, the Company approved the merger of the spin-off
net assets of Minerações Brasileiras Reunidas S.A. and the full merger of Companhia Paulista de Ferroligas and Valesul Alumínio
S.A. The merger did not result in the issuance of new shares or changed Vale's share capital, and the respective net assets were incorporated.
e) Intangible
|
|
Parent Company |
|
|
Concessions |
|
|
Software |
|
Research and development project and patents |
|
Total |
Balance at December 31, 2021 |
|
29,149 |
|
|
291 |
|
- |
|
29,440 |
Additions |
|
2,294 |
|
|
99 |
|
- |
|
2,393 |
Disposals |
|
(62) |
|
|
- |
|
- |
|
(62) |
Amortization |
|
(896) |
|
|
(88) |
|
- |
|
(984) |
Merger of New Steel |
|
- |
|
|
- |
|
2,754 |
|
2,754 |
Balance at September 30, 2022 |
|
30,485 |
|
|
302 |
|
2,754 |
|
33,541 |
Cost |
|
37,412 |
|
|
1,570 |
|
2,754 |
|
41,736 |
Accumulated amortization |
|
(6,927) |
|
|
(1,268) |
|
- |
|
(8,195) |
Balance at September 30, 2022 |
|
30,485 |
|
|
302 |
|
2,754 |
|
33,541 |
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
|
|
Parent Company |
|
|
Concessions |
|
|
Software |
|
Research and development project and patents |
|
Total |
Balance at December 31, 2020 |
|
28,015 |
|
|
228 |
|
- |
|
28,243 |
Additions |
|
555 |
|
|
79 |
|
- |
|
634 |
Disposals |
|
(41) |
|
|
- |
|
- |
|
(41) |
Amortization |
|
(868) |
|
|
(60) |
|
- |
|
(928) |
Balance at September 30, 2021 |
|
27,661 |
|
|
247 |
|
- |
|
27,908 |
Cost |
|
33,602 |
|
|
2,703 |
|
- |
|
36,305 |
Accumulated amortization |
|
(5,941) |
|
|
(2,456) |
|
- |
|
(8,397) |
Balance at September 30, 2021 |
|
27,661 |
|
|
247 |
|
- |
|
27,908 |
f) Property,
plant and equipment
|
|
Parent Company |
|
|
Building
and land |
|
Facilities |
|
Equipment |
|
Mineral properties |
|
Railway
equipment |
|
Right of
use assets |
|
Others |
|
Constructions in progress |
|
Total |
Balance at December 31, 2021 |
|
29,235 |
|
31,458 |
|
11,188 |
|
9,236 |
|
12,653 |
|
1,659 |
|
7,543 |
|
20,987 |
|
123,959 |
Additions (i) |
|
- |
|
- |
|
- |
|
- |
|
- |
|
177 |
|
- |
|
12,503 |
|
12,680 |
Disposals |
|
(83) |
|
(42) |
|
(8) |
|
- |
|
(38) |
|
(9) |
|
(7) |
|
(251) |
|
(438) |
Assets retirement obligation |
|
- |
|
- |
|
- |
|
23 |
|
- |
|
- |
|
- |
|
- |
|
23 |
Depreciation, amortization and depletion |
|
(899) |
|
(1,276) |
|
(1,222) |
|
(493) |
|
(586) |
|
(281) |
|
(924) |
|
|
|
(5,681) |
Merger of New Steel |
|
11 |
|
2 |
|
11 |
|
- |
|
- |
|
- |
|
7 |
|
17 |
|
48 |
Transfers |
|
1,418 |
|
2,037 |
|
1,516 |
|
(27) |
|
608 |
|
(3) |
|
1,411 |
|
(6,960) |
|
- |
Balance at September 30, 2022 |
|
29,682 |
|
32,179 |
|
11,485 |
|
8,739 |
|
12,637 |
|
1,543 |
|
8,030 |
|
26,296 |
|
130,591 |
Cost |
|
42,891 |
|
47,202 |
|
24,144 |
|
13,314 |
|
20,471 |
|
2,689 |
|
18,039 |
|
26,296 |
|
195,046 |
Accumulated depreciation |
|
(13,209) |
|
(15,023) |
|
(12,659) |
|
(4,575) |
|
(7,834) |
|
(1,146) |
|
(10,009) |
|
- |
|
(64,455) |
Balance at September 30, 2022 |
|
29,682 |
|
32,179 |
|
11,485 |
|
8,739 |
|
12,637 |
|
1,543 |
|
8,030 |
|
26,296 |
|
130,591 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent Company |
|
|
Building
and land |
|
Facilities |
|
Equipment |
|
Mineral properties |
|
Railway
equipment |
|
Right of
use assets |
|
Others |
|
Constructions in progress |
|
Total |
Balance at December 31, 2020 |
|
28,299 |
|
30,567 |
|
10,232 |
|
9,016 |
|
12,713 |
|
2,115 |
|
7,065 |
|
11,331 |
|
111,338 |
Additions (i) |
|
- |
|
- |
|
- |
|
- |
|
- |
|
201 |
|
- |
|
11,255 |
|
11,456 |
Disposals |
|
(1) |
|
(20) |
|
(33) |
|
- |
|
(29) |
|
(1,010) |
|
(2) |
|
(265) |
|
(1,360) |
Assets retirement obligation |
|
- |
|
- |
|
- |
|
(683) |
|
- |
|
- |
|
- |
|
- |
|
(683) |
Depreciation, amortization and depletion |
|
(1,030) |
|
(1,238) |
|
(1,157) |
|
(524) |
|
(599) |
|
(116) |
|
(814) |
|
- |
|
(5,478) |
Merger of MBR |
|
434 |
|
293 |
|
277 |
|
641 |
|
25 |
|
- |
|
104 |
|
1,226 |
|
3,000 |
Transfers |
|
981 |
|
1,393 |
|
1,943 |
|
474 |
|
408 |
|
- |
|
1,033 |
|
(6,232) |
|
- |
Balance at September 30, 2021 |
|
28,683 |
|
30,995 |
|
11,262 |
|
8,924 |
|
12,518 |
|
1,190 |
|
7,386 |
|
17,315 |
|
118,273 |
Cost |
|
40,649 |
|
44,309 |
|
22,545 |
|
12,834 |
|
19,583 |
|
1,964 |
|
16,773 |
|
17,315 |
|
175,972 |
Accumulated depreciation |
|
(11,966) |
|
(13,314) |
|
(11,283) |
|
(3,910) |
|
(7,065) |
|
(774) |
|
(9,387) |
|
- |
|
(57,699) |
Balance at Setembro 30, 2021 |
|
28,683 |
|
30,995 |
|
11,262 |
|
8,924 |
|
12,518 |
|
1,190 |
|
7,386 |
|
17,315 |
|
118,273 |
(i) Includes capitalized borrowing costs.
g) Loans
and borrowings
|
|
|
|
Parent Company |
|
|
|
|
Current liabilities |
|
Non-current liabilities |
|
|
Average interest rate |
|
September 30, 2022 |
|
December 31, 2021 |
|
September 30, 2022 |
|
December 31, 2021 |
Quoted in the secondary market: |
|
|
|
|
|
|
|
|
|
|
Bonds |
|
6.00% |
|
- |
|
- |
|
2,656 |
|
2,904 |
R$, Debentures |
|
9.96% |
|
243 |
|
1,037 |
|
1,027 |
|
1,122 |
Debt contracts in Brazil in: |
|
|
|
|
|
|
|
|
|
|
R$, indexed to TJLP, TR, IPCA, IGP-M and CDI |
|
10.83% |
|
237 |
|
532 |
|
1,265 |
|
1,444 |
R$, with fixed interest |
|
3.04% |
|
10 |
|
63 |
|
- |
|
8 |
Basket of currencies and bonds in US$ indexed to LIBOR |
|
- |
|
- |
|
62 |
|
- |
|
- |
Debt contracts in the international market in: |
|
|
|
|
|
|
|
|
|
|
US$, with variable interest |
|
4.20% |
|
- |
|
698 |
|
9,303 |
|
9,600 |
Other, with variable interest |
|
4.09% |
|
- |
|
432 |
|
49 |
|
57 |
Accrued charges |
|
|
|
107 |
|
191 |
|
- |
|
- |
Total |
|
|
|
597 |
|
3,015 |
|
14,300 |
|
15,135 |
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
The future flows
of debt payments (principal) are as follows:
|
|
|
|
Parent Company |
|
|
Debt principal |
2022 |
|
126 |
2023 |
|
489 |
2024 |
|
3,215 |
2025 |
|
732 |
Between 2026 and 2030 |
|
5,198 |
2031 onwards |
|
5,030 |
|
|
14,790 |
h) Transactions
with related parties
|
|
Parent Company |
|
|
Three-month period ended September 30, |
|
|
2022 |
|
2021 |
|
|
Net operating revenue |
|
Cost and operating expenses |
|
Financial results |
|
Net operating revenue |
|
Cost and operating expenses |
|
Financial results |
Subsidiaries |
|
34,249 |
|
(180) |
|
104 |
|
64,714 |
|
(422) |
|
619 |
Vale International |
|
34,194 |
|
- |
|
160 |
|
64,672 |
|
- |
|
633 |
Others |
|
55 |
|
(180) |
|
(56) |
|
42 |
|
(422) |
|
(14) |
Joint ventures |
|
546 |
|
(1,435) |
|
(6) |
|
918 |
|
(1,465) |
|
6 |
Companhia Siderúrgica do Pecém |
|
482 |
|
- |
|
7 |
|
918 |
|
- |
|
17 |
Aliança Geração de Energia S.A. |
|
- |
|
(181) |
|
- |
|
- |
|
(153) |
|
- |
Pelletizing companies (i) |
|
- |
|
(430) |
|
(13) |
|
- |
|
(672) |
|
(9) |
MRS Logística S.A. |
|
5 |
|
(616) |
|
- |
|
- |
|
(449) |
|
- |
Norte Energia S.A. |
|
- |
|
(195) |
|
- |
|
- |
|
(176) |
|
- |
Others |
|
59 |
|
(13) |
|
- |
|
- |
|
(15) |
|
(2) |
Associates |
|
382 |
|
(43) |
|
(12) |
|
359 |
|
(30) |
|
(3) |
VLI |
|
381 |
|
(43) |
|
(3) |
|
358 |
|
(30) |
|
(3) |
Others |
|
1 |
|
- |
|
(9) |
|
1 |
|
- |
|
- |
Major stockholders |
|
- |
|
- |
|
442 |
|
- |
|
- |
|
(613) |
Bradesco |
|
- |
|
- |
|
441 |
|
- |
|
- |
|
(613) |
Banco do Brasil |
|
- |
|
- |
|
1 |
|
- |
|
- |
|
- |
Total |
|
35,177 |
|
(1,658) |
|
528 |
|
65,991 |
|
(1,917) |
|
9 |
(i) Aggregated entities: Companhia Coreano-Brasileira
de Pelotização, Companhia Hispano-Brasileira de Pelotização, Companhia Ítalo-Brasileira de Pelotização
and Companhia Nipo-Brasileira de Pelotização.
|
|
Parent Company |
|
|
Nine-month period ended September 30, |
|
|
2022 |
|
2021 |
|
|
Net operating revenue |
|
Cost and operating expenses |
|
Financial results |
|
Net operating revenue |
|
Cost and operating expenses |
|
Financial results |
Subsidiaries |
|
94,573 |
|
(614) |
|
(3,357) |
|
156,608 |
|
(2,212) |
|
(1,183) |
Vale International |
|
94,405 |
|
- |
|
(3,291) |
|
156,473 |
|
- |
|
(1,147) |
Others |
|
168 |
|
(614) |
|
(66) |
|
135 |
|
(2,212) |
|
(36) |
Joint ventures |
|
1,922 |
|
(3,770) |
|
(40) |
|
2,733 |
|
(3,221) |
|
(22) |
Companhia Siderúrgica do Pecém |
|
1,759 |
|
- |
|
(6) |
|
2,733 |
|
- |
|
9 |
Aliança Geração de Energia S.A. |
|
- |
|
(449) |
|
- |
|
- |
|
(425) |
|
- |
Pelletizing companies (i) |
|
- |
|
(1,272) |
|
(33) |
|
- |
|
(1,148) |
|
(29) |
MRS Logística S.A. |
|
5 |
|
(1,508) |
|
- |
|
- |
|
(1,142) |
|
- |
Norte Energia S.A. |
|
- |
|
(512) |
|
- |
|
- |
|
(467) |
|
- |
Others |
|
158 |
|
(29) |
|
(1) |
|
- |
|
(39) |
|
(2) |
Associates |
|
1,119 |
|
(106) |
|
(17) |
|
1,041 |
|
(80) |
|
(10) |
VLI |
|
1,116 |
|
(106) |
|
(9) |
|
1,038 |
|
(80) |
|
(10) |
Others |
|
3 |
|
- |
|
(8) |
|
3 |
|
- |
|
- |
Major stockholders |
|
- |
|
- |
|
1,392 |
|
- |
|
- |
|
(209) |
Bradesco |
|
- |
|
- |
|
1,389 |
|
- |
|
- |
|
(213) |
Banco do Brasil |
|
- |
|
- |
|
3 |
|
- |
|
- |
|
4 |
Total |
|
97,614 |
|
(4,490) |
|
(2,022) |
|
160,382 |
|
(5,513) |
|
(1,424) |
(i) Aggregated entities: Companhia Coreano-Brasileira
de Pelotização, Companhia Hispano-Brasileira de Pelotização, Companhia Ítalo-Brasileira de Pelotização
and Companhia Nipo-Brasileira de Pelotização.
Notes to the Interim Financial Statements
Expressed in millions of Brazilian reais, unless otherwise stated
i) Outstanding balances with related
parties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent Company |
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
September 30, 2022 |
|
December 31, 2021 |
|
|
Cash and cash equivalents |
|
Accounts receivable |
|
Dividends receivable, financial instruments and other assets |
|
Cash and cash equivalents |
|
Accounts receivable |
|
Dividends receivable, financial instruments and other assets |
Subsidiaries |
|
- |
|
49,513 |
|
3,028 |
|
- |
|
45,475 |
|
1,036 |
Vale International S.A. |
|
- |
|
49,474 |
|
- |
|
- |
|
45,430 |
|
- |
Minerações Brasileiras Reunidas S.A. |
|
- |
|
- |
|
8 |
|
- |
|
- |
|
213 |
Salobo Metais |
|
- |
|
- |
|
2,842 |
|
- |
|
34 |
|
711 |
Other |
|
- |
|
39 |
|
178 |
|
- |
|
11 |
|
112 |
Joint ventures |
|
- |
|
522 |
|
110 |
|
- |
|
403 |
|
449 |
Companhia Siderúrgica do Pecém |
|
- |
|
498 |
|
92 |
|
- |
|
401 |
|
219 |
Pelletizing companies (i) |
|
- |
|
- |
|
- |
|
- |
|
- |
|
208 |
MRS Logística S.A. |
|
- |
|
- |
|
18 |
|
- |
|
- |
|
18 |
Other |
|
- |
|
24 |
|
- |
|
- |
|
2 |
|
4 |
Associates |
|
- |
|
112 |
|
95 |
|
- |
|
102 |
|
17 |
VLI |
|
- |
|
95 |
|
- |
|
- |
|
87 |
|
- |
Other |
|
- |
|
17 |
|
95 |
|
- |
|
15 |
|
17 |
Major stockholders |
|
292 |
|
- |
|
378 |
|
8,355 |
|
- |
|
28 |
Bradesco |
|
281 |
|
- |
|
378 |
|
7,970 |
|
- |
|
28 |
Banco do Brasil |
|
11 |
|
- |
|
- |
|
385 |
|
- |
|
- |
Pension Plan |
|
- |
|
78 |
|
- |
|
- |
|
64 |
|
- |
Total |
|
292 |
|
50,225 |
|
3,611 |
|
8,355 |
|
46,044 |
|
1,530 |
(i) Aggregated entities: Companhia Coreano-Brasileira
de Pelotização, Companhia Hispano-Brasileira de Pelotização, Companhia Ítalo-Brasileira de Pelotização
and Companhia Nipo-Brasileira de Pelotização.
|
Parent Company |
|
|
|
|
|
|
|
Liabilities |
|
September 30, 2022 |
|
December 31, 2021 |
|
Supplier and contractors |
|
Loans |
|
Financial instruments and other liabilities |
|
Supplier and contractors |
|
Loans |
|
Financial instruments and other liabilities |
Subsidiaries |
114 |
|
77,241 |
|
8,031 |
|
135 |
|
86,125 |
|
7,704 |
Vale International S.A. |
- |
|
77,241 |
|
5,209 |
|
- |
|
86,125 |
|
5,367 |
Others |
114 |
|
- |
|
2,822 |
|
135 |
|
- |
|
2,337 |
Joint ventures |
1,837 |
|
- |
|
- |
|
387 |
|
- |
|
- |
Pelletizing companies (i) |
1,444 |
|
- |
|
- |
|
73 |
|
- |
|
- |
MRS Logística S.A. |
220 |
|
- |
|
- |
|
228 |
|
- |
|
- |
Others |
173 |
|
- |
|
- |
|
86 |
|
- |
|
- |
Associates |
34 |
|
- |
|
475 |
|
42 |
|
- |
|
262 |
VLI |
31 |
|
- |
|
475 |
|
32 |
|
- |
|
262 |
Others |
3 |
|
- |
|
- |
|
10 |
|
- |
|
- |
Major stockholders |
7 |
|
- |
|
627 |
|
- |
|
- |
|
1,479 |
Bradesco |
- |
|
- |
|
627 |
|
- |
|
- |
|
1,479 |
Mitsui |
7 |
|
- |
|
- |
|
- |
|
- |
|
- |
Pension plan |
46 |
|
- |
|
- |
|
54 |
|
- |
|
- |
Total |
2,038 |
|
77,241 |
|
9,133 |
|
618 |
|
86,125 |
|
9,445 |
(i) Aggregated entities: Companhia Coreano-Brasileira
de Pelotização, Companhia Hispano-Brasileira de Pelotização, Companhia Ítalo-Brasileira de Pelotização
and Companhia Nipo-Brasileira de Pelotização.
58