Use these links to rapidly review the document
TABLE OF CONTENTS
ContentsTABLE OF CONTENTS

Table of Contents

As filed with the Securities and Exchange Commission on March 31, 201623, 2021

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 20-F

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, 20152020
Commission file number: 001-15030

VALE S.A.
(Exact name of Registrant as specified in its charter)

Federative Republic of Brazil
(Jurisdiction of incorporation or organization)

Luciano Siani Pires, Chief Financial Officer
phone:Phone: +55 21 3814 8888
fax: +55 21 3814 88203485 5000

Avenida das Américas, 700Praia de Botafogo 186 – Bloco 8offices 701 – Loja 3181901 – Botafogo
22640-10022250-145 Rio de Janeiro, RJ, Brazil
(Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Table of Contents

TABLE OF CONTENTS

Page

i

Table of Contents

FORM 20-F CROSS REFERENCECROSS-REFERENCE GUIDE

ii

Table of Contents

Form 20-F cross-reference guide

iii

Table of Contents

I. OVERVIEW

We are one of the largest metals and mining companies in the world, based on market capitalization. We are one of the world's largest producer of iron ore and nickel. We also produce iron ore pellets, manganese ore, ferroalloys, metallurgical and thermal coal, copper, platinum group metals (PGMs), gold, silver and cobalt. We are presently engaged in greenfield mineral exploration in six countries. We operate large logistics systems in Brazil and other regions of the world, including railroads, maritime terminals and ports, which are integrated with our mining operations. In addition, we have a distribution center to support the delivery of iron ore worldwide. Directly and through associates and joint ventures, we also have investments in energy and steel businesses.

In this report, references to "Vale" are to Vale S.A. References to "we," "us" or the "Company" are to Vale and, except where the context otherwise requires, its consolidated subsidiaries. References to our "ADSs" or "American Depositary Shares" are to our common American Depositary Shares (our "common ADSs"), each of which represents one common share of Vale. American Depositary Shares are represented by American Depositary Receipts ("ADRs") issued by the depositary.

Vale S.A. is a stock corporation, or sociedade por ações, that was organized on January 11, 1943 under the laws of the Federative Republic of Brazil for an unlimited period of time. Its head office is located at Praia de Botafogo 186 – offices 701-1901 – Botafogo, 22250-145 Rio de Janeiro, RJ, Brazil, and its telephone number is 55-21-3485-5000.

Unless otherwise specified, we use metric units. References to "real," "reais" or "R$" are to the official currency of Brazil, the real (singular) or reais (plural). References to "U.S. dollars" or "US$" are to United States dollars. References to "€" are to Euros.

​	​	​	​	​
​	​ ​	​ 1	​ ​	​

Table of Contents

BUSINESS OVERVIEW

OPERATIONAL SUMMARY

The following table presents the breakdown of total net operating revenues attributable to each of our lines of business with continuing operations.

Ferrous minerals:

•

Iron ore and iron ore pellets.    We operate four systems in Brazil for producing and distributing iron ore, which we refer to as the Northern, Southeastern, Southern and Midwestern Systems. Each of the Northern and the Southeastern Systems is fully integrated, consisting of mines, railroads, maritime terminals and a port. The Southern System consists of two mining complexes and two maritime terminals. We also have iron ore pellet operations in several locations, some of which are conducted through joint ventures. We currently operate eleven pellet plants in Brazil (three of these plants are currently suspended), and two in Oman. We also have a 50% stake in Samarco Mineração S.A. ("Samarco") and a 25% stake in one pellet company in China.



•

Ferroalloys and manganese.    We conduct our manganese mining operations through Vale S.A. and subsidiaries in Brazil, and we produce several types of manganese ferroalloys through a wholly owned subsidiary in Brazil.



•

Logistics.    We are a leading operator of logistics services in Brazil and other regions of the world, with railroads, maritime terminals, distribution centers and ports. Two of our four iron ore systems include an integrated railroad network linked to port and terminal facilities. We also have an interest in MRS Logistica S.A. ("MRS"), which transports our iron ore products from the Southern System mines to our maritime terminals, and VLI S.A. ("VLI"), which provides integrated logistics solutions to general cargo through railroads, inland and maritime terminals in Brazil. We also charter dry bulk vessels to transport the products that we sell on a cost and freight ("CFR") basis to our customers.

​	​	​	​	​
​	​ ​	​ 2	​ ​	​

Table of Contents

Business Overview

Base metals:

•

Nickel.    Our principal nickel mines and processing operations are conducted through our wholly owned subsidiary Vale Canada Limited ("Vale Canada"), which has operations in Canada, Indonesia and New Caledonia. We are currently in the process of selling our operations in New Caledonia. See Overview—Business Overview—Significant Changes in Our Business—Divestments—Vale New Caledonia put option agreement. We also have nickel operations in Onça Puma, in the Brazilian state of Pará. We also control and operate nickel refining facilities in the United Kingdom and Japan, and have interests in a nickel refinery in South Korea. Our nickel refining facilities in China and Taiwan are currently under care and maintenance.



•

Copper.    In Brazil, we produce copper concentrates at Sossego and Salobo, in Carajás, in the state of Pará. In Canada, we produce copper concentrates, copper matte and copper cathodes in conjunction with our nickel mining operations at Sudbury and Voisey's Bay.



•

Cobalt, PGMs and other precious metals.    We produce cobalt as a byproduct of our nickel mining and processing operations and refine it at our Port Colborne facilities, in the Province of Ontario, Canada. We produce refined cobalt in our Long Harbour facilities in Newfoundland and Labrador. We also produce cobalt as a byproduct of our nickel operations in New Caledonia. We produce PGMs as byproducts of our nickel mining and processing operations in Sudbury, Ontario, Canada. The PGMs are concentrated at our Port Colborne facilities. We produce gold and silver as byproducts of our nickel mining and processing operations in Sudbury, Ontario, Canada, and gold as a byproduct of our copper mining at Sossego and Salobo in Brazil.

Coal:

•

We conduct our coal operations in Mozambique, through our subsidiary Vale Moçambique S.A. ("Vale Moçambique"), where we are ramping up our metallurgical and thermal coal operations.

​	​	​	​	​
​	​ ​	​ 3	​ ​	​

Table of Contents

Business Overview

BUSINESS STRATEGY

In 2020, we took important steps towards building a better Vale. Our goal is to be a company recognized by society for being: (i) a benchmark in safety, (ii) the best in class reliable operator, (iii) a talent-driven organization, (iv) a leader in low-carbon mining and (v) a reference in creating and sharing value. We are dedicated to repairing Brumadinho and to transforming natural resources into prosperity and sustainable development, based on the following main strategic pillars:

•

Safety and operational excellence.



•

New pact with society.



•

Maximize flight-to-quality in iron ore.



•

Base metals transformation.



•

Discipline in capital allocation.

Below is a summary of the major developments in our strategy.

Safety and operational excellence

We have the ambition to become a benchmark in safety with clear targets by 2025: (i) no high potential recordable injuries, (ii) 50% reduction of employee exposure to main health risks, (iii) reduction or elimination of very high-risk scenarios. Our process safety program starts with the hazard identification and risk assessment ("HIRA"), hazard investigation and risk assessment, by identifying the most critical process risks, and their respective controls. We have identified about 790 critical risks and more than 8,500 critical controls. Monitoring the integrity of these controls has become a part of our daily maintenance routine. As of March 22, 2021, we implemented HIRA in 95% of our sites.

We are enhancing our tailings and dam management system for adoption of known best practices. This initiative is organized around three pillars: routine, performance and risk assessment (known as RPR Management System). We are committed to adopting the Global Industry Standard on Tailings Management (GISTM) and we expect to be well positioned to be adherent to these standards by the end of 2021. We are strengthening our tailings and dam management system, improving our dams' conditions and working closely with the engineers of record, we are also decharacterizing our upstream geotechnical structures (including dams, dikes and drained piles) in Brazil.

The implementation of our integrated management system, known as "VPS" (Vale Production System) is strategic for us to become a reliable operator and to support our cultural transformation. The VPS will integrate our processes and systems into one single framework, enabling our company to work with unified objectives and in a standardized way. The VPS fosters the creation of a safer work environment and a more effective problem resolution process within the company. It is composed by three dimensions: leadership, technical and method, which strengthen our organizational culture through people development, standardization of best practices, operational discipline and compliance with routine. With this, we will redefine the path to operational excellence as a more humane, safe and sustainable company. All of our employees are trained to support full engagement.

​	​	​	​	​
​	​ ​	​ 4	​ ​	​

Table of Contents

Business Overview

New pact with society

We are committed to a comprehensive approach towards sustainability and safety, establishing a positive social, economic and environmental legacy in the regions where we operate and going beyond taxes, social projects and the reparation of Brumadinho. Our sustainability goals are in line with the Sustainable Development Goals (SDG) of the United Nations 2030 Agenda and include commitments relating to:

•

Fighting climate change.



•

Renewable electricity, energy efficiency and energy matrix transformation.



•

Reducing GHG emissions of our supply chain and contributing to reduce clients' carbon footprint by offering high quality products.



•

Forest protection.



•

Water usage reduction.



•

Socioeconomic contribution.



•

Bridging our gaps of Environmental, Social and Governance ("ESG").

For further information about our ESG practices and commitments, see Overview—Business overview—Our environmental, social and governance (ESG) framework.

Maximize flight-to-quality in iron ore

In the iron ore business, we are committed to delivering the highest possible margins under the current market environment, by managing our extensive supply chain and flexible product portfolio to cope with production constraints in the short-term. We are focusing our product line to capture industry trends, improving quality and productivity, controlling costs, strengthening our logistics infrastructure of railroads, ports, and distribution centers, committed to a safe, green and efficient shipping portfolio and enhancing relationships with customers.

•

We will continue to promote the Brazilian blend fines (BRBF), a standard product with silica (SiO2) content limited to 5% and lower alumina (1.5%), offering strong performance in any kind of sintering operation. We produce BRBF by blending fines from Carajás ores and Southern and Southeastern ores, which are complementary ores for our blending strategy. BRBF is produced in our Teluk Rubiah Maritime Terminal in Malaysia and in seventeen ports in China. This process reduces the time needed to reach Asian markets and increases our distribution capillarity by allowing the use of smaller vessels. Our blending strategy also permits the use of iron ore with lower iron concentration from the Southern and Southeastern Systems, allowing more efficient mining plans and increasing the use of dry processing methods, which in turn reduce capital expenditures, extend the life of our mines, reduce use of dams, and reduce water consumption by our operations: a key flexibility to cope with the short-term challenges.



•

We continue to improve our portfolio in order to provide solutions to our customers and to adapt to potential market demands. In 2019, we announced the launch of the GF88, a new product to supply the growing market of pellet production in China. This product consists of

​	​	​	​	​
​	​ ​	​ 5	​ ​	​

Table of Contents

Business Overview

Carajás fines (IOCJ), obtained through a grinding process, opening a new market for our high-quality portfolio. We are currently working on the development of low CO2 iron making technologies and services to support our customers as they make the transition to low CO2 steelmaking.

•

Our goal is to achieve a run-rate capacity of 400 Mtpy by the end of 2022. In the Northern System, our plan is to have high-quality growth with new low-cost assets, ramping up and opening new mining fronts to reach our capacity goal of 230 Mtpy. In the Southeastern System, we are investing in increasing our pellet feed production, developing filtering and dry stacking capacity and recovering approximately 40 Mtpy to our capacity. Finally, in the Southern System we are committed to solving the interference of upstream dams in our operations, recovering approximately 14 Mtpy to our capacity.



•

One of our key goals is to increase our flexibility by creating capacity buffers across iron ore operations. We currently expect to achieve over 50 Mtpy capacity buffer in the long-term, by expanding Northern System by opening new mining pits and obtaining new licenses, as Northern System 240 Mtpy and Serra Sul 120 projects and N3 mining front opening in Serra Norte, developing the 14 Mtpy capacity Capanema project in Southeastern System and unlocking capacity in our Vargem Grande complex.



•

With the continuous investments in dry staking tailings disposal and the planned increase of the share of dry processing production from 40% in 2014 of our total production to a target of 70% by 2024, our reliance on new dams and dam raisings should decline. Due to tailings disposal restrictions and lower iron ore production in the Southern and Southeastern Systems since the Brumadinho dam rupture, we temporarily reached 73% of dry processing production in 2020. The additional volume to reach 400 Mtpy production level is expected to come from dry processing method or wet processing using the dry staking method. To treat the tailings from wet processing, we are investing in tailings filtration systems to allow us to operate certain of our mines and plants without using tailings dams. We have announced an estimated investment of US$2.4 billion between 2020 and 2024 in some of our sites, including Vargem Grande complex, Itabira complex and Brucutu, to be operated with tailings filtration systems and dry stacking tailings disposal, which consists of filtering and stacking of partially or totally dewatered tailings, reducing our reliance on tailings dams. In 2020, we invested US$195 million in tailings filtration system and dry stacking tailings disposal. In March, 2021 we gradually started the operation of the tailings filtration plant located at the Vargem Grande Complex, our first filtration plant to be operated in our sites in the state of Minas Gerais. In line with this goal, we acquired New Steel in January 2019, bringing in innovative technologies for the dry beneficiation of iron ore, and approved an investment of US$125 million in the world's first industrial-scale dry magnetic fines concentration plant to produce 1.5 Mtpy with the start-up expected for 2022 in the Vargem Grande complex.

Base metals transformation

Nickel.    A key aspect of the strategy for our nickel business is to be a leader in providing nickel for a renewable energy transition and go further by improving our sustainable way to operate. We will keep our focus on completing the business turnaround, continuing to review our asset utilization, optimizing our operations and concentrating our efforts to increase productivity and improve returns, while preserving capacity for growth. We are one of the world's largest nickel producers, with large-scale, long-life and low-cost operations, a substantial resource base and diversified mining operations that

​	​	​	​	​
​	​ ​	​ 6	​ ​	​

Table of Contents

Business Overview

produce nickel products from nickel sulfide and laterite sources using advanced technology. Our commercial footprint is global, with a focus on serving our customers directly.

Our nickel products meet the needs of customers in different industries, including those with high-purity nickel needs and electric vehicle battery manufacturers. Most of our production that will be used in these industries comes from our Canadian operations, which benefit from the use of renewable energy and are located in a stable jurisdiction with strong ESG standards. Our main product, Class 1 nickel, places us in a unique position with environment-friendly operations in the North Atlantic, in line with our low-carbon agenda. By the end of 2021, we will start operations in two replacement projects in Canada: the extensions of the Voisey's Bay Mine and Copper Cliff Mine 1. Both projects have high nickel content and also a significant amount of by-products. We also have opportunities to expand our operations at Onça Puma in Brazil, and the option to participate, through joint ventures, in the Pomalaa and Bahodopi projects in Indonesia.

Copper.    We have significant opportunities to grow our copper business organically. We have a strong portfolio of copper assets and plans to develop a multi-year copper expansion plan, with Salobo III, Alemão and Cristalino being competitive projects that will support our strategic goal of production capacity of around 500 thousand tons per year. In addition to these projects, we have other opportunities to grow in the future, benefiting from the knowledge and logistics that already exist in the Carajás region, while we also evaluate opportunities to increase copper production in Canada. We are also engaged in greenfield exploration for copper in some of the world's most prolific belts, looking for tier-one assets for future development. The copper business still has the potential to expand, through partnerships, the Hu'u project, a world-class deposit located in Indonesia.

Discipline in capital allocation

We reaffirm our strong commitment to a sound balance sheet and for value creation to our stakeholders.

In September 2020, we repaid in full the outstanding balance of US$5 billion under our revolving credit lines, which were drawn in March 2020 to secure capital funding in light of the increased risks presented by the COVID-19 pandemic. We continued our deleveraging process and achieved a net cash level of US$898 million as of December 31, 2020.

We also consider other liabilities in determining the appropriate capital structure for Vale, such as the mark-to-market on derivatives, lease obligations according to IFRS 16, our REFIS tax refinancing program and our provisions to meet our obligations towards Fundacao Renova and the reparation of Brumadinho. See Overview—Business Overview—Rupture of tailings dam in Brumadinho—Settlements agreements—Global Settlement for Full Reparation.

As part of our commitment to attain a leaner portfolio, we continued the optimization of our asset portfolio. Accordingly, in December 2020 we entered into a binding put option agreement for the sale of our ownership interest in Vale Nouvelle-Calédonie S.A.S. (VNC), and in January 2021 we entered into a heads of agreement with Mitsui to structure Mitsui's divestment of the Moatize mine and the Nacala Logistics Corridor, as a first step towards our divestment of the coal business. For more details on the intitiatives regarding the divestment of assets, please see Overview—Business Overview—Significant Changes in Our Business—Divestments.

In July 2020, our Board of Directors reestablished our Shareholder Remuneration Policy, suspended in January 2019. The continuation of our dividend payment policy aims at returning to our shareholders a relevant portion of our cash generation, in a predictable pattern and aligned with our strategic pillar "Discipline in Capital Allocation". Accordingly, we made distributions to shareholders in August 2020 (US$1.324 billion), September 2020 (US$2.329 billion) and March 2021 (US$3.972 billion). For more details on shareholder remuneration, please see Share Ownership and Trading—Distributions.

​	​	​	​	​
​	​ ​	​ 7	​ ​	​

Table of Contents

Business Overview

SIGNIFICANT CHANGES IN OUR BUSINESS

We summarize below major events in our business since the beginning of 2020.

Global Settlement for Full Reparation

In February 2021, we entered into a settlement agreement with various public authorities for the reparation and remediation of socio-environmental and social-economic damages resulting from the Brumadinho dam rupture. For a discussion about this settlement agreement and other issues relating to the Brumadinho dam rupture, see Overview—Business overview—Rupture of tailings dam in Brumadinho.

Developments related to the pandemic of the coronavirus

In 2020, the outbreak of Coronavirus Disease 2019 (COVID-19) spread throughout the world. We are complying with the health and safety protocols established by the authorities and agencies of each country in which we operate and are monitoring the developments of the situation closely. In January 2020, we created a crisis management structure and governance to manage and deploy our actions in response to the COVID-19 pandemic. We have taken steps and implemented policies to safeguard our employees, businesses and communities surrounding our operations from the threats posed by the COVID-19 pandemic.

Operations.    In 2020, some of our operations were temporarily suspended as a result of developments of the COVID-19 pandemic as discussed below. Temporary suspensions had no relevant impact in our results of operation.

•

Itabira Complex.  In May and June 2020, our operations at the Itabira complex were suspended for 12 days by the Labor Superintendence of the State of Minas Gerais (Superintendência Regional do Trabalho e Emprego—"SRTE") due to concerns related to COVID-19 transmission. The SRTE revoked the suspension order once it concluded that our safety measures and procedures were satisfactory. In June 2020, we also reached a judicial agreement with labor prosecutors (Ministério Público do Trabalho—"MPT") and the labor court of the state of Minas Gerais to establish a series of health and safety measures and procedures for our operations in Itabira in connection with the COVID-19 pandemic. In September and November, 2020, we entered into two additional agreements with the MPT, on a voluntary basis, to extend such health and safety measures to all of our mining complexes in Brazil until the end of the COVID-19 pandemic.



•

Teluk Rubiah Maritime Terminal (TRMT).  Between March and May 2020, we temporarily halted our operations in the TRMT in Malaysia for 53 days, as we were temporarily unable to secure the minimum resources to safely operate the terminal. During suspension of the operations, vessels heading to TRMT were redirected and redistributed among our blending facilities in China with no impact on production and sales volume in 2020. In May we resumed the loading operations at TRMT following adequate health and safety protocols.



•

Voisey's Bay.  In March 2020, we ramped down our Voisey's Bay mining operation and placed it on care and maintenance as a precaution to help protect the health and well-being of indigenous communities in Labrador in face of the COVID-19 pandemic. We took this preventive action because of the unique remoteness of the area, with fly-in and fly-out operations, and higher exposure to travel. In July 2020, production was resumed at the site,

​	​	​	​	​
​	​ ​	​ 8	​ ​	​

Table of Contents

Business Overview

reaching full capacity in August 2020. The impact on our nickel production of the care and maintenance at Voisey's Bay Mine was mitigated by Long Harbour refinery sustained operations, sourcing nickel concentrate stockpiles already at site.

•

Azul Mine Operations.  In March 2020, we suspended our manganese operations at the Azul Mine in the state of Pará, mainly based on the contingent of employees considered an at-risk group, and to contribute to the levels of key personnel at iron ore production sites in the Northern System. Currently, we expect to maintain operations suspended in 2021.



•

Mozambique Coal Processing Plants.  Due to travel and equipment transportation restrictions resulting from the COVID-19 outbreak, we revisited plans for the Mozambique coal processing plant stoppage for a maintenance revamp. The halting of the processing plants' operations was previously expected to start in the second quarter of 2020, but was rescheduled to November 2020 and started according to the plan. Following works completion, a production run rate of 15 Mtpy and improved business sustainability are expected.

Safety protocols.    Since March 2020, we have transitioned a significant number of our employees to a remote work regime as part of the efforts to mitigate the spread of COVID-19. We have also implemented other social distancing measures, including shifts in operational areas, restriction of in-person meetings, test-trace protocol, among others.

At our operational sites, we have implemented different levels of defense to mitigate the risk of transmission of COVID-19. Any person accessing our sites must fill in a digital self-assessment for symptoms and potential exposure to COVID-19. Employees requiring health support and information have access to designated COVID-19 hotlines. Additional point-of-entry screening was implemented at the units globally, and an app to track proximity in case of contact tracing was deployed in several of them.

In Brazil, Indonesia and Mozambique, this screening process included periodic testing of the workforce with the use of thousands of serologic or antigen rapid tests. Local implementation of the plan also included swift deployment and efficient monitoring of physical distancing, use of face protection, access to hand washing or hand sanitizer stations, and cleaning routine within the sites and vehicles. Dining hall routines were adapted to provide individually packed meals. Finally, employees identified as having a higher risk to develop the severe form of the disease were removed from the operations and have remained home with full-benefits awaiting to be vaccinated prior to returning to the sites.

Humanitarian and financial aid.    In 2020, we donated US$109 million to local governments in Brazil, the second largest amount donated by a corporation in Brazil to fight COVID-19. We have also provided resources to governments and institutions in Canada, Indonesia and other countries where we operate. For 2021, we have approved US$15 million (approximately R$80 million) to be used in humanitarian aid actions related to COVID-19, including to support to Butantan Institute in the works to expand the Multi-Purpose Center for Vaccine Production, which will have a production capacity of up to 100 million doses per year, and the donation of 50 million syringes and 280,000 PPEs to the Brazilian Ministry of Health. We have also provided temporary financial aid for our suppliers in Brazil. The initiatives included advancing payments to small and medium-sized suppliers in Brazil, reducing payment terms for services and materials. We also provided financial support to construction companies and workers allocated to projects which were halted by us, in order to reduce the flow of people in our sites and increase the safety of our workers.

​	​	​	​	​
​	​ ​	​ 9	​ ​	​

Table of Contents

Business Overview

We continue to monitor the developments of the COVID-19 pandemic. The situation is evolving and could have a material impact on us if there is significant supply chain disruption or customer demand declines.

Divestments

•

Vale New Caledonia put option agreement.  In December 2020, our subsidiary Vale Canada Limited ("VCL") entered into a put option agreement for the sale of its ownership interest in Vale Nouvelle-Calédonie S.A.S. ("VNC") with Prony Resources, a consortium of current VNC management and employees, supported by both the Caledonian and French authorities and having Trafigura as a minority shareholder. As a result of the proposed transaction, we recognized a loss of US$882 million in our financial statements for the period ending on December 31, 2020, which includes a provision of US$500 million related to the commitment to fund the continuity of VNC operations and investments in the conversion of the tailings deposition from wet to dry-stacking. The transaction has been approved by VNC workers council and is supported by the Caledonian and the French governments. Closing is expected for 2021.



•

Sale of VLI Shares.  In December 2020, BNDES Participações S.A. ("BNDESPAR") exercised its option to purchase shares of VLI held by us, representing 8% of VLI's share capital. We had granted this option to BNDESPAR under a stock purchase option agreement signed in 2015, in connection with an amendment to the indenture of the debentures that were issued to finance the expansion project of the Ferrovia Norte Sul S.A. ("FNS"), currently operated by VLI. In consideration for the purchase of these shares, we received R$1.223 billion (US$241 million) on December 11, 2020. Following this transaction, we hold 29.6% of VLI's total shares.



•

Total Divestment of Biopalma.  In November 2020, we sold 100% of the shares of Biopalma da Amazônia S.A—Reflorestamento, Indústria e Comércio to Brasil Bio Fuels Pará Ltda., a company from the Brasil Bio Fuels S.A. group, resulting in the total divestment of our palm oil business.



•

Sale of interest in Longyu.  In August 2020, we concluded the sale of our 25% stake in Longyu Energy Resources Co., Ltd. (Longyu) to Yongmei Group Co., Ltd (Yongmei), for CNY1.065 billion (equivalent to US$156 million). Longyu produces metallurgical and thermal coal and other related products in the Henan province in China.



•

Sale of interest in Zhuhai YPM.  In November 2020, we concluded the sale of our 25% stake in Zhuhai YPM Pellet Co., Ltd. (Zhuhai YPM) to Zhuhai Yueyufeng Iron and Steel Co., Ltd., (YYF), for US$13 million.



•

Transfer of the shares of Potassio Rio Colorado.  In February 2021, we concluded the transfer of the shares of Potassio Rio Colorado to the Province of Mendoza, in Argentina.



•

Heads of Agreement with Mitsui.  In January 2021, we signed a heads of agreement ("HOA") with Mitsui to structure Mitsui's exit from Vale Moçambique and the Nacala Logistics Corridor ("NLC"). Mitsui holds a 15% interest in Vale Moçambique and a 50% interest in the NLC. The HOA provides that we will acquire Mitsui's stake in the mine and the logistics assets for US$1.00 each, and will take full control of the Nacala Corridor project finance. In the event of closing of the transaction, we will also control the NLC and, therefore, consolidate its assets and liabilities. Following the acquisition of Mitsui's stakes, and therefore simplification of governance and asset management, we will begin the process of divesting

​	​	​	​	​
​	​ ​	​ 10	​ ​	​

Table of Contents

Business Overview

its participation in the coal business, which will be guided by the preservation of the operational continuity of the Moatize mine and the NLC, through the search of a third party interested in those assets.

•

PT Vale Indonesia divestment agreement.  In October 2020, in compliance with the divestment obligation under the contract of work, Vale Canada sold to Inalum, a state-owned mining holding company which oversees the state mining investments, part of its interest in PTVI, for US$278 million. Following this transaction, we now own approximately 45% of PTVI's share capital.

New projects

•

Capanema project.  In December 2020, our Board of Directors approved the implementation of the Capanema iron ore project in the Southeastern System, located in the municipalities of Santa Bárbara, Ouro Preto and Itabirito, in the state of Minas Gerais, Brazil. This project includes investments in the Capanema mine to resume facilities and acquire new equipment, implement a long-distance belt conveyor (TCLD) and adjustments in the Timbopeba stockyards, totaling expected multiyear investments of US$495 million, with capacity of 18Mtpy. Start-up is expected for the second half of 2023.



•

New Steel Project (NS04).  In December 2020, our Board of Directors approved the implementation of the NS-04 Project, located at the Vargem Grande complex, in the city of Nova Lima, in the state of Minas Gerais. The project is expected to be the world's first industrial-scale dry magnetic fines concentration, with total expected multi-year investments of US$125 million, capacity of 1,5Mtpy. Start-up is expected for the second half of 2022.



•

Solar Project—Sol do Cerrado.  In December 2020, we announced the Sol do Cerrado project for the generation of solar energy, in the municipality of Jaíba, in the state of Minas Gerais, Brazil. The project contemplates the construction of a photovoltaic plant, including 17 sub-parks that total an installed capacity of 766 megawatts peak (MWp). It also includes the implementation of an elevator substation, transmission line and connection bay at the 230 kV Jaíba substation, with contracts signed for connection to the Brazilian National Interconnected System. The implementation of the project will require investments of approximately US$500 million. The project will produce approximately 193 average megawatt (MWa) of energy per year for our operations, corresponding to 13% of our estimated demand in 2025, and its operational start-up is expected for the fourth quarter of 2022. Solar generation, located in the Southeastern region, also optimizes the generation profile of our portfolio, which is based on hydro generation. The project was approved by our Board of Directors and is subject to customary closing conditions, including approval by the National Electric Energy Agency (ANEEL).



•

West III Project (Zhejiang Province, China).  In October 2020, our Board of Directors approved the creation of a joint venture company with Ningbo Zhoushan Port Company Limited ("Ningbo Zhoushan Port"), a subsidiary of Zhejiang Provincial Seaport Investment & Operation Group Co. Ltd. (Ningbo Zhoushan Port Group Co. Ltd.), to build, own and operate the West III Project in Shulanghu Port, Zhoushan City, Zhejiang Province, China. Each of Vale International and Ningbo Zhoushan Port will own a 50%-equity interest in the joint venture. The project consists in expanding the Shulanghu Port facilities, developing a stockyard and loading berths with additional 20 Mtpy capacity. Investments for the project are estimated between US$110 million and US$160 million. By participating in the project, we will secure a

​	​	​	​	​
​	​ ​	​ 11	​ ​	​

Table of Contents

Business Overview

total port capacity of 40Mtpy in Shulanghu, which will help us to optimize our overall supply chain costs.

•

Inauguration of a grinding hub in China.  In August 2020, we inaugurated the Shulanghu Grinding Hub, located in the city of Zhoushan, Zhejiang Province, China. We own 100% of the grinding equipment, and the Ningbo Zhoushan Port's subsidiary maintains and operates such grinding equipment in Shulanghu Port for us through a services agreement. This is our first grinding hub in China, having three production lines and totaling a nominal capacity of 3 million tons per year. The first product to be produced at the Grinding Hub is the GF88, a high-grade ground iron ore fine using our Carajás fines (IOCJ) as raw material, which provides an excellent environmental-friendly solution for pellet production and supports steelmaking clients with the challenge of reducing their carbon footprint, part of our scope 3 emissions.



•

Serra Sul 120 Project (Carajás).  In August 2020, our Board of Directors approved the implementation of the Serra Sul 120 Project, located in the municipality of Canaã dos Carajás, in the state of Pará, Brazil. The project consists of increasing the S11D mine-plant capacity by 20 Mtpy, to a total of 120 Mtpy at site. The project has total multiyear investments of US$1.5 billion and its start-up is expected for the first half of 2024. The project will create an important buffer of productive capacity, ensuring greater operational flexibility to face eventual production or licensing restrictions in the Northern System.



•

JV with Kobe Steel and Mitsui.  In July 2020, we entered into a non-binding heads of agreement to establish the preliminary terms and conditions for the creation of a new venture ("NewVen") to supply low GHG (greenhouse gases) metallic minerals and steel making solutions to the steel industry with Kobe Steel, Ltd and Mitsui & Co., Ltd. The potential creation of the NewVen has the main purpose of delivering low CO2 metallic minerals to the global market, providing new technological solutions to our clients and will use existing and new low-CO2 iron making technology such as the Tecnored® technology and the Midrex® process.

Resumption of Samarco's operations

In December 2020, Samarco commenced the gradual resumption of its operations, with the integrated restart of iron ore extraction and beneficiation in the Germano complex, located in Mariana, state of Minas Gerais, and pelletizing at the Ubú complex, located in Anchieta, state of Espírito Santo. Samarco's operations are resuming with approximately 7 to 8 Mtpy production capacity, with the use of one of three concentrators to beneficiate iron ore in the Germano complex and one of four pellet plants in the Ubu complex, representing 26% of Samarco's productive capacity. The integrated restart of operations occurs after extensive commissioning tests after the five-year halt. Samarco will use new processes for tailings disposal, reflecting its commitment to a sustainable restart and operational safety.

Through the implementation of the filtration process, Samarco expects to be able to substantially dewater sand tailings, which represent 80% of total tailings by volume, and stack these filtered sand tailings in piles safely. The remaining 20% of tailings are planned to be deposited in Alegria Sul pit, a bedrock self-contained structure, which is safer than a tailings dam. Additionally, Samarco is progressing in the decommissioning of Germano dam, following the safety standards required. Samarco operates a Monitoring and Inspection Center in real time to monitor the stability and safety of its geotechnical structures.

​	​	​	​	​
​	​ ​	​ 12	​ ​	​

Table of Contents

Business Overview

Renewal of railway concessions

We have entered into amendments to the Vitória a Minas railroad ("EFVM") and the Carajás railroad ("EFC") concession agreements in order to formalize the renewals of the concessions that would expire in 2027 for an additional period of 30 years. As a result, EFVM and EFC concessions will now expire in 2057. See Information on the Company—Lines of business—Infrastructure—Logistics.

​	​	​	​	​
​	​ ​	​ 13	​ ​	​

Table of Contents

Business Overview

OUR ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) FRAMEWORK

We are committed to fully integrating sustainability into our business through a comprehensive approach based on systematic planning and execution, prioritizing risk and impact management, and establishing a positive social, economic and environmental legacy in the places where we operate. Our practices related to ESG are evolving.

We have been increasing our engagement with socially responsible investors and key ESG stakeholders through webinars, roadshows and the development of a dedicated website, the ESG Portal. We have also reviewed studies from leading ESG advisors and index providers (such as ISS, Glass Lewis, MSCI, Sustainalytics, Responsible Mining Index, Dow Jones Sustainability Index), and identified approximately 63 gaps with respect to ESG best practices. Based on this assessment, we mapped out an ESG action plan to address these gaps. After the rupture of the tailings dam in Brumadinho, we decided to strengthen our interactions with ESG stakeholders to discuss a range of strategy, risk and governance-related matters and accelerate our ESG aid initiatives. We are committed to eliminating our ESG gaps by 2030 (our "2030 Commitments").

Our ESG Portal provides greater transparency about our initiatives.

Below are the highlights of our main ESG accomplishments in 2020 and ongoing initiatives:

Environmental

•

Climate Change.  We are committed to leading the transition towards a net-zero mining industry. We are committed to contributing with solutions that will help limit the increase in the average global temperature to well below 2°C, as set forth in the Paris Agreement. We endorsed and follow the Task Force on Climate related financial disclosures (TCFD) framework for risks and opportunities related to climate change. We have ambitious goals related to climate change risk management, including targets to reduce scopes 1 and 2 absolute emissions by 33% until 2030, with 2017 as baseline, and to become carbon neutral by 2050. We recognize that we can only lead the mining industry towards a low carbon economy if we induce our value chain on the same direction. Our scope 3 emissions, annually calculated and verified by independent third parties, represents 98% of our total emissions and are not under our direct control. In 2020, we committed to a target to reduce scope 3 net emissions by 15% until 2035, with 2018 as baseline, which are based on development of new products, nature-based solutions, partnership and engagement with clients and suppliers. The scope 3 target will be revised every five year, given the uncertainties regarding low carbon technologies and climate policies. Both targets are aligned with the Paris Agreement ambition.



•

Scopes 1 and 2 decarbonization plan:    We have built a bold roadmap, with clear milestones, to meet the reduction targets in Scopes 1 and 2. We will invest US$2 billion over the next 10 years to develop low carbon solutions, such as electrification, biofuels use and renewable electricity generation and use. Our current portfolio of initiatives consolidates more than 35 projects, prioritizing the most cost-competitive initiatives to achieve the 2030 target, based on a Marginal Abatement Cost curve (MAC Curve). All investment decisions are submitted to an internal price of US$50 per ton of CO2 to encourage investments in greenhouse gas (GHG) reduction, in part by incorporating a scenario of more restrictive regulations, and as a tool to help implement our emission reduction targets. We intend to reduce GHG in our operations by increasing the processes' energy efficiency, and by

​	​	​	​	​
​	​ ​	​ 14	​ ​	​

Table of Contents

Business Overview

developing solutions based on replacing usual energy sources by greener alternatives. These initiatives include, among others, the use of biofuels replacing fossil fuels, electrification of equipment and processes, use of alternative fuels such as electrofuels, carbon capture technologies, and development of alternative processes.

•

Scope 3 decarbonization plan:    More than 90% of our scope 3 emissions occur due to the processing of the iron ore in the steel industry. We have identified two pillars of the scope 3 roadmap: (i) portfolio differentiation, with high quality products and low CO2 iron making technologies and services for the steel industry; and (ii) partnerships in shipping and in the steel sector. We can offset up to 20% of the target with nature-based solutions.

In 2020, we employed a number of efforts to reduce greenhouse gases emissions and mitigate the climate change, and we spent US$80.2 million with these initiatives.

•

Energy.  The three pillars of our energy initiatives are: (a) renewable electricity, (b) energy efficiency and (c) energy matrix transformation. Approximately 68% of the electricity consumed by our operations in Brazil is self-generated energy that comes from renewable sources. Our target is to achieve electricity self-sufficiency from renewable sources in Brazil by 2025, and to match 100% of our consumption globally through renewable electricity by 2030.



•

Water.We are committed to reducing fresh water use in our activities by investing in new technologies, in the expansion of our monitoring network and in other initiatives to control total water collection, especially by promoting water reuse. We are currently developing programs and implementing actions that go beyond compliance with the legal requirements to optimize water use and consumption. Our water reuse represents 80% of total production demand in 2020. We want to reduce by 10% the new water captured and used in processes per ton produced, which means a smaller volume of fresh water captured for the same volume of production. In 2018, we set a target to reduce new water collection by 10% until 2030. This commitment aims to provide a lower freshwater withdrawal per ton produced compared to 2017. Until 2020, we have already reduced its water collection by 8.7%, of the 10% reduction expected by 2030.



•

Forest conservation.  Our ambition is to act as a global catalyst for forest conservation and reforestation. Currently, we help to protect 1,018,405 hectares of forest as a result of compensation measures, voluntary initiatives and partnerships. We are committed to protecting 400,000 hectares and reforesting additional 100,000 hectares by 2030, bolstering our 2018 target. In this sense, in 2020 we added 54,000 hectares of protected forests in conservation units.



•

Waste.  In 2020, we approved our Waste Policy to encourage the transition from our waste management to a circular economy perspective. Such transition is possible due to innovation. In our policy, we also prioritize dry processing, in line with our goal of achieving 70% dry processing by 2024.

Social

•

Human Rights.  We are committed to the United Nations Guiding Principles on Business and Human Rights. We have a Human Rights Policy since 2009. In 2019, our policy was revised

​	​	​	​	​
​	​ ​	​ 15	​ ​	​

Table of Contents

Business Overview

following a public consultation process. Most of the contributions received through the process were taken into account. In 2020, Human Rights became part of Vale's Integrated Global Risk Map. Since then, our operations included their human rights risk assessment, mitigation controls and action plans in our global management system. In 2020, we also reviewed our human rights due diligence strategy and methodology and developed a roadmap for its implementation in the next five years.

•

Gender Balance.  We have announced the goal to double our female workforce by 2030, from 13% to 26% and to increase the female presence in leadership roles from 12% to 20%. We have also disclosed the median salary by gender and seniority level. In 2020, we achieved 16.3% of women representation, a 26% increase in the total number of women in Vale compared to 2019, and we achieved 15.9% of women in senior leadership (executive manager positions and above), a 28% increase in the representation of women in senior leadership positions compared to 2019.



•

Health and Safety.  We are committed to improving the health and safety of our workers. Our long-term goals are: (i) no recordable injuries with potential for fatality or life-altering injuries, (ii) 50% reduction in the exposure of employees to the top 10 health risks by 2025 and (iii) reduction or elimination of the most significant risk scenarios by 2025.



•

Socioeconomic Contribution.  We are committed to positively impacting society, by investing in socioeconomic actions and projects focused on community development. In particular, we are investing in actions that contribute to the development and improvement of urban infrastructure and mobility, traditional communities, education, culture, health, and work and income generation in the regions where we operate. We spent approximately US$390 million on social initiatives in 2020, of which 56% was spent on voluntary programs, 13% on Brazilian-tax-exempted initiatives, and 31% on mandatory programs.



•

Indigenous People and Traditional Communities.  Our guidelines with respect to indigenous people and traditional communities are built upon the ICMM's position statement on Mining and Indigenous People, the International Labour Organization (ILO) Indigenous and Tribal Peoples Convention (C169), and the United Nations Declaration on the Rights of Indigenous Peoples. We are committed to respecting the principle of Free, Prior and Informed Consent (FPIC), which entails a process of informing, negotiating in good faith and allowing the Indigenous or traditional communities to freely make decisions. We defined as one of our strategic planning pillars the expansion of our engagement with indigenous people. This pillar consists of three main fronts: preservation of cultural memory, support for indigenous people protagonism and implementation of sustainability programs.



•

Community involvement.  In order to engage communities and other local players in the regions where we operate, we have established structured dialogue spaces for creating "Relationship Plans" with the communities in regions we operate. These plans have as their main principles: (i) the social engagement in the definition and prioritization of initiatives to be implemented in the communities; and (ii) the use participatory meetings to monitor the performance, assessing adherence, and effectiveness of the results together with the communities. In 2020, we developed Relationship Plans with more than 450 communities, and carried out more than 430 projects.

We have also structured channels to strengthen our relationship with our stakeholders. Through these channels, we promote dialogue and improve our relationship management processes, anticipating and treating risks, impacts and possible conflicts and rights violations.

​	​	​	​	​
​	​ ​	​ 16	​ ​	​

Table of Contents

Business Overview

In 2020, we received 15,559 community contacts through these channels, where 99.01% were responded and 72.6% were resolved.

Governance

Since 2018, we have been listed on the Novo Mercado segment, the highest level of governance of B3. We have been investing in the improvement of our corporate governance, with benchmarks in national and international best practices, and developing our understanding of investors' perspective on these matters.

•

Board of Directors.  At a shareholders' meeting held on March 12, 2021, our shareholders approved several changes to our bylaws to improve our governance. The main changes are described below.



•

Majority of independent directors.    Our Board of Directors must be composed of 11 to 13 members and one alternate member, and at least seven of these members must be independent. So, following our next annual shareholders' meeting, scheduled for April 2021, we expect to have a Board of Directors composed of a majority of independent members. We also adopted more stringent requirements for a candidate to be considered independent. Previously, our Board of Directors was composed of 13 members and 13 alternates, and our bylaws required that the higher of three members or 20% of the members of our Board of Directors be independent. For more information on our full standard of independency, see Management and Employees—Management—Board of Directors.



•

Lead Independent Director.    Our Board of Directors must now have a Lead Independent Director (LID), in case the chairperson is not an independent director. The LID will be elected among and by the independent directors. The LID will act together with our Investor Relations department as an alternate point of contact for investors and will be a mediator between the chairperson of our Board of Directors and the remaining directors.



•

Individual election for directors.    Our shareholders will now vote to elect the members of our Board of Directors on an individual basis (as opposed to voting for a slate of candidates).



•

Election of the chairperson and vice-chairperson.    Our shareholders will now elect the chairperson and vice-chairperson of our Board of Directors directly. Previously, the chairman and vice-chairman were elected by the directors.



•

No alternate members.    We will no longer elect alternates members for our Board of Directors (with the exception of the alternate for the director elected by our employees, as required by law).



•

Board Committees.  In 2020, we adopted additional measures to enhance our governance structure, establishing our Audit Committee and our Nomination Committee. The creation of these committees is an important step in the evolution of our corporate governance model. With the Audit Committee, we now have a specialized committee to directly assist the Board of Directors in supervising the internal audit activities, the area of internal controls and the area responsible for preparing Vale's financial statements, among other duties. The Nomination Committee is a permanent committee to directly assist the Board of Directors,

​	​	​	​	​
​	​ ​	​ 17	​ ​	​

Table of Contents

Business Overview

proposing improvements related to the structure, size and composition of the Board, in addition to recommending the skills, profiles and potential nominees for the Board, so that we can continue to benefit from the plurality of arguments and from a decision-making process with quality and care, complying with the law, ethics and corporate governance best practices. In 2021, we have also established our Innovation Committee, which will responsible for analyzing new technologies and other initiatives to improve our business. Finally, our Personnel, Compensation and Governance Committee is responsible for evaluating the compensation model for members of our executives as well as the proposed annual, global budget for the compensation of executives, among other matters. See Management and Employees—Management—Advisory Committees to the Board of Directors.

•

Compensation.  We are committed to aligning our compensation programs to our business strategy and the goal of making Vale a safer company. We implemented a number of changes, such as the adoption of a malus clause and a clawback policy under which, upon the occurrence of events of exceptional severity, the Board of Directors may reduce variable compensation of executives or require that executives return amounts received, and the implementation of new share ownership guidelines for executive officers. For 2020, we approved new standards for Executive Officers compensation: for short-term compensation, at least 30% of performance goals will be ESG-driven and directly related to safety, risk management and sustainability targets, and with respect to long-term compensation, at least 20% of performance goals will be based on ESG metrics. Overall, 12% of total remuneration will be linked to ESG metrics.



•

Risk Management.  In 2020, with a focus on continuous improvement of risk management and governance, we created a new risk executive committee to better monitor and discuss sustainability and reputational risks. We now have five executive committees created to advise our management with respect to each of these risks: (i) operational risks, (ii) geotechnical risks, (iii) strategy, finance and cyber risks, (iv) compliance risks and (v) sustainability, institutional relations and reputational risks. We have also revised our Integrated Risk Map to include two new categories: Sustainability & Reputation and People.



•

In July 2020, our Board of Directors established a Compliance Office headed by a Chief Compliance Officer ("CCO"), who reports directly to the Board of Directors and is supervised by the Audit Committee. This structure ensures that the CCO has autonomy and is insulated from our other executive structures. The CCO is responsible for supervising the Corporate Integrity, the Internal Audit and also the Whistleblower Channel, of which these two last mentioned areas act as our third line of defense.



•

Expiration of Shareholder Agreement.  In November 2020, the Shareholders' Agreement among Litela Participações S.A., Litel Participações S.A., Bradespar S.A. Mitsui & Co., Ltd. and BNDES Participações S.A. expired. As a result, these shareholders are no longer required to vote jointly on matters that were previously covered by the agreement.

​	​	​	​	​
​	​ ​	​ 18	​ ​	​

Table of Contents

Business Overview

RUPTURE OF TAILINGS DAM IN BRUMADINHO

On January 25, 2019, a tailings dam ruptured at our Córrego do Feijão mine, in the city of Brumadinho, state of Minas Gerais. The rupture of the dam released a flow of tailings residue, which submerged our administrative area at the Córrego do Feijão mine and reached parts of the communities of Córrego do Feijão and Parque da Cachoeira outside of Brumadinho, and the nearby Paraopeba River. The dam rupture resulted in 270 fatalities, including 11 victims still missing, and caused extensive property and environmental damage in the region.

We will never forget Brumadinho. We reaffirm our respect for the victims and their families, prioritizing the fair and agile reparation of Brumadinho. As we move forward on our path to making our business better, valuing people, safety and reparation, we continue firm in our commitment to become one of the safest and most reliable mining companies in the world.

Reparation and remediation efforts

We have provided humanitarian assistance to victims and their families since the very first moments. Our emergency actions to support impacted people and region included psychological and health care, financial aid, sheltering, food and other essential items, transportation and logistics, emergency safety measures and infrastructure works, animal rescue and care, infrastructure for water supply to the metropolitan region of Belo Horizonte, support to authorities, and donations to municipalities, among other things.

Through February 2021, we had allocated over R$13 billion to pay for compensation to impacted people, infrastructure works and environmental and socioeconomic reparation actions. The environmental reparation activities extend over 22 municipalities located along the Paraopeba River, and involve sediment containment and removal, monitoring of water quality, and preservation and restoration of fauna and flora.

In 2020, we concluded the works on two pipelines for water withdraw on the Para River, in the city of Para de Minas, as part of the construction of new water supply systems to serve the population of Para de Minas and the metropolitan area of Belo Horizonte. We expect to deliver a third one, on the Paraopeba River, in the first half of 2021. We also completed essential social infrastructure works, with the delivery of a daycare facility and a health care unit to communities in Parque da Cachoeira, and a school for 400 students to the community of Macacos, both in the state of Minas Gerais. In Brumadinho, we are renovating a multi-sport gymnasium complex and all 16 public schools.

In September 2020, we announced the Full Reparation Program, a program for comprehensive reparation of damages caused by the Brumadinho dam rupture. The program results from an open dialogue with authorities and the affected communities, and includes 166 initiatives and projects, including, among others:

•

Actions to improve quality of life and create jobs for Brumadinho residents through social projects to transform local realities and bring more dynamism to the local economy. As an example, we provided the installation of 700 km of fiber optic cabling, with wireless access points, increasing the availability of internet network in the region.



•

Social service programs for the affected parties.

​	​	​	​	​
​	​ ​	​ 19	​ ​	​

Table of Contents

Business Overview

•

Forest recovery, protection of wildlife, fish and plant species, as well as constant water quality monitoring and studies to assess risks to human health.



•

Urban and social infrastructure construction projects.



•

Other actions designed to bring normality back to evacuated communities.

The Full Reparation Program follows the recommendations contained in the February 2020 report of the Independent Ad Hoc Consulting Committee for Support and Reparation (CIAE-AR), an ad-hoc committee created by our Board of Directors to monitor our measures to support the affected community and to remediate the impacted area. In January 2021, a consulting firm conducted an external assessment and reviewed the actions taken by us and concluded that approximately 82% of the recommendations were addressed and the other 18% are in line with our service and commitment schedule. Additional information is available on our ESG Portal, at www.vale.com/esg. Information in our website is not incorporated by reference in this annual report on Form 20-F.

We know that there is still a lot to be done to fully repair Brumadinho, and we reaffirm our commitment to doing so. For further information on the updated status of our actions taken so far, see the following website: vale.com/repairoverview. Information in our website is not incorporated by reference in this annual report on Form 20-F.

Dam safety measures

We have implemented a number of initiatives to enhance our tailings and dam management process and improve dam safety.

Decharacterization of upstream dams.    Our key initiative is the decharacterization of all of our 30 upstream structures in Brazil, including dams, dikes and drained piles. An upstream structure is a structure raised using the upstream raising method, in which the body of the structure is built using the thick tailings deposited in the reservoir, by successively layering them up and in the direction opposite to the water flow (upstream). This is the same construction method as the Brumadinho dam. The term "decharacterization" means functionally reintegrating the structure and its contents into the environment, so that the structure no longer serves its primary purpose of acting as a tailings containment. Recently approved laws and regulations require us to decharacterize all of our upstream structures on a specified timetable, based on projects agreed with authorities.

•

The decharacterization of an upstream structures is a complex process and may take a long time to be concluded with the necessary safety precautions. The works related to the decharacterization process may influence the geotechnical stability conditions and increasing the risk of such structures. See Overview—Risk factors—Risks relating to dam rupture. We are conducting detailed engineering studies for each structure to be decharacterized, and may need to improve the construction or build additional containment structures (back-up dams) to safely proceed with the decharacterization. For instance, for certain dams, we have to build downstream back-up dams to ensure the retention of tailings in case of a dam rupture. All these projects are subject to further review and eventual approval by the relevant authorities.



•

Our decharacterization plan was updated in 2020 and currently comprises 25 geotechnical structures (including 13 dams, 10 dikes and 2 drained piles) built by the upstream raising method. Our plan also includes the construction of seven containment structures (back-up

​	​	​	​	​
​	​ ​	​ 20	​ ​	​

Table of Contents

Business Overview

dams) for certain dams, to retain tailings in case of dam rupture, protecting the area downstream from these dams during the decharacterization works.

•

We concluded the decharacterization of five of the original 30 upstream structures between 2019 and early 2021. In 2019, we concluded the decharacterization of the 8B dam in the city of Nova Lima. In 2020, we concluded the decharacterization of Rio do Peixe, II Kalunga and III Kalunga dikes. In 2021, we concluded the decharacterization of Pondes de Rejeitos dam, and we expect to conclude the decharacterization of Fernandinho dam and 4 Pontal and 5 Pontal dikes. In 2020, we have also concluded the construction of two downstream back-up dams, one for the Sul Superior dam and the other for B3/B4 dam, and the first phase of the downstream back-up dams related to Forquilha I, Forquilha II, Forquilha III, Forquilha IV and Grupo dams.



•

We also operate tailings dams in Canada and New Caledonia, including compacted outer shell upstream dams in Canada. We are not planning to decharacterize these upstream dams for the time being, since there are no safety, technical or regulatory reasons for doing so. In Mozambique, our single tailings dam is no longer active, and a closure plan is currently at a conceptual stage.



•

Our joint venture Samarco owns two upstream tailings dams, both inactive and in compliance with the currently approved design. After the rupture of Samarco's dam in 2015, emergency works were performed in order to ensure the stability required and to comply with the applicable regulation. Samarco is currently implementing a closure plan and long-term monitoring will be defined as part of the decharacterization of both structures. Our investee Mineração Rio do Norte ("MRN") owns 24 tailings dams, 13 of which are active, while the other 11 are inactive. The two upstream dams in such portfolio are inactive and have ongoing decharacterization plans.



•

The decharacterization process is important for the long-term risk reduction of the upstream tailings facilities, but the works required for the decharacterization process may impact the geotechnical stability of certain upstream tailings facilities, increasing the of risk of rupture of these structures specially during the first phases of this process. To mitigate this risk, we have evacuated the downstream zones of the critical dams and we are building big physical barriers (back-up dams) to contain the tailings in case of failure. To mitigate the risk of life losses, we are considering alternatives to perform the works in these critical dams with remotely-operated equipment and the design is being reviewed with proper redundancy levels.



•

In 2020, we spent a total of US$293 million in connection with the decharacterization of dams. As of December 31, 2020, we had a US$2.289 billion provision recognized in our balance sheet for the decharacterization of upstream structures.

Monitoring and precautionary measures.    We have been closely monitoring our active and inactive dams. Among other measures to improve our tailings and dam management system, we have dedicated teams with enhanced governance and revised processes and standards. We have created three geotechnical monitoring centers since 2019, to continuously monitor the dams and to collect information for better decision making. We have implemented 24-hour video monitoring, emergency sirens, water level monitoring in different areas of dam and satellite and drone image and radar monitoring.

Under applicable Brazilian regulations, we must submit to the authorities a certification of stability (Stability Condition Statement, or "DCE") from an independent expert for each of our dams. For 104 of

​	​	​	​	​
​	​ ​	​ 21	​ ​	​

Table of Contents

Business Overview

our geotechnical structures, the DCE must be submitted semi-annually, on March 31 and September 30 of each year. If we are unable to comply with safety requirements for issuance of the DCE of a certain dam, we need to take certain emergency actions based on the Emergency Action Plan for Mining Dam ("PAEBM") for this dam, which may include the suspension of related operations, evacuation of the area surrounding the dam and removal of communities.

•

In January 2020, we implemented the function of "Engineer of Record" ("EoR") for our iron ore business, responsible for carrying out regular dam safety inspections for each dam, as well as the issuance of monthly technical reports, in a model of continuous supervision. This is another line of defense for dam safety, under which if a change in the stability of any of our structures is identified, a new audit process may be initiated to issue or revoke a DCE at any moment. We have implemented continuous monitoring through an EoR in all 104 structures.



•

As of December 31, 2020, an EoR issued DCEs for 72 structures (61 structures in our ferrous minerals operations and 11 in our base metals operations). We did not obtain DCEs for 32 structures (all of them in our ferrous minerals operations).



•

In 2019 and 2020, we relocated 1,415 people residing in the self-rescue zones of the Sul Superior dam (in Barão de Cocais, Minas Gerais), the Vargem Grande dam and the B3/B4 dam at the Mar Azul mine (in the city of Nova Lima, Minas Gerais), the Doutor dam (in Ouro Preto, Minas Gerais) and the Forquilhas I and 2 dams (in Itabirito, Minas Gerais).

Additional information on the status of DCEs and emergency levels of our structures is available on our ESG Portal, at www.vale.com/esg. Information in our website is not incorporated by reference in this annual report on Form 20-F.

Review of our active and inactive mining sites.    We are reviewing our active and inactive mining sites to improve geotechnical management and ensure compliance with applicable rules. As part of our ongoing review of our mining sites, we may identify other structures that should be classified as dams under applicable regulations, which may trigger additional obligations or precautionary measures. These measures could impact our production, cause the suspension of operations and generate additional costs, which could materially and adversely affect our business.

Stabilization of production.    In 2020, we partially resumed our iron ore fines operations that had been suspended in 2019.

Settlement agreements

We have been actively seeking non-judicial alternatives to promote a more expedited reparation and remediation to the impacted people and to settle the various legal proceedings relating to the Brumadinho dam rupture. Below is a summary of key settlement agreements we have entered so far.

Global Settlement for Full Reparation.    On February 4, 2021, we entered into a court-supervised settlement agreement with the Government of the State of Minas Gerais, the Public Defender Office of the State of Minas Gerais (Defensoria Pública de Minas Gerais), public prosecutors of the State of Minas Gerais (Ministério Público do Estado de Minas Gerais—"MPMG") and federal prosecutors (Ministério Público Federal—"MPF") for the reparation and remediation of socio-environmental and social-economic damages resulting from the Brumadinho dam rupture (the "Global Settlement"). This agreement was mediated by the Court of Appeals of the State of Minas Gerais.

​	​	​	​	​
​	​ ​	​ 22	​ ​	​

Table of Contents

Business Overview

•

Under the Global Settlement, we agreed on a number of socio-economic and socio-environmental reparation projects, with an estimated economic amount of R$37.7 billion. The agreement includes our obligations to (i) fund certain agreed socio-economic and socio-environmental projects that will be managed by the State of Minas or by the courts, subject to a fixed disbursement schedule of predefined amounts, and (ii) implement directly certain projects established in the Global Settlement. The estimated economic value of the Global Settlement includes: (i) disbursements made prior to the settlement date of scope similar to the agreement, in an amount of R$7.8 billion; (ii) disbursements required for implementation of projects to be managed by the authorities, for a total specified amount of R$19.2 billion; (iii) estimated costs of the socio-economic reparation projects to be directly implemented by us, subject to a cap of R$5.7 billion; and (iv) estimated costs of R$5 billion of environmental recovery projects to be implemented by us. The estimated costs of the projects to be implemented by us are not a cap to our commitments under the Global Settlement.



•

Projects contemplated in the agreement are in line with our Full Reparation Program, and include (i) projects demanded by the affected communities, (ii) a program of income transfer to the impacted population, replacing the current payment of emergency aid, (iii) projects for the city of Brumadinho and for the other municipalities of the Paraopeba Basin, (iv) funding for the Government of the State of Minas Gerais to implement an urban mobility program and (v) a public service strengthening program.



•

This agreement settles certain public civil actions in which public authorities sought damages and a wide range of injunctive measures against us as a result of the Brumadinho dam rupture. Part of our commitments under the agreement were settled with the release, for the benefit of the authorities, of judicial deposits we had made in the amount of R$5.4 billion (US$ 1.039 billion), to be used in the implementation of projects under the Settlement Agreement. Individual claims for severable damages are excluded from the Global Settlement. See—Other settlement agreements below and Additional Information—Legal proceedings.



•

We will be discharged of the obligations established in the Global Settlement upon (a) the full payment of our financial commitments, in accordance with the amounts and payment schedule defined for the projects managed by the State of Minas Gerais and judicial authorities, and (b) the conclusion by Vale of the projects to be implemented directly by us, which mainly include socio-economic and environmental repair projects.



•

The Global Settlement also establishes guidelines for the governance and implementation of the Full Reparation Program.

As a result of the Global Settlement and based on our cash outflow expectations, we recognized a provision in the amount of R$19.924 billion (US$ 3.872 billion) in our 2020 fiscal year. For a discussion of the impacts of the dam rupture on our business and operations, see Overview—Risk factors—Risks relating to dam rupture and see Operating and Financial Review and Prospects—Overview—Tailing dam rupture in Brumadinho.

Other settlement agreements.    We have entered into other settlement agreements with public authorities to establish the framework for individual indemnification of the victims, in addition to individual settlement agreements with the victims.

​	​	​	​	​
​	​ ​	​ 23	​ ​	​

Table of Contents

Business Overview

•

February 2019 preliminary settlement agreement.  In February 2019, we entered into a preliminary settlement agreement with the state of Minas Gerais and other public authorities pursuant to which we committed to make monthly emergency aid payments to residents of Brumadinho and certain communities located downstream of the dam from January 2019 through February 2021. As of March 18, 2021, the total amount paid as emergency aid was approximately R$2 billion, and these amounts were recognized within the R$37.7 billion Global Settlement. Also under the Global Settlement, we will provide R$4.4 billion to the income transfer program that will replace the monthly emergency aid payments. This program will be administered and operated by the judicial authorities.



•

April 2019 preliminary settlement agreement with Minas Gerais state public defenders.  In April 2019, we entered into an agreement with the public defenders' office of the state of Minas Gerais to establish the framework for out-of-court settlement agreements for damage claims for property and other economic and moral damages (danos morais). As of March 18, 2021, we had entered into more than 3,500 indemnification agreements with over 7,670 individuals affected by the dam rupture, providing for payments in the aggregate amount of approximately R$1,300 million. These standards were also used to determine indemnification payments in other municipalities where evacuations occurred as result of the elevation of the emergency level of certain dams. As of March 4, 2021, we had entered into more than 1,100 indemnification agreements with individuals or groups affected by the evacuation of certain areas, providing for payments in the aggregate amount of approximately R$500 million.



•

Settlement agreement with public labor prosecutors and labor unions.  In July 2019, we entered into a settlement agreement with the public labor prosecutors to indemnify relatives of the victims of the dam rupture. As of March 18, 2021, we had entered into more than 675 indemnification agreements with individuals or groups pursuant to this settlement agreement, providing for payments to family members of 249 workers (of the 250 deceased workers), in the aggregate amount currently exceeding R$1,180 million. In March 2020, we entered into a settlement agreement with labor unions, setting forth the indemnification amount to be paid to survivor workers and workers based on the Córrego do Feijão and Jangada Mines. As of March 18, 2021, we had entered into more than 700 indemnification agreements with individuals or groups pursuant to this settlement agreement, providing for payments in the aggregate amount of approximately R$102 million.



•

Other agreements.  We have entered into other agreements with authorities to cover specific topics, such as support to the municipalities in providing public services and infrastructure, emergency payments to the indigenous communities, specific remediation and compensation measures, external audits and asset integrity studies, provision of technical support for the authorities, with measures to review and reinforce structures and suspension of operations.

Other legal proceedings and investigations relating to the Brumadinho dam rupture continue, and new investigations and legal proceedings may be brought in the future. See Additional Information—Legal proceedings.

​	​	​	​	​
​	​ ​	​ 24	​ ​	​

Table of Contents

Business Overview

Cultural transformation

We are promoting a cultural transformation, seeking to bring safety, people and reparation to the center of our decisions. As part of this effort, we believe that five key behaviors must be present throughout the organization:

•

Obsession with safety and risk management.



•

Open and transparent dialogue.



•

Empowerment with responsibility.



•

Ownership for the whole.



•

Active listening and engaging with society.

In 2019, we began a large-scale implementation of Vale Management System (VPS) to leverage the cultural transformation process. Through the development of people, the standardization of processes and operational discipline, the VPS inserts and reinforces, in the operational routine, the key behaviors and protocols for our strategic matters. See Overview—Business Overview—Safety and operational excellence.

In 2020, we conducted a cultural assessment that indicated the need to build a culture of learning together, with humility, discipline, a sense of collectivity, and, mainly, unceasing vigilance about safety. Based on the results of this assessment, we have promoted a number of initiatives to strengthen controls and corporate governance, and to promote changes in our internal organization, our culture, and our ability to identify risks and take action to address them. These initiatives also reflect our responses to the recommendations we received in the report issued in February 2020 by the Independent Ad Hoc Consulting Committee for Investigation (CIAEA). We have established a timeline for actions to comply with the recommendations from the CIAEA, and by 2020 approximately 90% of these recommendations had already been fully addressed. We expect to address the remaining recommendations by December 2022. Additional information on the status of our actions in response to the recommendations from the CIAEA is available on our ESG Portal, at www.vale.com/esg. Information in our website is not incorporated by reference in this annual report on Form 20-F.

We have also developed a project named "purpose of Vale", which involved 60 leaders who recovered the history and essence of Vale. In 2021, we defined our purpose as: "We exist to improve life and transform the future. Together." The purpose is a clear orientation for our actions and objectives, and is supported by four pillars: (i) serving society, returning value to all, (ii) making together, (iii) using our mobilizing capacity to make something extraordinary, and (iv) transforming the future, taking care of the present.

​	​	​	​	​
​	​ ​	​ 25	​ ​	​

Table of Contents

Business Overview

RUPTURE OF SAMARCO'S TAILINGS DAM IN MINAS GERAIS

In November 2015, the Fundão tailings dam owned by Samarco ruptured, 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 June 2016, Samarco, Vale and BHPB, in agreement with public authorities, created Fundação Renova, a not-for-profit private foundation, to develop and implement (i) social and economic remediation and compensation programs and (ii) environmental remediation and compensation programs in the region affected by the dam rupture. Fundação Renova has been implementing 42 remediation programs established under the settlement agreements entered into with public authorities, following the governance mechanisms established in these settlement agreements.

•

In August 2020, we announced the "Agenda Integrada" program, a settlement agreement among Fundação Renova, the states of Minas Gerais and Espirito Santo and an association of mayors of cities along the Doce river, providing for the allocation of R$882 million to investments in education, infrastructure, and health in the region impacted by the rupture of the Samarco dam.



•

In July 2020, the 12^th Federal Court in Belo Horizonte issued a decision providing guidelines for compensation to be paid to residents of the city of Baixo Guandu, followed by other decisions setting simplified parameters for the compensation of workers (mainly informal workers), in at least 20 cities and villages in the states of Minas Gerais and Espirito Santo. These parameters may be reflected throughout other cities along the Doce river. As of March 10, 2021, more than 6,500 workers had received payments through this new simplified compensation mechanism.



•

For a discussion of the funding of Fundação Renova and the impact on our financial statements, see Operating and Financial Review and Prospects—Overview—Fundação Renova and Samarco Funding.



•

For a discussion of the legal proceedings resulting from the rupture of Samarco's tailings dam, the settlement agreements we entered into with public authorities and the creation of Fundação Renova, see Additional Information—Legal proceedings.



•

For further information on the actions taken by Fundação Renova, see the following website: http://www.vale.com/esg/en/Pages/RenovaFoundation.aspx. Information on our website is not incorporated by reference in this annual report on Form 20-F.

Since the rupture of the Fundão dam, Samarco has been subject to extensive litigation and is in a situation of financial distress. Samarco has defaulted in a number of financing agreements and is engaged in discussions with creditors for a potential debt restructuring. See Overview—Risk factors—Legal, Political, Economic, Social and Regulatory Risks—Legal proceedings and investigations could have a material adverse effect on our business.

​	​	​	​	​
​	​ ​	​ 26	​ ​	​

Table of Contents

SELECTED FINANCIAL DATA

The tables below present selected consolidated financial information as of and for the years indicated. You should read this information together with our consolidated financial statements in this annual report.

Consolidated statement of income data