Vale S.A.


Vale, formerly Companhia Vale do Rio Doce, is a Brazilian multinational corporation engaged in metals and mining and one of the largest logistics operators in Brazil. Vale is the largest producer of iron ore and nickel in the world. It also produces manganese, ferroalloys, copper, bauxite, potash, kaolin, and cobalt; as of 2014 the company operated nine hydroelectricity plants, and a large network of railroads, ships, and ports used to transport its products.
The company has had two catastrophic tailings dam failures in Brazil: Mariana, in 2015, and Brumadinho, in 2019; the Brumadinho dam disaster caused the company to lose its license to operate eight tailings dams in Minas Gerais, and its stock to drop nearly 25 percent in price.

Current operations

Although the company's primary operations are in Brazil, Vale has operations in 30 countries, which are detailed below and on the company's website.

Ownership structure

The company is listed on the stock exchanges of São Paulo, New York City, Jakarta, Paris and Madrid.

Mining business

Iron ore: Vale is the world's largest iron ore producer. Sales of iron ore fines and pellets represented 65% of total company revenues in 2014. In 2014, Vale sold 256 million metric tonnes of iron ore fines and 44 million metric tonnes of iron ore pellets. Vale's Mariana Hub was the 9th largest iron ore mining center in the world in 2014, with an output of 39 million metric tonnes. Vale's Serra Sul / S11D is the largest mining reserve in the world. The company's iron ore mines are primarily in Brazil.
Nickel: Vale is the world's largest nickel producer. Sales of nickel represented 17% of total company revenues in 2014. In 2014, Vale sold 272,000 metric tonnes of nickel. The company owns nickel mines in Canada, Indonesia, New Caledonia and Brazil. Tesla is known to buy the majority of their nickel from Vale. In May 2022, Vale said that it had signed a long-term deal of supplying nickel for Tesla. The agreement involves supplying low-carbon Class 1 nickel which Tesla needs for its electric vehicles' batteries. In line with this, Vale is pushing to increase its exposure to the electric vehicle industry.
Fertilizer products, primarily phosphates and nitrogen: Sales of fertilizer products represented 6% of total company revenues in 2014. In 2014, Vale sold 9 million metric tonnes of fertilizer products.
Copper: Sales of copper concentrate represented 4% of total company revenues in 2014. In 2014, Vale sold 353,000 metric tonnes of copper. The company owns copper mines in Brazil, Canada, Chile and Zambia.
Manganese and alloys: Sales of manganese and alloys represented 1% of total company revenues in 2014. In 2014, Vale sold 2 million metric tonnes of manganese and alloys.
Coal: Sales of coal represented 2% of total company revenues in 2014. In 2014, Vale sold 7.5 million metric tonnes of coal. The company owns coal mines in Australia and Mozambique.

Logistics

Railroads

From 2000 to 2006, Vale invested more than $1.3 billion on the acquisition of over 361 locomotives and around 14,090 freight cars, those locomotives were primarily for iron ore transportation, but some were for regular cargo. Some of the locomotives purchased were secondhand for refurbishment but at least 55 of the locomotives acquired were new ones of the model EMD SD70M, each one costing about $2 million.
After those investments, Vale became the owner of over 800 locomotives and more than 35,000 freight cars.
Vale owns the concession of three Brazilian railways: Vitória-Minas Railway, Ferrovia Centro-Atlântica and Carajás railroad.
  • Vitória a Minas railroad — Vale operates under a 30-year contract this 905 km, railroad, which is used to transport iron from the Iron Quadrangle in Minas Gerais to the Port of Tubarão in the state of Espírito Santo. The concession expires in 2027. This railroad also carried 1.1 million passengers in 2006.
  • Carajás railroad — The concession of this 892 km, gauge railroad also expires in 2027, it links Carajás iron ore mines in the state of Pará to Ponta da Madeira port terminal in the state of Maranhão. Vale operates a train of 3.2 km and 340 cars on this railroad.
  • Ferrovia Centro-Atlântica — Vale controls this railroad through the subsidiary FCA. As it is shown on the Vale's operations map above, this 7,000 km, railroad extends through 6 Brazilian states, this railroad originally belonged to the RFFSA. Vale's concession of this railroad expires in 2026.
  • Vale also has a stake in railway operators in Mozambique and Malawi via the Nacala Logistics Corridor.

    Ports and container terminals

Brazil
On February 5, 2019, the state court of the Province of Minas Gerais ordered Vale to halt use of eight of its tailings dams, including the Laranjeiras dam at Brucutu.
  • Port of Tubarão — Vale owns and operates this port located in Vitória, Brazil in the state of Espírito Santo. It's the largest iron ore embarking port in the world. Around 80 million metric tonnes of iron ore are shipped through this port.
  • Ponta da Madeira — Located in the state of Maranhão, it ships around 70 million metric tonnes mostly of iron ore, but also of manganese and copper for the company; it is being upgraded for the S11D project
  • Port of Sepetiba — Vale operates two maritime terminals in the Port of Sepetiba area located in the state of Rio de Janeiro, together they ship around 60 million metric tonnes of iron ore.
  • Feijão mine — site of the Brumadinho dam disaster on 25 January 2019.
Vale also operates port terminals in the state of Sergipe and two others in the state of Espírito Santo.
Malaysia
Vale has also entered the shipping business by ordering 35 Very Large Ore Carriers to transport iron ore between South America and Asia. These, 400,000 DWT ships are the longest and largest dry bulk carriers in the world. The first ship, Vale Brasil, was delivered in March 2011.

Energy

Vale's energy business is focused on power production to fulfill the needs of its mining operations, as well as supplying the general Brazilian power grid. In 2005, it consumed 16.9 TWh of electrical power, accounting for 4.4% of Brazil's total consumption in that year.
Vale has participation in 8 hydroelectric plants, with 7 of these located in the state of Minas Gerais. Vale's investment in hydroelectric power plants totals $880 million. The company also plans to build a 600 MW thermoelectric power plant in the state of Pará.
In 2011, Vale S.A. bought 70% of Biopalma for US$ 173.5 million for the production of B20 fuel for Petrobras. The company was sold in 2020 for Brasil BioFuels after a liability of R$ 965 million.
Vale also operates hydroelectric plants in Canada and Indonesia.

Rebranding

In November 2007, the company retired the name CVRD in favour of simplified company name of Vale, and rebranded.

History

Companhia Vale do Rio Doce was founded in Itabira, Minas Gerais, by the Brazilian Federal Government on 1 June 1942.
One year later the Vitória a Minas railroad was inaugurated.
The 1950s marked Companhia Vale do Rio Doce's entry into the global iron ore market, after the company's mine-railroad-port complex was modernized and iron ore prices doubled. At first, sales were mostly to the United States, but exports to Europe increased over the course of the decade.
In 1966, the company inaugurated in Espírito Santo the Port of Tubarão, which was to become the most important port for CVRD and is still used to export iron ore mined from the Iron Quadrangle in Minas Gerais.
The company acquired a majority interest in the Carajás Mine, with over 1.5 billion tonnes of iron ore in reserves, in 1970.
In 1974, Vale became the world's biggest exporter of iron ore, a title which it still holds today.
In 1982, Vale began to diversify after it started to produce aluminium in Rio de Janeiro.
In the early-to-mid-1980s, profits increased considerably under the leadership of Eliezer Batista, father of Eike Batista.
In 1985, Vale started to explore the Carajás Mine in the state of Pará just after the gauge Carajás railroad was opened.
In 1986, Ponta Madeira port terminal, which is still used to export iron ore mined at the Carajás Mine, was inaugurated in the state of Maranhão.
In March 2017, Vale SA chose a commodities industry veteran, Fabio Schvartsman, as chief executive officer. Schvartsman was CEO of Klabin SA, Brazil's largest paper and cardboard producer, for the previous six years.

Privatization in 1997

In May 1997, despite protests by Vale employees and some politicians, the Brazilian Government auctioned a 41.73% interest in the company, which was sold for R$3.34 billion. The largest interest purchased was a 16.3% stake purchased by Brazilian steel company Companhia Siderúrgica Nacional.

Sale of wood pulp businesses

In 2001, Vale sold its Cenibra wood pulp business to Aracruz and Votorantim Celulose e Papel jointly for US$670.5 million to focus on mining and logistics.
In 2002, Vale sold 100,000 acres of land and the eucalyptus forests thereon related to its wood pulp business for R$137 million.

Sale of steel businesses

In 2000, the company sold its stake in Açominas to Gerdau in exchange for preferred shares in Gerdau.
In 2001, Vale sold its stake in Companhia Siderúrgica Nacional for R$520 million.
In 2004, Vale sold its stake in CST to Arcelor for US$415.1 million.
In 2006, Vale sold its interest in Siderar to Ternium for US$107.5 million.
In 2006, the company sold 5,362,928 shares in Usiminas for or R$378.6 million. In 2007, the company sold the majority of its stake in Usiminas. In 2009, the company sold its remaining stake in Usiminas.