【Four major Iron mines】：Vale SA

1. introduction of the company

Vale do Rio Doce (Companhia Vale do Rio Doce), also known as Vale and trademarked as VALE, was founded on June 1, 1942, and is headquartered in Rio de Janeiro, Brazil. Known as Brazil's "Crown Jewel" and the "Engine of the Amazon," it is the world's second-largest iron ore producer after Rio Tinto and one of the world's largest nickel producers. It also produces a variety of minerals, including manganese ore, ferroalloys, coking and thermal coal, copper, gold, silver, and cobalt. VALE currently has mining operations in five countries (Brazil, Canada, Peru, Chile, and Indonesia) and operates a large-scale logistics network, including railways, marine terminals, and ports, in Brazil and over 30 countries and regions worldwide. These are closely integrated with its mining operations. VALE also operates distribution centers in Malaysia and Oman to support global iron ore delivery. Vale's iron ore production accounts for approximately 75% of Brazil's total.

Focusing on Vale's iron ore business, Vale operates four iron ore production and distribution systems in Brazil. Vale's iron ore pelletizing business is conducted partially through joint ventures, operating eight pelletizing plants in Brazil (including two green pelletizing plants) and one in Oman. The company also owns a 50% stake in Samarco and a 25% stake in Anyang, a Chinese iron ore pelletizing company. Vale's iron ore production peaked at 385 million tons in 2018, capturing a 16.4% share of the global iron ore market that year. However, on January 25, 2019, a tailings dam belonging to Vale in Minas Gerais, Brazil, collapsed, severely impacting its iron ore production operations, which are currently undergoing recovery.

◼Business in China

Vale was one of the first companies in the world to export iron ore to China. Vale shipped its first shipment of iron ore to China in 1973. Since 2006, China has been Vale's largest market, accounting for approximately 50% of Vale's revenue and approximately 60% of its iron ore production. As of August 2023, Vale had supplied nearly 3 billion tons of iron ore to China. Vale China is located in Shanghai and has established blending facilities and processing plants in various regions and ports across the country.

◼Vale Group's revenue components in 2024 (US$ billion)

Data source: Vale ; SMM

2. Iron ore production

Before 2019, Vale was the world's largest iron ore producer. However, on January 25, 2019, a tailings dam (Dam I) collapsed at the Córrego do Feijo mine in the Paraopeba mining area of ​​its Southern System , causing significant casualties and property damage. Production in the Southern System fell to 37.8 million tons that year, recovering slightly to 48.4 million tons in 2020. Since then, Vale has been recovering. In fiscal year 2024, Vale's iron ore production was expected to be approximately 327 million tons. The production target for fiscal year 2025 is 325-335 million tons.

◼Vale's production and shipments over the years

Data source: Vale ; SMM

◼Main Products

Data source: Vale ; SMM

3. Group’s Mines

◼Introduction to affiliated mines

1. The Northern System, located in the Carajás region of Pará State, Brazil, is Vale's largest iron ore producing area. Its iron ore, with a grade of up to 67% Fe, is considered the highest quality in the world. It is divided into three mining complexes: Serra Norte, Serra Sul, and Serra Leste (northern, southern, and eastern). These five mining areas comprise the S11D mining area in Serra Sul, which is the primary focus for future production increases. This mine began operations in 2016. The Northern System's ore reserves are primarily hematite, with a high Fe grade (average 66.7%). Its representative product is Carajás fines.

2. The Southern System is located in the Iron Quadrilateral region of Minas Gerais State, Brazil. The mines of Vale's subsidiary, Minerandes Brasileiras Reunidas SA (MBR), are operated at the parent company's level under an asset lease agreement. The Southern System originally consisted of three main mining areas. In 2019, Vale reorganized the Southern System, abolishing the Minas Itabirito mining area. It now consists of two main mining areas: Vargem Grande and Paraopeba, totaling 12 mining areas. On January 25, 2019, a tailings dam (Dam I) at the Córrego do Feijo mine in the Paraopeba area of ​​the Southern System failed, causing significant casualties and property damage. On February 20, 2019, at the request of the Brazilian National Mining Agency, production at the Vargem Grande mine and a portion of the Paraopeba complex were suspended. After a series of cleanup and remediation efforts, production resumed in January and March 2021, respectively. However, production capacity is still recovering. Currently, the Vargem Grande complex has an annual production capacity of approximately 37 million tons; the Paraopeba complex has an annual production capacity of approximately 25 million tons.

3. The Southeast System comprises three mining districts: Itabira, Minas Centrais, and Mariana, with a total of 11 mines. Operations began in 1957, 1994, and 1976, respectively. From 2006 to 2018, total production in the Southeast System fluctuated between 100 million and 120 million tons per year. However, on January 25, 2019, a serious tailings dam failure occurred at the Córrego do Feijo mining district in the Southern System. Subsequently, the Brazilian government strengthened its oversight of tailings dam safety, revoking licenses and issuing court orders to halt production at some of Vale's mines. Vale also voluntarily suspended operations through a series of measures, including decharacterization of upstream dams, to improve tailings dam safety. This ultimately led, directly and indirectly, to significant production reductions in the Southeast System for two consecutive years: production fell from 104 million tons in 2018 to 73.1 million tons in 2019, and to 57.3 million tons in 2020. In addition to the tailings disposal issue, the Southeast System's significant production reduction in 2020 was also due to various other factors. For example, the Fazendo mine in the Mariana mining area was shut down for four months due to mining license issues, resulting in a 2.9 million ton production reduction. Furthermore, production restrictions caused by the COVID-19 pandemic (including a 12-day shutdown at Itabira in June, resulting in a 1 million ton production reduction) contributed to a further decline in Southeast System production in 2020 compared to 2019. However, Southeast System production has begun to recover in 2021. VALE restarted its Capanema mine in September 2025. Its current annual production capacity is 15 million tons, and it is expected to reach 18 million tons by the end of 2025.

4. The Central and Western System , located in Mato Grosso do Sul state, Brazil, comprises two mines: Corumbá and Urucum. Urucum was originally part of the Southeast System, while Corumbá was acquired by VALE in 2009. Both mines are located inland, far from ports, making transportation difficult. Iron ore products must be transported by barge across the Paraguayan and Paraná Rivers to the Uruguayan port of Nueva Palmira for export to Asia or Europe, or delivered to customers at the nearby port of Corumba, resulting in high costs. Since 2015, VALE's financial reports have stated that, based on its assessment, the Urucum and Corumbá mines are not economically viable, and therefore the company has stopped disclosing reserves at the mines. Since 2017, production has remained stable at around 2.5 million tons.

4. Pelletizing business of the Group

◼ Vale iron ore pellet business

VALE produces iron ore pellets directly and through joint ventures in Brazil and Oman. It operates 11 pelletizing plants, including 10 in Brazil and one in Oman, with a total nominal capacity estimated at 95.2 million tonnes/year (excluding Anyang in China). One pelletizing plant, located in São Luís, Brazil, is currently suspended due to market fluctuations.

In 2020, 57% of Vale's pellet production was blast furnace pellets and 43% was direct reduction pellets. This has remained largely unchanged. Blast furnace and direct reduction are different technologies used by steel mills to produce steel, each using different types of pellets. Brazil and Asia (primarily China and Japan) are Vale's primary markets for blast furnace pellets, while the Middle East and North America are its primary markets for direct reduction pellets.

5. Ongoing Projects

◼Ongoing projects focus on safety improvements and capacity expansion at its mines.

The Serra Sul +20mt project, located in the Carajás region of Pará state , expands the processing capacity of the S11D mine in the Northern System. Upon completion, it will add 20 million tons of annual production capacity, bringing the total to 120 million tons. It is expected to be operational in the second half of 2026.

The Apolo project, located in Minas Gerais state, is part of the Southeast System. It comprises a mine, a waste treatment plant, a waste dump, and an 8-kilometer railway line connecting to the existing Vitoria-Minas railway line. The project focuses on eliminating the need for tailings dams and aims to obtain an operating license in 2028. It has a planned annual production capacity of approximately 14 million tons.

The Iron Bear project, located near the border of Newfoundland and Labrador and Quebec, Canada, is being developed by a joint venture between VALE and Australia's Cyclone Metals (VALE holds a 75% interest). Trial production has yielded an iron ore grade of 71.3%. A pre-feasibility study (PFS) is expected to begin by the end of 2025, with a mining decision expected by April 2028.

Data source: Vale ; SMM