6-K 1 a19-24256_36k.htm 6-K

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United States

Securities and Exchange Commission

Washington, D.C. 20549

 

FORM 6-K

 

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

of the

Securities Exchange Act of 1934

 

For the month of

 

December 2019

 

Vale S.A.

 

Praia de Botafogo nº 186, 18º andar, Botafogo
22250-145 Rio de Janeiro, RJ, Brazil

(Address of principal executive office)

 

(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)

 

(Check One) Form 20-F  x  Form 40-F  o

 

(Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1))

 

(Check One) Yes  o  No  x

 

(Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7))

 

(Check One) Yes  o  No  x

 

(Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)

 

(Check One) Yes  o  No  x

 

(If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b). 82-   .)

 

 

 


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Table of Contents:

 

Press Release

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Signature Page

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GRAPHIC

Press Release

GRAPHIC

 

Vale informs on estimates update

 

Rio de Janeiro, December 2nd, 2019 - Vale S.A. (Vale), informs that it has updated its estimates in an event held today with investors in New York.

 

Estimated production volumes

 

 

 

2020E

 

2021E

 

2022E

 

2023E

 

Iron Ore (Mt)(1)

 

340 - 355

 

375 - 395

 

390 - 400

 

390 - 400

 

Copper (kt)

 

400

 

430

 

460

 

480

 

 

Nickel:

 

·                  Production of 240kt after improvements in the North Atlantic Operations and resumption of Onça Puma 2nd furnace.

 

·                  Optionality to reach 360kt production in a scenario of 10kt expansion in Sorowako and 110kt of Bahodopi and Pomalaa projects considering full equity in PTVI and associates for Bahodopi and Pomalaa projects.

 

Estimated costs

 

Iron Ore: C1(2) cash cost of US$ 15.0/t in 2019 and varying between US$ 13.0/t - US$ 13.5/t in 2024.

 

Unitary freight costs(3): US$ 18.0/t in 2019 and US$ 16.3/t in 2024.

 

Estimated capex

 

US$ billion

 

2020E

 

2021E

 

Next year’s average

 

Vale total

 

5.0

 

5.0

 

4.5

 

Sustaining(4)

 

4.1

 

4.1

 

 

Growth

 

0.9

 

0.9

 

 

 


(1)  Includes third party purchase, run-of-mine and feed for pelletizing plants.

(2)  Assuming: (i) return of halted operations; (ii) productivity gains; (iii) Fx of BRL 4.00/USD and (iv) others.

(3)  Based on HSFO of US$ 376/t in 2019 and US$ US$ 368/t in 2024 and LSFO of US$ 575/t in 2019 and US$ 537/t in 2024, assuming that vessels equipped with scrubbers will still be allowed to consume high sulphur fuel oil and assuming lower exposure to freight spot market due to the new fleet of Valemax and Guaibamax and other initiatives.

(4)  Includes replacement capex.

 

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Disbursements related to Brumadinho(5)

 

Vale informs that it has updated its estimates related do Brumadinho and that these must be considered as such:

 

US$ million(6)

 

2019E

 

2020E

 

2021E

 

2022E

 

2023-2031E

Provisions

 

1,000 – 1,100

 

1,000 – 1,400

 

1,050 – 1,450

 

500 - 900

 

Up to US$5.4 billion

Incurred expenses

 

650 - 750

 

500 - 600

 

350 - 450

 

250 - 350

 

<100/year

Total

 

1,650 – 1,850

 

1,500 – 2,000

 

1,400 – 1,900

 

750 – 1,250

 

~8,000

 

Estimated free cash flow

 

2022 free cash flow ranging from US$ 7.0 billion to US$ 14.0 billion, depending on the following assumptions: (a) annual average iron ore price ranging from US$ 65/t to US$ 85/t; (b) annual average nickel price ranging from US$ 15,000/t to US$ 20,000/t; (c) Average FX BRL/USD of 4.00 for 2022; (d) US$ 0.7 billion of gold stream in 2022. Free cash flow estimates do not consider dividends, buybacks and bolt-on acquisitions.

 

Estimated EBITDA

 

2022 EBITDA ranging from US$ 15.5 billion to US$ 23.5 billion, depending on the following assumptions: (a) annual average iron ore price ranging from US$ 65/t to US$ 85/t; (b) annual average nickel price ranging from US$ 15,000/t to US$ 20,000/t; (c) Average FX BRL/USD of 4.00 for 2022.

 

Estimated EBITDA breakeven

 

EBITDA breakeven of US$ 37/t for 2019 and potential variation from US$ 28/t to US$ 30/t in the next years.

 

Estimated accumulated free cash flow

 

Accumulated free cash flow from 2020 to 2022 ranging from, approximately, US$ 17 billion to US$ 36 billion, depending on the following assumptions: (a) annual average iron ore price ranging from US$ 65/t to US$ 85/t; (b) annual average nickel price ranging from US$ 15,000/t to US$ 20,000/t; (c) Average FX BRL/USD of 3.92 BRL/USD in 2019 and BRL/USD of 4.00 between 2020 and 2022; (d) includes US$ 6.0 billion of cash surplus in 2019; (e) US$ 0.7 billion of gold stream in 2022; and (f) do not consider dividends, buy-backs and bolt-on acquisition.

 


(5)  Includes reparation disbursements, incurred expenses in reparation and de-characterization projects.

(6)  Except when indicated.

 

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Estimated cash flow drags reduction

 

US$ million

 

2019E

 

2020E

 

2021E

 

2022E

 

Mozambique and VNC

 

1,000

 

680

 

500

 

 

Stoppage expenses

 

900

 

500

 

180

 

 

Samarco(7)

 

400

 

900

 

500

 

160

 

MBR (dividends)

 

200

 

 

 

 

Others

 

300

 

550

 

50

 

 

 

Sustainability targets

 

Vale is committed to sustainability and informs that it has revised its 2030 sustainability goals for more ambitious goals: (i) 100% self-generation of clean energy globally; (ii) recover and protect 500,000 ha of degraded land beyond our boundaries; and (iii) reduce greenhouse gas emissions aligned with the Paris Agreement and become carbon neutral by 2050.

 

Vale clarifies that the information provided in this document represent only an expectation, hypothetical data that by no means constitute a promise of performance by Vale and/or its management. The estimates presented involve market factors that are beyond the control of Vale and, therefore, can be subject to new changes.

 

Additionally, Vale informs that will file again in due course the item 11 of its Reference Form, in the period required by the Instruction CVM number 480 of December 7, 2009, as amended.

 

For further information, please contact:

+55-21-3485-3900

Andre Figueiredo: andre.figueiredo@vale.com

Andre Werner: andre.werner@vale.com

Mariana Rocha: mariana.rocha@vale.com

Samir Bassil: samir.bassil@vale.com

 

This press release may include statements that present Vale’s expectations about future events or results. All statements, when based upon expectations about the future, involve various risks and uncertainties. Vale cannot guarantee that such statements will prove correct. These risks and uncertainties include factors related to the following: (a) the countries where we operate, especially Brazil and Canada; (b) the global economy; (c) the capital markets; (d) the mining and metals prices and their dependence on global industrial production, which is cyclical by nature; and (e) global competition in the markets in which Vale operates. To obtain further information on factors that may lead to results different from those forecast by Vale, please consult the reports Vale files with the U.S. Securities and Exchange Commission (SEC), the Brazilian Comissão de Valores Mobiliários (CVM), and the French Autorité des Marchés Financiers (AMF), and in particular the factors discussed under “Forward-Looking Statements” and “Risk Factors” in Vale’s annual report on Form 20-F.

 


(7)  Includes expenses related to the Renova Foundation.

 

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Signatures

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

 

 

Vale S.A.

 

 

 

(Registrant)

 

 

 

 

 

 

By:

/s/ André Figueiredo

Date: December 2, 2019

 

 

Director of Investor Relations

 

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