Vale S.A. — Regulatory Filings 2012

Jul 25, 2012

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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*

*July, 2012*

*Vale S.A.*

*Avenida Graça Aranha, No. 26 20030-900 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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*Financial Statements*

*June 30, 2012*

*US GAAP*

Filed at CVM, SEC and HKEx on

July 25, 2012

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*Vale S.A.*

*Index to Condensed Consolidated Financial Statements*

	Nr.
Report of independent registered public accounting firm	3
Condensed Consolidated Balance Sheets as of June 30, 2012 and December 31, 2011	4
Condensed Consolidated Statements of Income for the three-month periods ended June 30, 2012, March 31, 2012 and June 30, 2011 and six-month periods ended June 30, 2012 and 2011	6
Condensed Consolidated Statements of Comprehensive Income (deficit) for the three-month periods ended June 30, 2012, March 31, 2012 and June 30, 2011 and six-month periods ended June 30, 2012 and 2011	7
Condensed Consolidated Statements of Cash Flows for the three-month periods ended June 30, 2012, March 31, 2012 and June 30, 2011 and six-month periods ended June 30, 2012 and 2011	8
Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three-month periods ended June 30, 2012, March 31, 2012 and June 30, 2011 and six-month periods ended June 30, 2012 and 2011	9
Notes to the Condensed Consolidated Financial Statements	10

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*Report of independent registered public accounting firm*

To the Board of Directors and Stockholders

Vale S.A.

We have reviewed the accompanying condensed consolidated balance sheet of Vale S.A. (the “Company”) and its subsidiaries as of June 30, 2012, and the related condensed consolidated statements of income, of comprehensive income, of cash flows and of changes in stockholders’ equity, for the three-month periods ended June 30, 2012, March 31, 2012 and June 30, 2011 and for the six-month periods ended June 30, 2012 and June 30, 2011. This interim financial information is the responsibility of the Company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the accompanying condensed consolidated interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet as of December 31, 2011, and the related consolidated statements of income, of comprehensive income, of cash flows and of stockholders’ equity for the year then ended (not presented herein), and in our report dated February 15, 2012, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2011, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived.

PricewaterhouseCoopers

Auditores Independentes

Rio de Janeiro, Brazil

July 25, 2012

PricewaterhouseCoopers, Av. José Silva de Azevedo Neto 200, 1 º e 2 º , Torre Evolution IV, Barra da Tijuca, Rio de Janeiro, RJ, Brasil 22775-056

T: (21) 3232-6112, F: (21) 3232-6113, www.pwc.com/br

PricewaterhouseCoopers, Rua da Candelária 65, 20 º , Rio de Janeiro, RJ, Brasil 20091-020, Caixa Postal 949,

T: (21) 3232-6112, F: (21) 2516-6319, www.pwc.com/br

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*Condensed Consolidated Balance Sheets*

*Expressed in millions of United States dollars*

	June 30, 2012	December 31, 2011
	(unaudited)
Assets
Current assets
Cash and cash equivalents	4,083	3,531
Accounts receivable
Related parties	159	288
Unrelated parties	6,866	8,217
Loans and advances to related parties	349	82
Inventories	5,281	5,251
Deferred income tax	—	203
Unrealized gains on derivative instruments	322	595
Advances to suppliers	303	393
Recoverable taxes	2,167	2,230
Assets held for sale	187	—
Others	1,070	946
	20,787	21,736
Non-current assets
Property, plant and equipment, net	90,103	88,895
Intangible assets	1,055	1,135
Investments in affiliated companies, joint ventures and others investments	8,173	8,093
Other assets:
Goodwill on acquisition of subsidiaries	2,948	3,026
Loans and advances
Related parties	428	509
Unrelated parties	218	210
Prepaid pension cost	1,939	1,666
Prepaid expenses	363	321
Judicial deposits	1,531	1,464
Recoverable taxes	617	587
Deferred income tax	977	594
Unrealized gains on derivative instruments	—	60
Deposit on incentive / reinvestiment	207	229
Others	210	203
	108,769	106,992
Total	129,556	128,728

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*Condensed Consolidated Balance Sheets*

*Expressed in millions of United States dollars*

*(Except number of shares)*

	(Continued) — June 30, 2012		December 31, 2011
	(unaudited)
Liabilities and stockholders’ equity
Current liabilities
Suppliers	4,481		4,814
Payroll and related charges	994		1,307
Minimum annual remuneration attributed to stockholders	—		1,181
Current portion of long-term debt	1,503		1,495
Short-term debt	503		22
Loans from related parties	19		24
Provision for income taxes	141		507
Taxes payable and royalties	282		524
Employees postretirement benefits	110		147
Railway sub-concession agreement payable	64		66
Unrealized losses on derivative instruments	142		73
Provisions for asset retirement obligations	41		73
Liabilities associated with assets held for sale	32		—
Others	908		810
	9,220		11,043
Non-current liabilities
Employees postretirement benefits	2,446		2,446
Loans from related parties	81		91
Long-term debt	23,432		21,538
Provisions for contingencies (Note 16 (b))	1,748		1,686
Unrealized losses on derivative instruments	908		663
Deferred income tax	4,271		5,654
Provisions for asset retirement obligations	1,773		1,697
Debentures	1,410		1,336
Others	1,948		2,460
	38,017		37,571
Redeemable noncontrolling interest	412		505
Commitments and contingencies (Note 16)
Stockholders’ equity
Preferred class A stock - 7,200,000,000 no-par-value shares authorized and 2,108,579,618 (2011 - 2,108,579,618) issued	16,728		16,728
Common stock - 3,600,000,000 no-par-value shares authorized and 3,256,724,482 (2011 - 3,256,724,482) issued	25,837		25,837
Treasury stock - 140,857,692 (2011 - 181,099,814) preferred and 71,071,482 (2011 - 86,911,207) common shares	(4,477	)	(5,662	)
Additional paid-in capital	(369	)	(61	)
Mandatorily convertible notes - common shares	—		290
Mandatorily convertible notes - preferred shares	—		644
Other cumulative comprehensive loss	(7,698	)	(5,673	)
Undistributed retained earnings	39,300		41,130
Unappropriated retained earnings	10,973		4,482
Total Company stockholders’ equity	80,294		77,715
Noncontrolling interests	1,613		1,894
Total stockholders’ equity	81,907		79,609
Total	129,556		128,728

The accompanying notes are an integral part of these financial statements.

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*Condensed Consolidated Statements of Income*

*Expressed in millions of United States dollars*

*(Except per share amounts)*

	(unaudited)
	Three-month period ended						Six-month period ended
	June 30, 2012		March 31, 2012		June 30, 2011		June 30, 2012		June 30, 2011
Operating revenues, net of discounts, returns and allowances
Sales of ores and metals	10,452		9,642		13,659		20,094		25,402
Aluminum products	—		—		—		—		383
Revenues from logistic services	408		403		476		811		804
Fertilizer products	923		830		867		1,753		1,654
Others	367		464		343		831		650
	12,150		11,339		15,345		23,489		28,893
Taxes on revenues	(257	)	(285	)	(356	)	(542	)	(691	)
Net operating revenues	11,893		11,054		14,989		22,947		28,202
Operating costs and expenses
Cost of ores and metals sold	(4,568	)	(4,256	)	(4,361	)	(8,824	)	(8,462	)
Cost of aluminum products	—		—		—		—		(289	)
Cost of logistic services	(331	)	(353	)	(376	)	(684	)	(665	)
Cost of fertilizer products	(734	)	(666	)	(676	)	(1,400	)	(1,321	)
Others	(382	)	(415	)	(308	)	(797	)	(560	)
	(6,015	)	(5,690	)	(5,721	)	(11,705	)	(11,297	)
Selling, general and administrative expenses	(615	)	(529	)	(434	)	(1,144	)	(853	)
Research and development expenses	(359	)	(299	)	(363	)	(658	)	(705	)
Gain (loss) on sale of assets	(377	)	—		—		(377	)	1,513
Others	(604	)	(686	)	(724	)	(1,290	)	(1,144	)
	(7,970	)	(7,204	)	(7,242	)	(15,174	)	(12,486	)
Operating income	3,923		3,850		7,747		7,773		15,716
Non-operating income (expenses)
Financial income	120		119		226		239		391
Financial expenses	(559	)	(613	)	(514	)	(1,172	)	(1,096	)
Gains (losses) on derivatives, net	(416	)	296		358		(120	)	597
Foreign exchange gains (losses), net	(1,748	)	237		501		(1,511	)	784
Indexation gains (losses), net	55		190		77		245		(126	)
	(2,548	)	229		648		(2,319	)	550
Income before discontinued operations, income taxes and equity results	1,375		4,079		8,395		5,454		16,266
Income taxes
Current	(25	)	(813	)	(1,719	)	(838	)	(3,312	)
Deferred
Deferred of period	(151	)	260		(688	)	109		(472	)
Reversal of Deferred Income Tax liabilities (see note 5.a.)	1,236		—		—		1,236		—
	1,060		(553	)	(2,407	)	507		(3,784	)
Equity in results of affiliates, joint ventures and other investments	158		243		406		401		686
Net income	2,593		3,769		6,394		6,362		13,168
Losses attributable to noncontrolling interests	(69	)	(58	)	(58	)	(127	)	(110	)
Net income attributable to the Company’s stockholders	2,662		3,827		6,452		6,489		13,278
Earnings per share attributable to Company’s stockholders:
Earnings per preferred share	0.51		0.74		1.21		1.26		2.50
Earnings per common share	0.51		0.74		1.21		1.26		2.50
Earnings per convertible note linked to preferred share	—		0.97		1.71		—		3.38
Earnings per convertible note linked to common share	—		1.03		1.79		—		3.53

The accompanying notes are an integral part of these financial statements.

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*Condensed Consolidated Statements of Comprehensive Income (deficit)*

*Expressed in millions of United States dollars*

	(unaudited)
	Three-month period ended						Six-month period ended
	June 30, 2012		March 31, 2012		June 30, 2011		June 30, 2012		June 30, 2011
Comprehensive income is comprised as follows:
Company’s stockholders:
Net income attributable to Company’s stockholders	2,662		3,827		6,452		6,489		13,278
Cumulative translation adjustments	(2,820	)	827		1,581		(1,993	)	2,768
Available-for-sale securities
Gross balance as of the period/year end	(2	)	—		(13	)	(2	)	(14	)
Tax (expense) benefit	—		—		11		—		11
	(2	)	—		(2	)	(2	)	(3	)
Surplus (deficit) accrued pension plan
Gross balance as of the period/year end	(69	)	136		(195	)	67		(12	)
Tax (expense) benefit	50		(44	)	63		6		—
	(19	)	92		(132	)	73		(12	)
Cash flow hedge
Gross balance as of the period	(142	)	24		138		(118	)	152
Tax (expense) benefit	30		(15	)	3		15		(6	)
	(112	)	9		141		(103	)	146
Total comprehensive income (deficit) attributable to Company’s stockholders	(291	)	4,755		8,040		4,464		16,177
Noncontrolling interests:
Losses attributable to noncontrolling interests	(69	)	(58	)	(58	)	(127	)	(110	)
Cumulative translation adjustments	24		14		40		38		(14	)
Pension plan	—		—		5		—		5
Cash flow hedge	—		—		—		—		1
Total comprehensive deficit attributable to Noncontrolling interests	(45	)	(44	)	(13	)	(89	)	(118	)
Total comprehensive income	(336	)	4,711		8,027		4,375		16,059

The accompanying notes are an integral part of these financial statements.

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*Condensed Consolidated Statements of Cash Flows*

*Expressed in millions of United States dollars*

	(unaudited)
	Three-month period ended						Six-month period ended
	June 30, 2012		March 31, 2012		June 30, 2011		June 30, 2012		June 30, 2011
Cash flows from operating activities:
Net income	2,593		3,769		6,394		6,362		13,168
Adjustments to reconcile net income to cash from operations:
Depreciation, depletion and amortization	1,084		1,055		979		2,139		1,936
Dividends received	112		60		343		172		593
Equity in results of affiliates, joint ventures and other investments	(158	)	(243	)	(406	)	(401	)	(686	)
Deferred income taxes	151		(260	)	688		(109	)	472
Reversal of deferred income tax	(1,236	)					(1,236	)
Loss on disposal of property, plant and equipment	207		44		19		251		191
Loss (gain) on sale of assets available for sale	377		—		—		377		(1,513	)
Foreign exchange and indexation gains, net	82		(182	)	257		(100	)	153
Unrealized derivative losses (gains), net	642		(114	)	(230	)	528		(442	)
Unrealized interest (income) expense, net	(29	)	47		(41	)	18		(34	)
Others	(73	)	(38	)	(41	)	(111	)	(78	)
Decrease (increase) in assets:
Accounts receivable	425		645		(658	)	1,070		(547	)
Inventories	292		(445	)	(73	)	(153	)	(816	)
Recoverable taxes	(287	)	355		(79	)	68		(191	)
Others	(42	)	(21	)	(280	)	(63	)	(80	)
Increase (decrease) in liabilities:
Suppliers	92		(391	)	246		(299	)	403
Payroll and related charges	284		(601	)	204		(317	)	(152	)
Income taxes	(166	)	(472	)	(24	)	(638	)	452
Others	29		47		(233	)	76		244
Net cash provided by operating activities	4,379		3,255		7,065		7,634		13,073
Cash flows from investing activities:
Short term investments	—		—		540		—		1,793
Loans and advances receivable
Related parties
Others	8		(38	)	(34	)	(30	)	(177	)
Judicial deposits	(76	)	(12	)	(159	)	(88	)	(188	)
Investments	(53	)	(217	)	(26	)	(270	)	(141	)
Additions to property, plant and equipment	(3,228	)	(2,961	)	(3,480	)	(6,189	)	(6,293	)
Proceeds from disposal of investments	366		—		—		366		1081
Net cash used in investing activities	(2,983	)	(3,228	)	(3,159	)	(6,211	)	(3,925	)
Cash flows from financing activities:
Short-term debt
Additions	21		507		51		528		818
Repayments	—		(43	)	(96	)	(43	)	(856	)
Loans
Related parties
Proceeds	—		—		—		—		19
Repayments	—		—		—		—		(1	)
Issuances of long-term debt
Third parties
Proceeds	1,809		1,014		268		2,823		871
Repayments	(502	)	(63	)	(419	)	(565	)	(1,770	)
Transactions of noncontrolling interest	(427	)	(76	)			(503	)
Dividends and interest attributed to Company’s stockholders	(3,000	)	—		(2,000	)	(3,000	)	(3,000	)
Dividends and interest attributed to noncontrolling interest	(35	)	—		(60	)	(35	)	(60	)
Net cash provided by (used in) financing activities	(2,134	)	1,339		(2,256	)	(795	)	(3,979	)
Increase (decrease) in cash and cash equivalents	(738	)	1,366		1,650		628		5,169
Effect of exchange rate changes on cash and cash equivalents	(101	)	25		306		(76	)	474
Cash and cash equivalents, beginning of period	4,922		3,531		11,271		3,531		7,584
Cash and cash equivalents, end of period	4,083		4,922		13,227		4,083		13,227
Cash paid during the period for:
Interest on short-term debt	—		(1	)	(1	)	(1	)	(2	)
Interest on long-term debt	(350	)	(325	)	(374	)	(675	)	(711	)
Income tax	(282	)	(656	)	(1,171	)	(938	)	(2,136	)
Non-cash transactions
Interest capitalized	70		56		69		126		102
Conversion of mandatorily convertible notes using 56,081,560 treasury stock (see note 13).

The accompanying notes are an integral part of these financial statements.

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*Condensed Consolidated Statements of Changes in Stockholders’ Equity*

*Expressed in millions of United States dollars*

*(Except number of shares)*

	(unaudited)
	Three-month period ended						Six-month period ended
	June 30, 2012		March 31, 2012		June 30, 2011		June 30, 2012		June 30, 2011
Preferred class A stock (including twelve golden shares)
Beginning and end of the period	16,728		16,728		10,370		16,728		10,370
Capital increase	—		—		6,358		—		6,358
End of the period	16,728		16,728		16,728		16,728		16,728
Common stock
Beginning and end of the period	25,837		25,837		16,016		25,837		16,016
Capital increase	—		—		9,821		—		9,821
End of the period	25,837		25,837		25,837		25,837		25,837
Treasury stock
Beginning of the period	(5,662	)	(5,662	)	(2,660	)	(5,662	)	(2,660	)
Sales (acquisitions)	1,185		—		—		1,185		—
End of the period	(4,477	)	(5,662	)	(2,660	)	(4,477	)	(2,660	)
Additional paid-in capital
Beginning of the period	(71	)	(61	)	2,188		(61	)	2,188
Change in the period	(298	)	(10	)	(1,870	)	(308	)	(1,870	)
End of the period	(369	)	(71	)	318		(369	)	318
Mandatorily convertible notes - common shares
Beginning and end of the period	290		290		290		290		290
Change in the period	(290	)	—		—		(290	)	—
End of the period	—		290		290		—		290
Mandatorily convertible notes - preferred shares
Beginning and end of the period	644		644		644		644		644
Change in the period	(644	)	—		—		(644	)	—
End of the period	—		644		644		—		644
Other cumulative comprehensive income (deficit)
Cumulative translation adjustments
Beginning of the period	(4,411	)	(5,238	)	934		(5,238	)	(253	)
Change in the period	(2,820	)	827		1,581		(1,993	)	2,768
End of the period	(7,231	)	(4,411	)	2,515		(7,231	)	2,515
Unrealized gain (loss) - available-for-sale securities, net of tax
Beginning of the period	1		1		2		1		3
Change in the period	(2	)	—		(2	)	(2	)	(3	)
End of the period	(1	)	1		—		(1	)	—
Surplus (deficit) of accrued pension plan
Beginning of the period	(475	)	(567	)	61		(567	)	(59	)
Change in the period	(19	)	92		(132	)	73		(12	)
End of the period	(494	)	(475	)	(71	)	(494	)	(71	)
Cash flow hedge
Beginning of the period	140		131		(19	)	131		(24	)
Change in the period	(112	)	9		141		(103	)	146
End of the period	28		140		122		28		122
Total other cumulative comprehensive income (deficit)	(7,698	)	(4,745	)	2,566		(7,698	)	2,566
Undistributed retained earnings
Beginning of the period	42,007		41,130		43,189		41,130		42,218
Transfer from unappropriated retained earnings	(2,707	)	877		1,202		(1,830	)	2,173
Transfer to capitalized earnings	—		—		(14,309	)	—		(14,309	)
End of the period	39,300		42,007		30,082		39,300		30,082
Unappropriated retained earnings
Beginning of the period	7,416		4,482		5,995		4,482		166
Net income attributable to the Company’s stockholders	2,662		3,827		6,452		6,489		13,278
Remuneration of mandatorily convertible notes
Preferred class A stock	(33	)	(11	)	(24	)	(44	)	(42	)
Common stock	(14	)	(5	)	(10	)	(19	)	(18	)
Dividends and interest attributed to stockholders’ equity
Preferred class A stock	(722	)	—		—		(722	)	—
Common stock	(1,043	)	—		—		(1,043	)	—
Appropriation to undistributed retained earnings	2,707		(877	)	(1,202	)	1,830		(2,173	)
End of the period	10,973		7,416		11,211		10,973		11,211
Total Company stockholders’ equity	80,294		82,444		85,016		80,294		85,016
Noncontrolling interests
Beginning of the period	1,846		1,894		2,904		1,894		2,830
Disposals (acquisitions) of noncontrolling interests	(205	)	(62	)	—		(267	)	117
Cumulative translation adjustments	24		14		40		38		(14	)
Cash flow hedge	—		—		—		—		1
Losses attributable to noncontrolling interests	(69	)	(58	)	(58	)	(127	)	(110	)
Net income attributable to redeemable noncontrolling interests	42		51		65		93		133
Dividends and interest attributable to noncontrolling interests	(35	)	(4	)	(59	)	(39	)	(65	)
Capitalization of stockholders advances	10		11		8		21		8
Pension plan	—		—		5		—		5
End of the period	1,613		1,846		2,905		1,613		2,905
Total stockholders’ equity	81,907		84,290		87,921		81,907		87,921
Number of shares issued and outstanding:
Preferred class A stock (including twelve golden shares)	2,108,579,618		2,108,579,618		2,108,579,618		2,108,579,618		2,108,579,618
Common stock	3,256,724,482		3,256,724,482		3,256,724,482		3,256,724,482		3,256,724,482
Buy-backs
Beginning of the period	(268,010,734	)	(268,011,021	)	(147,024,956	)	(268,011,021	)	(147,024,965	)
Conversions	56,081,560		287		—		56,081,847		9
End of the period	(211,929,174	)	(268,010,734	)	(147,024,956	)	(211,929,174	)	(147,024,956	)
	5,153,374,926		5,097,293,366		5,218,279,144		5,153,374,926		5,218,279,144

The accompanying notes are an integral part of these financial statements.

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*Notes to the Condensed Consolidated Financial Statements*

*Expressed in millions of United States dollars, unless otherwise stated*

*1 The Company and its operations*

Vale S.A., (“Vale”, “Company” or “we”) is a limited liability company incorporated in Brazil. Operations are carried out through Vale and our subsidiary companies, joint ventures and affiliates, and mainly consist of mining, basic metals production, fertilizers, logistics and steel activities.

Our principal consolidated operating subsidiaries are the following:

Subsidiary	% ownership	% voting capital	Location	Principal activity
Compañia Minera Miski Mayo S.A.C.	40.00	51.00	Peru	Fertilizer
Ferrovia Centro-Atlântica S. A.	99.99	99.99	Brazil	Logistics
Ferrovia Norte Sul S.A.	100.00	100.00	Brazil	Logistics
Mineração Corumbaense Reunida S.A. - MCR	100.00	100.00	Brazil	Iron Ore and Manganese
PT Vale Indonesia Tbk	59.20	59.20	Indonesia	Nickel
Sociedad Contractual Minera Tres Valles	90.00	90.00	Chile	Copper
Vale Australia Pty Ltd.	100.00	100.00	Australia	Coal
Vale International Holdings GMBH	100.00	100.00	Austria	Holding and Exploration
Vale Canada Limited	100.00	100.00	Canada	Nickel
Vale Coal Colombia Ltd. (see note 5)	100.00	100.00	Colombia	Coal
Vale Fertilizantes S.A	100.00	100.00	Brazil	Fertilizer
Vale International S.A	100.00	100.00	Switzerland	Trading
Vale Manganês S.A.	100.00	100.00	Brazil	Manganese and Ferroalloys
Vale Mina do Azul S. A.	100.00	100.00	Brazil	Manganese
Vale Moçambique S.A.	95.00	95.00	Mozambique	Coal
Vale Nouvelle-Calédonie SAS	74.00	74.00	New Caledonia	Nickel
Vale Oman Pelletizing Company LLC	100.00	100.00	Oman	Pellets
Vale Shipping Holding PTE Ltd.	100.00	100.00	Singapure	Logistics

*2 Basis of consolidation*

All majority-owned subsidiaries in which we have both share and management control are consolidated. All significant intercompany accounts and transactions are eliminated. Subsidiaries over which control is achieved through other means, such as stockholders agreement, are also consolidated even if we hold less than 51% of voting capital. Our variable interest entities in which we are the primary beneficiary are consolidated. Investments in unconsolidated affiliates and joint ventures are accounted under the equity method (Note 10).

We evaluate the carrying value of our equity investments in relation to publicly quoted market prices when available. If the quoted market price is lower than book value, and such decline is considered other than temporary, we write-down our equity investments to the level of the quoted market value.

We define joint ventures as businesses in which we and a small group of other partners each participate actively in the overall entity management, based on a stockholders agreement. We define affiliates as businesses in which we participate as a noncontrolling interest but with significant influence over the operating and financial policies of the investee.

Our participation in hydroelectric projects in Brazil is made via consortium contracts under which we have undivided interests in the assets, and are liable for our proportionate share of liabilities and expenses, which are based on our proportionate share of power output. We do not have joint liability for any obligations. No separate legal or tax status is granted to consortia under the Brazilian law. Accordingly, we recognize our proportionate share of costs and our undivided interest in assets relating to hydroelectric projects.

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*3 Basis of presentation*

Our condensed consolidated interim financial statements for the three-month periods ended June 30, 2012, March 31, 2012 and June 30, 2011 and six-month ended June 30, 2012 and 2011, prepared in accordance with accounting principles generally accepted in the United States of America (“USGAAP”), which differ in certain respects from the accounting practices adopted in Brazil (“BRGAAP”), and the International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standard Board (“IASB”), which are the basis for our annual statutory financial statements, are unaudited. However, in our opinion, these condensed consolidated financial statements includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for interim periods. The results of operations for the three-month periods ended June 30, 2012, and March 31, 2012 and the Six-month period ended June 30, 2012, are not necessarily indicative of the actual results expected for the full fiscal year ending December 31, 2012.

These condensed consolidated interim financial statement should be read in conjunction with our audited consolidated financial statements as of and for the year ended December 31, 2011, prepared in accordance with US GAAP.

In preparing the condensed consolidated financial statements, we are required to use estimates to account for certain assets, liabilities, revenues and expenses. Our condensed consolidated financial statements therefore include various estimates concerning the selection of useful lives of property, plant and equipment, impairment, provisions necessary for contingent liabilities, fair values assigned to assets and liabilities acquired and assumed in business combinations, income tax uncertainties, employee post-retirement benefits and other similar evaluations. Actual results may vary from our estimates.

The Brazilian real is the parent Company’s functional currency. We have selected the US dollar as our reporting currency.

All assets and liabilities have been translated into US dollars at the closing rate of exchange at each balance sheet date (or, if unavailable, the first available exchange rate). All statement of income accounts have been translated to US dollars at the average exchange rates prevailing during the respective periods. Capital accounts are recorded at historical exchange rates. Translation gains and losses are recorded in the Cumulative Translation Adjustments account (“CTA”) in stockholders’ equity.

The results of operations and financial position of our entities that have a functional currency other than the US dollar have been translated into US dollars and adjustments to translate those statements into US dollars are recorded in the CTA in stockholders’ equity.

The exchange rates used to translate the assets and liabilities of the Brazilian operations at June 30, 2012 and December 31, 2011, were R$1.9893 and R$1.8683, respectively.

*4 Accounting pronouncements*

*Newly issued accounting pronouncements*

The Company understands that the recently issued accounting pronouncements that are not effective as of and for the year ending December 31, 2012, are not expected to be relevant for its consolidated financial statements.

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*5 Major acquisitions and Disposals*

*a) Fertilizer Business*

In 2010, through our wholly owned subsidiary Mineração Naque S.A. (“Naque”), we acquired 78.92% of the total capital (being 99.83% the of voting capital) of Vale Fertilizantes S.A. and 100% of the total capital of Vale Fosfatados. In 2011 and beginning of 2012, we concluded several transactions including a public offer to acquire the free floating of Vale Fertilizantes and its delisting which resulted in the current ownership of 100% of the total capital of this subsidiary.

The purchase consideration of the business combination effected in 2010, when control was obtained, amounted to US$5,795. The purchase price allocation exercise was concluded in 2011 and generated a deferred tax liability on the fair value adjustments, determined based on the temporary differences between the accounting basis of those assets and liabilities at fair values and their tax basis represented by the historical carrying values at the acquired entity. According to current Brazilian tax regulations, goodwill generated in connection with a business combination as well as the fair values of assets and liabilities acquired are only tax deductible post a legal merger between the acquirer and the acquiree.

In June 2012, we have decided to legally merge Naque and Vale Fertilizantes. As a result, the carrying amounts of acquired assets and liabilities accounted for at Naque’s consolidated financial statements, represented by their amortized fair values from acquisition date, became their tax basis.

Therefore, upon concluding the merger, there are no longer differences between tax basis and carrying amounts of the net assets acquired, and consequently there is no longer deferred tax liability amount to be recognized. The outstanding balance of the initially recognized deferred tax liability (accounted for in connection with the purchase accounting) totaling US$ 1,236 was entirely recycled through P&L for the six-month period ended June 30, 2012, in connection with the legal merger of Vale Fertilizantes into Naque.

In addition, Naque was then renamed as Vale Fertilizantes.

*b) Sale of coal*

In June 2012, we have concluded the sale of our thermal coal operations in Colombia to CPC S.A.S., an affiliate of Colombian Natural Resources S.A.S. (“CNR”), a privately held company, which includes future compromises around of US$ 121.

The thermal coal operations in Colombia constitute a fully-integrated mine-railway-port system consisting of a coal mine and a coal deposit; a coal port facility; and an equity participation in a railway connecting the coal mines to the port.

The loss on this transaction, of US$355 was recorded in the income statement in the line “Gain (Loss) on sale of assets”

*c) Acquisition of EBM shares*

Continuing the process of optimization its corporate structure, during 2Q12 Vale acquired additional 10.46% of Empreendimentos Brasileiros de Mineração S. A. (EBM), whose main asset is the participation in Minerações Brasileiras Reunidas S. A., which owns mines sites Itabirito, Vargem Grande and Paraopeba. As a result of the acquisition, we increased our share of the capital of EBM to 96.7% and of MBR to 98.3%, and the amount of US$62 are recognized as a result from operations with non-controlling interest in “Stockholders Equity”.

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*6 Income taxes*

There were no changes in the rates of taxes in the countries where we operate in the period. The total amount presented as income tax and social contribution results in the financial statements is reconciled with the rates established by law, as follows:

	Three-month period ended (unaudited)
	June 30, 2012						March 31, 2012						June 30, 2011
	Brazil		Foreign		Total		Brazil		Foreign		Total		Brazil		Foreign		Total
Income before discontinued operations, income taxes, equity results and noncontrolling interests	1,613		(238	)	1,375		2,957		1,122		4,079		7,303		1,092		8,395
Exchange variation (not taxable) or not deductible	—		368		368		—		(200	)	(200	)	—		71		71
	1,613		130		1,743		2,957		922		3,879		7,303		1,163		8,466
Tax at Brazilian composite rate	(548	)	(44	)	(592	)	(1,006	)	(313	)	(1,319	)	(2,483	)	(395	)	(2,878	)
Adjustments to derive effective tax rate:
Tax benefit on interest attributed to stockholders	341		—		341		379		—		379		258		—		258
Difference on tax rates of foreign income	—		164		164		—		296		296		—		219		219
Tax incentives	—		—		—		90		—		90		192		—		192
Reversal/Constitution of provisions for loss of tax loss carryfoward	—		—		—		—		—		—		—		(141	)	(141	)
Other non-taxable, income/non deductible expenses	(46	)	(43	)	(89	)	28		(27	)	1		(63	)	6		(57	)
	(253	)	77		(176	)	(509	)	(44	)	(553	)	(2,096	)	(311	)	(2,407	)
Reversal of deferred tax (see note 5.a)	1,236		—		1,236		—		—		—		—		—		—
Income tax per consolidated statements of income	983		77		1,060		(509	)	(44	)	(553	)	(2,096	)	(311	)	(2,407	)

	Six-month period ended (unaudited)
	June 30, 2012						June 30, 2011
	Brazil		Foreign		Total		Brazil		Foreign		Total
Income before discontinued operations, income taxes, equity results and noncontrolling interests	4,570		884		5,454		11,821		4,445		16,266
Exchange variation (not taxable) or not deductible	—		168		168		—		118		118
	4,570		1,052		5,622		11,821		4,563		16,384
Tax at Brazilian composite rate	(1,554	)	(358	)	(1,911	)	(4,019	)	(1,551	)	(5,570	)
Adjustments to derive effective tax rate:
Tax benefit on interest attributed to stockholders	720		—		720		694		—		694
Difference on tax rates of foreign income	—		460		460		—		967		967
Tax incentives	90		—		90		363		—		363
Other non-taxable, income/non deductible expenses	(18	)	(70	)	(88	)	(50	)	(188	)	(238	)
	(762	)	32		(729	)	(3,012	)	(772	)	(3,784	)
Reversal of deferred tax (see note 5a)	1,236		—		1,236		—		—		—
Income tax per consolidated statements of income	474		32		507		(3,012	)	(772	)	(3,784	)

Whereas published on December 31, 2011, there were no changes in tax incentives received by the company.

The Company is subject to revision of income tax by tax authorities for up to five years in companies operating in Brazil, ten years for operations in Indonesia and up to seven years for companies with operations in Canada.

The reconciliation of the beginning and ending balances is as follows: (see note 16(b)) tax — related actions)

	(unaudited)
	Three-month period ended					Six-month period ended
	June 30, 2012		March 31, 2012	June 30, 2011		June 30, 2012	June 30, 2011
Beginning of the period	272		263	2,623		263	2,555
Increase resulting from tax positions taken	4		4	1,065		8	1,074
Decrease resulting from tax positions taken	—		—	(3,315	)	—	(3,317	)
Cumulative translation adjustments	(5	)	5	(1	)	—	60
End of the period	271		272	372		271	372

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*7 Cash and cash equivalents*

	June 30, 2012	December 31, 2011
	(unaudited)
Cash	1,038	945
Short-term investments	3,045	2,586
	4,083	3,531

All the above mentioned short-term investments are made through the use of low risk fixed income securities, in a way that those denominated in Brazilian Reais are concentrated in investments indexed to the CDI, and those denominated in US dollars are mainly time deposits, with the original due date less than three months.

The increase in cash equivalents during the 2012, is mainly related to the notes issued during the quarter ended June 30, 2012 (note 12).

*8 Inventories*

	June 30, 2012	December 31, 2011
	(unaudited)
Products
Nickel (co-products and by-products)	1,672	1,771
Iron ore and pellets	1,296	1,137
Manganese and ferroalloys	92	240
Fertilizer	493	387
Copper concentrate	139	72
Coal	268	277
Others	40	91
Spare parts and maintenance supplies	1,281	1,276
	5,281	5,251

On June 30, 2012 and December 31, 2011 the inventory includes provision for adjustment to market value for the products nickel and manganese in the amount of US$ 14 and US$ 9, respectively.

*9 Assets and liabilities held for sale*

In July 2012 (subsequent event), we have signed a share purchase agreement to sell our manganese ferroalloys operations in Europe to subsidiaries of Glencore International Plc., a company listed on the London and Hong Kong Stock Exchanges, for US$ 160 in cash, subject to the fulfillment of certain precedent conditions. We recognized a loss of US$ 22 presented in our statement of income as “Gain (Loss) on sale of assets”.

The manganese ferroalloys operations in Europe consist of: (a) 100% of Vale Manganèse France SAS, located in Dunkerque, France; and (b) 100% of Vale Manganese Norway AS, located in Mo I Rana, Norway.

	June 30, 2012 (unaudited)
Assets held for sale
Accounts receivable	46
Recoverable taxes	6
Inventories	91
Property, plant and equipment	42
Other	2
Total	187
Liabilities related to assets held for sale
Suppliers	20
Deferred income tax	4
Others	8
Total	32

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*10 Investments in affiliated companies and joint ventures*

	June 30, 2012 (unaudited)						Investments				Equity in earnings (losses) of investee adjustments (unaudited)										Dividends Received (unaudited)
					Net income (loss) of the						Three-month period ended						Six-month period ended				Three-month period ended			Six-month period ended
	Participation in capital (%)		Net equity		period		June 30, 2012		December 31, 2011		June 30, 2012		March 31, 2012		June 30, 2011		June 30, 2012		June 30, 2011		June 30, 2012	March 31, 2012	June 30, 2011	June 30, 2012	June 30, 2011
	Voting	Total					(unaudited)
Bulk Material
Iron ore and pellets
Companhia Nipo-Brasileira de Pelotização - NIBRASCO (1)	51.11	51.00	333		17		170		173		3		6		15		9		23		26	—	22	26	22
Companhia Hispano-Brasileira de Pelotização - HISPANOBRÁS (1)	51.00	50.89	248		62		126		115		29		2		5		31		8		11	—	20	11	20
Companhia Coreano-Brasileira de Pelotização - KOBRASCO (1)	50.00	50.00	198		30		100		78		8		7		8		15		18		10	—	17	10	17
Companhia Ítalo-Brasileira de Pelotização - ITABRASCO (1)	51.00	50.90	119		14		61		80		1		6		15		7		25		18	—	—	18	—
Minas da Serra Geral SA - MSG	50.00	50.00	52		6		26		29		(3	)	3		(5	)	—		(4	)	—	—	—	—	—
SAMARCO Mineração SA - SAMARCO (2)	50.00	50.00	1,144		697		626		528		140		209		278		349		485		—	—	225	—	475
Baovale Mineração SA - BAOVALE	50.00	50.00	58		4		29		35		2		—		2		2		4		—	—	—	—	—
Zhuhai YPM Pellet e Co,Ltd - ZHUHAI	25.00	25.00	91		1		23		23		—		—		1		—		—		—	—	—	—	—
Tecnored Desenvolvimento Tecnológico SA	43.04	43.04	115		(18	)	51		48		(7	)	(2	)	—		(9	)	(1	)	—	—	—	—	—
							1,212		1,109		173		231		319		404		558		65	—	284	65	534
Coal
Henan Longyu Resources Co Ltd	25.00	25.00	1,258		134		314		282		16		18		18		34		42		—	60	—	60	—
Shandong Yankuang International Company Ltd	25.00	25.00	(195	)	(26	)	(49	)	(43	)	(3	)	(4	)	(4	)	(7	)	(9	)	—	—	—	—	—
							265		239		13		14		14		27		33		—	60	—	60	—
Base Metals
Bauxite
Mineração Rio do Norte SA - MRN	40.00	40.00	299		26		120		144		4		7		1		11		3		—	—	—	—	—
							120		144		4		7		1		11		3		—	—	—	—	—
Copper
Teal Minerals Incorporated	50.00	50.00	467		(6	)	233		234		(2	)	(1	)	(2	)	(3	)	(7	)	—	—	—	—	—
							233		234		(2	)	(1	)	(2	)	(3	)	(7	)	—	—	—	—	—
Nickel
Heron Resources Inc (3)	—	—	—		—		6		6		—		—		—		—		—		—	—	—	—	—
Korea Nickel Corp	25.00	25.00	76		4		19		4		1		—		—		1		—		—	—	—	—	—
Others (3)	—	—	—		—		—		1		—		—		—		—		—		—	—	—	—	—
							25		11		1		—		—		1		—		—	—	—	—	—
Aluminium
Norsk Hydro ASA	22.00	22.00	14,418		127		3,172		3,227		—		28		50		28		50		47	—	52	47	52
							3,172		3,227		—		28		50		28		50		47	—	52	47	52
Logistic
LOG-IN Logística Intermodal SA	31.33	31.33	278		(42	)	93		114		(4	)	(10	)	(2	)	(14	)	(2	)	—	—	—	—	—
MRS Logística SA	46.75	47.59	1,182		126		560		551		19		40		35		59		71		—	—	7	—	7
							653		665		15		30		33		45		69		—	—	7	—	7
Others
Steel
California Steel Industries Inc - CSI	50.00	50.00	352		30		176		161		9		6		7		15		13		—	—	—	—	—
CSP - Companhia Siderurgica do PECEM	50.00	50.00	903		(3	)	452		267		(1	)	(1	)	—		(2	)	—		—	—	—	—	—
THYSSENKRUPP CSA Companhia Siderúrgica do Atlântico	26.87	26.87	5,623		(317	)	1,511		1,607		(46	)	(39	)	(10	)	(85	)	(18	)	—	—	—	—	—
							2,139		2,035		(38	)	(34	)	(3	)	(72	)	(5	)	—	—	—	—	—
Other affiliates and joint ventures
Norte Energia S.A.	9.00	9.00	721		(11	)	65		75		(1	)	—		—		(1	)	—		—	—	—	—	—
Vale Soluções em Energia S.A.(1)	52.77	52.77	188		(76	)	110		145		(8	)	(32	)	(6	)	(40	)	(15	)	—	—	—	—	—
Others	—	—	—		—		179		209		1		—		—		1		—		—	—	—	—	—
							354		429		(8	)	(32	)	(6	)	(40	)	(15	)	—	—	—	—	—
Total							8,173		8,093		158		243		406		401		686		112	60	343	172	593

(1) Although Vale held a majority of the voting interest of investees accounted for under the equity method, existing veto rights held by noncontrolling shareholders.

(2) Investment includes goodwill of US$ 54 in June 30, 2012 and US$58 in December, 2011.

(3) Available for sale.

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*11 Short-term debt*

Short-term borrowings outstanding on June 30, 2012 are from commercial banks for export financing denominated in US dollars with average annual interest rates of 2,03%.

*12 Long-term debt*

	Current liabilities — June 30, 2012	December 31, 2011	Non-current liabilities — June 30, 2012	December 31, 2011
	(unaudited)		(unaudited)
Foreign debt
Loans and financing denominated in the following currencies:
US dollars	788	496	3,588	2,693
Others	54	9	252	52
Fixed Rate Notes
US dollars	—	410	11,378	10,073
EUR	—	—	944	970
Accrued charges	254	221	—	—
	1,096	1,136	16,162	13,788
Brazilian debt
Brazilian Reais indexed to Long-Term Interest Rate - TJLP/CDI and General Price Index-Market (IGP-M)	321	247	4,895	5,245
Non-convertible debentures	—	—	2,375	2,505
US dollars denominated	—	—	—	—
Accrued charges	85	112	—	—
	406	359	7,270	7,750
Total	1,502	1,495	23,432	21,538

The long-term portion at June 30, 2012 (unaudited) was as follows:

2013	2,544
2014	1,237
2015	994
2016	1,650
2017 and after	17,007
	23,432

At June 30, 2012 (unaudited) annual interest rates on long-term debt were as follows:

Up to 3%	4,979
3.1% to 5% (*)	4,551
5.1% to 7%	8,780
7.1% to 9% (**)	4,991
9.1% to 11% (**)	1,105
Over 11% (**)	529
	24,935

(*) Includes Eurobonds. For this operation we have entered into derivative transactions at a cost of 4.71% per year in US dollars.

(**) Includes non-convertible debentures and other Brazilian Real denominated debt that bear interest at the Brazilian Interbank Certificate of Deposit (CDI) and Brazilian Government Long-term Interest Rates (TJLP) plus a spread. For these operations, we have entered into derivative transactions to mitigate our exposure to the floating rate debt denominated in Brazilian Real, totaling US$ 5,879 of which US$ 4,698 has an original interest rate above 7.1% per year. The average cost after taking into account the derivative transactions is 2.86% per year in US dollars.

The average cost of all derivative transactions is 3.12% per year in US dollars.

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Vale has non-convertible debentures at Brazilian Real denominated as follows:

Non Convertible Debentures	Quantity as of June 30, 2012 — Issued	Outstanding	Maturity	Interest	Balance — June 30, 2012	December 31, 2011
					(unaudited)
2nd Series	400,000	400,000	November 20, 2013	100% CDI + 0.25%	2,030	2,167
Tranche “B” - Salobo	5	5	No date	6.5% p.a + IGP-DI	364	364
					2,394	2,531
Long-term portion					2,375	2,505
Accrued charges					19	26
					2,394	2,531

The indexation indices/ rates applied to our debt were as follows (unaudited):

	Three-month period ended — June 30, 2012		March 31, 2012	June 30, 2011	Six-month period ended — June 30, 2012		June 30, 2011
TJLP - Long-Term Interest Rate (effective rate)	1.5		1.5	1.5	3.0		3.0
IGP-M - General Price Index - Market	2.6		0.6	0.7	3.2		3.1
Appreciation (devaluation) of Real against US dollar	(8.6	)	2.0	4.2	(6.6	)	6.5

On July 10, 2012 (subsequent event) we received the amount related to the issue of €750 (US$ 919) notes due 2023. These notes will bear a coupon of 3.75% per year, payable annually, at a price of 99.608% of the principal amount.

In April 2012, through our wholly-owned subsidiary Vale Overseas Limited, we received the amount related to the issue of US$ 1,250 notes due 2022 that were priced in March at a price of 101.345% of the principal amount. The notes will bear a coupon of 4.375% per year, payable semi-annually and will be consolidated with, and form a single series with, Vale Overseas’s US$ 1 billion 4.375% notes due 2022 issued on January 2012. Those notes issued in January, 2012 were sold at a price of 98.804% of the principal amount.

*Credit Lines*

In August 2011, we entered into an agreement with a syndicate of financial institutions to finance the acquisition of five large ore carriers and two capesize bulkers at two Korean shipyards. The agreement provides a credit line of up to US$ 530. As of June 30, 2012, Vale had drawn US$ 265 under the facility.

In October 2010, we signed an agreement with Export Development Canada (“EDC”) to finance our investment program. Under the agreement, EDC will provide a credit line of up to US$ 1 billion. As of June 30, 2012, Vale had drawn US$ 675.

In September 2010, Vale entered into agreements with The Export-Import Bank of China and the Bank of China Limited for the financing to build 12 very large ore carriers comprising a facility for an amount of up to US$ 1,229. The financing has a 13-year total term to be repaid, and the funds will be disbursed during 3 years according to the construction schedule. As of June 30, 2012, we had drawn US$ 712 under this facility.

In June 2010, Vale established certain facilities with Banco Nacional de Desenvolvimento Econômico Social (“BNDES”) for a total amount of R$ 774, (US$ 389), to finance the acquisition of domestic equipments. On March 31, 2011, Vale increased this facility through a new agreement with BNDES for R$ 103 (US$ 52). As of June 30, 2012, we had drawn R$ 641 (US$ 322) under these facilities.

In May 2008, the Company has signed agreements with Japanese long term financing credit agencies in the amount of US$ 5 billion, being US$ 3 billion with Japan Bank for International Cooperation (“JBIC”) and US$ 2 billion with Nippon Export and Investment Insurance (“NEXI”), to finance mining projects, logistics and energy generation. Until June 30, 2012, Vale through its subsidiary PT Vale Indonesia Tbk (“PTVI”) withdrew US$ 300, under the credit facility from NEXI to finance the construction of the hydroelectric plant of Karebbe, Indonesia.

In April 2008, Vale has signed a credit line in the amount of R$ 7.3 billion (US$ 4 billion) with BNDES to finance its investment program. As of June 30, 2012, Vale withdrew R$ 2,849 (US$ 1,432) in this line.

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*Revolving credit lines*

Vale has available revolving credit lines that can be disbursed and paid at any time, during its availability period. On June 30, 2012, the total amount available under the revolving credit lines was US$3 billion, which can be drawn by Vale S.A., Vale Canada Limited and Vale International.

*Guarantee*

On June 30, 2012, US$ 1,088 of the total aggregate outstanding debt was secured by property, plant and equipment and receivables.

*Covenants*

Our principal covenants require us to maintain certain ratios, such as debt to EBITDA and interest coverage. We have not identified any events of noncompliance as of June 30, 2012 .

*13 Stockholders’ equity*

*Stockholders*

Each holder of common and preferred class A stock is entitled to one vote for each share on all matters brought before stockholders’ meetings, except for the election of the Board of Directors, which is restricted to the holders of common stock. The Brazilian Government holds twelve preferred special shares which confer permanent veto rights over certain matters.

Both common and preferred stockholders are entitled to receive a mandatory minimum dividend of 25% of annual adjusted net income under Brazilian GAAP, once declared at the annual stockholders’ meeting. In the case of preferred stockholders, this dividend cannot be less than 6% of the preferred capital as stated in the statutory accounting records or, if greater, 3% of the Brazilian GAAP equity value per share.

In April 2012, the Board of Directors approved the payment of interest on capital in the amount of US$ 3 billion, corresponding to US$ 0.588547644 per outstanding share, common or preferred shares, of Vale issuance.

In November 2011, as part of the share buy-back program approved in June 2011, we concluded the acquisition of 39,536,080 common shares, at an average price of US$ 26.25 per share, and 81,451,900 preferred shares, at an average price of US$ 24.09 per share (including shares of each class in the form of American Depositary Receipts), for a total aggregate purchase price of US$ 3.0 billion.

*Mandatorily convertible*

In June 2012, the notes series VALE and VALE.P-2012 were converted into ADS and represent an aggregate of 15,839,592 common shares and 40,241,968 preferred class A shares respectively. The Conversion was made using 56,081,560 treasury stocks held by the Company. The difference between the conversion amount and the book value of the treasury stocks of US$ (251) was accounted for in additional paid-in capital in the stockholder’s equity.

In May 2012, Vale paid additional remuneration to holders of those mandatorily convertible notes, in the amount of US$ 1.463648 and US$ 1.692869 per note, respectively.

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*Earnings per share*

Earnings per share amounts have been calculated as follows:

	(unaudited)
	Three-month period ended						Six-month period ended
	June 30, 2012		March 31, 2012		June 30, 2011		June 30, 2012		June 30, 2011
Net income for the period	2,662		3,827		6,452		6,489		13,278
Remuneration attributed to preferred convertible notes	(33	)	(11	)	(24	)	(44	)	(42	)
Remuneration attributed to common convertible notes	(14	)	(5	)	(10	)	(19	)	(19	)
Net income for the period adjusted	2,615		3,811		6,418		6,426		13,217
Earnings per share
Income available to preferred stockholders	989		1,423		2,440		2,430		5,025
Income available to common stockholders	1,626		2,339		3,898		3,996		8,028
Income available to convertible notes linked to preferred	—		35		57		—		118
Income available to convertible notes linked to common	—		14		23		—		47
	2,615		3,811		6,418		6,426		13,218
Weighted average number of shares outstanding (thousands of shares) - preferred shares	1,928,076		1,927,480		2,008,930		1,927,627		2,008,930
Weighted average number of shares outstanding (thousands of shares) - common shares	3,170,048		3,169,813		3,209,349		3,169,871		3,209,349
Total	5,098,124		5,097,293		5,218,279		5,097,498		5,218,279
Weighted average number of convertibles outstanding (thousands of shares) - linked to preferred shares	—		47,285		47,285		—		47,285
Weighted average number of convertibles outstanding (thousands of shares) - linked to common shares	—		18,416		18,416		—		18,416
Total	—		65,701		65,701		—		65,701
Total
Earnings per preferred share	0.51		0.74		1.21		1.26		2.50
Earnings per common share	0.51		0.74		1.21		1.26		2.50
Earnings per convertible note linked to preferred	—		0.97		1.71		—		3.38
Earnings per convertible note linked to common share	—		1.03		1.79		—		3.53

The Company does not disclose a calculation for diluted earnings per share because the effect is anti-dilutive.

*14 Pension plans*

We previously disclosed in our consolidated financial statements for the year ended December 31, 2011, that we expected to contribute US$262 to our defined benefit pension plan in 2012. As of June 30, 2012, total contributions of US$ 151 had been made. We do not expect any significant change in our previous estimate.

	Three-month period ended in June 30, 2012 (unaudited) — Overfunded pension plans		Underfunded pension plans		Underfunded other benefits
Service cost - benefits earned during the period	7		17		8
Interest cost on projected benefit obligation	114		63		25
Expected return on assets	(203	)	(63	)	—
Amortizations and (gain) / loss	—		12		(2	)
Net periodic pension cost (credit)	(82	)	29		31

	Three-month period ended in March 31, 2012 (unaudited) — Overfunded pension plans		Underfunded pension plans		Underfunded other benefits
Service cost - benefits earned during the period	8		15		9
Interest cost on projected benefit obligation	129		65		27
Expected return on assets	(229	)	(65	)	—
Amortizations and (gain) / loss	—		10		(2	)
Net periodic pension cost (credit)	(92	)	25		34

	Three-month period ended in June 30, 2011 (unaudited) — Overfunded pension plans		Underfunded pension plans		Underfunded other benefits
Service cost - benefits earned during the period	—		19		8
Interest cost on projected benefit obligation	103		106		26
Expected return on assets	(175	)	(99	)	—
Amortizations and (gain) / loss	—		6		(4	)
Net deferral	—		—		(3	)
Net periodic pension cost (credit)	(72	)	32		27

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	Six-month period ended in June 30, 2012 (unaudited) — Overfunded pension plans		Underfunded pension plans		Underfunded other benefits
Service cost - benefits earned during the period	15		32		17
Interest cost on projected benefit obligation	243		128		52
Expected return on assets	(432	)	(128	)	—
Amortizations and (gain) / loss	—		22		(4	)
Net periodic pension cost (credit)	(174	)	54		65

	six-month period ended in June 30, 2011 (unaudited) — Overfunded pension plans		Underfunded pension plans		Underfunded other benefits
Service cost - benefits earned during the period	—		39		16
Interest cost on projected benefit obligation	201		210		51
Expected return on assets	(341	)	(192	)	—
Amortizations and (gain) / loss	—		15		(8	)
Net periodic pension cost (credit)	(140	)	72		59

*15 Long-term incentive compensation plan*

Under the terms of the long-term incentive compensation plan, the participants, restricted to certain executives, may elect to allocate part of their annual bonus to the plan. The allocation is applied to purchase preferred shares of Vale, through a predefined financial institution, at market conditions and with no benefit provided by Vale.

The shares purchased by each executive are unrestricted and may, at the participant’s discretion, be sold at any time. However if, the shares are held for a three-year period and the executive is continually employed by Vale during that period. The participant then becomes entitled to receive from Vale a cash payment equivalent to the total amount of shares held, based on the market rates, the total shares linked to the plan at June 30, 2012 and December 31, 2011, are 4,879,815 and 3,012,538, respectively.

Additionally, as a long-term incentive certain eligible executives have the opportunity to receive at the end of the triennial cycle, a certain number of shares at market rates, based on an evaluation of their career and performance factors measured as an indicator of total return to stockholders.

We account for the compensation cost provided to our executives under this long-term incentive compensation plan, following the requirements for Accounting for Stock-Based Compensation. Liabilities are measured at each reporting date at fair value, based on market rates. Compensation costs incurred are recognized, over the defined three-year vesting period. At June 30, 2012, December 31, 2011, we recognized a liability of US$66, US$109, respectively.

*16 Commitments and contingencies*

In regards to the construction and installation of our nickel and cobalt processing plant in New Caledonia, we have provided significant guarantees in respect of our financing arrangements which are outlined below.

In connection with the Girardin Act tax - advantaged lease financing arrangement sponsored by the French government, we provided guarantees to BNP Paribas for the benefit of the tax investors regarding certain payments due from VNC, associated with the Girardin Act lease financing. We also committed that assets associated with the Girardin Act lease financing would be substantially complete by December 31, 2011. In light of the delay in the start-up of the VNC processing facilities, we proposed an extension to the previously agreed substantial completion date of December 31, 2011 to December 31, 2012. The French Government and tax investors have formally agreed to this extension. We believe the likelihood of the guarantee being called upon to be remote.

Sumic Nickel Netherlands B.V. (“Sumic”), a 21% stockholder of VNC, has a put option to sell to us 25%, 50%, or 100% of the shares they own of VNC if the defined cost of the initial nickel cobalt development project, as measured by funding provided to VNC, in natural currencies and converted to U.S. dollars at specified rates of exchange, in the form of Girardin Act lease financing, shareholder loans and equity contributions by shareholders to VNC, exceeded $4.6 billion and an agreement cannot be reached on how to proceed with the project. On May 27, 2010 the threshold was reached. The put option discussion and decision period was extended to July 31, 2012. In light of the delay in ramping up the Project, we are currently in discussions with Sumic pertaining to a further extension of the put option.

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In addition, in the course of our operations we have provided letters of credit and guarantees in the amount of $743 million that are associated with items such as environment reclamation, asset retirement obligation commitments, insurance, electricity commitments, post-retirement benefits, community service commitments and import and export duties.

We and our subsidiaries are defendants in numerous legal actions in the normal course of business. Based on the advice of our legal counsel, management believes that the amounts recognized are sufficient to cover probable losses in connection with such actions.

The provision for contingencies and the related judicial deposits is as follows:

	June 30, 2012 (unaudited) — Provision for contingencies	Judicial deposits	December 31, 2011 — Provision for contingencies	Judicial deposits
Labor and social security claims	791	900	751	895
Civil claims	267	199	248	151
Tax - related actions	656	427	654	413
Others	34	5	33	5
	1,748	1,531	1,686	1,464

Labor and social security related actions principally comprise claims by Brazilian current and former employees for (i) payment of time spent travelling from their residences to the work-place, (ii) additional health and safety related payments and (iii) various other matters, often in connection with disputes about the amount of indemnities paid upon dismissal and the one-third extra holiday pay.

Civil actions principally relate to claims made against us by contractors in Brazil in connection with losses alleged to have been incurred by them as a result of various past Government economic plans, during which full inflation indexation of contracts was not permitted, as well as for accidents and land appropriation disputes.

Tax related actions principally comprise challenges initiated by us, on certain taxes on revenues and uncertain tax positions. We continue to vigorously pursue our interests in all these actions but recognize that we probably will incur some losses in the final instance, for which we have made provisions.

Judicial deposits are made by us following court requirements in order to be entitled to either initiate or continue a legal action. These amounts are released to us upon receipt of a final favorable outcome from the legal action, and in the case of an unfavorable outcome, the deposits are transferred to the prevailing party.

Contingencies settled during the three-month periods ended June 30, 2012, March 31, 2012 and June 30, 2011, totaled US$ 27, US$ 13 and US$ 130, respectively. Provisions recognized in the three-month periods ended June 30, 2012, March 31, 2012 and June 30, 2011, totaled US$ 224, US$ 99 and US$ 176, respectively, classified as other operating expenses.

In addition to the contingencies for which we have made provisions, we are defendants in claims where in our opinion, and based on the advice of our legal counsel, the likelihood of loss is reasonably possible but not probable, in the total amount of US$ 21,318 at June 30, 2012, and for which no provision has been made (December 31, 2011 — US$22,449). The primary reasonably possible tax contingencies refers to tax assessments against us regarding the payment of Income Tax and Social Contribution calculated based on the equity method in foreign subsidiaries.

At the time of our privatization in 1997, the Company issued debentures to its then-existing stockholders, including the Brazilian Government. The terms of these debentures were set to ensure that the pre-privatization stockholders, including the Brazilian Government, would participate in possible future financial benefits that could be obtained from exploiting certain mineral resources.

A total of 388,559,056 Debentures were issued at a par value of R$ 0.01 (one cent), whose value will be restated in accordance with the variation in the General Market Price Index (IGP-M), as set forth in the Issue Deed. As at June 30, 2012 the total amount of these debentures was US$ 1,410 (US$ 1,336 in December 31, 2011).

The debenture holders have the right to receive premiums, paid semiannually, equivalent to a percentage of net revenues from specific mine resources as set forth in the indenture.

In April 2012 we paid remuneration on these debentures of US$ 6.

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*Asset retirement obligations*

We use various judgments and assumptions when measuring our asset retirement obligations.

Changes in circumstances, law or technology may affect our cash flow estimates and we periodically review the amounts accrued and adjust them as necessary. Our accruals do not reflect unasserted claims because we are currently not aware of any such issues. Also the amounts provided are not reduced by any potential recoveries under cost sharing, insurance or indemnification arrangements because such recoveries are considered uncertain.

The changes in the provisions for asset retirement obligations are as follows:

	(unaudited)
	Three-month period ended						Six-month period ended
	June 30, 2012		March 31, 2012		June 30, 2011		June 30, 2012		June 30, 2011
Beginning of period	1,862		1,770		1,368		1,770		1,368
Accretion expense	49		34		30		83		71
Liabilities settled in the current period	—		(4	)	(20	)	(4	)	(30	)
Revisions in estimated cash flows	3		29		(10	)	32		(73	)
Cumulative translation adjustment	(100	)	33		42		(67	)	74
End of period	1,814		1,862		1,410		1,814		1,410
Current liabilities	41		69		56		41		56
Non-current liabilities	1,773		1,793		1,354		1,773		1,354
Total	1,814		1,862		1,410		1,814		1,410

*17 Other expenses*

The income statement line “Other operating expenses” totaled in Three-month period ended US$ 604 in June 30, 2012, US$ 686 in March 31, 2012 and US$ 724 in June 30, 2011 and Six-month period ended US$ 1,290 in June 30, 2012 and 1,144 in June 30, 2011. It includes pre operational expenses US$ 146 in June 30, 2012, US$ 107 in March 31, 2012 and US$ 143 in June 30, 2011 and Six-month period ended US$ 253 in June 30, 2012 and US$ 173 in June 30, 2011, loss of materials US$ 26 in June 30, 2012, US$ 21 in March 31, 2012 and US$ 0 in June 30, 2011 and Six-month period ended US$ 47 in June 30, 2012 and US$ 34 June 30, 2011 and idle capacity and stoppage operations expenses US$ 178 in June 30, 2012, US$ 212 in March 31, 2012 and US$ 202 in June 30, 2011 and Six-month period ended US$ 390 in June 30, 2012 and US$ 304 in June 30, 2011.

*18 Fair value disclosure of financial assets and liabilities*

The Financial Accounting Standards Board, through Accounting Standards Codification and Accounting Standards Updates, defines fair value and sets out a framework for measuring fair value, which refers to valuation concepts and practices and requires certain disclosures about fair value measurements.

*a) Measurements*

The pronouncements define fair value as the exchange price that would be received for an asset, or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants on the measurement date. In determining fair value, the Company uses various methods including market, income and cost approaches. Based on these approaches, the Company often utilizes certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and or the inherent risks in the inputs to the valuation technique.

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These inputs can be readily observable, market corroborated, or generally unobservable inputs. The Company utilizes techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Under this standard, those inputs used to measure the fair value are required to be classified on three levels. Based on the characteristics of the inputs used in valuation techniques the Company is required to provide the following information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value are classified and disclosed as follows:

*Level 1* — Unadjusted quoted prices on an active, liquid and visible market for identical assets or liabilities that are accessible at the measurement date;

*Level 2* - Quoted prices for identical or similar assets or liabilities on active markets, inputs other than quoted prices that are observable, either directly or indirectly, for the term of the asset or liability;

*Level 3* - Assets and liabilities, for which quoted prices do not exist, or those prices or valuation techniques are supported by little or no market activity, unobservable or illiquid. At this point, fair market valuation becomes highly subjective.

*b) Measurements on a recurring basis*

The description of the valuation methodologies used for recurring assets and liabilities measured at fair value in the Company’s Consolidated Balance Sheet at June 30, 2012 and December 31, 2011 are summarized below:

· Available-for-sale securities

They are securities that are not classified either as held-for-trading or as held-to-maturity for strategic reasons and have readily available market prices. We evaluate the carrying value of some of our investments in relation to publicly quoted market prices when available. When there is no market value, we use inputs other than quoted prices.

· Derivatives

The market approach is used to estimate the fair value of the swaps discounting their cash flows using the interest rate of the currency they are denominated in. It is also used for the commodities contracts, since the fair value is computed by using forward curves for each commodity.

· Debentures

The fair value is measured by the market approach method, and the reference price is available on the secondary market.

The tables below presents the balances of assets and liabilities measured at fair value on a recurring basis as follows:

	June 30, 2012 (unaudited) — Carrying amount		Fair value		Level 1	Level 2
Available-for-sale securities	6		6		6	—
Unrealized gain on derivatives	(728	)	(728	)	—	(728	)
Debentures	(1,410	)	(1,410	)	—	(1,410	)

	December 31, 2011 — Carrying amount		Fair value		Level 1	Level 2
Available-for-sale securities	7		7		7	—
Unrealized losses on derivatives	(81	)	(81	)	—	(81	)
Debentures	(1,336	)	(1,336	)	—	(1,336	)

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*c) Measurements on a non-recurring basis*

The Company also has assets under certain conditions that are subject to measurement at fair value on a non-recurring basis. These assets include goodwill and assets acquired and liabilities assumed in business combinations. During the three-month period ended June 30, 2012, we have not recognized any impairment for those items.

*d) Financial Instruments*

*Long-term debt*

The valuation method used to estimate the fair value of our debt is the market approach for the contracts that are quoted on the secondary market, such as bonds and debentures. The fair value of both fixed and floating rate debt is determined by discounting future cash flows of Libor and Vale’s bonds curves (income approach).

*Time deposits*

The method used is the income approach, through the prices available on the active market. The fair value is close to the carrying amount due to the short-term maturities of the instruments.

Our long-term debt is reported at amortized cost, and the income of time deposits is accrued monthly according to the contract rate. The estimated fair value measurement is disclosed as follows:

	June 30, 2012 — Carrying amount		Fair value		Level 1		Level 2
Long-term debt (less interests) (a)	(24,594	)	(26,724	)	(20,155	)	(6,569	)
Perpetual Notes (b)	(81	)	(81	)	—		(81	)

	December 31, 2011 — Carrying amount		Fair value		Level 1		Level 2
Long-term debt (less interests) (a)	(22,700	)	(24,312	)	(18,181	)	(6,131	)
Perpetual Notes (b)	(80	)	(80	)	—		(80	)

(a) Less accrued charges of US$ 341 and US$ 333 as of June 30, 2012 and December 31, 2011, respectively.

(b) Classified on “LT Loans and related parties” (Non current liabilities).

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*19 Segment and geographical information*

The information presented to the Executive Board with the respective performance of each segment are usually derived from the accounting records maintained in accordance with the best accounting practices, with some reallocation between segments.

Consolidated net income and principal assets are reconciled as follows:

*Results by segment*

	Three-month period ended (unaudited)
	June 30, 2012												March 31, 2012												June 30, 2011
	Bulk Material		Base Metals		Fertilizers		Logistic		Others		Consolidated		Bulk Material		Base Metals		Fertilizers		Logistic		Others		Consolidated		Bulk Material		Base Metals		Fertilizers		Logistic		Others		Consolidated
RESULTS
Gross revenues	8,934		1,781		923		408		104		12,150		8,240		1,775		829		403		92		11,339		11,682		2,230		867		476		90		15,345
Cost and expenses	(3,509	)	(1,573	)	(740	)	(394	)	(191	)	(6,407	)	(3,455	)	(1,359	)	(660	)	(411	)	(250	)	(6,135	)	(3,449	)	(1,528	)	(658	)	(396	)	(225	)	(6,256	)
Research and development	(170	)	(122	)	(23	)	(2	)	(42	)	(359	)	(139	)	(96	)	(15	)	(1	)	(48	)	(299	)	(130	)	(98	)	(16	)	(30	)	(89	)	(363	)
Depreciation, depletion and amortization	(508	)	(402	)	(114	)	(57	)	(3	)	(1,084	)	(506	)	(374	)	(109	)	(64	)	(2	)	(1,055	)	(438	)	(350	)	(129	)	(60	)	(2	)	(979	)
Loss on sale of assets	(377	)	—		—		—		—		(377	)	—		—		—		—		—		—		—		—		—		—		—		—
Operating income	4,370		(316	)	46		(45	)	(132	)	3,923		4,140		(54	)	45		(73	)	(208	)	3,850		7,665		254		64		(10	)	(226	)	7,747
Financial Result	(2,504	)	41		(57	)	(21	)	(7	)	(2,548	)	220		5		4		(9	)	9		229		840		(210	)	29		(17	)	6		648
Equity in results of affiliates and joint ventures and others investments	186		3		—		15		(46	)	158		245		34		—		30		(66	)	243		339		(2	)	—		33		36		406
Income taxes	(164	)	14		1,209		3		(2	)	1,060		(504	)	(15	)	(11	)	(19	)	(4	)	(553	)	(2,120	)	(228	)	(57	)	(2	)	—		(2,407	)
Noncontrolling interests	24		54		(25	)	—		16		69		14		59		(18	)	—		3		58		1		33		(1	)	—		25		58
Net income attributable to the Company’s stockholders	1,912		(204	)	1,173		(48	)	(171	)	2,662		4,115		29		20		(71	)	(266	)	3,827		6,725		(153	)	35		4		(159	)	6,452
Sales classified by geographic destination:
Foreign market
America, except United States	207		256		17		—		4		484		183		254		13		36		11		497		298		258		2		—		—		558
United States	54		344		12		—		—		410		29		356		22		—		1		408		5		400		1		—		—		406
Europe	1,799		475		37		—		10		2,321		1,357		475		44		—		13		1,889		2,415		601		41		—		11		3,068
Middle East/Africa/Oceania	373		19		1		—		—		393		315		52		—		—		—		367		361		55		—		—		—		416
Japan	1,067		202		—		—		4		1,273		1,183		150		—		—		2		1,335		1,488		299		—		—		2		1,789
China	3,538		264		—		—		—		3,802		3,395		156		—		—		—		3,551		4,680		325		—		—		—		5,005
Asia, other than Japan and China	921		219		15		—		—		1,155		660		263		16		—		2		941		899		290		8		—		1		1,198
Brazil	975		2		841		408		86		2,312		1,118		69		734		367		63		2,351		1,536		2		815		476		76		2,905
	8,934		1,781		923		408		104		12,150		8,240		1,775		829		403		92		11,339		11,682		2,230		867		476		90		15,345

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Table of Contents

*Results by segment*

	Six-month period ended (unaudited)
	June 30, 2012												June 30, 2011
	Bulk Material		Base Metals		Fertilizers		Logistic		Others		Consolidated		Bulk Material		Base Metals		Fertilizers		Logistic		Others		Consolidated
RESULTS
Gross revenues	17,174		3,556		1,752		811		196		23,489		21,201		4,979		1,654		804		255		28,893
Cost and expenses	(6,964	)	(2,932	)	(1,400	)	(805	)	(441	)	(12,542	)	(6,483	)	(3,062	)	(1,302	)	(686	)	(516	)	(12,049	)
Research and development	(309	)	(218	)	(38	)	(3	)	(90	)	(658	)	(242	)	(172	)	(34	)	(51	)	(206	)	(705	)
Depreciation, depletion and amortization	(1,014	)	(776	)	(223	)	(121	)	(5	)	(2,139	)	(872	)	(707	)	(246	)	(104	)	(7	)	(1,936	)
Loss on sale of assets	(377	)	—		—		—		—		(377	)	—		1,513		—		—		—		1,513
Operating income	8,510		(370	)	91		(118	)	(340	)	7,773		13,604		2,551		72		(37	)	(474	)	15,716
Financial Result	(2,284	)	46		(53	)	(30	)	2		(2,319	)	805		(237	)	44		(36	)	(26	)	550
Equity in results of affiliates and joint ventures and others investments	431		37		—		45		(112	)	401		597		(5	)	—		69		25		686
Income taxes	(668	)	(1	)	1,198		(16	)	(6	)	507		(3,101	)	(629	)	(54	)	—		—		(3,784	)
Noncontrolling interests	38		113		(43	)	—		19		127		3		47		3		—		57		110
Net income attributable to the Company’s stockholders	6,027		(175	)	1,193		(119	)	(437	)	6,489		11,908		1,727		65		(4	)	(418	)	13,278
Sales classified by geographic destination:
Foreign market
America, except United States	390		510		30		36		15		981		545		720		20		—		—		1,285
United States	83		700		34		—		1		818		10		869		1		—		2		882
Europe	3,156		950		81		—		23		4,210		4,440		1,174		60		—		29		5,703
Middle East/Africa/Oceania	688		71		1		—		—		760		798		73		—		—		1		872
Japan	2,250		352		—		—		6		2,608		2,620		674		—		—		4		3,298
China	6,933		420		—		—		—		7,353		8,338		656		—		—		35		9,029
Asia, other than Japan and China	1,581		482		31		—		2		2,096		1,670		695		16		—		1		2,382
Brazil	2,093		71		1,575		775		149		4,663		2,780		118		1,557		804		183		5,442
	17,174		3,556		1,752		811		196		23,489		21,201		4,979		1,654		804		255		28,893

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Table of Contents

*Operating segment*

	Three-month period ended in June 30, 2012 (unaudited) — Revenue	Value added tax		Net revenues	Cost and expenses		Operating profit		Depreciation, depletion and amortization		Operating income		Property, plant and equipment	Additions to property, plant and equipment	Investments
Bulk Material
Iron ore	6,505	(58	)	6,447	(2,272	)	4,175		(383	)	3,792		33,757	1,163	106
Pellets	1,961	(56	)	1,905	(724	)	1,181		(65	)	1,116		2,099	163	1,106
Manganese	63	(1	)	62	(57	)	5		(3	)	2		77	6	—
Ferroalloys	129	(12	)	117	(97	)	20		(16	)	4		173	116	—
Coal	276	—		276	(402	)	(126	)	(41	)	(167	)	4,115	442	265
	8,934	(127	)	8,807	(3,552	)	5,255		(508	)	4,747		40,221	1,890	1,477
Base Metals
Nickel and other products (a)	1,544	—		1,544	(1,472	)	72		(385	)	(313	)	29,498	675	25
Copper (b)	237	(2	)	235	(221	)	14		(17	)	(3	)	4,374	291	233
Aluminum products	—	—		—	—		—		—		—		—	—	3,292
	1,781	(2	)	1,779	(1,693	)	86		(402	)	(316	)	33,872	966	3,550
Fertilizers
Potash	81	(6	)	75	(67	)	8		(9	)	(1	)	1,425	43	—
Phosphates	630	(20	)	610	(508	)	102		(83	)	19		7,536	20	—
Nitrogen	193	(26	)	167	(134	)	33		(22	)	11		532	—	—
Others fertilizers products	19	(2	)	17	—		17		—		17		338	—	—
	923	(54	)	869	(709	)	160		(114	)	46		9,831	63	—
Logistics
Railroads	294	(43	)	251	(270	)	(19	)	(44	)	(63	)	1,340	13	560
Ports	114	(11	)	103	(72	)	31		(13	)	18		594	15	93
Ships	—	—		—	—		—		—		—		2,345	128	—
	408	(54	)	354	(342	)	12		(57	)	(45	)	4,279	156	653
Others	104	(20	)	84	(213	)	(129	)	(3	)	(132	)	1,900	153	2,493
Loss on sale of assets	—	—		—	(377	)	(377	)	—		(377	)	—	—	—
	12,150	(257	)	11,893	(6,886	)	5,007		(1,084	)	3,923		90,103	3,228	8,173

(a) Includes nickel co-products and by-products (copper, precious metals, cobalt and others).

(b) Includes copper concentrate.

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Table of Contents

*Operating segment*

	Three-month period ended in March 31, 2012 (unaudited) — Revenue	Value added tax		Net revenues	Cost and expenses		Operating profit		Depreciation, depletion and amortization		Operating income		Property, plant and equipment	Additions to property, plant and equipment	Investments
Bulk Material
Iron ore	5,987	(78	)	5,909	(2,147	)	3,762		(373	)	3,389		34,950	1,678	114
Pellets	1,698	(71	)	1,627	(745	)	882		(55	)	827		2,100	97	1,265
Manganese	42	(2	)	40	(32	)	8		(4	)	4		85	—	—
Ferroalloys	124	(12	)	112	(110	)	2		(15	)	(13	)	257	—	—
Coal	389	—		389	(397	)	(8	)	(59	)	(67	)	4,470	108	254
	8,240	(163	)	8,077	(3,431	)	4,646		(506	)	4,140		41,862	1,883	1,633
Base Metals
Nickel and other products (a)	1,555	—		1,555	(1,242	)	313		(355	)	(42	)	29,742	552	20
Copper (b)	220	—		220	(213	)	7		(19	)	(12	)	4,418	235	234
Aluminum products	—	—		—	—		—		—		—		—	—	3,578
	1,775	—		1,775	(1,455	)	320		(374	)	(54	)	34,160	787	3,832
Fertilizers
Potash	70	(4	)	66	(52	)	14		(6	)	8		2,369	20	—
Phosphates	548	(18	)	530	(409	)	121		(74	)	47		7,043	73	—
Nitrogen	192	(24	)	168	(165	)	3		(29	)	(26	)	447	7	—
Others fertilizers products	19	(3	)	16	—		16		—		16		315	1	—
	829	(49	)	780	(626	)	154		(109	)	45		10,174	101	—
Logistics
Railroads	265	(52	)	213	(239	)	(26	)	(48	)	(74	)	1,395	20	600
Ports	138	(15	)	123	(106	)	17		(16	)	1		621	46	106
Ships	—	—		—	—		—		—		—		2,163	—	—
	403	(67	)	336	(345	)	(9	)	(64	)	(73	)	4,179	66	706
Others	92	(6	)	86	(292	)	(206	)	(2	)	(208	)	2,156	124	2,596
	11,339	(285	)	11,054	(6,149	)	4,905		(1,055	)	3,850		92,531	2,961	8,767

(a) Includes nickel co-products and by-products (copper, precious metals, cobalt and others).

(b) Includes copper concentrate.

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Table of Contents

*Operating segment*

	Three-month period ended in June 30, 2011 (unaudited) — Revenue	Value added tax		Net revenues	Cost and expenses		Operating profit		Depreciation, depletion and amortization		Operating income		Property, plant and equipment	Additions to property, plant and equipment	Investments
Bulk Material
Iron ore	9,102	(134	)	8,968	(2,157	)	6,811		(347	)	6,464		33,602	1,259	123
Pellets	2,122	(73	)	2,049	(778	)	1,271		(31	)	1,240		2,678	—	1,093
Manganese	52	(2	)	50	(48	)	2		(4	)	(2	)	25	1	—
Ferroalloys	150	(15	)	135	(96	)	39		(16	)	23		321	10	—
Coal	256	—		256	(276	)	(20	)	(40	)	(60	)	3,686	218	262
	11,682	(224	)	11,458	(3,355	)	8,103		(438	)	7,665		40,312	1,488	1,478
Base Metals
Nickel and other products (a)	1,966	—		1,966	(1,411	)	555		(326	)	229		29,801	613	13
Copper (b)	264	(1	)	263	(214	)	49		(24	)	25		4,206	348	133
Aluminum products	—	—		—	—		—		—		—		—	—	3,686
	2,230	(1	)	2,229	(1,625	)	604		(350	)	254		34,007	961	3,832
Fertilizers
Potash	68	(3	)	65	(66	)	(1	)	(18	)	(19	)	1,846	293	—
Phosphates	586	(22	)	564	(404	)	160		(62	)	98		7,132	96	—
Nitrogen	194	(25	)	169	(151	)	18		(49	)	(31	)	1,592	45	—
Others fertilizers products	19	(3	)	16	—		16		—		16		—	—	—
	867	(53	)	814	(621	)	193		(129	)	64		10,570	434	—
Logistics
Railroads	357	(54	)	303	(277	)	26		(45	)	(19	)	1,464	66	565
Ports	119	(14	)	105	(81	)	24		(15	)	9		739	23	—
Ships	—	—		—	—		—		—		—		1,482	140	141
	476	(68	)	408	(358	)	50		(60	)	(10	)	3,685	229	706
Others	90	(10	)	80	(304	)	(224	)	(2	)	(226	)	3,103	368	2,536
	15,345	(356	)	14,989	(6,263	)	8,726		(979	)	7,747		91,677	3,480	8,552

(a) Includes nickel co-products and by-products (copper, precious metals, cobalt and others).

(b) Includes copper concentrate.

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Table of Contents

*Operating segment*

	Six-month period ended in June 30, 2012 (unaudited) — Revenue	Value added tax		Net revenues	Cost and expenses		Operating profit		Depreciation, depletion and amortization		Operating income		Property, plant and equipment	Additions to property, plant and equipment	Investments
Bulk Material
Iron ore	12,492	(136	)	12,356	(4,419	)	7,937		(756	)	7,181		33,757	2,841	106
Pellets	3,659	(127	)	3,532	(1,469	)	2,063		(120	)	1,943		2,099	260	1,106
Manganese	105	(3	)	102	(89	)	13		(7	)	6		77	6	—
Ferroalloys	253	(24	)	229	(207	)	22		(31	)	(9	)	173	116	—
Coal	665	—		665	(799	)	(134	)	(100	)	(234	)	4,115	550	265
	17,174	(290	)	16,884	(6,983	)	9,901		(1,014	)	8,887		40,221	3,773	1,477
Base Metals
Nickel and other products (a)	3,099	—		3,099	(2,714	)	385		(740	)	(355	)	29,498	1,227	25
Copper (b)	457	(2	)	455	(434	)	21		(36	)	(15	)	4,374	526	233
Aluminum products	—	—		—	—		—		—		—		—	—	3,292
	3,556	(2	)	3,554	(3,148	)	406		(776	)	(370	)	33,872	1,753	3,550
Fertilizers
Potash	151	(10	)	141	(119	)	22		(15	)	7		1,425	63	—
Phosphates	1,178	(38	)	1,140	(917	)	223		(157	)	66		7,536	93	—
Nitrogen	385	(50	)	335	(299	)	36		(51	)	(15	)	532	7	—
Others fertilizers products	38	(5	)	33	—		33		—		33		338	1	—
	1,752	(103	)	1,649	(1,335	)	314		(223	)	91		9,831	164	—
Logistics
Railroads	559	(95	)	464	(509	)	(45	)	(92	)	(137	)	1,340	33	560
Ports	252	(26	)	226	(178	)	48		(29	)	19		594	61	93
Ships	—	—		—	—		—		—		—		2,345	128	—
	811	(121	)	690	(687	)	3		(121	)	(118	)	4,279	222	653
Others	196	(26	)	170	(505	)	(335	)	(5	)	(340	)	1,900	277	2,493
Loss on sale of assets	—	—		—	(377	)	(377	)	—		(377	)	—	—	—
	23,489	(542	)	22,947	(13,035	)	9,912		(2,139	)	7,773		90,103	6,189	8,173

(a) Includes nickel co-products and by-products (copper, precious metals, cobalt and others).

(b) Includes copper concentrate.

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Table of Contents

*Operating segment*

	Six-month period ended in June 30, 2011 (unaudited) — Revenue	Value added tax		Net revenues	Cost and expenses		Operating profit		Depreciation, depletion and amortization		Operating income		Property, plant and equipment	Additions to property, plant and equipment	Investments
Bulk Material
Iron ore	16,389	(244	)	16,145	(3,893	)	12,252		(704	)	11,548		33,602	2,436	123
Pellets	4,000	(134	)	3,866	(1,618	)	2,248		(67	)	2,181		2,678	353	1,093
Manganese	95	(4	)	91	(69	)	22		(9	)	13		25	1	—
Ferroalloys	307	(27	)	280	(207	)	73		(27	)	46		321	21	—
Coal	410	—		410	(529	)	(119	)	(65	)	(184	)	3,686	606	262
	21,201	(409	)	20,792	(6,316	)	14,476		(872	)	13,604		40,312	3,417	1,478
Base Metals
Nickel and other products (a)	4,081	—		4,081	(2,561	)	1,520		(664	)	856		29,801	984	13
Copper (b)	515	(18	)	497	(346	)	151		(42	)	109		4,206	518	133
Aluminum products	383	(5	)	378	(304	)	74		(1	)	73		—	16	3,686
	4,979	(23	)	4,956	(3,211	)	1,745		(707	)	1,038		34,007	1,518	3,832
Fertilizers
Potash	130	(7	)	123	(135	)	(12	)	(25	)	(37	)	1,846	300	—
Phosphates	1,122	(50	)	1,072	(812	)	260		(149	)	111		7,132	223	—
Nitrogen	366	(48	)	318	(278	)	40		(72	)	(32	)	1,592	45	—
Others fertilizers products	36	(6	)	30	—		30		—		30		—	—	—
	1,654	(111	)	1,543	(1,225	)	318		(246	)	72		10,570	568	—
Logistics
Railroads	607	(99	)	508	(474	)	34		(82	)	(48	)	1,464	102	565
Ports	197	(23	)	174	(141	)	33		(22	)	11		739	60	—
Ships	—	—		—	—		—		—		—		1,482	163	141
	804	(122	)	682	(615	)	67		(104	)	(37	)	3,685	325	706
Others	255	(26	)	229	(696	)	(467	)	(7	)	(474	)	3,103	465	2,536
Gain on sale of assets	—	—		—	1,513		1,513		—		1,513		—	—	—
	28,893	(691	)	28,202	(10,550	)	17,652		(1,936	)	15,716		91,677	6,293	8,552

(a) Includes nickel co-products and by-products (copper, precious metals, cobalt and others).

(b) Includes copper concentrate.

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*20 Derivative financial instruments*

*Risk management policy*

Vale considers that the effective management of risks is a key objective to support its growth strategy, strategic planning and financial flexibility. Therefore, Vale has developed its risk management strategy in order to provide an integrated approach of the risks the Company is exposed to. To do that, Vale evaluates not only the impact of market risk factors in the business results (market risk), but also the risk arising from third party obligations with Vale (credit risk), those inherent to inadequate or failed internal processes, people, systems or external events (operational risk), those arising from liquidity risk, among others.

The Board of Directors established the corporate risk management policy in order to support the growth strategy, strategic planning and business continuity of the Company, strengthening its capital structure and asset management, ensure flexibility and consistency on the financial management and strengthen corporate governance practices.

The corporate risk management policy determines that Vale measures and monitors its corporate risk on a consolidated approach in order to guarantee that the overall risk level of the Company remains aligned with the guidelines defined by the Board of Directors and the Executive Board.

The Executive Risk Management Committee, created by the Board of Directors, is responsible for supporting the Executive Board in the risk analysis and for issuing opinion regarding the Company’s risk management. It’s also responsible for the supervision and revision of the principles and instruments of corporate risk management.

The Executive Board is responsible for the approval of the policy deployment into norms, rules and responsibilities and for reporting to the Board of Directors about such procedures.

The risk management norms and instructions complement the corporate risk management policy and define practices, processes, controls, roles and responsibilities in the Company regarding risk management.

The Company may, when necessary, allocate specific risk limits to management activities that need them, including but not limited to, market risk limit, corporate and sovereign credit limit, in accordance with the acceptable corporate risk limit.

*Market Risk Management*

Vale is exposed to the behavior of various market risk factors that can impact its cash flow. The assessment of this potential impact arising from the volatility of risk factors and their correlations is performed periodically to support the decision making process and the growth strategy of the Company, ensure its financial flexibility and monitor the volatility of future cash flows.

When necessary, market risk mitigation strategies are evaluated and implemented in line with these objectives. Some strategies may incorporate financial instruments, including derivatives. The portfolios of the financial instruments are monitored on a monthly basis, enabling financial results surveillance and its impact on cash flow, and ensuring strategies adherence to the proposed objectives.

Considering the nature of Vale’s business and operations, the main market risk factors which the Company is exposed to are:

· Interest rates;

· Foreign exchange and;

· Product prices and input costs

*Foreign exchange rate and interest rate risk*

Vale’s cash flows are exposed to volatility of several currencies. While most of the product prices are indexed to US dollars, most of the costs, disbursements and investments are indexed to currencies other than the US dollar, namely the Brazilian real and the Canadian dollar.

Derivative instruments may be used to reduce Vale’s potential cash flow volatility arising from its currency mismatch.

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For hedging revenues, costs, expenses and investment cash flows, the main risk mitigation strategies used are currency forward transactions and swaps.

Vale implemented hedge transactions to protect its cash flow against the market risks that arises from its debt obligations — mainly currency volatility. We use swap transactions to convert debt linked to Brazilian real into US dollar that have similar - or sometimes shorter - settlement dates than the final maturity of the debt instruments. Their notional amounts are similar to the principal and interest payments, subjected to liquidity market conditions.

Swaps with shorter settlement dates are renegotiated through time so that their final maturity matches - or becomes closer - to the debts` final maturity. At each settlement date, the results of the swap transactions partially offset the impact of the foreign exchange rate in Vale’s obligations, contributing to stabilize the cash disbursements in US dollar.

In the event of an appreciation (depreciation) of the Brazilian real against the US dollar, the negative (positive) impact on Brazilian real denominated debt obligations (interest and/or principal payment) measured in US dollars will be partially offset by a positive (negative) effect from a swap transaction, regardless of the US dollar / Brazilian real exchange rate in the payment date. The same rationale applies to debt denominated in other currencies and their respective swaps.

Vale is also exposed to interest rate risks on loans and financings. Its floating rate debt consists mainly of loans including export pre-payments, commercial banks and multilateral organizations loans. In general, the US dollar floating rate debt is subject to changes in the LIBOR (London Interbank Offer Rate in US dollar). To mitigate the impact of the interest rate volatility on its cash flows, Vale considers the natural hedges resulting from the correlation of commodities prices and US dollar floating rates. If such natural hedges are not present, Vale may search for the same effect by using financial instruments.

*Product price and Input Cost risk*

Vale is also exposed to several market risks associated with commodities prices volatility. In line with the risk management policy, risk mitigation strategies involving commodities can also be used to adjust its risk profile and reduce the volatility of cash flow. In these cases, the mitigation strategies used are primarily forward transactions, futures contracts or zero-cost collars.

*Embedded derivatives*

The cash flow of the Company is also exposed to market risks associated with contracts that contain embedded derivatives or behave as derivatives. The derivatives may be embedded in, but are not limited to, commercial contracts, purchase agreements, leases, bonds, insurance policies and loans.

Vale’s wholly-owned subsidiary Vale Canada limited has nickel concentrate and raw materials purchase agreements, in which there are provisions based on the movement of nickel and copper prices. These provisions are considered embedded derivatives.

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*Hedge Accounting*

Under the Standard Accounting for Derivative Financial Instruments and Hedging Activities, all derivatives, whether designated in hedging relationships or not, are required to be recorded in the balance sheet at fair value and the gain or loss in fair value is included in current earnings, unless if qualified as hedge accounting. A derivative must be designated in a hedging relationship in order to qualify for hedge accounting. These requirements include a determination of what portions of hedges are deemed to be effective versus ineffective. In general, a hedging relationship is effective when a change in the fair value of the derivative is offset by an equal and opposite change in the fair value of the underlying hedged item. In accordance with these requirements, effectiveness tests are performed in order to assess effectiveness and quantify ineffectiveness for all designated hedges.

At June 30, 2012, Vale had outstanding positions designated as cash flow hedge. A cash flow hedge is a hedge of the exposure to variability in expected future cash flows that is attributable to a particular risk, such as a forecasted purchase or sale. If a derivative is designated as cash flow hedge, the effective portion of the changes in the fair value of the derivative is recorded in other comprehensive income and recognized in earnings when the hedged item affects earnings. However, the ineffective portion of changes in the fair value of the derivatives designated as hedges is recognized in earnings. If a portion of a derivative contract is excluded for purposes of effectiveness testing, the value of such excluded portion is included in earnings.

	Assets — June 30, 2012 (unaudited)		December 31, 2011		Liabilities — June 30, 2012 (unaudited)		December 31, 2011
	Short-term	Long-term	Short-term	Long-term	Short-term	Long-term	Short-term	Long-term
Derivatives not designated as hedge
Foreign exchange and interest rate risk
CDI & TJLP vs. USD fixed and floating rate swap	205	—	410	60	85	793	49	590
EuroBond Swap	—	—	—	—	5	45	4	32
Pre Dollar Swap	17	—	19	—	—	50	—	41
Treasury future	—	—	—	—	—	—	5	—
	222	—	429	60	90	888	58	663
Commodities price risk
Nickel
Fixed price program	4	—	1	—	—	—	1	—
Bunker Oil Hedge	—	—	4	—	—	—	—	—
	4	—	5	—	—	—	1	—
Embedded derivatives:
Derivatives designated as hedge
Bunker Oil Hedge	—	—	—	—	13	—	—	—
Strategic Nickel	96	—	161	—	8	20	—	—
Foreign exchange cash flow hedge	—	—	—	—	31	—	14	—
	96	—	161	—	52	20	14	—
Total	322	—	595	60	142	908	73	663

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	Amount of gain or (loss) recognized as financial income (expense)										Financial settlement (Inflows)/ Outflows										Amount of gain or (loss) recognized in OCI
	Three-month period ended (unaudited)						Six-month period ended				Three-month period ended (unaudited)						Six-month period ended				Three-month period ended (unaudited)					Six-month period ended
	June 30, 2012		March 31, 2012		June 30, 2011		June 30, 2012		June 30, 2011		June 30, 2012		March 31, 2012		June 30, 2011		June 30, 2012		June 30, 2011		June 30, 2012		March 31, 2012		June 30, 2011	June 30, 2012		June 30, 2011
Derivatives not designated as hedge
Foreign exchange and interest rate risk
CDI & TJLP vs. USD fixed and floating rate swap	(407	)	208		389		(199	)	564		(180	)	(129	)	(112	)	(309	)	(160	)	—		—		—	—		—
USD floating rate vs. fixed USD rate swap	—		—		—		—		—		—		—		1		—		2		—		—		—	—		—
EuroBond Swap	(36	)	19		11		(17	)	53		—		4		—		4		—		—		—		—	—		—
Pre Dollar Swap	(16	)	12		6		(4	)	8		(5	)	(4	)	—		(9	)	—		—		—		—	—		—
Swap USD fixed rate vs. CDI	—		—		(47	)	—		(47	)	—		—		—		—		—		—		—		—	—		—
South African Rande Forward	—		—		2		—		2		—		—		—		—		—		—		—		—	—		—
AUD floating rate vs. fixed USD rate swap	—		—		—		—		—		—		—		—		—		(2	)	—		—		—	—		—
Treasury Future	—		9		—		9		—		—		(3	)	—		(3	)	—		—		—		—	—		—
	(459	)	248		361		(211	)	580		(185	)	(132	)	(111	)	(317	)	(160	)	—		—		—	—		—
Commodities price risk
Nickel
Fixed price program	8		(4	)	12		4		25		(5	)	6		(19	)	1		(20	)	—		—		—	—		—
Strategic program	—		—		—		—		15		—		—		—		—		—		—		—		—	—		—
Aluminum	—		—		—		—		—		—		—		—		—		7		—		—		—	—		—
Bunker Oil Hedge	—		—		2		—		34		—		(4	)	(15	)	(4	)	(23	)	—		—		—	—		—
Coal	—		—		—		—		—		—		—		—		—		2		—		—		—	—		—
Maritime Freight Hiring Protection Program	—		—		—		—		—		—		—		—		—		2		—		—		—	—		—
	8		(4	)	14		4		74		(5	)	2		(34	)	(3	)	(32	)	—		—		—	—		—
Embedded derivatives:
Energy - Aluminum options	—		—		—		—		(7	)	—		—		—		—		—		—		—		—	—		—
	—		—		—		—		(7	)	—		—		—		—		—		—		—		—	—		—
Derivatives designated as hedge
Bunker Oil Hedge	—		—		—		—		—		—		—		—		—		—		(13	)	—		—	(13	)	—
Aluminum	—		—		—		—		—		—		—		—		—		50		—		—		4	—		4
Strategic Nickel	35		52		(17	)	87		(50	)	(36	)	(52	)	17		(88	)	(13	)	(21	)	(43	)	137	(64	)	128
Foreign exchange cash flow hedge	—		—		—		—		—		—		—		—		—		—		(78	)	52		—	(26	)	14
	35		52		(17	)	87		(50	)	(36	)	(52	)	17		(88	)	37		(112	)	9		141	(103	)	146
Total	(416	)	296		358		(120	)	597		(226	)	(182	)	(128	)	(408	)	(155	)	(112	)	9		141	(103	)	146

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Unrealized gains (losses) in the period are included in our income statement under the caption of gains (losses) on derivatives, net.

Final maturity dates for the above instruments are as follows:

Interest rates / Currencies	December 2019
Bunker Oil	December 2012
Nickel	December 2012

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*21 Board of Directors, Fiscal Council, Advisory committees and Executive Officers*

BOARD OF DIRECTORS	Governance and Sustainability Committee
	Gilmar Dalilo Cezar Wanderley
Ricardo José da Costa Flores	Renato da Cruz Gomes
Chairman	Ricardo Simonsen
Mário da Silveira Teixeira Júnior	Fiscal Council
Vice-President
	Marcelo Amaral Moraes
Fuminobu Kawashima	Chairman
José Mauro Mettrau Carneiro da Cunha
José Ricardo Sasseron	Aníbal Moreira dos Santos
Luciano Galvão Coutinho	Antonio Henrique Pinheiro Silveira
Nelson Henrique Barbosa Filho	Arnaldo José Vollet
Oscar Augusto de Camargo Filho
Paulo Soares de Souza	Alternate
Renato da Cruz Gomes	Cícero da Silva
Robson Rocha	Oswaldo Mário Pêgo de Amorim Azevedo
	Paulo Fontoura Valle
Alternate
Deli Soares Pereira	Executive Officers
Eduardo de Oliveira Rodrigues Filho
Eustáquio Wagner Guimarães Gomes	Murilo Pinto de Oliveira Ferreira
Hajime Tonoki	President & CEO
Luiz Carlos de Freitas
Luiz Maurício Leuzinger	Vânia Lucia Chaves Somavilla
Marco Geovanne Tobias da Silva	Executive Director, HR, Health & Safety, Sustainability and Energy
Paulo Sergio Moreira da Fonseca
Raimundo Nonato Alves Amorim
Sandro Kohler Marcondes	Tito Botelho Martins
	Chief Financial Officer
Advisory Committees of the Board of Directors
	Roger Allan Downey
Controlling Committee	Executive Director, Fertilizers and Coal
Luiz Carlos de Freitas
Paulo Ricardo Ultra Soares	José Carlos Martins
Paulo Roberto Ferreira de Medeiros	Executive Director, Ferrous and Strategy
Executive Development Committee	Galib Abrahão Chaim
José Ricardo Sasseron	Executive Director, Capital Projects Implementation
Luiz Maurício Leuzinger
Oscar Augusto de Camargo Filho	Humberto Ramos de Freitas
	Executive Director, Logistics and Mineral Research
Strategic Committee
Murilo Pinto de Oliveira Ferreira	Gerd Peter Poppinga
Luciano Galvão Coutinho	Executive Director, Base Metals and IT
Mário da Silveira Teixeira Júnior
Oscar Augusto de Camargo Filho
Ricardo José da Costa Flores	Marcus Vinicius Dias Severini
	Chief Officer of Accounting and Control Department
Finance Committee
Tito Botelho Martins	Vera Lucia de Almeida Pereira Elias
Eduardo de Oliveira Rodrigues Filho	Chief Accountant
Luciana Freitas Rodrigues	CRC-RJ - 043059/O-8
Luiz Maurício Leuzinger

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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.

	(Registrant)
	By:	/s/ Roberto Castello Branco
Date:	July 25, 2012	Roberto Castello Branco
		Director of Investor Relations

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