Report to the Community

May 2015

Welcome to Vale’s annual Report to Inside: the Community for news and updates on our business and our community About Vale...... 2 activities over the past year. Business Update...... 2 Safety...... 3 Safety continues to be the highest priority at We are pleased to have recently negotiated Vale’s operations. In fact, earlier this year we a new five-year Collective Agreement with Capital Projects...... 4 launched a new internal safety program called our employees represented by the United HomeSafe, aimed at advancing our safety Steelworkers Local 6500. This is good news Environment...... 5 culture and ensuring our employees go for our community, and we will build on home safely after every shift. that success with ongoing investments in capital projects, environmental initiatives and Community Investments.....7 Our most important focus will always be community programs. We invite you to read our 4,000 employees that work within Vale’s more about these investments in the report Community Events...... 8 Sudbury Operations. Sudbury is home to some that follows. of the most experienced industry professionals in the world, and we will continue If you have any feedback about this report, to work together every day to ensure one we’d love to hear from you at: another’s safety and success in the workplace. [email protected]. About Vale

Vale is one of the world’s largest mining companies, present in more than 30 countries across five continents. Vale’s mission worldwide is to transform natural resources into prosperity and sustainable development.

Vale is also the world’s largest producer of , with its Base Metals business headquartered in Toronto. Operating in for more than 100 years, our Canadian operations also produce , cobalt, group metals, and . We aim to be profitable, but only as a safe, high-quality and sustainable mining company where our most important value is “Life Matters Most.”

Vale’s operations in Sudbury are home to one of the largest integrated mining complexes in the world, including six mines, a mill, a smelter and a nickel refinery.

For more information about Vale’s Sudbury Operations, please visit: www.vale.com/canada.

Business Update

Despite a variety of operational challenges in 2014, nickel and copper production at Vale’s Ontario Operations remained on target. And, in our ongoing efforts for operational discipline, we were able to reduce total controllable costs by approximately 10%.

Market conditions also proved to be challenging, but despite this Vale continued to invest in Sudbury to ensure the long-term success of our operations here. In fact, since the acquisition of Inco in 2006, Vale has invested almost $4 billion on capital projects in Sudbury to modernize our operations.

Report to the Community / May 2015 2 Safety

Vale has set an aggressive target for Despite the progress that we made, we suffered the loss of Paul Rochette in our smelter operations, in an incident that also left one of our fellow employees its Ontario Operations to become a injured. We continue to honour Paul’s memory by doing everything we can to zero harm organization, where no one prevent another such tragedy from occurring. ever gets injured in the workplace. We Working together with our industry, government and labour partners, Vale was continued to make progress on this a full participant in the provincial Mining Health, Safety & Prevention Review, and fully endorses the Final Report that was issued in April 2015. We applaud journey by achieving a total recordable Labour Minister Kevin Flynn and Chief Prevention Officer George Gritziotis injury frequency (TRIF) of 16.6 in 2014. for their open and collaborative approach to this process. We believe that the recommendations that have been put forward in the report will assist Vale and This represents a 32% reduction from all companies within Ontario’s mining sector in becoming safer places to work. 2013 and is the lowest TRIF we’ve ever We will continue to work with our government, labour and industry partners achieved in our operations. towards our common goal of achieving zero harm in our mines and plants. There is nothing more important than ensuring our people return home safely to their families at the end of every work day.

Lost Time Injury Frequency

In terms of lost time injury frequency (LTIF), which represents injuries that prevent an employee from attending work, we’ve continued with a downward trend, achieving an LTIF of 1.86 per million hours, a 14% reduction from 2013.

Report to the Community / May 2015 3 Capital Projects Update

Clean AER Project Vale’s Clean AER Project is the largest single SO2 Emission Reduction Projections environmental investment in Sudbury’s history. This $1 billion investment will reduce 2500 sulphur dioxide levels by 85% from current Emission Limit levels and significantly reduce metals and 2000 particulate emissions. 1500 AER stands for “Atmospheric Emissions Reduction”, which simply means cleaner air. Following the completion of the project, Vale’s total sulphur dioxide emissions will be reduced to approximately 20 kilotonnes per year. This reduction is in addition to the 90% reduction in sulphur dioxide 1000 emissions Vale has incorporated since 1970.

Of interest, given the vast reduction in emissions, Vale is currently studying 500 the need for its 1,250 foot “Superstack”. Built in 1970, the Superstack is the second tallest freestanding structure in Canada and has become an 0 internationally recognized icon for our community. However, with Vale’s 1970 1980 1990 2000 Project smelter moving to a single furnace operation and the Clean AER Project Completion underway, Vale may no longer require such a large stack to operate. If a decision is made to decommission the stack, further study would be By reducing natural gas consumption and modifying required to determine the best way to remove it. A decision regarding Vale’s Superstack is expected to be announced later this year. certain process compounds, the Clean AER Project will also reduce greenhouse gas emissions by Construction is moving along well for the project with one converter 40%, from 270 kilotonnes of carbon dioxide to 150 successfully replaced and operating and another currently being de- kilotonnes by 2020. commissioned. Work is also underway on new material storage facilities and dust collection equipment. Many local companies have been involved in the project, giving an incredible economic boost to .

Most importantly, the Clean AER Project will ensure a cleaner Copper Cliff Mine Project environment and Vale’s long- term sustainability and employment in the for decades to come.

For more information about Vale’s Clean AER Project, please visit: www.valecleanaer.com.

Superstack Facts: • Built in 1970 for approx. $25 million • 380 metres (1,250) feet high • 115 feet wide at the base • 52 feet wide at the top • 45 foot wide steel liner inside • Elevator and ladderway inside

What does the Superstack mean to you? Send your thoughts to [email protected]

Vale is currently in the final stages of a feasibility study designed to evaluate the viability of expanding operations at Copper Cliff Mine. The project includes continued use of the North Mine shaft and re-activation of the South Mine shaft. If approved, the project could support nickel, copper and precious metal production for Vale’s Sudbury operations for the next 20 years.

Report to the Community / May 2015 4 Environment

Regreening & Biodiversity

Vale actively supports the City of Greater Sudbury’s regreening and land reclamation program with an annual donation of $250,000.

In 2014, the program reclaimed four hectares of land north of Wahnapitae and planted 70,000 tree seedlings and 45,000 shrubs and understory trees Butterfly in milkweed patch on regreened slag pile. throughout Greater Sudbury. A milkweed patch has also been established at Vale’s revegetated slag pile in For more information about the City of Greater Sudbury’s regreening an effort to attract monarch butterflies and to further enhance biodiversity program, please visit: www.greatersudbury.ca/regreening efforts in the area with this important pollinator.

In addition, the company’s aerial seeding program, which targets barren Vale also grows seedlings to support regreening efforts throughout the land around Vale’s Sudbury operations, treated 700 acres northeast of City in its greenhouse in Copper Cliff and its underground greenhouse at Coniston in 2014 (up from 520 acres in 2013). The company’s aerial seeding Creighton Mine. The underground greenhouse is now in a new location at program began in 1990 and has treated more than 8,400 acres of land Creighton Mine and is capable of growing 200,000 seedlings per year. to date

Wayne Tonelli and Glen Watson show Vale’s first harvest of honey at the regreened Fish released into the Onaping River. slag pile in Copper Cliff. At Vale’s surface greenhouse in Copper Cliff, the company also raises walleye, speckled and rainbow trout to stock local water systems in the Sudbury Bee hives have been placed at the base of Vale’s revegetated slag pile in Basin. Since the program began in 2012, approximately 15,000 fingerlings Copper Cliff to enhance biodiversity at the site and to aid regional efforts to have been released into the Onaping River and Ramsey Lake. restore declining bee populations. Seven bee hives containing 350,000 bees are currently managed at the site by Vale’s environmental team and a local beekeeper. The surface greenhouse in Copper Cliff is not only home to fish these days but is now also home to a community garden. The greenhouse features a Bees are used to enhance biodiversity because they pollinate the flowering number of community garden boxes and local residents are invited to plant plants that have been established on the revegetated slag pile. The and care for their own garden plots. Vale has a few of its own garden boxes wildflowers on the revegetated slag pile provide a source of nectar and and the fresh produce is donated to the Foodshed Project’s Grow-A-Row pollen for the bees. program, benefiting the Samaritan Centre in Sudbury.

Report to the Community / May 2015 5 Environment

Community Air Environmental Quality Monitoring Monitoring Team

Vale’s sulphur dioxide (SO2) air monitoring network, co-owned by Sudbury Integrated Nickel Operations, a Glencore Company, includes 18 fixed continuous monitoring stations, two meteorological towers and Vale’s mobile SO2 monitoring unit. The mobile unit is used to measure ground level concentrations of SO2 in areas of the community not covered by the 18 fixed stations. Vale also owns and operates eight particulate (metals) monitoring stations.

In 2014, Vale exceeded provincial air quality standards for SO2 three times and seven times for nickel as a result of outdoor crushing, material handling From left to right: Environmental Monitoring Members Danica Pagnutti, Margaret Julian, and road dust. All of these events have been analyzed with the aim of Monika Greenfield, Gerard Courtin, Colleen Zilio, Tom Zanetti, Wayne Manson preventing future occurrences from these sources by better controlling dust and Ron Paolin track-out of working areas, improving road cleaning, and maintaining best practices for handling dusty materials. Vale established an Environmental Monitoring Team in 2012, in response to site-specific standard approvals Vale received from the Ministry of Details about monitoring programs, emissions reduction and other Environment and Climate Change for both nickel and sulphur dioxide. environmental initiatives can be found at http://www.vale.com/canada/ The group is comprised of Vale representatives, a representative from the EN/aboutvale/communities/health-safety-environment/our-environment. Ontario Ministry of the Environment and Climate Change and members of Current and recent environmental monitoring results as well as real-time, the community including members of Vale’s Copper Cliff Liaison Committee recent and historical monitoring results are posted on our website in order and two representatives from the Gatchell Community Action Network. to ensure transparency of our operations. This group meets at least twice per year and serves as a forum for the dissemination, consultation, review and exchange of information regarding environmental issues, air monitoring data, and any new or amended Ministry approvals.

Tailings Management The facility at Vale’s Sudbury Operations between Lively and Copper Cliff is one of the largest tailings operations in the world.

Given Vale’s technical experience, history and knowledge in this area, we are recognized in the industry for our considerable efforts to improve our tailings and water management facilities.

In addition to Vale’s highly-qualified staff in the area of tailings and water management who visually and remotely patrol and monitor tailings dams on a daily basis, Vale consults with individual experts in various fields such as geotechnical engineering, hydrology, seismicity and the environment to manage our tailings in a safe and responsible way.

Very importantly, all aspects of our tailings dam design, operation and risk Vale’s Randy Donato (left) with the Tailings Review Board, an independent group of experts mitigation strategies are reviewed by an independent third party known in tailings management. as the Tailings Review Board, made up of globally recognized tailings management subject matter experts.The Board receives frequent updates Vale also has a very good record of regulatory compliance, actively throughout the year and attends our site annually for a highly technical contributes to the Mining Association of Canada’s (MAC) Tailings Working review of the operation and management of our tailings facility. Group and adheres to MAC’s Towards Sustainable Mining (TSM) initiative, which includes a best in class Tailings Management Protocol. This protocol Vale is very committed to continuous improvement with respect to requires tailings management systems to conform with strict guidelines and our tailings facilities and has an active capital investment program to indicators that are independently verified. Vale’s current TSM ratings (AA) continuously upgrade our dams to the highest standards. In fact, since 2007, for our tailings area are among the industry leaders and Vale is progressing Vale has spent almost $50 million on upgrades to our tailings facility and towards the highest rating that can be achieved (AAA). these investments will continue over the coming years.

Report to the Community / May 2015 6 Community Investments

United Way Campaign Edgar Burton Christmas Vale and United Steelworkers raised $865,000 for the 2014 United Way Food Drive Centraide Sudbury and/et Nipissing Districts fundraising campaign. The funds collected represent a 20% increase over last year’s campaign. The Edgar Burton Christmas Food Drive was another big success in 2014, with 500 businesses and 39 schools participating. The campaign collected more Vale matches employee and pensioner’s contributions to the campaign, than 100 tons of food, meeting one quarter of the Sudbury Food Bank’s dollar for dollar. Employees have the opportunity to make regular annual needs. contributions or a one-time donation through a payroll deduction program.

Vale and the USW’s joint fundraising campaign is the largest contributor to the United Way’s Sudbury and Nipissing District community campaign. Since the campaign began in 1982, over $16 million has been raised by the company and USW.

Supporters and committee members celebrate the success of the 2014 Edgar Burton Christmas Food Drive at the Sudbury Food Bank.

Edgar Burton, a Vale Divisional Shops employee for 36 years, started the annual food drive 25 years ago when Edgar’s daughters asked him if they could start collecting food for the less fortunate. Since then, the campaign has grown to become one of the largest food drives across Canada.

The Edgar Burton Christmas Food Drive has collected more than 950 tons of Kelly Strong, (former) Vice-President UK & Ontario Operations; Ashley Thibault & Tina food since it began. The goal for the food drive, as it always was for Edgar, was Vincent, Co-Chairs; and Tim Kiley, Vice-President of the United Steelworkers Local 6500 to collect ‘one more can’ than last year. present a cheque to United Way Centraide Sudbury and/et Nipissing District.

Hope Air

Earlier this year, Vale announced an investment of $100,000 in Hope Air over the next two years. This meaningful new partnership will provide free flights to residents of Greater Sudbury in financial need that require vital healthcare services that are not available locally.

Hope Air is a unique national charity which arranges free flights for Canadians who must travel to healthcare and are in financial need. Clients need to meet some eligibility requirements, which can be found at www.hopeair.ca. Since its start in 1986, the charity has provided over 91,000 flights with generous support from commercial airlines, corporations, foundations and individual donors.

Vale’s donation was announced at centre ice at the company’s 10th annual Sudbury Saturday Night hockey game, which saw the Sudbury Wolves square off against the North Bay Battallion. The company invited its employees and members of the community to enjoy the game.

For more information about Vale’s community investments and how to Kelly Strong, (former) Vice-President of Vale’s Ontario & UK Operations and Angie Robson, apply for funding, visit: www.vale.com/canada/en/aboutvale/communities/ Manager of Corporate & Aboriginal Affairs for Vale’s Ontario Operations, (centre) present a community-investment/ $100,000 cheque to Doug Keller-Hobson, Executive Director of Hope Air (right), and local Hope Air clients, Debbie (left) and Arianna (right) at Vale’s annual Sudbury Saturday Night with the Sudbury Wolves.

Report to the Community / May 2015 7 Community Events

Vale Concert Series Wednesday, May 20 Cécile Doo-Kingué Vale kicked off the third annual Vale Concert Series with a $50,000 donation last year. Wednesday, June 17 The series began in May with five concerts held throughout the summer at The Grace Hartman Amphitheatre. Over the past two years, approximately Union Duke $30,000 has been raised in funds and food for the Sudbury Food Bank through this concert series.

More award winning, top-tier Canadian talent is planned for this year’s Vale Concert Series. Wednesday, July 15 Charlie A’Court When: From May 20th to September 16th, 2015 Where: Grace Hartman Amphitheatre Cost: Free! Monetary donations to the Sudbury Food Bank are welcome. Wednesday, August 12 Ennis

Wednesday, September 16 Adam Crossley

Copper Cliff Open House We want to hear from you!

If you have any questions or concerns about Vale’s Sudbury Operations, please call our Community Concerns Line at: (705) 222-VALE (8253), for 24 hour service, seven days of the week. Or, email us at: [email protected]. Vale’s annual Open House in Copper Cliff. Please also visit us on the web at: Vale hosted its annual Open House in Copper Cliff in September. The event offered an opportunity to meet Vale staff, learn about the company’s www.vale.com/canada. operations and discuss issues that are important to the community. Another Open House is planned for Fall 2015.

Report to the Community / May 2015 8