Sustainability Report 2019vale.com/rs2019 Sustainability Report 2019vale.com/rs2019 6 Letter from the CEO Index Letter from the Board 8 of Directors 9 About this report 116 Letter External Reader 10 Materiality 117 Scope 118 External Verification 121 GRI Content Index Chapter 1: 135 Appendix Brumadinho: the challenge of repairing and rebuilding 11 12 Time line Chapter 2: Vale 17 Socioeconomic reparation 41 42 Profile 28 Environmental reparation 45 Governance 30 Treatment of the Paraopeba River 51 Sustainability Governance 33 Infrastructure recovery Risk management 35 Dam safety recovery 58 Ethics and Compliance 38 Legal sanctions 59 39 New pact with society: proximity and transparency 40 Renova Chapter 3: Chapter 4: Commitment to people Commitment to the planet and Human Rights 81 83 Vale Technological Institute (ITV in Portuguese) 62 63 Human Rights The Vale Fund 65 Health and Safety 84 Biodiversity 68 Relationship with communities 85 Dams management 69 Indirect economic impacts 91 95 Water resources and effluents 71 Occurrences at railroads Profile 96 Climate change and Energy Governance 71 Artisanal and small-scale mining 107 Particulate matter, SOx and NOx emissions Sustainability Governance 72 Relationship with Indigenous peoples and traditional communities Risk management 110 Non-mineral waste 72 Land use disputes Ethics and Compliance 73 Resettlements Chapter 5: Economic perfomance 74 The Vale Foundation 75 Sponsorships 111 113 Financial performance 76 Human capital management 114 Relationship with investors 80 Inclusion and diversity 115 Environmental, social and governance (ESG) on investor relations agenda Letter from the CEO GRI 102-14 We know that we are at the beginning of the path and that We believe the new coronavirus pandemic (Covid-19), there is still much to be done to which we face during the publication of this report, is one of the most critical challenges in the recent human history. At a time like this, everyone must do their part to combat achieve the change we need. the advance of the disease and, consequently, the crisis that impacts us all. performance in 2019, it is also part of our commitment to fight the disease, to use every opportunity to seek collabouration From the beginning, Vale has worked to make all possible from everyone in adopting measures advised by health efforts to live up to its responsibili-ties: we have adapted our agencies, so that we can move through this crisis as quickly as work routine as a preventive measure to help ensure the safety possible and with the least possible damage. of employees, partners and suppliers, adopting home office work in all eligible situations and interrupting operations in Until the Covid-19 crisis arose, the central reason for this situations of greater risk, and donating five million fast tests message was to present our journey in 2019, the most difficult to the Brazilian government to detect infection by the virus, in the history of Vale and the community of Brumadinho, due hoping to considerably increase the capacity to map and to the rupture of Dam I at the Córrego do Feijão mine. isolate infected people. Since the occurrence of this tragedy, we have endeavored to We have also seek to provide more intensive support to dedicate ourselves to rethinking not only the way we work, our employees and suppliers to help them deal with the but also our own vision of the world and of business. We have economic consequences of the crisis. For our employees, we sought to repair as much as possible the impacts caused by have launched an extra credit on the food card so that they the dam’s rupture on people and the environment, and we can cope with increased expenses at home. For suppliers, we are working to increase incident prevention, to make it our have announced support measures during the crisis such as mission that this type of occurrence never happens again. At disbursing USD 160 million to be paid before maturity to more the end of this process, Vale needs to be a better company. than a thousand suppliers who have performed services and delivered materials. In all these aspects, we know that we are at the beginning of the path and that there is still much to be done to achieve Although the scenario of the fight against Covid-19 is not the change we need. Throughout this report, we present the subject of this report, which instead focuses on our what has been accomplished so far, our planning for the coming months and years, and the progress we have made in our process to review the most relevant aspects of our management and operation. 6 Sustainabilty Report 2019 Letters 7 Among the issues we will address are priorities such as the stakeholders, as well as to the sustainable development of already initiated decommissioning of dams upstream, and the territories where we operates. Among our guidelines is our initiatives targeted towards the more efficient monitoring to resume production levels, volume and cost. In iron ore, of these structures and the training of teams in an effort to we follow a “flight to quality” strategy, i.e. maximizing the reinforce our operations’ safety. quality of our product compared to market options. In the base metals, the achievement of financial sustainability opens On the other hand, we have taken on new commitments excellent perspectives for the business. and re-evaluated and re-signified existing ones to expand our environmental, social and governance goals, because Finally, I want to thank everyone who has supported us in this we understand that our very existence is tied to being a difficult journey. Our employees, shareholders, communities, sustainable company and a good citizen that is committed to associations, business partners, civil society and government respect for human rights throughout our entire value chain. entities have made it possible for us to get this far and will play a key role in the progress that still needs to be made. This is the basis of our new pact with society, one of the pillars of Vale’s sustainability. Based on this pact, we have Thank you very much. sought to adopt solid principles to manage safety, business conduct and social, environmental and economic activities on all fronts and stages of our operations. To this end, we monitor and seek to adopt the best practices in the mining sector, using them as a reference to continuously improve our strategies, policies and processes. By doing so, we want to reduce as far as reasonably possible the negative impacts that our operations cause to communities and the environment. We will need to invest increasingly in dialogue with our stakeholders and in setting challenging objectives related to the main aspects of our operations. Eduardo Bartolomeo Vale’s Chief Executive Officer One of these objectives is to become a carbon neutral company by 2050, reducing and neutralizing our emissions, in line with the principles of the Paris Agreement and in line with building a new economy. Together with these changes and advances, Vale and its employees remain committed to creating value and delivering results that produce and share wealth with our 6 Sustainabilty Report 2019 Letters 7 Letter from the Board of Directors GRI 102-14 Throughout 2019, Vale’s highest priority was to respond to Despite the difficulties, the seriousness with which the impacts caused by the rupture of Dam I at the Córrego we take our obligation to repair the damage caused do Feijão mine, in Brumadinho, Minas Gerais. This is also by the rupture with the goal of making reaffirm the the concern of the company’s shareholders, represented company’s commitment to generate value linked to by this Board of Directors, all deeply committed to actions sustainability. to receive and reparation damage to those affected and to the entire region of Brumadinho. To this picture we can add the gravity of the Covid-19 pandemic, which has caused severe threats to global We are deeply connected to the victims and their families health in addition to the economies of countries. The in a feeling of solidarity and sorrow for what happened. company has worked to adapt this new scenario, We understand the scale of the impact caused and by means of protocols aimed to protect the people our obligation to develop support and repair actions, who are part of its value chain and is aware of the while working to ensure that something like this never necessary adjustments in response to the new happens again. That is why, from the very beginning, we economic context. have committed ourselves to transparency, maintaining a constant dialogue with the entities involved in the Finally, we would like to reinforce our confidence recovery process and with the society in general. in the measures being taken to repair the damage caused by the rupture of the Brumadinho dam. This This concern has extended to our governance as a whole. Report portrays the willingness of the company to Vale has made adjustments and developed new models, act in a positive manner in all its circles of influence, especially in regards to its risk management, which while generating value for its shareholders and we have reformulated and enhanced. Currently, four society as a whole. executive committees support the analysis of the inherent risks to the business and provide recommendations Cordially, regarding practices and concepts. At the same time, the Executive Board of Safety and José Maurício Pereira Coelho Operational Excellence was created, directly subordinate to Vale’s President of the Board of Directors the Chief Executive Officer, to act across operations to with the goal of making our activities safer and more efficient. 8 Sustainabilty Report 2019 Letters 9 About this Report GRI 102-46 | 102-48 | 102-49 | 102-50 | 102-51 | 102-52 | 102-53 | 102-54 Vale’s Sustainability Report 2019 summarizes the company’s This report has been prepared in accordance with the GRI actions and learning following the rupture of Dam I of the Standards: Comprehensive Option and the Mining and Metals Córrego do Feijão mine, in Brumadinho (Minas Gerais State Sector Supplement.