Report to the Community

May 2016

Stuart Harshaw became Vice President of Vale’s A Message from Stuart Harshaw Operations in January 2016. In that capacity, he As the new Vice President of Vale’s Ontario As one of ’s largest employers, is responsible for Operations, it’s my pleasure to present the health and safety of our people and our overseeing one of the Vale’s annual Report to the Community. neighbours around us will always come first. largest integrated Inside you will find comprehensive and operations information about our business and I’d like to thank you for taking the time to read in the world. community activities. this report. If you have any feedback on the information provided, we would love to hear Born and raised in Scarborough, Stuart has Like other companies in Ontario and from you at: worked for Vale for more than 25 years. around the world, Vale has been faced with He has a degree in metallurgical engineering a prolonged period of very difficult market Sincerely, from Queen’s University and a Master of Business conditions. While this has proved challenging Administration (MBA) from Laurentian University. for our business, Vale remains firmly committed to making a positive difference in Sudbury and From 1990 to 1999, he worked in Sudbury all of the communities in which we operate. and Port Colborne in various technical and Stuart Harshaw operational capacities. He relocated to Toronto As always, our most important priority remains Vice President, Ontario Operations in 1999 and worked in the company’s corporate the well-being of our approximately 4,000 Vale Limited office in progressively senior roles. Since then, he employees that work so hard to produce has worked around the world leading marketing, our products. operational and project teams in Canada, the UK and most recently Asia Pacific.

Inside: Health & Safety

In 2015, Vale introduced a new safety program at its Ontario Operations called HomeSafe.

The name of the program and concepts behind it came directly from our employees. The primary goal is to effectively manage risk so that everyone goes home safely to their loved ones every day without injury. The program features images of our own employees at work and at home to remind us all of our reasons to go HomeSafe. Andrew and family, Copper Cliff Nickel Refinery

We made progress on our safety goals in 2015 by achieving the fewest lost-time injuries (LTIs) in the history of our Ontario Operations. LTIs are injuries that are severe enough to cause someone to have to stay home and miss a shift. We also achieved the greatest number of “zero harm days” on record, which are days where no one is harmed, even from a minor injury. Walter and granddaughter, Transportation

Partners in Safety At Vale, our most important value is “Life Matters Most” and we continue to work diligently with our industry, government and labour partners to develop and implement the highest safety standards within our operations. We were an active participant in the provincial Mining Health, Safety & Prevention Review led by Minister Kevin Flynn and Chief Prevention Officer, George Gritziotis, and fully support the Final Report issued in April 2015.

We are fortunate to be a part of a community that is internationally recognized for its safety standards and expertise, with some of the finest mine rescue teams in the world right here in Sudbury. In fact, Vale’s West Mines Team won the Ontario Provincial Mine Rescue Competition in June of last year. We also look forward to hosting mine rescue teams from around the world at the International Mine Rescue Competition taking place in Sudbury in August 2016. Vale’s West Mines Team won the Ontario Provincial Mine Rescue Competition

Mental Health In 2015, Vale launched a 3-year study called Mining Mental Health, in partnership with the United Steelworkers (USW) and the Centre for Research in Occupational Safety and Health (CROSH) at Laurentian University.

The purpose of the study is to gain vital information to develop key strategies that promote positive mental health for workers at Vale’s Ontario Operations and more broadly in the mining industry. A pilot of the study has been completed, with a comprehensive survey to be deployed to Vale’s workers over the coming months.

“Good employers recognize the importance of keeping their people physically safe and healthy on the job, and great employers are taking the next step to ensure their workplaces promote psychological safety Announcing our new ‘Mining Mental Health’ project at the CROSH laboratory on and well-being. Vale is becoming a leader in this area, and I want to June 23, 2015 (left to right) France Gélinas, MPP Nickel Belt; Jody Kuzenko, Director of thank them for supporting this research project and taking mental Refining for Vale’s Ontario Operations; Leo Gerard, International President of the United Steelworkers; Dr. Michel Larivière, Laurentian University; Hon. Kevin Flynn, Ontario Minister health in the workplace seriously. I hope to see many companies of Labour; and Dr. Tammy Eger, Research Chair in Occupational Health and Safety and follow their lead.” Associate Professor in Laurentian University’s School of Human Kinetics. - Kevin Flynn, Minister of Labour, Government of Ontario 2 Report to the Community / May 2016 Business Update

2015 was a very challenging year for Vale and mining companies across the world, with depressed commodity prices and lower global demand for our products.

For example, the price of nickel alone decreased by approximately 40% throughout the year. Despite these challenges, Vale continues to invest in the long-term success of our Sudbury operations.

In fact, over the past 10 years, Vale has invested approximately $4.3 billion on capital projects to modernize and update infrastructure and equipment. This translates into significant economic development in the community, as Andrew and family, Copper Cliff Nickel Refinery typically about 80% of the company’s service and supply expenditures are spent locally.

Currently, our two primary capital investment projects are the Copper Cliff Mine Expansion Project and the Clean AER (Atmospheric Emissions Reduction) Project. Both projects are designed to ensure that Vale’s Sudbury Operations are sustainable long into the future.

Copper Cliff Mine

Vale is currently in the final stages of the Phase 1 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 rehabilitation and activation of the South Mine shaft, which was placed on care and maintenance in 2008. The project will be evaluated in phases, and would access bodies from Murray Mine in the North to Kelly Lake deposits in the South. This would help support nickel, copper and precious production for Vale’s Sudbury operations for the next 20 years. Photo credit:

The Clean AER Project

Vale’s Clean AER Project, currently being implemented at the Copper Cliff Gases that currently go up the Superstack from the smelter converter aisle Smelter, is the largest single environmental investment in the history of will be captured and sent to our acid plant, to be converted into sulphuric Sudbury. Our $1 billion investment will reduce sulphur dioxide levels by acid and sold. Two of three new converters, which have been fabricated 85% from current levels and significantly reduce and particulate locally, have been delivered to the smelter to date. Other aspects of the emissions. By reducing natural gas consumption and modifying certain project include better materials handling and containment to prevent dust process components, the Clean AER Project will also reduce smelter and other emissions from entering the community. greenhouse gas emissions by 40%. During execution of the project, the smelter continues to operate, which AER stands for “Atmospheric Emissions Reduction”, which simply means adds significant complexity to the planning, scheduling and coordination of cleaner air. Following the completion of the project, Vale’s total sulphur the work between the project and operations teams. In addition, the smelter dioxide emissions will be reduced to approximately 20 kilotonnes per is currently transitioning from two furnaces to one, with the move to a single year. This reduction is in addition to the 90% reduction in sulphur dioxide furnace expected to be complete in 2017. emissions Vale has incorporated since 1970. The Clean AER Project is approximately 60% complete, with more than $625 million spent on the project and transition to a single furnace. SO2 Emission Reduction Projections

Emission Limit 1000 1500 2000 2500 500 0 1970 1980 1990 2000 Project Completion Delivery of converter #10 as it was transported from a local fabricator to Vale’s Smelter in Copper Cliff.

Report to the Community / May 2016 3 Management

In 2015, Vale earned the highest rating that can be achieved (AAA) for tailings management under the Mining Association of Canada’s Towards Sustainable Mining program. This accomplishment is the result of a responsible approach to tailings management that is independently verified and adheres to rigorous protocols, guidelines and best practices.

The tailings facility at Vale’s Sudbury Ope rations, between Lively and Copper Cliff, is one of the largest tailings operations in the world. We take the responsibility of managing this facility very seriously and are recognized as leaders for excellence in tailings management.

Very importantly, all aspects of our tailings dam design, operation and risk mitigation strategies are reviewed by an independent third party known as the Tailings Review Board, made up of globally recognized tailings management subject matter experts. The Board receives frequent updates throughout the year and attends our site annually for a highly technical Members of the Tailings Review Board visit Vale’s Central Tailings Area in Copper Cliff. review of the operation and management of our tailings facility.

Vale is committed to continuously improving our tailings facilities and has an active capital investment program to upgrade our dams to the highest standards. In fact, since 2007, Vale has spent approximately $60 million on upgrades to our tailings facilities.

Another new development is the use of biosolids in our Central Tailings Area to create a vegetative cover for dust control. Biosolids are safe and environmentally friendly organic materials that come from de-watered and treated domestic waste. They can be recycled and applied as fertilizer to improve soil quality and stimulate plant growth.

Sections of Vale’s Central Tailings Area are now coming to life with new vegetation that provide effective and natural dust control. In the future, we hope to use biosolids to grow hay and straw that we also use for dust control in the Central Tailings Area. Mark Palkovits, Reclamation Supervisor for Vale’s Sudbury Operations, stands with waist- high plants growing from biosolids in the Central Tailings Area.

Emergency Management

On August 13th 2015, during a planned How to ACT in an Emergency

maintenance period (PMP) at Vale’s acid When a potentially hazardous material release occurs which may affect plant in Copper Cliff, there was a release of nearby communities, Vale activates a comprehensive emergency plan. If you hear the Vale emergency signal – a repeating 15-second air horn blast NOx mist, which is a combination of nitrogen followed by 5 seconds of silence, be sure to ACT accordingly. oxide and nitrogen dioxide. Always go indoors Emergency measures were activated and Vale’s air horn was sounded as a Close all doors and windows precaution to notify residents in the nearby area to stay inside. Turn off furnace, air conditioners or other air intakes Hearing the air horns was unsettling for many of our neighbours, especially those living in close proximity to our operations. Although we are confident Do not use the telephone unless you require immediate emergency the community was never at risk, we sincerely regret the concern that was assistance. Stay tuned to your radio or television for information updates raised as a result of the incident. and remain inside until an “all clear message” is broadcast and the air horn has stopped. A joint investigation by Vale and the USW was conducted to understand what happened in order to put measures in place to prevent a similar incident from Vale tests its emergency warning system, including its air horn, every occurring. As a result, we will be changing current procedures to wash down Monday at 1:30 pm. If you hear the horn on Monday at 1:30 pm, please the acid plant during the next PMP, which is scheduled in 2017. remember it is simply a regular test of our emergency system.

We thank the City of Greater Sudbury’s Emergency Services department If you would like ACT posters or magnets for your home or workplace, for their assistance and for ensuring public safety at all times during the please send a request to: incident. We would also like to thank residents for responding appropriately and following the ACT protocol.

4 Report to the Community / May 2016 Environment

Community Air Quality Monitoring Environmental Monitoring Team

Vale’s sulphur dioxide (SO2) air monitoring network, co-owned by Sudbury Vale established an Environmental Monitoring Team in 2012, in response Integrated Nickel Operations, a Company, includes 18 fixed to site-specific standard approvals Vale received from the Ministry continuous monitoring stations, two meteorological towers and Vale’s of Environment and Climate Change (MOECC) for both nickel and mobile SO2 monitoring unit. The mobile unit is used to measure ground sulphur dioxide emissions. The group includes Vale representatives, a level concentrations of SO2 in areas of the community not covered by the representative from the MOECC, members of Vale’s Copper Cliff Liaison 18 fixed stations. Vale also owns and operates eight particulate (metals) Committee and two representatives from the Gatchell Community Action monitoring stations. Network (CAN).

Vale performed well on emissions in 2015, largely due to its comprehensive This group meets at least twice per year and serves as a forum for the

Emissions Reduction Program (ERP). This program limits SO2 emissions to dissemination, consultation, review and exchange of information the atmosphere by slowing down or stopping production at the smelter regarding environmental issues, air monitoring data, and any new or when dispersion conditions are expected to cause unacceptable ground amended approvals from the provincial government. level concentrations of SO2 in the community. ERP Operators monitor operating conditions 24 hours per day, 7 days a week and control smelter production accordingly.

Despite our best efforts, Vale exceeded its allowable limit for SO2 in the community once in 2015 and its allowable limit for nickel emissions twice. These events have been analyzed with the aim of preventing future exceedances.

For further information about Vale’s environmental performance and real-time air monitoring, please visit: From left to right: Environmental Monitoring Members Danica Pagnutti, Margaret Julian, Monika Greenfield, Gerard Courtin, Colleen Zilio, Tom Zanetti, Wayne Manson and Ron Paolin

Energy Green Economy North

Vale’s production processes are, by their very nature, energy intensive. In Vale is proud to be a founding sponsor of fact, energy is one of our highest operating costs, second only to labour. ReThink Green’s new Green Economy North Fortunately, Vale self-generates approximately 15% of the energy we program, launched in April 2016. The program require through hydro-electric dams. We also participate in provincial peak is connecting a network of businesses and demand management and conservation programs to maximize energy organizations with resources and expertise to set achievable sustainability efficiency and reduce greenhouse gas emissions. targets. For more information visit

High Falls Dam

Regreening

Vale’s Sudbury operations are internationally recognized for our regreening and reclamation efforts. Historically stressed lands and waterways are transforming back to their natural state after more than a century of mining and logging activities in the .

We’re doing this through an annual aerial seeding program that has reclaimed approximately 8,000 acres of land; by planting thousands of trees that are grown in our own local greenhouses; by introducing natural pollinators like bees and monarch butterflies, and by restocking lakes with walleye and trout raised by our environmental team. Tree planting is part of Vale’s regreening efforts.

Report to the Community / May 2016 5 Environment

Aerial Seeding and Tree Planting Biodiversity

Aerial seeding is particularly effective for re-vegetating historically stressed Vale is also working to improve biodiversity at our revegetated slag hills off land in remote areas. In 2015, we treated 300 acres northeast of Coniston. Big Road. We’ve planted milkweed there, which is the sole food source for monarch butterflies, a species in decline due to loss of habitat across North America. Vale’s milkweed patch provides a source of food; in turn the monarch butterflies pollinate the wildflowers, further enhancing biodiversity in the area.

Aerial seeding.

Vale also supports the City of Greater Sudbury’s Biodiversity Action Plan with an annual donation of $250,000. In 2015, approximately 150,000 trees and shrubs were planted throughout Greater Sudbury as part of this program. Vale also grows approximately 300,000 seedlings annually in our Copper Cliff greenhouse to support regreening efforts throughout the City. For more information about the City of Greater Sudbury’s regreening program, please visit: Monarch butterflies feed on milkweed planted on Vale’s revegetated slag hill.

Community Garden Bee hives have also been placed at the base of Vale’s revegetated slag hills to pollinate the flowering plants that provide a source of nectar and pollen for Vale’s greenhouse in Copper Cliff is also home to a community garden. the bees. The hives also aid local efforts to restore declining bee populations The greenhouse features a number of community garden boxes and local in the area. residents are invited to plant and care for their own garden plots. Vale has a few of its own garden boxes and the fresh produce generated is donated to the Foodshed Project’s Grow-A-Row program, benefiting the Samaritan Centre in Sudbury.

Wayne Tonelli, retired Vale employee and local beekeeper, and Glen Watson, Superintendent of Reclamation & Decommissioning for Vale, show the honey they produced with the company’s bee colony.

In addition, our environment department has been raising rainbow trout and walleye in our Copper Cliff Greenhouse since 2011. In partnership with the Ministry of Natural Resources, approximately 23,000 fish have been released into the Onaping River and Ramsey Lake since the program began. Mike Pennie and Joanne Renzoni enjoy their garden box at Vale’s community garden This biodiversity initiative boosts local fish populations and provides a highly in Copper Cliff. valued resource for local anglers.

6 Report to the Community / May 2016 Community

Vale makes significant philanthropic United Way Campaign contributions annually to a number of local Together, Vale and the USW raised more than $600,000 for the 2015 United charities and organizations to enhance our Way Centraide Sudbury and/et Nipissing Districts fundraising campaign. Employees donated through payroll deductions and Vale matched 50 cents quality of life in Sudbury. By supporting to every dollar that employees contributed. The Vale-USW donation was organizations such as the Northern Cancer announced at the company’s annual ‘Sudbury Saturday Night’ hockey game Foundation, the Maison Vale Hospice, YMCA at the Sudbury Arena in February 2016. Sudbury, the Sudbury Food Bank and Science Vale and the USW’s joint fundraiser is the largest contributor to the United Way’s Sudbury and Nipissing District community campaign, with more than North, we are committed to giving back to the $17 million raised since our first campaign in 1982. community we call home.

Edgar Burton Christmas Food Drive

The Edgar Burton Christmas Food Drive celebrated another successful year in 2015, with more than 400 businesses and 40 schools participating. The campaign, sponsored jointly by Vale and the United Steelworkers, continues to be one of the largest food drives in Canada and helps to feed approximately ten per cent of Sudbury’s population.

The Edgar Burton Christmas Food Drive has collected more than 855 tons of food since it began. The goal for the food drive, as it always was for Edgar, was to collect ‘one more can’ than last year.

Tina Vincent-Gagnon and Nick Larochelle, representing USW 6500 members (left), along with Danica Pagnutti and Stuart Harshaw, representing Vale (right), present a cheque for $600,000 to Kelly Sinclair, Michael Cullen and Katherine Cockburn from the United Way Sudbury and Nipissing District office (centre) for the Vale/USW United Way fundraising campaign.

ACT Foundation

Vale donated more than 150 mannequins to local high schools in 2015, in partnership with the Advanced Coronary Treatment (ACT) Foundation. Supporters and committee members celebrate the success of the 2015 Edgar Burton Christmas Food Drive at the Sudbury Food Bank. The ACT Foundation is a national charitable organization for establishing CPR and defibrillator training programs in high schools throughout Canada. One Laptop Per Child With eight in ten out-of-hospital cardiac arrests occurring at home or in Over the past few years, Vale has sponsored the donation of tablet public places, empowering youth with CPR training as part of their high computers filled with learning applications and activities to local First school education will help increase citizen CPR response rates over the long Nation Communities as part of its national sponsorship of One Laptop Per term. To date, the ACT Foundation has established CPR programs in more Child (OLPC) Canada. Students from Whitefish River First Nation, Sagamok than 1,700 high schools nation-wide, empowering more than 2.9 million Anishnawbek First Nation, Atikameksheng Anishnawbek First Nation, youth to save lives. Wahnapitae First Nation and the N’Swakamok Native Friendship Centre have benefitted from this investment in aboriginal student education. OLPC For more information about Vale’s community investments and how to Canada works to bridge the digital divide for indigenous youth by providing apply for funding, visit: students with the latest learning-centred technology, enhancing existing educational programming and empowering youth to play an active role in their own learning.

Students from Sagamok Anishnawbek First Nation enjoy donated OLPC learning tablets, Jennifer Edwards, Operations Manager for the ACT Foundation (left) and Angie Robson, sponsored by Vale. Manager of Corporate and Aboriginal Affairs for Vale’s Ontario Operations (right) along with Lasalle Secondary School students display new mannequins for CPR and defibrillator training at Greater Sudbury high schools. Report to the Community / May 2016 7 Community

Art McDonald & the Nobel Prize The Amazing Race Canada Vale Concert Series

Vale takes great pride in hosting SNOLAB at In May 2015, The Amazing Race Canada came The 2015 Vale Concert Series was held in Sudbury and we congratulate to Sudbury and completed a challenge at Vale’s throughout the summer at the Grace Hartman Dr. Art McDonald on his Nobel Prize in Physics. We Copper Cliff Mine. Competitors descended a Amphitheatre in Bell Park and featured Canadian are thrilled to count ourselves as a partner in the kilometre underground where they smashed artists including Cécile Doo-Kingué, Union Duke, ground-breaking research at SNOLAB through through ore and rock from a muck pile to find Charlie A’Court, Ennis and Adam Crossley. our ongoing relationship and in-kind support. their next clue. Admission was free of charge with donations Dozens of Vale employees were involved from to the Sudbury Food Bank welcomed. In total, a miner giving a clue to the competitors to approximately 6,000 people attended the Vale employees participating as drivers and safety Concert Series and raised $28,000 in funds and supervisors. The show offered a great opportunity food for the Sudbury Food Bank. to showcase our operations and the amazing employees we have working here, all on Canada’s Due to current market challenges, the Vale most watched television program. Concert Series is going on hiatus in 2016. However, we encourage local residents to continue their support for the Sudbury Food Bank. Donations are graciously accepted at their Dr. Art McDonald presented David Lisi, Worker Health & Safety Representative (left) and David Pisaric, Operations warehouse on Webbwood Drive or online at: Manager of Creighton Mine (right) with a plaque thanking Creighton Mine employees for their support of the SNOLAB.

Copper Cliff Open House

Vale’s annual Open House took place on September 23rd, 2015 at Dynamic Earth. The new venue provided a unique and interactive opportunity for Vale to provide updates about its operations, capital projects and environmental initiatives. Visitors also had an opportunity to learn about mining and minerals and could go on an underground tour, compliments of Vale. The next Open House will take place Wednesday September 21st, 2016 at Dynamic Earth. Cécile Doo-Kingué performs at the Vale Concert series in May 2015.

Tom Ollerhead, Production Miner at Copper Cliff Mine, A local resident speaks to Vale employees about our gave The Amazing Race Canada competitors their first clue Sudbury Operations when they arrived at Vale’s General Office in Copper Cliff. About Vale Contact Us

Vale is the one of the world’s largest mining If you have any questions or concerns about companies, present across five continents. Vale’s Vale’s Sudbury Operations, please call our mission worldwide is to transform natural resources Community Concerns Line at: (705) 222-VALE, into prosperity and sustainable development. for 24 hour service, seven days of the week.

Vale is also the world’s largest producer of nickel, with our Base We appreciate all of the feedback we’ve received on our Metals business headquartered in Toronto. Operating in Canada previous reports. We’ve heard that you enjoy receiving for more than 100 years, our Canadian operations also produce information about our operations, learning about our copper, , group metals, and . We aim environmental initiatives and how to reach out to us. We’ve to be profitable, but only as a safe, high-quality and sustainable updated this report to reflect that feedback and we’re always mining company where our most important value is looking to improve; so please continue to send your questions, “Life Matters Most.” concerns and comments to:

Vale’s operations in Sudbury are home to one of the largest Please also visit us on the web at: 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: