Our Region, Our Business, Our Future

2014/2015 Annual Update on Vale in We are what we do Mission To transform natural resources into prosperity and sustainable development. Vision To be the number one global natural resources company in creating long term value, through excellence and passion for people and the planet. Values • Life matters most • Value our people • Prize our planet • Do what is right • Improve together • Make it happen

On the cover

Vale sponsored an Employee Photo Contest in 2014. We are proud to display some of the top entries. On the front cover, counter-clockwise starting from the top: Angela Paveley (Northern Life), Dean Shier (Vale and the Environment), Camille Meuse (Family & Friends).

Rabbit on plant site. (Amanda Jacobs)

Lovro Paulic, Vice-President Manitoba Operations

Now that our Base Metals business is standing on its own We will continue to work with our employees, our two feet, we must all work to ensure that we are a safe, partners, and the communities in the region to ensure consistent, reliable and predictable deliverer of value we are ready for the transition to mining and milling in all price cycles. While we continue to strive to realize by 2019, and that the action plans arising from the the maximum value from existing and future resources, Thompson Economic Diversification Working Group the price of nickel and the global commodities market (TEDWG) process are implemented. I should note that continue to pose significant challenges. As we have heard the TEDWG process was nationally recognized yet again from our executive leaders, we will need to continue to in winning the 2015 Mining Association of improve in terms of safety, costs, and productivity. (MAC) Towards Sustainable Mining (TSM) Community Engagement Award. The process and the recognition To that end, we celebrate many achievements. Most were possible because of the commitment of the noteworthy is that Birchtree Mine again won the partners and the broad participation of many people in regional John T. Ryan Award for being one of the safest Thompson and surrounding communities. The same will mines in Canada. Since the launch of SafeProduction in be true in successfully implementing the plans. 2003, our mines have won regional or national John T. Ryan Awards nine times in 12 years. This is because our There are many other reasons to celebrate: Ben Waldner employees remain committed to managing risk to as is the second two-time Quarter Century Club inductee low as reasonably achievable in order to achieve zero in the history of our operations; our Mill reached five harm. While the award goes to one mine this year, it is years without a Lost Time Injury; and our Northern reflective of the efforts of our entire team. Employment Strategy continues to result in 100% of our process operators being hired from the north. We continue to invest in the future of Thompson. While the current market environment necessitates As we continue to celebrate success together, we discretion in terms of timelines for studies and eventual must also continue to work together to ensure that projects. Studies for the Footwall Deep Project and the our Manitoba Operations are competitive in attracting Concentrate Load-out Facility will continue and we will continued investment, reducing waste, improving proceed with the new 4450-foot level exploration drift productivity, and operating safely, in all market to further define the resource beyond the life of the cycles. Let’s all keep our focus on the actions — plan, Footwall Deep area. The five-year agreement between accept, care, lead — and goals — profit, cost, margin, Vale and USW 6166, and the performance agreement- compete — of SafeProduction, so that our business in-principle with Environment Canada, which sees us and our community continue to be prosperous and able to operate the smelter and refinery up to 2019, sustainable. It’s what we do. offer much-needed stability for our operations and our community for several years.

2014/2015 Annual Update on Vale in Manitoba 1 SafeProduction Birchtree Mine awarded its 7th John T. Ryan Award for safety

Risk management through major milestone for us,” said Manager Joe Armstrong, SafeProduction is a culture that “and confirms that the effort and commitment toward our SafeProduction model, as well as the continually makes Vale’s Manitoba implementation of its tools, are truly achieving results. Operations among the safest in It is important to note that our TRIF* (Total Recordable the country. Injury Frequency) in the Mill in 2013 was “0” proving that the goal of zero harm is attainable.” The Canadian Institute of Mining and Metallurgy (CIM) awarded Birchtree Mine the 2014 John T. Ryan award Employees at Birchtree Mine, the Mill and throughout for being the safest mine in the Prairies and Northwest the rest of Vale’s Manitoba Operations, embrace the Territories. This is the fifth time Birchtree Mine has received principles of risk management through SafeProduction this award. It has earned the national award twice. as part of their work culture. That means they seek zero harm to people, the workplace, the communities where The awards are given to a mine in a given category Vale operates, and the natural environment. They use which experiences the lowest accident frequency specific tools and processes to identify hazards, the risk during the previous year in all of Canada. Three national associated with the hazards, and to manage and reduce trophies are awarded annually — one to a metal mine, that risk to As Low As Reasonably Achievable (ALARA) a coal mine and a select mine. An award is also given to both at work and at home. the mine with the lowest accident frequency in each of the following regions: and East, , Prairies A key component to the success of SafeProduction and , British Columbia and Yukon. is union involvement. In 2014, Vale’s Manitoba Operations and United Steelworkers Local 6166 jointly In addition, the Mill achieved five years without a Lost developed and delivered the Fatal Risk program that Time Accident, as of July 23, 2015. “This is certainly a focuses on high to extreme risk work. They also jointly attended training on mental health to help employees understand the signs and stigma around mental health. Vale also continues to support the City of Thompson with its SafeOperations program, which has seen an increased awareness of risk management with City employees, reduced accidents and reduced costs through Workers’ Compensation.

* Total Recordable Injury Frequency rate is the number of medical aid, restricted work, lost time and fatal injuries, multiplied by one million and divided by the number of Employees at Birchtree Mine celebrate their seventh hours worked for a specific time period. John T. Ryan Award. (Chris Sundevic)

2 Divisional 2014 Operating ALARA

2014 2013

1. Manager’s Safe Production Activities 19. Hiring and Training 2. Safe Production Expectations and Accountability

18. Maintenance 3. Safety Professional

17. Medical Services 4. Vendor and Contractor Safety

16. Emergency Preparedness and Fire Prevention 5. Audits/Interactive Discussions

15. Injury and Incident Investigation 6. Employee Involvement

14. Inspections 7. Safe Production Committees

13. Ergonomics 8. Managing Risk and Regulatory Compliance

12. Process Safety Management 9. Communications 11. Chemical Management/Industrial Hygiene 10. Rules, Procedures and Job Safety Analysis

Each year Manitoba Operations audits itself in 19 key areas to determine how well it is moving toward the goal of zero harm. The more the words ‘zero harm’ become visible, the better the progress towards zero harm.

The mines in Thompson have won the John T. Ryan award in the following years:

Thompson Mine Birchtree Mine 1985 Regional 2004 National 1988 Regional 2005 Regional 1989 Regional 2007 Regional 2006 Regional 2008 Regional 2010 National 2009 Regional (co-winner) 2010 National 2012 Regional (co-winner) 2014 Regional

2014/2015 Annual Update on Vale in Manitoba 3 Footwall Deep Project Feasibility study for Footwall Deep Project is on track

Nearly 150 people from throughout “We are in competition with other capital projects Vale’s mining operations in Canada, across the company for investment dollars,” said Mark Scott, Director, Mining & Milling. “We are working to including external consultants, have make this a world class project. We are taking all the brought the FEL3 (feasibility) study to steps required to mitigate the identified risks; and we the half-way point. anticipate we will have a compelling submission.”

Despite a continuing ‘trough’ in base metals prices, The Footwall Deep Project, if the capital is approved Vale continues with the feasibility study for the to develop it as a mine, would provide Vale’s Manitoba Footwall Deep Project. It is a major undertaking that Operations with ore through approximately 2028. must investigate every aspect — safety, technical, It is interesting to note that work associated with the environmental, financial, operational, etc. — to prove Footwall Deep is also providing the building blocks for that the Footwall Deep Project can be a viable mine ‘life after the Footwall Deep Project.’ The next ‘phase’ is within Thompson Mine. called the Hangingwall Area. A new exploration drift The FEL3 study is a major undertaking that started in is being driven from the 4450-foot level to improve 2014. The engineering will be complete by the end of diamond drilling access and angles to more accurately this year, with the FEL 3 report being written in the first define the Hangingwall Area, and to further develop the quarter (Q1) of 2016. Vale’s senior management team longer term mining and milling future for Thompson. will study the report beginning in Q2 2016. If the project Processing ore from the Footwall Deep Project will is approved, execution of the project should begin as require changes, both due to the project and to global market conditions improve. changes in the business strategy (flowsheet) for Manitoba Operations. This includes a new Pastefill Plant, which will provide underground backfill, as well as a concentrate load-out facility. The feasibility study (FEL3) for the Mill concentrate load-out project will also be complete in 2016.

Drill core samples are taken from thousands of feet below surface and provide the information needed to ‘map’ the rocks underground and determine if there is sufficient mineable ore to develop a project. (Vale archives)

4 A new exploration drift is being driven on the 4450-foot level to improve diamond drilling access to the Hangingwall Area. (Vale archives)

Thompson Mine — Expanding Resource Opportunities FEL stands for Front End Loading. It means the risk associated with a project is managed by ‘front end loading’ the technical and financial work that goes into a particular project. It helps ensure that when a project moves forward, there are no unexpected safety, production, or financial risks and that the project will be successful.

2014/2015 Annual Update on Vale in Manitoba 5 Towards Sustainable Mining Vale strives to maintain best practices in mining

Best practices start with exploration principles and annually reports their performance and continue through to against certain indicators. These include Safety and Health, Aboriginal and Community Outreach, Energy decommissioning — this includes and Greenhouse Gas Emissions, Tailings Management, environmental monitoring and Biodiversity Conservation Management and Crisis community investment. Management. All results are publicly available and are independently verified. The Mining Association of Canada (MAC) developed the Towards Sustainable Mining (TSM) initiative in 2004 to Vale’s Manitoba Operations was recognized nationally help Canadian mining companies achieve the highest this year by earning the TSM Community Engagement standards of responsible mining. TSM is a set of tools Award, which acknowledged our role in creating the and indicators that help mining companies assess how Thompson Economic Diversification Working Group well they are performing in safety, as well as socially and (TEDWG). We maintained an AAA rating, which is the environmentally. highest possible score. TEDWG comprised stakeholders from across northern Manitoba and developed a Participation in TSM is mandatory for all members series of plans to promote economic diversification in of MAC. Each member commits to a set of guiding Thompson and region.

For more information on the Mining Association of Canada, the Towards Sustainable Mining initiative, and to view Vale’s scores for all TSM indicators, visit www.mining.ca.

Best practices in Tailings Management help ensure effluent Best practices in Community Outreach include sponsoring and discharge was below one-half of the monthly limit for nickel in participating in community events. (Chris Sundevic) 2014. (Matthew Vanderhyden)

6 Best practices in Community Outreach include annual Open House events. These include information, demonstrations and hands-on activities to help explain exploration, mining, milling, environmental management and other aspects of a sustainable mining operation. (Vale archives)

Thompson-2014

Tailings Crisis Management Management

Aboriginal and Safety & Health Community Outreach

Biodiversity Energy Use & Conservation GHG Emissions

The Mining Association of Canada (MAC) uses a letter grade system to indicate performance within the six indicators. The letter grade systems ranges from C (no systems in place) to AAA (excellence and leadership is demonstrated and validated by external, independent assessments.) The more the outside circle is filled, the better the performance.

2014/2015 Annual Update on Vale in Manitoba 7 8 2014/2015 Annual Update on Vale in Manitoba 9 Tailings Management Working with the ecosystem to protect the environment

A beaver dam will be integrated into without having to install electronics. This calculation is the overall strategy to protect the important to determine how well Dam B is performing and to provide an early detection system if conditions change. environment at the southeast arm of the Tailings Management Area. Downstream from Dam B is a beaver dam. The pond between Dam B and the beaver dam has been named Vale is in the midst of a three-year capital project to Bucky’s Pond (after its resident beaver). Prior to extend Dam B and create other related structures construction, Bucky’s Pond was fished out, and the fish that will help increase the capacity of the Tailings relocated downstream. Bucky’s Dam will stay in place as Management Area (TMA). a symbolic aspect of the overall containment strategy.

Dam B, located at the southeast arm of the TMA, sits on During construction, mill operations will continue to bedrock and is 390 feet (120 meters) wide at its base. The deposit tailings to the TMA. This deposition is constantly slope of the sides of the dam is currently at a 2:1 ratio, monitored and managed to ensure Vale protects which is the industry standard. Besides extending the downstream water courses and maintains compliance length of Dam B by nearly 800 feet (245 meters), the slope with environmental permitting. “Management of the will be increased to a 3:1 ratio to exceed industry standards. area involves a number of actions,” explained Dennis “This will increase the safety factor of the dam,” said Pilon, Tailings Coordinator. “We move the tailings line Matt Vanderhyden, Senior Specialist — Projects. “We will often to ensure tailings will be submerged. At certain be increasing the level of the water by five feet, which times of the year, we add lime to manage effluent water will increase pressure on the dam. The increased slope quality; the credit goes to our transportation crews for will be more than adequate to handle the pressure.” this aspect. In addition, there is often road maintenance when we battle spring run-off.” Vale is also building a ‘toe dam’. This is basically a channel that provides a measuring point for calculating flow

Standing atop Dam B, one can see ‘Bucky’s Pond’, which was Groundhog in Tailings Management Area. created by a beaver dam. (Matthew Vanderhyden) (Matthew Vanderhyden)

10 The Tailings Management Area (TMA) is a collection and settling area for mine discharge and mill tailings. It comprises some 58 square kilometers. The current mine plan forecasts an Dam B increase in tailings, Extension which requires a plan to increase the capacity of the TMA without increasing the size of its footprint. Work on that plan began in 2011.

Extending Dam B, increasing the slope of its south side and adding a toe dam are part of the three-year capital project to increase the capacity of the Tailings Management Area.

Dam B

Toe Dam

The tailings line is moved Bucky’s Pond often to ensure tailings will be and Dam submerged; here, tailings are barely visible below the surface of the water. (Vale archives)

(Vale archives)

2014/2015 Annual Update on Vale in Manitoba 11 Towards Sustainable Mining Environmental monitoring is part of biodiversity reporting

Vale continues to regularly monitor acceptable levels. Those in the surrounding region can water and air quality at numerous also contact the environmental hotline if they have environmental concerns. sites to ensure operational controls are working optimally. “In 2014, there were 11 hours when the air quality in Thompson was adversely affected due to sulphur Vale regularly collects data on air and water quality dioxide emissions. On these days, an hourly average at a number of sites and for a number of reasons. The concentration of SO2 surpassed the provincial guideline most important reason is to ensure the operations at one or more monitoring stations in the city, despite maintain zero harm to the environment. There is also implementing the VERP actions,” explained Rachelle a responsibility to report to government regulators on Trottier, Environment Coordinator. “In comparison, there specific air emissions and water outflows. And through were 163 hours where VERP actions were effective at the Towards Sustainable Mining (TSM) initiative, there is controlling air quality in the city.” a responsibility to keep the public informed. For water quality testing, water samples are taken at Air quality is monitored at a number of sites within the a number of locations on the plant site, in the Tailings city’s boundaries. Data is collected on sulphur dioxide, Management Area (TMA), and at the discharge point particulate matter, ozone concentration and heavy into the Burntwood River. Several management practices metals. Reports are made regularly to federal and are employed and reported in the TMA. These include provincial governing bodies. Vale continues to operate bathymetric surveys to identify the contours of the the Voluntary Emissions Reduction Program (VERP) bottom of the TMA to help determine where to safely whenever the wind blows the plume from the stack deposit tailings, and the addition of lime to maintain towards the city, helping to reduce sulphur dioxide to effluent water quality at certain times of the year.

Red fox on plant site. (Al Szabo) Winter rabbit near sampling site. (Amanda Jacobs)

12 Family of Canada Geese in Tailings Management Area. (Amanda Jacobs)

Metal Mining Effluent Regulations set limits for nickel concentration that can be discharged into the Burntwood River. The monthly mean nickel concentration limit is 0.50 milligrams per litre (mg/L). The actual discharge from the Tailings Management area in 2014 remained below one-half of the monthly limit. Call 204-778-2888 to report sulphur dioxide in the air or any other environmental concern. Tundra Swans in the Tailings Management Area. (Amanda Jacobs)

2014/2015 Annual Update on Vale in Manitoba 13 Towards Sustainable Mining Conserving biodiversity through all stages of the mining cycle

The Biodiversity Conservation Operations has had on its surrounding environment. Management protocol is an industry Today, this research information is updated and included in the public reporting required by TSM. Vale priority and helps maintain a also participates on the Northeast Woodland Caribou company’s social license to operate. Advisory Committee.

The boreal forest surrounding Vale’s Manitoba Under another TSM protocol is the commitment to Operations has a rich biodiversity — a wide and diverse energy conservation and reduction of greenhouse variety of plant and animal species. By following gases (GHGs). GHG emissions have actually increased the protocols in the Mining Association of Canada’s slightly in Manitoba Operations. This is because we (MAC) Towards Sustainable Mining (TSM) initiative, are mining deeper, which increases fuel consumption Vale monitors and assesses the conditions of this as we transport people, equipment and ore over biodiversity, and takes steps to mitigate any harmful increasing distances. However, our operation’s annual effects of the entire mine cycle — from ore discovery to GHG emissions are still considered lean because we use reclamation of mine sites when mining is complete. renewable hydroelectric energy in our smelter furnaces Even before TSM was initiated, Vale participated in and refinery plating tanks. We also continue to find studies to assess its impact on the Thompson region. An ways to reduce both fossil fuel and hydroelectric energy. environmental study was conducted in the early 1980s In 2014, one of Utilities’ large compressors was replaced to provide baseline information. In 2004, Vale revisited with two smaller, more efficient units. This resulted in the study and sampled water, plants, soils and animals annual energy savings of 1.5 million kilowatt-hours. to determine the level or lack of impact Manitoba

Kit fox near T-3 Mine. (Al Szabo) Lynx in Tailings Management Area. (Al Szabo)

14 Northern Crescent butterfly. (Amanda Jacobs)

Total Tonnes C02 eq

80,000 GHG emissions have increased slightly in 70,000 Manitoba Operations 60,000 due to the need to mine 50,000 deeper. As we mine deeper 40,000 we consume more fuel as we transport people, 30,000 equipment and ore over 20,000 increasing distances. We are 10,000 addressing this trend with 0 more fuel efficient and lower 2008 2009 2010 2011 2012 2013 2014 emission model vehicles in our underground fleet. As reported to Environment Canada’s GHG Reporting Program (GHGRP).

2014/2015 Annual Update on Vale in Manitoba 15 Northern Employment Strategy Investing in our immediate and future workforce

Interested and Showcase. In addition, Vale sponsors Skills Canada potential employees Manitoba events on a provincial level. R.D. Parker student Dylan Roberts won a Silver Award at a can now put a face provincial Skills Competition. His goal is to become a to Vale through Heavy Duty Mechanic at Vale. (His father, Fred Roberts our Northern works at Vale’s T-3 Mine.)

Employment Other partners include Northern Manitoba Sector Coordinator Tara Council, Atoskiwin Training and Employment Centre, Ritchie. Ma-Mow-We-Tak Friendship Centre, University College of the North, Workplace Education Manitoba, Manitoba The Northern Employment Strategy was originally Metis Federation, Manitoba Keewatinowi Okimakinak, launched in 2011 to develop a robust pipeline of Manitoba Heavy Construction Association and School candidates for Vale’s workforce. An important part of that District of Mystery Lake. These partnerships help support strategy is to build partnerships and create awareness of candidates on their pathways to employment and create the employment opportunities available at Vale. awareness about employment opportunities at Vale. Tara Ritchie, Vale’s Northern Employment Coordinator, The goal is to continue to hire 100% of Vale’s process strengthens that strategy by attending career fairs, operators from the north, and to be more successful in participating in employment events throughout the north, doing the same for trades qualified and professional networking with employment partners and promoting careers. The Process Operator in Training (POinT) Manitoba Operations’ new scholarship program. program continues to be successful. To date, of the The scholarship program promotes mining industry 66 who completed POinT training, more than 75% related fields of study and supports northern students continue to work with Vale. Since 2012, more than who are interested in pursuing careers in mining. To 200 employees from approximately a dozen northern be eligible, students must reside in northern Manitoba Manitoba communities have joined Vale’s workforce as a and be enrolled or accepted into a recognized post- result of the Northern Employment Strategy. secondary institution. For details visit https://juno.aucc. To learn more about a future with Vale, ca/app/vale_manitoba.html. go to valejobs.ca A long-standing partnership with Skills Canada To learn more about Vale’s Northern Manitoba has introduced hundreds of northern Employment Strategy, contact Manitoba students to trades and technology careers through events such as the Northern Young Women’s Tara Ritchie at 204-778-2094, or Conference and Skilled Trades and Technology [email protected]

16 The most recent graduates of the Process Operator in Training (POinT) program are among the more than 200 people from northern Manitoba who have been hired since 2012 as part of the Northern Employment Strategy. (Vale archives)

Vale sponsors and supports programs, presentations and events for K-12 students throughout the north in order to encourage young people to consider a career in the mining industry. These include Grade 8 tours, Kidnetic Energy Camp, Spaghetti Bridge Contest and Earth Rangers. In addition, Vale continues to inspire youth in secondary grades through the Mineral Science Program at R. D. Parker Collegiate in Thompson. Vale strives to make career fairs a hands-on Vale is committed to employee development. experience with the drill simulator. There are currently 25 employees enrolled in (Chris Sundevic) the apprenticeship program. Vale also offers leadership training.

2014/2015 Annual Update on Vale in Manitoba 17 Stakeholders play an active role in creating long-term sustainability

A recent meeting of the Community Liaison Committee was comprised of a tour to the Tailings Management Area to see first-hand some of the work being done to increase its capacity without increasing its footprint. (Chris Sundevic)

For more than a decade, the Community Liaison as from various government, education and health Committee (CLC) has participated in discussions with Vale organizations. about environmental monitoring, careers and training In addition to presentations, round table discussions within Vale, economic development and other matters and question periods, the CLC has also toured a that contribute to a sustainable mining operation. number of Vale sites, including everything from the The CLC, which is just one avenue through which Vale Tailings Management Area to the decommissioned seeks stakeholder inclusion, includes members from Soab mine sites. surrounding communities and First Nations, as well

For more information or comment on any topic in this report, contact Ryan Land at [email protected] or phone 204-778-2326.

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