Apr 15, 2014

• Vale will invest in a new factory, railroad and social projects. It is a positive project for the Brazilian balance of trade, and it should generate 30,000 direct jobs

The Brazilian Development Bank (BNDES) approved R$ 62 billion in financing for Vale. Resources are earmarked for the company’s R$ 37.8 billion investment in the Carajás Complex (PA) and the North Logistics Training program.

The project includes the construction of an iron ore mining and enhancement plant, with a 90-million ton capacity per year, and a railroad connecting the cities of Canãa dos Carajás and Parauapebas (PA). Efforts will also expand the transport capacity of the Carajás Railroad to 230 million tons per year.

The Bank will also support social investments that exceed those made obligatory by the socio-environmental conditions required by law. The projects aim to contribute to developing the region.

Vale’s program – to expand iron ore production and its distribution network, with an integrated mine-plant-railroad-port operation – is scheduled to begin in 2016. The BNDES’ support for the project will help generate 30,000 direct jobs at the height of construction and expressively increase Brazilian exports of ore, having a positive impact on Brazil’s balance of trade.

Vale will initiate exploration of the Serra Sul reserves, one of the three regions that comprise the North Mining System in Carajás, together with the Serra Norte and Serra Sul reserves. The North System, which contains one of the largest iron ore deposits in the world, in 2013, produced 115 million tons of high-grade iron ore, with a high percentage of iron and low concentration of impurities.

Besides the BNDES’ financing, the project has R$ 1 billion in infrastructural debentures that Vale issued in January 2014, to complement the sources of resources when implementing the railroad.

Innovation – For operations in the mine, the Truckless system will be used. It consists of eliminating the use of trucks and replacing them with integrated conveyor belt systems to transport ore. The initiative guarantees a more sustainable process, because it diminishes waste (tires, filters, lubricants), approximately 77% of diesel consumption, while enables the installation of an enhancement plant in a pasture region. That is, outside the forest zone.

In the plant, the innovative component is in the dry enhancement process, which will use natural humidity to sift the material, eliminating the need for a tailing dam, which are common to conventional projects. This technology will reduce water consumption by 93% in relation to the humid enhancement process, as well as energy consumption.

Logistics – The project financed by BNDES includes the construction of a 101km railroad and installing extra railway lines along 42 sections of the Carajás Railroad.

Constructing the railways and expanding the capacity of the existing Carajás Railroad are part of the project to expand the North Logistic Complex’s transport capacity – which also comprises the port known as Ponta da Madeira, in São Luís (MA) – from 150 million tons per year to 230 million tons per year. After enhancement, ore is transported along the Carajás Railroad to Ponta da Madeira’s port.

Social Investments – The BNDES will finance R$ 30.7 million for Vale’s voluntary investments in social projects (those not required by environmental legislation), focusing on health and education, as well as generating jobs and revenue for the local populace.

The initiative is aiming to bring about positive social impacts on the local populace, given the number of investments and the generation of jobs involved. It will entail training the workforce and local suppliers, as well as supporting independent social and economic activities in the mining area, aimed at diversifying the economy in the region.