Vale SAPresented by:

Harpreet Singh

Johannes Tannert

DisclaimerThis is to certify that the opinions expressed in this presentations are

essentially those of the presenters and do not represent the opinions expressed by FMA. The charts and data collected are from reliable sources and no agreement was breached while presenting this data.

This presentation is intended to analyze VALE SA for investment purposes.

Summary/Agenda

Introduction

Overview – Mining Sector

Company Overview

Outlook – Mining Sector

Technical Analysis

Recommendation

Sector Consideration

High risks worldwide

Sectors where companies are not concentrated on one region

High future demand

Considered Sectors:

Consumer Goods

Pharamceuticals

Mining

FMA Portfolio

FMA portfolioInformation Technology;

9.22%

Consumer Discretionary;

7.45%Consumer Staples; 7.97%

Financials; 20.66%

Energy; 7.05%Utilities; 12.42%

Industrials; 4.99%

Materials; 7.45%

Healthcare; 15.72%

Telecom Services;

1.39%

Speciality; 0.81%Commodities; 4.88%

Mining Sector

Largest segments: Iron, Aluminium and Coal ; Dependent on steel

Cyclical, highly competitive

Biggest Producers: Australia, Brazil

Biggest Demand: China, India

Market can be divided into Major and Junior Companies

Junior Companies mainly explore new areas, very risky

Market controlled by a few companies; biggest BHP Billiton, Vale, Rio Tinto

Market Cap for top mining companies

Development of Commodity Prices

9

Overview of the companyName: VALE

Market Capitalization: US $ 120 bn

Sector: Mining Energy Logistics

Steelmaking

Listed on: NYSE, BM&F BOVESPA, Euronext Paris, The Stock Exchange of Hong Kong Limited

Second largest mining company in the world

Leader in Total Shareholder Return (38.1% for 2001-2010)

10

Vale sector distribution

Areas in which VALE is involved in mining

source: vale.com.br

11

Vale global Presence

source: vale.com.br

12

Sustainability

Introduced programs like Vale Carbon Program to control carbon foot print.

Big investment in Bio-diversity

Botanical Gardens

Natural diversity parks

Heritage Reserves

Started Environmental Management System in 2010 aimed at waste management and pollution reduction

The Vale Fund for Sustainable Development works in partnership with public sector companies to support projects aimed at a sustainable development

Vale foundation: Works for improving the Economic, Environmental and Social conditions

Vale joint ventures, subsidiaries and affiliates

14

Financials

source: vale.com.br

15

Segmented Earnings

source: vale.com.br

16

Vale operational revenue by region

  North

Am

erica

      C

anada

  South

Am

erica

      O

thers

      C

hina

      S

outh K

orea

      O

thers

      G

ermany

      F

rance

      It

aly

  Rest

of the W

orld0

2000

4000

6000

8000

10000

12000

14000

16000

18000

1Q112Q113Q11In

bil

lion

s

17

Dividends

source: vale.com.br

18

Vale- Key ratiosRatio Vale Industry

P/E 4.60 9.90

EPS $ 5.30 n.a.

Current Ratio 2.15 1.70

Quick ratio 1.50 1.20

Dividend Yield 0.20% , this year: 9.99% 3.1%

Return on Assets 18.2% 11.9%

Return on Equity 33.73% n.a.

Profit Margin 40% 26%

Debt/Equity ratio 40% 34%

Return on Investment 23.50 17.20

Price/Operating Profit 3.48 7.45

source: stock-analysis-co.netdailyfinance.com

19

Stock Price History

source: ycharts.com

Investments- 2012

Vale production estimates: 2012

By Mineral Production in ‘000 metric tons

Iron-ore 312,000

Pellets 50,000

Coal 16,600

Nickel 300

Copper 340

Potash 650

Phosphate Rock 8,000

Vale in newsVale voted as one of the 6 ‘must-own-Brazilian’ stocks for the next decade.

Source: seekingalpha.com

Vale listed as one of the 7 stocks with yields as high as 16%.

Source: seekingalpha.com

Vale plans to offer notes due 2022 through its subsidiary- Vale Overseas Limited and the proceeds are to go towards corporate business.

Source: Vale press release

Vale sees little effect to iron ore market from Brazil rains

Source: Vale newsroom

Economic Situation: GDP growth

US Euro Area China India Brazil

-6

-4

-2

0

2

4

6

8

10

12

2009201020112012

Source: IMF

Productivity Opportunities until 2030

Source: McKinsey & Company

TSR – Mining Sector

TSR – Mining Sector

Source: PwC

Outlook: Potential Shortages

Source: McKinsey & Company

Outlook: Steel Demand

Source: McKinsey & Company

World Steel Production (growth rate)

Source: Short Range Outlook by World Steel Association

2011 20120.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

WorldChinaIndiaUSC&S AmericaEurope

Iron ore prices

End of 2011

2012 2013 2014 2015$0

$50

$100

$150

$200Price per mt

Price per mt

Source: Goldman Sachs & Partners Australia Pty Ltd

• Iron ore shortage 2012 and 2013• Over-Supply from 2014 on

Nickel Supply/Demand

Source: Macquarie Research, September 2011

Nickel imports by China

• Nickel prices fell from over $29,000 to under $17,000

NPI-Nickel Outlook

Exploring Expenditures

Source: McKinsey & Company

Technical Analysis

52 week low:

$24.26

52 week high:

$37.25

Current:

$24.46

Risk Assesment

Opportunities

Strong Emerging Markets

High demand of Iron, Steel and Nickel

Joint Ventures and Investments only in 2012 around $13 Billion, among others, in Brasil, China and Africa

High Dividends

Risks

Price drop in 2014

Dependence on Economic Situation

Exploring Expenses

Recommendation: Buy

THANK YOU