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The Americas Iron Ore Conference is one of the most respected annual gatherings for North and South American iron ore markets and the agenda covers: iron ore industry and market developments; new project developments and expansions in North and South America; overview of steel demand; iron ore spot market price; infrastructure and transport challenges and investment opportunities. For more information please visit: http://bit.ly/1vlo1DD
Citation preview
Renato Matos – Market Intelligence Manager
7th Americas Iron Ore Event
Projects and Sustainability
Rio de Janeiro, Brazil | November 10th , 2014
“This presentation may include declarations about Vale's expectations regarding
future events or results. All declarations based upon future expectations, rather
than historical facts, are subject to various risks and uncertainties. Vale cannot
guarantee that such declarations will prove to be correct. These risks and
uncertainties include factors related to the following: (a) the countries where Vale
operates, mainly Brazil and Canada; (b) the global economy; (c) capital markets; (d)
the mining and metals businesses and their dependence upon global industrial
production, which is cyclical by nature; and (e) the high degree of global
competition in the markets in which Vale operates. To obtain further information on
factors that may give rise to results different from those forecast by Vale, please
consult the reports filed with the Brazilian Comissão de Valores Mobiliários (CVM),
the French Autorité des Marchés Financiers (AMF), and with the U.S. Securities and
Exchange Commission (SEC), including Vale’s most recent Annual Report on Form
20F and its reports on Form 6K.”
Disclaimer
Iron ore benchmark
Loose environmental
regulations
Western world leading
growth
Iron ore spot, platform
transactions, liquidity
Environmental Issues
Shift to Asia
Rapid demand growth not
easily met by supply
Demand rises but supply
keeps up
OLD NEW
Paradigm shift
Stable iron ore quality Quality deterioration
A new paradigm in the iron ore industry
Vessels
Floating stations
(Philippines)
DC Malaysia
DC Oman
Mines
Railways
Ports
Vessels
Mines Railways Ports Vessels DCs Clients
Vale’s iron ore supply chain
Vale has heavily invested in each part of the supply chain focusing on making high quality ores available to clients worldwide
Reserves (t)1
Vale’s growth is sustained by a robust reserve base
Note:
(1) figures in billion metric tonnes (Bi t).
(2) Samarco (2.95 Bt) reserves not included. Vale's equity interest in Samarco‟s mines is 50%.
Including non-operating mines: S11D and Apolo.
Source: Vale‟s statement of reserves.
Vale 2 billion tonnes increase over 2013 reserves statement!
Grade (%Fe)
Northern System
Southeastern System
Southern System
5.25 Bi
5.60 Bi
Mid-Western System
0.03 Bi
7.18 Bi 67%
47%
62%
44%
Vale’s reserves 18.06 Bi 2
54%
Vale is delivering its projects! Investments of US$ 38 billion bring additional volume of high grade
ore to the market with improved logistics
Project Progress Indicators
(as of 2Q14)
Capacity
(Mtpy)
Estimated
start-up
Capex
(US$
bi)
Statu
s
Carajás Serra Sul S11D 90 2H16 8.1
CLN S11D - logistics upgrade
(railway and port) 230 (801) 1H14-2H18 11.5
Serra Leste 6 2H14 0.4
Concentration Plant at Vargem
Grande Itabiritos Mine 10 2H14 1.9
Concentration Plant II at
Conceição Itabiritos Mine 19 (01) 1H15 1.2
Concentration Plant at Cauê
Mine 24 (41) 2H15 1.5
Teluk Rubiah DC, Malaysia
(port, stockyard and blending) 30 2H14 1.3
“Oman” and “Tubarão 8”
Pelletizing Plants 7.5 Complete 2.6
VLOC fleet, Floating transfer
stations and Tubarão Port
upgrade
- Complete 4.2(2)
(1) Net additional capacity
(2) VLOC fleet Capex not included in the US$ 38 billion total. Equivalent Shipowners capex considered for chartered
tonnage equivalent
306 mtpy
453 mtpy
2013 2018e
Vale’s iron ore production
50% growth in 5 years 52%
18%
87%
63%
100%
Status
98%
99%
100%
91%
Earthworks
S11D - the largest project in the iron ore industry
Production capacity: 90 Mtpy
Production split: 100% high grade sinter feed
Start-up: 2H2016
Stripping ratio: 0.27
Physical progress: 52% (June/14)
Product yield: 100%
A green approach
A project of 90 Mtpy capacity carefully planned to achieve operational excellence.
• „truckless‟ mining operation
• dry ore processing
• no tailing dams
• lower emissions
• water saving and forest preservation
Conveyor belt civil works
Secondary Crushing – Foundation and Structure Earthworks
General view of the yards
S11D – Aug’14 Update
S11D – the experience of 30 years brought together
The adoption of a truckless system to transport iron ore to the
beneficiation plant:
• Truckless 100 off-road trucks not more necessary
• Reduction of the quantity of wastes (used tires, filters and
lubricants)
Truckless simulation.
CLN S11D - Logistics to support S11D
Expansion of Northern System existing logistics
Pier IV at Ponta da Madeira
(PDM)
• Export berth (Pier IV North)
• Ship-loader (16 kt/h)
• 2 car-dumpers
EFC railway
• A 101-km rail spur
• Double-track railway (572 km)
• 4 stockyards
In short: Northern System‟s logistics @ 230 Mtpy
North berth
South berth
Itabiritos – 4 projects to enhance quality in Minas Gerais
Conceição Itabiritos
New beneficiation plant to process compact itabirites.
Start-up from October 2013.
Conceição Itabiritos II
Refurbishment of existing Conceição plant (new process flow) to process
compact itabirites.
Cauê Itabiritos
Refurbishment of existing Cauê plant (new process flow) to process compact
itabirites.
Vargem Grande Itabiritos
New beneficiation plant to process itabirites, stockyard expansion and long
distance conveyor belt.
All projects combined will add capacity of 65Mty to beneficiate itabirites mostly into
pellet feed. Projects completion started in 2H13 and will be fully completed until 2015.
Projects delivered in 3Q14
Bringing our mines closer to our customers
35 days
BRAZIL
10 days
MALAYSIA DC
Distribution Centre Malaysia
MAIN FIGURES
First export vessel arrives at Teluk Rubiah Maritime
Terminal
The first capesize loaded with 176 Kt (Ago/14) as part of the commissioning process.
Import system unloads vessels with DWT of up to 400,000 The first export vessel, MV Ore Pantanal
VLOC ships extend improved sustainability through
distribution
Competitive freight rates
Economy of scale
Lower power consumption
Alternative fuels such as LNG (reduce CO2 emissions by up to 20%)
Green Seal Vale‟s VLOC was awarded with the Nor-Shipping Clean Ship Award, in
Norway and RINA Award Ship Significant, of the Royal Institution of
Naval Architects
Lower CO2 emissions Emit 35% less when compared to a traditional
commercial ship of iron ore
Lower environment impact
In a single trip, carries an increased amount of cargo, reducing the environmental impact
A new generation of ships to be built with Chineses partners, like
COSCO, will further increase such advantages
Videos
• S11D Project
• Sustainability