The rupture of the tailings dam at Córrego do Feijão in Brumadinho, Minas Gerais State, led Vale to review its governance, health and safety management, operational excellence management, including taillings, operational and business risk assessment, remediation processes as well as its Human Rights governance and management, among others.

Vale is determined to fully repair and compensate for the Human Rights impacts and damage caused by the Brumadinho tragedy. By the end of 2Q21, Vale has been intensely engaging with affected people, communities, and other stakeholders and has allocated over US$ 3.5 billion to pay for compensation to impacted people, infrastructure works and environmental and socioeconomic reparation actions. In February 2021, Vale entered into a BRL 37.7 billion Global Agreement, which includes reparation and compensatory projects, with the State of Minas Gerais, the Public Defender’s Office of the State of Minas Gerais and the Federal and State of Minas Gerais Public Ministries. This Agreement brings greater transparency, legitimacy and legal certainty to those involved. Vale will remain committed to individual indemnity agreements, which already reached 10,500 people by 2Q21.

1. Improvements in Governance towards Safety and Operational Excellence

In the aftermath of the Brumadinho dam rupture, Vale’s leadership carried out a series of measures to further strengthen the risk management governance. In 2020, the company’s governance was further refined to ensure a conservative approach on risk management:

• New Risk Management Policy has been defined and approved by the Board, establishing, among other measures, five Executive Risk Committees.
• Installation of the Statutory Audit Committee, in compliance with the recommendations of regulatory bodies. Creation of the Compliance Office overseeing corporate integrity and ensuring compliance with laws, regulations, policies, and procedures.
• The Compliance and Risk Committee evolved into the Operational Excellence and Risk Committee, strengthening its competence to assess corporate risk management, absorbing the duties associated with monitoring operational risks, especially geotechnical ones. The attributions related to compliance were transferred to the Statutory Audit Committee.

2. Improved Risk Management framework

Vale has improved its integrated Risk Management Governance flow which represents how periodic reviews are performed to ensure alignment between strategic decisions, performance, definition and monitoring of risk tolerance limits approved by the Company's Board of Directors, upon recommendation of the Executive Board.

3. Upstream Dam Decharacterization Program

One of the main initiatives to reduce the company's risk level is the decharacterization¹ of all of our 30 upstream² geotechnical structures in Brazil, including dams, dikes and drained piles - Vale’s Upstream Dam Decharacterization Program. Out of those 30, Vale completed the decharacterization of 6 upstream structures and by the end of 2021, the decharacterization of a dyke and the reinforcement of another dyke are planned.

The decharacterization process is important for the long-term risk reduction of the upstream tailings facilities. Works have been conducted with a precautionary approach, and the program’s completion is expected to occur in 2029. In that sense, downstream zones of the critical dams have been evacuated and three downstream containment structures (ECJ) to contain the tailings in a hypothetical scenario of dam rupture have been built. Further information on our Upstream Dam Decharacterization Program is available here.

¹ ‘‘Decharacterization’’ means functionally reintegrating the structure and its contents into the environment, so that the structure no longer serves its primary purpose of acting as a tailings containment.

² The upstream raising method is the same method of construction as the Brumadinho dam.

4. Tailings Dam Safety Management

Vale is focused on the evolution of its Tailings & Dams Management System ("TDMS") and has been closely monitoring its active and inactive dams. Vale’s Board of Directors approved, in October 2020, a new Policy for Dam Safety and Geotechnical Mining Structure. Among other guidelines, the policy enforces that all components of Vale’s TDMS are designed with continuous improvement elements, using and applying the best available technology and international best practices, including the International Council on Mining and Metals (ICMM) and the Global Industry Standard on Tailings Management ("GISTM") – an effort to improve safety through all phases of the tailings storage facilities lifecycle. All tailings facilities with “Extreme” or “Very high” potential consequences must be in conformance with the GISTM by August 2023. In addition, all other tailings facilities operated by Vale not in a state of safe closure will be in conformance with the GISTM by August 2025.

An important precautionary measure is the reduction of reliance on tailings dams in our productive processes. We have been developing alternatives to tailings dams and, with the continuous investments in dry staking tailings disposal.

5. Cultural Transformation

In order to turn Vale into one of the safest and most reliable mining companies in the world and to promote the full reparation of Brumadinho, Vale is committed to transforming its culture.

The main behaviors for the organization were defined, based on the Company’s core values: (i) obsession with safety and risk management; (ii) open and transparent dialogue; (iii) empowerment with accountability; (iv) responsibility for the whole; (v) active listening and engagement with society. All this having People in the center.

In a process of voluntary and creative co-construction, 40 leaders rescued our history and essence to create Vale’s purpose: “We exist to improve life and transform the future. Together”. The purpose drives actions and intentions and is supported by four pillars: (i) serving society, sharing value for all; (ii) doing together; (iii) using Vale’s mobilizing capacity to do something extraordinary; and (iv) transforming the future, taking care of the present.

Vale and the UN Global Compact

As described above, we are adopting and developing best practices to improve our business, with great care, while transforming our culture and initiating and accelerating critical ESG initiatives. And part of this agenda is Vale’s commitment to the UN Global Compact. The 10 Principles are a key guidance and compliance mechanism for the company and Vale remains committed to them, despite having left the initiative following the rupture of Dam I at the Córrego do Feijão mine, in Brumadinho. The company has been working diligently and is fully committed with the continuous implementation of all Global Compact principles.