Vale Q2 Earnings Call Highlights

Vale’s pro forma EBITDA rose 19% year over year to $4.1 billion, supported by higher iron ore, copper and nickel volumes, improved pricing and stronger base-metals results. The company said performance supports its full-year production guidance. Iron ore output reached its highest second-quarter level since 2018, while the Serra Sul +20 project is expected to add 20 million metric tons of capacity. Copper project Bacaba is ahead of schedule, with commissioning now expected in the third quarter of 2027. Vale announced $1.7 billion in dividends and interest payments and authorized a new buyback of up to 100 million shares. Vale said its second-quarter 2026 operating performance supported confidence in meeting annual production guidance, as higher volumes, improved price realization and gains at its base-metals operations lifted pro forma EBITDA 19% year over year to $4.1 billion. The company also announced $1.7 billion in dividends and interest on capital, scheduled for payment in September, and extended its share repurchase program. The board authorized a new buyback program for as many as 100 million shares over 18 months, equivalent to 2.3% of outstanding shares. “We once again delivered solid year-on-year results across all commodities,” Vale said during the call, citing production increases in iron ore, copper and nickel. The company narrowed its copper and nickel production guidance ranges, implying higher midpoints, following continued operating improvements. Iron ore production reached Vale’s highest second-quarter level since 2018, supported by the ramp-up of the Capanema and Vargem Grande projects and record output at the S11D operation. Iron ore sales volumes rose 3% from a year earlier. Vale said it began commissioning the second long-distance conveyor belt at S11D in July as part of the Serra Sul +20 project. The project, which includes mine and plant expansions, is intended to increase operating flexibility. The company expects to begin commissioning its Compact Crusher project in the fourth quarter, designed to address constraints involving jaspilite ore at Serra Sul. Together, the projects are expected to add 20 million metric tons of capacity at Serra Sul and expand Vale’s high-grade product portfolio. Executive Vice President of Finance and Investor Relations Marcelo Bacci said iron ore C1 cash cost, excluding third-party purchases, rose 9% year over year to $24.10 per ton in the second quarter. All-in costs increased 18% to $61.60 per ton, reflecting the appreciation of the Brazilian real, higher diesel costs and higher freight costs. Vale revised its 2026 iron ore cost outlook to account for external conditions. It now expects C1 cash costs excluding third-party purchases of $22.50 to $23.50 per ton, compared with its prior range of $20 to $21.50 per ton. It raised all-in cost guidance to $58 to $62 per ton from $52 to $56 per ton. Bacci said roughly 70% of the higher C1 outlook is attributable to exchange-rate and diesel effects. Vale’s Brent oil hedging program provided an approximately $100 million benefit during the quarter, or $1.60 per ton, bringing all-in costs to $60 per ton when the hedge’s impact is included. Base Metals generated $1.3 billion in EBITDA, nearly 80% higher than a year earlier.