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Result 1S08

Result 1S08. Rio de Janeiro – August 7, 2008. Excellent operational performance. Production increase in 17 of the 18 products at Vale Production record of 8 products. Iron ore 152,538 Pellets 21,511 Nickel (1,000 tons) 130 Copper (1,000 tons) 150 Cobalt (tons) 1,286 Bauxite 4,885

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Result 1S08

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  1. Result 1S08 Rio de Janeiro – August 7, 2008

  2. Excellent operational performance Production increase in 17 of the 18 products at Vale Production record of 8 products • Iron ore 152,538 • Pellets 21,511 • Nickel (1,000 tons) 130 • Copper (1,000 tons) 150 • Cobalt (tons) 1,286 • Bauxite 4,885 • Metallurgical coal 1,418 • Thermal coal (1,000 tons) 538 Million tons

  3. Excellent sales performanceIncrease in sales of all products thousands metric tons 1S08 1S07 D% Iron ore 132.473 117.873 12,4% Pellets 20.837 19.756 5,5% Manganese 447 302 48,0% Ferroalloys 248 235 5,5% Copper 136 135 1,1% Cobalt 1,4 1,2 20,8% Potassium 339 323 5,0% Kaolin 600 594 1,0% Coal 1.915 788 143,0% Alumina 1.694 1.466 15,6% Precious metals¹,2 1.124 1.107 1,5% PGM¹,3 188 174 8,0% Record Record Record ¹ Ounces troy - 2 Gold and Silver - 3 Metals from platen group

  4. + 11,3% Vale’s sales of iron ore and pellets millions of metric tons

  5. Excellent financial performance In US$ million 1S07 1S08Δ% Gross revenues 16.579 18.945 14,3 Operational profit 7.081 8.150 15,1 Net profit 6.312 7.029 11,4 EBITDA 8.241 9.947 20,7 Record Record Record Record

  6. Revenues performanceUS GAAP x BR GAAP • Vale is a global company and most part of its revenues is denominated in US dollars. • In 1S07, each US$ 1,000 of revenues generated R$ 2,045.20. In 1S08, the same US$ 1,000 of revenues produced less reais, R$ 1,696.60, that is, 17% less. • Valuation of the real vs the dollar – the average exchange rate R$/US$ has moved from R$ 2,0452 in 1S07 to R$ 1,6966 in 1S08 – this explains why revenues in reais have fallen.

  7. Revenues performanceUS GAAP x BR GAAP • Only valuation of the real against the dollar would lead to reduction of our revenues in reais in R$ 5,629 billion, comparing the 1S08 against the 1S07. • In North-American accounting, the figures, free from the exchange effect, show an increase of 14.3% in the semester’s revenues.

  8. Profit performanceUS GAAP x BR GAAP • In the Brazilian accounting (BR GAAP), effect of the exchange variation over the assets amount of a Brazilian company abroad is accounted as expense (or revenue), depending on the valuation (or depreciation) of the real. • If Vale has a building in Canada amounting to US$ 1 million on 06/30/07, its amount in reais on such date was R$ 1,926 million (US$ 1 million x 1,926 R$/US$). • Since the real has been appreciated, with the exchange rate moving from R$ 1,9262/US$ on 06/30/07 to R$ 1,5919/US$ on 06/30/08, the same building, with the same amount of US$ 1 million, now has a lower amount in reais, R$ 1,591 million (US$ 1 million x 1,5919 R$/US$). ¹ Exchange rate R$/US$ on 06/30/07 equal to R$ 1,9262

  9. Profit performanceUS GAAP x BR GAAP • Thus, in accordance with BR GAAP, variation of amount for the building in reais, called “exchange variation of abroad investment”, of R$ 335 millions (R$ 1,926 million – R$ 1,551 million), is subtracted from Vale’s profit as it was an expense. • In fact nothing has changed, the building is the same, it continues to amount to US$ 1 million, no money has been withdrawn from Vale’s cash. • It is only an accounting rule.

  10. Reconciling Vale’s profit: US GAAP vs. BR GAAP • Net profit US GAAP 7.030 • (-) Exchange variation of abroad investments 2.231 • (-) Amortization of goodwill in acquisitions 367 • (-) Other adjustments 45 • Net profit BR GAAP 4.387 US$ millions 1S08

  11. Effect of the new Brazilian corporate law and CVM resolution no. 534 • Convergence for international accounting rules • Effect of the “exchange variation over abroad investments” shall not affect the profit anymore.

  12. Best risk rating • Vale gained an upgrade on its long-term corporate credit rating for BBB+, by agency Standard & Poor’s • The grade resulted from a successful capital raising of US$ 12.2 billion through a share offering • Rating upgrade reflects the more sound capital structure of the company, stated S&P

  13. Corporate social responsibility is astrategic commitment Investments in 1S08: US$ 382,3 millions Investments US$ million

  14. Job Creation * Vale generated over 24,000 jobs in a year * In addition to the direct jobs, approximately 5,000 jobs are generated in affiliate companies which Vale has a shareholder interest.

  15. + 43,2 % Investment 1S08 US$ million (*) (*) Excludes acquisitions

  16. Investing and growing: six new worldwide projects concluded in 1S08 • Iron ore Fazendão Brazil 15.8 Mtpa • Lumps Samarco III Brazil 7.6 Mtpa • Lumps Zuhai China 1.2 Mtpa • Nickel Dalian China 35,000 Mtpa • Bauxite Paragominas II Brazil 4.5 Mtpa • Alumina Alunorte 6 & 7 Brazil 1.9 Mtpa Investments 1S08 US$ 4.0 billion US$ 2.7 billion US$ 915 million US$ 440 million¹ 1 Mineral exploration US$ 165 million, feasibility studies US$ 251 million, technology US$ 24 million

  17. Train 330 wagons • In order to maximize efficiency in logistic operations, Vale now uses trains with 330 wagons, the biggest trains in the world. • 23 new locomotives were bought, at US$ 46 million, to conduct the most long trains; • Such compositions are being operated in the Estrada de Ferro Carajás (EFC). • Greater operating flexibility, greater mobility, greater transportation capacity The train with 330 wagons is 3,5 km long, which is equal two times Av. Rio Branco - RJ

  18. Vale sets transportation line dedicated to route Brazil-Asia • Construction of 12 vessels VLOC, with 400,000 tons each (dwt), the biggest in the world • Investment of US$ 1.6 billion • Deliveries: beginning of 2011 until the end of 2012 • Total capacity of 30.2 million ton/year, equals to 30% of exports to China • Vale now has a fleet of 18 VLOC and 3 capesize

  19. Reference US$ 1 billion Confidence in the future encourages us to invest US$ 59 billion until 2012 Projects to be delivered from 2008 to 2012 Totten Greenfield Litoranea Karebbe Setentrional CSV Bayovar Equatorial Estreito Vermelho Moatize UHC Papomono Oman Serra Leste Maquiné-Baú Itabiritos Tubarão VIII CSA Salobo I Serra Sul Goro NAR Onça Puma Barcarena 2008 2009 2010 2011 2012 Voisey’s Bay Carajás 130 Mtpa Corredor Sul/Sudeste Paragominas III Carborough Downs Brownfield

  20. Vale will keep on track of rapid growth and generating value 1 ¹ index comprises production of all Vale products, basis 2003 = 100.

  21. 2007 2008E 2012E Implementation of the projects will contribute for significant growth of our production millions of metric tons 1,000 metric tons Lumps¹ CAGR 08-12=10,5% Iron ore CAGR 08-12=7,4% Nickel CAGR 08-12=15,4% 2 Alumina CAGR 08-12=13,8% Coal CAGR 08-12=46,8% Copper CAGR 08-12=15,8% ¹ Includes production of the JVs (Samarco, Hispanobras, Itabrasco). ² Meeting capacity of 450 Mtpa by the end of the year

  22. Result 1S08 Rio de Janeiro – August 07, 2008 www.vale.com/saladeimprensa

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