Vale delivered a strong operational performance in 2Q14, with iron ore production reaching 79.4 MT, the best performance for a Q2 ever, with Carajas production reaching 29.3 MT due to the successful ramp up of Plant.

Despite lower iron ore prices, Vale comfortably paid dividends in the amount of USD 2.1 billion, while maintaining its total debt level at USD 30.257 billion and preserving a similar cash position to the one in Q1 2014 in the amount of USD 7.067 billion.

In 2Q14 Vale posted an adjusted EBITDA of USD 4.104 billion, including an improved contribution of USD 609 million from the base metals business, on the back of improved EBITDA at Salobo (USD 87 million), Onça Puma (USD 106 million) and PT Vale Indonesia (USD 107 million), and despite the effects of major planned maintenance in our Sudbury operations. Gross sales revenues were USD 10.079 billion, an increase of 4.1% vs. Q1 2014, despite the lower prices of iron ore.

In H1 2014, we managed to reduce costs and expenses by USD 249 million vs. H1 2013, with savings of USD 31 million in Q2 2014 vs. Q2 2013, despite the maintenance stoppage in Sudbury and the additional costs associated with the interruption of production in VNC. Comparing 1H14 with 1H13, SG&A decreased by USD 144 million (25.3%), above our 10% reduction target for the year. R&D decreased by USD 22 million (6.7%) and pre operating and stoppage expenses decreased by USD 282 million (39.9%), still short of our 50% savings target.

In the H1 of 2014, Vale's capital expenditures totaled USD 5.056 billion, representing a decrease of USD 2.105 billion when compared to the USD 7.161 billion spent in the H1 of 2013. In the semester, sustaining capex amounted to USD 1.658 billion, showing a decrease of about 21% when compared to H1 2013.

Net income totaled USD 1.428 billion against USD 2.515 billion in the previous quarter, reflecting the effects of impairment on assets related to Simandou and the Integra Coal mine. Discussions with the Government of Guinea are advancing towards the recognition of and some sort of compensation for Vale´s investments made in the country. We remain diligent in developing alternatives that may enable us to retrieve value from those assets in the future.

We achieved solid results in ferrous minerals albeit at lower prices;

1. Adjusted EBITDA for iron ore in Q2 2014 of USD 2.679 billion, in line with Q1 2014, despite the lower iron ore prices.

2. Iron ore production of 79.4 MT in 2Q14, mainly due to the ramp ups of Plant 2 (Additional 40Mt) and Conceiçao Itabiritos.

3. Iron ore and pellet sales volumes of 76.9 Mt in Q2 2014, 13.4% higher than in Q1 2014. Average realized price for iron ore fines (ex-ROM[2]) of USD 84.6 per WMT vs. the average Platt's IODEX 62% of USD 102.6 per DMT (CFR China) in 2Q14, indicating a softer drop in Vale´s realized prices than the drop in the IODEX reference price.

4. Over 2 MT of inventory stockpiled in the Malaysia distribution center to blend different quality ores, facilitate logistics and generate stronger cash flow in the near future.

Achieving consistent cash flows in base metals;

1. Adjusted EBITDA reached USD 609 million in Q2 2014 despite major planned maintenance work in Sudbury, accumulating USD 1.158 billion in H1 2014.

2. During this year's scheduled maintenance at some surface facilities, the Sudbury mines which are the bottleneck in the Sudbury system did not stop producing, building up inventory of ore and concentrates to be smelted and refined in the second half of the year. As a result, a stronger refined nickel output is naturally expected for the H2 2014, compensating the planned lower production from Q2 2014.

3. Salobo I and Onça Puma which are still in ramp up, generated consistent cash flows and contributed with 32% of Vale's base metals EBITDA in Q2 2014.

4. Sales revenues achieved USD 1.889 billion, 9.3% higher than in Q1 2014, due to better sales prices, which more than offset the effect of lower sales volumes, due to the maintenance stoppage in Sudbury and in Clydach.

5. Salobo II was concluded on time and under budget, with total capex of USD 1.220 billion as of the end of the Q2 2014, marking a successful phase of investments in our copper operations. Investments in Salobo I and II totaled USD 3.727 billion, out of a budget of USD 4.214 billion. First production of copper concentrate at Salobo II was achieved on June 5th 2014.

Focusing on long term profitability of coal business;

1. Negative adjusted EBITDA of USD 154 million due to low coal prices and the low utilization of the Moatize asset base as a result of the restricted rail and port capacity, which will only be achieved with the conclusion of the Nacala Corridor.

2. Placement of the Integra Coal mine in care and maintenance, as part of an ongoing turnaround, with the recognition of an impairment loss of USD 274 million in Q2 2014.

3. Total coal output in Q2 2014 of 2.2 MT, 23.8% higher than in Q1 2014, mostly due to the stronger performance of Carborough Downs, after the longwall move in the previous quarter.

4. Capex of USD 150 million incurred in Moatize II in Q2 2014, achieving 66% of physical progress, with the start of the assembly of the steel structure on the primary crusher and conclusion of the civil construction work for the rail loop.

5. Achievement of 77% physical progress at the greenfield sections of the Nacala Corridor Railway (first train expected in Q4 2014), and 68% at the Nacala Port (first shipment expected in Q1 2015).