Edgar Filing: Vale S.A.

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United States
Securities and Exchange Commission

Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the
Securities Exchange Act of 1934

For the month of

February 2011

Vale S.A.

Avenida Graça Aranha, No. 26
20030-900 Rio de Janeiro, RJ, Brazil

(Address of principal executive office)

(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)

(Check One) Form 20-F þ Form 40-F o

(Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1))

(Check One) Yes o No þ

(Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7))

(Check One) Yes o No þ

(Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)

(Check One) Yes o No þ

(If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b). 82-___.)

Vale S.A.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


	Nr.
Report of Independent Registered Public Accounting Firm		3

Management’s Report on Internal Control Over Financial Reporting		4

Consolidated Balance Sheets as of December 31, 2010 and 2009		5

Consolidated Statements of Income for the three-month periods ended December 31, 2010, September 30, 2010 and December 31, 2009 and for the three years then ended December 31, 2010		7

Consolidated Statements of Cash Flows for the three-month periods ended December 31, 2010, September 30, 2010 and December 31, 2009 and for the three years then ended December 31, 2010		8

Consolidated Statements of Changes in Stockholders’ Equity for the three-month periods ended December 31, 2010, September 30, 2010 and December 31, 2009 and for the three years then ended December 31, 2010		9

Consolidated Statements of Comprehensive Income (deficit) for the three-month periods ended December 31, 2010, September 30, 2010 and December 31, 2009 and for the three years then ended December 31, 2010		10

Notes to the Consolidated Financial Statements		11
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

Report of Independent Registered
Public Accounting Firm

To the Board of Directors and Stockholders
Vale S.A.

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income, of comprehensive income, of cash flows and of changes in stockholders’ equity present fairly, in all material respects, the financial position of Vale S.A. and its subsidiaries (the “Company”) at December 31, 2010 and 2009, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2010 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2010, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on internal control over financial reporting. Our responsibility is to express opinions on these financial statements and on the Company’s internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

PricewaterhouseCoopers
Auditores Independentes

Rio de Janeiro, Brazil
February 24, 2011

Management’s Report on Internal Control over Financial Reporting

The management of Vale S.A (Vale) is responsible for establishing and maintaining adequate internal control over financial reporting.

The company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The company’s internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of the effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, and that the degree of compliance with the policies or procedures may deteriorate.

Vale’s management has assessed the effectiveness of the company’s internal control over financial reporting as of December 31, 2010 based on the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission — COSO. Based on such assessment and criteria, Vale’s management has concluded that the company’s internal control over financial reporting was effective as of December 31, 2010.

The effectiveness of the company’s internal control over financial reporting as of December 31, 2010 has been audited by PricewaterhouseCoopers Auditores Independentes, an independent registered public accounting firm, as stated in their report which appears herein.

February 24, 2011

Roger Agnelli
Chief Executive Officer

Guilherme Cavalcanti
Chief Financial Officer

Consolidated Balance Sheets

Expressed in millions of United States dollars


	As of December, 31
	2010		2009

Assets
Current assets
Cash and cash equivalents		7,584		7,293
Short-term investments		1,793		3,747
Accounts receivable
Related parties		435		79
Unrelated parties		7,776		3,041
Loans and advances to related parties		96		107
Inventories		4,298		3,196
Deferred income tax		386		852
Unrealized gains on derivative instruments		52		105
Advances to suppliers		188		498
Recoverable taxes		1,603		1,511
Assets held for sale		6,987		—
Others		593		865

		31,791		21,294


Non-current assets
Property, plant and equipment, net		83,096		67,637
Intangible assets		1,274		1,173
Investments in affiliated companies, joint ventures and others investments		4,497		4,585
Other assets:
Goodwill on acquisition of subsidiaries		3,317		2,313
Loans and advances
Related parties		29		36
Unrelated parties		165		158
Prepaid pension cost		1,962		1,335
Prepaid expenses		222		235
Judicial deposits		1,731		1,143
Recoverable taxes		361		817
Unrealized gains on derivative instruments		301		865
Others		393		688

		8,481		7,590

TOTAL		129,139		102,279

Consolidated Balance Sheets
Expressed in millions of United States dollars
(Except number of shares)


	(Continued)
	As of December, 31
	2010			2009
Liabilities and stockholders’ equity
Current liabilities
Suppliers		3,558			2,309
Payroll and related charges		1,134			864
Minimum annual remuneration attributed to stockholders		4,842			1,464
Current portion of long-term debt		2,823			2,933
Short-term debt		139			30
Loans from related parties		9			19
Provision for income taxes		751			173
Taxes payable and royalties		257			124
Employees postretirement benefits		168			144
Railway sub-concession agreement payable		70			285
Unrealized losses on derivative instruments		35			129
Provisions for asset retirement obligations		75			89
Liabilities associated with assets held for sale		3,152			—
Others		899			618

		17,912			9,181


Non-current liabilities
Employees postretirement benefits		2,442			1,970
Long-term debt		21,591			19,898
Provisions for contingencies (Note 21 (b))		2,043			1,763
Unrealized losses on derivative instruments		61			9
Deferred income tax		8,085			5,755
Provisions for asset retirement obligations		1,293			1,027
Debentures		1,284			752
Others		1,987			1,427

		38,786			32,601


Redeemable noncontrolling interest		712			731

Commitments and contingencies (Note 21)

Stockholders’ equity
Preferred class A stock — 7,200,000,000 no-par-value shares authorized and 2,108,579,618 (2009 — 2,108,579,618) issued		10,370			9,727
Common stock — 3,600,000,000 no-par-value shares authorized and 3,256,724,482 (2009 — 3,256,724,482) issued		16,016			15,262
Treasury stock — 99,649,571 (2009 — 77,581,904) preferred and 45,375,394 (2009 — 74,997,899) common shares		(2,660	)		(1,150	)
Additional paid-in capital		2,188			411
Mandatorily convertible notes — common shares		290			1,578
Mandatorily convertible notes — preferred shares		644			1,225
Other cumulative comprehensive loss		(333	)		(1,808	)
Undistributed retained earnings		42,218			28,508
Unappropriated retained earnings		166			3,182

Total Company stockholders’ equity		68,899			56,935
Noncontrolling interests		2,830			2,831

Total stockholders’ equity		71,729			59,766

TOTAL		129,139			102,279

The accompanying notes are an integral part of these consolidated financial statements.

Consolidated Statements of Income

Expressed in millions of United States dollars
(Except per share amounts)


	Three-month period ended (unaudited)									Year ended as of December, 31
	December			September			December
	31, 2010			30, 2010			31, 2009			2010			2009			2008
Operating revenues, net of discounts, returns and allowances
Sales of ores and metals		13,021			12,350			5,257			39,422			19,502			32,484
Aluminum products		691			609			611			2,554			2,050			3,042
Revenues from logistic services		334			408			307			1,465			1,104			1,607
Fertilizer products		768			802			109			1,845			413			295
Others		393			327			257			1,195			870			1,081

		15,207			14,496			6,541			46,481			23,939			38,509
Taxes on revenues		(278	)		(394	)		(208	)		(1,188	)		(628	)		(1,083	)

Net operating revenues		14,929			14,102			6,333			45,293			23,311			37,426

Operating costs and expenses
Cost of ores and metals sold		(4,258	)		(3,503	)		(2,839	)		(13,326	)		(9,853	)		(13,938	)
Cost of aluminum products		(565	)		(491	)		(571	)		(2,108	)		(2,087	)		(2,267	)
Cost of logistic services		(285	)		(263	)		(235	)		(1,040	)		(779	)		(930	)
Cost of fertilizer products		(674	)		(669	)		(60	)		(1,556	)		(173	)		(117	)
Others		(258	)		(187	)		(290	)		(784	)		(729	)		(389	)

		(6,040	)		(5,113	)		(3,995	)		(18,814	)		(13,621	)		(17,641	)
Selling, general and administrative expenses		(647	)		(418	)		(378	)		(1,701	)		(1,130	)		(1,748	)
Research and development expenses		(301	)		(216	)		(296	)		(878	)		(981	)		(1,085	)
Impairment of goodwill		—			—			—			—			—			(950	)
Others		(774	)		(519	)		(561	)		(2,205	)		(1,522	)		(1,254	)

		(7,762	)		(6,266	)		(5,230	)		(23,598	)		(17,254	)		(22,678	)


Operating income		7,167			7,836			1,103			21,695			6,057			14,748


Non-operating income (expenses)
Financial income		117			56			65			290			381			602
Financial expenses		(926	)		(741	)		(548	)		(2,646	)		(1,558	)		(1,765	)
Gains (losses) on derivatives, net		473			500			296			631			1,528			(812	)
Foreign exchange and indexation gains, net		51			257			17			344			675			364
Gain (loss) on sale of investments		—			—			(190	)		—			40			80

		(285	)		72			(360	)		(1,381	)		1,066			(1,531	)


Income before discontinued operations, income taxes and equity results		6,882			7,908			743			20,314			7,123			13,217


Income taxes
Current		(1,549	)		(2,589	)		583			(4,996	)		(2,084	)		(1,338	)
Deferred		412			443			173			1,291			(16	)		803

		(1,137	)		(2,146	)		756			(3,705	)		(2,100	)		(535	)


Equity in results of affiliates, joint ventures and other investments		303			305			71			987			433			794


Net income from continuing operations		6,048			6,067			1,570			17,596			5,456			13,476
Discontinued operations, net of tax		—			8			—			(143	)		—			—


Net income		6,048			6,075			1,570			17,453			5,456			13,476


Net income attributable to noncontrolling interests		131			37			51			189			107			258
Net income attributable to the Company’s stockholders		5,917			6,038			1,519			17,264			5,349			13,218


Basic and diluted earnings per share attributable to Company’s stockholders
Earnings per preferred share		1.12			1.13			0.28			3.23			0.97			2.58
Earnings per common share		1.12			1.13			0.28			3.23			0.97			2.58
Earnings per preferred share linked to convertible mandatorily notes (*)		1.61			1.35			0.52			4.76			1.71			4.09
Earnings per common share linked to convertible mandatorily notes (*)		1.68			1.41			0.59			6.52			2.21			4.29


(*) Basic earnings per share only, as dilution assumes conversion

The accompanying notes are an integral part of these consolidated financial statements.

Consolidated Statements of Cash Flows

Expressed in millions of United States dollars


	Three-month period ended (unaudited)									Year ended as of December, 31
	December 31,			September 30,			December 31,
	2010			2010			2009			2010			2009			2008
Cash flows from operating activities:
Net income		6,048			6,075			1,570			17,453			5,456			13,476
Adjustments to reconcile net income to cash from operations:
Depreciation, depletion and amortization		1,073			696			799			3,260			2,722			2,807
Dividends received		629			283			243			1,161			386			513
Equity in results of affiliates, joint ventures and other investments		(303	)		(305	)		(71	)		(987	)		(433	)		(794	)
Deferred income taxes		(412	)		(443	)		(173	)		(1,291	)		16			(803	)
Impairment of goodwill		—			—			—			—			—			950
(Gain) Loss on disposal of property, plant and equipment		248			229			113			623			293			376
(Gain) Loss on sale of investments		—			—			190			—			(40	)		(80	)
Discontinued operations, net of tax		—			(8	)		—			143			—			—
Foreign exchange and indexation gains, net		(72	)		(150	)		(37	)		(301	)		(1,095	)		451
Unrealized derivative losses (gains), net		532			(403	)		(248	)		594			(1,382	)		809
Unrealized interest (income) expense, net		(43	)		225			2			187			(25	)		116
Others		(27	)		(17	)		(5	)		58			20			(3	)
Decrease (increase) in assets:
Accounts receivable		(639	)		(776	)		327			(3,800	)		616			(466	)
Inventories		404			(441	)		(128	)		(425	)		530			(467	)
Recoverable taxes		(70	)		142			(791	)		42			108			(263	)
Others		709			(467	)		(277	)		307			(455	)		21
Increase (decrease) in liabilities:
Suppliers		(445	)		876			559			928			121			703
Payroll and related charges		204			160			108			214			159			1
Income taxes		(93	)		1,093			(696	)		1,311			(234	)		(140	)
Others		(35	)		110			(74	)		192			373			(93	)

Net cash provided by operating activities		7,708			6,879			1,411			19,669			7,136			17,114

Cash flows from investing activities:
Short term investments		(1,793	)		—			815			1,954			(1,439	)		(2,308	)
Loans and advances receivable
Related parties
Loan proceeds		—			—			(14	)		(28	)		(181	)		(37	)
Repayments		—			(1	)		—			—			7			58
Others		(17	)		(17	)		(4	)		(30	)		(25	)		(15	)
Judicial deposits		96			(27	)		(55	)		(94	)		(132	)		(133	)
Investments		(36	)		—			(806	)		(87	)		(1,947	)		(128	)
Additions to property, plant and equipment		(4,742	)		(3,852	)		(2,755	)		(12,647	)		(8,096	)		(8,972	)
Proceeds from disposal of investments/property, plant and equipment		—			—			158			—			606			134
Acquisition of subsidiaries, net of cash acquired		—			(1,018	)		—			(6,252	)		(1,952	)		—

Net cash used in investing activities		(6,492	)		(4,915	)		(2,661	)		(17,184	)		(13,159	)		(11,401	)

Cash flows from financing activities:
Short-term debt, additions		229			147			323			2,233			1,285			1,076
Short-term debt, repayments		(147	)		(130	)		(379	)		(2,132	)		(1,254	)		(1,311	)
Loans
Related parties
Loan proceeds		2			7			16			24			16			54
Repayments		(22	)		—			(15	)		(25	)		(373	)		(20	)
Issuances of long-term debt
Third parties		891			2,017			1,537			4,436			3,104			1,890
Repayments of long-term debt
Third parties		(958	)		(1,288	)		(48	)		(2,629	)		(307	)		(1,130	)
Treasury stock		(1,655	)		(341	)		—			(1,996	)		(9	)		(752	)
Mandatorily convertible notes		—			—			—			—			934			—
Transactions of noncontrolling interest		—			660			—			660			—			—
Capital increase		—			—			—			—			—			12,190
Dividends and interest attributed to Company’s stockholders		(1,750	)		—			(1,469	)		(3,000	)		(2,724	)		(2,850	)
Dividends and interest attributed to noncontrolling interest		(81	)		—			(47	)		(140	)		(47	)		(143	)

Net cash provided by (used in) financing activities		(3,491	)		1,072			(82	)		(2,569	)		625			9,004

Increase (decrease) in cash and cash equivalents		(2,275	)		3,036			(1,332	)		(84	)		(5,398	)		14,717
Effect of exchange rate changes on cash and cash equivalents		136			452			167			375			2,360			(5,432	)
Cash and cash equivalents, beginning of period		9,723			6,235			8,458			7,293			10,331			1,046

Cash and cash equivalents, end of period		7,584			9,723			7,293			7,584			7,293			10,331

Cash paid during the period for:
Interest on short-term debt		(2	)		(2	)		—			(5	)		(1	)		(11	)
Interest on long-term debt		(314	)		(242	)		(289	)		(1,097	)		(1,113	)		(1,255	)
Income tax		(1,100	)		(705	)		(973	)		(1,972	)		(1,331	)		(2,867	)
Non-cash transactions
Interest capitalized		38			24			77			164			266			230

Conversion of mandatorily convertible notes using 75,435,238 treasury stock (see note 18).

The accompanying notes are an integral part of these consolidated financial statements.

Consolidated Statements of Changes in Stockholders’ Equity

Expressed in millions of United States dollars
(Except number of shares)


	Three-month period ended (unaudited)									Year ended as of December, 31
	December 31,			September 30,			December 31,
	2010			2010			2009			2010			2009			2008
Preferred class A stock (including twelve golden shares)
Beginning of the period		10,370			10,370			9,727			9,727			9,727			4,953
Capital increase		—			—			—			—			—			4,774
Transfer from undistributed retained earnings		—			—			—			643			—			—

End of the period		10,370			10,370			9,727			10,370			9,727			9,727

Common stock
Beginning of the period		16,016			16,016			15,262			15,262			15,262			7,742
Capital increase		—			—			—			—			—			7,520
Transfer from undistributed retained earnings		—			—			—			754			—			—

End of the period		16,016			16,016			15,262			16,016			15,262			15,262

Treasury stock
Beginning of the period		(1,528	)		(660	)		(1,150	)		(1,150	)		(1,141	)		(389	)
Sales (acquisitions)		(1,132	)		(868	)		—			(1,510	)		(9	)		(752	)

End of the period		(2,660	)		(1,528	)		(1,150	)		(2,660	)		(1,150	)		(1,141	)

Additional paid-in capital
Beginning of the period		2,188			1,790			411			411			393			498
Change in the period		—			398			—			1,777			18			(105	)

End of the period		2,188			2,188			411			2,188			411			393

Mandatorily convertible notes — common shares
Beginning of the period		290			290			1,578			1,578			1,288			1,288
Change in the period		—			—			—			(1,288	)		290			—

End of the period		290			290			1,578			290			1,578			1,288

Mandatorily convertible notes — preferred shares
Beginning of the period		644			644			1,225			1,225			581			581
Change in the period		—			—			—			(581	)		644			—

End of the period		644			644			1,225			644			1,225			581

Other cumulative comprehensive income (deficit)
Cumulative translation adjustments
Beginning of the period		(265	)		(3,617	)		(2,542	)		(1,772	)		(11,493	)		1,340
Change in the period		12			3,352			770			1,519			9,721			(12,833	)

End of the period		(253	)		(265	)		(1,772	)		(253	)		(1,772	)		(11,493	)

Unrealized gain (loss) — available-for-sale securities, net of tax
Beginning of the period		1			—			(1	)		—			17			211
Change in the period		2			1			1			3			(17	)		(194	)

End of the period		3			1			—			3			—			17

Surplus (deficit) accrued pension plan
Beginning of the period		154			(64	)		346			(38	)		(34	)		75
Change in the period		(213	)		218			(384	)		(21	)		(4	)		(109	)

End of the period		(59	)		154			(38	)		(59	)		(38	)		(34	)

Cash flow hedge
Beginning of the period		109			122			13			2			—			29
Change in the period		(133	)		(13	)		(11	)		(26	)		2			(29	)

End of the period		(24	)		109			2			(24	)		2			—

Total other cumulative comprehensive income (deficit)		(333	)		(1	)		(1,808	)		(333	)		(1,808	)		(11,510	)

Undistributed retained earnings
Beginning of the period		27,730			26,086			24,053			28,508			18,340			15,317
Transfer from/to unappropriated retained earnings		14,488			1,644			4,455			15,107			10,168			3,023
Transfer to capitalized earnings		—			—			—			(1,397	)		—			—

End of the period		42,218			27,730			28,508			42,218			28,508			18,340

Unappropriated retained earnings
Beginning of the period		13,612			9,234			7,624			3,182			9,616			1,631
Net income attributable to the stockholders’ Company		5,917			6,038			1,519			17,264			5,349			13,218
Interest on mandatorily convertible debt
Preferred class A stock		(23	)		(11	)		(19	)		(72	)		(58	)		(46	)
Common stock		(10	)		(5	)		(23	)		(61	)		(93	)		(96	)
Dividends and interest attributed to stockholders’ equity
Preferred class A stock		(1,863	)		—			(570	)		(1,940	)		(570	)		(806	)
Common stock		(2,979	)		—			(894	)		(3,100	)		(894	)		(1,262	)
Appropriation from/to undistributed retained earnings		(14,488	)		(1,644	)		(4,455	)		(15,107	)		(10,168	)		(3,023	)

End of the period		166			13,612			3,182			166			3,182			9,616

Total Company stockholders’ equity		68,899			69,321			56,935			68,899			56,935			42,556

Noncontrolling interests
Beginning of the period		2,826			3,485			2,798			2,831			1,892			2,180
Disposals (acquisitions) of noncontrolling interests		—			(680	)		(15	)		1,629			83			—
Cumulative translation adjustments		(85	)		211			79			104			823			(445	)
Cash flow hedge		5			—			(30	)		40			(18	)		(21	)
Net income attributable to noncontrolling interests		131			37			51			189			107			258
Dividends and interest attributable to noncontrolling interests		(18	)		(80	)		(52	)		(104	)		(56	)		(137	)
Capitalization of stockholders advances		27			—			—			27			—			57
Assets and liabilities held for sale		(56	)		(147	)		—			(1,886	)		—			—

End of the period		2,830			2,826			2,831			2,830			2,831			1,892

Total stockholders’ equity		71,729			72,147			59,766			71,729			59,766			44,448


Number of shares issued and outstanding:
Preferred class A stock (including twelve golden shares)		2,108,579,618			2,108,579,618			2,108,579,618			2,108,579,618			2,108,579,618			2,108,579,618
Common stock		3,256,724,482			3,256,724,482			3,256,724,482			3,256,724,482			3,256,724,482			3,256,724,482
Buy-backs
Beginning of the period		(108,299,565	)		(77,144,565	)		(152,579,803	)		(152,579,803	)		(151,792,203	)		(86,923,184	)
Acquisitions		(38,725,400	)		(31,155,000	)		—			(69,880,400	)		(831,400	)		(64,869,259	)
Conversions		—			—			—			75,435,238			43,800			240

End of the period		(147,024,965	)		(108,299,565	)		(152,579,803	)		(147,024,965	)		(152,579,803	)		(151,792,203	)

		5,218,279,135			5,257,004,535			5,212,724,297			5,218,279,135			5,212,724,297			5,213,511,897

The accompanying notes are an integral part of these consolidated financial statements.

Consolidated Statements of Comprehensive Income

Expressed in millions of United States dollars


	Three-month period ended (unaudited)									Year ended as of December, 31
	December 31,			September 30,			December 31,
	2010			2010			2009			2010			2009			2008
Comprehensive income is comprised as follows:
Company’s stockholders:
Net income attributable to Company’s stockholders		5,917			6,038			1,519			17,264			5,349			13,218
Cumulative translation adjustments		12			3,352			770			1,519			9,721			(12,833	)

Unrealized gain (loss) — available-for-sale securities
Gross balance as of the period/year end		7			1			1			12			(47	)		(230	)
Tax (expense) benefit		(5	)		—			—			(9	)		30			36

		2			1			1			3			(17	)		(194	)
Surplus (deficit) accrued pension plan
Gross balance as of the period/year end		(306	)		344			(578	)		(53	)		10			(194	)
Tax (expense) benefit		93			(126	)		194			32			(14	)		85

		(213	)		218			(384	)		(21	)		(4	)		(109	)
Cash flow hedge
Gross balance as of the period		(190	)		20			(2	)		(16	)		11			(29	)
Tax expense		57			(33	)		(9	)		(10	)		(9	)		—

		(133	)		(13	)		(11	)		(26	)		2			(29	)

Total comprehensive income attributable to Company’s stockholders		5,585			9,596			1,895			18,739			15,051			53

Noncontrolling interests:
Net income attributable to noncontrolling interests		131			37			51			189			107			258
Cumulative translation adjustments		(85	)		211			79			104			823			(445	)
Cash flow hedge		5			—			(30	)		40			(18	)		(21	)

Total comprehensive income attributable to Noncontrolling interests		51			248			100			333			912			(208	)

Total comprehensive income		5,636			9,844			1,995			19,072			15,963			(155	)

The accompanying notes are an integral part of these consolidated financial statements.

Notes to the Consolidated Financial Statements

Expressed in millions of United States dollars, unless otherwise stated

The Company and its operations

Vale S.A., (“Vale”, the “Company” or “we”) is a limited liability company incorporated in Brazil. Operations are carried out through Vale and our subsidiary companies, joint ventures and affiliates, and mainly consist of mining, basic metals production, fertilizers, logistics and steel activities.

At December 31, 2010, our principal consolidated operating subsidiaries are the following:

% voting

Subsidiary

% ownership

capital

Location

Principal activity

Alumina do Norte do Brasil S.A. — Alunorte (*)

57.03

59.02

Brazil

Alumina

Alumínio Brasileiro S.A. — Albras (*)

51.00

Brazil

Aluminum

Compañia Minera Misky Mayo S.A.C.

40.00

51.00

Peru

Fertilizer

Ferrovia Centro-Atlântica S. A.

99.99

Brazil

Logistics

Ferrovia Norte Sul S.A.

100.00

Brazil

Logistics

Mineração Corumbá Reunidas S.A.

100.00

Brazil

Iron ore

PT International Nickel Indonesia Tbk

59.14

Indonesia

Nickel

Sociedad Contractual Minera Tres Valles

90.00

Chile

Copper

Urucum Mineração S.A.

100.00

Brazil

Iron Ore and Manganese

Vale Australia Pty Ltd.

100.00

Australia

Coal

Vale Austria Holdings GMBH

100.00

Austria

Holding and Exploration

Vale Canada Limited

100.00

Canada

Nickel

Vale Colombia Ltd.

100.00

Colombia

Coal

Vale Fertilizantes S.A

78.92

99.83

Brazil

Fertilizer

Vale Fosfatados S.A

100.00

Brazil

Fertilizer

Vale International S.A

100.00

Switzerland

Trading

Vale Manganês S.A.

100.00

Brazil

Manganese and Ferroalloys

Vale Nouvelle Caledonie SAS

74.00

New Caledonia

Nickel


(*)		Classified as current assets held for sale.

Basis of consolidation

All majority-owned subsidiaries in which we have both share and management control are consolidated. All significant intercompany accounts and transactions are eliminated. Subsidiaries over which control is achieved through other means, such as stockholders agreement, are also consolidated even if we hold less than 51% of voting capital. Our variable interest entities in which we are the primary beneficiary are consolidated. Investments in unconsolidated affiliates and joint ventures are accounted for under the equity method (Note 15).

We evaluate the carrying value of our equity investments in relation to publicly quoted market prices when available. If the quoted market price is below book value, and such decline is considered other than temporary, we write-down our equity investments to quoted market value.

We define joint ventures as businesses in which we and a small group of other partners each participate actively in the overall entity management, based on a stockholders agreement. We define affiliates as businesses in which we participate as a noncontrolling interest but with significant influence over the operating and financial policies of the investee.

Our participation in hydroelectric projects in Brazil is made via consortium contracts under which we have undivided interests in the assets, and are liable for our proportionate share of liabilities and expenses, which are based on our proportionate share of power output. We do not have joint liability for any obligations. No separate legal or tax status is granted to consortia under Brazilian law. Accordingly, we recognize our proportionate share of costs and our undivided interest in assets relating to hydroelectric projects (Note 12).

Summary of significant accounting policies

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used for, but not limited to, the selection of useful lives of property, plant and equipment, impairment, provisions necessary for contingent liabilities, fair values assigned to assets and liabilities acquired in business combinations, income tax valuation allowances, employee post retirement benefits and other similar evaluations. Actual results could differ from those estimated.

a) Basis of presentation

We have prepared our consolidated financial statements in accordance with United States generally accepted accounting principles (“US GAAP”), which differ in certain respects from the accounting practices adopted in Brazil (“Brazilian GAAP”), compliant with International Financial Reporting Standards (“IFRS”) as issued by the IASB, which are the basis for our statutory financial statements.

These financial statements reflect the retrospective adoption of the new segment information as of December 31, 2010 and the three years then ended as shown in Note 24. The new segment information was set up during 2010 based on new acquisitions and project developments. The information disclosed under Notes 15 and 24 retroactively reflects these changes for all periods covered by those Financial Statements.

Since December 2007, significant modifications have been made to Brazilian GAAP as part of a convergence project with International Financial Reporting Standards (“IFRS”) and as from December 31, 2010, the convergence will be completed and therefore IFRS will be the accounting practice adopted in Brazil. The Company does not expect to discontinue the US GAAP reporting during 2011.

Our consolidated interim financial statements for the three-month periods ended December 31, 2010, September 30, 2010 and December 31, 2009 presented herein are unaudited. However, in our opinion, such consolidated financial statements include all adjustments necessary for a fair statement of the results for these periods.

The Brazilian Real is the parent Company’s functional currency. We have selected the US dollar as our reporting currency.

All assets and liabilities have been translated to US dollars at the closing rate of exchange at each balance sheet date (or, if unavailable, the first available exchange rate). All statement of income accounts have been translated to US dollars at the average exchange rates prevailing during the respective periods. Capital accounts are recorded at historical exchange rates. Translation gains and losses are recorded in the Cumulative Translation Adjustments account (“CTA”) in stockholders’ equity.

The results of operations and financial position of our entities that have a functional currency other than the US dollar, have been translated into US dollars and adjustments to translate those statements into US dollars are recorded in the CTA in stockholders’ equity.

The exchange rates used to translate the assets and liabilities of the Brazilian operations at December 31, 2010 and 2009, were R$1.6662 and R$1.7412, respectively.

The net transaction gain (loss) included in our statement of income (“Foreign exchange and indexation gains (losses), net”) was US$102, US$665 and US$(1,011) in the years ended December 31, 2010, 2009 and 2008, respectively.

The Company has performed an evaluation of subsequent events through February 24, 2011 which is the date the financial statements were issued.

b) Cash equivalents and short-term investments

Cash flows from overnight investments and fundings are reported net. Short-term investments that have a ready market and original maturities of 90 days or less are classified as “Cash equivalents”. The remaining investments, between 91 day and 360 day maturities are stated at fair value and presented as “Short-term investments”.

c) Long-term

Assets and liabilities that are realizable or due more than 12 months after the balance sheet date are classified as long-term.

d) Inventories

Inventories are recorded at the average cost of purchase or production, reduced to market value (net realizable value less a reasonable margin) when lower. Stockpiled inventories are accounted for as processed when they are removed from the mine. The cost of finished goods of comprises depreciation and all direct costs necessary to convert stockpiled inventories into finished goods.

We classify proven and probable reserve quantities attributable to stockpiled inventories as inventories. These reserve quantities are not included in the total proven and probable reserve quantities used in the units of production, depreciation, depletion and amortization calculations.

We periodically assess our inventories to identify obsolete or slow-moving inventories, and if needed we recognize definitive allowances for them.

e) Removal of waste materials to access mineral deposits

Stripping costs (the costs associated with the removal of overburdened and other waste materials) incurred during the development of a mine, before production commences, are capitalized as part of the depreciable cost of developing the property. Such costs are subsequently amortized over the useful life of the mine based on proven and probable reserves.

Post-production stripping costs are included in the cost of the inventory produced (that is extracted), at each mine individually during the period that stripping costs are incurred.

f) Property, plant and equipment and intangible assets

Property, plant and equipment are recorded at cost, including interest cost incurred during the construction of major new facilities. We compute depreciation on the straight-line method at annual average rates which take into consideration the useful lives of the assets, as follows: 3.73% for railroads, 1.5% for buildings, 4.23% for installations and 7.73% for other equipment. Expenditures for maintenance and repairs are charged to operating costs and expenses as incurred.

We capitalize the costs of developing major new ore bodies or expanding the capacity of operating mines and amortize these to operations on the unit-of-production method based on the total probable and proven quantity of ore to be recovered. Exploration costs are expensed. Once the economic viability of mining activities is established, subsequent development costs are capitalized.

Separately acquired intangible assets are shown at historical cost. Intangible assets acquired in a business combination are recognized at fair value at the acquisition date. All our intangible assets have definite useful lives and are carried at cost less accumulated amortization, which is calculated using the straight-line method over their estimated useful lives.

g) Business combinations

We apply accounting for business combinations to record acquisitions of interests in other companies. This “purchase method”, requires that we reasonably determine the fair value of the identifiable tangible and intangible assets and liabilities of acquired companies and segregate goodwill as an intangible asset.

We assign goodwill to reporting units and test each reporting unit’s goodwill for impairment at least annually, and whenever circumstance indicating that recognized goodwill may not be fully recovered are identified. We perform the annual goodwill impairment tests during the last quarter of the year.

Goodwill is reviewed for impairment utilizing a two step process. In the first step, we compare a reporting unit’s fair value with its carrying amount to identify any potential goodwill impairment loss. If the carrying amount of a reporting unit exceeds the unit’s fair value, based on a discounted cash flow analysis, we carry out the second step of the impairment test, measuring and recording the amount, if any, of the unit’s goodwill impairment loss.

h) Impairment of long-lived assets

All long-lived assets, are tested to determine if they are recoverable from operating earnings on an undiscounted cash flow basis over their useful lives whenever events or changes in circumstance indicate that the carrying value may not be recoverable.

When we determine that the carrying value of long-lived assets and definite-life intangible assets may not be recoverable, we measure any impairment loss based on a projected discounted cash flow method using a discount rate determined to be commensurate with the risk inherent in our current business model.

i) Available-for-sale equity securities

Equity securities classified as “available-for-sale” are recorded pursuant to accounting for certain investments in debt and equity securities. Accordingly, we classify unrealized holding gains and losses, net of taxes, as a separate component of stockholders’ equity until realized.

j) Compensated absences

The liability for future compensation for employee vacations is fully accrued as earned.

k) Derivatives and hedging activities

We apply accounting for derivative financial instruments and hedging activities, as amended. This standard requires that we recognize all derivative financial instruments as either assets or liabilities on our balance sheet and measure such instruments at fair value. Changes in the fair value of derivatives are recorded in each period in current earnings or in other comprehensive income, in the latter case depending on whether a transaction is designated as an effective hedge and has been effective during the period.

l) Asset retirement obligations

Our retirement obligations consist primarily of estimated closure costs, the initial measurement of which is recognized as a liability discounted to present value and subsequently accreted through earnings. An asset retirement cost equal to the initial liability is capitalized as part of the related asset’s carrying value and depreciated over the asset’s useful life.

m) Revenues and expenses

Revenues are recognized when title is transferred to the customer or services are rendered. Revenue from exported products is recognized when such products are loaded on board the ship. Revenue from products sold in the domestic market is recognized when delivery is made to the customer. Revenue from logistic services is recognized when the service order has been fulfilled. Expenses and costs are recognized on the accrual basis.

n) Income taxes

The deferred tax effects of tax loss carryforwards and temporary differences are recognized pursuant to accounting for income taxes. A valuation allowance is made when we believe that it is more likely than not that tax assets will not be fully recovered in the future.

o) Earnings per share

Earnings per share are computed by dividing net income by the weighted average number of common and preferred shares outstanding during the period.

p) Interest attributed to stockholders’ equity (dividend)

Brazilian corporations are permitted to distribute interest attributable to stockholders’ equity. The calculation is based on the stockholders’ equity amounts as stated in the statutory accounting records and the interest rate applied may not exceed the long-term interest rate (TJLP) determined by the Brazilian Central Bank. Also, such interest may not exceed 50% of net income for the year nor 50% of retained earnings plus revenue reserves as determined by “Brazilian GAAP”.

As the notional interest charge is tax deductible in Brazil, the benefit to us, as opposed to making a dividend payment is a reduction in our income tax charge. Income tax of 15% is withheld on behalf of the stockholders relative to the interest distribution. Under Brazilian law, interest attributed to stockholders’ equity is considered as part of the annual minimum mandatory dividend (Note 18). This notional interest distribution is treated for accounting purposes as a deduction from stockholders’ equity in a manner similar to a dividend and the tax credit recorded in income.

q) Pension and other post retirement benefits

We sponsor private pensions and other post retirement benefits for our employees which are actuarially determined and recognized as an asset or liability or both depending on the funded or unfunded status of each plan in accordance with employees ´ accounting for defined benefit pension and other post retirement plans”. The cost of our defined benefit and prior service costs or credits that arise during the period and are not components of net periodic benefit costs are recorded in other cumulative comprehensive income (deficit).

Accounting pronouncements

a) Newly issued accounting pronouncements

Accounting Standards Update (ASU) number 2010-29 Disclosure of Supplementary Pro Forma Information for Business Combinations a consensus of the FASB Emerging Issues Task Force. The objective of this Update is to address diversity in practice about the interpretation of the pro forma revenue and earnings disclosure requirements for business combinations. The amendments in this Update specify that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. The amendments also expand the supplemental pro forma disclosures to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The impact of this statement will occur for business combinations for which the acquisition date is on or after January 1, 2011.

The Company understands that the other recently issued accounting pronouncements that are not effective as of and for the year ending December 31, 2010, are not expected to be relevant for its consolidated financial statements.

b) Accounting standards adopted in 2010

Accounting Standards Update (ASU) number 2010-25 Plan Accounting — Defined Contribution Pension Plan (Topic 962) amendments in this update require that participant loans be classified as notes receivable from participants, which are segregated from plan investments and measured at their unpaid principal balance plus any accrued but unpaid interest. This codification does not impact our financial position, results of operations or liquidity.

Accounting Standards Update (ASU) number 2010-20 Receivables (Topic 310) improves the disclosures that an entity provides about the credit quality of its financing receivables and the related allowance for credit losses. As a result of these amendments, an entity is required to disaggregate by portfolio segment or class certain existing disclosures and provide certain new disclosures about its financing receivables and related allowance for credit losses. We adopted the disclosure in our financial statements.

Accounting Standards Update (ASU) number 2010-18 Receivables (Topic 310) clarifies that modifications of loans that are accounted for within a pool under Subtopic 310-30, which provides guidance on accounting for acquired loans that have evidence of credit deterioration upon acquisition, do not result in the removal of those loans from the pool even if the modification would otherwise be considered a troubled debt restructuring. An entity will continue to be required to consider whether the pool of assets in which the loan is included is impaired if expected cash flows for

the pool change. The amendments do not affect the accounting for loans under the scope of Subtopic 310-30 that are not accounted for within pools. Loans accounted for individually under Subtopic 310-30 continue to be subject to the troubled debt restructuring accounting provisions within Subtopic 310-40. We adopted the change in the disclosure of our financial statements

Accounting Standards Update (ASU) number 2010-11 Derivatives and Hedging (Topic 815) clarifies the type of embedded credit derivative that is exempt from embedded derivative bifurcation requirements. Only one form of embedded credit derivative qualifies for the exemption one that is related only to the subordination of one financial instrument to another. As a result, entities that have contracts containing an embedded credit derivative feature in a form other than such subordination may need to separately account for the embedded credit derivative feature. This Codification does not impact our financial position, results of operations or liquidity.

Accounting Standards Update (ASU) number 2010-10 Consolidation (Topic 810) defers the effective date of the amendments to the consolidation requirements made by FASB Statement 167 to a reporting entity’s interest in certain types of entities and clarifies other aspects of the Statement 167 amendments. As a result of the deferral, a reporting entity will not be required to apply the Statement 167 amendments to the Subtopic 810-10 consolidation requirements to its interest in an entity that meets the criteria to qualify for the deferral. This Update also clarifies how a related party’s interests in an entity should be considered when evaluating the criteria for determining whether a decision maker or service provider fee represents a variable interest. In addition, the Update also clarifies that a quantitative calculation should not be the sole basis for evaluating whether a decision maker’s or service provider’s fee is a variable interest. This Codification does not impact our financial position, results of operations or liquidity.

Accounting Standards Update No. 2010-09 Subsequent Events (Topic 855) addresses both the interaction of the requirements of Topic 855, Subsequent Events, with the SEC’s reporting requirements and the intended breadth of the reissuance disclosures provision related to subsequent events (paragraph 855-10-50-4). The amendments in this Update have the potential to change reporting by both private and public entities, however, the nature of the change may vary depending on facts and circumstances. This Codification does not impact our financial position, results of operations or liquidity.

Accounting Standards Update (ASU) number 2010-06 Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements. This update provides amendments to Subtopic 820-10 and are expected to provide more robust disclosures about (1) the different classes of assets and liabilities measured at fair value, (2) the valuation techniques and inputs used, (3) the activity in Level 3 fair value measurements, and (4) the transfers between Levels 1, 2, and 3. The Company fully adopted this standard in 2010 with no impact on our financial position, results of operations or liquidity.

In June 2009, the Financial Accounting Standards Board (“FASB”) issued an amendment to Interpretation No. 46(R) on the accounting and disclosure requirements for the consolidation of variable interest entities (“VIEs”). Subsequently, in December 2009, the Accounting Standards Update (ASU) number 2009-17 Amendments to FASB Interpretation No. 46(R) was issued. The amendments replace the quantitative-based risks and rewards calculation, for determining which reporting entity has a controlling financial interest in a VIE, with a qualitative analysis when determining whether or not it must consolidate a VIE. The newly required approach is focused on identifying which reporting entity has the power to direct the activities of a variable interest entity that most significantly impact the entity’s economic performance and (1) the obligation to absorb losses of the entity or (2) the right to receive benefits from the entity. The amendments also require an enterprise to continuously reassess whether it must consolidate a VIE. Additionally, the amendments eliminated the scope exception on qualifying special-purpose entities (“QSPE”) and require enhanced disclosures about: involvement with VIEs, significant changes in risk exposures, impacts on the financial statements, and, significant judgments and assumptions used to determine whether or not to consolidate a VIE. The Company adopted these amendments in 2010, with no impact on our financial position, results of operations or liquidity.

In June 2009, the “FASB” issued an amendment to the accounting and disclosure requirements for transfers of financial assets. Subsequently, in December 2009, the Accounting Standards Update (ASU) number 2009-16 Accounting for Transfers of Financial Assets — an amendment of FASB Statement No. 140 was issued. The amendments improve financial reporting requiring greater transparency and additional disclosures for transfers of financial assets and the entity’s continuing involvement with them and also change the requirements for derecognizing financial assets. In addition, the amendments eliminate the exceptions for QSPE from the

consolidation guidance and the exception that permitted sale accounting for certain mortgage securitizations when a transferor has not surrendered control over the transferred financial assets. The Company adopted these amendments in 2010, with no impact on our financial position, results of operations or liquidity.

Accounting Standards Update (ASU) number 2009-08 Earning Per Share issued by the FASB provides additional guidance related to calculation of earnings per share. In particular, the effect on income available to common stockholders of a redemption or induced conversion of preferred stock. This guidance amends ASC 260. This codification does not impact our financial position, results of operations or liquidity.

Major acquisitions and disposals

a) Fertilizers Businesses

In line with our strategy to become a leading global player in the fertilizer business, we acquired in May 2010, 58.6% of the equity capital of Fertilizantes Fosfatados S.A. (Fosfertil), currently Vale Fertilizantes S.A., and the Brazilian fertilizer assets of Bunge Participações e Investimentos S.A. (BPI), currently named Vale Fosfatados S.A. for a total of US$4.7 billion in cash. An additional payment of US$55 was made in July, as a complement of the purchase price of Vale Fosfatados.

As part of this acquisition, we exercised in September an option contract to acquire additional 20.27% stake in Vale Fertilizantes S.A., for US$1.0 billion. Also, we launched a mandatory offer to acquire the common shares held by the noncontrolling stockholders.

As at December 31, 2010, we have 78.92% of the total capital and 99.83% of the voting capital of Vale Fertilizantes and 100% of the capital of Vale Fosfatados.

As this transaction occurred within the previous twelve months, information about the purchase price allocation presented below based on the fair values of identified assets acquired and liabilities assumed is preliminary. Such allocation, currently being performed internally by the Company, with the assistance of specialists will be finalized during future periods, and accordingly, the preliminary purchase price allocation information set forth below is subject to revision, which may be material.


Purchase price	5,795
Noncontrolling consideration	767
Book value of property, plant and equipment and mining rights	(1,987	)
Book value of other assets acquired and liabilities assumed, net	(395	)
Adjustment to fair value of property, plant and equipment and mining rights	(5,146	)
Adjustment to fair value of inventories	(98	)
Deferred taxes on the above adjustments	1,783

Goodwill	719

The acquired business contributed net revenues of US$1,507 and to reduce net income of US$10 to the group for the period from June to December, 2010. If this acquisition had been completed on January 1, 2010, our net revenues would increase by US$770 and our net income would decrease by US$12. These amounts have been calculated using our accounting policies and by adjustment the results of the subsidiaries to reflect additional depreciation and amortization that would have been charged assuming the fair value adjustments to property plant and equipment and intangible assets had been applied from January 1, 2010, together with consequential tax effects.

The goodwill balance arises primarily due to the synergies between the acquired assets and the potash operations in Taquari-Vassouras, Carnalita, Rio Colorado and Neuquém and phosphates in Bayóvar I and II, in Peru, and Evate, in Mozambique. The future development of our projects combined with the acquisition of the portfolio of fertilizer assets will allow Vale to be one of the top players in the world’s fertilizer business.

b) Other transactions — 2010

In September 2010, we acquired 51% stake in Sociedade de Desenvolvimento do Corredor Norte S.A (SDCN) for US$21. The SDCN has a concession to create a logistic infrastructure necessary for the production flow resulting from the second phase at our Moatize Coal Project.

As part of our efforts to meet our future production targets, we acquired in April 2010, 51% interest on iron ore concession rights in Simandou South (Zogota), Guinea, and iron ore exploration permits in Simandou North. From this amount, US$500 is payable immediately and the remaining US$2 billion upon achievement of specific milestones.

This joint venture is also committed to renovate 660km of the Trans-Guinea railway for passenger transportation and light commercial use.

In July 2010, we concluded the sale of minority stakes in the Bayóvar project in Peru through the newly-formed company MVM Resources International B.V. (MVM). We sold 35% of the total capital of MVM to Mosaic for US$385 and 25% to Mitsui for US$275. Vale retains control of the Bayóvar project, holding a 40% stake of the total capital and 51% of voting shares of the newly-formed company. The capital amount invested as at June 30, 2010 was approximately US$550. The difference between the fair value and carrying amount of US$321 on this transaction was accounted for in equity in accordance with the accounting rules related to the gains/losses when control is retained.

In June 2010, we acquired an additional 24.5% stake in the Belvedere coal project (Belvedere) for US$92 from AMCI Investments Pty Ltd (AMCI). As an outcome of this transaction, Vale increased its participation in Belvedere from 51.0% to 75.5%.

In May 2010, we entered into an agreement with Oman Oil Company S.A.O.C. (OOC), a company wholly-owned by the Government of the Sultanate of Oman, to sell 30% of Vale Oman Pelletizing Company LLC (VOPC), for US$125. The transaction remains subject to the terms set forth in the definitive share purchase agreement to be signed after the fulfillment of precedent conditions.

We have entered into negotiations and agreements to sell our Kaolin, aluminum and alumina assets. For further details see Note 13.

c) Other transactions — 2009

In September 2009, we acquired from Rio Tinto Plc, Mineração Corumbá Reunidas S.A. (MCR) for US$802. MCR is the owner of an iron ore mining operations with high iron content and a strategic importance to our product portfolio, adding a substantial volume of lump ore to our reserves. The purchase price allocation mainly adjustments refers to fair value of inventories, property plant and equipment and intangible and there was no goodwill recorded on this transaction.

In September 2009, we concluded an agreement with ThyssenKrupp Steel AG signed in July, to increase our stake in ThyssenKrupp CSA Siderúrgica do Atlântico Ltda. (CSA) to 26.87% through a capital subscripton of US$1,424.

In April 2009, we concluded the sale of all common shares we held in, Usiminas Siderúrgicas de Minas Gerais S.A. — Usiminas, for US$273 generating a gain of US$153.

In March 2009, we acquired 100% of Diamond Coal Ltd that owns coal assets in Colombia for US$300, from Cement Argos. Cash payment was made during the quarter ending June 30, 2009. The primary reason for the acquisition was that the coal assets are an important part of our growth strategy. Therefore, Vale is seeking to build a coal asset platform in Colombia, as it is the world’s third largest exporter of high-quality thermal coal, given its low level of sulfur and high calorific value. The purchase price allocation mainly adjustments refers to fair value of, property plant and equipment and there was no goodwill recorded on this transaction.

In March 2009, we acquired 50% of the joint venture with African Rainbow Minerals Limited of Teal Minerals Incorporated for US$60.

In February 2009, acquired Green Mineral Resources that owns the Regina Project (Canada) and Colorado Project (Argentina) which are in development stage, from Rio Tinto, for US$850. The acquisition of potash assets is aligned with Vale’s strategy to become a large producer of fertilizers to benefit from the exposure to rising global consumption. The purchase price allocation mainly adjustments refers to fair value of, property plant and equipment and there was no goodwill recorded on this transaction.

Income taxes

Income taxes in Brazil comprise of federal income tax and social contribution, which is an additional federal tax. The statutory composite enacted tax rate applicable in the periods presented is 34%. In other countries where we have operations, we are subject to various taxes rates depending on the jurisdiction.

We analyze the potential tax impact associated with undistributed earnings by each of our subsidiaries. For those subsidiaries in which the undistributed earnings would be taxable when remitted to the parent company, no deferred tax is recognized, based on generally accepted accounting principles.

The amount reported as income tax expense in our condensed consolidated financial statements is reconciled to the statutory rates as follows:


	Three-month period ended (unaudited)
	December 31, 2010									September 30, 2010									December 31, 2009
	Brazil			Foreign			Total			Brazil			Foreign			Total			Brazil			Foreign			Total
Income before discontinued operations, income taxes, equity results and noncontrolling interests		5,581			1,301			6,882			7,378			530			7,908			419			324			743
Exchange variation (not taxable) or not deductible		—			114			114			—			751			751			—			446			446


		5,581			1,415			6,996			7,378			1,281			8,659			419			770			1,189


Tax at Brazilian composite rate		(1,898	)		(481	)		(2,379	)		(2,509	)		(436	)		(2,945	)		(142	)		(262	)		(404	)
Adjustments to derive effective tax rate:
Tax benefit on interest attributed to stockholders		369			—			369			208			—			208			502			—			502
Difference on tax rates of foreign income		—			699			699			—			411			411			—			418			418
Tax incentives		198			—			198			215			—			215			66			—			66
Other non-taxable, income/non deductible expenses		82			(106	)		(24	)		(38	)		3			(35	)		17			157			174

Income tax per consolidated statements of income		(1,249	)		112			(1,137	)		(2,124	)		(22	)		(2,146	)		443			313			756


	Year ended as of December, 31
	2010									2009									2008
	Brazil			Foreign			Total			Brazil			Foreign			Total			Brazil			Foreign			Total
Income before discontinued operations, income taxes, equity results and noncontrolling interests		16,586			3,728			20,314			10,024			(2,901	)		7,123			2,434			10,783			13,217
Exchange variation (not taxable) or not deductible		—			265			265			—			5,162			5,162			—			(2,887	)		(2,887	)


		16,586			3,993			20,579			10,024			2,261			12,285			2,434			7,896			10,330


Tax at Brazilian composite rate		(5,639	)		(1,358	)		(6,997	)		(3,408	)		(769	)		(4,177	)		(828	)		(2,685	)		(3,513	)
Adjustments to derive effective tax rate:
Tax benefit on interest attributed to stockholders		995			—			995			502			—			502			692			—			692
Difference on tax rates of foreign income		—			1,673			1,673			—			1,079			1,079			—			1,728			1,728
Tax incentives		642			—			642			148			—			148			53			—			53
Other non-taxable, income/non deductible expenses		13			(31	)		(18	)		100			248			348			287			218			505


Income taxes per consolidated statements of income		(3,989	)		284			(3,705	)		(2,658	)		558			(2,100	)		204			(739	)		(535	)

Vale and some subsidiaries in Brazil were granted with tax incentives that provide for a partial reduction of the income tax due related to certain regional operations of iron ore, railroad, manganese, copper, bauxite, alumina, aluminum, kaolin and potash. The tax benefit is calculated based on taxable profit adjusted by the tax incentive (so-called “exploration profit”) taking into consideration the operational profit of the projects that benefit from the tax incentive during a fixed period. In general, such tax incentives expire in 2018. Part of the northern railroad and iron ore operations have been granted with tax incentives for a period of 10 years starting from 2009. The tax savings must be registered in a special capital (profit) reserve in the net equity of the entity that benefits from the tax incentive and cannot be distributed as dividends to the stockholders.

We are also allowed to reinvest part of the tax savings in the acquisition of new equipment to be used in the operations that enjoy the tax benefit subject to subsequent approval from the Brazilian regulatory agencies. Superintendência de Desenvolvimento da Amazônia — SUDAM and Superintendência de Desenvolvimento do Nordeste — SUDENE. When the reinvestment is approved, the corresponding tax benefit must also be accounted for in a special profit reserve and is also subject to the same restrictions with respect to future dividend distributions to the stockholders.

We also have income tax incentives related to our Goro project under development in New Caledonia (“The Goro Project”). These incentives include an income tax holiday during the construction phase of the project and throughout a 15-year period commencing in the first year in which commercial production, as defined by the applicable legislation, is achieved followed by a five-year, 50 per cent income tax holiday. The Goro Project also qualifies for certain exemptions from indirect taxes such as import duties during the construction phase and throughout the commercial life of the project. Certain of these tax benefits, including the income tax holiday, are subject to an earlier phase out, should the project achieves a specified cumulative rate of return. We are subject to a branch profit tax commencing in the first year in which commercial production is achieved, as defined by the applicable legislation. To date, we have not recorded any taxable income for New Caledonian tax purposes. The benefits of this legislation are expected to apply with respect to taxes payable once the Goro Project is in operation. We obtained tax incentives for our projects in Mozambique, Oman and Malaysia, that will take effects when those projects start their commercial operation.

We are subject to an examination by the tax authorities for up to five years regarding our operations in Brazil, up to ten years for Indonesia, and up to seven years for Canada for income taxes.

Tax loss carryforwards in Brazil and in most of the jurisdictions where we have tax loss carryforwards have no expiration date, though in Brazil, offset is restricted to 30% of annual taxable income.

On January 1, 2007, Company adopted the provision Accounting for Uncertainty in Income Taxes.

The reconciliation of the beginning and ending amounts is as follows: (see note 21(b)) tax — related actions)


	Three-month period ended (unaudited)								Year ended as of December, 31
	December 31,			September 30,		December 31,
	2010			2010		2009			2010			2009			2008
Beginning of the period		392			369		812			396			657			1,046

Increase resulting from tax positions taken		2,121			5		6			2,130			47			103
Decrease resulting from tax positions taken		(2	)		3		(439	)		(24	)		(474	)		(261	)
Changes in tax legislation		—			—		—			—			—			2
Cumulative translation adjustments		44			15		17			53			166			(233	)

End of the period		2,555			392		396			2,555			396			657

There has been a write-off of values that were provisioned relating to compensation for tax losses and social contribution payments, due to the withdrawal of action by the Company, resulting in the release of funds that were deposited in escrow.

Recognized deferred income tax assets and liabilities are composed as follows:


	As of December 31
	2010			2009
Current deferred tax assets
Accrued expenses deductible only when disbursed		386			852


Long-term deferred tax assets and liabilities

Assets
Employee postretirement benefits provision		665			384
Tax loss carryforwards		732			324
Fair value of financial instruments		379			255
Asset retirement obligation		322			259
Other temporary differences (mainly contingencies provisions)		855			587

		2,953			1,809

Liabilities
Prepaid retirement benefit		(617	)		(435	)
Fair value adjustments in business combinations		(7,745	)		(6,003	)
Social contribution		(2,145	)		(758	)
Other temporary differences		(421	)		(262	)

		(10,928	)		(7,458	)

Valuation allowance
Beginning balance		(106	)		(122	)
Translation adjustments		—			(25	)
Change in allowance		(4	)		41

Ending balance		(110	)		(106	)

Net long-term deferred tax liabilities		(8,085	)		(5,755	)

Cash and cash equivalents


	As of December, 31
	2010		2009
Cash		560		728
Short-term investments		7,024		6,565

		7,584		7,293

All the above mentioned short-term investments are made through the use of low risk fixed income securities, in a way that: those denominated in Brazilian reais are concentrated in investments indexed to the CDI, and those denominated in US dollars are mainly time deposits, with the original due date less than three months.

Short-term investments


	As of December, 31
	2010		2009
Time deposit		1,793		3,747

Represent low risk investments with original due date over three months.

Account receivable

Accounts receivable from customers in the steel industry represent 74.47% of receivables at December 31, 2010.

No single customer accounted for more than 10% of total revenues.

Additional allowances for doubtful accounts charged to the statement of income as expenses in 2010 and 2009 totaled US$23 and US$48, respectively. We wrote-off US$37 in 2010 and US$8 in 2009.


	As of December, 31
	2010			2009
Customers
Denominated in Brazilian Reais		1,227			885
Denominated in other currencies, mainly US dollars		7,102			2,362

		8,329			3,247

Allowance for doubtful accounts		(118	)		(127	)

Total		8,211			3,120

Inventories


	As of December, 31
	2010		2009
Products

Nickel (co-products and by-products)		1,310		1,083
Iron ore and pellets		825		677
Manganese and ferroalloys		203		164
Fertilizer		171		—
Aluminum products (*)		—		135
Kaolin (*)		—		42
Copper concentrate		28		35
Coal		74		51
Others		143		51
Spare parts and maintenance supplies		1,544		958

		4,298		3,196


(*)		Classified as held for sale (see note 13)

In December 31, 2010 and December 31, 2009, there were no adjustments to reduce inventories to market values.

Recoverable taxes


	As of December, 31
	2010		2009
Income tax		459		908
Value-added tax — ICMS		484		290
PIS and COFINS		962		1,052
Others		59		78

Total		1,964		2,328


Current		1,603		1,511
Non-current		361		817

		1,964		2,328

12		Property, plant and equipment and intangible assets

		By type of assets:


	As of December 31, 2010							As of December 31, 2009
			Accumulated							Accumulated
	Cost		Depreciation			Net		Cost		Depreciation		Net
Land		356		—			356		284		—		284
Buildings		6,087		(1,110	)		4,977		4,324		1,143		3,181
Installations		14,904		(4,231	)		10,673		14,063		4,160		9,903
Equipment		10,948		(3,637	)		7,311		7,499		2,380		5,119
Railroads		7,337		(2,357	)		4,980		6,685		2,016		4,669
Mine development costs		28,010		(4,071	)		23,939		20,205		2,957		17,248
Others		12,088		(2,987	)		9,101		10,418		3,123		7,295

		79,730		(18,393	)		61,337		63,478		15,779		47,699
Construction in progress		21,759		—			21,759		19,938		—		19,938

Total		101,489		(18,393	)		83,096		83,416		15,779		67,637

Losses on disposal of property, plant and equipment totaled US$623, US$293 and US$376 in 2010, 2009 and 2008, respectively. Mainly relate write-offs of ships and trucks, locomotives and other equipment, which were replaced in the normal course of business.

		Assets given in guarantee of judicial processes totaled US$149 as at December 31, 2010 (US$222 as at December 31, 2009).

		Hydroelectric assets

We participate in several jointly-owned hydroelectric plants, already in operation or under construction, in which we record our undivided interest in these assets as Property, plant and equipment.

		At December 31, 2010 the cost of hydroelectric plants in service totals US$1,432 (December 31, 2009 US$1,382) and the related depreciation in the year was US$422 (December 31, 2009 US$372). The cost of hydroelectric plant under construction at December 31, 2010 totals US$804 (December 31, 2009 US$521). Income and operating expenses for such plants are not material.

		Intangibles

All of the intangible assets recognized in our financial statements were acquired from third parties, either directly or through a business combination and have definite useful lives from 6 to 30 years.

At December 31, 2010 the intangibles amount to US$1,274 (December 31, 2009 — US$1,173), and are comprised of rights granted by the government — North-South Railroad of US$1,020 and off take-agreements of US$254.

Assets and liabilities held for sale

•

Aluminium

In connection with our strategy of active portfolio asset management, on May 2, 2010, we entered into an agreement with Norsk Hydro ASA (Hydro), to sell all our stakes in Albras — Alumínio Brasileiro S.A. (Albras), Alunorte — Alumina do Norte do Brasil S.A. (Alunorte) and Companhia de Alumina do Pará (CAP), 60% of our Paragominas bauxite mine and all our other Brazilian bauxite mineral rights (“Aluminum Business”).

For the participations of Albras, Alunorte, and CAP we will receive US$405 in cash, the assumption of US$700 of net debt by Hydro and a 22% stake in Hydro. For 60% of Paragominas and mineral rights we will receive US$600. We will sell the remaining 40% of Paragominas in two tranches, in 2013 and 2015, each for US$200 in cash. The sale is expected to be concluded in the near future.

The Company has assessed that the expected fair value of the transaction is higher than the net asset carrying value and accordingly has maintained the original amounts. Also, because of the significant influence retained by the Company on Hydro, aluminum was not considered a discontinued operation.

•

Kaolin

As part of our portfolio management, we have entered into negotiations to sell our kaolin net assets. In 2010, a part of our kaolin’s assets was sold and we remeasured the remaining assets at fair value less costs to sell, and the effect of realized and unrealized loss was recorded as discontinued operations in our Statement of Income in 2010. For 2010 the values are presented below for comparative purposes.


Assets held for sale
Inventories			366
Property, plant and equipment			4,844
Advances to suppliers — energy			496
Recoverable taxes			627
Other assets			654

Total			6,987


Liabilities associated with assets held for sale
Suppliers			290
Long term debt			705
Noncontrolling interests			1,885
Other			272

Total			3,152

Impairment of goodwill and long-lived assets

As described in note 3(g), we test goodwill and long-lived assets for impairment when events or changes in circumstances indicate that they might be impaired. For impairment test purposes, goodwill is allocated to reporting units and are tested at least annually.

No impairment charges were recognized in 2010 and 2009, as a result of the annual goodwill impairment tests performed.

Management determined cash flows based on approved financial budgets. Gross margin projections were based on past performance and management’s expectations of market developments. Information about sales prices are consistent with the forecasts included in industry reports, considering quoted prices when available and when appropriate. The discount rates used, reflect specific risks relating to the relevant assets in each reporting unit, depending on their composition and location.

Recognition of additional goodwill impairment charges in the future would depend on several estimates including market conditions, recent actual results and management’s forecasts. This information shall be obtained at the time when our assessment is to be updated. It is not possible at this time to determine if any such future impairment charge would result or, if it does, whether such charge would be material.

Investments in affiliated companies and joint ventures


	December 31, 2010										Investments						Equity in earnings (losses) of investee adjustments																		Dividends Received
								Net income									Three-month period ended (unaudited)									Year ended as of December, 31									Three-month period ended (unaudited)						Year ended as of December, 31
								(loss) of the									December			September			December												December		September		December
	Participation in capital (%)				Net equity			period			2010			2009			31, 2010			30, 2010			31, 2009			2010			2009			2008			31, 2010		30, 2010		31, 2009		2010		2009		2008
	Voting		Total
Bulk Material
Iron ore and pellets
Companhia Nipo-Brasileira de Pelotização — NIBRASCO (1)		51.11		51.00		334			93			171			132			12			30			(15	)		48			(12	)		84			—		3		—		3		20		—
Companhia Hispano-Brasileira de Pelotização — HISPANOBRÁS (1)		51.00		50.89		250			77			128			83			35			1			(3	)		40			(12	)		59			—		—		—		—		—		6
Companhia Coreano-Brasileira de Pelotização — KOBRASCO (1)		50.00		50.00		173			86			87			59			9			25			(9	)		43			(17	)		44			—		11		—		11		—		13
Companhia Ítalo-Brasileira de Pelotização — ITABRASCO (1)		51.00		50.90		169			33			86			90			14			1			4			18			12			34			—		—		—		25		—		—
Minas da Serra Geral SA — MSG		50.00		50.00		73			11			36			31			4			—			—			6			2			1			—		—		—		—		—		—
SAMARCO Mineração SA — SAMARCO (2)		50.00		50.00		1,058			1,596			561			673			261			247			58			798			299			315			575		225		140		950		190		300
Baovale Mineração SA — BAOVALE		50.00		50.00		61			8			31			30			2			—			1			4			(3	)		6			—		—		—		—		—		—
Zhuhai YPM Pellet e Co,Ltd — ZHUHAI		25.00		25.00		101			37			25			13			4			—			3			9			3			7			—		—		—		—		—		—
Tecnored Desenvolvimento Tecnológico SA		37.40		37.40		106			(28	)		40			46			—			—			—			(10	)		—			—			—		—		—		—		—		—

												1,165			1,157			341			304			39			956			272			550			575		239		140		989		210		319
Coal
Henan Longyu Resources Co Ltd		25.00		25.00		999			305			250			250			64			(26	)		19			76			74			79			—		44		—		83		—		27
Shandong Yankuang International Company Ltd		25.00		25.00		(106	)		(77	)		(27	)		(7	)		(7	)		(5	)		(4	)		(19	)		(18	)		(17	)		—		—		—		—		—		—

												223			243			57			(31	)		15			57			56			62			—		44		—		83		—		27
Base Metals
Bauxite
Mineração Rio do Norte SA — MRN		40.00		40.00		381			(4	)		152			143			(8	)		4			(32	)		(2	)		(10	)		62			10		—		13		10		42		99

Copper
Teal Minerals Incorpored		50.00		50.00		181			(20	)		90			80			3			—			(8	)		(10	)		(18	)		—			—		—		—		—		—		—

Nickel
Heron Resources Inc		—		—		—			—			7			8			—			—			—			—			—			—			—		—		—		—		—		—
Korea Nickel Corp		—		—		—			—			11			13			2			—			—			2			—			—			—		—		—		—		—		—
Others		—		—		—			—			5			9			—			—			—			—			—			(34	)		—		—		—		—		—		—

												23			30			2			—			—			2			—			(34	)		—		—		—		—		—		—
Logistic
LOG-IN Logística Intermodal SA		31.33		31.33		401			10			135			125			4			—			—			4			2			20			—		—		—		—		3		3
MRS Logística SA		37.86		41.50		1,233			217			511			468			28			26			65			90			141			113			37		—		90		72		124		34

												646			593			32			26			65			94			143			133			37		—		90		72		127		37
Others
Steel
California Steel Industries Inc — CSI		50.00		50.00		310			25			155			150			(1	)		(2	)		(2	)		12			(10	)		11			7		—		—		7		—		13
THYSSENKRUPP CSA Companhia Siderúrgica		26.87		26.87		6,846			(316	)		1,840			2,049			(75	)		(10	)		(6	)		(85	)		(6	)		—			—		—		—		—		—		—
Usinas Siderúrgicas de Minas Gerais SA — USIMINAS		—		—		—			—			—			—			—			—			—			—			8			18			—		—		—		—		7		18

												1,995			2,199			(76	)		(12	)		(8	)		(73	)		(8	)		29			7		—		—		7		7		31
Other affiliates and joint ventures
Vale Soluções em Energia (1)		51.00		51.00		226			(64	)		115			99			(33	)		—			—			(33	)		—			—			—		—		—		—		—		—
Others		—		—		—			—			88			41			(15	)		14			—			(4	)		(2	)		(8	)		—		—		—		—		—		—

												203			140			(48	)		14			—			(37	)		(2	)		(8	)		—		—		—		—		—		—


Total												4,497			4,585			303			305			71			987			433			794			629		283		243		1,161		386		513


(1)		Although Vale held a majority of the voting interest of investees accounted for under the equity method, existing veto rights held by noncontrolling shareholders under shareholder agreements preclude consolidation;

(2)		Investment includes goodwill of US$62 in December, 2009 and US$64 in December, 2010.

Short-term debt

Short-term borrowings outstanding on December 31, 2010 are from commercial banks for import financing denominated in US dollars with average annual interest rates of 2.0%.

Long-term debt


	Current liabilities				Long-term liabilities
	2010		2009		2010		2009
Foreign debt
Loans and financing denominated in the following currencies:
US dollars		2,384		1,543		2,530		4,332
Others		18		29		217		411
Fixed Rate Notes
US dollars		—		—		10,242		8,481
EUR		—		—		1,003		—
Debt securities		—		150		—		—
Perpetual notes		—		—		78		78
Accrued charges		233		198		—		—

		2,635		1,920		14,070		13,302

Brazilian debt
Brazilian Reais indexed to Long-term Interest Rate — TJLP/CDI and General Price Index-Market (IGPM)		76		62		3,891		3,433
Basket of currencies		1		1		125		3
Non-convertible debentures		—		861		2,767		2,592
US dollars denominated		1		—		738		568
Accrued charges		110		89		—		—

		188		1,013		7,521		6,596

Total		2,823		2,933		21,591		19,898

The long-term portion at December 31, 2010 falls due as follows:


2012			1,117
2013			3,311
2014			1,046
2015			745
2016			14,927
No due date			445


			21,591

At December 31, 2010 annual interest rates on long-term debt were as follows:


Up to 3%			5,645
3.1% to 5% (*)			2,185
5.1% to 7%			7,620
7.1% to 9% (**)			4,306
9.1% to 11% (**)			2,712
Over 11% (**)			1,866
Variable			80


			24,414


(*)		Includes Eurobonds. For this operation we have entered into derivative transactions at a cost of 4.71% per year in US dollars.

(**)		Includes non-convertible debentures and other Brazilian Real denominated debt that bear interest at the Brazilian Interbank Certificate of Deposit (CDI) and Brazilian Government Long-term Interest Rates (TJLP) plus a spread. For these operations we, have entered into derivative transactions to mitigate our exposure to the floating rate debt denominated in Brazilian Real, totaling US$5,835 of which US$5,461 has an original interest rate above 7.1% per year. The average cost after taking into account the derivative transactions is 3.13% per year in US dollars.

The average cost of all derivative transactions is 3.35% per year in US dollars.

Vale has non-convertible debentures at Brazilian Real denominated as follow:


	Quantity as of December 31, 2010						Balance
Non Convertible Debentures	Issued		Outstanding		Maturity	Interest	2010		2009
1st Series		150,000		150,000	November 20, 2010	101.75% CDI		—		869
2nd Series		400,000		400,000	November 20, 2013	100% CDI + 0.25%		2,429		2,318
Tranche “B”		5		5	No due date	6.5% p.a + IGP-DI		367		295


								2,796		3,482


Short-term portion								—		861
Long-term portion								2,767		2,592
Accrued chages								29		29


								2,796		3,482

The indexation indices/ rates applied to our debt were as follows:


								Year ended as of
	Three-month period ended (unaudited)							December, 31
	December		September		December
	31, 2010		30, 2010		31, 2009			2010		2009
TJLP — Long-Term Interest Rate (effective rate)		1.5		1.5		1.5			6.0		6.2
IGP-M — General Price Index — Market		3.2		2.1		(0.1	)		10.9		(1.7	)
Appreciation (devaluation) of Real against US dollar		1.7		6.3		2.1			4.7		34.2

In September 2010, Vale also entered into agreements with The Export-Import Bank of China and the Bank of China Limited for the financing to build 12 very large ore carriers with 400,000 dwt, comprising of facility in an amount up to US$1,229. The financing has a 13-year total term to be repaid, and the funds will be disbursed during the next 3 years according to the construction schedule. As of December 31, 2010, we had drawn US$291 under the facility.

In September 2010, we issued US$1 billion notes due 2020 and US$750 notes due 2039. The 2020 notes were sold at a price of 99.030% of the principal amount and will bear a coupon of 4.625% per year, payable semi-annually. The 2039 notes that were sold at a price of 110.872% of the principal amount will be consolidated with and form a single series with Vale Overseas US$1 billion 6.875% Guaranteed Notes due 2039 issued on November 10, 2009.

In June 2010, Vale established some facilities in the total amount of R $774 or US$430 with Banco Nacional de Desenvolvimento Economico Social — BNDES to finance the acquisition of certain equipment. As of December 31, 2010, we had drawn the equivalent of US$123 under this facility.

In June 2010, we entered into a bilateral pre-export finance agreement in the amount of US$500 and final tenor of 10 years.

In March 2010, we issued EUR750, equivalent to US$1 billion, of 8-year euronotes at a price of 99.564% of the principal amount. These notes will mature in March 2018 and will bear a coupon of 4.375% per year, payable annually.

		In January 2010, we redeemed all outstanding export receivables securitization 10-year notes issued in September 2000 at an interest rate of 8.926% per year and the notes issued in July 2003 at an interest rate of 4.43% per year. The outstanding principal amounts of those September 2010 notes were US$28 and for the July 2013 notes were US$122, totaling US$150 of debt redeemed.

		Credit Lines

We have revolving credit lines available under which amounts can be drawn down and repaid at the option of the borrower. At December 31, 2010, the total amount available under revolving credit lines was US$1,600, of which US$850 was granted to Vale International and the balance to Vale Canada Limited. As of December 31, 2010, neither Vale International nor Vale Canada Limited had drawn any amounts under these facilities, but US$114 of letters of credit were issued and remained outstanding pursuant Vale Canada Limited’s facility.

In January 2011 (subsequent period), we entered into an agreement with some commercial banks with the guarantee of the Italian credit agency, Servizi Assicurativi Del Commercio Estero S.p.A (SACE), to provide us with a US$300 facility with a final tenor of 10 years.

In October 2010, we entered into agreement with Export Development Canada (EDC), for the financing of our capital expenditure program. Pursuant to the agreement, EDC will provide a facility in an amount up to US$1 billion. US$500 will be available for investments in Canada and the remaining US$500 will be related to existing and future Canadian purchases of goods and services. As of December 2010, Vale had drawn US$250 under the facility.

In May 2008, we entered into framework agreements with the Japan Bank for International Cooperation in the amount of US$3 billion and Nippon Export and Investment Insurance in the amount of US$2 billion for the financing of mining, logistics and power generation projects. In November, 2009, Vale signed a US$300 export facility agreement, through its subsidiary, PT International Nickel Indonesia Tbk (PTI), with Japanese financial institutions using credit insurance provided by Nippon Export and Investment Insurance — NEXI, to finance the construction of the Karebbe hydroelectric power plant on the Larona river, island of Sulawesi, Indonesia. Through December 31, 2010, PT International had drawn down US$150 on this facility.

		In 2008, we established a credit line for R$7,300, or US$4 billion, with Banco Nacional de Desenvolvimento Econômico e Social — BNDES (the Brazilian National Development Bank) to support our investment program. As of December 31, 2010, we had drawn the equivalent of US$1,153 under this facility.

		Guarantee

On December 31, 2010, US$2 (December 31, 2009 — US$753) of the total aggregate outstanding debt were secured by receivables. The remaining outstanding debt in the amount of US$24,412 (December 31, 2009 — US$22,078) were unsecured.

Our principal covenants require us to maintain certain ratios, such as debt to EBITDA and interest coverage. We have not identified any events of noncompliance as of December 31, 2010.

Stockholders’ equity

Each holder of common and preferred class A stock is entitled to one vote for each share on all matters brought before stockholders’ meetings, except for the election of the Board of Directors, which is restricted to the holders of common stock. The Brazilian Government holds twelve preferred special shares which confer permanent veto rights over certain matters.

Both common and preferred stockholders are entitled to receive a mandatory minimum dividend of 25% of annual adjusted net income under Brazilian GAAP, once declared at the annual stockholders’ meeting. In the case of preferred stockholders, this dividend cannot be less than 6% of the preferred capital as stated in the statutory accounting records or, if greater, 3% of the Brazilian GAAP equity value per share.

In January 2011 (subsequent period), the Board of Directors approved the extraordinary payment from January 31, 2011, of interest on capital, in the total gross amount of US $1 billion, which corresponds to approximately US$0.191634056 per outstanding shares, common or preferred, of Vale issuance, referred to the anticipated distribution of income of the year of 2010, calculated on the balance of June 2010, this value is subject to the incidence of income tax withheld at the rate in force.

On October 14, 2010, the Board of Directors approved the following proposals: (i) payment of the second tranche of the minimum dividend of US$1,250 billion and (ii) payment of an additional dividend of US$500. The payments were made on October 29, 2010.

On September 23, 2010, the Board of Directors approved a share buy-back program. The shares are to be held in treasury for subsequent sale or cancellation, amounting up to US$2 billion and involving up to 64,810,513 common shares and up to 98,367,748 preferred shares. As of December 31, 2010 we had acquired 10,029,700 common shares and 21,125,300 preferred shares. The share buy-back program was completely executed in October 2010.

In April 2010, we paid US$1,250 as a first installment of the dividend to stockholders. The distribution was made in the form of interest on stockholders’ equity.

In June 2010, the notes series Rio and Rio P were converted into ADS and represent an aggregate of 49,305,205 common shares and 26,130,033 preferred class A shares respectively. The conversion was made using 75,435,238 treasury stocks held by the Company. The difference between the conversion amount and the book value of the treasury stocks of US$1,379 was accounted for in additional paid-in capital in the stockholder’s equity.

The outstanding issued mandatory convertible notes as of December 31, 2010, are as follows:

Date

Value

Headings

Emission

Expiration

Gross

Net of charges

Coupon

Tranches Vale and Vale P - 2012

July/2009

June/2012

942

934

6,75% p.a.

The notes pay a coupon quarterly and are entitled to an additional remuneration equivalent to the cash distribution paid to ADS holders. These notes were classified as a capital instrument, mainly due to the fact that neither the Company nor the holders have the option to settle the operation, whether fully or partially, with cash, and the conversion is mandatory, consequently, they were recognized as a specific component of shareholders’ equity, net of financial charges.

The funds linked to future mandatory conversion, net of charges are equivalent to the maximum of common shares and preferred shares, as follows. All the shares are currently held in treasury.

Maximum amount of action

Value

Headings

Common

Preferred

Common

Preferred

Tranches Vale and Vale P - 2012

18,415,859

47,284,800

293

649

In January 2011 (subsequent period), Vale paid additional remuneration to holders of mandatorily convertible notes, series VALE-2012 and VAPE.P-2012, R$0.7776700 and R$0.8994610, respectively, and in October 2010, VALE-2012 and VAPE P-2012, R$1.381517 and R$1.597876 per note, respectively.

In April, 2010, we paid additional interest to holders of mandatorily convertible notes: series RIO and RIO P, US$0.417690 and US$0.495742 per note, respectively, and series VALE-2012 and VALE.P-2012, US$0.602336 and US$0.696668 per note, respectively.

Brazilian law permits the payment of cash dividends only from retained earnings as stated in the BR GAAP statutory records and such payments are made in Brazilian reais. Pursuant to the Company’s statutory books, undistributed retained earnings at December 31, 2010, total US$26,150, comprising of the unrealized income and expansion reserves, which could be freely transferred to retained earnings and paid as dividends, if approved by the stockholders, after deducting of the minimum annual mandatory dividend, which is 25% of net income of the parent Company.

No withholding tax is payable on distribution of profits earned, except for distributions in the form of interest attributed to stockholders’ equity (Note 3 (p)).

Brazilian laws and our By-laws require that certain appropriations be made from retained earnings to reserve accounts on an annual basis, all determined in accordance with amounts stated in the statutory accounting records, as detailed below:

The purpose and basis of appropriation to such reserves is described below:

Unrealized income reserve — this represents principally our share of the earnings of affiliates and joint ventures, not yet received in the form of cash dividends.

Expansion reserve — this is a general reserve for expansion of our activities.

Legal reserve — this reserve is a requirement for all Brazilian corporations and represents the appropriation of 5% of annual net income up to a limit of 20% of capital stock all determined under Brazilian GAAP.

Fiscal incentive investment reserve — this reserve results from an option to designate a portion of income tax otherwise payable, for investment in government approved projects and is recorded in the year following that in which the taxable income was earned. As from 2000, this reserve basically contemplates income tax incentives (Note 6).

Basic and diluted earnings per share

Basic and diluted earnings per share amounts have been calculated as follows:


	Three-month period ended (unaudited)									Year ended as of December, 31
	December 31,			September 30,			December 31,
	2010			2010			2009			2010			2009			2008
Net income from continuing operations attributable to Company’s stockholders		5,917			6,030			1,519			17,407			5,349			13,218
Discontinued operations, net of tax		—			8			—			(143	)		—			—

Net income attributable to Company’s stockholders		5,917			6,038			1,519			17,264			5,349			13,218

Interest attributed to preferred convertible notes		(23	)		(11	)		(19	)		(72	)		(58	)		(46	)
Interest attributed to common convertible notes		(10	)		(5	)		(23	)		(61	)		(93	)		(96	)

Net income for the period adjusted		5,884			6,022			1,477			17,131			5,198			13,076


Basic and diluted earnings per share

Income available to preferred stockholders		2,231			2,314			559			6,566			1,967			5,027
Income available to common stockholders		3,579			3,635			876			10,353			3,083			7,823
Income available to convertible notes linked to preferred shares		53			53			21			153			75			78
Income available to convertible notes linked to common shares		21			21			21			59			73			148

Weighted average number of shares outstanding (thousands of shares) — preferred shares		1,997,276			2,056,473			2,030,998			2,035,783			2,030,700			1,946,454
Weighted average number of shares outstanding (thousands of shares) — common shares		3,204,203			3,230,765			3,181,727			3,210,023			3,181,706			3,028,817
Treasury preferred shares linked to mandatorily convertible notes		47,285			47,285			77,580			47,285			77,580			30,295
Treasury common shares linked to mandatorily convertible notes		18,416			18,416			74,998			18,416			74,998			56,582

Total		5,267,180			5,352,939			5,365,303			5,311,507			5,364,984			5,062,148


Earnings per preferred share		1.12			1.13			0.28			3.23			0.97			2.58
Earnings per common share		1.12			1.13			0.28			3.23			0.97			2.58
Earnings per convertible notes linked to preferred share (*)		1.61			1.35			0.52			4.76			1.71			4.09
Earnings per convertible notes linked to common share (*)		1.68			1.41			0.59			6.52			2.21			4.29

Continuous operations
Earnings per preferred share		1.12			1.13			—			3.25			—			—
Earnings per common share		1.12			1.13			—			3.25			—			—
Earnings per convertible notes linked to preferred share (*)		1.61			1.35			—			4.78			—			—
Earnings per convertible notes linked to common share (*)		1.68			1.41			—			6.57			—			—

Discontinued operations
Earnings per preferred share		—			—			—			(0.02	)		—			—
Earnings per common share		—			—			—			(0.02	)		—			—
Earnings per convertible notes linked to preferred share (*)		—			—			—			(0.02	)		—			—
Earnings per convertible notes linked to common share (*)		—			—			—			(0.05	)		—			—


(*)		Basic earnings per share only, as dilution assumes conversion

If the conversion of the convertible notes had been included in the calculation of diluted earnings per share they would have generated the following dilutive effect as shown below:


	Three-month period ended (unaudited)						Year ended as of December, 31
	December 31,		September 30,		December 31,
	2010		2010		2009		2010			2009		2008
Income available to preferred stockholders		2,307		2,378		599		6,791			2,100		5,151
Income available to common stockholders		3,610		3,660		920		10,473			3,249		8,067
Weighted average number of shares outstanding (thousands of shares) — preferred shares		2,044,561		2,103,758		2,108,578		2,083,068			2,108,280		1,976,749
Weighted average number of shares outstanding (thousands of shares) — common shares		3,222,619		3,249,181		3,256,725		3,228,439			3,256,704		3,085,399

Earnings per preferred share		1.13		1.13		0.28		3.26			1.00		2.61
Earnings per common share		1.12		1.13		0.28		3.24			1.00		2.61

Continuous operations
Earnings per preferred share		1.13		1.13		—		3.29			—		—
Earnings per common share		1.12		1.13		—		3.27			—		—

Discontinued operations
Earnings per preferred share		—		—		—		(0.03	)		—		—
Earnings per common share		—		—		—		(0.03	)		—		—

Pension plans

Vale sponsors a complementary pension plan with Defined Benefits characteristics, including substantially all employees, in which its benefits are calculated based on work time, age, contribution salary and complementation to the social security benefits. This plan is managed by VALIA — Vale's Pension Fund — and was funded by sponsor and employees contributions on a monthly basis, which were calculated based on periodic actuarial estimates.

In May 2000, it was implemented a new complementary pension plan with variable contribution characteristics, contemplating the programmed retirement income and the risk benefits (pension by death, retirement by disability and disability insurance). On this plan launching (Vale Mais Benefit Plan), it was offered to the active employees the opportunity to migrate to it. Over 98% of the active employees decided to do this migration. The Defined Benefit Plan is still running, covering almost exclusively retired participants and their beneficiaries.

Additionally, a specific group of ex-employees has the right to additional payments over the regular Velia’s benefits, through the “Abono Complementção” added by a post-retirement benefit that includes medical, dental and pharmaceutical assistance.

In 2010 with the purchase of fertilizer business, Vale consolidated commitments assumed with pension fund of defined benefit and other post-retirement benefits plans, as follow:

	•		Defined benefit plan maintained through the Fundação PETROBRAS de Seguridade Social — PETROS, for employees hired before September 1993 of Ultrafertil S.A., wholly owned subsidiary of Vale Fertilizers. This pension plan has 1.684, of which 1.466 are already receiving supplemental retirement and pension.

	•		Private Pension Plan, in the modality of Benefits Guarantee Fund, managed by Bradesco Previdência e Seguros S.A., aims to meet the eligible employees of Vale Fertilizantes and employees not served by PETROS of subsidiary Ultrafertil S.A.

	•		The Vale Fertilizantes and it’s wholly subsidiaries pay to employees who are eligible the fine FGTS according to union agreement and provide certain health benefits for retired employees who are eligible.

	•		Vale Fosfatados has a plan in a modality of defined contribution plan administered by Bungeprev, which guarantees a minimum benefit at retirement for eligible employees, moreover, the company provides certain health benefits for retired employees.

Upon the acquisition of Inco, we assumed benefits through defined benefit pension plans that cover essentially all its employees and post retirement benefits other than pensions that also provide certain health care and life insurance benefits for retired employees.

The following information details the status of the defined benefit elements of all plans in accordance with employers’ disclosure about pensions and other post retirement benefits” and employers’ accounting for defined benefit pension and other postretirement plans”, as amended.

We use a measurement date of December 31 for our pension and post retirement benefit plans.

a) Change in benefit obligation


	As of December 31
							2010									2009
	Overfunded			Underfunded			Underfunded			Overfunded			Underfunded			Underfunded
	pension plans			pension plans			other benefits			pension plans			pension plans			other benefits
Benefit obligation at beginning of year		3,661			3,923			1,431			2,424			3,031			1,069
Benefit initial recognized consolidation		385			12			58			—			—			—
Transfers		(936	)		936			—			—			—			—
Service cost		2			59			26			11			43			17
Interest cost		329			360			102			313			249			88
Plan amendment		(28	)		10			(2	)		—			—			—
Assumptions changes		87			65			6			—			—			—
Benefits paid/ Actual distribution		(237	)		(364	)		(78	)		(226	)		(279	)		(65	)
Effect of exchange rate changes		126			241			71			843			555			187
Actuarial loss		234			425			(13	)		296			324			135

Benefit obligation at end of year		3,623			5,667			1,601			3,661			3,923			1,431

b) Change in plan assets


													As of December 31
							2010									2009
	Overfunded			Underfunded			Underfunded			Overfunded			Underfunded			Underfunded
	pension plans			pension plans			other benefits			pension plans			pension plans			other benefits
Fair value of plan assets at beginning of year		4,996			3,229			11			3,043			2,507			9
Fair value initial recognized consolidation		451			10			—			—			—			—
Transfers		(866	)		866			—			—			—			—
Actual return on plan assets		1,094			541			1			1,121			402			1
Employer contributions		2			169			80			40			155			65
Benefits paid/ Actual distribution		(265	)		(364	)		(80	)		(226	)		(279	)		(65	)
Effect of exchange rate changes		173			194			1			1,018			444			1

Fair value of plan assets at end of year		5,585			4,645			13			4,996			3,229			11

Plan assets managed by Valia on December 31, 2010, 31 December 2009 and January 1, 2009 include investments in portfolio of our own stock of US$519, US$587 and US$188, investments in debentures worth US$64, US$69 and US$53 and equity investments from related parties amounting to US$81, US$164 and US$44, respectively. They also include on December 31, 2010, 31 December 2009 and January 1, 2009, US$4,150, US$3,261 and US$2,152 of securities of the Federal Government. The assets of the pension plans of the Vale Canada Limited in securities of the Government of Canada on December 31, 2010, 2009 and January 1, 2009, amounted to US$436, US$391and US$347, respectively. The assets of Vale Fertilizantes, Ultrafértil and Vale Fosfatados in December 31, 2010 in securities of the Federal Government worth US$158.

c) Funded Status and Financial Position


											As of December 31
						2010								2009
	Overfunded		Underfunded			Underfunded			Overfunded		Underfunded			Underfunded
	pension plans		pension plans			other benefits			pension plans		pension plans			other benefits
Noncurrent assets		1,962		—			—			1,335		—			—
Current liabilities		—		(35	)		(133	)		—		(62	)		(82	)
Non-current liabilities		—		(1,042	)		(1,400	)		—		(632	)		(1,338	)

Funded status		1,962		(1,077	)		(1,533	)		1,335		(694	)		(1,420	)

d) Assumptions used (nominal terms)

All calculations involve future actuarial projections about of some parameters, such as salaries, interest, inflation, the behavior of INSS benefits, mortality, disability, etc. No actuarial results can be analyzed without prior knowledge of the scenario of assumptions used in the assessment.

The economic actuarial assumptions adopted were formulated considering the long period for its maturing and should therefore be examined in that light. So, in the short term, they may not necessarily be realized.

In the evaluations were adopted the following economic assumptions:

Brazil

As of December 31

2010

2009

Overfunded

Underfunded

Overfunded

Underfunded

pension plans

other benefits

pension plans

other benefits

Discount rate

11.30% p.a.

11.08% p.a.

Expected return on plan assets

12.00% p.a.

11.50% p.a.

N/A

11.91% p.a.

10.50% p.a.

N/A

Rate of compensation increase — up to 47 years

8.15% p.a.

N/A

7.64% p.a.

N/A

Rate of compensation increase — over 47 years

5.00% p.a.

N/A

4.50% p.a.

N/A

Inflation

5.00% p.a.

4.50% p.a.

Health care cost trend rate

N/A

8.15% p.a.

N/A

7.63% p.a.

Foreign

As of December 31

2010

2009

Overfunded

Underfunded

Overfunded

Underfunded

pension plans

other benefits

pension plans

other benefits

Discount rate

N/A

6.21% p.a.

5,44% p.a.

N/A

6.21% p.a.

6.20% p.a.

Expected return on plan assets

N/A

7.02% p.a.

6.50% p.a.

N/A

7.00% p.a.

6.23% p.a.

Rate of compensation increase — up to 47 years

N/A

4.11% p.a.

3,58% p.a.

N/A

4.11% p.a.

3.58% p.a.

Rate of compensation increase — over 47 years

N/A

4.11% p.a.

3,58% p.a.

N/A

4.11% p.a.

3.58% p.a.

Inflation

N/A

2.00% p.a.

N/A

2.00% p.a.

Initial health care cost trend rate

N/A

7.35% p.a

N/A

7.60% p.a.

Ultimate health care cost trend rate

N/A

4.49% p.a

N/A

4.47% p.a.

e) Pension costs


	Three-month period ended (unaudited)
	December 31, 2010
	Overfunded			Underfunded			Underfunded other
	pension plans			pension plans			benefits
Service cost — benefits earned during the period		1			8			7
Interest cost on projected benefit obligation		85			91			23
Expected return on assets		(139	)		(76	)		—
Amortizations and (gain) / loss		—			6			(7	)
Net deferral		—			—			—

Net periodic pension cost (credit)		(53	)		29			23


	Three-month period ended (unaudited)
	September 30, 2010
	Overfunded			Underfunded			Underfunded other
	pension plans			pension plans			benefits
Service cost — benefits earned during the period		1			19			8
Interest cost on projected benefit obligation		104			92			26
Expected return on assets		(159	)		(83	)		—
Amortizations and (gain) / loss		—			1			—
Net deferral		(1	)		12			(9	)

Net periodic pension cost (credit)		(55	)		41			25


	Three-month period ended (unaudited)
	December 31, 2009
	Overfunded			Underfunded			Underfunded other
	pension plans			pension plans			benefits
Service cost — benefits earned during the period		4			14			5
Interest cost on projected benefit obligation		117			93			32
Expected return on assets		(161	)		(68	)		—
Amortizations and (gain) / loss		5			4			(19	)
Net deferral		—			1			3

Net periodic pension cost (credit)		(35	)		44			21


	Year ended of December, 31
	2010									2009
	Overfunded			Underfunded			Underfunded			Overfunded			Underfunded			Underfunded
	pension plans			pension plans			other benefits			pension plans			pension plans			other benefits
Service cost — benefits earned during the year		2			59			27			11			43			17
Interest cost on projected benefit obligation		329			361			97			313			255			88
Expected return on assets		(531	)		(321	)		—			(431	)		(202	)		(1	)
Amortizations and (gain) / loss		—			18			(14	)		14			3			(19	)
Net deferral		(1	)		—			—			—			14			(14	)

Net periodic pension costs (credit)		(201	)		117			110			(93	)		113			71

f) Accumulated benefit obligation


	2010									2009
	Overfunded			Underfunded			Underfunded			Overfunded			Underfunded			Underfunded
	pension plans			pension plans			other benefits			pension plans			pension plans			other benefits
Accumulated benefit obligation		3,612			5,540			1,601			3,645			3,826			1,431
Projected benefit obligation		3,623			5,667			1,601			3,661			3,923			1,431
Fair value of plan assets		(5,585	)		(4,645	)		(13	)		(4,996	)		(3,229	)		(11	)

g) Impact of 1% variation in assumed health care cost trend rate


	1% increase				1% decrease
	2010		2009		2010			2009
	Overfunded		Underfunded		Overfunded			Underfunded
	pension plans		pension plans		pension plans			pension plans
Accumulated postretirement benefit obligation (APBO)		213		199		(172	)		(163	)
Interest and service costs		22		18		(17	)		(14	)

h) Other Cumulative Comprehensive Income (Deficit)


										As of December 31
	2010									2009
	Overfunded			Underfunded			Underfunded			Overfunded			Underfunded			Underfunded
	pension plans			pension plans			other benefits			pension plans			pension plans			other benefits
Net transition (obligation) / asset		—			—			—			2			—			—
Net prior service (cost)/credit		—			(15	)		—			—			(8	)		—
Net actuarial (loss) / gain		243			(628	)		335			79			(330	)		301
Effect of exchange rate changes		(1	)		—			(1	)		(91	)		(7	)		(4	)
Deferred income tax		(82	)		201			(111	)		3			111			(94	)

Amounts recognized in other cumulative comprehensive income (deficit)		160			(442	)		223			(7	)		(234	)		203

i) Change in Other Cumulative Comprehensive Income (Deficit)


										As of December 31
	2010									2009
	Overfunded			Underfunded			Underfunded			Overfunded			Underfunded			Underfunded
	pension plans			pension plans			other benefits			pension plans			pension plans			other benefits
Net transition (obligation)/asset not yet recognized in NPPC at beginning of period		—			—			—			(12	)		—			—
Net actuarial (loss) / gain not yet recognized in NPPC at beginning of period		(18	)		(337	)		297			(261	)		(196	)		406
Transfers		8			(8	)		—			—			—			—
Deferred income tax at beginning of period		3			111			(94	)		93			83			(147	)

Effect of initial recognition of cumulative comprehensive Income (deficit)		(7	)		(234	)		203			(180	)		(113	)		259
Reclassifications
Amortization of net transition (obligation)/asset		—			—			—			14			—			—
Amortization of net actuarial (loss)/gain		—			(1	)		9			—			5			(19	)
Total net actuarial (loss)/gain arising during period		261			(277	)		11			340			(112	)		(142	)
Transfers		(8	)		8			—			—			—			—
Effect of exchange rate changes		(1	)		(28	)		17			(91	)		(42	)		52
Deferred income tax		(85	)		90			(17	)		(90	)		28			53

Total recognized in other cumulative comprehensive income (deficit)		160			(442	)		223			(7	)		(234	)		203

j) Plan assets

Brazilian Plans

The Investment Policy Statements of pension plans sponsored for Brazilian employees are based on a long term macroeconomic scenario and expected returns. An Investment Policy Statement was established for each obligation by following results of this strategic asset allocation study in 2009.

Plans asset allocations comply with pension funds local regulation issued by CMN — Conselho Monetário Nacional (Resolução CMN 3792/09). We are allowed to invest in six different asset classes, defined as Segments by the law, as follows: Fixed Income, Equity, Structured Investments (Alternative Investments and Infra-Structure Projects), International Investments, Real Estate and Loans to Participants.

The Investment Policy Statements are approved by the Board, the Executive Directors and two Investments Committees. The internal and external portfolio managers are allowed to exercise the investment discretion under the limitations imposed by the Board and the Investment Committees.

The pension fund has a risk management process with established policies that intend to identify measure and control all kind of risks faced by our plans, such as: market, liquidity, credit, operational, systemic and legal.

Foreign plans

The strategy for each of the pension plans sponsored by Vale Inco is based upon a combination of local practices and the specific characteristics of the pension plans in each country, including the structure of the liabilities, the risk versus reward trade-off between different asset classes and the liquidity required to meet benefit payments.

Overfunded pension plans

Brazilian Plans

The Defined Benefit Plan (the “Old Plan”) has the majority of its assets allocated in fixed income, mainly in Brazilian government bonds (like TIPS) and corporate long term inflation linked bonds with the objective to reduce the asset-liability volatility. The target is 55% of the total assets. This LDI (Liability Driven Investments) strategy, when considered together with Loans to Participants segment, aims to hedge plan’s liabilities against inflation risk and volatility. Other segments or asset classes have their targets, as follows: Fixed Income — 52%; Equity — 28%; Structured Investments — 6%; International Investments — 2%; Real estate — 7% and Loans to Participants — 5%. Structured Investments segment has invested only in Private Equity Funds in an amount of US$128 and US$87 at the end of December 31, 2010 and 2009, respectively.

The Investment Policy has the objective to achieve the adequate diversification, current income and long term capital growth through the combination of all asset classes described above to fulfill its obligations with the adequate level of risk. This plan has an average nominal return of 20.87% p.a. in dollars terms in the last 11 years.

- Fair value measurements by category — Overfunded Plans


	As of December 31
	2010									2009
Asset by category	Total			Level 1		Level 2		Level 3		Total			Level 1		Level 2		Level 3
Cash and cash equivalents		6			6		—		—		1			1		—		—
Accounts Receivable		81			81		—		—		16			16		—		—
Equity securities — liquid		1,321			1,321		—		—		1,303			1,303		—		—
Equity securities — non-liquid		75			—		75		—		64			—		64		—
Debt securities — Corporate bonds		229			—		229		—		143			—		143		—
Debt securities — Financial Institutions		191			—		191		—		226			—		226		—
Debt securities — Government bonds		2,114			2,114		—		—		1,744			1,744		—		—
Investment funds — Fixed Income		1,610			1,610		—		—		2,037			2,037		—		—
Investment funds — Equity		513			513		—		—		577			577		—		—
International investments		23			23		—		—		—			—		—		—
Structured investments — Private Equity funds		128			—		—		128		97			—		—		97
Structured investments — Real estate funds		19			—		—		19		—			—		—		—
Real estate		288			—		—		288		249			—		—		249
Loans to Participants		182			—		—		182		282			—		—		282

Total		6,780			5,668		495		617		6,739			5,678		433		628

Funds not related to risk plans		(1,195	)								(1,743	)

Fair value of plan assets at end of year		5,585									4,996

- Fair value measurements using significant unobservable inputs — Level 3 (Overfunded)


	As of December 31
	2010															2009
	Private Equity			Real Estate						Loans to						Private Equity						Loans to
	Funds			Funds			Real State			Participants			Total			Funds			Real State			Participants		Total
Beginning of the year		97			—			249			282			628			72			156			229		457


Actual return os plan assets		(3	)		1			49			25			72			30			21			123		91
Initial recognized consolidation of Fosfertil		—			—			22			5			27			—			—			—		—
Assets sold during the period		(3	)		(1	)		(24	)		(75	)		(103	)		(57	)		(11	)		(171		(180	)
Assets purchases, sales and settlemnts		43			—			25			62			130			28			29			45		102
Cumulative translation adjustment		4			1			9			7			21			24			54			78		156
Transfers in and/or out of Level 3		(10	)		18			(42	)		(124	)		(158	)		—			—			—		—


End of the year		128			19			288			182			617			97			249			282		628

The return target for private equity assets in 2011 is 11.51%. The target allocation is 6%, ranging between 2% and 10%. These investments have a longer investment horizon and low liquidity that aim to profit from economic growth, especially in the infrastructure sector of the Brazilian economy. Usually non-liquid assets’ fair value is established considering: acquisition cost or book value. Some private equity funds, alternatively, apply the following methodologies: discounted cash flows analysis or analysis based on multiples.

The return target for loans to participants in 2011 is 16.05%. The fair value pricing of these assets includes provisions for non-paid loans, according to the local pension fund regulation.

The return target for real estate assets in 2011 is 12.89%. Fair value for these assets is considered book value. The pension fund hires companies specialized in real estate valuation that do not act in the market as brokers. All valuation techniques follow the local regulation.

Underfunded pension plans

Brazilian Obligation

The Vale Mais Plan (the “New Plan”) has obligations with characteristics of defined benefit and defined contribution plans, as mentioned. The majority of its investments is in fixed income. It also implemented a LDI (Liability Driven Investments) strategy to reduce asset-liability volatility of the defined benefits plan’s component by using inflation linked bonds (like TIPS). The target allocation is 55% in fixed income. Other segments or asset classes has their targets, as follows: Fixed Income — 59%; Equity — 24%; Structured Investments — 2%; International Investments — 1%; Real estate — 4% and Loans to Participants — 10%. Structured Investments segment has invested only in Private Equity Funds in an amount of US$15 and US$10 at the end of December 31, 2010 and 2009, respectively.

The Defined Contribution Vale Mais component offers three options of asset classes mix that can be chosen by participants. The options are: Fixed Income — 100%; 80% Fixed Income and 20% Equities and 65% Fixed Income and 35% Equities. Loan to participants is included in the fixed income options. Equities management is done through investment fund that targets Ibovespa index.

The Investment Policy Statement has the objective to achieve the adequate diversification, current income and long term capital growth through the combination of all asset classes described above to fulfill its obligations with the adequate level of risk. This obligation and targets with the adequate level of risk. This plan has an average nominal return of 15.67% p.a. in dollars terms in the last 7 years.

The obligation of the “Abono Complementcäo” plan has an exclusive allocation in fixed income. It was also used a LDI (Liability Driven Investments) strategy for this plan. Most of the resources were invested in long term Brazilian government bonds (similar to TIPS) and inflation linked corporate bonds with the objective of minimizing asset-liability volatility and reduce inflation risk.

The Investment Policy Statement has the objective to achieve the adequate diversification, current income and long term capital growth to fulfill its obligations with the adequate level of risk. This obligation has an average nominal return of 16.28% per year in local currency in the last 5 years.

Foreign plans

For all pension plans except PT Inco, this has resulted in a target asset allocation of 60% in equity investments and 40% in fixed income investments, with all securities being traded in the public markets. Fixed income investments are in domestic bonds for each plan’s market and involve a mixture of government and corporate bonds. Equity investments are primarily global in nature and involve a mixture of large, mid and small capitalization companies with a modest explicit investment in domestic equities for each plan. The Canadian plans also use a currency hedging strategy (each developed currency’s exposure is 50% hedged) due to the large exposure to foreign securities. For PT Inco, the target allocation is 20% equity investment and the remainder in fixed income, with the vast majority of these investments being made within the domestic market.

- Fair value measurements by category — Underfunded Pension Plans


	As of December 31
	2010						2009
Cash and cash equivalents		52		22	30	—		33		12	21	—
Accounts Receivable		20		20	—	—		—		—	—	—
Equity securities — liquid		1,617		1,617	—	—		1,347		1,347	—	—
Equity securities — non-liquid		11		6	5	—		—		—	—	—
Debt securities — Corporate bonds		55		—	55	—		12		—	12	—
Debt securities — Financial Institutions		120		—	120	—		19		—	19	—
Debt securities — Government bonds		786		370	416	—		445		50	395	—
Investment funds — Fixed Income		1,799		1,079	720	—		988		287	701	—
Investment funds — Equity		437		91	346	—		409		87	322	—
International investments		6		3	3	—		—		—	—	—
Investment funds — Private Equity		216		216	—	—		—		—	—	—
Structured investments — Private Equity funds		15		—	—	15		—		—	—	—
Structured investments — Real estate funds		1		—	—	1		—		—	—	—
Real estate		37		—	—	37		—		—	—	—
Loans to Participants		151		—	—	151		—		—	—	—

Total		5,323		3,424	1,695	204		3,253		1,783	1,470	—

Funds not related to risk plans		(678	)					(24	)

Fair value of plan assets at end of year		4,645						3,229

- Fair value measurements using significant unobservable inputs — Level 3 (Underfunded)


	As of December 31
	2010														2009
	Private Equity			Real Estate					Loans to						Private Equity				Loans to
	Funds			Funds		Real State			Participants			Total			Funds		Real State		Participants		Total
Beginning of the year		—			—		—			—			—			—		—		—		—

Actual return os plan assets		(2	)		—		4			20			22			—		—		—		—
Assets sold during the period		7			—		(2	)		(57	)		(52	)		—		—		—		—
Assets purchases, sales and settlemnts		—			—		10			58			68			—		—		—		—
Cumulative translation adjustment		—			—		1			6			7			—		—		—		—
Transfers in and/or out of Level 3		10			1		24			124			159			—		—		—		—

End of the year		15			1		37			151			204			—		—		—		—

The return target for private equity assets in 2011 is 11.51% in local currency. The Vale Mais plan target allocation is 2%, ranging between 1% and 10%. These investments have a longer investment horizon and low liquidity that aim to profit from economic growth, especially in the infra-structure sector of the Brazilian economy. Usually non-liquid assets’ fair value is established considering: acquisition cost or book value. Some private equity funds can, alternatively, apply to the following valuation methodologies: discounted cash flows analysis or analysis based on multiples.

The return target for the loan to participants segment in 2011 is 16.05%. In the fair value of these assets non paid loans provisions are considered, according to local pension fund legislation.

The return target for the real estate segment in 2011 is 12.89%. The fair value of these assets is the book value. We hired specialized companies in property valuation that are not in the market as brokers. All the valuation techniques are under the local legislation.

Underfunded other benefits

- Fair value measurements by category — Other Benefits


	As of December 31
	2010			2009
Asset by category		Total	Level 1		Total	Level 1
Cash		13	13		11	11


Total		13	13		11	11

k) Cash flows contributions

Employer contributions expected for 2011 are US$310.

l) Estimated future benefit payments

The benefit payments, which reflect future service, are expected to be made as follows:


	As of December 31, 2010
	Overfunded		Underfunded		Underfunded other
	pension plans		pension plans		benefits		Total
2011		271		399		87		757
2012		274		398		91		763
2013		273		396		94		763
2014		275		392		96		763
2015		275		389		98		762
2016 and thereafter		1,317		1,913		488		3,718

20 Long-term incentive compensation plan

Under the terms of the long-term incentive compensation plan, the participants, restricted to certain executives, may elect to allocate part of their annual bonus to the plan. The allocation is applied to purchase preferred shares of Vale, through a predefined financial institution, at market conditions and with no benefit provided by Vale.

The shares purchased by each executive are unrestricted and may, at the participant’s discretion, be sold at any time. However, the shares must be held for a three-year period and the executive must be continually employed by Vale during that period. The participant then becomes entitled to receive from Vale a cash payment equivalent to the total amount of shares held, based on the market rates. The total shares linked to the plan at December 31, 2010 and December 31, 2009, are 2,458,627 and 1,809,117, respectively.

Additionally, as a long-term incentive certain eligible executives have the opportunity to receive at the end of the triennial cycle, a certain number of shares at market rates, based on an evaluation of their career and performance factors measured as an indicator of total return to stockholders.

We account for the compensation cost provided to our executives under this long-term incentive compensation plan, following the requirements for Accounting for Stock-Based Compensation. Liabilities are measured at each reporting date at fair value, based on market rates. Compensation costs incurred are recognized, over the defined three-year vesting period. At December 31, 2010, December 31, 2009 and December 31, 2008, we recognized a liability of US$120, US$72 and US$7, respectively, through the Statement of Income.

21 Commitments and contingencies

a) In connection with a tax-advantaged lease financing arrangement sponsored by the French Government, we provided certain guarantees on December 30, 2004 on behalf of Vale New Caledonia S.A.S. (VNC) pursuant to which we guaranteed payments due from VNC of up to a maximum amount of US$100 (“Maximum Amount”) in connection with an indemnity. This guarantee was provided to BNP Paribas for the benefit of the tax investors of GniFi, the special purpose vehicle which owns a portion of the assets in our nickel cobalt processing plant in New Caledonia (“Girardin Assets”). We also provided an additional guarantee covering the payments due from VNC of (a) amounts exceeding the Maximum Amount in connection with the indemnity and (b) certain other amounts payable by VNC under a lease agreement covering the Girardin Assets. This guarantee was provided to BNP Paribas for the benefit of GniFi.

Another commitment incorporated in the tax—advantaged lease financing arrangement was that the Girardin Assets would be substantially complete by December 31, 2010. In light of the delay in the start up of VNC processing facilities, the December 31, 2010 substantially complete date was not met. Management proposed an extension to the substantially complete date from December 31, 2010 to December 31, 2011. Both the French government authorities and the tax investors have agreed to this extension, although a signed waiver has not yet been received from the tax investors. The French tax authorities issued their signed extension on December 31, 2011. Accordingly the benefits of the financing structure are fully expected to be maintained and we anticipate that there will be no recapture of the tax advantages provided under this financing structure.

In 2009, two new bank guarantees totaling US$58 (€43 million) as at December 31, 2010 were established by us on behalf of VNC in favor of the South Province of New Caledonia in order to guarantee the performance of VNC with respect to certain environmental obligations in relation to the metallurgical plant and the Kwe West residue storage facility.

Sumic Nickel Netherlands B.V. (“Sumic”), a 21% stockholder of VNC, has a put option to sell to us 25%, 50%, or 100% of the shares they own of VNC. The put option can be exercised if the defined cost of the initial nickel-cobalt development project, as measured by funding provided to VNC, in natural currencies and converted to U.S. dollars at specified rates of exchange, in the form of Girardin funding, shareholder loans and equity contributions by stockholders to VNC, exceeded US$4.2 billion and an agreement cannot be reached on how to proceed with the project. On February 15, 2010, we formally amended our agreement with Sumic to increase the threshold to approximately US$4.6 billion at specified rates of exchange. On May 27, 2010 the threshold was reached and on October 22, 2010, we have signed an agreement to extend the put option date into the first half of 2011. On January 25, 2011 a further extension to the agreement was signed extending the put option date into the second half of 2011.

We provided a guarantee covering certain termination payments due from VNC to the supplier under an electricity supply agreement (“ESA”) entered into in October 2004 for the VNC project. The amount of the termination payments guaranteed depends upon a number of factors, including whether any termination of the ESA is a result of a default by VNC and the date on which an early termination of the ESA were to occur. During the first quarter of 2010, the supply of electricity under the ESA to the project began and the guaranteed amount now decreases over the life of the ESA from its maximum amount. As at December 31, 2010 the guarantee was US$169 (€126 million).

In February 2009, we and our subsidiary, Vale Newfoundland and Labrador Limited (“VNL”), entered into a fourth amendment to the Voisey’s Bay Development agreement with the Government of Newfoundland and Labrador, Canada, that permitted VNL to ship up to 55,000 metric tonnes of nickel concentrate from the Voisey’s Bay area mines. As part of the agreement, VNL agreed to provide the Government of Newfoundland and Labrador financial assurance in the form of letters of credit, each in the amount of US$16 (CAD$16 million) for each shipment of nickel concentrate shipped out of the province from January 1, 2009 to August 31, 2009. The amount of this financial assurance was US$110 (CAD$112 million) based on seven shipments of nickel concentrate and as of December 31, 2010, US$11 (CAD$11 million) remains outstanding.

As at December 31, 2010, there was an additional US$114 in letters of credit issued and outstanding pursuant to our syndicate revolving credit facility, as well as an additional US$39 of letters of credit and US$57 in bank guarantees that were issued and outstanding. These are associated with environmental reclamation and other operating associated items such as insurance, electricity commitments and import and export duties.

b) We and our subsidiaries are defendants in numerous legal actions in the normal course of business. Based on the advice of our legal counsel, management believes that the amounts recognized are sufficient to cover probable losses in connection with such actions.

The provision for contingencies and the related judicial deposits are composed as follows:


	December 31, 2010				December 31, 2009
	Provision for				Provision for
	contingencies		Judicial deposits		contingencies		Judicial deposits
Labor and social security claims		748		874		657		657
Civil claims		510		410		582		307
Tax — related actions		746		442		489		175
Others		39		5		35		4

		2,043		1,731		1,763		1,143

Labor and social security related actions principally comprise of claims by Brazilian current and former employees for (i) payment of time spent traveling from their residences to the work-place, (ii) additional health and safety related payments and (iii) various other matters, often in connection with disputes about the amount of indemnities paid upon dismissal and the one-third extra holiday pay.

Civil actions principally relate to claims made against us by contractors in Brazil in connection with losses alleged to have been incurred by them as a result of various past Government economic plans, during which full inflation indexation of contracts was not permitted, as well, as for accidents and land appropriation disputes.

Tax related actions principally comprise of challenges initiated by us, on certain taxes on revenues and uncertain tax positions. We continue to vigorously pursue our interests in all the actions but recognize that we probably will incur some losses in the final instance, for which we have made provisions.

Judicial deposits are made by us following court requirements in order to be entitled to either initiate or continue a legal action. These amounts are released to us upon receipt of a final favorable outcome from the legal action, and in the case of an unfavorable outcome, the deposits are transferred to the prevailing party.

Contingencies settled during the three-month periods ended December 31, 2010, September 30, 2010 and December 31, 2009, totaled US$224, US$67 and US$236, respectively. Provisions recognized in the three-month periods ended December 31, 2010, September 30, 2010 and December 31, 2009, totaled US$41, US$68 and US$294, respectively, classified as other operating expenses.

Contingencies settled during the year ended 2010, 2009 and December 31, 2008, totaled US$352, US$236 and US$856, respectively. Provisions recognized in the year ended 2010, 2009 and December 31, 2008, totaled US$112, US$294 and US$331, respectively, classified as other operating expenses.

In addition to the contingencies for which we have made provisions, we are defendants in claims where in our opinion, and based on the advice of our legal counsel, the likelihood of loss is reasonably possible but not probable, in the total amount of US$4,787 at December 31, 2010, and for which no provision has been made (2009 — US$4,190).

c) At the time of our privatization in 1997, the Company issued debentures to its then-existing stockholders, including the Brazilian Government. The terms of the debentures, were set to ensure that the pre-privatization stockholders, including the Brazilian Government would participate in possible future financial benefits that could be obtained from exploiting certain mineral resources.

A total of 388,559,056 Debentures were issued at a par value of R$0.01 (one cent), whose value will be restated in accordance with the variation in the General Market Price Index (IGP-M), as set forth in the Issue Deed.

The debentures holders have the right to receive premiums, paid semiannually, equivalent to a percentage of net revenues from specific mine resources as set forth in the indenture.

In April and October 2010 we paid remuneration on these debentures of US$5 and US$5, respectively.

d) We are committed under a take-or-pay agreement to purchase approximately 23,620 thousand metric tons of bauxite from Mineração Rio do Norte S.A. — MRN at a formula driven price, calculated based on the current London Metal Exchange — LME quotation for aluminum. Based on a market price of US$24.50 per metric ton as of December 31, 2010, this arrangement represents the following total commitment per metric ton as of December 31, 2010:


2011			141
2012			145
2013			146
2014			146

			578

e) Description of Leasing Arrangements

Part of our railroad operations include leased facilities. The 30-year lease, renewable for a further 30 years, expires in August, 2026 and is classified as an operating lease. At the end of the lease term, we are required to return the concession and the leased assets. In most cases, management expects that in the normal course of business, leases will be renewed.

The following is a schedule by year of future minimum rental payments required under the railroad operating leases that have initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2010.


2011			90
2012			90
2013			90
2014			90
2015 thereafter			1,068

Total minimum payments required			1,428

The total expenses of operating leases for the years ended December 31, 2010, 2009 and 2008 were US$90, US$80 and US$53, respectively.

During 2008, we entered into operating lease agreements with our joint ventures Nibrasco, Itabrasco and Kobrasco, under wich we leased four pellet plants. The lease terms are from 5 to 30 years.

The following is a schedule by year of future minimum rental payments required under the pellet plants operating leases that have initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2010:


2011			107
2012			107
2013			107
2014			107
2015 thereafter			1,092

Total			1,520

The total expenses of operating leases for the years ended December 31, 2010, 2009 and 2008 was US$107, US$114 and US$49, respectively.

f) Asset retirement obligations

		We use various judgments and assumptions when measuring our asset retirement obligations.

		Changes in circumstances, law or technology may affect our estimates and we periodically review the amounts accrued and adjust them as necessary. Our accruals do not reflect unasserted claims because we are currently not aware of any such issues. Also the amounts provided are not reduced by any potential recoveries under cost sharing, insurance or indemnification arrangements because such recoveries are considered uncertain.

		The changes in the provisions for asset retirement obligations are as follows:


	Three-month period ended (unaudited)									Year ended as of December, 31
	December 31,			September 30,			December 31,
	2010			2010			2009			2010			2009
Beginning of period		1,230			1,162			1,102			1,116			887
Accretion expense		34			21			31			113			75
Liabilities settled in the current period		(33	)		(2	)		(21	)		(45	)		(46	)
Revisions in estimated cash flows (*)		110			(11	)		(14	)		125			(23	)
Cumulative translation adjustment		27			60			18			59			223

End of period		1,368			1,230			1,116			1,368			1,116


Current liabilities		75			79			89			75			89
Non-current liabilities		1,293			1,151			1,027			1,293			1,027

Total		1,368			1,230			1,116			1,368			1,116


(*)		Includes US$44 for the purchase of Vale Fertilizantes S.A. and Vale Fosfatados S.A.

22		Other expenses

		The income statement line “Other operating expenses” totaled US$2,205 for the year ended December 31, 2010, (US$1,522 in 2009 and US$1,254 in 2008). It includes pre operational expenses US$360 (US$0 in 2009 and US$0 in 2008), loss of material US$108 (US$9 in 2009 and US$199 in 2008) and idle capacity and stoppage operations expenses US$757 (US$880 in 2009 and US$0 in 2008). In 2008, we also had US$204 of expenses relating to tax assessments on transportation services and US$65 of expenses relating to write-off of intangible asset (patent rights).

23		Fair value disclosure of financial assets and liabilities

		The Financial Accounting Standards Board, through Accounting Standards Codification and Accounting Standards Updates, defines fair value and set out a framework for measuring fair value, which refers to valuation concepts and practices and requires certain disclosures about fair value measurements.

a) Measurements

		The pronouncements define fair value as the exchange price that would be received for an asset, or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants on the measurement date. In determining fair value, the Company uses various methods including market, income and cost approaches. Based on these approaches, the Company often utilizes certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and or the risks inherent in the inputs to the valuation technique.

		These inputs can be readily observable, market corroborated, or generally unobservable inputs. The Company utilizes techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Under this standard, those inputs used to measure the fair value are required to be classified on three levels. Based on the characteristics of the inputs used in valuation techniques the Company is required to provide the following information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value are classified and disclosed as follows:

			Level 1 — Unadjusted quoted prices on an active, liquid and visible market for identical assets or liabilities that are accessible at the measurement date;

			Level 2 — Quoted prices for identical or similar assets or liabilities on active markets, inputs other than quoted prices that are observable, either directly or indirectly, for the term of the asset or liability;

			Level 3 — Assets and liabilities, which quoted prices do not exist, or those prices or valuation techniques are supported by little or no market activity, unobservable or illiquid. At this point, fair market valuation becomes highly subjective.

b) Measurements on a recurring basis

The description of the valuation methodologies used for recurring assets and liabilities measured at fair value in the Company’s Consolidated Balance Sheet at December 31, 2010 and 2009 are summarized below:

•

Available-for-sale securities

They are securities that are not classified either as held-for-trading or as held-to-maturity for strategic reasons and have readily available market prices. We evaluate the carrying value of some of our investments in relation to publicly quoted market prices when available. When there is no market value, we use inputs other than quoted prices.

•

Derivatives

The market approach is used to estimate the fair value of the swaps discounting their cash flows using the interest rate of the currency they are denominated and, also for the commodities contracts, since the fair value is computed by using forward curves for each commodity.

	•		Debentures

			The fair value is measured by the market approach method, and the reference price is available on the secondary market.

The tables below present the balances of assets and liabilities measured at fair value on a recurring basis as follows:


	As of December 31, 2010
	Carrying amount			Fair value			Level 1		Level 2
Unrealized gain on derivatives		257			257			1		256
Debentures		(1,284	)		(1,284	)		—		(1,284	)


	As of December 31, 2009
	Carrying amount			Fair value			Level 1		Level 2
Available-for-sale securities		17			17			17		—
Unrealized gains on derivatives		832			832			—		832
Debentures		(752	)		(752	)		—		(752	)

c) Measurements on a non-recurring basis

The Company also has assets under certain conditions that are subject to measurement at fair value on a non-recurring basis. These assets include goodwill and assets acquired and liabilities assumed in business combinations. During the year ended December 31, 2010, we have not recognized any additional impairment for those items.

d) Financial Instruments

		Long-term debt

		The valuation method used to estimate the fair value of our debt is the market approach for the contracts that are quoted on the secondary market, such as bonds and debentures. The fair value of both fixed and floating rate debt is determined by discounting future cash flows of Libor and Vale’s bonds curves (income approach).

		Time deposits

		The method used is the income approach, through the prices available on the active market. The fair value is close to the carrying amount due to the short-term maturities of the instruments.

		Our long-term debt is reported at amortized cost, and the income of time deposits is accrued monthly according to the contract rate. The estimated fair value measurement is disclosed as follows:


	As of December 31, 2010
	Carrying amount			Fair value			Level 1			Level 2
Time deposits		1,793			1,793			—			1,793
Long-term debt (less interests) (*)		(24,071	)		(25,264	)		(19,730	)		(5,534	)


	As of December 31, 2009
	Carrying amount			Fair value			Level 1			Level 2
Time deposits		3,747			3,747			—			3,747
Long-term debt (less interests) (*)		(22,544	)		(23,344	)		(12,424	)		(10,920	)


(*)		Less accrued charges of US$343 and US$287 as of December 31, 2010 and December 31, 2009, respectively.

24		Segment and geographical information

		We adopt disclosures about segments of an enterprise and related information with respect to the information we present about our operating segments. The relevant standard requiring such disclosures introduced a “management approach” concept for reporting segment information, whereby such information is required to be reported on the basis that the chief decision-maker uses internally for evaluating segment performance and deciding how to allocate resources to segments. In line with our strategy to become a leading global player in the fertilizer business, on May 27, 2010 we acquired 58.6% of the equity capital of Fertilizantes Fosfatados S.A. — Fosfertil (Fosfertil) and the Brazilian fertilizer assets of Bunge Participações e Investimentos S.A. (BPI), currently renamed Vale Fosfatados S.A.. Considering this new segment acquisition, fertilizers, and the related reorganization that occurred for the operating segments are:

		Bulk Material — comprised of iron ore mining and pellet production, as well as our Brazilian Northern and Southern transportation systems, including railroads, ports and terminals, as they pertain to mining operations. Manganese mining and ferroalloys are also included in this segment.

		Base Metals — comprised of the production of non-ferrous minerals, including nickel (co-products and by-products), copper and aluminum — comprised of aluminum trading activities, alumina refining and aluminum metal smelting and investments in joint ventures and affiliates engaged in bauxite mining.

		Fertilizers — comprised of the three important groups of nutrients: potash, phosphates and nitrogen. This business is being formed through a combination of acquisitions and organic growth.

		Logistic Services — comprised of our transportation systems as they pertain to the operation of our ships, ports and railroads for third-party cargos.

		Others — comprised of our investments in joint ventures and affiliates engaged in other businesses.

		Information presented to senior management with respect to the performance of each segment is generally derived directly from the accounting records maintained in accordance with accounting practices adopted in Brazil together with certain minor inter-segment allocations.

Consolidated net income and principal assets are reconciled as follows:

Results by segment — before eliminations (aggregated)


	Three-month period ended (unaudited)
	December 31, 2010																					September 30, 2010																					December 31, 2009
	Bulk			Base																		Bulk			Base																		Bulk			Base
	Material			Metals			Fertilizers			Logistic			Others			Elimination			Consolidated			Material			Metals			Fertilizers			Logistic			Others			Elimination			Consolidated			Material			Metals			Fertilizers			Logistic			Others			Elimination			Consolidated
RESULTS
Gross revenues		18,709			3,760			862			456			311			(8,891	)		15,207			20,013			2,533			842			462			188			(9,542	)		14,496			6,789			2,418			109			337			216			(3,328	)		6,541
Cost and expenses		(11,359	)		(2,792	)		(776	)		(400	)		(230	)		8,891			(6,666	)		(11,960	)		(2,012	)		(788	)		(346	)		(184	)		9,542			(5,748	)		(4,946	)		(2,143	)		(59	)		(280	)		(243	)		3,328			(4,343	)
Research and development		(103	)		(109	)		(39	)		(30	)		(20	)		—			(301	)		(70	)		(68	)		(21	)		(23	)		(34	)		—			(216	)		(73	)		(47	)		(19	)		(17	)		(140	)		—			(296	)
Depreciation, depletion and amortization		(421	)		(480	)		(128	)		(41	)		(3	)		—			(1,073	)		(379	)		(224	)		(48	)		(32	)		(13	)		—			(696	)		(393	)		(354	)		(10	)		(40	)		(2	)		—			(799	)

Operating income		6,826			379			(81	)		(15	)		58			—			7,167			7,604			229			(15	)		61			(43	)		—			7,836			1,377			(126	)		21			—			(169	)		—			1,103
Financial income		696			198			17			3			9			(806	)		117			550			194			4			10			1			(703	)		56			599			(511	)		—			—			707			(730	)		65
Financial expenses		(1,160	)		(503	)		(7	)		(2	)		(60	)		806			(926	)		(995	)		(391	)		(5	)		(16	)		(37	)		703			(741	)		(888	)		313			—			(10	)		(693	)		730			(548	)
Gains (losses) on derivatives, net		486			(13	)		—			—			—			—			473			642			(137	)		—			—			(5	)		—			500			312			(15	)		—			—			(1	)		—			296
Foreign exchange and monetary gains (losses), net		(46	)		80			45			(21	)		(7	)		—			51			89			157			18			(4	)		(3	)		—			257			(21	)		40			—			1			(3	)		—			17
Discontinued operations, net of tax		—			—			—			—			—			—			—			—			8			—			—			—			—			8			—			—			—			—			—			—			—
Gain on sale of assets		—			—			—			—			—			—			—			—			—			—			—			—			—			—			(70	)		(120	)		—			—			—			—			(190	)
Equity in results of affiliates and joint ventures and change in provision for losses on equity investments		403			9			—			32			(141	)		—			303			302			(26	)		—			27			2			—			305			54			(50	)		—			66			1			—			71
Income taxes		(1,268	)		125			(9	)		9			6			—			(1,137	)		(2,116	)		(26	)		(6	)		2			—			—			(2,146	)		428			325			—			3			—			—			756
Noncontrolling interests		(2	)		(144	)		19			—			(4	)		—			(131	)		5			(46	)		—			—			4			—			(37	)		(21	)		(49	)		—			—			19			—			(51	)

Net income attributable to the Company’s stockholders		5,935			131			(16	)		6			(139	)		—			5,917			6,081			(38	)		(4	)		80			(81	)		—			6,038			1,770			(193	)		21			60			(139	)		—			1,519

Sales classified by geographic destination:
Foreign market
America, except United States		459			550			28			—			—			(263	)		774			289			423			14			—			—			(212	)		514			121			338			—			4			—			(156	)		307
United States		53			294			—			—			—			(14	)		333			62			171			—			—			—			(36	)		197			—			166			—			—			3			(8	)		161
Europe		3,555			1,152			6			—			14			(2,046	)		2,681			4,110			704			—			—			—			(2,321	)		2,493			1,710			688			—			—			—			(1,063	)		1,335
Middle East/Africa/Oceania		739			120			18			—			—			(247	)		630			976			40			—			—			—			(543	)		473			318			70			—			—			—			(216	)		172
Japan		2,113			453			—			—			8			(912	)		1,662			2,348			370			—			—			—			(1,044	)		1,674			940			373			—			—			1			(438	)		876
China		8,961			380			—			—			—			(4,074	)		5,267			9,103			210			—			—			—			(4,155	)		5,158			2,734			210			—			28			—			(984	)		1,988
Asia, other than Japan and China		1,604			603			13			—			—			(856	)		1,364			1,813			393			—			—			—			(858	)		1,348			355			388			—			—			—			(215	)		528
Brazil		1,225			208			797			456			289			(479	)		2,496			1,312			222			828			462			188			(373	)		2,639			611			185			109			305			212			(248	)		1,174

		18,709			3,760			862			456			311			(8,891	)		15,207			20,013			2,533			842			462			188			(9,542	)		14,496			6,789			2,418			109			337			216			(3,328	)		6,541

Operating segment — after eliminations (disaggregated)


	Three-month period ended (unaudited)
	December 31, 2010
														Depreciation,						Property, plant		Addition to
			Value added					Cost and			Operating			depletion and			Operating			and equipment,		property, plant
	Revenue		tax			Net revenues		expenses			profit			amortization			income			net		and equipment			Investments
Bulk Material
Iron ore		8,477		(101	)		8,376		(2,275	)		6,101			(360	)		5,741			30,412		831			107
Pellets		1,927		(55	)		1,872		(785	)		1,087			(29	)		1,058			1,445		87			1,058
Manganese		44		(2	)		42		(33	)		9			(4	)		5			24		2			—
Ferroalloys		186		(14	)		172		(81	)		91			(7	)		84			292		16			—
Coal		241		—			241		(279	)		(38	)		(24	)		(62	)		3,020		289			223
Pig iron		22		—			22		(25	)		(3	)		3			—			123		1			—

		10,897		(172	)		10,725		(3,478	)		7,247			(421	)		6,826			35,316		1,226			1,388
Base Metals
Nickel and other products (*)		2,017		—			2,017		(1,346	)		671			(454	)		217			28,623		724			23
Copper concentrate		311		(11	)		300		(201	)		99			(25	)		74			3,579		(25	)		90
Aluminum products		691		(4	)		687		(598	)		89			(1	)		88			395		216			152

		3,019		(15	)		3,004		(2,145	)		859			(480	)		379			32,597		915			265
Fertilizers
Potash		73		—			73		(131	)		(58	)		(7	)		(65	)		474		348			—
Phosphates		541		(12	)		529		(443	)		86			(79	)		7			7,560		188			—
Nitrogen		151		(19	)		132		(115	)		17			(42	)		(25	)		809		1			—
Others fertilizers products		4		(2	)		2		—			2			—			2			146		3			—

		769		(33	)		736		(689	)		47			(128	)		(81	)		8,989		540			—
Logistics
Railroads		262		(39	)		223		(190	)		33			(37	)		(4	)		1,278		71			511
Ports		72		(8	)		64		(71	)		(7	)		(7	)		(14	)		1,044		769			—
Ships		—		—			—		—			—			3			3			—		—			135

		334		(47	)		287		(261	)		26			(41	)		(15	)		2,322		840			646
Others		188		(11	)		177		(116	)		61			(3	)		58			3,872		1,221			2,198

		15,207		(278	)		14,929		(6,689	)		8,240			(1,073	)		7,167			83,096		4,742			4,497


(*)		Includes nickel co-products and by-products (copper, precious metals, cobalt and others).

Operating segment — after eliminations (disaggregated)


	Three-month period ended (unaudited)
	September 30, 2010
														Depreciation,						Property, plant		Addition to
			Value added					Cost and			Operating			depletion and			Operating			and equipment,		property, plant
	Revenue		tax			Net revenues		expenses			profit			amortization			income			net		and equipment		Investments
Bulk Material
Iron ore		8,725		(108	)		8,617		(1,982	)		6,635			(325	)		6,310			29,523		1,591		95
Pellets		2,082		(81	)		2,001		(774	)		1,227			(23	)		1,204			1,325		137		1,407
Manganese		67		1			68		(41	)		27			(1	)		26			24		—		—
Ferroalloys		166		(16	)		150		(74	)		76			(2	)		74			287		2		—
Coal		217		—			217		(199	)		18			(28	)		(10	)		2,771		58		203
Pig iron		—		—			—		—			—			—			—			123		—		—

		11,257		(204	)		11,053		(3,070	)		7,983			(379	)		7,604			34,053		1,788		1,705
Base Metals
Nickel and other products (*)		1,074		—			1,074		(758	)		316			(206	)		110			27,719		448		25
Copper concentrate		236		(8	)		228		(152	)		76			(22	)		54			2,748		566		74
Aluminum products		609		(15	)		594		(533	)		61			(4	)		57			84		65		152

		1,919		(23	)		1,896		(1,443	)		453			(232	)		221			30,551		1,079		251
Fertilizers
Potash		87		(5	)		82		(53	)		29			(9	)		20			208		—		—
Phosphates		556		(25	)		531		(524	)		7			(33	)		(26	)		6,521		206		—
Nitrogen		147		(20	)		127		(133	)		(6	)		(6	)		(12	)		1,446		46		—
Others fertilizers products		12		(3	)		9		(6	)		3			—			3			325		—		—

		802		(53	)		749		(716	)		33			(48	)		(15	)		8,500		252		—

Logistics
Railroads		308		(57	)		251		(184	)		67			(27	)		40			1,138		43		545
Ports		100		(15	)		85		(59	)		26			(5	)		21			269		11		—
Ships		—		—			—		—			—			—			—			—		—		128

		408		(72	)		336		(243	)		93			(32	)		61			1,407		54		673
Others		110		(42	)		68		(98	)		(30	)		(5	)		(35	)		4,186		679		2,282

		14,496		(394	)		14,102		(5,570	)		8,532			(696	)		7,836			78,697		3,852		4,911


(*)		Includes nickel co-products and by-products (copper, precious metals, cobalt and others).

Operating segment — after eliminations (disaggregated)


	Three-month period ended (unaudited)
	December 31, 2009
																				Property,		Addition to
														Depreciation,						plant and		property,
			Value added			Net		Cost and			Operating			depletion and			Operating			equipment,		plant and
	Revenue		tax			revenues		expenses			profit			amortization			income			net		equipment		Investments
Bulk Material
Iron ore		3,459		(67	)		3,392		(1,665	)		1,727			(334	)		1,393			21,736		1,405		107
Pellets		483		(29	)		454		(417	)		37			(20	)		17			947		—		1,050
Manganese		64		(1	)		63		(40	)		23			(2	)		21			25		1		—
Ferroalloys		123		(16	)		107		(69	)		38			(6	)		32			261		56		—
Coal		137		—			137		(176	)		(39	)		(31	)		(70	)		1,723		128		243
Pig iron		26		—			26		(42	)		(16	)		—			(16	)		144		—		—

		4,292		(113	)		4,179		(2,409	)		1,770			(393	)		1,377			24,836		1,590		1,400
Base Metals
Nickel and other products (*)		872		—			872		(776	)		96			(264	)		(168	)		23,967		393		30
Kaolin		48		(3	)		45		(41	)		4			(6	)		(2	)		190		2		—
Copper concentrate		207		(1	)		206		(129	)		77			(18	)		59			4,127		92		80
Aluminum products		611		(9	)		602		(551	)		51			(66	)		(15	)		4,663		27		143

		1,738		(13	)		1,725		(1,497	)		228			(354	)		(126	)		32,947		514		253
Fertilizers
Potash		109		(8	)		101		(70	)		31			(10	)		21			159		—		—

		109		(8	)		101		(70	)		31			(10	)		21			159		—		—
Logistics
Railroads		218		(41	)		177		(155	)		22			(29	)		(7	)		1,045		26		468
Ports		87		(13	)		74		(49	)		25			(11	)		14			1,441		—		—
Ships		2		—			2		(9	)		(7	)		—			(7	)		1,104		300		125

		307		(54	)		253		(213	)		40			(40	)		—			3,590		326		593
Others		95		(20	)		75		(242	)		(167	)		(2	)		(169	)		6,105		325		2,339

		6,541		(208	)		6,333		(4,431	)		1,902			(799	)		1,103			67,637		2,755		4,585


(*)		Includes nickel co-products and by-products (copper, precious metals, cobalt and others).

Results by segment — before eliminations (aggregated)


	Year ended as of December, 31
	2010																					2009																					2008
	Bulk			Base																		Bulk			Base																		Bulk			Base
	Material			Metals			Fertilizers			Logistic			Others			Elimination			Consolidated			Material			Metals			Fertilizers			Logistic			Others			Elimination			Consolidated			Material			Metals			Fertilizers			Logistic			Others			Elimination			Consolidated
RESULTS
Gross revenues		59,573			10,805			1,990			1,727			719			(28,333	)		46,481			25,940			8,886			413			1,168			446			(12,914	)		23,939			38,288			14,714			295			1,691			245			(16,724	)		38,509
Cost and expenses		(36,682	)		(8,521	)		(1,814	)		(1,382	)		(582	)		28,333			(20,648	)		(17,880	)		(7,769	)		(158	)		(876	)		(410	)		12,914			(14,179	)		(24,542	)		(9,658	)		(128	)		(1,097	)		(218	)		16,724			(18,919	)
Research and development		(289	)		(277	)		(72	)		(75	)		(165	)		—			(878	)		(235	)		(207	)		(46	)		(57	)		(436	)		—			(981	)		(380	)		(372	)		(8	)		(101	)		(224	)		—			(1,085	)
Depreciation, depletion and amortization		(1,538	)		(1,359	)		(200	)		(146	)		(17	)		—			(3,260	)		(1,205	)		(1,356	)		(29	)		(126	)		(6	)		—			(2,722	)		(1,054	)		(1,604	)		(19	)		(128	)		(2	)		—			(2,807	)
Impairment of goodwill		—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			(950	)		—			—			—			—			(950	)

Operating income		21,064			648			(96	)		124			(45	)		—			21,695			6,620			(446	)		180			109			(406	)		—			6,057			12,312			2,130			140			365			(199	)		—			14,748
Financial income		2,557			778			22			16			10			(3,093	)		290			2,439			12			—			8			711			(2,789	)		381			3,048			798			—			10			1			(3,255	)		602
Financial expenses		(3,873	)		(1,718	)		(13	)		(36	)		(99	)		3,093			(2,646	)		(2,982	)		(653	)		—			(17	)		(695	)		2,789			(1,558	)		(3,515	)		(1,490	)		—			(15	)		—			3,255			(1,765	)
Gains (losses) on derivatives, net		772			(141	)		—			—			—			—			631			1,647			(119	)		—			—			—			—			1,528			(719	)		(93	)		—			—			—			—			(812	)
Foreign exchange and monetary gains (losses), net		109			208			65			(28	)		(10	)		—			344			173			445			—			(11	)		68			—			675			764			(265	)		—			(32	)		(103	)		—			364
Discontinued Operations, Net of tax		—			(143	)		—			—			—			—			(143	)		—			—			—			—			—			—			—			—			—			—			—			—			—			—
Gain on sale of investments		—			—			—			—			—			—			—			87			(108	)		—			—			61			—			40			—			80			—			—			—			—			80
Equity in results of affiliates and joint ventures and change in provision for losses on equity investments		1,013			(10	)		—			94			(110	)		—			987			328			(28	)		—			143			(10	)		—			433			612			28			—			133			21			—			794
Income taxes		(3,980	)		240			(12	)		20			27			—			(3,705	)		(2,613	)		525			—			(11	)		(1	)		—			(2,100	)		143			(697	)		—			23			(4	)		—			(535	)
Noncontrolling interests		5			(209	)		19			—			(4	)		—			(189	)		17			(121	)		—			—			(3	)		—			(107	)		(8	)		(256	)		—			—			6			—			(258	)

Net income attributable to the Company’s stockholders		17,667			(347	)		(15	)		190			(231	)		—			17,264			5,716			(493	)		180			221			(275	)		—			5,349			12,637			235			140			484			(278	)		—			13,218


Sales classified by geographic destination:
Foreign market
America, except United States		1,332			1,496			42			12			7			(879	)		2,010			465			1,368			—			4			10			(595	)		1,252			1,805			2,215			—			1			—			(1,201	)		2,820
United States		128			774			—			—			2			(76	)		828			37			824			—			—			35			(64	)		832			648			2,201			—			1			9			(392	)		2,467
Europe		13,147			3,306			6			—			16			(7,563	)		8,912			6,136			2,618			—			—			8			(4,726	)		4,036			11,224			4,132			—			26			—			(5,933	)		9,449
Middle East/Africa/Oceania		2,655			264			18			—			—			(1,147	)		1,790			1,005			233			—			—			—			(707	)		531			2,058			394			—			—			—			(952	)		1,500
Japan		6,927			1,425			—			—			8			(3,120	)		5,240			2,551			972			—			—			4			(1,115	)		2,412			4,761			1,893			—			1			—			(1,918	)		4,737
China		26,071			964			—			—			—			(11,656	)		15,379			12,084			878			—			63			—			(4,022	)		9,003			9,747			887			—			21			—			(3,949	)		6,706
Asia, other than Japan and China		4,833			1,788			13			—			—			(2,462	)		4,172			1,883			1,258			—			—			—			(923	)		2,218			3,703			1,946			—			1			2			(1,497	)		4,155
Brazil		4,480			788			1,911			1,715			686			(1,430	)		8,150			1,779			735			413			1,101			389			(762	)		3,655			4,342			1,046			295			1,640			234			(882	)		6,675

		59,573			10,805			1,990			1,727			719			(28,333	)		46,481			25,940			8,886			413			1,168			446			(12,914	)		23,939			38,288			14,714			295			1,691			245			(16,724	)		38,509

Operating segment — after eliminations (disaggregated)


	As of and for the year ended December 31,
	2010
														Depreciation,						Property, plant		Addition to
								Cost and			Operating			depletion and			Operating			and equipment,		property, plant
	Revenue		Value added tax			Net revenues		expenses			profit			amortization			income			net		and equipment		Investments
Bulk Material
Iron ore		26,384		(366	)		26,018		(7,364	)		18,654			(1,307	)		17,347			30,412		4,015		107
Pellets		6,402		(266	)		6,136		(2,515	)		3,621			(110	)		3,511			1,445		353		1,058
Manganese		258		(7	)		251		(136	)		115			(10	)		105			24		2		—
Ferroalloys		664		(62	)		602		(306	)		296			(26	)		270			292		26		—
Coal		770		—			770		(856	)		(86	)		(83	)		(169	)		3,020		499		223
Pig iron		31		—			31		(29	)		2			(2	)		—			123		1		—

		34,509		(701	)		33,808		(11,206	)		22,602			(1,538	)		21,064			35,316		4,896		1,388
Base Metals
Nickel and other products (*)		4,712		—			4,712		(3,402	)		1,310			(1,145	)		165			28,623		1,880		23
Copper concentrate		934		(29	)		905		(621	)		284			(87	)		197			3,579		1,072		90
Aluminum products		2,554		(32	)		2,522		(2,109	)		413			(127	)		286			395		342		152

		8,200		(61	)		8,139		(6,132	)		2,007			(1,359	)		648			32,597		3,294		265
Fertilizers
Potash		280		(11	)		269		(269	)		—			(29	)		(29	)		474		355		—
Phosphates		1,211		(47	)		1,164		(1,070	)		94			(121	)		(27	)		7,560		438		—
Nitrogen		337		(43	)		294		(285	)		9			(50	)		(41	)		809		47		—
Others fertilizers products		18		(6	)		12		(11	)		1			—			1			146		3		—

		1,846		(107	)		1,739		(1,635	)		104			(200	)		(96	)		8,989		843		—
Logistics
Railroads		1,107		(183	)		924		(716	)		208			(123	)		85			1,278		160		511
Ports		353		(47	)		306		(236	)		70			(23	)		47			1,044		783		—
Ships		5		—			5		(13	)		(8	)		—			(8	)		—		—		135

		1,465		(230	)		1,235		(965	)		270			(146	)		124			2,322		943		646
Others		461		(89	)		372		(400	)		(28	)		(17	)		(45	)		3,872		2,671		2,198

		46,481		(1,188	)		45,293		(20,338	)		24,955			(3,260	)		21,695			83,096		12,647		4,497


(*)		Includes nickel co-products and by-products (copper, precious metals, cobalt and others).

Operating segment — after eliminations (disaggregated)


	As of and for the year ended December 31,
	2009
																				Property,		Addition to
														Depreciation,						plant and		property,
			Value added			Net		Cost and			Operating			depletion and			Operating			equipment,		plant and
	Revenue		tax			revenues		expenses			profit			amortization			income			net		equipment		Investments
Bulk Material
Iron ore		12,831		(172	)		12,659		(4,957	)		7,702			(1,043	)		6,659			21,736		3,361		107
Pellets		1,352		(92	)		1,260		(1,165	)		95			(76	)		19			947		84		1,050
Manganese		145		(2	)		143		(103	)		40			(9	)		31			25		4		—
Ferroalloys		372		(45	)		327		(278	)		49			(15	)		34			261		112		—
Coal		505		—			505		(549	)		(44	)		(61	)		(105	)		1,723		362		243
Pig iron		45		—			45		(63	)		(18	)		—			(18	)		144		48		—

		15,250		(311	)		14,939		(7,115	)		7,824			(1,204	)		6,620			24,836		3,971		1,400
Base Metals
Nickel and other products (*)		3,947		—			3,947		(3,292	)		655			(1,016	)		(361	)		23,967		1,464		30
Kaolin		173		(9	)		164		(146	)		18			(34	)		(16	)		190		53		—
Copper concentrate		682		(19	)		663		(462	)		201			(72	)		129			4,127		558		80
Aluminum products		2,050		(37	)		2,013		(1,969	)		44			(235	)		(191	)		4,663		143		143

		6,852		(65	)		6,787		(5,869	)		918			(1,357	)		(439	)		32,947		2,218		253
Fertilizers
Potash		413		(17	)		396		(187	)		209			(29	)		180			159		—		—

		413		(17	)		396		(187	)		209			(29	)		180			159		—		—
Logistics
Railroads		838		(137	)		701		(539	)		162			(97	)		65			1,045		96		468
Ports		264		(38	)		226		(161	)		65			(29	)		36			1,441		106		—
Ships		2		—			2		(9	)		(7	)		—			(7	)		1,104		738		125

		1,104		(175	)		929		(709	)		220			(126	)		94			3,590		940		593
Others		320		(60	)		260		(652	)		(392	)		(6	)		(398	)		6,105		967		2,339

		23,939		(628	)		23,311		(14,532	)		8,779			(2,722	)		6,057			67,637		8,096		4,585


(*)		Includes nickel co-products and by-products (copper, precious metals, cobalt and others).

Operating segment — after eliminations (disaggregated)


	As of and for the year ended December 31,
	2008
																							Property, plant		Addition to
														Depreciation,									and		property,
			Value added					Cost and						depletion and			Impairment			Operating			equipment,		plant and
	Revenue		tax			Net revenues		expenses			Net			amortization			of goodwill			income			net		equipment		Investments
BulkMaterials
Iron ore		17,775		(364	)		17,411		(6,547	)		10,864			(876	)		—			9,988			14,595		3,645		47
Pellets		4,301		(189	)		4,112		(2,394	)		1,718			(112	)		—			1,606			645		127		721
Manganese		266		(15	)		251		(77	)		174			(5	)		—			169			18		3		—
Ferroalloys		1,211		(128	)		1,083		(457	)		626			(22	)		—			604			166		32		—
Coal		577		—			577		(441	)		136			(33	)		—			103			826		144		187
Pig iron		146		—			146		(67	)		79			(3	)		—			76			144		122		—

		24,276		(696	)		23,580		(9,983	)		13,597			(1,051	)		—			12,546			16,394		4,073		955
Base Metals
Nickel and other products (*)		7,829		—			7,829		(4,425	)		3,404			(1,323	)		(950	)		1,131			21,525		2,813		53
Kaolin		209		(9	)		200		(213	)		(13	)		(32	)		—			(45	)		199		6		—
Copper concentrate		893		(22	)		871		(683	)		188			(77	)		—			111			3,543		283		—
Aluminum products		3,042		(66	)		2,976		(2,288	)		688			(172	)		—			516			3,831		440		140

		11,973		(97	)		11,876		(7,609	)		4,267			(1,604	)		(950	)		1,713			29,098		3,542		193
Fertilizers
Potash		295		(16	)		279		(120	)		159			(19	)		—			140			159		43		—

		295		(16	)		279		(120	)		159			(19	)		—			140			159		43		—
Logistics
Railroads		1,303		(205	)		1,098		(749	)		349			(103	)		—			246			760		121		326
Ports		304		(39	)		265		(198	)		67			(26	)		—			41			1,441		242		—
Ships		—		—			—		—			—			—			—			—			374		343		94

		1,607		(244	)		1,363		(947	)		416			(129	)		—			287			2,575		706		420
Others		358		(30	)		328		(262	)		66			(4	)		—			62			228		608		840

		38,509		(1,083	)		37,426		(18,921	)		18,505			(2,807	)		(950	)		14,748			48,454		8,972		2,408


(*)		Includes nickel co-products and by-products (copper, precious metals, cobalt and others).

Related party transactions

Balances from transactions with major related parties are as follows:


	As of December 31
	2010				2009
	Assets		Liabilities		Assets		Liabilities
AFFILIATED COMPANIES AND JOINT VENTURES
Companhia Hispano-Brasileira de Pelotização — HISPANOBRÁS		264		300		34		34
Companhia Ítalo-Brasileira de Pelotização — ITABRASCO		—		10		1		6
Companhia Nipo-Brasileira de Pelotização — NIBRASCO		—		23		—		22
Companhia Coreano-Brasileira de Pelotização — KOBRASCO		—		4		1		5
Baovale Mineração SA		3		30		2		22
Minas da Serra Geral SA — MSG		—		9		—		26
MRS Logística SA		1		15		10		418
Mineração Rio Norte SA		2		25		—		25
Samarco Mineração SA		61		—		55		—
Teal Minerals Incorporated		—		—		84		—
Korea Nickel Corporation		—		—		11		—
Mitsui & CO, LTD		—		61		—		26
Others		229		84		24		29

		560		561		222		613

Current		531		559		186		496

Long-term		29		2		36		117

These balances are included in the following balance sheet classifications:


	As of December 31
	2010				2009
	Assets		Liabilities		Assets		Liabilities
Current assets
Accounts receivable		435		—		79		—
Loans and advances to related parties		96		—		107		—
Non-current assets
Loans and advances to related parties		29		—		36		—
Current liabilities
Suppliers		—		538		—		463
Loans from related parties		—		21		—		33
Non-current liabilities
Long-term debt		—		2		—		117

		560		561		222		613

Income and expenses from the principal transactions and financial operations carried out with major related parties are as follows:


	Year ended as of December, 31
	2010				2009				2008
	Income		Expense		Income		Expense		Income		Expense
AFFILIATED COMPANIES AND JOINT VENTURES
Companhia Nipo-Brasileira de Pelotização — NIBRASCO		—		149		29		47		105		393
Samarco Mineração SA		448		—		97		—		259		—
Companhia Ítalo-Brasileira de Pelotização — ITABRASCO		—		50		—		18		240		163
Companhia Hispano-Brasileira de Pelotização — HISPANOBRÁS		462		513		85		75		342		378
Companhia Coreano-Brasileira de Pelotização — KOBRASCO		—		117		—		29		101		234
Usinas Siderúrgicas de Minas Gerais SA — USIMINAS (*)		—		—		46		—		651		—
Mineração Rio Norte SA		—		156		—		210		—		249
MRS Logística SA		16		561		12		484		9		829
Mitsui & CO, LTD		—		1		—		30		—		13
Others		17		18		19		29		34		34

		943		1,565		288		922		1,741		2,293


(*)		Sold in April 2009.

These amounts are included in the following statement of income line items:


	Year ended as of December, 31
	2010				2009				2008
	Income		Expense		Income		Expense		Income		Expense
Sales / Cost of iron ore and pellets		910		786		223		233		1,698		1,382
Revenues / expense from logistic services		23		603		26		457		25		624
Sales / Cost of aluminum products		—		156		—		210		—		249
Financial income/expenses		10		20		29		32		18		38

		943		1,565		288		922		1,741		2,293

Additionally we have loans payable to Banco Nacional de Desenvolvimento Social and BNDES Participações S.A in the amounts of US$2,172 and US$739 respectively, accruing interest at market rates, which fall due through 2029. The operations generated interest expenses of US$147. We also maintain cash equivalent balances with Banco Bradesco S.A. in the amount of US$574 it December 31, 2010. The effect of these operations in results was US$5.

Derivative financial instruments

Risk management policy

Vale has developed its risk management strategy in order to provide an integrated approach of the risks the Company is exposed to. To do that, Vale evaluate not only the impact of market risk factors in the business results (market risk), but also the risk arising from third party obligations with Vale (credit risk) and those risks inherent in Vale’s operational processes (operational risk).

Vale considers that the effective management of risk is a key objective to support its growth strategy and financial flexibility. The risk reduction on Vale’s future cash flows contributes to a better perception of the Company’s credit quality, improving its ability to access different markets. As a commitment to the risk management strategy, the Board of Directors has established an enterprise-wide risk management policy and a risk management committee.

The risk management policy determines that Vale should evaluate regularly its cash flow risks and potential risk mitigation strategies. Whenever considered necessary, mitigation strategies should be put in place to reduce cash flow volatility. The executive board is responsible for the evaluation and approval of long-term risk mitigation strategies recommended by the risk management committee.

The risk management committee assists our executive officers in overseeing and reviewing our enterprise risk management activities, including the principles, policies, process, procedures and instruments employed to manage risk. The risk management committee reports periodically to the executive board on how risks have been monitored, what are the most important risks we are exposed to and their impact on cash flows.

The risk management policy and procedures that complement the normative of risk management governance model, explicitly prohibit speculative transactions with derivatives and require the diversification of operations and counterparties.

Besides the risk management governance model, Vale has put in place a well defined corporate governance structure. The recommendation and execution of the derivative transactions are implemented by independent areas. The strategy and risk management department is responsible for defining and proposing to the risk management committee, market risk mitigation strategies consistent with Vale’s and its wholly owned subsidiaries corporate strategy. The finance department is responsible for the execution of the risk mitigation strategies through the use of derivatives. The independence of the areas guarantees an effective control on these operations.

When measuring our exposures, the correlations between market risk factors are taken into consideration once we must be able to evaluate the net impact on our cash flows from all main market variables. We are also able to identify a natural diversification of products and currencies in our portfolio and therefore a natural reduction of the overall risk of the Company.

The consolidated market risk exposure and the portfolio of derivatives are measured monthly and monitored in order to evaluate the financial results and market risk impacts on our cash flow, as well as to guarantee that the initial goals

will be achieved. The mark-to-market of the derivatives portfolio is reported weekly to management.

Considering the nature of Vale’s business and operations, the main market risk factors which the Company is exposed are:

	•		Interest rates;

	•		Foreign exchange;

	•		Product prices and input costs

Foreign exchange and interest rate risk

Vale’s cash flows are exposed to volatility of several different currencies. While most of our product prices are indexed to the US dollars, most of our costs, disbursements and investments are indexed to currencies other than the US dollar, mainly the Brazilian real and Canadian dollar.

Derivative instruments may be used to reduce Vale’s potential cash flow volatility arising from its currency mismatch. Vale’s foreign exchange and interest rate derivative portfolio consists, basically, of interest rate swaps to convert floating cash flows in Brazilian real to fixed or floating US dollar cash flows, without any leverage.

Vale is also exposed to interest rate risks on loans and financings. Our floating rate debt consists mainly of loans including export pre-payments, commercial banks and multilateral organizations loans.

In general, our US dollars floating rate debt is subject to changes in the LIBOR (London Interbank Offer Rate in US dollars). To mitigate the impact of the interest rate volatility on its cash flows, Vale takes advantage of natural hedges resulting from the correlation of metal prices and US dollar floating rates. When natural hedges are not present, we may opt to look for the same effect by using financial instruments.

Our Brazilian real denominated debt subject to floating interest rates refers to debentures, loans obtained from Banco Nacional de Desenvolvimento Econômico e Social (BNDES) and property and services acquisition financing in the Brazilian market. These debts are mainly linked to CDI and TJLP.

The swap transactions used to convert debt linked to Brazilian reais into U.S. Dollars have similar — and sometimes shorter — settlement dates than the final maturity of the debt instruments. Their amounts are similar to the principal and interest payments, subjected to liquidity market conditions. The swaps with shorter settlement date than the debts’ final maturity are renegotiated through time so that their final maturity match — or become closer — to the debt final maturity. At each settlement date, the results on the swap transactions partially offset the impact of the foreign exchange rate in our obligations, contributing to stabilize the cash disbursements in U.S. Dollars for the interest and/or principal payment of our Brazilian Real denominated debt.

In the event of an appreciation (depreciation) of the Brazilian real against the US dollar, the negative (positive) impact on our Brazilian real denominated debt obligations (interest and/or principal payment) measured in US dollars will be partially offset by a positive (negative) effect from a swap transaction, regardless of the US dollar / Brazilian real exchange rate on the payment date.

We have other exposures associated with our outstanding debt portfolio. In order to reduce cash flow volatility associated with a financing from KFW (Kreditanstalt Für Wiederaufbau) indexed to Euribor, Vale entered into a swap contract where the cash flows in Euros are converted into cash flows in US dollars. We have also entered into a swap to convert the cash flow from a debt instrument issued originally in Euro into US dollars. In this derivative transaction, we receive fixed interest rates in Euros and pay fixed interest rates in US dollars.

In order to reduce the cash flows volatility associated with the foreign exchange exposure from some coal fixed price sales, Vale purchased forward Australian dollars.

Product price risk

Vale is also exposed to several market risks associated with commodities price volatilities. Currently, our derivative

transactions include nickel, aluminum, coal, copper, bunker oil and maritime freight (FFA) derivatives and all have the same purpose of mitigating Vale’s cash flow volatility.

Nickel — The Company has the following derivative instruments in this category:

	•		Strategic derivative program — in order to protect our cash flows in 2010 and 2011, we entered into derivative transactions where we fixed the prices of some of our nickel sales during the period.

	•		Fixed price sales program — we use to enter into nickel future contracts on the London Metal Exchange (LME) with the purpose of maintaining our exposure to nickel price variation, regarding the fact that, in some cases, the commodity is sold at a fixed price to some customers. Whenever the ‘Strategic derivative program’ is executed, the ‘Fixed price sales program’ is interrupted.

	•		Nickel purchase program — Vale has also sold nickel futures on the LME, in order to minimize the risk of mismatch between the pricing on the costs of intermediate products and finished goods.

Aluminum — In order to protect our cash flow in 2010, we entered into derivatives transactions where we fixed the prices of some of our aluminum sales during the period. Aluminum operations are available for sale since June 2010.

Coal — In order to protect our cash flow in 2010, we entered into derivatives transactions where we fixed the prices of some of our coal sales during the period.

Copper — We entered into derivatives transactions in order to reduce the cash flow volatility due to the quotation period mismatch between the pricing period of copper scrap purchase and the pricing period of final products sale to the clients.

Bunker Oil — In order to reduce the impact of bunker oil price fluctuation on Vale’s freight hiring and, therefore, on Vale’s cash flow, Vale implemented a derivative program that consists of forward purchases and swaps.

Maritime Freight — In order to reduce the impact of freight price fluctuations on the Company’s cash flows, Vale implemented a derivative program that consists of purchasing Forward Freight Agreements (FFA).

Embedded derivatives — In addition to the contracts mentioned above, Vale Inco Ltd., Vale’s wholly-owned subsidiary, has nickel concentrate and raw materials purchase agreements, where there are provisions based on the movement of nickel and copper prices. These provisions are considered embedded derivatives. There is also an embedded derivative related to energy purchase in our subsidiary Albras, on which there is a premium that can be charged based on the movement of aluminum prices. Aluminum operations are available for sale since June 2010.

Under the Standard Accounting for Derivative Financial Instruments and Hedging Activities, all derivatives, whether designated in hedging relationships or not, are required to be recorded in the balance sheet at fair value and the gain or loss in fair value is included in current earnings, unless if qualified as hedge accounting. A derivative must be designated in a hedging relationship in order to qualify for hedge accounting. These requirements include a determination of what portions of hedges are deemed to be effective versus ineffective. In general, a hedging relationship is effective when a change in the fair value of the derivative is offset by an equal and opposite change in the fair value of the underlying hedged item. In accordance with these requirements, effectiveness tests are performed in order to assess effectiveness and quantify ineffectiveness for all designated hedges.

At December 31, 2010, we have outstanding positions designated as cash flow hedge. A cash flow hedge is a hedge of the exposure to variability in expected future cash flows that is attributable to a particular risk, such as a forecasted purchase or sale. If a derivative is designated as cash flow hedge, the effective portion of the changes in the fair value of the derivative is recorded in other comprehensive income and recognized in earnings when the hedged item affects earnings. However, the ineffective portion of changes in the fair value of the derivatives designated as hedges is recognized in earnings. If a portion of a derivative contract is excluded for purposes of effectiveness testing, such as time value, the value of such excluded portion is included in earnings.

The assets and liabilities balances of derivatives measured at fair value and the effects of their recognition are shown in the following tables:


	Assets								Liabilities
	As of December 31								As of December 31
			2010				2009				2010				2009
	Short-term		Long-term		Short-term		Long-term		Short-term		Long-term		Short-term		Long-term
Derivatives not designated as hedge
Foreign exchange and interest rate risk
CDI & TJLP vs. floating & fixed swap		—		300		—		794		—		—		—		—
EURO floating rate vs. USD floating rate swap		1		—		—		1		—		—		—		—
USD floating rate vs. fixed USD rate swap		—		—		—		—		4		—		7		1
EuroBond Swap		—		—		—		—		—		8		—		—
Pre Dollar Swap		—		1		—		—		—		—		—		—
AUD floating rate vs. fixed USD rate swap		2		—		—		9		—		—		—		—

		3		301		—		804		4		8		7		1

Commodities price risk
Nickel
Fixed price program		13		—		12		2		12		—		3		8
Strategic program		—		—		—		—		15		—		32		—
Aluminium		—		—		—		—		—		—		16		—
Bunker Oil Hedge		16		—		49		—		—		—		—		—
Coal		—		—		—		—		2		—		—		—
Maritime Freight Hiring Protection Program		—		—		29		—		2		—		—		—

		29		—		90		2		31		—		51		8

Derivatives designated as hedge
Foreign exchange cash flow hedge		20		—		15		59		—		—		—		—
Strategic Nickel		—		—		—		—		—		53		—		—
Aluminium		—		—		—		—		—		—		71		—

		20		—		15		59		—		53		71		—

Total		52		301		105		865		35		61		129		9

The following table presents the effects of derivatives for the periods ended:


	Amount of gain or (loss) recognized as financial income (expense)																		Financial settlement																		Amount of gain or (loss) recognized in OCI
	Three-month period ended (unaudited)									Year ended as of December, 31									Three-month period ended (unaudited)									Year ended as of December, 31									Three-month period ended (unaudited)									Year ended as of December, 31
	December 31,			September 30,			December 31,												December 31,			September 30,			December 31,												December 31,			September 30,			December 31,
	2010			2010			2009			2010			2009			2008			2010			2010			2009			2010			2009			2008			2010			2010			2009			2010			2009			2008
Derivatives not designated as hedge

Foreign exchange and interest rate risk
CDI & TJLP vs. USD fixed and floating rate swap		259			433			198			451			1,598			48			(819	)		(33	)		(90	)		(956	)		(243	)		(397	)		—			—			—			—			—			—
EURO floating rate vs. USD floating rate swap		—			—			1			(1	)		—			(684	)		1			—			—			1			(1	)		1			—			—			—			—			—			—
USD floating rate vs. USD fixed rate swap		—			(1	)		—			(2	)		(2	)		7			(2	)		1			2			3			8			—			—			—			—			—			—			—
Swap Convertibles		—			—			—			37			—			—			—			—			—			(37	)		—			—			—			—			—			—			—			—
Swap NDF		—			3			—			4			—			—			—			(2	)		—			(2	)		—			—			—			—			—			—			—			—
EuroBond Swap		1			72			—			(5	)		—			—			—			(1	)		—			(1	)		—			—			—			—			—			—			—			—
Pre Dollar Swap		—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—
AUD floating rate vs. fixed USD rate swap		1			1			1			3			14			—			(1	)		(1	)		(3	)		(9	)		(5	)		—			—			—			—			—			—			—

		261			508			200			487			1,610			(629	)		(821	)		(36	)		(91	)		(1,001	)		(241	)		(396	)		—			—			—			—			—			—

Commodities price risk
Nickel
Fixed price program		—			(5	)		—			4			5			(102	)		—			(8	)		19			(7	)		79			48			—			—			—			—			—			—
Purchase program		—			—			—			—			—			21			—			—			—			—			—			—			—			—			—			—			—			—
Strategic program		(2	)		(34	)		(6	)		(87	)		(95	)		(3	)		39			16			37			105			73			—			—			—			—			—			—			—
Copper
Purchased scrap protection program		—			—			—			—			—			(23	)		—			—			—			—			—			201			—			—			—			—			—			—
Strategic hedging program		—			—			—			—			—			(6	)		—			—			—			—			—			(30	)		—			—			—			—			—			—
Platinum		—			—			—			—			—			(5	)		—			—			—			—			—			26			—			—			—			—			—			—
Gold		—			—			—			—			—			(30	)		—			—			—			—			—			42			—			—			—			—			—			—
Natural gas		—			—			—			—			(4	)		4			—			—			—			—			6			—			—			—			—			—			—			—
Aluminum		—			—			—			—			—			(68	)		—			—			—			16			—			122			—			—			—			—			—			—
Maritime Freight Hiring Protection Program		5			9			77			(5	)		66			—			(11	)		6			(7	)		(24	)		(37	)		—			—			—			—			—			—			—
Coal		(2	)		1			—			(4	)		—			—			2			1			—			3			—			—			—			—			—			—			—			—
Bunker Oil Hedge		13			4			41			4			50			(17	)		(7	)		(4	)		(11	)		(34	)		(16	)		—			—			—			—			—			—			—

		14			(25	)		112			(88	)		22			(229	)		23			11			38			59			105			409			—			—			—			—			—			—

Embedded derivatives:
For nickel concentrate costumer sales		—			—			—			—			(25	)		29			—			—			—			—			(14	)		—			—			—			—			—			—			—
Customer raw material contracts		—			—			—			—			(76	)		10			—			—			—			—			—			(10	)		—			—			—			—			—			—
Energy — Aluminum options		(7	)		(44	)		—			(51	)		—			13			—			—			—			—			—			—			—			—			—			—			—			—

		(7	)		(44	)		—			(51	)		(101	)		52			—			—			—			—			(14	)		(10	)		—			—			—			—			—			—

Derivatives designated as hedge
Bunker Oil Hedge		—			—			(16	)		—			(16	)		(6	)		—			—			5			—			4			—			—			—			—			—			—			—
Aluminum		—			—			—			—			13			—			18			3			—			47			—			—			7			(11	)		(42	)		31			(36	)		(29	)
Strategic Nickel		1			—			—			(1	)		—			—			—			—			—			—			—			—			(25	)		(68	)		—			(52	)		—			—
Foreign exchange cash flow hedge		204			61			—			284			—			—			(225	)		(75	)		—			(330	)		—			—			(115	)		66			31			(5	)		38			—

		205			61			(16	)		283			(3	)		(6	)		(207	)		(72	)		5			(283	)		4			—			(133	)		(13	)		(11	)		(26	)		2			(29	)

Total		473			500			296			631			1,528			(812	)		(1,005	)		(97	)		(48	)		(1,225	)		(146	)		3			(133	)		(13	)		(11	)		(26	)		2			(29	)

Unrealized gains (losses) in the period are included in our income statement under the caption of gains (losses) on derivatives, net.

Final maturity dates for the above instruments are as follows:


Interest rates-/ Currencies		December 2019
Aluminum		December 2010
Bunker Oil		December 2011
Freight		December 2010
Nickel		December 2012
Copper		February 2011
Coal		December 2010

Board of Directors, Fiscal Council, Advisory committees and Executive Officers


Board of Directors		Governance and Sustainability Committee
		Jorge Luiz Pacheco
Ricardo José da Costa Flores		Renato da Cruz Gomes
Chairman		Ricardo Simonsen

Mário da Silveira Teixeira Júnior		Fiscal Council
Vice-President
		Marcelo Amaral Moraes
Eduardo Fernando Jardim Pinto		Chairman
Jorge Luiz Pacheco
José Mauro Mettrau Carneiro da Cunha		Aníbal Moreira dos Santos
José Ricardo Sasseron		Antônio José de Figueiredo Ferreira
Ken Abe		Nelson Machado
Luciano Galvão Coutinho
Oscar Augusto de Camargo Filho		Alternate
Renato da Cruz Gomes		Cícero da Silva
Sandro Kohler Marcondes		Marcus Pereira Aucélio
		Oswaldo Mário Pêgo de Amorim Azevedo

Alternate
		Executive Officers

Deli Soares Pereira
Hajime Tonoki		Roger Agnelli
João Moisés de Oliveira		Chief Executive Officer
Luiz Augusto Ckless Silva
Luiz Carlos de Freitas		Carla Grasso
Luiz Felix Freitas		Executive Officer for Human Resources and Corporate
Paulo Sergio Moreira da Fonseca		Services
Raimundo Nonato Alves Amorim
Rita de Cássia Paz Andrade Robles		Eduardo de Salles Bartolomeo
Wanderlei Viçoso Fagundes		Executive Officer for Integrated Bulk Operations

Advisory Committees of the Board of Directors		Eduardo Jorge Ledsham
		Executive Office for Exploration, Energy and Projects

Controlling Committee
Luiz Carlos de Freitas		Guilherme Perboyre Cavalcanti
Paulo Ricardo Ultra Soares		Chief Financial Officer and Investor Relations
Paulo Roberto Ferreira de Medeiros

		José Carlos Martins
Executive Development Committee		Executive Officer for Marketing, Sales and Strategy
João Moisés de Oliveira
José Ricardo Sasseron
Oscar Augusto de Camargo Filho		Mario Alves Barbosa Neto
		Executive Officer for Fertilizers

Strategic Committee
Roger Agnelli		Tito Botelho Martins
Luciano Galvão Coutinho		Executive Officer for Base Metals Operations
Mário da Silveira Teixeira Júnior
Oscar Augusto de Camargo Filho		Marcus Vinícius Dias Severini
Ricardo José da Costa Flores		Chief Officer of Accounting and Control Department

Finance Committee		Vera Lúcia de Almeida Pereira Elias
Guilherme Perboyre Cavalcanti		Chief Accountant
Luiz Maurício Leuzinger		CRC-RJ — 043059/O-8
Ricardo Ferraz Torres
Wanderlei Viçoso Fagundes

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	Vale S.A. (Registrant)
	By:	/s/ Roberto Castello Branco
Date: February 24, 2011		Roberto Castello Branco
		Director of Investor Relations