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Vale concludes the acquisition of Corumbá

Monday, September 21st, 2009

Vale S.A. (Vale) announces that it concluded the all-cash acquisition of the Corumbá iron ore mining operations, located in state of Mato Grosso do Sul, Brazil, from Rio Tinto Plc (Rio Tinto) and some of its controlled entities for US$ 750 million.
Corumbá is a world-class asset, with high Fe content and a strategic importance to our product portfolio, adding a substantial volume of lump ore to our reserves. Lump ores are becoming increasingly scarce in our iron ore deposits in the Southern and Southeastern Systems in the state of Minas Gerais, Brazil. In addition, given its high quality, a major part of the Corumbá reserves can be employed in the direct reduction process, implying in a price premium over other ores.
In 2008, Corumbá produced 2.0 million metric tons of iron ore. The logistics assets enable it to be 70% self sufficient in the transportation of iron ore down the Paraguay river.
Vale has the intention to expand Corumbá’s capacity up to 15.0 million metric tons per year, which will require an estimed capex of more than US$ 2 billion, yet to be approved by Vale’s Board of Directors. About US$ 1.5 billion of the estimated capex will be spent on the purchase of convoys of barges, which could be ordered from Brazilian shipyards.
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