"For this quarter, 100% of our sales are in this new system, based on a market price average," completed Jose Carlos Martins.
"Transparency is also a major factor for choosing this pricing system. Today, you can find several spot price sources in China, you can find references in websites and newspapers, publications have laid out all processes, so it's transparent. We are open to negotiating different indexes and different averages, according to our costumers' needs," affirmed Vale's Executive Officer for Ferrous Minerals.
"This allows us as well as our clients to have more freedom to negotiate, avoiding yearly disputes and allowing a more practical and beneficial relationship with our clients. We can avoid a lot of discussion with this new system," completed Jose Carlos Martins.
On the shipping operations, Jose Carlos Martins highlighted Vale's strategy: "We will maintain our shipping strategy, but now we'll make use of a more flexible pricing mechanism. We will have as many ships as needed. Currently, there are 20 ships being built for us and we've signed contracts with ship owners for their work and support on this market. We hope to have a low as possible fleet differential."Stainless steel market "We have had a strong recovery in the stainless steel market, led by a very strong demand from China in nickel consumption. We are not sure of the levels of the stocks in the Chinese market, but if the situation remains as it is today, we should continue seeing stable nickel prices," declared Tito Martins, Executive Director of non-ferrous minerals of Vale. Vale Inco "We have restarted our production in Canada. In the 2nd quarter we should be able to show strong numbers from this return. We are estimating at least 6.3 million tons of nickel in Sudbury. The market is eager to see our product coming back," completed Tito Martins. Acquisition of Assets - Simandou "The Simandou area was always on our radar. Vale arrived a little later than our competitors. We took some time to arrive there, but we have finally been given an opportunity to do so. It's one of the largest resources of high quality iron ore in the world, similar to Canada in quality and quantity," affirmed Jose Carlos Martins, Executive Director of non-ferrous minerals of Vale. "Now that we have reached an agreement with BSG Resources Ltd our plans are to work as fast as possible in that area. We already got the legal approvals and the rights to invest in a new port and new tracks, as well as modernizing existing ones in Liberia and Guinea, with the objective of optimizing operations locally. By 2012 we want to produce 10 to 15 million tons with this project," completed Martins. Martins also added: "Simandou is only 4 hours from Brazil by plane, so Vale is in a very strong position and has leverage because of this. With our experience in new technologies and our proximity to the area it will be easier for us to develop this project." Regarding the operations in Carajas, Jose Carlos Martins reported some difficulty in getting licenses: "Our operations in Carajas already have a 2 year delay due to the difficulties in getting environmental licenses, so Simandou will give us more flexibility to start producing sooner, because the conditions are better. Both projects are going forwards, but in different time lines." Norsk Hydro Regarding the recent announcement on Hydro, Fabio Barbosa said: "It was a natural choice to join Norsk Hydro is this transaction. They have knowledge and expertise in aluminum production. By combining assets in this new organization, Vale is not leaving the business, remaining with 22% of the new company, enjoying the potential upside of this 5.3 billion dollars operation." India supply and demand " India has increased the supply but other factors have increased the demand in the country for iron ore. Before the crisis the supply of iron ore in Europe and many other countries was only for the local market, during the world financial crisis this local supply was spread to other countries. With the recovery of the economy, we expect the supply will be available only locally at least for the next semester," declared Jose Carlos Martins. ESSENTIAL ELEMENTS TAKEN FROM VALE'S 1Q2010 RESULTS PRESS RELEASE Revenues In the first quarter of 2010, Vale's operating revenues totaled US$ 6.848 billion, with an increase of 4.7% from the total of US$ 6.541 billion in 4Q09. Higher sales prices produced a positive effect of US$ 775 million on operating revenues, which was partially offset by the negative impact of lower volumes ( US$ 468 million.) The strike in two of the Canadian nickel operations, the rainy season in the Southern Hemisphere and operational problems at iron ore maritime terminals contributed to hinder the performance of shipments.