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Information by business segment and by geographic area | 12 Months Ended
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Dec. 31, 2020
Information by business segment and by geographic area |
Information by business segment and by geographic area | 4. Information by business segment and by geographic area The Company operated the following reportable segments during this year: Ferrous Minerals, Base Metals and Coal. The segments are aligned with products and reflect the structure used by Management to evaluate Company’s performance. The responsible bodies for making operational decisions, allocating resources and evaluating performance are the Executive Boards and the Board of Directors. The performance of the operating segments is assessed based on a measure of adjusted EBITDA. The Company has created the Special Recovery and Development Board, which is in-charge of those measures related to the Brumadinho dam rupture (note 23) that reports to the CEO. The costs related to the Brumadinho event are not directly linked to the Company's operating activities and, therefore, are under "Other", as well as, revenues and costs of other products, services, research and development, investments in joint ventures and associates of other businesses and unallocated corporate expenses. The information presented to the Executive Board on the performance of each segment is derived from the accounting records, adjusted for reallocations between segments. The main activities of the operating segments are as follows: Ferrous minerals–Comprise of the production and extraction of iron ore, iron ore pellets, manganese, other ferrous products and its logistic services. Base metals-Include the production and extraction of nickel and its by-products (copper, gold, silver, cobalt, precious metals and others) and copper, as well as its by-products (gold and silver). Coal–Comprise of the production and extraction of metallurgical and thermal coal and its logistic services. Fertilizers (Discontinued operations)-Included the production of potash, phosphate, nitrogen and other fertilizer products, which was discontinued in 2018 (note 15). a) Adjusted EBITDA The definition of Adjusted EBITDA for the Company is the operating income or loss plus dividends received and interest from associates and joint ventures, and excluding the amounts charged as (i) depreciation, depletion and amortization and (ii) impairment and disposal of non-current assets.
|  | Year ended December 31, 2020
|  |  |  |  |  | Sales, |  |  |  |  |  | Dividends |  |
|  |  |  | Cost of goods |  | administrative |  |  |  |  |  | received and |  |
|  |  |  | sold and |  | and other |  |  |  | Pre operating |  | interest from |  |
|  | Net operating |  | services |  | operating |  | Research and |  | and operational |  | associates and |  | Adjusted
|  | revenue |  | rendered |  | expenses |  | evaluation |  | stoppage |  | joint ventures |  | EBITDA
Ferrous minerals |  |  |  |  |  |  |  |  |  |  |  |  |  |
Iron ore |  | 27,285 |  | (8,171) |  | (187) |  | (127) |  | (534) |  | 23 |  | 18,289
Iron ore pellets |  | 4,242 |  | (1,661) |  | 11 |  | (5) |  | (77) |  | 116 |  | 2,626
Ferroalloys and manganese |  | 225 |  | (179) |  | — |  | (2) |  | (29) |  | — |  | 15
Other ferrous products and services |  | 326 |  | (254) |  | 3 |  | (2) |  | — |  | 2 |  | 75
|  | 32,078 |  | (10,265) |  | (173) |  | (136) |  | (640) |  | 141 |  | 21,005
Base metals |  |  |  |  |  |  |  |  |  |  |  |  |  |
Nickel and other products |  | 4,995 |  | (3,216) |  | (25) |  | (49) |  | (29) |  | — |  | 1,676
Copper |  | 2,175 |  | (794) |  | (7) |  | (68) |  | (1) |  | — |  | 1,305
|  | 7,170 |  | (4,010) |  | (32) |  | (117) |  | (30) |  | — |  | 2,981
Coal |  | 473 |  | (1,456) |  | (15) |  | (28) |  | — |  | 95 |  | (931)
Brumadinho event |  | — |  | — |  | (5,257) |  | — |  | — |  | — |  | (5,257)
COVID-19 |  | — |  | — |  | (109) |  | — |  | — |  | — |  | (109)
Others |  | 297 |  | (328) |  | (928) |  | (162) |  | (12) |  | 32 |  | (1,101)
Total |  | 40,018 |  | (16,059) |  | (6,514) |  | (443) |  | (682) |  | 268 |  | 16,588
|  | Year ended December 31, 2019
|  |  |  |  |  | Sales, |  |  |  |  |  | Dividends |  |
|  |  |  | Cost of goods |  | administrative |  |  |  |  |  | received and |  |
|  |  |  | sold and |  | and other |  |  |  | Pre operating |  | interest from |  |
|  | Net operating |  | services |  | operating |  | Research and |  | and operational |  | associates and |  | Adjusted
|  | revenue |  | rendered |  | expenses |  | evaluation |  | stoppage |  | joint ventures |  | EBITDA
Ferrous minerals |  |  |  |  |  |  |  |  |  |  |  |  |  |
Iron ore |  | 23,343 |  | (8,778) |  | (323) |  | (123) |  | (750) |  | 29 |  | 13,398
Iron ore pellets |  | 5,948 |  | (2,666) |  | (20) |  | (16) |  | (72) |  | 258 |  | 3,432
Ferroalloys and manganese |  | 282 |  | (220) |  | (8) |  | (2) |  | (1) |  | — |  | 51
Other ferrous products and services |  | 432 |  | (324) |  | — |  | (1) |  | — |  | 9 |  | 116
|  | 30,005 |  | (11,988) |  | (351) |  | (142) |  | (823) |  | 296 |  | 16,997
Base metals |  |  |  |  |  |  |  |  |  |  |  |  |  |
Nickel and other products |  | 4,257 |  | (2,867) |  | (75) |  | (44) |  | (28) |  | — |  | 1,243
Copper |  | 1,904 |  | (905) |  | (5) |  | (43) |  | (20) |  | — |  | 931
|  | 6,161 |  | (3,772) |  | (80) |  | (87) |  | (48) |  | — |  | 2,174
Coal |  | 1,021 |  | (1,638) |  | 1 |  | (30) |  | — |  | 113 |  | (533)
Brumadinho event |  | — |  | — |  | (7,402) |  | — |  | — |  | — |  | (7,402)
Others |  | 383 |  | (390) |  | (506) |  | (184) |  | (11) |  | 57 |  | (651)
Total |  | 37,570 |  | (17,788) |  | (8,338) |  | (443) |  | (882) |  | 466 |  | 10,585
|  | Year ended December 31, 2018
|  |  |  |  |  | Sales, |  |  |  |  |  | Dividends |  |
|  |  |  | Cost of goods |  | administrative |  |  |  |  |  | received and |  |
|  |  |  | sold and |  | and other |  |  |  | Pre operating |  | interest from |  |
|  | Net operating |  | services |  | operating |  | Research and |  | and operational |  | associates and |  | Adjusted
|  | revenue |  | rendered |  | expenses |  | evaluation |  | stoppage |  | joint ventures |  | EBITDA
Ferrous minerals |  |  |  |  |  |  |  |  |  |  |  |  |  |
Iron ore |  | 20,354 |  | (9,048) |  | (76) |  | (110) |  | (115) |  | 28 |  | 11,033
Iron ore pellets |  | 6,651 |  | (3,393) |  | (11) |  | (26) |  | (19) |  | 154 |  | 3,356
Ferroalloys and manganese |  | 454 |  | (290) |  | (3) |  | (1) |  | — |  | — |  | 160
Other ferrous products and services |  | 474 |  | (313) |  | (4) |  | (1) |  | (1) |  | 7 |  | 162
|  | 27,933 |  | (13,044) |  | (94) |  | (138) |  | (135) |  | 189 |  | 14,711
Base metals |  |  |  |  |  |  |  |  |  |  |  |  |  |
Nickel and other products |  | 4,610 |  | (3,060) |  | (47) |  | (39) |  | (33) |  | — |  | 1,431
Copper |  | 2,093 |  | (960) |  | (4) |  | (18) |  | — |  | — |  | 1,111
|  | 6,703 |  | (4,020) |  | (51) |  | (57) |  | (33) |  | — |  | 2,542
Coal |  | 1,643 |  | (1,575) |  | (9) |  | (21) |  | — |  | 143 |  | 181
Others |  | 296 |  | (263) |  | (752) |  | (157) |  | (21) |  | 56 |  | (841)
Total |  | 36,575 |  | (18,902) |  | (906) |  | (373) |  | (189) |  | 388 |  | 16,593
Discontinued operations (Fertilizers) |  | 121 |  | (120) |  | (4) |  | — |  | — |  | — |  | (3)
Total |  | 36,696 |  | (19,022) |  | (910) |  | (373) |  | (189) |  | 388 |  | 16,590
Adjusted EBITDA is reconciled to net income (loss) as follows: From continuing operations
|  | Year ended December 31,
|  | 2020 |  | 2019 |  | 2018
Net income (loss) attributable to Vale's stockholders |  | 4,881 |  | (1,683) |  | 6,952
Net income (loss) attributable to noncontrolling interests |  | (350) |  | (497) |  | 36
Net income (loss) |  | 4,531 |  | (2,180) |  | 6,988
Depreciation, depletion and amortization |  | 3,234 |  | 3,726 |  | 3,351
Income taxes |  | 438 |  | (595) |  | (172)
Financial results |  | 4,811 |  | 3,413 |  | 4,957
Equity results and other results in associates and joint ventures |  | 1,063 |  | 681 |  | 182
Dividends received and interest from associates and joint ventures (i) |  | 268 |  | 466 |  | 388
Impairment and disposal of non-current assets |  | 2,243 |  | 5,074 |  | 899
Adjusted EBITDA |  | 16,588 |  | 10,585 |  | 16,593
(i) Includes the remuneration of the financial instrument of the Coal segment. From discontinued operations
|  | Year ended
|  | December 31,
|  | 2018
Loss |  | (92)
Income taxes |  | (40)
Financial results |  | 5
Impairment of non-current assets |  | 124
Adjusted EBITDA |  | (3)
b) Assets by segment
|  | December 31, 2020 |  | December 31, 2019
|  |  |  | Investments in |  | Property, plant |  |  |  | Investments in |  | Property, plant
|  | Product |  | associates and |  | and equipment |  | Product |  | associates and |  | and equipment
|  | inventory |  | joint ventures |  | and intangibles (i) |  | inventory |  | joint ventures |  | and intangibles (i)
Ferrous minerals |  | 2,017 |  | 1,154 |  | 29,436 |  | 1,955 |  | 1,729 |  | 33,528
Base metals |  | 1,231 |  | 18 |  | 19,549 |  | 1,354 |  | 14 |  | 19,893
Coal |  | 25 |  | — |  | — |  | 60 |  | — |  | —
Others |  | — |  | 859 |  | 1,459 |  | 2 |  | 1,055 |  | 1,654
Total |  | 3,273 |  | 2,031 |  | 50,444 |  | 3,371 |  | 2,798 |  | 55,075
|  | Year ended December 31,
|  | 2020 |  | 2019 |  | 2018
|  | Capital expenditures (ii) |  |  |  | Capital expenditures (ii) |  |  |  | Capital expenditures (ii) |  |
|  |  |  |  |  | Depreciation, |  |  |  |  |  | Depreciation, |  |  |  |  |  | Depreciation,
|  | Sustaining |  | Project |  | depletion and |  | Sustaining |  | Project |  | depletion and |  | Sustaining |  | Project |  | depletion and
|  | capital |  | execution |  | amortization |  | capital |  | execution |  | amortization |  | capital |  | execution |  | amortization
Ferrous minerals |  | 2,134 |  | 258 |  | 1,768 |  | 1,685 |  | 385 |  | 2,063 |  | 1,569 |  | 823 |  | 1,672
Base metals |  | 1,566 |  | 239 |  | 1,397 |  | 1,225 |  | 151 |  | 1,351 |  | 1,189 |  | 34 |  | 1,351
Coal |  | 203 |  | — |  | 19 |  | 240 |  | — |  | 237 |  | 132 |  | 24 |  | 252
Others |  | 5 |  | 25 |  | 50 |  | 10 |  | 8 |  | 75 |  | 6 |  | 7 |  | 76
Total |  | 3,908 |  | 522 |  | 3,234 |  | 3,160 |  | 544 |  | 3,726 |  | 2,896 |  | 888 |  | 3,351
(i) Goodwill is allocated to ferrous minerals and base metals segments in the amount of US$1,373 and US1,926 in December 31, 2020 and US$1,770 and US$1,859 in December 31, 2019, respectively. (ii) Cash outflows. c) Assets by geographic area
|  | December 31, 2020 |  | December 31, 2019
|  | Investments in |  |  |  | Property, |  |  |  | Investments in |  |  |  | Property, |  |
|  | associates and |  |  |  | plant and |  |  |  | associates and |  |  |  | plant and |  |
|  | joint ventures |  | Intangible |  | equipment |  | Total |  | joint ventures |  | Intangible |  | equipment |  | Total
Brazil |  | 1,760 |  | 7,341 |  | 23,364 |  | 32,465 |  | 2,498 |  | 6,496 |  | 29,134 |  | 38,128
Canada |  | — |  | 1,951 |  | 11,798 |  | 13,749 |  | — |  | 2,000 |  | 10,733 |  | 12,733
Americas, except Brazil and Canada |  | 234 |  | — |  | 5 |  | 239 |  | 242 |  | — |  | — |  | 242
Europe |  | — |  | — |  | 894 |  | 894 |  | — |  | 2 |  | 900 |  | 902
Indonesia |  | — |  | 2 |  | 2,729 |  | 2,731 |  | — |  | 1 |  | 2,761 |  | 2,762
Asia, except Indonesia and China |  | 20 |  | — |  | 951 |  | 971 |  | 39 |  | — |  | 985 |  | 1,024
China |  | 17 |  | 2 |  | 19 |  | 38 |  | 19 |  | — |  | 10 |  | 29
New Caledonia |  | — |  | — |  | — |  | — |  | — |  | — |  | 604 |  | 604
Oman |  | — |  | — |  | 1,388 |  | 1,388 |  | — |  | — |  | 1,449 |  | 1,449
Total |  | 2,031 |  | 9,296 |  | 41,148 |  | 52,475 |  | 2,798 |  | 8,499 |  | 46,576 |  | 57,873
d) Net operating revenue by geographic area
|  | Year ended December 31, 2020
|  | Ferrous |  |  |  |  |  |  |  |
|  | minerals |  | Base metals |  | Coal |  | Others |  | Total
Americas, except United States and Brazil |  | 334 |  | 286 |  | — |  | — |  | 620
United States of America |  | 244 |  | 797 |  | — |  | — |  | 1,041
Germany |  | 357 |  | 1,309 |  | — |  | — |  | 1,666
Europe, except Germany |  | 1,214 |  | 2,356 |  | 101 |  | — |  | 3,671
Middle East, Africa and Oceania |  | 1,418 |  | 17 |  | 68 |  | — |  | 1,503
Japan |  | 1,793 |  | 400 |  | 20 |  | — |  | 2,213
China |  | 22,202 |  | 922 |  | 16 |  | — |  | 23,140
Asia, except Japan and China |  | 2,068 |  | 931 |  | 257 |  | — |  | 3,256
Brazil |  | 2,448 |  | 152 |  | 11 |  | 297 |  | 2,908
Net operating revenue |  | 32,078 |  | 7,170 |  | 473 |  | 297 |  | 40,018
|  | Year ended December 31, 2019
|  | Ferrous |  |  |  |  |  |  |  |
|  | minerals |  | Base metals |  | Coal |  | Others |  | Total
Americas, except United States and Brazil |  | 523 |  | 835 |  | — |  | — |  | 1,358
United States of America |  | 404 |  | 931 |  | — |  | — |  | 1,335
Germany |  | 1,161 |  | 522 |  | — |  | — |  | 1,683
Europe, except Germany |  | 1,514 |  | 1,715 |  | 282 |  | — |  | 3,511
Middle East, Africa and Oceania |  | 2,083 |  | 20 |  | 75 |  | — |  | 2,178
Japan |  | 2,057 |  | 426 |  | 120 |  | — |  | 2,603
China |  | 17,572 |  | 670 |  | — |  | — |  | 18,242
Asia, except Japan and China |  | 2,032 |  | 816 |  | 464 |  | — |  | 3,312
Brazil |  | 2,659 |  | 226 |  | 80 |  | 383 |  | 3,348
Net operating revenue |  | 30,005 |  | 6,161 |  | 1,021 |  | 383 |  | 37,570
|  | Year ended December 31, 2018
|  | Ferrous |  |  |  |  |  |  |  |
|  | minerals |  | Base metals |  | Coal |  | Others |  | Total
Americas, except United States and Brazil |  | 820 |  | 658 |  | — |  | — |  | 1,478
United States of America |  | 388 |  | 952 |  | — |  | 13 |  | 1,353
Germany |  | 1,130 |  | 523 |  | — |  | — |  | 1,653
Europe, except Germany |  | 2,218 |  | 1,800 |  | 436 |  | — |  | 4,454
Middle East, Africa and Oceania |  | 2,562 |  | 25 |  | 151 |  | — |  | 2,738
Japan |  | 2,072 |  | 508 |  | 163 |  | — |  | 2,743
China |  | 14,381 |  | 861 |  | — |  | — |  | 15,242
Asia, except Japan and China |  | 1,798 |  | 1,101 |  | 767 |  | — |  | 3,666
Brazil |  | 2,564 |  | 275 |  | 126 |  | 283 |  | 3,248
Net operating revenue |  | 27,933 |  | 6,703 |  | 1,643 |  | 296 |  | 36,575
Provisionally priced commodities sales–The commodity price risk arises from volatility of iron ore, nickel, copper and coal prices. The Company is mostly exposed to the fluctuations in the iron ore and copper price (note 19). The selling price of these products can be measured reliably at each period, since the price is quoted in an active market. The sensitivity of the Company’s risk on final settlement of provisionally priced accounts receivables are presented below:
|  | December 31, 2020
|  | Thousand |  | Provisional price |  |  |  | Effect
|  | metric tons |  | (US$/tonne) |  | Change |  | on Revenue
Iron ore |  | 27,169 |  | 150.6 |  | +/-10 | % | +/- 409
Iron ore pellets |  | 418 |  | 181.9 |  | +/-10 | % | +/- 8
Copper |  | 89 |  | 9,723.4 |  | +/-10 | % | +/- 86
Accounting policy Revenue is recognized when the control of a good or service transferred to a customer. Since Vale’s sales are under different shipping terms, revenue could be recognized when the product is available at the loading port, loaded on the ship, at the port of discharge or at the customer’s warehouse. A relevant proportion of Vale’s sales are under Cost and Freight (“CFR”) and Cost, Insurance and Freight (“CIF”) Incoterms, in which the Company is responsible for providing shipping services after the date that Vale transfers control of the goods to the customers. Shipping services for CFR and CIF contracts are considered as a separate performance obligation in which a proportion of the transaction price is allocated and recognized over time as the shipping services are provided. Generally, the contract payment terms consider the upfront payments or the use of credit letters. The payment terms do not have a significant financing component. In some cases, the sale price is determined on a provisional basis at the date of sale and adjustments to the sale price subsequently occur based on movements in the quoted market or contractual prices up to the date of final pricing. Revenue is recognized based on the estimated fair value of the total consideration receivable, and the provisionally priced sale mechanism embedded within these sale arrangements has the character of a derivative. Accordingly, the fair value of the final sale price adjustment is re-estimated continuously and changes in fair value are recognized as operational revenue in the income statement.

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