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v3.23.1

Loans, borrowings, leases, cash and cash equivalents and short-term investments | 12 Months Ended
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Dec. 31, 2022
Loans Borrowings Leases Cash And Cash Equivalents And Short-term Investments |
Loans, borrowings, leases, cash and cash equivalents and short-term investments |
| 23. | Loans, borrowings, leases, cash and cash equivalents and short-term investments
a) Net debt The Company monitors the net debt with the objective of ensuring the continuity of its business in the long term.
Schedule of net debt |  |  |  |
|  | December 31, 2022 |  | December 31, 2021
Debt contracts |  | 11,181 |  | 12,180
Leases |  | 1,531 |  | 1,602
Total of loans, borrowings and leases |  | 12,712 |  | 13,782
(-) Cash and cash equivalents |  | 4,736 |  | 11,721
(-) Short-term investments (i) |  | 61 |  | 184
Net debt |  | 7,915 |  | 1,877
(i) | Substantially comprises investments in exclusive investment fund, whose portfolio is composed of committed transactions and Financial Treasury Bills (“LFTs”), which are floating-rate securities issued by the Brazilian government.
b) Cash and cash equivalents
Cash and cash equivalents |  |  |  |
|  | December 31, 2022 |  | December 31, 2021
R$ |  | 1,770 |  | 6,714
US$ |  | 2,798 |  | 4,769
Other currencies |  | 168 |  | 238
|  | 4,736 |  | 11,721
| c) | Loans, borrowings, and leases
i) Total debt
Schedule of total debt |  |  |  |  |  |  |  |  |  |
|  |  |  | Current liabilities |  | Non-current liabilities
|  | Average interest rate (i) |  | December 31, 2022 |  | December 31, 2021 |  | December 31, 2022 |  | December 31, 2021
Quoted in the secondary market: |  |  |  |  |  |  |  |  |  |
US$, Bonds |  | 6.00% |  | - |  | - |  | 6,157 |  | 7,448
R$, Debentures (ii) |  | 10.09% |  | 47 |  | 186 |  | 186 |  | 201
Debt contracts in Brazil in (iii): |  |  |  |  |  |  |  |  |  |
R$, indexed to TJLP, TR, IPCA, IGP-M and CDI |  | 10.62% |  | 46 |  | 95 |  | 232 |  | 259
R$, with fixed interest |  | 3.04% |  | 2 |  | 12 |  | - |  | 1
Basket of currencies and bonds in US$ indexed to LIBOR |  | 2.32% |  | - |  | 11 |  | - |  | -
Debt contracts in the international market in: |  |  |  |  |  |  |  |  |  |
US$, with variable and fixed interest |  | 5.03% |  | 54 |  | 479 |  | 4,212 |  | 3,136
Other currencies, with variable interest |  | 4.10% |  | - |  | 77 |  | 9 |  | 10
Other currencies, with fixed interest |  | 3.59% |  | 11 |  | 12 |  | 78 |  | 95
Accrued charges |  |  |  | 147 |  | 158 |  | - |  | -
|  |  |  | 307 |  | 1,030 |  | 10,874 |  | 11,150
(i) | In order to determine the average interest rate for debt contracts with floating rates, the Company used the rate applicable at December 31, 2022.
(ii) | The Company has debentures in Brazil with BNDES obtained for the Company's infrastructure investment projects.
(iii) | The Company entered into derivatives to mitigate the exposure to cash flow variations of all floating rate debt contracted in Brazil, resulting in an average cost of 3.59% per year in US$.
Future flows of debt payments, principal and interest
Schedule of reconciliation of debt to cash flows arising from financing activities |  |  |  |
|  | Principal |  | Estimated future interest payments (i)
2023 |  | 160 |  | 674
2024 |  | 611 |  | 662
2025 |  | 452 |  | 637
2026 |  | 847 |  | 609
2027 |  | 1,696 |  | 501
Between 2028 and 2030 |  | 2,825 |  | 1,267
2031 onwards |  | 4,443 |  | 2,056
|  | 11,034 |  | 6,406
(i) | Based on interest rate curves and foreign exchange rates applicable as at December 31, 2022 and considering that the payments of principal will be made on their contracted payments dates. The amount includes the estimated interest not yet accrued and the interest already recognized in the financial statements.
Covenants Some of the Company’s debt agreements with lenders contain financial covenants. The primary financial covenants in those agreements require maintaining certain ratios, such as debt to EBITDA (as defined in note 4a) and interest coverage. The Company did not identify any instances of noncompliance as at December 31, 2022. ii) Lease liabilities
Schedule of lease liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | December 31, 2021 |  | Additions and contract modifications |  | Payments (i) |  | Interest |  | Transfer to liabilities held for sale |  | Translation adjustment |  | December 31, 2022
Ports |  | 713 |  | 23 |  | (69) |  | 29 |  | (17) |  | 11 |  | 690
Vessels |  | 489 |  | - |  | (63) |  | 17 |  | - |  | (2) |  | 441
Pelletizing plants |  | 225 |  | 20 |  | (47) |  | 11 |  | - |  | 13 |  | 222
Properties |  | 103 |  | 22 |  | (32) |  | 3 |  | - |  | 9 |  | 105
Energy plants |  | 59 |  | - |  | (7) |  | 3 |  | - |  | (3) |  | 52
Mining equipment and locomotives |  | 13 |  | 12 |  | (6) |  | 2 |  | - |  | - |  | 21
Total |  | 1,602 |  | 77 |  | (224) |  | 65 |  | (17) |  | 28 |  | 1,531
Current liabilities |  | 174 |  |  |  |  |  |  |  |  |  |  |  | 182
Non-current liabilities |  | 1,428 |  |  |  |  |  |  |  |  |  |  |  | 1,349
Total |  | 1,602 |  |  |  |  |  |  |  |  |  |  |  | 1,531
(i) | The total amount of the variable lease payments not included in the measurement of lease liabilities, which have been recognized straight to the income statement, for the year ended December 31, 2022, 2021 and 2020 was US$367, US$395 and US$63, respectively.
Annual minimum payments and remaining lease term The following table presents the undiscounted lease obligation by maturity date. The lease liability recognized in the balance sheet is measured at the present value of such obligations.
Summary of annual minimum payments related |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | 2023 |  | 2024 |  | 2025 |  | 2026 |  | 2027 onwards |  | Total |  | Average remaining term (years) |  | Discount rate
Ports |  | 66 |  | 66 |  | 65 |  | 53 |  | 700 |  | 950 |  | 1 to 20 |  | 3% to 5%
Vessels |  | 62 |  | 60 |  | 59 |  | 54 |  | 292 |  | 527 |  | 2 to 10 |  | 3% to 4%
Pelletizing plants |  | 53 |  | 44 |  | 42 |  | 15 |  | 101 |  | 255 |  | 1 to 10 |  | 2% to 5%
Properties |  | 36 |  | 25 |  | 15 |  | 14 |  | 31 |  | 121 |  | 1 to 7 |  | 2% to 6%
Energy plants |  | 6 |  | 5 |  | 5 |  | 5 |  | 45 |  | 66 |  | 1 to 7 |  | 5% to 6%
Mining equipment |  | 6 |  | 5 |  | 5 |  | 4 |  | 3 |  | 23 |  | 1 to 5 |  | 2% to 6%
Total |  | 229 |  | 205 |  | 191 |  | 145 |  | 1,172 |  | 1,942 |  |  |  |
Accounting policy Loans and borrowings are initially measured at fair value, net of transaction costs incurred and are subsequently carried at amortized cost and updated using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the Income statement over the period of the loan, using the effective interest rate method. The fees paid in obtaining the loan are recognized as transaction costs. The Company contracts derivatives to protect its exposure to changes in debt cash flows, changing the average cost of debts that have hedge derivatives contracted. Loans and borrowing costs are capitalized as part of property, plants and equipment if those costs are directly related to a qualified asset. The capitalization occurs until the qualified asset is ready for its intended use. In 2022, 7% (2021: 9%) of total interest incurred was capitalized (note 6). Borrowing costs that are not capitalized are recognized in the income statement in the period in which they are incurred. The accounting policy applied to lease liabilities is disclosed in note 18.

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- Definition The disclosure of borrowings. [Refer: Borrowings] + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Name IAS -Number 1 -IssueDate 2022-03-24 -Paragraph 10 -Subparagraph e -URI https://taxonomy.ifrs.org/xifrs-link?type=IAS&num=1&code=ifrs-tx-2022-en-r&anchor=para_10_e&doctype=Standard -URIDate 2022-03-24 + Details
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