XML 33 R24.htm IDEA: XBRL DOCUMENT
v3.24.3

Financial and capital risk management | 6 Months Ended
--- | ---
Jun. 30, 2024
Notes and other explanatory information [abstract] |
Financial and capital risk management | 18. Financial and capital risk management a) Effects of derivatives on the statement of financial position
Schedule of derivatives effects on statement of financial position |  |
| June 30, 2024 | December 31, 2023
| Assets | Liabilities | Assets | Liabilities
Foreign exchange and interest rate risk |  |  |  |
CDI & TJLP vs. US$ fixed and floating rate swap | 13 | 70 | 109 | 30
IPCA swap | - | 57 | - | 41
Dollar swap and forward transactions | 230 | 100 | 650 | -
SOFR swap | 16 | - | 4 | 28
Treasury forwards | 1 | 7 | - | -
| 260 | 234 | 763 | 99
Commodities price risk |  |  |  |
Gasoil, Brent and freight | 16 | - | 52 | 22
Energy Transition Metals | 1 | 5 | - | 8
| 17 | 5 | 52 | 30
Other | - | 1 | - | 2
Total | 277 | 240 | 815 | 131
b) Net exposure
Schedule of net exposure |  |
| June 30, 2024 | December 31, 2023
Foreign exchange and interest rate risk |  |
CDI & TJLP vs. US$ fixed and floating rate swap | (57) | 79
IPCA swap | (57) | (41)
Dollar swap and forward transactions | 130 | 650
SOFR swap | 16 | (24)
Treasury forwards | (6) | -
| 26 | 664
Commodities price risk |  |
Gasoil, Brent and freight | 16 | 30
Energy Transition Metals | (4) | (8)
| 12 | 22
Other | (1) | (2)
Total | 37 | 684
c) Effects of derivatives on the income statement
Schedule of effects of derivatives on income statement and cash flow |  |  |  |
| Gain (loss) recognized in the income statement
| Three-month period ended June 30, | Six-month period ended June 30,
| 2024 | 2023 | 2024 | 2023
Foreign exchange and interest rate risk |  |  |  |
CDI & TJLP vs. US$ fixed and floating rate swap | (117) | 134 | (130) | 178
IPCA swap | (23) | 23 | (28) | 30
Dollar swap and forward operations | (318) | 376 | (346) | 538
SOFR swap | 12 | 12 | 44 | 15
Treasury forwards | (9) | 13 | (9) | 13
| (455) | 558 | (469) | 774
Commodities price risk |  |  |  |
Gasoil, Brent and freight | (19) | 4 | (2) | (20)
Energy Transition Metals | 1 | - | 1 | (1)
| (18) | 4 | (1) | (21)
Other | 2 | 1 | 1 | 2
Total | (471) | 563 | (469) | 755
d) Effects of derivatives on the cash flows
Schedule of effects of derivatives on cash flows |
| Financial settlement inflows (outflows)
| Six-month period ended June 30,
| 2024 | 2023
Foreign exchange and interest rate risk |  |
CDI & TJLP vs. US$ fixed and floating rate swap | 1 | (8)
IPCA swap | (4) | 3
Dollar swap and forward operations | 117 | 118
LIBOR swap | - | 4
SOFR swap | 4 | -
Treasury forwards | (3) | 13
| 115 | 130
Commodities price risk |  |
Gasoil, Brent and freight | 12 | 3
Energy Transition Metals | (3) | 5
| 9 | 8
Derivatives designated as cash flow hedge accounting |  |
Nickel | - | 34
| - | 34
Total | 124 | 172
e) Market risk - Foreign exchange and interest rates Protection programs for the R$ denominated debt instruments and other liabilities
Schedule of protection program |  |  |  |  |  |  |
| Notional |  |  | Fair value | Financial Settlement Inflows (Outflows) | Value at Risk | Fair value by year
Flow | June 30, 2024 | December 31, 2023 | Index | Average rate | June 30, 2024 | December 31, 2023 | June 30, 2024 | June 30, 2024 | 2024 | 2025 | 2026+
CDI vs. US$ fixed rate swap |  |  |  |  | (16) | 107 | 3 | 14 | (2) | (2) | (12)
Receivable | R$ 4,581 | R$ 5,162 | CDI | 100.00% |  |  |  |  |  |  |
Payable | US$ 1,061 | US$ 1,196 | Fix | 1.70% |  |  |  |  |  |  |
TJLP vs. US$ fixed rate swap |  |  |  |  | (41) | (28) | (2) | 2 | (4) | (9) | (28)
Receivable | R$ 599 | R$ 694 | TJLP + | 1.07% |  |  |  |  |  |  |
Payable | US$ 149 | US$ 173 | Fix | 3.47% |  |  |  |  |  |  |
|  |  |  |  | (57) | 79 | 1 | 16 | (6) | (11) | (40)
IPCA swap vs. US$ fixed rate swap |  |  |  |  | (57) | (41) | (4) | 3 | (4) | (10) | (43)
Receivable | R$ 924 | R$ 1,078 | IPCA + | 4.54% |  |  |  |  |  |  |
Payable | US$ 228 | US$ 267 | Fix | 3.86% |  |  |  |  |  |  |
|  |  |  |  | (57) | (41) | (4) | 3 | (4) | (10) | (43)
R$ fixed rate vs. US$ fixed rate swap |  |  |  |  | 187 | 600 | 97 | 35 | 62 | 124 | 1
Receivable | R$ 14,004 | R$ 12,660 | Fix | 6.75% |  |  |  |  |  |  |
Payable | US$ 2,705 | US$ 2,431 | Fix | 0.97% |  |  |  |  |  |  |
Forward | R$ 8,335 | R$ 1,209 | B | 5.27 | (57) | 50 | 20 | 20 | (62) | 4 | 1
|  |  |  |  | 130 | 650 | 117 | 55 | - | 128 | 2
The sensitivity analysis of these derivative financial instruments is presented as follows:
Schedule of sensitivity analysis of derivative financial instruments |  |  |  |
Instrument | Instrument's main risk events | Fair value | Scenario I (∆ of 25%) | Scenario II (∆ of 50%)
CDI vs. US$ fixed rate swap | R$ depreciation | (16) | (277) | (538)
| US$ interest rate inside Brazil decrease | (16) | (47) | (81)
| Brazilian interest rate increase | (16) | (41) | (65)
Protected item: R$ denominated liabilities | R$ depreciation | n.a. | - | -
TJLP vs. US$ fixed rate swap | R$ depreciation | (41) | (76) | (112)
| US$ interest rate inside Brazil decrease | (41) | (45) | (50)
| Brazilian interest rate increase | (41) | (46) | (51)
| TJLP interest rate decrease | (41) | (44) | (48)
Protected item: R$ denominated debt | R$ depreciation | n.a. | - | -
IPCA swap vs. US$ fixed rate swap | R$ depreciation | (57) | (112) | (167)
| US$ interest rate inside Brazil decrease | (57) | (63) | (70)
| Brazilian interest rate increase | (57) | (65) | (74)
| IPCA index decrease | (57) | (61) | (65)
Protected item: R$ denominated debt | R$ depreciation | n.a. | - | -
R$ fixed rate vs. US$ fixed rate swap | R$ depreciation | 187 | (459) | (1,104)
| US$ interest rate inside Brazil decrease | 187 | 158 | 127
| Brazilian interest rate increase | 187 | 136 | 88
Protected item: R$ denominated debt | R$ depreciation | n.a. | - | -
Forward | R$ depreciation | (57) | (436) | (814)
| US$ interest rate inside Brazil decrease | (57) | (57) | (57)
| Brazilian interest rate increase | (57) | (57) | (57)
Protected item: R$ denominated liabilities | R$ depreciation | n.a. | - | -
Protection program for interest rate US$ denominated debt
Schedule of protection program for interest |  |  |  |  |  |  |
| Notional |  |  | Fair value | Financial Settlement Inflows (Outflows) | Value at Risk | Fair value by year
Flow | June 30, 2024 | December 31, 2023 | Index | Average rate | June 30, 2024 | December 31, 2023 | June 30, 2024 | June 30, 2024 | 2024 | 2025 | 2026+
SOFR vs. US$ fixed rate swap |  |  |  |  | 16 | (24) | 4 | 5 | - | 12 | 4
Receivable | US$ 2,150 | US$ 2,300 | SOFR | 0.00% |  |  |  |  |  |  |
Payable | US$ 2,150 | US$ 2,300 | Fix | 3.77% |  |  |  |  |  |  |
|  |  |  |  | 16 | (24) | 4 | 5 | - | 12 | 4
The sensitivity analysis of these derivative financial instruments is presented as follows:
Schedule of sensitivity analysis |  |  |  |  |  |
Instrument |  | Instrument's main risk events |  | Fair value | Scenario I (∆ of 25%) | Scenario II (∆ of 50%)
SOFR vs. US$ fixed rate swap |  | US$ SOFR decrease |  | 16 | (36) | (91)
Protected item: SOFR US$ indexed debt |  | US$ SOFR decrease |  | n.a | 36 | 91
Protection for American treasury volatility related to bond issuance and tender offer transactions Due to the volatility of the United States Treasury (“UST”), a treasury lock transaction was implemented to preserve the issuance of new bond occurred in June 2024 and the tender offer occurred in July 2024 (subsequent event).
Schedule of protection American treasury volatility |  |  |  |  |  |  |
| Notional |  |  | Fair value | Financial Settlement Inflows (Outflows) | Value at Risk | Fair value by year
Flow | June 30, 2024 | December 31, 2023 | Bought / Sold | Average rate | June 30, 2024 | December 31, 2023 | June 30, 2024 | June 30, 2024 | 2024
Treasury forwards | US$ 1,130 | - | S | 4.44% | (6) | - | - | 3 | (6)
Treasury forwards | - | - | B | - | - | - | (3) | - | -
The sensitivity analysis of these derivative financial instruments is presented as follows:
Schedule of derivative financial instruments |  |  |  |
Instrument | Instrument's main risk events | Fair value | Scenario I (∆ of 25%) | Scenario II (∆ of 50%)
NDF Tresury | Treasury increase | (6) | (46) | (81)
Protected item: Treasury US$ indexed bonds | Treasury increase | N/A | 46 | 81
f) Protection program for product prices and input costs
Schedule of protection program for product price |  |  |  |  |  |  |
| Notional |  |  | Fair value | Financial settlement Inflows (Outflows) | Value at Risk | Fair value by year
Flow | June 30, 2024 | December 31, 2023 | Bought / Sold | Average strike (US$) | June 30, 2024 | December 31, 2023 | June 30, 2024 | June 30, 2024 | 2024
Brent crude oil (bbl) |  |  |  |  |  |  |  |  |
Call options | 12,763,500 | 19,907,250 | B | 91 | 12 | 45 | 1 | 7 | 12
Put options | 12,763,500 | 19,907,250 | S | 59 | - | (22) | - | - | -
Forward Freight Agreement (days) |  |  |  |  |  |  |  |  |
Freight forwards | 330 | 1,210 | B | 15,636 | 4 | 7 | 11 | 1 | 4
|  |  |  |  | 16 | 30 | 12 | 8 | 16
The sensitivity analysis of these derivative financial instruments is presented as follows:
Schedule of sensitivity analysis financial instruments |  |  |  |
Instrument | Instrument's main risk events | Fair value | Scenario I (∆ of 25%) | Scenario II (∆ of 50%)
Brent crude oil (bbl) |  |  |  |
Options | Price input decrease | 12 | (14) | (214)
Protected item: Part of costs linked to fuel oil prices | Price input decrease | n.a. | 14 | 214
Forward Freight Agreement (days) |  |  |  |
Forwards | Freight price decrease | 4 | 2 | (1)
Protected item: Part of costs linked to maritime freight prices | Freight price decrease | n.a. | (2) | 1
g) Other derivatives, including embedded derivatives in contracts
Schedule of other derivatives |  |  |  |  |  |  |
| Notional |  |  | Fair value | Financial settlement Inflows (Outflows) | Value at Risk | Fair value by year
Flow | June 30, 2024 | December 31, 2023 | Bought / Sold | Average strike (US$/ton) | June 30, 2024 | December 31, 2023 | June 30, 2024 | June 30, 2024 | 2024 | 2025+
Fixed price nickel sales protection (ton) |  |  |  |  |  |  |  |  |  |
Nickel forwards | 3,402 | 3,322 | B | 18,579 | (4) | (8) | (3) | 2 | (3) | (1)
|  |  |  |  | (4) | (8) | (3) | 2 | (3) | (1)
Embedded derivative (pellet price) in natural gas purchase (volume/month) |  |  |  |  |  |  |  |  |  |
Call options | 746,667 | 746,667 | S | 233 | (1) | (2) | - | 1 | (1) | -
|  |  |  |  | (1) | (2) | - | 1 | (1) | -
The sensitivity analysis of these derivative financial instruments is presented as follows:
Schedule of Sensitivity analysis of other derivatives financial instruments |  |  |  |
Instrument | Instrument's main risk events | Fair value | Scenario I (∆ of 25%) | Scenario II (∆ of 50%)
Fixed price sales protection (ton) |  |  |  |
Forwards | Nickel price decrease | (4) | (19) | (33)
Protected item: Part of nickel revenues with fixed prices | Nickel price decrease | n.a. | 19 | 33
Embedded derivative (pellet price) in natural gas purchase agreement (volume/month) |  |  |  |
Embedded derivatives - Gas purchase | Pellet price increase | (1) | (4) | (10)
h) Hedge accounting
Schedule of effects of derivatives on other comprehensive income |
| Gain (loss) recognized in the other comprehensive income
| Three-month period ended June 30, | Six-month period ended June 30,
| 2024 | 2023 | 2024 | 2023
Net investments hedge | (202) | 95 | (258) | 144
Cash flow hedge (i) | - | (4) | - | 15
(i) In 2023, the Company had a nickel revenue hedge program contracted, which expired on December 31, 2023. In 2024, there was no revenue hedge programs in place. i) Financial counterparties’ ratings The transactions of derivative instruments, cash and cash equivalents, as well as short-term investments are held with financial institutions whose exposure limits are periodically reviewed and approved by the delegated authority. The financial institutions credit risk is performed through a methodology that considers, among other information, ratings provided by international rating agencies. The table below presents the ratings in foreign currency as published by Moody’s regarding the main financial institutions used by the Company to contract financial instruments, including derivative financial instruments.
Summary of ratings published by Moody's regarding the main financial institutions |  |
| June 30, 2024 | December 31, 2023
| Cash and cash equivalents and investment | Derivatives | Cash and cash equivalents and investment | Derivatives
Aa2 | 706 | 1 | 338 | -
Aa3 | - | 1 | 42 | -
A1 | 2,587 | 26 | 2,022 | 50
A2 | 608 | 104 | 309 | 293
A3 | 1,146 | 3 | 186 | 22
Baa1 | - | - | 2 | -
Baa2 | 20 | - | 16 | -
Ba1 (i) | 100 | - | 85 | -
Ba2 (i) | 782 | 99 | 287 | 314
Ba3 (i) | 591 | 43 | 373 | 136
| 6,540 | 277 | 3,660 | 815
(i) A substantial part of the balances is held with financial institutions in Brazil which are deemed investment grade in local currency.

X
- Definition The disclosure of the entity's financial risk management practices and policies. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Name IAS -Number 1 -IssueDate 2023-01-01 -Paragraph 10 -Subparagraph e -URI https://taxonomy.ifrs.org/xifrs-link?type=IAS&num=1&code=ifrs-tx-2023-en-r&anchor=para_10_e&doctype=Standard -URIDate 2023-03-23 + Details
Name: | ifrs-full_DisclosureOfFinancialRiskManagementExplanatory
Namespace Prefix: | ifrs-full_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | ifrs-full_NotesAndOtherExplanatoryInformationAbstract
Namespace Prefix: | ifrs-full_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration