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Equity
 12 Months Ended
Dec. 31, 2024
Disclosure Equity Abstract  
Equity

31. Equity

 

 

a)       Share capital

 

As of December 31, 2024, the share capital was US$61,614 corresponding to 4,539,007,580 shares issued and fully paid without par value. The Board of Directors may, regardless of changes to by-laws, approve the issue and cancelation of common shares, including the capitalization of profits and reserves to the extent authorized.

 

     
  December 31, 2024
Shareholders Common shares Golden shares Total
Previ (i) 397,061,482   397,061,482
Mitsui&co (i) 286,347,055 - 286,347,055
Blackrock, Inc (ii) 289,063,618 - 289,063,618
Total shareholders with more than 5% of capital (i) 972,472,155 - 972,472,155
Free floating 3,296,247,846 - 3,296,247,846
Golden shares - 12 12
Total outstanding (without shares in treasury) 4,268,720,001 12 4,268,720,013
Shares in treasury 270,287,567 - 270,287,567
Total capital 4,539,007,568 12 4,539,007,580

  

(i)Number of shares owned by shareholders, as per statement provided by the custodian, based on shares listed at B3.
(ii)Number of shares as reported in Blackrock, Inc.’s Schedule 13G/A, filed with the SEC.

 

b) Cancelation of treasury shares

 

During 2023 and 2022, the Board of Directors approved cancellations of common shares issued by the Company, acquired and held in treasury, without reducing the amount of its share capital, as shown below. The effects were transferred in shareholders' equity as "Treasury shares cancelled", between the "Revenue reserve" and "Treasury shares". There were no shares cancelations in 2024.

 

   
  Number of canceled shares Carrying amount
Cancelation approved on March 2, 2023 239,881,683 4,164
Year ended December 31, 2023 239,881,683 4,164
     
Cancelation approved on February 24, 2022 133,418,347 2,830
Cancellation approved on July 28, 2022 220,150,800 3,786
Year ended December 31, 2022 353,569,147 6,616

 

c)Share buyback program

 

On February 19, 2025 (subsequent event), the Board of Directors approved the common shares buyback program, limited to a maximum of 120,000,000 common shares or their respective ADRs, with a term of 18 months started from the end of the ongoing program.

 

In 2023 and 2022, the Board of Directors approved shares buyback programs for Vale’s shares, as described below:

 

           
  Total of shares repurchased Effect on cash flows
  Year ended December 31,
  2024 2023 2022 2024 2023 2022
Shares buyback program up to 150,000,000 shares (i)            
Acquired by Parent 18,251,159 1,500,000 - 240 22 -
Acquired by wholly owned subsidiaries 12,672,414 1,500,000 - 169 22 -
  30,923,573 3,000,000 - 409 44 -
             
Shares buyback program up to 500,000,000 shares (ii)            
Acquired by Parent - 93,638,352 87,779,900 - 1,378 1,375
Acquired by wholly owned subsidiaries - 88,058,750 90,847,177 - 1,292 1,410
  - 181,697,102 178,627,077 - 2,670 2,785
             
Shares buyback program up to 470,000,000 shares (iii)            
Acquired by Parent - - 81,855,600 - - 1,501
Acquired by wholly owned subsidiaries - - 96,959,900 - - 1,750
  - - 178,815,500 - - 3,251
Shares buyback program 30,923,573 184,697,102 357,442,577 409 2,714 6,036

 

(i)On October 26, 2023, a new share buyback program limited to a maximum of 150,000,000 common shares and their respective ADRs, over the next 18 months started from the end of the program previously on going.
(ii)On April 27, 2022, the Board of Directors approved the common shares buyback program, limited to a maximum of 500,000,000 common shares or their respective ADRs, with a term of 18 months.
(iii)On April 1, 2021, the Board of Directors approved the common shares buyback program, limited to a maximum of 270,000,000 common shares or their respective ADRs. In continuation of the previous program, the Board of Directors approved a new share repurchase program on October 28, 2021, with a limit of up to 200,000,000 common shares or their respective ADRs. Both programs ended in 2022.

 

 

d) Profit distribution

 

     
  2024 2023 2022
Net income of the year 6,166 7,983 18,788
Appropriation to legal reserve (i) - - (276)
Appropriation to tax incentive reserve (392) (891) (1,157)
Net income after appropriations to legal reserve and tax incentive reserve 5,774 7,092 17,355
       
Minimum remuneration to shareholders (ii) 1,698 2,042 4,386
       
Additional shareholders' remuneration      
According to shareholder remuneration policy (iii) 1,394 2,066 437
Additional remuneration from the net income for the year (iv) 500 2,000 -
       
Total remuneration to shareholders 3,592 6,108 4,823
Appropriation to statutory reserve 2,182 984 8,821
Appropriation to retained earnings reserve - - 3,711

 

(i)In 2022, the limit of 20% of the share capital for the constitution of the legal reserve was reached, in accordance with article 193 of Law 6,404 and article 39 of the Company's Bylaws.
(ii)Mandatory minimum remuneration corresponding to 25% of the net income after appropriations to legal reserve and tax incentive reserve. according to Vale S.A.’s by-laws.
(iii)According to the Company's shareholder remuneration policy, minimum remuneration to Vale S.A. shareholders is calculated based on 30% of the adjusted EBITDA (as defined in note 5) less sustaining capital investments, which represented US$4,538 (2023: US$4,269 and 2022: US$3,897) for the year ended December 31, 2024. Therefore, the additional remuneration to comply with the policy was US$1,394.
(iv)In addition, the Company approved dividends beyond the policy calculation in the amount of US$500, totaling US$3,592 in remuneration to shareholders for the year ended December 31, 2024.

 

Remuneration approved

 

The Company's By-laws determines as its minimum mandatory remuneration to Vale shareholders an amount equal to 25% of the net income, after appropriations to legal and tax incentive reserves. The remuneration approved as interest on capital (“JCP”) is gross up with the income tax applicable to Vale’s shareholders. The remuneration to Vale’s shareholders was based on the following resolutions:

 

·On February 19, 2025 (subsequent event), the Board of Directors approved dividends to shareholders in the total amount of US$1,596 (R$9,143 million), approved as additional remuneration. The payment is expected by March 2025.

 

·On November 28, 2024, the Board of Directors approved interest on equity to shareholders in the amount of US$388 (R$2,222 million), which will be paid in March 2025 as remuneration for the year ending December 31, 2024.

 

·On July 25, 2024, the Board of Directors approved interest on capital to its shareholders in the total amount of

US$1,608 (R$8,940 million), as an anticipation of the remuneration for the year ended December 31, 2024. This remuneration was fully paid in September 2024.

 

·On February 22, 2024, the Board of Directors has approved remuneration to shareholders in the total amount of US$2,364 (R$11,722 million). The total amount was approved as dividends and recorded in equity as “Additional remuneration reserve”. The payment was fully paid in March 2024.

 

·On October 26, 2023, the Board of Directors approved an additional remuneration to its shareholders in the amount of US$2,000 (R$10,033 million) as an anticipation of the shareholders remuneration for the year ending December 31, 2023, of which US$657 (R$3,295 million) was approved as interest on capital and US$1,343 (R$6,738 million) as dividends. The payment of this remuneration was fully paid in December 2023.

 

·On July 27, 2023, the Board of Directors approved interest on capital to its shareholders in the amount of US$1,744 (R$8,277 million) as an anticipation of remuneration for the year ended December 31, 2023. The payment of this remuneration was fully paid in September 2023.

 

·On February 16, 2023, the Board of Directors approved the shareholder’s remuneration of R$8,130 (US$1,569 million), of which R$5,865 (US$1,132 million) is part of the minimum mandatory remuneration, recorded as a liability for the year ended December 31, 2022, and R$2,265 (US$437 million) as an additional remuneration, recorded in equity as “Additional remuneration reserve”. The payment of this remuneration was fully paid in March 2023.

 

·On December 1, 2022, the Board of Directors approved interest on capital to shareholders in the amount of US$254 (R$1,319 million), as an anticipation of the income for the year ended December 31, 2022, which is part of the minimum mandatory remuneration, recorded as a liability for the year ended December 31, 2022. The payment of this remuneration was fully paid in March 2023.

 

·On July 28, 2022, the Board of Directors approved the remuneration to shareholders in the amount of US$3,000 (R$16,243 million), which is part of the minimum mandatory remuneration, recorded as a liability for the year ended December 31, 2022. The payment of this remuneration was fully paid in September 2022.

 

·On February 24, 2022, the Board of Directors approved the remuneration to shareholders in the amount of US$3,500 (R$17,849 million) as an additional remuneration for the year ended December 31, 2021, recorded in equity as “Additional remuneration reserve”. The payment of this remuneration was fully paid in March 2022.

 

e) Profit reserves

 

                       
    Legal reserve   Tax incentive reserve    Statutory reserve   Retained earnings reserve   Additional remuneration reserve   Total of profit reserves
Balance as of December 31, 2021   2,523   3,083   6,898   -   3,198   15,702
Allocation of income   276   1,157   8,821   3,711   437   14,402
Deliberated dividends and interest on capital of Vale's shareholders   -   -   -   -   (3,500)   (3,500)
Treasury shares cancellation   -   -   (6,616)   -   -   (6,616)
Transfer of reserves   -   3   (3)   -   -   -
Translation adjustment   165   173   249   (133)   302   756
Balance as of December 31, 2022   2,964   4,416   9,349   3,578   437   20,744
Allocation of income   -   891   984   -   2,364   4,239
Deliberated dividends and interest on capital of Vale's shareholders   -   -   -   -   (437)   (437)
Treasury shares cancellation   -   -   (4,164)   -   -   (4,164)
Translation adjustment   230   383   604   278   -   1,495
Balance as of December 31, 2023   3,194   5,690   6,773   3,856   2,364   21,877
Allocation of income   -   392   2,182   -   1,596   4,170
Deliberated dividends and interest on capital of Vale's shareholders   -   -   -   -   (2,364)   (2,364)
Translation adjustment   (696)   (1,308)   (2,162)   (841)   -   (5,007)
Balance as of December 31, 2024   2,498   4,774   6,793   3,015   1,596   18,676
                         

 

Legal reserve - Is a legal requirement for Brazilian public companies to retain 5% of the annual net income up to 20% of the capital. The reserve can only be used to compensate losses or to increase capital. The reserve can only be used to absorb losses or to increase capital. In 2022, the limit of 20% of the share capital for the constitution of the legal reserve was reached, in accordance with article 193 of Law No. 6,404 and article 39 of the Company's Bylaws.

 

Tax incentive reserve - Results from the option to designate a portion of the income tax for investments in projects approved by the Brazilian Government as well as tax incentives.

 

Statutory reserve - Aims to ensure the maintenance and development of the main activities that comprise the Company’s operations and to retain budgeted capital for investments. Based on the Company’s by-laws, this reserve is capped to 50% of the annual distributable net income, up to the amount of the share capital.

 

Retained earnings reserve – It is intended to be used in investments for capital expenditures as allowed by the Brazilian Corporate Law.

 

Additional remuneration reserve - Results from the remuneration proposed by Management that exceeds the mandatory minimum remuneration of 25% of the adjusted net income.

 

 

Accounting policy

 

Share capital and treasury shares - The Company holds shares in treasury for a future sale, cancellation or for the payment of the executives' long-term compensation programs. These shares are recognized in a specific account as a reduction of equity to the acquisition value and maintained at the cost of the transaction. Incremental costs directly attributable to the issue of new shares or options are recognized in equity as a deduction from the amount raised, net of taxes.

 

Shareholder’s remuneration - The shareholder’s remuneration is paid on dividends and interest on capital. This remuneration is recognized as a liability in the financial statements of the Company based on bylaws. Any amount above the minimum mandatory remuneration approved by the by-laws shall only be recognized in current liabilities on the date that is approved by shareholders.

 

The Company is permitted to distribute interest attributable to equity. The calculation is based on the equity amounts as stated in the statutory accounting records and the interest rate applied may not exceed the Brazilian Government Long-term Interest Rate (“TJLP”) determined by the Central Bank of Brazil. Also, such interest may not exceed 50% of the net income for the year or 50% of retained earnings plus profit reserves as determined by Brazilian corporate law.

 

The benefit to the Company, as opposed to making a dividend payment, is a reduction in the income tax burden because this interest charge is tax deductible in Brazil. Income tax of 15% is withheld on behalf of the shareholders relative to the interest distribution. Under Brazilian law, interest attributed to equity is considered as part of the annual minimum mandatory dividend. This notional interest distribution is treated for accounting purposes as a deduction from equity in a manner similar to a dividend and the tax deductibility recorded in the income statement.