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United States
Securities and Exchange Commission

Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the
Securities Exchange Act of 1934

For the month of

July 2012

Vale S.A.

Avenida Graça Aranha, No. 26
20030-900 Rio de Janeiro, RJ, Brazil

(Address of principal executive office)

(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)

(Check One) Form 20-F  x  Form 40-F  o

(Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1))

(Check One) Yes  o  No   x

(Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7))

(Check One) Yes  o  No   x

(Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)

(Check One) Yes o  No  x

(If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b). 82-   .)

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Table of Contents:

Press Release

Signature Page

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(1)  Non-recurring effect of accounting losses of US$ 377 million in 2Q12 related to the divestment of the thermal coal assets in Colombia and manganese ferroalloys in Europe.

US GAAP

   2Q12

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Table 1 - SELECTED FINANCIAL INDICATORS

(1) ROIC LTM=return on invested capital for the last twelve-month period.

Except where otherwise indicated the operational and financial information in this release is based on the consolidated figures in accordance with US GAAP and, with the exception of information on investments and behavior of markets, quarterly financial

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statements are reviewed by the company’s independent auditors. The main subsidiaries that are consolidated are the following: Compañia Minera Miski Mayo S.A.C., Ferrovia Centro-Atlântica S.A.(FCA), Ferrovia Norte Sul S.A, Mineração Corumbaense Reunida S.A., PT Vale Indonesia Tbk (formerly International Nickel Indonesia Tbk), Sociedad Contractual Minera Tres Valles, Vale Australia Pty Ltd., Vale International Holdings GMBH, Vale Canada Limited (formerly Vale Inco Limited), Vale Coal Colombia Ltd., Vale Fertilizantes S.A., Vale International S.A., Vale Manganês S.A., Vale Mina do Azul S.A., Vale Moçambique S.A., Vale Nouvelle-Calédonie SAS, Vale Oman Pelletizing Company LLC and Vale Shipping Holding PTE Ltd..

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INDEX

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BUSINESS OUTLOOK

The global financial shock of 2008 produced a deep recession, with one of the very few episodes of global GDP contraction in modern economic history. The policy reaction to the shock entailed a V-shaped recovery, led by emerging economies and industrial production growth, which caused the sharpest metals price recovery from a recession in more than four decades.

Two years after the beginning of the financial stress in the Euro area the scenario still remains uncertain. The bank and sovereign debt crisis did not produce a global recession but there are no prospects for a strong recovery in the short-term.

Unlike in 2008/2009, metal price volatility has been more limited, and despite the fall from the post-crisis peaks, current price levels are much higher than those reached during the Great Recession. On the other hand, similarly to 2008/2009, the currencies of mineral rich countries depreciated against the US dollar, helping to reduce mining companies’ costs.

After a good performance in the first quarter of the year, world economy growth has been downtrending due to reasons that differ across regions.

The debt-fueled growth model adopted by developed economies has reached a point of exhaustion. The US recovery moves ahead at below-trend pace, in line with the standard typically followed by recoveries after recessions resulting from financial crises, and the Euro area is under recession.

Growth momentum in major emerging economies, such as Brazil, India and China, has slowed. This reflects not only a weaker external environment but mostly the deceleration of domestic demand caused by macroeconomic policy tightening last year and the effect of capacity constraints.

Following the surge in 1Q12 associated to the restoration of the global supply chain, in response to the disruption caused by the Thai floods, global industrial production slowed significantly in recent months, mostly due to the contraction in developed economies and Latin America. The signals given by the global manufacturing PMI point to further slowing of global industrial output in 3Q12.

On the positive side, global inflation has been falling, reflecting the effects of monetary tightening in emerging economies and widespread declines in energy prices. Lower inflation has two important implications for short-term growth: (i) a lift to household purchasing power to boost spending; (ii) more room for Central banks to shift their focus to the downside risks of growth and are effectively ease monetary policy. The policy stimulus is likely to gain traction over the next few months.

As a matter of fact, sequential GDP growth in China showed a slight improvement in 2Q12 and the data released so far show the first sign of recovery in infrastructure investment and housing, two important sectors for the demand for metals, particularly iron ore and copper.

Global auto sales are rebounding, increasing in June for the second consecutive month. It is also a positive event for the mining industry, as cars are the most metals intensive consumer durable.

US households and banks have already deleveraged and earnings and cash flow of nonfinancial corporations have been growing since mid-2009. At the same time, there are signs of improvement in housing. However, a stronger recovery is deterred by fiscal and regulatory uncertainty.

Europe has suffered an ongoing loss of importance over recent years as a market for metals. European share in the global seaborne iron ore market dropped continuously to 11% in 2011 from 37% in 1990. A similar but less pronounced decline is shown by its participation in the global consumption of nickel, 20% in 2011 against 31% in 2000.

However, the financial crisis in the Euro area affects indirectly the demand for metals primarily through financial channels, as higher asset price volatility implies negative expectations, thus

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lessening investors’ appetites and affecting growth in the rest of the world.

European authorities have responded to the recent intensification of financial stress announcing a number of measures, including funding for the recapitalization of Spanish banks, greater flexibility in the use of financial backstops and a movement toward the unified supervision of Euro area banks. Although a financial meltdown has been avoided, financial market participants still have doubts about the ability of some of the Euro area economies to deliver the badly needed fiscal adjustment to improve debt sustainability.

Europe has a large pool of wealth, more than sufficient to deal with the debt challenge, and there is strong political support for the preservation of the Euro, two critical conditions that will help to find a solution to the Euro area crisis.

The recession in the Euro area is expected to be prolonged: there is a long journey for European banks to deleveraging and the rigidity in labor markets contributes to deepen the effects of fiscal tightening. However, the avoidance of a major financial crisis will limit the negative spillover on the rest of the global economy.

China’s real GDP growth slowed to 7.6% y/y in 2Q12, but at the margin it rebounded to 7.0% q/q from 6.7% in 1Q12(2), suggesting that it may have bottomed out last quarter.

Simultaneously to the slide in inflation, expected to converge to 2%, retail sales have remained firm, expanding 13.7% y/y, and fixed asset investment grew 20.4 % y/y in line with the last few months. While property investment continued to slow, growth of infrastructure investment has accelerated through 2Q12 to reach 18.5% y/y in June, bouncing back from the continued decline since mid-2009.

Given the reluctance of the Chinese authorities to expand fiscal spending, policy support for economic activity will be funded by a credit increase. New bank lending reached RMB920 billion in June, growing by 45.1% y/y and 16.6% ytd y/y. The increase in bank lending reflects the shift in macro policy, through bank reserve required ratios and interest rate cuts, the loosening of credit restrictions and the acceleration of infrastructure projects. Credit demand is expected to continue to recover as more infrastructure projects are approved and implemented.

For the first time since October 2011, the 70-city house price index released by the National Bureau of Statistics (NBS) showed that in June the number of cities with house price increases was superior to the number of cities with price decreases. By the same token, according to Soufun, a private real estate statistics provider, there was an increase in national house prices in June for the first month since September last year. These early indications of stabilization were accompanied by a recovery in transaction volumes, which rose by 6.9% y/y, also the first increase since September 2011.

It is very likely that the housing market is beginning to respond to the recent incentives, particularly to first home-buyers and buyers of small apartments.

While we do not expect the government to relax the restrictions on the investment demand for housing, the property sector is likely to gradually bottom out in the second half of the year. Our view is based on the investment in social housing and the improvement in housing affordability, stemming from disposable household income growth, slightly lower house prices, cuts in interest rates and the various incentives given by the central and local governments.

Social housing is one of the priorities of the 12th five-year plan, given the substantial housing deficit and its role in the mitigation of social tension, particularly in tier-1 cities where housing prices are too high and will continue to be unaffordable to low and middle income households. Moreover, social housing provides a cushion to the negative impact on the economy from the tightening on private housing.  The property sector represents about 12% of China´s GDP, and property investment represents 25% of total fixed asset investment, which has been the main driver of Chinese economic growth.

Moving forward, the demand for housing will continue to be strong in the foreseeable future in the face of rapid economic growth and the

(2) Quarterly growth rates on a seasonally adjusted annualized basis.

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urbanization process. China has a very high savings rate, which facilitates housing investment with a much lower level of leverage than in developed economies, a factor that mitigates the risks of a financial crisis.

Furthermore, local governments see real estate as an important source of economic growth as land sales contribute to increase their revenues. The improvement in infrastructure financed by these revenues supports house prices and ultimately feedback into land sales.

Iron ore imports from China increased 9.7% in 1H12, reaching 367 Mt and implying substitution of domestic iron ore.

Declining quality and rising costs have been constraining Chinese iron ore domestic output. Producers play the role of swing producers being highly price sensitive. As prices have been range bound between US$ 130-US$ 150 per metric ton since the lows of last October, high cost marginal suppliers have been offline thus setting a floor to prices.

As a result of the weakening of global steel consumption, the price premium for 1% Fe content decreased from the highs of 2011, at about US$ 5.50/6.00 per ton, to levels between US$ 3.00/3.50 per metric ton.

Given the flexibility allowed by our global distribution network, we have been able to increase iron ore sales in line with production, benefiting from our low cost base.

Looking forward, we expect prices to remain high in face of the recovery in global steel consumption, high operating and capex costs and continued supply growth constraints.

After the supply shock of 2011, caused by the floods in Queensland and the resulting disruption of the Australian production, metallurgical coal prices returned to levels in line with steel demand conditions.

China is surpassing India as the second largest met coal importer and is likely that it will be the largest in a couple of years, thus surpassing Japan. Imports are expected to feed about one third of the expected increase in Chinese consumption over the next five years.

In a similar way to iron ore, it is also likely that due to rising costs China will become the marginal supplier of coal. As the seaborne market is small relative to the Chinese market, any disequilibrium in this market could produce large swings in seaborne trade.

Rising capex costs are likely to set a high floor for the high quality hard coking coal price premium. In a world with increasing scarcity of met coal reserves, Vale is very well positioned in Moatize, one of the richest coking coal provinces. Moatize I, a low cost open pit mining operation, is ramping up successfully, delivering two types of HCC — Chipanga premium and typical. Moatize II is under construction and we are taking active steps to start building the logistics infrastructure, which encompasses a railroad and a deep water maritime terminal in the north of Mozambique.

Nickel prices declined from the peak reached in February this year arising from the commodity price rally influenced by the positive expectations generated by the € 1 trillion LTRO launched by the European Central Bank. Over recent weeks prices have been hovering around US$ 16,000 per metric ton, influenced by the weakness of stainless steel demand and negative expectations about global economic growth.

The demand for nickel from non-stainless steel applications has been holding firm, influenced by the steadiness in the consumption of the energy and aerospace industries. Rising global auto sales are also expected to have a positive impact on nickel demand in the near term.

The nickel-in-pig-iron industry (NPI) is being challenged by the lower nickel prices, forcing some of the marginal suppliers to shutdown operations, which contributes to setting a price floor.

As commented in 1Q12, the Indonesian government’s imposition of a 20% export tax on nickel ores and volume quotas may put additional pressure on the NPI industry, which depends critically on the ore supply from Indonesia and the Philippines. Japan, the second largest nickel importer in the world, also depends on ore imports to feed its ferronickel plants. In the short-term, Chinese NPI producers are holding large ore inventories built up in anticipation of the new Indonesian regulations.

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For the longer term, we believe that restrictions to nickel ore exports will cause additional pressures on NPI producers. Although there is some replacement of the higher cost blast furnaces by electric arc furnace (EAF) plants, the move will offset cost pressures only partially, given the large weight of nickel ores in the operating costs of EAF plants.

The worst US Midwest droughts in more than 50 years is pushing agricultural commodities prices to record highs, particularly grain prices, which are intensive in the use of fertilizers. Prices of soybeans and corn have already overtaken the peak levels of 2007/2008. The increase in food prices is a leading indicator of the demand for fertilizers as farmers seek more productivity to expand supply in response to the price incentive.

Growing resource constraints, as 25% of the world’s agricultural land is highly degraded(3) and lacking in soil organic matter and nutrients, and environmental pressures — agriculture is a large net contributor of greenhouse gases — require sustainable productivity growth in order to meet an increasing global demand for food. Rising per capita incomes and urbanization in emerging economies are leading to changes in diets that shift consumption to more processed foods, fats and animal protein, which drive the demand for grains and oilseeds, ultimately boosting the demand for fertilizers.

Vale is positioned to supply an increasing volume of fertilizers in the medium-term through the development of its portfolio of potash and phosphates projects.

Despite the recession in Europe and the debt sustainability challenge faced by the largest developed economies, we strongly believe that the expansion of the global economy will gradually accelerate through the next few quarters. Although global GDP and industrial production are expected to grow in the next five years at a slower pace than we saw in the five-year period before the Great Recession of 2008/2009, global economic activity will remain robust.

In this scenario, global growth led by emerging markets global growth will support a robust demand for minerals and metals which, combined with the increasing scarcity of natural resources, will maintain their prices at relatively high levels.

Over the next twenty years, it is estimated that more than two billion people will move upwards to the middle income classes, requiring housing, infrastructure services, consumer durables and proteins, which will demand an increasing supply of metals and fertilizers, among other products.

Vale is investing in a diversified portfolio of investment and consumption demand-driven products to meet and to benefit from the long-term growth dynamics of emerging economies.

(3)  According to the OECD-FAO Agricultural Outlook 2012-2021.

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REVENUES

Operating revenues totaled US$ 12.150 billion in 2Q12, 7.2% higher than the US$ 11.339 billion in 1Q12. The increase was determined by the greater volumes of sales, particularly iron ore and pellets, which added US$ 1.199 billion to our revenues. On the other hand, the decline in bulk materials and base metals prices reduced revenues by US$ 611 million in comparison with 1Q12.

Revenues generated from the sales of bulk materials — iron ore, pellets, manganese ore, ferroalloys, metallurgical and thermal coal — were 73.5% of operating revenues in 2Q12, increasing from 72.7% in 1Q12. The share of base metals fell to 14.7% from 15.7% in the previous quarter, while fertilizers were responsible for 7.6% slightly higher than the 7.3% in 1Q12. Logistics services contributed 3.4% to total revenues and other products, 0.9%.

Shipments to Asia represented 51.3% of total revenues, in line with 51.4% in the last quarter, while the Americas lost some ground, with 26.4% in 2Q12 against 28.7% in 1Q12. Europe showed a relative improvement, with its share increasing to 19.1% from 16.7% in 1Q12, despite the worsening of the economic environment. Revenues from shipments to the Middle East were 2.2% in 2Q12 from 2.4% in the previous quarter, while the rest of the world contributed with 1.0%.

On a country basis, the share of sales to China of total revenues amounted to 31.3% in 2Q12, Brazil 19.0%, Japan 10.5%, Germany 6.1%, South Korea 4.9% and Italy 4.1%.

Table 2 - OPERATING REVENUE BY BUSINESS AREAS

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Table 3 - OPERATING REVENUE BY DESTINATION

COSTS AND EXPENSES

In 2Q12, cost of goods sold (COGS) increased US$ 325 million on a quarter-on-quarter basis, amounting to US$ 6.015 billion. Adjusting for the effects of higher volumes (US$ 599 million) and exchange rate variation(4) (-US$ 394 million), COGS was up US$ 120 million when compared to 1Q12.

After excluding the effects of volumes and currency prices, the main reasons for the cost increase were the more intense use of outsourced services (US$ 128 million) for equipment maintenance and actions to enhance operations, higher prices of materials (US$ 46 million) and the rise in expenses with personnel (US$ 42 million), which were partially offset by acquisition of products (-US$ 59 million).

Costs with outsourced services totaled US$ 1.285 billion — 21.4% of COGS — against US$ 1.096 billion in 1Q12. Adjusting for higher volumes (US$ 145 million) and currency price changes (-US$ 84 million), costs with outsourced services showed a US$ 128 million increase vis-à-vis 1Q12, mainly reflecting higher maintenance services in: (i) nickel operations, including a six-week maintenance period at Clydach (US$ 15 million), (ii) the maintenance of iron ore equipment in the aftermath of the abnormally heavy rainfall in 1Q12 (US$ 34 million), (iii) fertilizer operations in Brazil (US$ 28 million) and (iv) our pelletizing plants in Tubarão (US$ 4 million).

Cost of materials — 18.1% of COGS — was US$ 1.091 billion, up 7.6% against 1Q12. Adjusting for the effects of volumes (US$ 99 million) and exchange rates (-US$ 79 million), costs of materials increased by US$ 57 million

(4)  COGS currency exposure in 2Q12 was made up as follows: 60% Brazilian reais, 20% US dollars, 15% Canadian dollars, 2% Australian dollars, 1% Indonesian rupiah and 2% other currencies.

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vis-à-vis 1Q12, mainly reflecting the effect of higher phosphates costs (US$ 46 million). Sulphur, ammonia, natural gas and oil are the core inputs in the production of fertilizers. Thus, the costs involved in producing phosphates rose as a consequence of the increase in ammonia and oil products prices.

In 2Q12, personnel costs amounted to US$ 909 million, representing 15.1% of COGS, against US$ 828 million in 1Q12. Our headcount increased to 85,072 employees in June 2012 from 82,895 in March 2012 and 74,076 in June 2011, raising costs by US$ 19 million on a quarter-on-quarter basis.

In addition, employees working in remote areas in Brazil (Carajás, Sossego and Onça Puma) earn semi-annual bonuses, paid in June and December. In June 2012, this bonus amounted to US$ 34 million, contributing to raise personnel costs.

In 2Q12, expenditures with energy  consumption accounted for 12.3% of COGS, reaching US$ 741 million, equal to a 5.7% quarter-on-quarter increase.

Costs of electricity consumption were US$ 213 million, slightly lower than 1Q12, driven by the appreciation of the US dollar (-US$ 16 million).

There was a US$ 44 million rise in expenses with fuel and gas to US$ 527 million from US$ 483 million in 1Q12. This was caused mainly by the effect of higher volumes (US$ 64 million), prices of HSFO (high sulphur fuel oil), mostly consumed by the Indonesian operations, (US$ 4 million), which were partially offset by exchange rate variation (-US$ 39 million).

The cost of purchasing products from third parties amounted to US$ 377 million — 6.3% of COGS — against US$ 398 million in 1Q12.

The purchase of iron ore and pellets amounted to US$ 221 million, against US$ 228 million in the previous quarter. The volume of iron ore bought from smaller miners was 2.6 Mt in 2Q12 compared to 1.8 Mt in 1Q12, which was offset by a 13.5% fall in price. In 2Q12, the acquisition of pellets from Hispanobrás amounted to 753,000 t against 703,000 t in 1Q12.

Expenses with the purchase of base metals products decreased to US$ 85 million from US$ 93 million in 1Q12 reflecting lower prices - nickel and copper ores prices were down 13.0% and 4.0%, respectively. We purchased the same volume of feed as in the previous quarter, 1,700 t of nickel intermediates while reducing the volume of copper ores to 7,500 t in 1Q12.

Costs with shared services stayed at US$ 76 million in 2Q12, in line with the previous quarter.

Other operational costs reached US$ 559 million against US$ 664 million in 1Q12 mainly due to: (i) decrease in the accrual of profit sharing, US$ 55 million, and (ii) demurrage charges down by US$ 54 million, reflecting better operational and weather conditions in 2Q12. On the other hand, there were higher expenses with royalties (US$ 18 million) that vary in tandem with sales.

Depreciation and amortization — 16.2% of COGS — amounted to US$ 977 million, against US$ 913 million in 1Q12.

Sales, general and administrative expenses (SG&A) totaled US$ 615 million in 2Q12, US$ 86 million above 1Q12. Higher SG&A expenses were driven by an increase in sales (US$ 81 million), mainly due to nickel and copper receivable adjustment (US$ 35 million) and administrative expenses (US$ 5 million).

In 2Q12, research and development (R&D) expenditures(5), which reflect our investment in creating long-term growth opportunities, increased to US$ 359 million vis-à-vis US$ 299 million invested in 1Q12.

(5)  This is an accounting figure. In the Investment section of this press release we disclose the amount of US$ 396 million for research and development, computed in accordance with the financial disbursement in 2Q12.

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Other operational expenses dropped by US$ 82 million to US$ 604 million, from US$ 686 million in 1Q12, mainly caused by the decrease in the provisions for profit sharing (US$ 110 million) related to corporate center personnel and contingencies (US$ 34 million), partially offset by higher damage costs (US$ 65 million) due to the operational issues at VNC (US$ 41 million) and at Carborough Downs (US$ 24 million), and higher pre-operating and start-up expenses (US$ 5 million).

As we are developing a large portfolio of projects scheduled to start-up between 2012 and 2016, some of the expenditures related to their implementation are classified as pre-operating and start-up expenses. These expenses occur since the beginning of the project and are crucial for ensuring compliance with scope, time and quality. The items include environmental studies, recruiting, training, travel, administrative services, shared services, procurement and general expenses with operational staff until initial production, among others.

Pre-operating, idle capacity and start-up expenses were US$ 324 million, including VNC start-up (US$ 129 million), Onça Puma pre-operating (US$ 78 million) and non-scheduled maintenance of fertilizer assets, which led to charges to idle capacity of US$ 13 million. Additionally, there were inventory adjustments of US$ 49 million at VNC, against US$ 77 million in 1Q12.

Table 4 - COGS AND EXPENSES COGS

SG&A, R&D and other expenses

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(1) Does not include gain/loss on assets sale.

OPERATING INCOME

Operating income, as measured by adjusted EBIT, was US$ 3.923 billion in 2Q12, a slight increase from US$ 3.850 billion in 1Q12. Without the non-recurring effect of accounting losses of US$ 377 million related to the divestment of the thermal coal assets in Colombia and manganese ferroalloys in Europe, operating income was US$ 4.300 billion, 11.7% higher than 1Q12.

The increase of US$ 450 million relative to 1Q12 was mainly due to the effects of higher sales volumes, US$ 870 million, and currency price changes caused by the appreciation of the US dollar, US$ 394 million. This was partly offset by the slide in sales prices, US$ 658 million, and the rise in COGS(6), US$ 120 million.

The adjusted EBIT margin, excluding the non-recurring loss, came to 36.2% in 2Q12, up from 34.8% in 1Q12.

NET EARNINGS

Net earnings in 2Q12 were US$ 2.662 billion, equal to US$ 0.52 per share, being 30.4% lower than the US$ 3.827 billion in 1Q12. The large decline in net earnings was determined by accounting effects with no impact on cash flow.

If we isolate the influence of the non-cash effects(7), earnings before taxes would be US$ 3.971 billion against US$ 3.757 billion in 1Q12.

By far the most important non-cash accounting effect was derived from the strong appreciation of the US dollar (USD) against the Brazilian real (BRL) in 2Q12 — 11.0% comparing prices at the end of 2Q12 and 1Q12. Foreign exchange and monetary variations reduced earnings by US$ 1.693 billion, against a positive impact of US$ 427 million in 1Q12, thus producing a negative swing of US$ 2.120 billion, which is US$ 955 million more than the decrease in net earnings.

Although we report our financial performance in USD, the functional currency for accounting purposes of our parent company, Vale S.A., is the BRL. A depreciation of the BRL against the USD produces a non-cash accounting effect on earnings before taxes through its impact on net financial liabilities — USD-denominated debt minus cash availabilities in USD and accounts receivable in USD(8). This is recorded in the financial statements as “exchange and monetary losses” in 2Q12 of US$ 1.693 billion, reducing earnings by the same amount but with no effect on the cash flow.

Exchange and monetary losses are part of the net financial result, which includes also the effects of financial revenues and expenses, mark-to-market of shareholders’ debentures and derivatives. The net financial result reduced earnings before taxes by US$ 2.548 billion.

Financial revenues were US$ 120 million, in line with US$ 119 million in 1Q12, and financial expenses decreased to US$ 559 million from US$ 613 million in the previous quarter.

(6)  Excluding the effect of the US dollar appreciation and volumes.

(7)  Equity income, exchange and monetary losses, non-recurring losses from the divestment of assets, mark-to-market of shareholders’ debentures and non-cash effects of derivatives.

(8)  For a detailed description of effects of currency price changes on our financial performance please see the box “Effects of currency price volatility on Vale’s financial performance”, pg. 15,  Continuing to create value, Performance of Vale in 3Q11, October 26, 2011, available in our website, www.vale.com on the Investors section, under Press Releases.

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Non-cash charges determined by the mark-to-market of shareholders’ debentures were US$ 67 million, against US$ 101 million in the previous quarter, contributing to increase financial expenses but with no impact on cash flow.

Mark-to-market of derivatives showed a non-cash loss of US$ 416 million compared to a gain of US$ 296 million in 1Q12. There was a positive cash effect of US$ 226 million against US$ 182 million in 1Q12.

Breakdown of the effect of derivatives:

·             Currency and interest rate swaps resulted in a negative non-cash effect of US$ 459 million. There was a positive impact on cash flow of US$ 185 million.

·             Nickel derivatives produced a positive non-cash charge of US$ 43 million. There was a positive cash flow impact of US$ 41 million.

·             Derivative transactions related to bunker oil did not have any impact.

Equity income from affiliated companies totaled US$ 158 million in 2Q12, against US$ 243 million in the previous quarter. The major contributors were the non-consolidated affiliates in the bulk materials business with US$ 186 million and in logistics with US$ 15 million.

Individually, the greatest contributors to equity income were Samarco (US$ 140 million), Hispanobras (US$ 29 million) and MRS (US$ 19 million).

CASH GENERATION

Cash generation, as measured by adjusted EBITDA, totaled US$ 5.119 billion in 2Q12, US$ 154 million above the 1Q12 figure. If we exclude the non-recurring accounting losses caused by asset divestitures, adjusted EBITDA was US$ 5.496 billion, 10.7% higher than 1Q12.

Excluding this non-cash effect, the main factors underlying the increase of US$ 531 million were the higher volumes sold and the positive effect on COGS of the USD appreciation, which were partly offset by lower realized prices and higher COGS(9). Over the last 12-month period ended June 30, 2012, adjusted EBITDA was US$ 27.111 billion.

In 2Q12, dividends received from non-consolidated affiliates totaled US$ 112 million, against US$ 60 million in 1Q12. The major contributors were Norsk Hydro, US$ 47 million, Nibrasco, US$ 26 million, and Itabrasco, US$ 18 million.

Disregarding R&D expenditures and miscellaneous items - which reduced adjusted EBITDA — and the non-recurring losses, the share of bulk materials in cash generation increased to 92.4% in 2Q12 from 89.4% in 1Q12, while base metals tumbled to 4.3% from 7.7%. The share of fertilizers was 3.1%, and logistics contributed with 0.2%.

Table 5 - ADJUSTED EBITDA

(9)  Excluding the effect of the US dollar appreciation and volumes.

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Table 6 - ADJUSTED EBITDA BY BUSINESS AREA

INVESTMENTS

Our long-term strategy prioritizes organic growth as the main source of value creation through the investment in long-life, low-cost, world-class assets, in accordance  with principles of discipline in capital allocation. Given the strategic priorities for the allocation of the cash flow, investment planning aims to both maintain a sound balance sheet while satisfying of shareholders’ aspirations for dividends.

Investments amounted to US$ 4.287 billion in 2Q12. US$ 2.864 billion was spent on project execution, US$ 396 million on research and development (R&D), and US$ 1.027 billion on the maintenance of existing operations.

Capex — excluding acquisitions — in the first half of the year totaled US$ 7.964 billion, with an increase of US$ 1.185 billion over the US$ 6.779 billion invested in the same period of 2011. Our investments reflect the focus on organic growth as the key strategic priority. Of the total expenditures, 76 % was allocated to finance growth, involving project execution and R&D.

The sustaining capex of US$ 1.027 billion in 2Q12 was concentrated in iron ore and base metals. The maintenance investments in iron ore included: (i) the replacement and acquisition of new equipment (US$ 140.6 million), (ii) the expansion of tailing dams and residual stockpiles (US$ 50.1 million), (iii) infrastructure enhancement (US$ 32.8 million) and (iv) initiatives to enhance the current standards of health and safety and environmental initiatives (US$ 34.3 million). Furthermore, there were investments to  develop the ore bodies, increase recovery rate levels and improve grades in the nickel mines (US$  81.6 million), the Clean AER (atmospheric emission reduction) project to significantly reduce air pollution in Canada (US$ 28.8 million) and for the acquisition of equipment related to the improvement of production processes in the copper mines (US$ 39.0 million).

In 2Q12, R&D investments comprised expenditures of US$ 146 million in mineral exploration, US$ 167 million in conceptual, pre-feasibility and feasibility studies for projects, and US$ 82 million to develop new processes and for technological innovations and adaptation of technologies.

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Investments of US$ 2.390 billion were made in the bulk materials business, US$ 1.038 billion in base metals, US$ 516 million in fertilizer nutrients, US$ 130 million in logistics services for general cargo, US$ 71 million in power generation, US$ 37 million in steel projects and US$ 105 million in corporate activities and other business segments.

Important milestones were reached in relation to the implementation of the two largest projects in our portfolio: Carajás S11D, and Moatize II/Nacala.

We obtained the preliminary environmental license (LP) for the iron ore project Carajás S11D (S11D). The LP is part of the project’s first phase of licensing and attests to its environmental feasibility. S11D is the largest project in Vale’s history and also in the iron ore industry, being our major lever for production capacity growth and for maintaining Vale’s undisputed leadership in the global market in terms of volume, cost and quality.

Located in the Southern Range of Carajás, in the state of Pará, Brazil, with an estimated capex of US$ 8.039 billion for the development of the mine and processing plant, the project has a nominal capacity of 90 million metric tons per year (Mtpy) of iron ore with an average ferrous content of 66.48% and low concentration of impurities. Operations are expected to start in the second half of 2016.

Some innovative features are embedded in S11D, such as truckless mining, dry ore processing and modular assembling of the processing facilities, entailing lower operating and capex costs, more efficient use of the reserves, water saving, reduction in the consumption of electricity and a 50% cut in the emission of greenhouse gases.

As a huge greenfield project, S11D demands a high capex per ton, US$ 216, which is mostly due to the need to make large investments — estimated to reach US$ 11.4 billion - in the extension of the existing logistics infrastructure - the Carajás railroad and the Ponta da Madeira maritime terminal — which will allow for the handling of 230 Mtpy of iron ore.

On the other hand, the project will contribute to improve the average quality of our iron ore production, to lower average operating costs and to create a new platform for low capex cost brownfield projects given the very large resources existing in the iron ore deposits located in the Southern Range of Carajás.

This month we signed this month 30-year concession agreements with the government of Mozambique(10) comprising the greenfield railway stretches connecting Moatize to the border of Malawi, and the current end of the existing railway in northern Mozambique to Nacala-à-Velha, as well as the building and operation of the Nacala-à-Velha coal maritime terminal, on the northeastern coast of Mozambique.

The agreements with the governments of Mozambique and Malawi(11) open the door for the acceleration of the construction of the Nacala corridor, which will enable the transportation of up to 18 Mtpy of coal.

Also in July, Vale signed with the government of Argentina a memorandum of intentions (Acta Acuerdo), which is a fundamental step towards the agreements that will provide a regulatory roadmap to facilitate the project development.

The rise in engineering and construction costs caused by the significant increase in global mining capex, delays in project execution and commissioning, and additional efforts to keep the implementation schedule, are causing a number of cost pressures on our investments. As a consequence, our Board of Directors approved capex budget increases for four projects: (a) Salobo, to US$ 2.507 billion from US$ 2.337 billion; (b) Salobo II, to US$ 1.707 billion from US$ 1.427 billion; (c) CLN 150, to US$ 4.114 billion from US$ 3.477 billion;

(10)  The concessions are renewable for an additional 10-year term.

(11)  The concession agreement with the government of Malawi was signed in 1Q12.

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and (d) Tubarão VIII, to US$ 1.088 billion from US$ 968 million. The changes resulted from the continuous risk analysis performed by Vale’s PMO team.

In 2Q12, the Board of Directors approved the Itabiritos Cauê iron ore project, which consists of the adaptation of the plant to process low-grade hard itabirites from Minas do Meio, located in the Southeastern System, Minas Gerais, Brazil. The capex budget is US$ 1.504 billion for a nominal capacity of 24 Mtpy. The project will not add production capacity to our operations given that it will replace capacity lost due to the impoverishment of resources in the Iron Quadrangle area in Brazil. The adapted plant will allow for the concentration of low-grade ores into high grades, allowing for the quality improvement of our supply of iron ore.

Salobo, our second greenfield copper project and with an estimated capacity of 100,000 tpy of copper in concentrates, has started the ramp up with the two lines running since June.

Portfolio asset management

Vale’s growth and sustainable value creation strategy encompasses a multilane road, in which active portfolio asset management is a very important tool to optimize capital allocation and focus management attention. The priority is to divest non-core and underperforming assets, which we do not believe to be the best owner.

In 2Q12, we concluded the divestiture of kaolin assets, with the sale of the 61.5% stake on CADAM. Moreover, the Colombian thermal coal assets were sold for US$ 407 million and we signed this month an agreement, still subject to regulatory approvals, to divest the French and Norwegian manganese ferroalloy operations for US$ 160 million.

To continue optimizing the corporate structure and to widen our exposure to the global iron ore market, Vale acquired an additional stake of 10.5% in EBM, a privately held company whose only asset is 51.0% of MBR, owner of the Southern System, for US$ 437 million. As a result of the acquisition, Vale will increase its share in EBM to 96.7% and on MBR to 98.3%.

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Table 7 - TOTAL INVESTMENT BY CATEGORY

Table 8 - TOTAL INVESTMENT BY BUSINESS AREA