Following Vale's new risk management approach, the mining company decided to eliminate or replace 25 ships converted from VLCCs to VLOCs3 from its fleet, the company said in its quarterly report, released on April 29.

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The ships presented numerous technical failures and will be withdrawn gradually through early termination or alteration of the charter contracts.

The decision was taken following the latest accident in February 2020 involving one of the converted ships – a 2016-built vessel owned and operated by South Korean company Polaris Shipping.

The Stellar Banner suffered damage and ran aground after leaving the Ponta da Madeira maritime terminal, in the State of Maranhão, loaded with approximately 295 kt of iron ore produced by Vale.

Vale is supporting the shipowner with technical-operational and preventive measures in order to safely remove the fuel (successfully completed on March 27, 2020) and the iron ore cargo from the ship and avoid a major environmental disaster.

Efforts are still underway to unload the ship before it can be removed from the site.

Vale informed yesterday (28) about updated projections

Vale communicates in its performance report for the first quarter of 2020, the following projections:

• Reduction in unit freight costs in 2Q20 of at least US$ 3/t compared to 1Q20
• C1 unit cash cost of the Iron Ore business below US$ 14/t in 2H20
• Investments (capex) of US$ 4,6 billion in 2020.

Vale clarifies that the information disclosed in this document represents a mere estimate, hypothetical data that in no way constitutes a promise of performance by Vale and/or its managers.

The projections presented involve market factors beyond Vale's control and, therefore, may undergo further changes.

Additionally, Vale informs that it will timely re-submit item 11 of its Reference Form, within the period provided for in CVM Instruction No. 480, of December 7, 2009, as amended.