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Alex Monteiro ["cn=alex monteiro/ou=rio/o=vale"]

13/04/2010 13:06:07

Fabio Barbosa ["cn=fabio barbosa/ou=rio/o=vale@vale"]

Pedro Rodrigues ["cn=pedro rodrigues/ou=rio/o=vale@vale"]

Re: Res: Project Hills

Attachments: _.png; Business Plan vl.ppt

Fabio,

dando sequencia ao email abaixo, estou anexando apresenta9ao que descreve o projeto e mensura as responsabilidades e cronograma de desembolso, preparado pela area de neg6cio. Este Business Plan constitui anexo do acordo principal, eo cronograma de desembolso eo necessaria para atender as condi96es da concessao e a elaborayao do FS, que devera ser apresentado ao nosso board em aproximadamente 3 anos, da data da negocia9ao.

Segue recap das principais condi96es do neg6cio:

1) Aquisi9ao de 51% da BSGR Guinee Guernsey- controladora integral da BSGR Guinee SARL (baseada na Guine) - nas seguintes condi96es:

a) USD 500 MM no signing (previsto pra acontecer ainda em Abril/1 0)

b) USD 2 bi a serem pagos ap6s e se obtida a aprova9ao do Feasibility Study pelo Board da Vale, a ser apresentado aproximadamente em 3 anos- antecipa9ao de USD 500 MM caso a BSGR obtenha solu9ao de safda pela Liberia, com todos os consents, licenses e permits nesse pals;

c) Caso o Feasibility Study nao seja aprovado, seremos imediatamente dilufdos para 10 ou 20% do K total, em fun9ao de termos pago apenas 1 ou as duas parcelas de USD 500MM (signing+ adiantamento=20%)

2) Vale assume 100% do funding do projeto- CAPEX estimado em USD 8 bi- 100% estruturado com dfvida atraves de loan agreement da Vale Int. com a ProjectCo. BSGR repagara a Vale o equivalents aos 49% de participa9ao que detem com 50% dos dividendos que receber;

3) Ativos envolvidos na aquisi9ao: mining concession para explorayao dos blocos 1 e 2 de Simandou e Zogota, licen9as para explorayao de areas de minerio de ferro na Liberia;

4) Ambos os acionistas tem Lock up de aproximadamente 5 anos, a partir da data de assinatura dos contratos, s6 ha safda se houver algum breach contratual ou se nao aprovarmos o feasibility study, caso contrario, nao ha trava;

5) Garantias e lndemninities caped em USD 500 MM, a exce9ao de tax, titles, que ficaram full, uncaped;

6) Alem do purchase price - descrito no item 1 acima - antes do feasibility study teremos que desembolsar aproximadamente USD 3,5 bi para atendimento as condi96es do mining concession, que ja exige produ9ao em 2012 e toda infra pronta pra produzir em ritmo de 30 Mtlano, vide business plan;

7) RFOR para ambas as partes, com tag along para o minoritario;

8) Caso a BSGR venda sua participa9ao tera a obriga9ao de repagar toda sua parte na dfvida na JV, proporcionalmente a participa9ao vendida.

Qto ao FCPA, adicionalmente ao que se comentou, podero que o risco de fecharmos sem escrow nao e apenas reputacional, mas sim "risk is of civil administrative liability to the SEC for the Company" transcrevendo as palavras do especialista de FCPA do Clifford Chance.

Business Plan v1.ppt

Sds,

Alex Monteiro VALE Vale - New Business Development Department +55 21 3814-4210/4939 +55 21 9480-1486 email: alex.monteiro@vale.com

Alex Monteiro/Rio/Vale

VALE-LCIA-0001451 0

Alex Monteiro/RioN i

ale Assuntoll~J{ doclink: document= '520E2F829C7C434E83257704001623CE' view= 1310412010 I'DA652E76E4E9CA5A48256FDD0048011E' database= '832576500055C65B' } 05:37

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Fabio,

Tendo em vista os riscos juridicos envolvidos, principalmente qto a FCPA, solicitei ao juridico que fizesse chegar a vc parecer tecnico, que so foi emitido ontem.

Ainda, assim, entendo da necessidade de update mas frequente e vou faze-lo .

Qto ao cronograma, encerraram-se na noite de ontem as negociacoes do Framework agreement e do Shareholders agreement. Ainda pendentes e em negociacao pel a area de negocios o Loan agreement e o Off take agreement, que devem acontecer ainda esta semana . Segundo o Eduardo, a intencao eh convocar extraordinaria e submeter a aprovacao ainda essa semana ou na proxima.

Nossas recomendacoes a area de negocios tem sido as seguintes, baseada nos riscos legais e comerciais :

1) Sea decisao for por fechar, que se faca em escrow (fianca bancaria nao elimina o risco FCPA). A posicao dos advogados eh clara, uma vez que consolidamos, corremos o risco deja estar quebrando o FCPA no 0+1, visto que nao conseguimos fazer um books and accounts review da 4 empresas que vem no pacote aquisicao (domiciliadas em Guernsey, Guine, Liberia e BVI);

2) Nao assinar sem antes fechar os contratos de offtake e Loan, visto que a outra parte tem direito de veto sobre contratos com partes relacionadas. Se nao fecharmos agora tx de juros e descontos comercais, estaremos em posicao muito mais dificil depois;

3) Due Dilligence- o resultado da due dilligence nao eh satisfatorio, tampouco exaustivo, eh preciso mais tempo e mais informacoes da outra parte. A protecao que inserimos foi de warranties e indemnities para alguns issues, como tax, uncaped. Contudo para outras liabilities a indenizacaop esta caped.

Estou no projeto Universe a partir de hj, mas seguirei acompanhando o desenrolar de Simandou e te mantendo atualizado.

Abraco, Alex.

Fabio Barbosa

----- Mensagem original ----­

De: Fabio Barbosa

Enviada em: 04/13/2010 01:04AM ZW3

Para: Alex Monteiro; Pedro Rodrigues

Caro Alex,

Eu nao estou me sentindo tempestiva e apropriadamente informado sobre o chamado Projeto Hills, cuja discussao na Diretoria Executiva devera envolver varias dimens6es importantes. Pe9o que envie um briefing urgentemente sobre as discuss6es e mantenha uma retina mais adequada de informayao para mim.

Obrigado Fabio 0. Barbosa VALE Chief Financial Officer I Diretor Executive if (55-21) 3814-8888 I Fax (55-21) 3814-8820 I 8840 ~ fabio.barbosa@vale.com

VALE-LCIA-00014511

Ana Lúcia Campbell Sworn Public Translator and Commercial Interpreter

English – Portuguese – Spanish Edifício de Paoli

Av. Nilo Peçanha, 50/ 2606 CPF-MF: 430.405.357/49 20044-900 Rio de Janeiro Brazil Registry at JUCERJA No 147

Tel.: +55-21-2262.9371 Telefax: +55-21-3084.8484 e-mail: anacampbell@wb.com.br

I, the undersigned, Sworn Public Translator and

Commercial Interpreter in and for the City and

State of Rio de Janeiro, Federative Republic of

Brazil, duly registered under No 147 at JUCERJA,

on February 7th 2001, CERTIFY and ATTEST that a 5

document written in PORTUGUESE was presented to

me for translation into ENGLISH, which I have

duly performed by reason of my official capacity,

as follows:

TRANSLATION Nº 1139/2016 10

VALE-LCIA-00014510

Message

From: Alex Monteiro

Sent: 13/04/2010 13:06:07

To: Fabio Barbosa 15

CC: Pedro Rodrigues

Subject: Re: Project Hills

Attachments: Business Plan v1.ppt

Fábio,

Following the email below, I’m attaching a 20

presentation which describes the project and

measures the responsibilities and expenditure

schedule, prepared by the business team. This

Business Plan is attached to the main agreement,

and the expenditure schedule is necessary to meet 25

Ana Lúcia Campbell

1139/2016 fl. 2

the conditions of the concession and the

preparation of the FS, which must be presented to

our board in approximately three years, counting

from the agreement date.

Below is a recap of the main terms of agreement: 5

1. Acquisition of 51% of BSGR Guinea Guernsey –

parent company of BSGR Guinea SARL (based in

Guinea) – in the following terms:

a) USD500MM in the signing act (expected to

happen even in April/2010); 10

b) USD 2 Billion to be paid after the (if

obtained) approval of the Feasibility Study by

the Vale Board, to be presented in approximately

3 years – anticipation of USD 500MM in case BSGR

obtains export solution through Liberia, with all 15

the consents, licenses and permits in that

country;

c)In case the Feasibility Study is not approved,

we will be immediately diluted to 10 or 20% of

the total K, for having paid only one or two sums 20

of USD500MM (signing + 20% in advance).

2. Vale is responsible for 100% of the project

funding- capital expenditure estimated in USD 8

Bi – 100% structured debt through loan agreement

of Vale Int. with ProjectCo. BSGR will repay Vale 25

Ana Lúcia Campbell

1139/2016 fl. 3

the equivalent to 49% of its shareholding with

50% of the dividend they receive.

3. Assets involved in the acquisition: mining

concession for exploration of Blocks 1 and 2 of

Simandou and Zogota, licenses for exploration of 5

iron ore areas in Liberia.

4. Both shareholders have Lock Up of

approximately five years, starting from the date

of signing the contracts, the only way out being

if a contractual breach takes place or if we 10

don’t approve the feasibility study; otherwise,

there are no locks.

5. Warranties and Indemnities capped at USD500

MM, with the exception of tax, titles, which are

full, uncapped. 15

6. Beside the purchase price – described in item

1 above- prior to the feasibility study we will

have to spend approximately USD 3,5 Bi for make

up for the mining concession terms, which demand

production as early as 2012, and all the 20

infrastructure to produce at a pace of 30Mt/year,

see business plan;

7. RFOR for both parts, with tag along for the

minority.

8. In case BSGR sells its shareholding it will be 25

Ana Lúcia Campbell

1139/2016 fl. 4

obliged to repay the entirety of its part in the

debt of the JV, proportionally to the amount of

shareholding sold.

In regard to FCPA, adding to what has been said,

I think the risk of closing the deal without 5

escrow is not only reputational, rather, “risk is

of civil administrative liability to the SEC for

the Company”, transcribing the words of Clifford

Chance’s specialist in FCPA .

(Attached link) 10

Regards,

Alex Monteiro

Vale

Vale – Ne Business Development Department

+55 21 3814-4210/4939 +55 21 9480-1486 15

Email: alex.monteiro@vale.com

Alex Monteiro/ Rio/ Vale

-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-

Message

From: Alex Monteiro/Rio/Vale 20

Sent: 13/04/2010 05:37

To: Fabio Barbosa

Fabio,

In light of the legal risks involved,

particularly in regard to the FCPA, I asked the 25

Ana Lúcia Campbell

1139/2016 fl. 5

legal team to deliver to you a technical report,

which was only issued yesterday.

Nonetheless I do understand the necessity of more

frequent updates and will do so.

As to the schedule, were closed yesterday evening 5

the negotiations of Framework agreement and

Shareholders agreement. Still pending and in

negotiation by the business department, are the

Loan agreement and the Off take agreement, which

must still take place this week. According to 10

Eduardo, the intention is to convene a special

meeting of the board and submit for approval in

this week or the next.

Our recommendations to the business department

have been the following, based on the legal and 15

commercial risks:

1. If the decision is of closing the deal, that

it be made in escrow (bank financing doesn’t

eliminate FCPA risk). The lawyers’ standing is

clear, once we close it, we run the risk of 20

already being in violation the FCPA on D+1, given

that we couldn’t do a books and accounts review

of the 4 companies that come in the acquisition

package (located in Guernsey, Guinea, Liberia and

BVI); 25

Ana Lúcia Campbell

1139/2016 fl. 6

2. Not to sign it before closing the off take and

loan contracts, given that the other part has

veto rights over contracts with related parties.

If we don’t close the interest rate and

commercial discount now, we will be in a much 5

tougher position later on;

3. Due Diligence- the result of the due diligence

is not satisfactory, nor exhaustive; more time

and information is needed from the other party.

The protection we inserted was related to 10

warranties and indemnities for some issue, such

as tax, uncapped. However for other liabilities

the indemnity is capped.

I’m in the Universe project as of today, but will

keep on following the developments of Simandou 15

and keeping you updated.

Regards,

Alex

-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-

Original Message 20

From: Fabio Barbosa

Sent: 13/04/2010 01:04 AM ZW3

To: Alex.Monteiro; Pedro Rodrigues

Dear Alex

I’m not feeling timely and properly informed 25

Ana Lúcia Campbell

1139/2016 fl. 7

about the so called Project Hills, whose

discussion in the Executive Board should involve

several important dimensions. I ask you to send a

briefing urgently about the discussions and

maintain a more adequate information routine for 5

me.

Thank you.

Fabio O. Barbosa

Vale

Chief Financial Officer / Executive Director 10

Tel: (55-21) 3814-8888 / Fax: (55-21) 3814-8820/

8840

Email: fabio.barbosa@vale.com

-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-

Disclaimer 15

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privileged and/or confidential information. Use,

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**** THE ABOVE WAS the whole text of said

document, the true translation whereof I 25

Ana Lúcia Campbell

1139/2016 fl. 8

ATTEST. Given under my hand and seal of

office in Rio de Janeiro, on June 24th 2016.

5