Vale (NYSE:VALE) executives told investors the company exceeded all production guidances in 2025 while emphasizing cost discipline, capital allocation optimization, and progress on safety and tailings risk reduction. Management also highlighted strong shareholder returns during what it described as a more favorable cycle, alongside continued advancement of growth initiatives in iron ore and base metals—especially copper.
Safety, dams, and reparation progress
CEO Gustavo Pimenta said Vale achieved a 21% reduction in high potential incidents in 2025, describing the result as evidence of an evolving safety culture. On tailings dams, Pimenta said Vale eliminated all dams classified at Emergency Level 3 by 2025, fulfilling a commitment made in 2020. He added the company ended the year with a 77% reduction in structures at any emergency level compared with 2020 and expects to reach an 86% reduction by the end of 2026.
Operational performance: iron ore and base metals growth
Vale reported iron ore production of 336 million tons in 2025, up 3% year-over-year and its highest level since 2018. Pimenta attributed the increase primarily to the startup of “low capital-intensive” projects such as Capanema and Vargem Grande, as well as strong performance at Brucutu and S11D. He also said the Serra Sul +20 million tons project is expected to begin commissioning in the second half of 2026, which would increase volumes from what he called Vale’s most competitive asset in quality and cost terms.
In base metals, Vale Base Metals posted “double-digit” production growth in copper and nickel, management said. Copper production reached 382,000 tons in 2025, up 10% year-over-year, supported by record output in Brazil and solid performance across polymetallic assets in Canada. Nickel production increased 11% year-over-year to 177,000 tons, driven by the ramp-up of the Voisey’s Bay mine extension and commissioning of the second furnace at Onça Puma.
Pimenta also pointed to the Novo Carajás program, launched in February, describing it as a transformation initiative aimed at doubling copper output while enabling growth in iron ore from Carajás.
Costs, EBITDA, and cash flow
Marcelo Bacci, executive vice president of finance and investor relations, said fourth-quarter 2025 pro forma EBITDA was $4.8 billion, up 17% year-over-year and 10% quarter-over-quarter. He said the quarter was driven primarily by Vale Base Metals, with support from favorable copper and by-product pricing and operational gains in Canada. Vale Base Metals EBITDA more than doubled year-over-year and sequentially to $1.4 billion in Q4.
In iron ore, Bacci said EBITDA was $4 billion in the quarter, with higher sales volumes and improved realized prices offsetting Brazilian real appreciation.
On costs, Bacci said fourth-quarter C1 cash cost (excluding third-party purchases) increased 13% year-over-year due to an unfavorable BRL exchange rate, higher planned maintenance in the northern system, and higher volumes in the southern and southeastern systems contributing to higher average unit costs. For the full year, C1 ended at $21.3 per ton—at the midpoint of guidance. For 2026, Vale expects C1 cash costs between $20 and $21.5 per ton.
Vale’s all-in cost averaged $54.2 per ton in 2025; fourth-quarter all-in cost was $54.3 per ton, Bacci said, citing C1 improvements and gains from a long-term affreightment strategy.
In base metals, management highlighted steep cost improvements. Bacci said copper all-in costs decreased by $2,000 per ton to negative $900 per ton, which he called the lowest in the history of the business, driven by higher gold prices, increased gold production at Salobo, and strong operating performance in Brazil. Nickel all-in costs fell 35% year-over-year to $9,000 per ton, helped by by-product revenues (particularly copper) and improved performance at Voisey’s Bay and Onça Puma. Looking ahead, Bacci said the company is focused on reaching at least cash break-even in nickel by the end of 2026 and said it is “clearly on track” to do so.
Recurring free cash flow was approximately $1.7 billion in Q4, more than double a year earlier, supported by stronger EBITDA and exchange-rate swap settlements tied to BRL appreciation. Vale’s annual CapEx was $5.5 billion in 2025. For 2026, the company guided CapEx of $5.4 billion to $5.7 billion and reiterated a long-term ambition to keep annual CapEx below $6 billion. Bacci also said Vale expects a roughly $1.5 billion reduction in cash disbursements in 2026 related to reparation and characterization commitments, as programs advanced in 2025.
Capital allocation, dividends, and balance sheet
Pimenta said Vale reviewed its CapEx program in 2025, resulting in an annual optimization of more than $500 million and establishing new long-term CapEx guidance below $6 billion. He also highlighted the construction license received in January for the Bacaba project, with construction underway and startup expected in the first half of 2028. Pimenta said Bacaba is expected to add annual copper production capacity of 50,000 tons.
In November, Vale announced $2.8 billion in dividends and interest on capital. Bacci said $1 billion was paid as extraordinary dividends in January, with the remainder scheduled for March. Pimenta said Vale’s 2025 dividend yield was 16%.
Expanded net debt ended the fourth quarter at $15.6 billion, Bacci said, within the company’s $10 billion to $20 billion target range. He said Vale’s objective is to operate around the midpoint of that range, which also serves as a reference for additional shareholder remuneration. In response to a question on potential incremental shareholder returns, Bacci said Vale could consider additional returns if expanded net debt trends below the midpoint, adding that future allocations could include dividends and buybacks depending on conditions and relative valuation.
Strategy updates: product mix, costs beyond by-products, and copper growth visibility
On iron ore commercial strategy, executive vice president for commercial and development Rogério Nogueira said fourth-quarter realized prices for iron ore fines declined quarter-over-quarter primarily due to lower market premiums and mix optimization, not “structural premium deterioration.” He cited a roughly $3.5 per ton decline in IOCJ premiums and about a $0.50 decline in BRBF premiums, while emphasizing Vale’s focus on optimizing contribution margin across the supply chain rather than price realization alone.
Nogueira said Vale expects mid-grade products from Carajás in a 40 million to 50 million ton range this year, with the final volume dependent on market conditions. He added that Vale has revised its freight strategy with “very positive results” and said exposure to freight spot markets is “very low,” implying limited impact from higher freight forward curves.
On base metals costs, Vale Base Metals CEO Shaun Usmar said the business has pursued restructuring and operating model changes, including reducing global overhead by about a third. He said the company’s initial target was about $200 million in cash improvements split between costs and capital, but the effort ultimately exceeded $400 million. Usmar said Vale is focused on moving to the lower half of the cost curve without relying on by-product credits, while also emphasizing execution on asset integrity, reliability, and productivity.
Executives also discussed copper growth plans and investor communication. Pimenta said the focus is demonstrating consistent operations and accelerating growth projects, while noting the company would evaluate potential capital markets transactions “at some point” as part of assessing the ideal way to fund the business. Usmar said updated technical studies prepared under SK-1300 standards were in final draft and are expected to be published on the Vale Base Metals website before the end of the quarter. He also said exploration activity in Pará has been increased, with drilling moving from eight to 23 rigs and meterage expected to rise to 100,000 this year after reaching 60,000 last year.
In Q&A on market conditions, Nogueira said Vale sees “good fundamentals” for steel and iron ore heading into 2026, with expectations that China’s crude steel production will be at the same level as last year. He said Vale expects the seaborne market to remain balanced at about 1.65 billion tons and expects China’s iron ore imports to remain broadly stable. On Simandou, he said Vale expects volumes to come to market gradually and be offset by industry depletion.
Separately, responding to questions about an overflow event at Fábrica and Vega, Pimenta said the site experienced overflow of water with sediments linked to heavy rainfall. He said impacts were limited and Vale expected most restoration work to be completed within two to three weeks, subject to authorities approving resumption of operations. He added that no dams or geotechnical structures were impacted and said Vale would incorporate lessons learned to improve resilience.
Finally, on ESG-related investor access, Bacci said Vale estimates about $5 trillion in assets under management became restricted from investing in the company after prior accidents, and that around 30%—or $1.5 trillion—has since been unlocked, with improvements in ESG ratings cited as a key factor.
About Vale (NYSE:VALE)
Vale SA is a Brazilian multinational mining company and one of the world’s largest producers of iron ore and iron ore pellets. In addition to iron ore, the company produces and sells a range of bulk commodities and metals, including nickel, copper, coal, manganese, ferroalloys and cobalt, and it participates in the fertilizer inputs market. Vale also operates extensive logistics assets — including rail, port and maritime logistics — that support its mining and export activities and provide services to third parties in some regions.
Headquartered in Brazil, Vale maintains a global operational footprint with mining, processing and shipping activities across the Americas, Africa, Asia and Oceania.
