Good morning, ladies and gentlemen. Welcome to Vale's Fourth Quarter 2024 Earnings Call. This conference is being recorded, and the replay will be available on our website at vale.com. The presentation is also available for download in English and Portuguese from our website. To listen to the call in Portuguese, please press the globe icon located on the lower right side of your Zoom screen and then choose to enter the Portuguese room. Then select mute original audio, so that you won't hear the English version in the background. We would like to inform that all participants are currently in a listen-only mode for the presentations. Further instructions will be provided before we begin the question-and-answer section of our call. We would like to advise that forward-looking statements may be provided in this presentation, including Vale's expectations about future events or results, encompassing those matters listed in the respective presentation. We caution you that forward-looking statements are not guarantees of future performance and involve risks and uncertainties. To obtain information on factors that may lead to results different from those forecast by Vale, please consult the reports Vale files with the U.S. Securities and Exchange Commission SEC, the Brazilian Comissão de Valores Mobiliários, CVM and in particular, the factors discussed under forward-looking statements and risk factors in Vale's annual report on Form 20-F. With us today are Mr. Gustavo Pimenta, CEO; Mr. Murilo Muller, Executive Vice President of Finance and Investor Relations; Mr. Rogério Nogueira, Executive Vice President, Commercial and Development, Mr. Carlos Medeiros, Executive Vice President of Operations; Mr. Shaun Usmar, CEO of Vale Base Metals. Now, I will turn the conference over to Mr. Gustavo Pimenta. Sir, you may now begin.

Hello, everyone, and welcome to Vale's fourth quarter 2024 conference call. At Vale Day, we laid out our 2030 vision with a clear focus on evolving our portfolio of assets to supply our clients' needs with a highly competitive cost profile. We also presented our initiatives to advance on our cultural transformation while positioning Vale as a trusted partner. I'm happy with the results we were able to achieve thus far and very optimistic about the future of Vale. We finished 2024 on a strong note. On safety, we lowered our injury frequency rate to 1.1% as a result of our continued focus to create an accident-free work environment. We have also achieved 57% of the upstream bans characterization program and expect to have no dams at level 3 by the end of 2025. We signed definitive agreements for the Mariana operation as well as for the rail concessions renewal. In our iron ore business, we delivered two of our three key projects. Vargem Grande started up in September ahead of schedule and on budget, and in December, we announced Capanema start-up, also ahead of schedule. Both projects add 30 million tons of low-cost production capacity. In base metals, we produced the first ore from the second deposit of the VBME project, an important milestone towards continued efficiency gains and fixed cost dilution in the nickel business. We have also made progress on strategic partnerships with the closing of our 15% acquisition of Minas-Rio as well as the initiation of construction of our concentration plant in Sohar, Oman, which is expected to come online in 2027. Last but not least, we delivered on all of our production and cost guidance for the year, reflecting our continued focus on operational excellence. All these achievements demonstrate that we are on the right path to deliver on our 2030 vision. Now looking into our production performance. Iron ore production reached 328 million tons, the highest level since 2018 and above our original guidance. In the fourth quarter of 2024, we proactively shifted our portfolio mix, reducing direct sales of high silica material while increasing the share of high-quality products from Carajás. This resulted in higher realized iron ore premiums, but more importantly, higher margins and returns on invested capital. In Base Metals, we continue to make solid progress having achieved the highest copper production since 2020, driven by Salobo, which produced roughly 200 kilotons of copper in 2024. In nickel, a significant milestone was achieved with the VBME project completion. We have also announced the Thompson review as part of a process to optimize Vale-based metals asset base. We expect to conclude the review process in the second half of this year. We continue to be highly disciplined in our productivity efforts, having delivered all of our cost guidance across the different commodities in 2024. In iron ore, particularly, our C1 cash costs came in at the low end of the guidance range at around $22 per ton. In the fourth quarter, our C1 reached $18.8 per ton, the lowest level since 2022. In copper, we had the best year in terms of all-in costs since 2020 on the back of Salobo's record production as well as higher byproduct prices, particularly gold. Nickel costs are also trending downward, with further support expected as a result of the VBME ramp-up. We remain highly committed to continue improving our cost competitiveness across the business, and we are very confident on delivering our guidance again in 2025, positioning Vale at the very low end of the industry global cost curve. We are also laser-focused on optimizing our capital expenditures. As a result of that, we have reduced our CapEx guidance for 2025 to $5.9 billion, leveraging optimization initiatives in certain capital investments. In this context and given our strong confidence in robust cash flow generation for 2025, our Board of Directors approved $2 billion in dividends and interest on capital resulting in an annualized 10% yield. The Board also approved the extension of our buyback program for up to 3% of our outstanding shares. Looking ahead, we will remain highly focused on our disciplined capital allocation approach, balancing CapEx optimization, accretive growth and strong shareholder returns. Before passing on to Marcelo, I would like to talk about our announcement last week regarding the new Carajás. As you know, Carajás is one of the best provinces of critical minerals in the world, including for the highest grade iron ore. Under this new program, we are creating a dedicated multifunctional team with increased investments in exploration in order to accelerate the development of the regional endowment. We are confident this new approach will enhance substantially our ability to develop accretive projects for our shareholders, in line with our long-term strategy. We will be providing more color about the new Carajás initiative in the following quarters as the program evolves. Now I would like to welcome Marcelo Bacci for his first conference call with Vale. I'll be back for closing remarks before the Q&A session. Please, Marcelo.

Thanks, Gustavo, and good morning, everyone. It's great to be here for my first quarterly conference call with Vale. Let's take a look at our Q4 financial performance. Our pro forma EBITDA was just over $4.1 billion in Q4 2024, 9% higher quarter-on-quarter. As you can see on the slide, there were two main factors that contributed to this performance. First, our portfolio optimization strategy allowed for an improvement in our realized all-in premiums of $2.9 per ton sequentially, with a positive impact of $190 million in our EBITDA. And second, our cost efficiency program continues to yield positive results with our unit cost declining across all of our commodities year-on-year. In the particular case of our C1, the positive impact on our EBITDA was $180 million quarter-on-quarter. We think that cost competitiveness is a key element towards protecting our company from market cyclicality, and I'm very pleased with the results that we are achieving. This quarter, our iron ore C1 cash costs excluding third-party purchases came in at $18.8 per ton, almost 10% lower year-on-year. This is the lowest C1 cash cost since the first quarter of 2022. The improvement was primarily driven by our efficiency initiatives and a better production mix with higher volumes coming from the Northern system. Our all-in cost performance was solid with a reduction of over 5% year-on-year, reaching $49.5 per ton in the quarter. The improvement was driven by lower C1 costs as well as by our portfolio optimization strategy, which led to higher realized premiums, as I explained earlier. Our strong performance in Q4 gives us confidence that we are on the right track to continue to improve while delivering all of our guidances in 2025. Looking at our Energy Transition Metals business, we also saw an overall decrease in all-in costs. In copper, all-in costs were the lowest since Q4 2020, reaching about $1,100 per metric ton driven by higher byproduct revenues from Salobo, primarily composed of gold, as well as by improved operational performance. In nickel, all-in costs totaled about $13,900 per metric ton, the lowest since Q1 2022, driven by higher byproduct revenues, especially from copper and PGMs. The Vale-based metals asset review led by Shaun is progressing remarkably well. We are optimizing operations and achieving cost improvements across all business lines. Our focus is on unlocking VBM's full asset potential. Now moving on to cash generation. I will spend a bit more time on this slide to explain some movements in our free cash flow particularly in light of our expanded commitments related to Samarco and Brumadinho. First, our recurring free cash flow generation reached roughly $800 million in Q4, $300 million higher than in Q3. This increase was primarily driven by higher EBITDA and a positive impact from working capital, thanks to strong cash collections in Q4 from Q3 iron ore sales. Our recurring free cash flow was used to address one-off items, such as the advanced payment of $656 million for railway concession contracts. Renegotiating a concession contract allowed us to reduce contract risks and optimize our obligations with a small impact in our provision while securing concession extension until 2057. I would like to highlight that the cash outflows related to the Samarco and Brumadinho commitments are already provisioned in our balance sheet and are part of our expanded net debt concept, which is our reference for capital allocation purposes, including dividends and buybacks. Having said that, those outflows should not be considered in the free cash flow to equity calculations. They should rather be treated as a type of debt amortization. As you can see on the next slide, our expanded net debt remained stable at $16.5 billion in the quarter. Here, we present the main cash and non-cash factors that impacted our expanded net debt sequentially. We are maintaining our $10 billion to $20 billion expanded net debt range, aiming to be at around the middle. This will be the reference for additional shareholder remuneration. As Gustavo mentioned earlier, Vale will pay $2 billion in shareholder remuneration in March, while our Board also approved a new buyback program of up to 120 million shares. This shows our continued focus on returning value to shareholders. With that, I now pass the floor back to Gustavo.

Thanks, Marcelo. Before opening up for the Q&A session, I would like to reinforce the key takeaways from today's call. We have made substantial progress in addressing the key overhangs Vale was facing in recent years, well positioning us for the years to come. We continue to advance on our operational excellence agenda, consistently delivering on the production guidance while capturing sustainable efficiency gains. Our unique endowment provides us with the flexibility and optionality to adapt our portfolio mix to any market scenario. Also, we are strategically building the right portfolio by accelerating accretive growth opportunities, such as the new Carajás program, where we have a highly competitive value proposition. And finally, our disciplined approach towards capital allocation will continue to ensure health shareholder remuneration and value creation for all of our stakeholders. Now let's start the Q&A session.

Our first question comes from Daniel Sasson from Itau BBA. Please go ahead, Mr. Sasson. Your microphone is open.

Thank you very much. Good morning everyone. I appreciate the opportunity. My first question is regarding your sales mix. It's becoming evident that the quality is improving, or there is increasing concentration. However, this also raised your inventories by almost 6 million tons in the second half of last year due to the difference between production and sales. Could you provide some insights into your current inventory levels and whether you are comfortable with them? How does this connect with the company's commercial strategy? If Vale is leaning towards focusing on value rather than volumes in the coming years, that would be helpful to know. My second question is in relation to Gustavo's closing comments about the ramp-ups at Vargem Grande and Capanema, which you commissioned between September and December of last year. Given your production guidance for this year is relatively flat compared to 2024, does this imply that you are considering lower purchases from third parties? This could potentially enhance your cost performance, especially as you deliver in China. I understand that seasonality played a role in the fourth quarter, but your delivery in China was even below your mid-to-long-term guidance for costs. How should we view the evolution of these costs for 2025 and beyond? Thank you so much.

Hey Daniel, Gustavo here. Let me start with the second one, and then I'll pass to Rogério to talk about the sales mix. So the first thing is there is a ramp-up of those projects, right? Both Vargem Grande and Capanema will take some time to reach full capacity. I think that's the first point. And I think the way we are looking into that is that this will give us more flexibility to pursue the value over volume strategy. As we mentioned last year, we could have done more volumes in Q4 than we actually did. So we are taking a similar approach in our projections for this year. So if anything, despite projecting something similar to last year, I think this year will probably give us greater flexibility to play on the value over volume. So that's how we are thinking about it. So I'll have Rogério talk about the sales mix.

Thank you, Daniel. I think you put it exactly right. When we discuss our product portfolio, our focus is on value. So we're not looking only at price realization, not only at volumes or costs, not only at inventories. It is about the optimization of cash flows. Long-term, I think you know our direction is not going to change. We're focused on decarbonization, the mega hubs and that's a different story. In the short term, we're looking into what the market is actually doing right now, what are the margins of our clients? What is the trend in terms of premiums? We're collaborating with our operations colleagues on the supply chain, examining the mines' possibilities, constraints, and opportunities. Looking into the whole supply chain, we're trying to figure out what portfolio design maximizes value. And that's exactly what's going on right now. The decision at this point was to beneficiate iron ore. We thought that moving our product portfolio more towards a mid-grade product would yield better results, and that's what we've done. Our expectation for the coming quarters is that this will be the direction we will take. And you should see some increase in inventories as a result of that. But again, keep in mind that our focus is to work on a flexible portfolio with a view to maximizing value.

Our next question comes from Carlos De Alba from Morgan Stanley. Please Mr. De Alba, your microphone is open.

Thank you very much. My first question is for Shaun regarding Base Metals. Could you provide more details on the progress made so far and the expected results, particularly in terms of costs, production, and shipments throughout the year? Additionally, could you outline the plan to reach the cost target for the year? My second question is for Gustavo regarding the municipalities in Brazil affected by the Mariana accident. We understand that May 6 is the deadline for these municipalities to decide whether to join the agreement reached with the federal and state governments or continue pursuing the pending lawsuit in the U.K. What is the company's strategy if most municipalities decide not to join the Brazilian agreement? Thank you.

Thank you for your questions. This is Shaun Usmar from Vale Base Metals. Your inquiry pertains to costs, competitiveness, and our progress thus far. I want to emphasize that it's been 4.5 months, and I am genuinely impressed with the strides our team has made during this time. To provide some context, we have a globally integrated operation in nickel and copper. Our ongoing priority, as stated on Vale Day, is to unlock our resources, which can only be achieved through cost reduction, enhanced productivity, and agility. In this timeframe, we initiated a restructuring process early on. The team has effectively focused on reducing overhead, and we are on track to cut about a third of our overhead, resulting in nearly $200 million in savings per year, which exceeds my expectations. This goes beyond just cutting costs; it also fosters a decentralized owner-operator model across the business, encouraging higher productivity and cost focus. In the recent period, you can see improvements, such as a record year for Salobo. For example, shovel productivity rose about 5% last year, marking the best performance of shovels in Brazil. The team deserves credit for this achievement. We've also experienced a 10% increase in truck availability and have drilled significantly more meters as we work to unlock our resources. Even in Sossego, a more established mine, we've seen a 28% increase in utilization, emphasizing our focus on effective shift transitions and increased truck parking efficiency for about 16% of the fleet. When it comes to deliveries and costs, our copper segment is aligning well with our guidance for the year. As we ramp up operations at Onça Puma with the second furnace later this year, I expect both volumes and cost efficiency to improve. On Vale Day, we announced successful trials where we increased the nickel content in our furnace alloy from 25% to 35%. The team has positioned us well for the second furnace and is working on improving our products and controlling costs. In Ontario, we've concentrated on improving development rates to address past underinvestment and productivity challenges. For example, earlier this year, we were achieving around 64 meters per day in development, but we are now operating at about 84 meters, with Cracking Mine seeing a 100% improvement in its development capability. This focus spans the board, especially in nickel, where we have seen a significant reduction in costs, which must continue. Our team's priority is to lower both overhead and operating costs in this market to ensure sustainability and to capitalize on any future recovery. Our main goal is to facilitate the copper growth we have discussed, and I believe the team has performed exceptionally well so far.

So Carlos, let me just complement your second question on Mariana. Look, our view is that the settlement in Brazil that we're able to successfully achieve last year is fair, comprehensive, and it is the best alternative and the best path for the reparation to evolve and to move forward. We continue to believe this is the best alternative for all constituents. It provides a fair expedited payment mechanism for all related parties. We have seen very good traction in terms of delivering on the commitments that we've signed. So we continue to believe that this is going to be the ideal and preferred path for everybody to fulfill all of the operations that were agreed among the parties.

Our next question comes from Caio Ribeiro from Bank of America. Please Mr. Ribeiro, your microphone is open.

Okay. Good morning. Thank you for the opportunity. So my first question is on your recent decision to launch a strategic review for Thompson, which you mentioned could include a potential sale of the asset. So my question is, could you also contemplate other assets in Canada such as Voisey’s Bay or Sudbury as candidates for divestment as well? And what specifically about Thompson leads you to consider a potential sale there? And then my second question is on the recent discussions in China to once again implement supply-side reforms for the steel industry back in 2016, 2017, that was a big pain for the industry, which led to a significant curtailment of excess steel capacity. It enhanced the profitability for steelmakers. This time around, how do you see the supply-side reform playing out? And is that something that you see having a material impact for the iron ore business? Thank you.

Gustavo. You okay if I cover the first one?

Go ahead Shaun.

Yes, Caio, thank you for the question. As I mentioned earlier, our primary focus in this current environment is ensuring that we have the right cost structures and productivity in place across the board. Concurrently, we need to identify the right portfolio to maximize value for Vale shareholders. We are in competition for capital within this portfolio, and while there are attractive opportunities in iron ore, our priority remains copper. Regarding Thompson, we have been involved in that operation for over 60 years and have created significant wealth. However, it presents a non-polymetallic opportunity that isn't currently offering the highest returns when we consider the nickel opportunities available. Therefore, we must avoid spreading our limited resources too thin. This is why we have initiated a process for Thompson, and we have seen considerable interest, with the data room opening just yesterday. We anticipate forming a view in the second half of the year and are open to various future paths, including a potential sale. This is a rational approach to optimizing value. It’s also worth noting that we expect to receive an award in two weeks at PDAC for the best copper-gold discovery in the last two decades. The FEL2 study has just been concluded, addressing several previous technical risks, and we will reveal the details soon. This is a strategic moment to consider partnerships, especially with those experienced in block caving. We will continue to evaluate everything within our portfolio under various pricing scenarios. Our main priority is to ensure our cost structures and productivity are correct to unlock value potential for our investors. This is the focal point of our efforts, and we are pursuing these initiatives simultaneously.

On the supply-side reform, the industry is currently operating with excess capacity and furnace utilization is around 85%, resulting in very low margins for rebar and HRC producers. There are two significant events for capacity rationalization happening at the same time. The first is a consolidation taking place within the Chinese industry, which is often overlooked. The second is the potential for supply-side reform 2.0, although we are still uncertain if this will actually occur. The first supply-side reform involved reducing 150 million tons of induction capacity, which was easier to implement due to the presence of outdated and heavily polluting capacity, and it made a significant impact. This impact is more evident in premiums than in iron ore prices. I believe the capacity rationalization will take place, whether through consolidation or supply-side reform 2.0; the main question is when it will happen.

Our next question comes from Leonardo Correa from BTG Pactual. Mr. Correa, your microphone is open. Please Mr. Correa, activate your microphone, and you can start asking your question.

Yes, hello, sorry. Can you hear me now?

Yes, we can.

Perfect, sorry about that. Good morning everyone. I have a couple of questions. First, we've discussed free cash flows and their breakdown. You mentioned the net debt target, which is set between $10 billion and $20 billion, aiming for around $15 billion. Currently, you're slightly above that target at $16 billion. One of the highlights of the quarter was the cash returns, especially with the announcement of $2 billion in cash returns, including a $500 million extraordinary dividend. My first question is whether you view this as a one-time occurrence attributed to reduced CapEx and the stronger price levels we've seen recently. How should we approach extraordinary dividends moving forward? My second question involves recent discussions in the press regarding M&A at Vale, specifically concerning an asset called Bamin. It appears Vale has been doing its homework, as this information is publicly available. Gustavo, could you share insights on the strategic rationale behind this and whether Vale is considering such opportunities? Any additional information you can provide on this widely discussed transaction would be appreciated. Thank you. Those are my questions.

This is Marcelo speaking. Thank you for your question. We maintain our approach regarding cash returns to shareholders and our focus on the expanded net debt concept. Our target is between $10 billion and $20 billion, with the aim to center on 15%. Currently, we are at 16.5%. Looking ahead, we anticipate that even with the increased dividend, we will remain within that range due to a projected reduction in CapEx, which is very secure for this year. We are confident that $5.9 billion is a reasonable figure for this year, and we are assessing its implications for the coming years. We have a strong level of certainty regarding this figure. Additionally, we began the year with a higher cash flow generation than we had anticipated. Therefore, we are confident that after the recently announced dividend payment, we will be close to our $15 billion target, and we are not adjusting our target for now.

On your second question, considering our significance in the country, it's almost our responsibility to explore every opportunity that arises and evaluate them against our strategic direction, such as our focus on increasing the share of high-quality products outlined at Vale Day. We assess these opportunities accordingly. However, any investment will only proceed if it aligns with our strategic and financial criteria and meets our internal return and risk thresholds. While I cannot commit to any specific project that hasn't been announced yet, we will evaluate each under these conditions. If an opportunity makes sense, we will pursue it; if not, we will pass.

Our next question comes from Rafael Barcellos from Bradesco BBI. Mr. Barcellos, your microphone is open.

Good morning and thank you for taking my questions. Congratulations on the results. My first question is for Gustavo. It's great to see you and the senior management team so confident in the company's operational performance, which is highlighted by the impressive dividend announcement. I would like to gain a clearer understanding of how you perceive the overall evolution of the company. If you could provide insights into cost performance, commercial strategy, and institutional relationships, it would be helpful to understand how you view the company's development in these key areas. My second question is for Rogério. You mentioned that your iron ore inventories are expected to increase. I would appreciate more clarification on what this statement entails and any additional details on your overall iron ore inventory strategy. Thank you.

Let me take the first one. So I said in my prep remarks, I'm highly optimistic about the future of the company. I mean we were laser-focused in the initial four months to clear what we thought were key overhangs, so we were able to address all of them. I think operationally, we've never been in the position that we are currently and kudos to Carlos Medeiros and his teams. They've been doing a great work over the years to bring our operational excellence back when you look at all the leading indicators that we track, the company's performing substantially better. It is probably the best time in the last five years in terms of operational performance. And I think we are able to give a greater priority to cost and capital allocation management within the company recently, which I think combining with the operation of excellence should allow us to deliver very strong operation and financial performance, which then resulted in some of the recent decisions that we announced like yesterday, right? So this is I think this is making me and my team extremely confident on the future that we've laid out at Vale Day and our ability to deliver on that future in terms of the superior portfolio of assets continuing to grow both iron ore, the high-quality share of iron ore, but also copper as well as continue to advance on the other elements of our strategy. So that's the way we see now a lot of work to do, but I think we are in a great position today.

Okay, Rafael. On the second question, just again, to reiterate that our strategy is about cash flow maximization and flexibility. Also, it's important to say that we have a sophisticated supply chain. We have many mines. We have iron ores, which are amenable to beneficiation. We have a concentration in Brazil concentration outside Brazil, we have a blending center, and that provides us with the opportunity to optimize value, to maximize cash flows. I think what I was referring to is that as we increase concentration outside Brazil, primarily in China, we have a longer cycle between production and sales. It is different from selling lower grade ore or outside, just as soon as it departs Brazil, okay? We don't sell it at sea, but we need to have material in China. However, this inventory increase is associated with the growth of volumes beneficiated. Once we've reached a steady state, that stops. So it is not as if we're continuing to grow inventory indefinitely. I think you should also think about the flexibility that we're talking about. At some point in time, we might reverse as a strategy if it is not value-maximizing, and then inventories might even decrease, so it is flexibility. That's what we're talking about. It is not about inventory or price realization of volumes alone. It is about cash flow maximization, and you might see inventories increase at times, you might see inventories decrease at times. But particularly this quarter is about the increased volumes in concentration outside Brazil to have a longer cycle time.

Rafael, maybe just to complement Rogério’s note, you should then see a stronger sales in Q1. I think that's one of the things you should expect us to post as a result of this change in strategy in Q4 last year.

Our next question comes from Marcio Farid from Goldman Sachs. Please Mr. Farid, your microphone is open.

Thank you. A couple of follow-ups on my side here. Gustavo, first one for you, please. I think since you took over as CEO, we've been talking about the importance of improving the institutional relationship between Vale, the Brazilian government and other stakeholders as well. Six months into the job, if you can update us on how you see the current relationship how much improvement has shown so far and what you expect going forward as well, especially in the context of the headlines of around Bamin, for instance, around potential change in the Board members in the next couple of months, sorry. That would be great, please. And secondly, maybe to Bacci. Bacci, I mean, I think there's a lot of confidence and a lot of optimism on this call, and I think for the right reasons as well. I think your question is new buyback program announced, I think the company has mentioned before that it could be a year where cash return could be a little bit more conservative just because of how relevant the cash disbursements related to Mariana and Brumadinho are going to be potentially this year. I understand we would not include that on the free cash flow to equity. But I mean, how should we think about buybacks going into 2025, with stronger free cash flow generation potentially with higher iron ore prices, but also you see elevated macro uncertainties, a lot of disbursement. How do you balance that cash disbursement and shareholder returns would be great, please.

So Marcio, on your first question, look, this is something we've been spending a good amount of time on. I've said that before, I think there are a lot of opportunities and convergence in terms of what is good for Brazil and for the state and what is good for Vale. Vale can be an important investor for critical minerals. As we announced last week, for example, the new Carajás. It's good for Brazil. It generates employment, income, but also allows the company to continue to grow and deliver on the long-term strategy for us. So I'm finding a lot of support for those conversations and which I think it's showing up in a more our ability to move some of those agendas that are important for us, and you've seen that recently. So I'm optimistic about that, and I'm seeing an opportunity for us to continue to converge and do investments that make sense for the company, but also makes sense for the environment that we are invested in. So you should expect us to continue to be highly focused on what makes sense for the company, but also understanding that many of those investments also make sense for the country.

Marcio, in response to your second question, I want to highlight that our target for expanded net debt around BRL15 billion will be a key reference in deciding whether to proceed with the buyback program. We announced our intention to keep the program open, and our participation will depend on our cash flow generation. We will be closely monitoring this situation. If the right opportunities arise, we will certainly initiate the buyback program, but we will remain cautious and clear about our strategy regarding these buybacks.

Our next question comes from Myles Allsop from UBS. Please Mr. Allsop, your microphone is open.

Thank you for taking my questions. I have a couple regarding the buyback. Why choose a buyback over a special dividend? The share price seems unlikely to drop much lower than it is now. Why not proceed with the $500 million buyback to return cash to shareholders? Also, for Shaun, regarding base metals, we've had copper growth options in place for many years. When can we expect visibility on permitting and final investment decisions so we can have more confidence in growth in Brazil? Thank you.

Myles, in terms of dividends and buybacks, we aim for a balanced approach between both, based on the current situation. In recent times, the company has leaned more towards buybacks than dividend payments. Now, we're introducing additional dividend payments. Looking ahead, if our cash flow allows us to return more cash to shareholders, we will likely maintain a balanced strategy between dividends and buybacks, considering the share price at that time.

Myles, it's Shaun. On your question, I think similar to what we talked about at Vale Day, the focus in the short term, as we're seeing with Salobo and Sossego productivities and getting these up to their entitlements and actually continuing to expand and drill to the extent we can. The next one that we're focusing on where we are expecting permits in Q2 of this year is on Bacaba and there's a lot of focus on that. And you would have seen low capital intensity about $10,000 a ton, and that's the sort of core focus. Beyond that, we're talking a slightly longer time line with projects that we'd indicated, things like Alemão, Cristalino, and elsewhere. You would have seen the announcements and material last week on Novo Carajás. The work that Gustavo and the team are doing, particularly on the government relations and institutional side is really a core focus to help unlock that and to ensure that we can demonstrate with our stakeholders. And I'm sure Gustavo, I don't know if there's anything you wanted to add to that.

I think you've covered it well. One point I'd like to emphasize is what's changing. We are altering our development approach in the region. With support from Shaun and the team, we have assembled a dedicated leadership team exclusively for the new Carajás development, which will involve increased investments in drilling, exploration, and understanding the ore body. We believe this will help us gain a clearer insight into each of our projects. There are several projects in the region that have been difficult to develop over the years. I am confident that with this new strategy, we will make significant progress. Our goal is to share milestones and advancements in the coming quarters to show you the developments and targets we've set. I am optimistic that this focused approach will enable us to grow more rapidly in that region.

Our next question comes from Timna Tanners from Wolfe Research. Please Tanners, your microphone is open.

Great, thank you and good morning. I wanted to ask now that we're more than halfway through Q1, what you can tell us about volumes so far this quarter, any trends in costs? So that's my first question on Q1. And then looking at cash costs, they've certainly been benefiting, of course, from the weaker currency by-product credits, of course, in base metals. But what can you do to elaborate on these measures that you're working on to lower costs? And any progress there would be great. Thank you.

Timna, on Q1, our performance was similar to last year's performance, although we are having a more intense rainfall this year, but all the asset preparations that we have been doing over the last two years are paying dividends to us. So in spite of that, we foresee a similar performance year-on-year.

On the cash cost performance, I think you're right, there is an effect coming from BRL, which is not a major one. But it is there and the currency is volatile, so we cannot count on that for the future. I think the main measures that we're taking that are paying off in terms of cost management are: First is production stability and operational stability that always brings good news when it comes to cost. The second one is the new projects that came online with a lower cost, especially for iron ore. And third, we continue to move on our program of these packs on the suppliers' relationship that gradually, all those measures together are starting to pay off, and you can see the results of that in the C1. Now it's important to mention that C1 is not linear through the year. We have some volatility in the different quarters. But if you look at the moving average, we will continue to see the C1 declining throughout the year.

Our next question comes from Liam Fitzpatrick from Deutsche Bank. Please, Mr. Fitzpatrick, your microphone is open.

Good morning everyone, and first question is just another one on the buyback, unfortunately. I just wanted to clarify or trying to understand how you want us and the market to think about it. Is this just to give you flexibility later in the year? And we shouldn't expect to pick up over the next one to two quarters? Or is this buyback effectively in place from today? That's the first question.

The buyback is in place already. And how we are going to operate in the market is something that we cannot be very clear about for obvious reasons. But yes, we have the ability to operate whenever we want from now up to 18 months.

Our next question comes from Marina Calero from RBC. Please, Mrs. Marina, your microphone is open.

Hello, can you hear me?

Yes, we can.

Hi, good afternoon, thanks for the call. I have a question on your CapEx guidance. It looks like most of the savings were on growth CapEx. Can you provide more details about the different drivers behind that? And as an extension of that, do you see potential for more efficiencies after 2025?

You're right, most of the reductions are on the growth part. We are not changing the scope of the CapEx program, but rather working partially on timing and partially on efficiency. This is something that, for the time being, is only related to 2025. We are very confident that in 2025, we're going to deliver this BRL5.9 billion. We are still working on what's going to be the guidance for the future for the coming years. We're not prepared for that discussion yet, but we are working on that.

Our next question comes from Yuri Pereira from Santander. Please, Mr. Pereira, your microphone is open.

Hi guys, good morning, thank you. First question is about the CapEx revision for 2025. Is there anything other than the new FX assumption you could please explore a bit more about it? And the second question is considering current iron ore prices, do you see room for financial debt increase in order to achieve the expanded net debt target? Thank you.

On the CapEx front, we are assuming the currency stays at the current level, approximately BRL5.7 million, so there won't be a significant impact from foreign exchange. Regarding financial debt, we will be keeping an eye on market opportunities and may pursue new transactions. Our goal is to reach an expanded net debt of around $15 billion by the end of the year.

Thank you. This concludes today's Q&A session. Vale's conference is now concluded. We thank you for your participation and wish you a very good day.