Good morning, ladies and gentlemen. Welcome to Vale's Second Quarter 2025 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. 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 their respective presentation. We caution you that forward-looking statements are not guarantees of future performance and involve risks and uncertainties. To obtain information and 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, the Brazilian Comissão de Valores Mobiliários. 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. Marcelo Bacci, 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; and 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 Second Quarter 2025 Conference Call. First, I would like to take a moment to remind you of our strategic direction as defined by our Vale 2030 vision. We are building a leading mining platform with the right portfolio of assets as we leverage our unique endowment to deliver accretive growth opportunities in both copper and iron ore. We are also highly focused on continuing to gain competitiveness across all commodities. And this quarter's performance only reinforces that we are on the right track to achieve our stated goals. Another key element of our strategy is the increased focus on talent development and leadership. To that end, I'm very happy to have a world-class executive committee team fully in place now with the recent arrivals of Sami Arap as our General Counsel and Grazielle Parenti as our VP of Sustainability. Both professionals bring enormous experience and expertise and will certainly help us to deliver on our long-term strategy. Now let's move on to the highlights of this quarter. On safety, we are pleased to see clear progress towards creating an accident-free work environment across all of our operations. Our safety indicators for the first half of 2025 have clearly improved compared to last year, represented by a 55% reduction in the high-potential recordable injuries indicator, and we continue to lead our peers in TRIFR. These results are reassuring and confirm that we are on the right path to becoming the safest mining company in the world. This quarter was also marked by another solid operational performance across all business segments. This shows that our focus on operational excellence and on building a superior portfolio are paying off, putting us on track to meet all of our guidances for the year. Iron ore production reached 84 million tons this quarter, 4% higher year-on-year and our highest second quarter output since 2018. Growth was mainly driven by the ramp-up of new assets, such as Capanema, along with a strong and consistent performance from other sites. S11D, for example, hit another production record this quarter. We remain committed to increasing the flexibility of our product portfolio, which allows us to respond more effectively to market conditions and capture greater value through our commercial strategy. In our Energy Transition Metals business, we continue to make solid progress. Nickel production rose 44% year-on-year, driven by productivity initiatives and the successful ramp-up of the Voisey's Bay underground mine. I'm also happy to announce that we have started Onça Puma's second furnace commissioning. The furnace, when fully ramped up, will contribute 12 to 15 kilotons of nickel production and will be very cost-competitive. Copper production also performed strongly, increasing 18% compared to the same period last year, our best second quarter since 2019. The strong performance at VBM highlights the great work Shaun and the team are doing to unlock value from our existing assets and position the company to deliver on our long-term goals, including the highly promising copper growth. Early in the year, we launched the New Carajás program with the vision to accelerate the development of essential projects in one of the most attractive mineral deposits globally. Since then, the team has been working on several fronts to advance those projects, including increasing the exploration spend to better understand the endowment in the region with very promising results to date. The first important milestone for the New Carajás program was the preliminary license for Bacaba granted in June. Bacaba will extend the life of our Sossego plant by 50 kilotons a year at a very competitive capital intensity of $5,400 per ton, a clear demonstration of the potential value creation we have in the region. As we advanced on our growth story, one thing remains clear: being a performance-driven company is at the core of our strategy. Our efficiency program driven by innovation and technology is enabling us to consistently reduce costs at a time when much of the industry is struggling to contain inflation. This was the fourth consecutive quarter of year-on-year reduction in our C1 cash cost, putting us on track to meet our 2025 guidance of $20.5 to $22 per ton. Becoming more competitive and efficient is a top priority for our team, and we will continue to pursue this objective as a key element of our strategy and culture evolution. Finally, talking about the third pillar of our vision, which is to become a trusted partner for society. Vale recently published its first sustainability-related financial information report, being the first company in Brazil and the first major mining company globally to do so. The report outlines climate-related risks, making clear how Vale is managing those while identifying key opportunities for the company, such as the steel industry decarbonization and the increasing need for critical metals like copper and nickel. I encourage you all to explore this report, which reflects our commitment to leading the industry in transparency and sustainable mining initiatives. I will now pass the floor to Marcelo Bacci to discuss our financial performance. I will be back for closing remarks before the Q&A. Marcelo, please go ahead.

Thanks, Gustavo, and good morning, everyone. Our pro forma EBITDA reached $3.4 billion in the second quarter of '25, improving 7% quarter-on-quarter, but down 14% year-on-year, driven by the 13% decline in iron ore reference prices. We once again delivered a solid operating performance with production volumes rising and costs declining year-over-year across all commodities. This efficiency-driven mindset is increasingly shaping the way we operate, and our results reflect the commitment and discipline of our teams. Let's take a closer look at the details of this quarter. Starting in iron ore, our cost performance continues to show strong momentum, marking the fourth consecutive quarter of year-on-year decline. In Q2, our C1 cash cost reached $22.2 per ton, down 11% year-on-year, driven by our efficiency initiatives and a favorable exchange rate. The all-in cost declined 10% year-on-year, reaching $55.3 per ton. This improvement was driven by lower C1 costs, lower expenses, and improved premium realization on iron ore fines. We are starting to see the benefits of our portfolio optimization strategy with more to come in the coming quarters. We remain highly confident in achieving our full-year guidance for both our C1 and all-in costs, implying year-over-year cost reductions despite inflationary pressures. Our Energy Transition Metals business delivered another strong quarterly result with substantial improvements across all assets, reflecting the impact of the Asset Review initiative led by Shaun. In copper, the all-in costs decreased by 60%, reaching $1,400 per ton. This reduction was driven by strong performance at both Salobo and Sossego, along with higher byproduct revenues benefiting from higher gold prices. The lower-than-expected costs in the first half of the year combined with a more favorable outlook for byproduct revenues allow us to revise down our 2025 all-in cost guidance for copper. We now expect a range of $1,500 to $2,000 per ton, which, considering everything else constant, would imply a $300 million EBITDA improvement for the year. In nickel, the all-in cost decreased by 30% year-on-year as a result of robust operating improvements in Sudbury and Voisey's Bay with the ramp-up of the underground mines as well as higher revenues from byproducts. Now moving on to cash generation. Recurring free cash flow reached $1 billion in Q2, $500 million higher than in Q1, driven by a higher pro forma EBITDA and a lower working capital variation. Our CapEx continues to trend downward, reflecting gains from our efficiency program and the completion of key projects like VBME and Capanema. We remain confident in delivering the $5.9 billion CapEx guidance for the year. Additionally, yesterday, our Board of Directors approved a distribution of $1.4 billion in interest on capital to be paid in September, in line with our dividend policy, reinforcing our continued commitment to return value to shareholders. As you can see on this slide, our recurring free cash flow enabled a reduction in our expanded net debt, which ended the quarter at $17.4 billion. Our target range for expanded net debt remains between $10 billion and $20 billion. We expect to gradually move back towards the midpoint of that range in the coming quarters, supported by strong cash flow generation in the second half of the year and the positive impact of the Aliança Energia deal, which we expect to close in Q3. To conclude, I would like to reinforce our continued disciplined capital allocation approach, keeping our expanded net debt within our target range, controlling CapEx, investing in accretive projects, and delivering strong shareholder returns through dividends and buybacks. As Gustavo mentioned earlier, we also remain firmly committed to our efficiency program, ensuring we become an even more competitive company. With that, I would like to pass the floor back to Gustavo for the key takeaways.

Thanks, Marcelo. Before we open up for the Q&A session, I would like to highlight the key takeaways from today's call. Safety and sustainability are core values, and we are committed to continuously improve our performance while also increasing transparency and keeping an open dialogue with all of our stakeholders. We continue to consistently advance on our operational excellence efforts, which are enabling us to reach record production levels across all of our businesses. Competitiveness and efficiency remain a top priority as the resulting all-in cost reductions will make us more resilient to generate value through the cycle. Carajás is one of the best copper provinces globally. Through our New Carajás program, we are accelerating copper growth by developing accretive projects in the region, such as Bacaba, creating long-term value for our shareholders. And finally, our disciplined capital allocation approach will continue to ensure health, shareholder remuneration, and value creation for all of our stakeholders. Now let's move on to the Q&A session. Thank you.

Our first question comes from Marcio Farid with Goldman Sachs.

Maybe my first question to Rogério, please. Rogério, when you look at the production report, it was very clear that Vale's commercial and product strategy was very adapted to the environment. So we saw big swings in terms of product delivery. IOCJ was basically cut in half, low-grade ore basically doubled, and pellets went down a bit in line with the guidance. So I'm trying to understand how you're thinking about product mix going forward when you consider where premiums are, since Simandou is probably ramping up high-grade ore into next year, and obviously, considering Vale's asset base in Brazil and the blending facilities as well, please? And secondly, my second question is to Shaun, on the Base Metals side. Nickel was quite robust, obviously, from low levels, but even adjusting for nonrecurring items, it was very strong and EBITDA basically increased 4x. So just wondering if it's a new recurring level? Can we expect more cost savings and more profitability improvement, both on nickel and copper as well, generally speaking?

Marcio, thank you for the question. Regarding our product portfolio, I want to emphasize that we are concentrating on creating value and optimizing total contributions by considering premiums, costs, and volumes. This requires a comprehensive understanding of where we can generate value. We are actively working to enhance flexibility in our supply chain and adjust our product offerings as the market evolves, specifically in response to changes in premiums and steel margins. To achieve this flexibility, we are increasing our concentration capacity and blending capacity both in China and elsewhere. For instance, in response to declining steel margins over the past couple of months, we completely revised our portfolio. We introduced a mid-grade Carajás ore and increased the concentration of high-silica ores. This strategy not only adapts our products to market demands but also simplifies our mining operations, improving resource conversion. Consequently, we are able to reduce costs, boost production, and streamline our product range, leading to overall system optimization. Recently, we successfully tendered new projects in Carajás and mid-grade products, which should have a positive impact. For example, there has been a notable change in BRBF premiums compared to Index 62%, with significant increases for BRBF. Also, premiums on concentrates have risen, particularly in the spot market in China. Additionally, silica penalties narrowed by about $2 per ton relative to alumina ores from April to July. These are important improvements in price realization. When considering Vale's overall portfolio, this results in a substantial impact since our ores generally have higher silicon levels. Regarding Simandou, while it will alter market dynamics, we are ready to adjust our product mix and channel allocations as Simandou enters the market.

And Marcio, it's Shaun speaking. So to your question, I think you may recall late last year, Vale Day, and in Q1, we set about with the Base Metals business doing a few things. The first was looking to lower our global overhead through efficiency programs to make the organization as effective as possible and reengage the operations so that they can effectively be as productive as possible and successfully compete for capital. We call it internally project catalyst. And what we've seen to date on that initiative has been quite remarkable with the team's response. So you'll recall in Q1, we said that we'd removed about one-third of our global overhead and G&A. We've actually gone beyond that. I think at the time in Q1, it was about a $285 million cash flow improvement on our internal budgets from last year. We're looking out at about $340 million, and I see more opportunity. And I think what you see in this quarter is the first with the lag between what appears in our actual accounts and then the timing on cost of goods sold, you're seeing the flow-through. So our latest numbers now are in our forecast. We're banking about $340 million of cash improvements where more than half of that is in OpEx, the rest in CapEx. To your point, nickel, out of necessity just given the point in the cycle, I think we're seeing is a disproportionate amount of those savings. And we're also seeing a large impact from fixed cost dilution and also the benefit of polymetallic. So just a few things to consider. I think we're on track for certainly the best performance we've seen in copper, particularly at Salobo and Sossego, with the productivity improvements, unit cost improvements alone, we're seeing nearly a 40% improvement with the work that Vinicius and his team is doing. So despite the copper price environment and gold price environment being very supportive, those efficiency programs are driving results. So you're seeing fixed cost dilution occurring with increased volumes, but also low overhead. So there's that double whammy plus the benefit of the byproducts. And to put that in context for you, I think we had mentioned this on the last call, but it's worth just reiterating it. For every $100 an ounce move in gold price, it's about $135 a ton improvement in all-in cost for copper, for example. Importantly, when you go to nickel, we're seeing a big volume effect in addition to substantial fixed cost reductions that we're just starting to reveal from Voisey's Bay, as Gustavo has mentioned, we're seeing a very successful ramp-up of the underground there. Peter and his team are about 30% ahead of our internal plans and are well set to continue with that successful ramp-up. And, very pleasingly, because of the owned feed feature going into Long Harbour, we've actually seen the team achieve nameplate for the first time in the history of that operation in May. We look forward to seeing those teams continue to deliver the throughputs, particularly driven by our own feed, which has cash flow benefits for our business. Sudbury has also shown significant improvements, not just in overhead reductions, but throughput. You'll see that Totten, for example, had the highest ore hoist that we've seen in the first half of the year there in over six years. And in Creighton, it has the highest metal produced month in June since nearly a decade. And Ontario itself, when you look at copper, just to remind you, only about 40% of our revenue coming from that complex is nickel, the rest is copper, cobalt, PGMs, and that diversification is helpful. But we're seeing about 6% more copper in the first half versus the same period last year. And going back to the polymetallic piece, as you consider the sustainability and potential going forward. For every $1,000 a ton move in copper, all-in costs move by about $460 a ton. Platinum, for every $100, it’s about $55. Palladium, for every $100 an ounce, it's about $60 a ton. And gold for every $100 an ounce is about $25 a ton. So across the board, we’re seeing performance improvements. Onça Puma, as Gustavo mentioned, just started the second furnace. Even before then, we’re heading for second quartile improvements, and we should be on track for metal by the end of Q3 in that operation and a very competitive position. So I'm very proud of the team. I think we're on track, and I think you should expect to see the continuation of us focusing on delivery of increased volumes, fixed cost dilution, reduction of fixed costs, and improvements in productivities.

So I have a couple of questions. I think more towards Bacci, but feel free to jump in whoever wants to help. But I want to explore a little bit more the side of costs. It's clearly the highlight of the quarter. As Gustavo mentioned, 10% lower iron ore, 60% on copper, and 30% on nickel, that's quite impressive. And I wanted to explore a little bit of the future on the cost side. So what is structural here? And probably more important, is the baseline of opportunities on the cost side, is it still pretty healthy? Can you give us a little bit more color? You do seem very comfortable on the guidance, but I just wanted to hear a little bit more detail on the cost opportunity on VBM and on iron ore as well. That's my first question. And the second is on shareholder return. This is a recurring question that I get from investors. The company is doing well. Clearly, we're seeing the performance stable, the company is generating cash, and the stock is cheap, at least, that's our assessment. So the question is on shareholder returns, Bacci. Looking forward, do we have to see a buyback program being something that the company will be pursuing more aggressively? Those are my two questions.

Rodolfo, thank you for the questions. On the cost side, we feel very confident about delivering the guidance for this year in iron ore. The operational performance has been very stable, and new operations are coming in at a good pace, and we feel good about continuing to deliver according to guidance. Of course, in the second half of this year, we have tougher comps since the performance at the end of last year was very good. But we are feeling very confident about the guidance that we have for iron ore. On the Base Metals side, as Shaun mentioned, we also have a very consistent and robust operation today that enables us to believe that we are going to continue to deliver the same level of cost in nickel, around the same level that we have today in the second half of the year. And we have this new guidance that we published for copper that we also feel very confident about. So the performance and stability of our operations are making us believe that the cost performance will continue to be within the ranges of the guidances that we provided to the market. Regarding shareholder returns, we just announced the dividend in the form of interest on capital for this first half, which is related to the minimum policy we have, 30% of operating cash flow. During the second half of this year, depending on how we perform on cash flow, we will decide about potential additional dividends and/or buybacks. We just announced today the approval by our Board for the potential usage of derivative instruments that could enable us to manage the cash flow in a better way. So I would say that we continue to see a mismatch between the operating performance and the valuation that we see in the market. So we are getting prepared to move forward with some of these actions during the second half of this year.

I had two questions. The first one actually just following up on that last answer, just around the use of financial instruments and derivatives for the buyback. Can you just go into a bit more detail to explain exactly how that would work and the potential quantum of it? And does it enable you to start a buyback earlier than you might have otherwise done, potentially in the second half of the year? And then my second question was just on Vale Base Metals. I just wanted to ask about the recent departure of Mark Cutifani and whether that indicates any change in strategy to VBM over the long term?

Thank you, Amos. In relation to the derivatives usage, it's important to mention that according to the regulations of the Brazilian authorities, we have to be very precise about what kind of derivatives we use for the buyback program. So the approval we got yesterday from our Board was just an explanation of what would be the different type of derivatives that we are authorized to use. Basically, the decision between buying straight in the market or using derivatives is related to the cost of capital and also to cash flow management of the company. So we wanted to have the options open to go one way or the other, depending on how the market performs in the second half of this year. But regarding the decision to actually go to the market and perform the buybacks, this will depend, of course, on how comfortable we feel in terms of cash flow generation and the room we have on our net debt policy.

Amos, Gustavo here. On the VBM Board and the departure of Mark, there is no change in its strategy. That was always the design when we invited Mark to join us. The idea was to set up the Asset Review, help us build the team, and that has been achieved. He was extremely helpful, and we are very grateful for the work that he did. And it was the design once we had the team in place that they would then take over and move their strategy along. So no change in strategy. If anything, what you want to do is accelerate the future that we laid out for VBM.

Yes. So a couple of questions on my side. Number one, just moving back to maybe Rodolfo's question on the cash returns, which I think is the central element to Vale's investment thesis. I mean there's a bit of a glass half full or half empty. Vale, when you look at the dividend that was announced, it's a 7% yield. We sense this is higher than the Australian peers. However, lower than some Brazilian peers and much lower than the CDI rates, which are the reference interest rates in the country. So the question always ends up being, I mean, what does Vale need to see for extraordinary dividends to return to those brighter days, with strong cash returns, double digits, with Vale paying extraordinary dividends? So maybe a bit redundant again, but we've been seeing iron ore prices surprise on the upside. I think many observers have been waiting for a correction, which hasn't come, and maybe will not come, who knows. It's very difficult to forecast. But would it be fair to say that in the current environment, with some of the proceeds in the third quarter from Aliança and with, let’s say, the resilient iron ore price, would you see Vale back to extraordinary dividends towards the end of the year? So that's my first question. Again, trying to address the marginal buyer at Vale. With that in the mindset, it depends on who you talk to, people see the dividend as high or low, or relatively low. The second question to Marcelo specifically on the CapEx guidance. I mean, the free cash flow number in the quarter was solid, 10% yield. It was based on a relatively low CapEx figure in the quarter. I mean $1 billion of outflows in CapEx. I know it's wrong to annualize this, but it's natural to do. I mean $4 billion, your guidance is almost $6 billion, slightly under $6 billion for the year. I know there's an erratic pace to CapEx, but I think the natural question would be, why not reduce the guidance or what are the risks that you end up with lower outlays versus your guidance? Those are the two questions.

Thank you, Leo. On cash returns, first, I don’t think it’s fair to compare with CDI, right? This is not our cost of capital. But I understand where you come from. The scenario is one that if we continue to see iron ore prices around $100, I think there's a good chance that we have room for additional payouts in the form of buybacks or additional dividends in the second half of this year as we did last year. But we're going to have to see how the market performs. We are very confident on the tools that are under our control on the cost side. But of course, we depend on market prices to determine the cash flow we have available in our hands to determine the allocation of capital that will most likely include more returns to shareholders if we are more towards a situation where our expanded net debt moves towards the midpoint of our range, which is $15 billion. So if we feel that we are going in the direction of going below $15 billion, increases the chances of additional payouts will probably increase. And we are going to have to decide if we're going to go in the direction of buybacks or additional dividends depending on how the market is performing. On the CapEx side, we do recognize that the number for this quarter was relatively low. That was a seasonal effect. We feel very confident about the $5.9 billion guidance we have for the year. At this point, there is no indication of a change in the guidance for the year, but rather only a seasonal effect for this quarter.

My first question is related to pellets and maybe Rogério, you can talk about the strategy of maximizing value and not necessarily quality in your portfolio. How do you see or to what do you attribute, Rogério, the recent decline in pellet premiums? Do you think that maybe the anti-involution or the supply-side reforms in China could help on that front if steel producers' margins increase? And do you see that happening at some point given that your all-in guidance for premiums this year would likely imply a significant improvement in the second half? And maybe my second question to Shaun, you talked a little bit about the reduction in your guidance for copper production costs. And you mentioned that a chunk of that came from higher gold prices, right, or higher byproduct sales. But specifically for gold, a big chunk of that or almost all of it is you don't get to keep it, right, because of the streaming transactions you've made in the past. Do you think or are you interested at all in maybe renegotiating some of the terms of those acquisition deals, or do you see in any way the possibility of increasing your exposure to gold? Or is it something that you'd like to do?

Daniel, thank you very much for the question on pellets. I think first, the market that we serve is the market of the Atlantic. We also serve the MENA region, the U.S., Japan, Korea, and Taiwan, not so much China. So the dynamic is a little bit different. I think what we're facing and when we look into the short term is a decrease in demand because China has been exporting a significant amount of steel. And those products are actually coming into the regions I just mentioned, and they are reducing the necessity for higher production in these regions. Thus, with less productivity requirements, most of our clients are reducing the amount of pellets they use in their burden. So this is a lot related to the steel exports going to those regions. In addition to that, I think there is also the increase in supply from Samarco and some from LKAB. We are monitoring this situation very closely. I mean, obviously, we expect this to change, and gradually more demand will come from pellets. When you look into the medium- to long-term, we see a significant increase in demand. There are several electric arc furnaces being planned around the world in different geographies. To name a few, if you consider Europe, you may see ROGESA, thyssenkrupp, Salzgitter, SSAB. If you go to the MENA region, there are mills in North Africa, Tosyali, LISCO, Suez, and others. In the U.S., we're just following Hyundai's decision to install a new electric arc furnace in Louisiana. Ternium Mexico is expanding. There’s also Big River #2. In Japan and Korea, Nippon, JFE, POSCO, are all looking at electric arc furnaces. I think the view is that gradually, these projects are planned to come into place by 2030. So what we see is that despite the exports from China, which impact primarily the blast furnace market, we see a lot of demand coming on board gradually, and pellet prices should recover. How fast this recovery will be is still a bit difficult to define, but we’re monitoring closely and taking necessary actions in terms of capacity and production of our pellets.

Yes. And Daniel, a good question on the streaming transaction. You may recall my role before this was having founded streaming and royalty businesses. So I've been on the other side of this sort of question. I think it's useful. So firstly, we have a contractual arrangement primarily with Wheaton on Salobo, and these are financing transactions that date back a long way, right? The management team in Vale at the time would have had a choice between issuing equity or debt. And just like that, where you're not going to renegotiate contracts that you made with your equity or debt holders, we have a contract that we're delivering on. But to put it in context, proceeds received so far on those streaming transactions going back to 2013, excluding ongoing payments, are about $4.1 billion that the business has received. And to your point, our focus here is on really where we can control. We've actually outperformed on gold in the first half just with the ebbs and flows of both the performance of Salobo as well as the mine sequence. So we expect that to be a bit less in the second half. But really, the focus for us is on optimizing the production as a whole. We are the beneficiaries of the residual gold regardless, and if we were ever to look at financing alternatives for future growth, we consider all options, but we're focusing mainly on optimizing free cash and allocating our capital wisely and honoring our contracts.

Thanks for your question, Carlos. I will start answering, and then I will hand over to Rogério to talk about the market aspects and the tests with our customers. So the briquettes line so far is stabilizing. In July, we produced 40,000 tons, which was our best mark in a month. We had the line down during June to correct a few things that we believe were necessary. What we see is that the line will ramp up and also quality is improving daily. So we are confident that we are coming up with a product that will be helpful to our customers. So Rogério, if you can complement that.

Thank you, Medeiros. Thank you, Carlos. On the briquettes side, Carlos, we have a lot of interest from our clients. We have a huge backlog of clients looking to test it. But let me give you the current status. We need to separate this between blast furnace briquettes and direct production briquettes. On the blast furnace briquettes, we have done more than 10 in the pre-industrial trials very successfully. We have completed two full industrial trials, one of which achieved 100% briquettes in the burden mix in a smaller blast furnace and another achieving 50% of the burden mix with a larger blast furnace. I think what I can tell you is that the results were excellent in terms of productivity and coke rate, better than running with pellets. We're now planning for still this year, two very large industrial trials, which is the final product validation. For direct reduction, we have run more than 10,000 basket tests with different clients around the globe, and most of those tests have been extremely successful with a very high metalization of the product, much better than in pellets. We have also had very good indications of productivity. This is one of the things we've noticed, especially in direct reduction. The briquettes, because of their configuration and morphology, yield much higher productivity in shaft furnaces. We're now completing and going to larger industrial trials with selected clients. But upon confirmation of the results, we believe this is going to be a real breakthrough for the industry.

Yes, Carlos, it's Shaun. On your question on the second half, I know my Chief Operating Officer is online listening to this call and feeling the heat in the second half as we go into this. I think I say that because clearly, each of our operations have stepped up, and the performance you've seen to date is not isolated to just copper or nickel or just Salobo or, say, Ontario. We're seeing opportunities across the board. I would caution that as you think about the second half, we are looking at more planned maintenance, which will impact volumes and obviously some cost in Q3. So you should think about H2 as being somewhat similar but more back-end loaded. And I think the only other thing to frame is, bear in mind, we're ramping several operations right now. And so we have factored that into our risk assessments in the numbers we're putting out publicly. We just started the second furnace at Onça Puma. We are still in the midst of ramping several operations, and we need to ensure our teams stay coordinated across those facilities. We may also have to take action if there are issues arising with those operations. So to summarize, you should see more back-end loaded performance. And as you'd appreciate in this industry with this volatility, it's essential that we are as productive as we can be and as cost-competitive, and that's our focus.

Next question from Rafael Barcellos with Bradesco BBI.

My first question is for Rogério. Rogério, it would be interesting to understand how the new volumes from Capanema and even from the Serra Sul project will change your overall commercial strategy? And then my second question is really about your views on the iron ore markets. I mean, despite the fact that we are dealing with several macro uncertainties, key data points remain very solid for iron ore and steel, with steel prices and margins increasing in recent months. So I just wanted to hear your thoughts on the second half for iron ore markets, particularly what are you seeing in terms of demand trends for the second half?

Thank you, Rafael. Let me start with the second question, which is the global outlook. When you look into the world global steel market, it's still volatile, as some of you just pointed out. But we feel it's more stable after the intense rounds of tariff negotiations. If we divide this into China and outside China, just in China, I think you may have seen the recent reports from the Politburo meeting suggesting mild economic incentives. This is because in the first half of 2025, the Chinese government has achieved a GDP growth over 5%. We don't expect a lot of change but mild incentives. Secondly, I think they also emphasized industry capacity rationalization under the anti-involution policy, which affects steel. Some might think this is negative for us, but quite the contrary, the mills which are outstanding will have higher margins. With higher margins, they will need more productivity. And with more productivity, they will need higher quality ores. That is very positive for us in Vale specifically. More specifically, looking at the Chinese steel mill, starting with crude steel production, crude steel production has declined by 3% year-on-year. But here is the caveat. When we look into pig iron production, produced with iron ore, the decline has been only 0.8%. That indicates that the bulk of the crude steel decline has come from scrap-based electric arc furnaces. Other traditional indicators have not offered much surprise. When you look into fixed asset investments, steel mills profitability, or even steel inventory, there’s no surprise there. There's been not much change in the Chinese market. On the subject of iron ore, still in China, I think it's very stable from what we've seen in the past, with imports of iron ore and inventory at ports hanging around 140 million tons. So no real surprise. I think the point to highlight here is the situation outside China connects a bit with the previous question on pellets. The exports coming out of China, which we forecast will exceed 100 million tons for this year, are impacting negatively crude steel production and productivity requirements outside of China. On the positive side, India’s crude steel production has increased by over 9% this year, which is significant. A lot of iron ore from India that was going to the seaborne market is actually coming out. More importantly, India is opening up for imports, especially for our kind of ores that are very complementary to their ore in terms of chemistry and size distribution. This year, we anticipate that we will be selling to India more than 10 million tons, expecting to grow this over the next years as we partner with some Chinese players. Overall, we think despite the volatility that I mentioned in the beginning, the global iron ore market is balanced. On your second question regarding Capanema and Serra Sul, they will be integrated into our broader supply chain, and we'll define how to better allocate it depending on steel margins and premiums. This is part of the broader portfolio optimization.

So two questions on iron ore. The first one on the production outlook, it's great to see the higher production coming in, Capanema and Brucutu and the Northern Range are also performing quite well. But production growth year-to-date has been quite low, right? So I just wanted to get an update from you on the ramp-up expectations of your multiple assets looking into the second half of the year and into 2026. You're arguably tracking in line with your 2025 guidance. But for 2026, the question is, it implies a 20 million-ton growth when you think about the midrange. So I just wanted to hear from you if you remain confident on your 340 million-ton to 360 million-ton guidance, which again implies a relevant growth from where we are. And is that Vale's plan under pretty much any iron ore price scenario? Or could we see lower depending on market conditions? If we see iron ore prices moving to $90 per ton next year, for example, is this still going to be with the level of production that we should be looking at? And the second one is also related to the caves decree; just wanted to get an update from you on how the conversations and engagement with the government has been evolving in recent months. It’s arguably taking longer than expected, so I wanted to get this update and also hear from you if Vale is working with the potential of not getting this decree and what implications that could have for the company if so.

Regarding the new projects, Capanema and Vargem Grande, they continue to ramp up as planned. At Capanema, we have already produced a little bit more than 1 million tons. As a matter of fact, we are ahead of schedule in our ramp-up curve in Capanema. At Vargem Grande, we are slightly below our ramp-up curve. But all in all, we remain confident that we will achieve the 325 to 335 guidance for 2025. As far as 2026 is concerned, we remain also confident that the 340 to 360 guidance is achievable and will provide a more accurate number during the Vale Day later in the year. On the caves decree, I will hand over now to Gustavo that will talk about it.

Caio, Gustavo here. Just to complement on the prior one, and then I'll talk about the caves. But we'll continue to play value over volume as we always did. Remember last year, Q4, we removed 8 million tons from the market because it didn't make sense for us to place those volumes. We'll continue to be highly disciplined. I think one of the beauties of Vale vis-a-vis competitors is that we can bring projects online with substantially lower capital intensity. Bringing those projects makes sense because it allows us to operate at a CapEx level that is significantly lower than our competitors, freeing up free cash flow for our shareholders. As for the caves decree, we are hopeful and will continue to monitor it. It's certainly an initiative led by the government. If we look at the status today, the licensing process for Vale projects has improved compared to where we were two years ago, which is part of the operational stability of the company. We think we can enhance that by modernizing the caves decree, and that's what we are working towards. Yes, the team and ourselves continue to work under any scenario, even under a new caves decree scenario, and we're developing alternative plans to ensure we have a very resilient master plan and production plan.

So my first question is on copper. It's clear that the company is focused on extracting growth from projects in Brazil like Bacaba, Paulo Afonso, and Cristalino, among others. And these tend to be smaller deposits, especially compared to Hu'u in Indonesia. So I just wanted to see if you could provide some color on what drives that preference to develop several relatively smaller deposits as opposed to focusing on one larger project like Hu'u in Indonesia. And possibly even under a JV structure to mitigate the execution risk of developing a larger project, similar to what other miners have been doing. And then secondly, on Thompson, if you could discuss how the strategic review of that asset is going, and what would be the preferred avenue to explore with this asset? If whatever option is chosen with Thompson, could that be an indication of future plans with other assets in Canada?

Caio, those are excellent questions. First, regarding copper, I don't see it as an either-or situation between large and small projects. The focus should be on value and execution. The data suggests that the sector has struggled to deliver new projects effectively, particularly with significant cost overruns on large projects. Our strategy for unlocking copper growth and adding value relies on our long-standing regional presence, infrastructure, expertise, and capabilities. Risk is a major consideration as we assess our delivery capacity and potential returns. The projects in Pará carry less risk and are also less capital-intensive. While Hu'u is important, we are exploring various options, including a possible joint venture to balance risk and reward. It's too early to predict our direction there, but we have recently finished our long-term planning and are making progress. We're identifying ways to significantly enhance the economics, which we will elaborate on during Vale Day, so stay tuned! As for Thompson, we have begun a review that is now at an advanced stage, and we will provide updates in due course. It's been a challenging period, especially dealing with wildfires in the province, and I want to commend my general manager and the teams for their outstanding work in keeping everyone safe. We will continue to assess our portfolio to determine the best path forward.

This concludes today's question-and-answer session. Vale's conference is now concluded. We thank you for your participation and wish you a nice day.