VALE: Brazil's Mines and Energy minister signals a new cave decree will be announced soon

Research evidence excerpt

VALE: Brazil's Mines and Energy minister signals a new cave decree will be announced soon

EQUITY RESEARCH QUICK TAKE

RBC Europe Limited

Marina Calero (Analyst)

Ben Davis (Analyst)

Laura Chan (Analyst)

July 1, 2026

Vale S.A.

Brazil's Mines and Energy minister signals a new cave decree will be announced soon

NYSE: VALE | USD 15.04 | Sector Perform | Price Target USD 15.00

Sentiment: Positive

Event

Brazil's Mines and Energy minister, Alexandre Silveira, signalled that a new cave decree will be published in the coming days.

Our view

Although still in early stages, this could bring important changes for VALE's long term mine plans including the possibility to unlock

1.6 billion tonnes of additional reserves and allow the group to produce higher grade material with lower strip ratios. In the past,

the company has guided for a $1-2/t potential cost savings plus premium upside. Using consensus expectations for 2028, this

could add $350-700m in EBITDA (3% of FY30 cons EBITDA).

Key details

• Brazil cave-protection regime classifies underground natural cavities into four relevant tiers with the top tier historically shielded

from irreversible impact. Understaffing and the lack of statutory deadlines to determine a cavity status means licencing can take

a long time. This has an impact on VALE's reserves and long term mine plans, particularly in the Northern System where most

of these formations occur.

• Yesterday, Brazil's Mines and Energy minister, Alexandre Silveira, announced (at CNN talks) that a decree to modernise protection

rules for underground natural cavities will be formally announced in the coming days. The decree updates the technical

classification criteria and imposes a 30-day deadline to respond to cavity assessments.

All values in USD unless otherwise noted.