Vale S.A.

Q2 2026 pro forma EBITDA was $4.1 billion, up 19% year on year. Vale Base Metals EBITDA was $1.3 billion, up nearly 80% year on year, and iron ore EBITDA exceeded $3 billion. Free cash flow was $1.5 billion, supported by a $337 million positive cash impact from currency and oil hedging programs, while CapEx was $1.1 billion. On costs, iron ore C1 cash cost excluding third-party purchases was $24.1 per ton, up 9% year on year, and all-in cost was $61.6 per ton, up 18% year on year; considering the oil hedge, all-in costs were $60 per ton. Copper all-in costs were negative $300 per ton, improving by $1,700 per ton year on year, and nickel all-in costs were $10,300 per ton, down 17% year on year. Guidance was revised for 2026 iron ore C1 cost to $22.5-$23.5 per ton from $20-$21.5, and all-in cost to $58-$62 per ton from $52-$56; VBM copper all-in cost guidance was lowered to $0-$500 per ton from $1,000-$1,500, and nickel all-in cost guidance to $10,000-$11,500 from $12,000-$13,500. Net debt closed at $16.7 billion, down more than $1.1 billion quarter on quarter, and management said it expects it to keep converging toward the $15 billion reference level.

Gustavo Pimenta framed the quarter around operational excellence, disciplined capital allocation and growth in copper and iron ore. He highlighted record or near-record operating performance across commodities, said the company is confident in meeting 2026 production guidance, and emphasized that the business is being built to be resilient through the cycle. He also stressed shareholder returns, pointing to the $1.7 billion payout and the expanded buyback program, while saying innovation and technology are becoming tangible drivers of safety, productivity and sustainability.

Marcelo Bacci focused on the earnings quality and cost pressure. He said EBITDA rose to $4.1 billion despite external cost headwinds, with higher volumes, better commercial performance and stronger price realization helping offset freight, diesel and BRL pressure. He detailed the cost reset to $22.5-$23.5 per ton for iron ore C1 and $58-$62 per ton all-in, and said about 70% of the increase was explained by FX and diesel/oil effects. He also noted $1.5 billion of free cash flow, $1.1 billion of CapEx, $1.7 billion in approved distributions, $214 million of share repurchases year to date, and $16.7 billion of expanded net debt, which he expects to move closer to $15 billion.

Analysts focused heavily on freight, copper growth timing, and capital returns. Management said freight exposure has been reduced to below 10% through long-term time charters, mini COAs and freight derivatives, and that the Brent hedge program also helps reduce volatility. On Bacaba and the broader copper pipeline, Shaun Usmar said the earlier start reflects a new execution model and that the same disciplined approach could be applied across other projects, though each asset is different; he highlighted Salobo coarse particle flotation as the next announcement and said Alemão remains on track. On capital allocation, Bacci said second-half cash flow will be the key determinant of whether Vale leans more toward buybacks or dividends, with the decision to be taken later in Q3 or early Q4.