Energy Efficiency at Vale

1. Energy Efficiency at Vale

2. ITEMS Goal Energy Management: Energy Efficiency Plant Assessments Energy Saving Needs in Brazilian Industry Conclusion

3. GOAL Present the form of action from Vale regarding energy efficiency, share experiences in plant assessment, as well as provide an insight into potential energy savings in industry

4. ENERGY MANAGEMENT ENERGY MANAGEMENT AT VALE Value Criation Optimization of Supply Costs Supply Secutiry Social-Environmental Responsibility Energy Efficiency * There is no hierarchy among the pillars

5. Reduction of unitary prices WHAT IS CONSIDERED ENERGY EFFICIENCY? • Energy– any sort, and not only electricity • EnergyEfficiency-Optimization of energy expenses • Energy Efficiency Projects-Projects or activities that lead to reductions in energy spending, which are crucial for the economic viability of investments • Change in energy transport alternative • Contractual Arrangements • Energy Efficiency • Energy quality • Productivity increase • Consumption Reduction • Optimization of industrial assets

6. PERFORMANCE ENERGY MANAGEMENT – ENERGY EFFICIENCY Unitary price Energy End-use • Contracts • Tariffs • Taxes • Transport • Energy service (heat, driving force) • Energy evaluation and selection (demand, availability, unitary price) • Supply choice (self production, market) • Corrections and improvements • Process changes • Energy recovery • Technology development Expenses

7. ENERGY MANAGEMENT – ENERGY EFFICIENCY Energy Unitary Price Projects Operations End- Use • Project Validation (FEL) • New Energy Contracts • Project Revisions and Adjustments • Plant Assessments • Contractual Renegotiations and Revisions • Improvements, Replacements and Corrections

8. ENERGY MANAGEMENT – ENERGY EFFICIENCY Energy Policy / Technical Standards for projects and equipments Standards Local and Global Energy Committees / Evaluation of results and sharing of best practices TGEE Monitoring of specific consumption and costs of operations Energy Management Plant Assessments, measurement and verification of results Operations Exploration, engineering and project implementation Current Projects Analysis of energy efficiency through the steps of FEL Capital Projects

9. INPUT PROCESS OUTPUT ENTRADA PROCESSO SA Í DA Energy Department Energy Management TCI Falhas de equipamentos Current Projects Emissão de SEPs (Specific Consumption) apontadas no OEE Fase 1 - Avalia ç ão do impacto • Technical and economic analysis Decides on performing broad or specific assessment econômico ou risco associado a cada um das preocupa ç ões • SES – System of Engineering Standards identificadas Estudos Kaizen TGEE – Technical Groups Gera ç ão de lista de estudos Problemas Potenciais priorizada pelo impacto/risco, dificuldade de execu ç ão e • APS – Action Plan Sustainability estimativa de investimento Estudos de Confiabilidade Plants Gerência Industrial • Innovates Vale • (Stock ideas) Gestão da Mudan ç a Provide the infrastructure and validate stages of assessment Fase 2 - Prioriza ç ão dos estudos Lean Six Sigma Department ROM/RNC - Estudos de a serem conduzidos Engenharia Dep. of Energy / Plants TCI Addresses the improvements / Incorporate the opportunities in the budget Plant Management (Strategy) Fase 3 – Endere ç amento dos Mapeamento da Cadeia Department of Energy / Alternatives Outras alternativas estudos e forma ç ão das equipes de Valor ( Assessment ) de trabalho PLANT ASSESSMENTS Performs contracting company service provider and makes management of contracted

10. PLANT ASSESSMENTS PIMS Energy Management System – Brucutu Plant Superior Performance Normal Performance Average Performance Bad Performance

11. PLANT ASSESSMENTS Motors System SYSTEMS Instrumentation and Control Ventilation and Exhaust Conveyor Belts Lighting Thermal Systems / Cogeneration Compressed Air Pumps

12. PLANT ASSESSMENTS SCOPE • Analysis and measurements of electrical and mechanical systems • Analysis of systems the utilities area • Analysis of processes that interact on the plants • Energy Management • Incorporation of technology • Creation of control parameters • Performance evaluation

13. PLANT ASSESSMENTS PLANT ASSESSMENTS SYSTEMS AND EQUIPMENTS ANALYZED SYSTEMS AND EQUIPMENTS ANALYZED • Couplings • Solar heating • Pumps • Boilers • Chillers • Cogeneration • Compressors • Variable speed drive • Capacitors • Conveyors • Effluent treatment plant • Exhaust • Filters • Energy management • Lighting • Thermal insulation • Hot water lines • Power transmission lines • Steam lines • Measurement of electric and magnetic fields • Mills • Motors • Industrial water system • Compressed air system • Ventilation system • Chilled water system • Transformers • Pneumatic conveyors • Heat exchangers • Turbines

14. ENERGY SAVING NEEDS IN INDUSTRY TYPICAL CASE % Savings per system Total Electric Energy Plant Assessment Pumping Motors Compressed air Lighting Variable speed drive

15. ENERGY SAVING NEEDS IN INDUSTRY TYPICAL ACTIONS • VENTILATION AND EXHAUST • Elimination of head losses • Reduction of power exhaust fans • Use of variable speed drive in motors • Use of thermal energy from exhaust gases • COMPRESSED AIR • Elimination of leakage and drainage of condensate • Reduced pressure losses • Classification and division of compressed air lines • Sizing of compressors in accordance with the appropriate application • Suitable arrangement of the house of compressors • Optimization of the air intake system in order to reduce the temperature • Automation of the operation of the compressor (load / idle)

16. ENERGY SAVING NEEDS IN INDUSTRY TYPICAL ACTIONS • MOTORS SYSTEMS • Sizing of motors • Use of energy efficient motors • Use of variable speed drive • Automation control systems to reduce no-load operation • PUMPING (Water, pulp ou vacuum) • Elimination of leaks • Use of variable speed drive for variable flow demands • Reduction of the Head by dividing reservoirs • Proper selection of the pump to the point of maximum efficiency • Elimination or reduction of pumping due to the route optimization • Reduction of friction in the pump shaft seals • Control of temperature and water flow sealing vacuum pumps

17. ENERGY SAVING NEEDS IN INDUSTRY TYPICAL ACTIONS • LIGHTING, AIR CONDITIONING AND HEATING WATER • Proper specification and distribution of equipment in environments • Integration of natural resources to the solution of thermal comfort and light • Promotion of adequate and regular maintenance of equipment • Automation and suitable actuation of system • Using solar energy to heat the water used for washing parts, restaurants and clothing room • ELECTRIC POWER SYSTEM • Evaluation of the load transformers • Evaluation of power factor and installation of capacitors and filters • Monitoring of power quality

18. ENERGY SAVING NEEDS IN INDUSTRY TYPICAL ACTIONS • TRANSPORT • Implementation of measurement system • Relocation of supply points • Automatic calibration of tires • Training of operations focused on efficient driving • Reduction of MDT (Middle Distance Transport) • Maintenance plans focused on energy efficiency • Auxiliary systems to operate the equipment (on-board computers connected to the dispatch system) • Maintenance of roads running • Replacement trucks for pumping pulp or conveyor belts, where applicable

19. ENERGY SAVING NEEDS IN INDUSTRY TYPICAL ACTIONS • THERMAL SYSTEMS • Preheating of the combustion gases • Improved insulation and reducing losses of hot gases • Evaluation of the steam distribution system • Analysis of the refrigeration system (cooling towers and others) • Use of additives to improve fuel combustion in motors • Evaluation of cogeneration systems • NEW TECHNOLOGIES • Trolley Trucks • Studying application of electrical energy for supply of locomotives to replace diesel • Truckless system for mines

20. CONCLUSION SWOT ANALYSIS – ENERGY EFFICIENCY STRENGTHS • Electricity from low carbon sources • Wide range of energy (electricity, gas, fuels, biomass and others) • Energy matrix is ​​converted to energy from renewable sources  

21. CONCLUSION SWOT ANALYSIS – ENERGY EFFICIENCY WEAKNESSES • Imposition of non-energy costs on the tariff • Lack of technical courses for industrial energy efficiency (technical and superior levels) • Lack of tax and credit incentives for thermal systems • Low investment in instrumentation and control • Lack of knowledge on energy laws

22. CONCLUSION SWOT ANALYSIS – ENERGY EFFICIENCY OPORTUNITTIES • PNE (National Energy Efficiency Plan) • ISO 50001 (Energy Management Standard) • Expansion of investment in instrumentation • Certification in Measurement ​​& Verification processes • Strong performance in thermal systems • Effective fiscal and credit incentives • Increase the importance of PROCEL and CONPET programs

23. CONCLUSION SWOT ANALYSIS – ENERGY EFFICIENCY THREATS • Importing solutions not suitable to the Brazilian reality • Dissociation of efficiency incentives for different energy sources

24. CONCLUSION EVOLUTIONARY VISION – ENERGY EFFICIENCY Cogeneration and Renewable Technology upgrades (retrofit) Review of the production process (automation) Impact of actions Adjustment of consumption profile (awareness) Contractual tariff adjustment Continuous monitoring (power + indicators) Management Maturity

25. Fábio A. Chaves DINE (Energy Department) General Management of Trading and Market Solutions +55 (13) 3362-9757 fabio.chaves@vale.com