Name and Location
Carajás S11D (S11D) iron-ore project, Pará, Brazil.

Client
Vale.

Project Description
S11D is named after its location – orebody S11, Block D. The mining potential of orebody S11 is ten-billion tons of iron-ore and that of Block D 2.78-billion tons of iron-ore.

It is the largest project in the history of Vale and the iron-ore industry.

The project has a nominal capacity of 90-million tonnes a year of iron-ore, with proven and probable reserves of 4.24-billion tonnes, an average ferrous content of 66.7%, low impurities and an estimated cash cost (mine, plant, railway and port after royalties) of $15.00/t.

S11D will increase Vale’s logistics capacity to 230-million tonnes a year and involves the construction of a rail spur, new railway sections with dual tracks, rail terminals and onshore and offshore investments.

In line with Vale’s long-term objective of sustainable value creation, it has developed technological solutions focused on environmental protection, with more efficient use of natural resources and the reduction of pollutants emission.

The truckless mining concept will result in replacing the off-road trucks with excavators and mobile crushers, which will extract the iron-ore and feed the conveyor belts that will transport it to the beneficiation plant.

Implementing the processing of iron-ore using its natural moisture (dry process) will further mitigate the environmental impacts. This technique eliminates the generation of tailings using the maximum amount of ore, since the finest feeds, which would be lost in the conventional process, are in the final product.

Once the S11D mine and plant are operating, water consumption will decrease by 93% and fuel consumption by 77%, allowing for a 50% reduction in greenhouse-gas emissions, compared with conventional methods. The dry process will also reduce electricity consumption and eliminate the need for a tailings dam, minimising the interference in native environments.

Net Present Value/Internal Rate of Return
Not stated.

Value
$14.4-billion.

Duration
S11D is expected to start up in the second half of 2016 and deliver full capacity production in 2018.

The start ups for CLN S11D will occur from the first half of 2015 to the second half of 2018.

Latest Developments
Vale has begun testing equipment at its $14.4-billion S11D mine, which started with the 9.5 km conveyor belt taking iron-ore from the mine's opencut pit to its processing facility.

The mine will be brought on stream, in line with world supply and demand, Vale head of iron-ore project implementation Jamil Sebe has said.

"The project will have 90-million tonnes of capacity when it opens, but Vale wants to administer the ramp-up curve in line with the market," he said.

Iron-ore, a key raw material for the making of steel, has fallen 30% in the past year and 75% in the past five years, as growth in China, the world's largest iron-ore importer, has slowed. Vale and its two main rivals, Australia's Rio Tinto and BHP Billiton, have ramped up output in an attempt to boost market share and drive out smaller, higher-cost producers.

The mine and processing plant are 80% complete and Vale hopes to finish the rest by the end of June, with production ramp-up beginning in the second half of the year, Sebe has said.

The conveyor belt, "the dorsal spine of S11D," has been built so that the processing plant can be built in a nonforested area. The belt will allow for ore transportation without the giant house-sized, diesel-fuelled trucks normally used in openpit mines. As a result, S11D will use about 70% less diesel and emit 50% less greenhouse gases than a conventional mine.

The mine will also use waterless separation of high-grade ores from waste rock known as gangue. This will lower water needs and eliminate the need for slurry ponds and tailings dams like the one that burst in November at Samarco Mineração, killing at least 17 people and polluting hundreds of kilometres of rivers and valleys.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Yes.

Contact Details for Project Information
Vale, Roberto Castello Branco, tel +55 21 3814 4540 or email Roberto.castello.branco@vale.com.