Edgar Filing: Vale S.A.

Form 6-K

United States
Securities and Exchange Commission

Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the
Securities Exchange Act of 1934

For the month of
July 2009

Vale S.A.

Avenida Graça Aranha, No. 26
20030-900 Rio de Janeiro, RJ, Brazil
(Address of principal executive office)

(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)

(Check One) Form 20-F þ Form 40-F o

(Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1))

(Check One) Yes o No þ

(Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7))

(Check One) Yes o No þ

(Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)

(Check One) Yes o No þ

(If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b). 82- .)

TABLE OF CONTENTS


Press Release
Signatures

Contents


A- Quarterly Information			3
1- Balance Sheet			3
2- Statement of Income			4
3- Statement of Changes in Stockholders’ Equity			5
4- Statement of Cash Flows			6
5- Statement of Value Added			7
6- Notes to the Quarterly Information as of and for the period ended at June 30, 2009 and 2008			8
6.1- Operations			8
6.2- Summary of Significant Accounting Policies and Presentation of Interim Quarterly Information			8
6.3- Consolidation Principles and Practices			8
6.4- Acquisitions and Divestments			9
6.5- Cash and Cash Equivalents			9
6.6- Short-Term Investments			9
6.7- Related Parties			10
6.8- Inventories			12
6.9- Recoverable Taxes			13
6.10- Deferred Income Tax and Social Contribution			13
6.11- Investments			14
6.12- Intangible			14
6.13- Property, Plant and Equipment			15
6.14- Loans and Financing			15
6.15- Contingent Liabilities and commitments			17
6.16- Provision for Asset Retirement Obligations			18
6.17- Pension Plan			19
6.18- Long-term Incentive compensation plan			19
6.19- Paid-up Capital			20
6.20- Funds linked to future mandatory conversion into shares			20
6.21- Treasury Stock			21
6.22- Compensation of Stockholders			21
6.23- Financial Results			21
6.24- Financial Instruments — Derivatives			22
6.25- Selling, Administrative, Other Operating Expenses and Results from the Sale of Investments			33
6.26- Subsequent Events			34
7- Report of the Independent Accountants on Limited Review			35
8- Attachment I — Statement of Investments in Subsidiaries and Jointly-Controlled Companies			37


B- Additional Information			38
9- Cash generation (to review)			38
10- Management’s Discussion and Analysis of the Operational Performance in June 30, 2009 (to review)			39
10.1- Management’s Discussion and Analysis of the Operational Performance of Consolidated			39
10.1.1- Sales revenues			39
10.1.2- Cost of products and services			41
10.1.3- Selling and administrative expenses			41
10.1.4- Research and development			41
10.1.5- Other operating expenses			41
10.1.6- Net financial results			41
10.1.7- Income tax and social contribution			41
10.1.8- Results on sale of investments			41
10.2- Management’s Discussion and Analysis of the Operational Performance of Parent Company			42
10.2.1- Sales revenues			42
10.2.2- Cost of products and services			42
10.2.3- Gross margin			42
10.2.4- Equity Results			42
10.2.5- Selling and administrative expenses			42
10.2.6- Research and development			42
10.2.7- Other operating expenses/ income			42
10.2.8- Net financial results			42
10.2.9- Income tax and social contribution			42
11- Board of Directors, Fiscal Council, Advisory Committees and Executive Officers			43

A- Quarterly Information

(A free translation from the original in Portuguese, adopted in Brazil accounting practices)

1- Balance Sheet



Balance at		In thousands of reais


			Consolidated						Parent Company
	Notes		06/30/09			03/31/09			06/30/09			03/31/09
Assets
Current
Cash and cash equivalents		6.5		16,332,857			21,319,996			1,877,690			6,242,789
Short term investments		6.6		5,854,800			7,447,998			—			—
Accounts receivable from customers				5,560,328			6,778,538			7,396,139			6,842,343
Related parties		6.7		130,061			345,532			5,338,362			1,906,134
Inventories		6.8		8,204,776			9,136,088			2,769,348			2,905,394
Deferred income tax and social contribution				1,098,971			1,330,118			828,224			1,013,538
Taxes to recover or offset		6.9		1,688,351			3,948,197			871,365			2,669,792
Advanced to suppliers				825,473			1,033,310			745,015			863,488
Others				1,343,534			1,375,879			294,596			213,222

				41,039,151			52,715,656			20,120,739			22,656,700

Non-current
Related parties		6.7		51,051			25,300			329,385			4,689,193
Loans and financing				194,168			204,445			132,277			130,594
Prepaid expenses				478,344			551,381			—			—
Judicial deposits				1,940,809			1,858,809			1,316,458			1,280,783
Advances to energy suppliers				920,985			936,864			—			—
Deferred income tax and social contribution				924,211			1,179,111			707,593			831,638
Taxes to recover or offset		6.9		1,310,040			1,318,451			168,882			161,934
Derivatives at market value		6.24		481,069			153,136			268,562			3,456
Others				232,226			394,623			323,507			406,714

				6,532,903			6,622,120			3,246,664			7,504,312

Investments		6.11		2,399,799			2,854,889			84,791,579			94,480,089
Intangibles		6.12		10,199,050			10,590,977			7,933,305			8,248,869
Property, plant and equipment		6.13		111,097,194			115,170,636			40,924,525			39,571,240

				123,696,043			128,616,502			133,649,409			142,300,198

				171,268,097			187,954,278			157,016,812			172,461,210

Liabilities, and stockholders’ equity
Current
Payable to suppliers and contractors				3,893,496			4,141,927			2,243,596			2,066,018
Payroll and related charges				1,219,661			1,086,092			692,976			534,429
Current portion of long-term debt		6.14		1,397,378			1,748,005			611,928			857,170
Short-term debt		6.14		693,693			1,093,758			—			—
Related parties				4,276			171,204			6,231,077			7,680,034
Taxes, contributions and royalties				278,028			323,687			102,893			101,659
Provision for income tax				494,253			738,242			18,935			27,093
Pension Plan				226,258			240,360			98,401			88,679
Ferrovia Norte Sul subconcession				474,787			954,646			—			—
Derivatives at market value		6.24		117,322			6,246			—			—
Provision for asset retirement obligations		6.16		63,898			88,979			32,885			57,266
Proposed dividends and interest on stockholders’ equity		6.22		2,108,079			4,834,040			2,108,079			4,834,040
Others				1,042,083			2,410,683			544,164			1,407,390

				12,013,212			17,837,869			12,684,934			17,653,778

Non-current
Pension Plan				3,331,289			3,635,158			478,672			514,587
Long-term debt		6.14		38,303,736			42,526,571			12,180,184			11,791,801
Related parties				241,203			125,057			30,782,311			36,922,911
Provisions for contingencies		6.15		2,979,229			2,984,338			1,687,811			1,692,372
Deferred income tax and social contribution				8,612,651			8,750,623			1,115,161			294,481
Derivatives at market value		6.24		20,732			1,423,160			—			1,166,157
Provision for asset retirement obligations		6.16		1,945,649			1,978,751			853,854			837,731
Others				4,782,881			4,064,764			2,674,502			2,975,813

				60,217,370			65,488,422			49,772,495			56,195,853

Minority interest				4,478,132			6,016,408			—			—

Stockholders’ equity
Paid-up capital		6.19		47,434,193			47,434,193			47,434,193			47,434,193
Transaction cost for capital increase				(160,771	)		(160,771	)		(160,771	)		(160,771	)
Funds linked to future mandatory conversion into shares		6.20		3,063,833			3,063,833			3,063,833			3,063,833
Equity valuation adjustment				117,321			229,909			117,321			229,909
Cumulative translation Adjustments				(436,472	)		4,969,788			(436,472	)		4,969,788
Profit reserves				44,541,279			43,074,627			44,541,279			43,074,627

				94,559,383			98,611,579			94,559,383			98,611,579

				171,268,097			187,954,278			157,016,812			172,461,210

The additional information, notes and attachment I are an integral part of the quarterly information

(A free translation from the original in Portuguese, adopted in Brazil accounting practices)

2- Statement of Income



Period ended in		In thousands of reais


			Consolidated															Parent Company
												Accumulated						Accumulated
	Notes		2Q/09			1Q/09			2Q/08			06/30/09			06/30/08			06/30/09			06/30/08
Sales revenues
Ore and metals				8.796.797			10.831.690			15.876.401			19.628.487			27.823.552			13.290.980			12.214.163
Sales of aluminum-related products				1.011.319			1.070.907			1.300.993			2.082.226			2.472.850			240.224			152.604
Transport services				714.857			610.482			932.014			1.325.339			1.718.860			583.454			1.007.147
Sales of steel products				107.113			169.915			357.209			277.028			677.398			—			—
Other products and services				373.399			495.529			417.844			868.928			740.859			192.966			157.068

				11.003.485			13.178.523			18.884.461			24.182.008			33.433.519			14.307.624			13.530.982
Value Added taxes				(311.981	)		(262.683	)		(549.165	)		(574.664	)		(973.483	)		(356.214	)		(710.755	)

Net operating revenues				10.691.504			12.915.840			18.335.296			23.607.344			32.460.036			13.951.410			12.820.227


Cost of products and services
Ores and metals				(4.695.108	)		(4.901.169	)		(5.858.827	)		(9.596.277	)		(11.525.297	)		(5.256.633	)		(6.960.012	)
Aluminum-related products				(1.103.845	)		(1.051.383	)		(918.014	)		(2.155.228	)		(1.723.846	)		(250.084	)		(174.112	)
Transport services				(493.482	)		(496.554	)		(560.210	)		(990.036	)		(1.052.540	)		(396.559	)		(450.969	)
Steel products				(104.189	)		(154.046	)		(291.826	)		(258.235	)		(589.594	)		—			—
Other products and services				(294.784	)		(263.615	)		(262.560	)		(558.399	)		(511.683	)		(120.301	)		(63.724	)

				(6.691.408	)		(6.866.767	)		(7.891.437	)		(13.558.175	)		(15.402.960	)		(6.023.577	)		(7.648.817	)


Gross profit				4.000.096			6.049.073			10.443.859			10.049.169			17.057.076			7.927.833			5.171.410

Gross margin				37,4	%		46,8	%		57,0	%		42,6	%		52,5	%		56,8	%		40,3	%

Operating expenses
Selling and Administrative		6.25		(513.643	)		(574.490	)		(631.544	)		(1.088.133	)		(1.231.393	)		(556.704	)		(616.235	)
Research and development				(561.930	)		(441.229	)		(462.937	)		(1.003.159	)		(793.943	)		(627.020	)		(448.331	)
Other operating expenses		6.25		(734.955	)		(884.515	)		(149.365	)		(1.619.470	)		(506.828	)		(576.270	)		110.757

				(1.810.528	)		(1.900.234	)		(1.243.846	)		(3.710.762	)		(2.532.164	)		(1.759.994	)		(953.809	)

Operating profit before financial results, results of equity investments and impairment				2.189.568			4.148.839			9.200.013			6.338.407			14.524.912			6.167.839			4.217.601

Results of equity investments		6.11		50.021			13.450			69.448			63.471			114.489			(4.168.176	)		6.434.696

Amortization of goodwill		6.12		—			—			(336.215	)		—			(725.365	)		—			(725.365	)

				50.021			13.450			(266.767	)		63.471			(610.876	)		(4.168.176	)		5.709.331

Financial results, net		6.23		2.574.281			(361.256	)		1.765.976			2.213.025			532.786			6.698.522			2.507.190

Gain on sale of investment		6.25		295.722			—			—			295.722			138.879			295.722			—


Income before income tax and social contribution				5.109.592			3.801.033			10.699.222			8.910.625			14.585.701			8.993.907			12.434.122

Income tax and social contribution		6.10		(3.533.597	)		(757.982	)		(2.571.182	)		(4.291.579	)		(3.241.065	)		(4.376.352	)		(1.347.716	)

Current				(3.286.788	)		(1.157.050	)		(2.042.873	)		(4.443.838	)		(3.250.601	)		(4.090.663	)		(1.176.836	)
Deferred charges				(246.809	)		399.068			(528.309	)		152.259			9.536			(285.689	)		(170.880	)
Minority interest				(109.343	)		107.852			(222.577	)		(1.491	)		(258.230	)		—			—

Net income for the period				1.466.652			3.150.903			7.905.463			4.617.555			11.086.406			4.617.555			11.086.406

Number of shares outstanding at the end of the period (in thousands) (a)				5.212.691			5.212.680			4.832.391			5.212.691			4.832.391			5.212.691			4.832.391

Net earnings per share outstanding at the end of the period (R$)				0,28			0,60			1,63			0,89			2,29			0,89			2,29


(a)		Includes 30,341,144 and 56,582,040 preferred and common shares, respectively, linked to issue of convertible notes, (see note 6.19).

The additional information, notes and attachment I are an integral part of the quarterly information

(A free translation from the original in Portuguese, adopted in Brazil accounting practices)

3- Statement of Changes in Stockholders’ Equity



Periods ended		In thousands of reais


								Funds linked to
								future mandatory		Equity			Cumulative			Profit reserves
					Transaction			conversion into		valuation			translation			Expansion/						Unrealized					Fiscal		Retained
	Notes		Paid-up capital		cost			shares		adjustment			Adjustments			Investments			Treasury stock			income			Legal		incentives		earnings			Total
At December 31, 2007				28,000,000		—			3,063,833		—			—			24,285,431			(790,224	)		60,883			2,319,695		89,844		—			57,029,462

Net income for the year				—		—			—		—			—			—			—			—			—		—		21,279,629			21,279,629
Treasury Stock				—		—			—		—			—			—			(1,658,266	)		—			—		—		—			(1,658,266	)
Cumulative translation Adjustments				—		—			—		—			5,982,074			—			—			—			—		—		—			5,982,074
Unrealized gain on available — for — sale securities				—		—			—		7,945			—			—			—			—			—		—		—			7,945
Capital increase		6.19		19,434,193		(160,771	)		—		—			—			—			—			—			—		—		—			19,273,422
Appropriation of results																																	—
Interim dividends				—		—			—		—			—			(580,124	)		—			—			—		—		(225,462	)		(805,586	)
Remuneration paid to Stockholder’s				—		—			—		—			—			—			—			—			—		—		(4,834,040	)		(4,834,040	)
Appropriation to profit reserves				—		—			—		—			—			15,178,507			—			(22,362	)		1,063,982		—		(16,220,127	)		—

At December 31, 2008				47,434,193		(160,771	)		3,063,833		7,945			5,982,074			38,883,814			(2,448,490	)		38,521			3,383,677		89,844		—			96,274,640

Net income for the period				—		—			—		—			—			—			—			—			—		—		3,150,903			3,150,903
Treasury Stock				—		—			—		—			—			—			(23,642	)		—			—		—		—			(23,642	)
Cumulative translation Adjustments				—		—			—		—			(1,012,286	)		—			—			—			—		—		—			(1,012,286	)
Unrealized results of market valuation				—		—			—		221,964			—			—			—			—			—		—		—			221,964

At March 31, 2009				47,434,193		(160,771	)		3,063,833		229,909			4,969,788			38,883,814			(2,472,132	)		38,521			3,383,677		89,844		3,150,903			98,611,579

Net income for the period				—		—			—		—			—			—			—			—			—		—		1,466,652			1,466,652
Cumulative translation Adjustments				—		—			—		—			(5,406,260	)		—			—			—			—		—		—			(5,406,260	)
Unrealized results of market valuation				—		—			—		(112,588	)		—			—			—			—			—		—		—			(112,588	)

At June 30, 2009				47,434,193		(160,771	)		3,063,833		117,321			(436,472	)		38,883,814			(2,472,132	)		38,521			3,383,677		89,844		4,617,555			94,559,383

The additional information, notes and attachment I are an integral part of the quarterly information

(A free translation from the original in Portuguese, adopted in Brazil accounting practices)

4- Statement of Cash Flows



Period ended		In thousands of reais


	Consolidated															Parent Company
	Accumulated															Accumulated
	2Q/09			1Q/09			2Q/08			06/30/09			06/30/08			06/30/09			06/30/08
Cash flows from operating activities:
Net income for the period		1,466,652			3,150,903			7,905,463			4,617,555			11,086,406			4,617,555			11,086,406
Adjustments to reconcile net income for the period with cash provided by operating activities:
Results of equity investments		(50,021	)		(13,450	)		266,767			(63,471	)		610,876			4,168,176			(5,709,331	)
Sale of assets		(295,722	)		—			—			(295,722	)		(138,879	)		(295,722	)		—
Depreciation, amortization and depletion		1,253,422			1,296,765			1,250,502			2,550,187			2,563,430			978,519			862,227
Deferred income tax and social contribution		246,809			(399,068	)		528,309			(152,259	)		(9,536	)		285,689			170,880
Indexation and exchange gains, net		(4,007,311	)		361,416			(2,777,853	)		(3,645,895	)		(3,641,208	)		(6,202,776	)		(3,222,752	)
Minority interest		109,343			(107,852	)		222,577			1,491			258,230			—			—
Disposal of property, plant and equipment		140,663			162,431			121,400			303,094			249,220			111,793			171,904
Net unrealized losses (gains) on derivatives		(1,814,648	)		(43,775	)		(1,109,435	)		(1,858,423	)		(571,747	)		(1,578,872	)		(943,069	)
Dividends/interest on stockholders’ equity received		21,318			—			22,866			21,318			22,866			293,817			505,970
Others		(145,090	)		(43,481	)		(55,418	)		(188,571	)		31,632			(141,457	)		(186,857	)

		(3,074,585	)		4,363,889			6,375,178			1,289,304			10,461,290			2,236,722			2,735,378


Decrease (increase) in assets:
Accounts receivable		1,243,549			1,007,191			(1,335,306	)		2,250,740			(957,988	)		2,430,933			(568,222	)
Inventories		1,230,727			504,458			(253,545	)		1,735,185			(105,475	)		171,757			(166,087	)
Advances to energy suppliers		—			15,879			(29,157	)		15,879			31,758			—			—
Taxes to Recover		2,577,021			(164,804	)		13,162			2,412,217			(212,460	)		2,478,039			(100,044	)
Others		(402,417	)		(258,371	)		223,679			(660,788	)		60,021			286,598			21,839

		4,648,880			1,104,353			(1,381,167	)		5,753,233			(1,184,144	)		5,367,327			(812,514	)


Increase (decrease) in liabilities:
Suppliers and contractors		(455,329	)		(728,025	)		171,349			(1,183,354	)		158,091			98,207			36,639
Payroll and related charges		82,107			(341,404	)		268,704			(259,297	)		(179,893	)		(187,662	)		(115,021	)
Taxes and contributions		(422,690	)		312,207			1,556,723			(110,483	)		163,078			(10,591	)		735,420
Others		805,549			(98,016	)		(735,667	)		707,533			(785,706	)		880,550			(392,369	)

		9,637			(855,238	)		1,261,109			(845,601	)		(644,430	)		780,504			264,669


Net cash provided by operating activities		1,583,932			4,613,004			6,255,120			6,196,936			8,632,716			8,384,553			2,187,533


Cash flows from investing activities:
Short term investments		1,593,198			(2,054,202	)		—			(461,004	)		—			—			—
Loans and advances receivable		(591,957	)		(65,384	)		(26,640	)		(657,341	)		9,846			(38,733	)		(78,182	)
Guarantees and deposits		(59,388	)		(51,728	)		(17,282	)		(111,116	)		(78,497	)		(68,141	)		(54,602	)
Additions to investments		(622,555	)		(166,077	)		(13,744	)		(788,632	)		(32,324	)		(4,186,179	)		(199,292	)
Additions to property, plant and equipment		(4,165,787	)		(3,682,753	)		(3,619,924	)		(7,848,540	)		(6,727,544	)		(3,558,728	)		(2,534,429	)
Proceeds from disposal of property, plant and equipment/investments		602,683			—			—			602,683			370,501			602,683			—
Net cash used in acquisitions and capital increase in subsidiaries, net of cash of acquired		(660,420	)		(2,133,721	)		—			(2,794,141	)		—			—			—


Net cash used in investing activities		(3,904,226	)		(8,153,865	)		(3,677,590	)		(12,058,091	)		(6,458,018	)		(7,249,098	)		(2,866,505	)


Cash flows from (used in) financing activities:
Short-term debt additions		695,738			356,101			705,367			1,051,839			2,334,181			87,640			3,076,974
Short-term debt repayments		(1,102,714	)		(401,719	)		(869,076	)		(1,504,433	)		(2,169,646	)		(4,058,003	)		(1,784,149	)
Long-term debt		802,672			540,936			507,102			1,343,608			2,969,986			1,076,773			2,831,609
Repayments:
Related parties		—			—			—			—			—			(80,993	)		(40,293	)
Financial institutions		(184,364	)		(241,267	)		(1,068,375	)		(425,631	)		(1,282,350	)		(237,745	)		(1,175,100	)
Interest on stockholders’ equity paid to stockholders and dividends		(2,734,500	)		—			(2,248,245	)		(2,734,500	)		(2,248,245	)		(2,734,500	)		(2,109,750	)
Treasury stock		—			(23,642	)		—			(23,642	)		6			(23,642	)		6


Net cash provided by (used in) financing activities		(2,523,168	)		230,409			(2,973,227	)		(2,292,759	)		(396,068	)		(5,970,470	)		799,297


Increase (decrease) in cash and cash equivalents		(4,843,462	)		(3,310,452	)		(395,697	)		(8,153,914	)		1,778,630			(4,835,015	)		120,325
Cash and cash equivalents, beginning of the period		21,319,996			24,639,245			4,274,642			24,639,245			2,127,909			6,712,705			120,188
Effects of exchange rates in cash and equivalents		(143,677	)		(8,797	)		(132,560	)		(152,474	)		(160,154	)		—			—

Cash and cash equivalents, end of the period		16,332,857			21,319,996			3,746,385			16,332,857			3,746,385			1,877,690			240,513

Cash paid during the period for:
Short-term interest		(23,554	)		(35,794	)		(25,556	)		(59,348	)		(59,125	)		(107,708	)		(58,950	)
Long-term interest		(653,897	)		(647,133	)		(584,351	)		(1,301,030	)		(1,078,595	)		(1,393,223	)		(1,477,788	)
Income tax and social contribution		(282,770	)		(335,254	)		(351,924	)		(618,024	)		(3,281,974	)		—			(564,914	)
Non-cash transactions:
Additions to property, plant and equipment — interest capitalization		(57,176	)		(134,359	)		(28,633	)		(191,535	)		(40,165	)		(10,617	)		(21,960	)
Transfer of advance for future capital increase to investments		—			—			—			—			—			(291,950	)		(112,173	)

(A free translation from the original in Portuguese, adopted in Brazil accounting practices)

5- Statement of Value Added



Period ended		In thousands of reais


	Consolidated									Parent Company
	06/30/09			06/30/08			06/30/09			06/30/08
Generation of Value Added
Sales revenue
Revenue from products and services		24,192,471			33,462,071			14,313,897			13,551,466
Revenue for the construction of own assets		5,052,819			6,171,601			3,558,728			2,534,429
Allowance for doubtful accounts		(10,463	)		(28,552	)		(6,273	)		(20,484	)
Less: Acquisition of products		(631,470	)		(1,396,877	)		(93,899	)		(1,024,097	)
Outsourced services		(2,970,794	)		(2,535,102	)		(1,324,167	)		(1,840,773	)
Materials		(8,128,686	)		(9,421,088	)		(5,374,051	)		(4,663,996	)
Fuel oil and gas		(1,235,519	)		(1,728,308	)		(472,911	)		(701,458	)
Energy		(804,126	)		(948,319	)		(289,220	)		(269,379	)
Other costs		(3,632,329	)		(2,521,753	)		(1,516,163	)		(1,212,742	)

Gross Value Added		11,831,903			21,053,673			8,795,941			6,352,966
Depreciation, amortization and depletion		(2,550,187	)		(2,563,430	)		(978,519	)		(862,227	)

Net Value Added		9,281,716			18,490,243			7,817,422			5,490,739
Received from third parties
Financial revenue		539,403			167,916			415,647			144,493
Results of equity investment		63,471			(610,876	)		(4,168,176	)		5,709,331

Total Value Added to be distributed		9,884,590			18,047,283			4,064,893			11,344,563

Personnel		2,548,346			2,387,898			1,112,104			871,894
Taxes, rates and contribution		4,390,820			4,679,619			4,618,109			1,748,960
Remuneration on third partiy capital		1,453,195			1,714,318			1,567,678			1,727,175
Indexation and exchange rate		(3,126,817	)		(2,079,188	)		(7,850,553	)		(4,089,872	)
Stockholders’ remuneration Stockholders		4,617,555			11,086,406			4,617,555			11,086,406
Minority interest		1,491			258,230			—			—

Distribution of Value Added		9,884,590			18,047,283			4,064,893			11,344,563

(A free translation from the original in Portuguese, adopted in Brazil accounting practices)

6- Notes to the Quarterly Information as of and for the period ended at June 30, 2009 and 2008

(In thousands of Brazilian reais, except as otherwise stated)

6.1- Operations

Vale S.A. formerly denominated Companhia Vale do Rio Doce, (Vale, the Company) is a publicly company whose predominant activities are mining, processing and sales of iron ore, pellets, copper concentrate and potash, as well as logistic services, power generation and mineral research and development. In addition, through its direct and indirect subsidiaries and jointly controlled companies, also operates in nickel, copper, precious metals, cobalt (by product), manganese and ferroalloys, kaolin, coal, steel, and aluminum-related products.

6.2- Summary of Significant Accounting Policies and Presentation of Interim Quarterly Information

The unaudited Interim Financial Information have been prepared in conformity with the accounting practices adopted in Brazil, based on Corporate law, (as amended by Law 11.638), Provisional Act 449, as well as the rules and guidelines issued by Brazilian Securities Commission — CVM, which special review were done by our auditors according the rules stablished by Independent Auditors institute of Brazil — IBRACON, together with Accounting Federal Concil — CFC. These informations followed the principles, methods and criteria that are uniform to those adopted in the prior year ended December, 31 2008, except with regard to the goodwill amortization, and consequently, should be read in conjunction with our audited consolidated financial statements as of and for the year ended December 31,2008.

According to CPC 13 — First-time adoption of Law 11.638 and Provisional Act 449/08, the goodwill on expected future results resulting from the acquisition of other company is no longer amortized as from 2009 and therefore is no longer presented in the line item “goodwill amortization” in the statement of income. In 2Q08 the amount recorded was R$ 336.215 (R$725.365 in the semester ended in June 30,2008)

In preparing the interim financial statements it is, required to use estimates to account for certain assets, liabilities, and transactions. Therefore the Company’s interim financial statements include various estimates concerning the selection of useful lives of property, plant and equipment, provisions for losses on assets, contingent liabilities, operational provisions and other similar evaluations. Actual results may vary from the estimates.

The rights and obligations in foreign currencies are stated according to prevailing exchange rates at the time of the financial statements, and US$ 1.00 is equivalent to R$1,9516 on June 30, 2009 (US$ 1.00 is equivalent to R$1,5919 on June 30, 2008), for monetary items. For non-monetary items stated at cost, applies the exchange rate at the date of the transaction or the average monthly exchange rate, and for non-monetary items stated at fair value applies the exchange rate at the date of determining the value. Rights and obligations in the domestic currency, when applicable, are adjusted for inflation according to contractual terms;

The effects of adjustments required by new accounting practices, recognized and presented entirely in one column in the 2008 annual financial statements, were reclassified in the quarters of 2008 with objective to be comparable with respective information of 2009.

The effects of adjustments in the comparative periods resulting from the adoption of CPC 02 - Effects of changes in exchanges rates and currency translation of financial statements was an increase in 2Q08 of R$ 3.332.477 (R$ 4.260.525 in the semester) in parent company reflected in investments in subsidiaries and in the consolidated an increase in 2Q08 of R$ 676.644 (R$ 781.715 in the semester), reflected in investments in subsidiaries and an increase of R$ 2.655.833 in the 2Q08 (R$ 3.478.810), reflected in financial income.

As supplemental information to the interim financial statements, the Company presents the calculation of income before financial income, results of equity investments, income tax and social contribution, depreciation, amortization and depletion — LAJIDA (EBITDA).Although it, does not provide a measure of operating cash flow according to accounting practices adopted in Brazil, it is often used by financial analysts in evaluating business, and the Company’s Management uses this indicator to measure operating performance.

The Company has performed and evaluation of subsequent events through July 29, 2009 which is date the financial statements.

6.3- Consolidation Principles and Practices

The consolidated interim financial statements reflect the balances of assets, liabilities and shareholders equity as of June 30, 2009 and March 31, 2009 and operations of quarterly periods ended on June 30, 2009, March 31, 2009 and June 30, 2008 of the Parent Company, its direct and indirect subsidiaries and its jointly-controlled companies. Overseas operations are translated into the reporting currency for the Brazilian financial statements in Brazil to record equity investments, full or proportionate consolidation of financial statements.

Vale’s participation in hydroelectric projects is made through consortium agreements under which the Company’s share in assets and liabilities of the business is proportional to its share in the generated power. The Company does not have joint responsibility for any liability. Since there is no legal entity related to the project, there are no separate financial statements, income tax return, net income or stockholder’s equity. Brazilian legislation clearly provides that there is no separate entity under a consortium agreement. Accordingly, the Company recognizes its proportional share of costs and its undivided share in assets related to hydroelectric projects.

6.4- Acquisitions and Divestments

In April 2009, the Company sold its remaining interest in Usiminas for R$594,775 abtaining a gain of R$295,722.

In March 2009, the Company acquired from Cement Argos the entites Diamond Coal Ltd., which owns thermal coal assets in Colombia by R$694,560.

In March 2009, 50% of Teal Minerals Incorporated, Joint Venture with African Rainbow Minerals Limited, was acquired by R$138,792.

In February 2009, the acquisition of Green Mineral Resources, company owner of mineral rights of Project Regina (Canada) and Project Colorado (Argentina) from Rio Tinto, was concluded by the amount of R$1,994,695.

For the three acquisitions above, the difference between the acquisition consideration and the equity was, preliminary, fully allocated to PP&E based on the difference between the market values of assets and the is net book values. All these preliminary allocations were based on internal management research and are subject to revision. For Diamond Coal this allocation was R$474,544, for Teal Minerals was R$254,095 and for Green Minerals was R$1,744,589.

In January 2009, the Company entered into a purchase and sale agreement with Rio Tinto PLC to acquire iron ore assets (Brazil) by US$750.000 thousands. This acquisition was not concluded and is subject to final approval by the Administrative Council for Economic Defense — CADE.

In February 2008, the Company sold its interests of 4.83% in common shares of Jubilee Mines N.L., held by Vale Inco, by R$231,788 obtaining a gain of R$138,879.

6.5- Cash and Cash Equivalents


	Consolidated				Parent Company
	06/30/09		03/31/09		06/30/09		03/31/09
Cash and bank accounts		1,056,746		1,434,896		51,781		67,195
Short-term investment		15,276,111		19,885,100		1,825,909		6,175,594

		16,332,857		21,319,996		1,877,690		6,242,789

All the above mentioned short term investments are done through the use of low risk fixed income securities, particlly denominated in Brazilian Reais indexed to the CDI rate, and others denominated in US dollars comprised of time deposits.

6.6- Short-Term Investments


	Consolidated
	06/30/09		03/31/09

Time deposit (*)		5,854,800		7,447,998


(*)		Represent application with due date over 90 days.

6.7- Related Parties

In the Company’s normal course of business, it enters into transactions with related parties regarding the sale and purchase of products and services, including the leasing of pelletization plants, loans under normal market conditions, marketing of raw material and rail transport services.

The balances of related parties operations, and its effects in the quarterly information’s, can be identified as follows:


	Consolidated
	Assets
	06/30/09				03/31/09
	Customers		Related party		Customers		Related party

Baovale Mineração S.A.		14,653		—		549		1,580
Companhia Coreano-Brasileira de Pelotização — KOBRASCO		537		214		763		—
Companhia Hispano-Brasileira de Pelotização — HISPANOBRÁS		479		130		2,962		24,131
Companhia Ítalo-Brasileira de Pelotização — ITABRASCO		1,052		—		1,069		5
Companhia Nipo-Brasileira de Pelotização — NIBRASCO		—		1,130		10,725		—
Korea Nickel Corporation		22,500		—		—		—
Log-in S.A.		—		—		12,523		9,537
Mineração Rio do Norte S.A.		192		18		251		27,854
MRS Logistica S.A.		585		41,262		640		90,789
Potassio Rio Colorado AS		—		39,655		—		—
Samarco Mineração S.A		1,931		25,535		8,877		190,626
Teal Minerals Incorporated		—		40,361		—		—
Usinas Siderúrgicas de Minas Gerais S.A. — USIMINAS (*)		—		—		23,639		—
Others		53,894		32,807		33,663		26,310

Total		95,823		181,112		95,661		370,832


Registered as:
Current		95,823		130,061		95,661		345,532
Non-current		—		51,051		—		25,300

		95,823		181,112		95,661		370,832


	Consolidated
	Liabilities
	06/30/09				03/31/09
	Suppliers		Related party		Suppliers		Related party

Baovale Mineração S.A.		27,331		—		24,488		—
Companhia Coreano-Brasileira de Pelotização — KOBRASCO		40,094		3,060		43,886		2,782
Companhia Hispano-Brasileira de Pelotização — HISPANOBRÁS		—		2,268		—		39,222
Companhia Ítalo-Brasileira de Pelotização — ITABRASCO		10,588		—		10,125		15,608
Companhia Nipo-Brasileira de Pelotização — NIBRASCO		34,646		14,381		27,762		30,771
Log-in S.A.		—		—		9,398		12
Minas da Serra Geral S.A.		2,689		15,836		—		15,630
Mineração Rio do Norte S.A.		20,453		—		29,305		—
MRS Logistica S.A.		129,384		206,666		103,916		124,638
Usinas Siderúrgicas de Minas Gerais S.A. — USIMINAS (*)		—		—		8		14,657
Others		25,836		3,268		30,508		52,941

Total		291,021		245,479		279,396		296,261


Registered as:
Current		291,021		4,276		279,396		171,204
Non-current		—		241,203		—		125,057

		291,021		245,479		279,396		296,261


(*)		Investment disposed in april 2009.


	Parent Company
	Assets
	06/30/09				03/31/09
	Customers		Related party		Customers		Related party


ALUNORTE — Alumina do Norte do Brasil S.A.		46,493		87,031		41,985		101,046
Baovale Mineração S.A.		29,305		3,160		1,098		3,160
Companhia Coreano-Brasileira de Pelotização — KOBRASCO		1,069		427		386		132,898
Companhia Nipo-Brasileira de Pelotização — NIBRASCO		—		2,307		98,534		231
Companhia Portuária Baía de Sepetiba — CPBS		830		86,913		48,355		55,862
CVRD OVERSEAS Ltd.		132,026		195		1,523		—
Ferrovia Centro — Atlântica S.A.		61,142		56,533		1,890		753,354
Minerações Brasileiras Reunidas S.A. — MBR		—		694,606		1,016		51,913
MRS Logistica S.A.		877		35,331		21,869		—
Salobo Metais S.A.		2,629		233,555		1,722		233,555
Samarco Mineração S.A.		3,861		278,767		17,754		381,251
Vale International S.A.		6,646,430		3,712,587		6,163,755		4,397,189
Vale Manganês S.A.		9,013		179,309		5,584		179,309
Others		138,339		297,026		127,008		305,559

Total		7,072,014		5,667,747		6,532,479		6,595,327


Registered as:
Current		7,072,014		5,338,362		6,532,479		1,906,134
Non-current		—		329,385		—		4,689,193

		7,072,014		5,667,747		6,532,479		6,595,327


	Parent Company
	Liabilities
	06/30/09				03/31/09
	Suppliers		Related party		Suppliers		Related party

ALUNORTE — Alumina do Norte do Brasil S.A.		14,777		—		—		—
Baovale Mineração S.A.		54,663		—		48,977		—
Companhia Coreano-Brasileira de Pelotização — KOBRASCO		80,188		135		52,219		65,852
Companhia Nipo-Brasileira de Pelotização — NIBRASCO		70,707		605,397		5		750,385
Companhia Portuária Baía de Sepetiba — CPBS		96,726		—		11,244		39,564
CVRD OVERSEAS Ltd.		4		2,292		87,771		1,735
Ferrovia Centro — Atlântica S.A.		9,968		—		55,097		—
Minerações Brasileiras Reunidas S.A. — MBR		56,132		—		156,632		—
MRS Logistica S.A.		302,505		20,412		56,658		31,424
Salobo Metais S.A.		—		—		2,000		—
Samarco Mineração S.A.		32,132		36,337,758		44,525		43,399,189
Vale International S.A.		—		11		—		23,450
Vale Manganês S.A.		—		—		—		—
Others		89,559		47,383		51,487		291,346

Total		807,361		37,013,388		566,615		44,602,945


Registered as:
Current		807,361		6,231,077		566,615		7,680,034
Non-current		—		30,782,311		—		36,922,911

		807,361		37,013,388		566,615		44,602,945


	Consolidated
	Income						Expense / Cost						Financial
	2Q/09		1Q/09		2Q/08		2Q/09		1Q/09		2Q/08		2Q/09			1Q/09			2Q/08
Baovale Mineração S.A.		3,054		—		—		4,584		4,584		4,123		—			—			—
Companhia Coreano-Brasileira de Pelotização — KOBRASCO		—		—		39,874		—		35,534		112,248		(263	)		(375	)		(1,683	)
Companhia Hispano-Brasileira de Pelotização — HISPANOBRÁS		4,146		4,626		101,421		492		1,215		165,135		40			(1,897	)		3,488
Companhia Ítalo-Brasileira de Pelotização — ITABRASCO		—		—		37,950		97		6,876		56,104		(110	)		(556	)		(676	)
Companhia Nipo-Brasileira de Pelotização — NIBRASCO		64		—		24,011		6,819		18,520		140,551		2,588			(3,040	)		(611	)
Mineração Rio do Norte S.A.		—		—		—		65,018		71,454		54,296		(105	)		144			(63	)
MRS Logistica S.A.		2,988		2,288		4,660		140,479		97,273		174,900		—			—			—
Samarco Mineração S.A.		14,049		15,518		68,161		—		—		—		(61	)		(4	)		(20	)
Log-in S.A.		13,691		—		—		—		—		—		382			—			169
Usinas Siderúrgicas de Minas Gerais S.A. — USIMINAS		—		108,982		272,543		—		—		—		—			—			—
Others		—		7,915		7,450		2,024		24,842		3,360		20,471			(21,970	)		(24,387	)

		37,992		139,329		556,070		219,513		260,298		710,717		22,942			(27,698	)		(23,783	)


	Consolidated
	Income				Expense / Cost				Financial
	06/30/09		06/30/08		06/30/09		06/30/08		06/30/09			06/30/08
Baovale Mineração S.A.		3,054		—		9,168		8,247		—			—
Companhia Coreano-Brasileira de Pelotização — KOBRASCO		—		82,408		35,534		155,272		(263	)		(375	)
Companhia Hispano-Brasileira de Pelotização — HISPANOBRÁS		8,772		152,541		1,707		237,958		40			(1,897	)
Companhia Ítalo-Brasileira de Pelotização — ITABRASCO		—		84,603		6,973		123,174		(110	)		(556	)
Companhia Nipo-Brasileira de Pelotização — NIBRASCO		64		91,790		25,339		245,392		2,588			(3,040	)
Mineração Rio do Norte S.A.		—		—		136,472		113,438		(105	)		144
MRS Logistica S.A.		5,276		6,808		237,752		316,373		—			—
Samarco Mineração S.A.		29,567		106,862		—		—		(61	)		(4	)
Log-in S.A.		13,691		11,992		—		197		382			—
Usinas Siderúrgicas de Minas Gerais S.A. — USIMINAS		108,982		497,458		—		—		—			—
Others		7,915		7,601		26,866		30,232		20,471			(21,970	)

		177,321		1,042,063		479,811 1		,230,283		22,942			(27,698	)


	Parent Company
	Income				Expense / Cost				Financial
	06/30/09		06/30/08		06/30/09		06/30/09		06/30/08			06/30/09

ALBRAS — Alumínio Brasileiro S.A.		52,132		4,952		—		—		—			(170	)
ALUNORTE — Alumina do Norte do Brasil S.A.		180,405		116,656		49,739		24,547		(14,462	)		(9,190	)
Baovale Mineração S.A.		6,108		—		18,335		16,494		—			—
Companhia Coreano-Brasileira de Pelotização — KOBRASCO		35		169,270		66,861		204,688		(1,276	)		(2,468	)
Companhia Hispano-Brasileira de Pelotização — HISPANOBRÁS		17,542		329,199		3,477		361,506		(3,372	)		3,416
Companhia Ítalo-Brasileira de Pelotização — ITABRASCO		—		176,851		14,201		132,136		(1,353	)		(1,233	)
Companhia Nipo-Brasileira de Pelotização — NIBRASCO		63,325		186,240		56,773		366,527		57,212			(1,228	)
Companhia Portuária Baia de Sepetiba — CPBS		—		—		120,758		172,822		(4,529	)		—
CVRD Overseas Ltd.		1,404,159		1,334,075		11,236		11,584		87,439			32,053
Ferro Gusa Carajas		—		19,984		—		—		—			—
Ferrovia Centro — Atlântica S.A.		105,278		91,480		4,865		41,699		4,844			191
MRS Logistica S.A.		7,405		23,091		406,413		540,809		—			—
Samarco Mineração S.A.		59,134		213,695		—		—		(130	)		(45	)
Usinas Siderúrgicas de Minas Gerais S.A. — USIMINAS		89,381		—		—		—		—			436,413
Vale Energia S.A.		—		259		62,618		30,707		—			—
Vale International S.A.		16,810,692		11,149,103		756,444		766,064		5,483,148			2,670,703
Vale Manganês S.A.		24,075		38,063		1,432		7,512		—			—
Others		28,964		60,019		39,440		38,500		(7,090	)		(41,301	)

		18,848,635		13,912,937		1,612,592		2,715,595		5,600,431			3,087,141

Additionally the Company has outstanding balances with Banco Nacional de Desenvolvimento Social and BNDES Participações S.A. in the amounts of R$2,332,542 and R$738.235 respectively at June 30, 2009, related to loans received at market interest rates, which major maturity at June, 2029. These amounts are booked as loans and financing.

Vale also have short-term investments with Bradesco in the amount of R$94,435 at June 2009.


Remuneration of key management personnel	06/30/09
Short-term benefits to managements		33
Other long-term benefits to managements		7

Total		40

6.8- Inventories


	Consolidated				Parent Company
	06/30/09		03/31/09		06/30/09		03/31/09
Finished products
• Nickel, co-products and sub products Inco		2,825,766		3,293,959		53,263		48,812
• Iron ore and pellets		1,689,445		1,788,567		1,521,470		1,597,986
• Manganese and ferroalloys		324,688		522,339		—		—
• Aluminum products		270,852		355,545		5,983		13,758
• Kaolin		69,191				—
• Coal		110,318				—
• Copper		60,483		70,384		36,012		44,350
• Steel products		34,203		39,689		—		—
• Other		282,341		231,139		31,732		28,098

		5,667,287		6,301,622		1,648,460		1,733,004

Spare parts and maintenance supplies		2,537,489		2,834,466		1,120,888		1,172,390

		8,204,776		9,136,088		2,769,348		2,905,394

On June 30, 2009 the Company had nol inventories adjustments. On March 31, 2009, the Company recorded of R$60,160 and R$40,492 to adjust nickel and steel inventories to their respective realizable values.

6.9- Recoverable Taxes


	Consolidated				Parent Company
	06/30/09		03/31/09		06/30/09		03/31/09
Income tax		972,531		3,267,253		50,377		1,842,935
Value-added tax — ICMS		716,437		663,016		530,427		516,921
PIS and COFINS		1,182,679		1,226,922		400,159		418,836
Others		126,744		109,457		59,284		53,034


Total		2,998,391		5,266,648		1,040,247		2,831,726


Current		1,688,351		3,948,197		871,365		2,669,792
Non-current		1,310,040		1,318,451		168,882		161,934


		2,998,391		5,266,648		1,040,247		2,831,726

6.10- Deferred Income Tax and Social Contribution

Income taxes in Brazil comprise the taxation on income and the social contribution on profit. The statutory effective rate applicable in the periods presented is 34%. In other countries where we have operations, the applicable tax rate varies from 1.67% to 40%.

The amounts of income tax and social contribution recognized in income for the period are presented as follows:


	Consolidated															Parent Company
	Quarter (Unaudited)									Accumulated						Accumulated
	2Q/09			1Q/09			2Q/08			06/30/09			06/30/08			06/30/09			06/30/08
Income before income tax and social contribution		5,109,592			3,801,033			10,699,222			8,910,625			14,585,701			8,993,907			12,434,122
Results of equity investment		(50,021	)		(13,450	)		266,767			(63,471	)		610,876			4,168,176			(5,709,331	)
New practices adjustments (see note 6.2).		—			—			(2,655,833	)		—			(3,478,810	)		—			—

		5,059,571			3,787,583			8,310,156			8,847,154			11,717,767			13,162,083			6,724,791

Income tax and social contribution at combined tax rates		34	%		34	%		34	%		34	%		34	%		34	%		34	%


Federal income tax and social contribution at statutory rates		(1,720,254	)		(1,287,778	)		(2,825,453	)		(3,008,032	)		(3,984,041	)		(4,475,108	)		(2,286,429	)

Adjustments that affects the basis of taxes:

Income tax benefit from interest on stockholders’ equity		—			—			286,674			—			582,285			—			582,285
Fiscal incentives		129,218			63,472			163,382			192,690			206,701			158,424			83,558
Results of overseas companies taxed by different rates wich diference than the parent company rate		361,304			721,943			329,378			1,083,247			641,278			—			—
Exchange gains/ loss — not taxable		(2,319,601	)		(486,640	)		(545,701	)		(2,806,241	)		(668,125	)		—			—
Benefit on Goodwill Amortization		44,949			44,949			44,949			89,898			89,898			89,898			89,898
Others		(29,213	)		186,072			(24,411	)		156,859			(109,061	)		(149,566	)		182,972

Income tax and social contribution		(3,533,597	)		(757,982	)		(2,571,182	)		(4,291,579	)		(3,241,065	)		(4,376,352	)		(1,347,716	)

Vale has tax incentives related to our manganese, alumina, aluminium and kaolin operations in the state of Pará, kaolin operation in the state of Amapá and potash in the state of Sergipe. Tax incentives related to manganese comprise partial exemption up to 2013. Tax incentives related to alumina and potash comprise full exemption of income tax on production levels defined up to 2009 and 2013, respectively, while the partial tax exemption of incentives related to aluminum and kaolin expires in 2013. An amount equal to the tax savings shall be recognized in a reserve account in shareholders’ equity and may not be paid as dividends.

Vale also has tax incentives related to Goro, in New Caledonia (Goro). These tax incentives include temporary full exemption of income tax during the construction phase of the project and also for a 15-year period beginning in the first year of commercial production, as defined by the applicable law, followed by a 5-year period with 50% of temporary tax incentives. Besides the, Goro Project also qualifies for certain exemptions of indirect taxes such as import tax during the construction phase and during all the commercial life of the project. Some of these tax benefits, including temporary tax incentives, are subject to an earlier phase out in case the project achieves a specified cumulative rate of return. We are subject to a taxation on part of the income commencing in the first year in which commercial production is achieved, as defined by the applicable law. To date, we have not recorded any taxable income for New Caledonian tax purposes. The benefits of this legislation are expected to apply with respect to taxes payable once the Goro project is in operation.

Vale is subject to examination by tax authorities for up to five years regarding our operations in Brazil, ten years for Indonesia, and five and six years for Canada, except for Newfoundland which has no limit.

Brazilian tax loss carry-forwards have no expiration date though offset is restricted to 30% of annual taxable income.

6.11- Investments


						Equity Results
	Investments					Quarter (Unaudited)								Accumulated
	06/30/09			03/31/09		2Q/09			1Q/09			2Q/08		06/30/09			06/30/08
Investimentos avaliados a mercado (a)
Usinas Siderúrgicas de Minas Gerais S.A. — USIMINAS (b)		—			594,775		17,483			—			17,525		17,483			17,525
ThyssenKrupp CSA — Cia Siderúrgica do Âtlantico		1,331,214			1,197,045		—			—			—		—			—
Mirabela Nickel Ltd		46,575			30,609		—			—			—		—			—
Hudbay Minerals Inc.		44,178			37,198		—			—			—		—			—
Heron Resources Inc		6,306			6,520		—			—			—		—			—
Outros		32,729			33,471		—			—			—		—			—

		1,461,002			1,899,618		17,483			—			17,525		17,483			17,525

Investimentos avaliados pelo método de equivalência patrimonial
Henan Longyu Energy Resources Co. Ltd.		417,157			449,759		40,456			42,418			36,850		82,874			74,516
Korea Nickel Corp.		41,319			56,611		(3,316	)		3,140			—		(176	)		—
Log-In — Logistica Intermodal S/A.		217,713			218,775		(1,051	)		4,800			8,423		3,749			17,637
Shandong Yankuang International Company Ltd		(1,168	)		9,503		(8,872	)		(15,929	)		2,962		(24,801	)		3,038
Vale Soluções em Energia		172,243			119,877		—			—			—		—			—
Zhuhai YPM Pellet e Co.,Ltd.		20,712			19,993		5,962			(9,888	)		—		(3,926	)		—
Others		70,821			80,753		(641	)		(11,091	)		3,688		(11,732	)		1,773

		938,797			955,271		32,538			13,450			51,923		45,988			96,964

		2,399,799			2,854,889		50,021			13,450			69,448		63,471			114,489


(a)		investments measured at market value, or equivalent, with impact in the unrealized results of market value line inside sharehoders’ equity.

(b)		Investments disposed in 2009. The amount R$ 17.483 in 2T09 refers to dividends received.

6.12- Intangible


	Consolidated
	Intangible						*Goodwill amortization ()**
	06/30/09			03/31/09			2Q/08
Intangible by segment

Iron ore and pellets
Goodwill of Minerações Brasileiras Reunidas — MBR (Includes goodwill Caemi) (b)		4,060,415			4,060,415			(138,612	)
Goodwill other companies (a, b)		5,645			5,513			(677	)

		4,066,060			4,065,928			(139,289	)

Nickel
Goodwill of Inco Limited (a, b, d)		3,015,506			3,337,782			(195,230	)

Coal
Goodwill of Vale Australia (a, b)		168,292			172,471			(1,696	)


Total goodwill		7,249,858			7,576,181			(336,215	)


Other rights							End amortization


Right of use of the shares of EBM		666,670			672,688		Maio de 2037
Subconcessão — Ferrovia Norte Sul — FNS		1,653,491			1,678,277		Dezembro de 2037
Other rights Vale Inco		612,254			649,032		Setembro de 2046
Other		16,777			14,799

Total Other rights		2,949,192			3,014,796


Total Intangible		10,199,050			10,590,977


Intangible not recorded at the parent company		(2,265,745	)		(2,342,108	)

Total parent company		7,933,305			8,248,869


(a)		Goodwill not recorded in the parent company; and

(b)		Goodwiill paid by future proftability expectancy

(*)		The amortization of goodwill was ceased in december 2008 (see note 6.2)

The main changes in intangibles caption during the quarter ended in June 30, 2009, which changed the balance of R$10,590,977 as of March 31, 2009 to R$10,199,050 as of June 30,2009, are as follows: amortization: -R$9,739, translation adjustment -R$361.123 and monetary variation -R$21.065.

6.13- Property, Plant and Equipment


				Consolidated									Parent Company
	Average			06/30/09											06/30/09
	depreciation					Accumulated					03/31/09				Accumulated					03/31/09
	rates			Cost		depreciation			Net		Net		Cost		depreciation			Net		Net
Lands		0.00	%		496,759		—			496,759		582,304		279,027		—			279,027		264,553
Buildings		3.63	%		9,257,469		(2,221,685	)		7,035,784		7,090,692		3,657,094		(961,512	)		2,695,582		2,558,748
Installations		3.73	%		29,532,846		(9,699,099	)		19,833,747		19,881,317		13,884,845		(4,236,185	)		9,648,660		9,513,723
Equipment		7.34	%		14,618,453		(4,480,555	)		10,137,898		10,113,768		5,018,799		(1,770,208	)		3,248,591		3,243,767
Information technology equipment		20.00	%		2,151,796		(1,257,736	)		894,060		967,558		1,729,659		(1,030,981	)		698,678		745,085
Railroads		3.09	%		12,320,545		(4,429,893	)		7,890,652		8,083,422		10,510,805		(3,952,834	)		6,557,971		6,670,994
Mineral assets		3.26	%		27,243,437		(3,864,704	)		23,378,733		28,888,532		1,995,780		(409,994	)		1,585,786		1,588,875
Others		7.27	%		13,781,002		(2,911,448	)		10,869,554		8,291,946		3,233,164		(1,553,517	)		1,679,647		1,624,297

					109,402,307		(28,865,120	)		80,537,187		83,899,539		40,309,173		(13,915,231	)		26,393,942		26,210,042
Construction in progress					30,560,007		—			30,560,007		31,271,097		14,530,583		—			14,530,583		13,361,198

Total					139,962,314		(28,865,120	)		111,097,194		115,170,636		54,839,756		(13,915,231	)		40,924,525		39,571,240

6.14- Loans and Financing

Current


	Consolidated
	06/30/09		03/31/09

Trade finance		548,277		937,054
Working capital		145,416		156,704


		693,693		1,093,758

Refers to short-term financing for export, denominated in US dollars, with average annual interest rate of 2.24%.

Non-current


	Consolidated								Parent Company
	Current liabilities				Non-current				Current liabilities				Non-current
	06/30/09		03/31/09		06/30/09		03/31/09		06/30/09		03/31/09		06/30/09		03/31/09

Foreign contracts

Loans and financing in:
U.S. dollars		562,086		712,194		12,559,108		14,915,344		312,393		383,038		717,341		857,713
Other currencies		49,189		35,987		360,668		379,756		6,552		7,361		9,791		14,681
Notes in U.S. dollars		—		—		12,687,035		15,064,036		—		—		—		—
Export securitization (*)		109,892		129,036		237,219		314,514		—		—		—		—
Perpetual notes		—		—		162,748		193,069		—		—		—		—
Accrued charges		350,385		390,780		—		—		10,969		5,153		—		—


		1,071,552		1,267,997		26,006,778		30,866,719		329,914		395,552		727,132		872,394


Local contracts

Indexed to TJLP, TR, IGP-M and CDI		145,105		119,623		5,451,570		5,273,938		101,293		101,233		5,176,518		5,027,799
Basket of currencies		2,746		3,258		7,094		9,230		2,746		3,258		7,094		9,230
Loans in U.S. dollars		—		—		837,718		382,378		—		—		769,440		382,378
Non-convertible debentures		—		—		6,000,576		5,994,306		—		—		5,500,000		5,500,000
Accrued charges		177,975		357,127		—		—		177,975		357,127		—		—


		325,826		480,008		12,296,958		11,659,852		282,014		461,618		11,453,052		10,919,407

		1,397,378		1,748,005		38,303,736		42,526,571		611,928		857,170		12,180,184		11,791,801


(*)		Debt securities collateralized by future receivables arising from certain exports sales.

The long-term portion as of June 30, 2009 matures as follows:


	Consolidated				Parent Company
2010		4,559,135	12	%		1,708,738	14	%
2011		5,675,993	15	%		346,119	3	%
2012		2,587,934	7	%		331,873	3	%
2013		5,795,526	15	%		4,308,656	35	%
2014 onwards		19,021,824	50	%		5,484,798	45	%
No due date (Perpetual notes and non-convertible debentures)		663,324	1	%		—	0	%


		38,303,736	100	%		12,180,184	100	%

As of June 30, 2009, annual interest rates on long-term debt were as follows:


	Consolidated		Parent Company
Up to 3%		12,214,013		1,519,151
3.1% to 5%		890,914		299,408
5.1% to 7%(*)		12,127,892		753,973
7.1% to 9%(*)		4,985,684		1,555,291
9.1% to 11%		6,764,344		6,572,035
Over 11% (*)		2,092,256		2,092,254
Variable (Perpetual notes)		626,011		—


		39,701,114		12,792,112


(*)		Includes non-convertible debentures and other Brazilian-reais denominated loans where interest is equal to the accumulated variation by CDI and TJLP (Brazilian interbank certificate of deposit and Long-term interest rate) plus spread. For these operations the Company has contracted derivatives to hedge the Company exposure against the variations of floating debt denominated in reais. The contract value for these operations is R$10,550 millions, where R$8,515 millions has an original interest rate above 9%. After the derivatives contract the average cost of these operations is equivalent to 3.92%.

The percentage variations related applied to the debt in each quarter ended were as follows:


	06/30/09			03/31/09			06/30/08
TJLP — Long-Term Interest Rate (effective rate)		1.6			1.5			1.5
IGP-M — General Price Index — Market		(0.3	)		(0.9	)		4.3
Devaluation of Real against United States Dollar		18.6			0.9			9.9

On January 28, 2008 the Company entered into a transaction with BNDES to finance working capital in the amount of R$ 2,000 millions with final maturity in 2018.

In 2008, Vale entered into agreements with Banco Nacional de Desenvolvimento Econômico e Social (BNDES), the Brazilian National Development Bank and with Japanese agencies, granting long-term financials, Japan Bank for International Cooperation (JBIC) and Nippon Export and Investment Insurance (NEXI) for the financing of the mining, logistics and power generation projects to be developed under Vale’s investment program for 2008-2012. Until June 30, 2009 the Vale had draw down R$1,145 million under the credit facility granted by BNDES.

Additionally Vale has credit lines available with bank syndicates, which operates as a short-term liquidity buffer that allow a more efficient cash management. Under revolving credit facilities, amounts drawn and repaid can be disbursed again at the option of the Borrower. On June 30, 2009, the total amount available under revolving credit lines was of US$1,900 million, being US$1,150 million granted to Vale International and Vale Inco. Until June 30, 2009, neither Vale International nor Vale Inco had drawn any advance amount under these facilities.

As of June 30, 2009 Vale Inco has drawn US$91 million by way of credit notes.

As of June 30, 2009, the US-dollar denominated fixed interest notes of R$12,687,035 (March 31, 2009 — R$15,064,036) and other debt of R$26,040,750 (March 31, 2009 — R$27,965,626) are not securitized. The export securitization of R$351,471 (March 31, 2009 — R$449,178) is collateralized by future receivables from certain export sales by the subsidiary CVRD Overseas Ltd. Loans from international lenders in the amount of R$89,070 (March 31, 2009 — R$105,060) are guaranteed by Brazilian Federal Government, to which the Company has provided guarantees in the same amount. The remaining long-term debt of R$532,788 (March 31, 2009 — R$690,676) is collateralized mainly by receivables from the subsidiaries.

Some long-term debt instruments have financial coverage. The main financial coverage relates to certain ratios that must be maintained, such as debt versus EBITDA and interest coverage. The Company is in full compliance with financial coverage required.

6.15- Contingent Liabilities and commitments

The Company and its subsidiaries are parties to labor, civil, tax and other suits and have been contesting these matters both administratively and in court. When applicable, these are backed by judicial deposits. Provisions for losses are estimated and inflation restated by management based on the opinion of the Legal Department and its external legal counsels.

In addition to the provisions recorded, there are other contingent liabilities, split between taxes, labor and civil claims, estimated as possible losses in the amount of R$7,533,436 (R$3,738,555 for the parent Company).

Contingent Liabilities

Provisions for contingencies net of judicial deposits, considered by management and its legal counsel as sufficient to cover probable losses from, are as follows:


	Consolidated						Parent Company
	06/30/09			03/31/09			06/30/09			03/31/09
I) Tax contingencies		2,356,046			2,260,302			1,186,497			1,188,466
(-) Judicial deposits		(1,064,071	)		(1,112,709	)		(937,925	)		(938,681	)

		1,291,975			1,147,593			248,572			249,785

II) Civil contingencies		630,133			715,428			536,428			501,977
(-) Judicial deposits		(39,655	)		(38,670	)		—			—

		590,478			676,758			536,428			501,977

III) Labor contingencies		1,121,299			1,125,861			935,582			929,064
(-) Judicial deposits		(58,831	)		—			(44,854	)		—

		1,062,468			1,125,861			890,728			929,064

IV) Environmental contingencies		34,308			34,126			12,083			11,546

Total accrued liabilities		2,979,229			2,984,338			1,687,811			1,692,372


	06/30/09			03/31/09			06/30/09			03/31/09
Balance at the beginning of the period		2,984,338			2,988,774			1,692,372			1,730,489
Provisions, net of reversals		23,496			(14,647	)		(43,319	)		(4,685	)
Payment		(8,465	)		(6,253	)		(8,434	)		(6,220	)
Monetary update		(31,318	)		41,605			91,290			49,678
Judicial deposits		11,178			(25,141	)		(44,098	)		(76,890	)

Balance at the end of period		2,979,229			2,984,338			1,687,811			1,692,372

	I)		Tax Contingencies:

			The major suits are:

•

Value-Added Tax on Sales and Services (ICMS) — The contingent figures refers to the right of credit and differential rates regarding the transfer of assets between company branches;

•

Services Tax (ISS) — The major claims are related to disputes on the location of tax collection;

•

Import Duty (II) — The provision made is related to the Fiscal classification of equipment imported by merged companies;

•

Additional Compensation to Harbor Workers (AITP) — Amounts regarding the collection of compensation amounts for public harbor workers transferred to private harbor;

•

Income Tax and Social Contribution — It refers essentially to the dispute on tax loss compensation and negative bases of social contribution above the limit of 30% of taxable income and monetary adjustment of assets from merged companies; and

•

Others — Regarding disputes on tax credit compensation and the basis of calculation of Financial Compensation by Exploration of Mineral Resources — CFEM.

	II)		Civil Contingencies:

			The civil lawsuits are mainly related to claims made against us by contractors in connection with losses allegedly incurred by them as a result of several economic plans, accidents and return of land.

	III)		Labor Contingencies:

			Labor and social security contingencies — it refers mainly to claims for (a) payment of time spent traveling from their residences to the work-place, (b) additional health and safety related payments, and (c) disputes about the amount of indemnities paid upon dismissal and one-third extra holiday pay.

Other commitments

(a)

In March 31, 2009, upon the acquisition of interest in TEAL, the Company provided guarantees in the amount of US$43,506 thousand in connection with credit facilities in US dollars granted to this entites expiring August 31, 2009.

(b)

Sumic Nickel Netherlands B.V. — Sumic, a 21% shareholder of Goro, has a put option to sell to Vale Inco 25%, 50%, or 100% of its share in Goro. The put option can be exercised if the defined cost of the initial Goro project exceeds US$4,200 thousands at project rates and an agreement cannot be reached on how to proceed with the project.

In connection with the Girardin Financing, the Company provides certain guarantees on behalf of Goro Níquel S.A. (Goro) pursuant to which we guaranteed payments due by Goro of up to a maximum amount of US$ 100 millions (maximum amount) in case of contractual default. We also provided an additional guarantee covering the payments due from Goro of: (a) amounts exceeding the maximum amount in connection with the indemnity and (b) certain other amounts payable by Goro under a lease agreement covering certain assets.

The Company provides a guarantee covering certain termination payments due in New Caledonia from Goro to the supplier under an electricity supply agreement (“ESA”) entered into in October 2004 for the Goro nickel-cobalt project. The amount of the termination payments guaranteed depends upon a number of factors, including whether any termination of the ESA is as a result of a default by Goro and the date on which an early termination of the ESA were to occur. If Goro terminates the agreement under the ESA prior to the anticipated start date for supply of electricity to the project, the termination payment, which currently is at its maximum, would be €$ 145 million. Once the supply of electricity under the ESA to the project begins, the guaranteed amounts will decrease over the life of the ESA.

The Company expects such guarantees to be not executed and therefore no provisions for losses have been made.

(c)

At the time of our privatization in 1997, the Company issued debentures to its then-existing stockholders, including the Brazilian Government. The terms of the debentures, were set to ensure that the pre-privatization stockholders, including the Brazilian Government would participate in possible future financial benefits that could be obtained from exploiting certain mineral resources.

A total of 388,559,056 Debentures were issued at a par value of R$ 0.01 (one cent), whose value will be restated in accordance with the variation in the General Market Price Index (IGP-M), as set forth in the Issue Deed.

The debentures holders has the right to receive premiuns, paid semesterly , equivalent to a percentage of net revenues from especific mine resources as set forth in the indenture.

In April, 2009, the Company paid interest on debentures in the amount of R$7,879.

6.16- Provision for Asset Retirement Obligations


	Consolidated						Parent Company
	06/30/09			03/31/09			06/30/09			03/31/09
Provisions in the beginning of year		2,067,730			2,109,697			894,997			891,450
Accretion expense		27,848			12,865			17,606			3,547
Liabilities settled in the current period		(27,651	)		(7,392	)		(25,864	)		—
Revisions in estimated cash flows		21,854			(17,702	)		—			—
Cumulative translation adjustment		(80,234	)		(29,738	)		—			—

Provisions in the end of year		2,009,547			2,067,730			886,739			894,997


Current		63,898			88,979			32,885			57,266
Non-current		1,945,649			1,978,751			853,854			837,731

		2,009,547			2,067,730			886,739			894,997

6.17- Pension Plan

The following information summarize the costs related to pension plans, which include the allowance for additional pension support and health care plan.

Allowance for additional pension support and health care plan refer to the Company’s responsibility to support retirements, pensions and health assistance in connection with the termination of some employees, which occurred between 1987 and 1989.

In the 2008 year-end financial statements, Vale disclosed that it expected to contribute R$837,978 to its defined benefit plans in 2009. As of June, 30 2009, R$335,048 had been contributed. The Company does not expect significant changes in the estimates disclosed in 2008.


	Consolidated
	Quarter (Unaudited)
	2T/09									1T/09									2T/08
				Underfunded									Underfunded
	Overfunded			pension			Underfunded			Overfunded			pension			Underfunded			Overfunded			Underfunded				Underfunded
	pension plans			plans			other benefits			pension plans			plans			other benefits			pension plans			pension plans			other benefits
Service cost — benefits earned during the period		5,355			21,533			8,758			3,570			25,452			9,873			5,116			29,809				12,380
Interest cost on projected benefit obligation		153,518			117,312			43,321			102,346			124,021			44,726			139,016			105,545				33,703
Expected return on assets		(211,487	)		(95,516	)		—			(140,992	)		(100,114	)		—			(231,526	)		(112,119	)			—
Amortization of initial transitory obligation		11,309			1,958			(11,694	)		—			18,511			(16,161	)		(2,495	)		—				(4,968	)

Net periodic pension cost		(41,305	)		45,287			40,385			(35,076	)		67,870			38,438			(89,889	)		23,235				41,115


	Consolidated Accumulated
	06/30/09									06/30/08
	Overfunded			Underfunded pension			Underfunded			Overfunded			Underfunded			Underfunded
	pension plans			plans			other benefits			pension plans			pension plans			other benefits
Service cost — benefits earned during the period		8,925			46,985			18,631			8,527			59,353			23,333
Interest cost on projected benefit obligation		255,864			241,333			88,047			231,694			211,242			73,265
Expected return on assets		(352,479	)		(195,630	)		—			(385,877	)		(225,061	)		—
Amortization of initial transitory obligation		11,309			20,469			(27,855	)		(4,159	)		—			(6,706	)

Net periodic pension cost		(76,381	)		113,157			78,823			(149,815	)		45,534			89,892


	Parent Company
	Quarter (Unaudited)
	2T/09								1T/09								2T/08
				Underfunded								Underfunded								Underfunded
	Overfunded			pension			Underfunded		Overfunded			pension			Underfunded		Overfunded			pension			Underfunded
	pension plans			plans			other benefits		pension plans			plans			other benefits		pension plans			plans			other benefits
Service cost — benefits earned during the period		5,355			—			928		3,570			—			618		5,116			—			788
Interest cost on projected benefit obligation		153,518			19,434			8,085		102,346			12,957			5,391		139,016			17,775			7,206
Expected return on assets		(211,487	)		(11,341	)		—		(140,992	)		(7,561	)		—		(231,526	)		(7,789	)		—
Amortization of initial transitory obligation		11,309			—			51		—			—			35		(2,495	)		—			—

Net periodic pension cost		(41,305	)		8,093			9,064		(35,076	)		5,396			6,044		(89,889	)		9,986			7,994


	Parent Company
	Accumulated
	06/30/09								06/30/08
				Underfunded								Underfunded
	Overfunded			pension			Underfunded		Overfunded			pension			Underfunded
	pension plans			plans			other benefits		pension plans			plans			other benefits
Service cost — benefits earned during the period		8,925			—			1,546		8,527			—			1,314
Interest cost on projected benefit obligation		255,864			32,391			13,476		231,694			29,625			12,010
Expected return on assets		(352,479	)		(18,902	)		—		(385,877	)		(12,981	)		—
Amortization of initial transitory obligation		11,309			—			86		(4,159	)		—			—

Net periodic pension cost		(76,381	)		13,489			15,108		(149,815	)		16,644			13,324

6.18- Long-term Incentive compensation plan

In 2008, with the purpose of introducing a “stockholders vision” to some of the Company’s executives, as well as improving the retention of these executives and reinforcing a sustainable performance culture, the Board of Directors approved a long-term incentive compensation plan, which was implemented with a three-year cycle.

Under the plan, the participants, restricted to certain executives, may elect to allocate part of their annual bonuses to the plan. That portion of the bonus allocated to the plan is in fact used by the executive to purchase Vale’s preferred shares through a previously defined financial institution, at market conditions and with no benefit provided by Vale.

The shares purchased by each executive have no restrictions and may, at the participant’s discretion, be sold at any time. However, in order to be entitled to the long-term incentive compensation plan to be provided by Vale, the amount of shares initially purchased by the executives on the plan’s adoption must be held for a three-year period and the executive must retain their employment relationship with Vale during that period.

By meeting the two conditions described above (keeping the number of shares purchased and remaining a Vale employee over the three-year period), the participant becomes entitled to receive from Vale, at the end of each cycle, a cash payment equivalent to the total amount of the shares held, based on the their market quotations. As of June 30, 2009, 1,809,117 shares (2,029,585 shares as of March 31, 2009) were covered by said benefit.

The Company records the cost of this incentive in accordance with the Long-Term Compensation Plan, following the requirements of CVM Resolution 562/2008. The obligations are measured at fair value on each disclosure date, based on market quotations. Settlement costs incurred are recognized during the three-year vesting period.

Additionally, certain executives eligible to the long-term incentive have the opportunity to receive at the end of the three-year cycle an amount equal to the market value of a certain number of shares, based on an evaluation of their career and Vale’s performance factor as measured by the indicator of total return to stockholders.

As of June 30, 2009, the amount accrued to support this plan is R$67,777 (R$41,294 as of March 31,2009), fully recognized in the statement of income.

6.19- Paid-up Capital

In July 2008, the Company issued 256,926,766 common shares and 164,402,799 preferred shares through a global offering, which consisted of a registered offering in Brazil and an international offering.

On August 2008, through an additional offering, the Company issued 24,660,419 preferred shares. Following the issue, Vale’s capital stock increased by R$ 19,434,193 with corresponding transaction costs of R$160,771 being recorded as contra entry. As a result, capital is now composed of 3,256,724,482 common shares and 2,108,579,618 preferred shares, totaling R$ 47,434,193.

Class A preferred shares have the same rights as common shares, except for the right to elect the members of the Board of Directors. They have priority to a minimum annual dividend of 6% on the portion of capital represented by this class of share or 3% on the book net equity value of the share, whichever is greater.

As of June 30, 2009, the Company’s capital is R$47,434,193, corresponding to 5,365,314,732 shares, without par value.

The members of the Board of Directors and the Executive Board together own 157,340 common shares and 1,008,701 preferred shares.

The Board of Directors has the power, without requiring an amendment to the bylaws, to allow the issue of new shares (authorized capital) including through the capitalization of profits and reserves up to the authorized limit of 3,600,000,000 common shares and 7,200,000,000 preferred shares without par value.

As from May, 04 2009, Vale changed the code for negotiation of its ADR’s negotiated in New York Stock Exchange (NYSE) from RIO e RIO-P to VALE and VALE-P, respectively.

6.20- Funds linked to future mandatory conversion into shares

On April 30, 2009 Vale paid additional interests to the holders of mandatory convertible notes from tranches VALE (former, RIO) and VALE P (former, RIO-P), in the amount of R$1,073721 and R$1,274361, respectively, translated into US dollars based on the Brazilian-real / US dollar exchange rate prevailing on April 30, 2009.

In June, 2007, the Company issued mandatory convertible notes in the amount of R$3,601million, (net of R$3,064 million charges), with maturity in 2010. The notes, pay a coupon of 5.50% p.a. quarterly and are intitledt to an additional remuneration equivalent to the cash distribution paid to ADS holders. These notes were classified as a capital instrument, mainly due to the fact that neither the Company nor the holders have the option to settle the operation, whether fully or partially, with cash, and the conversion is mandatory; consequently, they were recognized as a specific component of shareholders’ equity, net of financial charges.

The funds linked to future mandatory conversion, net of interest, represented by a maximum of 56,582,040 common shares, are equivalent to R$ 2,111 million, and those represented by a maximum of 30,295,456 preferred shares are equivalent to R$ 926 million. All the shares are currently held in treasury (see note 6.21).

6.21- Treasury Stock

On May 27, 2009, the Board of Directors approved the closing of program to repurchase shares approved on October 16, 2008, covering up to 69,944,380 common shares and up to 169,210,249 preferred shares. At the closing program date 18,415,859 common shares and 47,284,800 preferred shares had been purchased.

The objective of the program was to maximize the value of the Company for shareholders.

As of June 30, 2009, 152,623,603 shares were held in the treasury, totaling R$ 2,472,132 as follows:


	Shares
	Quantity				Unit acquisition cost						Average quoted market price
Class	06/30/09		03/31/09		Average		Low		High		06/30/09		03/31/09
Preferred		77,625,704		77,625,704		23.56		21.02		27.96		31.73		27.80
Common		74,997,899		74,997,899		37.07		23.33		31.00		36.81		32.14

		152,623,603		152,623,603

6.22- Compensation of Stockholders

On April 30, 2009, the Company paid its stockholders 152,623,603 shares the amount of R$2,472,129 in the form of dividends.

6.23- Financial Results

Consolidated


	Quarter
	2Q/09			1Q/09			2Q/08
Financial expenses
Interest		(457,354	)		(575,694	)		(445,648	)
Labor, tax and civil contingencies		(29,235	)		(37,998	)		(14,872	)
Others		(249,530	)		(103,384	)		(253,163	)

		(736,119	)		(717,076	)		(713,683	)


Financial income
Related parties		—			169			3,068
Financial statements		198,818			275,555			42,671
Others		27,841			37,020			4,472

		226,659			312,744			50,211


Derivatives		1,814,648			43,775			1,219,561


Indexation and exchange rate variation on assets:
Cash and cash equivalents		(2,282,057	)		(161,740	)		(148,607	)
Accounts receivable		(763,668	)		(94,907	)		(561,125	)
Loans		4,693,405			295,438			2,107,099
Property, Plan and Equipment		(124,059	)		(475,063	)		(23,523	)
Others		(254,528	)		435,573			(163,957	)

Net		1,269,093			(699	)		1,209,887

Financial income (expenses), net		2,574,281			(361,256	)		1,765,976


	Accumulated
	Consolidated						Parent Company
	06/30/09			06/30/08			06/30/09			06/30/08
Financial expenses
Interest		(1,033,048	)		(1,000,807	)		(1,308,946	)		(1,368,720	)
Labor, tax and civil contingencies		(67,233	)		(91,702	)		(63,906	)		(82,639	)
Others		(352,914	)		(723,664	)		(194,826	)		(275,816	)

		(1,453,195	)		(1,816,173	)		(1,567,678	)		(1,727,175	)


Financial income
Related parties		169			4,412			138,631			104,236
Financial statements		474,373			96,390			255,342			32,320
Others		64,861			67,106			21,674			7,937

		539,403			167,908			415,647			144,493


Derivatives		1,858,423			685,536			1,578,872			943,069


Indexation and exchange rate variation on assets:
Cash and cash equivalents		(2,443,797	)		(162,421	)		(30,013	)		3,463
Accounts receivable		(858,575	)		(546,566	)		—			—
Loans		4,988,843			2,417,878			7,587,013			3,828,862
Property, Plan and Equipment		(599,122	)		(26,504	)		—			—
Partes Relacionadas		—			—			(1,612,591	)		(511,184	)
Others		181,045			(186,872	)		327,272			(174,338	)

Net		1,268,394			1,495,515			6,271,681			3,146,803


Financial income (expenses), net		2,213,025			532,786			6,698,522			2,507,190

6.24- Financial Instruments — Derivatives

Risk Management Policy

Vale has developed its risk management strategy in order to provide an integrated approach of the risks the Company is exposed to. To do that, we evaluate not only the impact of market risk factors in the business results (market risk), but also the risk arising from third party obligations with Vale (credit risk) and those risks inherent in Vale’s operational processes (operational risk).

Traditional market risk measures such as VaR (Value at Risk) are not sufficient to evaluate the group exposures once Vale’s main goal is to avoid a possible lack of cash to fulfill our future obligations.

The enterprise wide risk management approach, that emcopasses all kinds of risk, as well as the relations between the several market risk factors (correlations), aims to assess the impact that such events would bring considering the natural hedges presented in the company’s portfolio. Therefore, when assessing the risk associated with Vale’s business, one can observe the positive effect due to the mix of products and currencies in Vale’s portfolio. This diversification implies in a natural reduction of the overall risk of the company. Any risk mitigation strategy, whenever necessary, will be implemented if it contributes significantly for the reduction on the volatility on Vale’s cash flows beyond the levels initially observed and to acceptable levels of risk.

Vale considers that the effective management of risk is a key objective to support its growth strategy and financial flexibility. The risk reduction on Vale’s future cash flow contributes to a better perception of the company’s credit quality, improving its ability to access different markets and reducing the financing costs. Therefore, the board of directors has established an enterprise-wide risk management policy and a risk management committee.

The risk management policy determines that Vale should evaluate regularly its cash flow risks as well as risk mitigation strategies. As previously stated, whenever considered necessary, these mitigation strategies should be put in place, will be executed with the objective of reducing the risks regarding the obligations assumed by the Company, both with thirdparties and its shareholders.

The executive board is responsible for the evaluation and approval of the risk mitigation strategies recommended by the risk management committee.

The committee is responsible for overseeing and reviewing our risk management principles and risk management instruments, besides reporting periodically to the executive board regarding the management process and risk monitoring, including the the main risks Vale is exposed to and their impact on Vale’s cash flow.

The risk management policy and procedures, that complement the risk management governance model, require the diversification of operations and counterparties and prohibit speculative transactions with derivatives.

Besides the risk management governance model, Vale has in place a well defined corporate governance structure with the roles and responsabilities well defined. The recommendation and execution of the derivative transactions are implemented by different and independent areas. It is responsibility of the risk management department to define and propose to the risk management committee market risk mitigation strategies consistent with Vale and it’s wholly owned subsidiaries corporate strategy. It is responsibility of the finance department the execution of the risk mitigation strategies through the use of derivatives. The independence of the areas guarantees an effective control on these operations.

The monitoring and monthly evaluations of the consolidated risk exposure allow us to evaluate the financial results and the impact on Vale’s cash flow, as well as guarantee that the initial goals will be achieved. The fair value measurements of the trades are reported weekly to management.

All derivative trades were recognized in our balance sheet at fair value and their respective gains or losses were recognized in the earnings.

Considering the nature of Vale’s business and operations, the main market risk factors which the Company is exposed are:

•		Interest rates;

•		Foreign exchange;

•		Products prices;

•		Input and other costs.

Fair value computation methodology

Well-known market participants’ valuation methodologies were used to compute the fair value of instruments. The financial instruments were evaluated computing their present values considering market curves that impact the instrument on the determination dates. The curves and prices used in the pricing for each group of instruments are detailed in the topic “market curves”.

The pricing method considered in the case of European options is the Black & Scholes model, which is widely used among derivatives market participants for the option pricing. In this model, the derivative fair value is a function of the volatility, spot price of the underlying, strike price, risk free rate and maturity. In the case of options where the financial result is a function of the average of the underlying price for a certain period of the time, called Asian options, we use the Turnbull & Wakeman model, also widely used to price this type of instrument. Besides the parameters used on the Black & Scholes model it is considered in this model the price averaging period.

In the case of swaps, the receiving leg and the paying leg present values are estimated discounting their cash flows using the interest rate of the currency they are denominated. The difference between the present values of the receiving leg and paying leg of the swap is the fair value.

The computation method for the swaps linked to TJLP follows the description enclosed in CETIP’s formula book, which includes the TJLP forward curve definition. Therefore, TJLP is computed using the inflation target, published by Banco Central do Brasil, based on IPCA (Extended National Consumer Price Index) plus the Brazilian credit spread, which comprehends an international real interest rate and a Brazilian credit risk component, that is computed using the credit risk for the government bonds, for the medium and long term perspective.

The pricing for the commodities future settlement contracts (buy or sell) is computed using forward curves for each commodity. Normally, these curves are collected in the exchanges where these commodities are traded, among them, London Metals Exchange (LME) and COMEX or market price providers. When there is no price for a specific date, we use interpolations between the available periods.

Value at Risk computation methodology

The Value at Risk of the positions was measured using historical simulation approach. Different market risk factors that impact the prices of the derivatives included in our portfolio were identified and a two year sample of its historical daily returns was gathered.

The current positions of Vale’s derivatives were used to simulate their returns based on sample data and built a non parametric return distribution and consequently the value at risk for the portfolio considering one business day time horizon. The value at risk of the portfolio considers a 95% confidence level.

Sensitivity Analysis

In the topic “sensitivity analysis” we present sensitivity analysis tables for all outstanding positions as of June 30^th 2009. The scenarios defined for these analyses were:

•

Scenario I: expected — considers the market curves as of June 30^th 2009;

•

Scenario II: unfavorable change of 25% — considers a shock of 25% in the market curves used for the pricing in the expected scenario, negatively impacting the fair value of Vale’s derivatives positions;

•

Scenario III: favorable change of 25% — considers a shock of 25% in the market curves used for the pricing in the expected scenario, positively impacting the fair value of Vale’s derivatives positions;

•

Scenario IV: unfavorable change of 50% — considers a shock of 50% in the market curves used for the pricing in the expected scenario, negatively impacting the fair value of Vale’s derivatives positions;

•

Scenario V: favorable change of 50% — considers a shock of 50% in the market curves used for the pricing in the expected scenario, positively impacting the fair value of Vale’s derivatives positions;

Contracts subjected to margin calls

Vale has contracts subject to margin calls only for part of copper and nickel trades executed by its wholly-owned subsidiary Vale Inco Ltd. The total amount deposited in cash in June 2009 was R$ 162.57.

Main positions definitions:

Protection program for the Real denominated debt indexed to CDI

•

CDI vs. USD fixed rate swap — In order to reduce the cash flow volatility, Vale entered into swap transactions to convert the cash flows from debt instruments denominated in Brazilian Reais linked to CDI to U.S. Dollars. In those swaps, Vale pays fixed rates in U.S. Dollars and receives payments linked to CDI.

•

CDI vs. USD floating rate swap — In order to reduce the cash flow volatility, Vale entered into swap transactions to convert the cash flows from debt instruments denominated in Brazilian Reais linked to CDI to U.S. Dollars. In those swaps, Vale pays floating rates in U.S. Dollars (Libor — London Interbank Offered Rate) and receives payments linked to CDI.

Those instruments were used to convert the cash flows from debentures issued in 2006 with a nominal value of R$ 5.5 billion, from the NCE (Credit Export Notes) issued in 2008 with nominal value of R$ 2 billion and also from property and services acquisition financing realized in 2006 and 2007 with nominal value of R$ 1 billion.

Protection program for the Real denominated debt indexed to TJLP

•

TJLP vs. USD fixed rate swap — In order to reduce the cash flow volatility, Vale entered into swap transactions to convert the cash flows of the loans with Banco Nacional de Desenvolvimento Econômico e Social (BNDES) from TJLP to U.S. Dollars. In those swaps, Vale pays fixed rates in U.S. Dollars and receives payments linked to TJLP.

•

TJLP vs. USD floating rate swap — In order to reduce the cash flow volatility, Vale entered into swap transactions to convert the cash flows of the loans with BNDES from TJLP to U.S. Dollars. In those swaps, Vale pays floating rates in U.S. Dollars and receives payments linked to TJLP.

Foreign Exchange cash flow hedge

•

Brazilian Real fixed rate vs. USD fixed rate swap — In order to reduce the cash flow volatility, Vale entered into swap transactions to mitigate the foreign exchange exposure that arises from the currency mismatch between the revenues denominated in U.S. Dollars and the disbursements and investments denominated in Brazilian Reais.

Protection program for the Euro denominated floating rate debt

•

Euro floating rate vs. USD floating rate swap — In order to reduce the cash flow volatility, Vale entered into a swap transaction to convert the cash flows from loans in Euros linked to Euribor to U.S. Dollars linked to Libor. This trade was used to convert the cash flow of a debt in Euros, with a notional amount of € 19.1 million, issued in 2003 by Vale. In this trade, Vale receives floating rates in Euros (Euribor) and pays floating rates in U.S. Dollars (Libor).

Protection program for the USD floating rate debt

•

USD floating rate vs. USD fixed rate swap — In order to reduce the cash flow volatility, Vale Inco Ltd., Vale’s wholly-owned subsidiary, entered into a swap to convert U.S. Dollar floating rate debt into U.S Dollar fixed rate debt. Vale Inco used this instrument to convert the cash flow of a debt issued in 2004 with notional amount of USD 200 million. In this trade, Vale pays fixed rates in U.S. Dollars and receives floating rates in U.S. Dollars (Libor).

Foreign Exchange protection program for Coal Fixed Price Sales — In order to reduce the cash flow volatility associated with a fixed price coal contract, Vale used Australian Dollar forward purchase in order to equalize production cost and revenues currencies.

Nickel Strategic cash flow protection program — In order to protect our cash flow for 2009, Vale entered into hedging transactions where we set fixed prices for part of Vale revenues for this year.

Nickel Fixed Price Program — In order to maintain the exposure to Nickel price fluctuations, we entered into derivatives to convert to floating prices all contracts with clients that required a fixed price. These trades aim to guarantee that the prices of these operations would be the same of the average prices negotiated in LME in the date the product is delivered to the client. It normally envolves buying Nickel forwards (Over-the-Counter) or futures (exchange negotiated). Those operations are usually reverted before the maturity in order to match the settlement dates of the commercial contracts in which the prices are fixed. This program was discontinued for sales in 2009 due to the decision to protect our cash flow this year.

Nickel Purchase Protection Program — In order to reduce the cash flow volatility and eliminate the mismatch between the pricing of the purchased nickel (concentrate, cathode, sinter and others) and the pricing of the final product sold to our clients, hedging transactions were implemented. The items purchased are raw materials utilized to produce refined Nickel. The trades are usually implemented by the sale of nickel forward or future contracts at LME or over-the-counter operations.

Protection program of Natural Gas Program — In order to minimize the impact of the input price volatility in the company’s costs, natural gas derivative trades were implemented. These transactions are usually implemented through the purchase of future and forward contracts.

Copper Scrap Purchase Protection Program — In order to reduce cash flow volatility and eliminate the quotation period mismatch between the pricing period of copper scrap purchase and the pricing period of final products sale to the clients, hedging transactions were implemented. The copper scrap is combined with other raw materials or inputs from Vale Inco Ltd., Vale’s wholly-owned subsidiary, to produce copper to the final costumers. In this case, trades are usually implemented by the sale of forwards or futures at LME or Over-the-Counter trades.

Bunker Oil Purchase Protection Program — In order to reduce the impact of bunker oil price fluctuation on Vale’s freight hiring and consequently reducing the company’s cash flow volatility, bunker oil derivatives were implemented. These transactions are usually executed through forward purchases and swaps.

Maritime Freight Hiring Protection Program — In order to reduce the impact of maritime freight price fluctuation hired to support CIF and CFR sales and consequently reduce the company’s cash flow volatility, freight derivatives (FFA — Forward Freight Agreement) were implemented. These transactions are usually executed through forward purchases.

Embedded Derivatives

•

Energy purchase — energy purchase agreement between Albras, Vale’s controlled subsidiary, and Eletronorte. The contract has a clause that defines that a premium can be charged if aluminum prices trades in the range from US$ 1,450/t until US$ 2,773/t. This clause is considered an embedded derivative.

•

Raw material and intermediate products purchase — Nickel concentrate and raw materials purchase agreements of Vale Inco Ltd, Vale’s wholly-owned subsidiary, in which there are provisions based on nickel and copper future prices behavior. These provisions are considered embedded derivatives.

Foreign exchange and interest rate risk

Company’s cash flow is subjected to volatility of several different currencies against the U.S. Dollar. While most of our product prices are indexed to US dollars, most of our costs, disbursements and investments are indexed to currencies other than the U.S. Dollar, mainly Brazilian Reais and Canadian dollars.

In order to reduce company’s potential cash flow volatility arising from currency mismatch we use derivative instruments. The derivative portfolio implemented to comply with this objective consists, basically, of interest rate swaps to convert floating cash flows in Brazilian Reais to fix or floating U.S. Dollars cash flows, without any leverage.

Vale has also an exposure to interest rates risks over loans and financings. The U.S. Dollars floating rate debt in the portfolio consists mainly of loans including export pre-payments, commercial banks and multilateral organizations loans. In general, the U.S. Dollar floating rate debt is mainly subject to changes in the Libor. To mitigate the impact of the interest rate volatility on the cash flow, Vale takes advantage of natural hedges allowed by the positive correlation of metal prices and U.S. Dollar floating rates. When natural hedges are not present, Vale enters into financial instruments to obtain the same effect.

The Real denominated debt subject to floating interest rates are debentures, Banco Nacional de Desenvolvimento Econômico e Social (BNDES) loans and property and services acquisition financing in the Brazilian market. These Brazilian reais debts are mainly linked to CDI and TJLP.

On June 30^th, 2009, the total amount and interests of Brazilian Real denominated debt converted through swaps into US Dollars was US$ 5.4 billion, with an average cost in dollars of 4.72% after the swaps transactions were implemented and maturity between November 2010 and December 2027, with semi-annual interest payments^a.

These swap transactions have settlement dates and values similar to the interest and principal payment dates, taking into account the liquidity restrictions of the market. At each settlement date, the results on the swap transactions partially offset the impact of the foreign exchange rate in our obligations, contributing to stabilize the cash disbursements in U.S. Dollars for the interest and/or principal payment of our Brazilian Real denominated debt.

In the event of an appreciation (depreciation) of the Brazilian Real against the U.S. Dollar, the negative (positive) impact on Vale debt service (interest and/or principal payment) measured in U.S. Dollars will be almost totally offset by a positive (negative) effect from the swap transaction, regardless of the U.S. dollar / Brazilian Real exchange rate on the payment date.

On the second quarter of 2009, Vale paid in Brazilian Reais an interest amount equivalent to R$ 432 million related to the Real denominated debt that were converted into U.S. Dollars through the use of swap transactions. However, the company has received R$ 209 million on the settlement of the swaps, offsetting the U.S. Dollar / Brazilian Real exchange rate variation impact in Vale debt service.

The tables below show June 30^th 2009 derivative positions for Vale and controlled companies with the following information: notional amount, initial cost, fair value, value at risk, gains or losses in the period and fair value for the remaining years of the operations per each group of instruments.

Protection program for the Real denominated debt and loans


									In R$ million
															Realized
	Notional ($ million)								Unrealized Gain/Loss						Gain/Loss			VaR		Unrealized Gain/Loss by year *
Flow	30-jun-09		31-mar-09		Index	Average rate			30-jun-09			31-mar-09			30-jun-09			30-jun-09		2010		2011	2012		2013		2014			2015		2019

Swap CDI vs. fixed rate swap
Receivable		R$7.574		R$7.519	CDI		101,07	%		7.906			8.610			538
Payable	USD 3.670		USD 3.670		USD		+ 5,59	%		(7.608	)		(9.545	)		(317	)

Net										298			(935	)		220			270		266			67		2		(37	)


Swap CDI vs. floating rate swap
Receivable		R$792		R$792	CDI		102,07	%		836			838			50
Payable	USD 430		USD 430		Libor		+2,44	%		(807	)		(931	)		(19	)

Net										29			(93	)		31			32		23										6


Swap TJLP vs. fixed rate swap
Receivable		R$1.320		R$1.163	TJLP	TJLP + 1,58%				1.169			1.109			48
Payable	USD 652		USD 577		USD		+ 3,64	%		(1.092	)		(1.272	)		(44	)

Net										77			(163	)		4			45							109		(4	)				(28	)


Swap TJLP vs. floating rate swap
Receivable		R$640		R$643	TJLP	TJLP + 0,95%				617			580			8
Payable	USD 375		USD 376		Libor	LIBOR - 1,14%				(594	)		(671	)		(5	)

Net										23			(91	)		3			37									(7	)				31


*		There are no fair value cash flows with maturity on the years of 2011, 2016, 2017 and 2018.


^a		With the exception of a US$ 685 million debt with monthly and quarterly interest and amortization payments.

Foreign Exchange cash flow hedge

In order to reduce the cask flow volatility associated with the currency mismatch between our revenues, mainly denominated in U.S. Dollars, and our disbursements and investments denominated in Brazilian Reais, we entered into foreign exchange swaps where the Company receives fixed rates in Brazilian Reais and pays fixed rates in U.S. Dollars.

In R$ million

Realized

Notional ($ million)

Unrealized Gain/Loss

Gain/Loss

VaR

Unrealized Gain/Loss by year

Flow

30-jun-09

31-mar-09

Index

Average rate

30-jun-09

31-mar-09

30-jun-09

2010

2011

2012

Brazilian Real fixed rate vs. USD fixed rate swap

Receivable

R$378

—

Fixed

6,95%

354

Payable

USD 190

—

USD

+ 0%

(348

)

Net

—

Protection program for the Euro denominated floating rate debt

In order to reduce cash flow volatility associated with a financing from KfW Bankengruppe indexed to Euribor, we entered into a swap where the cash flows in Euros are converted into cash flows in U.S. Dollars.

In R$ million

Realized

Notional ($ million)

Unrealized Gain/Loss

Gain/Loss

VaR

Unrealized Gain/Loss by year

Flow

30-jun-09

31-mar-09

Index

Average rate

30-jun-09

31-mar-09

30-jun-09

2009

2010

2011

EUR floating rate vs. USD floating rate swap

Receivable

EUR 6

EUR 7

EUR

Euribor + 0,875%

3,8

Payable

USD 7

USD 8

USD

Libor + 1,0425%

(13

)

(19

)

(2,9

)

Net

3,4

4,0

0,9

0,3

0,7

1,4

1,3

Protection program for the USD floating rate debt

In order to reduce the cash flow volatility associated to changes on the U.S. Dollar interest rate, Vale entered into a floating (Libor) to fix interest rate.

In R$ million

Realized

Notional ($ million)

Unrealized Gain/Loss

Gain/Loss

VaR

Unrealized Gain/Loss by year

Flow

30-jun-09

31-mar-09

Index

Average rate

30-jun-09

31-mar-09

30-jun-09

2009

2010

2011

Receivable

USD 200

USD

3M LIBOR

390

463

2,9

Payable

USD

4,795%a.a.

(411

)

(492

)

(10,3

)

Net

(21

)

(29

)

(7,4

)

1,1

)

Foreign Exchange protection program for Coal Fixed Price Sales

In order to reduce the volatility associated with the foreign exchange exposure of the cash flow from our coal fixed price sales, Vale purchased Australian Dollars forwards.

In R$ million

Average

Realized

Notional ($ million)

Strike

Unrealized Gain/Loss

Gain/Loss

VaR

Unrealized Gain/Loss by year

Flow

30-jun-09

31-mar-09

Buy/ Sell

(USD/AUD)

30-jun-09

31-mar-09

30-jun-09

2009

2010

2011

Forward

AUD 60

AUD 76

0,66

16,0

6,1

2,8

2,1

5,3

9,0

1,7

Commodities prices, input and costs risk

Vale is also exposed to several market risks associated to global commodities price volatilities.

Nowadays, derivatives transactions included in the portfolio related to commodities prices, input and costs include nickel, copper, natural gas, bunker oil and maritime freight (FFA) derivatives, all of them with the same purpose of mitigating the company’s cash flow volatility.

Nickel Strategic cash flow protection program

In order to protect the cash flow in 2009, Vale entered into hedging transactions for this year.

In R$ million

Average

Realized

Notional (ton)

Strike

Unrealized Gain/Loss

Gain/Loss

VaR

Unrealized Gain/Loss by year

Flow

30-jun-09

31-mar-09

Buy/ Sell

(USD/ton)

30-jun-09

31-mar-09

30-jun-09

2009

2010

2011

Forward

17.150

13.131

(73,1

)

(9,7

)

(73,1

)

Nickel Fixed Price Sales Program

Vale Inco Ltd. has a long position on future contracts in the London Metal Exchange (LME), with the purpose of maintaining its exposure to nickel price variation, regarding the fact that, in some cases, the commodity is sold at a fixed price to some customers. These postions were discontinued for 2009 due to the decision of protecting the cash flow for this year.

Nickel Purchase Protection Program

Vale Inco Ltd. has also short positions on the futures market in the LME, in order to minimize the risk of mismatch between the pricing on the costs of intermediate products and finished goods.


									In R$ million
							Average								Realized
	Notional (ton)						Strike		Unrealized Gain/Loss						Gain/Loss			VaR		Unrealized Gain/Loss by year
Flow	30-jun-09		31-mar-09		Buy/ Sell		(USD/ton)		30-jun-09			31-mar-09			30-jun-09			30-jun-09		2009			2010		2011

Nickel fixed price sales program
Futures		6.396		8.994		B		14.769,97		8			(111	)		(66	)		13		1			5		1,9

Nickel pruchases protection program
Futures		5.790		5.940		S		15.517,24		(6,9	)		4,3			(48,5	)		14		(6,9	)

Embedded Derivatives — Raw material and intermediate products purchase

In addition to the contracts mentioned above, Vale Inco has long positions of nickel and copper raw materials which have a price definition based on a commodity index, which implies, in practice, that this contract is treated as an embedded derivative.


									In R$ million
							Average								Realized
	Notional (ton)						Strike		Unrealized Gain/Loss						Gain/Loss			VaR		Unrealized Gain/Loss by year
Flow	30-jun-09		31-mar-09		Buy/ Sell		(USD/ton)		30-jun-09			31-mar-09			30-jun-09			30-jun-09		2009			2010	2011

Raw material purchase
Nickel forwards		728		1.414		B	11.798,00		(4,5	)		1,9			(1,9	)				(4,5	)
Copper forwards		1.890		3.327				4.510,00		(2,0	)		(2,0	)		(2,0	)				(2,0	)

Total										(6,4	)		(0,1	)		(3,9	)		2,4


Intermediate products purchase
Forwards		3.861		3.117		B		12.144,00		(16,2	)		3,5			46			5,5		(16,2	)

Embedded Derivatives — Energy purchase — Aluminum

The table below presents the aluminum embedded derivatives position originated from the energy supply contract between Albras and Eletronorte.

In R$ million

Average

Realized

Notional (ton)

Strike

Unrealized Gain/Loss

Gain/Loss

VaR

Unrealized Gain/Loss by year

Flow

30-jun-09

31-mar-09

Buy/ Sell

(USD/ton)

30-jun-09

31-mar-09

30-jun-09

2009

2010

2011

Call

200.228

2.773

5,1

3,0

Call

200.228

1.450

(118

)

(91

)

Total

(113

)

(88

)

—

(21

)

(62

)

(29

)

Copper Scrap Purchase Protection Program

Vale Inco Ltd. makes use of hedging to protect the price mismatch between the date of copper scrap purchase and the date of selling the finished good. The table below illustrates June open positions.

In R$ million

Average

Realized

Notional (ton)

Strike

Unrealized Gain/Loss

Gain/Loss

VaR

Unrealized Gain/Loss by year

Flow

30-jun-09

31-mar-09

Buy/ Sell

(USD/ton)

30-jun-09

31-mar-09

30-jun-09

2009

2010

2011

Futures

147

3.761,09

(0,1

)

(0,2

)

0,2

0,0

(0,1

)

Protection program of Natural Gas Program

Vale Inco Ltd. uses natural gas swap contracts to minimize the impact of price fluctuation of this input cost in the cash flow.

In R$ million

Average

Realized

Notional (GJ)

Strike

Unrealized Gain/Loss

Gain/Loss

VaR

Unrealized Gain/Loss by year

Flow

30-jun-09

31-mar-09

Buy/ Sell

(CAD/GJ)

30-jun-09

31-mar-09

30-jun-09

2009

2010

2011

Forwards

553.500

963.000

7,62

(3,8

)

(6,1

)

(7,6

)

0,3

(3,8

)

Bunker Oil Purchase Protection Program

Vale uses forward purchase and swaps to mitigate the impact of changes of bunker oil prices in the cash flow.

In R$ million

Average

Realized

Notional (ton)

Strike

Unrealized Gain/Loss

Gain/Loss

VaR

Unrealized Gain/Loss by year

Flow

30-jun-09

31-mar-09

Buy/ Sell

(USD/ton)

30-jun-09

31-mar-09

30-jun-09

2009

2010

2011

Forward

197.000

125.000

347

20,9

(1,4

)

3,9

7,7

13,3

7,6

Maritime Freight Hiring Protection Program

Vale uses FFA to reduce the impact of maritime freight price fluctuation in the company’s costs.

Average

Realized

In R$ million

Notional (days)

Strike

Unrealized Gain/Loss

Gain/Loss

VaR

Unrealized Gain/Loss by year

Flow

30-jun-09

31-mar-09

Buy/ Sell

(USD/day)

30-jun-09

31-mar-09

30-jun-09

2009

2010

2011

Forward

2.406

29.575

24,8

0,0

44,9

11,9

18,1

6,7

Sensitivity Analysis
Values in R$ million



Program	Instrument	Impact description	Scenario I			Scenario II			Scenario III			Scenario IV			Scenario V
Hedge for the Real denominated debt indexed to CDI	CDI vs. USD fixed rate swap	USD/BRL fluctuation		298,0			(1.604,0	)		2.199,9			(3.506,0	)		4.101,9
		USD interest rate inside Brazil variation					189,1			402,3			75,4			502,4
	CDI vs. USD floating rate swap	USD/BRL fluctuation		28,7			(173,1	)		230,4			(374,9	)		432,2
		USD interest rate inside Brazil variation					(6,2	)		60,9			(44,1	)		90,8
Hedge for the Real denominated debt indexed to TJLP	TJLP vs. USD fixed rate swap	USD/BRL fluctuation					(196,0	)		350,1			(469,0	)		623,2
		USD interest rate inside Brazil variation		77,1			26,8			122,8			(28,8	)		164,5
		Brazilian interest rate fluctuation					(11,9	)		180,6			(89,0	)		302,4
	TJLP vs. USD floating rate swap	USD/BRL fluctuation					(125,1	)		171,6			(273,5	)		320,0
		USD interest rate inside Brazil variation		23,3			(35,1	)		74,2			(102,3	)		119,0
		Brazilian interest rate fluctuation					(55,3	)		119,8			(120,0	)		239,7
		USD/BRL fluctuation					(81,1	)		93,0			(168,2	)		180,1
Foreign exchange cash flow hedge	Brazilian Real fixed rate vs. USD fixed rate swap	USD interest rate inside Brazil variation		5,9			0,4			11,4			(5,3	)		16,6
		Brazilian interest rate fluctuation					(10,3	)		23,4			(25,4	)		42,2
		EUR/USD fluctuation					(0,8	)		7,5			(4,9	)		11,7
Hedge for Euro denominated floating rate debt	EUR floating rate vs. USD floating rate swap	Euribor variation		3,4			3,4			3,4			3,3			3,4
		USD Libor variation					3,4			3,4			3,4			3,4
Hedge for the USD denominated floating rate debt	USD floating rate vs. USD fixed rate swap	USD Libor variation		(20,7	)		(23,1	)		(18,4	)		(25,4	)		(16,2	)
Foreign Exchange Hedge for coal fixed price sales program	Purchase Australian dollars forwards	USD/AUD fluctuation		16,0			0,3			31,7			(15,4	)		47,4
Nickel strategic hedging program	Sale of nickel forward contracts	Nickel price fluctuation		(73,1	)		(201,3	)		55,1			(329,6	)		183,3
Nickel fixed price sales program	Purchase of nickel future/forward contracts	Nickel price fluctuation		7,9			(35,4	)		51,1			(78,6	)		94,4
Nickel purchase protection program	Sale of nickel future/forward contracts	Nickel price fluctuation		(6,9	)		(54,9	)		41,1			(103,0	)		89,2
Embedded derivatives — Raw material purchase	Embedded derivatives - Raw material purchase	Nickel and copper price fluctuation		(6,4	)		(16,6	)		3,7			(26,8	)		13,9
Embedded derivatives — Intermediate products purchase	Embedded derivatives - Intermediate products purchase	Nickel price fluctuation		(16,2	)		(33,5	)		1,1			(50,8	)		18,4
Embedded derivatives -Energy purchase	Embedded derivatives - Energy purchase - Aluminum Options	Aluminum price fluctuation		(112,6	)		(227,2	)		(25,6	)		(328,9	)		9,2
Copper scrap purchase protection	Sale of copper future/forward contracts	Copper price fluctuation		(0,1	)		(0,3	)		0,0			(0,4	)		0,1
Natural gas hedge	Purchase of natural gas forward contracts	Natural gas price fluctuation		(3,8	)		(3,0	)		(4,6	)		(2,2	)		(5,4	)
Bunker Oil purchase protection program	Purchase Bunker Oil forwards	Bunker Oil price fluctuation		20,9			(26,4	)		68,1			(73,7	)		115,4
Maritime freight hiring protection program	Purchase of forward freight agreements	Freight price fluctuation		24,8			(15,1	)		64,7			(55,0	)		104,6

Credit risk on financial trades and financial institutions ratings

Derivatives transactions are executed with financial institutions that we consider to have a very good credit quality. The exposure limits to financial institutions are proposed annually for the Executive Risk Committee and approved by the Executive Board. The financial institutions credit risk tracking is performed making use of a credit risk valuation methodology which considers, among other information, published ratings provided by international rating agencies. In the table below, we present the ratings in foreign currency published by Moody’s e S&P agencies for the financial institutions that we had outstanding trades as of June 30^th. 2009.


Parent Company	Vale’s Counterparty	Moody’s*	S&P*

Banco do Brasil S.A.	Banco do Brasil S.A.	A1	BBB-
Banco Bradesco S.A.	Banco Bradesco S.A.	A1	BBB
Citigroup Inc.	Citigroup Inc.	A3	A
Banco Votorantim S.A.	Banco Votorantim S.A.	Baa1	BB+
HSBC Holdings plc	HSBC Holdings plc	Aa2	AA-
JP Morgan Chase & Co.	JP Morgan Chase & Co.	Aa3	A+
Banco Santander S.A. (Spain)	Banco Santander S.A. (Spain)	Aa1	AA
HSBC Holdings plc	HSBC Bank Brasil S.A.	A1	BBB-
Banco Itaú Unibanco S.A.	Banco Itaú Unibanco S.A.	A1	—
JP Morgan Chase & Co.	JP Morgan Chase Bank NA	Aa1	AA-
Standard Bank	Standard Bank of South África Ltd	Baa1	—
BNP Paribas	BNP Paribas	Aa1	AA
Mitsui Co. Ltd**	Mitsui Bussan	A2	A+


*		For Brazilian banks it was considered the global rating of local currency deposits

**		Parent company’s rating

Market Curves

To build the curves used on the pricing of the derivatives, public data from BM&F, Central Bank of Brazil, London Metals Exchange (LME) and proprietary data from Thomson Reuters, Bloomberg L.P. and Enerdata were used.

1. Commodities

Aluminum


Maturity	Price (USD/ton)		Maturity	Price (USD/ton)		Maturity	Price (USD/ton)
SPOT		1.596	ABR10		1.704	MAR11		1.801
JUN09		1.602	MAI10		1.712	ABR11		1.809
JUL09		1.614	JUN10		1.723	MAI11		1.817
AGO09		1.624	JUL10		1.732	JUN11		1.825
SET09		1.636	AGO10		1.741	JUL11		1.833
OUT09		1.645	SET10		1.752	AGO11		1.691
NOV09		1.655	OUT10		1.760	SET11		1.682
DEZ09		1.666	NOV10		1.769	OUT11		1.710
JAN10		1.675	DEZ10		1.777	NOV11		1.719
FEV10		1.684	JAN11		1.785	DEZ11		1.728
MAR10		1.695	FEV11		1.793

Nickel


Maturity	Price (USD/ton)		Maturity	Price (USD/ton)		Maturity	Price (USD/ton)
SPOT		15.291	MAR10		15.446	DEZ10		15.456
JUL09		15.304	ABR10		15.454	JAN11		15.452
AGO09		15.336	MAI10		15.461	FEV11		15.448
SET09		15.366	JUN10		15.466	MAR11		15.445
OUT09		15.389	JUL10		15.465	ABR11		15.442
NOV09		15.405	AGO10		15.465	MAI11		15.439
DEZ09		15.421	SET10		15.465	JUN11		15.436
JAN10		15.430	OUT10		15.461	JUL11		15.433
FEV10		15.438	NOV10		15.458	AGO11		15.430

Copper

Maturity

Price (USD/lb)

Maturity

Price (USD/lb)

Maturity

Price (USD/lb)

SPOT

2,24

JUL09

2,25

SET09

2,25

Bunker oil


Maturity	Price (USD/ton)		Maturity	Price (USD/ton)		Maturity	Price (USD/ton)
SPOT		396,50	JAN10		402,25	AGO10		416,00
JUL09		396,50	FEV10		402,25	SET10		416,00
AGO09		392,55	MAR10		402,25	OUT10		422,25
SET09		392,00	ABR10		409,00	NOV10		422,25
OUT09		393,25	MAI10		409,00	DEZ10		422,25
NOV09		394,25	JUN10		409,00
DEZ09		398,40	JUL10		416,00

Aluminum — Volatility


Maturity	Vol (% p.a.)		Maturity	Vol (% p.a.)		Maturity	Vol (% p.a.)
VOLSPOT		35,67	VOL9M		30,55	VOL4Y		24,51
VOL1M		35,67	VOL1Y		29,61	VOL5Y		23,92
VOL3M		33,96	VOL2Y		26,99	VOL7Y		23,74
VOL6M		31,82	VOL3Y		25,51	VOL10Y		23,74

2. Rates

USD-Brazil Interest Rate


Maturity	Rate (% p.a.)		Maturity	Rate (% p.a.)		Maturity	Rate (% p.a.)
30/06/2009		1,31	03/10/2011		3,54	01/04/2014		5,18
01/09/2009		1,31	02/01/2012		3,71	01/07/2014		5,37
01/10/2009		1,39	02/04/2012		3,96	01/10/2014		5,55
04/01/2010		1,67	02/07/2012		4,13	02/01/2015		5,71
01/04/2010		1,99	01/10/2012		4,28	01/04/2015		5,81
01/07/2010		2,18	02/01/2013		4,42	04/01/2016		6,08
01/10/2010		2,48	01/04/2013		4,53	02/01/2017		6,53
03/01/2011		2,77	01/07/2013		4,70	02/01/2018		6,97
01/04/2011		3,04	01/10/2013		4,82	02/01/2019		7,27
01/07/2011		3,29	02/01/2014		5,02	02/01/2020		7,52

US Interest Rate


Maturity	Rate (% p.a.)		Maturity	Rate (% p.a.)		Maturity	Rate (% p.a.)
USD1D		0,25	USD9M		0,77	USD5Y		3,06
USD1M		0,42	USD1Y		0,89	USD7Y		3,55
USD2M		0,55	USD2Y		1,55	USD10Y		3,95
USD3M		0,65	USD3Y		2,19
USD6M		0,67	USD4Y		2,69

TJLP


Maturity	Rate (% p.a.)		Maturity	Rate (% p.a.)		Maturity	Rate (% p.a.)
30/06/2009		6,25	01/04/2011		7,12	01/04/2013		7,62
01/07/2009		6,25	01/07/2011		7,24	01/07/2013		7,62
01/10/2009		6,32	01/10/2011		7,33	01/10/2013		7,61
01/01/2010		6,44	01/01/2012		7,41	01/01/2014		7,60
01/04/2010		6,56	01/04/2012		7,48	01/04/2014		7,59
01/07/2010		6,70	01/07/2012		7,54	01/07/2014		7,60
01/10/2010		6,85	01/10/2012		7,58
01/01/2011		6,99	01/01/2013		7,61

BRL Interest Rate


Maturity	Rate (% p.a.)		Maturity	Rate (% p.a.)		Maturity	Rate (% p.a.)
30/06/2009		8,96	01/07/2010		9,24	02/01/2013		11,77
01/07/2009		8,96	03/01/2011		10,03	01/04/2013		11,83
03/08/2009		9,01	01/07/2011		10,66	01/07/2013		11,93
01/09/2009		8,88	02/01/2012		11,06	01/10/2013		11,98
01/10/2009		8,82	02/04/2012		11,24	02/01/2014		12,17
04/01/2010		8,79	02/07/2012		11,42	02/01/2017		12,56
01/04/2010		8,96	01/10/2012		11,61

3. Currencies

EUR


Maturity	EUR/USD		Maturity	EUR/USD		Maturity	EUR/USD
EURSPOT		1,42	EUR9M		1,41	EUR4Y		1,43
EUR1M		1,41	EUR1Y		1,41	EUR5Y		1,43
EUR3M		1,41	EUR2Y		1,42	EUR7Y		1,43
EUR6M		1,41	EUR3Y		1,42	EUR10Y		1,42

AUD


Maturity	AUD/USD		Maturity	AUD/USD		Maturity	AUD/USD
AUDSPOT		1,24	AUD9M		1,25	AUD4Y		1,34
AUD1M		1,24	AUD1Y		1,26	AUD5Y		1,36
AUD3M		1,24	AUD2Y		1,28	AUD7Y		1,40
AUD6M		1,25	AUD3Y		1,31	AUD10Y		1,46

Currencies — Ending rates as of June 30, 2009


USD/CAD			1,1622			USD/BRL			1,9516			EUR/USD			1,4039

Summary the movement of our derivatives according to the period present as follows:


	Consolidated
	Quarter
	2Q/09
	Currencies\											Products by
	Interest rates			Bunker Oil and								aluminum
	(libor)			Natural Gas			Gold		Freight			area		Copper			Nickel			Platinum		Total
Gains / (losses) unrealized on 03/31/09		(1,301,037	)		(7,467	)		—		—			—		(192	)		40,091			—		(1,268,605	)
Payments (receipt) financial		(209,431	)		1,360			—		(10,129	)		—		263			80,958			—		(136,979	)
Financial expenses, net (1)		1,935,472			26,065			—		72,151			—		(237	)		(209,616	)		—		1,823,835
Monetary variations, net (2)		6,532			(559	)		—		(2,578	)		—		30			(5,904	)		—		(2,479	)

Gains / (losses) unrealized on 06/30/09		431,536			19,399			—		59,444			—		(136	)		(94,471	)		—		415,772


	1Q/09
	Currencies\										Products by
	Interest rates			Bunker Oil and							aluminum
	(libor)			Natural Gas			Gold		Freight		area		Copper			Nickel			Platinum		Total
Gains / (losses) unrealized on 12/31/08		(1,336,013	)		(4,358	)		—		—		—		626			79,185			—		(1,260,560	)
Payments (receipt) financial		(45,396	)		4,787			—		—		—		(491	)		(8,857	)		—		(49,957	)
Financial expenses, net (1)		77,613			(7,931	)		—		—		—		(321	)		(29,476	)		—		39,885
Monetary variations, net (2)		2,759			35			—		—		—		(6	)		(761	)		—		2,027

Gains / (losses) unrealized on 03/31/09		(1,301,037	)		(7,467	)		—		—		—		(192	)		40,091			—		(1,268,605	)


	2Q/08
	Currencies\										Products by
	Interest rates			Bunker Oil and							aluminum
	(libor)			Natural Gas		Gold			Freight		area			Copper			Nickel			Platinum			Total
Gains / (losses) unrealized on 03/31/08		1,048,035			—		(57,777	)		—		(434,408	)		(426,814	)		10,902			(54,095	)		85,843
Payments (receipt) financial		(226,227	)		—		17,344			—		103,890			123,673			(23,759	)		17,098			12,019
Financial expenses, net (1)		1,139,831			—		2,013			—		2,119			6,002			72,059			(2,082	)		1,219,942
Monetary variations, net (2)		(49,626	)		—		4,410			—		27,789			35,168			(1,783	)		4,612			20,570

Gains / (losses) unrealized on 06/30/08		1,912,013			—		(34,010	)		—		(300,610	)		(261,971	)		57,419			(34,467	)		1,338,374


	Accumulated
	06/30/09
	Currencies\											Products by
	Interest rates			Bunker Oil and								aluminum
	(libor)			Natural Gas			Gold		Freight			area		Copper			Nickel			Platinum		Total
Gains / (losses) unrealized on 12/31/08		(1,336,013	)		(4,358	)		—		—			—		626			79,185			—		(1,260,560	)
Payments (receipt) financial		(254,827	)		6,147			—		(10,129	)		—		(228	)		72,101			—		(186,936	)
Financial expenses, net (1)		2,013,085			18,134			—		72,151			—		(558	)		(239,092	)		—		1,863,720
Monetary variations, net (2)		9,291			(524	)		—		(2,578	)		—		24			(6,665	)		—		(452	)

Gains / (losses) unrealized on 06/30/09		431,536			19,399			—		59,444			—		(136	)		(94,471	)		—		415,772


	06/30/08
	Currencies\										Products by
	Interest rates			Bunker Oil and							aluminum
	(libor)			Natural Gas		Gold			Freight		area			Copper			Nickel			Platinum			Total
Gains / (losses) unrealized on 12/31/07		1,107,744			—		(64,608	)		—		(172,569	)		(332,222	)		73,557			(42,722	)		569,180
Payments (receipt) financial		(273,986	)		—		37,431			—		146,223			228,016			(22,982	)		32,920			147,622
Financial expenses, net (1)		1,119,541			—		(11,969	)		—		(303,857	)		(196,234	)		11,015			(29,530	)		588,966
Monetary variations, net (2)		(41,286	)		—		5,136			—		29,593			38,469			(4,171	)		4,865			32,606

Gains / (losses) unrealized on 06/30/08		1,912,013			—		(34,010	)		—		(300,610	)		(261,971	)		57,419			(34,467	)		1,338,374


(1)		Comprise amounts related to hedge accounting which does not affect the financial results, as follows: R$7,356, R$(1,416), R$20,951, R$5.940 and R$(63,964), 2Q09, 1Q09, 2Q08, June 30, 2009 and June 30, 2008, respectively.

		These figures were recorded inside shareholders’ equity in the line “unrealized results of market value” net of income tax and in the proportion of our interest, when applicable.

(2)		Include exchange variance reclassification into equity: R$(648), R$(447) and R$(1,095), 2Q09, 1Q09 and June 30, 2009, respectively.


	Parent Company
	06/30/09
	Currencies\ Interest rates
	(libor)			Freight			Gold		Copper		Total
Gains / (losses) unrealized on 12/31/08		(1,078,850	)		—			—		—		(1,078,850	)
Payments (receipt) financial		(212,642	)		(4,003	)		—		—		(216,645	)
Financial expenses, net		1,560,642			19,296			—		—		1,579,938
Monetary variations, net		(588	)		(478	)		—		—		(1,066	)

Gains / (losses) unrealized on 06/30/09		268,562			14,815			—		—		283,377


	06/30/08
	Currencies\ Interest rates
	(libor)			Freight		Gold			Copper			Total
Gains / (losses) unrealized on 12/31/07		1,064,545			—		(45,256	)		(1,923	)		1,017,366
Payments (receipt) financial		(260,118	)		—		26,156			7,526			(226,436	)
Financial expenses, net		1,085,862			—		(8,412	)		(28,882	)		1,048,568
Monetary variations, net		(110,837	)		—		3,507			1,831			(105,499	)

Gains / (losses) unrealized on 06/30/08		1,779,452			—		(24,005	)		(21,448	)		1,733,999

The due dates of the consolidated financial instruments are as follows:



Currencies\ Interest rates (LIBOR)		December 2019
Fuel Oil		April 2010
Natural Gas		October 2009
Freight		September 2009
Copper		July 2009
Nickel		May 2011

6.25- Selling, Administrative, Other Operating Expenses and Results from the Sale of Investments


	Consolidated										Parent Company
	Quarter						Accumulated				Accumulated
	2Q/09		1Q/09		2Q/08		06/30/09		06/30/08		06/30/09		06/30/08
Administrative
Personnel		154,396		159,907		176,337		314,303		347,544		173,062		198,805
Services (consulting, infrastructure and others)		87,439		84,253		94,174		171,692		179,141		86,720		88,353
Advertising and publicity		49,185		31,999		65,760		81,184		100,108		74,106		92,922
Depreciation		87,547		88,759		68,881		176,306		148,699		143,147		116,961
Travel expenses		5,646		13,065		16,869		18,711		27,710		7,157		17,293
Rents and taxes		14,559		23,560		13,161		38,119		22,553		15,237		15,241
Indigenours comunities		4,763		4,942		6,256		9,705		12,082		9,120		9,352
Others		35,054		38,559		85,828		73,613		146,122		35,233		56,561
*Sales ()**		75,054		129,446		104,278		204,500		247,434		12,922		20,747

Total		513,643		574,490		631,544		1,088,133		1,231,393		556,704		616,235


(*)		Represents the effects of fluctuations in commodity prices of copper on its receivables, expenses with offices abroad and provision for claims settlement.


	Consolidated															Parent Company
										Accumulated						Accumulated
	2Q/09			1Q/09			2Q/08			06/30/09			06/30/08			06/30/09			06/30/08
Other operating expenses (income), net
Provisions for contingencies		14,351			—			(231,952	)		14,351			(240,649	)		24,836			(240,649	)
Provision for loss on ICMS credits		29,397			73,213			192,830			102,610			241,954			88,396			46,609
Provision for profit sharing		50,929			67,517			79,568			118,446			127,235			65,344			55,661
Fundação Vale do Rio Doce — FVRD		30,634			12,656			18,094			43,290			31,289			43,290			31,289
Recoverable taxes — PIS and COFINS		(78,066	)		(66,326	)		(50,978	)		(144,392	)		(114,857	)		(144,392	)		(114,857	)
Provision for material / inventories		8,787			—			—			8,787			—			12,409			—
Adjust the value of realization of stock		—			112,535			—			112,535			—			—			—
Disconnection		49,869			91,782			—			141,651			—			33,914			—
Stopped of plant and Idle capacity		524,028			375,552			—			899,580			—			482,885			—
Others		105,026			217,586			141,803			322,612			461,856			(30,412	)		111,190

Total		734,955			884,515			149,365			1,619,470			506,828			576,270			(110,757	)


	Consolidated
	Quarter						Accumulated (to review)
Results on sale of investments	2Q/09		1Q/09		2Q/08		06/30/09		06/30/08
Jubilee Mines N.L.		—		—		—		—		138,879
Usinas siderurgicas de Minas Gerais S.A. — USIMINAS		287,814		—		—		287,814		—
Others		7,908		—		—		7,908		—

Total		295,722		—		—		295,722		138,879

6.26- Subsequent Events

In July, 2009, we issued R$1,873 million Mandatorily Convertible Notes due 2012 (R$ 1,864 million, net of commissions). The Notes bear interest at 6.75% per year payable quarterly and additional interest which will be payable based on the net amount of cash distribution paid to ADS holders.

In July, 2009 Vale signed a definitive agreement with Suzano Papel e Celulose to sale part of our forest assets to Suzano, a total area of 84.7 thousand hectares, including preservation areas and eucalyptus plantation in Maranhão (Brazil), for approximately R$235 million.

In July 2009, Vale signed an agreement with ThyssenKrupp Steel AG to increase our stake in ThyssenKrupp CSA Siderúrgica do Atlântico Ltda. (CSA) to 26.87%, from the current 10% interest, through a capital increase of EUR$965 million (approximately R$2.7 billion). This investment decision is still subject to, among other conditions, the approval of the Board of Directors of both Vale and ThyssenKrupp.

7- Report of the Independent Accountants on Limited Review


		Pricewaterhousecoopers
		Rua da Candelária 65 11°, 14°, 15° e 16°
		Cjs. 1302 a 1304
		2009 1-020 Rio de Janeiro RJ - Brasil
		Calxa Postal 949
(A free translation of the original in Portuguese)		Telefone (21) 3232-6112
		Fax (21) 2516-6319
		pwc.com/br

Report of Independent Accountants
on the Limited Review

To the Board of Directors and Stockholders
Vale S.A.

1		We have carried out a limited review of the Quarterly Information — ITR (individual and consolidated) of Vale S.A. (formerly denominated Companhia Vale do Rio Doce) and its subsidiaries, for the quarter ended June 30, 2009, comprising the balance sheets and the statements of operations, changes in stockholders’ equity, cash flows and value added, the report of performance and notes, prepared under the responsibility of the Company’s management.

2		Our review was carried out in accordance with specific standards established by the Institute of Independent Auditors of Brazil (“Instituto de Auditores Independentes do Brasil – IBRACON”), in conjunction with the Federal Accounting Council (“Conselho Federal de Contabilidade — CFC”), and mainly comprised: (a) inquiries of and discussions with management responsible for the accounting, financial and operating areas of the Company with regard to the main criteria adopted for the preparation of the quarterly information and (b) a review of the relevant information and of the subsequent events which have, or could have, significant effects on the financial position and operations of the Company and its subsidiaries.

3		Based on our limited review, we are not aware of any significant adjustments which should be made to the quarterly information referred to above for it to be in accordance with the accounting practices adopted in Brazil, as required by the regulations of the Brazilian Securities Commission (“Comissāo de Valores Mobiliários — CVM”) specifically applicable to the preparation of quarterly information.

4		The Quarterly Information (ITR) mentioned in the first paragraph also includes comparative accounting information for the results for the quarters ended March 31, 2009, and June 30, 2008, obtained from the corresponding Quarterly Information (ITR) for those quarters. The limited reviews of the Quarterly Information — ITR for the quarters ended March 31, 2009, and June 30, 2008, were conducted by other independent auditors, who issued their reports, dated May 6, 2009, and August 6, 2008, respectively, both including division of responsibilities paragraphs regarding the review of financial information of certain investees of Vale S.A.

Vale S.A.

5		As mentioned in Note 6.2, due to changes in the accounting practices adopted in Brazil in 2008, the statements of income, of changes in stockholders’ equity, of cash flows and value added relating to the quarters ended June 30, 2008, presented for comparative purposes, were adjusted in relation to those originally disclosed and are being revised, as prescribed by NPC 12 — Accounting Practices. Changes in Accounting Estimates and Correction of Errors (“Práticas Contabeis, Mudanças has Estimativas Contábeis e Correçāo de Erros”), as approved by the CVM Deliberation number 506/06, in order to enable comparability of the periods presented. In connection with our review of the quarterly information relating to the quarter ended June 30, 2009, we also reviewed the adjustments arising from the changes in accounting practices disclosed in Note 6.2. We are not aware that those adjustments are inadequate or have not been appropriately recognized, taking into consideration all material aspects. We have been engaged solely to review the adjustments described in Note 6.2 and not the review and neither to apply any other form of procedure on the quarterly information for the quarter ended June 30, 2008, and, therefore, we do not express any form of conclusion on those quarterly information.

		Rio de Janeiro, July 29, 2009

pricewaterhouseCoopers
Auditores Independentes
CRC 2SP000160/O-5 “F” RJ

Marcos Donizete Panassol
Contador CRC 1SP155975/O-8 “S” RJ

8- Attachment I — Statement of Investments in Subsidiaries and Jointly-Controlled Companies



Period ended June 30, 2009		In millions of reais


					Assets
								Non-current				Liabilities and stockholders’ equity
										Investments,				Non-current					Accounting information - (to review)
										property plant				Long-term,					Statement of income
										and equipment				deferred income		Adjusted					Cost of			Operating			Income tax
	Participation (%)									and deferred				and minority		stockholders’					products and			income			and Social			Adjusted net
	Total		Voting		Circulante		Long-term			charges		Current		interest		equity			Net revenues		services			(expenses)			contribution			income (loss)
Jointly-controlled companies
ALBRAS — Alumínio Brasileiro S.A.		51,00		51,00		428.818		1.371.538			1.072.004		427.550		473.597		1.971.213			687.366		(726.064	)		70.640			(10.463	)		21.479
ALUNORTE — Alumina do Norte do Brasil S.A.		57,03		61,74		821.791		257.726			5.334.691		328.258		1.650.505		4.435.445			1.312.565		(1.439.345	)		260.977			(45.569	)		88.628
Brasilux S.A.		100,00		100,00		5.005		32.059			—		5.132		—		31.932			—		—			(5.882	)		(11	)		(5.893	)
Cadam S.A		61,48		100,00		133.723		65.064			98.430		23.805		40.882		232.530			76.311		(60.092	)		(36.609	)		—			(20.390	)
Companhia Paulista de Ferro Ligas		100,00		100,00		159.938		106.693			1.392		153.056		115.392		(425	)		—		—			9.519			(3.213	)		6.306
Companhia Portuária Baia de Sepetiba — CPBS		100,00		100,00		180.025		9.525			195.453		138.529		1.428		245.046			128.411		(50.951	)		1.342			(25.464	)		53.338
CVRD Overseas Ltd.		100,00		100,00		2.015.623		237.219			1.320.194		1.598.920		39.169		1.934.947			1.614.570		(1.322.475	)		(379.784	)		—			(87.689	)
Docepar S.A.		100,00		100,00		19.795		122.054			149		33.563		102.117		6.318			—		—			7.779			—			7.779
Diamond Coal Ltd		100,00		100,00		13.432		—			908.036		13.413		213.495		694.560			—		—			—			—			—
Ferrovia Centro — Atlântica S.A.		100,00		100,00		234.569		125.116			1.688.362		158.549		1.982.131		(92.633	)		339.626		(330.413	)		(30.410	)		(79	)		(21.276	)
Ferrovia Norte-Sul S.A.		100,00		100,00		58.084		2.065			1.728.332		495.833		—		1.292.648			49.036		(20.211	)		(5.583	)		(6.646	)		16.596
Florestas Rio Doce S.A.		99,90		100,00		10.654		15.534			3.719		5.172		2.897		21.838			—		—			718			80			798
Green Minerals Resources Inc		100,00		100,00		59.190		—			2.897.356		21.645		967.247		1.967.654			—		—			(6.742	)		—			(6.742	)
Mineração Tacumã Ltda.		100,00		100,00		331		—			1.697.207		18.543		1.788.341		(109.346	)		—		—			(21.686	)		—			(21.686	)
Minerações Brasileiras Reunidas S.A. — MBR (a)		92,99		92,99		181.496		112.925			6.204.055		891.955		1.255.481		4.351.040			—		(79.500	)		(129.868	)		(29.156	)		(238.524	)
Para Pigmentos S.A		86,17		85,57		79.377		60.368			58.306		79.777		179.415		(61.141	)		55.964		(39.746	)		(57.500	)		(5.747	)		(47.029	)
Rio Doce Manganése Norway AS		100,00		100,00		160.618		—			51.247		47.683		6.591		157.591			101.141		(78.041	)		(52.828	)		—			(29.728	)
Salobo Metais S.A.		100,00		100,00		290.531		—			1.622.704		56.355		1.439.727		417.153			—		—			—			—			—
Urucum Mineração S.A.		100,00		100,00		280.924		11.777			55.528		56.815		123.451		167.963			75.520		(23.144	)		(40.710	)		(5.242	)		6.424
Vale Austrália Pty Ltd.		100,00		100,00		391.549		253.069			2.199.058		243.998		1.719.251		880.427			504.016		(347.815	)		(202.373	)		(33.474	)		(79.646	)
Vale Inco		100,00		100,00		6.163.928		426.643			47.034.020		3.276.565		38.882.813		11.465.213			4.389.021		(4.018.657	)		(1.513.420	)		474.671			(668.385	)
Vale International S.A.		100,00		100,00		27.098.250		54.856.124			47.108.999		13.712.122		47.641.274		67.709.977			12.212.189		(11.670.521	)		(4.941.792	)		(53.677	)		(4.453.801	)
Vale Manganês S.A.		100,00		100,00		1.188.583		112.938			360.208		376.618		187.104		1.098.007			291.338		(175.081	)		(31.915	)		(2.590	)		81.752
Vale Manganese France		100,00		100,00		276.325		(821	)		97.877		133.461		9.549		230.371			85.522		(89.875	)		(21.807	)		778			(25.382	)
Vale Overseas Ltd.		100,00		100,00		237.868		11.227.200			—		237.653		11.227.202		213			—		—			213			—			213
Valesul Alumínio S.A (a)		100,00		100,00		161.057		90.241			514.160		73.664		40.170		651.624			111.266		(104.131	)		(11.757	)		—			(4.622	)

Jointly-controlled companies
Baovale Mineração S.A.		50.00		100.00		31,094		26			56,864		7,768		—		80,215			17,553		(2,272	)		(12,331	)		(1,983	)		967
California Steel Industries , Inc.		50.00		50.00		605,533		—			522,596		90,654		460,170		577,305			554,056		(516,469	)		(131,940	)		39,185			(55,168	)
Com panhia C oreano-Brasileira de Pelotização — KOBR ASCO		50.00		50.00		219,821		22,953			241,775		64,951		99,699		319,899			66,018		(6,164	)		34,542			(29,295	)		65,101
Com panhia H isp ano-Brasileira de Pelotiz ação — HISPANOB RÁS		50.89		51.00		218,723		49,249			133,456		150,366		46,481		204,581			276		(1	)		(32,932	)		178			(32,479	)
Com panhia Ítalo-Brasileira de Pelotização — IT ABRAS CO		50.90		51.00		118,884		55,744			192,070		4,203		80,686		281,809			12,938		(5,562	)		10,979			(4,125	)		14,230
Com panhia N ipo-Brasileira de Pelotização — NIBR ASCO		51.00		51.11		150,765		65,375			394,695		1,217		73,013		536,605			48,545		(13,270	)		10,642			(12,991	)		32,926
Minas da Serra Geral S.A. — MSG		50.00		50.00		41,554		23,792			56,210		2,241		19,898		99,417			8,567		(4,897	)		1,332			(1,360	)		3,642
Mineraç ão R io do Norte S.A.		40.00		40.00		189,853		621,807			869,373		572,446		378,605		729,982			422,900		(249,027	)		31,738			(68,328	)		137,283
MRS Logística S.A. (a)		41.50		37.86		937,474		708,893			2,879,354		933,604		1,841,806		1,750,311			983,516		(573,851	)		(62,466	)		(112,653	)		234,546
Samarco M ineração S.A.		50.00		50.00		1,052,694		436,594			3,613,998		1,901,532		1,966,734		1,235,020			1,136,020		(461,983	)		79,419			(163,971	)		589,485
Teal Minerals		50.00		50.00		150,541		—			756,611		233,836		222,491		450,825			—		—			—			—			^-

Observances:

(a)

Includes direct and indirect participation.

Additional information of the main operational investee companies are available on the Vale website www.vale.com, investor relations.

B- Additional Information

9- Cash generation (to review)

Consolidated operating cash generation measured by EBITDA (earnings before financial results, equity in subsidiaries, income taxes, depreciation, amortization and depletion, increased by dividends received) was R$8,909,912 as of June 30,2009 against R$17,111,208 as of June 30, 2008, representing a decrease of 48.0%.

EBITDA is not a BR GAAP measure and does not represent the expected cash flow for the reporting periods and, therefore, should not be considered as an alternative measure to net income (loss), as an indicator of operating performance or as an alternative to cash flow as a liquidity source.

Our definition of EBITDA may not be comparable with EBITDA as defined by other companies.

EBITDA — Consolidated


	Quarter (Unaudited)									Accumulated (to review)
	2Q/09			1Q/09			2Q/08			06/30/09			06/30/08
Operating profit — EBIT		2.189.568			4.148.839			9.200.013			6.338.407			14.524.912
Depreciation / amortization of goodwill		1.253.422			1.296.765			1.250.502			2.550.187			2.563.430

		3.442.990			5.445.604			10.450.515			8.888.594			17.088.342
Dividends received		21.318			—			22.866			21.318			22.866

EBITDA (LAJIDA)		3.464.308			5.445.604			10.473.381			8.909.912			17.111.208

Depreciation / amortization of goodwill		(1.253.422	)		(1.296.765	)		(1.250.502	)		(2.550.187	)		(2.563.430	)
Dividends received		(21.318	)		—			(22.866	)		(21.318	)		(22.866	)
Equity Results		50.021			13.450			(266.767	)		63.471			(1.392.591	)
Profit on sale of investment		295.722			—			—			295.722			138.879
Financial results, net		2.574.281			(361.256	)		1.765.976			2.213.025			(2.946.024	)
Income tax and social contribution		(3.533.597	)		(757.982	)		(2.571.182	)		(4.291.579	)		(3.241.065	)
Minority interests		(109.343	)		107.852			(222.577	)		(1.491	)		(258.230	)

Net income		1.466.652			3.150.903			7.905.463			4.617.555			6.825.881

Consolidated EBITDA by segment


	EBITDA
	Quarter (Unaudited)								Accumulated (to review)
	2Q/09			1Q/09			2Q/08		06/30/09			06/30/08
Segments
Ferrous minerals		2.852.898			5.196.299			7.173.376		8.049.197			10.573.410
Non-ferrous minerals		854.349			128.341			2.668.125		982.690			5.406.320
Logistics		280.454			120.993			251.213		401.447			564.573
Steel		1.766			(32.523	)		82.364		(30.757	)		103.966
Others		(525.159	)		32.494			298.303		(492.665	)		462.939

		3.464.308			5.445.604			10.473.381		8.909.912			17.111.208

10- Management’s Discussion and Analysis of the Operational Performance in June 30, 2009 (to review)

In analyzing this information, some general aspects should be considered, as follows:

On June 30, 2009, about 93% of consolidated gross revenue and 40% of consolidated total costs are linked to currencies other than

Brazilian reais. Consequently, the exchange rate fluctuations have a significant impact on net income.

The average dollar rate increased by 29.2% between periods (R$2.1921 as of June 30, 2009 against R$1.6966 as of June 30, 2008), And the final rate increased by 22,6% (R$1.9516 as of June 30, 2009 against R$1.5919 as of June 30, 2008).

The Consolidated Trade Balance performance was as follows:


	In US$ million
	Quarter (Unaudited)									Accumulated (to review)
	2Q/09			1Q/09			2Q/08			06/30/09			06/30/08
Exports		3.305			3.339			3.886			6.644			6.900
Imports		(185	)		(271	)		(297	)		(456	)		(573	)

		3.120			3.068			3.589			6.188			6.327

10.1- Management’s Discussion and Analysis of the Operational Performance of Consolidated

10.1.1- Sales revenues


	In thousands of metric tons (except railroad transportation)
	Quarter (Unaudited)						Accumulated (to review)
	2Q/09		1Q/09		2Q/08		06/30/09		06/30/08
Iron ore		50.442		49.993		67.684		100.435		132.473
Pellets (*)		4.809		3.342		10.981		8.151		20.837

		55.251		53.335		78.665		108.586		153.310

Manganese		297		60		301		357		447
Ferroalloys		71		53		125		124		248

Copper concentrated		108		110		124		218		217
Finished copper (Nickel co-product)		21		33		36		54		71
Nickel		70		59		69		129		135
Potash		192		105		181		297		339
Kaolin		193		179		337		372		600
Precious metals		19		25		21		44		40
Cobalt (t)		676		636		665		1.312		1.405

Railroad transportation (millions of TKU) (**)		9.170		8.360		9.817		17.530		18.089
Port services		5.238		3.929		6.598		9.167		12.478
Boat services
Maritime transportation

Aluminum		124		127		126		251		262
Alumina		1.403		1.257		861		2.660		1.694
Bauxite		686		665		1.092		1.351		2.085

Steel		47		79		216		126		449
Pig iron		—		35		118		35		196
Coal		1.117		976		910		2.093		1.915


	In thousand
	Quarter (Unaudited)						Accumulated (to review)
	2Q/09		1Q/09		2Q/08		06/30/09		06/30/08
Iron ore		4,937,180		7,265,680		7,925,990		12,202,860		13,126,458
Pellets (*)		634,846		869,536		2,453,663		1,504,382		3,888,577

		5,572,026		8,135,216		10,379,653		13,707,242		17,015,035

Manganese		86,864		34,159		135,564		121,023		204,725
Ferroalloys		146,249		178,748		631,709		324,997		1,135,466

		233,113		212,907		767,273		446,020		1,340,191

Copper concentrated		351,277		248,026		525,303		599,303		913,644
Finished copper (Nickel co-product)		215,745		297,810		502,517		513,555		993,567
Nickel		1,894,491		1,477,030		3,105,285		3,371,521		6,383,870
Potash		251,841		150,492		173,588		402,333		285,046
Kaolin		86,337		91,013		88,543		177,350		181,253
Precious metals		167,100		188,953		239,380		356,053		509,605
Cobalt (t)		24,867		30,243		94,859		55,110		201,341

		2,991,658		2,483,567		4,729,475		5,475,225		9,468,326

Railroad transportation (millions of TKU) (**)		595,771		513,055		788,824		1,108,826		1,453,309
Port services		95,585		73,922		111,083		169,507		205,559
Boat services		23,501		23,505		22,505		47,006		44,214
Maritime transportation		—		—		9,602		—		15,778

		714,857		610,482		932,014		1,325,339		1,718,860

Aluminum		398,348		450,073		654,997		848,421		1,283,737
Alumina		568,301		567,342		582,668		1,135,643		1,064,471
Bauxite		44,670		53,492		63,328		98,162		124,642

		1,011,319		1,070,907		1,300,993		2,082,226		2,472,850

Steel		107,113		169,915		357,209		277,028		677,398
Pig iron		—		24,896		93,102		24,896		145,063
Coal		201,680		309,493		170,341		511,173		296,062
Other products and services		171,719		161,140		154,401		332,859		299,734

		480,512		665,444		775,053		1,145,956		1,418,257

		11,003,485		13,178,523		18,884,461		24,182,008		33,433,519


(*)		Includes sales of providing services to subsidiaries of control shared in the amounts of $3,421, R$4,348, R$11,974, R$7,769, R$32,600, referring to the 2Q/09, 1Q/09, 2Q/08, 06/30/09 e 06/30/08, respectively.

(**)		The Vale carried through its railroad system of 7.304, 5.072, 7.247, 12.376 e 12.994 millions of TKUs of general cargo and 1,866, 3,288, 2,570, 5,154 e 5,095 millions of TKUs of iron ore for third parties in 2Q/09, 1Q/09, 2Q/08, 06/30/09 e 06/30/08, respectively.

The fall of 27.7% in the Sales, from R$33,433,519 on June 30, 2008 to R$24.182.008 on June 30, 2009 is due primarily to the reduction of price and volumes sold.

Consolidated sales by segment


	Ferrous		Non — Ferrous				Holdings				Quarter (Unaudited)										Accumulated (to review)
	Minerals		Minerals		Logistics		Aluminum		Others		2Q/09		%		1Q/09		%		2Q/08		%		06/30/09		%		06/30/08		%
External market
Latin America		57,548		880		—		14,717		7,157		80,302		1		102,983		1		761,103		4		183,285		1		1,250,625		4
Canada		—		397,981		—		258,027		11,086		667,094		6		503,286		4		850,496		5		1,170,380		5		1,579,349		5
United States (USA)		11,085		345,378		—		42,517		128,353		527,333		5		693,667		5		1,644,315		9		1,221,000		5		3,178,853		10
Germany		148,003		117,552		—		10,902		—		276,457		3		479,081		4		985,683		5		755,538		3		1,929,249		6
Belgium		2,682		20,075		—		151,854		—		174,611		2		167,790		1		399,744		2		342,401		1		711,695		2
France		57,586		27,445		—		—		—		85,031		1		89,958		1		409,672		2		174,989		1		687,873		2
England		171,786		158,038		—		—		8,867		338,691		3		423,626		3		758,355		4		762,317		3		1,268,281		4
Italy		58,161		32,599		—		—		—		90,760		1		178,890		1		413,297		2		269,650		1		730,143		2
Europe, except for Germany, Belgium, France, England and Italy		146,358		158,867		—		151,157		7,904		464,286		4		563,112		4		1,573,679		8		1,027,398		4		2,591,149		8
Middle East/Africa/Oceania		243,433		15,586		—		58,940		27,864		345,823		3		304,958		2		796,703		4		650,781		3		1,150,745		3
China		3,585,348		498,881		—		26,351		31,275		4,141,855		38		5,748,478		44		3,201,977		17		9,890,333		41		5,636,435		17
South Korea		179,286		177,165		—		—		—		356,451		3		587,337		5		604,292		3		943,788		4		1,057,495		3
Japan		369,459		182,395		—		159,975		63,688		775,517		7		1,133,067		9		2,007,601		11		1,908,584		8		3,535,950		11
Taiwan		79,345		319,496		—		—		—		398,841		3		307,808		2		512,536		3		706,649		3		966,849		3
Ásia, other than China, South Korea, Japan and Taiwan		165,017		241,790		—		—		67,693		474,500		4		321,716		2		942,442		5		796,216		3		1,786,266		4

		5,275,097		2,694,128		—		874,440		353,887		9,197,552		84		11,605,757		88		15,861,895		84		20,803,309		86		28,060,957		84

Brazil		530,042		297,530		714,857		136,879		126,625		1,805,933		16		1,572,766		12		3,022,566		16		3,378,699		14		5,372,562		16

Total		5,805,139		2,991,658		714,857		1,011,319		480,512		11,003,485		100		13,178,523		100		18,884,461		100		24,182,008		100		33,433,519		100

10.1.2- Cost of products and services


	Denominated in						Quarter (Unaudited)						Accumulated (to review)
	R$			Other currencies			2Q/09		1Q/09		2Q/08		06/30/09		06/30/08
Personnel		570.334			411.953			982.287		1.080.172		1.009.063		2.062.459		1.960.181
Material		710.169			768.090			1.478.259		1.476.835		1.677.292		2.955.094		3.233.732
Oil and gas		516.575			120.613			637.188		598.331		885.652		1.235.519		1.728.308
Outsourced services		703.242			325.724			1.028.966		953.482		1.212.738		1.982.448		2.341.687
Energy		227.579			171.203			398.782		410.485		487.423		809.267		942.339
Raw Material		78.634			195.189			273.823		387.715		753.040		661.538		1.396.877
Depreciation and depletion		664.638			524.101			1.188.739		1.206.756		1.180.417		2.395.495		2.412.393
Others		555.367			147.997			703.364		752.991		685.812		1.456.355		1.387.443

Total		4.026.538			2.664.870			6.691.408		6.866.767		7.891.437		13.558.175		15.402.960

		60	%		40	%

The 12% decrease in cost of products and services (R$15,402,960 as of June 30, 2008 against R$13,558,175 on June 30, 2009) was due to variations in volumes sold .

10.1.3- Selling and administrative expenses

The Selling expenses decreased 17.35%, of R$247,434 on June 30, 2008 to R$204,500 on June 30, 2009, due primarily to reduction of doubtful debt provision and freight expenses and royalties, while administrative expenses decreased 10.20%, from R$983,959 at June 30, 2008 to R$883,633 on June 30, 2009, due to the adaptation by the Company to the present market conditions.

10.1.4- Research and development

Research and development expenses increased by 26.35%, from R$793,943 as of June 30, 2008 to R$1,003,159 as of June 30, 2009, reflecting Vale’s plan to diversify and expand the production, mainly in the gas sector and energy and iron ore and pellets.

10.1.5- Other operating expenses

Other operating expenses increased R$1,112,642, from R$506,828 as June 30, 2008 to R$1,619,470 on June 30, 2009, basically due to idle capacity, shutdown of plants and employee termination costs besides of pre-operation expenses of Goro project.

10.1.6- Net financial results

Net financial results varied R$1,680,239 (R$2,213,025 as of June 30, 2009 against R$532,786 as of June 30, 2008), reflecting the effects of the appreciation of US dollar against Brazilian reais on debt.

10.1.7- Income tax and social contribution

Income and social contribution tax expenses presented an expense of R$4,291,579 as of June 30, 2009 compared to R$3,241,065 as of June 30, 2008, mainly due to a decrease in taxable income and the shareholders remuneration paid integrally in form of dividends, without the usage of benefit of interest on shareholders equity.

10.1.8- Results on sale of investments

The result on sale of investments in 2009 refers basically to the gain on sale of interest in Companhia na Usina Siderúrgica de Minas Gerais — USIMINAS of R$287.814 and in 2009 sale of Jubilee Mines NL R$ 138,879.

10.2- Management’s Discussion and Analysis of the Operational Performance of Parent Company

10.2.1- Sales revenues

The 5.74% increase in revenue (R$14,307,624 as of June 30, 2009 against R$13,530,982 as of June 30, 2008) was derived from the appreciation of American dollars against the real and increase in average product prices in Brazilian reais, partially compensated by the fall of selling volumes.

10.2.2- Cost of products and services

Cost of products and services sold as of June 30, 2009 was R$6,023,576, against R$7,648,817 as of June 30, 2008, representing a 21% decrease. The main factor is less volume sold.

10.2.3- Gross margin

Gross margin increased from 40.3% as of June 30, 2008 to 56.8% as of June 30, 2009, mainly due to dollar valuation against Brazilian real and the price adjustment.

10.2.4- Equity Results

Equity in subsidiaries decreased by R$10,602,872 from R$6,434,696 as of June 30, 2008 to -R$4,168,176 as of June 30, 2009 mainly due to the reduction of operational results of affiliates for the period.

10.2.5- Selling and administrative expenses

The selling expenses decreased 39.72%, by R$20,747 as of June 30, 2008 to R$12,922 as of June 30, 2009, due primarily to reduction of doubtful debt provision, while administrative expenses decreased by 8.68% from R$595,488 as of June 30, 2008 to R$543,782 as of June 30, 2009, due to primarily the reduction of Salary expenses and outsourced services, and adaptation by the Company to the present market conditions.

10.2.6- Research and development

Research and development increased by 39.84%, from R$448,331 as of June 30, 2008 to R$626,960 as of June 30, 2009, reflecting Vale’s plan to diversify and expand the production, mainly in the gas sector and energy and iron ore and pellets.

10.2.7- Other operating expenses/ income

Other operating expenses increased by R$687,027, from expense of R$110,757 as of June 30, 2008 to expense of R$576,270 as of June 30, 2009, due basically the idle capacity and shutdown of plants.

10.2.8- Net financial results

Net financial results changed R$4,191,332 (R$2,507,190 as of June 30, 2008 against R$6,698,522 as of June 30, 2009) basically due to the appreciation of US dollar against Brazilian Real on related party debt.

10.2.9- Income tax and social contribution

Income tax and social contribution revenue totaled R$1,347,716 as of June 30, 2008 compared to an expense of R$4,376,352 as of June 30, 2009, mainly due to a increase in taxable income and the remuneration integrally paid in the form of dividends without the usage of benefit of interest on shareholders equity.

11- Board of Directors, Fiscal Council, Advisory Committees and Executive Officers


Board of Directors		Governance and Sustainability Committee
		Jorge Luiz Pacheco
Sérgio Ricardo Silva Rosa		Renato da Cruz Gomes
Chairman		Ricardo Simonsen

Mário da Silveira Teixeira Júnior		Fiscal Council
Vice-President

		Marcelo Amaral Moraes
Eduardo Fernando Jardim Pinto		Chairman
Francisco Augusto da Costa e Silva
Jorge Luiz Pacheco
José Ricardo Sasseron		Aníbal Moreira dos Santos
Ken Abe		Antônio José de Figueiredo Ferreira
Luciano Galvão Coutinho		Bernard Appy
Oscar Augusto de Camargo Filho
Renato da Cruz Gomes		Alternate
Sandro Kohler Marcondes		Cícero da Silva
		Marcus Pereira Aucélio
Alternate		Oswaldo Mário Pêgo de Amorim Azevedo

Deli Soares Pereira		Executive Officers
Hidehiro Takahashi
João Moisés de Oliveira		Roger Agnelli
Luiz Augusto Ckless Silva		Chief Executive Officer
Luiz Carlos de Freitas
Luiz Felix Freitas		Carla Grasso
Paulo Sérgio Moreira da Fonseca		Executive Officer for Human Resources and Corporate
Raimundo Nonato Alves Amorim		Services
Rita de Cássia Paz Andrade Robles
Wanderlei Viçoso Fagundes		Eduardo de Salles Bartolomeo
		Executive Officer for Logistics, Project Management and
Advisory Committees of the Board of Directors		Sustainability

Controlling Committee		Fabio de Oliveira Barbosa
Luiz Carlos de Freitas		Chief Financial Officer and Investor Relations
Paulo Ricardo Ultra Soares
Paulo Roberto Ferreira de Medeiros		José Carlos Martins
		Executive Officer for Ferrous Minerals
Executive Development Committee
João Moisés de Oliveira		Tito Botelho Martins
José Ricardo Sasseron		Executive Officer for Non Ferrous
Oscar Augusto de Camargo Filho

Strategic Committee
Roger Agnelli
Luciano Galvão Coutinho
Mário da Silveira Teixeira Júnior
Oscar Augusto de Camargo Filho
Sérgio Ricardo Silva Rosa		Marcus Vinícius Dias Severini
		Chief Officer of Accounting and Control Department
Finance Committee
Fabio de Oliveira Barbosa		Vera Lúcia de Almeida Pereira Elias
Ivan Luiz Modesto Schara		Chief Accountant
Luiz Maurício Leuzinger		CRC-RJ — 043059/O-8
Wanderlei Viçoso Fagundes

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	Vale S.A. (Registrant)
Date: July 29, 2009	By:	/s/ Roberto Castello Branco
		Roberto Castello Branco
		Director of Investor Relations