Sustainable development at Vale, a Brazilian mining company

April 2015
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Sustainable
development
at the
Vale,
a Gap
Vale’s
Programs
for Meeting
Skills
Brazilian mining company
We are Vale
•  A global mining company
headquartered in Brazil
Vale employees in Minas Gerais
Renato Stockler das Neves Filho / Agência
Vale
•  The global leader in iron ore and pellet
production and the second largest
nickel producer
•  We also produce copper, coal,
fertilizers, manganese, ferroalloys,
cobalt and platinum group metals
•  We also invest in logistics and energy
2015
Headquartered in Rio de Janeiro, we have operations, research laboratories, projects
and offices on five continents.
Local Content Development
“Inove”
•  Inove is a supplier development program that aims to contribute to the
sustainable development of our suppliers and to build a positive legacy in the
regions where Vale operates.
•  Activities are developed in partnership with national, regional and local
institutions such as Federation of Industries, financial and educational institutions,
among others. We also have an internal partnership with Valer (Vale’s education and
training department) to help us in all actions that we undertake on the training matter.
•  Since its creation in 2010 Inove has trained about 700 companies and 4.000 users,
and there has been more than U$ 186 millions in transactions of materials and
supplier kit services. The program has financed more than US$ 800 million through
its partners.
Inove
Training
Support to
SMEs
Business Fostering
Federation of
industries
Trade
associations
Competitiveness
Large suppliers
Financial
institutions
Objectives
Foster and develop local markets,
in a competitive and sustainable
way to meet the needs of the
company’s procurement
department
Support Vale on its growth
challenges
Raise the local content of the
regions where Vale operates,
leaving a legacy in each one of
them
Solutions
Training
Capacitação
Business
fostering
Competitiveness
• 
Online training platform: around 100 courses on issues related to sustainability,
finance management, innivation and project management.
• 
Classroom training: developed in partnership with Industry Federations.
• 
Vale-Sebrae partnership: program to support Vale’s small suppliers developed in
partnership with the Brazilian Service to Support SMEs (Sebrae).
• 
Events to promote the interaction between different suppliers with the aim of
promoting the business in Vale’s production chain.
• 
Supplier Kit: offers advantages to buy goods and services.
• 
Financing: Funding for our suppliers as prepayment of receivables and financing
for equipment purchases.
Overall challenges •  Making suppliers competitive – Vale has a number of requirements (quality, health &
safety, social, environment) that any supplier needs to meet. The first challenge for the
Inove program is to make local suppliers competitive enough so that the buyers consider
them as an option.
•  Articulating the value of local content strategies – since the meaning of “local
content” may vary across internal and external stakeholders, another challenge is to
demonstrate that local content is related to creating shared value in terms of
results and benefits for the company complemented by a positive legacy for the
region where the company operates.
•  Measuring the impact of the training program – this is key to demonstrate the
financial and social benefits to the company, the suppliers, and the surrounding
communities.
Success in Brazil >90% of purchases from local Brazilian suppliers
Brazil (MA/ PA/ MG/ ES)
2012-2014
Local content increased in the main Brazilian opera7ons 54% 2012 56% 2013 Vale´s 2014 purchase amount exceeded 2013, mainly because its strategic projects CLN and S11D. 63% 2014 YTD Valer Educational Strategy
Valer - Vale’s Training Program
Skills gap:
Facing a lack of high-skilled workforce in some states in the North of
Brazil, Vale partnered with educational institutions to educate engineers,
managers and logistics specialists as well as operational technical level
employees among the local population.
Benefits:
The program benefits both the company, as it enables it to hire
well-trained people locally, as well as Brazil’s state educational
Partners which can attract more talented students, whilst improving
livelihoods in local communities.
820 engineers and geologists, in 5 years; 11,700
young students trained.
Valer Programs
Two types of curricula
University Level - Specialization
Educate engineers and geologists.
In partnership with universities, courses
are created with real knowledge of
business needs.
Technical apprentice level
It targets young people finishing school,
and aims to provide them with technical
education.
The curriculum is a mix of theory
and professional practice.
Overall challenges
•  Large territory and remote regions - Vale’s main operations are located in the states
of Minas Gerais, Pará, Espírito Santo and Maranhão, which all together cover the same
area as the Democratic Republic of Congo.
Ø  Pará state: Inove has the challenge of supporting S11D – largest iron ore project in the
world with an investment close to US$20 billion. The Northern states of Pará and
Maranhão are among the poorest states in Brazil.
•  Retaining talents – The main challenge that Vale faces is that once it has trained and
employed good professionals transferred from the south to the north, it struggles to
retain them.
•  Recruiting talents – Due to some deficiencies in the Brazilian education system, Vale
often finds that recruiting good candidates can be challenging. The company has
determined that there are certain basic courses that have to be included in the training
program to bring all students to a common level, such as Portuguese and mathematics
Key success factors
Improving livelihoods –
Innovative training –
The professional
qualification program also
has a large impact on local
communities, as education
and better incomes improve
the quality of life of whole
families
The success lies with the
innovation that Vale brings to
local education and the
pioneering courses that have
never been on the curriculum
before. Educational partners
have the opportunity to offer
the courses in the future
Partnering – Structuring and
implementing Vale’s educational
actions is possible thanks to the
strategic engagement of partners in
view of stimulating relationships
and sharing Valer’s benefits with
the scholarly community, private
entities in the education sector, and
society at large
Valer
14
Thank you!