Vale S.A. 2Q26 Financial Summary
Business Context and Reporting Period
This Form 6-K covers Vale S.A.'s performance for the second quarter ended June 30, 2026. The company reported solid year-on-year results across all business segments, driven by higher realized commodity prices and increased sales volumes. Key operational milestones included the start-up of the Serra Sul +20 project at S11D and the Bacaba copper project advancing ahead of schedule.
Key Financial Metrics
| Metric (US$ Million) | 2Q26 | 2Q25 | 6M26 | 6M25 |
|---|---|---|---|---|
| Net Operating Revenues | 10,498 | 8,804 | 19,756 | 16,923 |
| Proforma EBITDA | 4,066 | 3,424 | 7,961 | 6,636 |
| Proforma EBITDA Margin | 39% | 39% | 40% | 39% |
| Recurring Free Cash Flow | 1,505 | 1,008 | 2,318 | 1,512 |
| Net Income Attributable to Shareholders | 1,375 | 2,117 | 3,268 | 3,511 |
| Proforma Net Income Attributable | 1,566 | 2,117 | 3,459 | 3,588 |
| Net Debt | 13,173 | 12,149 | 13,173 | 12,149 |
| Expanded Net Debt | 16,677 | 17,448 | 16,677 | 17,448 |
| Capital Expenditures | 1,128 | 1,053 | 2,217 | 2,227 |
Material Changes vs. Prior Period
- Revenue Growth: Net operating revenues increased 19% year-over-year (y/y) to US$ 10.5 billion, driven by higher sales volumes and realized prices across iron ore, copper, and nickel.
- EBITDA Expansion: Proforma EBITDA rose 19% y/y to US$ 4.1 billion. Iron ore production reached its highest Q2 level since 2018, while copper production hit a nine-year high for the quarter.
- Net Income Decline: Attributable net income fell 35% y/y to US$ 1.4 billion, primarily due to a US$ 798 million negative variation in mark-to-market derivative valuations and higher income taxes, despite strong operational earnings.
- Cost Pressures: Iron ore C1 cash costs increased 9% y/y to US$ 24.1/t due to Brazilian Real (BRL) appreciation and higher bunker fuel prices. All-in costs for iron ore rose 18% y/y to US$ 61.6/t.
- Base Metals Performance: Vale Base Metals EBITDA surged 79% y/y to US$ 1.3 billion. Copper all-in costs improved significantly to US$ -257/t, while nickel all-in costs declined 17% y/y to US$ 10,340/t.
Guidance, Outlook, and Management Commentary
- Shareholder Returns: The Board approved US$ 1.7 billion in dividends and interest on capital for 1H26. A new share buyback program was authorized for up to 100 million shares over 18 months.
- Revised Guidance:
- Iron Ore C1 Cash Cost: Revised to US$ 22.5-23.5/t (previously US$ 20.0-21.5/t) reflecting stronger BRL and higher oil prices.
- Iron Ore All-in Cost: Revised to US$ 58-62/t (previously US$ 52-56/t).
- Copper All-in Cost: Revised down to US$ 0-500/t (previously US$ 1,000-1,500/t) due to higher gold by-product prices.
- Nickel All-in Cost: Revised down to US$ 10,000-11,500/t (previously US$ 12,000-13,500/t).
- Production: 2026 copper guidance narrowed to 360-380 kt; nickel guidance narrowed to 185-200 kt.
- Project Updates: The Serra Sul +20 project started operations in July 2026. The Bacaba copper project is 39% complete and expected to start-up in 3Q27, ahead of the original 1H28 schedule.
- Risks: Management highlighted exposure to commodity price volatility, BRL appreciation, and rising fuel costs. The company maintains a hedging strategy for Brent oil, which generated a US$ 99 million gain in the quarter.
Investor Verification Checklist
- Derivative Valuations: Verify the impact of the US$ 798 million mark-to-market loss on derivatives, which significantly reduced net income despite strong operational cash flow.
- Cost Guidance Assumptions: Review the revised cost guidance assumptions, specifically the updated USD/BRL exchange rate (5.13) and Brent oil price ($86/bbl) used for 2026 forecasts.
- Working Capital Dynamics: Monitor the US$ 162 million working capital outflow in 2Q26, driven by increased accounts receivable and inventory build-up.
- Reparation Obligations: Track the status of Brumadinho (83% of commitments completed) and Samarco reparation programs, which continue to impact cash flow and expanded net debt.
- Project Execution: Confirm the timeline and capital requirements for the Serra Sul +20 and Bacaba projects, which are critical to future volume growth.