The integrated and systemic planning of the stages in the mine life cycle favors process optimization and risk management, as well as being essential for the success of mining activities and for mine closure to be carried out properly.
Stages in the mine life cycle:
Closing actions for a mining venture should consider the multiple legal, environmental and social attributes relevant to the process, as well as economic issues.
Mine Closure: Integrated and systemic planning, associated with the stages of composition of the mine life cycle, including the closure of the mine, is essential to the sustainability of the territories in which they occur. How closing actions can be used, how they must be anticipated as socio-economic to minimize local and regional economic impacts.
In order to guarantee the success of these actions, Vale defines integrated planning through a multidisciplinary team. Thus, it is possible to promote the reintegration of the mined territories to physical, biotic and socioeconomic environments, contributing to the sustainable development of these locations.
To guide its strategy and actions, the company relies on the Mine Closure Guide and other internal guidelines. The company also participates in the discussion group for Closing the Mine of the International Council for Mining and Metals (ICMM - International Council for Mining and Metals), which is attended by 23 companies in the sector.
Vale monitors all mine closure actions and progressive rehabilitation of its units, through the correct management of resource allocation. In 2019, a company disbursed approximately R$ 150 million in activities of definitive and progressive closure.
During 2019, there were no updates to the Mine Closure Plans. The plans are in line with the good practices adopted by ICMM and national legislation. For 2020, R$ 234 million is planned or disbursed for the decommissioning of geotechnical, civil and industrial structures and in preparation for the closure of the mine, without considering as activities to de-characterize high open dams.
Our Management
At deployment and during the initial phase of an operational unit, the closure plan approach is prognostic and conceptual. As the operation proceeds and the closing horizon is defined, studies and projects evolve to reach the detailed stages.
For the success of these projects, Vale establishes an integrated planning with a multidisciplinary team. Thus, it is possible to promote the reintegration of the mined territories to the physical, biotic and socioeconomic means, enhancing the concatenation of closing actions between the different phases of a mining enterprise and contributing to the value chain.
In summary, our objectives for mine closure are:
Establish appropriate methodologies for the reparation and mitigation of impacts caused to all environmental fronts (air, water, soil, biota) and local communities
Identify scenarios for future use, compatible with the environmental and socioeconomic vocations of the affected areas, aiming to minimize negative interference and enhance positive ones.
Decommissioning: It is the phase of the structure's life cycle that begins with the confirmation that it is no longer needed in the operational context of the project and, therefore, may undergo works aimed at its closure.
ISO 14001 Vale is committed to complying with environmental management requirements, enabling the development of best practices in our operations, through the ISO 14001 implementation. By the end of 2021, 46% of our operations were already ISO 14001 certified. In this sense, we have a commitment established in our ESG Gaps Action Plan to have all our operations certified to ISO 14001 by the end of 2024.
Governance
The mine closure theme occupies a special position in Vale's business strategy.
Vale's Environmental Management Executive Department is responsible for regulating the mine closure theme and acts as a second line of defense in risk management. It provides information to close operations in accordance with best practices and legal requirements. For the Ferrous area, the Closed Mines Department works on the stabilization and de-characterization of existing geotechnical structures, ensuring continuous monitoring. Its priority is also to act in mine closures and the future use with concepts of shared value with society.
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Provisions for Asset Decommissioning and Mine Closure
We prepare and review, on an annual basis, cost estimates for the decommissioning of our assets (pits, piles, dams, industrial facilities etc.), which follows the ARO methodology - Asset Retirement Obligation , with disclosure in the accounting reports, which meets the requirements set by the International Accounting Standard. (IAS) 37 and the SEC - Securities and Exchange Commission, and is a part of the flows defined by the company to comply with the Sarbanes-Oxley Act.
For Vale, the Mine Closure and its respective provision are the most important planning tools, given its permeability in practically all processes associated with mining projects (research, implementation, operation and decommissioning), and not just closure of the activities. These are dynamic processes in terms of content and degree of detail and should therefore be periodically updated to adapt to any changes in the socio-environmental and cultural characteristics of your area of influence.
Vale monitors all mine closure and progressive rehabilitation actions at its units, managing the correct allocation of the resource. For 2020, Vale is planning to disburse R $ 1,25 billion for the decommissioning of assets and for the preparation of mine closure.
Vale participates in the ICMM (International Council on Mining and Metals) Mine Closure discussion group, which is attended by 23 companies in the sector
Sponsored the publication of the IBRAM (Brazilian Mining Institute) Mine Closure Planning Guide
Policies and Procedures
Mine Closure Guide:
Establishes guidelines for all Vale mining operating units to address decommissioning of assets and mine closure in their planning, in the form of a specific Mine Closure Plan (PFM). This plan must consider actions necessary for the progressive decommissioning of each asset, as well as for enterprise closure itself, at the end of its operating life.
Asset decommissioning provision:
Establishes guidelines and criteria for managing the decommissioning provision of Vale assets. All long-term tangible assets, associated with Vale Group’s mining ventures in implementation, in operation, halted and shutdown, have the due provision recorded.
Risks
ICMM (International Council on Mining and Metals) proposes the implementation of an approach for mining companies to control financial risks at the mine closure stage so that environmental liabilities are eliminated and a positive environmental and social legacy can be left for society after the closure of mining activities.
Perspectives
The mine closure area has the following pillars:
Business Case
Since 2014, Vale has been progressively closing its structures. Several of them have already been decommissioned, such as the Claras Mine.
"Águas Claras" Mine Recovery
The extraction of iron ore at the Águas Claras Mine, located in the municipality of Nova Lima, State of Minas Gerais, took place between 1973 and 2002. The mine belonged to Minerações Brasileiras Reunidas (MBR), acquired by Vale in 2006.
Currently, the unit is used as the administrative area of the Company in Minas Gerais and houses about 2,000 employees. The mine is in the process of closing and several activities have been performed, including:
Erosion Containment
Installation of rainwater drainage equipments
Vegetation coverage with native species
De-characterization of assets
Integrated and systemic planning of the stages that are part of the life cycle of a mine favors process optimization and risk management and is also essential for the success of mining activities and for Mine Closure and Future Use to be carried out properly.
Stages in the life cycle of a mine:
Thus, the Mine Closure process should occur in parallel to the operation, minimizing risks, costs and ensuring a safe and stable space in the long term. At the same time, planning for Future Use also takes place, which seeks to identify and enhance opportunities to create value for the territories.
Mine Closure and Future Use:
Sustainable management of a mining operation involves planning and managing of the closing of its assets, as well as activities that go beyond complying legal requirements after operations have been completed, involving the assessment of environmental, social, economic, and governance aspects during the entire mine's life cycle.
Mine Closure is seen at Vale as a process that requires satisfactory levels of foresight, ability, operational experience, motivation, planning and management, which with the adoption of best practices, applied at the appropriate time, can prevent, mitigate or eliminate the possible impacts of mine operation and closure.
Future Use aims to give new meaning to post-mining areas through opportunities aligned with territorial vocations and with the generation of shared value, which can generate social and economic benefits.
In order to guarantee the success of these actions, Vale establishes integrated planning through multidisciplinary teams. Thus, it is possible to promote the reconversion of mined territories considering the physical, biotic, and socioeconomic aspects environments, contributing to the sustainable development of these localities.
To guide its strategy and actions, the company has a Mine Closure planning guidelines and other internal guidelines. The company also belongs to the Mine Closure discussion group of the International Council on Mining and Metals (ICMM).
All plans are in line with the best practices adopted by ICMM and national legislation.
Our Management
During implementation and the initial stages of an operational unit, the approach to the closure plan is prognostic and conceptual. As operations proceed and the closure horizon is defined, studies and designs evolve to achieve the detailed stages.
In this way, as time progresses (life cycle), different degrees of knowledge and control are available, reducing risks and uncertainties related to Mine Closure, detailing future use vocations, and contributing to the value chain.
In this context, with regard to the possibilities of Future Use, an integrated vision of the territory in terms of constraints and opportunities is considered.
In short, our goals for Mine Closure and Future Use are:
Establish appropriate methodologies for the reparation and mitigation of impacts caused to all environmental fronts (air, water, soil, biota) and local communities.
Identify scenarios for Future Use, compatible with the environmental and socioeconomic vocations of the affected areas, aiming to minimize negative interference and enhance positive ones.
Decommissioning: This is the process in the life cycle of the structure that is related to the closure of the activities in a mine. Decommissioning can be total (deactivation or decharacterization of the structure as a whole) or progressive (partial closure of a specific asset during its useful life).
Vale is committed to open and transparent management of natural resources, and as such, we actively support the Extractive Industries Transparency Initiative (EITI).
Comment on contract disclosures:
Vale as a member of ICMM is expected to implement ICMM’s Mining Principles as a condition of membership with a clear endorsement of efforts at the international level to enhance the transparency of mineral revenues, including EITI, and engaging constructively in appropriate forums to improve the transparency of mineral revenues.
For Vale in Brazil, mineral activity is carried out through the granting of administrative acts, which are generic, and not through contracts concluded between the mining company and the Government. All Vale´s mining tenements in Canada, such as patents, leases or other instruments of title relating to mining rights are governed and regulated by the Acts and administered by the provincial governments. Regarding Vale’s operations in Indonesia all mineral development contracts, as of this moment, were granted or entered before 1 January 2021 and have confidentiality clauses.
Information relating to Vale’s mining tenures in Canada and Vale’s licenses in Brazil is publicly available at the following websites:
ISO 14001 Vale is committed to complying with environmental management requirements, enabling the development of best practices in our operations, through the ISO 14001 implementation. By the end of 2021, 46% of our operations were already ISO 14001 certified. In this sense, we have a commitment established in our ESG Gaps Action Plan to have all our operations certified to ISO 14001 by the end of 2024.
Governance
The themes of Mine Closure and Future Use have a special position in Vale's business strategy.
Vale's Environmental Management Department is responsible for regulating Mine Closure and is part of the second line of defense in risk management. It provides support to ensure that operations are closed in line with best practices and legal requirements.
The Geosciences Directorate works on the indication of stabilization, decharacterization, and recovery activities for existing geotechnical and industrial structures, ensuring the post-closure monitoring and maintenance activities.
The Sustainability Vice-Presidency, meanwhile, has as its priority the action planning for Future Use with concepts of shared value with society and positive impact businesses, defining guidelines and tools that also guide the dialogue and engagement with stakeholders on issues related to the future of the territories.
Councils and Committees:
The issue of Mine Closure and Future Use is periodically addressed by the Board of Directors, between the shareholders and management, the Fiscal Council, an independent oversight body of the Executive Board and the Board of Directors, and also the Audit Committee, an advisory body to the Board of Directors of Vale, whose objectives are to oversee the quality and integrity of financial reports, adherence to legal, statutory and regulatory standards, the adequacy of risk management processes, and the activities of internal and independent auditors.
Provisions for Asset Decommissioning and Mine Closure
We prepare and review, on an annual basis, cost estimates for the decommissioning of our assets (pits, piles, dams, industrial facilities etc.), which follows the ARO methodology - Asset Retirement Obligation , with disclosure in the accounting reports, which meets the requirements set by the International Accounting Standard. (IAS) 37 and the SEC - Securities and Exchange Commission, and is a part of the flows defined by the company to comply with the Sarbanes-Oxley Act.
For Vale, the Mine Closure and its respective provision are the most important planning tools, given its permeability in practically all processes associated with mining projects (research, implementation, operation and decommissioning), and not just closure of the activities. These are dynamic processes in terms of content and degree of detail and should therefore be periodically updated.
Vale monitors all Mine Closure and progressive rehabilitation actions at its units, managing the correct allocation of the resource. For 2022, the company has disbursed approximately R$500 million in permanent and progressive closure activities.
Partnerships
Vale participates in the ICMM (International Council on Mining and Metals) Mine Closure discussion group, which is attended by 23 companies in the sector.
Sponsored the publication of the IBRAM (Brazilian Mining Institute) Mine Closure Planning Guide.
Vale leads the Working Group for Mitigation of Environmental Impacts, related to IBRAM's Commitment Letter to society, where the themes of biodiversity, climate change and Mine Closure are discussed.
Policies and Standards
Mine Closure Guide:
Establishes guidelines for all Vale mining operating units to address decommissioning of assets and Mine Closure in their planning, in the form of a specific Mine Closure Plan. This plan must consider actions necessary for the progressive decommissioning of each asset, as well as for enterprise closure itself, at the end of its operating life, in addition to all physical, biotic and socio-economic aspects.
Asset decommissioning provision:
Establishes guidelines and criteria for managing the decommissioning provision of Vale assets. All long-term tangible assets, associated with Vale Group’s mining ventures in implementation, in operation, halted and shutdown, have the due provision recorded.
Social Engagement
Vale's Social Action model, which includes actions for issues related to mine closure, is implemented through the management of risks and impacts on communities and the promotion of a positive social legacy.
In terms of engagement with stakeholders for Mine Closure and Future Use, discussions are incorporated into all stages of the life cycle of the operation. Therefore, in the development of the engagement plan for Closure, the entire history of stakeholder relations and engagement throughout the previous stages of SLOM (Sustainable Life Of Mining) is encompassed.
In this context, to enable the execution of engagement processes during the Mine Closure phase, Vale defines guidelines that range from ensuring strategic business drivers for Closure and Future Use, considering internal stakeholders in the definition of the Closure and Future Use vision and principles, to involving stakeholders in the assessment of Future Use possibilities, assessment of socio-territorial risks and in the preparation of the Plan for Management of the Assets/Structures according to defined Future Use alternatives.
Vale's Social Action model, which includes actions for issues related to mine closure, is implemented through the management of risks and impacts on communities and the promotion of a positive social legacy.
In terms of engagement with stakeholders for mine closure and future use, discussions are incorporated into all stages of the life cycle of the operation. Therefore, in the development of the engagement plan for Closure, the entire history of stakeholder relations and engagement throughout the previous stages of SLOM (Sustainable Life Of Mining) is encompassed.
Support to Territorial Development for mine closure and future use:
The process of supporting Territorial Development consists of planning, executing, monitoring and evaluating the impact of the structuring actions/projects of social investment, be they voluntary, mitigating or mandatory. The continuous improvement of the process seeks to improve the use of resources, the increase of results, and the maximization of the positive impacts of mining, stimulating local transformation and the generation of shared value, according to the stages of Sustainable Life of Mine (SLOM).
Territorial Development assumes some premises such as: (i) the interpretation of the territory's social reality with internal and external information, from a systemic and integrated vision, (ii) the construction of stakeholders' social capacity, (iii) the promotion of inter-sector partnerships between companies (private sector), public authorities (governments), and civil society, (iv) the promotion of economic diversification, equal social opportunity, and (v) the preservation and environmental recovery, aligned to the company's business plan.
Support to Territorial Development for Mine Closure and Future Use:
The process of supporting Territorial Development consists of planning, executing, monitoring and evaluating the impact of the structuring actions/projects of social investment, be they voluntary, mitigating or mandatory. The continuous improvement of the process seeks to improve the use of resources, the increase of results, and the maximization of the positive impacts of mining, stimulating local transformation and the generation of shared value, according to the stages of Sustainable Life of Mine (SLOM).
Territorial Development assumes some premises such as: (i) the interpretation of the territory's social reality with internal and external information, from a systemic and integrated vision, (ii) the construction of stakeholders' social capacity, (iii) the promotion of inter-sector partnerships between companies (private sector), public authorities (governments), and civil society, (iv) the promotion of economic diversification, equal social opportunity, and (v) the preservation and environmental recovery, aligned to the company's business plan.
ICMM (International Council on Mining and Metals) proposes the implementation of an approach for mining companies to control financial risks at the Mine Closure stage so that environmental liabilities are eliminated and a positive environmental and social legacy can be left for society after the closure of mining activities.
Perspectives
The themes Mine Closure and Future Use at Vale have the following pillars of action:
Plan
Establish and unify key processes
Innovate
New subject for company and relatively unprecedented for the domestic market
Acculturate
“Culture eats strategy for breakfast” - Peter Drucker
Shared Value
Business Value + Social Value
Business Cases
For Vale's operations, the co-creation for the Future Use scenario is supported by an integrated database management, which allows both the analysis and prioritization of the progressive closure of the assets, with an integrated planning of the operations, as well as the identification of the regional aptitudes that are the basis for the progress of the Future Use assessments.
Currently, we work with an annual cycle of planning and execution of actions for the progressive closure of assets and studies of the aptitudes and potential of our territories. Among the projects for future use in progress, we can highlight the case of the Águas Claras Mine (MAC) and the case of parts of the territory of the Itabira Complex, both in Minas Gerais, Brazil.
Águas Claras Mine
Located between Nova Lima and Belo Horizonte, in the region of Serra do Curral, the Águas Claras Mine was shut down in 2002, after 30 years of operation by MBR, and is currently undergoing closure and decharacterization works.
Due to the specificities of the surrounding area - with high-standard condominiums, residents of clusters, neighborhoods with strong commercial intensity, alongside rural zones and environmental preservation areas - as well as the water importance in the region, the process represents a complex and multifaceted reality, which requires the involvement of a plurality of players and interests.
In 2020, we initiated the plan for Future Use of the project. At the time, a perception survey was carried out with 605 people from the stakeholder group, including the local community, to identify the potential and restrictions for future occupation and society's expectations regarding the area, by means of a perception study. The result pointed to the valorization of the region's natural capital as a protagonist of the future use process, with potential social use in the spheres of ecotourism, recreation, environmental conservation/education, real estate enterprises, and services. With this guiding strategy, the next steps involve the stages of detailing scenarios and feasibility of Future Use, and the continuation of the engagement process in the stages of implementing the mapped actions. The following activities have already been carried out at the unit.
A perception study, for the construction of future use scenarios in a participative way, through listening and the involvement of the different actors in society.
Drainage installation for rainwater runoff and erosion containment.
Vegetation cover with native.
Decommissioning and asset decharacterization.
Study of local development, to understand the socioeconomic and cultural dynamics of the territory.
Future land use is the theme of a leisure day at the Águas Claras Mine
The Águas Claras Mine was the setting for the event "A Leisure Day" organized by our company. The event is part of the project Future Use of the territory, and was an opportunity for the community to get to know MAC, bring society closer to the company, and contribute to the construction of the project that will transform the mined territory into a legacy of sustainability for society.
The event included a terrarium workshop and other activities for children
Around 300 participants, including Vale employees and the community, watched cultural presentations by groups from neighboring communities such as Cobra Coral, Lá da Favelinha and Meninas de Sinhá, and were able to participate in the Terrarium Workshop given by Vale Environmental Education. In addition, they were able to learn more about the MAC Future Use Project, which will give new meaning to the spaces that were previously used for mining and will once again become part of the community's daily life in a more sustainable way.
The event included a terrarium workshop and other activities for children
Presentation of the Meninas de Sinhá group
Presentation of the Meninas de Sinhá group
Mines in Itabira
In the initial stage, we seek to evaluate the potential and restrictions of Future Use, primarily in an area of territory in the Pontal/Doze basin, surrounded by an urban area and in part by a rural area. During the knowledge stage of the region, several natural interferences and socioeconomic pressures were identified in the surrounding area, among them, urban expansion vectors, the presence of vulnerable communities, protected forest fragments, as well as areas of interest and socio-cultural importance, which were compiled in an integrated territorial base.
In 2020 we conducted a survey to understand the relationship between the community and the conservation areas - natural capital assets - that are currently under our responsibility. Based on this research, we mapped initiatives with the potential to reconcile environmental conservation, the creation of shared value, and financial sustainability.
In 2021, Vale and the municipal government of Itabira established a group to plan, prioritize and integrate the activities to be carried out by the company in the city. The company provided the services of a specialized consultancy with the objective of building a short-, medium- and long-term strategy to guide the sustainable development of the municipality, organizing the actions underway, linking them to the expected future prospects for the town of Itabira in terms of mining dependency. The following activities have already been carried out in the mines of Itabira:
Progressive Asset Closing.
Dam decharacterization.
Natural Capital Assessment for understanding the relationship between community and conservation áreas.
Creation of a planning group with the Itabira City Hall.
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