10. Streaming transactions
a) Statement of Financial Position
| Schedule of statement of financial position |
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December 31, 2025 |
December 31, 2024 |
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Current liabilities |
Non-current liabilities |
Total |
Current liabilities |
Non-current liabilities |
Total |
| Gold streaming |
81 |
1,564 |
1,645 |
136 |
1,442 |
1,578 |
| Cobalt streaming |
46 |
404 |
450 |
22 |
439 |
461 |
| Total contract liabilities |
127 |
1,968 |
2,095 |
158 |
1,881 |
2,039 |
b) Effects on the income statement
| Schedule of effects on the income statement |
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| Year ended December 31, |
2025 |
2024 |
2023 |
| Cobalt streaming |
30 |
19 |
14 |
| Gold streaming |
185 |
122 |
134 |
| Fixed revenue - Contract liabilities realized |
215 |
141 |
148 |
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| Cobalt streaming |
11 |
4 |
3 |
| Gold streaming |
279 |
102 |
93 |
| Variable revenue - Additional payments received |
290 |
106 |
96 |
Vale sold to Wheaton Precious Metals
Corp. (“Wheaton”) an aggregate total of (i) 75% of the gold produced as a by-product at the Salobo copper mine, in Brazil,
over the life of the mine, and (ii) 70% of the gold produced as a by-product at the Sudbury nickel mines, in Canada, until 2034.
Vale received upfront payments of
(i) US$1.9 billion in 2013, (ii) US$900 in 2015 and (iii) US$800 in 2016. Vale also receives additional payments equal to the lower of
400 United States dollars per ounce of gold delivered and the market price on the delivery date.
Under the Salobo streaming agreement,
Vale was entitled to receive an additional payment if the copper processing capacity reached a certain production level. The production
levels were achieved in 2023 and 2025, in which Vale received additional payments of US$370 and US$144, respectively, which were recorded
in the streaming liabilities.
In addition, Wheaton will be required
to make annual payments of US$8.5 for a 10-year period should the Salobo complex achieve specific mining rates and copper feed grades.
In June 2018, Vale sold to Wheaton
and Cobalt 27 Capital Corp. (“Cobalt 27”) a combined 75% of the cobalt produced as a by-product at its Voisey’s Bay
mine starting January 1, 2021, for the amount of US$690. Vale also receives additional payments of 20%, in average, of the cobalt prices
for each finished cobalt delivered. In February 2021, the stream originally sold to Cobalt 27 was transferred to the Anglo Pacific Group.
Accounting policy
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Streaming
transactions The Company bifurcates both streaming transactions in two identifiable components: (i) the sale of the
mineral rights and (ii) provisions of extraction services.
Sale of mineral rights
- The amount allocated to this component is recognized as revenue in the income statement when
the Company transfers ownership of the mineral rights to the counterparty. The cost related to the component sold is recognized in the
income statement at the same moment.
Extraction services
- The Company recognizes contract liabilities in the event it receives payments from customers
before a sale meets criteria for revenue recognition. Proceeds received under the terms of the streaming transaction allocated to this
component are accounted for as “streaming transactions” and included within liabilities.
Contract liability is initially
recognized at fair value, net of transaction costs incurred, and is subsequently carried at amortized cost and updated using the effective
interest rate method. Contract liability is released to the income statement based on the units of production, that is, revenue is calculated
based on volume produced compared to the total proved and probable reserves of gold or cobalt, which are reviewed and remeasured annually.
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