12. Impairment and result on disposal of non-current assets

The Company tested the recoverability of the cash-generating units ("CGUs") for which impairment indicators were identified and, then, tested the recoverability of the CGUs and group of CGUs for which goodwill has been allocated. The recoverable amount of each CGU under the Company’s impairment test was assessed using the fair value less costs of disposal model (“FVLCD”), through discounted cash flow techniques, which is classified as “level 3” in the fair value hierarchy, taking into consideration offers and purchase agreements, when applicable.

The cash flows were projected in real terms and discounted using a post-tax discount rate expressed in real terms, representing an estimate of the rate a market participant would apply, considering the time value of money and the specific risk of the asset. The Company used the weighted average cost of capital (“WACC”) of the mining segment as a starting point for determining the discount rates, with appropriate adjustments for the risk profile of the countries in which the individual CGU operate.

a) Impairment of Vale Base Metals' assets

In the last quarter of 2025, the Company completed and approved its strategic plan process, which includes a review of the key assumptions used in the Company’s long-term projections. The conclusion of this process indicated a reduction ranging from 11% to 21% in the projected nickel prices, mainly due to the oversupply in the global nickel market, which was considered as an impairment trigger for the nickel CGUs. Thus, Vale carried out impairment tests for the nickel CGUs.

After performing the impairment tests for nickel CGUs individually, the Company carried out an impairment test for the group of nickel CGUs in Canada, to which goodwill has been allocated.

The Company did not identify any impairment indicators associated with the Copper CGUs.

2025 impairment test for the nickel assets (excluding goodwill)

The key assumptions used in the tests, which led to the recognition of an impairment loss in the amount of US$1,745 in the CGU Vale Newfoundland and Labrador, located in Canada, are presented in the table below:

(i) Includes the operations of Vale Newfoundland and Labrador, which comprise two nickel mines, a concentrator plant, and a refinery.

(ii) Includes the operations of Vale Canada Limited, which comprise six nickel mines, a concentrator plant, one smelter, and four refineries.

(iii) Includes the operations of Mineração Onça Puma, which comprise a nickel mine and two furnaces.

(iv) Includes Vale’s 33.88% interest in PT Vale Indonesia (note 30).

2024 impairment test for the nickel assets (excluding goodwill)

At the end of the 2024 fiscal year, the Company identified impairment indicators related to the nickel operations in Thompson and Newfoundland and Labrador, both located in Canada. For both tests, the key assumptions used were:

Nickel concentrate is shipped from Thompson to be processed into finished and sealable material at another Vale Canada asset, and then sold and delivered to customers. Therefore, the assets associated with the Thompson operation are part of one of the CGUs related to the nickel operations of the subsidiary Vale Canada Limited. In January 2025, within the subsequent-events period for the financial statements for 2024, the Company initiated a strategic review to evaluate alternatives, including the potential sale, of the assets associated with the Thompson operation.

The Company reviewed the business plan for this operation according to the new strategy and measured the recoverable amount, which resulted in an impairment loss of US$1,405 presented in the income statement for the year ended December “reversal (impairment) and result on disposal of non-current assets, net”. The carrying amount of this CGU after the impairment loss was US$4,196 as of December 31, 2024.

Since 2015, the Company has been developing the Voisey’s Bay mine expansion project in the Vale Newfoundland and Labrador operation, a subsidiary of the Company that is considered a CGU. This project represented a significant shift from open-pit-only to two underground mining operations at Voisey's Bay site.

In December 2024, the expansion project was concluded, which was the beginning of its ramp-up phase. The Company identified operational challenges related to the production and processing ore extracted from the underground mines, resulting in the revision of production costs and sustaining investments for this CGU.

Due to the increase in operating and investment costs associated solely with this CGU, Vale considered it as a triggering event for impairment testing. The test resulted in an impairment loss of US$540 presented in the income statement as “reversal (impairment) and result on disposal of non-current assets, net”. The carrying amount of this CGU after the impairment loss was US$2,405 as of December 31, 2024.

Goodwill allocated to nickel CGUs in Canada

In 2006, the Company recorded goodwill arising from the acquisition of Inco Limited, current Vale Canada Limited, which is allocated to the Canadian nickel CGUs and whose recoverability is assessed annually.

In 2025, the impairment test resulted in an impairment loss of US$1,735, mainly due to the reduction in projected nickel prices. This loss represented the full write-off of the goodwill allocated to the Canadian nickel operations and is presented as “Impairment and result on disposal of non-current assets, net” in the income statement.

b) Impairment of iron ore and pellet assets

The Company did not identify any changes in circumstances or indicators that could result in a reduction in the recoverable amount of the Iron Ore and Pellets CGU. Nevertheless, the Company performed the impairment test for the goodwill, as summarized below.

Goodwill allocated to iron ore and pellet operations

Includes the goodwill arising from the acquisition of iron ore businesses and the goodwill resulting from the merger of Valepar into Vale S.A. in 2017.

c) Gains (losses) arising of the purchase and sale of non-current assets (note 31)

In the past few years, the Company has invested and divested on assets, as detailed in note 31 to these financial statements. The result of part of these transactions is presented as “Impairment and result on disposal of non-current assets, net”, as summarized below: