Pellets Southeastern System 7,678 7,748 7,000 22,940 20,878 -0.9% 9.7% 9.9% Hispanobras (Tubarão 4) 1,192 1,126 1,084 3,446 3,299 5.9% 10.0% 4.5% Kobrasco (Tubarão 7) 1,134 1,201 694 3,506 2,752 -5.6% 63.4% 27.4% Southern System 2,600 2,518 2,749 7,664 6,622 3.3% -5.4% 15.7% Vargem Grande 1,602 1,599 1,792 4,827 4,804 0.2% -10.6% 0.5% Production overview Vales pellet production achieved a quarterly record of 12.8 Mt in 3Q17, 4.5% and 5.8% higher than in 2Q17 and 3Q16, respectively, mainly due to higher productivity and a reduction in the number of scheduled maintenance stoppages. Projects for restarting the São Luis and the Tubarão II pellet plants are on schedule, with their start-up envisioned for the first half of 2018. Southeastern system Production at the Tubarão pellet plants Tubarão 3, 4, 5, 6, 7 and 8 reached 7.7 Mt in 3Q17, remaining in line with 2Q17 and 9.7% higher than in 3Q16, mainly due to the scheduled maintenance stoppage of Tubarão 7 in July and August of 2016. Southern system The Fábrica pellet plant achieved a production level of 1.0 Mt in 3Q17, 8.6% higher than in 2Q17 due to higher availability of feed, and 4.4% higher than in 3Q16 due to higher productivity in the plant. 8 Oman2,488 1,9482,3236,8006,09927.7%7.1%11.5% PELLETS12,766 12,215 12,07237,40433,5984.5%5.8%11.3% Fábrica9989199562,8371,8178.6%4.4%56.1% Tubarão 81,793 1,8731,7895,3495,302-4.2%0.3%0.9% Nibrasco (Tubarão 5 and 6) 2,464 2,3782,2837,2446,1563.6%7.9%17.7% Itabrasco (Tubarão 3)1,095 1,1691,1503,3953,369-6.4%-4.8%0.8% % change 000 metric tons3Q17 2Q173Q169M179M16 3Q17/2Q17 3Q17/3Q16 9M17/9M16