3. Information by business segment and by geographic area
The Company operated five reportable segments during this year: Ferrous Minerals, Coal, Base Metals, Fertilizers (presented as discontinued operations) and Others. The segments are aligned with products and reflect the structure used by Management to evaluate Company performance. The responsible bodies for making operational decisions, allocating resources and evaluating performance are the Executive Boards and the Board of Directors. The performance of the operating segments is assessed based on a measure of adjusted EBITDA.
The information presented to the Executive Board on the performance of each segment is derived from the accounting records, adjusted for reallocations between segments.
The main activities of the operating segments are as follows:
Ferrous minerals - Ferrous minerals comprises the production and extraction of iron ore, iron ore pellets and its logistic services (railroads, ports and terminals), manganese, ferroalloys and others ferrous products and services.
Coal - Coal comprises the extraction of metallurgical and thermal coal and its logistic services (railroads, ports and terminals).
Base metals - Base metals include the production and extraction of non-ferrous minerals, and are presented as nickel and its by-products (ferro-nickel, copper, gold, precious metals and others) and copper (copper concentrated).
Fertilizers (Discontinued operations) - Fertilizers include the production of the three major groups of nutrients (potash, phosphate and nitrogen) and other fertilizers products. The group of assets related to this segment is classified as “Non-current assets and liabilities associated with non-current assets held for sale” (note 14).
Others - Other comprises sales and expenses of other products, services, research and evaluation, investments in joint ventures and associates of other business and contingencies not directly related to the core business.
a)Adjusted EBITDA
The definition of adjusted EBITDA for the Company is the operating income or loss excluding (i) the depreciation, depletion and amortization, (ii) results on measurement or sales of non-current assets, (iii) impairment, (iv) onerous contracts and plus (v) dividends received and interest from associates and joint ventures.
|
|
|
Year ended December 31, 2017 |
|
||||||||||||
|
|
|
Net operating |
|
Cost of goods |
|
Sales, |
|
Research and |
|
Pre operating |
|
Dividends |
|
Adjusted |
|
|
Ferrous minerals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Iron ore |
|
18,524 |
|
(7,950 |
) |
(284 |
) |
(88 |
) |
(181 |
) |
30 |
|
10,051 |
|
|
Iron ore Pellets |
|
5,653 |
|
(2,876 |
) |
(65 |
) |
(19 |
) |
(7 |
) |
81 |
|
2,767 |
|
|
Ferroalloys and manganese |
|
469 |
|
(278 |
) |
(12 |
) |
— |
|
(4 |
) |
— |
|
175 |
|
|
Other ferrous products and services |
|
483 |
|
(306 |
) |
5 |
|
(2 |
) |
— |
|
19 |
|
199 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,129 |
|
(11,410 |
) |
(356 |
) |
(109 |
) |
(192 |
) |
130 |
|
13,192 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Coal |
|
1,567 |
|
(1,354 |
) |
(44 |
) |
(14 |
) |
(4 |
) |
179 |
|
330 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base metals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nickel and other products |
|
4,667 |
|
(3,437 |
) |
(152 |
) |
(49 |
) |
(75 |
) |
— |
|
954 |
|
|
Copper |
|
2,204 |
|
(979 |
) |
(27 |
) |
(13 |
) |
— |
|
— |
|
1,185 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,871 |
|
(4,416 |
) |
(179 |
) |
(62 |
) |
(75 |
) |
— |
|
2,139 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Others |
|
400 |
|
(375 |
) |
(281 |
) |
(155 |
) |
(9 |
) |
97 |
|
(323 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total of continuing operations |
|
33,967 |
|
(17,555 |
) |
(860 |
) |
(340 |
) |
(280 |
) |
406 |
|
15,338 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations (Fertilizers) |
|
1,746 |
|
(1,606 |
) |
(102 |
) |
(12 |
) |
(25 |
) |
3 |
|
4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
35,713 |
|
(19,161 |
) |
(962 |
) |
(352 |
) |
(305 |
) |
409 |
|
15,342 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2016 |
|
||||||||||||
|
|
|
Net operating |
|
Cost of goods |
|
Sales, |
|
Research and |
|
Pre operating |
|
Dividends |
|
Adjusted |
|
|
Ferrous minerals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Iron ore |
|
15,784 |
|
(6,622 |
) |
(486 |
) |
(91 |
) |
(150 |
) |
10 |
|
8,445 |
|
|
Iron ore Pellets |
|
3,827 |
|
(2,002 |
) |
(73 |
) |
(13 |
) |
(22 |
) |
103 |
|
1,820 |
|
|
Ferroalloys and manganese |
|
302 |
|
(231 |
) |
(4 |
) |
— |
|
(11 |
) |
— |
|
56 |
|
|
Other ferrous products and services |
|
438 |
|
(269 |
) |
(8 |
) |
(2 |
) |
(4 |
) |
— |
|
155 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,351 |
|
(9,124 |
) |
(571 |
) |
(106 |
) |
(187 |
) |
113 |
|
10,476 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Coal |
|
839 |
|
(872 |
) |
35 |
|
(15 |
) |
(41 |
) |
— |
|
(54 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base metals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nickel and other products |
|
4,472 |
|
(3,204 |
) |
(95 |
) |
(78 |
) |
(114 |
) |
4 |
|
985 |
|
|
Copper |
|
1,667 |
|
(924 |
) |
(25 |
) |
(5 |
) |
— |
|
— |
|
713 |
|
|
Other base metals products |
|
— |
|
— |
|
150 |
|
— |
|
— |
|
— |
|
150 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,139 |
|
(4,128 |
) |
30 |
|
(83 |
) |
(114 |
) |
4 |
|
1,848 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Others |
|
159 |
|
(259 |
) |
(157 |
) |
(116 |
) |
(1 |
) |
76 |
|
(298 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total of continuing operations |
|
27,488 |
|
(14,383 |
) |
(663 |
) |
(320 |
) |
(343 |
) |
193 |
|
11,972 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations (Fertilizers) |
|
1,875 |
|
(1,545 |
) |
(87 |
) |
(22 |
) |
(16 |
) |
4 |
|
209 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
29,363 |
|
(15,928 |
) |
(750 |
) |
(342 |
) |
(359 |
) |
197 |
|
12,181 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2015 |
|
||||||||||||
|
|
|
Net operating |
|
Cost of goods |
|
Sales, |
|
Research and |
|
Pre operating |
|
Dividends |
|
Adjusted |
|
|
Ferrous minerals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Iron ore |
|
12,330 |
|
(7,604 |
) |
(398 |
) |
(121 |
) |
(124 |
) |
22 |
|
4,105 |
|
|
Iron ore Pellets |
|
3,600 |
|
(2,121 |
) |
9 |
|
(4 |
) |
(24 |
) |
225 |
|
1,685 |
|
|
Ferroalloys and manganese |
|
162 |
|
(175 |
) |
1 |
|
— |
|
(19 |
) |
— |
|
(31 |
) |
|
Other ferrous products and services |
|
470 |
|
(341 |
) |
8 |
|
(3 |
) |
(2 |
) |
8 |
|
140 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,562 |
|
(10,241 |
) |
(380 |
) |
(128 |
) |
(169 |
) |
255 |
|
5,899 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Coal |
|
526 |
|
(839 |
) |
(140 |
) |
(22 |
) |
(61 |
) |
28 |
|
(508 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base metals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nickel and other products |
|
4,693 |
|
(3,393 |
) |
(154 |
) |
(103 |
) |
(411 |
) |
— |
|
632 |
|
|
Copper |
|
1,470 |
|
(903 |
) |
(32 |
) |
(8 |
) |
(1 |
) |
— |
|
526 |
|
|
Other base metals products |
|
— |
|
— |
|
230 |
|
— |
|
— |
|
— |
|
230 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,163 |
|
(4,296 |
) |
44 |
|
(111 |
) |
(412 |
) |
— |
|
1,388 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Others |
|
133 |
|
(139 |
) |
(160 |
) |
(134 |
) |
— |
|
35 |
|
(265 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total of continuing operations |
|
23,384 |
|
(15,515 |
) |
(636 |
) |
(395 |
) |
(642 |
) |
318 |
|
6,514 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations (Fertilizers) |
|
2,225 |
|
(1,469 |
) |
(37 |
) |
(82 |
) |
(70 |
) |
— |
|
567 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
25,609 |
|
(16,984 |
) |
(673 |
) |
(477 |
) |
(712 |
) |
318 |
|
7,081 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA is reconciled to net income (loss) as follows:
From Continuing operations
|
|
|
Year ended December 31 |
|
||||
|
|
|
2017 |
|
2016 |
|
2015 |
|
|
Adjusted EBITDA from continuing operations |
|
15,338 |
|
11,972 |
|
6,514 |
|
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization |
|
(3,708 |
) |
(3,487 |
) |
(3,719 |
) |
|
Dividends received and interest from associates and joint ventures |
|
(406 |
) |
(193 |
) |
(318 |
) |
|
Impairment and other results on non-current assets |
|
(294 |
) |
(1,240 |
) |
(8,708 |
) |
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
10,930 |
|
7,052 |
|
(6,231 |
) |
|
Financial results, net |
|
(3,019 |
) |
1,843 |
|
(10,654 |
) |
|
Equity results in associates and joint ventures |
|
98 |
|
309 |
|
(445 |
) |
|
Impairment and other results in associates and joint ventures |
|
(180 |
) |
(1,220 |
) |
(349 |
) |
|
Income taxes |
|
(1,495 |
) |
(2,781 |
) |
5,249 |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) from continuing operations |
|
6,334 |
|
5,203 |
|
(12,430 |
) |
|
Net income (loss) attributable to noncontrolling interests |
|
21 |
|
(8 |
) |
(501 |
) |
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Vale’s stockholders |
|
6,313 |
|
5,211 |
|
(11,929 |
) |
|
|
|
|
|
|
|
|
|
From Discontinued operations
|
|
|
Year ended December 31 |
|
||||
|
|
|
2017 |
|
2016 |
|
2015 |
|
|
Adjusted EBITDA from discontinued operations |
|
4 |
|
209 |
|
567 |
|
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization |
|
(1 |
) |
(347 |
) |
(310 |
) |
|
Dividends received and interest from associates and joint ventures |
|
(3 |
) |
(4 |
) |
— |
|
|
Impairment of non-current assets |
|
(885 |
) |
(1,738 |
) |
(157 |
) |
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
(885 |
) |
(1,880 |
) |
100 |
|
|
Financial results, net |
|
(28 |
) |
20 |
|
(147 |
) |
|
Equity results in associates and joint ventures |
|
(2 |
) |
3 |
|
6 |
|
|
Income taxes |
|
102 |
|
630 |
|
(149 |
) |
|
|
|
|
|
|
|
|
|
|
Loss from discontinued operations |
|
(813 |
) |
(1,227 |
) |
(190 |
) |
|
Net income (loss) attributable to noncontrolling interests |
|
(7 |
) |
2 |
|
10 |
|
|
|
|
|
|
|
|
|
|
|
Loss attributable to Vale’s stockholders |
|
(806 |
) |
(1,229 |
) |
(200 |
) |
|
|
|
|
|
|
|
|
|
b)Assets by segment
|
|
|
Year ended December 31, 2017 |
|
||||||||
|
|
|
Product inventory |
|
Investments in |
|
Property, plant and |
|
Additions to |
|
Depreciation, |
|
|
Ferrous minerals |
|
1,770 |
|
1,922 |
|
36,103 |
|
2,679 |
|
1,767 |
|
|
Coal |
|
82 |
|
317 |
|
1,719 |
|
118 |
|
297 |
|
|
Base metals |
|
1,009 |
|
13 |
|
23,603 |
|
1,010 |
|
1,614 |
|
|
Others |
|
6 |
|
1,316 |
|
1,946 |
|
24 |
|
30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
2,867 |
|
3,568 |
|
63,371 |
|
3,831 |
|
3,708 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2016 |
|
||||||||
|
|
|
Product inventory |
|
Investments in |
|
Property, plant and |
|
Additions to |
|
Depreciation, |
|
|
Ferrous minerals |
|
1,134 |
|
1,808 |
|
34,834 |
|
3,246 |
|
1,618 |
|
|
Coal |
|
126 |
|
285 |
|
1,907 |
|
612 |
|
191 |
|
|
Base metals |
|
1,110 |
|
12 |
|
23,372 |
|
1,057 |
|
1,658 |
|
|
Others |
|
3 |
|
1,591 |
|
2,177 |
|
36 |
|
20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
2,373 |
|
3,696 |
|
62,290 |
|
4,951 |
|
3,487 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(i) Goodwill is allocated mainly in ferrous minerals and base metals segments in the amount of US$2,157 and US$1,953 in December 31, 2017 and US$1,246 and US$1,835 in December 31, 2016, respectively.
(ii) Includes only cash effect.
(iii) Refers to amounts recognized in the income statement.
c) Investment in associates and joint ventures, intangible and property, plant and equipment by geographic area
|
|
|
December 31, 2017 |
|
December 31, 2016 |
|
||||||||||||
|
|
|
Investments |
|
Intangible |
|
Property, |
|
Total |
|
Investments |
|
Intangible |
|
Property, |
|
Total |
|
|
Brazil |
|
2,993 |
|
6,231 |
|
33,782 |
|
43,006 |
|
3,172 |
|
4,720 |
|
34,509 |
|
42,401 |
|
|
Canada |
|
— |
|
2,118 |
|
10,967 |
|
13,085 |
|
— |
|
2,002 |
|
10,267 |
|
12,269 |
|
|
Americas, except Brazil and Canada |
|
200 |
|
— |
|
427 |
|
627 |
|
185 |
|
— |
|
30 |
|
215 |
|
|
Europe |
|
— |
|
— |
|
394 |
|
394 |
|
— |
|
— |
|
639 |
|
639 |
|
|
Indonesia |
|
— |
|
— |
|
2,787 |
|
2,787 |
|
— |
|
— |
|
2,972 |
|
2,972 |
|
|
Asia, except Indonesia |
|
372 |
|
— |
|
1,100 |
|
1,472 |
|
339 |
|
— |
|
1,201 |
|
1,540 |
|
|
Australia |
|
— |
|
— |
|
45 |
|
45 |
|
— |
|
— |
|
43 |
|
43 |
|
|
New Caledonia |
|
— |
|
— |
|
2,965 |
|
2,965 |
|
— |
|
— |
|
3,087 |
|
3,087 |
|
|
Mozambique |
|
— |
|
143 |
|
1,532 |
|
1,675 |
|
— |
|
149 |
|
1,715 |
|
1,864 |
|
|
Oman |
|
— |
|
1 |
|
868 |
|
869 |
|
— |
|
— |
|
956 |
|
956 |
|
|
Other regions |
|
3 |
|
— |
|
11 |
|
14 |
|
— |
|
— |
|
— |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
3,568 |
|
8,493 |
|
54,878 |
|
66,939 |
|
3,696 |
|
6,871 |
|
55,419 |
|
65,986 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
d) Net operating revenue by geographic area
|
|
|
Year ended December 31, 2017 |
|
||||||||
|
|
|
Ferrous |
|
Coal |
|
Base metals |
|
Others |
|
Total |
|
|
Americas, except United States and Brazil |
|
593 |
|
— |
|
1,009 |
|
70 |
|
1,672 |
|
|
United States of America |
|
355 |
|
— |
|
872 |
|
83 |
|
1,310 |
|
|
Germany |
|
1,097 |
|
— |
|
292 |
|
— |
|
1,389 |
|
|
Europe, except Germany |
|
1,721 |
|
396 |
|
1,985 |
|
11 |
|
4,113 |
|
|
Middle East/Africa/Oceania |
|
1,768 |
|
171 |
|
13 |
|
— |
|
1,952 |
|
|
Japan |
|
1,927 |
|
130 |
|
399 |
|
— |
|
2,456 |
|
|
China |
|
13,442 |
|
— |
|
576 |
|
— |
|
14,018 |
|
|
Asia, except Japan and China |
|
1,332 |
|
711 |
|
1,539 |
|
— |
|
3,582 |
|
|
Brazil |
|
2,894 |
|
159 |
|
186 |
|
236 |
|
3,475 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating revenue |
|
25,129 |
|
1,567 |
|
6,871 |
|
400 |
|
33,967 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2016 |
|
||||||||
|
|
|
Ferrous |
|
Coal |
|
Base metals |
|
Others |
|
Total |
|
|
Americas, except United States and Brazil |
|
334 |
|
20 |
|
1,172 |
|
— |
|
1,526 |
|
|
United States of America |
|
232 |
|
— |
|
749 |
|
24 |
|
1,005 |
|
|
Germany |
|
1,077 |
|
— |
|
302 |
|
— |
|
1,379 |
|
|
Europe, except Germany |
|
1,482 |
|
218 |
|
1,552 |
|
17 |
|
3,269 |
|
|
Middle East/Africa/Oceania |
|
1,252 |
|
95 |
|
20 |
|
— |
|
1,367 |
|
|
Japan |
|
1,292 |
|
121 |
|
328 |
|
— |
|
1,741 |
|
|
China |
|
11,985 |
|
63 |
|
699 |
|
— |
|
12,747 |
|
|
Asia, except Japan and China |
|
912 |
|
305 |
|
1,173 |
|
— |
|
2,390 |
|
|
Brazil |
|
1,785 |
|
17 |
|
144 |
|
118 |
|
2,064 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating revenue |
|
20,351 |
|
839 |
|
6,139 |
|
159 |
|
27,488 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2015 |
|
||||||||
|
|
|
Ferrous |
|
Coal |
|
Base metals |
|
Others |
|
Total |
|
|
Americas, except United States and Brazil |
|
359 |
|
18 |
|
1,122 |
|
— |
|
1,499 |
|
|
United States of America |
|
30 |
|
— |
|
804 |
|
21 |
|
855 |
|
|
Germany |
|
1,042 |
|
— |
|
391 |
|
— |
|
1,433 |
|
|
Europe, except Germany |
|
1,464 |
|
102 |
|
1,530 |
|
— |
|
3,096 |
|
|
Middle East/Africa/Oceania |
|
1,009 |
|
97 |
|
84 |
|
— |
|
1,190 |
|
|
Japan |
|
1,512 |
|
74 |
|
373 |
|
— |
|
1,959 |
|
|
China |
|
8,400 |
|
44 |
|
651 |
|
— |
|
9,095 |
|
|
Asia, except Japan and China |
|
1,081 |
|
169 |
|
990 |
|
— |
|
2,240 |
|
|
Brazil |
|
1,665 |
|
22 |
|
218 |
|
112 |
|
2,017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating revenue |
|
16,562 |
|
526 |
|
6,163 |
|
133 |
|
23,384 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounting policy
Revenue is recognized when Vale transfers to its customers all of the significant risks and rewards of ownership of the product sold or when the services are rendered. Net revenue excludes any applicable sales taxes and is recognized at the fair value of the consideration received or receivable to the extent that it is probable that economic benefits will flow to Vale and the revenues can be reliably measured.
Depending on the contract, revenue sales can be recognized when the product is available at the loading port, loaded on the ship, at the port of discharge or at the custumer’s warehouse. Service revenues are recognized in the amount by which the services are rendered and accepted by the customer.
In some cases, the sale price is determined on a provisional basis at the date of sale and adjustments to the sales price subsequently occur based on movements in the quoted market or contractual prices up to the date of final pricing. Revenue is recognized based on the estimated fair value of the total consideration receivable, and the provisionally priced sales mechanism embedded within these sale arrangements has the character of a derivative. Accordingly, the fair value of the final sales price adjustment is re-estimated continuously and changes in fair value are recognized as operational revenue in the income statement.
Amounts billed to customers for shipping related to products sold by the Company are recognized as revenue when the Company is responsible for shipping. Shipping costs are recognized as operating costs.
Commodity price risk — The commodity price risk arises from volatility of iron ore, nickel, copper and coal prices. The Company is mostly exposed to the fluctuations in the iron ore and copper price. The selling price these products can be measured reliably at each period, since the price is quoted on an active market.
As of December 31, 2017, the Company had 33 million tons (2016: 36 million tons) provisionally priced based on iron ore forward prices and 106 thousand tons (2016: 116 thousand tons) provisionally priced based on copper forward prices. The final price of these sales will be determined during the first quarter of 2018. A 10% change in the price of iron ore realized on the provisionally priced sales, all other factors held constant, would increase or reduce net income by US$227. A 10% change in the price of copper realized on the provisionally priced sales, all other factors held constant, would increase or reduce net income by US$86.