Good morning, ladies and gentlemen. Welcome to Vale's conference call to discuss the second quarter of 2021 results. At this time, all participants are in a listen-only mode. Later, we'll conduct a question and answer session, and instructions will be given at the time. If you should require assistance during the call, please press the star followed by zero. As a reminder, this conference is being recorded, and the recording will be available on the company's website at vale.com at Investors Link. This conference call is accompanied by a slide presentation, also available at Investors Link at the company's website and is transmitted via internet as well. The broadcasting via internet, both the audio and the slides change, has a few seconds delay in relation to the audio transmitted via phone. Before proceeding, let me mention the forward-looking statements are being made under the Safe Harbor of the Securities Litigation Reform Act of 1996. Actual performance could differ materially from that anticipated in any forward-looking comments as a result of macroeconomic conditions, market risks, and other factors. With us today are Mr. Eduardo de Salles Bartolomeo, Chief Executive Officer. Mr. Luciano Siani Pires, Executive Vice President, Finance and Investor Relations. Mr. Marcello Spinelli, Executive Vice President, Iron Ore. Mr. Mark Travers, Executive Vice President, Base Metal. Mr. Carlos Medeiros, Executive Vice President, Safety and Operational Excellence, and Mr. Alexandre D'Ambrosio, Executive Vice President, Legal and Tax. First, Mr. Eduardo Bartolomeo will proceed to the presentation on Vale's second quarter 2021 performance, and after that, he'll be available for questions and answers. It's now my pleasure to turn the call over to Mr. Eduardo Bartolomeo. Sir, you may now begin. Okay. Thank you. Good morning, everyone. First of all, I hope you're all doing well. As we have done since the beginning of the pandemic, we kept our guards up in the second quarter of 2021 with all the safety and prevention procedures for COVID-19. Safety, people, and reparation. These words have been our priority since 2019 and continue to inspire our actions. We have made progress in repairing Brumadinho. We are working with the authorities to implement the BRL 37.7 billion integral reparation agreement signed in February this year. While the authorities are structuring the work fronts, Vale continue its actions for social, environmental, and socioeconomic reparation. In the second quarter of 2021, among other initiatives, we launched the social strengthening program in 10 municipalities and along the Paraopeba River, and we are completing a new pipeline to supply the metropolitan region of Belo Horizonte. This delivery is a major step forward in ensuring water safety for nearly 6 million people. The reparation of individual damages also continues to advance. Since 2019, more than 10,700 people have entered into civil or labor compensation agreement with Vale, totaling nearly BRL 2.7 billion. As you can see, we are repairing Brumadinho in a quick, fair, and agile way. We have advanced in the safety of our dams as well. In the first semester, we removed the emergency level of four structures and reduced the emergency level of another two. In the upstream dam decategorization program, we completed the works of the Fernandinho Dam at the Vargem Grande Complex. Since 2019, six upstream structures have been eliminated. We also completed the works of the containment structures downstream of Forquilhas and Grupo dams. We are also advancing with the works for B3/B4 and Sul Superior dams. Earlier this month, we started activities to remove the tailings with unmanned equipment. In addition, our dam management model also continues to improve. We have appointed an independent tailings review board, the ITRB, to each of our iron ore corridors. This practice is in line with the Global Industry Standard on Tailings Management, the GISTM. By the way, we are in line to adhere to GISTM in due time. We continue to make progress in the culture transformation towards a safer Vale. We have also made progress on our ESG commitments. This quarter, we detail our strategy to achieve our 33% reduction targets for Scope one and two emissions with an estimated investment between $4 billion-$6 billion. As I said at the last Vale Day, Vale is uniquely positioned to lead the transition to a low carbon mining. We have a high-quality portfolio to support steel decarbonization. We are a leader in renewable energy with around 90% of our global consumption from clean sources. We operate sustainably, protecting 1 million hectares of forest, about 80% of which in the Amazon rainforest. As for our ESG Gap Action Plan, we closed another gap with the establishment of a formal due diligence methodology for human rights. This process assesses and addresses human rights risks and impacts. It will be implemented across all of our operations and critical projects, starting with 14 operations in Brazil in 2021. As you can see, we remain firm with our ambition to transform Vale into a ESG benchmark. Well, now talking about the operation performance of our business, our adjusted EBITDA in the second quarter was an all-time record at $11.2 billion, given the increased sales volume of iron ore and good market conditions. We completed another quarter of increased iron ore production, growing 9 million tons compared to the same period of the last year. In the first half, we were 60 million tons higher than the first half of the last year. We have reached as well an annual capacity of 335 million tons, and we expect to operate with an average production of 1 million tons per day in the second half of the year. We remain confident that we will achieve our production guidance for 2021. Spinelli will give more color on that. In nickel, our performance was mainly impacted by stoppage of the Sudbury operations in June. We continue to negotiate a collective labor agreement for the next five years. In copper, we recover part of the performance compared to the first quarter by accelerating the implementation of a new safety and maintenance process in Salobo and Sossego towards a stronger second half. In spite of this, our portfolio of nickel projects has made strides to ensure the continued delivery of quality, responsibly sourced material to the market. In June, we had the first production of the ore from Reid Brook underground mine at the Voisey's Bay mine expansion project. We also signed an agreement for the Bahodopi Nickel Processing facility, Indonesia with Tsingshan, and the final investment decision is expected in the next six months. Finally, in Thompson, Manitoba, we are also evaluating investments to extend the mine's activities for 10 years. In relation to our cash strengths, we concluded the acquisition of Mitsui's stake in the coal and logistics operation in Mozambique. This is an important step for our divestment. The other is the conclusion of the ramp-up of the Moatize operations. We expect to reach a run rate of 50 million tons per year in the second half. We continue to seek alternatives for a responsible divestment in that business. Talking about capital allocation, we provided further evidence of our commitment to return value to our shareholders with the distribution of extraordinary dividends of close to $2.2 billion in June. Summing up March dividends, Vale returned around $6.2 billion to shareholders in the first half of 2021. In September, we will distribute at least another $5.3 billion according to our policy and based on the results of the first half. The final number, including extraordinary dividends, will be defined as usual in September. As I said in the last quarter, without compromising the continuity of dividends above the minimum policy, we continued with the share buyback program announced in April. Far, the program has disbursed $2.6 billion and is 45% complete. Disciplining capital allocation is part of our de-risking, and I'm confident that we'll deliver on our commitment to maximize returns for our shareholders in the long term. To conclude, I just want to emphasize that we're still guided by de-risking, reshaping, and rerating Vale. We have effectively advanced in the de-risking. We are repairing Brumadinho fairly and quickly. We are building a culture of safety and operational excellence. We continue to stabilize our operations. Our ESG commitments are fundamental to our strategy, and we continue with a strict capital discipline focused on the return to our shareholders. In reshaping, we establish a good case with the VNC exit, and we are also looking for a responsible exit in Mozambique. The rerating will happen as we evolve in our deliveries, which bring us closer to our ambition of being a safer company with more stable and reliable operations, increasing our investors' perception of value. To make that happen, we are working very hard, and I want to thank our 70,000 employees, our contractors, suppliers, and customers for their resilience, high guard, and commitment to our culture transformation. Now I'll hand over to Spinelli, who will give more details about the performance in iron ore. Thank you very much. Thank you, Eduardo. Good afternoon, everyone. Let's start bringing an outlook about the production of this year. We want to reinforce our production guidance. It's a range between 315 and 335. We increased, as Eduardo said, 16 million tons in the first half comparing to last year, 12% of production. If you don't add any more volumes the second half, you can say that we are in the lower range of the guidance. What can make us believe that we can deliver more in the second half? In my right-hand side, I have some talk that I want to share with you. Firstly, we are in a dry season now. You know our seasonality. We've been running our operations 1 million tons a day. Second, East Range. We anticipated the ramp-up of East Range. The previous plan was for third quarter. Now we are in full capacity in East Range. Third, despite the limitation to produce more with wet processing in Brucutu, our team, in a teamwork, we could add additional volumes for high silica there due to the market condition that we have nowadays. Four, Fábrica is back. That's news from last week. Here not only volume, but we can now reduce the risk and have the full capacity of Fábrica. Last but not least, we have a very brand-new asset now, Maravilha III, since the last Tuesday is running. We can now bring the wet process in full in Vargem Grande. We are waiting for an additional capacity in a couple of weeks with the resume of the conveyor belt, the long-distance conveyor belt that is over the Vargem Grande dam. Let's move to next slide. I can give you an update about the resumption plan. Since the last conference call, we had several achievements. I want to reconcile the numbers here with you. We left last quarter with 327 million tons of capacity. We added with East Range, +2, high silica Brucutu, +5, Fábrica full capacity since last week, +4, in Maravilha III, +4. The sum is 342, we need to decrease the capacity that we lost in Itabira. We start this year saying that the capacity of Itabira this year should be -9. After hard work in Itabira handling the materials, we could reduce this impact to -2. As I said at last conference call, with several small delays in other pits, we have a -5. The net number is 335 of capacity today. Next slide, please. What we expect for the second half. As I mentioned, Vargem Grande, we want to unlock the capacity to the end of this quarter, +6 million tons. Also in S11D, we have the ABON crusher. We already installed one. We have another, the second one this year. We'll have the other two for next year. About Brucutu and Torto Dam, we announced in our production report that we have now another startup for Torto second half of next year. Torto Dam is under construction, is going well, but we decide to have some extra works to guarantee all the safety standard for that dam. I want to remind you that we need some extra time to have the final permit from Maravilha III that already had the permits. That's our new forecast. For that site in Brucutu, we also have more two initiatives to recover capacity. We have the filtration that is under construction and also Laranjeiras dam that we're not using today, we have a plan to bring back next year. Despite this delay in Torto, we partially offset the capacity of Torto bringing more 5 million tons with high silica in Brucutu and also 5 million tons in Itabira, as I mentioned, that we reduced the problem since the beginning of the year. To conclude, in our roadmap to 400 million tons, it's important to say that we are also with projects online. We have the filtration in Itabira, in Brucutu. In the north, we have Gelado and S11D +10, the S11D 100 million tons that we expect to add capacity in the end of 2022. I hand over to Luciano Siani. Thank you, Marcello. A few remarks on each of the businesses. As you saw, the performance of costs, there was an important increase. On costs before third-party purchases towards $17.8 per ton. We're now expecting to end the year between $16 and $16.5. There were one-offs in this quarter. Most importantly, the demurrage costs increased a lot because of the repairs in the ship loader in the north and the queue of vessels increased. We're now feeling some inflationary pressures. Diesel costs have increased a lot. Mining parts, we're starting to see some service inflation. Still with the dilution of fixed costs, we expect this decline over the next quarters. Reminder that Q3 will still be impacted by the carryover of the higher cost production from Q2 through inventories. In Q4, you should see the full at least $1.5 decline, compared to current levels. The opportunities going forward to reduce costs, first and foremost, is to unwind all the COVID expenditures if we continue to progress in controlling the pandemic. Today, Iron Ore spends about $150 million a year on costs and expenses just on the pandemic measures. On costs alone, this is about $0.30 per ton. We expect to start unwinding this soon. We have the normalization of operations. Timbopeba, Fábrica, those who already reached full capacity should start to post better cost performance in the coming quarters as well. Finally, we did have an increase in maintenance expenses related to the catch-up that we're doing. We're implementing the VPS, Vale Production System model, requires systematic maintenance to go from the prior levels of 20%-30% of total maintenance activities towards 70%-80%. We're getting very close to that. Once we have most of the maintenance being done systematically, we should normalize maintenance costs as well. On the pellet side, just call your attention to the substantial increase in realized prices from $192 to $255. A reminder that this $255 includes a mix between CFR sales and FOB sales, which deduct the freight rates. Also that increase should have been even higher if it wasn't for the fact that an important fraction of the pellet sales, they have its prior quarter prices that command those sales. Therefore, the price increases in the second quarter have not yet gone through the pricing systems for pellets. Actually, pellet premiums are around $60 for blast furnace pellets and $70 on top of the 65% for direct reduction pellets. The premiums increased substantially in the quarter. We're now also selling more of direct reduction pellets, which command a higher premium, so that explains that very healthy increase in pellet premiums. Also that highlights the opportunity that we have ahead because two of our major operations, Itabira and Brucutu, which are performing well below potential, awaiting the filtration works and the tailings dams works. These are the ones who produce pellet feed to supply our pellet plants. Therefore, once they come back, hopefully we will start to normalize our pellet production and take advantage of these very high premiums. In base metals, I think we missed consensus by maybe 12%, 15% on base metals EBITDA. Perhaps that was because of the assessment that the market made about the impact of the Sudbury strike. Just a reminder, Sudbury is a polymetallic producer. Not only nickel production suffered, but also copper production, by-product production. Sudbury does have a very large impact on our operations. Even if we resolve quickly the strike, we will still have many weeks until we normalize. Also we have some major maintenance program, the regular 18-month scheduled maintenances to be done over the next few weeks as well in the surface facilities in Sudbury. Finally, on coal. In June, we started to consolidate the results of the business and the corridor, the logistics corridor. As a result, EBITDA for the month of June was -$12 million. A significant improvement. The prior months in April and May, we were -$60 million, -$50 million every month. Already, the benefits for the coal performance are kicking in, and therefore, with the ramp-up and the current pricing environment, we do expect to reach positive EBITDA in the second half of this year. Let's now move straight to Q&A. Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. If you have a question, please press the star key followed by one on your telephone. Now, if at any time you would like to remove yourself from the questioning queue, press star. Please restrict your questions to two at a time. Our first question comes from Mr. Carlos De Alba with Morgan Stanley. Good afternoon for you guys in Brazil. Hope you are doing well. The question I had first is on money returns to shareholders. What do you see with the potential increase in dividend taxes, the combination going forward of dividends and share buybacks? Also, if you can provide any color on the caps to future dividends, at least in the second half of the year, based on their balance sheet accounts, the capital reserve account, and the net profit, or retained earnings accounts. That would be very useful. Then, if I may ask, just on Moatize, Luciano, the BRL 12 million negative EBITDA in June versus the BRL 60 million-BRL 50 million in prior months, does that already reflect the benefit of the removal of the financial burden on the project finance, and the only thing that is then left to capture is the better economics as the ramp-up progresses? There's still some part of the project finance benefits or elimination of those costs that should be reflected on top of the improvement to -12? Thank you very much. Thank you, Carlos. Okay, Carlos. Let me begin, and Luciano, just any detail from you, okay? Yeah. I think as I mentioned in the beginning remarks, Carlos, we are being extremely disciplined in the capital allocation, right? Both in buybacks and in dividend payment. We did an extraordinary in March. Of course, we signaled that we have at least BRL 5.3 billion to be paid on September. This is at least because we are going to see market conditions and else to define what is the level of extraordinary dividends. As the specifics about the tax reform, we were questioned that in the previous call. We answered the following is that it's still on the make, by the way, is something that should be neutral. That is the plea from both government and legislators that would either increase if there is an How can I say that? A factor of taxation of dividends would be a reduction on the above line. It would be neutral. Anyhow, we won't change our dividend policy because of that, because our dividend policy and philosophy is to the surplus of maintaining our business health and running is going to go as soon as possible to the shareholders. With that, I think there is a specific question about reserves, and I think Luciano can explore that as well and give some more color of what I've just explained. Okay, Luciano, and then you go to Moatize, please. Okay. Carlos, at current levels of cash flow generation, there's no competition between buybacks and extraordinary dividends. We've been doing both, and we will continue to do both. The shareholder base is spread all around the world, different shareholders, they have different tax regimes. It is even possible that for some of them that are already taxing their dividends, that the current proposal could even be beneficial. We at least hope that it's going to be neutral, as Eduardo said, for the Brazilian shareholders. For some foreign shareholders, could even be beneficial. Because of this heterogeneity of the shareholder base, we would rather not take sides here and continue to do both. Because we can do both, and there's clearly appetite for both also in the shareholder base. As regards the reserves, this is going to be, if any, this is going to be a temporary effect because as you see, we are building reserves very quickly. There will naturally come a point, for example, perhaps in the first quarter, that the cash flows will be less than profits generated. For example, because in January we have to pay the annual income taxes, and it's natural that the free cash flow generated in the first quarter will be well below profits. If there is any restriction, it should be corrected very quickly. The other thing that we might do is that we did before, is to pace the dividends into quarters instead of just doing it in a lump sum. We're certainly going to pay more than the minimum in September, but we cannot rule out additional dividends in December as well, based on the profits generated in the third quarter. On Moatize, yes, the benefits of the removal of the project finance have fully kicked in into the -12. Now what we have to pursue going forward is the better economics, as you mentioned, of the ramp-up and higher sales to go into positive territory. Our next question comes from Mr. Jason Fairclough with Bank of America. Yep. [Non-English content], everybody. Good day from London. Just a couple quick ones from me. First, could we just talk about Samarco? It appears that some of the involved parties want to renegotiate some of the amounts that had already been agreed. Any color you can provide would be really helpful, and if there's any implications for the Brumadinho settlement. Secondly, just on your guidance, could we just talk about the guidance to return to 400 million tons by the end of 2022? I'm trying to understand what benefit you take from guiding from such an aggressive return to nameplate capacity when the market basically is not rewarding you for it. Any thoughts there? Luciano go ahead on Samarco, and then Spinelli and I can talk about the guidance, why it's so important to come back to the nameplate capacity. Hello? I'm sorry. I was in mute. Just a reminder here to give some part of the history in Mariana. In 2016, there was an agreement between the state governments, the justice institutions in Samarco, with support of the shareholders, and where 42 programs were defined to ensure full reparation and compensation amounts were also defined. In 2018, there was another agreement in which the public prosecutors joined in, and there was a review of the governance of the Renova Foundation. To improve the participation of those affected. This agreement in 2018 had already a provision that two years after its signing, the parties would sit together again to evaluate the effectiveness and the functioning of the programs. Not of the entire agreement, of each of the 42 programs. What Samarco is doing right now is precisely that. It's renegotiating the programs, the 42 programs as provided by the 2018 agreement. It is not negotiating a new agreement for Mariana. In fact, many of the programs of the agreement are quite advanced and would make no sense to discard the work already done by the Renova Foundation. Importantly, completely different from Brumadinho, where we were building an agreement from scratch. The mediation underway in the Supreme Court right now, it's aimed at improving execution and governance, respecting the parameters of the valid agreement, which were signed by everyone, and the compensation amounts have already been defined and fixed. There are no discussions about values in this mediation because the programs have already been defined, the cost of the programs are provisioned for, and the compensation amounts have already been defined. Everyone agrees on this. There's a letter of principles which is public that was signed in June at the beginning of the renegotiation progress, which states exactly that. We're reviewing the programs and we're not talking about values, we're not talking about compensation values which had already been fixed. Now, Spinelli on- Now- 400 million Eduardo guidance. Yeah. Yeah, I think Jason has an excellent question because it's very important to understand why we are focusing on coming back to the nameplate capacity. When you look at the numbers and you drill down on the three systems, the big numbers are coming where from? From Itabira, from Brucutu, from the north. We are talking about quality here. Then comes to our value over volume. We are not gonna put volume on the market as you're right if you will be not rewarded for that. At the same time, we are functioning and efficiently. We're operating half of Brucutu capacity, not at the total capacity of Itabira, and having opportunities to increase our operations in the north of Brazil. We're not saying that we're gonna produce 400 million tons. We're gonna say that we have the conditions to swing capacity to blend in an adequate form. That's what behind the building up back the capacity. We use it as we should do in our value over volume, in our commercial strategy. I think Spinelli can reiterate that. That's, I think, a very good question, Jason. Thanks for that. You were perfect, Eduardo. Just to complement, I think, in the different operational mode. A safer mode, using dry processing, and have the capacity to use if you need. That's the available capacity will be used with our mantra of margin over volume. Our next question comes from Mr. Alex Hacking with Citi. Thank you. Good morning. First question, Spinelli. Just to follow up on the iron ore capacity. When I look at figure 12, what assumptions in there are on the northern system? That was always designed with, I think, 230 million tons of capacity. When we look at production today, it still seems like it's operating below 200. What are you assuming on the ramp-up there of the northern system? Just to follow up on your previous comments. Again, you're talking there about getting to 450 million tons of capacity in the future. Are you saying that you would be willing to build up to that capacity level but operate very significantly below that at 350 million tons or something like that? Just one quick question on Moatize. What's the mix of met and thermal in that 50 million tons? Thanks. Thank you, Alex, for your question. Well, talking about the figures in the North system, yeah, we're designed to deliver the 230 million tons. We still have some construction there, the plus 10 S11D, and also to deliver the Gelado project. We had the ramp-up of S11D. We learned a lot last years to run a non-flexible system or less flexible system, but very interesting in terms of environment and efficient in terms of cost. We don't have the same flexibility in open pit operation. That was related to the ramp-up. We're still adjusting the crushers. It's important to say that we learned this in last quarter. When we have a lot of products, we have the tie-ins. We can have some temporary impact when we are adding some new capacity. We learned from this, and we are going to have in our plan for this near future. Talking about the 450, again, it is about a pipeline of products to offset some setback that we can have. In the mining business, you know very well we can have difficulties like we have now in Torto, related to a construction or a permit. Some small delays in six months, even one year. We have a pipeline to have reliability to deliver our numbers. If we don't see the necessity in the future, we just don't trigger the project in this pipeline. We must have the pipeline of 450 to guarantee that we can have the optionality to deliver the 400 million. That's the idea of 450. Spinelli, just to add on you, and I think Alex has the point. 450 is a more medium-term shot, then comes the swing capacity ability that you just mentioned, okay? That's why we need to build buffers for that and to swing capacity because we have very expensive mines as well. That's behind. It's a medium term. It's not that we're gonna use 450 next year or next two years or what else. Even next year for the 400. We need to establish our architecture as it was before. Then we define, as you said, margin over volume as we always do. Luciano could answer about the Moatize. It's about 55% met coal, 45% thermal. Our next question comes from Mr. Andreas Bokkenheuser with UBS. Thank you very much. Just a quick question from me on freight. I know we've talked a little bit about this before. We're obviously seeing a bit of freight cost inflation. Over the last few months, there's obviously been talk about new IMO rules on freight and carbon emissions and so on and so forth. Can you just remind us how does the freight contract reset work for you guys? I know you have long-term freight contracts and obviously freight rates are right now hovering around $27, $28 a ton. I guess the question is, if freight stays at this level, should we just expect even your medium to long-term freight contracts to be reset at that level? Do you have any kind of fixed freight contracts with some of your ship providers? That is my question. Thank you very much. Okay, Andreas, it's Spinelli here. Well, two points here to address. The first one is about the spot market today. You're right. It's surprisingly robust in this first half. I can say surprising because we can see the smaller vessels, Panamax, Handymaxes, they were really under pressure with high demand. It wasn't the same pattern of the Capesize business. The whole market was really robust in this first half. We still see this market in a higher level than we expect. We don't see this long-term trend considering the supply-demand in this market. The other question that you made related to IMO regulations. This is an important point. IMO is defining the regulation for some time. They set a goal for 2030 for a reduction of 40% of emissions. It was related only to new vessels after 2015. They are extending to existing vessels. What we see in our fleet, we don't have any impact in terms of cost, only the first generation of Valemax, as you can consider in maximum speed, a reduction of 2%, but it's very small impact. We don't see, on average, any problem in our fleet. The spot market, we can have. It's only for 2023, and after that, we have another regulation that you need to keep the efficiency 2% a year in a rank that we've defined A to E in terms of efficiency of the vessel. In this case, if you don't comply on that target, you're going to have a reduction of your power, and again, this can be something that we must track. At the same time, the business will react to this, bring in technology. I want to emphasize, Andreas, that we have our set of projects that is called Ecoshipping. We brought the Rotor Sails to a new vessel, and we're bringing out the air bubble lubrication. That's another initiative. Both of them can help a lot in a vessel to reduce the emissions. We have a set of projects that can make this evolution better, and we need to definitely talk to our ship owners to implement these initiatives. We are really aware about that. If I may add, Andreas, we will never, ever converge towards spot rates. More than 80% of our fleet has 30-year contracts, which is operating costs and a passthrough for fuel. For example, our second generation Valemaxes today are running at rates of $14, $15 per ton at these bunker prices. At lower prices, they can go as low as $10, $9 per ton, and that's it. The reason why we suffer with higher spot rates is because in the second half, we usually use spot to transport the excess production from the second half to the first half. This is not ever going to flow through the existing contracts for 85% of our fleet. Just to add a little information. Our fleet today is 170 ships, and we're also bringing more 18 Valemaxes and six Newc astlem axes this year. We'll be really well-protected for these fluctuations. Our next question comes from Mr. Amos Fletcher with Barclays. Yeah. Good morning, good afternoon, gentlemen. Thanks for taking my question. First question was just on the Sudbury strike. How long should we assume this takes to get resolved? I wanted to also ask about financial leverage. If we look at your pure financial leverage, you're in a net cash position with the business delivering very strong EBITDA prospectively. Could it be possible to take on a bit of modest levels of financial leverage to improve returns to shareholders even more? Thanks very much. Go ahead, Mark. Okay. Amos, we've been back at the table just in discussions with the USW for about 10, 11 days now. Those talks continue today. That is good news to this story. The fact is that we're at the table and engaged in a very heavy manner with the USW to try and resolve this. Discussions are going well. We feel positive, of course, we can't count on anything until it's concluded. We remain positive that we can hopefully conclude a deal while we're at the table. Amos, in terms of financial leverage, the answer is yes, we intend to increase our leverage. We had this target of $10 billion of expanded net debt. We raised it after discussion with the board of directors to 15. We're going to do this over time, and obviously in the short term, we're playing catch up, right? Given the very strong cash flow generation, just to stand still where we are, we're having to distribute everything that we generate as we promised before. In order to releverage, yes, we will need to distribute more than the free cash flow, and we will do so in the next few quarters. Our next question comes from Mr. Tyler Broda with RBC. Great. Thank you. I guess I just had a question on the third-party volume. You had quite a jump in the second quarter, about 2 million tons. Doesn't sound like much, but obviously has a big impact on your costs. Could you just run through where those volumes come from and sort of where we should be looking at for those going forward? Thank you. Thank you, Tyler. Spinelli here. We see the purchase of third parties as an opportunity. The impact depends on the index, but you can make money, and we do it. What happened in the second quarter, that in the first half, actually, we have spare capacity in our systems due to the rainy season and the lower production in the mine. We could increase our purchase and take advantage of that. Second half, I say that it's more related to what we do usually. You can compare to the last year. We are full in our operations now with Fábrica back, and also we have the margin financial operations. We don't see so much increase in this purchase compared to last year. That will be a stable process. Our next question comes from Mr. Christian Georges with Societe Generale. Thank you very much. Just quickly on what you were saying about freight costs. I think you were saying that you're not seeing the current surge as being sustainable in the long term. I mean, what's your take on it? What's your idea of when we should see this current elevated cost reverse? Is that because there's more capacity coming to market or more because you're seeing less activity on the shipping? Thank you, Christian. Well, I think we have a balanced market in Capesize business. The effect of commodities like soybeans is more related to small vessels, not Capesizes. This year, they had a boom. They sometimes used the Capesize for their business, but it's not the usual use of the Capesize. That's our view. This market, even with our return to the market, you see some markets like India or CIS that are using Capesize to feed China. They will go back to their domestic markets. There is a rebalance in this. Something coming from Brazil, but reducing for other parts of the world. That's our view about this, the Capesize markets. Again, it depends on other points, like the other part of the total market in other kind of vessels. Our trend is not to sustain long-term this level of spot rate. Our next question comes from Mr. Sylvain Brunet with BNP. Hi, gentlemen. Two questions from me, please. First on iron ore sequential cost increases. Maybe Luciano, as you hinted at some spillover effects, what should we expect into Q3? You guided us towards the later part of the year, but what about freight and fuel costs, lag effects we should expect in Q3? My second question is on your nickel business in a context where NPI production keeps creeping. It is now over 50% of global production if you take China and Indonesia together. Does that concern you? Would you consider streamlining your portfolio to favor Class I exposure and maybe streamline the non-Class I exposure? Thanks. Okay. On iron ore costs, we guided for $1.5 reduction on C1 until the end of the year. Also, as I mentioned, Q3 will be a middle point from today and end of the year because of the effects on inventory, that there's a pass-through that takes another one or two months in order to unwind the inventory produced at higher costs. There's no structural change in the next six months, but for eventually, if we can unwind COVID quicker due to more progress in the reduction of the number of cases, maybe we can have a positive surprise here. In terms of freight and fuel, for today's spot prices and oil prices, the freight should stay pretty much the same. A slight increase because when we sell more, we have to resort more to spot freight, which is going to be definitely the case on the third quarter and fourth quarter. Again, this is at the margin because most of the freight is contracted in our fleet. You should not expect significant changes in this variable for Q3 and Q4. Some upward tick, but marginal. I'll address the question around NPI production Class I pivoting. Right now what we are seeing is that the demand for nickel is quite strong, and in fact, we are seeing the market, I would say more or less in deficit rather than surplus. We also see and expect Chinese NPI production to continue to decrease. Although it is fair to say that the NPI production coming out of Indonesia will continue to lead to increased overall supply in the coming years. We do also have some very strong demand in the stainless steel industry. I think it's something that we do need to watch in the future years, but overall in the coming years, we do expect that it not to be an oversupplied market. As you may have seen, Indonesia is looking at potential policy moves to limit further expansion of NPI to protect the sustainability of the saprolite in the coming decades. In Vale Base Metals, we are in a position to play to all three segments in the nickel industry, a high purity, the stainless, as well as the chemical to provide to the EV side. We are clearly focusing quite heavily on the high purity and the playing into the energy transition and electric vehicles, in particular in our Canadian flow sheet. It's important to note also that even our Indonesian operations, although providing a nickel matte, we are flowing that through to make a Class 1 product out of our Wales refinery. Finally, I will note that our Onça Puma ferronickel operation is quite a profitable operation, and it provides us with a long life and continued flexibility even to convert that matte and sulfidize it for use in a Class 1 product. I think we have lots of options to play the market the way we would like to under our strategy. This concludes today's question and answer session. Mr. Eduardo Bartolomeo, at this time you may proceed with your closing statements. Okay. Thank you. Thank you again for your interest and your questions, your interest in our business and results. As we said all the quarters, it's really a marathon, not a sprint. This marathon requires discipline and persistence. I think we've been there. We actively, with the narrative of the de-risking, reshaping, and re-rating. We are doing our job in de-risking the company in Brumadinho, in the safety and operations, in ESG, and of course, in the capital discipline that you're seeing there is extremely rigid. Reshaping is being done, of course, the re-rating is the final, is the 42 km, is when we are really reliable and safe, when we'll be rewarded with your confidence again. I think that's the work that we're doing with our team, with our 7,000 employees. Thank you