Gustavo Pimenta: So Caio, on your second question on the balance sheet. No, we are not expecting and planning on going beyond the 20 billion that we have in our target leverage ratio. I think what Eduardo was referring to is, first on these smart M&A, those are adjacent opportunities with limited capital that we continue to look. Especially, we’re assuming a high quality products, so you’re seeing some opportunities, but they shouldn’t be intense in terms of capital deployment and organize, but they shouldn’t be intense in terms of capital deployment. And on base metals, if we decided to do something, it’s certainly using the currency that we are about to create. That’s one of the reasons why we’ve been discussing the curve out of base metals.
So we are not expecting to use Vale’s balance sheet for any move. We continue to believe that the share buyback, especially at the share price that we are seeing today are one of the best if not the best investments that we have for available cash.
Operator: Our next question comes from Liam Fitzpatrick, Deutsche Bank.
Liam Fitzpatrick: Two questions from my side, both on the base metal strategy. So I just wanted to confirm is the target still to complete, the stake sale by the mid-year point? And then in terms of next steps, I’m sure Mark could finally hasn’t joined to be Chairman of a subdivision within Vale. So does this appointment more or less confirm that you are eventually headed down the IPO routes? So any color on that would be appreciated? The second question, and I’m sure, full well, why we’re all asking around M&A, but when you say the correct entity, and then you’ll consider inorganic opportunities, will you have that correct entity once you complete the minority stake sale? Or are there further steps that are needed before you get there? Thank you.
Eduardo Bartolomeo: Okay. Thank, Liam. First of all, I think, as you mentioned, I always said that, actually in one of our meetings, I said, eventually, and I understood that eventually in English is we are going to go, obviously, an IPO down the road, is a liquidity event that you could pursue. But the fundamental reason why we brought Mark is to help us on the execution of this plan to this liquidity event. It can have several forms of liquidity. So I won’t go over them. But he’s joining as a Chairman, because he sees the opportunity to transform the best assets of transition metals in the world. And he knows it very well. And of course, he wants to unlock substantial value from it as we do. So that’s, I think, answer your point.
But we always said that, that is not the definitive option that we are going to IPO. We want to create this optionalities even if you want, if we said earlier about M&As for sure, like I mentioned. When you go back to your second question, I think adds to this first one as well. Because the legal entity is being designed, it doesn’t relate, of course, it does relate with the sell of the participation. But let’s be very clear as well, if we don’t find the right partner, that adds value to us and perceive the same value as we do, we’re going to do it anyway, this organization, it is being ring fenced as we speak, because of the legal and time issues we believe is going to be hitting and running after 1st of July. And we believe at that moment, and I think Gustavo can help me with more details and clarity, we’re going to be able to see that, no way to have a partner.
But we are going to have an independent board led by Mark, I’ll be part of it. It’s going to be run through our energy transition metals as active coal and in a run to create a huge amount of value. And organically as I mentioned already and when is ready, it can go inorganically as well. But IPO is not necessarily one of the — maybe it’s not the only option that we have in this optionality. So you can help me a little bit Gustavo with the details.
Gustavo Pimenta: I think you covered most of it Eduardo, I think Liam, in terms of timing, we continue to work hard to have it finalized by mid this year, discuss with our board and then share with you the news. But it’s moving along very well. I think there is a lot of interest as you are all following in the press. There’s a lot of interest for this type of platform. And we think we have a very unique platform in our hands, which as Eduardo said, we are working hard on many fronts, including by bringing Mark to take this to the next level. That’s the goal. I think the Carajás do create a series of options for the goal. I think the Carajás do create a series of options for us to really take this business to another level, grow the business and create value for our shareholders. So in terms of timeline, yes, mid this year, we should have some news to share with you all.
Operator: The next question is from Daniel Sasson, Itaú BBA.
Daniel Sasson: My first question is regarding supply and demand balance. You mentioned, and you are seen very confident that you will reach your guidance for Q1, any thought, because of increased volume in the second half and more volumes come Carajás and two different sources. But my question is on how your values of volume strategy could impact the seeming up better volumes in the second half. And my question also, because in , is China producing as you experience 2023 that actually implies decline in production in the second half of the year, exactly at a moment when you expect to increase volumes, usually one that’s seasonally strong. So this year scenario in which you might not be able to sell anything expect to because of a decline in demand in China.
And the second question is, more related to external risks, right, imagine the things that are in your hands to control and to try to see clearly symbolizes the creation of those sorts of fortune. We have CSMA in Brazil, a month scenario in which alternatives for including regarding prior renewals are being assessed. And then these two biggest risks volume increase or again both interest on capital benefits, anything you could add on that, that will be great. Thank you.
Eduardo Bartolomeo: Thank you, Daniel. Good to hear you. Why demand balance? So second half, I mentioned one number that it was really important plus export in China, the first quarter 20 million tons. So just keep this in mind because this is important about demand in China but we do have a connection in ex-China also. So we don’t have only China to supply we have the second half, we have the flow to them. We expect by the end of this June. And we have production in with last high silica. So it’s not about improve the pallet to produce less product that today is paying more premiums. The gap between high grade ore and low grade ore is narrowed because of the margins in the industry. So we don’t expect this for the whole year.
But we’re going to increase the production of pellets. So this is one important thing is not in China. It is for Middle East or Japan and in Europe, also in Brazil. So this is one point of view. The other point is, we are going to increase the hybrid ore and our premiums. Today, the premium by product is very good. So the RBF is with a good premium. Given Carajás, we’re talking about 16 spread today could be higher depends on the — today depends on only in the — and margins of the industry. We don’t have the problem of energy. And this is a good thing. So we’re going to have the right product that is Carajás, the RBF increase of pellets so we have the right product in the right moment for the year, despite if you have any in adjust of production in China to support this goal of lag production, we have other markets that are aiming for hybrid ores like Middle East or Europe.
So that’s our strategy for the year, while keeping our sales plan — as planning for the year.
Gustavo Pimenta: So, Daniel, Gustavo here. It was breaking up a little bit with your question, but we understood it was more on the external with your question. But we understood it was more on the external less Brazilian institutional uncertainties, potential uncertainties, and I think you’ve made a reference on taxation and so on. Look, our view is, what we’ve heard so far is tax reform to pursue neutrality in terms of potential tax burden, which I think makes sense. And that’s what we are hopeful. This is a very critical sector. I mean, the mining sector is very critical for the country in terms of employment, in terms of taxes. So when we compare ourselves with the Australians, for example, we are very, very highly taxed. So in our perspective very important to remain competitive, especially as we compete in the global stage. So we are feeling good about it. And we are following very closely, all the discussions.
Operator: This concludes today’s question-and-answer session. Mr. Eduardo Bartolomeo, at this time, you may proceed with your closing statements.
