Volume guidance held. Cost guidance raised.

We lock a binary: Vale's reported iron ore production for calendar 2026 is 320 million tonnes or higher. Confidence 93% — the highest in this tranche.

Guidance is 335-345 Mt, maintained at the Q2 report. Our threshold sits 15 Mt, about 4.5%, below the floor of that range. That is a tight buffer by this series' standards, and it is tight because half the year is already banked.

Most locks in this series are written against a full year that has barely started. This one is written in September against a calendar year, with Q1 and Q2 already reported and only the second half at risk.

That halves the uncertainty in a fairly literal sense. Q2 alone delivered 84.3 Mt, up 1% year-on-year, with record output at S11D and new volumes coming from Capanema and VGR1 — two projects contributing incrementally rather than being promised. The company reaffirmed 335-345 Mt with that quarter in hand.

Seasonality also runs in the lock's favour. Brazilian iron ore output is constrained in the wet first quarter and strongest in the drier second half, so the remaining months are the productive ones rather than the risky ones. A miner reaffirming full-year volume guidance at the halfway mark, with its largest operation setting records, is about as well-supported a production forecast as this series encounters.

The residual 7% is a tailings dam or licensing event, a heavy-rain disruption, or an unplanned outage at S11D — the kind of single-asset risk that has historically moved Vale's output by tens of millions of tonnes.

In the same report that reaffirmed 335-345 Mt, Vale moved its cost guidance the wrong way. C1 cash costs excluding third-party purchases went to US$22.50-23.50 a tonne from US$20-21.50. All-in costs went to US$58-62 from US$52-56 — a roughly 11% increase at the midpoint, attributed to currency, diesel and freight.

That matters for how this lock should be read. Vale can hit 320 Mt comfortably and still have a worse year than the market expected, because the tonnes will cost more to produce and ship. Volume and profitability have been pointed in opposite directions by the company's own guidance.

So the criterion is deliberately narrow, and this brief states the limit rather than letting a reader infer more. P-322 is a claim about tonnes of iron ore produced. It is not a claim about Vale's margins, its earnings, its cash costs, or its share price, and a HIT here should never be read as one.

The diesel and freight component is also the fifth appearance of the West Asia fuel shock across this tranche and the last — after Port of Tauranga, the dropped Air New Zealand candidate, Freightways and Britannia. A Brazilian miner's cost guidance and a New Zealand courier's margin commentary are being moved by the same input.

Note too that production and sales are different quantities here: Vale produced 84.3 Mt in Q2 and sold 79.7 Mt, a gap of 4.6 Mt in a single quarter. The lock names production.