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   &lt;div align="left" style="font-size: 10pt; margin-top: 12pt"&gt;&lt;b&gt;16 Long-term incentive compensation plan&lt;/b&gt;
   &lt;/div&gt;
   &lt;div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"&gt;Under the terms of the long-term incentive compensation plan, the participants, restricted
   to certain executives, may elect to allocate part of their annual bonus to the plan. The
   allocation is applied to purchase preferred shares of Vale, through a predefined financial
   institution, at market conditions and with no benefit provided by Vale.
   &lt;/div&gt;
   &lt;div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"&gt;The shares purchased by each executive are unrestricted and may, at the participant&amp;#8217;s
   discretion, be sold at any time. However, the shares must be held for a three-year period and
   the executive must be continually employed by Vale during that period. The participant then
   becomes entitled to receive from Vale a cash payment equivalent to the total amount of shares
   held, based on the market rates. The total shares linked to the plan at June&amp;#160;30, 2010 and
   December&amp;#160;31, 2009, is 2,896,038 and 1,809,117, respectively.
   &lt;/div&gt;
   &lt;div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"&gt;Additionally, as a long-term incentive certain eligible executives have the opportunity to
   receive at the end of the triennial cycle a certain number of shares at market rates, based on
   an evaluation of their career and performance factors measured as an indicator of total return
   to stockholders.
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   &lt;div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"&gt;We account for the compensation cost provided to our executives under this long-term incentive
   compensation plan, following the requirements Accounting for Stock-Based Compensation.
   Liabilities are measured at each reporting date at fair value, based on market rates.
   Compensation costs incurred are recognized, over the defined three-year vesting period. At June
   30, 2010 and December&amp;#160;31, 2009, we recognized a liability of US$75 and US$72, respectively,
   through the Statement of Income.
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      <ElementDefenition>Disclosure of compensation-related costs for share-based compensation which may include disclosure of policies, compensation plan details, allocation of stock compensation, incentive distributions, share-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.</ElementDefenition>
      <ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef
 -Publisher FASB
 -Name Statement of Financial Accounting Standard (FAS)
 -Number 123R
 -Paragraph 64, 65, A240

Reference 2: http://www.xbrl.org/2003/role/presentationRef
 -Publisher AICPA
 -Name Statement of Position (SOP)
 -Number 93-6
 -Paragraph 53

Reference 3: http://www.xbrl.org/2003/role/presentationRef
 -Publisher SEC
 -Name Staff Accounting Bulletin (SAB)
 -Number Topic 14

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