First of all, I'd like to thank you very much for being here with us today in our first completely virtual Vale Day. For our presentation and Q&A session here, we have our senior executives, and I'll quickly introduce each one of them. We have here with us, Eduardo Bartolomeo, our CEO, Marina Quental, Director of People, Carlos Medeiros, Safety and Operational Excellence Officer, Marcello Spinelli, Executive Officer for Ferrous Minerals, Mark Travers, Executive Director of Base Metals, Luciano Siani, our CFO, Alexandre D'Ambrosio, General Counsel, Alexandre Pereira, Executive Officer for Global Business Support, Luiz Eduardo Osorio, Executive Officer for Sustainability and Institutional Relations, Paulo Couto, Director of Coal, and Marcello Klein, Recovery and Developments Director. We plan to have a one hour and 15-minute slide presentation, including six videos, and after that, a 45-minute Q&A session.
We have received already many questions in advance, but we will also collect questions during the slide presentation. For that, please use your cell phones and scan the QR code you're going to see on the screen. Finally, I should remind you that all participants will be on a listen-only mode to improve sound quality. With that said, I hope you enjoy our event, and I will now pass it on to Eduardo Bartolomeo, who will go over our presentation on how to build a better Vale. Eduardo, please. Thank you.
Thank you, Ivan. First of all, I hope everybody's safe and sound, I would like to thank you for being with us today in this virtual setting. That's gonna be a novelty for everyone. It's my second day as Vale Day, and it's an honor to have the opportunity to discuss and show the important steps that we're taking towards building a safer and more reliable company. Before we do that, I would like to reinforce once again that our number one priority is the reparation of Brumadinho. We will never forget Brumadinho. Since I took over the leadership of Vale, I've been vocal about three words: people, safety, and reparation. Those three words have inspired us to create the roadmap that's fundamental to build a better Vale. Brumadinho is the driving force behind everything that we are doing to improve our company.
Even during the pandemic, we maintained the critical reparation works and actions. With that, I invite you to watch a video that shows some of the progress we have made so far.
We continue to work daily to repair and develop the city of Brumadinho and the region. The integral reparation plan comprises several environmental, social, and infrastructure initiatives, some already in place and others underway. The following is a highlight of this continuous work. To repair the environmental damage, our plan is to fully remove all tailings by 2023 and revegetate the entire area by 2025. Part of this area has already been recovered, and part of the original course of the Ferro-Carvão Stream was recreated. We installed the tailings containment system, which since 2019 has been preventing the flow of sediments into the Paraopeba River. With all these actions, the team monitoring the Paraopeba Basin has already seen improvements along the river.
To meet the demands of producers who depend on the river for their activities, Vale will continue to supply drinking water until they can start collecting water from the river. We have finished building the Pará de Minas pipeline system, which will supply water to more than 100,000 people. In the social and economic aspect, we developed initiatives to foster and diversify the local economy, reduce dependence on mining, and help transform the local reality. We recently delivered a daycare center and a health center. Two other nurseries and a center dedicated for children with special needs are in an advanced stage of construction. We remain committed to repairing the damage with transparency and speed. Everything we have learned since the B1 dam breach has helped us advance an important cultural change towards a better Vale.
You can see this video brings some important examples of our commitment to Brumadinho. With those actions, we have already disbursed BRL 2.6 billion. We already identified 8,300 people. In addition, we also designed a plan for the community of Brumadinho. This master plan was built on the community's perspective and has been very well appreciated by the local authorities. As you know, we are having encouraging conversations with the state of Minas Gerais and other stakeholders to get a framework agreement for collective damage and reparation. With that, we continue to pursue our goal to reach a stable agreement for this matter. Let me be very clear. Regardless of any agreement, we will continue to deliver on our commitment to the full reparation of Brumadinho. That is to repair Brumadinho with quality, care, and at a fast pace.
One of my first decisions as CEO in 2019 was to add two new pillars to our strategy. Actually, they were two resets inside Vale, and they have improved a lot during 2020. The first pillar was set to create the safety and operational excellence mindset. It's about assuring them safety and asset integrity. It's about creating discipline towards operational excellence. It's about being obsessed about safety, and we are advancing well on it. The second pillar is what we call the new pact with society. It means actively listening and working together with society so we can create a virtual cycle that brings prosperity to everyone. One good example of this new pact was our great support to the Brazilian authorities in fighting COVID, leading the Brazilian corporate effort to join forces with the government in the battle.
2020 was a year about a better stability in our business despite COVID, on the effective deliver on our commitment to these new pillars. Important to our stability as well, our executive team is together since July 2019 and truly committed to this agenda. Our actions within those two pillars that you will see throughout this first part of the presentation are essential to the process of transforming Vale. Later, Spinelli, Mark, and Siani will come to talk about the other three pillars of our strategy. With that in mind, we outlined a guide which we call One Page, a narrative that will lead us toward this better Vale. It took a lot of effort from our team, and we are sure that will lead us to this goal. Let me guide you through this one Page.
It starts with its foundation, our values, that you can see at the bottom of the page, and goes all the way up to our mission, which is to transform natural resources into prosperity and sustainable development. Our values haven't changed. They remain the same. In this culture transformation, we look deeply into our culture, and we concluded that we needed to move from a culture of making it happen in any way to a culture of learning together. To give you an example, Life matters most was already a value, but we wanted to create a chronic and niche behavior around this value. With the new culture fostering this new behavior, we could now lever it with our VPS, for example, to achieve higher levels of safety. VPS work as a lever because it's our management model that puts safety as a priority.
With this interconnection occurring in a virtuous way from bottom to top and top to bottom, we can achieve our ambitions. In this case, which is to become a benchmark in safety. Besides that, we have the ambition to be a best-in-class reliable operator, a talent-driven organization, leader in low carbon mining, and a reference in creating and sharing value. Today, we use those ambitions to lead you through our presentation on how we are building a better Vale. Let's start by talking about becoming a benchmark in safety and a reliable operator, which are directly correlated to our pillar of safety and operational excellence. For that, I would like to invite our Executive Officer, Carlos Medeiros. Please, Carlos.
Thank you, Eduardo. Good morning to you all. Good afternoon. As you are probably aware, Vale utilizes the three lines of defense model. The operations are the first line of defense. The organization I lead is the second line of defense, and our internal auditors are the third line of defense. As Eduardo mentioned, we have the ambition to become a benchmark in safety, and I would like to share with you the important strides Vale is making in both occupational and process safety. The column on the left describes the organization's long-term safety targets. It comprises targets in high potential events reduction of human exposure to hazardous agents, and high-risk scenarios reduction. The graphs on the right illustrate our progress so far. As you can see, we are on track to become a much safer company in the next years.
Our process safety program starts with the HIRA, Hazard Investigation and Risk Asessment. A team of 12 multidisciplinary people visit our sites and working side by side with the local management, identify the most critical process risks as well as their respective controls. This activity follows a well-defined methodology, which has helped so far identify almost 600 critical risks and more than 6,000 critical controls. Monitoring the integrity of these controls has become a part of our daily maintenance routine. By the end of 2020, more than 90% of our sites will have received the HIRA. The combination of the occupational and process safety programs has proved to be truly transformational. The obvious consequence is that Vale has become a lot more proactive and is starting to display a chronic unease, as Eduardo mentioned, for safety-related matters.
The operations below were halted during 2020 for different reasons. I would like to highlight a few of them. VNC and Simões Filho, these are both refineries that have been permanently shut down as they failed to comply with the HIRA requirements. Sucesso operations were temporarily paralyzed to allow the team to fix several issues related to assets' integrity. This one is a busy slide. Please let me walk you through it. Starting at the top, our tailings management system is being rebuilt to ensure the adoption of all known best practices to manage our tailings dams. Although it is still a work in progress, it is highly adherent with the global industry standard on tailings management. Vale will implement the global standard and is well-positioned to complete it by the end of 2021.
The practical consequence of this work is that our governance has been strengthened, and our team is more prepared to make the best decisions about our dams' safety. Our tailings management system is organized around three pillars: routine, performance, and risk assessment. I will explain briefly what it means starting from the left column. Routine. We have a new dam management policy, and the roles and responsibility matrix has been reviewed. Both are requirements from the global standard. Performance. The engineers of record are in place since last January. Their monthly reports will be made available during the first quarter of next year through our ESG portal. The engineer of record is also another global standard requirement. Risk assessment. The HIRA methodology that I explained a moment ago has been utilized to assess the potential failure mechanisms of our dams, as well as the controls that are in place.
The first assessment was completed last September, and we are targeting to conclude this exercise by the end of 2022. While we are strengthening our tailings management system, improving our dams' conditions, and working closely with the engineer of record, we are also continuing to decharacterize our upstream dams as per the announcement made last year. Until the year-end, five structures will have been decharacterized and another three will also be decharacterized during 2021. At the bottom, we are highlighting the three most critical structures. By the way, none of them are operational. As you can see, two backup dams have been completed, and the third one will be finalized during the first half of 2021. The decharacterization works for the B3B4 dam has already commenced. The progress is deliberately slow to avoid the introduction of additional risks. You will now watch a video explaining the decharacterization process.
Vale is aligned with the most rigorous international practices regarding tailings dam monitoring and management. The decharacterization of tailings dams and other upstream structures is essential for the company's safety and operational excellence pillar. Since 2019, Vale has decharacterized three tailings dams, and three more will be completed in the coming weeks. The decision to decharacterize it, all upstream tailings dams, dikes, and drain stacks is an important milestone to reduce the company's level of risk. Aiming to reinforce the safety of communities and the environment, Vale is also carrying out emergency containment works for upstream dams at higher emergency levels to increase the safety in the region during the decharacterization works. These major engineering projects are being executed with the necessary care, quality, and agility. The backup dam downstream the Sul Superior dam was delivered in 2020.
It is 36 m high and 310 meters long. The backup dam downstream, the B3/B4 dam, was delivered in 2020. It is 33 m high and 221 m long. The first phase of the downstream backup dam for Forquilhas I, II, III, IV, and Grupo Dam was delivered in 2020. It is currently 77 m high. The final phase, which will be 93 m high, will be delivered in 2021. In addition, Vale has been taking measures to improve the stability and the safety conditions of structures at emergency level. Among other measures, Vale completed bypass channels for the Forquilhas I, II, III, IV, Grupo, B3, B4, Vargem Grande, and Sul Superior dams. To follow the implementation of our de-characterization plan for upstream structures and the evolution of our dam management, visit vale.com/esg.
Besides becoming a safety benchmark, Vale also has the ambition to become a reliable operator. How do we expect to do this? This will be done through the implementation of our integrated management system, or VPS, as we call it. Let me give you a flavor of what this is about. As an integrated management system, VPS brings together all of Vale's processes and systems into one single framework, enabling our company to work with unified objectives and in a standardized way. The VPS implementation is already creating a positive momentum within Vale. 100% of our employees have been trained, and they are fully engaged. For example, a week ago, during our online global VPS summit, 18,000 employees were connected. Thousands of continuous improvement projects were submitted. Our workforce is gradually understanding the benefits VPS brings. Safer work environment and a more effective problem resolution process.
These inevitably will lead Vale to greater reliability. There are some tangible benefits already being perceived on maintenance performance, as highlighted on the column on the right-hand side. The video you watch next will tell a bit more about the VPS and its three dimensions, technical, leadership, and method.
Ensuring the safety of people in operations is Vale's priority. Adopted by operational and administrative departments, Vale Management System, the VPS, is composed by three dimensions: leadership, technical, and method. The leadership dimension establishes a set of practices for strengthening culture and the organizational discipline through people development. For example, we are training our employees using Dojo, which is a place previously prepared where we simulate, in a controlled manner, situations that are part of the operational routine. We also have the technical dimension, which contains the elements to establish common policies, guidelines, and process requirements for managing assets and addressing risks inherent to our business. In the locomotive workshop, it was possible to define regularity for the operation, increasing quality and productivity, in addition to presenting a more stable safety result through VPS.
In the third dimension, the elements of method create discipline and ensure that all areas are continuously assessing indicators, exposing problems, aligning priorities, and taking the necessary actions to achieve results. In Vale's operations, we use the Floor Management Development System, or FMDS, as a visual management tool to ensure daily check and preventive action in solving problems. Together, the three dimensions strengthen Vale's organizational culture through people development, standardization of best practices, operational discipline, and compliance with routine. With this, we will redefine the path to operational excellence as a more humane, safe, and sustainable company.
Everything we are doing here can only be accomplished through the real engagement of our people. I will hand over now to Marina Quental, our Executive Officer for People. She'll talk about Vale's human capital. Thank you.
Thank you, Carlos. Hi, everyone. I will talk today about people and culture. We have set a very clear mission at Vale, to be one of the safest mining companies in the world, and hence, a reliable operator. How do we plan to achieve that? By attracting and developing the best professionals and by promoting a culture of collaboration, inclusion, and lifelong learning nurtured by performance with the right incentives. In a nutshell, we are moving to be a talent-driven organization. We know it's a journey, and I'm glad to highlight to you today some important progress we've made this year. The orange and green boxes in the left side are examples of how we are improving our culture of safety. The implementation of the second line of defense has strengthened our technical capabilities, enhancing clarity of roles and responsibilities.
In the last 12 months, we added more than 200 new geotechnical professionals, mostly on our operations, and we have also resourced the new safety and operational excellence office with global highly specialized talent, having almost half of them less than five years' tenure. Conscious the needed culture shift must be driven by the leadership, we've been investing heavily in nominating and developing our leaders. In the blue box, you see the results of our efforts to renovate the leadership. At Ferrous's organization, almost 60% of the leaders are either new at the company or at the position. In the red box, you see an important step in a commitment we made here last year to become a more inclusive organization, we defined the goal to double female representation in 10 years. This year, we increased our female representation in leadership roles by 21%.
I must say, we are working in all dimensions of diversity towards a true inclusive Vale. Finally, in the yellow box in the right down corner, you see that our compensation targets were also strengthened to reflect the culture we want. For next year, 60% of Vale's scorecards is linked to our ESG agenda and to the operational discipline as Carlos just guided us through. We, as the executive board, have defined a bold roadmap for the transformation we are going through, which is deep and goes beyond our boundaries. We are actively listening to the society, working hand-to-hand with the communities, and engaging our employees, aiming to achieve the ambitions Eduardo shared with us here. I pass back to Eduardo.
Okay, thanks, Marina. Let's talk about our last two ambitions, which are to be the leader in low carbon mining and a reference in sharing and creating value. Ambitions which are directly related to our new pact with society. Last year, we announced very ambitious goals, as you may remember, and they are shown in the slides. Starting by our climate change resolutions, we had strong reduction targets for Scope 1 and 2 emissions aligned with the Paris Agreement, and also a net zero target by 2050. I would like to invite you to watch a video that summarizes our climate initiatives and the roadmap to deliver on those commitments.
Our products, operations, and supply chains are essential to society. At the same time, climate change is a reality and a challenge that is affecting not just our productive activities, but also our people and communities. We believe we have a unique potential to contribute to a low carbon future. We own the world's biggest mining project with high iron content. Our nickel mines contain around 60% primary nickel, a more refined product to produce batteries and electric vehicles. We will help the world limit global warming in alignment with the Paris Agreement. To this end, we are committed to becoming carbon neutral by 2050 and cutting our direct and indirect absolute emissions, Scope 1 and 2, by 33% by 2030. Our electricity consumption matrix is also a competitive advantage in the climate change agenda.
To achieve these goals, we have designed a plan, we will invest at least $2 billion. Using a marginal abatement cost curve, we have mapped more than 35 initiatives with the most significant potential to reduce our emissions at the lowest cost. We have already incorporated a shadow carbon price into our investment decisions. This way, we are signaling to businesses that we must prioritize initiatives that help us to reduce our emissions. As part of this long-term trajectory, pilot projects and other initiatives are underway. The PowerShift program aims to change Vale's energy sources from fossil fuels to renewable sources. One example is the 100% electric locomotive powered by electricity instead of diesel. We also already have 25 battery electric vehicles operating in our underground base metals mines in Canada. We are aware of our responsibility and our strengths.
We will not limit our climate action on our operational boundaries. Accordingly, we will encourage our clients and suppliers to move in the same direction, contributing to a more sustainable industry and to greener future.
Well, as you could see, there's a lot of work. We are committed to this journey. We are aware that we have an additional challenge since we're increasing our production. On the chart, you see that we estimate to reach peak emissions in 2023, when we should be producing around 400 million tons of iron ore. We are now investing in innovative lower carbon technologies, and by 2024, 2025, they'll be mature and at a scale to help us to reach our goal. As well, we monitor this performance in our monthly low carbon board meetings, a group led by me and executive directors and their technical teams. As you know, our electricity consumption profile is one of our top competitive advantage in reducing Scope 1 and 2. Last year, we announced a target to achieve 100% renewable consumption in Brazil by 2025 and globally by 2030.
Today, our global consumption is already close to 80% from renewable sources. In the beginning of 2019, we announced a wind project, Folha Larga Sul, which is operational since last August. Today, I am glad to announce a large solar project called Sol do Cerrado, which has just been approved by our board. Sol do Cerrado is expected to be operational by 2022 and will deliver 13% of our self-generation goal. As you could see, we have a bolder map with clear milestones to our Scope 1 and 2 emissions. We recognize that we can only be leaders in low carbon mining if we induce our value chain in the same direction. We want to make a very important announcement today regarding Scope 3. We are committing ourselves to reduce our Scope 3 net emissions by 15% until 2035.
We know this is not an easy task, but I believe Vale has a unique position to deliver this, and we are committed to work hard to reach this goal. I believe we are one of the few companies that have initiatives that alone contributes to deliver 15%-25% of our Scope 3 targets. Our direct contribution will come mainly from our portfolio of premium products, which enables steelmaking emission reduction, our HBI technology using natural gas, and our pig iron production using biomass. Finally, we also rely on nature-based solutions and carbon markets to neutralize emissions. To deliver the other 75%-85% part of our goal, we rely on partnerships and engagement with our value chain to help them innovate and decarbonize. We are already mapping different technologies for steel decarbonization, including CCS, hydrogen, and scrap, and we are open for partnership with our clients.
On shipping, our very large bulk carriers are already the most efficient in the world, and we are committed to supporting the shipping industry to deliver on the IMO targets. To complete our climate agenda, I would like to highlight that Vale's net zero strategy has its pillars on emission reduction and offsetting. Aligned with Brazil's, and especially Vale's forest vocation, we may also use sound and credible carbon offsets. Today, we protect more than 1 million hectares, the equivalent of six times greater London. In 2020, we added another 50,000 hectares, and we are on track to achieve our 2030 goal that we have mentioned here last year. Please, let's watch a video that illustrates our approach on forests.
For more than 30 years, Vale has been helping to protect the Amazon. There are around 800,000 hectares of protected forest in the region. A commitment to the environment is at the heart of our work. For example, when constructing the S11D iron ore complex, we altered the original design to move the waste rock piles to an area that was already degraded, thereby saving around 1,000 hectares of forest. By changing this design and taking measures to restore habitats, we will expand the amount of forest by more than the area affected by the project. Currently, Vale helps to maintain more than 1 million hectares of forest worldwide. Vale has also committed to protecting and restoring another 500,000 hectares of forest beyond our boundaries until 2030. In partnership with governmental organizations and communities, Vale is restoring habitats while generating income and preserving rivers in Pará.
These initiatives reflect Vale's commitment to be carbon neutral by 2050. They are aligned with the transition to an ever more sustainable mining industry.
Let's talk about our final ambition, which is to be a reference in creating and sharing value, which is also linked to our 2030 commitment for income generation, basic health, and education. Our work with communities involves active listening and an engagement strategy to define and prioritize social actions. Let me show you three examples of investments in urban infrastructure and education to improve social economic development. The first project is in the north of Brazil. In Pará, we support a program aimed on the reduction of violence in vulnerable communities. More than 370,000 people will be benefited. The second is in Maranhão. We have a project to promote literacy at the recommended age, and we already saw improvements in the educational tests applied in some municipalities.
Third, at the IT hub in Itabira that we have mentioned here last year, we have just launched Infinita, a startup accelerator that will help around 90 companies create 450 new jobs and train 3,000 people. Those are examples that we must move from just creating value to sharing value with our communities. Finally, as you may have noticed, we remain firm in improving our ESG practice, and that's essential to the risk of our business. We listened to our stakeholders, and we mapped 52 ESG gaps, having already solved 33 of them. In 2020, we already addressed seven gaps and four more should be addressed by the end of this year. For example, in governance, we have established the audit committee. Recently, we created a nomination committee to support our board in the transition to a non-controlled company following the expiration of our shareholders' agreement.
As a good sign, risk rating agencies such as Fitch and Moody's, and ESG provider like Sustainalytics, have already recognized our efforts. To conclude, I would like to emphasize that we are very much aware of our responsibility. More than ever, we embrace the idea of listening to society and learning together with all stakeholders. Our ambitions, as you saw, are bold, and our actions are the foundations to consolidate the Vale of tomorrow by responding to the challenges of today. With that, I invite now Marcello Spinelli, who will talk about our strategic pillar to maximize the flight to quality in iron ore and how are we going to restore our flexibility. Thank you.
Thanks, Eduardo. Good morning, everyone. Good afternoon. It is a pleasure to be here again my second Vale Day. As you know, one of our strategic pillars is to maximize fly to quality. I'll show you in the next slides how we're gonna achieve this in sustainable way. We have four main fronts here. We continue to reduce the dependence on dams. We have a plan to recover our capacity with new assets coming online. We are planning our capacity with some buffers to be more reliable, and we have the best portfolio products and solution to meet our clients' needs in a greener world. I'm really confident that we are the right direction. My team is fully engaged to make it happen, and sustainable results with EPS will come sooner or later with safety first. Well, last year, we showed our plan to reduce the use of dams.
I'd like to make an update about the initiatives. Well, remember that we start the blended strategy some years ago, producing the BRBF in China. It's a very successful product, stable, reliable. As a result of a mixture of Carajás fines and the lower grades ores from the south of Brazil. This allowed an increase in dry processing in the southern and the southeastern system. This process will continue as we're growing in the northern system. How are we attacking the remaining 40%-30%? We have the dry concentration. Two years ago, we acquired NewSteel, a disruptive technology that we can concentrate without water. We just submitted to our board's approval the first industrial plant. It'll be in Vargem Grande with a capacity of 1.5 million tons, and the startup will be in the middle of 2022. Finally, we have the filter initiatives.
We concentrate using water. You filter the tailings. We reuse the water and rise stack the tailings. We are implementing this solution in three sites, Vargem Grande, Itabira, and Brucutu. In summary, in 2016, 60% of our production was based on wet processing reusing dams. When we reach the production level of 400 million tons, we will have only 14% disposed in dams or pits. Now, I'd like to play a video showing the development of the filtrations.
Vale is investing in initiatives to reduce the environmental impact and risks associated with its operations. One example is the implementation of the filtering and dry stacking process. Iron ore beneficiation generates ultra-fine and sand tailings that are traditionally disposed in dams or pits. Vale is building thickeners and filtration plants using vacuum disc filters. In the process, first, the tailings go through the thickener, generating a thickened slurry to be then pumped to the filtration plant. The tailings are filtered in a vacuum disc filter made of filtering cloths connected to a central vacuum system. The filtering cycle occurs as the disc rotates. When the filter is immersed in the slurry sump, the water is vacuumed up, and particles accumulate in the cloths to form a cake. The filter is then removed from the sump, and any liquid remaining is vacuumed up, occurring the drying.
In the end, a jet of compressed air releases the cake, and the material, now with reduced moisture, is discharged on a conveyor belt. The tailings are disposed and stacked in layers to minimize the occupied area, with a potential revegetation during disposal. The plants of Vargem Grande, Caeté, Conceição, and Itabiruçu, all in Minas Gerais, are under construction. In 2021, the first plant startup will take place at the Vargem Grande complex. Filtration plants will contribute to upkeep Vale's high-quality product portfolio, which include ores with a high iron content, such as pellet feed and sinter feed with low impurities. This initiative supports Vale's margins optimization. Vale continues to invest to reduce the need for tailings dams in the mineral process and to operate as a reference in safety and sustainability.
Okay. Now let's move to our path to 400 million tons. This is the same manual that we presented two months ago in the investor tour. I think this is one of the most important slide for this morning, this afternoon. The first and main message that I want to reinforce here, we'll bring back our 400 million tons of capacity till the end of 2022. We have a clear plan. With new assets coming online, which is progressing despite some variations quarter by quarter, the capacity will be resumed gradually over the next two years. I'll drive you column by column in this slide. The first column today is the concept of the capacity today. If you don't evolve, bring any other asset or resume any other operation, that's what you can deliver at the end of the year, 320 million tons.
Second column, 2021, is what we expect to resume next year. The next slide have some milestones system by system that I want to share with you. Our plan is to bring back around 30 million tons till the end of 2021. By the end of 2022, our goal, 400 million tons of capacity. The last column is related to our buffer capacity, an effort to bring reliability to our plan and allow the possibility of swing capacity, very aligned with our margin over volume strategy. Before moving to the next slides, I'd like to highlight the 2020 and 2021 production guidance. I know that you're very excited about this, and I want to address all the information we have. We should produce a range between 300 and 305 this year. Why? We've been running slightly below 1 million tons.
We've been talking about this the last weeks. We just enter in the rainy season, so we lose a lot of our flexibility in the operations. East Range license, we were waiting for the beginning of the Q4, delayed two months. What is the good news here? We have the full capacity for East Range in the next year. For 2021, our production guidance is a range between 315 and 335 million tons. What is the rationale for that? For the lower range, we consider our capacity today with some possible operational risk, like rain or maintenance, and we consider no evolution in our plan to recover. It's a really more conservative number. The higher range, what is the rationale? We consider that we will receive authorizations, and the new assets will come online as scheduled.
We also consider some contingencies in some constructions in this upper range. We can have some upside here, but we also prefer to be more conservative here, setting 335 as a maximum production for 2021. Now we can go in detail system by system. Well, Northern System, our world-class assets, high-quality ores, low cost OPEX, growth platform. Logistics capacity in place, 330 million tons. You know very well about this. What is the name of the game here? Opening new pits, licensing and ramping up the products. Good news is that we are progressing. I just mentioned that we obtained the installation license in Serra Leste or East Range. This has already brought four to five million tons of production in 2021. In other words, the year will start stronger. Let's move to Southeastern System.
Well, here is the birth of our pellet feed production, so very important for our premium portfolio. Challenge here. It is a breach from a lack of dam capacity. You remember the downstream dams to the filtering process. Remember, we lost the capacity in this system, mainly in Brucutu and Itabira, due to the problem of reassessing these downstream dams. Almost 40 million tons can be unlocked in short term, and they are related to tailing disposals. The first addition, Timbopeba, full disposal of tailings in old Timbopeba pit. This site we achieved 12 million tons capacity from the current five million tons. Another increase for next year is Torto dam and new asset coming out on Q4, adding 18 million tons capacity for Brucutu site. We can resume the full operation there. Let's move to southern system.
Well, this is a very important system for Vale. It's where we produce volumes that will create the BRBF in China. It is a perfect match for Carajás fines. We also produce Pelofire pellets here. That system was by far the most impacted with the upstream dams. What is the challenge here? We need to increase capacity close to upstream dams. Remember that we need to de-characterize the dams, Carlos just said this, and there are some interference with our logistics systems and mine operations. For 2021, we expect to resume Fábrica operations, and the good news here, we already have the license to start the test in the pits. We are also expecting here to start up Maravilhas three dam, and the futuring system in Vargem Grande. That will be very important to increase not only volumes, but also quality here.
To close the chapter of volumes, we have our plan to create the buffer capacity. I want to emphasize here, it doesn't mean that we will produce 450 million tons. If you don't have demand, we're not going to do it. I want to address here three main important reasons to do that. We want to increase operational flexibility, strengthen margin over volume strategy, applying the swing capacity approach, and minimize any operational setback. Just for example, Northern System. We already have in place the 240 project. You know that's the expansion of S11D, 200 million tons, and the upgrade of systems capacity, the rail and the port. We also approved this year the S11D 120, which in the first moment will increase only the mine plant flexibility. After we approve the logistics solution, we will have a fantastic system with a 260 million tons capacity.
Other example is the southeastern system. We just submitted the approval of Capanema product. We heard about this, you hear about this. We're going to detail this in some weeks, which adds 14 million tons to Timbopeba site. I want to draw your attention here. It is a $35 per ton CapEx, very competitive. We have assets, we have projects, we can bring back our capacity, and we're going to do it. It's important to repeat, capacity buffer means operational flexibility to meet market needs timely. It's totally aligned with our strategic pillars and to maximize flights of quality and iron ore. Let's talk about cost now. The resumption of capacities will also help to reduce C1 cash costs. The last quarterly results represented the C1 cost without the effect of third-party purchases.
We purchased ore from third parties as an opportunity to optimize the supply chain or our product portfolio or maximize cash generation. Before this analysis, we are looking only at the cost that we control. We can expect a C1 drop off up to $2 per ton due to the dilution of fixed costs. Another important aspect is the stabilization of operation. Today, we operate with a lot of contingencies in separate operations, and when we bring back blasting dismantling, shorter truck travel, or when we resume our long-distance conveyor belts that you know very well in details that affects, for example, Vargem Grande to help a lot to reduce our costs. In average, this can bring up to $1.5 of gain. Finally, the future initiatives will bring a slight addition on cost.
What you can expect for C1 here is a range between $10.5-$12 per ton. Let's move to another very important part of the cost, the shipping cost. We have a winning strategy here. Despite the distance, our long-term contracts, especially for Valemaxes and Guaibamaxes, are very competitive, below $13. I'd like also to highlight the scrubber strategy. Remember last year we talked a lot about this. At the beginning of the year, there were a lot of concern about the IMO regulations, but we didn't see any increase in our freight costs for this. In the end of 2021, the next year, almost for the entire dedicated fleet, we will have these scrubbers installed. You can do more. Eduardo just mentioned that the Scope 3 agenda, in the end, we have several initiatives that we can call eco shipping.
We are working with more than 20 institutions here, also in an opening strategy environment. We already have testing this year. This year, new ideas in products that we can contribute to reach the IMO targets for carbon emission. Let's move to our last part, our product and service portfolio. Well, Vale assumed the goal to reduce its Scope 3 by 15%. This is a commitment in line with objectives declared by governments. You see in this chart all the map of the world. We will do it with our clients. Several initiatives are being implemented in the industry. The main question is which energy source for iron reduction will be proven feasible? One thing in common to all these initiatives, we need higher quality products to reduce iron. We are acting in three fronts. It's very important, I want to emphasize these three points, three fronts.
We need to have premium products and we have the Northern system, we have the concentration using filtration and NewSteel. We've been addressing one front, the quality of the product. Secondly, as the trend is to skip in the first moment, the sintering process, the steelmaking process, we are developing products for use as direct charge. We already have the pellets, you know very well that. We are now developing other ways to agglomerate fines with lower CapEx and OpEx, and that will be soon one of our main announcements. The third front here is to be close to our clients, to develop other routes in the steelmaking process. Roger just mentioned that the HBI and an example, we are evolving an alliance with Kobe Steel, Midrex, Mitsui, and our technology, Tecnored, to design better solutions to our clients' needs in an an asset-light platform.
We can use our strength in product development and scale and supply chain to reduce the carbon emissions. Through these initiatives, we can differentiate ourselves from our competitors. By 2024, around 90% of our portfolio will be of high quality. Here I'd like to highlight again the NewSteel. My first slide showed that NewSteel will help to reduce the dependence on dams. The beauty of this technology is that we can also increase, in a sustainable way, our average quality. This will bring gains. We expect the enrichment of the portfolio in the term, therefore, premiums should return to $10 per ton level, considering the all average of our portfolio over 62 index. In the long run, it can be higher as the carbon price will be more relevant.
Going beyond products, our strategy is to be close to our customers, seeking for solutions to meet their needs. Well, we have several initiatives in China. In the last six years, we are getting closer and closer with the expansion of the blending strategy. This type of initiative reduce our delivery time and bring premiums. Our inventories are close to the customers and ready for consumption. 2020, we just launched the first grading hub, the GF88, after observing our customers' needs for pellet feed production. We already have our IOCJ inventories there, and we're just trying the same in China to attend the market. Finally, we announced the partnership for the development of the West III Project. What is this? It's the expansion of the Port of Shulanghu. It is a Valemax port.
It is a key port for Vale given the proximity to the Yangtze River, being able to serve customers along that river that they have restrictions to receive large vessels there. The expectation for the startup is 2025. Before giving the floor to Mark Travers, I'd like to wrap up with some key messages here. We will reduce the use of tailing dams. Vale will resume our 400 million capacity per year. We have new assets that are coming online. We can control this to support our resumption plan. Sooner or later, we'll be there. We are investing in capacity buffers to have 450 million tons of capacity. S11, 120, and Capanema are some examples. The flight to quality trend is here today, and Vale is a partner of choice of the steel industry. Please, Mark, the floor is yours.
Thank you, Marcello. Good morning, good afternoon to everyone. Let me discuss how we're turning around the base metals business and becoming a meaningful contributor of value, helping Vale become a reference for creation of shareholder value. In base metals, we're transforming ourselves to be a safe and reliable, cost-efficient producer, following the path that Carlos Medeiros explained earlier in the presentation. How are we doing this? We're investing in our assets. We're rebuilding and refocusing our processes to bring in discipline. We're completing our investments in our replacement mines in Canada, and we're executing our strategy. We've been on a journey for two years, and it's taking hold. We are seeing results.
Today, I want to discuss with you how we're building on this solid foundation to seize the unique opportunities we have in nickel and copper, two commodities that the world will need in the decarbonization of the economy. We have a strong portfolio of copper assets. They're low cost, profitable, and robust generators of cash flow. Right here you see a picture of the Salobo 3 expansion. It's an expansion of our Salobo mine, our largest copper mine, based in the Carajás region of Brazil. As you will see, we have tremendous organic growth opportunities in Carajás. They are available to us and they are real. Let me talk about what's currently in the pipeline. On this slide here, you'll see that we have a pipeline that will bring us to 500 kilotons of copper by 2025.
In Salobo 3, which I mentioned previously, we are going to be expanding by early 2022, adding an additional 30,000-40,000 tons of copper. We will receive a significant cash payment under our previously completed gold streaming transaction with Wheaton. On the right-hand side, you will see two projects that are up for approval either at the end of next year or early 2022. Alemão is a growth project adding 60,000 tons of production, has very significant gold byproduct credits available to it. We see an opportunity here for a potential gold stream transaction. In Cristalino, we have the opportunity to bring online 80,000 tons of production, which will come on stream as the Sossego mine is coming to closure, therefore keeping the current Salobo processing facility full. This is a very exciting opportunity for us. There is more.
In Carajás, we've just completed about two years of intensive drilling. It will add approximately 1.9 million tons of copper equivalent to our reserve base. When you combine that reserve base with the infrastructure that we have in the Carajás region, we have tremendous opportunities for further growth. In Salobo, with the extra reserves, we see the potential for another additional expansion of 30,000 tons past 2027. On the right-hand side of this slide, I refer you to the northern hub, where we have three main copper deposits, Paulo Afonso, Paulo, and Furnas, which can add between 70,000 and 100,000 tons of copper after 2030. Moving to the bottom, we have a number of surface deposits, small surface deposits between the Sossego and the Cristalino mines, which we intend to bring on stream post 2020, adding an additional 40,000 to 60,000 tons.
We have an opportunity to use the synergies with our iron ore business. In Cristalino, with the pre-stripping, we have significant and very valuable pellet feed that we intend to bring forward. We also see opportunities to bring pellet feed from our tailings facilities in Sossego and Salobo. All of these opportunities are in the heart of our northern Brazil operations, connected by our infrastructure that can bring our copper from the interior of Brazil to the markets of the world. In Indonesia, we also have another exciting opportunity. We believe we have a Tier 1 asset, Project Hu'u. With our recent drilling and engineering studies, we believe we have the opportunity here for a 45-year+ life of mine project, producing greater than 250,000 tons of copper and 200,000 ounces of gold. This is an exciting opportunity with good grades, high tonnages, and low cost.
We would be looking to approve this project post 2025, but it's important to note, only with the bringing along of a partner in its development. Let's put all of this together. Our primary focus, as I said, is in the world-class Carajás mining area. In Carajás, you can see that we will move from 280,000 tons of production next year to a little less than 400,000 tons in 2025. With these other opportunities that I explained, we can see ourselves going up to 550,000 tons or beyond. In addition to that, we have the Victor Mine in Canada, a potential JV with Glencore, which will add another 30,000 tons of copper production, and the Project Hu'u, which I further explained. Put this all together, it places Vale as a large relevant player with a strong portfolio of copper assets. Now let me discuss nickel.
It is clear that nickel will play a key role in the decarbonization of our economy. Through the growth of electric vehicles and the use of nickel in those batteries, we see a great opportunity for ourselves. In base metals, we have a wide portfolio of products, including Class 1 nickel coming from our Canadian mines. These products meet the needs of our customers, providing a wide range of opportunities, providing nickel to manufacturers with high purity needs, as well as providing nickel to those producing electric vehicle batteries. To meet CO2 reduction goals in the globe, nickel will be vital, and Vale has a big role to play. For nickel to play this key role in sustainability, how we mine is very important. At Vale, our nickel for Class 1 comes from Canada, a stable jurisdiction with a clean power grid and strong ESG standards.
We believe we're in a unique position in Vale Base Metals. Our nickel, our Class 1 nickel, is 25% less carbon intensive than the average in the industry, and we see many opportunities to improve. What have we done so far? Well, we've completed our BRL 1.5 billion clean air investment in Sudbury. This is reduced with the closure or the decommissioning of the Superstack, has led to the reduction of GHG emissions from our smelter by 40%. It has also reduced SO2 emissions by 85% and nickel particulate emissions by 40%. As we mentioned in the video, we have 25 electric vehicles in the underground mines of Sudbury, moving to 40 by the end of next year. We move into the next horizon, where we look to bring dramatic reductions to our carbon emissions. We'll look to replace our diesel fuel with electric energy in Voisey's Bay.
We will look to flow sheet introductions to decarbonize our reduction kilns and electric furnaces and introduce biofuels and biomass in the future. I'd also like to point out a very interesting opportunity, which is in the recycling of the material coming from spent electric vehicle batteries, as well as batteries that are manufactured off-spec. It's a small amount of material right now, but it will grow to dramatic amounts in future years. We are currently studying the introduction of this material into our current flow sheet in Canada, both our pyro and our hydro facilities in Canada. Let's have a look at each of our nickel operations in base metals. In North Atlantic, we're working to stabilize our production in future years and increase our productivity. We will be completing our replacement mines in Voisey's Bay and Copper Cliff in the coming years.
We have a number of opportunities that we're looking at to improve our operations. We're currently well underway with our Thompson turnaround, which is aiming to bring productivity improvements to our operations. We have a significant exploration program looking for those incremental smaller deposits in places like Sudbury, but also looking at larger potential mines to meet the electric vehicle battery needs, such as the ultramafic in Manitoba, which we are currently studying. Moving to Onça Puma. We've just completed the overhaul of our electric furnace, and we are looking to stabilize our production. In fact, we had one of our best months in November. With the stabilization of the Onça Puma, we can generate a $15,000 a ton nickel between $40 million and $50 million a quarter in EBITDA. With this stabilization, we're looking to bring forward a second furnace at Onça Puma.
It will bring our production up to 40 kilotons of nickel. It'll have a long life of mine, low CapEx intensity. It is a great project to add to the base metals portfolio. At last Vale Day, I spoke about our potential projects in Indonesia. We're still working hard on those projects in Pomalaa and Bahodopi. These two projects together represent about 110,000 tons of production in future years. We would own 100% of the mine, and we would take our joint venture share of that 110,000 production from the process facility. In summary, we are de-risking and stabilizing our production. With our current portfolio, we have the opportunity to increase our production from 200,000 tons per annum to 220,000 tons with the introduction of the second furnace in Onça Puma. On the right-hand side, I'd like to point out the potential.
As I mentioned, the 110,000 tons of nickel coming from Pomalaa and Bahodopi, Pomalaa representing an HPAL project with potential feed for the electric vehicle industry, and Bahodopi representing a ferronickel NPI production for the stainless steel industry. As I mentioned, we are looking to significantly increase our opportunities to find those new mines to continue our life of mine in Canada, whether it be Voisey's Bay, Sudbury or Thompson. We're looking at brownfield expansions, and we're looking at those surface deposits and looking to make feasible larger projects such as the ultramafic in Manitoba. To wrap up, let's talk about where the nickel business is today and where we expect it to be come 2025. In 2021, you'll see we have a very significant CapEx program as we build those replacement mines in Voisey's Bay and Copper Cliff and Sudbury.
We are cash flow positive to the tune of about $200 million. This assumes $15,000 a ton nickel. As you move over to the right and look at 2025, we reduce our CapEx in the coming years, as we introduce the improvements and the stabilization and the productivity gains, you can see the significant improvement in cash flow generation. Again, this is at $15,000 a ton nickel. With the improvements of about $800 million, we will generate in excess of $1 billion of cash flow. Again, at $15,000 a ton nickel. With each extra $1,000 a ton, we generate an additional $220 million in cash flow. In summary, we're turning around and transforming the base metals business. We are stabilizing our production in nickel. We are becoming a safe and reliable producer. We're investing in our future.
We're prepared to seize the opportunities to grow our copper portfolio, primarily in Carajás. We are preparing our nickel business to seize the opportunity to take advantage of electric vehicle growth. All of this to become a meaningful contributor of value within the overall Vale business. With that, I'll pass it to Luciano Siani to talk about capital allocation.
Thank you, Mark. Disciplining capital allocation is our fifth strategic pillar. To think about capital allocations, to think as owners. We do think as owners. To allocate capital, we need to understand where capital generates the most value. What is the story of generating value for Vale? What is the equity story for Vale? In our minds, the equity story has three components. The first one is de-risking. Because of a higher perception of risk, you see less value in Vale. De-risking goes through the addressing of the reparation of the liabilities of Brumadinho, the improvement in dam safety, the improvement in ESG practice, the resumption of production. The share prices are falling today because maybe you didn't like the production numbers for next year, because you're seeing risk. Have no doubt, we are allocating capital to reduce risk.
We are allocating capital, safety of dams, reparation of Brumadinho, production resumption. If there's one thing that Vale has done very well in the past, is to bring projects to life. Have no doubt, S11D+20 is coming, Capanema is coming, filtration is coming, the new dams are coming. The production will resume. On reshaping, which is the second part of how to allocate capital to generate value, we need to focus on the core business. We need to control our cash drains. There's a BRL 2 billion opportunity lying within Vale just by fixing the cash drains, which I will address. Also the growth opportunities, they are plentiful. Nobody's as well-positioned as we are in iron ore, nickel, and copper to deliver growth. Finally, there's the re-rating story, which are the five ambitions that you can read, that we talked about, to an extent.
All of this underpinned by sound cash flow generation, which will be mostly distributed to you. I'll start addressing some financial aspects of de-risking. Let's go to the main hot topic, which is Brumadinho. This chart shows the financials of the Brumadinho reparation. That does not include de-characterization of dams. If you look in the middle, we have spent so far as of October, BRL 12.1 billion in reparation, with the breakdown to the left. If you move to the right, you see that there are still BRL 9.5 billion in provisions in our balance sheet, and there is a footnote indicating that should there be an agreement, there's an additional BRL 8 billion to be provisioned. If you add all of that, the best estimate that we have today for the full cost of the full reparation of Brumadinho is BRL 29.6 billion.
Pay attention to the gray shaded areas, which sum up to BRL 19 billion. Everything which is in gray is in the scope of a potential agreement. Interestingly, there are amounts already disbursed that are in the scope of a potential agreement. Why is that? Because those amounts, they were disbursed according to previous agreements that specifically say in their provisions that should there be a master settlement or a court ruling, those amounts will be deducted from the collected damages or compensation payments on those settlements of rulings. We have BRL 3.6 billion that already count towards an agreement. Therefore, today, what we have in our balance sheet is BRL 19 billion earmarked for a potential agreement. We believe this amount is fair and is adequate. For an agreement to happen, the numbers need to be in this ballpark.
Now I'm gonna move to dam de-characterization, another important aspect of de-risking. On the left-hand side, you see the schedule of de-characterization of dams. On the right-hand side, you see the updated cash outflows in US dollars. There is an increase of $670 million, which will be recorded in the provision of the year-end. Why is that? Basically two reasons. First, we will need to build additional backup dams for other structures to be de-characterized beyond the structures which are in critical level. Also, we are advancing in the engineering studies for the proper method of de-characterization, and we are perfecting the numbers and therefore we have additional provisions. Moving on to reshaping and fixing our cash drains. Every one of you know that we have at least four assets, Samarco, the coal asset in Mozambique, VNC in Hanover, which consume cash.
If you look at the right-hand side on the column of 2020, you have a little over BRL 2 billion consumed in cash in 2020. In 2022, two columns to the right, we expect those amounts to be around BRL 500 million in just two years. Why is that? Because we are achieving some milestones, and we have ongoing measures. Starting by Samarco. Next week, production will commence and iron ore will flow through the equipment in the Samarco process plants, and pellets will be produced by the end of the month. With the prices where they are, we do expect that the cash flow needs of 2020 will revert eventually even to zero in 2021 and in 2022. Coal in Mozambique. The revamp is going on well, according to schedule. It shall finish in March.
The ramp-up will follow. Hopefully by the second half, we will be producing at a rate of 15 million tons. Therefore, the cash consumption will still be high in the first half, but will diminish dramatically in the second half. With a full year of 2022 at 15 million tons, the cash outflow will be BRL 200 million, mostly because of the burden of the project finance, because in operational terms, the business will be making money. Remember, fixing the asset is a precondition for exploring strategic options with coal. Vale Nouvelle-Calédonie. The care and maintenance plan is ongoing. The numbers you see are related to the care and maintenance plan. We shall spend in 2021 with care and maintenance around $350 million. From 2022 onwards, a number which is gonna be lesser than $100 million.
There is the ongoing transaction with a consortia with the presence of Trafigura. There may be signing of an agreement in the coming days. If that is the case, the package of support of Vale will be similar to what we announced already for New Century, and we hopefully will have a smooth exit. Again, by 2022, we will not be spending money with VNC. Finally, on Renova, there is an uptick in 2021, but for good reasons. Because we are now in a process of accelerated indemnification of the communities, thanks to the court rulings of 2020 that allowed us to go directly and deal with them. 2021 will be a peak year, and also from 2022 onwards, the numbers will decrease. Look at the opportunity. Yes, there's money that will be spent, but after that, the cash outflows will be much improved.
It's not only about fixing, reducing risks and fixing the business. Look at this honeycomb here, where we outline all the projects we'll be talking about in iron ore, in copper, and in nickel. The key message here is that beyond everything which dominates our story today of risk, of production resumption, and so on, there are lots of opportunities coming, accretive opportunities, marginal CapEx opportunities, and which will lead us to 450 million tons of capacity in iron ore, a target of 900,000 tons in copper, and 220,000 tons in nickel, plus another 110 in our JVs in Indonesia. I ask you, who else in the industry has those opportunities in such great commodities as iron ore, copper, and nickel? How much will all of this cost? The capital expenditures have been updated.
You should expect a normalized level of capital expenditures to the left of $5.5 billion going forward. This is up from $4.5 billion that we told you last year. Why is that? That's because of the many strategic decisions that we made in order to make all of this happen, which are on the right. We are going to be very bold on reducing dependency on dams. The filtrations are being anticipated. The NewSteel technology is being employed for dry concentration. We are changing our energy matrix. Eduardo just announced the Sol do Cerrado project, which will reduce energy costs. We're replacing production capacity. We're building the capacity buffers. I mentioned S11D with 120, Capanema. We have the low carbon agenda with new products. There's a lot coming online.
Honestly, if you compare to our competitors, still a very low level of CapEx and a very efficient use of resources for all that we are proposing to do. Because CapEx continues to be low, the cash flows will continue to be plentiful. These are our updated estimates. If you look to the left, EBITDA in 2023, with all those improvements, with all the volumes coming in, with all the replacement of capacity in nickel, with Salobo III coming online, EBITDA will increase for a given level of prices substantially. To the right, we took the average, the accumulated free cash flows for the three years, and we'll add them up and you average, you see that the free cash flow yields, considering a market cap of $75 billion, are very considerable, and should merit your attention.
What are we going to do with those free cash flows? Well, as you know, that depends on the balance sheet. What is the status of the balance sheet? If you look to the left, you see our expanded net debt. We forecast financial net debt to be zero or slightly negative by the end of this year. Therefore, our expanded net debt is mostly comprised of other liabilities. Leases, currency swaps, and head fees, the tax refinancing, they have a specific schedule and payments which are defined, whereas the Brumadinho provisions and Renova foundations are expectations. We will be at $11 billion at the end of the year, including the new provision for the MD characterization that I just mentioned.
To the right, you see what the trajectory of this expanded net debt will be, considering 100% of cash flow distributions, beyond the CapEx that I mentioned there. The trajectory is very virtuous. Because we look medium to long-term, there are no obstacles to distributing 100% of the cash flows of Vale going forward, and perhaps even more. With all of that in bearing in mind, I hand back to Eduardo to make a closure on our story of de-risking, reshaping, and rerating.
Great. Thank you, Luciano. I won't dare to try to repeat your great presentation, but I want to reinforce a very specific point here. We are, with our team, committed to work with transparency, with focus, and on discipline. Every time that we talk to the market, we talk. It's not a sprint, it's a marathon. If we go through each one of these pillars here, it's extremely transparent where we are, where we are advancing. We are starting to move from a story of our just de-risking, starting to build the story of rerating value to create a much better company. Just to conclude, I believe that the ones that will join us on this journey will reap the benefits of one of the greatest share creation, value creation, I believe, for sure, in the mining industry, as Luciano already mentioned.
With that, I would like to hand over to Ivan that will lead us through the Q&A so we can give more clarity on your doubts. Count on us to deliver on what we committed. As we did last year, we came here this year, and we said exactly where we are, and we're going to come next year and tell you exactly what we were able to do in 2021. Thanks again for your attention. This virtual setting is a novelty for everyone. Now back to Ivan to try to coordinate our Q&A virtually again. Thanks, Ivan, and thanks for your attention.
Okay. Thank you very much, Eduardo, and all the executives for the great presentation. Very detailful. As I said in the beginning, we received questions in advance. We received questions during the presentation, and thank you for that. We're trying to group the questions here, so be sure we will address most of them, or where we see a lot of level of interest. Maybe starting with one question here to you, Spinelli, on iron ore production. The question is related to what are the main challenges that Vale faces in achieving this goal of a capacity back to 400 million tons?
I think the people want to know, investors want to know how much of that growth is in our own hands, and how much depends on the government's licensing and goodwill, and also how much buffer do you think we'll have to reach the guidance in case something goes wrong. In fact, how challenging are these additional volumes beyond 400 million tons? Thank you.
Thank you, Ivan. It's always an opportunity to clarify what we're doing here. It is important to say that we are planning to deliver. I think we had a frustration this year and during the 2020, and we are addressing our planning to guarantee that we are going to be reliable. This is one message I want to address here. Remember that we have three main systems. I can say that the northern system, the southeastern system, we have actions that are in our hands. Obviously we need authorizations to start up some operation, but I can say that's business as usual. It's nothing that is different from the common process. North and southeastern, we need only to deliver what we are bringing the new assets and the license of pits. In the southern system, it's quite different. Here we are counting on authorizations, prosecutors.
Remember that we have to test, we have the mining agency in Brazil checking all the evolutions we had regarding the upstream dams. Remember that we are not counting on that to reach the 400 million tons. In our plan, the southern systems, it's more for a mid to long term. We are counting only in the buffer capacity. This is one point that I want to say. The other is the planning for next year, if you have any buffer for that. We have the contingencies. We already planned the heavy rainy season that we are expecting with La Niña, so it's already there. Another point is that we're not counting any downstream dams.
If you evolve in any of them in terms of safety and assessment, we can have back these assets and anticipate some volume, but we are not counting in our guidance of production. In the extra buffer for the future, I want to emphasize another point that Luciano said. Those projects, the S11, the 120, and the Capanema, they are brownfield projects. These are not a greenfield. We know exactly what we need to do. We know the site. We have the design for that. The risk is lower when you are planning in the near future. For next year, we are confident that we can deliver our guidance. We have some possibilities, some upsides, but as we have so many actions to do, we prefer to be more conservative in this guidance for the maximum production for next year.
Okay. Thank you very much, Spinelli, for your answer. Maybe moving on to base metals and VNC, and I think this is to you, Mark. The question is, Vale entered into this exclusivity agreement to negotiate the sale of VNC with Trafigura. This exclusivity is close to its expiration. What could you comment about the negotiations, whether Vale is optimistic with a positive deal out of this? Also, if you can refer to the protests of those opposed to the deal on the ground. What would be the alternatives and timing in the case that the deal falls apart? Thank you.
All right. Thanks, Ivan. Maybe just stepping back. We've been working tirelessly since the end of 2019 to exit New Caledonia. We put a lot of effort into selling the business. As was mentioned earlier, we did have a deal with New Century that unfortunately could not be completed, and it was followed by, as was mentioned in the question, an exclusivity arrangement with a consortium, which is a combination of the management team, as well as Trafigura, as well as some other shareholders including employees. That offer needs to meet certain parameters. We feel that it checks the boxes in many ways. There is a clear plan for sustainable operations following our exit. It maintains employment. There is broad inclusion and representation among the society of New Caledonia and its employees.
In summary, we continue to negotiate on that, and as it was indicated in the question, it's two days away, and I could say at this point, we're hopeful. We'll certainly be bringing updates in the coming days. Just maybe reflecting a little bit on what we've been presented with in the current situation as was intimated in the question. This offer that has been put together, this non-binding offer that was the subject of exclusivity, is a rather unique construction. It has very strong governance and shareholding protections. It's a made-in-New Caledonia solution.
If you look at the proposed share structure, while it does have some investments from Trafigura and potentially another party, the vast majority, approximately 60% of the shareholdings would be a combination of the management team, the employees, the current New Caledonian shareholder, SPMSC, and there's a number of shares that are open and committed for the indigenous tribes surrounding our plant, as well as civil society. It's quite a unique structure. As I indicated, it supports the continued employment of the current employees of the plant. One of the other things that we've done is we've made it very clear, we committed to a sustainability pact for the indigenous groups surrounding the plant back in 2008.
We've made it very clear that we will always guarantee those payments no matter what happens, whether it's in the conclusion of a deal and a new party own it or in care and maintenance. Coming now to the question about protests. There are protests on the island. There are currently some blockades that are preventing the operation of our mine, although the plant is currently operating. We feel this is a minority group. It's a minority group that is completely dedicated to directing the ownership of the plant to another consortium, which is a group that is a partner in the Northern Project in New Caledonia as well as Korea Zinc. We looked at this offer in good faith. It was found wanting. It didn't have a clear plan. It didn't have financing.
Unfortunately, it has led to some protests, which are causing us some great difficulties. We hope that the robustness of the current deal, which brings in broad representation within New Caledonia community, including the indigenous groups, will win over the people as something that's in their best interest, because we truly believe it is. The final bit of the question, I believe, was around the alternatives. We've made it very clear that we will exit New Caledonia, and our timeline was the end of this year, and we are committed to that path. While we are completely dedicated and working hard as possible on completion of the current offer with the management team and Trafigura, if it does not proceed, we will proceed along the path of care and maintenance.
We have been planning for that, because we have to plan for that in case it doesn't pan out. Now, of course, we will have to go to the Workers' Council and work in consultation with them, but that would be the next step. I believe the last part of the question was around the cost. I think Luciano set that out in his presentation. The care and maintenance costs that he had referred to next year of approximately BRL 350 million. Of course, that depends on the consultation process and the timing and whether some of that money is brought forward from 2022 or post-2022. I think Luciano's figures are a good indicator of what to look for.
Okay. Perfect, Mark. Thanks for your answer. Now, we can move to the Brumadinho potential agreement, and I think this question goes to Eduardo and also Alexandre D'Ambrosio. The question here is, if we could give any update on the discussions with the State of Minas Gerais and the Public Prosecutor's Office. If there are any bottlenecks or difficulties along those negotiations, and what would be any expected achievements along the road, and how optimistic is Vale on the conclusion of those ongoing negotiations, and there are one next week. Also, if you can talk about the amounts of claims that have been discussed, or any other detail, that would be appreciated. That question was asked a lot here in advance and during the presentation. Thank you.
Thanks, Ivan. I'll ask the help for Alex. Let me just give the frame. I think it's more important than the details. We are aiming at the agreement that has governance, that has legal certainty, that will allow us to execute on the reparation and the compensation. That's very simple. Why we say encouraging? Because there is a new process going on. We have already two audiences.
Hearings
Two hearings, that we're discussing with mediator, that Alex can tell you a little bit more later. Of course, that brings more convergences to the discussions. That's why we believe is encouraging. The first milestone that we're looking at is to get down the framework for the governance. When we start talking about values, obviously, we believe that the values, they have to be reasonable, acceptable, and in a logic frame, because they had been discussed before. That's why we put them on the footnotes. Luciano mentioned that in his presentation as well. We're not there. We are still in the first phase of trying to reach this frame, this legal frame to allow us to execute whatever amount we agree upon. Finally, on a process like that, it's not that in one meeting you're gonna solve at all.
We already had two meetings, productive meetings. We're gonna have another one, I believe, next week on the ninth. We are, as mentioned several times here, in extremely good faith to try to reach this framework and settle the compensation, the reparation. That's where our minds are. Talking about the optimistic, I don't think it's the case, but I think it's the fact that we were never so close. I think we are on a process that with the mediation, we believe there are possibilities that to happen, but without any timeframe. These questions looks like the dividend questions, like when are you going to pay dividends? It's not something that you can grasp. It's a process that has to be taken in very care to protect the affected communities, to protect the stakeholders, to protect the state of Minas, to protect Vale.
It's a complex process, and will be dealt with a lot of transparency as well. When we get to it, will be, for sure, a win-win solution for the several parties around. I'll ask Alex to give some more granularity because he's the one that is leading the discussions through the mediation chambers.
Thanks, Eduardo, and thanks everyone for the opportunity to discuss, to raise this question. Well, Eduardo mentioned that we're certainly encouraged by this mediation process because it provides us with a structured environment to have a constructive dialogue. Even the mediation is conducted within the Court of Appeals of Minas Gerais, it's very different from a court hearing. It's very different from a court hearing because it does not result in rulings by the judge. Instead, we see this as an opportunity to find common ground and reach consensus on some key issues. The most important of these issues, as Eduardo mentioned, is governance and finality of the potential agreement. It has to be something that will close most of the government's claims.
In broad terms, I'll explain to you what that agreement is meant to address three major chapters, so to speak. First, there should be an amount paid by Vale to address collective damages, and this would be a payment obligation that, once paid, would release Vale from all collective damage claims. These amounts would be managed by the affected parties themselves with courts supervision, but without Vale's involvement in this management. This would be a capped amount. The second chapter would be a payment to be utilized for funding infrastructure and mobility projects by the state government. These funds would be managed directly by the state government and should be focused on priority projects that are intended to boost local economy.
This would also be a payment obligation by Vale, which once made, would acquit Vale from compensation obligations to the state. Vale wouldn't have any involvement in managing these funds, and this payment would also be capped. Now, the third section has to do with environmental reparation, and we've based the estimate of that investment on technical studies that provide us with a list of projects that are required to restore the region's environmental damages. These projects are, and the investments related to these projects, must be defined beforehand in the agreement, and that's what we're discussing a lot right now. Vale would assume the obligation to execute these projects. This chapter represents performance obligations by Vale that are to be monitored by the court with technicians to attest delivery. For this chapter, there would be a firm estimate, but no capped amount.
It's important that once performance is attested by the court, then Vale would be released from these obligations, and that's what we call the finality. Some are payment obligations that once made or acquit Vale from those obligations. The other are performance obligations that once attested, would release us from obligations. Now, it's important to clarify also that this agreement is being made with government authorities and not with individuals who may be entitled to individual compensation. For those, we will continue to pursue individual settlements with families who suffered damage. We have been successful so far in making settlements with more than 8,000 people through mediations that are conducted on a case-by-case basis, directly with the individuals who feel that they've suffered damage. A potential agreement with the government will not affect individual claims and will not preclude future settlements.
I think part of the question was, well, will this agreement close off and settle all claims? No, the individual claims will be discussed one by one. As Eduardo mentioned just now, it's essential that all government authorities, including the federal and state prosecutors, adhere to any potential agreement. This is, in our view, fundamental to ensure the legal certainty that we have no one left out from the government side. I think with regard to the lawsuits that we're facing, the effect of this potential agreement, in our view, is that the collective civil actions would be suspended, and Vale then would receive formal acquittal for those matters that are expressly covered by the agreement. The remainder, if any, would continue to be consolidated and continue to be discussed by the judge, waiting for the performance to be completed.
Those claims would be combined, single legal proceeding, and once Vale delivers, there would be acquittal for each one. As Eduardo said, too, we can't give you an estimate about timing. We believe and hope that an agreement is possible, and we are definitely prepared to continue discussions with the government until we reach an agreement. There's no final date. There's no drop-dead date for these discussions, they will continue as needed. It's really important to remember that Vale has already been executing many reparation projects and will continue to do so regardless of the conclusion of any agreement, because we have already committed to full reparation of Brumadinho. We say that while an agreement is certainly desirable, it's not a precondition for Vale to carry on the reparation. I hope that answers your questions. Thanks.
Thank you very much, Eduardo and Alex. I think it was a great explanation for a question that we get a lot. Thank you very much. Maybe now moving to dividends, and perhaps this can go to Eduardo and Luciano. The question here is, what are the possibilities of dividends for 2021 above the minimum dividend policy? How that final agreement of Brumadinho could impact this extraordinary dividends along the way? Looking out three, four years when iron ore production is back to 400 million tons, how should we think about capital allocation? Should we just expect capital returns to shareholders, or are there interesting and perhaps material projects that Vale is considering investing to drive growth?
Great. Thank you, Ivan. It's a long question, like several dimensions. Let's try to be brief because I think Luciano can give more color as well. I think there's a main mindset behind everything we're doing here. We want to be consistent and predictable on our shareholder remuneration. We want to look back five years from now and look to a very different picture from the five years from now. We want to have the opportunity to whenever we are fully complied with our financial and non-financial obligations, the natural return is to our shareholder. I think Luciano was extremely transparent and clear when he mentioned that. That's our goal, that's our capital discipline, and that's where our minds are. That's very important to bear in mind.
Options to do that, buy back extraordinary dividends. Things that have to be managed at the time that they have to be managed. We have a policy that was established in 2017 that defines minimum dividends. As we did in the last quarter, last semester, we assessed market conditions. We look at the trajectory of our expanded debt, and we felt that we could pay an extraordinary dividend. Are we going to do that in March? We will assess again, and we have to look at it. If it's the case, yes, it's possible. I think this is a more broad, conceptual, philosophical question. When you look five years on the road, as I mentioned, if there are any accretive opportunities, Vale would look at it for sure. I still think we are in the homework phase of rebuilding the company.
Our focus, and I think Luciano, you reiterate that, we have enormous opportunities inside our house. Enormous. Who has what we have? We can grow our iron ore, create flexibility, shrink capacity. We are not going to flow the market. We will always stick to the value of the volume. We need to create flexibility. We can invest in our core business. Copper, I like to say, is the copper dream. I think we missed the point in Carajás. We have a tremendous opportunity in Carajás, a tremendous opportunity when we have the synergy with iron ore. We can allocate capital there. There are others in ESG as well that we are looking at it with an accretive options because going green, I don't think is spending money. I think we're going to make money with that, by the way.
There are several options to allocate capital. Bear in mind, our mindset is after we comply with our commitments and even this specificity of the discussion around Brumadinho's settlement. An agreement is an agreement. If it's nothing something reasonable or in a ball range that makes sense, there is no agreement. It will impede us to pay a dividend, the extraordinary dividend? No, because goes again on a directional phase. Again, you cannot expect numbers that are, and Luciano, again, was very clear on that when he did his presentation, that goes way out of what we are already discussing because it doesn't make sense to have an agreement like that. It's not reasonable. I don't believe that the agreement, wherever we finish them, would be the fact not to pay an extraordinary dividend.
I will ask Luciano just to add up to my reasoning because he's very good on timed thoughts. Okay, Luciano, please.
Okay. Now, as you saw through the numbers, the trajectory for expanded net debt is very good. An additional provision for an agreement will not change the overall picture of this trajectory. Therefore, we should be able to pay extraordinary dividends even with settling an agreement. Obviously, under market conditions similar to what we've been having throughout this year, absent something unforeseen. That's the goal. Having said that, in March, usually we are in a seasonal low in terms of cash flow generation, and the minimum dividend for March will already be very substantial because it will be calculated based on the second half of this year. I would say for calendar year 2021, very likely extraordinary dividend. For March, it will depend on the situation then, and will not vary with a potential agreement.
Longer term, just to bear in mind that the days of BRL 10 billion, BRL 12 billion, BRL 15 billion of CapEx are over. These were the days of the super cycle. Everything that we do now is to build upon our platform. Everything is marginal in terms of CapEx. Whatever we pursue in terms of growth opportunities does not change the big picture that cash flow generation will be an order of magnitude above any spending on marginal opportunities. Therefore, the expectation is that still after we generate BRL 400 million, that we will return most of the cash flows to shareholders.
Luciano, just to grab your comments again, because this is a very tricky point, right? Because we have no control on the market conditions, we have no control on where the market are. The first quarter could be a little seasonally low on volume, it could be seasonally high on price. We don't know. That decision will be always assessed at the moment, looking for where we are, looking at the trajectory of our commitments, the trajectory of our markets, we decide. The philosophical point is when there is excess of cash, that will naturally return to the shareholders. That's the main point I think I want to make, we as a team, we agree with that. Of course, we suggest to the board, because it's a final decision, it's made by the board.
Thank you very much, Eduardo and Luciano. Moving on, and back to you, Spinelli. The question here is on iron ore sales and shipments. It is, how could Vale adjust value over volume strategy based on where spot prices are? Could Vale destock more aggressively in 2021 to supply a market that is currently running on a deficit? How to manage volumes in a scenario where iron ore prices persistently are above $100 per ton. Also, if you can comment about mix and year-on-year growth, this is also part of the question here, is one of the questions we get the most. Thank you.
Thank you, Ivan. Well, you can say my sales team is missing me, so we need to focus on production. That's the main message for this moment, that we have a great price, we need to deliver volumes. That's the first comment I would say. Adjust the value over volume strategy. Well, remember that we always access, every week actually, we maximize our margins and what's the best supply chain or best way to sell our products. Every week we do it. Today, when we blend, we maximize the value. That's the main message here. You asked about mix, Ivan. This year, we reach 150 million tons of BRBF. It's amazing success. Almost 14% growing comparing to last year. Next year, we keep growing, not in this space, but we have a slight growth comparing to this year. That's the mix.
There's another thing that I want to emphasize. We did this in our quarterly results call that we don't use our inventories to speculate. We have an operational inventory. Let's burn the inventory and sell and make money because the price is high. We cannot do that because we have a time, a lead time, to have the blend and sell. We had a gap in the last quarter. Remember the gap of 17 million tons to restore this pipeline. We don't have any planning to have any other huge gap for next years, actually. Gradually, we need to do this as we grow in China, as we grow with our BRBF, we need to add some inventories, but not like we did in the last quarter because the last year we decreased a lot because of the disruption of Brazil. We don't see this anymore.
For next year, shipments and production and sales should have the same level of the same number. We don't forecast any gap in terms of inventory for next year.
Okay. Thank you very much, Spinelli. Now the question on safety standards to you, Medeiros. The question is, Vale has demonstrated a sense of priority in safety topic since Brumadinho, with new standards and practices implemented. However, it is hard to observe the evolution day by day. How is Vale today compared to peers, and how does it intend to be in the medium term? Is Vale committed to being a first adopter and advocate for the new Tailings Dam Safety Initiative standard? How have they demonstrate this, or how have we demonstrated this? Thank you.
Thank you, Ivan. Starting with the safety. I'd say that Vale is now demonstrating much more than a sense of priority because priorities change through time. Safety for Vale is a value, so values don't change. As you saw in my presentation, we are making significant progress on the occupational health front. We're moving the exposure from more than 23,000, 25,000 to 19,000 this year. Our objective is to reach 11,000 by 2025. These will make our job sites healthier. On the occupational safety, we have been focusing on reducing the high potential injuries since 2018. Our average reduction is about 20% per year. Our goal is to reduce this type of injury to zero by 2025. On process safety, all the details were covered through the HIRA in terms of risk mapping and also establishing and monitoring the critical controls.
When we look at the ICMM statistics to compare against our peers, just looking at 2018 and 2019 data, obviously excluding the Brumadinho tragedy, Vale's performance was pretty much average. We are obviously working on this to improve Vale performance overall. Now, moving to the dams. Recently, our board of directors, they have approved a policy for dam safety and geotechnical mining structures. This policy is a public document and is available on our website. This is one of the global standard requirements like the engineer of record as well. As I mentioned, their reports will be available through our ESG portal during the first quarter of next year. Our initial assessment indicates a very high level of adherence between our tailings management system and the global standard. Obviously this is based on our current understanding of the standards requirements.
During the beginning of next year, ICMM and the co-conveners, they will come up with the guidance about implementation, and then after looking at this guidance, we'll be able to come up with a more accurate position. Anyway, we believe that we are in a very good position to complete the implementation by the end of next year. This is basically because we started the review of our daily management system more than a year ago. Thank you, Ivan. Back to you.
Thank you so much, Carlos. Mindful of the time, let me go to the last question here. Then we'll have closing remarks as well, please bear with us. The last question will be about capital allocation. This is to you, Luciano. The question is: Can you talk about the strategy regarding liability management, given that you expect to be within the expanded net debt target? Is there an opportunity to highlight the ESG efforts you've been making by pursuing a sustainability-linked bond which could also help to extend the debt maturity profile? Thanks.
Okay. As regards liability management, the market is very good for funding, but it's very bad for repurchasing our outstanding bonds. We will develop a strategy minding these two realities. Yes, there is an opportunity for an ESG-linked bond. It's very important for us not only to talk about ESG, but to have someone else from the outside signing off on our progress. That's why we're so happy with Moody's upgrading our ratings based on ESG improvements, with Fitch upgrading our ratings based on ESG improvements, with Sustainalytics improving our assessment based on ESG improvements. An ESG bond will fall into this category. We would assume commitments to the outside world. We would be tracked, followed, and hopefully, we would even fund ourselves at lower costs. Yes, we're looking into this.
Okay. Thank you very much, Luciano. Now I will hand over to Eduardo for his closing remarks. Thanks.
Thanks, Ivan. First of all, I would like to thank you all for your attention. These two hours is long, but I hope it was useful and fruitful for you. Reaffirm the things that we've been saying since day one. Brumadinho is our number one priority. We will repair it, we will learn from that, and we'll build a much better company because of that as well. I think we outlined today the roadmap for this, from coming from the de-risking, that there is a lot of stuff to be done. You saw there in the dashboard. We are the reshaping, we are focusing, we are putting our mouth where our money is, like in VNC, we mentioned that last year on Vale Day. On the re-rating. Re-rating is our dream, so we have to get there.
I think, as I mentioned that we have a roadmap for that. As important, we have a very committed team, not only in the executive board, but within our 70,000 employees to make that happen. Again, it's not a sprint, it's a marathon, but the ones that will come to run with us, for sure will reap the benefits of a big value creation, both for society and for the shareholders. With that, again, I thanks a lot for your attention. Ivan asked me to pass him back because there is, I think, the research.
Just one more thing related to our survey. Please, before you go, please scan it, and answer the survey because it's going to be very helpful for us where we did well and where we can improve so we can continue to improve our communications to you all. Again, thank you very much for your attention here and see you soon.
See you next year, hopefully physical.
Indeed. Thank you so much. Have a great day, everyone.
Thank you. Have a great day, everyone as well.