Vale Board Approves $14.2 Billion 2009 Spending Plan By Jeb Blount
Oct. 16 (Bloomberg) -- Cia. Vale do Rio Doce, the world's largest iron-ore producer, plans to spend $14.2 billion in 2009 to expand mining operations worldwide even as the company expects the global economy to slow in the coming quarters.
The 2009 plan, which includes investments in South America, Asia, Africa and the Middle East, is part of a larger effort to increase iron-ore output 69 percent to 500 million metric tons a year by 2015, the company said today in a statement. Vale also plans to expand nickel, coal, copper and alumina operations.
The global credit crisis has stoked investor concern that the world economy may be headed for recession, undermining commodity prices. Still, metals demand will continue to grow in the longer term along with emerging market economies, Vale said.
``The financial shock and the ensuing credit supply slowdown imposes an additional and important restriction to growing the supply of minerals and metals, favoring large-scale, low-cost producers such as Vale,'' the statement said.
Vale fell 2.1 percent in Sao Paulo trading before the plan was released. The stock has slumped 29 percent in the last month compared with the 21 percent decline of the Bovespa index that tracks the most-traded stocks on the Sao Paulo exchange.
Of the total planned spending, $11.7 billion, or 82 percent, will be to complete existing mines and projects, with $3 billion for transport such as railways and ports, it said. Investment in non-ferrous metals such as nickel, copper and aluminum will receive $4.79 billion, and iron-ore is budgeted at $4.2 billion.
Countries with projects include Brazil, Canada, Indonesia, Chile and Peru, as well as nations in Africa and the Middle East, it said. Vale plans to boost nickel output to 450,000 tons by 2015, 81 percent more than in 2007.
``The rapid increase of the consumption of minerals and metals are an integral part of the long-term economic development,'' the statement said.
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