Brazilian miner Vale hikes 2011 capital investment to $25 billion
05 October 2010
Brazil's Vale SA, the world's second-largest miner after BHP Billiton is reportedly planning to invest a record $25 billion next year in order to expand its lucrative iron ore and fertilizer business.
O Estado de S. Paulo, the daily newspaper published in the state of São Paulo, citing sources, yesterday said that Vale will increase its investment budget by at least $10 billion in 2010 to a record between $23 billion and $25 billion for 2011.
The capital expenditure plan is likely to be announced by the Rio de Janeiro-based miner at an investors day meeting scheduled to be held in New York on 18 October.
The paper said that the investment figure does not include potential expenditures on acquisitions.
Vale had originally earmarked $14 billion as capital expenditure for 2010, but reduced it by $5 billion on uncertainities over a revival of the global economy to pre-2007 levels.
But along with Anglo Australian miners BHP Billiton and Rio Tinto, Vale was able to jettison the well-established and traditional, annual iron ore-pricing contracts with steelmakers in favour of quarterly ones. They also raised the price of iron ore by nearly 30 per cent to $150 a tonne.