Vale cuts investment budget for 2015, expects iron ore output to grow

SAO PAULO (Scrap Monster): The Brazilian mining giant-Vale has cut the mining investment budget for 2015. Vale’s Board of Directors approved $10.2 billion budget for the year, dropping by almost one-third when compared with 2014. This is the lowest investment budget announced by the company in past six years. However, Vale anticipates iron ore output to grow significantly during the next year.

Out of the $10.2 billion, $6.4 billion will be allocated towards project execution expenses and the balance $3.8 billion will be utilized towards sustaining the existing mining projects. The funds will be largely used at Vale’s iron ore mining facilities.

The company expects the total capital expenditure for the current year to touch $13.8 billion-out of which $9.3 billion will be towards project execution expenses and the balance $4.5 towards existing operations. In addition, it also estimates R &D expenses to total nearly $900 million during the year.

The Carajas mines in Brazil will receive $3.7 billion towards development of integrated iron ore mine operations and expansion of railway-port. Vale also plans to spend $659 million at Itabirites iron ore mines.Further, the company stated that fund allocations will target operations such as replacement of equipment, expansion of buildings, waste dumps and tailings dams, promotion of health, safety and corporate social responsibility.

Meantime, the company expects the iron ore output to reach 340 million tons in 2015. Also, Nickel and Copper output is expected to grow to 303,000 tons and 449,000 tons respectively.