Brazilian mining company Companhia Vale do Rio Doce (Vale) has announced that its BoD has approved the investment budget for 2009, involving capital expenditures of $14.2 billion aimed at sustaining existing operations, strengthening growth via research and development (R&D) and executing projects in several segments of its asset portfolio.
According to Vale, the company's investment budget clearly signals that project development is the priority of its growth strategy.
The program for 2009 involves investments of $14.2 billion, with the execution of over 30 projects in Brazil, Canada, Mozambique, Oman, Australia, Indonesia, Chile and Peru, among others.
Of the 2009 budget, $11.652 billion will be invested in organic growth, corresponding to 81.8 percent of total spending, with $10.178 billion allocated to project execution and $1.473 billion to R&D.
R&D expenses include $736 million set aside for Vale's global mineral exploration program, $510 million for conceptual, pre-feasibility and feasibility studies to develop mineral deposits already identified, and $227 million to be invested in new processes, technological innovation and adaptation.
The main projects in terms of financial disbursements in 2009 are: Carajás aimed at reaching 130 million mt per annum ($798 million), Serra Sul ($675 million), Tubarão VIII ($527 million), Oman ($458 million), Onça Puma ($597 million), Salobo ($459 million), CAP ($405 million), Moatize ($444 million), Bayóvar ($279 million) and Barcarena ($314 million).
According to the approved plan for 2009, ferrous minerals will receive investments of $4.179 billion, 29.4 percent of total capital expenditure.
Expenditures in infrastructure include $822 million in power generation and $3.027 billion in logistics, of which the bulk will be dedicated to supporting Vale's plans to expand its iron ore production capacity. Meanwhile, the company expects to invest $808 million in the coal business in 2009, which involves mainly the expansion of Carborough Downs and the development of the Moatize mine.
The Oman project concerns the construction of a pelletizing plant with an annual production capacity of 9 million mt per annum of direct reduction pellets and a distribution center with capacity to handle 40 million mt per annum at the Sohar port in Oman. The total capex is $1.356 billion, with investments of $458 million for 2009. The start up is planned for the second half of 2010.