Brazilian miner and iron ore producer Vale expects to reduce its Capex for the next four years, as the company looks to diminish its debt while increasing its competitiveness.
The company said Capex in 2017 should decline to $4.5 billion, from $5.5 billion in 2016. As for the next four years, Vale estimated it should spend $4 billion in 2018, $3.7 billion in 2019, $2.9 billion in 2020, and $2.6 billion in 2021.
Vale’s spending on expansion projects is also expected to decline gradually from $1.8 billion in 2017 to $1.1 billion in 2018.
Speaking at an investment forum in Brazil this week, Luciano Siani Pires, Vale’s CFO, said the “new Vale” is a “lean and competitive” company. Vale announced recently a new CEO, Fabio Schvartsman, a commodities industry veteran.
As a way to reach what it labeled as a “solid financial profile,” Vale expects to increase its productivity while diminishing Capex, at the same time maintaining strong cash generation. Vale said it will keep a focus “on the investor, with a perspective of strong dividends.”