TORONTO (miningweekly.com) – The board of Brazil-based diversified miner Vale has approved an investment budget for new and sustaining projects of $10.2-billion for 2015, representing the fourth consecutive year in which Vale has reduced its capital expenditure (capex), as it deals with low iron-ore prices.
Iron-ore prices had fallen dramatically this year owing to the slower growth of its most significant importer China and an aggressive supply push from major iron-ore producers, particularly in Australia.
Vale said on Tuesday that keeping sustaining expenditures under control was a key priority and the budget for 2015 represented a decrease of 16.2% over last year's budget.
The dual-listed miner had budgeted capex of $6.36-billion for project execution and $3.81-billion to sustain existing operations.
The company, the largest iron-ore producer in the world, pointed out that its main growth initiatives in iron-ore were responsible for 71% of the $6.36-billion budgeted for project execution in 2015. These initiatives included the expansion of the integrated iron-ore operations in Carajás through the execution of the S11D and CLN S11D projects and the completion of the Itabirites projects. The Itabirites projects were for the partial replacement of capacity and the improvement of the quality and yield of output from the southern and south-eastern systems, including the Conceição Itabiritos II, Vargem Grande Itabiritos and Cauê Itabiritos projects.
The budget for the ferrous minerals business was just under $2-billion, while base metals sustaining investments would total $1.4-billion.
Expenditures in sustaining the fertilisers business would be $290-million and the coal business budget was $78-million.
The company also noted that it aimed to produce 340-million tonnes of iron-ore in 2015, as well as 44 400 t of iron-ore pellets, 10 633 t of coal, 303 t of nickel, 449 t of copper, 476 t of potash and 8 508 t of phosphate rock.
Despite holding an investor day in New York on Tuesday, Vale’s NYSE-listed shares lost 4.07% at $8.38 apiece in afternoon trading, having shed nearly 40% in value since the start of the year.