CVRD Investments of US$ 11 Billion in 2008
12 Oktober 2007 - 3:42AM
PR Newswire (US)
RIO DE JANEIRO, Brazil, Oct. 11 /PRNewswire-FirstCall/ -- Companhia
Vale do Rio Doce (CVRD) states that its Board of Directors has
approved an investment budget of US$ 11.0 billion for 2008, the
largest annual investment program ever undertaken by CVRD or by any
mining company in the world. The 2008 budget is part of the firm's
strategic plan and underpins the 5 year, U$59 billion investment
program and consequently involves a significant increase in capex
for organic growth as compared with the period 2003-2007, estimated
at US$ 18 billion. The decision to invest on such a huge scale is
firmly based on our confidence in the long-term fundamentals of the
global economy and on the belief in a structural change in the
demand for minerals and metals. The Company will concentrate on
organic growth, with the development of a wide portfolio of
projects founded on its world-class asset base. In order to support
this expansion, CVRD will invest heavily in logistics
infrastructure and energy generation. This investment process is
anchored a rigorous discipline in capital allocation, research
excellence, development of projects and operations and in corporate
social responsibility. Priority for allocation of Company cash-flow
will be financing of growth- related activities, within a framework
of a solid balance-sheet and a low-risk debt profile. The
completion of the planned investments should lead to a significant
increase in CVRD's main products. In the case of iron-ore,
production in 2012 should reach 422 million metric tons (mmt), with
production by the end of the same year running at 450 mmt. With the
implementation of the strategic plan, the Company's goal is to
maintain a solid increase in cash generation, produce substantial
shareholder value and create thousands of new jobs. This process is
rooted in the Company's basic values: ethical standards,
transparency, emphasis on corporate social responsibility, respect
for life and diversity, entrepreneurial spirit and the ongoing
quest for operational excellence. Break-down of investment budget
The program involves more than 30 projects, located in Brazil,
Peru, Chile, Canada, Australia, Indonesia, New Caledonia,
Mozambique and Oman. Investments in Brazil will account for 73% of
the budgeted resources for 2008, an amount of US$ 8 billion. Of the
2008 budget, US$ 8.436 billion will be invested in organic growth,
corresponding to 76.7% of total spending, with US$ 7.552 billion
going to project execution and US$ 884 million in R&D. Expenses
with R&D include US$ 349 million set aside for the mineral
exploration program. Investments to support existing operations are
estimated at US$ 2.563 billion. This represents an increase of US$
568 million over the amount budgeted for 2007 (U$ 1.995 billion).
This is explained by the growth in asset base and by the need to
increase significantly investments in the Canadian nickel
operations, which had received little investment in the past.
Consequently, in 2008, US$ 1,019 billion will be dedicated to
nickel operations. US$ 3.618 billion will be invested on
non-ferrous minerals, some 32.9% of total capex for 2008,
considering the final phases of Goro and Onca Puma, both important
nickel projects, and the beginning of development of Vermelho
(nickel), Totten (nickel), Salobo I (copper), Papomono (copper) and
Bayovar (phosphate). Growth in iron-ore production capacity to 450
Mtpa will require heavy investment in the development of new mines,
plant construction and increased logistics infrastructure. For the
ferrous minerals businesses US$ 3.251 billion is set apart for
2008, whilst US$ 1.870 billion will go to logistics; of this amount
for logistics, US$ 1.152 billion will go to supporting growth in
iron-ore production capacity, US$ 755 million for aluminum, US$ 470
million for energy generation and US$ 390 million for coal. The
main projects in terms of financial disbursements in 2008 are:
Carajas 130 Mtpy (US$ 1.165 billion), Goro (US$ 723 million), Onca
Puma (US$ 581 million), Salobo I (US$ 387 million), Alunorte
6&7 (US$ 382 million), Itabiritos (US$ 341 million), Serra Sul
(US$ 145 million), along with investments in logistics - Southern
Corridor (US$ 379 million) and Northern Corridor (US$ 334 million)
- and energy generation, Barcarena (US$ 188 million) and Estreito
(US$ 165 million). For detailed information, visit our website at
http://www.cvrd.com.br/, INVESTOR - PRESS RELEASES - 2007.
DATASOURCE: Companhia Vale do Rio Doce CONTACT: Roberto Castello
Branco, +011-55-21-3814-4540, or , Alessandra Gadelha,
+011-55-21-3814-4053, or , or Daniela Tinoco, +011-55-21-3814-4946,
or , or Fabio Lima, +011-55-21-3814-4271, or , or Marcelo Silva
Braga, +011-55-21-3814-4353, or , all of Companhia Vale do Rio Doce
Web site: http://www.cvrd.com.br/
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