Cia. Vale de Rio Doce, the world's largest iron-ore producer, said it will revise its $59 billion spending plan to help it meet ``more aggressive'' production targets for copper and coal.
The investment plan will also cover fertilizer, steel and logistics projects, Chief Financial Officer Fabio Barbosa said today on a conference call with analysts.
Chief Executive Officer Roger Agnelli is seeking to expand Vale's copper and coal output as profit growth slows. Under the current $59 billion expansion plan, which runs until 2012, copper output would double, coal production would surge almost seven- fold and iron ore would climb by 40 percent.
``Iron ore will continue to be the main motor of our cash generation,'' Barbosa said. ``We are revising the plan to include more aggressive production targets for other minerals, including copper and coal.''
Vale has the potential to expand output from its own copper reserves to as much as 1 million metric tons a year, mostly in Brazil, Agnelli told reporters yesterday in Rio de Janeiro, where the company is based. The company is also looking at copper reserves in the Democratic Republic of the Congo and will open a copper mine in Chile next year, he said.
Vale could eventually expand coal output to as much as 41 million tons a year from existing reserves, Agnelli said. The company could reach that target through a second-phase expansion at its Moatize project in Mozambique and the development of Belvedere in Australia, he said. Moatize is set to start in 2011 with annual capacity of 11 million tons of coal, used to make steel and generate energy.
Under current plans, copper production will rise to 592,000 metric tons a year, coal will increase to 15 million tons a year and iron ore output will climb to 450 million tons by 2012, Vale said.
Vale said this week that second-quarter profit rose to $5.01 billion from $4.095 billion a year earlier. The 22 percent gain compares with an average increase of 69 percent since the start of 2004.
The company's revised investment plan also will include steel and logistics projects, Barbosa said.
The projects ``are fundamental for the development of the Brazilian steel industry,'' Barbosa said.
Vale said Aug. 3 it plans to buy bulk carriers from a Chinese shipbuilder to boost its own shipping capacity to 30 million tons a year in 2012.
``We need more efficient logistics,'' Barbosa said. ``If we don't have efficient logistics, we can't be efficient in iron ore.''
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