RIO DE JANEIRO, Brazil, Oct. 11 /CNW/ -- 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
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
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
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
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 www.cvrd.com.br, INVESTOR
- PRESS RELEASES - 2007.
For further information:
For further information: Roberto Castello Branco, +011-55-21-3814-4540,
or firstname.lastname@example.org, Alessandra Gadelha,
+011-55-21-3814-4053, or email@example.com, or Daniela Tinoco,
+011-55-21-3814-4946, or firstname.lastname@example.org, or Fabio Lima,
+011-55-21-3814-4271, or email@example.com, or Marcelo Silva Braga,
+011-55-21-3814-4353, or firstname.lastname@example.org, all of Companhia
Vale do Rio Doce Web Site: http://www.cvrd.com.br