Brazil mining giant Vale (NYSE: VALE) announced Monday it is cutting investments for the third year in a row, down to $14.8 billion in 2014, which is 9.2% less than last year’s budget and well below the $18 billion total from 2011.
As the world’s top iron ore producer focuses on lower-risk projects, it said that more than 80% of the project execution budget will be spent on expanding the firm’s existing iron ore production and distribution network, which generate most of the company’s revenues. Priority will also be given to its Mozambique coal project and the Salobo copper and gold project.
“We are strongly committed to deploying capital only in world-class assets with large reserves, low costs, high quality products and opportunities for low-cost brownfield expansions,” CEO Murilo Ferreira said.
The Rio de Janeiro-based company’s earnings rose almost 114% in the third quarter compared with the same period of 2012, thanks to a recovery in sales and higher prices.
Between July and September, Vale reported net profit of $3.5 billion, $1.86 billion more than in the third quarter of 2012.
Last week, Vale accepted a tax amnesty offer from the government that will see it pay the state about $9.6 billion, instead of the $14 billion original debt.
Also this month, the Brazilian miner sold its 22% stake in Norwegian aluminum producer Norsk Hydro (LON: NHY) for $1.65 billion and it is said to be negotiating the sale of an additional 26% of the unit to Canada’s Brookfield Asset Management Inc.