Rio de Janeiro - Brazil mining giant Vale announced Monday it planned to cut investments for the third year in a row, down to $14.8 billion in 2014.
The figure is down 9.2 percent from 2013, and well below the $18 billion total from 2011.
The world's top iron ore producer said its board of directors approved capital expenditures of $9.3 billion for project execution, $4.5 billion to sustain existing operations and $0.9
billion for research and development.
It noted the move “reflects the greater focus on capital efficiency,” aiming to maximise shareholder value “through a smaller portfolio comprised of projects with a high risk-adjusted expected rate of return.”
“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” said Vale chief executive officer Murilo Ferreira.
Some 58.2 percent of resources from project execution will go to the iron ore and its distribution network, which generate most of the company's revenues.
Earnings rose 113.7 percent in the third quarter compared with the same period of 2012, due to a recovery in sales and higher prices.
Between July and September, the company 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 the equivalent of 7.1 billion euros (about $9.6 billion).
It said the payout will affect its 2013 net earnings to the tune of 6.6 billion euros.
The government had said the company owed twice as much in taxes, interest and penalties.
The accord covers the period running from 2003 to 2012.
Vale will make the payout in phases. - Sapa-AFP