Brasilia, Brazil — MININGREVIEW.COM — 19 October 2009 – Brazilian mining giant Vale “’ the world’s second-largest mining and metal company in market value “’ has announced that it intends to boost investment by more than 30% to around US$12 billion (R96 billion) next year.
Quoting O Estado de S. Paulo newspaper here, Reuters cited a source with links to the company as saying that Vale “’ the world’s largest iron ore producer “’ would invest more than US$5 billion (R40 billion) by 2015 to boost production capacity in Brazil’s mining state of Minas Gerais, in efforts to stave off criticism.
The company has faced harsh criticism in recent months from government leaders for not investing enough in Brazil, fueling speculation that President Luiz Inacio Lula da Silva is seeking to force out the company’s chief executive Roger Agnelli.
Vale came under pressure late last year when it laid off some 1 200 Brazilian workers, after idling capacity in the financial crisis, and again in May after it had slashed 2009 investments by 37% to US$9 billion (R72 billion).
President Lula said he would be meeting the head of Vale this week, and added that the company was preparing to announce another set of investments, but gave no details.
Vale’s second-quarter profits tumbled 84% in 2009, compared with a year earlier, as lower iron ore production and prices pushed earnings to around half of what analysts had projected.