Brazil's Vale To Focus On Fewer, But High-Value, Projects - Report
07/09/2012| 06:53pm US/Eastern
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RIO DE JANEIRO--Brazilian mining company Vale SA (VALE, VALE5.BR) plans to concentrate in future on fewer projects, but of a high investment value, Chief Executive Murilo Ferreira told O Globo newspaper in an interview Sunday.
The projects chosen include the Serra Sul iron ore project in Brazil's Carajas region and related logistics, on which Vale should invest a total of 40 billion Brazilian reais ($19.7 billion); the Salobo copper project in Carajas; the $6.5 billion second-phase expansion of the Moatize coal mine and the Nacala logistics corridor in Mozambique; and the $5.9 billion Rio Colorado potash mine project in Argentina, Mr. Ferreira told the Rio de Janeiro newspaper.
Vale's gaining of preliminary environment approval in late June for the Serra Sul project should guarantee even better iron-ore qualities for the company, O Globo said. The company meanwhile foresees political stability in Mozambique, where it recently gained approvals from the ministers' council for its rail and port projects, Mr. Ferreira said.
In Argentina, Vale is still awaiting environmental licenses for its rail and port projects, as well as a tax ruling, the CEO told O Globo. Mr. Ferreira noted that some aspects of the Argentina project are currently out of line with what was approved by Vale's board in 2010, which has led to a reassessment of the project.
Mr. Ferreira told O Globo that Vale will most probably keep its stake of around 27% in Brazil's Companhia Siderurgica do Atlantico, or CSA, steelworks, where its joint venture partner, Germany's ThyssenKrupp AG (TYKEY, TKA.XE), plans to sell its majority stake. Vale hasn't put its own CSA stake up for sale, the CEO said. However, the outcome could be different "if somebody arrives and wants to have 100% of the capital" Mr. Ferreira told the newspaper.
Write to Diana Kinch at diana.kinch@dowjones.com
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