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Brazilian mining giant announces production expansion investments

Brazilian mining giant announces production expansion investments

Brazilian mining giant Companhia Vale do Rio Doce, or CVRD, on Friday announced plans to invest US$6.3 billion (euro4.9 billion) to expand production in 2007.
A large part of the company's capital expenditure budget has been earmarked for increasing the output of nonferrous metal, a CVRD statement said.
Nonferrous metals investments were pegged at US$2.55 billion (euro1.98 billion), slightly more than 40 percent of the overall budget.
This year's capital expenditure budget is 40 percent higher than the US$4.5 billion (euro3.5 billion) CVRD invested in 2006.
CVRD, the world's second-largest mining company after the Anglo-Australian BHP Billiton Ltd, said its 2007 capital expenditure budget would focus on consolidating the acquisitions made last year, especially CVRD-Inco.
CVRD-Inco, the result of CVRD's purchase of Canada's Inco Ltd in October, is responsible for the company's nickel projects and accounts for US$1.45 billion (euro1.12 billion) of the 2007 budget.
However, CVRD said that the key Goro nickel deposit in the French Pacific territory of New Caledonia was still under review. The company's statement did not provide any funding or development details about the project.
The Goro project is one of the largest nickel mines currently under development, with expected production capacity of 60,000 metric tons per year. It is seen as a key swing factor in the critically tight nickel market, as well as a key foothold for CVRD in its expansion in the Asia Pacific region.
However, the mine has been beset with troubles that have delayed its development and raising costs. Local community leaders and environmental activists have expressed concerns about the project's impact.
CVRD inherited Goro through its purchase of Inco.
CVRD, the world's largest iron ore producer and exporter, also said it produced 264 million metric tons of iron ore in 2006 and expected to easily top that figure in 2007.
The company's president, Roger Agnelli told reporters at a news conference, held to announce the capital expenditure budget, that he expected output should reach 300 million metric tons in 2007.