Rios CVRD allocates US$6.3 bln for investment in 2007admin
Companhia Vale do Rio Doce (CVRD) hereby announces that its investment budget for 2007 amounts to US$ 6.334 billion.
This figure consolidates planned capital expenditure of our subsidiary CVRD Inco Limited (CVRD Inco) and is the largest capex budget for organic growth in the Company’s history.
The capex budget, together with the proposal for a dividend of US$1.65 billion for 2007, is consistent with CVRD’s financial policy guidelines which aim to preserve a healthy balance sheet and, more specifically, a level of leverage indicative of a low-risk debt profile.
“In 2006, our capital expenditure amounted to US$ 26.0 billion: US$3.241 billion on organic growth – US$2.765 billion on projects and US$476 million on research and development (R&D) – US$1.259 billion on the maintenance of existing businesses and US$21.5 billion on acquisitions.
CVRD made four acquisitions last year: Inco (US$19 billion), Caemi (US$2.4 billion), Rio Verde Mineracao (US$47 million) and Valesul (US$27.5 million).
The US$19.0 billion invested in the acquisition of Inco comprehends the price of US$17.8 billion, plus its net debt of US$1.2 billion.
About US$15.8 billion were paid to Inco shareholders in 2006 and US$2.0 billion were disbursed in 2007.
The purchase of the 39.8% stake in Caemi belonging to minority shareholders involved a share exchange, so there was no financial disbursement.
The capex budget for 2007 is US$ 1.8 billion higher than last year’s figure, ex-acquisitions, of US$ 4.5 billion.
This increase is explained by: (a) the consolidation of new subsidiaries, in particular CVRD Inco, which is responsible for US$1.45 billion of the investment programmed for this year; (b) a higher concentration of financial disbursement demanded by projects under development (Itabiritos, Onca Puma and Alunorte 6&7).
The maintenance of existing operations has been budgeted at US$1.698 billion.
The “stay-in-business” capex for the nickel operations in Canada (Ontario and Manitoba) has been budgeted at US$477 million, representing 28% of the total, given the age of these operations and the low level of investment in the period 2003-2005 – an annual average of US$ 208 million.
These investments are important for the conservation of these operations and extending their useful life.
In addition to considerable quantities of nickel production, in the case of the Ontario operation, there is also production of copper, cobalt, platinum group metals, gold and silver.
About US$4.636 billion is to be invested in organic growth, accounting for 73.2% of the total investment planned for 2007.
This amount includes expenditure of US$4.230 billion on projects and US$406 million on R&D.
SOURCE: Companhia Vale do Rio Doce S.A. CONTACT: Roberto Castello Branco, firstname.lastname@example.org, Alessandra Gadelha, email@example.com, or Daniela Tinoco, firstname.lastname@example.org, or Marcelo Silva Braga, email@example.com, or Theo Penedo, firstname.lastname@example.org, or Virginia Monteiro, email@example.com, all of CVRD, +011-55-21-3814-4540
Web site: http://www.cvrd.com.br