Vale Inco will slow output to reduce costs as demand for iron ore and other metals soften amid the manic global economic market, company officials said.
Vale will halt or slow output in Indonesia, Dalian and China, where production costs are high, CEO Roger Agnelli said.
Agnelli said the company is going to clean house because it doesn't make sense to sell product that costs as much to produce it.
Demand for iron ore coming from China has all but stopped as a result of the global credit crunch and recession fears. China is now tapping its own large ore stocks, but demand is expected to rebound by 2009 once their stores are depleted.
Companhia Vale do Rio Doce SA, the mother company to Vale Inco is standing firm on a 12-per-cent price increase for iron ore sold in Asia. Vale's third-quarter net income soared 64 per cent as nickel, aluminum and other metals hit record highs despite the global slowdown.
The economic crisis won't affect Vale's US$14.2 billion investment plan for 2009, although investments for 2010 will likely fall, Agnelli said.
Companhia Vale do Rio Doce SA bought Inco Ltd. In 2006 and has since invested US$6.7 billion in various projects in the first three quarters of this year, 52 per cent more than in the same period last year.
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