By Andrew Low
Vale Inco does not have immediate plans to restructure Sudbury mining operations, despite income dropping 33 per cent $1.36 billion in the first quarter, says a company spokesperson.
There has been “nothing flowing from the announcement of the results,” says Cory McPhee, a spokesperson for Vale Inco.
“We've (already) taken actions to restructure the organization and to constrain production,” says McPhee. “There is nothing we haven't announced that's planned at this point in time, but we're going to continue to watch the market and act accordingly.”
The nickel and iron ore giant announced the losses from its Brazilian headquarters on May 7. It marks the company's third consecutive decline in quarterly profit. Vale's quarterly sales fell 32 per cent to $5.32 billion.
The company's 2009 investment budget of $14.2 billion is likely to be scaled down and investment may drop 55 per cent to $50 billion because of the global credit crisis, according to bloomberg.com.
Much of the companies losses are due to decreased demand from the iron ore industry. Iron ore is the company's largest source of revenue. Nickel is the second.
So far, actions Vale Inco took in Sudbury include closing the Copper Cliff South mine and instituting an eight-week shutdown of operations from June 1 to July 27.
“The intent of all of these actions is to address both the immediate health of the business in a downturn, but also to position us so that we're effective and competitive in all price cycles and when the market recovers, we'll be well poised to take advantage of that,” says McPhee.
