December 02, 2008

CVRD sees no problem in funding USD 59 billion investment

Reuter reported that CVRD funding its USD 59 billion five year investment plans will not be a problem, but it is concerned about rising energy costs and transportation issues in Brazil. CVRD said that it will rely on cash flow from selling metal at current prices to finance the plan.

Mr Roger Agnelli CEO of CVRD said "Our investment was limited by physical issues, not financial issues. We could have gone beyond USD 11 billion in 2008."

Mr Agnelli said that "Our 2008 investment was not limited by a financial element, but by technical, engineering or equipment and some labor issues and also the issue of approvals for environmental permits. He said infrastructure, such as roads and power, was a major issue in some new mining projects and much of the investment would be to improve logistics at ports and roads.”

Last week, CVRD said it plans to spend USD 59 billion in 2008-2012 to more than double output of copper, expand production of iron ore and nickel and develop aluminum production. It earmarked USD 11 billion for the first year of the five year period.