Reuters reported that Brazilian miner Vale's decision to slash 2009 investments comes as no surprise to markets.

Mr Carlos de Alba of Morgan Stanley said that "Vale is reacting to the reality we are living in; I think it is the right move and it's not a big surprise. They don't need to accelerate the production of iron ore as rapidly as thought in the past given what is taking place with the steel industry."

Ms Juliana Chu of BES Securities said that "The truth is that this strategy was expected. Vale had already been showing signs it was taking the economic situation into account. It is reasonable to think that the company would extend its investment program."

Mr Pedro Galdi an analyst with broker SLW in Sao Paulo said that "In mining and in nickel Vale is big, but it is not as influential in coal and copper. It is seeking to boost its position in those segments, which are also linked to the steel industry."

Vale said that it was cutting this year's investments by 37% to USD 9 billion, citing costs related to foreign exchange movements and delays in obtaining permits. The investment cut comes after Vale has already slimmed down its operations, shedding workers and idling capacity as it hunkers down for a prolonged downturn in the global steel industry, the principal consumer of iron ore. Vale's new 2009 plan includes USD 5.9 billion for project investment and USD 1 billion for research and development.

(Sourced from Reuters)