Bloomberg cited Mr Luiz Inacio Lula da Silva president of Brazil as saying Vale SA has no reason to cut investments by USD 5 billion.

Mr Lula said that he was surprised that the Vale is slashing spending this year by 37% to USD 9 billion from a previously announced USD 14.2 billion.

He said that he planned to discuss the spending cuts with Mr Roger Agnelli CEO of Vale upon his return adding that the company has lots of cash on hand to fulfill its spending program and help Brazil’s economy resume growth.

Vale, while announcing CAPOEX cut, said that the reduction reflects basically the price of our cost denominated currencies, a review of equipment and implementation costs, delays in granting of environmental licenses and simplifications and changes in some projects.

(Sourced from Bloomberg)