Bloomberg quoted Cia Vale do Rio Doce as saying that global investment in the mining industry may fall by USD 60 billion this year after the company posted its third straight decline in quarterly profit.

Vale said that investment may drop 55% to USD 50 billion because of the global credit crisis, the Rio de Janeiro based company reported late yesterday. Net income declined 33% to USD 1.36 billion in the Q1 as iron ore output and sales slumped.

Steelmakers such as ArcelorMittal scaled back investment plans and cut production after the global economic slump curbed demand. Vale said that its own 2009 investment budget of USD 14.2 billion will probably be revised downwards this year.

Mr Ric Ronge who helps manage the equivalent of USD 1 billion at Pengana Capital including Vale stock in Melbourne said that “They’ve talked about the ability to be opportunistic at the right point in the cycle for longer term growth. Still, they’ve been winding back their own production and they are not immune to the operating environment.”

Vale said that it focused on cost cutting in the Q1 amid a recessionary environment introducing greater flexibility in its operations in a move to help rebalance markets which suffered unprecedented contraction.

(Sourced from Bloomberg)