Brazil mining giant Vale cuts output due to global crisis

Brazilian mining giant Vale, the world's largest producer of iron ore, said it was to slash output at mines in Brazil and elsewhere by up to 10 percent from Saturday to adjust to shrinking demand caused by the global financial crisis. . Vale will cut production at facilities in Brazil, China, France, Indonesia and Norway, and some 2,300 workers -- nearly four percent of the company's workforce of 62,600 -- will be put on temporary leave, it said in a statement. . The company decided to reduce "the a sweeping credit crunch, an economic scenario which puts Vale at severe risk given its focus on exports. . "The largest impact is in China (where the market) is decelerating more quickly," Agnelli said of one of Vale's largest markets. . "A forecast growth of 12 percent should fall to eight percent" in China. . The production cut is linked mainly to the difficulties in warehousing "tens of millions of tonnes of iron ore" which the global market is presently unable to absorb. . Shortly after the announcement Friday, Vale shares on the Sao Paulo stock exchange slid 2.61 percent. . Vale's cutbacks would represent a decrease in Brazilian export value of 2.2 billion dollars over 12 months, according to the vice president of Brazil's foreign trade association, Jose Augusto de Castro. . Vale is the second largest company in Brazil in terms of market value, at 65.4 billion dollars, behind only state oil concern Petrobras, according to data from local consultancy Economatica. — AFP Brazilian mining giant Vale, the world's largest producer of iron ore, said it was to slash output at mines in Brazil and elsewhere by up to 10 percent from Saturday to adjust to shrinking demand caused by the global financial crisis. . Vale will cut production at facilities in Brazil, China, France, Indonesia and Norway, and some 2,300 workers -- nearly four percent of the company's workforce of 62,600 -- will be put on temporary leave, it said in a statement. . The company decided to reduce "the mineral production of iron by the equivalent of 30 million metric tons per year," Rio-based Vale said in its statement released Friday. . But it stressed that it "will implement the investment plans for 2009 as announced on October 16, 2008." . Two iron pellet production plants responsible for nearly 20 percent of Vale's pellet output will halt production in November, it said. . Mining of manganese and feroalloys in Brazil will be halted for December 2008 and January 2009, Vale said, while its French unit in Dunkirk will be shuttered until April and the Vale plant in Mo i Rana, Norway, will be closed until June 2009. . With these adjustments, the company estimated a reduction of 600,000 metric tonnes of manganese and a reduction of 90,000 tonnes of ferroalloy over planned production in the first half of 2009. . The company's president, Roger Agnelli, said the slowdown is a reaction to a global contraction in industrial output as a consequence of the financial crisis that has been driven by a sweeping credit crunch, an economic scenario which puts Vale at severe risk given its focus on exports. . "The largest impact is in China (where the market) is decelerating more quickly," Agnelli said of one of Vale's largest markets. . "A forecast growth of 12 percent should fall to eight percent" in China. . The production cut is linked mainly to the difficulties in warehousing "tens of millions of tonnes of iron ore" which the global market is presently unable to absorb. . Shortly after the announcement Friday, Vale shares on the Sao Paulo stock exchange slid 2.61 percent. . Vale's cutbacks would represent a decrease in Brazilian export value of 2.2 billion dollars over 12 months, according to the vice president of Brazil's foreign trade association, Jose Augusto de Castro. . Vale is the second largest company in Brazil in terms of market value, at 65.4 billion dollars, behind only state oil concern Petrobras, according to data from local consultancy Economatica. — AFP