Vale to spend $4.4 bln on iron ore expansion in '08

By Eric Onstad

MONTE CARLO, May 13 (Reuters) - Vale (VALE5.SA: Quote, Profile, Research), the world's biggest iron ore producer, is due to invest $4.4 billion this year to expand its iron ore business as it aims to boost output by 50 percent by 2013, the company said on Tuesday.

The company has a string of other potential projects that could expand production even further if strong demand from China continues, Fidel Blanco, international iron ore sales director, told Metal Bulletin's Iron Ore Symposium in Monte Carlo.

"We have another 26 projects to be implemented on market demand," he said.

Brazil's Vale (RIO.N: Quote, Profile, Research) posted a 12 percent increase in iron ore output to a record 296 million tonnes in 2007, the strongest growth rate last year among its major rivals.

Output is due to jump to 422 million tonnes by 2012 and 450 million by 2013.

This year the company plans $11 billion in capital expenditures with the biggest portion directed toward iron ore.

Iron ore expansions are expected to help feed heavy appetite from China, which now eats up half of the world's iron ore imports, up from only 11 percent a decade ago.

Vale is also seeking to boost iron ore demand in its domestic market by helping spur investment in steel plants in Brazil by taking stakes in the developments.