In a detailed press release outlining both its growth philosophy and project development planning, Vale acknowledged that the current global economic environment poses risks and said it retains options to manage its project pipeline in response to evolving market conditions, stating: “Global economic activity is decelerating and faces downside risks. In a globalized world, the performance of emerging market economies—the drivers of consumption of minerals and metals—is not insulated from the cycles of developed economies, as they are affected through the various trade and financial transmission channels.

“Notwithstanding the risks, emerging economies are expected to provide a source of resilience, benefiting from strong productivity growth and improved economic policy frameworks. Therefore, more moderate growth is expected to take place over the next quarters in emerging economies, without causing disruption of their long-term growth.”

In terms of capex spending by business area, Vale has budgeted $4.8 billion for non-ferrous minerals, $4.2 billion for ferrous minerals, $3 billion for logistics, $822 million for power generation, $808 million for coal, $357 million for steel and $257 million for “others.” Following are some highlights of Vale’s plans for project development. More complete information is available in the 12-page press release, which can be downloaded from the company’s Web site, www.vale.com.

In non-ferrous metals, Vale has significant projects in nickel, bauxite, alumina, copper and fertilizers. The company expects to begin shipping product from its Goro nickel project in New Caledonia during the second quarter of 2009 and from its Onça Puma project in Brazil during the third quarter of the year.

In Canada’s Sudbury district, Vale has begun redeveloping the Totten mine, which was shut down in 1972. Current planning calls for the mine to produce 13 million mt of ore over a 20-year period at an average grade of 1.33% nickel, 1.81% copper and 0.120 oz/mt precious metals. Nickel production from the project is expected to average 8,200 mt/y.

Also in the Sudbury district, Vale is investing in its CC Deep project, which involves the replacement of the two current shafts at the Copper Cliff North and Copper Cliff South mines by a single shaft, along with the associated infrastructure. The new shaft will enable a 25% reduction in operating costs and deeper exploration of the Copper Cliff mines to 5,200 ft.

Elsewhere in Canada, pursuant to its agreement with the government of Newfoundland and Labrador, Vale is developing plans to build a nickel processing facility in the province to produce 50,000 mt/y of finished nickel and up to 5,000 mt/y of copper and 2,500 mt/y of cobalt, processing ore from the company’s Voisey’s Bay mine. A decision as to what technology will be used in the project will be made at the end of 2009. The investment remains subject to approval by Vale’s board.

Vale recently announced plans to build a new alumina refinery, Companhia de Alumina do Pará (CAP), and expand its Paragominas bauxite mine (Paragominas III), both located in the Brazilian state of Pará. The refinery will be located in Barcarena, Pará, near the alumina refinery of Vale subsidiary Alunorte. CAP will be owned 80% by Vale and 20% by Hydro Aluminum. Initial production capacity of the refinery will be 1.86 million mt/y of alumina, with the potential for future capacity expansions up to 7.4 million mt/y.

Vale has two projects under development in copper: Salobo, in Brazil, and Tres Valles, in Chile. In its first phase of development, the Salobo project will have a nominal capacity of 127,000 mt/y of copper in concentrate, with 130,000 oz/y of gold as by-product. Production is scheduled for the first half of 2010. Meanwhile, Vale has initiated planning for an expansion that is expected to double production capacity at Salobo by the second half of 2011.

Vale’s iron ore projects are located primarily in the Carajás region of Brazil and include investments in new mines, processing plants and especially logistics infrastructure. The Serra Sul project in the southern range of Carajás is in the preliminary stages of development and still requires approval of the Vale board of directors. It is being planned for initial production of 90 million mt/y of iron ore, which would make it the largest greenfield iron ore project in the history of the industry. Current budgeting for the project calls for a total investment of about $11.3 billion, and start of production is tentatively scheduled for the second half of 2012. The project is logistics intensive, with about 68.6% of total capex expected to go toward construction of a railroad and a maritime terminal to service the project.

Downstream from its iron ore operations, Vale is investing in pellet plants in Brazil, the Middle East, Southeast Asia, and China; in maritime transportation and distribution centers in the Middle East, Southeast Asia and China; and in steel plants in Brazil. The company is also investing $1.65 billion for the construction of 12 very large ocean-going ore carriers, each with a capacity of 400,000 dwt, for its maritime shuttle service between Brazil and Asia.

In coal, Vale is a relative newcomer but has a stated the objective of becoming a major global player. The company acquired coal assets in Australia in the first half of 2007 and is now investing in the expansion of the Carborough Downs underground mine in central Queensland from a current capacity of 1 million mt/y to 4.8 million mt/y by 2011.

In Mozambique, Vale has obtained all of the required licenses from the government for the construction of the Moatize coal mine in the province of Tete. Moatize will have a nominal production capacity of 11 million mt/y; 8.5 million mt/y of metallurgical coal and 2.5 million mt/y of thermal coal. Construction startup at the project is awaiting conclusion of negotiations involving railroad transportation and port handling services.

In energy management and generation, Vale invests in power generation projects for its own use as an efficient way to protect against price volatility, regulatory uncertainties and supply risks. The company currently generates about 25% of its global electricity consumption at plants in Brazil, Canada and Indonesia, and it is investing in the construction of three additional plants, two in Brazil and one in Indonesia.