UPDATE 1-Brazil iron giant Vale to diversify with copper

* Vale boosts 2015 copper output estimate by 45 pct

* Sees copper as attractive investment as prices rise
(Recast with output estimate, adds executive’s comments)

By Brian Ellsworth

SALAMANCA, Chile, Dec 2 (BestGrowthStock) – Brazilian miner Vale
(VALE5.SA: ), the world’s largest iron ore producer, on Thursday
boosted its 2015 copper output estimate by 45 percent to one
million tonnes as it seeks to diversify its business.

The miner wants to expand its base metals output to take
advantage of rising prices, especially for copper, and rival
top producers of the red metal like Chile’s state-run Codelco
[CODEL.UL] and Freeport-McMoran (FCX.N: ).

“Diversification is part of Vale’s strategy,” said Tito
Martins, Vale’s Executive Director for Base Metals at the
inauguration of a $140 million copper plant in northern Chile,
which will produce 18,500 tonnes of copper per year.

“Copper, given current market trends, appears to be an
extremely attractive investment,” he said.

Copper prices rose to all-time highs in November on the
back of an expected supply deficit in 2011 and strong demand
from top consumer China.

Vale previously expected to produce 691,000 tonnes of
copper in 2015.

That estimate, which was released in the company’s
investment plan in October, did not include additional output
from projects that are still in exploratory phase, he said.
Vale will be able to carry out most of this production increase
through existing projects, though Martins said it did not rule
out possible acquisitions of copper reserves.

Company officials said expansion at Tres Valles did not
appear likely, but said it would help the company get a
foothold in Chile, the world’s top copper producer.

Vale also has copper production in Brazil in Canada, where
copper is produced together with nickel at the Voisey’s Bay and
Sudbury mines.

The company produced 131,000 tonnes of copper during the
first nine months of 2010, though this figure was lower than
capacity because of an extended strike at its Canadian nickel

Vale’s 2011 target for copper output is 332,000 tonnes per

Copper represented less than 3 percent of Vale’s revenues
in the third quarter of 2010, compared with around 60 percent
for iron ore in the same period, according to the company’s
earnings statement for that period.

Vale has identified copper and fertilizers as key areas of
expansion for the company.
(Reporting by Brian Ellsworth; Editing by Sofina Mirza-Reid)

UPDATE 1-Brazil iron giant Vale to diversify with copper