TORONTO (miningweekly.com) – The world’s second-largest mining company Vale on Monday announced that its board had approved a 2014 capital investment budget of $14.8-billion, the third consecutive year the company had lowered it.

Vale had approved capital expenditures of $9.3-billion for project execution and $4.5-billion for sustaining existing operations, as well as $900-million for research and development (R&D).

After peaking in 2011 at $18-billion, capital and R&D expenditures in 2014 would decline for the third year in a row, reflecting the greater focus on capital efficiency, which entailed among other things, pursuing increasing shareholder value through a smaller portfolio comprised of projects with a high risk-adjusted expected rate of return.

Vale said a case in point was the fact that more than 80% of the 2014 budget for project execution was dedicated to financing the expansion of the iron-ore output and distribution network.

This reflected a move to focus on bulk commodities, particularly on its iron-ore assets in Brazil.

Vale would also focus on the integrated mine-plant-railway-port coal operations, in Mozambique, and the Salobo copper/gold project, in Brazil.

“We are strongly committed to deploying capital only in world-class assets with large reserves, low costs, high-quality products and opportunities for low-cost brownfield expansions,” CEO Murilo Ferreira said in a statement.

He added that Vale had obtained all the environmental permits for building the company’s significant projects in Brazil – such as the Carajás and Conceição Itabiritos iron-ore mines.

Vale added that it would aim its R&D efforts at finding high-quality mineral resources by using new low-cost technological features that would result in a higher-return portfolio of projects.

The R&D budget for 2014 comprised $384-million for mineral exploration, $356-million for conceptual, prefeasibility and feasibility studies, and $163-million to be invested in new processes, technological innovation and adaptation.

The company expected its iron-ore output to reach 312-million tonnes, up from the 306-million tonnes expected for 2013.

Brazil-based Vale early in November reported that third-quarter net income was $3.5-billion. Earnings before interest, taxes, depreciation and amortisation, a measure of a company’s ability to generate cash profit from operations, was $5.88-billion.