CVRD updates iron ore mine expansions

Brazilian mining giant CVRD (NYSE: RIO) provided an update of its iron ore expansion projects to the press the other week. Expanding output by 73Mt will cost US$706mn. In Carajas, Para state where CVRD's northern system of production is located, the company will see its production increase in two stages. Upping output to 70Mt/y from 56Mt/y, by end-2004 will cost an average US$10.28/t. In a second phase (2005-2006), Carajas' output will increase to 85Mt/y at a cost of US$12.30/t. Meanwhile at operations in the iron ore quadrangle of Minas Gerais, Itabira will see output increase to 46Mt/y from 43Mt/y by 2006 at a capex of US$18.70/t. Greenfield project Fábrica Nova's first phase will produce 10Mt/y by 2005 at cost of US$5.67/t, and upping output to 15Mt/y by 2009 will cost the same amount. Brucutur I, another greenfield project, will spend US$12.22/t to produce 12Mt/y by 2006. Lastly, Fazendão will invest US$6.35/t to produce 14Mt/y. Rio de Janeiro-based CVRD is the world's largest producer and exporter of iron ore.