Multinational metals and mining corporation Vale has revealed its budgetary estimate of $14.8bn for 2014, which is lower for a third consecutive year.

The approved investment budget for 2014 includes project execution expenditure of $9.3bn, operational expenses of $4.5bn and research and development (R&D) expenditures of $0.9bn.

The more restricted investment plans come as Vale seeks to streamline, sell money-losing units and focus on Brazilian iron ore output to deal with slowing global demand for major commodities.

In 2013, Vale budgeted capital spending of $16.3bn. The 2014 plan is 18% less than the company’s record high budget of $18bn in 2011.

Vale, the world’s largest producer of iron ore and second largest producer of nickel, is seeking to expand its main iron ore business in 2014.

Consequently, about 80% of spending has been earmarked for the financing of the expansion of the iron ore production and distribution network, the development of the integrated mine-plant-railway-port-coal operations in Mozambique and the Salobo copper and gold project

The company intends to focus on capital efficiency, which entails, among other things, pursuing ‘shareholder value maximisation’ through a smaller portfolio comprised of projects with a high risk-adjusted expected rate of return

Vale chief executive officer Murilo Ferreira said the company is strongly committed to allocating capital only to world-class assets with big resources, low costs, high-quality products and opportunities for low-cost brownfield expansion.

"On the environmental permit front, all our major projects in Brazil – such as Carajás S11D, CLN S11D and Conceição Itabiritos – have already obtained the licenses required for their execution," Ferreira concluded.

In 2013, Vale sold assets worth at least $3bn, cut costs by $2bn and boosted dividends in a move to focus on its iron-ore business.

The iron-ore output is anticipated to increase to 312 million tonnes in 2014 from an expected 306 million tonnes this year, the company said.

On 27 November, Vale agreed to pay BRL22.3bn ($9.5bn) to the Brazilian Government to settle a decade-long tax dispute as a part of its strategy to consolidate its operations across the group in the wake of global commodity slowdown.

Vales’ strategy also includes divesting loss making assets and focusing on Brazilian iron ore output.