UPDATE 5-Vale to scale back investment as global economy bites

Mon Dec 3, 2012 6:03pm EST
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* Vale plans $16.3 bln 2013 capex, 24 pct less than 2012

* Company may sell Norsk Hydro stake, non-core assets

* Costs jump at Amazon iron ore, Canada nickel mines

* May sell 50-70 pct of VLI SA rail, port firm - CEO

By Jeb Blount

RIO DE JANEIRO, Dec 3 (Reuters) - Brazil's Vale SA , the world's second-largest mining company, cut estimated 2013 capital spending by 24 percent after a global slowdown and a drop in iron ore prices led the company to rethink expansion.

The retrenchment comes after sluggish growth in the United States, China and Europe diminished demand for metals and weighed on the price of iron ore, Vale's main product.

Iron ore , a key ingredient in steel, fell to a three-year low in September, and is currently hovering around $115 a tonne. Vale forecasts a $110-$140 a tonne range in the coming year.

Vale will invest $16.3 billion in 2013, down from the $21.4 billion budgeted this year for new projects, research and development and to maintain existing mines and plants, according to a regulatory filing on Monday.   Continued...