London (Platts)--3Dec2012/832 am EST/1332 GMT

Vale's board of directors has approved an investment budget of $16.3 billion for 2013, involving capital expenditures of $10.1 billion for project execution and $5.1 billion dedicated to sustaining existing operations, as well as $1.1 billion for research and development expenditures, the Brazilian miner said Monday.

Capital and R&D expenditures in 2012 are estimated to reach $17.5 billion, lower than the $18.0 billion for 2011, which was "the peak expected for the foreseeable future," Vale said.

"The prospects of a moderate expansion of the global demand for minerals and metals over the medium-term do require a stricter discipline in capital allocation and a stronger focus on maximizing efficiency and minimizing costs," the company said in a statement. "Our priority has shifted from the marginal volume to the capital efficient volume, a move that has deep implications for the way we manage capital."

Of the total planned 2013 allocation, 57.6% -- $9.385 billion -- is earmarked for bulk materials, comprising $7.65 billion for ferrous minerals and $1.735 billion for coal.

Capital and R&D expenditure for base metals is set at $3.783 billion, or 23.2% of the total, followed by fertilizers at $1.331 billion (8.2%), logistics for general cargo at $532 million (3.3%), steel at $520 million (3.2%), power generation at $271 million (1.7%) and miscellaneous "others" comprising the remaining $475 million (2.9%).

Expenditures in sustaining existing operations are dedicated to improving operational efficiency, promoting excellence in the standards of health and safety, and environmental protection, the company said, adding that the budget for 2013 allocates $5.117 billion to fund these initiatives.

Research and development expenditures are being reduced, "as the focus is being narrowed to concentrate our exploration and project development efforts on those projects that create most value," Vale said.

As a consequence, "in the future we will have a smaller project pipeline, but one with higher potential to generate substantial value for our shareholders," the company added.

The R&D budget for 2013 is comprised of $382 million for mineral exploration, $465 million for conceptual, prefeasibility and feasibility studies, and $206 million to be invested in new processes, technological innovation and adaptation.

--Andy Blamey, andy_blamey@platts.com --Edited by Maurice Geller, maurice_geller@platts.com