Vale SA, the world's second largest mining company by market value, will cut investments by $1.2 billion in 2013, its lowest level in three years, because of China's shrinking iron ore demand.

The Brazilian iron ore giant, said it will spend $16.3 billion in 2013, including $15.2 billion on existing and new projects and $1.1 billion on research and development.

The company invested $17.5 billion in 2012 and $18 billion in 2011.

The company said its record investment in 2011 will remain the highest in forthcoming years. China is the largest iron ore market for Brazil. As the largest iron ore producer in the world, Vale produces about 300 million metric tons of it annually, with half exported to China.

Up to 20 percent of China's imported iron ore is from Vale, which makes the company dependent on the Chinese market, analyst said.

dujuan@chinadaily.com.cn