Brazilian iron ore giant Companhia Vale de Rio Doce (CVRD) plans to invest 6.5 billion U.S. dollars this year to support its expansion in China, said the company.

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The investment will go into the the company's nickel processing and coal mining activities in China, and also into equipment purchases, the CVRD's chief executive officer Roger Agnelli told Xinhua in an interview during his visit to Beijing this week.

"The economic outlook in China is positive and so is the investment environment and government planning," said Agnelli. "China is a good place to invest money."

The company will launch a 62 million U.S. dollar project in northeastern coastal city Dalian in July next year, according to Agnelli, which will churn out 32,000 tons of nickel products each year.

Agnelli pointed out that the new product will make the CVRD the second largest manufacturer of nickel products in China.

The CVRD produced 247,000 tons of nickel products last year. Output is expected to rise to 500,000 tons by 2010, driven by strong demand, said Agnelli.

The company is also considering expanding its investment in China's coal mines, with an anthracite plant and a coke project already launched in the country, he said.

The CVRD also intends to buy more equipment in China for use in power plants, ports and railways in Brazil, according to Agnelli.

As the world's largest iron ore producer and exporter, the company is in contact with China's Shougang Group, and hopes to provide pellet powder for China's leading steel producer.

"We can be a partner for any Chinese steel producer who wants to invest in Brazil," said Agnelli.

CVRD's iron ore output will reach 300 million tons this year, and a third of it is likely to be sold in China, as the country's steel production figures continue to sizzle.

Latest figures show China's crude steel output reached 422.7 million tons last year, 19.7 percent up year on year.

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