UPDATE 2-Vale cuts 2016 budget, sees $443 mln mine disaster costs

(Corrects investment cuts to $6 billion in 2016, not by $6 billion; adds 2015 capital investment estimates in paragraph 2)

By Luc Cohen

NEW YORK, Dec 1 (Reuters) - Brazil's Vale SA prepared investors on Tuesday for a difficult 2016, unveiling a plan that includes cutting capital investment to about $6 billion and $443 million in expected costs to clean up a November mine disaster.

Investment in 2016 will fall from the $8 billion-$8.5 billion budgeted for 2015 in August.

CEO Murilo Ferreira said environmental recovery from last month's dam burst at the Samarco joint venture co-owned with BHP Billiton Ltd would take time and a lot of help.

"We acknowledge the seriousness of the moment and we are committed to helping and already engaged in joint coordination," he said at the company's annual "Vale Day" event in New York. The disaster killed at least 13 people last month.

During the event, Fitch Ratings put Vale on negative watch, citing expectations the company will need to provide significant financial assistance. The agency also downgraded Samarco's debt ratings to BB- from BBB.

Ferreira said cutbacks next year were aimed at achieving positive cash flow in 2017 despite heavy investment to complete an expansion of its giant Carajas iron ore mine system in the Brazilian Amazon.

He said the company's asset-sale plan, including 11 Valemax ships, would help limit a potential 2016 cash-flow shortage.

Vale has been struggling to catch up with its main rivals in the seaborne iron ore trade, BHP Billiton Ltd and Rio Tinto Ltd . The Australian companies completed the bulk of their expansion plans before iron ore prices started plunging in early 2014, while Vale was in the middle of its plans.

To help make up for the longer distance it must ship its iron ore, the main ingredient in steel, to top market China, Vale has continued to cut production costs.

The cash cost of Vale iron ore in China fell 3.7 percent to $31.20 a tonne in October from the $32.40 per tonne average in the third quarter. It has fallen 45 percent from $56.50 in the fourth quarter a year ago.

Vale said it expected to produce between 340 million and 350 million tonnes of iron ore in 2016, an amount that could increase to between 380 million and 400 million tonnes in 2017 and between 420 million and 450 million tonnes in 2020.

(Additional reporting by Jeb Blount, Gustavo Bonato and Caroline Stauffer; Editing by Lisa Von Ahn, Jeffrey Benkoe and David Gregorio)