This is the latest effort by CEO Sam Walsh to preserve cash. Walsh has been on a cost cutting / capital raising spree since he took over as CEO, cutting 3,800 jobs and selling $3.3bn in assets. He plans to have another $5bn in cost out by 2015, presumably through more headcount reductions, and perhaps even more significantly, through less exploration.
When the CEO is this concerned about cash, and can't find the return he needs to make investors happy, he cuts costs and cuts CapEx in order to return it to them via dividends and share repurchases. We're certainly interested in what he sees that the current equity market doesn't (besides a mother of a bubble and complacency). Less demand for his iron ore, copper, coal, and aluminum product? Perhaps.
Walsh gives us a hint:
For further context on the degradation of CapEx by companies, Zero Hedge has done extensive work over on their site.