Vale Declines Most Among Peers as Brazil Chases Taxes

Vale (VALE3) SA, the world’s biggest iron- ore producer, fell the most among peers after Brazil said it will pursue the full amount of a $2 billion tax claim.

The shares declined 0.9 percent to a one-month low of 39.40 reais at 3:53 p.m. in Sao Paulo. It was the steepest slide among 15 rival mining companies tracked by Bloomberg.

Brazil’s government is still seeking more than 4 billion reais ($2 billion) in overdue royalty payments from Rio de Janeiro-based Vale and may take the case to court, Energy Minister Edison Lobao said yesterday in an interview.

“The news is pushing down the company’s shares,” Pedro Galdi, chief strategist at Sao Paulo-based brokerage SLW Corretora, said in a phone interview. “It’s also being pressured by iron-ore prices and global stock markets.”

The government and Vale are in discussions on additional disbursements after the company set aside last year 1.4 billion reais for outstanding taxes, Lobao said from Brasilia.

“The 1.4 billion reais doesn’t solve the situation,” he said. “The government is charging over 4 billion reais and if an agreement isn’t reached this will go to court.”

Vale is “very confident” it won’t need to pay more, Chief Financial Officer Luciano Siani told investors in New York Dec. 3. Vale’s press office in Rio referred questions yesterday to Siani’s comments.

Iron ore for immediate delivery slid 0.2 percent to a two- week low of $145.1 a ton today, according to data compiled by The Steel Index Ltd. U.S. stocks retreated as data showed consumer sentiment unexpectedly dropped.

To contact the reporter on this story: Mario Sergio Lima in Brasilia Newsroom at mlima11@bloomberg.net

To contact the editor responsible for this story: James Attwood at jattwood3@bloomberg.net

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