Vale Slumps Most in 8 Months as Brazil’s Court Delays Ruling

Vale SA, the world’s biggest iron-ore producer, slumped the most in eight months after Brazil’s Supreme Court postponed a ruling that may free the company from a $15.1 billion tax payment.

Vale slumped 4 percent to 32.36 reais at the close in Sao Paulo today, the most since July 24. The Rio de Janeiro-based company, which traded at 1.1 times its three-month average volume, was the second-worst performer among 15 mining companies tracked by Bloomberg.

The Supreme Court yesterday postponed until April 10 a vote on the constitutionality of taxing Brazilian companies on foreign units’ profits, after two justices issued their votes. While the final outlook will probably be positive for Vale, investors may take profits given the case’s lack of resolution, Bank of America Corp. analysts led by Felipe Hirai in Sao Paulo said in a note to clients yesterday.

“The final ruling form the Supreme Court should only come next week, when the trial resumes,” the analysts wrote.

Brazil is demanding Vale to pay 30.5 billion reais ($15.1 billion) in foreign units tax for 1996 to 2008, the company said April 2 in a filing with the U.S. Securities and Exchange Commission. Vale expects the country to file additional claims for the subsequent years, it said.

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