Brazil, Vale Extend Talks on Royalty Payments for 60 Days
Vale SA (VALE3), the world’s largest iron- ore producer, received an extra 60 days to negotiate an end to a dispute over unpaid royalties, according to a press official at Brazil’s National Mineral Production Department.
Vale and the Brazilian government extended the talks after failing to reach an agreement over the amount of royalties owed by the company, the official at the government body, known as DNPM, said by telephone from Brasilia today. The official couldn’t be identified according to government policy.
Rio de Janeiro-based Vale has been fighting tax claims from the government amid growth in its exports and rising minerals prices. The company and the DNPM set up in August a group to discuss the amount of disputed royalties and failed to reach an agreement by the original October deadline.
The government is seeking tax payments on unpaid royalties from operations in Brazil, the company said in an April 28 filing with the U.S. Securities and Exchange Commission, estimating that the tax liability could be as much as 7.88 billion reais ($4.62 billion). Brazil is also looking for additional tax payments on profits at Vale’s foreign operations.
A Vale official in Rio, who declined to be named citing corporate policy, said the company won’t comment when contacted by Bloomberg News today.
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