Vale's Brazilian tax woes bite into miner's 4th-quarter profits
Vale's fourth quarter financial results are in, and the global mining giant says it lost almost $6.45 billion.
According to the news agency Reuters, Vale blames the loss on a $6.5 billion charge for an income tax settlement with the Brazilian government — which the company continues to dispute. Vale said it considers the payments to be a double taxation of its overseas operations.
This marks the largest quarterly loss for the company since 1997.
Vale's full-year profit in 2013 was $584 million, its worst annual result in more than a decade.
Despite the tax charges, which came as a financial loss, Rio deJaneiro-based Vale and its Chief Executive Officer MuriloFerreira continued the company's adjustment to slowing growth in China, the company's main market.
For both the quarter and the year, Ferreira managed to cut costs, write off bad investments and wring more cash from operations, while focusing more on Vale's main iron-ore business.
Cash flow from its iron-ore and ferrous metals business rose 50 percent in the quarter from a year earlier, far more than the rise in iron ore prices.
"It was a year in which our continued cost-cutting efforts, investment discipline and focus on our core business became more evident," said Vale in a statement. "It was also a period in which we established the foundation on which to deliver more volume growth and free cash flow in the future."
Vale is the world's No. 1 producer of the iron ore, the main ingredient in steel and the No. 2 producer of nickel, used to make steel rust-resistant. It is also a major producer of coal, copper and fertilizers.
with files from Reuters