Bloomberg
Vale to book $4.2 billion charge for nickel and aluminum assets
Edited by : AL CIRCLE
2 min read
Vale SA, the world’s largest iron- ore producer, said it will book a $4.2 billion fourth-quarter charge after lowering the valuation of a nickel mine and its stake in aluminum producer Norsk Hydro ASA. (NHY)
Vale will take a $2.85 billion pretax writedown on its Brazilian nickel project Onca Puma after operations stopped and prices for the metal declined, the company said in a statement late yesterday. The Rio de Janeiro-based miner said it will also recognize a $1.3 billion pretax impairment on its 22 percent stake in Oslo-based Norsk Hydro.
“The downward volatility of aluminum prices and the macroeconomic uncertainties about the European economy have contributed to reduce the market value of our 22 percent stake,” Vale said. “Despite these charges, we remain confident on the long-term market fundamentals of the global nickel market.”
Chief Executive Officer Murilo Ferreira is selling assets, looking for partners and writing off unprofitable projects after shares slumped to the lowest in almost three years in September amid weaker demand from China and Europe. The company said Dec. 19 that it agreed to pay the equivalent of $553.1 million to settle Swiss and Brazilian tax disputes, of which about $451 million will be booked in the fourth quarter according to Bloomberg’s calculations.
Vale said the impairments, which won’t have an impact on its cash position, will be treated as exceptional charges on its 2012 financial statements, which are scheduled to be released on Feb. 27. The company expects to complete its annual assets review by that date, it said.
Vale also said yesterday that operations at Onca Puma, which were halted in June, will restart in the fourth quarter of 2013 after the company spends $188 million rebuilding one of the project’s furnaces.
Vale gained 0.7 percent to close at 40.81 reais in Sao Paulo yesterday.
Vale will take a $2.85 billion pretax writedown on its Brazilian nickel project Onca Puma after operations stopped and prices for the metal declined, the company said in a statement late yesterday. The Rio de Janeiro-based miner said it will also recognize a $1.3 billion pretax impairment on its 22 percent stake in Oslo-based Norsk Hydro.
“The downward volatility of aluminum prices and the macroeconomic uncertainties about the European economy have contributed to reduce the market value of our 22 percent stake,” Vale said. “Despite these charges, we remain confident on the long-term market fundamentals of the global nickel market.”
Chief Executive Officer Murilo Ferreira is selling assets, looking for partners and writing off unprofitable projects after shares slumped to the lowest in almost three years in September amid weaker demand from China and Europe. The company said Dec. 19 that it agreed to pay the equivalent of $553.1 million to settle Swiss and Brazilian tax disputes, of which about $451 million will be booked in the fourth quarter according to Bloomberg’s calculations.
Vale said the impairments, which won’t have an impact on its cash position, will be treated as exceptional charges on its 2012 financial statements, which are scheduled to be released on Feb. 27. The company expects to complete its annual assets review by that date, it said.
Vale also said yesterday that operations at Onca Puma, which were halted in June, will restart in the fourth quarter of 2013 after the company spends $188 million rebuilding one of the project’s furnaces.
Vale gained 0.7 percent to close at 40.81 reais in Sao Paulo yesterday.
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