Bloomberg reported that Vale SA (NYSE:VALE) has been denied the $2-billion tax break that it requested from the Argentinian government after costs for its Rio Colorado potash project rose to unanticipated levels.
As quoted in the market news:
Vale is selling assets and canceling projects as profits are expected to fall to a three-year low. It’s negotiating with a potential partner for the potash project and cut the venture’s 2013 budget to $611 million from $1.08 billion last year. Work has been suspended indefinitely while it reassesses Rio Colorado.
“Vale asked for deferring the VAT tax during the construction phase — we are talking about between $1.5 billion and $2 billion,” Perez said today in an audio file e-mailed by the province’s press office. “The Argentine president already told the Brazilian president that’s a lot of money.”