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.”
In the past year, potash prices dropped to a new low. Could this be the perfect buying opportunity?
Get actionable data and industry insights from experts in the potash market. Click below to get your FREE market report on potash investing.