Wed Mar 9, 2011 2:41pm GMT
* Company does not agree with debt value, Folha says
* Dispute could reignite tensions between CEO and gov't
SAO PAULO, March 9 (Reuters) - Vale, the world's largest iron ore producer, could be forced to pay up to 3.9 billion reais ($2.4 billion) in back royalties to the Brazilian government, the newspaper Folha de S. Paulo said on Wednesday.
The Mines and Energy Ministry's mining oversight unit claims there are loopholes in the way royalties are calculated and that Vale has paid too little for extracting iron ore from Minas Gerais and Para states, Folha said. It did not say how it obtained the information.
Vale (VALE.N: Quote) (VALE5.SA: Quote) does not agree with the ministry's assessment and says any back royalties would total not more than half of the ministry estimate, Folha said, citing an official who declined to be quoted by name.
No one at Vale's office in Rio de Janeiro was available to comment.
The dispute over royalties has sparked worries among Vale officials that the company's license to explore for the mineral in Carajas, the world's biggest iron ore mine, could be revoked, Folha reported.
Vale Chief Executive Roger Agnelli and Mines and Energy Minister Edison Lobao have discussed the issue in recent days and might meet in Brasilia for talks, Folha added.
The royalties dispute could reignite tensions between Agnelli and the government. According to the accounts of people familiar with the situation, some political leaders sought to push Agnelli out of the CEO job during the administration of former President Luiz Inacio Lula da Silva.
Some of those officials claimed at the time that Vale ought to invest more in industries such as steelmaking and infrastructure, a move that could put Vale at the center of a conflict of interest with its biggest clients -- steelmakers.
President Dilma Rousseff's administration and Congress are considering changes to the mining law, including higher royalty payments and tougher oversight.
Vale is a former state-run company that was privatized in the 1990s, though the government still retains control of the firm's voting shares through the state development bank and state-linked pension funds. ($1 = 1.645 real) (Writing by Guillermo Parra-Bernal and Inae Riveras; editing by John Wallace, sourced Thomson Reuters)
* Dispute could reignite tensions between CEO and gov't
SAO PAULO, March 9 (Reuters) - Vale, the world's largest iron ore producer, could be forced to pay up to 3.9 billion reais ($2.4 billion) in back royalties to the Brazilian government, the newspaper Folha de S. Paulo said on Wednesday.
The Mines and Energy Ministry's mining oversight unit claims there are loopholes in the way royalties are calculated and that Vale has paid too little for extracting iron ore from Minas Gerais and Para states, Folha said. It did not say how it obtained the information.
Vale (VALE.N: Quote) (VALE5.SA: Quote) does not agree with the ministry's assessment and says any back royalties would total not more than half of the ministry estimate, Folha said, citing an official who declined to be quoted by name.
No one at Vale's office in Rio de Janeiro was available to comment.
The dispute over royalties has sparked worries among Vale officials that the company's license to explore for the mineral in Carajas, the world's biggest iron ore mine, could be revoked, Folha reported.
Vale Chief Executive Roger Agnelli and Mines and Energy Minister Edison Lobao have discussed the issue in recent days and might meet in Brasilia for talks, Folha added.
The royalties dispute could reignite tensions between Agnelli and the government. According to the accounts of people familiar with the situation, some political leaders sought to push Agnelli out of the CEO job during the administration of former President Luiz Inacio Lula da Silva.
Some of those officials claimed at the time that Vale ought to invest more in industries such as steelmaking and infrastructure, a move that could put Vale at the center of a conflict of interest with its biggest clients -- steelmakers.
President Dilma Rousseff's administration and Congress are considering changes to the mining law, including higher royalty payments and tougher oversight.
Vale is a former state-run company that was privatized in the 1990s, though the government still retains control of the firm's voting shares through the state development bank and state-linked pension funds. ($1 = 1.645 real) (Writing by Guillermo Parra-Bernal and Inae Riveras; editing by John Wallace, sourced Thomson Reuters)
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