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Print[Ferro-Alloys.com]Brazilian mining giant Vale SA (VALE, VALE5.BR) said late Thursday it will take a $4.2 billion write-down on its nickel and aluminum investments, part of a series of charges that will hit the company's fourth-quarter earnings.
Vale's write-offs are part of a broader adjustment at the world's largest iron-ore miner as the company adopts a leaner profile amid sluggish global economic growth that caused Vale's net profit to slide 66% year-on-year in the third quarter. The company has reined in investments, plans to sell off some assets and is working to resolve existing tax disputes.
The latest impairment charges were related to the company's troubled Onca Puma nickel mine in Brazil, which was shuttered in June because of furnace troubles. Vale will rebuild one of the furnaces at a cost of $188 million, with production expected to start in the fourth quarter of 2013. The total charge before taxes for Onca Puma will be $2.85 billion, Vale said.
Vale will also take a $1.3 billion charge for the company's 22% stake in Norway's Norsk Hydro ASA (NHY.OS, NHYDY) because of a slide in Norsk Hydro's share price. Vale acquired the stake in early 2011, when it sold its aluminum production assets to Norsk Hydro.
Earlier this month, Vale Chief Executive Murilo Ferreira said the stake wasn't core to the company's operations and would be sold once valuations on aluminum companies become more reasonable.
Vale also said this week it would take a $232 million charge in the fourth quarter to settle a tax dispute with Switzerland and a $254 million charge for back tax payments to Brazil's Minas Gerais state.
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