* Company to take Q4 tax charges of about $448 mln
* Payments to end Swiss, Minas Gerais tax cases
* Vale Swiss tax exemptions renewed through 2015
SAO PAULO/RIO DE JANEIRO, Dec 19 Brazil's Vale
SA, the world's second-largest mining company,
settled tax disputes in Switzerland and Brazil and will take
charges of about $448 million against earnings in the fourth
quarter, the company said in statements on Wednesday.
Vale agreed to pay 212 million Swiss francs ($232 million)
to the Swiss federal government, and 663 million reais ($317
million) to the government of Brazil's Minas Gerais state.
Both cases date back to 2006.
Saint-Prex, Switzerland is home to Vale's European business.
Vale, the world's largest iron-ore producer, gets about t wo
thirds o f its output from Minas Gerais st ate.
The Swiss and Minas Gerais cases are the first of several
tax and royalty disputes Vale hopes to resolve in the coming
months with Brazilian and foreign governments. The largest case,
over whether Vale must pay Brazilian taxes on overseas earnings
already taxed by foreign governments, is worth 30 billion reais
That case is being reviewed by Brazil's Supreme Court and
Vale has won an injunction against payment until its challenge
of the taxes is resolved. Vale considers the Brazilian
government's tax claim to be illegal double taxation.
Vale had set aside $37 million for the Swiss claim and 135
million reais ($64 million) for the Minas Gerais dispute, the
Rio de Janeiro-based company said. As a result it will take a
fourth-quarter charge of $195 million for the Swiss taxes and
528 million reais for the Minas Gerais case.
The actual payments for the Swiss debt will start in January
and end in 2015. The Brazilian payments to Minas Gerais will run
Swiss Federal and local canton of Vaud tax exemptions were
renewed until 2015, provided Vale meets targets for employment,
real estate investment and cooperation with Swiss universities,
The Minas Gerais case involved a dispute over the
calculation of Brazil's ICMS goods and services tax. Under the
agreement, Vale accepted the use of t he market value of its iron
ore and other products as a basis for the tax rather than the
cost of production.
Minas Gerais state agreed to make no additional ICMS claims
against Vale for the 2008-2012 period.
Preferred shares of Vale, the company's most widely traded
class of stock, fell 1.37 percent to 42.44 reais in late
afternoon trading on Sao Paulo's BM&FBovespa exchange. The
benchmark Bovespa index of the most traded stocks on the
BM&FBovespa rose 0.75 percent