Argentina has given Vale until the end of February to reschedule investment and operations at its Rio Colorado project for 2013, while rejecting the Brazilian miner’s bid for $2 billion in tax reductions. Argentine authorities and Vale have been in negotiations over the $5.9 billion potash operation, suspended in 2012 amid soaring costs—including rail construction plans, inflation and other economic factors. Company officials sought to defer sales taxes until operation.
Argentina’s 25% inflation rate and foreign exchange imbalances have dogged Vale. An overvalued peso has created a parallel exchange market leaving the currency nearly 60% weaker than the dollar in actual value. Vale has cut Rio Colorado’s 2013 budget to $600 million from $1 billion in 2012.
In Africa, meanwhile, Vale officials announced $7 billion in investments in seven nations, targeting iron ore and bauxite in Guinea, copper in Zambia and the Democratic Republic of Congo (DRC) and Angola and coal in Mozambique.
In Guinea, Vale has partnered with BSG Resources Ltd. to develop the Simandou iron ore project. In Zambia, the company joined African Rainbow Minerals Ltd. and state-owned ZCCM for the copper Lubambe mine, which started production in 2012 with a 45,000 mt capacity.
Vale started producing Mozambican coal in 2011 and now produces 4.5 million mt/y. It is also developing a $4.4 billion railway line traversing Malawi.
