On 20 January, Vale SA signed an agreement with Mitsui & Co., Ltd to structure the Japanese company's withdrawal (this year) from the Moatize mines and the Nacala Logistic Corridor (CLN), marking the first steps for the disinvestment of Brazilians in the coal business in Mozambique. From the statement made by Vale, two aspects are of concern: a) the announced transaction value of USD1 for each Mitsui asset; b) the fact that the mining company intends to disinvest in the coal business in Mozambique exactly at the end of the generous tax benefits granted to it by the Mozambican government.
During Vale's production years in Mozambique between 2011 and 2019, the country lost around 4.6 billion MT related to tax benefits on the production tax. In addition to this amount, there are losses relating to tax benefits on IRPC and other categories that it was not possible to ascertain due to the lack of data in publicly available documents.
Considering this case, an in-depth cost-benefit analysis of the tax benefits granted is urgent.
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