Vale SA (NYSE:VALE) initiates paying Brazilian government $674 million over a mining dispute

Vale SA (ADR) (NYSE:VALE) has initiated paying $674 million ($1.4 billion real) to  the Brazilian government for violating an agreement over mining royalties.

Vale, the world’s second largest miner, has decided to settle a10-year-old dispute with Brazil’s federal government, agreeing to pay 3 installments of 100 million reais in 2012 and remaining one installments of 1.1 billion reais in the next year.

It became very difficult for Vale (VALE) to achieve the planned level of earnings as iron ore prices declined in current year. These prices dropped because of China’s easing economic growth and a shortfall in the demand for the steel-making ingredient. The Brazilian company is the world’s biggest iron ore supplier. Morever, it is also accountable for over a quarter of sea-borne iron ore exports across the world.

Vale SA (ADR) (NYSE:VALE) hit 24.53% as their profit margin for the last twelve months and had an operating margin of 34.19%. Evaluating management effectiveness, return on equity was maintained at 15.96% in last twelve months. Return on assets for Intel was 8.89%. In the previous 52 weeks the price has traded between $15.77 – $26.87. The last session’s volume of 20.16 million shares competed with the average daily trading volume of 14.69 million shares.

Within the industry, Arch Coal Inc (NYSE:ACI) had a -7.17% profit margin in the last twelve months and an operating margin at -6.30%. Return on equity for this company was -9.48% in the last twelve months. Return on assets was -3.20%. In the last year the stock has moved within a range of $5.16 – $15.99. The last session’s volume of 15.87 million shares competed with the average daily trading volume of 12.73 million shares.

Stillwater Mining Company (NYSE:SWC) recorded a profit margin of 6.73% for the prior 12 months and an operating margin at 5.37%. Return on equity for this stock was 7.06% while return on assets was 4.53%.

Within the industry, Alpha Natural Resources, Inc. (NYSE:ANR) had a -40.70% profit margin in the last twelve months and an operating margin at -46.54%. Return on equity for this company was -45.70% in the last twelve months. Return on assets was -20.14%.