NEW YORK (TheStreet) -- Vale (VALE) was falling 0.9% to $14.94 Wednesday following news that a Guinean government committee recommended the miner and BSG Resources be stripped of their rights to the Simandou iron ore project.
The committee found that BSG Resources obtained the rights to Simandou, which it sold a 51% stake in to Vale for $2.5 billion, through corruption. BSG denied any wrongdoing, and Vale said that any alleged impropriety would have occurred before it was involved in the project.
Stripping BSg and Vale of rights would put the highly sought-after mineral deposit back into play.
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TheStreet Ratings team rates VALE SA as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate VALE SA (VALE) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity."