UPDATE 2-Vale Q4 loss $2.65 bln, twice as deep as forecast
* Loss due to one-time tax, mine writedowns
* Net sales fell 19 pct compared with a year earlier
* CEO: Cost-cutting, better prices, improved results vs Q3
(Adds company and analyst comment, additional results)
SAO PAULO, Feb 27 (Reuters) - Brazilian mining giant Vale SA posted its first net loss in 10 years in the fourth quarter after taking $5.66 billion in charges for underperforming mines and other mills, a loss twice as big as expected.
Vale lost $2.65 billion in the three months ending Dec. 31, compared with a profit of $4.67 billion a year earlier, according to a securities filing on Wednesday. It was the company's first quarterly loss since the third quarter of 2002.
The result was bigger than the $1.27 billion average loss estimated in a Reuters survey of analysts. Vale, the world's second-largest mining company, is the largest producer of iron ore and second-largest producer of nickel.
The price of iron ore <.IO62-CNI=SI> fell by 15 percent and nickel by 7.5 percent compared with a year earlier, adding to the impact of the one-time writedowns.
"The year 2012 was a challenging one for the global economy," the company said in a statement. "In this context our financial performance was affected disfavorably."
Lower prices brought weaker revenue. Net sales, or sales minus sales taxes, fell 19 percent compared with a year earlier to $11.72 billion, close to the $11.30 billion net sales outlook in the analysts' survey.
Earnings before interest, taxes, depreciation and amortization, fell 97 percent from a year earlier to $257 million, aided by the impact of the writedowns.
OPERATIONAL IMPROVEMENTS
As commodities prices fell, Vale Chief Executive Murilo Ferreira moved in recent months to slash investment and sell, write down or delay underperforming projects, particularly in nickel and aluminum. Global mining rivals such as BHP Billiton Plc and Rio Tinto Plc are making similar moves.
While a loss was expected on one-time items, increased efficiency through cost cutting and recovering commodities prices improved operating results, compared with the third quarter Ferreira said.
EBITDA, not including the one-time charges, was $4.39 billion in the quarter, an 18 percent improvement over EBITDA in the third quarter.
"We believe that investors are conscious of the losses that the company is going to provision and the impact that will have on the results," Luis Caetano, a mining analyst with Planner Corretora, a Sao Paulo brokerage, said in a report to investors before the result was announced.
He suggested that such an improvement could cause Vale shares to rise on Thursday when trading resumes in Sao Paulo and New York.
IMPAIRMENT CHARGES
In December, Vale said it would take an impairment charge of $4.2 billion on its Onça Puma nickel mine in Brazil's Amazon state of Para as well as a writedown on its 22 percent stake in Norwegian aluminum company Norsk Hydro ASA.
On Wednesday Vale also said it wrote down the value of its 27 percent stake in the Cia. Siderurgica do Atlantico (CSA) steel mill near Rio de Janeiro by $583 million and that it would take a mark-to-market charges of $1.03 billion on its Australian coal assets.
Germany's ThyssenKrupp AG, which owns the rest of the CSA mill, has put its stake in the troubled and money-losing mill up for sale.
These and other adjustments to writedowns announced in December, brought total impairment charges to $5.66 billion, or 67 percent more than Vale's average profit of $3.22 billion in the previous four quarters.
Vale also took $448 million in charges it announced only days earlier to settle Swiss and Brazilian tax disputes.
(Reporting by Jeb Blount; Editing by Brad Haynes, David Gregorio and Tim dobbyn)