Glencore Refutes Claims it Paid Zero Tax in Australia
Australia's largest coal miner, Glencore, paid almost no taxes for the last three years on income of $15 billion, according to a new report. The company is accused of reaped billions of dollars in profits while it “radically reduced its tax exposure by taking large, unnecessarily expensive loans from its associates overseas.”
Glencore’s coal chief executive, Peter Freyberg, sent an email to staff last week stating it had paid $400 million in taxes including $7.5 billion in royalties and taxes, including $2 billion in corporate income tax, in Australia since 2007.
“As you will be acutely aware, for much of this period the resource industries in which we participate have faced significant challenges including low commodity prices, high input costs and a robust Australian dollar,” Freyberg wrote.
“Despite these difficult circumstances, we paid more than $400 million in corporate income tax in respect of this period.”
The aggressive tax avoidance tactics of Swiss-based Glencore were identified in an independent analysis of the company’s accounts for Fairfax Media by an expert in multinational financing.
The analysis showed Glencore used irregularities in its borrowing and lending as well as significantly increasing its coal sales to related companies with no explanation – pinpointing a so-call transfer pricing, also known as profit-shifting.
The activity is a breach of Section IVA of the Income Tax Assessment Act – which deals with schemes designed to comply technically with the law but whose “dominant purpose” is to avoid tax.
''The reality is that the whole of the Glencore Xstrata Group is now run as a series of business units controlled by one company (Glencore Xstrata Plc, incorporated in the UK, listed on the London and other stock exchanges), with its registered office in Jersey (a tax haven) and its head office is in Baar (Switzerland),'' the report said.
Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.