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.
Barrick profit beats expectations as copper, gold prices up
Barrick Gold has reported a 78% jump in first-quarter profit, beating analyst expectations thanks to rising gold and copper prices, and said it was on track to meet annual forecasts.
Production in the second half is expected to be higher than the first, the gold miner said, thanks in part to the ramp-up of underground mining at the Bulyanhulu mine in Tanzania and higher expected grades at Lumwana in Zambia, reports Reuters
Barrick’s first-quarter gold production fell to 1.10 million from 1.25 million ounces due partly to lower grades at its Pueblo Viejo mine in Dominican Republic.
Adjusted profit surged 78% to $507mn in the quarter ended March 31, from $285mn a year earlier, and Barrick announced a 9 cent per share quarterly dividend.
Stronger prices helped boost Barrick’s revenue from its copper mines in Chile, Saudi Arabia and Zambia by 31% from the fourth quarter. Overall earnings per share were $0.29, ahead of analysts’ estimate of $0.27.
“We expect a positive stock reaction to the earnings beat and strong cash flow,” said Credit Suisse analysts.
Potential for South Africa merger
Barrick CEO Mark Bristow, who has championed mergers across the gold industry, said he backed the idea of South Africa-listed miners Goldfields and AngloGold Ashanti combining.
Speculation has been swirling around the two companies and Sibanye-Stillwater, whose CEO Neal Froneman floated the idea of a three-way merger.
“I’m a South African, and this country has such a great mining history and it would be great to see a real gold business come out of the many failed discussions that we’ve seen,” said Bristow.
Goldfields declined to comment. In a statement, AngloGold Ashanti said it was focused on delivering on its growth plan to unlock value from its portfolio of gold assets.
Bristow also said he had met with the Democratic Republic of Congo’s new mines minister and other officials and was continuing to work on getting $900mn belonging to its Kibali mine joint venture out of the country.
“We have a solution, it just needs to be sanctioned by the appropriate authorities which haven’t been around for a while,” he said, referring to a recent government overhaul by President Felix Tshisekedi.