Mopani Copper denies undervaluing metal prices to evade taxe
Mopani Copper denies undervaluing metal prices to evade taxes
Friday, 25 Feb 2011
Mopani Copper Mines, a unit jointly owned by Vancouver listed First Quantum Minerals and Glencore AG international of Switzerland disputed reports suggesting that it was undervaluing the price of metals and evading tax under the country’s laws.
In an advertised notice in the local press by Mr Emmanuel Mutai CEO of Mopani Mine, the miner stated that it was untrue the reports suggesting that it was undervaluing the price of the copper, describing the report as flawed and incomplete the findings of the draft tax report.
Mopani which stated that it has invested in excess of USD 1 billion in Zambia noted with concern public comments following the leaking of a flawed and incomplete draft tax audit report about its operations and refuted the conclusions contained in the report. It argued that the report was based on broad and flawed statistical analyses and assumptions.
From the outset, the draft report fails to recognize that Mopani is a tolling facility where 50% of the copper it produces comes from its own mines and the rest is made from third party concentrates.
Mr Mutati explains the inconsistent results and is one of the main reasons the draft report has been unable to reconcile figures. The company questioned the motives behind the leaing of the report since the false allegations it contains damage the reputation of the country and the mining an industry which is vital to the economy.
He said that Mopani contended that it has always been open and transparent in its finances with the authorities and that the company has also been annually audited by independent auditors arguing that each year an independent auditors report has given Mopani a clean bill of health.
He added that both Government and ZCCM Investment Holdings PLC have seats on the MCM board of directors with full access to information and participation in decision making, making the release of the flawed report more disturbing. It was Mopani’s wish that to develop the Zambian economy, there is need for investment from local and foreign investors.
Mr Mutati noted that companies in the mining sector should be held accountable like anyone else. Mopani Mine regretted after examining the draft report that was full of errors compared to what it had prepared and having presented to taxation authorities, the Zambia Revenue Authority and other bodies.
He said that the reality is that Mopani represents an investment of over USD 1 billion by its shareholders since privatization, ensuring the long term future of a business that will deliver value to Zambia and its partners for decades to come. The investment enables the company to be one of the largest employers in the country with a labour force workforce of almost 15,000 at its Nkana, Mufulira units including contractors.
Recently, debate ensued between government and its former finance minister over a pilot audit conduct on Mopani Copper Mines which highlighted inconsistencies in production and revenue figures that the foreign miner submitted tax administration.
The report stated that the company had under priced the value of copper compared with the revenue realized, prompting former finance minister Ngandu Magande to accuse government of having been compromised by foreign mining companies operating in the country.
According to the audit report for Mopani Copper Mine for the period 2006 to 2008 which included the trial balances from 2003 and conducted by Grant Thornton and Econ Pöyry of Nordic region, irregularities at Mopani hinge on its relationship with its parent company, Glecore AG of Switzerland and cover practices such as alleged transfer pricing inflated operation costs outright under pricing of copper for exports and irregular hedging.
However, finance minister Musokotwane and mines minister Maxwell Mwale contended that the government had not been compromised as adduced by Magande. Government did not have a hand in any shortcomings over Mopani Copper Mines report and were yet to be availed the report.
Mopani Copper Mine which operates mining units in Kitwe and Mufulira is 73.1% owned by the Swiss commodity trader, Glencore AG and the firm received EUR 48 million loan from the European Investment Bank.
(Filed by Mr Kapembwa Sinkamba SteelGuru Correspondent Zambia)
http://www.steelguru.com/metals_news/Mo ... 93040.html
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