30 July 2019

An estimated $1.1 billion in profit may have been shifted out of Africa by Australian miners in one year, according to a new report by Oxfam and the Tax Justice Network..

…The report also drills down into the mining operations owned by three Australian companies: Perseus Mining, MMG and Iluka Resources.

…But Perseus Mining managing director and CEO Jeff Quartermaine said the report had made "a series of unfounded allegations about Perseus's activities in Ghana that are false and misleading".

"The statement that 'the mine could have paid at least $57 million in income tax from 2012 to 2017' is false."

He added that the company was obliged to pay a royalty amounting to 5 per cent of revenue to the Ghanaian Government and had done so, since the first gold was mined in 2011.

"In 2018 alone, this amounted to US$19 million," he said.

…The report also claimed that MMG paid almost no tax in the Democratic Republic of Congo….

…In its right of response to Oxfam, the company noted that "MMG Ltd engages the Appleby law firm, and its affiliate, Estera for advice on legal and corporate secretarial matters".

MMG also stated it was "simplistic to apply an industry average profit margin to revenue, as there are different factors impacting the financial performance of a mine".

The report suggests Iluka's Sierra Rutile mine in Sierra Leone — which Iluka Resources acquired in 2016 — paid on average only 0.4 per cent of total revenues in tax between 2009 and 2015, largely due to tax concessions that the previous owners got.

…Iluka's chief financial officer, Adele Stratton, said: "Oxfam's report misrepresents Sierra Rutile's company income tax payments as its total tax payments to government.

"[The report is] providing an inaccurate and potentially misleading representation of Sierra Rutile's economic contribution in Sierra Leone."

…Ms Stratton said significant carried-forward tax losses were common for mining companies given the significant upfront capital outlay required for a mining operation.