Report highlights negative social impact of tax avoidance by mining companies in Africa

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Company non-response
3 January 2010

Golden Star Resources did not respond to: Report highlights negative social impact of tax avoidance by mining companies in Africa.

Article
1 March 2010

[PDF] Unrestrained Consumption - on Africa's Expense

Author: DanWatch

The African continent contains a large proportion of the world’s metal and mineral reserves, and African countries are thus the proprietors of a valuable natural resource...[but] the African countries from which these materials are extracted remain amongst the poorest in the world. With this report DanWatch puts focus on the methods with witch international mining corporations exploit natural resources in Africa, without the countries' population benefiting from it. With the production of goldmines in Ghana as a specific case study, the costs and challenges of mining and the mining corporations’ methods of minimizing their tax contributions are explained...With capital flight and exploitation of the taxing system the international mining corporations minimize their tax contribution to the African countries. In this manner they work to the detriment of the development of these countries and instead entail large detriments to the environment and local population, in that work related accidents, breaches of human rights, and massive pollution of the water and air are common in the industry. [refers to Anglogold Ashanti, Gold Fields, Golden Star Resources, Newmont, Chirano Gold Mines (part of Red Back Mining). Business & Human Rights Resource Centre invited Golden Star Resources and Red Back Mining to respond; Golden Star declined to respond and Red Back Mining did not respond.]

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Article
1 May 2010

[PDF] Golden Profits on Ghana's Expense - An example of incoherence in EU policy

Author: DanWatch & Concord Danmark

The EU has committed to ensure that its various policies do not undermine social and economic progress in developing countries...However European policy on taxation of multiunational corporations shows an example of a crucial gap between intentions and reality. Multitnational mining corporations use aggressive tax planning and trade mispricing to avoid paying taxes in African countries...This means that money which could have been spent on the development of poor African mining countries is just creating even bigger profits for the large international mining corporations. [refers to AngloGold Ashanti]

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Company response
12 July 2010

Gold Fields' response

Author: Gold Fields

Gold Fields Ghana (GFG) is not cited in the DanWatch report as one of the mining companies in the country engaged in “aggressive tax planning”. By implication though, the report suggests that other companies are engaged in similar practices. For the record we have listed a number of our contributions to the Ghanaian economy since 1993, when the company acquired the almost defunct State Gold Mining Corporation’s underground mine at Tarkwa.

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Company response
13 July 2010

AngloGold Ashanti's response

Author: AngloGold Ashanti

The documents...make a number of general points on business in the developing world, for example regarding the use of tax havens, capital flight (whether legal or otherwise), tax evasion, “transfer mispricing” and the like. We note the authors do not allege that AngloGold Ashanti...are involved in any such activities in Ghana, nor specifically that they uncovered any such incidences during their intensive research in Ghana....However, for the sake of clarity, we should point out that we are domiciled in South Africa (not known as a tax haven); and our financial accounts are prepared and audited in line with both SA and US regulatory requirements...As a company, we take the view that our activities need to benefit the societies in which we operate. Failing that, the sustainability of our activities would be severely endangered. We also recognise that there have been cases where poor fiscal and other regulation has limited the benefits accruing to the people of those countries.

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Company response
13 July 2010

Newmont's response

Author: Newmont

The Danwatch reports are critiques of the socioeconomic impacts of mining in Ghana. Although very general and overall quite superficial, the report requires careful analysis and a detailed response...Newmont cannot of course respond to what other companies have allegedly done, but has seen no evidence of widespread practices as alleged by Danwatch. Speaking for itself, Newmont can affirm that those practices are prohibited by its own standards, by its Investment Agreement with Ghana and in most cases by applicable law.

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Company non-response
28 July 2010

Red Back Mining did not respond to: Report highlights negative social impact of tax avoidance by mining companies in Africa