30 May 2014

South Africa: Lonmin Denies Tax Allegations

Photo: Werner Beukes/SAPA
Striking mineworkers (file photo).

Johannesburg — Accusations that platinum mining company Lonmin is negotiating in bad faith and might be guilty of tax and wage evasion are completely false, the company said on Friday.

"As a public company, Lonmin's financial statements are subject to regular and thorough auditing processes by an independent auditor," spokeswoman Sue Vey said in a statement.

Impala Platinum (Implats) on Thursday also rejected the allegations.

Vey said Lonmin's financial statements were submitted to and carefully assessed by South African tax authorities, with their financial statements and accounts on its website.

On Thursday, Association of Mineworkers and Construction Union (Amcu) negotiator Brian Ashley told the media in Cape Town that platinum companies were negotiating in bad faith and might be guilty of tax and wage evasion.

"We think that this has got to do with the process of transfer pricing or worse, mis-invoicing, which is an illegal offence," he said.

He claimed mining companies could be moving part of their profits to countries with low or no tax on profits to escape tax and avoid paying higher wages. His suspicions were based on a comparison of the companies' annual reports and annual market prices of mineral resources.

On Wednesday, newly appointed Mineral Resources Minister Ngoako Ramatlhodi announced the establishment of an intergovernmental technical team to resolve the marathon strike in the platinum mining sector.

Amcu members at Lonmin, Implats, and Anglo American Platinum downed tools on January 23, demanding a basic monthly salary of R12,500.

They rejected an offer by the companies to bring their pay to R12,500 by July 2017.

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