Glencore discloses payments by country
GLENCORE, one of the largest mining and marketing companies in the world, has disclosed the payments it has made to governments on a country-by-country and projectby-project basis.
The company, which has extensive coal mining operations in SA, contributed $83.5m to the South African fiscus in 2015.
The loss of control of Optimum coal mine in August 2015, following a dispute with Eskom, is expected to result in a reduction in its 2016 contribution.
In 2015, Glencore paid almost $3bn to governments across the globe in various taxes.
Australia was the single largest recipient, picking up $867m, while SA came in eighth place, with just 10% of what Australia received.
Glencore is the fourth major listed mining company to provide a breakdown of the payments it makes in the countries in which it operates. It follows Rio Tinto, Anglo American and BHP Billiton. The level of disclosure being provided is in line with Chapter 10 of the EU Accounting Directive, and is also in line with Glencore’s commitment to the Extractive Industries Transparency Initiative.
The initiative was established several years ago by Europeanbased nongovernmental organisations (NGOs), with the support of George Soros’s Open Society Foundation, in a bid to provide citizens in the host country with details necessary to hold their governments accountable.
Steve Kalmin, Glencore’s chief financial officer, said the company was committed to the highest standards of corporate governance and transparency, and that it supported increased transparency around the redistribution and reinvestment of such payments.
“The tax and royalty payments we make in connection with our activities can be used to provide the citizens of those countries with government services and infrastructure to improve their quality of life.” He said it was vital communities had access to clear information about what their governments earned from the extraction of natural resources.
“Ensuring that our host countries and communities have transparent information about our payments to their governments also reduces the potential for corruption by all parties.”
John Capel, executive director of Benchmarks Foundation, a community-based NGO that monitors the activity of mining companies, welcomed the move by Glencore, but said the payments had to be seen in the full context of the group’s mining operations, which often threatened the survival of environments and communities.