Local February 14, 2013 | 11:14 am

Attorney says Xstrata failed to pay US$100M in taxes since 2007

Santo Domingo. – Several alleged fraudulent transactions allowed the miner Xstrata Nickel Falcondo to evade nearly RD$4.0 billion (US$100 million in income taxes since 2007, from the sale of iron and cobalt.

According to documents from attorney and mining expert Rafael Puello, the Xstrata Nickel failed to report income of RD$5.3 billion during the last five years, which he affirms is “extremely serious and shocking,” considering that the mining company would have operated only at 50% capacity, on the shutdown of its power plant during the time.

“From the results of the investigation I can say that in just two-and-a-half years of operations, Falcondo (Xstrata) has stopped paying taxes to the Dominican State worth up to around RD$2.65 billion when the agreements call for payment on up to 50 percent of the profits, plus RD$505 million in dividends, since the State has a 9.53 percent stake in the mine,” Puello said.

He said the total compensation of interest, penalties, fines and other fees covered by the law would be as much as RD$4.0 billion, along with taxes on the profits on exports, processed by a subsidiary of the parent company.

Based on his analysis of ferronickel’s price, the mining expert notes that revenue should derive from the value of iron (62%) nickel (37%) as well as the strategic metal, cobalt (0.93%), but Xstrata reports income from nickel, "as if it weren’t mining iron and also cobalt, and dodges taxes on the income from the latter."

He said he also based his claims on the miner’s data published during the last five years, a period Puello affirms Xstrata extracted 227 million pounds of iron and 3.4 million pounds of cobalt, with a total market value of around RD$3.8 billion.

0 0 votes
Article Rating
Notify of

Inline Feedbacks
View all comments