Here's The Internal Email Glencore's Coal Boss Sent Explaining How Much Tax The Miner Pays

It was reported last week Australia’s biggest coal miner, Glencore, paid almost no tax over the past three years. There’s more on that here.

The miner has denied the allegations and refused to provide separate tax and royalty figures.

Business Insider has today got hold of an internal email the company’s coal boss Peter Freyberg sent which separates Glencore’s royalty and tax payments for the first time.

In the email Freyberg claimed Glencore paid $8 billion in tax and royalties since 2007. Of that $8 billion Freyberg said $2 billion corporate income tax had been paid.

He said royalties total about $4 billion over the period with approximately the other $2 billion paid out in “a variety of other taxes” including employer payroll taxes and stamp duty.

Here’s the email.

Subject: Glencore’s tax and royalty payments in Australia
Importance: High

Dear Colleagues

In recent days there has been ongoing media speculation regarding Glencore’s tax payments in Australia. This is as a result of a second, very inaccurate report in The Sydney Morning Herald (27th June). Several of the false claims have been repeated in the newspaper’s front page story today.

In response to every question we have received on this subject, including from the SMH, we have confirmed that we pay tax in Australia and comply with all our tax obligations here and in each jurisdiction in which we operate. We have open and regular meetings with the Australian Taxation Office as would any major business such as ours.

We have also consistently argued that tax on its own is a limited measure of our contribution – and we still believe this.

As stated previously, we have paid $8 billion in taxes and royalties in Australia since 2007. We include our royalty payments for a specific reason – even at times when the market is poor and some operations are loss-making, royalties are still paid. They are one of the most significant sources of revenue for State Governments.

Of the $8 billion tax and royalty figure, our corporate income tax payment was $2 billion. Our royalty payments represent approximately half of the combined figure, with a variety of other taxes such as employer payroll taxes and stamp duty making up the rest.

The SMH article of 27th June stated that Glencore hasn’t paid any tax in Australia over the past three years.

This is wrong.

As you will be acutely aware, for much of this period the resource industries in which we participate have faced significant challenges including low commodity prices, high input costs and a robust Australian dollar. Profitability is significantly lower than during the preceding four years – the reality is that a significant proportion of Australia’s coal mines are currently operating at a loss and although we run an efficient business, we are not immune to the market conditions. Despite these difficult circumstances, we paid more than $400 million in corporate income tax in respect of this period.

It is important to know that the SMH reports in question are not just wrong in relation to the income tax claims, the reports contain numerous factual errors and are misleading; for example, what we assume is a rounded up revenue figure is presented as (taxable) “income”.

In the days ahead, we will be following up directly with the newspaper to address the inaccuracies reported.

Regards

Peter Freyberg
Head of Coal Assets
Glencore

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