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To: LoneClone who wrote (55495)	3/31/2010 10:15:39 PM
From: LoneClone	Respond to of 192834

Peru mining chamber urges tax agency to 'clear the air' Wed Mar 31, 2010 11:01am EDT reuters.com By Luis Andres Henao LIMA, March 31 (Reuters) - The head of Peru's influential mining chamber urged the government's tax agency to clear the air about allegations, brought by labor unions, that companies underreported profits during the 2006-2008 commodities boom. The claims, made by Peru's national confederation of mining unions and first reported by Reuters last week, mark the latest in a fractious relationship between companies and workers in Peru, a leading global minerals exporter whose mining sector has suffered a series of strikes over the past two years. Peruvian law stipulates that mining companies share 8 percent of their profits with workers, but unions allege they did not get a fair slice of earnings that soared during the most recent commodities boom. "I don't believe and I can't accept that these mining companies are involved in any type of tax fraud," said Hans Flury, head of Peru's SNMPE mining chamber, which represents big mining companies in the Andean country In February, Peruvian precious metals miner Buenaventura (BVN.N) said it was being investigated by the tax agency, Sunat, but that it expected a favorable resolution and had paid all taxes as required. Then, last week, an official at the tax agency who declined to be identified said other mining companies were under investigation in addition to Buenaventura. He declined to say how many companies were under investigation or to name them. Luis Castillo, director of Peru's national confederation of mining unions, has asked the country's Labor Ministry and Sunat to review the books of all companies in the sector. "We can't go into Sunat ... but we have asked about all companies in the country, without exception," Castillo told Reuters. The Labor Ministry declined to comment. Castillo did not provide detailed financial statements to support his allegations. CLEARING THE AIR Officials at several global companies with mines in Peru, including Freeport McMoRan (FCX.N) and Xstrata XTA.AX, called Castillo's complaints baseless, saying they fully comply with tax and accounting standards. "We are a listed company that follows all the rules of Conasev (Peru's securities regulator) and Sunat to report profits and share them with workers," said Raul Vera, general manager of Shougang Hierro Peru (SHP.LM), an iron ore mine. Barrick (ABX.TO), meanwhile, said its Peruvian books were going through a routine audit and that Castillo's allegations were false. "We're undergoing a typical tax audit for the year 2006, which any tax company does under submissions," said Barrick's Vince Borg. "The Sunat does audit and they're doing a typical audit for 2006. This goes on for some time and has been happening for almost a year. There have no been issues raised as part of that," Borg said. Jose Miguel Morales, Buenaventura's lawyer, said unions have misunderstood Peru's tax code, which can allow companies to carry losses forward from previous years as credits against current or future earnings. In the case of Buenaventura, its results were rocky over the past several years as it took charges to unwind hedging contracts. Unions also mistakenly want the company to share profits based on all minority stakes it holds in all mines, instead of just those units it controls, he said. "There's no double accounting," said Morales, Buenaventura's lawyer. Flury, the head of Peru's mining chamber, urged Sunat to publicly say if union leader Castillo's claims have merit or not. "I think that it's up to Sunat to say what is true and clarify what Mr. Castillo is saying," he told Reuters. Sunat's director has declined repeated requests for interviews. Sunat officials referred questions to Conasev, Peru's securities regulator, which also declined to comment. (Reporting by Luis Andres Henao; Writing by Terry Wade; Editing by John Picinich)