The outstanding dispute between Bindura Nickel Corporation (BNC) and the tax authority over the failure by the mining company to honour a US$14 million tax debt is set to be heard by the courts soon as the miner recorded a decrease revenue.
Presenting the financial statement for the year ended March 31, 2020, BNC board chairperson, Muchadeyi Masunda said the over two years’ dispute between the company and the Zimbabwe Revenue Authority (ZIMRA), was still to be resolved before the courts.
“Except for this disclosure, no provision has been made in this year’s financial statements with respect of this contingent liability. Based on legal advice received to date, the company has acted within the statutes of the law,” he said.
Masunda said BNC directors remain positive a resolution will be reached and at the time of reporting, the company could not reasonably estimate when a court ruling would be determined.
The dispute between BNC and ZIMRA arose in 2018 with the authority demanding US$29 million emanating from assessments the national tax collector issued in February that year.
The assessments mainly related to historical issues pertaining to how the company was structured years ago, and issues arising from differences in the interpretation of standard commercial agreements in the mining industry.
The tax assessments were, however, revised downwards to approximately US$14 million.
Meanwhile, during the period under review, BNC sold 5 685 tonnes of nickel in concentrate compared to 6 410 tonnes sold in the comparative period last year registering a11% decrease in sales tonnage in line with reduced production.
Global nickel prices improved during the period under review, leading to an 8% year-on-year increase in the average price realised by the miner for the sale of its nickel in concentrate.
In spite of the improved price performance, an annual turnover of US$52.4 million was 1% lower than the US$54.0 million realised in the comparative period last year.
This was in sync with the decrease in sales tonnage referred to above. Cost of sales decreased by 7% from US$40.3 million last year to US$37.7 million in the year under review.