authorities are reviewing raw material transactions between
Glencore Xstrata Plc and its wholly owned Portovesme smelter on
the Italian island of Sardinia, the Baar, Switzerland-based
The confirmation came
after Italys Guardia di Finanza alleged that it had
uncovered a tax evasion scheme totaling more than 120
million ($159.5 million) at an unnamed lead and zinc producer
on the island.
"Glencore can confirm
that the Italian tax authorities are reviewing some
inter-company transactions between Portovesme and Glencore," a
company spokesman said in an e-mail. "All transactions were
conducted in accordance with applicable Italian tax laws and on
an arms length basis between Portovesme and the Glencore
Group. Portovesme continues to engage with the tax authorities
to ensure a swift conclusion to the review."
authorities investigation relates to transfer pricing for
raw materials sold to the zinc and lead producer by its parent
company, which Italian police said had been transacted at an
"excessively onerous price."
The parent company
obtained above-benchmark prices for raw materials it sold to
the lead and zinc smelter, contributing to the "heavy losses"
it reported to domestic tax authorities, the Guardia di Finanza
A version of this article was first published by AMM sister
publication Metal Bulletin.