Glencore will make good on its promise to close down their Singapore marketing hub, but instead will pay a new entity within its global chain to market and distribute coal.
Glencore regional finance chief Nick Talintyre told a senate inquiry into corporate tax avoidance that Glencore would begin selling its directly from Australian operations to end customers.
However according to Fairfax, Glencore Australia revealed it intended to pay another third party within Glencore’s global body to handle these sales.
"Our global coal marketing function will market the coal and be paid an arm's-length marketing commission commensurate with this activity," a spokesperson for Glencore said.
Glencore, currently under audit by the Australian Taxation Office, has admitted that it had to pay an additional $42 million in tax for the 2014 financial year, after having posted a $1.8 billion loss in Australia.
Glencore’s original stated tax bill for that year was $77 million.
Glencore used Xstrata’s Singapore marketing hub to integrate with its own global coal marketing business after the acquisition in 2013.
In 2014 the company moved US$9 billion in sales to “related parties” in offshore locations, compared with US$10.7 billion in 2013.
Such offshore countries used by Glencore include low- or no-tax havens such as Bermuda, Singapore, UK, Barbados, Kazakhstan and Republic of Congo.