Polymetal hit with monster tax bill

Mining firm Polymetal International said it had lost a battle with the Kazakhstan authorities and now faced a 19 million dollar fine.

The firm said the Kostanay regional court in the country had ruled against its subsidiary, JSC Varvarinskoyeg, and slapped it with $14m corporation tax bill.

It will also pay an additional fine, increasing the total amount to around $19m.

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The legal argument concerned the tax deductibility of non-cash foreign exchange losses and of transportation, treatment and refining charges.

Polymetal warned no provision had been set aside in the financial statements for this settlement as of the end of June.

"[The] full amount of approximately $19m will be reflected as an expense in the financial statements for full year 2012," its statement said,