Besra suspends gold mining operations in Vietnam over tax dispute

22 July 2014 (Last Updated July 22nd, 2014 18:30)

Gold mining company Besra has suspended operations at its Bong Mieu and Phuoc Son sites in central Vietnam, alleging 'coercive measures' by the provincial Quang Nam tax department.

Gold mining company Besra has suspended operations at its Bong Mieu and Phuoc Son sites in central Vietnam, alleging 'coercive measures' by the provincial Quang Nam tax department.

Besra CEO John Seton said: "This unfortunate event is a direct result of intimidatory measures applied by the Quang Nam tax department, which mean that we cannot and will not continue to operate.

"Activity at both sites will resume once Besra is able to operate freely without coercion." 

"The Quang Nam tax department's actions appear to be the only case of such measures being applied in all of Vietnam, are in our view illegal, and fly in the face of every stated objective of the Government of Vietnam towards foreign investment."

Besra did not reveal the nature of the coercive measures but added that the national General Department of Taxation has written to its provincial counterpart requesting it to provide support immediately.

The company also noted that it has received support to operate the mines from both the provincial and national governments.

Previously, Besra faced similar challenges including a disputed export tax assessment at its Phuoc Son plant and poor weather conditions at Bong Mieu mine that forced the company to suspend operations.

At the time, the company found itself in a financial crisis and was forced to sell a major stake to a Swiss investor for $14.25m.

However, in early July, the company re-opened its Bong Mieu mine which provided a much-needed cashflow.

The company said in a statement that: "Activity at both sites will resume once Besra is able to operate freely without coercion."

NRI Energy Technology