Appeals court overturns $82 million fine against Georgian Manganese

3 July 2017
Manganese mine in Chiatura (Luka Pertaia/OC Media)

Georgia’s Kutaisi Court of Appeals overturned on 30 June a ₾200 million ($82 million) fine imposed on mining company Georgian Manganese.

The original fine was issued after a tax inspection by Georgia’s Revenue Service.

According to the Appeals Court, the Revenue Service issued the fine ‘without studying and assessing circumstances of utmost importance for the case’.

The Revenue Service issued the fine in April 2016, after studying the company’s activities between 2012–2015. The case included several points, including a dispute over the taxation of mining byproducts in Chiatura.

According to Tabula, the company presented the conclusions of audits to Kutaisi City Court and the Revenue Service by international auditors Ernst & Young and PricewaterhouseCoopers, but these were not taken into account.

The Revenue Service has now been ordered to reopen the case.

Georgian Manganese employs more than 3,000 people in Chiatura, making mining vital for the town’s economy. It has faced repeated accusations of employing exploitative labour practices, which labour rights groups allege have led to injuries and death. The company has denied any violations of the law.


[Read on Open Democracy Russia: Left in the dark: inside Georgia’s Chiatura mines]

Georgian Manganese, a subsidiary of Florida-based Georgian American Alloys, operates seven mines in Chiatura, and is a major producer of manganese. Georgian American Alloys, which is registered in Luxembourg, also owns a ferroalloy plant in Zestaponi — Georgia’s largest silicomanganese processing plant — and Vartsikhe, a nearby hydroelectric facility that partly powers factories in Zestaponi and Chiatura.

[Read on OC Media: Georgian Manganese protests state-appointed ‘special manager’]