AngloAmerican's South African arm Kumba Iron ore said Monday it was "preparing an objection" to the tax assessment for its 73.9%-owned subsidiary, Sishen Iron Ore Company (SIOC) received from the South African Revenue Service (SARS) covering the tax years 2006-10.
The bill is for Rand 5.5 billion ($345 million) and includes Rand 3.7 billion in both interest and penalties.
The company said SIOC had fully cooperated with SARS during the audit and, with the support of its tax and legal advisers, disagreed with the findings of SARS' audit.
"As a responsible corporate citizen, Kumba and its subsidiaries believe that all taxes owed under South African tax legislation have been paid and that we comply with all applicable tax laws in all jurisdictions in which we operate," Kumba's CEO Norman Mbazima said on the company's website.
Just a month ago Kumba announced it was to shed 4,000 jobs on the back of ongoing low iron ore prices, higher capital costs and increases in operating expenses.
Kumba saw a year-on-year fall of 10% in sales for Q4 last year and its main Sishen mine saw a fall of 17% in production in the quarter.
