Kumba Iron Ore has agreed to pay the South African Revenue Service a tax bill of R2‚5 billion.

The Anglo American firm supplies high quality iron ore to the global steel industry.

The payment will settle a dispute relating to tax assessments received for the years 2006 to 2010 inclusive‚ and the tax treatment of the relevant issues in the years 2011 to 2015 inclusive‚ the company said in a statement on Friday.

Kumba produces iron ore in South Africa at Sishen mine and its new Kolomela mine in the Northern Cape Province and at Thabazimbi mine in the Limpopo Province.

Iron ore is exported to customers around the globe including China‚ Japan‚ Korea and various countries in Europe and the Middle East.

Themba Mkhwanazi‚ CEO of Kumba‚ said: “I am pleased that we have reached this important settlement with SARS‚ providing clarity for all and enabling us to focus our efforts on ensuring that Kumba continues to operate at the optimal level and furthers its position as a major economic and social contributor to the South African economy.”