Kumba Iron Ore, majority owned by Anglo American, will appeal a tax ruling by the South African Revenue Service (SARS) saying it owes R5.5bn ($341m).

The sum includes R3.7bn in interest and penalties and relates to the tax years from 2006 to 2010, the company said in a statement on Monday.

Kumba Iron Ore plans to increase production at its Sishen mine by 1Mtpa in 2015

Kumba Iron Ore’s Sishen mine 

It applies to Sishen Iron Ore, which is 73.9% owned by Kumba and is Africa’s biggest mine for the steel making ingredient.

Sishen “has cooperated fully with SARS during the course of the audit, but, supported by its specialist tax and legal advisers, disagrees with SARS’ audit findings,” the company said.

Kumba will object “vigorously” to the assessment and apply to SARS to suspend payment of the money until the matter is resolved, it said.

Faced with an iron ore price that’s down 67% since the beginning of 2013, parent Anglo American said this month it will exit its 69.7% stake in Kumba by next year.

-Bloomberg