South Africa's Kumba pays $186 million to settle tax dispute

* Kumba says tax disputes go back a decade

* Company has said it expects 2016 profits to double

* Shares (Berlin: DI6.BE - news) fall over 7 percent

JOHANNESBURG, Feb 3 (Reuters) - South Africa's Kumba Iron Ore, a unit of Anglo American (LSE: AAL.L - news) , will pay 2.5 billion rand ($186 million) to settle a tax dispute with local authorities, the company said on Friday, sending its share price over 7 percent lower.

The disputes relate to assessments from 2006 to 2010 "and the tax treatment of the relevant issues in the years 2011 to 2015," the company said.

"Kumba had already provided for an amount of 1.5 billion rand in its annual financial statements for the tax years up to 2015, and an additional 1.0 billion rand will be accounted for in 2016 in respect of this settlement agreement," the company said.

"The settlement will be paid in full in Q1 2017, with appropriate adjustments made for current advance payments held on account."

Kumba, which Anglo American has signalled it may sell as it pivots its focus to platinum, diamonds and copper, said last month it expected 2016 profits to more than double from a dismal 2015, setting it up to outstrip forecasts when it reports earnings on Feb 14.

($1 = 13.4080 rand) (Reporting by Tiisetso Motsoeneng and Ed Stoddard; Editing by Barbara Lewis)