Tanzania officials question Acacia Mining staff in legal spat with Gov’t
Tanzania took in some of Acacia Mining’s (LON:ACA) employees and questioned them this week in an escalation of a legal dispute between the government and the mining company.
Early reports claimed that Tanzania had asked foreign workers of the gold miner to leave the country, but a spokesperson for Acacia denied that story.
“We are not aware of any international employees of Acacia in Tanzania who have been asked to leave the country as a result of the dispute, as some media outlets have speculated,” he said in an e-mailed statement.
Acacia has suspended dividends as it has been unable to export gold and copper concentrates since March, due to a ban imposed by the country’s Gov’t.
“We have been cooperating fully with the Government’s ongoing investigations, and a number of our colleagues have been interviewed as part of this, but none have been arrested,” he noted.
The news came out as Acacia, Tanzania's No.1 gold producer majority owned by Barrick, announced it has suspended dividends and now expects full year production to reach the lower end of its guidance range.
Delivering results for the six months ended June 30, the company said Tanzania’s ban on exports of gold and copper concentrates was the main cause its poor performance in the first half.
Despite increased production, revenue in the period came to $391.7 million, down 22% from the first half of 2016. Underlying earnings (EBITDA) fell 13% to $161.4 million and cash balance shrank 45%.
Shares in the company took a hit and were trading more than 10% lower in London to 252.30p at 1:00PM local time.
Acacia first locked horns with the government of Tanzania last year, as it was accused of tax evasion in a case that is ongoing. The dispute escalated in March, when the ban on concentrates exports came in effect, affecting two of its three mines or about a third of the firm’s output.
Tanzania accused Acacia of tax evasion in 2016 in a case that is ongoing. This year, it accused Acacia of operating illegally. The miner denies the allegations.
Less than four months later, the government accused Acacia of operating illegally and evading tens of billions of dollars in taxes by understating the amount of metal concentrate in exports from the three gold and copper mines it operates in the country.
The conflict pushed Barrick to intervene and Acacia to file arbitration notices for its Bulyanhulu and Buzwagi mines in order to protect its shareholders and the company, aiming to reach a settlement.
Last week, the miner agreed to pay higher taxes in the country and it’s now paying a 6% royalty, up from 4%, on metallic minerals including gold, copper and silver. The company, which spun off from Barrick Gold in 2010, also said it would continue to pay the recently imposed 1% clearing fee on exports.
World’s largest gold producer Barrick, which has a 64% stake in Acacia, is currently in talks with authorities in hopes of reaching a agreement over the claims against its subsidiary and the country’s current ban on mineral concentrate exports.
Acacia Mining owns and operates Tanzania’s three major mines — Bulyanhulu, Buzwagi and North Mara. The African nation is the continent’s third-largest gold producer.