Acacia hit by fresh roadblock in Tanzania ahead of Barrick’s bid deadline
Embattled Acacia Mining (LON:ACA) is facing fresh hurdles in Tanzania as the government has ordered it to stop using a waste storage facility at North Mara, its largest gold mine and the only one of the three the company owns that remains fully operational.
The directive follows a letter sent to Acacia last week, in which it was told the operation had to be investigated before it could export gold.
It also comes just two days before a deadline for the miner’s parent company, Canada’s Barrick Gold (TSX:ABX) (NYSE:GOLD), to make a final offer to the African miner’s minority shareholders, who rejected the preliminary bid submitted in May.
Acacia said Wednesday it would “immediately seek” a stay of international arbitration, for which hearings were due to start next Monday. It noted such mediation should be postponed to give Barrick, which owns 64% of the company, more time to settle a wider dispute dating back to 2017.
That year, President John Magufuli banned exports of unprocessed metal and slapped Acacia with a $190 billion tax bill — equal to almost two centuries worth of revenue.
In October, Tanzania’s top gold producer was hit with fresh charges of money laundering and corruption and some of its employees were detained. The moved was quickly followed by a fine of 300 million Tanzanian shillings (about $129,144) the government imposed to Acacia over allegations of breaching environmental rules at North Mara.
A framework deal, reached in February between Barrick and the East African nation, proposed that Acacia would pay $300 million to settle the tax claims. It also said the company, which spun off from Barrick in 2010, would split returns from operations with the government going forward.
Acacia has repeatedly said that before approving any agreement its board must review it first.
In the meantime, the company is reaching out to Tanzania’s National Environment Management Council to seek clarification on the ban against using North Mara’s only tailings facility by 6 a.m. local time on Saturday.
The body said Acacia had failed to contain and prevent seepage from the dam, which stores waste rock from the mine, it said.
“All seepage is and will be contained on the site, does not flow into the surrounding environment or present a risk of contamination to any public water source,” it said.
Barrick’s chance to submit a new bid expires on Friday. The world’s No.2 gold miner is expected to respond to a report by independent consultant SKR, which attaches a higher value to Acacia than the Canadian mining giant originally offered.