Barrick’s Acacia Mining keeps suffering from Tanzania row
Acacia Mining (LON:ACA), Tanzania’s No.1 gold producer, said Friday production fell sharply again in the second quarter of the year as a long-dragged row with the East African nation’s government over taxes continues to hit the miner’s bottom line.
The company, majority owned by Barrick Gold (TSX, NYSE:ABX), said gold production for the three months to June dropped 36% to 133,778 ounces as operations at two its three mines —Bulyanhulu and Buzwagi — were scaled back.
It means that Acacia’s production has dropped more than 40% to 254,759 ounces in the first half of 2018, when compared to the same period last year.
The slump is a result of Acacia’s forced move to scale back operations in Tanzania due to an ongoing ban on exports of metal concentrate, which represent about a third of the miner’s production.
The company, which kept its full-year production forecast unchanged (between 435,000-475,000 ounces, or at least 38% lower than 2017), noted it expected the final numbers to come at the top end of the guidance range.
Since March 2017, when the ban on concentrates came into effect, the Barrick’s unit has faced a series of accusations, including tax evasion and illegal operations, which prompted authorities to question staff and even block one of the firm’s senior executives from leaving the country in one occasion.
To make things worse, Tanzania’s President John Magufuli, served the company in July with a $190 billion tax bill.
Acacia, which is awaiting a final agreement between Barrick and Magufuli, confirmed in February that Chinese suitors were circling. It said at the time it had held talks with a “small number” of investors over the potential sale of stakes in some or all of its Tanzanian mines — Bulyanhulu, Buzwagi and North Mara.