Tanzanian President John Magufuli has fired his mining minister after results of an audit of containers carrying ore published Wednesday showed exports had been understated.
Minister Sospeter Muhongo was not the only casualty of the investigation, as the President also show Dominic Rwekaza, chief executive of Tanzania Minerals Audit Agency, the door and asked authorities to investigate those responsible of helping by mining companies to evade tax, Reuters reports.
The probe, launched by the Magufuli two months ago, found that the value of minerals within concentrates in containers at the country’s Dar es Salaam port was in some cases up to 10 times more than the declared amount, according to Acacia Mining.
Acacia (LON:ACA), a Tanzania-focused gold producer that spun off from Barrick Gold in 2010, is one of the companies singled out as under-reporting the mineral content of its exports. For that reason, the country’s government announced an export ban on the London-listed miner’s copper and gold concentrates would remain in place.
Shares in the firm dropped as much as 18% to 355.70 pence in mid-afternoon trading in London. Year to date, they are now down almost 5%.
“Acacia has not yet seen a full copy of the report, [but it] re-iterates that it fully declares everything of commercial value that we produce and pay all appropriate royalties and taxes on all of the payable minerals that we produce,” the miner said in the statement.
The company, which operates three major mines in the country, last year generated around 30% of its $316 million revenues from gold/copper concentrate, or $26 million per month.
Mining contributes 3.5% to the gross domestic product of Tanzania, which is Africa’s fourth-largest gold producer. The government, however, wants to increase that piece of the pie by requesting more taxes from the sector. It has been on a drive to add value to its exports rather than send raw materials abroad.
Additionally, the nation is pushing mining firms to list a 30% stake on the Dar es Salaam stock exchange by August, claiming the move will increase transparency and spread wealth from Tanzania’s natural resources.
Shares in other top mining companies operating in the African nation, such as AngloGold Ashanti (JSE:ANG) and Petra Diamonds (LON:PDL), were also affected by the news. The South African gold producer stock was trading more than 4% lower at 3:43 pm, while the diamond miner was down roughly 1.6% to 136.9 pence at 3 pm GMT.