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Villagers invade Acacia’s North Mara mine in Tanzania

Acacia Mining is Tanzania’s biggest gold producer and operates three major mines in the country — Bulyanhulu, Buzwagi and North Mara (pictured). (Image courtesy of Acacia Mining)

Hundreds of villagers near the North Mara gold mine in Tanzania invaded the mine for several days last week in an attempt to steal gold ore. The armed confrontation between police and villagers is the latest development in an ongoing dispute between the mine owner, Acacia Mining (LON:ACA) and the Tanzanian government.

Security forces arrested at least 66 people, 34 of whom were women used as human shields by groups of armed men who invaded the mine, Reuters reported on Friday. “This week different groups of over 500 people armed with traditional weapons such as machetes and spears invaded the premises of the Acacia mine… they even went to the gold processing plant,” police chief Morris Okinda told reporters. Several police were also injured.

The villagers were reportedly demanding compensation for their land and for alleged pollution caused by the mine.

The villagers were reportedly demanding compensation for their land and for alleged pollution caused by the mine.

The government of Tanzania accuses Acacia of under-declaring revenues and evading taxes worth tens of billion of dollars. As a result, a commission recommended that Tanzania demand the repayment of outstanding taxes, review the possibility of increasing government ownership of mines, and continue with an export ban on gold concentrate affecting the company.

Such prohibition was imposed on Acacia Mining at the start of March, when the president announced an export ban on copper and gold concentrates in an attempt to capture more of the value from mining for the country.

The gold producer, which spun off from Barrick Gold in 2010, said in a statement it was disappointed at the findings, adding it “strongly refutes” the “new unfounded accusations.”

Acacia is Tanzania’s largest gold producer with three mines – Bulyanhulu, Buzwagi and North Mara. 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.

Acacia has repeatedly rejected all allegations of wrongdoing and called for an independent inquiry into the government’s accusations.

In order to provide clear and factual information around the current situation, the company also created a micro-site, with its answers to Tanzania’s allegations, and details of the company’s contribution to the country’s economy.