Tanzania allows Acacia to restart gold exports, but bigger problems remain
The Tanzanian government today lifted a ban which stopped Acacia Mining from exporting gold from its biggest mine, as a dispute between the two sides continues.
The gold miner was slapped with the ban a month ago, facing claims that it had broken mining regulations in the country.
Read more: Acacia accepts increased takeover bid from Barrick
The country’s mining commission today lifted the ban, but said it found regulation breaches and asked Acacia to submit a new mine plan by Friday.
The decision is separate to a more damaging ban, which has prohibited Acacia from shipping a gold-bearing ore out of the country for several years.
Soon after President John Magufuli took charge in 2015 he started intervening in the mining and agriculture sectors.
Last month the World Bank released a 5.2 per cent growth report for Tanzania, lower than the seven per cent rise Magufuli’s government had claimed.
It cited a decline in investment, export and private lending.
The bank accused the government of “unpredictable and interventionist” policies. Foreign direct investment has more than halved since 2013, while the private sector has put the breaks on lending.
In 2017 Magufuli went all-out for Acacia, claiming it owed $190bn (£157bn) in back taxes for allegedly under-reporting the amount of gold in its ore. The fine represents about four times Tanzania’s annual GDP. At the same time he slapped the company with an export ban.
Barrick Gold, which owns nearly 64 per cent of London-listed Acacia, has reached an agreement with Magufuli which would let Acacia resume operations in the country.
However, the agreement came with a condition to change the ownership of Acacia, causing Barrick to table a bid for the remaining shares.
Read more: Deadline extended for Barrick’s Acacia bid
After a back-and-forth over price, Acacia last month accepted Barrick’s offer. Today it said that shareholders will be asked to vote on the issue on 3 September.
Showing its second-quarter results today, Barrick revealed that it has “a great deal of work to be done in getting to grips with the Acacia operations, which have not been managed by Barrick; implementing the dispute solution agreed in principle by executive chairman John Thornton and the Tanzanian president; and rebuilding relations with in-country stakeholders”.