Tanzania in drive to increase domestic earnings from mining
Acacia share price extends losses
Acacia Mining on Tuesday said it was seeking an adjudicator to resolve its dispute with the Tanzanian government, a day after the east-African country passed two laws to force companies to re-negotiate their contracts.
Tanzania's President John Magufuli has sent shock-waves through the mining community with a series of actions since his election in 2015 that he says are to distribute revenue to the Tanzanian people.
Speaking at a televised public rally in northwest Tanzania on Tuesday, Magufuli said he had decided to rush through bills passed on Monday because Tanzania was fighting an economic war.
"We couldn't wait to pass the laws because of the large scale theft taking place in the mining sector," President Magufuli said.
Tanzania's largest miner Acacia, majority owned by Barrick Gold, said in a statement that notices of arbitration were served on behalf of companies that own its Bulyanhulu and Buzwagi mines, hit by an export ban.
"The serving of the notices at this time is necessary to protect the Company," Acacia said.
"But, this notwithstanding, Acacia remains of the view that a negotiated resolution is the preferable outcome to the current disputes and the company will continue to work to achieve this."
Tanzania accused Acacia of tax evasion in 2016 in a case that is ongoing and was this year accused of operating illegally.
And in March, Magufuli imposed an export ban on unprocessed ore to encourage the construction of local smelters, rather than allow profits from processing to be accrued abroad.
International mining companies have said mining must help to enhance the economic development of Tanzania, but the relationship has to be a fair partnership.
Shares in Acacia, which have nearly halved since the export ban in March, were down nearly 1 per cent by 1345 GMT.
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