Hussein Massanza
JF-Expert Member
- Dec 26, 2012
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Acacia's shares have tumbled since the export ban was first announced (Source: Getty)
Acacia Mining has called for arbitration to settle a dispute between Tanzania's government and the owners of its Bulyanhulu and Buzwagi mines.
The gold miner and the government have been in talks to reach a solution to issues relating to a ban on the export of gold and copper concentrates.
Acacia was accused of hiding exports and underpaying the government by tens of billions of dollars over the two decades it has worked in the region, but it denies any wrongdoing.
Acacia today served notices of arbitration on behalf of Bulyanhulu Gold Mine Limited (BGML) and Pangea Minerals Limited (PML) in accordance with the agreed dispute resolution process.
Arbitration was seen as a necessary step in protecting the company and its shareholders, Acacia said, but it still feels a negotiated resolution would be the best outcome.
"The company will continue to work to achieve this," Acacia said in a statement.
The miner's share price has nearly halved since the ban was first announced in March. In afternoon trading, shares were down 0.63 per cent to 285.5p.
The miner will not participate directly in the discussions with the government as Tanzania wishes to continue the dialogue with Acacia's majority owner Barrick Gold Corporation, but any potential resolution is subject to Acacia's approval.
This news comes a day after Tanzania's parliament passed two laws allowing the government to force miners to renegotiate their contracts, and it will soon make a decision on a third.
Last week, the government also passed a finance act that imposed a one per cent clearing fee on the value of all minerals exported from the country.
Yuen Low, analyst at Shore Capital Markets, said: "If the finance act had been all, we would not have been unduly concerned. But the latest three bills are of great concern.
"We fear that Tanzania, once a relative haven of stability and sense in African mining, will continue down a self-destructive path...transforming into yet another African basket case."
Read more: Acacia shares pop as Tanzania agrees to fresh talks
Source: Cityam
