Extractive and Energy

Acacia Mining hints to close its Bulyanhulu mine by Sept. 30

Magufuli has threatened to shut all gold mines in the country if mining companies delay talks to resolve disputes over billions of dollars in back taxes

After a successive series of scandals and bad omen in the mining sector, a negotiation process in the East African country Tanzania has kicked off. The Government of Tanzania and Barrick Gold have started talks on resolving the tax dispute issue that had greatly affected its Canadian subsidiary company Acacia Mining.

“The Tanzanian team is well prepared to negotiate with Barrick Gold Corp on Tanzania’s claims towards its mining business in the country and will make sure it safeguards national interests,” a statement from the presidency said.

The Tanzanian side is led by Justice and Constitutional Affairs Minister Palamagamba Kabudi and Barrick by its Chief Operating Officer Richard Williams, the statement said.

Barrick Chairman John Thornton and Magufuli met in June in Dar es Salaam and agreed to hold talks about the dispute between the government and the country’s largest mining company.

The government accuses Acacia, which is 63.9 percent owned by Barrick, of evading taxes for years by under-declaring exports and has banned exports of gold and copper concentrates.

Acacia denies the accusations, which have pummelled its share price, and said last week it had been hit with a $190 billion tax bill, which is equivalent to four times the East African country’s annual gross domestic product.

Acacia, which says it is in full compliance with the law and has paid all relevant taxes, has said it will have to close its Bulyanhulu mine by Sept. 30 if the export ban is not lifted.

Magufuli has threatened to shut all gold mines in the country if mining companies delay talks to resolve disputes over billions of dollars in back taxes the government says they owe.

His stance has rocked the mining sector in the East African country, the continent’s fourth-largest gold producer, and driven Acacia’s shares down by more than 50 percent this year.

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